Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2020 | Aug. 27, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-39432 | |
Entity Registrant Name | Rocket Companies, Inc. | |
Entity Central Index Key | 0001805284 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 84-4946470 | |
Entity Address, Address Line One | 1050 Woodward Avenue | |
Entity Address, City or Town | Detroit | |
Entity Address, State or Province | MI | |
Entity Address, Postal Zip Code | 48226 | |
City Area Code | 313 | |
Local Phone Number | 373-7990 | |
Title of 12(b) Security | Class A common stock, par value $0.00001 per share | |
Trading Symbol | RKT | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | No | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Class A common stock | ||
Entity Listings [Line Items] | ||
Entity Common Stock, Shares Outstanding | 100,372,565 | |
Class D common stock | ||
Entity Listings [Line Items] | ||
Entity Common Stock, Shares Outstanding | 1,884,079,483 |
Condensed Combined Balance Shee
Condensed Combined Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Assets | ||
Cash and cash equivalents | $ 1,724,035 | $ 1,350,972 |
Restricted cash | 78,367 | 61,154 |
Mortgage loans held for sale, at fair value | 17,628,535 | 13,275,735 |
Mortgage servicing rights (“MSRs”), at fair value | 2,289,209 | 2,874,972 |
MSRs collateral for financing liability, at fair value | 59,926 | 205,108 |
Notes receivable and due from affiliates | 17,028 | 89,946 |
Property and equipment, net of accumulated depreciation and amortization of $459,474 and $428,540, respectively | 192,173 | 176,446 |
Lease right of use assets | 256,183 | 278,921 |
Loans subject to repurchase right from Ginnie Mae | 3,496,120 | 752,442 |
Other assets | 714,789 | 499,658 |
Total assets | 28,856,457 | 20,077,327 |
Liabilities: | ||
Funding facilities | 15,685,860 | 12,041,878 |
Lines of credit | 160,000 | 165,000 |
Senior Notes, net | 2,235,721 | 2,233,791 |
Early buy out facility | 241,752 | 196,247 |
MSRs financing liability, at fair value | 58,926 | 189,987 |
Accounts payable | 219,650 | 157,295 |
Lease liabilities | 288,866 | 314,353 |
Forward commitments, at fair value | 351,261 | 43,794 |
Investor reserves | 63,012 | 54,387 |
Notes payable and due to affiliates | 61,192 | 35,082 |
Loans subject to repurchase right from Ginnie Mae | 3,496,120 | 752,442 |
Other liabilities | 457,920 | 390,149 |
Total liabilities | 23,320,280 | 16,574,405 |
Equity: | ||
Net parent investment | 5,527,173 | 3,498,065 |
Accumulated other comprehensive income (loss) | 5,929 | (151) |
Non-controlling interest | 3,075 | 5,008 |
Total equity | 5,536,177 | 3,502,922 |
Total liabilities and equity | 28,856,457 | 20,077,327 |
IRLCs | ||
Assets | ||
Derivatives, at fair value | 2,393,764 | 508,135 |
Forward commitments | ||
Assets | ||
Derivatives, at fair value | 6,328 | 3,838 |
Liabilities: | ||
Forward commitments, at fair value | $ 351,261 | $ 43,794 |
Condensed Combined Balance Sh_2
Condensed Combined Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Property and equipment, accumulated depreciation and amortization | $ 459,474 | $ 428,540 |
Condensed Combined Statements o
Condensed Combined Statements of Income and Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Gain on sale of loans: | ||||
Gain on sale of loans excluding fair value of MSRs, net | $ 4,083,661 | $ 666,796 | $ 5,370,351 | $ 1,097,370 |
Fair value of originated MSRs | 669,923 | 445,663 | 1,205,342 | 742,335 |
Gain on sale of loans, net | 4,753,584 | 1,112,459 | 6,575,693 | 1,839,705 |
Loan servicing loss: | ||||
Servicing fee income | 249,842 | 240,255 | 506,935 | 464,861 |
Change in fair value of MSRs | (552,843) | (598,262) | (1,544,095) | (1,073,963) |
Loan servicing loss, net | (303,001) | (358,007) | (1,037,160) | (609,102) |
Interest income (expense): | ||||
Interest income | 78,039 | 61,585 | 152,081 | 108,637 |
Interest expense on funding facilities | (53,756) | (32,430) | (93,215) | (56,043) |
Interest income, net | 24,283 | 29,155 | 58,866 | 52,594 |
Other income | 562,265 | 153,938 | 806,567 | 286,120 |
Total revenue, net | 5,037,131 | 937,545 | 6,403,966 | 1,569,317 |
Expenses | ||||
Salaries, commissions and team member benefits | 853,750 | 486,768 | 1,537,200 | 944,546 |
General and administrative expenses | 288,494 | 165,343 | 482,060 | 331,182 |
Marketing and advertising expenses | 202,198 | 227,764 | 420,190 | 436,661 |
Depreciation and amortization | 16,189 | 17,687 | 32,304 | 35,792 |
Interest and amortization expense on non-funding debt | 33,168 | 33,086 | 66,275 | 66,168 |
Other expenses | 161,452 | 61,156 | 286,041 | 109,576 |
Total expenses | 1,555,251 | 991,804 | 2,824,070 | 1,923,925 |
Income (loss) before income taxes | 3,481,880 | (54,259) | 3,579,896 | (354,608) |
(Provision for) benefit from income taxes | (20,669) | 283 | (21,405) | 1,287 |
Net income (loss) | 3,461,211 | (53,976) | 3,558,491 | (353,321) |
Net loss attributable to non-controlling interest | 436 | 325 | 877 | 652 |
Net income (loss) attributable to Rocket Companies | 3,461,647 | (53,651) | 3,559,368 | (352,669) |
Comprehensive income: | ||||
Net income (loss) attributable to Rocket Companies | 3,461,647 | (53,651) | 3,559,368 | (352,669) |
Other comprehensive income (loss) | 588 | 444 | (851) | 598 |
Unrealized gain on investment securities | 7,087 | 0 | 7,087 | 0 |
Comprehensive income (loss) attributable to Rocket Companies | $ 3,469,322 | $ (53,207) | $ 3,565,604 | $ (352,071) |
Condensed Combined Statements_2
Condensed Combined Statements of Changes in Equity - USD ($) $ in Thousands | Total | Net Parent Investment | Accumulated Other Comprehensive (Loss) Income | Total Non-controlling Interest |
Beginning Balance at Dec. 31, 2018 | $ 2,780,896 | $ 2,775,594 | $ (868) | $ 6,170 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income (loss) | (299,345) | (299,018) | (327) | |
Other comprehensive income (loss) | 189 | 154 | 35 | |
Net transfers to Parent | (212,777) | (212,777) | ||
Stock based compensation, net | 8,506 | 8,488 | 18 | |
Ending Balance at Mar. 31, 2019 | 2,277,469 | 2,272,287 | (714) | 5,896 |
Beginning Balance at Dec. 31, 2018 | 2,780,896 | 2,775,594 | (868) | 6,170 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income (loss) | (353,321) | |||
Unrealized gain on investment securities | 0 | |||
Ending Balance at Jun. 30, 2019 | 2,232,494 | 2,227,086 | (270) | 5,678 |
Beginning Balance at Mar. 31, 2019 | 2,277,469 | 2,272,287 | (714) | 5,896 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income (loss) | (53,976) | (53,651) | (325) | |
Other comprehensive income (loss) | 542 | 444 | 98 | |
Stock based compensation, net | 8,459 | 8,450 | 9 | |
Unrealized gain on investment securities | 0 | |||
Ending Balance at Jun. 30, 2019 | 2,232,494 | 2,227,086 | (270) | 5,678 |
Beginning Balance at Dec. 31, 2019 | 3,502,922 | 3,498,065 | (151) | 5,008 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income (loss) | 97,280 | 97,721 | (441) | |
Other comprehensive income (loss) | (1,759) | (1,439) | (320) | |
Net transfers from Parent | 21,918 | 21,918 | ||
Stock based compensation, net | 29,058 | 29,049 | 9 | |
Ending Balance at Mar. 31, 2020 | 3,649,419 | 3,646,753 | (1,590) | 4,256 |
Beginning Balance at Dec. 31, 2019 | 3,502,922 | 3,498,065 | (151) | 5,008 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income (loss) | 3,558,491 | |||
Unrealized gain on investment securities | 7,087 | |||
Ending Balance at Jun. 30, 2020 | 5,536,177 | 5,527,173 | 5,929 | 3,075 |
Beginning Balance at Mar. 31, 2020 | 3,649,419 | 3,646,753 | (1,590) | 4,256 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income (loss) | 3,461,211 | 3,461,647 | (436) | |
Other comprehensive income (loss) | 719 | 588 | 131 | |
Net transfers to Parent | (1,612,629) | (1,612,629) | ||
Stock based compensation, net | 31,254 | 31,246 | 8 | |
Other equity adjustment | 0 | 156 | (156) | |
Unrealized gain on investment securities | 7,087 | 7,087 | ||
Non-controlling interest attributed to dissolution | (884) | (884) | ||
Ending Balance at Jun. 30, 2020 | $ 5,536,177 | $ 5,527,173 | $ 5,929 | $ 3,075 |
Condensed Combined Statements_3
Condensed Combined Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Operating activities | ||
Net income (loss) | $ 3,558,491 | $ (353,321) |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||
Depreciation and amortization | 32,304 | 35,792 |
Change in non-controlling interest | (884) | 0 |
Origination of mortgage servicing rights | (1,205,342) | (742,335) |
Change in fair value of MSRs | 1,544,095 | 1,073,963 |
Gain on sale of loans excluding fair value of MSRs, net | (5,370,351) | (1,097,370) |
Disbursements of mortgage loans held for sale | (122,056,424) | (53,244,712) |
Proceeds from sale of loans held for sale | 121,563,404 | 51,510,408 |
Stock-based compensation expense | 60,312 | 16,965 |
Change in assets and liabilities: | ||
Due from affiliates | 12,403 | (71,188) |
Other assets | (218,711) | (137,009) |
Accounts payable | 62,354 | 69,141 |
Due to affiliates | 26,084 | 87,179 |
Premium recapture and indemnification losses paid | (738) | (1,049) |
Other liabilities | 69,703 | (7,163) |
Total adjustments | (5,481,791) | (2,507,378) |
Net cash used in operating activities | (1,923,300) | (2,860,699) |
Investing activities | ||
Proceeds from sale of MSRs | 185,768 | 0 |
Net decrease (increase) in notes receivable from affiliates | 60,516 | |
Net decrease (increase) in notes receivable from affiliates | (892) | |
Decrease (increase) in mortgage loans held for investment | 5,130 | |
Decrease (increase) in mortgage loans held for investment | (9,347) | |
Net increase in investment securities | (2,500) | 0 |
Purchase and other additions of property and equipment, net of disposals | (42,221) | (18,510) |
Net cash provided by (used in) investing activities | 206,693 | (28,749) |
Financing activities | ||
Net borrowings on funding facilities | 3,643,982 | 2,571,823 |
Net payments on lines of credit | (5,000) | 0 |
Net borrowings on early buy out facility | 45,504 | 84,957 |
Net borrowings notes payable from unconsolidated affiliates | 27 | 4,000 |
Proceeds from MSRs financing liability | 14,121 | 0 |
Net transfers to Parent | (1,590,711) | (212,777) |
Net cash provided by financing activities | 2,107,923 | 2,448,003 |
Effects of exchange rate changes on cash and cash equivalents | (1,040) | 732 |
Net increase (decrease) in cash and cash equivalents and restricted cash | 390,276 | (440,713) |
Cash and cash equivalents and restricted cash, beginning of period | 1,412,126 | 1,101,167 |
Cash and cash equivalents and restricted cash, end of period | 1,802,402 | 660,454 |
Non-cash activities | ||
Loans transferred to other real estate owned | 688 | 2,039 |
Supplemental disclosures | ||
Cash paid for interest on related party borrowings | $ 814 | $ 69 |
Business, Basis of Presentation
Business, Basis of Presentation, and Accounting Policies | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business, Basis of Presentation, and Accounting Policies | Business, Basis of Presentation, and Accounting Policies The accompanying condensed combined financial statements include all of the assets, liabilities and results of operations of twelve subsidiaries of Rock Holdings Inc. (“Rock Holdings”, or “RHI”), which are Quicken Loans, LLC, EFB Holdings Inc. (“Edison Financial”), Lendesk Canada Holdings Inc., LMB HoldCo LLC (“Core Digital Media”), RCRA Holdings LLC (“Rock Connections” and “Rocket Auto”), RockTech Canada Inc., Rock Central LLC, Rocket Homes Real Estate LLC (“Rocket Homes”), RockLoans Holdings LLC (“Rocket Loans”), Amrock Inc. (“Amrock”), Nexsys Technologies LLC (“Nexsys”), and Woodward Capital Management LLC, (collectively, the “Combined Businesses”, “Rocket Companies”, “we”, “us”, “our”, or the “Company”). As used herein, “Rocket Mortgage” refers to either the Rocket Mortgage brand or platform, or the Quicken Loans business, as the context allows In April 2020 Quicken Loans Inc. converted its corporate structure to an LLC and changed its name from Quicken Loans Inc. to Quicken Loans, LLC. In July 2020 Amrock Inc. converted its corporate structure to an LLC and changed its name from Amrock Inc. to Amrock, LLC. Basis of Presentation The Combined Businesses have historically operated as part of RHI and not as a stand alone entity. The condensed combined financial statements represent the results of operations, financial position, cash flows and changes in equity of the subsidiaries of RHI mentioned above, prepared on a stand-alone basis and have been derived from the consolidated financial statements and accounting records of RHI. All revenues and expenses as well as assets and liabilities that are either legally attributable to us or directly associated with our business activities are included in the condensed combined financial statements. Net parent investment represents RHI’s interest in the recorded net assets of the Company. All significant transactions between the Company and RHI have been included in the accompanying condensed combined financial statements and are reflected in the accompanying Condensed Combined Statements of Changes in Equity as “Net transfers to/from parent” and in the accompanying Condensed Combined Balance Sheets within “Net parent investment.” All significant intercompany transactions and accounts between the businesses comprising the Company have been eliminated in the accompanying condensed combined financial statements. Our condensed combined financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All transactions and accounts between RHI and the Company have a history of settlement or are expected to be settled for cash, and are reflected as related party transactions. For further details of the Company’s related party transactions refer to Note 6, Transactions with Related Parties . The condensed combined financial statements may not include all of the expenses that would have been incurred had we been a stand-alone company during the periods presented and may not reflect our condensed combined results of operations, financial position and cash flows had we been a stand-alone company during the periods presented. The amount of actual expenses that would have been incurred if we had operated as a stand alone company would depend on a number of factors, including our chosen organizational structure. We also may incur additional costs associated with being a stand-alone, publicly listed company that were not included in the expense allocations and, therefore, would result in additional costs that are not reflected in our historical statements of income and comprehensive income, balance sheets and cash flows. Our condensed combined financial statements are unaudited and presented in U.S. dollars. They have been prepared in accordance with U.S. GAAP pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. Our Condensed Combined Balance Sheet as of December 31, 2019 has been derived from our audited combined financial statements at that date. Our condensed combined financial statements should be read in conjunction with our combined financial statements and notes thereto for the year ended December 31, 2019, which include a complete set of footnote disclosures, including our significant accounting policies. We believe the assumptions underlying the condensed combined financial statements, including the assumptions regarding allocation of expenses from RHI are reasonable. The executive management compensation expense has been allocated based on time incurred for services provided to the Combined Businesses. Total costs allocated to us for these services were $44,997 and $11,231 for the three months ended June 30, 2020 and 2019, and $86,734 and $21,930 for the six months ended June 30, 2020 and 2019, respectively, and were included in salaries, commissions and team member benefits in our Condensed Combined Statements of Income and Comprehensive Income. In our opinion, these condensed combined financial statements include all normal and recurring adjustments considered necessary for a fair statement of our results of operations, financial position and cash flows for the periods presented. However, our results of operations for any interim period are not necessarily indicative of the results that may be expected for a full fiscal year or for any other future period. Management Estimates The preparation of condensed combined financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the condensed combined financial statements and the reported amounts of revenues and expenses during the reporting period. Although management is not currently aware of any factors that would significantly change its estimates and assumptions, actual results may differ from these estimates. Subsequent Events In preparing these condensed combined financial statements, the Company evaluated events and transactions for potential recognition or disclosure through the date these condensed combined financial statements were issued. Refer to Note 5, Borrowings for disclosures on changes to the Company’s debt agreements that occurred subsequent to June 30, 2020, which includes additional details on the newly executed $950,000 syndicate revolving credit agreement. In July 2020, the Company sold MSRs relating to certain single-family mortgage loans with an aggregate unpaid principal balance of approximately $20,000,000 as of June 30, 2020. The sale represented approximately 5.3% of the Company’s total single-family mortgage servicing portfolio as of June 30, 2020. At the time of issuance of this report, the direct and indirect impacts that the COVID-19 pandemic and recent market volatility may have on the Company’s financial statements are uncertain. The Company cannot reasonably estimate the magnitude of the impact these events may ultimately have on its results of operations, liquidity or financial position. However, management of the Company is unaware of any known adverse material risk or event that should be recognized in the financial statements at this time. IPO and Reorganization On August 10, 2020, Rocket Companies, Inc. completed the initial public offering of 100,000,000 shares of its Class A common stock, $0.00001 par value per share, at an offering price of $18.00 per share. Rocket Companies, Inc. received net proceeds from the IPO of approximately $1,760,000 after deducting underwriting discounts and commissions, all of which was used to purchase 100,000,000 non-voting membership units of RKT Holdings, LLC (the “Holdings units”) and shares of Class D common stock from RHI. Rocket Companies, Inc. is a publicly traded company whose Class A common stock is traded on the New York Stock Exchange under the ticker symbol “RKT”. Prior to the completion of the offering, RHI and certain RHI subsidiaries consummated an internal reorganization. As a result of the IPO and the reorganization: • Rocket Companies, Inc. is the sole managing member of RKT Holdings, LLC (“Holdings”), which owns direct interests in (a) Rocket Mortgage and (b) various other former direct subsidiaries of RHI. • Rocket Companies, Inc. is a holding company which has no material assets other than its ownership of Holdings and its indirect interests in the subsidiaries of Holdings and has no independent means of generating revenue or cash flow. • Dan Gilbert, RHI, and Rocket Companies, Inc. are members of Holdings. • No shares of Class B common stock and no shares of Class C common stock were outstanding at the completion of the offering. • Holdings is treated as a partnership for U.S. federal income tax purposes and, as such, is itself generally not subject to U.S. federal income tax under current U.S. tax laws. Each member of Holdings will be required to take into account for U.S. federal income tax purposes its distributive share of the items of income, gain, loss and deduction of Holdings. • 1,883,279,483 shares of Rocket Companies, Inc. Class D common stock, 100,372,565 shares of Rocket Companies, Inc. Class A common stock, and 1,983,652,048 Holdings Units were outstanding. An additional 16,729,253 shares of Rocket Companies, Inc. Class A common stock were reserved for equity-based awards. • RHI owns (i) 1,882,177,661 Holdings Units, collectively representing approximately 95% of the economic interest in Holdings and (ii) 1,882,177,661 shares of Rocket Companies, Inc. Class D common stock, collectively representing 79% of the combined voting power of Rocket Companies, Inc. common stock. • Dan Gilbert owns (i) 1,101,822 Holdings Units, collectively representing 0.06% of the economic interest in Holdings and (ii) 28,334 shares of Rocket Companies, Inc Class A common stock and 1,101,822 shares of Rocket Companies, Inc. Class D common stock, collectively representing approximately 2% of the combined voting power of Rocket Companies, Inc. common stock. • Gilbert Affiliates own 344,231 shares of Rocket Companies, Inc. Class A common stock, collectively representing approximately 0.06% of the combined voting power of Rocket Companies, Inc. common stock. • The public stockholders (i) own 100,000,000 shares of Class A common stock, which represent approximately 19% of the combined voting power of Rocket Companies, Inc. common stock, and (ii) through Rocket Companies, Inc.’s ownership of Holdings units, indirectly hold approximately 5% of the economic interest in Holdings and its subsidiaries. • The financial results of Holdings and its subsidiaries will be consolidated with Rocket Companies, Inc., and approximately 95% of the consolidated net earnings (loss) and net assets will be allocated to the non-controlling interest to reflect the entitlement of RHI and Dan Gilbert to a portion of the consolidated net earnings (loss). Stock-Based Compensation In connection with this offering, equity-based awards were issued under the Rocket Companies, Inc. 2020 Omnibus Incentive Plan including 16,729,253 restricted stock units and stock options to purchase 26,373,361 shares of our Class A common stock at an exercise price equal to the price to the public in the initial public offering. RSUs vest over one one Distributions Subsequent to June 30, 2020, cash distributions were made to RHI in the total amount of $2,260,000. The following unaudited pro forma balance sheet line items as of June 30, 2020 reflect these distributions as if such distributions were declared and paid on June 30, 2020. UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET LINE ITEMS AS OF JUNE 30, 2020 Rocket Companies As Reported Distribution Adjustments Rocket Companies Pro Forma Cash and cash equivalents $ 1,724,035 $ (749,549) (1) $ 974,486 Total assets $ 28,856,457 $ (749,549) $ 28,106,908 Other liabilities $ 457,920 $ 1,510,451 (1) $ 1,968,371 Total liabilities $ 23,320,280 $ 1,510,451 $ 24,830,731 Net parent investment $ 5,527,173 $ (2,260,000) (1) $ 3,267,173 Total equity $ 5,536,177 $ (2,260,000) $ 3,276,177 (1) The Company paid capital distributions to RHI subsequent to June 30, 2020. The $2,260,000 distribution was fully funded through the use of cash on hand as of June 30, 2020 and cash flows generated from operations between July 1, 2020 and the initial public offering. For purposes of the unaudited pro forma condensed combined balance sheet, the payment of the distributions is reflected as a reduction to net parent investment of $2,260,000, a reduction to cash and cash equivalents of $749,549, and the recognition of a non-interest bearing payable of $1,510,451. The pro forma cash and cash equivalents balance after giving effect to this adjustment represents the Company's estimated ending cash and cash equivalents balance immediately prior to the reorganization transactions and initial public offering. Tax Receivable Agreement The purchase of Holdings Units (along with corresponding shares of our Class D common stock) from RHI using the net proceeds from the offering, future exchanges by RHI or Dan Gilbert (or its transferees or other assignees) of Holdings Units and corresponding shares of Class D common stock or Class C common stock for shares of our Class B common stock or Class A common stock, and future purchases of Holdings Units (along with the corresponding shares of our Class D common stock or Class C common stock) from RHI or Dan Gilbert (or its transferees or other assignees) are expected to produce favorable tax attributes for us. These tax attributes would not be available to us in the absence of those transactions. In connection with the reorganization transactions, Rocket Companies, Inc. entered into a tax receivable agreement with RHI and Dan Gilbert that will obligate us to make payments to RHI and Dan Gilbert generally equal to 90% of the applicable cash savings that we actually realize as a result of these tax attributes and tax attributes resulting from payments made under the tax receivable agreement. We will retain the benefit of the remaining 10% of these tax savings. There is a possibility that under certain circumstances not all of the 90% of the applicable cash savings will be paid to the selling or exchanging holder of Holdings Units at the time described above. If we determine that such circumstances apply and all or a portion of such applicable tax savings is in doubt, we will pay to the holders of such Holdings Units the amount