Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 05, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 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 | Q3 | |
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 $0.00001 per share | |
Trading Symbol | RKT | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | No | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Class A common stock | ||
Entity Listings [Line Items] | ||
Entity Common Stock, Shares Outstanding | 115,372,565 | |
Class D common stock | ||
Entity Listings [Line Items] | ||
Entity Common Stock, Shares Outstanding | 1,869,079,483 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Assets | ||
Cash and cash equivalents | $ 3,485,137 | $ 1,394,571 |
Restricted cash | 85,351 | 61,154 |
Mortgage loans held for sale, at fair value | 21,677,400 | 13,275,735 |
Mortgage servicing rights (“MSRs”), at fair value | 2,606,149 | 2,874,972 |
MSRs collateral for financing liability, at fair value | 0 | 205,108 |
Notes receivable and due from affiliates | 13,071 | 89,937 |
Property and equipment, net of accumulated depreciation and amortization of $473,218 and $428,540, respectively | 208,029 | 176,446 |
Deferred tax asset, net | 542,438 | 0 |
Lease right of use assets | 241,513 | 278,921 |
Loans subject to repurchase right from Ginnie Mae | 5,554,471 | 752,442 |
Other assets | 736,802 | 501,587 |
Total assets | 37,752,829 | 20,122,846 |
Liabilities: | ||
Funding facilities | 19,089,399 | 12,041,878 |
Lines of credit | 374,971 | 165,000 |
Senior Notes, net | 4,217,194 | 2,233,791 |
Early buy out facility | 213,339 | 196,247 |
MSRs financing liability, at fair value | 0 | 189,987 |
Accounts payable | 252,551 | 157,397 |
Lease liabilities | 274,608 | 314,353 |
Forward commitments, at fair value | 238,004 | 43,794 |
Investor reserves | 57,018 | 54,387 |
Notes payable and due to affiliates | 72,896 | 62,225 |
Tax receivable agreement liability | 558,142 | 0 |
Loans subject to repurchase right from Ginnie Mae | 5,554,471 | 752,442 |
Other liabilities | 489,500 | 395,790 |
Total liabilities | 31,392,093 | 16,607,291 |
Equity: | ||
Net parent investment | 0 | 3,510,698 |
Additional paid-in capital | 272,806 | 0 |
Retained earnings | 57,568 | 0 |
Accumulated other comprehensive income (loss) | 288 | (151) |
Non-controlling interest | 6,030,054 | 5,008 |
Total equity | 6,360,736 | 3,515,555 |
Total liabilities and equity | 37,752,829 | 20,122,846 |
Class A common stock | ||
Equity: | ||
Common stock | 1 | |
Class B common stock | ||
Equity: | ||
Common stock | 0 | |
Class C common stock | ||
Equity: | ||
Common stock | 0 | |
Class D common stock | ||
Equity: | ||
Common stock | 19 | |
IRLCs | ||
Assets | ||
Derivatives, at fair value | 2,590,319 | 508,135 |
Forward commitments | ||
Assets | ||
Derivatives, at fair value | 12,149 | 3,838 |
Liabilities: | ||
Forward commitments, at fair value | $ 238,004 | $ 43,794 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Property and equipment, accumulated depreciation and amortization | $ 473,218 | $ 428,540 |
Class A common stock | ||
Common stock, par value (in dollars per share) | $ 0.00001 | |
Common stock authorized | 10,000,000,000 | |
Common stock issued | 115,372,565 | |
Common stock outstanding | 115,372,565 | |
Class B common stock | ||
Common stock, par value (in dollars per share) | $ 0.00001 | |
Common stock authorized | 6,000,000,000 | |
Common stock issued | 0 | |
Common stock outstanding | 0 | |
Class C common stock | ||
Common stock, par value (in dollars per share) | $ 0.00001 | |
Common stock authorized | 6,000,000,000 | |
Common stock issued | 0 | |
Common stock outstanding | 0 | |
Class D common stock | ||
Common stock, par value (in dollars per share) | $ 0.00001 | |
Common stock authorized | 6,000,000,000 | |
Common stock issued | 1,869,079,483 | |
Common stock outstanding | 1,869,079,483 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income and Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Gain on sale of loans: | ||||
Gain on sale of loans excluding fair value of MSRs, net | $ 3,443,885 | $ 1,143,506 | $ 8,814,236 | $ 2,240,876 |
Fair value of originated MSRs | 836,557 | 416,730 | 2,041,899 | 1,159,065 |
Gain on sale of loans, net | 4,280,442 | 1,560,236 | 10,856,135 | 3,399,941 |
Loan servicing loss: | ||||
Servicing fee income | 272,158 | 236,229 | 779,093 | 701,090 |
Change in fair value of MSRs | (374,765) | (390,619) | (1,918,860) | (1,464,582) |
Loan servicing loss, net | (102,607) | (154,390) | (1,139,767) | (763,492) |
Interest income: | ||||
Interest income | 79,890 | 63,649 | 231,971 | 172,286 |
Interest expense on funding facilities | (69,364) | (34,423) | (162,580) | (90,466) |
Interest income, net | 10,526 | 29,226 | 69,391 | 81,820 |
Other income | 445,757 | 185,353 | 1,250,481 | 470,931 |
Total revenue, net | 4,634,118 | 1,620,425 | 11,036,240 | 3,189,200 |
Expenses | ||||
Salaries, commissions and team member benefits | 816,408 | 564,332 | 2,354,021 | 1,509,180 |
General and administrative expenses | 280,705 | 159,058 | 763,962 | 490,998 |
Marketing and advertising expenses | 250,558 | 240,303 | 670,749 | 676,964 |
Depreciation and amortization | 15,329 | 21,382 | 47,633 | 57,174 |
Interest and amortization expense on non-funding debt | 38,016 | 33,052 | 104,291 | 99,220 |
Other expenses | 176,036 | 102,551 | 452,709 | 208,409 |
Total expenses | 1,577,052 | 1,120,678 | 4,393,365 | 3,041,945 |
Income before income taxes | 3,057,066 | 499,747 | 6,642,875 | 147,255 |
Provision for income taxes | (61,683) | (5,117) | (84,363) | (4,291) |
Net income | 2,995,383 | 494,630 | 6,558,512 | 142,964 |
Net income attributable to non-controlling interest | (2,937,480) | (494,630) | (6,500,609) | (142,964) |
Net income attributable to Rocket Companies | $ 57,903 | 0 | $ 57,903 | 0 |
Earnings per share of Class A common stock: | ||||
Basic (in dollars per share) | $ 0.54 | $ 0.54 | ||
Diluted (in dollars per share) | $ 0.54 | $ 0.54 | ||
Weighted average shares outstanding: | ||||
Basic (shares) | 106,265,422 | 106,265,422 | ||
Diluted (shares) | 106,265,422 | 106,265,422 | ||
Comprehensive income: | ||||
Net income attributable to Rocket Companies | $ 57,903 | 0 | $ 57,903 | 0 |
Other comprehensive income | 2 | 0 | 2 | 0 |
Unrealized loss on investment securities | (4) | 0 | (4) | 0 |
Comprehensive income attributable to Rocket Companies | $ 57,901 | $ 0 | $ 57,901 | $ 0 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Equity - USD ($) $ in Thousands | Total | Prior to reorganization transactions | Subsequent to reorganization transactions | IPO | Greenshoe option | Common StockClass A common stock | Common StockClass A common stockIPO | Common StockClass A common stockGreenshoe option | Common StockClass D common stock | Common StockClass D common stockIPO | Common StockClass D common stockGreenshoe option | Additional Paid-in Capital | Additional Paid-in CapitalSubsequent to reorganization transactions | Additional Paid-in CapitalIPO | Additional Paid-in CapitalGreenshoe option | Retained Earnings | Retained EarningsSubsequent to reorganization transactions | Net Parent Investment | Net Parent InvestmentPrior to reorganization transactions | Accumulated Other Comprehensive (Loss) Income | Accumulated Other Comprehensive (Loss) IncomePrior to reorganization transactions | Accumulated Other Comprehensive (Loss) IncomeSubsequent to reorganization transactions | Total Non-controlling Interest | Total Non-controlling InterestPrior to reorganization transactions | Total Non-controlling InterestSubsequent to reorganization transactions | Total Non-controlling InterestIPO |
Beginning Balance at Dec. 31, 2018 | $ 2,788,786 | $ 0 | $ 0 | $ 0 | $ 0 | $ 2,783,484 | $ (868) | $ 6,170 | ||||||||||||||||||
Beginning Balance (shares) at Dec. 31, 2018 | 0 | 0 | ||||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||||||||
Net income (loss) | (298,769) | (298,442) | (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 | 2,285,935 | $ 0 | $ 0 | 0 | 0 | 2,280,753 | (714) | 5,896 | ||||||||||||||||||
Ending Balance (shares) at Mar. 31, 2019 | 0 | 0 | ||||||||||||||||||||||||
Beginning Balance at Dec. 31, 2018 | 2,788,786 | $ 0 | $ 0 | 0 | 0 | 2,783,484 | (868) | 6,170 | ||||||||||||||||||
Beginning Balance (shares) at Dec. 31, 2018 | 0 | 0 | ||||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||||||||
Net income (loss) | 142,964 | |||||||||||||||||||||||||
Ending Balance at Sep. 30, 2019 | 2,753,390 | $ 0 | $ 0 | 0 | 0 | 2,748,606 | (519) | 5,303 | ||||||||||||||||||
Ending Balance (shares) at Sep. 30, 2019 | 0 | 0 | ||||||||||||||||||||||||
Beginning Balance at Mar. 31, 2019 | 2,285,935 | $ 0 | $ 0 | 0 | 0 | 2,280,753 | (714) | 5,896 | ||||||||||||||||||
Beginning Balance (shares) at Mar. 31, 2019 | 0 | 0 | ||||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||||||||
Net income (loss) | (52,897) | (52,573) | (324) | |||||||||||||||||||||||
Other comprehensive income (loss) | 542 | 444 | 98 | |||||||||||||||||||||||
Stock based compensation, net | 8,459 | 8,450 | 9 | |||||||||||||||||||||||
Ending Balance at Jun. 30, 2019 | 2,242,039 | $ 0 | $ 0 | 0 | 0 | 2,236,630 | (270) | 5,679 | ||||||||||||||||||
Ending Balance (shares) at Jun. 30, 2019 | 0 | 0 | ||||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||||||||
Net income (loss) | 494,630 | 494,960 | (330) | |||||||||||||||||||||||
Other comprehensive income (loss) | (304) | (249) | (55) | |||||||||||||||||||||||
Net transfers to Parent | 8,568 | 8,568 | ||||||||||||||||||||||||
Stock based compensation, net | 8,457 | 8,448 | 9 | |||||||||||||||||||||||
Ending Balance at Sep. 30, 2019 | 2,753,390 | $ 0 | $ 0 | 0 | 0 | 2,748,606 | (519) | 5,303 | ||||||||||||||||||
Ending Balance (shares) at Sep. 30, 2019 | 0 | 0 | ||||||||||||||||||||||||
Beginning Balance at Dec. 31, 2019 | 3,515,555 | $ 0 | $ 0 | 0 | 0 | 3,510,698 | (151) | 5,008 | ||||||||||||||||||
Beginning Balance (shares) at Dec. 31, 2019 | 0 | 0 | ||||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||||||||
Net income (loss) | 99,046 | 99,487 | (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 | 3,663,818 | $ 0 | $ 0 | 0 | 0 | 3,661,152 | (1,590) | 4,256 | ||||||||||||||||||
Ending Balance (shares) at Mar. 31, 2020 | 0 | 0 | ||||||||||||||||||||||||
Beginning Balance at Dec. 31, 2019 | 3,515,555 | $ 0 | $ 0 | 0 | 0 | 3,510,698 | (151) | 5,008 | ||||||||||||||||||
Beginning Balance (shares) at Dec. 31, 2019 | 0 | 0 | ||||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||||||||
Net income (loss) | 6,558,512 | |||||||||||||||||||||||||
Ending Balance at Sep. 30, 2020 | 6,360,736 | $ 1 | $ 19 | 272,806 | 57,568 | 0 | 288 | 6,030,054 | ||||||||||||||||||
Ending Balance (shares) at Sep. 30, 2020 | 115,372,565 | 1,869,079,483 | ||||||||||||||||||||||||
Beginning Balance at Mar. 31, 2020 | 3,663,818 | $ 0 | $ 0 | 0 | 0 | 3,661,152 | (1,590) | 4,256 | ||||||||||||||||||
Beginning Balance (shares) at Mar. 31, 2020 | 0 | 0 | ||||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||||||||
Net income (loss) | 3,464,082 | 3,464,518 | (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 (loss) on investment securities | 7,087 | 7,087 | ||||||||||||||||||||||||
Non-controlling interest attributed to dissolution | (884) | (884) | ||||||||||||||||||||||||
Ending Balance at Jun. 30, 2020 | 5,553,447 | $ 0 | $ 0 | 0 | 0 | 5,544,443 | 5,929 | 3,075 | ||||||||||||||||||
Ending Balance (shares) at Jun. 30, 2020 | 0 | 0 | ||||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||||||||
Net income (loss) | 2,995,383 | $ 1,080,106 | $ 1,915,278 | $ 53,056 | $ 1,080,283 | $ (177) | $ 1,862,222 | |||||||||||||||||||
Other comprehensive income (loss) | 377 | 34 | $ 309 | $ 2 | 68 | 32 | ||||||||||||||||||||
Net transfers from Parent | (2,236,995) | (2,236,995) | ||||||||||||||||||||||||
Effect of reorganization transactions | 36,732 | $ 20 | 245,920 | (4,388,616) | (5,923) | 4,185,331 | ||||||||||||||||||||
Effect of reorganization transactions (shares) | 372,565 | 1,984,079,483 | ||||||||||||||||||||||||
Distributions for state taxes on behalf of shareholders, net | (6,005) | (335) | (5,670) | |||||||||||||||||||||||
Proceeds received from stock issuance | $ 1,744,075 | $ 263,925 | $ 1 | $ 1,758,719 | $ 263,925 | $ (14,645) | ||||||||||||||||||||
Proceeds received from stock issuance (shares) | 100,000,000 | 15,000,000 | (100,000,000) | (15,000,000) | ||||||||||||||||||||||
Use of proceeds to purchase Class D shares and Holding Units from RHI | (2,023,425) | $ (1) | (2,023,424) | |||||||||||||||||||||||
Increase in controlling interest resulting from Greenshoe | 0 | 2,047 | 4,847 | (26) | (6,868) | |||||||||||||||||||||
Stock based compensation, net | $ 888 | $ 32,365 | $ 25,619 | $ 885 | $ 3 | $ 6,746 | ||||||||||||||||||||
Unrealized gain (loss) on investment securities | (66) | (3) | (63) | |||||||||||||||||||||||
Ending Balance at Sep. 30, 2020 | $ 6,360,736 | $ 1 | $ 19 | $ 272,806 | $ 57,568 | $ 0 | $ 288 | $ 6,030,054 | ||||||||||||||||||
Ending Balance (shares) at Sep. 30, 2020 | 115,372,565 | 1,869,079,483 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Operating activities | ||
Net income (loss) | $ 6,558,512 | $ 142,964 |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Depreciation and amortization | 47,633 | 57,174 |
Change in non-controlling interest | 0 | 0 |
Origination of mortgage servicing rights | (2,041,899) | (1,159,065) |
Change in fair value of MSRs | 1,918,860 | 1,464,582 |
Gain on sale of loans excluding fair value of MSRs, net | (8,814,236) | (2,240,876) |
Disbursements of mortgage loans held for sale | (209,540,623) | (92,839,248) |
Proceeds from sale of loans held for sale | 208,127,818 | 88,686,026 |
Stock-based compensation expense | 93,565 | 25,423 |
Change in assets and liabilities: | ||
Due from affiliates | 16,350 | (3,649) |
Deferred tax asset, net | 32,021 | 0 |
Other assets | (232,635) | (46,809) |
Accounts payable | 95,154 | 70,193 |
Due to affiliates | 20,130 | 10,663 |
Premium recapture and indemnification losses paid | (3,067) | (1,252) |
Other liabilities | 60,797 | (67,997) |
Total adjustments | (10,220,132) | (6,044,835) |
Net cash used in operating activities | (3,661,620) | (5,901,871) |
Investing activities | ||
Proceeds from sale of MSRs | 320,028 | 0 |
Net decrease (increase) in notes receivable from affiliates | 60,516 | |
Net decrease (increase) in notes receivable from affiliates | (1,239) | |
Decrease (increase) in mortgage loans held for investment | 6,203 | |
Decrease (increase) in mortgage loans held for investment | (15,022) | |
Net increase in investment securities | (2,500) | 0 |
Purchase and other additions of property and equipment, net of disposals | (73,195) | (37,380) |
Net cash provided by (used in) investing activities | 311,052 | (53,641) |
Financing activities | ||
Net borrowings on funding facilities | 7,047,521 | 5,428,336 |
Net borrowings on lines of credit | 209,971 | 0 |
Net borrowings on senior notes, net | 2,000,000 | 0 |
Net borrowings on early buy out facility | 17,092 | 119,780 |
Net (payments) borrowings notes payable from unconsolidated affiliates | (9,459) | |
Net (payments) borrowings notes payable from unconsolidated affiliates | 35,483 | |
Proceeds from MSRs financing liability | 14,121 | 323,288 |
Issuance of Class D Shares to RHI | 20 | 0 |
Proceeds from Class A Shares Issued prior to Offering | 6,706 | 0 |
Proceeds received from IPO, net of cost | 1,744,075 | 0 |
Proceeds received from Greenshoe option | 263,925 | 0 |
Use of Proceeds to Purchase Class D Shares and Holding Units from RHI | (2,023,424) | 0 |
Cash distributions to holding company | (6,005) | 0 |
Net transfers to Parent | (3,798,582) | (204,209) |
Net cash provided by financing activities | 5,465,961 | 5,702,678 |
Effects of exchange rate changes on cash and cash equivalents | (630) | 426 |
Net increase (decrease) in cash and cash equivalents and restricted cash | 2,114,763 | (252,408) |
Cash and cash equivalents and restricted cash, beginning of period | 1,455,725 | 1,136,322 |
Cash and cash equivalents and restricted cash, end of period | 3,570,488 | 883,914 |
Non-cash activities | ||
Loans transferred to other real estate owned | 960 | 2,305 |
Supplemental disclosures | ||
Cash paid for interest on related party borrowings | $ 2,126 | $ 3,403 |
Business, Basis of Presentation
Business, Basis of Presentation, and Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business, Basis of Presentation, and Accounting Policies | Business, Basis of Presentation, and Accounting Policies Rocket Companies, Inc. (the "Company", and together with its consolidated subsidiaries, "Rocket Companies", "we", "us", "our") was incorporated in Delaware on February 26, 2020 as a wholly owned subsidiary of Rock Holdings Inc. ("RHI") for the purpose of facilitating an initial public offering ("IPO") of its Class A common stock and other related transactions in order to carry on the business of RKT Holdings, LLC ("Holdings") and its wholly owned subsidiaries. We are a Detroit-based company consisting of tech-driven real estate, mortgage and financial service businesses. Our flagship business, Rocket Mortgage, almost exclusively offers Government Sponsored Enterprise ("GSE") conforming, and government insured mortgage loan products, which are marketed in all 50 states through the internet, national television and other marketing channels. In addition to our mortgage business, we have expanded into complementary industries, such as real estate, personal lending, and auto sales. Our ecosystem is a series of connected businesses centered on delivering better solutions to our clients through our technology and scale. Rocket Companies, Inc. is a holding company. Its primary material asset is the equity interest in Holdings which, through its direct and indirect subsidiaries, conducts all of the Company's operations. Holdings is a Michigan limited liability company and wholly owns Quicken Loans, LLC, Amrock Holdco, LLC (“Amrock”), LMB HoldCo LLC (“Core Digital Media”), RCRA Holdings LLC (“Rock Connections” and “Rocket Auto”), Rocket Homes Real Estate LLC (“Rocket Homes”), RockLoans Holdings LLC (“Rocket Loans”), Rock Central LLC, EFB Holdings Inc. (“Edison Financial”), Lendesk Canada Holdings Inc., RockTech Canada Inc., Nexsys Technologies LLC (“Nexsys”), and Woodward Capital Management LLC. Because Rocket Companies, Inc. is the managing member of Holdings, Rocket Companies, Inc. indirectly operates and controls all of the business affairs of Holdings and its subsidiaries. As used herein, “Rocket Mortgage” refers to either the Rocket Mortgage brand or platform, or the Quicken Loans business, as the context allows. Initial Public Offering On August 10, 2020 we completed the IPO of our common stock pursuant to a Registration Statement on Form S-1 (File No. 333-239726), which closed on August 10, 2020. In the IPO, we sold an aggregate of 115,000,000 shares of Class A common stock, including 15,000,000 shares of Class A common stock purchased by the underwriters on September 9, 2020 pursuant to the underwriters’ option to purchase additional shares at the initial public offering price, less underwriting discounts and commissions. Rocket Companies, Inc. received net proceeds from the IPO of approximately $2,023,000 after deducting underwriting discounts and commissions, all of which was used to purchase 115,000,000 non-voting membership units of Holdings (the “Holdings Units”) and shares of Class D common stock from RHI. Prior to the completion of the offering, RHI, Holdings and its subsidiaries consummated an internal reorganization. As a result of the IPO and the reorganization: • Rocket Companies, Inc. is the sole managing member of Holdings, which owns direct interests in (a) Rocket Mortgage and (b) various other former direct subsidiaries of RHI. • Dan Gilbert, our founder and Chairman (our "Chairman"), RHI, and Rocket Companies, Inc. are members of Holdings. • The certificate of incorporation of Rocket Companies, Inc. was amended to, among other things, authorize the Company to issue four classes of common stock: Class A common stock, Class B common stock, Class C common stock and Class D common stock. The Class A common stock and Class C common stock each provide holders with one vote on all matters submitted to a vote of stockholders, and the Class B common stock and Class D common stock each provide holders with 10 votes on all matters submitted to a vote of stockholders. The holders of Class C common stock and Class D common stock do not have any of the economic rights (including rights to dividends and distributions upon liquidation) provided to holders of Class A common stock and Class B common stock. • 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. In connection with the reorganization, we entered into a Tax Receivable Agreement (the “Tax Receivable Agreement”) with RHI and our Chairman that will obligate us to make payments to RHI and our Chairman generally equal to 90% of the applicable cash savings that we actually realize as a result of the tax attributes generated by (i) certain increases in our allocable share of the tax basis in Holdings’ assets resulting from (a) the purchases of Holdings Units (along with the corresponding shares of our Class D common stock or Class C common stock) from RHI and our Chairman (or their transferees of Holdings Units or other assignees) using the net proceeds from our initial public offering or in any future offering, (b) exchanges by RHI and our Chairman (or their transferees of Holdings Units or other assignees) of Holdings Units (along with the corresponding shares of our Class D common stock or Class C common stock) for cash or shares of our Class B common stock or Class A common stock, as applicable, or (c) payments under the Tax Receivable Agreement; (ii) tax benefits related to imputed interest deemed arising as a result of payments made under the Tax Receivable Agreement and (iii) disproportionate allocations (if any) of tax benefits to Holdings as a result of section 704(c) of the Internal Revenue Code of 1986, as amended (the “Code”) that relate to the reorganization transactions. We will retain the remaining 10% benefit of these tax savings. As the reorganization is considered transactions between entities under common control, the financial statements for the periods prior to the IPO and reorganization have been adjusted to combine the previously separate entities for presentation. Prior to the reorganization, Rocket Companies, Inc. had no operations. Basis of Presentation and Consolidation Prior to the completion of our reorganization and IPO, as defined above and in our registration statement on form S-1, RKT Holdings, LLC and its subsidiaries operated as part of RHI and not as a stand-alone entity. Income from RKT Holdings, LLC and its subsidiaries prior to the reorganization and IPO have been accounted for as a non-controlling interest in our Condensed Consolidated Statements of Income. Our Condensed Consolidated Statements of Changes in Equity presents the accumulated net income prior to the reorganization and IPO in net parent investment as the financial statements prior to the reorganization and IPO reflect combined subsidiaries operating as part of RHI. As part of our reorganization, we reorganized the legal structure of our entities, so they are all under a single parent entity, RKT Holdings, LLC. As the sole managing member of Holdings, the Company operates and controls all of the business and affairs of Holdings, and through Holdings and its subsidiaries, conducts its business. Because we manage and operate the business and control the strategic decisions and day-to-day operations of Holdings and also have a substantial financial interest in Holdings, we consolidate the financial results of Holdings, and a portion of our net income is allocated to the non-controlling interests. RKT Holdings, LLC is considered a variable interest entity, or VIE. In addition, because RKT