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What changed in Rocket Companies, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Rocket Companies, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+597 added−556 removedSource: 10-K (2026-03-02) vs 10-K (2025-03-03)

Top changes in Rocket Companies, Inc.'s 2025 10-K

597 paragraphs added · 556 removed · 408 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeOur net promoter score was 76 for full year 2024, placing us among companies recognized for best-in-class service. Our mortgage origination business includes our Direct to Consumer segment and our Partner Network segment. In the Direct to Consumer segment, our clients have the ability to interact with Rocket Mortgage digitally and/or with our mortgage bankers.
Biggest changeSince 2010, Rocket Mortgage has won 23 J.D. Power Awards in total across mortgage origination and mortgage servicing. Our mortgage origination net promoter score was 70 for full year 2025, placing us among companies recognized for best-in-class service. Our mortgage origination business is organized around distinct marketing channels, which are reported within our Direct to Consumer and Partner Network segments.
Seasonality also plays a key role, as property purchases tend to slow down during the winter months in every market in which we operate. Human Capital Rocket Companies invests for the long term and places tremendous value in supporting our team members, clients and communities. Our ISMs are our DNA, compass and foundation.
Seasonality also plays a key role, as property purchases tend to slow down during the winter months in every market in which we operate. 10 Human Capital Rocket Companies invests for the long term and places tremendous value in supporting our team members, clients and communities. Our ISMs are our DNA, compass and foundation.
The CFPB has been active in supervision and enforcement and continues to adopt new and amend existing regulations within its purview. Furthermore, our expansion of operations into Canada has made us subject to Canadian laws, regulations and rules which have additional and distinct oversight, supervision, and enforcement requirements.
The CFPB has historically been active in supervision and enforcement and continues to adopt new and amend existing regulations within its purview. Furthermore, our expansion of operations into Canada has made us subject to Canadian laws, regulations and rules which have additional and distinct oversight, supervision, and enforcement requirements.
We must also adhere to applicable laws and regulations promulgated by the various provinces and territories of Canada where we conduct business. 7 We continue to work diligently to assess and understand the implications of the regulatory environment in which we operate and the regulatory changes that we are facing.
We must also adhere to applicable laws and regulations promulgated by the various provinces and territories of Canada where we conduct business. We continue to work diligently to assess and understand the implications of the regulatory environment in which we operate and the regulatory changes that we are facing.
We believe AI will transform our business, and in turn, the client experience and the industry, from lead generation and allocation to underwriting, closing and servicing. 5 Marketing We believe our national Rocket brand is a competitive advantage that is difficult to replicate.
We believe AI will transform our business, and in turn, the client experience and the industry, from lead generation and allocation to underwriting, closing and servicing. Marketing We believe our national Rocket brand is a competitive advantage that is difficult to replicate.
We incur significant ongoing costs to comply with licensing and other legal requirements under the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (“the SAFE Act”) and the Dodd‑Frank Act, among others. To conduct our residential mortgage origination operations in the United States, we are licensed in all 50 states and the District of Columbia.
We incur significant ongoing costs to comply with licensing and other legal requirements under the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 and the Dodd‑Frank Act, among others. To conduct our residential mortgage origination operations in the United States, we are licensed in all 50 states and the District of Columbia.
As a reflection of our commitment to prioritizing our team members, Rocket Companies was recognized on Fortune Magazine’s list of 100 Best Companies to Work For 21 consecutive years.
As a reflection of our commitment to prioritizing our team members, Rocket Companies was recognized on Fortune Magazine’s list of 100 Best Companies to Work For 22 consecutive years.
Securities and Exchange Commission (“SEC”). The information on our website is not, and shall not be deemed to be, part of this report or incorporated into any other filings we make with the SEC. The reports and the other documents we file with the SEC are available on the SEC’s website at sec.gov.
SEC. The information on our website is not, and shall not be deemed to be, part of this report or incorporated into any other filings we make with the SEC. The reports and the other documents we file with the SEC are available on the SEC’s website at sec.gov.
Competition across our businesses supporting complex personal transactions such as mortgages is intense and can take many forms, including: • Marketing, client acquisition and distribution channels • Speed and certainty of obtaining loans • Client service levels • Client retention levels • Reputation and brand recognition • Variety of loan programs and services being made available • Interest rates and fees charged for loans, loan terms and amounts • Access to capital and liquidity Business Model We operate a scalable business model underpinned by constant innovation and our competitive strengths, which include our digital-first brand, technology, data insights, client-first culture and partnerships.
Competition across our businesses is intense and can take many forms, including: • Marketing, client acquisition and distribution channels • Speed and certainty of obtaining loans • Client service levels • Client retention levels • Reputation and brand recognition • Variety of loan programs and services being made available • Interest rates and fees charged for loans, loan terms and amounts • Access to capital and liquidity Business Model We operate a scalable and vertically integrated homeownership ecosystem, underpinned by constant innovation and our competitive strengths, which include our digital-first brand, technology, data insights, client-first culture and partnerships.
Our team members put the ISMs into action every day. The result is an empowered and passionate team aligned in a common mission. As of December 31, 2024, we had approximately 14,200 team members all of whom are based in the United States and Canada.
Our team members put the ISMs into action every day. The result is an empowered and passionate team aligned in a common mission. As of December 31, 2025, we had approximately 23,500 team members all of whom are based in the United States, Canada and India.
From time to time, we may use our website as a channel of distribution of material information. Financial and other material information regarding the Company is routinely posted on and accessible at rocketcompanies.com. Our 2024 ESG report, can be accessed at ir.rocketcompanies.com.
From time to time, we may use our website as a channel of distribution of material information. Financial and other material information regarding the Company is routinely posted on and accessible at rocketcompanies.com. 11
The CFPB has rulemaking authority with respect to many of the federal consumer protection laws applicable to mortgage lenders and servicers, including Truth in Lending Act (“TILA”), Real Estate Settlement Procedures Act (“RESPA”), Equal Credit Opportunity Act (“ECOA”), Fair Credit Reporting Act (“FCRA”), and the Fair Debt Collection Practices Act.
The CFPB has rulemaking authority with respect to many of the federal consumer protection laws applicable to mortgage lenders and servicers, including Truth in Lending Act, RESPA, ECOA, Fair Credit Reporting Act, and the Fair Debt Collection Practices Act.
We employ our same client‑centric philosophy and technology cultivated through our origination business towards the servicing of loans to deliver a digital client experience in servicing, specifically designed around the needs and expectations of our clients.
Servicing the loans that we originate provides us with an opportunity to build long‑term relationships and continually deliver a seamless experience to our clients. We employ our same client‑centric philosophy and technology cultivated through our origination business towards the servicing of loans to deliver a digital client experience in servicing, specifically designed around the needs and expectations of our clients.
Mortgage Servicing Fees We also generate significant income from servicing our clients’ loans. For every mortgage that we service, we receive contractual recurring cash flows for the life of the loan.
This income is partially offset by the interest and fees associated with funding facilities. We also generate significant revenue and cash flow from Loan servicing income, net associated with servicing our clients’ loans. For every mortgage that we service, we receive contractual recurring cash flows for the life of the loan.
Continuing this momentum into 2024, we expanded our impact by contributing an additional 100,000 hours of service. We are committed to fostering an inclusive workplace and strategically recruiting and hiring top talent from a broad range of candidates to build high-performing teams that drive business success. We cultivate a culture of open doors, open minds, and trust.
Rocket Companies has contributed over 1.2 million hours of service to our local communities since 2012. We are committed to fostering an inclusive workplace and strategically recruiting and hiring top talent from a broad range of candidates to build high-performing teams that drive business success. We cultivate a culture of open doors, open minds, and trust.
We market to potential clients in this segment through various brand campaigns and performance marketing channels. Within the Partner Network segment we operate across two channels, Wholesale and Premier Enterprise Partner.
In the Direct to Consumer channel, our clients are able to interact with Rocket Mortgage digitally and/or with our mortgage bankers. We market to potential clients in this channel through various brand campaigns and performance marketing channels. Within the Partner Network, we operate across Wholesale, Premier Enterprise Partner and Correspondent channels.
As required by state law, we have additional licenses to enable us to act as a mortgage loan servicer in all 50 states and the District of Columbia and other applicable state licenses to enable us to act as a mortgage broker, real estate brokerage, conduct lead generation activities, and operate our personal loan platform that facilitates loans.
As required by state law, we have additional licenses to enable us to act as a mortgage loan servicer in all 50 states, the District of Columbia, and certain US territories.
In our Premier Enterprise Partner channel, we partner with financial institutions and well-known consumer-focused companies to offer their clients mortgage solutions with our trusted, well-recognized brand. 4 As of December 31, 2024, the net client retention rate of our servicing portfolio was 97% on an annual basis.
In our Premier Enterprise Partner channel, we partner with financial institutions and well-known consumer-focused companies to offer their clients mortgage solutions with our trusted, well-recognized brand.
Some of these offerings include a 100% company paid benefit plan, comprehensive mental health support services, and an onsite health care clinic dedicated to improving team members’ health.
These programs include Rocket Academy and our tuition assistance program. We offer competitive, best in class benefit and wellness offerings that start on day one for all team members. Some of these offerings include a 100% company paid benefit plan, comprehensive mental health support services, and an onsite health care clinic dedicated to improving team members’ health.
Our clients leverage the Rocket Mortgage app and website to apply for mortgages, interact with our team members, upload documents, e-sign documents, receive statements and complete monthly payments. Rocket Mortgage is both a mortgage originator and a mortgage servicer. Since 2010, Rocket Mortgage has won 22 J.D. Power Awards in total across mortgage origination and mortgage servicing.
Our digital process utilizes automated data retrieval and advanced underwriting technology to deliver fast, tailored solutions to our clients. Our clients leverage the Rocket Mortgage app and website to apply for mortgages, interact with our team members, upload documents, e-sign documents, receive statements and complete monthly payments. Rocket Mortgage is both a mortgage originator and a mortgage servicer.
Department of Housing and Urban Development (“HUD”), Federal Housing Administration (“FHA”), various investors, non‑agency securitization trustees and others subject us to periodic reviews and audits. This broad and extensive supervisory and enforcement oversight will continue to occur in the future. As a highly regulated business, the regulatory and legal requirements we face can change and may even become more restrictive.
This broad and extensive supervisory and enforcement oversight will continue to occur in the future. As a highly regulated business, the regulatory and legal requirements we face can change and may even become more restrictive. In turn, this could make our compliance responsibilities more complex.
This provides a digital, seamless experience for our clients with speed and efficiency from their first interaction with Rocket Mortgage through closing. As described in the "Marketing" section below, Rocket is rebranding key businesses as part of its evolution. Effective February 10, 2025, Amrock, LLC ("Amrock") amended its name to Rocket Close, LLC ("Rocket Close"). • Rocket Money.
As described in the “Marketing” section below, Rocket is rebranding key businesses as part of its evolution. Effective February 10, 2025, Amrock, LLC amended its name to Rocket Close, LLC. • Rocket Money. Our personal finance app that helps clients manage their financial lives.
Our proprietary home search platform and real estate agent referral network, Rocket Homes provides technology-enabled services to support the home buying and selling experience. The company allows consumers to search for homes, connect with a real estate professional and obtain mortgage approval – through the sister company Rocket Mortgage – creating a seamless, fully integrated home buying and selling experience.
On July 1, 2025, we completed the acquisition of Redfin, a leading digital real estate brokerage and home search platform. Our real estate services allow consumers to search for homes, connect with a real estate agent and obtain mortgage approval, creating a seamless, fully integrated home buying and selling experience.
Through Rocket Mortgage, clients can view their loan information and activity, obtain insight into their home value and equity and obtain personalized videos that simplify complex topics such as escrow changes. This differentiated servicing experience focuses on client service with positive, regular touchpoints and a better understanding of our clients’ future needs. • Rocket Homes.
Through Rocket Mortgage, servicing clients can view their loan information and activity, obtain insight into their home value and equity and obtain personalized videos that simplify complex topics such as escrow changes. The addition of Mr. Cooper, a leading mortgage servicer and originator, further expands Rocket Mortgage’s capabilities. • Redfin.
We have over 10 petabytes of data in our environments and thousands of attributes to establish accurate client profiles. We generate over 65 million call logs annually, which help us develop technology and processes to continuously improve upon our client experience.
We have over 30 petabytes of data in our environments and thousands of attributes to establish accurate client profiles. We generate over 160 million calls with clients each year, which help us power AI models and continuously improve client, partner and team member experiences.
Our personal finance app that helps clients manage their financial lives. Rocket Money offers clients a suite of financial wellness services including subscription cancellation, budget management and credit score improvement that save them time and money. • Rocket Loans.
Rocket Money offers clients a suite of financial wellness services including subscription cancellation, budget management and credit score improvement that save them time and money. • Rocket Loans. Our personal loan business that offers a simple, fast and intuitive user experience by leveraging a single, automated technology platform, with particular focus on high quality, prime borrowers.
In turn, this could make our compliance responsibilities more complex. We are also subject to judicial and administrative decisions that impose requirements and restrictions on our business. Numerous U.S. federal and state consumer protection laws and regulations impact our business.
We are also subject to judicial and administrative decisions that impose requirements and restrictions on our business. Numerous U.S. federal and state consumer protection laws and regulations impact our business. We are also subject to a variety of regulatory and contractual obligations imposed by credit owners, insurers and guarantors of the loans we originate or facilitate and/or service.
Based on engagement survey results, approximately 93% of our team members support the various ways the Company contributes to the community. In 2024, 77% of our team members participated in community volunteering or giving events. Also in 2023, Rocket Companies achieved the milestone of one million hours of volunteering in our communities.
Based on engagement survey results, approximately 95% of our team members support the various ways the Company contributes to the community. In 2025, over 10,000 of our team members participated in community volunteering or giving events and we expanded our impact by contributing nearly 100,000 hours of service.
Rocket Data and Technology We aim to continuously improve on delivering speed, certainty and value to our clients through scalable, technology-driven solutions. We believe AI will be at the center of how clients buy, sell and finance homes. We have strategically invested in technology for nearly four decades and developed our technology in modules to facilitate agile enhancements.
Data and Technology We aim to deliver speed, certainty and value to our clients through scalable, technology-driven solutions. We believe AI is at the center of how clients buy, sell and finance homes. We have data and scale that uniquely positions Rocket to lead the next wave of industry transformation with AI.
Rocket Homes also empowers clients to buy or sell properties directly through a streamlined process to create high-impact listings and offers one-on-one support from home selling specialists. • Rocket Close. Formerly known as Amrock, Rocket Close is our national title producer, settlement provider and appraisal management company, leveraging proprietary technology that integrates seamlessly into the Rocket platform and processes.
Our real estate services also empower clients to buy or sell properties directly through a streamlined process to create high-impact listings and offer one-on-one support from home selling specialists. • Rocket Close.
We utilize data gathered from inquiries, applications and ongoing client relationships to optimize digital performance marketing, deliver a unified experience across the Rocket platform and maximize the lifetime value of our clients. Competition We compete against a variety of companies offering financial solutions, including large financial institutions, independent mortgage banks and fintech companies.
Our technology and data scale enable us to personalize our marketing efforts across channels. 8 Competition We compete against a variety of companies offering financial solutions, including large financial institutions, independent mortgage banks and fintech companies.
The licensing process includes the submission of an application to the relevant state agency, a character and fitness review of key individuals and an administrative review of our business operations. We are also supervised by regulatory agencies under U.S. state laws. In addition, the GSEs and the Federal Housing Finance Agency (“FHFA”), Ginnie Mae, Federal Trade Commission (“FTC”), U.S.
The licensing process generally includes the submission of an application to the relevant state agency, a character and fitness review of key individuals and an administrative review of our business operations. In addition, the GSEs and the FHFA, Ginnie Mae, FTC, HUD, FHA, various investors, non‑agency securitization trustees and others subject us to periodic reviews and audits.
The Consumer Financial Protection Bureau (“CFPB”), established under the Dodd-Frank Act, directly and significantly influences the regulation of residential mortgage loan originations and servicing.
This includes, but is not limited to, Fannie Mae, Freddie Mac, Ginnie Mae, FHFA, the VA, and the FHA/HUD. The CFPB, established under the Dodd-Frank Act, directly and significantly influences the regulation of residential mortgage loan originations and servicing.
There is a strong correlation between this metric and client lifetime value and we believe these levels are far superior to others in the mortgage industry. Servicing the loans that we originate provides us with an opportunity to build long‑term relationships and continually deliver a seamless experience to our clients.
We believe there is a strong correlation between this metric and client lifetime value, and we believe these levels are far superior to others in the mortgage industry. Our culture is rooted in foundational principles, or “ISMs”, which serve as a guiding framework for decision-making across the organization.
While Rocket is already the most recognized name in the mortgage industry, we are making strategic investments to ensure the Rocket brand is one that people know, trust and connect with on a deeper level. At the beginning of 2025, we unveiled a new visual identity and unified our businesses under the overarching "Rocket" brand.
While Rocket is already the most recognized name in the mortgage industry, we have made strategic investments to promote Rocket as a trusted brand associated with homeownership. In early 2025, we unified our businesses under the “Rocket” brand with a refreshed visual identity and Rocket.com, aiming to position Rocket as an inclusive and influential end-to-end homeownership brand.
Our TMRNs are a community of team members cultivating a culture of belonging, engagement, and business impact in support of Rocket’s mission, strategic objectives, and goals. Total membership in 2024 exceeded 4,100 team members across our 11 networks.
In 2025, more than 940 team members pursued degrees and certifications, with 417 successfully earning their degrees. The Company strongly encourages collaboration, connection, and inclusion through participation in our TMRNs. Our TMRNs are a community of team members cultivating a culture of belonging, engagement, and business impact in support of Rocket’s mission, strategic objectives, and goals.
Mortgage Origination Fees and Profitability Our mortgage origination business primarily generates revenue and cash flow from the gain on sale of loans, net.
Our mortgage origination business primarily generates revenue from the Gain on sale of loans, net, which includes all components related to the origination and sale of mortgage loans. During the time loans are held for sale, we earn Interest income, net from the borrower on the underlying mortgage loan.
Created by our founder and Chairman, Dan Gilbert, these principles reinforce our commitment to prioritizing team members and clients, encapsulated in the philosophy: “Love our team members. Love our clients.” We believe artificial intelligence ("AI") is transforming the homeownership journey through advancements in knowledge engineering, machine learning, automation, and personalization.
Created by our founder and Chairman, Dan Gilbert, these principles reinforce our commitment to prioritizing team members and clients, encapsulated in the philosophy: “Love our team members. Love our clients.” On July 1, 2025, we completed the acquisition of Redfin, a leading digital real estate brokerage and home search platform. On October 1, 2025, we completed the acquisition of Mr.
Other Fee Income Other fee income includes revenues from services provided to clients or partners across our platform. Rocket Close services complement the Company's end-to-end mortgage origination experience and generate revenues associated with title, closing and appraisal fees. Rocket Money earns revenue from premium members, or paying subscribers, as well as other service-based fees from members.
