Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Feb. 06, 2014 | Jun. 28, 2013 | |
Document Information [Line Items] | ' | ' | ' |
Document Type | '10-K/A | ' | ' |
Amendment Flag | 'true | ' | ' |
Amendment Description | 'Home Loan Servicing Solutions, Ltd. (collectively referred to throughout as “HLSSâ€, “usâ€, “ourâ€, “weâ€, or the “Companyâ€) filed our Annual Report on Form 10-K for the fiscal year ended December 31, 2013, (the “Original Form 10-Kâ€) with the Securities and Exchange Commission (the “SECâ€) on February 6, 2014. We are filing this Amendment No. 1 to the Form 10-K (the “Form 10-K/Aâ€) to properly state the Notes receivable – Rights to MSRs at fair value and to include the effect of such fair value adjustments in the application of the interest method as of and for the years ended December 31, 2013 and 2012, including the quarterly periods within. Concurrently with the filing of this Form 10-K/A, we are also filing an amendment to our Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2014 (the “Form 10-Q/Aâ€) to reflect the restatement of our consolidated financial statements as of and for the fiscal quarter ended March 31, 2014 (collectively with the Form 10-K/A, the “Amendmentsâ€). The Amendments reduce net income and cash provided by operating activities by $7.3 million for the year ended December 31, 2012 and $10.0 million for the year ended December 31, 2013 and increase net income by $20.7 million for the first quarter of 2014. In addition, the Amendments increase cash flows from operating activities by $16.7 million in the first quarter of 2014. When adjusting the Notes receivable – Rights to MSRs to fair value, we also adjusted the allocation of net cash received between interest income and reduction in Notes receivable – Rights to MSRs. The fair value of our Notes receivable – Rights to MSRs decreased by $17.3 million and $7.3 million as of December 31, 2013 and 2012, respectively. The fair value of the Notes receivable – Rights to MSRs is $637.8 million as of March 31, 2014 and $629.6 million as of June 30, 2014. Further, the Amendments did not impact the Company’s net cash flows for any period. We updated our disclosures in the Form 10-K/A to conform to the restated financial statements to the extent necessary. We have determined that, for each period, the difference between the fair value and the carrying value of the Notes receivable – Rights to MSRs, and the resulting impact on the amortization of Notes receivable – Rights to MSRs, was material and, thus, the recorded amounts were not in accordance with Accounting Principles Generally Accepted in the United States of America (“GAAPâ€). The Company utilized appraisals prepared by independent valuation firms on a quarterly basis when establishing the fair value of the Notes receivable – Rights to MSRs. At the time the Company issued the financial statements for the relevant periods, our accounting convention provided for an allowable range of variation to the estimated fair value of the Notes receivable – Rights to MSRs of plus or minus 5% based on the belief that this was an acceptable accounting convention. Variances within that range did not result in an adjustment to the carrying value of the assets to the single point estimate of fair value and were not considered in the application of the interest method when accounting for the Notes receivable – Rights to MSRs. The variance observed for the applicable periods fell within that range and, as a result, the Company did not adjust the recorded amount of the Notes receivable – Rights to MSRs. The Company has subsequently determined that it was required under GAAP to adjust the Notes receivable – Rights to MSRs to the best estimate of fair value and to include the effect of such fair value adjustments in the application of the interest method of accounting. The Company’s valuation process now requires us to record the Notes receivable – Rights to MSRs at the single point estimate of fair value. We also identified a data input error in relation to the valuation of a small subset of our Notes receivable – Rights to MSRs as of December 31, 2013 and March 31, 2014. The impact of this data error of $5.9 million and $9.3 million as of December 31, 2013 and March 31, 2014, respectively, is reflected in the adjustments to the Notes receivable – Rights to MSRs balance for each of the two periods. We have determined that the foregoing errors relating to the valuation of our Notes receivable – Rights to MSRs and the related effect in the application of the interest method in accounting for the Notes receivable – Rights to MSRs giving rise to the restatements constituted a material weakness in our internal control over financial reporting. We intend to fully remediate that weakness during 2014. See “Part II, Item 9A – Controls and Procedures.†We are also filing this Form 10-K/A to include the signatures of a majority of the members of the Board of Directors of the Company that were not included with the Original Form 10-K filing as required by General Instruction D of Form 10-K. In accordance with Rule 12b-15 under the Exchange Act, this Form 10-K/A also includes the currently dated signature page and certifications from the Company’s principal executive officer and principal financial officer attached hereto as Exhibits 31.1, 31.2, 32.1 and 32.2. This Form 10-K/A also includes the consent of the independent registered public accounting firm attached hereto as Exhibit 23.1. Except as described above, no other changes have been made to the Original Form 10-K. This Form 10-K/A speaks as of the filing date of the Original Form 10-K and has not been updated to reflect events occurring subsequent to the date of the Original Form 10-K. This Form 10-K/A should be read in conjunction with other Company filings with the SEC. | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Trading Symbol | 'HLSS | ' | ' |
Entity Registrant Name | 'HOME LOAN SERVICING SOLUTIONS, LTD. | ' | ' |
Entity Central Index Key | '0001513161 | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Entity Well-known Seasoned Issuer | 'Yes | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Filer Category | 'Large Accelerated Filer | ' | ' |
Entity Common Stock, Shares Outstanding | ' | 71,016,771 | ' |
Entity Public Float | ' | ' | $1,678,051,323 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | |
In Thousands, unless otherwise specified | |||
Assets | ' | ' | |
Cash and cash equivalents | $87,896 | $76,048 | |
Match funded advances | 6,387,781 | 3,098,198 | |
Notes receivable - Rights to MSRs | 633,769 | 296,451 | |
Related party receivables | 70,049 | 28,271 | |
Deferred tax assets | 1,024 | ' | |
Other assets | 130,153 | 79,091 | |
Total assets | 7,310,672 | 3,578,059 | |
Liabilities | ' | ' | |
Match funded liabilities | 5,715,622 | [1] | 2,690,821 |
Other borrowings | 343,386 | ' | |
Dividends payable | 10,653 | 6,706 | |
Income taxes payable | 682 | 46 | |
Deferred tax liabilities | 1,266 | ' | |
Related party payables | 10,732 | 2,874 | |
Other liabilities | 11,884 | 4,233 | |
Total liabilities | 6,094,225 | 2,704,680 | |
Commitments and Contingencies (See Note 15) | ' | ' | |
Equity | ' | ' | |
Equity - Ordinary shares, $.01 par value; 200,000,000 shares authorized; 71,016,771 and 55,884,718 shares issued and outstanding at December 31, 2013 and December 31, 2012, respectively | 710 | 559 | |
Additional paid-in capital | 1,210,057 | 876,657 | |
Retained earnings | 3,513 | -2,761 | |
Accumulated other comprehensive income (loss), net of tax | 2,167 | -1,076 | |
Total equity | 1,216,447 | 873,379 | |
Total liabilities and equity | $7,310,672 | $3,578,059 | |
[1] | The expected maturity date is the date on which the revolving period ends under each advance facility note and repayment of the outstanding balance must begin if the note is not renewed or extended. |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Common stock, Par value | $0.01 | $0.01 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 71,016,771 | 55,884,718 |
Common stock, shares outstanding | 71,016,771 | 55,884,718 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Revenue | ' | ' | ' |
Interest income - notes receivable - Rights to MSRs | $235,826 | $47,445 | ' |
Interest income - other | 2,195 | 109 | ' |
Total interest income | 238,021 | 47,554 | ' |
Related party revenue | 1,811 | 2,316 | ' |
Total revenue | 239,832 | 49,870 | ' |
Operating expenses | ' | ' | ' |
Compensation and benefits | 5,825 | 3,751 | ' |
Related party expenses | 1,400 | 755 | ' |
General and administrative expenses | 4,645 | 1,644 | 273 |
Total operating expenses | 11,870 | 6,150 | 273 |
Income (loss) from operations | 227,962 | 43,720 | -273 |
Other expense | ' | ' | ' |
Interest expense | 110,071 | 24,057 | ' |
Total other expense | 110,071 | 24,057 | ' |
Income (loss) before income taxes | 117,891 | 19,663 | -273 |
Income tax expense | 234 | 46 | ' |
Net income (loss) | $117,657 | $19,617 | ($273) |
Earnings (loss) per share | ' | ' | ' |
Basic | $1.83 | $1.14 | ($13.66) |
Diluted | $1.83 | $1.14 | ($13.66) |
Weighted average ordinary shares outstanding | ' | ' | ' |
Basic | 64,132,383 | 17,230,858 | 20,000 |
Diluted | 64,132,383 | 17,230,858 | 20,000 |
Dividends declared per share | $1.70 | $1.45 | $0 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (Loss) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Net income (loss) | $117,657 | $19,617 | ($273) |
Other comprehensive income (loss), before tax: | ' | ' | ' |
Change in the value of designated cash flow hedges | 4,382 | -1,076 | 0 |
Total other comprehensive income (loss), before tax | 4,382 | -1,076 | 0 |
Income tax related to items of other comprehensive income (loss): | ' | ' | ' |
Tax expense on change in the value of designated cash flow hedges | 1,139 | ' | 0 |
Total income tax expense related to items of other comprehensive income (loss) | 1,139 | ' | 0 |
Total other comprehensive income (loss), net of tax | 3,243 | -1,076 | 0 |
Total comprehensive income (loss) | $120,900 | $18,541 | ($273) |
Consolidated_Statements_of_Cha
Consolidated Statements of Changes in Equity (USD $) | Total | Ordinary Shares | Additional Paid-in Capital | Retained Earnings (Restated) | Accumulated Other Comprehensive Income, net of tax |
In Thousands, except Share data | |||||
Balance at Dec. 31, 2010 | $282 | ' | $300 | ($18) | ' |
Balance (in shares) at Dec. 31, 2010 | ' | 20,000 | ' | ' | ' |
Net income (loss) | -273 | ' | ' | -273 | ' |
Other comprehensive income (loss), net of tax | 0 | ' | ' | ' | ' |
Balance at Dec. 31, 2011 | 9 | ' | 300 | -291 | ' |
Balance (in shares) at Dec. 31, 2011 | ' | 20,000 | ' | ' | ' |
Net income (loss) | 19,617 | ' | ' | 19,617 | ' |
Other comprehensive income (loss), net of tax | -1,076 | ' | ' | ' | -1,076 |
Issuance of ordinary shares, net of costs (in shares) | 55,864,718 | 55,864,718 | ' | ' | ' |
Issuance of ordinary shares, net of costs | 879,852 | 559 | 879,293 | ' | ' |
Declaration of cash dividends | -25,023 | ' | -2,936 | -22,087 | ' |
Balance at Dec. 31, 2012 | 873,379 | 559 | 876,657 | -2,761 | -1,076 |
Balance (in shares) at Dec. 31, 2012 | ' | 55,884,718 | ' | ' | ' |
Net income (loss) | 117,657 | ' | ' | 117,657 | ' |
Other comprehensive income (loss), net of tax | 3,243 | ' | ' | ' | 3,243 |
Issuance of ordinary shares, net of costs (in shares) | 15,132,053 | 15,132,053 | ' | ' | ' |
Issuance of ordinary shares, net of costs | 333,551 | 151 | 333,400 | ' | ' |
Declaration of cash dividends | -111,383 | ' | ' | -111,383 | ' |
Balance at Dec. 31, 2013 | $1,216,447 | $710 | $1,210,057 | $3,513 | $2,167 |
Balance (in shares) at Dec. 31, 2013 | ' | 71,016,771 | ' | ' | ' |
Consolidated_Statements_of_Cha1
Consolidated Statements of Changes in Equity (Parenthetical) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Declaration of cash dividends, per share | $1.70 | $1.45 | $0 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Cash flows from operating activities | ' | ' | ' |
Net income (loss) | $117,657 | $19,617 | ($273) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ' | ' | ' |
Amortization of debt issuance costs | 16,950 | 6,960 | ' |
Accretion of original issue discount on other borrowings | 386 | ' | ' |
Changes in assets and liabilities: | ' | ' | ' |
Decrease in match funded advances, net | 550,371 | 142,403 | ' |
(Increase) in debt service accounts | -36,134 | -52,990 | ' |
(Increase) in related party receivables | -42,951 | -28,271 | ' |
Increase in related party payables | 10,439 | 1,465 | 1,487 |
(Increase) decrease in other assets | -229 | -26 | 69 |
Increase (decrease) in other liabilities | 8,920 | 1,490 | -1,300 |
Net cash provided by (used in) operating activities | 625,409 | 90,648 | -17 |
Cash flows from investing activities | ' | ' | ' |
Purchase of Notes receivable - Rights to MSRs | -415,995 | -316,622 | ' |
Reduction in Notes receivable - Rights to MSRs | 79,849 | 20,171 | ' |
Acquisition of advances and other assets (net of liabilities assumed) in connection with the purchase of Notes receivable - Rights to MSRs | -3,842,536 | -2,902,151 | ' |
Net cash used in investing activities | -4,178,682 | -3,198,602 | ' |
Cash flows from financing activities | ' | ' | ' |
Proceeds from match funded liabilities, net | 3,024,800 | 2,332,486 | ' |
Proceeds from other borrowings | 344,750 | ' | ' |
Payment of other borrowings | -1,750 | ' | ' |
Payment of debt issuance costs | -28,794 | -10,808 | ' |
Proceeds from issuance of ordinary shares | 334,390 | 885,457 | ' |
Payment of offering costs | -839 | -5,099 | ' |
Payment of dividends to shareholders | -107,436 | -18,317 | ' |
Net cash provided by financing activities | 3,565,121 | 3,183,719 | ' |
Net increase (decrease) in cash and cash equivalents | 11,848 | 75,765 | -17 |
Cash and cash equivalents at beginning of year | 76,048 | 283 | 300 |
Cash and cash equivalents at end of year | 87,896 | 76,048 | 283 |
Supplemental cash flow information | ' | ' | ' |
Interest paid | 119,428 | 31,094 | ' |
Taxes paid | 499 | ' | ' |
Supplemental non-cash financing activities | ' | ' | ' |
Dividends declared but not paid | 10,653 | 6,706 | ' |
Offering costs accrued but not paid | ' | 506 | ' |
Debt issuance costs accrued but not paid | $44 | ' | ' |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Summary of Significant Accounting Policies | ' | ||||||||
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||
Organization | |||||||||
HLSS and its wholly owned subsidiaries are engaged in the business of acquiring Mortgage Servicing Assets. We do not originate mortgage loans, and as a result we are not subject to the risk of loss related to the origination of mortgage loans. We engaged Ocwen, a high quality residential mortgage loan servicer, to service the mortgage loans underlying our Mortgage Servicing Assets and therefore have not and do not intend to develop our own mortgage servicing platform. Our target is to distribute approximately 90% of our Net income over time to our shareholders in the form of a monthly cash dividend. | |||||||||
Basis of Presentation | |||||||||
We prepared the accompanying audited consolidated financial statements in conformity to US GAAP which requires that we make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Prior to our IPO on March 5, 2012 we were a developmental stage company. Therefore, our results for the years ended December 31, 2012 and 2011 do not reflect a full twelve months of operations and are not fully comparable to the results for the year ended December 31, 2013. | |||||||||
Principles of Consolidation | |||||||||
Our financial statements include the accounts of HLSS and its wholly owned subsidiaries, as well as two VIEs of which we are the primary beneficiary. We eliminate intercompany accounts and transactions in consolidation. | |||||||||
We evaluate each SPE for classification as a VIE. When a SPE meets the definition of a VIE and we determine that HLSS is the primary beneficiary, we include the SPE in our Consolidated Financial Statements. | |||||||||
Our Match funded advances are in two SPEs along with related Match funded liabilities. We determined that these SPEs are VIEs of which we are the primary beneficiaries. The accounts of these SPEs are included in our Consolidated Financial Statements. | |||||||||
Match funded advances on loans serviced for others result from our transfers of residential loan servicing advances to SPEs in exchange for cash. The SPEs issue debt supported by collections on the transferred advances. We made these transfers under the terms of our advance facility agreements. These transfers do not qualify for sale accounting because we retain control over the transferred assets. As a result, we account for these transfers as financings and classify the transferred advances on our Consolidated Balance Sheet as Match funded advances and the related liabilities as Match funded liabilities. We use collections on the advances pledged to the SPEs to repay principal and to pay interest and the expenses of each entity. Holders of the debt issued by each entity can look only to the assets of the entity itself for satisfaction of the debt and have no recourse against HLSS. We did not provide financial or other support to our SPEs during the current fiscal period, nor are we required to under the terms of our advance facility agreements. | |||||||||
The following table summarizes the assets and liabilities of the SPEs formed in connection with our current Match funded advance facilities, at the dates indicated: | |||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
Match funded advances | $ | 6,387,781 | $ | 3,098,198 | |||||
Related party receivables (1) | 60,239 | 21,265 | |||||||
Other assets (2) | 119,902 | 77,110 | |||||||
Total assets | $ | 6,567,922 | $ | 3,196,573 | |||||
Match funded liabilities | $ | 5,715,622 | $ | 2,690,821 | |||||
Other liabilities | 4,673 | 2,203 | |||||||
Total liabilities | $ | 5,720,295 | $ | 2,693,024 | |||||
-1 | Relates to collections made by Ocwen on outstanding Match funded advances. This receivable represents the portion of Match funded advance collections that were in-transit to pay down our Match funded liabilities as of December 31, 2013 and 2012. See Note 14 for more information about our Related party receivables. | ||||||||
-2 | Other assets principally include debt service accounts and debt issuance costs. See Note 5 for more information about our Other assets. | ||||||||
Cash and Cash Equivalents | |||||||||
Cash and cash equivalents include interest-bearing demand deposits with financial institutions with original maturities of 90 days and less. There were no restrictions on the use of our cash and cash equivalents balances as of December 31, 2013 and 2012. | |||||||||
Servicing Activities and Match Funded Advances | |||||||||
As part of our agreements with Ocwen, we are obligated to purchase the servicing advances made by Ocwen pursuant to the PSAs related to any Acquired Mortgage Servicing Rights. Servicing advances serve as collateral under the terms of our advance facilities and therefore we classify the servicing advances we purchase from Ocwen as “Match funded advances”. | |||||||||
Residential mortgage loan servicers manage the billing, collections and loss mitigation activities associated with mortgage loans that are originated by banks or other lenders. Servicers send borrowers monthly account statements, collect monthly mortgage payments, remit such payments to the owner of the mortgage loan, answer customer service inquiries and maintain custodial accounts to hold borrower payments of principal and interest and amounts received from borrowers to pay real estate taxes and insurance with respect to the properties securing the mortgage loans and pay such real estate taxes and insurance premiums from the custodial accounts. A servicer will also remit collections on the mortgage loans from the custodial accounts to the trustee of the applicable securitization trust to make payments on the related mortgage-backed securities and prepare and deliver monthly and annual reports to the trustee. A servicer may also be required to advance its own funds to cover shortfalls in collections of principal and interest from borrowers, to pay property and casualty insurance premiums and real estate taxes on a property and to cover the costs associated with protecting or foreclosing on a property. If borrowers become delinquent on loans, the servicer generally may conduct loss mitigation activities to reduce loan delinquencies and losses by working with borrowers to collect payments and modify loans or enforce the lenders’ remedies, which may include initiating foreclosure procedures and selling the properties. | |||||||||
Match funded advances generally fall into one of three categories: | |||||||||
• | “Principal and Interest Advances” are cash payments made by the servicer to the owner of the mortgage loan to cover scheduled payments of principal and interest on a mortgage loan that have not been paid on a timely basis by the borrower. | ||||||||
• | “Taxes and Insurance Advances” are cash payments made by the servicer to third parties on behalf of the borrower for real estate taxes and insurance premiums on the property that have not been paid on a timely basis by the borrower. | ||||||||
• | “Corporate Advances” are cash payments made by the servicer to third parties for the costs and expenses incurred in connection with the foreclosure, preservation and sale of the mortgaged property, including attorneys’ and other professional fees. | ||||||||
Match funded advances are usually reimbursed from amounts received with respect to the related mortgage loan, including payments from the borrower or amounts received from the liquidation of the property securing the loan which is referred to as “loan level recovery.” Servicers generally have the right to cease making servicing advances on a loan if they determine that advances are not recoverable at the loan level. With respect to the Rights to MSRs that we own, Ocwen makes this determination in accordance with its stop advance policy. In the event that loan level recovery is not sufficient to reimburse the servicer in full for servicing advances made with respect to a mortgage loan, most of our PSAs provide that the servicer is entitled to be reimbursed from collections received with respect to other loans in the same securitized mortgage pool which is referred to as “pool level recovery”. We do not receive interest on Match funded advances. | |||||||||
We may record a charge to earnings to the extent that we believe Match funded advances are uncollectible (we recorded no such charges for the years ended December 31, 2013, 2012 and 2011) under the provisions of each servicing contract taking into consideration the projected collections under the applicable loan or pool relative to the Match funded advances outstanding and the projected future Match funded advances. However, the servicer is generally only obligated to advance funds to the extent that it believes the advances are recoverable from expected proceeds from the loan. We assess collectability using proprietary cash flow projection models which incorporate a number of different factors, depending on the characteristics of the mortgage loan or pool, including, for example, time to a foreclosure sale, estimated costs of foreclosure action, future property tax payments and the value of the underlying property net of carrying costs, commissions and closing costs. | |||||||||
Notes Receivable – Rights to MSRs and Interest Income | |||||||||
In connection with our purchase of the Rights to MSRs we received all the rights and rewards of ownership of mortgage servicing rights absent the necessary approvals required to allow us to become the named servicer under the applicable PSAs. ASC 860, Transfers and Servicing, specifically prohibits accounting for a transfer of servicing rights as a sale if legal title to such servicing rights has not passed to the purchaser. As a result, we are required to account for the purchase of the Rights to MSRs as a financing transaction. We initially recorded the Notes receivable – Rights to MSRs at the purchase price of the Rights to MSRs. At each reporting date, we determine the fair value and adjust the carrying value of the Notes receivable – Rights to MSRs to this amount. | |||||||||
Interest income – Notes Receivable – Rights to MSRs represents the servicing fees earned on the underlying mortgage servicing rights less any amounts due to Ocwen for the servicing activities that it performs. In addition, Interest income – Notes Receivable – Rights to MSRs is reduced by amortization of the Notes Receivable – Rights to MSRs, calculated using the interest method of accounting, and is increased or decreased by incremental changes in the fair value of the Note Receivable – Rights to MSRs. Interest Income is our primary source of income. See Note 10 for more information about how we calculate Interest income – notes receivable – Rights to MSRs. | |||||||||
Servicing Fees, Base Fees, Ancillary Income and Performance Based Incentive Fees | |||||||||
Ocwen is the named servicer for the mortgage loans underlying the Rights to MSRs, and receives the servicing fees associated with the mortgage servicing rights; however, Ocwen pays these servicing fees to us under the terms of the Purchase Agreement and related sale supplements specific to each asset purchase. We pay Ocwen a monthly base fee equal to 12% of the servicing fees collected each month. The monthly base fee payable to Ocwen varies from month to month based on the level of collections of principal and interest for the mortgage loans serviced. Ocwen also receives a performance based incentive fee to the extent the Servicing fee revenue that it collects for any given month exceeds the sum of the monthly base fee and the retained fee. | |||||||||
The amount, as expressed in terms of basis points of the average UPB of the mortgage loans serviced, used to calculate the retained fee is a contractually agreed upon amount. If we do not receive an amount equal to the retained fee in any given month, as expressed in terms of basis points of the average UPB of the mortgage loans serviced, this creates a shortfall in our targeted gross servicing margin. Should this occur, Ocwen will not earn a performance based incentive fee for any month that there is such a shortfall, or in any subsequent month, until we have recovered such shortfall from amounts that would otherwise be available to pay future performance based incentive fees to Ocwen. | |||||||||
As determined by the terms of the Sale Supplement with respect to each mortgage servicing right, the performance based incentive fee payable in any month will be reduced by an amount equal to one month LIBOR + 275 bps per annum of the amount of any such excess servicing advances if the advance ratio exceeds a predetermined level for that month. | |||||||||
Derivative Financial Instruments | |||||||||
We are party to interest rate swap agreements that we recognize on our Consolidated Balance Sheet at fair value within other assets and other liabilities. On the date we entered into our interest rate swap agreements, we designated and documented them as hedges of the variable cash flows payable for floating rate interest expense on our borrowings (cash flow hedge). To qualify for hedge accounting, a derivative must be highly effective at reducing the risk associated with the hedged exposure. In addition, the documentation must include the risk management objective and strategy. We assess and document quarterly the derivatives’ effectiveness and expected effectiveness in offsetting the changes in the fair value or the cash flows of the hedged items. To assess effectiveness, we use statistical methods, such as regression analysis, as well as nonstatistical methods including dollar-offset analysis. For a cash flow hedge, to the extent that it is effective, we record changes in the estimated fair value of the derivative in accumulated other comprehensive income (“AOCI”.) We subsequently reclassify these changes in estimated fair value to Net income in the same period, or periods, that the hedged transaction affects earnings and in the same financial statement category as the hedged item. | |||||||||
If a derivative instrument in a cash flow hedge is terminated or the hedge designation is removed, we reclassify related amounts in AOCI into earnings in the same period or periods during which the cash flows that were hedged affect earnings. In a period where we determine that it is probable that a hedged forecasted transaction will not occur, such as variable-rate interest payments on debt that has been repaid in advance, any related amounts in AOCI are reclassified into earnings in that period. | |||||||||
