There is no doubt that the past year was horrible for Dan Gilbert and Rocket Mortgage. The company saw profits plummet faster than contestants on a Japanese game show.
Seriously, Rocket Mortgage has seen their profits plummet 90% in the past 6 months. They have also laid off or terminated nearly 30% of it workforce in the past year. In addition, Rocket Mortgage has cut an additional 50 IT and software jobs last week. The company also eliminated 20 marketing positions several weeks ago. Ironic since the backbone to rocket’s 20-year success has been it’s marketing. Especially, internet marketing.
As a result, Rocket was surpassed by United Wholesale Mortgage as the top overall mortgage originator by volume in the nation.
Rocket Companies is expected to announce its year-end earnings in late February.
It appears that Dan Gilbert’s once crown jewel has found itself floundering. Since Gilbert’s untimely stroke in May 2019, the company has been struggling. Rising interest rates and shrinking housing market has only worsened the problem for Rocket Mortgage.
Did Rocket Mortgage CFO Hint Dan Gilbert May Be Selling His Pride And Joy?
Last week, Rocket Mortgage CFO Brian Brown gave an interview to Fitch Ratings Director Shampa Bhattacharya. On the surface, Brown gave an optimistic view of what was happening at Rocket Mortgage. But, was he blowing smoke? Was it all a dog-and-pony show to keep Fitch from dropping Rocket’s bond rating?
After all, Dan Gilbert and Rocket Mortgage have a history of spinning bullshit into cotton with the media.
Yet, National Mortgage Professional reports Brown made about the industry and Rocket Mortgage that are raising eyebrows:
“The final key to getting through a difficult market will be consolidation, Brown said, noting that the industry can’t sustain the current trend of loan originators closing one loan a month on average. “One thing we expect to happen is consolidation,” he said. “ The economics are upside down.”
But Brown added that he doesn’t expect Rocket to be a buyer, even in a buyer’s market. “It would have to be an audience we don’t already have,” he said. “We do a lot of looking but have never bought another mortgage company,” Brown said.”
Brown’s talk of industry consolidation and “not being a buyer” leads to speculation that Gilbert may sell the company. Since his 2019 stroke, Dan Gilbert has backed away from daily operations at Rocket. Instead, he has turned his attention to Detroit area real estate. He has also liquidated other assets like his casinos.
Sources at Rocket Mortgage say executives are already making plans for the day Dan Gilbert makes a decision.