Other income is generated from our operations and services provided to clients or partners across our ecosystem. This includes revenue generated from Deposit income earned on cash deposits (including custodial deposits associated with the servicing portfolio), Rocket Close title, closing and appraisal services, Rocket Money paying subscribers, Redfin real estate services, and Rocket Loans personal loan interest and other income.
Item 1. Business Overview We are a Detroit-based financial technology company with operations spanning mortgage, real estate, and personal finance. Our proprietary technology platform is designed to deliver a seamless, AI-driven homeownership experience, integrating home search, mortgage origination, title and closing, and personal financial management.
Item 1. Business Overview We are a Detroit‑based fintech company including mortgage, real estate and personal finance businesses with a mission to Help Everyone Home. We are committed to delivering industry-best client experiences through our AI-powered, vertically integrated homeownership ecosystem.
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We believe our widely recognized “Rocket” brand is synonymous with simple, fast, and trusted digital experiences. Since our inception in 1985, we have demonstrated a consistent ability to develop and scale technology-driven solutions that enhance client experiences, automate operations, and extend our capabilities to partners.
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Our full suite of products empowers our clients across home search, mortgage finance and servicing, title and closing, financial wellness and personal loans. We believe our widely recognized “Rocket” brand is synonymous with simple, fast and trusted digital experiences.
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Our flagship business, Rocket Mortgage, is a leading mortgage provider, having originated more than $1.8 trillion in home loans since inception. Our culture is rooted in foundational principles, or "ISMs", which serve as a guiding framework for decision-making across the organization.
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Our flagship business, Rocket Mortgage, is the nation's largest mortgage originator by loan units and the nation's largest mortgage servicer with portfolio unpaid principal balance of $2.1 trillion as of December 31, 2025. Servicing loans provides us with the opportunity to build long-term relationships and continually deliver a seamless experience to our clients.
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With our extensive data assets and technology infrastructure, we are well-positioned to drive AI adoption across the real estate and mortgage industries. In June 2024, we published our third Environmental, Social, and Governance ("ESG") Report, outlining our impact on stakeholders.
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We extend the same client-centric and technology-driven experience across both origination and servicing. As of December 31, 2025, the net client retention rate of our servicing portfolio was 97% on an annual basis.
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Through our For-More-Than-Profit approach, we continue to invest in our communities and team members, reinforcing our commitment to long-term, sustainable growth. Rocket Portfolio of Companies Rocket Companies is a series of connected mortgage, real estate and financial services businesses centered on enabling AI-fueled homeownership. • Rocket Mortgage.
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Cooper, a leading mortgage servicer and originator, to further expand Rocket Mortgage’s capabilities. Rocket Portfolio of Companies Rocket Companies operates an integrated ecosystem of mortgage, real estate and financial services businesses centered on enabling AI-fueled homeownership. • Rocket Mortgage. The nation’s largest mortgage lender, aiming to provide the simplest and most convenient way to get a mortgage.
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The nation’s largest mortgage lender, providing what we believe is the simplest and most convenient way to get a mortgage. Our digital process utilizes automated data retrieval and advanced underwriting technology to deliver fast, tailored solutions to our clients.
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In our Correspondent channel, we acquire mortgage loans from third-party mortgage originators and financial institutions, leveraging Rocket’s underwriting, fulfillment and secondary market capabilities. 7 As mentioned above, we believe there is a strong correlation between our superior net client retention rate and client lifetime value.
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Our personal loan business that offers a simple, fast and intuitive user experience by leveraging a single, automated technology platform, with particular focus on high quality, prime borrowers. • Other. Lendesk, our Canadian software company, specializes in a point-of-sale system for mortgage professionals and a loan origination system for private lenders.
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Formerly known as Amrock, Rocket Close is our national title producer, settlement provider and appraisal management company, leveraging proprietary technology that integrates seamlessly into the Rocket platform and processes. This provides a digital, seamless experience for our clients with speed and efficiency from their first interaction with Rocket Mortgage through closing.
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This enables us to effectively scale during market expansion, efficiently onboard partners and grow into new client segments and channels, with less time and investment than our competitors. This process partitioning has allowed us to identify many areas that could be automated.
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In the second half of 2025, we introduced updated branding for Redfin as “Redfin Powered by Rocket” and for Mr. Cooper as “Mr. Cooper Powered by Rocket Mortgage,” highlighting a more connected experience across home search, real estate, and mortgage services. We have a long history of creating bold brand campaigns and reaching potential clients through highly targeted marketing strategies.
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Our system has been designed to integrate across business functions, continuously monitoring in‑progress transactions and leveraging our proprietary, data‑driven, decision engine to recommend the most efficient task for each team member. We have data and scale that uniquely positions Rocket to lead the next wave of industry transformation with AI.
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Our full suite of products empowers our clients across home search, mortgage finance and servicing, title and closing, financial wellness and personal loans. Sources of revenue include Gain on sale of loans, net , Loan servicing income, net , Interest income, net , and Other income .
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We have deployed AI across our business and estimate that technology has unlocked over one million team member hours in 2024.
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Detailed description of our revenues and related components can be found in “ Management's Discussion and Analysis of Financial Condition and Results of Operations ” in Part II, Item 7 Description of Certain Components of Financial Data. 9 Government Regulations We operate in heavily regulated industries that are highly focused on consumer protection.
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The objective of our brand restage is to position Rocket as one of the most inclusive brands in America and create an influential end-to-end homeownership brand. As part of this effort, we have acquired Rocket.com and introduced a reimagined logo marque, word marque, typeface and color palette.
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We also maintain other applicable state licenses to enable us to act as a debt collector, real estate brokerage, conduct lead generation activities, and operate our personal loan platform that facilitates loans.
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We have a long history of creating bold and visible events and campaigns and reaching potential clients through highly targeted marketing strategies. Our scale and data analytics provide distinct advantages in the efficiency of our marketing initiatives.
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Total membership in 2025 exceeded 8,600 team members across our 11 networks, including a new TMRN that was established this year. We also actively provide and promote opportunities for our team members to share their voice and engage with our community.
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We originate mortgage loans that are sold either to government backed entities or to investors in the secondary mortgage market. Since our counterparties are primarily the government-sponsored enterprise (“GSEs”) as well as other diversified sets of investors, we do not need to hold significant capital to grow our origination business.
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The gain on sale of loans, net includes all components related to the origination and sale of mortgage loans, including: • Net gain on sale of loans, which represents the premium received in excess of the loan principal amount and certain fees charged by investors upon sale of loans into the secondary market; • Loan origination fees (credits), points and certain costs; • Provision for or benefit from investor reserves; • The change in fair value of interest rate lock commitments (“IRLCs”) and loans held for sale; 6 • The gain or loss on forward commitments hedging loans held for sale and IRLCs; and • The fair value of originated mortgage servicing rights (“MSRs”).
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Rocket Homes earns fees from real estate agent referrals, while at the same time matching Rocket Mortgage clients with highly rated agents and improving the certainty of closing. Rocket Loans generates revenue similar to our mortgage business, earning origination, interest and servicing income. Government Regulations We operate in heavily regulated industries that are highly focused on consumer protection.
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We are also subject to a variety of regulatory and contractual obligations imposed by credit owners, insurers and guarantors of the loans we originate or facilitate and/or service. This includes, but is not limited to, Fannie Mae, Freddie Mac, Ginnie Mae, FHFA, the Department of Veterans Affairs (“VA”), and the FHA/HUD.
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These programs include Rocket Academy, our tuition assistance program, as well as our internal mobility program, THRIVE. We offer competitive, best in class benefit and wellness offerings that start on day one for all team members.
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In 2024, more than 850 team members pursued degrees and certifications, with nearly 100 successfully earning their degrees. As a result, 84% of team members indicated they have access to the learning and development needed to do their job well. The Company strongly encourages collaboration, connection, and inclusion through participation in our Team Member Resource Networks (“TMRN”).
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Team Members participated in impactful learning through TMRN programming including technology and coding workshops and finance and home ownership planning featuring our Chief Financial Officer. To understand and improve team member retention and engagement, the Company surveys team members with the assistance of third-party consultants. In 2024, 87% of our team members completed these engagement surveys.
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Based on these results, we are building a culture of inclusion where 86% of our team members feel they can be their authentic self at work and 80% feel a sense of belonging at the Company. 8 We also actively provide and promote opportunities for our team members to share their voice and engage with our community.
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The information in our ESG report is not, and shall not be deemed to be, part of this report or incorporated into any other filings we make to the SEC. 9

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeChanges in prevailing interest rates, U.S. monetary policies or other macroeconomic conditions affecting interest rates have and may continue to have a detrimental effect on our business. 10 • A disruption in the secondary home loan market, including the mortgage-backed security (“MBS”) market, could have a detrimental effect on our business. • We are subject to various legal actions that if decided adversely, or if viewed unfavorably by the public, could be detrimental to our business. • If we cannot maintain our corporate culture, we could lose the innovation, collaboration and focus on the mission that contribute to our business. • Our certificate of incorporation contains a provision renouncing our interest and expectancy in certain corporate opportunities. • We are controlled by RHI, an entity controlled by Dan Gilbert, whose interests may conflict with our interests and the interests of other stockholders.
Biggest changeOur business could be adversely affected if those models fail to produce reliable and/or valid results. • We are subject to various legal actions that if decided adversely, or if viewed unfavorably by the public, could be detrimental to our business. • We and our vendors have operations in India that could be adversely affected by changes in political or economic stability or by government policies. • The collection, processing, storage, use and disclosure of personal data could give rise to liabilities as a result of governmental regulation, conflicting legal requirements or differing views of personal privacy rights. • If we cannot maintain our corporate culture, we could lose the innovation, collaboration and focus on the mission that contribute to our business. • Loss of our key leadership could result in a material adverse effect on our business. • Our certificate of incorporation contains a provision renouncing our interest and expectancy in certain corporate opportunities. • We are controlled by Mr.
Risk Factors In addition to risks and uncertainties in the ordinary course of business that are common to all businesses, important factors that are specific to our industry and the Company could have a material and adverse impact on our business, financial condition, results of operations and cash flows.
Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business, financial condition, results of operations and cash flows. 13 Risk Factors In addition to risks and uncertainties in the ordinary course of business that are common to all businesses, important factors that are specific to our industry and the Company could have a material and adverse impact on our business, financial condition, results of operations and cash flows.
Further, because we are a “controlled company” within the meaning of the New York Stock Exchange rules, we qualify for and intend to rely on exemptions from certain corporate governance requirements. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business, financial condition, results of operations and cash flows.
Gilbert, whose interests may conflict with our interests and the interests of other stockholders. Further, because we are a “controlled company” within the meaning of the NYSE rules, we qualify for and intend to rely on exemptions from certain corporate governance requirements.
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These risks include, but are not limited to, the following: • The success and growth of our business, results of operations and financial condition will depend upon our ability to adapt to and implement technological changes to meet our business needs and the changing demands of the market and our clients. • Cyberattacks, security breaches, or a failure to comply with information security laws or regulations could result in serious harm to our reputation and adversely affect our business. • Issues related to the development, proliferation and use of AI could give rise to legal and/or regulatory action, damage our reputation or otherwise materially harm our business. • We are, and intend to continue, developing new products and services and our failure to accurately predict their demand or growth could have an adverse effect on our business. • We are required to make servicing advances that can be subject to delays in recovery or may not be recoverable in certain circumstances. • We may be required to repurchase or substitute mortgage loans or mortgage servicing rights (“MSRs”) that we have sold, or indemnify purchasers of our mortgage loans or MSRs. • We rely upon the accuracy and completeness of information about borrowers and any misrepresented information or fraud could result in significant financial losses and harm to our reputation. • Loss of our key leadership could result in a material adverse effect on our business. • Failure of vendors to perform to contractual agreements embedded in our products and services and our failure to effectively oversee vendor operations could adversely affect our business. • Rocket Loans, as a rapidly growing business, faces a range of interconnected risks and challenges that could have a material adverse effect on its operations. • Our Rocket Homes business is subject to challenges not faced by traditional real estate brokerages. • We may be unable to make acquisitions and investments, successfully integrate acquired companies into our business, or our acquisitions and investments may not meet our expectations, any of which could adversely affect our business, financial condition and results of operations. • Negative public opinion could damage our brand and reputation, which could adversely affect our business and earnings. • Our risk management efforts may not be effective at mitigating potential losses resulting in increased costs or business disruption. • We face intense competition that could adversely affect us. • Our business is significantly impacted by interest rates.
Added
These risks include, but are not limited to, the following: • The success and growth of our business, results of operations and financial condition will depend upon our continued ability to adapt to and implement technological changes to meet our business needs and the changing demands of the market and our clients. • Issues related to the development, proliferation and use of AI could give rise to legal and/or regulatory action, damage our reputation or otherwise materially harm our business.
Added
Cyberattacks, security breaches, or a failure to comply with information security laws or regulations could result in serious harm to our reputation and adversely affect our business. • Reliance on digital platforms and app marketplaces poses growing risks to client acquisition and business growth. • We are, and intend to continue, developing new products and services and our failure to accurately predict their demand or growth could have an adverse effect on our business. • We may not be able to continue to grow our loan origination business or effectively manage significant increases in our loan production volume, both of which could negatively affect our reputation and business, financial condition, and results of operations. • We are required to make servicing advances that can be subject to delays in recovery or may not be recoverable in certain circumstances, and some of the loans we service are higher risk loans, which are more expensive to service and may lead to liquidity challenges. • Our counterparties may terminate our servicing rights and subservicing contracts under which we conduct servicing activities. • Our origination and servicing businesses and operating results may be adversely impacted due to a decline in market share for our origination business, a faster than expected increase in payoffs of serviced loans and an inability to recapture loans from existing serviced clients. • We depend on our ability to sell loans in the secondary market to a limited number of investors and to the GSEs, and to securitize our loans into MBS through the GSEs and Ginnie Mae.
Added
If our ability to sell or securitize mortgage loans is impaired, we may not be able to originate mortgage loans. • We may be required to repurchase or substitute mortgage loans or MSRs that we have sold, or indemnify purchasers of our mortgage loans or MSRs. • We rely upon the accuracy and completeness of information about borrowers and any misrepresented information or fraud could result in significant financial losses and harm to our reputation. • Redfin is reliant on real estate listing data and may be unable to obtain and provide comprehensive and accurate real estate listings quickly, or at all. • Redfin is subject to the rules, terms of service, and policies of realtor associations and MLSs, and any non-compliance may restrict or terminate their access to and use of listings data. 12 • We may be unable to make acquisitions and investments, successfully integrate acquired companies (including Redfin and Mr.
Added
Cooper) into our business, or our acquisitions (including Redfin and Mr. Cooper) and investments may not meet our expectations, any of which could adversely affect our business, financial condition and results of operations. • We may not achieve the intended benefits of our acquisition of Redfin and acquisition of Mr. Cooper, and the Redfin Acquisition or the Mr.
Added
Cooper Acquisition may disrupt our current plans or operations. • Negative public opinion could damage our brand and reputation, which could adversely affect our business and earnings. • Our risk management efforts may not be effective at mitigating potential losses resulting in increased costs or business disruption. • We face intense competition that could adversely affect us. • Our business is significantly impacted by interest rates.
Added
Changes in prevailing interest rates, U.S. monetary policies or other macroeconomic conditions affecting interest rates have had and may in the future have a detrimental effect on our business. • Our Rocket Mortgage business relies on our loan funding facilities to fund mortgage loans and otherwise operate our business.
Added
If one or more of such facilities are terminated, we may be unable to find replacement financing at commercially favorable terms, or at all, which could be detrimental to our business. • A disruption in the secondary home loan market, including the MBS market, could have a detrimental effect on our business. • Our business is highly dependent on Fannie Mae and Freddie Mac and certain U.S. government agencies and any changes in these entities or their current roles could be detrimental to our business. • We rely on internal models to manage risk and to make business decisions.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

10 edited+1 added−2 removed2 unchanged
Biggest changeOur Vendor Risk Management Program includes a robust due diligence process to review and affirm on an initial and periodic basis that our third-party service providers protect our information with the same rigor we require of ourselves. 46 As far as internal training and compliance, we spend significant time and resources to communicate the Program to all team members via annual trainings, ongoing communications, and periodic testing of team member capabilities.
Biggest changeOur Vendor Risk Management Program includes a robust due diligence process to review and affirm on an initial and periodic basis that our third-party service providers protect our information with the same rigor we require of ourselves.
We deploy a monitoring program to detect potential threats and keep an incident response plan in place to respond if a security incident occurs. Additional information on cybersecurity risks we face can be found in Item 1A, Risk Factors, which should be read in conjunction with the foregoing information.
We deploy a monitoring program to detect potential threats and keep an incident response plan in place to respond if a security incident occurs. Additional information on cybersecurity risks we face can be found in Item 1A, Risk Factors, which should be read in conjunction with the foregoing information. 52
We implement information security policies throughout our operations, and our enterprise risk management (“ERM”) process considers information security risks alongside other company risks as part of our overall risk assessment process. The Rocket Companies Vendor Risk Management Program performs initial and ongoing information security safeguards of our third-party service providers.
We implement information security policies throughout our operations, and our enterprise risk management process considers information security risks alongside other company risks as part of our overall risk assessment process. The Rocket Companies Vendor Risk Management Program performs initial and ongoing information security safeguards of our third-party service providers.
The CISO is charged with the continuous evolution of the Program to address emerging threats and new technologies, ensuring that we can adapt to the everchanging risk environment and those who seek to compromise our information.
The CISO is charged with the continuous evolution of the ISP to address emerging threats and new technologies, ensuring that we can adapt to the everchanging risk environment and those who seek to compromise our information.
During 2024, the CISO updates included information regarding areas of increasing cybersecurity threats, the ongoing enhancements to our information security framework, deployment of security tools, processes to mitigate threats, and the results of a simulated cybersecurity incident tabletop exercise.
During 2025, the CISO updates included information regarding areas of increasing cybersecurity threats, the ongoing enhancements to our information security framework, deployment of security tools, processes to mitigate threats, and the results of a simulated cybersecurity incident tabletop exercise.
We require the secure, efficient, and uninterrupted operation of those networks and systems to provide our clients with the best possible experience. With this in mind, we maintain an Information Security Program to protect the confidentiality, integrity, and availability of client information.
We require the secure, efficient, and uninterrupted operation of those networks and systems to provide our clients with the best possible experience. With this in mind, we maintain an ISP to protect the confidentiality, integrity, and availability of client information.
On a periodic basis, the CISO provides reports and presentations to the board of directors, Audit Committee, and Rocket Senior Leadership, including the Rocket Risk Council. These CISO updates include recent industry developments, evolving standards, vulnerability assessments and technological trends.
On a periodic basis, the CISO provides reports and presentations to the board of directors, Audit Committee, and Rocket Senior Leadership, including the CEO Leadership Team. These CISO updates include recent industry developments, evolving standards, vulnerability assessments and technological trends.