We do not apply offsetting as part of our accounting for derivative assets and liabilities and the related collateral amounts. | |||||||||
See Notes 3 and 9 for additional information regarding our interest rate swap agreements. | |||||||||
Match Funded Liabilities | |||||||||
Substantially all of our outstanding Match funded advances are pledged to advance financing facilities. Match funded liabilities are a form of non-recourse debt that are collateralized by our Match funded advances. Our Match funded liability balance is driven primarily by the level of servicing advances and the advance borrowing rate which is defined as the collateral value of servicing advances divided by total servicing advances. The advance borrowing rates which are different for each type of six advance types were set at levels that enabled each class of notes issued pursuant to the advance financing facilities to meet rating agency criteria. In addition, we are able to pledge deferred servicing fees as collateral for our Match funded liabilities. | |||||||||
Under the terms of the related indenture, the SPEs created in connection with the Advance Facilities are subject to various qualitative and quantitative covenants. We believe that we are currently in compliance with the following covenants: | |||||||||
• | Restrictions on future investments and indebtedness; | ||||||||
• | Restrictions on sale or assignment of Match funded advances; and | ||||||||
• | Monitoring and reporting of various specified transactions or events, including specific reporting on defined events affecting collateral underlying the indenture. | ||||||||
See Note 6 for additional information regarding our Match funded liabilities. | |||||||||
Other Borrowings | |||||||||
On June 27, 2013, we entered into a senior secured term loan facility. The senior term loan facility was issued at a discount to par, and this original issue discount is being accreted into Interest expense over the life of the facility. See Note 7 for additional information regarding our Other borrowings. | |||||||||
Interest Income – Other | |||||||||
Interest income – Other consists of interest we earn on our operating bank accounts and the custodial account balances related to the mortgage loans serviced which are not included in our Consolidated Balance Sheets. When we acquire Notes receivable – Rights to MSRs, we also acquire the right to earn interest income on all custodial account balances associated with the related PSAs. | |||||||||
Related Party Revenue | |||||||||
Related party revenue consists of amounts due to us from Ocwen under the terms of the Ocwen Professional Services Agreement. Under the Ocwen Professional Services Agreement, we receive revenue for providing certain services to Ocwen which includes valuation and analysis of mortgage servicing rights, capital markets activities, advance financing management, treasury management, legal services and other similar services. We recognize revenue under the Ocwen Professional Services Agreement based on actual costs incurred plus an additional markup of 15%. See Note 14 for more information regarding our related party transactions. | |||||||||
Operating Expenses | |||||||||
Our operating expenses consist largely of Compensation and benefits for our employees. In addition, we incur General and administrative expenses for facilities, technology, communication and other expenses typical of public companies, including audit, legal and other professional fees. | |||||||||
Related Party Expenses | |||||||||
Related party expenses consist of administrative services pursuant to the Altisource Administrative Services Agreement and the services provided by Ocwen to us under the Ocwen Professional Services Agreement. See Note 14 for more information regarding our related party transactions. | |||||||||
Interest Expense | |||||||||
We primarily finance servicing advances with Match funded liabilities that accrue interest. Interest expense also includes interest incurred on our Other borrowings, amortization of debt issuance costs and net interest payable on our interest rate swaps. | |||||||||
Interest expense is sensitive to the Match funded advance balance which is driven primarily by the delinquency rates and amount of UPB serviced. The speed at which delinquent loans are resolved affects our Interest expense. For example, slower resolution of delinquencies will result in higher servicing advance balances and higher Interest expense. In order to mitigate the Interest expense impact of higher servicing advance balances, we reduce the performance based servicing fee payable to Ocwen in any month in which the advance ratio exceeds a predetermined level for that month. Periodic issuances of fixed rate term notes also protect us from the risk of rising interest rates. We earn Interest income at market interest rates on the custodial account balances related to the mortgage loans serviced which are not included in our Consolidated Balance Sheets. Lastly, we use interest rate swaps to hedge a portion of our variable interest rate exposure. See Notes 3 and 9 for additional information regarding our interest rate swap agreements. | |||||||||
Income Taxes | |||||||||
We were incorporated as an exempted company in the Cayman Islands which currently does not levy income taxes on individuals or companies. We expect to be treated as a PFIC under U.S. federal income tax laws with respect to our investing activities. With the exception of our U.S. subsidiaries, we do not expect to be treated as engaged in a trade or business in the U.S. and thus do not expect to be subject to U.S. federal income taxation on the majority of our earnings. | |||||||||
We account for income taxes using the asset and liability method which requires the recognition of Deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. See Note 12 for more information regarding our Income taxes. | |||||||||
Basic and Diluted Earnings Per Share | |||||||||
We calculate basic earnings per share by dividing Net income or loss by the weighted average number of ordinary shares outstanding for the year. We calculate diluted earnings per share based upon the weighted average number of ordinary shares outstanding and all dilutive potential ordinary shares outstanding during the year. For the years ended December 31, 2013, 2012 and 2011, there were no ordinary share equivalents or other securities that could potentially dilute basic earnings per share. | |||||||||
Dividends | |||||||||
When our Board of Directors declares cash dividends, we record a payable and charge Retained earnings for the total amount of the dividends declared. If we lack sufficient Retained earnings to pay the full amount of dividends declared we charge the excess amount to Additional paid-in capital. | |||||||||
Recent Accounting Pronouncements | |||||||||
Accounting Standards Update (“ASU”) ASU 2012-04. This ASU makes technical corrections and improvements to a variety of topics in the Codification. The changes include source literature amendments, guidance clarification, reference corrections and relocated guidance. The ASU also includes conforming amendments to the Codification to reflect ASC 820’s fair value measurement and disclosure requirements. Our adoption of this standard effective January 1, 2013, did not have a material impact on our Consolidated Financial Statements. | |||||||||
ASU 2013-01. This ASU limits the scope of the new balance sheet offsetting disclosure requirements to derivatives (including bifurcated embedded derivatives), repurchase agreements and reverse repurchase agreements, and securities borrowing and lending transactions. Our adoption of this standard effective January 1, 2013, did not have a material impact on our Consolidated Financial Statements. | |||||||||
ASU 2013-02. This ASU enhances the reporting of reclassifications out of AOCI. The ASU sets requirements for presentation for significant items reclassified to Net income in their entirety during the period and for items not reclassified to Net income in their entirety during the period. It requires companies to present information about reclassifications out of AOCI in one place. It also requires companies to present reclassifications by component when reporting changes in AOCI balances. Our adoption of this standard effective January 1, 2013, did not have a material impact on our Consolidated Financial Statements. | |||||||||
ASU 2013-10. This ASU permits the Fed Funds Effective Swap Rate to be used as a U.S. benchmark interest rate for hedge accounting purposes, as an alternative to interest rates on direct Treasury obligations of the U.S. government or LIBOR. This standard is effective prospectively for qualifying new or redesignated hedging relationships entered into on or after July 17, 2013. Our adoption of this standard effective July 17, 2013 did not have a material impact on our Consolidated Financial Statements. | |||||||||
ASU 2013-11. This ASU provides explicit guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss (“NOL”) carryforward, a similar tax loss or a tax credit exists. Previously, there was diversity in practice, and this ASU is expected to eliminate that diversity in practice. The amendments in this update are effective for fiscal years and interim periods within those periods beginning after December 15, 2013. We do not expect that the adoption of this standard on January 1, 2014 will have a material impact on our Consolidated Financial Statements. |
Assets_Acquired_and_Liabilitie
Assets Acquired and Liabilities Assumed | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Assets Acquired and Liabilities Assumed | ' | ||||||||||||
2. ASSETS ACQUIRED AND LIABILITIES ASSUMED | |||||||||||||
During the year ended December 31, 2013, we made asset purchases from Ocwen on March 13, 2013 (“Flow 3”), May 21, 2013 (“Flow 4”), July 1, 2013 (“Follow On 3”) and October 25, 2013 (“Flow 5”) of Rights to MSRs for mortgage loans with approximately $15.9 billion, $10.6 billion, $83.3 billion and $9.9 billion respectively, of UPB together with the related servicing advances. | |||||||||||||
The following table summarizes the purchase price of the assets we acquired from Ocwen during the year ended December 31, 2013 and reconciles the cash used to acquire such assets: | |||||||||||||
Notes receivable – Rights to MSRs | $ | 417,167 | |||||||||||
Match funded advances (1) | 3,839,954 | ||||||||||||
Purchase price | 4,257,121 | ||||||||||||
Cash paid to settle previous post-close adjustments | 1,410 | ||||||||||||
Total cash used | $ | 4,258,531 | |||||||||||
Sources: | |||||||||||||
Cash on-hand | $ | 807,268 | |||||||||||
Match funded liabilities | $ | 3,451,263 | |||||||||||
-1 | The cash used to purchase these assets are shown within the “Acquisition of advances and other assets (net of liabilities assumed) in connection with the purchase of Notes receivable – Rights to MSRs” of the Consolidated Statement of Cash Flows. | ||||||||||||
Below is a summary of the purchases we made from Ocwen during the year ended December 31, 2012: | |||||||||||||
On March 5, 2012, we used a portion of the net proceeds from our IPO to complete the Initial Acquisition: | |||||||||||||
• | The contractual right to receive the servicing fees related to mortgage servicing rights with respect to 116 PSAs with UPB of approximately $15.2 billion; | ||||||||||||
• | The outstanding servicing advances associated with the related PSAs; and | ||||||||||||
• | Other assets related to the foregoing (collectively, the forgoing represent the Initial Acquisition). | ||||||||||||
We completed the Initial Acquisition pursuant to the Purchase Agreement and a related sale supplement, each dated February 10, 2012. We also assumed a related match funded servicing advance financing facility from Ocwen effective upon the closing of the Initial Acquisition. The purchase price for the Rights to MSRs was based on the value of such assets at the time HLSS entered into the Purchase Agreement and the estimated outstanding UPB of the underlying mortgage loans at closing. The purchase price for the associated servicing advances and other assets was equal to the net consolidated book value which approximated fair value, as of the purchase date of all assets and liabilities of the special purpose entities established in connection with the advance financing facility that owns these servicing advances. On March 31, 2012, HLSS and Ocwen agreed to a final purchase price of $138,792. | |||||||||||||
We made five additional asset purchases from Ocwen on May 1st, August 1st, September 13th, September 28th and December 26th, 2012 of Rights to MSRs for mortgage loans with approximately $67.5 billion of UPB together with the related servicing advances. These five asset purchases were all completed pursuant to the Purchase Agreement and sale supplement specific to each asset purchase and only included the purchase of Rights to MSRs and servicing advances. No other assets were acquired, nor were any liabilities assumed from Ocwen. | |||||||||||||
The following table summarizes the purchase price of the assets we acquired and liabilities we assumed from Ocwen during 2012 and reconciles the cash used to acquire such assets and assume such liabilities: | |||||||||||||
Initial | Subsequent | Total | |||||||||||
Purchase | Purchases | ||||||||||||
Notes receivable – Rights to MSRs | $ | 62,458 | $ | 254,164 | $ | 316,622 | |||||||
Match funded advances (1) | — | 2,827,227 | 2,827,227 | ||||||||||
Purchase of Advance SPE: | |||||||||||||
Match funded advances (1) | 413,374 | — | 413,374 | ||||||||||
Other assets (1) | 22,136 | — | 22,136 | ||||||||||
Match funded liabilities (1) | (358,335 | ) | — | (358,335 | ) | ||||||||
Other liabilities (1) | (841 | ) | — | (841 | ) | ||||||||
Net assets of Advance SPE | 76,334 | — | 76,334 | ||||||||||
Purchase price, as adjusted | 138,792 | 3,081,391 | 3,220,183 | ||||||||||
Amount due to Ocwen for post-closing adjustments | — | (1,410 | ) | (1,410 | ) | ||||||||
Total cash used | $ | 138,792 | $ | 3,079,981 | $ | 3,218,773 | |||||||
Sources: | |||||||||||||
Cash on-hand | $ | 138,792 | $ | 685,654 | $ | 824,446 | |||||||
Match funded liabilities | $ | — | $ | 2,394,327 | $ | 2,394,327 | |||||||
-1 | The cash used to purchase these assets and assume these liabilities are shown net within the “Acquisition of advances and other assets (net of liabilities assumed) in connection with the purchase of Notes receivable – Rights to MSRs” of the Consolidated Statement of Cash Flows. |
Fair_Value_of_Financial_Instru
Fair Value of Financial Instruments | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Fair Value of Financial Instruments | ' | ||||||||||||||||
3. FAIR VALUE OF FINANCIAL INSTRUMENTS | |||||||||||||||||
We estimate fair value based on a hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The fair value hierarchy prioritizes the inputs to valuation techniques into three broad levels and gives the highest priority to Level 1 inputs and the lowest to Level 3 inputs. | |||||||||||||||||
The three broad categories are: | |||||||||||||||||
• | Level 1: Quoted prices in active markets for identical assets or liabilities; | ||||||||||||||||
• | Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument; and | ||||||||||||||||
• | Level 3: Unobservable inputs for the asset or liability. | ||||||||||||||||
Where available, we utilize quoted market prices or observable inputs rather than unobservable inputs to determine fair value. We classify assets and liabilities in their entirety based on the lowest level of input that is significant to the fair value measurement. | |||||||||||||||||
We describe the methodologies that we used and key assumptions that we made to assess the fair value of our financial instruments in more detail below: | |||||||||||||||||
Notes Receivable – Rights to MSRs | |||||||||||||||||
We established the fair value of the Notes receivable – Rights to MSRs based on an appraisal prepared with the assistance of an independent valuation firm. This appraisal is prepared on a quarterly basis. Significant inputs into the valuation include the following: | |||||||||||||||||
• | Discount rates reflecting the risk of earning the future income streams from the Notes receivable – Rights to MSRs ranging from 15% to 22%; | ||||||||||||||||
• | Interest rate used for calculating the cost of servicing advances of 1-Month LIBOR + 3.75%; | ||||||||||||||||
• | Mortgage loan prepayment projections ranging from 12% to 28% of the related mortgage lifetime projected prepayment rate; and | ||||||||||||||||
• | Delinquency rate projections ranging from 15% to 35% of the aggregate UPB of the underlying mortgage loans. | ||||||||||||||||
The independent valuation firm reviewed the collateral attributes and the historical payment performance of the underlying mortgage servicing portfolio and compared them with similar mortgage servicing portfolios and with standard industry mortgage performance benchmarks to arrive at the assumptions set forth above. The selected collateral attributes and performance comparisons utilized were the voluntary prepayment performance, delinquency and foreclosure performance, operational cost comparison, average loan balance, weighted average coupon and note rate distribution, loan product type classification, geographic distribution and servicing advance behavior. | |||||||||||||||||
The unobservable inputs that have the most significant effect on the fair value of Notes receivable – Rights to MSRs are the mortgage loan prepayment rate projections and delinquency rate projections; however, any significant increase (decrease) in discount rates, interest rates, mortgage loan prepayment projections or delinquency rate projections, each in isolation, would result in a substantially lower (higher) valuation. | |||||||||||||||||
Derivative Financial Instruments | |||||||||||||||||
Our derivatives are not exchange-traded, and therefore quoted market prices or other observable inputs are not available. The fair value of our interest rate swap agreements are based on certain information provided by third-party pricing sources. Third-party valuations are derived from proprietary models based on inputs that include yield curves and contractual terms such as fixed interest rates and payment dates. We have not adjusted the information obtained from the third-party pricing sources; however, we review this information to ensure that it provides a reasonable basis for estimating fair value. Our review is designed to identify information that appears stale, information that has changed significantly from the prior period, and other indicators that the information may not be accurate. We determined that potential credit and counterparty risks had an immaterial impact on the valuation of our derivatives. See Notes 1 and 9 for additional information on our derivative financial instruments. | |||||||||||||||||
The following tables present assets and liabilities measured at fair value on a recurring basis categorized by input level within the fair value hierarchy: | |||||||||||||||||
Fair value | Level 1 | Level 2 | Level 3 | ||||||||||||||
At December 31, 2013: | |||||||||||||||||
Measured at fair value on a recurring basis: | |||||||||||||||||
Assets: | |||||||||||||||||
Notes receivable – Rights to MSRs | $ | 633,769 | $ | — | $ | — | $ | 633,769 | |||||||||
Derivative financial instruments | 3,835 | — | — | 3,835 | |||||||||||||
Total assets | $ | 637,604 | $ | — | $ | — | $ | 637,604 | |||||||||
Liabilities: | |||||||||||||||||
Derivative financial instruments | $ | 529 | $ | — | $ | — | $ | 529 | |||||||||
Total liabilities | $ | 529 | $ | — | $ | — | $ | 529 | |||||||||
Fair value | Level 1 | Level 2 | Level 3 | ||||||||||||||
At December 31, 2012: | |||||||||||||||||
Measured at fair value on a recurring basis: | |||||||||||||||||
Assets: | |||||||||||||||||
Notes receivable – Rights to MSRs | $ | 296,451 | $ | — | $ | — | $ | 296,451 | |||||||||
Total assets | $ | 296,451 | $ | — | $ | — | $ | 296,451 | |||||||||
Liabilities: | |||||||||||||||||
Derivative financial instruments | $ | 1,076 | $ | — | $ | — | $ | 1,076 | |||||||||
Total liabilities | $ | 1,076 | $ | — | $ | — | $ | 1,076 | |||||||||
The following table presents reconciliations of the changes in fair value of our Level 3 assets and liabilities which we measure at fair value on a recurring basis: | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
For the years ended December 31, | Notes | Derivative | Notes | Derivative | |||||||||||||
receivable – | Financial | receivable – | Financial | ||||||||||||||
Rights to | Instruments | Rights to | Instruments | ||||||||||||||
MSRs | MSRs | ||||||||||||||||
Beginning balance | $ | 296,451 | $ | (1,076 | ) | $ | — | $ | — | ||||||||
Purchases and reductions: | |||||||||||||||||
Purchases | 417,167 | — | 316,622 | — | |||||||||||||
Reductions | (79,849 | ) | — | (20,171 | ) | — | |||||||||||
337,318 | — | 296,451 | — | ||||||||||||||
Changes in fair value : | |||||||||||||||||
Included in other comprehensive income(loss) (1) | — | 4,382 | — | (1,076 | ) | ||||||||||||
— | 4,382 | — | (1,076 | ) | |||||||||||||
Transfers in or out of Level 3 | — | — | — | — | |||||||||||||
Ending balance | $ | 633,769 | $ | 3,306 | $ | 296,451 | $ | (1,076 | ) | ||||||||
-1 | These pre-tax gains (losses) are attributable to derivatives still held at December 31, 2013 and 2012. | ||||||||||||||||
The following tables show the effect on the fair value of the Notes receivable – Rights to MSRs assuming adverse changes to certain key assumptions used in valuing these assets at December 31, 2013 and 2012: | |||||||||||||||||
Discount Rates | Prepayment Speeds | Delinquency Rates | |||||||||||||||
100 bps adverse change | 10% adverse change | 10% adverse change | |||||||||||||||
December 31, 2013 | |||||||||||||||||
Notes receivable – Rights to MSRs | $ | (12,988 | ) | $ | (22,537 | ) | $ | (72,560 | ) | ||||||||
Discount Rates | Prepayment Speeds | Delinquency Rates | |||||||||||||||
100 bps adverse change | 10% adverse change | 10% adverse change | |||||||||||||||
December 31, 2012 | |||||||||||||||||
Notes receivable – Rights to MSRs | $ | (6,049 | ) | $ | (9,715 | ) | $ | (39,628 | ) | ||||||||
This sensitivity analysis above assumes a change is made to one key input, while holding all other inputs constant. As many of these inputs are correlated, a change in one input will likely impact other inputs which would ultimately impact the overall valuation. | |||||||||||||||||
The following tables provide more quantitative information on our significant inputs used for valuing our Note Receivable – Rights to MSRs at December 31, 2013 and 2012: | |||||||||||||||||
At December 31, 2013: | |||||||||||||||||
Asset | Unobservable Input | Low | High | Weighted | |||||||||||||
Average | |||||||||||||||||
Notes receivable – Rights to MSRs | Discount Rates | 15 | % | 22 | % | 20 | % | ||||||||||
Prepayment Speeds | 12 | % | 28 | % | 19 | % | |||||||||||
Delinquency Rates | 15 | % | 35 | % | 25 | % | |||||||||||
At December 31, 2012: | |||||||||||||||||
Asset | Unobservable Input | Low | High | Weighted | |||||||||||||
Average | |||||||||||||||||
Notes receivable – Rights to MSRs | Discount Rates | 15 | % | 22 | % | 20 | % | ||||||||||
Prepayment Speeds | 12 | % | 27 | % | 19 | % | |||||||||||
Delinquency Rates | 15 | % | 35 | % | 29 | % | |||||||||||
Presented below are the December 31, 2013 and 2012 carrying values and fair value estimates of financial instruments not carried at fair value: | |||||||||||||||||
December 31, | December 31, | December 31, | December 31, | ||||||||||||||
2013 | 2013 | 2012 | 2012 | ||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||||
Financial assets: | |||||||||||||||||
Match funded advances | $ | 6,387,781 | $ | 6,387,781 | $ | 3,098,198 | $ | 3,098,198 | |||||||||
Total financial assets | $ | 6,387,781 | $ | 6,387,781 | $ | 3,098,198 | $ | 3,098,198 | |||||||||
Financial liabilities: | |||||||||||||||||
Match funded liabilities | $ | 5,715,622 | $ | 5,700,934 | $ | 2,690,821 | $ | 2,697,840 | |||||||||
Other borrowings | 343,386 | 346,391 | — | — | |||||||||||||
Total financial liabilities | $ | 6,059,008 | $ | 6,047,325 | $ | 2,690,821 | $ | 2,697,840 | |||||||||
Match Funded Advances | |||||||||||||||||
The carrying value of our Match funded advances approximates fair value. This is because our Match funded advances have no stated maturity, generally are realized within a relatively short period of time and do not bear interest. The fair value measurements for Match funded advances are categorized as Level 3. | |||||||||||||||||
Match Funded Liabilities | |||||||||||||||||
Match funded liabilities include variable and fixed rate liabilities. The fair value estimate of the Company’s fixed rate liabilities was determined by using broker quotes. We concluded that no adjustments were required to the quoted prices. All other Match funded liabilities are short term in nature and the carrying value generally approximates the fair value. The fair value measurements for Match funded liabilities are categorized as Level 3. | |||||||||||||||||
Other Borrowings | |||||||||||||||||
Other borrowings include our senior secured term loan facility. The fair value estimate of the Company’s senior secured term loan facility was determined by using broker quotes. We concluded that no adjustments were required to the quoted price. The fair value measurements for Other borrowings are categorized as Level 3. |
Match_Funded_Advances
Match Funded Advances | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Match Funded Advances | ' | ||||||||
4. MATCH FUNDED ADVANCES | |||||||||
Match funded advances on residential loans we service for others, as more fully described in Note 1 – Principles of Consolidation are comprised of the following at the dates indicated: | |||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
Principal and interest advances | $ | 2,632,092 | $ | 1,231,471 | |||||
Taxes and insurance advances | 2,723,390 | 1,399,813 | |||||||
Corporate advances | 1,032,299 | 466,914 | |||||||
$ | 6,387,781 | $ | 3,098,198 | ||||||
Other_Assets
Other Assets | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Other Assets | ' | ||||||||
5. OTHER ASSETS | |||||||||
Other assets consisted of the following at the dates indicated: | |||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
Debt service accounts (1) | $ | 103,910 | $ | 67,776 | |||||
Debt issuance costs (2) | 21,165 | 9,278 | |||||||
Interest-earning collateral deposits (3) | 1,075 | 1,904 | |||||||
Derivative financial instruments (4) | 3,835 | — | |||||||
Other | 168 | 133 | |||||||
$ | 130,153 | $ | 79,091 | ||||||
-1 | Under our advance financing facilities, we are contractually required to remit collections on pledged advances to the trustee within two days of receipt. We do not use the collected funds to reduce the related Match funded liabilities until the payment dates specified in the indenture. The balance also includes amounts that we set aside to provide for possible shortfalls in the funds available to pay certain expenses and interest. | ||||||||
-2 | Costs relate to Match funded liabilities and Other borrowings. We amortize these costs to the earlier of the scheduled amortization date, contractual maturity date or prepayment date of the debt. | ||||||||
-3 | Represents cash collateral held by our counterparty as part of our interest rate swap agreements. | ||||||||
-4 | See Notes 1, 3 and 9 for more information regarding our use of derivatives. |
Match_Funded_Liabilities
Match Funded Liabilities | 12 Months Ended | ||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||
Match Funded Liabilities | ' | ||||||||||||||||||||||
6. MATCH FUNDED LIABILITIES | |||||||||||||||||||||||
Match funded liabilities, as more fully described in Note 1 – Principles of Consolidation are comprised of the following at the dates indicated: | |||||||||||||||||||||||
Balance Outstanding | |||||||||||||||||||||||
Borrowing Type (1) | Interest Rate (2) | Maturity (3) | Amortization | Unused | December 31, | December 31, | |||||||||||||||||
Date (3) | Borrowing | 2013 (6-10) | 2012 | ||||||||||||||||||||
Capacity (4) | |||||||||||||||||||||||
Series 2012 T1 Term Notes | 134 – 396 bps | Oct. 2043 | Oct. 2013 | $ | — | $ | — | $ | 250,000 | ||||||||||||||
