Rocket employees heading back to the office

May 23, 2021

Dear Friends, Colleagues and Customers:

  • The best news I read all week is that Rocket Companies Inc.'s employees in Detroit will begin returning to work downtown starting June 7. Rocket employees 19,000 people in Detroit and they are being very smart about bringing employees back to office. Employees who said they would work more effectively in the office will return first. Most will be working two to three days in-person each week, the company said. The company's remaining roughly 5,000 employees in Cleveland; Charlotte, North Carolina; and Phoenix will start to be recalled on June 21.

  • It is not just Rocket. Cross-town rival United Wholesale Mortgage also announced that it will have its employees also work from office agin from June. So do many other companies across the country.

  • This is really music to my ears. I miss working from office, bumping into people in the corridors and in elevators, catching the early morning flight and meeting clients at their work and even wearing a jacket :). What about you?

  • Talking about Rocket, the company announced that they will officially retire Quicken brand on July 31. There is an interesting story to how Rocket acquired Quicken brand to start with. Dan Gilbert founded Rocket in 1985 when he was just 22. He took the company public in 1998 when it was named Rock Financial and sold it a year later to financial software giant Intuit for $370 million, who merged it with their Quicken Mortgage division and renamed it Quicken Loans. Now comes the best part of the story - In 2002, Gilbert bought Quicken Loans back from Intuit for just $64 million and retained to rights to Quicken Loans brand. In August 2020, Rocket Companies, the parent of Quicken Loans went public at a market cap of $36 Bn.

  • If you are feeling sorry for Intuit, don't be. Intuit itself has a market cap of $118Bn as of today, up from about $10Bn in 2002 when they sold Quicken Loans to Dan. So focusing on tech and selling the operationally-intensive mortgage business, did help Intuit. When Intuit sold Quicken Loans to Dan, they also retained 12.5% of the new company. I don't know how long they kept the stock, but if they had kept it till Rocket's 2020 IPO, it would have been worth $4.5 Bn.

  • Rocket Loans ads are commonplace on TV these days. But do you remember the 2016 Super Bowl ad when they introduced the Rocket Mortgage brand? It was a little wonky but still cute. Check it out here.

  • Many lenders had record production volumes in 2020. But 2021 is going to be different and there is one overarching reason for that - lack of inventory. Housing inventory is down 40% compared to last year. Low inventory has driven up prices. Housing affordability is at its lowest point since 2019 as a result of low inventory and high prices. The share of median income needed to make payments on an average-priced home with a 20% down payment is now 20%. Question for all lenders - how will you meet your targets for 2021 considering the current inventory situation? Where will you spend your marketing and sales dollars?

  • VA loans consistently have better margins compared to conventional loans. But VA loans always go to the bottom of the stack, particularly in the current supply-constrained market. Check this interesting article to know why.

  • We added a couple more fantastic interviews to our podcast series. When we spoke to James Nader, CEO at McLean Mortgage, he said something very profound - "Treat every loan file as a person's financial autobiography".

  • In another episode, David Lykken who has been an owner-operator of three mortgage banking companies, a software company and several leading consulting firms and is currently the CEO of Transformational Mortgage Solutions, spoke about - How to build a winning culture at your company. In 2021, it is probably your culture that is going to keep you ahead in the game. So don't miss this episode.

Have a great week ahead.

Cheers!

Rocket employs about 19,000 workers in Detroit, who will combine in-person and remote time when they begin coming back to the office.

Rocket Companies will retire the Quicken Loans name on July 31, opting to use the Rocket branding it first introduced at Super Bowl 50 in early 2016.

Opportunities of all kinds open up, in this Super Bowl ad for Quicken Loans. Don’t miss a WSJ video, subscribe here: http://bit.ly/14Q81XyMore from the Wall ...

A 46% drop in new listings has led to a pricing surge of 21% in 2021. Don't expect inventory to increase much anytime soon, either.

“The reason we would do a VA mortgage loan is because it’s better; it’s a benefit they’ve earned,” said one LO.

‎McLean Mortgage is a rapidly growing home mortgage lender based out of East Coast and a winner of the 2021 Top Workplaces USA. In this episode James Nader, CEO at McLean Mortgage Corporation talks about - why humanizing the lending process has been core to their customer excellence strategy.

‎In this special edition we are in a candid conversation with David Lykken. David is a 43 year industry veteran, has been an owner-operator of three mortgage banking companies, a software company and several leading consulting firms.

He is currently the founder & CEO of Transformational Mortgage So…