What’s behind Guaranteed Rate’s acquisition of Stearns?
Today’s HousingWire Daily episode features an interview with HousingWire Managing Editor James Kleimann. In this episode, Editor in Chief Sarah Wheeler and Kleimann talk about his promotion to managing editor, what he has planned for the newsroom in 2021, and Guaranteed Rate’s acquisition of Stearns Lending. Kleimann shares what he’s learned about Stearns’ operations, why the deal makes sense for Guaranteed Rate, what this means for a possible IPO, and how two very different company cultures might gel.
Here is a small preview of today’s interview with Kleimann. The transcript below has been lightly edited for length and clarity:
Wheeler: One thing you’re diving into right now is something that happened this week, which is Guaranteed Rate acquiring Stearns – pretty big names in our space, and two really different business models. Tell me on a top-line level what was interesting about this to you.
Kleimann: There’s a lot that’s really interesting about it. Stearns historically was a massive name in the mortgage space, and it’s had its ups and downs. They’ve evolved and these days feature a different kind of model. They’re still a big player in wholesale, certainly top 10. Their retail operation is going to be folded into Guaranteed Rate. How it is integrated is going to be one of the questions about this acquisition. Wholesale does give Guaranteed Rate a totally new stream of revenue though. It provides them an avenue of business that I don’t think they would have tapped themselves; they’ve never expressed much interest in the broker channel. I think investors will definitely look more positively on a Guaranteed Rate that has more diversified streams of revenue. It’s also interesting that both companies have an affinity for joint ventures. And they do it in different ways. It’s going to be interesting to see how they integrate a system for joint ventures because you can’t form a joint venture with a Cotsco as you could with a real estate brokerage or other lender. They’re totally different universes helmed by people that have different skills. And so even if the goal remains the same – Susie Lou Who needs a mortgage, how you do it is totally different.
HousingWire Daily examines the most compelling articles reported from the HousingWire newsroom. Each afternoon, we provide our listeners with a deeper look into the stories coming across our newsroom that are helping Move Markets Forward. Hosted by the HW team and produced by Alcynna Lloyd and Victoria Wickham.