Rocket gains massive market share after closing on Mr. Cooper

Rocket Companies announced today that it has formally closed on its $14.2 billion acquisition of Mr. Cooper, forming a mortgage giant that services nearly 10 million homeowners, the company said. 

Broad market share: In acquiring its leading rival through “the largest independent mortgage deal in history,” the company said it’s now the country’s largest home loan originator and the largest mortgage servicer. The combined company’s scale and volume reaches a broad swath of American homebuyers, representing one in every six mortgages in the country, Rocket noted in a previous statement.

Going forward, the company is retiring the Mr. Cooper branding and folding all operations and services under the Rocket name. 

Rocket Mortgage’s new leader: Longtime Mr. Cooper CEO Jay Bray will now take on the role of president and CEO of Rocket Mortgage. He will report directly to Rocket Companies CEO Varun Krishna and is also joining Rocket’s board of directors, the company said.

Bray led Mr. Cooper for 25 years, “during which Mr. Cooper grew to become the nation’s largest servicer and produced enormous value for our clients, partners, stakeholders and investors,” he said. By combining operations, Bray added, “we will deliver the change the housing industry needs.”

Aiming to deliver the American Dream: Krishna has emphasized that the acquisition is about more than just scale — it’s about improving the homebuying and homeownership process for consumers. 

At a recent NAHREP conference, Krishna spoke of the “adversarial dynamic in the homeownership industry” and its negative consequences for consumers.

Rocket is “all about building community partnerships, acquisitions,” he said. “I think we are greater together than we are apart. It’s a huge market; there’s plenty of share, there’s plenty of opportunity.”

In today’s announcement, Krishna added: “Homeownership is the bedrock of the American Dream. By combining mortgage servicing and loan origination, along with home search through Redfin, we are paving the path for Americans to own the dream.” 

Rocket’s upward trajectory: The Mr. Cooper deal wasn’t Rocket’s only major M&A this year. A few weeks before publicizing that acquisition, the company announced its plan to buy Redfin, formally closing on the deal on July 1. During Rocket’s July 31 quarterly earnings call, Krishna told investors that Redfin had already been funneling customers to Rocket. 

“Redfin gives Rocket a new foothold in purchase and takes our presence in local markets to another level,” Krishna said during the call. “Relationships with 50 million consumers every month reflect a deep connection with demand right at the top of the funnel, and creates new purchase opportunities from both directions: from Redfin to Rocket and Rocket to Redfin.”

Now with home search, lending and brokerage capabilities, Rocket is an even larger force in residential real estate. Rocket’s share price was around $20 on Oct. 1 after the news of its closing on Mr. Cooper, up roughly 85% year-to-date but up just 4.5% from the same period a year ago.