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Quicken Loans IPO would set fintech valuation tone and make mortgages cool again

Quicken Loans IPO would set fintech valuation tone and make mortgages cool again

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A Quicken Loans IPO valuing the company in the tens of billions may be imminent.

If true, this is huge for two reasons: as America’s largest mortgage lender, Quicken Loans would set the challenger bank valuation tone, and being public would give other fintech disruptors an important lens on the most complex consumer finance product.

Let’s break it all down, including whether an IPO brand might be Quicken or Rocket.

Top Challenger Banks Becoming Incumbents

Here’s how challenger banks have evolved as the fintech disruption cycle has matured:

  • Tout how [insert consumer finance products here] are broken, and you’re going to fix it.
  • Launch with a single product like personal or student loans, deposits or asset management/trading.
  • Raise hundreds of millions of dollars.
  • Use most of that funding to acquire millions of customers by telling them you’re better than a bank.
  • Raise hundreds of millions more dollars on multi-billion dollar valuations.
  • Expand into other products.
  • Become a bank.
  • Or be acquired by a bank if your valuation isn’t too lofty.
  • Or warm to IPO prospects if other IPOs play.

Top challenger banks are accelerating as COVID-19 plays out, and they’re rapidly becoming incumbents. A few examples:

  • Robinhood fundraising and user growth are off the charts despite early-COVID-19 outages.
  • Revolut has also raised crazy money, built its management team, hit 12 million customers, and launched a super app to integrate more banking services.
  • Chime won the day on rapid-response to get COVID-19 stimulus checks to people early.
  • Varo is this close to being a full fledged bank.

These and other fintech leaders have done a lot for how young they are.

Now the question is whether they can meet customers’ lifelong budgeting, saving, borrowing, and investing needs. Part of the answer lies in the complexity of scale mortgage lending, which Quicken Loans mastered over the last 35 years.

Is Quicken Loans Seriously America’s Largest Mortgage Lender?

In 2019, Quicken Loans funded $145.8 billion in mortgages overall (per Inside Mortgage Finance), placing it second behind Wells Fargo’s $201.8 billion in overall funded volume.

Julian Hebron
Columnist

And on IMF’s 2019 retail-only mortgage fundings list (which excludes certain sales channels), Quicken Loans funded $142.8 billion placing it above Wells Fargo’s $94.25 billion. Plus, Quicken Loans beat Wells in overall mortgage fundings for Q1 2020 ($61.7 billion vs. $47.6 billion).

Do you have any idea how hard it is to fund that many mortgages in a year?

To put this in perspective, when Zillow entered the mortgage business last year, its five-year Wall Street guidance pencils to about $7 billion in annual fundings, and the company is nowhere near that after 18 months, even with all its marketing muscle.

Sprawling federal and state regulations in both housing and banking/lending make mortgages the gold standard of difficulty in consumer finance. Gathering deposits or doing student and personal loans is a breeze compared to mortgages. As I said recently in this column:

“It’s way harder than it looks to fund even $5 billion. It gets exponentially harder when you go above $10 billion, and then again for $20 billion. Then if you almost double that again, you’re in the nation’s top 10 mortgage lenders, all of which took one to three decades to build organically and through mergers and acquisitions.”

Quicken Loans is a good example here.

Quicken Loans IPO After Decades Of Innovation?

Dan Gilbert founded Quicken Loans in 1985 as a branch-based mortgage lender, then sold to Intuit in 1999.

Yes, the same Intuit that bought Credit Karma for $7.1 billion just before COVID-19 hit America.

Yes, the “Quicken” part of Quicken Loans’ brand has been licensed from Inuit all these years.

And yes, this is one of the reasons I still believe Quicken Loans should just rebrand to Rocket once and for all – and may do so with an IPO (more on this below). 

But back to the timeline…

In 1999, Quicken Loans made an early pivot from branch-based to internet-based lending. This made them way more nimble through years of re-regulation after the 2008 crisis.

The biggest consumer protection regulation deadline of all (TRID, aka The Reason I Drink) came in October 2015.

Other lenders spent years and most resources scrambling on TRID, but it was a breeze for Quicken Loans, and they launched Rocket Mortgage the very next month in November 2015.

This gave them a multi-year jump on modernizing mortgages and growing market share.

