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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 FOURTH QUARTER AND
FULL YEAR 2010 RESULTS

TROY, Mich. (January 25, 2011) — Flagstar Bancorp, Inc. (NYSE:FBC) (the “Company”), the holding company for Flagstar Bank FSB, today reported its annual and fourth quarter results for 2010.

“Flagstar Bank made significant progress in 2010 toward improving our asset quality, de-risking our balance sheet and strengthening our capital base. We also continued to build top notch management by attracting new talent to our leadership team, maintained our leadership position as a premier mortgage lender, and have begun seeing the returns from our transformation to a super community bank through growth in new accounts and business banking relationships”, commented Joseph P. Campanelli, Chairman of the Board, President and CEO.

The Company reduced its net loss by 23% during the year ended December 31, 2010, as compared to the same period for 2009. For the year ended December 31, 2010, the net loss applicable to common stockholders totaled $(393.6) million, or $(2.44) per share (diluted) based on average shares outstanding of 161,565,000, as compared to a net loss of $(513.8) million, or $(16.17) per share (diluted) based on average shares outstanding of 31,766,000 during the same period in 2009. The loss for 2010 included a loss of $176.5 million related to its sale of non-performing residential loans during the fourth quarter.

For fourth quarter 2010, the Company had a net loss applicable to common stockholders of $(192.1) million, or $(0.74) per share (diluted) based on average shares outstanding of 259,946,000, as compared to a third quarter 2010 net loss of $(22.6) million, or $(0.15) per share (diluted) based on average shares outstanding of 153,405,000. This loss included a loss of $176.5 million related to its sale of non-performing residential loans during the fourth quarter. As of December 31, 2010 there were 553,313,000 shares outstanding. Fourth quarter 2009 net loss was $(71.6) million, or $(1.53) per share (diluted) based on average shares outstanding of 46,862,000.

Key Items for Fourth Quarter:

	•		Completed public equity offering of $400.0 million.

	•		Sold $474.0 million of non-performing residential first mortgage loans and transferred $104.2 million of similar loans to available-for-sale, marking them to fair value.

	•		Originated residential mortgages of $9.2 billion, an increase of 20% from prior quarter.

	•		Improved net interest margin to 2.08%, from 1.55% in prior quarter.

	•		Increased loan fees up 17% from prior quarter, to $28.6 million.

	•		Increased net servicing revenue up 21% from prior quarter, to $28.1 million.

	•		Decreased asset resolution expense related to non-performing residential and commercial loans, by 12% from the prior quarter to $30.0 million.

	•		Decreased non-performing loans held for investment by 65% from prior quarter.

Asset Quality

As previously announced on November 15, 2010, the Company sold $474.0 million of non-performing residential first mortgage loans and transferred $104.2 million in such loans to the available-for-sale category, resulting in a $176.5 million loss reflected as an increase in the provision for loan losses.

Non-performing assets held for investment decreased to $498.0 million at December 31, 2010, from $1.1 billion at September 30, 2010 and $1.3 billion at December 31, 2009. Non-performing residential first mortgage loans available for sale, which were transferred to this category in November totaled $94.9 million (with a fair value of $45.6 million), at December 31, 2010. 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 it excludes repurchased assets that are insured by the Federal Housing Agency (FHA). The decline in non-performing assets includes the sale of $474.0 million in non-performing residential first mortgage loans and the transfer of $104.2 million of non-performing loans to the available-for-sale category.

The allowance for loan losses at December 31, 2010 decreased to $274.0 million from $474.0 million at September 30, 2010 and equaled 4.35% of loans held for investment and 86.1% of non-performing loans held-for-investment. The allowance for loan losses at September 30, 2010 equaled 6.48% of loans held for investment and 52.0% of non-performing loans held-for-investment. At December 31, 2009, the allowance for loan losses 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 principally from the sale of non-performing residential loans and the transfer of similar loans to the available-for-sale category and the concurrent charge-off of the related allowance.

Non-performing residential first mortgage loans held for investment decreased 82%, to $119.9 million at December 31, 2010, as compared to $651.9 million at September 30, 2010. The decrease reflected the sale of certain non-performing loans and the transfer of the additional non-performing loans to the available-for-sale category as discussed above. Non-performing commercial real estate mortgages decreased to $175.6 million at December 31, 2010 as compared to $238.6 million at September 30, 2010, principally due to charge-offs and continuing efforts to dispose of these assets.

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 December 31, 2010, the secondary marketing reserve was $79.4 million, as compared to $77.5 million at September 30, 2010 and $66.0 million at December 31, 2009. For the fourth quarter 2010, the Company incurred a secondary marketing reserve provision expense of $10.3 million, as compared to $13.0 million in the third quarter 2010.

Capital

Flagstar Bank remained “well-capitalized” for regulatory purposes at December 31, 2010, with regulatory capital ratios of 9.61% for Tier 1 capital and 18.49% for total risk-based capital. The Company had a tangible common equity ratio of 7.4% at December 31, 2010.

