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                                                                    EXHIBIT 10.1

                              EMPLOYMENT AGREEMENT

      THIS AGREEMENT is made effective as of July 6, 2004 (the "Effective
Date"), by and between Flagstar Bank, FSB (the "Bank") and Joel Murray (the
"Employee").

      WHEREAS, the Bank wishes to assure retention of the services of the
Employee for the period provided in this Agreement; and

      WHEREAS, the Employee is willing to serve in the employ of the Bank for
said period.

      NOW, THEREFORE, it is AGREED as follow:

      1. Employment. The Employee is employed as a First Vice President of the
Bank. The Employee shall render such administrative and management services for
the Bank as are currently rendered and as are customarily performed by persons
situated in a similar executive capacity. The Employee's other duties shall be
such as the Board of Directors of the Bank ("Board") or the Employee's direct or
indirect supervisors may from time to time reasonably direct, including normal
duties as an officer of the Bank.

      2. Base Compensation. The Bank agrees to pay the Employee during the term
of this Agreement a salary at the rate of $200,000 for the first year and
$215,000 for the second year and $225,000 for the third year, payable in cash in
accordance with the Bank's payroll procedures. The Board shall review, not less
often than annually, the rate of the Employee's salary, and in its sole
discretion may decide to increase his salary.

      3. Discretionary Bonuses. The Employee may be entitled to annual bonuses
at the sole discretion of the Board. No other compensation provided for in this
Agreement shall be deemed a substitute for the Employee's right to participate
in such discretionary bonuses.

      4. (a) Participation in Retirement, Medical and Other Plans. The Employee
shall participate in any plan that the Bank maintains for the benefit of its
employees at Employee's level if the plan relates to (i) pension,
profit-sharing, or other retirement benefits, (ii) medical insurance or the
reimbursement of medical or dependent care expenses, or (iii) other group
benefits, including disability and life insurance plans.

         (b) Employee Benefits: Expenses. The Employee shall participate in any
fringe benefits, paid-time off policy and other employee benefits that are or
may become available to the Bank's senior management employees and which are
commensurate with the responsibilities and functions to be performed by the
Employee under this Agreement. The Employee shall be reimbursed for all
reasonable out-of-pocket business expenses that he shall incur in connection
with his services under this Agreement upon substantiation of such expenses in
accordance with the policies of the Bank.

      5. Term. The Bank hereby employs the Employee, and the Employee hereby
accepts such employment under this Agreement, for the period commencing on the
Effective Date and ending thirty-six (36) months thereafter (or such earlier
date as is determined in accordance with Section 8).

      6. Loyalty: Noncompetition

         (a) During the period of his employment hereunder and except for
illnesses, reasonable vacation periods, and reasonable leaves of absence, the
Employee shall devote all his full business time, attention, skill, and efforts
to the faithful performance of his duties to the Bank hereunder and/or to its
affiliates; provided, however, that from time to time, the Employee may serve on
the boards of directors of, and hold any other offices or positions in,
companies or organizations which will not present, in the reasonable opinion of
the Board, any conflict of interest with the Bank or any of its subsidiaries or
affiliates, or unfavorably affect the performance of the Employee's duties
pursuant to this Agreement, or will not violate any applicable statute or
regulation. "Full business time" is hereby defined as that amount of time
usually devoted to like companies by similarly situated executive officers.
During the
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term of his employment under this Agreement, the Employee shall not engage in
any business or activity contrary to the business affairs or interests of the
Bank and/or its affiliates, or be gainfully employed in any other position or
job other than as provided above.

         (b) Nothing contained in this Paragraph 6 shall be deemed to prevent or
limit the Employee's right to invest in the capital stock or other securities of
any business dissimilar from that of the Bank, or, solely as a passive or
minority investor, in any business.

      7. Standards. The Employee shall perform his duties under this Agreement
in accordance with such reasonable standards as the Board may establish from
time to time. The Bank will provide the Employee with the working facilities and
staff customary for similar executives and necessary for him to perform his
duties.

      8. Termination and Termination Pay. The Employee's employment hereunder
may be terminated under the following circumstances:

      (a) Death. The Employee's employment under this Agreement shall terminate
upon his death during the term of this Agreement, in which event the Employee's
estate shall be entitled to receive the compensation due the Employee for the
remaining term of the contract, payable in a lump sum if election is made by the
spouse within 30 days of Employee's death or otherwise on a monthly basis, plus
any accrued and unpaid discretionary bonus due Employee at the time of his
death, payable in a lump sum amount within 30 days of the Employee's death. In
addition, the Bank shall maintain the existing medical insurance for the
Employee's spouse for six months after the Employee's death.

