Editor’s Note: Glenn Stearns in 1989 founded mortgage company Stearns Lending, which he built to 2,700 employees and more than 100 retail locations. In 2015, he sold a majority stake to Blackstone in one of the largest acquisitions of a private lending company ever made in the U.S.
In 2019, he began Santa Ana-based Kind Lending. Stearns, a Newport Coast resident, was also a star of the “Undercover Billionaire” reality TV show. The following is an excerpt from his recently published book written with Laura Morton, “Integrity; My slow and painful journey to success.”
Growing up, I was labeled “the biggest loser” and “most likely to fail.” The odds were clearly stacked against me.
Everyone knew it too. My parents were alcoholics, as was much of my extended family, many of whom ultimately passed away from drug and alcohol-related deaths. I had dyslexia, failed fourth grade, fathered a child at fourteen, and basically had very little structure or supervision growing up.
So yes, I was a loser, and as far as everyone was concerned, destined for certain failure.
Except for one thing: that didn’t happen.
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My superpower has always been overcoming adversity.
Give me a challenge and I’ll give you solutions. I enjoy figuring things out. It’s like a puzzle. I love being able to see a path from start to finish. It isn’t always clear at first, but I always find a way forward.
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Once I started out as a broker in mortgage lending, it quickly occurred to me that the mortgage pie was much larger than just loan origination. There were credit, appraisal, escrow, title, and many other ancillary services that went into the buying or refinancing of a loan.
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In 2007, the bottom fell out from under us—and from everyone else in lending… by September 2007 my company had lost 85% of its revenue. The banks wanted me to buy back $100 million worth of loans that had gone bad. I was facing a slew of class action lawsuits.
The California State Department of Corporations was asking me to go back through five years of loans and refund prepaid interest on every loan that wasn’t disbursed within twenty-four hours.
When you lose hope, it’s game over… You’ll get through this, I said to myself… The next day, I went to my office and gathered all the employees together… “We aren’t going to die. Not today,” I told them…
Looking back, I think the many personal challenges I faced when I was younger turned out to be advantages because they inspired me to fight my way out of any situation, to persevere and never give up. I had never been afraid of hard work. I was scared at times; there’s no doubt about that. But I wasn’t ever ready to lock the door and walk away.
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One by one, other mortgage lenders were going under… When one of our biggest competitors collapsed, I invited its CEO to visit our office the next day… I told my assistant Keely to find as many desks as she could for the offices lining the hallway and to get monitors and chairs too.
“Let me understand this, Glenn; we just had someone take all these desks and cubicles away, and now you’re asking me to refurnish? By tomorrow?”
Yes, that was exactly what I was asking.
When my competitor arrived, we started the journey down the hall, passing by empty desks, all set up and ready for business. I wanted to hire all his people, which he eventually agreed to… I felt loans would become more conventional again—the trend would return to Federal Housing Administration (FHA) and Veterans Administration (VA) loans.
I eventually worked out agreements with the banks, the lawsuits and the California State Department of Corporations.
Things were looking up, until one day I received a call from the head of the bank in New York that controlled all my credit lines.
“Hey, the party’s ending,” he said.
We were in the middle of the worst financial crisis to hit since 1929. From his perspective, there wasn’t much I could do.
I asked him how he would respond if I sued him for putting a twenty-year-old company out of business.
“That’ll be chump change compared to what we’re dealing with,” he said before hanging up.
The next morning at 8:30 Eastern time, I called him back.
“Hi, you mentioned something in our call yesterday that stuck with me. You said you were pulling out of warehouse lending and getting rid of all your relationships but a handful. I’d like to talk to you about that handful. But I want to look you in the eye to have that conversation.”
“That’s fine, Glenn,” he said. “The only problem is that I’m in New York and you’re in California.”
“Actually, I’m in your lobby. I flew all night. Can I come up and see you?” I asked.
I knew how important being in front of him was that day. You have to make a personal connection, especially when you want something big. My being there in person was a game changer.
He ended up keeping two companies — Stearns Lending and Quicken.
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By March 2009, we had opened dozens of new offices and hired staff for each. For most lenders, the world was still crumbling. Many were having their worst year ever. We, on the other hand, were having our best year since 1989… By 2011, we’d shot to the moon. And we did it by running into the fire—not away from it.
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Many years ago, I asked T. Boone Pickens at his home in Texas: “Sir, you were a billionaire, and you went flat broke. Then you became a billionaire again and lost it all a second time. And now you’re a billionaire again. Why are you doing it all over?”
“Son, I just like being in the game,” he said in his thick southern drawl.
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Blackstone mismanaged Stearns Lending, which filed for bankruptcy on July 9, 2019, the very same day the Discovery Network announced my new television show, “Undercover Billionaire.”
I’ll never forget the phone call I received from the Wall Street Journal asking if I was the new undercover billionaire or the man who had just filed for bankruptcy at Stearns Lending. My heart dropped to the floor when I heard that question…
Before the show, my cancer returned… When the show wrapped, I was exhausted, relieved, and more convinced than ever that the American Dream is not only alive, it’s ours for the taking.
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There’s always a silver lining. Even if you can’t see it in the moment, it’s there. When the company filed for bankruptcy, I was back in the game. I was no longer a shareholder, so my non-compete agreement was over… I now had the opportunity to show those suits in New York how it’s really done. I would call it Kind Lending. I was ready to put kindness back into the mortgage business…
As I’m writing this chapter, our industry is facing the most serious challenges it has ever faced. I have not made it through the fire yet. I don’t know how this is going to end. But whenever I get to the place where I’m contemplating what will look best for me—to fail or to give up—something usually happens that gives me a glimmer of hope and I inevitably say, “You know what? I’m not going to quit. This is going to be the best part of the story. I’m going to make it through this.”