Holdings, LLC and its subsidiaries are under the common control of RHI, we account for the reorganization as a reorganization of entities under common control and will initially measure the interests of RHI in the assets and liabilities of Holdings at their carrying amounts as of the date of the completion of the reorganization. The net parent investment as a result of the common control transaction with Rocket Companies, Inc. was allocated between non-controlling interest and additional paid-in capital based on the ownership of RKT Holdings, LLC. Prior to the reorganization and IPO, 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 consolidated 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 consolidated financial statements and are reflected in the accompanying Condensed Consolidated Statements of Changes in Equity as “Net transfers to/from parent” and in the accompanying Condensed Consolidated Balance Sheets within “Net parent investment.” In conjunction with the reorganization and IPO, we reclassified RHI's historical net parent investment in us to additional paid-in-capital. All significant intercompany transactions and accounts between the businesses comprising the Company have been eliminated in the accompanying condensed consolidated financial statements. All transactions and accounts between RHI and the Company have a history of settlement or will 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. Our condensed consolidated financial statements are unaudited and presented in U.S. dollars. They have been prepared in accordance with accounting principles generally accepted in the United States of America ("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 Consolidated Balance Sheet as of December 31, 2019 has been derived from our audited combined financial statements at that date. Our condensed consolidated 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. Our condensed consolidated financial statements for periods prior to the reorganization and IPO have been derived from our combined financial statements, which combined the subsidiaries that historically operated as part of RHI and were included in the IPO registration statement, with further adjustments only to comply with the presentation requirements for consolidated financial statements purposes and to reflect retrospectively the Amrock Title Insurance Company ("ATI") common control acquisition as discussed further below in the Acquisition Agreement section. Amounts for the period from July 1, 2020 through August 5, 2020, from January 1, 2020 through August 5, 2020, as of December 31, 2019, and for the three months and nine months ended September 30, 2019 presented in the condensed consolidated financial statements and notes to condensed consolidated financial statements herein represent the historical operations of the Company including those of ATI. These amounts are prepared on a basis materially consistent, including intercompany eliminations, with the amounts as of September 30, 2020 and for the period from August 6, 2020 through September 30, 2020, reflecting the consolidated operations of the Company including ATI. The December 31, 2019 balance sheet of the Company is immaterially different from the audited financial statements as a result of the ATI common control transaction. We believe the assumptions underlying the condensed consolidated financial statements, including the assumptions regarding allocation of expenses from RHI are reasonable. Prior to the reorganization and IPO, the executive management compensation expense has been allocated based on time incurred for services provided to Holdings and its subsidiaries. Total costs allocated to us for these services were $8,042 and $11,596 for the three months ended September 30, 2020 and 2019, and $94,776 and $33,526 for the nine months ended September 30, 2020 and 2019, respectively. These amounts were included in salaries, commissions and team member benefits in our Condensed Consolidated Statements of Income and Comprehensive Income. In our opinion, these condensed consolidated 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. 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 the initial public offering of $18.00 per share (the number of shares issued equals the purchase price divided by the price to the 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 shares and Holding Units to RHI. Because the Acquisition was a transaction between commonly controlled entities, U.S. GAAP requires the retrospective combination of the entities for all periods presented as if the combination had been in effect since the inception of common control. Accordingly, the Company’s unaudited condensed consolidated financial statements included in this Form 10-Q, including for the three and nine months ended September 30, 2019 and as of December 31, 2019, reflect the retrospective combination of the entities as if the combination had been in effect since inception of common control. Management Estimates The preparation of condensed consolidated 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 consolidated 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 consolidated financial statements, the Company evaluated events and transactions for potential recognition or disclosure through the date these condensed consolidated financial statements were issued. Refer to Note 5, Borrowings for disclosures on changes to the Company’s debt agreements that occurred subsequent to September 30, 2020, w hich includes additional details on the 5.75% Senior Notes with an $1,250,000 balance as of September 30, 2020 that were redeemed in October 2020. Subsequent to September 30, 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 September 30, 2020. The sale represented approximately 5.0% of the Company’s total single-family mortgage servicing portfolio as of September 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. Share Repurchase Authorization The Company's Board of Directors approved a share repurchase program effective November 10, 2020. The share repurchase program authorizes the Company to repurchase outstanding shares of the Company’s common stock, of any Class, in an aggregate value, not to exceed $1 billion dollars, from time to time, in the open market or through privately negotiated transactions, in accordance with applicable securities laws. The share repurchase program will remain in effect for a two-year period. The share repurchase program does not obligate the Company to make any repurchases at any specific time. The timing and extent to which the Company repurchases its shares will depend upon, among other things, market conditions, share price, liquidity targets, regulatory requirements and other factors. 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 $5,755 and $9,847 for the three months ended September 30, 2020 and 2019, respectively, and $18,819 and $31,138 for the nine months ended September 30, 2020 and 2019, respectively. Professional service fees —Professional service fee revenues were $3,528 and $2,399 for the three months ended September 30, 2020 and 2019, and $7,155 and $6,286 for the nine months ended September 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 $13,633 and $13,286 for the three months ended September 30, 2020 and 2019, and $33,459 and $31,853 for the nine months ended September 30, 2020 and 2019, respectively. Rock Connections contact center revenue —Contact center revenue was $6,246 and $6,456 for the three months ended September 30, 2020 and 2019, and $19,403 and $19,701 for the nine months ended September 30, 2020 and 2019, respectively. Amrock closing fees —Closing fees were $122,735 and $53,672 for the three months ended September 30, 2020 and 2019, and $302,260 and $126,995 for the nine months ended September 30, 2020 and 2019, respectively. Amrock appraisal revenue, net —Appraisal revenue, net was $20,655 and $20,408 for the three months ended September 30, 2020 and 2019, and $59,054 and $56,591 for the nine months ended September 30, 2020 and 2019, respectively. Cash, Cash Equivalents and Restricted Cash Restricted cash as of September 30, 2020 and 2019 consisted of cash on deposit for a repurchase facility and client application deposits, title premiums collected from the insured that are due to the underwritten insurance company and a $25,000 bond. September 30, 2020 2020 2019 Cash and cash equivalents $ 3,485,137 $ 818,328 Restricted cash 85,351 65,586 Total cash, cash equivalents, and restricted cash in the statement of cash flows $ 3,570,488 $ 883,914 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 Consolidated Balance Sheets and establish a corresponding finance liability regardless of the Company's intention to repurchase the loan. Non-controlling interests As noted above, we are the sole managing member of Holdings and consolidate the financial results of Holdings. Therefore, we report a non-controlling interest based on the Holdings Units of Holdings held by our Chairman and RHI (the "non-controlling interest holders") on our Condensed Consolidated Balance Sheets. Income or loss is attributed to the non-controlling interests based on the weighted average Holdings Units outstanding during the period and is presented on the Condensed Consolidated Statements of Income and Comprehensive Income. Refer to Note 14, Non-controlling Interests for more information. Stock-based Compensation In connection with the IPO, equity-based awards were issued under the Rocket Companies, Inc. 2020 Omnibus Incentive Plan including restricted stock units and stock options to purchase shares of our Class A common stock at an exercise price equal to the price to the public in the initial public offering. Stock-based compensation expense is recorded as a component of salaries, commissions and team member benefits. Stock-based compensation expense is recognized on a straight-line basis over the requisite service period based on the fair value of the award on the date of grant, refer to Note 15, Stock-based Compensation for additional information. Income taxes Our income tax expense, deferred tax assets and liabilities, and reserves for unrecognized tax benefits reflect management’s best assessment of estimated current and future taxes to be paid. We are subject to income taxes predominantly in the United States and Canada. These tax laws are often complex and may be subject to different interpretations. To determine the financial statement impact of accounting for income taxes, the Company must make assumptions and judgements about how to interpret and apply these complex tax laws to numerous transactions and business events, as well as make judgements regarding the timing of when certain items may affect taxable income in the United States and Canada. In calculating the provision for interim income taxes, in accordance with ASC Topic 740 Income Taxes, we apply an estimated annual effective tax rate to year-to-date ordinary income. At the end of each interim period, we estimate the effective tax rate expected to be applicable for the full fiscal year. 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. Deferred income taxes arise from temporary differences between the tax and financial statement recognition of revenue and expense. In evaluating our ability to recover our deferred tax assets within the jurisdiction from which they arise we consider all available positive and negative evidence including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and recent financial operations. In projecting future taxable income, we begin with historical results and changes in accounting policies and incorporate assumptions including the amount of future state, federal, and foreign pretax operating income, the reversal of temporary differences, the implementation of feasible and prudent tax planning strategies. If it is determined that a deferred tax asset is not realizable, a valuation allowance is established. The valuation allowance may be reversed in a subsequent reporting period if the Company determines that based on revised estimates of future taxable income or changes in tax planning strategies, it is more likely than not that all or part of the deferred tax asset will become realizable. Our interpretations of tax laws are subject to review and examination by various taxing authorities and jurisdictions where the Company operates, and disputes may occur regarding its view on a tax position. These disputes over interpretations with the various tax authorities may be settled by audit, administrative appeals or adjudication in the court systems of the tax jurisdictions in which the Company operates. We regularly review whether we may be assessed additional income taxes as a result of the resolution of these matters, and the Company records additional reserves as appropriate. In addition, the Company may revise its estimate of income taxes due to changes in income tax laws, legal interpretations, and business strategies. We recognize the financial statement effects of uncertain income tax positions when it is more likely than not, based on the technical merits, that the position will be sustained upon examination. Also, we recognize accrued interest and penalties related to liabilities for uncertain income tax positions in income tax expense. For additional information regarding our provision for income taxes refer to Note 8, Income Taxe s. Tax Receivable Agreement In connection with the reorganization, we entered into a Tax Receivable Agreement with RHI and our Chairman that will obligate us to make payments to RHI and our Chairman generally equal to 90% of the applicable cash savings that we actually realize as a result of the tax attributes generated by (i) certain increases in our allocable share of the tax basis in Holdings’ assets resulting from (a) the purchases of Holdings Units (along with the corresponding shares of our Class D common stock or Class C common stock) from RHI and our Chairman (or their transferees of Holdings Units or other assignees) using the net proceeds from our initial public offering or in any future offering, (b) exchanges by RHI and our Chairman (or their transferees of Holdings Units or other assignees) of Holdings Units (along with the corresponding shares of our Class D common stock or Class C common stock) for cash or shares of our Class B common stock or Class A common stock, as applicable, or (c) payments under the Tax Receivable Agreement; (ii) tax benefits related to imputed interest deemed arising as a result of payments made under the Tax Receivable Agreement and (iii) disproportionate allocations (if any) of tax benefits to Holdings as a result of section 704(c) of the Code that relate to the reorganization transactions. We will retain the benefit of the remaining 10% of these tax savings. Basic and Diluted Earnings Per Share The Company applies the two-class method for calculating and presenting earnings per share by separately presenting earnings per share for Class A common stock and Class B common stock. In applying the two-class method, the Company allocates undistributed earnings equally on a per share basis between Class A and Class B common stock. According to the Company’s certificate of incorporation, the holders of the Class A and Class B common stock are entitled to participate in earnings equally on a per-share basis, as if all shares of common stock were of a single class, and in such dividends as may be declared by the board of directors. Holders of the Class A and Class B common stock also have equal priority in liquidation. Shares of Class C and Class D common stock do not participate in earnings of Rocket Companies, Inc. As a result, the shares of Class C and Class D common stock are not considered participating securities and are not included in the weighted-average shares outstanding for purposes of earnings per share. Restricted stock units awarded as part of the Company’s compensation program, described in Note 15, Stock-based Compensation , are included in the weighted-average Class A shares outstanding in the calculation of basic EPS once the units are fully vested. Refer to Note 16, Earnings Per Share for more information. 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 measured 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 consolidated 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 consolidated 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 consolidated 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 consolidated financial statements and related disclosures. In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The amendments in this update change how entities account for convertible instruments and contracts in an entity’s own equity. The standard simplifies the accounting for certain convertible instruments, amends guidance on derivative scope exceptions for contracts in an entity's own equity, and modifies the guidance on diluted earnings per share (EPS) calculations as a result of these changes. This standard |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value MeasurementsFair 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 September 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 nine months ended September 30, 2020 or the year ended December 31, 2019. Level 1 Level 2 Level 3 Total Balance at September 30, 2020 Assets: Mortgage loans held for sale $ — $ 21,301,368 $ 376,032 $ 21,677,400 IRLCs — — 2,590,319 2,590,319 MSRs — — 2,606,149 2,606,149 Forward commitments — 12,149 — 12,149 Total assets $ — $ 21,313,517 $ 5,572,500 $ 26,886,017 Liabilities: Forward commitments — 238,004 — 238,004 Total liabilities $ — $ 238,004 $ — $ 238,004 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: September 30, 2020 December 31, 2019 Unobservable Input Range Range Mortgage loans held for sale Dealer pricing 65 % - 104% (95) % 75 % - 103% (98) % IRLCs Loan funding probability 0 % - 100% (73) % 0 % - 100% (72) % MSRs, MSRs collateral for financing liability, and MSRs financing liability Discount rate 9.5 % - 12.0% (9.9) % 9.5 % - 12.0% (10.0) % Conditional prepayment rate 13.7 % - 47.5% (18.1) % 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 nine months ended September 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 June 30, 2020 $ 416,100 $ 2,393,764 Transfers in(1) 122,763 — Transfers out/principal reductions(1) (164,211) — Net transfers and revaluation gains — 196,555 Total gains included in net income 1,380 — Balance at September 30, 2020 $ 376,032 $ 2,590,319 Balance at June 30, 2019 $ 276,551 $ 507,187 Transfers in(1) 288,321 — Transfers out/principal reductions(1) (241,519) — Net transfers and revaluation gains — 245,077 Total losses included in net income (1,330) — Balance at September 30, 2019 $ 322,023 $ 752,264 Loans Held for Sale IRLCs Balance at December 31, 2019 $ 308,793 $ 508,135 Transfers in(1) 906,527 — Transfers out/principal reductions(1) (825,197) — Net transfers and revaluation gains — 2,082,184 Total losses included in net income (14,091) — Balance at September 30, 2020 $ 376,032 $ 2,590,319 Balance at December 31, 2018 $ 194,752 $ 245,663 Transfers in(1) 815,680 — Transfers out/principal reductions(1) (689,244) — Net transfers and revaluation gains — 506,601 Total gains included in net income 835 — Balance at September 30, 2019 $ 322,023 $ 752,264 _________________________ (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 September 30, 2020 $ 21,677,400 $ 20,748,798 $ 928,602 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: September 30, 2020 December 31, 2019 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Senior Notes, due 5/1/2025 $ 1,242,296 $ 1,287,463 $ 1,241,012 $ 1,297,250 Senior Notes, due 1/15/2028 $ 994,390 $ 1,062,985 $ 992,779 $ 1,046,683 Senior Notes, due 3/1/2029 $ 742,881 $ 742,080 — — Senior Notes, due 3/1/2031 $ 1,237,627 $ 1,239,513 — — The fair value of Senior Notes, was calculated using the observable bond price at September 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 | 9 Months Ended |
Sep. 30, 2020 | |
Transfers and Servicing [Abstract] | |
Mortgage Servicing Rights | Mortgage Servicing Rights Mortgage servicing rights are recognized as assets on the Condensed Consolidated Balance Sheets 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 identified for sale, 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 nine months ended: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Fair value, beginning of period $ 2,289,209 $ 2,848,902 $ 2,874,972 $ 3,180,530 MSRs originated 836,557 416,730 2,041,899 1,159,065 MSRs sales (140,359) (340,280) (326,652) (340,280) Changes in fair value: Due to changes in valuation model inputs or assumptions(1) (113,547) (180,428) (1,191,967) (892,755) Due to collection/realization of cash flows (265,711) (210,191) (792,103) (571,827) Total changes in fair value (379,258) (390,619) (1,984,070) (1,464,582) Fair value, end of period $ 2,606,149 $ 2,534,733 $ 2,606,149 $ 2,534,733 _________________________ (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 September 30, 2020 and December 31, 2019 was $368,243,032 and $311,718,188, respectively. The portfolio primarily consists of high quality performing agency and government (FHA and VA) loans. As of September 30, 2020, delinquent loans (defined as 60-plus days past-due) were 3.91% of our total portfolio. Excluding clients in forbearance plans, our delinquent loans (defined as 60-plus days past-due) were 0.71% as of September 30, 2020. 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 was 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 continued 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 lapsed. 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 Consolidated Statements of Income and Comprehensive Income. The unrealized gain of $58,926 relating to the MSRs liability and the offsetting unrealized loss of $58,926 relating to the MSRs asset were recorded in current operations for the quarter ended September 30, 2020. 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. Furthermore, in the nine months ended September 30, 2020, the Company also sold MSRs with a book value of $326,653 relating to certain mortgage loans, which qualified for sale accounting treatment under U.S. GAAP. 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: September 30, December 31, Discount rate 9.9 % 10.0 % Prepayment speeds 18.1 % 14.5 % Life (in years) 4.49 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 September 30, 2020 Mortgage servicing rights $ (86,711) $ (167,475) $ (147,055) $ (281,752) December 31, 2019 Mortgage servicing rights $ (101,495) $ (195,894) $ (133,039) $ (259,346) |
Mortgage Loans Held for Sale
Mortgage Loans Held for Sale | 9 Months Ended |
Sep. 30, 2020 | |
Receivables [Abstract] | |
