Rocket Companies has closed its $14.2 billion acquisition of Mr. Cooper Group, adding a formidable loan servicing arm to pair with lending subsidiary Rocket Mortgage.
The all-stock deal, first announced in March, was initially valued at $9.4 billion but has increased by nearly $5 billion due to rising share prices. Mr. Cooper’s servicing functions will be rebranded under the Rocket umbrella, raising the company’s servicing portfolio to nearly 10 million homeowners.
“Homeownership is the bedrock of the American Dream,” Rocket Companies CEO Varun Krishna said in a press release. “By combining mortgage servicing and loan origination, along with home search through Redfin, we are paving the path for Americans to own the dream.”
Jay Bray, Mr. Cooper’s current CEO, will become president and CEO of Rocket Mortgage, as well as a member of the company’s board of directors. He said in a statement that the combined company aims to “create a more personalized experience that makes owning a home more attainable and easier to navigate.”
Geno Paluso, the CEO of loan servicing software company Sagent, congratulated the companies on closing the deal. He wrote in a statement provided to Scotsman Guide that Sagent “has had the privilege of helping power Mr. Cooper as it grew into America’s largest mortgage servicer.”
Investors reacted positively to Wednesday’s announcement, with Rocket Companies stock closing the day up 1.08%. The previous day, shares slumped 3.77% on the news that the Federal Trade Commission has sued Rocket subsidiary Redfin and fellow real estate brokerage Zillow, alleging the companies colluded to suppress rental advertising competition.
Rocket Companies closed its $1.75 billion acquisition of Redfin on July 1 in a transaction that combined one of the largest mortgage lenders in the U.S. with Redfin’s popular digital platform, which offers residential real estate listings and mortgage origination services.