attributable to the portion of the applicable tax savings that we determine is not in doubt and pay the remainder at such time as we reasonably determine the actual tax savings or that the amount is no longer in doubt. Rocket Companies, Inc. recorded amounts payable pursuant to the Tax Receivable Agreement to RHI of approximately $512,000 at August 10, 2020. Acquisition Agreement On August 5, 2020, Rocket Companies, Inc. entered into an acquisition agreement with RHI and its direct subsidiary Amrock Holdings Inc. pursuant to which we acquired Amrock Title Insurance Company ("ATI"), a title insurance underwriting business, for total aggregate consideration of $14,400 that consisted of 800,000 Holdings Units and shares of Rocket Companies, Inc. Class D common stock valued at the price to the public in this offering of $18.00 per share (the number of shares issued equals the purchase price divided by the price to public in our initial public offering). ATI's net income for the year ended December 31, 2019 was $4,700. The ATI acquisition closed on August 14, 2020, and the Company issued the 800,000 Class D and Holding Units to RHI. The acquisition will be accounted for as a common control transaction. Revenue Recognition The following revenue streams fall within the scope of ASC Topic 606—Revenue from Contracts with Customers and are disaggregated hereunder: Core Digital Media lead generation revenue —Online consumer acquisition revenue, net of intercompany eliminations, were $5,504 and $11,794, for the three months ended June 30, 2020 and 2019, respectively, and $13,064 and $21,291, for the six months ended June 30, 2020 and 2019, respectively. Professional service fees —Professional service fee revenues were $1,920 and $2,283, for the three months ended June 30, 2020 and 2019, and $3,755 and $3,887, for the six months ended June 30, 2020 and 2019, respectively, and were rendered entirely to related parties. Rocket Homes real estate network referral fees —Real estate network referral fees were $11,837 and $11,400, for the three months ended June 30, 2020 and 2019, and $19,825 and $18,183, for the six months ended June 30, 2020 and 2019, respectively. Rock Connections contact center revenue —The Company recognizes contact center revenue for communication services including client support and sales. Consideration received includes a fixed base fee and/or a variable contingent fee. The fixed base fee is recognized ratably over the period of performance, as the performance obligation is considered to be satisfied equally throughout the service period. The variable contingent fee related to car sales is constrained until the sale of the car is completed. Contact center revenue were $5,816 and $8,756, for the three months ended June 30, 2020 and 2019, and $13,157 and $13,245, for the six months ended June 30, 2020 and 2019, respectively. Amrock closing fees —Closing fees were $106,038 and $40,060, for the three months ended June 30, 2020 and 2019, and $179,525 and $73,323, for the six months ended June 30, 2020 and 2019, respectively. Amrock appraisal revenue, net —Appraisal revenue, net were $20,781 and $18,131, for the three months ended June 30, 2020 and 2019, and $38,399 and $36,183, for the six months ended June 30, 2020 and 2019, respectively. Cash, Cash Equivalents and Restricted Cash Restricted cash as of June 30, 2020 and 2019 consisted of cash on deposit for a repurchase facility and client application deposits, title premiums collected from insureds that are due to the underwritten insurance company and a $25,000 bond. June 30, 2020 2020 2019 Cash and cash equivalents $ 1,724,035 $ 608,622 Restricted cash 78,367 51,832 Total cash, cash equivalents, and restricted cash in the statement of cash flows $ 1,802,402 $ 660,454 Loans subject to repurchase right from Ginnie Mae For certain loans sold to Ginnie Mae, the Company as the servicer has the unilateral right to repurchase any individual loan in a Ginnie Mae securitization pool if that loan meets defined criteria, including being delinquent more than 90 days. Once the Company has the unilateral right to repurchase the delinquent loan, the Company has effectively regained control over the loan and must re-recognize the loan on the Condensed Combined Balance Sheet and establish a corresponding finance liability regardless of the Company's intention to repurchase the loan. Recently Adopted Accounting Pronouncements In June 2016, the FASB issued Accounting Standard Update (“ASU”) No. 2016-13, “ Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ,” which introduced an expected credit loss model for the impairment of financial assets, measured at amortized cost. The model replaces the probable, incurred loss model for those assets and broadens the information an entity must consider in developing its expected credit loss estimate for assets measures at amortized cost. On January 1, 2020, the Company adopted ASU No. 2016-13, Financial Instruments— Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and subsequent amendments to the initial guidance under ASU 2018-19, ASU 2019-04 and ASU 2019-05 (collectively, “Topic 326”) with no material impact to our combined financial position, results of operations or cash flows. Based upon management’s scoping analysis, the Company determined that money market funds, notes, other receivables, and Ginnie Mae early buyout loans are within the scope of ASU 2016-13. For the Ginnie Mae early buyout loans, the Company determined that the guarantee from the Federal Housing Administration (“FHA”) or Veterans Affairs (“VA”) limits the Company’s exposure to potential credit-related losses to an immaterial amount. For other assets, primarily money market funds, the Company determined that these are short-term in nature (less than one year) and of high credit quality, and the estimated credit-related losses over the life of these receivables are also immaterial. For each of the aforementioned financial instruments carried at amortized cost, the Company enhanced its processes to consider and include the requirements of ASU 2016-13, as applicable, into the determination of credit-related losses. In March 2020, the FASB issued ASU No. 2020-03, Codification Improvements to Financial Instruments (“ASU 2020-03”). ASU 2020-03 improves and clarifies various financial instruments topics to increase shareholder awareness and make the standards easier to understand and apply by eliminating inconsistencies and providing clarifications. The Company adopted ASU 2020-03 upon issuance, with no material effect on our combined financial position, results of operations or cash flows. Accounting Standards Issued but Not Yet Adopted In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The amendments to Topic 740 include the removal of certain exceptions to the general principles of ASC 740 in such areas as intraperiod tax allocation, year to date losses in interim periods and deferred tax liabilities related to outside basis differences. Amendments also include simplification in other areas such as interim recognition of enactment of tax laws or rate changes and accounting for a franchise tax (or similar tax) that is partially based on income. This standard will be effective for the Company on January 1, 2021. Early adoption is permitted in any interim or annual period, with any adjustments reflected as of the beginning of the fiscal year of adoption. If an entity chooses to early adopt, it must adopt all changes as a result of the ASU. The Company is currently evaluating the potential impact that the adoption of this ASU will have on the combined financial statements and related disclosures. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting . Subject to meeting certain criteria, the new guidance provides optional expedients and exceptions to applying contract modification accounting under existing U.S. GAAP, to address the expected phase out of the London Inter-bank Offered Rate (“LIBOR”) by the end of 2021. This guidance is effective upon issuance and allows application to contract changes as early as January 1, 2020. The Company is in the process of reviewing its funding facilities and financing facilities that utilize LIBOR as the reference rate and is currently evaluating the potential impact that the adoption of this ASU will have on the combined financial statements and related disclosures. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair value is the price that would be received if an asset were sold or the price that would be paid to transfer a liability in an orderly transaction between willing market participants at the measurement date. Required disclosures include classification of fair value measurements within a three-level hierarchy (Level 1, Level 2, and Level 3). Classification of a fair value measurement within the hierarchy is dependent on the classification and significance of the inputs used to determine the fair value measurement. Observable inputs are those that are observed, implied from, or corroborated with externally available market information. Unobservable inputs represent the Company’s estimates of market participants’ assumptions. Fair value measurements are classified in the following manner: Level 1 —Valuation is based on quoted prices in active markets for identical assets or liabilities at the measurement date. Level 2 —Valuation is based on either observable prices for identical assets or liabilities in inactive markets, observable prices for similar assets or liabilities, or other inputs that are derived directly from, or through correlation to, observable market data at the measurement date. Level 3 —Valuation is based on the Company’s internal models using assumptions at the measurement date that a market participant would use. In determining fair value measurement, the Company uses observable inputs whenever possible. The level of a fair value measurement within the hierarchy is dependent on the lowest level of input that has a significant impact on the measurement as a whole. If quoted market prices are available at the measurement date or are available for similar instruments, such prices are used in the measurements. If observable market data is not available at the measurement date, judgment is required to measure fair value. The following is a description of measurement techniques for items recorded at fair value on a recurring basis. There were no material items recorded at fair value on a nonrecurring basis as of June 30, 2020 or December 31, 2019. Mortgage loans held for sale: Loans held for sale that trade in active secondary markets are valued using Level 2 measurements derived from observable market data, including market prices of securities backed by similar mortgage loans adjusted for certain factors to approximate the fair value of a whole mortgage loan, including the value attributable to mortgage servicing and credit risk. Loans held for sale for which there is little to no observable trading activity of similar instruments are valued using Level 3 measurements based upon dealer price quotes. IRLCs: The fair value of IRLCs is based on current market prices of securities backed by similar mortgage loans (as determined above under mortgage loans held for sale), net of costs to close the loans, subject to the estimated loan funding probability, or “pull-through factor”. Given the significant and unobservable nature of the pull-through factor, IRLCs are classified as Level 3. MSRs: The fair value of MSRs (including MSRs collateral for financing liability and MSRs financing liability) is determined using a valuation model that calculates the present value of estimated net future cash flows. The model includes estimates of prepayment speeds, discount rate, cost to service, float earnings, contractual servicing fee income, and ancillary income among others. These fair value measurements are classified as Level 3. Forward commitments: The Company’s forward commitments are valued based on quoted prices for similar assets in an active market with inputs that are observable and are classified within Level 2 of the valuation hierarchy. Assets and Liabilities Measured at Fair Value on a Recurring Basis The table below shows a summary of financial statement items that are measured at estimated fair value on a recurring basis, including assets measured under the fair value option. There were no material transfers of assets or liabilities recorded at fair value on a recurring basis between Levels 1, 2 or 3 during the six months ended June 30, 2020 or the year ended December 31, 2019. Level 1 Level 2 Level 3 Total Balance at June 30, 2020 Assets: Mortgage loans held for sale $ — $ 17,212,435 $ 416,100 $ 17,628,535 IRLCs — — 2,393,764 2,393,764 MSRs — — 2,289,209 2,289,209 MSRs collateral for financing liability(1) — — 59,926 59,926 Forward commitments — 6,328 — 6,328 Total assets $ — $ 17,218,763 $ 5,158,999 $ 22,377,762 Liabilities: Forward commitments $ — $ 351,261 $ — $ 351,261 MSRs financing liability(1) — — 58,926 58,926 Total liabilities $ — $ 351,261 $ 58,926 $ 410,187 Balance at December 31, 2019 Assets: Mortgage loans held for sale $ — $ 12,966,942 $ 308,793 $ 13,275,735 IRLCs — — 508,135 508,135 MSRs — — 2,874,972 2,874,972 MSRs collateral for financing liability(1) — — 205,108 205,108 Forward commitments — 3,838 — 3,838 Total assets $ — $ 12,970,780 $ 3,897,008 $ 16,867,788 Liabilities: Forward commitments $ — $ 43,794 $ — $ 43,794 MSRs financing liability(1) — — 189,987 189,987 Total liabilities $ — $ 43,794 $ 189,987 $ 233,781 _________________________ (1) Refer to Note 3, Mortgage Servicing Rights for further information regarding both the MSRs collateral for financing liability and MSRs financing liability. The following tables present the quantitative information about recurring Level 3 fair value financial instruments and the fair value measurements as of: June 30, 2020 December 31, 2019 Unobservable Input Range Range Mortgage loans held for sale Dealer pricing 65 % - 103 % (95)% 75 % - 103 % (98)% IRLCs Loan funding probability 0 % - 100 % (74)% 0 % - 100 % (72)% MSRs, MSRs collateral for financing liability, and MSRs financing liability Discount rate 9.5 % - 12.0 % (10.0)% 9.5 % - 12.0 % (10.0)% Conditional prepayment rate 2.7 % - 29.6 % (19.2)% 7.4 % - 44.5 % (14.5)% The table below presents a reconciliation of Level 3 assets measured at fair value on a recurring basis for the three and six months ended June 30, 2020 and 2019. Mortgage servicing rights (including MSRs collateral for financing liability and MSRs financing liability) are also classified as a Level 3 asset measured at fair value on a recurring basis and its reconciliation is found in Note 3, Mortgage Servicing Rights . Loans Held for Sale IRLCs Balance at March 31, 2020 $ 418,090 $ 1,214,865 Transfers in(1) 242,904 — Transfers out/principal reductions(1) (235,617) — Net transfers and revaluation gains — 1,178,899 Total losses included in net income (9,277) — Balance at June 30, 2020 $ 416,100 $ 2,393,764 Balance at March 31, 2019 $ 166,946 $ 372,105 Transfers in(1) 374,435 — Transfers out/principal reductions(1) (265,856) — Net transfers and revaluation gains — 135,082 Total gains included in net income 1,026 — Balance at June 30, 2019 $ 276,551 $ 507,187 Loans Held for Sale IRLCs Balance at December 31, 2019 $ 308,793 $ 508,135 Transfers in(1) 783,763 — Transfers out/principal reductions(1) (660,986) — Net transfers and revaluation gains — 1,885,629 Total losses included in net income (15,470) — Balance at June 30, 2020 $ 416,100 $ 2,393,764 Balance at December 31, 2018 $ 194,752 $ 245,663 Transfers in(1) 527,359 — Transfers out/principal reductions(1) (447,725) — Net transfers and revaluation gains — 261,524 Total gains included in net income 2,165 — Balance at June 30, 2019 $ 276,551 $ 507,187 _________________________ (1) Transfers in represent loans repurchased from investors or loans originated for which an active market currently does not exist. Transfers out primarily represent loans sold to third parties and loans paid in full. Fair Value Option The following is the estimated fair value and unpaid principal balance (“UPB”) of mortgage loans held for sale that have contractual principal amounts and for which the Company has elected the fair value option. The fair value option was elected for mortgage loans held for sale as the Company believes fair value best reflects their expected future economic performance: Fair Value Principal Amount Due Upon Maturity Difference(1) Balance at June 30, 2020 $ 17,628,535 $ 16,819,756 $ 808,779 Balance at December 31, 2019 $ 13,275,735 $ 12,929,143 $ 346,592 _________________________ (1) Represents the amount of gains included in Gain on sale of loans, net due to changes in fair value of items accounted for using the fair value option. Disclosures of the fair value of certain financial instruments are required when it is practical to estimate the value. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. The following table presents the carrying amounts and estimated fair value of financial liabilities that are not recorded at fair value on a recurring or nonrecurring basis. This table excludes cash and cash equivalents, restricted cash, warehouse borrowings, and line of credit borrowing facilities as these financial instruments are highly liquid or short-term in nature and as a result, their carrying amounts approximate fair value: June 30, 2020 December 31, 2019 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Senior Notes, due 5/1/2025 $ 1,241,868 $ 1,279,950 $ 1,241,012 $ 1,297,250 Senior Notes, due 1/15/2028 $ 993,853 $ 1,045,320 $ 992,779 $ 1,046,683 The fair value of Senior Notes, was calculated using the observable bond price at June 30, 2020 and December 31, 2019, respectively. The Senior Notes are classified as Level 2 in the fair value hierarchy. |
Mortgage Servicing Rights
Mortgage Servicing Rights | 6 Months Ended |
Jun. 30, 2020 | |
Transfers and Servicing [Abstract] | |
Mortgage Servicing Rights | Mortgage Servicing Rights Mortgage servicing rights are recognized as assets on the Condensed Combined Balance Sheet when loans are sold and the associated servicing rights are retained. The Company maintains one class of MSR asset and has elected the fair value option. These MSRs are recorded at fair value, which is determined using a valuation model that calculates the present value of estimated future net servicing fee income. The model includes estimates of prepayment speeds, discount rate, cost to service, float earnings, contractual servicing fee income, and ancillary income and late fees, among others. These estimates are supported by market and economic data collected from various outside sources. During 2019, the Company began using derivatives to economically hedge the risk of changes in the fair value of certain MSRs measured at fair value. The changes in the fair value of derivatives that serve to mitigate certain risks associated with the certain MSRs are recorded in current period earnings. The following table summarizes changes to the MSR assets for the three and six months ended: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Fair value, beginning of period $ 2,170,638 $ 3,001,501 $ 2,874,972 $ 3,180,530 MSRs originated 669,923 445,663 1,205,342 742,335 MSRs sales — — (186,292) — Changes in fair value: Due to changes in valuation model inputs or assumptions(1) (272,885) (391,348) (1,078,421) (712,327) Due to collection/realization of cash flows (278,467) (206,914) (526,392) (361,636) Total changes in fair value (551,352) (598,262) (1,604,813) (1,073,963) Fair value, end of period $ 2,289,209 $ 2,848,902 $ 2,289,209 $ 2,848,902 _________________________ (1) Reflects changes in assumptions including discount rates and prepayment speed assumptions, mostly due to changes in market interest rates. Does not include the change in fair value of derivatives that economically hedge MSRs identified for sale. The total UPB of mortgage loans serviced, excluding subserviced loans, at June 30, 2020 and December 31, 2019 was $346,870,713 and $311,718,188, respectively. The portfolio primarily consists of high quality performing agency and government (FHA and VA) loans. As of June 30, 2020, delinquent loans (defined as 60-plus days past-due) were 3.71% of our total portfolio. During the third quarter of 2019, the Company sold MSRs with a book value of approximately $340,000 relating to certain single-family mortgage loans. Based on the contract terms, the sale of those MSRs did not qualify for sale accounting treatment under U.S. GAAP. As a result, the Company is required to retain the MSRs asset (i.e., MSRs collateral for financing liability) and the MSRs liability (i.e., MSRs financing liability) on the balance sheet until certain contractual provisions lapse after June 2020. These MSRs will continue to be reported on the balance sheet at fair value using a valuation methodology consistent with the Company’s method for valuing MSRs until those contractual provisions lapse. Furthermore, the net change in fair market value (“FMV”) of the MSRs asset and liability from this sale is captured within loan servicing (loss) income, net in the Condensed Combined Statements of Income and Comprehensive Income. During the second quarter of 2020, the Com pany had $14,911 of unrealized gains relating to the MSRs liability and an offsetting $14,911 of unrealized losses relating to the MSRs asset. Additionally, terms of the agreement require quarterly adjustments to the sales price for changes in prepayment rates at the time of sale for a period of one year. Depending on these prepayment speeds the Company may either receive or pay additional funds from this transaction. Furthermo re, in the first quarter of 2020, th e Company also sold MSRs with a book value of approximately $186,000 relating to certain single-family mortgage loans, which qualified for sale accounting treatment under U.S. GAAP. In the second quarter of 2020, the Company did not sell any MSRs. The following is a summary of the weighted average discount rate and prepayment speed assumptions used to determine the fair value of MSRs as well as the expected life of the loans in the servicing portfolio: June 30, December 31, Discount rate 10.0 % 10.0 % Prepayment speeds 19.2 % 14.5 % Life (in years) 4.14 5.33 The key assumptions used to estimate the fair value of MSRs are prepayment speeds and the discount rate. Increases in prepayment speeds generally have an adverse effect on the value of MSRs as the underlying loans prepay faster. In a declining interest rate environment, the fair value of MSRs generally decreases as prepayments increase and therefore, the estimated life of the MSRs and related cash flows decrease. Decreases in prepayment speeds generally have a positive effect on the value of MSRs as the underlying loans prepay less frequently. In a rising interest rate environment, the fair value of MSRs generally increases as prepayments decrease and therefore, the estimated life of the MSRs and related cash flows increase. Increases in the discount rate result in a lower MSR value and decreases in the discount rate result in a higher MSR value. MSR uncertainties are hypothetical and do not always have a direct correlation with each assumption. Changes in one assumption may result in changes to another assumption, which might magnify or counteract the uncertainties. The following table stresses the discount rate and prepayment speeds at two different data points: Discount Rate Prepayment Speeds 100 BPS Adverse Change 200 BPS Adverse Change 10% Adverse Change 20% Adverse Change June 30, 2020 Mortgage servicing rights $ (73,814) $ (142,774) $ (153,663) $ (298,727) December 31, 2019 Mortgage servicing rights $ (101,495) $ (195,894) $ (133,039) $ (259,346) |
Mortgage Loans Held for Sale
Mortgage Loans Held for Sale | 6 Months Ended |
Jun. 30, 2020 | |
Receivables [Abstract] | |
Mortgage Loans Held for Sale | Mortgage Loans Held for SaleThe Company sells substantially all of its originated mortgage loans into the secondary market. The Company may retain the right to service some of these loans upon sale through ownership of servicing rights. A reconciliation of the changes in mortgage loans held for sale to the amounts presented on the Combined Statements of Cash Flows is below: Six Months Ended 2020 2019 Balance at the beginning of period $ 13,275,735 $ 5,784,812 Disbursements of mortgage loans held for sale 122,056,424 53,244,712 Proceeds from sales of mortgage loans held for sale(1) (121,559,129) (51,504,181) Gain on sale of loans excluding fair value of MSRs, net(2) 3,855,505 863,403 Balance at the end of period $ 17,628,535 $ 8,388,746 _________________________ (1) The proceeds from sales of loans held for sale on the Combined Statement of Cash Flows includes amounts related to the sale of consumer loans. (2) The gain on sale of loans excluding MSRs, net presented on the Combined Statements of Cash Flows includes amounts related to the sale of consumer loans, interest rate lock commitments, forward commitments, and provisions for investor reserves. Credit Risk The Company is subject to credit risk associated with mortgage loans that it purchases and originates during the period of time prior to the sale of these loans. The Company considers credit risk associated with these loans to be insignificant as it holds the loans for a short period of time, which is, on average, approximately 17 days from the date of borrowing, and the market for these loans continues to be highly liquid. The Company is also subject to credit risk associated with mortgage loans it has repurchased as a result of breaches of representations and warranties during the period of time between repurchase and resale. |
