📑 What This Document Is 📜

This filing is a Definitive Proxy Statement, which means it's a formal document sent directly to TWO Harbors Investment Corp. common stockholders before a special meeting. 📅 Its entire purpose is to inform shareholders about a major, proposed corporate event: the merger of TWO with CrossCountry Mortgage (CCM).

👉 Why this matters: The document outlines the details, terms, timeline, and voting proposals for the merger, and your vote is absolutely critical. The Board of Directors strongly recommends that all stockholders vote "FOR" the merger.

🏢 The Companies Involved 🏠

To understand the merger, you need to know who these companies are. TWO Harbors Investment Corp. (TWO) and its proposed acquiring partner, CrossCountry Mortgage (CCM), are major players in the mortgage finance industry.

• Two Harbors Investment Corp. (TWO):

  • Established in 2009, TWO is a Maryland corporation that specializes in investing in, financing, and managing mortgage servicing rights (MSR) and Agency residential mortgage-backed securities (Agency RMBS).
  • It operates as an internally-managed Real Estate Investment Trust (REIT).
  • Its primary executive offices are located at 1601 Utica Avenue South, Suite 900, St. Louis Park, MN 55416, and the general phone number is (612) 453-4100.

• CrossCountry Mortgage (CCM):

  • CCM is described as a leading nationwide retail mortgage lender, with over 8,000 employees and 700+ branches.
  • CCM’s main business is originating, selling, and servicing residential mortgage loans.
  • They maintain a very strong national presence, operating in all 50 states, D.C., and Puerto Rico.

🤝 The Proposed Merger: CCM Merger 🚀

The core of the filing is the CCM Merger Proposal. This is a plan where TWO will essentially be absorbed by CCM. The transaction is structured to minimize disruption while integrating TWO's operations under CCM's umbrella.

• The Structure: The merger involves three parties: TWO, CrossCountry Intermediate Holdco, LLC (CCM), and CrossCountry Merger Corp. (Merger Sub), a subsidiary of CCM. In the resulting merger (the "CCM Merger"), Merger Sub will merge with TWO, and TWO will continue as a wholly owned subsidiary of CCM.
• The Timeline: The merger is expected to close (the "Effective Time") sometime in the second half of 2026, though the exact timing cannot be guaranteed.
• The Mechanism: The separate corporate existence of Merger Sub will cease, and TWO will continue its existence under Maryland law as the surviving subsidiary company.

💰 Cash Consideration for Common Stock 💵

For every common stockholder, the main financial takeaway is the straight cash payment they will receive.

• Common Stock Treatment: At the Effective Time, each outstanding share of TWO Common Stock will be converted into the right to receive $10.80 per share in cash. All existing shares of TWO Common Stock will automatically be canceled and cease to exist upon conversion.
• Key Takeaway: This cash payout provides a clear, quantifiable value for current common stockholders.

🏦 Treatment of Preferred Stock and Debt 📉

The merger affects more than just the common stock; it dictates the fate of two specific classes of securities: Preferred Stock and existing company debt.

• TWO Preferred Stock Redemption: The three classes of preferred stock—8.125% Series A, 7.625% Series B, and 7.25% Series C—will not continue in the merged entity. Instead, they will be redeemed.
  • Upon redemption, CCM (on behalf of TWO) will set aside cash in trust for the holders. Each share will be redeemed for an amount equal to the Preferred Stock Redemption Amount (which includes the cash set aside plus any accumulated, unpaid dividends).
• Existing Debt: CCM currently expects to maintain TWO’s existing lines of credit and repurchase agreements.
  • Specifically, regarding the 9.375% Senior Notes due 2030 (TWO Senior Notes), CCM will cause TWO to make an offer within 30 days following the Effective Time. The repurchase price will be cash equal to 101% of the principal amount plus any accrued or unpaid interest.

🧾 Tax and Legal Implications 📜

The merger is designed as a taxable event, which is crucial for investors to understand.

