Flagstar made a top pick at Compass Point

|About: Flagstar Bancorp, Inc. (FBC)|By:, SA News Editor

The deal with Freddie Mac means Flagstar (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.

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