Mr. Cooper, the largest mortgage servicer in America, partners with Rocket, the nation’s largest mortgage lender
Rocket Companies, a leading Detroit-based fintech platform encompassing mortgage, real estate, title, and personal finance businesses, recently announced its acquisition of Mr. Cooper Group Inc. in an all-stock transaction valued at $9.4 billion. This agreement will merge Rocket’s mortgage recapture capabilities with Mr. Cooper’s servicing platform, culminating in a combined servicing book of $2.1 trillion and serving nearly 10 million clients, representing a significant segment of 1 in every 6 mortgages across America. By bringing together the leading mortgage recapture abilities, Rocket aims to bolster long-term client relationships, drive higher loan volume, and reduce client acquisition costs.
The strategic acquisition of Mr. Cooper reinforces Rocket’s dedication to revolutionizing the homeownership experience and streamlining the complex homebuying process. Varun Krishna, Rocket CEO, emphasized the importance of servicing as a pivotal aspect of homeownership. By leveraging advanced data and AI infrastructure, Rocket aims to deliver tailor-made solutions that anticipate clients’ needs proactively, fostering enduring relationships with customers. Jay Bray, Chairman and CEO of Mr. Cooper Group, highlighted the transformative journey in enhancing the homeownership experience and building an advanced servicing platform within the mortgage industry. The consolidation of Mr. Cooper and Rocket as a unified entity represents a pivotal step in establishing the strongest mortgage company in the industry, backed by cutting-edge technology and superior customer service.
The amalgamation of Rocket and Mr. Cooper will yield a variety of benefits, including a consolidated servicing portfolio exceeding $2.1 trillion in unpaid principal balance. Rocket’s established mortgage origination and servicing solutions are geared towards sustaining industry-leading retention and recapture rates, attributing to Rocket’s stellar performance over the years. Additionally, Rocket’s acquisition of Mr. Cooper will expand its data set significantly, enabling improved automation, personalization, and operational efficiency through a heightened understanding of customer behavior and preferences.
The combined company anticipates substantial synergies in terms of revenue and cost savings, projected at approximately $500 million annually. Rocket projects enhanced earnings growth across various interest rate environments, leveraging high-margin recapture opportunities on the consolidated servicing portfolio. The transaction is expected to be accretive to Rocket’s adjusted earnings per share post the closure.
The governance and leadership structure of the unified company will be orchestrated by an adept board and leadership team that leverages the expertise of both organizations. Upon finalization of the transaction, Jay Bray will transition into the role of President and CEO of Rocket Mortgage, reporting to Varun Krishna. The board of the combined company will comprise 11 members, with representation from both Rocket and Mr. Cooper boards.
The transaction is anticipated to be concluded in the fourth quarter of 2025, contingent upon approval from Mr. Cooper shareholders and regulatory bodies. J.P. Morgan Securities LLC is serving as the financial advisor, while Paul, Weiss, Rifkind, Wharton & Garrison LLP is the legal counsel to Rocket in this transformative acquisition.