Series 2012 T2 Term Notes | 199 – 494 bps | Oct. 2045 | Oct. 2015 | — | 450,000 | 450,000 | |||||||||||||||||
Series 2013 T1 Term Notes | 90 – 249 bps | Jan. 2044 | Jan. 2014 | — | 650,000 | — | |||||||||||||||||
Series 2013 T1 Term Notes | 150 – 323 bps | Jan. 2046 | Jan. 2016 | — | 350,000 | — | |||||||||||||||||
Series 2013 T1 Term Notes | 229 – 446 bps | Jan. 2048 | Jan. 2018 | — | 150,000 | — | |||||||||||||||||
Series 2013 T2 Term Notes | 115 – 239 bps | May 2044 | May 2015 | — | 375,000 | — | |||||||||||||||||
Series 2013 T3 Term Notes | 179 – 313 bps | May-46 | May-17 | — | 475,000 | — | |||||||||||||||||
Series 2013 T4 Term Notes | 118 – 232 bps | Aug-44 | Aug-14 | — | 200,000 | — | |||||||||||||||||
Series 2013 T5 Term Notes | 198 – 331 bps | Aug-46 | Aug-16 | — | 200,000 | — | |||||||||||||||||
Series 2013 T6 Term Notes | 129 – 223 bps | Sep-44 | Sep-14 | — | 350,000 | — | |||||||||||||||||
Series 2013 T7 Term Notes | 198 – 302 bps | Nov-46 | Nov-16 | — | 300,000 | — | |||||||||||||||||
Series 2012 VF 1 Notes (5) | 1-Month LIBOR | Aug. 2044 | Aug. 2014 | 230,950 | 469,050 | 339,465 | |||||||||||||||||
+ 110 – 340 bps | |||||||||||||||||||||||
Series 2012 VF 2 Notes (5) | 1-Month LIBOR | Aug. 2044 | Aug. 2014 | 230,950 | 469,050 | 678,928 | |||||||||||||||||
+ 110 – 340 bps | |||||||||||||||||||||||
Series 2012 VF 3 Notes (5) | 1-Month LIBOR | Aug. 2044 | Aug. 2014 | 230,950 | 469,050 | 678,928 | |||||||||||||||||
+ 110 – 340 bps | |||||||||||||||||||||||
Series 2013 VF 1 Notes (11) | 1-Month LIBOR | Feb. 2044 | Feb. 2014 | 35,028 | 514,972 | — | |||||||||||||||||
+ 195 – 290 bps | |||||||||||||||||||||||
Class A Term Money Market Fund Note (12) | 1-Month LIBOR | Sep. 2014 | Jan. 2014 | — | 265,000 | 183,462 | |||||||||||||||||
+ 20 bps | |||||||||||||||||||||||
Class A Draw Money Market Fund Note (12) | 1-Month LIBOR | Sep. 2044 | Sep. 2014 | — | — | 81,538 | |||||||||||||||||
+ 110 bps | |||||||||||||||||||||||
Class B Term Money Market Fund Note | 275 bps | Sep. 2044 | Sep. 2014 | — | 28,500 | 28,500 | |||||||||||||||||
$ | 727,878 | $ | 5,715,622 | $ | 2,690,821 | ||||||||||||||||||
-1 | Each term note and variable funding note issuance has four classes, an A, B, C, and D class. | ||||||||||||||||||||||
-2 | The weighted average interest rate at December 31, 2013 was 1.64%. We pay interest monthly. | ||||||||||||||||||||||
-3 | The maturity date is the due date for all outstanding balances. The amortization date is the date on which the revolving period ends under each advance facility note and repayment of the outstanding balance must begin if the note is not renewed or extended. If an advance facility note is not refinanced on the amortization date, all collections that represent the repayment of advances pledged to the facilities must be applied to reduce the balance of the note outstanding, and any new advances are ineligible to be financed. To the extent that we have sufficient unused borrowing capacity on our Variable Funding Notes, we can use such excess capacity to finance additional Match funded advances rather than extending or refinancing a term note that has reached the amortization date. | ||||||||||||||||||||||
-4 | Our unused borrowing capacity is available to us if we have additional eligible collateral to pledge and meet other borrowing conditions. We pay a 0.50% or 0.75% fee on the unused borrowing capacity which varies by facility. | ||||||||||||||||||||||
-5 | These Variable Funding Notes were amended during August 2013 to extend the amortization date and maturity date by a year and resulted in new interest rate spreads compared to December 31, 2012. Variable Funding Note balances fluctuate based on Match funded advance activity and our ability to issue fixed rate term notes. | ||||||||||||||||||||||
-6 | On January 22, 2013, we completed the issuance of $650,000 of one-year, $350,000 of three-year and $150,000 of five-year term notes. | ||||||||||||||||||||||
-7 | On May 21, 2013, we completed the issuance of $375,000 of two-year and $475,000 of four-year term notes. | ||||||||||||||||||||||
-8 | On August 8, 2013, we completed the issuance of $200,000 of one-year and $200,000 of three-year term notes. | ||||||||||||||||||||||
-9 | On September 18, 2013, we completed the issuance of a $350,000 one-year term note. | ||||||||||||||||||||||
-10 | On November 26, 2013, we completed the issuance of a $300,000 three-year term note. | ||||||||||||||||||||||
-11 | On July 1, 2013, we issued a new Variable Funding Note series as part of the Follow On 3 acquisition. | ||||||||||||||||||||||
-12 | The Class A Term Money Market Fund Note and Class A Draw Money Market Fund Note have a combined maximum borrowing capacity of $265,000. By design, the Class A Term Money Market Fund Note balance is reduced at scheduled times and there is an equally offsetting increase to the Class A Draw Money Market Fund Note. The combined balance of these notes was equal to $265,000 at December 31, 2013 and 2012. On September 26, 2013, we placed a new Money Market Fund Note at a reduced interest rate and amended the related Money Market Fund Draw Note to reduce the interest rate. The amortization date for the Class A Term Money Market Fund Note represents the commencement date for scheduled repayments. | ||||||||||||||||||||||
As of December 31, 2013, we had $727,878 of unused borrowing capacity. Our ability to continue to pledge collateral under our advance facilities depends on the performance of the collateral. Currently, the large majority of our collateral qualifies for financing. The debt covenants for our advance facilities require that we maintain minimum levels of liquid assets. Failure to comply with these covenants could result in restrictions on new borrowings or the early termination of our advance facilities. | |||||||||||||||||||||||
We were in compliance with all our debt covenants as of December 31, 2013. | |||||||||||||||||||||||
Analysis of Borrowing by Expected Maturity (1): | |||||||||||||||||||||||
Year of Expected Maturity Date | As of December 31, 2013 | ||||||||||||||||||||||
2014 | $ | 3,415,622 | |||||||||||||||||||||
2015 | 825,000 | ||||||||||||||||||||||
2016 | 850,000 | ||||||||||||||||||||||
2017 | 475,000 | ||||||||||||||||||||||
2018 | 150,000 | ||||||||||||||||||||||
Total | $ | 5,715,622 | |||||||||||||||||||||
-1 | The expected maturity date is the date on which the revolving period ends under each advance facility note and repayment of the outstanding balance must begin if the note is not renewed or extended. |
Other_Borrowings
Other Borrowings | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Other Borrowings | ' | ||||||||
7. OTHER BORROWINGS | |||||||||
December 31, | |||||||||
2013 | December 31, | ||||||||
2012 | |||||||||
Senior secured term loan facility (1) | $ | 343,386 | $ | — | |||||
$ | 343,386 | $ | — | ||||||
-1 | On June 27, 2013, we entered into a $350,000 senior secured term loan facility. The senior secured term loan facility has an expected maturity date of June 27, 2020 and an interest rate of 3.50% plus one month LIBOR, with a 1.00% LIBOR floor. As of December 31, 2013, the interest rate on our senior secured term loan facility was 4.50%. The senior secured term loan was issued at a discount to par and had a carrying value of $343,386 at December 31, 2013 which reflects an original issue discount of $5,250 that is being accreted into interest expense over the life of the borrowing. | ||||||||
The debt covenants for our senior secured term facility place restrictions on other unsecured indebtedness, a minimum debt to tangible equity ratio of less than 6 to 1, minimum borrowing base coverage ratio of 1.5 to 1 and the delivery of certified financial reports to our lender. Should we be deemed to be in default under the provisions of our senior secured term loan facility, the unpaid principal amount of and accrued interest on the senior secured term loan facility would immediately become due. | |||||||||
We were in compliance with all our debt covenants as of December 31, 2013. | |||||||||
Analysis of Borrowing by Maturity: | |||||||||
Year of Payment Date | As of December 31, 2013 | ||||||||
2014 | $ | 3,500 | |||||||
2015 | 3,500 | ||||||||
2016 | 3,500 | ||||||||
2017 | 3,500 | ||||||||
2018 and thereafter | 334,250 | ||||||||
Total | $ | 348,250 | |||||||
Ordinary_Shares
Ordinary Shares | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Ordinary Shares | ' | ||||||||||||
8. ORDINARY SHARES | |||||||||||||
Increases in the number of ordinary shares issued during the years ended December 31, 2013, 2012 and 2011 are represented in the table below: | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Ordinary shares issued – beginning balance | 55,884,718 | 20,000 | 20,000 | ||||||||||
Issuance of new ordinary shares | 15,132,053 | 55,864,718 | — | ||||||||||
Ordinary shares issued – ending balance | 71,016,771 | 55,884,718 | 20,000 | ||||||||||
On March 5, 2012, we closed the IPO resulting in the issuance of 13,333,333 of our ordinary shares. The total gross proceeds from the offering to HLSS were $186,667. After deducting underwriting discounts and commissions and offering expenses paid by HLSS, the aggregate net proceeds we received totaled $170,486. | |||||||||||||
On March 5, 2012, simultaneously with the IPO, William C. Erbey, the founder of our company and the Chairman of the Board of Directors, purchased 714,285 of our ordinary shares in a private placement. The total proceeds from the private placement to HLSS were $10,000. We did not incur underwriting discounts or commissions in respect of these shares. | |||||||||||||
On April 2, 2012, we issued 129,600 additional ordinary shares to the underwriters in connection with the exercise of their over-allotment option under the IPO. The total gross proceeds from the issuance of these additional shares to HLSS were $1,814. After deducting underwriting discounts, commissions and expenses paid by HLSS, the aggregate net proceeds we received were $1,577. | |||||||||||||
On September 12, 2012, we issued 16,387,500 of our ordinary shares, 2,137,500 of which were pursuant to the exercise by the underwriters of their over-allotment option. The total gross proceeds from the issuance of these additional shares to HLSS were $249,909. After deducting underwriting discounts, commissions and expenses paid by HLSS, the aggregate net proceeds we received were $236,034. | |||||||||||||
On December 24, 2012, we issued 25,300,000 of our ordinary shares. In addition, the underwriters had an over-allotment option for the purchase of 3,795,000 of our ordinary shares, a portion of which were exercised in 2013. The total gross proceeds from the issuance of these shares to HLSS were $480,700. After deducting underwriting discounts, commissions and expenses paid by HLSS, the aggregate net proceeds we received were $462,261. | |||||||||||||
On January 22, 2013, the underwriters exercised a portion of their over-allotment option from our December 24, 2012 offering of ordinary shares in the amount of 970,578 ordinary shares. We received net proceeds of $17,633 from the over-allotment exercise. | |||||||||||||
On June 26, 2013, we issued 13,000,000 of our ordinary shares, and an additional 1,161,475 of ordinary shares were issued in connection with the exercise of the underwriters’ over-allotment option. The total gross proceeds from the issuance of these additional shares to HLSS were $325,714. After deducting underwriting discounts, commissions and expenses payable by HLSS, the aggregate net proceeds we received were $315,918. |
Derivative_Financial_Instrumen
Derivative Financial Instruments | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Derivative Financial Instruments | ' | ||||||||||||||||||||||||
9. DERIVATIVE FINANCIAL INSTRUMENTS | |||||||||||||||||||||||||
We are party to interest rate swap agreements that we recognize on our Consolidated Balance Sheets at fair value within Other assets and Other liabilities. On the date we entered into the interest rate swap agreements, we designated and documented them as hedges of the variable cash flows payable for variable rate interest expense on our borrowings (cash flow hedge). To qualify for hedge accounting, a derivative must be highly effective at reducing the risk associated with the hedged exposure. In addition, the documentation must include the risk management objective and strategy. On a quarterly basis we assess and document the derivatives’ effectiveness and expected effectiveness in offsetting the changes in the fair value or the cash flows of the hedged items. To assess effectiveness, we use statistical methods, such as regression analysis, as well as nonstatistical methods including dollar-offset analysis. For a cash flow hedge, to the extent that it is effective, we record changes in the estimated fair value of the derivative in other comprehensive income. We subsequently reclassify these changes in estimated fair value to Net income in the same period or periods that the hedged transaction affects earnings and in the same financial statement category as the hedged item. | |||||||||||||||||||||||||
If a derivative instrument in a cash flow hedge is terminated or the hedge designation is removed, we reclassify related amounts in AOCI into earnings in the same period or periods during which the cash flows that were hedged affect earnings. In a period where we determine that it is probable that a hedged forecasted transaction will not occur, such as variable-rate interest payments on debt that has been repaid in advance, any related amounts in AOCI are reclassified into earnings in that period. | |||||||||||||||||||||||||
Because our current derivative agreements are not exchange-traded, we are exposed to credit loss in the event of nonperformance by the counterparty to the agreement. We control this risk through counterparty credit monitoring procedures including financial analysis, dollar limits and other monitoring procedures. The notional amounts of our contracts do not represent our exposure to credit loss. See Notes 1 and 3 for additional information regarding our use of derivatives. | |||||||||||||||||||||||||
Interest Rate Management | |||||||||||||||||||||||||
We executed a hedging strategy aimed at mitigating the impact of changes in variable interest rates on the excess of interest rate sensitive liabilities over interest rate sensitive assets. We entered into interest rate swaps to hedge against the effects of a change in 1-Month LIBOR. The following tables provide information about our interest rate swaps at December 31, 2013 and 2012: | |||||||||||||||||||||||||
Purpose | Date | Effective | Maturity | We Pay | We | Balance | Notional | Fair | |||||||||||||||||
Opened | Date (1) | Receive | Sheet | Amount | Value | ||||||||||||||||||||
Location | |||||||||||||||||||||||||
Designated as hedges (2),(3): | |||||||||||||||||||||||||
Hedge the effects of changes in 1-Month LIBOR | September | September | August | 0.5188 | % | 1-Month | Other | $ | 177,056 | $ | 1,084 | ||||||||||||||
2012 | 2012 | 2017 | LIBOR | Assets | |||||||||||||||||||||
Hedge the effects of changes in 1-Month LIBOR | January | January | December | 1.3975 | % | 1-Month | Other | 338,009 | 2,751 | ||||||||||||||||
2013 | 2016 | 2017 | LIBOR | Assets | |||||||||||||||||||||
Total asset derivatives designated as hedges as of December 31, 2013 | 515,065 | 3,835 | |||||||||||||||||||||||
Total asset derivatives as of December 31, 2013 | $ | 515,065 | $ | 3,835 | |||||||||||||||||||||
Purpose | Date | Effective | Maturity | We Pay | We | Balance | Notional | Fair | |||||||||||||||||
Opened | Date (1) | Receive | Sheet | Amount | Value | ||||||||||||||||||||
Location | |||||||||||||||||||||||||
Designated as hedges (2),(3): | |||||||||||||||||||||||||
Hedge the effects of changes in 1-Month LIBOR | March | March | March | 0.6325 | % | 1-Month | Other | $ | 102,522 | $ | 364 | ||||||||||||||
2012 | 2012 | 2016 | LIBOR | Liabilities | |||||||||||||||||||||
Hedge the effects of changes in 1-Month LIBOR | May | May | May | 0.607 | % | 1-Month | Other | 28,565 | 25 | ||||||||||||||||
2012 | 2012 | 2016 | LIBOR | Liabilities | |||||||||||||||||||||
Hedge the effects of changes in 1-Month LIBOR | January | January | July | 0.3375 | % | 1-Month | Other | 307,043 | 140 | ||||||||||||||||
2013 | 2014 | 2014 | LIBOR | Liabilities | |||||||||||||||||||||
Total liability derivatives designated as hedges as of December 31, 2013 | 438,130 | 529 | |||||||||||||||||||||||
Total liability derivatives as of December 31, 2013 | $ | 438,130 | $ | 529 | |||||||||||||||||||||
Purpose | Date | Effective | Maturity | We Pay | We | Balance | Notional | Fair | |||||||||||||||||
Opened | Date (1) | Receive | Sheet | Amount | Value | ||||||||||||||||||||
Location | |||||||||||||||||||||||||
Designated as hedges (3): | |||||||||||||||||||||||||
Hedge the effects of changes in 1-Month LIBOR | March | March | March | 0.6325 | % | 1-Month | Other | $ | 147,351 | $ | 759 | ||||||||||||||
2012 | 2012 | 2016 | LIBOR | Liabilities | |||||||||||||||||||||
Hedge the effects of changes in 1-Month LIBOR | May | May | May | 0.607 | % | 1-Month | Other | 44,221 | 174 | ||||||||||||||||
2012 | 2012 | 2016 | LIBOR | Liabilities | |||||||||||||||||||||
Hedge the effects of changes in 1-Month LIBOR | September | September | August | 0.5188 | % | 1-Month | Other | 223,059 | 143 | ||||||||||||||||
2012 | 2012 | 2017 | LIBOR | Liabilities | |||||||||||||||||||||
Total liability derivatives designated as hedges as of December 31, 2012 | 414,631 | 1,076 | |||||||||||||||||||||||
Total liability derivatives as of December 31, 2012 | $ | 414,631 | $ | 1,076 | |||||||||||||||||||||
-1 | The effective date of the swap is the date from which monthly net settlements begin to be computed. | ||||||||||||||||||||||||
-2 | Projected net settlements for the next twelve months total approximately $1,118 of payments to our counterparties. | ||||||||||||||||||||||||
-3 | There was an unrealized pre-tax gain of $4,382 related to our interest rate swaps included in AOCI for the year ended December 31, 2013, and an unrealized pre-tax loss of $1,076 related to our interest rate swaps included in AOCI for the year ended December 31, 2012. Given the current and expected effectiveness of our hedging arrangements, we do not expect any reclassifications from AOCI into earnings associated with hedging ineffectiveness related to these hedging arrangements during the next twelve months. | ||||||||||||||||||||||||
The following table summarizes the use of derivatives during the years ended December 31, 2013 and 2012: | |||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||
Notional balance at beginning of period | $ | 414,631 | $ | — | |||||||||||||||||||||
Additions | 645,052 | 534,946 | |||||||||||||||||||||||
Maturities | — | — | |||||||||||||||||||||||
Terminations | — | — | |||||||||||||||||||||||
Amortization | 106,488 | 120,315 | |||||||||||||||||||||||
Notional balance at end of period | $ | 953,195 | $ | 414,631 | |||||||||||||||||||||
We recognize the right to reclaim cash collateral or the obligation to return cash collateral as part of our hedge agreements. At December 31, 2013, we have the right to reclaim cash collateral of $1,075 and are obligated to return cash collateral of $3,500 as part of our hedge agreements. At December 31, 2012 we had the right to reclaim cash collateral of $1,904 and were not obligated to return cash collateral as part of our hedge agreements. |
Interest_Income
Interest Income | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Interest Income | ' | ||||||||||||
10. INTEREST INCOME | |||||||||||||
Interest income – Notes Receivable – Rights to MSRS | |||||||||||||
Our primary source of revenue is the fees we are entitled to receive in connection with the servicing of mortgage loans. We account for these fees as Interest income. | |||||||||||||
The following table shows how we calculated Interest income—notes receivable – Rights to MSRs for the years ended December 31: | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Servicing fees collected | $ | 633,377 | $ | 117,789 | $ | — | |||||||
Subservicing fee payable to Ocwen | 317,702 | 50,173 | — | ||||||||||
Net servicing fees retained by HLSS | 315,675 | 67,616 | — | ||||||||||
Reduction in Notes receivable – Rights to MSRs | 79,849 | 20,171 | — | ||||||||||
$ | 235,826 | $ | 47,445 | $ | — | ||||||||
Interest income – Other | |||||||||||||
Another source of revenue for us is the interest we earn on our operating bank accounts and the custodial account balances related to the mortgage loans serviced which are not included in our Consolidated Balance Sheets. The following table shows our Interest income – other in more detail for the years ended December 31: | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Custodial account interest | $ | 1,819 | $ | — | $ | — | |||||||
Operating account interest | 376 | 109 | — | ||||||||||
$ | 2,195 | $ | 109 | $ | — | ||||||||
Interest_Expense
Interest Expense | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Interest Expense | ' | ||||||||||||
11. INTEREST EXPENSE | |||||||||||||
The following table presents the components of Interest expense for the years ended December 31: | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Match funded liabilities | $ | 83,137 | $ | 16,158 | $ | — | |||||||
Other borrowings | 8,627 | — | — | ||||||||||
Amortization of debt issuance costs | 16,950 | 6,960 | — | ||||||||||
Interest rate swaps | 1,357 | 939 | — | ||||||||||
$ | 110,071 | $ | 24,057 | $ | — | ||||||||
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Income Taxes | ' | ||||||||||||
12. INCOME TAXES | |||||||||||||
Income taxes have been provided for based upon the tax laws and rates in countries in which we conduct operations and earn related income. Our effective tax rate was 0.2% for the year ended December 31, 2013 (0.2%, for the year ended December 31, 2012 and 0% for the year ended December 31, 2011). We are a Cayman Islands exempted company, and the Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation. Our U.S. subsidiaries are expected to be subject to U.S federal income taxation as corporations. The income of the U.S. branch operated by one of our Luxembourg subsidiaries is expected to be subject to Luxembourg tax. | |||||||||||||
The Company accounts for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax laws and rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. | |||||||||||||
The sources of income (loss) before income taxes for the years ended December 31, 2013, 2012 and 2011 were as follows: | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
U.S. operations | $ | 4,057 | $ | (3,430 | ) | $ | (1 | ) | |||||
Non-U.S. operations | 113,834 | 23,093 | (272 | ) | |||||||||
Total | $ | 117,891 | $ | 19,663 | $ | (273 | ) | ||||||
The components of the income tax provision for the years ended December 31, 2013 and 2012 consisted of the following (we had no income tax provision or benefit for the year ended December 31, 2011): | |||||||||||||
For the year ended December 31, 2013: | |||||||||||||
Current: | |||||||||||||
United States | |||||||||||||
Federal | $ | 920 | |||||||||||
State | 193 | ||||||||||||
Non-U.S. | 17 | ||||||||||||
Current income tax provision | $ | 1,130 | |||||||||||
Deferred: | |||||||||||||
United States | |||||||||||||
Federal | $ | (790 | ) | ||||||||||
State | (106 | ) | |||||||||||
Non-U.S. | — | ||||||||||||
Deferred income tax (benefit) | (896 | ) | |||||||||||
Total income tax provision | $ | 234 | |||||||||||
For the year ended December 31, 2012: | |||||||||||||
Current: | |||||||||||||
United States | |||||||||||||
Federal | $ | — | |||||||||||
State | 46 | ||||||||||||
Non-U.S. | — | ||||||||||||
Current income tax provision | $ | 46 | |||||||||||
Deferred: | |||||||||||||
United States | |||||||||||||
Federal | $ | — | |||||||||||
State | — | ||||||||||||
Non-U.S. | — | ||||||||||||
Deferred income tax provision | — | ||||||||||||
Total income tax provision | $ | 46 | |||||||||||
The significant components of the Company’s deferred tax assets and liabilities at December 31, 2013 consisted of the following (the Company only had fully allowed for deferred tax assets at December 31, 2012 and had no deferred tax assets or liabilities at December 31, 2011): | |||||||||||||
At December 31, 2013: | |||||||||||||
Deferred tax assets: | |||||||||||||
NOL carryforwards | $ | 25 | |||||||||||
Accruals | 999 | ||||||||||||
Total deferred tax assets | $ | 1,024 | |||||||||||
Valuation allowance | — | ||||||||||||
Net deferred tax assets | $ | 1,024 | |||||||||||
Deferred tax liabilities: | |||||||||||||
Interest rate derivatives | $ | 1,139 | |||||||||||
Debt issuance costs | 127 | ||||||||||||
Total deferred tax liabilities | $ | 1,266 | |||||||||||
At December 31, 2012: | |||||||||||||
Deferred tax assets: | |||||||||||||
NOL carryforwards | $ | 1,188 | |||||||||||
Interest rate derivatives | 408 | ||||||||||||
Debt issuance costs | 84 | ||||||||||||
Accruals | 75 | ||||||||||||
Total deferred tax assets | $ | 1,755 | |||||||||||
Valuation allowance | (1,755 | ) | |||||||||||
Net deferred tax assets | $ | — | |||||||||||
Below is a reconciliation of the changes in our valuation allowance during 2013 and 2012: | |||||||||||||
2013 | 2012 | ||||||||||||
Beginning balance | $ | 1,755 | $ | — | |||||||||
Additions | — | 1,755 | |||||||||||
Release of NOL carryforwards | (1,755 | ) | — | ||||||||||
Ending balance | $ | — | $ | 1,755 | |||||||||
As of December 31, 2013 the Company has NOL carryforwards of $0 and $3,816, for both U.S. federal and state and local tax purposes. As of December 31, 2012 the Company had NOL carryforwards of $2,827 and $3,776, for both U.S. federal and state and local tax purposes (2011: $0 and $0). These carryforwards are available to offset future taxable income until they begin to expire in 2032 and 2022, respectively. The Company had no tax credit carryforwards for the years ended December 31, 2013, 2012, and 2011. | |||||||||||||
The Company conducts periodic evaluations of positive and negative evidence to determine whether it is more likely than not that some or all of the deferred tax assets will not be realized in future periods. Among the factors considered in this evaluation are estimates of future taxable income, future reversals of temporary differences, tax character and the impact of tax planning strategies that may be implemented, if warranted. As a result of these evaluations, the Company determined as of December 31, 2013 the valuation allowance of $1,755 recorded against its deferred tax assets was no longer needed and has released the valuation allowance. | |||||||||||||
Reconciliations of the statutory U.S. federal income tax rate to the Company’s effective income tax rate for the years ended December 31, 2013 and 2012 are as follows: | |||||||||||||
Year Ended December 31, 2013: | |||||||||||||
Statutory rate | 34 | % | |||||||||||
State and local income taxes | 0.1 | % | |||||||||||
Benefit of Non-U.S. operations(1) | (32.8 | %) | |||||||||||
Release of valuation allowance | (1.0 | %) | |||||||||||
Other | (0.1 | %) | |||||||||||
Effective tax rate per Consolidated Statements of Operations | 0.2 | % | |||||||||||
Year Ended December 31, 2012: | |||||||||||||
Statutory rate | 34 | % | |||||||||||
State and local income taxes | (0.7 | %) | |||||||||||
Benefit of Non-U.S. operations(1) | (39.9 | %) | |||||||||||
Valuation allowance | 6.8 | % | |||||||||||
Effective tax rate per Consolidated Statements of Operations | 0.2 | % | |||||||||||
-1 | The majority of our earnings are at Home Loan Servicing Solutions, Ltd., a Cayman Islands entity, which is not engaged in a U.S. trade or business and therefore is not subject to U.S. federal income taxation. | ||||||||||||
No reconciliation is provided for the year ended December 31, 2011 because prior to its IPO the Company was a developmental stage enterprise and did not have any taxable earnings. | |||||||||||||
The Company recognizes the tax benefit from an uncertain tax position only if it is more likely that not that the tax position will be sustained on examination by the taxing authorities. As of December 31, 2013, the Company did not have any unrecognized tax benefits related to the current year or any previous year, nor has management identified any. Our policy is that we will recognize interest and penalties accrued on any unrecognized tax benefits as a component of Income tax expense. We did not accrue interest or penalties associated with any unrecognized tax benefits, nor were any interest expenses or penalties recognized during the current year or in previous years. | |||||||||||||
