HousingWireHousingWire
Over a month after Rocket Companies announced its $1.75 billion deal to acquire digital real estate brokerage firm Redfin, industry observers are still trying to understand the future of one key asset: Bay Equity Home Loans.
While the companies remain quiet on their plans, some Bay Equity employees aren’t waiting for answers—they’re already looking for new jobs. A growing number of “Open to Work” banners have appeared on LinkedIn, especially among processors and underwriters.
“Bay has encouraged us to start looking [for a job] as Rocket is really only offering loan officer positions at this time,” an employee told HousingWire under the condition of anonymity for fear of affecting job prospects.
“I know we’ve already had people leave without waiting for the potential severance package. To be honest, I would rather have a great job than a few months’ severance. I’m currently looking, and if something comes up that works for me, I’m going to take it and leave before the end comes,” the same source said.
In a statement to HousingWire, a Rocket spokesperson said the company is “excited for the highly skilled loan officers at Bay Equity Home Loans” who will join the firm after the acquisition closes. “They will be a great fit.”
There was no mention of other non-sales employees, and when asked, the spokesperson said the firm is working on the details of the integration plan and will share updates as it makes progress.
The Rocket–Redfin deal is expected to close in Q2 or Q3. Redfin CEO Glenn Kelman will continue to lead the brokerage, reporting directly to Rocket CEO Varun Krishna.
Redfin brings significant scale to Rocket’s ecosystem: 50 million monthly visitors on its home search platform, 1 million active purchase and rental listings and more than 2,200 real estate agents. The acquisition is expected to generate $200 million in run-rate synergies by 2027 through streamlining operations and expanding cross-sell opportunities in mortgage, title, and real estate services.
The deal also gives Rocket – which has historically focused on call center and broker-driven origination – a new retail arm through Bay Equity. As of April 22, the platform had 272 sponsored loan officers across 90 branches, according to the Nationwide Multistate Licensing System (NMLS).
Industry observers say that while Bay Equity could cannibalize Rocket’s existing operations, it adds roughly $4.5 billion in annual originations and could benefit from Rocket’s technology and scale to improve its financial performance.
A troubled journey
Seattle-based Redfin acquired Bay Equity Home Loans in January 2022 for $135 million to quickly expand its mortgage offerings without heavily investing in lending software. Redfin agents could instantly refer clients to Bay Equity loan officers in a one-stop-shop for brokerage and lending.
Founded in 2007 and based in Corte Madera, California, Bay Equity originated $8.5 billion in loans in 2021—nearly 10 times Redfin’s in-house mortgage volume. But originations dropped to $4.3 billion in 2022, $4.2 billion in 2023, and saw only modest recovery in 2024, rising to $4.5 billion, according to filings with the Securities and Exchange Commission (SEC).
“Bay Equity is small compared to the $100 billion-ish that Rocket is doing,” said Bose George, managing director at Keefe, Bruyette & Woods (KBW). “Rocket hasn’t said anything to suggest they want to do more in the distributed retail arena; I assume Bay Equity will be rolled into Rocket Mortgage and continue doing what it’s doing.”
Eric Hagen, a mortgage and specialty finance analyst at BTIG, added that Rocket likely wants to retain as many loan officers as possible to support recapture efforts when rates drop.
“It would be inconsistent to complete the Mr. Cooper transaction and then lay off a bunch of LOs,” Hagen said. “That would be counterintuitive and not in line with expectations for them to give up some of that recapture capability.”
Bay Equity has trimmed its net losses since Redfin took over—from $30.3 million in 2022 to $16.4 million in 2023, and $9.8 million in 2024. Gross margins rose by 550 basis points last year, driven by cuts to staffing, bonuses, occupancy, and production costs.
According to Hagen, Bay Equity’s financial performance is one reason some investors believe Rocket might have overpaid for Redfin—especially considering Redfin’s net loss of $164.8 million in 2024 (up from $130 million in 2023).
“But it’s hard to say [that they overpaid], because all of these businesses rely so much on scale, which is a major driver of stock valuation. When it gets barnacled onto a big platform like Rocket, the profitability has more of an opportunity to improve.”
Will Rocket embrace distributed retail?
This isn’t the first time Rocket has dabbled with local LOs. In 2023, the company ramped up efforts to hire remote LOs to boost purchase activity, as HousingWire reported. The move was later confirmed by a company executive.
This time, industry analysts and rival executives doubt Rocket is planning a major investment in distributed retail —even with the addition of Bay Equity. Rocket was the top retail lender in the U.S. in 2024, with a $59.2 billion production. It was also the sixth-largest in third-party origination (TPO), with $36.6 billion, according to Inside Mortgage Finance data.
Joe Panebianco, CEO of AnnieMac, said that with a “good portion” of Rocket’s business coming from the TPO channel, there’s a “cannibalization when they go down” the distributed retail channel path.
“You can’t keep a client from shopping,” Panebianco said. “”Assuming that retail LOs and brokers bump into each other—how is Rocket going to solve that? Is it first come, first serve? Is it a fight between them?”
KBW’s George views the Redfin deal as a long-term play, offering Rocket access to a massive market—50 million monthly visitors. He added that the transaction helps Rocket in the purchase loan segment, while the Mr. Cooper acquisition bolsters its refinance capabilities.
Still, scaling distributed retail takes commitment. “You need to hire a lot of loan officers and be committed to that channel,” George said. “At the moment, we’re assuming that’s not what Rocket is planning to do. But clearly, they’ve got the resources; if they decide to compete in any channel, they’re going to be very effective.”
Hagen agrees: “Leveraging the app to fund mortgage loans is going to be the bread and butter, while having the broker channel as complimentary rather than the main focus.”
For now, Rocket believes it has the right balance in its sales force.
“Rocket’s mortgage bankers and our extensive network of mortgage broker partners are the perfect combination to meet our clients’ needs with the right products and level of assistance.
This acquisition will create more opportunities for everyone in our ecosystem – whether a mortgage banker with Rocket, a skilled LO joining Rocket from Bay Equity or one of our valued broker partners,” the spokesperson said.