The Rocket Companies Information Security Program (“Program”) is managed by the Rocket Companies Chief Information Security Officer (“CISO”), who is responsible for the creation and execution of our information security strategy. The CISO has more than 30 years’ experience managing business risk and developing and implementing information security strategy.
The Rocket Companies ISP is managed by the Rocket Companies CISO, who is responsible for the creation and execution of our information security strategy. The CISO has more than 30 years’ experience managing business risk and developing and implementing information security strategy. Rocket Companies aligns its ISP to the National Institute of Standards Cyber Security framework.
The Company performs ongoing assessments of its Program to measure both the sufficiency of the safeguards to control risk and the design and operating effectiveness of our security requirements and controls.
The ISP is reviewed and updated by regular risk assessments, which identify reasonable and foreseeable internal and external risks. The Company performs ongoing assessments of its ISP to measure both the sufficiency of the safeguards to control risk and the design and operating effectiveness of our security requirements and controls.
Cybersecurity Governance Our Board oversees our Information Security Program and cybersecurity risks, this includes receiving periodic management reports on cybersecurity and information security trends and regulatory updates, technology risks, and the implications for our business strategy.
As such, the ISP is regularly evaluated by both internal and external assessors to ensure its effectiveness by measuring its ability to prevent risk realization. Cybersecurity Governance Our Board oversees our ISP and cybersecurity risks, this includes receiving periodic management reports on cybersecurity and information security trends and regulatory updates, technology risks, and the implications for our business strategy.
Removed
Rocket Companies aligns its Program to the National Institute of Standards (NIST) Cyber Security framework. The Program is reviewed and updated by regular risk assessments, which identify reasonable and foreseeable internal and external risks.
Added
As far as internal training and compliance, we spend significant time and resources to communicate the ISP to all team members via annual trainings, ongoing communications, and periodic testing of team member capabilities.
Removed
As such, the Program is regularly evaluated by both internal and external assessors to ensure its effectiveness by measuring its ability to prevent risk realization.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties We currently operate through a network of fifteen corporate offices and twelve client support locations located throughout the United States and Canada, which are all leased. Our headquarters and principal executive offices are located at 1050 Woodward Avenue, Detroit, Michigan 48226.
Biggest changeItem 2. Properties We currently operate through a network of corporate offices and client support locations located throughout the United States, Canada and India, which are all leased. Our headquarters and principal executive offices are located at 1050 Woodward Avenue, Detroit, Michigan 48226.
At this location, as of December 31, 2024, we lease office space totaling approximately 556,739 rentable square feet from an affiliate of Rocket Companies. The lease for our offices at 1050 Woodward Avenue expires on December 31, 2028 unless terminated earlier under certain circumstances specified in our leases.
At this location, as of December 31, 2025, we lease office space totaling approximately 624,861 rentable square feet from an affiliate of Rocket Companies. The lease for our offices at 1050 Woodward Avenue expires on December 31, 2028 unless terminated earlier under certain circumstances specified in our leases.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings For a discussion of our “Legal Proceedings,” refer to Note 14 Commitments, Contingencies and Guarantees in the notes to our audited consolidated financial statements of this Annual Report on Form 10-K. Item 4. Mine Safety Disclosures Not applicable. 47 Part II
Biggest changeItem 3. Legal Proceedings For a discussion of our Legal Proceedings, refer to Note 15 Commitments and Contingencies in the notes to our audited Consolidated Financial Statements of this Annual Report on Form 10-K. Item 4. Mine Safety Disclosures Not applicable. 53 Part II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

115 edited+51 added−30 removed57 unchanged
Biggest changeRefer to Note 17, Non-controlling Interest for more information on non-controlling interests. 60 Results of Operations for the years ended December 31, 2024, 2023 and 2022 Summary of Operations Condensed Statement of Operations Data Year Ended December 31, ($ in thousands) 2024 2023 2022 Revenue Gain on sale of loans, net $ 3,012,913 $ 2,066,292 $ 3,137,417 Servicing fee income 1,462,173 1,401,780 1,458,637 Change in fair value of MSRs (578,681) (700,982) 185,036 Interest income, net 97,566 120,860 184,203 Other income 1,106,827 911,319 873,200 Total revenue, net 5,100,798 3,799,269 5,838,493 Expenses Salaries, commissions and team member benefits 2,261,245 2,257,291 2,797,868 General and administrative expenses 893,154 802,865 906,195 Marketing and advertising expenses 824,042 736,676 945,694 Interest and amortization expense on non-funding-debt 153,637 153,386 153,596 Other expenses 300,668 251,948 293,229 Total expenses 4,432,746 4,202,166 5,096,582 Income (loss) before income taxes $ 668,052 $ (402,897) $ 741,911 (Provision for) benefit from income taxes (32,224) 12,817 (41,978) Net income (loss) 635,828 (390,080) 699,933 Net (income) loss attributable to non-controlling interest (606,458) 374,566 (653,512) Net income (loss) attributable to Rocket Companies $ 29,370 $ (15,514) $ 46,421 Gain on sale of loans, net The components of Gain on sale of loans, net for the periods presented were as follows: Year Ended December 31, ($ in thousands) 2024 2023 2022 Net gain (loss) on sale of loans (1) $ 1,504,149 $ 684,415 $ (579,562) Fair value of originated MSRs 1,330,216 1,092,332 1,970,647 Provision for investor reserves (36,248) (112,372) (58,140) Fair value adjustment on loans held for sale and IRLCs (26,546) 224,605 (822,289) Revaluation from forward commitments economically hedging loans held for sale and IRLCs 241,342 177,312 2,626,761 Gain on sale of loans, net $ 3,012,913 $ 2,066,292 $ 3,137,417 (1) Net gain (loss) on sale of loans represents the premium received in excess of the UPB, plus net origination fees. 61 The table below provides details of the characteristics of our mortgage loan production for each of the periods presented: Year Ended December 31, ($ in thousands) 2024 2023 2022 Closed loan origination volume by type Conventional Conforming $ 60,467,550 $ 48,007,013 $ 96,103,677 FHA/VA 28,002,000 24,035,770 28,208,025 Non Agency 12,682,582 6,669,211 8,817,581 Total mortgage closed loan origination volume $ 101,152,132 $ 78,711,994 $ 133,129,283 Portfolio metrics: Average loan amount $ 277 $ 270 $ 283 Weighted average loan-to-value ratio 73.16 % 74.86 % 72.30 % Weighted average credit score 737 733 733 Weighted average loan rate 6.62 % 6.62 % 4.45 % Percentage of loans sold: To GSEs and government 84.77 % 91.38 % 91.70 % To other counterparties 15.23 % 8.62 % 8.30 % Servicing-retained 92.74 % 94.86 % 93.45 % Servicing-released 7.26 % 5.14 % 6.55 % Net rate lock volume (1) $ 100,824,736 $ 78,648,717 $ 117,756,897 Gain on sale margin (2) 2.95 % 2.63 % 2.82 % (1) Net rate lock volume includes the UPB of loans subject to IRLCs, net of the pull-through factor as described in the “ Description of Certain Components of Financial Data ” section above.
Biggest changeRefer to Note 1, Business, Basis of Presentation and Significant Accounting Policies and Note 18, Non-controlling Interest for more information on non-controlling interests. 66 Results of Operations for the years ended December 31, 2025, 2024 and 2023 Summary of Operations Condensed Statement of Operations Data Year Ended December 31, ($ in millions) 2025 2024 2023 Revenue Gain on sale of loans, net $ 3,807 $ 3,013 $ 2,066 Servicing fee income 2,317 1,462 1,402 Change in fair value of MSRs, net (1,530) (579) (701) Interest income, net 125 98 121 Other income 1,976 1,107 911 Total revenue, net 6,695 5,101 3,799 Expenses Salaries, commissions and team member benefits 3,307 2,261 2,257 General and administrative expenses 1,439 893 803 Marketing and advertising expenses 1,088 824 737 Depreciation and amortization 290 113 110 Interest and amortization expense on non-funding debt 438 154 153 Other expenses 347 188 142 Total expenses 6,909 4,433 4,202 (Loss) income before income taxes $ (214) $ 668 $ (403) (Provision for) benefit from income taxes (20) (32) 13 Net (loss) income (234) 636 (390) Net loss (income) attributable to non-controlling interest 166 (607) 374 Net (loss) income attributable to Rocket Companies $ (68) $ 29 $ (16) Gain on sale of loans, net The components of Gain on sale of loans, net for the years presented were as follows: Year Ended December 31, ($ in millions) 2025 2024 2023 Net gain on sale of loans (1) $ 2,067 $ 1,504 $ 684 Fair value of originated MSRs 1,721 1,330 1,092 Provision for investor reserves (11) (36) (112) Unrealized change in fair value of the Pipeline 379 (27) 225 Realized and unrealized change in fair value of Pipeline hedges (349) 242 177 Gain on sale of loans, net $ 3,807 $ 3,013 $ 2,066 (1) Net gain on sale of loans 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, plus net origination fees. 67 The table below provides details of the characteristics of our mortgage loan production for the years presented: Year Ended December 31, ($ in millions) 2025 2024 2023 Closed loan origination volume by type Conventional Conforming $ 75,555 $ 60,467 $ 48,007 FHA/VA 33,403 28,002 24,036 Non Agency 21,394 12,683 6,669 Total mortgage closed loan origination volume $ 130,352 $ 101,152 $ 78,712 Portfolio metrics: Average loan amount (1) $ 285 $ 277 $ 270 Weighted average loan-to-value ratio 72.36 % 73.16 % 74.86 % Weighted average credit score 741 737 733 Weighted average loan rate 6.52 % 6.62 % 6.62 % Percentage of loans sold: To GSEs and government 81.94 % 84.77 % 91.38 % To other counterparties 18.06 % 15.23 % 8.62 % Servicing-retained 91.62 % 92.74 % 94.86 % Servicing-released 8.38 % 7.26 % 5.14 % Net rate lock volume (2) $ 132,005 $ 100,825 $ 78,649 Gain on sale margin (3) 2.83 % 2.95 % 2.63 % (1) Average loan amount is presented in thousands.
Our definitions of each of our non-GAAP financial measures allow us to add back certain cash and non-cash charges and deduct certain gains that are included in calculating Total revenue, net, Net income (loss) attributable to Rocket Companies or Net income (loss). However, these expenses and gains vary greatly and are difficult to predict.
Our definitions of each of our non-GAAP financial measures allow us to add back certain cash and non-cash charges and deduct certain gains that are included in calculating Total revenue, net, Net (loss) income attributable to Rocket Companies or Net (loss) income. However, these expenses and gains vary greatly and are difficult to predict.
Our loan production key performance indicators enable us to monitor our ability to generate gain on sale revenue as well as understand how our performance compares to the total mortgage origination market.
Our mortgage loan production key performance indicators enable us to monitor our ability to generate gain on sale revenue as well as understand how our performance compares to the total mortgage origination market.
Margin cash held on behalf of counterparties is recorded in Cash and cash equivalents and the related liability is classified in Other liabilities in the Consolidated Balance Sheets. Margin cash pledged to counterparties is excluded from Cash and cash equivalents and instead recorded in Other assets, as a receivable, in the Consolidated Balance Sheets.
Margin cash held on behalf of counterparties is recorded in Cash and cash equivalents and the related liability is classified in Other liabilities on the Consolidated Balance Sheets. Margin cash pledged to counterparties is excluded from Cash and cash equivalents and instead recorded in Other assets, as a receivable, on the Consolidated Balance Sheets.
Limitations to our non-GAAP financial measures included, but are not limited to: (a) they do not reflect every cash expenditure, future requirements for capital expenditures or contractual commitments; (b) Adjusted EBITDA does not reflect the significant interest expense or the cash requirements necessary to service interest or principal payment on our debt; (c) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced or require improvements in the future and Adjusted revenue, Adjusted net income (loss) and Adjusted EBITDA do not reflect any cash requirement for such replacements or improvements; and (d) they are not adjusted for all non-cash income or expense items that are reflected in our Consolidated Statements of Cash Flows.
Limitations to our non-GAAP financial measures included, but are not limited to: (a) they do not reflect every cash expenditure, future requirements for capital expenditures or contractual commitments; (b) Adjusted EBITDA does not reflect the significant interest expense or the cash requirements necessary to service interest or principal payment on our debt; (c) although Depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced or require improvements in the future and Adjusted net income (loss) and Adjusted EBITDA do not reflect any cash requirement for such replacements or improvements; and (d) they are not adjusted for all non-cash income or expense items that are reflected in our Consolidated Statements of Cash Flows.
This discussion and analysis contains forward-looking statements that involve risks and uncertainties which could cause our actual results to differ materially from those anticipated in these forward-looking statements, including, but not limited to, risks and uncertainties discussed below under the heading “ Special Note Regarding Forward-Looking Statements ,” and in Part I and elsewhere in this Form 10-K. 49 Special Note Regarding Forward-Looking Statements This Form 10-K contains forward-looking statements, which involve risks and uncertainties.
This discussion and analysis contains forward-looking statements that involve risks and uncertainties which could cause our actual results to differ materially from those anticipated in these forward-looking statements, including, but not limited to, risks and uncertainties discussed below under the heading “ Special Note Regarding Forward-Looking Statements ,” and in Part I and elsewhere in this Form 10-K.
Servicing activities are fully allocated to the Direct to Consumer segment as they are viewed as an extension of the client experience with the primary objective to establish and maintain positive, regular touchpoints with our clients, which positions us to have high retention and recapture the clients’ next refinance, purchase and personal loan transactions.
Servicing and subservicing activities are fully allocated to the Direct to Consumer segment as they are viewed as an extension of the client experience with the primary objective to establish and maintain positive, regular touchpoints with our clients, which positions us to have high retention and recapture the clients’ next refinance, purchase and personal loan transactions.
We define “Adjusted diluted earnings (loss) per share” as Adjusted net income (loss) divided by the adjusted diluted weighted average shares outstanding which includes diluted weighted average number of Class A common stock outstanding for the applicable period, which assumes the pro forma exchange and conversion of all outstanding Class D common stock for Class A common stock.
We define “Adjusted diluted earnings (loss) per share” as Adjusted net income (loss) divided by the Adjusted diluted weighted average shares outstanding which includes diluted weighted average number of Participating Common Stock outstanding for the applicable period and assumes the pro forma exchange and conversion of all outstanding Class D common stock for Class A common stock.
Other companies may define our non-GAAP financial measures differently and as a result, our measures of our non-GAAP financial measures may not be directly comparable to those of other companies. Our non-GAAP financial measures provide indicators of performance that are not affected by fluctuations in certain costs or other items.
Other companies may define their non-GAAP financial measures differently and as a result, our non-GAAP financial measures may not be directly comparable to those of other companies. Our non-GAAP financial measures provide indicators of performance that are not affected by fluctuations in certain costs or other items.
Discussions of 2022 items and year-to-year comparisons between 2023 and 2022 that are not included in this Form 10-K can be found in “ Management's Discussion and Analysis of Financial Condition and Results of Operations ” in Part II, Item 7 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 that are not included in this Form 10-K can be found in “ Management's Discussion and Analysis of Financial Condition and Results of Operations ” in Part II, Item 7 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
To determine the financial statement impact of accounting for income taxes, the Company must make assumptions and judgements about how to interpret and apply these complex tax laws to numerous transactions and business events, as well as make judgements regarding the timing of when certain items may affect taxable income in the United States and Canada.
To determine the financial statement impact of accounting for income taxes, the Company must make assumptions and judgments about how to interpret and apply these complex tax laws to numerous transactions and business events, as well as make judgments regarding the timing of when certain items may affect taxable income in the United States and Canada.
Management's Discussion and Analysis of Financial Condition and Results of Operations The following management’s discussion and analysis of our financial condition and results of operations should be read in conjunction with, and is qualified in its entirety by reference to, our consolidated financial statements and the related notes and other information included elsewhere in this Annual Report on Form 10-K (the “Form 10-K”).
Management's Discussion and Analysis of Financial Condition and Results of Operations The following management’s discussion and analysis of our financial condition and results of operations should be read in conjunction with, and is qualified in its entirety by reference to, our Consolidated Financial Statements and the related notes and other information included elsewhere in this Annual Report on Form 10-K.
If the carrying value of the reporting unit exceeds its estimated fair value, the Company recognizes an impairment loss in an amount equal to the excess, not to exceed the amount of goodwill allocated to the reporting unit. Refer to Note 9 , Goodwill and Intangible Assets , for further information on the goodwill attributable to the Company’s acquisitions.
If the carrying value of the reporting unit exceeds its estimated fair value, the Company recognizes an impairment loss in an amount equal to the excess, not to exceed the amount of goodwill allocated to the reporting unit. Refer to Note 10 , Goodwill and Intangible Assets , for further information on the goodwill attributable to the Company’s acquisitions.
(2) Rocket Companies is subject to U.S. Federal income taxes, in addition to state, local and Canadian taxes with respect to its allocable share of any net taxable income or loss of Holdings.
(2) Rocket Companies is subject to U.S. Federal income taxes, in addition to state, local and foreign taxes with respect to its allocable share of any net taxable income or loss of Holdings.
Non-GAAP Financial Measures To provide investors with information in addition to our results as determined by GAAP, we disclose Adjusted revenue, Adjusted net income (loss), Adjusted diluted earnings (loss) per share and Adjusted EBITDA (collectively “our non-GAAP financial measures”) as non-GAAP measures which management believes provide useful information to investors.
Non-GAAP Financial Measures To provide investors with information in addition to our results as determined by GAAP, we disclose Adjusted revenue, Adjusted net income (loss), Adjusted diluted earnings (loss) per share and Adjusted EBITDA as non-GAAP measures which management believes provide useful information to investors.
Loan origination costs include lender paid mortgage insurance, recording taxes, investor fees and other related expenses. Net loan origination fees and costs related to the origination of mortgage loans are recognized as a component of the fair value of IRLCs.
Loan origination fees generally include underwriting and processing fees. Loan origination costs include lender paid mortgage insurance, recording taxes, investor fees and other related expenses. Net loan origination fees and costs related to the origination of mortgage loans are recognized as a component of the fair value of IRLCs.
Our servicing portfolio key performance indicators enable us to monitor the overall size of our servicing portfolio of business, the related value of our mortgage servicing rights and the health of the business as measured by the average MSR delinquency rate.
Our servicing portfolio key performance indicators enable us to monitor the overall size of our servicing portfolio of business, the related value of our MSRs and the health of the business as measured by the average MSR delinquency rate.
The information included under the heading “Performance Graph” is not to be treated as “soliciting material” or as “filed” with the SEC and is not incorporated by reference into any filing by the Company under the Securities Act or the Exchange Act that is made on, before or after the date of filing of this Annual Report on Form 10-K.
The information included under the heading “Performance Graph” is not to be treated as “soliciting material” or as “filed” with the SEC and is not incorporated by reference into any filing by the Company under the Securities Act or the Exchange Act that is made on, before or after the date of filing of this Annual Report on Form 10-K. 55 Item 6. [Reserved] Item 7.