The rest is history. America’s largest mortgage lender. Critical lessons on scale fintech marketing. And a core executive bench that’s been schooling the industry for decades.

What Goes Into A Quicken Loans IPO Valuation?

Mortgage-only shops are great cash flow businesses for owners, but mostly don’t have fintech-like valuations because of the highly cyclical rate market.

An IPO could value Quicken Loans in the tens of billions of dollars, setting a new tone for valuations.

Being a consumer-direct category leader with proprietary tech and a household-name brand would certainly bring fintech sheen to a Quicken Loans IPO.

They’ve spent billions building both Quicken Loans and Rocket Mortgage brands, and my money is on a Rocket IPO that includes Rocket Mortgage for home loans, Rocket Homes for home buying/selling services, Rocket Loans for personal loans, and Rocket HQ for credit monitoring and financial advice.

Loan servicing may help valuation too. As rates bottom in 2020, today’s mortgages are less likely to pay off, making servicing more valuable.

Quicken Loans services $343.6 billion in mortgages as of 1Q 2020. While this pales in comparison to top-ranked Wells Fargo’s $1.38 trillion in servicing, it’s still a strong base.

And Quicken Loans funded $61.7 billion in Q1 2020 alone, so you can see how they could grow a servicing portfolio of record low rates fast if they wanted to.

Then of course, there’s the multi-billion dollar question for Quicken Loans — and other top mortgage lenders and challenger banks.

How Soon Will Quicken Loans & Challenger Banks Have Full Product Sets?

Scale customer acquisition is one key reason top VC-backed challenger banks have multi-billion dollar valuations. Get millions of customers now, expand the product set later.

To date, no challenger bank has made meaningful progress expanding to mortgage because it’s a much harder product and compliance game at scale.

Yet Quicken Loans was a customer acquisition big dog years before the current crop of hot challenger banks. And the core Quicken/Rocket companies are super deep in the customer’s home buying, financing, improving, selling, and financial management journey, which does three things:

  1. Diversifies revenue
  2. Makes core mortgage products stickier
  3. Lets them repurpose proprietary technology for non-mortgage products

Therefore, it’s arguably easier for top mortgage firms to expand into non-mortgage products than for top challenger banks to expand into mortgages.

When America’s fifth-ranked retail mortgage lender loanDepot was close to an IPO back in 2017, founding CEO Anthony Hsieh summarized this thesis with a catchphrase: 

“We’ve got to make mortgages cool again.”

Hsieh’s point then and now is that certain sophisticated mortgage-first firms are worthy of fintech valuations.

Now it looks like we might finally find out.

And if we do get a Quicken/Rocket IPO, challenger banks will find out more about the scale mortgage playbook.

The post Quicken Loans IPO would set fintech valuation tone and make mortgages cool again appeared first on HousingWire.

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Mike Pompeo Doesn’t Rule Out Serving In 2nd Trump Administration

Mike Pompeo Doesn’t Rule Out Serving In 2nd Trump Administration

Authored by Jack Phillips via The Epoch Times (emphasis ours),

Former Secretary…

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Mike Pompeo Doesn't Rule Out Serving In 2nd Trump Administration

Authored by Jack Phillips via The Epoch Times (emphasis ours),

Former Secretary of State Mike Pompeo said in a new interview that he’s not ruling out accepting a White House position if former President Donald Trump is reelected in November.

“If I get a chance to serve and think that I can make a difference ... I’m almost certainly going to say yes to that opportunity to try and deliver on behalf of the American people,” he told Fox News, when asked during a interview if he would work for President Trump again.

I’m confident President Trump will be looking for people who will faithfully execute what it is he asked them to do,” Mr. Pompeo said during the interview, which aired on March 8. “I think as a president, you should always want that from everyone.”

Then-President Donald Trump (C), then- Secretary of State Mike Pompeo (L), and then-Vice President Mike Pence, take a question during the daily briefing on the novel coronavirus at the White House in Washington on April 8, 2020. (Mandel Ngan/AFP via Getty Images)

He said that as a former secretary of state, “I certainly wanted my team to do what I was asking them to do and was enormously frustrated when I found that I couldn’t get them to do that.”

