Good morning, everyone, and welcome. Joining me today are Varun Krishna, Chief Executive Officer of Rocket Companies, Brian Brown, Chief Financial Officer of Rocket Companies, and Jay Bray, Chairman and Chief Executive Officer of Mr. Cooper Group. Before we begin, please note that this call may contain forward-looking statements. These statements include, but are not limited to, discussions about the anticipated benefits of the proposed transaction between Rocket Companies and Mr. Cooper, expected financial and operational outcomes, the timing of the transaction's completion, and plans for the combined company. Any statements made today that are not historical facts should be considered forward-looking statements. We do not undertake any obligation to update these statements based on new information or future events, except as required by law. This call is being broadcast live and is accessible on Rocket Companies and Mr. Cooper's Investor Relations website.
A replay of today's call will be available on our IR websites later today. Additionally, we have posted a press release and a copy of our presentation on our IR websites for future reference. With that, I'll turn the call over to Varun.
Good morning, and thank you for joining us. We have some exciting news to share with you today. Rocket has signed an agreement to acquire Mr. Cooper, America's largest servicer, in an all-stock transaction for $9.4 billion in equity value. This is a major step forward for homebuyers and homeowners across America. I joined Rocket to transform a fragmented industry, and over the past 18 months as CEO, two things became clear to me. First, home search, brokerage, financing, title, closing, and servicing should be seamless. Today, they're not. There's too much friction, and that causes real stress for our clients. If we truly want to fix that, we have to own the client experience from beginning to its true end. Second, servicing is the golden key to the puzzle. It's the way to build lifelong client relationships.
It allows us to understand each client deeply and deliver personalized, repeat experiences that build lasting loyalty. Servicing is a hidden and underappreciated gem, but when it is connected to the rest of the homeownership platform, its value becomes extraordinary. This is why we believe bringing Mr. Cooper and Redfin into the Rocket platform will help us accelerate our mission to help everyone home. I am excited about this combination for four key strategic reasons. First, this combination expands our recapture flywheel. What we have shared is our company-level strategic focus. Recapture is the engine that connects origination and servicing. Simply put, recapturing more clients compounds growth and drives long-term value. At the heart of the flywheel is our exceptional 83% recapture rate. This is the rate at which clients return to Rocket when they are ready for their next refinance transaction, which may occur every five to seven years.
In the meantime, our servicing relationship provides monthly touchpoints that deepen our relationship with the client. With each interaction, we gather stronger and stronger signals about the homeowner's needs and circumstances. These insights create ongoing opportunities to boost retention and drive future transactions without reoccurring acquisition costs for the next transaction. This beautiful dynamic generates powerful economics and maximizes the client lifetime value. That is why we are so excited about this combination. What makes our recapture rate three times higher than average? The answer is simple. We are relentlessly obsessed with delighting our clients. When we take our recapture rate at Rocket and apply it to Mr. Cooper's scale and operational excellence, we activate the best of both worlds. Second, this combination is about data and AI. The proprietary dataset across our platform will triple, and what this will directly power is a smarter, more operationally efficient AI platform.
Better models, more personalization, higher conversion, an AI machine that is designed to create happier clients. The scale of data will directly power our AI strategy. Both Rocket and Mr. Cooper have heavily invested in technology, embedding throughout our businesses. When you combine those capabilities together, you get something transformational: the ability to anticipate client needs before they voice them. We're not waiting for clients to raise their hand. Our data signals tell us when it's time to reach out, engage, and guide, even before a home search begins. This is how we turn data into relationships, relationships into transactions, and transactions into lifetime delight. The data at scale is powerful, but it becomes truly transformational when paired with unmatched distribution. Together, Rocket, Mr.
