Flagstar made a top pick at Compass Point

• The deal with Freddie Mac means Flagstar (NYSE:FBC) has effectively settled the vast majority of its rep and warranty claims with the GSEs and will likely be shown to have over-reserved for them, says analyst Kevin Barker, who also expects the bank to report either a gain on sale or material mark-up in the value of its MSRs in Q4.
• "These two events, should put the company in a better position to report positive earnings in the face mortgage banking headwinds and potentially release the valuation allowance on the deferred tax assets."
• The stock is added to Compass Point's Focus List and the price target is upped to $23 from $21.
• Shares +0.5% premarket