Borrowings
Borrowings | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Borrowings | Borrowings The Company maintains several funding facilities and other non-funding debt as shown in the tables below. Interest rates are based on LIBOR (some have a floor) plus a spread, except for the $175,000 unsecured line of credit and the Senior Notes. The interest rate for each advance on the $175,000 unsecured line of credit is variable and is based on a margin over either a fixed one, two, or three-month LIBOR or a floating daily or 30 day LIBOR, or the lender’s prime rate, at the option of the Company. The commitment fee charged by lenders for each of the facilities is an annual fee and is calculated based on the committed line amount multiplied by a negotiated rate. The fee rate ranges from 0% to 0.75% among the facilities except for the Senior Notes, which has no commitment fee. The Company is required to maintain certain covenants, including minimum tangible net worth, minimum liquidity, maximum total debt or liabilities to net worth ratio, pretax net income requirements, and other customary debt covenants, as defined in the agreements. The Company was in compliance with all covenants as of June 30, 2020 and December 31, 2019. The amount owed and outstanding on the Company’s loan funding facilities fluctuates greatly based on its origination volume, the amount of time it takes the Company to sell the loans it originates, and the Company’s ability to use the cash to self-fund loans. In addition to self-funding, the Company may from time to time use surplus cash to “buy-down” the effective interest rate of certain loan funding facilities or to self-fund a portion of our loan originations. As of June 30, 2020, $429,914 of the Company’s cash was used to buy-down our funding facilities and self-fund, $265,000 of which are buy-down funds that are included in cash on the balance sheet and $164,914 of which is self-funding that reduces cash on the balance sheet. The Company has the right to withdraw the $265,000 at any time, unless a margin call has been made or a default has occurred under the relevant facilities. The Company has the right to transfer the $164,914 of self-funded loans on to a warehouse line or the early buy out line, provided that such loans meet the eligibility criteria to be placed on such warehouse line or the early buy out line and no default or margin call has been made on such line, the loans are further subject to any required haircuts, and are subject to its ability to borrow additional funds under the facility. A large, unanticipated margin call could have a material adverse effect on the Company’s liquidity. Furthermore, refer to Note 3, Mortgage Servicing Rights for additional information regarding the MSRs financing liability with the MSRs sold during the third quarter of 2019. The terms of the Senior Notes restrict our ability and the ability of our subsidiary guarantors among other things to: (i) incur additional debt or issue preferred stock; (ii) pay dividends or make distributions in respect of capital stock; (iii) purchase or redeem capital stock; (iv) make investments or other restricted payments; (v) sell assets; (vi) enter into transactions with affiliates; (vii) effect a consolidation or merger, taken as a whole; and (viii) designate our subsidiaries as unrestricted subsidiaries, unless certain conditions are met, as defined in the agreements. Funding Facilities Facility Type Collateral Maturity Line Amount Committed Line Amount Outstanding Balance June 30, 2020 Outstanding Balance December 31, 2019 MRA funding: 1) Master Repurchase Agreement(1)(10) Mortgage loans held for sale(9) 10/22/2021 $ 2,000,000 $ 100,000 $ 1,999,963 $ 835,302 2) Master Repurchase Agreement(2)(10) Mortgage loans held for sale(9) 12/3/2020 $ 1,750,000 $ 500,000 1,599,302 1,390,839 3) Master Repurchase Agreement(3)(10) Mortgage loans held for sale(9) 4/22/2022 $ 3,250,000 $ 1,000,000 2,476,494 2,622,070 4) Master Repurchase Agreement(4)(10) Mortgage loans held for sale(9) 9/16/2020 $ 1,500,000 $ 1,325,000 1,473,762 875,617 5) Master Repurchase Agreement(5)(10) Mortgage loans held for sale(9) 4/22/2021 $ 2,000,000 $ 500,000 1,270,770 2,063,099 6) Master Repurchase Agreement(6)(10) Mortgage loans held for sale(9) 9/5/2022 $ 1,500,000 $ 1,500,000 1,450,543 965,903 7) Master Repurchase Agreement(10) Mortgage loans held for sale(9) 10/15/2020 $ 1,500,000 $ 975,000 1,168,418 773,822 8) Master Repurchase Agreement(10) Mortgage loans held for sale(9) 6/12/2021 $ 400,000 $ — 397,653 — $ 13,900,000 $ 5,900,000 11,836,905 9,526,652 Early Funding: 9) Early Funding Facility(7)(11) Mortgage loans held for sale(9) See disclosure below $ 4,000,000 — 2,806,083 2,022,179 10) Early Funding Facility(8)(11) Mortgage loans held for sale(9) See disclosure below $ 2,500,000 — 1,042,872 493,047 $ 6,500,000 — 3,848,955 2,515,226 Total $ 20,400,000 $ 5,900,000 $ 15,685,860 $ 12,041,878 _________________________ (1) Subsequent to June 30, 2020 this facility was amended to temporarily increase the total line amount to $3,000,000 with $100,000 committed until September 10, 2020. Subsequent to September 10, 2020, the facility will drop to $2,000,000 with $100,000 committed. (2) This facility will have an overall line size of $1,750,000 with $500,000 committed until September 30, 2020. Subsequent to September 30, 2020, the facility will drop to $1,000,000 with $500,000 committed. (3) This facility will have an overall line size of $3,250,000 with $1,000,000 committed until December 31, 2020. Subsequent to December 31, 2020 , the facility will drop to $2,750,000 with $1,000,000 committed. (4) Subsequent to June 30, 2020, this facility was increased to $2,000,000 with $1,700,000 committed maturing July 26, 2021. This facility has a 12-month initial term, which can be extended for 3-months at each subsequent 3-month anniversary from the initial start date. (5) Subsequent to June 30, 2020, this facility was amended to increase the total line amount to $2,500,000 with $500,000 committed through facility maturity. (6) Subsequent to June 30, 2020, this facility was amended to temporarily increase the total line amount to $2,000,000 with $1,500,000 committed until December 30, 2020. Subsequent to December 30, 2020, the committed amount will drop to $1,000,000 while the total line amount will remain at $2,000,000. (7) This facility is an evergreen agreement with no stated termination or expiration date. This agreement can be terminated by either party upon written notice . (8) This facility will have an overall line size of $2,500,000, which will be reviewed every 90 days. This agreement is an evergreen agreement with no stated termination or expiration date. This agreement can be terminated by either party upon written notice. (9) The Company has multiple borrowing facilities in the form of asset sales under agreements to repurchase. These borrowing facilities are secured by mortgage loans held for sale at fair value as the first priority security interest. (10) The interest rates charged by lenders of the funding facilities under the Master Repurchase Agreements ranged from one-month LIBOR+1.23% to one-month LIBOR+2.30% for the six months ended June 30, 2020 and one-month LIBOR+1.20% to one-month LIBOR+2.30% for the year ended December 31, 2019. (11) The interest rates charged by lenders for the early funding facilities ranged from one-month LIBOR+0.40% to one-month LIBOR+1.00% for the six months ended June 30, 2020 and one-month LIBOR+0.40% to one-month LIBOR+0.85% for the year ended December 31, 2019. Other Financing Facilities Facility Type Collateral Maturity Line Amount Committed Line Amount Outstanding Balance June 30, 2020 Outstanding Balance December 31, 2019 Line of Credit Financing Facilities 1) Unsecured line of credit(1)(8) — 11/1/2024 $ 1,000,000 $ — $ — $ — 2) Unsecured line of credit(2)(8) — 2/28/2021 175,000 175,000 85,000 90,000 3) Unsecured line of credit(3) — 6/23/2025 50,000 — — — 4) Unsecured line of credit(3) — See disclosure below 10,000 — — — 5) Revolving credit facility(4) — See disclosure below — — — — 6) MSR line of credit(5)(9) MSRs 10/22/2021 200,000 — — — 7) MSR line of credit(6)(9) MSRs See disclosure below 200,000 200,000 75,000 75,000 $ 1,635,000 $ 375,000 $ 160,000 $ 165,000 Early Buyout Financing Facility 8) Early buy out facility(7)(10) Loans/ Advances 6/9/2021 $ 500,000 $ — $ 241,752 $ 196,247 _________________________ (1) This uncommitted, unsecure d Revolving Lo an Agreement is with RHI. Subsequent to June 30, 2020, this facility was amended to increase the total line amount to $2,000,000 and extend the maturity to July 27, 2025. (2) Subsequent to June 30, 2020, this facility was terminated at the borrower’s request and a portion of the commitment was rolled in the new revolving credit facility described below in footnote 4 below. (3) Refer to Note 6. Transactions with Related Parties for additional details regarding this unsecured line of credit (4) Subsequent to June 30, 2020, a new three-year revolving credit facility was closed. The $950,000 committed facility, which includes a syndicate of banks, expires on August 10, 2023. Subsequent to June 30, 2020, $300,000 was drawn. (5) This facility's uncommitted line amount is unavailable to draw. (6) This MSR facility can be drawn upon for corporate purposes and is collateralized by GSE MSRs within our servicing portfolio. This facility has a 5-year total commitment comprised of a 3-year revolving period that expires on April 30, 2022 followed by a 2-year amortization period that expires on April 30, 2024. (7) This facility provides funding for repurchasing delinquent loans from agency securities loan pools and servicer advances related to the repurchased loans. Effective January 30, 2020, this facility has an overall line size of $500,000 which can be increased to $600,000 at borrower’s request and lender’s acceptance. (8) The interest rates charged by lenders for the unsecured lines of credit financing facilities ranged from one-month LIBOR+1.25% to one-month LIBOR+2.00% for the six months ended June 30, 2020 and for the year ended December 31, 2019. (9) The interest rates charged by lenders for the MSR line of credit financing facility ranged from one-month LIBOR+2.25% to one-month LIBOR+4.00% for the six months ended June 30, 2020 and the year ended December 31, 2019. (10) The interest rate charged by lender for the Early buyout financing facility was one-month LIBOR+1.75% for the six months ended June 30, 2020 and for the year ended December 31, 2019. Unsecured Senior Notes Facility Type Maturity Interest Rate Outstanding Balance June 30, 2020 Outstanding Balance December 31, 2019 Unsecured Senior Notes(1) 5/1/2025 5.75 % $ 1,250,000 $ 1,250,000 Unsecured Senior Notes(2) 1/15/2028 5.25 % $ 1,010,000 $ 1,010,000 Total Senior Notes $ 2,260,000 $ 2,260,000 _________________________ (1) The 2025 Senior Notes are unsecured obligation notes with no asset required to pledge for this borrowing. Unamortized debt issuance costs are presented net against the Senior Notes reducing the $1,250,000 carrying amount on the balance sheet by $8,132 and $8,988 as of June 30, 2020 and December 31, 2019, respectively. At any time on or after May 1, 2020, the Company may redeem the note at its option, in whole or in part, upon not less than 30 nor more than 60 days notice, at the redemption prices equal to the percentage of principal amount set forth below plus accrued and unpaid interest, if any, to but excluding the redemption date, in cash, if redeemed during the twelve-month period beginning on May 1 in the years indicated below: Year Percentage Rest of 2020 102.875 % 2021 101.917 % 2022 100.958 % 2023 and thereafter 100.000 % (2) The 2028 Senior Notes are unsecured obligation notes with no asset required to pledge for this borrowing. Unamortized debt issuance costs and discounts are presented net against the Senior Notes reducing the $1,010,000 carrying amount on the balance sheet by $8,838 and $7,309 as of June 30, 2020, respectively and $9,421 and $7,800 as of December 31, 2019, respectively. At any time and from time to time on or after January 15, 2023, the Company may redeem the notes at its option, in whole or in part, upon not less than 30 nor more than 60 days notice, at the redemption prices equal to the percentage of principal amount set forth below plus accrued and unpaid interest, if any, to but excluding the redemption date, in cash, if redeemed during the twelve-month period beginning on January 15 in the years indicated below: Year Percentage 2023 102.625 % 2024 101.750 % 2025 100.875 % 2026 and thereafter 100.000 % Refer to Note 2, Fair Value Measurements for information pertaining to the fair value of the Company’s debt as of June 30, 2020 and December 31, 2019. |
Transactions with Related Parti
Transactions with Related Parties | 6 Months Ended |
Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |
Transactions with Related Parties | Transactions with Related Parties The Company has entered into various transactions and agreements with RHI, its subsidiaries, certain other affiliates and related parties (collectively, “Related Parties”). These transactions include providing financing and services as well as obtaining financing and services from these Related Parties. Financing Arrangements On January 6, 2017, the Company entered into a $55,983 promissory note with one of the Company’s shareholders (“Shareholder’s Note”). In 2019, the Shareholder’s Note was amended and the accrued interest balance of $1,474 was added to the principal outstanding, increasing the total principal outstanding to $57,457, due on December 31, 2020. In March 2020, the full amount of this note was settled in cash and is no longer outstanding. As of December 31, 2019, there were other promissory notes outstanding with Related Parties. These notes were settled in full as of June 30, 2020. On June 9, 2017, Rocket Mortgage and RHI entered into a $300,000 uncommitted and unsecured line of credit (“RHI Line of Credit”). On December 24, 2019 the Company amended the RHI Line of Credit and increased the borrowing capacity to $1,000,000, due on November 1, 2024. Borrowings under the line of credit bear interest at a rate per annum of one month LIBOR plus 1.25%. The line of credit is uncommitted and RHI has sole discretion over advances. The RHI Line of Credit also contains negative covenants which restrict the ability of the Company to incur debt and create liens on certain assets. It also requires the Company to maintain a quarterly combined net income before taxes if adjusted tangible net worth meets certain requirements. At quarter ended June 30, 2020 and the year ended December 31, 2019, there were no outstanding amounts due to RHI pursuant to the RHI Line of Credit. Subsequent to June 30, 2020, the Company amended the RHI Line of Credit and increased the borrowing capacity to $2,000,000, due on July 27, 2025. On January 10, 2019, RockLoans Opportunities LLC and RHI Opportunities, a subsidiary of RHI, entered into a $10,000 agreement for a perpetual uncommitted, unsecured line of credit (“RHIO Line of Credit”), which provides for financing from RHI Opportunities to the Company. Borrowings under the line of credit bear interest at a rate per annum of 5.00%. The line of credit is uncommitted and RHI has sole discretion over advances. The principal amount of all borrowings is payable in full on demand by RHI Opportunities. The RHIO Line of Credit also contains negative covenants that restrict the ability of RockLoans Opportunities to incur debt in excess of $500 and creates liens on certain assets other than liens securing permitted debt. On June 23, 2020, Rock Central LLC and RHI Opportunities, a subsidiary of RHI, entered into an additional agreement for an uncommitted, unsecured revolving line of credit ("RHIO 2nd Line of Credit"), which provides for financing from RHI Opportunities to the Company of up to $50,000. The line of credit matures on June 23, 2025. Borrowings under the line of credit bear interest at a rate per annum of one month LIBOR plus 1.25%. The negative covenants of the line of credit restrict the ability of the Company to incur debt and create liens on certain assets. The line of credit also contains customary events of default. Subsequent to June 30, 2020, the RKT Holdings, LLC and RHI entered into another agreement for an uncommitted, unsecured revolving line of credit ("RHI 2nd Line of Credit’’), which will provide for financing from RHI to the Company of up to $100,000. The line of credit will mature on July 31, 2025. Borrowings under the line of credit will bear interest at a rate per annum of one month LIBOR plus 1.25%. The negative covenants of the line of credit restrict the ability of the Company to incur debt and create liens on certain assets. The line of credit also contains customary events of default. The amounts receivable from and payable to Related Parties consisted of the following as of: June 30, 2020 December 31, 2019 Principal Interest Rate(1) Principal Interest Rate(1) Included in Notes receivable and due from affiliates on the Condensed Combined Balance Sheets Promissory Note—Shareholders Note $ — — $ 57,457 2.38 % Affiliated receivables and other notes 17,028 — 32,489 — Notes receivable and due from affiliates $ 17,028 $ 89,946 Included in Notes payable and due to affiliates on the Condensed Combined Balance Sheets RHIO Line of Credit $ 9,000 5.00 % $ 10,000 5.00 % Affiliated payables 52,192 — 25,082 — Notes payable and due to affiliates $ 61,192 $ 35,082 _________________________ (1) Interest incurred and accrued is based on a margin over 30-day LIBOR as of the date of advance. Services, Products and Other Transactions We have entered into transactions and agreements to provide certain services to RHI, its subsidiaries and certain other affiliates of our majority shareholder. We recognized revenue of $1,920 and $2,283 in the three months ended June 30, 2020 and 2019, respectively, and revenue of $3,755 and $3,887 in the six months ended June 30, 2020 and 2019, respectively, for the performance of these services, which was included in other income. Related Party receivables were $17,028 and $29,431 as of June 30, 2020 and December 31, 2019, respectively. We have also entered into transactions and agreements to purchase certain services, products and other transactions from certain subsidiaries of RHI and affiliates of our majority shareholder. We incurred expenses of $23,258 and $12,706 in the three months ended June 30, 2020 and 2019, respectively and expenses of $38,181 and $21,276 in the six months ended June 30, 2020 and 2019, respectively, for these products, services and other transactions, which are included in general and administrative expenses. Related party payables, which is recorded in notes payable and due to affiliates, were $52,192 and $25,082 as of June 30, 2020 and December 31, 2019, respectively. Lease Transactions with Related Parties The Company is a party to lease agreements for certain offices, including our headquarters in Detroit, with various affiliates of Bedrock Management Services LLC (“Bedrock”), a related party, and other related parties of the Company. During t he three mon ths ended June 30, 2020 and 2019, we incurred expenses totaling $17,560 and $17,380, respectively, and for the six months ended June 30, 2020 and 2019, we incurred expenses totaling $33,957 and $34,775, respectively, for these properties. |
Other Assets
Other Assets | 6 Months Ended |
Jun. 30, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Assets | Other Assets Other assets consist of the following: June 30, December 31, 2020 2019 Margin call receivable from counterparty $ 195,932 $ 3,697 Mortgage production related receivables 154,225 157,276 Disbursement funds advanced 82,391 56,721 Non-production-related receivables 64,456 35,530 Prepaid expenses 61,387 62,199 Ginnie Mae buyouts 59,961 78,174 Goodwill and other intangible assets 38,079 40,261 Other real estate owned 1,653 1,619 Other 56,705 64,181 Total other assets $ 714,789 $ 499,658 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The components of income (loss) tax expense (benefit) were as follows: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Total income before income (loss) taxes and non-controlling interest $ 3,481,880 $ (54,259) $ 3,579,896 $ (354,608) Total provision for (benefit from) income taxes $ 20,669 $ (283) $ 21,405 $ (1,287) Effective tax provision rate 0.59 % 0.52 % 0.60 % 0.36 % The Combined Businesses of the Company is comprised of qualified Subchapter S subsidiary corporations and single member LLCs, which are generally not subject to U.S. Federal or state income taxes. Accordingly, its operating results are included in the income tax returns of its shareholders. However, certain states in which the Company operates have entity-level income taxes that are not passed to the shareholders. Accordingly, income tax expense is accrued for such entity-level income taxes. For interim tax reporting, we estimate one single effective tax rate for tax jurisdictions not subject to a valuation allowance, which is applied to the year-to-date ordinary income/(loss). Tax effects of significant unusual or infrequently occurring items are excluded from the estimated annual effective tax rate calculation and recognized in the interim period in which they occur. |
Derivative Financial Instrument
Derivative Financial Instruments | 6 Months Ended |
