Rocket rolls out new initiative with $0 credit report fees for brokers

Rocket Pro TPO, a wholesale arm of Rocket Mortgage, will be providing credit reports at no cost for brokers when closing loans through the Detroit lender. The strategy is expected to court more brokers in an industry facing higher credit report fees. 

Rocket Pro TPO‘s executive vice president Mike Fawaz said in an interview with HousingWire that the Fee Freedom initiative rolled out on Monday morning and aims to give the broker community “tools” to drum up business.

“The market has changed when it comes to credit report fees (…)  we’re experiencing credit report fees increase across the board,” Fawaz said.  

“A massive” mortgage credit report price increase is expected in 2023, according to a letter from the National Consumer Reporting Association (NCRA). 

Fair Isaac Corp. (FICO) has grouped mortgage lenders into three tiers, according to a memo to lenders in November, “with a wholesale price increase of less than 10% for the top tier of approximately 46 lenders, about 200% for approximately six lenders in the middle tier, and more than 400% for all other mortgage lenders in the nation.”  

Rocket’s competitor, United Wholesale Mortgage (UWM), recently announced a flat fee charge of $37.35 for brokers ordering credit reports for UWM loans. The Michigan-based lender expects the fee to be at least half the cost of a report for a single borrower, or as little as a third of the cost of a report for two borrowers, according to its website.

“Thousands” of brokers made the switch to the wholesale channel from retail and have joined Rocket Pro TPO in 2022, Fawaz said, while declining to mention specific numbers. 

Fawaz, who is less than a week into his new position after transitioning from senior vice president of sales at Rocket Pro TPO, calls the promotion a “change of structure” in which he will continue to focus on driving sales in addition to operations and marketing.

He succeeds Austin Niemiec, who was named chief revenue officer at Rocket Mortgage. Rocket didn’t make Niemiec available for an interview due to his short time on his new role.

New initiatives, which include providing verified approval letters by underwriters for prospective buyers, aim to assist brokers in building relationships with realtors in a purchase mortgage-focused market, Fawaz said. 

“As a broker partner, [if] you have a client that is looking to purchase a home, you are able to send the supporting documents, whether its W-2 pay stubs, whatever is needed to qualify that client,” he said.

For 2023, mortgage products that focus on “affordability” will continue to receive love from borrowers, Fawaz said. 

Rocket recently rolled out a Purchase Plus product that provides up to $7,500 in credit for first time buyers. Launched in December, borrowers could use the credit toward their mortgage costs in six cities across the country.

The lender is also offering 37.5 bps credit on loans on 30-year conventional purchases of $200,000 or below as well as cutting 25 bps in pricing for veterans — an initiative that rolled out on Monday.

While the mortgage industry is facing challenges that stem from lower origination volume compared to 2022, when asked about his forecasts in the wholesale channel, Fawaz emphasized the importance of broker competition .

“I’d love not to see consolidation. Seeing other wholesale lenders consolidate, I don’t think it will help the broker community,” the executive said.

Fawaz also reiterated Rocket’s firm oppositional stance to rival UWM’s mandate, issued in March 2021, that bans brokers from sending loans to both Rocket Mortgage and Fairway Mortgage. 

“Whatever UWM tried to pull is the complete opposite of what brokers stand for,” Fawaz said.

UWM’s stance is that the mandate protects the broker channel from existential threats.

Last week, a federal judge allowed an antitrust claim against UWM’s competition ultimatum to persist in a 2022 lawsuit filed by America’s MoneyLine (AML) while dismissing AML’s fraud and promissory estoppel claims. 

“The last thing you need as a broker partner is for someone to tell you who you can work with and who you can’t work with,” Fawaz said. 

You May Also Like