TWO reported a challenging third quarter with a negative economic return of 6.3% mainly due to a $375 million litigation settlement expense, but underlying operational metrics remain robust and continue to leverage their strategic subservicing initiatives.

• Completed a $375 million settlement with former external management, funded through portfolio adjustments.
• Adjusted RMBS portfolio size and successfully increased third-party subservicing UPB to approximately $40 billion.
• Achieved record direct-to-consumer locks and originated $49 million in loans, indicating strong growth potential despite a lower capital base.
• Plans to redeem $262 million in convertible notes by January 2026 to align structural leverage with historical norms.
• Confident about future growth opportunities and view current stock valuation as significantly undervalued compared to peers.