Detroit-based Rocket Companies has finalized its second big acquisition of the year, this time with a mortgage servicing company in Texas.
Rocket announced Wednesday, Oct. 1, that it has completed its all-stock acquisition deal for the Mr. Cooper Group, a suburban Dallas-based firm that is the largest servicer of residential mortgages in the country and which will now rebrand under the Rocket umbrella.
The announcement put the value of the deal at $14.2 billion, which is significantly more than the $9.4 billion value of the deal when it was announced in late March, as the share prices of both companies have gone up since then.
Rocket Companies is the publicly traded corporate parent of Rocket Mortgage and other Dan Gilbert companies.
In July, Rocket completed its all-stock acquisition deal for Seattle-based Redfin, the popular real estate platform and residential brokerage.
The back-to-back acquisitions are expected to help Rocket become an even bigger one-stop shop for homebuying on a national level.
Mortgage servicers such as Mr. Cooper collect payments that borrowers make on mortgages and remit those payments to the investors and owners of the mortgage. Servicers traditionally then get paid a small percentage of the monthly payments.
Rocket also has its own mortgage servicing business and Mr. Cooper makes home loans itself as well.
According to a Rocket presentation earlier this year, the acquisition deal is expected to bring $400 million in annual cost savings for the combined companies, including through cuts at Mr. Cooper’s servicing business and at Rocket’s mortgage origination business.
“Homeownership is the bedrock of the American Dream,” Rocket Companies CEO Varun Krishna said in a statement. “By combining mortgage servicing and loan origination, along with home search through Redfin, we are paving the path for Americans to own the dream.
Mr. Cooper most recently reported having 7,900 employees across the United States and India, and for all of 2024, did $669 million in net income on $2.2 billion in revenue. Rocket Companies’ reported headcount was 14,200 at the end of last year, and since then it has cut roughly 200 to 300 employees because of the Redfin acquisition.
Mr. Cooper’s CEO Jay Bray will now join Rocket and be the new president and CEO of Rocket Mortgage. Krishna had been filling both CEO roles for Rocket Mortgage and for its corporate parent Rocket Companies. Bray will also join Rocket’s board of directors.
Mr. Cooper was previously known as Nationstar Mortgage before a 2017 rebranding. Now, as part of the Rocket acquisition, Mr. Cooper and all of its mortgage servicing is rebranding again under the Rocket umbrella.
Mr. Cooper’s website on Oct. 1 identified the company as “Mr. Cooper ‒ powered by Rocket Mortgage.”
“This transaction brings to a close a multiyear journey during which Mr. Cooper grew to become the nation’s largest servicer and produced enormous value for our clients, partners, stakeholders and investors,” Bray said in the news release.
On Tuesday, Sept. 30, the Federal Trade Commission filed an antitrust lawsuit against Redfin and Zillow over a deal that the two companies entered in February — months before Rocket acquired Redfin.
According to the FTC, the deal paid Redfin $100 million in exchange for stopping its competition with Zillow in the internet advertising market for apartment buildings for nine years and also agreeing to serve “merely as an exclusive syndicator of Zillow listings” on the Redfin website.
In annoucing the lawsuit, the FTC said that “paying off a competitor to stop competing against you” is a violation of federal antitrust laws.
A Zillow spokesperson said in a statement that they are confident in the Redfin arrangement, which benefits renters and property managers.
Redfin issued a statement saying it strongly disagrees with the allegations and is confident it will prevail in court.
“Our partnership with Zillow has given Redfin.com visitors access to more rental listings and our advertising customers access to more renters,” the statement said. “By the end of 2024, it was clear that the existing number of Redfin advertising customers couldn’t justify the cost of maintaining our rentals sales force. Partnering with Zillow cut those costs and enabled us to invest more in rental-search innovations on Redfin.com, directly benefiting apartment seekers.”
This story was updated to include new information.
Contact JC Reindl: 313-378-5460 or jcreindl@freepress.com. Follow him on X @jcreindl
This article originally appeared on Detroit Free Press: Detroit-based Rocket finalizes 2nd big acquisition of 2025 with Mr. Cooper deal
Reporting by JC Reindl, Detroit Free Press / Detroit Free Press
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