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Regulatory Minimum Net Worth, Capital Ratio and Liquidity Requirements | 6 Months Ended
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Jun. 30, 2024
Mortgage Banking [Abstract] |
Regulatory Minimum Net Worth, Capital Ratio and Liquidity Requirements | Regulatory Minimum Net Worth, Capital Ratio and Liquidity Requirements Certain secondary market investors and state regulators require the Company to maintain minimum net worth, liquidity and capital requirements. To the extent that these requirements are not met, secondary market investors and/or the state regulators may utilize a range of remedies including sanctions, and/or suspension or termination of selling and servicing agreements, which may prohibit the Company from originating, securitizing or servicing these specific types of mortgage loans. Rocket Mortgage is subject to certain minimum net worth, minimum capital ratio and minimum liquidity requirements established by the Federal Housing Finance Agency (“FHFA”) for Fannie Mae and Freddie Mac (collectively defined as “GSEs”) Seller/Servicers, and Ginnie Mae (together with GSEs, the “Agencies”) for single family issuers. The effective requirements as of June 30, 2024 are listed below. Furthermore, refer to Note 5, Borrowings for additional information regarding compliance with all covenant requirements. As of June 30, 2024 and December 31, 2023, Rocket Mortgage was in compliance with these requirements. Minimum Net Worth The minimum net worth requirement for Fannie Mae and Freddie Mac is defined as follows: • Base of $2,500 plus 25 basis points of total GSE Residential First Lien Mortgage Servicing UPB, plus 25 basis points of total non-agency single-family outstanding serving portfolio, plus 35 basis points of the Ginnie Mae total single-family effective outstanding obligations. • Adjusted/Tangible Net Worth is defined as total equity less goodwill and other intangible assets, affiliate receivables, deferred tax assets net of associated deferred tax liabilities, and carrying value of pledged assets net of associated liabilities. The minimum net worth requirement for Ginnie Mae is defined as follows: • Base of $2,500, plus 35 basis points of the Ginnie Mae total single-family effective outstanding obligations, plus 25 basis points of total GSE single-family outstanding servicing portfolio balance, plus 25 basis points of total non-agency single-family outstanding serving portfolio. • Adjusted Net Worth is defined as total equity less goodwill and other intangible assets, affiliate receivables and net of associated liabilities, deferred tax assets net of associated deferred tax liabilities, and valuation adjustment of certain assets. Minimum Capital Ratio The minimum capital ratio requirement for Fannie Mae and Freddie Mac is defined as follows: • For Fannie Mae and Freddie Mac, the Company is also required to hold a ratio of Adjusted/Tangible Net Worth to Total Assets greater than 6%. The minimum capital ratio requirement for Ginnie Mae is defined as follows: • For Ginnie Mae, the Company is also required to hold a ratio of Adjusted Net Worth to Total Assets greater than 6%. Ginnie Mae total assets excludes the Ginnie Mae loan eligible for repurchase. Minimum Total Liquidity The minimum liquidity requirement for Fannie Mae and Freddie Mac is defined as follows: • Base liquidity; 7 basis points of the portion of the servicing UPB for GSEs if the Company remits interest or principal, or both, as scheduled, plus 3.5 basis points of total UPB of GSE servicing if the Company remits interest and principal as actually collected, plus 3.5 basis points of our other servicing UPB, plus 10 basis points of our servicing UPB for Ginnie Mae. • Origination liquidity; plus 50 basis points of the sum of mortgage loans held for sale at lower cost or market, mortgage loans held for sale at fair value, and UPB of interest rate lock commitments after fallout adjustment. • Supplemental liquidity; plus 2 basis points of our UPB serviced for GSEs, plus 5 basis points of our UPB serviced for Ginnie Mae. • Allowable assets for liquidity may include cash and cash equivalents (unrestricted), available for sale or held for trading investment grade securities (e.g., Agency MBS, Obligations of GSEs, US Treasury Obligations), and 50% of committed/unused Agency Mortgage Servicing advance lines of credit. The minimum liquidity requirement for Ginnie Mae is defined as follows: • 7 basis points of the portion of the servicing UPB for GSEs if the Company remits interest or principal, or both, as scheduled, plus 3.5 basis points of total UPB of GSE servicing if the Company remits interest and principal as actually collected, plus 3.5 basis points of our other servicing UPB, plus 10 basis points of our servicing UPB for Ginnie Mae, plus 50 basis points of the sum of loans held for sale and UPB of interest rate lock commitments after fallout adjustment. • Allowable assets for liquidity may include cash and cash equivalents (unrestricted), available for sale or held for trading investment grade securities (e.g., Agency MBS, Obligations of GSEs, US Treasury Obligations), and outstanding servicing advances. The most restrictive of the minimum net worth and capital requirements require Rocket Mortgage to maintain a minimum adjusted net worth balance of $1,500,000 as of June 30, 2024 and $1,568,586 as of December 31, 2023. As of June 30, 2024 and December 31, 2023, Rocket Mortgage was in compliance with this requirement.

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- Definition The entire disclosure for a mortgage banking entity related to capital requirements imposed by secondary market investors or state imposed regulatory mandates. The disclosure may include: (1) a description of the minimum net worth requirements related to (a) secondary market investors and (b) state-imposed regulatory mandates; (2) actual or possible material effects of noncompliance; (3) whether the entity is in compliance with the regulatory capital requirements, including (a) the entity's required and actual net worth amounts, (b) factors that may significantly affect adequacy of net worth such as potentially volatile components of capital, qualitative factors, or regulatory mandates; and (4) possible affects of noncompliance on amounts and disclosures in the notes to the financial statements. Servicers with net worth requirements from multiple sources may disclose (1) significant servicing covenants with secondary market investors with commonly defined servicing requirements (2) any other secondary market investor where violation of the requirement would have a significant adverse effect and (3) the most restrictive third party agreement, if not included above. The disclosure may also include additional information that might be disclosed in situations where substantial doubt about the entity's ability to continue as a going concern for a reasonable period of time. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 948 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481586/948-10-50-5 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 948 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481586/948-10-50-5 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 948 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (c) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481586/948-10-50-5 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 948 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 3 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481586/948-10-50-3 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 948 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 3 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481586/948-10-50-3 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 948 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 3 -Subparagraph (c)(2) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481586/948-10-50-3 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 948 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 3 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481586/948-10-50-3 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 948 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 4 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481586/948-10-50-4 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 948 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 4 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481586/948-10-50-4 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 948 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 4 -Subparagraph (c) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481586/948-10-50-4 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 948 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 4 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481586/948-10-50-4 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 948 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 4 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481586/948-10-50-4 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 948 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 4 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481586/948-10-50-4 Reference 14: http://fasb.org/us-gaap/role/ref/legacyRef -Name Accounting Standards Codification -Topic 948 -SubTopic 10 -Section 50 -Paragraph 3 -Publisher FASB -URI https://asc.fasb.org/1943274/2147481586/948-10-50-3 + Details
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