CrossCountry Mortgage has entered into a definitive agreement to acquire Two Harbors Investment Corp. in an all-cash transaction valued at $10.80 per share, marking a significant consolidation move in the U.S. mortgage market.
The deal comes after Two Harbors terminated its prior merger agreement with UWM Holdings Corporation. As part of that termination, CrossCountry agreed to cover a $25.4 million breakup fee owed to UWM, clearing the way for the new transaction. A previously scheduled shareholder vote tied to the UWM deal has been canceled.
Two Harbors, a real estate investment trust focused on mortgage servicing rights and residential mortgage-backed securities, will be combined with CrossCountry’s large-scale retail mortgage origination platform. The transaction is designed to create a fully integrated mortgage company spanning origination through servicing, with the goal of improving customer retention, increasing recurring revenue, and lowering acquisition costs.
Under the terms of the agreement, common shareholders of Two Harbors will receive $10.80 in cash per share. Preferred shareholders will have their shares redeemed at $25.00 per share plus any accrued and unpaid dividends following closing.
The board of directors of Two Harbors has unanimously approved the transaction and is recommending that shareholders vote in favor. The deal is expected to close in the second half of 2026, subject to shareholder approval and customary regulatory clearances. No financing condition is attached.
Following completion, Two Harbors will be delisted from the New York Stock Exchange and will operate as a wholly owned subsidiary of CrossCountry Mortgage.
Strategically, the combination brings together CrossCountry’s nationwide retail lending network with Two Harbors’ mortgage servicing rights portfolio and its RoundPoint servicing platform. The combined entity is expected to operate across the full mortgage lifecycle, from loan origination to long-term servicing.
Prior to closing, Two Harbors plans to continue paying regular quarterly dividends consistent with past practice, though it does not intend to issue a partial dividend for the quarter in which the transaction closes if it occurs mid-quarter.
KEY QUOTE:
“We are extremely excited to partner with the entire TWO team on this strategic transaction, combining TWO’s best-in-class capital markets team and RoundPoint’s established servicing infrastructure and operational expertise with CCM’s #1 retail origination and servicing platform. This transaction further solidifies CCM’s position as a one-of-one player in the mortgage market, with the #1 retail origination platform for the third year in a row and the #6 non-bank servicing platform with over $370 billion in unpaid principal balance.”
Ron Leonhardt, Founder and CEO, CrossCountry Mortgage