On November 2, 2010, the Company announced that it completed public equity offerings of $400 million, comprised of common stock and convertible preferred stock. The public offerings resulted in aggregate net proceeds of $385.8 million, after deducting underwriting fees and estimated offering expenses. On December 21, 2010, at a special meeting of stockholders, stockholders approved a proposal to increase the number of shares of common stock, $0.01 par value per share, issuable by the Company from 300,000,000 to 700,000,000. As a result of the stockholder approval, the convertible preferred shares outstanding on the conversion date, December 22, 2010, automatically converted into 283,845,000 shares of common stock, bringing the total number of common shares outstanding at December 31, 2010 to 553,313,000 shares.

Mortgage Banking Operations

In the fourth quarter 2010, gain on loan sales was $76.9 million, as compared to $103.2 million for the third quarter 2010 and $96.5 million for the fourth quarter 2009. This reflects the decrease in interest rate lock commitments and a decline in margin. Gain on loan sale margins decreased to 0.89% for the fourth quarter 2010, as compared to 1.35% for both the third quarter 2010 and the fourth quarter 2009.

Mortgage rate lock commitments decreased to $8.9 billion during the fourth quarter 2010 as compared to $11.0 billion during the third quarter 2010 and increased slightly from $7.9 billion during the fourth quarter 2009. Loan production, substantially comprised of agency-eligible residential first mortgage loans, increased to $9.2 billion in the fourth quarter 2010, as compared to $7.6 billion in the third quarter 2010 and $6.9 billion in the fourth quarter 2009. Loan sales for the fourth quarter of 2010 were $8.6 billion, as compared to $7.6 billion for the third quarter 2010 and $7.1 billion for the fourth quarter 2009.

For the twelve months ended December 31, 2010 gain on loan sales decreased 41% to $297.0 million as compared to $501.3 million for the twelve months ended December 31, 2009. This decrease reflects the 18% decrease in loan sales volume to $26.5 billion for the year ended December 31, 2010, compared to $32.3 billion for the same period 2009. Gain on sale margin decreased to 1.12% for the year ended December 31, 2010 from 1.55% for the 2009 period.

For the twelve months ended December 31, 2010, loan production was $26.6 billion, which was comprised of $15.5 billion originated through the correspondent channel, $9.1 billion originated through the broker channel and $2.0 billion originated through the retail channel, as compared to $32.4 billion for the twelve months ended December 31, 2009.

At December 31, 2010, loans serviced for others totaled $56.0 billion and had a weighted average servicing fee of 30.8 basis points. This was an increase from $52.3 billion at September 30, 2010 with a weighted average servicing fee of 31.5 basis points, and a slight 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 2.08% for the fourth quarter 2010 as compared to 1.55% for the third quarter 2010 and 1.67% for the fourth quarter 2009. The increase from third quarter 2010 reflects a 0.54% decline in funding costs and a 3.7% decline in average interest bearing liabilities to $10.7 billion, which was partially offset by a 0.3% decrease in earning asset yields and a decline in average interest earning assets to $10.8 billion for the fourth quarter 2010. The decline in funding costs during the fourth quarter was due to reduced borrowings and rates associated with Federal Home Loan Bank (FHLB) advances and the payoff during the third quarter of 2010 all of the remaining repurchase agreements.

Net interest margin for the Bank for the year ended December 31, 2010 was 1.64% as compared to 1.65% for the twelve months ended December 31, 2009. This decrease reflects a 0.70% decline in funding costs and a decrease in average interest bearing liabilities of $2.1 billion, for the year ended December 31, 2010 as compared to the same period for 2009. It also reflects a 0.65% decline in yield on earning assets and a $2.3 billion decrease in average earning assets when compared to the year ended December 31, 2009.

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 to maintain an asset sensitive balance sheet and obtain the benefit of the current lower interest rate environment. To this end, the Bank prepaid $500 million in advances 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.

In addition, the Bank reduced its deposit funding costs as higher yielding certificates of deposit matured and were replaced with lower-cost deposits. These deposits included both retail and government certificates of deposits, as to which the average rate on retail certificates of deposits declined 0.60% during the fourth quarter of 2010 and 0.97% for the year ended December 31, 2010, while government certificate rates declined 0.14% and 0.72% for the quarter ended and year ended December 31, 2010, respectively. This caused the overall deposit costs to decline 0.40% and 0.84% for the fourth quarter of 2010 and the year ended December 31, 2010, respectively.

Net Interest Income

	•		Fourth quarter 2010 net interest income increased to $54.4 million, as compared to $41.1 million during the third quarter 2010 and $47.2 million during the fourth quarter 2009. The increase reflects a 0.55% decrease in funding costs offset by a 0.03% decrease in the average yield. Net interest income for the twelve months ended December 31, 2010 declined to $175.6 million from $211.5 million for the same 2009 period.

	•		Fourth quarter loan loss provisions of $225.4 million included $176.5 million in losses recorded on the non-performing loan sale and the reclassification of non-performing loans to the available for sale portfolio. Loan loss provisions for the year ended December 31, 2010 decreased 15% to $426.4 million from $504.4 million for the year ended December 31, 2009.

