Document_And_Entity_Informatio
Document And Entity Information | 3 Months Ended | |
Mar. 31, 2014 | Apr. 30, 2014 | |
Document and Entity Information [Abstract] | ' | ' |
Entity Registrant Name | 'Ocwen Financial Corporation | ' |
Entity Central Index Key | '0000873860 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Document Type | '10-Q | ' |
Document Period End Date | 31-Mar-14 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q1 | ' |
Amendment Flag | 'true | ' |
Amendment Description | 'Ocwen Financial Corporation (the “Companyâ€, “Ocwenâ€, “weâ€, “usâ€, “ourâ€) is filing this Amendment No. 1 (Amendment) to its Quarterly Report on Form 10-Q for the three months ended March 31, 2014 (Original Form 10-Q) filed with the Securities and Exchange Commission (SEC) on May 2, 2014 (Original Filing Date) to restate the Company’s previously issued unaudited consolidated financial statements and related financial information for the three months ended March 31, 2014 and 2013 included in its Original Form 10-Q. This Amendment is to correct an error in the application of the interest method accounting for a financing liability. The adjustments to correct the error in applying the interest method to certain financing liabilities resulted in a decrease in net income of $16.3 million and a decrease in basic and diluted earnings per share of $0.11 for the three months ended March 31, 2014. For the three months ended March 31, 2013, the adjustments to correct the error resulted in an increase in net income of $3.8 million and an increase in basic and diluted earnings per share of $0.03 and $0.02, respectively. Revisions to the Original Form 10-Q have been made to the Company’s unaudited Consolidated Financial Statements and related disclosures in Part I, Item 1 - Unaudited Consolidated Financial Statements for the periods presented. In addition, corresponding changes have been made to the following other items to reflect the restatement: (A) Amendments to Part I, Item 1 - Unaudited Consolidated Financial Statements, to restate our consolidated balance sheets as of March 31, 2014 and December 31, 2013, and the consolidated statements of operations, comprehensive income, changes in equity and cash flows for the three months ended March 31, 2014 and 2013. Specifically, the amendments restate (a) our results of operations for the three months ended March 31, 2014 to reflect an increase in interest expense related to a change in the value of Financing liabilities which had the effect of understating our consolidated Other expense, net and overstating Income before tax by $17.3 million; (b) our balance sheet as of March 31, 2014 to reflect an increase in Total liabilities and Financing liabilities of $17.3 million; (c) our results of operations for the three months ended March 31, 2013 to reflect a decrease in interest expense related to a change in the value of Financing liabilities which had the effect of overstating our consolidated Other expense, net and understating Income before tax by $4.0 million; (d) balance sheet as of December 31, 2013 to reflect a decrease in Total liabilities and Financing liabilities of $17.3 million; and (e) the impact on our income tax accounts for the effects of above items within our results of operations and balance sheet as of December 31, 2013. (B) Amendments to Part I, Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations, to reflect the restatement of our financial results, described in (A) above. (C) Amendments to Part II, Item 4 - Controls and Procedures, to (i) describe changes in our disclosure controls and procedures and our internal controls over financial reporting to address a material weakness and (ii) modify management’s opinion of the effectiveness of our internal controls over financial reporting as of March 31, 2014. (D) Part II, Item 6 - Exhibits, Financial Statement Schedules, exhibits 31.1 and 31.2. | ' |
Entity Common Stock, Shares Outstanding | ' | 134,879,998 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Assets | ' | ' |
Cash | $242,386 | $178,512 |
Mortgage servicing rights ($110,826 and $116,029 carried at fair value) | 2,040,355 | 2,069,381 |
Advances | 937,926 | 890,832 |
Match funded advances | 2,655,854 | 2,552,383 |
Loans held for sale ($338,228 and $503,753 carried at fair value) | 383,703 | 566,660 |
Loans held for investment - reverse mortgages, at fair value | 923,464 | 618,018 |
Goodwill | 420,201 | 420,201 |
Receivables, net | 182,724 | 152,516 |
Deferred tax assets, net | 119,080 | 115,571 |
Premises and equipment, net | 51,553 | 53,786 |
Other assets | 229,105 | 309,143 |
Total assets | 8,186,351 | 7,927,003 |
Liabilities | ' | ' |
Match funded liabilities | 2,361,662 | 2,364,814 |
Financing liabilities ($870,462 and $615,576 carried at fair value) | 1,693,147 | 1,266,973 |
Other secured borrowings | 1,633,999 | 1,777,669 |
Other liabilities | 560,615 | 644,595 |
Total liabilities | 6,249,423 | 6,054,051 |
Commitments and Contingencies | ' | ' |
Mezzanine Equity | ' | ' |
Series A Perpetual Convertible Preferred stock, $.01 par value; 200,000 shares authorized; 62,000 shares issued and outstanding at March 31, 2014 and December 31, 2013; redemption value $62,000 plus accrued and unpaid dividends | 60,776 | 60,361 |
Ocwen Financial Corporation (Ocwen) stockholders’ equity | ' | ' |
Common stock, $.01 par value; 200,000,000 shares authorized; 135,365,174 and 135,176,271 shares issued and outstanding at March 31, 2014 and December 31, 2013, respectively | 1,354 | 1,352 |
Additional paid-in capital | 819,362 | 818,427 |
Retained earnings | 1,062,467 | 1,002,963 |
Accumulated other comprehensive loss, net of income taxes | -9,542 | -10,151 |
Total Ocwen stockholders’ equity | 1,873,641 | 1,812,591 |
Non-controlling interest in subsidiaries | 2,511 | 0 |
Total equity | 1,876,152 | 1,812,591 |
Total liabilities, mezzanine equity and equity | $8,186,351 | $7,927,003 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
CONSOLIDATED BALANCE SHEETS [Abstract] | ' | ' |
Loans held for sale, at fair value | $338,228 | $503,753 |
Mortgage servicing rights fair value | 110,826 | 116,029 |
Financing liabilities, fair value | 870,462 | 615,576 |
Convertible Preferred Stock, Series A, Par Value (in Dollars per share) | $0.01 | $0.01 |
Convertible Preferred Stock, Series A, Shares Authorized | 200,000 | 200,000 |
Convertible Preferred Stock, Series A, Shares Issued | 62,000 | 62,000 |
Convertible Preferred stock, Series A, Shares Outstanding | 62,000 | 62,000 |
Convertible Preferred stock, Series A, Redemption Value (in Dollars) | $62,000 | $62,000 |
Common stock, par value (in Dollars per share) | $0.01 | $0.01 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 135,365,174 | 135,176,271 |
Common stock, shares outstanding | 135,365,174 | 135,176,271 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Revenue | ' | ' |
Servicing and subservicing fees | $490,459 | $369,309 |
Gain on loans held for sale, net | 43,987 | 6,749 |
Other revenues | 16,815 | 30,601 |
Total revenue | 551,261 | 406,659 |
Operating expenses | ' | ' |
Compensation and benefits | 105,637 | 94,626 |
Amortization of mortgage servicing rights | 62,094 | 47,883 |
Servicing and origination | 43,947 | 23,913 |
Technology and communications | 36,976 | 30,012 |
Professional services | 21,398 | 14,065 |
Occupancy and equipment | 32,051 | 18,249 |
Other operating expenses | 47,091 | 14,778 |
Total operating expenses | 349,194 | 243,526 |
Income from operations | 202,067 | 163,133 |
Other income (expense) | ' | ' |
Interest expense | -139,873 | -89,459 |
Gain (loss) on debt redemption | 2,253 | -17,030 |
Other, net | 7,256 | -1,352 |
Total other expense, net | -130,364 | -107,841 |
Income before income taxes | 71,703 | 55,292 |
Income tax expense | 11,217 | 6,383 |
Net income | 60,486 | 48,909 |
Net loss attributable to non-controlling interests | 15 | 0 |
Net income attributable to Ocwen stockholders | 60,501 | 48,909 |
Preferred stock dividends | -581 | -1,485 |
Deemed dividends related to beneficial conversion feature of preferred stock | -416 | -1,086 |
Net income attributable to Ocwen common stockholders | $59,504 | $46,338 |
Earnings per share attributable to Ocwen common stockholders | ' | ' |
Basic (usd per share) | $0.44 | $0.34 |
Diluted (usd per share) | $0.43 | $0.33 |
Weighted average common shares outstanding | ' | ' |
Basic (in shares) | 135,227,067 | 135,638,567 |
Diluted (in shares) | 141,089,455 | 139,559,157 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $) | 3 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | ||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) [Abstract] | ' | ' | ||
Net income | $60,486 | $48,909 | ||
Other comprehensive income (loss), net of income taxes: | ' | ' | ||
Change in deferred gain (loss) on cash flow hedges arising during the year | 0 | [1] | -4,126 | [1] |
Reclassification adjustment for losses on cash flow hedges included in net income | 608 | [1] | 408 | [1] |
Net change in deferred loss on cash flow hedges | 608 | -3,718 | ||
Other | 1 | 39 | ||
Total other comprehensive income (loss), net of income taxes | 609 | -3,679 | ||
Comprehensive income attributable to Ocwen stockholders | $61,095 | $45,230 | ||
[1] | Net of tax (expense) of $(0.2) million and $(0.2) million for the three months ended March 31, 2014 and 2013, respectively. These losses are reclassified to Other, net on the unaudited Consolidated Statement of Operations. See Note 15 — Derivative Financial Instruments and Hedging Activities for additional information. |
CONSOLIDATED_STATEMENTS_OF_COM1
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parentheticals) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) [Abstract] | ' | ' |
Income tax benefit | ' | $2.80 |
Income tax expense | ($0.20) | ($0.20) |
CONSOLIDATED_STATEMENTS_OF_CHA
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (USD $) | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Noncontrolling Interest [Member] |
In Thousands, except Share data | ||||||
Balance at at Dec. 31, 2012 | $1,611,422 | $1,356 | $911,942 | $704,565 | ($6,441) | ' |
Balance at (in shares) at Dec. 31, 2012 | ' | 135,637,932 | ' | ' | ' | ' |
Net income (loss) | 48,909 | ' | ' | 48,909 | ' | ' |
Deemed dividends related to beneficial conversion feature of preferred stock | -1,086 | ' | ' | -1,086 | ' | ' |
Preferred stock dividend | -1,485 | ' | ' | -1,485 | ' | ' |
Equity-based compensation | 1,353 | ' | 1,353 | ' | ' | ' |
Equity-based compensation (in shares) | ' | 5,715 | ' | ' | ' | ' |
Other comprehensive income (loss), net of income taxes | -3,679 | ' | ' | ' | -3,679 | ' |
Balance at at Mar. 31, 2013 | 1,655,434 | 1,356 | 913,295 | 750,903 | -10,120 | 0 |
Balance at (in shares) at Mar. 31, 2013 | ' | 135,643,647 | ' | ' | ' | ' |
Balance at at Dec. 31, 2013 | 1,812,591 | 1,352 | 818,427 | 1,002,963 | -10,151 | 0 |
Balance at (in shares) at Dec. 31, 2013 | 135,176,271 | 135,176,271 | ' | ' | ' | ' |
Net income (loss) | 60,486 | ' | ' | 60,501 | ' | -15 |
Deemed dividends related to beneficial conversion feature of preferred stock | -416 | ' | ' | -416 | ' | ' |
Preferred stock dividend | -581 | ' | ' | -581 | ' | ' |
Repurchase of common stock | -2,308 | -1 | -2,307 | ' | ' | ' |
Repurchase of common stock (in shares) | -60,000 | -60,000 | ' | ' | ' | ' |
Exercise of common stock options | 1,039 | 3 | 1,036 | ' | ' | ' |
Exercise of common stock options (in shares) | ' | 244,000 | ' | ' | ' | ' |
Equity-based compensation | 2,206 | ' | 2,206 | ' | ' | ' |
Equity-based compensation (in shares) | ' | 4,903 | ' | ' | ' | ' |
Non-controlling interest in connection with acquisition of controlling interest in Ocwen Structured Investments, LLC | 2,526 | ' | ' | ' | ' | 2,526 |
Other comprehensive income (loss), net of income taxes | 609 | ' | ' | ' | 609 | ' |
Balance at at Mar. 31, 2014 | $1,876,152 | $1,354 | $819,362 | $1,062,467 | ($9,542) | $2,511 |
Balance at (in shares) at Mar. 31, 2014 | 135,365,174 | 135,365,174 | ' | ' | ' | ' |
UNAUDITED_CONSOLIDATED_STATEME
UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Parenthetical) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Statement of Stockholders' Equity [Abstract] | ' | ' |
Preferred stock dividends (usd per share) | $9.38 | $9.17 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 3 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | ||
Cash flows from operating activities | ' | ' | ||
Net income attributable to Ocwen stockholders | $60,501 | $48,909 | ||
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' | ||
Amortization of mortgage servicing rights | 62,094 | 47,883 | ||
Depreciation | 5,540 | 4,513 | ||
Provision for bad debts | 31,386 | 60 | ||
Gain on sale of loans | -43,987 | -6,749 | ||
Realized and unrealized losses on derivative financial instruments | 920 | 5,736 | ||
(Gain) loss on extinguishment of debt | -2,253 | 17,030 | ||
Gain on valuation of mortgage servicing rights, at fair value | 5,148 | 679 | ||
Origination and purchase of loans held for sale | -2,378,056 | -2,515,084 | ||
Proceeds from sale and collections of loans held for sale | 2,414,699 | 2,629,152 | ||
Changes in assets and liabilities: | ' | ' | ||
Decrease in advances and match funded advances | 13,434 | 186,420 | ||
(Increase) decrease in receivables and other assets, net | 48,437 | [1] | -41,443 | [1] |
(Decrease) increase in other liabilities | -41,170 | 18,983 | ||
Other, net | 19,089 | 9,809 | ||
Net cash provided by operating activities | 195,782 | 405,898 | ||
Cash flows from investing activities | ' | ' | ||
Purchase of mortgage servicing rights, net | -6,698 | -971 | ||
Acquisition of advances in connection with the purchase of mortgage servicing rights | -83,942 | ' | ||
Acquisition of advances in connection with the purchase of loans | -60,482 | 0 | ||
Proceeds from sale of advances and match funded advances | 0 | 713,582 | ||
Net proceeds from sale of diversified fee-based businesses to Altisource Portfolio Solutions, SA | 0 | 86,950 | ||
Origination of loans held for investment – reverse mortgages | -176,658 | 0 | ||
Principal payments received on loans held for investment - reverse mortgages | 14,030 | 0 | ||
Additions to premises and equipment | -3,308 | -4,201 | ||
Other | 891 | 1,300 | ||
Net cash used in investing activities | -378,220 | -1,279,053 | ||
Cash flows from financing activities | ' | ' | ||
(Repayment of) proceeds from match funded liabilities | -3,151 | 450,239 | ||
Proceeds from other borrowings | 1,497,669 | 3,778,876 | ||
Repayments of other borrowings | -1,652,903 | -2,989,374 | ||
Payment of debt issuance costs – senior secured term loan | -175 | -24,048 | ||
Proceeds from sale of mortgage servicing rights accounted for as a financing | 123,551 | 100,737 | ||
Proceeds from sale of loans accounted for as a financing | 226,626 | ' | ||
Proceeds from sale of advances accounted for as a financing | 55,702 | ' | ||
Repurchase of common stock | -2,308 | 0 | ||
Other | 1,301 | ' | ||
Net cash provided by financing activities | 246,312 | 1,316,430 | ||
Net increase in cash | 63,874 | 443,275 | ||
Cash at beginning of year | 178,512 | 220,130 | ||
Cash at end of period | 242,386 | 663,405 | ||
Fair value of liabilities assumed | ' | ' | ||
Cash paid | $54,220 | ' | ||
[1] | Amount due seller includes $54,220 paid in 2014 for certain mortgage servicing rights and related servicing advances which we were obligated to acquire that were not settled as part of the initial closing. |
Description_of_Business_Basis_
Description of Business, Basis of Presentation and Summary of Significant Accounting Policies | 3 Months Ended | ||||
Mar. 31, 2014 | |||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | ||||
Description of Business, Basis of Presentation and Summary of Significant Accounting Policies | ' | ||||
Note 1 — Description of Business and Basis of Presentation | |||||
Organization | |||||
Ocwen Financial Corporation (NYSE: OCN) (Ocwen, we, us and our) is a financial services holding company which, through its subsidiaries, is engaged in the servicing and origination of forward and reverse mortgage loans. Ocwen is headquartered in Atlanta, Georgia with offices throughout the United States (U.S.) and in the United States Virgin Islands (USVI) with support operations in India, the Philippines and Uruguay. Ocwen is a Florida corporation organized in February 1988. | |||||
Ocwen owns all of the common stock of its primary operating subsidiary, Ocwen Mortgage Servicing, Inc. (OMS), and directly or indirectly owns all of the outstanding stock of its other primary operating subsidiaries: Ocwen Loan Servicing, LLC (OLS), Ocwen Financial Solutions Private Limited, Homeward Residential, Inc. (Homeward), and Liberty Home Equity Solutions, Inc. (Liberty). | |||||
In 2013, we completed acquisitions of mortgage servicing rights (MSRs) and servicing advances from, among others, OneWest Bank, FSB (OneWest MSR Transaction) and Ally Bank, a wholly-owned subsidiary of Ally Financial Inc. (Ally), the indirect parent of Residential Capital, LLC (ResCap) (Ally MSR Transaction), and acquisitions of servicing and origination platforms, including Liberty Home Equity Solutions, Inc. (Liberty) through a stock purchase agreement (Liberty Acquisition) and certain assets and operations of ResCap pursuant to a plan under Chapter 11 of the Bankruptcy Code (ResCap Acquisition). See Note 3 — Business Acquisitions and Note 9 — Mortgage Servicing for additional information. | |||||
Basis of Presentation | |||||
The accompanying unaudited consolidated financial statements have been prepared in conformity with the instructions of the Securities and Exchange Commission (SEC) to Form 10-Q and SEC Regulation S-X, Article 10, Rule 10-01 for interim financial statements. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (GAAP) for complete financial statements. In our opinion, the accompanying unaudited consolidated financial statements contain all adjustments, consisting only of normal recurring accruals, necessary for a fair presentation. The results of operations and other data for the three months ended March 31, 2014 are not necessarily indicative of the results that may be expected for any other interim period or for the year ending December 31, 2014. The unaudited consolidated financial statements presented herein should be read in conjunction with the audited consolidated financial statements and related notes thereto included in Amendment No. 1 to our Annual Report on Form 10-K for the year ended December 31, 2013. | |||||
Reclassifications | |||||
Within the Total assets section of the unaudited Consolidated Balance sheet at December 31, 2013, we reclassified Debt service accounts of $129.9 million to Other assets to conform to the current year presentation. | |||||
Certain insignificant amounts in the unaudited Consolidated Statement of Cash Flows for the three months ended March 31, 2013 have been reclassified to conform to the current year presentation. These reclassifications had no impact on our consolidated cash flows. | |||||
Use of Estimates and Assumptions | |||||
The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, the reported amounts of revenues and expenses during the reporting period and the related disclosures in the accompanying notes. Such estimates and assumptions include, but are not limited to, those that relate to fair value measurements, the provision for potential losses that may arise from litigation proceedings, representation and warranty and other indemnification obligations and the valuation of goodwill. In developing estimates and assumptions, management uses all available information; however, actual results could materially differ because of uncertainties associated with estimating the amounts, timing and likelihood of possible outcomes. | |||||
Change in Accounting Estimate | |||||
For servicing assets or liabilities that we account for using the amortization method, we amortize the balances in proportion to, and over the period of, estimated net servicing income (if servicing revenues exceed servicing costs) or net servicing loss (if servicing costs exceed servicing revenues). We determine estimated net servicing income using the estimated future balance of the underlying mortgage loan portfolio, which, absent new purchases, declines over time from prepayments and scheduled loan amortization. We adjust MSR amortization prospectively in response to changes in estimated projections of future cash flows. As a result of the significant growth and change in composition of our servicing portfolio, we determined that the estimated net servicing income has increased, primarily as a result of lower actual prepayment speeds. We accounted for this change in MSR amortization as a change in an accounting estimate beginning January 1, 2014. This change had the effect of reducing amortization expense and increasing both net income and earnings per share in our unaudited Consolidated Statement of Operations for the three months ended March 31, 2014 as follows: | |||||
Reduction in Amortization of mortgage servicing rights | $ | (25,998 | ) | ||
Increase in Net income attributable to Ocwen common stockholders | $ | 22,755 | |||
Increase in Earnings per share attributable to Ocwen common stockholders: | |||||
Basic | $ | 0.17 | |||
Diluted | $ | 0.16 | |||
Recently Issued Accounting Standards | |||||
Investments—Equity Method and Joint Ventures: Accounting for Investments in Qualified Affordable Housing Projects (a consensus of the FASB Emerging Issues Task Force) (ASU 2014-01) | |||||
In January 2014, the FASB issued ASU 2014-01. This ASU permit entities to make an accounting policy election to account for their investments in qualified affordable housing projects using the proportional amortization method if certain conditions are met. Under the proportional amortization method, an entity amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received and recognizes the net investment performance in the statement of operations as a component of income tax expense (benefit). The new standard is expected to enable more entities to qualify for the proportional amortization method than the number of entities that currently qualify for the effective yield method. | |||||
ASU 2014-01 will be effective for us on January 1, 2015 with early adoption permitted. We are currently evaluating the effect of adopting this standard effective January 1, 2015, but we do not anticipate that our adoption will have a material impact on our consolidated financial condition or results of operations. | |||||
Receivables—Troubled Debt Restructurings by Creditors: Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure (a consensus of the FASB Emerging Issues Task Force) (ASU 2014-04) | |||||
In January 2014, the FASB also issued ASU 2014-04. This ASU clarifies when an in substance repossession or foreclosure occurs such that the loan receivable should be derecognized and the real estate property recognized. An in substance repossession or foreclosure occurs upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. | |||||
ASU 2014-04 requires interim and annual disclosure of both (1) the amount of foreclosed residential real estate property held by the creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction. | |||||
ASU 2014-04 will be effective for us on January 1, 2015 with early adoption permitted. An entity can elect to adopt the amendments using either a modified retrospective transition method or a prospective transition method. We are currently evaluating the effect of adopting this standard effective January 1, 2015, but we do not anticipate that our adoption will have a material impact on our consolidated financial condition or results of operations. | |||||
Presentation of Financial Statements and Property, Plant, and Equipment: Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity (ASU 2014-08) | |||||
In April 2014, the FASB issued ASU 2014-08. ASU 2014-08 changes the criteria for reporting discontinued operations. Under this ASU, a discontinued operation is defined as a disposal of a component or group of components that is disposed of or is classified as held for sale and represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. A strategic shift could include a disposal of (i) a major geographical area of operations, (ii) a major line of business, (iii) a major equity method investment, or (iv) other major parts of an entity. A business activity that upon acquisition qualifies as held for sale will also be a discontinued operation. The new standard no longer precludes presentation as a discontinued operation if (i) there are operations and cash flows of the component that have not been eliminated from the reporting entity’s ongoing operations, or (ii) there is significant continuing involvement with a component after its disposal. | |||||
New disclosures under this ASU include the requirement to present in the statement of cash flows or disclose in a note either (i) total operating and investing cash flows for discontinued operations, or (ii) depreciation, amortization, capital expenditures, and significant operating and investing noncash items related to discontinued operations. Assets and liabilities of a discontinued operation that are classified as held for sale or disposed of in the current period must be reclassified for the comparative periods presented in the balance sheet. | |||||
ASU 2014-08 will be effective for us on January 1, 2015. The guidance applies prospectively to new disposals and new classifications of disposal groups as held for sale after the effective date. We are currently evaluating the effect of adopting this standard effective January 1, 2015, but we do not anticipate that our adoption will have a material impact on our consolidated financial condition or results of operations. |
Restatement_of_Previously_Issu
Restatement of Previously Issued Consolidated Financial Statements | 3 Months Ended | |||||||||||
Mar. 31, 2014 | ||||||||||||
Accounting Changes and Error Corrections [Abstract] | ' | |||||||||||
Restatement of Previously Issued Consolidated Financial Statements | ' | |||||||||||
Note 1A — Restatement of Previously Issued Consolidated Financial Statements | ||||||||||||
Subsequent to the issuance of the Original Form 10-Q, we determined there was an error in the application of the interest method used to calculate the appropriate allocation between principal and interest in connection with the accounting for a financing liability related to the Rights to MSRs sold to HLSS. The error relates to the subsequent accounting for the financing liability and does not impact the initial accounting for the sale of Rights to MSRs to HLSS. As a result, the financial amounts noted below have been restated from amounts previously reported. | ||||||||||||
The following tables summarize the effect of these restatements at and for the periods indicated: | ||||||||||||
Consolidated Balance Sheet as of March 30, 2014 | ||||||||||||
As Reported | Restatement | As Restated | ||||||||||
Deferred tax assets, net | $ | 118,156 | $ | 924 | $ | 119,080 | ||||||
Total assets | 8,185,427 | 924 | 8,186,351 | |||||||||
Financing liabilities | 1,693,147 | — | 1,693,147 | |||||||||
Total liabilities | 6,249,423 | — | 6,249,423 | |||||||||
Retained earnings | 1,061,543 | 924 | 1,062,467 | |||||||||
Total stockholders’ equity | 1,872,717 | 924 | 1,873,641 | |||||||||
Consolidated Balance Sheet as of December 31, 2013 | ||||||||||||
As Reported | Restatement | As Restated | ||||||||||
Deferred tax assets, net | $ | 116,558 | $ | (987 | ) | $ | 115,571 | |||||
Financing liabilities | 1,284,229 | (17,256 | ) | 1,266,973 | ||||||||
Total liabilities | 6,071,307 | (17,256 | ) | 6,054,051 | ||||||||
Retained earnings | 986,694 | 16,269 | 1,002,963 | |||||||||
Total stockholders’ equity | 1,796,322 | 16,269 | 1,812,591 | |||||||||
Consolidated Statement of Operations for the Three Months Ended March 31, 2014 | ||||||||||||
As Reported | Restatement | As Restated | ||||||||||
Interest expense | $ | (122,616 | ) | $ | (17,257 | ) | $ | (139,873 | ) | |||
Total other expense, net | (113,107 | ) | (17,257 | ) | (130,364 | ) | ||||||
Income before income taxes | 88,960 | (17,257 | ) | 71,703 | ||||||||
Income tax expense | 13,129 | (1,912 | ) | 11,217 | ||||||||
Net income | 75,831 | (15,345 | ) | 60,486 | ||||||||
Net income attributable to Ocwen stockholders | 75,846 | (15,345 | ) | 60,501 | ||||||||
Net income attributable to Ocwen common stockholders | 74,849 | (15,345 | ) | 59,504 | ||||||||
Earnings per share attributable to Ocwen common stockholders | ||||||||||||
Basic | $ | 0.55 | $ | (0.11 | ) | $ | 0.44 | |||||
Diluted | $ | 0.54 | $ | (0.11 | ) | $ | 0.43 | |||||
Consolidated Statement of Operations for the Three Months Ended March 31, 2013 | ||||||||||||
As Reported | Restatement | As Restated | ||||||||||
Interest expense | $ | (93,416 | ) | $ | 3,957 | $ | (89,459 | ) | ||||
Total other expense, net | (111,798 | ) | 3,957 | (107,841 | ) | |||||||
Income before income taxes | 51,335 | 3,957 | 55,292 | |||||||||
Income tax expense | 6,188 | 195 | 6,383 | |||||||||
Net income | 45,147 | 3,762 | 48,909 | |||||||||
Net income attributable to Ocwen stockholders | 45,147 | 3,762 | 48,909 | |||||||||
Net income attributable to Ocwen common stockholders | 42,576 | 3,762 | 46,338 | |||||||||
Earnings per share attributable to Ocwen common stockholders | ||||||||||||
Basic | $ | 0.31 | $ | 0.03 | $ | 0.34 | ||||||
Diluted | $ | 0.31 | $ | 0.02 | $ | 0.33 | ||||||
Consolidated Statement of Comprehensive Income for the Three Months Ended March 31, 2014 | ||||||||||||
As Reported | Restatement | As Restated | ||||||||||
Net Income | $ | 75,831 | $ | (15,345 | ) | $ | 60,486 | |||||
Comprehensive income attributable to Ocwen stockholders | 76,440 | (15,345 | ) | 61,095 | ||||||||
Consolidated Statement of Comprehensive Income for the Three Months Ended March 31, 2013 | ||||||||||||
As Reported | Restatement | As Restated | ||||||||||
Net Income | $ | 45,147 | $ | 3,762 | $ | 48,909 | ||||||
Comprehensive income attributable to Ocwen stockholders | 41,468 | 3,762 | 45,230 | |||||||||
Consolidated Statement of Changes in Equity for the Three Months Ended March 31, 2014 | ||||||||||||
As Reported | Restatement | As Restated | ||||||||||
Net Income | $ | 75,831 | $ | (15,345 | ) | $ | 60,486 | |||||
Consolidated Statement of Changes in Equity for the Three Months Ended March 31, 2013 | ||||||||||||
As Reported | Restatement | As Restated | ||||||||||
Net Income | $ | 45,147 | $ | 3,762 | $ | 48,909 | ||||||
Consolidated Statement of Cash Flows for the Three Months Ended March 31, 2014 | ||||||||||||
As Reported | Restatement | As Restated | ||||||||||
Net income | $ | 75,846 | $ | (15,345 | ) | $ | 60,501 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Other, net | 21,000 | (1,911 | ) | 19,089 | ||||||||
Net cash provided by operating activities | 213,038 | (17,256 | ) | 195,782 | ||||||||
Repayments of other borrowings | (1,670,159 | ) | 17,256 | (1,652,903 | ) | |||||||
Net cash provided by financing activities | 229,056 | 17,256 | 246,312 | |||||||||
Consolidated Statement of Cash Flows for the Three Months Ended March 31, 2013 | ||||||||||||
As Reported | Restatement | As Restated | ||||||||||
Net income | $ | 45,147 | $ | 3,762 | $ | 48,909 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Other, net | 9,614 | 195 | 9,809 | |||||||||
Net cash provided by operating activities | 401,941 | 3,957 | 405,898 | |||||||||
Repayments of other borrowings | (2,985,417 | ) | (3,957 | ) | (2,989,374 | ) | ||||||
Net cash provided by financing activities | 1,320,387 | (3,957 | ) | 1,316,430 | ||||||||
Securitization_and_Variable_In
Securitization and Variable Interest Entities | 3 Months Ended | |||||||||||
Mar. 31, 2014 | ||||||||||||
Transfers and Servicing [Abstract] | ' | |||||||||||
Securitizations and Variable Interest Entities | ' | |||||||||||
Note 2 — Securitizations and Variable Interest Entities | ||||||||||||
We securitize, sell and service forward and reverse residential mortgage loans and regularly transfer financial assets in connection with asset-backed financing arrangements. We have aggregated these securitizations and asset-backed financing arrangements into two groups: (1) securitizations of residential mortgage loans and (2) financings of advances on loans serviced for others. | ||||||||||||
We have determined that the special purpose entities (SPEs) created in connection with our match funded financing facilities are variable interest entities (VIEs) of which we are the primary beneficiary. | ||||||||||||
Securitizations of Residential Mortgage Loans | ||||||||||||
Currently, we securitize forward and reverse residential mortgage loans involving the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) (collectively the GSEs) and loans insured by the Federal Housing Authority (FHA) or Department of Veterans Affairs (VA). We retain the right to service these loans and receive servicing fees based upon the securitized loan balances and certain ancillary fees, all of which are reported in Servicing and subservicing fees on the unaudited Consolidated Statements of Operations. | ||||||||||||
Transfers of Forward Loans | ||||||||||||
We sell or securitize forward loans that we originate or that we purchase from third parties, generally in the form of mortgage-backed securities guaranteed by the GSEs or the Government National Mortgage Association (Ginnie Mae). Securitization usually occurs within 30 days of loan closing or purchase. We retain servicing rights associated with the transferred loans and receive a servicing fee for services provided. We act only as a fiduciary and do not have a variable interest in the securitization trusts. As a result, we account for these transactions as sales upon transfer. | ||||||||||||
We report the gain or loss on the transfer of the loans held for sale in Gain on loans held for sale, net in the unaudited Consolidated Statement of Operations along with changes in fair value of the loans and the gain or loss on the related derivatives. See Note 15 — Derivative Financial Instruments and Hedging Activities for information on these derivative financial instruments. We include all changes in loans held for sale and related derivative balances in operating activities in the unaudited Consolidated Statement of Cash Flows. | ||||||||||||
The following table presents a summary of cash flows received from and paid to securitization trusts related to transfers accounted for as sales that were outstanding during the three months ended March 31: | ||||||||||||
2014 | 2013 | |||||||||||
Proceeds received from securitizations | $ | 1,534,251 | $ | 2,576,792 | ||||||||
Servicing fees collected | 5,194 | 1,518 | ||||||||||
$ | 1,539,445 | $ | 2,578,310 | |||||||||
In connection with these transfers, we recorded MSRs of $11.6 million and $28.7 million during the three months ended March 31, 2014 and 2013, respectively. We initially record the MSRs at fair value and subsequently account for them at amortized cost. See Note 9 — Mortgage Servicing for information relating to MSRs. | ||||||||||||
Certain obligations arise from agreements associated with our transfers of loans. Under these agreements, we may be obligated to repurchase the loans, or otherwise indemnify or reimburse the investor or insurer for losses incurred due to material breach of contractual representations and warranties. See Note 13 — Other Liabilities for further information. | ||||||||||||
The following table presents the carrying amounts of our assets that relate to our continuing involvement with forward loans that we have transferred with servicing rights retained as well as our maximum exposure to loss including the UPB of the transferred loans at the dates indicated: | ||||||||||||
March 31, 2014 | December 31, 2013 | |||||||||||
Carrying value of assets: | ||||||||||||
Mortgage servicing rights, at amortized cost | $ | 49,219 | $ | 44,615 | ||||||||
Mortgage servicing rights, at fair value | 3,079 | 3,075 | ||||||||||
Advances and match funded advances | 11,069 | 15,888 | ||||||||||
Unpaid principal balance of loans transferred (1) | 6,497,814 | 5,641,277 | ||||||||||
Maximum exposure to loss | $ | 6,561,181 | $ | 5,704,855 | ||||||||
-1 | The UPB of the loans transferred is the maximum exposure to loss under our standard representations and warranties obligations. | |||||||||||
At March 31, 2014 and December 31, 2013, 2.9% and 2.6%, respectively, of the transferred residential loans that we serviced were 60 days or more past due. During the three months ended March 31, 2014, there were no charge-offs, net of recoveries, associated with these transferred loans. | ||||||||||||
Transfers of Reverse Mortgages | ||||||||||||
We are an approved issuer of Ginnie Mae Home Equity Conversion Mortgage-Backed Securities (HMBS) that are guaranteed by Ginnie Mae. We originate Home Equity Conversion Mortgages (HECMs, or reverse mortgages) that are insured by the FHA. We then pool the loans into HMBS that we sell into the secondary market with servicing rights retained. We have determined that loan transfers in the HMBS program do not meet the definition of a participating interest because of the servicing requirements in the product that require the issuer/servicer to absorb some level of interest rate risk, cash flow timing risk and incidental credit risk. As a result, the transfers of the HECMs do not qualify for sale accounting, and we, therefore, account for these transfers as financings. Under this accounting treatment, the HECMs are classified as Loans held for investment - reverse mortgages, at fair value, on our unaudited Consolidated Balance Sheets. We record the proceeds from the transfer of assets as secured borrowings (HMBS-related borrowings) in Financing liabilities and recognize no gain or loss on the transfer. Holders of participating interests in the HMBS have no recourse against the assets of Ocwen, except for standard representations and warranties and our contractual obligation to service the HECMs and the HMBS. | ||||||||||||
We have elected to measure the HECMS and HMBS-related borrowings at fair value. The changes in fair value of the HECMs and HMBS-related borrowings are included in Other revenues in our unaudited Consolidated Statement of Operations. Included in net fair value gains on the HECMs and related HMBS borrowings are the interest income that we expect to be collected on the HECMs and the interest expense that we expect to be paid on the HMBS-related borrowings. We report originations and collections of HECMs in investing activities in the unaudited Consolidated Statement of Cash Flows. We report net fair value gains on HECMs and the related HMBS borrowings as an adjustment to the net cash provided by or used in operating activities in the unaudited Consolidated Statement of Cash Flows. Proceeds from securitizations of HECMs and payments on HMBS-related borrowings are included in financing activities in the unaudited Consolidated Statement of Cash Flows. | ||||||||||||
At March 31, 2014 and December 31, 2013, we had HMBS-related borrowings of $870.5 million and $615.6 million and HECMs pledged as collateral to the pools of $923.5 million and $618.0 million, respectively. See Note 5 — Fair Value for a reconciliation of the changes in fair value of HECMs and HMBS-related borrowings for the three months ended March 31, 2014. | ||||||||||||
Financings of Advances on Loans Serviced for Others | ||||||||||||
Match funded advances on loans serviced for others result from our transfers of residential loan servicing advances to SPEs in exchange for cash. We consolidate these SPEs either because the transfers do not qualify for sales accounting treatment or because Ocwen is the primary beneficiary of the SPE. These SPEs issue debt supported by collections on the transferred advances. | ||||||||||||
We make these transfers under the terms of our advance facility agreements. We classify the transferred advances on our unaudited Consolidated Balance Sheets as Match funded advances and the related liabilities as Match funded liabilities. The SPEs use collections of the pledged advances to repay principal and interest and to pay the expenses of the SPE. Holders of the debt issued by these entities can look only to the assets of the SPE for satisfaction of the debt and have no recourse against Ocwen. However, Ocwen and OLS have guaranteed the payment of the obligations under the securitization documents of one of the entities. The maximum amount payable under the guarantee is limited to 10% of the notes outstanding at the end of the facility’s revolving period in December 2014. The entity to which this guarantee applies had $31.4 million of notes outstanding at March 31, 2014. The assets and liabilities of the advance financing SPEs are comprised solely of Match funded advances, Debt service accounts, Match funded liabilities and amounts due to affiliates. Amounts due to affiliates are eliminated in consolidation. | ||||||||||||
See Note 8 — Match Funded Advances, Note 11 - Other Assets and Note 12 — Borrowings for additional information. | ||||||||||||
Note 9 — Mortgage Servicing | ||||||||||||
Mortgage Servicing Rights – Amortization Method | ||||||||||||
The following tables summarize the activity in the carrying value of amortization method servicing assets for the three months ended March 31: | ||||||||||||
2014 | 2013 | |||||||||||
Beginning balance | $ | 1,953,352 | $ | 678,937 | ||||||||
Additions recognized in connection with business acquisitions: | ||||||||||||
OSI (1) | 8,954 | — | ||||||||||
ResCap Acquisition (1) | 11,370 | 393,891 | ||||||||||
Additions recognized in connection with asset acquisitions: | ||||||||||||
OneWest MSR Transaction (2) | 1,516 | — | ||||||||||
