Firm bid to win clients during market uncertainty is a response to brokers' demands, says SVP
Wholesale lender Rocket Pro TPO’s aggressive new promotion pledging to close loans within two weeks or offer borrowers $2,500 in return will “help accelerate agents to win more bids for their clients”, according to senior vice president of operations, Kevin Randolph (pictured).
Running until the end of April, the Fast 15 Guarantee is a promise that eligible loans will be clear to close no more than 15 business days from the submission of a complete loan file.
However, the Detroit-based company has gone further, stating that if the lender doesn’t fulfill that promise, a credit of $2,500 will be applied to the loan. The promotion, which Randolph billed as “the first of its kind”, applies only to conventional purchases on single family homes.
Randolph said that while previous promotions were price-related and focused more on offering better rates, the Fast 15 Guarantee is aimed at addressing clients’ frustrations at a critical time during a home purchase.
Read more: Rocket’s new launch - "This is not our first rodeo"
Speaking to Mortgage Professional America (MPA), he said: “We know in purchase speed-to-close is incredibly important. It reduces frustration for clients and for partners who really just want to get that house quickly and in a stress-free (way).”
Given that the industrywide average of ‘clear to close’ is 43 days, Rocket’s commitment to slash that timeframe by almost a third will be seen as a bold move by competitors.
Randolph, however, dismissed suggestions that this would place added pressure on brokers. “This is actually what the brokers want because they want to get these loans closed as quickly as possible, so we’re putting the pressure on us in Rocket Pro TPO, too,” he said.
“Brokers want to wow their real estate agents and have the confidence that they can get a loan closed quickly when they’re talking to their client. A lot of things can go south if a loan extends and takes 40, 50 or 60 days, so getting a purchase loan to closing quickly is incredibly powerful and beneficial to our partners.”
The latest promotion is Rocket Pro TPO’s second big announcement aimed at improving how brokers’ loans are processed. In late January, the company launched the Crews program, giving each broker partner direct access to a small, dedicated team of mortgage experts.
Randolph said Crews had been well received by the broker community. He said: “It’s had a lot of initial momentum and our partners are loving it. That’s one of the great things when you’re working with partners - it’s not transactional. When you’re creating these crews, you build relationships with the team members that are the underwriters, the closers and the title coordinators.”
The company’s aggressive campaigns and promotions - it also recently launched Purchase Power Play, offering 30 basis points off its pricing - are ostensibly aimed at giving its broker partners an edge over the competition, but it’s also happening at a time of extreme uncertainty in the mortgage industry, with companies shedding jobs amid excess capacity concerns.
And as inflation and rates continue to rise – inflation is at its highest in 40 years and now stands at 7.9%, with mortgage rates now edging closer to 5% - some lenders increasingly worried about borrowers’ levels of debt are reportedly changing loan terms and prices at the last moment.
Randolph was asked whether Rocket’s latest announcement was a reflection of the market’s volatility.
He said: “It is another way that we’re supporting our partners, for sure, now purchase season is kicking off. There’s low inventory, and we are in a rising rate market, so there’s going to be less refinance business out there.
“There is that changing mortgage landscape in comparison to 2020 and 2021, where we had historically low rates and there was a lot of refinance opportunity. But there’s still a lot of purchase business out there. If you look at the forecasts for how many purchase loans are going to close in 2022, it’s actually higher than it was in previous years.
“The rising rates are a factor, too, but we’re still seeing home prices increase and we’re still seeing a lot of buyers out there that are looking for homes. So there is still plenty of opportunity in the purchase landscape.”
