Roundpoint Mortgage parent Two braces for legal charge

Two, the real estate investment trust that owns Roundpoint Mortgage Servicing, is anticipating legal expenses that some analysts say could lead to asset sales.

The REIT expects a $198.9 million charge for May that includes a $139.8 million fee as a contingency liability and $60 million in related expenses due to the lawsuit with its former external manager, according to a Securities and Exchange Commission filing.

A recent debt raise will help the company manage the cost of summary judgment on certain claims, and Two also may sell off some of its mortgage-backed securities or servicing rights due to the expense’s impact, according to a BTIG report.

“We expect it will initially look to trim its $8.6 billion of agency MBS, versus selling its $3 billion market value of MSRs, which are…