Non-interest Income

Fourth quarter non-interest income equaled $136.5 million, as compared to $144.9 million for the third quarter 2010 and $131.6 million for the fourth quarter 2009. For the year ended December 31, 2010 non-interest income totaled $453.7 million as compared to $523.3 million for the same 2009 period. Non-interest income included the following components:

	•		Gain on loan sales decreased $26.3 million to $76.9 million, compared to $103.2 million for the third quarter 2010, reflecting the decrease in margin for the fourth quarter of 2010 to 0.89% from 1.35% for the third quarter 2010 and the decline in interest rate locks on mortgage loans to $8.9 billion in the fourth quarter 2010 from $11.0 billion in the third quarter 2010. Residential mortgage loan sales were $8.6 billion for the fourth quarter of 2010 as compared to $7.6 billion in the third quarter 2010. For the year ended December 31, 2010, the gain on loan sales was $297.0 million as compared to $501.3 million for the same period in 2009. The 41% decline is reflective of the decline in both the volume of loan sales and the margin.

	•		Net servicing revenue, which is the combination of net loan administration income and the related hedging effect of gain (loss) on trading securities, increased 21% to $28.1 million during fourth quarter 2010 as compared to $23.2 million during third quarter 2010. The increase reflects a 7.5% increase in the average loans serviced for others portfolio to $54.3 billion for fourth quarter 2010 as compared to $50.5 billion for the third quarter 2010. Net servicing revenue for the year ended December 31, 2010 was $89.2 million, as compared to $13.0 million for the year ended December 31, 2009.

	•		Loan fees, which arise from the origination of residential mortgage loans, increased 17% to $28.6 million for the fourth quarter 2010 as compared to $24.4 million for the third quarter 2010. The increase in loan fees reflected the 21% increase in originations to $9.2 billion during the fourth quarter 2010 as compared to $7.6 billion during the third quarter 2010. For the year ended December 31, 2010, loan fees declined 29% to $89.5 million from $125.2 million for the same 2009 period, reflecting the 17% decline in residential loan originations for the year ended December 31, 2010 to $26.6 billion as compared to $32.4 billion for the year ended December 31, 2009.

	•		Other fees and charges were $(4.7) million, as compared to $(7.7) million for the third quarter 2010, principally as the result of a $2.6 million decrease in secondary market reserve provisions accrued for expected losses on loans repurchased from the secondary market. For the year ended December 31, 2010 and 2009, other fees and charges were a loss of $(41.1) million and $(50.0) million, respectively, which the decline reflects in part, the decline in the secondary market provisions to $61.5 million during 2010 as compared to $75.6 million during 2009.

Non-interest Expense

Non-interest expense decreased to $150.8 million for the fourth quarter 2010, as compared to $152.5 million for the third quarter 2010 and $151.0 million for the fourth quarter 2009. For the year ended December 31, 2010, non-interest expense declined to $575.7 million, as compared to $672.1 million for the 2009 period.

	•		Asset resolution expenses, which are expenses associated with foreclosed property and repurchased assets, decreased 12% to $30.0 million, as compared to $34.2 million in the third quarter of 2010. The decline was principally due to the reduced amount of additional expenses experienced on foreclosed property and repurchased FHA-insured loans offset by an increase in gains recognized on sales of foreclosed properties. Asset resolution expenses related to foreclosed property arising from held-for-investment loans declined 22% in the fourth quarter of 2010 as compared to the third quarter 2010. Asset resolution expenses totaled $126.3 million for the year ended December 31, 2010 as compared to $96.6 million for the same period in 2009.

	•		Compensation and benefits expense increased $6.3 million to $66.1 million in the fourth quarter of 2010, as compared to the third quarter 2010. The increase reflects the new employees to staff the new commercial lending initiatives, additional employees necessary to handle the increased loan production and an increase in incentive pay associated with increased loan underwriting activity. Commission expense increased $1.6 million, or 15%, to $12.6 million. This increase is consistent with the 21% increase in loan production for the fourth quarter 2010, as compared to the third quarter 2010. Compensation, benefits and commissions declined 20% to $238.2 million for the year ended December 31, 2010, reflecting a 48% decrease in commissions and an 11% decrease in compensation and benefits.

	•		Loss on the early extinguishment of debt decreased $11.9 million during the fourth quarter 2010 compared to third quarter 2010, reflecting the prepayment of a $250.0 million advance from the FHLB in the third quarter and no such prepayment in the fourth quarter. For the year ended December 31, 2010, losses on early extinguishment of debt increased 27% to $20.8 million as the result of the prepayment of two advances totaling $500 million and the early payoff of $310.6 million in repurchase agreements during 2010 as compared to FHLB advance prepayments of $650 million during 2009.