Cooper and Redfin reach 62 million monthly visitors, nearly 10 million servicing clients, 450,000 annual origination clients, over 1 billion annual client interactions, and generate 30 petabytes of personalization signals. This level of data and engagement is unmatched. It is this platform that allows us to nurture a vast, interconnected ecosystem, which leads me to the third reason this combination is so exciting: the strength of the Rocket ecosystem. Purpose-built to serve clients, industry professionals, and partners, we are bringing together thousands of real estate agents, tens of thousands of brokers, and loan officers to nearly half a million origination clients and more than 800 financial institutions. High-intent clients get value and seamless experiences. Industry professionals like real estate agents, loan officers, and mortgage brokers get powerful AI tools to grow their business. Partners gain enterprise-level capabilities. It is a model where everyone succeeds together.
Let me paint an example of what that looks like. It starts with Rocket, alongside Redfin and Mr. Cooper, equipping agents, loan officers, mortgage brokers, and servicing professionals with the Rocket AI platform. Rocket Logic teams up with Mr. Cooper's Agent IQ and Pyro to fully streamline origination, servicing, and automation. Productivity becomes exponentially amplified. Information and data exchanges are simplified, and engagement and conversion are automatically optimized. For our B2B partners, including sub-servicers, this ecosystem delivers even greater value. The experience will be fully rebranded to our partners with seamless client account setup and around-the-clock VIP support. This transaction also unlocks powerful new opportunities for our mortgage broker partners, an essential community that we fully support. The enhanced Rocket platform will give brokers more choice than ever before, along with access to competitive products, advanced technology, and the tools to grow their business.
Looking ahead, we envision mortgage brokers having access to servicing capabilities for their own clients in a future where their name appears on the mortgage statement, keeping the client relationship where it belongs with the broker. Finally, what gets me most excited is very simple. It's the client. They are the biggest winner in all of this. Our platform is vertically integrated, designed with a singular objective to make their experience modern, easy, and more affordable. Starting with Redfin's home search and brokerage, through Rocket's home financing, and into Mr. Cooper's servicing, we're creating an integrated homeownership experience with scale and revenue captured at every step. This fully connected model gives us the flexibility to create more value for our clients. Now, let's step back and compare that to how the homeownership journey looks today. It's fragmented, frustrating, and costly. Multiple companies all involved, all operating in silos.
Clients must contend with annoying handoffs, mindless repeated data, zero transparency, and it's expensive as heck. All these middlemen extract roughly 10% of a home's price in fees. Just think about that. That's $40,000 on a $400,000 home. The experience is broken, and that's what we're here to fix. With Mr. Cooper, our servicing client base triples, reaching one in every six mortgage holders in America. These amazing clients will now get the full Rocket VIP experience, great rates, an expert loan officer, a dedicated real estate agent, one-click data entry, and a digital, seamless, technology-driven experience. The good news is that when our clients win, our shareholders win too. Brian will walk through the financial benefits of this transaction in a moment. Before I hand it over to Jay, let me close with a few thoughts.
Everything I've just shared reflects what we often refer to as industrial logic. At its core, this transaction is about something more intangible: our mutual trust, shared ambition, and a bold vision for the future. It's about choosing to work with people who want to win together and who genuinely enjoy working together. When I met Jay, we connected instantly. He's built an exceptional organization backed by amazing talent in the industry. The best part, Rocket and Mr. Cooper share cultural DNA. Both of our companies put the client first, and we're innovators, obsessed with finding a better way. To the talented teams at Mr. Cooper and Redfin, welcome to Rocket. We are uniting purpose, people, and possibility, and together, we're going to redefine homeownership. To my dedicated and passionate Rocket team, you are the foundation of everything we've built and everything we're becoming.
Over the past 40 years, your hard work, innovation, and relentless focus on the client brought us to this exact moment. Because of you, we've earned the right to step onto a bigger stage and lead the next chapter in the future of homeownership. Over the last 18 months, I've seen the momentum building, and now we embark on the next step of our journey. Thank you, and with that, I'll turn it over to Jay.
