Mr. Cooper Review 2022: Good Borrower Incentives, but Consumer Complaints May Be a Red Flag

We want to help you make more informed decisions. Some links on this page — clearly marked — may take you to a partner website and may result in us earning a referral commission. For more information, see How We Make Money.
Mr. Cooper Mortgages Review 2022
Mr. Cooper Mortgages Review 2022
Mr. Cooper Mortgages Review 2022
  • Minimum Credit Score:
    580 FHA; 600 VA; 620 conventional
  • Minimum Down Payment:
    0% to 3.5%. depending on loan type
  • Can Apply Online:
    Yes
  • Operates In:
    All 50 States

NextAdvisor’s Take

Pros
  • Advertises general mortgage rates on its website
  • Offers a totally digital mortgage application and mobile app
  • Moving expenses may be covered through Mr. Cooper’s Zero Dollar Move program.
  • Rate discount credit for existing customers
  • Advertises a guaranteed on-time closing or Mr. Cooper will cover a borrower’s first principal-and-interest payment
  • Listing agent fee discount if you use the Mr. Cooper Real Estate Reward program
Cons
  • Does not offer USDA loans, home equity lines of credit, and reverse mortgages
  • History of consumer complaints to the CFPB may be a red flag
  • Requires a call or email for personalized rate quote
  • No in-person branches
The Bottom Line

Because Mr. Cooper offers conventional, jumbo, and government-sponsored home loans in all 50 states and Washington, D.C., it’s a very accessible lender with good customer incentives that may fit your needs. Just be sure you’re aware of the lender’s complaint history before applying. 

Editorial Independence

As with all of our mortgage lender reviews, our analysis is not influenced by any partnerships or advertising relationships. For more information about our scoring methodology, click here.

Mr. Cooper Full Review 

Mr. Cooper is formerly known as Nationstar Mortgage and is headquartered in Dallas, Texas. The company offers conventional and government-insured mortgages in all 50 states and Washington, D.C. The Mr. Cooper website claims it is the largest nonbank mortgage servicer in the U.S. with 3.5 million customers nationwide. 

The lender has an all-digital mortgage application and provides services to smooth out the homebuying process before and after closing day. Plus, customers can compare rates online and get a customized rate quote by contacting the lender. But before applying with the lender, it’s a good idea to know about its history of consumer complaints and regulatory actions. Here’s what to know about Mr. Cooper.

Mr. Cooper: Mortgage Loan Types and Products

Mr. Cooper offers mortgages for people looking to purchase or refinance a home. On the menu right now:

Mr. Cooper also offers programs to facilitate the entire homebuying process. For instance, buyers may be able to get their moving expenses covered through Mr. Cooper’s Zero Dollar Move program. And if you need to sell your current home, you could get a discount on your listing agent’s fee through the Real Estate Rewards option. 

On certain home loans, borrowers can choose the type of interest rate they receive: fixed or adjustable-rate. A fixed-rate mortgage comes with an interest rate that never changes. Mr. Cooper offers fixed interest rates on terms ranging from 15 to 30 years. 

Adjustable-rate mortgages, or ARMs, come with a fixed rate for a certain amount of time. After the fixed period ends, the rate may go up or down in regular intervals. Mr. Cooper offers conventional adjustable-rate loan terms of 3/6, 5/6, 7/6, and 10/6. The rate on a 3/6 ARM, for instance, is fixed for the first three years and then may change every six months for the remaining loan term. FHA and VA ARMs are available in 3/1 and 5/1 terms, where the rate can change once a year after the fixed period ends.

Mr. Cooper doesn’t offer mortgages backed by the U.S. Department of Agriculture (USDA loans), home equity products, construction loans, and renovation loans.

Mr. Cooper: Mortgage Transparency

Mr. Cooper’s website advertises daily interest rates for conventional loans, FHA loans, and VA loans, and it provides resources to help borrowers understand the loan menu and homebuying process. You can get a more personalized rate quote with no hard credit pull by calling the lender. (Once you move to the mortgage application, though, you’ll need to agree to a hard credit pull. This is standard among all lenders).

Mortgages are available in all 50 states and Washington, D.C., though you won’t find brick-and-mortar branches for in-person help. You can fill out the application online or over the phone and log into a personal portal to get real-time progress updates, upload paperwork, e-sign documents, and ask questions along the way. After closing, the Mr. Cooper app can help you estimate your home value, make payments, and learn about homeowner topics such as property taxes.  

When you’re comparing mortgage lenders, it’s good to know whether it has a history of regulatory actions and complaints. Nationstar and Mr. Cooper customers logged 1,247 mortgage-related complaints against the lender through the Consumer Financial Protection Bureau (CFPB) in the year 2020. This amount of consumer complaints equates to approximately 8.5 complaints per 1,000 loans originated — much higher-than-average compared to other lenders we have reviewed. The most common complaint cited in 2020 was “trouble during payment process.”

Mr. Cooper has also been the subject of regulatory actions on several occasions. In late 2020, the Consumer Financial Protection Bureau alleged that Nationstar violated multiple federal consumer finance laws between 2012 and 2015, “causing substantial harm to the borrowers whose mortgages it serviced, including distressed homeowners.” According to the CFPB, Nationstar was ordered to pay $73 million to more than 40,000 harmed borrowers, in addition to more than $6 million in fees and penalties. 

