By Ashley Robinson United Wholesale Mortgage has filed a federal lawsuit against Two Harbors Investment Corp., seeking more than $500 million over the collapse of a planned merger between the two companies. The complaint was filed on August 10, 2026, in the U.S. District Court for the District of Maryland’s Northern Division.
UWM Holdings Corp. and UWM Acquisitions 1 LLC accuse Two Harbors of deliberately breaching their merger agreement and committing fraud while pursuing a competing transaction with CrossCountry Mortgage. The claims have not been proven in court, and Two Harbors had not publicly responded to the allegations at the time of reporting.
How the dispute began
UWM and Two Harbors entered into a stock-for-stock merger agreement in December 2025. The transaction was valued at approximately $1.3 billion when announced and was designed to combine UWM’s wholesale mortgage platform with Two Harbors’ mortgage-servicing-rights portfolio and related operations.
The agreement included a shareholder vote and a $25.4 million termination fee. UWM’s lawsuit argues that Two Harbors later abandoned the deal in favor of an all-cash offer from CrossCountry Mortgage. CrossCountry agreed to pay the termination fee on Two Harbors’ behalf after the UWM agreement was terminated.
UWM’s central allegations
UWM claims that Two Harbors’ leadership undermined the shareholder process for the original transaction. The complaint alleges that the company delayed important investor information, failed to conduct effective outreach and restricted efforts to contact retail shareholders before a scheduled vote.
According to UWM, Two Harbors overstated the percentage of institutional investors and underestimated the number of retail shareholders who required direct communication. UWM also alleges that the list of non-objecting beneficial owners was obtained too close to the meeting date, leaving insufficient time for targeted outreach.
The complaint says that by March 16, holders of 43.85% of Two Harbors’ outstanding shares had voted in favor of the UWM transaction. UWM argues that the deal’s problem was voter turnout rather than a lack of shareholder support, because 69.62% of votes cast at that point were reportedly in favor.
Dispute over CrossCountry’s competing bid
Two Harbors rejected the UWM agreement in March 2026 after determining that it had received a superior proposal from CrossCountry Mortgage. CrossCountry offered an all-cash transaction, eventually raising its offer to $12 per Two Harbors common share.
Two Harbors’ board supported the CrossCountry deal, emphasizing certainty of value and the absence of stock-market risk for shareholders. UWM, however, claims the competing transaction was encouraged during a period when Two Harbors was restricted by the original merger agreement’s no-solicitation provisions.
UWM alleges that Two Harbors executives were also motivated by compensation arrangements. The complaint says management benefits could total approximately $35 million and that a CrossCountry transaction would allow certain awards to accelerate and be paid in cash at closing. These are UWM’s allegations, not judicial findings.
The RoundPoint and management issues
The lawsuit also focuses on RoundPoint Mortgage Servicing Corp., a subsidiary connected with Two Harbors’ mortgage-servicing business. UWM alleges that Two Harbors’ chief executive, William Greenberg, threatened to sell RoundPoint to CrossCountry if UWM would not agree to operate Two Harbors’ business according to management’s preferred terms.
UWM says it had intended to use its technology and operating platform to reduce costs, improve efficiency and generate additional revenue from Two Harbors’ mortgage-servicing assets. The company claims that Two Harbors’ conduct destroyed those expected benefits and caused losses involving projected profits, synergies, financing and transaction expenses.
Why UWM says the termination fee is not enough
The merger agreement contained a $25.4 million termination fee, but UWM argues that the contractual limit should not protect Two Harbors if the company committed an intentional breach or fraud. UWM is therefore seeking more than the termination fee, including damages for lost business opportunities and other alleged financial harm.
The complaint describes the alleged conduct as a deliberate effort to defeat the UWM transaction and favor a deal that served management interests. Two Harbors is expected to have an opportunity to answer the claims and dispute UWM’s interpretation of the merger process.
Two Harbors transaction moves forward
Two Harbors shareholders approved the CrossCountry merger on July 2, 2026. The transaction provides for $12 in cash for each Two Harbors common share, while preferred shareholders are to receive $25 per share plus accumulated and unpaid dividends under the merger terms.
The closing was expected in August, subject to remaining regulatory and other conditions. The CrossCountry transaction is separate from UWM’s lawsuit, but its completion may shape the financial and strategic consequences of the dispute. Once the merger is completed, Two Harbors will become a wholly owned subsidiary of CrossCountry and its common stock will no longer trade publicly.
What happens next
The Maryland federal case will now move through motions, discovery and other pretrial proceedings unless the parties reach a settlement. The court may examine the language of the merger agreement, communications between the companies, shareholder-voting records, proxy-solicitation efforts and the conduct surrounding CrossCountry’s competing proposal.
UWM must prove its claims to recover damages. Two Harbors may argue that it acted within the rights provided by the merger agreement and that CrossCountry’s proposal was a valid superior offer. Until the court rules, the allegations in UWM’s complaint remain disputed claims rather than established facts.