In recent times, you may have heard some concerning rumors about Mr. Cooper, the colossal non-bank mortgage servicing company in the United States. Questions are circulating already, with many wondering, “Is Mr. Cooper going out of business?”

The uncertainty surrounding such an influential entity in the mortgage industry is undoubtedly worrisome for homeowners and investors alike. So, what is really happening with the company? Is Mr. Cooper going out of business, really?

Just keep reading as we uncover some of the recent things happening behind the scenes of Mr. Cooper to determine the future of the company.

Is Mr. Cooper Going Out of Business?

Well, as of the time of writing this post, it doesn’t seem like Mr. Cooper is going out of business. But since this question is one of the many questions circulating in financial circles and causing concern among homeowners, we should address that too.

 While Mr. Cooper has faced its share of challenges, it’s essential to understand that the picture is more complex than a simple yes or no. The company recently faces lawsuits, regulatory investigations, and even lay off many of its employees. However, this is not something that is uncommon in the mortgage industry.

But right now, there has not been any official report stating that Mr. Cooper is going out of business. And the company has been making some unique and innovative moves to help the company weather the storm, including recently acquiring Home Point.

So, is Mr. Cooper going out of business? We don’t think so. The company might just have the resilience to navigate through these turbulent times.

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A Closer Look at the Company

Mr. Cooper, which was originally established in 1989 as Nationstar Mortgage, underwent a rebranding in 2017 to become the household name it is today. This transformation catapulted the company to the forefront of the non-bank mortgage servicing industry, where it now oversees more than 3 million home loans.

Based in the Lone Star State of Texas, Mr. Cooper offers a wide array of mortgage services, including origination, servicing, and reverse mortgage options. With a workforce of over 7,000 dedicated employees and a history of being publicly traded since 2012, the company has made its presence widely known in the market.

But what truly sets Mr. Cooper apart is its marketing approach. The company presents itself as a customer-centric and compassionate mortgage provider, and this has helped it establish good relationships with its customers. These unique selling points have earned Mr. Cooper a significant share of the mortgage industry.

Is Mr. Cooper in Trouble?

As we already mentioned, Mr. Cooper has encountered several challenges in recent years, prompting doubts about its stability.

The company has faced federal and state investigations into alleged improper mortgage practices. The company was recently sued for mishandling of its customers accounts, excessive fees, and wrongful foreclosures. 

To add to the troubles, Mr. Cooper underwent a significant restructuring phase, leading to the layoff of over 3,000 employees. Credit downgrades, missed financial targets for investors, and reputation damage among customers further signaled that all might not be well within the company’s brand image.

What Would Happen to Mr. Cooper Customers If the Company Goes Bankrupt?

The question on everyone’s mind is, what would happen to Mr. Cooper’s customers if the company were to go bankrupt?

Well, in a situation like this, you should understand that customers would not lose their homes or experience immediate, drastic changes. When a mortgage servicer faces bankruptcy, existing mortgages and their terms are typically transferred to a new servicer. This is a regular occurrence in the mortgage industry.

However, during this transition, there may be frustrations such as payment processing delays, website access issues, and customer service disruptions. But the fundamental aspect, which is your mortgage, would remain intact.

Is Mr. Cooper Laying Off Employees?

Yes, Mr. Cooper has been faced with the necessity to lay off employees. The reasons for these layoffs are rooted in the broader challenges confronting the mortgage industry.

The company confirmed that they laid off approximately 420 staff members in the second quarter and an additional 250 in the first quarter. These layoffs were predominantly in the originations department.

Is Mr. Cooper sad about these layoffs? Yes! The company expressed deep regret over the need to eliminate their employees. The management emphasized that it’s part of their efforts to manage costs and ensure the company’s long-term success.

Is Mr. Cooper Facing Financial Troubles?

The financial performance of Mr. Cooper has been notably impacted in recent quarters. In the first quarter of 2023, Mr. Cooper reported a significant drop in profits, with net earnings of $37 million compared to a substantial $658 million one year prior.

However, this dramatic decline is not particular to Mr. Cooper – it is a problem affecting many companies in the mortgage industry.

The industry as a whole has been wrestling with high-interest rates, banking disruptions, and concerns of a potential recession, which have collectively taken a toll on financial performance. These challenges have inevitably trickled down to affect Mr. Cooper and its financial standing.

How Old Is Mr. Cooper?

Mr. Cooper, in its current iteration, was established in 1989 as Nationstar Mortgage Holdings Inc., making it 34 years old as of this year. The company is headquartered in the Dallas, Texas area. Initially known as Nationstar Mortgage Holdings Inc., it provided servicing and originations for homeowners across the United States.

By June 30, 2017, Mr. Cooper had hired nearly 7,000 employees, making it one of the largest mortgage servicers in the United States. It had provided around 500 billion U.S. dollars to more than 3 million customers nationwide.

Later, it managed over 36 billion U.S. dollars of the total value in the origination of over 146,000 mortgages. In August 2017, the company rebranded itself as Mr. Cooper, a move aimed at personalizing the mortgage experience for its customers.

Did Mr. Cooper Acquire Home Point?

Yes, Mr. Cooper indeed made headlines with its acquisition of Home Point Capital for $324 million. This marked the second significant acquisition for Mr. Cooper in a single month, demonstrating the company’s commitment to expanding its capital.

As part of this acquisition, Mr. Cooper assumed $500 million of Home Point Capital’s outstanding debt, due in February 2026. This strategic move aligns with Mr. Cooper’s goal of growing its customer base. It simply deploys capital with a focus on getting good returns with fewer risks and maintaining a strong balance financial status.

Home Point Capital held an impressive servicing portfolio, primarily consisting of conventional loans to borrowers with high FICO scores, low coupons, and strong equity cushions. With this acquisition, Mr. Cooper aims to further strengthen its position in the mortgage industry.

Is Mr. Cooper Going Out of Business – Conclusion

The question of whether Mr. Cooper is going out of business is not a straightforward one. The company has indeed faced its share of challenges in the mortgage industry.

However, there is no indication right now showing that Mr. Cooper is going out of business. There has not been any official statement to this effect, and the recent moves made by the company are indicative of a brand that is taking steps to further establish its presence in the industry.

With that, it doesn’t look like the company will be waving the white flag soon, and bowing out of the market.