Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Feb. 16, 2016 | Jun. 30, 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-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 123,852,336 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 1,230,610,916 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Assets | ||
Cash | $ 257,272 | $ 129,473 |
Mortgage servicing rights ($761,190 and $93,901 carried at fair value) | 1,138,569 | 1,913,992 |
Advances, net | 444,298 | 893,914 |
Match funded advances | 1,706,768 | 2,409,442 |
Loans held for sale ($309,054 and $401,120 carried at fair value) | 414,046 | 488,612 |
Loans held for investment - Reverse mortgages, at fair value | 2,488,253 | 1,550,141 |
Receivables, net | 286,981 | 270,596 |
Deferred tax assets, net | 76,987 | |
Premises and equipment, net | 57,626 | 43,310 |
Other assets ($14,352 and $7,335 carried at fair value) | 610,996 | 490,811 |
Total assets | 7,404,809 | 8,267,278 |
Liabilities | ||
Match funded liabilities | 1,584,049 | 2,090,247 |
Financing liabilities ($2,933,066 and $2,058,693 carried at fair value) | 3,089,255 | 2,258,641 |
Other secured borrowings | 782,423 | 1,733,691 |
Senior unsecured notes | 350,000 | 350,000 |
Other liabilities | 744,444 | 793,534 |
Total liabilities | $ 6,550,171 | $ 7,226,113 |
Commitments and Contingencies (Notes 26 and 27) | ||
Equity | ||
Common stock, $.01 par value; 200,000,000 shares authorized; 124,774,516 and 125,215,615 shares issued and outstanding at December 31, 2015 and 2014, respectively | $ 1,248 | $ 1,252 |
Additional paid-in capital | 526,148 | 515,194 |
Retained earnings | 325,929 | 530,361 |
Accumulated other comprehensive loss, net of income taxes | (1,763) | (8,413) |
Total Ocwen stockholders’ equity | 851,562 | 1,038,394 |
Non-controlling interest in subsidiaries | 3,076 | 2,771 |
Total equity | 854,638 | 1,041,165 |
Total liabilities and equity | $ 7,404,809 | $ 8,267,278 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Mortgage servicing rights, at fair value | $ 761,190 | $ 93,901 |
Loans held for sale, at fair value | 309,054 | 401,120 |
Other assets, at fair value | 14,352 | 7,335 |
Financing liabilities, at fair value | $ 2,933,066 | $ 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) | 124,774,516 | 125,215,615 |
Common stock, shares outstanding (in shares) | 124,774,516 | 125,215,615 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Revenue | ||||
Servicing and subservicing fees | $ 1,531,797 | $ 1,894,175 | $ 1,823,559 | |
Gain on loans held for sale, net | 134,969 | 134,297 | 121,694 | |
Other revenues | 74,332 | 82,853 | 93,020 | |
Total revenue | [1] | 1,741,098 | 2,111,325 | 2,038,273 |
Expenses | ||||
Compensation and benefits | 415,055 | 415,530 | 442,777 | |
Goodwill impairment loss | 0 | 420,201 | 0 | |
Amortization of mortgage servicing rights | 99,194 | 250,375 | 282,781 | |
Servicing and origination | 344,560 | 202,739 | 112,127 | |
Technology and communications | 154,758 | 167,053 | 140,466 | |
Professional services | 276,393 | 326,667 | 123,886 | |
Occupancy and equipment | 112,864 | 109,179 | 105,145 | |
Other | 75,360 | 143,464 | 94,112 | |
Total expenses | [1],[2] | 1,478,184 | 2,035,208 | 1,301,294 |
Other income (expense) | ||||
Interest income | 18,320 | 22,991 | 22,355 | |
Interest expense | (482,373) | (541,757) | (395,586) | |
Gain on sale of mortgage servicing rights, net | 83,921 | 0 | 0 | |
Gain (loss) on extinguishment of debt | 0 | 2,609 | (8,681) | |
Other, net | (12,643) | (3,119) | (2,588) | |
Total other expense, net | (392,775) | (519,276) | (384,500) | |
Income (loss) before income taxes | (129,861) | (443,159) | 352,479 | |
Income tax expense | 116,851 | 26,396 | 42,061 | |
Net income (loss) | (246,712) | (469,555) | 310,418 | |
Net income attributable to non-controlling interests | (305) | (245) | 0 | |
Net income (loss) attributable to Ocwen stockholders | (247,017) | (469,800) | 310,418 | |
Preferred stock dividends | 0 | (1,163) | (5,031) | |
Deemed dividends related to beneficial conversion feature of preferred stock | 0 | (1,639) | (6,989) | |
Net income (loss) attributable to Ocwen common stockholders | [3] | $ (247,017) | $ (472,602) | $ 298,398 |
Earnings (loss) per share attributable to Ocwen common stockholders | ||||
Basic (in dollars per share) | $ (1.97) | $ (3.60) | $ 2.20 | |
Diluted (in dollars per share) | $ (1.97) | $ (3.60) | $ 2.13 | |
Weighted average common shares outstanding | ||||
Basic (in shares) | 125,315,899 | 131,362,284 | 135,678,088 | |
Diluted (in shares) | [3] | 125,315,899 | 131,362,284 | 139,800,506 |
[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 year ended December 31, 2015: Depreciation expense$2,990 $380 $15,789 $19,159Amortization of mortgage servicing rights98,849 345 — 99,194Amortization of debt discount2,680 — — 2,680Amortization of debt issuance costs 21,269 — 1,395 22,664 For the year ended December 31, 2014: Depreciation expense$9,955 $332 $11,623 $21,910Amortization of mortgage servicing rights249,471 705 199 250,375Amortization of debt discount1,318 — — 1,318Amortization of debt issuance costs 4,294 — 845 5,139 For the year ended December 31, 2013: Depreciation expense$13,525 $320 $10,400 $24,245Amortization of mortgage servicing rights282,526 255 — 282,781Amortization of debt discount1,412 — — 1,412Amortization of debt issuance costs 4,395 — — 4,395 | |||
[3] | For 2015 and 2014, we have excluded the effect of the preferred stock, stock options and common stock awards from the computation of diluted earnings per share because of the anti-dilutive effect of our reported net loss. |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ (246,712) | $ (469,555) | $ 310,418 | |
Other comprehensive income (loss), net of income taxes: | ||||
Change in deferred loss on cash flow hedges arising during the year | [1] | 0 | 0 | (11,558) |
Reclassification adjustment for losses on cash flow hedges included in net income | [2] | 6,650 | 1,734 | 7,843 |
Net change in deferred loss on cash flow hedges | 6,650 | 1,734 | (3,715) | |
Other | 0 | 4 | 5 | |
Total other comprehensive income (loss), net of income taxes | 6,650 | 1,738 | (3,710) | |
Comprehensive income (loss) | (240,062) | (467,817) | 306,708 | |
Comprehensive income attributable to non-controlling interests | (305) | (245) | 0 | |
Comprehensive income (loss) attributable to Ocwen stockholders | $ (240,367) | $ (468,062) | $ 306,708 | |
[1] | Net of tax benefit of $0.8 million for 2013. | |||
[2] | Net of tax expense of $0.4 million, $0.2 million and $3.6 million for 2015, 2014 and 2013, respectively. These losses are reclassified to Other, net in the Consolidated Statements of Operations. |
CONSOLIDATED STATEMENTS OF COM6
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Footnote) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Statement of Comprehensive Income [Abstract] | |||
Income tax benefit on change in deferred gain (loss) on cash flow hedges | $ 0.8 | ||
Income tax benefit (expense) on reclassification adjustment for losses on cash flow hedges | $ (0.4) | $ (0.2) | $ (3.6) |
CONSOLIDATED STATEMENTS OF CHAN
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] | Noncontrolling Interest in Subsidiaries [Member] |
Balance at at Dec. 31, 2012 | $ 1,611,422 | $ 1,356 | $ 911,942 | $ 704,565 | $ (6,441) | $ 0 |
Balance at (in shares) at Dec. 31, 2012 | 135,637,932 | |||||
Net income (loss) | 310,418 | 310,418 | 0 | |||
Preferred stock dividends | (5,031) | (5,031) | ||||
Deemed dividend related to beneficial conversion feature of preferred stock | (6,989) | (6,989) | ||||
Conversion of preferred stock | 100,000 | $ 31 | 99,969 | |||
Conversion of preferred stock (in shares) | 3,145,640 | |||||
Repurchase of common stock | (217,903) | $ (42) | (217,861) | |||
Repurchase of common stock (in shares) | (4,271,347) | |||||
Exercise of common stock options | (2,605) | $ 7 | (2,612) | |||
Exercise of common stock options (in shares) | 652,015 | |||||
Equity-based compensation and other | 26,989 | 26,989 | ||||
Equity-based compensation and other (in shares) | 12,031 | |||||
Other comprehensive income (loss), net of income taxes | (3,710) | (3,710) | ||||
Balance at at Dec. 31, 2013 | 1,812,591 | $ 1,352 | 818,427 | 1,002,963 | (10,151) | 0 |
Balance at (in shares) at Dec. 31, 2013 | 135,176,271 | |||||
Net income (loss) | (469,555) | (469,800) | 245 | |||
Preferred stock dividends | (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 | (382,487) | $ (124) | (382,363) | |||
Repurchase of common stock (in shares) | (12,370,692) | |||||
Exercise of common stock options | (70) | $ 4 | (74) | |||
Exercise of common stock options (in shares) | 434,054 | |||||
Equity-based compensation and other | 17,224 | 17,224 | ||||
Equity-based compensation and other (in shares) | 25,686 | |||||
Non-controlling interest in connection with the acquisition of a controlling interest in Ocwen Structured Investments, LLC | 2,526 | 2,526 | ||||
Other comprehensive income (loss), net of income taxes | 1,738 | 1,738 | ||||
Balance at at Dec. 31, 2014 | $ 1,041,165 | $ 1,252 | 515,194 | 530,361 | (8,413) | 2,771 |
Balance at (in shares) at Dec. 31, 2014 | 125,215,615 | 125,215,615 | ||||
Net income (loss) | $ (246,712) | (247,017) | 305 | |||
Cumulative effect of fair value election - Mortgage servicing rights, net of taxes | 42,585 | 42,585 | ||||
Preferred stock dividends | 0 | |||||
Deemed dividend related to beneficial conversion feature of preferred stock | 0 | |||||
Repurchase of common stock | $ (4,142) | $ (6) | (4,136) | |||
Repurchase of common stock (in shares) | (625,705) | (625,705) | ||||
Exercise of common stock options | $ 519 | $ 1 | 518 | |||
Exercise of common stock options (in shares) | 89,664 | |||||
Equity-based compensation and other | 14,573 | $ 1 | 14,572 | |||
Equity-based compensation and other (in shares) | 94,942 | |||||
Other comprehensive income (loss), net of income taxes | 6,650 | 6,650 | ||||
Balance at at Dec. 31, 2015 | $ 854,638 | $ 1,248 | $ 526,148 | $ 325,929 | $ (1,763) | $ 3,076 |
Balance at (in shares) at Dec. 31, 2015 | 124,774,516 | 124,774,516 |
CONSOLIDATED STATEMENTS OF CHA8
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Parenthetical) - $ / shares | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Statement of Stockholders' Equity [Abstract] | ||
Preferred stock dividends (in dollars per share) | $ 18.75 | $ 37.29 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash flows from operating activities | |||
Net income (loss) | $ (246,712) | $ (469,555) | $ 310,418 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Goodwill impairment loss | 0 | 420,201 | 0 |
Amortization of mortgage servicing rights | 99,194 | 250,375 | 282,781 |
Loss (gain) on valuation of mortgage servicing rights, at fair value | 98,173 | 22,068 | (30,816) |
Impairment of mortgage servicing rights | 17,341 | 0 | 0 |
Gain on sale of mortgage servicing rights, net | (83,921) | 0 | 0 |
Realized and unrealized losses on derivative financial instruments | 8,419 | 2,643 | 14,336 |
Provision for bad debts | 101,226 | 84,751 | 34,816 |
Depreciation | 19,159 | 21,910 | 24,245 |
Amortization of debt issuance costs | 22,664 | 5,139 | 4,395 |
(Gain) loss on extinguishment of debt | 0 | (2,609) | 8,681 |
Provision for valuation allowance on deferred tax assets | 97,069 | 3,601 | 15,764 |
(Increase) decrease in deferred tax assets other than provision for valuation allowance | (28,136) | 34,241 | (36,889) |
Equity-based compensation expense | 7,291 | 10,729 | 5,648 |
Gain on loans held for sale, net | (134,969) | (134,297) | (121,694) |
Origination and purchase of loans held for sale | (5,000,681) | (7,430,340) | (9,678,038) |
Proceeds from sale and collections of loans held for sale | 5,125,203 | 7,345,730 | 9,468,627 |
Changes in assets and liabilities: | |||
Decrease in advances and match funded advances | 531,313 | 291,989 | 295,108 |
Decrease (increase) in receivables and other assets, net | 46,463 | (37,394) | 224,543 |
(Decrease) increase in other liabilities | (109,511) | (94,508) | 70,336 |
Other, net | 11,994 | 27,850 | (7,842) |
Net cash provided by operating activities | 581,579 | 352,524 | 884,419 |
Cash flows from investing activities | |||
Origination of loans held for investment - reverse mortgages | (1,008,065) | (816,881) | (609,555) |
Principal payments received on loans held for investment - reverse mortgages | 151,107 | 86,234 | 5,886 |
Purchase of mortgage servicing rights, net | (12,355) | (22,488) | (987,663) |
Proceeds from sale of mortgage servicing rights | 686,838 | 287 | 34,754 |
Acquisition of advances in connection with the purchase of mortgage servicing rights | (85,521) | (2,588,739) | |
Acquisition of advances in connection with the purchase of loans | 0 | (60,482) | 0 |
Proceeds from sale of advances and match funded advances | 486,311 | 1,054 | 3,842,537 |
Net proceeds from sale of diversified fee-based businesses to Altisource Portfolio Solutions, SA | 0 | 0 | 210,793 |
Additions to premises and equipment | (37,487) | (11,430) | (28,915) |
Proceeds from sale of premises and equipment | 4,758 | 22 | 252 |
Distributions of capital from unconsolidated entities | 6,572 | 1,300 | |
Other | 9,263 | 6,439 | (1,459) |
Net cash (used in) provided by investing activities | 280,370 | (958,247) | (2,414,978) |
Cash flows from financing activities | |||
Repayment of match funded liabilities | (506,198) | (274,567) | (167,931) |
Proceeds from other secured borrowings | 7,170,831 | 5,677,291 | 9,633,914 |
Repayments of other secured borrowings | (8,402,758) | (5,809,239) | (8,804,558) |
Proceeds from issuance of senior unsecured notes | 0 | 350,000 | 0 |
Payment of debt issuance costs | (23,480) | (6,835) | (25,758) |
Proceeds from sale of mortgage servicing rights accounted for as a financing | 0 | 123,551 | 447,755 |
Proceeds from sale of loans accounted for as a financing | 1,024,361 | 783,009 | 604,991 |
Proceeds from sale of advances accounted for as a financing | 0 | 88,981 | 0 |
Repurchase of common stock | (4,142) | (382,487) | (217,903) |
Payment of preferred stock dividends | 0 | (1,163) | (5,115) |
Proceeds from exercise of common stock options | 412 | 1,840 | 2,302 |
Other | 6,824 | 6,303 | 21,244 |
Net cash provided by (used in) financing activities | (734,150) | 556,684 | 1,488,941 |
Net increase (decrease) in cash | 127,799 | (49,039) | (41,618) |
Cash at beginning of year | 129,473 | 178,512 | 220,130 |
Cash at end of year | 257,272 | 129,473 | 178,512 |
Supplemental cash flow information | |||
Interest paid | 470,724 | 560,208 | 395,758 |
Income tax payments, net | 5,706 | 38,293 | 14,747 |
Supplemental non-cash investing and financing activities | |||
Transfers of loans held for sale to loans held for investment | 0 | 110,874 | 0 |
Transfers of loans held for sale to real estate owned | 18,594 | 8,808 | 4,775 |
Conversion of Series A preferred stock to common stock | 0 | 62,000 | 100,000 |
Fair value of assets acquired | |||
Cash | 0 | 0 | |
Advances | 0 | (1,786,409) | |
Mortgage servicing rights | 0 | (401,314) | |
Premises and equipment | 0 | (16,423) | |
Goodwill | 0 | (211,419) | |
Receivables and other assets | 0 | (2,989) | |
Fair value of assets acquired | 0 | (2,418,554) | |
Fair value of liabilities assumed | |||
Accrued expenses and other liabilities | 0 | 74,625 | |
Total consideration | 0 | (2,343,929) | |
Amount due to seller for purchase price adjustments | 0 | 54,220 | |
Cash paid | 0 | (2,289,709) | |
Less cash acquired | 0 | ||
Net cash paid | (2,289,709) | ||
ResCap [Member] | |||
Cash flows from investing activities | |||
Payments to acquire business | 0 | (54,220) | (2,289,709) |
Ocwen Structured Investments, LLC (OSI) [Member] | |||
Cash flows from investing activities | |||
Payments to acquire business | 0 | (7,833) | 0 |
Liberty Acquisition [Member] | |||
Cash flows from investing activities | |||
Payments to acquire business | 0 | 0 | (26,568) |
Correspondent One [Member] | |||
Cash flows from investing activities | |||
Net cash acquired in acquisition of Correspondent One S.A. | $ 0 | $ 0 | $ 22,108 |
Organization, Business Environm
Organization, Business Environment, Basis of Presentation and Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Business Environment, Basis of Presentation and Significant Accounting Policies | Note 1 — Organization, Business Environment, Basis of Presentation and Significant Accounting Policies Organization Ocwen Financial Corporation (NYSE: OCN) (Ocwen, we, us and our) is a financial services holding company which, through its subsidiaries, originates and services 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) as well as 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 primary operating subsidiaries: Ocwen Loan Servicing, LLC (OLS), Ocwen Financial Solutions Private Limited (OFSPL), 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 primarily 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. Business, Liquidity, Financing Activities and Management’s Plans We are facing certain challenges and uncertainties that could have significant adverse effects on our business, liquidity and financing activities. 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 have entered into a number of regulatory settlements, which subject us to ongoing monitoring or reporting and which have significantly impacted our ability to grow our servicing portfolio. See Note 25 — Regulatory Requirements and Note 27 — Contingencies for further information regarding regulatory requirements, regulatory settlements and regulatory-related contingencies. To the extent that an examination, monitorship, audit or other regulatory engagement results in an alleged failure by us to comply with applicable law, regulation or licensing requirement, or if allegations are made that we have failed to comply with the commitments we have made in connection with our regulatory settlements, or if other regulatory actions are taken in the future against us of a similar or different nature, 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. Given the intense regulatory scrutiny and the subsequent investments Ocwen has made in its risk and compliance infrastructure, we believe the underlying economics of our Servicing business have likely been changed for the foreseeable future. We believe it is unlikely Ocwen will achieve meaningful profitability in its Servicing business in the near term unless there is a significant, structural change in the business model. While we believe such structural change is probably unlikely in the current regulatory environment, we are nonetheless intensely focused on improving our operations to enhance borrower experiences and improve efficiencies, both of which we believe will drive stronger financial performance through lower overall costs. We are also investing in our forward and reverse lending businesses and will continue to evaluate new adjacent market opportunities that are consistent with our strategic goals, such as providing secured floor plan lending to used car dealerships through our Automotive Capital Services (ACS) venture and providing financing to investors to purchase single family homes and apartments for lease through our Liberty Rental Finance venture. Our new ventures involve risks and uncertainties, including potential difficulties integrating new lines of business into our current infrastructure, the inability to achieve the expected financial results in a reasonable time frame, implementing and maintaining consistent standards, controls, policies and information systems, and diversion of management’s attention from other business matters. Further, our strategic initiatives could be impacted by factors beyond our control, such as general economic conditions and increased competition. The diversion of management’s attention and any delays or difficulties encountered in implementing our new strategic initiatives could negatively impact our business and results of operations. Further, the economic benefits that we anticipate from these strategic initiatives may not develop. There can be no assurance that we will be successful in returning to profitability. Our success will depend on market conditions and other factors outside of our control as well as successful operational execution. If we continue to experience losses, our share price, business, reputation, financial condition and results of operations could be materially and adversely affected. New Residential Investment Corp. (NRZ) is an important business partner to which we have sold rights to receive servicing fees, excluding ancillary income (other than net income on custodial and escrow accounts), with respect to certain non-Agency MSRs (Rights to MSRs). A level of future uncertainty exists regarding our relationship with NRZ, including with respect to the impact of our Standard & Poor’s Ratings Services (S&P) servicer rating under our agreements with NRZ beginning April 7, 2017. If a termination event related to our servicer ratings exists under the Master Servicing Rights Purchase Agreement and Sale Supplements with NRZ, NRZ will have the right to direct the transfer of servicing with respect to an affected servicing agreement to a licensed replacement servicer that obtains all required third-party consents. As of December 31, 2015, a termination event exists because our servicer rating from S&P is below Average. If our servicer rating from S&P is not upgraded to Average or better prior to April 7, 2017, NRZ will have the right to direct the transfer of any affected servicing agreements to a successor licensed servicer that obtains all required third-party consents. As of December 31, 2015, approximately $137.1 billion in unpaid principal balance (UPB) has been sold under these agreements. Following any such transfer, we would no longer be entitled to receive future servicing fee revenue with respect to any transferred servicing agreement. See Note 4 — Sales of Advances and MSRs for further information regarding our relationship with NRZ. 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. If we pursue the investments in our businesses described above and incur the projected losses, we currently project we will breach the consolidated total debt to consolidated tangible net worth ratio financial covenant under our Senior Secured Term Loan (SSTL) during 2016, the extent to which will depend upon the decrease in our net worth resulting from losses in the year, the impact of higher debt balances under our warehouse lines from expansion of our lending business, and movements in interest rates, among other factors. In order to avoid an event of default arising from a covenant breach, we intend to repay, refinance or amend the SSTL prior to September 30, 2016, assuming we continue to project a covenant compliance issue based on our ongoing business performance. Alternatively or in addition to the above-mentioned options for the SSTL, we could maintain our compliance with the covenant by issuing common or preferred equity. We could also choose to take other measures to assist with our covenant compliance, including containing the growth of our lending business and reducing the debt balances on our warehouse lines or selling assets such as additional MSRs, which would reduce future revenues. We believe our plans described above will allow us to avoid an event of default, however there can be no assurances that these or other actions will be successful. See Note 14 — Borrowings for further information regarding our debt agreements. Basis of Presentation and Significant Accounting Policies Consolidation and Basis of Presentation Principles of Consolidation Our financial statements include the accounts of Ocwen, its majority-owned subsidiaries and any variable interest entity (VIE) for which we have determined that we are the primary beneficiary. We apply the equity method of accounting to investments when the entity is not a VIE, and we are able to exercise significant influence, but not control, over the policies and procedures of the entity but own 50% or less of the voting securities. We have eliminated intercompany accounts and transactions in consolidation. Foreign Currency Translation The functional currency of each of our foreign subsidiaries is the U.S. dollar. Re-measurement adjustments of foreign-denominated amounts to U.S. dollars are included in Other, net in our Consolidated Statements of Operations. Reclassifications Within the Cash flows from operating activities section of the Consolidated Statements of Cash Flows for 2014 and 2013, we reclassified the Provision for valuation adjustment on deferred tax assets from Decrease (increase) in deferred tax assets, net to a new line item. Certain other insignificant amounts in the Consolidated Statements of Cash Flows for prior years 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 generally accepted accounting principles (GAAP) requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, the reported amounts of revenues and expenses during the reporting period and the related disclosures in the accompanying notes. Such estimates and assumptions include, but are not limited to, those that relate to fair value measurements, the provision for potential losses that may arise from litigation proceedings, 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. Significant Accounting Policies Cash Cash includes both interest-bearing and non-interest-bearing demand deposits with financial institutions that have original maturities of 90 days or less. Mortgage Servicing Rights (MSRs) MSRs are assets representing our right to service portfolios of mortgage loans. We have primarily obtained MSRs through asset purchases or business combination transactions. We also retain MSRs on originated loans when they are sold in the secondary market. For servicing retained in connection with the securitization of reverse mortgage loans accounted for as secured financings, we do not recognize an MSR. An agreement between the various parties to a mortgage securitization transaction typically specifies the rights and obligations of the holder of the MSRs, which include guidelines and procedures for servicing the loans. Two examples of these guidelines and procedures include remittance and reporting requirements. The UPB of the loan portfolios that we service for others is not included on our balance sheet. Custodial accounts, which hold funds representing collections of principal and interest that we receive from borrowers (float balances), are held in escrow by an unaffiliated bank and excluded from our balance sheet. All newly acquired or retained MSRs are initially measured at fair value. We recognize a servicing liability for those portfolio contracts that are not expected to compensate us adequately for performing the servicing. For this purpose, we define contracts as conventional, government-insured or non-Agency (commonly referred to as non-prime, subprime or private-label loans) based on their general comparability with regard to servicing guidelines, underwriting standards and borrower risk characteristics. Servicing assets are not recognized for subservicing arrangements entered into with the entity that owns the MSRs. Subsequent to acquisition, we account for servicing assets and servicing liabilities using the amortization method or the fair value measurement method. The fair value election is irrevocable and can be made at the beginning of any fiscal year. Additionally, transferring servicing assets and servicing liabilities from a class subsequently measured using the amortization method to a class subsequently measured at fair value is permitted as of the start of any fiscal year. As discussed further in Note 9 — Mortgage Servicing , 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. Once the fair value election is made for a particular class of MSRs, that election applies to all subsequently acquired or originated servicing assets and liabilities with characteristics consistent with the class. We defined our classes based on our strategy for managing the risks of the underlying portfolios. For certain of the servicing assets, we previously managed the effects of interest rate risk with derivative financial instruments. We elected to account for this class of servicing assets using the fair value measurement method. For servicing assets or liabilities that we account for using the amortization method, we amortize the balances in proportion to, and over the period of, estimated net servicing income (if servicing revenues exceed servicing costs) or net servicing loss (if servicing costs exceed servicing revenues). We assess servicing assets or liabilities for impairment or increased obligation based on fair value at each reporting date. Estimated net servicing income is primarily driven by the estimated future cash flows of the underlying mortgage loan portfolio, which, absent new purchases, declines over time from prepayments and scheduled loan amortization. We adjust MSR amortization prospectively in response to changes in estimated projections of future cash flows. We perform an impairment analysis based on the difference between the carrying amount and estimated fair value after grouping the underlying portfolios into the applicable strata. We recognize any impairment through a valuation allowance. We adjust the valuation allowance to reflect subsequent changes in the measurement of impairment. However, we do not recognize fair value in excess of the carrying amount of servicing assets for that stratum. For servicing assets or liabilities that we account for at fair value on a recurring basis, we measure the balances at fair value at each reporting date and report changes in fair value in earnings in the period in which the changes occur. We earn fees for servicing mortgage loans. We collect servicing fees, generally expressed as a percent of UPB, from the borrowers’ payments. We also include late fees, prepayment penalties, float earnings and other ancillary fees in servicing revenue. We recognize servicing fees as revenue when the fees are earned, which is generally when the borrowers’ payments are collected or when loans are modified or liquidated through the sale of the underlying real estate collateral or otherwise. Advances and Match Funded Advances During any period in which a borrower does not make payments, most of our servicing agreements require that we advance our own funds to meet contractual principal and interest remittance requirements for the investors, to pay property taxes and insurance premiums and to process foreclosures. We also advance funds to maintain, repair and market foreclosed real estate properties on behalf of investors. These advances are made pursuant to the terms of each servicing contract. Each servicing contract is associated with specific loans, identified as a pool. When we make an advance on a loan under each servicing contract, we are entitled to recover that advance either from the borrower, for reinstated and performing loans, or from investors, for modified and liquidated loans. Most of our servicing contracts provide that the advances made under the respective agreement have priority over all other cash payments from the proceeds of the loan, and in the majority of cases, the proceeds of the pool of loans that are the subject of that servicing contract. As a result, we are entitled to repayment from loan proceeds before any interest or principal is paid on the bonds, and in the majority of cases, advances in excess of loan proceeds may be recovered from pool level proceeds. We establish an allowance for losses through a charge to earnings to the extent that we believe advances are uncollectible under the provisions of each servicing contract taking into consideration our historical collection rates, length of delinquency and the amount of the advance. However, we are generally only obligated to advance funds to the extent that we believe the advances are recoverable from expected proceeds from the loan. We assess collectibility using proprietary cash flow projection models that incorporate a number of different factors, depending on the characteristics of the mortgage loan or pool, including, for example, estimated time to a foreclosure sale, estimated costs of foreclosure action, estimated future property tax payments and the estimated value of the underlying property net of estimated carrying costs, commissions and closing costs. Loans Held for Sale Loans held for sale include residential mortgage loans that we originate or purchase and do not intend to hold until maturity. We report loans held for sale at either fair value or the lower of cost or fair value computed on an aggregate basis. For loans held for sale that are reported at the lower of cost or fair value, loan origination fees, as well as premium and discount, points and incremental direct origination costs, are initially recorded as an adjustment of the cost basis of the loan and are deferred until the loan is sold. For loans that we elected to measure at fair value on a recurring basis, we report changes in fair value in Gain on loans held for sale, net in the Consolidated Statements of Operations in the period in which the changes occur. These loans are expected to be sold into the secondary market to the GSEs or into Ginnie Mae guaranteed securitizations. For all other loans held for sale which we report at the lower of cost or fair value, we account for the excess of cost over fair value as a valuation allowance and include changes in the valuation allowance in Other, net, in the Consolidated Statements of Operations in the period in which the change occurs. We accrue interest income as earned. We place loans on non-accrual status after any portion of principal or interest has been delinquent for more than 89 days , or earlier if management determines the borrower is unable to continue performance. When we place a loan on non-accrual status, we reverse the interest that we have accrued but not yet received. We return loans to accrual status only when we reinstate the loan and there is no significant uncertainty as to collectability. Loans Held for Investment - Reverse Mortgages Loans held for investment include reverse residential mortgage loans that we originate and which we have elected to measure at fair value. These reverse mortgages are insured by the FHA and pooled into Ginnie Mae guaranteed securities that we sell into the secondary market with servicing rights retained. Loan transfers in these Ginnie Mae securitizations do not meet the definition of a participating interest and as a result, the transfers of the reverse mortgages do not qualify for sale accounting. Therefore, we account for these transfers as financings, with the reverse mortgages classified as Loans held for investment - reverse mortgages, at fair value, on our Consolidated Balance Sheets, with no gain or loss recognized on the transfer. Upfront costs and fees related to loans held for investment, including broker fees, are recognized in earnings as incurred and are not capitalized. However, we capitalize premiums on loans purchased via the correspondent channel, because they represent part of the purchase price. Changes in the fair value of the reverse mortgages are included in Other revenues in our Consolidated Statements of Operations. Included in net fair value gains on reverse mortgages is interest income that we expect to collect on the reverse mortgages. We report originations and collections of reverse mortgages in investing activities in the Consolidated Statements of Cash Flows. We report net fair value gains on reverse mortgages as an adjustment to the net cash provided by or used in operating activities in the Consolidated Statements of Cash Flows. Proceeds from securitizations of reverse mortgages are included in financing activities in the Consolidated Statements of Cash Flows. Transfers of Financial Assets We securitize, sell and service forward and reverse residential mortgage loans. Securitization transactions typically involve the use of VIEs and are accounted for either as sales or as secured financings. We typically retain economic interests in the securitized assets in the form of servicing rights and obligations. In order to efficiently finance our assets and operations and create liquidity, we may sell servicing advances, MSRs or Rights to MSRs. In order to determine whether or not a VIE is required to be consolidated, we consider our ongoing involvement with the VIE. In circumstances where we have both the power to direct the activities that most significantly impact the performance of the VIE and the obligation to absorb losses or the right to receive benefits that could be significant, we would conclude that we would consolidate the entity, which precludes us from recording an accounting sale in connection with the transfer of the financial assets. In the case of a consolidated VIE, we continue to report the underlying residential mortgage loans or servicing advances, and we record the securitized debt on our consolidated balance sheet. In the case of transfers where either one or both of the power or economic criteria above are not met, we evaluate whether we achieve a sale for accounting purposes. In order to achieve a sale, the transferred assets must be legally isolated, not be constrained by restrictions from further transfer and be deemed to be beyond our control. If the transfer does not meet any of these three criteria, the accounting is consistent with a secured financing as described in the preceding paragraph. In certain situations, we may have continuing involvement in transferred loans through our retained servicing. Additionally, we may have the right, but not the obligation, to buy certain re-performing loans from the purchaser for which we have secured a commitment to re-pool those loans under a Ginnie Mae program. In both cases, transactions involving these situations typically would still be eligible for sale accounting, as we have ceded effective control of these loans to the purchaser. Subsequent to the determination that a transaction does not meet the accounting sale criteria, we may determine that we meet the criteria. In the event we subsequently meet the sale accounting criteria, we derecognize the transferred assets and related liabilities. In the case of transfers of MSRs and Rights to MSRs where we retain the right to subservice, we defer the related gain or loss and amortize the balance over the life of the subservicing agreement. Gains or losses on off-balance sheet securitizations take into consideration any retained interests, including servicing rights and representation and warranty obligations, both of which are initially recorded at fair value at the date of sale in Gain on loans held for sale, net, in our Consolidated Statements of Operations. Premises and Equipment We report premises and equipment at cost and, except for land, depreciate them over their estimated useful lives on a straight-line basis as follows: Computer hardware and software 2 – 3 years Buildings 40 years Leasehold improvements Term of the lease not to exceed useful life Furniture and fixtures 5 years Office equipment 5 years Litigation We monitor our legal matters, including advice from external legal counsel, and periodically perform assessments of these matters for potential loss accrual and disclosure. We establish a liability for settlements, judgments on appeal and filed and/or threatened claims for which we believe that it is probable that a loss has been or will be incurred and the amount can be reasonably estimated. We recognize legal costs associated with loss contingencies as they are incurred. Derivative Financial Instruments We recognize all derivatives on our consolidated balance sheet at fair value. On the date that we enter into a derivative contract, we designate and document each derivative contract as one of the following at the time the contract is executed: (a) a hedge of a recognized asset or liability (fair value hedge); (b) a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability (cash flow hedge); (c) a hedge of a net investment in a foreign operation; or (d) a derivative instrument not designated as a hedging instrument. To qualify for hedge accounting, a derivative must be highly effective at reducing the risk associated with the exposure being hedged. In addition, the documentation must include the risk management objective and strategy. We assess and document quarterly the extent to which a derivative has been and is expected to continue to be effective in offsetting the changes in the fair value or the cash flows of the hedged item. To assess effectiveness, we use statistical methods, such as regression analysis, as well as non-statistical methods including dollar-offset analysis. For a fair value hedge, we record changes in the fair value of the derivative, to the extent that it is effective, and changes in the fair value of the hedged asset or liability attributable to the hedged risk in the same financial statement category as the hedged item on the face of the statement of operations. For a cash flow hedge, to the extent that it is effective, we record changes in the estimated fair value of the derivative in other comprehensive income. We subsequently reclassify these changes in estimated fair value to net income in the same period, or periods, that the hedged transaction affects earnings and in the same financial statement category as the hedged item. For derivative instruments not designated as a hedge for accounting purposes that were entered into as an economic hedge against changes in fair value of a recognized asset, we report changes in the fair value in the same financial statement category of the statement of operations as the changes in fair value of the related asset. For all other derivative instruments not designated as a hedging instrument, we report changes in their fair values in Other income (expense), net. If a derivative instrument in a cash flow hedge is terminated or the hedge designation is removed, we reclassify related amounts in accumulated other comprehensive income into earnings in the same period or periods during which the cash flows that were hedged affect earnings. In a period where we determine that it is probable that a hedged forecasted transaction will not occur, such as variable-rate interest payments on debt that has been repaid in advance, any related amounts in accumulated other comprehensive income are reclassified into earnings in that period. The cash collateral held by counterparties to our derivative agreements is included in Other assets. Convertible Preferred Stock We evaluate convertible preferred stock that we issue and determine if the preferred stock should be accounted for as equity or as debt. We also determine if the conversion feature of the preferred stock must be separated from the host contract. We evaluate the change of control provisions to determine if they could result in a redemption not solely under Ocwen’s control, in which case the preferred stock would be classified as “mezzanine” equity rather than permanent equity as part of Stockholders’ equity. We also evaluate the conversion option of the preferred stock to determine if it represents a Beneficial Conversion Feature (BCF). If we determine that the conversion option is a BCF, we determine the intrinsic value of the BCF — the difference between the price of common stock on the issue date and the conversion price multiplied by the number of shares of common stock into which the preferred shares can be converted — and account for it as a discount on the preferred stock with an offsetting increase in additional paid in capital. We determine the period over which the discount is to be amortized and report the amortization as a deemed dividend. Stock-Based Compensation We measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. For equity awards with a service condition, we recognize the cost as compensation expense ratably over the vesting period. For equity awards with a market condition, we recognize the cost as compensation expense ratably over the expected life of the option that is derived from an options pricing model. When equity awards with a market condition meet their vesting requirements, any unrecognized compensation at the vesting date is recognized ratably over the vesting period. For equity awards with both a market condition and a service condition for vesting, we recognize cost as compensation expense over the requisite service period for each tranche of the award using the graded-vesting method. Income Taxes We file consolidated federal income tax returns. We allocate consolidated income tax among all subsidiaries included in the consolidated return as if each subsidiary filed a separate return or, in certain cases, a consolidated return. We account for income taxes using the asset and liability method, which requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Additionally, we adjust deferred taxes to reflect estimated tax rate changes. We conduct |
