Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 02, 2022 | |
Entity Listings [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-39432 | |
Entity Registrant Name | Rocket Companies, Inc. | |
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 $0.00001 per share | |
Trading Symbol | RKT | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001805284 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Class A common stock | ||
Entity Listings [Line Items] | ||
Entity Common Stock, Shares Outstanding | 121,778,560 | |
Class D common stock | ||
Entity Listings [Line Items] | ||
Entity Common Stock, Shares Outstanding | 1,848,879,483 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Assets | ||
Cash and cash equivalents | $ 825,926 | $ 2,131,174 |
Restricted cash | 65,718 | 80,423 |
Mortgage loans held for sale, at fair value | 9,123,110 | 19,323,568 |
Mortgage servicing rights (“MSRs”), at fair value | 7,260,066 | 5,385,613 |
Notes receivable and due from affiliates | 11,179 | 9,753 |
Property and equipment, net of accumulated depreciation and amortization of $616,332 and $567,406, respectively | 274,480 | 254,376 |
Deferred tax asset, net | 513,515 | 572,049 |
Lease right of use assets | 381,232 | 427,895 |
Loans subject to repurchase right from Ginnie Mae | 1,471,823 | 1,918,032 |
Other assets | 1,975,414 | 2,115,814 |
Total assets | 22,600,602 | 32,774,895 |
Liabilities | ||
Funding facilities | 4,909,369 | 12,751,592 |
Other financing facilities and debt | ||
Lines of credit | 0 | 75,000 |
Senior Notes, net | 4,026,600 | 4,022,491 |
Early buy out facility | 814,458 | 1,896,784 |
Accounts payable | 203,832 | 271,544 |
Lease liabilities | 439,171 | 482,184 |
Forward commitments, at fair value | 84,699 | 19,911 |
Investor reserves | 106,217 | 78,888 |
Notes payable and due to affiliates | 30,465 | 33,650 |
Tax receivable agreement liability | 623,498 | 688,573 |
Loans subject to repurchase right from Ginnie Mae | 1,471,823 | 1,918,032 |
Other liabilities | 979,210 | 776,714 |
Total liabilities | 13,689,342 | 23,015,363 |
Equity | ||
Additional paid-in capital | 242,074 | 287,558 |
Retained earnings | 316,381 | 378,005 |
Accumulated other comprehensive income | 58 | 81 |
Non-controlling interest | 8,352,727 | 9,093,868 |
Total equity | 8,911,260 | 9,759,532 |
Total liabilities and equity | 22,600,602 | 32,774,895 |
Class A common stock | ||
Equity | ||
Common stock | 1 | 1 |
Class B common stock | ||
Equity | ||
Common stock | 0 | 0 |
Class C common stock | ||
Equity | ||
Common stock | 0 | 0 |
Class D common stock | ||
Equity | ||
Common stock | 19 | 19 |
IRLCs | ||
Assets | ||
Derivatives, at fair value | 7,743 | 538,861 |
Forward commitments | ||
Assets | ||
Derivatives, at fair value | $ 690,396 | $ 17,337 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Property and equipment, accumulated depreciation and amortization | $ 616,332 | $ 567,406 |
Class A common stock | ||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock authorized (in shares) | 10,000,000,000 | 10,000,000,000 |
Common stock issued (in shares) | 121,386,911 | 126,437,703 |
Common stock outstanding (in shares) | 121,386,911 | 126,437,703 |
Class B common stock | ||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock authorized (in shares) | 6,000,000,000 | 6,000,000,000 |
Common stock issued (in shares) | 0 | 0 |
Common stock outstanding (in shares) | 0 | 0 |
Class C common stock | ||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock authorized (in shares) | 6,000,000,000 | 6,000,000,000 |
Common stock issued (in shares) | 0 | 0 |
Common stock outstanding (in shares) | 0 | 0 |
Class D common stock | ||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock authorized (in shares) | 6,000,000,000 | 6,000,000,000 |
Common stock issued (in shares) | 1,848,879,483 | 1,848,879,483 |
Common stock outstanding (in shares) | 1,848,879,483 | 1,848,879,483 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income and Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Gain on sale of loans | ||||
Gain on sale of loans excluding fair value of MSRs, net | $ 139,733 | $ 1,746,971 | $ 1,174,268 | $ 5,610,627 |
Fair value of originated MSRs | 426,278 | 907,242 | 1,682,366 | 2,937,517 |
Gain on sale of loans, net | 566,011 | 2,654,213 | 2,856,634 | 8,548,144 |
Loan servicing income (loss) | ||||
Servicing fee income | 364,211 | 334,348 | 1,088,004 | 970,058 |
Change in fair value of MSRs | 150,304 | (341,361) | 592,162 | (556,201) |
Loan servicing income (loss) | 514,515 | (7,013) | 1,680,166 | 413,857 |
Interest income | ||||
Interest income | 95,753 | 129,963 | 265,490 | 311,853 |
Interest expense on funding facilities | (46,173) | (72,778) | (130,576) | (205,000) |
Interest income, net | 49,580 | 57,185 | 134,914 | 106,853 |
Other income | 164,580 | 410,345 | 685,987 | 1,252,845 |
Total revenue, net | 1,294,686 | 3,114,730 | 5,357,701 | 10,321,699 |
Expenses | ||||
Salaries, commissions and team member benefits | 670,804 | 870,010 | 2,278,844 | 2,552,679 |
General and administrative expenses | 204,290 | 313,405 | 709,853 | 867,639 |
Marketing and advertising expenses | 210,701 | 316,471 | 770,281 | 943,999 |
Depreciation and amortization | 24,211 | 19,577 | 70,033 | 55,470 |
Interest and amortization expense on non-funding debt | 38,317 | 34,163 | 115,263 | 104,772 |
Other expenses | 40,008 | 135,415 | 166,098 | 467,584 |
Total expenses | 1,188,331 | 1,689,041 | 4,110,372 | 4,992,143 |
Income before income taxes | 106,355 | 1,425,689 | 1,247,329 | 5,329,556 |
Provision for income taxes | (10,131) | (32,830) | (54,741) | (122,709) |
Net income | 96,224 | 1,392,859 | 1,192,588 | 5,206,847 |
Net income attributable to non-controlling interest | (89,314) | (1,317,522) | (1,128,551) | (4,946,688) |
Net income attributable to Rocket Companies | $ 6,910 | $ 75,337 | $ 64,037 | $ 260,159 |
Earnings per share of Class A common stock | ||||
Basic (in dollars per share) | $ 0.06 | $ 0.55 | $ 0.53 | $ 2 |
Diluted (in dollars per share) | $ 0.04 | $ 0.54 | $ 0.47 | $ 2 |
Weighted average shares outstanding | ||||
Basic (in shares) | 119,020,520 | 137,664,471 | 120,156,494 | 129,902,253 |
Diluted (in shares) | 1,970,665,767 | 1,990,828,351 | 1,972,263,268 | 135,392,670 |
Comprehensive income | ||||
Net income | $ 96,224 | $ 1,392,859 | $ 1,192,588 | $ 5,206,847 |
Cumulative translation adjustment | (990) | (995) | (1,081) | (194) |
Unrealized gain (loss) on investment securities | 2,270 | (3,639) | 516 | (3,475) |
Comprehensive income | 97,504 | 1,388,225 | 1,192,023 | 5,203,178 |
Comprehensive income attributable to non-controlling interest | (90,513) | (1,313,201) | (1,128,016) | (4,943,273) |
Comprehensive income attributable to Rocket Companies | $ 6,991 | $ 75,024 | $ 64,007 | $ 259,905 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Equity - USD ($) $ in Thousands | Total | Common Stock Class A common stock | Common Stock Class D common stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total Non-controlling Interest |
Beginning Balance (in shares) at Dec. 31, 2020 | 115,372,565 | 1,869,079,483 | |||||
Beginning Balance at Dec. 31, 2020 | $ 7,882,156 | $ 1 | $ 19 | $ 282,743 | $ 207,422 | $ 317 | $ 7,391,654 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 2,777,338 | 123,702 | 2,653,636 | ||||
Cumulative translation adjustment | 307 | 14 | 293 | ||||
Unrealized loss on investment securities | (364) | (21) | (343) | ||||
Share-based compensation, net (in shares) | 2,300 | ||||||
Share-based compensation, net | 39,149 | 2,116 | 37,033 | ||||
Distributions for state taxes on behalf of unit holders (members), net | (4,840) | (281) | (4,559) | ||||
Distributions to unit holders (members) from subsidiary investment, net | (2,242,999) | (2,242,999) | |||||
Special Dividend to Class A Shareholders | (145,903) | (145,903) | |||||
Change in controlling interest of investment, net (in shares) | 20,200,000 | (20,200,000) | |||||
Change in controlling interest of investment, net | 985 | 85,351 | (1) | 55 | (84,420) | ||
Ending Balance (in shares) at Mar. 31, 2021 | 135,574,865 | 1,848,879,483 | |||||
Ending Balance at Mar. 31, 2021 | 8,305,829 | $ 1 | $ 19 | 370,210 | 184,939 | 365 | 7,750,295 |
Beginning Balance (in shares) at Dec. 31, 2020 | 115,372,565 | 1,869,079,483 | |||||
Beginning Balance at Dec. 31, 2020 | 7,882,156 | $ 1 | $ 19 | 282,743 | 207,422 | 317 | 7,391,654 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 5,206,847 | ||||||
Cumulative translation adjustment | (194) | ||||||
Unrealized loss on investment securities | (3,475) | ||||||
Ending Balance (in shares) at Sep. 30, 2021 | 137,367,428 | 1,848,879,483 | |||||
Ending Balance at Sep. 30, 2021 | 9,185,812 | $ 1 | $ 19 | 367,860 | 336,594 | 124 | 8,481,214 |
Beginning Balance (in shares) at Mar. 31, 2021 | 135,574,865 | 1,848,879,483 | |||||
Beginning Balance at Mar. 31, 2021 | 8,305,829 | $ 1 | $ 19 | 370,210 | 184,939 | 365 | 7,750,295 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 1,036,650 | 61,120 | 975,530 | ||||
Cumulative translation adjustment | 494 | 29 | 465 | ||||
Unrealized loss on investment securities | 527 | 36 | 491 | ||||
Share-based compensation, net (in shares) | 4,177 | ||||||
Share-based compensation, net | 38,243 | 2,621 | 35,622 | ||||
Distributions for state taxes on behalf of unit holders (members), net | (19,601) | (1,346) | (18,255) | ||||
Distributions to unit holders (members) from subsidiary investment, net | (1,188,294) | (1,188,294) | |||||
Special Dividend to Class A Shareholders | 322 | 211 | 111 | ||||
Pushdown of dividend equivalent | 0 | 16,427 | (16,427) | ||||
Issuance of Class A common Shares under stock compensation and benefit plans (in shares) | 896,701 | ||||||
Issuance of Class A Common Shares under stock compensation and benefit plans | 19,951 | 1,369 | 18,582 | ||||
Repurchase of Class A common Shares (in shares) | (496,829) | ||||||
Repurchase of Class A common Shares | (8,313) | (8,313) | |||||
Increase in controlling interest of investment, net of income taxes and Tax receivable agreement liability | 0 | (1,971) | 1 | 1,970 | |||
Ending Balance (in shares) at Jun. 30, 2021 | 135,978,914 | 1,848,879,483 | |||||
Ending Balance at Jun. 30, 2021 | 8,185,808 | $ 1 | $ 19 | 363,916 | 261,351 | 431 | 7,560,090 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 1,392,859 | 75,337 | 1,317,522 | ||||
Cumulative translation adjustment | (995) | (59) | (936) | ||||
Unrealized loss on investment securities | (3,639) | (253) | (3,386) | ||||
Share-based compensation, net (in shares) | 2,508,497 | ||||||
Share-based compensation, net | 38,310 | 2,654 | 35,656 | ||||
Distributions for state taxes on behalf of unit holders (members), net | (1,712) | (118) | (1,594) | ||||
Distributions to unit holders (members) from subsidiary investment, net | (393,463) | (393,463) | |||||
Dividend adjustments from forfeited restricted stock units | 336 | 24 | 312 | ||||
Taxes withheld on employees' restricted share award vesting | (12,583) | (877) | (11,706) | ||||
Issuance of Class A common Shares under stock compensation and benefit plans (in shares) | 947,358 | ||||||
Issuance of Class A Common Shares under stock compensation and benefit plans | 16,463 | 1,135 | 15,328 | ||||
Repurchase of Class A common Shares (in shares) | (2,067,341) | ||||||
Repurchase of Class A common Shares | (35,572) | (35,572) | |||||
Change in controlling interest of investment, net | 0 | 36,604 | 5 | (36,609) | |||
Ending Balance (in shares) at Sep. 30, 2021 | 137,367,428 | 1,848,879,483 | |||||
Ending Balance at Sep. 30, 2021 | 9,185,812 | $ 1 | $ 19 | 367,860 | 336,594 | 124 | 8,481,214 |
Beginning Balance (in shares) at Dec. 31, 2021 | 126,437,703 | 1,848,879,483 | |||||
Beginning Balance at Dec. 31, 2021 | 9,759,532 | $ 1 | $ 19 | 287,558 | 378,005 | 81 | 9,093,868 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 1,036,608 | 53,712 | 982,896 | ||||
Cumulative translation adjustment | 588 | 31 | 557 | ||||
Unrealized loss on investment securities | (1,495) | (92) | (1,403) | ||||
Share-based compensation, net (in shares) | 186,891 | ||||||
Share-based compensation, net | 53,381 | 3,288 | 50,093 | ||||
Distributions for state taxes on behalf of unit holders (members), net | (35,707) | (2,171) | (33,536) | ||||
Distributions to unit holders (members) from subsidiary investment, net | (1,855,850) | 725 | (1,856,575) | ||||
Special Dividend to Class A Shareholders | (155,582) | (123,752) | (31,830) | ||||
Taxes withheld on employees' restricted share award vesting | (1,297) | (77) | (1,220) | ||||
Issuance of Class A common Shares under stock compensation and benefit plans (in shares) | 1,018,875 | ||||||
Issuance of Class A Common Shares under stock compensation and benefit plans | 13,673 | 930 | 12,743 | ||||
Repurchase of Class A common Shares (in shares) | (8,016,465) | ||||||
Repurchase of Class A common Shares | (100,162) | (100,162) | |||||
Change in controlling interest of investment, net | (12,393) | 49,196 | 2 | (61,591) | |||
Ending Balance (in shares) at Mar. 31, 2022 | 119,627,004 | 1,848,879,483 | |||||
Ending Balance at Mar. 31, 2022 | 8,701,296 | $ 1 | $ 19 | 241,458 | 305,794 | 22 | 8,154,002 |
Beginning Balance (in shares) at Dec. 31, 2021 | 126,437,703 | 1,848,879,483 | |||||
Beginning Balance at Dec. 31, 2021 | 9,759,532 | $ 1 | $ 19 | 287,558 | 378,005 | 81 | 9,093,868 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 1,192,588 | ||||||
Cumulative translation adjustment | (1,081) | ||||||
Unrealized loss on investment securities | 516 | ||||||
Ending Balance (in shares) at Sep. 30, 2022 | 121,386,911 | 1,848,879,483 | |||||
Ending Balance at Sep. 30, 2022 | 8,911,260 | $ 1 | $ 19 | 242,074 | 316,381 | 58 | 8,352,727 |
Beginning Balance (in shares) at Mar. 31, 2022 | 119,627,004 | 1,848,879,483 | |||||
Beginning Balance at Mar. 31, 2022 | 8,701,296 | $ 1 | $ 19 | 241,458 | 305,794 | 22 | 8,154,002 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 59,756 | 3,415 | 56,341 | ||||
Cumulative translation adjustment | (679) | (34) | (645) | ||||
Unrealized loss on investment securities | (259) | (16) | (243) | ||||
Share-based compensation, net (in shares) | 721,224 | ||||||
Share-based compensation, net | 54,685 | 4,089 | 50,596 | ||||
Distributions for state taxes on behalf of unit holders (members), net | (6,454) | (385) | (6,069) | ||||
Special Dividend to Class A Shareholders | 1,329 | 80 | 1,249 | ||||
Taxes withheld on employees' restricted share award vesting | (2,842) | (9) | (2,833) | ||||
Issuance of Class A common Shares under stock compensation and benefit plans (in shares) | 1,456,798 | ||||||
Issuance of Class A Common Shares under stock compensation and benefit plans | 13,679 | 824 | 12,855 | ||||
Repurchase of Class A common Shares (in shares) | (5,471,600) | ||||||
Repurchase of Class A common Shares | (45,280) | (45,280) | |||||
Change in controlling interest of investment, net | (3,028) | 24,620 | 2 | (27,650) | |||
Ending Balance (in shares) at Jun. 30, 2022 | 116,333,426 | 1,848,879,483 | |||||
Ending Balance at Jun. 30, 2022 | 8,772,203 | $ 1 | $ 19 | 225,702 | 308,904 | (26) | 8,237,603 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 96,224 | 6,910 | 89,314 | ||||
Cumulative translation adjustment | (990) | (52) | (938) | ||||
Unrealized loss on investment securities | 2,270 | 133 | 2,137 | ||||
Share-based compensation, net (in shares) | 6,484,334 | ||||||
Share-based compensation, net | 55,265 | 3,341 | 51,924 | ||||
Distributions for state taxes on behalf of unit holders (members), net | 9,298 | 573 | 8,725 | ||||
Contributions from unit holders (members) from subsidiary investment, net | 24,715 | (7) | 24,722 | ||||
Special Dividend to Class A Shareholders | (85) | (6) | (79) | ||||
Taxes withheld on employees' restricted share award vesting | (27,400) | (1,682) | (25,718) | ||||
Issuance of Class A common Shares under stock compensation and benefit plans (in shares) | 1,032,558 | ||||||
Issuance of Class A Common Shares under stock compensation and benefit plans | 8,775 | 516 | 8,259 | ||||
Repurchase of Class A common Shares (in shares) | (2,463,407) | ||||||
Repurchase of Class A common Shares | (20,558) | (20,558) | |||||
Change in controlling interest of investment, net | (8,457) | 34,762 | 3 | (43,222) | |||
Ending Balance (in shares) at Sep. 30, 2022 | 121,386,911 | 1,848,879,483 | |||||
Ending Balance at Sep. 30, 2022 | $ 8,911,260 | $ 1 | $ 19 | $ 242,074 | $ 316,381 | $ 58 | $ 8,352,727 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Operating activities | ||
Net income | $ 1,192,588 | $ 5,206,847 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 70,033 | 55,470 |
Provision for deferred income taxes | 35,768 | 54,817 |
Origination of mortgage servicing rights | (1,682,366) | (2,937,517) |
Change in fair value of MSRs, net | (683,001) | 488,178 |
Gain on sale of loans excluding fair value of MSRs, net | (1,174,268) | (5,610,627) |
Disbursements of mortgage loans held for sale | (115,269,087) | (275,516,411) |
Proceeds from sale of loans held for sale | 126,623,671 | 281,142,607 |
Share-based compensation expense | 168,380 | 123,873 |
Change in assets and liabilities | ||
Due from affiliates | (1,426) | 12,501 |
Other assets | 134,652 | (72,025) |
Accounts payable | (67,712) | 95,328 |
Due to affiliates | (4,442) | (44,541) |
Premium recapture and indemnification losses paid | (10,213) | 772 |
Other liabilities | 272,307 | 337,907 |
Total adjustments | 8,412,296 | (1,869,668) |
Net cash provided by operating activities | 9,604,884 | 3,337,179 |
Investing activities | ||
Proceeds from sale of MSRs | 473,971 | 665,901 |
Net purchase of MSRs | (18,640) | (34,817) |
Decrease (increase) in mortgage loans held for investment | 14,796 | |
Decrease (increase) in mortgage loans held for investment | (25,380) | |
Purchase and other additions of property and equipment, net of disposals | (87,958) | (98,549) |
Net cash provided by investing activities | 382,169 | 507,155 |
Financing activities | ||
Net payments on funding facilities | (7,842,222) | (1,119,542) |
Net payments on lines of credit | (75,000) | (300,000) |
Net (payments) borrowings on early buy out facility | (1,082,326) | |
Net (payments) borrowings on early buy out facility | 1,889,053 | |
Net borrowings on notes payable from unconsolidated affiliates | 1,257 | 537 |
Proceeds from MSRs financing liability | 0 | 21,635 |
Stock issuance | 31,316 | 28,778 |
Share repurchase | (166,000) | (43,885) |
Taxes withheld on employees' restricted share award vesting | (31,539) | (12,583) |
Distributions to other unit holders (members) of Holdings, net | (2,141,411) | (3,982,591) |
Net cash used in financing activities | (11,305,925) | (3,518,598) |
Effects of exchange rate changes on cash and cash equivalents | (1,081) | (194) |
Net (decrease) increase in cash and cash equivalents and restricted cash | (1,319,953) | 325,542 |
Cash and cash equivalents and restricted cash, beginning of period | 2,211,597 | 2,054,103 |
Cash and cash equivalents and restricted cash, end of period | 891,644 | 2,379,645 |
Non-cash activities | ||
Loans transferred to other real estate owned | 1,075 | 1,023 |
Supplemental disclosures | ||
Cash paid for interest on related party borrowings | $ 4,061 | $ 3,330 |
Business, Basis of Presentation
Business, Basis of Presentation and Accounting Policies | 9 Months Ended |
Sep. 30, 2022 | |