Mr. Pompeo, a former U.S. representative from Kansas, served as Central Intelligence Agency (CIA) director in the Trump administration from 2017 to 2018 before he was secretary of state from 2018 to 2021. After he left office, there was speculation that he could mount a Republican presidential bid in 2024, but announced that he wouldn’t be running.

President Trump hasn’t publicly commented about Mr. Pompeo’s remarks.

In 2023, amid speculation that he would make a run for the White House, Mr. Pompeo took a swipe at his former boss, telling Fox News at the time that “the Trump administration spent $6 trillion more than it took in, adding to the deficit.”

“That’s never the right direction for the country,” he said.

In a public appearance last year, Mr. Pompeo also appeared to take a shot at the 45th president by criticizing “celebrity leaders” when urging GOP voters to choose ahead of the 2024 election.

2024 Race

Mr. Pompeo’s interview comes as the former president was named the “presumptive nominee” by the Republican National Committee (RNC) last week after his last major Republican challenger, former South Carolina Gov. Nikki Haley, dropped out of the 2024 race after failing to secure enough delegates. President Trump won 14 out of 15 states on Super Tuesday, with only Vermont—which notably has an open primary—going for Ms. Haley, who served as President Trump’s U.S. ambassador to the United Nations.

On March 8, the RNC held a meeting in Houston during which committee members voted in favor of President Trump’s nomination.

“Congratulations to President Donald J. Trump on his huge primary victory!” the organization said in a statement last week. “I’d also like to congratulate Nikki Haley for running a hard-fought campaign and becoming the first woman to win a Republican presidential contest.”

Earlier this year, the former president criticized the idea of being named the presumptive nominee after reports suggested that the RNC would do so before the Super Tuesday contests and while Ms. Haley was still in the race.

Also on March 8, the RNC voted to name Trump-endorsed officials to head the organization. Michael Whatley, a North Carolina Republican, was elected the party’s new national chairman in a vote in Houston, and Lara Trump, the former president’s daughter-in-law, was voted in as co-chair.

“The RNC is going to be the vanguard of a movement that will work tirelessly every single day to elect our nominee, Donald J. Trump, as the 47th President of the United States,” Mr. Whatley told RNC members in a speech after being elected, replacing former chair Ronna McDaniel. Ms. Trump is expected to focus largely on fundraising and media appearances.

President Trump hasn’t signaled whom he would appoint to various federal agencies if he’s reelected in November. He also hasn’t said who his pick for a running mate would be, but has offered several suggestions in recent interviews.

In various interviews, the former president has mentioned Sen. Tim Scott (R-S.C.), Texas Gov. Greg Abbott, Rep. Elise Stefanik (R-N.Y.), Vivek Ramaswamy, Florida Gov. Ron DeSantis, and South Dakota Gov. Kristi Noem, among others.

Tyler Durden Wed, 03/13/2024 - 17:00

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International

Riley Gaines Explains How Women’s Sports Are Rigged To Promote The Trans Agenda

Riley Gaines Explains How Women’s Sports Are Rigged To Promote The Trans Agenda

Is there a light forming when it comes to the long, dark and…

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Riley Gaines Explains How Women's Sports Are Rigged To Promote The Trans Agenda

Is there a light forming when it comes to the long, dark and bewildering tunnel of social justice cultism?  Global events have been so frenetic that many people might not remember, but only a couple years ago Big Tech companies and numerous governments were openly aligned in favor of mass censorship.  Not just to prevent the public from investigating the facts surrounding the pandemic farce, but to silence anyone questioning the validity of woke concepts like trans ideology. 

From 2020-2022 was the closest the west has come in a long time to a complete erasure of freedom of speech.  Even today there are still countries and Europe and places like Canada or Australia that are charging forward with draconian speech laws.  The phrase "radical speech" is starting to circulate within pro-censorship circles in reference to any platform where people are allowed to talk critically.  What is radical speech?  Basically, it's any discussion that runs contrary to the beliefs of the political left.

Open hatred of moderate or conservative ideals is perfectly acceptable, but don't ever shine a negative light on woke activism, or you might be a terrorist.

Riley Gaines has experienced this double standard first hand.  She was even assaulted and taken hostage at an event in 2023 at San Francisco State University when leftists protester tried to trap her in a room and demanded she "pay them to let her go."  Campus police allegedly witnessed the incident but charges were never filed and surveillance footage from the college was never released.  

