Key facts
- Two Harbors Investment Corp. calls UWM lawsuit frivolous and meritless.
- Two Harbors abandoned a merger with UWM.
- Two Harbors pursued a cash deal with CrossCountry Mortgage.
- Two Harbors cited UWM's significant derivatives loss as a reason for the failed merger.
- Two Harbors cited UWM's governance concerns as a reason for the failed merger.
- The lawsuit was filed by UWM Holdings Corp.
Two Harbors Investment Corp. has officially responded to a lawsuit initiated by UWM Holdings Corp., characterizing the legal action as "frivolous" and "meritless." Two Harbors is asserting its right to withdraw from the previously agreed-upon merger with UWM. Instead, Two Harbors pursued and finalized a cash transaction with CrossCountry Mortgage. The company has detailed its justifications for dissolving the merger with UWM, pointing to significant financial and operational concerns within UWM. Specifically, Two Harbors highlighted a substantial derivatives loss incurred by UWM, which reportedly amounted to $600 million. Additionally, Two Harbors cited governance issues at UWM as contributing factors to its decision to seek an alternative deal. This legal back-and-forth stems from the collapse of the planned merger between the two prominent entities in the mortgage industry.