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, $0.00001 par value (the “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 FinTech holding company consisting of tech-driven real estate, mortgage and financial services businesses. We are committed to providing an industry-leading client experience powered by our simple, fast and trusted digital solutions. In addition to Rocket Mortgage, one of the nation’s largest mortgage lenders, we have expanded into complementary industries, such as real estate services, personal lending, auto sales, solar, and personal finance. Through these industries, we seek to deliver innovative client solutions leveraging our Rocket platform. Our business operations are organized into the following two segments: (1) Direct to Consumer and (2) Partner Network, refer to Note 11, Segments. Rocket Companies, Inc. is a holding company. Its primary material asset is the equity interest in Holdings which, including through its direct and indirect subsidiaries, conducts a majority of the Company's operations. Holdings is a Michigan limited liability company and wholly owns the following entities, with each entity's subsidiaries identified in parentheses: Rocket Mortgage, LLC, Amrock Holdings, LLC (“Amrock”, "Amrock Title Insurance Company" ("ATI") and "Nexsys Technologies LLC"), 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” and "Rocket Solar"), Rock Central LLC dba Rocket Central ("Rocket Money, Inc."), EFB Holdings Inc. (“Rocket Mortgage Canada”), Lendesk Canada Holdings Inc. ("Lendesk Technologies"), RockTech Canada Inc., and Woodward Capital Management LLC. As used herein, “Rocket Mortgage” refers to either the Rocket Mortgage brand or platform, or the Rocket Mortgage business, as the context allows. Edison Financial ULC, changed its name to "Rocket Mortgage Canada ULC", effective as of July 12, 2022. Basis of Presentation and Consolidation As the sole managing member of Holdings, the Company operates and controls all of the business affairs of Holdings, and through Holdings and its subsidiaries, conducts its business. Holdings is considered a variable interest entity (“VIE”) and we consolidate the financial results of Holdings under the guidance of ASC 810, Consolidation. A portion of our Net income is allocated to Net income attributable to non-controlling interest. For further details, refer below to Variable Interest Entities and Note 12 , Non-controlling Interests. All significant intercompany transactions and accounts between the businesses comprising the Company have been eliminated in the accompanying condensed consolidated financial statements. The Company's derivatives, IRLCs, mortgage loans held for sale, MSRs, and investments are measured at fair value on a recurring basis. Additionally, other assets may be required to be measured at fair value in the consolidated financial statements on a nonrecurring basis. Examples of such measurements are mortgage loans transferred between held for investment and held for sale, certain impaired loans, and other real estate owned. For further details of the Company's transactions refer to Note 2, Fair Value Measurements. All transactions and accounts between RHI and other related parties with 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”). The interim financial information should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC. 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. Certain prior period amounts have been reclassified to conform to the current period financial statement presentation. 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. Rocket Money (formerly known as Truebill) Acquisition On December 23, 2021, we completed the acquisition of Truebill, Inc. (“Rocket Money Acquisition”) for total cash consideration of approximately $1.2 billion. The Rocket Money Acquisition was accounted for as a business combination under ASC 805, Business Combinations. The purchase price allocation was completed in the nine months ended September 30, 2022. As of September 30, 2022 and December 31, 2021, there was approximately $1.1 billion of goodwill recorded in Other assets on our Condensed Consolidated Balance Sheets. For purposes of the annual impairment assessment, goodwill was allocated to two reporting units that are expected to benefit from the synergies of the acquisition, which includes one reporting unit in the Direct to Consumer reportable segment and one reporting unit that is not significant individually or in the aggregate to constitute a reportable segment. As a result, the allocated goodwill remains in the “All Other” category. Goodwill attributable to the Rocket Money Acquisition is not deductible for tax purposes. 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 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, 2022. Share Repurchase Authorization On November 1, 2022, the Company's board of directors approved a share repurchase program effective November 11, 2022. The share repurchase program renews and extends the previously approved share repurchase program and authorizes the Company to repurchase shares of the Company’s common stock in an aggregate value, not to exceed $1 billion, 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 terminating in November 2024. 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. Special Dividends On February 24, 2022, our board of directors authorized and declared a cash dividend (the "2022 Special Dividend") of $1.01 per share to the holders of our Class A common stock. The 2022 Special Dividend was paid on March 22, 2022 to holders of the Class A common stock of record as of the close of business on March 8, 2022. The Company funded the 2022 Special Dividend from cash distributions of approximately $2.0 billion by Holdings to all of its members, including the Company. On February 25, 2021, our board of directors authorized and declared a cash dividend (the "2021 Special Dividend") of $1.11 per share to the holders of our Class A common stock. The 2021 Special Dividend was paid on March 23, 2021 to holders of the Class A common stock of record as of the close of business on March 9, 2021. The Company funded the 2021 Special Dividend from cash distributions of approximately $2.2 billion by Holdings to all of its members, including the Company. Revenue Recognition Gain on sale of loans, net — includes all components related to the origination and sale of mortgage loans, including (1) net gain on sale of loans, which represents the premium we receive in excess of the loan principal amount and certain fees charged by investors upon sale of loans into the secondary market, (2) loan origination fees (credits), points and certain costs, (3) provision for or benefit from investor reserves, (4) the change in fair value of interest rate locks and loans held for sale, (5) the gain or loss on forward commitments hedging loans held for sale and interest rate lock commitments (IRLCs), and (6) the fair value of originated MSRs. An estimate of the Gain on sale of loans, net is recognized at the time an IRLC is issued, net of a pull-through factor. Subsequent changes in the fair value of IRLCs and mortgage loans held for sale are recognized in current period earnings. When the mortgage loan is sold into the secondary market, any difference between the proceeds received and the current fair value of the loan is recognized in current period earnings in Gain on sale of loans, net. Included in Gain on sale of loans, net is the Fair value of originated MSRs, which represents the estimated fair value of MSRs related to loans which we have sold and retained the right to service. Refer to Note 3, Mortgage Servicing Rights for information related to the Total changes in fair value of MSRs. Loan servicing income (loss) — includes income from servicing, sub-servicing and ancillary fees, and is recorded to income as earned, which is upon collection of payments from borrowers. This amount also includes the Change in fair value of MSRs, which is the adjustment for the fair value measurement of the MSR asset as of the respective balance sheet date. Interest income, net — includes interest earned on mortgage loans held for sale and mortgage loans held for investment net of the interest expense paid on our loan funding facilities. Interest income is recorded as earned and interest expense is recorded as incurred. Other income — is derived primarily from closing fees, net appraisal revenue, net title insurance fees and personal finance, real estate network referral fees, contact center revenue, personal loans business, professional service fees, and lead generation revenue. The following revenue streams fall within the scope of ASC Topic 606—Revenue from Contracts with Customers and are disaggregated hereunder: Amrock closing fees — The Company recognizes closing fees for non-recurring services provided in connection with the origination of the loan. These fees are recognized at the time of loan closing for purchase transactions or at the end of a client's three-day rescission period for refinance transactions, which represents the point in time the loan closing services performance obligation is satisfied. The consideration received for closing services is a fixed fee per loan that varies by state and loan type. Closing fees were $24,534 and $120,381 for the three months ended September 30, 2022 and 2021, respectively and $139,441 and $395,509 for the nine months ended September 30, 2022 and 2021, respectively. Amrock appraisal revenue, net — The Company recognizes appraisal revenue when the appraisal service is completed. The Company may choose to deliver appraisal services directly to its client or subcontract such services to a third-party licensed and/or certified appraiser. In instances where the Company performs the appraisal, revenue is recognized as the gross amount of consideration received at a fixed price per appraisal. The Company is an agent in instances where a third-party appraiser is involved in the delivery of appraisal services and revenue is recognized net of third-party appraisal expenses. Appraisal revenue, net was $14,946 and $23,222 for the three months ended September 30, 2022 and 2021, respectively and $52,262 and $68,792 for the nine months ended September 30, 2022 and 2021, respectively. Rocket Money (formerly known as Truebill) subscription revenue — The Company recognizes subscription revenue ratably over the contract term beginning on the commencement date of each contract. We have determined that subscriptions represent a stand-ready obligation to perform over the subscription term. These performance obligations are satisfied over time as the customer simultaneously receives and consumes the benefits. Contracts are one month to one year in length. Subscription revenues were $32,649 for the three months ended September 30, 2022 and $84,578 for the nine months ended September 30, 2022. Rocket Homes real estate network referral fees — The Company recognizes real estate network referral fee revenue based on arrangements with partner agencies contingent on the closing of a transaction. As this revenue stream is variable, and is contingent on the successful transaction close, the revenue is constrained until the occurrence of the transaction. At this point, the constraint on recognizing revenue is deemed to have been lifted and revenue is recognized for the consideration expected to be received. Real estate network referral fees, net of intercompany eliminations, were $12,647 and $16,068 for the three months ended September 30, 2022 and 2021, respectively and $38,916 and $39,778 for the nine months ended September 30, 2022 and 2021, respectively. Rock Connections and Rocket Auto contact center revenue — The Company recognizes contact center revenue for communication services including client support and sales. Consideration received mainly includes a fixed base fee and/or a variable contingent fee. The fixed base fee is recognized ratably over the period of performance, as the performance obligation is considered to be satisfied equally throughout the service period. The variable contingent fee related to car sales is constrained until the sale of the car is completed. Contact center revenues, net of intercompany eliminations, were $2,349 and $10,847 for the three months ended September 30, 2022 and 2021, respectively and $15,506 and $34,769 for the nine months ended September 30, 2022 and 2021, respectively. Professional service fees — The Company recognizes professional service fee revenue based on the delivery of services (e.g., human resources, technology, training) over the term of a contract. Consideration for the promised services is received through a combination of a fixed fee for the period and incremental fees paid for optional services that are available at an incremental rate determined at the time such services are requested. The Company recognizes the annual fee ratably over the life of the contract, as the performance obligation is satisfied equally over the term of the contract. For the optional services, revenue is only recognized at the time the services are requested and delivered and pricing is agreed upon. Professional service fee revenues were $3,030 and $3,434 for the three months ended September 30, 2022 and 2021, respectively and $9,140 and $10,181 for the nine months ended September 30, 2022 and 2021, respectively. All professional service fee revenues were rendered entirely to related parties. Core Digital Media lead generation revenue — The Company recognizes online consumer acquisition revenue based on successful delivery of marketing leads to a client at a fixed fee per lead. This service is satisfied at the time the lead is delivered, at which time revenue for the service is recognized. Online consumer acquisition revenue, net of intercompany eliminations, were $1,392 and $7,784 for the three months ended September 30, 2022 and 2021, respectively and $8,306 and $22,549 for the nine months ended September 30, 2022 and 2021, respectively. Cash, Cash Equivalents and Restricted Cash The Company considers all highly liquid investments purchased with a maturity of three months or less to be cash equivalents. We maintain our bank accounts with a relatively small number of high-quality financial institutions. Restricted cash as of September 30, 2022 and 2021 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, principal and interest received in collection accounts for purchased assets, and a $25,000 bond. September 30, 2022 2021 Cash and cash equivalents $ 825,926 $ 2,233,667 Restricted cash 65,718 145,978 Total cash, cash equivalents, and restricted cash in the statement of cash flows $ 891,644 $ 2,379,645 Loans subject to repurchase right from Ginnie Mae As the servicer for loans sold to Ginnie Mae, the Company 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. The asset and corresponding liability are recorded at the unpaid principal balance of the loan, which approximates its fair value. Variable Interest Entities Rocket Companies, Inc. is 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. Rocket Companies, Inc.’s financial position, performance and cash flows effectively represent those of Holdings and its subsidiaries as of and for the period ended September 30, 2022. Recently Adopted Accounting Standards There are no recently issued accounting pronouncements adopted for the period. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair value is the price that would be received if an asset were sold or the price that would be paid to transfer a liability in an orderly transaction between willing market participants at the measurement date. Required disclosures include classification of fair value measurements within a three-level hierarchy (Level 1, Level 2, and Level 3). Classification of a fair value measurement within the hierarchy is dependent on the classification and significance of the inputs used to determine the fair value measurement. Observable inputs are those that are observed, implied from, or corroborated with externally available market information. Unobservable inputs represent the Company’s estimates of market participants’ assumptions. Fair value measurements are classified in the following manner: Level 1 —Valuation is based on quoted prices in active markets for identical assets or liabilities at the measurement date. Level 2 —Valuation is based on either observable prices for identical assets or liabilities in inactive markets, observable prices for similar assets or liabilities, or other inputs that are derived directly from, or through correlation to, observable market data at the measurement date. Level 3 —Valuation is based on the Company’s internal models using assumptions at the measurement date that a market participant would use. In determining fair value measurement, the Company uses observable inputs whenever possible. The level of a fair value measurement within the hierarchy is dependent on the lowest level of input that has a significant impact on the measurement as a whole. If quoted market prices are available at the measurement date or are available for similar instruments, such prices are used in the measurements. If observable market data is not available at the measurement date, judgment is required to measure fair value. The following is a description of measurement techniques for items recorded at fair value on a recurring basis. There were no material items recorded at fair value on a nonrecurring basis as of September 30, 2022 or December 31, 2021. 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 and internal models. 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 is determined using an internal 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. MSRs 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, 2022 or the year ended December 31, 2021. Level 1 Level 2 Level 3 Total Balance at September 30, 2022 Assets: Mortgage loans held for sale $ — $ 7,911,451 $ 1,211,659 $ 9,123,110 IRLCs — — 7,743 7,743 MSRs — — 7,260,066 7,260,066 Forward commitments — 690,396 — 690,396 Total assets $ — $ 8,601,847 $ 8,479,468 $ 17,081,315 Liabilities: Forward commitments $ — $ 84,699 $ — $ 84,699 Total liabilities $ — $ 84,699 $ — $ 84,699 Balance at December 31, 2021 Assets: Mortgage loans held for sale $ — $ 17,014,202 $ 2,309,366 $ 19,323,568 IRLCs — — 538,861 538,861 MSRs — — 5,385,613 5,385,613 Forward commitments — 17,337 — 17,337 Total assets $ — $ 17,031,539 $ 8,233,840 $ 25,265,379 Liabilities: Forward commitments $ — $ 19,911 $ — $ 19,911 Total liabilities $ — $ 19,911 $ — $ 19,911 The following tables present the quantitative information about recurring Level 3 fair value financial instruments and the fair value measurements as of: September 30, 2022 December 31, 2021 Unobservable Input Range Weighted Average Range Weighted Average Mortgage loans held for sale Dealer pricing 68% - 97% 95 % 89% - 103% 99 % IRLCs Loan funding probability 0% - 100% 70 % 0% - 100% 78 % MSRs Discount rate 9.0% - 12.0% 9.4 % 9.0% - 12.0% 9.5 % Conditional prepayment rate 6.2% - 8.6% 6.9 % 6.8% - 36.9% 8.7 % 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, 2022 and 2021. Mortgage servicing rights 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, 2022 $ 1,557,784 $ 309,497 Transfers in (1) 197,851 — Transfers out/principal reductions (1) (481,878) — Net transfers and revaluation losses — (301,754) Total losses included in net income (62,098) — Balance at September 30, 2022 $ 1,211,659 $ 7,743 Balance at June 30, 2021 $ 2,579,313 $ 907,978 Transfers in (1) 461,014 — Transfers out/principal reductions (1) (378,302) — Net transfers and revaluation losses — (113,720) Total gains included in net income 2,376 — Balance at September 30, 2021 $ 2,664,401 $ 794,258 Balance at December 31, 2021 $ 2,309,366 $ 538,861 Transfers in (1) 1,020,274 — Transfers out/principal reductions (1) (1,963,939) — Net transfers and revaluation losses — (531,118) Total losses included in net income (154,042) — Balance at September 30, 2022 $ 1,211,659 $ 7,743 Balance at December 31, 2020 $ 579,666 $ 1,897,194 Transfers in (1) 3,244,577 — Transfers out/principal reductions (1) (1,159,712) — Net transfers and revaluation losses — (1,102,936) Total losses included in net income (130) — Balance at September 30, 2021 $ 2,664,401 $ 794,258 (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, 2022 $ 9,123,110 $ 9,518,578 $ (395,468) Balance at December 31, 2021 $ 19,323,568 $ 19,018,552 $ 305,016 (1) Represents the amount of gains (losses) 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, 2022 December 31, 2021 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Senior Notes, due 10/15/2026 $ 1,140,860 $ 945,599 $ 1,139,146 $ 1,151,932 Senior Notes, due 1/15/2028 61,297 51,882 61,197 64,251 Senior Notes, due 3/1/2029 743,564 572,318 742,812 752,805 Senior Notes, due 3/1/2031 1,238,620 912,813 1,237,605 1,273,675 Senior Notes, due 10/15/2033 842,259 581,018 841,731 857,718 Total Senior Notes, net $ 4,026,600 $ 3,063,630 $ 4,022,491 $ 4,100,381 |