Greenpoint MSR Transaction (3) | 3,700 | — | ||||||||||
Other | 1,481 | 972 | ||||||||||
Additions recognized on the sale of mortgage loans | 11,614 | 28,705 | ||||||||||
Servicing transfers and adjustments | (364 | ) | (124 | ) | ||||||||
Amortization (4) | (62,094 | ) | (47,987 | ) | ||||||||
Ending balance | $ | 1,929,529 | $ | 1,054,394 | ||||||||
Estimated fair value at end of period | $ | 2,774,910 | $ | 1,288,732 | ||||||||
-1 | See Note 3 — Business Acquisitions for additional information regarding MSRs recognized in connection with business acquisitions. | |||||||||||
-2 | The acquired MSRs relate to mortgage loans with a UPB of $1.1 billion and related servicing advances of $34.3 million acquired in the final closing of the OneWest MSR Transaction. The OneWest MSR Transaction closed in stages, and the majority of loans were boarded onto our primary servicing platform as of December 31, 2013. | |||||||||||
-3 | The acquired MSRs relate to mortgage loans with a UPB of $948.9 million and related servicing advances of $47.6 million. | |||||||||||
-4 | In the unaudited Consolidated Statement of Operations, Amortization of mortgage servicing rights is reported net of the amortization of servicing liabilities and includes the amount of charges we recognized to increase servicing liability obligations. | |||||||||||
As disclosed in Note 4 — Sales of Advances and MSRs, we have sold certain Rights to MSRs as part of the HLSS Transactions which did not qualify as sales for accounting purposes. In addition, on February 26, 2014, we issued $123.6 million of Ocwen Asset Servicing Income Series (OASIS), Series 2014-1 Notes secured by Ocwen-owned MSRs relating to Freddie Mac mortgages of $11.8 billion UPB. We accounted for this transaction as a financing. See Note 12 — Borrowings for additional information. | ||||||||||||
The estimated amortization expense for MSRs, calculated based on assumptions used at March 31, 2014, is projected as follows over the next five years (See Note 1 — Description of Business and Basis of Presentation regarding a change in accounting estimate applicable to MRS amortization.): | ||||||||||||
2015 | $ | 227,807 | ||||||||||
2016 | 193,589 | |||||||||||
2017 | 166,401 | |||||||||||
2018 | 143,094 | |||||||||||
2019 | 68,417 | |||||||||||
Mortgage Servicing Rights—Fair Value Measurement Method | ||||||||||||
This portfolio comprises servicing rights for which we elected the fair value option and includes Agency forward residential mortgage loans for which we previously hedged the related market risks. | ||||||||||||
The following table summarizes the activity related to fair value servicing assets for the three months ended March 31: | ||||||||||||
2014 | 2013 | |||||||||||
Beginning balance | $ | 116,029 | $ | 85,213 | ||||||||
Changes in fair value (1): | ||||||||||||
Changes in market value assumptions | (3,155 | ) | 4,650 | |||||||||
Realization of cash flows and other changes | (2,048 | ) | (5,329 | ) | ||||||||
Ending balance | $ | 110,826 | $ | 84,534 | ||||||||
-1 | Changes in fair value are recognized in Servicing and origination expense in the unaudited Consolidated Statement of Operations. | |||||||||||
Because the mortgages underlying these MSRs permit the borrowers to prepay the loans, the value of the MSRs generally tends to diminish in periods of declining interest rates (as prepayments increase) and increase in periods of rising interest rates (as prepayments decrease). The following table summarizes the estimated change in the value of the MSRs that we carry at fair value as of March 31, 2014 given hypothetical instantaneous parallel shifts in the yield curve: | ||||||||||||
Adverse change in fair value | ||||||||||||
10% | 20% | |||||||||||
Weighted average prepayment speeds | $ | (8,475 | ) | $ | (16,635 | ) | ||||||
Discount rate (Option-adjusted spread) | $ | (4,881 | ) | $ | (9,371 | ) | ||||||
The sensitivity analysis measures the potential impact on fair values based on hypothetical changes (increases and decreases) in interest rates. | ||||||||||||
Portfolio of Assets Serviced | ||||||||||||
The following table presents the composition of our primary servicing and subservicing portfolios by type of property serviced as measured by UPB. The servicing portfolio represents loans for which we own the MSRs while subservicing represents all other loans. The UPB of assets serviced for others are not included on our unaudited Consolidated Balance Sheets. | ||||||||||||
Residential | Commercial | Total | ||||||||||
UPB at March 31, 2014 | ||||||||||||
Servicing (1) | $ | 391,701,237 | $ | — | $ | 391,701,237 | ||||||
Subservicing | 57,869,359 | 318,507 | 58,187,866 | |||||||||
$ | 449,570,596 | $ | 318,507 | $ | 449,889,103 | |||||||
UPB at December 31, 2013 | ||||||||||||
Servicing (1) | $ | 397,546,635 | $ | — | $ | 397,546,635 | ||||||
Subservicing | 67,104,697 | 400,502 | 67,505,199 | |||||||||
$ | 464,651,332 | $ | 400,502 | $ | 465,051,834 | |||||||
UPB at March 31, 2013 | ||||||||||||
Servicing (1) | $ | 272,252,405 | $ | — | $ | 272,252,405 | ||||||
Subservicing | 194,819,256 | 392,584 | 195,211,840 | |||||||||
$ | 467,071,661 | $ | 392,584 | $ | 467,464,245 | |||||||
-1 | Includes primary servicing UPB of $170.8 billion, $175.1 billion and $92.5 billion at March 31, 2014, December 31, 2013 and March 31, 2013, respectively, for which the Rights to MSRs have been sold to HLSS. | |||||||||||
Residential assets serviced includes foreclosed real estate. Residential assets serviced also includes small-balance commercial assets with a UPB of $2.5 billion, $2.6 billion and $2.0 billion at March 31, 2014, December 31, 2013 and March 31, 2013, respectively, that are managed using the REALServicing™ platform. Commercial assets consist of large-balance foreclosed real estate. | ||||||||||||
Servicing Revenue | ||||||||||||
The following table presents the components of servicing and subservicing fees for the three months ended March 31: | ||||||||||||
2014 | 2013 | |||||||||||
Loan servicing and subservicing fees: | ||||||||||||
Servicing | $ | 351,823 | $ | 235,156 | ||||||||
Subservicing | 33,725 | 33,866 | ||||||||||
385,548 | 269,022 | |||||||||||
Home Affordable Modification Program (HAMP) fees | 36,699 | 40,147 | ||||||||||
Late charges | 36,835 | 25,896 | ||||||||||
Loan collection fees | 8,294 | 6,382 | ||||||||||
Custodial accounts (float earnings) | 1,721 | 1,680 | ||||||||||
Other | 21,362 | 26,182 | ||||||||||
$ | 490,459 | $ | 369,309 | |||||||||
Float balances (balances in custodial accounts, which represent collections of principal and interest that we receive from borrowers, are held in escrow by an unaffiliated bank and are excluded from our balance sheet) amounted to $3.5 billion and $4.7 billion at March 31, 2014 and 2013, respectively. |
Business_Acquisitions
Business Acquisitions | 3 Months Ended | |||||||||||
Mar. 31, 2014 | ||||||||||||
Business Combinations [Abstract] | ' | |||||||||||
Business Acquisitions | ' | |||||||||||
Note 3 — Business Acquisitions | ||||||||||||
We account for business acquisitions using the acquisition method which requires, among other things, that the assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date. The initial allocation of the purchase price is considered preliminary and therefore subject to change until the end of the measurement period (up to one year from the acquisition date). Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the expected revenue and cost synergies of the combined business. Measurement period adjustments are applied retrospectively to the period of acquisition. | ||||||||||||
The purchase price allocations provided below for our business acquisitions are based on the estimated fair value of the acquired receivables, loans, advances, MSRs and the assumed debt in a manner consistent with the methodology described in Note 5 — Fair Value. Premises and equipment were initially valued based on the “in-use” valuation premise, where the fair value of an asset is based on the highest and best use of the asset that would provide maximum value to market participants principally through its use with other assets as a group. Other assets and liabilities expected to have a short life were valued at the face value of the specific assets and liabilities purchased, including receivables, prepaid expenses, accounts payable and accrued expenses. | ||||||||||||
The unaudited pro forma consolidated results presented below for the ResCap Acquisition are not indicative of what Ocwen’s consolidated net earnings would have been had we completed the acquisition on the date indicated because of differences in servicing practices and cost structure between Ocwen and ResCap. In addition, the unaudited pro forma consolidated results do not purport to project our combined future results nor do they reflect the expected realization of any cost savings associated with the acquisition. | ||||||||||||
The acquisition of Liberty was treated as stock purchases for U.S. tax purposes. The ResCap Acquisition was treated as an asset acquisition for U.S. tax purposes. We expect the opening tax basis for the acquired assets and liabilities to be the fair values as shown in the purchase price allocation table below. We expect MSRs and goodwill to be treated as intangible assets acquired in connection with the purchase of a trade or business and, as such, amortized over 15 years for tax purposes. | ||||||||||||
Purchase Price Allocation | ||||||||||||
The following table summarizes the fair values of assets acquired and liabilities assumed as part of the ResCap Acquisition: | ||||||||||||
Purchase Price Allocation | 15-Feb-13 | Adjustments | Final | |||||||||
MSRs (1) | $ | 393,891 | $ | 7,423 | $ | 401,314 | ||||||
Advances and match funded advances (1) | 1,622,348 | 164,061 | 1,786,409 | |||||||||
Deferred tax assets | — | — | — | |||||||||
Premises and equipment | 22,398 | (5,975 | ) | 16,423 | ||||||||
Receivables and other assets | 2,989 | — | 2,989 | |||||||||
Other liabilities: | ||||||||||||
Liability for indemnification obligations | (49,500 | ) | — | (49,500 | ) | |||||||
Other | (24,840 | ) | (285 | ) | (25,125 | ) | ||||||
Total identifiable net assets | 1,967,286 | 165,224 | 2,132,510 | |||||||||
Goodwill | 204,743 | 6,676 | 211,419 | |||||||||
Total consideration | $ | 2,172,029 | $ | 171,900 | $ | 2,343,929 | ||||||
-1 | As of the acquisition date, the purchase of certain MSRs from ResCap was not complete pending the receipt of certain consents and court approvals. Subsequent to the acquisition, we obtained the required consents and approvals for a portion of these MSRs and paid an additional purchase price of $174.6 million to acquire the MSRs and related advances, including $54.2 million in 2014. The purchase price allocation has been revised to include the resulting adjustments to MSRs, advances and goodwill. | |||||||||||
ResCap Acquisition | ||||||||||||
We completed the ResCap Acquisition on February 15, 2013. We acquired MSRs related to conventional (i.e., conforming to the underwriting standards of Fannie Mae or Freddie Mac; collectively referred to as Agency loans), government insured (loans insured by FHA or VA) and non-Agency residential forward mortgage loans (commonly referred to as non-prime, subprime or private-label loans) with a UPB of $111.2 billion and master servicing agreements with a UPB of $44.9 billion. The ResCap Acquisition included advances and elements of the servicing platform related to the acquired MSRs, as well as certain diversified fee-based business operations that included recovery, title and closing services. We also assumed subservicing contracts with a UPB of $27.0 billion. Under the terms of the ResCap Acquisition, we were obligated to acquire certain servicing rights and subservicing agreements that were not settled as part of the initial closing on February 15, 2013 as a result of objections raised in connection with the sale. We purchased these MSRs and assumed the subservicing contracts from ResCap when such consents and approvals were obtained. We completed subsequent settlements and purchased additional MSRs as objections were resolved. | ||||||||||||
To finance the ResCap Acquisition, we deployed $840.0 million from the proceeds of a new $1.3 billion senior secured term loan (SSTL) facility and borrowed an additional $1.2 billion pursuant to two new servicing advance facilities and one existing facility. We settled the subsequent closings with cash. Ocwen assumed certain limited liabilities as part of the transaction, including certain employee liabilities and certain business payables outstanding at the closing date. Under the agreement with ResCap, Ocwen generally did not assume any contingent obligations, including pending or threatened litigation, financial obligations in connection with any settlements, orders or similar agreements entered into by ResCap or obligations in connection with any representations or warranties associated with loans previously sold by ResCap except for litigation that may arise in the ordinary course of servicing mortgage loans relating to servicing agreements assumed by Ocwen. Ocwen assumed all liabilities related to servicing loans that are guaranteed by Ginnie Mae, whether arising prior to or after the closing date. | ||||||||||||
Post-Acquisition Results of Operations | ||||||||||||
The following table presents the revenue and earnings of the ResCap operations that are included in our unaudited Consolidated Statement of Operations from the acquisition date of February 15, 2013 through March 31, 2013: | ||||||||||||
Revenues | $ | 74,853 | ||||||||||
Net income | $ | 14,879 | ||||||||||
Pro Forma Results of Operations | ||||||||||||
The following table presents unaudited supplemental pro forma information for Ocwen for the three months ended March 31, 2013 as if the ResCap Acquisition occurred on January 1, 2012. Pro forma adjustments include: | ||||||||||||
• | conforming servicing revenues to the revenue recognition policies followed by Ocwen; | |||||||||||
• | conforming the accounting for MSRs to the valuation and amortization policies of Ocwen; | |||||||||||
• | adjusting interest expense to eliminate the pre-acquisition interest expense of ResCap and to recognize interest expense as if the acquisition-related debt of Ocwen had been outstanding at January 1, 2012; and | |||||||||||
• | reporting acquisition-related charges for professional services as if they had been incurred in 2012 rather than 2013. | |||||||||||
Revenues | $ | 454,003 | ||||||||||
Net income | $ | 36,303 | ||||||||||
Other Acquisitions | ||||||||||||
Correspondent One S.A. (Correspondent One) | ||||||||||||
On March 31, 2013, we increased our ownership in Correspondent One, an entity formed with Altisource in March 2011, from 49% to 100%. Correspondent One facilitates the purchase of conventional and government insured residential mortgages from approved mortgage originators and resells the mortgages to secondary market investors. We acquired the shares of Correspondent One held by Altisource (49% interest) for $12.6 million and acquired the remaining shares held by an unrelated entity for $0.9 million. We accounted for this transaction as an acquisition and recognized the assets acquired and liabilities assumed at their fair values as of the acquisition date. The acquired net assets were $26.3 million and consisted primarily of cash ($23.0 million) and residential mortgage loans ($1.1 million). We remeasured our previously held investment, which we accounted for using the equity method, at fair value and recognized a loss of $0.4 million. We did not recognize goodwill in connection with this acquisition. Correspondent One is not material to our financial condition, results of operations or cash flows. | ||||||||||||
Liberty | ||||||||||||
On April 1, 2013, we completed the Liberty Acquisition for $22.0 million in cash. In addition, and as part of the closing, Ocwen repaid Liberty’s $9.1 million existing outstanding debt to the sellers. Liberty is engaged in the origination, purchase, sale and securitization of reverse mortgage loans, both retail and wholesale. We acquired Liberty’s reverse mortgage origination platform, including reverse mortgage loans with a UPB of $55.2 million. The acquired net assets were $31.1 million and consisted primarily of residential reverse mortgage loans ($60.0 million), receivables ($11.2 million), loans held for investment ($10.3 million) and cash ($4.6 million) less amounts due under warehouse facilities ($46.3 million) and HMBS-related borrowings ($10.2 million). We recognized $3.0 million of goodwill in connection with this acquisition. The acquisition of Liberty did not have a material impact on our financial condition, results of operations or cash flows. | ||||||||||||
Ocwen Structured Investments, LLC (OSI) | ||||||||||||
On January 31, 2014, we increased our ownership in OSI from 26.00% to 87.35%. OSI invests primarily in residential MSRs and the related lower tranches and residuals of mortgage-backed securities. We acquired the additional interests in OSI for $11.0 million. We accounted for this transaction as an acquisition and recognized 100% of the assets acquired and liabilities assumed at their fair values as of the acquisition date. We recognized in equity a noncontrolling interest at its proportionate 12.65% share of the net assets acquired. The acquired net assets were $20.0 million and consisted primarily of MSRs ($9.0 million), mortgage-backed securities ($7.7 million) and cash ($3.2 million). The acquisition of OSI did not have a material impact on our financial condition, results of operations or cash flows. | ||||||||||||
Facility Closure Costs | ||||||||||||
We have incurred employee termination benefits, primarily consisting of severance and Worker Adjustment and Retraining Notification Act compensation, and lease termination costs for the closure of leased facilities in connection with our business acquisitions. The following table provides a reconciliation of the beginning and ending liability balances for these termination costs: | ||||||||||||
Employee termination benefits | Lease termination costs | Total | ||||||||||
Liability balance as at December 31, 2013 | $ | 4,816 | $ | 2,454 | $ | 7,270 | ||||||
Additions charged to operations (1) | 10,584 | — | 10,584 | |||||||||
Amortization of discount | — | 42 | 42 | |||||||||
Payments | (10,370 | ) | (341 | ) | (10,711 | ) | ||||||
Liability balance as at March 31, 2014 (2) | $ | 5,030 | $ | 2,155 | $ | 7,185 | ||||||
-1 | $9.5 million was recognized in the Servicing segment, $(0.1) million was recognized in the Lending segment and the remaining $1.2 million was recognized in the Corporate Items and Other segment. Charges related to employee termination benefits are reported in Compensation and benefits expense in the unaudited Consolidated Statement of Operations. The liabilities are included in Other liabilities in the unaudited Consolidated Balance Sheet. | |||||||||||
-2 | We expect the remaining liability for employee termination benefits at March 31, 2014 to be settled in 2014. |
Sales_of_Advances_and_MSRs
Sales of Advances and MSRs | 3 Months Ended | |||
Mar. 31, 2014 | ||||
Transfers and Servicing of Financial Assets [Abstract] | ' | |||
Sales of Advances and MSRs | ' | |||
Note 4 — Sales of Advances and MSRs | ||||
In order to efficiently finance our assets and operations and to create liquidity, we periodically sell MSRs, Rights to MSRs and servicing advances to market participants, including Home Loan Servicing Solutions, Ltd. and its wholly owned subsidiary, HLSS Holdings, LLC (collectively HLSS). We typically retain the right to subservice loans when we sell MSRs and Rights to MSRs. To the extent applicable, counterparties may also acquire advance SPEs and the related match funded liabilities. In connection with sales of Rights to MSRs, we retain legal ownership of the MSRs and continue to service the related mortgage loans until such time as all necessary consents are received. We are obligated to transfer legal ownership of the MSRs upon obtaining all required third party consents. As it relates to the sale of Rights to MSRs to HLSS (together with the sale of the related servicing advances, the HLSS Transactions), upon transfer, we would subservice the loans pursuant to a subservicing agreement, as amended, with HLSS. During the three months ended March 31, 2013, we completed HLSS Transactions relating to the Rights to MSRs for $15.9 billion of UPB. We did not complete any sales of Rights to MSRs to HLSS during the three months ended March 31, 2014. See Note 19 — Related Party Transactions for additional information regarding the agreements with HLSS. | ||||
The following table provides a summary of the assets and liabilities sold in connection with the HLSS Transactions during the three months ended March 31, 2013: | ||||
Sale of MSRs accounted for as a financing | $ | 100,707 | ||
Sale of advances and match funded advances | 703,206 | |||
Sales price, as adjusted | 803,913 | |||
Amount due to (from) HLSS for post-closing adjustments at March 31 | 10,406 | |||
Cash received on current year sales | 814,319 | |||
Amount received from HLSS as settlement of post-closing adjustments outstanding at the end of the previous year | — | |||
Total cash received | $ | 814,319 | ||
To the extent we retain legal title to the MSRs, the sales of Rights to MSRs are accounted for as financings. Upon receipt of third party consents, we derecognize the related MSRs. Upon derecognition, any resulting gain or loss is deferred and amortized over the expected life of the related subservicing agreement. Until derecognition, we continue to recognize the full amount of servicing revenue and amortization of the MSRs. | ||||
The related advance sales generally meet the requirements for sale accounting and are derecognized from our financial statements at the time of the sale. In the event the purchaser acquires an advance SPE in connection with the sale, we derecognize the assets and liabilities of the advance SPEs at the time of the sale. | ||||
In March 2014, Ocwen sold advances related to certain FHA-insured mortgage loans to HLSS Mortgage Master Trust (HLSS Mortgage), a wholly owned subsidiary of HLSS. The advance sale was treated as a financing. See Note 6 — Loans Held for Sale for additional information. |
Fair_Value
Fair Value | 3 Months Ended | |||||||||||||||||||
Mar. 31, 2014 | ||||||||||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||||||||||
Fair Value | ' | |||||||||||||||||||
Note 5 — Fair Value | ||||||||||||||||||||
Fair value is estimated 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 that 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 whereby the highest priority is given to Level 1 inputs and the lowest to Level 3 inputs. | ||||||||||||||||||||
Level 1: | Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date. | |||||||||||||||||||
Level 2: | Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. | |||||||||||||||||||
Level 3: | Unobservable inputs for the asset or liability. | |||||||||||||||||||
We classify assets in their entirety based on the lowest level of input that is significant to the fair value measurement. | ||||||||||||||||||||
The carrying amounts and the estimated fair values of our financial instruments and our nonfinancial assets measured at fair value on a recurring or non-recurring basis are as follows at the dates indicated: | ||||||||||||||||||||
March 31, 2014 | December 31, 2013 | |||||||||||||||||||
Level | Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||||||
Financial assets: | ||||||||||||||||||||
Loans held for sale: | ||||||||||||||||||||
Loans held for sale, at fair value (a) | 2 | $ | 338,228 | $ | 338,228 | $ | 503,753 | $ | 503,753 | |||||||||||
Loans held for sale, at lower of cost or fair value (b) | 3 | 45,475 | 45,475 | 62,907 | 62,907 | |||||||||||||||
Total Loans held for sale | $ | 383,703 | $ | 383,703 | $ | 566,660 | $ | 566,660 | ||||||||||||
Loans held for investment - Reverse mortgages, at fair value (a) | 3 | $ | 923,464 | $ | 923,464 | $ | 618,018 | $ | 618,018 | |||||||||||
Advances and match funded advances (c) | 3 | 3,593,780 | 3,593,780 | 3,443,215 | 3,443,215 | |||||||||||||||
Receivables, net (c) | 3 | 182,724 | 182,724 | 152,516 | 152,516 | |||||||||||||||
Financial liabilities: | ||||||||||||||||||||
Match funded liabilities (c) | 3 | $ | 2,361,662 | $ | 2,361,662 | $ | 2,364,814 | $ | 2,364,814 | |||||||||||
Financing liabilities: | ||||||||||||||||||||
HMBS-related borrowings, at fair value (a) | 3 | $ | 870,462 | $ | 870,462 | $ | 615,576 | $ | 615,576 | |||||||||||
Other (c) | 3 | 822,685 | 822,685 | 651,397 | 651,397 | |||||||||||||||
Total Financing liabilities | $ | 1,693,147 | $ | 1,693,147 | $ | 1,266,973 | $ | 1,266,973 | ||||||||||||
Other secured borrowings: | ||||||||||||||||||||
Senior secured term loan (c) | 3 | $ | 1,281,981 | $ | 1,267,043 | $ | 1,284,901 | $ | 1,270,108 | |||||||||||
Other (c) | 3 | 352,018 | 352,018 | 492,768 | 492,768 | |||||||||||||||
Total Other secured borrowings | $ | 1,633,999 | $ | 1,619,061 | $ | 1,777,669 | $ | 1,762,876 | ||||||||||||
Derivative financial instruments (a): | ||||||||||||||||||||
IRLCs | 2 | $ | 9,420 | $ | 9,420 | $ | 8,433 | $ | 8,433 | |||||||||||
Forward MBS trades | 1 | 699 | 699 | 6,905 | 6,905 | |||||||||||||||
Interest rate caps | 3 | 324 | 324 | 442 | 442 | |||||||||||||||
MSRs: | ||||||||||||||||||||
MSRs, at fair value (a) | 3 | $ | 110,826 | $ | 110,826 | $ | 116,029 | $ | 116,029 | |||||||||||
MSRs, at amortized cost (c) | 3 | 1,929,529 | 2,774,910 | 1,953,352 | 2,441,719 | |||||||||||||||
Total MSRs | $ | 2,040,355 | $ | 2,885,736 | $ | 2,069,381 | $ | 2,557,748 | ||||||||||||
(a) | Measured at fair value on a recurring basis. | |||||||||||||||||||
(b) | Measured at fair value on a non-recurring basis. | |||||||||||||||||||
(c) | Disclosed, but not carried, at fair value. | |||||||||||||||||||
The following tables present a reconciliation of the changes in fair value of Level 3 assets and liabilities that we measure at fair value on a recurring basis: | ||||||||||||||||||||
Loans Held for Investment - Reverse Mortgages | HMBS-Related Borrowings | Derivative Financial Instruments, net | MSRs | Total | ||||||||||||||||
Fair value at January 1, 2014 | $ | 618,018 | $ | (615,576 | ) | $ | 442 | $ | 116,029 | $ | 118,913 | |||||||||
Purchases, issuances, sales and settlements: | ||||||||||||||||||||
Purchases | — | — | — | — | — | |||||||||||||||
Issuances | 176,658 | (226,626 | ) | 24 | — | (49,944 | ) | |||||||||||||
Transfer from loans held for sale, at fair value | 110,874 | — | — | — | 110,874 | |||||||||||||||
Sales | — | — | — | — | — | |||||||||||||||
Settlements | (14,029 | ) | 5,386 | — | — | (8,643 | ) | |||||||||||||
273,503 | (221,240 | ) | 24 | — | 52,287 | |||||||||||||||
Total realized and unrealized gains and (losses): (1) | ||||||||||||||||||||
Included in earnings | 31,943 | (33,646 | ) | (142 | ) | (5,203 | ) | (7,048 | ) | |||||||||||
Included in Other comprehensive income (loss) | — | — | — | — | — | |||||||||||||||
31,943 | (33,646 | ) | (142 | ) | (5,203 | ) | (7,048 | ) | ||||||||||||
Transfers in and / or out of Level 3 | — | — | — | — | — | |||||||||||||||
Fair value at March 31, 2014 | $ | 923,464 | $ | (870,462 | ) | $ | 324 | $ | 110,826 | $ | 164,152 | |||||||||
Derivative Financial Instruments, net | MSRs | Total | ||||||||||||||||||
Fair value at January 1, 2013 | $ | (10,668 | ) | $ | 85,213 | $ | 74,545 | |||||||||||||
Purchases, issuances, sales and settlements: | ||||||||||||||||||||
Purchases | — | — | — | |||||||||||||||||
Issuances | — | — | — | |||||||||||||||||
Sales | — | — | — | |||||||||||||||||
Settlements | 310 | — | 310 | |||||||||||||||||
310 | — | 310 | ||||||||||||||||||
Total realized and unrealized gains and (losses) (1): | ||||||||||||||||||||
Included in earnings | (1,353 | ) | (679 | ) | (2,032 | ) | ||||||||||||||
Included in Other comprehensive income (loss) | (6,924 | ) | — | (6,924 | ) | |||||||||||||||
(8,277 | ) | (679 | ) | (8,956 | ) | |||||||||||||||
Transfers in and / or out of Level 3 | — | — | — | |||||||||||||||||
Fair value at March 31, 2013 | $ | (18,635 | ) | $ | 84,534 | $ | 65,899 | |||||||||||||
-1 | Total losses attributable to derivative financial instruments still held at March 31, 2014 and March 31, 2013 were $0.1 million and $4.8 million, respectively. | |||||||||||||||||||
The methodologies that we use and key assumptions that we make to estimate the fair value of instruments and other assets and liabilities measured at fair value on a recurring or non-recurring basis and those disclosed, but not carried, at fair value are described below: | ||||||||||||||||||||
Loans Held for Sale | ||||||||||||||||||||
We originate and purchase residential forward and reverse mortgage loans that we intend to sell to the GSEs. We also own residential mortgage loans that are not eligible to be sold to the GSEs due to delinquency or other factors. Residential forward and reverse mortgage loans that we intend to sell to the GSEs are carried at fair value as a result of a fair value election. Such loans are subject to changes in fair value due to fluctuations in interest rates from the closing date through the date of the sale of the loan into the secondary market. These loans are classified within Level 2 of the valuation hierarchy because the primary component of the price is obtained from observable values of mortgage forwards for loans of similar terms and characteristics. We have the ability to access this market, and it is the market into which conventional and government insured mortgage loans are typically sold. | ||||||||||||||||||||
We repurchase certain loans from Ginnie Mae guaranteed securitizations in connection with loan modifications and loan resolution activity as part of our servicing obligations. These are classified as loans held for sale at the lower of cost or fair value, in the case of modified loans, as we expect to redeliver (sell) the loans to new Ginnie Mae guaranteed securitizations. The fair value of these loans is estimated using published forward Ginnie Mae prices. Loans repurchased in connection with loan resolution activities are modified or otherwise remediated through loss mitigation activities or are reclassified to receivables. Because these loans are insured or guaranteed by the FHA or VA, the fair value of these loans represents the net recovery value taking into consideration the insured or guaranteed claim | ||||||||||||||||||||
For all other loans held for sale, which we report at the lower of cost or fair value, market illiquidity has reduced the availability of observable pricing data. When we enter into an agreement to sell a loan or pool of loans to an investor at a set price, we value the loan or loans at the commitment price. We base the fair value of uncommitted loans on the expected future cash flows discounted at a rate commensurate with the risk of the estimated cash flows. | ||||||||||||||||||||
Loans Held for Investment – Reverse Mortgages | ||||||||||||||||||||
We have elected to measure these loans at fair value. For transferred reverse mortgage loans that do not qualify as sales for accounting purposes, we base the fair value on the expected future cash flows discounted over the expected life of the loans at a rate commensurate with the risk of the estimated cash flows. Significant assumptions include expected prepayment and delinquency rates and cumulative loss curves. The discount rate assumption for these assets is primarily based on an assessment of current market yields on newly originated reverse mortgage loans, expected duration of the asset and current market interest rates. | ||||||||||||||||||||
The more significant assumptions used in the March 31, 2014 valuation include: | ||||||||||||||||||||
• | Life in years ranging from 2.56 to 22.86 (weighted average of 8.05); | |||||||||||||||||||
• | Conditional repayment rate ranging from 4.79% to 56.59% (weighted average of 8.84%); and | |||||||||||||||||||
• | Discount rate of 1.63%. | |||||||||||||||||||
Significant increases or decreases in any of these assumptions in isolation could result in a significantly lower or higher fair value, respectively. | ||||||||||||||||||||
Mortgage Servicing Rights | ||||||||||||||||||||
Amortized Cost MSRs | ||||||||||||||||||||
We estimate the fair value of MSRs carried at amortized cost using a combination of internal models and data provided by third-party valuation experts. The most significant assumptions used in our internal valuation are the speed at which mortgages prepay and delinquency experience. Other assumptions typically used in the internal valuation are: | ||||||||||||||||||||
• | Cost of servicing | • | Interest rate used for computing float earnings | |||||||||||||||||
• | Discount rate | • | Compensating interest expense | |||||||||||||||||
• | Interest rate used for computing the cost of financing servicing advances | • | Collection rate of other ancillary fees | |||||||||||||||||
The significant components of the estimated future cash inflows for MSRs include servicing fees, late fees, float earnings and other ancillary fees. Significant cash outflows include the cost of servicing, the cost of financing servicing advances and compensating interest payments. | ||||||||||||||||||||
We estimate fair value using internal models and with the assistance of third-party valuation experts. Our internal models calculate the present value of expected future cash flows utilizing assumptions that we believe are used by market participants. We derive prepayment speeds and delinquency assumptions from historical experience adjusted for prevailing market conditions. We utilize a discount rate provided by third-party valuation experts, and we consider external market-based assumptions in determining the interest rate for the cost of financing advances, the interest rate for float earnings and the cost of servicing. | ||||||||||||||||||||
Third-party valuation experts generally utilize: (a) transactions involving instruments with similar collateral and risk profiles, adjusted as necessary based on specific characteristics of the asset or liability being valued; and/or (b) industry-standard modeling, such as a discounted cash flow model, in arriving at their estimate of fair value. The prices provided by the valuation experts reflect their observations and assumptions related to market activity, including risk premiums and liquidity adjustments. The models and related assumptions used by the valuation experts are owned and managed by them and, in many cases, the significant inputs used in the valuation techniques are not reasonably available to us. However, we have an understanding of the processes and assumptions used to develop the prices based on our ongoing due diligence, which includes regular discussions with the valuation experts. We believe that the procedures executed by the valuation experts, combined with our internal verification and analytical procedures, provide assurance that the prices used in our unaudited consolidated financial statements comply with the accounting guidance for fair value measurements and disclosures and reflect the assumptions that a market participant would use. | ||||||||||||||||||||
The more significant assumptions used in the March 31, 2014 valuation of our MSRs carried at amortized cost include: | ||||||||||||||||||||
• | Prepayment speeds ranging from 6.62% to 17.63% (weighted average of 13.78%) depending on loan type; | |||||||||||||||||||
• | Delinquency rates ranging from 7.02% to 31.04% (weighted average of 16.59%) depending on loan type; | |||||||||||||||||||
• | Interest rate of 1-month LIBOR plus a range of 0.00% to 3.50% for computing the cost of financing servicing advances; | |||||||||||||||||||
• | Interest rate of 1-month LIBOR for computing float earnings; and | |||||||||||||||||||
• | Discount rates ranging from 9.88% to 16.46% (weighted average of 11.67%) | |||||||||||||||||||
We perform an impairment analysis based on the difference between the carrying amount and fair value after grouping the underlying loans into the applicable strata. In response to the significant change in the composition of our MSR portfolio as a result of recent acquisitions, our stratum are defined as conventional, government insured and non-Agency (i.e. all private label primary and master serviced loans). | ||||||||||||||||||||
Fair Value MSRs | ||||||||||||||||||||
MSRs carried at fair value are classified within Level 3 of the valuation hierarchy due to the use of third party valuation expert pricing without adjustment. The fair value of these MSRs is within the range of prices provided by the valuation experts; however, a change in the valuation inputs utilized by the valuation expert or a change in the best point price in the range might result in a significantly higher or lower fair value measurement. | ||||||||||||||||||||
The key assumptions (generally unobservable inputs) used in the valuation of these MSRs include: | ||||||||||||||||||||
• | Mortgage prepayment speeds; | |||||||||||||||||||
• | Delinquency rates; and | |||||||||||||||||||
• | Discount rates. | |||||||||||||||||||
The primary assumptions used in the March 31, 2014 valuation include an 8.35% weighted average constant prepayment rate and a discount rate equal to 1-Month LIBOR plus 10.28%. | ||||||||||||||||||||
Advances | ||||||||||||||||||||
We value advances at their net realizable value, which generally approximates fair value, because advances have no stated maturity, generally are realized within a relatively short period of time and do not bear interest. | ||||||||||||||||||||
Receivables | ||||||||||||||||||||
The carrying value of receivables generally approximates fair value because of the relatively short period of time between their origination and realization. | ||||||||||||||||||||
Borrowings | ||||||||||||||||||||
Match Funded Liabilities | ||||||||||||||||||||
For match funded liabilities that bear interest at a rate that is adjusted regularly based on a market index, the carrying value approximates fair value. For match funded liabilities that bear interest at a fixed rate, we determine fair value by discounting the future principal and interest repayments at a market rate commensurate with the risk of the estimated cash flows. We estimate principal repayments of match funded liabilities during the amortization period based on our historical advance collection rates and taking into consideration any plans to refinance the notes. At March 31, 2014, the interest on all borrowings under match funded facilities was based on a variable rate adjusted regularly using a market index, and therefore, the carrying value approximates fair value. | ||||||||||||||||||||
HMBS-Related Borrowings | ||||||||||||||||||||
We have elected to measure these borrowings at fair value. We recognize the proceeds from the transfer of reverse mortgages as a secured borrowing that we account for at fair value. These borrowings are not actively traded and therefore quoted market prices are not available. We determine fair value by discounting the future principal and interest repayments over the estimated life of the borrowing at a market rate commensurate with the risk of the estimated cash flows. Significant assumptions include prepayments, discount rate and borrower mortality rates for reverse mortgages. The discount rate assumption for these liabilities is based on an assessment of current market yields for newly issued HMBS, expected duration and current market interest rates. | ||||||||||||||||||||
The more significant assumptions used in the March 31, 2014 valuation include: | ||||||||||||||||||||
• | Life in years ranging from 2.54 to 22.24 (weighted average of 7.01); | |||||||||||||||||||
• | Conditional repayment rate ranging from 4.79% to 56.02% (weighted average of 8.84%); and | |||||||||||||||||||
• | Discount rate of 1.06%. | |||||||||||||||||||
Significant increases or decreases in any of these assumptions in isolation would result in a significantly higher or lower fair value. | ||||||||||||||||||||
Financing Liability - MSRs Pledged | ||||||||||||||||||||
The carrying value of the Financing Liability - MSRs Pledged approximates fair value. We initially establish the value of the Financing Liability - MSRs Pledged based on the price at which the Rights to MSRs are sold to HLSS. Thereafter, the carrying value of the Financing Liability - MSRs pledged is adjusted from time to time to reflect changes in the net present value of the estimated future cash flows of the underlying MSRs. Since these cash flows are ceded to HLSS as part of the HLSS Transactions, the future cash flows of the underlying MSRs also represent the future payments to HLSS of principal and interest on the Financing Liability - MSRs Pledged. As a result, the net present value of the future cash flows related to the underlying MSRs also represent the net present value of the principal and interest payments to be made on the Financing Liability - MSRs Pledged. The net present value of these future cash flows represents the fair value of the Financing Liability - MSRs Pledged. | ||||||||||||||||||||
Other Secured Borrowings | ||||||||||||||||||||
The carrying value of secured borrowings that bear interest at a rate that is adjusted regularly based on a market index approximates fair value. For other secured borrowings that bear interest at a fixed rate, we determine fair value by discounting the future principal and interest repayments at a market rate commensurate with the risk of the estimated cash flows. For the SSTL, we used a discount rate of 5.6% and the repayment schedule specified in the loan agreement to determine fair value at March 31, 2014. | ||||||||||||||||||||
