In a plot twist, Two Harbors Investment Corp. (TWO) has terminated its prior merger agreement with the parent company of United Wholesale Mortgage (UWM) and has agreed to be acquired by CrossCountry Mortgage (CCM) for $10.80 per outstanding share of common stock.
CCM has also agreed to cover a $25.4 million termination fee due to UWM.
Two Harbors, which operates as a real estate investment trust with a focus on mortgage servicing rights (MSRs), is the owner of RoundPoint Mortgage Servicing.
“We are extremely excited to partner with the entire TWO team on this strategic transaction,” stated CrossCountry Mortgage CEO Ron Leonhardt in a press release Friday, adding that the transaction combines “TWO’s best-in-class capital markets team and RoundPoint’s established servicing infrastructure and operational expertise with CCM’s No. 1 retail origination and servicing platform.”
Two Harbors had previously agreed to a deal with UWM in December in an all-stock transaction valued at $1.3 billion. CCM stepped in earlier this month with an offer of $10.70 per share, then an unidentified third bidder offered $10.75 per share, leading Two Harbors to postpone a special shareholder meeting as it weighed its options.
UWM subsequently proposed unspecified revised terms, with a spokesperson telling Scotsman Guide on Monday they were in continued discussions with TWO, noting “we will stay disciplined in our approach.”
CCM’s winning bid of $10.80 per share works out to approximately $1.13 billion, based on the 105.04 million shares outstanding reported on TWO’s investor relations page. Additionally, holders of TWO preferred stock will have their shares redeemed following the closing of the transaction at $25 per share. They will also receive any accumulated and unpaid dividends.
“The TWO Board of Directors has unanimously approved the merger agreement and recommends that TWO stockholders vote to approve the transaction,” the joint press release from Two Harbors and CCM noted.
In a statement provided to Scotsman Guide, a UWM spokesperson criticized the Two Harbors decision.
“The actions taken by TWO’s management team and board do not reflect the best interests of their shareholders,” the UWM representative stated. “What appears to be seller’s remorse — driven by loss of control — does not justify accepting an inferior transaction, disregarding binding contractual obligations or failing to negotiate with us in good faith.”
They continued: “We presented an offer that is higher in value in every respect including a materially accelerated timing relative to the offer they want to accept. The full context will be made public in due course, allowing both shareholders and the courts to evaluate the facts accordingly.”
The heated battle over Two Harbors underscores the increased industry focus on MSRs over the past year.
UWM brought loan servicing in-house in April 2025 when it announced an agreement with ICE Mortgage Technology to implement ICE’s suite of loan servicing software tools. The wholesale lender previously had subservicing relationships with Cenlar FSB and Mr. Cooper, according to regulatory filings, but rival Rocket Companies acquired Mr. Cooper in a $14.2 billion deal that closed Oct. 1, 2025.
In another recent MSR move, the indirect parent company of Freedom Mortgage Corp. announced on March 16 that it had agreed to acquire Seneca Mortgage Servicing for an undisclosed sum.
And in February, Pennymac agreed to acquire the subservicing business of Cenlar Capital Corp. for an upfront purchase price of $172.5 million and up to $85 million of contingent consideration.
The TWO-CCM tie-up is expected to close in the second half of 2026, subject to shareholder and regulatory approvals, according to the press release.
