Rocket Mortgages: Are They the Only Custodians of Their Loans?

Rocket Mortgage is a well-known online mortgage lender that has gained popularity due to its fast and convenient loan application process. As a subsidiary of Quicken Loans, Rocket Mortgage has positioned itself as a leading player in the mortgage industry, providing a fully digital platform to bring home financing to a wide range of borrowers. However, the question often arises as to whether Rocket Mortgage is the sole custodian of the loans it originates.

To understand the loan management aspect of Rocket Mortgage, we must first clarify the difference between a lender and a loan servicer. A mortgage lender like Rocket Mortgage is responsible for originating, processing, and funding the loan. On the other hand, a loan servicer is the company that manages the day-to-day administration of the loan, including collecting payments, managing escrow accounts, and processing customer requests.

Although Rocket Mortgage is the primary lender for the loans it originates, the Company does not necessarily service all of the loans itself. Like many other lenders in the mortgage industry, Rocket Mortgage may elect to delegate the servicing rights of some or all of its loans to other financial institutions or third party credit service providers sell. This means that borrowers who get their mortgage through Rocket Mortgage may find that another company is servicing their loans after closing.

The decision to sell servicing rights is a common practice in the mortgage industry and offers several advantages to lenders like Rocket Mortgage. By selling processing rights, lenders can free up capital to make more loans, reduce the risk associated with long-term loan servicing, and focus on their core competency, mortgage origination. Additionally, by selling processing rights, lenders can take advantage of the competitive loan processing market, where specialized service providers can often offer more efficient and cost-effective processing solutions.

It is important to note that the sale of service rights does not affect borrower credit terms. Regardless of whether Rocket Mortgage services the loan or not, borrowers are still bound by the original loan agreement, including the interest rate, repayment terms and other terms.

However, changing loan servicers may result in borrowers having to make their mortgage payments to a different company and directing their inquiries to a new customer service team. This transition can sometimes cause confusion or concern for borrowers who may have developed a relationship with Rocket Mortgage during the lending process. Nonetheless, the new loan servicer is committed to honoring the terms of the loan agreement and providing the same level of service and support that borrowers would expect from Rocket Mortgage.

Rocket Mortgage aims to offer its borrowers transparency about the possible sale of service rights. As part of the loan application process, borrowers are informed of the possibility that their loan will be serviced by another company. In addition, upon completion, borrowers will receive a notification notifying them of any change of credit servicer and providing the contact information of the new credit servicer.

In summary, while Rocket Mortgage is a well-known online mortgage lender, it does not exclusively service all of the loans it originates. Like other lenders, Rocket Mortgage may choose to sell servicing rights to other financial institutions or third party service providers. However, borrowers can rest assured that their loan terms will remain the same and they will receive the same level of service and support from the new loan servicer.
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