Securitizations and Variable In
Securitizations and Variable Interests Entities | 12 Months Ended |
Dec. 31, 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 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 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 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 years ended December 31: 2015 2014 2013 Proceeds received from securitizations $ 4,970,454 $ 5,265,183 $ 7,871,481 Servicing fees collected 29,239 25,438 20,333 Purchases of previously transferred assets, net of claims reimbursed (2,863 ) 4,973 (358 ) $ 4,996,830 $ 5,295,594 $ 7,891,456 In connection with these transfers, we retained MSRs of $36.0 million , $39.8 million and $74.8 million during 2015 , 2014 and 2013 , 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 December 31: 2015 2014 Carrying value of assets: Mortgage servicing rights, at amortized cost $ 54,729 $ 82,542 Mortgage servicing rights, at fair value 236 2,840 Advances and match funded advances 26,968 1,236 UPB of loans transferred 7,471,025 9,353,187 Maximum exposure to loss $ 7,552,958 $ 9,439,805 At December 31, 2015 and 2014 , 8.2% and 5.1% , respectively, of the transferred residential loans that we service were 60 days or more past due. During 2015 , there were $0.5 million charge-offs, net of recoveries, associated with these transferred loans related to our standard representations and warranties obligations. There were no such charge-offs in 2014. 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 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 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 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 Consolidated Statements of Cash Flows. Proceeds from securitizations of HECMs and payments on HMBS-related borrowings are included in financing activities in the Consolidated Statements of Cash Flows. At December 31, 2015 and 2014 , we had HMBS-related borrowings of $2.4 billion and $1.4 billion , respectively. HECMs pledged as collateral to the pools were $2.5 billion and $1.6 billion at December 31, 2015 and 2014 , 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 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 have recourse only to the assets of the SPE for satisfaction of the debt. 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 Consolidated Balance Sheets. |
Business Acquisitions
Business Acquisitions | 12 Months Ended |
Dec. 31, 2015 | |
Business Combinations [Abstract] | |
Business Acquisitions | Note 3 — Business Acquisitions During 2013 and 2014, we completed the acquisitions of Correspondent One S.A. (Correspondent One), Liberty and Ocwen Structured Investments, LLC (OSI) as well as the acquisition of certain assets and operations of Residential Capital, LLC (ResCap) as part of our strategy to expand our residential origination and servicing businesses. We accounted for these transactions using the acquisition method, which requires, among other things, that we recognize the assets acquired and liabilities assumed at their fair values as of the acquisition date. In a business combination, the initial allocation of the purchase price is considered preliminary and, therefore, subject to change until the end of the measurement period (up to one year from the acquisition date). Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the expected revenue and cost synergies of the combined business. The purchase price allocation provided below is based on an estimate of the fair value of the acquired advances, MSRs and the assumed liabilities in a manner consistent with our existing methodology for estimating fair value of similar assets and liabilities. Premises and equipment were initially valued based on the “in-use” valuation premise, where the fair value of an asset is based on the highest and best use of the asset that would provide maximum value to market participants principally through its use with other assets as a group. Other assets and liabilities expected to have a short life were valued at the face value of the specific assets and liabilities purchased, including receivables, prepaid expenses, accounts payable and accrued expenses. The pro forma consolidated results presented below are not indicative of what Ocwen’s consolidated net earnings would have been had we completed the acquisition on the date indicated because of differences in servicing practices and cost structure between Ocwen and the acquiree. In addition, the pro forma consolidated results do not purport to project our combined future results nor do they reflect the expected realization of any cost savings associated with the acquisition. The acquisitions of ResCap and Liberty were treated as asset acquisitions for U.S. tax purposes. We expect the opening tax basis for the acquired assets and liabilities to be the fair values as shown in the purchase price allocation table below. We expect MSRs and goodwill to be treated as intangible assets acquired in connection with the purchase of a trade or business and, as such, amortized over 15 years for tax purposes. ResCap Acquisition Purchase Price Allocation The following table summarizes the final fair values of assets acquired and liabilities assumed as part of the ResCap acquisition: Cash $ — MSRs (1) 401,314 Advances and match funded advances (1) 1,786,409 Premises and equipment 16,423 Receivables and other assets 2,989 Liability for indemnification obligations (49,500 ) Other liabilities (25,125 ) Total identifiable net assets 2,132,510 Goodwill 211,419 Total consideration $ 2,343,929 (1) As of the acquisition date, the purchase of certain MSRs from ResCap was not complete pending the receipt of certain consents and court approvals. Subsequent to the acquisition, we obtained the required consents and approvals for a portion of these MSRs and paid an additional purchase price of $174.6 million to acquire the MSRs and related advances, including $54.2 million in 2014. The purchase price allocation has been revised to include the resulting adjustments to MSRs, advances and goodwill. We completed the acquisition of ResCap on February 15, 2013 . We acquired MSRs related to conventional, government-insured and non-Agency residential forward mortgage loans with a UPB of $111.2 billion and master servicing agreements with a UPB of $44.9 billion . The ResCap Acquisition included advances and elements of the servicing platform related to the acquired MSRs, as well as certain diversified fee-based business operations that included recovery, title and closing services. We also assumed subservicing contracts with a UPB of $27.0 billion . Under the terms of the ResCap Acquisition, we were obligated to acquire certain servicing rights and subservicing agreements that were not settled as part of the initial closing on February 15, 2013 as a result of objections raised in connection with the sale. We subsequently purchased these MSRs and assumed the subservicing contracts from ResCap when such consents and approvals were obtained. We completed subsequent settlements and purchased additional MSRs, as objections were resolved. To finance the acquisition of ResCap, we deployed $840.0 million from the proceeds of a new $1.3 billion SSTL facility and borrowed an additional $1.2 billion pursuant to two new servicing advance facilities and one existing facility. We settled the subsequent closings with cash. Ocwen assumed certain limited liabilities as part of the transaction, including certain employee liabilities and certain business payables outstanding at the closing date. Under the agreement with ResCap, Ocwen generally did not assume any contingent obligations, including pending or threatened litigation, financial obligations in connection with any settlements, orders or similar agreements entered into by ResCap or obligations in connection with any representations or warranties associated with loans previously sold by ResCap except for litigation that may arise in the ordinary course of servicing mortgage loans relating to servicing agreements assumed by Ocwen. Ocwen assumed all liabilities related to servicing loans that are guaranteed by Ginnie Mae, whether arising prior to or after the closing date. On April 12, 2013, in connection with the sale to Altisource Portfolio Solutions, S.A. (Altisource) of the diversified fee-based business acquired in connection with the ResCap Acquisition, we received cash consideration from Altisource of $128.8 million . At the time of the closing, we derecognized goodwill of $128.8 million associated with the diversified fee-based business sold to Altisource. There were no other significant assets or liabilities associated with this business. Post-Acquisition Results of Operations The following table presents the revenues and earnings of the ResCap operations that are included in our Consolidated Statements of Operations from the acquisition date of February 15, 2013 through December 31, 2013: Revenues $ 684,935 Net income $ 16,424 Pro Forma Results of Operations The following table presents supplemental pro forma information for Ocwen for the year ended December 31, 2013 as if the ResCap Acquisition occurred on January 1, 2012. Pro forma adjustments include: • conforming servicing revenues to the revenue recognition policies followed by Ocwen; • conforming the accounting for MSRs to the valuation and amortization policies of Ocwen; • adjusting interest expense to eliminate the pre-acquisition interest expense of ResCap and to recognize interest expense as if the acquisition-related debt of Ocwen had been outstanding at January 1, 2012; and • reporting acquisition-related charges for professional services as if they had been incurred in 2012 rather than 2013. (Unaudited) Revenues $ 2,086,010 Net income $ 285,302 Through December 31, 2013, we incurred approximately $3.2 million of fees for professional services related to the ResCap Acquisition that are included in Operating expenses. Other Acquisitions Correspondent One On March 31, 2013, we increased our ownership in Correspondent One, an entity formed with Altisource in March 2011, from 49% to 100% . Correspondent One facilitated the purchase of conventional and government-insured residential mortgages from approved mortgage originators and resold the mortgages to secondary market investors. We acquired the shares of Correspondent One held by Altisource ( 49% interest) for $12.6 million and acquired the remaining shares held by an unrelated entity for $0.9 million . We accounted for this transaction as an acquisition and recognized the assets acquired and liabilities assumed at their fair values as of the acquisition date. The acquired net assets were $26.3 million and consisted primarily of cash ( $23.0 million ) and residential mortgage loans ( $1.1 million ). We remeasured our previously held investment, which we accounted for using the equity method, at fair value and recognized a loss of $0.4 million . We did not recognize goodwill in connection with this acquisition. Correspondent One is not material to our financial condition, results of operations or cash flows. Liberty On April 1, 2013 , we completed the acquisition of Liberty for $22.0 million in cash. In addition, and as part of the closing, Ocwen repaid Liberty’s $9.1 million existing outstanding debt to the sellers. Liberty is engaged in the origination, purchase, sale and securitization of reverse mortgage loans, both retail and wholesale. We acquired Liberty’s reverse mortgage origination platform, including reverse mortgage loans with a UPB of $55.2 million . The acquired net assets were $31.1 million and consisted primarily of residential reverse mortgage loans ( $60.0 million ), receivables ( $11.2 million ), loans held for investment ( $10.3 million ) and cash ( $4.6 million ) less amounts due under warehouse facilities ( $46.3 million ) and HMBS-related borrowings ( $10.2 million ). We recognized $3.0 million of goodwill in connection with this acquisition. The acquisition of Liberty did not have a material impact on our financial condition, results of operations or cash flows. OSI On January 31, 2014, we increased our ownership in OSI from 26.00% to 87.35% . OSI invests primarily in residential MSRs and the related lower tranches and residuals of mortgage-backed securities. We acquired the additional interest in OSI for $11.0 million . We accounted for this transaction as an acquisition and recognized 100% of the assets acquired and liabilities assumed at their fair values as of the acquisition date. We recognized in equity a noncontrolling interest at its proportionate 12.65% share of the net assets acquired. The acquired net assets were $20.0 million and consisted primarily of MSRs ( $9.0 million ), mortgage-backed securities ( $7.7 million ) and cash ( $3.2 million ). The acquisition of OSI did not have a material impact on our financial condition, results of operations or cash flows. Facility Closure Costs We have incurred employee termination benefits, primarily consisting of severance and Worker Adjustment and Retraining Notification Act compensation, lease termination costs for the closure of leased facilities and other contract termination costs in connection with our business acquisitions. Charges related to employee termination benefits, lease termination costs and other contract termination costs are reported in Compensation and benefits expense, Occupancy and equipment expense and Other operating expenses, respectively, in the Consolidated Statements of Operations. The liabilities are included in Other liabilities in the Consolidated Balance Sheets. The following table provides a reconciliation of the beginning and ending liability balances for these termination costs for the years ended December 31, 2013 , 2014 and 2015 : Employee termination benefits Lease and other contract termination costs Total Liability balance as at December 31, 2012 $ — $ 4,891 $ 4,891 Additions charged to operations Servicing 15,901 — 15,901 Lending 651 — 651 Corporate Items and Other 4,131 — 4,131 20,683 — 20,683 Amortization of discount — 347 347 Payments (15,867 ) (2,784 ) (18,651 ) Liability balance as at December 31, 2013 4,816 2,454 7,270 Additions charged to operations Servicing 14,032 713 14,745 Lending (114 ) — (114 ) Corporate Items and Other 1,271 2,184 3,455 15,189 2,897 18,086 Amortization of discount — 148 148 Payments (18,337 ) (3,260 ) (21,597 ) Liability balance as at December 31, 2014 1,668 2,239 3,907 Additions charged to operations Servicing 2,432 — 2,432 Lending — — — Corporate Items and Other 28 433 461 2,460 433 2,893 Amortization of discount — 159 159 Payments (3,415 ) (1,248 ) (4,663 ) Liability balance as at December 31, 2015 $ 713 $ 1,583 $ 2,296 We expect the remaining liability for employee termination benefits at December 31, 2015 to be settled in early 2016. |
Sales of Advances and MSRs
Sales of Advances and MSRs | 12 Months Ended |
Dec. 31, 2015 | |
Transfers and Servicing of Financial Assets [Abstract] | |
Sales of Advances and MSRs | Note 4 — Sales of Advances and MSRs In order to efficiently finance our assets, 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 the MSRs and advances sold during the years ended December 31: 2015 (1) 2014 (2) 2013 (3) Mortgage Servicing Rights Advances and Match Funded Advances Mortgage Servicing Rights Advances and Match Funded Advances Mortgage Servicing Rights Advances and Match Funded Advances Sales price of assets sold: Accounted for as a sale $ 775,351 $ 562,325 $ 287 $ 1,054 $ 34,754 $ 3,839,954 Accounted for as a financing — — 123,551 88,981 448,928 — 775,351 562,325 123,838 90,035 483,682 3,839,954 Amounts due from purchaser at December 31 (18,615 ) (76,014 ) — — — — Amounts paid to purchaser for estimated representation and warranty obligations, compensatory fees and related indemnification obligations (69,898 ) — — — — — Amounts received from (paid to) purchaser for items outstanding at the end of the previous year — — — — (1,173 ) 2,583 Total net cash received $ 686,838 $ 486,311 $ 123,838 $ 90,035 $ 482,509 $ 3,842,537 (1) In 2015, we sold Agency MSRs relating to loans with a UPB of $87.6 billion . (2) In 2014, we issued $123.6 million of OASIS Series 2014-1 Notes secured by Ocwen-owned MSRs relating to Freddie Mac mortgages of $11.8 billion UPB. (3) In 2013, we sold to Home Loan Servicing Solutions, Ltd. (HLSS) the Rights to MSRs relating to loans with a UPB of $119.7 billion for $417.2 million and sold the related servicing advances of $3.8 billion . On April 6, 2015, HLSS closed on the sale of substantially all of its assets to NRZ. References to NRZ in these 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. We refer to the sale of Rights to MSRs and the related servicing advances as the NRZ/HLSS Transactions. Pursuant to our agreements with NRZ, NRZ has assumed the obligation to fund new servicing advances with respect to the Rights to MSRs. We continue to service the loans for which the Rights to MSRs have been sold to NRZ. Accordingly, in the event NRZ were unable to fulfill its advance funding obligations, as the servicer under our servicing agreements with the residential mortgage backed securitization trusts, we would be contractually obligated to fund such advances under those servicing agreements. At December 31, 2015 , NRZ had outstanding advances of approximately $5.2 billion in connection with the Rights to MSRs. The servicing fees payable under the servicing agreements underlying the Rights to MSRs are apportioned between us and NRZ 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. Beginning April 7, 2017, we are obligated to transfer legal ownership of the MSRs to NRZ if and when NRZ obtains all required third-party consents and licenses. If and when such transfer of legal ownership occurs, OLS will subservice the loans pursuant to a subservicing agreement, as amended, with NRZ. NRZ has agreed not to direct our replacement as servicer before April 6, 2017 except under certain limited circumstances. To the extent servicing agreements underlying Rights to MSRs are terminated as a result of a termination event thereunder, NRZ is entitled to payment of an amount equal to an amortized percentage of NRZ’s purchase price for the related Rights to MSRs. We paid NRZ $2.2 million during 2015 in connection with the termination of four servicing agreements underlying the Rights to MSRs. In 2014, we paid $2.0 million as a result of the transfer of servicing to another party. Beginning April 7, 2017, if a termination event related to a servicer rating downgrade is existing under the Master Servicing Rights Purchase Agreement and Sale Supplements with NRZ, NRZ will have the right to direct the transfer of servicing with respect to an affected servicing agreement to a replacement servicer that obtains all required third-party consents and licenses. As of December 31, 2015, a termination event relating to a servicer rating downgrade exists because our servicer rating from S&P is below “Average.” If our servicer rating from S&P is not upgraded to “Average” or better prior to April 7, 2017, NRZ will have the right to direct the transfer of any affected servicing agreements to a successor servicer that obtains all required third-party consents and licenses. Following any such transfer, we would no longer be entitled to receive future servicing fee revenue with respect to the transferred servicing agreement. Our agreements with NRZ provide that, if S&P downgrades our servicer rating to below “Average” (which it has), we will compensate NRZ for certain increased costs associated with its servicing advance financing facilities, including increased costs of funding, to the extent such costs are the direct result of such downgrade. Any such compensation will continue for a maximum of 12 months and will not exceed $3.0 million for any calendar month or $36.0 million in the aggregate. In such circumstances, NRZ must use commercially reasonable efforts to assist us in curing any potential cost increases by obtaining amendments to the relevant financing agreements. We incurred $14.3 million through December 31, 2015 in connection with this agreement, and will continue to incur costs through June 2016. Actual future payments in connection with this agreement will vary based on NRZ's outstanding borrowings and movements in applicable floating interest rates. 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 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 the 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 (Financing liability - Advances pledged). |
Fair Value
Fair Value | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Note 5 — Fair Value Fair value is estimated based on a hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs. Observable inputs are inputs that reflect the assumptions that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The fair value hierarchy prioritizes the inputs to valuation techniques into three broad levels whereby the highest priority is given to Level 1 inputs and the lowest to Level 3 inputs. Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date. Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3: Unobservable inputs for the asset or liability. We classify assets in their entirety based on the lowest level of input that is significant to the fair value measurement. The carrying amounts and the estimated fair values of our financial instruments and 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 December 31: 2015 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 $ 309,054 $ 309,054 $ 401,120 $ 401,120 Loans held for sale, at lower of cost or fair value (b) 3 104,992 104,992 87,492 87,492 Total Loans held for sale $ 414,046 $ 414,046 $ 488,612 $ 488,612 Loans held for investment - Reverse mortgages, at fair value (a) 3 $ 2,488,253 $ 2,488,253 $ 1,550,141 $ 1,550,141 Advances and match funded advances (c) 3 2,151,066 2,151,066 3,303,356 3,303,356 Receivables, net (c) 3 286,981 286,981 270,596 270,596 Mortgage-backed securities, at fair value (a) 3 7,985 7,985 7,335 7,335 Financial liabilities: Match funded liabilities (c) 3 $ 1,584,049 $ 1,581,786 $ 2,090,247 $ 2,090,247 Financing liabilities: HMBS-related borrowings, at fair value (a) 3 $ 2,391,362 $ 2,391,362 $ 1,444,252 $ 1,444,252 Financing liability - MSRs pledged (a) 3 541,704 541,704 614,441 614,441 Other (c) 3 156,189 131,940 199,948 189,648 Total Financing liabilities $ 3,089,255 $ 3,065,006 $ 2,258,641 $ 2,248,341 Other secured borrowings: Senior secured term loan (c) 2 $ 397,103 $ 397,956 $ 1,273,219 $ 1,198,227 Other (c) 3 385,320 385,320 460,472 460,472 Total Other secured borrowings $ 782,423 $ 783,276 $ 1,733,691 $ 1,658,699 Senior unsecured notes (c) 2 $ 350,000 $ 318,063 $ 350,000 $ 321,563 Derivative financial instruments assets (liabilities) (a): Interest rate lock commitments 2 $ 6,080 $ 6,080 $ 6,065 $ 6,065 Forward mortgage-backed securities trades 1 295 295 (2,854 ) (2,854 ) Interest rate caps 3 2,042 2,042 567 567 Mortgage servicing rights: Mortgage servicing rights, at fair value (a) 3 $ 761,190 $ 761,190 $ 93,901 $ 93,901 Mortgage servicing rights, at amortized cost (c) (d) 3 377,379 461,555 1,820,091 2,237,703 Total Mortgage servicing rights $ 1,138,569 $ 1,222,745 $ 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 December 31, 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 December 31, 2015 was $146.5 million , net of a valuation allowance of $17.3 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: Year Ended December 31, 2015 Loans Held for Investment - Reverse Mortgages HMBS-Related Borrowings Mortgage-Backed Securities Financing Liability - MSRs Pledged Derivatives MSRs Total Beginning balance $ 1,550,141 $ (1,444,252 ) $ 7,335 $ (614,441 ) $ 567 $ 93,901 $ (406,749 ) Purchases, issuances, sales and settlements: Purchases — — — — 2,506 1,007 3,513 Issuances 1,008,065 (1,024,361 ) — — — (2,428 ) (18,724 ) Transfer from MSRs carried at amortized cost — — — — — 839,157 839,157 Sales — — — — — (72,274 ) (72,274 ) Settlements (1) (151,134 ) 153,016 — 72,737 346 — 74,965 856,931 (871,345 ) — 72,737 2,852 765,462 826,637 Total realized and unrealized gains and (losses) (2): Included in earnings 81,181 (75,765 ) 650 — (1,377 ) (98,173 ) (93,484 ) Included in Other comprehensive income — — — — — — — 81,181 (75,765 ) 650 — (1,377 ) (98,173 ) (93,484 ) Transfers in and / or out of Level 3 — — — — — — — Ending balance $ 2,488,253 $ (2,391,362 ) $ 7,985 $ (541,704 ) $ 2,042 $ 761,190 $ 326,404 Year Ended December 31, 2014 Loans Held for Investment - Reverse Mortgages HMBS-Related Borrowings Mortgage-Backed Securities Financing Liability - MSRs Pledged Derivatives MSRs Total Beginning balance $ 618,018 $ (615,576 ) $ — $ (633,804 ) $ 442 $ 116,029 $ (514,891 ) Purchases, issuances, sales and settlements: Purchases — — 7,677 — 787 — 8,464 Issuances 816,881 (783,009 ) — — — — 33,872 Transfer from Loans held for sale, at fair value 110,874 — — — 110,874 Sales — — — — — — — Settlements (99,923 ) 47,077 — 19,363 — — (33,483 ) 827,832 (735,932 ) 7,677 19,363 787 — 119,727 Total realized and unrealized gains and (losses): Included in earnings 104,291 (92,744 ) (342 ) — (662 ) (22,128 ) (11,585 ) Included in Other comprehensive income — — — — — — 104,291 (92,744 ) (342 ) — (662 ) (22,128 ) (11,585 ) Transfers in and / or out of Level 3 — — — — — — Ending balance $ 1,550,141 $ (1,444,252 ) $ 7,335 $ (614,441 ) $ 567 $ 93,901 $ (406,749 ) Year Ended December 31, 2013 Loans Held for Investment - Reverse Mortgages HMBS-Related Borrowings Financing Liability - MSRs Pledged Derivatives MSRs Total Beginning balance $ — $ — $ (303,705 ) $ (10,668 ) $ 85,213 $ (229,160 ) Purchases, issuances, sales and settlements: Purchases 10,251 (10,179 ) — 498 — 570 Issuances 609,555 (604,991 ) (417,167 ) — — (412,603 ) Sales — — — 24,156 — 24,156 Settlements (5,886 ) 5,440 87,068 (1,241 ) — 85,381 613,920 (609,730 ) (330,099 ) 23,413 — (302,496 ) Total realized and unrealized gains and (losses) (2): Included in earnings 4,098 (5,846 ) — 60 30,816 29,128 Included in Other comprehensive income — — — (12,363 ) — (12,363 ) 4,098 (5,846 ) — (12,303 ) 30,816 16,765 Transfers in and / or out of Level 3 — — — — — — Ending balance $ 618,018 $ (615,576 ) $ (633,804 ) $ 442 $ 116,029 $ (514,891 ) (1) Settlements of Financing liability - MSRs pledged for 2015 and 2014 include reimbursements of $2.2 million and $2.0 million , respectively, to NRZ related to servicing terminations. (2) Total losses attributable to derivative financial instruments still held at December 31, 2015 and 2014 were $1.0 million and $0.7 million for 2015 and 2014 , respectively. Total losses for 2015 attributable to MSRs still held at December 31, 2015 were $90.3 million . 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 December 31, 2015 valuation include: • Life in years ranging from 6.11 to 9.70 (weighted average of 6.49 ); • Conditional repayment rate ranging from 4.96% to 53.75% (weighted average of 19.85% ); and • Discount rate of 3.36% . 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 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 independent 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 December 31, 2015 valuation include: Weighted average prepayment speed 11.34 % Weighted average delinquency rate 13.27 % Advance financing cost 5-year swap Interest rate for computing float earnings 5-year swap Weighted average discount rate 9.41 % Weighted average cost to service (in dollars) $ 92 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 December 31, 2015 valuation include: Agency Non-Agency Weighted average prepayment speed 9.91 % 16.83 % Weighted average delinquency rate 0.82 % 27.99 % 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 % 15.03 % Weighted average cost to service (in dollars) $ 71 $ 321 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 (MBS) 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. Changes in the fair value of our investment in subordinate and residual securities are recognized in Other, net in the Consolidated Statements of Operations. 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 December 31, 2015 valuation include: • Life in years ranging from 4.73 to 9.70 (weighted average of 5.39 ); • Conditional repayment rate ranging from 4.96% to 53.75% (weighted average of 19.85% ); and • Discount rate of 2.78% . 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 Rights to MSRs and the related servicing advances. 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 (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. Because we have elected fair value for our portfolio of non-Agency 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 December 31, 2015 include: Weighted average prepayment speed 17.43 % Weighted average delinquency rate 29.83 % Advance financing cost 1 ML plus 3.5% Interest rate for computing float earnings 1ML Weighted average discount rate 14.92 % Weighted average cost to service (in dollars) $ 326 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 value 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 Interest rate lock commitments (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 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 obtain 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 exposure 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. |
Loans Held for Sale
Loans Held for Sale | 12 Months Ended |
Dec. 31, 2015 | |
Receivables [Abstract] | |
Loans Held for Sale | Note 6 — Loans Held for Sale Loans Held for Sale - Fair Value Loans held for sale, at fair value, represent residential 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 years ended December 31: 2015 2014 2013 Beginning balance $ 401,120 $ 503,753 $ 426,480 Originations and purchases 3,944,509 4,967,767 8,106,742 Proceeds from sales (4,061,217 ) (5,001,935 ) (7,999,235 ) Principal collections (8,647 ) (13,300 ) (653 ) Transfers to loans held for investment - reverse mortgages — (110,874 ) — Gain (loss) on sale of loans 42,053 49,533 (26,981 ) Other (1) (8,764 ) 6,176 (2,600 ) Ending balance $ 309,054 $ 401,120 $ 503,753 (1) Other includes the increase (decrease) in fair value of $(9.1) million , $6.2 million and $(3.7) million for 2015 , 2014 and 2013 , respectively. At December 31, 2015 , loans held for sale, at fair value, with a UPB of $290.0 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 years ended December 31: 2015 2014 2013 Beginning balance $ 87,492 $ 62,907 $ 82,866 Purchases 1,056,172 2,462,573 1,632,390 Proceeds from sales (1,001,939 ) (2,067,965 ) (1,036,316 ) Principal payments (53,400 ) (262,196 ) (432,423 ) Transfers to accounts receivable (53,468 ) (114,675 ) (218,629 ) Transfers to real estate owned (18,594 ) (8,808 ) (4,775 ) Gain on sale of loans 43,449 31,853 35,087 Decrease (increase) in valuation allowance 35,018 (18,965 ) (10,644 ) Other 10,262 2,768 15,351 Ending balance (1) (2) $ 104,992 $ 87,492 $ 62,907 (1) At December 31, 2015 , 2014 and 2013 , the balances include $85.9 million , $42.0 million and $43.1 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. (2) At December 31, 2015 , 2014 and 2013 , the balances are net of valuation allowances of $14.7 million , $49.7 million and $30.7 million , respectively. The decrease in the valuation allowance during 2015 includes $37.8 million resulting from the reversal of the allowance associated with loans that were sold during the year. The increase in the valuation allowance during 2014 and 2013 includes $20.4 million and $15.7 million , respectively, resulting from transfers of 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. At December 31, 2015 , loans held for sale, at lower of cost or fair value, with a UPB of $45.5 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 and related advances to a subsidiary of NRZ for $612.3 million ( $556.6 million for the loans and $55.7 million for the related servicing advances). We recognized a gain of $7.2 million on the sale of the loans. Following the initial transactions, we sold an additional $13.1 million of advances to a subsidiary of NRZ. We had recorded these advances in connection with the subsequent servicing of the sold 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 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. 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 years ended December 31: 2015 2014 2013 Gain on sales of loans $ 152,970 $ 168,449 $ 82,518 Change in fair value of IRLCs 14 (25,822 ) 523 Change in fair value of loans held for sale (8,525 ) 10,489 (1,709 ) Gain (loss) on economic hedge instruments (8,675 ) (17,214 ) 42,732 Other (815 ) (1,605 ) (2,370 ) $ 134,969 $ 134,297 $ 121,694 Gain on loans held for sale, net include $36.0 million , $39.8 million and $74.8 million for 2015 , 2014 and 2013 , respectively, representing the value assigned to MSRs retained on transfers of forward loans. Also included in Gains on loans held for sale, net are gains of $23.0 million , $54.7 million and $35.1 million recorded during 2015 , 2014 and 2013 , respectively, on sales of repurchased Ginnie Mae loans, which are carried at the lower of cost or fair value. Fair value gains recognized in connection with transfers of reverse mortgages into Ginnie Mae guaranteed securitizations are also included in Gains on loans held for sale, net and amounted to $112.6 million , $72.7 million and $41.7 million during 2015 , 2014 and 2013 , respectively. |
Advances
Advances | 12 Months Ended |
Dec. 31, 2015 | |
Advances [Abstract] | |
Advances | Note 7 — Advances Advances, net, which represent payments made on behalf of borrowers or on foreclosed properties, consisted of the following at December 31: 2015 2014 Servicing: Principal and interest $ 81,654 $ 128,217 Taxes and insurance 275,528 467,891 Foreclosures, bankruptcy and other 125,017 363,374 482,199 959,482 Corporate Items and Other 4,000 4,466 486,199 963,948 Allowance for losses (41,901 ) (70,034 ) $ 444,298 $ 893,914 Advances at December 31, 2015 include $86.4 million of remaining Ginnie Mae EBO advances, which did not qualify for sales accounting. The following table summarizes the activity in advances for the years ended December 31: 2015 2014 2013 Beginning balance $ 893,914 $ 890,832 $ 184,463 Acquisitions (1) — 99,319 733,438 Transfers to match funded advances — (10,156 ) (142,286 ) Sales of advances (2) (253,335 ) — (200,749 ) New advances (collections of advances), net and charge-offs (224,414 ) (54,424 ) 328,151 Decrease (increase) in allowance for losses (3) 28,133 (31,657 ) (12,185 ) Ending balance $ 444,298 $ 893,914 $ 890,832 (1) Servicing advances acquired through business acquisitions and asset acquisitions, primarily in connection with the acquisition of MSRs. Acquisitions in 2014 include advances acquired in connection with the purchase of loans through the Ginnie Mae EBO program. (2) Servicing advances sold in connection with sales of MSRs and Rights to MSRs, which met the requirements for sale accounting and which were derecognized from our financial statements at the time of the sale. However, advances sold during 2014 in connection with the sale of loans purchased through the Ginnie Mae EBO program did not qualify as sales for accounting purposes and were accounted for as a financing. (3) The decrease in the allowance for losses in 2015 includes $68.9 million of charge-offs. |
Match Funded Advances
Match Funded Advances | 12 Months Ended |
Dec. 31, 2015 | |
Transfers and Servicing [Abstract] | |
Match Funded Advances | Note 8 — Match Funded Advance s Match funded advances on residential loans we service for others are comprised of the following at December 31: 2015 2014 Principal and interest $ 948,376 $ 1,349,048 Taxes and insurance 608,404 847,064 Foreclosures, bankruptcy, real estate and other 149,988 213,330 $ 1,706,768 $ 2,409,442 The following table summarizes the activity in match funded advances for the years ended December 31: 2015 2014 2013 Beginning balance $ 2,409,442 $ 2,552,383 $ 3,049,244 Acquisitions (1) — 85,521 3,589,773 Transfers from advances (2) — 10,156 142,286 Sales of advances (308,990 ) — (3,639,205 ) Collections of pledged advances, net of new advances and other (393,684 ) (238,618 ) (589,715 ) Ending balance $ 1,706,768 $ 2,409,442 $ 2,552,383 (1) Servicing advances acquired through business acquisitions and asset acquisitions in connection with the acquisition of MSRs, that were pledged to advance facilities at the date of acquisition. (2) New servicing advances initially classified as Advances at the date of payment and subsequently pledged to advance financing facilities. |
Mortgage Servicing
Mortgage Servicing | 12 Months Ended |
Dec. 31, 2015 | |
Transfers and Servicing [Abstract] | |
