Rocket Pro TPO, the wholesale arm of Rocket Mortgage, announced Monday that it has decided to waive the $795 origination fee charged to broker partners on home equity loans.
“When you think about what home equity looks like or represents across the country, there’s a record-breaking home equity, with homeowners sitting on almost $17 trillion,” Rocket Pro TPO executive vice president Mike Fawaz said in an interview.
“There’s a ton of demand when it comes to looking for cash out. However, as we all know, borrowers don’t want to touch their first mortgages because they have lower interest rates, which is completely understandable. With our home equity program, we want to make sure that we’re offering our broker partners a product they can win in this market and help their clients.”
According to Fawaz, the initiative is for all broker partners and is not conditioned for those using other Rocket TPO services. It starts on Monday and is valid until Aug. 18.
Rocket said its origination fee waiver for broker partners complements other initiatives, including loan limits of $500,000 on home equity loans, compared to $350,000 at many other lenders.
The Detroit-based lender also said that it allows the use of automated valuation models (AVMs) on home equity loans of up to $400,000, almost double the limit imposed by other competitors.
Fawaz said alternatives to the conventional appraisal process can reduce time and costs. Rocket claims that its home equity loans are clear to close in an average of 15 days.
The lender does not disclose the share of home equity products in its wholesale channel portfolio. Still, Fawaz mentioned that “since we’ve rolled out the product, we continue to see an increase in usage from our broker partners.”
Rocket Pro TPO announced a plan in January to court brokers with product and service enhancements this year, which includes continuing to provide credit reports at no cost. It’s also putting artificial intelligence (AI) front and center to solidify its position as a fintech firm.
Meanwhile, home equity products have garnered attention from the mortgage industry as refinance and purchase volumes have decreased compared to the boom years of 2020 and 2021.
Initiatives related to home equity have also reached the government-sponsored enterprises (GSEs). In June, the Federal Housing Finance Agency (FHFA) announced a conditional approval for Freddie Mac to begin purchasing closed-end second mortgages through a pilot program.