Our U.S. subsidiaries file annual income tax returns in the U.S. federal jurisdiction and various U.S. state jurisdictions. The Company and its subsidiaries remain subject to examination for all periods since inception. The Company asserts that as of December 31, 2013, the unremitted earnings of its non-Cayman Islands subsidiaries are permanently reinvested for purposes of ASC 740-30 and that the Company has the intent and ability to reinvest such earnings in each respective non-Cayman Islands jurisdiction. Determination of the amount of unrecognized deferred tax liability is not practicable because of the fact that there is a significant amount of uncertainty with respect to the tax impact of the remittance of any earnings due to the judgment required to analyze withholding tax and other indirect tax consequences that could arise from the distribution of foreign earnings. |
Business_Segment_Reporting
Business Segment Reporting | 12 Months Ended |
Dec. 31, 2013 | |
Business Segment Reporting | ' |
13. BUSINESS SEGMENT REPORTING | |
Our business strategy focuses on acquiring Mortgage Servicing Assets. As of December 31, 2013, we operate a single reportable business segment that holds Rights to MSRs. |
Related_Party_Transactions
Related Party Transactions | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Related Party Transactions | ' | ||||||||
14. RELATED PARTY TRANSACTIONS | |||||||||
During 2012, we entered into various agreements with Ocwen and Altisource in connection with the Initial Acquisition. William C. Erbey, our founder and the Chairman of our Board of Directors, is also the Chairman of the Board of Directors of Ocwen and Altisource. | |||||||||
As the named servicer, Ocwen remains obligated to perform as servicer under the related PSAs, and we are required to pay Ocwen a monthly fee for the servicing activities it performs. We are also required to purchase any servicing advances that Ocwen is required to make pursuant to such PSAs. | |||||||||
The following table summarizes our transactions with Ocwen under the Purchase Agreement for the years ended December 31, 2013 and 2012: | |||||||||
2013 | 2012 | ||||||||
Servicing fees collected | $ | 633,377 | $ | 117,789 | |||||
Subservicing fee payable to Ocwen | 317,702 | 50,173 | |||||||
Net servicing fees retained by HLSS | 315,675 | 67,616 | |||||||
Reduction in Notes receivable – Rights to MSRs | 79,849 | 20,171 | |||||||
$ | 235,826 | $ | 47,445 | ||||||
Servicing advances purchased from Ocwen in the ordinary course of business | $ | 8,781,034 | $ | 1,303,955 | |||||
At December 31, 2013 and 2012, Ocwen owed us $8,482 and $4,966 for servicing fees collected but not remitted to us, and we owed Ocwen $8,114 and $890 for the subservicing fee earned by Ocwen but not yet remitted to them. In addition, we had outstanding receivables at December 31, 2013 and 2012, from Ocwen of $60,239 and $21,265 that relate to collections made by Ocwen on outstanding Match funded advances. Upon collection, Ocwen is contractually obligated to remit these collections to pay down our Match funded liabilities. This receivable represents the portion of Match funded advance collections that were in-transit to pay down our Match funded liabilities as of the period indicated. The Notes receivable – Rights to MSRs are due from Ocwen as of December 31, 2013. | |||||||||
Ocwen Professional Services Agreement | |||||||||
At December 31, 2013 and 2012, Ocwen owed us $655 and $1,322 and we owed Ocwen $354 and $40 for professional services provided pursuant to the Ocwen Professional Services Agreement. During the years ended December 31, 2013 and 2012, we earned fees of $1,811 and $2,316 for services provided to Ocwen pursuant to the Professional Services Agreement. Additionally, during the years ended December 31, 2013 and 2012, we incurred fees of $555 and $100 for services received from Ocwen pursuant to the Ocwen Professional Services Agreement. | |||||||||
Altisource Administrative Services Agreement | |||||||||
During the years ended December 31, 2013 and 2012, we incurred fees of $845 and $655 for services provided to us pursuant to the Altisource Administrative Services Agreement. | |||||||||
Receivables From and Payables to Related Parties | |||||||||
The following table summarizes amounts receivable from and payable to related parties at the dates indicated: | |||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
Servicing fees collected (1) | $ | 8,482 | $ | 4,966 | |||||
Professional services (2) | 655 | 1,322 | |||||||
Advance collections (3) | 60,239 | 21,265 | |||||||
Other | 673 | 718 | |||||||
Receivables from Ocwen | $ | 70,049 | $ | 28,271 | |||||
Subservicing fees payable (4) | $ | 8,114 | $ | 890 | |||||
Professional services (2) | 354 | 40 | |||||||
Other (5)(6) | 2,181 | 1,815 | |||||||
Payables to Ocwen | $ | 10,649 | $ | 2,745 | |||||
Payables to Altisource | $ | 83 | $ | 129 | |||||
-1 | Ocwen is required to remit to us servicing fees it collects on our behalf within two business days. The amount due from Ocwen at the dates indicated represents servicing fees collected but not remitted at the end of the month. We record servicing fee collections less the subservicing fee we pay to Ocwen as Interest income as shown in Note 10. | ||||||||
-2 | The respective amounts are for professional services provided to and provided by Ocwen. | ||||||||
-3 | Upon collection, Ocwen is contractually obligated to remit Match funded advance collections to pay down our Match funded liabilities. This receivable represents the portion of Match funded advance collections that were in-transit to pay down our Match funded liabilities as of the dates indicated. | ||||||||
-4 | The base fee and performance fee, if any, that comprise the servicing fee expense are calculated and paid to Ocwen within three business days following the end of the month. | ||||||||
-5 | At December 31, 2013, we owed Ocwen for servicing advances made on our behalf of $1,867. We reimburse Ocwen for servicing advances on scheduled funding dates throughout each month of the year. | ||||||||
-6 | At December 31, 2012, we owed Ocwen $1,410 for certain purchase price adjustments pertaining to our December 26, 2012 asset purchase from Ocwen. |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2013 | |
Commitments and Contingencies | ' |
15. COMMITMENTS AND CONTINGENCIES | |
We may be party to various claims, legal actions, and complaints arising in the ordinary course of business. We monitor our legal matters, including advice from external legal counsel, and periodically perform assessments of these matters for potential loss accrual and disclosure. There are currently no probable matters outstanding that, in the opinion of management, will have a material effect on our Consolidated Balance Sheets, Statements of Operations and Statements of Cash Flows. There are also currently no reasonably possible matters outstanding that, in the opinion of management, will have a material effect on our Consolidated Balance Sheets, Statements of Operations and Statements of Cash Flows. |
Subsequent_Events
Subsequent Events | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Subsequent Events | ' | ||||
16. SUBSEQUENT EVENTS | |||||
Subsequent to our balance sheet date of December 31, 2013: | |||||
• | On January 10, 2014, we paid cash dividends of $10,653 or $0.15 per ordinary share. | ||||
• | On January 16, 2014, we declared dividends of $0.15 per ordinary share for the months of January, February and March, 2014. The dividends will be payable to holders of record of our ordinary shares as follows: | ||||
Record Date | Payment Date | Amount per | |||
Ordinary Share | |||||
January 31, 2014 | February 10, 2014 | $0.15 | |||
February 28, 2014 | March 10, 2014 | $0.15 | |||
March 31, 2014 | April 10, 2014 | $0.15 | |||
• | On January 17, 2014, we completed the issuance of $600,000 of one-year and $200,000 of three-year term notes at a weighted average spread over one-month LIBOR of 1.09%. The proceeds were used to reduce the borrowings on our variable funding notes. |
Restatement
Restatement | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Restatement | ' | ||||||||||||||||||||||||
17. RESTATEMENT | |||||||||||||||||||||||||
Subsequent to the issuance of the Original Form 10-K, we determined that the Notes receivable – Rights to MSRs and related interest income were materially misstated due to the fact that we did not adjust the Notes receivable – Rights to MSRs to the best estimate of fair value and did not include the effect of such fair value adjustments in the application of the interest method in accounting for the Notes receivable – Rights to MSRs, as of December 31, 2013 and 2012. As a result the following financial statement amounts have been restated from amounts previously reported. | |||||||||||||||||||||||||
The following table summarizes the effects of the restatement on the consolidated balance sheets as of: | |||||||||||||||||||||||||
31-Dec-13 | 31-Dec-12 | ||||||||||||||||||||||||
(In thousands) | As | Adjustments | As | As | Adjustments | As | |||||||||||||||||||
Previously | Restated | Previously | Restated | ||||||||||||||||||||||
Reported | Reported | ||||||||||||||||||||||||
Notes receivable – Rights to MSRs | $ | 651,060 | $ | (17,291 | ) | $ | 633,769 | $ | 303,705 | $ | (7,254 | ) | $ | 296,451 | |||||||||||
All other assets | 6,676,903 | — | 6,676,903 | 3,281,608 | — | 3,281,608 | |||||||||||||||||||
Total assets | $ | 7,327,963 | $ | (17,291 | ) | $ | 7,310,672 | $ | 3,585,313 | $ | (7,254 | ) | $ | 3,578,059 | |||||||||||
Total liabilities | $ | 6,094,225 | $ | — | $ | 6,094,225 | $ | 2,704,680 | $ | — | $ | 2,704,680 | |||||||||||||
Retained earnings | 20,804 | (17,291 | ) | 3,513 | 4,493 | (7,254 | ) | (2,761 | ) | ||||||||||||||||
All other equity | 1,212,934 | — | 1,212,934 | 876,140 | — | 876,140 | |||||||||||||||||||
Total equity | 1,233,738 | (17,291 | ) | 1,216,447 | 880,633 | (7,254 | ) | 873,379 | |||||||||||||||||
Total liabilities and equity | $ | 7,327,963 | $ | (17,291 | ) | $ | 7,310,672 | $ | 3,585,313 | $ | (7,254 | ) | $ | 3,578,059 | |||||||||||
The following table summarizes the effects of the restatement on the consolidated statements of operations for the years ended December 31, 2013 and 2012: | |||||||||||||||||||||||||
31-Dec-13 | 31-Dec-12 | ||||||||||||||||||||||||
(In thousands) | As | Adjustments | As | As | Adjustments | As | |||||||||||||||||||
Previously | Restated | Previously | Restated | ||||||||||||||||||||||
Reported | Reported | ||||||||||||||||||||||||
Interest income – notes receivable – Rights to MSRs | $ | 245,863 | $ | (10,037 | ) | $ | 235,826 | $ | 54,699 | $ | (7,254 | ) | $ | 47,445 | |||||||||||
Interest income – other | 2,195 | — | 2,195 | 109 | — | 109 | |||||||||||||||||||
Total interest income | 248,058 | (10,037 | ) | 238,021 | 54,808 | (7,254 | ) | 47,554 | |||||||||||||||||
Related party revenue | 1,811 | — | 1,811 | 2,316 | — | 2,316 | |||||||||||||||||||
Total revenue | 249,869 | (10,037 | ) | 239,832 | 57,124 | (7,254 | ) | 49,870 | |||||||||||||||||
Operating expenses | 11,870 | — | 11,870 | 6,150 | — | 6,150 | |||||||||||||||||||
Income from operations | 237,999 | (10,037 | ) | 227,962 | 50,974 | (7,254 | ) | 43,720 | |||||||||||||||||
Other expense | |||||||||||||||||||||||||
Interest expense | 110,071 | — | 110,071 | 24,057 | — | 24,057 | |||||||||||||||||||
Total other expense | 110,071 | — | 110,071 | 24,057 | — | 24,057 | |||||||||||||||||||
Income before income taxes | 127,928 | (10,037 | ) | 117,891 | 26,917 | (7,254 | ) | 19,663 | |||||||||||||||||
Income tax expense | 234 | — | 234 | 46 | — | 46 | |||||||||||||||||||
Net income | $ | 127,694 | $ | (10,037 | ) | $ | 117,657 | $ | 26,871 | $ | (7,254 | ) | $ | 19,617 | |||||||||||
Earnings per share | |||||||||||||||||||||||||
Basic | $ | 1.99 | $ | (0.16 | ) | $ | 1.83 | $ | 1.56 | $ | (0.42 | ) | $ | 1.14 | |||||||||||
Diluted | $ | 1.99 | $ | (0.16 | ) | $ | 1.83 | $ | 1.56 | $ | (0.42 | ) | $ | 1.14 | |||||||||||
The following table summarizes the effects of the restatement on the consolidated statements of comprehensive income for the years ended December 31, 2013 and 2012: | |||||||||||||||||||||||||
31-Dec-13 | 31-Dec-12 | ||||||||||||||||||||||||
(In thousands) | As | Adjustments | As | As | Adjustments | As | |||||||||||||||||||
Previously | Restated | Previously | Restated | ||||||||||||||||||||||
Reported | Reported | ||||||||||||||||||||||||
Net income | $ | 127,694 | $ | (10,037 | ) | $ | 117,657 | $ | 26,871 | $ | (7,254 | ) | $ | 19,617 | |||||||||||
Total other comprehensive income (loss), net of tax | 3,243 | — | 3,243 | (1,076 | ) | — | (1,076 | ) | |||||||||||||||||
Total comprehensive income | $ | 130,937 | $ | (10,037 | ) | $ | 120,900 | $ | 25,795 | $ | (7,254 | ) | $ | 18,541 | |||||||||||
The following table summarizes the effects of the restatement on the consolidated statements of cash flows for the years ended December 31, 2013 and 2012: | |||||||||||||||||||||||||
31-Dec-13 | 31-Dec-12 | ||||||||||||||||||||||||
(In thousands) | As | Adjustments | As | As | Adjustments | As | |||||||||||||||||||
Previously | Restated | Previously | Restated | ||||||||||||||||||||||
Reported | Reported | ||||||||||||||||||||||||
Net income | $ | 127,694 | $ | (10,037 | ) | $ | 117,657 | $ | 26,871 | $ | (7,254 | ) | $ | 19,617 | |||||||||||
All other operating cash flows | 507,752 | — | 507,752 | 71,031 | — | 71,031 | |||||||||||||||||||
Net cash provided by operating activities | 635,446 | (10,037 | ) | 625,409 | 97,902 | (7,254 | ) | 90,648 | |||||||||||||||||
Reduction in Notes Receivable – Rights to MSRs | 69,812 | 10,037 | 79,849 | 12,917 | 7,254 | 20,171 | |||||||||||||||||||
All other investing cash flows | (4,258,531 | ) | — | (4,258,531 | ) | (3,218,773 | ) | — | (3,218,773 | ) | |||||||||||||||
Net cash used in investing activities | (4,188,719 | ) | 10,037 | (4,178,682 | ) | (3,205,856 | ) | 7,254 | (3,198,602 | ) | |||||||||||||||
Net cash provided by financing activities | 3,565,121 | — | 3,565,121 | 3,183,719 | — | 3,183,719 | |||||||||||||||||||
Net increase in cash and cash equivalents | 11,848 | — | 11,848 | 75,765 | — | 75,765 | |||||||||||||||||||
Cash and cash equivalents at beginning of year | 76,048 | — | 76,048 | 283 | — | 283 | |||||||||||||||||||
Cash and cash equivalents at end of year | $ | 87,896 | $ | — | $ | 87,896 | $ | 76,048 | $ | — | $ | 76,048 | |||||||||||||
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Organization | ' | ||||||||
Organization | |||||||||
HLSS and its wholly owned subsidiaries are engaged in the business of acquiring Mortgage Servicing Assets. We do not originate mortgage loans, and as a result we are not subject to the risk of loss related to the origination of mortgage loans. We engaged Ocwen, a high quality residential mortgage loan servicer, to service the mortgage loans underlying our Mortgage Servicing Assets and therefore have not and do not intend to develop our own mortgage servicing platform. Our target is to distribute approximately 90% of our Net income over time to our shareholders in the form of a monthly cash dividend. | |||||||||
Basis of Presentation | ' | ||||||||
Basis of Presentation | |||||||||
We prepared the accompanying audited consolidated financial statements in conformity to US GAAP which requires that we make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Prior to our IPO on March 5, 2012 we were a developmental stage company. Therefore, our results for the years ended December 31, 2012 and 2011 do not reflect a full twelve months of operations and are not fully comparable to the results for the year ended December 31, 2013. | |||||||||
Principles of Consolidation | ' | ||||||||
Principles of Consolidation | |||||||||
Our financial statements include the accounts of HLSS and its wholly owned subsidiaries, as well as two VIEs of which we are the primary beneficiary. We eliminate intercompany accounts and transactions in consolidation. | |||||||||
We evaluate each SPE for classification as a VIE. When a SPE meets the definition of a VIE and we determine that HLSS is the primary beneficiary, we include the SPE in our Consolidated Financial Statements. | |||||||||
Our Match funded advances are in two SPEs along with related Match funded liabilities. We determined that these SPEs are VIEs of which we are the primary beneficiaries. The accounts of these SPEs are included in our Consolidated Financial Statements. | |||||||||
Match funded advances on loans serviced for others result from our transfers of residential loan servicing advances to SPEs in exchange for cash. The SPEs issue debt supported by collections on the transferred advances. We made these transfers under the terms of our advance facility agreements. These transfers do not qualify for sale accounting because we retain control over the transferred assets. As a result, we account for these transfers as financings and classify the transferred advances on our Consolidated Balance Sheet as Match funded advances and the related liabilities as Match funded liabilities. We use collections on the advances pledged to the SPEs to repay principal and to pay interest and the expenses of each entity. Holders of the debt issued by each entity can look only to the assets of the entity itself for satisfaction of the debt and have no recourse against HLSS. We did not provide financial or other support to our SPEs during the current fiscal period, nor are we required to under the terms of our advance facility agreements. | |||||||||
The following table summarizes the assets and liabilities of the SPEs formed in connection with our current Match funded advance facilities, at the dates indicated: | |||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
Match funded advances | $ | 6,387,781 | $ | 3,098,198 | |||||
Related party receivables (1) | 60,239 | 21,265 | |||||||
Other assets (2) | 119,902 | 77,110 | |||||||
Total assets | $ | 6,567,922 | $ | 3,196,573 | |||||
Match funded liabilities | $ | 5,715,622 | $ | 2,690,821 | |||||
Other liabilities | 4,673 | 2,203 | |||||||
Total liabilities | $ | 5,720,295 | $ | 2,693,024 | |||||
-1 | Relates to collections made by Ocwen on outstanding Match funded advances. This receivable represents the portion of Match funded advance collections that were in-transit to pay down our Match funded liabilities as of December 31, 2013 and 2012. See Note 14 for more information about our Related party receivables. | ||||||||
-2 | Other assets principally include debt service accounts and debt issuance costs. See Note 5 for more information about our Other assets. | ||||||||
Cash and Cash Equivalents | ' | ||||||||
Cash and Cash Equivalents | |||||||||
Cash and cash equivalents include interest-bearing demand deposits with financial institutions with original maturities of 90 days and less. There were no restrictions on the use of our cash and cash equivalents balances as of December 31, 2013 and 2012. | |||||||||
Servicing Activities and Match Funded Advances | ' | ||||||||
Servicing Activities and Match Funded Advances | |||||||||
As part of our agreements with Ocwen, we are obligated to purchase the servicing advances made by Ocwen pursuant to the PSAs related to any Acquired Mortgage Servicing Rights. Servicing advances serve as collateral under the terms of our advance facilities and therefore we classify the servicing advances we purchase from Ocwen as “Match funded advances”. | |||||||||
Residential mortgage loan servicers manage the billing, collections and loss mitigation activities associated with mortgage loans that are originated by banks or other lenders. Servicers send borrowers monthly account statements, collect monthly mortgage payments, remit such payments to the owner of the mortgage loan, answer customer service inquiries and maintain custodial accounts to hold borrower payments of principal and interest and amounts received from borrowers to pay real estate taxes and insurance with respect to the properties securing the mortgage loans and pay such real estate taxes and insurance premiums from the custodial accounts. A servicer will also remit collections on the mortgage loans from the custodial accounts to the trustee of the applicable securitization trust to make payments on the related mortgage-backed securities and prepare and deliver monthly and annual reports to the trustee. A servicer may also be required to advance its own funds to cover shortfalls in collections of principal and interest from borrowers, to pay property and casualty insurance premiums and real estate taxes on a property and to cover the costs associated with protecting or foreclosing on a property. If borrowers become delinquent on loans, the servicer generally may conduct loss mitigation activities to reduce loan delinquencies and losses by working with borrowers to collect payments and modify loans or enforce the lenders’ remedies, which may include initiating foreclosure procedures and selling the properties. | |||||||||
Match funded advances generally fall into one of three categories: | |||||||||
• | “Principal and Interest Advances” are cash payments made by the servicer to the owner of the mortgage loan to cover scheduled payments of principal and interest on a mortgage loan that have not been paid on a timely basis by the borrower. | ||||||||
• | “Taxes and Insurance Advances” are cash payments made by the servicer to third parties on behalf of the borrower for real estate taxes and insurance premiums on the property that have not been paid on a timely basis by the borrower. | ||||||||
• | “Corporate Advances” are cash payments made by the servicer to third parties for the costs and expenses incurred in connection with the foreclosure, preservation and sale of the mortgaged property, including attorneys’ and other professional fees. | ||||||||
Match funded advances are usually reimbursed from amounts received with respect to the related mortgage loan, including payments from the borrower or amounts received from the liquidation of the property securing the loan which is referred to as “loan level recovery.” Servicers generally have the right to cease making servicing advances on a loan if they determine that advances are not recoverable at the loan level. With respect to the Rights to MSRs that we own, Ocwen makes this determination in accordance with its stop advance policy. In the event that loan level recovery is not sufficient to reimburse the servicer in full for servicing advances made with respect to a mortgage loan, most of our PSAs provide that the servicer is entitled to be reimbursed from collections received with respect to other loans in the same securitized mortgage pool which is referred to as “pool level recovery”. We do not receive interest on Match funded advances. | |||||||||
We may record a charge to earnings to the extent that we believe Match funded advances are uncollectible (we recorded no such charges for the years ended December 31, 2013, 2012 and 2011) under the provisions of each servicing contract taking into consideration the projected collections under the applicable loan or pool relative to the Match funded advances outstanding and the projected future Match funded advances. However, the servicer is generally only obligated to advance funds to the extent that it believes the advances are recoverable from expected proceeds from the loan. We assess collectability using proprietary cash flow projection models which incorporate a number of different factors, depending on the characteristics of the mortgage loan or pool, including, for example, time to a foreclosure sale, estimated costs of foreclosure action, future property tax payments and the value of the underlying property net of carrying costs, commissions and closing costs. | |||||||||
Notes Receivable - Rights to MSRs and Interest Income | ' | ||||||||
Notes Receivable – Rights to MSRs and Interest Income | |||||||||
In connection with our purchase of the Rights to MSRs we received all the rights and rewards of ownership of mortgage servicing rights absent the necessary approvals required to allow us to become the named servicer under the applicable PSAs. ASC 860, Transfers and Servicing, specifically prohibits accounting for a transfer of servicing rights as a sale if legal title to such servicing rights has not passed to the purchaser. As a result, we are required to account for the purchase of the Rights to MSRs as a financing transaction. We initially recorded the Notes receivable – Rights to MSRs at the purchase price of the Rights to MSRs. At each reporting date, we determine the fair value and adjust the carrying value of the Notes receivable – Rights to MSRs to this amount. | |||||||||
Interest income – Notes Receivable – Rights to MSRs represents the servicing fees earned on the underlying mortgage servicing rights less any amounts due to Ocwen for the servicing activities that it performs. In addition, Interest income – Notes Receivable – Rights to MSRs is reduced by amortization of the Notes Receivable – Rights to MSRs, calculated using the interest method of accounting, and is increased or decreased by incremental changes in the fair value of the Note Receivable – Rights to MSRs. Interest Income is our primary source of income. See Note 10 for more information about how we calculate Interest income – notes receivable – Rights to MSRs. | |||||||||
Servicing Fees, Base Fees, Ancillary Income and Performance Based Incentive Fees | ' | ||||||||
Servicing Fees, Base Fees, Ancillary Income and Performance Based Incentive Fees | |||||||||
Ocwen is the named servicer for the mortgage loans underlying the Rights to MSRs, and receives the servicing fees associated with the mortgage servicing rights; however, Ocwen pays these servicing fees to us under the terms of the Purchase Agreement and related sale supplements specific to each asset purchase. We pay Ocwen a monthly base fee equal to 12% of the servicing fees collected each month. The monthly base fee payable to Ocwen varies from month to month based on the level of collections of principal and interest for the mortgage loans serviced. Ocwen also receives a performance based incentive fee to the extent the Servicing fee revenue that it collects for any given month exceeds the sum of the monthly base fee and the retained fee. | |||||||||
The amount, as expressed in terms of basis points of the average UPB of the mortgage loans serviced, used to calculate the retained fee is a contractually agreed upon amount. If we do not receive an amount equal to the retained fee in any given month, as expressed in terms of basis points of the average UPB of the mortgage loans serviced, this creates a shortfall in our targeted gross servicing margin. Should this occur, Ocwen will not earn a performance based incentive fee for any month that there is such a shortfall, or in any subsequent month, until we have recovered such shortfall from amounts that would otherwise be available to pay future performance based incentive fees to Ocwen. | |||||||||
As determined by the terms of the Sale Supplement with respect to each mortgage servicing right, the performance based incentive fee payable in any month will be reduced by an amount equal to one month LIBOR + 275 bps per annum of the amount of any such excess servicing advances if the advance ratio exceeds a predetermined level for that month. | |||||||||
Derivative Financial Instruments | ' | ||||||||
Derivative Financial Instruments | |||||||||
We are party to interest rate swap agreements that we recognize on our Consolidated Balance Sheet at fair value within other assets and other liabilities. On the date we entered into our interest rate swap agreements, we designated and documented them as hedges of the variable cash flows payable for floating rate interest expense on our borrowings (cash flow hedge). To qualify for hedge accounting, a derivative must be highly effective at reducing the risk associated with the hedged exposure. In addition, the documentation must include the risk management objective and strategy. We assess and document quarterly the derivatives’ effectiveness and expected effectiveness in offsetting the changes in the fair value or the cash flows of the hedged items. To assess effectiveness, we use statistical methods, such as regression analysis, as well as nonstatistical methods including dollar-offset analysis. For a cash flow hedge, to the extent that it is effective, we record changes in the estimated fair value of the derivative in accumulated other comprehensive income (“AOCI”.) We subsequently reclassify these changes in estimated fair value to Net income in the same period, or periods, that the hedged transaction affects earnings and in the same financial statement category as the hedged item. | |||||||||
