Three executives draw a sharp line between their company and the competition
At Tuesday’s Rocket Pro event in Detroit, the company pulled no punches, taking aim at other competitors in the industry, especially another Detroit-area company, United Wholesale Mortgage.
The company announced an initiative to help brokers wanting to move from UWM to Rocket, creating a team to make the transition as smooth as possible.
Following the announcement on Tuesday, three Rocket executives discussed the current landscape for brokers and for Rocket.
Rocket's leadership team said brokers should choose lenders with both financial transparency and a long track record of partnerships rather than marketing claims.
Brian Brown (pictured top right), president and chief financial officer of Rocket Companies, told the audience that brokers should judge a lender by its actions, not its messaging.
"You should be looking for a lender that's investing in your business," Brown said. "You shouldn't be just trusting sales pitches. You shouldn't just be listening to what people say; you should be watching what they do."
Building the balance sheet
Austin Niemiec (pictured top left), chief revenue officer of Rocket Pro, said one thing that puts Rocket in a stronger position than other companies is the ability to diversify its business.
"If we go all in on one channel, we are not an all-weather company," he said. "You and I would rather be an all-weather company than a company that's all in on one thing, and you're seeing it play out in real time. Our brokers are winning while others are paying the price."
Brown said Rocket's balance sheet shows it’s prepared to weather any headwinds in the overall market.
"We have over $3 billion of cash that we keep in our accounts and on our balance sheet just in case, just so that we can reinvest it during times like these," he said. "We have access to over $12 billion of what we call liquidity, or said differently, just rainy day funds that we could access if and when times get tough."
He said that contrasted with lenders that handle their cash differently once they have it.
"A good thing to do if you want to make your investors happy is to get rid of some of that money through forms of dividends or distributions," he said. "That's another thing some of the competitors in this space have been doing, just constantly taking money out of their business quarter after quarter. We don't agree with that."
That reinvestment, Brown said, includes building a technology department that provides brokers with the support they need.
"We have technology teams that are over 300 or 400 people that just focus on this community," he said. "Most lenders' technology teams in total aren't even 300 or 400 people."
Why track record matters
Jay Bray (pictured top center), CEO of Rocket Mortgage, offered a different lens on the same question, drawn from decisions he made over 26 years running Mr. Cooper before joining Rocket. He said his career has repeatedly come down to choosing the right partner at the right moment.
"I can go back to the financial crisis in '07-'08, and who was there for us because we were known as a strong servicer was Fannie and Freddie," he said. "Without Fannie and Freddie, we'd probably be out of business."
He pointed to a later deal as another example, when Mr. Cooper purchased $250 billion in servicing rights from Bank of America.
"It was the largest transfer at that point in time in the history of the world," Bray said. "That was through cultivating that partnership, building it year after year after year."
Bray said the calculus was the same when it came to his own decision.
"There was really only one choice. It was Rocket," he said. "It's the brand, it's the financial strength, it's the technology investment, it's the product investment. As I have reflected on it, it's almost irresponsible in my mind not to do business with Rocket."
Brown pivoted to what that same logic means for brokers deciding whether to make a change of their own.
"Every single person in this room is an entrepreneur by definition," he said. "I guarantee you know one thing. Speed matters. What you don't want to do is wait until something goes wrong to make a big move."
Part of the growth in technology at Rocket Pro is to make things easier for brokers and not to replace them, Brown said.
"There will not be a technology that's going to replicate what you do best, nor should it," he said. "We should help you do it through taking away some of that busy work and some of the things that get in the way of you having a more successful business."
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