Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Oct. 26, 2015 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Ocwen Financial Corporation | |
Entity Central Index Key | 873,860 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 125,390,482 |
UNAUDITED CONSOLIDATED BALANCE
UNAUDITED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Assets | ||
Cash | $ 458,674 | $ 129,473 |
Mortgage servicing rights ($787,344 and $93,901 carried at fair value) | 1,153,295 | 1,913,992 |
Advances | 517,378 | 893,914 |
Match funded advances | 1,955,618 | 2,409,442 |
Loans held for sale ($235,909 and $401,120 carried at fair value) | 526,972 | 488,612 |
Loans held for investment - reverse mortgages, at fair value | 2,319,515 | 1,550,141 |
Receivables, net | 361,572 | 270,596 |
Deferred tax assets, net | 63,866 | 76,987 |
Premises and equipment, net | 44,885 | 43,310 |
Other assets ($18,551 and $7,335 carried at fair value) | 609,279 | 490,811 |
Total assets | 8,011,054 | 8,267,278 |
Liabilities | ||
Match funded liabilities | 1,589,846 | 2,090,247 |
Financing liabilities ($2,789,663 and $2,058,693 carried at fair value) | 2,953,518 | 2,258,641 |
Other secured borrowings | 1,001,070 | 1,733,691 |
Senior unsecured notes | 350,000 | 350,000 |
Other liabilities | 1,036,165 | 793,534 |
Total liabilities | $ 6,930,599 | $ 7,226,113 |
Commitments and Contingencies (Notes 19 and 20) | ||
Ocwen Financial Corporation (Ocwen) stockholders’ equity | ||
Common stock, $.01 par value; 200,000,000 shares authorized; 125,390,482 and 125,215,615 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively | $ 1,254 | $ 1,252 |
Additional paid-in capital | 527,622 | 515,194 |
Retained earnings | 550,373 | 530,361 |
Accumulated other comprehensive loss, net of income taxes | (1,886) | (8,413) |
Total Ocwen stockholders’ equity | 1,077,363 | 1,038,394 |
Non-controlling interest in subsidiaries | 3,092 | 2,771 |
Total equity | 1,080,455 | 1,041,165 |
Total liabilities and equity | $ 8,011,054 | $ 8,267,278 |
UNAUDITED CONSOLIDATED BALANCE3
UNAUDITED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Mortgage servicing rights, at fair value | $ 787,344 | $ 93,901 |
Loans held for sale, at fair value | 235,909 | 401,120 |
Other assets, at fair value | 18,551 | 7,335 |
Financing liabilities, at fair value | $ 2,789,663 | $ 2,058,693 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 125,390,482 | 125,215,615 |
Common stock, shares outstanding (in shares) | 125,390,482 | 125,215,615 |
UNAUDITED CONSOLIDATED STATEMEN
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | ||
Revenue | |||||
Servicing and subservicing fees | $ 360,017 | $ 465,964 | $ 1,203,541 | $ 1,448,096 | |
Gain on loans held for sale, net | 27,298 | 27,218 | 116,934 | 110,041 | |
Other revenues | 17,631 | 20,516 | 58,166 | 59,896 | |
Total revenue | [1] | 404,946 | 513,698 | 1,378,641 | 1,618,033 |
Expenses | |||||
Compensation and benefits | 102,612 | 99,879 | 313,599 | 316,118 | |
Amortization of mortgage servicing rights | 18,108 | 60,783 | 88,188 | 186,075 | |
Servicing and origination | 101,545 | 49,739 | 255,905 | 129,473 | |
Technology and communications | 37,182 | 44,261 | 117,793 | 121,234 | |
Professional services | 62,428 | 160,704 | 191,728 | 212,745 | |
Occupancy and equipment | 31,043 | 24,697 | 85,530 | 82,504 | |
Other | 34,808 | 14,976 | 65,593 | 101,547 | |
Total expenses | [1],[2] | 387,726 | 455,039 | 1,118,336 | 1,149,696 |
Other income (expense) | |||||
Interest income | 5,693 | 6,593 | 16,306 | 17,472 | |
Interest expense | (118,313) | (133,049) | (362,606) | (409,129) | |
Gain on sale of mortgage servicing rights | 41,246 | 0 | 97,958 | 0 | |
Gain on extinguishment of debt | 0 | 0 | 0 | 2,609 | |
Other, net | (1,764) | (4,469) | (12,552) | (2,675) | |
Total other expense, net | (73,138) | (130,925) | (260,894) | (391,723) | |
Income (loss) before income taxes | (55,918) | (72,266) | (589) | 76,614 | |
Income tax expense | 10,832 | 2,992 | 21,866 | 24,374 | |
Net income (loss) | (66,750) | (75,258) | (22,455) | 52,240 | |
Net income attributable to non-controlling interests | (119) | (123) | (321) | (165) | |
Net income (loss) attributable to Ocwen stockholders | (66,869) | (75,381) | (22,776) | 52,075 | |
Preferred stock dividends | 0 | 0 | 0 | (1,163) | |
Deemed dividends related to beneficial conversion feature of preferred stock | 0 | (808) | 0 | (1,639) | |
Net income (loss) attributable to Ocwen common stockholders | [3] | $ (66,869) | $ (76,189) | $ (22,776) | $ 49,273 |
Earnings (loss) per share attributable to Ocwen common stockholders | |||||
Basic (in USD per share) | $ (0.53) | $ (0.58) | $ (0.18) | $ 0.37 | |
Diluted (in USD per share) | $ (0.53) | $ (0.58) | $ (0.18) | $ 0.36 | |
Weighted average common shares outstanding | |||||
Basic (in shares) | 125,383,639 | 130,551,197 | 125,322,742 | 133,318,381 | |
Diluted (in shares) | 125,383,639 | 130,551,197 | 125,322,742 | 136,881,326 | |
[1] | Intersegment billings for services rendered to other segments are recorded as revenues, as contra-expense or as other income, depending on the type of service that is rendered. | ||||
[2] | Depreciation and amortization expense are as follows: Servicing Lending Corporate Items and Other Business Segments ConsolidatedFor the three months ended September 30, 2015Depreciation expense$694 $96 $4,256 $5,046Amortization of mortgage servicing rights18,023 85 — 18,108Amortization of debt discount329 — — 329Amortization of debt issuance costs 2,981 — 344 3,325 For the three months ended September 30, 2014Depreciation expense$2,636 $98 $3,022 $5,756Amortization of mortgage servicing rights60,689 94 — 60,783Amortization of debt discount331 — — 331Amortization of debt issuance costs 1,114 — 344 1,458 For the nine months ended September 30, 2015Depreciation expense$1,736 $292 $11,439 $13,467Amortization of mortgage servicing rights87,926 262 — 88,188Amortization of debt discount1,022 — — 1,022Amortization of debt issuance costs 9,336 — 1,049 10,385 For the nine months ended September 30, 2014Depreciation expense$8,099 $235 $8,267 $16,601Amortization of mortgage servicing rights185,263 613 199 186,075Amortization of debt discount991 — — 991Amortization of debt issuance costs 3,241 — 513 3,754 | ||||
[3] | For the three and nine months ended September 30, 2015 and for three months ended September 30, 2014, we have excluded the effect of preferred stock, stock options and common stock awards from the computation of diluted earnings per share because of the anti-dilutive effect of our reported net loss. |
UNAUDITED CONSOLIDATED STATEME5
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | ||
Statement of Comprehensive Income [Abstract] | |||||
Net income (loss) | $ (66,750) | $ (75,258) | $ (22,455) | $ 52,240 | |
Other comprehensive income, net of income taxes: | |||||
Reclassification adjustment for losses on cash flow hedges included in net income | [1] | 494 | 384 | 6,527 | 1,362 |
Other | 0 | 2 | 0 | 5 | |
Total other comprehensive income, net of income taxes | 494 | 386 | 6,527 | 1,367 | |
Comprehensive income (loss) | (66,256) | (74,872) | (15,928) | 53,607 | |
Comprehensive income attributable to non-controlling interests | (119) | (123) | (321) | (165) | |
Comprehensive income (loss) attributable to Ocwen stockholders | $ (66,375) | $ (74,995) | $ (16,249) | $ 53,442 | |
[1] | Net of tax expense of $0.4 million and $0.2 million for the nine months ended September 30, 2015 and 2014, respectively. These losses are reclassified to Other, net in the Unaudited Consolidated Statements of Operations. |
UNAUDITED CONSOLIDATED STATEME6
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Statement of Comprehensive Income [Abstract] | ||
Income tax expense | $ (0.4) | $ (0.2) |
UNAUDITED CONSOLIDATED STATEME7
UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (Loss), Net of Taxes [Member] | Non-controlling Interest in Subsidiaries [Member] |
Beginning Balance at Dec. 31, 2013 | $ 1,812,591 | $ 1,352 | $ 818,427 | $ 1,002,963 | $ (10,151) | |
Beginning Balance (in shares) at Dec. 31, 2013 | 135,176,271 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | 52,240 | 52,075 | $ 165 | |||
Preferred stock dividends ($18.75 per share) | (1,163) | (1,163) | ||||
Deemed dividend related to beneficial conversion feature of preferred stock | (1,639) | (1,639) | ||||
Conversion of preferred stock | 62,000 | $ 20 | 61,980 | |||
Conversion of preferred stock (in shares) | 1,950,296 | |||||
Repurchase of common stock | (325,609) | $ (99) | (325,510) | |||
Repurchase of common stock (in shares) | (9,920,649) | |||||
Exercise of common stock options | 1,038 | $ 2 | 1,036 | |||
Exercise of common stock options (in shares) | 244,000 | |||||
Equity-based compensation and other | 11,092 | $ 0 | 11,092 | |||
Equity-based compensation and other (in shares) | 17,887 | |||||
Non-controlling interest in connection with acquisition of controlling interest in Ocwen Structured Investments, LLC | 2,526 | 2,526 | ||||
Other comprehensive income, net of income taxes | 1,367 | 1,367 | ||||
Ending Balance at Sep. 30, 2014 | 1,614,443 | $ 1,275 | 567,025 | 1,052,236 | (8,784) | 2,691 |
Ending Balance (in shares) at Sep. 30, 2014 | 127,467,805 | |||||
Beginning Balance at Dec. 31, 2014 | $ 1,041,165 | $ 1,252 | 515,194 | 530,361 | (8,413) | 2,771 |
Beginning Balance (in shares) at Dec. 31, 2014 | 125,215,615 | 125,215,615 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | $ (22,455) | (22,776) | 321 | |||
Preferred stock dividends ($18.75 per share) | 0 | |||||
Deemed dividend related to beneficial conversion feature of preferred stock | 0 | |||||
Cumulative effect of fair value election - Mortgage servicing rights, net of income taxes | 42,788 | 42,788 | ||||
Exercise of common stock options | 509 | $ 1 | 508 | |||
Exercise of common stock options (in shares) | 85,173 | |||||
Equity-based compensation and other | 11,921 | $ 1 | 11,920 | |||
Equity-based compensation and other (in shares) | 89,694 | |||||
Other comprehensive income, net of income taxes | 6,527 | 6,527 | ||||
Ending Balance at Sep. 30, 2015 | $ 1,080,455 | $ 1,254 | $ 527,622 | $ 550,373 | $ (1,886) | $ 3,092 |
Ending Balance (in shares) at Sep. 30, 2015 | 125,390,482 | 125,390,482 |
UNAUDITED CONSOLIDATED STATEME8
UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Parenthetical) | 9 Months Ended |
Sep. 30, 2014$ / shares | |
Statement of Stockholders' Equity [Abstract] | |
Preferred stock dividends (dollar per share) | $ 18.75 |
UNAUDITED CONSOLIDATED STATEME9
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Cash flows from operating activities | ||
Net income (loss) | $ (22,455) | $ 52,240 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Amortization of mortgage servicing rights | 88,188 | 186,075 |
Loss on valuation of mortgage servicing rights, at fair value | 73,257 | 13,147 |
Impairment of mortgage servicing rights | 25,052 | 0 |
Gain on sale of mortgage servicing rights | (97,958) | 0 |
Realized and unrealized losses on derivative financial instruments | 8,529 | 1,955 |
Provision for bad debts | 25,272 | 49,583 |
Depreciation | 13,467 | 16,601 |
Amortization of debt issuance costs | 10,385 | 3,754 |
Gain on extinguishment of debt | 0 | (2,609) |
(Gain) loss on sale of fixed assets | (1,095) | 2,093 |
Decrease in deferred tax assets, net | 5,700 | 35,884 |
Equity-based compensation expense | 5,130 | 9,372 |
Gain on loans held for sale, net | (116,934) | (110,041) |
Origination and purchase of loans held for sale | (3,713,311) | (6,007,152) |
Proceeds from sale and collections of loans held for sale | 3,935,420 | 6,013,059 |
Changes in assets and liabilities: | ||
Decrease in advances and match funded advances | 491,654 | 236,688 |
Increase in receivables and other assets, net | (1,899) | (11,806) |
Increase in other liabilities | 30,726 | 46,243 |
Other, net | 14,866 | 23,929 |
Net cash provided by operating activities | 773,994 | 559,015 |
Cash flows from investing activities | ||
Origination of loans held for investment – reverse mortgages | (781,002) | (565,670) |
Principal payments received on loans held for investment - reverse mortgages | 105,520 | 56,193 |
Purchase of mortgage servicing rights, net | (10,055) | (19,395) |
Proceeds from sale of mortgage servicing rights | 598,059 | 287 |
Acquisition of advances in connection with the purchase of mortgage servicing rights | (84,373) | |
Acquisition of advances in connection with the purchase of loans | 0 | (60,482) |
Proceeds from sale of advances and match funded advances | 285,938 | 0 |
Additions to premises and equipment | (18,335) | (7,716) |
Proceeds from sale of premises and equipment | 4,758 | 22 |
Distributions of capital from unconsolidated entities | 0 | 6,572 |
Other | 4,082 | 4,248 |
Net provided by (used in) investing activities | 188,965 | (732,368) |
Cash flows from financing activities | ||
Repayment of match funded liabilities | (500,401) | (329,175) |
Proceeds from other secured borrowings | 5,647,016 | 4,352,495 |
Repayments of other secured borrowings | (6,572,601) | (4,532,029) |
Proceeds from issuance of senior unsecured notes | 0 | 350,000 |
Payment of debt issuance costs | (18,610) | (6,835) |
Proceeds from sale of mortgage servicing rights accounted for as a financing | 0 | 123,551 |
Proceeds from sale of loans accounted for as a financing | 803,924 | 572,031 |
Proceeds from sale of advances accounted for as a financing | 0 | 88,095 |
Repurchase of common stock | 0 | (325,609) |
Payment of preferred stock dividends | 0 | (1,163) |
Proceeds from exercise of common stock options | 413 | 1,176 |
Other | 6,501 | 1,467 |
Net cash (used in) provided by financing activities | (633,758) | 294,004 |
Net increase in cash | 329,201 | 120,651 |
Cash at beginning of year | 129,473 | 178,512 |
Cash at end of period | 458,674 | 299,163 |
Supplemental non-cash investing and financing activities | ||
Transfer of loans held for sale to loans held for investment | 0 | 110,874 |
ResCap [Member] | ||
Cash flows from investing activities | ||
Cash paid to acquire business | 0 | (54,220) |
Ocwen Structured Investments, LLC (OSI) [Member] | ||
Cash flows from investing activities | ||
Cash paid to acquire business | $ 0 | $ (7,834) |
Description of Business and Bas
Description of Business and Basis of Presentation | 9 Months Ended |
Sep. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Basis of Presentation | 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 mortgage loans. Effective October 1, 2015, Ocwen designated its office in West Palm Beach, Florida as corporate headquarters. Previously our office in Atlanta, Georgia was designated as headquarters. We have offices located throughout the United States (U.S.) and in the United States Virgin Islands (USVI) with support operations in India and the Philippines. 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). We perform primary and master servicer activities on behalf of investors and other servicers, including the Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac) (collectively, the GSEs), the Government National Mortgage Association (Ginnie Mae) and private-label securitizations (non-Agency). As primary servicer, we may be required to make certain payments of property taxes and insurance premiums, default and property maintenance payments, as well as advances of principal and interest payments before collecting them from borrowers. As master servicer, we collect mortgage payments from primary servicers and distribute the funds to investors in the mortgage-backed securities. To the extent the primary servicer does not advance the scheduled principal and interest, as master servicer we are responsible for advancing the shortfall subject to certain limitations. We originate, purchase, sell and securitize conventional (conforming to the underwriting standards of Fannie Mae or Freddie Mac; collectively referred to as Agency loans) and government insured (Federal Housing Authority (FHA) or Department of Veterans Affairs (VA)) forward and reverse mortgages. The GSEs or Ginnie Mae guarantee these mortgage securitizations. Note 1A — Business Environment Our business has been facing certain challenges and uncertainties, including with respect to the potential impact on us of any regulatory actions against us, downgrades in our third-party servicer ratings or any failure to maintain sufficient liquidity or comply with the covenants in our debt agreements. We believe that we have made significant progress over the course of 2015 addressing the challenges and uncertainties that our business has been facing. We have largely completed executing on our strategic plan to sell a significant portion of our Agency MSRs, completing sales of approximately $89 billion unpaid principal balance (UPB) of Agency MSRs from which we expect to receive proceeds of approximately $642 million , subject in each case to necessary approvals and the satisfaction of closing conditions. The majority of proceeds received to date have been used to make $561.6 million of prepayments under our Senior Secured Term Loan (SSTL), which has significantly reduced our leverage. During 2015, we have successfully renewed, refinanced, replaced or extended all of our servicing advance facilities and mortgage loan warehouse facilities prior to their scheduled maturity dates to the extent we have deemed necessary to maintain adequate liquidity. On September 18, 2015, we refinanced an existing $1.8 billion servicing advance facility. The amortization date was extended to September 2016 and the maximum borrowing capacity was reduced to $1.7 billion . On October 16, 2015, we entered into an amendment to the SSTL facility agreement. Effective as of October 20, 2015, the amendment, among other things (1) removed, until the quarter ending June 30, 2017, the interest coverage and corporate leverage ratio financial covenants; (2) expanded our ability to exclude certain assets from the collateral securing the SSTL to the extent necessary to meet regulatory minimum net worth requirements; (3) increased our ability to make certain permitted investments; and (4) established a requirement that we use 100.0% of the net cash proceeds from future asset sales permitted under the general asset sale basket to prepay the SSTL. Note 1B - 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 adjustments, necessary for a fair presentation. The results of operations and other data for the three and nine months ended September 30, 2015 are not necessarily indicative of the results that may be expected for any other interim period or for the year ending December 31, 2015 . The unaudited consolidated financial statements presented herein should be read in conjunction with the audited consolidated financial statements and related notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2014 . Reclassifications Within the Other income (expense) section of the Unaudited Consolidated Statements of Operations for the three and nine months ended September 30, 2014 , we reclassified Interest income from Other, net to a separate line item to conform to the current year presentation. Certain insignificant amounts in the Unaudited Consolidated Statements of Cash Flows for the nine months ended September 30, 2014 have been reclassified to conform to the current year presentation. These reclassifications had no impact on our consolidated cash flows from operating, investing or financing activities. Use of Estimates and Assumptions The preparation of financial statements in conformity with 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, and representation and warranty and other indemnification obligations. In developing estimates and assumptions, management uses all available information; however, actual results could materially differ from those estimates and assumptions. Income Taxes In accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 270, Interim Financial Reporting, and ASC 740-270, Income Taxes — Interim Reporting, at the end of each interim period, we are required to determine the best estimate of our annual effective tax rate and then apply that rate to “ordinary” income or loss (pre-tax income or loss excluding unusual or infrequently occurring discrete items) in providing for income taxes on an interim period. However, in certain circumstances where we are unable to make a reliable estimate of the annual effective tax rate, ASC 740-270 allows the actual effective tax rate for the interim period to be used in the interim period. For the three months ended September 30, 2015, we calculated an estimate of our annual effective rate for the year and applied that rate to our pre-tax “ordinary” income or loss for the nine months ended September 30, 2015. Recently Issued Accounting Standards Business Combinations: Pushdown Accounting - Amendments to SEC Paragraphs Pursuant to Staff Accounting Bulletin No. 115 (ASU 2015-08) In May 2015, the FASB issued Accounting Standards Update (ASU) 2015-08, which removes references to the SEC’s Staff Accounting Bulletin (SAB) Topic 5.J on pushdown accounting from ASC 805-50, thereby conforming the FASB’s guidance on pushdown accounting with the SEC’s guidance on this topic. The SEC’s issuance of SAB No. 115 had superseded the guidance in SAB Topic 5.J in connection with the FASB’s November 2014 release of ASU 2014-17. ASU 2015-08 became effective for us upon issuance. Our adoption of ASU 2015-08 on May 11, 2015 did not have a material impact on our consolidated financial condition or results of operations. Revenue from Contracts with Customers: Deferral of the Effective Date (ASU 2015-14) In August 2015, the FASB issued Accounting Standards Update (ASU) 2015-14, which defers the effective date of ASU 2014-09, “Revenue from Contracts with Customers”, by one year. In May 2014, the FASB issued ASU 2014-09 to clarify the principles for recognizing revenue and to develop a common revenue standard. As a result of the issuance of ASU 2015-14, ASU 2014-09 will now be effective for us on January 1, 2018, with early application permitted as of the annual reporting period beginning on January 1, 2017, including interim reporting periods within that reporting period. We are currently evaluating the effect of adopting this standard. Interest -- Imputation of Interest: Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements -- Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting (ASU 2015-15) In August 2015, the FASB issued Accounting Standards Update (ASU) 2015-15, which clarifies ASU 2015-03, “Interest -- Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs”, by providing guidance regarding the presentation and subsequent measurement of debt issuance costs related to line-of-credit arrangements. Given the absence of authoritative guidance on this matter, the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on that line-of-credit arrangement. The issuance of ASU 2015-15 does not change the effective date of ASU 2015-03. ASU 2015-03 will be effective for us on January 1, 2016, with early adoption permitted for financial statements that have not been previously issued. We are currently evaluating the effect of adopting this standard. |
Securitizations and Variable In
Securitizations and Variable Interest Entities | 9 Months Ended |
Sep. 30, 2015 | |
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 advance financing facilities are variable interest entities (VIEs) for which we are the primary beneficiary. Securitizations of Residential Mortgage Loans Currently, we securitize forward and reverse residential mortgage loans involving the GSEs and Ginnie Mae and loans insured by the FHA or 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 in 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 Ginnie Mae. Securitization usually occurs within 30 days of loan closing or purchase. We retain the 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 Statements of Operations along with the changes in fair value of the loans and the gain or loss on any related derivatives. We include all changes in loans held for sale and related derivative balances in operating activities in the Unaudited Consolidated Statements 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 and nine months ended September 30 : Three Months Nine Months 2015 2014 2015 2014 Proceeds received from securitizations $ 1,478,142 $ 1,369,468 $ 3,964,866 $ 4,346,991 Servicing fees collected 5,973 10,840 25,066 25,174 Purchases of previously transferred assets, net of claims reimbursed 1,512 2,237 2,408 2,237 $ 1,485,627 $ 1,382,545 $ 3,992,340 $ 4,374,402 In connection with these transfers, we retained MSRs of $9.5 million and $27.8 million during the three and nine months ended September 30, 2015 , respectively, and $10.7 million and $32.1 million during the three and nine months ended September 30, 2014 , respectively. We initially record the MSRs at fair value and subsequently account for them at amortized cost. Certain obligations arise from the 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. 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: September 30, 2015 December 31, 2014 Carrying value of assets: Mortgage servicing rights, at amortized cost $ 45,064 $ 82,542 Mortgage servicing rights, at fair value 226 2,840 Advances and match funded advances 21,686 1,236 UPB of loans transferred (1) 6,811,864 9,353,187 Maximum exposure to loss $ 6,878,840 $ 9,439,805 (1) The UPB of the loans transferred is the maximum exposure to loss under our standard representations and warranties obligations. At September 30, 2015 and December 31, 2014 , 8.1% and 5.1% , respectively, of the transferred residential loans that we service were 60 days or more past due. During the three and nine months ended September 30, 2015 , 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 therefore, we 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 Statements 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 Statements 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 Statements of Cash Flows. Proceeds from securitizations of HECMs and payments on HMBS-related borrowings are included in financing activities in the Unaudited Consolidated Statements of Cash Flows. At September 30, 2015 and December 31, 2014 , we had HMBS-related borrowings of $2.2 billion and $1.4 billion and HECMs pledged as collateral to the pools of $2.3 billion and $1.6 billion , respectively. 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 because we have determined that Ocwen is the primary beneficiary of the SPE. These SPEs issue debt supported by collections on the transferred advances, and we refer to this debt as Match funded liabilities. We make the transfers to these SPEs under the terms of our advance financing 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 the debt is not recourse to Ocwen. 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 in our Unaudited Consolidated Balance Sheets. |
Fair Value
Fair Value | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Note 3 – 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 certain of our nonfinancial assets measured at fair value on a recurring or non-recurring basis or disclosed, but not carried, at fair value are as follows at the dates indicated: September 30, 2015 December 31, 2014 Level Carrying Value Fair Value Carrying Value Fair Value Financial assets: Loans held for sale: Loans held for sale, at fair value (a) 2 $ 235,909 $ 235,909 $ 401,120 $ 401,120 Loans held for sale, at lower of cost or fair value (b) 3 291,063 291,063 87,492 87,492 Total Loans held for sale $ 526,972 $ 526,972 $ 488,612 $ 488,612 Loans held for investment - Reverse mortgages, at fair value (a) 3 $ 2,319,515 $ 2,319,515 $ 1,550,141 $ 1,550,141 Advances and match funded advances (c) 3 2,472,996 2,472,996 3,303,356 3,303,356 Receivables, net (c) 3 361,572 361,572 270,596 270,596 Mortgage-backed securities, at fair value (a) 3 8,541 8,541 7,335 7,335 Financial liabilities: Match funded liabilities (c) 3 $ 1,589,846 $ 1,589,901 $ 2,090,247 $ 2,090,247 Financing liabilities: HMBS-related borrowings, at fair value (a) 3 $ 2,229,604 $ 2,229,604 $ 1,444,252 $ 1,444,252 Financing liability - MSRs pledged (a) 3 560,059 560,059 614,441 614,441 Other (c) 3 163,855 144,725 199,948 189,648 Total Financing liabilities $ 2,953,518 $ 2,934,388 $ 2,258,641 $ 2,248,341 Other secured borrowings: Senior secured term loan (c) 2 $ 702,918 $ 702,397 $ 1,273,219 $ 1,198,227 Other (c) 3 298,152 298,152 460,472 460,472 Total Other secured borrowings $ 1,001,070 $ 1,000,549 $ 1,733,691 $ 1,658,699 Senior unsecured notes (c) 2 $ 350,000 $ 321,563 $ 350,000 $ 321,563 Derivative financial instruments assets (liabilities) (a): Interest Rate Lock Commitments (IRLCs) 2 $ 10,010 $ 10,010 $ 6,065 $ 6,065 Forward MBS trades 1 (3,438 ) (3,438 ) (2,854 ) (2,854 ) Interest rate caps 3 1,501 1,501 567 567 MSRs: MSRs, at fair value (a) 3 $ 787,344 $ 787,344 $ 93,901 $ 93,901 MSRs, at amortized cost (c) (d) 3 365,951 404,533 1,820,091 2,237,703 Total MSRs $ 1,153,295 $ 1,191,877 $ 1,913,992 $ 2,331,604 (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. (d) The balance at September 30, 2015 includes our impaired government-insured stratum of amortization method MSRs, which is measured at fair value on a non-recurring basis. The carrying value of this stratum at September 30, 2015 was $144.2 million , net of a valuation allowance of $25.1 million . 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 for the three and nine months ended September 30, 2015 and 2014 . Loans Held for Investment - Reverse Mortgages HMBS-Related Borrowings Mortgage-Backed Securities Financing Liability - MSRs Pledged Derivatives MSRs Total Three months ended September 30, 2015 Beginning balance $ 2,097,192 $ (1,987,998 ) $ 8,157 $ (581,219 ) $ 155 $ 814,450 $ 350,737 Purchases, issuances, sales and settlements: Purchases — — — — 2,084 — 2,084 Issuances 250,600 (271,068 ) — — — — (20,468 ) Sales — — — — — (2,329 ) (2,329 ) Settlements (41,582 ) 43,725 — 21,160 — — 23,303 209,018 (227,343 ) — 21,160 2,084 (2,329 ) 2,590 Total realized and unrealized gains and (losses): Included in earnings 13,305 (14,263 ) 384 — (738 ) (24,777 ) (26,089 ) Included in Other comprehensive income — — — — — — — 13,305 (14,263 ) 384 — (738 ) (24,777 ) (26,089 ) Transfers in and / or out of Level 3 — — — — — — — Ending balance $ 2,319,515 $ (2,229,604 ) $ 8,541 $ (560,059 ) $ 1,501 $ 787,344 $ 327,238 Loans Held for Investment - Reverse Mortgages HMBS-Related Borrowings Mortgage-Backed Securities Financing Liability - MSRs Pledged Derivatives MSRs Total Three months ended September 30, 2014 Beginning balance $ 1,107,626 $ (1,033,712 ) $ 7,502 $ (629,579 ) $ 97 $ 104,220 $ (443,846 ) Purchases, issuances, sales and settlements: Purchases — — — — — — — Issuances 208,566 (190,452 ) — — — — 18,114 Sales — — — — — — Settlements (27,592 ) 12,690 — 10,724 — (934 ) (5,112 ) 180,974 (177,762 ) — 10,724 — (934 ) 13,002 Total realized and unrealized gains and (losses): Included in earnings 26,724 (24,620 ) (124 ) — (6 ) (1,338 ) 636 Included in Other comprehensive income — — — — — — — 26,724 (24,620 ) (124 ) — (6 ) (1,338 ) 636 Transfers in and / or out of Level 3 — — — — — — — Ending balance $ 1,315,324 $ (1,236,094 ) $ 7,378 $ (618,855 ) $ 91 $ 101,948 $ (430,208 ) Loans Held for Investment - Reverse Mortgages HMBS-Related Borrowings Mortgage-backed Securities Financing Liability - MSRs Pledged Derivatives MSRs Total Nine months ended September 30, 2015 Beginning balance $ 1,550,141 $ (1,444,252 ) $ 7,335 $ (614,441 ) $ 567 $ 93,901 $ (406,749 ) Purchases, issuances, sales and settlements: Purchases — — — — 2,201 — 2,201 Issuances 781,002 (803,924 ) — — — (1,139 ) (24,061 ) Transfer from MSRs carried at amortized cost — — — — — 839,157 839,157 Sales — — — — — (71,318 ) (71,318 ) Settlements (1) (105,505 ) 107,522 — 54,382 346 — 56,745 675,497 (696,402 ) — 54,382 2,547 766,700 802,724 Total realized and unrealized gains and (losses): (2) Included in earnings 93,877 (88,950 ) 1,206 — (1,613 ) (73,257 ) (68,737 ) Included in Other comprehensive income (loss) — — — — — — — 93,877 (88,950 ) 1,206 — (1,613 ) (73,257 ) (68,737 ) Transfers in and / or out of Level 3 — — — — — — — Ending Balance $ 2,319,515 $ (2,229,604 ) $ 8,541 $ (560,059 ) $ 1,501 $ 787,344 $ 327,238 Loans Held for Investment - Reverse Mortgages HMBS-Related Borrowings Mortgage-backed Securities Financing Liability - MSRs Pledged Derivatives MSRs Total Nine months ended September 30, 2014 Beginning balance $ 618,018 $ (615,576 ) $ — $ (633,804 ) $ 442 $ 116,029 $ (514,891 ) Purchases, issuances, sales and settlements: Purchases — — 7,677 — 23 — 7,700 Issuances 565,670 (572,031 ) — — — — (6,361 ) Transfer from loans held for sale, at fair value 110,874 — — — — — 110,874 Sales — — — — — — — Settlements (56,193 ) 25,725 — 14,949 — (934 ) (16,453 ) 620,351 (546,306 ) 7,677 14,949 23 (934 ) 95,760 Total realized and unrealized gains and (losses): Included in earnings 76,955 (74,212 ) (299 ) — (374 ) (13,147 ) (11,077 ) Included in Other comprehensive income (loss) — — — — — — — 76,955 (74,212 ) (299 ) — (374 ) (13,147 ) (11,077 ) Transfers in and / or out of Level 3 — — — — — — — Ending balance $ 1,315,324 $ (1,236,094 ) $ 7,378 $ (618,855 ) $ 91 $ 101,948 $ (430,208 ) (1) In the event of a transfer to another party of servicing related to Rights to MSRs, we are required to reimburse New Residential Investment Corp. (NRZ) at predetermined contractual rates for the loss of servicing revenues. Settlements for Financing liability - MSRs pledged for the nine months ended September 30, 2015 includes $2.2 million of such reimbursements. (2) Total losses attributable to derivative financial instruments still held at September 30, 2015 were $1.3 million for the nine months ended September 30, 2015 . The methodologies that we use and key assumptions that we make to estimate the fair value of financial 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 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 contractual obligations as the servicer of the loans. These loans 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 September 30, 2015 valuation include: • Life in years ranging from 6.33 to 10.22 (weighted average of 6.70 ); • Conditional repayment rate ranging from 4.85% to 53.75% (weighted average of 19.39% ); and • Discount rate of 2.95% . Significant increases or decreases in any of these assumptions in isolation could result in a significantly lower or higher fair value, respectively. The effects of changes in the assumptions used to value the loans held for investment are largely offset by the effects of changes in the assumptions used to value the HMBS-Related Borrowings that are associated with these loans. Mortgage Servicing Rights 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. 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 internal 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, supported by our internal verification and analytical procedures, provide reasonable 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. We evaluate the reasonableness of our third party experts’ assumptions using historical experience adjusted for prevailing market conditions. Assumptions used in the valuation of MSRs include: • Mortgage prepayment speeds • Interest rate used for computing the cost of financing servicing advances • Cost of servicing • Interest rate used for computing float earnings • Discount rate • Compensating interest expense • Delinquency rates • Collection rate of other ancillary fees Amortized Cost MSRs We estimate the fair value of MSRs carried at amortized cost using a process that involves either actual sale prices obtained or the use of third-party valuation experts, supported by commercially available discounted cash flow models and analysis of current market data. To provide greater price transparency to investors, we disclose actual Ocwen sale prices for orderly transactions where available in lieu of third-party valuations. The more significant assumptions used in the September 30, 2015 valuation include: Weighted average prepayment speed 12.67 % Weighted average delinquency rate 14.39 % Advance financing cost 5-year swap Interest rate for computing float earnings 5-year swap Weighted average discount rate 9.30 % Weighted average cost to service (in dollars) $ 98 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. Our strata are defined as conventional and government-insured. Fair Value MSRs MSRs carried at fair value are classified within Level 3 of the valuation hierarchy. The fair value is equal to the mid-point of the range of prices provided by third-party valuation experts, without adjustment, except in the event we have a potential or completed Ocwen sale, including transactions where we have executed letters of intent, in which case the fair value of the MSRs is carried at the estimated sale price. Fair value reflects actual Ocwen sale prices for orderly transactions where available in lieu of independent third-party valuations. Our valuation process includes discussions of bid pricing with the third-party valuation experts and presumably are contemplated along with other market-based transactions in their model validation. A change in the valuation inputs utilized by the valuation experts might result in a significantly higher or lower fair value measurement. Changes in market interest rates tend to impact the fair value for Agency MSRs via prepayment speeds by altering the borrower refinance incentive, and for Non-Agency MSRs via a market rate indexed cost of advance funding. Other key assumptions used in the valuation of these MSRs include delinquency rates and discount rates. The primary assumptions used in the September 30, 2015 valuation include: Agency Non Agency Weighted average prepayment speed 10.80 % 16.48 % Weighted average delinquency rate 1.10 % 29.80 % Advance financing cost 5-year swap 1ML plus 3.5% Interest rate for computing float earnings 5-year swap 1ML Weighted average discount rate 9.00 % 14.94 % Weighted average cost to service (in dollars) $ 70 $ 336 Advances We value advances at their net realizable value, which generally approximates fair value, because advances have no stated maturity, are generally 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. Mortgage-Backed Securities Our subordinate and residual securities are not actively traded, and therefore, we estimate the fair value of these securities based on the present value of expected future cash flows from the underlying mortgage pools. We use our best estimate of the key assumptions we believe are used by market participants. We calibrate our internally developed discounted cash flow models for trading activity when appropriate to do so in light of market liquidity levels. Key inputs include expected prepayment rates, delinquency and cumulative loss curves and discount rates commensurate with the risks. Where possible, we use observable inputs in the valuation of our securities. However, the subordinate and residual securities in which we have invested trade infrequently and therefore have few or no observable inputs and little price transparency. Additionally, during periods of market dislocation, the observability of inputs is further reduced. Discount rates for the subordinate and residual securities are determined based upon an assessment of prevailing market conditions and prices for similar assets. We project the delinquency, loss and prepayment assumptions based on a comparison to actual historical performance curves adjusted for prevailing market conditions. 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. Financing Liabilities 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 September 30, 2015 valuation include: • Life in years ranging from 4.85 to 10.22 (weighted average of 5.54 ); • Conditional repayment rate ranging from 4.85% to 53.75% (weighted average of 19.39% ); and • Discount rate of 2.27% . Significant increases or decreases in any of these assumptions in isolation would result in a significantly higher or lower fair value. MSRs Pledged We periodically sell the rights to receive servicing fees, excluding ancillary income, with respect to certain non-Agency MSRs (Rights to MSRs). Because we have retained legal title to the MSRs, the sales of Rights to MSRs are accounted for as financings. We initially establish the value of the Financing Liability - MSRs Pledged based on the price at which the Rights to MSRs are sold. Thereafter, the carrying value of the Financing Liability - MSRs pledged is adjusted to fair value at each reporting date. We determine fair value by applying the price of the underlying MSRs to the remaining principal balance related to the underlying MSRs. Since we have elected fair value for our portfolio of private-label MSRs, future fair value changes in the Financing Liability - MSRs Pledged will be largely offset by changes in the fair value of the related MSRs. The more significant assumptions used in determination of the price of the underlying MSRs at September 30, 2015 include: Weighted average prepayment speed 16.98 % Weighted average delinquency rate 30.75 % Advance financing cost 1 ML plus 3.5% Interest rate for computing float earnings 1ML Weighted average discount rate 14.77 % Weighted average cost to service (in dollars) $ 341 Significant increases or decreases in these assumptions in isolation would result in a significantly higher or lower fair value Secured Notes We issued Ocwen Asset Servicing Income Series (OASIS), Series 2014-1 Notes secured by Ocwen-owned MSRs relating to Freddie Mac mortgages. We accounted for this transaction as a financing. We determine the fair value based on bid prices provided by third parties involved in the issuance and placement of the notes. 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 based the fair values at September 30, 2015 and December 31, 2014 on quoted prices in a market with limited trading activity. Senior Unsecured Notes We base the fair value on quoted prices in a market with limited trading activity. Derivative Financial Instruments IRLCs represent an agreement to purchase loans from a third-party originator or an agreement to extend credit to a mortgage applicant (locked pipeline), 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 the 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 financing 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. |