Mortgage Loans Held for Sale | Mortgage Loans Held for Sale The 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 Condensed Consolidated Statements of Cash Flows is below: Nine Months Ended 2020 2019 Balance at the beginning of period $ 13,275,735 $ 5,784,812 Disbursements of mortgage loans held for sale 209,540,623 92,839,248 Proceeds from sales of mortgage loans held for sale(1) (208,122,820) (88,675,431) Gain on sale of loans excluding fair value of MSRs, net(2) 6,983,862 1,591,696 Balance at the end of period $ 21,677,400 $ 11,540,325 _________________________ (1) The proceeds from sales of loans held for sale on the Condensed Consolidated 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 Condensed Consolidated 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 for the nine months ended September 30, 2020 is, on average, approximately 18 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 | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Borrowings | Borrowings The Company maintains various 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 0.50% 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 September 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 September 30, 2020, $660,531 of the Company’s cash was used to buy-down our funding facilities and self-fund, $350,000 of which are buy-down funds that are included in cash on the balance sheet and $310,531 of which is self-funding that reduces cash on the balance sheet. The Company has the right to withdraw the $350,000 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 $310,531 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: (1) incur additional debt or issue preferred stock; (2) pay dividends or make distributions in respect of capital stock; (3) purchase or redeem capital stock; (4) make investments or other restricted payments; (5) sell assets; (6) enter into transactions with affiliates; (7) effect a consolidation or merger, taken as a whole; and (8) designate our subsidiaries as unrestricted subsidiaries, unless certain conditions are met, as defined in the agreements; (9) merge, consolidate or sell, transfer or lease assets, and; (10) create liens on assets. Items (1) through (9) apply to the 2025 and 2028 Senior Notes. Items (9) and (10) apply to the 2029 and 2031 Senior Notes, which have investment grade covenants. Funding Facilities Facility Type Collateral Maturity Line Amount Committed Line Amount Outstanding Balance September 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 $ 599,945 $ 835,302 2) Master Repurchase Agreement(2)(10) Mortgage loans held for sale(9) 12/3/2020 1,750,000 500,000 1,300,601 1,390,839 3) Master Repurchase Agreement(3)(10) Mortgage loans held for sale(9) 4/22/2022 3,250,000 1,000,000 2,663,264 2,622,070 4) Master Repurchase Agreement(4)(10) Mortgage loans held for sale(9) 7/26/2021 2,000,000 1,700,000 1,874,996 875,617 5) Master Repurchase Agreement(10) Mortgage loans held for sale(9) 4/22/2021 2,500,000 500,000 1,892,852 2,063,099 6) Master Repurchase Agreement(5)(10) Mortgage loans held for sale(9) 9/5/2022 2,000,000 1,500,000 1,732,478 965,903 7) Master Repurchase Agreement(10) Mortgage loans held for sale(9) 9/1/2021 1,750,000 1,137,500 1,332,027 773,822 8) Master Repurchase Agreement(10) Mortgage loans held for sale(9) 6/12/2021 400,000 — 337,951 — 9) Master Repurchase Agreement(10) Mortgage loans held for sale(9) 9/24/2021 1,500,000 750,000 852,205 — 10) Master Repurchase Agreement(6)(10) Mortgage loans held for sale(9) (6) — — — — $ 17,150,000 $ 7,187,500 $ 12,586,319 $ 9,526,652 Early Funding: 11) Early Funding Facility(7)(11) Mortgage loans held for sale(9) (7) 4,000,000 — 4,536,792 2,022,179 12) Early Funding Facility(8)(11) Mortgage loans held for sale(9) (8) 2,500,000 — 1,966,288 493,047 6,500,000 — 6,503,080 2,515,226 Total $ 23,650,000 $ 7,187,500 $ 19,089,399 $ 12,041,878 _________________________ (1) Subsequent to September 30, 2020, this facility was amended to temporarily increase the total facility size to $3,000,000 with $100,000 committed from November 2, 2020 through November 15, 2020. Subsequent to November 15, 2020, the facility will decrease to $2,000,000 with $100,000 committed. (2) This facility had an overall line size of $1,750,000 with $500,000 committed until September 30, 2020. Subsequent to September 30, 2020, the facility decreased to $1,500,000 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 decrease to $2,750,000 with $1,000,000 committed. (4) 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. Subsequent to September 30, 2020 this facility was extended 3-months and is now maturing on October 26, 2021. (5) This facility will have an overall size of $2,000,000 with $1,500,000 committed until December 30, 2020. Subsequent to December 30, 2020, the committed amount will decrease to $1,000,000. (6) Subsequent to September 30, 2020, a new facility was closed. Effective October 9, 2020, the new facility has an overall line size of $500,000 with no committed amount, maturing on October 9, 2021. (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. As of September 30, 2020, this facility is reporting a higher outstanding balance than the line amount shown above. This is because the outstanding balance excludes a transaction that was processed by this facility, but not yet received by the Company. Including this transaction, the outstanding balance is below the line amount. (8) Subsequent to September 30, 2020, this facility was increased to have an overall line size of $3,000,000. 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 nine months ended September 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+1.10% for the nine months ended September 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 September 30, 2020 Outstanding Balance December 31, 2019 Line of Credit Financing Facilities 1) Unsecured line of credit(1)(7) — 7/27/2025 $ 2,000,000 $ — $ — $ — 2) Unsecured line of credit(2)(7) — (2) — — — 90,000 3) Unsecured line of credit(3) 7/31/2025 100,000 — — — 4) Unsecured line of credit(3) — 6/23/2025 50,000 — — — 5) Unsecured line of credit(3) — (3) 10,000 — — — 6) Revolving credit facility(4) — 8/10/2023 950,000 950,000 300,000 — 7) MSR line of credit(8) MSRs 10/22/2021 200,000 — — — 8) MSR line of credit(5)(8) MSRs (5) 200,000 200,000 75,000 75,000 $ 3,510,000 $ 1,150,000 $ 375,000 $ 165,000 Early Buyout Financing Facility 9) Early buy out facility(6)(9) Loans/ Advances 6/9/2021 $ 500,000 $ — $ 213,339 $ 196,247 _________________________ (1) This uncommitted, unsecured Revolving Loan Agreement is with RHI. (2) Effective August 10, 2020, this facility was terminated at the borrower's request and a portion of the commitment was rolled in the new revolving credit facility. (3) Refer to Note 6. Transactions with Related Parties for additional details regarding this unsecured line of credit (4) Subsequent to September 30, 2020, this facility was increased to $1,000,000. (5) 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. (6) This facility provides funding for repurchasing delinquent loans from agency securities loan pools and servicer advances related to the repurchased loans. 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. (7) 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 nine months ended September 30, 2020 and for the year ended December 31, 2019. (8) 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 nine months ended September 30, 2020 and the year ended December 31, 2019. (9) The interest rate charged by lender for the Early buyout financing facility was one-month LIBOR+1.75% for the nine months ended September 30, 2020 and for the year ended December 31, 2019. Unsecured Senior Notes On September 14, 2020, in a private transaction pursuant to Rule 144A and/or Regulation S under the Securities Act of 1933, as amended, Quicken Loans and Quicken Loans Co-Issuer, Inc., each a subsidiary of the Company, closed an offering of $750,000 aggregate principal amount of 3.625% senior notes due 2029 (“2029 Notes”) and $1,250,000 aggregate principal amount of 3.875% senior notes due 2031 (“2031 Notes”). The net proceeds of the offering will be used to redeem the entire aggregate amount of the Unsecured Senior Notes due 2025, to pay related fees and expenses and for general corporate purposes. The 2029 Notes mature on March 1, 2029 unless earlier redeemed or purchased. Cash interest on the 2029 Notes accrued on September 14, 2020 and is payable semi-annually in arrears on March 1 and September 1 of each year, beginning on March 1, 2021, at a rate of 3.625%. The 2031 Notes mature on March 1, 2031 unless earlier redeemed or repurchased. Cash interest on the 2031 Notes accrued on September 14, 2020 and is payable semi-annually in arrears on March 1 and September 1 of each year, beginning on March 1, 2021, at a rate of 3.875%. The 2029 Notes and 2031 Notes are fully and unconditionally guaranteed, jointly and severally, on a senior basis by certain of Quicken Loans subsidiaries. In the future, each of the Quicken Loans, LLC’s or Quicken Loans Co-Issuer, Inc.’s domestic wholly-owned subsidiaries that becomes an issuer or guarantor under the existing 5.250% Senior Notes due 2028, will guarantee the 2029 Notes and the 2031 Notes. No sinking fund is provided for either the 2029 Notes or 2031 Notes. Facility Type Maturity Interest Rate Outstanding Balance September 30, 2020 Outstanding Balance December 31, 2019 Unsecured Senior Notes(1)(2) 5/1/2025 5.750 % $ 1,250,000 $ 1,250,000 Unsecured Senior Notes(3) 1/15/2028 5.250 % 1,010,000 1,010,000 Unsecured Senior Notes(4) 3/1/2029 3.625 % 750,000 — Unsecured Senior Notes(5) 3/1/2031 3.875 % 1,250,000 — Total Senior Notes $ 4,260,000 $ 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 $7,704 and $8,988 as of September 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) Subsequent to September 30, 2020 the entire outstanding principal amount of this note was redeemed at a price equal to 102.875% of the principal amount plus accrued and unpaid interest of $1,318,481. (3) 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 $8,547 and $7,063 as of September 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 % (4) The 2029 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 $750,000 carrying amount on the balance sheet by $7,119 as of September 30, 2020. Prior to March 1, 2024 the Company may redeem the notes at its option, in whole or in part upon not less than 10 nor more than 60 days’ notice, at a redemption price equal to 100% of the principal amount redeemed, plus a “makewhole” premium and accrued and unpaid interest. At any time on or after March 1, 2024, the Company may redeem the note at its option, in whole or in part, upon not less than 10 nor more than 60 days’ notice, at the redemption prices set forth below. The Company may also redeem the notes prior to September 1, 2023, at any time or from time to time, in an amount equal to the cash proceeds received by the Company from an equity offering at a redemption price equal to 103.625% of the principal amount plus accrued and unpaid interest, if any, to but excluding the redemption date, in an aggregate principal amount for all such redemptions not to exceed 40% of the original aggregate principal amount of the notes, provided that the redemption take place not later than 90 days after the closing of the related equity offering; and not less than 60% of the principal amount of the notes remains outstanding immediately thereafter. Year Percentage 2024 101.813 % 2025 100.906 % 2026 and thereafter 100.000 % (5) The 2031 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 $1,250,000 carrying amount on the balance sheet by $12,373 as of September 30, 2020. Prior to March 1, 2026 the Company may redeem the notes at its option, in whole or in part upon not less than 10 nor more than 60 days’ notice, at a redemption price equal to 100% of the principal amount redeemed, plus a “makewhole” premium and accrued and unpaid interest. At any time on or after March 1, 2026, the Company may redeem the note at its option, in whole or in part, upon not less than 10 nor more than 60 days’ notice, at the redemption prices set forth below. The Company may also redeem the notes prior to September 1, 2023, at any time or from time to time, in an amount equal to the cash proceeds received by the Company from an equity offering at a redemption price equal to 103.875% of the principal amount plus accrued and unpaid interest, if any, to but excluding the redemption date, in an aggregate principal amount for all such redemptions not to exceed 40% of the original aggregate principal amount of the notes, provided that the redemption take place not later than 90 days after the closing of the related equity offering; and not less than 60% of the principal amount of the notes remains outstanding immediately thereafter. Year Percentage 2026 101.938 % 2027 101.292 % 2028 100.646 % 2029 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 September 30, 2020 and December 31, 2019. |
Transactions with Related Parti
Transactions with Related Parties | 9 Months Ended |
Sep. 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 September 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. On July 24, 2020, the Company amended the RHI Line of Credit and increased the borrowing capacity to $2,000,000, due on July 27, 2025. 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 consolidated net income before taxes if adjusted tangible net worth meets certain requirements. At quarter ended September 30, 2020 and the year ended December 31, 2019, there were no outstanding amounts due to RHI pursuant to the RHI Line of Credit. RHI and Amrock Title Insurance Company (“ATI”) are parties to a surplus debenture, effective as of December 28, 2015, as amended and restated on December 28, 2016, as further amended and restated on December 31, 2017, and as further amended and restated on December 31, 2019 (the “RHI/ATI Debenture”), pursuant to which ATI is indebted to RHI for an aggregate principal amount of $21,500. The RHI/ATI Debenture matures on December 31, 2030. Interest under the RHI/ATI Debenture accrues at an annual rate of 8%. Principal and interest under the RHI/ATI Debenture are due and payable quarterly, in each case subject to ATI achieving a certain amount of surplus and payments of all interest before principal payments begin. Any unpaid amounts of principal and interest shall be due and payable upon the maturity of the RHI/ATI Debenture. 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. On July 31, 2020, Holdings 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: September 30, 2020 December 31, 2019 Principal Interest Rate Principal Interest Rate Included in Notes receivable and due from affiliates on the Condensed Consolidated Balance Sheets Promissory Note—Shareholders Note(1) $ — — $ 57,457 2.38 % Affiliated receivables and other notes 13,071 — 32,480 — Notes receivable and due from affiliates $ 13,071 $ 89,937 Included in Notes payable and due to affiliates on the Condensed Consolidated Balance Sheets RHIO Line of Credit(1) $ — — $ 10,000 5.00 % RHI/ATI Debenture 21,500 8.00 % 21,500 8.00 % Affiliated payables 51,396 — 30,725 — Notes payable and due to affiliates $ 72,896 $ 62,225 _________________________ (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 $3,528 and $2,399 in the three months ended September 30, 2020 and 2019, respectively, and revenue of $7,155 and $6,286 in the nine months ended September 30, 2020 and 2019, respectively, for the performance of these services, which was included in other income. Related Party receivables were $13,071 and $32,480 as of September 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 $13,899 and $10,366 in the three months ended September 30, 2020 and 2019, respectively and expenses of $41,765 and $26,926 in the nine months ended September 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 $51,396 and $30,725 as of September 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 the three months ended September 30, 2020 and 2019, we incurred expenses totaling $17,975 and $16,910, respectively, and for the nine months ended September 30, 2020 and 2019, we incurred expenses totaling $51,932 and $51,685, respectively, for these properties. |
Other Assets
Other Assets | 9 Months Ended |
Sep. 30, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Assets | Other Assets Other assets consist of the following: September 30, December 31, 2020 2019 Mortgage production related receivables $ 191,910 $ 157,288 Margin call receivable from counterparty 185,664 3,697 Prepaid expenses 93,601 62,229 Disbursement funds advanced 80,794 56,721 Ginnie Mae buyouts 48,657 78,174 Non-production-related receivables 41,008 37,416 Goodwill and other intangible assets 36,013 40,261 Other real estate owned 984 1,619 Other 58,171 64,182 Total other assets $ 736,802 $ 501,587 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The components of income tax expense were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Total income before income taxes and non-controlling interest $ 3,057,066 $ 499,747 $ 6,642,875 $ 147,255 Total provision for income taxes $ 61,683 $ 5,117 $ 84,363 $ 4,291 Effective tax provision rate 2.02 % 1.02 % 1.27 % 2.91 % The Company’s income tax expense varies from the expense that would be expected based on statutory rates due principally to its organizational structure. Prior to the IPO, the Company was owned by RHI which has elected S corporation status. When owned by RHI, Quicken Loans, Amrock and several other wholly owned corporations had elected to be treated as qualified subchapter S subsidiaries. The shareholders of RHI, as shareholders of an S corporation, are responsible for the federal income tax liabilities. A provision for state income taxes is required for certain jurisdictions that tax S corporations and their qualified Subchapter S subsidiaries and for states where the Company is taxed as a C Corporation. In a series of transactions occurring along with the IPO, subsidiaries of the Company were contributed to Holdings by RHI. Several of these subsidiaries, such as Quicken Loans, Amrock and other subsidiaries, will no longer be qualified Subchapter S corporations and will be treated as single member LLC entities owned by Holdings. As single member LLCs of Holdings, all taxable income or loss generated by these subsidiaries will pass through and be included in the income or loss of Holdings. Other contributed subsidiaries of Holdings, such as Amrock Title Insurance Co., LMB Mortgage Services and others, are treated as C Corporations and will separately file and pay taxes apart from Holdings in various jurisdictions including U.S. federal, state, local and Canada. As part of the IPO, Rocket Companies acquired a portion of the units of Holdings, which is treated as a partnership for U.S. federal and most applicable state and local income tax purposes. The remaining portion of Holdings is owned by RHI and our Chairman ("LLC Members"). As a partnership, Holdings is not subject to U.S. federal and certain state and local incomes taxes. Any taxable income or loss generated by Holdings after Rocket Companies acquisition of its portion of Holdings is passed through and included in the taxable income or loss of its members, including Rocket Companies, in accordance with the terms of the LLC Agreement. Rocket Companies is a C Corporation and is subject to U.S. federal, state and local income taxes with respect to its allocable share of any taxable income of Holdings. As of September 30, 2020, the Company has a deferred tax asset before any valuation allowance of $561,684 and a deferred tax liability of $4,520. This deferred tax asset relates primarily to the difference in the tax and book basis of Rocket Companies’ investment in Holdings. The Company recognizes deferred tax assets to the extent it believes these assets are more-likely-than-not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent results of operations. After considering all of those factors, management has recorded $19,258 of a valuation allowance for certain deferred tax assets the Company has determined are not more likely than not to be realized. The initial deferred tax asset was recorded against Additional Paid in Capital and included within Effect of Reorganization Transaction in the Condensed Consolidated Statements of Changes in Equity. The Company recognizes uncertain income tax positions when it is not more-likely-than-not a tax position will be sustained upon examination. As of September 30, 2020, the Company has not recognized any uncertain tax positions. The Company accrues interest and penalties related to uncertain tax positions as a component of the income tax provision. No interest or penalties were recognized in income tax expense for the nine-months ended September 30, 2020. Tax positions taken in tax years that remain open under the statute of limitations will be subject to examinations by tax authorities. With few exceptions, the Company is no longer subject to state or local examinations by tax authorities for tax years ended December 31, 2015 or prior. Tax Receivable Agreement The Company expects to obtain an increase in its share of the tax basis in the net assets of Holdings when Holdings Units are redeemed from or exchanged by the LLC Members. The Company intends to treat any redemptions and exchanges of Holdings Units as direct purchases of Holdings Units for U.S. federal income tax purposes. These increases in tax basis may reduce the amounts that the Company would otherwise pay in the future to various tax authorities. They may also decrease gains (or increase losses) on future dispositions of certain capital assets to the extent tax basis is allocated to those capital assets. In connection with the IPO, the Company entered into the Tax Receivable Agreement with the LLC Members. The Tax Receivable Agreement provides for the payment by Rocket Companies of 90% of the amount of any tax benefits that Rocket Companies actually realizes, or in some cases is deemed to realize, as a result of (i) certain increases in Rocket Companies allocable share of the tax basis in Holdings’ assets resulting from (a) the purchases of Holdings Units (along with the corresponding shares of our Class D common stock or Class C common stock) from the LLC Members (or their transferees of Holdings Units or other assignees) using the net proceeds from our initial public offering or in any future offering, (b) exchanges by the LLC Members (or their transferees of Holdings Units or other assignees) of Holdings Units (along with the corresponding shares of our Class D common stock or Class C common stock) for cash or shares of our Class B common stock or Class A common stock, as applicable, or (c) payments under the Tax Receivable Agreement; (ii) tax benefits related to imputed interest deemed arising as a result of payments made under the Tax Receivable Agreement and (iii) disproportionate allocations (if any) of tax benefits to Holdings as a result of section 704(c) of the Code that relate to the reorganization transactions The Company expects to benefit from the remaining 10% of any cash savings, if any, that it realizes. During the nine-month period ended September 30, 2020, the Company acquired an aggregate of 115,000,000 Holdings Units valued at $2,070,000 in connection with the exchange of those Holdings Units by the LLC Members, which resulted in an increase in the tax basis of the assets of Holdings and would be subject to the provisions of the tax receivable agreement. The Company recognized a liability of $558,142 under the Tax Receivable Agreement after concluding that is the probable estimate of such TRA Payments that would be paid based on its estimates of future taxable income. No payments were made to the LLC Members pursuant to the tax receivable agreement during the nine-month period ended September 30, 2020. The initial Tax Receivable Agreement liability was recorded against Additional Paid in Capital and included within Effect of Reorganization Transaction in the Condensed Consolidated Statements of Changes in Equity. The amounts payable under the tax receivable agreement will vary depending upon a number of factors, including the amount, character, and timing of the taxable income of Rocket Companies in the future. Any such changes in these factors or changes in the Company’s determination of the need for a valuation allowance related to the tax benefits acquired under the tax receivable agreement could adjust the tax receivable agreement liability recognized and recorded within earnings in future periods. |
Derivative Financial Instrument
Derivative Financial Instruments | 9 Months Ended |