Mortgage Servicing | Note 9 — Mortgage Servicing Mortgage Servicing Rights – Amortization Method Servicing Assets. The following table summarizes the activity in the carrying value of amortization method servicing assets for the years ended December 31. 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 2013 Beginning balance $ 1,820,091 $ 1,953,352 $ 678,937 Fair value election - transfer of MSRs carried at fair value (1) (787,142 ) — — Additions recognized in connection with business acquisitions : OSI — 9,008 — ResCap acquisition — 11,370 389,944 Liberty acquisition — — 2,840 Additions recognized in connection with asset acquisitions: Ally MSR transaction — — 683,787 OneWest MSR transaction — 14,408 398,804 Greenpoint MSR transaction — 3,690 33,647 Other 12,356 17,228 8,764 Additions recognized on the sale of mortgage loans 34,961 63,310 74,784 Sales (2) (586,352 ) (137 ) (28,403 ) Servicing transfers and adjustments — (1,763 ) (8,883 ) 493,914 2,070,466 2,234,221 (Increase) decrease in impairment valuation allowance (3) (17,341 ) — 2,375 Amortization (99,194 ) (250,375 ) (283,244 ) Ending balance $ 377,379 $ 1,820,091 $ 1,953,352 Estimated fair value at end of year $ 461,555 $ 2,237,703 $ 2,441,719 (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, based on a different strategy for managing the risks of the underlying portfolio compared to our other MSR classes. 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 $9.4 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 . (2) We retained the subservicing on MSRs that we sold in 2013. The gain on the sale of $5.1 million was deferred and is recognized in earnings over the life of the subservicing contract. (3) Impairment of MSRs is recognized in Servicing and origination expense in the Consolidated Statements of Operations. The estimated amortization expense for MSRs, calculated based on assumptions used at December 31, 2015 , is projected as follows over the next five years: 2016 $ 46,723 2017 36,427 2018 38,564 2019 38,773 2020 34,425 Servicing Liabilities. Servicing liabilities, if any, are included in Other liabilities. 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 years ended December 31: 2015 2014 2013 Agency Non-Agency Total Agency Agency Beginning balance $ 93,901 $ — $ 93,901 $ 116,029 $ 85,213 Fair value election - transfer of MSRs carried at amortized cost — 787,142 787,142 — — Cumulative effect of fair value election — 52,015 52,015 — — Sales (70,930 ) (1,344 ) (72,274 ) — — Additions recognized on the sale of residential mortgage loans — 1,007 1,007 — — Servicing transfers and adjustments — (2,428 ) (2,428 ) — — Changes in fair value (1): Changes in valuation inputs or other assumptions (639 ) 10,684 10,045 (15,028 ) 44,199 Realization of expected future cash flows and other changes (7,261 ) (100,957 ) (108,218 ) (7,100 ) (13,383 ) Ending balance $ 15,071 $ 746,119 $ 761,190 $ 93,901 $ 116,029 (1) Changes in fair value are recognized in Servicing and origination expense in the 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 a 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 December 31, 2015 given hypothetical shifts in lifetime prepayments and yield assumptions: Adverse change in fair value 10% 20% Weighted average prepayment speeds $ (65,518 ) $ (140,457 ) Discount rate (option-adjusted spread) $ (17,407 ) $ (34,492 ) The sensitivity analysis measures the potential impact on fair values based on hypothetical changes, which in the case of our portfolio at December 31, 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 servicing rights while subservicing represents all other loans. The UPB of assets serviced for others are not included on our Consolidated Balance Sheets. Residential Commercial Total UPB at December 31, 2015 Servicing $ 230,132,729 $ — $ 230,132,729 Subservicing 20,833,383 105,268 20,938,651 $ 250,966,112 $ 105,268 $ 251,071,380 UPB at December 31, 2014 Servicing $ 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 December 31, 2013 Servicing $ 397,546,635 $ — $ 397,546,635 Subservicing 67,104,697 400,502 67,505,199 $ 464,651,332 $ 400,502 $ 465,051,834 UPB serviced at December 31, 2015 , 2014 and 2013 includes $137.1 billion , $160.8 billion and $175.1 billion, 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 $1.8 billion , $2.3 billion and $2.6 billion at December 31, 2015 , 2014 and 2013 , 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. 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. To date, terminations as servicer as a result of a breach of any of these provisions have been minimal. Certain of our servicing agreements require that we maintain specified servicer ratings from rating agencies such as Moody’s Investors Service, Inc. (Moody’s) and S&P. Out of approximately 3,979 non-Agency servicing agreements, approximately 745 with approximately $40.1 billion of UPB as of December 31, 2015 have minimum servicer ratings criteria. As a result of downgrades in our servicer ratings, termination rights have been triggered in 664 of these non-Agency servicing agreements. This represents approximately $34.3 billion in UPB as of December 31, 2015 , or approximately 18.3% of our total non-Agency servicing portfolio. In early 2015, we received notices terminating us as the servicer under four of our non-Agency servicing agreements due to rating downgrades. Pursuant to our servicing agreements, generally we are entitled to payment of accrued and unpaid servicing fees through termination as well as all advances and certain other previously unreimbursed amounts, although we lose the future servicing fee revenue. While the financial impact of the termination of servicing under these four servicing agreements was immaterial to our overall financial condition, as it represented only 0.17% of our overall servicing portfolio as of the time of transfer of servicing, we could be subject to further terminations either as a result of recent servicer ratings downgrades or future adverse actions by ratings agencies, which could have an adverse effect on our business, financing activities, financial condition and results of operations. Downgrades in servicer ratings could adversely affect our ability to finance servicing advances and maintain our status as an approved servicer by Fannie Mae and Freddie Mac. The servicer rating requirements of Fannie Mae do not necessarily require or imply immediate action, as Fannie Mae has discretion with respect to whether we are in compliance with their requirements and what actions it deems appropriate under the circumstances in the event that we fall below their desired servicer ratings. At December 31, 2015 , the geographic distribution of the UPB and count of residential loans and real estate we serviced was as follows: Amount Count California $ 60,567,867 234,371 Florida 21,004,999 147,454 New York 20,735,251 86,951 New Jersey 11,495,328 55,175 Texas 11,393,316 127,397 Other 125,769,351 973,414 $ 250,966,112 1,624,762 Servicing Revenue The following table presents the components of servicing and subservicing fees for the years ended December 31: 2015 2014 2013 Loan servicing and subservicing fees: Servicing $ 1,148,278 $ 1,363,800 $ 1,246,882 Subservicing 58,384 128,797 146,605 1,206,662 1,492,597 1,393,487 Home Affordable Modification Program (HAMP) fees 135,036 141,121 152,812 Late charges 82,690 121,618 115,826 Loan collection fees 31,763 33,983 31,022 Custodial accounts (float earnings) 15,870 6,693 5,332 Other 59,776 98,163 125,080 $ 1,531,797 $ 1,894,175 $ 1,823,559 Float balances amounted to $2.2 billion , $3.4 billion and $3.2 billion at December 31, 2015 , 2014 and 2013 , respectively. |
Receivables
Receivables | 12 Months Ended |
Dec. 31, 2015 | |
Receivables [Abstract] | |
Receivables | Note 10 — Receivables Receivables consisted of the following at December 31: 2015 2014 Servicing: Amount due on sales of mortgage servicing rights and advances $ 94,629 $ — Government-insured loan claims (1) 71,405 52,955 Reimbursable expenses 29,856 32,387 Due from custodial accounts 13,800 11,627 Other servicing receivables 32,879 29,516 242,569 126,485 Income taxes receivable 53,519 68,322 Due from related parties (2) — 58,892 Other receivables (3) 29,818 43,690 325,906 297,389 Allowance for losses (1) (38,925 ) (26,793 ) $ 286,981 $ 270,596 (1) At December 31, 2015 and 2014 , the total allowance for losses 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 December 31, 2015 and 2014 were $20.6 million and $10.0 million , respectively. (2) 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. See Note 24 — Related Party Transactions for additional information. (3) At December 31, 2014, Other receivables includes $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. |
Premises and Equipment
Premises and Equipment | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Premises and Equipment | Note 11 — Premises and Equipment Premises and equipment are summarized as follows at December 31: 2015 2014 Computer hardware and software $ 68,228 $ 55,132 Leasehold improvements 23,326 28,549 Office equipment and other 11,761 13,268 Buildings 9,689 13,049 Furniture and fixtures 5,839 12,308 118,843 122,306 Less accumulated depreciation and amortization (61,217 ) (78,996 ) $ 57,626 $ 43,310 |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Note 12 — Goodwill During the fourth quarter of 2014, we determined that sufficient indicators of potential impairment existed to require an interim goodwill impairment analysis as of December 31, 2014. These indicators included significant declines in the market price of our common stock during the fourth quarter of 2014, including declines in reaction to the New York Department of Financial Services (NY DFS) settlement announced in December 2014, which included the resignation of our former Executive Chairman, and the California Department of Business Oversight (CA DBO) settlement announced in January 2015 that related to events in 2014. This reassessment resulted in the recognition of an impairment charge of $420.2 million in 2014, representing the entire balance of goodwill in our Servicing and Lending segments of $371.1 million and $49.1 million , respectively. In performing the two-step quantitative assessment, we first compared the fair value of each reporting unit with its net carrying value, including goodwill. Because the fair value of the reporting units exceeded their carrying value, it was necessary to perform the second step of the impairment test to measure the amount of impairment loss. In the second step, we compared the implied fair value of the reporting unit’s goodwill with the carrying value. Because the carrying amount of the goodwill exceeded the implied fair value for the reporting units, we recognized an impairment loss in an amount equal to that excess (up to the carrying value of goodwill). We determined the fair value of the reporting units based a combination of the income approach (discounted cash flow valuation methodology) and the market approach, and with the assistance of a third-party valuation firm. |
Other Assets
Other Assets | 12 Months Ended |
Dec. 31, 2015 | |
Other Assets [Abstract] | |
Other Assets | Note 13 — Other Assets Other assets consisted of the following at December 31: 2015 2014 Contingent loan repurchase asset (1) $ 346,984 $ 274,265 Debt service accounts (2) 87,328 91,974 Prepaid expenses (3) 69,805 17,957 Prepaid lender fees and debt issuance costs, net (4) 43,997 31,337 Real estate 20,489 16,720 Prepaid income taxes (5) 11,749 16,450 Mortgage-backed securities, at fair value 7,985 7,335 Derivatives, at fair value 6,367 6,065 Other 16,292 28,708 $ 610,996 $ 490,811 (1) In connection with the Ginnie Mae EBO program, 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 loans on our consolidated balance sheets 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 a 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. (3) In connection with the sale of Agency MSRs in 2015, we placed $52.9 million in escrow for the payment of representation, warranty and indemnification claims associated with the underlying loans serviced. Prepaid expenses at December 31, 2015 includes the remaining balance of $41.3 million . (4) We amortize these costs to the earlier of the scheduled amortization date, contractual maturity date or prepayment date of the debt. (5) The deferred tax effects of intra-entity transfers of MSRs have been recognized as prepaid income taxes and are being amortized to Income tax expense over a 7 -year period. |
Borrowings
Borrowings | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Borrowings | Note 14 — Borrowings Match Funded Liabilities Match funded liabilities are comprised of the following at December 31: Borrowing Type Interest Rate Maturity (1) Amortization Date (1) Available Borrowing Capacity (2) 2015 2014 Ocwen Freddie Servicer Advance Receivables Trust Series 2012-ADV1 (3) 1-Month LIBOR (1ML) (4) + 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 + 239 bps Oct. 2045 Oct. 2015 — — 519,634 Advance Receivables Backed Notes, Series 2013-VF2, Cost of Funds + 429 bps Oct. 2045 Oct. 2015 — — 32,919 Advance Receivables Backed Notes, Series 2014-VF3, 1ML + 235 bps (7) Sep. 2046 Sep. 2016 29,034 132,651 552,553 Advance Receivables Backed Notes - Series 2014-VF3, 1ML + 300 bps (7) Sep. 2046 Sep. 2016 1,294 6,330 — Advance Receivables Backed Notes - Series 2014-VF3, 1ML + 425 bps (7) Sep. 2046 Sep. 2016 1,458 6,977 — Advance Receivables Backed Notes - Series 2014-VF3, 1ML + 575 bps (7) Sep. 2046 Sep. 2016 3,829 18,427 — Borrowing Type Interest Rate Maturity (1) Amortization Date (1) Available Borrowing Capacity (2) 2015 2014 Advance Receivables Backed Notes - Series 2014-VF4, Class A (8) 1ML + 235 bps (8) Sep. 2046 Sep. 2016 29,034 132,651 552,553 Advance Receivables Backed Notes - Series 2014-VF4, Class B (8) 1ML + 300 bps (8) Sep. 2046 Sep. 2016 1,294 6,330 — Advance Receivables Backed Notes - Series 2014-VF4, Class C (8) 1ML + 425 bps (8) Sep. 2046 Sep. 2016 1,458 6,977 — Advance Receivables Backed Notes - Series 2014-VF4, Class D (8) 1ML + 575 bps (8) Sep. 2046 Sep. 2016 3,829 18,427 — Advance Receivables Backed Notes - Series 2015-VF5, Class A (9) 1ML + 235 bps (9) Sep. 2046 Sep. 2016 29,033 132,652 — Advance Receivables Backed Notes - Series 2015-VF5, Class B (9) 1ML + 300 bps (9) Sep. 2046 Sep. 2016 1,294 6,330 — Advance Receivables Backed Notes - Series 2015-VF5, Class C (9) 1ML + 425 bps (9) Sep. 2046 Sep. 2016 1,458 6,977 — Advance Receivables Backed Notes - Series 2015-VF5, Class D (9) 1ML + 575 bps (9) Sep. 2046 Sep. 2016 3,829 18,427 — 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 — Advance Receivables Backed Notes - Series 2015-T2, Class A (10) 2.5320% Nov. 2046 Nov. 2016 — 161,973 — Advance Receivables Backed Notes - Series 2015-T2, Class B (10) 3.3720% Nov. 2046 Nov. 2016 — 7,098 — Advance Receivables Backed Notes - Series 2015-T2, Class C (10) 3.7660% Nov. 2046 Nov. 2016 — 8,113 — Advance Receivables Backed Notes - Series 2015-T2, Class D (10) 4.2580% Nov. 2046 Nov. 2016 — 22,816 — Advance Receivables Backed Notes - Series 2015-T3, Class A (10) 3.2110% Nov. 2047 Nov. 2017 — 310,195 — Advance Receivables Backed Notes - Series 2015-T3, Class B (10) 3.7040% Nov. 2047 Nov. 2017 — 17,695 — Borrowing Type Interest Rate Maturity (1) Amortization Date (1) Available Borrowing Capacity (2) 2015 2014 Advance Receivables Backed Notes - Series 2015-T3, Class C (10) 4.1960% Nov. 2047 Nov. 2017 — 19,262 — Advance Receivables Backed Notes - Series 2015-T3, Class D (10) 4.6870% Nov. 2047 Nov. 2017 — 52,848 — Total Ocwen Master Advance Receivables Trust (OMART) 106,844 1,393,156 1,657,659 Advance Receivables Backed Notes, Series 2014-VF1, Cost of Funds + 265 bps Dec. 2046 Dec. 2016 14,350 31,343 21,192 Advance Receivables Backed Notes, Series 2014-VF1, Cost of Funds + 425 bps Dec. 2046 Dec. 2016 1,902 4,157 13,598 Advance Receivables Backed Notes, Series 2014-VF1, Cost of Funds + 465 bps Dec. 2046 Dec. 2016 2,096 4,564 10,224 Advance Receivables Backed Notes, Series 2014-VF1, Cost of Funds + 515 bps Dec. 2046 Dec. 2016 5,237 11,351 14,000 Total Ocwen Servicer Advance Receivables Trust III (OSARTIII) 23,585 51,415 59,014 Advance Receivables Backed Notes, Series 2015-VF1, 1ML + 212.5 bps Jun. 2046 Jun. 2016 8,584 112,882 — Advance Receivables Backed Notes, Series 2015-VF1, 1ML + 300 bps Jun. 2046 Jun. 2016 599 12,268 — Advance Receivables Backed Notes, Series 2015-VF1, 1ML + 350 bps Jun. 2046 Jun. 2016 649 5,951 — Advance Receivables Backed Notes, Series 2015-VF1, 1ML + 425 bps Jun. 2046 Jun. 2016 690 8,377 — Total Ocwen Freddie Advance Funding (OFAF) (12) 10,522 139,478 — $ 140,951 $ 1,584,049 $ 2,090,247 Weighted average interest rate 3.15 % 1.97 % (1) The amortization date of our facilities is the date on which the revolving period ends under each advance facility note and repayment of the outstanding balance must begin if the note is not renewed or extended. The maturity date is the date on which all outstanding balances must be repaid. In all 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 outstanding, and any new advances are ineligible to be financed. (2) Borrowing capacity is available to us provided that we have additional eligible collateral to pledge. Collateral may only be pledged to one facility. At December 31, 2015 , $24.5 million of the available borrowing capacity could be used based on the amount of eligible collateral that had been pledged. (3) We repaid this facility in full in June 2015 from the proceeds of the OFAF facility. (4) 1-Month LIBOR was 0.43% and 0.17% at December 31, 2015 and 2014 , respectively. (5) We voluntarily terminated this advance facility on January 30, 2015 . (6) The OMART Series 2013-VF2 Notes were repaid in full on September 18, 2015 . (7) On September 18, 2015, the Series 2014-VF3 Notes, Class B, C and D Notes, a series of variable funding notes under our OMART facility, were issued, and the existing Class A Note was canceled and a new Class A Note was issued. During 2015, we negotiated a series of reductions in the combined maximum borrowing capacity of the Series 2014-VF3 Notes from $600.0 million at December 31, 2014 to $200.0 million at December 31, 2015 . There is a ceiling of 75 bps for 1 ML in determining the interest rate for these 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. During 2015, we negotiated a series of reductions in the combined maximum borrowing capacity of the Series 2014-VF4 Notes from $600.0 million at December 31, 2014 to $200.0 million at December 31, 2015 . There is a ceiling 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. We negotiated a series of reductions in the combined maximum borrowing capacity of the Series 2015-VF5 Notes from $450.0 million at September 18, 2015 to $200.0 million at December 31, 2015 . There is a ceiling of 75 bps for 1 ML in determining the interest for variable rate Notes. (10) On November 13, 2015, we issued the Series 2015-T2 and Series 2015 T-3 Notes under our OMART facility. Under the terms of the agreement, we must continue to borrow the full amount of the Series 2015-T2 and T-3 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. (11) Beginning April 23, 2015, the maximum borrowing under the OSART III facility decreased by $6.3 million per month until it reduced to $75.0 million . On December 21, 2015, we renewed this facility for an additional year and maintained the maximum borrowing capacity. (12) We entered into OFAF facility on June 10, 2015, and issued the Series 2015-T1 and Series 2015-T2 Term Notes on June 26, 2015. The Series 2015-T2 Notes with a combined borrowing capacity of $155.0 million were fully repaid on September 15, 2015 , and the Series 2015-T1 Notes with a combined borrowing capacity of $70.0 million were fully repaid on November 16, 2015 . On November 20, 2015, the combined borrowing capacity of the Series 2015-VF1 Notes issued under this facility was reduced to $150.0 million . 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 December 31, 2015 , we were the servicer on Rights to MSRs sold to NRZ pertaining to approximately $137.1 billion in UPB and the associated outstanding servicing advances as of such date were approximately $5.2 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 of 2015, a purported owner of notes issued by one of NRZ’s advance financing facilities asserted 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. While we vigorously defended ourselves against these allegations, and the assertions were resolved with a finding that there was no event of default under the indenture, it is possible that claims alleging non-compliance with our contractual obligations under these facilities could be made in the future. Financing Liabilities Financing liabilities are comprised of the following at December 31: Borrowings Collateral Interest Rate Maturity 2015 2014 Servicing: Financing liability – MSRs pledged MSRs (1) (1) $ 541,704 $ 614,441 Secured Notes, Ocwen Asset Servicing Income Series, Series 2014-1 (2) MSRs (2) Feb. 2028 96,546 111,459 Financing liability – Advances pledged (3) Advances on loans (3) (3) 59,643 88,489 697,893 814,389 Lending: HMBS-related borrowings (4) Loans held for investment 1ML + 248 bps (4) 2,391,362 1,444,252 $ 3,089,255 $ 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 December 31: Borrowings Collateral Interest Rate Maturity Available Committed Borrowing Capacity 2015 2014 Servicing: SSTL (1) (1) 1-Month Euro-dollar rate + 425 bps with a Eurodollar floor of 125 bps Feb. 2018 $ — $ 398,454 $ 1,277,250 Repurchase agreement (2) Loans held for sale (LHFS) 1ML + 200 - 345 bps Sep. 2016 7,027 42,973 32,018 7,027 441,427 1,309,268 Borrowings Collateral Interest Rate Maturity Available Committed Borrowing Capacity 2015 2014 Lending: Master repurchase agreement (3) LHFS 1ML + 200 bps Aug. 2016 43,774 156,226 208,010 Participation agreement (4) LHFS N/A Apr. 2016 — 49,897 41,646 Participation agreement (5) LHFS N/A Apr. 2016 — 73,049 196 Master repurchase agreement (6) LHFS 1ML + 175 - 275 bps Jul. 2015 — — 102,073 Master repurchase agreement (7) LHFS 1ML + 275bps Jul. 2015 — — 52,678 Mortgage warehouse agreement (8) LHFS 1ML + 275 bps; floor of 350 bps May 2016 — 63,175 23,851 43,774 342,347 428,454 50,801 783,774 1,737,722 Discount (1) — (1,351 ) (4,031 ) $ 50,801 $ 782,423 $ 1,733,691 Weighted average interest rate 4.38 % 4.33 % (1) On February 15, 2013, we entered into a new SSTL facility agreement and borrowed $1.3 billion that was used principally to fund the ResCap Acquisition and repay the balance of the previous SSTL. The loan was issued with an original issue discount of $6.5 million that we are amortizing over the term of the loan. We are required to repay the principal amount of the borrowings in consecutive quarterly installments of $3.3 million . 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 3.25% and a base rate floor of 2.25% or (b) the one month Eurodollar rate , plus a margin of 4.25% and a one month Eurodollar floor of 1.25% . To date we have elected option (b) to determine the interest rate. 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: • waived, until the fiscal quarter ending June 30, 2017, the interest coverage ratio and corporate leverage ratio financial covenants; • established a process for designating foreign subsidiaries as subsidiary guarantors under the SSTL; • increased our capacity to make certain permitted investments under the investment covenant; • expanded our ability to exclude certain assets from the collateral securing the SSTL, to the extent necessary to meet regulatory minimum net worth requirements; • increased the applicable interest rate margin by 0.50% ; • required that we 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; • provided 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 • made certain conforming modifications as well as adjustments to definitions. (2) On September 20, 2015, this repurchase agreement was renewed through September 29, 2016. On November 20, 2015, the maximum borrowing under this facility was limited to the lesser of $100.0 million or $550.0 million less the lender’s current lending to Ocwen under advance funding facilities. Fifty percent of the maximum borrowing is available on a committed basis and fifty percent is available at the discretion of the lender. (3) On August 25, 2015, this repurchase agreement was renewed through August 23, 2016. Under this repurchase agreement, the lender provides financing on a committed basis for $200.0 million . (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. On March 10, 2015, the maturity date of this agreement was extended to April 30, 2016, and the maximum borrowing was reduced to $50.0 million . On April 16, 2015, the maximum borrowing capacity was increased to $100.0 million . (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. On March 10, 2015, the maturity date of this agreement was extended to April 30, 2016 . (6) On April 16, 2015 , this facility was voluntarily terminated. (7) This facility was voluntarily terminated on its maturity date. (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. 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. We received net proceeds of $343.3 million from the sale of the Senior Unsecured Notes after deducting underwriting fees and offering expenses. 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. At any time prior to May 15, 2016, Ocwen may redeem all or a part of the Senior Unsecured Notes, upon not less than 30 nor more than 60 days’ notice, at a redemption price equal to 100.0% of the principal amount of the Senior Unsecured Notes redeemed, plus the Applicable Premium as defined in the related indenture agreement (the Indenture), plus accrued and unpaid interest and Additional Interest as defined in the Indenture, if any, on the Senior Unsecured Notes redeemed. The Applicable Premium on a Note is the greater of 1% of the principal amount of the Note or the redemption price at May 15, 2016 plus all interest due from the redemption date through May 15, 2016, less the principal amount of the Note. On or after May 15, 2016, Ocwen may redeem all or a part of the Senior Unsecured Notes, upon not less than 30 nor more than 60 days’ notice, at the redemption prices (expressed as percentages of principal amount) specified in the Indenture plus accrued and unpaid interest and Additional Interest, if any. The redemption prices during the twelve-month periods beginning on May 15 th of each year are as follows: Year Redemption Price 2016 104.969% 2017 103.313% 2018 and thereafter 100.000% At any time prior to May 15, 2016, Ocwen may, at its option, use the net cash proceeds of one or more Equity Offerings as defined in the Indenture to redeem up to 35% of the principal amount of all Senior Unsecured Notes issued at a redemption price equal to 106.625% of the principal amount of the Senior Unsecured Notes redeemed plus accrued and unpaid interest and Additional Interest, if any, provided that: (i) at least 65% of the principal amount of all Senior Unsecured Notes issued under the Indenture remains outstanding immediately after any such redemption; and (ii) Ocwen makes such redemption not more than 120 days after the consummation of any such Equity Offering. Upon the occurrence of a change of control as defined in the Indenture, Ocwen is required to make an offer to the holders of the Senior Unsecured Notes to repurchase the Senior Unsecured Notes at a purchase price equal to 101.0% of the principal amount of the Senior Unsecured Notes purchased plus accrued and unpaid interest and Additional Interest, if any. Each holder will have the right to require that the Ocwen purchase all or a portion of the holder’s Senior Unsecured Notes pursuant to the offer. The Indenture contains various covenants that could, unless certain conditions are met, limit or restrict the ability of Ocwen and its subsidiaries to engage in specified types of transactions. Among other things, these covenants could potentially limit or restrict the ability of Ocwen and its subsidiaries to: • incur additional debt or issue preferred stock; • pay dividends or make distributions on or purchase equity interests of Ocwen; • repurchase or redeem debt that is subordinate to the Senior Unsecured Notes prior to maturity; • make investments or other restricted payments; • create liens on assets to secure debt of Ocwen or any guarantor of the Senior Unsecured Notes; • sell or transfer assets; • enter into transactions with “affiliates” (any entity that controls, is controlled by or is under common control with Ocwen or certain of its subsidiaries); and • enter into mergers, consolidations, or sales of all or substantially all of Ocwen’s assets. Many of the restrictive covenants will be suspended if the Senior Unsecured Notes achieve an investment grade rating from both Moody’s and S&P and no default or event of default, as specified in the Indenture, has occurred and is continuing. However, covenants that are suspended as a result of achieving these ratings will again apply if Moody’s or S&P withdraws its investment grade rating or downgrades the rating assigned to the Senior Unsecured Notes below an investment grade rating. 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 paid additional interest on the principal amount of the Senior Unsecured Notes (an additional 0.25% per annum for each 90 -day period) until the exchange offer closed on December 11, 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 $4.5 million and $5.8 million at December 31, 2015 and 2014 , respectively. 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 consolidated total debt to consolidated tangible net worth ratio, as defined under our SSTL; • 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, in each case, as define in the applicable debt agreement. 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 waived until the fiscal quarter ending June 30, 2017. As of December 31, 2015 , the most restrictive consolidated tangible net worth requirement was for a minimum of $1.1 billion at OLS under our Servicing match funded debt agreements and 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. Maturities of Borrowings Aggregate long-term borrowings by maturity date at December 31, 2015 are as follows: Expected Maturity Date (1) (2) 2016 2017 2018 2019 2020 There- after Total Fair Match funded liabilities $ 1,184,049 $ 400,000 $ — $ — $ — $ — $ 1,584,049 $ 1,581,786 Other secured borrowings 397,660 12,361 372,402 — — — 782,423 783,276 Senior unsecured notes — — — 350,000 — — 350,000 318,063 $ 1,581,709 $ 412,361 $ 372,402 $ 350,000 $ — $ — $ 2,716,472 $ 2,683,125 (1) For match funded liabilities, the expected maturity date is the date on which the revolving period ends for each advance financing facility note and repayment of the outstanding balance must begin if the note is not renewed or extended. (2) Excludes financing liabilities, which we recognized in connection with asset sales transactions that we accounted for as financings. Financing liabilities include $541.7 million recorded in connection with sales of MSRs and Rights to MSRs and $2.4 billion recorded in connection with the securitizations of HMBS. The MSR-related financing liabilities have no contractual maturity and are amortized over the life of the transferred Rights to MSRs. The HMBS-related financing liabilities have no contractual maturity and are amortized as the related loans are repaid. |
Other Liabilities
Other Liabilities | 12 Months Ended |
Dec. 31, 2015 | |
Other Liabilities Disclosure [Abstract] | |
Other Liabilities | Note 15 — Other Liabilities Other liabilities were comprised of the following at December 31: 2015 2014 Contingent loan repurchase liability (1) $ 346,984 $ 274,265 Accrued expenses 188,856 142,592 Liability for uncertain tax positions 44,751 28,436 Liability for indemnification obligations 36,615 132,918 Payable to servicing and subservicing investors (2) 15,941 67,722 Due to related parties (3) — 55,585 Checks held for escheat 14,301 18,513 Other 96,996 73,503 $ 744,444 $ 793,534 (1) In connection with the Ginnie Mae EBO program, 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) The balance represents amounts due to investors in connection with loans we service under servicing and subservicing agreements. (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. See Note 24 — Related Party Transactions for additional information. |
Equity
Equity | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
Equity | Note 16 — Equity Common Stock On September 23, 2013, Ocwen paid $157.9 million to repurchase from the holders of our convertible preferred stock all 3,145,640 shares of Ocwen common stock that were issued upon their election to convert 100,000 of the preferred shares into shares of common stock. On July 14, 2014, Ocwen paid $72.3 million to repurchase all 1,950,296 shares of common stock that were issued upon conversion of the remaining 62,000 preferred shares. On October 31, 2013 , we announced that Ocwen’s Board of Directors had authorized a share repurchase program for an aggregate of up to $500.0 million of Ocwen’s issued and outstanding shares of common stock. Repurchases may be made in open market transactions at prevailing market prices or in privately negotiated transactions. Unless we amend the share repurchase program or repurchase the full $500.0 million amount by an earlier date, the share repurchase program will continue through July 31, 2016. No assurances can be given as to the amount of shares, if any, that we may repurchase in any given period. The repurchase of shares issued in connection with the conversion of preferred stock is not considered to be part of this repurchase program and, therefore, does not count against the $500.0 million aggregate value limit. During 2015 , we completed the repurchase of 625,705 shares of common stock in the open market under this program for a total purchase price of $4.1 million . From inception of this program through December 31, 2015 , we completed the repurchase of 12,171,808 shares for an aggregate purchase price of $374.4 million . Preferred Stock On December 27, 2012, Ocwen issued 162,000 shares of Series A Perpetual Convertible Preferred Stock, having a par value of $0.01 per share as part of the consideration paid to acquire Homeward. Holders of the preferred stock were entitled to receive mandatory and cumulative dividends payable quarterly at the rate per share equal to the greater of (i) 3.75% per annum multiplied by $1,000 per share and (ii) in the event Ocwen pays a regular quarterly dividend on its common stock in such quarter, the rate per share payable in respect of such quarterly dividend on an as-converted basis. Each preferred share, together with any accrued and unpaid dividends, was convertible to common stock at the option of the holder at a conversion price equal to $31.79 . On September 23, 2013, holders elected to convert 100,000 of the preferred shares into 3,145,640 shares of common stock. On July 14, 2014, holders elected to convert the remaining 62,000 shares into 1,950,296 shares of common stock. Prior to conversion, we classified the preferred stock as “mezzanine” equity in our Consolidated Balance Sheets rather than permanent equity as part of Stockholders’ equity and reported it net of the BCF discount. We reported amortization of the BCF discount as a deemed dividend in our Consolidated Statements of Operations. Accumulated Other Comprehensive Loss The components of accumulated other comprehensive loss (AOCL), net of income taxes, were as follows at December 31: 2015 2014 Unrealized losses on cash flow hedges $ 1,641 $ 8,291 Other 122 122 $ 1,763 $ 8,413 |
Derivative Financial Instrument
Derivative Financial Instruments and Hedging Activities | 12 Months Ended |
Dec. 31, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments and Hedging Activities | Note 17 — 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 manage counterparty credit risk by entering into financial instrument transactions through national exchanges, primary dealers or approved counterparties and the use of mutual margining agreements whenever possible to limit potential exposure. We regularly evaluate the financial position and creditworthiness of our counterparties. 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 year ended December 31, 2015 : IRLCs Forward MBS Trades Interest Rate Caps Interest Rate Swaps Beginning notional balance $ 239,406 $ 703,725 $ 1,729,000 $ — Additions 5,293,280 7,887,651 2,261,000 450,000 Amortization — — (1,880,000 ) — Maturities (4,773,676 ) (4,371,218 ) — — Terminations (480,693 ) (3,587,438 ) — (450,000 ) Ending notional balance $ 278,317 $ 632,720 $ 2,110,000 $ — Fair value of derivative assets (liabilities) at: December 31, 2015 $ 6,080 $ 295 $ 2,042 $ — December 31, 2014 $ 6,065 $ (2,854 ) $ 567 $ — Maturity Dec. 2015 - Mar. 2016 Feb. 2016 - Mar 2016 Nov. 2016 - Dec. 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 originations and commitments and expected time to sell. Foreign Currency Exchange Rate Risk Management Our operations in India and the Philippines also expose us to foreign currency exchange rate risk, but we currently consider this risk to be insignificant. Interest Rate Management Match Funded Liabilities As required by certain of our advance financing arrangements, we have purchased interest rate caps to minimize future interest rate exposure from increases in the interest on our variable rate debt as a result of increases in the index, such as 1ML, that is used in determining the interest rate on the debt. We currently do not hedge our fixed rate debt. 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 December 31, 2015 and the gains (losses) on all derivatives used in each of the identified economic hedging programs for the year then ended. None of the derivatives was designated as a hedge for accounting purposes at December 31, 2015 : Purpose Expiration Date Notional Amount Asset (Liability) at Fair Value (1) Gains (Losses) Consolidated Statement of Operations Caption Interest rate risk of borrowings Interest rate caps (2) Nov. 2016 - Dec. 2017 $ 2,110,000 $ 2,042 $ (1,377 ) Other, net Interest rate risk of mortgage loans held for sale and of IRLCs Forward MBS trades Feb. 2016 - Mar 2016 632,720 295 (8,675 ) Gain on loans held for sale, net IRLCs Dec. 2015 - Mar. 2016 278,317 6,080 14 Gain on loans held for sale, net Total derivatives $ 8,417 $ (10,038 ) (1) Derivatives are reported at fair value in Receivables, Other assets or in Other liabilities on our Consolidated Balance Sheets. (2) To hedge the effect of increases in the interest on our variable rate debt as a result of increases in the index, such as 1ML, that is used in determining the interest rate on our variable rate advance funding facilities. Included in AOCL at December 31, 2015 and 2014 , respectively, were $1.7 million and $8.8 million of deferred unrealized losses, before taxes of $0.1 million and $0.5 million , respectively, on interest rate swaps that we had designated as cash flow hedges. Changes in AOCL during the years ended December 31 were as follows: 2015 2014 2013 Beginning balance $ 8,413 $ 10,151 $ 6,441 Additional net losses on cash flow hedges — — 12,363 Ineffectiveness of cash flow hedges reclassified to earnings — — (657 ) Losses on terminated hedging relationships amortized to earnings (7,042 ) (1,982 ) (10,816 ) Net (decrease) increase in accumulated losses on cash flow hedges (7,042 ) (1,982 ) 890 Decrease in deferred taxes on accumulated losses on cash flow hedges 392 248 2,825 (Decrease) increase in accumulated losses on cash flow hedges, net of taxes (6,650 ) (1,734 ) 3,715 Other, net of taxes — (4 ) (5 ) Ending balance $ 1,763 $ 8,413 $ 10,151 As of December 31, 2015 , amortization of accumulated losses on cash flow hedges from AOCL to Other income (expense), net is projected to be $0.2 million during 2016 . 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 will be recognized in earnings at that time. Other income (expense), net, includes the following related to derivative financial instruments for the years ended December 31: 2015 2014 2013 Losses on economic hedges (1,377 ) (661 ) (2,861 ) Ineffectiveness of cash flow hedges — — (657 ) Write-off of losses in AOCL for a discontinued hedge relationship (1) (7,042 ) (1,982 ) (10,816 ) $ (8,419 ) $ (2,643 ) $ (14,334 ) (1) Includes: (a) the accelerated write-off in 2015 of deferred losses on a swap, that had been designated for accounting purposes as a hedge of the purchase price of an MSR acquisition, when we sold a portion of the related MSRs; and (b) the write-off in 2013 of the remaining unamortized losses on a swap, that had been designated as a hedge for accounting purposes, when the borrowings under the related advance financing facility were repaid in full and the facility was terminated. |
Interest Income
Interest Income | 12 Months Ended |
Dec. 31, 2015 | |
Other Income and Expenses [Abstract] | |
Interest Income | Note 18 — Interest Income The following table presents the components of interest income for the years ended December 31: 2015 2014 2013 Loans held for sale $ 16,167 $ 20,299 $ 18,563 Other 2,153 2,692 3,792 $ 18,320 $ 22,991 $ 22,355 Interest income that we expect to be collected on Loans Held for Investment - Reverse Mortgages, or HECMs, is included with net fair value gains in Other revenues. |
Interest Expense
Interest Expense | 12 Months Ended |
Dec. 31, 2015 | |
Other Income and Expenses [Abstract] | |
