8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 27, 2010

Flagstar Bancorp, Inc.

(Exact name of registrant as specified in its charter)

Michigan	1-16577	38-3150651
(State or other jurisdiction of	(Commission File	(I.R.S. Employer
incorporation)	Number)	Identification No.)

5151 Corporate Drive, Troy, Michigan	48098
(Address of principal executive offices)	(Zip Code)

(248) 312-2000

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

This Current Report on Form 8-K does not constitute an offer to sell or a solicitation of an offer to buy the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Matters discussed in this Current Report on Form 8-K contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that involve substantial risks and uncertainties, including but not limited to the risk that, because of business, economic or market conditions or for any other reasons within or outside of the Company’s discretion, the Company may decide not to pursue the offerings, the offerings may not be consummated, stockholders do not provide the requisite approvals, or proceeds from the offerings are not used as disclosed. In addition to the risks and uncertainties identified above, reference is also made to other risks and uncertainties detailed in reports filed by the Company with the Securities and Exchange Commission. The Company cautions that the foregoing risks and uncertainties are not exclusive.

Item 2.02 Results of Operations and Financial Condition

On October 27, 2010, the Company issued a press release regarding its results of operations and financial condition for the three and nine months ended September 30, 2010. A copy of the press release is included as Exhibit 99.1 to this Current Report on Form 8-K. The Company will include final financial statements and additional analyses for the three and nine months ended September 30, 2010 as part of its Quarterly Report on Form 10-Q covering that period.

Item 7.01 Regulation FD Disclosure

On October 27, 2010, the Company held a quarterly conference call to review third quarter 2010 earnings and furnished a slide presentation to accompany the call. A copy of the slide presentation used by the Company on the conference call is furnished as Exhibit 99.2 to this Current Report on Form 8-K and incorporated by reference herein.

On October 27, 2010, the Company issued a press release announcing the commencement of underwritten public offerings of $380 million of the Company’s common stock and convertible preferred stock. A copy of the press release is attached hereto as Exhibit 99.3 to this Current Report on Form 8-K and is incorporated herein by reference.

The information in this Item 7.01, including the exhibit attached hereto, is furnished pursuant to Item 7.01 and shall not be deemed “filed” for any other purpose, including for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that Section. The information in this Item 7.01 of this Current Report on Form 8-K shall not be deemed incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act regardless of any general incorporation language in such filing.

Item 8.01. Other Events.

On October 27, 2010, the Company issued a press release regarding its results of operations and financial condition for the three and nine months ended June 30, 2010. A copy of the press release is filed herewith as Exhibit 99.1 and is incorporated herein by reference.

The Company also filed herewith supplemental disclosure regarding earnings drivers outlook and repurchase risk in the form of presentation slides as Exhibit 99.4 to this Current Report on Form 8-K, and such additional information is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

     (d) The following exhibits are being furnished herewith:

Exhibit No.	Exhibit Description
99.1	Press Release, dated October 27, 2010 regarding results of operations and financial condition

Exhibit No.	Exhibit Description
99.2	Flagstar Bancorp, Inc. Conference Call Presentation Slides — Third Quarter 2010 Financial Results
99.3	Press Release, dated October 27, 2010 regarding commencement of the underwritten public offering
99.4	Supplemental Disclosure

SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

	FLAGSTAR BANCORP, INC.
Dated: October 27, 2010	By:	/s/ Paul D. Borja
		Paul D. Borja
		Executive Vice-President and Chief Financial Officer

EX-99.1

Exhibit 99.1

NEWS RELEASE
For more information, contact:
Paul D. Borja
Executive Vice President / CFO
Bradley T. Howes
Investor Relations Officer
(248) 312-2000
FOR IMMEDIATE RELEASE

FLAGSTAR REPORTS 77% REDUCTION IN NET LOSS; LAUNCHES
$380 MILLION PUBLIC EQUITY OFFERING

TROY, Mich. (October 27, 2010) — Flagstar Bancorp, Inc. (NYSE:FBC) (the “Company”), the holding company for Flagstar Bank FSB (the “Bank”), today reported a 77% narrowing in net loss in the third quarter 2010 as compared to the loss in second quarter 2010. In addition, the Company launched a $380 million public equity offering.

Key Items for Third Quarter:

• Net loss of $(22.6) million improved by 77% from prior quarter

• Incurred an $11.9 million expense related to prepayment of FHLB advance and restructured 7 other tranches of advances, which will positively impact net interest margin

• Gain on loan sale income of $103.2 million (margin of 135 bps), increased by 61% from prior quarter

• Residential mortgage originations of $7.6 billion, increased by 40% from prior quarter

• Mortgage rate lock commitments of $11.0 billion, increased by 32% from prior quarter

• Bank net interest margin of 1.55%, increased from prior quarter level of 1.53%

• Loan fees of $24.4 million, increased by 20% from prior quarter

• Net servicing revenue of $23.2 million, increased by 55% from prior quarter

• Provision for loan losses decreased by 40% from prior quarter to $(51.4) million

• Asset resolution expense decreased by 25% from the prior quarter to $(34.2) million

• Non-performing loans of $911 million, decreased by 10% from prior quarter

“We are pleased with the significant improvement this quarter, which reflects growth in top line revenue, combined with decreasing credit costs and a continued improvement in asset quality,” said Joseph P. Campanelli, Chairman and Chief Executive Officer. “In the face of a sluggish economy and compressed margins, we were able to increase our pre-tax, pre-credit cost income by 53% from the prior quarter. The third quarter includes an $11.9 million expense related to the prepayment of a $250 million FHLB advance. Excluding prepayment expense, net loss in the third quarter would have been $(10.7) million, as compared to $(88.0) million in the second quarter.”

Campanelli further stated, “The improvement in the quarter was driven by a number of positives in our core business. Compared to the prior quarter, residential mortgage originations increased by 39% and gain on loan sale income increased by 60%, while credit related expenses decreased by 30% and non-performing loans decreased by 10%. We were also able to keep expenses flat and maintain historically high capital ratios.”

“In addition”, Campanelli said, “We took a big step forward in our transformation toward becoming a full-service super community bank, announcing the launch of our new small business banking line of products and services. We are excited that we can now offer a robust set of banking and credit products to the nearly half a million small businesses near our branches. The commencement of our public equity offering and potential accelerated disposition of impaired assets is just another step in our turnaround.”

For third quarter 2010, the Company had a net loss applicable to common stockholders of $(22.6) million, as compared to a net loss of $(97.0) million for the second quarter 2010. On a per share basis, third quarter 2010 had a loss of $(0.15) per share (diluted) based on average shares outstanding of 153,405,000, a decline from the second quarter 2010 loss of $(0.63) per share (diluted) based on average shares outstanding of 153,298,000. For the third quarter 2009, the Company reported a net loss applicable to common shareholders of $(298.2) million, which was a loss of $(6.36) per share (diluted) based on average share outstanding of 46,853,000.

On a year-to-date basis, the Company reduced its net loss by 54% during the nine months ended September 30, 2010 as compared to the same period for 2009. For the nine months ended September 30, 2010, the net loss applicable to common stockholders totaled $(201.5) million, or $(1.57) per share (diluted) based on average shares outstanding of 128,411,000, as compared to a net loss of $(442.2) million, or $(16.58) per share (diluted) based on average shares outstanding of 26,678,000 during the same period 2009.