Mortgage Servicing Rights
Mortgage Servicing Rights | 9 Months Ended |
Sep. 30, 2022 | |
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 MSRs asset and has elected the fair value option. These MSRs are recorded at fair value, which is determined using an internal 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. 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, 2022 2021 2022 2021 Fair value, beginning of period $ 6,657,758 $ 4,644,172 $ 5,385,613 $ 2,862,685 MSRs originated 426,278 907,242 1,682,366 2,937,517 MSRs sales — (572,218) (474,022) (671,278) MSRs purchases — 38,281 — 38,281 Changes in fair value: Due to changes in valuation model inputs or assumptions (1) 432,211 (16,123) 1,484,039 426,111 Due to collection/realization of cash flows (256,181) (300,309) (817,930) (892,271) Total changes in fair value 176,030 (316,432) 666,109 (466,160) Fair value, end of period $ 7,260,066 $ 4,701,045 $ 7,260,066 $ 4,701,045 (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 or the effects of contractual prepayment protection resulting from sales of MSRs. The total UPB of mortgage loans serviced, excluding subserviced loans, at September 30, 2022 and December 31, 2021 was $495,614,634 and $485,087,214, respectively. The portfolio primarily consists of high-quality performing agency and government (FHA and VA) loans. As of September 30, 2022, delinquent loans (defined as 60-plus days past-due) were 1.11% of our total portfolio. Excluding clients in COVID-19 related forbearance plans, our delinquent loans (defined as 60-plus days past-due) were 0.76% as of September 30, 2022. 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, 2022 December 31, 2021 Discount rate 9.4 % 9.5 % Prepayment speeds 6.9 % 8.7 % Life (in years) 8.10 7.25 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 MSRs value and decreases in the discount rate result in a higher MSRs value. MSRs 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, 2022 Mortgage servicing rights $ (311,872) $ (599,295) $ (247,595) $ (373,794) December 31, 2021 Mortgage servicing rights $ (232,658) $ (435,181) $ (198,153) $ (372,018) |
Mortgage Loans Held for Sale
Mortgage Loans Held for Sale | 9 Months Ended |
Sep. 30, 2022 | |
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 retains the right to service a majority 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 September 30, 2022 2021 Balance at the beginning of period $ 19,323,568 $ 22,865,106 Disbursements of mortgage loans held for sale 115,269,087 275,516,411 Proceeds from sales of mortgage loans held for sale (1) (126,601,866) (281,117,441) Gain on sale of mortgage loans excluding fair value of other financial instruments, net (2) 1,132,321 5,987,860 Balance at the end of period $ 9,123,110 $ 23,251,936 (1) The proceeds from sales of loans held for sale on the Condensed Consolidated Statements of Cash Flows includes amounts related to the sale of consumer loans. (2) The Gain on sale of loans excluding fair value of MSRs, net 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 and losses 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, 2022 is, on average, approximately 44 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, 2022 | |
Debt Disclosure [Abstract] | |
Borrowings | Borrowings The Company maintains various funding facilities and other non-funding debt as shown in the tables below. Interest rates typically have two main components – a base rate most commonly SOFR or LIBOR, which is sometimes subject to a minimum floor plus a spread. Some facilities have a commitment fee, which can range from 0.0% to 0.5% per year. The commitment fee charged by lenders is calculated based on the committed line amount multiplied by a negotiated rate. 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, 2022. The amount owed and outstanding on the Company’s loan funding facilities fluctuates 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 its 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. Buy-down funds are included in Cash and cash equivalents on the Condensed Consolidated Balance Sheets. We have the ability to withdraw these funds at any time, unless a margin call has been made or a default has occurred under the relevant facilities. We will also deploy cash to self-fund loan originations, a portion of which can be transferred to a warehouse line or the early buy out line, provided that such loans meet the eligibility criteria to be placed on such lines. The remaining portion will be funded in normal course over a short period of time, generally less than 45 days. In addition to the $3,156,856 of corporate cash used for discretionary self-funding of loans as of September 30, 2022, we had an additional $825,926 of cash on-hand, for a total of $3,982,782 of available cash. The terms of the Senior Notes restrict our ability and the ability of our subsidiary guarantors among other things to: (1) merge, consolidate or sell, transfer or lease assets, and; (2) create liens on assets. Funding Facilities Facility Type Collateral Maturity Line Amount Committed Line Amount Outstanding Balance as of September 30, 2022 Outstanding Balance as of December 31, 2021 MRA funding: 1) Master Repurchase Agreement (7) Mortgage loans held for sale (6) 10/20/2023 $ 1,000,000 $ 100,000 $ 96,409 $ 249,119 2) Master Repurchase Agreement (7) Mortgage loans held for sale (6) 12/1/2022 1,500,000 250,000 608,858 1,328,727 3) Master Repurchase Agreement (7) Mortgage loans held for sale (6) 8/9/2024 2,000,000 250,000 501,293 1,714,806 4) Master Repurchase Agreement (1)(7) Mortgage loans held for sale (6) 7/26/2023 2,000,000 950,000 1,055,708 1,479,128 5) Master Repurchase Agreement (2)(7) Mortgage loans held for sale (6) 5/4/2024 2,000,000 250,000 371,857 2,264,954 6) Master Repurchase Agreement (3)(7) Mortgage loans held for sale (6) 9/9/2024 1,500,000 250,000 93,964 498,335 7) Master Repurchase Agreement (7) Mortgage loans held for sale (6) 9/15/2023 900,000 250,000 269,130 542,846 8) Master Repurchase Agreement (7) Mortgage loans held for sale (6) 9/22/2023 1,250,000 250,000 265,188 539,257 9) Master Repurchase Agreement (7) Mortgage loans held for sale (6) 9/27/2024 750,000 100,000 230,164 616,165 10) Master Repurchase Agreement (7) Mortgage loans held for sale (6) 12/16/2022 1,000,000 250,000 261,923 253,389 $ 13,900,000 $ 2,900,000 $ 3,754,494 $ 9,486,726 Early Funding: 11) Early Funding Facility (4)(7) Mortgage loans held for sale (6) (4) $ 4,000,000 $ — $ 478,819 $ 2,071,154 12) Early Funding Facility (5)(7) Mortgage loans held for sale (6) (5) 3,000,000 — 676,056 1,193,712 7,000,000 — 1,154,875 3,264,866 Total $ 20,900,000 $ 2,900,000 $ 4,909,369 $ 12,751,592 (1) 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, 2022, this facility was amended to decrease the committed amount to $800,000 and was extended to October 26, 2023. (2) Subsequent to September 30, 2022, this facility was amended to decrease the total facility size to $1,000,000. (3) This facility has an overall line size of $1,500,000. This facility also includes a $1,500,000 sublimit for MSR financing; Capacity is fully fungible and is not restricted by these allocations. (4) This facility is an evergreen agreement with no stated termination or expiration date. This agreement can be terminated by either party upon written notice. (5) This facility has an overall line size of $3,000,000, which is reviewed every 90 days. This facility is an evergreen agreement with no stated termination or expiration date. This agreement can be terminated by either party upon written notice. (6) 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. (7) The interest rates charged by lenders on the funding facilities included the applicable base rate plus a spread ranging from 1.00% to 1.85% for the nine months ended September 30, 2022, and the applicable base rate plus a spread ranging from 1.00% to 2.25% for the year ended December 31, 2021. Other Financing Facilities Facility Type Collateral Maturity Line Amount Committed Line Amount Outstanding Balance September 30, 2022 Outstanding Balance December 31, 2021 Line of Credit Financing Facilities 1) Unsecured line of credit (1) — 7/27/2025 $ 2,000,000 $ — $ — $ — 2) Unsecured line of credit (1) — 7/31/2025 100,000 — — — 3) Revolving credit facility (4) — 8/10/2025 1,000,000 1,000,000 — — 4) MSR line of credit (4) MSRs 10/20/2023 200,000 — — — 5) MSR line of credit (2)(4) MSRs 9/9/2024 1,500,000 250,000 — — 6) MSR line of credit (3)(4) MSRs (3) — — — 75,000 $ 4,800,000 $ 1,250,000 $ — $ 75,000 Early Buyout Financing Facility 6) Early buy out facility (4) Loans/ Advances 3/13/2024 $ 1,500,000 $ — $ 814,458 $ 1,896,784 (1) Refer to Note 6, Transactions with Related Parties for additional details regarding this unsecured line of credit. (2) This facility is a sublimit of Master Repurchase Agreement 6 , found above in Funding Facilities. Refer to Subfootnote 3, Funding Facilities for additional details regarding this financing facility. (3) This facility was voluntarily paid off and terminated in March 2022. (4) The interest rates charged by lenders on the other funding facilities included the applicable base rate, plus a spread ranging from 1.45% to 4.00% for the nine months ended September 30, 2022, and for the year ended December 31, 2021. Unsecured Senior Notes Facility Type Maturity Interest Rate Outstanding Principal September 30, 2022 Outstanding Principal December 31, 2021 Unsecured Senior Notes (1) 10/15/2026 2.875 % $ 1,150,000 $ 1,150,000 Unsecured Senior Notes (2) 1/15/2028 5.250 % 61,985 61,985 Unsecured Senior Notes (3) 3/1/2029 3.625 % 750,000 750,000 Unsecured Senior Notes (4) 3/1/2031 3.875 % 1,250,000 1,250,000 Unsecured Senior Notes (5) 10/15/2033 4.000 % 850,000 850,000 Total Senior Notes $ 4,061,985 $ 4,061,985 Weighted Average Interest Rate 3.59 % 3.59 % (1) The 2026 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 $1,150,000 carrying amount on the Condensed Consolidated Balance Sheets by $9,140 and $10,854 as of September 30, 2022 and December 31, 2021, respectively. (2) The 2028 Senior Notes are unsecured obligation notes with no asset required to pledge for this borrowing. Unamortized debt issuance costs and discounts are presented net against the Senior Notes reducing the $61,985 carrying amount on the Condensed Consolidated Balance Sheets by $376 and $313 as of September 30, 2022, respectively, and $430 and $358, as of December 31, 2021, respectively. (3) The 2029 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 $750,000 carrying amount on the Condensed Consolidated Balance Sheets by $6,436 and $7,188 as of September 30, 2022 and December 31, 2021, respectively. (4) The 2031 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 Condensed Consolidated Balance Sheets by $11,380 and $12,395 as of September 30, 2022 and December 31, 2021, respectively. (5) The 2033 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 $850,000 carrying amount on the Condensed Consolidated Balance Sheets by $7,741 and $8,269 as of September 30, 2022 and December 31, 2021, respectively. Refer to Note 2, Fair Value Measurements for information pertaining to the fair value of the Company’s debt as of September 30, 2022 and December 31, 2021. |
Transactions with Related Parti
Transactions with Related Parties | 9 Months Ended |
Sep. 30, 2022 | |
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 June 9, 2017, Rocket Mortgage and RHI entered into an unsecured line of credit, as further amended and restated on September 16, 2021 (“RHI Line of Credit”), pursuant to which Rocket Mortgage has a borrowing capacity of $2,000,000. The RHI Line of Credit matures on July 27, 2025. Borrowings under the line of credit bear interest at a rate per annum of one month LIBOR plus 1.25%, or the applicable successor benchmark should LIBOR be discontinued. 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 Rocket Mortgage to maintain a quarterly consolidated net income before taxes if adjusted tangible net worth meets certain requirements. There were no outstanding principal amounts due to RHI as of September 30, 2022 and December 31, 2021, pursuant to the RHI Line of Credit. Rocket Mortgage repaid no amounts and an aggregate of $750,000 for the three months ended September 30, 2022 and 2021, respectively, and $762 and $1,750,843 for the nine months ended September 30, 2022 and 2021, respectively. The amount of interest paid under the RHI Line of Credit was $762 and $843 for the nine months ended September 30, 2022 and 2021, respectively, with no outstanding interest due to RHI. As of September 30, 2022 and 2021 the amount of outstanding interest due to RHI was zero and $250, respectively. RHI and ATI are parties to a surplus debenture, effective as of December 28, 2015, 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. ATI repaid an aggregate of $250 and $750 for the three and nine months ended September 30, 2022 and 2021, respectively. The total amount of interest accrued under the RHI/ATI Debenture was $434 and $1,286 for the three and nine months ended September 30, 2022 and 2021, respectively. On July 31, 2020, Holdings and RHI entered into an 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 RHI 2nd Line of Credit matures 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%, or the applicable successor benchmark should LIBOR be discontinued. 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. As of September 30, 2022 and December 31, 2021 there were no draws on the RHI 2nd Line of Credit and no amounts outstanding. The amounts receivable from and payable to Related Parties consisted of the following as of: September 30, 2022 December 31, 2021 Principal Interest Rate Principal Interest Rate Included in Notes receivable and due from affiliates on the Condensed Consolidated Balance Sheets Affiliated receivables and other notes $ 11,179 — % $ 9,753 — % Notes receivable and due from affiliates $ 11,179 $ 9,753 Included in Notes payable and due to affiliates on the Condensed Consolidated Balance Sheets RHI/ATI Debenture $ 21,500 8.00 % $ 21,500 8.00 % Affiliated payables 8,965 — % 12,150 — % Notes payable and due to affiliates $ 30,465 $ 33,650 Services, Products and Other Transactions We have entered into transactions and agreements to provide certain services to Related Parties. We recognized revenue of $3,206 and $3,494 for the three months ended September 30, 2022 and 2021, respectively, and $9,437 and $10,592 for the nine months ended September 30, 2022 and 2021, respectively, for the performance of these services, which was included in Other income. We have also entered into transactions and agreements to purchase certain services, products and other transactions from Related Parties. We incurred expenses of $19,259 and $48,861 for the three months ended September 30, 2022 and 2021, respectively, and $86,155 and $121,599 for the nine months ended September 30, 2022 and 2021, respectively, for these products, services and other transactions, which are included in General and administrative expenses. As further described in Note 13 , Share-based Compensation , the Company is allocated compensation costs associated with awards granted by RHI in years prior to the reorganization and IPO. During the nine months ended September 30, 2022, all RHI restricted stock units and options were cancelled and replaced with cash or a modified award denominated in Company shares. This resulted in RHI contributing approximately $42,000 in cash to the Company and its subsidiaries in exchange for the share-based compensation award modifications. The Company has also entered into a Tax Receivable Agreement with RHI and our Chairman as described further in Note 7, Income Taxes. The Company has also guaranteed the debt of a related party as described further in Note 9, Commitments, Contingencies, and Guarantees. Promotional Sponsorships The Company incurred marketing and advertising costs related to the Rocket Mortgage Field House Naming Rights Contract and other promotional sponsorships, which are related parties. The company incurred expenses of $2,169 and $2,180 for the three months ended September 30, 2022 and 2021, respectively, and $6,773 and $6,850 for the nine months ended September 30, 2022 and 2021, respectively, related to these arrangements. 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. The Company incurred expenses of $17,864 and $16,189 for the three months ended September 30, 2022 and 2021, respectively, and $55,419 and $51,001 for the nine months ended September 30, 2022 and 2021, respectively, related to these arrangements. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company has income tax expense of $10,131 and $32,830 on Income before income taxes of $106,355 and $1,425,689 for the three months ended September 30, 2022 and 2021, respectively. The Company has income tax expense of $54,741 and $122,709 on Income before income taxes of $1,247,329 and $5,329,556 for the nine months ended September 30, 2022 and 2021, respectively. The Company’s income tax expense varies from the expense that would be expected based on statutory rates due principally to its organizational structure. Several subsidiaries of Holdings, such as Rocket Mortgage, Amrock and other subsidiaries, are single member LLC entities. 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. A provision for state income taxes is required for certain jurisdictions that tax single member LLCs as regarded entities. Other 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 tax purposes and in most applicable jurisdictions for 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 income 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 operating agreement of Holdings (the "Holdings Operating 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. The Inflation Reduction Act (“IRA”) was enacted on August 16, 2022. The IRA includes several provisions, one of which was the enactment of the corporate alternative minimum tax, which imposes a minimum tax on the adjusted financial statement income for an ‘applicable corporation’ as defined in the IRA. The corporate alternative minimum tax is effective for tax years beginning after December 31, 2022. There has been no material impact on the consolidated financial statements as of September 30, 2022 from the enactment of the corporate alternative minimum tax. 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 reorganization completed prior to our IPO in 2020, the Company entered into a Tax Receivable Agreement with the LLC Members that will obligate the Company to make payments to the LLC Members generally equal to 90% of the applicable cash tax savings that the Company actually realizes or in some cases is deemed to 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 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 will retain the benefit of the remaining 10% of these tax savings. On March 31, 2021, the Company exchanged 20,200,000 shares of Class A common stock for the equivalent number of shares of Class D common stock and Holdings Units with RHI, which resulted in an increase in the tax basis of assets of Holdings that is subject to the provisions of the Tax Receivable Agreement. The Company recorded an increase in its deferred tax asset on investment in partnership of $123,587, an increase in the valuation allowance of $3,146, and an increase in the Tax receivable agreement liability of $119,456 with the net offsetting amount of $985 recorded to Additional Paid-in Capital in the Change in controlling interest of investment, net in the Condensed Consolidated Statements of Changes in Equity. A payment of $40,721 was made to the LLC Members pursuant to the Tax Receivable Agreement during the nine months ended September 30, 2022. No such payments were made in the three months ended September 30, 2022. 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. Tax Distributions The holders of Holdings’ Units, including Rocket Companies Inc., incur U.S. federal, state and local income taxes on their share of any taxable income of Holdings. The Holdings Operating Agreement provides for pro rata cash distributions (“tax distributions”) to the holders of the Holdings Units in an amount generally calculated to provide each holder of Holdings Units with sufficient cash to cover its tax liability in respect of the Holdings Units. In general, these tax distributions are computed based on Holdings’ estimated taxable income, multiplied by an assumed tax rate as set forth in the Holdings Operating Agreement. For the three and nine months ended September 30, 2022, Holdings paid tax distributions totaling zero and $166,698, respectively, to holders of Holdings Units other than Rocket Companies. For the three and nine months ended September 30, 2021, Holdings paid tax distributions totaling $395,057 and $1,801,756, respectively, to holders of Holdings Units other than Rocket Companies. |