Sales of Advances and MSRs
Sales of Advances and MSRs | 9 Months Ended |
Sep. 30, 2015 | |
Transfers and Servicing [Abstract] | |
Sales of Advances and MSRs | Note 4 — Sales of Advances and MSRs In order to efficiently finance our assets, streamline our operations and generate liquidity, we sell MSRs, Rights to MSRs and servicing advances to market participants. We may retain the right to subservice loans when we sell MSRs. 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 to a transfer of the MSRs are received. The following table provides a summary of MSRs and advances sold during the nine months ended September 30, 2015 : MSRs Advances and Match Funded Advances Carrying value of assets sold $ 662,923 $ 321,164 Gain (loss) on sale 97,958 — Plus: Accrued expenses and reserves 19,529 — Sales price 780,410 321,164 Less: Amount due from purchaser at September 30 98,545 35,226 Amount paid to purchasers for estimated representation and warranty obligations, compensatory fees for foreclosures that may ultimately exceed investor timelines and related indemnification obligations 83,806 — Total net cash received $ 598,059 $ 285,938 During nine months ended September 30, 2015 , we sold Agency MSRs relating to loans with a UPB of $87.6 billion . There were no significant MSR sales during the nine months ended September 30, 2014 . In 2012 and 2013, we sold to Home Loan Servicing Solutions, Ltd. (HLSS) Rights to MSRs and the related servicing advances (together with the sale of the related servicing advances, the NRZ/HLSS Transactions). On April 6, 2015, HLSS closed on the sale of substantially all of its assets to NRZ. References to NRZ in these unaudited consolidated financial statements include HLSS for periods prior to April 6, 2015 because, following HLSS’ sale of substantially all of its assets on April 6, 2015, NRZ, through its subsidiaries, is the owner of the Rights to MSRs and has assumed all rights and obligations under the associated agreements. Pursuant to our agreements, NRZ has assumed the obligation to fund new servicing advances with respect to the Rights to MSRs. However, because we remain the servicer on the loans for which the Rights to MSRs have been sold, in the event NRZ were to fail to fulfill its advance funding obligations, as the servicer under our servicing agreements, we would be contractually obligated to fund such advances. At September 30, 2015 , NRZ had outstanding advances of approximately $5.1 billion in connection with the Rights to MSRs. The servicing fees payable under the servicing agreements underlying the Rights to MSRs are apportioned between NRZ and us as provided in our agreements with NRZ. NRZ retains a fee based on the UPB of the loans serviced, and OLS receives certain fees, including a performance fee based on servicing fees actually paid less an amount calculated based on the amount of servicing advances and cost of financing those advances. After the earlier of April 30, 2020 or eight years after the closing date of the sale of each tranche of Rights to MSRs to NRZ, the apportionment of these fees with respect to such tranche is subject to re-negotiation. As it relates to the NRZ/HLSS Transactions, if and when a transfer of legal ownership occurs, OLS will subservice the loans pursuant to a subservicing agreement, as amended, with NRZ. Beginning April 2017, NRZ has a general right to direct us to transfer servicing of the servicing agreements underlying the Rights to MSRs that we have previously sold to NRZ provided that the transfer is subject to our continued right to be paid the servicing fees and other amounts payable under our agreements. An exception to the requirement that the transfer is subject to our continued right to payment under the transferred servicing agreement exists in circumstances where a termination event (as defined in our agreements with NRZ) occurs. In these circumstances, NRZ may direct us to use commercially reasonable efforts to transfer servicing under the affected servicing agreement and, following the transfer, we would no longer be entitled to receive future servicing fee revenue with respect to the transferred servicing agreement. Regarding NRZ’s rights upon a termination event resulting from an uncured servicer rating downgrade, NRZ has agreed to a standstill until April 2017 unless they determine in good faith that a trustee intends to terminate servicing under an affected servicing agreement. In these circumstances, NRZ may direct us to use commercially reasonable efforts to transfer servicing under the affected servicing agreement and, following the transfer, we would no longer be entitled to receive future servicing fee revenue. All required third-party consents would need to be obtained in connection with any servicing transfer. To the extent servicing agreements underlying Rights to MSRs are terminated as a result of a termination event, NRZ is entitled to payment of an amount equal to a percentage of NRZ’s purchase price for the related Rights to MSRs. We paid NRZ $2.2 million through September 30, 2015 in connection with the termination of four servicing agreements underlying the Rights to MSRs. The NRZ/HLSS Transactions are accounted for as financings. If and when transfer of legal ownership of the underlying MSRs occurs upon receipt of third-party consents, we would 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 sales of the advances in connection with MSR sales, including the NRZ/HLSS Transactions, meet the requirements for sale accounting, and the advances are derecognized from our consolidated financial statements at the servicing transfer date, or, in the case of advances sold in connection with the sale of Rights to MSRs at time of the sale. In 2014, Ocwen sold advances related to certain FHA-insured mortgage loans to subsidiaries of NRZ. These advance sales did not qualify for sales treatment and were accounted for as financings. |
Loans Held for Sale
Loans Held for Sale | 9 Months Ended |
Sep. 30, 2015 | |
Receivables [Abstract] | |
Loans Held for Sale | Note 5 – Loans Held for Sale Loans Held for Sale - Fair Value Loans held for sale, at fair value, represent residential mortgage loans originated or purchased and held until sold to secondary market investors, such as the GSEs or other third parties. The following table summarizes the activity in the balance during the nine months ended September 30 : 2015 2014 Beginning balance $ 401,120 $ 503,753 Originations and purchases 3,119,457 3,923,870 Proceeds from sales (3,306,180 ) (4,010,644 ) Principal collections (6,512 ) (9,156 ) Transfers to loans held for investment - reverse mortgages — (110,874 ) Gain on sale of loans 37,580 39,486 Other (1) (9,556 ) (485 ) Ending balance $ 235,909 $ 335,950 (1) Other includes the change in fair value of $9.9 million and $1.2 million for the nine months ended September 30, 2015 and 2014, respectively. At September 30, 2015 , loans held for sale, at fair value with a UPB of $220.2 million were pledged to secure warehouse lines of credit in our Lending segment. 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 during the nine months ended September 30 : 2015 2014 Beginning balance $ 87,492 $ 62,907 Purchases 769,631 2,083,282 Proceeds from sales (577,591 ) (1,744,273 ) Principal collections (45,137 ) (248,552 ) Transfers to accounts receivable (4,811 ) (96,257 ) Transfers to real estate owned (18,479 ) (4,575 ) Gain on sale of loans 38,327 32,471 Decrease (increase) in valuation allowance 37,998 (16,282 ) Other 3,633 3,216 Ending balance (1) (2) $ 291,063 $ 71,937 (1) At September 30, 2015 and September 30, 2014 , the balances are net of valuation allowances of $15.4 million and $47.0 million , respectively. The decrease in the valuation allowance for the nine months ended September 30, 2015 resulted principally from the reversal of $37.8 million of the allowance that was associated with loans that were sold to unrelated third parties during the six months ended June 30, 2015. This decrease was partly offset by an increase of $1.1 million in the allowance resulting from transfers from the liability for indemnification obligations for the initial valuation adjustment that we recognized on certain loans that we repurchased from Fannie Mae and Freddie Mac guaranteed securitizations. For the nine months ended September 30, 2014 , the increase in the allowance was principally the result of $15.3 million of such transfers from the liability for indemnification obligations. (2) At September 30, 2015 and September 30, 2014 , the balances include $98.7 million and $24.1 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. At September 30, 2015 , Loans held for sale, at lower of cost or fair value with a UPB of $29.7 million were pledged to secure a warehouse line of credit in our Servicing segment. In March 2014, we purchased delinquent FHA-insured loans with a UPB of $549.4 million out of Ginnie Mae guaranteed securitizations 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 plus delinquent interest (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 a subsidiary of NRZ for $612.3 million ( $556.6 million for the Ginnie Mae EBO Loans and $55.7 million for the related servicing advances). We recognized a gain of $7.2 million on the sale of the loans. On May 1, 2014, we purchased a second group of delinquent FHA-insured loans with a UPB of $451.0 million through the Ginnie Mae EBO program for $479.6 million , including delinquent interest . On May 2, 2014, we sold the Ginnie Mae EBO Loans to an unrelated third party for $462.5 million and recognized a gain of $1.3 million , including the value assigned to the retained MSRs. Separately, we sold $20.2 million of the advances related to these loans to a subsidiary of NRZ. The sales of advances to the NRZ subsidiaries did not qualify for sales treatment and were accounted for as a financing. We refer to the purchase and sale of the Ginnie Mae EBO Loans and the sale of the related advances as the Ginnie Mae EBO Transactions. In March 2015, we recognized a gain of $12.9 million on sales of loans with a total UPB of $42.7 million to an unrelated third party. In May 2015, we recognized a gain of $7.2 million on sales of a second group of loans with a total UPB of $33.0 million to an unrelated third party. We had repurchased these loans under the representation and warranty provisions of our contractual obligations to the GSEs as primary servicer of the loans. Gain on Loans Held for Sale, Net The following table summarizes the activity in Gain on loans held for sale, net, during the three and nine months ended September 30 : Three Months Nine Months 2015 2014 2015 2014 Gain on sales of loans $ 34,038 $ 42,185 $ 130,425 $ 145,455 Change in fair value of IRLCs 4,956 (4,188 ) 3,944 (2,315 ) Change in fair value of loans held for sale 915 (9,348 ) (5,893 ) (97 ) Loss on economic hedge instruments (12,416 ) (1,145 ) (10,878 ) (32,183 ) Other losses (195 ) (286 ) (664 ) (819 ) $ 27,298 $ 27,218 $ 116,934 $ 110,041 Gains on loans held for sale, net include $9.5 million and $27.8 million for the three and nine months ended September 30, 2015 , respectively, representing the value assigned to MSRs retained on transfers of forward loans. For the three and nine months ended September 30, 2014 , gains attributed to retained MSRs were $10.7 million and $32.1 million , respectively. Also included in Gains on loans held for sale, net are a gain of $5.3 million and a gain of $18.3 million recorded during the three and nine months ended September 30, 2015 , respectively, on sales of repurchased Ginnie Mae loans, which are carried at the lower of cost or fair value. For the three and nine months ended September 30, 2014 , gains on sales of repurchased Ginnie Mae loans were $9.9 million and $50.6 million , respectively. Fair value gains recognized in connection with sales of reverse mortgages into Ginnie Mae guaranteed securitizations are also included in Gains on loans held for sale, net and amounted to $30.1 million and $91.1 million for the three and nine months ended September 30, 2015 , respectively. Fair value gains for the three and nine months ended September 30, 2014 were $20.4 million and $51.4 million , respectively. |
Advances
Advances | 9 Months Ended |
Sep. 30, 2015 | |
Advances [Abstract] | |
Advances | Note 6 – Advances Advances, net, which represent payments made on behalf of borrowers or on foreclosed properties, consisted of the following at the dates indicated: September 30, 2015 December 31, 2014 Servicing: Principal and interest $ 103,235 $ 128,217 Taxes and insurance 258,846 467,891 Foreclosures, bankruptcy and other (1) 150,898 293,340 512,979 889,448 Corporate Items and Other 4,399 4,466 $ 517,378 $ 893,914 (1) The balances at September 30, 2015 and December 31, 2014 are net of an allowance for losses of $60.4 million and $70.0 million , respectively. The following table summarizes the activity in advances for the nine months ended September 30 : 2015 2014 Beginning balance $ 893,914 $ 890,832 Acquisitions — 99,318 Transfers to match funded advances — (10,156 ) Sales of advances (224,756 ) — Collections of advances, net of new advances, and other (151,780 ) 7,292 Ending balance $ 517,378 $ 987,286 |
Match Funded Advances
Match Funded Advances | 9 Months Ended |
Sep. 30, 2015 | |
Transfers and Servicing [Abstract] | |
Match Funded Advances | Note 7 – Match Funded Advances Match funded advances on residential loans we service for others are comprised of the following at the dates indicated: September 30, 2015 December 31, 2014 Principal and interest $ 1,066,125 $ 1,349,048 Taxes and insurance 714,505 847,064 Foreclosures, bankruptcy, real estate and other 174,988 213,330 $ 1,955,618 $ 2,409,442 The following table summarizes the activity in match funded advances for the nine months ended September 30 : 2015 2014 Beginning balance $ 2,409,442 $ 2,552,383 Acquisitions — 85,521 Transfers from advances — 10,156 Sales of advances (96,408 ) — Collections of pledged advances, net of new advances, and other (357,416 ) (288,481 ) Ending balance $ 1,955,618 $ 2,359,579 |
Mortgage Servicing
Mortgage Servicing | 9 Months Ended |
Sep. 30, 2015 | |
Transfers and Servicing [Abstract] | |
Mortgage Servicing | Note 8 – Mortgage Servicing Mortgage Servicing Rights – Amortization Method The following table summarizes the activity in the carrying value of amortization method servicing assets for the nine months ended September 30 . Amortization of mortgage servicing rights is reported net of the amortization of any servicing liabilities and includes the amount of charges we recognized to increase servicing liability obligations, if any. 2015 2014 Beginning balance $ 1,820,091 $ 1,953,352 Fair value election - transfer to MSRs carried at fair value (1) (787,142 ) — Additions recognized in connection with business acquisitions — 20,378 Additions recognized in connection with asset acquisitions 10,055 19,338 Additions recognized on the sale of mortgage loans 27,791 50,480 Sales (591,605 ) (137 ) Servicing transfers and adjustments — (518 ) 479,190 2,042,893 Amortization (88,188 ) (186,075 ) Impairment (25,051 ) — Ending balance $ 365,951 $ 1,856,818 Estimated fair value at end of period $ 404,533 $ 2,364,393 (1) Effective January 1, 2015, we elected fair value accounting for a newly-created class of non-Agency MSRs, which were previously accounted for using the amortization method. This irrevocable election applies to all subsequently acquired or originated servicing assets and liabilities that have characteristics consistent with this class. We recorded a cumulative-effect adjustment of $52.0 million (before deferred income taxes of $9.2 million ) to retained earnings as of January 1, 2015 to reflect the excess of the fair value of these MSRs over their carrying amount. At December 31, 2014, the UPB of the loans related to the non-Agency MSRs for which the fair value election was made was $195.3 billion . Mortgage Servicing Rights—Fair Value Measurement Method This portfolio comprises servicing rights for which we elected the fair value option and includes Agency residential mortgage loans for which we previously hedged the related market risks and a new class of non-Agency residential mortgage loans for which we elected fair value as of January 1, 2015. The following table summarizes the activity related to fair value servicing assets for the nine months ended September 30 : 2015 2014 Agency Non-Agency Total Agency Beginning balance $ 93,901 $ — $ 93,901 $ 116,029 Fair value election - transfer from MSRs carried at amortized cost — 787,142 787,142 — Cumulative effect of fair value election — 52,015 52,015 — Sales (70,084 ) (1,234 ) (71,318 ) — Servicing transfers and adjustments — (1,139 ) (1,139 ) (934 ) Changes in fair value (1): Changes in valuation inputs or other assumptions (2,592 ) 12,031 9,439 (12,217 ) Realization of expected future cash flows and other changes (6,808 ) (75,888 ) (82,696 ) (930 ) Ending balance $ 14,417 $ 772,927 $ 787,344 $ 101,948 (1) Changes in fair value are recognized in Servicing and origination expense in the Unaudited Consolidated Statements 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 or an improving housing market (as prepayments increase) and increase in periods of rising interest rates or deteriorating housing market (as prepayments decrease). The following table summarizes the estimated change in the value of the MSRs that we carry at fair value as of September 30, 2015 given hypothetical shifts in lifetime prepayments and yield assumptions: Adverse change in fair value 10% 20% Weighted average prepayment speeds $ (68,927 ) $ (145,410 ) Discount rate (option-adjusted spread) $ (21,359 ) $ (39,902 ) The sensitivity analysis measures the potential impact on fair values based on these hypothetical changes, which in the case of our portfolio at September 30, 2015 are increased prepayment speeds and a decrease in the yield assumption. 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 September 30, 2015 Servicing (1) $ 238,108,447 $ — $ 238,108,447 Subservicing 49,960,702 180,877 50,141,579 $ 288,069,149 $ 180,877 $ 288,250,026 UPB at December 31, 2014 Servicing (1) $ 361,288,281 $ — $ 361,288,281 Subservicing 37,439,446 149,737 37,589,183 $ 398,727,727 $ 149,737 $ 398,877,464 UPB at September 30, 2014 Servicing (1) $ 360,919,248 $ — $ 360,919,248 Subservicing 50,360,366 216,111 50,576,477 $ 411,279,614 $ 216,111 $ 411,495,725 (1) Includes primary servicing UPB of $146.0 billion , $160.8 billion and $160.8 billion at September 30, 2015 , December 31, 2014 and September 30, 2014 , respectively, for which the Rights to MSRs have been sold to NRZ. Residential assets serviced includes foreclosed real estate. Residential assets serviced also includes small-balance commercial assets with a UPB of $1.9 billion , $2.3 billion and $2.4 billion at September 30, 2015 , December 31, 2014 and September 30, 2014 , respectively. Commercial assets consist of large-balance foreclosed real estate. A significant portion of the servicing agreements for our non-Agency servicing portfolio contain provisions where we could be terminated as servicer without compensation upon the failure of the serviced loans to meet certain portfolio delinquency or cumulative loss thresholds or in the event we fail to maintain required servicer ratings, among other provisions. As a result of the economic downturn of recent years, the portfolio delinquency and/or cumulative loss threshold provisions have been breached by many private-label securitizations in our non-Agency servicing portfolio. Terminations as servicer as a result of a breach of any of these provisions have been minimal. In the event we are terminated as servicer and the Rights to MSRs were sold, we are obligated to compensate NRZ. As a result of the transfer of servicing to another party during 2015 related to Rights to MSRs, we were required to reimburse NRZ $2.2 million in accordance with our agreements. Servicing Revenue The following table presents the components of servicing and subservicing fees for the three and nine months ended September 30 : Three Months Nine Months 2015 2014 2015 2014 Loan servicing and subservicing fees: Servicing $ 274,089 $ 331,794 $ 879,098 $ 1,039,033 Subservicing 14,354 30,926 72,968 95,509 288,443 362,720 952,066 1,134,542 Home Affordable Modification Program (HAMP) fees 32,318 37,644 108,698 111,000 Late charges 19,162 27,634 63,557 97,002 Loan collection fees 6,682 8,655 25,176 25,573 Custodial accounts (float earnings) 836 1,831 4,633 5,235 Other 12,576 27,480 49,411 74,744 $ 360,017 $ 465,964 $ 1,203,541 $ 1,448,096 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 Unaudited Consolidated Balance Sheets) amounted to $2.0 billion and $3.7 billion at September 30, 2015 and September 30, 2014 , respectively. |
Receivables
Receivables | 9 Months Ended |
Sep. 30, 2015 | |
Receivables [Abstract] | |
Receivables | Note 9 – Receivables Receivables consisted of the following at the dates indicated: September 30, 2015 December 31, 2014 Servicing: Government-insured loan claims (1) $ 67,690 $ 52,955 Due from custodial accounts 44,338 11,627 Reimbursable expenses 22,636 32,387 Other servicing receivables (2) 159,753 29,516 294,417 126,485 Income taxes receivable 63,572 68,322 Due from related parties (3) — 58,892 Other receivables (4) 30,369 43,690 388,358 297,389 Allowance for losses (1) (26,786 ) (26,793 ) $ 361,572 $ 270,596 (1) At September 30, 2015 and December 31, 2014 , the total allowance for losses includes $26.8 million and $26.8 million , respectively, related to receivables of our Servicing business. Allowance for losses related to defaulted FHA or VA insured loans repurchased from Ginnie Mae guaranteed securitizations (government-insured loan claims) at September 30, 2015 and December 31, 2014 were $13.2 million and $10.0 million , respectively. (2) At September 30, 2015 , other servicing receivables include $133.8 million related to sales of MSRs and advances. (3) Entities that we reported as related parties at December 31, 2014 are no longer considered to be related parties, and amounts receivable from them are now reported within Other receivables. (4) At December 31, 2014 , other receivables include $28.8 million related to losses to be indemnified under the terms of the Homeward merger agreement. On March 19, 2015, we reached an agreement with the former owner of Homeward for the final settlement of all indemnification claims under the merger agreement and received $38.1 million in cash. |
Other Assets
Other Assets | 9 Months Ended |
Sep. 30, 2015 | |
Other Assets [Abstract] | |
Other Assets | Note 10 – Other Assets Other assets consisted of the following at the dates indicated: September 30, 2015 December 31, 2014 Contingent loan repurchase asset (1) $ 310,373 $ 274,265 Debt service accounts (2) 123,023 91,974 Prepaid expenses 57,572 17,957 Prepaid lender fees and debt issuance costs, net 51,937 31,337 Real estate 18,247 16,720 Prepaid income taxes 12,921 16,450 Derivatives, at fair value 10,010 6,065 Mortgage backed securities, at fair value 8,541 7,335 Other 16,655 28,708 $ 609,279 $ 490,811 (1) In connection with the Ginnie Mae EBO Transactions, our agreements provide either that: (a) we have the right, but not the obligation, to repurchase previously transferred mortgage loans under certain conditions, including the mortgage loans becoming eligible for pooling under a program sponsored by Ginnie Mae, or (b) we have the obligation to repurchase previously transferred mortgage loans that have been subject to a successful trial modification before any permanent modification is made. Once these conditions are met, we have effectively regained control over the mortgage loan(s) and under GAAP, must re-recognize the loan on our consolidated balance sheet and establish a corresponding repurchase liability. With respect to those loans that we have the right, but not the obligation, to repurchase under the applicable agreement, this requirement applies regardless of whether we have any intention to repurchase the loan. We re-recognized mortgage loans in Other assets and the corresponding liability in Other liabilities. (2) Under our advance funding financing 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. |
Borrowings
Borrowings | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Borrowings | Note 11 – 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) September 30, 2015 December 31, 2014 Ocwen Freddie Servicer Advance Receivables Trust Series 2012-ADV1 (4) 1ML (3) + 175 bps Jun. 2017 Jun. 2015 $ — $ — $ 373,080 Ocwen Servicer Advance Funding (SBC) Note (5) 1ML + 300 bps Dec. 2015 Dec. 2014 — — 494 Advance Receivables Backed Notes, Series 2013-VF2, Cost of Funds + 191 bps Oct. 2045 Oct. 2015 — — 519,634 Advance Receivables Backed Notes, Series 2013-VF2, Cost of Funds + 343 bps Oct. 2045 Oct. 2015 — — 32,919 Advance Receivables Backed Notes - Series 2014-VF3, 1ML + 235 bps (7) Sep. 2046 Sep. 2016 100,547 263,244 552,553 Borrowing Type Interest Rate Maturity (1) Amortization Date (1) Available Borrowing Capacity (2) September 30, 2015 December 31, 2014 Advance Receivables Backed Notes - Series 2014-VF3, 1ML + 300 bps (7) Sep. 2046 Sep. 2016 4,604 12,551 — Advance Receivables Backed Notes - Series 2014-VF3, 1ML + 425 bps (7) Sep. 2046 Sep. 2016 5,154 13,825 — Advance Receivables Backed Notes - Series 2014-VF3, 1ML + 575 bps (7) Sep. 2046 Sep. 2016 13,572 36,503 — Advance Receivables Backed Notes - Series 2014-VF4, Class A (8) 1ML + 235 bps (8) Sep. 2046 Sep. 2016 100,547 263,244 552,553 Advance Receivables Backed Notes - Series 2014-VF4, Class B (8) 1ML + 300 bps (8) Sep. 2046 Sep. 2016 4,604 12,551 — Advance Receivables Backed Notes - Series 2014-VF4, Class C (8) 1ML + 425 bps (8) Sep. 2046 Sep. 2016 5,154 13,825 — Advance Receivables Backed Notes - Series 2014-VF4, Class D (8) 1ML + 575 bps (8) Sep. 2046 Sep. 2016 13,572 36,503 — Advance Receivables Backed Notes - Series 2015-VF5, Class A (9) 1ML + 235 bps (9) Sep. 2046 Sep. 2016 100,548 263,243 — Advance Receivables Backed Notes - Series 2015-VF5, Class B (9) 1ML + 300 bps (9) Sep. 2046 Sep. 2016 4,604 12,551 — Advance Receivables Backed Notes - Series 2015-VF5, Class C (9) 1ML + 425 bps (9) Sep. 2046 Sep. 2016 5,154 13,825 — Advance Receivables Backed Notes - Series 2015-VF5, Class D (9) 1ML + 575 bps (9) Sep. 2046 Sep. 2016 13,572 36,503 — Advance Receivables Backed Notes - Series 2015-T1, Class A (9) 2.5365% Sep. 2046 Sep. 2016 — 244,809 — Advance Receivables Backed Notes - Series 2015-T1, Class B (9) 3.0307% Sep. 2046 Sep. 2016 — 10,930 — Advance Receivables Backed Notes - Series 2015-T1, Class C (9) 3.5240% Sep. 2046 Sep. 2016 — 12,011 — Advance Receivables Backed Notes - Series 2015-T1, Class D (9) 4.1000% Sep. 2046 Sep. 2016 — 32,250 — Total Ocwen Master Advance Receivables Trust (OMART) 371,632 1,278,368 1,657,659 Advance Receivables Backed Notes, Series 2014-VF1, Cost of Funds + 275 bps Dec. 2045 Dec. 2015 6,762 16,548 21,192 Advance Receivables Backed Notes, Series 2014-VF1, Cost of Funds + 325 bps Dec. 2045 Dec. 2015 11,482 10,918 13,598 Borrowing Type Interest Rate Maturity (1) Amortization Date (1) Available Borrowing Capacity (2) September 30, 2015 December 31, 2014 Advance Receivables Backed Notes, Series 2014-VF1, Cost of Funds + 375 bps Dec. 2045 Dec. 2015 8,920 8,230 10,224 Advance Receivables Backed Notes, Series 2014-VF1, Cost of Funds + 470 bps Dec. 2045 Dec. 2015 13,366 11,274 14,000 Total Ocwen Servicer Advance Receivables Trust III (OSARTIII) (10) 40,530 46,970 59,014 Advance Receivables Backed Notes, Series 2015-VF1, 1ML + 212.5 bps Jun. 2046 Jun. 2016 22,661 159,539 — Advance Receivables Backed Notes, Series 2015-VF1, 1ML + 300 bps Jun. 2046 Jun. 2016 3,354 15,946 — Advance Receivables Backed Notes, Series 2015-VF1, 1ML + 350 bps Jun. 2046 Jun. 2016 2,026 7,874 — Advance Receivables Backed Notes, Series 2015-VF1, 1ML + 425 bps Jun. 2046 Jun. 2016 2,451 11,149 — Advance Receivables Backed Notes, Series 2015-T1, 2.062% Nov. 2045 Nov. 2015 — 57,100 — Advance Receivables Backed Notes, Series 2015-T1, 2.557% Nov. 2045 Nov. 2015 — 5,400 — Advance Receivables Backed Notes, Series 2015-T1, 3.051% Nov. 2045 Nov. 2015 — 1,900 — Advance Receivables Backed Notes, Series 2015-T1, 3.790% Nov. 2045 Nov. 2015 — 5,600 — Total Ocwen Freddie Advance Funding Facility (OFAF) (11) 30,492 264,508 — $ 442,654 $ 1,589,846 $ 2,090,247 Weighted average interest rate 2.91 % 1.97 % (1) The amortization date of our advance financing facilities is the date on which the revolving period ends under each advance financing 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 each of our 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(s) outstanding, and any new advances are ineligible to be financed. (2) Borrowing capacity is available to us only to the extent that we have pledged collateral available to borrow against. At September 30, 2015 , $176.9 million of the total borrowing capacity was available to us based on the amount of eligible collateral that had been pledged. (3) 1-Month LIBOR (1ML) was 0.19% and 0.17% at September 30, 2015 and December 31, 2014 , respectively. (4) We repaid this facility in full in June 2015 from the proceeds of the OFAF facility. (5) We voluntarily terminated this facility on January 15, 2015 . (6) The Series 2013-VF2 Notes were repaid in full on September 18, 2015 . (7) On September 18, 2015, the combined maximum borrowing capacity of Series 2014-VF3 Notes, a series of variable funding notes under our Ocwen Master Advance Receivables Trust (OMART) facility, was reduced to $450.0 million , and the Class B, C and D Notes were issued. There is a floor of 75 bps for 1 ML in determining the interest rate for variable rate Notes. (8) Effective July 1, 2015, the single outstanding Series 2014-VF4 Note under our OMART facility was replaced by four Notes - Class A, B, C and D. On September 18, 2015, the combined maximum borrowing capacity of the Series 2014-VF4 Notes was reduced to $450.0 million . There is a floor of 75 bps for 1 ML in determining the interest rate for variable rate Notes. (9) The Series 2015-VF5 Notes and the Series 2015-T1 Notes under our OMART facility were issued on September 18, 2015. Under the terms of the agreement, we must continue to borrow the full amount of the Series 2015-T1 Notes until the amortization date. If there is insufficient collateral to support the level of borrowing, the excess cash proceeds are not distributed to Ocwen but are held by the trustee, and interest expense continues to be based on the full amount of the term notes. There is a floor of 75 bps for 1 ML in determining the interest for variable rate Notes. (10) Effective April 23, 2015, the maximum borrowing under the Ocwen Servicer Advance Receivables Trust III (OSARTIII) facility decreases by $6.3 million per month until it is reduced to $75.0 million . (11) We entered into Ocwen Freddie Advance Funding Facility (OFAF) facility on June 10, 2015. Under the terms of the agreement, we must continue to borrow the full amount of the Series 2015-T1 and Series 2015-T2 Notes until the amortization date. If there is insufficient collateral to support the level of borrowing, the excess cash proceeds are not distributed to Ocwen but are held by the trustee, and interest expense continues to be based on the full amount of the term notes. The Series 2015-T2 Notes with a combined borrowing capacity of $155.0 million expired and were fully repaid on September 15, 2015 . Pursuant to our agreements with NRZ, NRZ has assumed the obligation to fund new servicing advances with respect to the Rights to MSRs. We are dependent upon NRZ for financing of the servicing advance obligations for MSRs where we are the servicer. NRZ currently uses advance financing facilities in order to fund a substantial portion of the servicing advances that they are contractually obligated to make pursuant to our agreements with them. As of September 30, 2015 , we were the servicer on Rights to MSRs sold to NRZ pertaining to approximately $146.0 billion in UPB and the associated outstanding servicing advances as of such date were approximately $5.1 billion . Should NRZ’s advance financing facilities fail to perform as envisaged or should NRZ otherwise be unable to meet its advance financing obligations, our liquidity, financial condition and business could be materially and adversely affected. As the servicer, we are contractually required under our servicing agreements to make the relevant servicing advances even if NRZ does not perform its contractual obligations to fund those advances. In addition, although we are not an obligor or guarantor under NRZ’s advance financing facilities, we are a party to certain of the facility documents as the servicer of the underlying loans on which advances are being financed. As the servicer, we make certain representations, warranties and covenants, including representations and warranties in connection with our sale of advances to NRZ. In the first quarter, a purported owner of notes issued by one of NRZ’s advance financing facilities asserted in letters written to the indenture trustee that events of default had occurred under the indenture governing those notes based on alleged failures by us to comply with applicable laws and regulations and the terms of the servicing agreements to which the applicable servicing advances relate. We vigorously defended ourselves against these allegations. The indenture trustee filed an instructional proceeding in California state probate court seeking an instruction from the court relating to the allegations since, after a seven-month investigation, the trustee had been unable to conclude that an event of default had occurred. On October 14, 2015, the court entered an order declaring and ordering, among other things, that no event of default had occurred under the indenture. Financing Liabilities Financing liabilities are comprised of the following at the dates indicated: Borrowings Collateral Interest Rate Maturity September 30, 2015 December 31, 2014 Servicing: Financing liability – MSRs pledged MSRs (1) (1) $ 560,059 $ 614,441 Secured Notes, Ocwen Asset Servicing Income Series, Series 2014-1 (2) MSRs (2) Feb. 2028 100,000 111,459 Financing Liability – Advances Pledged (3) Advances on loans (3) (3) 63,855 88,489 723,914 814,389 Lending: HMBS-related borrowings (4) Loans