Interest Expense | Note 19 — Interest Expense The following table presents the components of interest expense for the years ended December 31: 2015 2014 2013 Financing liabilities (1) (2) $ 292,306 $ 371,852 $ 228,985 Other secured borrowings 91,391 82,837 81,851 Match funded liabilities 65,248 61,576 75,979 6.625% Senior Unsecured Notes 26,259 15,595 — Other 7,169 9,897 8,771 $ 482,373 $ 541,757 $ 395,586 (1) Includes interest expense related to financing liabilities recorded in connection with the NRZ/HLSS Transactions as indicated in the table below: 2015 2014 2013 Servicing fees collected on behalf of NRZ/HLSS $ 694,833 $ 736,122 $ 633,377 Less: Servicing fee retained by Ocwen 355,527 358,053 317,723 Net servicing fees remitted to NRZ/HLSS 339,306 378,069 315,654 Less: Reduction in financing liability 70,513 17,374 87,068 Interest expense on NRZ/HLSS financing liability $ 268,793 $ 360,695 $ 228,586 The reduction in the financing liability for 2015 and 2014 does not include reimbursements to NRZ/HLSS for the loss of servicing revenues when we were terminated as servicer and where the related Rights to MSRs had been sold to HLSS. (2) Includes $14.3 million of fees incurred in 2015 in connection with our agreement to compensate NRZ/HLSS 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. Interest expense that we expect to be paid on the HMBS-related borrowings is included with net fair value gains in Other revenues. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 20 — Income Taxes For income tax purposes, the components of income (loss) before taxes were as follows for the years ended December 31: 2015 2014 2013 Domestic $ (62,903 ) $ (401,741 ) $ 76,957 Foreign (66,958 ) (41,418 ) 275,522 $ (129,861 ) $ (443,159 ) $ 352,479 The components of income tax expense (benefit) were as follows for the years ended December 31: 2015 2014 2013 Current: Federal $ 46,680 $ (20,824 ) $ 58,507 State 1,079 (403 ) 14,691 Foreign 161 9,195 15,545 47,920 (12,032 ) 88,743 Deferred: Federal (27,173 ) 41,986 (53,711 ) State (3,719 ) (997 ) (4,325 ) Foreign 2,754 (6,162 ) (4,410 ) Provision for valuation allowance on deferred tax assets 97,069 3,601 15,764 68,931 38,428 (46,682 ) Total $ 116,851 $ 26,396 $ 42,061 Income tax expense differs from the amounts computed by applying the U.S. Federal corporate income tax rate of 35% as follows for the years ended December 31: 2015 2014 2013 Expected income tax expense (benefit) at statutory rate $ (45,451 ) $ (155,106 ) $ 123,368 Differences between expected and actual income tax expense: Impairment of goodwill — 92,034 — State tax, after Federal tax benefit (2,867 ) (1,084 ) 5,639 Provision for liability for uncertain tax positions 18,205 47 4,935 Provision for liability for intra-entity transactions 4,700 6,037 7,283 Non-deductible regulatory settlements 700 53,375 — Other permanent differences (463 ) (254 ) (636 ) Foreign tax differential 41,695 27,799 (112,997 ) Provision for valuation allowance on deferred tax assets (1) 97,069 3,601 15,764 Other 3,263 (53 ) (1,295 ) Actual income tax expense $ 116,851 $ 26,396 $ 42,061 (1) The provision for valuation allowance in 2015 primarily relates to the recording of the valuation allowance on both the U.S. and USVI net deferred tax assets as of December 31, 2015. Also included in the provision for valuation allowance is the reversal of a portion of the valuation allowance previously recorded on taxable losses earned by OMS which were taxable in the U.S. as effectively connected income (ECI), which is equal to the positive taxable income that is expected to be generated for ECI purposes for the year ended December 31, 2015. We are a global company with operations in the USVI, India and the Philippines, among other jurisdictions. In the effective tax rate reconciliation, we first calculate income tax expense attributable to worldwide continuing operations at the U.S. statutory tax rate of 35%. The foreign tax rate differential therefore represents the difference in tax expense between jurisdictional income taxed at the U.S. statutory rate of 35% and each respective jurisdictional statutory rate. As the U.S. tax rate is among the highest global tax rates and a majority of our income is subject to tax in the USVI at a significantly lower tax rate, the foreign tax rate differential component of our effective tax rate reconciliation is often the most significant adjusting item to our global rate. Net deferred tax assets were comprised of the following at December 31: 2015 2014 Deferred tax assets: Net operating loss carryforward $ 24,511 $ 35,433 Mortgage servicing rights amortization 15,697 — Accrued legal settlements 10,519 7,403 Intangible asset amortization 10,293 10,741 Partnership losses 10,137 10,663 Accrued incentive compensation 10,107 5,029 Bad debt and allowance for loan losses 6,227 10,727 Accrued other liabilities 5,641 6,271 Stock-based compensation expense 4,834 3,431 Tax residuals and deferred income on tax residuals 4,052 4,021 Foreign deferred assets 3,647 2,568 Reserve for servicing exposure 3,353 7,093 Delinquent servicing fees 2,360 3,591 Capital losses 1,710 1,464 Accrued lease termination costs 1,251 1,831 Valuation allowance on real estate 736 1,007 Interest rate swaps 103 494 Other 4,966 5,606 120,144 117,373 Deferred tax liabilities: Foreign undistributed earnings 5,421 6,249 Mortgage servicing rights amortization — 14,696 Other 77 76 5,498 21,021 114,646 96,352 Valuation allowance (116,434 ) (19,365 ) Deferred tax assets (liabilities), net $ (1,788 ) $ 76,987 We conduct periodic evaluations of positive and negative evidence to determine whether it is more likely than not that the deferred tax asset can be realized in future periods. In these evaluations, we gave more significant weight to objective evidence, such as our actual financial condition and historical results of operations, as compared to subjective evidence, such as projections of future taxable income or losses. We are diversifying our strategic focus due to both regulatory and market-based factors affecting the Servicing business, and we believe our residential lending business and other new business lines will be our primary driver of growth for the future. Despite having cumulative income incurred over the three-year period ended December 31, 2015 for the USVI filing jurisdiction, the significant driver of this cumulative income position is the positive income earned during 2013 when our business was growing rapidly through acquisitions of MSRs and our lending operations were comparatively less important to our overall business. There has also been a significant increase in monitoring costs required by regulators that has been a key factor impacting our Servicing business profitability. As a result, we are seeking to transform Ocwen over time by reinvesting cash flows generated by the Servicing business to grow not only our residential mortgage lending business but also to grow other new business lines, which we believe can diversify our income profile and assist us in returning Ocwen to profitability. Accordingly, we do not believe that our historical USVI-sourced profitability is as indicative of our ability to generate income in future years as it was previously. Additionally, the U.S. jurisdiction is in a three-year cumulative loss as of December 31, 2015 due to poor operating results for the current period in addition to the significant goodwill impairment and NY DFS settlement from the prior year. Other factors considered in these evaluations are estimates of future taxable income, future reversals of temporary differences, tax character and the impact of tax planning strategies that may be implemented, if warranted. As a result of these evaluations, as of December 31, 2015, we have recorded a full valuation allowance for the $84.5 million of U.S. net deferred tax assets and for the $17.4 million of USVI net deferred tax assets as these jurisdictional deferred tax assets are not considered to be more likely than not realizable based on all available positive and negative evidence. We intend to continue maintaining a full valuation allowance on our deferred tax assets in both the U.S. and USVI until there is sufficient evidence to support the reversal of all or some portion of these allowances. We recognized total interest and penalties of $6.3 million , $2.3 million and $2.0 million in 2015 , 2014 and 2013 , respectively. At December 31, 2015 and 2014 , accruals for interest and penalties were $12.2 million and $5.9 million , respectively. As of December 31, 2015 and 2014 , we had a liability for uncertain tax positions of $32.5 million and $22.5 million , respectively, all of which if recognized would affect the effective tax rate. It is reasonably possible that there could be a change in the amount of our unrecognized tax benefits within the next 12 months due to activities of the Internal Revenue Service or other taxing authorities, including proposed assessments of additional tax, possible settlement of audit issues, or the expiration of applicable statutes of limitations. The range of the possible change in unrecognized tax benefits within the next 12 months cannot be reasonably estimated at December 31, 2015 . Our major jurisdiction tax years that remain subject to examination are our U.S. federal tax return for the years ended December 31, 2008 through December 31, 2010 and December 31, 2012 through the present, our USVI corporate tax return for the years ended December 31, 2012 through the present and our India corporate tax returns for the years ended March 31, 2005 through the present. Our U.S. federal tax return for the years ended December 31, 2008 , 2009 , 2010 and 2012 are currently under examination. In addition, the U.S. federal tax return filed by our USVI subsidiary for the year ended December 31, 2012 is currently under examination. A reconciliation of the beginning and ending amount of the total liability for uncertain tax positions is as follows for the years ended December 31: 2015 2014 2013 Beginning balance $ 22,523 $ 27,273 $ 22,702 Additions for tax positions of prior years 13,162 1,392 4,944 Reductions for tax positions of prior years (2,741 ) (6,010 ) — Lapses in statute of limitations (396 ) (132 ) (373 ) Ending balance $ 32,548 $ 22,523 $ 27,273 At December 31, 2015 , we had U.S. NOL carryforwards and USVI NOL carryforwards of $68.4 million and $199.0 million . These carryforwards will expire beginning 2019 through 2034. We believe that it is more likely than not that the benefit from certain U.S. NOL carryforwards will not be realized. In recognition of this risk, we have provided a total valuation allowance of $23.9 million on the deferred tax assets relating to these U.S. NOL carryforwards. If our assumptions change and we determine we will be able to realize these NOLs, the tax benefits relating to any reversal of the valuation allowance on deferred tax assets as of December 31, 2015 will be accounted for as a reduction of income tax expense. Additionally, it is our expectation that $199.0 million of USVI NOLs will be carried back to offset prior period tax due in the USVI and we have, therefore, reflected the tax-effect of this attribute as a component of income taxes receivable. Note that we also have USVI capital loss carryforwards of $23.5 million at December 31, 2015 against which a valuation allowance has been recorded. As of December 31, 2015 , we have recognized a deferred tax liability of $5.4 million for India and Philippines subsidiary undistributed earnings of $35.4 million . With the exception of the India and Philippines subsidiary earnings, we consider the remainder of our foreign subsidiary undistributed earnings to be indefinitely invested outside the U.S. based on our specific plans for reinvestment. As of December 31, 2015 , our foreign subsidiaries have approximately $241.4 million of undistributed earnings and $221.8 million of cash and short-term investments. Should we decide to repatriate the foreign earnings, we would need to adjust our income tax provision in the period we determined that the earnings will no longer be indefinitely reinvested. Determination of the amount of unrecognized deferred tax liability is not practicable. OMS is headquartered in Frederiksted, St. Croix, USVI and is located in a federally recognized economic development zone where qualified entities are eligible for certain benefits. We refer to these benefits as “EDC benefits” as they are granted by the USVI Economic Development Commission. We were approved as a Category IIA service business, and are therefore entitled to receive benefits that may have a favorable impact on our effective tax rate. These benefits, among others, enable us to avail ourselves of a credit of 90% of income taxes on certain qualified income related to our servicing business. The exemption was granted as of October 1, 2012 and is available for a period of 30 years until expiration on September 30, 2042. The impact of these EDC benefits decreased our current foreign tax benefit by $68.2 million related to 2015 USVI losses, and decreased our foreign tax expense by $61.2 million and $109.1 million related to 2014 and 2013 USVI income, respectively. The benefit (detriment) of these EDC benefits on diluted earnings per share was $(0.54) , $0.47 and $0.78 for 2015 , 2014 and 2013 , respectively. |
Basic and Diluted Earnings (Los
Basic and Diluted Earnings (Loss) per Share | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Earnings (Loss) per Share | Note 21 — Basic and Diluted Earnings (Loss) 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 years ended December 31: 2015 2014 2013 Basic earnings (loss) per share: Net income (loss) attributable to Ocwen common stockholders $ (247,017 ) $ (472,602 ) $ 298,398 Weighted average shares of common stock 125,315,899 131,362,284 135,678,088 Basic earnings (loss) per share $ (1.97 ) $ (3.60 ) $ 2.20 Diluted earnings (loss) per share (1): Net income (loss) attributable to Ocwen common stockholders $ (247,017 ) $ (472,602 ) $ 298,398 Preferred stock dividends (2) — — — Adjusted net income (loss) attributable to Ocwen $ (247,017 ) $ (472,602 ) $ 298,398 Weighted average shares of common stock 125,315,899 131,362,284 135,678,088 Effect of dilutive elements (1): Preferred stock (2) — — — Stock options — — 4,110,355 Common stock awards — — 12,063 Dilutive weighted average shares of common stock 125,315,899 131,362,284 139,800,506 Diluted earnings (loss) per share $ (1.97 ) $ (3.60 ) $ 2.13 Stock options and common stock awards excluded from the computation of diluted earnings per share: Anti-dilutive (3) 2,038,588 314,688 — Market-based (4) 924,438 295,000 547,500 (1) For 2015 and 2014, we have excluded the effect of the 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. Under this method, we assumed the conversion of the preferred stock into shares of common stock unless the effect was anti-dilutive. Conversion of the preferred stock was not assumed for 2013 because the effect would have been antidilutive. (3) These stock 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. |
Employee Compensation and Benef
Employee Compensation and Benefit Plans | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Employee Compensation and Benefit Plans | Note 22 — Employee Compensation and Benefit Plans We maintain a defined contribution plan to provide post-retirement benefits to our eligible employees. We also maintain additional compensation plans for certain employees. We designed these plans to facilitate a pay-for-performance culture, further align the interests of our officers and key employees with the interests of our shareholders and assist in attracting and retaining employees vital to our long-term success. These plans are summarized below. Retirement Plan We maintain a defined contribution 401(k) plan. Generally, we match 50% of each employee’s contributions, limited to 2% of the employee’s compensation. Our contributions to the 401(k) plan were $4.7 million , $3.8 million and $4.2 million for the years ended December 31, 2015 , 2014 and 2013 , respectively. Annual Incentive Plan The Ocwen Financial Corporation Amended 1998 Annual Incentive Plan and the 2007 Equity Incentive Plan (the 2007 Equity Plan) are our primary incentive compensation plans for executives and other eligible employees. Under the terms of these plans, participants can earn cash and equity-based awards as determined by the Compensation Committee of the Board of Directors (the Committee). The awards are based on objective and subjective performance criteria established by the Committee. The Committee may at its discretion adjust performance measurements to reflect significant unforeseen events. We recognized $30.2 million , $13.5 million and $28.4 million of compensation expense during 2015 , 2014 and 2013 , respectively, related to annual incentive compensation awarded in cash. The 2007 Equity Plan authorizes the grant of stock options, restricted stock or other equity-based awards to employees. At December 31, 2015 , there were 7,702,134 shares of common stock remaining available for future issuance under the 2007 Equity Plan. Beginning in 2008, Ocwen granted equity-based awards to certain members of senior management that included stock options, a portion of which included only a service condition and a portion of which included only a market condition. Beginning in 2015, Ocwen began granting equity awards to members of senior management that included stock options with only a service condition, restricted stock units with only a service condition and restricted stock units with both a service condition and a market condition. These awards had the following characteristics in common: Type of Award Percent of Options Awarded Vesting Period 2008 - 2014 Awards: Options: Service Condition: Time-based 25% Ratably over four years (¼ on each of the four anniversaries of the grant date) Market Condition: Market performance-based 50 Over three years beginning with ¼ vesting on the date that the stock price has at least doubled over the exercise price and the compounded annual gain over the exercise price is at least 20% and then ratably over three years (¼ on the next three anniversaries of the achievement of the market condition) Extraordinary market performance-based 25 Over three years beginning with ¼ vesting on the date that the stock price has at least tripled over the exercise price and the compounded annual gain over the exercise price is at least 25% and then ratably over three years (¼ on the next three anniversaries of the achievement of the market condition) Total award 100% 2015 Awards: Options: Service Condition: Time-based 35% Ratably over four years (1/4 vesting on each of the four anniversaries of the grant date.) Restricted Stock Units: Service Condition: Time-based 16 Over four years with 1/3 vesting on each of the 2 nd , 3 rd and 4 th anniversaries of the grant date. Market Condition: Time-based vesting schedule and Market performance-based vesting date 49 Vest over four years with 1/4 vesting on each of the four anniversaries of the grant date. However, none are considered vested until the first trading day (if any) on or before the 4 th anniversary of the award date on which the average stock price equals or exceeds the price set in the individual award agreement, at which time all units that have met their time-based vesting schedule vest immediately with the remainder vesting in accordance with their time-based schedule. Total Award 100% The contractual term of all options granted is ten years from the grant date, except where employment terminates by reason of death, disability or retirement, in which case, the agreement may provide for an earlier termination of the options. The terms of the market-based options do not include a retirement provision. Restricted stock units have a four-year term. If the market conditions are not met by the fourth anniversary of the award of restricted stock units, those units terminate on that date. Stock option activity for the years ended December 31: 2015 2014 2013 Number of Options Weighted Average Exercise Price Number of Options Weighted Average Exercise Price Number of Options Weighted Average Exercise Price Outstanding at beginning of year 6,828,861 $ 9.99 8,182,611 $ 10.62 8,938,179 $ 9.93 Granted (1)(2) 968,041 $ 17.48 330,000 $ 34.48 50,000 $ 51.70 Exercised (3)(4) (145,677 ) $ 5.24 (683,750 ) $ 8.30 (790,568 ) $ 5.35 Forfeited/Canceled (1) (2) (500,000 ) $ 24.38 (1,000,000 ) $ 24.38 (15,000 ) $ 15.27 Outstanding at end of year (5)(6) 7,151,225 $ 10.10 6,828,861 $ 9.99 8,182,611 $ 10.62 Exercisable at end of year (5)(6)(7) 6,187,559 $ 8.25 5,750,739 $ 6.84 5,733,864 $ 6.53 (1) Stock options granted in 2012 include 2,000,000 options granted to Ocwen’s former Executive Chairman, William C. Erbey at an exercise price of $24.38 equal to the closing price of the stock on the day of the Committee’s approval. On April 22, 2014, Mr. Erbey surrendered 1,000,000 of these options. We recognized the remaining $5.7 million of previously unrecognized compensation expense associated with these options as of the date of surrender. (2) Upon Mr. Erbey’s resignation as an officer and director of Ocwen on January 16, 2015, 500,000 of his unvested options would have been forfeited immediately. However, Ocwen agreed to modify the awards to allow them to vest. This had an effect equivalent to the canceling of the original awards and the granting of new awards effective on the date of resignation. (3) The total intrinsic value of stock options exercised, which is defined as the amount by which the market value of the stock on the date of exercise exceeds the exercise price, was $0.3 million , $13.7 million and $35.3 million for 2015 , 2014 and 2013 , respectively. (4) In connection with the exercise of stock options during 2015 , 2014 and 2013 , employees delivered 56,013 , 249,696 and 138,553 shares, respectively, of common stock to Ocwen as payment for the exercise price and the income tax withholdings on the compensation. As a result, a total of 89,664 , 434,054 and 652,015 net shares of stock were issued in 2015 , 2014 and 2013 , respectively, related to the exercise of stock options. (5) Excluding 340,000 market-based options that have not met their performance criteria, the net aggregate intrinsic value of stock options outstanding and stock options exercisable at December 31, 2015 was $0 and $0 , respectively. A total of 4,722,814 market-based options were outstanding at December 31, 2015 , of which 4,377,814 were exercisable. (6) At December 31, 2015 , the weighted average remaining contractual term of options outstanding and options exercisable was 3.93 years and 3.22 years , respectively. (7) The total fair value of the stock options that vested and became exercisable during 2015 , 2014 and 2013 , based on grant-date fair value, was $2.0 million , $2.6 million and $4.7 million , respectively. In addition to the stock option grants shown above, Ocwen granted a total of 790,397 restricted stock units to members of senior management in 2015. Of these awards, 584,438 include a market condition for vesting based on an average common stock trading price of $16.26 . Compensation expense related to options is measured based on the grant-date fair value of the options using an appropriate valuation model based on the vesting condition of the award. The fair value of the time-based options was determined using the Black-Scholes options pricing model, while a lattice (binomial) model was used to determine the fair value of the market-based options. Lattice (binomial) models incorporate ranges of assumptions for inputs. Restricted stock units with only a service condition are valued at their intrinsic value, which is the market value of the stock on the date of the award. The fair value of restricted stock units with both a service condition and a market based vesting condition is based on the results of a Monte Carlo simulation. The following assumptions were used to value awards granted during the years ended December 31: 2015 2014 2013 Black-Scholes Binomial Monte Carlo Black-Scholes Binomial Black-Scholes Binomial Risk-free interest rate 1.60% – 2.08% 0.20% - 2.74% 1.23% 1.98% – 2.60% 0% - 3.05% 2.32% 0.24% - 3.56% Expected stock price volatility (1) 45% 51% - 108% 65% 42% 41% - 42% 44% 33% - 44% Expected dividend yield —% —% —% —% —% —% —% Expected life (in years) (2) 5.50 5.41 - 5.46 (3) 6.50 4.35 - 5.64 6.50 4.50 - 5.75 Contractual life (in years) — 10 — — 10 — 10 Fair value $3.36 - $4.62 $5.41 - $5.46 $7.99 $11.93 - $17.01 $8.99 - $13.82 $24.32 $18.04 - $21.38 (1) We estimate volatility based on the historical volatility of Ocwen’s common stock over the most recent period that corresponds with the estimated expected life of the option. (2) For the options valued using the Black-Scholes model we determined the expected life based on historical experience with similar awards, giving consideration to the contractual term, exercise patterns and post vesting forfeitures. The expected term of the options valued using the lattice (binomial) model is derived from the output of the model. The lattice (binomial) model incorporates exercise assumptions based on analysis of historical data. For all options, the expected life represents the period of time that options granted were expected to be outstanding at the date of the award. (3) The restricted stock units that contain both a service condition and a market-based condition are valued using the Monte Carlo simulation. The expected term is derived from the output of the simulation and represents the expected time to meet the market-based vesting condition. For equity awards with both service and market conditions, the requisite service period is the longer of the derived or explicit service period. In this case, the explicit service condition (vesting period) is the requisite service period, and the graded vesting method is used for expense recognition. The following table sets forth equity-based compensation related to stock options and stock awards and the related excess tax benefit for the years ended December 31: 2015 2014 2013 Equity-based compensation expense: Stock option awards $ 3,978 $ 9,983 $ 5,388 Stock awards 3,313 746 260 Excess tax benefit related to share-based awards 6,824 6,374 21,244 As of December 31, 2015 , unrecognized compensation costs related to non-vested stock options amounted to $4.9 million , which will be recognized over a weighted-average remaining requisite service period of 1.92 years . |
Business Segment Reporting
Business Segment Reporting | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Business Segment Reporting | Note 23 — 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. New business activities that are currently insignificant include providing secured floor plan lending to used car dealerships and providing financing to investors to purchase single-family homes and apartments for lease. 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. Corporate Items and Other also included the diversified fee-based businesses that we acquired as part of the acquisitions of Homeward and ResCap and subsequently sold to Altisource on March 29, 2013 and April 12, 2013, respectively. We allocate interest income and expense to each business segment for funds raised or for funding of investments made, including interest earned on cash balances and short-term investments and interest incurred on corporate debt. We also allocate expenses generated by corporate support services to each business segment. Financial information for our segments is as follows: Servicing Lending Corporate Items and Other Corporate Eliminations Business Segments Consolidated Results of Operations For the year ended December 31, 2015 Revenue (1) $ 1,613,537 $ 124,724 $ 2,895 $ (58 ) $ 1,741,098 Expenses (1) (2) 1,221,879 97,692 158,671 (58 ) 1,478,184 Other income (expense): Interest income 1,044 14,669 2,607 — 18,320 Interest expense (446,377 ) (9,859 ) (26,137 ) — (482,373 ) Gain on sale of mortgage servicing rights, net 83,921 — — — 83,921 Other (1) (14,370 ) 2,123 (396 ) — (12,643 ) Other income (expense), net (375,782 ) 6,933 (23,926 ) — (392,775 ) Income (loss) before income taxes $ 15,876 $ 33,965 $ (179,702 ) $ — $ (129,861 ) For the year ended December 31, 2014 Revenue (1) $ 1,985,436 $ 119,220 $ 6,825 $ (156 ) $ 2,111,325 Expenses (1) (2) 1,643,323 156,272 235,769 (156 ) 2,035,208 Other income (expense): Interest income 2,981 16,459 3,551 — 22,991 Interest expense (515,141 ) (10,725 ) (15,891 ) — (541,757 ) Other (1) (4,043 ) 4,476 (943 ) — (510 ) Other income (expense), net (516,203 ) 10,210 (13,283 ) — (519,276 ) Income (loss) before income taxes $ (174,090 ) $ (26,842 ) $ (242,227 ) $ — $ (443,159 ) Servicing Lending Corporate Items and Other Corporate Eliminations Business Segments Consolidated For the year ended December 31, 2013 Revenue (1) $ 1,895,921 $ 120,899 $ 22,092 $ (639 ) $ 2,038,273 Expenses (1) (2) 1,096,084 98,194 107,188 (172 ) 1,301,294 Other income (expense): Interest income 1,599 16,295 4,461 — 22,355 Interest expense (381,477 ) (13,508 ) (601 ) — (395,586 ) Other (1) (28,292 ) 10,132 6,424 467 (11,269 ) Other income (expense), net (408,170 ) 12,919 10,284 467 (384,500 ) Income (loss) before income taxes $ 391,667 $ 35,624 $ (74,812 ) $ — $ 352,479 Servicing Lending Corporate Items and Other Corporate Eliminations Business Segments Consolidated Total Assets December 31, 2015 $ 4,109,076 $ 2,811,154 $ 484,579 $ — $ 7,404,809 December 31, 2014 $ 5,881,862 $ 1,963,729 $ 421,687 $ — $ 8,267,278 December 31, 2013 $ 6,295,976 $ 1,195,812 $ 435,215 $ — $ 7,927,003 (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 year ended December 31, 2015: Depreciation expense $ 2,990 $ 380 $ 15,789 $ 19,159 Amortization of mortgage servicing rights 98,849 345 — 99,194 Amortization of debt discount 2,680 — — 2,680 Amortization of debt issuance costs 21,269 — 1,395 22,664 For the year ended December 31, 2014: Depreciation expense $ 9,955 $ 332 $ 11,623 $ 21,910 Amortization of mortgage servicing rights 249,471 705 199 250,375 Amortization of debt discount 1,318 — — 1,318 Amortization of debt issuance costs 4,294 — 845 5,139 For the year ended December 31, 2013: Depreciation expense $ 13,525 $ 320 $ 10,400 $ 24,245 Amortization of mortgage servicing rights 282,526 255 — 282,781 Amortization of debt discount 1,412 — — 1,412 Amortization of debt issuance costs 4,395 — — 4,395 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 24 — Related Party Transactions Ocwen’s former Executive Chairman, William C. Erbey, also formerly served as Chairman of the Board of 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 years presented and the amounts receivable or payable at December 31, 2014. See Note 26 — Commitments for additional discussion of our long-term agreements with Altisource and Residential. See Note 4 — Sales of Advances and MSRs , Note 6 — Loans Held for Sale , Note 9 — Mortgage Servicing and Note 14 — Borrowings for additional discussion of the NRZ/HLSS Transactions. For the Years Ended December 31, 2014 2013 Revenues and Expenses: Altisource agreements: Revenues $ 43,075 $ 22,739 Expenses 101,520 55,119 HLSS support services agreement: Revenues $ 1,315 $ 631 Expenses 1,729 2,018 AAMC support services and facilities agreements Revenues $ 1,160 $ 1,238 Residential servicing agreement Revenues $ 15,658 $ 2,436 December 31, 2014 Net Receivable (Payable) Altisource $ (4,909 ) HLSS 7,884 AAMC 232 Residential 100 $ 3,307 |
Regulatory Requirements
Regulatory Requirements | 12 Months Ended |
Dec. 31, 2015 | |
Brokers and Dealers [Abstract] | |
Regulatory Requirements | Note 25 — Regulatory Requirements Our business is subject to extensive regulation by federal, state and local governmental authorities, including the Consumer Financial Protection Bureau (CFPB), the Department of Housing and Urban Development (HUD), the Securities and Exchange Commission (SEC) and various state agencies that license, audit and conduct examinations of our loan 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 loan 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. In the current regulatory environment, we have faced and expect to continue to face increased regulatory and public scrutiny as an organization as well as stricter and more comprehensive regulation of the entire mortgage sector. 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 Telephone Consumer Protection 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. Ocwen is currently in receipt of three Civil Investigative Demands or investigative subpoenas from the CFPB seeking information about our servicing practices. If the CFPB were to bring an enforcement action against us, the resolutions of such action could have a material adverse impact on our business, reputation, financial condition and results of operations. 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. For the prior year, our licensed entities did not satisfy the requirements for timely provision of financial statements due to the delay in finalizing the audits for the 2014 fiscal years of these entities. 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 $529.8 million at December 31, 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. For the prior year, OLS, Homeward and Liberty did not satisfy the requirements for timely filing of financial statements due to the delay in finalizing the audits for the 2014 fiscal years of these entities. 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 December 31, 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 | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments | Note 26 — Commitments Unfunded Lending Commitments We have originated floating-rate reverse mortgage loans under which the borrowers have additional borrowing capacity of $922.8 million at December 31, 2015 . This additional borrowing capacity is available on a scheduled or unscheduled payment basis. We also had short-term commitments to lend $266.5 million and $11.8 million in connection with our forward and reverse mortgage loan interest rate lock commitments, respectively, outstanding at December 31, 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 24 — 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. Similar to other vendors, in the event that Altisource’s activities do not comply with the applicable servicing criteria, we could be exposed to liability as the servicer and it could negatively impact our relationships with our servicing clients, borrowers or regulators, among others. In connection with our March 29, 2013 and April 12, 2013 sales of the Homeward and ResCap diversified fee-based businesses to Altisource, we agreed to expand the terms of our business with Altisource to apply to the services Altisource provides as they relate to the Homeward and ResCap servicing businesses and further (i) to establish Altisource as the exclusive provider, except as prohibited by law, of such services as they relate to the Homeward and ResCap servicing businesses and (ii) not to establish similar fee-based businesses (or establish relationships with other companies engaged in the line of similar fee-based businesses) that would directly or indirectly compete with diversified fee-based businesses as they relate to the Homeward and ResCap businesses. In addition, we agreed that Ocwen and all of its subsidiaries and affiliates will market and promote the utilization of Altisource’s services to their various third-party relationships. Finally, Altisource and Ocwen agreed to use commercially reasonable best efforts to ensure that the loans associated with the ResCap business are boarded onto Altisource’s mortgage servicing platform (REALServicing). The cash consideration paid by Altisource to Ocwen in connection with the sales of the Homeward and ResCap diversified fee-based businesses was $87.0 million ( $82.0 million , net of cash transferred and other adjustments) and $128.8 million , respectively. 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. During 2014, we began reducing the amount of services provided to us under the Support Services Agreement. Beginning April 1, 2015, the only services that are regularly provided under these Support Services Agreements are corporate services such as vendor procurement for information technology. We anticipate that we will cease all corporate services by the end of 2016. 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. Lease Commitments We lease certain of our premises and equipment under non-cancelable operating leases with terms expiring through 2020 exclusive of renewal option periods. Our annual aggregate minimum rental commitments under these leases are summarized as follows: 2016 $ 18,293 2017 13,203 2018 6,409 2019 3,377 2020 990 Thereafter — 42,272 Less: Sublease income (1,656 ) Total minimum lease payments, net $ 40,616 In connection with business acquisitions we completed in recent years, we assumed the obligation for the lease agreements associated with certain facilities. The rental commitments in the table above for operating leases include the remaining amounts due through the earlier of the lease expiration date or the early termination date. We converted rental commitments for our facilities outside the U.S. to U.S. dollars using exchange rates in effect at December 31, 2015 . Rent expense for 2015 , 2014 and 2013 was $23.7 million , $19.0 million and $27.4 million , respectively. |
Contingencies
Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Note 27 — 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, those brought derivatively on behalf of Ocwen against certain current or former officers and directors, and those brought under the False Claims Act by private citizens on behalf of the United States of America. 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, claims related to our payment and other processing operations, and claims regarding certifications of our legal compliance related to our participation in certain government programs. 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 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 $40.2 million as of December 31, 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 December 31, 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 were 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 securities fraud 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 shareholders of Altisource Portfolio Solutions, S.A. (Altisource). On September 4, 2015, the presiding federal court dismissed both the above-referenced consolidated securities fraud class actions. Both of those actions have since been re-filed in federal court. On December 22, 2015, the presiding federal court dismissed the claims against Ocwen with prejudice in the above-referenced matter brought by the putative class of Altisource shareholders. On that same day, the presiding federal court dismissed in part the above-referenced matter brought by the putative class of Ocwen shareholders. In January 2016, Ocwen was named as a defendant in a separate securities action brought on behalf of certain putative shareholders of Ocwen. 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. OFC, OLS, and Homeward are defendants in two qui tam actions pending in the United States District Court for the Eastern District of Texas, brought by private citizens on behalf of the United States under the False Claims Act (FCA): U.S. Ex rel. Fisher v. Homeward Residential, Inc., et al and U.S. Ex rel. Fisher v. Ocwen Loan Servicing, LLC, et al . On April 2, 2014, the United States declined to intervene in these actions, and the complaints were unsealed shortly thereafter. The complaints allege in substance that Homeward and OLS violated the FCA by falsely certifying their compliance with applicable laws and regulations in connection with their respective participation in the United States Treasury’s HAMP and FHA insurance programs, thus rendering all HAMP incentive and FHA insurance payments on OLS- or Homeward-serviced loans false claims. The complaints seek damages including (i) an award equal to three times the total HAMP incentive and FHA insurance payments that OLS and Homeward have received from the United States and (ii) statutory penalties of between $5,000 and $10,000 per alleged false claim. Discovery is ongoing, and the parties have each filed motions for summary judgment. Trial in the OLS action is scheduled for May 16, 2016 and trial in the Homeward action is scheduled for June 28, 2016. At this time, we are unable to predict the outcome of these lawsuits, the possible loss or range of loss, if any, associated with resolving these lawsuits or any potential impact they may have on us or our operations. OFC, OLS and Homeward intend to vigorously defend against these lawsuits. If our efforts to defend these lawsuits are not successful, our business, financial condition, liquidity and results of operations could be materially and 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 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. 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, consent orders, 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. In December 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 contained 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, Home Loan Servicing Solutions, Ltd. (HLSS), Altisource Residential Corporation (Residential) and Altisource Asset Management Corporation (AAMC); 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. We must pay all reasonable and necessary costs of the Operations Monitor. We continue to work with the Operations Monitor. If we are found to have breached the terms of the NY Consent Order or if the NY DFS or the Operations Monitor were to allege non-compliance with New York laws or regulations, we could become subject to financial penalties or other regulatory action could be taken against us. The Operations Monitor also makes recommendations to Ocwen on various operational and governance matters. If we do not address such recommendations in a manner deemed satisfactory by the Operations Monitor and the NY DFS, we could be subject to additional scrutiny by the Operations Monitor or the NY DFS or other regulatory action could be taken against us. California Department of Business Oversight In January 2015, OLS reached an agreement with the 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. 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 for one year at the discretion of the CA DBO. OLS must pay all reasonable and necessary costs of the CA Auditor. The CA Auditor will report periodically on its findings and progress and OLS must submit to the CA DBO a written plan to address and implement corrective measures and address any deficiencies identified by the CA Auditor. We continue to work cooperatively with the CA Auditor. As part of the CA Auditor’s work, from time to time the CA Auditor and the CA DBO have made observations regarding our compliance with various regulations and legal requirements, including the Consent Order. At this time, we believe that we will be able to resolve all matters related to such observations in a constructive manner with the CA DBO, and we are not aware of any issue that we believe will have a material impact on our financial condition. As part of these observations, the CA DBO has informed us of its position that certain onboarding activities relating to new California originations in 2015 were prohibited by the Consent Order and represent a material breach of the agreement. We disagree with this position. Given that we have already made adjustments to our processes for California originations, the CA DBO has not asked us to make any additional changes to such processes at this time. The CA DBO has also raised similar concerns related to our on-boarding of loans subject to subservicing agreements. The CA DBO is still evaluating this activity as it relates to the Consent Order. The CA DBO has not asked us to cease any subservicing activities, and these activities are not material to our overall operations. However, it is possible that the CA DBO could determine to take action against us, which could subject us to financial penalties or other regulatory action, and it is possible that the CA Auditor or the CA DBO could allege that other activities do not comply with California laws or regulations, which could also result in regulatory action against us. 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 (District Court). 