Article Summary
Rocket Cos., a mortgage lending company, reported a loss of $212 million in the first quarter of 2025, following a strongly profitable fourth quarter of $649 million. The company attributed its loss to increased expenses and the challenging market dynamics in April. However, Rocket’s home equity lending business had another record quarter, indicating a long-term growth opportunity. The company also experienced year-over-year growth in both its direct-to-consumer and partner channels.
What This Means for You
- Be aware of Rocket’s quarterly loss, which was due to increased expenses and market volatility.
- Consider the potential benefits of Rocket’s record quarter in home equity lending, which offers a long-term growth opportunity regardless of interest rate fluctuations.
- Note the importance of an integrated home ownership platform, which Rocket is prioritizing as it prepares for its twin acquisitions of Mr. Cooper and Redfin.
- Stay informed about Rocket’s expected revenue for the second quarter, which is expected to be in the range of $1.175 billion to $1.325 billion with a midpoint representing 2% year-over-year growth.
- Understand that Rocket’s servicing business lost money due to a negative adjustment to the fair value of its rights, but the company expects its leverage to decline below the downgrade trigger of 1.0x within one year of transaction closing.
Original Post
Rocket Cos., preparing for its twin acquisitions of Mr. Cooper and Redfin, sunk back into the red for the first quarter, the second time in the past three quarters it has lost money.
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The financials behind Rocket’s quarterly loss
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Momentum shifts at the start of April
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Production up year-over-year in both channels
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Second quarter objectives are achievable
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Servicing loses money on fair value adjustment
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Redfin also loses money in the quarter
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Management points to the positive
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Fitch removes Ratings Watch status
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Redfin also loses money in the quarter
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Key Terms
- Rocket Cos.
- Mortgage lending
- Home equity lending
- Mr. Cooper
- Redfin
- Direct-to-consumer channel
- Partner channel
- Acquisitions
- Servicing business
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