Results from the quarter included the following:

Asset Quality

Non-performing assets decreased to $1.1 billion at September 30, 2010, from $1.2 billion at both June 30, 2010 and September 30, 2009. This category of assets is comprised of non-performing loans (i.e., loans 90 days or more past due, and matured loans), real estate owned and net repurchased assets and excludes repurchased assets that are insured by the Federal Housing Agency (FHA). The decline in non-performing assets reflects a reduction in the amount of non-performing loans.

The allowance for loan losses at September 30, 2010 decreased to $474.0 million and equaled 6.48% of loans held for investment and 52.0% of non-performing loans. The allowance for loan losses at June 30, 2010 was $530.0 million and equaled 7.20% of loans held for investment and 52.3% of non-performing loans. At December 31, 2009, the allowance for loan loss was $524.0 million and equaled 6.79% of loans held for investment and 48.9% of non-performing loans. The decline in the allowance resulted from the decline in the balance of delinquent loans in both residential first mortgage and commercial real estate loans during the third quarter of 2010.

Non-performing commercial real estate mortgages decreased to $238.6 million at September 30, 2010 as compared to $324.9 million at June 30, 2010. Non-performing residential first mortgage loans decreased 1.7%, to $651.9 million at September 30, 2010, as compared to $663.5 million at June 30, 2010. The decrease reflected reductions of $1.1 million in the 90-120 day category and $10.5 million in the over 120 – day and in the matured delinquent loans categories. The Company has received, and is currently evaluating, a firm offer on $473 million of its non-insured non-performing residential first mortgage loans, at a price of 44% of book value before reserves.

The Company maintains a secondary marketing reserve on its balance sheet, which reflects the estimate of losses that it expects to incur on loans that it sold or securitized into the secondary market. At September 30, 2010, the secondary marketing reserve was $77.5 million, as compared to $76.0 million at June 30, 2010 and $66.0 million at December 31, 2009. For the third quarter 2010, the Company incurred a secondary marketing reserve provision expense of $13.0 million, as compared to $11.4 million in the second quarter 2010.

Capital

Flagstar Bank remained “well-capitalized” for regulatory purposes at September 30, 2010, with regulatory capital ratios of 9.12% for Tier 1 capital and 16.87% for total risk-based capital.

Mortgage Banking Operations

Gain on loan sales increased to $103.2 million in the third quarter 2010 as compared to $64.3 million for the second quarter 2010 and $104.4 million for the third quarter 2009. This reflects the increase in volume, through the increase in both interest rate lock commitments and loan production, and the increase in margin. Gain on loan sale margins increased to 1.35% for the third quarter 2010, as compared to 1.22% for the second quarter 2010 and 1.37% for the third quarter 2009.

Mortgage rate lock commitments increased to $11.0 billion during the third quarter 2010 as compared to $8.3 billion during the second quarter 2010 and $8.7 billion during the third quarter 2009. Loan production, substantially comprised of agency-eligible residential first mortgage loans, increased to $7.6 billion in the third quarter 2010, as compared to $5.5 billion in the second quarter 2010 and $6.6 billion in the third quarter 2009. For the nine months ended September 30, 2010, loan production was $17.4 billion, which is comprised of $9.9 billion originated in the correspondent channel, $6.0 billion originated in the broker channel and $1.4 billion originated in the retail channel.

At September 30, 2010, our loans serviced for others increased to $52.3 billion and had a weighted average servicing fee of 31.5 basis points. This was an increase from $50.4 billion at June 30, 2010 with a weighted average servicing fee of 32.4 basis points and a decrease from $56.5 billion at December 31, 2009 with a weighted average servicing fee of 32.1 basis points.

Net Interest Margin

Net interest margin for the Bank increased to 1.55% for the third quarter 2010 as compared to 1.53% for the second quarter 2010, and decreased slightly from 1.58% for the third quarter 2009. The increase from second quarter 2010 reflects a 9 bps decrease in earning asset yields with average interest earning assets declining $0.4 billion, which was partially offset by a 15 bps decline in funding costs, with average interest bearing liabilities decreasing only $0.3 billion. The decline in funding costs is due primarily to reduced costs of retail deposits and reduced borrowings and rates associated with Federal Home Loan Bank (FHLB) advances and the absence of any repurchase agreements for the third quarter 2010 as they were repaid during the second quarter 2010.

As part of the Bank’s focus on reducing its borrowing costs, it initiated a restructuring of several of its FHLB advances intended to better match its funding maturities with asset maturities, maintain an asset sensitive balance sheet structure and obtain the benefit of the current lower interest rate environment. To this end, the Bank prepaid a single advance otherwise due in 2011 and restructured seven other advances totaling $1.9 billion to extend maturities during which time the now-current interest rates would apply. As a result, the Bank reduced its annual advance cost on the $1.9 billion of restructured advances by 123bps.

Net Interest Income

• Third quarter net interest income decreased to $41.1 million, as compared to, $42.4 million during the second quarter 2010 and $47.6 million during the third quarter 2009. The decrease reflects the decline in the average balances of interest-earning assets, including higher-yielding trading securities and loans held for investment, offset in part by the reduction in funding costs due to lower balances and average rates for FHLB advances.

• Third quarter loan loss provisions declined by 40% from the second quarter, to $51.4 million, as compared to $86.0 million for the second quarter 2010 and $125.5 million for the third quarter 2009. The reduced provision expense during third quarter 2010 reflects the decline in 90-day and over delinquencies on first mortgage loans held for investment between June 30, 2010 and September 30, 2010. Delinquent first mortgage loans (90 days and over) held for investment declined to $651.9 million at September 30, 2010 from $663.5 million at June 30, 2010. The decline in the provision for third quarter 2010 also reflects the lower balance of non-performing

commercial real estate loans, following charge-offs of $57.6 million, of such loans which were previously reserved for during prior quarters.

Non-interest Income

Non-interest income increased to $144.9 million for the third quarter 2010, as compared to $100.3 million for the second quarter 2010 and $66.2 million for the third quarter 2009. Non-interest income included the following components:

• Gain on loan sales increased 61% to $103.2 million as compared to $64.3 million for the second quarter 2010, reflecting both the 33% increase in interest rate locks on mortgage loans, to $11.0 billion in the third quarter 2010 from $8.3 billion in the second quarter 2010, and the 43% increase in residential mortgage loan sales, to $7.6 billion as compared to $5.3 billion in the second quarter 2010. Margin on loan sales also increased during the third quarter 2010 to 1.35% from 1.22% during the second quarter 2010.

• Loan fees, which arise from the origination of residential mortgage loans, increased 21% to $24.4 million for the third quarter 2010 as compared to $20.2 million for the second quarter 2010. The increase in loan fees reflected the 38% increase in originations to $7.6 billion during the third quarter 2010 as compared to $5.5 billion during the second quarter 2010.

• Net servicing revenue, which is the combination of net loan administration income and the related hedging effect of gain (loss) on trading securities, increased 55% to $23.2 million during third quarter 2010 as compared to $15.0 million during second quarter 2010.

