In a deal set to shake up the mortgage industry, Rocket Companies is making a “bombshell” acquisition, buying Mr. Cooper, the largest mortgage servicer in America.
The deal, worth $9.4 billion, will give Rocket a massive $2.1 trillion servicing portfolio, reaching nearly 10 million customers — that’s roughly one in six mortgages in the United States, according to Housing Wire.
The Detroit-based fintech company, which will also be acquiring real estate giant Redfin for $1.75 billion, is making waves as a powerful force in the homeownership space.
Rocket’s combination of servicing, home search and mortgage origination puts it in a prime spot to dominate. CEO Varun Krishna sees this merger as a way to harness data and AI to build lasting relationships with customers by meeting their needs before they even arise.
But what could this mean for the future of the mortgage industry?
Founded in 1985, Rocket Companies covers everything from mortgages to real estate, title services and personal finance through brands like Rocket Mortgage, Rocket Homes, Rocket Close, Rocket Money and Rocket Loans.
With more than 65 million calls a year, 10 petabytes of data and a mission to “help everyone home,” Rocket aims to lead the way in AI-powered homeownership.
Mr. Cooper Group is a provider of mortgage servicing, origination and transaction services for single-family homes across the U.S. Operating under its key brands, Mr. Cooper, Xome and Rushmore Servicing, the company is known for offering a wide range of products, services and cutting-edge technologies that simplify the homeownership journey.
Under the acquisition, Mr. Cooper CEO Jay Bray will step into the role of president and CEO of Rocket Mortgage, reporting directly to Krishna. The deal is expected to boost Rocket’s bottom line, adding $100 million in pre-tax revenue.
Rocket also projects $400 million in pre-tax cost savings through streamlined operations and tech investments.
In a press release, Krishna stated, “Servicing is a critical pillar of homeownership – alongside home search and mortgage origination,” adding, “With the right data and AI infrastructure we will deliver the right products at the right time. That’s how we build lifelong relationships, by proactively unlocking benefits and meeting needs before they arise. We look forward to welcoming Mr. Cooper’s nearly 7 million clients.”