Derivative Financial Instrument
Derivative Financial Instruments | 9 Months Ended |
Sep. 30, 2022 | |
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, net in the Condensed Consolidated Statements of Income and Comprehensive Income . Additional detail regarding derivative financial instruments is provided in Note 12, Derivative Financial Instruments in our 2021 10-K report. Net hedging gains were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Hedging gains (1) $ 2,674,875 $ 652,337 $ 5,654,497 $ 2,020,328 (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, 2022: IRLCs, net of loan funding probability (1) $ 8,387,274 $ 7,743 $ — Forward commitments (2) $ 15,798,620 $ 690,396 $ 84,699 Balance at December 31, 2021: IRLCs, net of loan funding probability (1) $ 21,194,326 $ 538,861 $ — Forward commitments (2) $ 36,476,871 $ 17,337 $ 19,911 (1) IRLCs are also discussed in Note 9, Commitments, Contingencies, and Guarantees. (2) Includes the fair value and net 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 may pledge cash or receive cash from counterparties related to these forward commitments. Pledged cash to counterparties is classified in Other assets in the Condensed Consolidated Balance Sheets. Pledged cash received from counterparties is recorded in Cash and cash equivalents, and the related liability is 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, 2022: Forward commitments $ 1,170,954 $ (480,558) $ 690,396 Balance at December 31, 2021: Forward commitments $ 50,225 $ (32,888) $ 17,337 Offsetting of Derivative Liabilities Balance at September 30, 2022: Forward commitments $ (123,175) $ 38,476 $ (84,699) Balance at December 31, 2021: Forward commitments $ (54,922) $ 35,011 $ (19,911) 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 three and nine months ended September 30, 2022 and 2021. |
Commitments, Contingencies, and
Commitments, Contingencies, and Guarantees | 9 Months Ended |
Sep. 30, 2022 | |
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, 2022 and December 31, 2021 was approximately 47 days and 43 days on average, respectively. The UPB of IRLCs was as follows: September 30, 2022 December 31, 2021 Fixed Rate Variable Rate Fixed Rate Variable Rate IRLCs $ 11,266,246 $ 690,400 $ 25,937,777 $ 1,239,762 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, 2022 and December 31, 2021 was $1,802,734 and $2,243,381, 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 $185,649 and $333,594 of loans committed to be sold servicing released at September 30, 2022 and December 31, 2021, respectively. 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 $5,315,110 and $3,682,366, and for principal and interest was $3,557,170 and $8,370,326 at September 30, 2022 and December 31, 2021, 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, 2022 and December 31, 2021, the Company guaranteed the debt of a related party consisting of three separate guarantees totaling $3,920 and $5,216, respectively. As of September 30, 2022 and December 31, 2021, 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. Tax Receivable Agreement As indicated in Note 7, Income Taxes, the Company is party to a Tax Receivable Agreement. Legal Rocket Companies, through its subsidiaries, engages in, among other things, mortgage lending, title and settlement services, and other financial technology services. Rocket Companies and its subsidiaries operate in highly regulated industries and are routinely subject to various legal and administrative proceedings concerning matters that arise in the normal and ordinary course of business, including inquiries, 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 are expensed as they are incurred. As of September 30, 2022 and December 31, 2021, the Company had reserves related to potential damages in connection with any legal proceedings of $15,000. The ultimate outcome of these or other actions or proceedings, including any monetary awards against us, is uncertain and there can be no assurance as to the amount of any such potential awards. 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 us and we fail to timely pay, discharge, bond or obtain a stay of execution of such judgment, it is possible that we 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 our business, liquidity, financial condition, cash flows and results of operations. |
Minimum Net Worth Requirements
Minimum Net Worth Requirements | 9 Months Ended |
Sep. 30, 2022 | |
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 certain 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. The most restrictive of the minimum net worth and capital requirements require the Company to maintain a minimum adjusted net worth balance of $1,500,000 and $1,794,783 as of September 30, 2022 and December 31, 2021, respectively. As of September 30, 2022 and December 31, 2021, the Company was in compliance with this requirement. |
Segments
Segments | 9 Months Ended |
Sep. 30, 2022 | |
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 Company’s internal operations and the nature of its marketing channels, which drive client acquisition into the mortgage platform. 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 Rocket Mortgage online and/or with the Company’s mortgage bankers. The Company markets to potential clients in this segment through various brand campaigns and 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. The segment also includes title insurance, appraisals and settlement services complementing the Company’s end-to-end mortgage origination experience. Servicing activities are fully allocated to the Direct to Consumer segment and are viewed as an extension of the client experience. Servicing enables Rocket Mortgage to establish and maintain long term relationships with our clients, through multiple touchpoints at regular engagement intervals. Revenues in the Direct to Consumer segment are generated primarily from the gain on sale of loans, which includes loan origination fees, revenues from sales of loans into the secondary market, as well as the fair value of originated MSRs and hedging gains and losses. Loan servicing income (loss) consists of the contractual fees earned for servicing loans and other ancillary servicing fees, as well as changes in the fair value of MSRs due to changes in valuation assumptions and realization of cash flows. Partner Network The Rocket Professional platform supports our Partner Network segment, where we leverage our superior client service and widely recognized brand to grow marketing and influencer relationships, and our mortgage broker partnerships through Rocket Pro TPO. Our marketing partnerships consist of well-known consumer-focused companies that find value in our award-winning client experience and want to offer their clients mortgage solutions with our trusted, widely recognized brand. These organizations connect their clients directly to us through marketing channels and a referral process. Our influencer partnerships are typically with companies that employ licensed mortgage professionals that find value in our client experience, technology and efficient mortgage process, where mortgages may not be their primary offering. We also enable clients to start the mortgage process through the Rocket platform in the way that works best for them, including through a local mortgage broker. Revenues in the Partner Network segment are generated primarily from the gain on sale of loans, which includes loan origination fees, revenues from sales of loans into the secondary market, as well as the fair value of originated MSRs and hedging gains and losses. Other Information About Our Segments The Company measures the performance of the segments primarily on a contribution margin basis. The accounting policies applied by our segments are the same as those described in Note 1, Business, Basis of Presentation and Accounting Policies and the decrease in MSRs due to valuation assumptions is consistent with the changes described in Note 3, Mortgage Servicing Rights . Directly attributable expenses include Salaries, commissions and team member benefits, General and administrative expenses and Other expenses, such as servicing costs and origination costs. 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, Rocket Auto, Core Digital Media, Rocket Loans, Rocket Money (formerly known as Truebill) 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 periods ended: Three Months Ended September 30, 2022 Direct to Partner Segments All Other Total Revenues Gain on sale $ 486,018 $ 75,110 $ 561,128 $ 4,883 $ 566,011 Interest income 61,133 33,871 95,004 749 95,753 Interest expense on funding facilities (29,767) (16,401) (46,168) (5) (46,173) Servicing fee income 363,279 — 363,279 932 364,211 Changes in fair value of MSRs 150,304 — 150,304 — 150,304 Other income 83,363 5,631 88,994 75,586 164,580 Total U.S. GAAP Revenue, net 1,114,330 98,211 1,212,541 82,145 1,294,686 Less: Increase in MSRs due to valuation assumptions (net of hedges) (406,485) — (406,485) — (406,485) Adjusted revenue 707,845 98,211 806,056 82,145 888,201 Directly attributable expenses 558,760 86,742 645,502 82,240 727,742 Contribution margin $ 149,085 $ 11,469 $ 160,554 $ (95) $ 160,459 Nine Months Ended September 30, 2022 Direct to Consumer Partner Network Segments Total All Other Total Revenues Gain on sale $ 2,348,573 $ 490,625 $ 2,839,198 $ 17,436 $ 2,856,634 Interest income 169,679 93,586 263,265 2,225 265,490 Interest expense on funding facilities (84,198) (46,369) (130,567) (9) (130,576) Servicing fee income 1,085,557 — 1,085,557 2,447 1,088,004 Changes in fair value of MSRs 592,162 — 592,162 — 592,162 Other income 343,300 29,310 372,610 313,377 685,987 Total U.S. GAAP Revenue, net 4,455,073 567,152 5,022,225 335,476 5,357,701 Less: Increase in MSRs due to valuation assumptions (net of hedges) (1,412,670) — (1,412,670) — (1,412,670) Adjusted revenue 3,042,403 567,152 3,609,555 335,476 3,945,031 Directly attributable expenses 2,037,401 302,477 2,339,878 305,479 2,645,357 Contribution margin $ 1,005,002 $ 264,675 $ 1,269,677 $ 29,997 $ 1,299,674 Three Months Ended September 30, 2021 Direct to Consumer Partner Network Segments Total All Other Total Revenues Gain on sale $ 2,241,633 $ 402,649 $ 2,644,282 $ 9,931 $ 2,654,213 Interest income 77,112 51,815 128,927 1,036 129,963 Interest expense on funding facilities (43,528) (29,248) (72,776) (2) (72,778) Servicing fee income 333,653 — 333,653 695 334,348 Changes in fair value of MSRs (341,361) — (341,361) — (341,361) Other income 234,381 31,301 265,682 144,663 410,345 Total U.S. GAAP Revenue, net 2,501,890 456,517 2,958,407 156,323 3,114,730 Plus: Decrease in MSRs due to valuation assumptions (net of hedges) 47,514 — 47,514 — 47,514 Adjusted revenue 2,549,404 456,517 3,005,921 156,323 3,162,244 Directly attributable expenses 927,897 176,246 1,104,143 67,892 1,172,035 Contribution margin $ 1,621,507 $ 280,271 $ 1,901,778 $ 88,431 $ 1,990,209 Nine Months Ended September 30, 2021 Direct to Consumer Partner Network Segments Total All Other Total Revenues Gain on sale $ 7,155,872 $ 1,374,729 $ 8,530,601 $ 17,543 $ 8,548,144 Interest income 188,269 121,097 309,366 2,487 311,853 Interest expense on funding facilities (124,942) (80,010) (204,952) (48) (205,000) Servicing fee income 967,993 — 967,993 2,065 970,058 Changes in fair value of MSRs (556,201) — (556,201) — (556,201) Other income 769,152 82,306 851,458 401,387 1,252,845 Total U.S. GAAP Revenue, net 8,400,143 1,498,122 9,898,265 423,434 10,321,699 Less: Increase in MSRs due to valuation assumptions (net of hedges) (329,608) — (329,608) — (329,608) Adjusted revenue 8,070,535 1,498,122 9,568,657 423,434 9,992,091 Directly attributable expenses 2,808,340 532,087 3,340,427 196,805 3,537,232 Contribution margin $ 5,262,195 $ 966,035 $ 6,228,230 $ 226,629 $ 6,454,859 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, 2022 2021 2022 2021 Contribution margin, excluding change in MSRs due to valuation assumptions $ 160,459 $ 1,990,209 $ 1,299,674 $ 6,454,859 Increase (decrease) in MSRs due to valuation assumptions (net of hedges) 406,485 (47,514) 1,412,670 329,608 Contribution margin, including change in MSRs due to valuation assumptions 566,944 1,942,695 2,712,344 6,784,467 Less expenses not allocated to segments : Salaries, commissions and team member benefits 243,164 237,410 777,847 694,421 General and administrative expenses 141,048 224,597 495,958 595,283 Depreciation and amortization 24,211 19,577 70,033 55,470 Interest and amortization expense on non-funding debt 38,316 34,163 115,263 104,772 Other expenses 13,850 1,259 5,914 4,965 Income before income taxes $ 106,355 $ 1,425,689 $ 1,247,329 $ 5,329,556 |
Non-controlling Interests
Non-controlling Interests | 9 Months Ended |
Sep. 30, 2022 | |
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, 2022 and December 31, 2021: September 30, 2022 December 31, 2021 Holdings Units Ownership Percentage Holdings Units Ownership Percentage Rocket Companies, Inc.'s ownership of Holdings Units 121,386,911 6.16 % 126,437,703 6.40 % Holdings Units held by our Chairman 1,101,822 0.06 % 1,101,822 0.06 % Holdings Units held by RHI 1,847,777,661 93.78 % 1,847,777,661 93.54 % Balance at end of period 1,970,266,394 100.00 % 1,975,317,186 100.00 % 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, 2022, our Chairman has not exchanged any Paired Interests. On March 31, 2021, the Company exchanged 20,200,000 shares of Class A common stock for the equivalent number of Class D Common stock and Holdings Units with RHI. This transaction resulted in an increase of Rocket Companies' controlling interest and a corresponding decrease of non-controlling interest of approximately 1%. As of September 30, 2022, Rocket Companies has repurchased 30,393,667 shares of Class A common stock under the Share Repurchase Program authorized in November 2020. |
Share-based Compensation
Share-based Compensation | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Share-based Compensation | Share-based Compensation The Company has the 2020 Omnibus Incentive Plan under which restricted stock units and stock options are granted to team members and directors of the Company and its affiliates. The fair value of the share-based awards is estimated on the date of grant based on the market price of the underlying common stock and is amortized on a straight-line basis over the related requisite service periods. There were no material grants during the three months ended September 30, 2022. The Company granted approximately 22,000,000 restricted stock units with an estimated future expense of $287,000 during the nine months ended September 30, 2022. These awards generally vest annually over a three-year period or quarterly over an accelerated four-year period, subject to the grantee’s employment or service with the Company through each applicable vesting date. The Company has an employee stock purchase plan, also referred to as the Team Member Stock Purchase Plan ("TMSPP"), under which eligible team members may direct the Company to withhold up to 15% of their gross pay to purchase shares of common stock at a price equal to 85% of the closing market price on the exercise date. The TMSPP is a liability classified compensatory plan and the Company recognizes compensation expense over the offering period based on the fair value of the purchase discount. The number of shares purchased by team members through the TMSPP was 1,032,558 and 947,358, during the three months ended September 30, 2022 and 2021, respectively and 3,508,231 and 1,844,059 for the nine months ended September 30, 2022 and 2021, respectively. Additionally, we are allocated costs associated with awards granted by Rock Holdings, Inc. (“RHI”) in the years prior to the reorganization and IPO and certain of our subsidiaries have individual compensation plans that include equity awards and stock appreciation rights. During the nine months ended September 30, 2022, all remaining RHI restricted stock units and options were cancelled and replaced with cash or a modified award denominated in RKT shares. The incremental compensation expense related to these modifications is not material. RHI reimbursed the Company for the settlement or exchange of these awards as described in Note 6, Transactions with Related Parties . The components of share-based compensation expense included in Salaries, commissions and team member benefits on the Condensed Consolidated Statements of Income and Comprehensive Income is as follows: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Rocket Companies, Inc. sponsored plans Restricted stock units $ 45,707 $ 26,615 $ 132,301 $ 81,179 Stock options 9,086 10,257 27,932 30,155 Team Member Stock Purchase Plan 1,079 2,354 4,811 7,638 Subtotal Rocket Companies, Inc. sponsored plans $ 55,872 $ 39,226 $ 165,044 $ 118,972 RHI equity 1,714 1,372 15,746 4,117 Subsidiary plans 176 281 524 811 Total share-based compensation expense $ 57,762 $ 40,879 $ 181,314 $ 123,900 |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 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 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 are included in the weighted-average Class A shares outstanding in the calculation of basic earnings per share once the units are fully vested. Basic earnings per share of Class A common stock is computed by dividing Net income attributable to Rocket Companies by the weighted-average number of shares of Class A common stock outstanding during the period. Diluted earnings per share of Class A common stock is computed by dividing Net income attributable to Rocket Companies by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive securities. There was no Class B common stock outstanding as of September 30, 2022 or 2021, respectively. See Note 12, Non-controlling Interests for a description of Paired Interests and their potential impact on Class A and Class B share ownership. The following table sets forth the calculation of the basic and diluted earnings per share for the period: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Net income $ 96,224 $ 1,392,859 $ 1,192,588 $ 5,206,847 Net income attributable to non-controlling interest (89,314) (1,317,522) (1,128,551) (4,946,688) Net income attributable to Rocket Companies 6,910 75,337 64,037 260,159 Add: Reallocation of Net income attributable to vested, undelivered stock awards 3 39 38 141 Net income attributable to common shareholders $ 6,913 $ 75,376 $ 64,075 $ 260,300 Numerator: Net income attributable to Class A common shareholders - basic $ 6,913 $ 75,376 $ 64,075 $ 260,300 Add: Reallocation of net income attributable to dilutive impact of pro-forma conversion of Class D shares to Class A shares (1) 75,277 991,852 866,499 — Add: Reallocation of net income attributable to dilutive impact of share-based compensation awards (2) 101 2,294 1,396 10,254 Net income attributable to Class A common shareholders - diluted $ 82,291 $ 1,069,522 $ 931,970 $ 270,554 Denominator: Weighted average shares of Class A common stock outstanding - basic 119,020,520 137,664,471 120,156,494 129,902,253 Add: Dilutive impact of conversion of Class D shares to Class A shares 1,848,879,483 1,848,879,483 1,848,879,483 — Add: Dilutive impact of share-based compensation awards (3) 2,765,764 4,284,397 3,227,291 5,490,417 Weighted average shares of Class A common stock outstanding - diluted 1,970,665,767 1,990,828,351 1,972,263,268 135,392,670 Earnings per share of Class A common stock outstanding - basic $ 0.06 $ 0.55 $ 0.53 $ 2.00 Earnings per share of Class A common stock outstanding - diluted $ 0.04 $ 0.54 $ 0.47 $ 2.00 (1) Net income calculated using the estimated annual effective tax rate of Rocket Companies, Inc. (2) Reallocation of net income attributable to dilutive impact of share-based compensation awards for the three months ended September 30, 2022 and 2021 comprised of $89 and $2,223 related to restricted stock units and $12 and $71 related to TMSPP, respectively. Reallocation of net income attributable to dilutive impact of share-based compensation awards for the nine months ended September 30, 2022 and 2021 comprised of $1,283 and $10,027 related to restricted stock units and $113 and $227 related to TMSPP, respectively. (3) Dilutive impact of share-based compensation awards for the three months ended September 30, 2022 and 2021 comprised of 2,427,043 and 4,151,765 related to restricted stock units and 338,720 and 132,632 related to TMSPP, respectively. Dilutive impact of share-based compensation awards for the nine months ended September 30, 2022 and 2021 comprised of 2,965,926 and 5,369,320 related to restricted stock units and 261,365 and 121,097 related to TMSPP, respectively. For the three and nine months ended September 30, 2022, 22,287,580 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. For the nine months ended September 30, 2021, 1,855,464,831 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. |
