Rocket companies CEO Jay Farner credited the mortgage lender’s investment in technology for the record quarter reported the day before while appearing on CNBC Wednesday.
The Detroit-based company, which began trading in the public market in August, posted triple-digit credit volumes in the third quarter in a low interest rate environment sparked by the coronavirus pandemic.
“It’s all about our platform,” Farner said in an interview with “Bad money“Host Jim Cramer.” This platform enables us to scale. “
Rocket, which focuses on technology to drive real estate businesses, pumped around $ 500 million into its platform last year, he said. The company, parent company of Quicken Loans Inc, operates through its brands Rocket Mortgage, Rocket Homes and Rocket Auto.
For the third quarter that ended in September, Rocket recorded $ 89 billion in closed loan credit, up 122% year over year when the US had a strong economy. The strong performance is due to a low interest rate environment, which has triggered a buying spree in recent months. Demand due to low interest rates has driven property prices higher.
However, mortgage data shows that the demand for home purchases fell last week to its lowest level in half a year The application rates remained more than double-digit higher than levels from a year ago.
“We made about $ 15 billion a month at the beginning of the year and over $ 30 billion in a month in closed volume in October. That’s exactly that technology combined with the great brand we have,” said Farner.
Rocket, the country’s largest mortgage lender by volume in 2019, had revenue of $ 4.7 billion for the quarter, up 163% from the year-ago quarter. The company also had adjusted earnings per share of $ 1.21.
However, stocks fell 2.5% in Wednesday’s session. The closing price of $ 21.06 is up 17% from the first trade in the market in July.
Farner reiterated his company’s plans to capture 25% of the mortgage market by 2030, citing partnerships with Realtor.com, Intuit and an upcoming partnership with an unnamed “major financial institution” next year. The company claims to have at least 9% of the market.
“We have all sorts of advantages here,” he said. “The advantage for us in terms of growing this business is 25%. [mortgage market share] here until 2030. “