	•		The re-valuation of outstanding warrants at the end of fourth quarter 2010 resulted in expense of $7.9 million, as compared to income of $1.4 million recognized at the end of third quarter of 2010. The change in value resulted from an increase in the number of warrants to 6.9 million at December 31, 2010, due to the November 2, 2010 public equity offerings, and also from the increase in the market price of the Company’s common stock since the end of third quarter 2010. Warrant expense totaled $4.2 million for the year ended 2010 as compared to $23.3 million for the same period in 2009, reflecting the initial classification of the US Treasury warrants as liabilities during the first quarter of 2009.

Assets

Total assets at December 31, 2010 were $13.6 billion, as compared to $13.8 billion at September 30, 2010 and $14.0 billion at December 31, 2009. The decrease from September 30, 2010 reflected a continued run-off of and the sale of non-performing residential mortgage loans within the Bank’s held-for-investment portfolio, and decreases in interest-earning deposits, Federal Home Loan Bank stock and securities available for sale, partially offset by an increase in loans available for sale.

Funding Sources

The Bank’s primary sources of funds are deposits obtained through its 162 community banking branches and its internet banking platform as well as deposits obtained from municipalities and investment banking firms. Funds are also obtained from time to time 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 address 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 December 31, 2010 and September 30, 2010 and $5.5 billion at December 31, 2009.

At December 31, 2010, the Bank had a collateralized $4.8 billion line of credit with the FHLB with $1.1 billion of remaining capacity.

Community Banking Operations

Flagstar Bank had 162 community banking branches at both December 31, 2010 and September 30, 2010, and 165 branches at December 31, 2009.

Earnings Conference Call

The Company’s quarterly earnings conference call will be held on Wednesday, January 26, 2011 from 11:00 a.m. until 12:00 noon (Eastern).

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: 36800260.

Flagstar Bancorp, with $13.6 billion in total assets, is the largest publicly held savings bank headquartered in the Midwest. At December 31, 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.
Summary of Selected Consolidated Financial Data
(Dollars in thousands, except per share data)
(Unaudited)


	For the Three Months Ended									For the Years Ended
Summary of Consolidated	December 31,			September 30,			December 31,			December 31,			December 31,
Statements of Operations	2010			2010			2009			2010			2009
Interest income	$	118,292		$	123,217		$	149,405		$	497,737		$	689,338
Interest expense		(63,876	)		(82,103	)		(102,205	)		(322,118	)		(477,798	)

Net interest income		54,416			41,114			47,200			175,619			211,540
Provision for loan losses		(225,375	)		(51,399	)		(94,950	)		(426,353	)		(504,370	)

Net interest loss after provision		(170,959	)		(10,285	)		(47,750	)		(250,734	)		(292,830	)
Non-interest income
Deposit fees and charges		7,385			7,585			8,774			32,181			32,429
Loan fees and charges		28,605			24,365			27,802			89,535			125,168
Loan administration		28,269			12,924			27,407			12,679			7,167
Net (loss) gain on trading securities		(173	)		10,354			(515	)		76,529			5,861
Net gain (loss) on residuals and transferors’ interest		3,812			(4,665	)		(16,243	)		(7,847	)		(82,867	)
Net gain on loan sales		76,930			103,211			96,477			296,965			501,250
(Loss) gain on sales of mortgage servicing rights		(2,303	)		(1,195	)		59			(6,977	)		(3,886	)
Net gain on sale securities available for sale		—			—			8,556			6,689			8,556
Impairment — securities available for sale		(1,313	)		—			(304	)		(4,991	)		(20,747	)
Other fees		(4,749	)		(7,691	)		(20,455	)		(41,083	)		(49,645	)

Total non-interest income		136,463			144,888			131,558			453,680			523,286
Non-interest expenses
Compensation, benefits and commissions		(66,057	)		(59,844	)		(64,686	)		(238,188	)		(297,388	)
Occupancy and equipment		(17,614	)		(15,757	)		(16,456	)		(65,285	)		(70,009	)
Asset resolution		(30,037	)		(34,233	)		(26,930	)		(126,282	)		(96,591	)
Federal insurance premiums		(8,179	)		(8,522	)		(8,099	)		(37,389	)		(36,613	)
Warrant (expense) income		(7,854	)		1,405			4,222			(4,189	)		(23,338	)
Loss on extinguishment of debt		—			(11,855	)		(16,446	)		(20,826	)		(16,446	)
Other taxes		481			(1,964	)		(977	)		(3,180	)		(16,029	)
General and administrative		(21,568	)		(21,756	)		(21,597	)		(80,554	)		(116,617	)

Total non-interest expense		(150,828	)		(152,526	)		(150,969	)		(575,893	)		(673,031	)
Capitalized direct cost of loan closing		48			27			235			238			905

Total non-interest expense after capitalized direct cost of loan closing		(150,780	)		(152,499	)		(150,734	)		(575,655	)		(672,126	)

Loss before federal income taxes and preferred stock dividends		(185,276	)		(17,896	)		(66,926	)		(372,709	)		(441,670	)
Provision for federal income taxes		2,104			—			—			2,104			55,008

Net loss		(187,380	)		(17,896	)		(66,926	)		(374,813	)		(496,678	)
Preferred stock dividends		(4,690	)		(4,690	)		(4,660	)		(18,748	)		(17,124	)

Net loss available to common stockholders	$	(192,070	)	$	(22,586	)	$	(71,586	)	$	(393,561	)	$	(513,802	)

Basic loss per share (1)	$	(0.74	)	$	(0.15	)	$	(1.53	)	$	(2.44	)	$	(16.17	)

Diluted loss per share (1)	$	(0.74	)	$	(0.15	)	$	(1.53	)	$	(2.44	)	$	(16.17	)


1.)		Restated for a 1 for 10 reverse stock split announced May 27, 2010 and completed on May 28, 2010.

