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Rocket Companies has agreed to buy Mr Cooper for $9.4bn, in a deal that will create a US mortgage giant at an uncertain time for the US real estate market.
The all-stock transaction will put fintech company Rocket in control of a loan book worth $2.1tn across 10mn clients, representing one in every six US mortgages. Rocket is among America’s biggest mortgage lenders, while Mr Cooper is a behemoth in servicing loans.
The deal is the second acquisition by Rocket in the past month following its $1.75bn takeover of real estate listing website Redfin, as the company exploits the slowdown in the US real estate market — prompted in part by persistently high mortgage rates — to build scale.
“Servicing is a critical pillar of home ownership — alongside home search and mortgage origination,” said Varun Krishna, Rocket’s chief executive. “With the right data and AI infrastructure we will deliver the right products at the right time . . . We look forward to welcoming Mr Cooper’s nearly 7 million clients.”
The rate on fixed 30-year mortgages is currently almost 7 per cent, compared with a low during the pandemic of under 3 per cent, according to Freddie Mac data. The Federal Reserve slashed its benchmark rate, which underpins mortgage borrowing costs, last year, but has since paused its cutting cycle as it assesses the effects of Donald Trump’s tariffs.
Rocket and other large non-bank mortgage lenders have been gaining market share as smaller players have struggled through the high-rate environment. Non-bank players have also become a bigger part of the broader mortgage market in the wake of the 2008 financial crisis as traditional lenders have pulled back.
Under the terms of the deal, Mr Cooper investors will receive 11 Rocket shares for each share of Mr Cooper common stock. Rocket shares were down 7 per cent on Monday, while Mr Cooper soared 17 per cent.
The deal is expected to close in the fourth quarter of 2025, dependent upon the approval of Mr Cooper shareholders and the satisfaction of other closing conditions. The combined company will have an 11-member board, nine of whom will be from Rocket’s board and two of whom will be from Mr Cooper’s.
JPMorgan provided financial advice to Rocket, while Citigroup advised Mr Cooper.
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