held for investment (LHFI) 1ML + 248 bps (4) 2,229,604 1,444,252 $ 2,953,518 $ 2,258,641 (1) This financing liability arose in connection with the NRZ/HLSS Transactions and has no contractual maturity. The balance of the liability is adjusted each reporting period to its fair value based on the present value of the estimated future cash flows underlying the related MSRs. (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 sales of advances in 2014 did not qualify for sales accounting treatment and were accounted for as a financing. (4) 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. Other Secured Borrowings Other secured borrowings are comprised of the following at the dates indicated: Borrowings Collateral Interest Rate Maturity Available Borrowing Capacity September 30, 2015 December 31, 2014 Servicing: SSTL (1) (1) 1-Month Euro-dollar rate + 375 bps with a Eurodollar floor of 125 bps (1) Feb. 2018 $ — $ 705,927 $ 1,277,250 Master repurchase agreement (2) Loans held for sale (LHFS) 1ML + 200 - 345 bps Jul. 2016 23,871 26,129 32,018 23,871 732,056 1,309,268 Borrowings Collateral Interest Rate Maturity Available Borrowing Capacity September 30, 2015 December 31, 2014 Lending: Master repurchase agreement (3) LHFS 1ML + 200 bps Aug. 2016 68,618 131,382 208,010 Participation agreement (4) LHFS N/A Apr. 2016 — 46,597 41,646 Participation agreement (5) LHFS N/A Apr. 2016 — 33,864 196 Master repurchase agreement (6) LHFS 1ML + 175 - 275 bps Jul. 2015 — — 102,073 Master repurchase agreement (7) LHFI 1ML + 275bps Jul. 2015 — — 52,678 Mortgage warehouse agreement (8) LHFI 1ML + 275 bps; floor of 350 bps May 2016 — 60,180 23,851 68,618 272,023 428,454 92,489 1,004,079 1,737,722 Discount - SSTL — (3,009 ) (4,031 ) $ 92,489 $ 1,001,070 $ 1,733,691 Weighted average interest rate 4.42 % 4.33 % (1) 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 subject to a base rate floor of 2.25% or (b) the one month Eurodollar rate, plus a margin of 3.75% and subject to a one month Eurodollar floor of 1.25% . To date we have elected option (b) to determine the interest rate. On October 16, 2015, we entered into an amendment to the SSTL facility agreement pursuant to which, among other things, the Eurodollar margin was increased from 3.75% to 4.25% , effective October 20, 2015. See Note 21 – Subsequent Events for additional information. (2) On September 30, 2015, this repurchase agreement was renewed through September 29, 2016. Under this repurchase agreement, the lender provides financing on a committed basis for $50.0 million and, at the discretion of the lender, on an uncommitted basis for an additional $50.0 million . (3) On August 25, 2015, this repurchase agreement was renewed through August 23, 2016. Borrowing capacity was reduced from $300.0 million , of which $150.0 million was provided on an uncommitted basis, to $200.0 million all of which is provided on a committed basis. (4) Under this participation agreement, the lender provides financing for $100.0 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) Under this participation agreement, the lender provides financing for $150.0 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. (6) On April 16, 2015 , this facility was voluntarily terminated. (7) This facility was allowed to expire. (8) Borrowing capacity of $100.0 million under this facility is available at the discretion of the lender. This facility was renewed on August 24, 2015, and the borrowing capacity was increased from $60.0 million to $100.0 million . Senior Unsecured Notes On May 12, 2014, Ocwen completed the issuance and sale of $350.0 million of its 6.625% Senior Notes due 2019 (the Senior Unsecured Notes) in a private offering. The Senior Unsecured Notes are general senior unsecured obligations of Ocwen and will mature on May 15, 2019 . Interest is payable semi-annually on May 15 th and November 15 th . The Senior Unsecured Notes are not guaranteed by any of Ocwen’s subsidiaries. Ocwen entered into a Registration Rights Agreement under which it agreed for the benefit of the initial purchasers of the Senior Unsecured Notes to use commercially reasonable efforts to file an exchange offer registration statement, to have the exchange offer registration statement become effective and to complete the exchange offer on or prior to 270 days after the closing of the offering. Because the exchange offer was not completed on or before 270 days after the closing of the offering, we began paying additional interest on the Senior Unsecured Notes and will continue to pay the additional interest until the exchange offer is completed. At September 30, 2015, we were paying additional interest at a rate of 0.75% per annum. The additional interest rate will increase to its maximum of 1.00% per annum in November 2015. In connection with our issuance of the Senior Unsecured Notes, we incurred certain costs that we capitalized and are amortizing over the period from the date of issuance to May 15, 2019 . The unamortized balance of these issuance costs was $4.8 million at September 30, 2015 . Covenants Under the terms of our debt agreements, we are subject to various qualitative and quantitative covenants. Collectively, these covenants include: • Financial covenants; • Covenants to operate in material compliance with applicable laws; • Restrictions on our ability to engage in various activities, including but not limited to incurring additional debt, paying dividends, repurchasing or redeeming capital stock, transferring assets or making loans, investments or acquisitions; • Monitoring and reporting of various specified transactions or events, including specific reporting on defined events affecting collateral underlying certain debt agreements; and • Requirements to provide audited financial statements within specified timeframes, including a requirement under our SSTL that Ocwen’s financial statements and the related audit report be unqualified as to going concern. Financial covenants in our debt agreements require that we maintain, among other things: • a specified interest coverage ratio, which is defined under our SSTL as the ratio of four quarter adjusted EBITDA to four quarter interest expense (each as defined therein); • a specified corporate leverage ratio, which is defined under our SSTL as consolidated corporate debt to four quarter adjusted EBITDA (each as defined therein); • a specified consolidated total debt to consolidated tangible net worth ratio; • a specified loan to collateral value ratio, as defined under our SSTL; and • specified levels of tangible net worth and liquidity at the consolidated and OLS levels. As a result of an amendment of our SSTL agreement that we entered into on October 16, 2015, the interest coverage ratio and corporate leverage ratio financial covenants have been removed until the fiscal quarter ending June 30, 2017. See Note 21 – Subsequent Events for additional information. As of September 30, 2015 , the most restrictive consolidated tangible net worth requirement was for a minimum of $1.1 billion at OLS under our match funded debt agreements and the Servicing master repurchase agreement. As a result of the covenants to which we are subject, we may be limited in the manner in which we conduct our business and may be limited in our ability to engage in favorable business activities or raise additional capital to finance future operations or satisfy future liquidity needs. In addition, breaches or events that may result in a default under our debt agreements include, among other things, noncompliance with our covenants, nonpayment of principal or interest, material misrepresentations, the occurrence of a material adverse change, insolvency, bankruptcy, certain material judgments and changes of control. Covenants and default provisions of this type are commonly found in debt agreements such as ours. Certain of these covenants and default provisions are open to subjective interpretation and, if our interpretation were contested by a lender, a court may ultimately be required to determine compliance or lack thereof. In addition, our debt agreements generally include cross default provisions such that a default under one agreement could trigger defaults under other agreements. If we fail to comply with our debt agreements and are unable to avoid, remedy or secure a waiver of any resulting default, we may be subject to adverse action by our lenders, including termination of further funding, acceleration of outstanding obligations, enforcement of liens against the assets securing or otherwise supporting our obligations and other legal remedies. Our lenders can waive their contractual rights in the event of a default. We believe that we are in compliance with all of the qualitative and quantitative covenants in our debt agreements as of the date of these financial statements. |
Other Liabilities
Other Liabilities | 9 Months Ended |
Sep. 30, 2015 | |
Other Liabilities Disclosure [Abstract] | |
Other Liabilities | Note 12 – Other Liabilities Other liabilities were comprised of the following at the dates indicated: September 30, 2015 December 31, 2014 Contingent loan repurchase liability (1) $ 310,373 $ 274,265 Accrued expenses 167,412 142,592 Liability for indemnification obligations 86,873 132,918 Liability for uncertain tax positions (2) 48,700 28,436 Checks held for escheat 16,131 18,513 Payable to loan servicing and subservicing investors 13,856 67,722 Due to related parties (3) — 55,585 Other (4) (5) 392,820 73,503 $ 1,036,165 $ 793,534 (1) In connection with the Ginnie Mae EBO Transactions, we have re-recognized certain loans on our consolidated balance sheets and establish a corresponding repurchase liability regardless of our intention to repurchase the loan. (2) We file various U.S. federal, state and local, and foreign tax returns. The tax years in our major jurisdictions that remain subject to examination are our U.S. federal tax returns for the years ended December 31, 2008 through to the current tax year, our USVI corporate tax returns for the years ended December 31, 2012 through to the current tax year, and our India corporate tax returns for the years ended March 31, 2005 through to the current tax year. Our U.S. federal tax returns for the years ended December 31, 2008 , 2009 , and 2010 , our U.S. federal tax return for the year ended December 31, 2012 , and the U.S. federal tax return for our USVI subsidiary, OMS, for the year ended December 31, 2012 are currently under examination by the Internal Revenue Service (IRS). Although we are confident in the merits of our tax positions under examination, considering the current status of the various IRS examinations and our assessment of tax reserves for all open tax years, we increased our liability for uncertain tax positions by approximately $19.2 million and $20.2 million for the three and nine months ended September 30, 2015, respectively. We believe our liability for uncertain tax positions as of September 30, 2015 is appropriate. It is reasonably possible that there could be a change in the amount of our uncertain tax positions within the next 12 months due to activities of various worldwide taxing authorities, including proposed assessments of additional tax, possible settlement of tax audit issues, or the expiration of applicable statutes of limitations. An estimate of the change in our uncertain tax positions within the next 12 months cannot be made at this time. (3) Entities that we reported as related parties at December 31, 2014 are no longer considered to be related parties, and amounts payable to them are now reported within Other. (4) The balance at September 30, 2015 includes $180.4 million due in connection with the repurchase of loans from Ginnie Mae securitizations. The repurchased loans are classified as held for sale and carried at the lower of cost or fair value at September 30, 2015. On October 1, 2015, we settled this liability and sold these loans. (5) The balance at September 30, 2015 includes $80.0 million received prior to the closing of the related sale of MSRs and advances which is expected to occur by early November 2015. |
Derivative Financial Instrument
Derivative Financial Instruments and Hedging Activities | 9 Months Ended |
Sep. 30, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments and Hedging Activities | Note 13 – 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 nine months ended September 30, 2015 : IRLCs Forward MBS Trades (1) Interest Rate Caps Interest Rate Swaps Beginning notional balance $ 239,406 $ 703,725 $ 1,729,000 $ — Additions 4,210,647 6,248,108 2,179,333 450,000 Amortization — — (439,333 ) — Maturities (3,727,042 ) (3,414,877 ) — — Terminations (337,938 ) (2,864,057 ) — (450,000 ) Ending notional balance $ 385,073 $ 672,899 $ 3,469,000 $ — Fair value of derivative assets (liabilities) at: September 30, 2015 $ 10,010 $ (3,438 ) $ 1,501 $ — December 31, 2014 $ 6,065 $ (2,854 ) $ 567 $ — Maturity Oct. 2015 - Dec. 2015 Nov. 2015 - Dec. 2015 Nov. 2016 - Oct. 2017 N/A (1) As loans are originated and sold or as loan commitments expire, our forward MBS trade positions mature and are replaced by new positions based upon new loan commitments and originations and expected time to sell. Foreign Currency Exchange Rate Risk Management Our operations in India and the Philippines expose us to foreign currency exchange rate risk, but we currently do not consider this risk to be significant. Interest Rate Management Match Funded Liabilities As required by 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 that 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 A loan commitment binds us (subject to the loan approval process) to fund the loan at the specified rate, regardless of whether interest rates have changed between the commitment date and the loan funding date. As such, 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 both fixed and variable rate loan commitments. The following summarizes our open derivative positions at September 30, 2015 and the gains (losses) on all derivatives used in each of the identified hedging programs for the year to date period then ended. None of the derivatives was designated as a hedge for accounting purposes at September 30, 2015 : Purpose Expiration Date Notional Amount Fair Value (1) Gains / (Losses) Consolidated Statements of Operations Caption Interest rate risk of borrowings Interest rate caps (2) Nov. 2016 - Oct. 2017 $ 3,469,000 $ 1,501 $ (1,613 ) Other, net Interest rate risk of mortgage loans held for sale and of IRLCs Forward MBS trades Nov. 2015 - Dec 2015 672,899 (3,438 ) (10,878 ) Gain on loans held for sale, net IRLCs Oct. 2015 - Nov. 2015 385,073 10,010 3,944 Gain on loans held for sale, net Total derivatives $ 8,073 $ (8,547 ) (1) Derivatives are reported at fair value in Receivables, Other assets or in Other liabilities on our Unaudited Consolidated Balance Sheets. (2) To hedge the effect of changes in 1ML on advance funding facilities. Included in AOCL at September 30, 2015 and 2014 , respectively, were $1.9 million and $9.2 million of deferred unrealized losses, before taxes of $0.1 million and $0.5 million , respectively, on interest rate swaps that we designated as cash flow hedges. Changes in AOCL during the nine months ended September 30 were as follows: 2015 2014 Beginning balance $ 8,413 $ 10,151 Losses on terminated hedging relationships amortized to earnings (6,916 ) (1,579 ) Decrease in deferred taxes on accumulated losses on cash flow hedges 389 217 Decrease in accumulated losses on cash flow hedges, net of taxes (6,527 ) (1,362 ) Other, net of taxes — (5 ) Ending balance $ 1,886 $ 8,784 As of September 30, 2015 , amortization of accumulated losses on cash flow hedges from AOCL to Other income (expense), net is projected to be $0.3 million during the next twelve months. To the extent we sell the MSRs to which the accumulated losses on cash flow hedges applied, a proportionate amount of the remaining unamortized accumulated losses associated with the MSRs sold is recognized in earnings at that time. Other income (expense), net, includes the following related to derivative financial instruments for the three and nine months ended September 30 : Three Months Nine Months 2015 2014 2015 2014 Losses on economic hedges $ (738 ) $ (6 ) $ (1,613 ) $ (374 ) Write-off of losses in AOCL for a discontinued hedge relationship (523 ) (408 ) (6,916 ) (1,580 ) $ (1,261 ) $ (414 ) $ (8,529 ) $ (1,954 ) |
Interest Expense
Interest Expense | 9 Months Ended |
Sep. 30, 2015 | |
Other Income and Expenses [Abstract] | |
Interest Expense | Note 14 – Interest Expense The following table presents the components of interest expense for the three and nine months ended September 30 : Three months Nine Months 2015 2014 2015 2014 Financing liabilities (1)(2)(3) $ 73,866 $ 88,246 $ 222,067 $ 281,930 Other secured borrowings 19,822 20,790 68,447 62,359 Match funded liabilities 15,425 15,097 45,379 46,762 6.625% Senior unsecured notes 6,741 6,141 19,521 9,466 Other 2,459 2,775 7,192 8,612 $ 118,313 $ 133,049 $ 362,606 $ 409,129 (1) Includes interest expense related to financing liabilities recorded in connection with the NRZ/HLSS Transactions as indicated in the table below. Three months Nine Months 2015 2014 2015 2014 Servicing fees collected on behalf of NRZ $ 175,994 $ 177,113 $ 531,399 $ 553,423 Less: Subservicing fee retained by Ocwen 91,597 83,550 272,802 266,514 Net servicing fees remitted to NRZ 84,397 93,563 258,597 286,909 Less: Reduction in financing liability 21,160 8,736 52,159 12,960 Interest expense on NRZ financing liability $ 63,237 $ 84,827 $ 206,438 $ 273,949 (2) Includes $8.2 million and $8.5 million for the three and nine months ended September 30, 2015 , respectively, of fees incurred in connection with our agreement to compensate NRZ for certain increased costs associated with its servicing advance financing facilities that are the direct result of a downgrade of our S&P servicer rating. (3) Interest expense that we expect to be paid on the HMBS-related borrowings is included with net fair value gains in Other revenues. |
Basic and Diluted Earnings per
Basic and Diluted Earnings per Share | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Earnings per Share | Note 15 – Basic and Diluted Earnings per Share Basic earnings per share 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 earnings per share by dividing net income attributable to Ocwen, as adjusted to add back any 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 preferred stock. The following is a reconciliation of the calculation of basic earnings per share to diluted earnings per share for the three and nine months ended September 30 : Three Months Nine Months 2015 2014 2015 2014 Basic earnings per share: Net income (loss) attributable to Ocwen common stockholders $ (66,869 ) $ (76,189 ) $ (22,776 ) $ 49,273 Weighted average shares of common stock 125,383,639 130,551,197 125,322,742 133,318,381 Basic earnings (loss) per share $ (0.53 ) $ (0.58 ) $ (0.18 ) $ 0.37 Diluted earnings per share (1): Net income (loss) attributable to Ocwen common stockholders $ (66,869 ) $ (76,189 ) $ (22,776 ) $ 49,273 Preferred stock dividends (2) — — — — Adjusted net income (loss) attributable to Ocwen $ (66,869 ) $ (76,189 ) $ (22,776 ) $ 49,273 Weighted average shares of common stock 125,383,639 130,551,197 125,322,742 133,318,381 Effect of dilutive elements (1): Preferred stock (2) — — — — Stock options — — — 3,558,689 Common stock awards — — — 4,256 Dilutive weighted average shares of common stock 125,383,639 130,551,197 125,322,742 136,881,326 Diluted earnings (loss) per share $ (0.53 ) $ (0.58 ) $ (0.18 ) $ 0.36 Stock options and common stock awards excluded from the computation of diluted earnings per share: Anti-dilutive (3) 2,037,872 91,250 1,965,049 47,083 Market-based (4) 924,438 295,000 924,438 295,000 (1) For the three and nine months ended September 30, 2015 and for three months ended September 30, 2014, we have excluded the effect of preferred stock, stock options and common stock awards from the computation of diluted earnings per share because of the anti-dilutive effect of our reported net loss. (2) Prior to the conversion of our remaining preferred stock into common stock in July 2014, we computed the effect on diluted earnings per share using the if-converted method. For purposes of computing diluted earnings per share, we assume the conversion of the preferred stock into shares of common stock unless the effect is anti-dilutive. Conversion of the preferred stock was not assumed for the nine months ended September 30, 2014 because the effect would have been antidilutive. (3) These options were anti-dilutive because their exercise price was greater than the average market price of our stock. (4) 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 | 9 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [Abstract] | |
Business Segment Reporting | Note 16 – 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, broker relationships and directly with mortgage customers. 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 revenues and expenses that are not directly related to other reportable segments, business activities that are individually insignificant, interest income on short-term investments of cash, interest expense on corporate debt and certain corporate expenses. Business activities not currently considered to be of continuing significance include residential subprime non-Agency loans held for sale (at lower of cost or fair value), investments in residential mortgage-backed securities and affordable housing investment activities. 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 Results of Operations Three months ended September 30, 2015 Revenue (1) $ 374,936 $ 29,662 $ 348 $ — $ 404,946 Expenses (1) (2) 318,439 23,126 46,161 — 387,726 Other income (expense): Interest income 1,175 3,883 635 — 5,693 Interest expense (109,357 ) (2,256 ) (6,700 ) — (118,313 ) Other (1) 38,943 425 114 — 39,482 Other income (expense), net (69,239 ) 2,052 (5,951 ) — (73,138 ) Income (loss) before income taxes $ (12,742 ) $ 8,588 $ (51,764 ) $ — $ (55,918 ) Three months ended September 30, 2014 Revenue (1) $ 485,303 $ 26,877 $ 1,557 $ (39 ) $ 513,698 Expenses (1) (2) 313,964 22,632 118,482 (39 ) 455,039 Other income (expense): Interest income 903 4,825 865 — 6,593 Interest expense (124,106 ) (2,601 ) (6,342 ) — (133,049 ) Other (1) (3,618 ) 139 (990 ) — (4,469 ) Other income (expense), net (126,821 ) 2,363 (6,467 ) — (130,925 ) Income (loss) before income taxes $ 44,518 $ 6,608 $ (123,392 ) $ — $ (72,266 ) Servicing Lending Corporate Items and Other Corporate Eliminations Business Segments Consolidated Nine months ended September 30, 2015 Revenue (1) $ 1,269,269 $ 106,721 $ 2,709 $ (58 ) $ 1,378,641 Expenses (1) (2) 940,764 73,497 104,133 (58 ) 1,118,336 Other income (expense): Interest income 3,232 11,025 2,049 — 16,306 Interest expense (336,088 ) (7,058 ) (19,460 ) — (362,606 ) Other (1) 82,909 1,826 671 — 85,406 Other income (expense), net (249,947 ) 5,793 (16,740 ) — (260,894 ) Income (loss) before income taxes $ 78,558 $ 39,017 $ (118,164 ) $ — $ (589 ) Nine months ended September 30, 2014 Revenue (1) $ 1,526,606 $ 86,811 $ 4,734 $ (118 ) $ 1,618,033 Expenses (1) (2) 919,998 81,261 148,555 (118 ) 1,149,696 Other income (expense): Interest income 1,805 13,117 2,550 — 17,472 Interest expense (391,122 ) (8,271 ) (9,736 ) — (409,129 ) Other (1) (4,622 ) 3,846 710 — (66 ) Other income (expense), net (393,939 ) 8,692 (6,476 ) — (391,723 ) Income (loss) before income taxes $ 212,669 $ 14,242 $ (150,297 ) $ — $ 76,614 Servicing Lending Corporate Items and Other Corporate Eliminations Business Segments Consolidated Total Assets September 30, 2015 $ 4,681,176 $ 2,571,893 $ 757,985 $ — $ 8,011,054 December 31, 2014 $ 5,881,862 $ 1,963,729 $ 421,687 $ — $ 8,267,278 September 30, 2014 $ 6,059,359 $ 1,706,964 $ 589,317 $ — $ 8,355,640 (1) Intersegment billings for services rendered to other segments are recorded as revenues, as contra-expense or as other income, depending on the type of service that is rendered. (2) Depreciation and amortization expense are as follows: Servicing Lending Corporate Items and Other Business Segments Consolidated For the three months ended September 30, 2015 Depreciation expense $ 694 $ 96 $ 4,256 $ 5,046 Amortization of mortgage servicing rights 18,023 85 — 18,108 Amortization of debt discount 329 — — 329 Amortization of debt issuance costs 2,981 — 344 3,325 For the three months ended September 30, 2014 Depreciation expense $ 2,636 $ 98 $ 3,022 $ 5,756 Amortization of mortgage servicing rights 60,689 94 — 60,783 Amortization of debt discount 331 — — 331 Amortization of debt issuance costs 1,114 — 344 1,458 For the nine months ended September 30, 2015 Depreciation expense $ 1,736 $ 292 $ 11,439 $ 13,467 Amortization of mortgage servicing rights 87,926 262 — 88,188 Amortization of debt discount 1,022 — — 1,022 Amortization of debt issuance costs 9,336 — 1,049 10,385 For the nine months ended September 30, 2014 Depreciation expense $ 8,099 $ 235 $ 8,267 $ 16,601 Amortization of mortgage servicing rights 185,263 613 199 186,075 Amortization of debt discount 991 — — 991 Amortization of debt issuance costs 3,241 — 513 3,754 |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 17 – Related Party Transactions Ocwen’s former Executive Chairman, William C. Erbey, also formerly served as chairman of the boards of Altisource Portfolio Solutions, S.A. (Altisource), HLSS, Altisource Residential Corporation (Residential) and Altisource Asset Management Corporation (AAMC). As a result, he had obligations to Ocwen as well as to Altisource, HLSS, Residential and AAMC. Effective January 16, 2015, Mr. Erbey resigned as an officer and director of Ocwen. Effective on that same date, Mr. Erbey also resigned from the boards of Altisource, HLSS, Altisource Residential and AAMC. Following his resignation, effective as of January 16, 2015, Mr. Erbey has no directorial, management, oversight, consulting or any other role at Ocwen, and we are expressly prohibited from providing any non-public information about Ocwen to Mr. Erbey pursuant to our settlement with the NY DFS. As a result of these and other relevant facts and circumstances, we believe that from and after January 17, 2015 Mr. Erbey does not possess the power, direct or indirect, to direct or cause the direction of our management and policies and, accordingly, we do not consider Altisource, HLSS, Residential or AAMC to be related parties. Revenues and expenses related to these agreements for the period from January 1 to January 16, 2015 are not significant and have not been disclosed. Absent a change in circumstances, we do not expect that we will consider any of these entities to be related parties in future periods. The following table summarizes revenues and expenses related to our agreements with Altisource, HLSS (prior to the sale of its assets to NRZ), AAMC and Residential (and, as applicable, their subsidiaries) for the 2014 periods presented and the amounts receivable or payable at December 31, 2014. See Note 19 — Commitments for additional discussion of our long-term agreements with Altisource and Residential. See Note 4 — Sales of Advances and MSRs , Note 5 – Loans Held for Sale , Note 8 – Mortgage Servicing and Note 11 – Borrowings for additional discussion of the HLSS and EBO transactions. For the Three Months Ended For the Nine Months Ended Revenues and Expenses: Altisource agreements Revenues $ 10,716 $ 30,007 Expenses 27,099 70,577 HLSS support services agreement Revenues $ 84 $ 458 Expenses 345 1,590 AAMC support services and facilities agreements Revenues $ 251 $ 952 Residential servicing agreement Revenues $ 4,618 $ 12,141 Net Receivable (Payable) December 31, 2014 Altisource $ (4,909 ) HLSS 7,884 AAMC 232 Residential 100 $ 3,307 |
Regulatory Requirements
Regulatory Requirements | 9 Months Ended |
Sep. 30, 2015 | |
Brokers and Dealers [Abstract] | |
Regulatory Requirements | Note 18 – Regulatory Requirements Our business is subject to extensive regulation by federal, state and local governmental authorities, including the CFPB, HUD, SEC and various state agencies that license, audit and conduct examinations of our mortgage servicing, origination and collection activities. In addition, we operate under a number of regulatory settlements that subject us to ongoing monitoring or reporting. From time to time, we also receive requests from federal, state and local agencies for records, documents and information relating to the policies, procedures and practices of our mortgage servicing, origination and collection activities. The GSEs and their conservator, the Federal Housing Finance Authority (FHFA), Ginnie Mae, the United States Treasury Department, 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 to meet the requirements of the changing environment in which we operate. We devote substantial resources to regulatory compliance, while, at the same time, striving to meet the needs and expectations of our customers, clients and other stakeholders. Our failure to comply with applicable federal, state and local laws, regulations and licensing requirements could lead to any of the following (i) loss of our licenses and approvals to engage in our servicing and lending businesses, (ii) governmental investigations and enforcement actions, (iii) administrative fines and penalties and litigation, (iv) civil and criminal liability, including class action lawsuits, (v) breaches of covenants and representations under our servicing, debt or other agreements, (vi) inability to raise capital or (vii) inability to execute on our business strategy. We must comply with a large 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, the Equal Credit Opportunity Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act and state foreclosure laws. These statutes apply to many facets of our business, including loan origination, default servicing and collections, 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, amended, interpreted and enforced. 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. The CFPB directly affects the regulation of residential mortgage servicing in a number of ways. First, the CFPB has rule making authority with respect to many of the federal consumer protection laws applicable to mortgage servicers, including TILA and RESPA, as reflected in the new rules for servicing and origination that went into effect in 2014. Second, the CFPB has supervision, examination and enforcement authority over consumer financial products and services offered by certain non-depository institutions and large insured depository institutions. The CFPB’s jurisdiction includes those persons originating, brokering or servicing residential mortgage loans and those persons performing loan modification or foreclosure relief services in connection with such loans. Accordingly, we are subject to supervision, examination and enforcement by the CFPB. We expect to continue to invest significantly in our operational platform and risk and compliance management systems 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. Our OLS, Homeward and Liberty subsidiaries are licensed to originate and/or service forward and reverse mortgage loans in the jurisdictions in which they operate. Our licensed entities are required to renew their licenses, typically on an annual basis, and to do so they must satisfy the license renewal requirements of each jurisdiction, which in some cases include the requirement to provide audited financial statements as well as other financial and non-financial requirements. Our licensed entities are also 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 or to satisfy any of the other requirements to which our licensed subsidiaries are subject could result in a variety of regulatory actions ranging from a fine, a directive requiring a certain step to be taken, a suspension or ultimately a revocation of a license, any of which could have an adverse impact 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 $553.7 million at September 30, 2015 . We believe our licensed subsidiaries are currently in compliance with all of their capital requirements. OLS, Homeward and Liberty are also parties to seller/servicer agreements and/or subject to guidelines and regulations (collectively, seller/servicer obligations) with one or more of the GSEs, HUD, FHA, VA and Ginnie Mae. These seller/servicer obligations include financial covenants that include capital requirements related to tangible net worth, as defined by the applicable agency, an obligation to provide audited consolidated financial statements within 90 days of the applicable entity’s fiscal year end as well as extensive requirements regarding servicing, selling and other matters. To the extent that these requirements are not met or waived, the applicable agency may, at its option, utilize a variety of remedies including requirements to deposit funds as security for our obligations, sanctions, suspension or even termination of approved seller/servicer status, which would prohibit future originations or securitizations of forward or reverse mortgage loans or servicing for the applicable agency. To date, none of these counterparties has communicated any material sanction, suspension or prohibition in connection with our seller/servicer obligations. We believe we were in compliance with the related net worth requirements at September 30, 2015 . Our non-Agency servicing agreements also contain requirements regarding servicing practices and other matters, and a failure to comply with these requirements could have an adverse impact on our business. Transfers of mortgage servicing are subject to regulation under federal consumer finance laws, including CFPB rules implementing RESPA that require servicers to, among other things, maintain policies and procedures that are reasonably designed to facilitate the transfer of accurate information and documents during mortgage servicing transfers and properly evaluate loss mitigation applications that are in process at the time of transfer. The CFPB has advised mortgage servicers that its examiners will be carefully reviewing servicers’ compliance with these and other regulations applicable to servicing transfers, and state mortgage regulators have supervisory power over any licensed institutions involved in a transaction. Accordingly, we will be required to devote time and resources to ensuring compliance and engaging with such regulators in connection with any future transfers of mortgage servicing, including in connection with our announced asset sales. There are a number of foreign laws and regulations that are applicable to our operations in India 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 or the Philippines could result in (i) restrictions on our operations in these counties, (ii) fines, penalties or sanctions or (iii) reputational damage. |
Commitments
Commitments | 9 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments | Note 19 — Commitments Unfunded Lending Commitments We have originated floating-rate reverse mortgage loans under which the borrowers have additional borrowing capacity of $861.2 million at September 30, 2015 . This additional borrowing capacity is available on a scheduled or unscheduled payment basis. We also had short-term commitments to lend $373.0 million and $12.1 million in connection with our forward and reverse interest rate lock commitments outstanding at September 30, 2015 . Long Term Contracts Our business is currently dependent on many of the services and products provided by Altisource under long-term agreements, many of which include renewal provisions. Our servicing platform runs on an information technology system that we license from Altisource. If Altisource were to fail to fulfill its contractual obligations to us, including through a failure to provide services at the required level to maintain and support our systems, or if Altisource were to become unable to fulfill such obligations (for example, because it entered bankruptcy), our business and operations would suffer. In addition, if Altisource fails to develop and maintain its technology so as to provide us with a competitive platform, our business could suffer. Ocwen and OMS are parties to a Services Agreement, a Technology Products Services Agreement, an Intellectual Property Agreement and a Data Center and Disaster Recovery Services Agreement with Altisource. Under the Services Agreements, Altisource provides various business process outsourcing services, such as valuation services and property preservation and inspection services, among other things. Altisource provides certain technology products and support services under the Technology Products Services Agreements and the Data Center and Disaster Recovery Services Agreements. These agreements expire August 31, 2025. Ocwen and Altisource have also entered into a master services agreement pursuant to which Altisource provides certain loan origination services to Homeward and Liberty, and a general referral fee agreement pursuant to which Ocwen receives referral fees which are paid out of the commission that would otherwise be paid to Altisource as the selling broker in connection with real estate sales services provided by Altisource. A Data Access and Services Agreement under which we agreed to make available to Altisource certain data from Ocwen’s servicing portfolio in exchange for a per asset fee was terminated on March 31, 2015. Amounts incurred or received in connection with the above agreements for periods prior to January 1, 2015 are disclosed in Note 17 – Related Party Transactions . Certain services provided by Altisource under these agreements are charged to the borrower and/or mortgage loan investor. Accordingly, such services, while derived from our loan servicing portfolio, are not reported as expenses by Ocwen. These services include residential property valuation, residential property preservation and inspection services, title services and real estate sales. We have also entered into Support Services Agreements with Altisource setting forth certain services that Altisource and Ocwen may provide to each other in such areas as human resources, corporate services, Six Sigma, quality assurance, quantitative analytics, treasury, accounting, tax matters and strategic planning. These Support Services Agreements run through October 2017 and September 2018, respectively, with automatic one -year renewals thereafter. Beginning April 1, 2015, the only services that are regularly provided under these Support Services Agreements are corporate services such as facilities management and mailroom support services and vendor procurement for information technology and facilities. On December 21, 2012, we entered into a 15 -year servicing agreement with Altisource Residential, L.P., the operating partnership of Residential, pursuant to which Ocwen will service residential mortgage loans acquired by Residential and provide loan modification, assisted deed-in-lieu, assisted deed-for-lease and other loss mitigation programs. |