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


	For the Three Months Ended									For the Year Ended
Summary of Consolidated	December 31,			September 30,			December 31,			December 31,			December 31,
Statements of Operations	2010			2010			2009			2010			2009
Net interest spread — Consolidated		2.06	%		1.54	%		1.69	%		1.61	%		1.54	%
Net interest margin — Consolidated		2.02	%		1.48	%		1.54	%		1.56	%		1.55	%
Net interest spread — Bank only		2.07	%		1.55	%		1.74	%		1.63	%		1.58	%
Net interest margin — Bank only		2.08	%		1.55	%		1.67	%		1.64	%		1.65	%
Return on average assets		(5.47	)%		(0.64	)%		(1.91	)%		(2.81	)%		(3.24	)%
Return on average equity		(59.38	)%		(8.35	)%		(45.08	)%		(36.63	)%		(62.87	)%
Efficiency ratio		79.0	%		82.0	%		84.3	%		91.5	%		91.5	%
Average interest earning assets	$	10,773,561		$	11,158,181		$	12,283,918		$	11,215,569		$	13,584,016
Average interest paying liabilities	$	10,960,772		$	11,383,551		$	12,843,319		$	11,437,410		$	13,542,712
Average stockholder’s equity	$	1,293,937		$	1,082,499		$	635,151		$	1,074,571		$	817,248
Equity/assets ratio (average for the period)		9.20	%		7.71	%		4.24	%		7.66	%		5.15	%
Ratio of charge-offs to average loans held for investment		5.78	%		5.90	%		4.96	%		4.82	%		4.20	%

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


Summary of Consolidated	December 31,			September 30,			June 30,			December 31,
Statements of Financial Condition:	2010			2010			2010			2009
Total assets	$	13,643,504		$	13,836,573		$	13,693,830		$	14,013,331
Securities classified as trading		160,775			161,000			487,370			330,267
Securities classified as available for sale		475,225			503,568			544,474			605,621
Loans available for sale		2,585,200			1,943,096			1,849,718			1,970,104
Loans available for investment, net		6,031,483			6,838,226			6,835,817			7,190,308
Allowance for loan losses		(274,000	)		(474,000	)		(530,000	)		(524,000	)
Mortgage servicing rights		580,299			447,023			474,814			652,374
Government insured repurchased assets		1,731,276			1,515,928			1,362,519			826,349
Deposits		7,998,099			8,561,943			8,254,046			8,778,469
FHLB advances		3,725,083			3,400,000			3,650,000			3,900,000
Repurchase agreements		—			—			—			108,000
Stockholder’s equity		1,259,663			1,060,729			1,076,361			596,724
Other Financial and Statistical Data:
Equity/assets ratio		9.23	%		7.67	%		7.86	%		4.26	%
Core capital ratio (bank only)		9.61	%		9.12	%		9.24	%		6.19	%
Total risk-based capital ratio (bank only)		18.49	%		16.87	%		17.20	%		11.68	%
Book value per common share	$	1.83		$	5.30		$	5.41		$	7.53
Shares outstanding at the period ended		553,313			153,513			153,338			46,877
Average shares outstanding for the period ended (000’s)		161,565			128,411			115,707			31,766
Average diluted shares outstanding for the period ended (000’s)		161,565			128,411			115,707			31,766
Loans serviced for others	$	56,040,063		$	52,287,204		$	50,385,208		$	56,521,902
Weighted average service fee (bps)		30.8			31.5			32.4			32.1
Value of mortgage servicing rights		1.04	%		0.85	%		0.94	%		1.15	%
Allowance for loan losses to non performing loans held for investment (1)		86.1	%		52.0	%		52.3	%		48.9	%
Allowance for loan losses to loans held for investment (1)		4.35	%		6.48	%		7.20	%		6.79	%
Non-performing assets to total assets		4.35	%		8.25	%		9.06	%		9.25	%
Number of bank branches		162			162			162			165
Number of loan origination centers		27			27			28			32
Number of employees (excluding loan officers and account executives)		3,001			2,922			2,885			3,075
Number of loan officers and account executives		278			285			296			336


(1)		Bank only and does not include non-performing loans available for sale

Loan Originations
(Dollars in thousands)
(Unaudited)


	For the Three Months Ended
	December 31,				September 30,				December 31,
Loan type	2010				2010				2009
Residential mortgage loans	$	9,164,615	99.9	%	$	7,613,502	99.8	%	$	6,902,271	99.9	%
Consumer loans		1,022	—			486	—			936	—
Commercial loans		12,440	0.1			12,715	0.2			8,705	0.1

