Rocket Mortgage files a $100 million lawsuit against UWM over Refi Push
A $773 million bulk sale of mortgage servicing rights is at the center of a new lawsuit pitting two of the mortgage industry’s biggest rivals against each other.
Rocket Mortgage has sued United Wholesale Mortgage in New York Supreme Court, alleging the wholesale giant used broker incentives and AI-powered tools to rip off borrowers from loans it had already sold — costing Mr. Cooper Group an estimated $100 million in damages.
The complaintfiled May 14, centers on a bulk sale of $773 million in mortgage servicing rights that Mr. Cooper purchased from UWM through three deals between January and June 2024. The deal involved about 182,000 loans with unpaid principal of about $65 billion.
Hidden within each contract was a non-solicitation covenant: UWM agreed that it would not ask these borrowers to refinance their loans for the life of their loans, and neither would its brokers, agents, or independent contractors.
Rocket claims UWM broke that promise almost immediately.
In September 2024, UWM launched Refi75, a 75 basis point rate incentive for broker partners targeting past customers. A week later came KEEP, an AI-powered system that, according to the complaint, automatically identified refinancing candidates in UWM’s existing borrower database and sent them targeted offers, including borrowers whose loans were now in Mr. Cooper’s portfolio. According to Rocket, UWM has made no effort to keep these borrowers out of either program.
Things escalated after Rocket announced its $9.4 billion deal to acquire Mr. Cooper on March 31, 2025. According to the complaint, UWM Chairman, President and CEO Mat Ishbia responded by launching a third program, Refi Shield 100, a 100 basis point interest rate incentive and alerting brokers to a “Weekly Fastbreak” video to specifically go after Mr. Cooper’s loans. The complaint quoted Ishbia as saying he would “lose money just for fun” to keep those loans out of Rocket’s hands.
Rocket said prepayment rates on the affected loans were roughly 2.5 times higher than comparable pools, a gap it attributes to UWM’s solicitation campaigns, and is seeking about $100 million in compensatory damages, plus interest and attorneys’ fees.
In one statement provided to HousingWireA UWM spokesperson called the lawsuit “baseless and opportunistic” and pointed to the timing of the filing, shortly after the Rocket acquisition was completed and after Rocket’s former head of wholesale had joined UWM as a partner, as evidence that the lawsuit was intended to make headlines.
“Rocket has long operated under the premise that it owns the consumer relationship – not the broker,” the statement said. “We will vigorously defend this issue and continue to focus specifically on independent mortgage brokers and the borrowers they serve.”
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