Could Rocket’s recent acquisitions cause problems for independent brokers?
On the heels of its recent acquisition of Redfin, Rocket’s Monday announcement that the company will acquire Mr. Cooper puts it in a position to compe
te for all the business associated with homeownership, according to an industry expert.
While the news bodes well for Rocket, it makes things much more difficult for smaller, independent mortgage brokers, according to Bruce Gehrke (pictured right), senior director of lending intelligence with JD Power.
Rocket announced Monday an all-stock purchase of Mr. Cooper, the nation’s largest mortgage servicer, valued at $9.4 billion in equity. It increases Rocket’s market share to nearly 10 million clients, or one in every six mortgages in the United States.
Gehrke believes this acquisition, combined with the recent Redfin purchase, puts the company in a commanding position in the mortgage market.
“These strategic moves will strengthen Rocket Mortgage's ability to simplify the complexities of today's housing market in one end-to-end enhanced customer experience,” Gehrke said. “Rocket has long been successful at marketing and generating leads. This gives them an additional advantage to leverage.”
Gehrke said the acquisition provides another avenue for building a relationship with mortgage customers.
“Acquiring Mr. Cooper provides access to a combined total of 9.5 million existing customers, enabling Rocket to build relationships with current homeowners and another opportunity to move higher up the home buying funnel,” Gehrke said.
According to the Associated Press, Rocket shareholders will own approximately 75% of the combined company, while Mr. Cooper stockholders will own about 25%.
Rocket CEO Varun Krishna said that the acquisition will open up new opportunities for its mortgage broker partners, an important community they aim to support with this move.
"The enhanced Rocket platform will give brokers more choice than ever before, along with access to competitive products, advanced technology, and the tools to grow their business," Krishna said. "Looking ahead, we envision mortgage brokers having access to servicing capabilities for their own clients—and a future where their name appears on the mortgage statement, keeping the client relationship where it belongs: with the broker."
A continued constriction of the mortgage market may worry brokers
Rocket’s announcement of its acquisition of Mr. Cooper came before the ink was dry on its agreement to purchase Redfin in an all-stock deal for $1.75 billion earlier in March.
That move was hailed as an effort to create a “super app” for housing, similar to what had previously been attempted by Redfin and Zillow.
While a continued consolidation of the mortgage market might worry some mortgage brokers, Gehrke said it might not be a problem, yet.
“I’d say ‘worry’ is a bit of a strong word for this,” Gehrke said. “(Rocket) does well at scale. Talking to some loan originators, a lot of the better-qualified buyers can go, not just to Rocket, but to Bank of America and Chase, where they may have broader financial relationships.”
Rocket Companies has inked a blockbuster deal to purchase Mr. Cooper, the largest mortgage servicer in the US, in a move the company said would combine a servicing book of more than $2 trillion.https://t.co/ecIqmso3J8
— Mortgage Professional America Magazine (@MPAMagazineUS) March 31, 2025
Gehrke believes that smaller brokers may need to rely on companies like United Wholesale Mortgage (UWM) to provide products, services, and technology in order to keep up with companies like Rocket.
“UWM is tremendously competitive (with Rocket),” Gehrke said. “Their success extends to that local brokerage. What we may see from a competitive standpoint is a difficulty of other lenders who are in the wholesale business. Because it is going to be an advantage to being that large (like UWM and Rocket) and having the ability at scale.”
Another blow to independent mortgage bankers
Gehrke is unsure how well Rocket will be able to service all of its nearly 10 million customers.
“Whether they can successfully navigate all the steps needed to sufficiently convert those leads at a high enough rate to matter remains to be seen,” Gehrke said.
With the mortgage giant controlling one out of six mortgages, Gehrke believes it will become increasingly difficult for competitors, especially small mortgage brokers.
For Gehrke, the advantage for local mortgage brokers lies in the personal service and relationships built during the mortgage process.
“Those folks really need to understand and double down on how they’re getting their business,” Gehrke said. “Why customers work with them is important, but how they get their business is going to be something they’re going to have to think about more than in the past.”
Gehrke noted that the moves Rocket is making are aimed at providing the same level of personal service as local mortgage brokers. That is why it will be up to those brokers to continue fostering those relationships and keeping them strong, to push back against Rocket and other large corporations.
“In the future, where is that customer going to come from?” Gehrke said. “Can you rely on your relationships with local real estate agents and brokerages. That’s what’s going to be under siege.”
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