Rocket Pro TPO promo waives fees on home equity loans

Rocket Pro TPO, the wholesale and partnership business of Rocket Mortgage, is running a month-long promotion that waives the $795 origination fee for home equity loan submissions.

The promotion is set to run until Aug. 18 and "there are no strings attached," said Mike Fawaz, executive vice president, Rocket Pro TPO.

That includes the first lien loan not having to have been with Rocket, and no tenure or volume requirements from participating mortgage brokers.

Rocket Pro TPO also recently added an automated valuation model component to its HEL product that goes up to a $400,000 loan amount (most competitors are at $250,000, Fawaz said).

"When you look at that, waiving the fee, as well as our consistent, very, very aggressive pricing when it comes to this product, as well as the turn times. I mean, we're closing these things in 15 days," Fawaz said. "It's a recipe to help brokers in this market."

This promotion has been in the works for a while, Fawaz said, noting that when planning an offer like this, it normally takes two to five weeks to make it happen.

The timing was coincidental with recent events that affect the home equity loan market, including an uptick in refinance lock activity in June, both cash out as well as rate and term, according to Optimal Blue. Mortgage Banker Association credit availability data also said June's increase was due to a rise in cash-out refinance offerings.

"This is a great option, and based on broker feedback that it is needed in this market," Fawaz said. "We've seen an increase in this business in the last two to three months, our broker partners are really going out there and selling this product."

Cash-out refis in particular are a competing product to home equity loans. That was one of the why's behind the June 21 approval by the Federal Housing Finance Agency of the Freddie Mac second lien purchase pilot.

With home equity at or near record levels, the market has been looking for products that allow borrowers to tap it as rates remain high.

Fawaz noted Rocket Pro TPO has been offering home equity loans for the past two years, when asked about the Freddie Mac pilot.

But between the dropping of the origination fee and the addition of the AVM, the company is confident it is going to help more borrowers qualify, he said. The company noted that when this promotion ends, the AVM feature remains in place.

The no strings attached comments (Fawaz made this point several times during the interview) seemed to be aimed at rival United Wholesale Mortgage, which just came out with Govy125, a refinance product for Federal Housing Administration and Veterans Affairs loans, but requires the use of services that the company offers.

UWM also rolled a 0% down loan that is really a 3% second lien that must be paid back when the first lien is refinanced or amortized.

Rocket is going to monitor the market and see what the reception is to this promo, but the initial feedback is highly positive, Fawaz said.

"My ultimate goal…is how do we go out there to the broker community and put something out there and someone, a broker, a loan officer, are able to use it without having to go through hoops, by having to go through all kinds of things to be able to do so," Fawaz said.