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.
|Loan products offered||Conventional, Jumbo, FHA, VA, Refinance|
|Minimum credit score||Conventional: 620|
|Minimum down payment (Conventional)||5%|
|State availability||Available in all states|
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 submit complaints directly on 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.
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. An appraisal may be done by a third party and require you to pay a fee. Title services may also get pushed to you, which include looking up the title 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?
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.
How Mr. Cooper’s mortgage products compare to other lenders
This lender offers a pretty standard set of mortgage options with no specialty loans, such as construction loans or mortgage programs geared toward certain occupations or first-time borrowers. But Mr. Cooper does offer two ways to save.
If you’re applying for a conventional mortgage, you have the chance to qualify for the Close On Time Guarantee. This program guarantees your loan will close on time, or Mr. Cooper will pay the principal plus interest on your first month’s mortgage payment.
Receive a rebate on your agent’s fee of 15% when you use a real estate agent in the Xome Agent Network through Mr. Cooper. As of June 2021, customers in Arkansas, Iowa, Kansas, Louisiana, Mississippi, Missouri, Oklahoma, Oregon and Tennessee aren’t eligible to participate in the Xome Purchase Pro program and aren’t able to get the rebate.
Compare mortgage lenders and brokers
Compare these lenders and lender marketplaces by the type of home loan you’re searching for, state availability and minimum credit score (for a conventional loan). Select See rates to provide the company with basic property and financial details for personalized rates.
Mr. Cooper reviews and complaints
Out of the 35 mortgage servicers rated by J.D. Power in 2020, Mr. Cooper came in toward the bottom at 27th for customer satisfaction. It earned only 749 out of 1,000 points, which is 32 points shy of the industry average 781 points.
As of June 2021, the Better Business Bureau (BBB) profile for Mr. Cooper doesn’t paint a better picture for the company. Mr. Cooper has closed 1,387 complaints over the last three years, and out of 325 customer reviews, it scores 1.11 out of 5 stars. It’s not accredited and holds a C+ ranking from the BBB for two government actions taken against the lender in the last two years.
Pros and cons of Mr. Cooper
- 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.
- 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.
Rhys Subitch is the loans editor at Finder, guiding Americans toward smart borrowing decisions. With over half a decade of experience researching, editing and writing for a Fortune 500 company, university and several independent publications, Rhys brings readers the most up-to-date and curated info in the lending sphere. They make frequent appearances on Finder's YouTube channel to talk through loan topics that range from the very basics to the latest government assistance programs. Before specializing in lending, Rhys was a personal finance writer for Finder’s credit cards, insurance, banking and mortgage verticals. They hold a BA in sociology and a certificate in editing from the University of Washington, Seattle.
Mr. Cooper’s mortgage products are available nationwide and in many US territories. And the lender offers most of the standard loan options offered by lenders of its size. But with two government actions and a current CFPB investigation in the works, you may want to search for a lender with a better reputation.