Rocket Mortgage Is Struggling To Remain Competitive And Relevant In A Changing Lending Landscape Without Dan Gilbert At The Helm
Rocket Mortgage is struggling for the first time in it’s history. The company is struggling not only to remain competitive but relevant. This is due to two factors. The first is founder and owner Dan Gilbert’s extended absence since having a stroke in May 2019. Secondly, Rocket is having an extremely difficult time competing in the rapidly ever changing mortgage market.
They also face stronger competitors like United Wholesale Mortgage.
Last year, Rocket was on top of the world. Now, the company is shedding it’s workforce and slashing budgets.
The Detroit-based lender has now found itself in a state of confusion with interest rates passing the 7% level. The company doesn’t know what it’s niche is. Is it purchase mortgages? If it is, is that a great idea since pending home sales have plummeted by 31%?
Are they going to originate HELOCs or finance solar panels for homes? Rocket Management seems to have no idea.
Rocket is expected to post another quarterly loss in the third quarter. However, that’s not the worst of it. Rocket has lost it’s title of largest originator in the United States. Crosstown rival United Wholesale Mortgage now holds the title.
Rocket is estimated to have originated roughly $23 billion and $28 billion in the third quarter. UWM is expected to top that figure. Mat Ishbia’s baby generated $30 billion the third quarter.
Additionally, mortgage originations at Rocket declined 36% in the second quarter from the previous quarter.
The lender also attempted to establish relationships with real estate agents. However, Rocket abandoned the project 6 month later.
Rocket Mortgage Is Dealing With A Strained Workforce
Rocket has cut it workforce by half in the past 10 months. However, remaining employees say they face intense pressure to bring in business.
Internal emails and memos to employees say:
“We are not in a world or market where we can withdraw because we get a no today.”
Another email to Rocket’s mortgage bankers stated:
“You are surrounded by success,”
Then, mentioning a refinance banker made over $50,000 in February from 44 loans. Rocket’s competitors and independent brokers pay twice this amount.
Rocket told the Journal it has made changes. The company lifting hourly pay for new bankers and per-loan commissions for seasoned bankers. In addition, the company has also lowered sales goals.
Former Rocket employee, Amanda Womack told the wall Street Journal:
“When it’s good, they encourage you to come in to make even more sales. When it’s bad, they encourage you to come in because you’re not making money for the company.”
Womack started at Rocket in early 2021 but left the lender in July.
[…] 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 […]