Mr. Cooper Mortgage Review 2021

Mr. Cooper overview

Good for: Borrowers looking for an online process, an easy-to-use app and a wide variety of mortgage options Mr. Cooper is a non-bank mortgage originator and servicer that operates throughout the U.S. The company, formerly Nationstar, was founded in 1994 and is headquartered in Coppell, Texas. Mr. Cooper offers a number of mortgage options, including:

• Home Possible, a program by Freddie Mac geared toward low- to moderate-income borrowers with as little as a 3 percent down payment
• HomeReady, a Fannie Mae program for low-income borrowers
• Investment loans
• Jumbo loans
• FHA streamline refinance
• FHA fixed and ARM
• Home equity loans
• VA IRRRL, cash-out refinance, fixed and ARM
• Agency jumbo/super conforming
• Non-QM loans

The lender also offers a “Close on Time Guarantee” for those purchasing a new home with a conventional loan. If the lender causes the closing to be delayed, it’ll send a check equal to the borrower’s full first month’s mortgage principal and interest payment. Another perk: Mr. Cooper Real Estate Rewards can match customers to a local real estate agent that’ll sell their current home at a discounted commission, and borrowers who buy their home using Real Estate Rewards can receive a credit, available in most states.

Loan types

• Conventional
• Jumbo
• FHA
• VA
• Fixed-rate
• Adjustable-rate
• Rate-and-term, cash-out and streamline refinancing
• Home equity loan
• Non-QM
• Investment property

Lender fees

Mr. Cooper’s lender fees vary by loan type. In general, origination fees on typical conventional conforming loans are $995 ($1,220 in New Jersey only). Prospective borrowers can get estimates of fees and rates based on inputs (property information, down payment, credit score and other factors) via the Mr. Cooper website.

Rates

Mr. Cooper doesn’t post current rates on its website, stressing instead that the rate is just one piece of a complicated puzzle. When Bankrate attempted to find rates on Mr. Cooper’s site, we were directed to fill out a form with contact information and wait for the lender to get in touch.

Reputation

Mr. Cooper is not accredited by the Better Business Bureau but has a grade of C+ from the organization. Its Trustpilot rating is 4.5 out of five stars, or “excellent.” Mr. Cooper ranked 10th in the 2020 J.D. Power rankings for U.S. Primary Mortgage Origination Satisfaction. Its score of 832 lagged the industry average of 856.

Mr. Cooper has run afoul of regulators on several occasions. In late 2020, the Consumer Financial Protection Bureau (CFPB) announced a multimillion-dollar order to settle claims Mr. Cooper “violated multiple federal consumer financial laws, causing substantial harm to the borrowers whose mortgages it serviced, including distressed homeowners.” At the same time, Mr. Cooper, PNC Bank and U.S. Bank also settled with the U.S. Department of Justice for similar servicing issues.

In April 2021, the CFPB announced it would be taking action in response to “unauthorized duplicate-payment drafts by Mr. Cooper [that] appear to have resulted in hundreds of thousands of consumers’ bank accounts being debited for multiples of their mortgage payments. Affected consumers have reported being charged overdraft fees and likely suffered additional harm as a result of these unauthorized withdrawals.”

Online services

Mr. Cooper doesn’t have brick-and-mortar locations. If you borrow with this lender, you’ll do so through a call center, its website or app. The lender’s website offers tips and educational articles about the home-buying and mortgage-lending process, and its easy-to-use app allows borrowers to check the status of their application and make payments. Mr. Cooper also offers prequalifications and verified approval online. In addition, once you’re under contract, the lender communicates via online channels and by phone, text and emails throughout the process.

Minimum borrower requirements

Mr. Cooper abides by the conforming loan requirements for mortgages approved by government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac, as well as those backed by the Federal Housing Administration (FHA) and the Department of Veterans Affairs (VA).

While VA loans (available to military veterans, active servicemembers and their families) sometimes offer no-down payment options, the other types of loans require a minimum down payment: 3 percent for conventional loans and 3.5 percent for FHA loans.

For a conventional loan with Mr. Cooper, borrowers should have a credit score of at least 620; for FHA loans, 580; and for VA loans, 600. Jumbo loans require a 700 score, at minimum, and non-qualified (non-QM) loans require a 680.

Refinancing with Mr. Cooper

Mr. Cooper offers refinancing; you can apply through the lender’s website or via its call center. The lender does not publish rates and costs for refinances. In its latest annual report, the lender says it aims to “retain our existing customers by providing them with attractive refinance options.”

Not sure if Mr. Cooper is right for you? Consider these alternatives

• LoanDepot mortgage review: This lender offers both an online option and more than 200 branches nationwide.
• Freedom Mortgage review: If you’re looking for a HELOC, Freedom Mortgage might fit the bill.
• Cooper mortgage review: This online-only lender offers a wider range of niche mortgage products.
• United Wholesale Mortgage review: This lender can be an option if you’re working with a mortgage broker.
• Costco Mortgage review: The popular retailer’s offering lets you compare bids from multiple lenders.

Breakdown of Mr. Cooper overall review score

• Affordability: 14.5/15
• Availability: 10/15
• Borrower experience: 14/15

Review methodology

To determine a mortgage lender’s Bankrate Score, Bankrate’s editorial team rates lenders on a scale of one to five stars based on a variety of factors relating to the lender’s products and services. Bankrate’s partners compensate us, but our opinions are our own, and partner relationships do not influence our reviews. Here is our full methodology.