A merger in the land of mortgages.

From Marketplace, I'm Sabri Beneshore in for David Bruncaccio.

Rocket, the company behind Rocket Mortgage, which offers mortgages, has struck a $9.5 billion

deal to buy Mr. Cooper, which collects mortgage payments.

Marketplace's Nova Safo is here with more on this massive proposed deal.

Hi, Nova.

Good morning, Sabri. So why does Rocket want to buy Mr. Cooper? What's their business case?

Well, so Rocket is buying, it has been on a buying binge, really. It's bought the online real estate

brokerage firm Redfin already. That was literally less than a month ago. And now, as you mentioned,

it's buying Mr. Cooper, which is the country's biggest loan servicer. And as you mentioned, loan servicers do the actual monthly payment

collecting. Now, here's the interesting part. They get a fee for that collecting. So what Rocket is

buying here is those fees. Also, it's buying Mr. Cooper's huge customer base, 7 million clients.

Rocket says it wants to be there when

those people are ready to refinance or buy their next home. And critically, Rocket is buying data.

It says it will feed all of that data into artificial intelligence, Sabri, to better anticipate

what customers want. Wow, AI. Okay. So interest rates are still relatively high. And as a result, we've seen the mortgage industry struggle. Why does Rocket want to go spend billions of dollars in that environment now to buy another company?

Yeah, well, listen, the companies have been talking innovation with this deal, but this is also about survival during this very tough period. I mean, mortgage applications

are at three-decade lows. And what analysts were focused on in the conference call announcing

this merger is instructive. They were largely asking about cost savings. So that tells you,

Sabri, a lot about what this merger is about, savings, reducing costs. And this is in line with

what you're seeing in the mortgage industry broadly. Smaller players are disappearing. Bigger players are getting bigger.

All right. Marketplace is Nova Saffa. Thank you so much. You're welcome. So much buying and selling happens digitally these days, but there are still actual human face-to-face marketplaces out there.

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