Company: TWO-PC
Filing Date: 2025-10-28
Form Type: 10-Q
Source: 0001465740-25-000152
Chunk: 255

Company: TWO HARBORS INVESTMENT CORP.
Filing Date: 2025-10-28
Form: 10-Q
Item: Item 8
Chunk 255
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 capacity on servicing advance financing facilities. As of September 30, 2025, we held approximately $0.3 million of unpledged mortgage loans and had $26.5 million unused committed borrowing capacity on our warehouse line of credit and $46.5 million unused uncommitted borrowing capacity on our loan repurchase agreement. Generally, unused borrowing capacity may be the result of our election not to utilize certain financing, as well as delays in the timing in which funding is provided, insufficient collateral or the inability to meet lenders’ eligibility requirements for specific types of asset classes. 

We also monitor exposure to our MSR counterparties. We may be required to make representations and warranties to investors in the loans underlying the MSR we own; however, some of our MSR were purchased on a bifurcated basis, meaning the representation and warranty obligations remain with the seller. If the representations and warranties we make prove to be inaccurate, we may be obligated to repurchase certain mortgage loans, which may impact the profitability of our portfolio. Although we obtain similar representations and warranties from the counterparty from which we acquired the relevant asset, if those representations and warranties do not directly mirror those we make to the investor, or if we are unable to enforce the representations and warranties against the counterparty for a variety of reasons, including the financial condition or insolvency of the counterparty, we may not be able to seek indemnification from our counterparties for any losses attributable to the breach.

53

Summary of Results of Operations and Financial Condition

Our book value per common share for U.S. GAAP purposes was $11.04 at September 30, 2025, a decrease from $12.14 per common share at June 30, 2025, and a decrease from $14.47 per common share at December 31, 2024. The decline in book value for both the three and nine months ended September 30, 2025 was primarily driven by the litigation settlement expense of $175.1 million and $375.0 million, respectively, that was recorded in connection with the resolution of our litigation with PRCM Advisers LLC, net mark-to-market losses on MSR and dividends declared, partially offset by servicing income and net mark-to-market gains recognized on investment securities. For further details regarding the litigation settlement recognized, refer to Note 14 - Commitments and Contingencies to the consolidated financial statements, included in this Quarterly Report on Form 10-Q. Our comprehensive loss attributable to common stockholders was $80.2