Rocket companies CEO Jay Farner in an appearance on CNBC Wednesday credited the mortgage lender’s investments in technology for its record quarter which he reported the day before.
The Detroit-based company, which began trading in the public market in August, posted triple-digit lending volume in the third quarter amid a low interest rate environment boosted by the coronavirus pandemic.
“It’s all about our platform,” Farner said in an interview with “Crazy money“Host Jim Cramer.” This platform allows us to evolve. “
Rocket, which focuses on technology to drive real estate transactions, has pumped around $ 500 million into its platform over the past year, he said. The company, the parent company of Quicken Loans Inc, operates through its Rocket Mortgage, Rocket Homes and Rocket Auto brands.
In the third quarter which ended in September, Rocket recorded a closed loan volume of $ 89 billion, up 122% from a year ago when the United States was blessed with a strong economy. . This strong performance comes amid a low interest rate environment that has fueled a home buying spree in recent months. Demand driven by low interest rates pushed up home prices.
Mortgage data shows home purchase demand last week slipped to its lowest level in six months, although application rates remained more than two digits higher than levels of a year ago.
“We were making about $ 15 billion a month at the start of the year and in October we made over $ 30 billion in a month in closed volume, and it’s just that technology combined with the big brand that we have, “said Farner.
Rocket, the nation’s largest mortgage lender by volume in 2019, reported $ 4.7 billion in revenue for the quarter, up 163% from the previous year’s quarter. The company also posted adjusted earnings per share of $ 1.21.
Shares, however, plunged 2.5% in Wednesday’s session. The closing price of $ 21.06 is up 17% from its first market trade in July.
Farner reiterated his company’s plans to capture 25% of the mortgage market by 2030, citing the partnerships he has in place with Realtor.com, Intuit and an upcoming partnership with an unnamed “big financial institution” next year. The company claims to have at least 9% of the market.
“We have all kinds of advantages here,” he said. “The advantage here for us in terms of growing this business, we see 25% [mortgage market share] here by 2030. “