Mr. Cooper, the Dallas-based nonbank lender, has steadily grown its presence in the mortgage industry over the last few years and is slated to become one of the largest servicers by the end of 2024. But it's not without its legal squabbles. 

As one of the most high-profile lender-servicers in the business, Mr. Cooper is well positioned in the market, but faces lawsuits over alleged fee violations, mortgage-servicing errors and a wide-spread data breach.

In July, the beleaguered Flagstar Bank in New York announced that it had agreed to sell more than $1.4 billion of mortgage-related assets to Mr. Cooper in an all-cash deal. With the added purchase of $200 million of mortgage warehouse loans from Flagstar, the firm is positioned to become a dominating force in the market, pending approval of the agreement.

During Mr. Cooper's second-quarter earnings call, Group President Michael Weinbach stated that future acquisitions aren't off the table, but the company is in a gestation period as it prepares to finalize the deal with Flagstar sometime in early 2025.

Jay Bray, chairman and chief executive of Mr. Cooper, echoed the sentiment at a Barclays investor conference earlier this month, but highlighted "aggressive buyers" as a driving factor behind the decision to step out of the spotlight for the time being.

"The first part of the year was, well, we looked at a lot of deals. It was very active. There was a lot of supply. I'd say the summer was even pretty active, but there were a couple of aggressive buyers out there. So we kind of sat on the sidelines and let them bid aggressively," Bray said.

Read more: Why Mr. Cooper 'sidelined' its MSR activity

With the arrival of the Federal Reserve's long-awaited 50 basis point cut to its federal funds rate on Wednesday, the latest fluctuation in the financial services landscape could play out in Mr. Cooper's favor.

Experts at National Mortgage News' annual Digital Mortgage conference held in San Diego last week remarked that mortgage servicing rights holders or Wall Street firms were by and large unable to also handle originations in the past. But that has since changed.

"I don't think people expected the [Mr.] Coopers and Pennymacs of the world that have origination arms to own all the servicing," Chad Smith, president and chief operating officer at Better Home and Finance, said during the conference. "So that's what I focus on every day, how am I going to compete with that."

Mr. Cooper's tech plays have furthered that presence, specifically in its call center, which according to data from ICE Mortgage Technology yielded the company a 73% refinance recapture rate in the second quarter of this year.

Read more: Mr. Cooper buy of Flagstar servicing tilts the scales toward nonbanks

It hasn't been consistently upbeat for the firm, however.

Last month, the Consumer Financial Protection Bureau sided with plaintiffs in a lawsuit against Mr. Cooper alleging that through its subsidiary Nationstar, it violated the Fair Debt Collection Practices Act by charging customers a $25 fee to obtain payoff quote statements.

Read on to learn more about the ongoing legal battles involving Mr. Cooper and the impending impact on earnings.