Sep. 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 Consolidated 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 Consolidated 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 Consolidated Statements of Income and Comprehensive Income. The Company enters into IRLCs to fund residential mortgage loans with its potential borrowers. These commitments are 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 Condensed Consolidated Statements of Income and Comprehensive Income. Net hedging losses and gains were as follows: Three Months Ended September 30, Nine months ended September 30, 2020 (1) 2019 2020 (1) 2019 Hedging (losses) gains $ (776,086) $ 164,370 $ (2,283,874) $ 129,917 _________________________ (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 September 30, 2020: IRLCs, net of loan funding probability(1) $ 51,798,693 $ 2,590,319 $ — Forward commitments(2) $ 67,901,171 $ 12,149 $ 238,004 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 $185,664 and $3,697 of cash pledged to counterparties related to these forward commitments at September 30, 2020 and December 31, 2019, respectively, classified in other assets in the Condensed Consolidated Balance Sheets. As of September 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 Consolidated Balance Sheets. Gross Amount of Recognized Assets or Liabilities Gross Amounts Offset in the Condensed Consolidated Balance Sheets Net Amounts Presented in the Condensed Consolidated Balance Sheets Offsetting of Derivative Assets Balance at September 30, 2020: Forward commitments $ 15,024 $ (2,875) $ 12,149 Balance at December 31, 2019: Forward commitments $ 6,690 $ (2,852) $ 3,838 Offsetting of Derivative Liabilities Balance at September 30, 2020: Forward commitments $ (402,455) $ 164,451 $ (238,004) 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. Certain counterparties have master netting agreements. The master netting agreements contain a legal right to offset amounts due to and from the same counterparty. Derivative assets in the Condensed Consolidated 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 nine months ended September 30, 2020 and 2019. |
Commitments, Contingencies, and
Commitments, Contingencies, and Guarantees | 9 Months Ended |
Sep. 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 September 30, 2020 and December 31, 2019 was approximately 43 and 44 days on average, respectively. The UPB of IRLCs was as follows: September 30, 2020 December 31, 2019 Fixed Rate Variable Rate Fixed Rate Variable Rate IRLCs $ 69,607,563 $ 1,502,059 $ 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 September 30, 2020 and December 31, 2019 was $4,686,875 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 $15,313 and $78,446 of loans committed to be sold servicing released at September 30, 2020 and December 31, 2019, respectively. Investor Reserves The following presents the activity in the investor reserves: Three Months Ended Nine Months Ended 2020 2019 2020 2019 Balance at beginning of period $ 63,012 $ 55,242 $ 54,387 $ 56,943 (Benefit from) provision for investor reserves (3,665) (1,415) 5,698 (2,067) Premium recapture and indemnification losses paid (2,329) (203) (3,067) (1,252) Balance at end of period $ 57,018 $ 53,624 $ 57,018 $ 53,624 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 $4,994,806 and $2,617,016, and for principal and interest was $11,907,006 and $6,726,793 at September 30, 2020 and December 31, 2019, respectively. These amounts are not considered assets of the Company and, therefore, are excluded from the Condensed Consolidated Balance Sheets. The Company remains contingently liable for the disposition of these deposits. Guarantees As of September 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 September 30, 2020 and December 31, 2019, the Company did not record a liability on the Condensed Consolidated 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 September 30, 2020 and 2019, and $3,750 for the nine months ended September 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 Consolidated Statements of Income and Comprehensive Income. Tax Receivable Agreement As described in Note 1, Business, Basis of Presentation, and Accounting Policies , and Note 8, Income Taxes the Company is a party to the Tax Receivable Agreement pursuant to which Rocket Companies, Inc. is contractually committed to pay RHI and our Chairman 90% of the amount of any tax benefits that Rocket Companies, Inc. actually realizes, or in some cases is deemed to realize, as a result of certain transactions. The Company is not obligated to make any payments under the Tax Receivable Agreement until the tax benefits associated with the transactions that gave rise to the payments are realized. Amounts payable under the Tax Receivable Agreement are contingent upon, among other things, (i) generation of future taxable income over the term of the Tax Receivable Agreement and (ii) future changes in tax laws. During the nine months ended September 30, 2020, we recognized liabilities totaling $558,142 relating to our obligations under the Tax Receivable Agreement, after concluding that it was probable that we would have sufficient future taxable income to utilize the related tax benefits. As the Tax Receivable Agreement went into effect in August 2020, no amounts were due to RHI or our Chairman under the tax receivable agreement as of December 31, 2019, and no amounts were paid during the nine months ended September 30, 2020. 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 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 the plaintiffs (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, motions or other submissions in each of these matters advancing arguments which, if accepted by the courts, would result in a finding of no liability or would limit the matters to the plaintiffs' individual claims. 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 | 9 Months Ended |
Sep. 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 Ginnie Mae 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 $2,197,418 and $1,179,928 as of September 30, 2020 and December 31, 2019, respectively. As of September 30, 2020 and December 31, 2019, the Company was in compliance with this requirement. |
Segments
Segments | 9 Months Ended |
Sep. 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 have high retention and recapture the clients’ next refinance or purchase mortgage transaction. These activities position the Company to be the natural choice for clients’ next refinance, purchase, personal loan, and auto 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 and nine months ended: Three Months Ended Direct to Consumer Partner Network Segments Total All Other Total Revenues Gain on sale $ 3,128,695 $ 1,151,071 $ 4,279,766 $ 676 $ 4,280,442 Interest income 53,764 25,691 79,455 435 79,890 Interest expense on funding facilities (46,936) (22,428) (69,364) — (69,364) Servicing fee income 271,254 — 271,254 904 272,158 Changes in fair value of MSRs (374,765) — (374,765) — (374,765) Other income 237,855 47,858 285,713 160,044 445,757 Total U.S. GAAP Revenue $ 3,269,867 $ 1,202,192 $ 4,472,059 $ 162,059 $ 4,634,118 Plus: Decrease in MSRs due to valuation assumptions 109,054 — 109,054 — 109,054 Adjusted revenue $ 3,378,921 $ 1,202,192 $ 4,581,113 $ 162,059 $ 4,743,172 Directly attributable expenses 948,150 141,214 1,089,364 113,464 1,202,828 Contribution margin $ 2,430,771 $ 1,060,978 $ 3,491,749 $ 48,595 $ 3,540,344 Nine Months Ended Direct to Consumer Partner Network Segments Total All Other Total Revenues Gain on sale $ 8,759,914 $ 2,089,285 $ 10,849,199 $ 6,936 $ 10,856,135 Interest income 152,087 77,638 229,725 2,246 231,971 Interest expense on funding facilities (107,718) (54,451) (162,169) (411) (162,580) Servicing fee income 776,117 — 776,117 2,976 779,093 Changes in fair value of MSRs (1,918,860) — (1,918,860) — (1,918,860) Other income 589,415 107,328 696,743 553,738 1,250,481 Total U.S. GAAP Revenue $ 8,250,955 $ 2,219,800 $ 10,470,755 $ 565,485 $ 11,036,240 Plus: Decrease in MSRs due to valuation assumptions 1,126,757 — 1,126,757 — 1,126,757 Adjusted revenue $ 9,377,712 $ 2,219,800 $ 11,597,512 $ 565,485 $ 12,162,997 Directly attributable expenses 2,677,729 372,337 3,050,066 282,379 3,332,445 Contribution margin $ 6,699,983 $ 1,847,463 $ 8,547,446 $ 283,106 $ 8,830,552 Three Months Ended Direct to Consumer Partner Network Segments Total All Other Total Revenues Gain on sale $ 1,373,685 $ 173,161 $ 1,546,846 $ 13,390 $ 1,560,236 Interest income 37,749 24,400 62,149 1,500 63,649 Interest expense on funding facilities (20,597) (13,313) (33,910) (513) (34,423) Servicing fee income 235,158 — 235,158 1,071 236,229 Changes in fair value of MSRs (390,619) — (390,619) — (390,619) Other income 123,556 6,122 129,678 55,675 185,353 Total U.S. GAAP Revenue $ 1,358,932 $ 190,370 $ 1,549,302 $ 71,123 $ 1,620,425 Plus: Decrease in MSRs due to valuation assumptions 180,428 — 180,428 — 180,428 Adjusted revenue $ 1,539,360 $ 190,370 $ 1,729,730 $ 71,123 $ 1,800,853 Directly attributable expenses 716,923 74,569 791,492 63,174 854,666 Contribution margin $ 822,437 $ 115,801 $ 938,238 $ 7,949 $ 946,187 Nine Months Ended Direct to Consumer Partner Network Segments Total All Other Total Revenues Gain on sale $ 3,037,166 $ 325,206 $ 3,362,372 $ 37,569 $ 3,399,941 Interest income 111,080 58,277 169,357 2,929 172,286 Interest expense on funding facilities (58,404) (30,713) (89,117) (1,349) (90,466) Servicing fee income 698,503 — 698,503 2,587 701,090 Changes in fair value of MSRs (1,464,582) — (1,464,582) — (1,464,582) Other income 299,022 15,956 314,978 155,953 470,931 Total U.S. GAAP Revenue $ 2,622,785 $ 368,726 $ 2,991,511 $ 197,689 $ 3,189,200 Plus: Decrease in MSRs due to valuation assumptions 892,755 — 892,755 — 892,755 Adjusted revenue $ 3,515,540 $ 368,726 $ 3,884,266 $ 197,689 $ 4,081,955 Directly attributable expenses 1,867,398 176,688 2,044,086 153,547 2,197,633 Contribution margin $ 1,648,142 $ 192,038 $ 1,840,180 $ 44,142 $ 1,884,322 The following table represents a reconciliation of segment contribution margin to consolidated U.S. GAAP income before taxes for the three and nine months ended: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Contribution margin, excluding change in MSRs due to valuation assumptions $ 3,540,344 $ 946,187 $ 8,830,552 $ 1,884,322 Decrease in MSRs due to valuation assumptions (109,054) (180,428) (1,126,757) (892,755) Contribution margin, including change in MSRs due to valuation assumptions $ 3,431,290 $ 765,759 $ 7,703,795 $ 991,567 Less expenses not allocated to segments : Salaries, commissions and team member benefits $ 198,482 $ 129,732 602,832 422,141 General and administrative expenses 122,137 74,597 310,711 258,258 Depreciation and amortization 15,329 21,382 47,633 57,174 Interest and amortization expense on non-funding debt 38,016 33,052 104,291 99,220 Other expenses 260 7,249 (4,547) 7,519 Income (loss) before income taxes $ 3,057,066 $ 499,747 $ 6,642,875 $ 147,255 |
Variable Interest Entities
Variable Interest Entities | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entities | Variable Interest Entities Upon completion of the reorganization and IPO, Rocket Companies, Inc. became the managing member of Holdings with 100% of the management and voting power in Holdings. In its capacity as managing member, Rocket Companies, Inc. has the sole authority to make decisions on behalf of Holdings and bind Holdings to signed agreements. Further, Holdings maintains separate capital accounts for its investors as a mechanism for tracking earnings and subsequent distribution rights. Accordingly, management concluded that Holdings is a limited partnership or similar legal entity as contemplated in ASC 810, Consolidation . Furthermore, management concluded that Rocket Companies, Inc. is Holdings’ primary beneficiary. As the primary beneficiary, Rocket Companies, Inc. consolidates the results and operations of Holdings for financial reporting purposes under the variable interest consolidation model guidance in ASC 810. Rocket Companies, Inc.'s relationship with Holdings results in no recourse to the general credit of Rocket Companies, Inc. Holdings and its consolidated subsidiaries represents Rocket Companies, Inc.'s sole investment. Rocket Companies, Inc. shares in the income and losses of Holdings in direct proportion to Rocket Companies, Inc.'s ownership percentage. Further, Rocket Companies, Inc. has no contractual requirement to provide financial support to Holdings. |
Non-controlling Interests
Non-controlling Interests | 9 Months Ended |
Sep. 30, 2020 | |
Noncontrolling Interest [Abstract] | |
Non-controlling Interests | Non-controlling Interests The non-controlling interest balance represents the economic interest in Holdings held by our Chairman and RHI. The following table summarizes the ownership of Holdings Units in Holdings as of September 30, 2020: Holdings Units Ownership Percentage Rocket Companies, Inc.'s ownership of Holdings Units 115,372,565 5.81 % Holdings Units held by our Chairman 1,101,822 0.06 % Holdings Units held by RHI 1,867,977,661 94.13 % Balance at end of period 1,984,452,048 100.00 % The non-controlling interest holders have the right to exchange Holdings Units, together with a corresponding number of shares of our Class D common stock or Class C common stock (together referred to as “Paired Interests”), for, at our option, (i) shares of our Class B common stock or Class A common stock or (ii) cash from a substantially concurrent public offering or private sale (based on the price of our Class A common stock). As such, future exchanges of Paired Interests by non-controlling interest holders will result in a change in ownership and reduce or increase the amount recorded as non-controlling interest and increase or decrease additional paid-in-capital when Holdings has positive or negative net assets, respectively. As of September 30, neither our Chairman or RHI has exchanged any Paired Interests. |
Stock-based Compensation
Stock-based Compensation | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock-based Compensation | Stock-based Compensation RKT Awards In connection with the IPO, the Company adopted the 2020 Omnibus Incentive Plan (the “2020 Plan”) in August 2020. The compensation committee of the Company's board of directors, acting as plan administrator, administers the 2020 Plan and the awards granted under it. The Company reserved a total of 94,736,842 shares of Class A common stock for issuance pursuant to the 2020 Plan. The Company currently has two types of share-based compensation awards issued and outstanding under the 2020 Plan: stock options (“Stock Options”) and restricted stock units (“RSUs”). Stock Options The Company granted Stock Options to certain team members that vest and become exercisable over a three Number of Stock Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding on July 1, 2020 — — — — Granted 26,351,287 $ 18.00 2.8 Years $ 50,858 Exercised — — — — Expired — — — — Forfeited 197,635 $ 18.00 2.8 Years $ 381 Outstanding as of September 30, 2020 26,153,652 $ 18.00 2.8 Years $ 50,477 Exercisable as of September 30, 2020 — — — — The Company estimates the fair value of the Stock Options at the date of grant using the Black-Scholes option pricing model. Inputs to the Black-Scholes option pricing model include an expected dividend yield of 1.5%, expected volatility factor of 34.0%, risk-free interest rate of 0.29% and an expected term of 5.85 years, pursuant to vesting terms, resulting in a weighted average fair value of $18.00 per Stock Option. As of September 30, 2020, unrecognized compensation expense related to the Stock Options was $120,749. This expense is expected to be recognized over a weighted average period of 2.8 years. Expected dividend yield - An increase in the expected dividend yield would decrease compensation expense. Expected volatility - This is a measure of the amount by which the price of the equity instrument has fluctuated or is expected to fluctuate. The expected volatility was based on the historical volatility of a group of guideline companies. An increase in expected volatility would increase compensation expense. Risk-free interest rate - This is the U.S. Treasury rate as of the measurement date having a term approximating the expected life of the award. An increase in the risk-free interest rate would increase compensation expense. Expected term - The period of time over which the awards are expected to remain outstanding. The Company estimates the expected term as the mid-point between actual or expected vesting date and the contractual term. An increase in the expected term would increase compensation expense. Restricted Stock Units The Company granted RSUs to certain team members with a grant date fair value of $18.00 that generally vest on the two three Number of Units Weighted Average Grant Date Fair Value Weighted Average Remaining Contractual Term Outstanding on July 1, 2020 — — — Granted 16,718,938 $ 18.00 2.4 Years Vested — — — Forfeited 200,546 $ 18.00 2.4 Years Outstanding as of September 30, 2020 16,518,392 $ 18.00 2.4 Years Unrecognized compensation expense related to these RSUs was $278,741 and is expected to be recognized over a weighted average period of 2.4 years. Summary of RKT Equity-Based Compensation Expense The Company recognized compensation expenses related to RKT Equity-Based Awards of $25,210 from July 1, 2020 to September 30, 2020. Amounts are included in general and administrative expense on the Condensed Consolidated Statements of Income and Comprehensive Income. RHI Denominated Restricted Stock Units (“RHI RSUs”) During 2017 and 2019, RHI granted 1,076,433 and 125,000 RHI RSUs, respectively, to Company team members. Each RHI RSU, upon or after vesting, represents the right of the holder to receive one common share of RHI common stock. The RHI RSUs were accounted for under ASC 718 as equity-classified share-based compensation awards at grant date fair value. The RHI RSUs granted are only subject to service-based vesting with 20%–25% vesting immediately upon issuance and the remaining shares vesting annually over a four-year period. The related compensation expense is recognized on a straight-line basis with forfeitures recognized as they occur. Approximately 80,000 and 555,060 unvested RHI RSUs remained outstanding as of September 30, 2020 and 2019 respectively. Share-based compensation expense of $68,177 and $24,903 related to the RHI RSUs was attributable to the Company for the nine months ended September 30, 2020 and 2019 respectively, which is included in salaries, commissions, and team member benefits. RHI Denominated Cash-Settled Award RHI provided for a tax-offset cash bonus for RHI RSUs granted to certain executives of the Company in 2017. This cash-settled award is accounted for under ASC 718 as a liability classified award. The expense associated with the awards is $26,421 and $8,103 for the nine months ended September 30, 2020 and 2019, respectively, which is included in salaries, commissions, and team member benefits. RHI Denominated Stock Options ("RHI Options") During 2016, RHI granted RHI Options to Company team members. Upon exercise, each option represented the right of the holder to purchase one common share of RHI common stock. The RHI Options were accounted for under ASC 718 as equity-classified awards. The fair value of each option award was estimated on the grant date using the Black-Scholes option-pricing model. The RHI Options were granted with exercise prices equal to fair value on the date of grant and were only subject to service-based vesting over a four-year period and had an expiration of ten years. The related compensation expense was recognized on a straight-line basis with forfeitures recognized as they occur. Approximately zero and 9,640 unvested RHI Options remained outstanding as of September 2020 and 2019, respectively. Share-based compensation expense of $32 and $321 for the options was attributable to the Company for the nine months ended September 30, 2020 and 2019, respectively, which is included in salaries, commissions and team member benefits. Additionally, one of the subsidiaries of RKT Holdings, LLC companies has a stand-alone stock compensation plan that resulted in share-based compensation expense of $146 and $199 for the nine months ended September 30, 2020 and 2019, respectively. Total RHI share-based compensation, including the cash-settled awards attributable to the Company was $94,776 and $33,526 for the nine months ended September 30, 2020 and 2019, respectively. Remaining compensation expense attributable to the Company for these awards is $16,006 as of September 30, 2020, to be recognized through 2023. On February 14, 2020, RHI modified the vesting condition for certain RHI RSUs granted in 2017 to accelerate the remaining eight months of the fourth tranche previously due to vest on October 31, 2020. This modification resulted in accelerated expense of $29,433 for 180,020 RHI RSUs in the first quarter of 2020. On May 15, 2020, RHI modified the vesting condition for certain RHI RSUs granted in 2017 and 2019. For the 2017 grants RHI accelerated the tranche previously due to vest on October 31, 2021 and for the 2019 grants RHI accelerated the tranche previously due to vest on October 31, 2020. This modification resulted in accelerated expense of $38,371 for 198,020 RHI RSUs in the second quarter of 2020. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic earnings per share of Class A common stock and Class B common stock is computed by dividing net income attributable to Rocket Companies, Inc. by the weighted-average number of shares of Class A common stock and Class B common stock, respectively, outstanding during the period. Diluted earnings per share of Class A common stock and Class B common stock is computed by dividing net income attributable to Rocket Companies, Inc. by the weighted-average number of shares of Class A common stock or Class B common stock, respectively, outstanding adjusted to give effect to potentially dilutive securities. See Note 14, Non-controlling Interests for a description of Paired Interests. Refer to Note 1, Business, Basis of Presentation, and Accounting Policies for additional information related to basic and diluted earnings per share. Prior to the IPO, Holdings membership structure included equity interests held by RHI. The Company analyzed the calculation of earnings per unit for periods prior to the IPO and determined that it resulted in values that would not be meaningful to the users of these condensed consolidated financial statements. Therefore, earnings per share information has not been presented for the three and nine months ended September 30, 2019. The basic and diluted earnings per share period for the three and nine months ended September 30, 2020, represents only the period from August 6, 2020 to September 30, 2020, which represents the period wherein the Company had outstanding Class A common stock. There was no Class B common stock outstanding as of September 30, 2020. The following table sets for the calculation of the basic and diluted earnings per share for the periods following the reorganization and IPO for Class A common stock: Three Months Ended Nine Months Ended September 30, 2020 Net income $ 2,995,383 $ 6,558,512 Net income attributable to non-controlling interests $ 2,937,480 $ 6,500,609 Net income attributable to Rocket Companies $ 57,903 $ 57,903 Numerator: Net income attributable to Class A common shareholders $ 57,903 $ 57,903 Net income attributable to Class A common shareholders - diluted $ 57,903 $ 57,903 Denominator: Weighted average shares of Class A common stock outstanding - basic 106,265,422 106,265,422 Weighted average shares of Class A common stock outstanding - diluted 106,265,422 106,265,422 Earnings per share of Class A common stock outstanding - basic $ 0.54 $ 0.54 Earnings per share of Class A common stock outstanding - diluted $ 0.54 $ 0.54 For the period from August 6, 2020 to September 30, 2020, 1,878,058,054 Holdings Units, each weighted for the portion of the period for which they were outstanding, together with a corresponding number of shares of our Class D common stock, were exchangeable, at our option, for shares of our Class A common stock. After evaluating the potential dilutive effect under the if-converted method, the outstanding Holdings Units for the assumed exchange of non-controlling interests were determined to be anti-dilutive and thus were excluded from the computation of diluted earnings per share. For the period from August 6, 2020 to September 30, 2020, 16,601,433 RSUs, each weighted for the portion of the period for which they were outstanding, were excluded from the computation of diluted earnings per share as the effect was determined to be anti-dilutive. For the period from August 6, 2020 to September 30, 2020, 26,235,912 stock options, each weighted for the portion of the period for which they were outstanding, were excluded from the computation of diluted earnings per share as the effect was determined to be anti-dilutive. |
