I’ve been saying for a year or two, maybe longer, that recapture was the next big thing in mortgage.
Instead of going out and spending a lot of time and money to acquire new customers, why not just tap into the ones you already have?
This is especially true when it’s no longer easy to originate a home loans, thanks to much higher mortgage rates.
Mortgage companies realized this, and began servicing their own loans so they could turn existing customers into repeat customers.
And that’s clearly what Rocket is doing by acquiring the nation’s largest loan servicer, Mr. Cooper.
Rocket Wants to Tap Into Mr. Cooper’s Giant Stable of Existing Homeowners
In a nutshell, Rocket is acquiring Mr. Cooper to take advantage of millions of recapture opportunities.
To give you an idea of how important recapture is to Rocket, the word is used seven times in their press release.
For the uninitiated, recapture means to originate another loan for an existing customer you served in the past.
An example would be someone who used Mr. Cooper to get a home purchase loan, who later uses Mr. Cooper to conduct a rate and term refinance to obtain a lower mortgage rate.
With this tie-up, Rocket would be the one benefitting from any subsequent loans offered to Mr. Cooper customers.
And there are a lot of them, given the fact that Mr. Cooper is the largest loan servicer in the country.
At last glance, Mr. Cooper had roughly 6.7 million loan servicing customers, who are all homeowners that can be pitched another product.
Perhaps it’s a rate and term refinance if/when mortgage rates drop, or a second mortgage such as a home equity loan if rates don’t come down.
Maybe it’s a subsequent home purchase loan after they sell and move up to a different property.
There are lots of scenarios for the taking and instead of going out and looking for high-intent homeowners (or home buyers), Rocket can simply scan its own database.
And thanks to new technology, it’s easy to determine who might want/need to get another loan.
Rocket Wants to Be Your Mortgage Lender for Life
What makes this merger such a valuable proposition for Rocket is the fact that they’re already a leader in the recapture game.
Simply put, they know how to sell. Especially if they already have someone in their funnel.
That explains their other major purchase of Redfin and its 50 million monthly visitors.
While they’ve failed to capture a large share of the home purchase lending market (that honor goes to United Wholesale Mortgage), they’re the leading mortgage refinance lender in the country.
By a wide margin as well. They mustered about double the refinance volume of UWM in 2023 (latest year available), nearly $29 billion vs. $14.5 billion, per HMDA data.
And they managed that in a year when mortgage rates hovered in the 6% to 7.5% range.
So it’s clear they are very good at selling to existing homeowners who are looking for interest rate relief or a cash-out refinance.
With mortgage rates elevated the past few years, there are now millions upon millions of homeowners with loans that start with a 6 or a 7.
If and when interest rates ease, you better believe Rocket will be the first one to offer them a new loan.
They’ve already made a case for it, spelling out the billions in loans from Mr. Cooper that are in-the-money for a refinance.
Some $41 billion are refinanceable if the 30-year fixed is 6.5%, and $100 billion if that rate comes down to 6%. If they can deliver a higher recapture rate, the upside is even bigger.
For the record, that’s simply offering Mr. Cooper clients a 50-basis point (0.50%) or better benefit versus their current mortgage rate.
And the icing on the cake is there’s a $0 client acquisition cost (CAC) via recapture.
Rocket Already Leads the Industry in Recapture, And This Will Only Make Them Better at Selling
We know Rocket is good at selling and we know they’re excellent at recapturing existing clients.
The only other piece is the manpower and the funding. And they’ve got that too.
Rocket has some 3,000 mortgage loan officers ready to take loan applications and begin transitioning Mr. Cooper customers into Rocket Mortgage customers.
And it’s powered by AI, including 1.2 million monthly call-log transcripts to analyze what works and what doesn’t.
Not to mention 30 petabytes of data and gaining “understanding of nearly 7 million additional clients and 150 million annual customer interactions.”
In other words, Rocket is going to get even better at selling and perhaps drive the company’s 83% recapture rate, which is already triple the industry average, even higher.
This could make it next-to-impossible for outside lenders to compete, assuming they even get the chance.
With the technology in place, Rocket will likely be first to the customer in most scenarios, so the only hope for outside companies will be if the customer takes the time to shop around.
This is something I always recommend, especially with recapture the big focus now.
Simply put, if a lender reaches out, reach out to other lenders.
If you don’t obtain multiple quotes, you’ll never know what else is out there. And studies prove even one additional rate quote can save you thousands.
On top of these synergies, Rocket plans to optimize earnings on escrow deposits and make money from recurring servicing fees as well.
So not only are they getting a bunch of new loan prospects, but also a robust servicing business to boot.
Rocket Mr. Cooper Deal Expected to Close in Fourth Quarter of 2025
The all-stock transaction has already been unanimously approved by both boards of Rocket Companies and Mr. Cooper.
And is currently expected to close in the fourth quarter of 2025.
As part of the deal, Mr. Cooper shareholders will receive 11 shares of Rocket (NYSE:RKT) for each share of Mr. Cooper common stock.
Mr. Cooper stock (Nasdaq: COOP) was up roughly 17% on the news to just over $122 per share.
The expected acquisition cost of $9.4 billion would value Mr. Cooper shares at $143.33 based on the closing price on March 28th, 2025.
That’s represents a premium of 35% over the volume weighted average price (VWAP) of Mr. Cooper’s common stock over the past 30 days.
Mr. Cooper shareholders will also receive a dividend of $2 per share in connection with the completion of the transaction.
As I said with the Redfin acquisition, it’s clear Rocket wants to be the #1 mortgage lender in America again after losing its head to UWM.
And with a combined $2.1 trillion servicing book and access to nearly 10 million clients (one of every six mortgages in America), they’ll certainly be hard to beat.
Rocket refers to it as an “origination–servicing recapture flywheel,” which will bring new customers into their ecosystem via Redfin and look to retain them as customers for life via loan servicing and recapture.
(photo: Mike W.)
Before creating this site, I worked as an account executive for a wholesale mortgage lender in Los Angeles. My hands-on experience in the early 2000s inspired me to begin writing about mortgages 19 years ago to help prospective (and existing) home buyers better navigate the home loan process. Follow me on X for hot takes.