(3) Reflects legal accrual reversal related to a specific legal matter recorded as an adjustment in 2021. (4) Reflects net expenses associated with compensation packages, healthcare coverage, career transition services and accelerated vesting of certain equity awards.
(9) Reflects legal accrual reversal related to a specific legal matter recorded as an adjustment in 2021. (10) Reflects net expenses associated with compensation packages, healthcare coverage, career transition services and accelerated vesting of certain equity awards.
This section of this Form 10-K generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023.
This section of this Form 10-K generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024.
Changes in fair value of MSRs primarily due to the realization of expected cash flows and/or changes in valuation inputs and estimates, are recognized in current period earnings. We regularly perform a comprehensive analysis of the MSR portfolio in order to identify and sell certain MSRs that do not align with our strategy for retaining MSRs.
The Change in fair value of MSRs, net primarily includes the realization of expected cash flows and/or changes in valuation inputs and estimates, which are recognized in current period earnings. 63 We regularly perform a comprehensive analysis of the MSR portfolio in order to identify and sell certain MSRs that do not align with our strategy for retaining MSRs.
We remain in a strong liquidity position, with total liquidity of $8.2 billion as of December 31, 2024, which includes $1.3 billion of cash and cash equivalents and $1.6 billion of corporate cash used to self-fund loan originations, a portion of which could be transferred to funding facilities (warehouse lines) at our discretion, $3.3 billion of undrawn lines of credit from financing facilities and $2.0 billion of undrawn MSR lines.
We remain in a strong liquidity position, with total liquidity of $10.1 billion as of December 31, 2025, which includes $2.7 billion of cash and cash equivalents and $0.1 billion of corporate cash used to self-fund loan originations, a portion of which could be transferred to funding facilities (warehouse lines) at our discretion, $2.3 billion of undrawn lines of credit from financing facilities and $5.0 billion of undrawn MSR lines.
Other income Other income includes revenues gene rated from Deposit income related to revenue earned on deposits, including escrow deposits, Rocket Close (title, closing and appraisal fees), Rocket Money ( subscription revenue and other service-based fees ), Rocket Homes (real estate network referral fees) and Rocket Loans (personal loan interest earned and other income) and Other (additional subsidiary and miscellaneous revenue) .
Other income Other income includes revenues gene rated from Deposit income related to revenue earned on deposits, including custodial deposits, Rocket Close (title, closing and appraisal fees), Rocket Money ( subscription revenue and other service-based fees ), Real estate services revenue ( commission-based brokerage revenue and real estate network referral fees) and Rocket Loans (personal loan interest earned and other income) and Other (additional subsidiary and miscellaneous revenue) .
As of December 31, 2024, future purchase commitments primarily span a four year period, from 2025 through 2028, and aggregate to $486.9 million in total. Interest rate lock commitments, loan sale and forward commitments In the normal course of business, we are party to financial instruments with off-balance sheet risk.
As of December 31, 2025, future purchase commitments primarily span a four year period, from 2027 through 2030, and aggregate to $914 million in total. Interest rate lock commitments, loan sale and forward commitments In the normal course of business, we are party to financial instruments with off-balance sheet risk.
By contrast, interest and amortization expense on non-funding debt is a function of our capital structure and is therefore excluded from Adjusted EBITDA.
By contrast, Interest and amortization expense on non-funding debt associated with our Senior Notes is a function of our capital structure and is therefore excluded from Adjusted EBITDA.
Holders of Class D Common Stock are entitled to 10 votes per share and holders of Class A Common Stock are entitled to one vote per share on matters submitted to shareholders for approval.
Holders of Class L Common Stock are entitled to one vote per share and holders of Class A Common Stock are entitled to one vote per share on matters submitted to shareholders for approval.
See Note 14, Commitments, Contingencies and Guarantees of the notes to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K. Purchase commitments Future purchase commitments include various non-cancelable agreements primarily related to our apps and websites, cloud computing services and certain marketing arrangements.
See Note 15, Commitments and Contingencies of the Notes to the Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K. Purchase Commitments Future purchase commitments include various non-cancelable agreements primarily related to our apps and websites, cloud computing services, network infrastructure for data operations and certain marketing arrangements.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information for Common Stock Our Class A Common Stock, par value $0.00001 per share, is listed on the New York Stock Exchange under the ticker symbol “RKT” and began trading on August 10, 2020.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information for Common Stock Our Class A Common Stock, par value $0.00001 per share, is listed on the NYSE under the ticker symbol “RKT” and began trading on August 10, 2020. There is no public market for our Class L Common Stock.
Loans financed under these facilities are generally financed at approximately 97% to 98% of the principal balance of the loan (although certain types of loans are financed at lower percentages of the principal balance of the loan), which requires us to fund the balance from cash generated from operations.
We also have funding facilities directly with the GSEs. Loans financed under these facilities are generally financed at approximately 97% to 98% of the principal balance of the loan (although certain types of loans are financed at lower percentages of the principal balance of the loan), which requires us to fund the balance from cash generated from operations.
Share-based compensation Share-based compensation is comprised of both equity and liability awards and is measured and expensed accordingly under Accounting Standards Codification (“ASC”) 718 Compensation —Stock Compensation . As indicated above, share-based compensation expense is included as part o f salaries, commissions and team member benefits.
Share-based compensation Share-based compensation is composed of both equity and liability awards and is measured and expensed accordingly under ASC 718, Compensation —Stock Compensation . As indicated above, share-based compensation expense is included as part o f Salaries, commissions and team member benefits.
Directly attributable expenses include Salaries, commissions and team member benefits, General and administrative expenses, Marketing and advertising expenses and Other expenses, such as mortgage servicing related expenses and expenses generated from Rocket Close (title and settlement services).
Directly attributable expenses include Salaries, commissions and team member benefits, General and administrative expenses, Marketing and advertising expenses, Interest and amortization expense on non-funding debt and Other expenses, such as mortgage servicing related expenses and expenses generated from Rocket Close (title and settlement services).
Furthermore, at the point of sale of the loan, the Fair value of originated MSRs and the Provision for investor reserves are recognized each in their respective components shown above. 62 Year ended December 31, 2024 summary Gain on sale of loans, net was $3.0 billion, an increase of $0.9 billion, or 46%, compared to $2.1 billion in 2023.
Furthermore, at the point of sale of the loan, the Fair value of originated MSRs and the Provision for investor reserves are recognized each in their respective components shown above. 68 Year ended December 31, 2025 summary Gain on sale of loans, net was $3.8 billion, an increase of $794 million, or 26%, compared to $3.0 billion in 2024.
Our funding facilities, early buy out facilities, MSRs facilities and unsecured lines of credit also generally require us to comply with certain operating and financial covenants and the availability of funds under these facilities is subject to, among other conditions, our continued compliance with these covenants.
Our funding facilities and financing facilities also generally require us to comply with certain operating and financial covenants and the availability of funds under these facilities is subject to, among other conditions, our continued compliance with these covenants.
We are also subject to contingencies which may have a significant impact on the use of our cash. In order to originate and aggregate loans for sale into the secondary market, we use our own working capital and borrow or obtain money on a short-term basis primarily through committed and uncommitted funding facilities, generally established with large global banks.
In order to originate and aggregate loans for sale into the secondary market, we use our own working capital and borrow or obtain money on a short-term basis primarily through committed and uncommitted funding facilities, generally established with large global banks. Our funding facilities are primarily in the form of master repurchase agreements.
Gain on sale of loans, net 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 (“IRLCs” or “rate lock”) and loans held for sale, (5) the gain or loss on forward commitments hedging loans held for sale and IRLCs and (6) the fair value of originated MSRs.
Gain on sale of loans, net 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) unrealized change in fair value of the Pipeline, (5) realized and unrealized change in fair value of derivative financial instruments economically hedging the Pipeline, and (6) Fair value of originated MSRs .
We define “Adjusted net income (loss)” as tax-effected net income (loss) before share-based compensation expense, the change in fair value of MSRs due to valuation assumptions (net of hedges), a litigation accrual reversal, career transition program, change in Tax receivable agreement liability and the tax effects of those and other adjustments as applicable.
We define “Adjusted net income (loss)” as Tax-effected net (loss) income before Share-based compensation expense, the Change in fair value of MSRs due to valuation assumptions (net of hedges), Acquisition-related expenses, Amortization of acquired intangible assets, Restructuring costs, Litigation accrual reversal, Career transition program, Other adjustments, and the tax effects of those and other adjustments as applicable.
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 and moves from the Fair value adjustment on loans held for sale and IRLCs component in the Net gain (loss) on sale of loans component in the table above.
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 as a realized gain on sale and moves from the Unrealized change in fair value of the Pipeline component, to the Net gain (loss) on sale of loans component in the table above.
The increase in Contribution margin was driven by an increase in Gain on sales of loans, net, as described above. 67 Liquidity and Capital Resources Historically, our primary sources of liquidity have included: • cash flow from our operations, including: • sale of whole loans into the secondary market; • sale of mortgage servicing rights and excess servicing cash flows into the secondary market; • loan origination fees; • servicing fee income; • interest income on loans held for sale; and • other income • borrowings, including under our funding facilities; financing facilities; unsecured senior notes; and • cash and marketable securities on hand.
The decrease in Contribution margin was due to certain Directly attributable expenses, as described above. 73 Liquidity and Capital Resources Historically, our primary sources of liquidity have included: • cash flow from our operations, including: • sale of whole loans into the secondary market; • sale of MSRs and excess servicing cash flows into the secondary market; • loan origination fees; • servicing fee income; • interest income on loans held for sale; and • other income. • borrowings, including under our funding facilities; financing facilities; unsecured senior notes; and • cash and marketable securities on hand.
Overview of the Gain on sale of loans, net table At the time an IRLC is issued, an estimate of the Gain on sale of loans, net is recognized in the Fair value adjustment on loans held for sale and IRLCs component in the table above.
Overview of the Gain on sale of loans, net table At the time an IRLC is issued, an estimate of the Gain on sale of loans, net is recognized in the Unrealized change in fair value of the Pipeline component in the table above.
When the mortgage loan is sold into the secondary market (i.e., funded), 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. Loan origination fees generally include underwriting and processing fees.
Subsequent changes in the fair value of IRLCs and MLHFS are recognized in current period earnings. When the mortgage loan is sold into the secondary market (i.e., funded), 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.
Components of operating expenses Our operating expenses as presented in the statement of operations data include Salaries, commissions and team member benefits, General and administrative expenses, Marketing and advertising expenses, Interest and amortization expense on non-funding-debt and Other expenses. 58 Salaries, commissions and team member benefits Salaries, commissions and team member benefits include all payroll, benefits and share-based compensation expenses for our team members.
Components of operating expenses Our operating expenses as presented in the statements of operations data include Salaries, commissions and team member benefits , General and administrative expenses , Marketing and advertising expenses , Depreciation and amortization, Interest and amortization expense on non-funding debt and Other expenses .
We define “Adjusted revenue” as total revenues net of the change in fair value of mortgage servicing rights (“MSRs”) due to valuation assumptions (net of hedges).
We define “Adjusted revenue” as Total revenue, net of the Change in fair value of MSRs due to valuation assumptions (net of hedges).
We also generated $862.4 million of Adjusted EBITDA, which was an increase of $795.2 million, compared to $67.2 million in 2023. See “Non-GAAP Financial Measures” below for more information on Adjusted EBITDA.
We also generated $1.3 billion of Adjusted EBITDA, which was an increase of $419 million, compared to $862 million in 2024. See “Non-GAAP Financial Measures” below for more information on Adjusted EBITDA.
At December 31, 2024, the aggregate available amount under our facilities was $24.5 billion, with combined outstanding balances of $6.8 billion and unutilized capacity of $17.7 billion.
At December 31, 2025, the aggregate available amount under our facilities was $39.8 billion, with combined outstanding balances of $17.9 billion and unutilized capacity of $21.9 billion.
Other key performance indicators for other Rocket Companies, besides Rocket Mortgage ( “ Other Rocket Companies ”) , allow us to monitor both revenues and unit sales generated by these businesses.
Other key performance indicators for other Rocket Companies subsidiaries, not including mortgage loan production or servicing, allow us to monitor both revenues and unit sales generated by these businesses.
We deploy a hedge strategy to mitigate the impact of interest rate changes from the point of the IRLC through the sale of the loan.
The goal of our Pipeline hedge strategy is to mitigate the impact of interest rate changes from the point of the IRLC through the sale of the loan.
The Company will retain the benefit of the remaining 10% of these tax savings. Intangible Assets Definite-lived intangible assets primarily consist of customer relationships and technology acquired through business combinations and are recorded at their estimated fair value at the date of acquisition.
Intangible Assets Definite-lived intangible assets primarily consist of trade names, customer relationships and technology acquired through business combinations and are recorded at their estimated fair value at the date of acquisition.
(5) Reflects litigation accrual reversal related to a specific legal matter recorded as an adjustment in 2021. (6) Reflects net expenses associated with compensation packages, healthcare coverage, career transition services and accelerated vesting of certain equity awards. (7) Reflects changes in estimates of tax rates and other variables of the Tax receivable agreement liability.
(9) Reflects litigation accrual reversal related to a specific legal matter recorded as an adjustment in 2021. (10) Reflects net expenses associated with compensation packages, healthcare coverage, career transition services and accelerated vesting of certain equity awards.
Year ended December 31, 2024 Summary We originated $101.2 billion in residential mortgage loans, which was a $22.4 billion, or 29%, increase from 2023. Our Net income was $635.8 million, compared to a Net loss of $390.1 million in 2023.
Year ended December 31, 2025 Summary We originated $130.4 billion in residential mortgage loans, an increase of $29.2 billion, or 29%, compared to $101.2 billion in 2024. Our Net loss was $234 million, compared to a Net income of $636 million in 2024.
Our non-GAAP financial measures have limitations as analytical tools and you should not consider them in isolation or as a substitute for analysis of our results as reported under U.S. GAAP.
Our presentation of our non-GAAP financial measures should not be construed as an indication that our future results will be unaffected by unusual or nonrecurring items. Our non-GAAP financial measures have limitations as analytical tools and you should not consider them in isolation or as a substitute for analysis of our results as reported under U.S. GAAP.
The adjustment to the (provision for) benefit from income tax reflects the difference between (a) the income tax computed using the effective tax rates below applied to the income (loss) before income taxes assuming Rocket Companies, Inc. owns 100% of the non-voting common interest units of Holdings and (b) the provision for (benefit from) income taxes.
The Adjustment to the benefit from (provision for) income tax reflects the difference between (a) the income tax computed using the effective tax rates below applied to the Net (loss) income before income taxes assuming Rocket Companies, Inc. owns 100% of the Holdings LP Units for the year ended December 31, 2025 and Holdings LLC Units, for the years ended December 31, 2024 and 2023 and (b) the Provision for (benefit from) income taxes.
The Investor reserves liability balance was relatively flat in the current and prior period. The $76.1 million reduction in Provision for investor reserves expense was primarily due to a decrease in losses on repurchased loans in 2024, compared to 2023.
The $25 million reduction in Provision for investor reserves expense was primarily due to a decrease in losses on repurchased loans in the current period as compared to 2024.
Reconciliation of Adjusted diluted weighted average shares outstanding to Diluted weighted average Class A common shares outstanding Year Ended December 31, ($ in thousands, except per share) 2024 2023 2022 Diluted weighted average Class A common shares outstanding 141,037,083 1,980,523,690 1,971,620,573 Assumed pro forma conversion of Class D shares (1) 1,848,879,483 — — Adjusted diluted weighted average shares outstanding 1,989,916,566 1,980,523,690 1,971,620,573 Adjusted net income (loss) $ 455,634 $ (143,105) $ (136,962) Adjusted diluted earnings (loss) per share $ 0.23 $ (0.07) $ (0.07) (1) Reflects the pro forma exchange and conversion of non-dilutive Class D common stock to Class A common stock.
Reconciliation of Adjusted diluted weighted average shares outstanding to Diluted weighted average Participating Common Stock outstanding Year Ended December 31, ($ in millions, except per share) 2025 2024 2023 Diluted weighted average Participating Common Stock outstanding 1,322,362,708 141,037,083 1,980,523,690 Assumed pro forma conversion of Class D shares (1) 911,776,183 1,848,879,483 — Adjusted diluted weighted average shares outstanding 2,234,138,891 1,989,916,566 1,980,523,690 Adjusted net income (loss) $ 628 $ 456 $ (144) Adjusted diluted earnings (loss) per share $ 0.28 $ 0.23 $ (0.07) (1) Reflects the pro forma exchange and conversion of non-dilutive Class D common stock to Class A common stock.
The provision for or benefit from investor reserves is recognized in current period earnings in gain on sale of loans. We enter into derivative transactions to protect against the risk of adverse interest rate movements that could impact the fair value of certain assets, including IRLCs and loans held for sale.
The provision for or benefit from investor reserves is recognized in current period earnings in gain on sale of loans. Our Pipeline hedges protect against the risk of adverse interest rate movements that could impact the fair value of IRLCs and MLHFS. We primarily use forward loan sale commitments to hedge our interest rate risk exposure.
The increase was primarily a result of a net income of $635.8 million, as well as an increase in share-based compensation of $140.5 million. 69 Contractual Obligations, Commercial Commitments and Other Contingencies Our material expected cash requirements also include the following contractual commitments: Repurchase and indemnification obligations In the ordinary course of business, we are exposed to liability under representations and warranties made to purchasers of mortgage loans.
Contractual Obligations, Commercial Commitments and Other Contingencies Our material expected cash requirements also include the following contractual commitments: Repurchase and indemnification obligations In the ordinary course of business, we are exposed to liability under representations and warranties made to purchasers of mortgage loans.
This metric is a measure of gain on sale revenue and excludes revenues from Rocket Loans, changes in the loan repurchase reserve and fair value adjustments on repurchased loans held on our balance sheet, such as early buyouts. See the table above for each of the components of gain on sale of loans, net.
For purposes of calculating this metric, gain on sale revenue includes all those components, but excludes revenues from Rocket Loans, changes in the investor reserve, and fair value adjustments on repurchased loans held on our balance sheet, such as early buyouts.
These activities position us to be the natural choice for clients’ next refinance or purchase transaction. We provide industry-leading client service and leverage our widely recognized brand to strengthen our wholesale relationships, through Rocket Pro, as well as enterprise partnerships, both driving growth in our Partner Network segment.
We provide industry-leading client service and leverage our widely recognized brand to strengthen our wholesale relationships, through Rocket Pro, as well as enterprise partnerships, and correspondent relationships, driving growth in our Partner Network segment.
Performance Graph Set forth below is a graph comparing the percentage change in the cumulative total shareholder return on our common stock against the cumulative total return of a broad market index composed of all issuers listed on the New York Stock Exchange (“NYSE”) and our selected peer group.
In addition, the terms of our credit facilities contain restrictions on our ability to declare and pay cash dividends on our capital stock. 54 Performance Graph Set forth below is a graph comparing the percentage change in the five year cumulative total shareholder return on our common stock against the cumulative total return of a broad market index composed of all issuers listed on the NYSE and our selected peer group.
