San Francisco – September 10, 2026 -- UWM Holdings Corporation (NYSE: UWMC) shares have fallen roughly 75%, or about $3.65, since December 17, 2025, after the mortgage lender disclosed a $603 million hedging loss tied to its collapsed bid for Two Harbors Investment Corp. Law firm Hagens Berman is investigating a securities class action against UWM covering the period March 9, 2026 through August 5, 2026, with a lead plaintiff deadline of October 13, 2026.
UWM's stock cratered 34% in a single session on August 6, 2026
The drop followed disclosures of a $451 million net loss and a roughly $603 million hedging loss for the quarter. Management acknowledged for the first time that the company was "over-hedged" after the Two Harbors transaction "went away," according to the complaint.
UWM's total equity plunged $615 million, or 38%, sequentially
UWM subsequently entered a heavily dilutive recapitalization plan to shore up its balance sheet, a move the lawsuit says came as a direct consequence of the failed hedging strategy.
The failed acquisition traces back to a December 2025 merger deal worth $1.3 billion
UWM had agreed to acquire mortgage servicing rights firm Two Harbors in an all-stock transaction. To protect against volatility in Two Harbors' MSR portfolio, UWM entered into significant hedging positions tied to interest rates and refinancing activity. The complaint alleges UWM never disclosed that it had over-hedged the position, a strategy that becomes a speculative liability if the underlying deal falls apart.
Two Harbors walked away for a rival cash offer on March 27, 2026
Two Harbors terminated its agreement with UWM in favor of a definitive cash merger with CrossCountry Mortgage, triggering a termination fee payment to UWM. Investors allege that despite this collapse more than four months earlier, UWM did not reveal the scale of its hedging exposure until its August 6 earnings report.
Hagens Berman is scrutinizing UWM's delay in unwinding the position
"We're focused on UWM's explanations for why it refrained from unwinding its hedges months ago and why management seemingly went virtually silent on the naked hedging risks until recently," said Reed Kathrein, the Hagens Berman partner leading the investigation. The firm is also inviting individuals with non-public information about UWM's hedging decisions to come forward under the SEC Whistleblower program, which offers awards of up to 30% of any successful recovery.