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Mr. Cooper Mortgage Review [2021]: The Biggest Home Lender You’ve Never Heard of

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If you’re like most consumers, a home is the largest purchase you’ll ever make. Whether you’re looking to refinance your home or get a mortgage to buy one, you want a lender that you can count on.

In your research, you might’ve come across Mr. Cooper mortgages. Mr. Cooper is the new name for established lender Nationstar Mortgage, LLC., the largest non-bank servicer of mortgages in the United States.

In this article, we’ll share some of the lender’s history and detail the products it offers to help you understand if it’s the right lending partner for you.

In this Mr. Cooper review

  • An overview of Mr. Cooper
  • Which loan products does Mr. Cooper offer?
  • Refinancing a home loan with a Mr. Cooper mortgage
  • What makes a Mr. Cooper mortgage different
  • What Mr. Cooper mortgage customers are saying
  • Mr. Cooper mortgage FAQs
  • Bottom line on Mr. Cooper

An overview of Mr. Cooper

Mr. Cooper was founded in February 2001 as Nationstar Mortgage, LLC. It is headquartered in Dallas, Texas, and has almost 10,000 full-time employees.

Nationstar announced its transition to Mr. Cooper in the first half of 2016. It intended to do more than just rebrand its name. Instead, it wanted to transform the entire customer experience and the way that it does business. In August 2017, the company formally changed its name from Nationstar to Mr. Cooper.

Over the last 20 years, Mr. Cooper has grown to 3.5 million customers nationwide. It is now one of the top 15 mortgage originators in the U.S., the 4th largest loan servicer, and the largest non-bank mortgage servicer. Mr. Cooper is publicly traded on NASDAQ as Mr. Cooper Group, Inc. under the ticker symbol “COOP.”

Which loan products does Mr. Cooper offer?

If you’re looking to buy a home or refinance an existing mortgage, you have various mortgage products to choose from at Mr. Cooper home loans.

Mr. Cooper mortgage offerings include conventional loans, jumbo loans, and loans backed by the U.S. Federal Housing Administration (FHA) and the U.S. Department of Veterans Affairs (VA). Plus, you can choose between a fixed-rate or adjustable-rate mortgage, depending on your goals.

Conventional loans at Mr. Cooper

Conventional loans are popular among homebuyers. Generally, these loans have 15- or 30-year terms, and a borrower may be required to make a down payment of 5% to 20% or more. Interest rates on conventional loans can be either fixed or adjustable.

Conventional loans can also be either conforming or non-conforming:

  • Conforming loans fall under certain limits set by the Federal Housing Finance Agency (FHFA) and can be sold to Fannie Mae or Freddie Mac. For 2021, limits are set at $548,250 for most areas and $822,375 for high-cost areas.
  • Non-conforming loans exceed conventional loan limits and can’t be sold to Fannie Mae or Freddie Mac. For example, a jumbo loan from Mr. Cooper would be considered a non-conforming conventional loan.

Conventional loans generally require less paperwork than government-backed loans, but also have stricter underwriting requirements. Typically, you’ll need a credit score of at least 620 to qualify for a conventional loan.

They’re also better for borrowers with at least a 5% to 20% down payment. Borrowers with less than a 20% down payment are often required to pay private mortgage insurance (PMI) to protect the lender. Generally, borrowers can get PMI removed once they have 20% equity in their home.

Loan amount Varies based on creditworthiness and other factors
Loan term Up to 30 years
APR Varies
Credit needed 620

FHA loans at Mr. Cooper

Borrowers who need more flexible loan terms might turn to FHA loans. These loans provide competitive interest rates and are backed by the federal government. This backing encourages a lender to approve a borrower with a lower credit score and a down payment as low as 3.5%.

In exchange for less stringent underwriting guidelines, borrowers have to pay an upfront mortgage insurance premium (MIP) of 1.75% of the loan amount to the FHA. Additionally, the FHA charges an annual MIP of 0.45% to 1.05% of the total loan balance. This amount is broken down into monthly payments and remains throughout the duration of the loan. To get rid of it, the borrower must refinance into a non-FHA loan.

FHA loans are best suited for borrowers with lower credit scores or smaller down payments. If you have been saving for a down payment, but home prices are rising faster than you can save, then an FHA loan might be a good option for you.

Loan amount Varies based on where you live
Loan term Up to 30 years
APR Varies
Credit needed
  • 580 or higher with 3.5% down payment
  • 500-579 with 10% down payment

VA loans at Mr. Cooper

Active-duty servicemembers, military veterans, and their surviving spouses who are looking for a Mr. Cooper mortgage can take advantage of exclusive loan programs through the VA. Veteran home loans offer competitive rates and down payments as low as 0%.

Unlike conventional or FHA loans, VA loans do not require mortgage insurance premiums for borrowers with less than a 20% down payment. However, there may be an upfront funding fee required. This fee ranges from 1.4% to 3.6%, depending on your down payment and how many times you’ve used a VA loan. Fees can be paid at loan closing or included in your loan amount.

