UWM determined this 12 months to carry servicing in-house, following the acquisition of Mr. Cooper Group by its principal rival, Rocket Corporations. Lenders throughout the trade are searching for to increase their servicing portfolios to retain borrower relationships and cross-sell extra merchandise, both immediately or by means of dealer channels.
Underneath the settlement, UWM will purchase Two Harbors’ $176 billion in unpaid principal steadiness (UPB) mortgage servicing rights (MSRs), practically doubling its servicing portfolio to $400 billion.
The businesses count on the transaction to generate roughly $150 million in annual value and income synergies, whereas enhancing earnings. Further efficiencies are anticipated in financing, hedging and secondary-market execution, leveraging Two Harbors’ capital markets experience alongside UWM’s scale.
“The timing of doubling our servicing guide as we carry servicing in-house is the right alignment, permitting us to ship significant upside to stockholders and leverage elevated money stream to speculate deeper into the dealer community,” Mat Ishbia, chairman, president and CEO of UWM, mentioned in an announcement.
In January 2024, Two Harbors launched a method to increase into mortgage origination.
“Scale has turn out to be extra vital than ever within the mortgage trade,” Invoice Greenberg, Two’s president and CEO, mentioned in an announcement. “We’re very excited to accomplice with the most important mortgage lender within the nation, bringing our experience in MSR investing and servicing by means of the RoundPoint platform.”
As a part of the transaction, the mixed firm’s board will increase to 11 administrators, with one seat designated by Two Harbors.
Two Harbors shareholders will obtain 2.3328 shares of UWMC Class A typical inventory for every share of Two widespread inventory, valuing at $11.94 per share — a 21% premium to the 30-day volume-weighted common worth ending Dec. 16.
The transaction will improve UWM’s public float by 93% to almost 513 million shares. On a professional forma totally diluted foundation, UWM shareholders will personal roughly 87% of the mixed firm, with Two Harbors shareholders holding the remaining 13%.
The boards of each firms have accredited the deal, which is anticipated to shut within the second quarter of 2026. The deal is pending approval of Two’s stockholders, regulatory approvals and different closing situations.