• Other fees and charges were $(7.7) million, as compared to $(6.5) million for the second quarter 2010, principally as the result of a $1.6 million increase in secondary market reserve provisions accrued for expected losses on loans repurchased from the secondary market.

Non-interest Expense

Non-interest expense increased to $152.5 million for the third quarter 2010, as compared to $149.0 million for the second quarter 2010, and decreased from $166.9 million for the third quarter 2009.

• Compensation and benefits expense increased $5.6 million and commissions expense increased $3.0 million, reflecting the overall build out of the organization, an increase in employees necessary to handle the increased loan production workload and an increase in incentive pay associated with the heightened underwriting activity.

• Asset resolution expenses, which are expenses associated with foreclosed property and repurchased assets, decreased 25% to $34.2 million, as compared to $45.4 million in the second quarter of 2010. The decline was principally due to the reduced provisions for possible losses on foreclosed property, to gains recognized on sales of foreclosed properties, and to reduced provisions for possible losses associated with repurchased FHA-insured loans.

• Loss on the early extinguishment of debt during the third quarter arose from the prepayment of a $250.0 million advance from the FHLB with a 4.825% interest rate and due in September 2011.

• The re-valuation of our outstanding warrants at the end of third quarter 2010 resulted in income of $1.4 million, as compared to income of $3.5 million recognized at the end of second quarter of 2010. The change in value results from reduced expense anticipated in future years based upon the decline in the market price of the Company’s common stock since the end of second quarter 2010.

Assets

Total assets at September 30, 2010 were $13.8 billion, as compared to $13.7 billion at June 30, 2010 and $14.0 billion at December 31, 2009. The increase from June 30, 2010 reflected an increase in loans available for sale,

partially offset by sales of trading securities and securities available for sale, and the continued run-off of the Bank’s held-for-investment portfolio.

Funding Sources

Flagstar Bank’s primary sources of funds are deposits obtained through its 162 community banking branches and the internet banking platform as well as deposits obtained from municipalities and investment banking firms. Funds are also obtained through loan repayments and sales of loans and securities in the ordinary course of business, advances from the FHLB, community banking operations, customer escrow accounts and security repurchase agreements. The Bank relies upon several of these sources at any one time to manage its daily and forecasted liquidity needs for operational requirements and policy levels while managing overall net interest costs. Retail deposits were $5.4 billion at September 30, 2010, as compared to $5.2 billion at June 30, 2010 and $5.5 billion at December 31, 2009.

At September 30, 2010, the Bank had a collateralized $4.0 billion line of credit with the FHLB with $587.0 million of remaining capacity.

Community Banking Operations

Flagstar Bank had 162 community banking branches at both September 30, 2010 and June 30, 2010, and 176 branches at September 30, 2009.

Earnings Conference Call

The Company’s quarterly earnings conference call will be held on Wednesday, October 27, 2010 from 8 p.m. until 9 p.m. (Eastern), as previously announced.

Questions for discussion at the conference call may be submitted in advance by e-mail to investors@flagstar.com or asked live during the conference call.

The conference call and accompanying slide presentation will be webcast live on the Investor Relations section of the Company’s Web site, www.flagstar.com, with replays available at that site for at least 10 days.

To listen by telephone, please call at least 10 minutes prior to the start of the conference call at (866) 294-1212 toll free or (702) 696-4911 and use passcode: 15462873.

Flagstar Bancorp, with $13.8 billion in total assets, is the largest publicly held savings bank headquartered in the Midwest. At September 30, 2010, Flagstar operated 162 banking centers in Michigan, Indiana and Georgia and 27 home loan centers in 13 states. Flagstar Bank originates loans nationwide and is one of the leading originators of residential mortgage loans.

The information contained in this release is not intended as a solicitation to buy Flagstar Bancorp, Inc. stock and is provided for general information. This release contains certain statements that may constitute “forward-looking statements” within the meaning of federal securities laws. These forward-looking statements include statements about the Company’s beliefs, plans, objectives, goals, expectations, anticipations, estimates, and intentions, that are subject to significant risks and uncertainties, and are subject to change based upon various factors (some of which may be beyond the Company’s control). The words “may,” “could,” “should,” “would,” “believe,” and similar expressions are intended to identify forward-looking statements.

Flagstar Bancorp, Inc. has filed a registration statement (including a prospectus) and will file a prospectus supplement with the Securities and Exchange Commission, or SEC, for the potential offerings to which this release relates. Before you invest, you should read the prospectus in that registration statement, the prospectus supplements when filed and any other documents relating to these offerings that Flagstar Bancorp, Inc. has filed or will file with the SEC for more complete information about Flagstar Bancorp, Inc. and these offerings. You may get these documents without cost by visiting EDGAR on the SEC web site at www.sec.gov. Alternatively, the issuer, any underwriter or any dealer participating in the offerings will arrange to send you the applicable prospectus if you request it by calling 1-866-803-9204.

Flagstar Bancorp, Inc.
Summary of Selected Consolidated Financial Data
(Dollars in thousands, except per share data)
(Unaudited)

	For the Three Months Ended
Summary of Consolidated	September 30,			June 30,			September 30,
Statements of Operations	2010			2010			2009
Interest income	$	123,217		$	130,022		$	167,107
Interest expense		(82,103	)		(87,617	)		(119,513	)
Net interest income		41,114			42,405			47,594
Provision for loan losses		(51,399	)		(86,019	)		(125,544	)
Net interest (loss) income after provision		(10,285	)		(43,614	)		(77,950	)
Non-interest income
Deposit fees and charges		7,585			8,798			8,438
Loan fees and charges		24,365			20,236			29,422
Loan administration		12,924			(54,665	)		(30,293	)
Net (loss) gain on trading securities		10,354			69,660			21,714
Loss on residuals and transferors’ interest		(4,665	)		(4,312	)		(50,689	)
Net gain on loan sales		103,211			64,257			104,416
(Loss) gain on sales of mortgage servicing rights		(1,195	)		(1,266	)		(1,319	)
Net (loss) gain on sale securities available for sale		—			4,523			—
Impairment — securities available for sale		—			(391	)		(2,875	)
Other fees (loss) income		(7,691	)		(6,509	)		(12,582	)
Total non-interest income		144,888			100,331			66,232
Non-interest expenses
Compensation, benefits and commissions		(59,844	)		(51,206	)		(68,748	)
Occupancy and equipment		(15,757	)		(15,903	)		(17,175	)
Asset resolution		(34,233	)		(45,439	)		(26,811	)
Federal insurance premiums		(8,522	)		(10,640	)		(7,666	)
Warrant income (expense)		1,405			3,486			(3,556	)
Loss on extinguishment of debt		(11,855	)		(8,971	)		—
Other taxes		(1,964	)		(841	)		(12,944	)
General and administrative		(21,756	)		(19,621	)		(30,143	)
Total non-interest expense		(152,526	)		(149,135	)		(167,043	)
Capitalized direct cost of loan closing		27			102			137
Total non-interest expense after capitalized direct cost of loan closing		(152,499	)		(149,033	)		(166,906	)
Loss before federal income tax and preferred stock dividend		(17,896	)		(92,316	)		(178,624	)
Benefit for federal income taxes		—			—			(114,965	)
Net loss		(17,896	)		(92,316	)		(293,589	)
Preferred stock dividends		(4,690	)		(4,690	)		(4,623	)
Net loss available to common stockholders	$	(22,586	)	$	(97,006	)	$	(298,212	)
Basic loss per share	$	(0.15	)	$	(0.63	)	$	(6.36	)
Diluted loss per share	$	(0.15	)	$	(0.63	)	$	(6.36	)

