Company: TWO-PC
Filing Date: 2025-02-18
Form Type: 10-K
Source: 0001465740-25-000083
Chunk: 148

Company: TWO HARBORS INVESTMENT CORP.
Filing Date: 2025-02-18
Form: 10-K
Item: Item 8
Chunk 148
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 RoundPoint, through purchases and recapture of MSR. TH MSR Holdings does not directly service mortgage loans; instead, it engages its wholly owned subsidiary, RoundPoint, to handle substantially all servicing functions for the mortgage loans underlying the Company’s MSR. RoundPoint also services mortgage loans underlying MSR owned by third parties. RoundPoint has approvals from Fannie Mae and Freddie Mac to service residential mortgage loans.

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Table of ContentsTWO HARBORS INVESTMENT CORP.Notes to the Consolidated Financial Statements

The following table summarizes activity related to the Company’s MSR portfolio for the years ended December 31, 2024, 2023 and 2022.Year EndedDecember 31,(in thousands)202420232022Balance at beginning of period$3,052,016 $2,984,937 $2,191,578 Purchases of mortgage servicing rights115,587 317,194 640,051 Additions from sales of mortgage loans667 — — Sales of mortgage servicing rights (1)(81,014)(115,754)(259,059)Changes in fair value due to:Changes in valuation inputs or assumptions used in the valuation model (2)140,168 97,859 793,631 Other changes in fair value (3)(231,606)(227,663)(371,023)Other changes (4)(1,547)(4,557)(10,241)Balance at end of period (5)$2,994,271 $3,052,016 $2,984,937 ____________________(1)During the year ended December 31, 2023, excess MSR was transferred to Agency-sponsored trusts in exchange for stripped mortgage backed securities, or SMBS. In each transaction, a portion of the SMBS was acquired by third parties and the Company acquired the remaining balance of those SMBS, which were briefly included within Agency AFS securities until their sale in the same year.(2)Includes the impact of acquiring MSR at a cost different from fair value.(3)Primarily represents changes due to the realization of cash flows.(4)Includes purchase price adjustments, contractual prepayment protection, and changes due to the Company’s purchase of the underlying collateral.(5)Based on the prior month-end’s principal balance of the loans underlying the Company’s MSR, increased for current month purchases.At December 31, 2024, the Company pledged MSR with a carrying value of $3.0 billion as collateral for repurchase