Thanks, Varun, and good morning, everyone. I'm incredibly excited about the transaction we announced this morning. It is ushering in nothing less than the future of the mortgage industry. At Mr. Cooper, we've worked for years to perfect our servicing platform, which is digital, efficient, and highly scalable. Our multi-decade track record of customer growth and resilient profitability speaks for itself, as does the accolades for operational excellence we've earned from investors and clients. Now, by combining this platform with Rocket's iconic brand and marketing capabilities, we're creating a fully integrated homeownership platform with unmatched capabilities. Importantly, the two companies are aligned on core values. This has been very apparent to me in getting to know Varun, Brian, and their teams, as well as Dan Gilbert. There is a very high level of trust among us, and I'm super excited to be working with you to realize our shared vision.
I believe this transaction will bring significant value to Mr. Cooper shareholders, not only in terms of the initial transaction, but also through the synergies we'll deliver and the growth we'll realize over time as we revolutionize the homeownership experience. We'll start this work with a smooth and efficient integration, which will benefit from Mr. Cooper's extensive experience, including the $1.7 trillion in mortgages and the 6 million clients we've seamlessly onboarded over the last five years. I expect all of our stakeholders to benefit, including clients, team members, business partners, and agency investors. Let me give a special call out to Mr. Cooper's sub-servicing, correspondent, and co-issue clients. You have played a critical role in Mr. Cooper's growth, and now that you are about to become part of the Rocket ecosystem, you have my word that we will continue delivering the highest value to you, including new capabilities.
Finally, I want to recognize my fellow Coopers. You have worked tirelessly for over 20 years to build this company into what it is today. Thanks to your work, we now have an opportunity to move forward and really change the world. Thank you for everything. With that, Brian, I'll hand it over to you.
Thanks, Jay. Today, Rocket is making history in homeownership, and I couldn't be more excited to welcome Mr. Cooper to the Rocket team. Let me start by highlighting the key aspects of this transaction. Rocket has agreed to acquire Mr. Cooper for $9.4 billion in all stock consideration. Each share of Mr. Cooper will receive 11 shares of Rocket, valuing Mr. Cooper at $143.33 per share based on Friday's close. This transaction is expected to be immediately accretive to earnings per share upon close. We anticipate this will occur in the fourth quarter of 2025, pending Mr. Cooper shareholder approval, customary regulatory approvals, and standard closing conditions. Post-integration, we project over $500 million in annual revenue and expense synergies, representing significant value creation for both Rocket and Mr. Cooper shareholders.
Together, we realize the best of both: all-weather cash flows from servicing that elevate our baseline level of earnings while also significantly expanding our runway for growth in the origination business. The strategic rationale for this transaction is simple: the best-in-class servicer joining forces with the best-in-class originator, both powered by industry-leading technology. It is also about pairing Mr. Cooper's operating efficiency as a servicer with Rocket's unmatched 83% recapture rate and applying those superpowers across the combined servicing portfolio. The opportunity ahead is massive. We are operating in a large, fragmented market with significant room for further expansion. This combination puts us in a position to grow market share while increasing operating leverage. Now, let's dive into the financial benefits of this transaction, starting with the excess capacity that each company brings to the table. Rocket and Mr.
Cooper share the same core operating principle: achieve scale by building capacity through AI-driven technology and automation. We're expert operators in origination and servicing with advanced, highly efficient platforms that provide significant headroom for growth and enable lower per-unit costs. Rocket currently has the capacity to originate over $150 billion in annual loan volume without adding another dollar of fixed cost. As we shared at Investor Day last fall, we expect to double that capacity to $300 billion in 2027. We've made this possible by supercharging our team members with AI tools, unlocking over 1 million hours of productivity in the past year alone, while continuing to deliver industry-best client service. On the servicing side, Mr. Cooper has added $440 billion in servicing UPB over the past few years and needed to hire only 20 additional team members. Today, Mr.
