A $773 million package sale of mortgage servicing rights is at the center of a new lawsuit pitting two of the mortgage industry’s biggest rivals.
Rocket Mortgage has sued United Wholesale Mortgage in New York Supreme Court, seeking an estimated $100 million in damages from The Cooper Group, alleging that the wholesaler used broker incentives and AI-powered tools to lure borrowers out of loans it had already sold.
The complaint, filed May 14, focuses on a $773 million block sale of mortgage servicing rights that Cooper purchased from UWM over three contracts from January to June 2024. The agreement covered approximately 182,000 loans with unpaid principal balances of approximately $65 billion.
Embedded in each contract was a non-solicitation clause. UWM agreed not to solicit borrowers to refinance during the life of the loan, and neither did its brokers, agents and independent contractors.
Lockett claims UWM quickly broke that promise.
In September 2024, UWM launched Refi75, a 75 basis point interest rate incentive for broker partners targeting past customers. A week later, an AI-powered system called KEEP appeared that automatically identified refinance candidates from UWM’s existing database of borrowers and sent targeted offers, including those with loans currently in Cooper’s portfolio, according to the complaint. Rocket said UWM made no effort to separate these borrowers from either program.
Things escalated further after Rocket announced a $9.4 billion deal to acquire Cooper on March 31, 2025. UWM Chairman, President and CEO Matt Ishbia responded by launching a third program, “Refi Shield 100,” a 100 basis point interest rate incentive, and directing brokers to specifically pursue Mr. Cooper’s loans in a “Weekly Fast Break” video, according to the complaint. The complaint quotes Ishbia as saying that he would “lose money just for fun” by keeping these loans out of Rocket’s hands.
Lockett said prepayment interest rates on the affected loans were approximately 2.5 times higher than comparable pools, the difference was due to UWM’s solicitation campaign, and he is seeking approximately $100 million in damages, plus interest and attorney’s fees.
In a statement provided to Housing Wire, a UWM spokesperson called the lawsuit “baseless and opportunistic,” and cited the timing of the lawsuit, shortly after the Rocket acquisition was completed and Rocket’s former wholesale director joined UWM as a partner, as evidence the lawsuit was designed to make headlines.
“For many years, Rocket has operated on the premise that we own our relationships with consumers, not brokers,” the statement said. “We will vigorously defend this matter and remain focused on independent mortgage brokers and the borrowers they serve.”
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