Mortgage REIT Two Harbors posts Q3 loss, hurt by litigation expense

Two Harbors Investment

27/10/2025 20:30

Overview

Two Harbors Investment Corp Q3 comprehensive loss due to $175.1 mln litigation settlement expense

Excluding litigation expense, company generated 7.6% quarterly economic return on book value

Company expanded subservicing business, selling $30 bln UPB of MSR on retained basis

Outlook

Two Harbors expects attractive returns from low rate MSR paired with Agency RMBS

Company anticipates diminished interest rate and spread volatility

Two Harbors aims to capitalize on MSR and RMBS opportunities

Result Drivers

SUBSERVICING EXPANSION - Co expanded subservicing business by selling $30 bln UPB of MSR on a retained basis

MSR PORTFOLIO STABILITY - MSR portfolio showed stability with slight increase in delinquency rate and CPR

DIRECT-TO-CONSUMER GROWTH - Co reports robust growth in direct-to-consumer originations platform

Key Details

Metric
Beat/Miss
Actual
Consensus Estimate
Q3 Net Income
-$141.24 mln
Q3 Dividend
$0.34


Analyst Coverage

The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 4 "strong buy" or "buy", 6 "hold" and no "sell" or "strong sell"

The average consensus recommendation for the specialized reits peer group is "buy"

Wall Street's median 12-month price target for Two Harbors Investment Corp is $11.00, about 10.7% above its October 24 closing price of $9.82

The stock recently traded at 7 times the next 12-month earnings vs. a P/E of 7 three months ago

Press Release: ID:nBw7YqLwNa

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)