Jun. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial Instruments The Company enters into interest rate lock commitments (“IRLCs”), forward commitments to sell mortgage loans and forward commitments to purchase loans, which are considered derivative financial instruments. These items are accounted for as free-standing derivatives and are included in the condensed combined balance sheets at fair value. The Company treats all of its derivative instruments as economic hedges; therefore, none of its derivative instruments qualify for designation as accounting hedges. Changes in the fair value of the IRLCs and forward commitments to sell mortgage loans are recorded in current period earnings and are included in gain on sale of loans, net in the Condensed Combined Statements of Income and Comprehensive Income. Forward commitments to purchase mortgage loans are recognized in current period earnings and are included in gain on sale of loans in the Condensed Combined Statements of Income and Comprehensive Income. The Company enters into IRLCs to fund residential mortgage loans with its potential borrowers. These commitments are binding agreements to lend funds to these potential borrowers at specified interest rates within specified periods of time. The fair value of IRLCs is derived from the fair value of similar mortgage loans or bonds, which is based on observable market data. Changes to the fair value of IRLCs are recognized based on changes in interest rates, changes in the probability that the commitment will be exercised, and the passage of time. The expected net future cash flows related to the associated servicing of the loan are included in the fair value measurement of rate locks. IRLCs and uncommitted mortgage loans held for sale expose the Company to the risk that the value of the mortgage loans held and mortgage loans underlying the commitments may decline due to increases in mortgage interest rates during the life of the commitments. To protect against this risk, the Company uses forward loan sale commitments to economically hedge the risk of potential changes in the value of the loans. These derivative instruments are recorded at fair value. The Company expects that the changes in fair value of these derivative financial instruments will either fully or partially offset the changes in fair value of the IRLCs and uncommitted mortgage loans held for sale. The changes in the fair value of these derivatives are recorded in gain on sale of loans, net. MSR assets (including the MSR value associated with outstanding IRLCs) that the Company plans to sell expose the Company to the risk that the value of the MSR asset may decline due to decreases in mortgage interest rates prior to the sale of these assets. To protect against this risk, the Company uses forward loan purchase commitments to economically hedge the risk of potential changes in the value of MSR assets that have been identified for sale. These derivative instruments are recorded at fair value. The Company expects that the changes in fair value of these derivative financial instruments will either fully or partially offset the changes in fair value of the MSR assets the Company intends to sell. The changes in fair value of these derivatives are recorded in the change in fair value of MSRs, net. Forward commitments include to be announced (“TBA”) mortgage backed securities that have been aggregated at the counterparty level for presentation and disclosure purposes. Counterparty agreements contain a legal right to offset amounts due to and from the same counterparty under legally enforceable master netting agreements to settle with the same counterparty, on a net basis, as well as the right to obtain cash collateral. Forward commitments also include commitments to sell loans to counterparties and to purchase loans from counterparties at determined prices. Refer to Note 9, Derivative Financial Instruments for further information. The Company uses forward commitments in hedging the interest rate risk exposure on its fixed and adjustable rate commitments. Utilization of forward commitments involves some degree of basis risk. Basis risk is defined as the risk that the hedged instrument’s price does not move in parallel with the increase or decrease in the market price of the hedged financial instrument. The Company calculates an expected hedge ratio to mitigate a portion of this risk. The Company’s derivative instruments are not designated as accounting hedging instruments, and therefore, changes in fair value are recorded in current period earnings. Hedging gains and losses are included in gain on sale of loans, net in the Combined Statements of Income and Comprehensive Income. Net hedging losses were as follows: Three Months Ended June 30, Six months ended June 30, 2020(1) 2019 2020(1) 2019 Hedging losses $ (510,804) $ (598) $ (1,507,788) $ (34,453) _________________________ (1) Includes the change in fair value related to derivatives economically hedging MSRs identified for sale. Refer to Note 2, Fair Value Measurements , for additional information on the fair value of derivative financial instruments. Notional and Fair Value The notional and fair values of derivative financial instruments not designated as hedging instruments were as follows: Notional Value Derivative Asset Derivative Liability Balance at June 30, 2020: IRLCs, net of loan funding probability(1) $ 46,035,933 $ 2,393,764 $ — Forward commitments(2) $ 57,969,480 $ 6,328 $ 351,261 Balance at December 31, 2019: IRLCs, net of loan funding probability(1) $ 15,439,960 $ 508,135 $ — Forward commitments(2) $ 26,637,275 $ 3,838 $ 43,794 ________________________ (1) IRLCs are also discussed in Note 10, Commitments, Contingencies, and Guarantees. (2) Includes the fair value and notional value related to derivatives economically hedging MSRs identified for sale. Counterparty agreements for forward commitments contain master netting agreements. The table below presents the gross amounts of recognized assets and liabilities subject to master netting agreements. The Company had $195,932 and $3,697 of cash pledged to counterparties related to these forward commitments at June 30, 2020 and December 31, 2019, respectively, classified in other assets in the Condensed Combined Balance Sheets. As of June 30, 2020 and December 31, 2019, there was no cash on our balance sheet from the respective counterparties. Margins received by the Company are classified in other liabilities in the Condensed Combined Balance Sheets. Gross Amount of Recognized Assets or Liabilities Gross Amounts Offset in the Condensed Combined Balance Sheet Net Amounts Presented in the Condensed Combined Balance Sheet Offsetting of Derivative Assets Balance at June 30, 2020: Forward commitments $ 15,786 $ (9,458) $ 6,328 Balance at December 31, 2019: Forward commitments $ 6,690 $ (2,852) $ 3,838 Offsetting of Derivative Liabilities Balance at June 30, 2020: Forward commitments $ (555,239) $ 203,978 $ (351,261) Balance at December 31, 2019: Forward commitments $ (89,389) $ 45,595 $ (43,794) Counterparty Credit Risk Credit risk is defined as the possibility that a loss may occur from the failure of another party to perform in accordance with the terms of the contract, which exceeds the value of existing collateral, if any. The Company attempts to limit its credit risk by dealing with creditworthy counterparties and obtaining collateral where appropriate. The Company is exposed to credit loss in the event of contractual nonperformance by its trading counterparties and counterparties to its various over-the-counter derivative financial instruments noted in the above Notional and Fair Value discussion. The Company manages this credit risk by selecting only counterparties that it believes to be financially strong, spreading the credit risk among many such counterparties, placing contractual limits on the amount of unsecured credit extended to any single counterparty, and entering into netting agreements with the counterparties as appropriate. The master netting agreements contain a legal right to offset amounts due to and from the same counterparty. Derivative assets in the Condensed Combined Balance Sheets represent derivative contracts in a gain position net of loss positions with the same counterparty and, therefore, also represent the Company’s maximum counterparty credit risk. The Company incurred no credit losses due to nonperformance of any of its counterparties during the six months ended June 30, 2020 and 2019. |
Commitments, Contingencies, and
Commitments, Contingencies, and Guarantees | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments, Contingencies, and Guarantees | Commitments, Contingencies, and Guarantees Interest Rate Lock Commitments IRLCs are agreements to lend to a client as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. The Company evaluates each client’s creditworthiness on a case-by-case basis. The number of days from the date of the IRLC to expiration of fixed and variable rate lock commitments outstanding at June 30, 2020 and December 31, 2019 was approximately 44 days on average. The UPB of IRLCs was as follows: June 30, 2020 December 31, 2019 Fixed Rate Variable Rate Fixed Rate Variable Rate IRLCs $ 60,868,152 $ 1,299,825 $ 20,577,282 $ 974,693 Commitments to Sell Mortgage Loans In the ordinary course of business, the Company enters into contracts to sell existing mortgage loans held for sale into the secondary market at specified future dates. The amount of commitments to sell existing loans at June 30, 2020 and December 31, 2019 was $4,106,301 and $2,859,710, respectively. Commitments to Sell Loans with Servicing Released In the ordinary course of business, the Company enters into contracts to sell the MSRs of certain newly originated loans on a servicing released basis. In the event that a forward commitment is not filled and there has been an unfavorable market shift from the date of commitment to the date of settlement, the Company is contractually obligated to pay a pair-off fee on the undelivered balance. There were $2,747 and $78,446 of loans committed to be sold servicing released at June 30, 2020 and December 31, 2019, respectively. Investor Reserves The following presents the activity in the investor reserves: Three Months Ended Six Months Ended 2020 2019 2020 2019 Balance at beginning of period $ 55,667 $ 56,645 $ 54,387 $ 56,943 Provision for (benefit from) investor reserves 7,786 (1,145) 9,363 (652) Premium recapture and indemnification losses paid (441) (258) (738) (1,049) Balance at end of period $ 63,012 $ 55,242 $ 63,012 $ 55,242 The maximum exposure under the Company’s representations and warranties would be the outstanding principal balance and any premium received on all loans ever sold by the Company, less any loans that have already been paid in full by the mortgagee, that have defaulted without a breach of representations and warranties, that have been indemnified via settlement or make-whole, or that have been repurchased. Additionally, the Company may receive relief of certain representation and warranty obligations on loans sold to Fannie Mae or Freddie Mac on or after January 1, 2013 if Fannie Mae or Freddie Mac satisfactorily concludes a quality control loan file review or if the borrower meets certain acceptable payment history requirements within 12 or 36 months after the loan is sold to Fannie Mae or Freddie Mac. Property Taxes, Insurance, and Principal and Interest Payable As a service to its clients, the Company administers escrow deposits representing undisbursed amounts received for payment of property taxes, insurance and principal, and interest on mortgage loans held for sale. Cash held by the Company for property taxes and insurance was $4,139,441 and $2,617,016, and for principal and interest was $9,834,764 and $6,726,793 at June 30, 2020 and December 31, 2019, respectively. These amounts are not considered assets of the Company and, therefore, are excluded from the Condensed Combined Balance Sheets. The Company remains contingently liable for the disposition of these deposits. Guarantees As of June 30, 2020 and December 31, 2019, the Company guaranteed the debt of another related party totaling $15,000, consisting of three separate guarantees of $5,000 each. As of June 30, 2020 and December 31, 2019, the Company did not record a liability on the Condensed Combined Balance Sheets for these guarantees because it was not probable that the Company would be required to make payments under these guarantees. Trademark License The Company has a perpetual trademark license agreement with a third-party entity. This agreement requires annual payments by the Company based upon the income from the sale of loans generated under the Quicken Loans brand. Total licensing fees incurred and paid were $1,875 for each of the three months ended June 30, 2020 and 2019, and $3,750 for the six months ended June 30, 2020 and 2019, which is the maximum amount allowable under the contract for the periods indicated and is classified in other expenses in the Condensed Combined Statements of Income and Comprehensive Income. Legal Rocket Companies, among other things, engages in mortgage lending, title and settlement services, and other financial technology services. Rocket Companies operates in a highly regulated industry and is routinely subject to various legal and administrative proceedings concerning matters that arise in the normal and ordinary course of business, including inquires, complaints, subpoenas, audits, examinations, investigations and potential enforcement actions from regulatory agencies and state attorney generals; state and federal lawsuits and putative class actions; and other litigation. Periodically, we assess our potential liabilities and contingencies in connection with outstanding legal and administrative proceedings utilizing the latest information available. While it is not possible to predict the outcome of any of these matters, based on our assessment of the facts and circumstances, we do not believe any of these matters, individually or in the aggregate, will have a material adverse effect on our financial position, results of operations or cash flows. However, actual outcomes may differ from those expected and could have a material effect on our financial position, results of operations or cash flows in a future period. Rocket Companies accrues for losses when they are probable to occur and such losses are reasonably estimable. Legal costs expected to be incurred are accounted for as they are incurred. In 2018 an initial judgment was entered against the Quicken Loans and Amrock, formerly known as Title Source, Inc., for a certified class action lawsuit filed in the U.S. District Court of the Northern District of West Virginia. The lawsuit alleged that the defendants violated West Virginia state law by unconscionably inducing them (and a class of other West Virginians who received loans through Quicken Loans and appraisals through Amrock) into loans by including the borrower’s own estimated home values on appraisal order forms. The judge has ruled in favor of the plaintiffs on liability and the case is currently on appeal to the U.S. Court of Appeals for the Fourth Circuit. Quicken Loans and Amrock believe an unfavorable outcome to be reasonably possible but not probable based on rulings by the court, advice of counsel, their respective defenses, and other developments with an aggregate possible range of loss to be between zero and $15,000. Quicken Loans is also defending itself against five putative Telephone Consumer Protection Act (“TCPA”) class action lawsuits. Quicken Loans denies the allegations in these cases and intends to vigorously defend itself. Quicken Loans has filed, or intends to file, a dispositive motion in each of these matters which, if granted, would result in a finding of no liability. Quicken Loans does not believe a loss is probable; therefore, no reserve has been recorded related to these matters. A range of possible loss cannot be estimated with any degree of reasonable certainty. Amrock is currently involved in civil litigation related to a business dispute between Amrock and HouseCanary, Inc. (“HouseCanary”). The lawsuit was filed on April 12, 2016, by Amrock—Title Source, Inc. v. HouseCanary, Inc., No. 2016-CI-06300 (37th Civil District Court, San Antonio, Texas)—and included claims against HouseCanary for breach of contract and fraudulent inducement stemming from a contract between Amrock and HouseCanary whereby HouseCanary was obligated to provide Amrock with appraisal and valuation software and services. HouseCanary filed counterclaims against Amrock for, among other things, breach of contract, fraud, and misappropriation of trade secrets. On March 14, 2018, following trial of the claims in the lawsuit, a Bexar County, Texas, jury awarded $706,200 in favor of HouseCanary and rejected Amrocks’ claims against HouseCanary. The district court entered judgment in favor of HouseCanary and against Amrock for an aggregate of $739,600 (consisting of $235,400 in actual damages; $470,800 in punitive damages; $28,900 in prejudgment interest; and $4,500 in attorney fees). On appeal (No. 04-19-00044-CV, Fourth Court of Appeals, San Antonio, Texas), the court of appeals affirmed judgment of no-cause on Amrock’s claim for breach of contract, but reversed judgment on HouseCanary’s misappropriation of trade secrets and fraud claims and remanded the case for a new trial on HouseCanary’s claims. It is possible that one (or both) of the parties could seek additional appellate review of the court of appeals’ decision. The outcome of this matter remains uncertain, and the ultimate resolution of the litigation may be several years in the future. If the case is tried again, Amrock intends to present new evidence, including evidence revealed by whistleblowers who came forward with evidence that undermined HouseCanary’s claims after the conclusion of the original trial, and to vigorously defend against this case and any subsequent actions. Quicken Loans and Rocket Homes are defending themselves against a tagalong lawsuit filed by HouseCanary that also includes claims for misappropriation of trade secrets. That case is in its early stages and is stayed pending a resolution of Quicken Loans’ and Rocket Homes’ dispositive motion. In addition to the matters described above, Rocket Companies are subject to other legal proceedings arising from the ordinary course of business. The ultimate outcome of these or other actions or proceedings, including any monetary awards against the companies, is uncertain and there can be no assurance as to the amount of any such potential awards. There are no recorded reserves related to potential damages in connection with any of the above legal proceedings, as any potential loss is not currently probable and reasonably estimable under U.S. GAAP. The ultimate outcome of these or other actions or proceedings, including any monetary awards against one or more of the Rocket Companies, is uncertain and there can be no assurance as to the amount of any such potential awards. The Rocket Companies will incur defense costs and other expenses in connection with the lawsuits. Plus, if a judgment for money that exceeds specified thresholds is rendered against a Rocket Company or Rocket Companies and it or they fail to timely pay, discharge, bond or obtain a stay of execution of such judgment, it is possible that one or more of the Rocket Companies could be deemed in default of loan funding facilities and other agreements governing indebtedness. If the final resolution of any such litigation is unfavorable in one or more of these actions, it could have a material adverse effect on a Rocket Company’s or the Rocket Companies’ business, liquidity, financial condition, cash flows and results of operations. |
Minimum Net Worth Requirements
Minimum Net Worth Requirements | 6 Months Ended |
Jun. 30, 2020 | |
Mortgage Banking [Abstract] | |
Minimum Net Worth Requirements | Minimum Net Worth Requirements Certain secondary market investors and state regulators require the Company to maintain minimum net worth and capital requirements. To the extent that these requirements are not met, secondary market investors and/or the state regulators may utilize a range of remedies including sanctions, and/or suspension or termination of selling and servicing agreements, which may prohibit the Company from originating, securitizing or servicing these specific types of mortgage loans. Rocket Mortgage is subject to the following minimum net worth, minimum capital ratio and minimum liquidity requirements established by the Federal Housing Finance Agency (“FHFA”) for Fannie Mae and Freddie Mac Seller/Servicers, and Ginnie Mae for single family issuers. Furthermore, refer to Note 5, Borrowings for additional information regarding compliance with all covenant requirements. Minimum Net Worth The minimum net worth requirement for Fannie Mae and Freddie Mac is defined as follows: • Base of $2,500 plus 25 basis points of outstanding UPB for total loans serviced. • Adjusted/Tangible Net Worth comprises of total equity less goodwill, intangible assets, affiliate receivables and certain pledged assets. The minimum net worth requirement for Ginnie Mae is defined as follows: • Base of $2,500 plus 35 basis points of the issuer’s total single-family effective outstanding obligations. • Adjusted/Tangible Net Worth is defined as total equity less goodwill, intangible assets, affiliate receivables and certain pledged assets. Effective for fiscal year 2020, under the Ginnie Mae MBS Guide, the issuers will no longer be permitted to include deferred tax assets when computing the minimum net worth requirements. Minimum Capital Ratio • For Fannie Mae, Freddie Mac and Ginnie Mae the Company is also required to hold a ratio of Adjusted/Tangible Net Worth to Total Assets greater than 6%. Minimum Liquidity The minimum liquidity requirement for Fannie Mae and Freddie Mac is defined as follows: • 3.5 basis points of total Agency servicing. • Incremental 200 basis points of total nonperforming Agency, measured as 90+ delinquencies, servicing in excess of 6% of the total Agency servicing UPB. • Allowable assets for liquidity may include: cash and cash equivalents (unrestricted), available for sale or held for trading investment grade securities (e.g., Agency MBS, Obligations of GSEs, US Treasury Obligations); and unused/available portion of committed servicing advance lines. The minimum liquidity requirement for Ginnie Mae is defined as follows: • Maintain liquid assets equal to the greater of $1,000 or 10 basis points of our outstanding single-family MBS. The most restrictive of the minimum net worth and capital requirements require the Company to maintain a minimum adjusted net worth balance of $1,698,906 and $1,179,928 as of June 30, 2020 and December 31, 2019, respectively. As of June 30, 2020 and December 31, 2019, the Company was in compliance with this requirement. |
Segments
Segments | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Segments | Segments The Company’s Chief Executive Officer, who has been identified as its Chief Operating Decision Maker (“CODM”), has evaluated how the Company views and measures its performance. ASC 280, Segment Reporting establishes the standards for reporting information about segments in financial statements. In applying the criteria set forth in that guidance, the Company has determined that it has two reportable segments—Direct to Consumer and Partner Network. The key factors used to identify these reportable segments are the organization and alignment of the Company’s internal operations and the nature of its marketing channels which drive client acquisition into the mortgage ecosystem. This determination reflects how its CODM monitors performance, allocates capital and makes strategic and operational decisions. The Company’s segments are described as follows: Direct to Consumer In the Direct to Consumer segment, clients have the ability to interact with the Rocket Mortgage app and/or with the Company’s mortgage bankers. The Company markets to potential clients in this segment through various performance marketing channels. The Direct to Consumer segment derives revenue from originating, closing, selling and servicing predominantly agency-conforming loans, which are pooled and sold to the secondary market. This also includes providing title insurance services, appraisals and settlement services to these clients as part of the Company’s end-to-end mortgage origination experience it provides to its clients. Servicing activities are fully allocated to the Direct to Consumer segment as they are viewed as an extension of the client experience with the primary objective being to establish and maintain positive, regular touchpoints with our clients, which positions the Company to recapture the clients’ next refinance or purchase mortgage transaction. These activities position the Company to be the natural choice for clients’ next refinance or purchase transaction. Partner Network The Rocket Pro platform supports the Partner Network segment and enables the ability to offer mortgage solutions with a superior client experience. The Company’s two primary types of partnerships are marketing and influencer. Marketing partnerships consist of well-known, consumer-focused companies that find value in the Company’s award-winning client experience and want to offer their clients mortgage solutions with our trusted, widely recognized brand. Influencer partnerships are typically with companies that employ licensed mortgage professionals who find value in our client experience, technology and efficient mortgage process. In some cases, mortgages are not their primary offering. Other Information About Our Segments The Company does not allocate assets to its reportable segments as they are not included in the review performed by the CODM for purposes of assessing segment performance and allocating resources. The balance sheet is managed on a consolidated basis and is not used in the context of segment reporting. The Company also reports an “all other” category that includes operations from Rocket Homes, Rock Connections, Core Digital Media, Rocket Loans, and includes professional service fee revenues from related parties. These operations are neither significant individually nor in aggregate and therefore do not constitute a reportable segment. Key operating data for our business segments for the three months ended: Three Months Ended Direct to Consumer Partner Network Segments Total All Other Total Revenues Gain on sale $ 4,020,492 $ 734,662 $ 4,755,154 $ (1,570) $ 4,753,584 Interest income 51,012 26,376 77,388 651 78,039 Interest expense on funding facilities (35,397) (18,302) (53,699) (57) (53,756) Servicing fee income 248,873 — 248,873 969 249,842 Changes in fair value of MSRs (552,843) — (552,843) — (552,843) Other income 206,538 39,859 246,397 315,868 562,265 Total U.S. GAAP Revenue $ 3,938,675 $ 782,595 $ 4,721,270 $ 315,861 $ 5,037,131 Plus: Decrease in MSRs due to valuation assumptions 274,377 — 274,377 — 274,377 Adjusted revenue $ 4,213,052 $ 782,595 $ 4,995,647 $ 315,861 $ 5,311,508 Directly attributable expenses 948,900 139,140 1,088,040 128,463 1,216,503 Contribution margin $ 3,264,152 $ 643,455 $ 3,907,607 $ 187,398 $ 4,095,005 Six Months Ended Direct to Consumer Partner Network Segments Total All Other Total Revenues Gain on sale $ 5,631,324 $ 938,109 $ 6,569,433 $ 6,260 $ 6,575,693 Interest income 98,322 51,947 150,269 1,812 152,081 Interest expense on funding facilities (60,782) (32,023) (92,805) (410) (93,215) Servicing fee income 504,863 — 504,863 2,072 506,935 Changes in fair value of MSRs (1,544,095) — (1,544,095) — (1,544,095) Other income 351,561 59,469 411,030 395,537 806,567 Total U.S. GAAP Revenue $ 4,981,193 $ 1,017,502 $ 5,998,695 $ 405,271 $ 6,403,966 Plus: Decrease in MSRs due to valuation assumptions 1,017,704 — 1,017,704 — 1,017,704 Adjusted revenue $ 5,998,897 $ 1,017,502 $ 7,016,399 $ 405,271 $ 7,421,670 Directly attributable expenses 1,729,520 231,084 1,960,604 176,750 2,137,354 Contribution margin $ 4,269,377 $ 786,418 $ 5,055,795 $ 228,521 $ 5,284,316 Three Months Ended Direct to Consumer Partner Network Segments Total All Other Total Revenues Gain on sale $ 997,707 $ 101,918 $ 1,099,625 $ 12,834 $ 1,112,459 Interest income 38,930 21,842 60,772 813 61,585 Interest expense on funding facilities (20,585) (11,374) (31,959) (471) (32,430) Servicing fee income 240,002 — 240,002 253 240,255 Changes in fair value of MSRs (598,262) — (598,262) — (598,262) Other income 98,747 3,255 102,002 51,936 153,938 Total U.S. GAAP Revenue $ 756,539 $ 115,641 $ 872,180 $ 65,365 $ 937,545 Plus: Decrease in MSRs due to valuation assumptions 391,348 — 391,348 — 391,348 Adjusted revenue $ 1,147,887 $ 115,641 $ 1,263,528 $ 65,365 $ 1,328,893 Directly attributable expenses 606,186 59,131 665,317 49,808 715,125 Contribution margin $ 541,701 $ 56,510 $ 598,211 $ 15,557 $ 613,768 Six Months Ended Direct to Consumer Partner Network Segments Total All Other Total Revenues Gain on sale $ 1,663,481 $ 152,044 $ 1,815,525 $ 24,180 $ 1,839,705 Interest income 73,330 33,878 107,208 1,429 108,637 Interest expense on funding facilities (37,807) (17,400) (55,207) (836) (56,043) Servicing fee income 463,345 — 463,345 1,516 464,861 Changes in fair value of MSRs (1,073,963) — (1,073,963) — (1,073,963) Other income 175,466 9,834 185,300 100,820 286,120 Total U.S. GAAP Revenue $ 1,263,852 $ 178,356 $ 1,442,208 $ 127,109 $ 1,569,317 Plus: Decrease in MSRs due to valuation assumptions 712,327 — 712,327 — 712,327 Adjusted revenue $ 1,976,179 $ 178,356 $ 2,154,535 $ 127,109 $ 2,281,644 Directly attributable expenses 1,150,475 102,119 1,252,594 90,915 1,343,509 Contribution margin $ 825,704 $ 76,237 $ 901,941 $ 36,194 $ 938,135 The following table represents a reconciliation of segment contribution margin to combined U.S. GAAP income before taxes for the three months ended: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Contribution margin, excluding change in MSRs due to valuation assumptions $ 4,095,005 $ 613,768 $ 5,284,316 $ 938,135 Decrease in MSRs due to valuation assumptions (274,377) (391,348) (1,017,704) (712,327) Contribution margin, including change in MSRs due to valuation assumptions $ 3,820,628 $ 222,420 $ 4,266,612 $ 225,808 Less expenses not allocated to segments : Salaries, commissions and team member benefits $ 205,100 $ 140,587 403,950 292,409 General and administrative expenses 90,231 85,223 188,991 184,332 Depreciation and amortization 16,189 17,687 32,304 35,792 Interest and amortization expense on non-funding debt 33,168 33,086 66,275 66,168 Other expenses (5,940) 96 (4,804) 1,715 Income (loss) before income taxes $ 3,481,880 $ (54,259) $ 3,579,896 $ (354,608) |
