Two Harbors Investment Acquires RoundPoint Mortgage Servicing -1.5% Movement

By Bobby Samwell • Wednesday, July 31 15:18 • Permanent Link

Two Harbors Investment Corp. has recently released its 10-Q report for the quarter. The company, incorporated in 2009 and headquartered in Saint Louis Park, Minnesota, operates as a real estate investment trust (REIT) and invests in, finances, and manages mortgage servicing rights (MSRs), agency residential mortgage-backed securities (RMBS), and other financial assets through RoundPoint Mortgage Servicing LLC.

The 10-Q report discusses the acquisition of RoundPoint by TH MSR Holdings LLC, a wholly owned subsidiary of Two Harbors, and the benefits it brings in terms of cost savings and greater control over the MSR portfolio. It outlines that Two Harbors' MSR business leverages core competencies in prepayment and interest rate risk analytics and provides offsetting risks to its Agency RMBS, hedging both interest rate and mortgage spread risk.

Additionally, the report details the company's Agency RMBS portfolio, primarily comprised of fixed-rate mortgage-backed securities backed by single-family and multi-family mortgage loans, and its financing strategy through short* and long-term borrowings structured as repurchase agreements.

The report also emphasizes Two Harbors' status as a REIT for U.S. federal income tax purposes, highlighting the requirement to distribute at least 90% of annual taxable income to stockholders and the election to be treated as a REIT, subject to meeting certain investment and operating tests and annual distribution requirements.

Furthermore, the 10-Q report contains forward-looking statements, detailing numerous risks and uncertainties that may affect the company's actual results, including changes in interest rates, market value of target assets, and legislative and regulatory actions affecting its business.

The report also addresses factors affecting Two Harbors' operating results, such as changes in interest rates, financing costs, and prepayment rates on its assets, and the impact of fair value measurement on its financial statements, with approximately 86.5% of its total assets reported at fair value as of June 30, 2024.

As a result of these announcements, the company's shares have moved -1.5% on the market, and are now trading at a price of $13.58. If you want to know more, read the company's complete 10-Q report here.

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