Business, Basis of Presentati_2
Business, Basis of Presentation, and Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Consolidation | Rocket Companies, Inc. (the "Company", and together with its consolidated subsidiaries, "Rocket Companies", "we", "us", "our") was incorporated in Delaware on February 26, 2020 as a wholly owned subsidiary of Rock Holdings Inc. ("RHI") for the purpose of facilitating an initial public offering ("IPO") of its Class A common stock and other related transactions in order to carry on the business of RKT Holdings, LLC ("Holdings") and its wholly owned subsidiaries. We are a Detroit-based company consisting of tech-driven real estate, mortgage and financial service businesses. Our flagship business, Rocket Mortgage, almost exclusively offers Government Sponsored Enterprise ("GSE") conforming, and government insured mortgage loan products, which are marketed in all 50 states through the internet, national television and other marketing channels. In addition to our mortgage business, we have expanded into complementary industries, such as real estate, personal lending, and auto sales. Our ecosystem is a series of connected businesses centered on delivering better solutions to our clients through our technology and scale. Rocket Companies, Inc. is a holding company. Its primary material asset is the equity interest in Holdings which, through its direct and indirect subsidiaries, conducts all of the Company's operations. Holdings is a Michigan limited liability company and wholly owns Quicken Loans, LLC, Amrock Holdco, LLC (“Amrock”), LMB HoldCo LLC (“Core Digital Media”), RCRA Holdings LLC (“Rock Connections” and “Rocket Auto”), Rocket Homes Real Estate LLC (“Rocket Homes”), RockLoans Holdings LLC (“Rocket Loans”), Rock Central LLC, EFB Holdings Inc. (“Edison Financial”), Lendesk Canada Holdings Inc., RockTech Canada Inc., Nexsys Technologies LLC (“Nexsys”), and Woodward Capital Management LLC. Because Rocket Companies, Inc. is the managing member of Holdings, Rocket Companies, Inc. indirectly operates and controls all of the business affairs of Holdings and its subsidiaries. As used herein, “Rocket Mortgage” refers to either the Rocket Mortgage brand or platform, or the Quicken Loans business, as the context allows. Initial Public Offering On August 10, 2020 we completed the IPO of our common stock pursuant to a Registration Statement on Form S-1 (File No. 333-239726), which closed on August 10, 2020. In the IPO, we sold an aggregate of 115,000,000 shares of Class A common stock, including 15,000,000 shares of Class A common stock purchased by the underwriters on September 9, 2020 pursuant to the underwriters’ option to purchase additional shares at the initial public offering price, less underwriting discounts and commissions. Rocket Companies, Inc. received net proceeds from the IPO of approximately $2,023,000 after deducting underwriting discounts and commissions, all of which was used to purchase 115,000,000 non-voting membership units of Holdings (the “Holdings Units”) and shares of Class D common stock from RHI. Prior to the completion of the offering, RHI, Holdings and its subsidiaries consummated an internal reorganization. As a result of the IPO and the reorganization: • Rocket Companies, Inc. is the sole managing member of Holdings, which owns direct interests in (a) Rocket Mortgage and (b) various other former direct subsidiaries of RHI. • Dan Gilbert, our founder and Chairman (our "Chairman"), RHI, and Rocket Companies, Inc. are members of Holdings. • The certificate of incorporation of Rocket Companies, Inc. was amended to, among other things, authorize the Company to issue four classes of common stock: Class A common stock, Class B common stock, Class C common stock and Class D common stock. The Class A common stock and Class C common stock each provide holders with one vote on all matters submitted to a vote of stockholders, and the Class B common stock and Class D common stock each provide holders with 10 votes on all matters submitted to a vote of stockholders. The holders of Class C common stock and Class D common stock do not have any of the economic rights (including rights to dividends and distributions upon liquidation) provided to holders of Class A common stock and Class B common stock. • 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. In connection with the reorganization, we entered into a Tax Receivable Agreement (the “Tax Receivable Agreement”) with RHI and our Chairman that will obligate us to make payments to RHI and our Chairman generally equal to 90% of the applicable cash savings that we actually realize as a result of the tax attributes generated by (i) certain increases in our allocable share of the tax basis in Holdings’ assets resulting from (a) the purchases of Holdings Units (along with the corresponding shares of our Class D common stock or Class C common stock) from RHI and our Chairman (or their transferees of Holdings Units or other assignees) using the net proceeds from our initial public offering or in any future offering, (b) exchanges by RHI and our Chairman (or their transferees of Holdings Units or other assignees) of Holdings Units (along with the corresponding shares of our Class D common stock or Class C common stock) for cash or shares of our Class B common stock or Class A common stock, as applicable, or (c) payments under the Tax Receivable Agreement; (ii) tax benefits related to imputed interest deemed arising as a result of payments made under the Tax Receivable Agreement and (iii) disproportionate allocations (if any) of tax benefits to Holdings as a result of section 704(c) of the Internal Revenue Code of 1986, as amended (the “Code”) that relate to the reorganization transactions. We will retain the remaining 10% benefit of these tax savings. As the reorganization is considered transactions between entities under common control, the financial statements for the periods prior to the IPO and reorganization have been adjusted to combine the previously separate entities for presentation. Prior to the reorganization, Rocket Companies, Inc. had no operations. Basis of Presentation and Consolidation Prior to the completion of our reorganization and IPO, as defined above and in our registration statement on form S-1, RKT Holdings, LLC and its subsidiaries operated as part of RHI and not as a stand-alone entity. Income from RKT Holdings, LLC and its subsidiaries prior to the reorganization and IPO have been accounted for as a non-controlling interest in our Condensed Consolidated Statements of Income. Our Condensed Consolidated Statements of Changes in Equity presents the accumulated net income prior to the reorganization and IPO in net parent investment as the financial statements prior to the reorganization and IPO reflect combined subsidiaries operating as part of RHI. As part of our reorganization, we reorganized the legal structure of our entities, so they are all under a single parent entity, RKT Holdings, LLC. As the sole managing member of Holdings, the Company operates and controls all of the business and affairs of Holdings, and through Holdings and its subsidiaries, conducts its business. Because we manage and operate the business and control the strategic decisions and day-to-day operations of Holdings and also have a substantial financial interest in Holdings, we consolidate the financial results of Holdings, and a portion of our net income is allocated to the non-controlling interests. RKT Holdings, LLC is considered a variable interest entity, or VIE. In addition, because RKT Holdings, LLC and its subsidiaries are under the common control of RHI, we account for the reorganization as a reorganization of entities under common control and will initially measure the interests of RHI in the assets and liabilities of Holdings at their carrying amounts as of the date of the completion of the reorganization. The net parent investment as a result of the common control transaction with Rocket Companies, Inc. was allocated between non-controlling interest and additional paid-in capital based on the ownership of RKT Holdings, LLC. Prior to the reorganization and IPO, 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 consolidated 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 consolidated financial statements and are reflected in the accompanying Condensed Consolidated Statements of Changes in Equity as “Net transfers to/from parent” and in the accompanying Condensed Consolidated Balance Sheets within “Net parent investment.” In conjunction with the reorganization and IPO, we reclassified RHI's historical net parent investment in us to additional paid-in-capital. All significant intercompany transactions and accounts between the businesses comprising the Company have been eliminated in the accompanying condensed consolidated financial statements. All transactions and accounts between RHI and the Company have a history of settlement or will 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. |
Basis of Presentation | Our condensed consolidated financial statements are unaudited and presented in U.S. dollars. They have been prepared in accordance with accounting principles generally accepted in the United States of America ("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 Consolidated Balance Sheet as of December 31, 2019 has been derived from our audited combined financial statements at that date. Our condensed consolidated 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. Our condensed consolidated financial statements for periods prior to the reorganization and IPO have been derived from our combined financial statements, which combined the subsidiaries that historically operated as part of RHI and were included in the IPO registration statement, with further adjustments only to comply with the presentation requirements for consolidated financial statements purposes and to reflect retrospectively the Amrock Title Insurance Company ("ATI") common control acquisition as discussed further below in the Acquisition Agreement section. Amounts for the period from July 1, 2020 through August 5, 2020, from January 1, 2020 through August 5, 2020, as of December 31, 2019, and for the three months and nine months ended September 30, 2019 presented in the condensed consolidated financial statements and notes to condensed consolidated financial statements herein represent the historical operations of the Company including those of ATI. These amounts are prepared on a basis materially consistent, including intercompany eliminations, with the amounts as of September 30, 2020 and for the period from August 6, 2020 through September 30, 2020, reflecting the consolidated operations of the Company including ATI. The December 31, 2019 balance sheet of the Company is immaterially different from the audited financial statements as a result of the ATI common control transaction. We believe the assumptions underlying the condensed consolidated financial statements, including the assumptions regarding allocation of expenses from RHI are reasonable. Prior to the reorganization and IPO, the executive management compensation expense has been allocated based on time incurred for services provided to Holdings and its subsidiaries. Total costs allocated to us for these services were $8,042 and $11,596 for the three months ended September 30, 2020 and 2019, and $94,776 and $33,526 for the nine months ended September 30, 2020 and 2019, respectively. These amounts were included in salaries, commissions and team member benefits in our Condensed Consolidated Statements of Income and Comprehensive Income. In our opinion, these condensed consolidated 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 | Management Estimates The preparation of condensed consolidated 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 consolidated 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 September 30, 2020 and 2019 consisted of cash on deposit for a repurchase facility and client application deposits, title premiums collected from the insured that are due to the underwritten insurance company and a $25,000 bond. |
Non-controlling Interests | Non-controlling interests As noted above, we are the sole managing member of Holdings and consolidate the financial results of Holdings. Therefore, we report a non-controlling interest based on the Holdings Units of Holdings held by our Chairman and RHI (the "non-controlling interest holders") on our Condensed Consolidated Balance Sheets. Income or loss is attributed to the non-controlling interests based on the weighted average Holdings Units outstanding during the period and is presented on the Condensed Consolidated Statements of Income and Comprehensive Income. Refer to Note 14, Non-controlling Interests for more information. |
Stock-based Compensation | Stock-based Compensation In connection with the IPO, equity-based awards were issued under the Rocket Companies, Inc. 2020 Omnibus Incentive Plan including restricted stock units and stock options to purchase shares of our Class A common stock at an exercise price equal to the price to the public in the initial public offering. Stock-based compensation expense is recorded as a component of salaries, commissions and team member benefits. Stock-based compensation expense is recognized on a straight-line basis over the requisite service period based on the fair value of the award on the date of grant, refer to Note 15, Stock-based Compensation |
Income Taxes | Income taxes Our income tax expense, deferred tax assets and liabilities, and reserves for unrecognized tax benefits reflect management’s best assessment of estimated current and future taxes to be paid. We are subject to income taxes predominantly in the United States and Canada. These tax laws are often complex and may be subject to different interpretations. To determine the financial statement impact of accounting for income taxes, the Company must make assumptions and judgements about how to interpret and apply these complex tax laws to numerous transactions and business events, as well as make judgements regarding the timing of when certain items may affect taxable income in the United States and Canada. In calculating the provision for interim income taxes, in accordance with ASC Topic 740 Income Taxes, we apply an estimated annual effective tax rate to year-to-date ordinary income. At the end of each interim period, we estimate the effective tax rate expected to be applicable for the full fiscal year. 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. Deferred income taxes arise from temporary differences between the tax and financial statement recognition of revenue and expense. In evaluating our ability to recover our deferred tax assets within the jurisdiction from which they arise we consider all available positive and negative evidence including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and recent financial operations. In projecting future taxable income, we begin with historical results and changes in accounting policies and incorporate assumptions including the amount of future state, federal, and foreign pretax operating income, the reversal of temporary differences, the implementation of feasible and prudent tax planning strategies. If it is determined that a deferred tax asset is not realizable, a valuation allowance is established. The valuation allowance may be reversed in a subsequent reporting period if the Company determines that based on revised estimates of future taxable income or changes in tax planning strategies, it is more likely than not that all or part of the deferred tax asset will become realizable. Our interpretations of tax laws are subject to review and examination by various taxing authorities and jurisdictions where the Company operates, and disputes may occur regarding its view on a tax position. These disputes over interpretations with the various tax authorities may be settled by audit, administrative appeals or adjudication in the court systems of the tax jurisdictions in which the Company operates. We regularly review whether we may be assessed additional income taxes as a result of the resolution of these matters, and the Company records additional reserves as appropriate. In addition, the Company may revise its estimate of income taxes due to changes in income tax laws, legal interpretations, and business strategies. We recognize the financial statement effects of uncertain income tax positions when it is more likely than not, based on the technical merits, that the position will be sustained upon examination. Also, we recognize accrued interest and penalties related to liabilities for uncertain income tax positions in income tax expense. For additional information regarding our provision for income taxes refer to Note 8, Income Taxe s. Tax Receivable Agreement In connection with the reorganization, we entered into a Tax Receivable Agreement with RHI and our Chairman that will obligate us to make payments to RHI and our Chairman generally equal to 90% of the applicable cash savings that we actually realize as a result of the tax attributes generated by (i) certain increases in our allocable share of the tax basis in Holdings’ assets resulting from (a) the purchases of Holdings Units (along with the corresponding shares of our Class D common stock or Class C common stock) from RHI and our Chairman (or their transferees of Holdings Units or other assignees) using the net proceeds from our initial public offering or in any future offering, (b) exchanges by RHI and our Chairman (or their transferees of Holdings Units or other assignees) of Holdings Units (along with the corresponding shares of our Class D common stock or Class C common stock) for cash or shares of our Class B common stock or Class A common stock, as applicable, or (c) payments under the Tax Receivable Agreement; (ii) tax benefits related to imputed interest deemed arising as a result of payments made under the Tax Receivable Agreement and (iii) disproportionate allocations (if any) of tax benefits to Holdings as a result of section 704(c) of the Code that relate to the reorganization transactions. We will retain the benefit of the remaining 10% of these tax savings. |
Basic and Diluted Earnings Per Share | Basic and Diluted Earnings Per Share The Company applies the two-class method for calculating and presenting earnings per share by separately presenting earnings per share for Class A common stock and Class B common stock. In applying the two-class method, the Company allocates undistributed earnings equally on a per share basis between Class A and Class B common stock. According to the Company’s certificate of incorporation, the holders of the Class A and Class B common stock are entitled to participate in earnings equally on a per-share basis, as if all shares of common stock were of a single class, and in such dividends as may be declared by the board of directors. Holders of the Class A and Class B common stock also have equal priority in liquidation. Shares of Class C and Class D common stock do not participate in earnings of Rocket Companies, Inc. As a result, the shares of Class C and Class D common stock are not considered participating securities and are not included in the weighted-average shares outstanding for purposes of earnings per share. Restricted stock units awarded as part of the Company’s compensation program, described in Note 15, Stock-based Compensation , are included in the weighted-average Class A shares outstanding in the calculation of basic EPS once the units are fully vested. Refer to Note 16, Earnings Per Share for more information. |
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 measured 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 consolidated 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 consolidated 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 consolidated 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 consolidated financial statements and related disclosures. In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The amendments in this update change how entities account for convertible instruments and contracts in an entity’s own equity. The standard simplifies the accounting for certain convertible instruments, amends guidance on derivative scope exceptions for contracts in an entity's own equity, and modifies the guidance on diluted earnings per share (EPS) calculations as a result of these changes. This standard will be effective for the Company on January 1, 2022. Early adoption is permitted for fiscal years beginning after December 15, 2020. The Company is currently evaluating the potential impact that the adoption of this ASU will have on the consolidated 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 September 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 Consolidated 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 Consolidated 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 Consolidated Statements of Income and Comprehensive Income. The Company enters into IRLCs to fund residential mortgage loans with its potential borrowers. These commitments are 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 |
Business, Basis of Presentati_3
Business, Basis of Presentation, and Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Cash, Cash Equivalents, and Restricted Cash | Restricted cash as of September 30, 2020 and 2019 consisted of cash on deposit for a repurchase facility and client application deposits, title premiums collected from the insured that are due to the underwritten insurance company and a $25,000 bond. September 30, 2020 2020 2019 Cash and cash equivalents $ 3,485,137 $ 818,328 Restricted cash 85,351 65,586 Total cash, cash equivalents, and restricted cash in the statement of cash flows $ 3,570,488 $ 883,914 |