Business, Basis of Presentati_2
Business, Basis of Presentation and Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Consolidation | As the sole managing member of Holdings, the Company operates and controls all of the business affairs of Holdings, and through Holdings and its subsidiaries, conducts its business. Holdings is considered a variable interest entity (“VIE”) and we consolidate the financial results of Holdings under the guidance of ASC 810, Consolidation. A portion of our Net income is allocated to Net income attributable to non-controlling interest. For further details, refer below to Variable Interest Entities and Note 12 , Non-controlling Interests. All significant intercompany transactions and accounts between the businesses comprising the Company have been eliminated in the accompanying condensed consolidated financial statements. The Company's derivatives, IRLCs, mortgage loans held for sale, MSRs, and investments are measured at fair value on a recurring basis. Additionally, other assets may be required to be measured at fair value in the consolidated financial statements on a nonrecurring basis. Examples of such measurements are mortgage loans transferred between held for investment and held for sale, certain impaired loans, and other real estate owned. For further details of the Company's transactions refer to Note 2, Fair Value Measurements. All transactions and accounts between RHI and other related parties with 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”). The interim financial information should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC. 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. Certain prior period amounts have been reclassified to conform to the current period financial statement presentation. 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 EstimatesThe 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 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. |
Revenue Recognition | Revenue Recognition Gain on sale of loans, net — includes all components related to the origination and sale of mortgage loans, including (1) net gain on sale of loans, which represents the premium we receive in excess of the loan principal amount and certain fees charged by investors upon sale of loans into the secondary market, (2) loan origination fees (credits), points and certain costs, (3) provision for or benefit from investor reserves, (4) the change in fair value of interest rate locks and loans held for sale, (5) the gain or loss on forward commitments hedging loans held for sale and interest rate lock commitments (IRLCs), and (6) the fair value of originated MSRs. An estimate of the Gain on sale of loans, net is recognized at the time an IRLC is issued, net of a pull-through factor. Subsequent changes in the fair value of IRLCs and mortgage loans held for sale are recognized in current period earnings. When the mortgage loan is sold into the secondary market, any difference between the proceeds received and the current fair value of the loan is recognized in current period earnings in Gain on sale of loans, net. Included in Gain on sale of loans, net is the Fair value of originated MSRs, which represents the estimated fair value of MSRs related to loans which we have sold and retained the right to service. Refer to Note 3, Mortgage Servicing Rights for information related to the Total changes in fair value of MSRs. Loan servicing income (loss) — includes income from servicing, sub-servicing and ancillary fees, and is recorded to income as earned, which is upon collection of payments from borrowers. This amount also includes the Change in fair value of MSRs, which is the adjustment for the fair value measurement of the MSR asset as of the respective balance sheet date. Interest income, net — includes interest earned on mortgage loans held for sale and mortgage loans held for investment net of the interest expense paid on our loan funding facilities. Interest income is recorded as earned and interest expense is recorded as incurred. Other income — is derived primarily from closing fees, net appraisal revenue, net title insurance fees and personal finance, real estate network referral fees, contact center revenue, personal loans business, professional service fees, and lead generation revenue. The following revenue streams fall within the scope of ASC Topic 606—Revenue from Contracts with Customers and are disaggregated hereunder: Amrock closing fees — The Company recognizes closing fees for non-recurring services provided in connection with the origination of the loan. These fees are recognized at the time of loan closing for purchase transactions or at the end of a client's three-day rescission period for refinance transactions, which represents the point in time the loan closing services performance obligation is satisfied. The consideration received for closing services is a fixed fee per loan that varies by state and loan type. Closing fees were $24,534 and $120,381 for the three months ended September 30, 2022 and 2021, respectively and $139,441 and $395,509 for the nine months ended September 30, 2022 and 2021, respectively. Amrock appraisal revenue, net — The Company recognizes appraisal revenue when the appraisal service is completed. The Company may choose to deliver appraisal services directly to its client or subcontract such services to a third-party licensed and/or certified appraiser. In instances where the Company performs the appraisal, revenue is recognized as the gross amount of consideration received at a fixed price per appraisal. The Company is an agent in instances where a third-party appraiser is involved in the delivery of appraisal services and revenue is recognized net of third-party appraisal expenses. Appraisal revenue, net was $14,946 and $23,222 for the three months ended September 30, 2022 and 2021, respectively and $52,262 and $68,792 for the nine months ended September 30, 2022 and 2021, respectively. Rocket Money (formerly known as Truebill) subscription revenue — The Company recognizes subscription revenue ratably over the contract term beginning on the commencement date of each contract. We have determined that subscriptions represent a stand-ready obligation to perform over the subscription term. These performance obligations are satisfied over time as the customer simultaneously receives and consumes the benefits. Contracts are one month to one year in length. Subscription revenues were $32,649 for the three months ended September 30, 2022 and $84,578 for the nine months ended September 30, 2022. Rocket Homes real estate network referral fees — The Company recognizes real estate network referral fee revenue based on arrangements with partner agencies contingent on the closing of a transaction. As this revenue stream is variable, and is contingent on the successful transaction close, the revenue is constrained until the occurrence of the transaction. At this point, the constraint on recognizing revenue is deemed to have been lifted and revenue is recognized for the consideration expected to be received. Real estate network referral fees, net of intercompany eliminations, were $12,647 and $16,068 for the three months ended September 30, 2022 and 2021, respectively and $38,916 and $39,778 for the nine months ended September 30, 2022 and 2021, respectively. Rock Connections and Rocket Auto contact center revenue — The Company recognizes contact center revenue for communication services including client support and sales. Consideration received mainly includes a fixed base fee and/or a variable contingent fee. The fixed base fee is recognized ratably over the period of performance, as the performance obligation is considered to be satisfied equally throughout the service period. The variable contingent fee related to car sales is constrained until the sale of the car is completed. Contact center revenues, net of intercompany eliminations, were $2,349 and $10,847 for the three months ended September 30, 2022 and 2021, respectively and $15,506 and $34,769 for the nine months ended September 30, 2022 and 2021, respectively. Professional service fees — The Company recognizes professional service fee revenue based on the delivery of services (e.g., human resources, technology, training) over the term of a contract. Consideration for the promised services is received through a combination of a fixed fee for the period and incremental fees paid for optional services that are available at an incremental rate determined at the time such services are requested. The Company recognizes the annual fee ratably over the life of the contract, as the performance obligation is satisfied equally over the term of the contract. For the optional services, revenue is only recognized at the time the services are requested and delivered and pricing is agreed upon. Professional service fee revenues were $3,030 and $3,434 for the three months ended September 30, 2022 and 2021, respectively and $9,140 and $10,181 for the nine months ended September 30, 2022 and 2021, respectively. All professional service fee revenues were rendered entirely to related parties. Core Digital Media lead generation revenue — The Company recognizes online consumer acquisition revenue based on successful delivery of marketing leads to a client at a fixed fee per lead. This service is satisfied at the time the lead is delivered, at which time revenue for the service is recognized. Online consumer acquisition revenue, net of intercompany eliminations, were $1,392 and $7,784 for the three months ended September 30, 2022 and 2021, respectively and $8,306 and $22,549 for the nine months ended September 30, 2022 and 2021, respectively. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash The Company considers all highly liquid investments purchased with a maturity of three months or less to be cash equivalents. We maintain our bank accounts with a relatively small number of high-quality financial institutions. Restricted cash as of September 30, 2022 and 2021 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, principal and interest received in collection accounts for purchased assets, and a $25,000 bond. |
Loans subject to repurchase right from Ginnie Mae | Loans subject to repurchase right from Ginnie Mae As the servicer for loans sold to Ginnie Mae, the Company 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. The asset and corresponding liability are recorded at the unpaid principal balance of the loan, which approximates its fair value. |
Variable Interest Entities | Variable Interest Entities Rocket Companies, Inc. is 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. Rocket Companies, Inc.’s financial position, performance and cash flows effectively represent those of Holdings and its subsidiaries as of and for the period ended September 30, 2022. |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards There are no recently issued accounting pronouncements adopted for the period. |
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, 2022 or December 31, 2021. 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 and internal models. 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 is determined using an internal 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. MSRs 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. |
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 MSRs asset and has elected the fair value option. These MSRs are recorded at fair value, which is determined using an internal 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. 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 MSRs value and decreases in the discount rate result in a higher MSRs value. MSRs 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. |
Income Taxes | The Company’s income tax expense varies from the expense that would be expected based on statutory rates due principally to its organizational structure. Several subsidiaries of Holdings, such as Rocket Mortgage, Amrock and other subsidiaries, are single member LLC entities. 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. A provision for state income taxes is required for certain jurisdictions that tax single member LLCs as regarded entities. Other 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 tax purposes and in most applicable jurisdictions for 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 income 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 operating agreement of Holdings (the "Holdings Operating 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. The Inflation Reduction Act (“IRA”) was enacted on August 16, 2022. The IRA includes several provisions, one of which was the enactment of the corporate alternative minimum tax, which imposes a minimum tax on the adjusted financial statement income for an ‘applicable corporation’ as defined in the IRA. The corporate alternative minimum tax is effective for tax years beginning after December 31, 2022. There has been no material impact on the consolidated financial statements as of September 30, 2022 from the enactment of the corporate alternative minimum tax. 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. |
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, net in the Condensed Consolidated Statements of Income and Comprehensive Income . Additional detail regarding derivative financial instruments is provided in Note 12, Derivative Financial Instruments in our 2021 10-K report. |
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 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 are included in the weighted-average Class A shares outstanding in the calculation of basic earnings per share once the units are fully vested.Basic earnings per share of Class A common stock is computed by dividing Net income attributable to Rocket Companies by the weighted-average number of shares of Class A common stock outstanding during the period. Diluted earnings per share of Class A common stock is computed by dividing Net income attributable to Rocket Companies by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive securities. There was no Class B common stock outstanding as of September 30, 2022 or 2021, respectively. |
Business, Basis of Presentati_3
Business, Basis of Presentation and Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Cash, Cash Equivalents and Restricted Cash | September 30, 2022 2021 Cash and cash equivalents $ 825,926 $ 2,233,667 Restricted cash 65,718 145,978 Total cash, cash equivalents, and restricted cash in the statement of cash flows $ 891,644 $ 2,379,645 |
Schedule of Cash, Cash Equivalents and Restricted Cash | September 30, 2022 2021 Cash and cash equivalents $ 825,926 $ 2,233,667 Restricted cash 65,718 145,978 Total cash, cash equivalents, and restricted cash in the statement of cash flows $ 891,644 $ 2,379,645 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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, 2022 or the year ended December 31, 2021. Level 1 Level 2 Level 3 Total Balance at September 30, 2022 Assets: Mortgage loans held for sale $ — $ 7,911,451 $ 1,211,659 $ 9,123,110 IRLCs — — 7,743 7,743 MSRs — — 7,260,066 7,260,066 Forward commitments — 690,396 — 690,396 Total assets $ — $ 8,601,847 $ 8,479,468 $ 17,081,315 Liabilities: Forward commitments $ — $ 84,699 $ — $ 84,699 Total liabilities $ — $ 84,699 $ — $ 84,699 Balance at December 31, 2021 Assets: Mortgage loans held for sale $ — $ 17,014,202 $ 2,309,366 $ 19,323,568 IRLCs — — 538,861 538,861 MSRs — — 5,385,613 5,385,613 Forward commitments — 17,337 — 17,337 Total assets $ — $ 17,031,539 $ 8,233,840 $ 25,265,379 Liabilities: Forward commitments $ — $ 19,911 $ — $ 19,911 Total liabilities $ — $ 19,911 $ — $ 19,911 |
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, 2022 December 31, 2021 Unobservable Input Range Weighted Average Range Weighted Average Mortgage loans held for sale Dealer pricing 68% - 97% 95 % 89% - 103% 99 % IRLCs Loan funding probability 0% - 100% 70 % 0% - 100% 78 % MSRs Discount rate 9.0% - 12.0% 9.4 % 9.0% - 12.0% 9.5 % Conditional prepayment rate 6.2% - 8.6% 6.9 % 6.8% - 36.9% 8.7 % |
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, 2022 and 2021. Mortgage servicing rights 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, 2022 $ 1,557,784 $ 309,497 Transfers in (1) 197,851 — Transfers out/principal reductions (1) (481,878) — Net transfers and revaluation losses — (301,754) Total losses included in net income (62,098) — Balance at September 30, 2022 $ 1,211,659 $ 7,743 Balance at June 30, 2021 $ 2,579,313 $ 907,978 Transfers in (1) 461,014 — Transfers out/principal reductions (1) (378,302) — Net transfers and revaluation losses — (113,720) Total gains included in net income 2,376 — Balance at September 30, 2021 $ 2,664,401 $ 794,258 Balance at December 31, 2021 $ 2,309,366 $ 538,861 Transfers in (1) 1,020,274 — Transfers out/principal reductions (1) (1,963,939) — Net transfers and revaluation losses — (531,118) Total losses included in net income (154,042) — Balance at September 30, 2022 $ 1,211,659 $ 7,743 Balance at December 31, 2020 $ 579,666 $ 1,897,194 Transfers in (1) 3,244,577 — Transfers out/principal reductions (1) (1,159,712) — Net transfers and revaluation losses — (1,102,936) Total losses included in net income (130) — Balance at September 30, 2021 $ 2,664,401 $ 794,258 (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, 2022 $ 9,123,110 $ 9,518,578 $ (395,468) Balance at December 31, 2021 $ 19,323,568 $ 19,018,552 $ 305,016 (1) Represents the amount of gains (losses) 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, 2022 December 31, 2021 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Senior Notes, due 10/15/2026 $ 1,140,860 $ 945,599 $ 1,139,146 $ 1,151,932 Senior Notes, due 1/15/2028 61,297 51,882 61,197 64,251 Senior Notes, due 3/1/2029 743,564 572,318 742,812 752,805 Senior Notes, due 3/1/2031 1,238,620 912,813 1,237,605 1,273,675 Senior Notes, due 10/15/2033 842,259 581,018 841,731 857,718 Total Senior Notes, net $ 4,026,600 $ 3,063,630 $ 4,022,491 $ 4,100,381 |
