Flagstar Bancorp is about to grow its correspondent lending business, as the bank announced Monday that it plans to acquire Stearns Lending’s delegated correspondent lending business.
According to details provided by Flagstar, Stearns correspondent business includes approximately 250 correspondent relationships, which produce more than $7 billion of agency and governmental residential mortgage loan production annually.
Under the terms of the deal, Stearns' employees and subcontractors associated with the delegated business will transition to Flagstar, the companies said.
For Stearns Lending, the company’s CEO, Brian Hale, said the company wanted to find a solid organization to sell the correspondent lending business to.
“When we decided to exit this business for strategic reasons, we had two key objectives: first, we wanted to ensure that our network of correspondent lenders – consisting of community banks, credit unions and builder-owned mortgage companies – was with a lender that would continue to serve them well,” Hale said.
“Equally important, we wanted to make sure that our employees were with a reputable, well-run organization,” Hale added. “Flagstar certainly met both our criteria.”
Upon the completion of the deal, Flagstar will become the 4th largest correspondent loan originator in the country, the bank said, citing data from Inside Mortgage Finance.
“The acquisition of Stearns' correspondent platform gives us a tremendous opportunity to expand our market share in the delegated space,” said Alessandro DiNello, Flagstar's president and chief executive officer.
“Throughout our analysis of the business, we have been impressed with the Stearns' team's approach to the correspondent channel, their focus on customer service and their commitment to sound risk management. We believe this team will be a strong cultural fit with the Flagstar team,” DiNello added.
“We are excited to add the high-quality team from Stearns. We believe that there is a continued opportunity to grow our market share and expand our relationship with these correspondents,” Dinello concluded. “Being a bank, we can offer these new customers additional products and services, deepening our relationships with them.”
Financial terms of the deal were not disclosed, and the companies said that they expect the deal to close in the next 30 days.