Cooper enjoys a cost of service that's roughly one-third lower than the average servicer and still has excess capacity to service an additional 1.5-2 million loans without adding fixed costs and continuing to deliver an outstanding client experience. On a combined portfolio basis, we will be able to fill this capacity and realize even better servicing unit economics. Second, this transaction accelerates our origination servicing flywheel. Clients return to Rocket at over three times the industry average, fueled by a seamless, best-in-class origination experience. In fact, 40% of our current service clients have completed two or more transactions with Rocket. Recaptured clients can be originated with no cost of acquisition, creating the kind of operating leverage that supports durable, long-term growth. By connecting home search, financing, and servicing, we monetize each stage of the homeownership journey.
This fully integrated model strengthens the financial profile of the business and gives us the flexibility to pass meaningful savings back to our clients. With Mr. Cooper, we can take Rocket's origination servicing flywheel to another level as it expands our servicing base threefold and provides a source of $0 acquisition cost originations. That's nearly 10 million households with whom we will deepen relationships at every touchpoint, deliver exceptional client experiences, and extend lifetime value across the entire platform. It's rare in business that you get to have your cake and eat it too, but I believe this transaction to be one of those cases. Mr. Cooper will help drive more operating leverage and diversify revenue thanks to a higher base of recurring servicing fees.
In pro forma terms, income from servicing fees and interest earned on escrows would have brought in $5 billion of cash flow on a combined basis in 2024. The servicing origination businesses work in harmony across market cycles. When rates rise and originations slow, servicing values increase. When rates fall, servicing values decline, but high recapture rates provide a steady stream of new originations. Rocket has a proven track record of growing our share of originations in all market cycles, while Mr. Cooper has maintained steady earnings across all rate environments. As one company, we get the best of both: the largest servicing portfolio to increase our baseline earnings profile and a springboard for growth in the origination business. Finally, this transaction unlocks over $500 million in annual synergies, driven by both revenue growth and cost savings, all highly achievable through the complementary strengths of our platforms.
We expect approximately $100 million in revenue synergies, with the majority coming from applying Rocket's recapture capabilities to increase Mr. Cooper's recapture rate from 50% to 65% and drive incremental originations in a market like the one we're experiencing today. Beyond originations, we see revenue opportunities related to attaching Rocket's title and closing services to Mr. Cooper's existing direct-to-consumer originations. We also expect to optimize earnings on escrow deposits and warehouse financing, leveraging our scale as the largest holder of escrow balances and user of warehouse financing. We believe this underwriting case to be conservative for a couple of reasons. The first reason is that if mortgage rates were to move lower to, let's say, 6% as an example, there would be an even larger group of Mr. Cooper's service clients who would stand to benefit from a rate-and-term refinance.
Second, Rocket's recapture rate is currently at 83%, so there are nearly 20 percentage points of potential upside that we're not even taking credit for. Lastly, this synergy does not consider any incremental cash-out, close-in-second, or purchase originations that would accompany improved recapture capabilities. In terms of expenses, we estimate $400 million in synergies across four categories. In the origination business, we see an opportunity to leverage Rocket's excess capacity and proprietary best-in-class loan origination system for all of Mr. Cooper's originations. On the servicing side, we plan to transition Rocket's MSR portfolio onto Mr. Cooper's industry-leading platform, which offers both significant excess capacity and exceptional operational efficiency. Across both the servicing and origination businesses, there's an opportunity to consolidate overlapping technologies and third-party vendors. Finally, we expect to align support services across the combined enterprise and eliminate duplicative public company costs.