Derivative Financial Instruments | ||||||||||||||||||||
Interest rate lock commitments (IRLCs) represent an agreement to purchase loans from a third-party originator, an agreement to extend credit to a mortgage applicant (locked pipeline) or an agreement to sell a loan to investors, whereby the interest rate is set prior to funding. IRLCs are classified within Level 2 of the valuation hierarchy as the primary component of the price is obtained from observable values of mortgage forwards for loans of similar terms and characteristics. Fair value amounts of IRLCs are adjusted for expected “fallout” (locked pipeline loans not expected to close) using models that consider cumulative historical fallout rates and other factors. | ||||||||||||||||||||
We enter into forward mortgage-backed securities (MBS) trades to provide an economic hedge against changes in fair value of residential forward and reverse mortgage loans held for sale that we carry at fair value. Forward MBS trades are primarily used to fix the forward sales price that will be realized upon the sale of mortgage loans into the secondary market. Forward contracts are actively traded in the market and we obtained unadjusted market quotes for these derivatives, thus they are classified within Level 1 of the valuation hierarchy. | ||||||||||||||||||||
In addition, we may use interest rate caps to minimize future interest rate exposures on variable rate debt issued on servicing advance facilities from increases in one-month LIBOR interest rates. The fair value for interest rate caps is based on counterparty market prices and adjusted for counterparty credit risk. | ||||||||||||||||||||
See Note 15 — Derivative Financial Instruments and Hedging Activities for additional information regarding derivative financial instruments. |
Loans_Held_for_Sale
Loans Held for Sale | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Receivables [Abstract] | ' | |||||||
Loans Held for Sale | ' | |||||||
Note 6 — Loans Held for Sale | ||||||||
Loans Held for Sale - Fair Value | ||||||||
Loans held for sale, at fair value, represent residential forward and reverse mortgage loans originated or purchased and held until sold to secondary market investors, such as GSEs or other third parties. The following table summarizes the activity in the balance of Loans held for sale, at fair value, during the three months ended March 31: | ||||||||
2014 | 2013 | |||||||
Beginning balance | $ | 503,753 | $ | 426,480 | ||||
Originations and purchases | 1,416,797 | 2,462,531 | ||||||
Proceeds from sales | (1,481,403 | ) | (2,563,247 | ) | ||||
Transfers to loans held for investment - reverse mortgages | (110,874 | ) | — | |||||
Gain (loss) on sale of loans | 12,863 | (29,786 | ) | |||||
Other | (2,908 | ) | (464 | ) | ||||
Ending balance | $ | 338,228 | $ | 295,514 | ||||
At March 31, 2014, Loans held for sale, at fair value with a UPB of $314.0 million were pledged to secure warehouse lines of credit in our Lending segment. See Note 12 — Borrowings for additional information regarding these facilities. | ||||||||
Loans Held for Sale - Lower of Cost or Fair Value | ||||||||
Loans held for sale, at lower of cost or fair value, include residential loans that we do not intend to hold to maturity. The following table summarizes the activity in the balance of Loans held for sale, at lower of cost or fair value, during the three months ended March 31: | ||||||||
2014 | 2013 | |||||||
Beginning balance | $ | 62,907 | $ | 82,866 | ||||
Purchases | 959,756 | 53,674 | ||||||
Proceeds from sales | (835,786 | ) | (66,868 | ) | ||||
Principal payments | (96,300 | ) | (460 | ) | ||||
Transfers to accounts receivable | (66,187 | ) | — | |||||
Gain on sale of loans | 23,031 | 1,423 | ||||||
Increase in valuation allowance | (4,163 | ) | (7,269 | ) | ||||
Modifications, charge offs and other | 2,217 | (751 | ) | |||||
Ending balance | $ | 45,475 | $ | 62,615 | ||||
The balances at March 31, 2014 and March 31, 2013 are net of valuation allowances of $36.0 million and $21.9 million, respectively. | ||||||||
The balances at March 31, 2014 and 2013 include $6.1 million and $42.0 million, respectively, of loans that we were required to repurchase from Ginnie Mae guaranteed securitizations as part of our servicing obligations. Repurchased loans are modified or otherwise remediated through loss mitigation activities or are reclassified to receivables. | ||||||||
On March 3, 2014, we purchased severely delinquent FHA-insured loans with a UPB of $549.4 million out of Ginnie Mae securities under the terms of a conditional repurchase option whereby as servicer we have the right, but not the obligation, to repurchase delinquent loans at par (the Ginnie Mae early buy-out (EBO) program). Immediately after their purchase, we sold the loans (the Ginnie Mae EBO Loans) and related advances to HLSS Mortgage (the Ginnie Mae EBO Transaction) for $612.3 million ($556.4 million for the Ginnie Mae EBO Loans and $55.7 million for the servicing advances). | ||||||||
Gain on Loans Held for Sale, Net | ||||||||
The following table summarizes the activity in Gain on loans held for sale, net, during the three months ended March 31: | ||||||||
2014 | 2013 | |||||||
Gain on sales of loans (1)(2) | $ | 54,993 | $ | (1,081 | ) | |||
Change in fair value of IRLCs | 986 | (1,237 | ) | |||||
Change in fair value of loans held for sale | 1,800 | (440 | ) | |||||
Gain (loss) on economic hedge instruments | (13,610 | ) | 10,189 | |||||
Other | (182 | ) | (682 | ) | ||||
$ | 43,987 | $ | 6,749 | |||||
-1 | Includes gains of $11.6 million and $28.7 million for the three months ended March 31, 2014 and 2013, respectively, representing the value assigned to MSRs retained on sales of loans. Also includes gains of $22.8 million recorded during the three months ended March 31, 2014 on sales of repurchased loans into Ginnie Mae guaranteed securitizations. | |||||||
-2 | Includes gains of $16.1 million recorded during the three months ended March 31, 2014 in connection with sales of reverse mortgages into Ginnie Mae guaranteed securitizations. |
Advances
Advances | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Advances [Abstract] | ' | |||||||
Advances | ' | |||||||
Note 7 — Advances | ||||||||
Advances, net, representing payments made on behalf of borrowers or on foreclosed properties, consisted of the following at the dates indicated: | ||||||||
March 31, 2014 | December 31, 2013 | |||||||
Servicing: | ||||||||
Principal and interest | $ | 189,338 | $ | 141,307 | ||||
Taxes and insurance | 465,359 | 477,039 | ||||||
Foreclosures, bankruptcy and other | 278,713 | 268,053 | ||||||
933,410 | 886,399 | |||||||
Corporate Items and Other | 4,516 | 4,433 | ||||||
$ | 937,926 | $ | 890,832 | |||||
The following table summarizes the activity in advances for the three months ended March 31: | ||||||||
2014 | 2013 | |||||||
Beginning balance | $ | 890,832 | $ | 184,463 | ||||
Acquisitions (1) | 98,875 | 205,365 | ||||||
Transfers to match funded advances | (10,156 | ) | — | |||||
Sales of advances to HLSS | — | (38,313 | ) | |||||
(Collections) new advances, net | (41,625 | ) | 210,046 | |||||
Ending balance | $ | 937,926 | $ | 561,561 | ||||
-1 | Servicing advances acquired through business acquisitions and asset acquisitions, primarily in connection with the acquisition of MSRs. See Note 3 — Business Acquisitions, Note 6 — Loans Held for Sale and Note 9 — Mortgage Servicing for additional information. |
Match_Funded_Advance
Match Funded Advance | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Transfers and Servicing [Abstract] | ' | |||||||
Match Funded Advance | ' | |||||||
Note 8 — Match Funded Advances | ||||||||
Match funded advances on residential loans we service for others are comprised of the following at the dates indicated: | ||||||||
March 31, 2014 | December 31, 2013 | |||||||
Principal and interest | $ | 1,589,396 | $ | 1,497,649 | ||||
Taxes and insurance | 847,615 | 830,113 | ||||||
Foreclosures, bankruptcy, real estate and other | 218,843 | 224,621 | ||||||
$ | 2,655,854 | $ | 2,552,383 | |||||
The following table summarizes the activity in match funded advances for the three months ended March 31: | ||||||||
2014 | 2013 | |||||||
Beginning balance | $ | 2,552,383 | $ | 3,049,244 | ||||
Acquisitions (1) | 85,521 | 1,448,371 | ||||||
Transfers from advances | 10,156 | — | ||||||
Sales of advances to HLSS | — | (664,893 | ) | |||||
New advances (collections), net | 7,794 | (396,639 | ) | |||||
Ending balance | $ | 2,655,854 | $ | 3,436,083 | ||||
-1 | Servicing advances acquired in connection with the acquisitions of MSRs through business acquisitions and asset acquisitions. See Note 3 — Business Acquisitions and Note 9 — Mortgage Servicing for additional information. |
Mortgage_Servicing
Mortgage Servicing | 3 Months Ended | |||||||||||
Mar. 31, 2014 | ||||||||||||
Transfers and Servicing [Abstract] | ' | |||||||||||
Mortgage Servicing | ' | |||||||||||
Note 2 — Securitizations and Variable Interest Entities | ||||||||||||
We securitize, sell and service forward and reverse residential mortgage loans and regularly transfer financial assets in connection with asset-backed financing arrangements. We have aggregated these securitizations and asset-backed financing arrangements into two groups: (1) securitizations of residential mortgage loans and (2) financings of advances on loans serviced for others. | ||||||||||||
We have determined that the special purpose entities (SPEs) created in connection with our match funded financing facilities are variable interest entities (VIEs) of which we are the primary beneficiary. | ||||||||||||
Securitizations of Residential Mortgage Loans | ||||||||||||
Currently, we securitize forward and reverse residential mortgage loans involving the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) (collectively the GSEs) and loans insured by the Federal Housing Authority (FHA) or Department of Veterans Affairs (VA). We retain the right to service these loans and receive servicing fees based upon the securitized loan balances and certain ancillary fees, all of which are reported in Servicing and subservicing fees on the unaudited Consolidated Statements of Operations. | ||||||||||||
Transfers of Forward Loans | ||||||||||||
We sell or securitize forward loans that we originate or that we purchase from third parties, generally in the form of mortgage-backed securities guaranteed by the GSEs or the Government National Mortgage Association (Ginnie Mae). Securitization usually occurs within 30 days of loan closing or purchase. We retain servicing rights associated with the transferred loans and receive a servicing fee for services provided. We act only as a fiduciary and do not have a variable interest in the securitization trusts. As a result, we account for these transactions as sales upon transfer. | ||||||||||||
We report the gain or loss on the transfer of the loans held for sale in Gain on loans held for sale, net in the unaudited Consolidated Statement of Operations along with changes in fair value of the loans and the gain or loss on the related derivatives. See Note 15 — Derivative Financial Instruments and Hedging Activities for information on these derivative financial instruments. We include all changes in loans held for sale and related derivative balances in operating activities in the unaudited Consolidated Statement of Cash Flows. | ||||||||||||
The following table presents a summary of cash flows received from and paid to securitization trusts related to transfers accounted for as sales that were outstanding during the three months ended March 31: | ||||||||||||
2014 | 2013 | |||||||||||
Proceeds received from securitizations | $ | 1,534,251 | $ | 2,576,792 | ||||||||
Servicing fees collected | 5,194 | 1,518 | ||||||||||
$ | 1,539,445 | $ | 2,578,310 | |||||||||
In connection with these transfers, we recorded MSRs of $11.6 million and $28.7 million during the three months ended March 31, 2014 and 2013, respectively. We initially record the MSRs at fair value and subsequently account for them at amortized cost. See Note 9 — Mortgage Servicing for information relating to MSRs. | ||||||||||||
Certain obligations arise from agreements associated with our transfers of loans. Under these agreements, we may be obligated to repurchase the loans, or otherwise indemnify or reimburse the investor or insurer for losses incurred due to material breach of contractual representations and warranties. See Note 13 — Other Liabilities for further information. | ||||||||||||
The following table presents the carrying amounts of our assets that relate to our continuing involvement with forward loans that we have transferred with servicing rights retained as well as our maximum exposure to loss including the UPB of the transferred loans at the dates indicated: | ||||||||||||
March 31, 2014 | December 31, 2013 | |||||||||||
Carrying value of assets: | ||||||||||||
Mortgage servicing rights, at amortized cost | $ | 49,219 | $ | 44,615 | ||||||||
Mortgage servicing rights, at fair value | 3,079 | 3,075 | ||||||||||
Advances and match funded advances | 11,069 | 15,888 | ||||||||||
Unpaid principal balance of loans transferred (1) | 6,497,814 | 5,641,277 | ||||||||||
Maximum exposure to loss | $ | 6,561,181 | $ | 5,704,855 | ||||||||
-1 | The UPB of the loans transferred is the maximum exposure to loss under our standard representations and warranties obligations. | |||||||||||
At March 31, 2014 and December 31, 2013, 2.9% and 2.6%, respectively, of the transferred residential loans that we serviced were 60 days or more past due. During the three months ended March 31, 2014, there were no charge-offs, net of recoveries, associated with these transferred loans. | ||||||||||||
Transfers of Reverse Mortgages | ||||||||||||
We are an approved issuer of Ginnie Mae Home Equity Conversion Mortgage-Backed Securities (HMBS) that are guaranteed by Ginnie Mae. We originate Home Equity Conversion Mortgages (HECMs, or reverse mortgages) that are insured by the FHA. We then pool the loans into HMBS that we sell into the secondary market with servicing rights retained. We have determined that loan transfers in the HMBS program do not meet the definition of a participating interest because of the servicing requirements in the product that require the issuer/servicer to absorb some level of interest rate risk, cash flow timing risk and incidental credit risk. As a result, the transfers of the HECMs do not qualify for sale accounting, and we, therefore, account for these transfers as financings. Under this accounting treatment, the HECMs are classified as Loans held for investment - reverse mortgages, at fair value, on our unaudited Consolidated Balance Sheets. We record the proceeds from the transfer of assets as secured borrowings (HMBS-related borrowings) in Financing liabilities and recognize no gain or loss on the transfer. Holders of participating interests in the HMBS have no recourse against the assets of Ocwen, except for standard representations and warranties and our contractual obligation to service the HECMs and the HMBS. | ||||||||||||
We have elected to measure the HECMS and HMBS-related borrowings at fair value. The changes in fair value of the HECMs and HMBS-related borrowings are included in Other revenues in our unaudited Consolidated Statement of Operations. Included in net fair value gains on the HECMs and related HMBS borrowings are the interest income that we expect to be collected on the HECMs and the interest expense that we expect to be paid on the HMBS-related borrowings. We report originations and collections of HECMs in investing activities in the unaudited Consolidated Statement of Cash Flows. We report net fair value gains on HECMs and the related HMBS borrowings as an adjustment to the net cash provided by or used in operating activities in the unaudited Consolidated Statement of Cash Flows. Proceeds from securitizations of HECMs and payments on HMBS-related borrowings are included in financing activities in the unaudited Consolidated Statement of Cash Flows. | ||||||||||||
At March 31, 2014 and December 31, 2013, we had HMBS-related borrowings of $870.5 million and $615.6 million and HECMs pledged as collateral to the pools of $923.5 million and $618.0 million, respectively. See Note 5 — Fair Value for a reconciliation of the changes in fair value of HECMs and HMBS-related borrowings for the three months ended March 31, 2014. | ||||||||||||
Financings of Advances on Loans Serviced for Others | ||||||||||||
Match funded advances on loans serviced for others result from our transfers of residential loan servicing advances to SPEs in exchange for cash. We consolidate these SPEs either because the transfers do not qualify for sales accounting treatment or because Ocwen is the primary beneficiary of the SPE. These SPEs issue debt supported by collections on the transferred advances. | ||||||||||||
We make these transfers under the terms of our advance facility agreements. We classify the transferred advances on our unaudited Consolidated Balance Sheets as Match funded advances and the related liabilities as Match funded liabilities. The SPEs use collections of the pledged advances to repay principal and interest and to pay the expenses of the SPE. Holders of the debt issued by these entities can look only to the assets of the SPE for satisfaction of the debt and have no recourse against Ocwen. However, Ocwen and OLS have guaranteed the payment of the obligations under the securitization documents of one of the entities. The maximum amount payable under the guarantee is limited to 10% of the notes outstanding at the end of the facility’s revolving period in December 2014. The entity to which this guarantee applies had $31.4 million of notes outstanding at March 31, 2014. The assets and liabilities of the advance financing SPEs are comprised solely of Match funded advances, Debt service accounts, Match funded liabilities and amounts due to affiliates. Amounts due to affiliates are eliminated in consolidation. | ||||||||||||
See Note 8 — Match Funded Advances, Note 11 - Other Assets and Note 12 — Borrowings for additional information. | ||||||||||||
Note 9 — Mortgage Servicing | ||||||||||||
Mortgage Servicing Rights – Amortization Method | ||||||||||||
The following tables summarize the activity in the carrying value of amortization method servicing assets for the three months ended March 31: | ||||||||||||
2014 | 2013 | |||||||||||
Beginning balance | $ | 1,953,352 | $ | 678,937 | ||||||||
Additions recognized in connection with business acquisitions: | ||||||||||||
OSI (1) | 8,954 | — | ||||||||||
ResCap Acquisition (1) | 11,370 | 393,891 | ||||||||||
Additions recognized in connection with asset acquisitions: | ||||||||||||
OneWest MSR Transaction (2) | 1,516 | — | ||||||||||
Greenpoint MSR Transaction (3) | 3,700 | — | ||||||||||
Other | 1,481 | 972 | ||||||||||
Additions recognized on the sale of mortgage loans | 11,614 | 28,705 | ||||||||||
Servicing transfers and adjustments | (364 | ) | (124 | ) | ||||||||
Amortization (4) | (62,094 | ) | (47,987 | ) | ||||||||
Ending balance | $ | 1,929,529 | $ | 1,054,394 | ||||||||
Estimated fair value at end of period | $ | 2,774,910 | $ | 1,288,732 | ||||||||
-1 | See Note 3 — Business Acquisitions for additional information regarding MSRs recognized in connection with business acquisitions. | |||||||||||
-2 | The acquired MSRs relate to mortgage loans with a UPB of $1.1 billion and related servicing advances of $34.3 million acquired in the final closing of the OneWest MSR Transaction. The OneWest MSR Transaction closed in stages, and the majority of loans were boarded onto our primary servicing platform as of December 31, 2013. | |||||||||||
-3 | The acquired MSRs relate to mortgage loans with a UPB of $948.9 million and related servicing advances of $47.6 million. | |||||||||||
-4 | In the unaudited Consolidated Statement of Operations, Amortization of mortgage servicing rights is reported net of the amortization of servicing liabilities and includes the amount of charges we recognized to increase servicing liability obligations. | |||||||||||
As disclosed in Note 4 — Sales of Advances and MSRs, we have sold certain Rights to MSRs as part of the HLSS Transactions which did not qualify as sales for accounting purposes. In addition, on February 26, 2014, we issued $123.6 million of Ocwen Asset Servicing Income Series (OASIS), Series 2014-1 Notes secured by Ocwen-owned MSRs relating to Freddie Mac mortgages of $11.8 billion UPB. We accounted for this transaction as a financing. See Note 12 — Borrowings for additional information. | ||||||||||||
The estimated amortization expense for MSRs, calculated based on assumptions used at March 31, 2014, is projected as follows over the next five years (See Note 1 — Description of Business and Basis of Presentation regarding a change in accounting estimate applicable to MRS amortization.): | ||||||||||||
2015 | $ | 227,807 | ||||||||||
2016 | 193,589 | |||||||||||
2017 | 166,401 | |||||||||||
2018 | 143,094 | |||||||||||
2019 | 68,417 | |||||||||||
Mortgage Servicing Rights—Fair Value Measurement Method | ||||||||||||
This portfolio comprises servicing rights for which we elected the fair value option and includes Agency forward residential mortgage loans for which we previously hedged the related market risks. | ||||||||||||
The following table summarizes the activity related to fair value servicing assets for the three months ended March 31: | ||||||||||||
2014 | 2013 | |||||||||||
Beginning balance | $ | 116,029 | $ | 85,213 | ||||||||
Changes in fair value (1): | ||||||||||||
Changes in market value assumptions | (3,155 | ) | 4,650 | |||||||||
Realization of cash flows and other changes | (2,048 | ) | (5,329 | ) | ||||||||
Ending balance | $ | 110,826 | $ | 84,534 | ||||||||
-1 | Changes in fair value are recognized in Servicing and origination expense in the unaudited Consolidated Statement of Operations. | |||||||||||
Because the mortgages underlying these MSRs permit the borrowers to prepay the loans, the value of the MSRs generally tends to diminish in periods of declining interest rates (as prepayments increase) and increase in periods of rising interest rates (as prepayments decrease). The following table summarizes the estimated change in the value of the MSRs that we carry at fair value as of March 31, 2014 given hypothetical instantaneous parallel shifts in the yield curve: | ||||||||||||
Adverse change in fair value | ||||||||||||
10% | 20% | |||||||||||
Weighted average prepayment speeds | $ | (8,475 | ) | $ | (16,635 | ) | ||||||
Discount rate (Option-adjusted spread) | $ | (4,881 | ) | $ | (9,371 | ) | ||||||
The sensitivity analysis measures the potential impact on fair values based on hypothetical changes (increases and decreases) in interest rates. | ||||||||||||
Portfolio of Assets Serviced | ||||||||||||
The following table presents the composition of our primary servicing and subservicing portfolios by type of property serviced as measured by UPB. The servicing portfolio represents loans for which we own the MSRs while subservicing represents all other loans. The UPB of assets serviced for others are not included on our unaudited Consolidated Balance Sheets. | ||||||||||||
Residential | Commercial | Total | ||||||||||
UPB at March 31, 2014 | ||||||||||||
Servicing (1) | $ | 391,701,237 | $ | — | $ | 391,701,237 | ||||||
Subservicing | 57,869,359 | 318,507 | 58,187,866 | |||||||||
$ | 449,570,596 | $ | 318,507 | $ | 449,889,103 | |||||||
UPB at December 31, 2013 | ||||||||||||
Servicing (1) | $ | 397,546,635 | $ | — | $ | 397,546,635 | ||||||
Subservicing | 67,104,697 | 400,502 | 67,505,199 | |||||||||
$ | 464,651,332 | $ | 400,502 | $ | 465,051,834 | |||||||
UPB at March 31, 2013 | ||||||||||||
Servicing (1) | $ | 272,252,405 | $ | — | $ | 272,252,405 | ||||||
Subservicing | 194,819,256 | 392,584 | 195,211,840 | |||||||||
$ | 467,071,661 | $ | 392,584 | $ | 467,464,245 | |||||||
-1 | Includes primary servicing UPB of $170.8 billion, $175.1 billion and $92.5 billion at March 31, 2014, December 31, 2013 and March 31, 2013, respectively, for which the Rights to MSRs have been sold to HLSS. | |||||||||||
Residential assets serviced includes foreclosed real estate. Residential assets serviced also includes small-balance commercial assets with a UPB of $2.5 billion, $2.6 billion and $2.0 billion at March 31, 2014, December 31, 2013 and March 31, 2013, respectively, that are managed using the REALServicing™ platform. Commercial assets consist of large-balance foreclosed real estate. | ||||||||||||
Servicing Revenue | ||||||||||||
The following table presents the components of servicing and subservicing fees for the three months ended March 31: | ||||||||||||
2014 | 2013 | |||||||||||
Loan servicing and subservicing fees: | ||||||||||||
Servicing | $ | 351,823 | $ | 235,156 | ||||||||
Subservicing | 33,725 | 33,866 | ||||||||||
385,548 | 269,022 | |||||||||||
Home Affordable Modification Program (HAMP) fees | 36,699 | 40,147 | ||||||||||
Late charges | 36,835 | 25,896 | ||||||||||
Loan collection fees | 8,294 | 6,382 | ||||||||||
Custodial accounts (float earnings) | 1,721 | 1,680 | ||||||||||
Other | 21,362 | 26,182 | ||||||||||
$ | 490,459 | $ | 369,309 | |||||||||
Float balances (balances in custodial accounts, which represent collections of principal and interest that we receive from borrowers, are held in escrow by an unaffiliated bank and are excluded from our balance sheet) amounted to $3.5 billion and $4.7 billion at March 31, 2014 and 2013, respectively. |
Receivables
Receivables | 3 Months Ended | |||||||||||
Mar. 31, 2014 | ||||||||||||
Receivables [Abstract] | ' | |||||||||||
Receivables | ' | |||||||||||
Note 10 — Receivables | ||||||||||||
Receivables consisted of the following at the dates indicated: | ||||||||||||
Receivables | Allowance for Losses | Net | ||||||||||
March 31, 2014 | ||||||||||||
Servicing (1) | $ | 175,029 | $ | (23,291 | ) | $ | 151,738 | |||||
Due from related parties (2) | 11,217 | — | 11,217 | |||||||||
Other (3) | 19,872 | (103 | ) | 19,769 | ||||||||
$ | 206,118 | $ | (23,394 | ) | $ | 182,724 | ||||||
December 31, 2013 | ||||||||||||
Servicing (1) | $ | 124,537 | $ | (17,419 | ) | $ | 107,118 | |||||
Income taxes receivable | 6,369 | — | 6,369 | |||||||||
Due from related parties (2) | 14,553 | — | 14,553 | |||||||||
Other (3) | 24,579 | (103 | ) | 24,476 | ||||||||
$ | 170,038 | $ | (17,522 | ) | $ | 152,516 | ||||||
-1 | The balances at March 31, 2014 and December 31, 2013 arise from our Servicing business and primarily include reimbursable expenditures due from investors and amounts to be recovered from the custodial accounts of the trustees. The balances at March 31, 2014 and December 31, 2013 include $59.8 million and $54.0 million of receivables and $16.4 million and $14.0 million of allowances for losses, respectively, related to defaulted FHA or VA insured loans repurchased from Ginnie Mae guaranteed securitizations. | |||||||||||
-2 | See Note 19 — Related Party Transactions for additional information regarding transactions with Altisource and HLSS. | |||||||||||
-3 | Includes $13.6 million related to probable losses expected to be indemnified under the terms of the Homeward merger agreement. |
Other_Assets
Other Assets | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Other Assets [Abstract] | ' | |||||||
Other Assets | ' | |||||||
Note 11 — Other Assets | ||||||||
Other assets consisted of the following at the dates indicated: | ||||||||
March 31, 2014 | December 31, 2013 | |||||||
Debt service accounts (1) | $ | 82,630 | $ | 129,897 | ||||
Contingent assets - ResCap Acquisition (2) | — | 51,932 | ||||||
Prepaid lender fees and debt issuance costs, net | 32,151 | 31,481 | ||||||
Prepaid income taxes | 25,334 | 20,585 | ||||||
Purchase price deposit (3) | 25,000 | 10,000 | ||||||
Prepaid expenses | 12,956 | 16,132 | ||||||
Derivatives, at fair value (4) | 10,409 | 15,494 | ||||||
Investment in unconsolidated entities (5) | 6,646 | 11,771 | ||||||
Other | 33,979 | 21,851 | ||||||
$ | 229,105 | $ | 309,143 | |||||
-1 | Under our advance funding facilities, we are contractually required to remit collections on pledged advances to the trustee within two days of receipt. The collected funds are not applied to reduce the related match funded debt until the payment dates specified in the indenture. The balances also include amounts that have been set aside from the proceeds of our match funded advance facilities and certain of our warehouse facilities to provide for possible shortfalls in the funds available to pay certain expenses and interest. The funds related to match funded facilities are held in interest earning accounts in the name of the SPE created in connection with the facility. | |||||||
-2 | As disclosed in Note 3 — Business Acquisitions, the purchase of certain MSRs and related advances from ResCap was not complete on the date of acquisition pending the receipt of certain consents and court approvals. We recorded a contingent asset effective on the date of the acquisition until we subsequently obtained the required consents and approvals for the MSRs and paid the additional purchase price. | |||||||
-3 | The balance at December 31, 2013 represents an initial cash deposit that we made in connection with the agreement we entered into on December 20, 2013 to acquire MSRs and related advances from Wells Fargo Bank, N.A. This deposit along with an additional deposit of $15.0 million that we made in January 2014 will be held in escrow until the transaction closes. See Note 21 - Commitments and Contingencies for additional information. | |||||||
-4 | See Note 15 — Derivative Financial Instruments and Hedging Activities for additional information regarding derivatives. | |||||||
-5 | The balance at December 31, 2013 includes an investment of $6.6 million in OSI. As disclosed in Note 3 — Business Acquisitions, we increased our ownership from 26.00% to 87.35% on January 31, 2014. Effective on that date, we began including the accounts of OSI in our consolidated financial statements and eliminated our current investment in consolidation. |
Borrowings
Borrowings | 3 Months Ended | ||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||
Debt Disclosure [Abstract] | ' | ||||||||||||||||||
Borrowings | ' | ||||||||||||||||||
Note 12 — Borrowings | |||||||||||||||||||
Match Funded Liabilities | |||||||||||||||||||
Match funded liabilities are comprised of the following at the dates indicated: | |||||||||||||||||||
Borrowing Type | Interest Rate | Maturity (1) | Amortization Date (1) | Available Borrowing Capacity (2) | March 31, 2014 | December 31, 2013 | |||||||||||||
Advance Receivable Backed Notes Series 2012-ADV1 | 1ML (4) + 250 bps | Jun. 2016 | Jun. 2014 | $ | 121,742 | $ | 353,258 | $ | 417,388 | ||||||||||
Advance Receivable Backed | 1ML + 300 bps | Dec. 2015 | Dec. 2014 | 18,630 | 31,370 | 33,211 | |||||||||||||
Note | |||||||||||||||||||
2012-Homeward Agency Advance Funding Trust | Cost of Funds + 300 bps | Mar. 2014 | Mar. 2014 | 1,562 | 23,438 | 21,019 | |||||||||||||
2012-1 (3) | |||||||||||||||||||
Advance Receivables Backed Notes, Series 2013-VF1, | 1ML + 175 bps (6) | Oct. 2044 | Oct. 2014 | 23,202 | 976,798 | 1,494,628 | |||||||||||||
Class A (5) | |||||||||||||||||||
Advance Receivables Backed Notes, Series 2013-VF2, | 1ML + 167 bps (7) | Oct. 2044 | Oct. 2014 | 10,954 | 472,758 | 385,645 | |||||||||||||
Class A (5) | |||||||||||||||||||
Advance Receivables Backed Notes, Series 2013-VF2, | 1ML + 425 bps (8) | Oct. 2044 | Oct. 2014 | 647 | 15,641 | 12,923 | |||||||||||||
Class B (5) | |||||||||||||||||||
Advance Receivables Backed Notes - Series 2014-VF3, Class A (9) | 1ML + 175 bps (9) | Oct. 2044 | Oct. 2014 | 11,601 | 488,399 | — | |||||||||||||
$ | 188,338 | $ | 2,361,662 | $ | 2,364,814 | ||||||||||||||
Weighted average interest rate | 2.04 | % | 2.08 | % | |||||||||||||||
-1 | The amortization date of our facilities 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. The maturity date is the date on which all outstanding balances must be repaid. In two advance facilities, there are multiple notes outstanding. For each note, after the amortization date, all collections that represent the repayment of advances pledged to the facility must be applied to reduce the balance of the note outstanding, and any new advances are ineligible to be financed. | ||||||||||||||||||
-2 | Borrowing capacity is available to us provided that we have additional eligible collateral to pledge. Collateral may only be pledged to one facility. At March 31, 2014, none of the available borrowing capacity could be used based on the amount of eligible collateral that had been pledged. | ||||||||||||||||||
-3 | Advance facility assumed in the Homeward Acquisition. This facility was terminated on April 16, 2014, and the advances pledged to the facility were transferred to another facility. | ||||||||||||||||||
-4 | 1-Month LIBOR (1ML) was 0.15% and 0.17% at March 31, 2014 and December 31, 2013, respectively. | ||||||||||||||||||
-5 | These notes were issued in connection with the OneWest MSR Transaction. On February 3, 2014, the maximum borrowing capacity on the 2013-VF2 notes was increased by $100.0 million to a total of $500.0 million. On March 17, 2014, the maximum borrowing capacity under the 2013-VF1 note declined by $500.0 million to a total of $1.0 billion. | ||||||||||||||||||
-6 | The interest margin on these notes increases to 200 bps on July 15, 2014, to 225 bps on August 15, 2014 and 250 bps on September 15, 2014. | ||||||||||||||||||
-7 | The interest margin on these notes increases to 191 bps on July 15, 2014, to 215 bps on August 15, 2014 and 238 bps on September 15, 2014. | ||||||||||||||||||
-8 | The interest margin on these notes increases to 486 bps on July 15, 2014, to 546 bps on August 15, 2014 and 607 bps on September 15, 2014. | ||||||||||||||||||
-9 | This note was issued on March 17, 2014 with a maximum borrowing capacity of $500.0 million. The interest margin on this note increases to 200 bps on July 15, 2014, to 225 bps on August 15, 2014 and 250 bps on September 15, 2014. | ||||||||||||||||||
Financing Liabilities | |||||||||||||||||||
Financing liabilities are comprised of the following at the dates indicated: | |||||||||||||||||||
Borrowings | Collateral | Interest Rate | Maturity | March 31, 2014 | December 31, 2013 | ||||||||||||||
Servicing: | |||||||||||||||||||
Financing liability – MSRs pledged | MSRs | -1 | -1 | $ | 634,399 | $ | 633,804 | ||||||||||||
Secured Notes, Ocwen Asset Servicing Income Series, Series 2014-1 (2) | MSRs | -2 | Feb. 2028 | 121,352 | — | ||||||||||||||
Financing Liability – Advances Pledged (3) | Advances on loans | -3 | -3 | 56,732 | — | ||||||||||||||
812,483 | 633,804 | ||||||||||||||||||
Lending: | |||||||||||||||||||
Financing liability - MSRs pledged | MSRs | -4 | -4 | 10,202 | 17,593 | ||||||||||||||
HMBS-related borrowings (5) | Loans held for investment | 1ML + 220 bps | -5 | 870,462 | 615,576 | ||||||||||||||
880,664 | 633,169 | ||||||||||||||||||
$ | 1,693,147 | $ | 1,266,973 | ||||||||||||||||
-1 | The HLSS Transaction financing liabilities have no contractual maturity but are amortized over the estimated life of the transferred Rights to MSRs using the interest method with the servicing income that is remitted to HLSS representing payments of principal and interest. For purposes of applying the interest method, the balance of the liability is reduced each month based on the change in the present value of the estimated future cash flows underlying the related MSRs. See Note 4 — Sales of Advances and MSRs for additional information regarding the HLSS Transactions. As discussed in Note 1A — Restatement of Previously Issued Consolidated Financial Statements , we are restating our previously issued unaudited Consolidated Financial Statements to correct an error in applying the interest method to financing liabilities in connection with Rights to MSRs sold to HLSS. The balance of the HLSS Transaction financing liabilities at March 31, 2014 and December 31, 2013 have been restated. | ||||||||||||||||||
-2 | OASIS noteholders are entitled to receive a monthly payment amount equal to the sum of: a) the designated servicing fee amount (21 basis points of the UPB of the reference pool of Freddie Mac mortgages); b) any termination payment amounts; c) any excess refinance amounts; and d) the note redemption amounts, each as defined in the indenture supplement for the Notes. The Notes have a final stated maturity of February 2028. We accounted for this transaction as a financing. Monthly amortization of the liability is estimated using the proportion of monthly projected service fees on the underlying MSRs as a percentage of lifetime projected fees, adjusted for the term of the security. | ||||||||||||||||||
-3 | Certain advances were sold to HLSS Mortgage on March 4, 2014. The sale of the advances did not qualify for sales accounting treatment and was accounted for as a financing. See Note 6 — Loans Held for Sale for additional information. | ||||||||||||||||||
-4 | The financing liability is being amortized using the interest method with the servicing income that is remitted to the purchaser representing payments of principal and interest. | ||||||||||||||||||
-5 | Represents amounts due to the holders of beneficial interests in Ginnie Mae guaranteed HMBS. The beneficial interests have no maturity dates, and the borrowings mature as the related loans are repaid. See Note 2 — Securitizations and Variable Interest Entities for additional information. | ||||||||||||||||||
Other Secured Borrowings | |||||||||||||||||||
Other secured borrowings are comprised of the following at the dates indicated: | |||||||||||||||||||
Borrowings | Collateral | Interest Rate | Maturity | Available Borrowing Capacity | March 31, 2014 | December 31, 2013 | |||||||||||||
Servicing: | |||||||||||||||||||
SSTL (2) | -1 | 1-Month Euro-dollar rate + 375 bps with a Eurodollar floor of 125 bps (1) | Feb. 2018 | $ | — | $ | 1,287,000 | $ | 1,290,250 | ||||||||||
Promissory note (2) | MSRs | 1ML + 350 bps | May-17 | — | — | 15,529 | |||||||||||||
Repurchase agreement | Loans held for sale (LHFS) | 1ML + 200 - 345 bps | Apr. 2014 | — | 434 | 17,507 | |||||||||||||
— | 1,287,434 | 1,323,286 | |||||||||||||||||
Lending: | |||||||||||||||||||
Master repurchase agreement (3) | LHFS | 1ML + 175 bps | Apr. 2014 | 170,261 | 129,739 | 105,659 | |||||||||||||
Participation agreement (4) | LHFS | N/A | May-14 | — | 59,075 | 81,268 | |||||||||||||
Master repurchase agreement | LHFS | 1ML + 175 - 275 bps | Jul. 2014 | 90,201 | 59,799 | 91,990 | |||||||||||||
Master repurchase agreement | LHFS | 1ML + 175 - 200 bps | Sep. 2014 | 245,092 | 54,908 | 89,836 | |||||||||||||
Master repurchase agreement | LHFS | 1ML + 275bps | Jul. 2014 | 72,894 | 27,106 | 51,975 | |||||||||||||
Mortgage warehouse agreement | LHFS | 1ML + 275 bps; floor of 350 bps | Jun. 2014 | 43,480 | 16,520 | 34,292 | |||||||||||||
621,928 | 347,147 | 455,020 | |||||||||||||||||
Corporate Items and Other: | |||||||||||||||||||
Securities sold under an agreement to repurchase (5) | Ocwen Real Estate Asset Liquidating Trust 2007-1 Notes | Class A-2 notes: 1ML + 200 bps; Class A-3 notes: 1ML + 300 bps | Monthly | — | 4,437 | 4,712 | |||||||||||||
621,928 | 1,639,018 | 1,783,018 | |||||||||||||||||
Discount (1) | — | (5,019 | ) | (5,349 | ) | ||||||||||||||
$ | 621,928 | $ | 1,633,999 | $ | 1,777,669 | ||||||||||||||
Weighted average interest rate | 5 | % | 4.86 | % | |||||||||||||||
-1 | This facility had an initial balance of $1.3 billion and was issued with an original issue discount of $6.5 million that we are amortizing over the term of the loan. We are required to repay the principal amount of the borrowings in consecutive quarterly installments of $3.3 million. In addition, we are generally required to use the net cash proceeds (as defined) from any asset sale (as defined) to repay loan principal. This provision applies to non-operating sales of assets, and net cash proceeds represent the proceeds from the sale of the assets, net of the repayment of any debt secured by a lien on the assets sold. For assets sales that are part of an HLSS Transaction, we have the option, within 180 days, either to invest the net cash proceeds in MSRs or related assets, such as advances, or to repay loan principal. The borrowings are secured by a first priority security interest in substantially all of the assets of Ocwen. Borrowings bear interest, at the election of Ocwen, at a rate per annum equal to either (a) the base rate [the greatest of (i) the prime rate in effect on such day, (ii) the federal funds rate in effect on such day plus 0.50% and (iii) the one-month Eurodollar rate (1-Month LIBOR)], plus a margin of 2.75% and a base rate floor of 2.25% or (b) the one month Eurodollar rate, plus a margin of 3.75% with a one month Eurodollar floor of 1.25%. To date we have elected option (b) to determine the interest rate. | ||||||||||||||||||
-2 | This note was repaid in full on February 28, 2014. | ||||||||||||||||||
-3 | On April 17, 2014, the maturity date of this facility was extended to April 16, 2015. | ||||||||||||||||||
-4 | Under this participation agreement, the lender provides financing on an uncommitted basis for $50.0 million to $90.0 million at the discretion of the lender. The participation agreement allows the lender to acquire a 100% beneficial interest in the underlying mortgage loans. The transaction does not qualify for sale accounting treatment and is accounted for as a secured borrowing. The lender earns the stated interest rate of the underlying mortgage loans while the loans are financed under the participation agreement. | ||||||||||||||||||
