Rocket sues UWM for $100M, claiming contractual breaches across Mr. Cooper book

Rocket Mortgage has filed a lawsuit against United Wholesale Mortgage (UWM), claiming the rival intentionally breached contractual nonsolicitation obligations it owes to servicer Mr. Cooper Group. 

Rocket alleges that UWM is liable for nearly $100 million in damages for soliciting borrowers across 182,000 loans over the past 18 months, according to the lawsuit filed on Thursday in the Supreme Court of the State of New York.

The lawsuit states that Mr. Cooper bought these loans from UWM between January and June 2024 for an aggregate amount of $773 million. They were part of three bundles of mortgages with $65 billion in unpaid principal balance.

Companies usually pay a higher price for servicing rights with nonsolicitation agreements. If the seller solicits the borrowers to refinance their loans, the value of the servicing rights is reduced. But in the case of these bundles, Rocket claims that UWM’s actions resulted in prepayment rates 2.5 times higher than prepayment rates for comparable loan pools, equating to nearly $100 million in lost revenue that it seeks to recover through damages.

“Importantly, in the purchase agreements for those rights, UWM agreed to a broad non-solicitation covenant under which UWM was prohibited from soliciting, directly or indirectly, the refinancing of any mortgages within the loan pools that Mr. Cooper purchased,” the lawsuit states.

The prohibition against solicitation includes brokers, agents and independent contractors working on UWM’s behalf. The lender, however, is permitted to engage in nontargeted mass advertising programs to the general public and accept applications from borrowers who initiate a refinance action on their own.

After the lawsuit was filed Thursday, a UWM spokesperson issued a statement to HousingWire.

“Within months of Rocket’s acquisition of Mr. Cooper, and shortly after Rocket’s former head of wholesale joined the broker community as a UWM partner, this lawsuit appears,” the statement read. “The timing speaks for itself. Rocket has long operated on the premise that it owns the consumer relationship — not the broker.

“The claims in this complaint are baseless and opportunistic, and appear engineered for headlines. This is precisely the conduct we have consistently cautioned the broker community about. We will defend this matter vigorously and remain singularly focused on the independent mortgage brokers and the borrowers they serve.”

The lawsuit also states that in March 2025, Mat Ishbia, chairman and CEO of UWM, directed brokers in a weekly video segment to target refinances on loans whose servicing rights were sold to Mr. Cooper. While putting a “bounty” on the loans, Rocket claims, he launched “Refi Shield 100” to offer a 100 basis-point rate reduction for these borrowers.

“Mr. Ishbia emphasized that he would ‘lose money just for fun’ to harm Mr. Cooper by effectively stealing loans from Mr. Cooper’s servicing portfolio through its wrongful solicitations of these loans in blatant breach of UWM’s contractual obligations,” according to the court filing.

Rocket also mentioned the “Refi75” program, launched in September 2024, as an initiative that breaches the nonsolicitation agreement. The program cuts refi rates by 75 bps for all borrowers, without excluding those in the portfolios sold to Mr. Cooper. 

It also claims the KEEP system — a proprietary refinance-generation technology powered by artificial intelligence that targets current and former UWM customers — did not mass market to the general public but targeted loans held by UWM borrowers, including the ones sold to Mr. Cooper.

The lawsuit also questions UWM’s business model by saying that the company was “under growing financial and operational pressure stemming from margin compression, substantial technology and servicing expenditures, and the fragility of a business model heavily dependent on continuously generating origination and refinance volume.”

Rocket Companies, parent of Rocket Mortgage, officially closed its acquisition of Mr. Cooper Group on Oct. 1, 2025, for $14.2 billion. UWM is currently engaged in a battle with CrossCountry Mortgage to acquire Two Harbors Investment Corp. while it moves to bring its servicing book in-house. 

Editor’s note: This story was updated with comments from UWM.