Rocket Mortgage filed a complaint in the New York Supreme Court’s Commercial Division on May 14, alleging that United Wholesale Mortgage (UWM) violated contractual terms and caused at least $100 million in damages. The dispute between the nation’s two largest mortgage lenders stems from a servicing-rights deal between UWM and Mr. Cooper, which was acquired by Rocket in 2025.

The breach of contract claim arises from UWM’s three bulk sales of servicing rights to Mr. Cooper, totaling 182,000 loans. The sales took place between January and June of 2024, and each purchase agreement included a non-solicitation covenant. The complaint explains the necessity for the covenant: “non-solicitation provisions prevent sellers from conveying mortgage servicing rights and then acting to undermine the value of the rights they just sold.”

The purchase agreement outlined that UWM could not directly or indirectly take action to solicit the mortgagors—the individual with the home loan—whose servicing rights were sold. The agreement clarifies that UWM was free to advertise to the general public, but that it was not allowed to target the borrowers whose servicing rights were sold.

Mr. Cooper’s purchase of the servicing rights also included “all rights and benefits relating to the direct solicitation” of the borrowers. The complaint outlines how, just weeks after the final sale, UWM began to infringe upon “the solicitation rights it conveyed to Mr. Cooper.”

On September 4, 2024, UWM launched Refi75 to help partner brokers target past clients with refinancing rates 0.75% off the applicable interest rate. Rocket notes that UWM made no effort to exclude Mr. Cooper’s mortgagors from the promotion, resulting in a prepayment rate for the purchased loans that was 2.5 times greater than that of comparable loan pools.

A week after Refi75 was initiated, UWM launched KEEP, an AI-powered tool that contacts borrowers directly when it determines that the company’s offerings could incentivize a borrower to refinance. Rocket points out that no attempt was made to exclude the loans and mortgagors that were meant to be protected by the non-solicitation covenant from the KEEP system.

Immediately after Rocket announced plans for a $9.4 billion acquisition of Mr. Cooper, UWM escalated its targeting of the servicing rights with an even more aggressive initiative—Refi Shield 100, which gave brokers a 100-basis-point incentive to reclaim UWM loans. The National Mortgage Professional reported at the time that brokers understood the offer extended only to UWM loans that had been sold to Mr. Cooper, which was soon to become part of Rocket Companies.

UWM CEO Matt Ishbia, in a weekly sales video for broker partners, was clear that Refi Shield 100 was to target Mr. Cooper loans, which Rocket contends breached the purchase agreement. Ishbia framed the targeting of Mr. Cooper loans as a defense of the wholesale market and independent brokers, stating: “We don’t want these loans to go to Rocket or anyone else outside of the wholesale channel.”

In a statement responding to the complaint, a UWM spokesperson dismisses Rocket’s claims as baseless, adding: “Rocket has long operated on the premise that it owns the consumer relationship — not the broker. … This [lawsuit] 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.”

Ishbia’s widely reported declaration that he was willing “to lose money just for fun” with the Refi Shield 100 incentives can be read as a part of UWM’s defense of independent mortgage brokers. It was one of several statements cataloged in the breach-of-contract complaint alleging that the company and Ishbia’s “unrelenting animosity towards Rocket” spurred the malicious and retaliatory conduct that devalued Mr. Cooper’s purchase of servicing rights.

Although some have called it a one-sided rivalry, the competition between Rocket and UWM has become more visible over the last five years, as one might expect from business competitors.

It’s worth noting the history of UWM targeting its main competitor with retaliatory policies. In 2021, as Rocket narrowed UWM’s dominance in the wholesale mortgage market, UWM initiated its “All In” ultimatum, which stipulated that its partner brokers were forbidden from working with Rocket or Fairway Independent Mortgage. Brokers were given days to agree to the new terms and fined up to $5,000 for each loan closed with the targeted competitors.

UWM has insisted that its All In policy protects independent brokers and their clients from the predatory designs of Rocket, in particular. However, several independent brokers have sued, alleging that the All In directive is anti-competitive and unfairly limits the independence of brokers. The courts have upheld the enforceability of the contracts, and UWM has had success enforcing its directive through litigation.

On the surface, the complaint filed in New York is a simple case of breach of contract. Rocket has not provided any public comments on the filing, and UWM has offered a very limited response to date. The complaint, however, offers some insights into how the two largest mortgage providers have weathered the challenging housing market in recent years.