-5 | Represents repurchase agreement for Class A-2 and A-3 notes issued by Ocwen Real Estate Asset Liquidating Trust 2007-1 which have a current face value of $23.9 million at March 31, 2014. This agreement has no stated credit limit and lending is determined for each transaction based on the acceptability of the securities presented as collateral. | ||||||||||||||||||
Covenants | |||||||||||||||||||
Match funded liabilities and other secured borrowings are collateralized by specific assets. Under the terms of these borrowing agreements, we are subject to various qualitative and quantitative covenants. Collectively, these covenants include: | |||||||||||||||||||
• | Specified net worth requirements; | ||||||||||||||||||
• | Restrictions on future indebtedness; and | ||||||||||||||||||
• | Monitoring and reporting of various specified transactions or events, including specific reporting on defined events affecting collateral underlying certain borrowing agreements. | ||||||||||||||||||
Financial covenants in our borrowing agreements require that we maintain consolidated tangible net worth, the most restrictive of which is $630.0 million plus 65% of quarterly net income, without adjustment for quarterly net losses, beginning with the three months ended December 31, 2012. The required consolidated tangible net worth in connection with this agreement was $913.6 million at March 31, 2014. Should we fail to be in compliance with these requirements, remedies include but are not limited to, at the option of the facility provider, termination of further funding, acceleration of outstanding obligations, enforcement of liens against the assets securing or otherwise supporting the agreement, and other legal remedies. Our lenders can waive their contractual rights in the event of a default. Our borrowing agreements generally include cross default provisions such that a default under one agreement could trigger defaults under other agreements. We are in compliance with all of our qualitative and quantitative covenants at the date of these financial statements. |
Other_Liabilities
Other Liabilities | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Other Liabilities Disclosure [Abstract] | ' | |||||||
Other Liabilities | ' | |||||||
Note 13 — Other Liabilities | ||||||||
Other liabilities were comprised of the following at the dates indicated: | ||||||||
March 31, 2014 | December 31, 2013 | |||||||
Liability for indemnification obligations (1) | $ | 169,235 | $ | 192,716 | ||||
Accrued expenses | 97,156 | 108,870 | ||||||
Due to related parties (2) | 73,819 | 77,997 | ||||||
Liability for certain foreclosure matters (3) | 66,948 | 66,948 | ||||||
Additional purchase price due seller - ResCap Acquisition (4) | — | 54,220 | ||||||
Payable to loan servicing and subservicing investors | 44,666 | 33,501 | ||||||
Checks held for escheat | 23,283 | 24,392 | ||||||
Liability for selected tax items | 28,103 | 27,273 | ||||||
Other | 57,405 | 58,678 | ||||||
$ | 560,615 | $ | 644,595 | |||||
-1 | See Note 21 — Commitments and Contingencies for additional information. | |||||||
-2 | See Note 19 — Related Party Transactions for additional information. | |||||||
-3 | See Note 21 — Commitments and Contingencies for additional information. | |||||||
-4 | See Note 3 — Business Acquisitions for additional information. |
Equity
Equity | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Equity [Abstract] | ' | |||||||
Equity | ' | |||||||
Note 14 — Equity | ||||||||
Common Stock | ||||||||
On October 31, 2013, we announced that Ocwen’s Board of Directors had authorized a share repurchase program for an aggregate of up to $500.0 million of Ocwen’s issued and outstanding shares of common stock. Repurchases may be made in open market transactions at prevailing market prices or in privately negotiated transactions. Unless we amend the share repurchase program or repurchase the full $500.0 million amount by an earlier date, the share repurchase program will continue through July 2016. No assurances can be given as to the amount of shares, if any, that we may repurchase in any given period. The repurchase of shares issued in connection with the conversion of our Series A Perpetual Convertible Preferred Stock (the Preferred Shares) is not considered to be part of this repurchase program and, therefore, does not count against the $500.0 million aggregate value limit. During the three months ended March 31, 2014, we completed the repurchase of 60,000 shares of common stock in the open market under this program for a total purchase price of $2.3 million. Through March 31, 2014, we have completed the repurchase of 1,185,707 total shares of common stock under this program for an aggregate purchase price of $62.3 million. See Note 22 - Subsequent Events for information regarding repurchases completed subsequent to March 31, 2014. | ||||||||
Accumulated Other Comprehensive Loss | ||||||||
The components of accumulated other comprehensive loss (AOCL), net of income taxes, were as follows at the dates indicated: | ||||||||
March 31, 2014 | December 31, 2013 | |||||||
Unrealized losses on cash flow hedges | $ | 9,418 | $ | 10,026 | ||||
Other | 124 | 125 | ||||||
$ | 9,542 | $ | 10,151 | |||||
See Note 15 — Derivative Financial Instruments and Hedging Activities for the changes in the components of AOCL for the three months ended March 31, 2014 and 2013. |
Derivative_Financial_Instrumen
Derivative Financial Instruments and Hedging Activities | 3 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' | ||||||||||||||||
Derivative Financial Instruments and Hedging Activities | ' | ||||||||||||||||
Note 15 — Derivative Financial Instruments and Hedging Activities | |||||||||||||||||
Because many of our current derivative agreements are not exchange-traded, we are exposed to credit loss in the event of nonperformance by the counterparty to the agreements. We control this risk through credit monitoring procedures including financial analysis, dollar limits and other monitoring procedures. The notional amount of our contracts does not represent our exposure to credit loss. | |||||||||||||||||
The following table summarizes the changes in the notional balances of our holdings of derivatives during the three months ended March 31, 2014: | |||||||||||||||||
IRLCs | Forward MBS Trades | Interest Rate Caps | |||||||||||||||
Beginning notional balance | $ | 751,436 | $ | 950,648 | $ | 1,868,000 | |||||||||||
Additions | 1,220,165 | 749,786 | 100,000 | ||||||||||||||
Amortization | 94,571 | — | (112,000 | ) | |||||||||||||
Maturities | (1,134,684 | ) | (438,509 | ) | — | ||||||||||||
Terminations | (310,295 | ) | (333,877 | ) | — | ||||||||||||
Ending notional balance | $ | 621,193 | $ | 928,048 | $ | 1,856,000 | |||||||||||
Fair value of derivative assets (liabilities) at: | |||||||||||||||||
March 31, 2014 | $ | 9,420 | $ | 699 | $ | 324 | |||||||||||
December 31, 2013 | $ | 8,433 | $ | 6,905 | $ | 442 | |||||||||||
Maturity | April 2014 - July 2014 | April 2014 - June 2014 | Nov. 2016 | ||||||||||||||
Foreign Currency Exchange Rate Risk Management | |||||||||||||||||
We periodically enter into foreign exchange forward contracts to hedge against the effect of changes in the value of the India Rupee on amounts payable to our India subsidiaries. Our operations in Uruguay and the Philippines also expose us to foreign currency exchange rate risk, but we currently consider this risk to be insignificant. | |||||||||||||||||
Interest Rate Management | |||||||||||||||||
Match Funded Liabilities | |||||||||||||||||
As disclosed in Note 5 — Fair Value, we terminated our interest rate swaps on May 31, 2013 primarily because the custodial account float balances, which earn a variable rate of interest, are well in excess of variable rate borrowings under advance facilities. The earnings on these deposits reduce our exposure to changes in interest rates. As required by the certain of our advance financing arrangements, we have purchased interest rate caps to minimize future interest rate exposure from increases in one-month LIBOR interest rates. | |||||||||||||||||
Loans Held for Sale, at Fair Value | |||||||||||||||||
The mortgage loans held for sale which we carry at fair value are subject to interest rate and price risk from the loan funding date until the date the loan is sold into the secondary market. Generally, the fair value of a loan will decline in value when interest rates increase and will rise in value when interest rates decrease. To mitigate this risk, we enter into forward MBS trades to provide an economic hedge against those changes in fair value on mortgage loans held for sale. Forward MBS trades are primarily used to fix the forward sales price that will be realized upon the sale of mortgage loans into the secondary market. | |||||||||||||||||
Interest Rate Lock Commitments | |||||||||||||||||
Outstanding IRLCs are subject to interest rate risk and related price risk during the period from the date of the commitment through the loan funding date or expiration date. The borrower is not obligated to obtain the loan, thus we are subject to fallout risk related to IRLCs, which is realized if approved borrowers choose not to close on the loans within the terms of the IRLCs. Our interest rate exposure on these derivative loan commitments is hedged with freestanding derivatives such as forward contracts. We enter into forward contracts with respect to fixed rate loan commitments. | |||||||||||||||||
MSRs, at Fair Value | |||||||||||||||||
Effective April 1, 2013, we terminated our hedging program for fair value MSRs. Prior to their termination, we used economic hedges including interest rate swaps, U.S. Treasury futures and forward contracts to minimize the effects of loss in value of these MSRs associated with increased prepayment activity that generally results from declining interest rates. | |||||||||||||||||
The following summarizes our open derivative positions at March 31, 2014 and the gains (losses) on those and similar derivatives for the year to date then ended. None of the derivatives was designated as a hedge for accounting purposes at March 31, 2014: | |||||||||||||||||
Purpose | Expiration Date | Notional Amount | Fair Value (1) | Gains / (Losses) | Consolidated Statement of Operations Caption | ||||||||||||
Hedge the effect of changes in interest rates on interest expense on borrowings | |||||||||||||||||
Interest rate caps | |||||||||||||||||
Hedge the effect of changes in 1ML on advance funding facilities | Nov. 2016 | $ | 1,856,000 | $ | 324 | $ | (141 | ) | Other, net | ||||||||
Interest rate risk of mortgage loans held for sale and of IRLCs | |||||||||||||||||
Forward MBS trades | April 2014 - June 2014 | 928,048 | 699 | (13,610 | ) | Gain on loans held for sale, net | |||||||||||
IRLCs | April 2014 - July 2014 | 621,193 | 9,420 | 986 | Gain on loans held for sale, net | ||||||||||||
Total derivatives | $ | 10,443 | $ | (12,765 | ) | ||||||||||||
-1 | Derivatives are reported at fair value in Receivables, Other assets and Other liabilities on our unaudited Consolidated Balance Sheet. | ||||||||||||||||
Included in AOCL at March 31, 2014 and March 31, 2013, respectively, were $10.0 million and $16.1 million of deferred unrealized losses, before taxes of $0.6 million and $6.1 million, respectively, on the interest rate swaps that we designated as cash flow hedges. Changes in AOCL during three months ended March 31 were as follows: | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Beginning balance | $ | 10,151 | $ | 6,441 | |||||||||||||
Additional net losses on cash flow hedges | — | 6,924 | |||||||||||||||
Ineffectiveness of cash flow hedges reclassified to earnings | — | (657 | ) | ||||||||||||||
Losses on terminated hedging relationships amortized to earnings | (779 | ) | — | ||||||||||||||
Net increase (decrease) in accumulated losses on cash flow hedges | (779 | ) | 6,267 | ||||||||||||||
(Increase) decrease in deferred taxes on accumulated losses on cash flow hedges | 171 | (2,548 | ) | ||||||||||||||
Increase (decrease) in accumulated losses on cash flow hedges, net of taxes | (608 | ) | 3,719 | ||||||||||||||
Other, net of income taxes | (1 | ) | (40 | ) | |||||||||||||
Ending balance | $ | 9,542 | $ | 10,120 | |||||||||||||
Other income (expense), net, includes the following related to derivative financial instruments for three months ended March 31: | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Losses on economic hedges | $ | (141 | ) | $ | (5,079 | ) | |||||||||||
Ineffectiveness of cash flow hedges | — | (657 | ) | ||||||||||||||
Write-off of losses in AOCL for a discontinued hedge relationship | (779 | ) | — | ||||||||||||||
$ | (920 | ) | $ | (5,736 | ) | ||||||||||||
Interest_Expense
Interest Expense | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Other Income and Expenses [Abstract] | ' | |||||||
Interest Expense | ' | |||||||
Note 16 — Interest Expense | ||||||||
The following table presents the components of interest expense for the three months ended March 31: | ||||||||
2014 | 2013 | |||||||
Match funded liabilities | $ | 16,318 | $ | 30,351 | ||||
Financing liabilities (1) (2) | 100,230 | 40,612 | ||||||
Other secured borrowings | 21,284 | 15,954 | ||||||
Other | 2,041 | 2,542 | ||||||
$ | 139,873 | $ | 89,459 | |||||
-1 | Includes interest expense of $99.0 million and $40.6 million during the three months ended March 31, 2014 and 2013, respectively, related to financing liabilities recorded in connection with the HLSS Transactions as indicated in the table below. As discussed in Note 1A — Restatement of Previously Issued Consolidated Financial Statements , we are restating our previously issued unaudited Consolidated Financial Statements as of March 31, 2014 and for the reported periods to correct an error in applying the interest method to financing liabilities in connection with Rights to MSRs sold to HLSS. Interest expense on the HLSS Transaction financing liabilities for the three months ended March 31, 2014 and 2013 has been restated. | |||||||
2014 | 2013 | |||||||
Servicing fees collected on behalf of HLSS | $ | 189,157 | $ | 102,258 | ||||
Less: Subservicing fee retained by Ocwen | 90,161 | 47,082 | ||||||
Net servicing fees remitted to HLSS | 98,996 | 55,176 | ||||||
Less: Reduction in financing liability | — | 14,593 | ||||||
Interest expense on HLSS financing liability | $ | 98,996 | $ | 40,583 | ||||
-2 | Interest expense that we expect to be paid on the HMBS-related borrowings is included with net fair value gains in Other revenues. See Note 2 — Securitizations and Variable Interest Entities for additional information. |
Basic_and_Diluted_Earnings_per
Basic and Diluted Earnings per Share | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Earnings Per Share [Abstract] | ' | |||||||
Basic and Diluted Earnings per Share | ' | |||||||
Note 17 — Basic and Diluted Earnings per Share | ||||||||
Basic EPS excludes common stock equivalents and is calculated by dividing net income attributable to Ocwen common stockholders by the weighted average number of common shares outstanding during the year. We calculate diluted EPS by dividing net income attributable to Ocwen, as adjusted to add back preferred stock dividends, by the weighted average number of common shares outstanding including the potential dilutive common shares related to outstanding stock options, restricted stock awards and the Preferred Shares. | ||||||||
The following is a reconciliation of the calculation of basic EPS to diluted EPS for the three months ended March 31: | ||||||||
2014 | 2013 | |||||||
(As Restated) | (As Restated) | |||||||
Basic EPS: | ||||||||
Net income attributable to Ocwen common stockholders | $ | 59,504 | $ | 46,338 | ||||
Weighted average shares of common stock | 135,227,067 | 135,638,567 | ||||||
Basic EPS | $ | 0.44 | $ | 0.34 | ||||
Diluted EPS: | ||||||||
Net income attributable to Ocwen common stockholders | $ | 59,504 | $ | 46,338 | ||||
Preferred stock dividends (1) | 997 | — | ||||||
Adjusted net income attributable to Ocwen | $ | 60,501 | $ | 46,338 | ||||
Weighted average shares of common stock | 135,227,067 | 135,638,567 | ||||||
Effect of dilutive elements: | ||||||||
Preferred Shares (1) | 1,950,298 | — | ||||||
Stock options | 3,908,333 | 3,902,390 | ||||||
Common stock awards | 3,757 | 18,200 | ||||||
Dilutive weighted average shares of common stock | 141,089,455 | 139,559,157 | ||||||
Diluted EPS | $ | 0.43 | $ | 0.33 | ||||
Stock options excluded from the computation of diluted EPS: | ||||||||
Market-based (2) | 547,500 | 1,535,000 | ||||||
-1 | The effect of our Preferred Shares on diluted EPS is computed using the if-converted method. For purposes of computing diluted EPS, we assume the conversion of the Preferred Shares into shares of common stock unless the effect is anti-dilutive. Conversion of the Preferred Shares has not been assumed for the three months ended March 31, 2013 because the effect would have been antidilutive. | |||||||
-2 | Shares that are issuable upon the achievement of certain performance criteria related to Ocwen’s stock price and an annualized rate of return to investors. |
Business_Segment_Reporting
Business Segment Reporting | 3 Months Ended | |||||||||||||||||||
Mar. 31, 2014 | ||||||||||||||||||||
Segment Reporting [Abstract] | ' | |||||||||||||||||||
Business Segment Reporting | ' | |||||||||||||||||||
Note 18 — Business Segment Reporting | ||||||||||||||||||||
Our business segments reflect the internal reporting that we use to evaluate operating performance of services and to assess the allocation of our resources. A brief description of our current business segments is as follows: | ||||||||||||||||||||
Servicing. This segment is primarily comprised of our core residential servicing business. We provide residential and commercial mortgage loan servicing, special servicing and asset management services. We earn fees for providing these services to owners of the mortgage loans and foreclosed real estate. In most cases, we provide these services either because we purchased the MSRs from the owner of the mortgage, retained the MSRs on the sale of residential mortgage loans or because we entered into a subservicing or special servicing agreement with the entity that owns the MSR. Our residential servicing portfolio includes conventional, government insured and non-Agency loans. Non-Agency loans include subprime loans which represent residential loans that generally did not qualify under GSE guidelines or have subsequently become delinquent. | ||||||||||||||||||||
Lending. The Lending segment is focused on originating and purchasing conventional and government insured residential forward and reverse mortgage loans mainly through our correspondent lending arrangements. We also commenced a direct lending business to pursue refinancing opportunities from our existing portfolio, where permitted. The loans are typically sold shortly after origination into a liquid market on a servicing retained basis. | ||||||||||||||||||||
Corporate Items and Other. Corporate Items and Other includes items of revenue and expense that are not directly related to a business, business activities that are individually insignificant, interest income on short-term investments of cash, corporate debt and certain corporate expenses. Business activities that are not considered to be of continuing significance include subprime loans held for sale (at lower of cost or fair value), investments in unconsolidated entities and affordable housing investment activities. Corporate Items and Other also included the diversified fee-based businesses that we acquired as part of the Homeward and ResCap Acquisitions and subsequently sold to Altisource on March 29, 2013 and April 12, 2013, respectively. | ||||||||||||||||||||
We allocate interest income and expense to each business segment for funds raised or for funding of investments made, including interest earned on cash balances and short-term investments and interest incurred on corporate debt. We also allocate expenses generated by corporate support services to each business segment. | ||||||||||||||||||||
Financial information for our segments is as follows: | ||||||||||||||||||||
Servicing | Lending | Corporate Items and Other | Corporate Eliminations | Business Segments Consolidated | ||||||||||||||||
(As Restated) | (As Restated) | |||||||||||||||||||
Results of Operations | ||||||||||||||||||||
For the three months ended March 31, 2014 | ||||||||||||||||||||
Revenue | $ | 520,823 | $ | 28,767 | $ | 1,711 | $ | (40 | ) | $ | 551,261 | |||||||||
Operating expenses (1) | 307,933 | 31,464 | 9,837 | (40 | ) | 349,194 | ||||||||||||||
Income (loss) from operations | 212,890 | (2,697 | ) | (8,126 | ) | — | 202,067 | |||||||||||||
Other income (expense): | ||||||||||||||||||||
Interest income | 439 | 4,009 | 879 | — | 5,327 | |||||||||||||||
Interest expense | (136,386 | ) | (3,451 | ) | (36 | ) | — | (139,873 | ) | |||||||||||
Other | (320 | ) | 2,718 | 1,784 | — | 4,182 | ||||||||||||||
Other income (expense), net | (136,267 | ) | 3,276 | 2,627 | — | (130,364 | ) | |||||||||||||
Income (loss) before income taxes | $ | 76,623 | $ | 579 | $ | (5,499 | ) | $ | — | $ | 71,703 | |||||||||
For the three months ended March 31, 2013 | ||||||||||||||||||||
Revenue | $ | 376,083 | $ | 13,908 | $ | 16,713 | $ | (45 | ) | $ | 406,659 | |||||||||
Operating expenses (1) | 211,504 | 11,098 | 20,969 | (45 | ) | 243,526 | ||||||||||||||
Income (loss) from operations | 164,579 | 2,810 | (4,256 | ) | — | 163,133 | ||||||||||||||
Other income (expense): | ||||||||||||||||||||
Interest income | (614 | ) | 4,780 | 1,020 | — | 5,186 | ||||||||||||||
Interest expense | (86,503 | ) | (2,829 | ) | (127 | ) | — | (89,459 | ) | |||||||||||
Other | (25,988 | ) | 267 | 2,153 | — | (23,568 | ) | |||||||||||||
Other income (expense), net | (113,105 | ) | 2,218 | 3,046 | — | (107,841 | ) | |||||||||||||
Income (loss) before income taxes | $ | 51,474 | $ | 5,028 | $ | (1,210 | ) | $ | — | $ | 55,292 | |||||||||
Servicing | Lending | Corporate Items and Other | Corporate Eliminations | Business Segments Consolidated | ||||||||||||||||
Total Assets | ||||||||||||||||||||
March 31, 2014 | $ | 6,333,097 | $ | 1,326,114 | $ | 527,140 | $ | — | $ | 8,186,351 | ||||||||||
December 31, 2013 | $ | 6,295,976 | $ | 1,195,812 | $ | 435,215 | $ | — | $ | 7,927,003 | ||||||||||
March 31, 2013 | $ | 5,997,149 | $ | 356,668 | $ | 1,083,737 | $ | — | $ | 7,437,554 | ||||||||||
-1 | Depreciation and amortization expense are as follows: | |||||||||||||||||||
Servicing | Lending | Corporate Items and Other | Business Segments Consolidated | |||||||||||||||||
For the three months ended March 31, 2014: | ||||||||||||||||||||
Depreciation expense | $ | 2,820 | $ | 105 | $ | 2,615 | $ | 5,540 | ||||||||||||
Amortization of mortgage servicing rights | 61,779 | 115 | 200 | 62,094 | ||||||||||||||||
Amortization of debt discount | 330 | — | — | 330 | ||||||||||||||||
Amortization of debt issuance costs – SSTL | 1,087 | — | — | 1,087 | ||||||||||||||||
For the three months ended March 31, 2013: | ||||||||||||||||||||
Depreciation expense | $ | 2,699 | $ | 234 | $ | 1,580 | $ | 4,513 | ||||||||||||
Amortization of mortgage servicing rights | 47,883 | — | — | 47,883 | ||||||||||||||||
Amortization of debt discount | 424 | — | — | 424 | ||||||||||||||||
Amortization of debt issuance costs – SSTL | 894 | — | — | 894 | ||||||||||||||||
Related_Party_Transactions
Related Party Transactions | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Related Party Transactions [Abstract] | ' | |||||||
Related Party Transactions | ' | |||||||
Note 19 — Related Party Transactions | ||||||||
Ocwen’s Executive Chairman of the Board of Directors, William C. Erbey, also serves as Chairman of the Board of Altisource, HLSS, Altisource Residential Corporation (Residential) and Altisource Asset Management Corporation (AAMC). As a result, he has obligations to Ocwen as well as to Altisource, HLSS, Residential and AAMC. As of March 31, 2014, Mr. Erbey owned or controlled approximately 13% of the common stock of Ocwen, approximately 27% of the common stock of Altisource, approximately 1% of the common stock of HLSS, approximately 25% of the common stock of AAMC and approximately 4% of the common stock of Residential. At March 31, 2014, Mr. Erbey also held 4,620,498 options to purchase Ocwen common stock, of which 2,845,498 were exercisable. On April 22, 2014, Mr. Erbey surrendered 1,000,000 of his options to purchase Ocwen common stock. At March 31, 2014, Mr. Erbey held 873,501 options to purchase Altisource common stock and 87,350 options to purchase AAMC common stock, all of which were exercisable. | ||||||||
Our business is currently dependent on services and products provided by Altisource under various long-term contracts, including the Support Services, Services, Technology Products Services, Intellectual Property, Data Center and Disaster Recovery Services and Data Access and Services agreements, each of which include renewal provisions. We believe the rates charged under these agreements are market rates as they are materially consistent with one or more of the following: the fees charged by Altisource to other customers for comparable services and the rates Ocwen pays to or observes from other service providers. | ||||||||
Ocwen and HLSS provide each other certain professional services including valuation analysis of potential MSR acquisitions, treasury management services and other similar services, legal, licensing and regulatory compliance support services, risk management services and other similar services under a Professional Services Agreement. | ||||||||
As disclosed in Note 4 — Sales of Advances and MSRs, Ocwen has sold to HLSS certain Rights to MSRs and related servicing advances. We also entered into a subservicing agreement with HLSS on February 10, 2012, which was amended on October 1, 2012, under which OLS will subservice the MSRs after legal ownership of the MSRs has been transferred to HLSS. On February 4, 2014, we amended various sale supplements and servicing supplements entered into in connection with a Master Servicing Rights Purchase Agreement (MSRPA) dated as of October 1, 2012, and Master Subservicing Agreement dated as of October 1, 2012, with HLSS. Each of these amendments is effective as of October 1, 2013. In connection with the amendments to the supplements, if a mortgage loan included in a sale of Rights to MSRs is refinanced by us, the excess servicing fees and rights to MSRs related to the new mortgage loan are transferred to HLSS effective with the prepayment of the refinanced mortgage loan, subject to certain thresholds. The preceding applies only after the aggregate UPB of refinanced mortgage loans refinanced by us exceeds 0.5% of the aggregate UPB of all rights to MSRs sold to HLSS under the sale supplements measured as the current UPB of rights to MSRs as of the beginning of each calendar year plus the weighted average UPB of rights to MSRs sold during the year. In addition, the interest rate applied to Excess Servicing Advances, as defined in the MSRPA, was changed to one-month LIBOR plus 275 basis points. | ||||||||
On March 3, 2014, in the Ginnie Mae EBO Transaction, Ocwen sold Ginnie Mae EBO Loans and related servicing advances to HLSS Mortgage for $612.3 million. See Note 6 — Loans Held for Sale for additional information. | ||||||||
We have also entered into a long-term servicing and a support services agreement with Residential and AAMC, respectively. | ||||||||
The following table summarizes revenues and expenses related to our agreements with Altisource, HLSS, AAMC and Residential (and, as applicable, their subsidiaries) for the three months ended March 31 and net amounts receivable or payable at the dates indicated: | ||||||||
2014 | 2013 | |||||||
Revenues and Expenses: | ||||||||
Altisource: | ||||||||
Revenues | $ | 8,499 | $ | 4,233 | ||||
Expenses | 17,364 | 11,692 | ||||||
HLSS: | ||||||||
Revenues | $ | 165 | $ | 112 | ||||
Expenses | 462 | 491 | ||||||
AAMC | ||||||||
Revenues | $ | 384 | $ | — | ||||
Residential | ||||||||
Revenues | $ | 2,148 | $ | 41 | ||||
March 31, 2014 | December 31, 2013 | |||||||
Net Receivable (Payable) | ||||||||
Altisource | $ | (3,074 | ) | $ | (3,843 | ) | ||
HLSS | (59,832 | ) | (59,505 | ) | ||||
AAMC | 304 | 943 | ||||||
Residential | — | 50 | ||||||
$ | (62,602 | ) | $ | (62,355 | ) |
Regulatory_Requirements
Regulatory Requirements | 3 Months Ended |
Mar. 31, 2014 | |
Brokers and Dealers [Abstract] | ' |
Regulatory Requirements | ' |
Note 20 — Regulatory Requirements | |
Regulation | |
Our business is subject to extensive regulation by federal, state and local governmental authorities, including the Consumer Financial Protection Bureau (CFPB), the Federal Trade Commission (FTC), the Securities and Exchange Commission (SEC) and various state agencies that license, audit and conduct examinations of our mortgage servicing, origination and collection activities. From time to time, we also receive requests from federal, state and local agencies for records, documents and information relating to our policies, procedures and practices regarding our mortgage servicing, origination and collection activities. In addition, the GSEs and their conservator, the Federal Housing Finance Authority (FHFA), Ginnie Mae, various investors, non-Agency securitization trustees and others also subject us to periodic reviews and audits. | |
As a result of the current regulatory environment, we have faced and expect to continue to face increased regulatory and public scrutiny as well as stricter and more comprehensive regulation of our business. We continue to work diligently to assess and understand the implications of the regulatory environment in which we operate and the regulatory changes that we are facing. We devote substantial resources to regulatory compliance, while, at the same time, striving to meet the needs and expectations of our customers and clients. | |
We must comply with a number of federal, state and local consumer protection laws including, among others, the Gramm-Leach-Bliley Act, the Fair Debt Collection Practices Act, the Real Estate Settlement Procedures Act (RESPA), the Truth in Lending Act (TILA), the Fair Credit Reporting Act, the Servicemembers Civil Relief Act, the Homeowners Protection Act, the Federal Trade Commission Act and, more recently, the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) and state foreclosure laws. These statutes apply to loan origination, debt collection, use of credit reports, safeguarding of non-public personally identifiable information about our customers, foreclosure and claims handling, investment of and interest payments on escrow balances and escrow payment features, and mandate certain disclosures and notices to borrowers. These requirements can and do change as statutes and regulations are enacted, promulgated or amended. The recent trend among federal, state and local lawmakers and regulators has been toward increasing laws, regulations and investigative proceedings with regard to residential real estate lenders and servicers. | |
We expect to continue to incur substantial ongoing operational and system costs in order to comply with these laws and regulations. Furthermore, there may be additional federal or state laws enacted that place additional obligations on servicers and originators of residential mortgage loans. | |
There are a number of foreign laws and regulations that are applicable to our operations in India, Uruguay and the Philippines, including acts that govern licensing, employment, safety, taxes, insurance and the laws and regulations that govern the creation, continuation and the winding up of companies as well as the relationships between shareholders, our corporate entities, the public and the government in these countries. Non-compliance with the laws and regulations of India, Uruguay or the Philippines could result in (i) restrictions on our operations in these counties, (ii) fines, penalties or sanctions or (iii) reputational damage. | |
Capital Requirements | |
Our Homeward, OLS and Liberty subsidiaries are licensed to originate and/or service forward and reverse mortgage loans in the jurisdictions in which they operate. The licensed entities are subject to minimum net worth requirements in connection with these licenses. These minimum net worth requirements are unique to each state and type of license. Failure to meet these minimum capital requirements can result in the initiation of certain mandatory actions by federal, state, and foreign agencies that could have a material effect on our results of operations and financial condition. The most restrictive of these requirements is based on the outstanding UPB of our owned and subserviced portfolio and was $820.4 million at March 31, 2014. Our licensed subsidiaries were in compliance with all of their capital requirements at March 31, 2014. | |
Homeward, OLS and Liberty are also parties to seller/servicer agreements with one or more of the GSEs, FHA, VA and Ginnie Mae. These seller/servicer agreements contain financial covenants that include capital requirements related to tangible net worth, as defined in each agreement, as well as extensive requirements regarding servicing, selling and other matters. To the extent that these requirements are not met, the counterparty may, at its option, utilize a variety of remedies ranging from sanctions or suspension to termination of the seller/servicer agreements, which would prohibit future originations or securitizations of forward or reverse mortgage loans or being an approved seller/servicer. We were in compliance with these net worth requirements at March 31, 2014, |
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended | |||
Mar. 31, 2014 | ||||
Commitments and Contingencies Disclosure [Abstract] | ' | |||
Commitments and Contingencies | ' | |||
Note 21 — Commitments and Contingencies | ||||
Litigation Contingencies | ||||
We are subject to various pending legal proceedings, including those subject to loss sharing and indemnification provisions of our various acquisitions. In our opinion, the resolution of those proceedings will not have a material effect on our financial condition, results of operations or cash flows. | ||||
Regulatory Contingencies | ||||
We are subject to a number of pending federal and state regulatory investigations, examinations, inquiries, requests for information and/or other actions. | ||||
On December 5, 2012, we entered into a Consent Order with the NY DFS in which we agreed to the appointment of a Monitor to oversee our compliance with an Agreement on Servicing Practices. The Monitor began its work in 2013, and we continue to cooperate with the Monitor. We devote substantial resources to regulatory compliance, and we incur, and expect to continue to incur, significant ongoing costs with respect to compliance in connection with the Agreement on Servicing Practices and the work of the Monitor. In early February 2014, the NY DFS requested that Ocwen put an indefinite hold on an acquisition from Wells Fargo Bank, N.A. (Wells Fargo) of MSRs and related servicing advances relating to a portfolio of approximately 184,000 loans with a UPB of approximately $39.0 billion. The NY DFS expressed an interest in evaluating further our ability to handle more servicing. We have agreed to place the transaction on indefinite hold. We are cooperating with the NY DFS on this matter. We cannot currently estimate the outcome of the NY DFS evaluation. Actions by the NY DFS, if any, could have a material impact on Ocwen’s ongoing business and financial condition. | ||||
On December 19, 2013, we reached an agreement, which was subject to court approval, involving the CFPB and various state attorneys general and other state agencies that regulate the mortgage servicing industry (Regulators). On February 26, 2014, the United States District Court for the District of Columbia entered a Consent Order memorializing the settlement. The settlement has four key elements: | ||||
• | A commitment by Ocwen to service loans in accordance with specified servicing guidelines and to be subject to oversight by an independent national monitor for three years. Ocwen is presently subject to substantially the same guidelines and oversight with respect to the portion of its servicing portfolio acquired from ResCap in early 2013. | |||
• | A payment of $127.3 million, which includes a fixed amount for administrative expenses, to a consumer relief fund to be disbursed by an independent administrator to eligible borrowers. Pursuant to indemnification and loss sharing provisions of applicable acquisition documents, approximately half of this consumer relief fund payment is to be funded by the former owners of certain servicing portfolios previously acquired by Ocwen and integrated into Ocwen’s servicing platform. Ocwen established a reserve of $66.9 million with respect to its portion of the payment into the consumer relief fund. This reserve is expected to cover all of Ocwen’s portion of the consumer relief fund payment. | |||
• | A commitment by Ocwen to continue its principal forgiveness modification programs to delinquent and underwater borrowers, including underwater borrowers at imminent risk of default, in an aggregate amount of at least $2 billion over three years. These and all of Ocwen’s other loan modifications are designed to be sustainable for homeowners while providing a net present value for loan investors that is superior to that of foreclosure. Principal forgiveness as part of a loan modification is determined on a case-by-case basis in accordance with the applicable servicing agreement. Principal forgiveness does not involve an expense to Ocwen other than the operating expense incurred in arranging the modification, which is part of Ocwen’s role as loan servicer. | |||
• | Ocwen and the former owners of certain of the acquired servicing portfolios will receive from the Regulators comprehensive releases, subject to certain exceptions, from liability with respect to residential mortgage servicing, modification and foreclosure practices. | |||
On April 28, 2014, we received a letter from the staff of the New York Regional Office of the SEC (the “Staff”) informing us that it was conducting an investigation relating to Ocwen and making a request for voluntary production of documents and information relating to the April 22, 2014 surrender of certain options to purchase our common stock by Mr. Erbey, our Executive Chairman, including the 2007 Equity Incentive Plan and the related option grant and surrender documents. We intend to cooperate with the Staff in this matter. | ||||
One or more of the foregoing regulatory actions or our failure to comply with the commitments we have made with respect to such regulatory actions or other regulatory actions in the future against us of a similar or different nature could cause us to incur fines, penalties, settlement costs, damages, legal fees or other charges in material amounts or could impose additional requirements or restrictions on our activities. Any of these occurrences could increase our operating expenses and reduce our revenues, hamper our ability to grow or otherwise materially and adversely affect our business, reputation, financial condition and results of operations. | ||||
In addition to these matters, Ocwen receives periodic inquires, both formal and informal in nature, from various federal and state agencies, including those made as part of regulatory oversight of our mortgage servicing, origination and collection activities. Such ongoing inquiries, including those into servicer foreclosure processes, could result in additional actions by state or federal governmental bodies, regulators or the courts with respect to our mortgage servicing, origination and collection activities and could result in an extension of foreclosure timelines, which may be applicable generally to the servicing industry or to us in particular. In addition, a number of our match funded advance facilities contain provisions that limit the eligibility of advances to be financed based on the length of time that advances are outstanding, and two of our match funded advance facilities have provisions that limit new borrowings if average foreclosure timelines extend beyond a certain time period, either of which, if such provisions applied, could adversely affect liquidity by reducing our average effective advance rate. Increases in the amount of advances and the length of time to recover advances, fines or increases in operating expenses, and decreases in the advance rate and availability of financing for advances could result in increased borrowings, reduced cash and higher interest expense which could negatively impact our liquidity and profitability. | ||||
Loan Repurchase Obligations and Related Contingencies | ||||
We have exposure to representation, warranty and indemnification obligations because of our lending, sales and securitization activities and our acquisitions to the extent we assume one or more of these obligations and in connection with our servicing practices. At March 31, 2014, we had provided or assumed representation and warranty obligations in connection with $87.9 billion of UPB, covering both forward and reverse mortgage loans. At March 31, 2014, we had outstanding representation and warranty repurchase demands of $138.7 million UPB (701 loans). We review each demand and monitor through resolution, primarily through rescission, loan repurchase or make-whole payment. | ||||
