- The deal will significantly expand Rocket’s mortgage servicing business, giving them control of one in six US mortgages.
- The acquisition is expected to save the combined companies $400 million annually and generate $100 million in new revenue.
- This announcement comes weeks after Rocket Companies announced plans to acquire real estate platform Redfin.
It’s spring company-buying season for Dan Gilbert’s Rocket Companies, which is now buying a Texas mortgage servicing firm, just weeks after unveiling its deal to acquire Redfin.
Rocket announced Monday that it plans to buy the Mr. Cooper Group, a suburban Dallas-based firm that is the largest servicer of residential mortgages in the country, in an all-stock deal with a $9.4 billion equity value.
The deal, expected to close in the fourth quarter, would significantly expand Rocket’s existing mortgage servicing business and give Rocket a “servicing book” representing one of every six mortgages in the U.S., according to a news release.
Mortgage servicers collect payments that borrowers make on mortgages and remit those payments to the investors and owners of the mortgage. Servicers traditionally then get paid a small percentage of the monthly payments.
The acquisition is expected to result in $400 million in fewer annual expenses for the combined companies, including cuts at Mr. Cooper’s servicing business as well as at Rocket’s mortgage origination business, according to a company presentation.
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Also, $100 million in new revenue is expected from things such as selling Rocket’s services to Mr. Cooper’s customers.
Mr. Cooper recently reported having 7,900 employees across the U.S. and India, and for all of 2024, did $669 million in net income on $2.2 billion in revenue.
More: What the pending Rocket-Redfin deal means for the mortgage industry and consumers
Some of those Mr. Cooper employees are former metro Detroit employees of Flagstar Bank, which last year sold its mortgage servicing business to Mr. Cooper.
Mr. Cooper also has its own mortgage origination business, although one significantly smaller than Rocket Mortgage.
The deal comes only weeks after Rocket announced on March 10 that it plans to buy Redfin, the popular real estate listings platform and residential brokerage, becoming an even bigger one-stop shop for home buying.
“Servicing is a critical pillar of homeownership — alongside home search and mortgageorigination,” Rocket CEO Varun Krishna said in a news release.
“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,” the release said.
Once the deal closes, Mr. Cooper Group Chairman and CEO Jay Bray is expected to become president and CEO of Rocket Mortgage. Gilbert will remain chairman of Detroit-based Rocket Companies.
Contact JC Reindl: 313-378-5460 or [email protected]. Follow him on X @jcreindl
