Two Harbors Investment Corp. (TWO) took its legal fight against the parent company of United Wholesale Mortgage (UWM) public Tuesday evening, calling the lender’s claims “baseless,” “frivolous” and “illogical.”

It represents the first public comments by TWO since being sued by UWM Holdings Corp. (UWMC) on Monday, marking a new chapter in an ongoing corporate feud. The two companies have been at odds since March, when Two Harbors terminated a prior merger agreement with the Michigan-based wholesale lender in favor of a rival bid from CrossCountry Mortgage (CCM).

In its complaint, which seeks more than $500 million in damages, UWM questioned the timing of CCM’s offer, alleging that TWO breached its contract by negotiating with CrossCountry after a prior all-stock deal with UWM had been inked in December 2025.

“Driven by pride, greed, and self-interest, TWO sabotaged the process, causing UWM to lose the lucrative business opportunity it had identified, pursued, and contracted to receive,” the complaint alleges.

TWO shareholders approved the CCM package on July 2, which will pay them $12 per share of common stock and a prorated stub dividend if the deal closes. The transaction is still awaiting regulatory approval from one state, according to an Aug. 3 filing with the Securities and Exchange Commission.

UWM’s final bid would have provided stockholders with either $12.50 a share or a default consideration of 2.3328 shares of UWMC common stock.

TWO had cited “financing, closing, business and credibility risks” in rejecting the UWM offer. In Tuesday’s press release, the company said the lawsuit “raises serious questions about UWMC’s public disclosures,” claiming its concern about United Wholesale’s ability to close any transaction “has now been thoroughly vindicated.”

Two Harbors specifically called out a $603 million derivatives loss disclosed during UWM’s second-quarter earnings call last week. That failed hedging strategy, which was based on the anticipated acquisition of TWO’s book of mortgage servicing rights, contributed to UWM posting a $452 billion net loss for the quarter.

“UWMC’s stock price has collapsed — it is down almost 70% year-to-date, after UWMC finally disclosed its $600 million derivatives loss, which had been rumored to have occurred since May 19, 2026,” the Two Harbors press release stated. “The loss highlights the dire condition of UWMC’s balance sheet, liquidity and also casts doubt on its risk management and other governance practices.”

In an emailed response to Scotsman Guide on Wednesday, a UWM spokesperson said the lawsuit is concerned with Two Harbors’ alleged breach of a binding merger agreement.

“Two Harbors’ statement does not deny the facts set forth in the complaint and instead resorts to finger pointing about later events that have nothing to do with Two Harbors’ willful breaches and fraud,” the spokesperson stated. “UWM is confident in its case. Ultimately, this will be decided in a court of law.”