Mortgage Servicing Rights (Tabl
Mortgage Servicing Rights (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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, 2022 2021 2022 2021 Fair value, beginning of period $ 6,657,758 $ 4,644,172 $ 5,385,613 $ 2,862,685 MSRs originated 426,278 907,242 1,682,366 2,937,517 MSRs sales — (572,218) (474,022) (671,278) MSRs purchases — 38,281 — 38,281 Changes in fair value: Due to changes in valuation model inputs or assumptions (1) 432,211 (16,123) 1,484,039 426,111 Due to collection/realization of cash flows (256,181) (300,309) (817,930) (892,271) Total changes in fair value 176,030 (316,432) 666,109 (466,160) Fair value, end of period $ 7,260,066 $ 4,701,045 $ 7,260,066 $ 4,701,045 (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 or the effects of contractual prepayment protection resulting from sales of MSRs. |
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, 2022 December 31, 2021 Discount rate 9.4 % 9.5 % Prepayment speeds 6.9 % 8.7 % Life (in years) 8.10 7.25 |
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, 2022 Mortgage servicing rights $ (311,872) $ (599,295) $ (247,595) $ (373,794) December 31, 2021 Mortgage servicing rights $ (232,658) $ (435,181) $ (198,153) $ (372,018) |
Mortgage Loans Held for Sale (T
Mortgage Loans Held for Sale (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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 September 30, 2022 2021 Balance at the beginning of period $ 19,323,568 $ 22,865,106 Disbursements of mortgage loans held for sale 115,269,087 275,516,411 Proceeds from sales of mortgage loans held for sale (1) (126,601,866) (281,117,441) Gain on sale of mortgage loans excluding fair value of other financial instruments, net (2) 1,132,321 5,987,860 Balance at the end of period $ 9,123,110 $ 23,251,936 (1) The proceeds from sales of loans held for sale on the Condensed Consolidated Statements of Cash Flows includes amounts related to the sale of consumer loans. (2) The Gain on sale of loans excluding fair value of MSRs, net 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, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Funding Facilities | Funding Facilities Facility Type Collateral Maturity Line Amount Committed Line Amount Outstanding Balance as of September 30, 2022 Outstanding Balance as of December 31, 2021 MRA funding: 1) Master Repurchase Agreement (7) Mortgage loans held for sale (6) 10/20/2023 $ 1,000,000 $ 100,000 $ 96,409 $ 249,119 2) Master Repurchase Agreement (7) Mortgage loans held for sale (6) 12/1/2022 1,500,000 250,000 608,858 1,328,727 3) Master Repurchase Agreement (7) Mortgage loans held for sale (6) 8/9/2024 2,000,000 250,000 501,293 1,714,806 4) Master Repurchase Agreement (1)(7) Mortgage loans held for sale (6) 7/26/2023 2,000,000 950,000 1,055,708 1,479,128 5) Master Repurchase Agreement (2)(7) Mortgage loans held for sale (6) 5/4/2024 2,000,000 250,000 371,857 2,264,954 6) Master Repurchase Agreement (3)(7) Mortgage loans held for sale (6) 9/9/2024 1,500,000 250,000 93,964 498,335 7) Master Repurchase Agreement (7) Mortgage loans held for sale (6) 9/15/2023 900,000 250,000 269,130 542,846 8) Master Repurchase Agreement (7) Mortgage loans held for sale (6) 9/22/2023 1,250,000 250,000 265,188 539,257 9) Master Repurchase Agreement (7) Mortgage loans held for sale (6) 9/27/2024 750,000 100,000 230,164 616,165 10) Master Repurchase Agreement (7) Mortgage loans held for sale (6) 12/16/2022 1,000,000 250,000 261,923 253,389 $ 13,900,000 $ 2,900,000 $ 3,754,494 $ 9,486,726 Early Funding: 11) Early Funding Facility (4)(7) Mortgage loans held for sale (6) (4) $ 4,000,000 $ — $ 478,819 $ 2,071,154 12) Early Funding Facility (5)(7) Mortgage loans held for sale (6) (5) 3,000,000 — 676,056 1,193,712 7,000,000 — 1,154,875 3,264,866 Total $ 20,900,000 $ 2,900,000 $ 4,909,369 $ 12,751,592 (1) 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, 2022, this facility was amended to decrease the committed amount to $800,000 and was extended to October 26, 2023. (2) Subsequent to September 30, 2022, this facility was amended to decrease the total facility size to $1,000,000. (3) This facility has an overall line size of $1,500,000. This facility also includes a $1,500,000 sublimit for MSR financing; Capacity is fully fungible and is not restricted by these allocations. (4) This facility is an evergreen agreement with no stated termination or expiration date. This agreement can be terminated by either party upon written notice. (5) This facility has an overall line size of $3,000,000, which is reviewed every 90 days. This facility is an evergreen agreement with no stated termination or expiration date. This agreement can be terminated by either party upon written notice. (6) 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. |
Schedule of Other Financing Facilities | Other Financing Facilities Facility Type Collateral Maturity Line Amount Committed Line Amount Outstanding Balance September 30, 2022 Outstanding Balance December 31, 2021 Line of Credit Financing Facilities 1) Unsecured line of credit (1) — 7/27/2025 $ 2,000,000 $ — $ — $ — 2) Unsecured line of credit (1) — 7/31/2025 100,000 — — — 3) Revolving credit facility (4) — 8/10/2025 1,000,000 1,000,000 — — 4) MSR line of credit (4) MSRs 10/20/2023 200,000 — — — 5) MSR line of credit (2)(4) MSRs 9/9/2024 1,500,000 250,000 — — 6) MSR line of credit (3)(4) MSRs (3) — — — 75,000 $ 4,800,000 $ 1,250,000 $ — $ 75,000 Early Buyout Financing Facility 6) Early buy out facility (4) Loans/ Advances 3/13/2024 $ 1,500,000 $ — $ 814,458 $ 1,896,784 (1) Refer to Note 6, Transactions with Related Parties for additional details regarding this unsecured line of credit. (2) This facility is a sublimit of Master Repurchase Agreement 6 , found above in Funding Facilities. Refer to Subfootnote 3, Funding Facilities for additional details regarding this financing facility. (3) This facility was voluntarily paid off and terminated in March 2022. |
Schedule of Unsecured Senior Notes | Unsecured Senior Notes Facility Type Maturity Interest Rate Outstanding Principal September 30, 2022 Outstanding Principal December 31, 2021 Unsecured Senior Notes (1) 10/15/2026 2.875 % $ 1,150,000 $ 1,150,000 Unsecured Senior Notes (2) 1/15/2028 5.250 % 61,985 61,985 Unsecured Senior Notes (3) 3/1/2029 3.625 % 750,000 750,000 Unsecured Senior Notes (4) 3/1/2031 3.875 % 1,250,000 1,250,000 Unsecured Senior Notes (5) 10/15/2033 4.000 % 850,000 850,000 Total Senior Notes $ 4,061,985 $ 4,061,985 Weighted Average Interest Rate 3.59 % 3.59 % (1) The 2026 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 $1,150,000 carrying amount on the Condensed Consolidated Balance Sheets by $9,140 and $10,854 as of September 30, 2022 and December 31, 2021, respectively. (2) The 2028 Senior Notes are unsecured obligation notes with no asset required to pledge for this borrowing. Unamortized debt issuance costs and discounts are presented net against the Senior Notes reducing the $61,985 carrying amount on the Condensed Consolidated Balance Sheets by $376 and $313 as of September 30, 2022, respectively, and $430 and $358, as of December 31, 2021, respectively. (3) The 2029 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 $750,000 carrying amount on the Condensed Consolidated Balance Sheets by $6,436 and $7,188 as of September 30, 2022 and December 31, 2021, respectively. (4) The 2031 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 Condensed Consolidated Balance Sheets by $11,380 and $12,395 as of September 30, 2022 and December 31, 2021, respectively. (5) The 2033 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 $850,000 carrying amount on the Condensed Consolidated Balance Sheets by $7,741 and $8,269 as of September 30, 2022 and December 31, 2021, respectively. |
Transactions with Related Par_2
Transactions with Related Parties (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
Schedule of Receivables from and Payables to Related Parties | The amounts receivable from and payable to Related Parties consisted of the following as of: September 30, 2022 December 31, 2021 Principal Interest Rate Principal Interest Rate Included in Notes receivable and due from affiliates on the Condensed Consolidated Balance Sheets Affiliated receivables and other notes $ 11,179 — % $ 9,753 — % Notes receivable and due from affiliates $ 11,179 $ 9,753 Included in Notes payable and due to affiliates on the Condensed Consolidated Balance Sheets RHI/ATI Debenture $ 21,500 8.00 % $ 21,500 8.00 % Affiliated payables 8,965 — % 12,150 — % Notes payable and due to affiliates $ 30,465 $ 33,650 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Net Hedging Gains | Net hedging gains were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Hedging gains (1) $ 2,674,875 $ 652,337 $ 5,654,497 $ 2,020,328 (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, 2022: IRLCs, net of loan funding probability (1) $ 8,387,274 $ 7,743 $ — Forward commitments (2) $ 15,798,620 $ 690,396 $ 84,699 Balance at December 31, 2021: IRLCs, net of loan funding probability (1) $ 21,194,326 $ 538,861 $ — Forward commitments (2) $ 36,476,871 $ 17,337 $ 19,911 (1) IRLCs are also discussed in Note 9, Commitments, Contingencies, and Guarantees. (2) Includes the fair value and net 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 may pledge cash or receive cash from counterparties related to these forward commitments. Pledged cash to counterparties is classified in Other assets in the Condensed Consolidated Balance Sheets. Pledged cash received from counterparties is recorded in Cash and cash equivalents, and the related liability is 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, 2022: Forward commitments $ 1,170,954 $ (480,558) $ 690,396 Balance at December 31, 2021: Forward commitments $ 50,225 $ (32,888) $ 17,337 Offsetting of Derivative Liabilities Balance at September 30, 2022: Forward commitments $ (123,175) $ 38,476 $ (84,699) Balance at December 31, 2021: Forward commitments $ (54,922) $ 35,011 $ (19,911) |
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 may pledge cash or receive cash from counterparties related to these forward commitments. Pledged cash to counterparties is classified in Other assets in the Condensed Consolidated Balance Sheets. Pledged cash received from counterparties is recorded in Cash and cash equivalents, and the related liability is 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, 2022: Forward commitments $ 1,170,954 $ (480,558) $ 690,396 Balance at December 31, 2021: Forward commitments $ 50,225 $ (32,888) $ 17,337 Offsetting of Derivative Liabilities Balance at September 30, 2022: Forward commitments $ (123,175) $ 38,476 $ (84,699) Balance at December 31, 2021: Forward commitments $ (54,922) $ 35,011 $ (19,911) |
Commitments, Contingencies, a_2
Commitments, Contingencies, and Guarantees (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of IRLC Unpaid Principal Balance | The UPB of IRLCs was as follows: September 30, 2022 December 31, 2021 Fixed Rate Variable Rate Fixed Rate Variable Rate IRLCs $ 11,266,246 $ 690,400 $ 25,937,777 $ 1,239,762 |
Segments (Tables)
Segments (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Key Operating Data for Business Segments | Key operating data for our business segments for the periods ended: Three Months Ended September 30, 2022 Direct to Partner Segments All Other Total Revenues Gain on sale $ 486,018 $ 75,110 $ 561,128 $ 4,883 $ 566,011 Interest income 61,133 33,871 95,004 749 95,753 Interest expense on funding facilities (29,767) (16,401) (46,168) (5) (46,173) Servicing fee income 363,279 — 363,279 932 364,211 Changes in fair value of MSRs 150,304 — 150,304 — 150,304 Other income 83,363 5,631 88,994 75,586 164,580 Total U.S. GAAP Revenue, net 1,114,330 98,211 1,212,541 82,145 1,294,686 Less: Increase in MSRs due to valuation assumptions (net of hedges) (406,485) — (406,485) — (406,485) Adjusted revenue 707,845 98,211 806,056 82,145 888,201 Directly attributable expenses 558,760 86,742 645,502 82,240 727,742 Contribution margin $ 149,085 $ 11,469 $ 160,554 $ (95) $ 160,459 Nine Months Ended September 30, 2022 Direct to Consumer Partner Network Segments Total All Other Total Revenues Gain on sale $ 2,348,573 $ 490,625 $ 2,839,198 $ 17,436 $ 2,856,634 Interest income 169,679 93,586 263,265 2,225 265,490 Interest expense on funding facilities (84,198) (46,369) (130,567) (9) (130,576) Servicing fee income 1,085,557 — 1,085,557 2,447 1,088,004 Changes in fair value of MSRs 592,162 — 592,162 — 592,162 Other income 343,300 29,310 372,610 313,377 685,987 Total U.S. GAAP Revenue, net 4,455,073 567,152 5,022,225 335,476 5,357,701 Less: Increase in MSRs due to valuation assumptions (net of hedges) (1,412,670) — (1,412,670) — (1,412,670) Adjusted revenue 3,042,403 567,152 3,609,555 335,476 3,945,031 Directly attributable expenses 2,037,401 302,477 2,339,878 305,479 2,645,357 Contribution margin $ 1,005,002 $ 264,675 $ 1,269,677 $ 29,997 $ 1,299,674 Three Months Ended September 30, 2021 Direct to Consumer Partner Network Segments Total All Other Total Revenues Gain on sale $ 2,241,633 $ 402,649 $ 2,644,282 $ 9,931 $ 2,654,213 Interest income 77,112 51,815 128,927 1,036 129,963 Interest expense on funding facilities (43,528) (29,248) (72,776) (2) (72,778) Servicing fee income 333,653 — 333,653 695 334,348 Changes in fair value of MSRs (341,361) — (341,361) — (341,361) Other income 234,381 31,301 265,682 144,663 410,345 Total U.S. GAAP Revenue, net 2,501,890 456,517 2,958,407 156,323 3,114,730 Plus: Decrease in MSRs due to valuation assumptions (net of hedges) 47,514 — 47,514 — 47,514 Adjusted revenue 2,549,404 456,517 3,005,921 156,323 3,162,244 Directly attributable expenses 927,897 176,246 1,104,143 67,892 1,172,035 Contribution margin $ 1,621,507 $ 280,271 $ 1,901,778 $ 88,431 $ 1,990,209 Nine Months Ended September 30, 2021 Direct to Consumer Partner Network Segments Total All Other Total Revenues Gain on sale $ 7,155,872 $ 1,374,729 $ 8,530,601 $ 17,543 $ 8,548,144 Interest income 188,269 121,097 309,366 2,487 311,853 Interest expense on funding facilities (124,942) (80,010) (204,952) (48) (205,000) Servicing fee income 967,993 — 967,993 2,065 970,058 Changes in fair value of MSRs (556,201) — (556,201) — (556,201) Other income 769,152 82,306 851,458 401,387 1,252,845 Total U.S. GAAP Revenue, net 8,400,143 1,498,122 9,898,265 423,434 10,321,699 Less: Increase in MSRs due to valuation assumptions (net of hedges) (329,608) — (329,608) — (329,608) Adjusted revenue 8,070,535 1,498,122 9,568,657 423,434 9,992,091 Directly attributable expenses 2,808,340 532,087 3,340,427 196,805 3,537,232 Contribution margin $ 5,262,195 $ 966,035 $ 6,228,230 $ 226,629 $ 6,454,859 |
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, 2022 2021 2022 2021 Contribution margin, excluding change in MSRs due to valuation assumptions $ 160,459 $ 1,990,209 $ 1,299,674 $ 6,454,859 Increase (decrease) in MSRs due to valuation assumptions (net of hedges) 406,485 (47,514) 1,412,670 329,608 Contribution margin, including change in MSRs due to valuation assumptions 566,944 1,942,695 2,712,344 6,784,467 Less expenses not allocated to segments : Salaries, commissions and team member benefits 243,164 237,410 777,847 694,421 General and administrative expenses 141,048 224,597 495,958 595,283 Depreciation and amortization 24,211 19,577 70,033 55,470 Interest and amortization expense on non-funding debt 38,316 34,163 115,263 104,772 Other expenses 13,850 1,259 5,914 4,965 Income before income taxes $ 106,355 $ 1,425,689 $ 1,247,329 $ 5,329,556 |
Non-controlling Interests (Tabl
Non-controlling Interests (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Noncontrolling Interest [Abstract] | |
Schedule of Non-controlling Interests | The following table summarizes the ownership of Holdings Units in Holdings as of September 30, 2022 and December 31, 2021: September 30, 2022 December 31, 2021 Holdings Units Ownership Percentage Holdings Units Ownership Percentage Rocket Companies, Inc.'s ownership of Holdings Units 121,386,911 6.16 % 126,437,703 6.40 % Holdings Units held by our Chairman 1,101,822 0.06 % 1,101,822 0.06 % Holdings Units held by RHI 1,847,777,661 93.78 % 1,847,777,661 93.54 % Balance at end of period 1,970,266,394 100.00 % 1,975,317,186 100.00 % |
Share-based Compensation (Table
Share-based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Share-based Compensation Expense | The components of share-based compensation expense included in Salaries, commissions and team member benefits on the Condensed Consolidated Statements of Income and Comprehensive Income is as follows: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Rocket Companies, Inc. sponsored plans Restricted stock units $ 45,707 $ 26,615 $ 132,301 $ 81,179 Stock options 9,086 10,257 27,932 30,155 Team Member Stock Purchase Plan 1,079 2,354 4,811 7,638 Subtotal Rocket Companies, Inc. sponsored plans $ 55,872 $ 39,226 $ 165,044 $ 118,972 RHI equity 1,714 1,372 15,746 4,117 Subsidiary plans 176 281 524 811 Total share-based compensation expense $ 57,762 $ 40,879 $ 181,314 $ 123,900 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Calculation of Basic and Diluted Earnings per Share | The following table sets forth the calculation of the basic and diluted earnings per share for the period: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Net income $ 96,224 $ 1,392,859 $ 1,192,588 $ 5,206,847 Net income attributable to non-controlling interest (89,314) (1,317,522) (1,128,551) (4,946,688) Net income attributable to Rocket Companies 6,910 75,337 64,037 260,159 Add: Reallocation of Net income attributable to vested, undelivered stock awards 3 39 38 141 Net income attributable to common shareholders $ 6,913 $ 75,376 $ 64,075 $ 260,300 Numerator: Net income attributable to Class A common shareholders - basic $ 6,913 $ 75,376 $ 64,075 $ 260,300 Add: Reallocation of net income attributable to dilutive impact of pro-forma conversion of Class D shares to Class A shares (1) 75,277 991,852 866,499 — Add: Reallocation of net income attributable to dilutive impact of share-based compensation awards (2) 101 2,294 1,396 10,254 Net income attributable to Class A common shareholders - diluted $ 82,291 $ 1,069,522 $ 931,970 $ 270,554 Denominator: Weighted average shares of Class A common stock outstanding - basic 119,020,520 137,664,471 120,156,494 129,902,253 Add: Dilutive impact of conversion of Class D shares to Class A shares 1,848,879,483 1,848,879,483 1,848,879,483 — Add: Dilutive impact of share-based compensation awards (3) 2,765,764 4,284,397 3,227,291 5,490,417 Weighted average shares of Class A common stock outstanding - diluted 1,970,665,767 1,990,828,351 1,972,263,268 135,392,670 Earnings per share of Class A common stock outstanding - basic $ 0.06 $ 0.55 $ 0.53 $ 2.00 Earnings per share of Class A common stock outstanding - diluted $ 0.04 $ 0.54 $ 0.47 $ 2.00 (1) Net income calculated using the estimated annual effective tax rate of Rocket Companies, Inc. (2) Reallocation of net income attributable to dilutive impact of share-based compensation awards for the three months ended September 30, 2022 and 2021 comprised of $89 and $2,223 related to restricted stock units and $12 and $71 related to TMSPP, respectively. Reallocation of net income attributable to dilutive impact of share-based compensation awards for the nine months ended September 30, 2022 and 2021 comprised of $1,283 and $10,027 related to restricted stock units and $113 and $227 related to TMSPP, respectively. |
Business, Basis of Presentati_4
Business, Basis of Presentation and Accounting Policies - Narrative (Details) $ / shares in Units, $ in Thousands | 9 Months Ended | |||||
Nov. 01, 2022 USD ($) | Feb. 24, 2022 USD ($) $ / shares | Dec. 23, 2021 USD ($) | Feb. 25, 2021 USD ($) $ / shares | Sep. 30, 2022 USD ($) reporting_unit segment $ / shares | Dec. 31, 2021 USD ($) $ / shares | |
