CrossCountry Mortgage has increased its acquisition offer for Two Harbors Investment Corp. to $11.30 per share, amending the agreement it reached in March and escalating a deal that has already drawn competing bids and legal attention.
The revised all-cash offer raises consideration from the previously agreed $10.80 per share. The broader structure of the transaction remains unchanged, with CrossCountry set to acquire all outstanding common shares. Preferred shareholders would receive $25 per share plus accrued and unpaid dividends, consistent with earlier terms.
The amendment follows a competitive bidding process that began with an unsolicited all-cash proposal that challenged Two Harbors’ existing merger agreement with UWM Holdings Corp., putting a $25.4 million termination fee into play. Two Harbors subsequently terminated that agreement and entered into a deal with CrossCountry, selecting its all-cash proposal over UWM’s stock-based offer.
After reviewing a subsequent unsolicited proposal, the Two Harbors board again determined CrossCountry’s bid represents the “superior” offer, citing execution certainty and deal terms.
While much of the focus remains on M&A dynamics, CrossCountry’s capital markets activity suggests a broader strategy. The company has brought five Non-QM securitizations to market in 2026 through KBRA, placing it among the most active shelves this year alongside New Residential Investment Corp. — a sign that Non-QM is a core part of its production and distribution pipeline.
According to company disclosures, the board’s rationale centers on:
- All-cash consideration, avoiding stock volatility
- No financing contingency
- Lower execution and closing risk
For mortgage professionals, that distinction is more than technical. In a market where capital markets remain uneven, certainty of close is increasingly outweighing marginal price differences, especially in transactions tied to servicing assets.
Strategy: Origination + Servicing Scale
The strategic rationale for the deal remains intact. The combination would align:
- CrossCountry’s national retail origination platform
- Two Harbors’ mortgage servicing rights (MSR) portfolio
- The RoundPoint Mortgage Servicing platform
The result is a more vertically integrated model spanning origination through servicing — a structure gaining traction as MSRs regain value in a higher-rate environment and firms look to stabilize revenue beyond production cycles.
The transaction is also facing legal scrutiny. A shareholder lawsuit filed earlier this month alleges the deal includes restrictive provisions that could deter competing bids, and claims disclosures to investors were incomplete.
The complaint also points to a $25.4 million termination fee as a potential barrier to rival offers.
At this stage, the litigation does not block the transaction, but it introduces a typical M&A overhang that could influence timing or require additional disclosures ahead of closing.
Both companies’ boards have approved the amended agreement, which remains governed by the original March 27 transaction framework. Two Harbors’ board reiterated its recommendation that shareholders vote in favor of the deal following its review of the competing proposal with financial and legal advisors, evaluating factors including financing certainty, regulatory considerations, execution risk, and overall deal structure.
“The increased bid reflects our continued excitement for this transaction and our strong conviction in the strategic and financial merits of combining CCM and TWO Harbors,” said Ron Leonhardt, founder and CEO of CrossCountry Mortgage. He added that the companies are actively coordinating integration planning across capital markets and servicing operations, including RoundPoint, and have made progress on required regulatory approvals.
What’s Next
Two Harbors shareholders are scheduled to vote on the transaction May 19, 2026, with the deal expected to close in the third quarter of 2026, subject to approvals and customary conditions.
For LOs, the headline isn’t just the price bump — it’s what the structure signals. Even with a higher competing bid in play, boards are favoring liquidity and execution certainty over upside tied to equity markets.
