By Jody Godoy | REUTERS
A group of U.S. Senators have demanded that federal antitrust enforcers explain why they did not seek to block Rocket Companies’ $1.75 billion acquisition of real estate listing platform Redfin, saying the deal could raise costs for homebuyers.
U.S. senators including Elizabeth Warren and Cory Booker, the top Democrats on the Senate banking and antitrust committees, wrote to the U.S. Department of Justice and Federal Trade Commission on Wednesday asking why they had not challenged the merger announced in March.
Redfin shareholders are scheduled to vote on whether to approve the deal on Wednesday.
Rocket’s announcement that it plans to acquire mortgage servicer Mr. Cooper for $9.4 billion only raises further concerns about consolidation in the homebuying industry, said the group, which included Senator Bernie Sanders of Vermont, an Independent, and Democratic Senators Mazie Hirono of Hawaii and Tina Smith of Minnesota.
“These deals would combine the second-largest mortgage originator, the largest mortgage servicer, and the third-most-visited real estate brokerage website in the United States, into a massive, vertically integrated conglomerate that may reduce choice and raise prices for American families in the housing market,” the lawmakers said.
A spokesperson for Rocket did not immediately respond to a request for comment.
DOJ antitrust division head Gail Slater and FTC Chairman Andrew Ferguson have said they will not get in the way of lawful mergers, but said they will scrutinize deals for anticompetitive effects that hit consumers or workers, in an approach Slater dubbed “America First antitrust.”
The Redfin acquisition could allow Rocket to steer homebuyers using Redfin towards its real estate agents and mortgage offerings, and leverage data about user behavior to raise mortgage rates, the senators said.
Average home prices are more than 50% above where they were in 2019, before the COVID-19 pandemic, and expected to continue rising this year. The rate for 30-year fixed-rate mortgages was 6.89% last week, reflecting pressure on the U.S. bond market from Congress’ consideration of a massive tax and spending bill.
Editor’s Note: Reporting by Jody Godoy in New York; Editing by Christopher Cushing