Contingencies
Contingencies | 9 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Note 20 – Contingencies When we become aware of a matter involving uncertainty for which we may incur a loss, we assess the likelihood of any loss. If a loss contingency is probable and the amount of the loss can be reasonably estimated, we record an accrual for the loss. In such cases, there may be an exposure to potential loss in excess of the amount accrued. Where a loss is not probable but is reasonably possible or where a loss in excess of the amount accrued is reasonably possible, we disclose an estimate of the amount of the loss or range of possible losses for the claim if a reasonable estimate can be made, unless the amount of such reasonably possible loss is not material to our financial position, results of operations or cash flows. If a reasonable estimate of loss cannot be made, we do not accrue for any loss or disclose any estimate of exposure to potential loss. An assessment regarding the ultimate outcome of any such matter involves judgments about future events, actions and circumstances that are inherently uncertain. The actual outcome could differ materially. Where we have retained external legal counsel or other professional advisers, such advisers assist us in making such assessments. Litigation In the ordinary course of business, we are routinely a defendant in, or a party or potential party to, many threatened and pending legal proceedings, including proceedings brought on behalf of various classes of claimants and those brought derivatively on behalf of Ocwen against certain current or former officers and directors. These proceedings are generally based on alleged violations of federal, state and local laws and regulations governing our mortgage servicing and lending activities, including wrongful foreclosure and eviction actions, allegations of wrongdoing in connection with lender-placed insurance arrangements, claims relating to our pre-foreclosure property preservation activities, claims relating to our written and telephonic communications with our borrowers and claims related to our payment and other processing operations. In some of these proceedings, claims for substantial monetary damages are asserted against us. To address the claims in the small number of proceedings brought derivatively by purported shareholders, the independent directors of the Board have established a Special Litigation Committee to investigate the shareholders’ allegations. In our opinion, the resolution of the vast majority of these proceedings will not have a material effect on our financial condition, results of operations or cash flows. In view of the inherent difficulty of predicting the outcome of any threatened or pending legal proceedings, particularly where the claimants seek very large or indeterminate damages or where the matters present novel legal theories or involve a large number of parties, we generally cannot predict what the eventual outcome of such proceedings will be, what the timing of the ultimate resolution will be, or what the eventual loss, if any, will be. Any material adverse resolution could materially and adversely affect our business, reputation, financial condition and results of operations. Where we determine that a loss contingency is probable in connection with a pending or threatened legal proceeding and the amount of our losses can be reasonably estimated, we record an accrual for the losses. Excluding expenses of internal or external legal counsel, we have accrued $16.7 million as of September 30, 2015 for losses relating to threatened and pending litigation pertaining to our mortgage servicing practices that we believe are probable and reasonably estimable based on current information regarding these matters. Where we determine that a loss is not probable but is reasonably possible or where a loss in excess of the amount accrued is reasonably possible, we disclose an estimate of the amount of the loss or range of possible losses for the claim if a reasonable estimate can be made, unless the amount of such reasonably possible loss is not material to our financial position, results of operations or cash flows. It is possible that we will incur losses relating to threatened and pending litigation pertaining to our mortgage servicing practices that materially exceed the amount accrued. We cannot currently estimate the amount, if any, of reasonably possible losses above amounts that have been recorded at September 30, 2015 . Following our announcement on August 12, 2014 that we intended to restate our financial statements for the fiscal year ended December 31, 2013 and the quarter ended March 31, 2014, and amend our Annual Report on Form 10-K for the fiscal year ended December 31, 2013 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2014, putative securities fraud class action lawsuits have been filed against Ocwen and certain of its officers and directors regarding such restatements and amendments. Those lawsuits have been consolidated and are pending in federal court in Florida. After Ocwen signed a Consent Order with the NYDFS on December 22, 2014, the consolidated class action complaint was amended to include allegations relating to that Consent Order and other matters. In January 2015, Ocwen was named as a defendant in a separate consolidated securities fraud class action that has been brought on behalf of a putative class of Altisource shareholders. On September 4, 2015, the presiding federal court dismissed both the above-referenced consolidated class action and the above-referenced consolidated securities fraud class action. Both of those actions have since been re-filed in federal court. Additional lawsuits may be filed and, at this time, Ocwen is unable to predict the outcome of these lawsuits, the possible loss or range of loss, if any, associated with the resolution of these lawsuits or any potential impact they may have on us or our operations. Ocwen and the other defendants intend to vigorously defend against these lawsuits. If our efforts to defend these lawsuits are not successful, our business, financial condition and results of operations could be adversely affected. 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. We have entered into tolling agreements with respect to our role as servicer for a very small number of securitizations and may enter into additional tolling agreements in the future. Other court actions have been filed against certain RMBS trustees alleging that the trustees breached their contractual and statutory duties by, among other things, failing to require the loan servicers to abide by the servicers’ obligations and failing to declare that certain alleged servicing events of default under the applicable contracts occurred. Ocwen is a third-party defendant in certain of these actions, is the servicer for certain securitizations involved in other such actions and is the servicer for other securitizations as to which actions have been threatened by certificate holders. We intend to vigorously defend ourselves in the lawsuits to which we have been named a party. Should Ocwen be made a party to other similar actions or should Ocwen be asked to indemnify any parties to such 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 or otherwise diminished the value of the trust collateral. We believe that any such allegations would be without merit and, if necessary, would vigorously defend against them. At this time, we are unable to predict the ultimate outcome of these lawsuits, the possible loss or range of loss, if any, associated with the resolution of these lawsuits or any potential impact they may have on us or our operations. If, however, we were required to compensate claimants for losses related to the alleged loan servicing breaches, then our business, financial condition and results of operations could be adversely affected. In addition, a number of RMBS trustees have received notices of default alleging material failures by servicers to comply with applicable servicing agreements. For example, certain investors claiming to hold at least 25% ownership interest in 119 RMBS trusts serviced by Ocwen have submitted to the respective trustees of those trusts a Notice of Non-Performance, alleging that we have materially breached our obligations under the servicing agreements in those trusts. The Notice further alleged that our conduct, if not timely cured, would give rise to events of default under the applicable servicing agreements, on the basis of which we could potentially be terminated as servicer for the 119 Trusts. Ocwen denies the allegations in the Notice and intends to vigorously rebut them. Since the Notice was issued, Ocwen has been directed by the trustee for two of the trusts to transfer its servicing to another loan servicing company based on ratings downgrades. There is a risk that Ocwen could be replaced as servicer on the remaining trusts at issue in the Notice, that the trustees could take legal action on behalf of the trust certificateholders, or, under certain circumstances, that the investors who issued the Notice could seek to press their allegations against Ocwen, independent of the trustees. We are unable at this time to predict what, if any, actions the trustees will take in response to the Notice, nor can we predict at this time the potential loss or range of loss, if any, associated with the resolution of the Notice or the potential impact on our operations. If Ocwen were to be terminated as servicer, or other related legal actions were pursued against Ocwen, it could have an adverse effect on Ocwen’s business, financing activities, financial condition and results of operations. Regulatory We are subject to a number of ongoing federal and state regulatory examinations, inquiries, requests for information and other actions. New York Department of Financial Services In December 2012, we entered into a consent order with the New York Department of Financial Services (NY DFS) in which we agreed to the appointment of a Monitor to oversee our compliance with an Agreement on Servicing Practices that we had entered into with the NY DFS in September 2011. After the Monitor began its work in 2013, the NY DFS began an investigation into Ocwen’s compliance with the servicing requirements specified in the Agreement on Servicing Practices as well as New York State laws and regulations relating to the servicing of residential mortgages. Effective December 19, 2014, Ocwen reached a settlement with the NY DFS related to this investigation and entered into a consent order (the NY Consent Order) with the NY DFS to reflect such settlement. The settlement included monetary and non-monetary provisions including the payment of a civil monetary penalty of $100.0 million and restitution in the amount of $50.0 million to certain New York borrowers. Non-monetary provisions include: the appointment of an independent Operations Monitor who will among other responsibilities, review and assess the adequacy and effectiveness of our operations, including providing periodic reporting on findings and progress, and review transactions with Altisource, HLSS, AAMC and Residential; the appointment of two additional independent directors to the Board of Directors; the resignation of William C. Erbey as an officer and director, as of January 16, 2015, as well as from the boards of Altisource, HLSS, AAMC and Residential; and restrictions on the ability and/or timing of any future MSR acquisitions which effectively prohibit any such future acquisitions until we have satisfied certain specified conditions. National Mortgage Settlement In February 2014, the Ocwen National Mortgage Settlement involving the CFPB and various state attorneys general and other state agencies that regulate the mortgage servicing industry (NMS Regulators), relating to various allegations regarding deficient mortgage servicing practices, including those with respect to foreclosures, was memorialized by a consent order entered by the United States District Court for the District of Columbia. We are tested on a quarterly basis on various metrics to ensure compliance with the Ocwen National Mortgage Settlement. These metrics relate to various aspects of our servicing business, and each has a proscribed error threshold. These metrics are tested by a dedicated group of Ocwen employees who do not report to the servicing business and are referred to as the Internal Review Group (IRG). The IRG tests these metrics, and reports their findings to the professional firms employed by the Office of Mortgage Settlement Oversight (OMSO). OMSO has ultimate authority to accept or reject the IRG’s findings, and OMSO reports its findings to the District Court. Exceeding the metric error rate threshold for the first time does not result in a violation of the settlement, but rather it is deemed a “potential violation” which then is subject to a cure period. Any potential violation requires us to submit a corrective action plan (CAP) to OMSO for approval and review, and all testing for that metric is suspended until the CAP is completed. Following the completion of the CAP, testing on that metric resumes by the IRG and any further fails in the cure period or the quarter following that cure period would subject us to financial penalties. These penalties start at an amount of not more than $1.0 million for the first uncured violation and increase to an amount of not more than $5.0 million for the second uncured violation. It is also possible that if we are found to have caused borrower harm, we would be subject to costs to remediate that harm. In addition, in the event that there were widespread metric failures, it is possible that OMSO and/or the District Court could determine that we were generally violating the settlement and seek to impose a broader range of financial or injunctive penalties on us. In December 2014, OMSO identified two issues involving Ocwen’s compliance with the Ocwen National Mortgage Settlement. The first concerned the adequacy and independence of our IRG, which is responsible for reporting on Ocwen’s compliance with the settlement. The second issue concerned the letter dating issues raised by the NY DFS. OMSO’s report identified the steps that Ocwen had taken to remediate these issues and acknowledged Ocwen’s cooperation. OMSO’s December report indicated its plans to re-test certain metrics, and to issue supplemental reports upon completion of that work. In May 2015, OMSO issued another compliance report following up on that of December 2014. This report detailed additional changes that Ocwen had made to its IRG and described the work performed by OMSO to retest certain metrics previously tested by the Ocwen IRG for the first quarter of 2014. OMSO’s report indicated that the various steps taken by Ocwen in connection with its IRG demonstrated “measurable improvement” since the December 2014 report. OMSO further reported that its retesting of metrics for the first quarter of 2014 revealed that it only disagreed with the Ocwen IRG’s assessment for one out of the nine metrics subject to retesting. This metric relates to the t imeliness of letters informing borrowers of missing items in their loss mitigation packages. Because Ocwen’s own IRG had self-identified this issue before the re-testing, Ocwen had already implemented a corrective action plan to send out new correspondence and place certain loans on a foreclosure hold until such borrowers were given time to complete their applications. OMSO approved that CAP on May 27, 2015. OMSO’s latest report, issued on October 22, 2015, provided an update on that CAP and indicated that Ocwen’s implementation of the plan continued under OMSO’s supervision. We continue to work cooperatively with OMSO on resolving these issues, and the letter dating issues are currently under a CAP. While, to date, these issues have not resulted in financial penalties, if we do not comply with the Ocwen National Mortgage Settlement, we could become subject to financial penalties or other regulatory action could be taken against us. Securities and Exchange Commission 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 former Executive Chairman, including the 2007 Equity Incentive Plan and the related option grant and surrender documents. On June 12, 2014, we received a subpoena from the SEC requesting production of various documents relating to our business dealings with Altisource, HLSS, AAMC and Residential and the interests of our directors and executive officers in these companies. Following the announcement on August 12, 2014 that we intended to amend our Annual Report on Form 10-K for the fiscal year ended December 31, 2013 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2014, we received an additional subpoena on September 11, 2014 in relation to such amendments. In addition, we received a further subpoena on November 20, 2014 requesting certain documents related to Ocwen’s agreement with Southwest Business Corporation, and related to Mr. Erbey’s approvals for specifically enumerated board actions. We have cooperated with the SEC in its investigation and believe that the investigation is substantially completed. We and the Staff have reached an agreement in principle to resolve the SEC investigation. Subject to documentation of a definitive settlement and final approval by the Commission of the SEC, the terms of the proposed resolution include that we, without admitting or denying liability, will pay a $2.0 million civil money penalty and consent to the entry of an administrative order requiring that we cease and desist from any violations of Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act and certain related SEC rules promulgated thereunder. Accordingly, we have accrued $2.0 million as of September 30, 2015 with respect to the proposed resolution as we believe this loss is probable and reasonably estimable based on current information. There can be no assurance that the proposed resolution will be finalized and approved by the Commission on the terms currently contemplated. In the event the proposed resolution is not so finalized and approved, we intend to vigorously defend ourselves. Separately, on February 10, 2015, we received a letter from the Staff informing us that it was conducting an investigation relating to the use of collection agents by mortgage loan servicers. The letter requested that we voluntarily produce documents and information. We believe that the February 10, 2015 letter was also sent to other companies in the industry. We are cooperating with the Staff on this matter. California Department of Business Oversight Effective January 23, 2015, OLS reached an agreement with the California Department of Business Oversight (CA DBO) relating to Ocwen’s failure to produce certain information and documents during a routine licensing examination, which resulted in the CA DBO withdrawing its notice of hearing to suspend OLS’ license in California. OLS and the CA DBO entered into a Consent Order pursuant to the California Residential Mortgage Lending Act (the CA Consent Order) with the CA DBO to reflect such settlement. The CA Consent Order addresses and resolves the examination disputes between the CA DBO and OLS, and does not involve any accusation or admission of wrongdoing with regard to OLS’ servicing practices. Under the terms of the CA Consent Order, OLS paid the CA DBO a penalty of $2.5 million plus costs associated with the examination. We accrued the $2.5 million penalty as of December 31, 2014. OLS also agreed to cease acquiring any additional MSRs for loans secured in California until the CA DBO is satisfied that OLS can satisfactorily respond to the requests for information and documentation made in the course of a regulatory exam. In addition, the CA DBO has selected an independent third-party auditor (the CA Auditor) to assess OLS’ compliance with laws and regulations impacting California borrowers for an initial term of two years, extendable at the discretion of the CA DBO. OLS will pay all reasonable and necessary costs of the CA Auditor. The CA Auditor will report periodically on its findings and progress and OLS will submit to the CA DBO a written plan to address and implement corrective measures and address any deficiencies identified by the CA Auditor. General In addition to the above matters, our mortgage origination and servicing businesses require one or more licenses in the various jurisdictions where properties secured by mortgages are located. Our licensed entities are required to renew their licenses, typically on an annual basis, and to do so they must satisfy the license renewal requirements of each jurisdiction, which in some cases include the requirement to provide audited financial statements. The same agencies that issue licenses to us engage in regular supervisory examinations of the licensable activities. In addition, we are subject to supervision by the CFPB at the federal level, and it similarly has the authority to conduct regulatory examinations, in addition to its enforcement and investigatory powers. These examinations are part of our ordinary course business activities, and the mere existence of an examination is not typically indicative of anything unusual or material as to that business. In addition, we also receive information requests and other inquiries, both formal and informal in nature, from these agencies as part of their general regulatory oversight of our origination and servicing businesses. We also have regular engagements with not only our state financial regulators, but also the attorneys general in the various states and the CFPB to address individual borrower complaints that they bring to our attention, or to respond to information requests and other inquiries. Many of these matters are brought to our attention as a complaint that the entity is investigating, although some are formal investigations or proceedings. To the extent that an examination or other regulatory engagement reveals a failure by us to comply with applicable law, regulation or licensing requirement, or if we fail to comply with the commitments we have made with respect to the foregoing regulatory actions or if other regulatory actions of a similar or different nature are taken in the future against us, this could lead to (i) loss of our licenses and approvals to engage in our servicing and lending businesses, (ii) governmental investigations and enforcement actions, (iii) administrative fines and penalties and litigation, (iv) civil and criminal liability, including class action lawsuits, (v) breaches of covenants and representations under our servicing, debt or other agreements, (vi) inability to raise capital and (vii) inability to execute on our business strategy. 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. Loan Put-Back and Related Contingencies We have exposure to origination 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 September 30, 2015 , we had outstanding representation and warranty repurchase demands of $101.1 million UPB ( 516 loans). At September 30, 2014 , the outstanding UPB of representation and warranty repurchase demands was $108.2 million ( 578 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 representation and warranty obligations, compensatory fees for foreclosures that may ultimately exceed investor timelines and related indemnification obligations for the nine months ended September 30 : 2015 2014 Beginning balance $ 132,918 $ 192,716 Provision for representation and warranty obligations 1,695 5,076 New production reserves 664 820 Charge-offs and other (1) (48,404 ) (54,776 ) Ending balance $ 86,873 $ 143,836 (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 other 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 September 30, 2015 . |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2015 | |
Subsequent Event [Line Items] | |
Subsequent Events | Note 21 – Subsequent Events On October 16, 2015, OLS, as borrower, Ocwen and certain subsidiaries of Ocwen, as guarantors, entered into Amendment No. 4 to the Senior Secured Term Loan Facility Agreement and Amendment No. 2 to the Pledge and Security Agreement (the “Amendment”) with the lenders party thereto and Barclays Bank PLC, as administrative agent and collateral agent, pursuant to which certain amendments were made to (i) the SSTL and (ii) the related Pledge and Security Agreement. Effective as of October 20, 2015, the Amendment, among other things: • removes, until the fiscal quarter ending June 30, 2017, the interest coverage ratio and corporate leverage ratio financial covenants; • establishes a process for designating foreign subsidiaries as subsidiary guarantors under the SSTL; • increases our capacity to make certain permitted investments under the investment covenant; • expands our ability to exclude certain assets from the collateral securing the SSTL, to the extent necessary to meet regulatory minimum net worth requirements; • increases the applicable interest rate margin by 0.50% ; • requires us to use 100% of the net cash proceeds from future asset sales permitted under the general asset sale basket to prepay the loans under the SSTL; • provides for a fee, payable to the lenders on March 31, 2017, equal to 3.0% of the aggregate amount of SSTL loans outstanding as of such date; and • makes conforming modifications, as well as adjustments to definitions. In connection with the Amendment, on October 20, 2015, we voluntarily prepaid $50.0 million of the SSTL. Following the pay down, on October 20, 2015, there was approximately $476.6 million outstanding under the SSTL. |
Description of Business and B31
Description of Business and Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Note 1B - 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 adjustments, necessary for a fair presentation. The results of operations and other data for the three and nine months ended September 30, 2015 are not necessarily indicative of the results that may be expected for any other interim period or for the year ending December 31, 2015 . The unaudited consolidated financial statements presented herein should be read in conjunction with the audited consolidated financial statements and related notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2014 . |
Reclassifications | Reclassifications Within the Other income (expense) section of the Unaudited Consolidated Statements of Operations for the three and nine months ended September 30, 2014 , we reclassified Interest income from Other, net to a separate line item to conform to the current year presentation. Certain insignificant amounts in the Unaudited Consolidated Statements of Cash Flows for the nine months ended September 30, 2014 have been reclassified to conform to the current year presentation. These reclassifications had no impact on our consolidated cash flows from operating, investing or financing activities. |
Use of Estimates and Assumptions | Use of Estimates and Assumptions The preparation of financial statements in conformity with 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, and representation and warranty and other indemnification obligations. In developing estimates and assumptions, management uses all available information; however, actual results could materially differ from those estimates and assumptions. |
Income Taxes | Income Taxes In accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 270, Interim Financial Reporting, and ASC 740-270, Income Taxes — Interim Reporting, at the end of each interim period, we are required to determine the best estimate of our annual effective tax rate and then apply that rate to “ordinary” income or loss (pre-tax income or loss excluding unusual or infrequently occurring discrete items) in providing for income taxes on an interim period. However, in certain circumstances where we are unable to make a reliable estimate of the annual effective tax rate, ASC 740-270 allows the actual effective tax rate for the interim period to be used in the interim period. For the three months ended September 30, 2015, we calculated an estimate of our annual effective rate for the year and applied that rate to our pre-tax “ordinary” income or loss for the nine months ended September 30, 2015. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards Business Combinations: Pushdown Accounting - Amendments to SEC Paragraphs Pursuant to Staff Accounting Bulletin No. 115 (ASU 2015-08) In May 2015, the FASB issued Accounting Standards Update (ASU) 2015-08, which removes references to the SEC’s Staff Accounting Bulletin (SAB) Topic 5.J on pushdown accounting from ASC 805-50, thereby conforming the FASB’s guidance on pushdown accounting with the SEC’s guidance on this topic. The SEC’s issuance of SAB No. 115 had superseded the guidance in SAB Topic 5.J in connection with the FASB’s November 2014 release of ASU 2014-17. ASU 2015-08 became effective for us upon issuance. Our adoption of ASU 2015-08 on May 11, 2015 did not have a material impact on our consolidated financial condition or results of operations. Revenue from Contracts with Customers: Deferral of the Effective Date (ASU 2015-14) In August 2015, the FASB issued Accounting Standards Update (ASU) 2015-14, which defers the effective date of ASU 2014-09, “Revenue from Contracts with Customers”, by one year. In May 2014, the FASB issued ASU 2014-09 to clarify the principles for recognizing revenue and to develop a common revenue standard. As a result of the issuance of ASU 2015-14, ASU 2014-09 will now be effective for us on January 1, 2018, with early application permitted as of the annual reporting period beginning on January 1, 2017, including interim reporting periods within that reporting period. We are currently evaluating the effect of adopting this standard. Interest -- Imputation of Interest: Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements -- Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting (ASU 2015-15) In August 2015, the FASB issued Accounting Standards Update (ASU) 2015-15, which clarifies ASU 2015-03, “Interest -- Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs”, by providing guidance regarding the presentation and subsequent measurement of debt issuance costs related to line-of-credit arrangements. Given the absence of authoritative guidance on this matter, the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on that line-of-credit arrangement. The issuance of ASU 2015-15 does not change the effective date of ASU 2015-03. ASU 2015-03 will be effective for us on January 1, 2016, with early adoption permitted for financial statements that have not been previously issued. We are currently evaluating the effect of adopting this standard. |
Securitizations and Variable 32
Securitizations and Variable Interest Entities (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
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 and nine months ended September 30 : Three Months Nine Months 2015 2014 2015 2014 Proceeds received from securitizations $ 1,478,142 $ 1,369,468 $ 3,964,866 $ 4,346,991 Servicing fees collected 5,973 10,840 25,066 25,174 Purchases of previously transferred assets, net of claims reimbursed 1,512 2,237 2,408 2,237 $ 1,485,627 $ 1,382,545 $ 3,992,340 $ 4,374,402 |
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: September 30, 2015 December 31, 2014 Carrying value of assets: Mortgage servicing rights, at amortized cost $ 45,064 $ 82,542 Mortgage servicing rights, at fair value 226 2,840 Advances and match funded advances 21,686 1,236 UPB of loans transferred (1) 6,811,864 9,353,187 Maximum exposure to loss $ 6,878,840 $ 9,439,805 (1) The UPB of the loans transferred is the maximum exposure to loss under our standard representations and warranties obligations. |
Fair Value (Tables)
Fair Value (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Schedule of Fair Value Assets and Liabilities | The carrying amounts and the estimated fair values of our financial instruments and certain of our nonfinancial assets measured at fair value on a recurring or non-recurring basis or disclosed, but not carried, at fair value are as follows at the dates indicated: September 30, 2015 December 31, 2014 Level Carrying Value Fair Value Carrying Value Fair Value Financial assets: Loans held for sale: Loans held for sale, at fair value (a) 2 $ 235,909 $ 235,909 $ 401,120 $ 401,120 Loans held for sale, at lower of cost or fair value (b) 3 291,063 291,063 87,492 87,492 Total Loans held for sale $ 526,972 $ 526,972 $ 488,612 $ 488,612 Loans held for investment - Reverse mortgages, at fair value (a) 3 $ 2,319,515 $ 2,319,515 $ 1,550,141 $ 1,550,141 Advances and match funded advances (c) 3 2,472,996 2,472,996 3,303,356 3,303,356 Receivables, net (c) 3 361,572 361,572 270,596 270,596 Mortgage-backed securities, at fair value (a) 3 8,541 8,541 7,335 7,335 Financial liabilities: Match funded liabilities (c) 3 $ 1,589,846 $ 1,589,901 $ 2,090,247 $ 2,090,247 Financing liabilities: HMBS-related borrowings, at fair value (a) 3 $ 2,229,604 $ 2,229,604 $ 1,444,252 $ 1,444,252 Financing liability - MSRs pledged (a) 3 560,059 560,059 614,441 614,441 Other (c) 3 163,855 144,725 199,948 189,648 Total Financing liabilities $ 2,953,518 $ 2,934,388 $ 2,258,641 $ 2,248,341 Other secured borrowings: Senior secured term loan (c) 2 $ 702,918 $ 702,397 $ 1,273,219 $ 1,198,227 Other (c) 3 298,152 298,152 460,472 460,472 Total Other secured borrowings $ 1,001,070 $ 1,000,549 $ 1,733,691 $ 1,658,699 Senior unsecured notes (c) 2 $ 350,000 $ 321,563 $ 350,000 $ 321,563 Derivative financial instruments assets (liabilities) (a): Interest Rate Lock Commitments (IRLCs) 2 $ 10,010 $ 10,010 $ 6,065 $ 6,065 Forward MBS trades 1 (3,438 ) (3,438 ) (2,854 ) (2,854 ) Interest rate caps 3 1,501 1,501 567 567 MSRs: MSRs, at fair value (a) 3 $ 787,344 $ 787,344 $ 93,901 $ 93,901 MSRs, at amortized cost (c) (d) 3 365,951 404,533 1,820,091 2,237,703 Total MSRs $ 1,153,295 $ 1,191,877 $ 1,913,992 $ 2,331,604 (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. (d) The balance at September 30, 2015 includes our impaired government-insured stratum of amortization method MSRs, which is measured at fair value on a non-recurring basis. The carrying value of this stratum at September 30, 2015 was $144.2 million , net of a valuation allowance of $25.1 million . |
Schedule of Reconciliation of Changes in Fair Value of Level 3 Assets and Liabilities | 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 for the three and nine months ended September 30, 2015 and 2014 . Loans Held for Investment - Reverse Mortgages HMBS-Related Borrowings Mortgage-Backed Securities Financing Liability - MSRs Pledged Derivatives MSRs Total Three months ended September 30, 2015 Beginning balance $ 2,097,192 $ (1,987,998 ) $ 8,157 $ (581,219 ) $ 155 $ 814,450 $ 350,737 Purchases, issuances, sales and settlements: Purchases — — — — 2,084 — 2,084 Issuances 250,600 (271,068 ) — — — — (20,468 ) Sales — — — — — (2,329 ) (2,329 ) Settlements (41,582 ) 43,725 — 21,160 — — 23,303 209,018 (227,343 ) — 21,160 2,084 (2,329 ) 2,590 Total realized and unrealized gains and (losses): Included in earnings 13,305 (14,263 ) 384 — (738 ) (24,777 ) (26,089 ) Included in Other comprehensive income — — — — — — — 13,305 (14,263 ) 384 — (738 ) (24,777 ) (26,089 ) Transfers in and / or out of Level 3 — — — — — — — Ending balance $ 2,319,515 $ (2,229,604 ) $ 8,541 $ (560,059 ) $ 1,501 $ 787,344 $ 327,238 Loans Held for Investment - Reverse Mortgages HMBS-Related Borrowings Mortgage-Backed Securities Financing Liability - MSRs Pledged Derivatives MSRs Total Three months ended September 30, 2014 Beginning balance $ 1,107,626 $ (1,033,712 ) $ 7,502 $ (629,579 ) $ 97 $ 104,220 $ (443,846 ) Purchases, issuances, sales and settlements: Purchases — — — — — — — Issuances 208,566 (190,452 ) — — — — 18,114 Sales — — — — — — Settlements (27,592 ) 12,690 — 10,724 — (934 ) (5,112 ) 180,974 (177,762 ) — 10,724 — (934 ) 13,002 Total realized and unrealized gains and (losses): Included in earnings 26,724 (24,620 ) (124 ) — (6 ) (1,338 ) 636 Included in Other comprehensive income — — — — — — — 26,724 (24,620 ) (124 ) — (6 ) (1,338 ) 636 Transfers in and / or out of Level 3 — — — — — — — Ending balance $ 1,315,324 $ (1,236,094 ) $ 7,378 $ (618,855 ) $ 91 $ 101,948 $ (430,208 ) Loans Held for Investment - Reverse Mortgages HMBS-Related Borrowings Mortgage-backed Securities Financing Liability - MSRs Pledged Derivatives MSRs Total Nine months ended September 30, 2015 Beginning balance $ 1,550,141 $ (1,444,252 ) $ 7,335 $ (614,441 ) $ 567 $ 93,901 $ (406,749 ) Purchases, issuances, sales and settlements: Purchases — — — — 2,201 — 2,201 Issuances 781,002 (803,924 ) — — — (1,139 ) (24,061 ) Transfer from MSRs carried at amortized cost — — — — — 839,157 839,157 Sales — — — — — (71,318 ) (71,318 ) Settlements (1) (105,505 ) 107,522 — 54,382 346 — 56,745 675,497 (696,402 ) — 54,382 2,547 766,700 802,724 Total realized and unrealized gains and (losses): (2) Included in earnings 93,877 (88,950 ) 1,206 — (1,613 ) (73,257 ) (68,737 ) Included in Other comprehensive income (loss) — — — — — — — 93,877 (88,950 ) 1,206 — (1,613 ) (73,257 ) (68,737 ) Transfers in and / or out of Level 3 — — — — — — — Ending Balance $ 2,319,515 $ (2,229,604 ) $ 8,541 $ (560,059 ) $ 1,501 $ 787,344 $ 327,238 Loans Held for Investment - Reverse Mortgages HMBS-Related Borrowings Mortgage-backed Securities Financing Liability - MSRs Pledged Derivatives MSRs Total Nine months ended September 30, 2014 Beginning balance $ 618,018 $ (615,576 ) $ — $ (633,804 ) $ 442 $ 116,029 $ (514,891 ) Purchases, issuances, sales and settlements: Purchases — — 7,677 — 23 — 7,700 Issuances 565,670 (572,031 ) — — — — (6,361 ) Transfer from loans held for sale, at fair value 110,874 — — — — — 110,874 Sales — — — — — — — Settlements (56,193 ) 25,725 — 14,949 — (934 ) (16,453 ) 620,351 (546,306 ) 7,677 14,949 23 (934 ) 95,760 Total realized and unrealized gains and (losses): Included in earnings 76,955 (74,212 ) (299 ) — (374 ) (13,147 ) (11,077 ) Included in Other comprehensive income (loss) — — — — — — — 76,955 (74,212 ) (299 ) — (374 ) (13,147 ) (11,077 ) Transfers in and / or out of Level 3 — — — — — — — Ending balance $ 1,315,324 $ (1,236,094 ) $ 7,378 $ (618,855 ) $ 91 $ 101,948 $ (430,208 ) (1) In the event of a transfer to another party of servicing related to Rights to MSRs, we are required to reimburse New Residential Investment Corp. (NRZ) at predetermined contractual rates for the loss of servicing revenues. Settlements for Financing liability - MSRs pledged for the nine months ended September 30, 2015 includes $2.2 million of such reimbursements. (2) Total losses attributable to derivative financial instruments still held at September 30, 2015 were $1.3 million for the nine months ended September 30, 2015 . |