Total loan production	$	9,178,077	100.0	%	$	7,626,703	100.0	%	$	6,911,912	100.0	%

Loan Originations
(Dollars in thousands)
(Unaudited)


	For the Years ended
	December 31,				December 31,
Loan type	2010				2009
Residential mortgage loans	$	26,560,810	99.9	%	$	32,330,658	99.9	%
Consumer loans		3,068	—			5,802	—
Commercial loans		37,352	0.1			38,640	0.1

Total loan production	$	26,601,230	100.0	%	$	32,375,100	100.0	%

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


	December 31,				September 30,				June 30,				December 31,
Description	2010				2010				2010				2009
First mortgage residential loans	$	3,784,700	60.1	%	$	4,479,814	61.3	%	$	4,614,822	62.7	%	$	4,990,994	64.7	%
Second mortgage residential loans		174,789	2.8			185,062	2.5			196,702	2.7			221.626	2.9
Commercial real estate loans		1,250,301	19.8			1,341,009	18.4			1,439,324	19.5			1,600,271	20.7
Construction loans		8,012	0.1			9,956	0.1			13,003	0.2			16,642	0.2
Warehouse lending		720,770	11.4			913,494	12.5			702,455	9.5			448,567	5.8
Consumer loans		358,036	5.7			373,086	5.1			388,250	5.3			423,842	5.5
Non-real estate commercial		8,875	0.1			9,805	0.1			11,261	0.1			12,366	0.2

Total loans held for investment	$	6,305,483	100.0	%	$	7,312,226	100.0	%	$	7,365,817	100.0	%	$	7,714,308	100.0	%

Composition of First Mortgage and Second Mortgage Residential Loans Held for Investment
As of December 31, 2010
(In thousands)
(unaudited)


	Portfolio Balance 1		Allowance 1
Performing modified (TDR)	$	576,594	$	46,857
Performing and not delinquent within last 36 months		2,084,578		27,700
Performing with mortgage insurance		122,677		—
Other performing		982,984		43,042
Non-performing - 90+ day delinquent		73,551		18,746
Non-performing with mortgage insurance		56,587		1,915
30 day and 60 day delinquent		62,518		4,866

Total	$	3,959,489	$	143,126


1)		Includes first mortgage and second mortgage loans

Composition of Commercial Real Estate and Non-Real Estate Loans Held for Investment
As of December 31, 2010
(In thousands)
(unaudited)


	Portfolio Balance		Allowance
Performing — not impaired	$	933,557	$	31,291
Special mention — not impaired		85,103		5,907
Impaired		73,631		17,181
Non-performing — not impaired		6,485		752
Non-performing		160,400		39,847

Total	$	1,259,176	$	94,978

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


	For the Three Months Ended									For the Years Ended
	December 31,			September 30,			December 31,			December 31,			December 31,
	2010			2010			2009			2010			2009
Beginning Balance	$	(474,000	)	$	(530,000	)	$	(528,000	)	$	(524,000	)	$	(376,000	)
Provision for losses		(48,914	)		(51,399	)		(94,950	)		(249,892	)		(504,370	)
Provision for losses — NPL sale		(176,461	)		—			—			(176,461	)		—

Total provision for losses		(225,375	)		(51,399	)		(94,950	)		(426,353	)		(504,370	)
Charge offs, net of recoveries
First mortgage loans		31,614			38,184			32,782			143,830			124,889
First mortgage loans — NPL sale		327,295			—			—			327,295			—
Second mortgage loans		5,454			6,130			10,597			26,022			41,807
Commercial real estate loans		55,833			57,631			42,311			153,062			144,963
Construction loans		81			417			434			574			2,887
Warehouse loans		182			(240	)		614			1,638			1,111
Consumer loans:
HELOC loans		4,185			4,364			10,160			20,087			34,986
Other consumer loans		340			357			1,391			1,764			3,788
Other		391			556			661			2,081			1,939

Charge-offs, net of recoveries		425,375			107,399			98,950			676,353			356,370

Ending Balance	$	(274,000	)	$	(474,000	)	$	(524,000	)	$	(274,000	)	$	(524,000	)

Composition of Allowance for Loan Losses
As of December 31, 2010
(In thousands)
(Unaudited)


Description	General Reserves		Specific Reserves		Total
First mortgage loans	$	109,262	$	8,677	$	117,939
Second mortgage loans		24,607		580		25,187
Commercial real estate loans		39,176		54,260		93,436
Construction loans		1,004		457		1,461
Warehouse lending		3,115		1,056		4,171
Consumer loans		24,806		13		24,819
Non-real estate commercial		1,117		425		1,542
Other and unallocated		5,445		—		5,445

Total allowance for loan losses	$	208,532	$	65,468	$	274,000

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


	December 31,			September 30,			June 30,			December 31,
	2010			2010			2010			2009
Non-performing loans held for investment	$	318,416		$	911,372		$	1,013,828		$	1,071,636
Real estate owned		151,085			198,585			198,230			176,968
Net repurchased assets/non-performing assets		28,472			31,165			27,985			45,697

