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The nation’s biggest provider of home loans, Rocket Mortgage, is looking to do more business with correspondent lenders by providing them with new tech tools designed to help them cut costs and provide better service to borrowers.
Correspondent lenders tend to be smaller institutions that originate and fund their own loans, then resell them to other lenders or investors.
Rocket Mortgage’s new Correspondent Assist program gives correspondent lenders the option of sending their clients to a digital client portal that’s powered by Rocket, but which features the partner’s branding. The portal, which is similar to the process Rocket offers mortgage brokers, allows homebuyers to apply for a mortgage, submit their documents and e-sign disclosures and closing documents.
Lenders who want to manage those aspects of the transaction themselves can choose Rocket’s Correspondent Flex process, which limits Rocket’s role to underwriting.
Both options — Correspondent Assist and Correspondent Flex — are being provided to “non-delegated” correspondent lenders that line up borrowers, but don’t do their own underwriting.
Austin Niemiec
“Rocket has always supported choice for our mortgage broker partners and their clients,” said Rocket Pro TPO executive Austin Niemiec in a statement. “Now, we are providing correspondent lenders with more options while we underwrite their loans.”
While many consumers come directly to Rocket Mortgage through its website, Rocket Pro TPO — the division of Rocket Mortgage that works with independent mortgage brokers and correspondent lenders — has become an increasingly important part of the company’s business.
Last year, Rocket Mortgage’s partner network grew faster than the direct-to-consumer channel, accounting for 43 percent of $351.2 billion in 2021 loan production.
Rocket’s partner network, which includes loans originated by mortgage brokers and correspondent lenders, originated $151.3 billion in loans last year, up 26 percent from 2020, according to the company’s most recent annual report.
While Rocket’s direct-to-consumer channel — borrowers who come to the company through its website — generated $199.9 billion in loan production that was essentially flat from $200.5 billion in 2020.
So far this year, however, Rocket’s direct lending business has fared a little better as rising mortgage rates have crimped lending. Rocket’s partner network originations plummeted 56 percent during the first six months of the year, to $35.1 billion. Direct-to-consumer originations fell 50 percent during the same period, to $53.4 billion, the company said in reporting second-quarter earnings.
Wells Fargo, which historically has counted on correspondent lenders for as much as half of the bank’s mortgage business, is reportedly weighing scaling the channel down over concerns about potential reputational risk.
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