The Bottom Line: Stearns offers a full menu of purchase and refinancing loans, but not home equity loans or lines of credit.
Pros & Cons
Offers government-backed loans with low down-payment options as well as conventional and jumbo loans.
Has a low-down-payment program available for medical doctors and dentists.
Provides loans directly to consumers and through mortgage brokers and banks.
Does not have an online application or provide information about its rates and fees on the website.
Does not offer home equity loans or HELOCs.
Not available in New York.
Stearns Lending, based in Santa Ana, California, was founded in 1989 by Glenn Stearns when he was 25. More than 25 years later, the company has over 2,000 employees and funded more than $25 billion in mortgage loans in 2015, according to the Scotsman Guide, an industry trade publication.
Here’s what Stearns Lending offers to would-be borrowers.
Stearns Lending mortgage loan products
Like so many nonbank lenders, Stearns Lending has most of the traditional mortgage loan options, except for second mortgages. That means you can’t get a home equity line of credit or home equity loan at Stearns.
Just about everything else is on the menu: government-backed loans such as FHA, USDA and VA, fixed- and adjustable-rate mortgages, rehab loans, jumbo loans and refinancing. Stearns is licensed in 49 states and the District of Columbia. New York is the one state where Stearns’ products are unavailable.
Stearns Lending fees and mortgage rates
Stearns doesn’t post information about fees or mortgage rates online. In fact, clicking on the “Rates and Tools” tab at Stearns.com won’t get you an interest rate, but an explanation:
“We don’t publish our loan products’ interest rates,” the website says. To get an accurate rate quote, you’ll need to call a mortgage loan originator and provide enough information to get a “meaningful” rate quote.
Stearns Lending declined NerdWallet’s request for information regarding fees, rates and services; however, an email seeking information, submitted through customer service via personal email, received a response within 24 hours. When asking about typical fees for a 30-year fixed loan from Stearns, we received this reply:
“Yes, we charge lender fees as all lenders do. Our fee is $1,195, but we can sometimes get a lender credit to lower that amount depending on the rate and situation you opt for. However, the $1,195 is our standard lender fee.”
Of course, all lenders make money on their loans. However, some lenders don’t charge a direct fee (such as an origination or application fee) but build a profit into their interest rate. To best compare lender rates among lenders, always ask for the annual percentage rate with zero discount points. You can always decide to buy discount points later, if you want.
As to minimum credit scores, the customer service agent wrote, “The minimum credit score for any loan is a 620. We can go down to 580 if it is a purchase loan on an FHA or VA loan.”
And as for how paperwork is handled, he replied, “Paperwork is typically exchanged electronically via email and fax, although we can also complete via mail/FedEx if required.”
» MORE: Use our mortgage calculator to find out your monthly mortgage payment.
The Stearns Lending mortgage process
You won’t get much done online at Stearns Lending. You’ll need to call or visit a branch. Stearns has 24 branches in California and at least one office in 19 other states.
While Stearns Lending does offer a consumer direct service through its call center, it’s probably even more likely that you will deal with Stearns as the lender behind the lender. In other words, you will work with a local mortgage broker or small-bank loan officer who will send the loan application to Stearns.
This “lender behind the scenes” service makes Stearns the second-largest wholesale mortgage lender in the U.S., according to the Scotsman Guide. Stearns derives nearly half of its loan volume from wholesale lending — providing mortgage lending services to third parties.
In fact, in May 2016, the American Bankers Association endorsed the services offered by Stearns Lending as an approved mortgage lending solution to its mostly small bank membership. Stearns is the only independent mortgage banking firm endorsed by the ABA.
Today, having sold a majority stake in ownership to Blackstone — the giant, $300+ billion investment bank — Stearns Lending is another portfolio holding along with The Weather Channel, Hilton and Motel 6, among others.
Having been in business for nearly 30 years, Stearns Lending obviously has a workable business strategy that doesn’t rely on its online presence. Doing business by phone or through a local office — and especially through its wholesale network — has been good enough for this lender to not only succeed, but also thrive.
NerdWallet's star ratings for mortgage lenders are awarded based on our evaluation of the products and services that lenders offer to consumers who are actively shopping for the best mortgage. The six key areas we evaluated include the loan types and loan products offered, online capabilities, online mortgage rate information, customer service and the number of complaints filed with the Consumer Financial Protection Bureau as a percentage of loans issued. We also awarded lenders up to one bonus star for a unique program or borrower focus that set them apart from other lenders. To ensure consistency, our ratings are reviewed by multiple people on the NerdWallet Mortgages team.