Non-performing assets ⁽¹⁾		497,973			1,141,122			1,240,043			1,294,301

Non-performing loans available for sale		94,889			—			—			—

Non-performing assets including loans available for sale	$	592,862		$	1,141,122		$	1,240,043		$	1,294,301

Non-performing loans held for investment as a percentage of loans held for investment ⁽¹⁾		5.05	%		12.46	%		13.76	%		13.89	%
Non-performing assets as a percentage of total assets		4.35	%		8.25	%		9.06	%		9.25	%


(1)		Does not include non-performing loans available for sale

Asset Quality
(Dollars in thousands)
(Unaudited)


	December 31, 2010					September 30, 2010					June 30, 2010					December 31, 2009
			% of					% of					% of					% of
Days delinquent	Balance		Total			Balance		Total			Balance		Total			Balance		Total
30	$	133,449		2.1	%	$	112,741		1.5	%	$	112,697		1.5	%	$	143,500		1.9	%
60		53,745		0.9			73,740		1.0			83,044		1.1			87,625		1.1
90+ and matured delinquent		318,416		5.0			911,372		12.5			1,013,828		13.8			1,071,636		13.9

Total	$	505,610		8.0	%	$	1,097,853		15.0	%	$	1,209,569		16.4	%	$	1,302,761		16.9	%

Loans held for investment	$	6,305,483				$	7,312,226				$	7,365,817				$	7,714,308

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


	For the Three Months Ended
	December 31, 2010						September 30, 2010						December 31, 2009
Description	(000’s)			bps			(000’s)			bps			(000’s)			bps
Valuation gain (loss):
Value of interest rate locks	$	(36,144	)		(42	)	$	4,380			6		$	(30,544	)		(43	)
Value of forward sales		54,937			64			31,649			42			60,838			85
Fair value of loans available for sale		37,099			43			140,993			185			106,153			149
LOCOM adjustments on loans held for investment		248			—			171			—			207			—

Total valuation gains	$	56,140			65		$	177,193			233		$	136,654			191

Sales gains (losses):
Marketing gains		34,300			40		$	17,141			22		$	41,614			58
Pair off losses		5,998			7			(77,404	)		(102	)		(35,990	)		(50	)
Sales adjustments		(7,552	)		(8	)		(4,404	)		(6	)		(37,269	)		(52	)
Provisions for secondary marketing reserve		(11,956	)		(14	)		(9,315	)		(12	)		(8,532	)		(12	)

Total sales (losses) gains		20,790			24			(73,982	)		(98	)		(40,177	)		(56	)

Net gain on loan sales and securitizations	$	76,930			89		$	103,211			135		$	96,477			135

Total loan sales and securitizations	$	8,612,997					$	7,619,097					$	7,143,242

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


	For the Twelve Months Ended
	December 31, 2010						December 31, 2009
Description	(000’s)			bps			(000’s)			bps
Valuation gain (loss):
Value of interest rate locks	$	4,335			2		$	(68,552	)		(21	)
Value of forward sales		8,056			3			89,020			27
Fair value of loans available for sale		340,812			129			530,694			164
LOCOM adjustments on loans held for investment		286			—			(68	)		—

Total valuation gains		353,489			134		$	551,094			170

Sales gains (losses):
Marketing gains		106,760			39		$	144,813			45
Pair off losses		(114,778	)		(43	)		(41,564	)		(13	)
Sales adjustments		(13,306	)		(5	)		(126,623	)		(39	)
Provisions for secondary marketing reserve		(35,200	)		(13	)		(26,470	)		(8	)

Total sales (losses) gains		(56,524	)		(22	)		(49,844	)		(15	)

Net gain on loan sales and securitizations	$	296,965			112		$	501,250			155

Total loan sales and securitizations	$	26,506,672					$	32,326,643

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


	For the Three Months Ended
	December 31, 2010					September 30, 2010					December 31, 2009
	Average		Annualized			Average		Annualized			Average		Annualized
	Balance		Yield/Rate			Balance		Yield/Rate			Balance		Yield/Rate
Interest-Earning Assets:
Loans available for sale	$	2,408,275		4.39	%	$	2,166,072		4.63	%	$	2,228,222		5.28	%
Loans held for investment:
Mortgage loans		4,276,034		4.57			4,734,031		4.52			5,437,706		4.80
Commercial loans		2,149,127		5.11			2,163,004		4.96			2,093,928		4.83
Consumer loans		364,926		6.13			381,725		6.09			440,890		6.12

Loans held for investment		6,790,087		4.83			7,278,760		4.74			7,972,524		4.88
Securities classified as available for sale or trading		659,650		5.28			863,201		5.08			1,654,235		5.21
Interest-bearing deposit		915,549		0.24			848,854		0.24			397,718		0.58
Other		—		—			1,294		0.27			31,219		0.02

Total-interest-earning assets		10,773,561		4.37			11,158,181		4.40			12,283,918		4.85
Other assets		3,284,523					2,874,163					2,697,323

