Flagstar Successfully Completes Previously Announced Capital Raise

As previously announced, the Company sold 11,365,000 shares of common stock at a purchase price of $4.25 per share to the institutional investors, 635,000 shares of its common stock, in the aggregate, to Mr. Thomas Hammond and Mr. Mark Hammond at a purchase price of $5.88 per share, and 47,982 shares of mandatory convertible non-cumulative perpetual preferred stock to the institutional investors at a purchase price and liquidation preference of $1,000 per share.

Upon stockholder approval, the convertible preferred stock will automatically convert into the Company's common stock at an initial exercise price of $4.25 per share, subject to customary anti-dilution adjustments.

Flagstar Bancorp, with $15.9 billion in total assets, is the largest publicly held savings bank headquartered in the Midwest. At March 31, 2008, Flagstar operated 167 banking centers in Michigan, Indiana and Georgia and 138 home loan centers in 26 states. Flagstar Bank originates loans nationwide and is one of the leading originators of residential mortgage loans. -- Flagstar Bancorp, Inc.