“Home search, brokerage, financing, title, closing and servicing should be seamless, but today they’re not,” Mr. Krishna said on a call with analysts. “If we truly want to fix that, we have to own the client experience from beginning to its true end.”
The timing is no accident. After a historic boom in home sales and refinancing during the pandemic, the US housing market has cooled dramatically. Mortgage rates, which averaged around 3% in 2021, have since more than doubled. Home lending volume is down more than 60% from its peak, according to the Mortgage Bankers Association (MBA).
With refinancing activity sharply reduced, lenders are turning to consolidation, scale, and technology to stay competitive. In acquiring Mr. Cooper, Rocket is not just absorbing a rival—it is absorbing its 6.7 million servicing relationships, and a trove of data that could help it better “recapture” borrowers when they’re ready to refinance.
Recapture rates—essentially the percentage of existing customers who return to the same lender when refinancing—are a key metric in servicing. Rocket has historically boasted an 83% recapture rate, compared to Mr. Cooper’s 50%. By applying its tech-driven approach to Mr. Cooper’s base, Rocket estimates it could generate $65 million to $150 million in incremental revenue, depending on future mortgage rates.
But perhaps the most forward-looking piece of the strategy lies in Redfin. The brokerage’s platform reaches tens of millions of prospective buyers at the very start of their home search—a pipeline Rocket has never fully controlled. Now, it wants to.