Please ensure Javascript is enabled for purposes of website accessibility

Sources: Quicken Loans Planning What Could Be 2020's Largest IPO

By Bram Berkowitz – Jun 12, 2020 at 11:25AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The company has become the largest home lender in the U.S., closing nearly half a trillion dollars' worth of mortgages between 2013 and 2018.

In what would be a massive shift in the mortgage industry, Quicken Loans is reportedly planning to go public, according to multiple media outlets citing anonymous sources. The news comes as IPO activity has begun to pick up in recent days. Sources say that a Quicken Loans IPO could be valued in the tens of billions of dollars, making it possibly the largest one of 2020. 

The largest home lender in the U.S., Quicken Loans says on its website that it closed mortgages worth nearly half a trillion dollars from 2013 through 2018. But like other non-bank mortgage lenders, the company found itself in an uncomfortable position when the coronavirus pandemic struck.

Quicken Loans

Image Source: Quicken Loans

Quicken Loans is in the business of mortgage servicing. It originates mortgages, then quickly sells them to government-sponsored entities like Fannie Mae and Freddie Mac, which bundle them into mortgage-backed securities that they in turn sell to investors.

But when large numbers of suddenly unemployed borrowers began to take forbearance on their mortgage payments, Quicken Loans and its non-bank lender peers were in trouble because they don't have access to the Federal Reserve's overnight lending facilities, but were still contractually obligated to pay the investors who hold those mortgage-backed securities. That had them staring down the barrel of a huge liquidity crunch.

However, things seem to have settled down for Quicken Loans.

CEO Jay Farner told CNBC in April that March had been the company's biggest closing month in its history. He added that the company closed roughly $53 billion in mortgages in the first quarter, and was on pace to do nearly $75 billion in the second quarter.

The Federal Reserve dropped the fed funds rate to near zero in March and mortgage interest rates have fallen dramatically, triggering a wave of refinancing. On Thursday, the average rate being offered on the 30-year fixed-rate mortgage dropped to a new record low of 2.97%, Mortgage News Daily reported.

The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/27/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.