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Brian Hale

Brian Hale

Santa Ana-based Stearns Lending LLC is selling its Delegated Correspondent Lending business to Flagstar Bancorp Inc. of Troy, Mich., for an undisclosed price.

Stearns’ unit is a business-to-business, wholesale mortgage lending operation that purchases loans from 250 lenders such as credit unions, community banks and builder-owned mortgage companies. The lenders, which annually generate a combined $7 billion in agency and governmental residential mortgage loans, will sell many of their loans to Flagstar instead of Stearns.

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The decision to exit the business is consistent with the company’s evolution, Chief Executive Brian Hale said in a statement. Stearns employees and subcontractors associated with the business will transition to Flagstar.

Stearns’ financial advisor and legal counsel, respectively, were Wells Fargo Securities and Sheppard, Mullin, Richter & Hampton LLP. BuckleySandler LLP was legal counsel to Flagstar.