Mortgage Servicing Rights - Amortized Costs [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Schedule of Significant Assumptions used in Valuation | The more significant assumptions used in the September 30, 2015 valuation include: Weighted average prepayment speed 12.67 % Weighted average delinquency rate 14.39 % Advance financing cost 5-year swap Interest rate for computing float earnings 5-year swap Weighted average discount rate 9.30 % Weighted average cost to service (in dollars) $ 98 |
Fair Value Mortgage Servicing Rights [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Schedule of Significant Assumptions used in Valuation | The primary assumptions used in the September 30, 2015 valuation include: Agency Non Agency Weighted average prepayment speed 10.80 % 16.48 % Weighted average delinquency rate 1.10 % 29.80 % Advance financing cost 5-year swap 1ML plus 3.5% Interest rate for computing float earnings 5-year swap 1ML Weighted average discount rate 9.00 % 14.94 % Weighted average cost to service (in dollars) $ 70 $ 336 |
Mortgage Servicing Rights Pledged [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Schedule of Significant Assumptions used in Valuation | The more significant assumptions used in determination of the price of the underlying MSRs at September 30, 2015 include: Weighted average prepayment speed 16.98 % Weighted average delinquency rate 30.75 % Advance financing cost 1 ML plus 3.5% Interest rate for computing float earnings 1ML Weighted average discount rate 14.77 % Weighted average cost to service (in dollars) $ 341 |
Sales of Advances and MSRs (Tab
Sales of Advances and MSRs (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Transfers and Servicing [Abstract] | |
Schedule of MSRs and Advances Sold | The following table provides a summary of MSRs and advances sold during the nine months ended September 30, 2015 : MSRs Advances and Match Funded Advances Carrying value of assets sold $ 662,923 $ 321,164 Gain (loss) on sale 97,958 — Plus: Accrued expenses and reserves 19,529 — Sales price 780,410 321,164 Less: Amount due from purchaser at September 30 98,545 35,226 Amount paid to purchasers for estimated representation and warranty obligations, compensatory fees for foreclosures that may ultimately exceed investor timelines and related indemnification obligations 83,806 — Total net cash received $ 598,059 $ 285,938 |
Loans Held for Sale (Tables)
Loans Held for Sale (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Receivables [Abstract] | |
Schedule of Loans Held for Sale Fair Value | The following table summarizes the activity in the balance during the nine months ended September 30 : 2015 2014 Beginning balance $ 401,120 $ 503,753 Originations and purchases 3,119,457 3,923,870 Proceeds from sales (3,306,180 ) (4,010,644 ) Principal collections (6,512 ) (9,156 ) Transfers to loans held for investment - reverse mortgages — (110,874 ) Gain on sale of loans 37,580 39,486 Other (1) (9,556 ) (485 ) Ending balance $ 235,909 $ 335,950 |
Schedule of Loans Held for Sale at Lower Cost or Fair Value, Activity | The following table summarizes the activity in the balance during the nine months ended September 30 : 2015 2014 Beginning balance $ 87,492 $ 62,907 Purchases 769,631 2,083,282 Proceeds from sales (577,591 ) (1,744,273 ) Principal collections (45,137 ) (248,552 ) Transfers to accounts receivable (4,811 ) (96,257 ) Transfers to real estate owned (18,479 ) (4,575 ) Gain on sale of loans 38,327 32,471 Decrease (increase) in valuation allowance 37,998 (16,282 ) Other 3,633 3,216 Ending balance (1) (2) $ 291,063 $ 71,937 (1) At September 30, 2015 and September 30, 2014 , the balances are net of valuation allowances of $15.4 million and $47.0 million , respectively. The decrease in the valuation allowance for the nine months ended September 30, 2015 resulted principally from the reversal of $37.8 million of the allowance that was associated with loans that were sold to unrelated third parties during the six months ended June 30, 2015. This decrease was partly offset by an increase of $1.1 million in the allowance resulting from transfers from the liability for indemnification obligations for the initial valuation adjustment that we recognized on certain loans that we repurchased from Fannie Mae and Freddie Mac guaranteed securitizations. For the nine months ended September 30, 2014 , the increase in the allowance was principally the result of $15.3 million of such transfers from the liability for indemnification obligations. (2) At September 30, 2015 and September 30, 2014 , the balances include $98.7 million and $24.1 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. |
Schedule of Gains on Loans Held for Sale, Net | The following table summarizes the activity in Gain on loans held for sale, net, during the three and nine months ended September 30 : Three Months Nine Months 2015 2014 2015 2014 Gain on sales of loans $ 34,038 $ 42,185 $ 130,425 $ 145,455 Change in fair value of IRLCs 4,956 (4,188 ) 3,944 (2,315 ) Change in fair value of loans held for sale 915 (9,348 ) (5,893 ) (97 ) Loss on economic hedge instruments (12,416 ) (1,145 ) (10,878 ) (32,183 ) Other losses (195 ) (286 ) (664 ) (819 ) $ 27,298 $ 27,218 $ 116,934 $ 110,041 |
Advances (Tables)
Advances (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Advances [Abstract] | |
Schedule of Advances Paid on Behalf of Borrowers or on Foreclosed Properties | Advances, net, which represent payments made on behalf of borrowers or on foreclosed properties, consisted of the following at the dates indicated: September 30, 2015 December 31, 2014 Servicing: Principal and interest $ 103,235 $ 128,217 Taxes and insurance 258,846 467,891 Foreclosures, bankruptcy and other (1) 150,898 293,340 512,979 889,448 Corporate Items and Other 4,399 4,466 $ 517,378 $ 893,914 (1) The balances at September 30, 2015 and December 31, 2014 are net of an allowance for losses of $60.4 million and $70.0 million , respectively. |
Schedule of Activity in Advances | The following table summarizes the activity in advances for the nine months ended September 30 : 2015 2014 Beginning balance $ 893,914 $ 890,832 Acquisitions — 99,318 Transfers to match funded advances — (10,156 ) Sales of advances (224,756 ) — Collections of advances, net of new advances, and other (151,780 ) 7,292 Ending balance $ 517,378 $ 987,286 |
Match Funded Advances (Tables)
Match Funded Advances (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Transfers and Servicing [Abstract] | |
Schedule of Match Funded Advances on Residential Loans | Match funded advances on residential loans we service for others are comprised of the following at the dates indicated: September 30, 2015 December 31, 2014 Principal and interest $ 1,066,125 $ 1,349,048 Taxes and insurance 714,505 847,064 Foreclosures, bankruptcy, real estate and other 174,988 213,330 $ 1,955,618 $ 2,409,442 |
Schedule of Activity In Match Funded Advances | The following table summarizes the activity in match funded advances for the nine months ended September 30 : 2015 2014 Beginning balance $ 2,409,442 $ 2,552,383 Acquisitions — 85,521 Transfers from advances — 10,156 Sales of advances (96,408 ) — Collections of pledged advances, net of new advances, and other (357,416 ) (288,481 ) Ending balance $ 1,955,618 $ 2,359,579 |
Mortgage Servicing (Tables)
Mortgage Servicing (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Transfers and Servicing [Abstract] | |
Schedule of Activity Related to MSRs - Amortization Method | The following table summarizes the activity in the carrying value of amortization method servicing assets for the nine months ended September 30 . Amortization of mortgage servicing rights is reported net of the amortization of any servicing liabilities and includes the amount of charges we recognized to increase servicing liability obligations, if any. 2015 2014 Beginning balance $ 1,820,091 $ 1,953,352 Fair value election - transfer to MSRs carried at fair value (1) (787,142 ) — Additions recognized in connection with business acquisitions — 20,378 Additions recognized in connection with asset acquisitions 10,055 19,338 Additions recognized on the sale of mortgage loans 27,791 50,480 Sales (591,605 ) (137 ) Servicing transfers and adjustments — (518 ) 479,190 2,042,893 Amortization (88,188 ) (186,075 ) Impairment (25,051 ) — Ending balance $ 365,951 $ 1,856,818 Estimated fair value at end of period $ 404,533 $ 2,364,393 (1) Effective January 1, 2015, we elected fair value accounting for a newly-created class of non-Agency MSRs, which were previously accounted for using the amortization method. This irrevocable election applies to all subsequently acquired or originated servicing assets and liabilities that have characteristics consistent with this class. We recorded a cumulative-effect adjustment of $52.0 million (before deferred income taxes of $9.2 million ) to retained earnings as of January 1, 2015 to reflect the excess of the fair value of these MSRs over their carrying amount. At December 31, 2014, the UPB of the loans related to the non-Agency MSRs for which the fair value election was made was $195.3 billion . |
Schedule of Activity Related to MSRs - Fair Value Measurement Method | The following table summarizes the activity related to fair value servicing assets for the nine months ended September 30 : 2015 2014 Agency Non-Agency Total Agency Beginning balance $ 93,901 $ — $ 93,901 $ 116,029 Fair value election - transfer from MSRs carried at amortized cost — 787,142 787,142 — Cumulative effect of fair value election — 52,015 52,015 — Sales (70,084 ) (1,234 ) (71,318 ) — Servicing transfers and adjustments — (1,139 ) (1,139 ) (934 ) Changes in fair value (1): Changes in valuation inputs or other assumptions (2,592 ) 12,031 9,439 (12,217 ) Realization of expected future cash flows and other changes (6,808 ) (75,888 ) (82,696 ) (930 ) Ending balance $ 14,417 $ 772,927 $ 787,344 $ 101,948 (1) Changes in fair value are recognized in Servicing and origination expense in the Unaudited Consolidated Statements of Operations. |
Schedule of Estimated Change in Fair Value of MSRs | The following table summarizes the estimated change in the value of the MSRs that we carry at fair value as of September 30, 2015 given hypothetical shifts in lifetime prepayments and yield assumptions: Adverse change in fair value 10% 20% Weighted average prepayment speeds $ (68,927 ) $ (145,410 ) Discount rate (option-adjusted spread) $ (21,359 ) $ (39,902 ) |
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 September 30, 2015 Servicing (1) $ 238,108,447 $ — $ 238,108,447 Subservicing 49,960,702 180,877 50,141,579 $ 288,069,149 $ 180,877 $ 288,250,026 UPB at December 31, 2014 Servicing (1) $ 361,288,281 $ — $ 361,288,281 Subservicing 37,439,446 149,737 37,589,183 $ 398,727,727 $ 149,737 $ 398,877,464 UPB at September 30, 2014 Servicing (1) $ 360,919,248 $ — $ 360,919,248 Subservicing 50,360,366 216,111 50,576,477 $ 411,279,614 $ 216,111 $ 411,495,725 (1) Includes primary servicing UPB of $146.0 billion , $160.8 billion and $160.8 billion at September 30, 2015 , December 31, 2014 and September 30, 2014 , respectively, for which the Rights to MSRs have been sold to NRZ. |
Schedule of Components of Servicing and Subservicing Fees | The following table presents the components of servicing and subservicing fees for the three and nine months ended September 30 : Three Months Nine Months 2015 2014 2015 2014 Loan servicing and subservicing fees: Servicing $ 274,089 $ 331,794 $ 879,098 $ 1,039,033 Subservicing 14,354 30,926 72,968 95,509 288,443 362,720 952,066 1,134,542 Home Affordable Modification Program (HAMP) fees 32,318 37,644 108,698 111,000 Late charges 19,162 27,634 63,557 97,002 Loan collection fees 6,682 8,655 25,176 25,573 Custodial accounts (float earnings) 836 1,831 4,633 5,235 Other 12,576 27,480 49,411 74,744 $ 360,017 $ 465,964 $ 1,203,541 $ 1,448,096 |
Receivables (Tables)
Receivables (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Receivables [Abstract] | |
Schedule of Receivables | Receivables consisted of the following at the dates indicated: September 30, 2015 December 31, 2014 Servicing: Government-insured loan claims (1) $ 67,690 $ 52,955 Due from custodial accounts 44,338 11,627 Reimbursable expenses 22,636 32,387 Other servicing receivables (2) 159,753 29,516 294,417 126,485 Income taxes receivable 63,572 68,322 Due from related parties (3) — 58,892 Other receivables (4) 30,369 43,690 388,358 297,389 Allowance for losses (1) (26,786 ) (26,793 ) $ 361,572 $ 270,596 (1) At September 30, 2015 and December 31, 2014 , the total allowance for losses includes $26.8 million and $26.8 million , respectively, related to receivables of our Servicing business. Allowance for losses related to defaulted FHA or VA insured loans repurchased from Ginnie Mae guaranteed securitizations (government-insured loan claims) at September 30, 2015 and December 31, 2014 were $13.2 million and $10.0 million , respectively. (2) At September 30, 2015 , other servicing receivables include $133.8 million related to sales of MSRs and advances. (3) Entities that we reported as related parties at December 31, 2014 are no longer considered to be related parties, and amounts receivable from them are now reported within Other receivables. (4) At December 31, 2014 , other receivables include $28.8 million related to losses to be indemnified under the terms of the Homeward merger agreement. On March 19, 2015, we reached an agreement with the former owner of Homeward for the final settlement of all indemnification claims under the merger agreement and received $38.1 million in cash. |
Other Assets (Tables)
Other Assets (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Other Assets [Abstract] | |
Schedule of Other Assets | Other assets consisted of the following at the dates indicated: September 30, 2015 December 31, 2014 Contingent loan repurchase asset (1) $ 310,373 $ 274,265 Debt service accounts (2) 123,023 91,974 Prepaid expenses 57,572 17,957 Prepaid lender fees and debt issuance costs, net 51,937 31,337 Real estate 18,247 16,720 Prepaid income taxes 12,921 16,450 Derivatives, at fair value 10,010 6,065 Mortgage backed securities, at fair value 8,541 7,335 Other 16,655 28,708 $ 609,279 $ 490,811 (1) In connection with the Ginnie Mae EBO Transactions, our agreements provide either that: (a) we have the right, but not the obligation, to repurchase previously transferred mortgage loans under certain conditions, including the mortgage loans becoming eligible for pooling under a program sponsored by Ginnie Mae, or (b) we have the obligation to repurchase previously transferred mortgage loans that have been subject to a successful trial modification before any permanent modification is made. Once these conditions are met, we have effectively regained control over the mortgage loan(s) and under GAAP, must re-recognize the loan on our consolidated balance sheet and establish a corresponding repurchase liability. With respect to those loans that we have the right, but not the obligation, to repurchase under the applicable agreement, this requirement applies regardless of whether we have any intention to repurchase the loan. We re-recognized mortgage loans in Other assets and the corresponding liability in Other liabilities. (2) Under our advance funding financing 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. |
Borrowings (Tables)
Borrowings (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
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) September 30, 2015 December 31, 2014 Ocwen Freddie Servicer Advance Receivables Trust Series 2012-ADV1 (4) 1ML (3) + 175 bps Jun. 2017 Jun. 2015 $ — $ — $ 373,080 Ocwen Servicer Advance Funding (SBC) Note (5) 1ML + 300 bps Dec. 2015 Dec. 2014 — — 494 Advance Receivables Backed Notes, Series 2013-VF2, Cost of Funds + 191 bps Oct. 2045 Oct. 2015 — — 519,634 Advance Receivables Backed Notes, Series 2013-VF2, Cost of Funds + 343 bps Oct. 2045 Oct. 2015 — — 32,919 Advance Receivables Backed Notes - Series 2014-VF3, 1ML + 235 bps (7) Sep. 2046 Sep. 2016 100,547 263,244 552,553 Borrowing Type Interest Rate Maturity (1) Amortization Date (1) Available Borrowing Capacity (2) September 30, 2015 December 31, 2014 Advance Receivables Backed Notes - Series 2014-VF3, 1ML + 300 bps (7) Sep. 2046 Sep. 2016 4,604 12,551 — Advance Receivables Backed Notes - Series 2014-VF3, 1ML + 425 bps (7) Sep. 2046 Sep. 2016 5,154 13,825 — Advance Receivables Backed Notes - Series 2014-VF3, 1ML + 575 bps (7) Sep. 2046 Sep. 2016 13,572 36,503 — Advance Receivables Backed Notes - Series 2014-VF4, Class A (8) 1ML + 235 bps (8) Sep. 2046 Sep. 2016 100,547 263,244 552,553 Advance Receivables Backed Notes - Series 2014-VF4, Class B (8) 1ML + 300 bps (8) Sep. 2046 Sep. 2016 4,604 12,551 — Advance Receivables Backed Notes - Series 2014-VF4, Class C (8) 1ML + 425 bps (8) Sep. 2046 Sep. 2016 5,154 13,825 — Advance Receivables Backed Notes - Series 2014-VF4, Class D (8) 1ML + 575 bps (8) Sep. 2046 Sep. 2016 13,572 36,503 — Advance Receivables Backed Notes - Series 2015-VF5, Class A (9) 1ML + 235 bps (9) Sep. 2046 Sep. 2016 100,548 263,243 — Advance Receivables Backed Notes - Series 2015-VF5, Class B (9) 1ML + 300 bps (9) Sep. 2046 Sep. 2016 4,604 12,551 — Advance Receivables Backed Notes - Series 2015-VF5, Class C (9) 1ML + 425 bps (9) Sep. 2046 Sep. 2016 5,154 13,825 — Advance Receivables Backed Notes - Series 2015-VF5, Class D (9) 1ML + 575 bps (9) Sep. 2046 Sep. 2016 13,572 36,503 — Advance Receivables Backed Notes - Series 2015-T1, Class A (9) 2.5365% Sep. 2046 Sep. 2016 — 244,809 — Advance Receivables Backed Notes - Series 2015-T1, Class B (9) 3.0307% Sep. 2046 Sep. 2016 — 10,930 — Advance Receivables Backed Notes - Series 2015-T1, Class C (9) 3.5240% Sep. 2046 Sep. 2016 — 12,011 — Advance Receivables Backed Notes - Series 2015-T1, Class D (9) 4.1000% Sep. 2046 Sep. 2016 — 32,250 — Total Ocwen Master Advance Receivables Trust (OMART) 371,632 1,278,368 1,657,659 Advance Receivables Backed Notes, Series 2014-VF1, Cost of Funds + 275 bps Dec. 2045 Dec. 2015 6,762 16,548 21,192 Advance Receivables Backed Notes, Series 2014-VF1, Cost of Funds + 325 bps Dec. 2045 Dec. 2015 11,482 10,918 13,598 Borrowing Type Interest Rate Maturity (1) Amortization Date (1) Available Borrowing Capacity (2) September 30, 2015 December 31, 2014 Advance Receivables Backed Notes, Series 2014-VF1, Cost of Funds + 375 bps Dec. 2045 Dec. 2015 8,920 8,230 10,224 Advance Receivables Backed Notes, Series 2014-VF1, Cost of Funds + 470 bps Dec. 2045 Dec. 2015 13,366 11,274 14,000 Total Ocwen Servicer Advance Receivables Trust III (OSARTIII) (10) 40,530 46,970 59,014 Advance Receivables Backed Notes, Series 2015-VF1, 1ML + 212.5 bps Jun. 2046 Jun. 2016 22,661 159,539 — Advance Receivables Backed Notes, Series 2015-VF1, 1ML + 300 bps Jun. 2046 Jun. 2016 3,354 15,946 — Advance Receivables Backed Notes, Series 2015-VF1, 1ML + 350 bps Jun. 2046 Jun. 2016 2,026 7,874 — Advance Receivables Backed Notes, Series 2015-VF1, 1ML + 425 bps Jun. 2046 Jun. 2016 2,451 11,149 — Advance Receivables Backed Notes, Series 2015-T1, 2.062% Nov. 2045 Nov. 2015 — 57,100 — Advance Receivables Backed Notes, Series 2015-T1, 2.557% Nov. 2045 Nov. 2015 — 5,400 — Advance Receivables Backed Notes, Series 2015-T1, 3.051% Nov. 2045 Nov. 2015 — 1,900 — Advance Receivables Backed Notes, Series 2015-T1, 3.790% Nov. 2045 Nov. 2015 — 5,600 — Total Ocwen Freddie Advance Funding Facility (OFAF) (11) 30,492 264,508 — $ 442,654 $ 1,589,846 $ 2,090,247 Weighted average interest rate 2.91 % 1.97 % (1) The amortization date of our advance financing facilities is the date on which the revolving period ends under each advance financing 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 each of our 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(s) outstanding, and any new advances are ineligible to be financed. (2) Borrowing capacity is available to us only to the extent that we have pledged collateral available to borrow against. At September 30, 2015 , $176.9 million of the total borrowing capacity was available to us based on the amount of eligible collateral that had been pledged. (3) 1-Month LIBOR (1ML) was 0.19% and 0.17% at September 30, 2015 and December 31, 2014 , respectively. (4) We repaid this facility in full in June 2015 from the proceeds of the OFAF facility. (5) We voluntarily terminated this facility on January 15, 2015 . (6) The Series 2013-VF2 Notes were repaid in full on September 18, 2015 . (7) On September 18, 2015, the combined maximum borrowing capacity of Series 2014-VF3 Notes, a series of variable funding notes under our Ocwen Master Advance Receivables Trust (OMART) facility, was reduced to $450.0 million , and the Class B, C and D Notes were issued. There is a floor of 75 bps for 1 ML in determining the interest rate for variable rate Notes. (8) Effective July 1, 2015, the single outstanding Series 2014-VF4 Note under our OMART facility was replaced by four Notes - Class A, B, C and D. On September 18, 2015, the combined maximum borrowing capacity of the Series 2014-VF4 Notes was reduced to $450.0 million . There is a floor of 75 bps for 1 ML in determining the interest rate for variable rate Notes. (9) The Series 2015-VF5 Notes and the Series 2015-T1 Notes under our OMART facility were issued on September 18, 2015. Under the terms of the agreement, we must continue to borrow the full amount of the Series 2015-T1 Notes until the amortization date. If there is insufficient collateral to support the level of borrowing, the excess cash proceeds are not distributed to Ocwen but are held by the trustee, and interest expense continues to be based on the full amount of the term notes. There is a floor of 75 bps for 1 ML in determining the interest for variable rate Notes. (10) Effective April 23, 2015, the maximum borrowing under the Ocwen Servicer Advance Receivables Trust III (OSARTIII) facility decreases by $6.3 million per month until it is reduced to $75.0 million . (11) We entered into Ocwen Freddie Advance Funding Facility (OFAF) facility on June 10, 2015. Under the terms of the agreement, we must continue to borrow the full amount of the Series 2015-T1 and Series 2015-T2 Notes until the amortization date. If there is insufficient collateral to support the level of borrowing, the excess cash proceeds are not distributed to Ocwen but are held by the trustee, and interest expense continues to be based on the full amount of the term notes. The Series 2015-T2 Notes with a combined borrowing capacity of $155.0 million expired and were fully repaid on September 15, 2015 . |
Schedule of Financing Liabilities | Financing liabilities are comprised of the following at the dates indicated: Borrowings Collateral Interest Rate Maturity September 30, 2015 December 31, 2014 Servicing: Financing liability – MSRs pledged MSRs (1) (1) $ 560,059 $ 614,441 Secured Notes, Ocwen Asset Servicing Income Series, Series 2014-1 (2) MSRs (2) Feb. 2028 100,000 111,459 Financing Liability – Advances Pledged (3) Advances on loans (3) (3) 63,855 88,489 723,914 814,389 Lending: HMBS-related borrowings (4) Loans held for investment (LHFI) 1ML + 248 bps (4) 2,229,604 1,444,252 $ 2,953,518 $ 2,258,641 (1) This financing liability arose in connection with the NRZ/HLSS Transactions and has no contractual maturity. The balance of the liability is adjusted each reporting period to its fair value based on the present value of the estimated future cash flows underlying the related MSRs. (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 sales of advances in 2014 did not qualify for sales accounting treatment and were accounted for as a financing. (4) 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. |
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 September 30, 2015 December 31, 2014 Servicing: SSTL (1) (1) 1-Month Euro-dollar rate + 375 bps with a Eurodollar floor of 125 bps (1) Feb. 2018 $ — $ 705,927 $ 1,277,250 Master repurchase agreement (2) Loans held for sale (LHFS) 1ML + 200 - 345 bps Jul. 2016 23,871 26,129 32,018 23,871 732,056 1,309,268 Borrowings Collateral Interest Rate Maturity Available Borrowing Capacity September 30, 2015 December 31, 2014 Lending: Master repurchase agreement (3) LHFS 1ML + 200 bps Aug. 2016 68,618 131,382 208,010 Participation agreement (4) LHFS N/A Apr. 2016 — 46,597 41,646 Participation agreement (5) LHFS N/A Apr. 2016 — 33,864 196 Master repurchase agreement (6) LHFS 1ML + 175 - 275 bps Jul. 2015 — — 102,073 Master repurchase agreement (7) LHFI 1ML + 275bps Jul. 2015 — — 52,678 Mortgage warehouse agreement (8) LHFI 1ML + 275 bps; floor of 350 bps May 2016 — 60,180 23,851 68,618 272,023 428,454 92,489 1,004,079 1,737,722 Discount - SSTL — (3,009 ) (4,031 ) $ 92,489 $ 1,001,070 $ 1,733,691 Weighted average interest rate 4.42 % 4.33 % (1) 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 subject to a base rate floor of 2.25% or (b) the one month Eurodollar rate, plus a margin of 3.75% and subject to a one month Eurodollar floor of 1.25% . To date we have elected option (b) to determine the interest rate. On October 16, 2015, we entered into an amendment to the SSTL facility agreement pursuant to which, among other things, the Eurodollar margin was increased from 3.75% to 4.25% , effective October 20, 2015. See Note 21 – Subsequent Events for additional information. (2) On September 30, 2015, this repurchase agreement was renewed through September 29, 2016. Under this repurchase agreement, the lender provides financing on a committed basis for $50.0 million and, at the discretion of the lender, on an uncommitted basis for an additional $50.0 million . (3) On August 25, 2015, this repurchase agreement was renewed through August 23, 2016. Borrowing capacity was reduced from $300.0 million , of which $150.0 million was provided on an uncommitted basis, to $200.0 million all of which is provided on a committed basis. (4) Under this participation agreement, the lender provides financing for $100.0 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) Under this participation agreement, the lender provides financing for $150.0 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. (6) On April 16, 2015 , this facility was voluntarily terminated. (7) This facility was allowed to expire. (8) Borrowing capacity of $100.0 million under this facility is available at the discretion of the lender. This facility was renewed on August 24, 2015, and the borrowing capacity was increased from $60.0 million to $100.0 million . |
Other Liabilities (Tables)
Other Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Other Liabilities | Other liabilities were comprised of the following at the dates indicated: September 30, 2015 December 31, 2014 Contingent loan repurchase liability (1) $ 310,373 $ 274,265 Accrued expenses 167,412 142,592 Liability for indemnification obligations 86,873 132,918 Liability for uncertain tax positions (2) 48,700 28,436 Checks held for escheat 16,131 18,513 Payable to loan servicing and subservicing investors 13,856 67,722 Due to related parties (3) — 55,585 Other (4) (5) 392,820 73,503 $ 1,036,165 $ 793,534 (1) In connection with the Ginnie Mae EBO Transactions, we have re-recognized certain loans on our consolidated balance sheets and establish a corresponding repurchase liability regardless of our intention to repurchase the loan. (2) We file various U.S. federal, state and local, and foreign tax returns. The tax years in our major jurisdictions that remain subject to examination are our U.S. federal tax returns for the years ended December 31, 2008 through to the current tax year, our USVI corporate tax returns for the years ended December 31, 2012 through to the current tax year, and our India corporate tax returns for the years ended March 31, 2005 through to the current tax year. Our U.S. federal tax returns for the years ended December 31, 2008 , 2009 , and 2010 , our U.S. federal tax return for the year ended December 31, 2012 , and the U.S. federal tax return for our USVI subsidiary, OMS, for the year ended December 31, 2012 are currently under examination by the Internal Revenue Service (IRS). Although we are confident in the merits of our tax positions under examination, considering the current status of the various IRS examinations and our assessment of tax reserves for all open tax years, we increased our liability for uncertain tax positions by approximately $19.2 million and $20.2 million for the three and nine months ended September 30, 2015, respectively. We believe our liability for uncertain tax positions as of September 30, 2015 is appropriate. It is reasonably possible that there could be a change in the amount of our uncertain tax positions within the next 12 months due to activities of various worldwide taxing authorities, including proposed assessments of additional tax, possible settlement of tax audit issues, or the expiration of applicable statutes of limitations. An estimate of the change in our uncertain tax positions within the next 12 months cannot be made at this time. (3) Entities that we reported as related parties at December 31, 2014 are no longer considered to be related parties, and amounts payable to them are now reported within Other. (4) The balance at September 30, 2015 includes $180.4 million due in connection with the repurchase of loans from Ginnie Mae securitizations. The repurchased loans are classified as held for sale and carried at the lower of cost or fair value at September 30, 2015. On October 1, 2015, we settled this liability and sold these loans. (5) The balance at September 30, 2015 includes $80.0 million received prior to the closing of the related sale of MSRs and advances which is expected to occur by early November 2015. |
Derivative Financial Instrume43
Derivative Financial Instruments and Hedging Activities (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
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 nine months ended September 30, 2015 : IRLCs Forward MBS Trades (1) Interest Rate Caps Interest Rate Swaps Beginning notional balance $ 239,406 $ 703,725 $ 1,729,000 $ — Additions 4,210,647 6,248,108 2,179,333 450,000 Amortization — — (439,333 ) — Maturities (3,727,042 ) (3,414,877 ) — — Terminations (337,938 ) (2,864,057 ) — (450,000 ) Ending notional balance $ 385,073 $ 672,899 $ 3,469,000 $ — Fair value of derivative assets (liabilities) at: September 30, 2015 $ 10,010 $ (3,438 ) $ 1,501 $ — December 31, 2014 $ 6,065 $ (2,854 ) $ 567 $ — Maturity Oct. 2015 - Dec. 2015 Nov. 2015 - Dec. 2015 Nov. 2016 - Oct. 2017 N/A (1) As loans are originated and sold or as loan commitments expire, our forward MBS trade positions mature and are replaced by new positions based upon new loan commitments and originations and expected time to sell. |
Schedule of Gains (Losses) on Derivatives | The following summarizes our open derivative positions at September 30, 2015 and the gains (losses) on all derivatives used in each of the identified hedging programs for the year to date period then ended. None of the derivatives was designated as a hedge for accounting purposes at September 30, 2015 : Purpose Expiration Date Notional Amount Fair Value (1) Gains / (Losses) Consolidated Statements of Operations Caption Interest rate risk of borrowings Interest rate caps (2) Nov. 2016 - Oct. 2017 $ 3,469,000 $ 1,501 $ (1,613 ) Other, net Interest rate risk of mortgage loans held for sale and of IRLCs Forward MBS trades Nov. 2015 - Dec 2015 672,899 (3,438 ) (10,878 ) Gain on loans held for sale, net IRLCs Oct. 2015 - Nov. 2015 385,073 10,010 3,944 Gain on loans held for sale, net Total derivatives $ 8,073 $ (8,547 ) (1) Derivatives are reported at fair value in Receivables, Other assets or in Other liabilities on our Unaudited Consolidated Balance Sheets. (2) To hedge the effect of changes in 1ML on advance funding facilities. |
Schedule of Changes in AOCL | Changes in AOCL during the nine months ended September 30 were as follows: 2015 2014 Beginning balance $ 8,413 $ 10,151 Losses on terminated hedging relationships amortized to earnings (6,916 ) (1,579 ) Decrease in deferred taxes on accumulated losses on cash flow hedges 389 217 Decrease in accumulated losses on cash flow hedges, net of taxes (6,527 ) (1,362 ) Other, net of taxes — (5 ) Ending balance $ 1,886 $ 8,784 |
Schedule of Other Income (Expense), Net Related to Derivative Financial Instruments | Other income (expense), net, includes the following related to derivative financial instruments for the three and nine months ended September 30 : Three Months Nine Months 2015 2014 2015 2014 Losses on economic hedges $ (738 ) $ (6 ) $ (1,613 ) $ (374 ) Write-off of losses in AOCL for a discontinued hedge relationship (523 ) (408 ) (6,916 ) (1,580 ) $ (1,261 ) $ (414 ) $ (8,529 ) $ (1,954 ) |
Interest Expense (Tables)
Interest Expense (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Other Income and Expenses [Abstract] | |
Schedule of Components of Interest Expense | The following table presents the components of interest expense for the three and nine months ended September 30 : Three months Nine Months 2015 2014 2015 2014 Financing liabilities (1)(2)(3) $ 73,866 $ 88,246 $ 222,067 $ 281,930 Other secured borrowings 19,822 20,790 68,447 62,359 Match funded liabilities 15,425 15,097 45,379 46,762 6.625% Senior unsecured notes 6,741 6,141 19,521 9,466 Other 2,459 2,775 7,192 8,612 $ 118,313 $ 133,049 $ 362,606 $ 409,129 (1) Includes interest expense related to financing liabilities recorded in connection with the NRZ/HLSS Transactions as indicated in the table below. Three months Nine Months 2015 2014 2015 2014 Servicing fees collected on behalf of NRZ $ 175,994 $ 177,113 $ 531,399 $ 553,423 Less: Subservicing fee retained by Ocwen 91,597 83,550 272,802 266,514 Net servicing fees remitted to NRZ 84,397 93,563 258,597 286,909 Less: Reduction in financing liability 21,160 8,736 52,159 12,960 Interest expense on NRZ financing liability $ 63,237 $ 84,827 $ 206,438 $ 273,949 (2) Includes $8.2 million and $8.5 million for the three and nine months ended September 30, 2015 , respectively, of fees incurred in connection with our agreement to compensate NRZ for certain increased costs associated with its servicing advance financing facilities that are the direct result of a downgrade of our S&P servicer rating. (3) Interest expense that we expect to be paid on the HMBS-related borrowings is included with net fair value gains in Other revenues. |
Schedule of Related Party Interest Expense | Three months Nine Months 2015 2014 2015 2014 Servicing fees collected on behalf of NRZ $ 175,994 $ 177,113 $ 531,399 $ 553,423 Less: Subservicing fee retained by Ocwen 91,597 83,550 272,802 266,514 Net servicing fees remitted to NRZ 84,397 93,563 258,597 286,909 Less: Reduction in financing liability 21,160 8,736 52,159 12,960 Interest expense on NRZ financing liability $ 63,237 $ 84,827 $ 206,438 $ 273,949 |
Basic and Diluted Earnings pe45
Basic and Diluted Earnings per Share (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliation of Calculation of Basic Earnings per Share to Diluted Earnings per Share | The following is a reconciliation of the calculation of basic earnings per share to diluted earnings per share for the three and nine months ended September 30 : Three Months Nine Months 2015 2014 2015 2014 Basic earnings per share: Net income (loss) attributable to Ocwen common stockholders $ (66,869 ) $ (76,189 ) $ (22,776 ) $ 49,273 Weighted average shares of common stock 125,383,639 130,551,197 125,322,742 133,318,381 Basic earnings (loss) per share $ (0.53 ) $ (0.58 ) $ (0.18 ) $ 0.37 Diluted earnings per share (1): Net income (loss) attributable to Ocwen common stockholders $ (66,869 ) $ (76,189 ) $ (22,776 ) $ 49,273 Preferred stock dividends (2) — — — — Adjusted net income (loss) attributable to Ocwen $ (66,869 ) $ (76,189 ) $ (22,776 ) $ 49,273 Weighted average shares of common stock 125,383,639 130,551,197 125,322,742 133,318,381 Effect of dilutive elements (1): Preferred stock (2) — — — — Stock options — — — 3,558,689 Common stock awards — — — 4,256 Dilutive weighted average shares of common stock 125,383,639 130,551,197 125,322,742 136,881,326 Diluted earnings (loss) per share $ (0.53 ) $ (0.58 ) $ (0.18 ) $ 0.36 Stock options and common stock awards excluded from the computation of diluted earnings per share: Anti-dilutive (3) 2,037,872 91,250 1,965,049 47,083 Market-based (4) 924,438 295,000 924,438 295,000 (1) For the three and nine months ended September 30, 2015 and for three months ended September 30, 2014, we have excluded the effect of preferred stock, stock options and common stock awards from the computation of diluted earnings per share because of the anti-dilutive effect of our reported net loss. (2) Prior to the conversion of our remaining preferred stock into common stock in July 2014, we computed the effect on diluted earnings per share using the if-converted method. For purposes of computing diluted earnings per share, we assume the conversion of the preferred stock into shares of common stock unless the effect is anti-dilutive. Conversion of the preferred stock was not assumed for the nine months ended September 30, 2014 because the effect would have been antidilutive. (3) These options were anti-dilutive because their exercise price was greater than the average market price of our stock. (4) 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) | 9 Months Ended |
