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Mr. Cooper mortgage review
A simple selection of home loans may not make up for this lender’s poor reputation.
finder.com’s rating: 3.5 / 5.0
★★★★★
Nationstar Mortgage rebranded itself in August 2017 and has since been doing business as Mr. Cooper. The mortgage provider has a small suite of home loans available and boasts a couple of money-saving programs. But dubious customer experiences and former questionable practices make Mr. Cooper a risky choice.
Details
| Loan products offered | Conventional, Jumbo, FHA, VA, Refinance |
|---|---|
| Minimum credit score | Conventional: 620 |
| Minimum down payment (Conventional) | 5% |
| State availability | Available in all states |
| NMLS # | 2119 |
Our take on Mr. Cooper mortgage
Mr. Cooper’s footprint is where it truly stands out. The lender offers its mortgage products in many US territories that other lenders of its size can’t or won’t reach. Other than that, Mr. Cooper’s offerings are fairly standard, with no specialty mortgage products.
More importantly, Mr. Cooper has two government actions and a current Consumer Financial Protection Bureau (CFPB) investigation underway, which makes it hard to recommend the lender.
CFPB investigating unauthorized withdrawals
The Consumer Financial Protection Bureau (CFPB) issued a warning statement about Mr. Cooper on April 27, 2021. Recent complaints state that Mr. Cooper has been debiting borrowers’ bank accounts multiple times, resulting in duplicate payments, overdraft fees and other losses.
While it’s still investigating these withdrawals, the CFPB states that it will attempt to resolve the situation quickly. If Mr. Cooper services your mortgage, monitor your bank accounts and report any duplicate payments to Mr. Cooper. Or you can directly submit complaints to the CFPB’s website.
Mr. Cooper requirements
Qualifying for a loan with Mr. Cooper depends on various factors, including your creditworthiness, your debt-to-income ratio and your home’s loan-to-value ratio.
The type of loan you want also plays a factor. For example, FHA requires a 3.5% minimum down payment for its loans, while a VA loan may require no down payment to borrowers who qualify.
This lender doesn’t provide specific outlines for these requirements, but you can apply for prequalification before submitting a full mortgage application.
Documentation
Mr. Cooper doesn’t provide an official documents list, but you’ll want to gather the following information before you apply:
- Pay stubs for the past two months
- W-2s for the past two years
- Tax returns for the past two years
- Balance statements on bank and investment accounts for at least the past month
- Statements of existing debt
- Mortgage or rental payment history for the past year
- Proof of additional assets or down payment gifts
Costs and fees
Loans can carry different fees based on what type you’re applying for, but there are some general fees you can expect to pay throughout the process.
- Points. You’ll see certain fees calculated as points, including the origination fee. One point is equal to 1% of the loan amount, so an origination fee of two points on a $300,000 loan would be $6,000.
- Application. Outside of the origination fee, you could pay an application fee to cover document processing and an underwriting fee for evaluating your application and making a determination on it.
- Third-party. A third party may conduct an appraisal and require you to pay the fee. You may also get pushed toward the title services, which includes the title search and getting title insurance.
- Ongoing. Insurance and taxes are the two biggest ongoing costs, and you may be required to open up an escrow account to stay on top of them.
How to apply for a mortgage with Mr. Cooper
Start your application process with Mr. Cooper online or over the phone.
- Go to the Mr. Cooper website and select Buy/Sell a Home.
- Select Pre-Qualify Now, then choose the option that best fits your situation — either Get Prequalified, Get Started or Apply Now.
- Step through questions about the property you’re looking for and select Next at the end of each page.
- Enter your personal information, contact information, and answer personal questions. Select Next at the end of each page.
- Answer employment and financial questions and select Submit.
- Wait for a Mr. Cooper representative to contact you to discuss your options.
What types of mortgages can I get through Mr. Cooper?
