UWM decided this year to bring servicing in-house, following the acquisition of Mr. Cooper Group by its main rival, Rocket Companies. Lenders across the industry are seeking to expand their servicing portfolios to retain borrower relationships and cross-sell additional products, either directly or through broker channels.
Under the agreement, UWM will acquire Two Harbors’ $176 billion in unpaid principal balance (UPB) mortgage servicing rights (MSRs), nearly doubling its servicing portfolio to $400 billion.
The companies expect the transaction to generate approximately $150 million in annual cost and revenue synergies, while improving earnings. Additional efficiencies are anticipated in financing, hedging and secondary-market execution, leveraging Two Harbors’ capital markets expertise alongside UWM’s scale.
“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,” Mat Ishbia, chairman, president and CEO of UWM, said in a statement.
In January 2024, Two Harbors launched a strategy to expand into mortgage origination.
“Scale has become more important than ever in the mortgage industry,” Bill Greenberg, Two’s president and CEO, said in a statement. “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.”
As part of the transaction, the combined company’s board will expand to 11 directors, with one seat designated by Two Harbors.
Two Harbors shareholders will receive 2.3328 shares of UWMC Class A common stock for each share of Two common stock, valuing at $11.94 per share — a 21% premium to the 30-day volume-weighted average price ending Dec. 16.
The transaction will increase UWM’s public float by 93% to nearly 513 million shares. On a pro forma fully diluted basis, UWM shareholders will own approximately 87% of the combined company, with Two Harbors shareholders holding the remaining 13%.
The boards of both companies have approved the deal, which is expected to close in the second quarter of 2026. The deal is pending approval of Two’s stockholders, regulatory approvals and other closing conditions.