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. To date, OMSO’s reports have found six metrics where our testing has exceeded the applicable error rate threshold. Each of those metrics has been the subject of an agreed-upon CAP, and one of those potential fails have been deemed “cured” by OMSO as subsequent testing has not exceeded the metric error rate threshold. The remainder of the metrics are either still under CAPs or the post-cure testing has yet to be validated by OMSO. Moreover, we agreed with OMSO to deem an additional five metrics as having failed due to the letter-dating issues that were raised by the NY DFS in 2014, as the testing of those metrics could have been affected by that issue. Those metrics are subject to a “global CAP” that covers all letter-dating issues under the Ocwen National Mortgage Settlement, in addition to any metric-specific CAP plan. 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 or the District Court could determine that we were generally violating the settlement and seek to impose a broader range of financial, injunctive or other penalties on us. In December 2014, OMSO identified two issues involving our compliance with the Ocwen National Mortgage Settlement. The first concerned the adequacy and independence of our IRG, which is responsible for reporting on our compliance with the settlement. The second concerned the letter-dating issues discussed above. OMSO’s reports since then have identified the steps that we have taken to remediate these issues and acknowledged Ocwen’s cooperation. OMSO has recently reported that Ocwen’s IRG appears to be operating in conformity with the National Mortgage Settlement, and noted that the letter-dating issues are subject to the global CAP discussed above. We continue to work with OMSO on ongoing testing and CAPs. While, to date, these issues have not resulted in financial or other penalties, if we are found to have breached 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 In April 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 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. In June 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 our announcement in August 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 in September 2014 in relation to such amendments. In addition, we received a further subpoena in November 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 cooperated with the SEC in its investigation. On January 20, 2016, the SEC entered an administrative order resolving its investigation, which required Ocwen to pay, without admitting or denying liability, 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. We had previously disclosed in our Form 10-Q for the quarter ended September 30, 2015 that we had reached this resolution in principle with the SEC staff and that we accrued $2.0 million as of September 30, 2015 as we believed this loss was probable and reasonably estimable based on current information. 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. On February 11, 2016, we received a letter from the Staff informing us that it was conducting an investigation relating to fees and expenses charged in connection with liquidated loans and REO properties held in non-agency RMBS trusts. The letter requested that we voluntarily produce documents and information. We are cooperating with the Staff on these matters. General In addition to the above matters, our loan origination and servicing businesses require one or more licenses in the various jurisdictions in which we 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. Last year, our licensed entities did not satisfy the requirements for timely provision of financial statements due to the delay in finalizing the audits for the 2014 fiscal years of these entities. The same agencies that issue licenses to us engage in regular supervisory examinations of the licensable activities. We are also 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. The GSEs and their conservator, FHFA, HUD, FHA, VA, Ginnie Mae, the United States Treasury Department, and others also subject us to periodic reviews and audits. We also receive information requests and other inquiries, both formal and informal in nature, from these agencies as part of their general regulatory or other 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. On occasion, we also engage with U.S. attorneys. Many of these matters are brought to our attention as a complaint that the entity is investigating, although some are formal investigations or proceedings. Ocwen is currently in receipt of three Civil Investigative Demands from the CFPB, one Civil Investigative Demand from the Massachusetts Attorney’s General Office and two subpoenas from the Office of the United States Attorney for the District of Massachusetts seeking information about our servicing practices. To the extent that an examination, monitorship, audit or other regulatory engagement results in an alleged failure by us to comply with applicable law, regulation or licensing requirement, or if allegations are made that we have failed to comply with the commitments we have made in connection with our regulatory settlements 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 Homeward’s contracts with purchasers of originated loans contain provisions that require indemnification or repurchase of the related loans under certain circumstances. Additionally, in one of the servicing contracts that Homeward acquired in 2008 from Freddie Mac, Homeward assumed the origination representations and warranties even though it did not originate the loans. While the language in the purchase contracts varies, they contain provisions that require Homeward to indemnify purchasers of related loans or repurchase such loans if: • representations and warranties concerning loan quality, contents of the loan file or loan underwriting circumstances are inaccurate; • adequate mortgage insurance is not secured within a certain period after closing; • a mortgage insurance provider denies coverage; or • there is a failure to comply, at the individual loan level or otherwise, with regulatory requirements. We receive origination representations and warranties from our network of approved originators in connection with loans we purchase through our correspondent lending channel. To the extent that we have recourse against a third-party originator, we may recover part or all of any loss we incur. We believe that, as a result of the current market environment, many purchasers of residential mortgage loans are particularly aware of the conditions under which originators must indemnify or repurchase loans and under which such purchasers would benefit from enforcing any indemnification rights and repurchase remedies they may have. As our lending business grows, we expect that our exposure to indemnification risks and repurchase requests is likely to increase. If home values were to decrease, our realized loan losses from loan repurchases and indemnifications may increase as well. As a result, our liability for repurchases may increase beyond our current expectations. If we are required to indemnify or repurchase loans that we originate and sell, or where we have assumed this risk on loans that we service, as discussed above, in either case resulting in losses that exceed our related liability, our business, financial condition and results of operations could be adversely affected. We have exposure to origination representation, warranty and indemnification obligations because of our lending, sales and securitization activities and in connection with our servicing practices. Our acquisitions in prior years also created exposure for us to the extent we assumed one or more of these obligations. At December 31, 2015 and 2014 , we had outstanding representation and warranty repurchase demands of $97.5 million UPB ( 506 loans) and $96.6 million UPB ( 511 loans), respectively. 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 similar indemnification obligations for the following years ended December 31: 2015 2014 2013 Beginning balance $ 132,918 $ 192,716 $ 38,140 Provision for representation and warranty obligations (8,418 ) (1,947 ) 18,154 New production reserves 814 1,605 1,325 Obligations assumed in connection with MSR and servicing business acquisitions — — 190,658 Payments made in connection with sales of MSRs (81,498 ) — — Charge-offs and other (1) (7,201 ) (59,456 ) (55,561 ) Ending balance $ 36,615 $ 132,918 $ 192,716 (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 h |
Quarterly Results of Operations
Quarterly Results of Operations (Unaudited) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Results of Operations (Unaudited) | Note 28 — Quarterly Results of Operations (Unaudited) Quarters Ended December 31, September 30, June 30, March 31, Revenue $ 362,457 $ 404,946 $ 463,251 $ 510,444 Expenses 359,848 387,726 352,252 378,358 Other income (expense), net (131,881 ) (73,138 ) (98,499 ) (89,257 ) Income (loss) before income taxes (129,272 ) (55,918 ) 12,500 42,829 Income tax expense (benefit) 94,985 10,832 2,594 8,440 Net income (loss) (224,257 ) (66,750 ) 9,906 34,389 Net income attributable to non-controlling interests 16 (119 ) (168 ) (34 ) Net income (loss) attributable to Ocwen common stockholders $ (224,241 ) $ (66,869 ) $ 9,738 $ 34,355 Earnings (loss) per share attributable to Ocwen common stockholders Basic $ (1.79 ) $ (0.53 ) $ 0.08 $ 0.27 Diluted $ (1.79 ) $ (0.53 ) $ 0.08 $ 0.27 (1) Other income (expense), net for 2015 includes gains (losses) on the sale of MSRs in the first, second, third and fourth quarter of $26.4 million , $30.3 million , $41.2 million and $(14.0) million , respectively. Quarters Ended December 31, September 30, June 30, March 31, Revenue $ 493,292 $ 513,698 $ 553,074 $ 551,261 Expenses (1) (2) 885,512 455,039 345,463 349,194 Other income (expense), net (127,553 ) (130,925 ) (130,434 ) (130,364 ) Income (loss) before income taxes (519,773 ) (72,266 ) 77,177 71,703 Income tax expense 2,022 2,992 10,165 11,217 Net income (loss) (521,795 ) (75,258 ) 67,012 60,486 Net (income) loss attributable to non-controlling interests (80 ) (123 ) (57 ) 15 Preferred stock dividends — — (582 ) (581 ) Deemed dividend related to beneficial conversion feature of preferred stock — (808 ) (415 ) (416 ) Net income (loss) attributable to Ocwen common stockholders $ (521,875 ) $ (76,189 ) $ 65,958 $ 59,504 Earnings (loss) per share attributable to Ocwen common stockholders Basic $ (4.16 ) $ (0.58 ) $ 0.49 $ 0.44 Diluted $ (4.16 ) $ (0.58 ) $ 0.48 $ 0.43 (1) Operating expenses for the third and fourth quarter of 2014 include charges of $100.0 million and $50.0 million , respectively, for losses related to a regulatory settlement with the NY DFS. These charges are included in Professional services on the Consolidated Statement of Operations and were recorded in the Corporate Items and Other segment. (2) Operating expenses for the fourth quarter of 2014 include the recognition of a goodwill impairment loss of $420.2 million . |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 29 — Subsequent Events For the period January 1, 2016 through February 10, 2016, we completed the repurchase of 991,985 shares of common stock in the open market under our $500.0 million share repurchase program for a total purchase price of $5.9 million , including commissions. Since the inception of this program on October 31, 2013, we have completed the repurchase of 13,163,793 shares for an aggregate purchase price of $380.3 million . On January 5, 2016, we entered into a new $100.0 million mortgage loan warehouse facility to fund the origination of reverse mortgages. Interest is based on 1-Month LIBOR plus 2.75% with a LIBOR floor of 0.25% . The facility will mature on January 3, 2017 . |
Organization, Business Enviro39
Organization, Business Environment, Basis of Presentation and Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization Ocwen Financial Corporation (NYSE: OCN) (Ocwen, we, us and our) is a financial services holding company which, through its subsidiaries, originates and services 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) as well as 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 primary operating subsidiaries: Ocwen Loan Servicing, LLC (OLS), Ocwen Financial Solutions Private Limited (OFSPL), 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 primarily 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. |
Consolidation and Basis of Presentation | Consolidation and Basis of Presentation Principles of Consolidation Our financial statements include the accounts of Ocwen, its majority-owned subsidiaries and any variable interest entity (VIE) for which we have determined that we are the primary beneficiary. We apply the equity method of accounting to investments when the entity is not a VIE, and we are able to exercise significant influence, but not control, over the policies and procedures of the entity but own 50% or less of the voting securities. We have eliminated intercompany accounts and transactions in consolidation. Foreign Currency Translation The functional currency of each of our foreign subsidiaries is the U.S. dollar. Re-measurement adjustments of foreign-denominated amounts to U.S. dollars are included in Other, net in our Consolidated Statements of Operations. |
Reclassifications | Reclassifications Within the Cash flows from operating activities section of the Consolidated Statements of Cash Flows for 2014 and 2013, we reclassified the Provision for valuation adjustment on deferred tax assets from Decrease (increase) in deferred tax assets, net to a new line item. Certain other insignificant amounts in the Consolidated Statements of Cash Flows for prior years 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 generally accepted accounting principles (GAAP) requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, the reported amounts of revenues and expenses during the reporting period and the related disclosures in the accompanying notes. Such estimates and assumptions include, but are not limited to, those that relate to fair value measurements, the provision for potential losses that may arise from litigation proceedings, 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. |
Cash | Cash Cash includes both interest-bearing and non-interest-bearing demand deposits with financial institutions that have original maturities of 90 days or less. |
Mortgage Servicing Rights | Mortgage Servicing Rights (MSRs) MSRs are assets representing our right to service portfolios of mortgage loans. We have primarily obtained MSRs through asset purchases or business combination transactions. We also retain MSRs on originated loans when they are sold in the secondary market. For servicing retained in connection with the securitization of reverse mortgage loans accounted for as secured financings, we do not recognize an MSR. An agreement between the various parties to a mortgage securitization transaction typically specifies the rights and obligations of the holder of the MSRs, which include guidelines and procedures for servicing the loans. Two examples of these guidelines and procedures include remittance and reporting requirements. The UPB of the loan portfolios that we service for others is not included on our balance sheet. Custodial accounts, which hold funds representing collections of principal and interest that we receive from borrowers (float balances), are held in escrow by an unaffiliated bank and excluded from our balance sheet. All newly acquired or retained MSRs are initially measured at fair value. We recognize a servicing liability for those portfolio contracts that are not expected to compensate us adequately for performing the servicing. For this purpose, we define contracts as conventional, government-insured or non-Agency (commonly referred to as non-prime, subprime or private-label loans) based on their general comparability with regard to servicing guidelines, underwriting standards and borrower risk characteristics. Servicing assets are not recognized for subservicing arrangements entered into with the entity that owns the MSRs. Subsequent to acquisition, we account for servicing assets and servicing liabilities using the amortization method or the fair value measurement method. The fair value election is irrevocable and can be made at the beginning of any fiscal year. Additionally, transferring servicing assets and servicing liabilities from a class subsequently measured using the amortization method to a class subsequently measured at fair value is permitted as of the start of any fiscal year. As discussed further in Note 9 — Mortgage Servicing , 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. Once the fair value election is made for a particular class of MSRs, that election applies to all subsequently acquired or originated servicing assets and liabilities with characteristics consistent with the class. We defined our classes based on our strategy for managing the risks of the underlying portfolios. For certain of the servicing assets, we previously managed the effects of interest rate risk with derivative financial instruments. We elected to account for this class of servicing assets using the fair value measurement method. For servicing assets or liabilities that we account for using the amortization method, we amortize the balances in proportion to, and over the period of, estimated net servicing income (if servicing revenues exceed servicing costs) or net servicing loss (if servicing costs exceed servicing revenues). We assess servicing assets or liabilities for impairment or increased obligation based on fair value at each reporting date. Estimated net servicing income is primarily driven by the estimated future cash flows of the underlying mortgage loan portfolio, which, absent new purchases, declines over time from prepayments and scheduled loan amortization. We adjust MSR amortization prospectively in response to changes in estimated projections of future cash flows. We perform an impairment analysis based on the difference between the carrying amount and estimated fair value after grouping the underlying portfolios into the applicable strata. We recognize any impairment through a valuation allowance. We adjust the valuation allowance to reflect subsequent changes in the measurement of impairment. However, we do not recognize fair value in excess of the carrying amount of servicing assets for that stratum. For servicing assets or liabilities that we account for at fair value on a recurring basis, we measure the balances at fair value at each reporting date and report changes in fair value in earnings in the period in which the changes occur. We earn fees for servicing mortgage loans. We collect servicing fees, generally expressed as a percent of UPB, from the borrowers’ payments. We also include late fees, prepayment penalties, float earnings and other ancillary fees in servicing revenue. We recognize servicing fees as revenue when the fees are earned, which is generally when the borrowers’ payments are collected or when loans are modified or liquidated through the sale of the underlying real estate collateral or otherwise. |
Advances and Match Funded Advances | Advances and Match Funded Advances During any period in which a borrower does not make payments, most of our servicing agreements require that we advance our own funds to meet contractual principal and interest remittance requirements for the investors, to pay property taxes and insurance premiums and to process foreclosures. We also advance funds to maintain, repair and market foreclosed real estate properties on behalf of investors. These advances are made pursuant to the terms of each servicing contract. Each servicing contract is associated with specific loans, identified as a pool. When we make an advance on a loan under each servicing contract, we are entitled to recover that advance either from the borrower, for reinstated and performing loans, or from investors, for modified and liquidated loans. Most of our servicing contracts provide that the advances made under the respective agreement have priority over all other cash payments from the proceeds of the loan, and in the majority of cases, the proceeds of the pool of loans that are the subject of that servicing contract. As a result, we are entitled to repayment from loan proceeds before any interest or principal is paid on the bonds, and in the majority of cases, advances in excess of loan proceeds may be recovered from pool level proceeds. We establish an allowance for losses through a charge to earnings to the extent that we believe advances are uncollectible under the provisions of each servicing contract taking into consideration our historical collection rates, length of delinquency and the amount of the advance. However, we are generally only obligated to advance funds to the extent that we believe the advances are recoverable from expected proceeds from the loan. We assess collectibility using proprietary cash flow projection models that incorporate a number of different factors, depending on the characteristics of the mortgage loan or pool, including, for example, estimated time to a foreclosure sale, estimated costs of foreclosure action, estimated future property tax payments and the estimated value of the underlying property net of estimated carrying costs, commissions and closing costs. |
Loans Held for Sale | Loans Held for Sale Loans held for sale include residential mortgage loans that we originate or purchase and do not intend to hold until maturity. We report loans held for sale at either fair value or the lower of cost or fair value computed on an aggregate basis. For loans held for sale that are reported at the lower of cost or fair value, loan origination fees, as well as premium and discount, points and incremental direct origination costs, are initially recorded as an adjustment of the cost basis of the loan and are deferred until the loan is sold. For loans that we elected to measure at fair value on a recurring basis, we report changes in fair value in Gain on loans held for sale, net in the Consolidated Statements of Operations in the period in which the changes occur. These loans are expected to be sold into the secondary market to the GSEs or into Ginnie Mae guaranteed securitizations. For all other loans held for sale which we report at the lower of cost or fair value, we account for the excess of cost over fair value as a valuation allowance and include changes in the valuation allowance in Other, net, in the Consolidated Statements of Operations in the period in which the change occurs. We accrue interest income as earned. We place loans on non-accrual status after any portion of principal or interest has been delinquent for more than 89 days , or earlier if management determines the borrower is unable to continue performance. When we place a loan on non-accrual status, we reverse the interest that we have accrued but not yet received. We return loans to accrual status only when we reinstate the loan and there is no significant uncertainty as to collectability. |
Loans Held for Investment - Reverse Mortgages | Loans Held for Investment - Reverse Mortgages Loans held for investment include reverse residential mortgage loans that we originate and which we have elected to measure at fair value. These reverse mortgages are insured by the FHA and pooled into Ginnie Mae guaranteed securities that we sell into the secondary market with servicing rights retained. Loan transfers in these Ginnie Mae securitizations do not meet the definition of a participating interest and as a result, the transfers of the reverse mortgages do not qualify for sale accounting. Therefore, we account for these transfers as financings, with the reverse mortgages classified as Loans held for investment - reverse mortgages, at fair value, on our Consolidated Balance Sheets, with no gain or loss recognized on the transfer. Upfront costs and fees related to loans held for investment, including broker fees, are recognized in earnings as incurred and are not capitalized. However, we capitalize premiums on loans purchased via the correspondent channel, because they represent part of the purchase price. Changes in the fair value of the reverse mortgages are included in Other revenues in our Consolidated Statements of Operations. Included in net fair value gains on reverse mortgages is interest income that we expect to collect on the reverse mortgages. We report originations and collections of reverse mortgages in investing activities in the Consolidated Statements of Cash Flows. We report net fair value gains on reverse mortgages as an adjustment to the net cash provided by or used in operating activities in the Consolidated Statements of Cash Flows. Proceeds from securitizations of reverse mortgages are included in financing activities in the Consolidated Statements of Cash Flows. |
Transfers of Financial Assets | Transfers of Financial Assets We securitize, sell and service forward and reverse residential mortgage loans. Securitization transactions typically involve the use of VIEs and are accounted for either as sales or as secured financings. We typically retain economic interests in the securitized assets in the form of servicing rights and obligations. In order to efficiently finance our assets and operations and create liquidity, we may sell servicing advances, MSRs or Rights to MSRs. In order to determine whether or not a VIE is required to be consolidated, we consider our ongoing involvement with the VIE. In circumstances where we have both the power to direct the activities that most significantly impact the performance of the VIE and the obligation to absorb losses or the right to receive benefits that could be significant, we would conclude that we would consolidate the entity, which precludes us from recording an accounting sale in connection with the transfer of the financial assets. In the case of a consolidated VIE, we continue to report the underlying residential mortgage loans or servicing advances, and we record the securitized debt on our consolidated balance sheet. In the case of transfers where either one or both of the power or economic criteria above are not met, we evaluate whether we achieve a sale for accounting purposes. In order to achieve a sale, the transferred assets must be legally isolated, not be constrained by restrictions from further transfer and be deemed to be beyond our control. If the transfer does not meet any of these three criteria, the accounting is consistent with a secured financing as described in the preceding paragraph. In certain situations, we may have continuing involvement in transferred loans through our retained servicing. Additionally, we may have the right, but not the obligation, to buy certain re-performing loans from the purchaser for which we have secured a commitment to re-pool those loans under a Ginnie Mae program. In both cases, transactions involving these situations typically would still be eligible for sale accounting, as we have ceded effective control of these loans to the purchaser. Subsequent to the determination that a transaction does not meet the accounting sale criteria, we may determine that we meet the criteria. In the event we subsequently meet the sale accounting criteria, we derecognize the transferred assets and related liabilities. In the case of transfers of MSRs and Rights to MSRs where we retain the right to subservice, we defer the related gain or loss and amortize the balance over the life of the subservicing agreement. Gains or losses on off-balance sheet securitizations take into consideration any retained interests, including servicing rights and representation and warranty obligations, both of which are initially recorded at fair value at the date of sale in Gain on loans held for sale, net, in our Consolidated Statements of Operations. |
Premises and Equipment | Premises and Equipment We report premises and equipment at cost and, except for land, depreciate them over their estimated useful lives on a straight-line basis as follows: Computer hardware and software 2 – 3 years Buildings 40 years Leasehold improvements Term of the lease not to exceed useful life Furniture and fixtures 5 years Office equipment 5 years |
Litigation | Litigation We monitor our legal matters, including advice from external legal counsel, and periodically perform assessments of these matters for potential loss accrual and disclosure. We establish a liability for settlements, judgments on appeal and filed and/or threatened claims for which we believe that it is probable that a loss has been or will be incurred and the amount can be reasonably estimated. We recognize legal costs associated with loss contingencies as they are incurred. |
Derivative Financial Instruments | Derivative Financial Instruments We recognize all derivatives on our consolidated balance sheet at fair value. On the date that we enter into a derivative contract, we designate and document each derivative contract as one of the following at the time the contract is executed: (a) a hedge of a recognized asset or liability (fair value hedge); (b) a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability (cash flow hedge); (c) a hedge of a net investment in a foreign operation; or (d) a derivative instrument not designated as a hedging instrument. To qualify for hedge accounting, a derivative must be highly effective at reducing the risk associated with the exposure being hedged. In addition, the documentation must include the risk management objective and strategy. We assess and document quarterly the extent to which a derivative has been and is expected to continue to be effective in offsetting the changes in the fair value or the cash flows of the hedged item. To assess effectiveness, we use statistical methods, such as regression analysis, as well as non-statistical methods including dollar-offset analysis. For a fair value hedge, we record changes in the fair value of the derivative, to the extent that it is effective, and changes in the fair value of the hedged asset or liability attributable to the hedged risk in the same financial statement category as the hedged item on the face of the statement of operations. For a cash flow hedge, to the extent that it is effective, we record changes in the estimated fair value of the derivative in other comprehensive income. We subsequently reclassify these changes in estimated fair value to net income in the same period, or periods, that the hedged transaction affects earnings and in the same financial statement category as the hedged item. For derivative instruments not designated as a hedge for accounting purposes that were entered into as an economic hedge against changes in fair value of a recognized asset, we report changes in the fair value in the same financial statement category of the statement of operations as the changes in fair value of the related asset. For all other derivative instruments not designated as a hedging instrument, we report changes in their fair values in Other income (expense), net. If a derivative instrument in a cash flow hedge is terminated or the hedge designation is removed, we reclassify related amounts in accumulated other comprehensive income into earnings in the same period or periods during which the cash flows that were hedged affect earnings. In a period where we determine that it is probable that a hedged forecasted transaction will not occur, such as variable-rate interest payments on debt that has been repaid in advance, any related amounts in accumulated other comprehensive income are reclassified into earnings in that period. The cash collateral held by counterparties to our derivative agreements is included in Other assets. |
Convertible Preferred Stock | Convertible Preferred Stock We evaluate convertible preferred stock that we issue and determine if the preferred stock should be accounted for as equity or as debt. We also determine if the conversion feature of the preferred stock must be separated from the host contract. We evaluate the change of control provisions to determine if they could result in a redemption not solely under Ocwen’s control, in which case the preferred stock would be classified as “mezzanine” equity rather than permanent equity as part of Stockholders’ equity. We also evaluate the conversion option of the preferred stock to determine if it represents a Beneficial Conversion Feature (BCF). If we determine that the conversion option is a BCF, we determine the intrinsic value of the BCF — the difference between the price of common stock on the issue date and the conversion price multiplied by the number of shares of common stock into which the preferred shares can be converted — and account for it as a discount on the preferred stock with an offsetting increase in additional paid in capital. We determine the period over which the discount is to be amortized and report the amortization as a deemed dividend. |
Stock-Based Compensation | Stock-Based Compensation We measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. For equity awards with a service condition, we recognize the cost as compensation expense ratably over the vesting period. For equity awards with a market condition, we recognize the cost as compensation expense ratably over the expected life of the option that is derived from an options pricing model. When equity awards with a market condition meet their vesting requirements, any unrecognized compensation at the vesting date is recognized ratably over the vesting period. For equity awards with both a market condition and a service condition for vesting, we recognize cost as compensation expense over the requisite service period for each tranche of the award using the graded-vesting method. |
Income Taxes | Income Taxes We file consolidated federal income tax returns. We allocate consolidated income tax among all subsidiaries included in the consolidated return as if each subsidiary filed a separate return or, in certain cases, a consolidated return. We account for income taxes using the asset and liability method, which requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Additionally, we adjust deferred taxes to reflect estimated tax rate changes. We conduct periodic evaluations to determine whether it is more likely than not that some or all of our deferred tax assets will not be realized. Among the factors considered in this evaluation are estimates of future earnings, the future reversal of temporary differences and the impact of tax planning strategies that we can implement if warranted. We provide a valuation allowance for any portion of our deferred tax assets that, more likely than not, will not be realized. We recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. We recognize interest and penalties related to income tax matters in income tax expense. |
Basic and Diluted Earnings per Share | Basic and Diluted Earnings per Share We calculate basic earnings per share based upon the weighted average number of shares of common stock outstanding during the year. We calculate diluted earnings per share based upon the weighted average number of shares of common stock outstanding and all dilutive potential common shares outstanding during the year. The computation of diluted earnings per share includes the estimated impact of the exercise of the outstanding options to purchase common stock using the treasury stock method. The computation of diluted earnings per share also includes the potential shares of converted common stock associated with our previously outstanding Series A Perpetual Convertible Preferred Stock using the if-converted method. |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards Investments—Equity Method and Joint Ventures: Accounting for Investments in Qualified Affordable Housing Projects (ASU 2014-01) This Accounting Standards Update (ASU) requires an entity to make an accounting policy election to account for investments in qualified affordable housing projects using the proportional amortization method, if certain conditions are met. Under the proportional amortization method, an entity amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received and while recognizing the net investment performance in the statement of operations as a component of income tax expense (benefit). Our adoption of ASU 2014-01 on January 1, 2015 did not have a material impact on our consolidated financial condition or results of operations. Receivables—Troubled Debt Restructurings by Creditors: Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure (ASU 2014-04) This ASU clarifies when an in substance repossession or foreclosure occurs such that the loan receivable should be derecognized and the real estate property recognized. An in substance repossession or foreclosure occurs upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. Our adoption of ASU 2014-04 prospectively on January 1, 2015 did not have a material impact on our consolidated financial condition or results of operations. Presentation of Financial Statements and Property, Plant, and Equipment: Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity (ASU 2014-08) This ASU changes the criteria for reporting discontinued operations. Under this ASU, a discontinued operation is defined as a disposal of a component or group of components that is disposed of or is classified as held for sale and represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. The new standard no longer precludes presentation as a discontinued operation if (i) there are operations and cash flows of the component that have not been eliminated from the reporting entity’s ongoing operations, or (ii) there is significant continuing involvement with a component after its disposal. Our adoption of ASU 2014-08 on January 1, 2015 did not have a material impact on our consolidated financial condition or results of operations. Transfers and Servicing: Repurchase-to-Maturity Transactions, Repurchase Financings and Disclosures (ASU 2014-11) This ASU requires changes in the accounting for repurchase-to-maturity transactions and repurchase to financing arrangements. A repurchase-to-maturity transaction (repurchase agreement that matures at the same time as the transferred financial asset) will now be accounted for as a secured borrowing. For a repurchase financing arrangement (a type of repurchase agreement), a transfer of a financial asset executed contemporaneously with a repurchase agreement with the same counterparty will be accounted for separately, which will result in secured borrowing accounting for the repurchase agreement. Transferors will no longer apply the “linked” accounting model. Our adoption of ASU 2014-11 on January 1, 2015 did not have a material impact on our consolidated financial condition or results of operations. Compensation—Stock Compensation: Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period (ASU 2014-12) This ASU codifies a final consensus reached by the Emerging Issues Task Force (EITF) at its March 2014 meeting that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition rather than a condition that affects the grant-date fair value. We do not have any share-based payment awards outstanding that contain performance targets, and therefore, our adoption of ASU 2014-12 on January 1, 2015 did not have an impact on our consolidated financial condition or results of operations. Consolidation: Measuring the Financial Assets and the Financial Liabilities of a Consolidated Collateralized Financing Entity (ASU 2014-13) This ASU requires that when a reporting entity elects the measurement alternative included in this ASU for a consolidated collateralized financing entity, the reporting entity should measure both the financial assets and the financial liabilities of that collateralized financing entity in its consolidated financial statements using the more observable of the fair value of the financial assets and the fair value of the financial liabilities. A collateralized financing entity is a variable interest entity with no more than nominal equity that holds financial assets and issues beneficial interests in those financial assets; the beneficial interests have contractual recourse only to the related assets of the collateralized financing entity and are classified as financial liabilities. Our adoption of ASU 2014-13 on January 1, 2016 did not have a material impact on our consolidated financial condition or results of operations. Receivables—Troubled Debt Restructurings by Creditors: Classification of Certain Government-Guaranteed Mortgage Loans upon Foreclosure (ASU 2014-14) This ASU requires that a mortgage loan be derecognized and that a separate other receivable be recognized upon foreclosure if the following conditions are met: 1. The loan has a government guarantee that is not separable from the loan before foreclosure. 2. At the time of foreclosure, the creditor has the intent to convey the real estate property to the guarantor and make a claim on the guarantee, and the creditor has the ability to recover under that claim. 3. At the time of foreclosure, any amount of the claim that is determined on the basis of the fair value of the real estate is fixed. Upon foreclosure, the separate other receivable should be measured based on the amount of the loan balance (principal and interest) expected to be recovered from the guarantor. Our adoption of ASU 2014-14 prospectively on January 1, 2015 did not have a material impact on our consolidated financial condition or results of operations. Business Combinations: Pushdown Accounting - Amendments to SEC Paragraphs Pursuant to Staff Accounting Bulletin No. 115 (ASU 2015-08) This ASU 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. Recently Issued Accounting Standards Income Statement—Extraordinary and Unusual Items: Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items (ASU 2015-01) In January 2015, the FASB issued ASU 2015-01 to eliminate the concept of extraordinary items from GAAP, as part of its simplification initiative to reduce complexity in accounting standards while maintaining or improving the usefulness of the information provided to the users of financial statements. Under ASU 2015-01, the presentation and disclosure guidance for items that are unusual in nature or occur infrequently will be retained and will be expanded to include items that are both unusual in nature and infrequently occurring. Our prospective adoption of ASU 2015-01 on January 1, 2016 did not have a material impact on our consolidated financial condition or results of operations. Consolidation—Amendments to the Consolidation Analysis (ASU 2015-02) In February 2015, the FASB issued ASU 2015-02 to improve targeted areas of consolidation guidance for legal entities such as limited partnerships, limited liability corporations, and securitization structures (collateralized debt obligations, collateralized loan obligations, and mortgage-backed security transactions). ASU 2015-02 reduces the number of consolidation models from four to two by eliminating specialized guidance for limited partnerships and similar legal entities. It also places more emphasis on risk of loss when determining a controlling financial interest. A reporting organization may no longer have to consolidate a legal entity in certain circumstances based solely on its fee arrangement when certain criteria are met. Additionally, ASU 2015-02 reduces the frequency of the application of related-party guidance when determining a controlling financial interest in a VIE and changes consolidation conclusions for public and private companies that typically make use of limited partnerships or VIEs. Our adoption of ASU 2015-02 on January 1, 2016 did not have a material impact on our consolidated financial condition or results of operations. Interest—Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs (ASU 2015-03) In April 2015, the FASB issued ASU 2015-03 to simplify presentation of debt issuance costs as part of its simplification initiative to reduce complexity in accounting standards while maintaining or improving the usefulness of the information provided to the users of financial statements. Under ASU 2015-03, debt issuance costs related to a recognized debt liability will be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability and amortization of debt issuance costs will be reported as interest expense, consistent with the accounting for debt discounts. Recognition and measurement guidance for debt issuance costs will not be affected. Our retrospective adoption of ASU 2015-03 on January 1, 2016 did not have a material impact on our consolidated financial condition or results of operations. Intangibles—Goodwill and Other—Internal-Use Software: Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement (ASU 2015-05) In April 2015, the FASB issued ASU 2015-05 to help entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement as part of its simplification initiative to reduce complexity in accounting standards while maintaining or improving the usefulness of the information provided to the users of financial statements. ASU 2015-05 provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. Our prospective adoption of ASU 20 15-05 on January 1, 2016 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 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. Under ASU 2014-09, an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. 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 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. Our retrospective adoption of ASU 2015-15 on January 1, 2016 did not have a material impact on our consolidated financial condition or results of operations. Income Taxes: Balance Sheet Classification of Deferred Taxes (ASU 2015-17) In November 2015, the FASB issued ASU 2015-17, which requires that deferred tax assets and liabilities be classified as noncurrent in a classified statement of financial position, thereby aligning this presentation with International Financial Reporting Standards. The current requirement that deferred tax assets and liabilities of a tax-paying component of an entity be offset and presented as a single amount is not affected by this guidance. ASU 2015-17 will be effective for us on January 1, 2017, with early application permitted. An entity may apply the amendments either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. We are currently evaluating the effect of adopting this standard. Financial Instruments: Recognition and Measurement of Financial Assets and Financial Liabilities (ASU 2016-01) In January 2016, the FASB issued ASU 2016-01, which is intended to provide users with more useful information regarding the recognition, measurement, presentation, and disclosure of financial instruments and also improve the accounting model to better meet the requirements of today’s complex economic environment. Most changes in this ASU require the same information, but some changes will revise the geography of that information on the financial statements. ASU 2016-01 will be effective for us on January 1, 2018. Early adoption will be permitted only for the provision to record fair value changes for financial liabilities under the fair value option resulting from instrument-specific credit risk in other comprehensive income. An entity should apply the amendments in ASU 2016-01 by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. The amendments related to equity securities without readily determinable fair values (including disclosure requirements) should be applied prospectively to equity investments that exist as of the date of adoption of this ASU. We are currently evaluating the effect of adopting this standard. |
