Mr. Cooper Mortgage Review 2024
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Our Take
3.0
Mr. Cooper, one of the nation’s largest mortgage servicers, is also an online-only lender with a robust mobile app. But recent issues have damaged consumer trust, and home shoppers can’t customize their own rate quote on the website. Most likely to appeal to people who prefer to manage accounts online, but don’t mind picking up the phone to shop for the best deal.
Pros
- Mobile app goes beyond the basics.
- Perks and promotions include a 1% discount on your first year’s mortgage rate.
- Mortgage rates are lower than most lenders’, according to the latest federal data.
Cons
- Charged illegal fees to customers and agreed to a $3.6 million class-action settlement in 2024.
- Mortgage origination fees are on the high side, according to the latest federal data.
- Requires a call or email for personalized rates.
Lender | Min. credit score | Min. down payment | |
|---|---|---|---|
580 | 3% | Visit Lenderat New American Funding at New American Funding | |
620 | 3% | Visit Lenderat NBKC at NBKC | |
580 | 3.5% | Visit Lenderat Rocket Mortgage, LLC at Rocket Mortgage, LLC |
Full Review
Mr. Cooper is a nonbank lender based in Dallas. Loans are available nationwide.
🏠Popular loan types include: Fixed or adjustable rate; conventional; FHA; VA; jumbo; rate and term or cash-out refinance
đź’µ Home equity borrowing options: Home equity loans
Even if you didn’t get your mortgage through Mr. Cooper, it could be transferred there. Mr. Cooper is one of the country’s largest mortgage servicers, which means it processes payments and manages your escrow account.
Mr. Cooper offers some perks and promotions to reduce the costs of getting a mortgage. These include:
A temporary buydown program called the 1% Mortgage Markdown, which temporarily reduces your mortgage rate by 1% for the first year of a home purchase.
Cooper Cashback, which pays a bonus of up to $10,000 for buying and/or selling through Mr. Cooper’s network of preferred local real estate agents.
The “RateSwap” program for customers who got a purchase mortgage through Mr. Cooper, which waives the origination fee (up to $1,500) for any Mr. Cooper refinance within three years.
A close on time guarantee, which reimburses you for the first month’s principal and interest if the mortgage doesn’t close on or before the date specified on the contract.
Mr. Cooper also partners with Xome, an online platform for home listings and live real estate auctions, which is owned by the same parent company.
» MORE: How to apply for a mortgage
How we score Mr. Cooper
Every year, NerdWallet writers and editors use the latest data and independent research to score lenders on an overall rubric, reflecting factors that are most important to mortgage borrowers. Select Why This Category Matters below to learn more.
Mr. Cooper has a NerdWallet home loans rating of three stars overall. Here’s a breakdown of this year’s score.
Category | Star rating |
|---|---|
Average mortgage rates and fees | |
Mortgage rate transparency | |
Variety of loan types | |
Customer experience |
- Why This Category Matters
Average mortgage rates and fees (30%)
Our team analyzes federal data to compare mortgage lenders’ origination fees and offered mortgage rates, measuring annual averages across all loan types, as reported by the lenders. The lowest combination of average rates and fees earns the highest star rating in this category. (It’s worth noting that loans considered higher risk, including those such as FHA loans that are easier to qualify for, often have higher interest rates and fees.) Pro tip: In some cases, paying upfront fees may lower a borrower’s mortgage interest rate.
Mortgage rate transparency (25%)
We check how straightforward it is to comparison-shop rates online. NerdWallet’s transparency ratings are higher for lenders that post sample rates on their sites, and highest for sites with self-serve tools that allow shoppers to see what rates might be like for their particular loan. Pro tip: Borrowers who compare customized rate quotes by applying to three or more lenders could save thousands of dollars over the life of their loan.
