8-KMaterial AgreementsFinancial Events

Rocket Companies, Inc. 8-K Report, Material Agreement (Jul 29, 2022)

Filed July 29, 2022For Securities:RKT

Summary

Rocket Companies, Inc. (RKT) announced on July 28, 2022, that its subsidiary, Rocket Mortgage, LLC, entered into a new $1.0 billion MSR (Mortgage Servicing Rights) facility with Citibank, N.A. This new facility acts as a sublimit under an existing Master Repurchase Agreement with Citibank, specifically designed to provide financing for mortgage loan servicing activities. The funds raised can be used for servicer advances or the purchase of MSRs, with borrowings secured by certain government-sponsored enterprise MSRs. The execution of this agreement did not alter the overall funding capacity available to Rocket Mortgage, which remained at $29.6 billion as of July 27, 2022, following the new facility's establishment. This total funding capacity is a decrease from $33.5 billion at the end of the first quarter of 2022 and $34.2 billion at the end of 2021.

Key Highlights

  • 1Rocket Mortgage secured a new $1.0 billion MSR facility with Citibank.
  • 2The new facility is a sublimit under an existing Master Repurchase Agreement.
  • 3Proceeds from the facility will be used to fund servicer advances or purchase MSRs.
  • 4Borrowings under the facility are secured by certain government-sponsored enterprise MSRs.
  • 5The total funding capacity for Rocket Mortgage remains unchanged at $29.6 billion after this new agreement.
  • 6The total funding capacity has decreased compared to prior periods ($33.5B on March 31, 2022, and $34.2B on December 31, 2021).

Frequently Asked Questions

The $1.0 billion MSR facility is designed to provide Rocket Mortgage, LLC with financing specifically for mortgage loan servicing activities. The proceeds can be used for funding servicer advances or for the purchase of Mortgage Servicing Rights (MSRs).

No, the new facility is a sublimit within an existing Master Repurchase Agreement and does not change the overall total funding capacity available to Rocket Mortgage. As of July 27, 2022, this capacity remained at $29.6 billion, which is a reduction from previous quarters.

Mortgage Servicing Rights (MSRs) represent the right to service a pool of mortgage loans. This involves collecting mortgage payments from borrowers, managing escrow accounts for taxes and insurance, and handling delinquencies and foreclosures. Companies that own MSRs earn fees for these services, which can be a significant revenue stream.

The filing states the total funding capacity has decreased from $33.5 billion (March 31, 2022) to $29.6 billion (July 27, 2022). While this specific 8-K doesn't detail the reasons for the overall decrease, it could be due to various factors such as contract expirations, renegotiations of credit lines, or changes in the company's strategic capital management.