Schedule of Cash, Cash Equivalents, and Restricted Cash | Restricted cash as of September 30, 2020 and 2019 consisted of cash on deposit for a repurchase facility and client application deposits, title premiums collected from the insured that are due to the underwritten insurance company and a $25,000 bond. September 30, 2020 2020 2019 Cash and cash equivalents $ 3,485,137 $ 818,328 Restricted cash 85,351 65,586 Total cash, cash equivalents, and restricted cash in the statement of cash flows $ 3,570,488 $ 883,914 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 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 nine months ended September 30, 2020 or the year ended December 31, 2019. Level 1 Level 2 Level 3 Total Balance at September 30, 2020 Assets: Mortgage loans held for sale $ — $ 21,301,368 $ 376,032 $ 21,677,400 IRLCs — — 2,590,319 2,590,319 MSRs — — 2,606,149 2,606,149 Forward commitments — 12,149 — 12,149 Total assets $ — $ 21,313,517 $ 5,572,500 $ 26,886,017 Liabilities: Forward commitments — 238,004 — 238,004 Total liabilities $ — $ 238,004 $ — $ 238,004 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: September 30, 2020 December 31, 2019 Unobservable Input Range Range Mortgage loans held for sale Dealer pricing 65 % - 104% (95) % 75 % - 103% (98) % IRLCs Loan funding probability 0 % - 100% (73) % 0 % - 100% (72) % MSRs, MSRs collateral for financing liability, and MSRs financing liability Discount rate 9.5 % - 12.0% (9.9) % 9.5 % - 12.0% (10.0) % Conditional prepayment rate 13.7 % - 47.5% (18.1) % 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 nine months ended September 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 June 30, 2020 $ 416,100 $ 2,393,764 Transfers in(1) 122,763 — Transfers out/principal reductions(1) (164,211) — Net transfers and revaluation gains — 196,555 Total gains included in net income 1,380 — Balance at September 30, 2020 $ 376,032 $ 2,590,319 Balance at June 30, 2019 $ 276,551 $ 507,187 Transfers in(1) 288,321 — Transfers out/principal reductions(1) (241,519) — Net transfers and revaluation gains — 245,077 Total losses included in net income (1,330) — Balance at September 30, 2019 $ 322,023 $ 752,264 Loans Held for Sale IRLCs Balance at December 31, 2019 $ 308,793 $ 508,135 Transfers in(1) 906,527 — Transfers out/principal reductions(1) (825,197) — Net transfers and revaluation gains — 2,082,184 Total losses included in net income (14,091) — Balance at September 30, 2020 $ 376,032 $ 2,590,319 Balance at December 31, 2018 $ 194,752 $ 245,663 Transfers in(1) 815,680 — Transfers out/principal reductions(1) (689,244) — Net transfers and revaluation gains — 506,601 Total gains included in net income 835 — Balance at September 30, 2019 $ 322,023 $ 752,264 _________________________ (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 September 30, 2020 $ 21,677,400 $ 20,748,798 $ 928,602 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: September 30, 2020 December 31, 2019 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Senior Notes, due 5/1/2025 $ 1,242,296 $ 1,287,463 $ 1,241,012 $ 1,297,250 Senior Notes, due 1/15/2028 $ 994,390 $ 1,062,985 $ 992,779 $ 1,046,683 Senior Notes, due 3/1/2029 $ 742,881 $ 742,080 — — Senior Notes, due 3/1/2031 $ 1,237,627 $ 1,239,513 — — |
Mortgage Servicing Rights (Tabl
Mortgage Servicing Rights (Tables) | 9 Months Ended |
Sep. 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 nine months ended: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Fair value, beginning of period $ 2,289,209 $ 2,848,902 $ 2,874,972 $ 3,180,530 MSRs originated 836,557 416,730 2,041,899 1,159,065 MSRs sales (140,359) (340,280) (326,652) (340,280) Changes in fair value: Due to changes in valuation model inputs or assumptions(1) (113,547) (180,428) (1,191,967) (892,755) Due to collection/realization of cash flows (265,711) (210,191) (792,103) (571,827) Total changes in fair value (379,258) (390,619) (1,984,070) (1,464,582) Fair value, end of period $ 2,606,149 $ 2,534,733 $ 2,606,149 $ 2,534,733 _________________________ (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: September 30, December 31, Discount rate 9.9 % 10.0 % Prepayment speeds 18.1 % 14.5 % Life (in years) 4.49 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 September 30, 2020 Mortgage servicing rights $ (86,711) $ (167,475) $ (147,055) $ (281,752) 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) | 9 Months Ended |
Sep. 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 Condensed Consolidated Statements of Cash Flows is below: Nine Months Ended 2020 2019 Balance at the beginning of period $ 13,275,735 $ 5,784,812 Disbursements of mortgage loans held for sale 209,540,623 92,839,248 Proceeds from sales of mortgage loans held for sale(1) (208,122,820) (88,675,431) Gain on sale of loans excluding fair value of MSRs, net(2) 6,983,862 1,591,696 Balance at the end of period $ 21,677,400 $ 11,540,325 _________________________ (1) The proceeds from sales of loans held for sale on the Condensed Consolidated 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 Condensed Consolidated 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) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Funding Facilities | Funding Facilities Facility Type Collateral Maturity Line Amount Committed Line Amount Outstanding Balance September 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 $ 599,945 $ 835,302 2) Master Repurchase Agreement(2)(10) Mortgage loans held for sale(9) 12/3/2020 1,750,000 500,000 1,300,601 1,390,839 3) Master Repurchase Agreement(3)(10) Mortgage loans held for sale(9) 4/22/2022 3,250,000 1,000,000 2,663,264 2,622,070 4) Master Repurchase Agreement(4)(10) Mortgage loans held for sale(9) 7/26/2021 2,000,000 1,700,000 1,874,996 875,617 5) Master Repurchase Agreement(10) Mortgage loans held for sale(9) 4/22/2021 2,500,000 500,000 1,892,852 2,063,099 6) Master Repurchase Agreement(5)(10) Mortgage loans held for sale(9) 9/5/2022 2,000,000 1,500,000 1,732,478 965,903 7) Master Repurchase Agreement(10) Mortgage loans held for sale(9) 9/1/2021 1,750,000 1,137,500 1,332,027 773,822 8) Master Repurchase Agreement(10) Mortgage loans held for sale(9) 6/12/2021 400,000 — 337,951 — 9) Master Repurchase Agreement(10) Mortgage loans held for sale(9) 9/24/2021 1,500,000 750,000 852,205 — 10) Master Repurchase Agreement(6)(10) Mortgage loans held for sale(9) (6) — — — — $ 17,150,000 $ 7,187,500 $ 12,586,319 $ 9,526,652 Early Funding: 11) Early Funding Facility(7)(11) Mortgage loans held for sale(9) (7) 4,000,000 — 4,536,792 2,022,179 12) Early Funding Facility(8)(11) Mortgage loans held for sale(9) (8) 2,500,000 — 1,966,288 493,047 6,500,000 — 6,503,080 2,515,226 Total $ 23,650,000 $ 7,187,500 $ 19,089,399 $ 12,041,878 _________________________ (1) Subsequent to September 30, 2020, this facility was amended to temporarily increase the total facility size to $3,000,000 with $100,000 committed from November 2, 2020 through November 15, 2020. Subsequent to November 15, 2020, the facility will decrease to $2,000,000 with $100,000 committed. (2) This facility had an overall line size of $1,750,000 with $500,000 committed until September 30, 2020. Subsequent to September 30, 2020, the facility decreased to $1,500,000 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 decrease to $2,750,000 with $1,000,000 committed. (4) 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. Subsequent to September 30, 2020 this facility was extended 3-months and is now maturing on October 26, 2021. (5) This facility will have an overall size of $2,000,000 with $1,500,000 committed until December 30, 2020. Subsequent to December 30, 2020, the committed amount will decrease to $1,000,000. (6) Subsequent to September 30, 2020, a new facility was closed. Effective October 9, 2020, the new facility has an overall line size of $500,000 with no committed amount, maturing on October 9, 2021. (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. As of September 30, 2020, this facility is reporting a higher outstanding balance than the line amount shown above. This is because the outstanding balance excludes a transaction that was processed by this facility, but not yet received by the Company. Including this transaction, the outstanding balance is below the line amount. (8) Subsequent to September 30, 2020, this facility was increased to have an overall line size of $3,000,000. 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 nine months ended September 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+1.10% for the nine months ended September 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 September 30, 2020 Outstanding Balance December 31, 2019 Line of Credit Financing Facilities 1) Unsecured line of credit(1)(7) — 7/27/2025 $ 2,000,000 $ — $ — $ — 2) Unsecured line of credit(2)(7) — (2) — — — 90,000 3) Unsecured line of credit(3) 7/31/2025 100,000 — — — 4) Unsecured line of credit(3) — 6/23/2025 50,000 — — — 5) Unsecured line of credit(3) — (3) 10,000 — — — 6) Revolving credit facility(4) — 8/10/2023 950,000 950,000 300,000 — 7) MSR line of credit(8) MSRs 10/22/2021 200,000 — — — 8) MSR line of credit(5)(8) MSRs (5) 200,000 200,000 75,000 75,000 $ 3,510,000 $ 1,150,000 $ 375,000 $ 165,000 Early Buyout Financing Facility 9) Early buy out facility(6)(9) Loans/ Advances 6/9/2021 $ 500,000 $ — $ 213,339 $ 196,247 _________________________ (1) This uncommitted, unsecured Revolving Loan Agreement is with RHI. (2) Effective August 10, 2020, this facility was terminated at the borrower's request and a portion of the commitment was rolled in the new revolving credit facility. (3) Refer to Note 6. Transactions with Related Parties for additional details regarding this unsecured line of credit (4) Subsequent to September 30, 2020, this facility was increased to $1,000,000. (5) 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. (6) This facility provides funding for repurchasing delinquent loans from agency securities loan pools and servicer advances related to the repurchased loans. 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. (7) 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 nine months ended September 30, 2020 and for the year ended December 31, 2019. (8) 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 nine months ended September 30, 2020 and the year ended December 31, 2019. (9) The interest rate charged by lender for the Early buyout financing facility was one-month LIBOR+1.75% for the nine months ended September 30, 2020 and for the year ended December 31, 2019. |
Schedule of Unsecured Senior Notes | Facility Type Maturity Interest Rate Outstanding Balance September 30, 2020 Outstanding Balance December 31, 2019 Unsecured Senior Notes(1)(2) 5/1/2025 5.750 % $ 1,250,000 $ 1,250,000 Unsecured Senior Notes(3) 1/15/2028 5.250 % 1,010,000 1,010,000 Unsecured Senior Notes(4) 3/1/2029 3.625 % 750,000 — Unsecured Senior Notes(5) 3/1/2031 3.875 % 1,250,000 — Total Senior Notes $ 4,260,000 $ 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 $7,704 and $8,988 as of September 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) Subsequent to September 30, 2020 the entire outstanding principal amount of this note was redeemed at a price equal to 102.875% of the principal amount plus accrued and unpaid interest of $1,318,481. (3) 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 $8,547 and $7,063 as of September 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 % (4) The 2029 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 $750,000 carrying amount on the balance sheet by $7,119 as of September 30, 2020. Prior to March 1, 2024 the Company may redeem the notes at its option, in whole or in part upon not less than 10 nor more than 60 days’ notice, at a redemption price equal to 100% of the principal amount redeemed, plus a “makewhole” premium and accrued and unpaid interest. At any time on or after March 1, 2024, the Company may redeem the note at its option, in whole or in part, upon not less than 10 nor more than 60 days’ notice, at the redemption prices set forth below. The Company may also redeem the notes prior to September 1, 2023, at any time or from time to time, in an amount equal to the cash proceeds received by the Company from an equity offering at a redemption price equal to 103.625% of the principal amount plus accrued and unpaid interest, if any, to but excluding the redemption date, in an aggregate principal amount for all such redemptions not to exceed 40% of the original aggregate principal amount of the notes, provided that the redemption take place not later than 90 days after the closing of the related equity offering; and not less than 60% of the principal amount of the notes remains outstanding immediately thereafter. Year Percentage 2024 101.813 % 2025 100.906 % 2026 and thereafter 100.000 % (5) The 2031 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 $1,250,000 carrying amount on the balance sheet by $12,373 as of September 30, 2020. Prior to March 1, 2026 the Company may redeem the notes at its option, in whole or in part upon not less than 10 nor more than 60 days’ notice, at a redemption price equal to 100% of the principal amount redeemed, plus a “makewhole” premium and accrued and unpaid interest. At any time on or after March 1, 2026, the Company may redeem the note at its option, in whole or in part, upon not less than 10 nor more than 60 days’ notice, at the redemption prices set forth below. The Company may also redeem the notes prior to September 1, 2023, at any time or from time to time, in an amount equal to the cash proceeds received by the Company from an equity offering at a redemption price equal to 103.875% of the principal amount plus accrued and unpaid interest, if any, to but excluding the redemption date, in an aggregate principal amount for all such redemptions not to exceed 40% of the original aggregate principal amount of the notes, provided that the redemption take place not later than 90 days after the closing of the related equity offering; and not less than 60% of the principal amount of the notes remains outstanding immediately thereafter. Year Percentage 2026 101.938 % 2027 101.292 % 2028 100.646 % 2029 and thereafter 100.000 % |
Transactions with Related Par_2
Transactions with Related Parties (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
Schedule of Receivables from and Payables to Related Parties | September 30, 2020 December 31, 2019 Principal Interest Rate Principal Interest Rate Included in Notes receivable and due from affiliates on the Condensed Consolidated Balance Sheets Promissory Note—Shareholders Note(1) $ — — $ 57,457 2.38 % Affiliated receivables and other notes 13,071 — 32,480 — Notes receivable and due from affiliates $ 13,071 $ 89,937 Included in Notes payable and due to affiliates on the Condensed Consolidated Balance Sheets RHIO Line of Credit(1) $ — — $ 10,000 5.00 % RHI/ATI Debenture 21,500 8.00 % 21,500 8.00 % Affiliated payables 51,396 — 30,725 — Notes payable and due to affiliates $ 72,896 $ 62,225 _________________________ (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) | 9 Months Ended |
Sep. 30, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Other Assets | Other assets consist of the following: September 30, December 31, 2020 2019 Mortgage production related receivables $ 191,910 $ 157,288 Margin call receivable from counterparty 185,664 3,697 Prepaid expenses 93,601 62,229 Disbursement funds advanced 80,794 56,721 Ginnie Mae buyouts 48,657 78,174 Non-production-related receivables 41,008 37,416 Goodwill and other intangible assets 36,013 40,261 Other real estate owned 984 1,619 Other 58,171 64,182 Total other assets $ 736,802 $ 501,587 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense | The components of income tax expense were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Total income before income taxes and non-controlling interest $ 3,057,066 $ 499,747 $ 6,642,875 $ 147,255 Total provision for income taxes $ 61,683 $ 5,117 $ 84,363 $ 4,291 Effective tax provision rate 2.02 % 1.02 % 1.27 % 2.91 % |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Net Hedging Losses and Gains | Net hedging losses and gains were as follows: Three Months Ended September 30, Nine months ended September 30, 2020 (1) 2019 2020 (1) 2019 Hedging (losses) gains $ (776,086) $ 164,370 $ (2,283,874) $ 129,917 _________________________ (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 September 30, 2020: IRLCs, net of loan funding probability(1) $ 51,798,693 $ 2,590,319 $ — Forward commitments(2) $ 67,901,171 $ 12,149 $ 238,004 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 $185,664 and $3,697 of cash pledged to counterparties related to these forward commitments at September 30, 2020 and December 31, 2019, respectively, classified in other assets in the Condensed Consolidated Balance Sheets. As of September 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 Consolidated Balance Sheets. Gross Amount of Recognized Assets or Liabilities Gross Amounts Offset in the Condensed Consolidated Balance Sheets Net Amounts Presented in the Condensed Consolidated Balance Sheets Offsetting of Derivative Assets Balance at September 30, 2020: Forward commitments $ 15,024 $ (2,875) $ 12,149 Balance at December 31, 2019: Forward commitments $ 6,690 $ (2,852) $ 3,838 Offsetting of Derivative Liabilities Balance at September 30, 2020: Forward commitments $ (402,455) $ 164,451 $ (238,004) 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 $185,664 and $3,697 of cash pledged to counterparties related to these forward commitments at September 30, 2020 and December 31, 2019, respectively, classified in other assets in the Condensed Consolidated Balance Sheets. As of September 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 Consolidated Balance Sheets. Gross Amount of Recognized Assets or Liabilities Gross Amounts Offset in the Condensed Consolidated Balance Sheets Net Amounts Presented in the Condensed Consolidated Balance Sheets Offsetting of Derivative Assets Balance at September 30, 2020: Forward commitments $ 15,024 $ (2,875) $ 12,149 Balance at December 31, 2019: Forward commitments $ 6,690 $ (2,852) $ 3,838 Offsetting of Derivative Liabilities Balance at September 30, 2020: Forward commitments $ (402,455) $ 164,451 $ (238,004) Balance at December 31, 2019: Forward commitments $ (89,389) $ 45,595 $ (43,794) |
Commitments, Contingencies, a_2
Commitments, Contingencies, and Guarantees (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of IRLC Unpaid Principal Balance | The UPB of IRLCs was as follows: September 30, 2020 December 31, 2019 Fixed Rate Variable Rate Fixed Rate Variable Rate IRLCs $ 69,607,563 $ 1,502,059 $ 20,577,282 $ 974,693 |
Schedule of Investor Reserves Activity | The following presents the activity in the investor reserves: Three Months Ended Nine Months Ended 2020 2019 2020 2019 Balance at beginning of period $ 63,012 $ 55,242 $ 54,387 $ 56,943 (Benefit from) provision for investor reserves (3,665) (1,415) 5,698 (2,067) Premium recapture and indemnification losses paid (2,329) (203) (3,067) (1,252) Balance at end of period $ 57,018 $ 53,624 $ 57,018 $ 53,624 |
Segments (Tables)
Segments (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Key Operating Data for Business Segments | Key operating data for our business segments for the three and nine months ended: Three Months Ended Direct to Consumer Partner Network Segments Total All Other Total Revenues Gain on sale $ 3,128,695 $ 1,151,071 $ 4,279,766 $ 676 $ 4,280,442 Interest income 53,764 25,691 79,455 435 79,890 Interest expense on funding facilities (46,936) (22,428) (69,364) — (69,364) Servicing fee income 271,254 — 271,254 904 272,158 Changes in fair value of MSRs (374,765) — (374,765) — (374,765) Other income 237,855 47,858 285,713 160,044 445,757 Total U.S. GAAP Revenue $ 3,269,867 $ 1,202,192 $ 4,472,059 $ 162,059 $ 4,634,118 Plus: Decrease in MSRs due to valuation assumptions 109,054 — 109,054 — 109,054 Adjusted revenue $ 3,378,921 $ 1,202,192 $ 4,581,113 $ 162,059 $ 4,743,172 Directly attributable expenses 948,150 141,214 1,089,364 113,464 1,202,828 Contribution margin $ 2,430,771 $ 1,060,978 $ 3,491,749 $ 48,595 $ 3,540,344 Nine Months Ended Direct to Consumer Partner Network Segments Total All Other Total Revenues Gain on sale $ 8,759,914 $ 2,089,285 $ 10,849,199 $ 6,936 $ 10,856,135 Interest income 152,087 77,638 229,725 2,246 231,971 Interest expense on funding facilities (107,718) (54,451) (162,169) (411) (162,580) Servicing fee income 776,117 — 776,117 2,976 779,093 Changes in fair value of MSRs (1,918,860) — (1,918,860) — (1,918,860) Other income 589,415 107,328 696,743 553,738 1,250,481 Total U.S. GAAP Revenue $ 8,250,955 $ 2,219,800 $ 10,470,755 $ 565,485 $ 11,036,240 Plus: Decrease in MSRs due to valuation assumptions 1,126,757 — 1,126,757 — 1,126,757 Adjusted revenue $ 9,377,712 $ 2,219,800 $ 11,597,512 $ 565,485 $ 12,162,997 Directly attributable expenses 2,677,729 372,337 3,050,066 282,379 3,332,445 Contribution margin $ 6,699,983 $ 1,847,463 $ 8,547,446 $ 283,106 $ 8,830,552 Three Months Ended Direct to Consumer Partner Network Segments Total All Other Total Revenues Gain on sale $ 1,373,685 $ 173,161 $ 1,546,846 $ 13,390 $ 1,560,236 Interest income 37,749 24,400 62,149 1,500 63,649 Interest expense on funding facilities (20,597) (13,313) (33,910) (513) (34,423) Servicing fee income 235,158 — 235,158 1,071 236,229 Changes in fair value of MSRs (390,619) — (390,619) — (390,619) Other income 123,556 6,122 129,678 55,675 185,353 Total U.S. GAAP Revenue $ 1,358,932 $ 190,370 $ 1,549,302 $ 71,123 $ 1,620,425 Plus: Decrease in MSRs due to valuation assumptions 180,428 — 180,428 — 180,428 Adjusted revenue $ 1,539,360 $ 190,370 $ 1,729,730 $ 71,123 $ 1,800,853 Directly attributable expenses 716,923 74,569 791,492 63,174 854,666 Contribution margin $ 822,437 $ 115,801 $ 938,238 $ 7,949 $ 946,187 Nine Months Ended Direct to Consumer Partner Network Segments Total All Other Total Revenues Gain on sale $ 3,037,166 $ 325,206 $ 3,362,372 $ 37,569 $ 3,399,941 Interest income 111,080 58,277 169,357 2,929 172,286 Interest expense on funding facilities (58,404) (30,713) (89,117) (1,349) (90,466) Servicing fee income 698,503 — 698,503 2,587 701,090 Changes in fair value of MSRs (1,464,582) — (1,464,582) — (1,464,582) Other income 299,022 15,956 314,978 155,953 470,931 Total U.S. GAAP Revenue $ 2,622,785 $ 368,726 $ 2,991,511 $ 197,689 $ 3,189,200 Plus: Decrease in MSRs due to valuation assumptions 892,755 — 892,755 — 892,755 Adjusted revenue $ 3,515,540 $ 368,726 $ 3,884,266 $ 197,689 $ 4,081,955 Directly attributable expenses 1,867,398 176,688 2,044,086 153,547 2,197,633 Contribution margin $ 1,648,142 $ 192,038 $ 1,840,180 $ 44,142 $ 1,884,322 |
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 consolidated U.S. GAAP income before taxes for the three and nine months ended: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Contribution margin, excluding change in MSRs due to valuation assumptions $ 3,540,344 $ 946,187 $ 8,830,552 $ 1,884,322 Decrease in MSRs due to valuation assumptions (109,054) (180,428) (1,126,757) (892,755) Contribution margin, including change in MSRs due to valuation assumptions $ 3,431,290 $ 765,759 $ 7,703,795 $ 991,567 Less expenses not allocated to segments : Salaries, commissions and team member benefits $ 198,482 $ 129,732 602,832 422,141 General and administrative expenses 122,137 74,597 310,711 258,258 Depreciation and amortization 15,329 21,382 47,633 57,174 Interest and amortization expense on non-funding debt 38,016 33,052 104,291 99,220 Other expenses 260 7,249 (4,547) 7,519 Income (loss) before income taxes $ 3,057,066 $ 499,747 $ 6,642,875 $ 147,255 |
Non-controlling Interests (Tabl
Non-controlling Interests (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Noncontrolling Interest [Abstract] | |
Schedule of Non-controlling Interests | The following table summarizes the ownership of Holdings Units in Holdings as of September 30, 2020: Holdings Units Ownership Percentage Rocket Companies, Inc.'s ownership of Holdings Units 115,372,565 5.81 % Holdings Units held by our Chairman 1,101,822 0.06 % Holdings Units held by RHI 1,867,977,661 94.13 % Balance at end of period 1,984,452,048 100.00 % |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Option Activity | The Stock Options activity for the period from July 1, 2020 to September 30, 2020 was as follows: Number of Stock Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding on July 1, 2020 — — — — Granted 26,351,287 $ 18.00 2.8 Years $ 50,858 Exercised — — — — Expired — — — — Forfeited 197,635 $ 18.00 2.8 Years $ 381 Outstanding as of September 30, 2020 26,153,652 $ 18.00 2.8 Years $ 50,477 Exercisable as of September 30, 2020 — — — — |