Taken together, these efforts represent an expected $400 million in expense synergies. It bears repeating, this transaction is accretive to earnings upon close, delivering both immediate value and long-term strategic upside. Equally important, we expect to maintain a strong capital and liquidity position. This transaction brings together two of the most well-capitalized originators and servicers in the industry. On a pro forma basis, as of 2024 year-end, the combined entity had a capital ratio of 28% and net corporate leverage of 1.1 times, along with a robust liquidity and deep diversified funding base. On a combined basis, the company would have had access to more than $50 billion in funding capacity and over $11 billion in available liquidity, reinforcing long-term financial strength and flexibility. With Mr. Cooper and Redfin joining Rocket, we're creating a homeownership platform that brings together search, financing, and servicing at scale.
This is a bold acceleration of our strategy, one that positions us to transform the industry. With this integrated model, we can deliver more value to clients and industry professionals alike, drive meaningful growth, and unlock greater operating leverage. We appreciate your trust and support and are confident this transaction will drive tremendous value for Rocket and our shareholders. Thank you. Operator, we're ready to turn it over for questions.
We will now begin the question and answer session. If you would like to ask a question during this time, simply press star, followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. Your first question comes from the line of Jeff Adelson with Morgan Stanley. Jeff, please go ahead.
Hey, good morning. Thanks for taking my questions. I guess I wanted to focus on the recapture rate assumptions here. It looks like Mr. Cooper, the recapture rates had, over the prior few years, been more in the 70% range until the past quarter with the Flagstar impact. I guess I was just trying to understand a little bit more the path to higher recapture rate and maybe why it's coming off of more of a 50% base versus the 70% base we were seeing previously.
Yeah. Let me start by just painting—I mean, recapture is obviously one part of the overall story. I just want to start with just kind of the bigger picture, and then we can dive into some of the specifics of the recapture assumptions. There's so much that we're excited about for this deal. I think we'll dive into recapture. Brian, maybe you can comment on the synergies. We really think that the servicing business is very complementary to the origination business. When you get that right, that recapture flywheel is a self-sustaining thing. There's a lot of strategic upside. I would just highlight a few things. I think the first is Rocket services 3 million mortgages. With this acquisition, we'll service nearly 10. That's one in every six in America. It gives us three things.
The first is recapture, where that 83% recapture rate can be applied to a larger servicing book. You get lower acquisition costs, higher LTV for every single one of those clients. The other thing is you get a more balanced business model because you're able to generate business across cycles in any market environment. That MSR portfolio delivers stable and kind of recurring revenue that will offset that cyclicality. Obviously, you can take advantage of things like seamless refinancing. The other thing that I think is really important, especially when we talk about recapture, is this is fundamentally about data and AI at its core. When you have more data, you have more signals. You have a better ability to target clients with the right product at the right time.
When you put that data set together, your models naturally become significantly more performant and capable. Those are just some of the underlying things. Brian, maybe you can drill in on specific synergies and recapture.
Sure. Thanks, Jeff, for the question. To your point, we have about $100 million penciled out in our underwriting case on the revenue side. It's because of the recapture, which I'll dive into in a second. It's also just important to note that there's some revenue synergies to attach to our title and closing business, which Mr. Cooper is not doing today. That's a big opportunity. The third one that's important to note is just the escrow and warehouse side of the business. No surprise now, we'll be the biggest holder of escrows on a combined basis and one of the biggest users of warehouse financing. You bring those two firms together across the global banking partners, and there's a big opportunity to optimize. On the recapture specifically, you're right. We're only taking credit for a 15-point increase in recapture on Mr. Cooper's book.
It's essentially taking it from roughly the 50% that you mentioned to about 65%. As Varun said, Rocket's recapture is really 83%. It's our view that there is upside here, and it is significant. I can do a little bit of math for you, but essentially, if you take the 15 percentage points of recapture and you do the math, you get to the $100 million of synergies. There are a couple of things to consider. One is the mortgage market. If I assume rates go down to 6 and I take that same 15 percentage points of recapture, that's $150 million on a pre-tax basis of additional opportunity. To Varun's point, if we get all the way to the Rocket recapture rate of 83% and I assume rates go down to 6, that's $330 million of upside.
