United Wholesale Mortgage (UWM) has agreed to acquire Two Harbors Investment Corp. (TWO), owner of RoundPoint Mortgage Servicing, in an all-stock transaction valued at $1.3 billion.

If approved by regulators and shareholders, the transaction would make UWM the eighth-largest mortgage servicer in the U.S., according to a joint press release from the companies.

“The timing of doubling our servicing book as we bring servicing in-house is the perfect alignment, allowing us to deliver meaningful upside to stockholders and leverage increased cash flow to invest deeper into the broker network,” stated Mat Ishbia, who serves as chairman, president and CEO of UWM.

UWM brought loan servicing in-house in April when it announced an agreement with ICE Mortgage Technology to implement ICE’s suite of loan servicing software tools, including the company’s homeowner portal and customer service platform.

UWM previously had subservicing relationships with Cenlar FSB and Mr. Cooper, according to regulatory filings, but UWM rival Rocket Companies acquired Mr. Cooper in a $14.2 billion deal that closed Oct. 1.

TWO operates as a real estate investment trust, with a focus on mortgage servicing rights (MSRs). RoundPoint is a wholly owned operating entity of TWO.

The companies anticipate the transaction could create up to $150 million in cost and revenue synergies on an annual basis.

“Scale has become more important than ever in the mortgage industry,” said Bill Greenberg, TWO’s president and CEO. “We are very excited to partner with the largest mortgage lender in the country, bringing our expertise in MSR investing and servicing through the RoundPoint platform.”

If the acquisition successfully closes, the combined company will have over $400 billion in MSRs, according to the press release.