Open letter to investors sharpened a high‑profile battle over MSR scale
United Wholesale Mortgage’s parent company pushed its showdown with Two Harbors Investment Corp. into a new phase this week, taking its case directly to stockholders.
In an open letter, the company laid out a sweetened $12‑per‑share offer it argued was “clearly superior” to the pending sale to CrossCountry Mortgage.
UWM Holdings Corporation (UWMC) said it delivered a revised proposal that allowed Two Harbors investors to elect either $12 in cash per share or 2.3328 shares of UWMC Class A common stock, with no cap, proration, or forced allocation on the cash component.
The move arrived less than three weeks before Two Harbors’ May 19 special meeting to vote on an amended all‑cash merger agreement with CrossCountry.
“We are writing directly to you because we believe that you deserve to receive unfiltered information about our current and prior offers and we do not believe that the Board of Directors of Two Harbors Investment Corp. is telling you the full story,” UWM said in the letter.
The company said its new proposal increased the cash option “from $11.30 to $12.00 per share,” describing it as “a $0.70 per share premium over the $11.30 figure announced by the Board on April 28 – while preserving the same 2.3328 stock exchange ratio for those Two Harbors stockholders who wish to elect stock consideration.”
UWM characterized that structure as offering “value certain at $12.00 per share” for investors who preferred cash, while preserving potential upside for those who chose stock.
UWM also highlighted a larger funding backstop. “Mizuho has agreed to increase its committed unsecured bridge facility from $1.2 billion to $1.3 billion, sufficient to fund 100% of the cash election at the revised price,” the letter said, stressing that the bridge financing have “no ratings trigger, no borrowing-base test, and no market contingency.”
By contrast, UWM claimed, based on “scant public information,” that CrossCountry appeared to be relying on an MSR‑backed borrowing‑base facility whose availability at closing would be subject to collateral tests and advance‑rate volatility.
UWM versus the Two Harbors board
The letter sharpens UWM’s criticism of Two Harbors’ leadership.
UWM said that rather than negotiating over its April 20 proposal, the board “significantly increased deal protections while only requiring CrossCountry Mortgage to match the cash election component of our offer,” calling the response “the definition of entrenchment.”
“They did not negotiate on your behalf with us,” the company said. “Instead, they just had CrossCountry raise the bare minimum to match what is essentially the floor value of our prior offer and then made it harder for UWMC to offer you more value by agreeing to a higher termination fee with CrossCountry.”
According to the letter, that fee rose from $25.4 million to $50 million after UWM’s competing bid emerged, a change UWM argued “materially hinders your ability to maximize value.”
UWM further alleged that the company’s and board’s actions “constitute willful breach of contract, breach of fiduciary duty and other tortious conduct,” and said it is “actively considering litigation options.”
A months‑long fight over MSR scale
The letter capped months of maneuvering over Two Harbors’ mortgage servicing rights (MSR) platform and RoundPoint servicing business, an asset pool that has become a focal point for scale‑seeking players in today’s origination‑light market.
Two Harbors initially agreed to an all‑stock merger with UWM in December 2025 using the same 2.3328 exchange ratio now on offer, a combination that implied roughly $11.94 per share at UWM’s then‑share price and would have doubled UWM’s MSR portfolio.
That path wobbled as UWM’s stock declined and shareholder support proved harder to secure, prompting a delayed vote and, eventually, an all‑cash bid from CrossCountry that Two Harbors deemed a “company superior proposal.”
CrossCountry’s initial $10.70‑per‑share offer, and a higher $10.80 follow‑on bid, reset the contest around certainty of value and the willingness of buyers to absorb a $25.4 million breakup fee.
UWM has already taken public aim at Two Harbors’ leadership before the latest bid, arguing that Two Harbors’ MSR‑centric business was “effectively a melting ice cube” without a larger platform and that the board was underestimating UWM’s strategic fit.
The company, the publicly traded parent of United Wholesale Mortgage, operates one of the largest residential mortgage lending platforms in the US and reported 2025 revenue of about $3.2 billion, up from $2.7 billion a year earlier, alongside $163.4 billion in originations.
Two Harbors, founded in 2009, repositions as a “leading MSR‑focused REIT” using a paired MSR and Agency RMBS strategy designed to balance interest‑rate and prepayment risk through the cycle.
CrossCountry Mortgage, meanwhile, is a privately held direct lender. It originates more than $51 billion in volume in 2025 and financing roughly one in 35 homes sold nationwide in the fourth quarter.
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