The underwriting case is conservative by design, but a lot of conviction around it. There is definitely upside as we move up that recapture rate.
Great. Can you just maybe touch on the tech stack has obviously been a huge focus under your leadership. I just want to get a better sense of how the tech stacks of the two companies compare, how you're going to integrate that, and how that sort of works through in the $400 million-plus of expense synergies you're thinking about. Obviously, you've outlined consolidation of the overlapping tech there. Just trying to get a better sense of how you're going to actually approach that.
Yeah. I think, I mean, at the highest level, we think that there's a great opportunity here to consolidate and create better technology platform together. We have built a world-class LOS called Rocket Logic. That's what allows us to have elastic capacity. In servicing, Mr. Cooper has built a best-in-class servicing platform that is able to also manage capacity. There is a lot of opportunity there for us to really consolidate and leverage each other's technology. The other thing I would just say is the technology itself has kind of advanced to a place now where capabilities like AI actually make integrating technology stacks, integrating data platforms more efficient, more intelligent, and more painless. It is a good time for us to be approaching this kind of technology integration just because the technology itself has significantly matured from where it was several years ago.
Yeah. And Jeff, just to double-click on Varun's comments, that's where you're going to see the majority of the expense synergy come from both flipping to Rocket's origination platform and Mr. Cooper's servicing platform. As you can imagine, there's just a lot of back-office duplication of technology and other G&A. We'll be able to consolidate that and increase the combined purchasing power of the two entities. Of course, there's corporate overhead duplicative public company costs that kind of round out that $400 million.
Great. Thanks for taking my questions.
Your next question comes from the line of Mark DeVries with Deutsche Bank. Mark, please go ahead.
Yeah. Thank you. You obviously announced another fairly significant merger recently with Redfin. Could you just talk about the challenges of integrating these two deals in parallel?
Yeah, absolutely. I think we feel like now is exactly the right time to pursue this kind of integration. We think the industry is ready for it. As I mentioned earlier, I think technology itself has come a long way. The other thing I would just highlight, Mark, is that across the three companies, we have pretty practiced experience around successful M&A. I will ask Jay to maybe jump in and share some of his thoughts. Our strategy is very clear. We want to grow in purchase. We want to grow in AI and in servicing. These deals are a very direct accelerant of that. If you want to do a homeownership platform at scale, you have to have more relationships with clients at the top of the funnel. You have to be able to figure out how to expand your servicing reach.
You have to connect those segments through origination. The reason I share that is because we just have a lot of conviction around our strategy. That conviction will translate into solid integration. We have been doing it. We think that inorganically really just allows us to accelerate the pace. I would also just share that this is a large-scale integration. We are taking it very seriously. It is going to be the top priority across the company. It is my top priority, the board's top priority. We have a team that is going to be maniacal about execution. We have identified the best and brightest that will be working on this. Obviously, we will have a detailed project plan, accountability, rigor. Again, we will leverage playbooks from folks that are on the leadership team that have really done this successfully.
Jay, if there's any more details, maybe I would flip to your thoughts.
Yeah. I think Mark Varun commented on most of the points. But if you just look at our track record, I think it's second to none. I mean, we've acquired a number of companies, a number of portfolios over the years. We certainly have a playbook on how to make that happen and how to make it happen seamlessly, both from a customer and a stakeholder standpoint. If you think about it, even recently with our Flagstar acquisition, we boarded close to $300 billion very seamlessly. This is right in our wheelhouse. It's something that we are highly confident we can execute on. A lot of experience on the team. To Varun's point, the highest priority, and we'll get it done.
Okay. Great. Just a question about kind of where you see the correspondent channel fitting in going forward. I know it's not an area where Rocket you've been active, but it's been a recent area of emphasis at Cooper. If you just talk about how you see that factoring into future originations.
I would just say that we think it's an important part of our strategy, and we support that channel very much.