      (b) Disability. (1) The Bank may terminate the Employee's employment after
having established the Employee's Disability. For purposes of this Agreement,
"Disability" means a physical or mental infirmity which impairs the Employee's
ability to substantially perform his duties under this Agreement and which
results in the Employee becoming eligible for long-term disability benefits
under the Banks long-term disability plan (or, if the Bank has no such plan in
effect, which impairs, or which can be expected to impair, the Employee's
ability to substantially perform his duties under this Agreement for a period of
180 consecutive days). The Employee shall be entitled to the compensation and
benefits provided for under this Agreement for a period equal to the lesser of
(i) twelve (12) months or (ii) the remaining term of this Agreement, in each
case, as measured from the date that Employee's ability to perform his duties
under this Agreement was first impaired.

         (2) During any period that the Employee shall receive disability
benefits and to the extent that the Employee shall be physically and mentally
able to do so, he shall furnish such information, assistance and documents so as
to assist in the continued ongoing business of the Bank and, if able, shall make
himself available to the Bank to undertake reasonable assignments consistent
with his prior position and his physical and mental health. The Bank shall pay
all reasonable expenses incident to the performance of any assignment given to
the Employee during the disability period.

      (c) Just Cause. The Board may, by written notice to the Employee,
immediately terminate his employment at any time, for Just Cause. The Employee
shall have no right to receive compensation or other benefits for any period
after termination for Just Cause. Termination for "Just Cause" shall mean
termination because of, in good faith determination of the Board, the Employee's
personal dishonesty, incompetence, willful misconduct, breach of fiduciary duty
involving personal profit, failure to perform stated duties, willful violation
of any law, rule or regulation (other than traffic violations or similar
offenses) or final cease-and-desist order, or material breach of any provision
of this Agreement. No act, or failure to act, on the Employee's part shall be
considered "willful" unless he has acted, or failed to act, with an absence of
good faith and without a reasonable belief that his action or failure to act was
in the best interest of the Bank. Notwithstanding the foregoing, the Employee
shall not be deemed to have been terminated for Just Cause unless there shall
have been delivered to the Employee a copy of a resolution duly adopted by the
affirmative vote of not less than a majority of the entire membership of the
Board at a meeting of the Board called and held for that purpose (after
reasonable notice to the Employee and an opportunity for the Employee to be
heard before the Board), finding that in the good faith opinion of the Board the
Employee was guilty of conduct set forth above in the third sentence of this
Subsection (c) and specifying the particulars thereof in detail. If following
such meeting the Employee is reinstated, he shall be entitled to receive back
pay for the period following termination and continuing through reinstatement.
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      (d) Without Just Cause; Constructive Discharge. (1) The Board may, by
written notice to the Employee, immediately terminate his employment at any time
for a reason other than Just Cause, in which event the Employee shall be
entitled to receive the following compensation and benefits: (i) the salary
provided pursuant to Section 2 hereof, up to the date of termination of the term
as provided in Section 5 hereof of this Agreement (the "Expiration Date"), and
(ii) cash in an amount equal to the cost to the Employee of obtaining all
health, life, disability and other benefits which the Employee would have been
eligible to participate in through the Expiration Date based upon the benefit
levels substantially equal to those that the Bank benefit plans through the
Expiration Date, but only to the extent the Employee continues to quality for
participation therein. All amounts payable to the Employee shall be paid, at the
option of the Employee, either (I) in periodic payments through the Expiration
Date, or (II) in one lump sum within 10 days of such termination.

         (2) Notwithstanding the foregoing, but only to the extent required
under federal banking law, the amount payable under clause (d)(1)(i) hereof
shall be reduced to the extent that on the date of the Employee's termination of
employment, the present value of the benefits payable under clauses (d)(1)(i)and
(ii) hereof exceeds the limitation on severance benefits that is set forth in
Regulation Bulletin 27a of the Office of Thrift Supervision ("OTS"), as in
effect on the Effective Date.

      (e) Termination or Suspension Under Federal Law. (1) if the Employee is
removed and/or permanently prohibited from participating in the conduct of the
Bank's affairs by an order issued under Sections 8(eX4) or 8(g)(1) of the
Federal Deposit Insurance Act ("FDIA")(12 U.S.C. 1818(e)(4) and (g)(1)), all
obligations of the Bank under this Agreement shall terminate, as of the
effective date of the order, but vested rights of the parties shall not be
affected.