Organization, Business Enviro40
Organization, Business Environment, Basis of Presentation and Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Property and Equipment Useful Lives | We report premises and equipment at cost and, except for land, depreciate them over their estimated useful lives on a straight-line basis as follows: Computer hardware and software 2 – 3 years Buildings 40 years Leasehold improvements Term of the lease not to exceed useful life Furniture and fixtures 5 years Office equipment 5 years |
Securitizations and Variable 41
Securitizations and Variable Interests Entities (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Transfers and Servicing [Abstract] | |
Summary of Cash Flows Received from and Paid to Securitization Trusts Related to Transfers Accounted for as Sales Outstanding | 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 years ended December 31: 2015 2014 2013 Proceeds received from securitizations $ 4,970,454 $ 5,265,183 $ 7,871,481 Servicing fees collected 29,239 25,438 20,333 Purchases of previously transferred assets, net of claims reimbursed (2,863 ) 4,973 (358 ) $ 4,996,830 $ 5,295,594 $ 7,891,456 |
Schedule of Carrying Amounts of Assets that Relate to Continuing Involvement with Transferred Forward Loans | 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 December 31: 2015 2014 Carrying value of assets: Mortgage servicing rights, at amortized cost $ 54,729 $ 82,542 Mortgage servicing rights, at fair value 236 2,840 Advances and match funded advances 26,968 1,236 UPB of loans transferred 7,471,025 9,353,187 Maximum exposure to loss $ 7,552,958 $ 9,439,805 |
Business Acquisitions (Tables)
Business Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Business Acquisition [Line Items] | |
Schedule of Purchase Price Allocation | The following table summarizes the final fair values of assets acquired and liabilities assumed as part of the ResCap acquisition: Cash $ — MSRs (1) 401,314 Advances and match funded advances (1) 1,786,409 Premises and equipment 16,423 Receivables and other assets 2,989 Liability for indemnification obligations (49,500 ) Other liabilities (25,125 ) Total identifiable net assets 2,132,510 Goodwill 211,419 Total consideration $ 2,343,929 (1) As of the acquisition date, the purchase of certain MSRs from ResCap was not complete pending the receipt of certain consents and court approvals. Subsequent to the acquisition, we obtained the required consents and approvals for a portion of these MSRs and paid an additional purchase price of $174.6 million to acquire the MSRs and related advances, including $54.2 million in 2014. The purchase price allocation has been revised to include the resulting adjustments to MSRs, advances and goodwill. |
Summary of Post-Acquisition Results of Operations | The following table presents the revenues and earnings of the ResCap operations that are included in our Consolidated Statements of Operations from the acquisition date of February 15, 2013 through December 31, 2013: Revenues $ 684,935 Net income $ 16,424 |
Summary of Pro Forma Results of Operations | The following table presents supplemental pro forma information for Ocwen for the year ended December 31, 2013 as if the ResCap Acquisition occurred on January 1, 2012. Pro forma adjustments include: • conforming servicing revenues to the revenue recognition policies followed by Ocwen; • conforming the accounting for MSRs to the valuation and amortization policies of Ocwen; • adjusting interest expense to eliminate the pre-acquisition interest expense of ResCap and to recognize interest expense as if the acquisition-related debt of Ocwen had been outstanding at January 1, 2012; and • reporting acquisition-related charges for professional services as if they had been incurred in 2012 rather than 2013. (Unaudited) Revenues $ 2,086,010 Net income $ 285,302 |
Schedule of Reconciliation of Beginning and Ending Liability Balance for Termination Costs | The following table provides a reconciliation of the beginning and ending liability balances for these termination costs for the years ended December 31, 2013 , 2014 and 2015 : Employee termination benefits Lease and other contract termination costs Total Liability balance as at December 31, 2012 $ — $ 4,891 $ 4,891 Additions charged to operations Servicing 15,901 — 15,901 Lending 651 — 651 Corporate Items and Other 4,131 — 4,131 20,683 — 20,683 Amortization of discount — 347 347 Payments (15,867 ) (2,784 ) (18,651 ) Liability balance as at December 31, 2013 4,816 2,454 7,270 Additions charged to operations Servicing 14,032 713 14,745 Lending (114 ) — (114 ) Corporate Items and Other 1,271 2,184 3,455 15,189 2,897 18,086 Amortization of discount — 148 148 Payments (18,337 ) (3,260 ) (21,597 ) Liability balance as at December 31, 2014 1,668 2,239 3,907 Additions charged to operations Servicing 2,432 — 2,432 Lending — — — Corporate Items and Other 28 433 461 2,460 433 2,893 Amortization of discount — 159 159 Payments (3,415 ) (1,248 ) (4,663 ) Liability balance as at December 31, 2015 $ 713 $ 1,583 $ 2,296 |
Sales of Advances and MSRs (Tab
Sales of Advances and MSRs (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Transfers and Servicing of Financial Assets [Abstract] | |
Summary of MSRs and Advances Sold | The following table provides a summary of the MSRs and advances sold during the years ended December 31: 2015 (1) 2014 (2) 2013 (3) Mortgage Servicing Rights Advances and Match Funded Advances Mortgage Servicing Rights Advances and Match Funded Advances Mortgage Servicing Rights Advances and Match Funded Advances Sales price of assets sold: Accounted for as a sale $ 775,351 $ 562,325 $ 287 $ 1,054 $ 34,754 $ 3,839,954 Accounted for as a financing — — 123,551 88,981 448,928 — 775,351 562,325 123,838 90,035 483,682 3,839,954 Amounts due from purchaser at December 31 (18,615 ) (76,014 ) — — — — Amounts paid to purchaser for estimated representation and warranty obligations, compensatory fees and related indemnification obligations (69,898 ) — — — — — Amounts received from (paid to) purchaser for items outstanding at the end of the previous year — — — — (1,173 ) 2,583 Total net cash received $ 686,838 $ 486,311 $ 123,838 $ 90,035 $ 482,509 $ 3,842,537 (1) In 2015, we sold Agency MSRs relating to loans with a UPB of $87.6 billion . (2) In 2014, we issued $123.6 million of OASIS Series 2014-1 Notes secured by Ocwen-owned MSRs relating to Freddie Mac mortgages of $11.8 billion UPB. (3) In 2013, we sold to Home Loan Servicing Solutions, Ltd. (HLSS) the Rights to MSRs relating to loans with a UPB of $119.7 billion for $417.2 million and sold the related servicing advances of $3.8 billion . |
Fair Value (Tables)
Fair Value (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Schedule of Carrying Amounts and Estimated Fair Values of Financial Instruments and Nonfinancial Assets Measured at Fair Value on a Recurring or Non-recurring basis or Disclosed, but not Carried, at Fair Value | 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 December 31: 2015 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 $ 309,054 $ 309,054 $ 401,120 $ 401,120 Loans held for sale, at lower of cost or fair value (b) 3 104,992 104,992 87,492 87,492 Total Loans held for sale $ 414,046 $ 414,046 $ 488,612 $ 488,612 Loans held for investment - Reverse mortgages, at fair value (a) 3 $ 2,488,253 $ 2,488,253 $ 1,550,141 $ 1,550,141 Advances and match funded advances (c) 3 2,151,066 2,151,066 3,303,356 3,303,356 Receivables, net (c) 3 286,981 286,981 270,596 270,596 Mortgage-backed securities, at fair value (a) 3 7,985 7,985 7,335 7,335 Financial liabilities: Match funded liabilities (c) 3 $ 1,584,049 $ 1,581,786 $ 2,090,247 $ 2,090,247 Financing liabilities: HMBS-related borrowings, at fair value (a) 3 $ 2,391,362 $ 2,391,362 $ 1,444,252 $ 1,444,252 Financing liability - MSRs pledged (a) 3 541,704 541,704 614,441 614,441 Other (c) 3 156,189 131,940 199,948 189,648 Total Financing liabilities $ 3,089,255 $ 3,065,006 $ 2,258,641 $ 2,248,341 Other secured borrowings: Senior secured term loan (c) 2 $ 397,103 $ 397,956 $ 1,273,219 $ 1,198,227 Other (c) 3 385,320 385,320 460,472 460,472 Total Other secured borrowings $ 782,423 $ 783,276 $ 1,733,691 $ 1,658,699 Senior unsecured notes (c) 2 $ 350,000 $ 318,063 $ 350,000 $ 321,563 Derivative financial instruments assets (liabilities) (a): Interest rate lock commitments 2 $ 6,080 $ 6,080 $ 6,065 $ 6,065 Forward mortgage-backed securities trades 1 295 295 (2,854 ) (2,854 ) Interest rate caps 3 2,042 2,042 567 567 Mortgage servicing rights: Mortgage servicing rights, at fair value (a) 3 $ 761,190 $ 761,190 $ 93,901 $ 93,901 Mortgage servicing rights, at amortized cost (c) (d) 3 377,379 461,555 1,820,091 2,237,703 Total Mortgage servicing rights $ 1,138,569 $ 1,222,745 $ 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 December 31, 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 December 31, 2015 was $146.5 million , net of a valuation allowance of $17.3 million . |
Summary of Reconciliation of the Changes in Fair Value of Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis | 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: Year Ended December 31, 2015 Loans Held for Investment - Reverse Mortgages HMBS-Related Borrowings Mortgage-Backed Securities Financing Liability - MSRs Pledged Derivatives MSRs Total Beginning balance $ 1,550,141 $ (1,444,252 ) $ 7,335 $ (614,441 ) $ 567 $ 93,901 $ (406,749 ) Purchases, issuances, sales and settlements: Purchases — — — — 2,506 1,007 3,513 Issuances 1,008,065 (1,024,361 ) — — — (2,428 ) (18,724 ) Transfer from MSRs carried at amortized cost — — — — — 839,157 839,157 Sales — — — — — (72,274 ) (72,274 ) Settlements (1) (151,134 ) 153,016 — 72,737 346 — 74,965 856,931 (871,345 ) — 72,737 2,852 765,462 826,637 Total realized and unrealized gains and (losses) (2): Included in earnings 81,181 (75,765 ) 650 — (1,377 ) (98,173 ) (93,484 ) Included in Other comprehensive income — — — — — — — 81,181 (75,765 ) 650 — (1,377 ) (98,173 ) (93,484 ) Transfers in and / or out of Level 3 — — — — — — — Ending balance $ 2,488,253 $ (2,391,362 ) $ 7,985 $ (541,704 ) $ 2,042 $ 761,190 $ 326,404 Year Ended December 31, 2014 Loans Held for Investment - Reverse Mortgages HMBS-Related Borrowings Mortgage-Backed Securities Financing Liability - MSRs Pledged Derivatives MSRs Total Beginning balance $ 618,018 $ (615,576 ) $ — $ (633,804 ) $ 442 $ 116,029 $ (514,891 ) Purchases, issuances, sales and settlements: Purchases — — 7,677 — 787 — 8,464 Issuances 816,881 (783,009 ) — — — — 33,872 Transfer from Loans held for sale, at fair value 110,874 — — — 110,874 Sales — — — — — — — Settlements (99,923 ) 47,077 — 19,363 — — (33,483 ) 827,832 (735,932 ) 7,677 19,363 787 — 119,727 Total realized and unrealized gains and (losses): Included in earnings 104,291 (92,744 ) (342 ) — (662 ) (22,128 ) (11,585 ) Included in Other comprehensive income — — — — — — 104,291 (92,744 ) (342 ) — (662 ) (22,128 ) (11,585 ) Transfers in and / or out of Level 3 — — — — — — Ending balance $ 1,550,141 $ (1,444,252 ) $ 7,335 $ (614,441 ) $ 567 $ 93,901 $ (406,749 ) Year Ended December 31, 2013 Loans Held for Investment - Reverse Mortgages HMBS-Related Borrowings Financing Liability - MSRs Pledged Derivatives MSRs Total Beginning balance $ — $ — $ (303,705 ) $ (10,668 ) $ 85,213 $ (229,160 ) Purchases, issuances, sales and settlements: Purchases 10,251 (10,179 ) — 498 — 570 Issuances 609,555 (604,991 ) (417,167 ) — — (412,603 ) Sales — — — 24,156 — 24,156 Settlements (5,886 ) 5,440 87,068 (1,241 ) — 85,381 613,920 (609,730 ) (330,099 ) 23,413 — (302,496 ) Total realized and unrealized gains and (losses) (2): Included in earnings 4,098 (5,846 ) — 60 30,816 29,128 Included in Other comprehensive income — — — (12,363 ) — (12,363 ) 4,098 (5,846 ) — (12,303 ) 30,816 16,765 Transfers in and / or out of Level 3 — — — — — — Ending balance $ 618,018 $ (615,576 ) $ (633,804 ) $ 442 $ 116,029 $ (514,891 ) (1) Settlements of Financing liability - MSRs pledged for 2015 and 2014 include reimbursements of $2.2 million and $2.0 million , respectively, to NRZ related to servicing terminations. (2) Total losses attributable to derivative financial instruments still held at December 31, 2015 and 2014 were $1.0 million and $0.7 million for 2015 and 2014 , respectively. Total losses for 2015 attributable to MSRs still held at December 31, 2015 were $90.3 million . |
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 December 31, 2015 valuation include: Weighted average prepayment speed 11.34 % Weighted average delinquency rate 13.27 % Advance financing cost 5-year swap Interest rate for computing float earnings 5-year swap Weighted average discount rate 9.41 % Weighted average cost to service (in dollars) $ 92 |
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 December 31, 2015 valuation include: Agency Non-Agency Weighted average prepayment speed 9.91 % 16.83 % Weighted average delinquency rate 0.82 % 27.99 % 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 % 15.03 % Weighted average cost to service (in dollars) $ 71 $ 321 |
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 December 31, 2015 include: Weighted average prepayment speed 17.43 % Weighted average delinquency rate 29.83 % Advance financing cost 1 ML plus 3.5% Interest rate for computing float earnings 1ML Weighted average discount rate 14.92 % Weighted average cost to service (in dollars) $ 326 |
Loans Held for Sale (Tables)
Loans Held for Sale (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Receivables [Abstract] | |
Summary of Activity in the Balance of Loans Held for Sale, at Fair Value | The following table summarizes the activity in the balance during the years ended December 31: 2015 2014 2013 Beginning balance $ 401,120 $ 503,753 $ 426,480 Originations and purchases 3,944,509 4,967,767 8,106,742 Proceeds from sales (4,061,217 ) (5,001,935 ) (7,999,235 ) Principal collections (8,647 ) (13,300 ) (653 ) Transfers to loans held for investment - reverse mortgages — (110,874 ) — Gain (loss) on sale of loans 42,053 49,533 (26,981 ) Other (1) (8,764 ) 6,176 (2,600 ) Ending balance $ 309,054 $ 401,120 $ 503,753 (1) Other includes the increase (decrease) in fair value of $(9.1) million , $6.2 million and $(3.7) million for 2015 , 2014 and 2013 , respectively. |
Summary of Activity in the Balance of Loans Held for Sale, at Lower of Cost or Fair Value | The following table summarizes the activity in the balance during the years ended December 31: 2015 2014 2013 Beginning balance $ 87,492 $ 62,907 $ 82,866 Purchases 1,056,172 2,462,573 1,632,390 Proceeds from sales (1,001,939 ) (2,067,965 ) (1,036,316 ) Principal payments (53,400 ) (262,196 ) (432,423 ) Transfers to accounts receivable (53,468 ) (114,675 ) (218,629 ) Transfers to real estate owned (18,594 ) (8,808 ) (4,775 ) Gain on sale of loans 43,449 31,853 35,087 Decrease (increase) in valuation allowance 35,018 (18,965 ) (10,644 ) Other 10,262 2,768 15,351 Ending balance (1) (2) $ 104,992 $ 87,492 $ 62,907 (1) At December 31, 2015 , 2014 and 2013 , the balances include $85.9 million , $42.0 million and $43.1 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. (2) At December 31, 2015 , 2014 and 2013 , the balances are net of valuation allowances of $14.7 million , $49.7 million and $30.7 million , respectively. The decrease in the valuation allowance during 2015 includes $37.8 million resulting from the reversal of the allowance associated with loans that were sold during the year. The increase in the valuation allowance during 2014 and 2013 includes $20.4 million and $15.7 million , respectively, resulting from transfers of 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. |
Summary of Activity in Gain on Loans Held for Sale, Net | The following table summarizes the activity in Gain on loans held for sale, net, during the years ended December 31: 2015 2014 2013 Gain on sales of loans $ 152,970 $ 168,449 $ 82,518 Change in fair value of IRLCs 14 (25,822 ) 523 Change in fair value of loans held for sale (8,525 ) 10,489 (1,709 ) Gain (loss) on economic hedge instruments (8,675 ) (17,214 ) 42,732 Other (815 ) (1,605 ) (2,370 ) $ 134,969 $ 134,297 $ 121,694 |
Advances (Tables)
Advances (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Advances [Abstract] | |
Schedule of Advance Payments by Financial Institution on Foreclosed Properties | Advances, net, which represent payments made on behalf of borrowers or on foreclosed properties, consisted of the following at December 31: 2015 2014 Servicing: Principal and interest $ 81,654 $ 128,217 Taxes and insurance 275,528 467,891 Foreclosures, bankruptcy and other 125,017 363,374 482,199 959,482 Corporate Items and Other 4,000 4,466 486,199 963,948 Allowance for losses (41,901 ) (70,034 ) $ 444,298 $ 893,914 |
Schedule of Activity in Advances | The following table summarizes the activity in advances for the years ended December 31: 2015 2014 2013 Beginning balance $ 893,914 $ 890,832 $ 184,463 Acquisitions (1) — 99,319 733,438 Transfers to match funded advances — (10,156 ) (142,286 ) Sales of advances (2) (253,335 ) — (200,749 ) New advances (collections of advances), net and charge-offs (224,414 ) (54,424 ) 328,151 Decrease (increase) in allowance for losses (3) 28,133 (31,657 ) (12,185 ) Ending balance $ 444,298 $ 893,914 $ 890,832 (1) Servicing advances acquired through business acquisitions and asset acquisitions, primarily in connection with the acquisition of MSRs. Acquisitions in 2014 include advances acquired in connection with the purchase of loans through the Ginnie Mae EBO program. (2) Servicing advances sold in connection with sales of MSRs and Rights to MSRs, which met the requirements for sale accounting and which were derecognized from our financial statements at the time of the sale. However, advances sold during 2014 in connection with the sale of loans purchased through the Ginnie Mae EBO program did not qualify as sales for accounting purposes and were accounted for as a financing. (3) The decrease in the allowance for losses in 2015 includes $68.9 million of charge-offs. |
Match Funded Advances (Tables)
Match Funded Advances (Tables) | 12 Months Ended |
Dec. 31, 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 December 31: 2015 2014 Principal and interest $ 948,376 $ 1,349,048 Taxes and insurance 608,404 847,064 Foreclosures, bankruptcy, real estate and other 149,988 213,330 $ 1,706,768 $ 2,409,442 |
Schedule of Activity In Match Funded Advances | The following table summarizes the activity in match funded advances for the years ended December 31: 2015 2014 2013 Beginning balance $ 2,409,442 $ 2,552,383 $ 3,049,244 Acquisitions (1) — 85,521 3,589,773 Transfers from advances (2) — 10,156 142,286 Sales of advances (308,990 ) — (3,639,205 ) Collections of pledged advances, net of new advances and other (393,684 ) (238,618 ) (589,715 ) Ending balance $ 1,706,768 $ 2,409,442 $ 2,552,383 (1) Servicing advances acquired through business acquisitions and asset acquisitions in connection with the acquisition of MSRs, that were pledged to advance facilities at the date of acquisition. (2) New servicing advances initially classified as Advances at the date of payment and subsequently pledged to advance financing facilities. |
Mortgage Servicing (Tables)
Mortgage Servicing (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Transfers and Servicing [Abstract] | |
Summary of Activity in Carrying Value of Amortization Method Servicing Assets | Servicing Assets. The following table summarizes the activity in the carrying value of amortization method servicing assets for the years ended December 31. 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 2013 Beginning balance $ 1,820,091 $ 1,953,352 $ 678,937 Fair value election - transfer of MSRs carried at fair value (1) (787,142 ) — — Additions recognized in connection with business acquisitions : OSI — 9,008 — ResCap acquisition — 11,370 389,944 Liberty acquisition — — 2,840 Additions recognized in connection with asset acquisitions: Ally MSR transaction — — 683,787 OneWest MSR transaction — 14,408 398,804 Greenpoint MSR transaction — 3,690 33,647 Other 12,356 17,228 8,764 Additions recognized on the sale of mortgage loans 34,961 63,310 74,784 Sales (2) (586,352 ) (137 ) (28,403 ) Servicing transfers and adjustments — (1,763 ) (8,883 ) 493,914 2,070,466 2,234,221 (Increase) decrease in impairment valuation allowance (3) (17,341 ) — 2,375 Amortization (99,194 ) (250,375 ) (283,244 ) Ending balance $ 377,379 $ 1,820,091 $ 1,953,352 Estimated fair value at end of year $ 461,555 $ 2,237,703 $ 2,441,719 (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, based on a different strategy for managing the risks of the underlying portfolio compared to our other MSR classes. 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 $9.4 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 . (2) We retained the subservicing on MSRs that we sold in 2013. The gain on the sale of $5.1 million was deferred and is recognized in earnings over the life of the subservicing contract. (3) Impairment of MSRs is recognized in Servicing and origination expense in the Consolidated Statements of Operations. |
Schedule of Estimated Amortization Expense for MSRs | The estimated amortization expense for MSRs, calculated based on assumptions used at December 31, 2015 , is projected as follows over the next five years: 2016 $ 46,723 2017 36,427 2018 38,564 2019 38,773 2020 34,425 |
Summary of Activity Related to Fair Value Servicing Assets | The following table summarizes the activity related to fair value servicing assets for the years ended December 31: 2015 2014 2013 Agency Non-Agency Total Agency Agency Beginning balance $ 93,901 $ — $ 93,901 $ 116,029 $ 85,213 Fair value election - transfer of MSRs carried at amortized cost — 787,142 787,142 — — Cumulative effect of fair value election — 52,015 52,015 — — Sales (70,930 ) (1,344 ) (72,274 ) — — Additions recognized on the sale of residential mortgage loans — 1,007 1,007 — — Servicing transfers and adjustments — (2,428 ) (2,428 ) — — Changes in fair value (1): Changes in valuation inputs or other assumptions (639 ) 10,684 10,045 (15,028 ) 44,199 Realization of expected future cash flows and other changes (7,261 ) (100,957 ) (108,218 ) (7,100 ) (13,383 ) Ending balance $ 15,071 $ 746,119 $ 761,190 $ 93,901 $ 116,029 (1) Changes in fair value are recognized in Servicing and origination expense in the Consolidated Statements of Operations. |
Summary of Estimated Change in the Value of MSRs Carried at Fair Value | The following table summarizes the estimated change in the value of the MSRs that we carry at fair value as of December 31, 2015 given hypothetical shifts in lifetime prepayments and yield assumptions: Adverse change in fair value 10% 20% Weighted average prepayment speeds $ (65,518 ) $ (140,457 ) Discount rate (option-adjusted spread) $ (17,407 ) $ (34,492 ) |
Schedule of Composition of Primary Servicing and Subservicing Portfolios by Type of Property Serviced as Measured by UPB | 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 servicing rights while subservicing represents all other loans. The UPB of assets serviced for others are not included on our Consolidated Balance Sheets. Residential Commercial Total UPB at December 31, 2015 Servicing $ 230,132,729 $ — $ 230,132,729 Subservicing 20,833,383 105,268 20,938,651 $ 250,966,112 $ 105,268 $ 251,071,380 UPB at December 31, 2014 Servicing $ 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 December 31, 2013 Servicing $ 397,546,635 $ — $ 397,546,635 Subservicing 67,104,697 400,502 67,505,199 $ 464,651,332 $ 400,502 $ 465,051,834 |
Summary of Geographic Distributions of UPB and Count of Residential Loans and Real Estate Serviced | At December 31, 2015 , the geographic distribution of the UPB and count of residential loans and real estate we serviced was as follows: Amount Count California $ 60,567,867 234,371 Florida 21,004,999 147,454 New York 20,735,251 86,951 New Jersey 11,495,328 55,175 Texas 11,393,316 127,397 Other 125,769,351 973,414 $ 250,966,112 1,624,762 |
Schedule of Components of Servicing and Subservicing Fees | The following table presents the components of servicing and subservicing fees for the years ended December 31: 2015 2014 2013 Loan servicing and subservicing fees: Servicing $ 1,148,278 $ 1,363,800 $ 1,246,882 Subservicing 58,384 128,797 146,605 1,206,662 1,492,597 1,393,487 Home Affordable Modification Program (HAMP) fees 135,036 141,121 152,812 Late charges 82,690 121,618 115,826 Loan collection fees 31,763 33,983 31,022 Custodial accounts (float earnings) 15,870 6,693 5,332 Other 59,776 98,163 125,080 $ 1,531,797 $ 1,894,175 $ 1,823,559 |
Receivables (Tables)
Receivables (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Receivables [Abstract] | |
Schedule of Receivables | Receivables consisted of the following at December 31: 2015 2014 Servicing: Amount due on sales of mortgage servicing rights and advances $ 94,629 $ — Government-insured loan claims (1) 71,405 52,955 Reimbursable expenses 29,856 32,387 Due from custodial accounts 13,800 11,627 Other servicing receivables 32,879 29,516 242,569 126,485 Income taxes receivable 53,519 68,322 Due from related parties (2) — 58,892 Other receivables (3) 29,818 43,690 325,906 297,389 Allowance for losses (1) (38,925 ) (26,793 ) $ 286,981 $ 270,596 (1) At December 31, 2015 and 2014 , the total allowance for losses 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 December 31, 2015 and 2014 were $20.6 million and $10.0 million , respectively. (2) 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. See Note 24 — Related Party Transactions for additional information. (3) At December 31, 2014, Other receivables includes $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. |
Premises and Equipment (Tables)
Premises and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Premises and Equipment | Premises and equipment are summarized as follows at December 31: 2015 2014 Computer hardware and software $ 68,228 $ 55,132 Leasehold improvements 23,326 28,549 Office equipment and other 11,761 13,268 Buildings 9,689 13,049 Furniture and fixtures 5,839 12,308 118,843 122,306 Less accumulated depreciation and amortization (61,217 ) (78,996 ) $ 57,626 $ 43,310 |
Other Assets (Tables)
Other Assets (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Other Assets [Abstract] | |
Schedule of Other Assets | Other assets consisted of the following at December 31: 2015 2014 Contingent loan repurchase asset (1) $ 346,984 $ 274,265 Debt service accounts (2) 87,328 91,974 Prepaid expenses (3) 69,805 17,957 Prepaid lender fees and debt issuance costs, net (4) 43,997 31,337 Real estate 20,489 16,720 Prepaid income taxes (5) 11,749 16,450 Mortgage-backed securities, at fair value 7,985 7,335 Derivatives, at fair value 6,367 6,065 Other 16,292 28,708 $ 610,996 $ 490,811 (1) In connection with the Ginnie Mae EBO program, 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 loans on our consolidated balance sheets 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 a 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. (3) In connection with the sale of Agency MSRs in 2015, we placed $52.9 million in escrow for the payment of representation, warranty and indemnification claims associated with the underlying loans serviced. Prepaid expenses at December 31, 2015 includes the remaining balance of $41.3 million . (4) We amortize these costs to the earlier of the scheduled amortization date, contractual maturity date or prepayment date of the debt. (5) The deferred tax effects of intra-entity transfers of MSRs have been recognized as prepaid income taxes and are being amortized to Income tax expense over a 7 -year period. |
Borrowings (Tables)
Borrowings (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of Match Funded Liabilities | Match funded liabilities are comprised of the following at December 31: Borrowing Type Interest Rate Maturity (1) Amortization Date (1) Available Borrowing Capacity (2) 2015 2014 Ocwen Freddie Servicer Advance Receivables Trust Series 2012-ADV1 (3) 1-Month LIBOR (1ML) (4) + 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 + 239 bps Oct. 2045 Oct. 2015 — — 519,634 Advance Receivables Backed Notes, Series 2013-VF2, Cost of Funds + 429 bps Oct. 2045 Oct. 2015 — — 32,919 Advance Receivables Backed Notes, Series 2014-VF3, 1ML + 235 bps (7) Sep. 2046 Sep. 2016 29,034 132,651 552,553 Advance Receivables Backed Notes - Series 2014-VF3, 1ML + 300 bps (7) Sep. 2046 Sep. 2016 1,294 6,330 — Advance Receivables Backed Notes - Series 2014-VF3, 1ML + 425 bps (7) Sep. 2046 Sep. 2016 1,458 6,977 — Advance Receivables Backed Notes - Series 2014-VF3, 1ML + 575 bps (7) Sep. 2046 Sep. 2016 3,829 18,427 — Borrowing Type Interest Rate Maturity (1) Amortization Date (1) Available Borrowing Capacity (2) 2015 2014 Advance Receivables Backed Notes - Series 2014-VF4, Class A (8) 1ML + 235 bps (8) Sep. 2046 Sep. 2016 29,034 132,651 552,553 Advance Receivables Backed Notes - Series 2014-VF4, Class B (8) 1ML + 300 bps (8) Sep. 2046 Sep. 2016 1,294 6,330 — Advance Receivables Backed Notes - Series 2014-VF4, Class C (8) 1ML + 425 bps (8) Sep. 2046 Sep. 2016 1,458 6,977 — Advance Receivables Backed Notes - Series 2014-VF4, Class D (8) 1ML + 575 bps (8) Sep. 2046 Sep. 2016 3,829 18,427 — Advance Receivables Backed Notes - Series 2015-VF5, Class A (9) 1ML + 235 bps (9) Sep. 2046 Sep. 2016 29,033 132,652 — Advance Receivables Backed Notes - Series 2015-VF5, Class B (9) 1ML + 300 bps (9) Sep. 2046 Sep. 2016 1,294 6,330 — Advance Receivables Backed Notes - Series 2015-VF5, Class C (9) 1ML + 425 bps (9) Sep. 2046 Sep. 2016 1,458 6,977 — Advance Receivables Backed Notes - Series 2015-VF5, Class D (9) 1ML + 575 bps (9) Sep. 2046 Sep. 2016 3,829 18,427 — 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 — Advance Receivables Backed Notes - Series 2015-T2, Class A (10) 2.5320% Nov. 2046 Nov. 2016 — 161,973 — Advance Receivables Backed Notes - Series 2015-T2, Class B (10) 3.3720% Nov. 2046 Nov. 2016 — 7,098 — Advance Receivables Backed Notes - Series 2015-T2, Class C (10) 3.7660% Nov. 2046 Nov. 2016 — 8,113 — Advance Receivables Backed Notes - Series 2015-T2, Class D (10) 4.2580% Nov. 2046 Nov. 2016 — 22,816 — Advance Receivables Backed Notes - Series 2015-T3, Class A (10) 3.2110% Nov. 2047 Nov. 2017 — 310,195 — Advance Receivables Backed Notes - Series 2015-T3, Class B (10) 3.7040% Nov. 2047 Nov. 2017 — 17,695 — Borrowing Type Interest Rate Maturity (1) Amortization Date (1) Available Borrowing Capacity (2) 2015 2014 Advance Receivables Backed Notes - Series 2015-T3, Class C (10) 4.1960% Nov. 2047 Nov. 2017 — 19,262 — Advance Receivables Backed Notes - Series 2015-T3, Class D (10) 4.6870% Nov. 2047 Nov. 2017 — 52,848 — Total Ocwen Master Advance Receivables Trust (OMART) 106,844 1,393,156 1,657,659 Advance Receivables Backed Notes, Series 2014-VF1, Cost of Funds + 265 bps Dec. 2046 Dec. 2016 14,350 31,343 21,192 Advance Receivables Backed Notes, Series 2014-VF1, Cost of Funds + 425 bps Dec. 2046 Dec. 2016 1,902 4,157 13,598 Advance Receivables Backed Notes, Series 2014-VF1, Cost of Funds + 465 bps Dec. 2046 Dec. 2016 2,096 4,564 10,224 Advance Receivables Backed Notes, Series 2014-VF1, Cost of Funds + 515 bps Dec. 2046 Dec. 2016 5,237 11,351 14,000 Total Ocwen Servicer Advance Receivables Trust III (OSARTIII) 23,585 51,415 59,014 Advance Receivables Backed Notes, Series 2015-VF1, 1ML + 212.5 bps Jun. 2046 Jun. 2016 8,584 112,882 — Advance Receivables Backed Notes, Series 2015-VF1, 1ML + 300 bps Jun. 2046 Jun. 2016 599 12,268 — Advance Receivables Backed Notes, Series 2015-VF1, 1ML + 350 bps Jun. 2046 Jun. 2016 649 5,951 — Advance Receivables Backed Notes, Series 2015-VF1, 1ML + 425 bps Jun. 2046 Jun. 2016 690 8,377 — Total Ocwen Freddie Advance Funding (OFAF) (12) 10,522 139,478 — $ 140,951 $ 1,584,049 $ 2,090,247 Weighted average interest rate 3.15 % 1.97 % (1) The amortization date of our facilities is the date on which the revolving period ends under each advance facility note and repayment of the outstanding balance must begin if the note is not renewed or extended. The maturity date is the date on which all outstanding balances must be repaid. In all 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 outstanding, and any new advances are ineligible to be financed. (2) Borrowing capacity is available to us provided that we have additional eligible collateral to pledge. Collateral may only be pledged to one facility. At December 31, 2015 , $24.5 million of the available borrowing capacity could be used based on the amount of eligible collateral that had been pledged. (3) We repaid this facility in full in June 2015 from the proceeds of the OFAF facility. (4) 1-Month LIBOR was 0.43% and 0.17% at December 31, 2015 and 2014 , respectively. (5) We voluntarily terminated this advance facility on January 30, 2015 . (6) The OMART Series 2013-VF2 Notes were repaid in full on September 18, 2015 . (7) On September 18, 2015, the Series 2014-VF3 Notes, Class B, C and D Notes, a series of variable funding notes under our OMART facility, were issued, and the existing Class A Note was canceled and a new Class A Note was issued. During 2015, we negotiated a series of reductions in the combined maximum borrowing capacity of the Series 2014-VF3 Notes from $600.0 million at December 31, 2014 to $200.0 million at December 31, 2015 . There is a ceiling of 75 bps for 1 ML in determining the interest rate for these 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. During 2015, we negotiated a series of reductions in the combined maximum borrowing capacity of the Series 2014-VF4 Notes from $600.0 million at December 31, 2014 to $200.0 million at December 31, 2015 . There is a ceiling 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. We negotiated a series of reductions in the combined maximum borrowing capacity of the Series 2015-VF5 Notes from $450.0 million at September 18, 2015 to $200.0 million at December 31, 2015 . There is a ceiling of 75 bps for 1 ML in determining the interest for variable rate Notes. (10) On November 13, 2015, we issued the Series 2015-T2 and Series 2015 T-3 Notes under our OMART facility. Under the terms of the agreement, we must continue to borrow the full amount of the Series 2015-T2 and T-3 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. (11) Beginning April 23, 2015, the maximum borrowing under the OSART III facility decreased by $6.3 million per month until it reduced to $75.0 million . On December 21, 2015, we renewed this facility for an additional year and maintained the maximum borrowing capacity. (12) We entered into OFAF facility on June 10, 2015, and issued the Series 2015-T1 and Series 2015-T2 Term Notes on June 26, 2015. The Series 2015-T2 Notes with a combined borrowing capacity of $155.0 million were fully repaid on September 15, 2015 , and the Series 2015-T1 Notes with a combined borrowing capacity of $70.0 million were fully repaid on November 16, 2015 . On November 20, 2015, the combined borrowing capacity of the Series 2015-VF1 Notes issued under this facility was reduced to $150.0 million . |