NextAdvisor contacted Mr. Cooper to request comment on the CFPB complaints and regulatory actions. A Mr. Cooper representative shared the following response in a written statement: 

“Mr. Cooper is committed to the continued improvement of the home loan experience for our more than 3.5 million customers. In the last few years, we have fostered a culture built on customer advocacy that starts with senior leadership and extends through all levels of the organization, and we have continued to invest in technology and people to maintain our position as an industry leader. To keep the dream of homeownership alive, we’re focused on designing a fast, flexible experience through digital solutions that provide more self-service capabilities and simplified processes. Above all else, we want to delight our customers, and we are investing more than ever before on customer experience initiatives. 

To reinforce our commitment, we recently named a leader over these efforts as our Chief Experience and Brand Officer. The Customer Experience team is focused on listening to our customers to drive a holistic understanding of their experience with us. With a deep focus on understanding through research, insights and experience design, this team will help determine areas of opportunities to better support customers.”

In 2021, the CFPB acting director made a statement addressing an ongoing investigation of Mr. Cooper on reports of unauthorized duplicate-payment charges. A Mr. Cooper representative responded to NextAdvisor’s request for comment with the following written statement: 

“Regarding the unauthorized withdrawals that occurred due to an error from our electronic payments provider … when Mr. Cooper discovered the issue our customers were experiencing, we immediately worked to rectify the issue. We quickly reported the error to our customer’s banks and worked with them to prevent any financial impact to our customer’s accounts by providing credits and reversing the incorrect drafts and fees which might have been charged.”

Mr. Cooper: Mortgage Rates and Fees 

Mr. Cooper advertises daily interest rates for conventional loans with 30-year and 15-year terms along with 30-year FHA and VA loans. These rates are based on a few assumptions, such as that your credit score is at least 740, you’re buying 2 discount points, and your down payment is 30%. So everyone won’t be able to qualify for the lowest advertised rates. 

Mr. Cooper didn’t send a list of fees they charge at closing, but the following costs are common across the industry: 

Current Mr. Cooper customers can get a credit for up to 0.5% off their interest rate when purchasing a home. So for every $100,000 of the loan amount, borrowers save about $500. 

To qualify for a conventional mortgage, borrowers need a credit score of at least 620 and a minimum down payment of 3%, though the down payment may increase for certain loans. Borrowers applying for FHA loans will need a credit score of at least 580 and down payment of 3.5%. VA loans at Mr. Cooper require a minimum credit score of 600. There’s no down payment with VA loans, though borrowers may need to cover an upfront funding fee.

Borrowers can lock in a mortgage rate for up to 90 days initially and then pay a fee to extend the rate lock. Mr. Cooper is closing loans within 30 to 45 days and offers a Close on Time Guarantee. Through this program, Mr. Cooper will cover a borrower’s first principal-and-interest payment if they don’t close a purchase loan on time. 

After closing, some borrowers choose to sell their home, refinance, or pay off the balance. If you decide to do so, you won’t have to worry about a prepayment penalty. 

Refinancing With Mr. Cooper

Refinancing a home loan may help you save money, borrow against your home equity, or adjust your loan term. Mr. Cooper offers the following types of refinance loans:

  • Cash-out refinances: If you have enough home equity, you may be able to take out a new mortgage for more than you owe. You’ll pay down the old loan and keep the rest of the money, which you can use for any expense. There are trade-offs, though, as your mortgage payments and payoff timeline will both increase.
  • Rate-and-term refinances: A rate-and-term refi allows you to swap out your interest rate, new loan term, or both. Homeowners usually apply for rate-and-term refinances to save money or switch from an ARM to a fixed-rate loan.
  • Streamline refinances: If you have an existing government-sponsored loan, you might be able to save money through the VA interest rate reduction refinance loan (IRRRL) or the FHA streamline loan. These programs cut out some of the paperwork involved with a refinance and make it easier to save money. 

Mr. Cooper Compared to Other Mortgage Lenders

Mr. CooperPennyMac Loan ServicesGuaranteed Rate
Minimum credit score580 for FHA; 600 for VA; 620 for conventionalTypically 620 for a conventional loan and 580 for FHA loan580 for FHA and VA; 620 for conventional; 680 for jumbo
Minimum down payment0% for VA loans; 3% for conventional loans; 3.5% for FHA loansTypically 3% to 5% for conventional loan; 3.5% for FHA loan; 0% for VA loan and USDA loan0% for VA; 3.5% for FHA; 3% or more for conventional; 5% for jumbo
Where does the lender operate?All 50 states and Washington, D.C.49 states and Washington, D.C.All 50 states and Washington, D.C.
Major loan typesConventional, VA, FHA, fixed-rate, adjustable-rate, refinance, cash-out refinance, streamlined refinance optionsConventional, VA, FHA, USDA, fixed-rate, adjustable-rate, refinance, cash-out refinance, several streamlined refinance optionsConventional, jumbo, VA, FHA, USDA, renovation, construction, adjustable-rate, fixed-rate, refinance, cash-out refinance, streamline refinance, home equity products 

How to Shop Around to Get the Best Mortgage Rate

Getting a low mortgage rate is important because it affects your monthly payment and interest costs over the life of the loan. To know if you’re getting a good deal, submit applications with several mortgage lenders and ask for a Loan Estimate. This document shows your interest rate, closing costs, and other details about the loan. Comparing these details can help you figure out which lender to go with, and a mortgage calculator can help you crunch the numbers. 

Home loan comparison calculator

Compare your payment options side-by-side to see which is right for you and your financial situation.

Find the mortgage that’s best for you by comparing the cost of multiple loans over time.

Editorial Independence

As with all of our mortgage lender reviews, our analysis is not influenced by any partnerships or advertising relationships. For more information about our scoring methodology, click here.