Rocket Cos. ended what has been a monumental year for the company with significantly reduced fourth quarter earnings contributing to a loss for all of 2025.
GAAP net income of $68 million compared with
For all of 2025, Rocket lost $234 million, while it made net income of $636 million in the prior 12 months.
During the year, Rocket
Making up some of the gap
Net rate lock volume of $41.6 billion along with the GOS were Rocket's best fourth quarter since 2021, Varun Krishna, CEO, said during the earnings call.
In the third quarter, Rocket did $32.4 billion of closed loans, while in the fourth quarter last year it did $27.8 billion.
For all of 2025, Rocket closed $130.4 billion at a total gain on sale margin of 283 basis points. This was an improvement over the $101.15 billion in 2024.
But UWM did $163.4 billion in volume for all of 2025.
"We have the largest origination and servicing business in the industry," Krishna said on the earnings call. "They are connected by a refinance recapture rate that is three times higher than the industry average."
This went a long way in driving fourth quarter results, adding that other companies lack the capacity to handle the business and cannot scale with demand, he said.
Rocket's recapture rates
More than half of Rocket's refinance business came from the servicing book, added Brian Brown, newly promoted to president as of today, as well as chief financial officer.
In the fourth quarter of 2020, it was 30%.
"This is the flywheel effect," said Brown. "These clients come with near zero client acquisition costs and retaining them for life generates client lifetime value that is worth multiples beyond the book value of an MSR asset."
Rocket had net loan servicing income of $700 million for the fourth quarter, inclusive of a $402 million write down in the fair value of mortgage servicing rights. For the same quarter in 2024, net servicing income of $744 million included a write up of $356 million.
At the end of last year, it serviced $2.1 trillion, the vast majority of this added from Mr. Cooper. On Dec. 31, 2024, its portfolio was $593 billion.
The refinance momentum is continuing into the first quarter, Brown said.
"In January, the population of homeowners benefiting from a rate and term refinance surged to 4.8 million, or over $1 trillion in unpaid principal balance; that's a four year high" said Brown. "We have reached a tipping point for the first time in this cycle, the cohort of mortgages with rates at or above 6% now exceeds those below 3%."
Rocket
Competition from banks? Not a concern
During the Q&A, management was asked about the
Brown did not seem overly concerned about the prospect.
"There's a couple of reasons banks haven't put their foot to the gas in mortgage," Brown said. "Maybe one is the capital requirements, and I don't know, maybe there's some relief for that, but I would also say they just haven't seen it as a productive channel, and they haven't invested in it."
The unit economics of mortgages don't necessarily "pencil out" for most banks. It's long road for them to be big in residential real estate finance.
For companies like Rocket, "this is our bread and butter; this is what we invest in every single day." Brown said. "And it's not something that gives me a lot of pause or concern."
Market share growth also came up during the Q&A.
"We set ambitious goals around market share very deliberately with a clear time horizon through the end of 27 and this is really our guidepost for long term leadership in the space," Krishna said. "And we're excited because we feel like we're very much on track to achieve those goals."