It's probably the last thing a champion female swimmer ever expects, but her head-on collision with the trans movement and the institutional conspiracy to push it on the public forced her to become a counter-culture voice of reason rather than just an athlete.

For years the independent media argued that no matter how much we expose the insanity of men posing as women to compete and dominate women's sports, nothing will really change until the real female athletes speak up and fight back.  Riley Gaines and those like her represent that necessary rebellion and a desperately needed return to common sense and reason.

In a recent interview on the Joe Rogan Podcast, Gaines related some interesting information on the inner workings of the NCAA and the subversive schemes surrounding trans athletes.  Not only were women participants essentially strong-armed by colleges and officials into quietly going along with the program, there was also a concerted propaganda effort.  Competition ceremonies were rigged as vehicles for promoting trans athletes over everyone else. 

The bottom line?  The competitions didn't matter.  The real women and their achievements didn't matter.  The only thing that mattered to officials were the photo ops; dudes pretending to be chicks posing with awards for the gushing corporate media.  The agenda took precedence.

Lia Thomas, formerly known as William Thomas, was more than an activist invading female sports, he was also apparently a science project fostered and protected by the athletic establishment.  It's important to understand that the political left does not care about female athletes.  They do not care about women's sports.  They don't care about the integrity of the environments they co-opt.  Their only goal is to identify viable platforms with social impact and take control of them.  Women's sports are seen as a vehicle for public indoctrination, nothing more.

The reasons why they covet women's sports are varied, but a primary motive is the desire to assert the fallacy that men and women are "the same" psychologically as well as physically.  They want the deconstruction of biological sex and identity as nothing more than "social constructs" subject to personal preference.  If they can destroy what it means to be a man or a woman, they can destroy the very foundations of relationships, families and even procreation.  

For now it seems as though the trans agenda is hitting a wall with much of the public aware of it and less afraid to criticize it.  Social media companies might be able to silence some people, but they can't silence everyone.  However, there is still a significant threat as the movement continues to target children through the public education system and women's sports are not out of the woods yet.   

The ultimate solution is for women athletes around the world to organize and widely refuse to participate in any competitions in which biological men are allowed.  The only way to save women's sports is for women to be willing to end them, at least until institutions that put doctrine ahead of logic are made irrelevant.          

Tyler Durden Wed, 03/13/2024 - 17:20

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Part 1: Current State of the Housing Market; Overview for mid-March 2024

Today, in the Calculated Risk Real Estate Newsletter: Part 1: Current State of the Housing Market; Overview for mid-March 2024
A brief excerpt: This 2-part overview for mid-March provides a snapshot of the current housing market.

I always like to star…

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Today, in the Calculated Risk Real Estate Newsletter: Part 1: Current State of the Housing Market; Overview for mid-March 2024

A brief excerpt:
This 2-part overview for mid-March provides a snapshot of the current housing market.

I always like to start with inventory, since inventory usually tells the tale!
...
Here is a graph of new listing from Realtor.com’s February 2024 Monthly Housing Market Trends Report showing new listings were up 11.3% year-over-year in February. This is still well below pre-pandemic levels. From Realtor.com:

However, providing a boost to overall inventory, sellers turned out in higher numbers this February as newly listed homes were 11.3% above last year’s levels. This marked the fourth month of increasing listing activity after a 17-month streak of decline.
Note the seasonality for new listings. December and January are seasonally the weakest months of the year for new listings, followed by February and November. New listings will be up year-over-year in 2024, but we will have to wait for the March and April data to see how close new listings are to normal levels.

There are always people that need to sell due to the so-called 3 D’s: Death, Divorce, and Disease. Also, in certain times, some homeowners will need to sell due to unemployment or excessive debt (neither is much of an issue right now).

And there are homeowners who want to sell for a number of reasons: upsizing (more babies), downsizing, moving for a new job, or moving to a nicer home or location (move-up buyers). It is some of the “want to sell” group that has been locked in with the golden handcuffs over the last couple of years, since it is financially difficult to move when your current mortgage rate is around 3%, and your new mortgage rate will be in the 6 1/2% to 7% range.

But time is a factor for this “want to sell” group, and eventually some of them will take the plunge. That is probably why we are seeing more new listings now.
There is much more in the article.

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