Flagstar Bancorp, Inc.
Summary of Selected Consolidated Financial Data
(Dollars in thousands, except per share data)
(Unaudited)

	For the Three Months Ended
Summary of Consolidated	September 30,			June 30,			September 30,
Statements of Operations-continued	2010			2010			2009
Net interest spread — Consolidated		1.54	%		1.47	%		1.48	%
Net interest margin — Consolidated		1.48	%		1.45	%		1.46	%
Net interest spread — Bank only		1.55	%		1.49	%		1.53	%
Net interest margin — Bank only		1.55	%		1.53	%		1.58	%
Return on average assets		(0.64	)%		(2.72	)%		(7.60	)%
Return on average equity		(8.35	)%		(34.72	)%		(130.64	)%
Efficiency ratio		82.0	%		104.4	%		146.6	%
Average interest earning assets	$	11,158,181		$	11,573,413		$	13,160,528
Average interest paying liabilities	$	11,383,551		$	11,641,804		$	13,217,383
Average stockholders’ equity	$	1,082,499		$	1,117,686		$	913,059
Equity/assets ratio (average for the period)		7.71	%		7.84	%		5.82	%
Ratio of charge-offs to average loans held for investment		5.90	%		5.07	%		3.48	%

Flagstar Bancorp, Inc.
Summary of Selected Consolidated Financial Data
(Dollars in thousands, except per share data)
(Unaudited)

	For the Nine Months Ended
Summary of Consolidated	September 30,			September 30,
Statements of Operations	2010			2009
Interest income	$	379,445		$	539,933
Interest expense		(258,242	)		(375,593	)
Net interest income		121,203			164,340
Provision for loan losses		(200,978	)		(409,420	)
Net interest (loss) income after provision		(79,775	)		(245,080	)
Non-interest income
Deposit fees and charges		24,796			23,655
Loan fees and charges		60,930			97,366
Loan administration		(15,590	)		(20,240	)
Net (loss) gain on trading securities		76,702			6,377
Loss on residuals and transferors’ interest		(11,660	)		(66,625	)
Net gain on loan sales		220,034			404,773
(Loss) gain on sales of mortgage servicing rights		(4,674	)		(3,945	)
Net gain on sale securities available for sale		6,689			—
Impairment — securities available for sale		(3,677	)		(20,444	)
Other (loss) income		(36,333	)		(29,189	)
Total non-interest income		317,217			391,728
Non-interest expenses
Compensation, benefits and commissions		(172,130	)		(232,702	)
Occupancy and equipment		(47,670	)		(53,553	)
Asset resolution		(96,245	)		(69,660	)
Federal insurance premiums		(29,209	)		(28,514	)
Warrant income (expense)		3,664			(27,561	)
Loss on extinguishment of debt		(20,826	)		—
Other taxes		(3,660	)		(15,049	)
General and administrative		(58,989	)		(95,024	)
Total non-interest expense		(425,065	)		(522,063	)
Capitalized direct cost of loan closing		190			671
Total non-interest expense after capitalized direct cost of loan closing		(424,875	)		(521,392	)
Loss before federal income tax and preferred stock dividend		(187,433	)		(374,744	)
Benefit for federal income taxes		—			(55,008	)
Net loss		(187,433	)		(429,752	)
Preferred stock dividends		(14,059	)		(12,464	)
Net loss available to common stockholders	$	(201,492	)	$	(442,216	)
Basic loss per share	$	(1.57	)	$	(16.58	)
Diluted loss per share	$	(1.57	)	$	(16.58	)

Flagstar Bancorp, Inc.
Summary of Selected Consolidated Financial Data
(Dollars in thousands, except per share data)
(Unaudited)

	For the Nine Months Ended
Summary of Consolidated	September 30,			September 30,
Statements of Operations-continued	2010			2009
Net interest spread — Consolidated		1.47	%		1.49	%
Net interest margin — Consolidated		1.41	%		1.56	%
Net interest spread — Bank only		1.50	%		1.53	%
Net interest margin — Bank only		1.50	%		1.65	%
Return on average assets		(1.92	)%		(3.65	)%
Return on average equity		(26.85	)%		(67.44	)%
Efficiency ratio		96.9	%		93.8	%
Average interest earning assets	$	11,364,524		$	14,022,144
Average interest paying liabilities	$	11,598,035		$	13,778,405
Average stockholders’ equity	$	1,000,644		$	878,614
Equity/assets ratio (average for the period)		7.14	%		5.43	%
Ratio of charge-offs to average loans held for investment		4.53	%		3.96	%

Flagstar Bancorp, Inc.
Summary of Selected Consolidated Financial Data
(Dollars in thousands, except per share data)
(Unaudited)

Summary of the Consolidated	September 30,			June 30,			December 31,			September 30,
Statements of Financial Condition:	2010			2010			2009			2009
Total assets	$	13,836,573		$	13,693,830		$	14,013,331		$	14,820,815
Securities classified as trading		161,000			487,370			330,267			1,012,309
Securities classified as available for sale		503,568			544,474			605,621			817,424
Loans available for sale		1,943,096			1,849,718			1,970,104			2,070,878
Loans available for investment, net		6,838,226			6,835,817			7,190,308			7,605,497
Allowance for loan losses		(474,000	)		(530,000	)		(524,000	)		(528,000	)
Mortgage servicing rights		447,023			474,814			652,374			567,800
Deposits		8,561,943			8,254,046			8,778,469			8,533,968
FHLB advances		3,400,000			3,650,000			3,900,000			4,800,000
Repurchase agreements		—			—			108,000			108,000
Stockholders’ equity		1,060,729			1,076,361			596,724			667,597
Other Financial and Statistical Data:
Equity/assets ratio		7.67	%		7.86	%		4.26	%		4.50	%
Core capital ratio (bank only)		9.12	%		9.24	%		6.19	%		6.39	%
Total risk-based capital ratio (bank only)		16.87	%		17.20	%		11.68	%		12.06	%
Book value per common share	$	5.30		$	5.41		$	7.53		$	9.07
Shares outstanding at the period ended		153,513			153,338			46,877			46,853
Average shares outstanding for the period ended (000’s)		128,411			115,707			31,766			46,853
Average diluted shares outstanding for the period ended (000’s)		128,411			115,707			31,766			46,853
Loans serviced for others	$	52,287,204		$	50,385,208		$	56,521,902		$	53,159,885
Weighted average service fee (bps)		31.5			32.4			32.1			32.6
Value of mortgage servicing rights		0.85	%		0.94	%		1.15	%		1.06	%
Allowance for loan losses to non performing loans (bank only)		52.0	%		52.3	%		48.9	%		50.0	%
Allowance for loan losses to loans held for investment (bank only)		6.48	%		7.20	%		6.79	%		6.49	%
Non performing assets to total assets (bank only)		8.25	%		9.06	%		9.25	%		8.44	%
Number of bank branches		162			162			165			176
Number of loan origination centers		27			22			23			42
Number of employees (excluding loan officers & account executives)		2,922			2,885			3,075			3,220
Number of loan officers and account executives		285			296			336			436

