Ishbia vs. Leonhardt... & a Mystery Whale Enters the Chat 🐋

Mat Ishbia & Ron Leonhardt are circling one of the last trophy servicers remaining & things are getting spicy 🌶 .

On Monday, Two Harbors disclosed that CrossCountry Mortgage lobbed an unsolicited all-cash bid of $10.70 per share, valuing the company at roughly $1.12B. The offer also packs a $25.4M breakup fee to blow up UWM’s existing deal. Ishbia now has until Wednesday at midnight to counter w/ something better, as UWM remains actively negotiating.

But here’s the twist: there’s a third bidder in the mix. According to Two Harbors, an unnamed player submitted a $10.75 per share cash offer, plus the same $25.4M termination fee. It’s only a nickel higher, but enough to edge out CCM’s bid, which had already been deemed “superior” to UWM’s.

For the full breakdown of this servicing arms race, scroll down 👇 & upgrade to paid. Also in today’s edition: Palantir teams up w/ the Middleman family, Fannie & Freddie go on an MBS shopping spree, I’m launching a podcast (!) & more.

(🙏 If you like what you’re reading, tell a fellow mortgage junkie to sign up here.)

Palantir, the Big Data firm founded by contrarian billionaire Peter Thiel, is getting deeper into mortgage via a partnership w/ Moder (whose chairman is Freedom’s Michael Middleman). Freedom is the first pilot company on Palantir’s new AI-powered mortgage ops platform.

The platform uses Palantir's Ontology to create an agentic AI framework that translates guidelines & policies into auditable, configurable rules, covering the full mortgage cycle from origination through servicing. Ontology sits on top of a lender’s core tech systems & automates the decision-making & process execution that human operators currently handle manually.

Palantir said early deployments at Freedom are already showing faster processing & improved accuracy.

Still, I think this might be a tough sell to other lenders out there. Palantir’s tech was used to help build out Better’s Tinman platform & runs Fannie/Freddie’s fraud detection engine, but this is something else entirely.

Moder's pitch to the industry is effectively: Let us run your mortgage operations using this AI platform. How many rivals would be comfortable giving Moder deep visibility into their loan portfolio knowing Freedom’s reputation w/ regard to recapture? Others might also be wary of Palantir given the politics/optics of its uh, other work in surveillance. Are the guardrails in place?

FWIW, there’s a similar company that I’m hearing a lot of buzz about of late: venture-backed Pylon, which creates "programmatic mortgage infrastructure" designed to replace manual processes w/ automation. Can you guess who is a top investor in Pylon? Peter Thiel. More on them in a future edition…

Personally, I live by a few credos: Treat people w/ respect, don't engage in pay-to-play, & most importantly, don't mess w/ a guy who is unusually interested in acquiring the blood of the young.

Fannie Mae & Freddie Mac have begun placing large orders to purchase MBS, stepping into a market roiled by widening bond spreads & volatility, sources told Bloomberg. The GSEs are moving to capitalize on a sharp selloff while expanding their retained portfolios. Their efforts follow a directive from President Donald Trump instructing the companies to acquire $200B of MBS as part of a push to drive down mortgage rates.

Per Bloomberg, Trump’s $200B directive sparked an almost immediate move in the roughly $9T MBS market, w/ relative yields to Treasuries on recently issued securities narrowing about 0.2 percentage point. But in the weeks that followed, Fannie & Freddie only bought at a modest pace, attributed to compressed risk premiums on many bonds limiting profit & the ability to influence rates.

Mortgage-bond spreads have widened sharply & volatility has picked up, driven in part by the escalating conflict in the Middle East.

I’ve been covering housing & mortgage for more than a decade, and I’m confident that The Scoop is the most entertaining & in-depth newsletter in the industry. But some stories hit different when you hear them, so The Mortgage Scoop is launching a podcast.

Some details are still TBD, but each week, two knowledgeable insiders will talk shop for 30 minutes about the biggest trends moving the mortgage market. We’ll occasionally bring in an expert guest to shed light on a specific issue.

You know me: This will not be the press release version or some carefully managed spin. Instead, you’ll hear a fun & fearless discussion on the industry's biggest players, w/ behind-the-scenes breakdowns of the most important trends. I’ll share exclusive reporting & there will be zero fluff or jargon. 

Before I finalize all this, I want to hear your thoughts. What do you actually want from a mortgage podcast? Email me your thoughts at [email protected] or DM me on LinkedIn. 

If you’re interested in becoming an advertising partner, hit me up at [email protected]. We’re planning to launch in May or June. More details to come!

UWM’s submitted offer was structured as a stock transaction & neither company’s stock is performing great at the moment. How much would Ishbia be willing to spend to acquire Roundpoint & about $200B in MSRs? Moving to a cash offering might complicate things from a balance sheet perspective.

Regardless of whether UWM closes the Two Harbors deal, they’re undoubtedly moving in the servicing direction. UWM has already rolled out MSP & hired managers for servicing. And don’t underestimate that while others have pushed some voice AI tech for recapture, no one has done it at the scale of UWM. Obtaining more MSRs appears to be a key strategy in hitting that aggressive $280B origination goal.