Basis of Presentation [Line Items] | ||||||
Number of segments | segment | 2 | |||||
Subsequent event | ||||||
Basis of Presentation [Line Items] | ||||||
Share repurchase program authorization | $ 1,000,000 | |||||
Share repurchase program period in effect | 2 years | |||||
Holdings | ||||||
Basis of Presentation [Line Items] | ||||||
Management and voting interest as managing member in Holdings (in percent) | 100% | |||||
Holdings | ||||||
Basis of Presentation [Line Items] | ||||||
Cash distribution | $ 2,000,000 | $ 2,200,000 | ||||
Rocket Money (formerly known as Truebill Inc) | ||||||
Basis of Presentation [Line Items] | ||||||
Cash consideration | $ 1,200,000 | |||||
Goodwill | $ 1,100,000 | $ 1,100,000 | ||||
Number of reporting units | reporting_unit | 2 | |||||
Tax deductible goodwill | $ 0 | |||||
Class A common stock | ||||||
Basis of Presentation [Line Items] | ||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.00001 | $ 0.00001 | ||||
Common stock dividend declared (in dollars per share) | $ / shares | $ 1.01 | $ 1.11 |
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, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Closing fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | $ 24,534 | $ 120,381 | $ 139,441 | $ 395,509 |
Appraisal revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | 14,946 | 23,222 | 52,262 | 68,792 |
Subscription revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | 32,649 | 84,578 | ||
Real estate network referral fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | 12,647 | 16,068 | 38,916 | 39,778 |
Contact center | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | 2,349 | 10,847 | 15,506 | 34,769 |
Professional services fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | 3,030 | 3,434 | 9,140 | 10,181 |
Core Digital Media lead generation revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | $ 1,392 | $ 7,784 | $ 8,306 | $ 22,549 |
Business, Basis of Presentati_6
Business, Basis of Presentation and Accounting Policies - Cash, Cash Equivalents, and Restricted Cash Reconciliation (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2020 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Cash and cash equivalents | $ 825,926 | $ 2,131,174 | $ 2,233,667 | |
Restricted cash | 65,718 | 80,423 | 145,978 | |
Total cash, cash equivalents, and restricted cash in the statement of cash flows | 891,644 | $ 2,211,597 | 2,379,645 | $ 2,054,103 |
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, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Assets: | ||||||
Mortgage loans held for sale | $ 9,123,110 | $ 19,323,568 | ||||
MSRs | 7,260,066 | $ 6,657,758 | 5,385,613 | $ 4,701,045 | $ 4,644,172 | $ 2,862,685 |
Liabilities: | ||||||
Derivative Liability | 84,699 | 19,911 | ||||
IRLCs | ||||||
Assets: | ||||||
Derivative Asset | 7,743 | 538,861 | ||||
Forward commitments | ||||||
Assets: | ||||||
Derivative Asset | 690,396 | 17,337 | ||||
Recurring | ||||||
Assets: | ||||||
Mortgage loans held for sale | 9,123,110 | 19,323,568 | ||||
MSRs | 7,260,066 | 5,385,613 | ||||
Total assets | 17,081,315 | 25,265,379 | ||||
Liabilities: | ||||||
Total liabilities | 84,699 | 19,911 | ||||
Recurring | IRLCs | ||||||
Assets: | ||||||
Derivative Asset | 7,743 | 538,861 | ||||
Recurring | Forward commitments | ||||||
Assets: | ||||||
Derivative Asset | 690,396 | 17,337 | ||||
Liabilities: | ||||||
Derivative Liability | 84,699 | 19,911 | ||||
Recurring | Level 1 | ||||||
Assets: | ||||||
Mortgage loans held for sale | 0 | 0 | ||||
MSRs | 0 | 0 | ||||
Total assets | 0 | 0 | ||||
Liabilities: | ||||||
Total liabilities | 0 | 0 | ||||
Recurring | Level 1 | IRLCs | ||||||
Assets: | ||||||
Derivative Asset | 0 | 0 | ||||
Recurring | Level 1 | Forward commitments | ||||||
Assets: | ||||||
Derivative Asset | 0 | 0 | ||||
Liabilities: | ||||||
Derivative Liability | 0 | 0 | ||||
Recurring | Level 2 | ||||||
Assets: | ||||||
Mortgage loans held for sale | 7,911,451 | 17,014,202 | ||||
MSRs | 0 | 0 | ||||
Total assets | 8,601,847 | 17,031,539 | ||||
Liabilities: | ||||||
Total liabilities | 84,699 | 19,911 | ||||
Recurring | Level 2 | IRLCs | ||||||
Assets: | ||||||
Derivative Asset | 0 | 0 | ||||
Recurring | Level 2 | Forward commitments | ||||||
Assets: | ||||||
Derivative Asset | 690,396 | 17,337 | ||||
Liabilities: | ||||||
Derivative Liability | 84,699 | 19,911 | ||||
Recurring | Level 3 | ||||||
Assets: | ||||||
Mortgage loans held for sale | 1,211,659 | 2,309,366 | ||||
MSRs | 7,260,066 | 5,385,613 | ||||
Total assets | 8,479,468 | 8,233,840 | ||||
Liabilities: | ||||||
Total liabilities | 0 | 0 | ||||
Recurring | Level 3 | IRLCs | ||||||
Assets: | ||||||
Derivative Asset | 7,743 | 538,861 | ||||
Recurring | 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, 2022 | Dec. 31, 2021 |
Dealer pricing | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Mortgage loans held for sale | 0.68 | 0.89 |
Dealer pricing | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Mortgage loans held for sale | 0.97 | 1.03 |
Dealer pricing | Weighted Average | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Mortgage loans held for sale | 0.95 | 0.99 |
Loan funding probability | IRLCs | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
IRLCs | 0 | 0 |
Loan funding probability | IRLCs | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
IRLCs | 1 | 1 |
Loan funding probability | IRLCs | Weighted Average | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
IRLCs | 0.70 | 0.78 |
Discount rate | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
MSRs | 0.090 | 0.090 |
Discount rate | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
MSRs | 0.120 | 0.120 |
Discount rate | Weighted Average | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
MSRs | 0.094 | 0.095 |
Conditional prepayment rate | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
MSRs | 0.062 | 0.068 |
Conditional prepayment rate | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
MSRs | 0.086 | 0.369 |
Conditional prepayment rate | Weighted Average | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
MSRs | 0.069 | 0.087 |
Fair Value Measurements - Recon
Fair Value Measurements - Reconciliation of Level 3 Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Loans Held for Sale | ||||
Reconciliation of Level 3 Assets: | ||||
Beginning balance | $ 1,557,784 | $ 2,579,313 | $ 2,309,366 | $ 579,666 |
Transfers in | 197,851 | 461,014 | 1,020,274 | 3,244,577 |
Transfers out/principal reductions | (481,878) | (378,302) | (1,963,939) | (1,159,712) |
Net transfers and revaluation losses | 0 | 0 | 0 | 0 |
Total gain (losses) included in net income | (62,098) | 2,376 | (154,042) | (130) |
Ending balance | 1,211,659 | 2,664,401 | 1,211,659 | 2,664,401 |
IRLCs | ||||
Reconciliation of Level 3 Assets: | ||||
Beginning balance | 309,497 | 907,978 | 538,861 | 1,897,194 |
Transfers in | 0 | 0 | 0 | 0 |
Transfers out/principal reductions | 0 | 0 | 0 | 0 |
Net transfers and revaluation losses | (301,754) | (113,720) | (531,118) | (1,102,936) |
Total gain (losses) included in net income | 0 | 0 | 0 | 0 |
Ending balance | $ 7,743 | $ 794,258 | $ 7,743 | $ 794,258 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value Option for Mortgage Loans Held for Sale (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Fair Value Disclosures [Abstract] | ||
Mortgage loans held for sale, at fair value | $ 9,123,110 | $ 19,323,568 |
Principal Amount Due Upon Maturity | 9,518,578 | 19,018,552 |
Difference | $ (395,468) | $ 305,016 |
Fair Value Measurements - Liabi
Fair Value Measurements - Liabilities not Recorded at Fair Value on Recurring or Nonrecurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Senior Notes, net | $ 4,026,600 | $ 4,022,491 |
Carrying Amount | 2026 Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Senior Notes, net | 1,140,860 | 1,139,146 |
Carrying Amount | 2028 Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Senior Notes, net | 61,297 | 61,197 |
Carrying Amount | 2029 Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Senior Notes, net | 743,564 | 742,812 |
Carrying Amount | 2031 Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Senior Notes, net | 1,238,620 | 1,237,605 |
Carrying Amount | 2033 Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Senior Notes, net | 842,259 | 841,731 |
Estimated Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Senior Notes, net | 3,063,630 | 4,100,381 |
Estimated Fair Value | 2026 Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Senior Notes, net | 945,599 | 1,151,932 |
Estimated Fair Value | 2028 Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Senior Notes, net | 51,882 | 64,251 |
Estimated Fair Value | 2029 Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Senior Notes, net | 572,318 | 752,805 |
Estimated Fair Value | 2031 Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Senior Notes, net | 912,813 | 1,273,675 |
Estimated Fair Value | 2033 Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Senior Notes, net | $ 581,018 | $ 857,718 |
Mortgage Servicing Rights - Cha
Mortgage Servicing Rights - Changes to MSR Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Changes to MSR Assets | ||||
Fair value, beginning of period | $ 6,657,758 | $ 4,644,172 | $ 5,385,613 | $ 2,862,685 |
MSRs originated | 426,278 | 907,242 | 1,682,366 | 2,937,517 |
MSRs sales | 0 | (572,218) | (474,022) | (671,278) |
MSRs purchases | 0 | 38,281 | 0 | 38,281 |
Changes in fair value: | ||||
Due to changes in valuation model inputs or assumptions | 432,211 | (16,123) | 1,484,039 | 426,111 |
Due to collection/realization of cash flows | (256,181) | (300,309) | (817,930) | (892,271) |
Total changes in fair value | 176,030 | (316,432) | 666,109 | (466,160) |
Fair value, end of period | $ 7,260,066 | $ 4,701,045 | $ 7,260,066 | $ 4,701,045 |
Mortgage Servicing Rights - Nar
Mortgage Servicing Rights - Narrative (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Transfers and Servicing [Abstract] | ||
UPB of mortgage loans serviced | $ 495,614,634 | $ 485,087,214 |
Delinquent loans as a percentage of total portfolio (in percent) | 1.11% | |
Delinquent loans as a percentage of total portfolio, excluding clients in forbearance plans (in percent) | 0.76% |
Mortgage Servicing Rights - Fai
Mortgage Servicing Rights - Fair Value Assumptions (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Transfers and Servicing [Abstract] | ||
Discount rate | 9.40% | 9.50% |
Prepayment speeds | 6.90% | 8.70% |
Life (in years) | 8 years 1 month 6 days | 7 years 3 months |
Mortgage Servicing Rights - Dis
Mortgage Servicing Rights - Discount Rate and Prepayment Speeds at Two Different Data Points (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Discount Rate | ||
100 BPS Adverse Change | $ (311,872) | $ (232,658) |
200 BPS Adverse Change | (599,295) | (435,181) |
Prepayment Speeds | ||
10% Adverse Change | (247,595) | (198,153) |
20% Adverse Change | $ (373,794) | $ (372,018) |
Mortgage Loans Held for Sale (D
Mortgage Loans Held for Sale (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Mortgage loans held for sale | ||
Balance at the beginning of period | $ 19,323,568 | $ 22,865,106 |
Disbursements of mortgage loans held for sale | 115,269,087 | 275,516,411 |
Proceeds from sales of mortgage loans held for sale | (126,601,866) | (281,117,441) |
Gain on sale of mortgage loans excluding fair value of other financial instruments, net | 1,132,321 | 5,987,860 |
Balance at the end of period | $ 9,123,110 | $ 23,251,936 |
Mortgage loans held for sale average holding period | 44 days |
Borrowings - Narrative (Details
Borrowings - Narrative (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | |
Debt Instrument [Line Items] | |||
Self-funding | $ 3,156,856 | ||
Cash on-hand | 825,926 | $ 2,131,174 | $ 2,233,667 |
Cash | $ 3,982,782 | ||
Funding facilities and Other financing facilities | Minimum | |||
Debt Instrument [Line Items] | |||
Commitment fees (in percent) | 0% | ||
Funding facilities and Other financing facilities | Maximum | |||
Debt Instrument [Line Items] | |||
Commitment fees (in percent) | 0.50% |
Borrowings - Funding Facilities
Borrowings - Funding Facilities (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | Nov. 09, 2022 | |
Line of Credit Facility [Line Items] | |||
Total Funding Facilities | $ 4,909,369,000 | $ 12,751,592,000 | |
Funding Facilities | |||
Line of Credit Facility [Line Items] | |||
Line Amount | 20,900,000,000 | ||
Committed Line Amount | $ 2,900,000,000 | ||
Funding Facilities | Base rate | Minimum | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 1% | 1% | |
Funding Facilities | Base rate | Maximum | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 1.85% | 2.25% | |
Funding Facilities | MRA funding | |||
Line of Credit Facility [Line Items] | |||
Line Amount | $ 13,900,000,000 | ||
Committed Line Amount | 2,900,000,000 | ||
Outstanding Balance | 3,754,494,000 | $ 9,486,726,000 | |
Funding Facilities | Master Repurchase Agreement Due Oct 20 2023 | |||
Line of Credit Facility [Line Items] | |||
Line Amount | 1,000,000,000 | ||
Committed Line Amount | 100,000,000 | ||
Outstanding Balance | 96,409,000 | 249,119,000 | |
Funding Facilities | Master Repurchase Agreement Due Dec 01 2022 | |||
Line of Credit Facility [Line Items] | |||
Line Amount | 1,500,000,000 | ||
Committed Line Amount | 250,000,000 | ||
Outstanding Balance | 608,858,000 | 1,328,727,000 | |
Funding Facilities | Master Repurchase Agreement Due Aug 9 2024 | |||
Line of Credit Facility [Line Items] | |||
Line Amount | 2,000,000,000 | ||
Committed Line Amount | 250,000,000 | ||
Outstanding Balance | 501,293,000 | 1,714,806,000 | |
Funding Facilities | Master Repurchase Agreement Due July 26 2023 | |||
Line of Credit Facility [Line Items] | |||
Line Amount | 2,000,000,000 | ||
Committed Line Amount | 950,000,000 | ||
Outstanding Balance | $ 1,055,708,000 | 1,479,128,000 | |
Facility term | 12 months | ||
Extension term | 3 months | ||
Timing option for extending facility | 3 months | ||
Funding Facilities | Master Repurchase Agreement Due Jan 26 2023 | Subsequent event | |||
Line of Credit Facility [Line Items] | |||
Line Amount | $ 800,000 | ||
Funding Facilities | Master Repurchase Agreement Due May 4 2023 | |||
Line of Credit Facility [Line Items] | |||
Line Amount | $ 2,000,000,000 | ||
Committed Line Amount | 250,000,000 | ||
Outstanding Balance | 371,857,000 | 2,264,954,000 | |
Funding Facilities | Master Repurchase Agreement Due May 4 2023 | Subsequent event | |||
Line of Credit Facility [Line Items] | |||
Line Amount | 1,500,000,000 | ||
Committed Line Amount | 1,000,000 | ||
Funding Facilities | Master Repurchase Agreement Due Apr 20 2023 | Subsequent event | |||
Line of Credit Facility [Line Items] | |||
Committed Line Amount | $ 1,500,000,000 | ||
Funding Facilities | Master Repurchase Agreement Due Sep 9 2024 | |||
Line of Credit Facility [Line Items] | |||
Line Amount | 1,500,000,000 | ||
Committed Line Amount | 250,000,000 | ||
Outstanding Balance | 93,964,000 | 498,335,000 | |
Funding Facilities | Master Repurchase Agreement Due Sep 15 2023 | |||
Line of Credit Facility [Line Items] | |||
Line Amount | 900,000,000 | ||
Committed Line Amount | 250,000,000 | ||
Outstanding Balance | 269,130,000 | 542,846,000 | |
Funding Facilities | Master Repurchase Agreement Due Sep 22 2023 Two | |||
Line of Credit Facility [Line Items] | |||
Line Amount | 1,250,000,000 | ||
Committed Line Amount | 250,000,000 | ||
Outstanding Balance | 265,188,000 | 539,257,000 | |
Funding Facilities | Master Repurchase Agreement Due Sep 27 2024 | |||
Line of Credit Facility [Line Items] | |||
Line Amount | 750,000,000 | ||
Committed Line Amount | 100,000,000 | ||
Outstanding Balance | 230,164,000 | 616,165,000 | |
Funding Facilities | Master Repurchase Agreement Due Dec 16 2022 | |||
Line of Credit Facility [Line Items] | |||
Line Amount | 1,000,000,000 | ||
Committed Line Amount | 250,000,000 | ||
Outstanding Balance | 261,923,000 | 253,389,000 | |
Funding Facilities | Early Funding | |||
Line of Credit Facility [Line Items] | |||
Line Amount | 7,000,000,000 | ||
Committed Line Amount | 0 | ||
Early Funding Facilities | 1,154,875,000 | 3,264,866,000 | |
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 | 478,819,000 | 2,071,154,000 | |
Funding Facilities | Early Funding Facility, two | |||
Line of Credit Facility [Line Items] | |||
Line Amount | 3,000,000,000 | ||
Committed Line Amount | 0 | ||
Early Funding Facilities | $ 676,056,000 | $ 1,193,712,000 | |
Timing for review of agreement | 90 days |
Borrowings - Other Financing Fa
Borrowings - Other Financing Facilities (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Line of Credit Facility [Line Items] | ||
Line of Credit Financing Facilities | $ 0 | $ 75,000,000 |
Early Buy out Financing Facilities | 814,458,000 | 1,896,784,000 |
Line of Credit Financing Facilities | ||
Line of Credit Facility [Line Items] | ||
Line Amount | 4,800,000,000 | |
Committed Line Amount | 1,250,000,000 | |
Line of Credit Financing Facilities | $ 0 | $ 75,000,000 |
Line of Credit Financing Facilities | Base rate | Minimum | ||
Line of Credit Facility [Line Items] | ||
Basis spread on variable rate | 1.45% | |
Line of Credit Financing Facilities | Base rate | Maximum | ||
Line of Credit Facility [Line Items] | ||
Basis spread on variable rate | 4% | |
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 Jul 31 2025, RHI | Affiliated entity | ||
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 | MSRs line of credit, maturing Oct 20 2023 | ||
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 | MSRs line of credit, maturing Sep 22 2024 | ||
Line of Credit Facility [Line Items] | ||
Line Amount | 1,500,000,000 | |
Committed Line Amount | 250,000,000 | |
Line of Credit Financing Facilities | 0 | 0 |
Line of Credit | Mortgage serving rights line of credit | ||
Line of Credit Facility [Line Items] | ||
Line Amount | 0 | |
Committed Line Amount | 0 | |
Line of Credit Financing Facilities | 0 | 75,000,000 |
Revolving Credit Facility | Revolving credit facility due Aug 10 2025 | ||
Line of Credit Facility [Line Items] | ||
Line Amount | 1,000,000,000 | |
Committed Line Amount | 1,000,000,000 | |
Line of Credit Financing Facilities | 0 | $ 0 |
Early Buyout Financing Facility | ||
Line of Credit Facility [Line Items] | ||
Line Amount | 1,500,000,000 | |
Committed Line Amount | $ 0 | |
Early Buyout Financing Facility | Base rate | Minimum | ||
Line of Credit Facility [Line Items] | ||
Basis spread on variable rate | 1.45% | |
Early Buyout Financing Facility | Base rate | Maximum | ||
Line of Credit Facility [Line Items] | ||
Basis spread on variable rate | 4% |
Borrowings - Unsecured Senior N
Borrowings - Unsecured Senior Notes (Details) - Unsecured Senior Notes - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Outstanding Principal | $ 4,061,985 | $ 4,061,985 |
Weighted Average Interest Rate | 3.59% | 3.59% |
2026 Senior Notes | ||
Debt Instrument [Line Items] | ||
Interest Rate | 2.875% | |
Outstanding Principal | $ 1,150,000 | $ 1,150,000 |
Unamortized debt issuance costs | $ 9,140 | 10,854 |
2028 Senior Notes | ||
Debt Instrument [Line Items] | ||
Interest Rate | 5.25% | |
Outstanding Principal | $ 61,985 | 61,985 |
Unamortized debt issuance costs | 376 | 430 |
Unamortized discounts | $ 313 | 358 |
2029 Senior Notes | ||
Debt Instrument [Line Items] | ||
Interest Rate | 3.625% | |
Outstanding Principal | $ 750,000 | 750,000 |
Unamortized debt issuance costs | $ 6,436 | 7,188 |
2031 Senior Notes | ||
Debt Instrument [Line Items] | ||
Interest Rate | 3.875% | |
Outstanding Principal | $ 1,250,000 | 1,250,000 |
Unamortized debt issuance costs | $ 11,380 | 12,395 |
2033 Senior Notes | ||
Debt Instrument [Line Items] | ||
Interest Rate | 4% | |
Outstanding Principal | $ 850,000 | 850,000 |
Unamortized debt issuance costs | $ 7,741 | $ 8,269 |
Transactions with Related Par_3
Transactions with Related Parties - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 16, 2021 | Jul. 31, 2020 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Related Party Transaction [Line Items] | |||||||