Schedule of RSU Activity | The RSU activity for the period from July 1, 2020 to September 30, 2020 was as follows: Number of Units Weighted Average Grant Date Fair Value Weighted Average Remaining Contractual Term Outstanding on July 1, 2020 — — — Granted 16,718,938 $ 18.00 2.4 Years Vested — — — Forfeited 200,546 $ 18.00 2.4 Years Outstanding as of September 30, 2020 16,518,392 $ 18.00 2.4 Years |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Calculation of Basic and Diluted Earnings per Share | The following table sets for the calculation of the basic and diluted earnings per share for the periods following the reorganization and IPO for Class A common stock: Three Months Ended Nine Months Ended September 30, 2020 Net income $ 2,995,383 $ 6,558,512 Net income attributable to non-controlling interests $ 2,937,480 $ 6,500,609 Net income attributable to Rocket Companies $ 57,903 $ 57,903 Numerator: Net income attributable to Class A common shareholders $ 57,903 $ 57,903 Net income attributable to Class A common shareholders - diluted $ 57,903 $ 57,903 Denominator: Weighted average shares of Class A common stock outstanding - basic 106,265,422 106,265,422 Weighted average shares of Class A common stock outstanding - diluted 106,265,422 106,265,422 Earnings per share of Class A common stock outstanding - basic $ 0.54 $ 0.54 Earnings per share of Class A common stock outstanding - diluted $ 0.54 $ 0.54 |
Business, Basis of Presentati_4
Business, Basis of Presentation, and Accounting Policies - Narrative (Details) | Nov. 10, 2020USD ($) | Sep. 09, 2020shares | Aug. 14, 2020USD ($)$ / sharesshares | Sep. 09, 2020USD ($)shares | Sep. 30, 2020USD ($)vote | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)voteshares | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($) |
Basis of Presentation [Line Items] | |||||||||
Holdings units acquired | shares | 115,000,000 | 115,000,000 | |||||||
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% | ||||||||
Net income | $ 57,903,000 | $ 0 | $ 57,903,000 | $ 0 | |||||
Unpaid principal balance of loans for which MSRs sold subsequent to period end | $ 20,000,000,000 | $ 20,000,000,000 | |||||||
Percentage of total single-family mortgage services portfolio of MSRs sold subsequent to period end | 5.00% | 5.00% | |||||||
Unsecured Senior Notes | |||||||||
Basis of Presentation [Line Items] | |||||||||
Aggregate balance | $ 4,260,000,000 | $ 4,260,000,000 | $ 2,260,000,000 | ||||||
Unsecured Senior Notes | 2025 Senior Notes | |||||||||
Basis of Presentation [Line Items] | |||||||||
Interest Rate (percent) | 5.75% | 5.75% | |||||||
Aggregate balance | $ 1,250,000,000 | $ 1,250,000,000 | 1,250,000,000 | ||||||
ATI | |||||||||
Basis of Presentation [Line Items] | |||||||||
Total aggregate consideration | $ 14,400,000 | ||||||||
Holding units issued in acquisition (in shares) | shares | 800,000 | ||||||||
Value of holding units issued in acquisition (in dollars per share) | $ / shares | $ 18 | ||||||||
ATI | |||||||||
Basis of Presentation [Line Items] | |||||||||
Net income | $ 4,700,000 | ||||||||
Affiliated entity | |||||||||
Basis of Presentation [Line Items] | |||||||||
Executive management compensation expense | $ 8,042,000 | $ 11,596,000 | $ 94,776,000 | $ 33,526,000 | |||||
Class A common stock | |||||||||
Basis of Presentation [Line Items] | |||||||||
Number of votes on stockholder matters per share of stock | vote | 1 | 1 | |||||||
Class B common stock | |||||||||
Basis of Presentation [Line Items] | |||||||||
Number of votes on stockholder matters per share of stock | vote | 10 | 10 | |||||||
Class C common stock | |||||||||
Basis of Presentation [Line Items] | |||||||||
Number of votes on stockholder matters per share of stock | vote | 1 | 1 | |||||||
Class D common stock | |||||||||
Basis of Presentation [Line Items] | |||||||||
Number of votes on stockholder matters per share of stock | vote | 10 | 10 | |||||||
IPO | |||||||||
Basis of Presentation [Line Items] | |||||||||
Net proceeds from IPO | $ 2,023,000,000 | ||||||||
IPO | Class A common stock | |||||||||
Basis of Presentation [Line Items] | |||||||||
Number of shares issued (in shares) | shares | 115,000,000 | ||||||||
Underwriters option | Class A common stock | |||||||||
Basis of Presentation [Line Items] | |||||||||
Number of shares issued (in shares) | shares | 15,000,000 | ||||||||
Subsequent Event | |||||||||
Basis of Presentation [Line Items] | |||||||||
Share repurchase program authorization | $ 1,000,000,000 | ||||||||
Share repurchase program period in effect | 2 years |
Business, Basis of Presentati_5
Business, Basis of Presentation, and Accounting Policies - Revenue Recognition (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Core Digital Media lead generation revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | $ 5,755 | $ 9,847 | $ 18,819 | $ 31,138 |
Professional services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | 3,528 | 2,399 | 7,155 | 6,286 |
Real estate network referral | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | 13,633 | 13,286 | 33,459 | 31,853 |
Contact center | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | 6,246 | 6,456 | 19,403 | 19,701 |
Closing fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | 122,735 | 53,672 | 302,260 | 126,995 |
Appraisal revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | $ 20,655 | $ 20,408 | $ 59,054 | $ 56,591 |
Business, Basis of Presentati_6
Business, Basis of Presentation, and Accounting Policies - Cash Reconciliation (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Dec. 31, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Cash and cash equivalents | $ 3,485,137 | $ 1,394,571 | $ 818,328 | |
Restricted cash | 85,351 | 61,154 | 65,586 | |
Total cash, cash equivalents, and restricted cash in the statement of cash flows | 3,570,488 | $ 1,455,725 | 883,914 | $ 1,136,322 |
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 | Sep. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
Assets: | ||||||
Mortgage loans held for sale | $ 21,677,400 | $ 13,275,735 | ||||
MSRs | 2,606,149 | $ 2,289,209 | 2,874,972 | $ 2,534,733 | $ 2,848,902 | $ 3,180,530 |
MSRs collateral for financing liability | 0 | 205,108 | ||||
Total assets | 26,886,017 | 16,867,788 | ||||
Liabilities: | ||||||
Derivative liability | 238,004 | 43,794 | ||||
MSRs financing liability | 189,987 | |||||
Total liabilities | 238,004 | 233,781 | ||||
IRLCs | ||||||
Assets: | ||||||
Derivative asset | 2,590,319 | 508,135 | ||||
Forward commitments | ||||||
Assets: | ||||||
Derivative asset | 12,149 | 3,838 | ||||
Liabilities: | ||||||
Derivative liability | 238,004 | 43,794 | ||||
Level 1 | ||||||
Assets: | ||||||
Mortgage loans held for sale | 0 | 0 | ||||
MSRs | 0 | 0 | ||||
MSRs collateral for financing liability | 0 | |||||
Total assets | 0 | 0 | ||||
Liabilities: | ||||||
MSRs financing liability | 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 | 21,301,368 | 12,966,942 | ||||
MSRs | 0 | 0 | ||||
MSRs collateral for financing liability | 0 | |||||
Total assets | 21,313,517 | 12,970,780 | ||||
Liabilities: | ||||||
MSRs financing liability | 0 | |||||
Total liabilities | 238,004 | 43,794 | ||||
Level 2 | IRLCs | ||||||
Assets: | ||||||
Derivative asset | 0 | 0 | ||||
Level 2 | Forward commitments | ||||||
Assets: | ||||||
Derivative asset | 12,149 | 3,838 | ||||
Liabilities: | ||||||
Derivative liability | 238,004 | 43,794 | ||||
Level 3 | ||||||
Assets: | ||||||
Mortgage loans held for sale | 376,032 | 308,793 | ||||
MSRs | 2,606,149 | 2,874,972 | ||||
MSRs collateral for financing liability | 205,108 | |||||
Total assets | 5,572,500 | 3,897,008 | ||||
Liabilities: | ||||||
MSRs financing liability | 189,987 | |||||
Total liabilities | 0 | 189,987 | ||||
Level 3 | IRLCs | ||||||
Assets: | ||||||
Derivative asset | 2,590,319 | 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 | Sep. 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 | 1.04 | 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 | 0.73 | 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 | 0.099 | 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 | 0.137 | 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 | 0.475 | 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 | 0.181 | 0.145 |
Fair Value Measurements - Recon
Fair Value Measurements - Reconciliation of Level 3 Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Loans Held for Sale | ||||
Reconciliation of Level 3 Assets: | ||||
Beginning balance | $ 416,100 | $ 276,551 | $ 308,793 | $ 194,752 |
Transfers in | 122,763 | 288,321 | 906,527 | 815,680 |
Transfers out / principal reduction | (164,211) | (241,519) | (825,197) | (689,244) |
Net transfers and revaluation gains | 0 | 0 | 0 | 0 |
Total gains (losses) included in net income | 1,380 | (1,330) | (14,091) | 835 |
Ending balance | 376,032 | 322,023 | 376,032 | 322,023 |
IRLCs | ||||
Reconciliation of Level 3 Assets: | ||||
Beginning balance | 2,393,764 | 507,187 | 508,135 | 245,663 |
Transfers in | 0 | 0 | 0 | 0 |
Transfers out / principal reduction | 0 | 0 | 0 | 0 |
Net transfers and revaluation gains | 196,555 | 245,077 | 2,082,184 | 506,601 |
Total gains (losses) included in net income | 0 | 0 | 0 | 0 |
Ending balance | $ 2,590,319 | $ 752,264 | $ 2,590,319 | $ 752,264 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value Option for Mortgage Loans Held for Sale (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Fair Value Disclosures [Abstract] | ||
Mortgage loans held for sale, at fair value | $ 21,677,400 | $ 13,275,735 |
Mortgage loans held for sale, principal amount due upon maturity | 20,748,798 | 12,929,143 |
Difference | $ 928,602 | $ 346,592 |
Fair Value Measurements - Liabi
Fair Value Measurements - Liabilities not Recorded at Fair Value on Recurring or Nonrecurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Carrying Amount | 2025 Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Senior Notes | $ 1,242,296 | $ 1,241,012 |
Carrying Amount | 2028 Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Senior Notes | 994,390 | 992,779 |
Carrying Amount | 2029 Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Senior Notes | 742,881 | 0 |
Carrying Amount | 2031 Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Senior Notes | 1,237,627 | 0 |
Estimated Fair Value | 2025 Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Senior Notes | 1,287,463 | 1,297,250 |
Estimated Fair Value | 2028 Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Senior Notes | 1,062,985 | 1,046,683 |
Estimated Fair Value | 2029 Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Senior Notes | 742,080 | 0 |
Estimated Fair Value | 2031 Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Senior Notes | $ 1,239,513 | $ 0 |
Mortgage Servicing Rights - Sum
Mortgage Servicing Rights - Summary of Changes to MSR Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Servicing Asset at Fair Value, Amount [Roll Forward] | ||||
Fair value, beginning of period | $ 2,289,209 | $ 2,848,902 | $ 2,874,972 | $ 3,180,530 |
MSRs originated | 836,557 | 416,730 | 2,041,899 | 1,159,065 |
MSRs sales | (140,359) | (340,280) | (326,652) | (340,280) |
Changes in fair value: | ||||
Due to changes in valuation model inputs or assumptions | (113,547) | (180,428) | (1,191,967) | (892,755) |
Due to collection/realization of cash flows | (265,711) | (210,191) | (792,103) | (571,827) |
Total changes in fair value | (379,258) | (390,619) | (1,984,070) | (1,464,582) |
Fair value, end of period | $ 2,606,149 | $ 2,534,733 | $ 2,606,149 | $ 2,534,733 |
Mortgage Servicing Rights - Nar
Mortgage Servicing Rights - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Dec. 31, 2019 | |
Transfers and Servicing [Abstract] | ||||
UPB of mortgage loans serviced | $ 368,243,032 | $ 368,243,032 | $ 311,718,188 | |
Delinquent loans as a percentage of total portfolio (percent) | 3.91% | 3.91% | ||
Delinquent loans as a percentage of total portfolio, excluding clients in forbearance plans (percent) | 0.71% | 0.71% | ||
Book value of MSRs sold and not qualifying for sale accounting treatment | $ 340,000 | |||
Unrealized gains relating to the MSRs liability | $ 58,926 | |||
Unrealized losses relating to the MSRs collateral asset | $ 58,926 | |||
Book value of MSRs sold | $ 326,653 |
Mortgage Servicing Rights - S_2
Mortgage Servicing Rights - Summary of Fair Value Assumptions (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Transfers and Servicing [Abstract] | ||
Discount rate (percent) | 9.90% | 10.00% |
Prepayment speeds (percent) | 18.10% | 14.50% |
Life (in years) | 4 years 5 months 26 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 | Sep. 30, 2020 | Dec. 31, 2019 |
Discount Rate | ||
Discount Rate, 100 BPS Adverse Change | $ (86,711) | $ (101,495) |
Discount Rate, 200 BPS Adverse Change | (167,475) | (195,894) |
Prepayment Speeds | ||
Prepayment Speeds, 10% Adverse Change | (147,055) | (133,039) |
Prepayment Speeds, 20% Adverse Change | $ (281,752) | $ (259,346) |
Mortgage Loans Held for Sale (D
Mortgage Loans Held for Sale (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 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 | 209,540,623 | 92,839,248 |
Proceeds from sales of mortgage loans held for sale | (208,122,820) | (88,675,431) |
Gain on sale of loans excluding fair value of MSRs, net | 6,983,862 | 1,591,696 |
Balance at the end of period | $ 21,677,400 | $ 11,540,325 |
Mortgage loans held for sale average holding period | 18 days |
Borrowings - Narrative (Details
Borrowings - Narrative (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 14, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | |||
Cash used to buy-down funding facilities and self-fund loans | $ 660,531,000 | ||
Buy-down funds | 350,000,000 | ||
Self-funding | 310,531,000 | ||
Unsecured Senior Notes | |||
Debt Instrument [Line Items] | |||
Aggregate balance | 4,260,000,000 | $ 2,260,000,000 | |
Unsecured line of credit, maturing Feb 28 2021 | Line of Credit | |||
Debt Instrument [Line Items] | |||
Line amount | $ 0 | 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) | 0.50% | ||
2029 Senior Notes | Unsecured Senior Notes | |||
Debt Instrument [Line Items] | |||
Aggregate balance | $ 750,000,000 | $ 750,000,000 | 0 |
Interest Rate (percent) | 3.625% | 3.625% | |
2031 Senior Notes | Unsecured Senior Notes | |||
Debt Instrument [Line Items] | |||
Aggregate balance | $ 1,250,000,000 | $ 1,250,000,000 | 0 |
Interest Rate (percent) | 3.875% | 3.875% | |
2028 Senior Notes | Unsecured Senior Notes | |||
Debt Instrument [Line Items] | |||
Aggregate balance | $ 1,010,000,000 | $ 1,010,000,000 | |
Interest Rate (percent) | 5.25% |
Borrowings - Funding Facilities
Borrowings - Funding Facilities (Details) - USD ($) | 1 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Nov. 12, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | Jan. 01, 2021 | Dec. 31, 2020 | Nov. 16, 2020 | Nov. 02, 2020 | Oct. 09, 2020 | Oct. 01, 2020 | |
Line of Credit Facility [Line Items] | |||||||||
Total Funding Facilities | $ 19,089,399,000 | $ 12,041,878,000 | |||||||
Funding Facilities | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Line Amount | 23,650,000,000 | ||||||||
Committed Line Amount | 7,187,500,000 | ||||||||
Funding Facilities | MRA funding | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Line Amount | 17,150,000,000 | ||||||||
Committed Line Amount | 7,187,500,000 | ||||||||
Master Repurchase Agreements | $ 12,586,319,000 | $ 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 | 599,945,000 | $ 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 | 1,300,601,000 | 1,390,839,000 | |||||||
Funding Facilities | Master Repurchase Agreement Due Dec 03 2020 | Subsequent Event | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Line Amount | $ 1,500,000,000 | ||||||||
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 | 2,663,264,000 | 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 | $ 3,250,000,000 | |||||||
Committed Line Amount | 1,000,000,000 | 1,000,000,000 | |||||||
Funding Facilities | Master Repurchase Agreement Due Jul 26 2021 | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Line Amount | 2,000,000,000 | ||||||||
Committed Line Amount | 1,700,000,000 | ||||||||
Master Repurchase Agreements | $ 1,874,996,000 | 875,617,000 | |||||||
Facility term | 12 months | ||||||||
Extension term | 3 months | ||||||||
Timing option for extending facility | 3 months | ||||||||
Funding Facilities | Master Repurchase Agreement Due Jul 26 2021 | Subsequent Event | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Extension term | 3 months | ||||||||
Funding Facilities | Master Repurchase Agreement Due Apr 22 2021 | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Line Amount | $ 2,500,000,000 | ||||||||
Committed Line Amount | 500,000,000 | ||||||||
Master Repurchase Agreements | 1,892,852,000 | 2,063,099,000 | |||||||
Funding Facilities | Master Repurchase Agreement Due Sep 05 2022 | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Line Amount | 2,000,000,000 | ||||||||
Committed Line Amount | 1,500,000,000 | ||||||||
Master Repurchase Agreements | 1,732,478,000 | 965,903,000 | |||||||
Funding Facilities | Master Repurchase Agreement Due Sep 05 2022 | Forecast | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Line Amount | $ 1,000,000,000 | 2,000,000,000 | |||||||
Committed Line Amount | $ 1,500,000,000 | ||||||||
Funding Facilities | Master Repurchase Agreement Due Sep 01 2021 | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Line Amount | 1,750,000,000 | ||||||||
Committed Line Amount | 1,137,500,000 | ||||||||
Master Repurchase Agreements | 1,332,027,000 | 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 | 337,951,000 | 0 | |||||||
Funding Facilities | Master Repurchase Agreement Due Sep 24 2021 | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Line Amount | 1,500,000,000 | ||||||||
Committed Line Amount | 750,000,000 | ||||||||
Master Repurchase Agreements | 852,205,000 | 0 | |||||||
Funding Facilities | Master Repurchase Agreement Due Oct 09 2021 | Subsequent Event | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Line Amount | $ 500,000,000 | ||||||||
Funding Facilities | Early Funding | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Line Amount | 6,500,000,000 | ||||||||
Committed Line Amount | 0 | ||||||||
Early Funding Facilities | $ 6,503,080,000 | $ 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 | 1.10% | 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 | 4,536,792,000 | $ 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 | $ 1,966,288,000 | $ 493,047,000 | |||||||
Funding Facilities | Early Funding Facility, two | Subsequent Event | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Line Amount | $ 3,000,000,000 |
Borrowings - Line of Credit Fin
Borrowings - Line of Credit Financing Facilities (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | Nov. 12, 2020 | |
Line of Credit Facility [Line Items] | |||
Line of Credit Financing Facilities | $ 374,971,000 | $ 165,000,000 | |
Early Buyout Financing Facilities | 213,339,000 | 196,247,000 | |
Line of Credit Financing Facilities | |||
Line of Credit Facility [Line Items] | |||
Line Amount | 3,510,000,000 | ||
Committed Line Amount | 1,150,000,000 | ||
Line of Credit Financing Facilities | $ 375,000,000 | $ 165,000,000 | |
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 Jul 27 2025, RHI | Affiliated entity | |||
Line of Credit Facility [Line Items] | |||
Line Amount | $ 2,000,000,000 | ||
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 | 0 | 175,000,000 | |
Committed Line Amount | 0 | ||
Line of Credit Financing Facilities | 0 | 90,000,000 | |
Line of Credit | Unsecured line of credit, maturing Jul 31 2025 | |||
Line of Credit Facility [Line Items] | |||
Line Amount | 100,000,000 | ||
Committed Line Amount | 0 | ||
Line of Credit Financing Facilities | 0 | 0 | |
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 | ||
Revolving Credit Facility | Revolving credit facility due Aug 10 2023 | |||
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 | $ 0 | |
Revolving Credit Facility | Revolving credit facility due Aug 10 2023 | Subsequent Event | |||
Line of Credit Facility [Line Items] | |||
Line Amount | $ 1,000,000,000 | ||
Early Buyout Financing Facility | |||
Line of Credit Facility [Line Items] | |||
Line Amount | 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 | 1 Months Ended | 9 Months Ended | ||
Nov. 12, 2020 | Sep. 30, 2020 | Sep. 14, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | ||||
Outstanding Balance | $ 4,260,000 | $ 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 | $ 7,704 | 8,988 | ||
Redemption period start date | May 1, 2020 | |||
2025 Senior Notes | Subsequent Event | ||||
Debt Instrument [Line Items] | ||||
Redemption price (percent) | 102.875% | |||
Redemption price | $ 1,318,481 | |||
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 | 8,547 | 9,421 | ||
Unamortized discounts | $ 7,063 | 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% | |||
2029 Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Interest Rate (percent) | 3.625% | 3.625% | ||
Outstanding Balance | $ 750,000 | $ 750,000 | 0 | |
Unamortized debt issuance costs and discounts | $ 7,119 | |||
Redemption period start date | Mar. 1, 2024 | |||
2029 Senior Notes | Minimum | ||||
Debt Instrument [Line Items] | ||||
Redemption notice period (in days) | 10 days | |||
2029 Senior Notes | Maximum | ||||
Debt Instrument [Line Items] | ||||
Redemption notice period (in days) | 60 days | |||
2029 Senior Notes | Redemption period one | ||||
Debt Instrument [Line Items] | ||||
Redemption price (percent) | 101.813% | |||
2029 Senior Notes | Redemption period two | ||||
Debt Instrument [Line Items] | ||||
Redemption price (percent) | 100.906% | |||
2029 Senior Notes | Redemption period three | ||||
Debt Instrument [Line Items] | ||||
Redemption price (percent) | 100.00% | |||
2029 Senior Notes | Redemption with makewhole premium | ||||
Debt Instrument [Line Items] | ||||
Redemption period end date | Mar. 1, 2024 | |||
Redemption price (percent) | 100.00% | |||
2029 Senior Notes | Redemption with makewhole premium | Minimum | ||||
Debt Instrument [Line Items] | ||||
Redemption notice period (in days) | 10 days | |||
2029 Senior Notes | Redemption with makewhole premium | Maximum | ||||
Debt Instrument [Line Items] | ||||
Redemption notice period (in days) | 60 days | |||
2029 Senior Notes | Redemption with proceeds from equity offering | ||||
Debt Instrument [Line Items] | ||||
Redemption period end date | Sep. 1, 2023 | |||
Redemption price (percent) | 103.625% | |||
Maximum principal amount that can be redeemed (percent) | 40.00% | |||
Time for redemption from closing of equity offering | 90 days | |||
Minimum principal amount that must remain outstanding (percent) | 60.00% | |||
2031 Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Interest Rate (percent) | 3.875% | 3.875% | ||
Outstanding Balance | $ 1,250,000 | $ 1,250,000 | $ 0 | |
Unamortized debt issuance costs and discounts | $ 12,373 | |||
Redemption period start date | Mar. 1, 2026 | |||
2031 Senior Notes | Minimum | ||||
Debt Instrument [Line Items] | ||||
Redemption notice period (in days) | 10 days | |||
2031 Senior Notes | Maximum | ||||
Debt Instrument [Line Items] | ||||
Redemption notice period (in days) | 60 days | |||
2031 Senior Notes | Redemption period one | ||||
Debt Instrument [Line Items] | ||||
Redemption price (percent) | 101.938% | |||
2031 Senior Notes | Redemption period two | ||||
Debt Instrument [Line Items] | ||||
Redemption price (percent) | 101.292% | |||
2031 Senior Notes | Redemption period three | ||||
Debt Instrument [Line Items] | ||||
Redemption price (percent) | 100.646% | |||
2031 Senior Notes | Redemption period four | ||||
Debt Instrument [Line Items] | ||||
Redemption price (percent) | 100.00% | |||
2031 Senior Notes | Redemption with makewhole premium | ||||
Debt Instrument [Line Items] | ||||
Redemption period end date | Mar. 1, 2026 | |||
Redemption price (percent) | 100.00% | |||
2031 Senior Notes | Redemption with makewhole premium | Minimum | ||||
Debt Instrument [Line Items] | ||||
Redemption notice period (in days) | 10 days | |||
2031 Senior Notes | Redemption with makewhole premium | Maximum | ||||
Debt Instrument [Line Items] | ||||