These organizations connect their clients directly to us through marketing channels and referrals. We measure the performance of the segments primarily on a contribution margin basis. Contribution margin is intended to measure the direct profitability of each segment and is calculated as Adjusted Revenue less directly attributable expenses. Adjusted Revenue is a non-GAAP financial measure described above.
Cooper and Redfin have been managed within our existing reportable segment structure. 71 We measure the performance of the segments primarily on a Contribution margin basis. Contribution margin is intended to measure the direct profitability of each segment and is calculated as Adjusted revenue less Directly attributable expenses. Adjusted revenue is a non-GAAP financial measure described above.
Direct to Consumer Directly attributable expenses was $2.1 billion, an increase of $218.8 million, or 11%, compared to $1.9 billion in 2023, driven by an increase in variable compensation and other variable costs associated with higher origination volume, as well as increased third-party credit report costs per unit.
Direct to Consumer Directly attributable expenses was $2.9 billion, an increase of $719 million, or 34%, compared to $2.1 billion in 2024, primarily driven by an increase in variable compensation and other variable costs associated with higher origination volume. The acquisition of Mr.
When we sell a pool of loans in the secondary market, the proceeds received from the sale of the loans are used to pay back the amounts we owe on the funding facilities. We rely on the cash generated from the sale of loans to fund future loans and repay borrowings under our funding facilities.
This income is partially offset by the interest and fees we have to pay under the funding facilities. 74 When we sell a pool of loans in the secondary market, the proceeds received from the sale of the loans are used to pay back the amounts we owe on the funding facilities.
December 31, 2024 compared to December 31, 2023 Cash Flows Our cash and cash equivalents and restricted cash were $1.3 billion at December 31, 2024, an increase of $0.2 billion, or 13%, compared to $1.1 billion at December 31, 2023.
We were in compliance with all covenants as of December 31, 2025 and 2024. December 31, 2025 compared to December 31, 2024 Cash Flows Our cash and cash equivalents and restricted cash were $2.9 billion at December 31, 2025, an increase of $1.6 billion, or 128%, compared to $1.3 billion at December 31, 2024.
Following is a summary of the notional amounts of commitments: December 31, ($ in thousands) 2024 2023 Interest rate lock commitments—fixed rate $ 6,562,026 $ 6,317,330 Interest rate lock commitments—variable rate $ 393,175 $ 258,045 Commitments to sell mortgage loans $ 1,120 $ — Forward commitments to sell mortgage-backed securities $ 12,091,939 $ 9,275,041 Forward commitments to purchase mortgage-backed securities $ 735,000 $ 375,000 New Accounting Pronouncements Not Yet Effective See Note 1, Business, Basis of Presentation and Accounting Policies of t he notes to the consolidated financial statements for details of recently issued accounting pronouncements and their expected impact on our consolidated financial statements. 70
Following is a summary of the notional amounts of commitments: December 31, ($ in millions) 2025 2024 IRLCs—fixed rate $ 12,331 $ 6,562 IRLCs—variable rate 1,066 393 LPCs 977 — Commitments to sell mortgage loans 53 1 Forward commitments to sell MBS 32,042 12,092 Forward commitments to purchase MBS 3,972 735 76 New Accounting Pronouncements Not Yet Effective See Note 1, Business, Basis of Presentation and Significant Accounting Policies of t he Notes to the Consolidated Financial Statements for details of recently issued accounting pronouncements and their expected impact on our Consolidated Financial Statements . 77
A breach of these covenants can result in an event of default under these facilities and as such allows the lenders to pursue certain remedies.
A breach of these covenants can result in an event of default under these facilities and as such allows the lenders to pursue certain remedies. In addition, most of these facilities, include cross default or cross acceleration provisions that could result in all facilities terminating if an event of default or acceleration of maturity occurs, under any facility.
The changes to the Fair value adjustment on loans held for sale and IRLCs in each period is dependent on several factors, including mortgage origination volume, how long a loan remains at a given stage in the origination process and the movement of interest rates during that period as compared to the immediately preceding period.
The Unrealized change in fair value of IRLCs and MLHFS each period is dependent on several factors, including mortgage origination volume, duration of the Pipeline, and movement of interest rates during that period as compared to the immediately preceding period.
Delays or failures to sell loans in the secondary market could have an adverse effect on our liquidity position. 68 As discussed in Note 6, Borrowings, of the notes to the consolidated financial statements included in this Form 10-K, as of December 31, 2024, we had 17 different funding facilities and financing facilities in different amounts and with various maturities together with the Senior Notes.
As discussed in Note 7, Borrowings , of the Notes to the Consolidated Financial Statements included in this Form 10-K, as of December 31, 2025, we had 38 different funding facilities and financing facilities in different amounts and with various maturities together with the Senior Notes.
During the time the loans are held for sale, we earn interest income from the borrower on the underlying mortgage loan. This income is partially offset by the interest and fees we have to pay under the funding facilities.
During the time the loans are held for sale, we earn interest income from the borrower on the underlying mortgage loan.
The pull-through factor is a key assumption and estimates the loan funding probability, as not all loans that reach IRLC status will result in a closed loan. Subsequent changes in the fair value of IRLCs and mortgage loans held for sale are recognized in current period earnings.
An estimate of the Gain on sale of loans, net is recognized at the time an IRLC is issued, net of an estimated pull-through factor. The pull-through factor is a key assumption and estimates the loan funding probability, as not all loans that reach IRLC status will result in a closed loan.
The weighted average annualized retained servicing fee for our MSR portfolio was 0.28%, 0.28% and 0.29% for the years ended December 31, 2024, 2023 and 2022, respectively. The vast majority of our portfolio consists of originated MSRs and consequently, the impact of purchased MSRs does not have a material impact on our weighted average service fee.
The weighted average annualized retained servicing fee for our MSR portfolio was 0.29%, 0.28% and 0.28% for the years ended December 31, 2025, 2024 and 2023, respectively.
As of February 24, 2025 there were approximately 109 holders of record of our Class A Common Stock and 4 holders of record of our Class D Common Stock.
As of February 23, 2026 there were approximately 1,602 holders of record of our Class A Common Stock and 70 holders of record of our Class L Common Stock.
The Direct to Consumer segment generates revenue from originating, closing, selling and servicing predominantly agency-conforming loans, which are pooled and sold to the secondary market. This segment also produces revenue by providing title and settlement services and appraisal management to these clients as part of our end-to-end mortgage origination experience.
This segment also produces revenue by providing title and settlement services and appraisal management to these clients as part of our end-to-end mortgage origination experience.
We exclude from each of our non-GAAP financial measures the change in fair value of MSRs due to valuation assumptions (net of hedges), as this represents a non-cash non-realized adjustment to our total revenues, reflecting changes in market interest rates and assumptions, including discount rates and prepayment speeds, which are not indicative of our performance or results of operation.
We define “Adjusted EBITDA” as Net (loss) income before Interest and amortization expense on non-funding debt associated with our Senior Notes, Provision for (benefit from) income taxes, Depreciation and amortization, Share-based compensation expense, Change in fair value of MSRs due to valuation assumptions (net of hedges), Acquisition-related expenses, Amortization of acquired intangible assets, Restructuring costs, Litigation accrual reversal, Career transition program, and Other. 57 We exclude from each of our non-GAAP financial measures the Change in fair value of MSRs due to valuation assumptions (net of hedges), as this represents a non-cash non-realized adjustment to our total revenues, reflecting changes in market interest rates and assumptions, including discount rates and prepayment speeds, which are not indicative of our performance or results of operation.
From time to time in the future, we may include or exclude other items if we believe that doing so is consistent with the goal of providing useful information to investors. 51 Although we use our non-GAAP financial measures to assess the performance of our business, such use is limited because they do not include certain material costs necessary to operate our business.
From time to time in the future, we may include or exclude other items if we believe that doing so is consistent with the goal of providing useful information to investors.
Income taxes Our income tax expense, deferred tax assets and liabilities and reserves for unrecognized tax benefits reflect management’s best assessment of estimated current and future taxes to be paid. We are subject to income taxes predominantly in the United States and Canada. These tax laws are often complex and may be subject to different interpretations.
We are subject to income taxes predominantly in the United States and Canada. These tax laws are often complex and may be subject to different interpretations.
See below for our overview and discussion of segment results for the years ended December 31, 2024, 2023 and 2022.
See below for our overview and discussion of segment results for the years ended December 31, 2025, 2024 and 2023. For additional discussion, see Note 17, Segments to the Consolidated Financial Statements of this Form 10-K.
Cooper Group Inc, Anywhere Real Estate Inc., Zillow Group Inc Class C, Redfin Corp, Stewart Information Services Corp, SoFi Technologies Inc, Guild Holdings Company, Compass, Inc. loanDepot, Inc., UWM Holdings Corporation and Blend Labs, Inc. Certain companies were not publicly traded companies at inception date.
Our selected peer group is composed of PennyMac Financial Services Inc, Rithm Capital Corp, Anywhere Real Estate Inc., Zillow Group Inc Class C, Stewart Information Services Corp, SoFi Technologies Inc, Guild Holdings Company, Compass, Inc. loanDepot, Inc., UWM Holdings Corporation and Blend Labs, Inc. Redfin Corp and Mr.
Other expenses were $300.7 million, an increase of $48.7 million, or 19%, compared to $251.9 million in 2023, due to an increase in title related expenses at Rocket Close associated with higher volume. 64 Summary results by segment for the years ended December 31, 2024, 2023 and 2022 Our operations are organized by distinct marketing channels which promote client acquisition and are categorized under two reportable segments: Direct to Consumer and Partner Network.
Summary results by segment for the years ended December 31, 2025, 2024 and 2023 Our operations are organized by distinct marketing channels which promote client acquisition and are categorized under two reportable segments: Direct to Consumer and Partner Network. In the Direct to Consumer segment, clients have the ability to interact with Rocket Mortgage digitally and/or with our mortgage bankers.
This graph covers the period of the initial listing of our stock on August 6, 2020 to year ended December 31, 2024. This graph assumes an initial investment of $100 on August 6, 2020 and reflects the cumulative total return on that investment, including the reinvestment of all dividends where applicable, through December 31, 2024.
This graph assumes an initial investment of $100 on December 31, 2020 and reflects the cumulative total return on that investment, including the reinvestment of all dividends where applicable, through December 31, 2025. The comparisons in this graph are required by the SEC and are not intended to forecast or be indicative of possible future performance of our common stock.
The Revaluation from forward commitments economically hedging loans held for sale and IRLCs component reflects the forward hedge commitments intended to offset the various fair value adjustments that impact the Fair value adjustment on loans held for sale and IRLCs and the Net gain (loss) on sale of loans components.
The component Realized and unrealized change in fair value related to the Pipeline hedges is intended to economically hedge (or offset) the various fair value adjustments that impact the Unrealized change in fair value of the Pipeline and the Net gain (loss) on sale of loans components.
Subsequent changes in the fair value of IRLCs and mortgage loans held for sale are recognized in this same component as the loan progresses through closing, which is the moment that loans move from an IRLC to a loan held for sale and ultimately through the sale of the loan.
Subsequent changes in the fair value of IRLCs and MLHFS are recognized in this same component as the loan progresses through closing, which is when the IRLC moves to a MLHFS (and remains here until sold into the secondary market).

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Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeWe are parties to a Tax Receivable Agreement with RHI and Dan Gilbert that provides for the payment by us to RHI and Dan Gilbert (or their transferees of Holdings Units or other assignees) of 90% of the amount of cash savings, if any, in U.S. federal, state and local income tax or franchise tax that we actually realize (computed using simplifying assumptions to address the impact of state and local taxes) as a result of: (i) certain increases in our allocable share of the tax basis in Holdings’ assets resulting from (a) the purchases of Holdings Units (along with the corresponding shares of our Class D common stock or Class C common stock) from RHI and Dan Gilbert (or their transferees of Holdings Units or other assignees) using the net proceeds from our initial public offering or in any future offering, (b) exchanges by RHI and Dan Gilbert (or their transferees of Holdings Units or other assignees) of Holdings Units (along with the corresponding shares of our Class D common stock or Class C common stock) for cash or shares of our Class B common stock or Class A common stock, as applicable, or (c) payments under the Tax Receivable Agreement; (ii) tax benefits related to imputed interest deemed arising as a result of payments made under the Tax Receivable Agreement; and (iii) disproportionate allocations (if any) of tax benefits to Holdings as a result of section 704(c) of the Internal Revenue Code of 1986, as amended that relate to the reorganization transactions.
Biggest changeGilbert (or their transferees of common limited liability company interests (the “Holdings LLC Units”) of Holdings LLC or other assignees) of 90% of the amount of cash savings, if any, in U.S. federal, state and local income tax or franchise tax that we actually realize (computed using simplifying assumptions to address the impact of state and local taxes) as a result of: (i) certain increases in our allocable share of the tax basis in Holdings LLC’s assets resulting from (a) the purchases of Holdings LLC Units (along with the corresponding shares of Class D common stock or Class C common stock) from RHI and Mr.
Together, these provisions of our certificate of incorporation and bylaws could make the removal of management more difficult and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our Class A common stock.
Together, these provisions of our certificate of incorporation and bylaws could make the removal of management more difficult and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for the Class A common stock.
If our loans are found to have been originated in violation of predatory or abusive lending laws, we could be subject to lawsuits or governmental actions, or we could be fined or incur losses. In July 2020, it was announced that the Financial Stability Oversight Council will begin an activities-based review of the secondary mortgage market.
If our loans are found to have been originated in violation of predatory or abusive lending laws, we could be subject to lawsuits or governmental actions, or we could be fined or incur losses. 34 In July 2020, it was announced that the Financial Stability Oversight Council will begin an activities-based review of the secondary mortgage market.
If we do not effectively manage our growth through the deployment of resources including processes, technology and talent, the quality of our services could suffer, which could negatively affect our brand and operating results. 15 We are required to make servicing advances that can be subject to delays in recovery or may not be recoverable in certain circumstances.
If we do not effectively manage our growth through the deployment of resources including processes, technology and talent, the quality of our services could suffer, which could negatively affect our brand and operating results. We are required to make servicing advances that can be subject to delays in recovery or may not be recoverable in certain circumstances.
Such significant adverse development, particularly in the current volatile interest rate environment, could result in changes in legislation or regulatory requirements that could materially adversely affect our business, financial condition and operating results. Our ability to refinance existing debt and borrow additional funds is affected by a variety of factors.
Such significant adverse development, particularly in the current volatile interest rate environment, could result in changes in legislation or regulatory requirements that could materially adversely affect our business, financial condition and operating results. 28 Our ability to refinance existing debt and borrow additional funds is affected by a variety of factors.
The financial resources required to remediate non-compliance or implement changes to business practices may be substantial, impacting our overall business operations and potentially leading to modifications of our servicing standards. If we do not obtain and maintain the appropriate state licenses, we will not be allowed to do business in some states, which would adversely affect our operations.
The financial resources required to remediate non-compliance or implement changes to business practices may be substantial, impacting our overall business operations and potentially leading to modifications of our servicing standards. 38 If we do not obtain and maintain the appropriate state licenses, we will not be allowed to do business in some states, which would adversely affect our operations.
A change in these principles or interpretations could also require us to alter our accounting systems in a manner that could increase our operating costs and impact the content of our financial statements. We are subject to various legal actions that if decided adversely, or if viewed unfavorably by the public, could be detrimental to our business.
A change in these principles or interpretations could also require us to alter our accounting systems in a manner that could increase our operating costs and impact the content of our financial statements. 40 We are subject to various legal actions that if decided adversely, or if viewed unfavorably by the public, could be detrimental to our business.
Our loan origination business also includes third-party mortgage brokers who operate on a more local basis and routinely work with realtors and builders, but who are not contractually obligated to do business with us. Further, our competitors also have relationships with these brokers and actively compete with us in our efforts to expand our broker networks.
Our loan origination business also includes third-party mortgage brokers who operate on a more local basis and routinely work with agents, realtors and builders, but who are not contractually obligated to do business with us. Further, our competitors also have relationships with these brokers and actively compete with us in our efforts to expand our broker networks.
If the refinancing or borrowing guidelines become more stringent and such changes result in increased costs to comply or decreased mortgage origination volume, such changes could negatively impact our business. 24 Our loan origination and servicing revenues are highly dependent on macroeconomic and U.S. residential real estate market conditions.
If the refinancing or borrowing guidelines become more stringent and such changes result in increased costs to comply or decreased mortgage origination volume, such changes could negatively impact our business. Our loan origination and servicing revenues are highly dependent on macroeconomic and U.S. residential real estate market conditions.
We could incur substantial losses and our business operations could be disrupted if we are unable to effectively identify, manage, monitor and mitigate financial risks, such as credit risk, interest rate risk, prepayment risk, liquidity risk and other market-related risks, as well as operational and legal risks related to our business, assets and liabilities.
We could incur substantial losses and our business operations could be disrupted if we are unable to effectively identify, manage, monitor and mitigate financial risks, such as credit risk, interest rate risk, prepayment risk, liquidity risk and other market-related risks, as well as operational, compliance and legal risks related to our business, assets and liabilities.
(“MERS”), a wholly owned subsidiary of MERSCORP, Inc., can serve as a nominee for the owner of a home loan and in that role initiate foreclosures or become the mortgagee of record for the loan in local land records. We have used in the past and may continue to use MERS as a nominee.
MERS, a wholly owned subsidiary of MERSCORP, Inc., can serve as a nominee for the owner of a home loan and in that role initiate foreclosures or become the mortgagee of record for the loan in local land records. We have used in the past and may continue to use MERS as a nominee.
Our failure to secure, maintain, protect and enforce our intellectual property rights could adversely affect our brands and adversely impact our business. 37 Our success and ability to compete also depends in part on our ability to operate without infringing, misappropriating or otherwise violating the intellectual property or proprietary rights of third parties.
Our failure to secure, maintain, protect and enforce our intellectual property rights could adversely affect our brands and adversely impact our business. Our success and ability to compete also depends in part on our ability to operate without infringing, misappropriating or otherwise violating the intellectual property or proprietary rights of third parties.
If we determine that such circumstances apply and all or a portion of such applicable tax savings is in doubt, we will pay to the holders of such Holdings Units the amount attributable to the portion of the applicable tax savings that we determine is not in doubt and pay the remainder at such time as we reasonably determine the actual tax savings or that the amount is no longer in doubt.
If we determine that such circumstances apply and all or a portion of such applicable tax savings is in doubt, we will pay to the holders of such Holdings LLC Units the amount attributable to the portion of the applicable tax savings that we determine is not in doubt and pay the remainder at such time as we reasonably determine the actual tax savings or that the amount is no longer in doubt.
In a default, clients not occupying the mortgaged property may be more likely to abandon the property, increasing our financial exposure. 18 The above referenced loans may be more expensive to service because they require more frequent interaction with clients and greater monitoring and oversight.
