Consumer complaint received 2025-04-11 00:00:00
Product: Mortgage — Home equity loan or line of credit (HELOC)
Issue: Applying for a mortgage or refinancing an existing mortgage — Changes in loan terms during the application process
Company: Mr. Cooper Group Inc.
State: VA

Complaint narrative:
To Whom It May Concern, I am writing to file a formal complaint against Mr. Cooper regarding the mishandling of my recent loan application. Their website is https : //www.mrcooper.com and phone is XXXX. Below is a chronological summary of events that illustrate negligence, miscommunication, and what I believe may amount to bait-and-switch tactics during the loan process. The result has been unnecessary credit damage, wasted time, and undue stress. 

Timeline of Events : XX/XX/XXXX I spoke with a loan representative and was told I would receive an interest rate around 8.17 %. I began gathering the required documents ( 3 pay stubs, W-2s, etc. ). A credit inquiry was made that day. 
XX/XX/XXXX I was told the loan was actively processing and pending underwriting. A second credit inquiry was made. I was informed that my rate would now be 8.37 % due to their use of my " middle '' credit score. I expressed reluctance but ultimately agreed in good faith to proceed, as I needed funding for time-sensitive home improvements. I signed the paperwork digitally.

For the next 12 business days, I received no meaningful updates. Then, the underwriter contacted me and informed me that the loan was being denied due to debt-to-income ratio issues specifically, they stated that my bonus/overtime income couldnt be counted because I hadnt been with my current employer for at least 2 years ( even though I had worked for this same employer for three years several years ago ). 
I followed up and requested supervisor escalation. The loan officer admitted : I made a mistake on the calculation and thought we would be able to use more income than we can. 
I then spoke with his supervisor and raised concerns about : - The lack of proper qualifying questions at the outset, - The delay in communication leading to the last-minute rejection, - The bait-and-switch feeling of raising the rate after initial inquiry, only to later deny the loan. 
I also expressed my frustration that I currently hold my mortgage through this lender and now regret that relationship. I was told, essentially, that nothing could be done.

Why Im Filing This Complaint : The lenders lack of due diligence in reviewing qualifying income early on caused delays and false expectations.

I was subjected to a hard inquiry, which negatively affected my credit score, for a loan that should have been denied upfront had proper questions been asked.

The last-minute rejection, after paperwork was signed and the rate had already been increased, suggests carelessness at best, or predatory bait-and-switch practices at worst.

I believe I deserve some form of remediation including the removal of one or both hard inquiries, a formal apology, and corrective action within the organization to prevent this from happening to others. 

My Request : Investigate the practices of Mr. Cooper regarding this and similar loan application mishandlings. 
Facilitate removal of the hard credit inquiry that was a result of mismanagement. 
Encourage the lender to review its qualification processes and customer communication protocols. 
Provide me with documentation that supports your findings and any actions taken. 

Please let me know if additional information is required, including full names, documents, or email/text message correspondence. I am happy to provide those to support this complaint.

Company response to consumer: Closed with explanation