“ perceives right now that because of the increased volume and increased profitability of new originations, a company of their nature would be worth more today than they might be in a normal market,” says Charbonneau. That’s why the current market is something of a double-edged sword for the company, according to Larry Charbonneau, managing director of Texas-based mortgage banking consultancy Charbonneau & Associates. While Rocket is reaping record numbers of new mortgages thanks to low borrowing costs, those low rates also decrease the value of the interest payments it collects for the mortgages it services from other lenders. Nonbank lenders like Rocket make money both on mortgage originations - signing up new borrowers who want to buy a home - and on the servicing of existing mortgages, where the company collects interest and handles the day-to-day maintenance of a mortgage on behalf of the original lender. In its filing, the company claimed that 75% of borrowers who applied online or through the Rocket Mortgages app were first-time homeowners or millennials. With the IPO coming at a time when interest rates are near zero, Gilbert is betting that Rocket can continue its rapid rise by signing up younger homebuyers attracted by low interest rates and an easy-to-use digital platform. The firm sought to present itself more as a fintech company than a mortgage lender in its initial filing with the Securities and Exchange Commission on July 28, touting its “innovative technologies” and “trusted digital solutions.” While Rocket Companies has been offering mortgages for more than three decades, it was the 2015 launch of its online platform, Rocket Mortgages, that enabled the firm to gain market share by offering mortgages online and through a mobile app.
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