Jay Farner will retire as CEO of Rocket Companies in June, ending his 27-year stint at the firm. He stepped down as member of the board of directors last week, Rocket disclosed in a filing with the Securities and Exchange Commission.
On February 8, Farner notified the board of directors of Rocket of his intent to retire as CEO effective June 1 and as vice chairman and member of the board effective immediately, according to the company’s 8-K filing on Monday.
“More than 27 years ago, fresh out of college, I decided to join a small mortgage company led by Dan Gilbert,” Farner said in a statement. “I never could have predicted the amazing journey that one decision would have taken me on, and I want to thank Dan for his mentorship, guidance and friendship over the years,” Farner said.
Bill Emerson, who served 15 years as Farner’s immediate predecessor, will replace Farner on an interim basis starting June 1. Emerson will fill the seat on the board vacated by Farner and serve for a term expiring at Rocket’s annual meeting of stockholders in 2004 until his successor is elected.
“Mr. Farner’s retirement from the board was not because of a disagreement with the company,” the SEC filing reads.
According to Rocket, the board started a search for a permanent CEO and hired a firm to evaluate internal and external candidates.
“Since being appointed CEO of Rocket Mortgage in 2017, and subsequently CEO of Rocket Companies in connection with the August 2020 IPO, Jay has overseen the most rapid period of growth and profitability in our 37-year history,” Dan Gilbert, founder and chairman of Rocket, said in a statement.
Prior to becoming CEO, Farner served as president and chief marketing officer of Quicken Loans, Rocket Mortgage predecessor, for more than eight years until February 2017.
In 1996, Farner joined Rock Financial, the company’s former Michigan-only brand. He was vice president of web mortgage banking of Quicken Loans, Rocket Mortgage predecessor, in 1998 before being promoted to president and chief marketing officer in 2009, a position he held until February 2017.
The Rocket Mortgage online platform launched in 2015, which the firm claims to have “revolutionized the mortgage process as the first end-to-end digital experience, leveraging decades of technology investment and innovation.”
Emerson, currently serves as the vice chairman of Rock Holdings, Inc., Rocket’s majority stockholder, a position he has held since February 2017. Since August 2020, Emerson has also served as vice chairman of Bedrock, a Detroit-based real estate firm specializing in acquiring, developing, leasing and managing commercial and residential buildings.
Emerson, who ran Rocket Mortgage predecessor Quicken Loans between 2014 and 2017, is also a member of the board of directors for several industry organizations, including the Housing Policy Council and the Mortgage Bankers Association.
Farner’s retirement comes at a difficult period for the lending giant. Rocket Mortgage was overtaken by rival United Wholesale Mortgage in the third quarter in mortgage originations and has struggled to adapt to a market with few refinancing opportunities.
The Detroit-based lender originated $25.6 billion in mortgage volume in the third quarter, less than 31% or UWM’s production volume of $33.5 billion in the same period.
Rocket, like most mortgage originators, has suffered financially over the last six months. The lender reported an adjusted net loss of $166 million in the third quarter, posting its first unprofitable quarter since going public.
While Rocket hasn’t reported its fourth quarter earnings, “the company reaffirmed its previously announced fourth quarter 2022 adjusted revenue guidance,” the filing stated.
In its third quarter earnings, Rocket projected to close loan volume in the range of $17 billion to $22 billion, with gain on sale margins between 230 and 260 basis points (the overall GOS came in at 269 bps in Q3).
Mortgage origination volume dropped sequentially to $19.7 billion in the fourth quarter from $25.6 billion in the previous quarter, according to data from Inside Mortgage Finance.