If a derivative instrument in a cash flow hedge is terminated or the hedge designation is removed, we reclassify related amounts in AOCI into earnings in the same period or periods during which the cash flows that were hedged affect earnings. In a period where we determine that it is probable that a hedged forecasted transaction will not occur, such as variable-rate interest payments on debt that has been repaid in advance, any related amounts in AOCI are reclassified into earnings in that period. | |||||||||
We do not apply offsetting as part of our accounting for derivative assets and liabilities and the related collateral amounts. | |||||||||
See Notes 3 and 9 for additional information regarding our interest rate swap agreements. | |||||||||
Match Funded Liabilities | ' | ||||||||
Match Funded Liabilities | |||||||||
Substantially all of our outstanding Match funded advances are pledged to advance financing facilities. Match funded liabilities are a form of non-recourse debt that are collateralized by our Match funded advances. Our Match funded liability balance is driven primarily by the level of servicing advances and the advance borrowing rate which is defined as the collateral value of servicing advances divided by total servicing advances. The advance borrowing rates which are different for each type of six advance types were set at levels that enabled each class of notes issued pursuant to the advance financing facilities to meet rating agency criteria. In addition, we are able to pledge deferred servicing fees as collateral for our Match funded liabilities. | |||||||||
Under the terms of the related indenture, the SPEs created in connection with the Advance Facilities are subject to various qualitative and quantitative covenants. We believe that we are currently in compliance with the following covenants: | |||||||||
• | Restrictions on future investments and indebtedness; | ||||||||
• | Restrictions on sale or assignment of Match funded advances; and | ||||||||
• | Monitoring and reporting of various specified transactions or events, including specific reporting on defined events affecting collateral underlying the indenture. | ||||||||
See Note 6 for additional information regarding our Match funded liabilities. | |||||||||
Other Borrowings | ' | ||||||||
Other Borrowings | |||||||||
On June 27, 2013, we entered into a senior secured term loan facility. The senior term loan facility was issued at a discount to par, and this original issue discount is being accreted into Interest expense over the life of the facility. See Note 7 for additional information regarding our Other borrowings. | |||||||||
Interest Income - Other | ' | ||||||||
Interest Income – Other | |||||||||
Interest income – Other consists of interest we earn on our operating bank accounts and the custodial account balances related to the mortgage loans serviced which are not included in our Consolidated Balance Sheets. When we acquire Notes receivable – Rights to MSRs, we also acquire the right to earn interest income on all custodial account balances associated with the related PSAs. | |||||||||
Operating Expenses | ' | ||||||||
Operating Expenses | |||||||||
Our operating expenses consist largely of Compensation and benefits for our employees. In addition, we incur General and administrative expenses for facilities, technology, communication and other expenses typical of public companies, including audit, legal and other professional fees. | |||||||||
Interest Expense | ' | ||||||||
Interest Expense | |||||||||
We primarily finance servicing advances with Match funded liabilities that accrue interest. Interest expense also includes interest incurred on our Other borrowings, amortization of debt issuance costs and net interest payable on our interest rate swaps. | |||||||||
Interest expense is sensitive to the Match funded advance balance which is driven primarily by the delinquency rates and amount of UPB serviced. The speed at which delinquent loans are resolved affects our Interest expense. For example, slower resolution of delinquencies will result in higher servicing advance balances and higher Interest expense. In order to mitigate the Interest expense impact of higher servicing advance balances, we reduce the performance based servicing fee payable to Ocwen in any month in which the advance ratio exceeds a predetermined level for that month. Periodic issuances of fixed rate term notes also protect us from the risk of rising interest rates. We earn Interest income at market interest rates on the custodial account balances related to the mortgage loans serviced which are not included in our Consolidated Balance Sheets. Lastly, we use interest rate swaps to hedge a portion of our variable interest rate exposure. See Notes 3 and 9 for additional information regarding our interest rate swap agreements. | |||||||||
Income Taxes | ' | ||||||||
Income Taxes | |||||||||
We were incorporated as an exempted company in the Cayman Islands which currently does not levy income taxes on individuals or companies. We expect to be treated as a PFIC under U.S. federal income tax laws with respect to our investing activities. With the exception of our U.S. subsidiaries, we do not expect to be treated as engaged in a trade or business in the U.S. and thus do not expect to be subject to U.S. federal income taxation on the majority of our earnings. | |||||||||
We account for income taxes using the asset and liability method which requires the recognition of Deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. See Note 12 for more information regarding our Income taxes. | |||||||||
Basic and Diluted Earnings Per Share | ' | ||||||||
Basic and Diluted Earnings Per Share | |||||||||
We calculate basic earnings per share by dividing Net income or loss by the weighted average number of ordinary shares outstanding for the year. We calculate diluted earnings per share based upon the weighted average number of ordinary shares outstanding and all dilutive potential ordinary shares outstanding during the year. For the years ended December 31, 2013, 2012 and 2011, there were no ordinary share equivalents or other securities that could potentially dilute basic earnings per share. | |||||||||
Dividends | ' | ||||||||
Dividends | |||||||||
When our Board of Directors declares cash dividends, we record a payable and charge Retained earnings for the total amount of the dividends declared. If we lack sufficient Retained earnings to pay the full amount of dividends declared we charge the excess amount to Additional paid-in capital. | |||||||||
Recent Accounting Pronouncements | ' | ||||||||
Recent Accounting Pronouncements | |||||||||
Accounting Standards Update (“ASU”) ASU 2012-04. This ASU makes technical corrections and improvements to a variety of topics in the Codification. The changes include source literature amendments, guidance clarification, reference corrections and relocated guidance. The ASU also includes conforming amendments to the Codification to reflect ASC 820’s fair value measurement and disclosure requirements. Our adoption of this standard effective January 1, 2013, did not have a material impact on our Consolidated Financial Statements. | |||||||||
ASU 2013-01. This ASU limits the scope of the new balance sheet offsetting disclosure requirements to derivatives (including bifurcated embedded derivatives), repurchase agreements and reverse repurchase agreements, and securities borrowing and lending transactions. Our adoption of this standard effective January 1, 2013, did not have a material impact on our Consolidated Financial Statements. | |||||||||
ASU 2013-02. This ASU enhances the reporting of reclassifications out of AOCI. The ASU sets requirements for presentation for significant items reclassified to Net income in their entirety during the period and for items not reclassified to Net income in their entirety during the period. It requires companies to present information about reclassifications out of AOCI in one place. It also requires companies to present reclassifications by component when reporting changes in AOCI balances. Our adoption of this standard effective January 1, 2013, did not have a material impact on our Consolidated Financial Statements. | |||||||||
ASU 2013-10. This ASU permits the Fed Funds Effective Swap Rate to be used as a U.S. benchmark interest rate for hedge accounting purposes, as an alternative to interest rates on direct Treasury obligations of the U.S. government or LIBOR. This standard is effective prospectively for qualifying new or redesignated hedging relationships entered into on or after July 17, 2013. Our adoption of this standard effective July 17, 2013 did not have a material impact on our Consolidated Financial Statements. | |||||||||
ASU 2013-11. This ASU provides explicit guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss (“NOL”) carryforward, a similar tax loss or a tax credit exists. Previously, there was diversity in practice, and this ASU is expected to eliminate that diversity in practice. The amendments in this update are effective for fiscal years and interim periods within those periods beginning after December 15, 2013. We do not expect that the adoption of this standard on January 1, 2014 will have a material impact on our Consolidated Financial Statements. | |||||||||
Revenue | ' | ||||||||
Related Party Transaction | ' | ||||||||
Related Party Revenue | |||||||||
Related party revenue consists of amounts due to us from Ocwen under the terms of the Ocwen Professional Services Agreement. Under the Ocwen Professional Services Agreement, we receive revenue for providing certain services to Ocwen which includes valuation and analysis of mortgage servicing rights, capital markets activities, advance financing management, treasury management, legal services and other similar services. We recognize revenue under the Ocwen Professional Services Agreement based on actual costs incurred plus an additional markup of 15%. See Note 14 for more information regarding our related party transactions. | |||||||||
Expenses | ' | ||||||||
Related Party Transaction | ' | ||||||||
Related Party Expenses | |||||||||
Related party expenses consist of administrative services pursuant to the Altisource Administrative Services Agreement and the services provided by Ocwen to us under the Ocwen Professional Services Agreement. See Note 14 for more information regarding our related party transactions. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Summary of Assets and Liabilities of SPEs | ' | ||||||||
The following table summarizes the assets and liabilities of the SPEs formed in connection with our current Match funded advance facilities, at the dates indicated: | |||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
Match funded advances | $ | 6,387,781 | $ | 3,098,198 | |||||
Related party receivables (1) | 60,239 | 21,265 | |||||||
Other assets (2) | 119,902 | 77,110 | |||||||
Total assets | $ | 6,567,922 | $ | 3,196,573 | |||||
Match funded liabilities | $ | 5,715,622 | $ | 2,690,821 | |||||
Other liabilities | 4,673 | 2,203 | |||||||
Total liabilities | $ | 5,720,295 | $ | 2,693,024 | |||||
-1 | Relates to collections made by Ocwen on outstanding Match funded advances. This receivable represents the portion of Match funded advance collections that were in-transit to pay down our Match funded liabilities as of December 31, 2013 and 2012. See Note 14 for more information about our Related party receivables. | ||||||||
-2 | Other assets principally include debt service accounts and debt issuance costs. See Note 5 for more information about our Other assets. |
Assets_Acquired_and_Liabilitie1
Assets Acquired and Liabilities Assumed (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Summary of Purchase Price of Assets and Liabilities | ' | ||||||||||||
The following table summarizes the purchase price of the assets we acquired from Ocwen during the year ended December 31, 2013 and reconciles the cash used to acquire such assets: | |||||||||||||
Notes receivable – Rights to MSRs | $ | 417,167 | |||||||||||
Match funded advances (1) | 3,839,954 | ||||||||||||
Purchase price | 4,257,121 | ||||||||||||
Cash paid to settle previous post-close adjustments | 1,410 | ||||||||||||
Total cash used | $ | 4,258,531 | |||||||||||
Sources: | |||||||||||||
Cash on-hand | $ | 807,268 | |||||||||||
Match funded liabilities | $ | 3,451,263 | |||||||||||
-1 | The cash used to purchase these assets are shown within the “Acquisition of advances and other assets (net of liabilities assumed) in connection with the purchase of Notes receivable – Rights to MSRs” of the Consolidated Statement of Cash Flows. | ||||||||||||
The following table summarizes the purchase price of the assets we acquired and liabilities we assumed from Ocwen during 2012 and reconciles the cash used to acquire such assets and assume such liabilities: | |||||||||||||
Initial | Subsequent | Total | |||||||||||
Purchase | Purchases | ||||||||||||
Notes receivable – Rights to MSRs | $ | 62,458 | $ | 254,164 | $ | 316,622 | |||||||
Match funded advances (1) | — | 2,827,227 | 2,827,227 | ||||||||||
Purchase of Advance SPE: | |||||||||||||
Match funded advances (1) | 413,374 | — | 413,374 | ||||||||||
Other assets (1) | 22,136 | — | 22,136 | ||||||||||
Match funded liabilities (1) | (358,335 | ) | — | (358,335 | ) | ||||||||
Other liabilities (1) | (841 | ) | — | (841 | ) | ||||||||
Net assets of Advance SPE | 76,334 | — | 76,334 | ||||||||||
Purchase price, as adjusted | 138,792 | 3,081,391 | 3,220,183 | ||||||||||
Amount due to Ocwen for post-closing adjustments | — | (1,410 | ) | (1,410 | ) | ||||||||
Total cash used | $ | 138,792 | $ | 3,079,981 | $ | 3,218,773 | |||||||
Sources: | |||||||||||||
Cash on-hand | $ | 138,792 | $ | 685,654 | $ | 824,446 | |||||||
Match funded liabilities | $ | — | $ | 2,394,327 | $ | 2,394,327 | |||||||
-1 | The cash used to purchase these assets and assume these liabilities are shown net within the “Acquisition of advances and other assets (net of liabilities assumed) in connection with the purchase of Notes receivable – Rights to MSRs” of the Consolidated Statement of Cash Flows. |
Fair_Value_of_Financial_Instru1
Fair Value of Financial Instruments (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Fair value of Assets and Liabilities Measured on Recurring Basis | ' | ||||||||||||||||
The following tables present assets and liabilities measured at fair value on a recurring basis categorized by input level within the fair value hierarchy: | |||||||||||||||||
Fair value | Level 1 | Level 2 | Level 3 | ||||||||||||||
At December 31, 2013: | |||||||||||||||||
Measured at fair value on a recurring basis: | |||||||||||||||||
Assets: | |||||||||||||||||
Notes receivable – Rights to MSRs | $ | 633,769 | $ | — | $ | — | $ | 633,769 | |||||||||
Derivative financial instruments | 3,835 | — | — | 3,835 | |||||||||||||
Total assets | $ | 637,604 | $ | — | $ | — | $ | 637,604 | |||||||||
Liabilities: | |||||||||||||||||
Derivative financial instruments | $ | 529 | $ | — | $ | — | $ | 529 | |||||||||
Total liabilities | $ | 529 | $ | — | $ | — | $ | 529 | |||||||||
Fair value | Level 1 | Level 2 | Level 3 | ||||||||||||||
At December 31, 2012: | |||||||||||||||||
Measured at fair value on a recurring basis: | |||||||||||||||||
Assets: | |||||||||||||||||
Notes receivable – Rights to MSRs | $ | 296,451 | $ | — | $ | — | $ | 296,451 | |||||||||
Total assets | $ | 296,451 | $ | — | $ | — | $ | 296,451 | |||||||||
Liabilities: | |||||||||||||||||
Derivative financial instruments | $ | 1,076 | $ | — | $ | — | $ | 1,076 | |||||||||
Total liabilities | $ | 1,076 | $ | — | $ | — | $ | 1,076 | |||||||||
Reconciliation of Changes in Fair Value | ' | ||||||||||||||||
The following table presents reconciliations of the changes in fair value of our Level 3 assets and liabilities which we measure at fair value on a recurring basis: | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
For the years ended December 31, | Notes | Derivative | Notes | Derivative | |||||||||||||
receivable – | Financial | receivable – | Financial | ||||||||||||||
Rights to | Instruments | Rights to | Instruments | ||||||||||||||
MSRs | MSRs | ||||||||||||||||
Beginning balance | $ | 296,451 | $ | (1,076 | ) | $ | — | $ | — | ||||||||
Purchases and reductions: | |||||||||||||||||
Purchases | 417,167 | — | 316,622 | — | |||||||||||||
Reductions | (79,849 | ) | — | (20,171 | ) | — | |||||||||||
337,318 | — | 296,451 | — | ||||||||||||||
Changes in fair value : | |||||||||||||||||
Included in other comprehensive income(loss) (1) | — | 4,382 | — | (1,076 | ) | ||||||||||||
— | 4,382 | — | (1,076 | ) | |||||||||||||
Transfers in or out of Level 3 | — | — | — | — | |||||||||||||
Ending balance | $ | 633,769 | $ | 3,306 | $ | 296,451 | $ | (1,076 | ) | ||||||||
-1 | These pre-tax gains (losses) are attributable to derivatives still held at December 31, 2013 and 2012. | ||||||||||||||||
Effect on Fair Value of Note Receivable - Rights to MSRs | ' | ||||||||||||||||
The following tables show the effect on the fair value of the Notes receivable – Rights to MSRs assuming adverse changes to certain key assumptions used in valuing these assets at December 31, 2013 and 2012: | |||||||||||||||||
Discount Rates | Prepayment Speeds | Delinquency Rates | |||||||||||||||
100 bps adverse change | 10% adverse change | 10% adverse change | |||||||||||||||
December 31, 2013 | |||||||||||||||||
Notes receivable – Rights to MSRs | $ | (12,988 | ) | $ | (22,537 | ) | $ | (72,560 | ) | ||||||||
Discount Rates | Prepayment Speeds | Delinquency Rates | |||||||||||||||
100 bps adverse change | 10% adverse change | 10% adverse change | |||||||||||||||
December 31, 2012 | |||||||||||||||||
Notes receivable – Rights to MSRs | $ | (6,049 | ) | $ | (9,715 | ) | $ | (39,628 | ) | ||||||||
Quantitative Information on Significant Inputs Used for Valuing Note Receivable - Rights to MSRs | ' | ||||||||||||||||
The following tables provide more quantitative information on our significant inputs used for valuing our Note Receivable – Rights to MSRs at December 31, 2013 and 2012: | |||||||||||||||||
At December 31, 2013: | |||||||||||||||||
Asset | Unobservable Input | Low | High | Weighted | |||||||||||||
Average | |||||||||||||||||
Notes receivable – Rights to MSRs | Discount Rates | 15 | % | 22 | % | 20 | % | ||||||||||
Prepayment Speeds | 12 | % | 28 | % | 19 | % | |||||||||||
Delinquency Rates | 15 | % | 35 | % | 25 | % | |||||||||||
At December 31, 2012: | |||||||||||||||||
Asset | Unobservable Input | Low | High | Weighted | |||||||||||||
Average | |||||||||||||||||
Notes receivable – Rights to MSRs | Discount Rates | 15 | % | 22 | % | 20 | % | ||||||||||
Prepayment Speeds | 12 | % | 27 | % | 19 | % | |||||||||||
Delinquency Rates | 15 | % | 35 | % | 29 | % | |||||||||||
Carrying Values and Fair Value Estimates of Financial Instruments Not Carried at Fair Value | ' | ||||||||||||||||
Presented below are the December 31, 2013 and 2012 carrying values and fair value estimates of financial instruments not carried at fair value: | |||||||||||||||||
December 31, | December 31, | December 31, | December 31, | ||||||||||||||
2013 | 2013 | 2012 | 2012 | ||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||||
Financial assets: | |||||||||||||||||
Match funded advances | $ | 6,387,781 | $ | 6,387,781 | $ | 3,098,198 | $ | 3,098,198 | |||||||||
Total financial assets | $ | 6,387,781 | $ | 6,387,781 | $ | 3,098,198 | $ | 3,098,198 | |||||||||
Financial liabilities: | |||||||||||||||||
Match funded liabilities | $ | 5,715,622 | $ | 5,700,934 | $ | 2,690,821 | $ | 2,697,840 | |||||||||
Other borrowings | 343,386 | 346,391 | — | — | |||||||||||||
Total financial liabilities | $ | 6,059,008 | $ | 6,047,325 | $ | 2,690,821 | $ | 2,697,840 | |||||||||
Match_Funded_Advances_Tables
Match Funded Advances (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Match Funded Advances on Residential Loans | ' | ||||||||
Match funded advances on residential loans we service for others, as more fully described in Note 1 – Principles of Consolidation are comprised of the following at the dates indicated: | |||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
Principal and interest advances | $ | 2,632,092 | $ | 1,231,471 | |||||
Taxes and insurance advances | 2,723,390 | 1,399,813 | |||||||
Corporate advances | 1,032,299 | 466,914 | |||||||
$ | 6,387,781 | $ | 3,098,198 | ||||||
Other_Assets_Tables
Other Assets (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Other Assets | ' | ||||||||
Other assets consisted of the following at the dates indicated: | |||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
Debt service accounts (1) | $ | 103,910 | $ | 67,776 | |||||
Debt issuance costs (2) | 21,165 | 9,278 | |||||||
Interest-earning collateral deposits (3) | 1,075 | 1,904 | |||||||
Derivative financial instruments (4) | 3,835 | — | |||||||
Other | 168 | 133 | |||||||
$ | 130,153 | $ | 79,091 | ||||||
-1 | Under our advance financing facilities, we are contractually required to remit collections on pledged advances to the trustee within two days of receipt. We do not use the collected funds to reduce the related Match funded liabilities until the payment dates specified in the indenture. The balance also includes amounts that we set aside to provide for possible shortfalls in the funds available to pay certain expenses and interest. | ||||||||
-2 | Costs relate to Match funded liabilities and Other borrowings. We amortize these costs to the earlier of the scheduled amortization date, contractual maturity date or prepayment date of the debt. | ||||||||
-3 | Represents cash collateral held by our counterparty as part of our interest rate swap agreements. | ||||||||
-4 | See Notes 1, 3 and 9 for more information regarding our use of derivatives. |
Match_Funded_Liabilities_Table
Match Funded Liabilities (Tables) | 12 Months Ended | ||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||
Match Funded Liabilities | ' | ||||||||||||||||||||||
Match funded liabilities, as more fully described in Note 1 – Principles of Consolidation are comprised of the following at the dates indicated: | |||||||||||||||||||||||
Balance Outstanding | |||||||||||||||||||||||
Borrowing Type (1) | Interest Rate (2) | Maturity (3) | Amortization | Unused | December 31, | December 31, | |||||||||||||||||
Date (3) | Borrowing | 2013 (6-10) | 2012 | ||||||||||||||||||||
Capacity (4) | |||||||||||||||||||||||
Series 2012 T1 Term Notes | 134 – 396 bps | Oct. 2043 | Oct. 2013 | $ | — | $ | — | $ | 250,000 | ||||||||||||||
Series 2012 T2 Term Notes | 199 – 494 bps | Oct. 2045 | Oct. 2015 | — | 450,000 | 450,000 | |||||||||||||||||
Series 2013 T1 Term Notes | 90 – 249 bps | Jan. 2044 | Jan. 2014 | — | 650,000 | — | |||||||||||||||||
Series 2013 T1 Term Notes | 150 – 323 bps | Jan. 2046 | Jan. 2016 | — | 350,000 | — | |||||||||||||||||
Series 2013 T1 Term Notes | 229 – 446 bps | Jan. 2048 | Jan. 2018 | — | 150,000 | — | |||||||||||||||||
Series 2013 T2 Term Notes | 115 – 239 bps | May 2044 | May 2015 | — | 375,000 | — | |||||||||||||||||
Series 2013 T3 Term Notes | 179 – 313 bps | May-46 | May-17 | — | 475,000 | — | |||||||||||||||||
Series 2013 T4 Term Notes | 118 – 232 bps | Aug-44 | Aug-14 | — | 200,000 | — | |||||||||||||||||
Series 2013 T5 Term Notes | 198 – 331 bps | Aug-46 | Aug-16 | — | 200,000 | — | |||||||||||||||||
Series 2013 T6 Term Notes | 129 – 223 bps | Sep-44 | Sep-14 | — | 350,000 | — | |||||||||||||||||
Series 2013 T7 Term Notes | 198 – 302 bps | Nov-46 | Nov-16 | — | 300,000 | — | |||||||||||||||||
Series 2012 VF 1 Notes (5) | 1-Month LIBOR | Aug. 2044 | Aug. 2014 | 230,950 | 469,050 | 339,465 | |||||||||||||||||
+ 110 – 340 bps | |||||||||||||||||||||||
Series 2012 VF 2 Notes (5) | 1-Month LIBOR | Aug. 2044 | Aug. 2014 | 230,950 | 469,050 | 678,928 | |||||||||||||||||
+ 110 – 340 bps | |||||||||||||||||||||||
Series 2012 VF 3 Notes (5) | 1-Month LIBOR | Aug. 2044 | Aug. 2014 | 230,950 | 469,050 | 678,928 | |||||||||||||||||
+ 110 – 340 bps | |||||||||||||||||||||||
Series 2013 VF 1 Notes (11) | 1-Month LIBOR | Feb. 2044 | Feb. 2014 | 35,028 | 514,972 | — | |||||||||||||||||
+ 195 – 290 bps | |||||||||||||||||||||||
Class A Term Money Market Fund Note (12) | 1-Month LIBOR | Sep. 2014 | Jan. 2014 | — | 265,000 | 183,462 | |||||||||||||||||
+ 20 bps | |||||||||||||||||||||||
Class A Draw Money Market Fund Note (12) | 1-Month LIBOR | Sep. 2044 | Sep. 2014 | — | — | 81,538 | |||||||||||||||||
+ 110 bps | |||||||||||||||||||||||
Class B Term Money Market Fund Note | 275 bps | Sep. 2044 | Sep. 2014 | — | 28,500 | 28,500 | |||||||||||||||||
$ | 727,878 | $ | 5,715,622 | $ | 2,690,821 | ||||||||||||||||||
-1 | Each term note and variable funding note issuance has four classes, an A, B, C, and D class. | ||||||||||||||||||||||
-2 | The weighted average interest rate at December 31, 2013 was 1.64%. We pay interest monthly. | ||||||||||||||||||||||
-3 | The maturity date is the due date for all outstanding balances. The amortization date is the date on which the revolving period ends under each advance facility note and repayment of the outstanding balance must begin if the note is not renewed or extended. If an advance facility note is not refinanced on the amortization date, all collections that represent the repayment of advances pledged to the facilities must be applied to reduce the balance of the note outstanding, and any new advances are ineligible to be financed. To the extent that we have sufficient unused borrowing capacity on our Variable Funding Notes, we can use such excess capacity to finance additional Match funded advances rather than extending or refinancing a term note that has reached the amortization date. | ||||||||||||||||||||||
-4 | Our unused borrowing capacity is available to us if we have additional eligible collateral to pledge and meet other borrowing conditions. We pay a 0.50% or 0.75% fee on the unused borrowing capacity which varies by facility. | ||||||||||||||||||||||
-5 | These Variable Funding Notes were amended during August 2013 to extend the amortization date and maturity date by a year and resulted in new interest rate spreads compared to December 31, 2012. Variable Funding Note balances fluctuate based on Match funded advance activity and our ability to issue fixed rate term notes. | ||||||||||||||||||||||
-6 | On January 22, 2013, we completed the issuance of $650,000 of one-year, $350,000 of three-year and $150,000 of five-year term notes. | ||||||||||||||||||||||
-7 | On May 21, 2013, we completed the issuance of $375,000 of two-year and $475,000 of four-year term notes. | ||||||||||||||||||||||
-8 | On August 8, 2013, we completed the issuance of $200,000 of one-year and $200,000 of three-year term notes. | ||||||||||||||||||||||
-9 | On September 18, 2013, we completed the issuance of a $350,000 one-year term note. | ||||||||||||||||||||||
-10 | On November 26, 2013, we completed the issuance of a $300,000 three-year term note. | ||||||||||||||||||||||
-11 | On July 1, 2013, we issued a new Variable Funding Note series as part of the Follow On 3 acquisition. | ||||||||||||||||||||||
-12 | The Class A Term Money Market Fund Note and Class A Draw Money Market Fund Note have a combined maximum borrowing capacity of $265,000. By design, the Class A Term Money Market Fund Note balance is reduced at scheduled times and there is an equally offsetting increase to the Class A Draw Money Market Fund Note. The combined balance of these notes was equal to $265,000 at December 31, 2013 and 2012. On September 26, 2013, we placed a new Money Market Fund Note at a reduced interest rate and amended the related Money Market Fund Draw Note to reduce the interest rate. The amortization date for the Class A Term Money Market Fund Note represents the commencement date for scheduled repayments. |
Other_Borrowings_Tables
Other Borrowings (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Analysis of Borrowing by Maturity | ' | ||||||||
Analysis of Borrowing by Expected Maturity (1): | |||||||||
Year of Expected Maturity Date | As of December 31, 2013 | ||||||||