Lines of credit | $ 0 | $ 0 | $ 75,000,000 | ||||
Notes receivable and due from affiliates | 11,179,000 | 11,179,000 | 9,753,000 | ||||
Marketing and advertising expenses | 210,701,000 | $ 316,471,000 | 770,281,000 | $ 943,999,000 | |||
RHI Agreements | |||||||
Related Party Transaction [Line Items] | |||||||
Notes receivable and due from affiliates | 42,000,000 | 42,000,000 | |||||
Affiliated entity | |||||||
Related Party Transaction [Line Items] | |||||||
Surplus debenture with related party | 21,500,000 | $ 21,500,000 | $ 21,500,000 | ||||
Interest rate (in percent) | 8% | 8% | |||||
Notes receivable and due from affiliates | 11,179,000 | $ 11,179,000 | $ 9,753,000 | ||||
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 | Unsecured line of credit, maturing Jul 31 2025, RHI | |||||||
Related Party Transaction [Line Items] | |||||||
Line amount | 100,000,000 | 100,000,000 | |||||
Lines of credit | 0 | 0 | 0 | ||||
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 | ||||||
Lines of credit | 0 | 0 | 0 | ||||
Aggregate repayments | 0 | 750,000,000 | 762,000 | 1,750,843,000 | |||
Interest accrued | 762,000 | 843,000 | |||||
Interest due | 0 | 250,000 | 0 | 250,000 | |||
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 | ||||||
Lines of credit | 0 | 0 | 0 | ||||
Draws on line of credit | 0 | $ 0 | |||||
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] | |||||||
Aggregate repayments | 250,000 | 750,000 | 250,000 | 750,000 | |||
Interest accrued | 434,000 | 1,286,000 | 434,000 | 1,286,000 | |||
Surplus debenture with related party | 21,500,000 | $ 21,500,000 | |||||
Interest rate (in percent) | 8% | ||||||
Affiliated entity | Services, products and other transactions | |||||||
Related Party Transaction [Line Items] | |||||||
Revenue from related parties | 3,206,000 | 3,494,000 | $ 9,437,000 | 10,592,000 | |||
General and administrative expenses from transactions with related parties | 19,259,000 | 48,861,000 | 86,155,000 | 121,599,000 | |||
Affiliated entity | Promotional sponsorships | |||||||
Related Party Transaction [Line Items] | |||||||
Marketing and advertising expenses | 2,169,000 | 2,180,000 | 6,773,000 | 6,850,000 | |||
Affiliated entity | Bedrock lease agreements | |||||||
Related Party Transaction [Line Items] | |||||||
Expenses from transaction with related parties | $ 17,864,000 | $ 16,189,000 | $ 55,419,000 | $ 51,001,000 |
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, 2022 | Dec. 31, 2021 | |
Included in Notes receivable and due from affiliates on the Condensed Consolidated Balance Sheets | ||
Notes receivable and due from affiliates | $ 11,179 | $ 9,753 |
Included in Notes payable and due to affiliates on the Condensed Consolidated Balance Sheets | ||
Notes payable and due to affiliates | 30,465 | 33,650 |
Affiliated entity | ||
Included in Notes receivable and due from affiliates on the Condensed Consolidated Balance Sheets | ||
Affiliated receivables and other notes | 11,179 | 9,753 |
Notes receivable and due from affiliates | 11,179 | 9,753 |
Included in Notes payable and due to affiliates on the Condensed Consolidated Balance Sheets | ||
RHI/ATI Debenture | 21,500 | 21,500 |
Affiliated payables | 8,965 | 12,150 |
Notes payable and due to affiliates | $ 30,465 | $ 33,650 |
Interest rate (in percent) | 8% | 8% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Taxes [Line Items] | |||||
Income tax expense | $ 10,131 | $ 32,830 | $ 54,741 | $ 122,709 | |
Income before income taxes | 106,355 | 1,425,689 | $ 1,247,329 | 5,329,556 | |
Percentage of applicable tax savings payable per tax receivable agreement | 90% | ||||
Percentage of applicable tax savings retained by the Company per tax receivable agreement | 10% | ||||
Increase in Tax receivable agreement liability | $ 119,456 | ||||
Offsetting amount to additional paid-in capital | 985 | ||||
Payments pursuant to tax receivable agreement | 0 | $ 40,721 | |||
Tax distributions to holders of Holdings Units | $ 0 | $ 395,057 | $ 166,698 | $ 1,801,756 | |
Investment in partnership | |||||
Income Taxes [Line Items] | |||||
Increase in deferred tax asset | 123,587 | ||||
Increase in valuation allowance | $ 3,146 | ||||
Class A common stock | |||||
Income Taxes [Line Items] | |||||
Shares received in exchange of paired interests (in shares) | 20,200,000 |
Derivative Financial Instrume_3
Derivative Financial Instruments - Net Hedging Gains (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Forward commitments | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Hedging gains | $ 2,674,875 | $ 652,337 | $ 5,654,497 | $ 2,020,328 |
Derivative Financial Instrume_4
Derivative Financial Instruments - Notional and Fair Values (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Derivative [Line Items] | ||
Derivative Liability | $ 84,699 | $ 19,911 |
IRLCs, net of loan funding probability | ||
Derivative [Line Items] | ||
Derivative Asset | 7,743 | 538,861 |
Derivative Liability | 0 | 0 |
Forward commitements | ||
Derivative [Line Items] | ||
Derivative Asset | 690,396 | 17,337 |
Derivative Liability | 84,699 | 19,911 |
Not Designated | IRLCs, net of loan funding probability | ||
Derivative [Line Items] | ||
Notional Value | 8,387,274 | 21,194,326 |
Not Designated | Forward commitements | ||
Derivative [Line Items] | ||
Notional Value | $ 15,798,620 | $ 36,476,871 |
Derivative Financial Instrume_5
Derivative Financial Instruments - Gross Amounts Recognized Subject to Master Netting Agreements (Details) - Not Designated - Forward commitments - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Offsetting Assets [Line Items] | ||
Gross Amount of Recognized Assets | $ 1,170,954 | $ 50,225 |
Gross Amounts Offset in the Condensed Consolidated Balance Sheets | (480,558) | (32,888) |
Net Assets Presented in the Condensed Consolidated Balance Sheets | 690,396 | 17,337 |
Gross Amount of Recognized Liabilities | (123,175) | (54,922) |
Gross Amounts Offset in the Condensed Consolidated Balance Sheets | 38,476 | 35,011 |
Net Liabilities Presented in the Condensed Consolidated Balance Sheets | $ (84,699) | $ (19,911) |
Derivative Financial Instrume_6
Derivative Financial Instruments - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||
Credit losses due to nonperformance of counterparty | $ 0 | $ 0 | $ 0 | $ 0 |
Commitments, Contingencies, a_3
Commitments, Contingencies, and Guarantees - Narrative (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Other Commitments [Line Items] | ||
Administrated escrow deposits for property taxes and insurance | $ 5,315,110 | $ 3,682,366 |
Administrated escrow deposits for principal and interest | 3,557,170 | 8,370,326 |
Recorded reserves related to potential damages in connection with legal proceedings | 15,000 | 15,000 |
Financial guarantee | ||
Other Commitments [Line Items] | ||
Guaranteed debt total amount | $ 3,920 | $ 5,216 |
IRLCs | ||
Other Commitments [Line Items] | ||
Average number of days until expiration of interest rate lock commitments | 47 days | 43 days |
Mortgages | ||
Other Commitments [Line Items] | ||
Commitments to sell loans | $ 1,802,734 | $ 2,243,381 |
MSRs with Servicing Released | ||
Other Commitments [Line Items] | ||
Commitments to sell loans | $ 185,649 | $ 333,594 |
Commitments, Contingencies, a_4
Commitments, Contingencies, and Guarantees - Interest Rate Lock Commitments (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Commitments and Contingencies Disclosure [Abstract] | ||
IRLCs UPB, Fixed Rate | $ 11,266,246 | $ 25,937,777 |
IRLCs UPB, Variable Rate | $ 690,400 | $ 1,239,762 |
Minimum Net Worth Requirements
Minimum Net Worth Requirements (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Mortgage Banking [Abstract] | ||
Minimum adjusted net worth balance | $ 1,500,000 | $ 1,794,783 |
Segments - Key Operating Data f
Segments - Key Operating Data for Business Segments (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) segment | Sep. 30, 2021 USD ($) | |
Segment Reporting [Abstract] | ||||
Number of reportable segments | segment | 2 | |||
Segment Reporting Information [Line Items] | ||||
Gain on sale | $ 566,011 | $ 2,654,213 | $ 2,856,634 | $ 8,548,144 |
Interest income | 95,753 | 129,963 | 265,490 | 311,853 |
Interest expense on funding facilities | (46,173) | (72,778) | (130,576) | (205,000) |
Servicing fee income | 364,211 | 334,348 | 1,088,004 | 970,058 |
Changes in fair value of MSRs | 150,304 | (341,361) | 592,162 | (556,201) |
Other income | 164,580 | 410,345 | 685,987 | 1,252,845 |
Total U.S. GAAP Revenue, net | 1,294,686 | 3,114,730 | 5,357,701 | 10,321,699 |
Plus/Less: Decrease (increase) in MSRs due to valuation assumptions (net of hedges) | (406,485) | 47,514 | (1,412,670) | (329,608) |
Adjusted revenue | 888,201 | 3,162,244 | 3,945,031 | 9,992,091 |
Directly attributable expenses | 727,742 | 1,172,035 | 2,645,357 | 3,537,232 |
Contribution margin | 160,459 | 1,990,209 | 1,299,674 | 6,454,859 |
Reportable Segments | ||||
Segment Reporting Information [Line Items] | ||||
Gain on sale | 561,128 | 2,644,282 | 2,839,198 | 8,530,601 |
Interest income | 95,004 | 128,927 | 263,265 | 309,366 |
Interest expense on funding facilities | (46,168) | (72,776) | (130,567) | (204,952) |
Servicing fee income | 363,279 | 333,653 | 1,085,557 | 967,993 |
Changes in fair value of MSRs | 150,304 | (341,361) | 592,162 | (556,201) |
Other income | 88,994 | 265,682 | 372,610 | 851,458 |
Total U.S. GAAP Revenue, net | 1,212,541 | 2,958,407 | 5,022,225 | 9,898,265 |
Plus/Less: Decrease (increase) in MSRs due to valuation assumptions (net of hedges) | (406,485) | 47,514 | (1,412,670) | (329,608) |
Adjusted revenue | 806,056 | 3,005,921 | 3,609,555 | 9,568,657 |
Directly attributable expenses | 645,502 | 1,104,143 | 2,339,878 | 3,340,427 |
Contribution margin | 160,554 | 1,901,778 | 1,269,677 | 6,228,230 |
Reportable Segments | Direct to Consumer | ||||
Segment Reporting Information [Line Items] | ||||
Gain on sale | 486,018 | 2,241,633 | 2,348,573 | 7,155,872 |
Interest income | 61,133 | 77,112 | 169,679 | 188,269 |
Interest expense on funding facilities | (29,767) | (43,528) | (84,198) | (124,942) |
Servicing fee income | 363,279 | 333,653 | 1,085,557 | 967,993 |
Changes in fair value of MSRs | 150,304 | (341,361) | 592,162 | (556,201) |
Other income | 83,363 | 234,381 | 343,300 | 769,152 |
Total U.S. GAAP Revenue, net | 1,114,330 | 2,501,890 | 4,455,073 | 8,400,143 |
Plus/Less: Decrease (increase) in MSRs due to valuation assumptions (net of hedges) | (406,485) | 47,514 | (1,412,670) | (329,608) |
Adjusted revenue | 707,845 | 2,549,404 | 3,042,403 | 8,070,535 |
Directly attributable expenses | 558,760 | 927,897 | 2,037,401 | 2,808,340 |
Contribution margin | 149,085 | 1,621,507 | 1,005,002 | 5,262,195 |
Reportable Segments | Partner Network | ||||
Segment Reporting Information [Line Items] | ||||
Gain on sale | 75,110 | 402,649 | 490,625 | 1,374,729 |
Interest income | 33,871 | 51,815 | 93,586 | 121,097 |
Interest expense on funding facilities | (16,401) | (29,248) | (46,369) | (80,010) |
Servicing fee income | 0 | 0 | 0 | 0 |
Changes in fair value of MSRs | 0 | 0 | 0 | 0 |
Other income | 5,631 | 31,301 | 29,310 | 82,306 |
Total U.S. GAAP Revenue, net | 98,211 | 456,517 | 567,152 | 1,498,122 |
Plus/Less: Decrease (increase) in MSRs due to valuation assumptions (net of hedges) | 0 | 0 | 0 | 0 |
Adjusted revenue | 98,211 | 456,517 | 567,152 | 1,498,122 |
Directly attributable expenses | 86,742 | 176,246 | 302,477 | 532,087 |
Contribution margin | 11,469 | 280,271 | 264,675 | 966,035 |
All Other | ||||
Segment Reporting Information [Line Items] | ||||
Gain on sale | 4,883 | 9,931 | 17,436 | 17,543 |
Interest income | 749 | 1,036 | 2,225 | 2,487 |
Interest expense on funding facilities | (5) | (2) | (9) | (48) |
Servicing fee income | 932 | 695 | 2,447 | 2,065 |
Changes in fair value of MSRs | 0 | 0 | 0 | 0 |
Other income | 75,586 | 144,663 | 313,377 | 401,387 |
Total U.S. GAAP Revenue, net | 82,145 | 156,323 | 335,476 | 423,434 |
Plus/Less: Decrease (increase) in MSRs due to valuation assumptions (net of hedges) | 0 | 0 | 0 | 0 |
Adjusted revenue | 82,145 | 156,323 | 335,476 | 423,434 |
Directly attributable expenses | 82,240 | 67,892 | 305,479 | 196,805 |
Contribution margin | $ (95) | $ 88,431 | $ 29,997 | $ 226,629 |
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, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Segment reporting reconciliation [Line Items] | ||||
Contribution margin, excluding change in MSRs due to valuation assumptions | $ 160,459 | $ 1,990,209 | $ 1,299,674 | $ 6,454,859 |
Increase (decrease) in MSRs due to valuation assumptions (net of hedges) | 406,485 | (47,514) | 1,412,670 | 329,608 |
Contribution margin, including change in MSRs due to valuation assumptions | 566,944 | 1,942,695 | 2,712,344 | 6,784,467 |
Salaries, commissions and team member benefits | 670,804 | 870,010 | 2,278,844 | 2,552,679 |
General and administrative expenses | 204,290 | 313,405 | 709,853 | 867,639 |
Depreciation and amortization | 24,211 | 19,577 | 70,033 | 55,470 |
Interest and amortization expense on non-funding debt | 38,317 | 34,163 | 115,263 | 104,772 |
Other expenses | 40,008 | 135,415 | 166,098 | 467,584 |
Income before income taxes | 106,355 | 1,425,689 | 1,247,329 | 5,329,556 |
Expenses not allocated to segments | ||||
Segment reporting reconciliation [Line Items] | ||||
Salaries, commissions and team member benefits | 243,164 | 237,410 | 777,847 | 694,421 |
General and administrative expenses | 141,048 | 224,597 | 495,958 | 595,283 |
Depreciation and amortization | 24,211 | 19,577 | 70,033 | 55,470 |
Interest and amortization expense on non-funding debt | 38,316 | 34,163 | 115,263 | 104,772 |
Other expenses | $ 13,850 | $ 1,259 | $ 5,914 | $ 4,965 |
Non-controlling Interests - Sum
Non-controlling Interests - Summary of Ownership (Details) - Holdings - shares | Jun. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2022 |
Noncontrolling Interest [Line Items] | |||
Holdings Units (in shares) | 1,975,317,186 | 1,970,266,394 | |
Ownership Percentage | 100% | 100% | |
Rocket Companies Inc. | |||
Noncontrolling Interest [Line Items] | |||
Holdings Units (in shares) | 126,437,703 | 121,386,911 | |
Ownership Percentage | 6.16% | 6.40% | |
Chairman | |||
Noncontrolling Interest [Line Items] | |||
Holdings Units (in shares) | 1,101,822 | 1,101,822 | |
Ownership Percentage | 0.06% | 0.06% | |
RHI | |||
Noncontrolling Interest [Line Items] | |||
Holdings Units (in shares) | 1,847,777,661 | 1,847,777,661 | |
Ownership Percentage | 93.78% | 93.54% |
Non-controlling Interests - Nar
Non-controlling Interests - Narrative (Details) - shares | 23 Months Ended | |
Mar. 31, 2021 | Sep. 30, 2022 | |
Noncontrolling Interest [Line Items] | ||
Increase in controlling interest (in percent) | 1% | |
Class A common stock | ||
Noncontrolling Interest [Line Items] | ||
Shares received in exchange of paired interests (in shares) | 20,200,000 | |
Shares repurchased | 30,393,667 |
Share-based Compensation - Narr
Share-based Compensation - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
TMSPP | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percentage of gross pay eligible for utilization | 15% | 15% | ||
Percentage of closing market price for purchases | 85% | 85% | ||
Shares purchased under the TMSPP (in shares) | 1,032,558,000 | 947,358,000 | 3,508,231,000 | 1,844,059,000 |
Restricted stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Awards granted (in shares) | 0 | 22,000,000 | ||
Estimated future expense | $ 287 | |||
Restricted stock units | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period | 3 years | |||
Restricted stock units | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period | 4 years |
Share-based Compensation -Share
Share-based Compensation -Share-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation expense | $ 57,762 | $ 40,879 | $ 181,314 | $ 123,900 |
Rocket Companies, Inc sponsored plans | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation expense | 55,872 | 39,226 | 165,044 | 118,972 |
Rocket Companies, Inc sponsored plans | Restricted stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation expense | 45,707 | 26,615 | 132,301 | 81,179 |
Rocket Companies, Inc sponsored plans | Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation expense | 9,086 | 10,257 | 27,932 | 30,155 |
Rocket Companies, Inc sponsored plans | Team Member Stock Purchase Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation expense | 1,079 | 2,354 | 4,811 | 7,638 |
RHI and subsidiary plans | Restricted stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation expense | 1,714 | 1,372 | 15,746 | 4,117 |
RHI and subsidiary plans | Subsidiary plans | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation expense | $ 176 | $ 281 | $ 524 | $ 811 |
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, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Earnings Per Share Reconciliation | ||||||||
Net income | $ 96,224 | $ 59,756 | $ 1,036,608 | $ 1,392,859 | $ 1,036,650 | $ 2,777,338 | $ 1,192,588 | $ 5,206,847 |
Net income attributable to non-controlling interest | (89,314) | (1,317,522) | (1,128,551) | (4,946,688) | ||||
Net income attributable to Rocket Companies | 6,910 | 75,337 | 64,037 | 260,159 | ||||
Add: Reallocation of Net income attributable to vested, undelivered stock awards | 3 | 39 | 38 | 141 | ||||
Net income attributable to common shareholders | 6,913 | 75,376 | 64,075 | 260,300 | ||||
Numerator: | ||||||||
Net income attributable to Class A common shareholders - basic | 6,913 | 75,376 | 64,075 | 260,300 | ||||
Add: Reallocation of net income attributable to dilutive impact of pro-forma conversion of Class D shares to Class A shares | 75,277 | 991,852 | 866,499 | 0 | ||||
Add: Reallocation of net income attributable to dilutive impact of share-based compensation awards | 101 | 2,294 | 1,396 | 10,254 | ||||
Net income attributable to Class A common shareholders - diluted | $ 82,291 | $ 1,069,522 | $ 931,970 | $ 270,554 | ||||
Denominator: | ||||||||
Weighted average shares of Class A common stock outstanding - basic (in shares) | 119,020,520 | 137,664,471 | 120,156,494 | 129,902,253 | ||||
Add: Dilutive impact of conversion of Class D shares to Class A shares (in shares) | 1,848,879,483 | 1,848,879,483 | 1,848,879,483 | 0 | ||||
Add: Dilutive impact of share-based compensation awards (in shares) | 2,765,764 | 4,284,397 | 3,227,291 | 5,490,417 | ||||
Weighted average shares of Class A common stock outstanding - diluted (in shares) | 1,970,665,767 | 1,990,828,351 | 1,972,263,268 | 135,392,670 | ||||
Earnings per share of Class A common stock outstanding - basic (in dollars per share) | $ 0.06 | $ 0.55 | $ 0.53 | $ 2 | ||||
Earnings per share of Class A common stock outstanding - diluted (in dollars per share) | $ 0.04 | $ 0.54 | $ 0.47 | $ 2 | ||||
Restricted stock units | ||||||||
Numerator: | ||||||||
Add: Reallocation of net income attributable to dilutive impact of share-based compensation awards | $ 89 | $ 2,223 | $ 1,283 | $ 10,027 | ||||
Denominator: | ||||||||
Add: Dilutive impact of share-based compensation awards (in shares) | 2,427,043 | 4,151,765 | 2,965,926 | 5,369,320 | ||||
TMSPP | ||||||||
Numerator: | ||||||||
Add: Reallocation of net income attributable to dilutive impact of share-based compensation awards | $ 12 | $ 71 | $ 113 | $ 227 | ||||
Denominator: | ||||||||
Add: Dilutive impact of share-based compensation awards (in shares) | 338,720 | 132,632 | 261,365 | 121,097 |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Employee Stock | ||||
Class of Stock [Line Items] | ||||
Antidilutive securities excluded from computation of diluted EPS (in shares) | 22,287,580 | 22,287,580 | ||
Holdings Units and corresponding Class D common stock | ||||
Class of Stock [Line Items] | ||||
Antidilutive securities excluded from computation of diluted EPS (in shares) | 1,855,464,831,000 | |||
Class B common stock | ||||
Class of Stock [Line Items] | ||||
Common stock outstanding (in shares) | 0 | 0 | 0 | 0 |