Sep. 30, 2015 | |
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 Results of Operations Three months ended September 30, 2015 Revenue (1) $ 374,936 $ 29,662 $ 348 $ — $ 404,946 Expenses (1) (2) 318,439 23,126 46,161 — 387,726 Other income (expense): Interest income 1,175 3,883 635 — 5,693 Interest expense (109,357 ) (2,256 ) (6,700 ) — (118,313 ) Other (1) 38,943 425 114 — 39,482 Other income (expense), net (69,239 ) 2,052 (5,951 ) — (73,138 ) Income (loss) before income taxes $ (12,742 ) $ 8,588 $ (51,764 ) $ — $ (55,918 ) Three months ended September 30, 2014 Revenue (1) $ 485,303 $ 26,877 $ 1,557 $ (39 ) $ 513,698 Expenses (1) (2) 313,964 22,632 118,482 (39 ) 455,039 Other income (expense): Interest income 903 4,825 865 — 6,593 Interest expense (124,106 ) (2,601 ) (6,342 ) — (133,049 ) Other (1) (3,618 ) 139 (990 ) — (4,469 ) Other income (expense), net (126,821 ) 2,363 (6,467 ) — (130,925 ) Income (loss) before income taxes $ 44,518 $ 6,608 $ (123,392 ) $ — $ (72,266 ) Servicing Lending Corporate Items and Other Corporate Eliminations Business Segments Consolidated Nine months ended September 30, 2015 Revenue (1) $ 1,269,269 $ 106,721 $ 2,709 $ (58 ) $ 1,378,641 Expenses (1) (2) 940,764 73,497 104,133 (58 ) 1,118,336 Other income (expense): Interest income 3,232 11,025 2,049 — 16,306 Interest expense (336,088 ) (7,058 ) (19,460 ) — (362,606 ) Other (1) 82,909 1,826 671 — 85,406 Other income (expense), net (249,947 ) 5,793 (16,740 ) — (260,894 ) Income (loss) before income taxes $ 78,558 $ 39,017 $ (118,164 ) $ — $ (589 ) Nine months ended September 30, 2014 Revenue (1) $ 1,526,606 $ 86,811 $ 4,734 $ (118 ) $ 1,618,033 Expenses (1) (2) 919,998 81,261 148,555 (118 ) 1,149,696 Other income (expense): Interest income 1,805 13,117 2,550 — 17,472 Interest expense (391,122 ) (8,271 ) (9,736 ) — (409,129 ) Other (1) (4,622 ) 3,846 710 — (66 ) Other income (expense), net (393,939 ) 8,692 (6,476 ) — (391,723 ) Income (loss) before income taxes $ 212,669 $ 14,242 $ (150,297 ) $ — $ 76,614 Servicing Lending Corporate Items and Other Corporate Eliminations Business Segments Consolidated Total Assets September 30, 2015 $ 4,681,176 $ 2,571,893 $ 757,985 $ — $ 8,011,054 December 31, 2014 $ 5,881,862 $ 1,963,729 $ 421,687 $ — $ 8,267,278 September 30, 2014 $ 6,059,359 $ 1,706,964 $ 589,317 $ — $ 8,355,640 (1) Intersegment billings for services rendered to other segments are recorded as revenues, as contra-expense or as other income, depending on the type of service that is rendered. (2) Depreciation and amortization expense are as follows: Servicing Lending Corporate Items and Other Business Segments Consolidated For the three months ended September 30, 2015 Depreciation expense $ 694 $ 96 $ 4,256 $ 5,046 Amortization of mortgage servicing rights 18,023 85 — 18,108 Amortization of debt discount 329 — — 329 Amortization of debt issuance costs 2,981 — 344 3,325 For the three months ended September 30, 2014 Depreciation expense $ 2,636 $ 98 $ 3,022 $ 5,756 Amortization of mortgage servicing rights 60,689 94 — 60,783 Amortization of debt discount 331 — — 331 Amortization of debt issuance costs 1,114 — 344 1,458 For the nine months ended September 30, 2015 Depreciation expense $ 1,736 $ 292 $ 11,439 $ 13,467 Amortization of mortgage servicing rights 87,926 262 — 88,188 Amortization of debt discount 1,022 — — 1,022 Amortization of debt issuance costs 9,336 — 1,049 10,385 For the nine months ended September 30, 2014 Depreciation expense $ 8,099 $ 235 $ 8,267 $ 16,601 Amortization of mortgage servicing rights 185,263 613 199 186,075 Amortization of debt discount 991 — — 991 Amortization of debt issuance costs 3,241 — 513 3,754 |
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 September 30, 2015 Depreciation expense $ 694 $ 96 $ 4,256 $ 5,046 Amortization of mortgage servicing rights 18,023 85 — 18,108 Amortization of debt discount 329 — — 329 Amortization of debt issuance costs 2,981 — 344 3,325 For the three months ended September 30, 2014 Depreciation expense $ 2,636 $ 98 $ 3,022 $ 5,756 Amortization of mortgage servicing rights 60,689 94 — 60,783 Amortization of debt discount 331 — — 331 Amortization of debt issuance costs 1,114 — 344 1,458 For the nine months ended September 30, 2015 Depreciation expense $ 1,736 $ 292 $ 11,439 $ 13,467 Amortization of mortgage servicing rights 87,926 262 — 88,188 Amortization of debt discount 1,022 — — 1,022 Amortization of debt issuance costs 9,336 — 1,049 10,385 For the nine months ended September 30, 2014 Depreciation expense $ 8,099 $ 235 $ 8,267 $ 16,601 Amortization of mortgage servicing rights 185,263 613 199 186,075 Amortization of debt discount 991 — — 991 Amortization of debt issuance costs 3,241 — 513 3,754 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
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 (prior to the sale of its assets to NRZ), AAMC and Residential (and, as applicable, their subsidiaries) for the 2014 periods presented and the amounts receivable or payable at December 31, 2014. See Note 19 — Commitments for additional discussion of our long-term agreements with Altisource and Residential. See Note 4 — Sales of Advances and MSRs , Note 5 – Loans Held for Sale , Note 8 – Mortgage Servicing and Note 11 – Borrowings for additional discussion of the HLSS and EBO transactions. For the Three Months Ended For the Nine Months Ended Revenues and Expenses: Altisource agreements Revenues $ 10,716 $ 30,007 Expenses 27,099 70,577 HLSS support services agreement Revenues $ 84 $ 458 Expenses 345 1,590 AAMC support services and facilities agreements Revenues $ 251 $ 952 Residential servicing agreement Revenues $ 4,618 $ 12,141 |
Schedule of Amounts Receivable or Payable | Net Receivable (Payable) December 31, 2014 Altisource $ (4,909 ) HLSS 7,884 AAMC 232 Residential 100 $ 3,307 |
Contingencies (Tables)
Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Indemnification Obligations | The following table presents the changes in our liability for representation and warranty obligations, compensatory fees for foreclosures that may ultimately exceed investor timelines and related indemnification obligations for the nine months ended September 30 : 2015 2014 Beginning balance $ 132,918 $ 192,716 Provision for representation and warranty obligations 1,695 5,076 New production reserves 664 820 Charge-offs and other (1) (48,404 ) (54,776 ) Ending balance $ 86,873 $ 143,836 (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 and B49
Description of Business and Basis of Presentation - Narrative (Details) - USD ($) $ in Thousands | Oct. 20, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 18, 2015 | Jun. 30, 2015 |
Description of Business and Basis of Presentation [Line Items] | |||||
Expected proceeds from sale of mortgage servicing rights | $ 598,059 | $ 287 | |||
Agency Mortgage Servicing Rights [Member] | |||||
Description of Business and Basis of Presentation [Line Items] | |||||
UPB of Agency MSRs sold | 89,000,000 | ||||
Expected proceeds from sale of mortgage servicing rights | 642,000 | ||||
Advance Funding Facility [Member] | |||||
Description of Business and Basis of Presentation [Line Items] | |||||
Maximum borrowing capacity | $ 1,700,000 | $ 1,800,000 | |||
Senior Secured Term Loan [Member] | |||||
Description of Business and Basis of Presentation [Line Items] | |||||
Repayment of SSTL | $ 561,600 | ||||
Subsequent Event [Member] | Senior Secured Term Loan [Member] | |||||
Description of Business and Basis of Presentation [Line Items] | |||||
Repayment of SSTL | $ 50,000 | ||||
Subsequent Event [Member] | Amended Senior Secured Term Loan [Member] | |||||
Description of Business and Basis of Presentation [Line Items] | |||||
Percentage of net cash proceeds from permitted asset sales allowed to prepay loans | 100.00% |
Securitizations and Variable 50
Securitizations and Variable Interest Entities - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Servicing Assets at Fair Value [Line Items] | |||||
Average period to securitization | 30 days | ||||
Percentage of loan transferred through securitization 60 days or more past due | 8.10% | 5.10% | |||
Charge-offs, net of recoveries associated with transferred loans | $ 0 | $ 0 | |||
Other secured borrowings | 2,953,518,000 | 2,953,518,000 | $ 2,258,641,000 | ||
Mortgage Servicing Rights - Amortized Costs [Member] | |||||
Servicing Assets at Fair Value [Line Items] | |||||
Acquisitions | 9,500,000 | $ 10,700,000 | 27,800,000 | $ 32,100,000 | |
HMBS - Related Borrowings [Member] | |||||
Servicing Assets at Fair Value [Line Items] | |||||
Other secured borrowings | 2,200,000,000 | 2,200,000,000 | 1,400,000,000 | ||
Home Equity Conversion Mortgages [Member] | |||||
Servicing Assets at Fair Value [Line Items] | |||||
Loans pledged as collateral | $ 2,300,000,000 | $ 2,300,000,000 | $ 1,600,000,000 |
Securitizations and Variable 51
Securitizations and Variable Interest Entities - Schedule of Cash Flows Related to Transfers Accounted for as Sales (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Transfers and Servicing [Abstract] | ||||
Proceeds received from securitizations | $ 1,478,142 | $ 1,369,468 | $ 3,964,866 | $ 4,346,991 |
Servicing fees collected | 5,973 | 10,840 | 25,066 | 25,174 |
Purchases of previously transferred assets, net of claims reimbursed | 1,512 | 2,237 | 2,408 | 2,237 |
Cash flows received from and paid to securitization trusts | $ 1,485,627 | $ 1,382,545 | $ 3,992,340 | $ 4,374,402 |
Securitizations and Variable 52
Securitizations 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 ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 | |
Transfers and Servicing [Abstract] | |||
Mortgage servicing rights, at amortized cost | $ 45,064 | $ 82,542 | |
Mortgage servicing rights, at fair value | 226 | 2,840 | |
Advances and match funded advances | 21,686 | 1,236 | |
UPB of loans transferred | [1] | 6,811,864 | 9,353,187 |
Maximum exposure to loss | $ 6,878,840 | $ 9,439,805 | |
[1] | The UPB of the loans transferred is the maximum exposure to loss under our standard representations and warranties obligations. |
Fair Value - Schedule of Fair V
Fair Value - Schedule of Fair Value Assets and Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | ||
Loans held for sale: | ||||||
Loans held for sale, at fair value | $ 235,909 | $ 401,120 | $ 335,950 | $ 503,753 | ||
Total Loans held for sale | 526,972 | 488,612 | ||||
Financial liabilities: | ||||||
Match funded liabilities | 1,589,846 | 2,090,247 | ||||
Financing liabilities: | ||||||
Total Financing liabilities | 2,953,518 | 2,258,641 | ||||
Other secured borrowings: | ||||||
Total Other secured borrowings | 1,001,070 | 1,733,691 | ||||
Senior unsecured notes | 350,000 | 350,000 | ||||
MSRs: | ||||||
Mortgage servicing rights, at fair value | 787,344 | 93,901 | ||||
Total MSRs | 1,153,295 | 1,913,992 | ||||
Carrying Value [Member] | ||||||
Loans held for sale: | ||||||
Total Loans held for sale | 526,972 | 488,612 | ||||
Financing liabilities: | ||||||
Total Financing liabilities | 2,953,518 | 2,258,641 | ||||
Other secured borrowings: | ||||||
Total Other secured borrowings | 1,001,070 | 1,733,691 | ||||
MSRs: | ||||||
Total MSRs | 1,153,295 | 1,913,992 | ||||
Carrying Value [Member] | Level 1 [Member] | Forward Mortgage Backed Securities Trades [Member] | ||||||
Derivative financial instruments assets (liabilities): | ||||||
Forward MBS trades | (3,438) | (2,854) | [1] | |||
Carrying Value [Member] | Level 2 [Member] | ||||||
Loans held for sale: | ||||||
Loans held for sale, at fair value | 235,909 | 401,120 | [1] | |||
Other secured borrowings: | ||||||
Senior secured term loan | 702,918 | 1,273,219 | [2] | |||
Senior unsecured notes | 350,000 | 350,000 | [2] | |||
Carrying Value [Member] | Level 2 [Member] | Interest Rate Lock Commitments [Member] | ||||||
Derivative financial instruments assets (liabilities): | ||||||
Interest Rate Lock Commitments (IRLCs) | 10,010 | 6,065 | [1] | |||
Carrying Value [Member] | Level 3 [Member] | ||||||
Loans held for sale: | ||||||
Loans held for sale, at lower of cost or fair value | 291,063 | 87,492 | [3] | |||
Loans held for investment - Reverse mortgages, at fair value | 2,319,515 | 1,550,141 | [1] | |||
Advances and match funded advances | 2,472,996 | 3,303,356 | [2] | |||
Receivables, net | 361,572 | 270,596 | [2] | |||
Mortgage-backed securities, at fair value | 8,541 | 7,335 | [1] | |||
Financial liabilities: | ||||||
Match funded liabilities | 1,589,846 | 2,090,247 | [2] | |||
Financing liabilities: | ||||||
HMBS-related borrowings, at fair value | 2,229,604 | 1,444,252 | [1] | |||
Financing liability - MSRs pledged | 560,059 | 614,441 | [1] | |||
Other | 163,855 | 199,948 | [2] | |||
Other secured borrowings: | ||||||
Other | 298,152 | 460,472 | [2] | |||
MSRs: | ||||||
Mortgage servicing rights, at fair value | 787,344 | 93,901 | [1] | |||
Mortgage servicing rights, at amortized cost | 365,951 | 1,820,091 | [2],[4] | |||
Carrying Value [Member] | Level 3 [Member] | Interest Rate Caps [Member] | ||||||
Derivative financial instruments assets (liabilities): | ||||||
Interest rate caps | 1,501 | 567 | [1] | |||
Fair Value [Member] | ||||||
Loans held for sale: | ||||||
Total Loans held for sale | 526,972 | 488,612 | ||||
Financing liabilities: | ||||||
Total Financing liabilities | 2,934,388 | 2,248,341 | ||||
Other secured borrowings: | ||||||
Total Other secured borrowings | 1,000,549 | 1,658,699 | ||||
MSRs: | ||||||
Total MSRs | 1,191,877 | 2,331,604 | ||||
Fair Value [Member] | Level 1 [Member] | Forward Mortgage Backed Securities Trades [Member] | ||||||
Derivative financial instruments assets (liabilities): | ||||||
Forward MBS trades | [1] | (3,438) | (2,854) | |||
Fair Value [Member] | Level 2 [Member] | ||||||
Loans held for sale: | ||||||
Loans held for sale, at fair value | [1] | 235,909 | 401,120 | |||
Other secured borrowings: | ||||||
Senior secured term loan | [2] | 702,397 | 1,198,227 | |||
Senior unsecured notes | [2] | 321,563 | 321,563 | |||
Fair Value [Member] | Level 2 [Member] | Interest Rate Lock Commitments [Member] | ||||||
Derivative financial instruments assets (liabilities): | ||||||
Interest Rate Lock Commitments (IRLCs) | [1] | 10,010 | 6,065 | |||
Fair Value [Member] | Level 3 [Member] | ||||||
Loans held for sale: | ||||||
Loans held for sale, at lower of cost or fair value | [3] | 291,063 | 87,492 | |||
Loans held for investment - Reverse mortgages, at fair value | [1] | 2,319,515 | 1,550,141 | |||
Advances and match funded advances | [2] | 2,472,996 | 3,303,356 | |||
Receivables, net | [2] | 361,572 | 270,596 | |||
Mortgage-backed securities, at fair value | [1] | 8,541 | 7,335 | |||
Financial liabilities: | ||||||
Match funded liabilities | [2] | 1,589,901 | 2,090,247 | |||
Financing liabilities: | ||||||
HMBS-related borrowings, at fair value | [1] | 2,229,604 | 1,444,252 | |||
Financing liability - MSRs pledged | [1] | 560,059 | 614,441 | |||
Other | [2] | 144,725 | 189,648 | |||
Other secured borrowings: | ||||||
Other | [2] | 298,152 | 460,472 | |||
MSRs: | ||||||
Mortgage servicing rights, at fair value | [1] | 787,344 | 93,901 | |||
Mortgage servicing rights, at amortized cost | 404,533 | 2,237,703 | [2],[4] | |||
Fair Value [Member] | Level 3 [Member] | Interest Rate Caps [Member] | ||||||
Derivative financial instruments assets (liabilities): | ||||||
Interest rate caps | [1] | $ 1,501 | $ 567 | |||
[1] | Measured at fair value on a recurring basis. | |||||
[2] | Disclosed, but not carried, at fair value. | |||||
[3] | Measured at fair value on a non-recurring basis. | |||||
[4] | The balance at September 30, 2015 includes our impaired government-insured stratum of amortization method MSRs, which is measured at fair value on a non-recurring basis. The carrying value of this stratum at September 30, 2015 was $144.2 million, net of a valuation allowance of $25.1 million. |
Fair Value - Schedule of Fair54
Fair Value - Schedule of Fair Value Assets and Liabilities (Footnote) (Details) - Carrying Value [Member] - Impaired Government Insured Stratum [Member] $ in Millions | Sep. 30, 2015USD ($) |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
MSRs, at amortized cost | $ 144.2 |
Valuation allowance | $ 25.1 |
Fair Value - Schedule of Reconc
Fair Value - Schedule of Reconciliation of Changes in Fair Value of Level 3 Assets and Liabilities (Details) - Level 3 [Member] - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||
Beginning balance | $ 350,737 | $ (443,846) | $ (406,749) | $ (514,891) | |
Purchases, issuances, sales and settlements: | |||||
Purchases | 2,084 | 0 | 2,201 | 7,700 | |
Issuances | (20,468) | 18,114 | (24,061) | (6,361) | |
Transfer from MSRs, at amortized cost | 839,157 | ||||
Transfer from loans held for sale, at fair value | 110,874 | ||||
Sales | (2,329) | 0 | (71,318) | 0 | |
Settlements | 23,303 | (5,112) | 56,745 | [1] | (16,453) |
Purchases, issuances, sales and settlements, total | 2,590 | 13,002 | 802,724 | 95,760 | |
Total realized and unrealized gains and (losses): | |||||
Included in earnings | (26,089) | 636 | (68,737) | [2] | (11,077) |
Included in Other comprehensive income | 0 | 0 | 0 | [2] | 0 |
Total realized and unrealized gains and (losses) | (26,089) | 636 | (68,737) | [2] | (11,077) |
Transfers in and / or out of Level 3 | 0 | 0 | 0 | 0 | |
Ending balance | 327,238 | (430,208) | 327,238 | (430,208) | |
Loans Held for Investment - Reverse Mortgages [Member] | |||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||
Beginning balance | 2,097,192 | 1,107,626 | 1,550,141 | 618,018 | |
Purchases, issuances, sales and settlements: | |||||
Purchases | 0 | 0 | 0 | 0 | |
Issuances | 250,600 | 208,566 | 781,002 | 565,670 | |
Transfer from MSRs, at amortized cost | 0 | ||||
Transfer from loans held for sale, at fair value | 110,874 | ||||
Sales | 0 | 0 | 0 | 0 | |
Settlements | (41,582) | (27,592) | (105,505) | [1] | (56,193) |
Purchases, issuances, sales and settlements, total | 209,018 | 180,974 | 675,497 | 620,351 | |
Total realized and unrealized gains and (losses): | |||||
Included in earnings | 13,305 | 26,724 | 93,877 | [2] | 76,955 |
Included in Other comprehensive income | 0 | 0 | 0 | [2] | 0 |
Total realized and unrealized gains and (losses) | 13,305 | 26,724 | 93,877 | [2] | 76,955 |
Transfers in and / or out of Level 3 | 0 | 0 | 0 | 0 | |
Ending balance | 2,319,515 | 1,315,324 | 2,319,515 | 1,315,324 | |
HMBS - Related Borrowings [Member] | |||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||
Beginning balance | (1,987,998) | (1,033,712) | (1,444,252) | (615,576) | |
Purchases, issuances, sales and settlements: | |||||
Purchases | 0 | 0 | 0 | 0 | |
Issuances | (271,068) | (190,452) | (803,924) | (572,031) | |
Transfer from MSRs, at amortized cost | 0 | ||||
Transfer from loans held for sale, at fair value | 0 | ||||
Sales | 0 | 0 | 0 | 0 | |
Settlements | 43,725 | 12,690 | 107,522 | [1] | 25,725 |
Purchases, issuances, sales and settlements, total | (227,343) | (177,762) | (696,402) | (546,306) | |
Total realized and unrealized gains and (losses): | |||||
Included in earnings | (14,263) | (24,620) | (88,950) | [2] | (74,212) |
Included in Other comprehensive income | 0 | 0 | 0 | [2] | 0 |
Total realized and unrealized gains and (losses) | (14,263) | (24,620) | (88,950) | [2] | (74,212) |
Transfers in and / or out of Level 3 | 0 | 0 | 0 | 0 | |
Ending balance | (2,229,604) | (1,236,094) | (2,229,604) | (1,236,094) | |
Mortgage-Backed Securities [Member] | |||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||
Beginning balance | 8,157 | 7,502 | 7,335 | 0 | |
Purchases, issuances, sales and settlements: | |||||
Purchases | 0 | 0 | 0 | 7,677 | |
Issuances | 0 | 0 | 0 | 0 | |
Transfer from MSRs, at amortized cost | 0 | ||||
Transfer from loans held for sale, at fair value | 0 | ||||
Sales | 0 | 0 | 0 | 0 | |
Settlements | 0 | 0 | 0 | [1] | 0 |
Purchases, issuances, sales and settlements, total | 0 | 0 | 0 | 7,677 | |
Total realized and unrealized gains and (losses): | |||||
Included in earnings | 384 | (124) | 1,206 | [2] | (299) |
Included in Other comprehensive income | 0 | 0 | 0 | [2] | 0 |
Total realized and unrealized gains and (losses) | 384 | (124) | 1,206 | [2] | (299) |
Transfers in and / or out of Level 3 | 0 | 0 | 0 | 0 | |
Ending balance | 8,541 | 7,378 | 8,541 | 7,378 | |
Financing Liability - MSRs Pledged [Member] | |||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||
Beginning balance | (581,219) | (629,579) | (614,441) | (633,804) | |
Purchases, issuances, sales and settlements: | |||||
Purchases | 0 | 0 | 0 | 0 | |
Issuances | 0 | 0 | 0 | 0 | |
Transfer from MSRs, at amortized cost | 0 | ||||
Transfer from loans held for sale, at fair value | 0 | ||||
Sales | 0 | 0 | 0 | 0 | |
Settlements | 21,160 | 10,724 | 54,382 | [1] | 14,949 |
Purchases, issuances, sales and settlements, total | 21,160 | 10,724 | 54,382 | 14,949 | |
Total realized and unrealized gains and (losses): | |||||
Included in earnings | 0 | 0 | 0 | [2] | 0 |
Included in Other comprehensive income | 0 | 0 | 0 | [2] | 0 |
Total realized and unrealized gains and (losses) | 0 | 0 | 0 | [2] | 0 |
Transfers in and / or out of Level 3 | 0 | 0 | 0 | 0 | |
Ending balance | (560,059) | (618,855) | (560,059) | (618,855) | |
Derivatives [Member] | |||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||
Beginning balance | 155 | 97 | 567 | 442 | |
Purchases, issuances, sales and settlements: | |||||
Purchases | 2,084 | 0 | 2,201 | 23 | |
Issuances | 0 | $ 0 | 0 | 0 | |
Transfer from MSRs, at amortized cost | 0 | ||||
Transfer from loans held for sale, at fair value | 0 | ||||
Sales | 0 | 0 | 0 | ||
Settlements | 0 | $ 0 | 346 | [1] | 0 |
Purchases, issuances, sales and settlements, total | 2,084 | 0 | 2,547 | 23 | |
Total realized and unrealized gains and (losses): | |||||
Included in earnings | (738) | (6) | (1,613) | [2] | (374) |
Included in Other comprehensive income | 0 | 0 | 0 | [2] | 0 |
Total realized and unrealized gains and (losses) | (738) | (6) | (1,613) | [2] | (374) |
Transfers in and / or out of Level 3 | 0 | 0 | 0 | 0 | |
Ending balance | 1,501 | 91 | 1,501 | 91 | |
MSRs [Member] | |||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||
Beginning balance | 814,450 | 104,220 | 93,901 | 116,029 | |
Purchases, issuances, sales and settlements: | |||||
Purchases | 0 | 0 | 0 | 0 | |
Issuances | 0 | 0 | (1,139) | 0 | |
Transfer from MSRs, at amortized cost | 839,157 | ||||
Transfer from loans held for sale, at fair value | 0 | ||||
Sales | (2,329) | 0 | (71,318) | 0 | |
Settlements | 0 | (934) | 0 | [1] | (934) |
Purchases, issuances, sales and settlements, total | (2,329) | (934) | 766,700 | (934) | |
Total realized and unrealized gains and (losses): | |||||
Included in earnings | (24,777) | (1,338) | (73,257) | [2] | (13,147) |
Included in Other comprehensive income | 0 | 0 | 0 | [2] | 0 |
Total realized and unrealized gains and (losses) | (24,777) | (1,338) | (73,257) | [2] | (13,147) |
Transfers in and / or out of Level 3 | 0 | 0 | 0 | 0 | |
Ending balance | $ 787,344 | $ 101,948 | $ 787,344 | $ 101,948 | |
[1] | In the event of a transfer to another party of servicing related to Rights to MSRs, we are required to reimburse New Residential Investment Corp. (NRZ) at predetermined contractual rates for the loss of servicing revenues. Settlements for Financing liability - MSRs pledged for the nine months ended September 30, 2015 includes $2.2 million of such reimbursements. | ||||
[2] | Total losses attributable to derivative financial instruments still held at September 30, 2015 were $1.3 million for the nine months ended September 30, 2015. |
Fair Value - Schedule of Reco56
Fair Value - Schedule of Reconciliation of Changes in Fair Value of Level 3 Assets and Liabilities (Footnote) (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Gains (losses) attributable to derivatives | $ (1.3) |
NRZ [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Servicing revenue, reimbursement payable | $ 2.2 |
Fair Value - Narrative (Details
Fair Value - Narrative (Details) | 3 Months Ended |
Sep. 30, 2015 | |
Loans Held for Investment - Reverse Mortgages [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Life | 6 years 8 months 12 days |
Repayment rate | 19.39% |
Discount rate | 2.95% |
HMBS - Related Borrowings [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Life | 5 years 6 months 14 days |
Repayment rate | 19.39% |
Discount rate | 2.27% |
Minimum [Member] | Loans Held for Investment - Reverse Mortgages [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Life | 6 years 3 months 29 days |
Repayment rate | 4.85% |
Minimum [Member] | HMBS - Related Borrowings [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Life | 4 years 10 months 6 days |
Repayment rate | 4.85% |
Maximum [Member] | Loans Held for Investment - Reverse Mortgages [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Life | 10 years 2 months 19 days |
Repayment rate | 53.75% |
Maximum [Member] | HMBS - Related Borrowings [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Life | 10 years 2 months 19 days |
Repayment rate | 53.75% |
Fair Value - Schedule of Signif
Fair Value - Schedule of Significant Assumptions used in Valuation (Details) | 3 Months Ended |
Sep. 30, 2015$ / loan | |
Mortgage Servicing Rights - Amortized Costs [Member] | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |
Weighted average prepayment speed | 12.67% |
Weighted average delinquency rate | 14.39% |
Advance financing cost | 5 years |
Interest rate for computing float earnings | 5 years |
Weighted average discount rate | 9.30% |
Weighted average cost to service (in dollars) | 98 |
Fair Value Agency Mortgage Servicing Rights [Member] | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |
Weighted average prepayment speed | 10.80% |
Weighted average delinquency rate | 1.10% |
Advance financing cost | 5 years |
Interest rate for computing float earnings | 5 years |
Weighted average discount rate | 9.00% |
Weighted average cost to service (in dollars) | 70 |
Fair Value Non-Agency Mortgage Servicing Rights [Member] | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |
Weighted average prepayment speed | 16.48% |
Weighted average delinquency rate | 29.80% |
Weighted average discount rate | 14.94% |
Weighted average cost to service (in dollars) | 336 |
Mortgage Servicing Rights Pledged [Member] | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |
Weighted average prepayment speed | 16.98% |
Weighted average delinquency rate | 30.75% |
Weighted average discount rate | 14.77% |
Weighted average cost to service (in dollars) | 341 |
London Interbank Offered Rate (LIBOR) [Member] | Fair Value Non-Agency Mortgage Servicing Rights [Member] | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |
Interest rate for computing float earnings | 1 month |
Fair value input, interest rate | 3.50% |
London Interbank Offered Rate (LIBOR) [Member] | Mortgage Servicing Rights Pledged [Member] | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |
Interest rate for computing float earnings | 1 month |
Fair value input, interest rate | 3.50% |
Sales of Advances and MSRs - Sc
Sales of Advances and MSRs - Schedule of MSRs and Advances Sold (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Servicing Assets at Fair Value [Line Items] | ||||
Carrying value of assets sold | $ 0 | |||
Gain (loss) on sale | $ 41,246,000 | $ 0 | $ 97,958,000 | 0 |
Total net cash received | 598,059,000 | $ 287,000 | ||
Mortgage Servicing Rights [Member] | ||||
Servicing Assets at Fair Value [Line Items] | ||||
Carrying value of assets sold | 662,923,000 | |||
Gain (loss) on sale | 97,958,000 | |||
Plus: Accrued expenses and reserves | 19,529,000 | |||
Sales price | 780,410,000 | |||
Amount due from purchaser at September 30 | 98,545,000 | |||
Amount paid to purchasers for estimated representation and warranty obligations, compensatory fees for foreclosures that may ultimately exceed investor timelines and related indemnification obligations | 83,806,000 | |||
Total net cash received | 598,059,000 | |||
Advances And Match Funded Advances [Member] | ||||
Servicing Assets at Fair Value [Line Items] | ||||
Carrying value of assets sold | 321,164,000 | |||
Gain (loss) on sale | 0 | |||
Plus: Accrued expenses and reserves | 0 | |||
Sales price | 321,164,000 | |||
Amount due from purchaser at September 30 | 35,226,000 | |||
Amount paid to purchasers for estimated representation and warranty obligations, compensatory fees for foreclosures that may ultimately exceed investor timelines and related indemnification obligations | 0 | |||
Total net cash received | $ 285,938,000 |
Sales of Advances and MSRs - Na
Sales of Advances and MSRs - Narrative (Details) | 9 Months Ended | |
Sep. 30, 2015USD ($)Agreement | Sep. 30, 2014USD ($) | |
Servicing Assets at Fair Value [Line Items] | ||
MSR sales | $ 0 | |
Number of non-agency servicing agreements terminated due to downgrades in mortgage servicer rating | Agreement | 4 | |
Agency Mortgage Servicing Rights [Member] | ||
Servicing Assets at Fair Value [Line Items] | ||
UPB of Agency MSRs sold | $ 87,600,000,000 | |
NRZ [Member] | ||
Servicing Assets at Fair Value [Line Items] | ||
Outstanding servicing advances | $ 5,100,000,000 | |
Period from sale of tranche of rights to mortgage servicing rights that apportionment of fees is subject to re-negotiation | 8 years | |
Liquidating damages paid | $ 2,200,000 |
Loans Held for Sale - Schedule
Loans Held for Sale - Schedule of Loans Held for Sale Fair Value (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | ||
Movement In Loans Held For Sale At Fair Value [Roll Forward] | |||
Beginning balance | $ 401,120 | $ 503,753 | |
Originations and purchases | 3,119,457 | 3,923,870 | |
Proceeds from sales | (3,306,180) | (4,010,644) | |
Principal collections | (6,512) | (9,156) | |
Transfers to loans held for investment - reverse mortgages | 0 | (110,874) | |
Gain on sale of loans | 37,580 | 39,486 | |
Other | [1] | (9,556) | (485) |
Ending balance | $ 235,909 | $ 335,950 | |
[1] | Other includes the change in fair value of $9.9 million and $1.2 million for the nine months ended September 30, 2015 and 2014, respectively. |
Loans Held for Sale - Schedul62
Loans Held for Sale - Schedule of Loans Held for Sale Fair Value (Footnote) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Receivables [Abstract] | ||
Change in fair value of loans held for sale | $ 9.9 | $ 1.2 |
Loans Held for Sale - Schedul63
Loans Held for Sale - Schedule of Loans Held for Sale at Lower Cost or Fair Value, Activity (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | ||
Movement In Loans Held For Sale At Fair Value [Roll Forward] | |||
Beginning balance | $ 87,492 | $ 62,907 | |
Purchases | 769,631 | 2,083,282 | |
Proceeds from sales | (577,591) | (1,744,273) | |
Principal collections | (45,137) | (248,552) | |
Transfers to accounts receivable | (4,811) | (96,257) | |
Transfers to real estate owned | (18,479) | (4,575) | |
Gain on sale of loans | 38,327 | 32,471 | |
Decrease (increase) in valuation allowance | 37,998 | (16,282) | |
Other | 3,633 | 3,216 | |
Ending balance | [1],[2] | $ 291,063 | $ 71,937 |
[1] | At September 30, 2015 and September 30, 2014, the balances are net of valuation allowances of $15.4 million and $47.0 million, respectively. The decrease in the valuation allowance for the nine months ended September 30, 2015 resulted principally from the reversal of $37.8 million of the allowance that was associated with loans that were sold to unrelated third parties during the six months ended June 30, 2015. This decrease was partly offset by an increase of $1.1 million in the allowance resulting from transfers from the liability for indemnification obligations for the initial valuation adjustment that we recognized on certain loans that we repurchased from Fannie Mae and Freddie Mac guaranteed securitizations. For the nine months ended September 30, 2014, the increase in the allowance was principally the result of $15.3 million of such transfers from the liability for indemnification obligations. | ||
[2] | At September 30, 2015 and September 30, 2014, the balances include $98.7 million and $24.1 million, respectively, of loans that we were required to repurchase from Ginnie Mae guaranteed securitizations as part of our servicing obligations. Repurchased loans are modified or otherwise remediated through loss mitigation activities or are reclassified to receivables. |
Loans Held for Sale - Schedul64
Loans Held for Sale - Schedule of Loans Held for Sale at Lower Cost or Fair Value Activity (Footnote) (Details) - USD ($) $ in Thousands | 9 Months Ended | |||||
Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans held for sale, at lower of cost or fair value | $ 291,063 | [1],[2] | $ 71,937 | [1],[2] | $ 87,492 | $ 62,907 |
Valuation Allowance for Loans Held for Sale [Member] | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Valuation allowance | 15,400 | 47,000 | ||||
Reversal of valuation allowances | 37,800 | |||||
Indemnification Liability Obligations [Member] | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Change in valuation allowance, adjustments | 1,100 | 15,300 | ||||
Ginnie Mae Loans [Member] | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans held for sale, at lower of cost or fair value | $ 98,700 | $ 24,100 | ||||
[1] | At September 30, 2015 and September 30, 2014, the balances are net of valuation allowances of $15.4 million and $47.0 million, respectively. The decrease in the valuation allowance for the nine months ended September 30, 2015 resulted principally from the reversal of $37.8 million of the allowance that was associated with loans that were sold to unrelated third parties during the six months ended June 30, 2015. This decrease was partly offset by an increase of $1.1 million in the allowance resulting from transfers from the liability for indemnification obligations for the initial valuation adjustment that we recognized on certain loans that we repurchased from Fannie Mae and Freddie Mac guaranteed securitizations. For the nine months ended September 30, 2014, the increase in the allowance was principally the result of $15.3 million of such transfers from the liability for indemnification obligations. | |||||
[2] | At September 30, 2015 and September 30, 2014, the balances include $98.7 million and $24.1 million, respectively, of loans that we were required to repurchase from Ginnie Mae guaranteed securitizations as part of our servicing obligations. Repurchased loans are modified or otherwise remediated through loss mitigation activities or are reclassified to receivables. |
Loans Held for Sale - Schedul65
Loans Held for Sale - Schedule of Gains on Loans Held for Sale, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Receivables [Abstract] | ||||
Gain on sales of loans | $ 34,038 | $ 42,185 | $ 130,425 | $ 145,455 |
Change in fair value of IRLCs | 4,956 | (4,188) | 3,944 | (2,315) |
Change in fair value of loans held for sale | 915 | (9,348) | (5,893) | (97) |
Loss on economic hedge instruments | (12,416) | (1,145) | (10,878) | (32,183) |
Other losses | (195) | (286) | (664) | (819) |
Gain on loans held for sale, net | $ 27,298 | $ 27,218 | $ 116,934 | $ 110,041 |
Loans Held for Sale - Narrative
Loans Held for Sale - Narrative (Details) - USD ($) $ in Thousands | May. 31, 2015 | May. 02, 2014 | May. 01, 2014 | Sep. 30, 2015 | Mar. 31, 2015 | Sep. 30, 2014 | Mar. 31, 2014 | Sep. 30, 2015 | Sep. 30, 2014 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Payments to purchase delinquent FHA-insured loans | $ 3,713,311 | $ 6,007,152 | |||||||
Gain on loans held for sale, net | $ 27,298 | $ 27,218 | 116,934 | 110,041 | |||||
Proceeds from sale of advances accounted for as a financing | 0 | 88,095 | |||||||
Lending [Member] | Line of Credit [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Collateral | 220,200 | 220,200 | |||||||
Servicing [Member] | Line of Credit [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Collateral | 29,700 | 29,700 | |||||||
Delinquent FHA Insured Loans [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Unpaid principal balance | $ 451,000 | $ 549,400 | |||||||
Payments to purchase delinquent FHA-insured loans | $ 479,600 | ||||||||
MSRs Retained [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Gain on loans held for sale, net | 9,500 | 10,700 | 27,800 | 32,100 | |||||
Ginnie Mae Loans [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Gain on loans held for sale, net | 5,300 | 9,900 | 18,300 | 50,600 | |||||
Gain on sales of reverse mortgage loans | $ 30,100 | $ 20,400 | $ 91,100 | $ 51,400 | |||||
HLSS Mortgage LP [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Proceeds from sale of loans held-for-sale | 612,300 | ||||||||
Gain on loans held for sale, net | 7,200 | ||||||||
HLSS Mortgage LP [Member] | FHA Buyout Loans [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Proceeds from sale of loans held-for-sale | 556,600 | ||||||||
HLSS Mortgage LP [Member] | Servicing Advances [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Proceeds from sale of loans held-for-sale | $ 55,700 | ||||||||
HLSS SEZ LP [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Proceeds from sale of advances accounted for as a financing | $ 20,200 | ||||||||
Unrelated Party [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Unpaid principal balance | $ 33,000 | $ 42,700 | |||||||
Proceeds from sale of loans held-for-sale | 462,500 | ||||||||
Gain on loans held for sale, net | $ 7,200 | $ 1,300 | $ 12,900 |
Advances - Schedule of Advances
Advances - Schedule of Advances Paid on Behalf of Borrowers or on Foreclosed Properties (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | |
Servicing: | |||||
Advances | $ 517,378 | $ 893,914 | $ 987,286 | $ 890,832 | |
Servicing, Principal and Interest [Member] | |||||
Servicing: | |||||
Advances | 103,235 | 128,217 | |||
Servicing, Taxes and Insurance [Member] | |||||
Servicing: | |||||
Advances | 258,846 | 467,891 | |||
Servicing, Foreclosures, Bankruptcy and Other [Member] | |||||
Servicing: | |||||
Advances | [1] | 150,898 | 293,340 | ||
Servicing [Member] | |||||
Servicing: | |||||
Advances | 512,979 | 889,448 | |||
Corporate Items and Other [Member] | |||||