Business, Basis of Presentati_2
Business, Basis of Presentation, and Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The Combined Businesses have historically operated as part of RHI and not as a stand alone entity. The condensed combined financial statements represent the results of operations, financial position, cash flows and changes in equity of the subsidiaries of RHI mentioned above, prepared on a stand-alone basis and have been derived from the consolidated financial statements and accounting records of RHI. All revenues and expenses as well as assets and liabilities that are either legally attributable to us or directly associated with our business activities are included in the condensed combined financial statements. Net parent investment represents RHI’s interest in the recorded net assets of the Company. All significant transactions between the Company and RHI have been included in the accompanying condensed combined financial statements and are reflected in the accompanying Condensed Combined Statements of Changes in Equity as “Net transfers to/from parent” and in the accompanying Condensed Combined Balance Sheets within “Net parent investment.” All significant intercompany transactions and accounts between the businesses comprising the Company have been eliminated in the accompanying condensed combined financial statements. Our condensed combined financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All transactions and accounts between RHI and the Company have a history of settlement or are expected to be settled for cash, and are reflected as related party transactions. For further details of the Company’s related party transactions refer to Note 6, Transactions with Related Parties . The condensed combined financial statements may not include all of the expenses that would have been incurred had we been a stand-alone company during the periods presented and may not reflect our condensed combined results of operations, financial position and cash flows had we been a stand-alone company during the periods presented. The amount of actual expenses that would have been incurred if we had operated as a stand alone company would depend on a number of factors, including our chosen organizational structure. We also may incur additional costs associated with being a stand-alone, publicly listed company that were not included in the expense allocations and, therefore, would result in additional costs that are not reflected in our historical statements of income and comprehensive income, balance sheets and cash flows. |
Management Estimates | Management Estimates The preparation of condensed combined financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the condensed combined financial statements and the reported amounts of revenues and expenses during the reporting period. Although management is not currently aware of any factors that would significantly change its estimates and assumptions, actual results may differ from these estimates. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash Restricted cash as of June 30, 2020 and 2019 consisted of cash on deposit for a repurchase facility and client application deposits, title premiums collected from insureds that are due to the underwritten insurance company and a $25,000 bond. |
Recently Adopted Accounting Pronouncements and Accounting Standards Issued but Not Yet Adopted | Recently Adopted Accounting Pronouncements In June 2016, the FASB issued Accounting Standard Update (“ASU”) No. 2016-13, “ Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ,” which introduced an expected credit loss model for the impairment of financial assets, measured at amortized cost. The model replaces the probable, incurred loss model for those assets and broadens the information an entity must consider in developing its expected credit loss estimate for assets measures at amortized cost. On January 1, 2020, the Company adopted ASU No. 2016-13, Financial Instruments— Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and subsequent amendments to the initial guidance under ASU 2018-19, ASU 2019-04 and ASU 2019-05 (collectively, “Topic 326”) with no material impact to our combined financial position, results of operations or cash flows. Based upon management’s scoping analysis, the Company determined that money market funds, notes, other receivables, and Ginnie Mae early buyout loans are within the scope of ASU 2016-13. For the Ginnie Mae early buyout loans, the Company determined that the guarantee from the Federal Housing Administration (“FHA”) or Veterans Affairs (“VA”) limits the Company’s exposure to potential credit-related losses to an immaterial amount. For other assets, primarily money market funds, the Company determined that these are short-term in nature (less than one year) and of high credit quality, and the estimated credit-related losses over the life of these receivables are also immaterial. For each of the aforementioned financial instruments carried at amortized cost, the Company enhanced its processes to consider and include the requirements of ASU 2016-13, as applicable, into the determination of credit-related losses. In March 2020, the FASB issued ASU No. 2020-03, Codification Improvements to Financial Instruments (“ASU 2020-03”). ASU 2020-03 improves and clarifies various financial instruments topics to increase shareholder awareness and make the standards easier to understand and apply by eliminating inconsistencies and providing clarifications. The Company adopted ASU 2020-03 upon issuance, with no material effect on our combined financial position, results of operations or cash flows. Accounting Standards Issued but Not Yet Adopted In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The amendments to Topic 740 include the removal of certain exceptions to the general principles of ASC 740 in such areas as intraperiod tax allocation, year to date losses in interim periods and deferred tax liabilities related to outside basis differences. Amendments also include simplification in other areas such as interim recognition of enactment of tax laws or rate changes and accounting for a franchise tax (or similar tax) that is partially based on income. This standard will be effective for the Company on January 1, 2021. Early adoption is permitted in any interim or annual period, with any adjustments reflected as of the beginning of the fiscal year of adoption. If an entity chooses to early adopt, it must adopt all changes as a result of the ASU. The Company is currently evaluating the potential impact that the adoption of this ASU will have on the combined financial statements and related disclosures. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting . Subject to meeting certain criteria, the new guidance provides optional expedients and exceptions to applying contract modification accounting under existing U.S. GAAP, to address the expected phase out of the London Inter-bank Offered Rate (“LIBOR”) by the end of 2021. This guidance is effective upon issuance and allows application to contract changes as early as January 1, 2020. The Company is in the process of reviewing its funding facilities and financing facilities that utilize LIBOR as the reference rate and is currently evaluating the potential impact that the adoption of this ASU will have on the combined financial statements and related disclosures. |
Fair Value Measurements | Fair value is the price that would be received if an asset were sold or the price that would be paid to transfer a liability in an orderly transaction between willing market participants at the measurement date. Required disclosures include classification of fair value measurements within a three-level hierarchy (Level 1, Level 2, and Level 3). Classification of a fair value measurement within the hierarchy is dependent on the classification and significance of the inputs used to determine the fair value measurement. Observable inputs are those that are observed, implied from, or corroborated with externally available market information. Unobservable inputs represent the Company’s estimates of market participants’ assumptions. Fair value measurements are classified in the following manner: Level 1 —Valuation is based on quoted prices in active markets for identical assets or liabilities at the measurement date. Level 2 —Valuation is based on either observable prices for identical assets or liabilities in inactive markets, observable prices for similar assets or liabilities, or other inputs that are derived directly from, or through correlation to, observable market data at the measurement date. Level 3 —Valuation is based on the Company’s internal models using assumptions at the measurement date that a market participant would use. In determining fair value measurement, the Company uses observable inputs whenever possible. The level of a fair value measurement within the hierarchy is dependent on the lowest level of input that has a significant impact on the measurement as a whole. If quoted market prices are available at the measurement date or are available for similar instruments, such prices are used in the measurements. If observable market data is not available at the measurement date, judgment is required to measure fair value. The following is a description of measurement techniques for items recorded at fair value on a recurring basis. There were no material items recorded at fair value on a nonrecurring basis as of June 30, 2020 or December 31, 2019. Mortgage loans held for sale: Loans held for sale that trade in active secondary markets are valued using Level 2 measurements derived from observable market data, including market prices of securities backed by similar mortgage loans adjusted for certain factors to approximate the fair value of a whole mortgage loan, including the value attributable to mortgage servicing and credit risk. Loans held for sale for which there is little to no observable trading activity of similar instruments are valued using Level 3 measurements based upon dealer price quotes. IRLCs: The fair value of IRLCs is based on current market prices of securities backed by similar mortgage loans (as determined above under mortgage loans held for sale), net of costs to close the loans, subject to the estimated loan funding probability, or “pull-through factor”. Given the significant and unobservable nature of the pull-through factor, IRLCs are classified as Level 3. MSRs: The fair value of MSRs (including MSRs collateral for financing liability and MSRs financing liability) is determined using a valuation model that calculates the present value of estimated net future cash flows. The model includes estimates of prepayment speeds, discount rate, cost to service, float earnings, contractual servicing fee income, and ancillary income among others. These fair value measurements are classified as Level 3. Forward commitments: The Company’s forward commitments are valued based on quoted prices for similar assets in an active market with inputs that are observable and are classified within Level 2 of the valuation hierarchy. |
Derivative Financial Instruments | The Company enters into interest rate lock commitments (“IRLCs”), forward commitments to sell mortgage loans and forward commitments to purchase loans, which are considered derivative financial instruments. These items are accounted for as free-standing derivatives and are included in the condensed combined balance sheets at fair value. The Company treats all of its derivative instruments as economic hedges; therefore, none of its derivative instruments qualify for designation as accounting hedges. Changes in the fair value of the IRLCs and forward commitments to sell mortgage loans are recorded in current period earnings and are included in gain on sale of loans, net in the Condensed Combined Statements of Income and Comprehensive Income. Forward commitments to purchase mortgage loans are recognized in current period earnings and are included in gain on sale of loans in the Condensed Combined Statements of Income and Comprehensive Income. The Company enters into IRLCs to fund residential mortgage loans with its potential borrowers. These commitments are binding agreements to lend funds to these potential borrowers at specified interest rates within specified periods of time. The fair value of IRLCs is derived from the fair value of similar mortgage loans or bonds, which is based on observable market data. Changes to the fair value of IRLCs are recognized based on changes in interest rates, changes in the probability that the commitment will be exercised, and the passage of time. The expected net future cash flows related to the associated servicing of the loan are included in the fair value measurement of rate locks. IRLCs and uncommitted mortgage loans held for sale expose the Company to the risk that the value of the mortgage loans held and mortgage loans underlying the commitments may decline due to increases in mortgage interest rates during the life of the commitments. To protect against this risk, the Company uses forward loan sale commitments to economically hedge the risk of potential changes in the value of the loans. These derivative instruments are recorded at fair value. The Company expects that the changes in fair value of these derivative financial instruments will either fully or partially offset the changes in fair value of the IRLCs and uncommitted mortgage loans held for sale. The changes in the fair value of these derivatives are recorded in gain on sale of loans, net. MSR assets (including the MSR value associated with outstanding IRLCs) that the Company plans to sell expose the Company to the risk that the value of the MSR asset may decline due to decreases in mortgage interest rates prior to the sale of these assets. To protect against this risk, the Company uses forward loan purchase commitments to economically hedge the risk of potential changes in the value of MSR assets that have been identified for sale. These derivative instruments are recorded at fair value. The Company expects that the changes in fair value of these derivative financial instruments will either fully or partially offset the changes in fair value of the MSR assets the Company intends to sell. The changes in fair value of these derivatives are recorded in the change in fair value of MSRs, net. Forward commitments include to be announced (“TBA”) mortgage backed securities that have been aggregated at the counterparty level for presentation and disclosure purposes. Counterparty agreements contain a legal right to offset amounts due to and from the same counterparty under legally enforceable master netting agreements to settle with the same counterparty, on a net basis, as well as the right to obtain cash collateral. Forward commitments also include commitments to sell loans to counterparties and to purchase loans from counterparties at determined prices. Refer to Note 9, Derivative Financial Instruments for further information. The Company uses forward commitments in hedging the interest rate risk exposure on its fixed and adjustable rate commitments. Utilization of forward commitments involves some degree of basis risk. Basis risk is defined as the risk that the hedged instrument’s price does not move in parallel with the increase or decrease in the market price of the hedged financial instrument. The Company calculates an expected hedge ratio to mitigate a portion of this risk. The Company’s derivative instruments are not designated as accounting hedging instruments, and therefore, changes in fair value are recorded in current period earnings. Hedging gains and losses are included in gain on sale of loans, net in the Combined Statements of Income and Comprehensive Income. |
Business, Basis of Presentati_3
Business, Basis of Presentation, and Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Cash, Cash Equivalents, and Restricted Cash | Restricted cash as of June 30, 2020 and 2019 consisted of cash on deposit for a repurchase facility and client application deposits, title premiums collected from insureds that are due to the underwritten insurance company and a $25,000 bond. June 30, 2020 2020 2019 Cash and cash equivalents $ 1,724,035 $ 608,622 Restricted cash 78,367 51,832 Total cash, cash equivalents, and restricted cash in the statement of cash flows $ 1,802,402 $ 660,454 Loans subject to repurchase right from Ginnie Mae For certain loans sold to Ginnie Mae, the Company as the servicer has the unilateral right to repurchase any individual loan in a Ginnie Mae securitization pool if that loan meets defined criteria, including being delinquent more than 90 days. Once the Company has the unilateral right to repurchase the delinquent loan, the Company has effectively regained control over the loan and must re-recognize the loan on the Condensed Combined Balance Sheet and establish a corresponding finance liability regardless of the Company's intention to repurchase the loan. |
Schedule of Cash, Cash Equivalents, and Restricted Cash | Restricted cash as of June 30, 2020 and 2019 consisted of cash on deposit for a repurchase facility and client application deposits, title premiums collected from insureds that are due to the underwritten insurance company and a $25,000 bond. June 30, 2020 2020 2019 Cash and cash equivalents $ 1,724,035 $ 608,622 Restricted cash 78,367 51,832 Total cash, cash equivalents, and restricted cash in the statement of cash flows $ 1,802,402 $ 660,454 Loans subject to repurchase right from Ginnie Mae For certain loans sold to Ginnie Mae, the Company as the servicer has the unilateral right to repurchase any individual loan in a Ginnie Mae securitization pool if that loan meets defined criteria, including being delinquent more than 90 days. Once the Company has the unilateral right to repurchase the delinquent loan, the Company has effectively regained control over the loan and must re-recognize the loan on the Condensed Combined Balance Sheet and establish a corresponding finance liability regardless of the Company's intention to repurchase the loan. |
Schedule of Unaudited Pro Forma Condensed Combined Balance Sheet Line Items | The following unaudited pro forma balance sheet line items as of June 30, 2020 reflect these distributions as if such distributions were declared and paid on June 30, 2020. UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET LINE ITEMS AS OF JUNE 30, 2020 Rocket Companies As Reported Distribution Adjustments Rocket Companies Pro Forma Cash and cash equivalents $ 1,724,035 $ (749,549) (1) $ 974,486 Total assets $ 28,856,457 $ (749,549) $ 28,106,908 Other liabilities $ 457,920 $ 1,510,451 (1) $ 1,968,371 Total liabilities $ 23,320,280 $ 1,510,451 $ 24,830,731 Net parent investment $ 5,527,173 $ (2,260,000) (1) $ 3,267,173 Total equity $ 5,536,177 $ (2,260,000) $ 3,276,177 (1) The Company paid capital distributions to RHI subsequent to June 30, 2020. The $2,260,000 distribution was fully funded through the use of cash on hand as of June 30, 2020 and cash flows generated from operations between July 1, 2020 and the initial public offering. For purposes of the unaudited pro forma condensed combined balance sheet, the payment of the distributions is reflected as a reduction to net parent investment of $2,260,000, a reduction to cash and cash equivalents of $749,549, and the recognition of a non-interest bearing payable of $1,510,451. The pro forma cash and cash equivalents balance after giving effect to this adjustment represents the Company's estimated ending cash and cash equivalents balance immediately prior to the reorganization transactions and initial public offering. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Statement Items Measured at Estimated Fair Value on a Recurring Basis | The table below shows a summary of financial statement items that are measured at estimated fair value on a recurring basis, including assets measured under the fair value option. There were no material transfers of assets or liabilities recorded at fair value on a recurring basis between Levels 1, 2 or 3 during the six months ended June 30, 2020 or the year ended December 31, 2019. Level 1 Level 2 Level 3 Total Balance at June 30, 2020 Assets: Mortgage loans held for sale $ — $ 17,212,435 $ 416,100 $ 17,628,535 IRLCs — — 2,393,764 2,393,764 MSRs — — 2,289,209 2,289,209 MSRs collateral for financing liability(1) — — 59,926 59,926 Forward commitments — 6,328 — 6,328 Total assets $ — $ 17,218,763 $ 5,158,999 $ 22,377,762 Liabilities: Forward commitments $ — $ 351,261 $ — $ 351,261 MSRs financing liability(1) — — 58,926 58,926 Total liabilities $ — $ 351,261 $ 58,926 $ 410,187 Balance at December 31, 2019 Assets: Mortgage loans held for sale $ — $ 12,966,942 $ 308,793 $ 13,275,735 IRLCs — — 508,135 508,135 MSRs — — 2,874,972 2,874,972 MSRs collateral for financing liability(1) — — 205,108 205,108 Forward commitments — 3,838 — 3,838 Total assets $ — $ 12,970,780 $ 3,897,008 $ 16,867,788 Liabilities: Forward commitments $ — $ 43,794 $ — $ 43,794 MSRs financing liability(1) — — 189,987 189,987 Total liabilities $ — $ 43,794 $ 189,987 $ 233,781 _________________________ (1) Refer to Note 3, Mortgage Servicing Rights for further information regarding both the MSRs collateral for financing liability and MSRs financing liability. |
Schedule of Quantitative Information About Fair Value Measurements of Level 3 Financial Instruments | The following tables present the quantitative information about recurring Level 3 fair value financial instruments and the fair value measurements as of: June 30, 2020 December 31, 2019 Unobservable Input Range Range Mortgage loans held for sale Dealer pricing 65 % - 103 % (95)% 75 % - 103 % (98)% IRLCs Loan funding probability 0 % - 100 % (74)% 0 % - 100 % (72)% MSRs, MSRs collateral for financing liability, and MSRs financing liability Discount rate 9.5 % - 12.0 % (10.0)% 9.5 % - 12.0 % (10.0)% Conditional prepayment rate 2.7 % - 29.6 % (19.2)% 7.4 % - 44.5 % (14.5)% |
Schedule of Reconciliation of Level 3 Assets | The table below presents a reconciliation of Level 3 assets measured at fair value on a recurring basis for the three and six months ended June 30, 2020 and 2019. Mortgage servicing rights (including MSRs collateral for financing liability and MSRs financing liability) are also classified as a Level 3 asset measured at fair value on a recurring basis and its reconciliation is found in Note 3, Mortgage Servicing Rights . Loans Held for Sale IRLCs Balance at March 31, 2020 $ 418,090 $ 1,214,865 Transfers in(1) 242,904 — Transfers out/principal reductions(1) (235,617) — Net transfers and revaluation gains — 1,178,899 Total losses included in net income (9,277) — Balance at June 30, 2020 $ 416,100 $ 2,393,764 Balance at March 31, 2019 $ 166,946 $ 372,105 Transfers in(1) 374,435 — Transfers out/principal reductions(1) (265,856) — Net transfers and revaluation gains — 135,082 Total gains included in net income 1,026 — Balance at June 30, 2019 $ 276,551 $ 507,187 Loans Held for Sale IRLCs Balance at December 31, 2019 $ 308,793 $ 508,135 Transfers in(1) 783,763 — Transfers out/principal reductions(1) (660,986) — Net transfers and revaluation gains — 1,885,629 Total losses included in net income (15,470) — Balance at June 30, 2020 $ 416,100 $ 2,393,764 Balance at December 31, 2018 $ 194,752 $ 245,663 Transfers in(1) 527,359 — Transfers out/principal reductions(1) (447,725) — Net transfers and revaluation gains — 261,524 Total gains included in net income 2,165 — Balance at June 30, 2019 $ 276,551 $ 507,187 _________________________ (1) Transfers in represent loans repurchased from investors or loans originated for which an active market currently does not exist. Transfers out primarily represent loans sold to third parties and loans paid in full. |
