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Stearns Lending continues expansion, buying piece of Citywide Home Loans

Also closes on acquisition of minority stake in Certainty Home Loans

Over the last few years, Stearns Lending has been in growth mode, rolling out new loan programs and acquiring new lending channels, and it appears the company is not done growing yet.

Stearns announced Tuesday that it plans to acquire an equity interest in Citywide Home Loans, an independent mortgage bank with operations in 36 states.

The move is part of Stearns’ push to grow its retail lending operations.

According to the companies, Citywide’s current ownership will continue to hold a “significant” share of the company’s equity. Additionally, Citywide will continue to use the same name and will continue under the leadership of Steve Goorman, who serves as president, and Teresa Whitehead, who serves as CEO.

Whitehead was honored by HousingWire Magazine in both 2017 and 2018 for her role at Citywide. Last year, Whitehead was named a HW Vanguard Award winner as one of the housing industry’s foremost leaders. And this year, Whitehead was honored as a Women of Influence winner, an award reserved for the women who are shaping the industry.

Citywide, which was founded in 1998, now has more than 700 employees and operates 72 branches in 36 states. Last year, the company originated $3.2 billion in mortgages.

So what’s the upshot for both companies here? For Stearns, the deal is about growing its retail presence, while Citywide will be able to use Stearns technology and capital markets expertise to continue growing.

“Citywide’s long successful track record and outstanding reputation in the mortgage industry, along with our shared values and complementary business models make our companies ideal partners,” David Schneider, CEO of Stearns Lending, said.

“Combining Citywide’s strong retail profile with our industry-leading technology, direct access to capital markets expertise, and operational excellence will produce some incredible benefits and opportunities for both companies,” Schneider continued. “We’ve seen very positive results with a similar structure in our Joint Venture business model, which currently operates under ten different brands across the country, and expect to see the same results or better.”

The companies expect the deal to close later this year.

“We are thrilled,” Whitehead said. “This partnership gives Citywide the cutting edge technology and capital markets execution to stay strong and growing in today’s market.”

The deal is Stearns second such acquisition in just the last few months. Back in July, Stearns announced that it was acquiring a stake of Certainty Home Loans, the lender formerly known as Starkey Mortgage.

That deal actually closed this week, and both companies are confident that the deal will prove to be mutually beneficial.

“Today’s successful mortgage companies understand the power of economies of scale and combined resources. Certainty Home Loans’ strong retail, consumer-centric model along with our wholesale, retail and strategic alliance sectors, allows us to provide our employees, customers, and partners with industry-leading technology and resources that help the dream of homeownership become a reality,” Schneider said.

Schneider added that the partnership will help accelerate the growth of the company’s retail sales channel, as well as increasing its geographic footprint.

According to Stearns, the deal with Certainty is the first in its “Preferred Partner Platform,” in which Certainty will have access to Stearns’ technology, capital markets knowledge, and operational experience, much like Citywide will upon the completion of that deal.

“By leveraging Stearns’ advanced technology platform to streamline and improve interactions with partners, customers and each other, this partnership allows Certainty Home Loans to accelerate growth plans,” Jim Clapp, president of Certainty Home Loans, said.

Financial terms of the deals were not disclosed.

3d rendering of a row of luxury townhouses along a street

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