Flagstar To Shift Focus Of Mortgage Servicing Business

(RTTNews) - Flagstar Bancorp, Inc. (FBC) said Wednesday that it plans to shift the focus of its mortgage servicing business to performing servicing assets.

Flagstar has made the decision to outsource its non-core default servicing business, which represents less than 4% of its overall servicing book, to a recognized servicer that specializes in that area.

This is part of Flagstar's ongoing strategy to deliver improving performance while maintaining its commitment to its national mortgage business and community banking in Michigan. Part of this strategy is to diversify earnings through the growth of Flagstar's performing mortgage servicing franchise. The transition to a recognized specialty servicer is expected to occur by the end of the third quarter.

While Flagstar will work to redeploy as many employees as possible to other parts of the company, the outsourcing arrangement is expected to affect about 300 positions in the non-performing mortgage servicing business.

By outsourcing the default servicing business, Flagstar expects to realize significant cost savings.