Total assets	$	14,058,084				$	14,032,344				$	14,981,241

Interest-Bearing Liabilities:
Demand deposits	$	391,972		0.42	%	$	378,193		0.48	%	$	344,828		0.51	%
Savings deposits		918,289		0.96			744,889		0.97			691,524		1.12
Money Market deposits		554,803		0.88			542,350		0.96			760,729		1.34
Certificate of deposits		3,314,286		2.17			3,401,739		2.77			3,756,472		3.19

Total retail deposits		5,179,350		1.68			5,067,171		2.14			5,553,553		2.51
Demand deposits		161,056		0.28			214,866		0.26			240,263		0.46
Savings deposits		313,394		0.65			171,880		0.74			88,300		0.58
Certificate of deposits		274,820		0.80			440,540		0.94			387,639		0.76

Total government deposits		749,270		0.63			827,286		0.72			716,202		0.64
Wholesale deposits		987,189		3.15			1,427,463		3.18			1,709,140		3.03

Total deposits		6,915,809		1.78			7,321,920		2.18			7,978,895		2.46
FHLB Advances		3,796,353		3.26			3,813,021		4.14			4,456,242		4.29
Security repurchase agreements		—		—			—		—			108,000		4.34
Other		248,610		2.64			248,610		3.22			300,182		4.97

Total interest-bearing liabilities		10,960,772		2.31			11,383,551		2.86			12,843,319		3.17
Other liabilities		1,803,375					1,566,294					1,502,771
Stockholder’s equity		1,293,937					1,082,499					635,151

Total liabilities and stockholder’s equity	$	14,058,084				$	14,032,344				$	14,981,241

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


	For the Twelve Months Ended
	December 31, 2010					December 31, 2009
	Average		Annualized			Average		Annualized
	Balance		Yield/Rate			Balance		Yield/Rate
Interest-Earning Assets:
Loans available for sale	$	1,945,913		4.69	%	$	2,743,218		5.18	%
Loans held for investment:
Mortgage loans		4,759,105		4.64			5,815,218		5.13
Commercial loans		2,093,262		4.93			2,177,982		5.06
Consumer loans		390,166		6.03			495,454		5.51

Loans held for investment		7,242,533		4.80			8,488,654		5.14
Securities classified as available for sale or trading		1,076,610		5.19			2,048,748		5.25
Interest-bearing deposits		947,286		0.23			267,281		0.89
Other		3,227		0.10			36,115		0.08

Total-interest-earning assets		11,215,569		4.43			13,584,016		5.07
Other assets		2,814,603					2,283,895

Total assets	$	14,030,172				$	15,867,911

Interest-Bearing Liabilities:
Demand deposits	$	382,195		0.50	%	$	303,256		0.49	%
Savings deposits		761,416		0.92			557,109		1.39
Money Market deposits		560,237		0.92			702,120		1.74
Certificate of deposits		3,355,041		2.71			3,950,717		3.68

Total retail deposits		5,058,889		2.08			5,513,202		3.03
Demand deposits		264,473		0.38			117,264		0.50
Savings deposits		158,493		0.65			86,241		0.77
Certificate of deposits		309,051		0.84			611,453		1.59

Total government deposits		732,017		0.63			814,958		1.35
Wholesale deposits		1,456,221		3.09			1,791,999		3.55

Total deposits		7,247,127		2.13			8,120,159		2.97
FHLB Advances		3,849,897		4.03			5,039,779		4.33
Security repurchase agreements		79,053		3.48			108,000		4.33
Other		261,333		3.72			274,774		4.87

Total interest-bearing liabilities		11,437,410		2.82			13,542,712		3.53
Other liabilities		1,518,191					1,507,951
Stockholder’s equity		1,074,571					817,248

Total liabilities and stockholder’s equity	$	14,030,172				$	15,867,911

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


	For the Three Months Ended
	December 31, 2010			September 30, 2010			December 31, 2009
Loss before tax provision/benefit	$	(185,276	)	$	(17,896	)	$	(66,926	)

Add back:
Provision for loan losses		225,375			51,399			94,950
Asset resolution		30,037			34,233			26,930
Other than temporary impairment on AFS investments		1,313			—			304
Secondary marketing reserve provision		10,349			12,958			27,287
Write down of residual interest		(3,812	)		4,665			16,243

Total credit-related-costs:		263,262			103,255			165,714

Pre-tax, pre-credit-cost income	$	77,986		$	85,359		$	98,788


Exhibit No.			Exhibit Description
99.1			Press release of Flagstar Bancorp, Inc. dated January 25, 2011
99.2			Flagstar Bancorp, Inc. Conference Call Presentation Slides – Fourth Quarter 2010 Financial Results


	FLAGSTAR BANCORP, INC.
Dated: January 27, 2011	By:	/s/ Paul D. Borja
		Paul D. Borja
		Executive Vice-President and CFO


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


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


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))


Item 2.02		Results of Operations and Financial Condition


Item 7.01		Regulation FD Disclosure


Item 9.01		Financial Statements and Exhibits