In a default, clients not occupying the mortgaged property may be more likely to abandon the property, increasing our financial exposure. The above referenced loans may be more expensive to service because they require more frequent interaction with clients and greater monitoring and oversight.
In the ordinary course of our business, we receive, process, retain and transmit proprietary information and sensitive or confidential data, including public and non-public personal information of our clients, loan applicants and team members (collectively defined as “Rocket Information”).
In the ordinary course of our business, we receive, process, retain and transmit proprietary information and sensitive or confidential data, including public and non-public personal information of our clients, loan applicants, agents and team members (collectively defined as “Rocket Information”).
A margin call would require us to repay a portion of the outstanding borrowings. A large, unanticipated margin call could have a material adverse effect on our liquidity. 25 A disruption in the secondary home loan market, including the MBS market, could have a detrimental effect on our business.
A margin call would require us to repay a portion of the outstanding borrowings. A large, unanticipated margin call could have a material adverse effect on our liquidity. A disruption in the secondary home loan market, including the MBS market, could have a detrimental effect on our business.
We have been, and may in the future be, subject to securities litigation, which may cause us to incur substantial costs and resources and divert the attention of management from our business. Item 1B. Unresolved Staff Comments None.
We have been, and may in the future be, subject to securities litigation, which may cause us to incur substantial costs and resources and divert the attention of management from our business. 51 Item 1B. Unresolved Staff Comments None.
If our loan origination business loses market share, loan originations otherwise decrease, or the loans in our servicing portfolio are repaid or refinanced at a faster pace than expected, we may not be able to maintain or grow the size of our servicing portfolio, as our servicing portfolio is subject to “run-off” (i.e., mortgage loans serviced by us may be repaid at maturity, prepaid prior to maturity, refinanced with a mortgage not serviced by us, liquidated through foreclosure, deed-in-lieu of foreclosure, or other liquidation process, or repaid through standard amortization of principal).
If our loan origination business loses market share, loan originations otherwise decrease, or the loans in our servicing portfolio are repaid or refinanced at a faster pace than expected, we may not be able to maintain or grow the size of our servicing portfolio, including our subserving portfolio, as our servicing portfolio is subject to “run-off” (i.e., mortgage loans serviced by us may be repaid at maturity, prepaid prior to maturity, refinanced with a mortgage not serviced by us, liquidated through foreclosure, deed-in-lieu of foreclosure, or other liquidation process, or repaid through standard amortization of principal).
Risks Relating to Technology and Cybersecurity The success and growth of our business, results of operations and financial condition will depend upon our ability to adapt to and implement technological changes to meet our business needs and the changing demands of the market and our clients.
Risks Relating to Technology and Cybersecurity The success and growth of our business, results of operations and financial condition will depend upon our continued ability to adapt to and implement technological changes to meet our business needs and the changing demands of the market and our clients.
Taken together, these challenges—including reliance on volatile digital channels, evolving privacy regulations, restrictive lead generation rules and competitive pressures in app marketplaces—could impede our ability to attract new clients and achieve sustainable business growth. 13 Some aspects of our Rocket technology platform include open-source software and any failure to comply with the terms of one or more of these open-source licenses could adversely affect our business.
Taken together, these challenges-including reliance on volatile digital channels, evolving privacy regulations, restrictive lead generation rules and competitive pressures in app marketplaces could impede our ability to attract new clients and achieve sustainable business growth. 17 Some aspects of our Rocket technology platform include open-source software and any failure to comply with the terms of one or more of these open-source licenses could adversely affect our business.
If this occurs, we may have to bear any associated losses directly, as repurchased loans typically can only be resold at a steep discount to their repurchase price, if at all.
If this occurs, we may have to bear any associated losses directly, as repurchased loans typically can only be resold at a discount to their repurchase price, if at all.
If we are unable to report financial information timely and accurately or to maintain effective disclosure controls and procedures, we could adversely affect our business prospects. 44 The U.S. federal income tax treatment of distributions on our Class A common stock to a holder will depend upon our tax attributes and the holder’s tax basis in our stock, which are not necessarily predictable and can change over time.
If we are unable to report financial information timely and accurately or to maintain effective disclosure controls and procedures, we could adversely affect our business prospects. 49 The U.S. federal income tax treatment of distributions on our Class A common stock to a holder will depend upon our tax attributes and the holder’s tax basis in our stock, which are not necessarily predictable and can change over time.
Under our subservicing contracts, the primary servicers for which we conduct subservicing activities have the right to terminate our subservicing rights with or without cause, with little notice and little to no compensation.
Under our servicing contracts, the primary servicers for which we conduct subservicing activities have the right to terminate our subservicing rights with or without cause, with little notice and little to no compensation.
Our share price has been, and may in the future be, volatile, and in the past companies that have experienced volatility in the market price of their stock have been subject to securities litigation.
Our share price has been, and may in the future be, volatile, and in the past companies that have experienced volatility in the market price of their stock have been subject to securities litigation. We have in the past been, and may in the future be, subject to securities litigation.
Supreme Court confirmed that the “disparate impact” theory applies to cases brought under the FHA, while emphasizing that a causal relationship must be shown between a specific policy of the defendant and a discriminatory result that is not justified by a legitimate, nondiscriminatory business objective of the defendant. In 2020, the U.S.
In 2015, the U.S. Supreme Court confirmed that the “disparate impact” theory applies to cases brought under the FHA, while emphasizing that a causal relationship must be shown between a specific policy of the defendant and a discriminatory result that is not justified by a legitimate, nondiscriminatory business objective of the defendant.
Further, after we initially report the expected tax characterization of distributions we have paid, the actual characterization, which is not determined with finality until after the end of the tax year in which the distribution occurs, could vary from our expectation with the result that holders of our common stock could incur different income tax liabilities than initially expected.
Further, after we initially report the expected tax characterization of distributions we have paid, the actual characterization, which is not determined with finality until after the end of the tax year in which the distribution occurs, could vary from our expectation with the result that holders of our Class A common stock could incur different income tax liabilities than initially expected.
Lawsuits such as these may result in other, derivative lawsuits, may be expensive to defend, and may divert our management’s attention from the conduct of our business, which could have an adverse effect on our business. The conduct of the brokers through whom we originate loans could subject us to fines or other penalties.
Such lawsuits may result in other, derivative lawsuits, may be expensive to defend, and may divert our management’s attention from the conduct of our business, which could have an adverse effect on our business. The conduct of the brokers through whom we originate loans could subject us to fines or other penalties.
If those agencies cease to exist, wind down, or otherwise significantly change their business operations or if we lost approvals with those agencies or our relationships with those agencies is otherwise adversely affected, we would seek alternative secondary market participants to acquire our mortgage loans at a volume sufficient to sustain our business.
If those agencies cease to exist, wind down, or otherwise significantly change their business operations or if we lost approvals with those agencies or our relationships with those agencies are otherwise adversely affected, we would seek alternative secondary market participants to acquire our mortgage loans at a volume sufficient to sustain our business.
Cybersecurity risks for lenders have significantly increased both in severity and volume in recent years and the techniques used to obtain unauthorized, improper, or illegal access to systems, third-party vendors, our clients’, loan applicants’ and team members’ data or to disable, degrade, or sabotage service are constantly evolving and have become increasingly complex and sophisticated and therefore more challenging to prevent and/or detect.
Cybersecurity risks for companies in our industries have significantly increased both in severity and volume in recent years and the techniques used to obtain unauthorized, improper, or illegal access to systems, third-party vendors, our clients’, loan applicants’ and team members’ data or to disable, degrade, or sabotage service are constantly evolving and have become increasingly complex and sophisticated and therefore more challenging to prevent and/or detect.
We cannot guarantee that we have been or will be fully compliant in every jurisdiction, as it is not entirely clear how new or existing laws and regulations will be interpreted or enforced with respect to the internet and e-commerce.
We cannot guarantee that we will be fully compliant in every jurisdiction, as it is not entirely clear how new or existing laws and regulations will be interpreted or enforced with respect to the internet and e-commerce.
Additionally, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act.
Additionally, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States of America will be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act.
We may not have sufficient protection or recovery plans in certain circumstances, such as natural disasters affecting the Detroit, Phoenix, Cleveland or Charlotte areas and our business interruption insurance may be insufficient to compensate us for losses that may occur. Our risk management efforts may not be effective at mitigating potential losses resulting in increased costs or business disruption.
We may not have sufficient protection or recovery plans in certain circumstances, such as natural disasters affecting the Detroit, Phoenix, Cleveland, Charlotte, Seattle or Dallas areas and our business interruption insurance may be insufficient to compensate us for losses that may occur. 26 Our risk management efforts may not be effective at mitigating potential losses resulting in increased costs or business disruption.
Our certificate of incorporation provides that, to the fullest extent permitted by applicable law, we renounce our right to certain business opportunities, and that each RHI Party has no duty to communicate or offer such business opportunity to us and is not liable to us or any of our stockholders for breach of any fiduciary or other duty under statutory or common law, as a director, officer or controlling stockholder, or otherwise, by reason of the fact that any such individual pursues or acquires such business opportunity, directs such business opportunity to another person or fails to present such business opportunity, or information regarding such business opportunity, to us.
Our certificate of incorporation provides that, to the fullest extent permitted by applicable law, we renounce our right to certain business opportunities, and that each RHI II Party has no duty to communicate or offer such business opportunity to us and will not be liable to us or any of our stockholders for breach of any fiduciary or other duty under statutory or common law, as a director, officer or controlling stockholder, or otherwise, by reason of the fact that any such individual pursues or acquires such business opportunity, directs such business opportunity to another person or fails to present such business opportunity, or information regarding such business opportunity, to us.
During any period in which one of our clients is not making payments on a loan we service we are required under most of our servicing agreements to advance our own funds to meet contractual principal and interest remittance requirements, pay property taxes and insurance premiums, legal expenses and other protective advances (“payment advances”).
During any period in which one of our clients is not making payments on a loan we service we are required under most of our servicing agreements to advance our own funds to meet contractual principal and interest remittance requirements, pay property taxes and insurance premiums, legal expenses and other protective payment advances.
Issuing additional shares of our Class A common stock, Class B common stock or other equity securities or securities convertible into equity may dilute the economic and voting rights of our existing stockholders or reduce the market price of our Class A common stock or both.
Issuing additional shares of Class A common stock, Class L common stock or other equity securities or securities convertible into equity may dilute the economic and voting rights of our existing stockholders or reduce the market price of our Class A common stock or both.
We currently incorporate AI technology in certain of our products and services and in our business operations, and we believe the proliferation of AI will have a significant impact on customer preference and market dynamics in our industry.
We currently incorporate AI technology in many of our products and services and in our business operations, and we believe the proliferation of AI will have a significant impact on customer preference and market dynamics in our industry.
Despite devoting significant time and resources to ensure the integrity of our information technology systems, we may not be able to anticipate, detect or implement effective preventive measures against all cyberattacks, security breaches or unauthorized access of our information technology systems that support our business.
Despite devoting significant time and resources to ensure the integrity of our information technology systems, we may not be able to anticipate, detect or implement effective preventive measures against all cyberattacks, security breaches or unauthorized access to our information technology systems or those of third parties that support our business.
The DOJ, through its use of a disparate impact theory under the FHA, is attempting to hold home loan lenders responsible for the pricing practices of brokers, alleging that the lender is directly responsible for the total fees and charges paid by the borrower even if the lender neither dictated what the broker could charge nor kept the money for its own account.
The DOJ, through its use of a disparate impact theory under the FHA, and through its ongoing combating redlining initiative, is attempting to hold home loan lenders responsible for the pricing practices of brokers, alleging that the lender is directly responsible for the total fees and charges paid by the borrower even if the lender neither dictated what the broker could charge nor kept the money for its own account.
The Tax Receivable Agreement makes certain simplifying assumptions regarding the determination of the cash savings that we realize or are deemed to realize from the covered tax attributes, which may result in payments pursuant to the Tax Receivable Agreement in excess of those that would result if such assumptions were not made.
The TRA makes certain simplifying assumptions regarding the determination of the cash savings that we realize or are deemed to realize from the covered tax attributes, which may result in payments pursuant to the TRA in excess of those that would result if such assumptions were not made.
Until the RHI Parties cease to beneficially own at least 50% of the voting power of our common stock, RHI will be able to control all matters requiring stockholder approval, including the election of directors, amendment of our certificate of incorporation and certain corporate transactions.
Until the Gilberts cease to beneficially own at least 50% of the voting power of our common stock, the Gilberts will be able to control all matters requiring stockholder approval, including the election of directors, amendment of our certificate of incorporation and certain corporate transactions.
Distributions of cash or other property on our Class A common stock, if any, will constitute dividends for U.S. federal income tax purposes to the extent paid from our current or accumulated earnings and profits (“E&P”), as determined under U.S. federal income tax principles, and generally be taxable to holders of our Class A common stock as ordinary dividend income for U.S. federal income tax purposes (to the extent of our current and accumulated E&P).
Distributions of cash or other property on our Class A common stock, if any, will constitute dividends for U.S. federal income tax purposes to the extent paid from our current or accumulated E&P, as determined under U.S. federal income tax principles, and generally be taxable to holders of our Class A common stock as ordinary dividend income for U.S. federal income tax purposes (to the extent of our current and accumulated E&P).
Further, in the event a court finds either exclusive forum provision contained in our certificate of incorporation to be unenforceable or inapplicable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, operating results and financial condition.
Further, in the event a court finds either exclusive forum provision contained in our certificate of incorporation to be unenforceable or inapplicable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, operating results and financial condition. We are controlled by Mr.
In some cases, it is unclear as to how such laws and regulations affect Rocket Homes based on our business model that is unlike traditional brokerages, and the fact that those laws and regulations were created for traditional real estate brokerages.
In some cases, it is unclear as to how such laws and regulations affect Redfin based on our business model that is unlike traditional brokerages, and the fact that those laws and regulations were created for traditional real estate brokerages.
Instability caused by terrorist attacks, the anticipation of any such attacks, political or domestic instability, the consequences of any military or other response by the United States and its allies and other armed conflicts globally, including the wars in Ukraine and the Middle East and geopolitical events stemming from such conflicts, have in the past caused, and in the future may cause, consumer confidence and spending to decrease, and have resulted, and may in the future result, in increased volatility and disruption in the United States and worldwide financial markets and economy.
Instability caused by terrorist attacks, the anticipation of any such attacks, political or domestic instability, the consequences of any military or other response by the United States and its allies and other armed conflicts globally and geopolitical events stemming from such conflicts, have in the past caused, and in the future may cause, consumer confidence and spending to decrease, and have resulted, and may in the future result, in increased volatility and disruption in the United States and worldwide financial markets and economy.
In addition, the modeling requirements of MSRs are complex because of the high number of variables that drive cash flows associated with MSRs, and because of the complexity involved with anticipating such variables over the life of the MSR.
In addition, the modeling requirements of MSRs are complex because of the high number of variables that drive cash flows associated with MSRs, including the expectation of delinquencies, and because of the complexity involved with anticipating such variables over the life of the MSR.
Negative public opinion can result from our actual or alleged conduct in any number of activities, including loan origination, loan servicing, debt collection practices, rebranding campaigns, negative events (e.g., data breaches, executive misconduct, violations of law, etc.) corporate governance and other activities, such as the lawsuits against us.
Negative public opinion can result from our actual or alleged conduct in any number of activities, including loan origination, loan servicing, debt collection practices, rebranding campaigns, negative events (e.g., data breaches, executive misconduct and violations of law), deficient corporate governance and other activities adverse to us, such as lawsuits against us.
If this information is inappropriately accessed and used by a third party or a team member for illegal purposes, the affected individuals may attempt to hold us responsible for any losses they may have incurred because of misappropriation.
If information is inappropriately accessed and used by a third party or a team member during a cyberattack or breach for illegal purposes, the affected individuals may attempt to hold us responsible for any losses they may have incurred because of misappropriation.
Our mortgage business is exposed to heightened regulatory scrutiny by various governmental agencies, but particularly from the CFPB, impacting both loan origination and servicing. The agencies’ continued monitoring, rule issuance. published guidance, and enforcement actions increase our regulatory compliance burden and associated costs.
Our mortgage business is exposed to heightened regulatory scrutiny by various governmental agencies impacting both loan origination and servicing. The agencies’ continued monitoring, rule issuance. published guidance, and enforcement actions increase our regulatory compliance burden and associated costs.
Our proactive research and development of such technology remains ongoing and our ability to develop effective and responsible AI technology will be critical to our financial performance and long-term success.
Our proactive research and development of such technology remains ongoing and our ability to develop or otherwise deploy effective and responsible AI technology will be critical to our financial performance and long-term success.
As of December 31, 2024, we had accrued $100.0 million in connection with our reserve for repurchase and indemnification obligations. Actual repurchase and indemnification obligations could materially exceed the reserves we have recorded in our financial statements. Any significant repurchases, substitutions, indemnifications or premium recapture could be detrimental to our business.
As of December 31, 2025, we had accrued $129 million in connection with our reserve for repurchase and indemnification obligations. Actual repurchase and indemnification obligations could materially exceed the reserves we have recorded in our financial statements. Any significant repurchases, substitutions, indemnifications or premium recapture could be detrimental to our business.
Rocket Title Insurance Company (“RTIC”), a title insurance underwriter, is heavily regulated by its domiciled state of Texas and by the department of insurance in each state where it holds a certificate of authority to transact title insurance. It is subject to state title insurance statutes and insurance codes as well as federal law.
RTIC, a title insurance underwriter, is heavily regulated by its domiciled state of Texas and by the department of insurance in each state where it holds a certificate of authority to transact title insurance. It is subject to state title insurance statutes and insurance codes as well as federal law.
Our future success will depend on our ability to continue to hire, integrate, develop and retain highly qualified personnel for all areas of our organization. Any talent acquisition and retention challenges could reduce our operating efficiency, increase our costs of operations and harm our overall financial condition.
Our operations depend on the work and skills of our team members. Our future success will depend on our ability to continue to hire, integrate, develop and retain highly qualified personnel for all areas of our organization. Any talent acquisition and retention challenges could reduce our operating efficiency, increase our costs of operations and harm our overall financial condition.
Furthermore, the existence of the foregoing provisions, as well as the significant Class A common stock beneficially owned by RHI, could limit the price that investors might be willing to pay in the future for shares of our Class A common stock.
Furthermore, the existence of the foregoing provisions, as well as the significant amount of Class A common stock beneficially owned by the Gilberts, could limit the price that investors might be willing to pay in the future for shares of the Class A common stock.
