Flagstar Bank Reaffirms Commitment to Quality VA Lending

TROY, Mich., Feb. 12, 2018

"We value our VA business for many reasons, but most of all because it benefits veterans," said Alessandro DiNello, president and CEO of Flagstar Bank. "That's a trust we would never even consider violating, which is why we put every effort into ensuring we adhere to the rules and regulations that protect veterans who are buying or refinancing homes.

"We have been a VA partner for 30 years and a long-time leader in VA lending. We highly value the VA program and the opportunity for homeownership that it gives to our veterans. We have policies and procedures in place to prevent churning. And, simply put, we do not churn."

Flagstar uses a number of tools to protect borrowers, investors, and itself, from serial refinancing or churning, including:

• An early payoff policy that requires third party originators (TPOs) to pay a penalty for any loan that is paid in full within 180 days of purchase.
• Our STAR Rating system, a proprietary measurement of a TPO's performance in key risk categories that adjusts pricing to incentivize responsible long-term performance and assesses penalties for excessive early payoffs.
• Underwriting guidelines in place since 2008 in all origination channels (retail and TPO) that require a minimum net tangible benefit to the borrower on all refinance transactions.
• A requirement since 2016 for VA Interest Rate Reduction Refinance Loans that a minimum of six consecutive monthly payments be made on the loan before it is eligible for refinance.

In 2017, Flagstar originated $4.8 billion in VA loans across the country out of its total mortgage originations of $34.4 billion.

About Flagstar
Flagstar Bancorp, Inc. (NYSE: FBC) is a $16.9 billion savings and loan holding company headquartered in Troy, Mich. Flagstar Bank, FSB, provides commercial, small business, and consumer banking services through 99 branches in the state. It also provides home loans through a wholesale network of brokers and correspondents in all 50 states, as well as 89 retail locations in 29 states, representing the combined retail branches of Flagstar and Opes Advisors mortgage division. Flagstar is a leading national originator and servicer of mortgage loans, handling payments and record keeping for $98 billion of home loans representing over 442,000 borrowers. For more information, please visit flagstar.com.