Guaranteed Rate to acquire Stearns Lending

Chicago-based lender Guaranteed Rate is acquiring multi-channel lender Stearns Holdings for an undisclosed sum, multiple sources told HousingWire Tuesday.

Employees at Stearns, which is owned by financial giant Blackstone Group, were told in an all-hands call on Tuesday afternoon, sources told HousingWire.

In a statement confirming the deal Tuesday afternoon, Guaranteed Rate said the acquisition of Stearns would enable a boost in retail loan originations and further scale its JV platform, while also developing “new multichannel capabilities.”

The acquisition of Stearns – at one time the nation’s largest wholesaler – would provide Guaranteed Rate a significant new revenue stream as it considers a potential IPO, sources familiar with the deal told HousingWire.

It’s unclear what the deal values Stearns at, but the lender originated $20 billion in mortgages last year, according to Guaranteed Rate, which claims to have originated $73 billion in mortgages in 2020.

Stearns operates across correspondent, retail and wholesale channels, though it’s best known for its broker-focused operations and corporate partnerships. Stearns has exclusive partnerships with real estate agent, builder and corporate relocation joint ventures, as well as a book of business with SoFi and Home Mortgage Alliance.

The strategy dovetails nicely with that of Guaranteed Rate, which has joint ventures with brokerage conglomerate Realogy and Chicag-based @properties.

Blackstone took full control of Stearns in fall 2019 after it exited bankruptcy due to significant debt problems.

Guaranteed Rate said it expects the deal to strengthen its capital markets execution and produce synergies that will allow for additional profitability.

Guaranteed Rate, founded in 2000 and known for its robust retail operations, has been growing in stature in recent years. Stearns’ retail operations will be folded into Guaranteed Rate, though the wholesale and correspondent channels will remain as stand-alone businesses led by Stearns’ CEO David Schneider.

Guaranteed Rate ended the year as the 11th-largest lender in the country, according to Inside Mortgage Finance. The Chicago-based lender had two loan originators eclipse $1 billion in originations in 2020.

This is a breaking news story. Check back for more updates.

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