Company: TWO-PC
Filing Date: 2025-02-18
Form Type: 10-K
Source: 0001465740-25-000083
Chunk: 87

Company: TWO HARBORS INVESTMENT CORP.
Filing Date: 2025-02-18
Form: 10-K
Item: Item 7
Chunk 87
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898 136,724 125,407 Total servicing income167,568 178,609 681,648 685,777 Total servicing costs4,575 12,029 20,069 95,488 Net servicing income$162,993 $166,580 $661,579 $590,289 

The decrease in total servicing income for the three months ended December 31, 2024, as compared to the same period in 2023, was primarily due to lower servicing fee income on a smaller MSR portfolio as a result of sales and runoff, partially offset by higher ancillary and other fee income as a result of the acquisition of RoundPoint. The decrease in total servicing income for the year ended December 31, 2024, as compared to the same period in 2023, was primarily due lower servicing fee income on a smaller MSR portfolio as a result of sales and runoff, partially offset by higher float income as a result of the higher interest rate environment and higher ancillary and other fee income as a result of the acquisition of RoundPoint.

Prior to the acquisition of RoundPoint, we did not directly service mortgage loans; instead, we contracted with appropriately licensed subservicers to handle substantially all servicing functions in the name of the subservicer for the mortgage loans underlying our MSR. These third-party subservicing costs and other servicing expenses directly related to our MSR portfolio are included within the servicing costs line item on our consolidated statements of comprehensive income (loss). Post-acquisition, all servicing-related expenses incurred by RoundPoint as an operating company are included within the other operating expenses line item on our consolidated statements of comprehensive income (loss). The decrease in servicing costs during the three and twelve months ended December 31, 2024, as compared to the same periods in 2023, was the result of lower third-party subservicing fees due to the acquisition of RoundPoint.

Loss On Investment Securities 

The following table presents the components of loss on investment securities for the three and twelve months ended December 31, 2024 and 2023:

Three Months EndedYear EndedDecember 31,December 31,(in thousands)2024202320242023Proceeds from sales$1,286,810 $978,936 $2,183,330 $2,673,827 Amortized cost of securities sold(1,293,570)(1,061,837)(2,222,634)(2,792,703)