Yeah. Look, that team is amazing at Mr. Cooper. We have been able to spend time with Varun and Brian and others and get them introduced to that team. We think there is a lot of growth potential there. It is a core strength, and we expect to continue to support it.
Okay. Great. Thank you.
Your next question comes from the line of Bose George with KBW. Bose, please go ahead.
Hey. Good morning. Just to follow up on this synergies discussion. With the deal closing expected to close in Q4, how long will the integration take in terms of that $500 million sort of annualized kicking in?
Yeah. Thanks for the question. A couple of things. You said it. We expect it to close in Q4. We expect it to be accretive upon close. That's to the tune of, I'll say, mid-teens in accretion to 2026 EPS. I think you'll see the integration, of course, go throughout the year of 2026. To Varun's earlier point, it will be the first priority of the company and the teams. We're very confident in being able to do it efficiently.
Okay. Great. And then just on the regulatory side, I assume the sign-off, you've got sign-off from the GSEs and FHA, etc. Is there a size at which regulators get concerned about servicing concentration, or is it a positive just given your very strong balance sheet to have you guys servicing such a big part of the market?
Yeah. Thank you. Look, I'd just start by saying that we have a lot of confidence that we'll get this deal done. We expect it to be viewed positively by FHFA and obviously the GSEs. We wouldn't be obviously pursuing this agreement if we weren't confident that we'd be able to get it done. We've worked side by side with the top advisors in the industry and the legal experts from day one. Both companies have very deep relationships with FHFA, the GSEs, FHA, Ginnie, and the other market participants and regulators. We feel pretty good. In terms of the overall market, 85% of the market is still untapped. Collectively, it's not kind of a primary concern. Jay, I don't know if there's anything you would add.
Yeah. Look, Bose, I mean, you've seen us acquire a lot of portfolios over the years. We've gone through the regulatory approval process multiple times. Ultimately, as I've always said, I mean, we're very aligned with the regulatory community, whether it's FHFA, Ginnie, Fannie, Freddie, etc. They want strong counterparties. If you think about the balance sheet strength of this company, it is second to none, for sure. They want us to take care of customers and deliver a better value proposition. We are 100% going to do that as part of this transaction. We are highly confident. To Varun's point, it's a massive market. As you know, it's the largest asset class in the world. There is still 85% of the market that's untapped. We are highly confident that we'll get the approvals necessary to get this done.
Okay. Great. Thanks. Actually, just one more for me. What's the change in the pro forma share count of Rocket Companies deal?
I mean, the ownership is about 25% goes to Mr. Cooper. I don't have the actual number, Bose, but you can kind of do the math. It's 75 Rocket. And you could see an increase in flow of about 25% in the issuance of Class A shares.
Okay. Okay. Great. Thanks a lot. Yep. Thanks.
Your next question comes from the line of Giuliano Bologna with Compass Point. Giuliano, please go ahead.
Good morning. Congratulations to everybody on a great transaction.
Thank you.
Yeah. As a first question, this might be a little bit more nuanced. Mr. Cooper has a 20% investment in Sagent and also has an industry-leading REO auction platform. I'm curious, when you're looking at the transaction and moving everything over to a servicing perspective over to Mr. Cooper, are there any opportunities to create significant additional value from some of those other platforms that Mr. Cooper currently controls or has an economic interest in?
Yeah. I'll start. And then folks can jump in. I'll start on the Sagent part first. That's extremely exciting to us. If we kind of take you back to our earlier comments, the best-in-class servicing platform is one of the key deal points to this. You have seen it. The numbers speak for themselves. Mr. Cooper's cost to service, which is one of the most efficient in the space, while their extreme dedication to the consumer is one of the things that were mutually aligned and attracted us. Clearly, Sagent will be a big piece of that that we support. Jay, I don't know if you want to comment on the option platform side. Yeah. Yeah.