Loans Held for Investment
(Dollars in thousands)
(unaudited)

Description	September 30, 2010				June 30, 2010				December 31, 2009				September 30, 2009
First mortgage loans	$	4,479,814	61.3	%	$	4,614,822	62.7	%	$	4,990,994	64.7	%	$	5,304,950	65.2	%
Second mortgage loans		185,062	2.5			196,702	2.7			221,626	2.9			236,239	2.9
Commercial real estate loans		1,341,009	18.4			1,439,324	19.5			1,600,271	20.7			1,677,106	20.6
Construction loans		9,956	0.1			13,003	0.2			16,642	0.2			22,906	0.3
Warehouse lending		913,494	12.5			702,455	9.5			448,567	5.8			425,861	5.2
Consumer loans		373,086	5.1			388,250	5.3			423,842	5.5			452,548	5.6
Non-real estate commercial		9,805	0.1			11,261	0.1			12,366	0.2			13,887	0.2
Total loans held for investment	$	7,312,226	100.0	%	$	7,365,817	100.0	%	$	7,714,308	100	%	$	8,133,497	100.0	%

Allowance for Loan Losses
(Dollars in thousands)
(unaudited)

	For the Three Months Ended
	September						September
	30,			June 30,			30,
	2010			2010			2009
Beginning Balance	$	(530,000	)	$	(538,000	)	$	(474,000	)
Provision for losses		(51,399	)		(86,019	)		(125,544	)
Charge offs, net of recoveries
First mortgage loans		38,184			45,012			36,772
Second mortgage loans		6,130			8,009			7,222
Commercial R/E loans		57,631			31,488			15,724
Construction loans		417			56			951
Warehouse		(240	)		1,225			—
Consumer
HELOC		4,364			7,015			9,711
Other consumer loans		357			735			638
Other		556			479			526
Charge-offs, net of recoveries		107,399			94,019			71,544
Ending Balance	$	(474,000	)	$	(530,000	)	$	(528,000	)

Allowance for Loan Losses
(Dollars in thousands)
(unaudited)

	For the Nine Months Ended
	September 30,			September 30,
	2010			2009
Beginning Balance	$	(524,000	)	$	(376,000	)
Provision for losses		(200,978	)		(409,420	)
Charge offs, net of recoveries
First mortgage loans		112,217			92,658
Second mortgage loans		20,568			30,660
Commercial R/E loans		97,227			102,651
Construction loans		493			2,453
Warehouse		1,456			496
Consumer
HELOC		15,902			24,826
Other consumer loans		1,424			2,397
Other		1,691			1,279
Charge-offs, net of recoveries		250,978			257,420
Ending Balance	$	(474,000	)	$	(528,000	)

Composition of Allowance for Loan Losses
As of September 30, 2010
(In thousands)
(unaudited)

	General		Specific
Description	Reserves		Reserves		Total
First mortgage loans	$	240,672	$	29,012	$	269,684
Second mortgage loans		30,433		565		30,998
Commercial real estate loans		43,048		80,932		123,980
Construction loans		1,965		31		1,996
Warehouse lending		4,457		1,424		5,881
Consumer loans		29,093		194		29,287
Non-real estate commercial		1,218		1,250		2,468
Other and unallocated		9,706		—		9,706
Total allowance for loan losses	$	360,592	$	113,408	$	474,000

Composition of Residential HFI Portfolio
As of September 30, 2010

(In thousands)
(unaudited)

	Portfolio
	Balance1		Reserves1
Non-performing	$	559,633	$	160,095
Performing TDRs		416,847		32,306
Not delinquent within last 36 months		2,244,582		29,750
Performing with mortgage insurance		378,037		5,195
Non-performing with mortgage insurance		100,052		11,656
Other current		837,153		58,060
30 day and 60 day delinquent		128,367		3,620
Total	$	4,664,876	$	300,682

1) Includes first mortgage and second mortgage loans

Composition of Commercial RE HFI Portfolio
As of September 30, 2010

(In thousands)
(unaudited)

	Portfolio
	Balance		Reserves
Performing — not impaired	$	893,062	$	33,285
Special mention — not impaired		126,021		7,325
Impaired		83,352		16,547
Non-performing		238,565		66,823
Total	$	1,341,009	$	123,980

Loan Originations
(Dollars in thousands)
(unaudited)

	For the Three Months Ended
	September 30,				June 30,				September 30,
Loan type	2010				2010				2009
Residential mortgage loans	$	7,613,502	99.8	%	$	5,452,304	99.9	%	$	6,641,674	99.9	%
Consumer loans		486	—			940	—			1,477	—
Commercial loans		12,715	0.2			5,995	0.1			4,335	0.1
Total loan production	$	7,626,703	100.0	%	$	5,459,239	100.0	%	$	6,647,486	100.0	%

Loan Originations
(Dollars in thousands)
(unaudited)

	For the Nine Months Ended
	September 30,				September 30,
Loan type	2010				2009
Residential mortgage loans	$	17,396,195	99.9	%	$	25,428,388	99.9	%
Consumer loans		2,046	—			4,866	—
Commercial loans		24,912	0.1			29,935	0.1
Total loan production	$	17,423,153	100.0	%	$	25,463,189	100.0	%

Gain on Loan Sales and Securitizations
(Dollars in thousands)
(Unaudited)

	For the Three Months Ended
	September 30,						June 30,						September 30,
	2010						2010						2009
Description	(000’s)			bps			(000’s)			bps			(000’s)			bps
Valuation gain (loss):
Value of interest rate locks	$	4,380			6		$	33,075			63		$	11,405			15
Value of forward sales		31,649			42			(58,475	)		(111	)		(36,537	)		(48	)
Fair value of loans AFS		140,993			185			103,643			197			151,911			200
LOCOM adjustments on loans HFI		171			—			(45	)		—			155			—
Total valuation gains		177,193			233			78,198			149			126,934			167
Sales gains (losses):
Marketing gains		17,141			22			29,473			55			4,372			6
Pair off losses		(77,404	)		(102	)		(33,309	)		(63	)		(15,776	)		(22	)
Sales adjustments		(4,404	)		(6	)		(3,319	)		(6	)		(4,108	)		(5	)
Provision for secondary marketing reserve		(9,315	)		(12	)		(6,786	)		(13	)		(7,006	)		(9	)
Total sales (losses) gains		(73,982	)		(98	)		(13,941	)		27			(22,518	)		(30	)
Net gain on loan sales and securitizations	$	103,211			135		$	64,257			122		$	104,416			137
Total loan sales and securitizations	$	7,619,097					$	5,259,830					$	7,606,304

Gain on Loan Sales and Securitizations
(Dollars in thousands)
(Unaudited)