Schedule of Fair Value Option for Mortgage Loans Held For Sale | The following is the estimated fair value and unpaid principal balance (“UPB”) of mortgage loans held for sale that have contractual principal amounts and for which the Company has elected the fair value option. The fair value option was elected for mortgage loans held for sale as the Company believes fair value best reflects their expected future economic performance: Fair Value Principal Amount Due Upon Maturity Difference(1) Balance at June 30, 2020 $ 17,628,535 $ 16,819,756 $ 808,779 Balance at December 31, 2019 $ 13,275,735 $ 12,929,143 $ 346,592 _________________________ (1) Represents the amount of gains included in Gain on sale of loans, net due to changes in fair value of items accounted for using the fair value option. |
Schedule of Liabilities not Recorded at Fair Value on a Recurring or Nonrecurring Basis | The following table presents the carrying amounts and estimated fair value of financial liabilities that are not recorded at fair value on a recurring or nonrecurring basis. This table excludes cash and cash equivalents, restricted cash, warehouse borrowings, and line of credit borrowing facilities as these financial instruments are highly liquid or short-term in nature and as a result, their carrying amounts approximate fair value: June 30, 2020 December 31, 2019 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Senior Notes, due 5/1/2025 $ 1,241,868 $ 1,279,950 $ 1,241,012 $ 1,297,250 Senior Notes, due 1/15/2028 $ 993,853 $ 1,045,320 $ 992,779 $ 1,046,683 |
Mortgage Servicing Rights (Tabl
Mortgage Servicing Rights (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Transfers and Servicing [Abstract] | |
Summary of Changes to MSR Assets | The following table summarizes changes to the MSR assets for the three and six months ended: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Fair value, beginning of period $ 2,170,638 $ 3,001,501 $ 2,874,972 $ 3,180,530 MSRs originated 669,923 445,663 1,205,342 742,335 MSRs sales — — (186,292) — Changes in fair value: Due to changes in valuation model inputs or assumptions(1) (272,885) (391,348) (1,078,421) (712,327) Due to collection/realization of cash flows (278,467) (206,914) (526,392) (361,636) Total changes in fair value (551,352) (598,262) (1,604,813) (1,073,963) Fair value, end of period $ 2,289,209 $ 2,848,902 $ 2,289,209 $ 2,848,902 _________________________ (1) Reflects changes in assumptions including discount rates and prepayment speed assumptions, mostly due to changes in market interest rates. Does not include the change in fair value of derivatives that economically hedge MSRs identified for sale. |
Schedule of Assumptions Used to Determine Fair Value of MSRs | The following is a summary of the weighted average discount rate and prepayment speed assumptions used to determine the fair value of MSRs as well as the expected life of the loans in the servicing portfolio: June 30, December 31, Discount rate 10.0 % 10.0 % Prepayment speeds 19.2 % 14.5 % Life (in years) 4.14 5.33 |
Summary of Discount Rate and Prepayment Speeds at Two Different Data Points | The following table stresses the discount rate and prepayment speeds at two different data points: Discount Rate Prepayment Speeds 100 BPS Adverse Change 200 BPS Adverse Change 10% Adverse Change 20% Adverse Change June 30, 2020 Mortgage servicing rights $ (73,814) $ (142,774) $ (153,663) $ (298,727) December 31, 2019 Mortgage servicing rights $ (101,495) $ (195,894) $ (133,039) $ (259,346) |
Mortgage Loans Held for Sale (T
Mortgage Loans Held for Sale (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Receivables [Abstract] | |
Reconciliation of Changes in Mortgage Loans Held for Sale | A reconciliation of the changes in mortgage loans held for sale to the amounts presented on the Combined Statements of Cash Flows is below: Six Months Ended 2020 2019 Balance at the beginning of period $ 13,275,735 $ 5,784,812 Disbursements of mortgage loans held for sale 122,056,424 53,244,712 Proceeds from sales of mortgage loans held for sale(1) (121,559,129) (51,504,181) Gain on sale of loans excluding fair value of MSRs, net(2) 3,855,505 863,403 Balance at the end of period $ 17,628,535 $ 8,388,746 _________________________ (1) The proceeds from sales of loans held for sale on the Combined Statement of Cash Flows includes amounts related to the sale of consumer loans. (2) The gain on sale of loans excluding MSRs, net presented on the Combined Statements of Cash Flows includes amounts related to the sale of consumer loans, interest rate lock commitments, forward commitments, and provisions for investor reserves. |
Borrowings (Tables)
Borrowings (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Funding Facilities | Funding Facilities Facility Type Collateral Maturity Line Amount Committed Line Amount Outstanding Balance June 30, 2020 Outstanding Balance December 31, 2019 MRA funding: 1) Master Repurchase Agreement(1)(10) Mortgage loans held for sale(9) 10/22/2021 $ 2,000,000 $ 100,000 $ 1,999,963 $ 835,302 2) Master Repurchase Agreement(2)(10) Mortgage loans held for sale(9) 12/3/2020 $ 1,750,000 $ 500,000 1,599,302 1,390,839 3) Master Repurchase Agreement(3)(10) Mortgage loans held for sale(9) 4/22/2022 $ 3,250,000 $ 1,000,000 2,476,494 2,622,070 4) Master Repurchase Agreement(4)(10) Mortgage loans held for sale(9) 9/16/2020 $ 1,500,000 $ 1,325,000 1,473,762 875,617 5) Master Repurchase Agreement(5)(10) Mortgage loans held for sale(9) 4/22/2021 $ 2,000,000 $ 500,000 1,270,770 2,063,099 6) Master Repurchase Agreement(6)(10) Mortgage loans held for sale(9) 9/5/2022 $ 1,500,000 $ 1,500,000 1,450,543 965,903 7) Master Repurchase Agreement(10) Mortgage loans held for sale(9) 10/15/2020 $ 1,500,000 $ 975,000 1,168,418 773,822 8) Master Repurchase Agreement(10) Mortgage loans held for sale(9) 6/12/2021 $ 400,000 $ — 397,653 — $ 13,900,000 $ 5,900,000 11,836,905 9,526,652 Early Funding: 9) Early Funding Facility(7)(11) Mortgage loans held for sale(9) See disclosure below $ 4,000,000 — 2,806,083 2,022,179 10) Early Funding Facility(8)(11) Mortgage loans held for sale(9) See disclosure below $ 2,500,000 — 1,042,872 493,047 $ 6,500,000 — 3,848,955 2,515,226 Total $ 20,400,000 $ 5,900,000 $ 15,685,860 $ 12,041,878 _________________________ (1) Subsequent to June 30, 2020 this facility was amended to temporarily increase the total line amount to $3,000,000 with $100,000 committed until September 10, 2020. Subsequent to September 10, 2020, the facility will drop to $2,000,000 with $100,000 committed. (2) This facility will have an overall line size of $1,750,000 with $500,000 committed until September 30, 2020. Subsequent to September 30, 2020, the facility will drop to $1,000,000 with $500,000 committed. (3) This facility will have an overall line size of $3,250,000 with $1,000,000 committed until December 31, 2020. Subsequent to December 31, 2020 , the facility will drop to $2,750,000 with $1,000,000 committed. (4) Subsequent to June 30, 2020, this facility was increased to $2,000,000 with $1,700,000 committed maturing July 26, 2021. This facility has a 12-month initial term, which can be extended for 3-months at each subsequent 3-month anniversary from the initial start date. (5) Subsequent to June 30, 2020, this facility was amended to increase the total line amount to $2,500,000 with $500,000 committed through facility maturity. (6) Subsequent to June 30, 2020, this facility was amended to temporarily increase the total line amount to $2,000,000 with $1,500,000 committed until December 30, 2020. Subsequent to December 30, 2020, the committed amount will drop to $1,000,000 while the total line amount will remain at $2,000,000. (7) This facility is an evergreen agreement with no stated termination or expiration date. This agreement can be terminated by either party upon written notice . (8) This facility will have an overall line size of $2,500,000, which will be reviewed every 90 days. This agreement is an evergreen agreement with no stated termination or expiration date. This agreement can be terminated by either party upon written notice. (9) The Company has multiple borrowing facilities in the form of asset sales under agreements to repurchase. These borrowing facilities are secured by mortgage loans held for sale at fair value as the first priority security interest. (10) The interest rates charged by lenders of the funding facilities under the Master Repurchase Agreements ranged from one-month LIBOR+1.23% to one-month LIBOR+2.30% for the six months ended June 30, 2020 and one-month LIBOR+1.20% to one-month LIBOR+2.30% for the year ended December 31, 2019. (11) The interest rates charged by lenders for the early funding facilities ranged from one-month LIBOR+0.40% to one-month LIBOR+1.00% for the six months ended June 30, 2020 and one-month LIBOR+0.40% to one-month LIBOR+0.85% for the year ended December 31, 2019. |
Schedule of Other Financing Facilities | Other Financing Facilities Facility Type Collateral Maturity Line Amount Committed Line Amount Outstanding Balance June 30, 2020 Outstanding Balance December 31, 2019 Line of Credit Financing Facilities 1) Unsecured line of credit(1)(8) — 11/1/2024 $ 1,000,000 $ — $ — $ — 2) Unsecured line of credit(2)(8) — 2/28/2021 175,000 175,000 85,000 90,000 3) Unsecured line of credit(3) — 6/23/2025 50,000 — — — 4) Unsecured line of credit(3) — See disclosure below 10,000 — — — 5) Revolving credit facility(4) — See disclosure below — — — — 6) MSR line of credit(5)(9) MSRs 10/22/2021 200,000 — — — 7) MSR line of credit(6)(9) MSRs See disclosure below 200,000 200,000 75,000 75,000 $ 1,635,000 $ 375,000 $ 160,000 $ 165,000 Early Buyout Financing Facility 8) Early buy out facility(7)(10) Loans/ Advances 6/9/2021 $ 500,000 $ — $ 241,752 $ 196,247 _________________________ (1) This uncommitted, unsecure d Revolving Lo an Agreement is with RHI. Subsequent to June 30, 2020, this facility was amended to increase the total line amount to $2,000,000 and extend the maturity to July 27, 2025. (2) Subsequent to June 30, 2020, this facility was terminated at the borrower’s request and a portion of the commitment was rolled in the new revolving credit facility described below in footnote 4 below. (3) Refer to Note 6. Transactions with Related Parties for additional details regarding this unsecured line of credit (4) Subsequent to June 30, 2020, a new three-year revolving credit facility was closed. The $950,000 committed facility, which includes a syndicate of banks, expires on August 10, 2023. Subsequent to June 30, 2020, $300,000 was drawn. (5) This facility's uncommitted line amount is unavailable to draw. (6) This MSR facility can be drawn upon for corporate purposes and is collateralized by GSE MSRs within our servicing portfolio. This facility has a 5-year total commitment comprised of a 3-year revolving period that expires on April 30, 2022 followed by a 2-year amortization period that expires on April 30, 2024. (7) This facility provides funding for repurchasing delinquent loans from agency securities loan pools and servicer advances related to the repurchased loans. Effective January 30, 2020, this facility has an overall line size of $500,000 which can be increased to $600,000 at borrower’s request and lender’s acceptance. (8) The interest rates charged by lenders for the unsecured lines of credit financing facilities ranged from one-month LIBOR+1.25% to one-month LIBOR+2.00% for the six months ended June 30, 2020 and for the year ended December 31, 2019. (9) The interest rates charged by lenders for the MSR line of credit financing facility ranged from one-month LIBOR+2.25% to one-month LIBOR+4.00% for the six months ended June 30, 2020 and the year ended December 31, 2019. (10) The interest rate charged by lender for the Early buyout financing facility was one-month LIBOR+1.75% for the six months ended June 30, 2020 and for the year ended December 31, 2019. |
Schedule of Unsecured Senior Notes | Unsecured Senior Notes Facility Type Maturity Interest Rate Outstanding Balance June 30, 2020 Outstanding Balance December 31, 2019 Unsecured Senior Notes(1) 5/1/2025 5.75 % $ 1,250,000 $ 1,250,000 Unsecured Senior Notes(2) 1/15/2028 5.25 % $ 1,010,000 $ 1,010,000 Total Senior Notes $ 2,260,000 $ 2,260,000 _________________________ (1) The 2025 Senior Notes are unsecured obligation notes with no asset required to pledge for this borrowing. Unamortized debt issuance costs are presented net against the Senior Notes reducing the $1,250,000 carrying amount on the balance sheet by $8,132 and $8,988 as of June 30, 2020 and December 31, 2019, respectively. At any time on or after May 1, 2020, the Company may redeem the note at its option, in whole or in part, upon not less than 30 nor more than 60 days notice, at the redemption prices equal to the percentage of principal amount set forth below plus accrued and unpaid interest, if any, to but excluding the redemption date, in cash, if redeemed during the twelve-month period beginning on May 1 in the years indicated below: Year Percentage Rest of 2020 102.875 % 2021 101.917 % 2022 100.958 % 2023 and thereafter 100.000 % (2) The 2028 Senior Notes are unsecured obligation notes with no asset required to pledge for this borrowing. Unamortized debt issuance costs and discounts are presented net against the Senior Notes reducing the $1,010,000 carrying amount on the balance sheet by $8,838 and $7,309 as of June 30, 2020, respectively and $9,421 and $7,800 as of December 31, 2019, respectively. At any time and from time to time on or after January 15, 2023, the Company may redeem the notes at its option, in whole or in part, upon not less than 30 nor more than 60 days notice, at the redemption prices equal to the percentage of principal amount set forth below plus accrued and unpaid interest, if any, to but excluding the redemption date, in cash, if redeemed during the twelve-month period beginning on January 15 in the years indicated below: Year Percentage 2023 102.625 % 2024 101.750 % 2025 100.875 % 2026 and thereafter 100.000 % |
Transactions with Related Par_2
Transactions with Related Parties (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |
Schedule of Receivables from and Payables to Related Parties | The amounts receivable from and payable to Related Parties consisted of the following as of: June 30, 2020 December 31, 2019 Principal Interest Rate(1) Principal Interest Rate(1) Included in Notes receivable and due from affiliates on the Condensed Combined Balance Sheets Promissory Note—Shareholders Note $ — — $ 57,457 2.38 % Affiliated receivables and other notes 17,028 — 32,489 — Notes receivable and due from affiliates $ 17,028 $ 89,946 Included in Notes payable and due to affiliates on the Condensed Combined Balance Sheets RHIO Line of Credit $ 9,000 5.00 % $ 10,000 5.00 % Affiliated payables 52,192 — 25,082 — Notes payable and due to affiliates $ 61,192 $ 35,082 _________________________ (1) Interest incurred and accrued is based on a margin over 30-day LIBOR as of the date of advance. |
Other Assets (Tables)
Other Assets (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Other Assets | Other assets consist of the following: June 30, December 31, 2020 2019 Margin call receivable from counterparty $ 195,932 $ 3,697 Mortgage production related receivables 154,225 157,276 Disbursement funds advanced 82,391 56,721 Non-production-related receivables 64,456 35,530 Prepaid expenses 61,387 62,199 Ginnie Mae buyouts 59,961 78,174 Goodwill and other intangible assets 38,079 40,261 Other real estate owned 1,653 1,619 Other 56,705 64,181 Total other assets $ 714,789 $ 499,658 |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income (Loss) Tax Expense (Benefit) | The components of income (loss) tax expense (benefit) were as follows: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Total income before income (loss) taxes and non-controlling interest $ 3,481,880 $ (54,259) $ 3,579,896 $ (354,608) Total provision for (benefit from) income taxes $ 20,669 $ (283) $ 21,405 $ (1,287) Effective tax provision rate 0.59 % 0.52 % 0.60 % 0.36 % |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Net Hedging Losses | Net hedging losses were as follows: Three Months Ended June 30, Six months ended June 30, 2020(1) 2019 2020(1) 2019 Hedging losses $ (510,804) $ (598) $ (1,507,788) $ (34,453) _________________________ (1) Includes the change in fair value related to derivatives economically hedging MSRs identified for sale. |
Schedule of Notional and Fair Values of Derivative Financial Instruments | The notional and fair values of derivative financial instruments not designated as hedging instruments were as follows: Notional Value Derivative Asset Derivative Liability Balance at June 30, 2020: IRLCs, net of loan funding probability(1) $ 46,035,933 $ 2,393,764 $ — Forward commitments(2) $ 57,969,480 $ 6,328 $ 351,261 Balance at December 31, 2019: IRLCs, net of loan funding probability(1) $ 15,439,960 $ 508,135 $ — Forward commitments(2) $ 26,637,275 $ 3,838 $ 43,794 ________________________ (1) IRLCs are also discussed in Note 10, Commitments, Contingencies, and Guarantees. (2) Includes the fair value and notional value related to derivatives economically hedging MSRs identified for sale. |
Schedule of Gross Amounts of Recognized Assets Subject to Master Netting Agreements | The table below presents the gross amounts of recognized assets and liabilities subject to master netting agreements. The Company had $195,932 and $3,697 of cash pledged to counterparties related to these forward commitments at June 30, 2020 and December 31, 2019, respectively, classified in other assets in the Condensed Combined Balance Sheets. As of June 30, 2020 and December 31, 2019, there was no cash on our balance sheet from the respective counterparties. Margins received by the Company are classified in other liabilities in the Condensed Combined Balance Sheets. Gross Amount of Recognized Assets or Liabilities Gross Amounts Offset in the Condensed Combined Balance Sheet Net Amounts Presented in the Condensed Combined Balance Sheet Offsetting of Derivative Assets Balance at June 30, 2020: Forward commitments $ 15,786 $ (9,458) $ 6,328 Balance at December 31, 2019: Forward commitments $ 6,690 $ (2,852) $ 3,838 Offsetting of Derivative Liabilities Balance at June 30, 2020: Forward commitments $ (555,239) $ 203,978 $ (351,261) Balance at December 31, 2019: Forward commitments $ (89,389) $ 45,595 $ (43,794) |
Schedule of Gross Amounts of Recognized Liabilities Subject to Master Netting Agreements | The table below presents the gross amounts of recognized assets and liabilities subject to master netting agreements. The Company had $195,932 and $3,697 of cash pledged to counterparties related to these forward commitments at June 30, 2020 and December 31, 2019, respectively, classified in other assets in the Condensed Combined Balance Sheets. As of June 30, 2020 and December 31, 2019, there was no cash on our balance sheet from the respective counterparties. Margins received by the Company are classified in other liabilities in the Condensed Combined Balance Sheets. Gross Amount of Recognized Assets or Liabilities Gross Amounts Offset in the Condensed Combined Balance Sheet Net Amounts Presented in the Condensed Combined Balance Sheet Offsetting of Derivative Assets Balance at June 30, 2020: Forward commitments $ 15,786 $ (9,458) $ 6,328 Balance at December 31, 2019: Forward commitments $ 6,690 $ (2,852) $ 3,838 Offsetting of Derivative Liabilities Balance at June 30, 2020: Forward commitments $ (555,239) $ 203,978 $ (351,261) Balance at December 31, 2019: Forward commitments $ (89,389) $ 45,595 $ (43,794) |
Commitments, Contingencies, a_2
Commitments, Contingencies, and Guarantees (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of IRLC Unpaid Principal Balance | The UPB of IRLCs was as follows: June 30, 2020 December 31, 2019 Fixed Rate Variable Rate Fixed Rate Variable Rate IRLCs $ 60,868,152 $ 1,299,825 $ 20,577,282 $ 974,693 |
Schedule of Investor Reserves Activity | The following presents the activity in the investor reserves: Three Months Ended Six Months Ended 2020 2019 2020 2019 Balance at beginning of period $ 55,667 $ 56,645 $ 54,387 $ 56,943 Provision for (benefit from) investor reserves 7,786 (1,145) 9,363 (652) Premium recapture and indemnification losses paid (441) (258) (738) (1,049) Balance at end of period $ 63,012 $ 55,242 $ 63,012 $ 55,242 |
Segments (Tables)
Segments (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Key Operating Data for Business Segments | Key operating data for our business segments for the three months ended: Three Months Ended Direct to Consumer Partner Network Segments Total All Other Total Revenues Gain on sale $ 4,020,492 $ 734,662 $ 4,755,154 $ (1,570) $ 4,753,584 Interest income 51,012 26,376 77,388 651 78,039 Interest expense on funding facilities (35,397) (18,302) (53,699) (57) (53,756) Servicing fee income 248,873 — 248,873 969 249,842 Changes in fair value of MSRs (552,843) — (552,843) — (552,843) Other income 206,538 39,859 246,397 315,868 562,265 Total U.S. GAAP Revenue $ 3,938,675 $ 782,595 $ 4,721,270 $ 315,861 $ 5,037,131 Plus: Decrease in MSRs due to valuation assumptions 274,377 — 274,377 — 274,377 Adjusted revenue $ 4,213,052 $ 782,595 $ 4,995,647 $ 315,861 $ 5,311,508 Directly attributable expenses 948,900 139,140 1,088,040 128,463 1,216,503 Contribution margin $ 3,264,152 $ 643,455 $ 3,907,607 $ 187,398 $ 4,095,005 Six Months Ended Direct to Consumer Partner Network Segments Total All Other Total Revenues Gain on sale $ 5,631,324 $ 938,109 $ 6,569,433 $ 6,260 $ 6,575,693 Interest income 98,322 51,947 150,269 1,812 152,081 Interest expense on funding facilities (60,782) (32,023) (92,805) (410) (93,215) Servicing fee income 504,863 — 504,863 2,072 506,935 Changes in fair value of MSRs (1,544,095) — (1,544,095) — (1,544,095) Other income 351,561 59,469 411,030 395,537 806,567 Total U.S. GAAP Revenue $ 4,981,193 $ 1,017,502 $ 5,998,695 $ 405,271 $ 6,403,966 Plus: Decrease in MSRs due to valuation assumptions 1,017,704 — 1,017,704 — 1,017,704 Adjusted revenue $ 5,998,897 $ 1,017,502 $ 7,016,399 $ 405,271 $ 7,421,670 Directly attributable expenses 1,729,520 231,084 1,960,604 176,750 2,137,354 Contribution margin $ 4,269,377 $ 786,418 $ 5,055,795 $ 228,521 $ 5,284,316 Three Months Ended Direct to Consumer Partner Network Segments Total All Other Total Revenues Gain on sale $ 997,707 $ 101,918 $ 1,099,625 $ 12,834 $ 1,112,459 Interest income 38,930 21,842 60,772 813 61,585 Interest expense on funding facilities (20,585) (11,374) (31,959) (471) (32,430) Servicing fee income 240,002 — 240,002 253 240,255 Changes in fair value of MSRs (598,262) — (598,262) — (598,262) Other income 98,747 3,255 102,002 51,936 153,938 Total U.S. GAAP Revenue $ 756,539 $ 115,641 $ 872,180 $ 65,365 $ 937,545 Plus: Decrease in MSRs due to valuation assumptions 391,348 — 391,348 — 391,348 Adjusted revenue $ 1,147,887 $ 115,641 $ 1,263,528 $ 65,365 $ 1,328,893 Directly attributable expenses 606,186 59,131 665,317 49,808 715,125 Contribution margin $ 541,701 $ 56,510 $ 598,211 $ 15,557 $ 613,768 Six Months Ended Direct to Consumer Partner Network Segments Total All Other Total Revenues Gain on sale $ 1,663,481 $ 152,044 $ 1,815,525 $ 24,180 $ 1,839,705 Interest income 73,330 33,878 107,208 1,429 108,637 Interest expense on funding facilities (37,807) (17,400) (55,207) (836) (56,043) Servicing fee income 463,345 — 463,345 1,516 464,861 Changes in fair value of MSRs (1,073,963) — (1,073,963) — (1,073,963) Other income 175,466 9,834 185,300 100,820 286,120 Total U.S. GAAP Revenue $ 1,263,852 $ 178,356 $ 1,442,208 $ 127,109 $ 1,569,317 Plus: Decrease in MSRs due to valuation assumptions 712,327 — 712,327 — 712,327 Adjusted revenue $ 1,976,179 $ 178,356 $ 2,154,535 $ 127,109 $ 2,281,644 Directly attributable expenses 1,150,475 102,119 1,252,594 90,915 1,343,509 Contribution margin $ 825,704 $ 76,237 $ 901,941 $ 36,194 $ 938,135 |
