Chicago-based lender Guaranteed rate acquires a multi-channel lender Stearns Holdings for an undisclosed sum, multiple sources told HousingWire on Tuesday.
Employees at Stearns, which is owned by the financial giant Blackstone Group, were informed in a show of hands on Tuesday afternoon, sources told HousingWire.
In a statement confirming the deal Tuesday afternoon, Guaranteed Rate said the acquisition of Stearns would boost retail loan creations and further expand its JV platform, while also developing “new multi-channel capabilities.” He also noted that Blackstone “would have an interest in the guaranteed rate and will continue to support the integration and growth of the guaranteed rate vision”.
The acquisition of Stearns – at one time the nation’s largest wholesaler – would provide the guaranteed rate with a significant new source of income as it contemplates a potential IPO, people familiar with the deal told HousingWire.
Guaranteed Rate declined to comment beyond the press release.
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It’s unclear what the deal is valued at, but the lender issued $ 20 billion in mortgages last year, according to the guaranteed rate, which itself claims to have generated $ 73 billion in mortgages in 2020.
Stearns operates across multiple channels, although it is 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 business portfolio with SoFi and Home Mortgage Alliance.
The strategy fits well with the guaranteed rate strategy, which has joint ventures with Chicago-based brokerage conglomerate Realogy and @properties.
Guaranteed Rate said he expects the deal to strengthen its execution in financial markets and produce synergies that will enable stronger profitability in the years to come.
Founded in 2000 and known for its robust retail operations, the guaranteed rate has gained momentum in recent years. Stearns’ retail operations will be integrated at the guaranteed rate, although the wholesale, joint venture and partnership activities will remain stand-alone segments led by Stearns CEO David Schneider.
The guaranteed rate ended the year as the 11th largest lender in the country, according to Inside Mortgage Finance. The Chicago-based company had two loan originators eclipse $ 1 billion in origins in 2020.