HousingWireHousingWire
Rocket Mortgage has struck a deal to handle the servicing and recapturing activities for a portion of the mortgage servicing rights (MSRs) of real estate investment trust Annaly Capital Management, the companies announced on Tuesday. Terms of the deal were not disclosed.
Annaly has $75 billion in assets invested across its agency mortgage-backed securities (MBS), residential credit and MSR strategies. It has built an MSR platform with 608,000 loans, representing $192 billion in unpaid principal value (UPB) and $2.8 billion in market value as of June 30.
Meanwhile, Rocket’s servicing portfolio, including subserviced loans, had a UPB of $534.6 billion as of June 30. The nation’s largest mortgage lender serviced 2.6 million loans, generating about $1.4 billion in annual fee income in the second quarter.
Inside Mortgage Finance ranked Rocket as the eighth-largest U.S. mortgage servicer by owned portfolio in Q2 2024. Annaly was No. 14 in the ranking.
Rocket said that its recapture rate, which includes purchase and refinance loans, is at 85%, triple the industry average.
“Rocket is committed to the entire homeownership experience from budgeting and credit building, to home search, financing and servicing,“ Bill Banfield, chief business officer of Rocket Companies, said in a statement. “We truly believe in building relationships with our clients that last a lifetime — whether through new mortgages or servicing loans.”
“We are proud to have constructed one of the most durable and high-quality portfolios of MSR in the market and this partnership will allow us to benefit from Rocket’s industry-leading servicing capabilities and retention rates,” said Steve Campbell, Annaly’s president and chief operating officer.
Rocket is expected to start subservicing some of Annaly’s MSRs as early as December. The portfolio comprises conventional loans with a weighted average FICO score of 757 at origination.
Executives at Detroit-based Rocket have said they will continue to invest in artificial intelligence (AI) to improve operational efficiency and grow their servicing portfolio.
Besides closing subservicing deals, Rocket has been actively acquiring servicing assets at higher coupon rates to create refinance and home equity origination opportunities. In the second quarter, it added $20.8 billion in UPB to its portfolio for a total consideration of $315 million.
“We’re retaining clients for the next transaction at rates three times higher than the industry average, positioning ourselves as their lender for life and generating recurring cash flow without additional acquisition costs,” Varun Krishna, CEO and director of Rocket Companies, told analysts during a second-quarter earnings call. “We’re going to keep growing our servicing portfolio.”