Schedule of Reconciliation of Segment Contribution Margin to Combined U.S. GAAP Income Before Taxes | The following table represents a reconciliation of segment contribution margin to combined U.S. GAAP income before taxes for the three months ended: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Contribution margin, excluding change in MSRs due to valuation assumptions $ 4,095,005 $ 613,768 $ 5,284,316 $ 938,135 Decrease in MSRs due to valuation assumptions (274,377) (391,348) (1,017,704) (712,327) Contribution margin, including change in MSRs due to valuation assumptions $ 3,820,628 $ 222,420 $ 4,266,612 $ 225,808 Less expenses not allocated to segments : Salaries, commissions and team member benefits $ 205,100 $ 140,587 403,950 292,409 General and administrative expenses 90,231 85,223 188,991 184,332 Depreciation and amortization 16,189 17,687 32,304 35,792 Interest and amortization expense on non-funding debt 33,168 33,086 66,275 66,168 Other expenses (5,940) 96 (4,804) 1,715 Income (loss) before income taxes $ 3,481,880 $ (54,259) $ 3,579,896 $ (354,608) |
Business, Basis of Presentati_4
Business, Basis of Presentation, and Accounting Policies - Narrative (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020USD ($)subsidiary | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)subsidiary | Jun. 30, 2019USD ($) | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Number of subsidiaries | subsidiary | 12 | 12 | ||
Affiliated entity | ||||
Related Party Transaction [Line Items] | ||||
Executive management compensation expense | $ | $ 44,997 | $ 11,231 | $ 86,734 | $ 21,930 |
Business, Basis of Presentati_5
Business, Basis of Presentation, and Accounting Policies - Subsequent Events (Details) - USD ($) | Aug. 14, 2020 | Aug. 10, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Sep. 02, 2020 |
Subsequent Event [Line Items] | ||||||||
Unpaid principal balance of loans for which MSRs sold in July 2020 | $ 20,000,000,000 | $ 20,000,000,000 | ||||||
Percentage of total single-family mortgage services portfolio of MSRs sold in July 2020 | 5.30% | 5.30% | ||||||
Net income | $ 3,461,647,000 | $ (53,651,000) | $ 3,559,368,000 | $ (352,669,000) | ||||
ATI | ||||||||
Subsequent Event [Line Items] | ||||||||
Net income | $ 4,700,000 | |||||||
Subsequent Event | ||||||||
Subsequent Event [Line Items] | ||||||||
Holding units acquired | 100,000,000 | |||||||
Amount of consolidated net earnings and net assets that will be allocated to non-controlling interests (percent) | 95.00% | |||||||
Stock options granted (in shares) | 26,373,361 | |||||||
Percentage of applicable tax savings payable per tax receivable agreement | 90.00% | |||||||
Percentage of applicable tax savings retained by the Company per tax receivable agreement | 10.00% | |||||||
Subsequent Event | ATI | ||||||||
Subsequent Event [Line Items] | ||||||||
Total aggregate consideration | $ 14,400,000 | |||||||
Holding units issued in acquisition (in shares) | 800,000 | |||||||
Value of holding units issued in acquisition (in dollars per share) | $ 18 | |||||||
Subsequent Event | Revolving Credit Facility | Revolving credit facility due Aug 10 2023 | ||||||||
Subsequent Event [Line Items] | ||||||||
Line amount | $ 950,000,000 | |||||||
Subsequent Event | Affiliated entity | Tax receivable agreement with RHI | ||||||||
Subsequent Event [Line Items] | ||||||||
Payable due to RHI | $ 512,000,000 | |||||||
Subsequent Event | RSUs | ||||||||
Subsequent Event [Line Items] | ||||||||
Restricted stock units granted (in shares) | 16,729,253 | |||||||
Subsequent Event | RSUs | One third of options vest on first anniversary | ||||||||
Subsequent Event [Line Items] | ||||||||
Award vesting period | 1 year | |||||||
Subsequent Event | RSUs | Minimum | ||||||||
Subsequent Event [Line Items] | ||||||||
Award vesting period | 1 year | |||||||
Subsequent Event | RSUs | Maximum | ||||||||
Subsequent Event [Line Items] | ||||||||
Award vesting period | 3 years | |||||||
Subsequent Event | Stock options | Period after first anniversary for option vesting ratably on monthly basis | ||||||||
Subsequent Event [Line Items] | ||||||||
Award vesting period | 24 months | |||||||
Subsequent Event | RKT Holdings, Inc. | ||||||||
Subsequent Event [Line Items] | ||||||||
Economic interest of managing member in LLC (percent) | 5.00% | |||||||
Subsequent Event | Rocket Companies Inc. | ||||||||
Subsequent Event [Line Items] | ||||||||
Public combined voting power (percent) | 19.00% | |||||||
Subsequent Event | RHI | RKT Holdings, Inc. | ||||||||
Subsequent Event [Line Items] | ||||||||
Ownership interest in LLC (Holdings Units) | 1,882,177,661 | |||||||
Economic interest in LLC (percent) | 95.00% | |||||||
Subsequent Event | RHI | Rocket Companies Inc. | ||||||||
Subsequent Event [Line Items] | ||||||||
Combined voting power (percent) | 79.00% | |||||||
Subsequent Event | Dan Gilbert | RKT Holdings, Inc. | ||||||||
Subsequent Event [Line Items] | ||||||||
Ownership interest in LLC (Holdings Units) | 1,101,822 | |||||||
Economic interest in LLC (percent) | 0.06% | |||||||
Subsequent Event | Dan Gilbert | Rocket Companies Inc. | ||||||||
Subsequent Event [Line Items] | ||||||||
Combined voting power (percent) | 2.00% | |||||||
Subsequent Event | Gilbert Affiliates | Rocket Companies Inc. | ||||||||
Subsequent Event [Line Items] | ||||||||
Combined voting power (percent) | 0.06% | |||||||
Subsequent Event | RKT Holdings, Inc. | ||||||||
Subsequent Event [Line Items] | ||||||||
Holding units outstanding | 1,983,652,048 | |||||||
Subsequent Event | Class A common stock | ||||||||
Subsequent Event [Line Items] | ||||||||
Common stock outstanding | 100,372,565 | |||||||
Public ownership interest (in shares) | 100,000,000 | |||||||
Subsequent Event | Class A common stock | Rocket Companies Incentive Plan | ||||||||
Subsequent Event [Line Items] | ||||||||
Common stock reserved for equity-based awards | 16,729,253 | |||||||
Subsequent Event | Class A common stock | Dan Gilbert | ||||||||
Subsequent Event [Line Items] | ||||||||
Ownership Interest (in shares) | 28,334 | |||||||
Subsequent Event | Class A common stock | Gilbert Affiliates | ||||||||
Subsequent Event [Line Items] | ||||||||
Ownership Interest (in shares) | 344,231 | |||||||
Subsequent Event | Class B common stock | ||||||||
Subsequent Event [Line Items] | ||||||||
Common stock outstanding | 0 | |||||||
Subsequent Event | Class C common stock | ||||||||
Subsequent Event [Line Items] | ||||||||
Common stock outstanding | 0 | |||||||
Subsequent Event | Class D common stock | ||||||||
Subsequent Event [Line Items] | ||||||||
Common stock outstanding | 1,883,279,483 | |||||||
Subsequent Event | Class D common stock | RHI | ||||||||
Subsequent Event [Line Items] | ||||||||
Ownership Interest (in shares) | 1,882,177,661 | |||||||
Subsequent Event | Class D common stock | Dan Gilbert | ||||||||
Subsequent Event [Line Items] | ||||||||
Ownership Interest (in shares) | 1,101,822 | |||||||
Subsequent Event | IPO | ||||||||
Subsequent Event [Line Items] | ||||||||
Net proceeds from IPO | $ 1,760,000,000 | |||||||
Subsequent Event | IPO | Class A common stock | ||||||||
Subsequent Event [Line Items] | ||||||||
Number of shares issued (in shares) | 100,000,000 | |||||||
Common stock, par value (in dollars per share) | $ 0.00001 | |||||||
Offering price (in dollars per share) | $ 18 |
Business, Basis of Presentati_6
Business, Basis of Presentation, and Accounting Policies - Revenue Recognition (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Core Digital Media lead generation revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | $ 5,504 | $ 11,794 | $ 13,064 | $ 21,291 |
Professional services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | 1,920 | 2,283 | 3,755 | 3,887 |
Real estate network referral | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | 11,837 | 11,400 | 19,825 | 18,183 |
Contact center | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | 5,816 | 8,756 | 13,157 | 13,245 |
Closing fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | 106,038 | 40,060 | 179,525 | 73,323 |
Appraisal revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | $ 20,781 | $ 18,131 | $ 38,399 | $ 36,183 |
Business, Basis of Presentati_7
Business, Basis of Presentation, and Accounting Policies - Cash Distributions (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Reclassification [Line Items] | ||||||
Cash and cash equivalents | $ 1,724,035 | $ 1,350,972 | $ 608,622 | |||
Total assets | 28,856,457 | 20,077,327 | ||||
Other liabilities | 457,920 | 390,149 | ||||
Total liabilities | 23,320,280 | 16,574,405 | ||||
Net parent investment | 5,527,173 | 3,498,065 | ||||
Total equity | 5,536,177 | $ 3,649,419 | $ 3,502,922 | $ 2,232,494 | $ 2,277,469 | $ 2,780,896 |
Distribution Adjustments | ||||||
Reclassification [Line Items] | ||||||
Cash and cash equivalents | (749,549) | |||||
Total assets | (749,549) | |||||
Other liabilities | 1,510,451 | |||||
Total liabilities | 1,510,451 | |||||
Net parent investment | (2,260,000) | |||||
Total equity | (2,260,000) | |||||
Rocket Companies Pro Forma | ||||||
Reclassification [Line Items] | ||||||
Cash and cash equivalents | 974,486 | |||||
Total assets | 28,106,908 | |||||
Other liabilities | 1,968,371 | |||||
Total liabilities | 24,830,731 | |||||
Net parent investment | 3,267,173 | |||||
Total equity | $ 3,276,177 |
Business, Basis of Presentati_8
Business, Basis of Presentation, and Accounting Policies - Cash Reconciliation (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Cash and cash equivalents | $ 1,724,035 | $ 1,350,972 | $ 608,622 | |
Restricted cash | 78,367 | 61,154 | 51,832 | |
Total cash, cash equivalents, and restricted cash in the statement of cash flows | 1,802,402 | $ 1,412,126 | 660,454 | $ 1,101,167 |
Bond | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Bond in restricted cash | $ 25,000 | $ 25,000 |
Fair Value Measurements - Measu
Fair Value Measurements - Measured at Estimated Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Assets: | ||||||
Mortgage loans held for sale | $ 17,628,535 | $ 13,275,735 | ||||
MSRs | 2,289,209 | $ 2,170,638 | 2,874,972 | $ 2,848,902 | $ 3,001,501 | $ 3,180,530 |
MSRs collateral for financing liability | 59,926 | 205,108 | ||||
Total assets | 22,377,762 | 16,867,788 | ||||
Liabilities: | ||||||
Derivative liability | 351,261 | 43,794 | ||||
MSRs financing liability | 58,926 | 189,987 | ||||
Total liabilities | 410,187 | 233,781 | ||||
IRLCs | ||||||
Assets: | ||||||
Derivative asset | 2,393,764 | 508,135 | ||||
Forward commitments | ||||||
Assets: | ||||||
Derivative asset | 6,328 | 3,838 | ||||
Liabilities: | ||||||
Derivative liability | 351,261 | 43,794 | ||||
Level 1 | ||||||
Assets: | ||||||
Mortgage loans held for sale | 0 | 0 | ||||
MSRs | 0 | 0 | ||||
MSRs collateral for financing liability | 0 | 0 | ||||
Total assets | 0 | 0 | ||||
Liabilities: | ||||||
MSRs financing liability | 0 | 0 | ||||
Total liabilities | 0 | 0 | ||||
Level 1 | IRLCs | ||||||
Assets: | ||||||
Derivative asset | 0 | 0 | ||||
Level 1 | Forward commitments | ||||||
Assets: | ||||||
Derivative asset | 0 | 0 | ||||
Liabilities: | ||||||
Derivative liability | 0 | 0 | ||||
Level 2 | ||||||
Assets: | ||||||
Mortgage loans held for sale | 17,212,435 | 12,966,942 | ||||
MSRs | 0 | 0 | ||||
MSRs collateral for financing liability | 0 | 0 | ||||
Total assets | 17,218,763 | 12,970,780 | ||||
Liabilities: | ||||||
MSRs financing liability | 0 | 0 | ||||
Total liabilities | 351,261 | 43,794 | ||||
Level 2 | IRLCs | ||||||
Assets: | ||||||
Derivative asset | 0 | 0 | ||||
Level 2 | Forward commitments | ||||||
Assets: | ||||||
Derivative asset | 6,328 | 3,838 | ||||
Liabilities: | ||||||
Derivative liability | 351,261 | 43,794 | ||||
Level 3 | ||||||
Assets: | ||||||
Mortgage loans held for sale | 416,100 | 308,793 | ||||
MSRs | 2,289,209 | 2,874,972 | ||||
MSRs collateral for financing liability | 59,926 | 205,108 | ||||
Total assets | 5,158,999 | 3,897,008 | ||||
Liabilities: | ||||||
MSRs financing liability | 58,926 | 189,987 | ||||
Total liabilities | 58,926 | 189,987 | ||||
Level 3 | IRLCs | ||||||
Assets: | ||||||
Derivative asset | 2,393,764 | 508,135 | ||||
Level 3 | Forward commitments | ||||||
Assets: | ||||||
Derivative asset | 0 | 0 | ||||
Liabilities: | ||||||
Derivative liability | $ 0 | $ 0 |
Fair Value Measurements - Quant
Fair Value Measurements - Quantitative Information for Level 3 Measurements (Details) - Level 3 | Jun. 30, 2020 | Dec. 31, 2019 |
Dealer pricing | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Mortgage loans held for sale | 0.65 | 0.75 |
Dealer pricing | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Mortgage loans held for sale | 1.03 | 1.03 |
Dealer pricing | Weighted Average | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Mortgage loans held for sale | 0.95 | 0.98 |
Loan funding probability | IRLCs | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivatives | 0 | 0 |
Loan funding probability | IRLCs | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivatives | 1 | 1 |
Loan funding probability | IRLCs | Weighted Average | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivatives | 0.74 | 0.72 |
Discount rate | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
MSRs, MSRs collateral for financing liability, and MSRs financing liability | 0.095 | 0.095 |
Discount rate | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
MSRs, MSRs collateral for financing liability, and MSRs financing liability | 0.120 | 0.120 |
Discount rate | Weighted Average | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
MSRs, MSRs collateral for financing liability, and MSRs financing liability | 0.100 | 0.100 |
Conditional prepayment rate | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
MSRs, MSRs collateral for financing liability, and MSRs financing liability | 0.027 | 0.074 |
Conditional prepayment rate | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
MSRs, MSRs collateral for financing liability, and MSRs financing liability | 0.296 | 0.445 |
Conditional prepayment rate | Weighted Average | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
MSRs, MSRs collateral for financing liability, and MSRs financing liability | 0.192 | 0.145 |
Fair Value Measurements - Recon
Fair Value Measurements - Reconciliation of Level 3 Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Loans Held for Sale | ||||
Reconciliation of Level 3 Assets: | ||||
Beginning balance | $ 418,090 | $ 166,946 | $ 308,793 | $ 194,752 |
Transfers in | 242,904 | 374,435 | 783,763 | 527,359 |
Transfers out / principal reduction | (235,617) | (265,856) | (660,986) | (447,725) |
Net transfers and revaluation gains | 0 | 0 | 0 | 0 |
Total gains (losses) included in net income | (9,277) | 1,026 | (15,470) | 2,165 |
Ending balance | 416,100 | 276,551 | 416,100 | 276,551 |
IRLCs | ||||
Reconciliation of Level 3 Assets: | ||||
Beginning balance | 1,214,865 | 372,105 | 508,135 | 245,663 |
Transfers in | 0 | 0 | 0 | 0 |
Transfers out / principal reduction | 0 | 0 | 0 | 0 |
Net transfers and revaluation gains | 1,178,899 | 135,082 | 1,885,629 | 261,524 |
Total gains (losses) included in net income | 0 | 0 | 0 | 0 |
Ending balance | $ 2,393,764 | $ 507,187 | $ 2,393,764 | $ 507,187 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value Option for Mortgage Loans Held for Sale (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Fair Value Disclosures [Abstract] | ||
Mortgage loans held for sale, at fair value | $ 17,628,535 | $ 13,275,735 |
Mortgage loans held for sale, principal amount due upon maturity | 16,819,756 | 12,929,143 |
Difference | $ 808,779 | $ 346,592 |
Fair Value Measurements - Liabi
Fair Value Measurements - Liabilities not Recorded at Fair Value on Recurring or Nonrecurring Basis (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Carrying Amount | Senior Notes due May 01 2025 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Senior Notes | $ 1,241,868 | $ 1,241,012 |
Carrying Amount | Senior Notes due Jan 15 2028 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Senior Notes | 993,853 | 992,779 |
Estimated Fair Value | Senior Notes due May 01 2025 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Senior Notes | 1,279,950 | 1,297,250 |
Estimated Fair Value | Senior Notes due Jan 15 2028 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Senior Notes | $ 1,045,320 | $ 1,046,683 |
Mortgage Servicing Rights - Sum
Mortgage Servicing Rights - Summary of Changes to MSR Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Servicing Asset at Fair Value, Amount [Roll Forward] | ||||
Fair value, beginning of period | $ 2,170,638 | $ 3,001,501 | $ 2,874,972 | $ 3,180,530 |
MSRs originated | 669,923 | 445,663 | 1,205,342 | 742,335 |
MSRs sales | 0 | 0 | (186,292) | 0 |
Changes in fair value: | ||||
Due to changes in valuation model inputs or assumptions | (272,885) | (391,348) | (1,078,421) | (712,327) |
Due to collection/realization of cash flows | (278,467) | (206,914) | (526,392) | (361,636) |
Total changes in fair value | (551,352) | (598,262) | (1,604,813) | (1,073,963) |
Fair value, end of period | $ 2,289,209 | $ 2,848,902 | $ 2,289,209 | $ 2,848,902 |
Mortgage Servicing Rights - Nar
Mortgage Servicing Rights - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Transfers and Servicing [Abstract] | ||||
UPB of mortgage loans serviced | $ 346,870,713 | $ 311,718,188 | ||
Delinquent loans as a percentage of total portfolio (percent) | 3.71% | |||
Book value of MSRs sold and not qualifying for sale accounting treatment | $ 340,000 | |||
Unrealized gains relating to the MSRs liability | $ 14,911 | |||
Unrealized losses relating to the MSRs collateral asset | $ 14,911 | |||
Book value of MSRs sold | $ 186,000 |
Mortgage Servicing Rights - S_2
Mortgage Servicing Rights - Summary of Fair Value Assumptions (Details) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Transfers and Servicing [Abstract] | ||
Discount rate (percent) | 10.00% | 10.00% |
Prepayment speeds (percent) | 19.20% | 14.50% |
Life (in years) | 4 years 1 month 20 days | 5 years 3 months 29 days |
Mortgage Servicing Rights - S_3
Mortgage Servicing Rights - Summary of Discount Rate and Prepayment Speeds at Two Different Data Points (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Discount Rate | ||
Discount Rate, 100 BPS Adverse Change | $ (73,814) | $ (101,495) |
Discount Rate, 200 BPS Adverse Change | (142,774) | (195,894) |
Prepayment Speeds | ||
Prepayment Speeds, 10% Adverse Change | (153,663) | (133,039) |
Prepayment Speeds, 20% Adverse Change | $ (298,727) | $ (259,346) |
Mortgage Loans Held for Sale (D
Mortgage Loans Held for Sale (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Mortgage Loans Held for Sale [Roll Forward] | ||
Balance at the beginning of period | $ 13,275,735 | $ 5,784,812 |
Disbursements of mortgage loans held for sale | 122,056,424 | 53,244,712 |
Proceeds from sales of mortgage loans held for sale | (121,559,129) | (51,504,181) |
Gain on sale of loans excluding fair value of MSRs, net | 3,855,505 | 863,403 |
Balance at the end of period | $ 17,628,535 | $ 8,388,746 |
Mortgage loans held for sale average holding period | 17 days |
Borrowings - Narrative (Details
Borrowings - Narrative (Details) | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Debt Instrument [Line Items] | |
Cash used to buy-down funding facilities and self-fund loans | $ 429,914,000 |
Buy-down funds | 265,000,000 |
Self-funding | 164,914,000 |
Unsecured line of credit, maturing Feb 28 2021 | Line of Credit | |
Debt Instrument [Line Items] | |
Line amount | $ 175,000,000 |
Funding facilities and Other financing facilities | Minimum | |
Debt Instrument [Line Items] | |
Commitment fees (percent) | 0.00% |
Funding facilities and Other financing facilities | Maximum | |
Debt Instrument [Line Items] | |
Commitment fees (percent) | 0.75% |
Borrowings - Funding Facilities
Borrowings - Funding Facilities (Details) - USD ($) | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2020 | Dec. 31, 2019 | Jan. 01, 2021 | Oct. 01, 2020 | Sep. 11, 2020 | Sep. 02, 2020 | |
Line of Credit Facility [Line Items] | ||||||
Total Funding Facilities | $ 15,685,860,000 | $ 12,041,878,000 | ||||
Funding Facilities | ||||||
Line of Credit Facility [Line Items] | ||||||
Line Amount | 20,400,000,000 | |||||
Committed Line Amount | 5,900,000,000 | |||||
Funding Facilities | MRA funding | ||||||
Line of Credit Facility [Line Items] | ||||||
Line Amount | 13,900,000,000 | |||||
Committed Line Amount | 5,900,000,000 | |||||
Master Repurchase Agreements | $ 11,836,905,000 | $ 9,526,652,000 | ||||
Funding Facilities | MRA funding | One-month LIBOR | Minimum | ||||||
Line of Credit Facility [Line Items] | ||||||
Basis spread on variable rate | 1.23% | 1.20% | ||||
Funding Facilities | MRA funding | One-month LIBOR | Maximum | ||||||
Line of Credit Facility [Line Items] | ||||||
Basis spread on variable rate | 2.30% | 2.30% | ||||
Funding Facilities | Master Repurchase Agreement Due Oct 22 2021 | ||||||
Line of Credit Facility [Line Items] | ||||||
Line Amount | $ 2,000,000,000 | |||||
Committed Line Amount | 100,000,000 | |||||
Master Repurchase Agreements | 1,999,963,000 | $ 835,302,000 | ||||
Funding Facilities | Master Repurchase Agreement Due Oct 22 2021 | Subsequent Event | ||||||
Line of Credit Facility [Line Items] | ||||||
Line Amount | $ 3,000,000,000 | |||||
Committed Line Amount | 100,000,000 | |||||
Funding Facilities | Master Repurchase Agreement Due Oct 22 2021 | Forecast | ||||||
Line of Credit Facility [Line Items] | ||||||
Line Amount | $ 2,000,000,000 | |||||
Committed Line Amount | $ 100,000,000 | |||||
Funding Facilities | Master Repurchase Agreement Due Dec 03 2020 | ||||||
Line of Credit Facility [Line Items] | ||||||
Line Amount | 1,750,000,000 | |||||
Committed Line Amount | 500,000,000 | |||||
Master Repurchase Agreements | 1,599,302,000 | 1,390,839,000 | ||||
Funding Facilities | Master Repurchase Agreement Due Dec 03 2020 | Forecast | ||||||
Line of Credit Facility [Line Items] | ||||||
Line Amount | $ 1,000,000,000 | |||||
Committed Line Amount | $ 500,000,000 | |||||
Funding Facilities | Master Repurchase Agreement Due Apr 22 2022 | ||||||
Line of Credit Facility [Line Items] | ||||||
Line Amount | 3,250,000,000 | |||||
Committed Line Amount | 1,000,000,000 | |||||
Master Repurchase Agreements | 2,476,494,000 | 2,622,070,000 | ||||
Funding Facilities | Master Repurchase Agreement Due Apr 22 2022 | Forecast | ||||||
Line of Credit Facility [Line Items] | ||||||
Line Amount | $ 2,750,000,000 | |||||
Committed Line Amount | 1,000,000,000 | |||||
Funding Facilities | Master Repurchase Agreement Due Sep 16 2020 | ||||||
Line of Credit Facility [Line Items] | ||||||
Line Amount | 1,500,000,000 | |||||
Committed Line Amount | 1,325,000,000 | |||||
Master Repurchase Agreements | $ 1,473,762,000 | 875,617,000 | ||||
Facility term | 12 months | |||||
Extension term | 3 months | |||||
Timing option for extending facility | 3 months | |||||
Funding Facilities | Master Repurchase Agreement Due Sep 16 2020 | Subsequent Event | ||||||
Line of Credit Facility [Line Items] | ||||||
Line Amount | 2,000,000,000 | |||||
Committed Line Amount | 1,700,000,000 | |||||
Funding Facilities | Master Repurchase Agreement Due Apr 22 2021 | ||||||
Line of Credit Facility [Line Items] | ||||||
Line Amount | $ 2,000,000,000 | |||||
Committed Line Amount | 500,000,000 | |||||
Master Repurchase Agreements | 1,270,770,000 | 2,063,099,000 | ||||
Funding Facilities | Master Repurchase Agreement Due Apr 22 2021 | Subsequent Event | ||||||
Line of Credit Facility [Line Items] | ||||||
Line Amount | 2,500,000,000 | |||||
Committed Line Amount | 500,000,000 | |||||
Funding Facilities | Master Repurchase Agreement Due Sep 05 2022 | ||||||
Line of Credit Facility [Line Items] | ||||||
Line Amount | 1,500,000,000 | |||||
Committed Line Amount | 1,500,000,000 | |||||
Master Repurchase Agreements | 1,450,543,000 | 965,903,000 | ||||
Funding Facilities | Master Repurchase Agreement Due Sep 05 2022 | Subsequent Event | ||||||
Line of Credit Facility [Line Items] | ||||||
Line Amount | 2,000,000,000 | |||||
Committed Line Amount | $ 1,500,000,000 | |||||
Funding Facilities | Master Repurchase Agreement Due Sep 05 2022 | Forecast | ||||||
Line of Credit Facility [Line Items] | ||||||
Line Amount | 2,000,000,000 | |||||
Committed Line Amount | $ 1,000,000,000 | |||||
Funding Facilities | Master Repurchase Agreement Due Oct 15 2020 | ||||||
Line of Credit Facility [Line Items] | ||||||
Line Amount | 1,500,000,000 | |||||
Committed Line Amount | 975,000,000 | |||||
Master Repurchase Agreements | 1,168,418,000 | 773,822,000 | ||||
Funding Facilities | Master Repurchase Agreement Due Jun 12 2021 | ||||||
Line of Credit Facility [Line Items] | ||||||
Line Amount | 400,000,000 | |||||
Committed Line Amount | 0 | |||||
Master Repurchase Agreements | 397,653,000 | 0 | ||||
Funding Facilities | Early Funding | ||||||
Line of Credit Facility [Line Items] | ||||||
Line Amount | 6,500,000,000 | |||||
Committed Line Amount | 0 | |||||
Early Funding Facilities | $ 3,848,955,000 | $ 2,515,226,000 | ||||
Funding Facilities | Early Funding | One-month LIBOR | Minimum | ||||||
Line of Credit Facility [Line Items] | ||||||
Basis spread on variable rate | 0.40% | 0.40% | ||||
Funding Facilities | Early Funding | One-month LIBOR | Maximum | ||||||
Line of Credit Facility [Line Items] | ||||||
Basis spread on variable rate | 1.00% | 0.85% | ||||
Funding Facilities | Early Funding Facility, one | ||||||
Line of Credit Facility [Line Items] | ||||||
Line Amount | $ 4,000,000,000 | |||||
Committed Line Amount | 0 | |||||
Early Funding Facilities | 2,806,083,000 | $ 2,022,179,000 | ||||
Funding Facilities | Early Funding Facility, two | ||||||