	For the Nine Months Ended
	September 30,						September 30,
	2010						2009
Description	(000’s)			bps			(000’s)			bps
Valuation gain (loss):
Value of interest rate locks	$	40,479			23		$	(38,008	)		(15	)
Value of forward sales		(46,881	)		(27	)		28,182			11
Fair value of loans AFS		303,713			170			424,542			168
LOCOM adjustments on loans HFI		38			—			(274	)		164
Total valuation gains		297,349			166			414,442			164
Sales gains:
Marketing gains		175,447			98			102,885			41
Pair off (losses) gains		(120,776	)		(67	)		(5,573	)		(2	)
Sales adjustments		(108,741	)		(61	)		(89,043	)		(35	)
Provision for secondary marketing reserve		(23,244	)		(13	)		(17,938	)		(7	)
Total sales (losses) gains		(77,314	)		(43	)		(9,669	)		(3	)
Net gain on loan sales and securitizations	$	220,034			123		$	404,773			161
Total loan sales and securitizations	$	17,893,675					$	25,183,401

Asset Quality
(Dollars in thousands)
(Unaudited)

	September 30, 2010					June 30, 2010					December 31, 2009					September 30, 2009
			% of					% of					% of					% of
Days delinquent	Balance		Total			Balance		Total			Balance		Total			Balance		Total
30	$	112,741		1.5	%	$	112,697		1.5	%	$	143.500		1.9	%	$	118,598		1.5	%
60		73,740		1.0			83,044		1.1			87,625		1.1			100,078		1.2
90 + and matured delinquent		911,372		12.5			1,013,828		13.8			1,071,636		13.9			1,055,358		13
	—
Total	$	1,097,853		15.0	%	$	1,209,569		16.4	%	$	1,302,761		16.9	%	$	1,274,034		15.7	%
Loans held for investment	$	7,312,226				$	7,365,817				$	7,714,308				$	8,133,497

Non-Performing Loans and Assets
(Dollars in thousands)
(Unaudited)

	September 30,			June 30,			December 31,			September 30,
	2010			2010			2009			2009
Non-performing loans	$	911,372		$	1,013,828		$	1,071,636		$	1,055,358
Real estate owned		198,585			198,230			176,967			164,898
Net repurchased assets/non-performing assets		31,165			27,985			45,698			26,601
Non-performing assets	$	1,141,122		$	1,240,043		$	1,294,301		$	1,246,857
Non-performing loans as a percentage of loans held for investment		12.46	%		13.76	%		13.89	%		12.98	%
Non-performing assets as a percentage of total assets		8.25	%		9.06	%		9.25	%		8.44	%

Average Balances, Yields and Rates
(Dollars in thousands)
(unaudited)

	For the Three Months Ended
	September 30, 2010					June 30, 2010					September 30, 2009
			Annualized					Annualized					Annualized
	Average		Yield/			Average		Yield/			Average		Yield/
	Balance		Rate			Balance		Rate			Balance		Rate
Interest-Earning Assets:
Loans available for sale	$	2,166,072		4.63	%	$	1,675,502		5.00	%	$	2,369,451		5.30	%
Loans held for investment:
Mortgage Loans		4,734,031		4.52			4,920,436		4.64			5,685,821		5.11
Commercial Loans		2,163,004		4.96			2,101,113		4.72			2,050,911		5.07
Consumer Loans		381,725		6.09			398,737		5.95			488,064		5.41
Loans held for investment		7,278,760		4.74			7,420,286		4.73			8,224,796		5.12
Securities classified as available for sale or trading trading		863,201		5.08			1,653,662		5.02			2,315,354		5.11
Interest-bearing deposits		848,854		0.24			820,379		0.23			210,874		0.97
Other		1,294		0.27			3,584		0.14			40,053		0.03
Total interest-earning assets		11,158,181		4.40			11,573,413		4.49			13,160,528		5.07
Other assets		2,874,163					2,691,344					2,524,962
Total assets	$	14,032,344				$	14,264,757				$	15,685,490
Interest-Bearing Liabilities:
Demand deposits	$	378,193		0.48	%	$	388,402		0.57	%	$	311,459		0.43	%
Savings deposits		744,889		0.97			691,170		0.90			605,961		1.22
Money market deposits		542,350		0.96			562,442		0.96			730,749		1.58
Certificates of deposits		3,401,739		2.77			3,313,711		2.94			4,082,535		3.59
Total retail deposits		5,067,171		2.14			4,955,725		2.24			5,730,704		2.91
Demand deposits		214,866		0.26			392,054		0.48			155,869		0.50
Savings deposits		171,880		0.74			68,722		0.59			92,476		0.62
Certificates of deposits		440,540		0.94			245,702		0.81			253,485		1.17
Total government deposits		827,286		0.72			706,478		0.60			501,830		0.86
Wholesale deposits		1,427,463		3.18			1,628,940		3.14			1,494,927		4.08
Total Deposits		7,321,920		2.18			7,291,143		2.28			7,727,461		3.00
FHLB advances		3,813,021		4.14			3,891,758		4.34			5,081,739		4.38
Security repurchase agreements		—					210,268		3.05			108,000		4.33
Other		248,610		3.22			248,635		3.79			300,183		5.11
Total interest-bearing liabilities		11,383,551		2.86			11,641,804		3.02			13,217,383		3.59
Other liabilities		1,566,294					1,505,267					1,555,048
Stockholders’ equity		1,082,499					1,117,686					913,059
Total liabilities and stockholders equity	$	14,032,344				$	14,264,757				$	15,685,490

Average Balances, Yields and Rates
(Dollars in thousands)
(unaudited)

	For the Nine Months Ended September 30,
	2010					2009
			Annualized					Annualized
	Average		Yield/			Average		Yield/
	Balance		Rate			Balance		Rate
Interest-Earning Assets:
Loans available for sale	$	1,790,099		4.84	%	$	2,916,769		5.16	%
Loans held for investment
Mortgage Loans		4,921,898		4.66			5,942,439		5.23
Commercial Loans		2,074,436		4.86			2,206,308		5.13
Consumer Loans		398,672		6.00			513,842		5.34
Loans held for investment		7,395,006		4.78			8,662,589		5.23
Securities classified as available for sale or trading		1,217,123		5.16			2,181,697		5.26
Interest-bearing deposits		957,982		0.23			223,324		1.08
Other		4,314		0.09			37,765		0.10
Total interest-earning assets		11,364,524		4.45			14,022,144		5.14
Other assets		2,656,241					2,144,571
Total assets	$	14,020,765				$	16,166,715
Interest-Bearing Liabilities:
Demand deposits	$	378,900		0.54	%	$	289,247		0.49	%
Savings deposits		708,550		0.90			511,812		1.51
Money market deposits		562,068		0.93			682,368		1.89
Certificates of deposits		3,368,775		2.89			4,016,177		3.84
Total retail deposits		5,018,293		2.21			5,499,604		3.20
Demand deposits		299,325		0.39			75,814		0.55
Savings deposits		106,292		0.64			85,547		0.84
Certificates of deposits		320,587		0.86			686,878		1.75
Total government deposits		726,204		0.63			848,239		1.55
Wholesale deposits		1,614,283		3.08			1,819,921		3.72
Total Deposits		7,358,780		2.25			8,167,764		3.15
FHLB advances		3,867,941		4.28			5,236,429		4.35
Security repurchase agreements		105,694		3.48			108,000		4.33
Other		265,620		4.06			266,212		4.84
Total interest-bearing liabilities		11,598,035		2.98			13,778,405		3.65
Other liabilities		1,422,085					1,509,696
Stockholders’ equity		1,000,645					878,614
Total liabilities and stockholders equity	$	14,020,765				$	16,166,715

