Flagstar Enters Into Settlement Agreement with Assured Flagstar to Recognize $48 Million of Income

 Flagstar Enters Into Settlement Agreement with Assured Flagstar to Recognize
                            $48 Million of Income

PR Newswire

TROY, Mich., June 21, 2013

TROY, Mich., June 21, 2013 /PRNewswire/ -- Flagstar Bancorp, Inc. (NYSE: FBC)
("Flagstar" or the "Company"), the holding company for Flagstar Bank, FSB (the
"Bank"), announced today that the Bank has entered into an agreement (the
"Settlement Agreement") to settle the previously disclosed lawsuit filed by
Assured Guaranty Municipal Corp., formerly known as Financial Security
Assurance Inc. ("Assured"). The litigation, which was filed in the U.S.
District Court for the Southern District of New York, relates to $902.2
million of non-agency securitization transactions in 2005 and 2006 involving
home equity line of credit ("HELOC") loans that Assured insures.

Under the terms of the Settlement Agreement, Assured will terminate its
pending lawsuit against Flagstar and will not pursue any related claims at any
time in the future. In exchange, Flagstar will pay Assured $105.0 million and
will assume responsibility for future claims associated with the two HELOC
securitization trusts, including the right to receive from Assured all future
reimbursements for claims paid to which Assured would have been entitled. As
a result, Flagstar will recognize $48.3 million of income, arising from its
deemed receipt of the net fair value of the assets in the two HELOC
securitizations and the reversal of its related reserves for pending and
threatened litigation.

Alessandro (Sandro) DiNello, Flagstar's President and Chief Executive Officer,
said, "This agreement with Assured represents a favorable resolution of
Flagstar's last remaining significant legacy legal matter. Flagstar is a
leading Michigan-based community bank with a strong national mortgage
business, and we are continuing to focus on our business as we put legacy
issues behind us. As we begin the next phase of our growth and development,
we are confident that the Company is well positioned for long-term success and
shareholder value creation."

About Flagstar

Flagstar is the holding company for the Bank, a full-service financial
institution offering a range of products and services to consumers,
businesses, and homeowners. With $13.1 billion in total assets at March 31,
2013, Flagstar is the largest publicly held savings bank headquartered in the
Midwest. Flagstar operates 111 banking centers, all of which are located in
Michigan and 41 home lending centers located in 19 states, which primarily
originate one-to-four family residential first mortgage loans. Originating
loans nationwide, Flagstar is one of the leading originators of residential
first mortgage loans. For more information, please visit flagstar.com.

Forward Looking Statements

This press release contains "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995, as amended.
Forward-looking statements, by their nature, involve estimates, projections,
goals, forecasts, assumptions, risks and uncertainties that are difficult to
predict and could cause actual results or outcomes to differ materially from
those expressed in a forward-looking statement. Forward-looking statements
contained in this press release and any information related to expectations
about future events or results are based upon information available to the
Company as of the date hereof. Forward-looking statements can be identified
by such words as "anticipates," "intends," "plans," "seeks," "believes,"
"expects", "estimates," and similar references to future periods. Examples of
forward-looking statements include, but are not limited to, statements made
regarding the Company's current expectations, plans or forecasts of its core
business drivers, credit related costs, asset quality, capital adequacy and
liquidity, the implementation of the Company's business plan and growth
strategies, the suspension of dividend payments on preferred stock, the
deferral of interest payment on trust preferred securities, the result of
improvements to the Company's servicing processes, and other similar matters.
Although we believe that these forward-looking statements are based on
reasonable estimates and assumptions, they are not guarantees of future
performance and are subject to known and unknown risks, uncertainties,
contingencies, and other factors. Accordingly, we cannot give you any
assurance that our expectations will in fact occur or that actual results will
not differ materially from those expressed or implied by such forward-looking
statements. We caution you not to place undue reliance on any forward-looking
statement and to consider all of the following uncertainties and risks, as
well as those more fully discussed in the Company's filings with the
Securities and Exchange Commission ("SEC"), including, but not limited to, our
Form 10-K and Forms 10-Q: volatile interest rates that impact, among other
things, the mortgage banking business, our ability to originate loans and sell
assets at a profit, prepayment speeds and our cost of funds; changes in
regulatory capital requirements or an inability to achieve or maintain desired
capital ratios; actions of mortgage loan purchasers, guarantors and insurers
regarding repurchases and indemnity demands and uncertainty related to
foreclosure procedures; uncertainty regarding pending and threatened
litigation; our ability to control credit related costs and forecast the
adequacy of reserves; the imposition of regulatory enforcement actions against
Flagstar; compliance with the Supervisory Agreement with the Board of
Governors of the Federal Reserve System and the Consent Order with the Office
of the Comptroller of the Currency. Except to the extent required under the
federal securities laws and the rules and regulations promulgated by the SEC,
the Company undertakes no obligation to update any such statement to reflect
events or circumstances after the date on which it is made.



SOURCE Flagstar Bancorp

Website: http://www.flagstar.com
Contact: Bradley T. Howes, Investor Relations Officer, (248) 312-2000
 
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