The following table presents the changes in our liability for indemnification obligations for the three months ended March 31, 2014, including representation and warranty obligations and compensatory fees for foreclosures that may ultimately exceed investor timelines: | ||||
Balance at December 31, 2013 | $ | 192,716 | ||
Provision for representation and warranty obligations | 7,266 | |||
New production reserves | 182 | |||
Obligations assumed in connection with MSR and servicing business acquisitions | — | |||
Charge-offs and other (1) | (30,929 | ) | ||
Balance at March 31, 2014 | $ | 169,235 | ||
-1 | Includes principal and interest losses realized in connection with repurchased loans, make-whole, indemnification and fee payments and settlements net of recoveries, if any. | |||
We believe that it is reasonably possible that losses beyond amounts currently recorded for potential representation and warranty obligations and related claims described above could occur, and such losses could have an adverse impact on our results of operations, financial condition or cash flows. However, based on currently available information, we are unable to estimate a range of reasonably possible losses above amounts that have been recorded at March 31, 2014. | ||||
In several recent court actions, mortgage loan sellers against whom repurchase claims have been asserted based on alleged breaches of representations and warranties are defending on various grounds including the expiration of statutes of limitation, lack of notice and opportunity to cure and vitiation of the obligation to repurchase as a result of foreclosure or charge off of the loan. Ocwen is not a party to any of the actions, but we are the servicer for certain securitizations involved in such actions. Ocwen has entered into tolling agreements with respect to its role as servicer for a very small number of securitizations and may enter into additional tolling agreements in the future. Should Ocwen be made a party to these or similar actions, we may need to defend allegations that we failed to service loans in accordance with applicable agreements and that such failures prejudiced the rights of repurchase claimants against loan sellers. We believe that any such allegations would be without merit and, if necessary, would vigorously defend against them. If, however, we were required to compensate claimants for losses related to seller breaches of representations and warranties in respect of loans we service, then our business, financial condition and results of operations could be adversely affected. |
Subsequent_Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2014 | |
Subsequent Events [Abstract] | ' |
Subsequent Events | ' |
Note 22 — Subsequent Events | |
During April 2014, we completed the repurchase of 485,176 shares of Ocwen common stock in the open market for a total purchase price of $18.8 million. |
Description_of_Business_Basis_1
Description of Business, Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Organization | ' |
Organization | |
Ocwen Financial Corporation (NYSE: OCN) (Ocwen, we, us and our) is a financial services holding company which, through its subsidiaries, is engaged in the servicing and origination of forward and reverse mortgage loans. Ocwen is headquartered in Atlanta, Georgia with offices throughout the United States (U.S.) and in the United States Virgin Islands (USVI) with support operations in India, the Philippines and Uruguay. Ocwen is a Florida corporation organized in February 1988. | |
Ocwen owns all of the common stock of its primary operating subsidiary, Ocwen Mortgage Servicing, Inc. (OMS), and directly or indirectly owns all of the outstanding stock of its other primary operating subsidiaries: Ocwen Loan Servicing, LLC (OLS), Ocwen Financial Solutions Private Limited, Homeward Residential, Inc. (Homeward), and Liberty Home Equity Solutions, Inc. (Liberty). | |
In 2013, we completed acquisitions of mortgage servicing rights (MSRs) and servicing advances from, among others, OneWest Bank, FSB (OneWest MSR Transaction) and Ally Bank, a wholly-owned subsidiary of Ally Financial Inc. (Ally), the indirect parent of Residential Capital, LLC (ResCap) (Ally MSR Transaction), and acquisitions of servicing and origination platforms, including Liberty Home Equity Solutions, Inc. (Liberty) through a stock purchase agreement (Liberty Acquisition) and certain assets and operations of ResCap pursuant to a plan under Chapter 11 of the Bankruptcy Code (ResCap Acquisition). See Note 3 — Business Acquisitions and Note 9 — Mortgage Servicing for additional information. | |
Basis of Presentation | ' |
Basis of Presentation | |
The accompanying unaudited consolidated financial statements have been prepared in conformity with the instructions of the Securities and Exchange Commission (SEC) to Form 10-Q and SEC Regulation S-X, Article 10, Rule 10-01 for interim financial statements. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (GAAP) for complete financial statements. In our opinion, the accompanying unaudited consolidated financial statements contain all adjustments, consisting only of normal recurring accruals, necessary for a fair presentation. The results of operations and other data for the three months ended March 31, 2014 are not necessarily indicative of the results that may be expected for any other interim period or for the year ending December 31, 2014. The unaudited consolidated financial statements presented herein should be read in conjunction with the audited consolidated financial statements and related notes thereto included in Amendment No. 1 to our Annual Report on Form 10-K for the year ended December 31, 2013. | |
Reclassifications | ' |
Reclassifications | |
Within the Total assets section of the unaudited Consolidated Balance sheet at December 31, 2013, we reclassified Debt service accounts of $129.9 million to Other assets to conform to the current year presentation. | |
Certain insignificant amounts in the unaudited Consolidated Statement of Cash Flows for the three months ended March 31, 2013 have been reclassified to conform to the current year presentation. These reclassifications had no impact on our consolidated cash flows. | |
Use of Estimates and Assumptions | ' |
Use of Estimates and Assumptions | |
The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, the reported amounts of revenues and expenses during the reporting period and the related disclosures in the accompanying notes. Such estimates and assumptions include, but are not limited to, those that relate to fair value measurements, the provision for potential losses that may arise from litigation proceedings, representation and warranty and other indemnification obligations and the valuation of goodwill. In developing estimates and assumptions, management uses all available information; however, actual results could materially differ because of uncertainties associated with estimating the amounts, timing and likelihood of possible outcomes. | |
Recent Accounting Pronouncements | 'Recently Issued Accounting Standards Investments—Equity Method and Joint Ventures: Accounting for Investments in Qualified Affordable Housing Projects (a consensus of the FASB Emerging Issues Task Force) (ASU 2014-01)In January 2014, the FASB issued ASU 2014-01. This ASU permit entities to make an accounting policy election to account for their investments in qualified affordable housing projects using the proportional amortization method if certain conditions are met. Under the proportional amortization method, an entity amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received and recognizes the net investment performance in the statement of operations as a component of income tax expense (benefit). The new standard is expected to enable more entities to qualify for the proportional amortization method than the number of entities that currently qualify for the effective yield method. ASU 2014-01 will be effective for us on January 1, 2015 with early adoption permitted. We are currently evaluating the effect of adopting this standard effective January 1, 2015, but we do not anticipate that our adoption will have a material impact on our consolidated financial condition or results of operations.Receivables—Troubled Debt Restructurings by Creditors: Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure (a consensus of the FASB Emerging Issues Task Force) (ASU 2014-04)In January 2014, the FASB also issued ASU 2014-04. This ASU clarifies when an in substance repossession or foreclosure occurs such that the loan receivable should be derecognized and the real estate property recognized. An in substance repossession or foreclosure occurs upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. ASU 2014-04 requires interim and annual disclosure of both (1) the amount of foreclosed residential real estate property held by the creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction.ASU 2014-04 will be effective for us on January 1, 2015 with early adoption permitted. An entity can elect to adopt the amendments using either a modified retrospective transition method or a prospective transition method. We are currently evaluating the effect of adopting this standard effective January 1, 2015, but we do not anticipate that our adoption will have a material impact on our consolidated financial condition or results of operations.Presentation of Financial Statements and Property, Plant, and Equipment: Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity (ASU 2014-08)In April 2014, the FASB issued ASU 2014-08. ASU 2014-08 changes the criteria for reporting discontinued operations. Under this ASU, a discontinued operation is defined as a disposal of a component or group of components that is disposed of or is classified as held for sale and represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. A strategic shift could include a disposal of (i) a major geographical area of operations, (ii) a major line of business, (iii) a major equity method investment, or (iv) other major parts of an entity. A business activity that upon acquisition qualifies as held for sale will also be a discontinued operation. The new standard no longer precludes presentation as a discontinued operation if (i) there are operations and cash flows of the component that have not been eliminated from the reporting entity’s ongoing operations, or (ii) there is significant continuing involvement with a component after its disposal.New disclosures under this ASU include the requirement to present in the statement of cash flows or disclose in a note either (i) total operating and investing cash flows for discontinued operations, or (ii) depreciation, amortization, capital expenditures, and significant operating and investing noncash items related to discontinued operations. Assets and liabilities of a discontinued operation that are classified as held for sale or disposed of in the current period must be reclassified for the comparative periods presented in the balance sheet.ASU 2014-08 will be effective for us on January 1, 2015. The guidance applies prospectively to new disposals and new classifications of disposal groups as held for sale after the effective date. We are currently evaluating the effect of adopting this standard effective January 1, 2015, but we do not anticipate that our adoption will have a material impact on our consolidated financial condition or results of operations. |
Description_of_Business_Basis_2
Description of Business, Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 3 Months Ended | ||||
Mar. 31, 2014 | |||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | ||||
Schedule of Change in Accounting Estimate | ' | ||||
This change had the effect of reducing amortization expense and increasing both net income and earnings per share in our unaudited Consolidated Statement of Operations for the three months ended March 31, 2014 as follows: | |||||
Reduction in Amortization of mortgage servicing rights | $ | (25,998 | ) | ||
Increase in Net income attributable to Ocwen common stockholders | $ | 22,755 | |||
Increase in Earnings per share attributable to Ocwen common stockholders: | |||||
Basic | $ | 0.17 | |||
Diluted | $ | 0.16 | |||
Restatement_of_Previously_Issu1
Restatement of Previously Issued Consolidated Financial Statements (Tables) | 3 Months Ended | |||||||||||
Mar. 31, 2014 | ||||||||||||
Accounting Changes and Error Corrections [Abstract] | ' | |||||||||||
Schedule of Effects of Restatement | ' | |||||||||||
The following tables summarize the effect of these restatements at and for the periods indicated: | ||||||||||||
Consolidated Balance Sheet as of March 30, 2014 | ||||||||||||
As Reported | Restatement | As Restated | ||||||||||
Deferred tax assets, net | $ | 118,156 | $ | 924 | $ | 119,080 | ||||||
Total assets | 8,185,427 | 924 | 8,186,351 | |||||||||
Financing liabilities | 1,693,147 | — | 1,693,147 | |||||||||
Total liabilities | 6,249,423 | — | 6,249,423 | |||||||||
Retained earnings | 1,061,543 | 924 | 1,062,467 | |||||||||
Total stockholders’ equity | 1,872,717 | 924 | 1,873,641 | |||||||||
Consolidated Balance Sheet as of December 31, 2013 | ||||||||||||
As Reported | Restatement | As Restated | ||||||||||
Deferred tax assets, net | $ | 116,558 | $ | (987 | ) | $ | 115,571 | |||||
Financing liabilities | 1,284,229 | (17,256 | ) | 1,266,973 | ||||||||
Total liabilities | 6,071,307 | (17,256 | ) | 6,054,051 | ||||||||
Retained earnings | 986,694 | 16,269 | 1,002,963 | |||||||||
Total stockholders’ equity | 1,796,322 | 16,269 | 1,812,591 | |||||||||
Consolidated Statement of Operations for the Three Months Ended March 31, 2014 | ||||||||||||
As Reported | Restatement | As Restated | ||||||||||
Interest expense | $ | (122,616 | ) | $ | (17,257 | ) | $ | (139,873 | ) | |||
Total other expense, net | (113,107 | ) | (17,257 | ) | (130,364 | ) | ||||||
Income before income taxes | 88,960 | (17,257 | ) | 71,703 | ||||||||
Income tax expense | 13,129 | (1,912 | ) | 11,217 | ||||||||
Net income | 75,831 | (15,345 | ) | 60,486 | ||||||||
Net income attributable to Ocwen stockholders | 75,846 | (15,345 | ) | 60,501 | ||||||||
Net income attributable to Ocwen common stockholders | 74,849 | (15,345 | ) | 59,504 | ||||||||
Earnings per share attributable to Ocwen common stockholders | ||||||||||||
Basic | $ | 0.55 | $ | (0.11 | ) | $ | 0.44 | |||||
Diluted | $ | 0.54 | $ | (0.11 | ) | $ | 0.43 | |||||
Consolidated Statement of Operations for the Three Months Ended March 31, 2013 | ||||||||||||
As Reported | Restatement | As Restated | ||||||||||
Interest expense | $ | (93,416 | ) | $ | 3,957 | $ | (89,459 | ) | ||||
Total other expense, net | (111,798 | ) | 3,957 | (107,841 | ) | |||||||
Income before income taxes | 51,335 | 3,957 | 55,292 | |||||||||
Income tax expense | 6,188 | 195 | 6,383 | |||||||||
Net income | 45,147 | 3,762 | 48,909 | |||||||||
Net income attributable to Ocwen stockholders | 45,147 | 3,762 | 48,909 | |||||||||
Net income attributable to Ocwen common stockholders | 42,576 | 3,762 | 46,338 | |||||||||
Earnings per share attributable to Ocwen common stockholders | ||||||||||||
Basic | $ | 0.31 | $ | 0.03 | $ | 0.34 | ||||||
Diluted | $ | 0.31 | $ | 0.02 | $ | 0.33 | ||||||
Consolidated Statement of Comprehensive Income for the Three Months Ended March 31, 2014 | ||||||||||||
As Reported | Restatement | As Restated | ||||||||||
Net Income | $ | 75,831 | $ | (15,345 | ) | $ | 60,486 | |||||
Comprehensive income attributable to Ocwen stockholders | 76,440 | (15,345 | ) | 61,095 | ||||||||
Consolidated Statement of Comprehensive Income for the Three Months Ended March 31, 2013 | ||||||||||||
As Reported | Restatement | As Restated | ||||||||||
Net Income | $ | 45,147 | $ | 3,762 | $ | 48,909 | ||||||
Comprehensive income attributable to Ocwen stockholders | 41,468 | 3,762 | 45,230 | |||||||||
Consolidated Statement of Changes in Equity for the Three Months Ended March 31, 2014 | ||||||||||||
As Reported | Restatement | As Restated | ||||||||||
Net Income | $ | 75,831 | $ | (15,345 | ) | $ | 60,486 | |||||
Consolidated Statement of Changes in Equity for the Three Months Ended March 31, 2013 | ||||||||||||
As Reported | Restatement | As Restated | ||||||||||
Net Income | $ | 45,147 | $ | 3,762 | $ | 48,909 | ||||||
Consolidated Statement of Cash Flows for the Three Months Ended March 31, 2014 | ||||||||||||
As Reported | Restatement | As Restated | ||||||||||
Net income | $ | 75,846 | $ | (15,345 | ) | $ | 60,501 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Other, net | 21,000 | (1,911 | ) | 19,089 | ||||||||
Net cash provided by operating activities | 213,038 | (17,256 | ) | 195,782 | ||||||||
Repayments of other borrowings | (1,670,159 | ) | 17,256 | (1,652,903 | ) | |||||||
Net cash provided by financing activities | 229,056 | 17,256 | 246,312 | |||||||||
Consolidated Statement of Cash Flows for the Three Months Ended March 31, 2013 | ||||||||||||
As Reported | Restatement | As Restated | ||||||||||
Net income | $ | 45,147 | $ | 3,762 | $ | 48,909 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Other, net | 9,614 | 195 | 9,809 | |||||||||
Net cash provided by operating activities | 401,941 | 3,957 | 405,898 | |||||||||
Repayments of other borrowings | (2,985,417 | ) | (3,957 | ) | (2,989,374 | ) | ||||||
Net cash provided by financing activities | 1,320,387 | (3,957 | ) | 1,316,430 | ||||||||
Securitization_and_Variable_In1
Securitization and Variable Interest Entities (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Transfers and Servicing [Abstract] | ' | |||||||
Schedule of Cash Flows Related to Transfers Accounted for as Sales | ' | |||||||
The following table presents a summary of cash flows received from and paid to securitization trusts related to transfers accounted for as sales that were outstanding during the three months ended March 31: | ||||||||
2014 | 2013 | |||||||
Proceeds received from securitizations | $ | 1,534,251 | $ | 2,576,792 | ||||
Servicing fees collected | 5,194 | 1,518 | ||||||
$ | 1,539,445 | $ | 2,578,310 | |||||
Schedule of Assets That Relate to Continuing Involvement with Transferred Financial Assets with Servicing Rights and Maximum Exposure to Loss Including the Unpaid Principal Balance | ' | |||||||
The following table presents the carrying amounts of our assets that relate to our continuing involvement with forward loans that we have transferred with servicing rights retained as well as our maximum exposure to loss including the UPB of the transferred loans at the dates indicated: | ||||||||
March 31, 2014 | December 31, 2013 | |||||||
Carrying value of assets: | ||||||||
Mortgage servicing rights, at amortized cost | $ | 49,219 | $ | 44,615 | ||||
Mortgage servicing rights, at fair value | 3,079 | 3,075 | ||||||
Advances and match funded advances | 11,069 | 15,888 | ||||||
Unpaid principal balance of loans transferred (1) | 6,497,814 | 5,641,277 | ||||||
Maximum exposure to loss | $ | 6,561,181 | $ | 5,704,855 | ||||
-1 | The UPB of the loans transferred is the maximum exposure to loss under our standard representations and warranties obligations. |
Business_Acquisitions_Tables
Business Acquisitions (Tables) | 3 Months Ended | |||||||||||
Mar. 31, 2014 | ||||||||||||
Business Acquisition [Line Items] | ' | |||||||||||
Schedule of Purchase Price Allocation | ' | |||||||||||
The following table summarizes the fair values of assets acquired and liabilities assumed as part of the ResCap Acquisition: | ||||||||||||
Purchase Price Allocation | 15-Feb-13 | Adjustments | Final | |||||||||
MSRs (1) | $ | 393,891 | $ | 7,423 | $ | 401,314 | ||||||
Advances and match funded advances (1) | 1,622,348 | 164,061 | 1,786,409 | |||||||||
Deferred tax assets | — | — | — | |||||||||
Premises and equipment | 22,398 | (5,975 | ) | 16,423 | ||||||||
Receivables and other assets | 2,989 | — | 2,989 | |||||||||
Other liabilities: | ||||||||||||
Liability for indemnification obligations | (49,500 | ) | — | (49,500 | ) | |||||||
Other | (24,840 | ) | (285 | ) | (25,125 | ) | ||||||
Total identifiable net assets | 1,967,286 | 165,224 | 2,132,510 | |||||||||
Goodwill | 204,743 | 6,676 | 211,419 | |||||||||
Total consideration | $ | 2,172,029 | $ | 171,900 | $ | 2,343,929 | ||||||
-1 | As of the acquisition date, the purchase of certain MSRs from ResCap was not complete pending the receipt of certain consents and court approvals. Subsequent to the acquisition, we obtained the required consents and approvals for a portion of these MSRs and paid an additional purchase price of $174.6 million to acquire the MSRs and related advances, including $54.2 million in 2014. The purchase price allocation has been revised to include the resulting adjustments to MSRs, advances and goodwill. | |||||||||||
Schedule of Restructuring Reserve Liability | ' | |||||||||||
The following table provides a reconciliation of the beginning and ending liability balances for these termination costs: | ||||||||||||
Employee termination benefits | Lease termination costs | Total | ||||||||||
Liability balance as at December 31, 2013 | $ | 4,816 | $ | 2,454 | $ | 7,270 | ||||||
Additions charged to operations (1) | 10,584 | — | 10,584 | |||||||||
Amortization of discount | — | 42 | 42 | |||||||||
Payments | (10,370 | ) | (341 | ) | (10,711 | ) | ||||||
Liability balance as at March 31, 2014 (2) | $ | 5,030 | $ | 2,155 | $ | 7,185 | ||||||
-1 | $9.5 million was recognized in the Servicing segment, $(0.1) million was recognized in the Lending segment and the remaining $1.2 million was recognized in the Corporate Items and Other segment. Charges related to employee termination benefits are reported in Compensation and benefits expense in the unaudited Consolidated Statement of Operations. The liabilities are included in Other liabilities in the unaudited Consolidated Balance Sheet. | |||||||||||
-2 | We expect the remaining liability for employee termination benefits at March 31, 2014 to be settled in 2014. | |||||||||||
ResCap [Member] | ' | |||||||||||
Business Acquisition [Line Items] | ' | |||||||||||
Post-Acquisition Results of Operations | ' | |||||||||||
The following table presents the revenue and earnings of the ResCap operations that are included in our unaudited Consolidated Statement of Operations from the acquisition date of February 15, 2013 through March 31, 2013: | ||||||||||||
Revenues | $ | 74,853 | ||||||||||
Net income | $ | 14,879 | ||||||||||
Pro Forma Results of Operations | ' | |||||||||||
The following table presents unaudited supplemental pro forma information for Ocwen for the three months ended March 31, 2013 as if the ResCap Acquisition occurred on January 1, 2012. Pro forma adjustments include: | ||||||||||||
• | conforming servicing revenues to the revenue recognition policies followed by Ocwen; | |||||||||||
• | conforming the accounting for MSRs to the valuation and amortization policies of Ocwen; | |||||||||||
• | adjusting interest expense to eliminate the pre-acquisition interest expense of ResCap and to recognize interest expense as if the acquisition-related debt of Ocwen had been outstanding at January 1, 2012; and | |||||||||||
• | reporting acquisition-related charges for professional services as if they had been incurred in 2012 rather than 2013. | |||||||||||
Revenues | $ | 454,003 | ||||||||||
Net income | $ | 36,303 | ||||||||||
Sales_of_Advances_and_MSRs_Tab
Sales of Advances and MSRs (Tables) | 3 Months Ended | |||
Mar. 31, 2014 | ||||
Transfers and Servicing of Financial Assets [Abstract] | ' | |||
Summary of the Assets and Liabilities Sold to HLSS | ' | |||
The following table provides a summary of the assets and liabilities sold in connection with the HLSS Transactions during the three months ended March 31, 2013: | ||||
Sale of MSRs accounted for as a financing | $ | 100,707 | ||
Sale of advances and match funded advances | 703,206 | |||
Sales price, as adjusted | 803,913 | |||
Amount due to (from) HLSS for post-closing adjustments at March 31 | 10,406 | |||
Cash received on current year sales | 814,319 | |||
Amount received from HLSS as settlement of post-closing adjustments outstanding at the end of the previous year | — | |||
Total cash received | $ | 814,319 | ||
Fair_Value_Tables
Fair Value (Tables) | 3 Months Ended | |||||||||||||||||||
Mar. 31, 2014 | ||||||||||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||||||||||
Schedule of Fair Value Assets and Liabilities | ' | |||||||||||||||||||
The carrying amounts and the estimated fair values of our financial instruments and our nonfinancial assets measured at fair value on a recurring or non-recurring basis are as follows at the dates indicated: | ||||||||||||||||||||
March 31, 2014 | December 31, 2013 | |||||||||||||||||||
Level | Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||||||
Financial assets: | ||||||||||||||||||||
Loans held for sale: | ||||||||||||||||||||
Loans held for sale, at fair value (a) | 2 | $ | 338,228 | $ | 338,228 | $ | 503,753 | $ | 503,753 | |||||||||||
Loans held for sale, at lower of cost or fair value (b) | 3 | 45,475 | 45,475 | 62,907 | 62,907 | |||||||||||||||
Total Loans held for sale | $ | 383,703 | $ | 383,703 | $ | 566,660 | $ | 566,660 | ||||||||||||
Loans held for investment - Reverse mortgages, at fair value (a) | 3 | $ | 923,464 | $ | 923,464 | $ | 618,018 | $ | 618,018 | |||||||||||
Advances and match funded advances (c) | 3 | 3,593,780 | 3,593,780 | 3,443,215 | 3,443,215 | |||||||||||||||
Receivables, net (c) | 3 | 182,724 | 182,724 | 152,516 | 152,516 | |||||||||||||||
Financial liabilities: | ||||||||||||||||||||
Match funded liabilities (c) | 3 | $ | 2,361,662 | $ | 2,361,662 | $ | 2,364,814 | $ | 2,364,814 | |||||||||||
Financing liabilities: | ||||||||||||||||||||
HMBS-related borrowings, at fair value (a) | 3 | $ | 870,462 | $ | 870,462 | $ | 615,576 | $ | 615,576 | |||||||||||
Other (c) | 3 | 822,685 | 822,685 | 651,397 | 651,397 | |||||||||||||||
Total Financing liabilities | $ | 1,693,147 | $ | 1,693,147 | $ | 1,266,973 | $ | 1,266,973 | ||||||||||||
Other secured borrowings: | ||||||||||||||||||||
Senior secured term loan (c) | 3 | $ | 1,281,981 | $ | 1,267,043 | $ | 1,284,901 | $ | 1,270,108 | |||||||||||
Other (c) | 3 | 352,018 | 352,018 | 492,768 | 492,768 | |||||||||||||||
Total Other secured borrowings | $ | 1,633,999 | $ | 1,619,061 | $ | 1,777,669 | $ | 1,762,876 | ||||||||||||
Derivative financial instruments (a): | ||||||||||||||||||||
IRLCs | 2 | $ | 9,420 | $ | 9,420 | $ | 8,433 | $ | 8,433 | |||||||||||
Forward MBS trades | 1 | 699 | 699 | 6,905 | 6,905 | |||||||||||||||
Interest rate caps | 3 | 324 | 324 | 442 | 442 | |||||||||||||||
MSRs: | ||||||||||||||||||||
MSRs, at fair value (a) | 3 | $ | 110,826 | $ | 110,826 | $ | 116,029 | $ | 116,029 | |||||||||||
MSRs, at amortized cost (c) | 3 | 1,929,529 | 2,774,910 | 1,953,352 | 2,441,719 | |||||||||||||||
Total MSRs | $ | 2,040,355 | $ | 2,885,736 | $ | 2,069,381 | $ | 2,557,748 | ||||||||||||
(a) | Measured at fair value on a recurring basis. | |||||||||||||||||||
(b) | Measured at fair value on a non-recurring basis. | |||||||||||||||||||
(c) | Disclosed, but not carried, at fair value. | |||||||||||||||||||
Reconciliation of Level 3 Assets | ' | |||||||||||||||||||
The following tables present a reconciliation of the changes in fair value of Level 3 assets and liabilities that we measure at fair value on a recurring basis: | ||||||||||||||||||||
Loans Held for Investment - Reverse Mortgages | HMBS-Related Borrowings | Derivative Financial Instruments, net | MSRs | Total | ||||||||||||||||
Fair value at January 1, 2014 | $ | 618,018 | $ | (615,576 | ) | $ | 442 | $ | 116,029 | $ | 118,913 | |||||||||
Purchases, issuances, sales and settlements: | ||||||||||||||||||||
Purchases | — | — | — | — | — | |||||||||||||||
Issuances | 176,658 | (226,626 | ) | 24 | — | (49,944 | ) | |||||||||||||
Transfer from loans held for sale, at fair value | 110,874 | — | — | — | 110,874 | |||||||||||||||
Sales | — | — | — | — | — | |||||||||||||||
Settlements | (14,029 | ) | 5,386 | — | — | (8,643 | ) | |||||||||||||
273,503 | (221,240 | ) | 24 | — | 52,287 | |||||||||||||||
Total realized and unrealized gains and (losses): (1) | ||||||||||||||||||||
Included in earnings | 31,943 | (33,646 | ) | (142 | ) | (5,203 | ) | (7,048 | ) | |||||||||||
Included in Other comprehensive income (loss) | — | — | — | — | — | |||||||||||||||
31,943 | (33,646 | ) | (142 | ) | (5,203 | ) | (7,048 | ) | ||||||||||||
Transfers in and / or out of Level 3 | — | — | — | — | — | |||||||||||||||
Fair value at March 31, 2014 | $ | 923,464 | $ | (870,462 | ) | $ | 324 | $ | 110,826 | $ | 164,152 | |||||||||
Derivative Financial Instruments, net | MSRs | Total | ||||||||||||||||||
Fair value at January 1, 2013 | $ | (10,668 | ) | $ | 85,213 | $ | 74,545 | |||||||||||||
Purchases, issuances, sales and settlements: | ||||||||||||||||||||
Purchases | — | — | — | |||||||||||||||||
Issuances | — | — | — | |||||||||||||||||
Sales | — | — | — | |||||||||||||||||
Settlements | 310 | — | 310 | |||||||||||||||||
310 | — | 310 | ||||||||||||||||||
Total realized and unrealized gains and (losses) (1): | ||||||||||||||||||||
Included in earnings | (1,353 | ) | (679 | ) | (2,032 | ) | ||||||||||||||
Included in Other comprehensive income (loss) | (6,924 | ) | — | (6,924 | ) | |||||||||||||||
(8,277 | ) | (679 | ) | (8,956 | ) | |||||||||||||||
Transfers in and / or out of Level 3 | — | — | — | |||||||||||||||||
Fair value at March 31, 2013 | $ | (18,635 | ) | $ | 84,534 | $ | 65,899 | |||||||||||||
-1 | Total losses attributable to derivative financial instruments still held at March 31, 2014 and March 31, 2013 were $0.1 million and $4.8 million, respectively. |
Loans_Held_for_Sale_Tables
Loans Held for Sale (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Receivables [Abstract] | ' | |||||||
Schedule of Loans Held for Sale Fair Value | ' | |||||||
The following table summarizes the activity in the balance of Loans held for sale, at fair value, during the three months ended March 31: | ||||||||
2014 | 2013 | |||||||
Beginning balance | $ | 503,753 | $ | 426,480 | ||||
Originations and purchases | 1,416,797 | 2,462,531 | ||||||
Proceeds from sales | (1,481,403 | ) | (2,563,247 | ) | ||||
Transfers to loans held for investment - reverse mortgages | (110,874 | ) | — | |||||
Gain (loss) on sale of loans | 12,863 | (29,786 | ) | |||||
Other | (2,908 | ) | (464 | ) | ||||
Ending balance | $ | 338,228 | $ | 295,514 | ||||
Schedule of Loans Held For Sale At Lower Cost Or Fair Value, Activity | ' | |||||||
The following table summarizes the activity in the balance of Loans held for sale, at lower of cost or fair value, during the three months ended March 31: | ||||||||
2014 | 2013 | |||||||
Beginning balance | $ | 62,907 | $ | 82,866 | ||||
Purchases | 959,756 | 53,674 | ||||||
Proceeds from sales | (835,786 | ) | (66,868 | ) | ||||
Principal payments | (96,300 | ) | (460 | ) | ||||
Transfers to accounts receivable | (66,187 | ) | — | |||||
Gain on sale of loans | 23,031 | 1,423 | ||||||
Increase in valuation allowance | (4,163 | ) | (7,269 | ) | ||||
Modifications, charge offs and other | 2,217 | (751 | ) | |||||
Ending balance | $ | 45,475 | $ | 62,615 | ||||
Schedule of Gains on Loans Held for Sale | ' | |||||||
The following table summarizes the activity in Gain on loans held for sale, net, during the three months ended March 31: | ||||||||
2014 | 2013 | |||||||
Gain on sales of loans (1)(2) | $ | 54,993 | $ | (1,081 | ) | |||
Change in fair value of IRLCs | 986 | (1,237 | ) | |||||
Change in fair value of loans held for sale | 1,800 | (440 | ) | |||||
Gain (loss) on economic hedge instruments | (13,610 | ) | 10,189 | |||||
Other | (182 | ) | (682 | ) | ||||
$ | 43,987 | $ | 6,749 | |||||
-1 | Includes gains of $11.6 million and $28.7 million for the three months ended March 31, 2014 and 2013, respectively, representing the value assigned to MSRs retained on sales of loans. Also includes gains of $22.8 million recorded during the three months ended March 31, 2014 on sales of repurchased loans into Ginnie Mae guaranteed securitizations. | |||||||
-2 | Includes gains of $16.1 million recorded during the three months ended March 31, 2014 in connection with sales of reverse mortgages into Ginnie Mae guaranteed securitizations. |
Advances_Tables
Advances (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Advances [Abstract] | ' | |||||||
Schedule of Advance Payments by Financial Institution on Foreclosed Properties | ' | |||||||
Advances, net, representing payments made on behalf of borrowers or on foreclosed properties, consisted of the following at the dates indicated: | ||||||||
March 31, 2014 | December 31, 2013 | |||||||
Servicing: | ||||||||
Principal and interest | $ | 189,338 | $ | 141,307 | ||||
Taxes and insurance | 465,359 | 477,039 | ||||||
Foreclosures, bankruptcy and other | 278,713 | 268,053 | ||||||
933,410 | 886,399 | |||||||
Corporate Items and Other | 4,516 | 4,433 | ||||||
$ | 937,926 | $ | 890,832 | |||||
Match funded advances on residential loans we service for others are comprised of the following at the dates indicated: | ||||||||
March 31, 2014 | December 31, 2013 | |||||||
Principal and interest | $ | 1,589,396 | $ | 1,497,649 | ||||
Taxes and insurance | 847,615 | 830,113 | ||||||
Foreclosures, bankruptcy, real estate and other | 218,843 | 224,621 | ||||||
$ | 2,655,854 | $ | 2,552,383 | |||||
Schedule of Activity in Advances | ' | |||||||
The following table summarizes the activity in advances for the three months ended March 31: | ||||||||
2014 | 2013 | |||||||
Beginning balance | $ | 890,832 | $ | 184,463 | ||||
Acquisitions (1) | 98,875 | 205,365 | ||||||
Transfers to match funded advances | (10,156 | ) | — | |||||
Sales of advances to HLSS | — | (38,313 | ) | |||||
(Collections) new advances, net | (41,625 | ) | 210,046 | |||||
Ending balance | $ | 937,926 | $ | 561,561 | ||||
-1 | Servicing advances acquired through business acquisitions and asset acquisitions, primarily in connection with the acquisition of MSRs. See Note 3 — Business Acquisitions, Note 6 — Loans Held for Sale and Note 9 — Mortgage Servicing for additional information. |
Match_Funded_Advance_Tables
Match Funded Advance (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Transfers and Servicing [Abstract] | ' | |||||||
Schedule of Advance Payments by Financial Institution on Foreclosed Properties | ' | |||||||
Advances, net, representing payments made on behalf of borrowers or on foreclosed properties, consisted of the following at the dates indicated: | ||||||||
March 31, 2014 | December 31, 2013 | |||||||
Servicing: | ||||||||
Principal and interest | $ | 189,338 | $ | 141,307 | ||||
Taxes and insurance | 465,359 | 477,039 | ||||||
Foreclosures, bankruptcy and other | 278,713 | 268,053 | ||||||
933,410 | 886,399 | |||||||
Corporate Items and Other | 4,516 | 4,433 | ||||||
$ | 937,926 | $ | 890,832 | |||||
Match funded advances on residential loans we service for others are comprised of the following at the dates indicated: | ||||||||
March 31, 2014 | December 31, 2013 | |||||||
Principal and interest | $ | 1,589,396 | $ | 1,497,649 | ||||
Taxes and insurance | 847,615 | 830,113 | ||||||
Foreclosures, bankruptcy, real estate and other | 218,843 | 224,621 | ||||||
$ | 2,655,854 | $ | 2,552,383 | |||||
Schedule of Activity In Match Funded Advances | ' | |||||||
The following table summarizes the activity in match funded advances for the three months ended March 31: | ||||||||
2014 | 2013 | |||||||
Beginning balance | $ | 2,552,383 | $ | 3,049,244 | ||||
Acquisitions (1) | 85,521 | 1,448,371 | ||||||
Transfers from advances | 10,156 | — | ||||||
Sales of advances to HLSS | — | (664,893 | ) | |||||
New advances (collections), net | 7,794 | (396,639 | ) | |||||
Ending balance | $ | 2,655,854 | $ | 3,436,083 | ||||
-1 | Servicing advances acquired in connection with the acquisitions of MSRs through business acquisitions and asset acquisitions. See Note 3 — Business Acquisitions and Note 9 — Mortgage Servicing for additional information. |
Tables
(Tables) | 3 Months Ended | |||||||||||
Mar. 31, 2014 | ||||||||||||
Transfers and Servicing [Abstract] | ' | |||||||||||
Schedule of Activity Related to MSRs - Amortization Method | ' | |||||||||||
The following tables summarize the activity in the carrying value of amortization method servicing assets for the three months ended March 31: | ||||||||||||
2014 | 2013 | |||||||||||
Beginning balance | $ | 1,953,352 | $ | 678,937 | ||||||||
Additions recognized in connection with business acquisitions: | ||||||||||||
OSI (1) | 8,954 | — | ||||||||||
ResCap Acquisition (1) | 11,370 | 393,891 | ||||||||||
Additions recognized in connection with asset acquisitions: | ||||||||||||
OneWest MSR Transaction (2) | 1,516 | — | ||||||||||
Greenpoint MSR Transaction (3) | 3,700 | — | ||||||||||
Other | 1,481 | 972 | ||||||||||
Additions recognized on the sale of mortgage loans | 11,614 | 28,705 | ||||||||||
Servicing transfers and adjustments | (364 | ) | (124 | ) | ||||||||
Amortization (4) | (62,094 | ) | (47,987 | ) | ||||||||
Ending balance | $ | 1,929,529 | $ | 1,054,394 | ||||||||
Estimated fair value at end of period | $ | 2,774,910 | $ | 1,288,732 | ||||||||
-1 | See Note 3 — Business Acquisitions for additional information regarding MSRs recognized in connection with business acquisitions. | |||||||||||
-2 | The acquired MSRs relate to mortgage loans with a UPB of $1.1 billion and related servicing advances of $34.3 million acquired in the final closing of the OneWest MSR Transaction. The OneWest MSR Transaction closed in stages, and the majority of loans were boarded onto our primary servicing platform as of December 31, 2013. | |||||||||||
-3 | The acquired MSRs relate to mortgage loans with a UPB of $948.9 million and related servicing advances of $47.6 million. | |||||||||||
-4 | In the unaudited Consolidated Statement of Operations, Amortization of mortgage servicing rights is reported net of the amortization of servicing liabilities and includes the amount of charges we recognized to increase servicing liability obligations. | |||||||||||
Schedule of Expected Amortization Expense | ' | |||||||||||
The estimated amortization expense for MSRs, calculated based on assumptions used at March 31, 2014, is projected as follows over the next five years (See Note 1 — Description of Business and Basis of Presentation regarding a change in accounting estimate applicable to MRS amortization.): | ||||||||||||
2015 | $ | 227,807 | ||||||||||
2016 | 193,589 | |||||||||||
2017 | 166,401 | |||||||||||
2018 | 143,094 | |||||||||||
2019 | 68,417 | |||||||||||
Schedule of Activity Related to MSRs - Fair Value Measurement Method | ' | |||||||||||
The following table summarizes the activity related to fair value servicing assets for the three months ended March 31: | ||||||||||||
2014 | 2013 | |||||||||||
Beginning balance | $ | 116,029 | $ | 85,213 | ||||||||
Changes in fair value (1): | ||||||||||||
Changes in market value assumptions | (3,155 | ) | 4,650 | |||||||||
Realization of cash flows and other changes | (2,048 | ) | (5,329 | ) | ||||||||
Ending balance | $ | 110,826 | $ | 84,534 | ||||||||
-1 | Changes in fair value are recognized in Servicing and origination expense in the unaudited Consolidated Statement of Operations. | |||||||||||
Schedule of Estimated Change in the Fair Value of Our MSRs | ' | |||||||||||
The following table summarizes the estimated change in the value of the MSRs that we carry at fair value as of March 31, 2014 given hypothetical instantaneous parallel shifts in the yield curve: | ||||||||||||
Adverse change in fair value | ||||||||||||
10% | 20% | |||||||||||
Weighted average prepayment speeds | $ | (8,475 | ) | $ | (16,635 | ) | ||||||
Discount rate (Option-adjusted spread) | $ | (4,881 | ) | $ | (9,371 | ) | ||||||
Schedule of Composition of Servicing and Subservicing Portfolios by Type of Property Serviced | ' | |||||||||||
The following table presents the composition of our primary servicing and subservicing portfolios by type of property serviced as measured by UPB. The servicing portfolio represents loans for which we own the MSRs while subservicing represents all other loans. The UPB of assets serviced for others are not included on our unaudited Consolidated Balance Sheets. | ||||||||||||
Residential | Commercial | Total | ||||||||||
UPB at March 31, 2014 | ||||||||||||
Servicing (1) | $ | 391,701,237 | $ | — | $ | 391,701,237 | ||||||
Subservicing | 57,869,359 | 318,507 | 58,187,866 | |||||||||
$ | 449,570,596 | $ | 318,507 | $ | 449,889,103 | |||||||
UPB at December 31, 2013 | ||||||||||||
Servicing (1) | $ | 397,546,635 | $ | — | $ | 397,546,635 | ||||||
Subservicing | 67,104,697 | 400,502 | 67,505,199 | |||||||||
$ | 464,651,332 | $ | 400,502 | $ | 465,051,834 | |||||||
UPB at March 31, 2013 | ||||||||||||
Servicing (1) | $ | 272,252,405 | $ | — | $ | 272,252,405 | ||||||
Subservicing | 194,819,256 | 392,584 | 195,211,840 | |||||||||
$ | 467,071,661 | $ | 392,584 | $ | 467,464,245 | |||||||
-1 | Includes primary servicing UPB of $170.8 billion, $175.1 billion and $92.5 billion at March 31, 2014, December 31, 2013 and March 31, 2013, respectively, for which the Rights to MSRs have been sold to HLSS. | |||||||||||
Schedule of Components of Servicing and Subservicing Fees | ' | |||||||||||
The following table presents the components of servicing and subservicing fees for the three months ended March 31: | ||||||||||||
2014 | 2013 | |||||||||||
Loan servicing and subservicing fees: | ||||||||||||
Servicing | $ | 351,823 | $ | 235,156 | ||||||||
Subservicing | 33,725 | 33,866 | ||||||||||
385,548 | 269,022 | |||||||||||
Home Affordable Modification Program (HAMP) fees | 36,699 | 40,147 | ||||||||||
Late charges | 36,835 | 25,896 | ||||||||||
Loan collection fees | 8,294 | 6,382 | ||||||||||
Custodial accounts (float earnings) | 1,721 | 1,680 | ||||||||||
