“We think the stock supplies the most attractive interest rate profile to drive a high-teens return on equity in a steady state scenario,” Hagen said. “It could offer the highest quality source of upside if rates fall further, provided it can validate the recapture numbers. It currently has $300 billion, which could be in the money to refi at a 5.5% mortgage rate.
“Right now, we estimate around 40% would potentially mobilize/refi (over a 12-month period), and that it can recapture half of that, which comps to our current full-year estimate right now of $175 billion with rates at 6.25%.”
Mr. Cooper acquisition
On October 1, Rocket completed its all-stock acquisition of Mr. Cooper Group, Inc., exchanging each Mr. Cooper share for 11 shares of Rocket Companies Class A common stock. The deal increased Rocket’s Class A float to 35%. Mr. Cooper is the largest home loan servicer in the U.S.
With the acquisition, Jay Bray, former Chairman and CEO of Mr. Cooper, joined Rocket Mortgage as President and CEO. Bray brings more than 30 years of industry experience and “played a key role in the growth of the company’s servicing portfolio to become the largest in the industry.”
Broker-facing focus increased
At the Rocket Pro Experience event in Detroit, the company announced new broker partner commitments. It unveiled several new tools, including Rocket Pro Navigate, Rocket Pro Assist, and BrokerNearMe.com, all designed to empower mortgage brokers and enhance client service.