- Conventional
- FHA
- VA
- USDA
- Jumbo
Other mortgage products Mr. Cooper offers
Find a few other options with Mr. Cooper, including:
- Conventional refinancing. Lower your monthly mortgage payments and reduce your interest over the life of your loan by refinancing.
- FHA Streamline refinancing. Get your FHA loan refinanced and potentially lower your monthly payments.
- VA Interest Rate Reduction Refinance Loan (IRRRL). A refinancing option for existing VA loans that doesn’t require credit underwriting. But you’ll pay a funding fee.
Alternatives to Mr. Cooper
This lender offers a pretty standard set of mortgage options with no specialty loans or mortgage programs geared towards first-time borrowers. But if you’re applying for a conventional mortgage, Mr. Cooper’s Close On Time Guarantee may be attractive to you.
But with its slim selection of loans and less-than-transparent pricing, you may prefer to go with another lender.
For a greater array of mortgages, Draper & Kramer Mortgage, Guaranteed Rate, North American Savings Bank and Stearns Lending offer an impressive range of options for borrowers of all types, overwhelmingly positive customer reviews and in some cases, greater underwriting flexibility.
Or, if you want to minimize interactions with a loan officer, save on fees and get faster preapproval, consider a 100% digital lender like Better or Beeline. Neither charge origination fees, and you can apply online 24/7 to get a preapproval letter that you can use to negotiate with sellers.
Compare top brands by home loan type, state availability and credit score. Select See rates to get a personalized quote today.
Mr. Cooper reviews and complaints
Out of the 35 mortgage servicers J.D. Power rated in 2021, Mr. Cooper ranked 19th for customer satisfaction. It earned 770 out of 1,000 points, or 17 points under the industry average of 787.
As of December 2021, the Better Business Bureau (BBB) profile for Mr. Cooper doesn’t paint a good picture for the company. Mr. Cooper has closed 1,467 complaints over the last three years, and out of 394 customer reviews, it scores 1.08 out of 5 stars. It’s not accredited and holds a B- ranking from the BBB for two government actions taken against it in the last two years.
Trustpilot is the only review site where Mr. Cooper fares well. With 1,795 reviews, the lender earned a TrustScore of 4.5 out of 5 stars.
Mr. Cooper pros and cons
Pros
- Widely licensed. Mr. Cooper is licensed in all 50 states, Washington DC, Guam, Puerto Rico and the US Virgin Islands.
- Close On Time Guarantee. Get your first mortgage payment covered by Mr. Cooper if your qualifying mortgage doesn’t close on time.
Cons
- Overwhelmingly negative reputation. Between its BBB profile, government actions and J.D. Power ranking, customer experiences with Mr. Cooper have been negative and damaging for many.
- No specialized loans. You won’t find a whole lot beyond the basic selection of mortgage options.
What is Mr. Cooper?
Mr. Cooper, formerly Nationstar Mortgage, is a mortgage provider based in Dallas, Texas. Several settlements and government actions against Mr. Cooper were resolved in 2018, including suits by the California Department of Business Oversight and New York Department of Financial Services — as well as a fine by the state of Massachusetts. But in addition to the current CFPB investigation, the lender has had two government actions taken against it in the last two years.
In December 2020, Mr. Cooper/Nationstar was required to pay $73 million in redress to its loan customers and $1.5 million in fines to the CFPB for causing what CFPB called “substantial harm” to over 40,000 borrowers.
Complaints included mishandled loan modifications, unlawful foreclosures, failing to make tax payments from borrower escrow accounts and refusing to terminate private mortgage insurance after it was no longer required. Representatives from Mr. Cooper acknowledged the issues and claimed that management took steps to address the problems during the investigation.
In March 2021, the New York Attorney General’s office settled with Champion Mortgage, the division of Mr. Cooper/Nationstar that handles reverse mortgages, after allegations that the servicer gave misleading information to borrowers who were at risk of losing their homes. Champion agreed to pay $500,000 to a program in New York designed to protect senior citizens who have reverse mortgages.