Other | 21,362 | 26,182 | ||||||||||
$ | 490,459 | $ | 369,309 | |||||||||
Receivables_Tables
Receivables (Tables) | 3 Months Ended | |||||||||||
Mar. 31, 2014 | ||||||||||||
Receivables [Abstract] | ' | |||||||||||
Schedule of Receivables | ' | |||||||||||
Receivables consisted of the following at the dates indicated: | ||||||||||||
Receivables | Allowance for Losses | Net | ||||||||||
March 31, 2014 | ||||||||||||
Servicing (1) | $ | 175,029 | $ | (23,291 | ) | $ | 151,738 | |||||
Due from related parties (2) | 11,217 | — | 11,217 | |||||||||
Other (3) | 19,872 | (103 | ) | 19,769 | ||||||||
$ | 206,118 | $ | (23,394 | ) | $ | 182,724 | ||||||
December 31, 2013 | ||||||||||||
Servicing (1) | $ | 124,537 | $ | (17,419 | ) | $ | 107,118 | |||||
Income taxes receivable | 6,369 | — | 6,369 | |||||||||
Due from related parties (2) | 14,553 | — | 14,553 | |||||||||
Other (3) | 24,579 | (103 | ) | 24,476 | ||||||||
$ | 170,038 | $ | (17,522 | ) | $ | 152,516 | ||||||
-1 | The balances at March 31, 2014 and December 31, 2013 arise from our Servicing business and primarily include reimbursable expenditures due from investors and amounts to be recovered from the custodial accounts of the trustees. The balances at March 31, 2014 and December 31, 2013 include $59.8 million and $54.0 million of receivables and $16.4 million and $14.0 million of allowances for losses, respectively, related to defaulted FHA or VA insured loans repurchased from Ginnie Mae guaranteed securitizations. | |||||||||||
-2 | See Note 19 — Related Party Transactions for additional information regarding transactions with Altisource and HLSS. | |||||||||||
-3 | Includes $13.6 million related to probable losses expected to be indemnified under the terms of the Homeward merger agreement. |
Other_Assets_Tables
Other Assets (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Other Assets [Abstract] | ' | |||||||
Schedule of Other Assets | ' | |||||||
Other assets consisted of the following at the dates indicated: | ||||||||
March 31, 2014 | December 31, 2013 | |||||||
Debt service accounts (1) | $ | 82,630 | $ | 129,897 | ||||
Contingent assets - ResCap Acquisition (2) | — | 51,932 | ||||||
Prepaid lender fees and debt issuance costs, net | 32,151 | 31,481 | ||||||
Prepaid income taxes | 25,334 | 20,585 | ||||||
Purchase price deposit (3) | 25,000 | 10,000 | ||||||
Prepaid expenses | 12,956 | 16,132 | ||||||
Derivatives, at fair value (4) | 10,409 | 15,494 | ||||||
Investment in unconsolidated entities (5) | 6,646 | 11,771 | ||||||
Other | 33,979 | 21,851 | ||||||
$ | 229,105 | $ | 309,143 | |||||
-1 | Under our advance funding facilities, we are contractually required to remit collections on pledged advances to the trustee within two days of receipt. The collected funds are not applied to reduce the related match funded debt until the payment dates specified in the indenture. The balances also include amounts that have been set aside from the proceeds of our match funded advance facilities and certain of our warehouse facilities to provide for possible shortfalls in the funds available to pay certain expenses and interest. The funds related to match funded facilities are held in interest earning accounts in the name of the SPE created in connection with the facility. | |||||||
-2 | As disclosed in Note 3 — Business Acquisitions, the purchase of certain MSRs and related advances from ResCap was not complete on the date of acquisition pending the receipt of certain consents and court approvals. We recorded a contingent asset effective on the date of the acquisition until we subsequently obtained the required consents and approvals for the MSRs and paid the additional purchase price. | |||||||
-3 | The balance at December 31, 2013 represents an initial cash deposit that we made in connection with the agreement we entered into on December 20, 2013 to acquire MSRs and related advances from Wells Fargo Bank, N.A. This deposit along with an additional deposit of $15.0 million that we made in January 2014 will be held in escrow until the transaction closes. See Note 21 - Commitments and Contingencies for additional information. | |||||||
-4 | See Note 15 — Derivative Financial Instruments and Hedging Activities for additional information regarding derivatives. | |||||||
-5 | The balance at December 31, 2013 includes an investment of $6.6 million in OSI. As disclosed in Note 3 — Business Acquisitions, we increased our ownership from 26.00% to 87.35% on January 31, 2014. Effective on that date, we began including the accounts of OSI in our consolidated financial statements and eliminated our current investment in consolidation. |
Borrowings_Tables
Borrowings (Tables) | 3 Months Ended | ||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||
Debt Disclosure [Abstract] | ' | ||||||||||||||||||
Schedule of Match Funded Liabilities | ' | ||||||||||||||||||
Match funded liabilities are comprised of the following at the dates indicated: | |||||||||||||||||||
Borrowing Type | Interest Rate | Maturity (1) | Amortization Date (1) | Available Borrowing Capacity (2) | March 31, 2014 | December 31, 2013 | |||||||||||||
Advance Receivable Backed Notes Series 2012-ADV1 | 1ML (4) + 250 bps | Jun. 2016 | Jun. 2014 | $ | 121,742 | $ | 353,258 | $ | 417,388 | ||||||||||
Advance Receivable Backed | 1ML + 300 bps | Dec. 2015 | Dec. 2014 | 18,630 | 31,370 | 33,211 | |||||||||||||
Note | |||||||||||||||||||
2012-Homeward Agency Advance Funding Trust | Cost of Funds + 300 bps | Mar. 2014 | Mar. 2014 | 1,562 | 23,438 | 21,019 | |||||||||||||
2012-1 (3) | |||||||||||||||||||
Advance Receivables Backed Notes, Series 2013-VF1, | 1ML + 175 bps (6) | Oct. 2044 | Oct. 2014 | 23,202 | 976,798 | 1,494,628 | |||||||||||||
Class A (5) | |||||||||||||||||||
Advance Receivables Backed Notes, Series 2013-VF2, | 1ML + 167 bps (7) | Oct. 2044 | Oct. 2014 | 10,954 | 472,758 | 385,645 | |||||||||||||
Class A (5) | |||||||||||||||||||
Advance Receivables Backed Notes, Series 2013-VF2, | 1ML + 425 bps (8) | Oct. 2044 | Oct. 2014 | 647 | 15,641 | 12,923 | |||||||||||||
Class B (5) | |||||||||||||||||||
Advance Receivables Backed Notes - Series 2014-VF3, Class A (9) | 1ML + 175 bps (9) | Oct. 2044 | Oct. 2014 | 11,601 | 488,399 | — | |||||||||||||
$ | 188,338 | $ | 2,361,662 | $ | 2,364,814 | ||||||||||||||
Weighted average interest rate | 2.04 | % | 2.08 | % | |||||||||||||||
-1 | The amortization date of our facilities 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. The maturity date is the date on which all outstanding balances must be repaid. In two advance facilities, there are multiple notes outstanding. For each note, after the amortization date, all collections that represent the repayment of advances pledged to the facility must be applied to reduce the balance of the note outstanding, and any new advances are ineligible to be financed. | ||||||||||||||||||
-2 | Borrowing capacity is available to us provided that we have additional eligible collateral to pledge. Collateral may only be pledged to one facility. At March 31, 2014, none of the available borrowing capacity could be used based on the amount of eligible collateral that had been pledged. | ||||||||||||||||||
-3 | Advance facility assumed in the Homeward Acquisition. This facility was terminated on April 16, 2014, and the advances pledged to the facility were transferred to another facility. | ||||||||||||||||||
-4 | 1-Month LIBOR (1ML) was 0.15% and 0.17% at March 31, 2014 and December 31, 2013, respectively. | ||||||||||||||||||
-5 | These notes were issued in connection with the OneWest MSR Transaction. On February 3, 2014, the maximum borrowing capacity on the 2013-VF2 notes was increased by $100.0 million to a total of $500.0 million. On March 17, 2014, the maximum borrowing capacity under the 2013-VF1 note declined by $500.0 million to a total of $1.0 billion. | ||||||||||||||||||
-6 | The interest margin on these notes increases to 200 bps on July 15, 2014, to 225 bps on August 15, 2014 and 250 bps on September 15, 2014. | ||||||||||||||||||
-7 | The interest margin on these notes increases to 191 bps on July 15, 2014, to 215 bps on August 15, 2014 and 238 bps on September 15, 2014. | ||||||||||||||||||
-8 | The interest margin on these notes increases to 486 bps on July 15, 2014, to 546 bps on August 15, 2014 and 607 bps on September 15, 2014. | ||||||||||||||||||
-9 | This note was issued on March 17, 2014 with a maximum borrowing capacity of $500.0 million. The interest margin on this note increases to 200 bps on July 15, 2014, to 225 bps on August 15, 2014 and 250 bps on September 15, 2014. | ||||||||||||||||||
Schedule of Financing Liabilities | ' | ||||||||||||||||||
Financing liabilities are comprised of the following at the dates indicated: | |||||||||||||||||||
Borrowings | Collateral | Interest Rate | Maturity | March 31, 2014 | December 31, 2013 | ||||||||||||||
Servicing: | |||||||||||||||||||
Financing liability – MSRs pledged | MSRs | -1 | -1 | $ | 634,399 | $ | 633,804 | ||||||||||||
Secured Notes, Ocwen Asset Servicing Income Series, Series 2014-1 (2) | MSRs | -2 | Feb. 2028 | 121,352 | — | ||||||||||||||
Financing Liability – Advances Pledged (3) | Advances on loans | -3 | -3 | 56,732 | — | ||||||||||||||
812,483 | 633,804 | ||||||||||||||||||
Lending: | |||||||||||||||||||
Financing liability - MSRs pledged | MSRs | -4 | -4 | 10,202 | 17,593 | ||||||||||||||
HMBS-related borrowings (5) | Loans held for investment | 1ML + 220 bps | -5 | 870,462 | 615,576 | ||||||||||||||
880,664 | 633,169 | ||||||||||||||||||
$ | 1,693,147 | $ | 1,266,973 | ||||||||||||||||
-1 | The HLSS Transaction financing liabilities have no contractual maturity but are amortized over the estimated life of the transferred Rights to MSRs using the interest method with the servicing income that is remitted to HLSS representing payments of principal and interest. For purposes of applying the interest method, the balance of the liability is reduced each month based on the change in the present value of the estimated future cash flows underlying the related MSRs. See Note 4 — Sales of Advances and MSRs for additional information regarding the HLSS Transactions. As discussed in Note 1A — Restatement of Previously Issued Consolidated Financial Statements , we are restating our previously issued unaudited Consolidated Financial Statements to correct an error in applying the interest method to financing liabilities in connection with Rights to MSRs sold to HLSS. The balance of the HLSS Transaction financing liabilities at March 31, 2014 and December 31, 2013 have been restated. | ||||||||||||||||||
-2 | OASIS noteholders are entitled to receive a monthly payment amount equal to the sum of: a) the designated servicing fee amount (21 basis points of the UPB of the reference pool of Freddie Mac mortgages); b) any termination payment amounts; c) any excess refinance amounts; and d) the note redemption amounts, each as defined in the indenture supplement for the Notes. The Notes have a final stated maturity of February 2028. We accounted for this transaction as a financing. Monthly amortization of the liability is estimated using the proportion of monthly projected service fees on the underlying MSRs as a percentage of lifetime projected fees, adjusted for the term of the security. | ||||||||||||||||||
-3 | Certain advances were sold to HLSS Mortgage on March 4, 2014. The sale of the advances did not qualify for sales accounting treatment and was accounted for as a financing. See Note 6 — Loans Held for Sale for additional information. | ||||||||||||||||||
-4 | The financing liability is being amortized using the interest method with the servicing income that is remitted to the purchaser representing payments of principal and interest. | ||||||||||||||||||
-5 | Represents amounts due to the holders of beneficial interests in Ginnie Mae guaranteed HMBS. The beneficial interests have no maturity dates, and the borrowings mature as the related loans are repaid. See Note 2 — Securitizations and Variable Interest Entities for additional information. | ||||||||||||||||||
Schedule of Other Secured Borrowings | ' | ||||||||||||||||||
Other secured borrowings are comprised of the following at the dates indicated: | |||||||||||||||||||
Borrowings | Collateral | Interest Rate | Maturity | Available Borrowing Capacity | March 31, 2014 | December 31, 2013 | |||||||||||||
Servicing: | |||||||||||||||||||
SSTL (2) | -1 | 1-Month Euro-dollar rate + 375 bps with a Eurodollar floor of 125 bps (1) | Feb. 2018 | $ | — | $ | 1,287,000 | $ | 1,290,250 | ||||||||||
Promissory note (2) | MSRs | 1ML + 350 bps | May-17 | — | — | 15,529 | |||||||||||||
Repurchase agreement | Loans held for sale (LHFS) | 1ML + 200 - 345 bps | Apr. 2014 | — | 434 | 17,507 | |||||||||||||
— | 1,287,434 | 1,323,286 | |||||||||||||||||
Lending: | |||||||||||||||||||
Master repurchase agreement (3) | LHFS | 1ML + 175 bps | Apr. 2014 | 170,261 | 129,739 | 105,659 | |||||||||||||
Participation agreement (4) | LHFS | N/A | May-14 | — | 59,075 | 81,268 | |||||||||||||
Master repurchase agreement | LHFS | 1ML + 175 - 275 bps | Jul. 2014 | 90,201 | 59,799 | 91,990 | |||||||||||||
Master repurchase agreement | LHFS | 1ML + 175 - 200 bps | Sep. 2014 | 245,092 | 54,908 | 89,836 | |||||||||||||
Master repurchase agreement | LHFS | 1ML + 275bps | Jul. 2014 | 72,894 | 27,106 | 51,975 | |||||||||||||
Mortgage warehouse agreement | LHFS | 1ML + 275 bps; floor of 350 bps | Jun. 2014 | 43,480 | 16,520 | 34,292 | |||||||||||||
621,928 | 347,147 | 455,020 | |||||||||||||||||
Corporate Items and Other: | |||||||||||||||||||
Securities sold under an agreement to repurchase (5) | Ocwen Real Estate Asset Liquidating Trust 2007-1 Notes | Class A-2 notes: 1ML + 200 bps; Class A-3 notes: 1ML + 300 bps | Monthly | — | 4,437 | 4,712 | |||||||||||||
621,928 | 1,639,018 | 1,783,018 | |||||||||||||||||
Discount (1) | — | (5,019 | ) | (5,349 | ) | ||||||||||||||
$ | 621,928 | $ | 1,633,999 | $ | 1,777,669 | ||||||||||||||
Weighted average interest rate | 5 | % | 4.86 | % | |||||||||||||||
-1 | This facility had an initial balance of $1.3 billion and was issued with an original issue discount of $6.5 million that we are amortizing over the term of the loan. We are required to repay the principal amount of the borrowings in consecutive quarterly installments of $3.3 million. In addition, we are generally required to use the net cash proceeds (as defined) from any asset sale (as defined) to repay loan principal. This provision applies to non-operating sales of assets, and net cash proceeds represent the proceeds from the sale of the assets, net of the repayment of any debt secured by a lien on the assets sold. For assets sales that are part of an HLSS Transaction, we have the option, within 180 days, either to invest the net cash proceeds in MSRs or related assets, such as advances, or to repay loan principal. The borrowings are secured by a first priority security interest in substantially all of the assets of Ocwen. Borrowings bear interest, at the election of Ocwen, at a rate per annum equal to either (a) the base rate [the greatest of (i) the prime rate in effect on such day, (ii) the federal funds rate in effect on such day plus 0.50% and (iii) the one-month Eurodollar rate (1-Month LIBOR)], plus a margin of 2.75% and a base rate floor of 2.25% or (b) the one month Eurodollar rate, plus a margin of 3.75% with a one month Eurodollar floor of 1.25%. To date we have elected option (b) to determine the interest rate. | ||||||||||||||||||
-2 | This note was repaid in full on February 28, 2014. | ||||||||||||||||||
-3 | On April 17, 2014, the maturity date of this facility was extended to April 16, 2015. | ||||||||||||||||||
-4 | Under this participation agreement, the lender provides financing on an uncommitted basis for $50.0 million to $90.0 million at the discretion of the lender. The participation agreement allows the lender to acquire a 100% beneficial interest in the underlying mortgage loans. The transaction does not qualify for sale accounting treatment and is accounted for as a secured borrowing. The lender earns the stated interest rate of the underlying mortgage loans while the loans are financed under the participation agreement. | ||||||||||||||||||
-5 | Represents repurchase agreement for Class A-2 and A-3 notes issued by Ocwen Real Estate Asset Liquidating Trust 2007-1 which have a current face value of $23.9 million at March 31, 2014. This agreement has no stated credit limit and lending is determined for each transaction based on the acceptability of the securities presented as collateral. |
Other_Liabilities_Tables
Other Liabilities (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Other Liabilities Disclosure [Abstract] | ' | |||||||
Schedule of Other Liabilities | ' | |||||||
Other liabilities were comprised of the following at the dates indicated: | ||||||||
March 31, 2014 | December 31, 2013 | |||||||
Liability for indemnification obligations (1) | $ | 169,235 | $ | 192,716 | ||||
Accrued expenses | 97,156 | 108,870 | ||||||
Due to related parties (2) | 73,819 | 77,997 | ||||||
Liability for certain foreclosure matters (3) | 66,948 | 66,948 | ||||||
Additional purchase price due seller - ResCap Acquisition (4) | — | 54,220 | ||||||
Payable to loan servicing and subservicing investors | 44,666 | 33,501 | ||||||
Checks held for escheat | 23,283 | 24,392 | ||||||
Liability for selected tax items | 28,103 | 27,273 | ||||||
Other | 57,405 | 58,678 | ||||||
$ | 560,615 | $ | 644,595 | |||||
-1 | See Note 21 — Commitments and Contingencies for additional information. | |||||||
-2 | See Note 19 — Related Party Transactions for additional information. | |||||||
-3 | See Note 21 — Commitments and Contingencies for additional information. | |||||||
-4 | See Note 3 — Business Acquisitions for additional information. |
Equity_Tables
Equity (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Equity [Abstract] | ' | |||||||
Schedule of Accumulated Other Comprehensive Loss (AOCL), Net of Income Taxes | ' | |||||||
The components of accumulated other comprehensive loss (AOCL), net of income taxes, were as follows at the dates indicated: | ||||||||
March 31, 2014 | December 31, 2013 | |||||||
Unrealized losses on cash flow hedges | $ | 9,418 | $ | 10,026 | ||||
Other | 124 | 125 | ||||||
$ | 9,542 | $ | 10,151 | |||||
Derivative_Financial_Instrumen1
Derivative Financial Instruments and Hedging Activities (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' | ||||||||||||||||
Schedule of Changes in Notional Balance of Holdings of Derivatives | ' | ||||||||||||||||
The following table summarizes the changes in the notional balances of our holdings of derivatives during the three months ended March 31, 2014: | |||||||||||||||||
IRLCs | Forward MBS Trades | Interest Rate Caps | |||||||||||||||
Beginning notional balance | $ | 751,436 | $ | 950,648 | $ | 1,868,000 | |||||||||||
Additions | 1,220,165 | 749,786 | 100,000 | ||||||||||||||
Amortization | 94,571 | — | (112,000 | ) | |||||||||||||
Maturities | (1,134,684 | ) | (438,509 | ) | — | ||||||||||||
Terminations | (310,295 | ) | (333,877 | ) | — | ||||||||||||
Ending notional balance | $ | 621,193 | $ | 928,048 | $ | 1,856,000 | |||||||||||
Fair value of derivative assets (liabilities) at: | |||||||||||||||||
March 31, 2014 | $ | 9,420 | $ | 699 | $ | 324 | |||||||||||
December 31, 2013 | $ | 8,433 | $ | 6,905 | $ | 442 | |||||||||||
Maturity | April 2014 - July 2014 | April 2014 - June 2014 | Nov. 2016 | ||||||||||||||
Schedule of Gains (Losses) on Derivatives | ' | ||||||||||||||||
The following summarizes our open derivative positions at March 31, 2014 and the gains (losses) on those and similar derivatives for the year to date then ended. None of the derivatives was designated as a hedge for accounting purposes at March 31, 2014: | |||||||||||||||||
Purpose | Expiration Date | Notional Amount | Fair Value (1) | Gains / (Losses) | Consolidated Statement of Operations Caption | ||||||||||||
Hedge the effect of changes in interest rates on interest expense on borrowings | |||||||||||||||||
Interest rate caps | |||||||||||||||||
Hedge the effect of changes in 1ML on advance funding facilities | Nov. 2016 | $ | 1,856,000 | $ | 324 | $ | (141 | ) | Other, net | ||||||||
Interest rate risk of mortgage loans held for sale and of IRLCs | |||||||||||||||||
Forward MBS trades | April 2014 - June 2014 | 928,048 | 699 | (13,610 | ) | Gain on loans held for sale, net | |||||||||||
IRLCs | April 2014 - July 2014 | 621,193 | 9,420 | 986 | Gain on loans held for sale, net | ||||||||||||
Total derivatives | $ | 10,443 | $ | (12,765 | ) | ||||||||||||
-1 | Derivatives are reported at fair value in Receivables, Other assets and Other liabilities on our unaudited Consolidated Balance Sheet. | ||||||||||||||||
Schedule of Changes in the Losses on Cash Flow Hedges Included in AOCL | ' | ||||||||||||||||
Changes in AOCL during three months ended March 31 were as follows: | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Beginning balance | $ | 10,151 | $ | 6,441 | |||||||||||||
Additional net losses on cash flow hedges | — | 6,924 | |||||||||||||||
Ineffectiveness of cash flow hedges reclassified to earnings | — | (657 | ) | ||||||||||||||
Losses on terminated hedging relationships amortized to earnings | (779 | ) | — | ||||||||||||||
Net increase (decrease) in accumulated losses on cash flow hedges | (779 | ) | 6,267 | ||||||||||||||
(Increase) decrease in deferred taxes on accumulated losses on cash flow hedges | 171 | (2,548 | ) | ||||||||||||||
Increase (decrease) in accumulated losses on cash flow hedges, net of taxes | (608 | ) | 3,719 | ||||||||||||||
Other, net of income taxes | (1 | ) | (40 | ) | |||||||||||||
Ending balance | $ | 9,542 | $ | 10,120 | |||||||||||||
Schedule of Statements of Operations Related to Derivative Financial Instruments | ' | ||||||||||||||||
Other income (expense), net, includes the following related to derivative financial instruments for three months ended March 31: | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Losses on economic hedges | $ | (141 | ) | $ | (5,079 | ) | |||||||||||
Ineffectiveness of cash flow hedges | — | (657 | ) | ||||||||||||||
Write-off of losses in AOCL for a discontinued hedge relationship | (779 | ) | — | ||||||||||||||
$ | (920 | ) | $ | (5,736 | ) | ||||||||||||
Interest_Expense_Tables
Interest Expense (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Other Income and Expenses [Abstract] | ' | |||||||
Schedule of Components of Interest Expense | ' | |||||||
The following table presents the components of interest expense for the three months ended March 31: | ||||||||
2014 | 2013 | |||||||
Match funded liabilities | $ | 16,318 | $ | 30,351 | ||||
Financing liabilities (1) (2) | 100,230 | 40,612 | ||||||
Other secured borrowings | 21,284 | 15,954 | ||||||
Other | 2,041 | 2,542 | ||||||
$ | 139,873 | $ | 89,459 | |||||
-1 | Includes interest expense of $99.0 million and $40.6 million during the three months ended March 31, 2014 and 2013, respectively, related to financing liabilities recorded in connection with the HLSS Transactions as indicated in the table below. | |||||||
Schedule of Related Party Interest Expense | ' | |||||||
2014 | 2013 | |||||||
Servicing fees collected on behalf of HLSS | $ | 189,157 | $ | 102,258 | ||||
Less: Subservicing fee retained by Ocwen | 90,161 | 47,082 | ||||||
Net servicing fees remitted to HLSS | 98,996 | 55,176 | ||||||
Less: Reduction in financing liability | — | 14,593 | ||||||
Interest expense on HLSS financing liability | $ | 98,996 | $ | 40,583 | ||||
-2 | Interest expense that we expect to be paid on the HMBS-related borrowings is included with net fair value gains in Other revenues. See Note 2 — Securitizations and Variable Interest Entities for additional information. |
Basic_and_Diluted_Earnings_per1
Basic and Diluted Earnings per Share (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Earnings Per Share [Abstract] | ' | |||||||
Schedule of Basic EPS to Diluted EPS | ' | |||||||
The following is a reconciliation of the calculation of basic EPS to diluted EPS for the three months ended March 31: | ||||||||
2014 | 2013 | |||||||
(As Restated) | (As Restated) | |||||||
Basic EPS: | ||||||||
Net income attributable to Ocwen common stockholders | $ | 59,504 | $ | 46,338 | ||||
Weighted average shares of common stock | 135,227,067 | 135,638,567 | ||||||
Basic EPS | $ | 0.44 | $ | 0.34 | ||||
Diluted EPS: | ||||||||
Net income attributable to Ocwen common stockholders | $ | 59,504 | $ | 46,338 | ||||
Preferred stock dividends (1) | 997 | — | ||||||
Adjusted net income attributable to Ocwen | $ | 60,501 | $ | 46,338 | ||||
Weighted average shares of common stock | 135,227,067 | 135,638,567 | ||||||
Effect of dilutive elements: | ||||||||
Preferred Shares (1) | 1,950,298 | — | ||||||
Stock options | 3,908,333 | 3,902,390 | ||||||
Common stock awards | 3,757 | 18,200 | ||||||
Dilutive weighted average shares of common stock | 141,089,455 | 139,559,157 | ||||||
Diluted EPS | $ | 0.43 | $ | 0.33 | ||||
Stock options excluded from the computation of diluted EPS: | ||||||||
Market-based (2) | 547,500 | 1,535,000 | ||||||
-1 | The effect of our Preferred Shares on diluted EPS is computed using the if-converted method. For purposes of computing diluted EPS, we assume the conversion of the Preferred Shares into shares of common stock unless the effect is anti-dilutive. Conversion of the Preferred Shares has not been assumed for the three months ended March 31, 2013 because the effect would have been antidilutive. | |||||||
-2 | Shares that are issuable upon the achievement of certain performance criteria related to Ocwen’s stock price and an annualized rate of return to investors. |
Business_Segment_Reporting_Tab
Business Segment Reporting (Tables) | 3 Months Ended | |||||||||||||||||||
Mar. 31, 2014 | ||||||||||||||||||||
Segment Reporting Information [Line Items] | ' | |||||||||||||||||||
Schedule of Segment Reporting Information | ' | |||||||||||||||||||
Financial information for our segments is as follows: | ||||||||||||||||||||
Servicing | Lending | Corporate Items and Other | Corporate Eliminations | Business Segments Consolidated | ||||||||||||||||
(As Restated) | (As Restated) | |||||||||||||||||||
Results of Operations | ||||||||||||||||||||
For the three months ended March 31, 2014 | ||||||||||||||||||||
Revenue | $ | 520,823 | $ | 28,767 | $ | 1,711 | $ | (40 | ) | $ | 551,261 | |||||||||
Operating expenses (1) | 307,933 | 31,464 | 9,837 | (40 | ) | 349,194 | ||||||||||||||
Income (loss) from operations | 212,890 | (2,697 | ) | (8,126 | ) | — | 202,067 | |||||||||||||
Other income (expense): | ||||||||||||||||||||
Interest income | 439 | 4,009 | 879 | — | 5,327 | |||||||||||||||
Interest expense | (136,386 | ) | (3,451 | ) | (36 | ) | — | (139,873 | ) | |||||||||||
Other | (320 | ) | 2,718 | 1,784 | — | 4,182 | ||||||||||||||
Other income (expense), net | (136,267 | ) | 3,276 | 2,627 | — | (130,364 | ) | |||||||||||||
Income (loss) before income taxes | $ | 76,623 | $ | 579 | $ | (5,499 | ) | $ | — | $ | 71,703 | |||||||||
For the three months ended March 31, 2013 | ||||||||||||||||||||
Revenue | $ | 376,083 | $ | 13,908 | $ | 16,713 | $ | (45 | ) | $ | 406,659 | |||||||||
Operating expenses (1) | 211,504 | 11,098 | 20,969 | (45 | ) | 243,526 | ||||||||||||||
Income (loss) from operations | 164,579 | 2,810 | (4,256 | ) | — | 163,133 | ||||||||||||||
Other income (expense): | ||||||||||||||||||||
Interest income | (614 | ) | 4,780 | 1,020 | — | 5,186 | ||||||||||||||
Interest expense | (86,503 | ) | (2,829 | ) | (127 | ) | — | (89,459 | ) | |||||||||||
Other | (25,988 | ) | 267 | 2,153 | — | (23,568 | ) | |||||||||||||
Other income (expense), net | (113,105 | ) | 2,218 | 3,046 | — | (107,841 | ) | |||||||||||||
Income (loss) before income taxes | $ | 51,474 | $ | 5,028 | $ | (1,210 | ) | $ | — | $ | 55,292 | |||||||||
Servicing | Lending | Corporate Items and Other | Corporate Eliminations | Business Segments Consolidated | ||||||||||||||||
Total Assets | ||||||||||||||||||||
March 31, 2014 | $ | 6,333,097 | $ | 1,326,114 | $ | 527,140 | $ | — | $ | 8,186,351 | ||||||||||
December 31, 2013 | $ | 6,295,976 | $ | 1,195,812 | $ | 435,215 | $ | — | $ | 7,927,003 | ||||||||||
March 31, 2013 | $ | 5,997,149 | $ | 356,668 | $ | 1,083,737 | $ | — | $ | 7,437,554 | ||||||||||
-1 | Depreciation and amortization expense are as follows: | |||||||||||||||||||
Depreciation and Amortization [Member] | ' | |||||||||||||||||||
Segment Reporting Information [Line Items] | ' | |||||||||||||||||||
Schedule of Segment Reporting Information | ' | |||||||||||||||||||
Depreciation and amortization expense are as follows: | ||||||||||||||||||||
Servicing | Lending | Corporate Items and Other | Business Segments Consolidated | |||||||||||||||||
For the three months ended March 31, 2014: | ||||||||||||||||||||
Depreciation expense | $ | 2,820 | $ | 105 | $ | 2,615 | $ | 5,540 | ||||||||||||
Amortization of mortgage servicing rights | 61,779 | 115 | 200 | 62,094 | ||||||||||||||||
Amortization of debt discount | 330 | — | — | 330 | ||||||||||||||||
Amortization of debt issuance costs – SSTL | 1,087 | — | — | 1,087 | ||||||||||||||||
For the three months ended March 31, 2013: | ||||||||||||||||||||
Depreciation expense | $ | 2,699 | $ | 234 | $ | 1,580 | $ | 4,513 | ||||||||||||
Amortization of mortgage servicing rights | 47,883 | — | — | 47,883 | ||||||||||||||||
Amortization of debt discount | 424 | — | — | 424 | ||||||||||||||||
Amortization of debt issuance costs – SSTL | 894 | — | — | 894 | ||||||||||||||||
Related_Party_Transactions_Tab
Related Party Transactions (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Related Party Transactions [Abstract] | ' | |||||||
Schedule of Revenues and Expenses Related to Various Service Agreements | ' | |||||||
The following table summarizes revenues and expenses related to our agreements with Altisource, HLSS, AAMC and Residential (and, as applicable, their subsidiaries) for the three months ended March 31 and net amounts receivable or payable at the dates indicated: | ||||||||
2014 | 2013 | |||||||
Revenues and Expenses: | ||||||||
Altisource: | ||||||||
Revenues | $ | 8,499 | $ | 4,233 | ||||
Expenses | 17,364 | 11,692 | ||||||
HLSS: | ||||||||
Revenues | $ | 165 | $ | 112 | ||||
Expenses | 462 | 491 | ||||||
AAMC | ||||||||
Revenues | $ | 384 | $ | — | ||||
Residential | ||||||||
Revenues | $ | 2,148 | $ | 41 | ||||
Schedule of Amounts Receivable or Payable | ' | |||||||
March 31, 2014 | December 31, 2013 | |||||||
Net Receivable (Payable) | ||||||||
Altisource | $ | (3,074 | ) | $ | (3,843 | ) | ||
HLSS | (59,832 | ) | (59,505 | ) | ||||
AAMC | 304 | 943 | ||||||
Residential | — | 50 | ||||||
$ | (62,602 | ) | $ | (62,355 | ) |
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 3 Months Ended | |||
Mar. 31, 2014 | ||||
Commitments and Contingencies Disclosure [Abstract] | ' | |||
Schedule of Indemnification Obligations | ' | |||
The following table presents the changes in our liability for indemnification obligations for the three months ended March 31, 2014, including representation and warranty obligations and compensatory fees for foreclosures that may ultimately exceed investor timelines: | ||||
Balance at December 31, 2013 | $ | 192,716 | ||
Provision for representation and warranty obligations | 7,266 | |||
New production reserves | 182 | |||
Obligations assumed in connection with MSR and servicing business acquisitions | — | |||
Charge-offs and other (1) | (30,929 | ) | ||
Balance at March 31, 2014 | $ | 169,235 | ||
-1 | Includes principal and interest losses realized in connection with repurchased loans, make-whole, indemnification and fee payments and settlements net of recoveries, if any. |
Description_of_Business_Basis_3
Description of Business, Basis of Presentation and Summary of Significant Accounting Policies - Narrative (Details) (USD $) | 12 Months Ended |
Dec. 31, 2013 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Debt service accounts reclassified | $129.90 |
Description_of_Business_Basis_4
Description of Business, Basis of Presentation and Summary of Significant Accounting Policies - Change in Accounting Estimate (Details) (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Change in Accounting Estimate [Line Items] | ' | ' |
Amortization of mortgage servicing rights | $62,094 | $47,883 |
Net income attributable to Ocwen common stockholders | 59,504 | 46,338 |
Basic (usd per share) | $0.44 | $0.34 |
Diluted (usd per share) | $0.43 | $0.33 |
MSR Amortization Change In Estimate [Member] | ' | ' |
Change in Accounting Estimate [Line Items] | ' | ' |
Amortization of mortgage servicing rights | -25,998 | ' |
Net income attributable to Ocwen common stockholders | $22,755 | ' |
Basic (usd per share) | $0.00 | ' |
Diluted (usd per share) | $0.00 | ' |
Restatement_of_Previously_Issu2
Restatement of Previously Issued Consolidated Financial Statements - Consolidated Balance Sheet Restated (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Deferred tax assets, net | $119,080 | $115,571 |
Total assets | 8,186,351 | 7,927,003 |
Financing liabilities | 1,693,147 | 1,266,973 |
Total liabilities | 6,249,423 | 6,054,051 |
Retained earnings | 1,062,467 | 1,002,963 |
Total stockholders’ equity | 1,873,641 | 1,812,591 |
As Reported [Member] | ' | ' |
Deferred tax assets, net | 118,156 | 116,558 |
Total assets | 8,185,427 | ' |
Financing liabilities | 1,693,147 | 1,284,229 |
Total liabilities | 6,249,423 | 6,071,307 |
Retained earnings | 1,061,543 | 986,694 |
Total stockholders’ equity | 1,872,717 | 1,796,322 |
Restatement Adjustment [Member] | ' | ' |
Deferred tax assets, net | 924 | -987 |
Total assets | 924 | ' |
Financing liabilities | 0 | -17,256 |
Total liabilities | ' | -17,256 |
Retained earnings | 924 | 16,269 |
Total stockholders’ equity | $924 | $16,269 |
Restatement_of_Previously_Issu3
Restatement of Previously Issued Consolidated Financial Statements - Consolidated Statement of Operations Restated (Details) (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Interest expense | ($139,873) | ($89,459) |
Total other expense, net | -130,364 | -107,841 |
Income before income taxes | 71,703 | 55,292 |
Income tax expense | 11,217 | 6,383 |
Net income | 60,486 | 48,909 |
Net income attributable to Ocwen stockholders | 60,501 | 48,909 |
Net income attributable to Ocwen common stockholders | 59,504 | 46,338 |
Earnings per share attributable to Ocwen common stockholders | ' | ' |
Basic (usd per share) | $0.44 | $0.34 |
Diluted (usd per share) | $0.43 | $0.33 |
As Reported [Member] | ' | ' |
Interest expense | -122,616 | -93,416 |
Total other expense, net | -113,107 | -111,798 |
Income before income taxes | 88,960 | 51,335 |
Income tax expense | 13,129 | 6,188 |
Net income | 75,831 | 45,147 |
Net income attributable to Ocwen stockholders | 75,846 | 45,147 |
Net income attributable to Ocwen common stockholders | 74,849 | 42,576 |
Earnings per share attributable to Ocwen common stockholders | ' | ' |
Basic (usd per share) | $0.55 | $0.31 |
Diluted (usd per share) | $0.54 | $0.31 |
Restatement Adjustment [Member] | ' | ' |
Interest expense | -17,257 | 3,957 |
Total other expense, net | -17,257 | 3,957 |
Income before income taxes | -17,257 | 3,957 |
Income tax expense | -1,912 | 195 |
Net income | -15,345 | 3,762 |
Net income attributable to Ocwen stockholders | -15,345 | 3,762 |
Net income attributable to Ocwen common stockholders | ($15,345) | $3,762 |
Earnings per share attributable to Ocwen common stockholders | ' | ' |
Basic (usd per share) | ($0.11) | $0.03 |
Diluted (usd per share) | ($0.11) | $0.02 |
Restatement_of_Previously_Issu4
Restatement of Previously Issued Consolidated Financial Statements - Consolidated Statement of Comprehensive Income Restated (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Net income | $60,486 | $48,909 |
Comprehensive income attributable to Ocwen stockholders | 61,095 | 45,230 |
As Reported [Member] | ' | ' |
Net income | 75,831 | 45,147 |
Comprehensive income attributable to Ocwen stockholders | 76,440 | 41,468 |
Restatement Adjustment [Member] | ' | ' |
Net income | -15,345 | 3,762 |
Comprehensive income attributable to Ocwen stockholders | ($15,345) | $3,762 |
Restatement_of_Previously_Issu5
Restatement of Previously Issued Consolidated Financial Statements - Consolidated Statement of Changes in Equity Restated (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Net income | $60,486 | $48,909 |
As Reported [Member] | ' | ' |
Net income | 75,831 | 45,147 |
Restatement Adjustment [Member] | ' | ' |
Net income | ($15,345) | $3,762 |
Restatement_of_Previously_Issu6
Restatement of Previously Issued Consolidated Financial Statements - Consolidated Statement of Cash Flows Restated (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Net income attributable to Ocwen stockholders | $60,501 | $48,909 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Other, net | 19,089 | 9,809 |
Net cash provided by operating activities | 195,782 | 405,898 |
Repayments of other borrowings | -1,652,903 | -2,989,374 |
Net cash provided by financing activities | 246,312 | 1,316,430 |
As Reported [Member] | ' | ' |
Net income attributable to Ocwen stockholders | 75,846 | 45,147 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Other, net | 21,000 | 9,614 |
Net cash provided by operating activities | 213,038 | 401,941 |
Repayments of other borrowings | -1,670,159 | -2,985,417 |
Net cash provided by financing activities | 229,056 | 1,320,387 |
Restatement Adjustment [Member] | ' | ' |
Net income attributable to Ocwen stockholders | -15,345 | 3,762 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Other, net | -1,911 | 195 |
Net cash provided by operating activities | -17,256 | 3,957 |
Repayments of other borrowings | 17,256 | -3,957 |
Net cash provided by financing activities | $17,256 | ($3,957) |
Securitization_and_Variable_In2
Securitization and Variable Interest Entities - Schedule of Cash Flows Related to Transfers Accounted for as Sales (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Transfers and Servicing [Abstract] | ' | ' |
Proceeds received from securitizations | $1,534,251 | $2,576,792 |
Servicing fees collected | 5,194 | 1,518 |
Cash flows received from and paid to securitization trusts, total | $1,539,445 | $2,578,310 |
Securitization_and_Variable_In3
Securitization and Variable Interest Entities - Narrative (Details) (USD $) | 3 Months Ended | 12 Months Ended | 3 Months Ended | ||||||
Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | |
Advance Receivable Backed Notes Series F [Member] | Advance Receivable Backed Notes Series F [Member] | Lending [Member] | HMBS - Related Borrowings [Member] | HMBS - Related Borrowings [Member] | Mortgage Servicing Rights - Amortized Costs [Member] | Mortgage Servicing Rights - Amortized Costs [Member] | |||
HECM [Member] | |||||||||
Servicing Assets at Fair Value [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Acquisitions | ' | ' | ' | ' | ' | ' | ' | $11,614,000 | $28,705,000 |
Percentage Of Loan Transferred Through Securitization 60 Days Or More Past Due | 2.90% | 2.60% | ' | ' | ' | ' | ' | ' | ' |
Secured Borrowings With Pledge Of Collateral | ' | ' | ' | ' | ' | 870,500,000 | 615,600,000 | ' | ' |
Loans held for investment - reverse mortgages, at fair value | 923,464,000 | 618,018,000 | ' | ' | ' | ' | ' | ' | ' |
Loans Pledged as Collateral | ' | ' | ' | ' | 618,000,000 | ' | ' | ' | ' |
Match Funded Liabilities | ' | ' | $31,370,000 | $33,211,000 | ' | ' | ' | ' | ' |
Securitization_and_Variable_In4
Securitization and Variable Interest Entities - Schedule of Assets That Relate to Continuing Involvement with Transferred Financial Assets with Servicing Rights and Maximum Exposure to Loss Including the Unpaid Principal Balance (Details) (USD $) | Mar. 31, 2014 | Mar. 31, 2013 | ||
In Thousands, unless otherwise specified | ||||
Transfers and Servicing [Abstract] | ' | ' | ||
Mortgage servicing rights, at amortized cost | $49,219 | $44,615 | ||
Mortgage servicing rights, at fair value | 3,079 | 3,075 | ||
Advances and match funded advances | 11,069 | 15,888 | ||
Unpaid principal balance of loans transferred | 6,497,814 | [1] | 5,641,277 | [1] |
Maximum exposure to loss | $6,561,181 | $5,704,855 | ||
[1] | The UPB of the loans transferred is the maximum exposure to loss under our standard representations and warranties obligations. |
Business_Acquisitions_Purchase
Business Acquisitions - Purchase Price Allocation (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | Feb. 15, 2013 | Feb. 15, 2013 | Feb. 15, 2013 | |||||
In Thousands, unless otherwise specified | ResCap [Member] | ResCap [Member] | ResCap [Member] | |||||||
Initial Estimate [Member] | Adjustments [Member] | |||||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | |||||
MSRs | ' | ' | $401,314 | $393,891 | $7,423 | |||||
Advances and match funded advances | ' | ' | 1,786,409 | [1] | 1,622,348 | [1] | 164,061 | [1] | ||
Deferred tax assets | ' | ' | 0 | 0 | 0 | |||||
Premises and equipment | ' | ' | 16,423 | 22,398 | -5,975 | |||||
Receivables and other assets | ' | ' | 2,989 | 2,989 | 0 | |||||
Liability for indemnification obligations | -169,235 | [2] | -192,716 | [2] | -49,500 | -49,500 | 0 | |||
Other | ' | ' | -25,125 | -24,840 | -285 | |||||
Total identifiable net assets | ' | ' | 2,132,510 | 1,967,286 | 165,224 | |||||
Goodwill | 420,201 | 420,201 | 211,419 | 204,743 | 6,676 | |||||
Total consideration | ' | ' | $2,343,929 | $2,172,029 | $171,900 | |||||