Schedule of Financing Liabilities | Financing liabilities are comprised of the following at December 31: Borrowings Collateral Interest Rate Maturity 2015 2014 Servicing: Financing liability – MSRs pledged MSRs (1) (1) $ 541,704 $ 614,441 Secured Notes, Ocwen Asset Servicing Income Series, Series 2014-1 (2) MSRs (2) Feb. 2028 96,546 111,459 Financing liability – Advances pledged (3) Advances on loans (3) (3) 59,643 88,489 697,893 814,389 Lending: HMBS-related borrowings (4) Loans held for investment 1ML + 248 bps (4) 2,391,362 1,444,252 $ 3,089,255 $ 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 December 31: Borrowings Collateral Interest Rate Maturity Available Committed Borrowing Capacity 2015 2014 Servicing: SSTL (1) (1) 1-Month Euro-dollar rate + 425 bps with a Eurodollar floor of 125 bps Feb. 2018 $ — $ 398,454 $ 1,277,250 Repurchase agreement (2) Loans held for sale (LHFS) 1ML + 200 - 345 bps Sep. 2016 7,027 42,973 32,018 7,027 441,427 1,309,268 Borrowings Collateral Interest Rate Maturity Available Committed Borrowing Capacity 2015 2014 Lending: Master repurchase agreement (3) LHFS 1ML + 200 bps Aug. 2016 43,774 156,226 208,010 Participation agreement (4) LHFS N/A Apr. 2016 — 49,897 41,646 Participation agreement (5) LHFS N/A Apr. 2016 — 73,049 196 Master repurchase agreement (6) LHFS 1ML + 175 - 275 bps Jul. 2015 — — 102,073 Master repurchase agreement (7) LHFS 1ML + 275bps Jul. 2015 — — 52,678 Mortgage warehouse agreement (8) LHFS 1ML + 275 bps; floor of 350 bps May 2016 — 63,175 23,851 43,774 342,347 428,454 50,801 783,774 1,737,722 Discount (1) — (1,351 ) (4,031 ) $ 50,801 $ 782,423 $ 1,733,691 Weighted average interest rate 4.38 % 4.33 % (1) On February 15, 2013, we entered into a new SSTL facility agreement and borrowed $1.3 billion that was used principally to fund the ResCap Acquisition and repay the balance of the previous SSTL. The loan was issued with an original issue discount of $6.5 million that we are amortizing over the term of the loan. We are required to repay the principal amount of the borrowings in consecutive quarterly installments of $3.3 million . 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 3.25% and a base rate floor of 2.25% or (b) the one month Eurodollar rate , plus a margin of 4.25% and a one month Eurodollar floor of 1.25% . To date we have elected option (b) to determine the interest rate. 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: • waived, until the fiscal quarter ending June 30, 2017, the interest coverage ratio and corporate leverage ratio financial covenants; • established a process for designating foreign subsidiaries as subsidiary guarantors under the SSTL; • increased our capacity to make certain permitted investments under the investment covenant; • expanded our ability to exclude certain assets from the collateral securing the SSTL, to the extent necessary to meet regulatory minimum net worth requirements; • increased the applicable interest rate margin by 0.50% ; • required that we 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; • provided 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 • made certain conforming modifications as well as adjustments to definitions. (2) On September 20, 2015, this repurchase agreement was renewed through September 29, 2016. On November 20, 2015, the maximum borrowing under this facility was limited to the lesser of $100.0 million or $550.0 million less the lender’s current lending to Ocwen under advance funding facilities. Fifty percent of the maximum borrowing is available on a committed basis and fifty percent is available at the discretion of the lender. (3) On August 25, 2015, this repurchase agreement was renewed through August 23, 2016. Under this repurchase agreement, the lender provides financing on a committed basis for $200.0 million . (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. On March 10, 2015, the maturity date of this agreement was extended to April 30, 2016, and the maximum borrowing was reduced to $50.0 million . On April 16, 2015, the maximum borrowing capacity was increased to $100.0 million . (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. On March 10, 2015, the maturity date of this agreement was extended to April 30, 2016 . (6) On April 16, 2015 , this facility was voluntarily terminated. (7) This facility was voluntarily terminated on its maturity date. (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. |
Schedule of Redemption Prices | The redemption prices during the twelve-month periods beginning on May 15 th of each year are as follows: Year Redemption Price 2016 104.969% 2017 103.313% 2018 and thereafter 100.000% |
Schedule of Aggregate Long-term Borrowings | Aggregate long-term borrowings by maturity date at December 31, 2015 are as follows: Expected Maturity Date (1) (2) 2016 2017 2018 2019 2020 There- after Total Fair Match funded liabilities $ 1,184,049 $ 400,000 $ — $ — $ — $ — $ 1,584,049 $ 1,581,786 Other secured borrowings 397,660 12,361 372,402 — — — 782,423 783,276 Senior unsecured notes — — — 350,000 — — 350,000 318,063 $ 1,581,709 $ 412,361 $ 372,402 $ 350,000 $ — $ — $ 2,716,472 $ 2,683,125 (1) For match funded liabilities, the expected maturity date is the date on which the revolving period ends for each advance financing facility note and repayment of the outstanding balance must begin if the note is not renewed or extended. (2) Excludes financing liabilities, which we recognized in connection with asset sales transactions that we accounted for as financings. Financing liabilities include $541.7 million recorded in connection with sales of MSRs and Rights to MSRs and $2.4 billion recorded in connection with the securitizations of HMBS. The MSR-related financing liabilities have no contractual maturity and are amortized over the life of the transferred Rights to MSRs. The HMBS-related financing liabilities have no contractual maturity and are amortized as the related loans are repaid. |
Other Liabilities (Tables)
Other Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Other Liabilities | Other liabilities were comprised of the following at December 31: 2015 2014 Contingent loan repurchase liability (1) $ 346,984 $ 274,265 Accrued expenses 188,856 142,592 Liability for uncertain tax positions 44,751 28,436 Liability for indemnification obligations 36,615 132,918 Payable to servicing and subservicing investors (2) 15,941 67,722 Due to related parties (3) — 55,585 Checks held for escheat 14,301 18,513 Other 96,996 73,503 $ 744,444 $ 793,534 (1) In connection with the Ginnie Mae EBO program, 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) The balance represents amounts due to investors in connection with loans we service under servicing and subservicing agreements. (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. See Note 24 — Related Party Transactions for additional information. |
Equity (Tables)
Equity (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Loss (AOCL), Net of Income Taxes | The components of accumulated other comprehensive loss (AOCL), net of income taxes, were as follows at December 31: 2015 2014 Unrealized losses on cash flow hedges $ 1,641 $ 8,291 Other 122 122 $ 1,763 $ 8,413 |
Derivative Financial Instrume55
Derivative Financial Instruments and Hedging Activities (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of Changes in Notional Balances of Holdings of Derivatives | The following table summarizes the changes in the notional balances of our holdings of derivatives during the year ended December 31, 2015 : IRLCs Forward MBS Trades Interest Rate Caps Interest Rate Swaps Beginning notional balance $ 239,406 $ 703,725 $ 1,729,000 $ — Additions 5,293,280 7,887,651 2,261,000 450,000 Amortization — — (1,880,000 ) — Maturities (4,773,676 ) (4,371,218 ) — — Terminations (480,693 ) (3,587,438 ) — (450,000 ) Ending notional balance $ 278,317 $ 632,720 $ 2,110,000 $ — Fair value of derivative assets (liabilities) at: December 31, 2015 $ 6,080 $ 295 $ 2,042 $ — December 31, 2014 $ 6,065 $ (2,854 ) $ 567 $ — Maturity Dec. 2015 - Mar. 2016 Feb. 2016 - Mar 2016 Nov. 2016 - Dec. 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 originations and commitments and expected time to sell. |
Summary of Open Derivative Positions and the Gains (Losses) on all Derivatives | The following summarizes our open derivative positions at December 31, 2015 and the gains (losses) on all derivatives used in each of the identified economic hedging programs for the year then ended. None of the derivatives was designated as a hedge for accounting purposes at December 31, 2015 : Purpose Expiration Date Notional Amount Asset (Liability) at Fair Value (1) Gains (Losses) Consolidated Statement of Operations Caption Interest rate risk of borrowings Interest rate caps (2) Nov. 2016 - Dec. 2017 $ 2,110,000 $ 2,042 $ (1,377 ) Other, net Interest rate risk of mortgage loans held for sale and of IRLCs Forward MBS trades Feb. 2016 - Mar 2016 632,720 295 (8,675 ) Gain on loans held for sale, net IRLCs Dec. 2015 - Mar. 2016 278,317 6,080 14 Gain on loans held for sale, net Total derivatives $ 8,417 $ (10,038 ) (1) Derivatives are reported at fair value in Receivables, Other assets or in Other liabilities on our Consolidated Balance Sheets. (2) To hedge the effect of increases in the interest on our variable rate debt as a result of increases in the index, such as 1ML, that is used in determining the interest rate on our variable rate advance funding facilities. |
Schedule of Changes in the Losses on Cash Flow Hedges Included in AOCL | Changes in AOCL during the years ended December 31 were as follows: 2015 2014 2013 Beginning balance $ 8,413 $ 10,151 $ 6,441 Additional net losses on cash flow hedges — — 12,363 Ineffectiveness of cash flow hedges reclassified to earnings — — (657 ) Losses on terminated hedging relationships amortized to earnings (7,042 ) (1,982 ) (10,816 ) Net (decrease) increase in accumulated losses on cash flow hedges (7,042 ) (1,982 ) 890 Decrease in deferred taxes on accumulated losses on cash flow hedges 392 248 2,825 (Decrease) increase in accumulated losses on cash flow hedges, net of taxes (6,650 ) (1,734 ) 3,715 Other, net of taxes — (4 ) (5 ) Ending balance $ 1,763 $ 8,413 $ 10,151 |
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 years ended December 31: 2015 2014 2013 Losses on economic hedges (1,377 ) (661 ) (2,861 ) Ineffectiveness of cash flow hedges — — (657 ) Write-off of losses in AOCL for a discontinued hedge relationship (1) (7,042 ) (1,982 ) (10,816 ) $ (8,419 ) $ (2,643 ) $ (14,334 ) (1) Includes: (a) the accelerated write-off in 2015 of deferred losses on a swap, that had been designated for accounting purposes as a hedge of the purchase price of an MSR acquisition, when we sold a portion of the related MSRs; and (b) the write-off in 2013 of the remaining unamortized losses on a swap, that had been designated as a hedge for accounting purposes, when the borrowings under the related advance financing facility were repaid in full and the facility was terminated. |
Interest Income (Tables)
Interest Income (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Other Income and Expenses [Abstract] | |
Schedule of Components of Interest Income | The following table presents the components of interest income for the years ended December 31: 2015 2014 2013 Loans held for sale $ 16,167 $ 20,299 $ 18,563 Other 2,153 2,692 3,792 $ 18,320 $ 22,991 $ 22,355 |
Interest Expense (Tables)
Interest Expense (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Other Income and Expenses [Abstract] | |
Schedule of Components of Interest Expense | The following table presents the components of interest expense for the years ended December 31: 2015 2014 2013 Financing liabilities (1) (2) $ 292,306 $ 371,852 $ 228,985 Other secured borrowings 91,391 82,837 81,851 Match funded liabilities 65,248 61,576 75,979 6.625% Senior Unsecured Notes 26,259 15,595 — Other 7,169 9,897 8,771 $ 482,373 $ 541,757 $ 395,586 (1) Includes interest expense related to financing liabilities recorded in connection with the NRZ/HLSS Transactions as indicated in the table below: 2015 2014 2013 Servicing fees collected on behalf of NRZ/HLSS $ 694,833 $ 736,122 $ 633,377 Less: Servicing fee retained by Ocwen 355,527 358,053 317,723 Net servicing fees remitted to NRZ/HLSS 339,306 378,069 315,654 Less: Reduction in financing liability 70,513 17,374 87,068 Interest expense on NRZ/HLSS financing liability $ 268,793 $ 360,695 $ 228,586 The reduction in the financing liability for 2015 and 2014 does not include reimbursements to NRZ/HLSS for the loss of servicing revenues when we were terminated as servicer and where the related Rights to MSRs had been sold to HLSS. (2) Includes $14.3 million of fees incurred in 2015 in connection with our agreement to compensate NRZ/HLSS 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. |
Schedule of Interest Expense Related to Financing Liabilities Recorded in Connection with the HLSS Transactions | Includes interest expense related to financing liabilities recorded in connection with the NRZ/HLSS Transactions as indicated in the table below: 2015 2014 2013 Servicing fees collected on behalf of NRZ/HLSS $ 694,833 $ 736,122 $ 633,377 Less: Servicing fee retained by Ocwen 355,527 358,053 317,723 Net servicing fees remitted to NRZ/HLSS 339,306 378,069 315,654 Less: Reduction in financing liability 70,513 17,374 87,068 Interest expense on NRZ/HLSS financing liability $ 268,793 $ 360,695 $ 228,586 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Before Taxes | For income tax purposes, the components of income (loss) before taxes were as follows for the years ended December 31: 2015 2014 2013 Domestic $ (62,903 ) $ (401,741 ) $ 76,957 Foreign (66,958 ) (41,418 ) 275,522 $ (129,861 ) $ (443,159 ) $ 352,479 |
Schedule of Components of Income Tax Expense (Benefit) | The components of income tax expense (benefit) were as follows for the years ended December 31: 2015 2014 2013 Current: Federal $ 46,680 $ (20,824 ) $ 58,507 State 1,079 (403 ) 14,691 Foreign 161 9,195 15,545 47,920 (12,032 ) 88,743 Deferred: Federal (27,173 ) 41,986 (53,711 ) State (3,719 ) (997 ) (4,325 ) Foreign 2,754 (6,162 ) (4,410 ) Provision for valuation allowance on deferred tax assets 97,069 3,601 15,764 68,931 38,428 (46,682 ) Total $ 116,851 $ 26,396 $ 42,061 |
Schedule of Effective Income Tax Reconciliation | Income tax expense differs from the amounts computed by applying the U.S. Federal corporate income tax rate of 35% as follows for the years ended December 31: 2015 2014 2013 Expected income tax expense (benefit) at statutory rate $ (45,451 ) $ (155,106 ) $ 123,368 Differences between expected and actual income tax expense: Impairment of goodwill — 92,034 — State tax, after Federal tax benefit (2,867 ) (1,084 ) 5,639 Provision for liability for uncertain tax positions 18,205 47 4,935 Provision for liability for intra-entity transactions 4,700 6,037 7,283 Non-deductible regulatory settlements 700 53,375 — Other permanent differences (463 ) (254 ) (636 ) Foreign tax differential 41,695 27,799 (112,997 ) Provision for valuation allowance on deferred tax assets (1) 97,069 3,601 15,764 Other 3,263 (53 ) (1,295 ) Actual income tax expense $ 116,851 $ 26,396 $ 42,061 (1) The provision for valuation allowance in 2015 primarily relates to the recording of the valuation allowance on both the U.S. and USVI net deferred tax assets as of December 31, 2015. Also included in the provision for valuation allowance is the reversal of a portion of the valuation allowance previously recorded on taxable losses earned by OMS which were taxable in the U.S. as effectively connected income (ECI), which is equal to the positive taxable income that is expected to be generated for ECI purposes for the year ended December 31, 2015. |
Schedule of Deferred Tax Assets and Liabilities | Net deferred tax assets were comprised of the following at December 31: 2015 2014 Deferred tax assets: Net operating loss carryforward $ 24,511 $ 35,433 Mortgage servicing rights amortization 15,697 — Accrued legal settlements 10,519 7,403 Intangible asset amortization 10,293 10,741 Partnership losses 10,137 10,663 Accrued incentive compensation 10,107 5,029 Bad debt and allowance for loan losses 6,227 10,727 Accrued other liabilities 5,641 6,271 Stock-based compensation expense 4,834 3,431 Tax residuals and deferred income on tax residuals 4,052 4,021 Foreign deferred assets 3,647 2,568 Reserve for servicing exposure 3,353 7,093 Delinquent servicing fees 2,360 3,591 Capital losses 1,710 1,464 Accrued lease termination costs 1,251 1,831 Valuation allowance on real estate 736 1,007 Interest rate swaps 103 494 Other 4,966 5,606 120,144 117,373 Deferred tax liabilities: Foreign undistributed earnings 5,421 6,249 Mortgage servicing rights amortization — 14,696 Other 77 76 5,498 21,021 114,646 96,352 Valuation allowance (116,434 ) (19,365 ) Deferred tax assets (liabilities), net $ (1,788 ) $ 76,987 |
Schedule of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of the total liability for uncertain tax positions is as follows for the years ended December 31: 2015 2014 2013 Beginning balance $ 22,523 $ 27,273 $ 22,702 Additions for tax positions of prior years 13,162 1,392 4,944 Reductions for tax positions of prior years (2,741 ) (6,010 ) — Lapses in statute of limitations (396 ) (132 ) (373 ) Ending balance $ 32,548 $ 22,523 $ 27,273 |
Basic and Diluted Earnings (L59
Basic and Diluted Earnings (Loss) per Share (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliation of the Calculation of Basic EPS to Diluted EPS | The following is a reconciliation of the calculation of basic earnings per share to diluted earnings per share for the years ended December 31: 2015 2014 2013 Basic earnings (loss) per share: Net income (loss) attributable to Ocwen common stockholders $ (247,017 ) $ (472,602 ) $ 298,398 Weighted average shares of common stock 125,315,899 131,362,284 135,678,088 Basic earnings (loss) per share $ (1.97 ) $ (3.60 ) $ 2.20 Diluted earnings (loss) per share (1): Net income (loss) attributable to Ocwen common stockholders $ (247,017 ) $ (472,602 ) $ 298,398 Preferred stock dividends (2) — — — Adjusted net income (loss) attributable to Ocwen $ (247,017 ) $ (472,602 ) $ 298,398 Weighted average shares of common stock 125,315,899 131,362,284 135,678,088 Effect of dilutive elements (1): Preferred stock (2) — — — Stock options — — 4,110,355 Common stock awards — — 12,063 Dilutive weighted average shares of common stock 125,315,899 131,362,284 139,800,506 Diluted earnings (loss) per share $ (1.97 ) $ (3.60 ) $ 2.13 Stock options and common stock awards excluded from the computation of diluted earnings per share: Anti-dilutive (3) 2,038,588 314,688 — Market-based (4) 924,438 295,000 547,500 (1) For 2015 and 2014, we have excluded the effect of the 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. Under this method, we assumed the conversion of the preferred stock into shares of common stock unless the effect was anti-dilutive. Conversion of the preferred stock was not assumed for 2013 because the effect would have been antidilutive. (3) These stock 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. |
Employee Compensation and Ben60
Employee Compensation and Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Stock Options Vesting | These awards had the following characteristics in common: Type of Award Percent of Options Awarded Vesting Period 2008 - 2014 Awards: Options: Service Condition: Time-based 25% Ratably over four years (¼ on each of the four anniversaries of the grant date) Market Condition: Market performance-based 50 Over three years beginning with ¼ vesting on the date that the stock price has at least doubled over the exercise price and the compounded annual gain over the exercise price is at least 20% and then ratably over three years (¼ on the next three anniversaries of the achievement of the market condition) Extraordinary market performance-based 25 Over three years beginning with ¼ vesting on the date that the stock price has at least tripled over the exercise price and the compounded annual gain over the exercise price is at least 25% and then ratably over three years (¼ on the next three anniversaries of the achievement of the market condition) Total award 100% 2015 Awards: Options: Service Condition: Time-based 35% Ratably over four years (1/4 vesting on each of the four anniversaries of the grant date.) Restricted Stock Units: Service Condition: Time-based 16 Over four years with 1/3 vesting on each of the 2 nd , 3 rd and 4 th anniversaries of the grant date. Market Condition: Time-based vesting schedule and Market performance-based vesting date 49 Vest over four years with 1/4 vesting on each of the four anniversaries of the grant date. However, none are considered vested until the first trading day (if any) on or before the 4 th anniversary of the award date on which the average stock price equals or exceeds the price set in the individual award agreement, at which time all units that have met their time-based vesting schedule vest immediately with the remainder vesting in accordance with their time-based schedule. Total Award 100% |
Schedule of Stock Option Activity | Stock option activity for the years ended December 31: 2015 2014 2013 Number of Options Weighted Average Exercise Price Number of Options Weighted Average Exercise Price Number of Options Weighted Average Exercise Price Outstanding at beginning of year 6,828,861 $ 9.99 8,182,611 $ 10.62 8,938,179 $ 9.93 Granted (1)(2) 968,041 $ 17.48 330,000 $ 34.48 50,000 $ 51.70 Exercised (3)(4) (145,677 ) $ 5.24 (683,750 ) $ 8.30 (790,568 ) $ 5.35 Forfeited/Canceled (1) (2) (500,000 ) $ 24.38 (1,000,000 ) $ 24.38 (15,000 ) $ 15.27 Outstanding at end of year (5)(6) 7,151,225 $ 10.10 6,828,861 $ 9.99 8,182,611 $ 10.62 Exercisable at end of year (5)(6)(7) 6,187,559 $ 8.25 5,750,739 $ 6.84 5,733,864 $ 6.53 (1) Stock options granted in 2012 include 2,000,000 options granted to Ocwen’s former Executive Chairman, William C. Erbey at an exercise price of $24.38 equal to the closing price of the stock on the day of the Committee’s approval. On April 22, 2014, Mr. Erbey surrendered 1,000,000 of these options. We recognized the remaining $5.7 million of previously unrecognized compensation expense associated with these options as of the date of surrender. (2) Upon Mr. Erbey’s resignation as an officer and director of Ocwen on January 16, 2015, 500,000 of his unvested options would have been forfeited immediately. However, Ocwen agreed to modify the awards to allow them to vest. This had an effect equivalent to the canceling of the original awards and the granting of new awards effective on the date of resignation. (3) The total intrinsic value of stock options exercised, which is defined as the amount by which the market value of the stock on the date of exercise exceeds the exercise price, was $0.3 million , $13.7 million and $35.3 million for 2015 , 2014 and 2013 , respectively. (4) In connection with the exercise of stock options during 2015 , 2014 and 2013 , employees delivered 56,013 , 249,696 and 138,553 shares, respectively, of common stock to Ocwen as payment for the exercise price and the income tax withholdings on the compensation. As a result, a total of 89,664 , 434,054 and 652,015 net shares of stock were issued in 2015 , 2014 and 2013 , respectively, related to the exercise of stock options. (5) Excluding 340,000 market-based options that have not met their performance criteria, the net aggregate intrinsic value of stock options outstanding and stock options exercisable at December 31, 2015 was $0 and $0 , respectively. A total of 4,722,814 market-based options were outstanding at December 31, 2015 , of which 4,377,814 were exercisable. (6) At December 31, 2015 , the weighted average remaining contractual term of options outstanding and options exercisable was 3.93 years and 3.22 years , respectively. (7) The total fair value of the stock options that vested and became exercisable during 2015 , 2014 and 2013 , based on grant-date fair value, was $2.0 million , $2.6 million and $4.7 million , respectively. |
Schedule of Assumptions used to Value Stock Option Awards Granted | The following assumptions were used to value awards granted during the years ended December 31: 2015 2014 2013 Black-Scholes Binomial Monte Carlo Black-Scholes Binomial Black-Scholes Binomial Risk-free interest rate 1.60% – 2.08% 0.20% - 2.74% 1.23% 1.98% – 2.60% 0% - 3.05% 2.32% 0.24% - 3.56% Expected stock price volatility (1) 45% 51% - 108% 65% 42% 41% - 42% 44% 33% - 44% Expected dividend yield —% —% —% —% —% —% —% Expected life (in years) (2) 5.50 5.41 - 5.46 (3) 6.50 4.35 - 5.64 6.50 4.50 - 5.75 Contractual life (in years) — 10 — — 10 — 10 Fair value $3.36 - $4.62 $5.41 - $5.46 $7.99 $11.93 - $17.01 $8.99 - $13.82 $24.32 $18.04 - $21.38 (1) We estimate volatility based on the historical volatility of Ocwen’s common stock over the most recent period that corresponds with the estimated expected life of the option. (2) For the options valued using the Black-Scholes model we determined the expected life based on historical experience with similar awards, giving consideration to the contractual term, exercise patterns and post vesting forfeitures. The expected term of the options valued using the lattice (binomial) model is derived from the output of the model. The lattice (binomial) model incorporates exercise assumptions based on analysis of historical data. For all options, the expected life represents the period of time that options granted were expected to be outstanding at the date of the award. (3) The restricted stock units that contain both a service condition and a market-based condition are valued using the Monte Carlo simulation. The expected term is derived from the output of the simulation and represents the expected time to meet the market-based vesting condition. For equity awards with both service and market conditions, the requisite service period is the longer of the derived or explicit service period. In this case, the explicit service condition (vesting period) is the requisite service period, and the graded vesting method is used for expense recognition. |
Schedule of Equity-based Compensation Expense Related to Stock Options and Stock Awards and Related Excess Tax Benefit | The following table sets forth equity-based compensation related to stock options and stock awards and the related excess tax benefit for the years ended December 31: 2015 2014 2013 Equity-based compensation expense: Stock option awards $ 3,978 $ 9,983 $ 5,388 Stock awards 3,313 746 260 Excess tax benefit related to share-based awards 6,824 6,374 21,244 |
Business Segment Reporting (Tab
Business Segment Reporting (Tables) | 12 Months Ended |
Dec. 31, 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 For the year ended December 31, 2015 Revenue (1) $ 1,613,537 $ 124,724 $ 2,895 $ (58 ) $ 1,741,098 Expenses (1) (2) 1,221,879 97,692 158,671 (58 ) 1,478,184 Other income (expense): Interest income 1,044 14,669 2,607 — 18,320 Interest expense (446,377 ) (9,859 ) (26,137 ) — (482,373 ) Gain on sale of mortgage servicing rights, net 83,921 — — — 83,921 Other (1) (14,370 ) 2,123 (396 ) — (12,643 ) Other income (expense), net (375,782 ) 6,933 (23,926 ) — (392,775 ) Income (loss) before income taxes $ 15,876 $ 33,965 $ (179,702 ) $ — $ (129,861 ) For the year ended December 31, 2014 Revenue (1) $ 1,985,436 $ 119,220 $ 6,825 $ (156 ) $ 2,111,325 Expenses (1) (2) 1,643,323 156,272 235,769 (156 ) 2,035,208 Other income (expense): Interest income 2,981 16,459 3,551 — 22,991 Interest expense (515,141 ) (10,725 ) (15,891 ) — (541,757 ) Other (1) (4,043 ) 4,476 (943 ) — (510 ) Other income (expense), net (516,203 ) 10,210 (13,283 ) — (519,276 ) Income (loss) before income taxes $ (174,090 ) $ (26,842 ) $ (242,227 ) $ — $ (443,159 ) Servicing Lending Corporate Items and Other Corporate Eliminations Business Segments Consolidated For the year ended December 31, 2013 Revenue (1) $ 1,895,921 $ 120,899 $ 22,092 $ (639 ) $ 2,038,273 Expenses (1) (2) 1,096,084 98,194 107,188 (172 ) 1,301,294 Other income (expense): Interest income 1,599 16,295 4,461 — 22,355 Interest expense (381,477 ) (13,508 ) (601 ) — (395,586 ) Other (1) (28,292 ) 10,132 6,424 467 (11,269 ) Other income (expense), net (408,170 ) 12,919 10,284 467 (384,500 ) Income (loss) before income taxes $ 391,667 $ 35,624 $ (74,812 ) $ — $ 352,479 Servicing Lending Corporate Items and Other Corporate Eliminations Business Segments Consolidated Total Assets December 31, 2015 $ 4,109,076 $ 2,811,154 $ 484,579 $ — $ 7,404,809 December 31, 2014 $ 5,881,862 $ 1,963,729 $ 421,687 $ — $ 8,267,278 December 31, 2013 $ 6,295,976 $ 1,195,812 $ 435,215 $ — $ 7,927,003 (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 year ended December 31, 2015: Depreciation expense $ 2,990 $ 380 $ 15,789 $ 19,159 Amortization of mortgage servicing rights 98,849 345 — 99,194 Amortization of debt discount 2,680 — — 2,680 Amortization of debt issuance costs 21,269 — 1,395 22,664 For the year ended December 31, 2014: Depreciation expense $ 9,955 $ 332 $ 11,623 $ 21,910 Amortization of mortgage servicing rights 249,471 705 199 250,375 Amortization of debt discount 1,318 — — 1,318 Amortization of debt issuance costs 4,294 — 845 5,139 For the year ended December 31, 2013: Depreciation expense $ 13,525 $ 320 $ 10,400 $ 24,245 Amortization of mortgage servicing rights 282,526 255 — 282,781 Amortization of debt discount 1,412 — — 1,412 Amortization of debt issuance costs 4,395 — — 4,395 |
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 year ended December 31, 2015: Depreciation expense $ 2,990 $ 380 $ 15,789 $ 19,159 Amortization of mortgage servicing rights 98,849 345 — 99,194 Amortization of debt discount 2,680 — — 2,680 Amortization of debt issuance costs 21,269 — 1,395 22,664 For the year ended December 31, 2014: Depreciation expense $ 9,955 $ 332 $ 11,623 $ 21,910 Amortization of mortgage servicing rights 249,471 705 199 250,375 Amortization of debt discount 1,318 — — 1,318 Amortization of debt issuance costs 4,294 — 845 5,139 For the year ended December 31, 2013: Depreciation expense $ 13,525 $ 320 $ 10,400 $ 24,245 Amortization of mortgage servicing rights 282,526 255 — 282,781 Amortization of debt discount 1,412 — — 1,412 Amortization of debt issuance costs 4,395 — — 4,395 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
Summary 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 years presented and the amounts receivable or payable at December 31, 2014. See Note 26 — Commitments for additional discussion of our long-term agreements with Altisource and Residential. See Note 4 — Sales of Advances and MSRs , Note 6 — Loans Held for Sale , Note 9 — Mortgage Servicing and Note 14 — Borrowings for additional discussion of the NRZ/HLSS Transactions. For the Years Ended December 31, 2014 2013 Revenues and Expenses: Altisource agreements: Revenues $ 43,075 $ 22,739 Expenses 101,520 55,119 HLSS support services agreement: Revenues $ 1,315 $ 631 Expenses 1,729 2,018 AAMC support services and facilities agreements Revenues $ 1,160 $ 1,238 Residential servicing agreement Revenues $ 15,658 $ 2,436 |
Schedule of Amounts Receivable or Payable | December 31, 2014 Net Receivable (Payable) Altisource $ (4,909 ) HLSS 7,884 AAMC 232 Residential 100 $ 3,307 |
Commitments (Tables)
Commitments (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Commitments under Non-cancelable Operating Leases | We lease certain of our premises and equipment under non-cancelable operating leases with terms expiring through 2020 exclusive of renewal option periods. Our annual aggregate minimum rental commitments under these leases are summarized as follows: 2016 $ 18,293 2017 13,203 2018 6,409 2019 3,377 2020 990 Thereafter — 42,272 Less: Sublease income (1,656 ) Total minimum lease payments, net $ 40,616 |
Contingencies (Tables)
Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Changes in Liability for Representation and Warrant Obligations, Compensatory Fees for Foreclosures that may Ultimately Exceed Investor Timelines and Related 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 similar indemnification obligations for the following years ended December 31: 2015 2014 2013 Beginning balance $ 132,918 $ 192,716 $ 38,140 Provision for representation and warranty obligations (8,418 ) (1,947 ) 18,154 New production reserves 814 1,605 1,325 Obligations assumed in connection with MSR and servicing business acquisitions — — 190,658 Payments made in connection with sales of MSRs (81,498 ) — — Charge-offs and other (1) (7,201 ) (59,456 ) (55,561 ) Ending balance $ 36,615 $ 132,918 $ 192,716 (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. |
Quarterly Results of Operatio65
Quarterly Results of Operations (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Results of Operations (Unaudited) | Quarters Ended December 31, September 30, June 30, March 31, Revenue $ 362,457 $ 404,946 $ 463,251 $ 510,444 Expenses 359,848 387,726 352,252 378,358 Other income (expense), net (131,881 ) (73,138 ) (98,499 ) (89,257 ) Income (loss) before income taxes (129,272 ) (55,918 ) 12,500 42,829 Income tax expense (benefit) 94,985 10,832 2,594 8,440 Net income (loss) (224,257 ) (66,750 ) 9,906 34,389 Net income attributable to non-controlling interests 16 (119 ) (168 ) (34 ) Net income (loss) attributable to Ocwen common stockholders $ (224,241 ) $ (66,869 ) $ 9,738 $ 34,355 Earnings (loss) per share attributable to Ocwen common stockholders Basic $ (1.79 ) $ (0.53 ) $ 0.08 $ 0.27 Diluted $ (1.79 ) $ (0.53 ) $ 0.08 $ 0.27 (1) Other income (expense), net for 2015 includes gains (losses) on the sale of MSRs in the first, second, third and fourth quarter of $26.4 million , $30.3 million , $41.2 million and $(14.0) million , respectively. Quarters Ended December 31, September 30, June 30, March 31, Revenue $ 493,292 $ 513,698 $ 553,074 $ 551,261 Expenses (1) (2) 885,512 455,039 345,463 349,194 Other income (expense), net (127,553 ) (130,925 ) (130,434 ) (130,364 ) Income (loss) before income taxes (519,773 ) (72,266 ) 77,177 71,703 Income tax expense 2,022 2,992 10,165 11,217 Net income (loss) (521,795 ) (75,258 ) 67,012 60,486 Net (income) loss attributable to non-controlling interests (80 ) (123 ) (57 ) 15 Preferred stock dividends — — (582 ) (581 ) Deemed dividend related to beneficial conversion feature of preferred stock — (808 ) (415 ) (416 ) Net income (loss) attributable to Ocwen common stockholders $ (521,875 ) $ (76,189 ) $ 65,958 $ 59,504 Earnings (loss) per share attributable to Ocwen common stockholders Basic $ (4.16 ) $ (0.58 ) $ 0.49 $ 0.44 Diluted $ (4.16 ) $ (0.58 ) $ 0.48 $ 0.43 (1) Operating expenses for the third and fourth quarter of 2014 include charges of $100.0 million and $50.0 million , respectively, for losses related to a regulatory settlement with the NY DFS. These charges are included in Professional services on the Consolidated Statement of Operations and were recorded in the Corporate Items and Other segment. (2) Operating expenses for the fourth quarter of 2014 include the recognition of a goodwill impairment loss of $420.2 million . |
Organization, Business Enviro66
Organization, Business Environment, Basis of Presentation and Significant Accounting Policies - Narrative (Details) - USD ($) $ in Billions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2013 | |
Description of Business and Basis of Presentation [Line Items] | ||
UPB of rights to MSRs sold | $ 119.7 | |
Threshold period past due for financing receivables to be delinquent | 89 days | |
NRZ [Member] | ||
Description of Business and Basis of Presentation [Line Items] | ||
UPB of rights to MSRs sold | $ 137.1 | |
Maximum [Member] | ||
Description of Business and Basis of Presentation [Line Items] | ||
Maximum percentage till, the company exercise significant influence, but not control over subsidiaries or VIEs | 50.00% |
Organization, Business Enviro67
Organization, Business Environment, Basis of Presentation and Significant Accounting Policies - Schedule of Property and Equipment Useful Lives (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Computer Hardware and Software [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 2 years |
Computer Hardware and Software [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Buildings [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 40 years |
Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | Term of the lease not to exceed useful life |
Furniture and Fixtures [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Office Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Securitizations and Variable 68
Securitizations and Variable Interests Entities - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Servicing Assets at Fair Value [Line Items] | |||
Average period to securitization | 30 days | ||
MSRs retained | $ 36,000,000 | $ 39,800,000 | $ 74,800,000 |
Percentage of transferred residential loans serviced 60 days or more past due | 8.20% | 5.10% | |
Charge-offs, net of recovers, associated with transferred residential loans serviced 60 days or more past due | $ 500,000 | $ 0 | |
Minimum [Member] | |||
Servicing Assets at Fair Value [Line Items] | |||
Number of days that transferred residential loans serviced were past due | 60 days | ||
HMBS - Related Borrowings [Member] | |||
Servicing Assets at Fair Value [Line Items] | |||
HMBS-related borrowings | $ 2,400,000,000 | 1,400,000,000 | |
HECM [Member] | |||
Servicing Assets at Fair Value [Line Items] | |||
HECMs pledged as collateral | $ 2,500,000,000 | $ 1,600,000,000 |
Securitizations and Variable 69
Securitizations and Variable Interests Entities - Summary of Cash Flows Received from and Paid to Securitization Trusts Related to Transfers Accounted for as Sales Outstanding (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Transfers and Servicing [Abstract] | |||
Proceeds received from securitizations | $ 4,970,454 | $ 5,265,183 | $ 7,871,481 |
Servicing fees collected | 29,239 | 25,438 | 20,333 |
Purchases of previously transferred assets, net of claims reimbursed | (2,863) | 4,973 | (358) |
Cash flows between transferor and transferee proceeds and payment related to transfers accounted for sales | $ 4,996,830 | $ 5,295,594 | $ 7,891,456 |
Securitizations and Variable 70
Securitizations and Variable Interests Entities - Schedule of Carrying Amounts of Assets that Relate to Continuing Involvement with Transferred Forward Loans (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||
UPB of loans transferred | $ 7,471,025 | $ 9,353,187 |
Maximum exposure to loss | 7,552,958 | 9,439,805 |
Mortgage Servicing Rights, at Amortized Cost [Member] | ||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||
Carrying value of assets | 54,729 | 82,542 |
Mortgage Servicing Rights, at Fair Value [Member] | ||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||
Carrying value of assets | 236 | 2,840 |
Advances And Match Funded Advances [Member] | ||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||
Carrying value of assets | $ 26,968 | $ 1,236 |
Business Acquisitions - Narrati
Business Acquisitions - Narrative (Details) | Jan. 31, 2014USD ($) | Apr. 12, 2013USD ($) | Apr. 01, 2013USD ($) | Mar. 31, 2013USD ($) | Feb. 15, 2013USD ($)loan | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Jan. 30, 2014 | Mar. 30, 2013 |
Business Acquisition [Line Items] | ||||||||||
Period from acquisition date that initial allocation of purchase price is subject to change | 1 year | |||||||||
Intangible assets acquired in connection with purchase of trade or business, amortization period | 15 years | |||||||||
Purchase price settled in cash | $ 0 | $ 2,289,709,000 | ||||||||
ResCap [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business acquisition date | Feb. 15, 2013 | |||||||||
Additional borrowing | $ 1,200,000,000 | |||||||||
New servicing advance facilities | loan | 2 | |||||||||
Number of existing servicing advance facilities | loan | 1 | |||||||||
Fees for professional services related to acquisition | $ 3,200,000 | |||||||||
Cash | $ 0 | |||||||||
Goodwill | 211,419,000 | |||||||||
Correspondent One [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Percentage of ownership interests | 100.00% | 49.00% | ||||||||
Acquired net assets | $ 26,300,000 | |||||||||
Cash | 23,000,000 | |||||||||
Residential mortgage loans | 1,100,000 | |||||||||
Recognized loss | 400,000 | |||||||||
Liberty Acquisition [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business acquisition date | Apr. 1, 2013 | |||||||||
Unpaid principal balance of assets acquired | $ 55,200,000 | |||||||||
Acquired net assets | 31,100,000 | |||||||||
Cash | 4,600,000 | |||||||||
Purchase price settled in cash | 22,000,000 | |||||||||
Repayment of existing outstanding debt | 9,100,000 | |||||||||
Acquired receivables | 11,200,000 | |||||||||
Loans held for investment | 10,300,000 | |||||||||
Amounts due under warehouse facilities | 46,300,000 | |||||||||
Reverse mortgage acquired | 60,000,000 | |||||||||
HMBS related borrowings | 10,200,000 | |||||||||
Goodwill | $ 3,000,000 | |||||||||
Ocwen Structured Investments, LLC (OSI) [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Percentage of ownership interests | 87.35% | 26.00% | ||||||||
Acquired net assets | $ 20,000,000 | |||||||||
Cash | 3,200,000 | |||||||||
Purchase price settled in cash | $ 11,000,000 | |||||||||
Percent of assets acquired and liabilities assumed at fair value recognized | 100.00% | |||||||||
Equity interest acquired | 12.65% | |||||||||
Mortgage servicing rights | $ 9,000,000 | |||||||||
Mortgage-backed securities | $ 7,700,000 | |||||||||
Mortgage Servicing Rights [Member] | ResCap [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Purchase price settled in cash | $ 174,600,000 | |||||||||
Mortgage Servicing Rights [Member] | Conventional Government Insured And Non Agency Residential Forward Mortgage Loans [Member] | ResCap [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Unpaid principal balance of assets acquired | 111,200,000,000 | |||||||||
Mortgage Servicing Rights [Member] | Master Servicing Agreements [Member] | ResCap [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Unpaid principal balance of assets acquired | 44,900,000,000 | |||||||||
Subservice Mortgage Servicing Rights [Member] | ResCap [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Unpaid principal balance of assets acquired | 27,000,000,000 | |||||||||
SSTL [Member] | ResCap [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Capital deployed to finance acquisition | 840,000,000 | |||||||||
Face amount | $ 1,300,000,000 | |||||||||
Altisource [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Proceeds from sale of businesses | $ 128,800,000 | |||||||||
Derecognition of goodwill in connection with the sale of a business | $ 128,800,000 | |||||||||
Altisource [Member] | Correspondent One [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Percentage of ownership interests | 49.00% | |||||||||
Consideration to acquire equity interest | 12,600,000 | |||||||||
Unrelated Party [Member] | Correspondent One [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Consideration to acquire equity interest | $ 900,000 |
