According to HousingWire, Two Harbors Investment Corp. is still working through final regulatory approvals for its sale to CrossCountry Intermediate Holdco. The company has already secured approvals from nearly every state and regulatory agency involved, but one approval remains pending. Because of this delay, the timeline for closing has shifted, which affects how much shareholders will receive as a stub dividend when the deal finally closes.
When Two Harbors first announced this transaction earlier in the year, the companies had estimated the stub dividend at about $0.12 per share based on an expected August closing. Now that the closing will happen later, that payment has to be recalculated. The new stub dividend will be based on Two Harbors' most recent quarterly dividend of $0.34 per share, adjusted for the actual number of days that pass between the end of the second quarter and the day before the merger closes.
The way the calculation works is pretty straightforward. They take that $0.34 quarterly dividend, multiply it by the number of days the shareholders will have held their stock during that period, and divide it by the number of days in a full quarter. This stub payment goes to shareholders who hold stock the last trading day before the merger becomes official, and it gets paid at the same time they receive their merger consideration.
Two Harbors clarified that this stub dividend doesn't take anything away from what shareholders will receive overall through the merger. The deal itself values the company at roughly $1.26 billion, a price that came together after CCM and United Wholesale Mortgage got into a bidding war that drove the offer up significantly from earlier bids.
This acquisition brings together Two Harbors' substantial mortgage servicing portfolio with CCM's retail origination and servicing platform. Two Harbors manages a $159 billion mortgage servicing rights portfolio and also subservices about $40 billion through RoundPoint Mortgage Servicing, which it picked up a few years ago.
What I'm seeing locally with clients who have mortgages serviced by these companies is that deals like this do create some uncertainty in the near term. The Bay Area and East Bay markets are closely tied to mortgage servicers and origination platforms, so when two major players consolidate, folks naturally wonder what changes might come down the road. For now, the fundamentals haven't shifted, but it's worth keeping an eye on how this final approval plays out and what the combined entity looks like once things settle.