A VA loan is best suited for eligible active duty, veterans, and spouses who do not have a down payment.

Loan amount Varies based on creditworthiness and other factors
Loan term Up to 30 years
APR Varies
Credit needed No minimum score required by the VA, but requirements vary based on lender

Refinancing a home loan with a Mr. Cooper mortgage

If you’re wondering how to get a loan to refinance your existing mortgage, Mr. Cooper can help with that, too. Your existing loan does not need to be originated or serviced by Mr. Cooper to be eligible for refinancing.

Some of the many reasons homeowners refinance their home include:

FHA Loan Down Payment Guide: 2021 Requirements and Assistance

  • Reduction of interest rate
  • Shorten the term of the loan
  • Lower the monthly payment
  • Pull cash out from their equity
  • Remove a co-borrower

Mr. Cooper offers refinancing options for conventional, FHA, and VA loans. FHA loans and VA loans have streamlined programs that can make it quicker and simpler to refinance if your loan qualifies.

Just remember that a mortgage refinance loan usually carries all of the same fees as a home purchase mortgage of the same type. You’ll likely also need to pay closing costs.

What makes a Mr. Cooper mortgage different

Mr. Cooper transformed its customer experience and business process when it changed its name from Nationstar. It provides full digital access to your mortgage through its online platform and mobile apps for iOS and Android. Mr. Cooper also provides detailed data on your home’s value and equity, which can be useful if you’re looking to tap into your home equity or sell when the housing market is high.

Other features that set Mr. Cooper apart are its 100% U.S.-based home advisor team and its digital loan tracker, which lets you easily see the status of your loan application. Mr. Cooper also offers their Close On Time Guarantee. If your loan doesn’t close on time, they’ll cover the principal and interest on your first mortgage payment.

What Mr. Cooper mortgage customers are saying

Ratings from Mr. Cooper customers vary from site to site, and the mortgage company has a B- rating with the Better Business Bureau (BBB). Many borrowers like digital access to their accounts, but others have problems with the servicing of their loans. In some cases, customers are upset with being double-billed or having a late payment reported to their credit report.

It’s important to note that actions by Mr. Cooper (then Nationstar) from January 1, 2012, to January 1, 2016, led Consumer Financial Protection Bureau (CFPB) regulators to penalize the company. Mr. Cooper refunded customers nearly $90 million and paid more than $6.5 million in civil penalties.

The CFPB lawsuit alleged that Nationstar violated the rights of more than 115,000 customers. Allegations include illegal foreclosure and failure to modify loans, remove PMI, and disburse property tax payments from escrow accounts.

These actions happened more than five years ago before Nationstar became Mr. Cooper. The company says that it revamped its customer experience and internal processes to address these concerns.

Mr. Cooper mortgage FAQs

Is Mr. Cooper a good company?

As one of the country’s largest mortgage loan originators and servicers, Mr. Cooper provides a valuable service to many borrowers and the community.

However, the Consumer Financial Protection Bureau (CFPB) filed a complaint against them in December 2020, alleging that the company violated multiple Federal consumer financial laws. Mr. Cooper refunded customers nearly $90 million and paid a civil penalty of more than $6.5 million.

What do I need to apply for a loan with Mr. Cooper?

If you’re ready to apply for a mortgage with Mr. Cooper, you’ll need to provide your name, contact information, and the property’s address, value, and proposed loan amount. You’ll also need to provide supporting documents, such as W2s, pay stubs, bank statements, tax returns, and others.

Is Mr. Cooper the same as Nationstar?

Yes, Nationstar officially changed its name to Mr. Cooper in August 2017. The company is publicly traded, and its ticker symbol is now “COOP” to reflect its new name.

What is the minimum credit score for a Mr. Cooper loan?

The minimum credit score required to get a Mr. Cooper mortgage depends on which loan product you are applying for.

Conventional and jumbo mortgages tend to have higher credit requirements than government-backed loans. Although Mr. Cooper doesn’t disclose minimum credit scores on its website, the FHA minimum credit score is 500 if you put 10% down, and the VA minimum varies by lender.

How do you contact Mr. Cooper?

Mr. Cooper homes loans are handled by a 100% U.S.-based home advisor team. You can contact customer service Monday through Saturday at 833-685-2565.

Customer service is available Monday to Thursday from 7 a.m. to 8 p.m. Central (until 7 p.m. on Fridays) and from 8 a.m. to 12 p.m. Central on Saturdays. To speak with a loan officer, call 833-587-0087 to explore loan options and get answers to your mortgage questions.

Bottom line on Mr. Cooper

Mr. Cooper is one of the largest originators and servicers of mortgages in the U.S. It offers a digital experience to streamline the mortgage process. However, it does not provide interest rates on its website. Potential customers must submit their contact information and speak with a loan agent before finding out what rates are available.

With many competing banks and lenders offering this basic information without needing to submit your information or speak to a salesperson, you may want to compare options before you apply. Our list of the best mortgage lenders is a good place to start.

Disclaimer: All rates and fees are accurate as of September 3, 2021.

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