The Rocket Mortgage division of Rocket Companies (NYSE: RKT) has filed a lawsuit against United Wholesale Mortgage (NYSE: UWMC) claiming it breached the non-solicitation agreements linked to the sale of mortgage-servicing rights (MSR) to Nationstar Mortgage Group, which did business under the brand Mr. Cooper Group.
According to the complaint filed in New York Supreme Court’s Commercial Division, between January to June 2024 Mr. Cooper “purchased from UWM the mortgage servicing rights for three bundles of mortgages totaling nearly 182,000 loans with a cumulative unpaid principal balance of approximately $65 billion. Mr. Cooper paid UWM $773 million for the rights to service these loans.”
However, Rocket’s lawsuit claimed “UWM intentionally solicited these very mortgage borrowers, resulting in Mr. Cooper losing its servicing rights for thousands of mortgages that it purchased from UWM. At this time, UWM is liable to Mr. Cooper for nearly $100 million in damages resulting from its wrongful conduct.”
The lawsuit accused Mat Ishbia, the chairman, president, and CEO of UWM, of directing his brokers in March 2025 to “specifically target for refinancing the loans whose servicing rights UWM sold to Mr. Cooper.” The lawsuit claimed Ishbia put a “bounty” on the loans that UWM had sold Mr. Cooper with a pair of incentive programs, Ref75and Refi Shield 100, designed to encourage refinancing interest rates to borrowers with mortgages serviced by Mr. Cooper. UWM is also accused of using in AI-powered KEEP technology to offer refinance opportunities to borrowers while making “no effort to exclude from the incentive program borrowers whose loans were being serviced by Mr. Cooper as a result of its purchases from UWM.”
The lawsuit stated Ishbia boasted he would “lose money just for fun” just to disrupt Mr. Cooper.
Rocket announced its plans to acquire Mr. Cooper in March 2025. The lawsuit accused Ishbia of using foul language to proclaim his hatred for Rocket and further push his company to intentionally solicit the mortgages it had promised Mr. Cooper that it would not solicit.
“Almost immediately after the Rocket-Mr. Cooper transaction was announced, during an April 2, 2025 sales call with UWM’s brokers, Mr. Ishbia put a ‘bounty’ on the Mortgage Loans so that they would never ‘go to Rocket.’”
Rocket is seeking compensatory damages estimated at approximately $100 million, pre- and post-judgment interest, attorneys’ fees and costs, and other relief that the court would consider to be appropriate.
Rocket did not immediately comment on the lawsuit.
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