Pre-tax, pre-credit-cost Income
(Non GAAP measure)
(Dollars in thousands)
(Unaudited)

	For the Three Months Ended
	September, 2010			June, 2010			September, 2009
Loss before tax provision / benefit	$	(17,896	)	$	(92,316	)	$	(178,624	)
Provision for loan losses		51,399			86,019			125,544
Asset resolution		34,233			45,439			26,811
Other than temporary impairment on afs investments		—			391			2,875
Secondary marketing reserve provision		12,958			11,389			27,609
Write down of residual interests		4,665			4,312			50,689
Reserve increase for reinsurance		—			433			3,945
Total credit-related-costs:		103,255			147,983			237,473
Pre-tax, pre-credit-cost income	$	85,359		$	55,667		$	58,849

Pre-tax, pre-credit-cost Income
(Non GAAP measure)
(Dollars in thousands)
(Unaudited)

	For the Nine Months Ended
	September, 2010			September, 2009
Loss before tax provision / benefit	$	(187,433	)	$	(374,744	)
Add back:
Provision for loan losses		200,978			409,420
Asset resolution		96,245			69,660
Other than temporary impairment on afs investments		3,677			20,444
Secondary marketing reserve provision		51,174			66,278
Write down of residual interests		11,660			66,624
Reserve increase for reinsurance		433			24,846
Total credit-related-costs:		364,167			657,272
Pre-tax, pre-credit-cost income	$	176,734		$	282,528

EX-99.2

Exhibit 99.2

1 Troy, Michigan Presenters: Joseph P. Campanelli Chief Executive Officer Paul D. Borja Chief Financial Officer Q3 2010 Results

2 The information contained in this presentation is not intended as a solicitation to buy Flagstar Bancorp, Inc. stock and is provided for general information. This presentation may include forward-looking statements and include comments with respect to our objectives and strategies, and the results of our operations and our business. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words such as "expects," "assumes," "anticipates," "intends," "plans," "believes," "seeks," "estimates" or words of similar meaning, or future or conditional words such as "assuming," "will," "would," "possible," "proposed," "projected," "positioned," "vision," "opportunity," "should," "could," "indicative," "target" or "may." Forward-looking statements provide our expectations or predictions of future conditions, events or results. They are not guarantees of future performance. By their nature, these forward-looking statements involve numerous assumptions, uncertainties and opportunities, both general and specific. These statements speak only as of the date they are made. We do not undertake to update forward-looking statements to reflect the impact of circumstances or events that arise after the date the forward-looking statements were made. There a number of factors, many of which are beyond our control that could cause actual conditions, events or results to differ significantly from those described in the forward looking statements. Some of these are: Volatile interest rates that impact, amongst other things, (i) the mortgage banking business, (ii) our ability to originate loans and sell assets at a profit, (iii) prepayment speeds and (iv) our cost of funds, could adversely affect earnings, growth opportunities and our ability to pay dividends to shareholders. Our ability to maintain capital levels. Competitive factors for loans could negatively impact gain on loan sale margins. Competition from banking and non-banking companies for deposits and loans can affect our growth opportunities, earnings, gain on sale margins, market share and ability to transform business model. Changes in the regulation of financial services companies and government-sponsored housing enterprises, and in particular, declines in the liquidity of the mortgage loan secondary market, could adversely affect business. Changes in regulatory capital requirements or an inability to achieve desired capital ratios could adversely affect our growth and earnings opportunities and our ability to originate certain types of loans, as well as our ability to sell certain types of assets for fair market value or to transform business model. - - General business and economic conditions, including unemployment rates, further movements in interest rates, the slope of the yield curve, any increase in fraud and other criminal activity and the further decline of asset values in certain geographic markets, may significantly affect the company's business activities, loan losses, reserves, earnings and business prospects. - - Factors concerning the implementation of proposed enhancements and transformation of business model could result in slower implementation times than we anticipate and negate any competitive advantage that we may enjoy. When relying on forward-looking statements to make decisions, investors should carefully consider the aforementioned factors as well as other uncertainties and events. Legal Disclaimer

Financials

4 Improvement in Net Income (Loss) ** Totals may not foot due to rounding Net loss available to common shareholders improved to its lowest level since gain in Q2 2008...

5 Income Statement ** Totals may not foot due to rounding

6 Net Interest Income ** Totals may not foot due to rounding

7 Non Interest Income ** Totals may not foot due to rounding

8 Non Interest Expense ** Totals may not foot due to rounding

9 Selected Balance Sheet Items ** Totals may not foot due to rounding

10 Pre-tax, pre-credit-cost Income ** Totals may not foot due to rounding

11 Decline in Credit Related Expenses ** Totals may not foot due to rounding

Mortgage Banking

13 Gain on Loans Sales ($ in millions)

14 (Dollars in millions) Loan Production - Historical Trend

15 Loan Production ** Totals may not foot due to rounding

16 Historical Residential Loan Underwriting Volume ** Totals may not foot due to rounding

17 Historical Residential Loan Lock Volume ** Totals may not foot due to rounding

18 Historical Residential Loan Closing Volume ** Totals may not foot due to rounding

Funding

20 Total Funding Breakout ** Totals may not foot due to rounding Sep 30, 2010

21 Deposits - Ending Balances ** Totals may not foot due to rounding (1) Ending balance and rate for the period noted

22 Decline in Funding Costs * Does not reflect savings associated with prepay of $250 million advance or restructure of 7 tranches of advances, which is expected to reduce effective cost of those advances by 1.23% 2.86% 3.02% 3.59% 3.05% 3.16% Avg. Funding Cost

Portfolio

24 Residential First Mortgages * As of Sep 30, 2010 ($ in thousands) Residential First Mortgage Portfolio - by State ** Totals may not foot due to rounding * Reflects unpaid principal balance of underlying loans before accounting adjustments for discounts and other items. Also excludes loans eligible for repurchase from Ginnie Mae pools

25 Residential First Mortgages * As of Sep 30, 2010 ($ in thousands) Residential First Mortgage Portfolio - by LTV ** Totals may not foot due to rounding * Reflects unpaid principal balance of underlying loans before accounting adjustments for discounts and other items. Also excludes loans eligible for repurchase from Ginnie Mae pools ** LTV equals current principal balance divided by appraised value at origination

26 Residential First Mortgages * As of Sep 30, 2010 ($ in thousands) Residential First Mortgage Portfolio - by Original FICO ** Totals may not foot due to rounding * Reflects unpaid principal balance of underlying loans before accounting adjustments for discounts and other items. Also excludes loans eligible for repurchase from Ginnie Mae pools

27 Residential First Mortgages * As of Sep 30, 2010 ($ in thousands) Residential First Mortgage Portfolio - by Vintage ** Totals may not foot due to rounding * Reflects unpaid principal balance of underlying loans before accounting adjustments for discounts and other items. Also excludes loans eligible for repurchase from Ginnie Mae pools

28 As of Sep 30, 2010 ($ in 000’s) Commercial Real Estate (CRE) Portfolio ** Totals may not foot due to rounding

29 As of Sep 30, 2010 ($ in 000’s) Non Agency Investment Securities Available for Sale Portfolio ** Totals may not foot due to rounding