[1] | As of the acquisition date, the purchase of certain MSRs from ResCap was not complete pending the receipt of certain consents and court approvals. Subsequent to the acquisition, we obtained the required consents and approvals for a portion of these MSRs and paid an additional purchase price of $174.6 million to acquire the MSRs and related advances, including $54.2 million in 2014. The purchase price allocation has been revised to include the resulting adjustments to MSRs, advances and goodwill. | |||||||||
[2] | See Note 21 — Commitments and Contingencies for additional information. |
Business_Acquisitions_Narrativ
Business Acquisitions - Narrative (Details) (USD $) | 3 Months Ended | 0 Months Ended | 3 Months Ended | 6 Months Ended | 0 Months Ended | 0 Months Ended | |||||||||||||||||
Mar. 31, 2014 | Dec. 31, 2013 | Feb. 15, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | Feb. 15, 2013 | Feb. 15, 2013 | Feb. 15, 2013 | Feb. 15, 2013 | Mar. 29, 2013 | Mar. 31, 2013 | Mar. 30, 2013 | Mar. 31, 2013 | Mar. 31, 2013 | Mar. 30, 2013 | Apr. 02, 2013 | Jan. 31, 2014 | Dec. 31, 2013 | |||||
ResCap [Member] | ResCap [Member] | ResCap [Member] | ResCap [Member] | ResCap [Member] | ResCap [Member] | ResCap [Member] | ResCap [Member] | Correspondent One [Member] | Correspondent One [Member] | Correspondent One [Member] | Correspondent One [Member] | Correspondent One [Member] | Correspondent One [Member] | Liberty Acquisition [Member] | OSI [Member] | OSI [Member] | |||||||
Senior Secured Term Loan [Member] | Mortgage Servicing Rights [Member] | Mortgage Servicing Rights [Member] | Subservice Mortgage Servicing Rights [Member] | Unrelated Party [Member] | Altisource [Member] | Altisource [Member] | |||||||||||||||||
Freddie Mac and Ginnie Mae Loans [Member] | |||||||||||||||||||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Business Acquisition, Cost of Acquired Entity, Cash Paid | ($54,220,000) | ' | ' | ' | [1] | $2,097,821,000 | [1] | $174,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $22,000,000 | $11,000,000 | ' | ||
Business Combination, Contingent Consideration, Liability | 0 | [2] | 54,220,000 | [2] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Unpaid principal balance assets acquired | ' | ' | ' | ' | ' | ' | ' | 44,900,000,000 | 111,200,000,000 | 27,000,000,000 | ' | ' | ' | ' | ' | ' | 55,200,000 | ' | ' | ||||
Debt Instrument Net Additional Capital Deployed | ' | ' | 840,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Debt Instrument, Face Amount | ' | ' | ' | ' | ' | ' | 1,300,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Proceeds from Issuance of Debt | ' | ' | 1,200,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Business Acquisition, Percentage of Voting Interests Acquired | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | 49.00% | ' | ' | 49.00% | ' | 87.35% | 26.00% | ||||
Total consideration | ' | ' | 2,343,929,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 900,000 | 12,600,000 | ' | ' | ' | ' | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets | ' | ' | ' | ' | [1] | 2,418,554,000 | [1] | ' | ' | ' | ' | ' | ' | 26,300,000 | ' | ' | ' | ' | 31,100,000 | 20,000,000 | ' | ||
Cash | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 23,000,000 | ' | ' | ' | ' | 4,600,000 | 3,200,000 | ' | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Receivables | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,100,000 | ' | ' | ' | ' | 11,200,000 | ' | ' | ||||
Recognized Gain Loss On Changes In Fair Value Of Investment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Business Acquisition, Repayment Of Outstanding Debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 9,100,000 | ' | ' | ||||
Reverse mortgage acquired | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 60,000,000 | ' | ' | ||||
Business Combination Recognized Identifiable Assets Acquired And Liabilities Assumed, Current Assets, Loans Held For Sale | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,300,000 | ' | ' | ||||
Business Acquisition Purchase Price Allocation Warehouse Facilities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 46,300,000 | ' | ' | ||||
Mortgage Backed Security Borrowings | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,200,000 | ' | ' | ||||
Goodwill | 420,201,000 | 420,201,000 | 211,419,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,000,000 | ' | ' | ||||
Noncontrolling Interest, Ownership Percentage by Parent | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 12.65% | ' | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Mortgage Service Rights | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 9,000,000 | ' | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Mortgage Backed Securities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $7,700,000 | ' | ||||
[1] | See Note 3 — Business Acquisitions for information regarding the acquisitions of Ocwen Structured Investments, LLC and Correspondent One S.A. during the three months ended March 31, 2014 and 2013, respectively. | ||||||||||||||||||||||
[2] | See Note 3 — Business Acquisitions for additional information. |
Business_Acquisitions_PostAcqu
Business Acquisitions - Post-Acquisition Results of Operations (Details) (ResCap [Member], USD $) | 10 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2013 |
ResCap [Member] | ' |
Business Acquisition [Line Items] | ' |
Revenues | $74,853 |
Net income | $14,879 |
Business_Acquisitions_Pro_Form
Business Acquisitions - Pro Forma Results of Operations (Details) (ResCap [Member], USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2014 |
ResCap [Member] | ' |
Business Acquisition [Line Items] | ' |
Revenues | $454,003 |
Net income | $36,303 |
Business_Acquisitions_Facility
Business Acquisitions - Facility Closure Costs (Details) (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | |
Restructuring Reserve [Roll Forward] | ' | ' | |
Amortization of discount | $330 | $424 | |
Servicing [Member] | ' | ' | |
Restructuring Reserve [Roll Forward] | ' | ' | |
Additions charged to operations | 9,500 | ' | |
Lending [Member] | ' | ' | |
Restructuring Reserve [Roll Forward] | ' | ' | |
Additions charged to operations | -100 | ' | |
Corporate and Other [Member] | ' | ' | |
Restructuring Reserve [Roll Forward] | ' | ' | |
Additions charged to operations | 1,200 | ' | |
Employee termination benefits [Member] | ' | ' | |
Restructuring Reserve [Roll Forward] | ' | ' | |
Liability beginning balance | 4,816 | ' | |
Additions charged to operations | 10,584 | [1] | ' |
Amortization of discount | 0 | ' | |
Payments | 10,370 | ' | |
Liability ending balance | 5,030 | [2] | ' |
Lease termination costs [Member] | ' | ' | |
Restructuring Reserve [Roll Forward] | ' | ' | |
Liability beginning balance | 2,454 | ' | |
Additions charged to operations | 0 | [1] | ' |
Amortization of discount | 42 | ' | |
Payments | 341 | ' | |
Liability ending balance | 2,155 | [2] | ' |
Total [Member] | ' | ' | |
Restructuring Reserve [Roll Forward] | ' | ' | |
Liability beginning balance | 7,270 | ' | |
Additions charged to operations | 10,584 | [1] | ' |
Amortization of discount | 42 | ' | |
Payments | -10,711 | ' | |
Liability ending balance | $7,185 | [2] | ' |
[1] | $9.5 million was recognized in the Servicing segment, $(0.1) million was recognized in the Lending segment and the remaining $1.2 million was recognized in the Corporate Items and Other segment. Charges related to employee termination benefits are reported in Compensation and benefits expense in the unaudited Consolidated Statement of Operations. The liabilities are included in Other liabilities in the unaudited Consolidated Balance Sheet. | ||
[2] | We expect the remaining liability for employee termination benefits at March 31, 2014 to be settled in 2014. |
Sales_of_Advances_and_MSRs_Nar
Sales of Advances and MSRs - Narrative (Details) (USD $) | 3 Months Ended |
In Billions, unless otherwise specified | Mar. 31, 2013 |
Transfers and Servicing of Financial Assets [Abstract] | ' |
Unpaid Principal Balance Of Loans Related To Servicing Assets Sold | $15.90 |
Sales_of_Advances_and_MSRs_Sum
Sales of Advances and MSRs - Summary of the Assets and Liabilities Sold to HLSS (Detail) (HLSS [Member], USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2013 |
HLSS [Member] | ' |
Related Party Transaction [Line Items] | ' |
Sale of MSRs accounted for as a financing | $100,707 |
Sale of advances and match funded advances | 703,206 |
Sales price, as adjusted | 803,913 |
Amount due to (from) HLSS for post-closing adjustments at March 31 | 10,406 |
Cash received on current year sales | 814,319 |
Amount received from HLSS as settlement of post-closing adjustments outstanding at the end of the previous year | 0 |
Total cash received | $814,319 |
Fair_Value_Schedule_of_Fair_Va
Fair Value - Schedule of Fair Value Assets and Liabilities (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | ||
In Thousands, unless otherwise specified | ||||||
Financial assets: | ' | ' | ' | ' | ||
Loans held for sale, at fair value | $338,228 | $503,753 | $295,514 | $426,480 | ||
Financing liabilities: | ' | ' | ' | ' | ||
HMBS-related borrowings, at fair value | 870,462 | 615,576 | ' | ' | ||
Carrying Value [Member] | ' | ' | ' | ' | ||
Financial assets: | ' | ' | ' | ' | ||
Loans held for sale, at fair value | 383,703 | 566,660 | ' | ' | ||
Financing liabilities: | ' | ' | ' | ' | ||
Total Financing liabilities | 1,693,147 | 1,266,973 | ' | ' | ||
Other secured borrowings: | ' | ' | ' | ' | ||
Total Other secured borrowings | 1,633,999 | 1,777,669 | ' | ' | ||
MSRs: | ' | ' | ' | ' | ||
Total MSRs | 2,040,355 | 2,069,381 | ' | ' | ||
Carrying Value [Member] | Level 1 [Member] | Forward Mortgage Backed Securities Trades [Member] | ' | ' | ' | ' | ||
Derivative financial instruments: | ' | ' | ' | ' | ||
Derivative financial instruments | 699 | [1] | 6,905 | [1] | ' | ' |
Carrying Value [Member] | Level 2 [Member] | ' | ' | ' | ' | ||
Financial assets: | ' | ' | ' | ' | ||
Loans held for sale, at fair value | 338,228 | [1] | 503,753 | [1] | ' | ' |
Carrying Value [Member] | Level 2 [Member] | Interest Rate Lock Commitments [Member] | ' | ' | ' | ' | ||
Derivative financial instruments: | ' | ' | ' | ' | ||
Derivative financial instruments | 9,420 | [1] | 8,433 | [1] | ' | ' |
Carrying Value [Member] | Level 3 [Member] | ' | ' | ' | ' | ||
Financial assets: | ' | ' | ' | ' | ||
Loans held for sale, at lower of cost or fair value | 45,475 | [2] | 62,907 | [2] | ' | ' |
Loans held for investment - Reverse mortgages, at fair value | 923,464 | [1] | 618,018 | [1] | ' | ' |
Advances and match funded advances | 3,593,780 | [3] | 3,443,215 | [3] | ' | ' |
Receivables, net | 182,724 | [3] | 152,516 | [3] | ' | ' |
Financial liabilities: | ' | ' | ' | ' | ||
Match Funded Liabilities | 2,361,662 | [3] | 2,364,814 | [3] | ' | ' |
Financing liabilities: | ' | ' | ' | ' | ||
HMBS-related borrowings, at fair value | 870,462 | [1] | 615,576 | [1] | ' | ' |
Other | 822,685 | [3] | 651,397 | [3] | ' | ' |
Other secured borrowings: | ' | ' | ' | ' | ||
Senior secured term loan | 1,281,981 | [3] | 1,284,901 | [3] | ' | ' |
Other | 352,018 | [3] | 492,768 | [3] | ' | ' |
MSRs: | ' | ' | ' | ' | ||
MSRs, at fair value | 110,826 | [1] | 116,029 | [1] | ' | ' |
MSRs, at amortized cost | 1,929,529 | [3] | 1,953,352 | [3] | ' | ' |
Carrying Value [Member] | Level 3 [Member] | Interest Rate Cap [Member] | ' | ' | ' | ' | ||
Derivative financial instruments: | ' | ' | ' | ' | ||
Derivative financial instruments | 324 | [1] | 442 | [1] | ' | ' |
Fair Value [Member] | ' | ' | ' | ' | ||
Financial assets: | ' | ' | ' | ' | ||
Loans held for sale, at fair value | 383,703 | 566,660 | ' | ' | ||
Financing liabilities: | ' | ' | ' | ' | ||
Total Financing liabilities | 1,693,147 | 1,266,973 | ' | ' | ||
Other secured borrowings: | ' | ' | ' | ' | ||
Total Other secured borrowings | 1,619,061 | 1,762,876 | ' | ' | ||
MSRs: | ' | ' | ' | ' | ||
Total MSRs | 2,885,736 | 2,557,748 | ' | ' | ||
Fair Value [Member] | Level 1 [Member] | Forward Mortgage Backed Securities Trades [Member] | ' | ' | ' | ' | ||
Derivative financial instruments: | ' | ' | ' | ' | ||
Derivative financial instruments | 699 | [1] | 6,905 | [1] | ' | ' |
Fair Value [Member] | Level 2 [Member] | ' | ' | ' | ' | ||
Financial assets: | ' | ' | ' | ' | ||
Loans held for sale, at fair value | 338,228 | [1] | 503,753 | [1] | ' | ' |
Fair Value [Member] | Level 2 [Member] | Interest Rate Lock Commitments [Member] | ' | ' | ' | ' | ||
Derivative financial instruments: | ' | ' | ' | ' | ||
Derivative financial instruments | 9,420 | [1] | 8,433 | [1] | ' | ' |
Fair Value [Member] | Level 3 [Member] | ' | ' | ' | ' | ||
Financial assets: | ' | ' | ' | ' | ||
Loans held for sale, at lower of cost or fair value | 45,475 | [2] | 62,907 | [2] | ' | ' |
Loans held for investment - Reverse mortgages, at fair value | 923,464 | [1] | 618,018 | [1] | ' | ' |
Advances and match funded advances | 3,593,780 | [3] | 3,443,215 | [3] | ' | ' |
Receivables, net | 182,724 | [3] | 152,516 | [3] | ' | ' |
Financial liabilities: | ' | ' | ' | ' | ||
Match Funded Liabilities | 2,361,662 | [3] | 2,364,814 | [3] | ' | ' |
Financing liabilities: | ' | ' | ' | ' | ||
HMBS-related borrowings, at fair value | 870,462 | [1] | 615,576 | [1] | ' | ' |
Other | 822,685 | [3] | 651,397 | [3] | ' | ' |
Other secured borrowings: | ' | ' | ' | ' | ||
Senior secured term loan | 1,267,043 | [3] | 1,270,108 | [3] | ' | ' |
Other | 352,018 | [3] | 492,768 | [3] | ' | ' |
MSRs: | ' | ' | ' | ' | ||
MSRs, at fair value | ' | 116,029 | [1] | ' | ' | |
MSRs, at amortized cost | ' | 2,441,719 | [3] | ' | ' | |
Fair Value [Member] | Level 3 [Member] | Interest Rate Cap [Member] | ' | ' | ' | ' | ||
Derivative financial instruments: | ' | ' | ' | ' | ||
Derivative financial instruments | $324 | [1] | $442 | [1] | ' | ' |
[1] | Measured at fair value on a recurring basis. | |||||
[2] | Measured at fair value on a non-recurring basis. | |||||
[3] | Disclosed, but not carried, at fair value. |
Fair_Value_Reconciliation_of_L
Fair Value - Reconciliation of Level 3 Assets (Details) (USD $) | 3 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | ||
Purchases, issuances, sales and settlements: | ' | ' | ||
Transfer from loans held for sale, at fair value | $110,874 | $0 | ||
Level 3 [Member] | ' | ' | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ||
Beginning balance | 118,913 | 74,545 | ||
Purchases, issuances, sales and settlements: | ' | ' | ||
Purchases | 0 | 0 | ||
Issuances | -49,944 | 0 | ||
Transfer from loans held for sale, at fair value | 110,874 | ' | ||
Sales | 0 | 0 | ||
Settlements | -8,643 | 310 | ||
Purchases, issuances, sales and settlements, total | 52,287 | 310 | ||
Total realized and unrealized gains and (losses): | ' | ' | ||
Included in Other, net | -7,048 | [1] | -2,032 | [1] |
Included in Other comprehensive income (loss) | 0 | [1] | -6,924 | [1] |
Total realized and unrealized gains and (losses) | -7,048 | [1] | -8,956 | [1] |
Transfers in and / or out of Level 3 | 0 | 0 | ||
Ending balance | 164,152 | 65,899 | ||
Level 3 [Member] | Loans Held for Investment - Reverse Mortgages [Member] | ' | ' | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ||
Beginning balance | 618,018 | ' | ||
Purchases, issuances, sales and settlements: | ' | ' | ||
Purchases | 0 | ' | ||
Issuances | 176,658 | ' | ||
Transfer from loans held for sale, at fair value | 110,874 | ' | ||
Sales | 0 | ' | ||
Settlements | -14,029 | ' | ||
Purchases, issuances, sales and settlements, total | 273,503 | ' | ||
Total realized and unrealized gains and (losses): | ' | ' | ||
Included in Other, net | 31,943 | [1] | ' | |
Included in Other comprehensive income (loss) | 0 | [1] | ' | |
Total realized and unrealized gains and (losses) | 31,943 | [1] | ' | |
Transfers in and / or out of Level 3 | 0 | ' | ||
Ending balance | 923,464 | ' | ||
Level 3 [Member] | HMBS - Related Borrowings [Member] | ' | ' | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ||
Beginning balance | -615,576 | ' | ||
Purchases, issuances, sales and settlements: | ' | ' | ||
Purchases | 0 | ' | ||
Issuances | -226,626 | ' | ||
Transfer from loans held for sale, at fair value | 0 | ' | ||
Sales | 0 | ' | ||
Settlements | 5,386 | ' | ||
Purchases, issuances, sales and settlements, total | -221,240 | ' | ||
Total realized and unrealized gains and (losses): | ' | ' | ||
Included in Other, net | -33,646 | [1] | ' | |
Included in Other comprehensive income (loss) | 0 | [1] | ' | |
Total realized and unrealized gains and (losses) | -33,646 | [1] | ' | |
Transfers in and / or out of Level 3 | 0 | ' | ||
Ending balance | -870,462 | ' | ||
Level 3 [Member] | Derivative Financial Instruments, Assets [Member] | ' | ' | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ||
Beginning balance | 442 | -10,668 | ||
Purchases, issuances, sales and settlements: | ' | ' | ||
Purchases | 0 | 0 | ||
Issuances | 24 | 0 | ||
Transfer from loans held for sale, at fair value | 0 | ' | ||
Sales | 0 | 0 | ||
Settlements | 0 | 310 | ||
Purchases, issuances, sales and settlements, total | 24 | 310 | ||
Total realized and unrealized gains and (losses): | ' | ' | ||
Included in Other, net | -142 | [1] | -1,353 | [1] |
Included in Other comprehensive income (loss) | 0 | [1] | -6,924 | [1] |
Total realized and unrealized gains and (losses) | -142 | [1] | -8,277 | [1] |
Transfers in and / or out of Level 3 | 0 | 0 | ||
Ending balance | 324 | -18,635 | ||
Level 3 [Member] | MSRS [Member] | ' | ' | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ||
Beginning balance | 116,029 | 85,213 | ||
Purchases, issuances, sales and settlements: | ' | ' | ||
Purchases | 0 | 0 | ||
Issuances | 0 | 0 | ||
Transfer from loans held for sale, at fair value | 0 | ' | ||
Sales | 0 | 0 | ||
Settlements | 0 | 0 | ||
Purchases, issuances, sales and settlements, total | 0 | 0 | ||
Total realized and unrealized gains and (losses): | ' | ' | ||
Included in Other, net | -5,203 | [1] | -679 | [1] |
Included in Other comprehensive income (loss) | 0 | [1] | 0 | [1] |
Total realized and unrealized gains and (losses) | -5,203 | [1] | -679 | [1] |
Transfers in and / or out of Level 3 | 0 | 0 | ||
Ending balance | $110,826 | $84,534 | ||
[1] | Total losses attributable to derivative financial instruments still held at March 31, 2014 and March 31, 2013 were $0.1 million and $4.8 million, respectively. |
Fair_Value_Narrative_Details
Fair Value - Narrative (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Losses attributable to derivatives | $0.10 | $4.80 |
HMBS - Related Borrowings [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Life | '7 years 0 months 4 days | ' |
Repayment rate | 8.84% | ' |
Discount rate | 1.06% | ' |
HMBS - Related Borrowings [Member] | Minimum [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Life | '2 years 6 months 15 days | ' |
Repayment rate | 4.79% | ' |
HMBS - Related Borrowings [Member] | Maximum [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Life | '22 years 2 months 27 days | ' |
Repayment rate | 56.02% | ' |
Borrowings [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Discount rate | 5.60% | ' |
Loans Held for Investment - Reverse Mortgages [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Life | '8 years 0 months 18 days | ' |
Repayment rate | 8.84% | ' |
Discount rate | 1.63% | ' |
Loans Held for Investment - Reverse Mortgages [Member] | Minimum [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Life | '2 years 6 months 22 days | ' |
Repayment rate | 4.79% | ' |
Loans Held for Investment - Reverse Mortgages [Member] | Maximum [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Life | '22 years 10 months 10 days | ' |
Repayment rate | 56.59% | ' |
Mortgage Servicing Rights [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Prepayment rate | 13.78% | ' |
Delinquency rate | 16.59% | ' |
Discount rate | 11.67% | ' |
Mortgage Servicing Rights [Member] | Minimum [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Prepayment rate | 6.62% | ' |
Delinquency rate | 7.02% | ' |
Fair value inputs basis spread on variable rate | 0.00% | ' |
Discount rate | 9.88% | ' |
Mortgage Servicing Rights [Member] | Maximum [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Prepayment rate | 17.63% | ' |
Delinquency rate | 31.04% | ' |
Fair value inputs basis spread on variable rate | 3.50% | ' |
Discount rate | 16.46% | ' |
Fair Value Mortgage Servicing Rights [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Prepayment rate | 8.35% | ' |
Discount rate | 10.28% | ' |
Loans_Held_for_Sale_Fair_Value
Loans Held for Sale - Fair Value (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Movement In Loans Held For Sale At Fair Value [Roll Forward] | ' | ' |
Beginning balance | $503,753,000 | $426,480,000 |
Originations and purchases | 1,416,797,000 | 2,462,531,000 |
Proceeds from sales | -1,481,403,000 | -2,563,247,000 |
Transfers to loans held for investment - reverse mortgages | -110,874,000 | 0 |
Gain (loss) on sale of loans | 12,863,000 | -29,786,000 |
Other | -2,908,000 | -464,000 |
Ending balance | 338,228,000 | 295,514,000 |
Lending [Member] | Line of Credit [Member] | ' | ' |
Movement In Loans Held For Sale At Fair Value [Roll Forward] | ' | ' |
Collateral | $314,000,000 | ' |
Loans_Held_for_Sale_Lower_of_C
Loans Held for Sale - Lower of Cost or Fair Value (Details) (USD $) | 0 Months Ended | 3 Months Ended | |
Mar. 04, 2014 | Mar. 31, 2014 | Mar. 31, 2013 | |
Movement In Loans Held For Sale At Fair Value [Roll Forward] | ' | ' | ' |
Loans held for sale, at lower of cost or fair value | ' | $62,907,000 | $82,866,000 |
Purchases | ' | 959,756,000 | 53,674,000 |
Proceeds from sales | ' | -835,786,000 | -66,868,000 |
Principal payments | ' | -96,300,000 | -460,000 |
Transfers to accounts receivable | ' | -66,187,000 | 0 |
Gain on sale of loans | ' | 23,031,000 | 1,423,000 |
Increase in valuation allowance | ' | -4,163,000 | -7,269,000 |
Modifications, charge offs and other | ' | 2,217,000 | -751,000 |
Loans held for sale, at lower of cost or fair value | ' | 45,475,000 | 62,615,000 |
Loans Held for Sale, Unpaid Principal Balance | 549,400,000 | ' | ' |
Proceeds from Sale of Loans Held-for-sale | 612,300,000 | ' | ' |
HLSS [Member] | ' | ' | ' |
Movement In Loans Held For Sale At Fair Value [Roll Forward] | ' | ' | ' |
Proceeds from Sale of Loans Held-for-sale | 612,300,000 | ' | ' |
Valuation Allowance for Loans Held for Sale [Member] | ' | ' | ' |
Movement In Loans Held For Sale At Fair Value [Roll Forward] | ' | ' | ' |
Valuation allowance | ' | 36,000,000 | 21,900,000 |
Ginnie Mae [Member] | ' | ' | ' |
Movement In Loans Held For Sale At Fair Value [Roll Forward] | ' | ' | ' |
Loans held for sale, at lower of cost or fair value | ' | 6,118,000 | 42,000,000 |
FHA Buyout Loans [Member] | HLSS [Member] | ' | ' | ' |
Movement In Loans Held For Sale At Fair Value [Roll Forward] | ' | ' | ' |
Proceeds from Sale of Loans Held-for-sale | 556,400,000 | ' | ' |
Servicing Advances [Member] | HLSS [Member] | ' | ' | ' |
Movement In Loans Held For Sale At Fair Value [Roll Forward] | ' | ' | ' |
Proceeds from Sale of Loans Held-for-sale | $55,700,000 | ' | ' |
Loans_Held_for_Sale_Gain_Loss_
Loans Held for Sale - Gain (Loss) on Sale of Loans (Details) (USD $) | 3 Months Ended | |||
Mar. 31, 2014 | Mar. 31, 2013 | |||
Receivables [Abstract] | ' | ' | ||
Gain On Sale Of Loans Including Value Assigned To Msrs Retained | $54,993,000 | [1] | ($1,081,000) | [1] |
Gain Loss On Interest Rate Derivative Instruments | 986,000 | -1,237,000 | ||
Change In Fair Value Of Mortgage Loans Held For Sale | 1,800,000 | -440,000 | ||
Gain On Hedge Instruments | -13,610,000 | 10,189,000 | ||
Gains (Losses) on Sales of Other Real Estate | -182,000 | -682,000 | ||
Gain on sale of loans held for investment | 43,987,000 | 6,749,000 | ||
Acquisitions | 11,600,000 | 28,700,000 | ||
Loans Restricted For Securitization Investors Fair Value | 22,800,000 | ' | ||
Gain on Sales of Reverse Mortgage Loans | $16,100,000 | ' | ||
[1] | Includes gains of $11.6 million and $28.7 million for the three months ended March 31, 2014 and 2013, respectively, representing the value assigned to MSRs retained on sales of loans. Also includes gains of $22.8 million recorded during the three months ended March 31, 2014 on sales of repurchased loans into Ginnie Mae guaranteed securitizations. |
Advances_Schedule_of_Advance_P
Advances - Schedule of Advance Payments by Financial Institution on Foreclosed Properties (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||||
Servicing: | ' | ' | ' | ' |
Advances | $937,926 | $890,832 | $561,561 | $184,463 |
Servicing, Principal and Interest [Member] | ' | ' | ' | ' |
Servicing: | ' | ' | ' | ' |
Advances | 189,338 | 141,307 | ' | ' |
Servicing, Taxes and Insurance [Member] | ' | ' | ' | ' |
Servicing: | ' | ' | ' | ' |
Advances | 465,359 | 477,039 | ' | ' |
Servicing, Foreclosures and Bankruptcy Costs [Member] | ' | ' | ' | ' |
Servicing: | ' | ' | ' | ' |
Advances | 278,713 | 268,053 | ' | ' |
Servicing [Member] | ' | ' | ' | ' |
Servicing: | ' | ' | ' | ' |
Advances | 933,410 | 886,399 | ' | ' |
Corporate Items and Other [Member] | ' | ' | ' | ' |
Servicing: | ' | ' | ' | ' |
Advances | $4,516 | $4,433 | ' | ' |
Advances_Activity_Details
Advances - Activity (Details) (USD $) | 3 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | ||
Advances [Roll Forward] | ' | ' | ||
Advances, beginning balance | $890,832 | $184,463 | ||
Acquisitions | 98,875 | [1] | 205,365 | [1] |
Transfers to match funded advances | -10,156 | 0 | ||
Advances Payments on Behalf of Borrower, Sales | 0 | 38,313 | ||
(Collections) new advances, net | -41,625 | 210,046 | ||
Advances, ending balance | $937,926 | $561,561 | ||
[1] | Servicing advances acquired through business acquisitions and asset acquisitions, primarily in connection with the acquisition of MSRs. See Note 3 — Business Acquisitions, Note 6 — Loans Held for Sale and Note 9 — Mortgage Servicing for additional information. |
Match_Funded_Advance_Schedule_
Match Funded Advance - Schedule of Match Funded Advances (Details) (Residential Mortgage [Member], USD $) | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||||
Residential Mortgage [Member] | ' | ' | ' | ' |
Match Funded Advances [Line Items] | ' | ' | ' | ' |
Principal and interest | $1,589,396 | $1,497,649 | ' | ' |
Taxes and insurance | 847,615 | 830,113 | ' | ' |
Foreclosures, bankruptcy, real estate and other | 218,843 | 224,621 | ' | ' |
Match funded advances | $2,655,854 | $2,552,383 | $3,436,083 | $3,049,244 |
Match_Funded_Advance_Activity_
Match Funded Advance - Activity (Details) (Residential Mortgage [Member], USD $) | 3 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | ||
Residential Mortgage [Member] | ' | ' | ||
Match Funded Advances [Roll Forward] | ' | ' | ||
Beginning balance | $2,552,383 | $3,049,244 | ||
Acquisitions | 85,521 | [1] | 1,448,371 | [1] |
Transfers from advances | 10,156 | 0 | ||
Sales of advances to HLSS | 0 | -664,893 | ||
New advances (collections), net | 7,794 | -396,639 | ||
Ending balance | $2,655,854 | $3,436,083 | ||
[1] | Servicing advances acquired in connection with the acquisitions of MSRs through business acquisitions and asset acquisitions. See Note 3 — Business Acquisitions and Note 9 — Mortgage Servicing for additional information. |
Mortgage_Servicing_Schedule_of
Mortgage Servicing - Schedule of Activity Related to MSRs - Amortization Method (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Feb. 26, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Feb. 26, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | |||||||||||
Total [Member] | Total [Member] | Total [Member] | Total [Member] | Total [Member] | Total [Member] | Total [Member] | Total [Member] | Total [Member] | Total [Member] | Total [Member] | Total [Member] | Mortgage Servicing Rights [Member] | Mortgage Servicing Rights [Member] | Mortgage Servicing Rights [Member] | Mortgage Servicing Rights [Member] | OASIS Series 2014-1 [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Inputs, Level 3 [Member] | ||||||||||||||
OSI [Member] | OSI [Member] | ResCap Acquisition [Member] | ResCap Acquisition [Member] | OneWest MSR Transaction [Member] | OneWest MSR Transaction [Member] | Greenpoint MSR Transaction [Member] | Greenpoint MSR Transaction [Member] | Other [Member] | Other [Member] | OneWest MSR Transaction [Member] | Greenpoint MSR Transaction [Member] | Secured Debt [Member] | Portion at Fair Value Measurement [Member] | Portion at Fair Value Measurement [Member] | ||||||||||||||||||
Total [Member] | ||||||||||||||||||||||||||||||||
Servicing Asset at Amortized Cost [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
Mortgage Service Rights, Amortized Cost | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $2,441,719,000 | [1] | $2,774,910,000 | ||||||||||
Servicing Asset at Amortized Cost, Balance [Roll Forward] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
Beginning balance | ' | ' | 1,953,352,000 | 678,937,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
Acquisitions | ' | ' | ' | ' | 8,954,000 | [2] | 0 | [2] | 11,370,000 | [2] | 393,891,000 | [2] | 1,516,000 | [3] | 0 | [3] | 3,700,000 | [4] | 0 | [4] | 1,481,000 | 972,000 | ' | ' | ' | ' | ' | ' | ' | |||
Additions recognized on the sale of mortgage loans | ' | ' | 11,614,000 | 28,705,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
Servicing transfers and adjustments | ' | ' | -364,000 | -124,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
Amortization | ' | ' | -62,094,000 | [5] | -47,987,000 | [5] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||
Ending balance | ' | ' | 1,929,529,000 | 1,054,394,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
Mortgage servicing rights fair value | 110,826,000 | 116,029,000 | ' | 1,288,732,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
Asset Acquisition Loans Unpaid Principal Balance | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,100,000,000 | ' | ' | 948,900,000 | ' | ' | ' | |||||||||||
Asset Acquisition Advances Acquired | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 34,300,000 | 47,600,000 | ' | ' | ' | |||||||||||
Debt Instrument, Face Amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 123,600,000 | ' | ' | |||||||||||
Principal Amount Outstanding on Loans Securitized or Asset-backed Financing Arrangement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $11,800,000,000 | ' | ' | ' | ' | ' | |||||||||||
[1] | Disclosed, but not carried, at fair value. | |||||||||||||||||||||||||||||||
[2] | See Note 3 — Business Acquisitions for additional information regarding MSRs recognized in connection with business acquisitions. | |||||||||||||||||||||||||||||||
[3] | The acquired MSRs relate to mortgage loans with a UPB of $1.1 billion and related servicing advances of $34.3 million acquired in the final closing of the OneWest MSR Transaction. The OneWest MSR Transaction closed in stages, and the majority of loans were boarded onto our primary servicing platform as of December 31, 2013. | |||||||||||||||||||||||||||||||
[4] | The acquired MSRs relate to mortgage loans with a UPB of $948.9 million and related servicing advances of $47.6 million. | |||||||||||||||||||||||||||||||
[5] | In the unaudited Consolidated Statement of Operations, Amortization of mortgage servicing rights is reported net of the amortization of servicing liabilities and includes the amount of charges we recognized to increase servicing liability obligations. |
Mortgage_Servicing_Narrative_D
Mortgage Servicing - Narrative (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2013 |
In Billions, unless otherwise specified | |||
Transfers and Servicing [Abstract] | ' | ' | ' |
Unpaid Principal Balance Of Small Balance Commercial Loans Serviced | $2.50 | $2.60 | $2 |
Fair Value Disclosure, Off-balance Sheet Risks, Amount, Asset | $3.50 | $4.70 | ' |
Mortgage_Servicing_Schedule_of1
Mortgage Servicing - Schedule of Expected Amortization Expense (Details) (USD $) | Mar. 31, 2014 |
In Thousands, unless otherwise specified | |
Transfers and Servicing [Abstract] | ' |
2015 | $227,807 |
2016 | 193,589 |
2017 | 166,401 |
2018 | 143,094 |
2019 | $68,417 |
Mortgage_Servicing_Schedule_of2
Mortgage Servicing - Schedule of Activity Related to MSRs - Fair Value Method (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | ||
In Thousands, unless otherwise specified | Conventional [Member] | Conventional [Member] | Fair Value, Inputs, Level 3 [Member] | ||||
Portion at Fair Value Measurement [Member] | |||||||
Conventional [Member] | |||||||
Servicing Asset at Fair Value, Amount [Roll Forward] | ' | ' | ' | ' | ' | ||
Beginning balance | $110,826 | $116,029 | $116,029 | $85,213 | $110,826 | ||
Changes in market value assumptions | ' | ' | -3,155 | [1] | 4,650 | [1] | ' |
Realization of cash flows and other changes | ' | ' | -2,048 | [1] | -5,329 | [1] | ' |
Ending balance | $110,826 | $116,029 | ' | $84,534 | $110,826 | ||
[1] | Changes in fair value are recognized in Servicing and origination expense in the unaudited Consolidated Statement of Operations. |
Mortgage_Servicing_Schedule_of3
Mortgage Servicing - Schedule of Estimated Change in the Fair Value of Our MSRs (Details) (USD $) | Mar. 31, 2014 |
In Thousands, unless otherwise specified | |
Transfers and Servicing [Abstract] | ' |
Weighted average prepayment speeds, 10% | ($8,475) |
Weighted average prepayment speeds, 20% | -16,635 |
Discount rate (Option-adjusted spread), 10% | -4,881 |
Discount rate (Option-adjusted spread), 20% | ($9,371) |
Mortgage_Servicing_Schedule_of4
Mortgage Servicing - Schedule of Composition of Servicing and Subservicing Portfolios by Type of Property Serviced (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2013 | |||
HLSS [Member] | ' | ' | ' | |||
Schedule of Servicing and Subservicing Portfolio [Line Items] | ' | ' | ' | |||
Unpaid Principal Balance | $170,800,000,000 | $175,100,000,000 | $92,500,000,000 | |||
Residential Mortgage [Member] | ' | ' | ' | |||
Schedule of Servicing and Subservicing Portfolio [Line Items] | ' | ' | ' | |||
Servicing | 391,701,237,000 | [1] | 397,546,635,000 | [1] | 272,252,405,000 | [1] |
Subservicing | 57,869,359,000 | 67,104,697,000 | 194,819,256,000 | |||
Assets Serviced | 449,570,596,000 | 464,651,332,000 | 467,071,661,000 | |||
Commercial Real Estate [Member] | ' | ' | ' | |||
Schedule of Servicing and Subservicing Portfolio [Line Items] | ' | ' | ' | |||
Servicing | 0 | [1] | 0 | [1] | 0 | [1] |
Subservicing | 318,507,000 | 400,502,000 | 392,584,000 | |||
Assets Serviced | 318,507,000 | 400,502,000 | 392,584,000 | |||
Total [Member] | ' | ' | ' | |||
Schedule of Servicing and Subservicing Portfolio [Line Items] | ' | ' | ' | |||
Servicing | 391,701,237,000 | [1] | 397,546,635,000 | [1] | 272,252,405,000 | [1] |
Subservicing | 58,187,866,000 | 67,505,199,000 | 195,211,840,000 | |||
Assets Serviced | $449,889,103,000 | $465,051,834,000 | $467,464,245,000 | |||
[1] | Includes primary servicing UPB of $170.8 billion, $175.1 billion and $92.5 billion at March 31, 2014, December 31, 2013 and March 31, 2013, respectively, for which the Rights to MSRs have been sold to HLSS. |
Mortgage_Servicing_Schedule_of5
Mortgage Servicing - Schedule of Components of Servicing and Subservicing Fees (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Transfers and Servicing [Abstract] | ' | ' |
Servicing | $351,823 | $235,156 |
Subservicing | 33,725 | 33,866 |
Servicing and Subservicing fees, total | 385,548 | 269,022 |
Home Affordable Modification Program (HAMP) fees | 36,699 | 40,147 |
Late charges | 36,835 | 25,896 |
Loan collection fees | 8,294 | 6,382 |
Custodial accounts (float earnings) | 1,721 | 1,680 |
Other | 21,362 | 26,182 |
Fees, total | $490,459 | $369,309 |
Receivables_Schedule_of_Receiv
Receivables - Schedule of Receivables (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | ||
In Thousands, unless otherwise specified | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' | ||
Servicing | $151,738 | [1] | $107,118 | [1] |
Income taxes receivable | ' | 6,369 | ||
Due from related parties | 11,217 | [2] | 14,553 | [2] |
Other | 19,769 | [3] | 24,476 | [3] |
Receivables, total | 182,724 | 152,516 | ||
Receivables [Member] | ' | ' | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' | ||
Servicing | 175,029 | [1] | 124,537 | [1] |
Income taxes receivable | ' | 6,369 | ||
Due from related parties | 11,217 | [2] | 14,553 | [2] |
Other | 19,872 | [3] | 24,579 | [3] |
Receivables, total | 206,118 | 170,038 | ||
Allowancefor Credit Losses [Member] | ' | ' | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' | ||
Servicing | -23,291 | [1] | -17,419 | [1] |
Income taxes receivable | ' | 0 | ||
Due from related parties | 0 | [2] | 0 | [2] |
Other | -103 | [3] | -103 | [3] |
Receivables, total | ($23,394) | ($17,522) | ||
[1] | The balances at March 31, 2014 and December 31, 2013 arise from our Servicing business and primarily include reimbursable expenditures due from investors and amounts to be recovered from the custodial accounts of the trustees. The balances at March 31, 2014 and December 31, 2013 include $59.8 million and $54.0 million of receivables and $16.4 million and $14.0 million of allowances for losses, respectively, related to defaulted FHA or VA insured loans repurchased from Ginnie Mae guaranteed securitizations. | |||
[2] | See Note 19 — Related Party Transactions for additional information regarding transactions with Altisource and HLSS. | |||
[3] | Includes $13.6 million related to probable losses expected to be indemnified under the terms of the Homeward merger agreement. |
Receivables_Narrative_Detail
Receivables - Narrative (Detail) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Receivables [Abstract] | ' | ' |
Receivables Related To FHA Or VA Insured Loans | $59.80 | $54 |
Allowance For Losses Related To FHA Or VA Insured Loans | 16.4 | 14 |
Other receivables, probable losses | $13.60 | ' |
Other_Assets_Schedule_of_Other
Other Assets - Schedule of Other Assets (Details) (USD $) | Mar. 31, 2014 | Jan. 31, 2014 | Dec. 31, 2013 | ||
In Thousands, unless otherwise specified | |||||
Other Assets [Abstract] | ' | ' | ' | ||
Debt service accounts | $82,630 | [1] | ' | $129,897 | [1] |
Business Combination, Contingent Consideration, Asset | 0 | [2] | ' | 51,932 | [2] |
Prepaid lender fees and debt issuance costs, net | 32,151 | ' | 31,481 | ||
Prepaid income taxes | 25,334 | ' | 20,585 | ||
Purchase price deposit | 25,000 | [3] | 15,000 | 10,000 | [3] |
Prepaid expenses | 12,956 | ' | 16,132 | ||
Derivatives, at fair value | 10,409 | [4] | ' | 15,494 | [4] |
Investment in unconsolidated entities | 6,646 | [5] | ' | 11,771 | [5] |
Other | 33,979 | ' | 21,851 | ||
Other assets | $229,105 | ' | $309,143 | ||
[1] | Under our advance funding facilities, we are contractually required to remit collections on pledged advances to the trustee within two days of receipt. The collected funds are not applied to reduce the related match funded debt until the payment dates specified in the indenture. The balances also include amounts that have been set aside from the proceeds of our match funded advance facilities and certain of our warehouse facilities to provide for possible shortfalls in the funds available to pay certain expenses and interest. The funds related to match funded facilities are held in interest earning accounts in the name of the SPE created in connection with the facility. | ||||
[2] | As disclosed in Note 3 — Business Acquisitions, the purchase of certain MSRs and related advances from ResCap was not complete on the date of acquisition pending the receipt of certain consents and court approvals. We recorded a contingent asset effective on the date of the acquisition until we subsequently obtained the required consents and approvals for the MSRs and paid the additional purchase price. | ||||
[3] | The balance at December 31, 2013 represents an initial cash deposit that we made in connection with the agreement we entered into on December 20, 2013 to acquire MSRs and related advances from Wells Fargo Bank, N.A. This deposit along with an additional deposit of $15.0 million that we made in January 2014 will be held in escrow until the transaction closes. See Note 21 - Commitments and Contingencies for additional information. | ||||
[4] | See Note 15 — Derivative Financial Instruments and Hedging Activities for additional information regarding derivatives. | ||||
[5] | The balance at December 31, 2013 includes an investment of $6.6 million in OSI. As disclosed in Note 3 — Business Acquisitions, we increased our ownership from 26.00% to 87.35% on January 31, 2014. Effective on that date, we began including the accounts of OSI in our consolidated financial statements and eliminated our current investment in consolidation. |
Other_Assets_Narrative_Details
Other Assets - Narrative (Details) (USD $) | Mar. 31, 2014 | Jan. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Mar. 31, 2013 | Mar. 30, 2013 | ||
In Thousands, unless otherwise specified | Correspondent One [Member] | Correspondent One [Member] | Correspondent One [Member] | |||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ||
Purchase price deposit | $25,000 | [1] | $15,000 | $10,000 | [1] | ' | ' | ' |
Investments in and Advance to Affiliates, Subsidiaries, Associates, and Joint Ventures (in Dollars) | $6,646 | [2] | ' | $11,771 | [2] | $6,600 | ' | ' |
Business Acquisition, Percentage of Voting Interests Acquired | ' | ' | ' | ' | 100.00% | 49.00% | ||
[1] | The balance at December 31, 2013 represents an initial cash deposit that we made in connection with the agreement we entered into on December 20, 2013 to acquire MSRs and related advances from Wells Fargo Bank, N.A. This deposit along with an additional deposit of $15.0 million that we made in January 2014 will be held in escrow until the transaction closes. See Note 21 - Commitments and Contingencies for additional information. | |||||||