Look, Juliano, I think it's a great point, number one, because when you look at the underwriting case, there's absolutely no upside value baked in for either one of those platforms. There's nothing related to Sagent, and there's nothing related to Xome. Obviously, to Brian's point, we think this provides tremendous value to really both platforms. As I think about it, it's a real value creator that has not been considered. Thanks for bringing that up.
That sounds good. Maybe one, again, maybe a nuance to a second question. When we think about the combined platform, I mean, Mr. Cooper does a few things that are a little bit different on the correspondent side and with some other channels. I'm curious, when you think about merging the platform together, is part of the pickup over time or part of the opportunity on the recapture side moving towards more internally originated servicing that could help? Because I think there is a historical differential between acquired MSRs and the recapture rate versus correspondent versus internally or not necessarily internally originated, but I will call it retail or DTC channel. I'm curious if that mix changing is part of the upside opportunity as well over time as the platforms scale together.
Yeah. I'll start, and then others can jump in. I think, look, to Jay's earlier point, given the size and scale of this business, all the channels will continue to be important. I mean, there's no question that in the synergy value, the DTC business is probably one of the things that we get most excited about through increasing that recapture. Of course, I don't want to downplay the fact that Rocket, even aside from recapture, is still going to organically be the number one lender again and grow share, which is going to be a great fulfillment engine to the servicing book. You kind of take just the organic DTC business, then you layer on higher recapture, which is protecting the book but doing it at a zero cost of acquisition. You supplement that with some bulk acquisitions in the correspondent business.
I think what you're left with is an originator servicer flywheel that is, frankly speaking, very hard to touch from an industry perspective. It provides great growth potential, but it also is a great way to diversify and protect the book.
Yeah. That's very helpful.
Bose said.
Congratulations on the transaction. I'll jump back in the queue.
Thank you. Thank you.
Your next question comes from the line of Brian Shelley with Bank of America. Brian, please go ahead.
Hi guys. Thanks for the question. Congratulations. My first question relates to Mr. Cooper on secured debt. I think in the deck, you guys say that the debt is to be restructured or refinanced. Can you give any incremental color there on the exact treatment of the debt or if that has even been fully determined yet?
Yeah. Happy to, Ryan. Thanks for the question. I think it's helpful to break it into two categories sort of to your point. I will start with the unsecured senior note. There's about $5 billion out there at Mr. Cooper. No surprise, this will trigger a change of control. That's market precedent. We plan on a very thoughtful approach. A lot of work has been done on this. The first thing I should probably point out is we've secured bridge financing. That's locked in, and that's part of the deal. I have a lot of confidence in being able to bring that debt to market. The way we would do it is between signing and close, contingent upon close. If I kind of break down that $5 billion into two buckets, depending on market conditions, there's likely $3.2 billion that needs to be refinanced.
We have confidence in our ability to do that. There is about $1.8 billion that we can tender likely through an exchange offer. That will be contingent on how the market performs, of course, from now to close. That is the current plan, all backstopped by bridge financing. The secured financing is probably important for me to touch on as well. There is about $7 billion of secured financing out there. It is largely MSR financing, warehouse lines, and servicer advances. The really good thing about that is, obviously, Mr. Cooper is best in class in terms of their banking partners, very diversified, and so is Rocket. We have a bunch of overlap. We will be now the biggest lender and servicer in the space.
We will need to get consents to get that over to the Rocket balance sheet, but we're not worried about that at all. In fact, even if there was a problem there with Rocket's excess capacity on its lines, we could absorb almost the entire secured portion or just work with our existing banking partners to upsize it. Good plan on the good question, but we have a really strong plan around the debt side of the house.
Got it. That's all for me. Thank you.
Okay. Thank you, everyone.
Yeah. That concludes our question and answer session. I will now turn the conference back over to Varun Krishna for closing remarks. Varun?
Thank you, everyone, for listening to our call today. We look forward to talking with you again soon. Appreciate it.
That concludes today's conference call. You may now disconnect.