Flagstar Bancorp, Troy, Mich., the holding company for mortgage lender Flagstar Bank, has reported a net loss of $39.2 million ($0.64 per share) for 2007 due partly to a decline in the gain on sales of mortgage servicing rights. In 2006, Flagstar recorded earnings of $75.2 million ($1.17 per share). The company's net gain on MSR sales totaled $5.9 million in 2007, down dramatically from $92.6 million in 2006, according to Flagstar's earnings statement. Mark Hammond, president and chief executive officer of Flagstar, said the company will focus on "managing through" possible further real estate declines and a weakening economy, but pointed to what he called positive trends and fundamentals. "These include our increasing market share for mortgage originations, increased residential loan production, improving gain-on-sale spreads, the potential for higher Fannie Mae, Freddie Mac, and FHA loan limits, and increased credit spreads and lower funding costs, which should result in an improving net interest margin," he said. For the fourth quarter, Flagstar reported a net loss of $30.1 million ($0.50 per share), compared with earnings of $6.9 million ($0.11 per share) a year earlier. Flagstar can be found online at http://www.flagstar.com.

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