dhollier@imfpubs.com

The Federal Housing Finance Agency late Tuesday gave Fannie Mae and Freddie Mac the green light to approve Rocket Mortgage’s acquisition of Mr. Cooper. The $9.4 billion all-stock deal, first announced in March, will make the combined company the second-largest GSE seller, just behind juggernaut United Wholesale Mortgage.

FHFA approval comes with certain stipulations. Fannie and Freddie must retain “strict counterparty concentration risk limits at 20%.” In addition, to ensure the safety and soundness of the mortgage market, the regulator says no market participant can account for more than 20% of Fannie or Freddie's servicing market.

That last proviso may create some concerns for the merged company. As of the end of the second quarter of 2025, the two companies together account for 15.1% and 14.1% of MBS outstanding at Fannie and Freddie, respectively. However, Keefe, Bruyette & Woods analyst Bose George pointed out that if you throw in subservicing, the combined entity’s market share is already at or over 20%.

FHFA’s announcement did not specify whether the 20% threshold includes subservicing.