2014 | $ | 3,415,622 | |||||||
2015 | 825,000 | ||||||||
2016 | 850,000 | ||||||||
2017 | 475,000 | ||||||||
2018 | 150,000 | ||||||||
Total | $ | 5,715,622 | |||||||
-1 | The expected maturity date is the date on which the revolving period ends under each advance facility note and repayment of the outstanding balance must begin if the note is not renewed or extended. | ||||||||
Other Borrowings | ' | ||||||||
December 31, | |||||||||
2013 | December 31, | ||||||||
2012 | |||||||||
Senior secured term loan facility (1) | $ | 343,386 | $ | — | |||||
$ | 343,386 | $ | — | ||||||
-1 | On June 27, 2013, we entered into a $350,000 senior secured term loan facility. The senior secured term loan facility has an expected maturity date of June 27, 2020 and an interest rate of 3.50% plus one month LIBOR, with a 1.00% LIBOR floor. As of December 31, 2013, the interest rate on our senior secured term loan facility was 4.50%. The senior secured term loan was issued at a discount to par and had a carrying value of $343,386 at December 31, 2013 which reflects an original issue discount of $5,250 that is being accreted into interest expense over the life of the borrowing. | ||||||||
Senior Secured Term Loan Facility | ' | ||||||||
Analysis of Borrowing by Maturity | ' | ||||||||
Analysis of Borrowing by Maturity: | |||||||||
Year of Payment Date | As of December 31, 2013 | ||||||||
2014 | $ | 3,500 | |||||||
2015 | 3,500 | ||||||||
2016 | 3,500 | ||||||||
2017 | 3,500 | ||||||||
2018 and thereafter | 334,250 | ||||||||
Total | $ | 348,250 | |||||||
Ordinary_Shares_Tables
Ordinary Shares (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Increases in Number of Ordinary Shares | ' | ||||||||||||
Increases in the number of ordinary shares issued during the years ended December 31, 2013, 2012 and 2011 are represented in the table below: | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Ordinary shares issued – beginning balance | 55,884,718 | 20,000 | 20,000 | ||||||||||
Issuance of new ordinary shares | 15,132,053 | 55,864,718 | — | ||||||||||
Ordinary shares issued – ending balance | 71,016,771 | 55,884,718 | 20,000 | ||||||||||
Derivative_Financial_Instrumen1
Derivative Financial Instruments (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Interest Rate Swaps | ' | ||||||||||||||||||||||||
The following tables provide information about our interest rate swaps at December 31, 2013 and 2012: | |||||||||||||||||||||||||
Purpose | Date | Effective | Maturity | We Pay | We | Balance | Notional | Fair | |||||||||||||||||
Opened | Date (1) | Receive | Sheet | Amount | Value | ||||||||||||||||||||
Location | |||||||||||||||||||||||||
Designated as hedges (2),(3): | |||||||||||||||||||||||||
Hedge the effects of changes in 1-Month LIBOR | September | September | August | 0.5188 | % | 1-Month | Other | $ | 177,056 | $ | 1,084 | ||||||||||||||
2012 | 2012 | 2017 | LIBOR | Assets | |||||||||||||||||||||
Hedge the effects of changes in 1-Month LIBOR | January | January | December | 1.3975 | % | 1-Month | Other | 338,009 | 2,751 | ||||||||||||||||
2013 | 2016 | 2017 | LIBOR | Assets | |||||||||||||||||||||
Total asset derivatives designated as hedges as of December 31, 2013 | 515,065 | 3,835 | |||||||||||||||||||||||
Total asset derivatives as of December 31, 2013 | $ | 515,065 | $ | 3,835 | |||||||||||||||||||||
Purpose | Date | Effective | Maturity | We Pay | We | Balance | Notional | Fair | |||||||||||||||||
Opened | Date (1) | Receive | Sheet | Amount | Value | ||||||||||||||||||||
Location | |||||||||||||||||||||||||
Designated as hedges (2),(3): | |||||||||||||||||||||||||
Hedge the effects of changes in 1-Month LIBOR | March | March | March | 0.6325 | % | 1-Month | Other | $ | 102,522 | $ | 364 | ||||||||||||||
2012 | 2012 | 2016 | LIBOR | Liabilities | |||||||||||||||||||||
Hedge the effects of changes in 1-Month LIBOR | May | May | May | 0.607 | % | 1-Month | Other | 28,565 | 25 | ||||||||||||||||
2012 | 2012 | 2016 | LIBOR | Liabilities | |||||||||||||||||||||
Hedge the effects of changes in 1-Month LIBOR | January | January | July | 0.3375 | % | 1-Month | Other | 307,043 | 140 | ||||||||||||||||
2013 | 2014 | 2014 | LIBOR | Liabilities | |||||||||||||||||||||
Total liability derivatives designated as hedges as of December 31, 2013 | 438,130 | 529 | |||||||||||||||||||||||
Total liability derivatives as of December 31, 2013 | $ | 438,130 | $ | 529 | |||||||||||||||||||||
Purpose | Date | Effective | Maturity | We Pay | We | Balance | Notional | Fair | |||||||||||||||||
Opened | Date (1) | Receive | Sheet | Amount | Value | ||||||||||||||||||||
Location | |||||||||||||||||||||||||
Designated as hedges (3): | |||||||||||||||||||||||||
Hedge the effects of changes in 1-Month LIBOR | March | March | March | 0.6325 | % | 1-Month | Other | $ | 147,351 | $ | 759 | ||||||||||||||
2012 | 2012 | 2016 | LIBOR | Liabilities | |||||||||||||||||||||
Hedge the effects of changes in 1-Month LIBOR | May | May | May | 0.607 | % | 1-Month | Other | 44,221 | 174 | ||||||||||||||||
2012 | 2012 | 2016 | LIBOR | Liabilities | |||||||||||||||||||||
Hedge the effects of changes in 1-Month LIBOR | September | September | August | 0.5188 | % | 1-Month | Other | 223,059 | 143 | ||||||||||||||||
2012 | 2012 | 2017 | LIBOR | Liabilities | |||||||||||||||||||||
Total liability derivatives designated as hedges as of December 31, 2012 | 414,631 | 1,076 | |||||||||||||||||||||||
Total liability derivatives as of December 31, 2012 | $ | 414,631 | $ | 1,076 | |||||||||||||||||||||
-1 | The effective date of the swap is the date from which monthly net settlements begin to be computed. | ||||||||||||||||||||||||
-2 | Projected net settlements for the next twelve months total approximately $1,118 of payments to our counterparties. | ||||||||||||||||||||||||
-3 | There was an unrealized pre-tax gain of $4,382 related to our interest rate swaps included in AOCI for the year ended December 31, 2013, and an unrealized pre-tax loss of $1,076 related to our interest rate swaps included in AOCI for the year ended December 31, 2012. Given the current and expected effectiveness of our hedging arrangements, we do not expect any reclassifications from AOCI into earnings associated with hedging ineffectiveness related to these hedging arrangements during the next twelve months. | ||||||||||||||||||||||||
Summarization of Use of Derivative | ' | ||||||||||||||||||||||||
The following table summarizes the use of derivatives during the years ended December 31, 2013 and 2012: | |||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||
Notional balance at beginning of period | $ | 414,631 | $ | — | |||||||||||||||||||||
Additions | 645,052 | 534,946 | |||||||||||||||||||||||
Maturities | — | — | |||||||||||||||||||||||
Terminations | — | — | |||||||||||||||||||||||
Amortization | 106,488 | 120,315 | |||||||||||||||||||||||
Notional balance at end of period | $ | 953,195 | $ | 414,631 | |||||||||||||||||||||
Interest_Income_Tables
Interest Income (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Notes Receivable - Rights to MSRs | ' | ||||||||||||
Calculation of Interest Income on Notes Receivable | ' | ||||||||||||
The following table shows how we calculated Interest income—notes receivable – Rights to MSRs for the years ended December 31: | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Servicing fees collected | $ | 633,377 | $ | 117,789 | $ | — | |||||||
Subservicing fee payable to Ocwen | 317,702 | 50,173 | — | ||||||||||
Net servicing fees retained by HLSS | 315,675 | 67,616 | — | ||||||||||
Reduction in Notes receivable – Rights to MSRs | 79,849 | 20,171 | — | ||||||||||
$ | 235,826 | $ | 47,445 | $ | — | ||||||||
Interest Income - other | ' | ||||||||||||
Calculation of Interest Income on Notes Receivable | ' | ||||||||||||
The following table shows our Interest income – other in more detail for the years ended December 31: | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Custodial account interest | $ | 1,819 | $ | — | $ | — | |||||||
Operating account interest | 376 | 109 | — | ||||||||||
$ | 2,195 | $ | 109 | $ | — | ||||||||
Interest_Expense_Tables
Interest Expense (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Components of Interest Expense | ' | ||||||||||||
The following table presents the components of Interest expense for the years ended December 31: | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Match funded liabilities | $ | 83,137 | $ | 16,158 | $ | — | |||||||
Other borrowings | 8,627 | — | — | ||||||||||
Amortization of debt issuance costs | 16,950 | 6,960 | — | ||||||||||
Interest rate swaps | 1,357 | 939 | — | ||||||||||
$ | 110,071 | $ | 24,057 | $ | — | ||||||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Sources of Income (loss) Before Income Taxes | ' | ||||||||||||
The sources of income (loss) before income taxes for the years ended December 31, 2013, 2012 and 2011 were as follows: | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
U.S. operations | $ | 4,057 | $ | (3,430 | ) | $ | (1 | ) | |||||
Non-U.S. operations | 113,834 | 23,093 | (272 | ) | |||||||||
Total | $ | 117,891 | $ | 19,663 | $ | (273 | ) | ||||||
Components of Income Tax Provision | ' | ||||||||||||
The components of the income tax provision for the years ended December 31, 2013 and 2012 consisted of the following (we had no income tax provision or benefit for the year ended December 31, 2011): | |||||||||||||
For the year ended December 31, 2013: | |||||||||||||
Current: | |||||||||||||
United States | |||||||||||||
Federal | $ | 920 | |||||||||||
State | 193 | ||||||||||||
Non-U.S. | 17 | ||||||||||||
Current income tax provision | $ | 1,130 | |||||||||||
Deferred: | |||||||||||||
United States | |||||||||||||
Federal | $ | (790 | ) | ||||||||||
State | (106 | ) | |||||||||||
Non-U.S. | — | ||||||||||||
Deferred income tax (benefit) | (896 | ) | |||||||||||
Total income tax provision | $ | 234 | |||||||||||
For the year ended December 31, 2012: | |||||||||||||
Current: | |||||||||||||
United States | |||||||||||||
Federal | $ | — | |||||||||||
State | 46 | ||||||||||||
Non-U.S. | — | ||||||||||||
Current income tax provision | $ | 46 | |||||||||||
Deferred: | |||||||||||||
United States | |||||||||||||
Federal | $ | — | |||||||||||
State | — | ||||||||||||
Non-U.S. | — | ||||||||||||
Deferred income tax provision | — | ||||||||||||
Total income tax provision | $ | 46 | |||||||||||
Components of Deferred Tax Assets and Liabilities | ' | ||||||||||||
The significant components of the Company’s deferred tax assets and liabilities at December 31, 2013 consisted of the following (the Company only had fully allowed for deferred tax assets at December 31, 2012 and had no deferred tax assets or liabilities at December 31, 2011): | |||||||||||||
At December 31, 2013: | |||||||||||||
Deferred tax assets: | |||||||||||||
NOL carryforwards | $ | 25 | |||||||||||
Accruals | 999 | ||||||||||||
Total deferred tax assets | $ | 1,024 | |||||||||||
Valuation allowance | — | ||||||||||||
Net deferred tax assets | $ | 1,024 | |||||||||||
Deferred tax liabilities: | |||||||||||||
Interest rate derivatives | $ | 1,139 | |||||||||||
Debt issuance costs | 127 | ||||||||||||
Total deferred tax liabilities | $ | 1,266 | |||||||||||
At December 31, 2012: | |||||||||||||
Deferred tax assets: | |||||||||||||
NOL carryforwards | $ | 1,188 | |||||||||||
Interest rate derivatives | 408 | ||||||||||||
Debt issuance costs | 84 | ||||||||||||
Accruals | 75 | ||||||||||||
Total deferred tax assets | $ | 1,755 | |||||||||||
Valuation allowance | (1,755 | ) | |||||||||||
Net deferred tax assets | $ | — | |||||||||||
Reconciliation of Changes in Valuation Allowance | ' | ||||||||||||
Below is a reconciliation of the changes in our valuation allowance during 2013 and 2012: | |||||||||||||
2013 | 2012 | ||||||||||||
Beginning balance | $ | 1,755 | $ | — | |||||||||
Additions | — | 1,755 | |||||||||||
Release of NOL carryforwards | (1,755 | ) | — | ||||||||||
Ending balance | $ | — | $ | 1,755 | |||||||||
Reconciliations between Statutory U.S. Federal Income Tax Rate and Effective Rate on Income from Operations | ' | ||||||||||||
Reconciliations of the statutory U.S. federal income tax rate to the Company’s effective income tax rate for the years ended December 31, 2013 and 2012 are as follows: | |||||||||||||
Year Ended December 31, 2013: | |||||||||||||
Statutory rate | 34 | % | |||||||||||
State and local income taxes | 0.1 | % | |||||||||||
Benefit of Non-U.S. operations(1) | (32.8 | %) | |||||||||||
Release of valuation allowance | (1.0 | %) | |||||||||||
Other | (0.1 | %) | |||||||||||
Effective tax rate per Consolidated Statements of Operations | 0.2 | % | |||||||||||
Year Ended December 31, 2012: | |||||||||||||
Statutory rate | 34 | % | |||||||||||
State and local income taxes | (0.7 | %) | |||||||||||
Benefit of Non-U.S. operations(1) | (39.9 | %) | |||||||||||
Valuation allowance | 6.8 | % | |||||||||||
Effective tax rate per Consolidated Statements of Operations | 0.2 | % | |||||||||||
-1 | The majority of our earnings are at Home Loan Servicing Solutions, Ltd., a Cayman Islands entity, which is not engaged in a U.S. trade or business and therefore is not subject to U.S. federal income taxation. |
Related_Party_Transactions_Tab
Related Party Transactions (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Transactions with Ocwen under Purchase Agreement | ' | ||||||||
The following table summarizes our transactions with Ocwen under the Purchase Agreement for the years ended December 31, 2013 and 2012: | |||||||||
2013 | 2012 | ||||||||
Servicing fees collected | $ | 633,377 | $ | 117,789 | |||||
Subservicing fee payable to Ocwen | 317,702 | 50,173 | |||||||
Net servicing fees retained by HLSS | 315,675 | 67,616 | |||||||
Reduction in Notes receivable – Rights to MSRs | 79,849 | 20,171 | |||||||
$ | 235,826 | $ | 47,445 | ||||||
Servicing advances purchased from Ocwen in the ordinary course of business | $ | 8,781,034 | $ | 1,303,955 | |||||
Receivable from and Payable to Related Parties | ' | ||||||||
The following table summarizes amounts receivable from and payable to related parties at the dates indicated: | |||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
Servicing fees collected (1) | $ | 8,482 | $ | 4,966 | |||||
Professional services (2) | 655 | 1,322 | |||||||
Advance collections (3) | 60,239 | 21,265 | |||||||
Other | 673 | 718 | |||||||
Receivables from Ocwen | $ | 70,049 | $ | 28,271 | |||||
Subservicing fees payable (4) | $ | 8,114 | $ | 890 | |||||
Professional services (2) | 354 | 40 | |||||||
Other (5)(6) | 2,181 | 1,815 | |||||||
Payables to Ocwen | $ | 10,649 | $ | 2,745 | |||||
Payables to Altisource | $ | 83 | $ | 129 | |||||
-1 | Ocwen is required to remit to us servicing fees it collects on our behalf within two business days. The amount due from Ocwen at the dates indicated represents servicing fees collected but not remitted at the end of the month. We record servicing fee collections less the subservicing fee we pay to Ocwen as Interest income as shown in Note 10. | ||||||||
-2 | The respective amounts are for professional services provided to and provided by Ocwen. | ||||||||
-3 | Upon collection, Ocwen is contractually obligated to remit Match funded advance collections to pay down our Match funded liabilities. This receivable represents the portion of Match funded advance collections that were in-transit to pay down our Match funded liabilities as of the dates indicated. | ||||||||
-4 | The base fee and performance fee, if any, that comprise the servicing fee expense are calculated and paid to Ocwen within three business days following the end of the month. | ||||||||
-5 | At December 31, 2013, we owed Ocwen for servicing advances made on our behalf of $1,867. We reimburse Ocwen for servicing advances on scheduled funding dates throughout each month of the year. | ||||||||
-6 | At December 31, 2012, we owed Ocwen $1,410 for certain purchase price adjustments pertaining to our December 26, 2012 asset purchase from Ocwen. |
Subsequent_Events_Tables
Subsequent Events (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Dividends Declared | ' | ||||
Record Date | Payment Date | Amount per | |||
Ordinary Share | |||||
January 31, 2014 | February 10, 2014 | $0.15 | |||
February 28, 2014 | March 10, 2014 | $0.15 | |||
March 31, 2014 | April 10, 2014 | $0.15 |
Restatement_Tables
Restatement (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Effects of Restatement on Consolidated Balance Sheet | ' | ||||||||||||||||||||||||
The following table summarizes the effects of the restatement on the consolidated balance sheets as of: | |||||||||||||||||||||||||
31-Dec-13 | 31-Dec-12 | ||||||||||||||||||||||||
(In thousands) | As | Adjustments | As | As | Adjustments | As | |||||||||||||||||||
Previously | Restated | Previously | Restated | ||||||||||||||||||||||
Reported | Reported | ||||||||||||||||||||||||
Notes receivable – Rights to MSRs | $ | 651,060 | $ | (17,291 | ) | $ | 633,769 | $ | 303,705 | $ | (7,254 | ) | $ | 296,451 | |||||||||||
All other assets | 6,676,903 | — | 6,676,903 | 3,281,608 | — | 3,281,608 | |||||||||||||||||||
Total assets | $ | 7,327,963 | $ | (17,291 | ) | $ | 7,310,672 | $ | 3,585,313 | $ | (7,254 | ) | $ | 3,578,059 | |||||||||||
Total liabilities | $ | 6,094,225 | $ | — | $ | 6,094,225 | $ | 2,704,680 | $ | — | $ | 2,704,680 | |||||||||||||
Retained earnings | 20,804 | (17,291 | ) | 3,513 | 4,493 | (7,254 | ) | (2,761 | ) | ||||||||||||||||
All other equity | 1,212,934 | — | 1,212,934 | 876,140 | — | 876,140 | |||||||||||||||||||
Total equity | 1,233,738 | (17,291 | ) | 1,216,447 | 880,633 | (7,254 | ) | 873,379 | |||||||||||||||||
Total liabilities and equity | $ | 7,327,963 | $ | (17,291 | ) | $ | 7,310,672 | $ | 3,585,313 | $ | (7,254 | ) | $ | 3,578,059 | |||||||||||
Effects of Restatement on Consolidated Statements of Operations | ' | ||||||||||||||||||||||||
The following table summarizes the effects of the restatement on the consolidated statements of operations for the years ended December 31, 2013 and 2012: | |||||||||||||||||||||||||
31-Dec-13 | 31-Dec-12 | ||||||||||||||||||||||||
(In thousands) | As | Adjustments | As | As | Adjustments | As | |||||||||||||||||||
Previously | Restated | Previously | Restated | ||||||||||||||||||||||
Reported | Reported | ||||||||||||||||||||||||
Interest income – notes receivable – Rights to MSRs | $ | 245,863 | $ | (10,037 | ) | $ | 235,826 | $ | 54,699 | $ | (7,254 | ) | $ | 47,445 | |||||||||||
Interest income – other | 2,195 | — | 2,195 | 109 | — | 109 | |||||||||||||||||||
Total interest income | 248,058 | (10,037 | ) | 238,021 | 54,808 | (7,254 | ) | 47,554 | |||||||||||||||||
Related party revenue | 1,811 | — | 1,811 | 2,316 | — | 2,316 | |||||||||||||||||||
Total revenue | 249,869 | (10,037 | ) | 239,832 | 57,124 | (7,254 | ) | 49,870 | |||||||||||||||||
Operating expenses | 11,870 | — | 11,870 | 6,150 | — | 6,150 | |||||||||||||||||||
Income from operations | 237,999 | (10,037 | ) | 227,962 | 50,974 | (7,254 | ) | 43,720 | |||||||||||||||||
Other expense | |||||||||||||||||||||||||
Interest expense | 110,071 | — | 110,071 | 24,057 | — | 24,057 | |||||||||||||||||||
Total other expense | 110,071 | — | 110,071 | 24,057 | — | 24,057 | |||||||||||||||||||
Income before income taxes | 127,928 | (10,037 | ) | 117,891 | 26,917 | (7,254 | ) | 19,663 | |||||||||||||||||
Income tax expense | 234 | — | 234 | 46 | — | 46 | |||||||||||||||||||
Net income | $ | 127,694 | $ | (10,037 | ) | $ | 117,657 | $ | 26,871 | $ | (7,254 | ) | $ | 19,617 | |||||||||||
Earnings per share | |||||||||||||||||||||||||
Basic | $ | 1.99 | $ | (0.16 | ) | $ | 1.83 | $ | 1.56 | $ | (0.42 | ) | $ | 1.14 | |||||||||||
Diluted | $ | 1.99 | $ | (0.16 | ) | $ | 1.83 | $ | 1.56 | $ | (0.42 | ) | $ | 1.14 | |||||||||||
Effects of Restatement on Consolidated Statements of Comprehensive Income | ' | ||||||||||||||||||||||||
The following table summarizes the effects of the restatement on the consolidated statements of comprehensive income for the years ended December 31, 2013 and 2012: | |||||||||||||||||||||||||
31-Dec-13 | 31-Dec-12 | ||||||||||||||||||||||||
(In thousands) | As | Adjustments | As | As | Adjustments | As | |||||||||||||||||||
Previously | Restated | Previously | Restated | ||||||||||||||||||||||
Reported | Reported | ||||||||||||||||||||||||
Net income | $ | 127,694 | $ | (10,037 | ) | $ | 117,657 | $ | 26,871 | $ | (7,254 | ) | $ | 19,617 | |||||||||||
Total other comprehensive income (loss), net of tax | 3,243 | — | 3,243 | (1,076 | ) | — | (1,076 | ) | |||||||||||||||||
Total comprehensive income | $ | 130,937 | $ | (10,037 | ) | $ | 120,900 | $ | 25,795 | $ | (7,254 | ) | $ | 18,541 | |||||||||||
Effects of Restatement on Consolidated Statements of Cash Flows Income | ' | ||||||||||||||||||||||||
The following table summarizes the effects of the restatement on the consolidated statements of cash flows for the years ended December 31, 2013 and 2012: | |||||||||||||||||||||||||
31-Dec-13 | 31-Dec-12 | ||||||||||||||||||||||||
(In thousands) | As | Adjustments | As | As | Adjustments | As | |||||||||||||||||||
Previously | Restated | Previously | Restated | ||||||||||||||||||||||
Reported | Reported | ||||||||||||||||||||||||
Net income | $ | 127,694 | $ | (10,037 | ) | $ | 117,657 | $ | 26,871 | $ | (7,254 | ) | $ | 19,617 | |||||||||||
All other operating cash flows | 507,752 | — | 507,752 | 71,031 | — | 71,031 | |||||||||||||||||||
Net cash provided by operating activities | 635,446 | (10,037 | ) | 625,409 | 97,902 | (7,254 | ) | 90,648 | |||||||||||||||||
Reduction in Notes Receivable – Rights to MSRs | 69,812 | 10,037 | 79,849 | 12,917 | 7,254 | 20,171 | |||||||||||||||||||
All other investing cash flows | (4,258,531 | ) | — | (4,258,531 | ) | (3,218,773 | ) | — | (3,218,773 | ) | |||||||||||||||
Net cash used in investing activities | (4,188,719 | ) | 10,037 | (4,178,682 | ) | (3,205,856 | ) | 7,254 | (3,198,602 | ) | |||||||||||||||
Net cash provided by financing activities | 3,565,121 | — | 3,565,121 | 3,183,719 | — | 3,183,719 | |||||||||||||||||||
Net increase in cash and cash equivalents | 11,848 | — | 11,848 | 75,765 | — | 75,765 | |||||||||||||||||||
Cash and cash equivalents at beginning of year | 76,048 | — | 76,048 | 283 | — | 283 | |||||||||||||||||||
Cash and cash equivalents at end of year | $ | 87,896 | $ | — | $ | 87,896 | $ | 76,048 | $ | — | $ | 76,048 | |||||||||||||
Summary_of_Significant_Account3
Summary of Significant Accounting Policies - Additional Information (Detail) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Loan | |||
Entity | |||
Net Investment Income [Line Items] | ' | ' | ' |
Percentage of net income to be distributed as cash dividend in future | 90.00% | ' | ' |
Number of variable interest entities which company is the primary beneficiary | 2 | ' | ' |
Maturity period of deposits with financial institution | '90 days and less | ' | ' |
Percentage of servicing fee | 12.00% | ' | ' |
Basis point spread to calculate performance based incentive fee payable rate | 'One month LIBOR + 275 bps | ' | ' |
Percentage added to base rate for performance based incentive fee payable | 2.75% | ' | ' |
Number of advance loan rate types | 6 | ' | ' |
Ordinary share equivalents or other securities that could potentially dilute basic earnings per share | 0 | 0 | 0 |
Ocwen | ' | ' | ' |
Net Investment Income [Line Items] | ' | ' | ' |
Additional markup on actual cost incurred | 15.00% | ' | ' |
Summary_of_Assets_and_Liabilit
Summary of Assets and Liabilities of SPEs (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | ||
In Thousands, unless otherwise specified | ||||
Financial Assets and Liabilities [Line Items] | ' | ' | ||
Match funded advances | $6,387,781 | $3,098,198 | ||
Related party receivables | 70,049 | 28,271 | ||
Other assets | 130,153 | 79,091 | ||
Total assets | 7,310,672 | 3,578,059 | ||
Match funded liabilities | 5,715,622 | [1] | 2,690,821 | |
Other liabilities | 11,884 | 4,233 | ||
Total liabilities | 6,094,225 | 2,704,680 | ||
Variable Interest Entity, Primary Beneficiary | ' | ' | ||
Financial Assets and Liabilities [Line Items] | ' | ' | ||
Match funded advances | 6,387,781 | 3,098,198 | ||
Related party receivables | 60,239 | [2] | 21,265 | [2] |
Other assets | 119,902 | [3] | 77,110 | [3] |
Total assets | 6,567,922 | 3,196,573 | ||
Match funded liabilities | 5,715,622 | 2,690,821 | ||
Other liabilities | 4,673 | 2,203 | ||
Total liabilities | $5,720,295 | $2,693,024 | ||
[1] | The expected maturity date is the date on which the revolving period ends under each advance facility note and repayment of the outstanding balance must begin if the note is not renewed or extended. | |||
[2] | Relates to collections made by Ocwen on outstanding Match funded advances. This receivable represents the portion of Match funded advance collections that were in-transit to pay down our Match funded liabilities as of December 31, 2013 and 2012. See Note 14 for more information about our Related party receivables. | |||
[3] | Other assets principally include debt service accounts and debt issuance costs. See Note 5 for more information about our Other assets. |
Assets_Acquired_and_Liabilitie2
Assets Acquired and Liabilities Assumed - Additional Information (Detail) (USD $) | Mar. 05, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Mar. 31, 2012 |
Purchase Agreement | Purchase Agreement | Purchase Agreement | Purchase Agreement | Purchase Agreement | Purchase Agreement | Purchase Agreement | Purchase Agreement | Purchase Agreement | Purchase Agreement | Purchase Agreement | Purchase Agreement | Purchase Agreement | Purchase Agreement | Ocwen | Ocwen | Ocwen | ||
Property | Mortgage Loans One | Mortgage Loans Two | Mortgage Loans Three | Mortgage Loans Four | Purchase Six | Purchase Seven | Purchase Eight | Purchase Nine | Purchase One | Purchase Two | Purchase Three | Purchase Four | Purchase Five | |||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Date of additional asset purchase supplement | ' | ' | ' | ' | ' | ' | 13-Mar-13 | 21-May-13 | 1-Jul-13 | 25-Oct-13 | 1-May-12 | 1-Aug-12 | 13-Sep-12 | 28-Sep-12 | 26-Dec-12 | ' | ' | ' |
Unpaid principal balance of assets purchased | $15,200,000,000 | $67,500,000,000 | $15,900,000,000 | $10,600,000,000 | $83,300,000,000 | $9,900,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Purchase price on initial purchased assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $4,257,121,000 | $3,220,183,000 | $138,792,000 |
Number of additional asset purchases | ' | 5 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Summary_of_Purchase_Price_of_A
Summary of Purchase Price of Assets and Liabilities (Detail) (Ocwen, USD $) | 12 Months Ended | ||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Mar. 31, 2012 | ||
Business Acquisition [Line Items] | ' | ' | ' | ||
Other assets | ' | $22,136 | [1] | ' | |
Notes receivable - Rights to MSRs | 417,167 | 316,622 | ' | ||
Other liabilities | ' | -841 | [1] | ' | |
Net assets of Advance SPE | ' | 76,334 | ' | ||
Purchase price | 4,257,121 | 3,220,183 | 138,792 | ||
Amount due to Ocwen for post-closing adjustments | ' | -1,410 | ' | ||
Cash paid to settle previous post-close adjustments | 1,410 | ' | ' | ||
Mortgage Servicing Rights | ' | ' | ' | ||
Business Acquisition [Line Items] | ' | ' | ' | ||
Match funded advances | 3,839,954 | [2] | 2,827,227 | [1] | ' |
Special Purpose Entities | ' | ' | ' | ||
Business Acquisition [Line Items] | ' | ' | ' | ||
Match funded advances | ' | 413,374 | [1] | ' | |
Advances To Suppliers | ' | ' | ' | ||
Business Acquisition [Line Items] | ' | ' | ' | ||
Total cash used | 4,258,531 | 3,218,773 | ' | ||
Match funded liabilities | ' | -358,335 | [1] | ' | |
Sources Of Supply | ' | ' | ' | ||
Business Acquisition [Line Items] | ' | ' | ' | ||
Cash on-hand | 807,268 | 824,446 | ' | ||
Match funded liabilities | 3,451,263 | 2,394,327 | ' | ||
Initial purchase | ' | ' | ' | ||
Business Acquisition [Line Items] | ' | ' | ' | ||
Other assets | ' | 22,136 | [1] | ' | |
Notes receivable - Rights to MSRs | ' | 62,458 | ' | ||
Other liabilities | ' | -841 | [1] | ' | |
Net assets of Advance SPE | ' | 76,334 | ' | ||
Purchase price | ' | 138,792 | ' | ||
Initial purchase | Special Purpose Entities | ' | ' | ' | ||
Business Acquisition [Line Items] | ' | ' | ' | ||
Match funded advances | ' | 413,374 | [1] | ' | |
Initial purchase | Advances To Suppliers | ' | ' | ' | ||
Business Acquisition [Line Items] | ' | ' | ' | ||
Total cash used | ' | 138,792 | ' | ||
Match funded liabilities | ' | -358,335 | [1] | ' | |