Servicing: | |||||
Advances | $ 4,399 | $ 4,466 | |||
[1] | The balances at September 30, 2015 and December 31, 2014 are net of an allowance for losses of $60.4 million and $70.0 million, respectively. |
Advances - Schedule of Advanc68
Advances - Schedule of Advances Paid on Behalf of Borrowers or on Foreclosed Properties (Footnote) (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Servicing, Foreclosures, Bankruptcy and Other [Member] | ||
Advances On Behalf of Borrowers [Line Items] | ||
Allowance for losses on advances | $ 60.4 | $ 70 |
Advances - Schedule of Activity
Advances - Schedule of Activity in Advances (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Advances [Roll Forward] | ||
Beginning balance | $ 893,914 | $ 890,832 |
Acquisitions | 0 | 99,318 |
Transfers to match funded advances | 0 | (10,156) |
Sales of advances | (224,756) | 0 |
Collections of advances, net of new advances, and other | (151,780) | 7,292 |
Ending balance | $ 517,378 | $ 987,286 |
Match Funded Advances - Schedul
Match Funded Advances - Schedule of Match Funded Advances on Residential Loans (Details) - Residential Mortgage [Member] - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Dec. 31, 2013 |
Match Funded Advances [Line Items] | ||||
Principal and interest | $ 1,066,125 | $ 1,349,048 | ||
Taxes and insurance | 714,505 | 847,064 | ||
Foreclosures, bankruptcy, real estate and other | 174,988 | 213,330 | ||
Match funded advances | $ 1,955,618 | $ 2,409,442 | $ 2,359,579 | $ 2,552,383 |
Match Funded Advances - Sched71
Match Funded Advances - Schedule of Activity in Match Funded Advances (Details) - Residential Mortgage [Member] - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Match Funded Advances [Roll Forward] | ||
Beginning balance | $ 2,409,442 | $ 2,552,383 |
Acquisitions | 0 | 85,521 |
Transfers from advances | 0 | 10,156 |
Sales of advances | (96,408) | 0 |
Collections of pledged advances, net of new advances, and other | (357,416) | (288,481) |
Ending balance | $ 1,955,618 | $ 2,359,579 |
Mortgage Servicing - Schedule o
Mortgage Servicing - Schedule of Activity Related to MSRs - Amortization Method (Details) - USD ($) $ in Thousands | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | ||
Servicing Asset at Amortized Cost, Balance [Roll Forward] | ||||
Estimated fair value at end of period | $ 787,344 | $ 93,901 | ||
Mortgage Servicing Rights - Amortized Costs [Member] | ||||
Servicing Asset at Amortized Cost, Balance [Roll Forward] | ||||
Beginning balance | 1,820,091 | $ 1,953,352 | ||
Fair value election - transfer to MSRs carried at fair value | [1] | (787,142) | 0 | |
Additions recognized in connection with business acquisitions | 0 | 20,378 | ||
Additions recognized in connection with asset acquisitions | 10,055 | 19,338 | ||
Additions recognized on the sale of mortgage loans | 27,791 | 50,480 | ||
Sales | (591,605) | (137) | ||
Servicing transfers and adjustments | 0 | (518) | ||
Servicing asset at amortized value, gross | 479,190 | 2,042,893 | ||
Amortization | (88,188) | (186,075) | ||
Impairment | (25,051) | 0 | ||
Ending balance | 365,951 | 1,856,818 | ||
Estimated fair value at end of period | $ 404,533 | $ 2,364,393 | ||
[1] | Effective January 1, 2015, we elected fair value accounting for a newly-created class of non-Agency MSRs, which were previously accounted for using the amortization method. This irrevocable election applies to all subsequently acquired or originated servicing assets and liabilities that have characteristics consistent with this class. We recorded a cumulative-effect adjustment of $52.0 million (before deferred income taxes of $9.2 million) to retained earnings as of January 1, 2015 to reflect the excess of the fair value of these MSRs over their carrying amount. At December 31, 2014, the UPB of the loans related to the non-Agency MSRs for which the fair value election was made was $195.3 billion. |
Mortgage Servicing - Schedule73
Mortgage Servicing - Schedule of Activity Related to MSRs - Amortization Method (Footnote) (Details) - Non Agency Mortgage Servicing Rights [Member] $ in Millions | 12 Months Ended |
Dec. 31, 2014USD ($) | |
Servicing Asset at Amortized Cost [Line Items] | |
Fair value measurement of non-agency MSRs, cumulative-effect on retained earnings | $ 52 |
Deferred income taxes | 9.2 |
Unpaid principal balance of MSRs | $ 195,300 |
Mortgage Servicing - Schedule74
Mortgage Servicing - Schedule of Activity Related to MSRs - Fair Value Measurement Method (Details) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | ||
Servicing Asset at Fair Value, Amount [Roll Forward] | ||||
Beginning balance | $ 93,901,000 | |||
Sales | $ 0 | |||
Changes in fair value: | ||||
Ending balance | 787,344,000 | $ 93,901,000 | ||
Conventional [Member] | ||||
Servicing Asset at Fair Value, Amount [Roll Forward] | ||||
Beginning balance | 93,901,000 | |||
Fair value election - transfer from MSRs carried at amortized cost | 787,142,000 | |||
Cumulative effect of fair value election | 52,015,000 | |||
Sales | (71,318,000) | |||
Servicing transfers and adjustments | (1,139,000) | |||
Changes in fair value: | ||||
Changes in valuation inputs or other assumptions | [1] | 9,439,000 | ||
Realization of expected future cash flows and other changes | [1] | (82,696,000) | ||
Ending balance | 787,344,000 | 93,901,000 | ||
Fair Value Agency Mortgage Servicing Rights [Member] | Conventional [Member] | ||||
Servicing Asset at Fair Value, Amount [Roll Forward] | ||||
Beginning balance | 93,901,000 | 116,029,000 | 116,029,000 | |
Fair value election - transfer from MSRs carried at amortized cost | 0 | 0 | ||
Cumulative effect of fair value election | 0 | 0 | ||
Sales | (70,084,000) | 0 | ||
Servicing transfers and adjustments | 0 | (934,000) | ||
Changes in fair value: | ||||
Changes in valuation inputs or other assumptions | [1] | (2,592,000) | (12,217,000) | |
Realization of expected future cash flows and other changes | [1] | (6,808,000) | (930,000) | |
Ending balance | 14,417,000 | $ 101,948,000 | 93,901,000 | |
Fair Value Non-Agency Mortgage Servicing Rights [Member] | Conventional [Member] | ||||
Servicing Asset at Fair Value, Amount [Roll Forward] | ||||
Beginning balance | 0 | |||
Fair value election - transfer from MSRs carried at amortized cost | 787,142,000 | |||
Cumulative effect of fair value election | 52,015,000 | |||
Sales | (1,234,000) | |||
Servicing transfers and adjustments | (1,139,000) | |||
Changes in fair value: | ||||
Changes in valuation inputs or other assumptions | [1] | 12,031,000 | ||
Realization of expected future cash flows and other changes | [1] | (75,888,000) | ||
Ending balance | $ 772,927,000 | $ 0 | ||
[1] | Changes in fair value are recognized in Servicing and origination expense in the Unaudited Consolidated Statements of Operations. |
Mortgage Servicing - Schedule75
Mortgage Servicing - Schedule of Estimated Change in Fair Value of MSRs (Details) $ in Thousands | Sep. 30, 2015USD ($) |
Transfers and Servicing [Abstract] | |
Weighted average prepayment speeds, 10% | $ (68,927) |
Weighted average prepayment speeds, 20% | (145,410) |
Discount rate (Option-adjusted spread), 10% | (21,359) |
Discount rate (Option-adjusted spread), 20% | $ (39,902) |
Mortgage Servicing - Schedule76
Mortgage Servicing - Schedule of Composition of Servicing and Subservicing Portfolios by Type of Property Serviced (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | |
Schedule of Servicing and Subservicing Portfolio [Line Items] | ||||
Servicing | [1] | $ 238,108,447 | $ 361,288,281 | $ 360,919,248 |
Subservicing | 50,141,579 | 37,589,183 | 50,576,477 | |
Assets serviced | 288,250,026 | 398,877,464 | 411,495,725 | |
Residential [Member] | ||||
Schedule of Servicing and Subservicing Portfolio [Line Items] | ||||
Servicing | [1] | 238,108,447 | 361,288,281 | 360,919,248 |
Subservicing | 49,960,702 | 37,439,446 | 50,360,366 | |
Assets serviced | 288,069,149 | 398,727,727 | 411,279,614 | |
Commercial [Member] | ||||
Schedule of Servicing and Subservicing Portfolio [Line Items] | ||||
Servicing | [1] | 0 | 0 | 0 |
Subservicing | 180,877 | 149,737 | 216,111 | |
Assets serviced | $ 180,877 | $ 149,737 | $ 216,111 | |
[1] | Includes primary servicing UPB of $146.0 billion, $160.8 billion and $160.8 billion at September 30, 2015, December 31, 2014 and September 30, 2014, respectively, for which the Rights to MSRs have been sold to NRZ. |
Mortgage Servicing - Schedule77
Mortgage Servicing - Schedule of Composition of Servicing and Subservicing Portfolios by Type of Property Serviced (Footnote) (Details) - USD ($) $ in Billions | Sep. 30, 2015 | Dec. 31, 2014 | Sep. 30, 2014 |
NRZ [Member] | |||
Schedule of Servicing and Subservicing Portfolio [Line Items] | |||
Primary servicing UPB | $ 146 | $ 160.8 | $ 160.8 |
Mortgage Servicing - Narrative
Mortgage Servicing - Narrative (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | |
Servicing Asset at Amortized Cost [Line Items] | |||
Unpaid principal balance of small balance commercial loans serviced | $ 1,900 | $ 2,300 | $ 2,400 |
Float balances | 2,000 | $ 3,700 | |
NRZ [Member] | |||
Servicing Asset at Amortized Cost [Line Items] | |||
Reimbursements on account of loss of servicing revenues | $ 2.2 |
Mortgage Servicing - Schedule79
Mortgage Servicing - Schedule of Components of Servicing and Subservicing Fees (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Transfers and Servicing [Abstract] | ||||
Servicing | $ 274,089 | $ 331,794 | $ 879,098 | $ 1,039,033 |
Subservicing | 14,354 | 30,926 | 72,968 | 95,509 |
Servicing and Subservicing fees, total | 288,443 | 362,720 | 952,066 | 1,134,542 |
Home Affordable Modification Program (HAMP) fees | 32,318 | 37,644 | 108,698 | 111,000 |
Late charges | 19,162 | 27,634 | 63,557 | 97,002 |
Loan collection fees | 6,682 | 8,655 | 25,176 | 25,573 |
Custodial accounts (float earnings) | 836 | 1,831 | 4,633 | 5,235 |
Other | 12,576 | 27,480 | 49,411 | 74,744 |
Fees, total | $ 360,017 | $ 465,964 | $ 1,203,541 | $ 1,448,096 |
Receivables - Schedule of Recei
Receivables - Schedule of Receivables (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 | |
Receivables [Abstract] | |||
Government-insured loan claims | [1] | $ 67,690 | $ 52,955 |
Due from custodial accounts | 44,338 | 11,627 | |
Reimbursable expenses | 22,636 | 32,387 | |
Other servicing receivables | [2] | 159,753 | 29,516 |
Servicing receivable, total | 294,417 | 126,485 | |
Income taxes receivable | 63,572 | 68,322 | |
Due from related parties | [3] | 0 | 58,892 |
Other receivables | [4] | 30,369 | 43,690 |
Other receivables, gross | 388,358 | 297,389 | |
Allowance for losses | [1] | (26,786) | (26,793) |
Other receivables | $ 361,572 | $ 270,596 | |
[1] | At September 30, 2015 and December 31, 2014, the total allowance for losses includes $26.8 million and $26.8 million, respectively, related to receivables of our Servicing business. Allowance for losses related to defaulted FHA or VA insured loans repurchased from Ginnie Mae guaranteed securitizations (government-insured loan claims) at September 30, 2015 and December 31, 2014 were $13.2 million and $10.0 million, respectively. | ||
[2] | At September 30, 2015, other servicing receivables include $133.8 million related to sales of MSRs and advances. | ||
[3] | Entities that we reported as related parties at December 31, 2014 are no longer considered to be related parties, and amounts receivable from them are now reported within Other receivables. | ||
[4] | At December 31, 2014, other receivables include $28.8 million related to losses to be indemnified under the terms of the Homeward merger agreement. On March 19, 2015, we reached an agreement with the former owner of Homeward for the final settlement of all indemnification claims under the merger agreement and received $38.1 million in cash. |
Receivables - Schedule of Rec81
Receivables - Schedule of Receivables (Footnote) (Detail) - USD ($) $ in Millions | Mar. 19, 2015 | Sep. 30, 2015 | Dec. 31, 2014 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Servicing receivables, allowance for losses | [1] | $ (26.8) | $ (26.8) | |
Allowance for losses related to FHA or VA insured loans | 13.2 | 10 | ||
Receivables related to sales of MSRs and advances | $ 133.8 | |||
Other receivables, probable losses | $ 28.8 | |||
Homeward Acquisition [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Indemnification claims received in cash | $ 38.1 | |||
[1] | At September 30, 2015 and December 31, 2014, the total allowance for losses includes $26.8 million and $26.8 million, respectively, related to receivables of our Servicing business. Allowance for losses related to defaulted FHA or VA insured loans repurchased from Ginnie Mae guaranteed securitizations (government-insured loan claims) at September 30, 2015 and December 31, 2014 were $13.2 million and $10.0 million, respectively. |
Other Assets - Schedule of Othe
Other Assets - Schedule of Other Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 | |
Other Assets [Abstract] | |||
Contingent loan repurchase asset | [1] | $ 310,373 | $ 274,265 |
Debt service accounts | [2] | 123,023 | 91,974 |
Prepaid expenses | 57,572 | 17,957 | |
Prepaid lender fees and debt issuance costs, net | 51,937 | 31,337 | |
Real estate | 18,247 | 16,720 | |
Prepaid income taxes | 12,921 | 16,450 | |
Derivatives, at fair value | 10,010 | 6,065 | |
Mortgage backed securities, at fair value | 8,541 | 7,335 | |
Other | 16,655 | 28,708 | |
Other assets | $ 609,279 | $ 490,811 | |
[1] | In connection with the Ginnie Mae EBO Transactions, our agreements provide either that: (a) we have the right, but not the obligation, to repurchase previously transferred mortgage loans under certain conditions, including the mortgage loans becoming eligible for pooling under a program sponsored by Ginnie Mae, or (b) we have the obligation to repurchase previously transferred mortgage loans that have been subject to a successful trial modification before any permanent modification is made. Once these conditions are met, we have effectively regained control over the mortgage loan(s) and under GAAP, must re-recognize the loan on our consolidated balance sheet and establish a corresponding repurchase liability. With respect to those loans that we have the right, but not the obligation, to repurchase under the applicable agreement, this requirement applies regardless of whether we have any intention to repurchase the loan. We re-recognized mortgage loans in Other assets and the corresponding liability in Other liabilities. | ||
[2] | Under our advance funding financing 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. |
Other Assets - Schedule of Ot83
Other Assets - Schedule of Other Assets (Footnote) (Details) | 9 Months Ended |
Sep. 30, 2015 | |
Other Assets [Abstract] | |
Period required to remit collections on pledged advances | 2 days |
Borrowings - Schedule of Match
Borrowings - Schedule of Match Funded Liabilities (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2015 | Dec. 31, 2014 | ||
Debt Instrument [Line Items] | |||
Available borrowing capacity | $ 176,900 | ||
Match funded liabilities | $ 1,589,846 | $ 2,090,247 | |
Weighted average interest rate | 2.91% | 1.97% | |
Ocwen Freddie Servicer Advance Receivables Trust Series 2012-ADV1 [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1],[2] | $ 0 | |
Match funded liabilities | [2] | $ 0 | $ 373,080 |
Maturity date | [2],[3] | Jun. 30, 2017 | |
Amortization date | [2],[3] | Jun. 30, 2015 | |
Ocwen Servicer Advance Funding (SBC) Note [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1],[4] | $ 0 | |
Match funded liabilities | [4] | $ 0 | 494 |
Maturity date | [3],[4] | Dec. 31, 2015 | |
Amortization date | [3],[4] | Dec. 31, 2014 | |
Match Funded Liabilties [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | $ 442,654 | ||
Match funded liabilities | 1,589,846 | 2,090,247 | |
Total Ocwen Master Advance Receivables Trust (OMART) [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1] | 371,632 | |
Match funded liabilities | 1,278,368 | 1,657,659 | |
Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes, Series 2013-VF2,Class A [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1],[5] | 0 | |
Match funded liabilities | [5] | $ 0 | 519,634 |
Maturity date | [3],[5] | Oct. 31, 2045 | |
Amortization date | [3],[5] | Oct. 31, 2015 | |
Basis spread on variable rate | [5] | 1.91% | |
Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes, Series 2013-VF2,Class B [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1],[5] | $ 0 | |
Match funded liabilities | [5] | $ 0 | 32,919 |
Maturity date | [3],[5] | Oct. 31, 2045 | |
Amortization date | [3],[5] | Oct. 31, 2015 | |
Basis spread on variable rate | [5] | 3.43% | |
Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes - Series 2014-VF3, Class A [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1],[6] | $ 100,547 | |
Match funded liabilities | [6] | $ 263,244 | 552,553 |
Maturity date | [3],[6] | Sep. 30, 2046 | |
Amortization date | [3],[6] | Sep. 30, 2016 | |
Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes - Series 2014-VF3, Class B [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1],[6] | $ 4,604 | |
Match funded liabilities | [6] | $ 12,551 | 0 |
Maturity date | [3],[6] | Sep. 30, 2046 | |
Amortization date | [3],[6] | Sep. 30, 2016 | |
Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes - Series 2014-VF3, Class C [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1],[6] | $ 5,154 | |
Match funded liabilities | [6] | $ 13,825 | 0 |
Maturity date | [3],[6] | Sep. 30, 2046 | |
Amortization date | [3],[6] | Sep. 30, 2016 | |
Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes - Series 2014-VF3, Class D [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1],[6] | $ 13,572 | |
Match funded liabilities | [6] | $ 36,503 | 0 |
Maturity date | [3],[6] | Sep. 30, 2046 | |
Amortization date | [3],[6] | Sep. 30, 2016 | |
Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes - Series 2014-VF4, Class A [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1],[7] | $ 100,547 | |
Match funded liabilities | [7] | $ 263,244 | 552,553 |
Maturity date | [3],[7] | Sep. 30, 2046 | |
Amortization date | [3],[7] | Sep. 30, 2016 | |
Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes - Series 2014-VF4, Class B [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1],[7] | $ 4,604 | |
Match funded liabilities | [7] | $ 12,551 | 0 |
Maturity date | [3],[7] | Sep. 30, 2046 | |
Amortization date | [3],[7] | Sep. 30, 2016 | |
Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes - Series 2014-VF4, Class C [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1],[7] | $ 5,154 | |
Match funded liabilities | [7] | $ 13,825 | 0 |
Maturity date | [3],[7] | Sep. 30, 2046 | |
Amortization date | [3],[7] | Sep. 30, 2016 | |
Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes - Series 2014-VF4, Class D [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1],[7] | $ 13,572 | |
Match funded liabilities | [7] | $ 36,503 | 0 |
Maturity date | [3],[7] | Sep. 30, 2046 | |
Amortization date | [3],[7] | Sep. 30, 2016 | |
Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes - Series 2015-VF5, Class A [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1],[8] | $ 100,548 | |
Match funded liabilities | [8] | $ 263,243 | 0 |
Maturity date | [3],[8] | Sep. 30, 2046 | |
Amortization date | [3],[8] | Sep. 30, 2016 | |
Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes - Series 2015-VF5, Class B [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1],[8] | $ 4,604 | |
Match funded liabilities | [8] | $ 12,551 | 0 |
Maturity date | [3],[8] | Sep. 30, 2046 | |
Amortization date | [3],[8] | Sep. 30, 2016 | |
Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes - Series 2015-VF5, Class C [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1],[8] | $ 5,154 | |
Match funded liabilities | [8] | $ 13,825 | 0 |
Maturity date | [3],[8] | Sep. 30, 2046 | |
Amortization date | [3],[8] | Sep. 30, 2016 | |
Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes - Series 2015-VF5, Class D [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1],[8] | $ 13,572 | |
Match funded liabilities | [8] | $ 36,503 | 0 |
Maturity date | [3],[8] | Sep. 30, 2046 | |
Amortization date | [3],[8] | Sep. 30, 2016 | |
Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes, Series 2015-T1,Class A [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1],[8] | $ 0 | |
Match funded liabilities | [8] | $ 244,809 | 0 |
Maturity date | [3],[8] | Sep. 30, 2046 | |
Amortization date | [3],[8] | Sep. 30, 2016 | |
Basis spread on variable rate | [8] | 2.5365% | |
Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes, Series 2015-T1,Class B [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1],[8] | $ 0 | |
Match funded liabilities | [8] | $ 10,930 | 0 |
Maturity date | [3],[8] | Sep. 30, 2046 | |
Amortization date | [3],[8] | Sep. 30, 2016 | |
Basis spread on variable rate | [8] | 3.0307% | |
Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes, Series 2015-T1,Class C [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1],[8] | $ 0 | |
Match funded liabilities | [8] | $ 12,011 | 0 |
Maturity date | [3],[8] | Sep. 30, 2046 | |
Amortization date | [3],[8] | Sep. 30, 2016 | |
Basis spread on variable rate | [8] | 3.524% | |
Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes, Series 2015-T1,Class D [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1],[8] | $ 0 | |
Match funded liabilities | [8] | $ 32,250 | 0 |
Maturity date | [3],[8] | Sep. 30, 2046 | |
Amortization date | [3],[8] | Sep. 30, 2016 | |
Basis spread on variable rate | [8] | 4.10% | |
Total Ocwen Servicer Advance Receivables Trust III (OSARTIII) [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1],[9] | $ 40,530 | |
Match funded liabilities | [9] | 46,970 | 59,014 |
Total Ocwen Servicer Advance Receivables Trust III (OSARTIII) [Member] | Advance Receivables Backed Notes, Series 2014-VF1,Class A [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1],[9] | 6,762 | |
Match funded liabilities | [9] | $ 16,548 | 21,192 |
Maturity date | [3],[9] | Dec. 31, 2045 | |
Amortization date | [3],[9] | Dec. 31, 2015 | |
Basis spread on variable rate | [9] | 2.75% | |
Total Ocwen Servicer Advance Receivables Trust III (OSARTIII) [Member] | Advance Receivables Backed Notes, Series 2014-VF1,Class B [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1],[9] | $ 11,482 | |
Match funded liabilities | [9] | $ 10,918 | 13,598 |
Maturity date | [3],[9] | Dec. 31, 2045 | |
Amortization date | [3],[9] | Dec. 31, 2015 | |
Basis spread on variable rate | [9] | 3.25% | |
Total Ocwen Servicer Advance Receivables Trust III (OSARTIII) [Member] | Advance Receivables Backed Notes, Series 2014-VF1,Class C [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1],[9] | $ 8,920 | |
Match funded liabilities | [9] | $ 8,230 | 10,224 |
Maturity date | [3],[9] | Dec. 31, 2045 | |
Amortization date | [3],[9] | Dec. 31, 2015 | |
Basis spread on variable rate | [9] | 3.75% | |
Total Ocwen Servicer Advance Receivables Trust III (OSARTIII) [Member] | Advance Receivables Backed Notes, Series 2014-VF1,Class D [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1],[9] | $ 13,366 | |
Match funded liabilities | [9] | $ 11,274 | 14,000 |
Maturity date | [3],[9] | Dec. 31, 2045 | |
Amortization date | [3],[9] | Dec. 31, 2015 | |
Basis spread on variable rate | [9] | 4.70% | |
Total Ocwen Freddie Advance Funding Facility (OFAF) [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1],[10] | $ 30,492 | |
Match funded liabilities | [10] | 264,508 | 0 |
Total Ocwen Freddie Advance Funding Facility (OFAF) [Member] | Advance Receivables Backed Notes, Series 2015-T1,Class A [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1],[10] | 0 | |
Match funded liabilities | [10] | $ 57,100 | 0 |
Maturity date | [3],[10] | Nov. 30, 2045 | |
Amortization date | [3],[10] | Nov. 30, 2015 | |
Basis spread on variable rate | [10] | 2.062% | |
Total Ocwen Freddie Advance Funding Facility (OFAF) [Member] | Advance Receivables Backed Notes, Series 2015-T1,Class B [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1],[10] | $ 0 | |
Match funded liabilities | [10] | $ 5,400 | 0 |
Maturity date | [3],[10] | Nov. 30, 2045 | |
Amortization date | [3],[10] | Nov. 30, 2015 | |
Basis spread on variable rate | [10] | 2.557% | |
Total Ocwen Freddie Advance Funding Facility (OFAF) [Member] | Advance Receivables Backed Notes, Series 2015-T1,Class C [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1],[10] | $ 0 | |
Match funded liabilities | [10] | $ 1,900 | 0 |
Maturity date | [3],[10] | Nov. 30, 2045 | |
Amortization date | [3],[10] | Nov. 30, 2015 | |
Basis spread on variable rate | [10] | 3.051% | |
Total Ocwen Freddie Advance Funding Facility (OFAF) [Member] | Advance Receivables Backed Notes, Series 2015-T1,Class D [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1],[10] | $ 0 | |
Match funded liabilities | [10] | $ 5,600 | 0 |
Maturity date | [3],[10] | Nov. 30, 2045 | |
Amortization date | [3],[10] | Nov. 30, 2015 | |
Basis spread on variable rate | [10] | 3.79% | |
Total Ocwen Freddie Advance Funding Facility (OFAF) [Member] | Advance Receivables Backed Notes, Series 2015-VF1,Class A [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1],[10] | $ 22,661 | |
Match funded liabilities | [10] | $ 159,539 | 0 |
Maturity date | [3],[10] | Jun. 30, 2046 | |
Amortization date | [3],[10] | Jun. 30, 2016 | |
Total Ocwen Freddie Advance Funding Facility (OFAF) [Member] | Advance Receivables Backed Notes, Series 2015-VF1,Class B [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1],[10] | $ 3,354 | |
Match funded liabilities | [10] | $ 15,946 | 0 |
Maturity date | [3],[10] | Jun. 30, 2046 | |
Amortization date | [3],[10] | Jun. 30, 2016 | |
Total Ocwen Freddie Advance Funding Facility (OFAF) [Member] | Advance Receivables Backed Notes, Series 2015-VF1,Class C [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1],[10] | $ 2,026 | |
Match funded liabilities | [10] | $ 7,874 | 0 |
Maturity date | [3],[10] | Jun. 30, 2046 | |
Amortization date | [3],[10] | Jun. 30, 2016 | |
Total Ocwen Freddie Advance Funding Facility (OFAF) [Member] | Advance Receivables Backed Notes, Series 2015-VF1,Class D [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1],[10] | $ 2,451 | |
Match funded liabilities | [10] | $ 11,149 | $ 0 |
Maturity date | [3],[10] | Jun. 30, 2046 | |
Amortization date | [3],[10] | Jun. 30, 2016 | |
London Interbank Offered Rate (LIBOR) [Member] | Ocwen Freddie Servicer Advance Receivables Trust Series 2012-ADV1 [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | [2],[11] | 1.75% | |
London Interbank Offered Rate (LIBOR) [Member] | Ocwen Servicer Advance Funding (SBC) Note [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | [4] | 3.00% | |
London Interbank Offered Rate (LIBOR) [Member] | Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes - Series 2014-VF3, Class A [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | [6] | 2.35% | |
London Interbank Offered Rate (LIBOR) [Member] | Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes - Series 2014-VF3, Class B [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | [6] | 3.00% | |
London Interbank Offered Rate (LIBOR) [Member] | Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes - Series 2014-VF3, Class C [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | [6] | 4.25% | |
London Interbank Offered Rate (LIBOR) [Member] | Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes - Series 2014-VF3, Class D [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | [6] | 5.75% | |
London Interbank Offered Rate (LIBOR) [Member] | Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes - Series 2014-VF4, Class A [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | [7] | 2.35% | |
London Interbank Offered Rate (LIBOR) [Member] | Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes - Series 2014-VF4, Class B [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | [7] | 3.00% | |
London Interbank Offered Rate (LIBOR) [Member] | Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes - Series 2014-VF4, Class C [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | [7] | 4.25% | |
London Interbank Offered Rate (LIBOR) [Member] | Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes - Series 2014-VF4, Class D [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | [7] | 5.75% | |
London Interbank Offered Rate (LIBOR) [Member] | Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes - Series 2015-VF5, Class A [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | [8] | 2.35% | |
London Interbank Offered Rate (LIBOR) [Member] | Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes - Series 2015-VF5, Class B [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | [8] | 3.00% | |
London Interbank Offered Rate (LIBOR) [Member] | Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes - Series 2015-VF5, Class C [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | [8] | 4.25% | |
London Interbank Offered Rate (LIBOR) [Member] | Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes - Series 2015-VF5, Class D [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | [8] | 5.75% | |
London Interbank Offered Rate (LIBOR) [Member] | Total Ocwen Freddie Advance Funding Facility (OFAF) [Member] | Advance Receivables Backed Notes, Series 2015-VF1,Class A [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | [10] | 2.125% | |
London Interbank Offered Rate (LIBOR) [Member] | Total Ocwen Freddie Advance Funding Facility (OFAF) [Member] | Advance Receivables Backed Notes, Series 2015-VF1,Class B [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | [10] | 3.00% | |
London Interbank Offered Rate (LIBOR) [Member] | Total Ocwen Freddie Advance Funding Facility (OFAF) [Member] | Advance Receivables Backed Notes, Series 2015-VF1,Class C [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | [10] | 3.50% | |
London Interbank Offered Rate (LIBOR) [Member] | Total Ocwen Freddie Advance Funding Facility (OFAF) [Member] | Advance Receivables Backed Notes, Series 2015-VF1,Class D [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | [10] | 4.25% | |
[1] | Borrowing capacity is available to us only to the extent that we have pledged collateral available to borrow against. At September 30, 2015, $176.9 million of the total borrowing capacity was available to us based on the amount of eligible collateral that had been pledged. | ||
[2] | We repaid this facility in full in June 2015 from the proceeds of the OFAF facility. | ||
[3] | The amortization date of our advance financing facilities is the date on which the revolving period ends under each advance financing 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 each of our 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(s) outstanding, and any new advances are ineligible to be financed. | ||
[4] | We voluntarily terminated this facility on January 15, 2015 | ||
[5] | The Series 2013-VF2 Notes were repaid in full on September 18, 2015. | ||
[6] | On September 18, 2015, the combined maximum borrowing capacity of Series 2014-VF3 Notes, a series of variable funding notes under our Ocwen Master Advance Receivables Trust (OMART) facility, was reduced to $450.0 million, and the Class B, C and D Notes were issued. There is a floor of 75 bps for 1 ML in determining the interest rate for variable rate Notes. | ||
[7] | Effective July 1, 2015, the single outstanding Series 2014-VF4 Note under our OMART facility was replaced by four Notes - Class A, B, C and D. On September 18, 2015, the combined maximum borrowing capacity of the Series 2014-VF4 Notes was reduced to $450.0 million. There is a floor of 75 bps for 1 ML in determining the interest rate for variable rate Notes. | ||
[8] | The Series 2015-VF5 Notes and the Series 2015-T1 Notes under our OMART facility were issued on September 18, 2015. Under the terms of the agreement, we must continue to borrow the full amount of the Series 2015-T1 Notes until the amortization date. If there is insufficient collateral to support the level of borrowing, the excess cash proceeds are not distributed to Ocwen but are held by the trustee, and interest expense continues to be based on the full amount of the term notes. There is a floor of 75 bps for 1 ML in determining the interest for variable rate Notes. | ||
[9] | Effective April 23, 2015, the maximum borrowing under the Ocwen Servicer Advance Receivables Trust III (OSARTIII) facility decreases by $6.3 million per month until it is reduced to $75.0 million. | ||
[10] | We entered into Ocwen Freddie Advance Funding Facility (OFAF) facility on June 10, 2015. Under the terms of the agreement, we must continue to borrow the full amount of the Series 2015-T1 and Series 2015-T2 Notes until the amortization date. If there is insufficient collateral to support the level of borrowing, the excess cash proceeds are not distributed to Ocwen but are held by the trustee, and interest expense continues to be based on the full amount of the term notes. The Series 2015-T2 Notes with a combined borrowing capacity of $155.0 million expired and were fully repaid on September 15, 2015. | ||
[11] | 1-Month LIBOR (1ML) was 0.19% and 0.17% at September 30, 2015 and December 31, 2014, respectively. |
Borrowings - Schedule of Matc85
Borrowings - Schedule of Match Funded Liabilities (Footnote) (Details) - USD ($) | Sep. 18, 2015 | Sep. 15, 2015 | Apr. 23, 2015 | Jan. 15, 2015 | Sep. 30, 2015 | Jun. 10, 2015 | Dec. 31, 2014 | |
Debt Instrument [Line Items] | ||||||||
Available borrowing capacity that could be used based on amount of eligible collateral pledged | $ 176,900,000 | |||||||
Match Funded Liabilties [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Available borrowing capacity that could be used based on amount of eligible collateral pledged | 442,654,000 | |||||||
Ocwen Freddie Servicer Advance Receivables Trust Series 2012-ADV1 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Available borrowing capacity that could be used based on amount of eligible collateral pledged | [1],[2] | 0 | ||||||
Ocwen Servicer Advance Funding (SBC) Note [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Available borrowing capacity that could be used based on amount of eligible collateral pledged | [1],[3] | 0 | ||||||
Debt facility termination date | Jan. 15, 2015 | |||||||
Series 2014-VF2 Notes [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt facility termination date | Sep. 18, 2015 | |||||||
Series 2014-VF3 Notes [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | $ 450,000,000 | |||||||
Series 2014-VF4 Notes [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | $ 450,000,000 | |||||||
Series 2015-T2 Notes [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt facility termination date | Sep. 15, 2015 | |||||||
Maximum borrowing capacity | $ 155,000,000 | |||||||
Total Ocwen Servicer Advance Receivables Trust III (OSARTIII) [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Available borrowing capacity that could be used based on amount of eligible collateral pledged | [1],[4] | $ 40,530,000 | ||||||
Increase (decrease) to borrowing capacity | $ 6,300,000 | |||||||
Maximum borrowing capacity | $ 75,000,000 | |||||||
London Interbank Offered Rate (LIBOR) [Member] | Ocwen Freddie Servicer Advance Receivables Trust Series 2012-ADV1 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, interest rate, basis for effective rate at period end | 0.19% | 0.17% | ||||||
Basis spread on variable rate | [2],[5] | 1.75% | ||||||
London Interbank Offered Rate (LIBOR) [Member] | Ocwen Servicer Advance Funding (SBC) Note [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | [3] | 3.00% | ||||||
London Interbank Offered Rate (LIBOR) [Member] | Series 2014-VF3 Notes [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 0.75% | |||||||
London Interbank Offered Rate (LIBOR) [Member] | Series 2014-VF4 Notes [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 0.75% | |||||||
London Interbank Offered Rate (LIBOR) [Member] | Series 2015-T1 Notes [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 0.75% | |||||||
[1] | Borrowing capacity is available to us only to the extent that we have pledged collateral available to borrow against. At September 30, 2015, $176.9 million of the total borrowing capacity was available to us based on the amount of eligible collateral that had been pledged. | |||||||
[2] | We repaid this facility in full in June 2015 from the proceeds of the OFAF facility. | |||||||
[3] | We voluntarily terminated this facility on January 15, 2015 | |||||||
[4] | Effective April 23, 2015, the maximum borrowing under the Ocwen Servicer Advance Receivables Trust III (OSARTIII) facility decreases by $6.3 million per month until it is reduced to $75.0 million. | |||||||
[5] | 1-Month LIBOR (1ML) was 0.19% and 0.17% at September 30, 2015 and December 31, 2014, respectively. |
Borrowings - Narrative (Details
Borrowings - Narrative (Details) - USD ($) | Nov. 03, 2015 | Sep. 30, 2015 | Sep. 30, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | May. 12, 2014 |
Debt Instrument [Line Items] | ||||||
Covenant compliance, consolidated tangible net worth at period end | $ 1,100,000,000 | $ 1,100,000,000 | ||||
NRZ [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Primary servicing UPB | 146,000,000,000 | 146,000,000,000 | $ 160,800,000,000 | $ 160,800,000,000 | ||
Outstanding servicing advances | $ 5,100,000,000 | $ 5,100,000,000 | ||||
Unsecured Debt [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Maturity date | May 15, 2019 | |||||
Unsecured Debt [Member] | 6.625% Senior Notes due 2019 | ||||||
Debt Instrument [Line Items] | ||||||
Face amount | $ 350,000,000 | |||||
Interest rate, stated percentage | 6.625% | |||||
Days after the closing of the offering for the registration statement to become effective (on or prior to 270 days) | 270 days | |||||
Additional interest | 0.75% | |||||
Unamortized debt issuance expense | $ 4,800,000 | $ 4,800,000 | ||||
Subsequent Event [Member] | Maximum [Member] | Unsecured Debt [Member] | 6.625% Senior Notes due 2019 | ||||||
Debt Instrument [Line Items] | ||||||
Additional interest | 1.00% |
Borrowings - Schedule of Financ
Borrowings - Schedule of Financing Liabilities (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2015 | Dec. 31, 2014 | ||