Line of Credit Facility [Line Items] | ||||||
Line Amount | 2,500,000,000 | |||||
Committed Line Amount | 0 | |||||
Early Funding Facilities | $ 1,042,872,000 | $ 493,047,000 | ||||
Time frame for review of line amount | 90 days |
Borrowings - Line of Credit Fin
Borrowings - Line of Credit Financing Facilities (Details) - USD ($) | 2 Months Ended | 6 Months Ended | 12 Months Ended | |
Sep. 02, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | Jan. 30, 2020 | |
Line of Credit Facility [Line Items] | ||||
Line of Credit Financing Facilities | $ 160,000,000 | $ 165,000,000 | ||
Early Buyout Financing Facilities | 241,752,000 | $ 196,247,000 | ||
Line of Credit Financing Facilities | ||||
Line of Credit Facility [Line Items] | ||||
Line Amount | 1,635,000,000 | |||
Committed Line Amount | $ 375,000,000 | |||
Line of Credit | Unsecured line of credit | One-month LIBOR | Minimum | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 1.25% | 1.25% | ||
Line of Credit | Unsecured line of credit | One-month LIBOR | Maximum | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 2.00% | 2.00% | ||
Line of Credit | Unsecured line of credit, maturing Nov 01 2024, RHI | Affiliated entity | ||||
Line of Credit Facility [Line Items] | ||||
Line Amount | $ 1,000,000,000 | |||
Committed Line Amount | 0 | |||
Line of Credit Financing Facilities | 0 | $ 0 | ||
Line of Credit | Unsecured line of credit, maturing Feb 28 2021 | ||||
Line of Credit Facility [Line Items] | ||||
Line Amount | 175,000,000 | |||
Committed Line Amount | 175,000,000 | |||
Line of Credit Financing Facilities | 85,000,000 | 90,000,000 | ||
Line of Credit | Unsecured line of credit, maturing Jun 23 2025, RHIO | Affiliated entity | ||||
Line of Credit Facility [Line Items] | ||||
Line Amount | 50,000,000 | |||
Committed Line Amount | 0 | |||
Line of Credit Financing Facilities | 0 | 0 | ||
Line of Credit | Perpetual unsecured line of credit, RHIO | Affiliated entity | ||||
Line of Credit Facility [Line Items] | ||||
Line Amount | 10,000,000 | |||
Committed Line Amount | 0 | |||
Line of Credit Financing Facilities | $ 0 | $ 0 | ||
Line of Credit | MSR line of credit | One-month LIBOR | Minimum | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 2.25% | 2.25% | ||
Line of Credit | MSR line of credit | One-month LIBOR | Maximum | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 4.00% | 4.00% | ||
Line of Credit | MSR line of credit, maturing Oct 22 2021 | ||||
Line of Credit Facility [Line Items] | ||||
Line Amount | $ 200,000,000 | |||
Committed Line Amount | 0 | |||
Line of Credit Financing Facilities | 0 | $ 0 | ||
Line of Credit | MSR line of credit, maturing Apr 30 2024 | ||||
Line of Credit Facility [Line Items] | ||||
Line Amount | 200,000,000 | |||
Committed Line Amount | 200,000,000 | |||
Line of Credit Financing Facilities | $ 75,000,000 | 75,000,000 | ||
Facility term | 5 years | |||
Facility revolving period | 3 years | |||
Facility amortization period | 2 years | |||
Line of Credit | Unsecured line of credit, maturing Jul 27 2025, RHI | Subsequent Event | Affiliated entity | ||||
Line of Credit Facility [Line Items] | ||||
Line Amount | $ 2,000,000,000 | |||
Revolving Credit Facility | Revolving credit facility | ||||
Line of Credit Facility [Line Items] | ||||
Line Amount | $ 0 | |||
Committed Line Amount | 0 | |||
Line of Credit Financing Facilities | 0 | $ 0 | ||
Revolving Credit Facility | Revolving credit facility due Aug 10 2023 | Subsequent Event | ||||
Line of Credit Facility [Line Items] | ||||
Line Amount | 950,000,000 | |||
Committed Line Amount | 950,000,000 | |||
Line of Credit Financing Facilities | $ 300,000,000 | |||
Facility term | 3 years | |||
Early Buyout Financing Facility | ||||
Line of Credit Facility [Line Items] | ||||
Line Amount | 500,000,000 | $ 500,000,000 | ||
Committed Line Amount | $ 0 | |||
Facility limit upon request and lender acceptance | $ 600,000,000 | |||
Early Buyout Financing Facility | One-month LIBOR | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 1.75% | 1.75% |
Borrowings - Unsecured Senior N
Borrowings - Unsecured Senior Notes (Details) - Unsecured Senior Notes - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | ||
Outstanding Balance | $ 2,260,000 | $ 2,260,000 |
2025 Senior Notes | ||
Debt Instrument [Line Items] | ||
Interest Rate (percent) | 5.75% | |
Outstanding Balance | $ 1,250,000 | 1,250,000 |
Unamortized debt issuance costs | $ 8,132 | 8,988 |
Redemption period start date | May 1, 2020 | |
2025 Senior Notes | Minimum | ||
Debt Instrument [Line Items] | ||
Redemption notice period (in days) | 30 days | |
2025 Senior Notes | Maximum | ||
Debt Instrument [Line Items] | ||
Redemption notice period (in days) | 60 days | |
2025 Senior Notes | Redemption period one | ||
Debt Instrument [Line Items] | ||
Redemption price (percent) | 102.875% | |
2025 Senior Notes | Redemption period two | ||
Debt Instrument [Line Items] | ||
Redemption price (percent) | 101.917% | |
2025 Senior Notes | Redemption period three | ||
Debt Instrument [Line Items] | ||
Redemption price (percent) | 100.958% | |
2025 Senior Notes | Redemption period four | ||
Debt Instrument [Line Items] | ||
Redemption price (percent) | 100.00% | |
2028 Senior Notes | ||
Debt Instrument [Line Items] | ||
Interest Rate (percent) | 5.25% | |
Outstanding Balance | $ 1,010,000 | 1,010,000 |
Unamortized debt issuance costs | 8,838 | 9,421 |
Unamortized discounts | $ 7,309 | $ 7,800 |
Redemption period start date | Jan. 15, 2023 | |
2028 Senior Notes | Minimum | ||
Debt Instrument [Line Items] | ||
Redemption notice period (in days) | 30 days | |
2028 Senior Notes | Maximum | ||
Debt Instrument [Line Items] | ||
Redemption notice period (in days) | 60 days | |
2028 Senior Notes | Redemption period one | ||
Debt Instrument [Line Items] | ||
Redemption price (percent) | 102.625% | |
2028 Senior Notes | Redemption period two | ||
Debt Instrument [Line Items] | ||
Redemption price (percent) | 101.75% | |
2028 Senior Notes | Redemption period three | ||
Debt Instrument [Line Items] | ||
Redemption price (percent) | 100.875% | |
2028 Senior Notes | Redemption period four | ||
Debt Instrument [Line Items] | ||
Redemption price (percent) | 100.00% |
Transactions with Related Par_3
Transactions with Related Parties - Narrative (Details) - USD ($) | Jun. 23, 2020 | Dec. 24, 2019 | Jan. 10, 2019 | Sep. 02, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Jun. 09, 2017 | Jan. 06, 2017 |
Related Party Transaction [Line Items] | |||||||||||
Lines of credit | $ 160,000,000 | $ 160,000,000 | $ 165,000,000 | ||||||||
Affiliated entity | Line of Credit | Unsecured line of credit, maturing Nov 01 2024, RHI | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Line amount | 1,000,000,000 | 1,000,000,000 | |||||||||
Lines of credit | 0 | 0 | 0 | ||||||||
Affiliated entity | Line of Credit | Perpetual unsecured line of credit, RHIO | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Line amount | 10,000,000 | 10,000,000 | |||||||||
Lines of credit | 0 | 0 | 0 | ||||||||
Affiliated entity | Line of Credit | Unsecured line of credit, maturing Jun 23 2025, RHIO | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Line amount | 50,000,000 | 50,000,000 | |||||||||
Lines of credit | 0 | 0 | 0 | ||||||||
Affiliated entity | Promissory Note—Shareholders Note | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Notes receivable | 0 | $ 0 | 57,457,000 | $ 55,983,000 | |||||||
Accrued interest | $ 1,474,000 | ||||||||||
Interest rate (percent) | 2.38% | ||||||||||
Affiliated entity | RHI credit agreement | Line of Credit | Unsecured line of credit, maturing Nov 01 2024, RHI | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Line amount | $ 1,000,000,000 | $ 300,000,000 | |||||||||
Affiliated entity | RHI credit agreement | Line of Credit | Unsecured line of credit, maturing Nov 01 2024, RHI | One-month LIBOR | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Basis spread on variable rate | 1.25% | ||||||||||
Affiliated entity | RHIO credit agreement | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Interest rate (percent) | 5.00% | 5.00% | |||||||||
Affiliated entity | RHIO credit agreement | Line of Credit | Perpetual unsecured line of credit, RHIO | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Line amount | $ 10,000,000 | ||||||||||
Interest rate (percent) | 5.00% | ||||||||||
Affiliated entity | RHIO credit agreement | Line of Credit | Unsecured line of credit, maturing Jun 23 2025, RHIO | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Line amount | $ 50,000,000 | ||||||||||
Affiliated entity | RHIO credit agreement | Line of Credit | Unsecured line of credit, maturing Jun 23 2025, RHIO | One-month LIBOR | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Basis spread on variable rate | 1.25% | ||||||||||
Affiliated entity | Services, products and other transactions | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Revenue from related parties | 1,920,000 | $ 2,283,000 | $ 3,755,000 | $ 3,887,000 | |||||||
Affiliated receivables | 17,028,000 | 17,028,000 | $ 29,431,000 | ||||||||
General and administrative expenses from transactions with related parties | 23,258,000 | 12,706,000 | 38,181,000 | 21,276,000 | |||||||
Affiliated payables | 52,192,000 | 52,192,000 | $ 25,082,000 | ||||||||
Affiliated entity | Bedrock lease agreements | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Expenses from transaction with related parties | $ 17,560,000 | $ 17,380,000 | $ 33,957,000 | $ 34,775,000 | |||||||
Affiliated entity | Subsequent Event | Line of Credit | Unsecured line of credit, maturing Jul 27 2025, RHI | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Line amount | $ 2,000,000,000 | ||||||||||
Affiliated entity | Subsequent Event | RHI credit agreement | Line of Credit | Unsecured line of credit, maturing Jul 27 2025, RHI | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Line amount | 2,000,000,000 | ||||||||||
Affiliated entity | Subsequent Event | RHI credit agreement | Line of Credit | Unsecured line of credit, maturing Jul 31 2025, RHI | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Line amount | $ 100,000,000 | ||||||||||
Affiliated entity | Subsequent Event | RHI credit agreement | Line of Credit | Unsecured line of credit, maturing Jul 31 2025, RHI | One-month LIBOR | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Basis spread on variable rate | 1.25% | ||||||||||
RockLoans Opportunities LLC | Line of Credit | Perpetual unsecured line of credit, RHIO | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Negative covenant, debt limit | $ 500,000 |
Transactions with Related Par_4
Transactions with Related Parties - Receivables from and Payables to Related Parties (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | Jan. 06, 2017 | |
Related Party Transaction [Line Items] | |||
Notes receivable and due from affiliates | $ 17,028 | $ 89,946 | |
Notes payable and due to affiliates | 61,192 | 35,082 | |
Affiliated entity | |||
Related Party Transaction [Line Items] | |||
Notes receivable and due from affiliates | 17,028 | 89,946 | |
Notes payable and due to affiliates | 61,192 | 35,082 | |
Affiliated entity | Promissory Note—Shareholders Note | |||
Related Party Transaction [Line Items] | |||
Promissory Note—Shareholders Note | 0 | $ 57,457 | $ 55,983 |
Interest rate (percent) | 2.38% | ||
Affiliated entity | RHIO Line of Credit | |||
Related Party Transaction [Line Items] | |||
RHIO Line of Credit | $ 9,000 | $ 10,000 | |
Interest rate (percent) | 5.00% | 5.00% | |
Affiliated entity | Services, products and other transactions | |||
Related Party Transaction [Line Items] | |||
Affiliated receivables and other notes | $ 17,028 | $ 32,489 | |
Affiliated payables | $ 52,192 | $ 25,082 |
Other Assets (Details)
Other Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Margin call receivable from counterparty | $ 195,932 | $ 3,697 |
Mortgage production related receivables | 154,225 | 157,276 |
Disbursement funds advanced | 82,391 | 56,721 |
Non-production-related receivables | 64,456 | 35,530 |
Prepaid expenses | 61,387 | 62,199 |
Ginnie Mae buyouts | 59,961 | 78,174 |
Goodwill and other intangible assets | 38,079 | 40,261 |
Other real estate owned | 1,653 | 1,619 |
Other | 56,705 | 64,181 |
Other assets | $ 714,789 | $ 499,658 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Total income before income (loss) taxes and non-controlling interest | $ 3,481,880 | $ (54,259) | $ 3,579,896 | $ (354,608) |
Total provision for (benefit from) income taxes | $ 20,669 | $ (283) | $ 21,405 | $ (1,287) |
Effective tax provision rate | 0.59% | 0.52% | 0.60% | 0.36% |
Derivative Financial Instrume_3
Derivative Financial Instruments - Net Hedging Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Forward commitments | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Hedging losses | $ (510,804) | $ (598) | $ (1,507,788) | $ (34,453) |
Derivative Financial Instrume_4
Derivative Financial Instruments - Notional and Fair Values (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Derivative [Line Items] | ||
Derivative liability | $ 351,261 | $ 43,794 |
IRLCs | ||
Derivative [Line Items] | ||
Derivative asset | 2,393,764 | 508,135 |
Derivative liability | 0 | 0 |
Forward commitments | ||
Derivative [Line Items] | ||
Derivative asset | 6,328 | 3,838 |
Derivative liability | 351,261 | 43,794 |
Not Designated | IRLCs | ||
Derivative [Line Items] | ||
Notional value | 46,035,933 | 15,439,960 |
Not Designated | Forward commitments | ||
Derivative [Line Items] | ||
Notional value | $ 57,969,480 | $ 26,637,275 |
Derivative Financial Instrume_5
Derivative Financial Instruments - Narrative (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Cash pledged to counterparties | $ 195,932 | $ 3,697 |
Derivative Financial Instrume_6
Derivative Financial Instruments - Gross Amounts Recognized Subject to Master Netting Agreements (Details) - Not Designated - Forward commitments - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Offsetting Assets [Line Items] | ||
Gross Amount of Recognized Assets | $ 15,786 | $ 6,690 |
Gross Amounts Offset in the Condensed Combined Balance Sheet | (9,458) | (2,852) |
Net Assets Presented in the Condensed Combined Balance Sheet | 6,328 | 3,838 |
Gross Amount of Recognized Liabilities | (555,239) | (89,389) |
Gross Amounts Offset in the Condensed Combined Balance Sheet | 203,978 | 45,595 |
Net Liabilities Presented in the Condensed Combined Balance Sheet | $ (351,261) | $ (43,794) |
Commitments, Contingencies, a_3
Commitments, Contingencies, and Guarantees - Narrative (Details) | Mar. 14, 2018USD ($) | Jun. 30, 2020USD ($)lawsuitguarantee | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)lawsuitguarantee | Jun. 30, 2019USD ($) | Dec. 31, 2019USD ($)guarantee |
Other Commitments [Line Items] | ||||||
Escrow payable for property taxes and insurance | $ 4,139,441,000 | $ 4,139,441,000 | $ 2,617,016,000 | |||
Escrow payable for principal and interest | 9,834,764,000 | 9,834,764,000 | 6,726,793,000 | |||
Trademark license expense | 1,555,251,000 | $ 991,804,000 | 2,824,070,000 | $ 1,923,925,000 | ||
Judgement awarded For damages, interest, and fees | $ 739,600,000 | |||||
Actual damages awarded | 235,400,000 | |||||
Punitive damages awarded | 470,800,000 | |||||
Prejudgment interest | 28,900,000 | |||||
Attorney fees | 4,500,000 | |||||
Financial Guarantee | ||||||
Other Commitments [Line Items] | ||||||
Guaranteed debt total amount | $ 15,000,000 | $ 15,000,000 | $ 15,000,000 | |||
Number of separate guarantees | guarantee | 3 | 3 | 3 | |||
Guarantee One | Financial Guarantee | ||||||
Other Commitments [Line Items] | ||||||
Guaranteed debt total amount | $ 5,000,000 | $ 5,000,000 | $ 5,000,000 | |||
Guarantee Two | Financial Guarantee | ||||||
Other Commitments [Line Items] | ||||||
Guaranteed debt total amount | 5,000,000 | 5,000,000 | 5,000,000 | |||
Guarantee Three | Financial Guarantee | ||||||
Other Commitments [Line Items] | ||||||
Guaranteed debt total amount | $ 5,000,000 | $ 5,000,000 | $ 5,000,000 | |||
TCPA class action lawsuits | ||||||
Other Commitments [Line Items] | ||||||
Number of lawsuits | lawsuit | 5 | 5 | ||||
Amrock vs HouseCanary, Inc. | ||||||
Other Commitments [Line Items] | ||||||
Damages awarded to plaintiff | $ 706,200,000 | |||||
Minimum | Quicken Loans and Amrock lawsuit in the U.S. District Court of the Northern District Of West Virginia | ||||||
Other Commitments [Line Items] | ||||||
Aggregate possible losses | $ 0 | $ 0 | ||||
Maximum | Quicken Loans and Amrock lawsuit in the U.S. District Court of the Northern District Of West Virginia | ||||||
Other Commitments [Line Items] | ||||||
Aggregate possible losses | 15,000,000 | 15,000,000 | ||||
Trademark license | ||||||
Other Commitments [Line Items] | ||||||
Trademark license expense | 1,875,000 | $ 1,875,000 | $ 3,750,000 | $ 3,750,000 | ||
IRLCs | ||||||
Other Commitments [Line Items] | ||||||
Average number of days until expiration of interest rate lock commitments | 44 days | 44 days | ||||
Mortgages | ||||||
Other Commitments [Line Items] | ||||||
Commitments to sell loans | 4,106,301,000 | $ 4,106,301,000 | $ 2,859,710,000 | |||
MSRs with Servicing Released | ||||||
Other Commitments [Line Items] | ||||||
Commitments to sell loans | $ 2,747,000 | $ 2,747,000 | $ 78,446,000 |
Commitments, Contingencies, a_4
Commitments, Contingencies, and Guarantees - Interest Rate Lock Commitments (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Commitments and Contingencies Disclosure [Abstract] | ||
IRLCs UPB, Fixed Rate | $ 60,868,152 | $ 20,577,282 |
IRLCs UPB, Variable Rate | $ 1,299,825 | $ 974,693 |
Commitments, Contingencies, a_5
Commitments, Contingencies, and Guarantees - Investor Reserves Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Investor Reserve [Roll Forward] | ||||
Balance at beginning of period | $ 55,667 | $ 56,645 | $ 54,387 | $ 56,943 |
Provision for (benefit from) investor reserves | 7,786 | (1,145) | 9,363 | (652) |
Premium recapture and indemnification losses paid | (441) | (258) | (738) | (1,049) |
Balance at end of period | $ 63,012 | $ 55,242 | $ 63,012 | $ 55,242 |
Minimum Net Worth Requirements
Minimum Net Worth Requirements (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Compliance with Regulatory Capital Requirements for Mortgage Companies [Line Items] | ||
Minimum capital ratio requirement, Adjusted/Tangible Net Worth to Total Assets | 0.06 | |
Minimum adjusted net worth balance | $ 1,698,906,000 | $ 1,179,928,000 |
Fannie Mae and Freddie Mac | ||
Compliance with Regulatory Capital Requirements for Mortgage Companies [Line Items] | ||
Minimum base net worth requirement | $ 2,500,000 | |
Minimum net worth requirement, basis point component per outstanding UPB | 0.25% | |
Minimum liquidity requirement, basis points per total Agency servicing | 0.035% | |
Minimum liquidity requirement, basis points per total nonperforming Agency servicing | 2.00% | |
Minimum liquidity requirement, threshold percentage of nonperforming Agency servicing in excess of total Agency servicing | 6.00% | |
Ginnie Mae | ||
Compliance with Regulatory Capital Requirements for Mortgage Companies [Line Items] | ||
Minimum base net worth requirement | $ 2,500,000 | |
Minimum net worth requirement, basis point component per single-family effective outstanding obligations | 0.35% | |
Minimum liquidity requirement, liquid assets amount | $ 1,000,000 | |
Minimum liquidity requirement, liquid assets as basis points per outstanding single-family MBS | 0.10% |
Segments - Key Operating Data f
Segments - Key Operating Data for Business Segments (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)segment | Jun. 30, 2019USD ($) | |
Segment Reporting [Abstract] | ||||
Number of reportable segments | segment | 2 | |||
Segment Reporting Information [Line Items] | ||||
Gain on sale | $ 4,753,584 | $ 1,112,459 | $ 6,575,693 | $ 1,839,705 |
Interest income | 78,039 | 61,585 | 152,081 | 108,637 |
Interest expense on funding facilities | (53,756) | (32,430) | (93,215) | (56,043) |
Servicing fee income | 249,842 | 240,255 | 506,935 | 464,861 |
Change in fair value of MSRs | (552,843) | (598,262) | (1,544,095) | (1,073,963) |
Other income | 562,265 | 153,938 | 806,567 | 286,120 |
Total revenue, net | 5,037,131 | 937,545 | 6,403,966 | 1,569,317 |
Plus: Decrease in MSRs due to valuation assumptions | 274,377 | 391,348 | 1,017,704 | 712,327 |
Adjusted revenue | 5,311,508 | 1,328,893 | 7,421,670 | 2,281,644 |
Directly attributable expenses | 1,216,503 | 715,125 | 2,137,354 | 1,343,509 |
Contribution margin | 4,095,005 | 613,768 | 5,284,316 | 938,135 |
Reportable Segments | ||||
Segment Reporting Information [Line Items] | ||||
Gain on sale | 4,755,154 | 1,099,625 | 6,569,433 | 1,815,525 |
Interest income | 77,388 | 60,772 | 150,269 | 107,208 |
Interest expense on funding facilities | (53,699) | (31,959) | (92,805) | (55,207) |
Servicing fee income | 248,873 | 240,002 | 504,863 | 463,345 |
Change in fair value of MSRs | (552,843) | (598,262) | (1,544,095) | (1,073,963) |
Other income | 246,397 | 102,002 | 411,030 | 185,300 |
Total revenue, net | 4,721,270 | 872,180 | 5,998,695 | 1,442,208 |
Plus: Decrease in MSRs due to valuation assumptions | 274,377 | 391,348 | 1,017,704 | 712,327 |
Adjusted revenue | 4,995,647 | 1,263,528 | 7,016,399 | 2,154,535 |
Directly attributable expenses | 1,088,040 | 665,317 | 1,960,604 | 1,252,594 |
Contribution margin | 3,907,607 | 598,211 | 5,055,795 | 901,941 |
Reportable Segments | Direct to Consumer | ||||
Segment Reporting Information [Line Items] | ||||
Gain on sale | 4,020,492 | 997,707 | 5,631,324 | 1,663,481 |
Interest income | 51,012 | 38,930 | 98,322 | 73,330 |
Interest expense on funding facilities | (35,397) | (20,585) | (60,782) | (37,807) |
Servicing fee income | 248,873 | 240,002 | 504,863 | 463,345 |
Change in fair value of MSRs | (552,843) | (598,262) | (1,544,095) | (1,073,963) |
Other income | 206,538 | 98,747 | 351,561 | 175,466 |
Total revenue, net | 3,938,675 | 756,539 | 4,981,193 | 1,263,852 |
Plus: Decrease in MSRs due to valuation assumptions | 274,377 | 391,348 | 1,017,704 | 712,327 |
Adjusted revenue | 4,213,052 | 1,147,887 | 5,998,897 | 1,976,179 |
Directly attributable expenses | 948,900 | 606,186 | 1,729,520 | 1,150,475 |
Contribution margin | 3,264,152 | 541,701 | 4,269,377 | 825,704 |
Reportable Segments | Partner Network | ||||
Segment Reporting Information [Line Items] | ||||
Gain on sale | 734,662 | 101,918 | 938,109 | 152,044 |
Interest income | 26,376 | 21,842 | 51,947 | 33,878 |
Interest expense on funding facilities | (18,302) | (11,374) | (32,023) | (17,400) |
Servicing fee income | 0 | 0 | 0 | 0 |
Change in fair value of MSRs | 0 | 0 | 0 | 0 |
Other income | 39,859 | 3,255 | 59,469 | 9,834 |
Total revenue, net | 782,595 | 115,641 | 1,017,502 | 178,356 |
Plus: Decrease in MSRs due to valuation assumptions | 0 | 0 | 0 | 0 |
Adjusted revenue | 782,595 | 115,641 | 1,017,502 | 178,356 |
Directly attributable expenses | 139,140 | 59,131 | 231,084 | 102,119 |
Contribution margin | 643,455 | 56,510 | 786,418 | 76,237 |
All Other | ||||
Segment Reporting Information [Line Items] | ||||
Gain on sale | (1,570) | 12,834 | 6,260 | 24,180 |
Interest income | 651 | 813 | 1,812 | 1,429 |
Interest expense on funding facilities | (57) | (471) | (410) | (836) |
Servicing fee income | 969 | 253 | 2,072 | 1,516 |
Change in fair value of MSRs | 0 | 0 | 0 | 0 |
Other income | 315,868 | 51,936 | 395,537 | 100,820 |
Total revenue, net | 315,861 | 65,365 | 405,271 | 127,109 |
Plus: Decrease in MSRs due to valuation assumptions | 0 | 0 | 0 | 0 |
Adjusted revenue | 315,861 | 65,365 | 405,271 | 127,109 |
Directly attributable expenses | 128,463 | 49,808 | 176,750 | 90,915 |
Contribution margin | $ 187,398 | $ 15,557 | $ 228,521 | $ 36,194 |
Segments - Reconciliation of Se
Segments - Reconciliation of Segment Contribution Margin to U.S. GAAP Net Income Before Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Segment reporting reconciliation [Line Items] | ||||
Contribution margin, excluding change in MSRs due to valuation assumptions | $ 4,095,005 | $ 613,768 | $ 5,284,316 | $ 938,135 |
Decrease in MSRs due to valuation assumptions | (274,377) | (391,348) | (1,017,704) | (712,327) |
Contribution margin, including change in MSRs due to valuation assumptions | 3,820,628 | 222,420 | 4,266,612 | 225,808 |
Salaries, commissions and team member benefits | 853,750 | 486,768 | 1,537,200 | 944,546 |
General and administrative expenses | 288,494 | 165,343 | 482,060 | 331,182 |
Depreciation and amortization | 16,189 | 17,687 | 32,304 | 35,792 |
Interest and amortization expense on non-funding debt | 33,168 | 33,086 | 66,275 | 66,168 |
Other expenses | 161,452 | 61,156 | 286,041 | 109,576 |
Income (loss) before income taxes | 3,481,880 | (54,259) | 3,579,896 | (354,608) |
Expenses not allocated to segments | ||||
Segment reporting reconciliation [Line Items] | ||||
Salaries, commissions and team member benefits | 205,100 | 140,587 | 403,950 | 292,409 |
General and administrative expenses | 90,231 | 85,223 | 188,991 | 184,332 |
Depreciation and amortization | 16,189 | 17,687 | 32,304 | 35,792 |
Interest and amortization expense on non-funding debt | 33,168 | 33,086 | 66,275 | 66,168 |
Other expenses | $ (5,940) | $ 96 | $ (4,804) | $ 1,715 |