Windsor-based mortgage broker Edison Financial will rebrand as Rocket Mortgage in August and begin making direct loans.
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The presence of America’s largest mortgage lender in Canada will no longer be an open secret, with Rocket Companies’ subsidiary Edison Financial set to rebrand as Rocket Mortgage next month.
The company will officially change its name to Rocket Mortgage Canada on Aug. 8 and do business as “Rocket Mortgage” — the same name as Rocket Companies’ mortgage subsidiary headquartered on the other side of the Detroit River.
“Since I started in this space, just about every mortgage company in Canada has stated a goal to become the Rocket Mortgage of Canada,” said Edison Financial President Hash Aboulhosn, in a tweet. “I’m incredibly proud that our team has finally been the one to do it.”
Relaunched in 2020 with seed funding from Rock Holdings Inc., Windsor-based Edison Financial has grown from a company with four employees
serving only the province of Ontario to a 140-employee digital mortgage brokerage serving all 10 Canadian provinces.
Edison Financial is currently a mortgage brokerage offering loan products from more than 50 lenders. Later this year it will also become a direct lender in Canada but will continue to offer options from other lenders alongside its own products, the company said.
The rebrand “reflects the company’s mission to revolutionize the Canadian mortgage industry with an emphasis on harnessing technology to simplify the home loan process,” the companies said.
“Our process removes the complexity of getting a home loan – replacing it with a fast, enjoyable experience,” said Rocket Mortgage CEO Bob Walters, in a statement. “This is something that has been lacking in the Canadian market, and we are eager to help our sister company show Canadians just how simple getting a mortgage can be.”
Aboulhosn founded Edison Financial in 2017 before winding the company down in 2018 to join Lendesk, a Canadian mortgage technology provider which was acquired in 2019 by Rock Holdings. He left his position as Lendesk’s chief financial officer in 2020 to reboot Edison Financial with seed funding from Rock Holdings, the companies said at the time.
Rocket Companies obtained a controlling interest in Edison Financial through investments it made in 2020 and 2021, the company said in its most recent annual report to investors. Rocket’s Canadian operations — EFB Holdings Inc. (“Edison Financial”), Lendesk Canada Holdings Inc. and RockTech Canada Inc. — netted a $17.3 million 2021 loss before income taxes, up from a $13.1 million loss in 2020 and an $8.3 million in 2019, the report said.
In an investor prospectus for Rocket Companies’ August 2020 initial public offering, the company said Lendesk and Edison Financial marked Rocket’s first international expansion, “as we believe our success in the U.S. can be leveraged in the Canadian mortgage market, a market of approximately $761 billion (Canadian) of annual mortgage originations.”
“Both businesses leverage our core strengths of proprietary technology and obsession with the client experience to bring a better home-buying experience to our new clients in Canada,” Rocket executives said.
Recently, Canadian housing markets have been facing headwinds similar to the U.S., with rising home prices and mortgage rates expected to curb sales this year and next. In a June forecast, economists with the Canadian Real Estate Association projected that home sales will fall by 14.7 percent this year and by another 2.8 percent next year. If that forecast pans out, 2021 home sales will still be the second-highest in history.
Rocket as technology provider
Lendesk is a loan origination platform (LOS) that provides a point of sale system (POS) for mortgage professionals and a loan origination system for private lenders.
Lendesk launched a proprietary, direct-to-lender, mortgage application network — Spotlight — in October 2018, “to transform what was once a complicated process, involving multiple touchpoints and channels of communication, into one streamlined mortgage origination process,” Rocket executives said in their IPO prospectus. “By serving as the single point of contact for brokers to submit, and lenders to approve mortgage applications and assuring all paperwork is completed efficiently and accurately, we believe Lendesk is helping close the costly communication and workflow gap that was plaguing the industry.”
Edison Financial “will use Lendesk’s Spotlight as its lender submission platform of choice, leveraging the system’s modern application programming interfaces and industry-leading technology as its core platform to help in providing service that is unmatched in Canada today,” they said.
In the U.S., Rocket makes its mortgage origination technology available as an end-to-end “mortgage-as-a-service” to any lender with licensed mortgage loan officers through the Salesforce Financial Services Cloud.
“The market opportunity is significant, as there are nearly 5,000 FDIC-insured banks and more than 5,000 credit unions in the U.S.,” Rocket said in announcing its partnership with Salesforce last fall. “While some have highly specialized mortgage operations, most have disparate partners and technology vendors that handle home loans for them.”