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Rocket Mortgage Buys Mr. Cooper: One Crazy Uncle’s Opinion
Rocket Mortgage is on a spree. When I saw the news, I couldn’t help but think of that Macklemore song, I’m gonna pop some tags… only got 20 (billion) in my pocket…
Let’s unpack the news
Rocket Mortgage is in acquisition mode like they’ve unlocked some kind of unlimited money cheat code. If you missed it, they recently bought Redfin, but this latest move makes even more sense.
What Is Mr. Cooper?
A lot of real estate folks don’t fully grasp who or what Mr. Cooper is. Their website looks like any other mortgage company’s: refinance, cash-out, even a “buy or sell a home” button. But that’s just surface-level. To see the real size of Mr. Cooper you need to go to www.mrcoopergroup.com and this is REALLY who they are. The real story? Mr. Cooper is the largest mortgage servicer in the U.S. (Investor’s Business Daily) (I’ll explain what that is in a minute) They manage 10.9% of the total market…um… that’s massive. In Q4 of 2024 alone, they serviced 6.7 million home loans (Mr. Cooper Q4 2024 Results). Keep that number in mind, it’s important.
What Is mortgage servicing?
The oversimplified version: It’s where you send your mortgage payment. If you’ve ever gotten a letter out of nowhere saying, “Hey, send your payments here now instead,” that means your loan’s servicing rights were sold (at least usually). So, Mr. Cooper handles this for 11% of all U.S. home loans (Mr. Cooper Q4 2024 Results), that’s a big deal.
In summary:
The #2 mortgage lender (The Wall Street Journal) (behind United Wholesale Mortgage) just bought the #1 mortgage servicer, right after acquiring Redfin. Poppin’ tags indeed, Rocket.
Redfin, Now Mr. Cooper: Rocket’s Shopping Spree
Redfin’s recent move grabbed more headlines, but this one is bigger in my opinion. I’ve already shared my thoughts on the Redfin deal, which I didn’t see as a major market shift for residential real estate. This move, however, has far more synergies (cue the business bingo buzzwords) and is really just Rocket doing what they do, only more of it. While the Redfin deal was a step into something new, this follows a proven playbook. Typically, doubling down on what you do best works out better than trying something entirely new. Only time will tell, but this solidifies Rocket Mortgage as the 800-pound gorilla in the consumer-facing mortgage space. (UWM likely holds that title on the industry side, but Rocket is right there with them.)
Culture and tool kit fit
Rocket has long built its business, technology, and culture around winning refinance deals. That’s their DNA. They’ve invested millions into technology to achieve economies of scale (another business buzzword), allowing them to process refis efficiently, some would say better and cheaper than anyone else. Now, they’re adding 6.7 million home loans (Mr. Cooper Q4 2024 Results) to their pipeline.
For context, Rocket currently services 2.6 million mortgages (The Wall Street Journal), this more than doubles their portfolio. And they don’t need to change much, aside from hiring more people to handle the volume. It’s a perfect fit.
What’s surprising is Wall Street’s negative reaction to the deal. Then again, we’re two days away from the looming April 2 “tariff day,” and the market seems to hate everything right now. The key will be watching how the reaction evolves over the next few days, was this just general market sentiment, or does it reflect skepticism about the deal itself? (Investor’s Business Daily)
Buy early, sell a lot
The usual mantra is to buy low, sell high, but this move is really about buy early, sell a lot. I covered the “sell a lot” part above, but it’s also important to note that we haven’t seen a true refi boom in nearly three years, aside from a few isolated pockets. Most expect interest rates to trend down in 2025. If you’re Rocket and you believe a refi wave is coming in 2025, what better time to expand your servicing portfolio to maximize refinance opportunities?
Antitrust concerns?
This is speculation, but this deal could be an early test for the Trump administration’s FTC. The previous administration took a tough stance on mergers and acquisitions (M&A), particularly in tech and competition policy. It’ll be interesting to see how this plays out.
What this means for you
Aside from listening to that old Macklemore jam on repeat (you know you did), what does all this mean for us? Well, that depends on which side of residential real estate you’re on, residential resale (“real estate”) or mortgage.
For real estate agents:
Not much to see here, please move along. Seriously. If you see some chat group blowing up about how this is the end of real estate because of Rocket, don’t panic. Instead, do one thing: reach out to a past client. You can’t control what happens at the macro level, but you can control what you do daily.
I’ve noticed that most agents’ opinions on these kinds of moves are HIGHLY correlated to how many deals they have in contract. If you have six deals in escrow, you’re probably thinking, “Meh… I’m going to get mine. They can’t control what I do.” But if you haven’t closed a deal in four months, this news might feel like the last straw, the thing that sends you into a downward spiral. Don’t spiral.
Rocket’s competitive advantage is tech, culture, and process to scale refinance. Your competitive advantage is the human connection. Lean into that. Reconnect with your people.
For mortgage professionals:
This is a bigger deal for you, but the response should be the same: stay in front of your clients. One of the most aggressive refi shops in the U.S. just gained access to a large percentage of your client base. Reach out to those likely to refinance and make sure they think of you first.
If possible, I’d find out who Mr. Cooper was servicing and focus on those clients most likely to refi in 2025. And I’d make damn sure they remembered who I was.
The big takeaway
At the end of the day, it all comes down to how you want to compete. Some companies compete on price, others on service. Rocket claims to do both better than anyone, but I’m not so sure about that.
Plenty of articles will be written about the “end of refinance as we know it,” but there will always be room for professionals who care deeply about the human being in the transaction. Not to say Rocket doesn’t, but let’s be real, the level of service at the MGM Grand in Las Vegas (the biggest hotel in the U.S. at 6,852 rooms) is different from the service at the Four Seasons (which has 424 rooms).
I’m not saying one is better than the other, I’m saying there is space for you in this industry, no matter how much consolidation or M&A madness happens. Find that space. Provide the highest level of service. Focus on the human being in the transaction. The rest will work itself out.
Keith Robinson is the Co-CEO for NextHome, Inc.
This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.
To contact the editor responsible for this piece: zeb@hwmedia.com.