Initial purchase | Sources Of Supply | ' | ' | ' | ||
Business Acquisition [Line Items] | ' | ' | ' | ||
Cash on-hand | ' | 138,792 | ' | ||
Subsequent purchases | ' | ' | ' | ||
Business Acquisition [Line Items] | ' | ' | ' | ||
Notes receivable - Rights to MSRs | ' | 254,164 | ' | ||
Purchase price | ' | 3,081,391 | ' | ||
Amount due to Ocwen for post-closing adjustments | ' | -1,410 | ' | ||
Subsequent purchases | Mortgage Servicing Rights | ' | ' | ' | ||
Business Acquisition [Line Items] | ' | ' | ' | ||
Match funded advances | ' | 2,827,227 | [1] | ' | |
Subsequent purchases | Advances To Suppliers | ' | ' | ' | ||
Business Acquisition [Line Items] | ' | ' | ' | ||
Total cash used | ' | 3,079,981 | ' | ||
Subsequent purchases | Sources Of Supply | ' | ' | ' | ||
Business Acquisition [Line Items] | ' | ' | ' | ||
Cash on-hand | ' | 685,654 | ' | ||
Match funded liabilities | ' | $2,394,327 | ' | ||
[1] | The cash used to purchase these assets and assume these liabilities are shown net within the "Acquisition of advances and other assets (net of liabilities assumed) in connection with the purchase of Notes receivable - Rights to MSRs" of the Consolidated Statement of Cash Flows. | ||||
[2] | The cash used to purchase these assets are shown within the "Acquisition of advances and other assets (net of liabilities assumed) in connection with the purchase of Notes receivable - Rights to MSRs" of the Consolidated Statement of Cash Flows. |
Fair_Value_of_Financial_Instru2
Fair Value of Financial Instruments - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2013 | |
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | ' |
Interest rate to calculate the cost of servicing advances | '1-Month LIBOR + 3.75% |
Percentage added to base rate for interest rate | 3.75% |
Minimum | ' |
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | ' |
Discount rate of risk of earning of future income streams | 15.00% |
Mortgage loan prepayment rate | 12.00% |
Mortgage loan delinquency rate | 15.00% |
Maximum | ' |
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | ' |
Discount rate of risk of earning of future income streams | 22.00% |
Mortgage loan prepayment rate | 28.00% |
Mortgage loan delinquency rate | 35.00% |
Fair_Value_and_Changes_in_Asse
Fair Value and Changes in Assets and Liabilities Measured on Recurring Basis (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | |
In Thousands, unless otherwise specified | |||
Financial assets: | ' | ' | |
Derivative financial instruments | $3,835 | [1] | ' |
Fair Value | ' | ' | |
Financial assets: | ' | ' | |
Total financial assets | 6,387,781 | 3,098,198 | |
Financial liabilities: | ' | ' | |
Total financial liabilities | 6,047,325 | 2,697,840 | |
Recurring, Fair Value | Fair Value | ' | ' | |
Financial assets: | ' | ' | |
Notes receivable - Rights to MSRs | 633,769 | 296,451 | |
Derivative financial instruments | 3,835 | ' | |
Total financial assets | 637,604 | 296,451 | |
Financial liabilities: | ' | ' | |
Derivative financial instruments | 529 | 1,076 | |
Total financial liabilities | 529 | 1,076 | |
Recurring, Fair Value | Fair Value | Level 3 | ' | ' | |
Financial assets: | ' | ' | |
Notes receivable - Rights to MSRs | 633,769 | 296,451 | |
Derivative financial instruments | 3,835 | ' | |
Total financial assets | 637,604 | 296,451 | |
Financial liabilities: | ' | ' | |
Derivative financial instruments | 529 | 1,076 | |
Total financial liabilities | $529 | $1,076 | |
[1] | See Notes 1, 3 and 9 for more information regarding our use of derivatives. |
Reconciliation_of_Changes_in_F
Reconciliation of Changes in Fair Value (Detail) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | ||
Notes Receivable - Rights to MSRs | ' | ' | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ||
Beginning balance | $296,451 | ' | ||
Purchases and reductions: | ' | ' | ||
Purchases | 417,167 | 316,622 | ||
Reductions | -79,849 | -20,171 | ||
Total | 337,318 | 296,451 | ||
Changes in fair value : | ' | ' | ||
Transfers in or out of Level 3 | ' | ' | ||
Ending balance | 633,769 | 296,451 | ||
Derivative Financial Instruments | ' | ' | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ||
Beginning balance | -1,076 | ' | ||
Changes in fair value : | ' | ' | ||
Included in other comprehensive income(loss) | 4,382 | [1] | -1,076 | [1] |
Total | 4,382 | -1,076 | ||
Transfers in or out of Level 3 | ' | ' | ||
Ending balance | $3,306 | ($1,076) | ||
[1] | These pre-tax gains (losses) are attributable to derivatives still held at December 31, 2013 and 2012. |
Effect_on_Fair_Value_of_Note_R
Effect on Fair Value of Note Receivable - Rights to MSRs (Detail) (Notes Receivable - Rights to MSRs, USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Notes Receivable - Rights to MSRs | ' | ' |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ' | ' |
Discount Rates 100 bps adverse change | ($12,988) | ($6,049) |
Prepayment Speeds 10% adverse change | -22,537 | -9,715 |
Delinquency Rates 10% adverse change | ($72,560) | ($39,628) |
Quantitative_Information_on_Si
Quantitative Information on Significant Observable Inputs Used for Valuing Note Receivable - Rights to MSRs (Detail) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Minimum | ' | ' |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ' | ' |
Discount Rates | 15.00% | ' |
Prepayment Speeds | 12.00% | ' |
Delinquency Rates | 15.00% | ' |
Maximum | ' | ' |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ' | ' |
Discount Rates | 22.00% | ' |
Prepayment Speeds | 28.00% | ' |
Delinquency Rates | 35.00% | ' |
Notes Receivable - Rights to MSRs | ' | ' |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ' | ' |
Weighted Average - Discount Rates | 20.00% | 20.00% |
Weighted Average - Prepayment Speeds | 19.00% | 19.00% |
Weighted Average - Delinquency Rates | 25.00% | 29.00% |
Notes Receivable - Rights to MSRs | Minimum | ' | ' |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ' | ' |
Discount Rates | 15.00% | 15.00% |
Prepayment Speeds | 12.00% | 12.00% |
Delinquency Rates | 15.00% | 15.00% |
Notes Receivable - Rights to MSRs | Maximum | ' | ' |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ' | ' |
Discount Rates | 22.00% | 22.00% |
Prepayment Speeds | 28.00% | 27.00% |
Delinquency Rates | 35.00% | 35.00% |
Carrying_Values_and_Fair_Value
Carrying Values and Fair Value Estimates of Financial Instruments Not Carried at Fair Value (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | |
In Thousands, unless otherwise specified | |||
Financial assets: | ' | ' | |
Match funded advances | $6,387,781 | $3,098,198 | |
Financial liabilities: | ' | ' | |
Match funded liabilities | 5,715,622 | [1] | 2,690,821 |
Other borrowings | 343,386 | ' | |
Carrying Value | ' | ' | |
Financial assets: | ' | ' | |
Match funded advances | 6,387,781 | 3,098,198 | |
Total financial assets | 6,387,781 | 3,098,198 | |
Financial liabilities: | ' | ' | |
Match funded liabilities | 5,715,622 | 2,690,821 | |
Other borrowings | 343,386 | ' | |
Total financial liabilities | 6,059,008 | 2,690,821 | |
Fair Value | ' | ' | |
Financial assets: | ' | ' | |
Match funded advances | 6,387,781 | 3,098,198 | |
Total financial assets | 6,387,781 | 3,098,198 | |
Financial liabilities: | ' | ' | |
Match funded liabilities | 5,700,934 | 2,697,840 | |
Other borrowings | 346,391 | ' | |
Total financial liabilities | $6,047,325 | $2,697,840 | |
[1] | The expected maturity date is the date on which the revolving period ends under each advance facility note and repayment of the outstanding balance must begin if the note is not renewed or extended. |
Match_Funded_Advances_on_Resid
Match Funded Advances on Residential Loans (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items] | ' | ' |
Match funded advances | $6,387,781 | $3,098,198 |
Variable Interest Entities | ' | ' |
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items] | ' | ' |
Principal and interest advances | 2,632,092 | 1,231,471 |
Taxes and insurance advances | 2,723,390 | 1,399,813 |
Corporate advances | 1,032,299 | 466,914 |
Match funded advances | $6,387,781 | $3,098,198 |
Other_Assets_Detail
Other Assets (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | ||
In Thousands, unless otherwise specified | ||||
Schedule of Other Assets [Line Items] | ' | ' | ||
Debt service accounts | $103,910 | [1] | $67,776 | [1] |
Debt issuance costs | 21,165 | [2] | 9,278 | [2] |
Interest-earning collateral deposits | 1,075 | [3] | 1,904 | [3] |
Derivative financial instruments | 3,835 | [4] | ' | |
Other | 168 | 133 | ||
Total | $130,153 | $79,091 | ||
[1] | Under our advance financing facilities, we are contractually required to remit collections on pledged advances to the trustee within two days of receipt. We do not use the collected funds to reduce the related Match funded liabilities until the payment dates specified in the indenture. The balance also includes amounts that we set aside to provide for possible shortfalls in the funds available to pay certain expenses and interest. | |||
[2] | Costs relate to Match funded liabilities and Other borrowings. We amortize these costs to the earlier of the scheduled amortization date, contractual maturity date or prepayment date of the debt. | |||
[3] | Represents cash collateral held by our counterparty as part of our interest rate swap agreements. | |||
[4] | See Notes 1, 3 and 9 for more information regarding our use of derivatives. |
Other_Assets_Parenthetical_Det
Other Assets (Parenthetical) (Detail) | 12 Months Ended |
Dec. 31, 2013 | |
Schedule of Other Assets [Line Items] | ' |
Period to remit collections on pledged advances to the trustee | '2 days |
Match_Funded_Liabilities_Detai
Match Funded Liabilities (Detail) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | ||
Debt Instrument [Line Items] | ' | ' | ||
Percentage added to base rate for interest rate | 3.75% | ' | ||
Debt Instrument, Unused Borrowing Capacity, Amount | $727,878 | ' | ||
Ending Balance | 5,715,622 | [1] | 2,690,821 | |
Variable Interest Entities | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Debt Instrument, Unused Borrowing Capacity, Amount | 727,878 | [2] | ' | |
Ending Balance | 5,715,622 | [3],[4],[5],[6],[7] | 2,690,821 | |
Variable Interest Entities | Series 2012 T1 Term Notes | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Interest rate to calculate the cost of servicing advances | '134 - 396 bps | [8],[9] | ' | |
Debt instrument, maturity date | 1-Oct-43 | [10],[8] | ' | |
Debt instrument, amortization date | '2013-10 | [10],[8] | ' | |
Ending Balance | ' | 250,000 | [8] | |
Variable Interest Entities | Series 2012 T1 Term Notes | Minimum | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Interest rate | 1.34% | [8] | ' | |
Variable Interest Entities | Series 2012 T1 Term Notes | Maximum | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Interest rate | 3.96% | [8] | ' | |
Variable Interest Entities | Series 2012 T2 Term Notes | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Interest rate to calculate the cost of servicing advances | '199 - 494 bps | [8],[9] | ' | |
Debt instrument, maturity date | 1-Oct-45 | [10],[8] | ' | |
Debt instrument, amortization date | '2015-10 | [10],[8] | ' | |
Ending Balance | 450,000 | [3],[4],[5],[6],[7],[8] | 450,000 | [8] |
Variable Interest Entities | Series 2012 T2 Term Notes | Minimum | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Interest rate | 1.99% | [8] | ' | |
Variable Interest Entities | Series 2012 T2 Term Notes | Maximum | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Interest rate | 4.94% | [8] | ' | |
Variable Interest Entities | Series 2013 T1 Term Notes | Group 1 | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Interest rate to calculate the cost of servicing advances | '90 - 249 bps | [8],[9] | ' | |
Debt instrument, maturity date | 1-Jan-44 | [10],[8] | ' | |
Debt instrument, amortization date | '2014-01 | [10],[8] | ' | |
Ending Balance | 650,000 | [3],[4],[5],[6],[7],[8] | ' | |
Variable Interest Entities | Series 2013 T1 Term Notes | Group 1 | Minimum | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Interest rate | 0.90% | [8] | ' | |
Variable Interest Entities | Series 2013 T1 Term Notes | Group 1 | Maximum | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Interest rate | 2.49% | [8] | ' | |
Variable Interest Entities | Series 2013 T1 Term Notes | Group 2 | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Interest rate to calculate the cost of servicing advances | '150 - 323 bps | [8],[9] | ' | |
Debt instrument, maturity date | 1-Jan-46 | [10],[8] | ' | |
Debt instrument, amortization date | '2016-01 | [10],[8] | ' | |
Ending Balance | 350,000 | [3],[4],[5],[6],[7],[8] | ' | |
Variable Interest Entities | Series 2013 T1 Term Notes | Group 2 | Minimum | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Interest rate | 1.50% | [8] | ' | |
Variable Interest Entities | Series 2013 T1 Term Notes | Group 2 | Maximum | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Interest rate | 3.23% | [8] | ' | |
Variable Interest Entities | Series 2013 T1 Term Notes | Group 3 | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Interest rate to calculate the cost of servicing advances | '229 - 446 bps | [8],[9] | ' | |
Debt instrument, maturity date | 1-Jan-48 | [10],[8] | ' | |
Debt instrument, amortization date | '2018-01 | [10],[8] | ' | |
Ending Balance | 150,000 | [3],[4],[5],[6],[7],[8] | ' | |
Variable Interest Entities | Series 2013 T1 Term Notes | Group 3 | Minimum | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Interest rate | 2.29% | [8] | ' | |
Variable Interest Entities | Series 2013 T1 Term Notes | Group 3 | Maximum | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Interest rate | 4.46% | [8] | ' | |
Variable Interest Entities | Series 2013 T2 Term Notes | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Interest rate to calculate the cost of servicing advances | '115 - 239 bps | [8],[9] | ' | |
Debt instrument, maturity date | 1-May-44 | [10],[8] | ' | |
Debt instrument, amortization date | '2015-05 | [10],[8] | ' | |
Ending Balance | 375,000 | [3],[4],[5],[6],[7],[8] | ' | |
Variable Interest Entities | Series 2013 T2 Term Notes | Minimum | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Interest rate | 1.15% | [8] | ' | |
Variable Interest Entities | Series 2013 T2 Term Notes | Maximum | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Interest rate | 2.39% | [8] | ' | |
Variable Interest Entities | Series 2013 T3 Term Notes | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Interest rate to calculate the cost of servicing advances | '179 - 313 bps | [8],[9] | ' | |
Debt instrument, maturity date | 1-May-46 | [10],[8] | ' | |
Debt instrument, amortization date | '2017-05 | [10],[8] | ' | |
Ending Balance | 475,000 | [3],[4],[5],[6],[7],[8] | ' | |
Variable Interest Entities | Series 2013 T3 Term Notes | Minimum | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Interest rate | 1.79% | [8] | ' | |
Variable Interest Entities | Series 2013 T3 Term Notes | Maximum | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Interest rate | 3.13% | [8] | ' | |
Variable Interest Entities | Series 2013 T4 Term Notes | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Interest rate to calculate the cost of servicing advances | '118 - 232 bps | [8],[9] | ' | |
Debt instrument, maturity date | 1-Aug-44 | [10],[8] | ' | |
Debt instrument, amortization date | '2014-08 | [10],[8] | ' | |
Ending Balance | 200,000 | [3],[4],[5],[6],[7],[8] | ' | |
Variable Interest Entities | Series 2013 T4 Term Notes | Minimum | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Interest rate | 1.18% | [8] | ' | |
Variable Interest Entities | Series 2013 T4 Term Notes | Maximum | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Interest rate | 2.32% | [8] | ' | |
Variable Interest Entities | Series 2013 T5 Term Notes | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Interest rate to calculate the cost of servicing advances | '198 - 331 bps | [8],[9] | ' | |
Debt instrument, maturity date | 1-Aug-46 | [10],[8] | ' | |
Debt instrument, amortization date | '2016-08 | [10],[8] | ' | |
Ending Balance | 200,000 | [3],[4],[5],[6],[7],[8] | ' | |
Variable Interest Entities | Series 2013 T5 Term Notes | Minimum | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Interest rate | 1.98% | [8] | ' | |
Variable Interest Entities | Series 2013 T5 Term Notes | Maximum | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Interest rate | 3.31% | [8] | ' | |
Variable Interest Entities | Series 2013 T6 Term Notes | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Interest rate to calculate the cost of servicing advances | '129 - 223 bps | [8],[9] | ' | |
Debt instrument, maturity date | 1-Sep-44 | [10],[8] | ' | |
Debt instrument, amortization date | '2014-09 | [10],[8] | ' | |
Ending Balance | 350,000 | [3],[4],[5],[6],[7],[8] | ' | |
Variable Interest Entities | Series 2013 T6 Term Notes | Minimum | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Interest rate | 1.29% | [8] | ' | |
Variable Interest Entities | Series 2013 T6 Term Notes | Maximum | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Interest rate | 2.23% | [8] | ' | |
Variable Interest Entities | Series 2013 T7 Term Notes | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Interest rate to calculate the cost of servicing advances | '198 - 302 bps | [8],[9] | ' | |
Debt instrument, maturity date | 1-Nov-46 | [10],[8] | ' | |
Debt instrument, amortization date | '2016-11 | [10],[8] | ' | |
Ending Balance | 300,000 | [3],[4],[5],[6],[7],[8] | ' | |
Variable Interest Entities | Series 2013 T7 Term Notes | Minimum | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Interest rate | 1.98% | [8] | ' | |
Variable Interest Entities | Series 2013 T7 Term Notes | Maximum | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Interest rate | 3.02% | [8] | ' | |
Variable Interest Entities | Series 2012 VF 1 Notes | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Debt instrument, maturity date | 1-Aug-44 | [10],[11],[8] | ' | |
Debt instrument, amortization date | '2014-08 | [10],[11],[8] | ' | |
Debt Instrument, Unused Borrowing Capacity, Amount | 230,950 | [11],[2],[8] | ' | |
Ending Balance | 469,050 | [11],[3],[4],[5],[6],[7],[8] | 339,465 | [11],[8] |
Interest rate to calculate the cost of servicing advances | '1-Month LIBOR + 110 - 340 bps | [11],[8],[9] | ' | |
Variable Interest Entities | Series 2012 VF 1 Notes | Minimum | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Percentage added to base rate for interest rate | 1.10% | [11],[8] | ' | |
Variable Interest Entities | Series 2012 VF 1 Notes | Maximum | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Percentage added to base rate for interest rate | 3.40% | [11],[8] | ' | |
Variable Interest Entities | Series 2012 VF 2 Notes | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Debt instrument, maturity date | 1-Aug-44 | [10],[11],[8] | ' | |
Debt instrument, amortization date | '2014-08 | [10],[11],[8] | ' | |
Debt Instrument, Unused Borrowing Capacity, Amount | 230,950 | [11],[2],[8] | ' | |
Ending Balance | 469,050 | [11],[3],[4],[5],[6],[7],[8] | 678,928 | [11],[8] |
Interest rate to calculate the cost of servicing advances | '1-Month LIBOR + 110 - 340 bps | [11],[8],[9] | ' | |
Variable Interest Entities | Series 2012 VF 2 Notes | Minimum | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Percentage added to base rate for interest rate | 1.10% | [11],[8] | ' | |
Variable Interest Entities | Series 2012 VF 2 Notes | Maximum | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Percentage added to base rate for interest rate | 3.40% | [11],[8] | ' | |
Variable Interest Entities | Series 2013 VF 3 Notes | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Debt instrument, maturity date | 1-Aug-44 | [10],[11],[8] | ' | |
Debt instrument, amortization date | '2014-08 | [10],[11],[8] | ' | |
Debt Instrument, Unused Borrowing Capacity, Amount | 230,950 | [11],[2],[8] | ' | |
Ending Balance | 469,050 | [11],[3],[4],[5],[6],[7],[8] | 678,928 | [11],[8] |
Interest rate to calculate the cost of servicing advances | '1-Month LIBOR + 110 - 340 bps | [11],[8],[9] | ' | |
Variable Interest Entities | Series 2013 VF 3 Notes | Minimum | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Percentage added to base rate for interest rate | 1.10% | [11],[8] | ' | |
Variable Interest Entities | Series 2013 VF 3 Notes | Maximum | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Percentage added to base rate for interest rate | 3.40% | [11],[8] | ' | |
Variable Interest Entities | Series 2013 VF 1 Notes | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Debt instrument, maturity date | 1-Feb-44 | [10],[12],[8] | ' | |
Debt instrument, amortization date | '2014-02 | [10],[12],[8] | ' | |
Debt Instrument, Unused Borrowing Capacity, Amount | 35,028 | [12],[2],[8] | ' | |
Ending Balance | 514,972 | [12],[3],[4],[5],[6],[7],[8] | ' | |
Interest rate to calculate the cost of servicing advances | '1-Month LIBOR + 195 - 290 bps | [12],[8],[9] | ' | |
Variable Interest Entities | Series 2013 VF 1 Notes | Minimum | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Percentage added to base rate for interest rate | 1.95% | [8] | ' | |
Variable Interest Entities | Series 2013 VF 1 Notes | Maximum | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Percentage added to base rate for interest rate | 2.90% | [8] | ' | |
Variable Interest Entities | Class A Term Money Market Fund Note | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Percentage added to base rate for interest rate | 0.20% | [8] | ' | |
Debt instrument, maturity date | 1-Sep-14 | [10],[13],[8] | ' | |
Debt instrument, amortization date | '2014-01 | [10],[13],[8] | ' | |
Ending Balance | 265,000 | [13],[3],[4],[5],[6],[7],[8] | 183,462 | [13],[8] |
Interest rate to calculate the cost of servicing advances | '1-Month LIBOR + 20 bps | [13],[8],[9] | ' | |
Variable Interest Entities | Class A Draw Money Market Fund Note | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Percentage added to base rate for interest rate | 1.10% | [8] | ' | |
Debt instrument, maturity date | 1-Sep-44 | [10],[13],[8] | ' | |
Debt instrument, amortization date | '2014-09 | [10],[13],[8] | ' | |
Ending Balance | ' | 81,538 | [13],[8] | |
Interest rate to calculate the cost of servicing advances | '1-Month LIBOR + 110 bps | [13],[8],[9] | ' | |
Variable Interest Entities | Class B Term Money Market Fund Note | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Interest rate | 2.75% | [8] | ' | |
Interest rate to calculate the cost of servicing advances | '275 bps | [8],[9] | ' | |
Debt instrument, maturity date | 1-Sep-44 | [10],[8] | ' | |
Debt instrument, amortization date | '2014-09 | [10],[8] | ' | |
Ending Balance | $28,500 | [3],[4],[5],[6],[7],[8] | $28,500 | [8] |
[1] | The expected maturity date is the date on which the revolving period ends under each advance facility note and repayment of the outstanding balance must begin if the note is not renewed or extended. | |||
[2] | Our unused borrowing capacity is available to us if we have additional eligible collateral to pledge and meet other borrowing conditions. We pay a 0.50% or 0.75% fee on the unused borrowing capacity which varies by facility. | |||
[3] | On May 21, 2013, we completed the issuance of $375,000 of two-year and $475,000 of four-year term notes. | |||
[4] | On August 8, 2013, we completed the issuance of $200,000 of one-year and $200,000 of three-year term notes. | |||
[5] | On September 18, 2013, we completed the issuance of a $350,000 one-year term note. | |||
[6] | On January 22, 2013, we completed the issuance of $650,000 of one-year, $350,000 of three-year and $150,000 of five-year term notes. | |||
[7] | On November 26, 2013, we completed the issuance of a $300,000 three-year term note. | |||
[8] | Each term note and variable funding note issuance has four classes, an A, B, C, and D class. | |||
[9] | The weighted average interest rate at December 31, 2013 was 1.64%. We pay interest monthly. | |||
[10] | The maturity date is the due date for all outstanding balances. The amortization date is the date on which the revolving period ends under each advance facility note and repayment of the outstanding balance must begin if the note is not renewed or extended. If an advance facility note is not refinanced on the amortization date, all collections that represent the repayment of advances pledged to the facilities must be applied to reduce the balance of the note outstanding, and any new advances are ineligible to be financed. To the extent that we have sufficient unused borrowing capacity on our Variable Funding Notes, we can use such excess capacity to finance additional Match funded advances rather than extending or refinancing a term note that has reached the amortization date. | |||
[11] | These Variable Funding Notes were amended during August 2013 to extend the amortization date and maturity date by a year and resulted in new interest rate spreads compared to December 31, 2012. Variable Funding Note balances fluctuate based on Match funded advance activity and our ability to issue fixed rate term notes. | |||
[12] | On July 1, 2013, we issued a new Variable Funding Note series as part of the Follow On 3 acquisition. | |||
[13] | The Class A Term Money Market Fund Note and Class A Draw Money Market Fund Note have a combined maximum borrowing capacity of $265,000. By design, the Class A Term Money Market Fund Note balance is reduced at scheduled times and there is an equally offsetting increase to the Class A Draw Money Market Fund Note. The combined balance of these notes was equal to $265,000 at December 31, 2013 and 2012. On September 26, 2013, we placed a new Money Market Fund Note at a reduced interest rate and amended the related Money Market Fund Draw Note to reduce the interest rate. The amortization date for the Class A Term Money Market Fund Note represents the commencement date for scheduled repayments. |
Match_Funded_Liabilities_Paren
Match Funded Liabilities (Parenthetical) (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Sep. 18, 2013 | Aug. 08, 2013 | Jan. 22, 2013 | Nov. 26, 2013 | Aug. 08, 2013 | Jan. 22, 2013 | Jan. 22, 2013 | 21-May-13 | 21-May-13 |
In Thousands, unless otherwise specified | Minimum | Maximum | One-Year Term Notes | One-Year Term Notes | One-Year Term Notes | Three-Year Term Notes | Three-Year Term Notes | Three-Year Term Notes | Five-year term notes | Term Note Two | Term Note Four | ||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted average interest rate | 1.64% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of fee on the unused borrowing | ' | ' | 0.50% | 0.75% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt instrument issuance | ' | ' | ' | ' | $350,000 | $200,000 | $650,000 | $300,000 | $200,000 | $350,000 | $150,000 | $375,000 | $475,000 |
Maturity period for note | ' | ' | ' | ' | '1 year | '1 year | '1 year | '3 years | '3 years | '3 years | '5 years | '2 years | '4 years |
Combined maximum borrowing capacity | $265,000 | $265,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Match_Funded_Liabilities_Addit
Match Funded Liabilities - Additional Information (Detail) (USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Debt Instrument [Line Items] | ' |
Unused borrowing capacity | $727,878 |
Analysis_of_Borrowing_by_Matur
Analysis of Borrowing by Maturity (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | |
In Thousands, unless otherwise specified | |||
Long Term Debt Maturities Repayments Of Principal [Line Items] | ' | ' | |
2014 | $3,415,622 | [1] | ' |
2015 | 825,000 | [1] | ' |
2016 | 850,000 | [1] | ' |
2017 | 475,000 | [1] | ' |
2018 | 150,000 | [1] | ' |
Total | $5,715,622 | [1] | $2,690,821 |
[1] | The expected maturity date is the date on which the revolving period ends under each advance facility note and repayment of the outstanding balance must begin if the note is not renewed or extended. |
Other_Borrowings_Detail
Other Borrowings (Detail) (USD $) | Dec. 31, 2013 | |
In Thousands, unless otherwise specified | ||
Debt Instrument [Line Items] | ' | |
Other borrowings | $343,386 | |
Senior Secured Term Loan Facility | ' | |
Debt Instrument [Line Items] | ' | |
Other borrowings | $343,386 | [1] |
