Two Harbors Investment Corp. (NYSE: TWO) has publicly rejected a lawsuit filed against it by UWM Holdings Corporation (NYSE: UWMC), calling the legal action frivolous and without merit.

According to a statement from Two Harbors, its board of directors secured a $12.00 per share all-cash acquisition by CrossCountry Mortgage. TWO shareholders approved that transaction on July 2, 2026, and the deal is expected to close following the receipt of a final state regulatory approval, anticipated in August.

Two Harbors said UWMC's stock has fallen nearly 70% year-to-date after the company disclosed a $600 million derivatives loss, which Two Harbors said had been rumored since May 19, 2026. UWMC has attributed that loss to a hedge tied to TWO's mortgage servicing rights portfolio, a portfolio Two Harbors says was already hedged and under contract to be sold to CrossCountry Mortgage.

Two Harbors contends that a prior stock-for-stock merger agreement with UWMC was terminated in March 2026 after failing to secure shareholder support, citing a decline in UWMC's stock price and a recommendation against the deal by proxy advisory firm ISS. At the time of the scheduled vote, Two Harbors said the implied value to its shareholders was approximately 20% below book value.

Two Harbors noted that following the merger termination, UWMC publicly described the outcome favorably, with chief executive Mat Ishbia stating on a recent earnings call that an Oaktree financing arrangement was a better outcome than any transaction with Two Harbors.

Two Harbors said it intends to contest the lawsuit and expressed confidence that discovery would reveal communications among UWMC, Mizuho Bank, and Oaktree relevant to UWMC's public disclosures regarding its financial position and intent to complete a transaction with Two Harbors.