The Institutional Risk Analyst

The contest to see who will acquire the mortgage REIT Two Harbors (TWO) seems to have ended in a defeat for United Wholesale Mortgage Corp (UWMC) and a win for CrossCountry Mortgage, the #2 retail lender in the US behind Rocket Companies (RKT). The TWO Board of Directors unanimously recommended a vote for the proposed transaction with CrossCountry Mortgage at the Special Meeting on June 23, 2026.

In a system where tax avoidance is a national aspiration, the currency must inflate continuously and at varying rates to accommodate the Treasury’s cash needs. Last week in "The Wrap," we noted that real gasoline prices, adjusted for inflation, are actually quite low. We also predicted that inflation could touch double digit rates later this year as a result of the US-Israeli war with Iran, but the big driver of inflation remains the federal debt.

As of December 31, 2025, Athene had the ability to draw up to an estimated $30.7 billion via advances, inclusive of borrowings then outstanding. But when the funding agreements are added, the total exposure to the FHLBs from APO is over $50 billion vs $74 billion in total capital and retained earnings for the FHLB system.

We expect the shares of the GSEs to lose ground this week given last week’s bizarre announcement by Federal Housing Finance Agency Director Bill Pulte that the GSEs will not be released from conservatorship after all. After pumping the two stocks for months with the prospect of release from conservatorship, Pulte said Friday that the GSEs would stay under federal control for now, reinforcing their conservatorship status while exploring a limited public offering option.

As and when the home price correction finally arrives ~ 2028, many of the conventional loans written since 2020 are likely to be underwater vs the collateral. The GSEs will be looking for reasons to reject loans. After all, FHFA Director Bill Pulte is in the loan insurance business.

COOP and RKT, plus RDFN, creates an integrated business of realty, lending, servicing and asset management that is impressive

We think it is notable that AMP has underperformed the other members of the group other than SCHW over the past year.

Citi seems to be tracking the group now, whereas pre-COVID the stock significantly underperformed in terms of market beta. But performance?

In this issue of The Institutional Risk Analyst, we speak to Mike Patterson, COO of Freedom Mortgage.

This week we speak with Stan Middleman, founder and CEO of Freedom Mortgage, about the US economy and the outlook for residential mortgages