[1] | On June 27, 2013, we entered into a $350,000 senior secured term loan facility. The senior secured term loan facility has an expected maturity date of June 27, 2020 and an interest rate of 3.50% plus one month LIBOR, with a 1.00% LIBOR floor. As of December 31, 2013, the interest rate on our senior secured term loan facility was 4.50%. The senior secured term loan was issued at a discount to par and had a carrying value of $343,386 at December 31, 2013 which reflects an original issue discount of $5,250 that is being accreted into interest expense over the life of the borrowing. |
Other_Borrowings_Parenthetical
Other Borrowings (Parenthetical) (Detail) (USD $) | 12 Months Ended | 1 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Jun. 27, 2013 | Dec. 31, 2013 | |
Senior Secured Term Loan Facility | Senior Secured Term Loan Facility | |||
Debt Instrument [Line Items] | ' | ' | ' | |
Debt instrument face amount | ' | $350,000 | ' | |
Debt instrument, maturity date | ' | 27-Jun-20 | ' | |
Interest rate, description | ' | 'An interest rate of 3.50% plus one month LIBOR, with a 1.00% LIBOR floor. | ' | |
Percentage added to base rate for interest rate | 3.75% | 3.50% | ' | |
Floor of LIBOR | ' | 1.00% | ' | |
Debt instrument, interest rate | ' | ' | 4.50% | |
Debt instrument carrying amount | 343,386 | ' | 343,386 | [1] |
Debt instrument discount amount | ' | ' | $5,250 | |
[1] | On June 27, 2013, we entered into a $350,000 senior secured term loan facility. The senior secured term loan facility has an expected maturity date of June 27, 2020 and an interest rate of 3.50% plus one month LIBOR, with a 1.00% LIBOR floor. As of December 31, 2013, the interest rate on our senior secured term loan facility was 4.50%. The senior secured term loan was issued at a discount to par and had a carrying value of $343,386 at December 31, 2013 which reflects an original issue discount of $5,250 that is being accreted into interest expense over the life of the borrowing. |
Other_Borrowings_Additional_In
Other Borrowings - Additional Information (Detail) | Dec. 31, 2013 |
Debt to tangible equity ratio | 600.00% |
Borrowing base coverage ratio | 150.00% |
Analysis_of_Borrowing_by_Matur1
Analysis of Borrowing by Maturity - Senior Secured Term Loan Facility (Detail) (USD $) | Dec. 31, 2013 | |
In Thousands, unless otherwise specified | ||
Long Term Debt Maturities Repayments Of Principal [Line Items] | ' | |
2014 | $3,415,622 | [1] |
2015 | 825,000 | [1] |
2016 | 850,000 | [1] |
2017 | 475,000 | [1] |
Senior Secured Term Loan Facility | ' | |
Long Term Debt Maturities Repayments Of Principal [Line Items] | ' | |
2014 | 3,500 | |
2015 | 3,500 | |
2016 | 3,500 | |
2017 | 3,500 | |
2018 and thereafter | 334,250 | |
Total | $348,250 | |
[1] | The expected maturity date is the date on which the revolving period ends under each advance facility note and repayment of the outstanding balance must begin if the note is not renewed or extended. |
Increases_in_Number_of_Ordinar
Increases in Number of Ordinary Shares (Detail) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2010 | |
Stockholders Equity Note [Line Items] | ' | ' | ' |
Ordinary shares issued - beginning balance | 55,884,718 | 20,000 | 20,000 |
Issuance of new ordinary shares | 15,132,053 | 55,864,718 | ' |
Ordinary shares issued - ending balance | 71,016,771 | 55,884,718 | 20,000 |
Ordinary_Shares_Additional_Inf
Ordinary Shares - Additional Information (Detail) (USD $) | 12 Months Ended | 1 Months Ended | ||||||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Mar. 05, 2012 | Mar. 05, 2012 | Apr. 02, 2012 | Jun. 26, 2013 | Jan. 22, 2013 | Jun. 26, 2013 | Sep. 12, 2012 | Dec. 24, 2012 |
Initial Public Offering | Private Placement | Issuance of Additional Ordinary Shares under the IPO | Underwriters Exercise Of Overallotment Option | Underwriters Exercise Of Overallotment Option | Underwriters Exercise Of Overallotment Option | First Follow on Public Offering | Second Follow on Public Offering | |||||
Additional issued | ||||||||||||
Subsidiary, Sale of Stock [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of ordinary shares issued | 15,132,053 | 55,864,718 | ' | ' | 13,333,333 | 714,285 | 129,600 | 13,000,000 | 970,578 | 1,161,475 | ' | ' |
Total gross proceeds | $333,551 | $879,852 | ' | ' | $186,667 | $10,000 | $1,814 | $325,714 | ' | ' | $249,909 | $480,700 |
Net proceeds received | $334,390 | $885,457 | ' | ' | $170,486 | ' | $1,577 | $315,918 | $17,633 | ' | $236,034 | $462,261 |
Common stock, shares issued | 71,016,771 | 55,884,718 | 20,000 | 20,000 | ' | ' | ' | ' | ' | ' | 16,387,500 | 25,300,000 |
Ordinary shares underwriters Over-allotment exercisable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,137,500 | 3,795,000 |
Interest_Rate_Swaps_Detail
Interest Rate Swaps (Detail) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | ||
Derivatives, Fair Value [Line Items] | ' | ' | ||
Total asset derivatives, Notional Amount | $515,065 | ' | ||
Total asset derivatives, Fair Value | 3,835 | ' | ||
Total liability derivatives, Notional Amount | 438,130 | 414,631 | ||
Total liability derivatives, Fair Value | 529 | 1,076 | ||
Designated as Hedges | ' | ' | ||
Derivatives, Fair Value [Line Items] | ' | ' | ||
Total asset derivatives, Notional Amount | 515,065 | ' | ||
Total liability derivatives, Notional Amount | 438,130 | 414,631 | ||
Total liability derivatives, Fair Value | 529 | 1,076 | ||
Total asset derivatives, Fair Value | 3,835 | ' | ||
Designated as Hedges | Other Assets | Interest Rate Swap 4 | ' | ' | ||
Derivatives, Fair Value [Line Items] | ' | ' | ||
Total asset derivatives, Notional Amount | 177,056 | [1],[2] | ' | |
Total asset derivatives, Fair Value | 1,084 | [1],[2] | ' | |
Date Opened | 15-Sep-12 | [1],[2] | ' | |
Effective Date | 15-Sep-12 | [1],[2],[3] | ' | |
Maturity | 15-Aug-17 | [1],[2] | ' | |
We Pay | 0.52% | [1],[2] | ' | |
We Receive | '1-Month LIBOR | [1],[2] | ' | |
Designated as Hedges | Other Assets | Interest Rate Swap 5 | ' | ' | ||
Derivatives, Fair Value [Line Items] | ' | ' | ||
Total asset derivatives, Notional Amount | 338,009 | [1],[2] | ' | |
Total asset derivatives, Fair Value | 2,751 | [1],[2] | ' | |
Date Opened | 15-Jan-13 | [1],[2] | ' | |
Effective Date | 15-Jan-16 | [1],[2],[3] | ' | |
Maturity | 15-Dec-17 | [1],[2] | ' | |
We Pay | 1.40% | [1],[2] | ' | |
We Receive | '1-Month LIBOR | [1],[2] | ' | |
Designated as Hedges | Other Liabilities | Interest Rate Swap 1 | ' | ' | ||
Derivatives, Fair Value [Line Items] | ' | ' | ||
Total liability derivatives, Notional Amount | 102,522 | [1],[2] | 147,351 | [2] |
Total liability derivatives, Fair Value | 364 | [1],[2] | 759 | [2] |
Date Opened | 15-Mar-12 | [1],[2] | 15-Mar-12 | [2] |
Effective Date | 15-Mar-12 | [1],[2],[3] | 15-Mar-12 | [2],[3] |
Maturity | 15-Mar-16 | [1],[2] | 15-Mar-16 | [2] |
We Pay | 0.63% | [1],[2] | 0.63% | [2] |
We Receive | '1-Month LIBOR | [1],[2] | '1-Month LIBOR | [2] |
Designated as Hedges | Other Liabilities | Interest Rate Swap 2 | ' | ' | ||
Derivatives, Fair Value [Line Items] | ' | ' | ||
Total liability derivatives, Notional Amount | 28,565 | [1],[2] | 44,221 | [2] |
Total liability derivatives, Fair Value | 25 | [1],[2] | 174 | [2] |
Date Opened | 15-May-12 | [1],[2] | 15-May-12 | [2] |
Effective Date | 15-May-12 | [1],[2],[3] | 15-May-12 | [2],[3] |
Maturity | 15-May-16 | [1],[2] | 15-May-16 | [2] |
We Pay | 0.61% | [1],[2] | 0.61% | [2] |
We Receive | '1-Month LIBOR | [1],[2] | '1-Month LIBOR | [2] |
Designated as Hedges | Other Liabilities | Interest Rate Swap 3 | ' | ' | ||
Derivatives, Fair Value [Line Items] | ' | ' | ||
Total liability derivatives, Notional Amount | 307,043 | [1],[2] | 223,059 | [2] |
Total liability derivatives, Fair Value | $140 | [1],[2] | $143 | [2] |
Date Opened | 15-Jan-13 | [1],[2] | 15-Sep-12 | [2] |
Effective Date | 15-Jan-14 | [1],[2],[3] | 15-Sep-12 | [2],[3] |
Maturity | 15-Jul-14 | [1],[2] | 15-Aug-17 | [2] |
We Pay | 0.34% | [1],[2] | 0.52% | [2] |
We Receive | '1-Month LIBOR | [1],[2] | '1-Month LIBOR | [2] |
[1] | Projected net settlements for the next twelve months total approximately $1,118 of payments to our counterparties. | |||
[2] | There was an unrealized pre-tax gain of $4,382 related to our interest rate swaps included in AOCI for the year ended December 31, 2013, and an unrealized pre-tax loss of $1,076 related to our interest rate swaps included in AOCI for the year ended December 31, 2012. Given the current and expected effectiveness of our hedging arrangements, we do not expect any reclassifications from AOCI into earnings associated with hedging ineffectiveness related to these hedging arrangements during the next twelve months. | |||
[3] | The effective date of the swap is the date from which monthly net settlements begin to be computed. |
Derivative_Financial_Instrumen2
Derivative Financial Instruments - Additional Information (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | Cash Flow Hedging | Cash Flow Hedging | Interest Rate Swap |
Derivatives, Fair Value [Line Items] | ' | ' | ' |
Interest rate swaps to hedge against the effects of a change | ' | ' | '1-Month LIBOR |
Cash collateral right to reclaim of hedge agreements | $1,075 | $1,904 | ' |
Cash collateral obligated to return of hedge agreements | $3,500 | $1,904 | ' |
Interest_Rate_Swaps_Parentheti
Interest Rate Swaps (Parenthetical) (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Derivatives, Fair Value [Line Items] | ' | ' |
Projected cash flow hedge | $1,118 | ' |
Unrealized gains (losses) related to interest rate swap included in other comprehensive income | $4,382 | ($1,076) |
Summarization_of_Use_of_Deriva
Summarization of Use of Derivative (Detail) (Interest Rate Swap, USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Interest Rate Swap | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Notional beginning balance | $414,631 | ' |
Additions | 645,052 | 534,946 |
Maturities | ' | ' |
Terminations | ' | ' |
Amortization | 106,488 | 120,315 |
Notional ending balance | $953,195 | $414,631 |
Calculation_of_Interest_Income
Calculation of Interest Income on Notes Receivable (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Interest Income And Other Income Net [Line Items] | ' | ' |
Servicing fees collected | $633,377 | $117,789 |
Subservicing fee payable to Ocwen | 317,702 | 50,173 |
Net servicing fees retained by HLSS | 315,675 | 67,616 |
Reduction in Notes receivable - Rights to MSRs | 79,849 | 20,171 |
Total | $235,826 | $47,445 |
Interest_Income_Other_Detail
Interest Income Other (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Interest and Other Income [Line Items] | ' | ' |
Interest income other | $2,195 | $109 |
Custodial account interest | ' | ' |
Interest and Other Income [Line Items] | ' | ' |
Interest income other | 1,819 | ' |
Operating account interest | ' | ' |
Interest and Other Income [Line Items] | ' | ' |
Interest income other | $376 | $109 |
Components_of_Interest_Expense
Components of Interest Expense (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Interest Expense [Line Items] | ' | ' |
Match funded liabilities | $83,137 | $16,158 |
Other borrowings | 8,627 | ' |
Amortization of debt issuance costs | 16,950 | 6,960 |
Interest rate swaps | 1,357 | 939 |
Interest expense | $110,071 | $24,057 |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Schedule Of Income Tax [Line Items] | ' | ' | ' |
Effective income tax rate | 0.20% | 0.20% | 0.00% |
Tax Credit Carryforward | $0 | $0 | $0 |
Release of Valuation Allowance | -1,755,000 | ' | ' |
U.S. federal | ' | ' | ' |
Schedule Of Income Tax [Line Items] | ' | ' | ' |
NOL carryforwards | 0 | 2,827,000 | 0 |
Operating loss carryforward expiration date | 'Begin to expire in 2032 | ' | ' |
State and Local Jurisdiction | ' | ' | ' |
Schedule Of Income Tax [Line Items] | ' | ' | ' |
NOL carryforwards | $3,816,000 | $3,776,000 | $0 |
Operating loss carryforward expiration date | 'Begin to expire in 2022 | ' | ' |
Sources_of_Income_loss_Before_
Sources of Income (loss) Before Income Taxes (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Schedule of Income Before Income Tax [Line Items] | ' | ' | ' |
U.S. operations | $4,057 | ($3,430) | ($1) |
Non-U.S. operations | 113,834 | 23,093 | -272 |
Total | $117,891 | $19,663 | ($273) |
Provision_for_Income_Taxes_Det
Provision for Income Taxes (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Current: | ' | ' |
Federal | $920 | ' |
State | 193 | 46 |
Non-U.S. | 17 | ' |
Current income tax provision | 1,130 | 46 |
Deferred: | ' | ' |
Federal | -790 | ' |
State | -106 | ' |
Non-U.S. | ' | ' |
Deferred income tax (benefit) | -896 | ' |
Total income tax provision | $234 | $46 |
Net_Deferred_Tax_Recognized_De
Net Deferred Tax Recognized (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Deferred tax assets: | ' | ' |
NOL carryforwards | $25 | $1,188 |
Interest rate derivatives | ' | 408 |
Debt issuance costs | ' | 84 |
Accruals | 999 | 75 |
Total deferred tax assets | 1,024 | 1,755 |
Valuation allowance | ' | -1,755 |
Net deferred tax assets | 1,024 | ' |
Deferred tax liabilities: | ' | ' |
Interest rate derivatives | 1,139 | ' |
Debt issuance costs | 127 | ' |
Deferred tax liabilities | $1,266 | ' |
Reconciliation_of_Changes_in_V
Reconciliation of Changes in Valuation Allowance (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Valuation Allowance [Line Items] | ' | ' |
Beginning balance | $1,755 | ' |
Additions | ' | 1,755 |
Release of NOL carryforwards | -1,755 | ' |
Ending balance | ' | $1,755 |
Reconciliations_Between_Statut
Reconciliations Between Statutory Rate and Effective Rate on Income from Operation (Detail) | 12 Months Ended | ||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Schedule of Effective Tax Rate Reconciliation [Line Items] | ' | ' | ' | ||
Statutory rate | 34.00% | 34.00% | ' | ||
State and local income taxes | 0.10% | -0.70% | ' | ||
Benefit of Non-U.S. operations | -32.80% | [1] | -39.90% | [1] | ' |
Release of valuation allowance | -1.00% | 6.80% | ' | ||
Other | -0.10% | ' | ' | ||
Effective tax rate per Consolidated Statements of Operations | 0.20% | 0.20% | 0.00% | ||
[1] | The majority of our earnings are at Home Loan Servicing Solutions, Ltd., a Cayman Islands entity, which is not engaged in a U.S. trade or business and therefore is not subject to U.S. federal income taxation. |
Business_Segment_Reporting_Add
Business Segment Reporting - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2013 | |
Segment | |
Segment Reporting Information [Line Items] | ' |
Reportable business segment | 1 |
Transactions_with_Ocwen_under_
Transactions with Ocwen under Purchase Agreement (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Related Party Transaction [Line Items] | ' | ' |
Servicing fees collected | $633,377 | $117,789 |
Subservicing fee payable to Ocwen | 317,702 | 50,173 |
Net servicing fees retained by HLSS | 315,675 | 67,616 |
Reduction in Notes receivable - Rights to MSRs | 79,849 | 20,171 |
Interest income - notes receivable - Rights to MSRs | 235,826 | 47,445 |
Servicing advances purchased from Ocwen in the ordinary course of business | $8,781,034 | $1,303,955 |
Related_Party_Transactions_Add
Related Party Transactions - Additional Information (Detail) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | ||
Related Party Transaction [Line Items] | ' | ' | ||
Servicing advance collections, due from Ocwen | $70,049 | $28,271 | ||
Professional services fee earned | 1,811 | 2,316 | ||
Ocwen | ' | ' | ||
Related Party Transaction [Line Items] | ' | ' | ||
Servicing fees not yet remitted | 8,482 | [1] | 4,966 | [1] |
Subservicing fee owed to Ocwen | 8,114 | [2] | 890 | [2] |
Servicing advance collections, due from Ocwen | 60,239 | [3] | 21,265 | [3] |
Professional services fee earned | 1,811 | 2,316 | ||
Professional services fee incurred | 555 | 100 | ||
Ocwen | Due from Related Party | ' | ' | ||
Related Party Transaction [Line Items] | ' | ' | ||
Service fees with related parties | 655 | 1,322 | ||
Ocwen | Due to Related Party | ' | ' | ||
Related Party Transaction [Line Items] | ' | ' | ||
Service fees with related parties | 354 | 40 | ||
Altisource | ' | ' | ||
Related Party Transaction [Line Items] | ' | ' | ||
Professional services fee incurred | $845 | $655 | ||
[1] | Ocwen is required to remit to us servicing fees it collects on our behalf within two business days. The amount due from Ocwen at the dates indicated represents servicing fees collected but not remitted at the end of the month. We record servicing fee collections less the subservicing fee we pay to Ocwen as Interest income as shown in Note 10. | |||
[2] | The base fee and performance fee, if any, that comprise the servicing fee expense are calculated and paid to Ocwen within three business days following the end of the month. | |||
[3] | Upon collection, Ocwen is contractually obligated to remit Match funded advance collections to pay down our Match funded liabilities. This receivable represents the portion of Match funded advance collections that were in-transit to pay down our Match funded liabilities as of the dates indicated. |
Receivable_from_and_Payable_to
Receivable from and Payable to Related Parties (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | ||
In Thousands, unless otherwise specified | ||||
Related Party Transaction [Line Items] | ' | ' | ||
Advance collections | $70,049 | $28,271 | ||
Ocwen | ' | ' | ||
Related Party Transaction [Line Items] | ' | ' | ||
Servicing fees collected | 8,482 | [1] | 4,966 | [1] |
Professional services | 655 | [2] | 1,322 | [2] |
Advance collections | 60,239 | [3] | 21,265 | [3] |
Other | 673 | 718 | ||
Receivables from Ocwen | 70,049 | 28,271 | ||
Subservicing fees payable | 8,114 | [4] | 890 | [4] |
Professional services | 354 | [2] | 40 | [2] |
Other | 2,181 | [5],[6] | 1,815 | [5],[6] |
Payables to related party | 10,649 | 2,745 | ||
Altisource | ' | ' | ||
Related Party Transaction [Line Items] | ' | ' | ||
Payables to related party | $83 | $129 | ||
[1] | Ocwen is required to remit to us servicing fees it collects on our behalf within two business days. The amount due from Ocwen at the dates indicated represents servicing fees collected but not remitted at the end of the month. We record servicing fee collections less the subservicing fee we pay to Ocwen as Interest income as shown in Note 10. | |||
[2] | The respective amounts are for professional services provided to and provided by Ocwen. | |||
[3] | Upon collection, Ocwen is contractually obligated to remit Match funded advance collections to pay down our Match funded liabilities. This receivable represents the portion of Match funded advance collections that were in-transit to pay down our Match funded liabilities as of the dates indicated. | |||
[4] | The base fee and performance fee, if any, that comprise the servicing fee expense are calculated and paid to Ocwen within three business days following the end of the month. | |||
[5] | At December 31, 2013, we owed Ocwen for servicing advances made on our behalf of $1,867. We reimburse Ocwen for servicing advances on scheduled funding dates throughout each month of the year. | |||
[6] | At December 31, 2012, we owed Ocwen $1,410 for certain purchase price adjustments pertaining to our December 26, 2012 asset purchase from Ocwen. |
Receivable_from_and_Payable_to1
Receivable from and Payable to Related Parties (Parenthetical) (Detail) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | ||
Related Party Transaction [Line Items] | ' | ' | ||
Period for related party to remit collections | '2 days | ' | ||
Ocwen | ' | ' | ||
Related Party Transaction [Line Items] | ' | ' | ||
Period to forward servicing fees collected on the Company's behalf by Ocwen | '3 days | ' | ||
Servicing advances | $2,181 | [1],[2] | $1,815 | [1],[2] |
Ocwen | Due to Related Party | ' | ' | ||
Related Party Transaction [Line Items] | ' | ' | ||
Purchase price adjustments pertaining to asset purchases | ' | 1,410 | ||
Servicing Advances Member | Ocwen | Due to Related Party | ' | ' | ||
Related Party Transaction [Line Items] | ' | ' | ||
Servicing advances | $1,867 | ' | ||
[1] | At December 31, 2013, we owed Ocwen for servicing advances made on our behalf of $1,867. We reimburse Ocwen for servicing advances on scheduled funding dates throughout each month of the year. | |||
[2] | At December 31, 2012, we owed Ocwen $1,410 for certain purchase price adjustments pertaining to our December 26, 2012 asset purchase from Ocwen. |
Subsequent_Events_Additional_I
Subsequent Events - Additional Information (Detail) (USD $) | 12 Months Ended | 1 Months Ended | 1 Months Ended | |||||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 18, 2013 | Aug. 08, 2013 | Jan. 22, 2013 | Nov. 26, 2013 | Aug. 08, 2013 | Jan. 22, 2013 | Jan. 17, 2014 | Jan. 17, 2014 | Jan. 17, 2014 | Jan. 17, 2014 | Jan. 10, 2014 | Jan. 16, 2014 |
One-Year Term Notes | One-Year Term Notes | One-Year Term Notes | Three-Year Term Notes | Three-Year Term Notes | Three-Year Term Notes | Subsequent Event | Subsequent Event | Subsequent Event | Subsequent Event | Subsequent Event | Subsequent Event | |||
One-Year Term Notes | One-Year Term Notes | Three-Year Term Notes | Three-Year Term Notes | Dividend Paid | Dividend Declared | |||||||||
One Month Libor Rate | One Month Libor Rate | |||||||||||||
Subsequent Event [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Dividends paid, cash | $107,436 | $18,317 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $10,653 | ' |
Cash dividend per share | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.15 | ' |
Dividend declared | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.15 |
Declaration Date | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 16-Jan-14 |
Notes issued | ' | ' | $350,000 | $200,000 | $650,000 | $300,000 | $200,000 | $350,000 | $600,000 | ' | $200,000 | ' | ' | ' |
Percentage added to base rate for interest rate | 3.75% | ' | ' | ' | ' | ' | ' | ' | ' | 1.09% | ' | 1.09% | ' | ' |
Dividends_Declared_Detail
Dividends Declared (Detail) (Subsequent Event, USD $) | 1 Months Ended |
Jan. 16, 2014 | |
Period 1 | ' |
Dividends Payable [Line Items] | ' |
Record Date | 31-Jan-14 |
Payment Date | 10-Feb-14 |
Amount per Ordinary Share | $0.15 |
Period 2 | ' |
Dividends Payable [Line Items] | ' |
Record Date | 28-Feb-14 |
Payment Date | 10-Mar-14 |
Amount per Ordinary Share | $0.15 |
Period 3 | ' |
Dividends Payable [Line Items] | ' |
Record Date | 31-Mar-14 |
Payment Date | 10-Apr-14 |
Amount per Ordinary Share | $0.15 |
Effects_of_Restatement_on_Cons
Effects of Restatement on Consolidated Balance Sheet (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
In Thousands, unless otherwise specified | ||||
Notes receivable - Rights to MSRs | $633,769 | $296,451 | ' | ' |
All other assets | 6,676,903 | 3,281,608 | ' | ' |
Total assets | 7,310,672 | 3,578,059 | ' | ' |
Total liabilities | 6,094,225 | 2,704,680 | ' | ' |
Retained earnings | 3,513 | -2,761 | ' | ' |
All other equity | 1,212,934 | 876,140 | ' | ' |
Total equity | 1,216,447 | 873,379 | 9 | 282 |
Total liabilities and equity | 7,310,672 | 3,578,059 | ' | ' |
As Previously Reported | ' | ' | ' | ' |
Notes receivable - Rights to MSRs | 651,060 | 303,705 | ' | ' |
All other assets | 6,676,903 | 3,281,608 | ' | ' |
Total assets | 7,327,963 | 3,585,313 | ' | ' |
Total liabilities | 6,094,225 | 2,704,680 | ' | ' |
Retained earnings | 20,804 | 4,493 | ' | ' |
All other equity | 1,212,934 | 876,140 | ' | ' |
Total equity | 1,233,738 | 880,633 | ' | ' |
Total liabilities and equity | 7,327,963 | 3,585,313 | ' | ' |
Adjustments | ' | ' | ' | ' |
Notes receivable - Rights to MSRs | -17,291 | -7,254 | ' | ' |
Total assets | -17,291 | -7,254 | ' | ' |
Retained earnings | -17,291 | -7,254 | ' | ' |
Total equity | -17,291 | -7,254 | ' | ' |
Total liabilities and equity | ($17,291) | ($7,254) | ' | ' |
Effects_of_Restatement_on_Cons1
Effects of Restatement on Consolidated Statements of Operations (Detail) (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Interest income - notes receivable - Rights to MSRs | $235,826 | $47,445 | ' |
Interest income - other | 2,195 | 109 | ' |
Total interest income | 238,021 | 47,554 | ' |
Related party revenue | 1,811 | 2,316 | ' |
Total revenue | 239,832 | 49,870 | ' |
Operating expenses | 11,870 | 6,150 | 273 |
Income from operations | 227,962 | 43,720 | -273 |
Other expense | ' | ' | ' |
Interest expense | 110,071 | 24,057 | ' |
Total other expense | 110,071 | 24,057 | ' |
Income before income taxes | 117,891 | 19,663 | -273 |
Income tax expense | 234 | 46 | ' |
Net income | 117,657 | 19,617 | -273 |
Earnings per share | ' | ' | ' |
Basic | $1.83 | $1.14 | ($13.66) |
Diluted | $1.83 | $1.14 | ($13.66) |
As Previously Reported | ' | ' | ' |
Interest income - notes receivable - Rights to MSRs | 245,863 | 54,699 | ' |
Interest income - other | 2,195 | 109 | ' |
Total interest income | 248,058 | 54,808 | ' |
Related party revenue | 1,811 | 2,316 | ' |
Total revenue | 249,869 | 57,124 | ' |
Operating expenses | 11,870 | 6,150 | ' |
Income from operations | 237,999 | 50,974 | ' |
Other expense | ' | ' | ' |
Interest expense | 110,071 | 24,057 | ' |
Total other expense | 110,071 | 24,057 | ' |
Income before income taxes | 127,928 | 26,917 | ' |
Income tax expense | 234 | 46 | ' |
Net income | 127,694 | 26,871 | ' |
Earnings per share | ' | ' | ' |
Basic | $1.99 | $1.56 | ' |
Diluted | $1.99 | $1.56 | ' |
Adjustments | ' | ' | ' |
Interest income - notes receivable - Rights to MSRs | -10,037 | -7,254 | ' |
Total interest income | -10,037 | -7,254 | ' |
Total revenue | -10,037 | -7,254 | ' |
Income from operations | -10,037 | -7,254 | ' |
Other expense | ' | ' | ' |
Income before income taxes | -10,037 | -7,254 | ' |
Net income | ($10,037) | ($7,254) | ' |
Earnings per share | ' | ' | ' |
Basic | ($0.16) | ($0.42) | ' |
Diluted | ($0.16) | ($0.42) | ' |
Effects_of_Restatement_on_Cons2
Effects of Restatement on Consolidated Statements of Comprehensive Income (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Error Corrections and Prior Period Adjustments Revision [Line Items] | ' | ' | ' |
Net income | $117,657 | $19,617 | ($273) |
Total other comprehensive income (loss), net of tax | 3,243 | -1,076 | 0 |
Total comprehensive income | 120,900 | 18,541 | -273 |
As Previously Reported | ' | ' | ' |
Error Corrections and Prior Period Adjustments Revision [Line Items] | ' | ' | ' |
Net income | 127,694 | 26,871 | ' |
Total other comprehensive income (loss), net of tax | 3,243 | -1,076 | ' |
Total comprehensive income | 130,937 | 25,795 | ' |
Adjustments | ' | ' | ' |
Error Corrections and Prior Period Adjustments Revision [Line Items] | ' | ' | ' |
Net income | -10,037 | -7,254 | ' |
Total comprehensive income | ($10,037) | ($7,254) | ' |
Effects_of_Restatement_on_Cons3
Effects of Restatement on Consolidated Statements of Cash Flows Income (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Error Corrections and Prior Period Adjustments Revision [Line Items] | ' | ' | ' |
Net income | $117,657 | $19,617 | ($273) |
All other operating cash flows | 507,752 | 71,031 | ' |
Net cash provided by (used in) operating activities | 625,409 | 90,648 | -17 |
Reduction in Notes receivable - Rights to MSRs | 79,849 | 20,171 | ' |
All other investing cash flows | -4,258,531 | -3,218,773 | ' |
Net cash used in investing activities | -4,178,682 | -3,198,602 | ' |
Net cash provided by financing activities | 3,565,121 | 3,183,719 | ' |
Net increase in cash and cash equivalents | 11,848 | 75,765 | -17 |
Cash and cash equivalents at beginning of year | 76,048 | 283 | 300 |
Cash and cash equivalents at end of year | 87,896 | 76,048 | 283 |
As Previously Reported | ' | ' | ' |
Error Corrections and Prior Period Adjustments Revision [Line Items] | ' | ' | ' |
Net income | 127,694 | 26,871 | ' |
All other operating cash flows | 507,752 | 71,031 | ' |
Net cash provided by (used in) operating activities | 635,446 | 97,902 | ' |
Reduction in Notes receivable - Rights to MSRs | 69,812 | 12,917 | ' |
All other investing cash flows | -4,258,531 | -3,218,773 | ' |
Net cash used in investing activities | -4,188,719 | -3,205,856 | ' |
Net cash provided by financing activities | 3,565,121 | 3,183,719 | ' |
Net increase in cash and cash equivalents | 11,848 | 75,765 | ' |
Cash and cash equivalents at beginning of year | 76,048 | 283 | ' |
Cash and cash equivalents at end of year | 87,896 | 76,048 | ' |
Adjustments | ' | ' | ' |
Error Corrections and Prior Period Adjustments Revision [Line Items] | ' | ' | ' |
Net income | -10,037 | -7,254 | ' |
Net cash provided by (used in) operating activities | -10,037 | -7,254 | ' |
Reduction in Notes receivable - Rights to MSRs | 10,037 | 7,254 | ' |
Net cash used in investing activities | $10,037 | $7,254 | ' |