• Tax Consequence: CCM and TWO intend to treat the CCM Merger as a taxable sale of TWO Common Stock for cash for U.S. federal income tax purposes.
• Tax Calculation: A U.S. stockholder will recognize gain or loss based on the difference between the cash received and their adjusted tax basis in the stock.
• Appraisal Rights: Shareholders should note that, under Maryland law, they are not entitled to exercise appraisal rights (the right to demand that the company buy back shares at an appraised value) in connection with this merger.

🗳️ What Shareholders Must Do 🗓️

The details of the special meeting and the voting process require prompt attention from all stockholders.

• The Special Meeting: The meeting will be held virtually on May 19, 2026, at 10:00 a.m. Eastern Time.
• Record Date: The official record date for determining eligible voters is the close of business on April 15, 2026.
• Voted Proposals: Stockholders must consider and vote on three items:
  1. CCM Merger Proposal: Approval is required for the merger to proceed.
  2. Non-Binding Compensation Advisory Proposal: This relates to paying compensation to TWO’s named executives based on the merger.
  3. Adjournment Proposal: To approve the meeting's adjournment if more votes are needed.
• VOTING WARNING: Your vote is critical. The filing explicitly warns that the failure to vote, or the failure to authorize a proxy vote, is legally treated as voting "AGAINST" the CCM Merger Proposal.
• Prior Deal Termination: The filing confirms that the previous merger agreement with UWM Holdings Corporation has been terminated and abandoned. You must vote again for the new CCM proposal.

💼 Board and Management Recommendations 👍

The Board of Directors has provided strong, unanimous support for the proposed transaction.

• Board’s Stance: The Board unanimously determined that the CCM Merger Agreement and all associated transactions are "advisable and in the best interests of the TWO common stockholders."
• Board's Recommendation: The Board unanimously recommends that common stockholders vote “FOR” all three proposals: the CCM Merger Proposal, the Non-Binding Compensation Advisory Proposal, and the Adjournment Proposal.
• Executive Interest: Management notes that directors and officers have interests in the merger, which include the treatment of existing TWO Equity Awards (RSUs, PSUs, and RSAs). These awards, upon the Effective Time, will automatically convert into the right to receive the full CCM Merger Consideration.

⚠️ Key Risks and Disclaimers 🛑

Proxy statements are filled with necessary warnings about the inherent uncertainty of any large corporate transaction.

• Conditions to Close: The merger is not guaranteed. It is subject to numerous conditions, including the approval of the CCM Merger Proposal by stockholders, regulatory approvals (like the expiration of the Hart-Scott-Rodino Act waiting period), and the absence of a material adverse effect on TWO.
• What Happens If It Fails: If the CCM Merger is not completed for any reason, TWO will not merge. Instead, TWO will remain an independent public company, and stockholders will continue to own their existing shares.
• Termination Fees: There is a risk that TWO may be obligated to pay CCM a termination fee of $25.4 million and reimburse CCM for the UWM Termination Fee if the merger does not proceed.

☎️ Contacting TWO and CCM 📧

For more detailed information, both companies have designated contact points:

• TWO Investor Relations:
  • Email: [email protected]
  • Phone: (612) 453-4100
• CCM/CrossCountry Mortgage:
  • Office: 2160 Superior Avenue, Cleveland, Ohio 44114
  • Phone: (877) 351-3400
• Proxy Assistance: For questions about the proxy statement itself, shareholders should contact D.F. King & Co., Inc. (Email: [email protected]).

🧠 The Analogy 🏗️

Think of the CCM Merger like exchanging a beloved, outdated family house (TWO) for a brand-new, modernized complex (CCM). You are being offered a fixed cash payment ($10.80 per share) for your keys. To make the deal official, all the owners (the stockholders) must vote "yes" on the blueprints and the timeline. The Board is basically telling you, "This is the best offer, and we strongly recommend accepting it." If the vote fails, the house (TWO) doesn't get sold, and you keep your old property, but that uncertainty is a major risk factor.

🧩 Final Takeaway 💡

The $10.80 per share cash payout is the centerpiece of this transaction. Stockholders must vote "FOR" the proposal by the May 19, 2026, deadline, or they risk having their vote counted as a vote "AGAINST" the merger.