30 As of Sep 30, 2010 ($ in 000’s) Real Estate Owned Portfolio ** Totals may not foot due to rounding

Asset Quality

32 Asset Quality ** Totals may not foot due to rounding

33 Over 90 day delinquent plus matured plus performing non accrual, calculated using OTS method Does not include unallocated reserve Asset Quality By Loan Type - HFI ** Totals may not foot due to rounding

34 * Calculated using OTS method Historical Monthly Delinquency Trends - HFI First Mortgage

35 * Calculated using OTS method Historical Monthly Delinquency Trends - HFI Second Mortgage

36 * Calculated using OTS method Historical Monthly Delinquency Trends - HFI HELOC

37 * Includes performing non accrual commercial RE loans Historical Monthly Delinquency Trends - HFI Commercial RE

Capital

39 Historical Capital Ratios

Appendix

41 2010 / 2011 Outlook 1 1) Assumes consummation of $425 million public equity offering

42 Calculated using OTS method Delinquent Loans by Loan Type - HFI ** Totals may not foot due to rounding

43 HFI Residential First Mortgage Portfolio As of Sep 30, 2010 ($ in 000’s) * 90 day + matured and non performing accruals, calculated using OTS method HFI Residential 1st Mortgage Portfolio - by FICO and LTV ** Totals may not foot due to rounding ** LTV equals current principal balance divided by appraised value at origination

44 Non Performing Loans* As of Sep 30, 2010 ($ in 000’s) * 90 day + matured and non performing accruals, calculated using OTS method Non Performing Loans - by State - HFI ** Totals may not foot due to rounding

45 Non Performing Loans* As of Sep 30, 2010 ($ in 000’s) * 90 day + matured and non performing accruals, calculated using OTS method Non Performing Loans - by Vintage - HFI ** Totals may not foot due to rounding

46 Commercial Real Estate Portfolio* As of Sep 30, 2010 ($ in 000’s) Commercial Real Estate (CRE) Portfolio - by Vintage ** Totals may not foot due to rounding * Reflects unpaid principal balance of underlying loans before accounting adjustments for discounts and other items. Also excludes commercial letters of credit

47 Commercial Real Estate Portfolio* As of Sep 30, 2010 ($ in 000’s) Commercial Real Estate (CRE) Portfolio by State ** Totals may not foot due to rounding * Reflects unpaid principal balance of underlying loans before accounting adjustments for discounts and other items. Also excludes commercial letters of credit

48

EX-99.3

Exhibit 99.3

NEWS RELEASE
For more information, contact:

Paul D. Borja
Executive Vice President / CFO
Bradley T. Howes
Investor Relations Officer
(248) 312-2000
FOR IMMEDIATE RELEASE

Flagstar Announces Commencement of Underwritten Public Offerings of Common Stock
and Convertible Preferred Stock

TROY, Mich., October 27, 2010 — Flagstar Bancorp, Inc. (NYSE: FBC) (“Flagstar” or the “Company”), the holding company for Flagstar Bank, FSB (the “Bank”), today announced it has commenced underwritten public offerings of $380,000,000 of aggregate amount of shares of common stock and shares of convertible preferred stock. Each offering is contingent upon completion of the other. Flagstar intends to grant the underwriter for each offering a 30-day option to purchase up to an additional 15 percent of the shares of common stock and the convertible preferred stock sold to non-affiliates of the Company, as the case may be, to cover over-allotments, if any.

Proceeds from the offerings will be used for general corporate purposes, including potential disposition of non-performing assets or potential restructuring of the balance sheet.

The Company’s common stock is listed on the New York Stock Exchange (the “NYSE”) under the symbol “FBC.”

Holders of the convertible preferred stock will be entitled to certain rights and preferences, including conversion, dividend, liquidation and voting rights. Each share of convertible preferred stock will be subject to automatic conversion into shares of Flagstar’s common stock upon requisite stockholder approval. Currently, no public market exists for the convertible preferred stock. Flagstar has applied to list the convertible preferred stock on the NYSE under the symbol “FBC PR,” and it expects trading to commence within 30 days of the first original issuance date of the convertible preferred stock.

J.P. Morgan Securities LLC is the sole book-running manager and underwriter for each offering.

Each offering will be made only by means of a prospectus supplement to the prospectus filed as a part of the Company's effective shelf-registration statement on Form S-3 (File No. 333-162823). When available, copies of the prospectus supplements relating to these offerings may be obtained from J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, Attention: Prospectus Department, or by calling 866-803-9204.

Flagstar Bancorp, with $13.8 billion in total assets, is the largest publicly held savings bank headquartered in the Midwest. At September 30, 2010, Flagstar operated 162 banking centers in Michigan, Indiana and Georgia and 27 home loan centers in 13 states. Flagstar Bank originates loans nationwide and is one of the leading originators of residential mortgage loans.

This press release does not constitute an offer to sell or a solicitation of an offer to buy the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Matters discussed in this press release contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that involve substantial risks and uncertainties, including but not limited to the risk that, because of business, economic or market conditions or for any other reasons within or outside of the Company’s discretion, the Company may

decide not to pursue the offerings, the offerings may not be consummated, stockholders do not provide the requisite approvals, or proceeds from the offerings are not used as disclosed above. In addition to the risks and uncertainties identified above, reference is also made to other risks and uncertainties detailed in reports filed by the Company with the SEC. The Company cautions that the foregoing risks and uncertainties are not exclusive.

EX-99.4

Exhibit 99.4

Tangible improvement in the core business Pre-tax, pre-credit cost income of $85mm in Q3 2010 up 45% year on year and up 53% quarter on quarter Net interest margin of 1.55% in Q3 2010 up 2bps quarter on quarter In 2011, the company expects to reduce interest expense by $23mm as a result of the FHLB restructuring, which will have a positive effect on NIM 2010 Outlook 2011 Outlook Target asset size $13.0 — $14.0 billion $14.5 — $15.5 billion Residential mortgage loan originations $22 — $26 billion $21 — $25 billion Loan sales $22 — $26 billion $20 — $24 billion Gain on loan sale margin 110 — 125 bps 95 — 115 bps Net interest margin (bank) 140 — 175 bps 175 — 210 bps Provision Expense $200 — $250 million $100 — $150 million 8

Well-contained mortgage repurchase risk Fannie Mae and Freddie Mac repurchase requests Fannie Mae and Freddie Mac repurchase requests 350 300 250 of loans 200 Number 150 100 50 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct 09 09 09 09 09 09 09 09 09 09 09 09 10 10 10 10 10 10 10 10 10 10 (Est.) Note: Oct 10 estimate is extrapolated from repurchase requests to-date through October 22, 2010 Historical repurchase analysis, excluding FHA insured ( Historical repurchase analysis, excluding FHA insured ($ $mm) mm) Vintage Loans sold Demands Received ¹ Repurchases made Losses ² Loss rate 2005- 2009 $104,744 $771 $270 $107 10.2 bps ¹ Unpaid principal balance (UPB) on all repurchase demands received plus UPB of makewhole demands mulitipled by historical loss rate ² Losses as of June 30, 2010 21