These factors include, among others, intense competition in the markets we serve; fluctuations in interest rates and general economic conditions, failure to accurately predict the demand or growth of new financial products and services that we are developing; fluctuations in quarterly revenue and operating results, as well as differences between our actual financial and operating results and those expected by investors; the public’s response to press releases or other public announcements by us or third parties, including our filings with the SEC; announcements relating to litigation; guidance, if any, that we provide to the public, any changes in such guidance or our failure to meet such guidance; changes in financial estimates or ratings by any securities analysts who follow our Class A common stock, our failure to meet such estimates or failure of those analysts to initiate or maintain coverage of our Class A common stock; the sustainability of an active trading market for our Class A common stock; investor perceptions of the investment opportunity associated with our Class A common stock relative to other investment alternatives; the inclusion, exclusion or deletion of our Class A stock from any trading indices; future sales of our Class A common stock by our officers, directors and significant stockholders; the effect on our business and results of operations from system failures and disruptions, hurricanes, wars, acts of terrorism, pandemics, other natural disasters or responses to such events; novel and unforeseen market forces and trading strategies by third parties; events or commentary reported in the media, including social media, whether or not accurate or involving us, that may create, amplify and/or rapidly spread negative publicity for us or for the industry or markets in which we operate; short selling of our Class A common stock or related derivative securities; price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole and changes in the volume of shares of our common stock available for public sale.
These factors include, among others, intense competition in the markets we serve; fluctuations in interest rates and general economic conditions; failure to accurately predict the demand or growth of new financial products and services that we are developing; fluctuations in quarterly revenue and operating results, as well as differences between our actual financial and operating results and those expected by investors; the public’s response to press releases or other public announcements by us or third parties, including our filings with the SEC; announcements relating to litigation; guidance, if any, that we provide to the public, any changes in such guidance or our failure to meet such guidance; the risk that anticipated benefits and synergies of completed acquisitions may not be fully realized or may take longer to realize than expected; the risk that integration of acquired businesses post-closing may not occur as anticipated or we may not achieve the growth prospects expected from such acquisition; changes in financial estimates or ratings by any securities analysts who follow our Class A common stock, our failure to meet such estimates or failure of those analysts to initiate or maintain coverage of our Class A common stock; the sustainability of an active trading market for our Class A common stock; investor perceptions of the investment opportunity associated with our Class A common stock relative to other investment alternatives; the inclusion, exclusion or deletion of our Class A common stock from any trading indices; future sales of our Class A common stock by our officers, directors and significant stockholders; the effect on our business and results of operations from system failures and disruptions, hurricanes, wars, acts of terrorism, pandemics, other natural disasters or responses to such events; novel and unforeseen market forces and trading strategies by third parties; events or commentary reported in the media, including social media, whether or not accurate or involving us, that may create, amplify and/or rapidly spread negative publicity for us or for the industry or markets in which we operate; short selling of our Class A common stock or related derivative securities; price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole and changes in the volume of shares of our Class A common stock available for public sale.
Department of Housing and Urban Development (“HUD”) issued a final rule amending HUD’s interpretation of the FHA’s disparate impact standard to better align with the 2015 U.S. Supreme Court case; however, HUD more recently in March 2023 finalized a rule rescinding HUD’s 2020 final rule and restoring HUD’s 2013 disparate impact standard.
In 2020, the HUD issued a final rule amending HUD’s interpretation of the FHA’s disparate impact standard to better align with the 2015 U.S. Supreme Court case; however, HUD more recently in March 2023 finalized a rule rescinding HUD’s 2020 final rule and restoring HUD’s 2013 disparate impact standard.
AI output might present ethical concerns or violate current and future laws and regulations, including licensing laws and a variety of federal and state fair lending laws and regulations such as the Fair Housing Act, the Equal Credit Opportunity Act, the Home Mortgage Disclosure Act, and the prohibition against engaging in Unfair, Deceptive, or Abusive Acts or Practices pursuant to the Dodd-Frank Act.
AI output might present ethical concerns or violate current and future laws and regulations, including licensing laws and a variety of federal and state fair lending laws and regulations such as the FHA, ECOA, the Home Mortgage Disclosure Act, and the prohibition against engaging in Unfair, Deceptive, or Abusive Acts or Practices pursuant to the Dodd-Frank Act.
We originate loans eligible for sale to Fannie Mae and Freddie Mac and government-insured or guaranteed loans, such as FHA and VA loans eligible for Ginnie Mae securities issuance. In 2008, the Federal Housing Finance Agency (“FHFA”) placed Fannie Mae and Freddie Mac into conservatorship and, as their conservator, FHFA controls and directs their operations.
We originate loans eligible for sale to Fannie Mae and Freddie Mac and government-insured or guaranteed loans, such as FHA and VA loans eligible for Ginnie Mae securities issuance. In 2008, the FHFA placed Fannie Mae and Freddie Mac into conservatorship and, as their conservator, FHFA controls and directs their operations.
In addition, an increase in delinquencies lowers the interest income we receive on cash held in collection and other accounts and increases our obligation to advance certain principal, interest, tax and insurance obligations owed by the delinquent mortgage loan borrower. An increase in delinquencies could therefore be detrimental to our business. Additionally, origination of loans can be seasonal.
In addition, an increase in delinquencies lowers the interest income we receive on cash held in collection and other accounts and increases our obligation to advance certain principal, interest, tax and insurance obligations owed by the delinquent mortgage loan borrower. An increase in delinquencies could therefore be detrimental to our business.
E&P should not be confused with earnings or net income under GAAP.
E&P should not be confused with earnings or net income under U.S. GAAP.
Our ability to grow our origination business has been, and may in the future be, adversely affected by conditions of the overall origination market, including elevated interest rates, which has, in turn, had an adverse affect on our results of operations.
Our ability to grow our origination business has been, and may in the future be, adversely affected by conditions of the overall origination market, including elevated interest rates, which has in the past had, and may in the future have, an adverse effect on our results of operations.
In addition, RHI and Dan Gilbert (or their transferees or other assignees) will not reimburse us for any payments previously made if any covered tax benefits are subsequently disallowed, except that any excess payments made to RHI or Dan Gilbert (or such holder’s transferees or assignees) will be netted against future payments that would otherwise be made under the Tax Receivable Agreement with RHI and Dan Gilbert, if any, after our determination of such excess.
In addition, RHI II (or its transferees or other assignees) will not reimburse us for any payments previously made if any covered tax benefits are subsequently disallowed, except that any excess payments made to RHI II (or its transferees or assignees) will be netted against future payments that would otherwise be made under the Tax Receivable Agreement with RHI II, if any, after our determination of such excess.
Maintaining and improving this technology will require significant capital expenditures and skilled personnel. 11 To the extent we are dependent on any particular technology or technological solution (whether developed internally or by a third-party vendor), we may be harmed if such technology or technological solution becomes non-compliant with existing industry standards, fails to meet or exceed the capabilities of our competitors’ equivalent technologies or technological solutions, becomes increasingly expensive to service, retain and update, becomes subject to third-party claims of intellectual property infringement, misappropriation or other violation, or malfunctions or functions in a way we did not anticipate that results in loan defects potentially requiring repurchase and/or indemnification.
Additionally, to the extent we are dependent on any particular technology or technological solution (whether developed internally or by a third-party vendor), we may be harmed if such technology or technological solution becomes non-compliant with existing industry standards, fails to meet or exceed the capabilities of our competitors’ equivalent technologies or technological solutions, becomes increasingly expensive to service, retain and update, becomes subject to third-party claims of intellectual property infringement, misappropriation or other violation, or malfunctions or functions in a way we did not anticipate that results in loan defects potentially requiring repurchase and/or indemnification.
The payments under the Tax Receivable Agreement are not conditioned upon RHI’s or Dan Gilbert’s continued ownership of us. 40 There is a possibility that under certain circumstances not all of the 90% of the applicable cash savings will be paid to the selling or exchanging holder of Holdings Units at the time described above.
The payments under the Tax Receivable Agreement are not conditioned upon RHI II’s continued ownership of us. There is a possibility that under certain circumstances not all of the 90% of the applicable cash savings will be paid to the selling or exchanging holder of Holdings LLC Units at the time described above.
Additional risks related to our funding and financing facilities include: • limitations imposed on us under the indentures governing our 2.875% Senior Notes due 2026, 3.625% Senior Notes due 2029, 3.875% Senior Notes due 2031 and our 4.000% Senior Notes due 2033 and other existing and future financing facilities that contain restrictive covenants and borrowing conditions that may limit our ability to raise additional debt; • a decline in liquidity in the credit markets; • prevailing interest rates; • the financial strength of the lenders from whom we borrow; • the decision of lenders from whom we borrow to reduce their exposure to mortgage loans and MSRs due to a change in such lenders’ strategic plan, future lines of business, regulatory restrictions or otherwise; • the amount of eligible collateral pledged on advance facilities, which may be less than the borrowing capacity of the facility; • the larger portion of our loan funding facilities that is uncommitted, versus committed; • more stringent financial covenants in such refinanced facilities, which we may not be able to achieve; and • accounting changes that impact calculations of covenants in our debt agreements.
Additional risks related to our funding and financing facilities include limitations imposed on us under existing and future financing facilities that contain restrictive covenants and borrowing conditions that may limit our ability to raise additional debt, including more stringent financial covenants in such refinanced facilities, which we may not be able to achieve, a decline in liquidity in the credit markets, increases in the prevailing interest rates, changes in the financial strength of our lenders, the decision of lenders from whom we borrow to reduce their exposure to mortgage loans and MSRs due to a change in such lenders’ strategic plan, future lines of business, regulatory restrictions or otherwise, the amount of eligible collateral pledged on advance facilities, which may be less than the borrowing capacity of the facility, the larger portion of our loan funding facilities that is uncommitted, versus committed, and accounting changes that impact calculations of covenants in our debt agreements.
Under the Exchange rules, a company of which more than 50% of the voting power is held by another person or group of persons acting together is a controlled company and may elect not to comply with certain corporate governance requirements, including the requirements that: • a majority of the board of directors consist of independent directors; • the nominating and corporate governance committee be composed entirely of independent directors; and • the compensation committee be composed entirely of independent directors. 43 These requirements will not apply to us as long as we remain a controlled company.
Under the Exchange rules, a company of which more than 50% of the voting power is held by another person or group of persons acting together is a controlled company and may elect not to comply with certain corporate governance requirements, including the requirements that: • a majority of the board of directors consist of independent directors; • the nominating and corporate governance committee be composed entirely of independent directors; • and the compensation committee be composed entirely of independent directors.
In addition, the Tax Receivable Agreement provides that in the case of a change in control of the Company or a material breach of our obligations under the Tax Receivable Agreement, we are required to make a payment to RHI and Dan Gilbert in an amount equal to the present value of future payments (calculated using a discount rate equal to the lesser of 6.50% or a rate based on the benchmark rate used to determine pricing or interest rates in a majority of our then-outstanding repurchase or warehouse agreements or other financing arrangements providing for the financing of mortgage loans plus 100 basis points, which may differ from our, or a potential acquirer’s, then-current cost of capital) under the Tax Receivable Agreement, which payment would be based on certain assumptions, including those relating to our future taxable income.
We could make payments to RHI II under the Tax Receivable Agreement that are greater than our actual cash tax savings and may not be able to recoup those payments, which could negatively impact our liquidity. 45 In addition, the Tax Receivable Agreement provides that in the case of a change in control of the Company or a material breach of our obligations under the Tax Receivable Agreement, we are required to make a payment to RHI II in an amount equal to the present value of future payments (calculated using a discount rate equal to the lesser of 6.50% or a rate based on the benchmark rate used to determine pricing or interest rates in a majority of our then-outstanding repurchase or warehouse agreements or other financing arrangements providing for the financing of mortgage loans plus 100 basis points, which may differ from our, or a potential acquirer’s, then-current cost of capital) under the Tax Receivable Agreement, which payment would be based on certain assumptions, including those relating to our future taxable income.
The high interest rate environment has adversely affected and may continue to adversely affect, our revenues or require us to increase marketing expenditures to increase or maintain our volume of mortgages and/or cut costs to maintain margins.
The volatility of the interest rate environment has in the past and may continue to adversely affect us and our revenues or require us to increase marketing expenditures to increase or maintain our volume of mortgages and/or cut costs to maintain margins.
We have experienced, and may in the future experience, service disruptions and failures caused by system or software failure, fire, power loss, telecommunications failures, human error or misconduct, external attacks (e.g., computer hackers, hacktivists, nation state-backed hackers), denial of service or information, malicious or destructive code, as well as natural disasters, health pandemics, strikes, and other similar events and our contingency planning may not be sufficient for all situations.
We have experienced, and may in the future experience, service disruptions and failures caused by system or software failure, fire, power loss, telecommunications failures, human error or misconduct, external attacks (e.g., computer hackers, hacktivists, nation state-backed hackers), denial of service or information, malicious or destructive code, as well as natural disasters, health pandemics, strikes, and other similar events and while our mitigation and recovery processes are designed to reduce the impact of these types of incidents, our contingency planning may not be sufficient for all situations.
However, certain laws and regulations may result in restrictions on Holdings’ ability to make distributions to us or the ability of Holdings’ subsidiaries to make distributions to it.
However, certain laws and regulations may result in restrictions on Rocket Limited Partnership’s ability to make distributions to us or the ability of Rocket Limited Partnership’s subsidiaries to make distributions to it.
The size of the refinance origination market has been subject to more significant fluctuations as a result of interest rate changes since refinancing an existing loan that has a lower interest rate could be less attractive and make qualifying for a loan more difficult.
Although interest rates have began to decline, the size of the refinance origination market continues to be subject to significant fluctuations as a result of interest rate changes since refinancing an existing loan that has a lower interest rate could be less attractive and make qualifying for a loan more difficult.
We rely on a combination of trademarks, service marks, copyrights, patents, trade secrets and domain names, as well as confidentiality procedures and contractual provisions to protect our intellectual property and proprietary rights.
Trademarks and other intellectual property and proprietary rights are important to our success and our competitive position. We rely on a combination of trademarks, service marks, copyrights, patents, trade secrets and domain names, as well as confidentiality procedures and contractual provisions to protect our intellectual property and proprietary rights.
If such events lead to a prolonged economic slowdown, recession or declining real estate values, they could impair the performance of our investments and harm our financial condition and results of operations, increase our funding costs, limit our access to the capital markets or result in a decision by lenders not to extend credit to us.
If such events lead to a prolonged economic slowdown, recession or declining real estate values, they could impair our ability to originate and service loans on profitable terms and harm our financial condition and results of operations, increase our funding costs, limit our access to the capital markets or result in a decision by lenders not to extend credit to us.
Moreover, any deterioration in market conditions that leads to an increase in loan delinquencies will result in lower revenue for loans we service for the GSEs, Ginnie Mae and other investors because we collect servicing fees from them only for performing loans.
As a result, our loan origination revenues vary from quarter to quarter. 29 Moreover, any deterioration in market conditions that leads to an increase in loan delinquencies will result in lower revenue for loans we service for the GSEs, Ginnie Mae and other investors because we collect servicing fees from them only for performing loans.
Increased mortgage defaults and foreclosures may adversely affect our business as they increase our expenses and reduce the number or mortgages service fees that are collected. Sustained elevated interest rates, coupled with increases in home prices, have made homeownership more expensive for borrowers.
Increased mortgage defaults and foreclosures may adversely affect our business as they increase our expenses and reduce the number or mortgages service fees that are collected. 27 Sustained elevated interest rates in 2022 and 2023, coupled with increases in home prices, made homeownership more expensive for borrowers and materially reduced the size of the refinance market.
As a result of the time and resources, including technical and staffing resources, that are required to perform these processes effectively, it may not be possible to replace existing models quickly enough to ensure that they will always properly account for the impacts of recent information and actions.
As a result of the time and resources, including technical and staffing resources, that are required to perform these processes effectively, it may not be possible to replace existing models quickly enough to ensure that they will always properly account for the impacts of recent information and actions. 32 A substantial portion of our assets, including our MSRs, are measured at fair value.
To the extent that we need funds, and Holdings or its subsidiaries are restricted from making such distributions, we may not be able to obtain such funds on terms acceptable to us or at all and as a result could suffer an adverse effect on our liquidity and financial condition.
To the extent that we need funds, and Rocket Limited Partnership or its subsidiaries are restricted from making such distributions, we may not be able to obtain such funds on terms acceptable to us or at all and as a result could suffer an adverse effect on our liquidity and financial condition. 44 We may be required to pay RHI II and Mr.
Our mortgage loan origination business consists of providing purchase mortgages to homebuyers, refinancing existing loans and originating second lien home equity loans. The origination of purchase mortgages can be influenced by other stakeholders in the home-buying process such as realtors and builders. Therefore, our ability to acquire new purchase mortgage clients can be impacted by our relationships with such stakeholders.
Our mortgage loan origination business consists of providing purchase mortgages to homebuyers, refinancing existing loans and originating second lien home equity loans. The origination of purchase mortgages can be influenced by other stakeholders in the home-buying process such as agents, realtors and builders.
Of the $581.2 million Tax receivable agreement liability recorded, we estimate that, as a result of the amount of the increases in the tax basis in Holdings’ assets from the purchase of Holdings Units (along with the corresponding shares of our Class D common stock) in connection with the initial public offering, the over-allotment option (Greenshoe), and the March 2021 paired interest exchange, assuming no material changes in the relevant tax law and that we will have sufficient taxable income to utilize all of the tax attributes covered by the Tax Receivable Agreement when they are first available to be utilized under applicable law, future payments to RHI and Dan Gilbert under the Tax Receivable Agreement would aggregate to approximately $337.4 million over the next 20 years and for yearly payments over that time to range between zero to $25.0 million per year.
Of the $590 million Tax Receivable Agreement liability recorded as of December 31, 2025, we estimate that, as a result of the amount of the increases in the tax basis in Holdings LLC’s assets from the purchase of Holdings LLC Units (along with the corresponding shares of the Class D common stock) in connection with the IPO, the over-allotment option (greenshoe) and the RHI March 2021 paired interest exchange, assuming no material changes in the relevant tax law and that we will have sufficient taxable income to utilize all of the tax attributes covered by the Tax Receivable Agreement when they are first available to be utilized under applicable law, future payments to RHI II under the Tax Receivable Agreement would aggregate to approximately $590 million over the next 20 years and for yearly payments over that time to range between zero to $200 million per year.
Loans originated outside of Fannie Mae, Freddie Mac and the guidelines of the Federal Housing Administration (“FHA”), United States Department of Agriculture (“USDA”), or VA (for loans securitized with Ginnie Mae) are sold to private investors and mortgage conduits, including our loan securitization company, Woodward Capital Management LLC, which primarily securitizes such non-GSE loan products.
Loans originated outside of Fannie Mae, Freddie Mac and the guidelines of the FHA, USDA, or the VA (for loans securitized with Ginnie Mae) are sold to private investors and mortgage conduits, including our loan securitization company, Woodward Capital Management LLC, which primarily securitizes such non-GSE loan products.
Reliance on digital platforms and app marketplaces poses growing risks to client acquisition and business growth. We rely heavily on our ability to attract and convert online consumers into loan applicants and clients through our websites and mobile applications in a cost-effective manner.
