Stearns Lending sells its delegated correspondent lending business to Flagstar

Flagstar Bancorp is set to expand its correspondent lending business as the bank announced on Monday its intention to acquire Stearns Loanthe delegated correspondent lending activity of .

According to details provided by Flagstar, Stearns’ correspondent business includes approximately 250 correspondent relationships, which generate more than $7 billion in agency and government residential mortgage production annually.

Under the terms of the agreement, Stearns employees and contractors associated with outsourced activities will transition to Flagstar, the companies said.

For Stearns Lending, company CEO Brian Hale said the company wanted to find a strong organization to sell the matching 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 – made up of community banks, credit unions and mortgage companies owned by builders – was with a lender that would continue to serve them well,” Hale said.

“Equally important, we wanted to ensure that our employees were part of a reputable and well-run organization,” added Hale. “Flagstar certainly met both of our criteria.”

Once the deal closes, Flagstar will become the 4th largest matched loan originator in the country, the bank said, citing data from Inside Mortgage Financing.

“The acquisition of Stearns’ correspondent platform provides us with a tremendous opportunity to expand our market share in the delegate space,” said Alessandro DiNello, President and CEO of Flagstar.

“Throughout our review of the business, we were impressed with the Stearns team’s approach to the correspondent channel, their focus on customer service and their commitment to sound risks. We believe this team will be a strong cultural fit with Team Flagstar,” added DiNello.

“We are delighted to add the high quality team of Stearns. We believe there is a continued opportunity to grow our market share and expand our relationships with these correspondents,” Dinello concluded. As a bank, we can offer these new customers additional products and services, deepening our relationship with them.”

Financial terms of the deal were not disclosed and the companies said they expect the deal to close within the next 30 days.

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