Debt Instrument [Line Items] | |||
Total Financing liabilities | $ 2,953,518 | $ 2,258,641 | |
Financing Liabilities [Member] | |||
Debt Instrument [Line Items] | |||
Total Financing liabilities | 2,953,518 | 2,258,641 | |
HMBS - Related Borrowings [Member] | |||
Debt Instrument [Line Items] | |||
Total Financing liabilities | 2,200,000 | 1,400,000 | |
Servicing [Member] | Financing Liabilities [Member] | |||
Debt Instrument [Line Items] | |||
Total Financing liabilities | 723,914 | 814,389 | |
Servicing [Member] | Financing liability – MSRs pledged [Member] | Financing Liabilities [Member] | |||
Debt Instrument [Line Items] | |||
Total Financing liabilities | [1] | $ 560,059 | 614,441 |
Servicing [Member] | Secured Notes, Ocwen Asset Servicing Income Series, Series 2014-1 [Member] | Financing Liabilities [Member] | |||
Debt Instrument [Line Items] | |||
Maturity date | [2] | Feb. 28, 2028 | |
Total Financing liabilities | [2] | $ 100,000 | 111,459 |
Servicing [Member] | Financing Liability – Advances Pledged [Member] | Financing Liabilities [Member] | |||
Debt Instrument [Line Items] | |||
Total Financing liabilities | [3] | $ 63,855 | 88,489 |
Lending [Member] | HMBS - Related Borrowings [Member] | Financing Liabilities [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | [4] | 2.48% | |
Total Financing liabilities | [4] | $ 2,229,604 | $ 1,444,252 |
[1] | This financing liability arose in connection with the NRZ/HLSS Transactions and has no contractual maturity. The balance of the liability is adjusted each reporting period to its fair value based on the present value of the estimated future cash flows underlying the related MSRs. | ||
[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 sales of advances in 2014 did not qualify for sales accounting treatment and were accounted for as a financing. | ||
[4] | 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. |
Borrowings - Schedule of Fina88
Borrowings - Schedule of Financing Liabilities (Footnote) (Details) | 9 Months Ended |
Sep. 30, 2015 | |
OASIS Series 2014-1 [Member] | |
Debt Instrument [Line Items] | |
Basis spread on UPB | 0.21% |
Borrowings - Schedule of Other
Borrowings - Schedule of Other Secured Borrowings (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2015 | Dec. 31, 2014 | ||
Line of Credit Facility [Line Items] | |||
Available borrowing capacity | $ 176,900 | ||
Other secured borrowings | 2,953,518 | $ 2,258,641 | |
Other Secured Borrowings [Member] | |||
Line of Credit Facility [Line Items] | |||
Available borrowing capacity | 92,489 | ||
Discount - SSTL | (3,009) | (4,031) | |
Long-term Debt | $ 1,001,070 | $ 1,733,691 | |
Weighted average interest rate | 4.42% | 4.33% | |
Servicing [Member] | Other Secured Borrowings [Member] | |||
Line of Credit Facility [Line Items] | |||
Available borrowing capacity | $ 23,871 | ||
Other secured borrowings | 732,056 | $ 1,309,268 | |
Lending [Member] | Other Secured Borrowings [Member] | |||
Line of Credit Facility [Line Items] | |||
Available borrowing capacity | 68,618 | ||
Other secured borrowings | 272,023 | 428,454 | |
Senior Secured Term Loan [Member] | Servicing [Member] | Other Secured Borrowings [Member] | |||
Line of Credit Facility [Line Items] | |||
Available borrowing capacity | 0 | ||
Other secured borrowings | $ 705,927 | 1,277,250 | |
Maturity date | [1] | Feb. 28, 2018 | |
Master Repurchase Agreement [Member] | Servicing [Member] | Other Secured Borrowings [Member] | |||
Line of Credit Facility [Line Items] | |||
Available borrowing capacity | [2] | $ 23,871 | |
Other secured borrowings | [2] | $ 26,129 | 32,018 |
Maturity date | [2] | Jul. 31, 2016 | |
Participation Agreement [Member] | Lending [Member] | Other Secured Borrowings [Member] | |||
Line of Credit Facility [Line Items] | |||
Available borrowing capacity | [3] | $ 0 | |
Other secured borrowings | [3] | $ 46,597 | 41,646 |
Maturity date | [3] | Apr. 30, 2016 | |
Participation Agreement [Member] | Lending [Member] | Other Secured Borrowings [Member] | |||
Line of Credit Facility [Line Items] | |||
Available borrowing capacity | [4] | $ 0 | |
Other secured borrowings | [4] | $ 33,864 | 196 |
Maturity date | [4] | Apr. 30, 2016 | |
Master Repurchase Agreement [Member] | Lending [Member] | Other Secured Borrowings [Member] | |||
Line of Credit Facility [Line Items] | |||
Available borrowing capacity | [5] | $ 68,618 | |
Other secured borrowings | [5] | $ 131,382 | 208,010 |
Maturity date | [5] | Aug. 31, 2016 | |
Master Repurchase Agreement [Member] | Lending [Member] | Other Secured Borrowings [Member] | |||
Line of Credit Facility [Line Items] | |||
Available borrowing capacity | [6] | $ 0 | |
Other secured borrowings | [6] | $ 0 | 102,073 |
Maturity date | [6] | Jul. 31, 2015 | |
Master Repurchase Agreement [Member] | Lending [Member] | Other Secured Borrowings [Member] | |||
Line of Credit Facility [Line Items] | |||
Available borrowing capacity | [7] | $ 0 | |
Other secured borrowings | [7] | $ 0 | 52,678 |
Maturity date | [7] | Jul. 31, 2015 | |
Mortgage Warehouse Agreement [Member] | Lending [Member] | Other Secured Borrowings [Member] | |||
Line of Credit Facility [Line Items] | |||
Available borrowing capacity | [8] | $ 0 | |
Other secured borrowings | [8] | $ 60,180 | 23,851 |
Maturity date | [8] | May 31, 2016 | |
Interest rate at index floor rate | [8] | 3.50% | |
Total Servicing Lines Of Credit [Member] | Other Secured Borrowings [Member] | |||
Line of Credit Facility [Line Items] | |||
Available borrowing capacity | $ 92,489 | ||
Other secured borrowings | $ 1,004,079 | $ 1,737,722 | |
London Interbank Offered Rate (LIBOR) [Member] | Master Repurchase Agreement [Member] | Lending [Member] | Other Secured Borrowings [Member] | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | [5] | 2.00% | |
London Interbank Offered Rate (LIBOR) [Member] | Master Repurchase Agreement [Member] | Lending [Member] | Other Secured Borrowings [Member] | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | [7] | 2.75% | |
London Interbank Offered Rate (LIBOR) [Member] | Mortgage Warehouse Agreement [Member] | Lending [Member] | Other Secured Borrowings [Member] | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | [8] | 2.75% | |
Eurodollar [Member] | Senior Secured Term Loan [Member] | Servicing [Member] | Other Secured Borrowings [Member] | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | [1] | 3.75% | |
Interest rate at index floor rate | [1] | 1.25% | |
Minimum [Member] | London Interbank Offered Rate (LIBOR) [Member] | Master Repurchase Agreement [Member] | Servicing [Member] | Other Secured Borrowings [Member] | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | [2] | 2.00% | |
Minimum [Member] | London Interbank Offered Rate (LIBOR) [Member] | Master Repurchase Agreement [Member] | Lending [Member] | Other Secured Borrowings [Member] | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | [6] | 1.75% | |
Maximum [Member] | London Interbank Offered Rate (LIBOR) [Member] | Master Repurchase Agreement [Member] | Servicing [Member] | Other Secured Borrowings [Member] | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | [2] | 3.45% | |
Maximum [Member] | London Interbank Offered Rate (LIBOR) [Member] | Master Repurchase Agreement [Member] | Lending [Member] | Other Secured Borrowings [Member] | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | [6] | 2.75% | |
[1] | 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 subject to a base rate floor of 2.25% or (b) the one month Eurodollar rate, plus a margin of 3.75% and subject to a one month Eurodollar floor of 1.25%. To date we have elected option (b) to determine the interest rate.On October 16, 2015, we entered into an amendment to the SSTL facility agreement pursuant to which, among other things, the Eurodollar margin was increased from 3.75% to 4.25%, effective October 20, 2015. See Note 21 – Subsequent Events for additional information. | ||
[2] | On September 30, 2015, this repurchase agreement was renewed through September 29, 2016. Under this repurchase agreement, the lender provides financing on a committed basis for $50.0 million and, at the discretion of the lender, on an uncommitted basis for an additional $50.0 million. | ||
[3] | Under this participation agreement, the lender provides financing for $100.0 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. | ||
[4] | Under this participation agreement, the lender provides financing for $150.0 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] | On August 25, 2015, this repurchase agreement was renewed through August 23, 2016. Borrowing capacity was reduced from $300.0 million, of which $150.0 million was provided on an uncommitted basis, to $200.0 million all of which is provided on a committed basis. | ||
[6] | On April 16, 2015, this facility was voluntarily terminated. | ||
[7] | This facility was allowed to expire. | ||
[8] | Borrowing capacity of $100.0 million under this facility is available at the discretion of the lender. This facility was renewed on August 24, 2015, and the borrowing capacity was increased from $60.0 million to $100.0 million. |
Borrowings - Schedule of Othe90
Borrowings - Schedule of Other Secured Borrowings (Footnote) (Details) - Other Secured Borrowings [Member] - USD ($) | Oct. 20, 2015 | Apr. 16, 2015 | Sep. 30, 2015 | Aug. 25, 2015 | Aug. 24, 2015 | |
Master Repurchase Agreement [Member] | Servicing [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 50,000,000 | |||||
Additional borrowing capacity | 50,000,000 | |||||
Participation Agreement [Member] | Lending [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 100,000,000 | |||||
Beneficial interest | 100.00% | |||||
Participation Agreement [Member] | Lending [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 150,000,000 | |||||
Beneficial interest | 100.00% | |||||
Master Repurchase Agreement [Member] | Lending [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 200,000,000 | $ 300,000,000 | ||||
Additional borrowing capacity | 150,000,000 | |||||
Master Repurchase Agreement [Member] | Lending [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt facility termination date | Apr. 16, 2015 | |||||
Mortgage Warehouse Agreement [Member] | Lending [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | [1] | $ 100,000,000 | $ 100,000,000 | $ 60,000,000 | ||
Federal Funds Rate [Member] | Senior Secured Term Loan Option One [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 0.50% | |||||
London Interbank Offered Rate (LIBOR) [Member] | Master Repurchase Agreement [Member] | Lending [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | [2] | 2.00% | ||||
London Interbank Offered Rate (LIBOR) [Member] | Mortgage Warehouse Agreement [Member] | Lending [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | [3] | 2.75% | ||||
London Interbank Offered Rate (LIBOR) [Member] | Senior Secured Term Loan Option One [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 2.75% | |||||
Base Rate [Member] | Senior Secured Term Loan Option One [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 2.25% | |||||
Eurodollar [Member] | Senior Secured Term Loan [Member] | Servicing [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | [4] | 3.75% | ||||
Eurodollar [Member] | Senior Secured Term Loan Option Two [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 3.75% | |||||
Eurodollar [Member] | Senior Secured Term Loan Option Two [Member] | Subsequent Event [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 4.25% | |||||
Eurodollar Floor [Member] | Senior Secured Term Loan Option Two [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 1.25% | |||||
[1] | This facility was allowed to expire. | |||||
[2] | On August 25, 2015, this repurchase agreement was renewed through August 23, 2016. Borrowing capacity was reduced from $300.0 million, of which $150.0 million was provided on an uncommitted basis, to $200.0 million all of which is provided on a committed basis. | |||||
[3] | Borrowing capacity of $100.0 million under this facility is available at the discretion of the lender. This facility was renewed on August 24, 2015, and the borrowing capacity was increased from $60.0 million to $100.0 million. | |||||
[4] | The borrowings are secured by a first priority security interest in substantially all of the assets of Ocwen. Borrowings bear interest, at the election of Ocwen, at a rate per annum equal to either (a) the base rate (the greatest of (i) the prime rate in effect on such day, (ii) the federal funds rate in effect on such day plus 0.50% and (iii) the one-month Eurodollar rate (1-Month LIBOR)), plus a margin of 2.75% and subject to a base rate floor of 2.25% or (b) the one month Eurodollar rate, plus a margin of 3.75% and subject to a one month Eurodollar floor of 1.25%. To date we have elected option (b) to determine the interest rate.On October 16, 2015, we entered into an amendment to the SSTL facility agreement pursuant to which, among other things, the Eurodollar margin was increased from 3.75% to 4.25%, effective October 20, 2015. See Note 21 – Subsequent Events for additional information. |
Other Liabilities - Schedule of
Other Liabilities - Schedule of Other Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | |
Other Liabilities Disclosure [Abstract] | |||||
Contingent loan repurchase liability | [1] | $ 310,373 | $ 274,265 | ||
Accrued expenses | 167,412 | 142,592 | |||
Liability for indemnification obligations | 86,873 | 132,918 | $ 143,836 | $ 192,716 | |
Liability for uncertain tax positions (2) | 48,700 | 28,436 | |||
Checks held for escheat | 16,131 | 18,513 | |||
Payable to loan servicing and subservicing investors | 13,856 | 67,722 | |||
Due to related parties | [2] | 0 | 55,585 | ||
Other | [3],[4] | 392,820 | 73,503 | ||
Total other liabilities | $ 1,036,165 | $ 793,534 | |||
[1] | In connection with the Ginnie Mae EBO Transactions, we have re-recognized certain loans on our consolidated balance sheets and establish a corresponding repurchase liability regardless of our intention to repurchase the loan. | ||||
[2] | Entities that we reported as related parties at December 31, 2014 are no longer considered to be related parties, and amounts payable to them are now reported within Other. | ||||
[3] | The balance at September 30, 2015 includes $180.4 million due in connection with the repurchase of loans from Ginnie Mae securitizations. The repurchased loans are classified as held for sale and carried at the lower of cost or fair value at September 30, 2015. On October 1, 2015, we settled this liability and sold these loans. | ||||
[4] | The balance at September 30, 2015 includes $80.0 million received prior to the closing of the related sale of MSRs and advances which is expected to occur by early November 2015. |
Other Liabilities - Schedule 92
Other Liabilities - Schedule of Other Liabilities (Footnote) (Details) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2015USD ($) | Sep. 30, 2015USD ($) | |
Other Liabilities [Line Items] | ||
Increase in uncertain tax liability | $ 19.2 | $ 20.2 |
Loan repurchase liability | 180.4 | 180.4 |
Deferred credits prior to closing of related sale of MSRs and advances | $ 80 | $ 80 |
Internal Revenue Service (IRS) [Member] | ||
Other Liabilities [Line Items] | ||
Time period in which change of uncertain tax positions are reasonably possible | 12 months |
Derivative Financial Instrume93
Derivative Financial Instruments and Hedging Activities - Schedule of Changes in Notional Balance of Holdings of Derivatives (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2015 | Dec. 31, 2014 | ||
Fair value of derivative assets (liabilities) at: | |||
Derivatives, at fair value | $ 10,010 | $ 6,065 | |
Interest Rate Lock Commitments [Member] | |||
Derivative Notional Balance [Roll Forward] | |||
Beginning notional balance | 239,406 | ||
Additions | 4,210,647 | ||
Amortization | 0 | ||
Maturities | (3,727,042) | ||
Terminations | (337,938) | ||
Ending notional balance | 385,073 | ||
Fair value of derivative assets (liabilities) at: | |||
Derivatives, at fair value | $ 10,010 | 6,065 | |
Maturity | Oct. 2015 - Dec. 2015 | ||
Forward MBS Trades [Member] | |||
Derivative Notional Balance [Roll Forward] | |||
Beginning notional balance | [1] | $ 703,725 | |
Additions | [1] | 6,248,108 | |
Amortization | [1] | 0 | |
Maturities | [1] | (3,414,877) | |
Terminations | [1] | (2,864,057) | |
Ending notional balance | [1] | 672,899 | |
Fair value of derivative assets (liabilities) at: | |||
Derivatives, at fair value | [1] | $ (3,438) | (2,854) |
Maturity | [1] | Nov. 2015 - Dec. 2015 | |
Interest Rate Caps [Member] | |||
Derivative Notional Balance [Roll Forward] | |||
Beginning notional balance | $ 1,729,000 | ||
Additions | 2,179,333 | ||
Amortization | (439,333) | ||
Maturities | 0 | ||
Terminations | 0 | ||
Ending notional balance | 3,469,000 | ||
Fair value of derivative assets (liabilities) at: | |||
Derivatives, at fair value | $ 1,501 | 567 | |
Maturity | Nov. 2016 - Oct. 2017 | ||
Interest Rate Swaps [Member] | |||
Derivative Notional Balance [Roll Forward] | |||
Beginning notional balance | $ 0 | ||
Additions | 450,000 | ||
Amortization | 0 | ||
Maturities | 0 | ||
Terminations | (450,000) | ||
Ending notional balance | 0 | ||
Fair value of derivative assets (liabilities) at: | |||
Derivatives, at fair value | $ 0 | $ 0 | |
[1] | As loans are originated and sold or as loan commitments expire, our forward MBS trade positions mature and are replaced by new positions based upon new loan commitments and originations and expected time to sell. |
Derivative Financial Instrume94
Derivative Financial Instruments and Hedging Activities - Schedule of Gains (Losses) on Derivatives (Details) - Not Designated as Hedging Instrument [Member] $ in Thousands | 9 Months Ended | |
Sep. 30, 2015USD ($) | ||
Hedge the effect of changes in interest rates on interest expense on borrowings | ||
Fair Value | $ 8,073 | [1] |
Gains / (Losses) | $ (8,547) | |
Other Net [Member] | Interest Rate Caps [Member] | ||
Hedge the effect of changes in interest rates on interest expense on borrowings | ||
Expiration Date | Nov. 2016 - Oct. 2017 | [2] |
Notional Amount | $ 3,469,000 | [2] |
Fair Value | 1,501 | [1],[2] |
Gains / (Losses) | $ (1,613) | [2] |
Consolidated Statements of Operations Caption | Other, net | [2] |
Gain On Loans Held For Sale Net [Member] | Forward MBS Trades [Member] | ||
Hedge the effect of changes in interest rates on interest expense on borrowings | ||
Expiration Date | Nov. 2015 - Dec 2015 | |
Notional Amount | $ 672,899 | |
Fair Value | (3,438) | [1] |
Gains / (Losses) | $ (10,878) | |
Consolidated Statements of Operations Caption | Gain on loans held for sale, net | |
Gain On Loans Held For Sale Net [Member] | IRLCs [Member] | ||
Hedge the effect of changes in interest rates on interest expense on borrowings | ||
Expiration Date | Oct. 2015 - Nov. 2015 | |
Notional Amount | $ 385,073 | |
Fair Value | 10,010 | [1] |
Gains / (Losses) | $ 3,944 | |
Consolidated Statements of Operations Caption | Gain on loans held for sale, net | |
[1] | Derivatives are reported at fair value in Receivables, Other assets or in Other liabilities on our Unaudited Consolidated Balance Sheets. | |
[2] | To hedge the effect of changes in 1ML on advance funding facilities. |
Derivative Financial Instrume95
Derivative Financial Instruments and Hedging Activities - Narrative (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Unrealized gain (loss) on derivatives arising during period, before tax | $ 1.9 | $ 9.2 |
Other comprehensive income (loss), tax | 0.1 | $ 0.5 |
Projected amortization of unrealized losses from AOCL to earnings, coming twelve months | $ 0.3 |
Derivative Financial Instrume96
Derivative Financial Instruments and Hedging Activities - Schedule of Changes in AOCL (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Beginning balance | $ 8,413 | |||
Other, net of taxes | $ 0 | $ 2 | 0 | $ 5 |
Ending balance | 1,886 | 1,886 | ||
Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member] | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Beginning balance | 8,413 | 10,151 | ||
Losses on terminated hedging relationships amortized to earnings | (6,916) | (1,579) | ||
Decrease in deferred taxes on accumulated losses on cash flow hedges | 389 | 217 | ||
Decrease in accumulated losses on cash flow hedges, net of taxes | (6,527) | (1,362) | ||
Other, net of taxes | 0 | (5) | ||
Ending balance | $ 1,886 | $ 8,784 | $ 1,886 | $ 8,784 |
Derivative Financial Instrume97
Derivative Financial Instruments and Hedging Activities - Schedule of Other Income (Expense), Net Related to Derivative Financial Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||
Losses on economic hedges | $ (738) | $ (6) | $ (1,613) | $ (374) |
Write-off of losses in AOCL for a discontinued hedge relationship | (523) | (408) | (6,916) | (1,580) |
Loss on derivatives | $ (1,261) | $ (414) | $ (8,529) | $ (1,954) |
Interest Expense - Schedule of
Interest Expense - Schedule of Components of Interest Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | ||
Debt securities: | |||||
Interest expense | $ 118,313 | $ 133,049 | $ 362,606 | $ 409,129 | |
Financing Liabilities [Member] | |||||
Debt securities: | |||||
Interest expense | [1],[2],[3] | 73,866 | 88,246 | 222,067 | 281,930 |
Other Secured Borrowings [Member] | |||||
Debt securities: | |||||
Interest expense | 19,822 | 20,790 | 68,447 | 62,359 | |
Match Funded Liabilties [Member] | |||||
Debt securities: | |||||
Interest expense | 15,425 | 15,097 | 45,379 | 46,762 | |
6.625% Senior Unsecured Notes [Member] | |||||
Debt securities: | |||||
Interest expense | 6,741 | 6,141 | 19,521 | 9,466 | |
Other [Member] | |||||
Debt securities: | |||||
Interest expense | $ 2,459 | $ 2,775 | $ 7,192 | $ 8,612 | |
[1] | Includes $8.2 million and $8.5 million for the three and nine months ended September 30, 2015, respectively, of fees incurred in connection with our agreement to compensate NRZ for certain increased costs associated with its servicing advance financing facilities that are the direct result of a downgrade of our S&P servicer rating. | ||||
[2] | Includes interest expense related to financing liabilities recorded in connection with the NRZ/HLSS Transactions as indicated in the table below. Three months Nine Months2015 2014 2015 2014Servicing fees collected on behalf of NRZ$175,994 $177,113 $531,399 $553,423Less: Subservicing fee retained by Ocwen91,597 83,550 272,802 266,514Net servicing fees remitted to NRZ84,397 93,563 258,597 286,909Less: Reduction in financing liability21,160 8,736 52,159 12,960Interest expense on NRZ financing liability$63,237$84,827 $206,438 $273,949 | ||||
[3] | Interest expense that we expect to be paid on the HMBS-related borrowings is included with net fair value gains in Other revenues. |
Interest Expense - Schedule o99
Interest Expense - Schedule of Components of Interest Expense (Footnote) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2015 | Sep. 30, 2015 | |
NRZ [Member] | ||
Schedule of Interest Expense [Line Items] | ||
Financing costs associated with downgrade of servicer rating | $ 8.2 | $ 8.5 |
Interest Expense - Schedule 100
Interest Expense - Schedule of Related Party Interest Expense (Details) - NRZ [Member] - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Schedule of Interest Expense [Line Items] | ||||
Servicing fees collected on behalf of NRZ | $ 175,994 | $ 177,113 | $ 531,399 | $ 553,423 |
Less: Subservicing fee retained by Ocwen | 91,597 | 83,550 | 272,802 | 266,514 |
Net servicing fees remitted to NRZ | 84,397 | 93,563 | 258,597 | 286,909 |
Less: Reduction in financing liability | 21,160 | 8,736 | 52,159 | 12,960 |
Interest expense on NRZ financing liability | $ 63,237 | $ 84,827 | $ 206,438 | $ 273,949 |
Basic and Diluted Earnings p101
Basic and Diluted Earnings per Share - Schedule of Reconciliation of Calculation of Basic Earnings per Share to Diluted Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | ||
Basic earnings per share: | |||||
Net income (loss) attributable to Ocwen common stockholders | [1] | $ (66,869) | $ (76,189) | $ (22,776) | $ 49,273 |
Weighted average shares of common stock (in shares) | 125,383,639 | 130,551,197 | 125,322,742 | 133,318,381 | |
Basic earnings (loss) per share (in USD per share) | $ (0.53) | $ (0.58) | $ (0.18) | $ 0.37 | |
Diluted earnings per share: | |||||
Net income (loss) attributable to Ocwen common stockholders | [1] | $ (66,869) | $ (76,189) | $ (22,776) | $ 49,273 |
Preferred stock dividends | [1],[2] | 0 | 0 | 0 | 0 |
Adjusted net income (loss) attributable to Ocwen | [1] | $ (66,869) | $ (76,189) | $ (22,776) | $ 49,273 |
Weighted average shares of common stock (in shares) | 125,383,639 | 130,551,197 | 125,322,742 | 133,318,381 | |
Effect of dilutive elements: | |||||
Preferred stock (in shares) | [1],[2] | 0 | 0 | 0 | 0 |
Stock options (in shares) | [1] | 0 | 0 | 0 | 3,558,689 |
Common stock awards (in shares) | [1] | 0 | 0 | 0 | 4,256 |
Dilutive weighted average shares of common stock (in shares) | 125,383,639 | 130,551,197 | 125,322,742 | 136,881,326 | |
Diluted earnings (loss) per share (in USD per share) | $ (0.53) | $ (0.58) | $ (0.18) | $ 0.36 | |
Stock options and common stock awards excluded from the computation of diluted earnings per share: | |||||
Anti-dilutive Securities (in shares) | [3] | 2,037,872 | 91,250 | 1,965,049 | 47,083 |
Market Based [Member] | |||||
Stock options and common stock awards excluded from the computation of diluted earnings per share: | |||||
Anti-dilutive Securities (in shares) | [4] | 924,438 | 295,000 | 924,438 | 295,000 |
[1] | For the three and nine months ended September 30, 2015 and for three months ended September 30, 2014, we have excluded the effect of preferred stock, stock options and common stock awards from the computation of diluted earnings per share because of the anti-dilutive effect of our reported net loss. | ||||
[2] | Prior to the conversion of our remaining preferred stock into common stock in July 2014, we computed the effect on diluted earnings per share using the if-converted method. For purposes of computing diluted earnings per share, we assume the conversion of the preferred stock into shares of common stock unless the effect is anti-dilutive. Conversion of the preferred stock was not assumed for the nine months ended September 30, 2014 because the effect would have been antidilutive. | ||||
[3] | These options were anti-dilutive because their exercise price was greater than the average market price of our stock. | ||||
[4] | 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 - Sc
Business Segment Reporting - Schedule of Segment Reporting Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | ||
Results of Operations | ||||||
Revenue | [1] | $ 404,946 | $ 513,698 | $ 1,378,641 | $ 1,618,033 | |
Expenses | [1],[2] | 387,726 | 455,039 | 1,118,336 | 1,149,696 | |
Other income (expense): | ||||||
Interest income | 5,693 | 6,593 | 16,306 | 17,472 | ||
Interest expense | (118,313) | (133,049) | (362,606) | (409,129) | ||
Other | [1] | 39,482 | (4,469) | 85,406 | (66) | |
Other income (expense), net | (73,138) | (130,925) | (260,894) | (391,723) | ||
Income (loss) before income taxes | (55,918) | (72,266) | (589) | 76,614 | ||
Total Assets | ||||||
Balance | 8,011,054 | 8,355,640 | 8,011,054 | 8,355,640 | $ 8,267,278 | |
Servicing [Member] | ||||||
Results of Operations | ||||||
Revenue | [1] | 374,936 | 485,303 | 1,269,269 | 1,526,606 | |
Expenses | [1],[2] | 318,439 | 313,964 | 940,764 | 919,998 | |
Other income (expense): | ||||||
Interest income | 1,175 | 903 | 3,232 | 1,805 | ||
Interest expense | (109,357) | (124,106) | (336,088) | (391,122) | ||
Other | [1] | 38,943 | (3,618) | 82,909 | (4,622) | |
Other income (expense), net | (69,239) | (126,821) | (249,947) | (393,939) | ||
Income (loss) before income taxes | (12,742) | 44,518 | 78,558 | 212,669 | ||
Total Assets | ||||||
Balance | 4,681,176 | 6,059,359 | 4,681,176 | 6,059,359 | 5,881,862 | |
Lending [Member] | ||||||
Results of Operations | ||||||
Revenue | [1] | 29,662 | 26,877 | 106,721 | 86,811 | |
Expenses | [1],[2] | 23,126 | 22,632 | 73,497 | 81,261 | |
Other income (expense): | ||||||
Interest income | 3,883 | 4,825 | 11,025 | 13,117 | ||
Interest expense | (2,256) | (2,601) | (7,058) | (8,271) | ||
Other | [1] | 425 | 139 | 1,826 | 3,846 | |
Other income (expense), net | 2,052 | 2,363 | 5,793 | 8,692 | ||
Income (loss) before income taxes | 8,588 | 6,608 | 39,017 | 14,242 | ||
Total Assets | ||||||
Balance | 2,571,893 | 1,706,964 | 2,571,893 | 1,706,964 | 1,963,729 | |
Corporate Items and Other [Member] | ||||||
Results of Operations | ||||||
Revenue | [1] | 348 | 1,557 | 2,709 | 4,734 | |
Expenses | [1],[2] | 46,161 | 118,482 | 104,133 | 148,555 | |
Other income (expense): | ||||||
Interest income | 635 | 865 | 2,049 | 2,550 | ||
Interest expense | (6,700) | (6,342) | (19,460) | (9,736) | ||
Other | [1] | 114 | (990) | 671 | 710 | |
Other income (expense), net | (5,951) | (6,467) | (16,740) | (6,476) | ||
Income (loss) before income taxes | (51,764) | (123,392) | (118,164) | (150,297) | ||
Total Assets | ||||||
Balance | 757,985 | 589,317 | 757,985 | 589,317 | 421,687 | |
Corporate Eliminations [Member] | ||||||
Results of Operations | ||||||
Revenue | [1] | 0 | (39) | (58) | (118) | |
Expenses | [1],[2] | 0 | (39) | (58) | (118) | |
Other income (expense): | ||||||
Interest income | 0 | 0 | 0 | 0 | ||
Interest expense | 0 | 0 | 0 | 0 | ||
Other | [1] | 0 | 0 | 0 | 0 | |
Other income (expense), net | 0 | 0 | 0 | 0 | ||
Income (loss) before income taxes | 0 | 0 | 0 | 0 | ||
Total Assets | ||||||
Balance | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | |
[1] | Intersegment billings for services rendered to other segments are recorded as revenues, as contra-expense or as other income, depending on the type of service that is rendered. | |||||
[2] | Depreciation and amortization expense are as follows: Servicing Lending Corporate Items and Other Business Segments ConsolidatedFor the three months ended September 30, 2015Depreciation expense$694 $96 $4,256 $5,046Amortization of mortgage servicing rights18,023 85 — 18,108Amortization of debt discount329 — — 329Amortization of debt issuance costs 2,981 — 344 3,325 For the three months ended September 30, 2014Depreciation expense$2,636 $98 $3,022 $5,756Amortization of mortgage servicing rights60,689 94 — 60,783Amortization of debt discount331 — — 331Amortization of debt issuance costs 1,114 — 344 1,458 For the nine months ended September 30, 2015Depreciation expense$1,736 $292 $11,439 $13,467Amortization of mortgage servicing rights87,926 262 — 88,188Amortization of debt discount1,022 — — 1,022Amortization of debt issuance costs 9,336 — 1,049 10,385 For the nine months ended September 30, 2014Depreciation expense$8,099 $235 $8,267 $16,601Amortization of mortgage servicing rights185,263 613 199 186,075Amortization of debt discount991 — — 991Amortization of debt issuance costs 3,241 — 513 3,754 |
Business Segment Reporting -103
Business Segment Reporting - Schedule of Depreciation and Amortization by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Segment Reporting Information [Line Items] | ||||
Depreciation expense | $ 5,046 | $ 5,756 | $ 13,467 | $ 16,601 |
Amortization of mortgage servicing rights | 18,108 | 60,783 | 88,188 | 186,075 |
Amortization of debt discount | 329 | 331 | 1,022 | 991 |
Amortization of debt issuance costs | 3,325 | 1,458 | 10,385 | 3,754 |
Servicing [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation expense | 694 | 2,636 | 1,736 | 8,099 |
Amortization of mortgage servicing rights | 18,023 | 60,689 | 87,926 | 185,263 |
Amortization of debt discount | 329 | 331 | 1,022 | 991 |
Amortization of debt issuance costs | 2,981 | 1,114 | 9,336 | 3,241 |
Lending [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation expense | 96 | 98 | 292 | 235 |
Amortization of mortgage servicing rights | 85 | 94 | 262 | 613 |
Amortization of debt discount | 0 | 0 | 0 | 0 |
Amortization of debt issuance costs | 0 | 0 | 0 | 0 |
Corporate Items and Other [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation expense | 4,256 | 3,022 | 11,439 | 8,267 |
Amortization of mortgage servicing rights | 0 | 0 | 0 | 199 |
Amortization of debt discount | 0 | 0 | 0 | 0 |
Amortization of debt issuance costs | $ 344 | $ 344 | $ 1,049 | $ 513 |
Related Party Transactions - Sc
Related Party Transactions - Schedule of Revenue and Expenses Related to Various Service Agreements (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2014 | Sep. 30, 2014 | |
Altisource [Member] | ||
Revenues and Expenses: | ||
Revenues | $ 10,716 | $ 30,007 |
Expenses | 27,099 | 70,577 |
HLSS [Member] | ||
Revenues and Expenses: | ||
Revenues | 84 | 458 |
Expenses | 345 | 1,590 |
AAMC [Member] | ||
Revenues and Expenses: | ||
Revenues | 251 | 952 |
Residential [Member] | ||
Revenues and Expenses: | ||
Revenues | $ 4,618 | $ 12,141 |
Related Party Transactions -105
Related Party Transactions - Schedule of Amounts Receivable or Payable (Details) $ in Thousands | Dec. 31, 2014USD ($) |
Net Receivable (Payable) | |
Net Receivable (Payable) | $ 3,307 |
Altisource [Member] | |
Net Receivable (Payable) | |
Net Receivable (Payable) | (4,909) |
HLSS [Member] | |
Net Receivable (Payable) | |
Net Receivable (Payable) | 7,884 |
AAMC [Member] | |
Net Receivable (Payable) | |
Net Receivable (Payable) | 232 |
Residential [Member] | |
Net Receivable (Payable) | |
Net Receivable (Payable) | $ 100 |
Regulatory Requirements - Narra
Regulatory Requirements - Narrative (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Brokers and Dealers [Abstract] | |
Capital requirement, unpaid principal balance | $ 553.7 |
Number of days from fiscal year end that servicer is obliged to provide audited financial statements | 90 days |
Commitments - Narrative (Detail
Commitments - Narrative (Details) - USD ($) $ in Millions | 1 Months Ended | 9 Months Ended |
Dec. 21, 2012 | Sep. 30, 2015 | |
Altisource Residential Lp [Member] | ||
Other Commitments [Line Items] | ||
Term of agreement | 15 years | |
Altisource [Member] | ||
Other Commitments [Line Items] | ||
Automatic renewal term of support services agreement | 1 year | |
Floating Rate Reverse Mortgage Loans [Member] | ||
Other Commitments [Line Items] | ||
Additional borrowing capacity to borrowers | $ 861.2 | |
Forward Mortgage Loan Interest Rate Lock Commitments [Member] | ||
Other Commitments [Line Items] | ||
Short-term commitments to lend | 373 | |
Reverse Mortgage Loan Interest Rate Lock Commitments [Member] | ||
Other Commitments [Line Items] | ||
Short-term commitments to lend | $ 12.1 |
Contingencies - Narrative (Deta
Contingencies - Narrative (Details) $ in Millions | Jan. 23, 2015USD ($) | Dec. 19, 2014USD ($)director | Sep. 30, 2015USD ($)AgreementLoanTrust | Dec. 31, 2014USD ($) | Sep. 30, 2014USD ($)Loan |
Loss Contingencies [Line Items] | |||||
Number of trust where servicing transferred to another loan servicer | Agreement | 4 | ||||
Warranty repurchase demands unpaid principal balance | $ 101.1 | $ 108.2 | |||
Warranty repurchase demands number of loans | Loan | 516 | 578 | |||
Mortgage Servicing Practice [Member] | |||||
Loss Contingencies [Line Items] | |||||
Estimate of possible loss | $ 16.7 | ||||
Residential Mortgage Backed Securities [Member] | |||||
Loss Contingencies [Line Items] | |||||
Ownership interest in trusts | 25.00% | ||||
Number of trusts where trustees received notice of servicer non-performance | Trust | 119 | ||||
Number of trusts to terminate as servicer in case if allegations proved | Trust | 119 | ||||
Number of trust where servicing transferred to another loan servicer | Trust | 2 | ||||
New York Department of Financial Services [Member] | Unfavorable Regulatory Action [Member] | |||||
Loss Contingencies [Line Items] | |||||
Number of independent directors appointed after consultation with operations monitor | director | 2 | ||||
New York Department of Financial Services [Member] | Unfavorable Regulatory Action, Civil Penalty [Member] | |||||
Loss Contingencies [Line Items] | |||||
Litigation settlement expense | $ 100 | ||||
New York Department of Financial Services [Member] | Unfavorable Regulatory Action, Restitution Paid [Member] | |||||
Loss Contingencies [Line Items] | |||||
Litigation settlement expense | $ 50 | ||||
California Department of Business Oversight [Member] | Unfavorable Regulatory Action [Member] | |||||
Loss Contingencies [Line Items] | |||||
Amount of penalty in consent order | $ 2.5 | ||||
Accrued penalty | $ 2.5 | ||||
Oversight monitor period | 2 years | ||||
Securities And Exchange Commission [Member] | Unfavorable Regulatory Action [Member] | |||||
Loss Contingencies [Line Items] | |||||
Estimate of possible loss | $ 2 | ||||
Accrued penalty | 2 | ||||
Maximum [Member] | Office of Mortgage Settlement Oversight [Member] | First Uncured Violation [Member] | |||||
Loss Contingencies [Line Items] | |||||
Financial penalties in case of uncured violations | 1 | ||||
Maximum [Member] | Office of Mortgage Settlement Oversight [Member] | Second Uncured Violation [Member] | |||||
Loss Contingencies [Line Items] | |||||
Financial penalties in case of uncured violations | $ 5 |
Contingencies - Schedule of Ind
Contingencies - Schedule of Indemnification Obligations (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | ||
Indemnification Obligations Liability [Roll Forward] | |||
Beginning balance | $ 132,918 | $ 192,716 | |
Provision for representation and warranty obligations | 1,695 | 5,076 | |
New production reserves | 664 | 820 | |
Charge-offs and other | [1] | (48,404) | (54,776) |
Ending balance | $ 86,873 | $ 143,836 | |
[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. |
Subsequent Events - Narrative (
Subsequent Events - Narrative (Details) - USD ($) $ in Millions | Oct. 20, 2015 | Sep. 30, 2015 |
Amended Senior Secured Term Loan [Member] | Subsequent Event [Member] | ||
Subsequent Event [Line Items] | ||
Applicable interest rate margin | 0.50% | |
Percentage of net cash proceeds from permitted asset sales allowed to prepay loans | 100.00% | |
Percentage Of Lender Fee | 3.00% | |
Senior Secured Term Loan [Member] | ||
Subsequent Event [Line Items] | ||
Repayment of SSTL | $ 561.6 | |
Senior Secured Term Loan [Member] | Subsequent Event [Member] | ||
Subsequent Event [Line Items] | ||
Repayment of SSTL | $ 50 | |
SSTL outstanding | $ 476.6 |