Variety of loan types (25%)
Finding the right mortgage is different for each borrower. The highest star ratings in this category are awarded to lenders that our research shows offer a wide range of loan types, improving the odds that a borrower will find the best match for their needs: options for purchase and refinance; fixed-rate and adjustable-rate loans; government-backed FHA, VA or USDA loans; renovation or construction loans; and home equity loans or HELOCs.
Customer experience (20%)
How easy is it to interact with this lender? The highest-rated lenders in this category offer features that are convenient and clarifying for borrowers, such as: an online application, multiple customer service options, a helpful mobile app and candid closing timeline communications.
Mr. Cooper’s average mortgage rates and fees score is based on data from its parent company, Nationstar Mortgage.
We deducted points for a class action lawsuit which found that Mr. Cooper harmed consumers by charging illegal fees.
» MORE: How to get the best mortgage rate
What borrowers say about Mr. Cooper
NerdWallet’s lender star ratings assess objective qualities, including rates, fees and loan offerings. To help you understand borrowers’ subjective experiences, NerdWallet has gathered customer satisfaction ratings from J.D. Power and Zillow. We also contacted Mr. Cooper customer support.
→ Below-average score in J.D. Power’s 2023 U.S. Mortgage Origination Satisfaction Study. Mortgage origination covers the initial application through closing day.
Score: 707 out of 1,000. Industry average for origination is 730.
→ Below-average score in J.D. Power’s 2024 U.S. Mortgage Servicer Satisfaction Study. A mortgage servicer handles loan payments.
Score: 577 out of 1,000. Industry average for servicing is 606.Â
→ Above-average customer rating on Zillow.
Customer rating: 4.88 out of 5, as of the date of publication. Rating reflects more than 130 customer reviews.
🤓 Our Nerds say…
Online chat starts with a bot, Mr. Cooper’s virtual assistant called “Coop.” If the automated prompts don’t serve you what you need, you can connect with a live agent instead. When we tried it, we only had to wait two minutes before a live agent responded.
Mr. Cooper and consumer trust
Mr. Cooper has seen some negative headlines recently, but only one met our criteria to impact the lender’s NerdWallet star rating.
Illegal fees: In April 2024, Mr. Cooper agreed to a $3.6 million class action settlement for charging unlawful fees to customers who made payments online or over the phone. Mr. Cooper did not respond to our request for comment. Because this violation directly harmed consumers and imposed a monetary penalty on Mr. Cooper, we deducted points from the lender’s overall score.
Data breach: In October 2023, a hack exposed the personal information of nearly 14 million current and former Mr. Cooper customers. On its microsite MrCooperIncident.com, the company details its response, such as giving free identity protection services to affected customers and taking steps to strengthen its digital defenses.
Mistaken withdrawals: In June 2023, the CFPB issued a $25 million fine to Mr. Cooper’s electronic payments vendor ACI Worldwide. In 2021, the vendor mistakenly withdrew more than $2.3 billion from almost 500,000 Mr. Cooper customers during a system test. In a press release, Mr. Cooper said it immediately reported the error and worked to correct the mistaken drafts and related fees.
Alternatives to a home loan from Mr. Cooper
We recommend comparing mortgage rate offers from three or more lenders.
Rate also offers temporary interest rate buydowns and scores better than Mr. Cooper in rate transparency.
New American Funding also has a highly rated mortgage-focused mobile app.
» MORE: Best mortgage lenders
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More from NerdWallet
NerdWallet’s overall ratings for mortgage lenders are evaluated based on four major categories: average mortgage rates and origination fees, rate transparency to consumers, variety of loan types (purchase, refinance, fixed and adjustable, for example) and customer experience. Among the factors we consider in these categories are: options to apply for home loans online, typical time to close, mobile app experience, level of detail about mortgage rates on lender websites, and NerdWallet’s own analysis of the rates and fees lenders reported in the latest available Home Mortgage Disclosure Act data. These and other items inform detailed rubrics, which generate ratings from 1 star (poor) to 5 stars (excellent). Read more about how we rate mortgage lenders here.
