With an acquisition deal negotiated, Flagstar Bancorp Inc. will be able to claim the title of the fourth-largest correspondent mortgage originator.
Flagstar
previously reported that overall residential production from all originations channels was $32.453 billion during all of last year.
Included in the Troy, Michigan-based financial institution’s full-year 2016 volume was $24.5 billion in correspondent loan acquisitions.
But a definitive agreement disclosed Monday by Flagstar to acquire Stearns Lending Inc.’s residential delegated correspondent lending platform will push correspondent production higher — making it the fourth-largest correspondent originator in the country.
The business includes approximately 250 correspondent relationships that generate more than $7 billion annually in agency and government production.
Santa Ana, California-based Stearns previously reported as part of the Mortgage Daily Third Quarter 2016 Mortgage Origination Survey that
it had made 28,982 correspondent acquisitions for $7.141 billion during the first-nine months of last year.
Employees and contractors working for Stearns’ delegated correspondent business will move over to Flagstar.
The sale also includes some related assets.
“The acquisition of Stearns’ correspondent platform gives us a tremendous opportunity to expand our market share in the delegated space,” Flagstar President and Chief Executive Officer Alessandro P. DiNello said in a statement. “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 went on to explain that Flagstar’s status as a bank enables it to offer Stearns’ customers additional products and services and deepen its relationships with them.
Stearns Lending Chief Executive Officer Brian Hale explained
in the announcement that its correspondent clients — including small financial institutions and builder-owned mortgage companies — will be served well by Flagstar.
Stearns, itself, was acquired by Finance of America Holdings LLC in 2015.
The acquisition, which is subject to customary closing conditions, is expected to close within 30 days.
