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More than 2 million homeowners who make monthly mortgage payments to Rocket Mortgage will be offered free premium accounts to use the personal finance app Truebill as the mortgage lender’s parent, Rocket Companies, continues to reposition itself as a fintech platform.
Rocket acquired Truebill in December for $1.27 billion, giving the company an inside track to market real estate services, mortgages and other loans to millions of Truebill members. Only about one in four Truebill clients are homeowners, Rocket CEO Jay Farner said at the time, opening up a promising avenue to market purchase mortgages to renters when they’re ready to buy a home.
Truebill, which will rebrand as Rocket Money in August, has proven popular with consumers looking for a convenient way to manage their personal finances and subscription services. The rebranded Rocket Money will connect with the rest of the Rocket platform, allowing Rocket to market mortgages and other services to users.
“The relationships we build and the insights we get through Rocket Money enable Rocket Companies to create bespoke experiences for our clients – ensuring we are offering the right products at the right time,” Farner said Tuesday in announcing the rebranding and tighter integration of Truebill into the Rocket platform.
While providing home loans through Rocket Mortgage is Rocket’s biggest business, it also helps consumers line up real estate services, personal loans, used cars and rooftop solar systems through subsidiaries Rocket Homes, Rocket Loans, Rocket Auto and Rocket Solar.
With Truebill’s new single sign-on capabilities, consumers can create one account and use that account across the entire Rocket platform.
“We have been able to help consumers save hundreds of millions of dollars as Truebill,” said co-founder and CEO Haroon Mokhtarzada in a statement. “Now, as Rocket Money, our members will have easier access to home loans, real estate services, personal loans and more all through a closer connection with our sister companies.”
Truebill had 2.5 million members when Rocket acquired the personal finance app. During the first three months of 2022, Rocket says Truebill grew its member base to 3.4 million members — including 1.7 million who pay for premium services.
The app could see another big boost in members with Rocket offering free Rocket Money premium accounts to 2.6 million Rocket Mortgage servicing clients — homeowners who are making monthly payments to Rocket on $545.8 billion in outstanding home loans as of March 31. The free premium accounts, good for the life of their mortgage, provide automated subscription cancellations, advanced budgeting, full credit reporting, smart savings accounts and net worth tracking, among other services.
Moving beyond mortgages
Rocket’s Truebill acquisition was part of a broader effort to transform the company’s stable of more than a dozen brands into a fintech platform, as rising interest rates put a damper on Rocket’s profitable mortgage refinancing business.
As homeowners rushed to refinance at historic low rates during the pandemic, Rocket funded $320 billion in mortgage loans in 2020, more than double the company’s 2019 total of $145 billion.
While mortgage origination volume was up nearly 10 percent in 2021, less profitable purchase loans accounted for a greater proportion of the mix. As a result, 2021 revenue was down 17 percent to $12.9 billion, with net income falling by 35 percent to $6.07 billion.
With mortgage originations falling 49 percent from a year ago during the first quarter, Rocket is hoping to slash $180 million in annual expenses largely through buyout offers it’s made to about 2,000 workers, most of whom are employed by Rocket Mortgage’s operations team and Rocket’s title insurance and settlement services subsidiary Amrock.
Rocket kicked off the new year by announcing leadership changes across several of its businesses and repositioning itself as a fintech platform, with the stated goal of surpassing rival Wells Fargo to become the number one retail provider of purchase mortgages in the next 12 to 18 months.
In a bid to do more business with homebuyers taking out purchase mortgages, Rocket has been building stronger ties to real estate agents and independent mortgage brokers who are well connected into local markets and making its mortgage technology available to banks and credit unions. Last August, Rocket Homes announced that it would hire on-staff real estate agents and launch an iBuyer program.
Investors seem to be warming to that story in recent weeks. After going public in an IPO priced at $18 per share in August 2020, shares in Rocket Companies briefly soared above $40 a share in March 2021. The company’s share price has been in a steady decline since then. But after hitting an all-time low of $6.27 on June 17, shares in Rocket have rebounded by 50 percent and were trading above $9.40 Wednesday.