Rocket follows Redfin deal with acquisition of mortgage rival 

Just weeks after planting a flag in the residential real estate space with its acquisition of Redfin, Rocket has announced that it is buying a top competitor in the mortgage space — Mr. Cooper.

The $9.4 billion, all-stock transaction, "brings together the homeownership experience at scale," the company said in a statement, calling out its vision of an AI-powered platform that removes "the friction and complexities plaguing today's homebuying process."

It's a vision that calls to mind Zillow's efforts to create a "super app" that bundles homebuying services into an end-to-end experience. The Mr. Cooper deal increases Rocket's competitive threat to the nation's most popular home-search portal, which has increasingly seen its super app efforts fuel growth in its mortgage business, Zillow CEO Jeremy Wacksman told Real Estate News in February.

Just how big is the Mr. Cooper deal? The Mr. Cooper acquisition gives Rocket "a combined servicing book of $2.1 trillion across nearly 10 million clients, representing one in every six mortgages in America," Rocket's statement said. "Ultimately this drives higher loan volume and long-term client relationships — while providing great recurring revenue and lowering client acquisition costs."

What Rocket's CEO had to say: "Servicing is a critical pillar of homeownership — alongside home search and mortgage origination. With the right data and AI infrastructure we will deliver the right products at the right time. That's how we build lifelong relationships, by proactively unlocking benefits and meeting needs before they arise. We look forward to welcoming Mr. Cooper's nearly 7 million clients."

What industry observers are saying: Rocket's move to acquire Mr. Cooper "represents a seismic shift for the mortgage banking industry, with no company ever operating at this scale," said Kendall Garrison, CEO of Austin-based Amplify Credit Union. "Rocket Mortgage's vast data set will streamline refinancing and new purchases, leaving competitors behind."

Garrison compared the shift to the risks posed by concentrating assets in "too big to fail" banks, adding that the risks are multiplied by reduced oversight from a diminished Consumer Finance Protection Bureau.

Rocket's acquisition of Redfin was seen as a significant move toward a "one-stop shop" for home buyers and sellers. The Mr. Cooper deal adds more fuel to the fire. 

"We expect that a Redfin.com home-shopper will be able to schedule a home-tour, find out what she can afford, then get pre-qualified for a loan, on-demand, in a matter of minutes," Redfin CEO Glenn Kelman said earlier this month. "Together, we can be better than ever at building lifelong relationships with customers who need financial advice before their search ever starts, or who want to explore a home-equity loan years after completing a purchase with Redfin."

Bruce Gehrke, a senior director of lending intelligence for J.D. Power, told Real Estate News that the "super app" concept could change real estate — and more.

"If Zillow and Rocket get some success with this kind of super app concept, it will build within itself," Gehrke said. "We've seen technology turn around a lot of other interactions, services and products, disrupting things that people didn't think was possible."

A representative for Zillow declined to comment.