Analysts from Keefe, Bruyette & Woods (KBW) say that United Wholesale Mortgage (UWM) may be better off after losing its bid for Two Harbors Investment Corp. They argue that the failed acquisition removes leverage risk and increases the likelihood of a dividend cut that could strengthen the company’s balance sheet.

In a flash note released July 5, KBW analysts Bose George and Frankie Labetti wrote that Two Harbors‘ mortgage servicing rights portfolio would have been a strategic fit for UWM by expanding its servicing business and adding a low-coupon servicing portfolio with opportunities to recapture borrowers through refinancing. details ⇒

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