The special sauce (and stats) in Rocket’s $9.4b Mr. Cooper mortgage mega deal
Rocket buying Mr. Cooper is largely about going mainstream for mortgage servicing like Rocket’s already done in mortgage originations.
Mr. Cooper is America’s largest servicer with $1.56 trillion in servicing, and Rocket is eighth-ranked with $593 billion as of 4Q24 per Inside Mortgage Finance (IMF).
This means the combined mortgage servicing market share of Rocket and Mr. Cooper will be 14.7%.
And at $2.1 trillion in servicing, a combined Rocket and Mr. Cooper will be more than two times larger than second-ranked Chase with $978 billion in servicing, per IMF 4Q24.
As for mortgage originations, Rocket funded $95.9 billion in 2024 and Mr. Cooper funded $22.8 billion. Redfin, which Rocket also bought this year, funded $4.6 billion in mortgages last year.
This means the combined originations market share of Rocket and Mr. Cooper will be 7.2% (and Redfin originations increase market share to about 7.5%).
And at $123.3 billion in originations, a combined Rocket, Mr. Cooper, and Redfin will be the second-ranked originator behind United Wholesale with $138.4 billion in originations, per IMF 4Q24.
Mr. Cooper wasn’t a household name until today’s deal, but they’re one of the most formidable shops in mortgage because of their top-ranked position in servicing.
As for the endgame, originations is how lenders begin customer relationships (when they buy or refinance a home), but servicing is where those lifetime relationships are managed and grown.
The special sauce here is that Rocket has a customer retention rate of 83% for its 2.8 million servicing customers. This is 3 times the industry average, and now Rocket will add Mr. Cooper’s 6.7 million customers to this industry-best customer retention playbook.
Mr. Cooper CEO Jay Bray will now lead Rocket Mortgage, and report to Rocket Companies CEO Varun Krishna.
I’ll post more analysis soon, including how this deal plays out in Washington, and what it means for consumers, other lenders/servicers, investors, and fintech companies.
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Reference:
– Rocket announcement on buying largest U.S. mortgage servicer, Mr. Cooper
– Mortgage servicing giant Mr. Cooper hires fintech Sagent to power portfolio
– 2 Things Wall Street Misses About Rocket Mortgage Fintech Long Game