[2] | The balance at December 31, 2013 includes an investment of $6.6 million in OSI. As disclosed in Note 3 — Business Acquisitions, we increased our ownership from 26.00% to 87.35% on January 31, 2014. Effective on that date, we began including the accounts of OSI in our consolidated financial statements and eliminated our current investment in consolidation. |
Borrowings_Schedule_of_Match_F
Borrowings - Schedule of Match Funded Liabilities (Details) (USD $) | 3 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | 0 Months Ended | 3 Months Ended | 3 Months Ended | 0 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||
Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Feb. 28, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Feb. 03, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | ||||||||||||||||||||
London Interbank Offered Rate (LIBOR) [Member] | London Interbank Offered Rate (LIBOR) [Member] | Advance Receivable Backed Notes Series E [Member] | Advance Receivable Backed Notes Series E [Member] | Advance Receivable Backed Notes Series E [Member] | Advance Receivable Backed Notes Series F [Member] | Advance Receivable Backed Notes Series F [Member] | Advance Receivable Backed Notes Series F [Member] | Homeward Agency Advance Funding Trust 2012-1 [Member] | Homeward Agency Advance Funding Trust 2012-1 [Member] | Homeward Agency Advance Funding Trust 2012-1 [Member] | Class A1 Term Note [Member] | Class A1 Term Note [Member] | Class A1 Term Note [Member] | Class A1 Term Note [Member] | Class A1 Term Note [Member] | Class A1 Term Note [Member] | Class A1 Term Note [Member] | Class A2 Variable Funding Note [Member] | Class A2 Variable Funding Note [Member] | Class A2 Variable Funding Note [Member] | Class A2 Variable Funding Note [Member] | Class A2 Variable Funding Note [Member] | Class A2 Variable Funding Note [Member] | Class A2 Variable Funding Note [Member] | Class B Term Note [Member] | Class B Term Note [Member] | Class B Term Note [Member] | Class B Term Note [Member] | Class B Term Note [Member] | Class B Term Note [Member] | Class A3 Variable Funding Note [Member] | Class A3 Variable Funding Note [Member] | Class A3 Variable Funding Note [Member] | Class A3 Variable Funding Note [Member] | Class A3 Variable Funding Note [Member] | Class A3 Variable Funding Note [Member] | Match Funded Liabilties [Member] | Match Funded Liabilties [Member] | ||||||||||||||||||||||
London Interbank Offered Rate (LIBOR) [Member] | London Interbank Offered Rate (LIBOR) [Member] | London Interbank Offered Rate (LIBOR) [Member] | London Interbank Offered Rate (LIBOR) [Member] | July 15, 2014 [Member] | August 15, 2014 [Member] | September 15, 2014 [Member] | London Interbank Offered Rate (LIBOR) [Member] | July 15, 2014 [Member] | August 15, 2014 [Member] | September 15, 2014 [Member] | London Interbank Offered Rate (LIBOR) [Member] | July 15, 2014 [Member] | August 15, 2014 [Member] | September 15, 2014 [Member] | London Interbank Offered Rate (LIBOR) [Member] | July 15, 2014 [Member] | August 15, 2014 [Member] | September 15, 2014 [Member] | ||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 275.00% | ' | ' | ' | ' | ' | 2.50% | [1] | ' | ' | 3.00% | ' | ' | 3.00% | [2] | ' | ' | ' | 1.75% | [3],[4] | 200.00% | 225.00% | 250.00% | ' | ' | ' | 1.67% | [3],[5] | 191.00% | 215.00% | 238.00% | ' | ' | 4.25% | [3],[6] | 486.00% | 546.00% | 607.00% | ' | ' | 1.75% | [7] | 200.00% | 225.00% | 250.00% | ' | ' | |||||||||||||
Debt Instrument, Maturity Date | ' | ' | ' | ' | 30-Jun-16 | [8] | ' | ' | 31-Dec-15 | [8] | ' | ' | 31-Mar-14 | [2],[8] | ' | ' | ' | 31-Oct-44 | [3],[8] | ' | ' | ' | ' | ' | ' | 31-Oct-44 | [3],[8] | ' | ' | ' | ' | ' | 31-Oct-44 | [3],[8] | ' | ' | ' | ' | ' | 31-Oct-44 | [7],[8] | ' | ' | ' | ' | ' | ' | ' | ||||||||||||
Debt Instrument Amortization Date | ' | ' | ' | ' | 'June 2014 | [8] | ' | ' | 'Dec. 2014 | [8] | ' | ' | 'Mar. 2014 | [2],[8] | ' | ' | ' | 'Oct. 2014 | [3],[8] | ' | ' | ' | ' | ' | ' | 'Oct. 2014 | [3],[8] | ' | ' | ' | ' | ' | 'Oct. 2014 | [3],[8] | ' | ' | ' | ' | ' | 'Oct. 2014 | [7],[8] | ' | ' | ' | ' | ' | ' | ' | ||||||||||||
Available Borrowing Capacity | ' | ' | ' | ' | $121,742,000 | [4],[9] | ' | ' | $18,630,000 | [9] | ' | ' | $1,562,000 | [2],[9] | ' | ' | ' | $23,202,000 | [3],[9] | ' | ' | ' | ' | ' | ' | $10,954,000 | [3],[9] | ' | ' | ' | ' | ' | $647,000 | [3],[9] | ' | ' | ' | ' | ' | $11,601,000 | [7],[9] | ' | ' | ' | ' | ' | $188,338,000 | ' | ||||||||||||
Match Funded Liabilities | ' | ' | ' | ' | 353,258,000 | [4] | 417,388,000 | [4] | ' | 31,370,000 | 33,211,000 | ' | 23,438,000 | [2] | 21,019,000 | [2] | ' | ' | 976,798,000 | [3] | 1,494,628,000 | [3] | ' | ' | ' | ' | ' | 472,758,000 | [3] | 385,645,000 | [3] | ' | ' | ' | ' | 15,641,000 | [3] | 12,923,000 | [3] | ' | ' | ' | ' | 488,399,000 | [7] | 0 | [7] | ' | ' | ' | ' | ' | ' | |||||||
Transfers Accounted for as Secured Borrowings, Associated Liabilities, Carrying Amount | 2,361,662,000 | 2,364,814,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,361,662,000 | 2,364,814,000 | |||||||||||||||||||
Weighted average interest rate | 2.04% | 2.08% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||||||||||
Debt Instrument, Interest Rate, Basis for Effective Rate at Period End | ' | ' | 0.15% | 0.17% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||||||||||
Line of Credit Facility, Increase (Decrease) to Borrowing Capacity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -500,000,000 | ' | ' | ' | ' | ' | ' | 100,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1,000,000,000 | ' | ' | ' | ' | ' | ' | $500,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||||||||||
[1] | 1-Month LIBOR (1ML) was 0.15% and 0.17% at March 31, 2014 and December 31, 2013, respectively. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[2] | Advance facility assumed in the Homeward Acquisition. This facility was terminated on April 16, 2014, and the advances pledged to the facility were transferred to another facility. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[3] | These notes were issued in connection with the OneWest MSR Transaction. On February 3, 2014, the maximum borrowing capacity on the 2013-VF2 notes was increased by $100.0 million to a total of $500.0 million. On March 17, 2014, the maximum borrowing capacity under the 2013-VF1 note declined by $500.0 million to a total of $1.0 billion. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[4] | The interest margin on these notes increases to 200 bps on July 15, 2014, to 225 bps on August 15, 2014 and 250 bps on September 15, 2014. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[5] | The interest margin on these notes increases to 191 bps on July 15, 2014, to 215 bps on August 15, 2014 and 238 bps on September 15, 2014. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[6] | The interest margin on these notes increases to 486 bps on July 15, 2014, to 546 bps on August 15, 2014 and 607 bps on September 15, 2014. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[7] | This note was issued on March 17, 2014 with a maximum borrowing capacity of $500.0 million. The interest margin on this note increases to 200 bps on July 15, 2014, to 225 bps on August 15, 2014 and 250 bps on September 15, 2014. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[8] | The amortization date of our facilities 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. The maturity date is the date on which all outstanding balances must be repaid. In two advance facilities, there are multiple notes outstanding. For each note, after the amortization date, all collections that represent the repayment of advances pledged to the facility must be applied to reduce the balance of the note outstanding, and any new advances are ineligible to be financed. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[9] | Borrowing capacity is available to us provided that we have additional eligible collateral to pledge. Collateral may only be pledged to one facility. At March 31, 2014, none of the available borrowing capacity could be used based on the amount of eligible collateral that had been pledged. |
Borrowings_Financing_Liabiliti
Borrowings - Financing Liabilities (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Feb. 26, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | ||||
Financing Liabilities [Member] | Financing Liabilities [Member] | OASIS Series 2014-1 [Member] | Servicing [Member] | Servicing [Member] | Servicing [Member] | Servicing [Member] | Servicing [Member] | Servicing [Member] | Servicing [Member] | Servicing [Member] | Servicing [Member] | Servicing [Member] | Lending [Member] | Lending [Member] | Lending [Member] | Lending [Member] | Lending [Member] | Lending [Member] | Lending [Member] | Lending [Member] | |||||||
Secured Debt [Member] | Financing Liabilities [Member] | Financing Liabilities [Member] | Secured Debt [Member] | Secured Debt [Member] | Financing Liability Mortgage Servicing Rates Pledged 1 [Member] | Financing Liability Mortgage Servicing Rates Pledged 1 [Member] | OASIS Series 2014-1 [Member] | OASIS Series 2014-1 [Member] | Financing Liability Advances Pledged [Member] | Financing Liability Advances Pledged [Member] | Financing Liabilities [Member] | Financing Liabilities [Member] | Secured Debt [Member] | Secured Debt [Member] | Financing Liability Mortgage Servicing Rights Pledged 2 [Member] | Financing Liability Mortgage Servicing Rights Pledged 2 [Member] | HMBS - Related Borrowings [Member] | HMBS - Related Borrowings [Member] | |||||||||
Financing Liabilities [Member] | Financing Liabilities [Member] | Financing Liabilities [Member] | Financing Liabilities [Member] | Financing Liabilities [Member] | Financing Liabilities [Member] | Financing Liabilities [Member] | Financing Liabilities [Member] | Financing Liabilities [Member] | Financing Liabilities [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Financing liabilities | $1,693,147,000 | $1,266,973,000 | $1,693,147,000 | $1,266,973,000 | ' | $812,483,000 | $633,804,000 | $1,287,434,000 | $1,323,286,000 | $634,399,000 | $633,804,000 | $121,352,000 | [1] | $0 | $56,732,000 | [2] | $0 | $880,664,000 | $633,169,000 | $347,147,000 | $455,020,000 | $10,202,000 | $17,593,000 | $870,462,000 | [3] | $615,576,000 | [3] |
Debt Instrument, Face Amount | ' | ' | ' | ' | $123,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
[1] | oteholders are entitled to receive a monthly payment amount equal to the sum of: a) the designated servicing fee amount (21 basis points of the UPB of the reference pool of Freddie Mac mortgages); b) any termination payment amounts; c) any excess refinance amounts; and d) the note redemption amounts, each as defined in the indenture supplement for the Notes. The Notes have a final stated maturity of February 2028. We accounted for this transaction as a financing. Monthly amortization of the liability is estimated using the proportion of monthly projected service fees on the underlying MSRs as a percentage of lifetime projected fees, adjusted for the term of the security. | ||||||||||||||||||||||||||
[2] | On April 17, 2014, the maturity date of this facility was extended to April 16, 2015. | ||||||||||||||||||||||||||
[3] | Represents amounts due to the holders of beneficial interests in Ginnie Mae guaranteed HMBS. The beneficial interests have no maturity dates, and the borrowings mature as the related loans are repaid. See Note 2 — Securitizations and Variable Interest Entities for additional information. |
Borrowings_Secured_Borrowings_
Borrowings - Secured Borrowings (Details) (USD $) | 3 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | ||||||||||||||||||||||||||||||||||
Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | |
Securities Sold Under Agreement To Repurchase [Member] | Participation Agreement [Member] | Minimum [Member] | Maximum [Member] | Other Secured Borrowings [Member] | Other Secured Borrowings [Member] | Other Secured Borrowings [Member] | Other Secured Borrowings [Member] | Other Secured Borrowings [Member] | Other Secured Borrowings [Member] | Other Secured Borrowings [Member] | Other Secured Borrowings [Member] | Other Secured Borrowings [Member] | Other Secured Borrowings [Member] | Other Secured Borrowings [Member] | Other Secured Borrowings [Member] | Other Secured Borrowings [Member] | Other Secured Borrowings [Member] | Other Secured Borrowings [Member] | Other Secured Borrowings [Member] | Other Secured Borrowings [Member] | Other Secured Borrowings [Member] | Other Secured Borrowings [Member] | Other Secured Borrowings [Member] | Other Secured Borrowings [Member] | Other Secured Borrowings [Member] | Other Secured Borrowings [Member] | Other Secured Borrowings [Member] | Other Secured Borrowings [Member] | Other Secured Borrowings [Member] | Other Secured Borrowings [Member] | Other Secured Borrowings [Member] | Other Secured Borrowings [Member] | Other Secured Borrowings [Member] | Other Secured Borrowings [Member] | Other Secured Borrowings [Member] | |||
Participation Agreement [Member] | Participation Agreement [Member] | Servicing [Member] | Servicing [Member] | Servicing [Member] | Servicing [Member] | Servicing [Member] | Servicing [Member] | Servicing [Member] | Servicing [Member] | Servicing [Member] | Servicing [Member] | Servicing [Member] | Servicing [Member] | Lending [Member] | Lending [Member] | Lending [Member] | Lending [Member] | Lending [Member] | Lending [Member] | Lending [Member] | Lending [Member] | Lending [Member] | Lending [Member] | Lending [Member] | Lending [Member] | Lending [Member] | Lending [Member] | Corporate Items And Other [Member] | Corporate Items And Other [Member] | Corporate Items And Other [Member] | Corporate Items And Other [Member] | |||||||
Senior Secured Term Loan 2 [Member] | Senior Secured Term Loan 2 [Member] | Senior Secured Term Loan 2 [Member] | Senior Secured Term Loan 2 [Member] | Senior Secured Term Loan 2 [Member] | Senior Secured Term Loan 2 [Member] | Promissory Note [Member] | Promissory Note [Member] | Repurchase Agreement [Member] | Repurchase Agreement [Member] | Master Repurchase Agreement [Member] | Master Repurchase Agreement [Member] | Master Repurchase Agreement [Member] | Master Repurchase Agreement [Member] | Master Repurchase Agreement [Member] | Master Repurchase Agreement [Member] | Master Repurchase Agreement [Member] | Master Repurchase Agreement [Member] | Master Repurchase Agreement [Member] | Master Repurchase Agreement [Member] | Participation Agreement [Member] | Participation Agreement [Member] | Securities Sold Under Agreement To Repurchase [Member] | Securities Sold Under Agreement To Repurchase [Member] | Total Servicing Lines Of Credit [Member] | Total Servicing Lines Of Credit [Member] | |||||||||||||
Option 1 [Member] | Option 1 B [Member] | Option 1 C [Member] | Option 2 [Member] | April 2014 [Member] | April 2014 [Member] | July 2014 - 1 [Member] | July 2014 - 1 [Member] | September 2014 [Member] | September 2014 [Member] | July 2014 - 2 [Member] | July 2014 - 2 [Member] | July 2014 - 3 [Member] | July 2014 - 3 [Member] | |||||||||||||||||||||||||
Line of Credit Facility [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Unused Borrowing Capacity, Amount | ' | ' | ' | ' | ' | ' | $621,928,000 | ' | $0 | ' | $0 | ' | ' | ' | ' | ' | $0 | ' | $0 | ' | $621,928,000 | ' | $170,261,000 | ' | $90,201,000 | ' | $245,092,000 | ' | $72,894,000 | ' | $43,480,000 | ' | $0 | ' | $0 | ' | $621,928,000 | ' |
Financing liabilities | 1,693,147,000 | 1,266,973,000 | ' | ' | ' | ' | ' | ' | 1,287,434,000 | 1,323,286,000 | 1,287,000,000 | 1,290,250,000 | ' | ' | ' | ' | 0 | 15,529,000 | 434,000 | 17,507,000 | 347,147,000 | 455,020,000 | 129,739,000 | 105,659,000 | 59,799,000 | 91,990,000 | 54,908,000 | 89,836,000 | 27,106,000 | 51,975,000 | 16,520,000 | 34,292,000 | 59,075,000 | 81,268,000 | 4,437,000 | 4,712,000 | 1,639,018,000 | 1,783,018,000 |
Debt Instrument, Unamortized Discount | ' | ' | ' | ' | ' | ' | -5,019,000 | -5,349,000 | ' | ' | -6,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long-term Debt | ' | ' | ' | ' | ' | ' | 1,633,999,000 | 1,777,669,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt, Weighted Average Interest Rate | ' | ' | ' | ' | ' | ' | 5.00% | 4.86% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Face Amount | ' | ' | 23,900,000 | ' | ' | ' | ' | ' | ' | ' | 1,300,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Line of Credit Facility, Collateral | ' | ' | ' | '1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Periodic Payment Terms, Balloon Payment to be Paid | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Mandatory Principal Repayment of Net Cash Proceeds from Asset Sale, Period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '180 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Description of Variable Rate Basis | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'the prime rate in effect on such day | 'the federal funds rate in effect on such day | 'the one-month Eurodollar rate (1-Month LIBOR) | 'the one month Eurodollar rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Basis Spread on Variable Rate | 275.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.50% | 2.75% | 3.75% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument Interest Rate At Index Floor Rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2.25% | 1.25% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Line of Credit Facility, Maximum Borrowing Capacity | ' | ' | ' | ' | $50,000,000 | $90,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Borrowings_Covenants_Details
Borrowings - Covenants (Details) (USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Mar. 31, 2014 |
Debt Disclosure [Abstract] | ' |
Debt Instrument, Covenant Compliance, Consolidated Tangible Net Worth | $630 |
Debt Instrument, Covenant Compliance, Percent of Quarterly Net Income | 65.00% |
Debt Instrument, Covenant Compliance, Consolidated Tangible Net Worth at Period End | $913.60 |
Other_Liabilities_Schedule_of_
Other Liabilities - Schedule of Other Liabilities (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | ||
In Thousands, unless otherwise specified | ||||
Other Liabilities Disclosure [Abstract] | ' | ' | ||
Liability for indemnification obligations | $169,235 | [1] | $192,716 | [1] |
Accrued expenses | 97,156 | 108,870 | ||
Due to related parties | 73,819 | [2] | 77,997 | [2] |
Foreclosure Liability | 66,948 | [1] | 66,948 | [1] |
Additional purchase price due seller - ResCap Acquisition | 0 | [3] | 54,220 | [3] |
Due To Servicing and Subservicing Investors | 44,666 | 33,501 | ||
Checks Held For Escheat | 23,283 | 24,392 | ||
Liability For Uncertain Tax Positions | 28,103 | 27,273 | ||
Other | 57,405 | 58,678 | ||
Other Liabilities | $560,615 | $644,595 | ||
[1] | See Note 21 — Commitments and Contingencies for additional information. | |||
[2] | See Note 19 — Related Party Transactions for additional information. | |||
[3] | See Note 3 — Business Acquisitions for additional information. |
Equity_Narrative_Details
Equity - Narrative (Details) (USD $) | 1 Months Ended | 3 Months Ended | 5 Months Ended |
In Millions, except Share data, unless otherwise specified | Oct. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 |
Equity [Abstract] | ' | ' | ' |
Stock Repurchase Program, Authorized Amount | $500 | ' | ' |
Repurchase of common stock (in shares) | ' | 60,000 | 1,185,707 |
Stock Redeemed or Called During Period, Value | ' | $2.30 | $62.30 |
Equity_Details_Table_1
Equity (Details) - (Table 1) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Equity [Abstract] | ' | ' |
Unrealized losses on cash flow hedges | $9,418 | $10,026 |
Other | 124 | 125 |
Accumulated Other Comprehensive Income (Loss), Net of Tax | $9,542 | $10,151 |
Derivative_Financial_Instrumen2
Derivative Financial Instruments and Hedging Activities - Schedule of Changes in Notional Balance of Holdings of Derivatives (Details) (USD $) | 3 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Dec. 31, 2013 | ||
Fair value of derivative assets (liabilities) at: | ' | ' | ||
Derivative, Fair Value, Net | $10,409 | [1] | $15,494 | [1] |
Interest Rate Lock Commitments [Member] | ' | ' | ||
Derivative Notional Balance [Roll Forward] | ' | ' | ||
Notional Amount, beginning balance | 751,436 | ' | ||
Derivative Additions | 1,220,165 | ' | ||
Amortization Of Derivative | 94,571 | ' | ||
Derivative Maturities | -1,134,684 | ' | ||
Derivative Terminations | -310,295 | ' | ||
Notional Amount, ending balance | 621,193 | ' | ||
Fair value of derivative assets (liabilities) at: | ' | ' | ||
Derivative, Fair Value, Net | 9,420 | 8,433 | ||
Derivative Maturity Period | 'April 2014 - July 2014 | ' | ||
Forward Mortgage Backed Securities Trades [Member] | ' | ' | ||
Derivative Notional Balance [Roll Forward] | ' | ' | ||
Notional Amount, beginning balance | 950,648 | ' | ||
Derivative Additions | 749,786 | ' | ||
Amortization Of Derivative | 0 | ' | ||
Derivative Maturities | -438,509 | ' | ||
Derivative Terminations | -333,877 | ' | ||
Notional Amount, ending balance | 928,048 | ' | ||
Fair value of derivative assets (liabilities) at: | ' | ' | ||
Derivative, Fair Value, Net | 699 | 6,905 | ||
Derivative Maturity Period | 'April 2014 - June 2014 | ' | ||
Interest Rate Cap [Member] | ' | ' | ||
Derivative Notional Balance [Roll Forward] | ' | ' | ||
Notional Amount, beginning balance | 1,868,000 | ' | ||
Derivative Additions | 100,000 | ' | ||
Amortization Of Derivative | -112,000 | ' | ||
Derivative Maturities | 0 | ' | ||
Derivative Terminations | 0 | ' | ||
Notional Amount, ending balance | 1,856,000 | ' | ||
Fair value of derivative assets (liabilities) at: | ' | ' | ||
Derivative, Fair Value, Net | $324 | $442 | ||
Derivative Maturity Period | 'Nov. 2016 | ' | ||
[1] | See Note 15 — Derivative Financial Instruments and Hedging Activities for additional information regarding derivatives. |
Derivative_Financial_Instrumen3
Derivative Financial Instruments and Hedging Activities - Schedule of Changes in the Losses on Cash Flow Hedges Included in AOCL (Details) (USD $) | 3 Months Ended | 3 Months Ended | 3 Months Ended | ||||||||||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | ||||
Gain On Loans Held For Sale Net [Member] | Gain On Loans Held For Sale Net [Member] | Interest Rate Cap [Member] | Interest Rate Cap [Member] | Interest Rate Cap [Member] | Interest Rate Cap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | ||||||
IRLCs [Member] | IRLCs [Member] | Other Net [Member] | Other Net [Member] | Gain On Loans Held For Sale Net [Member] | Gain On Loans Held For Sale Net [Member] | ||||||||
Not Designated as Hedging Instrument [Member] | Not Designated as Hedging Instrument [Member] | Forward MBS Trades [Member] | Forward MBS Trades [Member] | ||||||||||
Not Designated as Hedging Instrument [Member] | |||||||||||||
Hedge the effect of changes in interest rates on interest expense on borrowings | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Expiration Date | ' | 'April 2014 - July 2014 | ' | ' | ' | 'Nov. 2016 | ' | 'April 2014 - June 2014 | ' | ||||
Notional Amount | ' | ' | $621,193 | $1,856,000 | $1,868,000 | ' | $1,856,000 | ' | $928,048 | ||||
Interest Rate Swaps Not Designated as Hedges | 10,443 | [1] | 9,420 | [1] | ' | ' | ' | 324 | [1] | ' | 699 | [1] | ' |
Gains / (Losses) | ($12,765) | $986 | ' | ' | ' | ($141) | ' | ($13,610) | ' | ||||
Consolidated Statement of Operations Caption | ' | 'Gain on loans held for sale, net | ' | ' | ' | 'Other, net | ' | 'Gain on loans held for sale, net | ' | ||||
[1] | Derivatives are reported at fair value in Receivables, Other assets and Other liabilities on our unaudited Consolidated Balance Sheet. |
Derivative_Financial_Instrumen4
Derivative Financial Instruments and Hedging Activities - Narrative (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' | ' |
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, before Tax | $10 | $16.10 |
Other Comprehensive Income (Loss), Tax | $0.60 | $6.10 |
Derivative_Financial_Instrumen5
Derivative Financial Instruments and Hedging Activities - Accumulated Other Comprehensive Loss (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ' | ' |
Beginning balance | $10,151 | ' |
Other | 1 | 39 |
Ending balance | 9,542 | ' |
Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member] | ' | ' |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ' | ' |
Beginning balance | -10,151 | -6,441 |
Additional net losses on cash flow hedges | 0 | 6,924 |
Ineffectiveness of cash flow hedges reclassified to earnings | 0 | -657 |
Losses on terminated hedging relationships amortized to earnings | -779 | 0 |
Net increase (decrease) in accumulated losses on cash flow hedges | -779 | 6,267 |
(Increase) decrease in deferred taxes on accumulated losses on cash flow hedges | 171 | -2,548 |
Increase (decrease) in accumulated losses on cash flow hedges, net of taxes | -608 | 3,719 |
Other | -1 | -40 |
Ending balance | $9,542 | $10,120 |
Derivative_Financial_Instrumen6
Derivative Financial Instruments and Hedging Activities - Schedule of Statements of Operations Related to Derivative Financial Instruments (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' | ' |
Losses on economic hedges | ($141) | ($5,079) |
Ineffectiveness of cash flow hedges | 0 | -657 |
Write-off of losses in AOCL for a discontinued hedge relationship | -779 | 0 |
Loss on derivatives | ($920) | ($5,736) |
Interest_Expense_Schedule_of_C
Interest Expense - Schedule of Components of Interest Expense (Details) (USD $) | 3 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | ||
Debt securities: | ' | ' | ||
Interest expense | $139,873 | $89,459 | ||
Match Funded Liabilties [Member] | ' | ' | ||
Debt securities: | ' | ' | ||
Interest expense | 16,318 | 30,351 | ||
Financing Liabilities [Member] | ' | ' | ||
Debt securities: | ' | ' | ||
Interest expense | 100,230 | [1],[2] | 40,612 | [1],[2] |
Other Secured Borrowings [Member] | ' | ' | ||
Debt securities: | ' | ' | ||
Interest expense | 21,284 | 15,954 | ||
Other [Member] | ' | ' | ||
Debt securities: | ' | ' | ||
Interest expense | 2,041 | 2,542 | ||
HLSS [Member] | ' | ' | ||
Debt securities: | ' | ' | ||
Financing Interest Expense | $98,996 | $40,583 | ||
[1] | (1)Includes interest expense of $99.0 million and $40.6 million during the three months ended March 31, 2014 and 2013, respectively, related to financing liabilities recorded in connection with the HLSS Transactions as indicated in the table below. As discussed in Note 1A — Restatement of Previously Issued Consolidated Financial Statements , we are restating our previously issued unaudited Consolidated Financial Statements as of March 31, 2014 and for the reported periods to correct an error in applying the interest method to financing liabilities in connection with Rights to MSRs sold to HLSS. Interest expense on the HLSS Transaction financing liabilities for the three months ended March 31, 2014 and 2013 has been restated.2014 2013Servicing fees collected on behalf of HLSS$189,157 $102,258Less: Subservicing fee retained by Ocwen90,161 47,082Net servicing fees remitted to HLSS98,996 55,176Less: Reduction in financing liability— 14,593Interest expense on HLSS financing liability$98,996$40,583 | |||
[2] | Interest expense that we expect to be paid on the HMBS-related borrowings is included with net fair value gains in Other revenues. See Note 2 — Securitizations and Variable Interest Entities for additional information. |
Interest_Expense_Schedule_of_R
Interest Expense - Schedule of Related Party Interest Expense (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Schedule of Interest Expense [Line Items] | ' | ' |
Servicing fees collected on behalf of HLSS | ($490,459) | ($369,309) |
HLSS [Member] | ' | ' |
Schedule of Interest Expense [Line Items] | ' | ' |
Servicing fees collected on behalf of HLSS | 189,157 | 102,258 |
Less: Subservicing fee retained by Ocwen | 90,161 | 47,082 |
Net servicing fees remitted to HLSS | 98,996 | 55,176 |
Less: Reduction in financing liability | 0 | 14,593 |
Interest expense on HLSS financing liability | $98,996 | $40,583 |
Basic_and_Diluted_Earnings_per2
Basic and Diluted Earnings per Share - Schedule of Basic EPS to Diluted EPS (Details) (USD $) | 3 Months Ended | |||
Mar. 31, 2014 | Mar. 31, 2013 | |||
Basic EPS: | ' | ' | ||
Net income attributable to Ocwen common stockholders | $59,504,000 | $46,338,000 | ||
Weighted average shares of common stock (in Shares) | 135,227,067 | 135,638,567 | ||
Basic EPS (usd per share) | $0.44 | $0.34 | ||
Diluted EPS: | ' | ' | ||
Net income attributable to Ocwen common stockholders | 59,504,000 | 46,338,000 | ||
Preferred stock dividends | 997,000 | [1] | 0 | [1] |
Adjusted net income attributable to Ocwen | 60,501,000 | 46,338,000 | ||
Effect of dilutive elements: | ' | ' | ||
Dilutive weighted average shares of common stock (in Shares) | 141,089,455 | 139,559,157 | ||
Diluted EPS (usd per share) | $0.43 | $0.33 | ||
Market-based [Member] | ' | ' | ||
Stock options excluded from the computation of diluted EPS: | ' | ' | ||
Anti-dilutive Securities (in Shares) | 547,500 | [2] | 1,535,000 | [2] |
Preferred shares [Member] | ' | ' | ||
Effect of dilutive elements: | ' | ' | ||
Dilutive Securities | 1,950,298 | [1] | 0 | [1] |
Stock options [Member] | ' | ' | ||
Effect of dilutive elements: | ' | ' | ||
Dilutive Securities | 3,908,333 | 3,902,390 | ||
Common stock awards [Member] | ' | ' | ||
Effect of dilutive elements: | ' | ' | ||
Dilutive Securities | $3,757 | $18,200 | ||
[1] | The effect of our Preferred Shares on diluted EPS is computed using the if-converted method. For purposes of computing diluted EPS, we assume the conversion of the Preferred Shares into shares of common stock unless the effect is anti-dilutive. Conversion of the Preferred Shares has not been assumed for the three months ended March 31, 2013 because the effect would have been antidilutive. | |||
[2] | Shares that are issuable upon the achievement of certain performance criteria related to Ocwen’s stock price and an annualized rate of return to investors. |
Business_Segment_Reporting_Sch
Business Segment Reporting - Schedule of Segment Reporting Information (Details) (USD $) | 3 Months Ended | ||||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | ||
Results of Operations | ' | ' | ' | ||
Operating expenses | $349,194 | $243,526 | ' | ||
Other income (expense): | ' | ' | ' | ||
Interest expense | -139,873 | -89,459 | ' | ||
Income before income taxes | 71,703 | 55,292 | ' | ||
Total Assets | ' | ' | ' | ||
Total assets | 8,186,351 | ' | 7,927,003 | ||
Servicing [Member] | ' | ' | ' | ||
Results of Operations | ' | ' | ' | ||
Revenue | 520,823 | 376,083 | ' | ||
Operating expenses | 307,933 | [1] | 211,504 | [1] | ' |
Income (loss) from operations | 212,890 | 164,579 | ' | ||
Other income (expense): | ' | ' | ' | ||
Interest income | 439 | -614 | ' | ||
Interest expense | -136,386 | -86,503 | ' | ||
Other | -320 | -25,988 | ' | ||
Other income (expense), net | -136,267 | -113,105 | ' | ||
Income before income taxes | 76,623 | 51,474 | ' | ||
Total Assets | ' | ' | ' | ||
Total assets | 6,333,097 | 5,997,149 | 6,295,976 | ||
Lending [Member] | ' | ' | ' | ||
Results of Operations | ' | ' | ' | ||
Revenue | 28,767 | 13,908 | ' | ||
Operating expenses | 31,464 | [1] | 11,098 | [1] | ' |
Income (loss) from operations | -2,697 | 2,810 | ' | ||
Other income (expense): | ' | ' | ' | ||
Interest income | 4,009 | 4,780 | ' | ||
Interest expense | -3,451 | -2,829 | ' | ||
Other | 2,718 | 267 | ' | ||
Other income (expense), net | 3,276 | 2,218 | ' | ||
Income before income taxes | 579 | 5,028 | ' | ||
Total Assets | ' | ' | ' | ||
Total assets | 1,326,114 | 356,668 | 1,195,812 | ||
Corporate Items and Other [Member] | ' | ' | ' | ||
Results of Operations | ' | ' | ' | ||
Revenue | 1,711 | 16,713 | ' | ||
Operating expenses | 9,837 | [1] | 20,969 | [1] | ' |
Income (loss) from operations | -8,126 | -4,256 | ' | ||
Other income (expense): | ' | ' | ' | ||
Interest income | 879 | 1,020 | ' | ||
Interest expense | -36 | -127 | ' | ||
Other | 1,784 | 2,153 | ' | ||
Other income (expense), net | 2,627 | 3,046 | ' | ||
Income before income taxes | -5,499 | -1,210 | ' | ||
Total Assets | ' | ' | ' | ||
Total assets | 527,140 | 1,083,737 | 435,215 | ||
Corporate Eliminations [Member] | ' | ' | ' | ||
Results of Operations | ' | ' | ' | ||
Revenue | -40 | -45 | ' | ||
Operating expenses | -40 | [1] | -45 | [1] | ' |
Income (loss) from operations | 0 | 0 | ' | ||
Other income (expense): | ' | ' | ' | ||
Interest income | 0 | 0 | ' | ||
Interest expense | 0 | 0 | ' | ||
Other | 0 | 0 | ' | ||
Other income (expense), net | 0 | 0 | ' | ||
Income before income taxes | 0 | 0 | ' | ||
Total Assets | ' | ' | ' | ||
Total assets | 0 | 0 | 0 | ||
Business Segments Consolidated [Member] | ' | ' | ' | ||
Results of Operations | ' | ' | ' | ||
Revenue | 551,261 | 406,659 | ' | ||
Operating expenses | 349,194 | [1] | 243,526 | [1] | ' |
Income (loss) from operations | 202,067 | 163,133 | ' | ||
Other income (expense): | ' | ' | ' | ||
Interest income | 5,327 | 5,186 | ' | ||
Interest expense | -139,873 | -89,459 | ' | ||
Other | 4,182 | -23,568 | ' | ||
Other income (expense), net | -130,364 | -107,841 | ' | ||
Income before income taxes | 71,703 | 55,292 | ' | ||
Total Assets | ' | ' | ' | ||
Total assets | $8,186,351 | $7,437,554 | $7,927,003 | ||
[1] | Depreciation and amortization expense are as follows: Servicing Lending Corporate Items and Other Business Segments ConsolidatedFor the three months ended March 31, 2014: Depreciation expense$2,820 $105 $2,615 $5,540Amortization of mortgage servicing rights61,779 115 200 62,094Amortization of debt discount330 — — 330Amortization of debt issuance costs – SSTL1,087 — — 1,087 For the three months ended March 31, 2013: Depreciation expense$2,699 $234 $1,580 $4,513Amortization of mortgage servicing rights47,883 — — 47,883Amortization of debt discount424 — — 424Amortization of debt issuance costs – SSTL894 — — 894 |
Business_Segment_Reporting_Sch1
Business Segment Reporting - Schedule of Depreciation and Amortization by Segment (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Segment Reporting Information [Line Items] | ' | ' |
Depreciation expense | $5,540 | $4,513 |
Amortization of MSRs | 62,094 | 47,883 |
Amortization of debt discount | 330 | 424 |
Amortization of debt issuance costs – senior secured term loan | 1,087 | 894 |
Servicing [Member] | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Depreciation expense | 2,820 | 2,699 |
Amortization of MSRs | 61,779 | 47,883 |
Amortization of debt discount | 330 | 424 |
Amortization of debt issuance costs – senior secured term loan | 1,087 | 894 |
Lending [Member] | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Depreciation expense | 105 | 234 |
Amortization of MSRs | 115 | 0 |
Amortization of debt discount | 0 | 0 |
Amortization of debt issuance costs – senior secured term loan | 0 | 0 |
Corporate Items and Other [Member] | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Depreciation expense | 2,615 | 1,580 |
Amortization of MSRs | 200 | 0 |
Amortization of debt discount | 0 | 0 |
Amortization of debt issuance costs – senior secured term loan | $0 | $0 |
Related_Party_Transactions_Nar
Related Party Transactions - Narrative (Details) (USD $) | 0 Months Ended | 3 Months Ended | |
In Millions, except Share data, unless otherwise specified | Mar. 04, 2014 | Mar. 31, 2014 | Feb. 04, 2014 |
Related Party Transaction [Line Items] | ' | ' | ' |
Unpaid Principal Balance of Refinanced Loans, Threshold for Amendment, Percentage | ' | ' | 0.50% |
Debt Instrument, Basis Spread on Variable Rate | ' | 275.00% | ' |
Proceeds from Sale of Loans Held-for-sale | $612.30 | ' | ' |
Loans Held for Sale, Unpaid Principal Balance | 549.4 | ' | ' |
HLSS [Member] | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Proceeds from Sale of Loans Held-for-sale | 612.3 | ' | ' |
Executive Chairman of the Board of Directors Chairman [Member] | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number (in Shares) | ' | 4,620,498 | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number (in Shares) | ' | 2,845,498 | ' |
Executive Chairman of the Board of Directors Chairman [Member] | Ocwen [Member] | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Related Party Ownership Interest in Parent Company and Subsidiaries, Percentage | ' | 13.00% | ' |
Executive Chairman of the Board of Directors Chairman [Member] | Altisource [Member] | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Related Party Ownership Interest in Parent Company and Subsidiaries, Percentage | ' | 27.00% | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number (in Shares) | ' | 873,501 | ' |
Executive Chairman of the Board of Directors Chairman [Member] | HLSS [Member] | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Related Party Ownership Interest in Parent Company and Subsidiaries, Percentage | ' | 1.00% | ' |
Executive Chairman of the Board of Directors Chairman [Member] | Altisource Asset Management Corporation [Member] | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Ownership Percentage By Related Party | ' | 25.00% | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number (in Shares) | ' | 87,350 | ' |
Executive Chairman of the Board of Directors Chairman [Member] | Altisource Residential Lp [Member] | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Ownership Percentage By Related Party | ' | 4.00% | ' |
FHA Buyout Loans [Member] | HLSS [Member] | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Proceeds from Sale of Loans Held-for-sale | 556.4 | ' | ' |
Servicing Advances [Member] | HLSS [Member] | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Proceeds from Sale of Loans Held-for-sale | $55.70 | ' | ' |
Related_Party_Transactions_Sch
Related Party Transactions - Schedule of Revenue and Expenses Related to Various Service Agreements (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Altisource [Member] | ' | ' |
Revenues and Expenses: | ' | ' |
Revenues | $8,499 | $4,233 |
Expenses | 17,364 | 11,692 |
HLSS [Member] | ' | ' |
Revenues and Expenses: | ' | ' |
Revenues | 165 | 112 |
Expenses | 462 | 491 |
AAMC [Member] | ' | ' |
Revenues and Expenses: | ' | ' |
Revenues | 384 | 0 |
Residential [Member] | ' | ' |
Revenues and Expenses: | ' | ' |
Revenues | $2,148 | $41 |
Related_Party_Transactions_Sch1
Related Party Transactions - Schedule of Amounts Receivable or Payable (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Net Receivable (Payable) | ' | ' |
Net Receivable (Payable) | ($62,602) | ($62,355) |
Altisource [Member] | ' | ' |
Net Receivable (Payable) | ' | ' |
Net Receivable (Payable) | -3,074 | -3,843 |
HLSS [Member] | ' | ' |
Net Receivable (Payable) | ' | ' |
Net Receivable (Payable) | -59,832 | -59,505 |
AAMC [Member] | ' | ' |
Net Receivable (Payable) | ' | ' |
Net Receivable (Payable) | 304 | 943 |
Residential [Member] | ' | ' |
Net Receivable (Payable) | ' | ' |
Net Receivable (Payable) | $0 | $50 |
Regulatory_Requirements_Detail
Regulatory Requirements - (Details) (USD $) | Mar. 31, 2014 |
In Millions, unless otherwise specified | |
Brokers and Dealers [Abstract] | ' |
Capital Requirement, Unpaid Principal Balance | $820.40 |
Commitments_and_Contingencies_1
Commitments and Contingencies - Narrative (Details) (USD $) | 3 Months Ended | 0 Months Ended | 3 Months Ended | 1 Months Ended | |
Mar. 31, 2014 | Dec. 19, 2013 | Mar. 31, 2014 | Dec. 19, 2013 | Feb. 28, 2014 | |
Loan | Unfavorable Regulatory Action [Member] | Unfavorable Regulatory Action [Member] | Unfavorable Regulatory Action [Member] | Wells Fargo [Member] | |
Minimum [Member] | Loan | ||||
Loss Contingencies [Line Items] | ' | ' | ' | ' | ' |
Mortgage Loans on Real Estate, Number of Acquired Loans On Hold | ' | ' | ' | ' | 184,000 |
Acquisitions | ' | ' | ' | ' | $39,000,000,000 |
Loss Contingency, Oversight Monitor Period | ' | ' | '3 years | ' | ' |
Loss Contingency, Consumer Relief Fund | ' | 127,300,000 | ' | ' | ' |
Loss Contingency Accrual | ' | 66,900,000 | ' | ' | ' |
Loss Contingency, Principal Forgiveness Modification Program, Aggregate Amount | ' | ' | ' | 2,000,000,000 | ' |
Loss Contingency, Principal Forgiveness Modification Program, Term | ' | '3 years | ' | ' | ' |
Provided Or Assumed Representation And Warranty Obligations Of Unpaid Principal Balance | 87,900,000,000 | ' | ' | ' | ' |
Warranty Repurchase Demands Unpaid Principal Balance | $138,700,000 | ' | ' | ' | ' |
Warranty Repurchase Demands Number Of Loans | 701 | ' | ' | ' | ' |
Commitments_and_Contingencies_2
Commitments and Contingencies - Schedule of Indemnification Obligations (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | |
Indemnification Obligations Liability [Roll Forward] | ' | |
Balance at December 31, 2013 | $192,716 | [1] |
Provision for representation and warranty obligations | 7,266 | |
New production reserves | 182 | |
Obligations assumed in connection with MSR and servicing business acquisitions | 0 | |
Charge-offs and other | -30,929 | [2] |
Balance at March 31, 2014 | $169,235 | [1] |
[1] | See Note 21 — Commitments and Contingencies for additional information. | |
[2] | Includes principal and interest losses realized in connection with repurchased loans, make-whole, indemnification and fee payments and settlements net of recoveries, if any. |
Subsequent_Events_Narrative_De
Subsequent Events - Narrative (Details) (USD $) | 3 Months Ended | 5 Months Ended | 1 Months Ended |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2014 | Apr. 30, 2014 |
Subsequent Event [Member] | |||
Subsequent Event [Line Items] | ' | ' | ' |
Repurchase of common stock (in shares) | 60,000 | 1,185,707 | 485,176 |
Repurchase of common stock | $2,308 | ' | $18,800 |