Reliance on digital platforms and app marketplaces poses growing risks to client acquisition and business growth. We rely heavily on our ability to attract and convert online consumers into loan applicants and clients through our websites and mobile apps (such as the Rocket Mortgage, Redfin and Mr. Cooper apps) in a cost-effective manner.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

29 edited+14 added−13 removed17 unchanged
Biggest changeOn a quarterly basis we obtain an independent third-party valuation to corroborate the value estimated by our internal model. All of our MSRs are classified as Level 3 assets. Changes in economic and other relevant conditions could cause our assumptions, including prepayment speeds, to be different than our estimates.
Biggest changeWe obtain independent third-party valuations, industry surveys and other available market data quarterly to assess the reasonableness of the fair value calculated by the cash flow model as well as the underlying assumptions used. All of our MSRs are classified as Level 3 assets.
Interest rate risk also occurs in periods where changes in short-term interest rates result in mortgage loans being originated with terms that provide a smaller interest rate spread above the financing terms of our loan funding facilities, which can negatively impact our net interest income.
Interest rate risk also occurs in periods where changes in short-term interest rates result in mortgage loans being originated with terms that provide a smaller interest rate spread above the financing terms of our loan funding facilities, which can negatively impact Interest income, net .
Because origination volumes tend to increase in declining interest rate environments and decrease in increasing rate environments, we believe that retained servicing provides a natural hedge to our origination business through the natural counter-cyclicality of servicing and mortgaging originations.
Because origination volumes tend to increase in declining interest rate environments and decrease in increasing rate environments, we believe that retained servicing provides a natural economic hedge to our origination business through the natural counter-cyclicality of servicing and mortgaging originations.
We manage this risk by selecting only counterparties that we believe to be financially strong, spreading the risk among many such counterparties and entering into netting agreements with the counterparties as appropriate. 71 In accordance with Treasury Market Practices Group’s recommendation, we execute Securities Industry and Financial Markets Association Master Securities Forward Trading Agreements with all material trading partners.
We manage this risk by selecting only counterparties that we believe to be financially strong, spreading the risk among many such counterparties and entering into agreements with the counterparties as appropriate. In accordance with Treasury Market Practices Group’s recommendation, we execute Securities Industry and Financial Markets Association Master Securities Forward Trading Agreements with all material trading partners.
With our financing facilities, we seek to mitigate this risk by ensuring that we have sufficient borrowing capacity with a variety of well-established counterparties to meet our funding needs. Critical Accounting Policies The preparation of financial statements in conformity with U.S.
With our financing facilities, we seek to mitigate this risk by ensuring that we have sufficient borrowing capacity with a variety of well-established counterparties to meet our funding needs. Critical Accounting Policies and Estimates The preparation of financial statements in conformity with U.S.
For example, the fair value of MSRs are driven primarily by interest rates, which impact the likelihood of loan prepayments and refinancing. In periods of rising interest rates, the fair value of the MSRs generally increases as prepayments decrease, and therefore the estimated life of the MSRs and related expected cash flows increase.
For example, changes in the fair value of MSRs are primarily driven by interest rate changes, which impact the likelihood of loan prepayments and refinancing. In periods of rising interest rates, the fair value of the MSRs generally increases as prepayments decrease, and therefore the estimated life of the MSRs and related expected cash flows increase.
Changes in fair value of mortgage loans held for sale are included in Gain on sale of loans, net in the Consolidated Statements of Income (Loss) and Comprehensive Income (Loss). Changes in economic or other relevant conditions could cause our assumptions with respect to market prices of securities backed by similar mortgage loans to be different than our estimates.
Changes in fair value of MLHFS are included in Gain on sale of loans, net in the Consolidated Statements of Income (Loss) and Comprehensive Income (Loss). Changes in economic or other relevant conditions could cause our assumptions with respect to market prices of securities backed by similar mortgage loans to be different than our estimates.
Because substantially all of our production is deliverable to Fannie Mae, Freddie Mac, and Ginnie Mae, we utilize forward agency or Ginnie Mae To Be Announced (“TBA”) securities as our primary hedge instrument, along with U.S. Treasury futures, and other non-mortgage hedging instruments, to mitigate basis risk.
Because substantially all of our production is deliverable to Fannie Mae, Freddie Mac, and Ginnie Mae, we utilize forward TBA securities as our primary hedge instrument, along with Treasury futures, and other non-mortgage hedging instruments, to mitigate basis risk.
For the year ended December 31, 2024, our clients’ weighted average credit score was 737 and their approximate average loan size was $277,000 wit h a weighted average loan-to-value ratio of approximately 73.2%. Counterparty risk We are subject to risk that arises from our financing facilities and interest rate risk hedging activities.
For the year ended December 31, 2025, our clients’ weighted average credit score was 741 and their approximate average loan size was $285,266 wit h a weighted average loan-to-value ratio of approximately 72.4%. Counterparty risk We are subject to risk that arises from our financing facilities and interest rate risk hedging activities.
These tax laws are often complex and may be subject to different interpretations. 73 Deferred income taxes arise from temporary differences between the financial statement carrying amount and the tax basis of assets and liabilities. In evaluating our ability to recover our deferred tax assets within the jurisdiction from which they arise, we consider all available positive and negative evidence.
Deferred income taxes arise from temporary differences between the financial statement carrying amount and the tax basis of assets and liabilities. In evaluating our ability to recover our deferred tax assets within the jurisdiction from which they arise, we consider all available positive and negative evidence.
The fair value of loans held for sale that trade in active secondary markets is estimated using Level 2 measurements derived from observable market data, including: (i) 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, and (ii) recent observable market trades from similar loans, adjusted for credit risk and other individual loan characteristics.
MLHFS consist of originated and purchased mortgage loans with the intent to sell in the secondary market as well as mortgage loans that have been repurchased from investors with the intent to resell into the secondary market. 79 The fair value of loans held for sale that trade in active secondary markets is estimated using Level 2 measurements derived from observable market data, including: (i) 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, and (ii) recent observable market trades from similar loans, adjusted for credit risk and other individual loan characteristics.
Our critical accounting policies and estimates are discussed below and relate to fair value measurements, particularly those determined to be Level 2 and Level 3 as discussed in Note 2, Fair Value Measurements, of the consolidated financial statements included elsewhere in this Form 10-K.
Our critical accounting policies and estimates are discussed below and relate to fair value measurements, particularly those determined to be Level 2 and Level 3 as discussed in Note 3, Fair Value Measurements, of the Consolidated Financial Statements included elsewhere in this Form 10-K. Mortgage loans held for sale We have elected to record MLHFS at fair value.
Interest rate risk We are subject to interest rate risk which may impact our origination volume and associated revenue, MSR valuations, IRLCs and mortgage loans held for sale valuations, and the net interest margin derived from our funding facilities.
Interest rate risk We are subject to interest rate risk which may impact our origination volume (IRLCs and MLHFS ) and associated revenue reflected in Gain on sale, net, MSR valuations, and the net interest margin derived from our funding facilities.
Increases in the market yields of similar mortgage loans result in a lower mortgage loans held for sale fair value. Mortgage servicing rights We have elected to record MSRs at fair value.
Increases in the market yields of similar mortgage loans result in a lower MLHFS fair value. Mortgage servicing rights We have elected to record all MSRs at fair value. We generally retain the servicing rights for existing residential mortgage loans sold to a third party.
Basis risk in this case is the risk that the hedged instrument’s price does not move in parallel with the increase or decrease in the market price of the hedged financial instrument.
Basis risk is the risk that the hedged asset's price does not move in parallel with the increase or decrease in the market price of the derivative financial instrument used to economically hedge such asset.
By fixing the future sale price, we reduce our exposure to changes in mortgage values between interest rate lock and sale. Our non-agency, non-Ginnie Mae production is hedged with a combination of TBAs and whole loan forward commitments. To mitigate the TBA basis risk, we look to sell most of our non-agency, non-Ginnie Mae production forward to our various buyers.
By managing the future sale price, we reduce our exposure to changes in mortgage values between interest rate lock date and sale of the originated loan in the secondary market. Our non-agency production is hedged with a combination of TBAs, Treasury futures, and whole loan forward commitments.
We actively manage our MSR portfolio and from time to time identify assets for sale that do not meet our MSR strategy. We use forward loan purchase commitments to economically hedge the risk of potential changes in the value of MSR assets that have been identified for sale and mitigate interest rate risk for this portion of the MSR portfolio.
We actively manage our MSR portfolio and from time to time identify assets for sale that do not meet our MSR strategy. We use derivative financial instruments to economically hedge the risk of potential changes in the value of MSR assets, mitigating interest rate risk for the MSR portfolio. Our IRLCs and MLHFS are exposed to interest rate volatility.
To the extent that we have a master netting agreement in place with a counterparty, such master netting agreement contains a legal right to offset amounts due to and from the same counterparty, further mitigating counterparty exposure.
To the extent that we have a master netting agreement in place with a counterparty, such master netting agreement contains a legal right to offset amounts due to and from the same counterparty, further mitigating counterparty exposure. We incurred no losses due to nonperformance by any of our cou nterparties during the years ended December 31, 2025 and 2024.
Credit risk We are subject to credit risk, which is the risk of default that results from a borrower’s inability or unwillingness to make contractually required mortgage payments. Generally, all loans sold into the secondary market are sold without recourse. For such loans, our credit risk is limited to repurchase obligations due to fraud or origination defects.
Generally, all loans sold into the secondary market are sold without recourse. For such loans, our credit risk is limited to repurchase obligations due to fraud or origination defects.
Our forward commitments are valued based on quoted prices for similar assets in an active market with inputs that are observable and are classified as Level 2 assets and liabilities. Changes in economic or other relevant conditions could cause our assumptions with respect to forward commitments to be different than our estimates.
Our forward commitments and Treasury futures are valued based on quoted prices for similar assets in an active market with inputs that are observable and are classified as Level 2 assets and liabilities.
Our IRLCs and mortgage loans held for sale are exposed to interest rate volatility. During the origination, pooling, and delivery process, this pipeline value rises and falls with changes in interest rates. To mitigate this exposure, we employ a hedge strategy designed to minimize basis risk and maximize effectiveness.
From interest rate lock date through loan origination and subsequent sale in the secondary market, the Pipeline value rises and falls with changes in interest rates. To mitigate this exposure, we employ a Pipeline hedge strategy designed to minimize basis risk and maximize effectiveness.
Commitments to fund residential mortgage loans with our potential borrowers are commitment agreements to lend funds to these potential borrowers at a specified interest rate within a specified period of time. The fair value of IRLCs is derived from the fair value of similar mortgage loans or bonds, which is based on observable market data.
Commitments to fund residential mortgage loans with our potential borrowers or commitments to purchase a loan from a third-party originator are commitment agreements to lend funds to these potential borrowers or originators at a specified interest rate within a specified period of time.
We expect that the changes in fair value of the forward commitments will either substantially or partially offset the changes in fair value of the IRLCs, uncommitted mortgage loans held for sale and MSR assets that we intend to sell.
We expect that the changes in fair value of the forward commitments will either substantially or partially offset the changes in fair value of the Pipeline and MSRs.
Derivative financial instruments We enter into IRLCs, forward commitments to sell and purchase mortgage loans, which are considered derivative financial instruments. Our derivative financial instruments are accounted for as free-standing derivatives and are included in the Consolidated Balance Sheets at fair value.
Our derivative financial instruments are accounted for as free-standing derivatives at fair value and are included on the Consolidated Balance Sheets within Derivative assets, at fair value and Derivative liabilities, at fair value.
Income taxes Our income tax expense, deferred tax assets and liabilities and reserves for unrecognized tax benefits reflect management’s best assessment of estimated current and future taxes to be paid. We are subject to income taxes predominantly in the United States and Canada.
Changes in economic or other relevant conditions, including changes in interest rates, could cause our assumptions with respect to derivative financial instruments to be different than our estimates. Income taxes Our income tax expense, deferred tax assets and liabilities and reserves for unrecognized tax benefits reflect management’s best assessment of estimated current and future taxes to be paid.
MSRs are recognized as a component of the gain on sale of loans when loans are sold and the associated servicing rights are retained. 72 Subsequent changes in fair value of MSRs due to the collection and realization of cash flows and changes in model inputs and assumptions are recognized in current period earnings and included as a separate line item in the consolidated statements of income and comprehensive income.
We have elected to measure all MSRs at fair value subsequent to sale or acquisition, with all changes in fair value (due to the collection and realization of cash flows and changes in model inputs and assumptions) recognized in current period earnings within Change in fair value of MSRs, net in the Consolidated Statements of Income (Loss) and Comprehensive Income (Loss).
We record interest and penalties related to uncertain income tax positions in income tax expense. 74
We record interest and penalties related to uncertain income tax positions in income tax expense. Acquisition Accounting The Company recorded the assets and liabilities of the acquired businesses at their fair value as of the date of acquisition.
Changes to the fair value of IRLCs are recognized based on changes in interest rates, changes in the probability that the commitment will be exercised (pull through factor) and the passage of time. The expected net future cash flows related to the associated servicing of the loan are included in the fair value measurement of IRLCs.
Changes to the fair value of IRLCs and LPCs are recognized based on changes in the fair value of the underlying loan, the inherent value of servicing (SRP), and adjustments for the estimated pull-through rate.
The cash flows related to forward commitments to sell and purchase mortgage loans are included within the Gain on sale of loans excluding fair value of MSRs, net and the Change in fair value of MSRs, net in the Consolidated Statement of Cash Flows.
The changes in value of all derivative financial instruments related to the Pipeline are recorded as Gain on sale of loans, net on the Consolidated Statements of Income (Loss) and Comprehensive Income (Loss).
Removed
Derivative assets in the Consolidated Balance Sheets represent derivative contracts in a gain position net of loss positions with the same counterparty and, therefore, also represent our maximum counterparty credit risk. We incurred no losses due to nonperformance by any of our cou nterparties during the years ended December 31, 2024 and 2023.
Added
The following table summarizes the estimated change in the fair value of our assets and liabilities sensitive to interest rates as of December 31, 2025 given hypothetical instantaneous parallel shifts in the yield curve. Actual results could differ materially.
Removed
Mortgage loans held for sale We have elected to record mortgage loans held for sale at fair value.
Added
December 31, 2025 Down 25 Basis Points Up 25 Basis Points Increase (decrease) in assets MLHFS, at fair value $ 171 $ (175) Derivative assets, at fair value 67 (79) MSRs, at fair value (541) 490 Total change in assets (303) 236 Increase (decrease) in liabilities Derivative liabilities, at fair value (224) 190 Total change in liabilities (224) 190 Total net change $ (79) $ 46 78 Credit risk We are subject to credit risk, which is the risk of default that results from a borrower’s inability or unwillingness to make contractually required mortgage payments.
Removed
Included in mortgage loans held for sale are loans originated as held for sale that are expected to be sold into the secondary market and loans that have been previously sold and repurchased from investors that management intends to resell into the secondary market, which are all recorded at fair value.
Added
We recognize MSRs in such transfers that meet the accounting requirements for sale treatment at fair value on the balance sheet and as a component of gain on sale. Additionally, we may acquire the rights to service residential mortgage loans from third parties.
Removed
Fair value is determined using a valuation model that calculates the present value of estimated future net servicing fee income. The model uses estimates of prepayment speeds, discount rate, cost to service, escrow account earnings, contractual servicing fee income, among others. These estimates are supported by market and economic data collected from various outside sources.
Added
We estimate the fair value of these MSRs using a discounted cash flow model, which incorporates prepayment speeds, OAS, costs to service, delinquencies, ancillary revenues, recapture rates and other assumptions that management believes are consistent with the assumptions that other similar market participants use in valuing the MSRs.
Removed
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, which causes accelerated MSR amortization.
Added
The key assumptions to determine fair value include prepayment speeds, OAS and cost to service. The discounted cash flow model uses asset-specific collateral data and market inputs for interest and discount rates. In addition, the modeling of MSRs is complex because of the high number of variables that drive cash flows associated with MSRs.
Removed
Increases in the discount rate result in a lower MSR value and decreases in the discount rate result in a higher MSR value.
Added
For the impact of changes in estimates on MSRs at fair value, see N ote 4, Mortgage Servicing Rights and Related Liabilities . Derivative financial instruments Derivative instruments utilized by the Company primarily include IRLCs, LPCs, TBAs, purchase and sale commitments, and Treasury futures.
Removed
See Note 3, Mortgage Servicing Rights of the consolidated financial statements for an illustration of the hypothetical effect on the fair value of the MSRs using various unfavorable variations of the discount rate and prepayment speeds used in valuing MSRs.
Added
The changes in the value of all derivative financial instruments economically hedging the MSR portfolio are recorded in Change in fair value of MSRs, net on the Consolidated Statements of Income (Loss) and Comprehensive Income (Loss).
Removed
Given the unobservable nature of the pull through factor, IRLCs are classified as Level 3.
Added
The fair value of IRLCs and LPCs is derived from the fair value of similar mortgage loans or bonds, which is based on observable market data.
Removed
Outstanding IRLCs and mortgage loans held for sale not yet committed to trade expose us to the risk that the price of the mortgage loans held and mortgage loans underlying the commitments might decline due to increases in mortgage interest rates during the life of the commitment.
Added
Given the unobservable nature of the SRP and pull through rate, IRLCs and LPCs are classified as Level 3. 80 To manage exposure to interest rate risk and changes in the fair value of the Pipeline and MSRs, we use additional derivative financial instruments, primarily TBA purchase and sale commitments, and Treasury futures.
Removed
To protect against this risk, we use forward loan sale commitments to economically hedge the risk of potential changes in the value of the loans.
Added
We are subject to income taxes predominantly in the United States and Canada. These tax laws are often complex and may be subject to different interpretations.
Removed
MSR assets (including the MSR value associated with outstanding IRLCs) that we intend to sell expose us to the risk that the price of MSRs might decline due to decreases in mortgage interest rates prior to the sale of these assets.
Added
To determine the financial statement impact of accounting for income taxes, the Company must make assumptions and judgments about how to interpret and apply these complex tax laws to numerous transactions and business events, as well as make judgments regarding the timing of when certain items may affect taxable income in the United States and Canada.
Removed
To protect against this risk, we use forward loan purchase commitments to economically hedge the risk of potential changes in the value of the MSR assets that have been identified for sale.
Added
The fair value of acquired intangible assets involves estimates based on third-party valuation using forms of the income approach and the cost approach, which require forecasts of expected future cash flows or replacement costs. There are significant inputs used in valuing the intangible assets which are not observable in the market.
Removed
Decreases in the market yields of mortgage loans result in a lower fair value for forward commitments to sell mortgage loans and increases in market yields of mortgage loans result in lower fair value for forward commitments to purchase mortgage loans.
Added
Upon completion of each acquisition, the Company recorded goodwill based on preliminary fair value of net assets acquired. The Company has a measurement period, up to one year after the date of acquisition, to make acquisition accounting adjustments for additional information that existed at the date of acquisition.
Added
Adjustments to acquisition accounting could result in changes to the preliminary fair value of net assets acquired and resulting goodwill. Refer to Note 2 , Acquisitions of the Notes to Consolidated Financial Statements for further details. 81

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