Tomahawk, WI 8/20/2013 (Basicsmedia) – Two Harbors Investment Corp (NYSE:TWO) is one of the foremost real estate investment trust companies in the U.S. It is an investor, financier and manager in the residential mortgage backed securities, often referred to as RMBS. It is also an investor, financier and manager in residential real properties and mortgage plans or loans. This is a company with huge potential since the real estate industry is expected to perform much better than it has done up to this point. It is worth pointing out that this industry is on the up, and is recovering from the 2008 financial crisis.


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Reasons Why TWO Has Performed Well Financially

TWO has been enjoying profits while the rest of the market isn’t hasn’t had much good news to report in the last few years.  Where the rest of the industry has reported profits, it hasn’t been at the same level as what TWO and PennyMac have both managed to achieve. In 2013, this company has thus far enjoyed a stellar performance which is expected to be pleasant news to its investors. One remarkable achievement which TWO has reported is that it has managed to sustain its net interest at 2.9%, which is the same as what it reported for the last quarters of 2012.

Comparison between the quarterly financial results of 2012 versus those of which have been 2013, indicate that there has been general improvement in most areas. This has been attributed on the company’s decision to diversify instead of putting all its financial eggs in one basket. This is perhaps one area where it has outperformed its competitors in the recent years. TWO has gone into producing and selling single family rentals, whose demand has sky rocketed in the recent past. This decision has brought revenue and profits which the company wouldn’t have imagined.

The company also saw an increase in its earnings, which is yet one more reason why it has been doing well, and is currently the darling of many investors. Just to backtrack a bit, single family rentals have boosted the performance of companies such as Blackstone Group (NYSE: BX). When TWO decided to take this route, it wasn’t the first one to do so; it was merely following the path which other companies had done before it. Two Harbors’ decision to go into the jumbo loan securitization market is bound to make it as profitable as Redwood Trust (NYSE: RWT).

TWO’s Future Depends on Mortgage Servicing Rights

TWO is expected to reap more benefits as it decides to invest more in the mortgage servicing rights, which is considered one of the most lucrative. Banks are reducing their interests in the MSR market, and companies such as Two Harbors are expected to be among the biggest beneficiaries. The fact that this market has started witnessing a boom, will also play a part in influencing how much revenue and profits TWO is able to attract and report both on a quarterly and annual basis.

More than anything else, I think that TWO has kept tabs on companies which are making money, and rewarding their investors handsomely, and it isn’t afraid of doing what they are doing. This is good news to investors, and goes a long way to assure them that their investments are in good hands, and will continue attracting the kind of revenue and profit which they expect. This stock is one which investors should add to their portfolio.

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