Rocket Mortgage is suing United Wholesale Mortgage for $100 million in damages, over the rival's alleged refinancing of loans it sold to Mr. Cooper.
The breach of contract complaint filed Thursday in a New York state court is the
In early 2024, Mr. Cooper paid $773 million for bundles of mortgages encompassing around 182,000 loans, with an unpaid principal balance of $65 billion, according to the suit. In determining damages, the lawsuit said prepayment rates for the loans at issue are roughly 2.5 times greater than the prepayment rates for comparable loan pools.
Rocket said the illicit poaching occurred before and after its announced
The complaint also accuses UWM of hypocrisy, in routinely selling its MSRs tied to broker-originated loans to large retail lenders and agreeing to
"UWM significantly profited from those arrangements while simultaneously portraying itself as the defender of the broker community," the suit read. "The irony is impossible to ignore: UWM publicly condemned the very behavior it routinely enabled and profited from behind the scenes."
In a lengthy statement Thursday afternoon, UWM called the complaint "baseless and opportunistic," and suggested they "appear engineered for headlines." The company also noted the lawsuit's timing following
"Rocket has long operated on the premise that it owns the consumer relationship — not the broker," a company spokesperson said. "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."
Rocket declined to comment beyond the filing.
The breach of contract
While UWM is allowed to engage in non-targeted mass advertising to prospective borrowers, the MSR agreements prohibited it and its affiliates from specifically targeting the loans sold to Mr. Cooper.
The lawsuit describes UWM's breach of contract beginning in September 2024, when the company was "under growing financial and operational pressure" during a lull in the market.
"Those pressures were intensified by declining refinancing demand and the need to keep its broker network engaged in the face of aggressive competition," the complaint read.
UWM that month
"Together with the Refi75 program, KEEP helped sustain an unusually high prepayment rate for the mortgage loans as compared to similar pools of loans serviced by Mr. Cooper," Rocket said.
Incensed by Rocket's purchase of Mr. Cooper last year, Ishbia put a "bounty" on the loans it sold to the servicer, rolling out another 100-basis-point discount to reclaim those mortgages, the suit explains. Rocket included a screenshot and excerpts from one of Ishbia's weekly video segments to brokers last April, in which he tells viewers UWM doesn't want "these loans to go to Rocket or anyone else outside the wholesale channel."
"Any loan that we've ever done with Mr. Cooper where we've sold the servicing, you can go and take advantage of it and go refinance these clients," Ishbia is quoted as saying.
The UWM boss allegedly said he would "lose money just for fun" to harm Mr. Cooper.
Rocket says Mr. Cooper approached UWM in February 2025 regarding the prepayment numbers, and UWM did not respond.
The company is seeking at minimum, the damages in amounts equal to the servicing rights repurchase price for any impacted loans.