         (2) If the Bank is in default (as defined in Section 3(x)(1) of FDIA),
all obligations under this Agreement shall terminate as of the date of default;
however, this Paragraph shall not affect the vested rights of the parties.

         (3) All obligations under this Agreement shall terminate, except to the
extent that continuation of this Agreement is necessary for the continued
operation of the Bank: (i) by the Director of the OTS, or his or her designee,
at the time that the Federal Deposit Insurance Corporation ("FDlC") or the
Resolution Trust Corporation enters into an agreement to provide assistance to
or on behalf of the Bank under the authority contained in Section 13(c) of the
FDIA; or (ii) by the Director of the OTS, or his or her designee approves a
supervisory merger to resolve problems related to operation of the Bank or when
the Bank is determined by the Director of the OTS to be in an unsafe or unsound
condition. Such action shall not affect any vested rights of the parties.

        (4) If a notice served under Section 8(e)(3) or (g)(1) of the FDIA (12
U.S.C. 1818(e)(3) or (g)(1) suspends and/or temporarily prohibits the Employee
from participating in the conduct of the Bank's affairs, the Bank's obligations
under this Agreement shall be suspended as of the date of such service, unless
stayed by appropriate proceedings. If the charges in the notice are dismissed,
the Bank may in its discretion (i) pay the Employee all or part of the
compensation withheld while its contract obligations were suspended, and (ii)
reinstate (in whole or in part) any of its obligations which were suspended.

      (f) Voluntary Termination by Employee. The Employee may voluntarily
terminate employment with the Bank during the term of this Agreement, upon at
least 60 days' prior written notice to the Board of Directors, in which case the
Employee shall receive only his compensation, vested rights and employee
benefits up to the date of his termination

      9. No Mitigation. The Employee shall not be required to mitigate the
amount of any payment provided for in this Agreement by seeking other employment
or otherwise and no such payment shall be offset or reduced by the amount of any
compensation or benefits provided to the Employee in any subsequent employment.

      10. Arbitration. Any dispute or controversy arising under or in connection
with this Agreement shall be settled exclusively by arbitration in accordance
with the rules of the American Arbitration Association then in effect. Judgment
may be entered on the arbitration award in any court having jurisdiction;
provided, however, that until the Expiration Date the Employee shall be entitled
to seek specific performance of his right to be paid during the
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pendency of any dispute or controversy arising under or in connection with this
Agreement. Any arbitration proceeding shall be governed by and subject to
Michigan arbitration law.

      11. Federal income Tax Withholding. The Bank may withhold all Federal and
State income or other taxes from any benefit payable under this Agreement as
shall be required pursuant to any law or government regulation or ruling.

      12. Successors and Assigns

      (a) Bank. This Agreement shall not be assigned by the Bank, provided that
this Agreement shall inure to the benefit of and be binding upon any corporate
or other successor of the Bank which shall acquire, directly or indirectly, by
merger, consolidation, purchase or otherwise, all or substantially all of the
assets or stock of the Bank.

      (b) Employee. Since the Bank is contracting for the unique and personal
skills of the Employee, the Employee shall be precluded from assigning or
delegating his rights or duties hereunder, provided, however, that nothing in
this paragraph shall preclude (i) the Employee from designating a beneficiary to
receive any benefit payable hereunder upon his death, or (ii) the executors,
administrators, or other legal representatives of the Employee or his estate
from assigning any rights hereunder to the person or persons entitled thereunto.

      (c) Attachment. Except as required by law, no right to receive payments
under this Agreement shall be subject to anticipation, commutation, alienation,
sale, assignment, encumbrance, charge, pledge, or hypothecation or to exclusion,
attachment, levy or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to effect any such action shall be null, void
and of no effect.

      13. Amendments. No amendments or additions to this Agreement shall be
binding unless made in writing and signed by all of the parties, except as
herein otherwise specifically provided.

      14. Applicable Law. Except to the extent preempted by Federal law, the
laws of the State of Michigan shall govern this Agreement in all respects,
whether as to its validity, construction, capacity, performance or otherwise.

      15. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.

      16. Entire Agreement. This Agreement, together with any understanding or
modifications thereof as agreed to in writing by the parties, shall constitute
the entire agreement between the parties hereto.

      IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first hereinabove written.

FLAGSTAR BANK, FSB


/s/ Mark Hammond
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By: Mark Hammond

Its:  Chief Executive Officer

/s/ Joel Murray
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Joel Murray