Redemption notice period (in days) | 60 days | |||
2031 Senior Notes | Redemption with proceeds from equity offering | ||||
Debt Instrument [Line Items] | ||||
Redemption period end date | Sep. 1, 2023 | |||
Redemption price (percent) | 103.875% | |||
Maximum principal amount that can be redeemed (percent) | 40.00% | |||
Time for redemption from closing of equity offering | 90 days | |||
Minimum principal amount that must remain outstanding (percent) | 60.00% |
Transactions with Related Par_3
Transactions with Related Parties - Narrative (Details) - USD ($) | Jul. 31, 2020 | Jun. 23, 2020 | Jan. 10, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Jul. 24, 2020 | Dec. 24, 2019 | Jun. 09, 2017 | Jan. 06, 2017 |
Related Party Transaction [Line Items] | ||||||||||||
Lines of credit | $ 374,971,000 | $ 374,971,000 | $ 165,000,000 | |||||||||
Affiliated entity | Line of Credit | Unsecured line of credit, maturing Jul 27 2025, RHI | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Line amount | 2,000,000,000 | 2,000,000,000 | ||||||||||
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 Jul 27 2025, RHI | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Line amount | $ 2,000,000,000 | |||||||||||
Affiliated entity | RHI credit agreement | Line of Credit | Unsecured line of credit, maturing Jul 27 2025, RHI | One-month LIBOR | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Basis spread on variable rate | 1.25% | |||||||||||
Affiliated entity | 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 | 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% | |||||||||||
Affiliated entity | RHI/ATI Debenture | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Surplus debenture with related party | 21,500,000 | $ 21,500,000 | $ 21,500,000 | |||||||||
Interest rate (percent) | 8.00% | 8.00% | ||||||||||
Affiliated entity | RHIO credit agreement | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Interest rate (percent) | 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 | 3,528,000 | $ 2,399,000 | $ 7,155,000 | $ 6,286,000 | ||||||||
Affiliated receivables | 13,071,000 | 13,071,000 | $ 32,480,000 | |||||||||
General and administrative expenses from transactions with related parties | 13,899,000 | 10,366,000 | 41,765,000 | 26,926,000 | ||||||||
Affiliated payables | 51,396,000 | 51,396,000 | $ 30,725,000 | |||||||||
Affiliated entity | Bedrock lease agreements | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Expenses from transaction with related parties | $ 17,975,000 | $ 16,910,000 | $ 51,932,000 | $ 51,685,000 | ||||||||
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 | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | Jan. 06, 2017 | |
Related Party Transaction [Line Items] | |||
Notes receivable and due from affiliates | $ 13,071 | $ 89,937 | |
Notes payable and due to affiliates | 72,896 | 62,225 | |
Affiliated entity | |||
Related Party Transaction [Line Items] | |||
Notes receivable and due from affiliates | 13,071 | 89,937 | |
Notes payable and due to affiliates | 72,896 | 62,225 | |
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 | 0 | $ 10,000 | |
Interest rate (percent) | 5.00% | ||
Affiliated entity | RHI/ATI Debenture | |||
Related Party Transaction [Line Items] | |||
RHI/ATI Debenture | $ 21,500 | $ 21,500 | |
Interest rate (percent) | 8.00% | 8.00% | |
Affiliated entity | Services, products and other transactions | |||
Related Party Transaction [Line Items] | |||
Affiliated receivables and other notes | $ 13,071 | $ 32,480 | |
Affiliated payables | $ 51,396 | $ 30,725 |
Other Assets (Details)
Other Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Mortgage production related receivables | $ 191,910 | $ 157,288 |
Margin call receivable from counterparty | 185,664 | 3,697 |
Prepaid expenses | 93,601 | 62,229 |
Disbursement funds advanced | 80,794 | 56,721 |
Ginnie Mae buyouts | 48,657 | 78,174 |
Non-production-related receivables | 41,008 | 37,416 |
Goodwill and other intangible assets | 36,013 | 40,261 |
Other real estate owned | 984 | 1,619 |
Other | 58,171 | 64,182 |
Other assets | $ 736,802 | $ 501,587 |
Income Taxes - Components of In
Income Taxes - Components of Income Tax Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Total income before income taxes and non-controlling interest | $ 3,057,066 | $ 499,747 | $ 6,642,875 | $ 147,255 |
Total provision for income taxes | $ 61,683 | $ 5,117 | $ 84,363 | $ 4,291 |
Effective tax provision rate | 2.02% | 1.02% | 1.27% | 2.91% |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 1 Months Ended | 9 Months Ended | |
Sep. 09, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |||
Deferred tax asset before valuation allowance | $ 561,684,000 | ||
Deferred tax liability | 4,520,000 | ||
Tax valuation allowance | 19,258,000 | ||
Interest or penalties expense | $ 0 | ||
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% | ||
Holdings units acquired | 115,000,000 | 115,000,000 | |
Value of Holdings units acquired | $ 2,070,000,000 | ||
Tax receivable agreement liability | 558,142,000 | $ 0 | |
Payments pursuant to tax receivable agreement | $ 0 |
Derivative Financial Instrume_3
Derivative Financial Instruments - Net Hedging Losses and Gains (Details) - Forward commitments - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Hedging (losses) | $ (776,086) | $ (2,283,874) | ||
Hedging gains | $ 164,370 | $ 129,917 |
Derivative Financial Instrume_4
Derivative Financial Instruments - Notional and Fair Values (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Derivative [Line Items] | ||
Derivative liability | $ 238,004 | $ 43,794 |
IRLCs | ||
Derivative [Line Items] | ||
Derivative asset | 2,590,319 | 508,135 |
Derivative liability | 0 | 0 |
Forward commitments | ||
Derivative [Line Items] | ||
Derivative asset | 12,149 | 3,838 |
Derivative liability | 238,004 | 43,794 |
Not Designated | IRLCs | ||
Derivative [Line Items] | ||
Notional value | 51,798,693 | 15,439,960 |
Not Designated | Forward commitments | ||
Derivative [Line Items] | ||
Notional value | $ 67,901,171 | $ 26,637,275 |
Derivative Financial Instrume_5
Derivative Financial Instruments - Narrative (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Cash pledged to counterparties | $ 185,664 | $ 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 | Sep. 30, 2020 | Dec. 31, 2019 |
Offsetting Assets [Line Items] | ||
Gross Amount of Recognized Assets | $ 15,024 | $ 6,690 |
Gross Amounts Offset in the Condensed Consolidated Balance Sheets | (2,875) | (2,852) |
Net Assets Presented in the Condensed Consolidated Balance Sheets | 12,149 | 3,838 |
Gross Amount of Recognized Liabilities | (402,455) | (89,389) |
Gross Amounts Offset in the Condensed Consolidated Balance Sheets | 164,451 | 45,595 |
Net Liabilities Presented in the Condensed Consolidated Balance Sheets | $ (238,004) | $ (43,794) |
Commitments, Contingencies, a_3
Commitments, Contingencies, and Guarantees - Narrative (Details) | Sep. 30, 2020USD ($)guaranteelawsuit | Dec. 31, 2019USD ($)guarantee | Mar. 14, 2018USD ($) | Sep. 30, 2020USD ($)guaranteelawsuit | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)guaranteelawsuit | Sep. 30, 2019USD ($) |
Other Commitments [Line Items] | |||||||
Escrow payable for property taxes and insurance | $ 4,994,806,000 | $ 2,617,016,000 | $ 4,994,806,000 | $ 4,994,806,000 | |||
Escrow payable for principal and interest | 11,907,006,000 | 6,726,793,000 | 11,907,006,000 | 11,907,006,000 | |||
Other expenses | 176,036,000 | $ 102,551,000 | $ 452,709,000 | $ 208,409,000 | |||
Percentage of applicable tax savings payable per tax receivable agreement | 90.00% | ||||||
Tax receivable agreement liability | 558,142,000 | 0 | 558,142,000 | $ 558,142,000 | |||
Payments pursuant to tax receivable agreement | 0 | ||||||
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 | $ 15,000,000 | |||
Number of separate guarantees | guarantee | 3 | 3 | 3 | 3 | |||
Guarantee One | Financial Guarantee | |||||||
Other Commitments [Line Items] | |||||||
Guaranteed debt total amount | $ 5,000,000 | $ 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 | 5,000,000 | |||
Guarantee Three | Financial Guarantee | |||||||
Other Commitments [Line Items] | |||||||
Guaranteed debt total amount | $ 5,000,000 | $ 5,000,000 | $ 5,000,000 | $ 5,000,000 | |||
TCPA class action lawsuits | |||||||
Other Commitments [Line Items] | |||||||
Number of lawsuits | lawsuit | 5 | 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 | $ 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 | 15,000,000 | ||||
Trademark license | |||||||
Other Commitments [Line Items] | |||||||
Other expenses | 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 | 43 days | 44 days | |||||
Mortgages | |||||||
Other Commitments [Line Items] | |||||||
Commitments to sell loans | $ 4,686,875,000 | $ 2,859,710,000 | 4,686,875,000 | 4,686,875,000 | |||
MSRs with Servicing Released | |||||||
Other Commitments [Line Items] | |||||||
Commitments to sell loans | $ 15,313,000 | $ 78,446,000 | $ 15,313,000 | $ 15,313,000 |
Commitments, Contingencies, a_4
Commitments, Contingencies, and Guarantees - Interest Rate Lock Commitments (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Commitments and Contingencies Disclosure [Abstract] | ||
IRLCs UPB, Fixed Rate | $ 69,607,563 | $ 20,577,282 |
IRLCs UPB, Variable Rate | $ 1,502,059 | $ 974,693 |
Commitments, Contingencies, a_5
Commitments, Contingencies, and Guarantees - Investor Reserves Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Investor Reserve [Roll Forward] | ||||
Balance at beginning of period | $ 63,012 | $ 55,242 | $ 54,387 | $ 56,943 |
(Benefit from) provision for investor reserves | (3,665) | (1,415) | 5,698 | (2,067) |
Premium recapture and indemnification losses paid | (2,329) | (203) | (3,067) | (1,252) |
Balance at end of period | $ 57,018 | $ 53,624 | $ 57,018 | $ 53,624 |
Minimum Net Worth Requirements
Minimum Net Worth Requirements (Details) - USD ($) | Sep. 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 | $ 2,197,418,000 | $ 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 | 9 Months Ended | ||
Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)segment | Sep. 30, 2019USD ($) | |
Segment Reporting [Abstract] | ||||
Number of reportable segments | segment | 2 | |||
Segment Reporting Information [Line Items] | ||||
Gain on sale | $ 4,280,442 | $ 1,560,236 | $ 10,856,135 | $ 3,399,941 |
Interest income | 79,890 | 63,649 | 231,971 | 172,286 |
Interest expense on funding facilities | (69,364) | (34,423) | (162,580) | (90,466) |
Servicing fee income | 272,158 | 236,229 | 779,093 | 701,090 |
Change in fair value of MSRs | (374,765) | (390,619) | (1,918,860) | (1,464,582) |
Other income | 445,757 | 185,353 | 1,250,481 | 470,931 |
Total revenue, net | 4,634,118 | 1,620,425 | 11,036,240 | 3,189,200 |
Plus: Decrease in MSRs due to valuation assumptions | 109,054 | 180,428 | 1,126,757 | 892,755 |
Adjusted revenue | 4,743,172 | 1,800,853 | 12,162,997 | 4,081,955 |
Directly attributable expenses | 1,202,828 | 854,666 | 3,332,445 | 2,197,633 |
Contribution margin | 3,540,344 | 946,187 | 8,830,552 | 1,884,322 |
Reportable Segments | ||||
Segment Reporting Information [Line Items] | ||||
Gain on sale | 4,279,766 | 1,546,846 | 10,849,199 | 3,362,372 |
Interest income | 79,455 | 62,149 | 229,725 | 169,357 |
Interest expense on funding facilities | (69,364) | (33,910) | (162,169) | (89,117) |
Servicing fee income | 271,254 | 235,158 | 776,117 | 698,503 |
Change in fair value of MSRs | (374,765) | (390,619) | (1,918,860) | (1,464,582) |
Other income | 285,713 | 129,678 | 696,743 | 314,978 |
Total revenue, net | 4,472,059 | 1,549,302 | 10,470,755 | 2,991,511 |
Plus: Decrease in MSRs due to valuation assumptions | 109,054 | 180,428 | 1,126,757 | 892,755 |
Adjusted revenue | 4,581,113 | 1,729,730 | 11,597,512 | 3,884,266 |
Directly attributable expenses | 1,089,364 | 791,492 | 3,050,066 | 2,044,086 |
Contribution margin | 3,491,749 | 938,238 | 8,547,446 | 1,840,180 |
Reportable Segments | Direct to Consumer | ||||
Segment Reporting Information [Line Items] | ||||
Gain on sale | 3,128,695 | 1,373,685 | 8,759,914 | 3,037,166 |
Interest income | 53,764 | 37,749 | 152,087 | 111,080 |
Interest expense on funding facilities | (46,936) | (20,597) | (107,718) | (58,404) |
Servicing fee income | 271,254 | 235,158 | 776,117 | 698,503 |
Change in fair value of MSRs | (374,765) | (390,619) | (1,918,860) | (1,464,582) |
Other income | 237,855 | 123,556 | 589,415 | 299,022 |
Total revenue, net | 3,269,867 | 1,358,932 | 8,250,955 | 2,622,785 |
Plus: Decrease in MSRs due to valuation assumptions | 109,054 | 180,428 | 1,126,757 | 892,755 |
Adjusted revenue | 3,378,921 | 1,539,360 | 9,377,712 | 3,515,540 |
Directly attributable expenses | 948,150 | 716,923 | 2,677,729 | 1,867,398 |
Contribution margin | 2,430,771 | 822,437 | 6,699,983 | 1,648,142 |
Reportable Segments | Partner Network | ||||
Segment Reporting Information [Line Items] | ||||
Gain on sale | 1,151,071 | 173,161 | 2,089,285 | 325,206 |
Interest income | 25,691 | 24,400 | 77,638 | 58,277 |
Interest expense on funding facilities | (22,428) | (13,313) | (54,451) | (30,713) |
Servicing fee income | 0 | 0 | 0 | 0 |
Change in fair value of MSRs | 0 | 0 | 0 | 0 |
Other income | 47,858 | 6,122 | 107,328 | 15,956 |
Total revenue, net | 1,202,192 | 190,370 | 2,219,800 | 368,726 |
Plus: Decrease in MSRs due to valuation assumptions | 0 | 0 | 0 | 0 |
Adjusted revenue | 1,202,192 | 190,370 | 2,219,800 | 368,726 |
Directly attributable expenses | 141,214 | 74,569 | 372,337 | 176,688 |
Contribution margin | 1,060,978 | 115,801 | 1,847,463 | 192,038 |
All Other | ||||
Segment Reporting Information [Line Items] | ||||
Gain on sale | 676 | 13,390 | 6,936 | 37,569 |
Interest income | 435 | 1,500 | 2,246 | 2,929 |
Interest expense on funding facilities | 0 | (513) | (411) | (1,349) |
Servicing fee income | 904 | 1,071 | 2,976 | 2,587 |
Change in fair value of MSRs | 0 | 0 | 0 | 0 |
Other income | 160,044 | 55,675 | 553,738 | 155,953 |
Total revenue, net | 162,059 | 71,123 | 565,485 | 197,689 |
Plus: Decrease in MSRs due to valuation assumptions | 0 | 0 | 0 | 0 |
Adjusted revenue | 162,059 | 71,123 | 565,485 | 197,689 |
Directly attributable expenses | 113,464 | 63,174 | 282,379 | 153,547 |
Contribution margin | $ 48,595 | $ 7,949 | $ 283,106 | $ 44,142 |
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 | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Segment reporting reconciliation [Line Items] | ||||
Contribution margin, excluding change in MSRs due to valuation assumptions | $ 3,540,344 | $ 946,187 | $ 8,830,552 | $ 1,884,322 |
Decrease in MSRs due to valuation assumptions | (109,054) | (180,428) | (1,126,757) | (892,755) |
Contribution margin, including change in MSRs due to valuation assumptions | 3,431,290 | 765,759 | 7,703,795 | 991,567 |
Salaries, commissions and team member benefits | 816,408 | 564,332 | 2,354,021 | 1,509,180 |
General and administrative expenses | 280,705 | 159,058 | 763,962 | 490,998 |
Depreciation and amortization | 15,329 | 21,382 | 47,633 | 57,174 |
Interest and amortization expense on non-funding debt | 38,016 | 33,052 | 104,291 | 99,220 |
Other expenses | 176,036 | 102,551 | 452,709 | 208,409 |
Income before income taxes | 3,057,066 | 499,747 | 6,642,875 | 147,255 |
Expenses not allocated to segments | ||||
Segment reporting reconciliation [Line Items] | ||||
Salaries, commissions and team member benefits | 198,482 | 129,732 | 602,832 | 422,141 |
General and administrative expenses | 122,137 | 74,597 | 310,711 | 258,258 |
Depreciation and amortization | 15,329 | 21,382 | 47,633 | 57,174 |
Interest and amortization expense on non-funding debt | 38,016 | 33,052 | 104,291 | 99,220 |
Other expenses | $ 260 | $ 7,249 | $ (4,547) | $ 7,519 |
Variable Interest Entities (Det
Variable Interest Entities (Details) | Aug. 10, 2020 |
Holdings | |
Variable Interest Entity [Line Items] | |
Management and voting interest as managing member in Holdings (percent) | 100.00% |
Non-controlling Interests (Deta
Non-controlling Interests (Details) - Holdings | Sep. 30, 2020shares |
Noncontrolling Interest [Line Items] | |
Holdings Units | 1,984,452,048 |
Ownership Percentage | 100.00% |
Rocket Companies Inc. | |
Noncontrolling Interest [Line Items] | |
Holdings Units | 115,372,565 |
Ownership Percentage | 5.81% |
Chairman | |
Noncontrolling Interest [Line Items] | |
Holdings Units | 1,101,822 |
Ownership Percentage | 0.06% |
RHI | |
Noncontrolling Interest [Line Items] | |
Holdings Units | 1,867,977,661 |
Ownership Percentage | 94.13% |
Stock-based Compensation - RKT
Stock-based Compensation - RKT Awards Narrative (Details) - 2020 Plan $ / shares in Units, $ in Thousands | 3 Months Ended |
Sep. 30, 2020USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Common stock reserved for equity-based awards | shares | 94,736,842 |
Share-based compensation expense | $ 25,210 |
Stock options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Award vesting period | 3 years |
Award expiration period | 10 years |
Black-Scholes option pricing model, expected dividend yield (percent) | 1.50% |
Black-Scholes option pricing model, volatility factor (percent) | 34.00% |
Black-Scholes option pricing model, risk-free interest rate (percent) | 0.29% |
Black-Scholes option pricing model, expected term | 5 years 10 months 6 days |
Weighted-average fair value (in dollars per share) | $ / shares | $ 18 |
Unrecognized compensation expense | $ 120,749 |
Period for expected expense recognition | 2 years 9 months 18 days |
Stock options | One third of options vest on first anniversary | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting rights (percent) | 33.33% |
Stock options | Period after first anniversary for option vesting ratably on monthly basis | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Award vesting period | 24 months |
Vesting rights (percent) | 66.67% |
RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting rights (percent) | 33.00% |
Unrecognized compensation expense | $ 278,741 |
Period for expected expense recognition | 2 years 4 months 24 days |
Grant date fair value (in dollars per share) | $ / shares | $ 18 |
RSUs | Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Award vesting period | 2 years |
RSUs | Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Award vesting period | 3 years |
Stock-based Compensation - Stoc
Stock-based Compensation - Stock Option Activity (Details) - 2020 Plan $ / shares in Units, $ in Thousands | 3 Months Ended |
Sep. 30, 2020USD ($)$ / sharesshares | |
Number of Stock Options | |
Outstanding, beginning balance (in shares) | shares | 0 |
Granted (in shares) | shares | 26,351,287 |
Exercised (in shares) | shares | 0 |
Expired (in shares) | shares | 0 |
Forfeited (in shares) | shares | 197,635 |
Outstanding, ending balance (in shares) | shares | 26,153,652 |
Exercisable (in shares) | shares | 0 |
Weighted Average Exercise Price | |
Outstanding, beginning balance (in dollars per share) | $ / shares | $ 0 |
Granted (in dollars per share) | $ / shares | 18 |
Exercised (in dollars per share) | $ / shares | 0 |
Expired (in dollars per share) | $ / shares | 0 |
Forfeited (in dollars per share) | $ / shares | 18 |
Outstanding, ending balance (in dollars per share) | $ / shares | 18 |
Exercisable (in dollars per share) | $ / shares | $ 0 |
Weighted Average Remaining Contractual Term | |
Granted (years) | 2 years 9 months 18 days |
Forfeited (years) | 2 years 9 months 18 days |
Outstanding (years) | 2 years 9 months 18 days |
Aggregate Intrinsic Value | |
Outstanding, beginning balance | $ | $ 0 |
Granted | $ | 50,858 |
Exercised | $ | 0 |
Expired | $ | 0 |
Forfeited | $ | 381 |
Outstanding, ending balance | $ | 50,477 |
Exercisable | $ | $ 0 |
Stock-based Compensation - RSU
Stock-based Compensation - RSU Activity (Details) - 2020 Plan - RSUs | 3 Months Ended |
Sep. 30, 2020$ / sharesshares | |
Number of Units | |
Outstanding, beginning balance (in units) | shares | 0 |
Granted (in units) | shares | 16,718,938 |
Vested (in units) | shares | 0 |
Forfeited (in units) | shares | 200,546 |
Outstanding, ending balance (in units) | shares | 16,518,392 |
Weighted Average Grant Date Fair Value | |
Outstanding, beginning balance (in dollars per share) | $ / shares | $ 0 |
Granted (in dollars per share) | $ / shares | 18 |
Vested (in dollars per share) | $ / shares | 0 |
Forfeited (in dollars per share) | $ / shares | 18 |
Outstanding, ending balance (in dollars per share) | $ / shares | $ 18 |
Weighted Average Remaining Contractual Term | |
Granted (years) | 2 years 4 months 24 days |
Forfeited (years) | 2 years 4 months 24 days |
Outstanding (years) | 2 years 4 months 24 days |
Stock-based Compensation - RHI
Stock-based Compensation - RHI Denominated Awards Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2017 | Dec. 31, 2016 | |
RHI Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based compensation expense | $ 94,776 | $ 33,526 | |||||
Remaining compensation expense | $ 16,006 | ||||||
RHI Plan | RSUs | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Granted (in units) | 125,000 | 1,076,433 | |||||
Award vesting period | 4 years | ||||||
Unvested awards outstanding | 80,000 | 555,060 | |||||
Share-based compensation expense | $ 68,177 | $ 24,903 | |||||
Accelerated expense | $ 38,371 | $ 29,433 | |||||
Number of RSUs modified and accelerated | 198,020 | 180,020 | |||||
RHI Plan | RSUs | Vesting immediately upon issuance | Minimum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting rights (percent) | 20.00% | ||||||
RHI Plan | RSUs | Vesting immediately upon issuance | Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting rights (percent) | 25.00% | ||||||
RHI Plan | Cash-settled awards | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based compensation expense | $ 26,421 | $ 8,103 | |||||
RHI Plan | Stock options | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting period | 4 years | ||||||
Award expiration period | 10 years | ||||||
Unvested options outstanding | 0 | 9,640 | |||||
Share-based compensation expense | $ 32 | $ 321 | |||||
Holdings subsidiary stock compensation plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based compensation expense | $ 146 | $ 199 |
Earnings Per Share - Calculatio
Earnings Per Share - Calculation of Basic and Diluted Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Earnings Per Share [Abstract] | ||||||||
Net income (loss) | $ 2,995,383 | $ 3,464,082 | $ 99,046 | $ 494,630 | $ (52,897) | $ (298,769) | $ 6,558,512 | $ 142,964 |
Net income attributable to non-controlling interest | 2,937,480 | 494,630 | 6,500,609 | 142,964 | ||||
Net income attributable to Rocket Companies | 57,903 | $ 0 | 57,903 | $ 0 | ||||
Numerator: | ||||||||
Net income attributable to Class A common shareholders | 57,903 | 57,903 | ||||||
Net income attributable to Class A common shareholders - diluted | $ 57,903 | $ 57,903 | ||||||
Denominator: | ||||||||
Weighted average shares of Class A common stock outstanding - basic | 106,265,422 | 106,265,422 | ||||||
Weighted average shares of Class A common stock outstanding - diluted | 106,265,422 | 106,265,422 | ||||||
Earnings per share of Class A common stock outstanding - basic (in dollars per share) | $ 0.54 | $ 0.54 | ||||||
Earnings per share of Class A common stock outstanding - diluted (in dollars per share) | $ 0.54 | $ 0.54 |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) | 3 Months Ended |
Sep. 30, 2020shares | |
Holdings Units and corresponding Class D common stock | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Antidilutive securities excluded from computation of diluted EPS | 1,878,058,054 |
RSUs | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Antidilutive securities excluded from computation of diluted EPS | 16,601,433 |
Stock options | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Antidilutive securities excluded from computation of diluted EPS | 26,235,912 |