Business Acquisitions - Schedul
Business Acquisitions - Schedule of Purchase Price Allocation (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Feb. 15, 2013 | Dec. 31, 2012 | |
Business Acquisition [Line Items] | ||||||
Liability for indemnification obligations | $ (36,615) | $ (132,918) | $ (192,716) | $ (38,140) | ||
ResCap [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Cash | $ 0 | |||||
MSRs | [1] | 401,314 | ||||
Advances and match funded advances | [1] | 1,786,409 | ||||
Premises and equipment | 16,423 | |||||
Receivables and other assets | 2,989 | |||||
Liability for indemnification obligations | (49,500) | |||||
Other liabilities | (25,125) | |||||
Total identifiable net assets | 2,132,510 | |||||
Goodwill | 211,419 | |||||
Total consideration | $ 2,343,929 | |||||
[1] | As of the acquisition date, the purchase of certain MSRs from ResCap was not complete pending the receipt of certain consents and court approvals. Subsequent to the acquisition, we obtained the required consents and approvals for a portion of these MSRs and paid an additional purchase price of $174.6 million to acquire the MSRs and related advances, including $54.2 million in 2014. The purchase price allocation has been revised to include the resulting adjustments to MSRs, advances and goodwill. |
Business Acquisitions - Sched73
Business Acquisitions - Schedule of Purchase Price Allocation (Footnote) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Business Acquisition [Line Items] | |||
Purchase price | $ 0 | $ 2,289,709 | |
ResCap [Member] | MSRs [Member] | |||
Business Acquisition [Line Items] | |||
Purchase price | $ 174,600 | ||
Advances | $ 54,200 |
Business Acquisitions - Summary
Business Acquisitions - Summary of Post-Acquisition Results of Operations (Details) - ResCap [Member] $ in Thousands | 11 Months Ended |
Dec. 31, 2013USD ($) | |
Business Acquisition [Line Items] | |
Revenues | $ 684,935 |
Net income | $ 16,424 |
Business Acquisitions - Summa75
Business Acquisitions - Summary of Pro Forma Results of Operations (Details) - ResCap [Member] $ in Thousands | 12 Months Ended |
Dec. 31, 2013USD ($) | |
Business Acquisition [Line Items] | |
Revenues | $ 2,086,010 |
Net income | $ 285,302 |
Business Acquisitions - Sched76
Business Acquisitions - Schedule of Reconciliation of Beginning and Ending Liability Balance for Termination Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Restructuring Reserve [Roll Forward] | |||
Liability beginning balance | $ 3,907 | $ 7,270 | $ 4,891 |
Additions charged to operations | 2,893 | 18,086 | 20,683 |
Amortization of discount | 159 | 148 | 347 |
Payments | (4,663) | (21,597) | (18,651) |
Liability ending balance | 40,616 | ||
Liability ending balance | 2,296 | 3,907 | 7,270 |
Servicing [Member] | |||
Restructuring Reserve [Roll Forward] | |||
Additions charged to operations | 2,432 | 14,745 | 15,901 |
Lending [Member] | |||
Restructuring Reserve [Roll Forward] | |||
Additions charged to operations | 0 | (114) | 651 |
Corporate and Other [Member] | |||
Restructuring Reserve [Roll Forward] | |||
Additions charged to operations | 461 | 3,455 | 4,131 |
Employee termination benefits [Member] | |||
Restructuring Reserve [Roll Forward] | |||
Liability beginning balance | 1,668 | 4,816 | 0 |
Additions charged to operations | 2,460 | 15,189 | 20,683 |
Amortization of discount | 0 | 0 | 0 |
Payments | (3,415) | (18,337) | (15,867) |
Liability ending balance | 713 | 1,668 | 4,816 |
Employee termination benefits [Member] | Servicing [Member] | |||
Restructuring Reserve [Roll Forward] | |||
Additions charged to operations | 2,432 | 14,032 | 15,901 |
Employee termination benefits [Member] | Lending [Member] | |||
Restructuring Reserve [Roll Forward] | |||
Additions charged to operations | 0 | (114) | 651 |
Employee termination benefits [Member] | Corporate and Other [Member] | |||
Restructuring Reserve [Roll Forward] | |||
Additions charged to operations | 28 | 1,271 | 4,131 |
Lease and other contract termination costs [Member] | |||
Restructuring Reserve [Roll Forward] | |||
Liability beginning balance | 2,239 | 2,454 | 4,891 |
Additions charged to operations | 433 | 2,897 | 0 |
Amortization of discount | 159 | 148 | 347 |
Payments | (1,248) | (3,260) | (2,784) |
Liability ending balance | 1,583 | 2,239 | 2,454 |
Lease and other contract termination costs [Member] | Servicing [Member] | |||
Restructuring Reserve [Roll Forward] | |||
Additions charged to operations | 0 | 713 | 0 |
Lease and other contract termination costs [Member] | Lending [Member] | |||
Restructuring Reserve [Roll Forward] | |||
Additions charged to operations | 0 | 0 | 0 |
Lease and other contract termination costs [Member] | Corporate and Other [Member] | |||
Restructuring Reserve [Roll Forward] | |||
Additions charged to operations | $ 433 | $ 2,184 | $ 0 |
Sales of Advances and MSRs - Su
Sales of Advances and MSRs - Summary of MSRs and Advances Sold (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2015 | [1] | Dec. 31, 2014 | [2] | Dec. 31, 2013 | [3] | |
Mortgage Servicing Rights [Member] | ||||||
Servicing Assets at Fair Value [Line Items] | ||||||
Accounted for as a sale | $ 775,351 | $ 287 | $ 34,754 | |||
Accounted for as a financing | 0 | 123,551 | 448,928 | |||
Sales price of assets sold | 775,351 | 123,838 | 483,682 | |||
Amounts due from purchaser at December 31 | (18,615) | 0 | 0 | |||
Amounts paid to purchaser for estimated representation and warranty obligations, compensatory fees and related indemnification obligations | (69,898) | 0 | 0 | |||
Amounts received from (paid to) purchaser for items outstanding at the end of the previous year | 0 | 0 | (1,173) | |||
Total net cash received | 686,838 | 123,838 | 482,509 | |||
Advances And Match Funded Advances [Member] | ||||||
Servicing Assets at Fair Value [Line Items] | ||||||
Accounted for as a sale | 562,325 | 1,054 | 3,839,954 | |||
Accounted for as a financing | 0 | 88,981 | 0 | |||
Sales price of assets sold | 562,325 | 90,035 | 3,839,954 | |||
Amounts due from purchaser at December 31 | (76,014) | 0 | 0 | |||
Amounts paid to purchaser for estimated representation and warranty obligations, compensatory fees and related indemnification obligations | 0 | 0 | 0 | |||
Amounts received from (paid to) purchaser for items outstanding at the end of the previous year | 0 | 0 | 2,583 | |||
Total net cash received | $ 486,311 | $ 90,035 | $ 3,842,537 | |||
[1] | In 2015, we sold Agency MSRs relating to loans with a UPB of $87.6 billion. | |||||
[2] | In 2014, we issued $123.6 million of OASIS Series 2014-1 Notes secured by Ocwen-owned MSRs relating to Freddie Mac mortgages of $11.8 billion UPB. | |||||
[3] | In 2013, we sold to Home Loan Servicing Solutions, Ltd. (HLSS) the Rights to MSRs relating to loans with a UPB of $119.7 billion for $417.2 million and sold the related servicing advances of $3.8 billion. |
Sales of Advances and MSRs - 78
Sales of Advances and MSRs - Summary of MSRs and Advances Sold Footnote (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Servicing Assets at Fair Value [Line Items] | |||
UPB of rights to MSRs sold | $ 119,700,000 | ||
Proceeds from sale of mortgage servicing rights | $ 686,838 | $ 287 | 34,754 |
Proceeds from sale of advances | 0 | 88,981 | 0 |
Secured Debt [Member] | OASIS Series 2014-1 [Member] | |||
Servicing Assets at Fair Value [Line Items] | |||
Face amount | 123,600 | ||
Agency MSRs [Member] | |||
Servicing Assets at Fair Value [Line Items] | |||
UPB of rights to MSRs sold | 87,600,000 | ||
Mortgage Servicing Rights [Member] | |||
Servicing Assets at Fair Value [Line Items] | |||
UPB of MSRs related to Freddie Mac mortgages | $ 11,800,000 | ||
HLSS [Member] | |||
Servicing Assets at Fair Value [Line Items] | |||
Proceeds from sale of mortgage servicing rights | 417,200 | ||
Proceeds from sale of advances | $ 3,800,000 | ||
NRZ [Member] | |||
Servicing Assets at Fair Value [Line Items] | |||
UPB of rights to MSRs sold | $ 137,100,000 |
Sales of Advances and MSRs - Na
Sales of Advances and MSRs - Narrative (Details) - USD ($) $ in Millions | Apr. 06, 2015 | Dec. 31, 2015 | Dec. 31, 2014 |
Related Party Transaction [Line Items] | |||
Expenses in connection with downgrade in servicers rating | $ 14.3 | ||
NRZ [Member] | |||
Related Party Transaction [Line Items] | |||
Outstanding servicing advances | 5,200 | ||
Period from sale of tranche of rights to mortgage servicing rights that apportionment of fees is subject to re-negotiation | 8 years | ||
Reimbursements on account of loss of servicing revenues | $ 2.2 | $ 2 | |
Maximum [Member] | |||
Related Party Transaction [Line Items] | |||
Increased costs of financing to be compensated during any calendar month | $ 3 | ||
Increased costs of financing to be compensated during contractual term | $ 36 |
Fair Value - Schedule of Carryi
Fair Value - Schedule of Carrying Amounts and Estimated Fair Values of Financial Instruments and Nonfinancial Assets Measured at Fair Value on a Recurring or Non-recurring basis or Disclosed, but not Carried, at Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Financial assets: | |||||
Loans held for sale, at fair value | $ 309,054 | $ 401,120 | $ 503,753 | $ 426,480 | |
Total Loans held for sale | 414,046 | 488,612 | |||
Mortgage-backed securities, at fair value | 7,985 | 7,335 | |||
Financial liabilities: | |||||
Match funded liabilities | 1,584,049 | 2,090,247 | |||
Financing liabilities: | |||||
Total Financing liabilities | 3,089,255 | 2,258,641 | |||
Other secured borrowings: | |||||
Total Other secured borrowings | 782,423 | 1,733,691 | |||
Senior unsecured notes | 350,000 | 350,000 | |||
Mortgage servicing rights: | |||||
Mortgage servicing rights, at fair value | 761,190 | 93,901 | |||
Total Mortgage servicing rights | 1,138,569 | 1,913,992 | |||
Carrying Value [Member] | |||||
Financial assets: | |||||
Total Loans held for sale | 414,046 | 488,612 | |||
Financing liabilities: | |||||
Total Financing liabilities | 3,089,255 | 2,258,641 | |||
Other secured borrowings: | |||||
Total Other secured borrowings | 782,423 | 1,733,691 | |||
Mortgage servicing rights: | |||||
Total Mortgage servicing rights | 1,138,569 | 1,913,992 | |||
Fair Value [Member] | |||||
Financial assets: | |||||
Total Loans held for sale | 414,046 | 488,612 | |||
Financing liabilities: | |||||
Total Financing liabilities | 3,065,006 | 2,248,341 | |||
Other secured borrowings: | |||||
Total Other secured borrowings | 783,276 | 1,658,699 | |||
Mortgage servicing rights: | |||||
Total Mortgage servicing rights | 1,222,745 | 2,331,604 | |||
Level 2 [Member] | Carrying Value [Member] | |||||
Financial assets: | |||||
Loans held for sale, at fair value | [1] | 309,054 | 401,120 | ||
Other secured borrowings: | |||||
Senior secured term loan | [2] | 397,103 | 1,273,219 | ||
Senior unsecured notes | [2] | 350,000 | 350,000 | ||
Level 2 [Member] | Fair Value [Member] | |||||
Financial assets: | |||||
Loans held for sale, at fair value | [1] | 309,054 | 401,120 | ||
Other secured borrowings: | |||||
Senior secured term loan | [2] | 397,956 | 1,198,227 | ||
Senior unsecured notes | [2] | 318,063 | 321,563 | ||
Level 3 [Member] | Carrying Value [Member] | |||||
Financial assets: | |||||
Loans held for sale, at lower of cost or fair value | [3] | 104,992 | 87,492 | ||
Loans held for investment - Reverse mortgages, at fair value | [1] | 2,488,253 | 1,550,141 | ||
Advances and match funded advances | [2] | 2,151,066 | 3,303,356 | ||
Receivables, net | [2] | 286,981 | 270,596 | ||
Mortgage-backed securities, at fair value | [1] | 7,985 | 7,335 | ||
Financial liabilities: | |||||
Match funded liabilities | [2] | 1,584,049 | 2,090,247 | ||
Financing liabilities: | |||||
HMBS-related borrowings, at fair value | [1] | 2,391,362 | 1,444,252 | ||
Financing liability - MSRs pledged | [1] | 541,704 | 614,441 | ||
Other | [2] | 156,189 | 199,948 | ||
Other secured borrowings: | |||||
Other | [2] | 385,320 | 460,472 | ||
Mortgage servicing rights: | |||||
Mortgage servicing rights, at fair value | [1] | 761,190 | 93,901 | ||
MSRs, at amortized cost | [2],[4] | 377,379 | 1,820,091 | ||
Level 3 [Member] | Fair Value [Member] | |||||
Financial assets: | |||||
Loans held for sale, at lower of cost or fair value | [3] | 104,992 | 87,492 | ||
Loans held for investment - Reverse mortgages, at fair value | [1] | 2,488,253 | 1,550,141 | ||
Advances and match funded advances | [2] | 2,151,066 | 3,303,356 | ||
Receivables, net | [2] | 286,981 | 270,596 | ||
Mortgage-backed securities, at fair value | [1] | 7,985 | 7,335 | ||
Financial liabilities: | |||||
Match funded liabilities | [2] | 1,581,786 | 2,090,247 | ||
Financing liabilities: | |||||
HMBS-related borrowings, at fair value | [1] | 2,391,362 | 1,444,252 | ||
Financing liability - MSRs pledged | [1] | 541,704 | 614,441 | ||
Other | [2] | 131,940 | 189,648 | ||
Other secured borrowings: | |||||
Other | [2] | 385,320 | 460,472 | ||
Mortgage servicing rights: | |||||
Mortgage servicing rights, at fair value | [1] | 761,190 | 93,901 | ||
MSRs, at amortized cost | [2],[4] | 461,555 | 2,237,703 | ||
Interest Rate Lock Commitments [Member] | Level 2 [Member] | Carrying Value [Member] | |||||
Derivative financial instruments: | |||||
Interest rate lock commitments | [1] | 6,080 | 6,065 | ||
Interest Rate Lock Commitments [Member] | Level 2 [Member] | Fair Value [Member] | |||||
Derivative financial instruments: | |||||
Interest rate lock commitments | [1] | 6,080 | 6,065 | ||
Forward Mortgage Backed Securities Trades [Member] | Level 1 [Member] | Carrying Value [Member] | |||||
Derivative financial instruments: | |||||
Forward mortgage-backed securities trades | [1] | 295 | (2,854) | ||
Forward Mortgage Backed Securities Trades [Member] | Level 1 [Member] | Fair Value [Member] | |||||
Derivative financial instruments: | |||||
Forward mortgage-backed securities trades | [1] | 295 | (2,854) | ||
Interest Rate Cap [Member] | Level 3 [Member] | Carrying Value [Member] | |||||
Derivative financial instruments: | |||||
Interest rate caps | [1] | 2,042 | 567 | ||
Interest Rate Cap [Member] | Level 3 [Member] | Fair Value [Member] | |||||
Derivative financial instruments: | |||||
Interest rate caps | [1] | $ 2,042 | $ 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 December 31, 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 December 31, 2015 was $146.5 million, net of a valuation allowance of $17.3 million. |
Fair Value - Schedule of Carr81
Fair Value - Schedule of Carrying Amounts and Estimated Fair Values of Financial Instruments and Nonfinancial Assets Measured at Fair Value on a Recurring or Non-recurring basis or Disclosed, but not Carried, at Fair Value (Footnote) (Details) - Impaired Government Insured Stratum [Member] $ in Millions | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Servicing asset at carrying value | $ 146.5 |
Valuation allowance of MSRs | $ 17.3 |
Fair Value - Summary of Reconci
Fair Value - Summary of Reconciliation of the Changes in Fair Value of Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - Level 3 [Member] - USD ($) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Beginning balance | $ (406,749) | $ (514,891) | $ (229,160) | |||
Purchases, issuances, sales and settlements: | ||||||
Purchases | 3,513 | 8,464 | 570 | |||
Issuances | (18,724) | 33,872 | (412,603) | |||
Transfer from MSRs carried at amortized cost | 839,157 | |||||
Transfer from Loans held for sale, at fair value | 110,874 | |||||
Sales | (72,274) | 0 | 24,156 | |||
Settlements | 74,965 | [1] | (33,483) | 85,381 | ||
Purchases, issuances, sales and settlements, total | 826,637 | 119,727 | (302,496) | |||
Total realized and unrealized gains and (losses): | ||||||
Included in earnings | (93,484) | [2] | (11,585) | 29,128 | [2] | |
Included in Other comprehensive income | 0 | [2] | 0 | (12,363) | [2] | |
Total realized and unrealized gains and (losses) | (93,484) | [2] | (11,585) | 16,765 | [2] | |
Transfers in and / or out of Level 3 | 0 | 0 | 0 | |||
Ending balance | 326,404 | (406,749) | (514,891) | |||
Loans Held for Investment - Reverse Mortgages [Member] | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Beginning balance | 1,550,141 | 618,018 | 0 | |||
Purchases, issuances, sales and settlements: | ||||||
Purchases | 0 | 0 | 10,251 | |||
Issuances | 1,008,065 | 816,881 | 609,555 | |||
Transfer from MSRs carried at amortized cost | 0 | |||||
Transfer from Loans held for sale, at fair value | 110,874 | |||||
Sales | 0 | 0 | 0 | |||
Settlements | (151,134) | [1] | (99,923) | (5,886) | ||
Purchases, issuances, sales and settlements, total | 856,931 | 827,832 | 613,920 | |||
Total realized and unrealized gains and (losses): | ||||||
Included in earnings | 81,181 | [2] | 104,291 | 4,098 | [2] | |
Included in Other comprehensive income | 0 | [2] | 0 | 0 | [2] | |
Total realized and unrealized gains and (losses) | 81,181 | [2] | 104,291 | 4,098 | [2] | |
Transfers in and / or out of Level 3 | 0 | 0 | 0 | |||
Ending balance | 2,488,253 | 1,550,141 | 618,018 | |||
HMBS - Related Borrowings [Member] | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Beginning balance | (1,444,252) | (615,576) | 0 | |||
Purchases, issuances, sales and settlements: | ||||||
Purchases | 0 | 0 | (10,179) | |||
Issuances | (1,024,361) | (783,009) | (604,991) | |||
Transfer from MSRs carried at amortized cost | 0 | |||||
Transfer from Loans held for sale, at fair value | 0 | |||||
Sales | 0 | 0 | 0 | |||
Settlements | 153,016 | [1] | 47,077 | 5,440 | ||
Purchases, issuances, sales and settlements, total | (871,345) | (735,932) | (609,730) | |||
Total realized and unrealized gains and (losses): | ||||||
Included in earnings | (75,765) | [2] | (92,744) | (5,846) | [2] | |
Included in Other comprehensive income | 0 | [2] | 0 | 0 | [2] | |
Total realized and unrealized gains and (losses) | (75,765) | [2] | (92,744) | (5,846) | [2] | |
Transfers in and / or out of Level 3 | 0 | 0 | 0 | |||
Ending balance | (2,391,362) | (1,444,252) | (615,576) | |||
Mortgage Backed Securities [Member] | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Beginning balance | 7,335 | 0 | ||||
Purchases, issuances, sales and settlements: | ||||||
Purchases | 0 | 7,677 | ||||
Issuances | 0 | 0 | ||||
Transfer from MSRs carried at amortized cost | 0 | |||||
Transfer from Loans held for sale, at fair value | 0 | |||||
Sales | 0 | 0 | ||||
Settlements | 0 | [1] | 0 | |||
Purchases, issuances, sales and settlements, total | 0 | 7,677 | ||||
Total realized and unrealized gains and (losses): | ||||||
Included in earnings | 650 | [2] | (342) | |||
Included in Other comprehensive income | [2] | 0 | ||||
Total realized and unrealized gains and (losses) | 650 | [2] | (342) | |||
Transfers in and / or out of Level 3 | 0 | |||||
Ending balance | 7,985 | 7,335 | 0 | |||
Financing Liability - MSRs Pledged [Member] | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Beginning balance | (614,441) | (633,804) | (303,705) | |||
Purchases, issuances, sales and settlements: | ||||||
Purchases | 0 | 0 | 0 | |||
Issuances | 0 | 0 | (417,167) | |||
Transfer from MSRs carried at amortized cost | 0 | |||||
Transfer from Loans held for sale, at fair value | 0 | |||||
Sales | 0 | 0 | 0 | |||
Settlements | 72,737 | [1] | 19,363 | 87,068 | ||
Purchases, issuances, sales and settlements, total | 72,737 | 19,363 | (330,099) | |||
Total realized and unrealized gains and (losses): | ||||||
Included in earnings | 0 | [2] | 0 | 0 | [2] | |
Included in Other comprehensive income | 0 | [2] | 0 | 0 | [2] | |
Total realized and unrealized gains and (losses) | 0 | [2] | 0 | 0 | [2] | |
Transfers in and / or out of Level 3 | 0 | 0 | 0 | |||
Ending balance | (541,704) | (614,441) | (633,804) | |||
Derivatives [Member] | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Beginning balance | 567 | 442 | (10,668) | |||
Purchases, issuances, sales and settlements: | ||||||
Purchases | 2,506 | 787 | 498 | |||
Issuances | 0 | 0 | 0 | |||
Transfer from MSRs carried at amortized cost | 0 | |||||
Sales | 0 | 0 | 24,156 | |||
Settlements | 346 | [1] | 0 | (1,241) | ||
Purchases, issuances, sales and settlements, total | 2,852 | 787 | 23,413 | |||
Total realized and unrealized gains and (losses): | ||||||
Included in earnings | (1,377) | [2] | (662) | 60 | [2] | |
Included in Other comprehensive income | 0 | [2] | 0 | (12,363) | [2] | |
Total realized and unrealized gains and (losses) | (1,377) | [2] | (662) | (12,303) | [2] | |
Transfers in and / or out of Level 3 | 0 | 0 | 0 | |||
Ending balance | 2,042 | 567 | 442 | |||
MSRs [Member] | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Beginning balance | 93,901 | 116,029 | 85,213 | |||
Purchases, issuances, sales and settlements: | ||||||
Purchases | 1,007 | 0 | 0 | |||
Issuances | (2,428) | 0 | 0 | |||
Transfer from MSRs carried at amortized cost | 839,157 | |||||
Sales | (72,274) | 0 | 0 | |||
Settlements | 0 | [1] | 0 | 0 | ||
Purchases, issuances, sales and settlements, total | 765,462 | 0 | 0 | |||
Total realized and unrealized gains and (losses): | ||||||
Included in earnings | (98,173) | [2] | (22,128) | 30,816 | [2] | |
Included in Other comprehensive income | 0 | [2] | 0 | 0 | [2] | |
Total realized and unrealized gains and (losses) | (98,173) | [2] | (22,128) | 30,816 | [2] | |
Transfers in and / or out of Level 3 | 0 | 0 | 0 | |||
Ending balance | $ 761,190 | $ 93,901 | $ 116,029 | |||
[1] | Settlements of Financing liability - MSRs pledged for 2015 and 2014 include reimbursements of $2.2 million and $2.0 million, respectively, to NRZ related to servicing terminations. | |||||
[2] | Total losses attributable to derivative financial instruments still held at December 31, 2015 and 2014 were $1.0 million and $0.7 million for 2015 and 2014, respectively. Total losses for 2015 attributable to MSRs still held at December 31, 2015 were $90.3 million. |
Fair Value - Summary of Recon83
Fair Value - Summary of Reconciliation of the Changes in Fair Value of Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis (Footnote) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Losses attributable to derivatives | $ (1) | $ (0.7) |
Losses attributable to MSRs held | (90.3) | |
NRZ [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Reimbursement to HLSS for loss of servicing revenues | $ 2.2 | $ 2 |
Fair Value - Narrative (Details
Fair Value - Narrative (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Loans Held for Investment - Reverse Mortgages [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Life | 6 years 5 months 26 days |
Repayment rate | 19.85% |
Discount rate | 3.36% |
Loans Held for Investment - Reverse Mortgages [Member] | Minimum [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Life | 6 years 1 month 9 days |
Repayment rate | 4.96% |
Loans Held for Investment - Reverse Mortgages [Member] | Maximum [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Life | 9 years 8 months 12 days |
Repayment rate | 53.75% |
HMBS - Related Borrowings [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Life | 5 years 4 months 20 days |
Repayment rate | 19.85% |
Discount rate | 2.78% |
HMBS - Related Borrowings [Member] | Minimum [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Life | 4 years 8 months 23 days |
Repayment rate | 4.96% |
HMBS - Related Borrowings [Member] | Maximum [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Life | 9 years 8 months 12 days |
Repayment rate | 53.75% |
Fair Value Schedule of Signific
Fair Value Schedule of Significant Assumptions used in Valuation (Details) | 12 Months Ended |
Dec. 31, 2015$ / loan | |
Mortgage Servicing Rights - Amortized Costs [Member] | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |
Weighted average prepayment speed | 11.34% |
Weighted average delinquency rate | 13.27% |
Advance financing cost | 5 years |
Interest rate for computing float earnings | 5 years |
Weighted average discount rate | 9.41% |
Weighted average cost to service (in dollars) | 92 |
Fair Value Agency Mortgage Servicing Rights [Member] | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |
Weighted average prepayment speed | 9.91% |
Weighted average delinquency rate | 0.82% |
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) | 71 |
Fair Value Non-Agency Mortgage Servicing Rights [Member] | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |
Weighted average prepayment speed | 16.83% |
Weighted average delinquency rate | 27.99% |
Weighted average discount rate | 15.03% |
Weighted average cost to service (in dollars) | 321 |
Mortgage Servicing Rights Pledged [Member] | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |
Weighted average prepayment speed | 17.43% |
Weighted average delinquency rate | 29.83% |
Weighted average discount rate | 14.92% |
Weighted average cost to service (in dollars) | 326 |
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% |
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% |
Loans Held for Sale - Summary o
Loans Held for Sale - Summary of Activity in the Balance of Loans Held for Sale, at Fair Value (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Movement In Loans Held For Sale At Fair Value [Roll Forward] | ||||
Beginning balance | $ 401,120 | $ 503,753 | $ 426,480 | |
Originations and purchases | 3,944,509 | 4,967,767 | 8,106,742 | |
Proceeds from sales | (4,061,217) | (5,001,935) | (7,999,235) | |
Principal collections | (8,647) | (13,300) | (653) | |
Transfers to loans held for investment - reverse mortgages | 0 | (110,874) | 0 | |
Gain (loss) on sale of loans | 42,053 | 49,533 | (26,981) | |
Other | [1] | (8,764) | 6,176 | (2,600) |
Ending balance | $ 309,054 | $ 401,120 | $ 503,753 | |
[1] | Other includes the increase (decrease) in fair value of $(9.1) million, $6.2 million and $(3.7) million for 2015, 2014 and 2013, respectively. |
Loans Held for Sale - Summary87
Loans Held for Sale - Summary of Activity in the Balance of Loans Held for Sale, at Fair Value (Footnote) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Loans Held For Sale At Fair Value [Abstract] | |||
Change in fair value of loans held for sale | $ (9.1) | $ 6.2 | $ (3.7) |
Loans Held for Sale - Narrative
Loans Held for Sale - Narrative (Details) - USD ($) $ in Thousands | May. 02, 2014 | May. 01, 2014 | Mar. 03, 2014 | May. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
UPB of loans held for sale | $ 33,000 | $ 42,700 | ||||||
Value assigned to MSRs retained on transfers of forward loans | $ 36,000 | $ 39,800 | $ 74,800 | |||||
Gains on sales of repurchased Ginnie Mae Loans which are carried at the lower of cost or fair value | 23,000 | 54,700 | 35,100 | |||||
Gain on loans held for sale, net | $ 7,200 | $ 12,900 | 134,969 | 134,297 | 121,694 | |||
Payments to Purchase Loans Held-for-sale | 5,000,681 | 7,430,340 | 9,678,038 | |||||
Unrelated Party [Member] | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Loan and related advances proceeds | $ 462,500 | |||||||
Gain on loans held for sale, net | 1,300 | |||||||
Delinquent FHA Insured Loans [Member] | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
UPB of loans held for sale | 549,400 | |||||||
Total gains on sales of loans | 7,200 | |||||||
Delinquent FHA Insured Loans [Member] | NRZ [Member] | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Loan and related advances proceeds | $ 612,300 | |||||||
FHA Buyout Loans [Member] | Delinquent FHA Insured Loans [Member] | NRZ [Member] | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Loan and related advances proceeds | 556,600 | |||||||
Servicing Advances [Member] | Delinquent FHA Insured Loans [Member] | NRZ [Member] | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Loan and related advances proceeds | $ 20,200 | 55,700 | ||||||
Advances [Member] | Delinquent FHA Insured Loans [Member] | NRZ [Member] | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Loan and related advances proceeds | 13,100 | |||||||
Delinquent FHA Insured Loans [Member] | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
UPB of loans held for sale | $ 451,000 | |||||||
Payments to Purchase Loans Held-for-sale | $ 479,600 | |||||||
Loans Held for Investment - Reverse Mortgages [Member] | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Gain on loans held for sale, net | 112,600 | $ 72,700 | $ 41,700 | |||||
Lending [Member] | Line of Credit [Member] | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Loans held for sale, at fair value, UPB pledged to secure warehouse lines of credit | 290,000 | |||||||
Servicing [Member] | Line of Credit [Member] | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Loans held for sale, at fair value, UPB pledged to secure warehouse lines of credit | $ 45,500 |
Loans Held for Sale - Summary89
Loans Held for Sale - Summary of Activity in the Balance of Loans Held for Sale, at Lower of Cost or Fair Value (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||||
Movement In Loans Held For Sale At Fair Value [Roll Forward] | ||||||
Beginning balance | $ 87,492 | [1],[2] | $ 62,907 | [1],[2] | $ 82,866 | |
Purchases | 1,056,172 | 2,462,573 | 1,632,390 | |||
Proceeds from sales | (1,001,939) | (2,067,965) | (1,036,316) | |||
Principal payments | (53,400) | (262,196) | (432,423) | |||
Transfers to accounts receivable | (53,468) | (114,675) | (218,629) | |||
Transfers to real estate owned | (18,594) | (8,808) | (4,775) | |||
Gain on sale of loans | 43,449 | 31,853 | 35,087 | |||
Decrease (increase) in valuation allowance | 35,018 | (18,965) | (10,644) | |||
Other | 10,262 | 2,768 | 15,351 | |||
Ending balance | [1],[2] | $ 104,992 | $ 87,492 | $ 62,907 | ||
[1] | At December 31, 2015, 2014 and 2013, the balances are net of valuation allowances of $14.7 million, $49.7 million and $30.7 million, respectively. The decrease in the valuation allowance during 2015 includes $37.8 million resulting from the reversal of the allowance associated with loans that were sold during the year. The increase in the valuation allowance during 2014 and 2013 includes $20.4 million and $15.7 million, respectively, resulting from transfers of 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. | |||||
[2] | At December 31, 2015, 2014 and 2013, the balances include $85.9 million, $42.0 million and $43.1 million, respectively, of loans that we were required to repurchase from Ginnie Mae guaranteed securitizations as part of our servicing obligations. Repurchased loans are modified or otherwise remediated through loss mitigation activities or are reclassified to receivables. |
Loans Held for Sale - Summary90
Loans Held for Sale - Summary of Activity in the Balance of Loans Held for Sale, at Lower of Cost or Fair Value (Footnote) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Loans held for sale, at lower of cost or fair value | $ 104,992 | [1],[2] | $ 87,492 | [1],[2] | $ 62,907 | [1],[2] | $ 82,866 |
Ginnie Mae [Member] | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Loans held for sale, at lower of cost or fair value | 85,900 | 42,000 | 43,100 | ||||
Valuation Allowance for Loans Held for Sale [Member] | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Valuation allowance | 14,700 | 49,700 | 30,700 | ||||
Valuation Allowances and Reserves, Deductions | $ 37,800 | ||||||
Indemnification Liability Obligations [Member] | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Change in valuation allowance, adjustments | $ 20,400 | $ 15,700 | |||||
[1] | At December 31, 2015, 2014 and 2013, the balances are net of valuation allowances of $14.7 million, $49.7 million and $30.7 million, respectively. The decrease in the valuation allowance during 2015 includes $37.8 million resulting from the reversal of the allowance associated with loans that were sold during the year. The increase in the valuation allowance during 2014 and 2013 includes $20.4 million and $15.7 million, respectively, resulting from transfers of 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. | ||||||
[2] | At December 31, 2015, 2014 and 2013, the balances include $85.9 million, $42.0 million and $43.1 million, respectively, of loans that we were required to repurchase from Ginnie Mae guaranteed securitizations as part of our servicing obligations. Repurchased loans are modified or otherwise remediated through loss mitigation activities or are reclassified to receivables. |
Loans Held for Sale - Summary91
Loans Held for Sale - Summary of Activity in Gain on Loans Held for Sale, Net (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |||
May. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Loans Held For Sale At Fair Value [Abstract] | |||||
Gain on sales of loans | $ 152,970 | $ 168,449 | $ 82,518 | ||
Change in fair value of IRLCs | 14 | (25,822) | 523 | ||
Change in fair value of loans held for sale | (8,525) | 10,489 | (1,709) | ||
Gain (loss) on economic hedge instruments | (8,675) | (17,214) | 42,732 | ||
Other | (815) | (1,605) | (2,370) | ||
Gain on loans held for sale, net | $ 7,200 | $ 12,900 | $ 134,969 | $ 134,297 | $ 121,694 |
Advances - Schedule of Advance
Advances - Schedule of Advance Payments by Financial Institution on Foreclosed Properties (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Advances On Behalf of Borrowers [Line Items] | ||||
Advances | $ 486,199 | $ 963,948 | ||
Allowance for losses | (41,901) | (70,034) | ||
Advances, net | 444,298 | 893,914 | $ 890,832 | $ 184,463 |
Servicing [Member] | ||||
Advances On Behalf of Borrowers [Line Items] | ||||
Advances | 482,199 | 959,482 | ||
Servicing [Member] | Principal And Interest [Member] | ||||
Advances On Behalf of Borrowers [Line Items] | ||||
Advances | 81,654 | 128,217 | ||
Servicing [Member] | Taxes And Insurance [Member] | ||||
Advances On Behalf of Borrowers [Line Items] | ||||
Advances | 275,528 | 467,891 | ||
Servicing [Member] | Foreclosures Bankruptcy And Other [Member] | ||||
Advances On Behalf of Borrowers [Line Items] | ||||
Advances | 125,017 | 363,374 | ||
Corporate Items and Other [Member] | ||||
Advances On Behalf of Borrowers [Line Items] | ||||
Advances | $ 4,000 | $ 4,466 |
Advances - Narrative (Details)
Advances - Narrative (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Advances On Behalf of Borrowers [Line Items] | ||
Advances, net | $ 444,298 | $ 893,914 |
Ginnie Mae Early Buy Out [Member] | ||
Advances On Behalf of Borrowers [Line Items] | ||
Advances, net | $ 86,400 |
Advances - Schedule of Activity
Advances - Schedule of Activity in Advances (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Advances [Roll Forward] | ||||
Advances, beginning balance | $ 893,914 | $ 890,832 | $ 184,463 | |
Acquisitions | [1] | 0 | 99,319 | 733,438 |
Transfers to match funded advances | 0 | (10,156) | (142,286) | |
Sales of advances | [2] | (253,335) | 0 | (200,749) |
New advances (collections of advances), net and charge-offs | (224,414) | (54,424) | 328,151 | |
Decrease (increase) in allowance for losses | [3] | 28,133 | (31,657) | (12,185) |
Advances, ending balance | $ 444,298 | $ 893,914 | $ 890,832 | |
[1] | Servicing advances acquired through business acquisitions and asset acquisitions, primarily in connection with the acquisition of MSRs. Acquisitions in 2014 include advances acquired in connection with the purchase of loans through the Ginnie Mae EBO program. | |||
[2] | Servicing advances sold in connection with sales of MSRs and Rights to MSRs, which met the requirements for sale accounting and which were derecognized from our financial statements at the time of the sale. However, advances sold during 2014 in connection with the sale of loans purchased through the Ginnie Mae EBO program did not qualify as sales for accounting purposes and were accounted for as a financing. | |||
[3] | The decrease in the allowance for losses in 2015 includes $68.9 million of charge-offs. |
Advances Schedule of Activity i
Advances Schedule of Activity in Advances Footnote (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Advances [Abstract] | |
Allowance for losses, charge-offs | $ 68.9 |
Match Funded Advances - Schedul
Match Funded Advances - Schedule of Match Funded Advances on Residential Loans (Details) - Residential Mortgage [Member] - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Match Funded Advances [Line Items] | ||||
Principal and interest | $ 948,376 | $ 1,349,048 | ||
Taxes and insurance | 608,404 | 847,064 | ||
Foreclosures, bankruptcy, real estate and other | 149,988 | 213,330 | ||
Match funded advances | $ 1,706,768 | $ 2,409,442 | $ 2,552,383 | $ 3,049,244 |
Match Funded Advances - Sched97
Match Funded Advances - Schedule of Activity in Match Funded Advances (Details) - Residential Mortgage [Member] - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Match Funded Advances [Roll Forward] | ||||
Beginning balance | $ 2,409,442 | $ 2,552,383 | $ 3,049,244 | |
Acquisitions | [1] | 0 | 85,521 | 3,589,773 |
Transfers from advances | [2] | 0 | 10,156 | 142,286 |
Sales of advances | (308,990) | 0 | (3,639,205) | |
Collections of pledged advances, net of new advances and other | (393,684) | (238,618) | (589,715) | |
Ending balance | $ 1,706,768 | $ 2,409,442 | $ 2,552,383 | |
[1] | Servicing advances acquired through business acquisitions and asset acquisitions in connection with the acquisition of MSRs, that were pledged to advance facilities at the date of acquisition. | |||
[2] | New servicing advances initially classified as Advances at the date of payment and subsequently pledged to advance financing facilities. |
Mortgage Servicing - Summary of
Mortgage Servicing - Summary of Activity in Carrying Value of Amortization Method Servicing Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Servicing Asset at Amortized Cost, Balance [Roll Forward] | ||||
Mortgage servicing rights, gross | $ 493,914 | $ 2,070,466 | $ 2,234,221 | |
Estimated fair value at end of year | 761,190 | 93,901 | ||
Mortgage Servicing Rights - Amortized Costs [Member] | ||||
Servicing Asset at Amortized Cost, Balance [Roll Forward] | ||||
Beginning balance | 1,820,091 | 1,953,352 | 678,937 | |
Fair value election - transfer of MSRs carried at amortized cost | [1] | (787,142) | 0 | 0 |
Additions recognized on the sale of mortgage loans | 34,961 | 63,310 | 74,784 | |
Sales | [2] | (586,352) | (137) | (28,403) |
Servicing transfers and adjustments | 0 | (1,763) | (8,883) | |
(Increase) decrease in impairment valuation allowance (3) | [3] | (17,341) | 0 | 2,375 |
Amortization | (99,194) | (250,375) | (283,244) | |
Ending balance | 377,379 | 1,820,091 | 1,953,352 | |
Estimated fair value at end of year | 461,555 | 2,237,703 | 2,441,719 | |
Ocwen Structured Investments, LLC (OSI) [Member] | Mortgage Servicing Rights - Amortized Costs [Member] | ||||
Servicing Asset at Amortized Cost, Balance [Roll Forward] | ||||
Additions recognized in connect with business acquisitions | 0 | 9,008 | 0 | |
Rescap Acquisition [Member] | Mortgage Servicing Rights - Amortized Costs [Member] | ||||
Servicing Asset at Amortized Cost, Balance [Roll Forward] | ||||
Additions recognized in connect with business acquisitions | 0 | 11,370 | 389,944 | |
Liberty Acquisition [Member] | Mortgage Servicing Rights - Amortized Costs [Member] | ||||
Servicing Asset at Amortized Cost, Balance [Roll Forward] | ||||
Additions recognized in connect with business acquisitions | 0 | 0 | 2,840 | |
Ally MSR Transaction [Member] | Mortgage Servicing Rights - Amortized Costs [Member] | ||||
Servicing Asset at Amortized Cost, Balance [Roll Forward] | ||||
Additions recognized in connect with business acquisitions | 0 | 0 | 683,787 | |
OneWest MSR Transaction [Member] | Mortgage Servicing Rights - Amortized Costs [Member] | ||||
Servicing Asset at Amortized Cost, Balance [Roll Forward] | ||||
Additions recognized in connect with business acquisitions | 0 | 14,408 | 398,804 | |
Greenpoint MSR Transaction [Member] | Mortgage Servicing Rights - Amortized Costs [Member] | ||||
Servicing Asset at Amortized Cost, Balance [Roll Forward] | ||||
Additions recognized in connect with business acquisitions | 0 | 3,690 | 33,647 | |
Other [Member] | Mortgage Servicing Rights - Amortized Costs [Member] | ||||
Servicing Asset at Amortized Cost, Balance [Roll Forward] | ||||
Additions recognized in connect with business acquisitions | $ 12,356 | $ 17,228 | $ 8,764 | |
[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, based on a different strategy for managing the risks of the underlying portfolio compared to our other MSR classes. 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 $9.4 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. | |||
[2] | We retained the subservicing on MSRs that we sold in 2013. The gain on the sale of $5.1 million was deferred and is recognized in earnings over the life of the subservicing contract. | |||
[3] | Impairment of MSRs is recognized in Servicing and origination expense in the Consolidated Statements of Operations. |
Mortgage Servicing - Summary 99
Mortgage Servicing - Summary of Activity in Carrying Value of Amortization Method Servicing Assets (Footnote) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Servicing Asset at Amortized Cost [Line Items] | ||
Deferred gain on sale of MSRs | $ 5.1 | |
Non Agency Mortgage Servicing Rights [Member] | ||
Servicing Asset at Amortized Cost [Line Items] | ||
Fair value measurement of non-agency MSRs, cumulative-effect on retained earnings | $ 52 | |
Deferred income taxes | 9.4 | |
Unpaid principal balance of MSRs | $ 195,300 |
Mortgage Servicing - Schedule o
Mortgage Servicing - Schedule of Estimated Amortization Expense for MSRs (Details) - Mortgage Servicing Rights - Amortized Costs [Member] $ in Thousands | Dec. 31, 2015USD ($) |
Servicing Asset at Amortized Cost [Line Items] | |
2,016 | $ 46,723 |
2,017 | 36,427 |
2,018 | 38,564 |
2,019 | 38,773 |
2,020 | $ 34,425 |
Mortgage Servicing - Summary101
Mortgage Servicing - Summary of Activity Related to Fair Value Servicing Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Servicing Asset at Fair Value, Amount [Roll Forward] | ||||
Beginning balance | $ 93,901 | |||
Ending balance | 761,190 | $ 93,901 | ||
Conventional [Member] | ||||
Servicing Asset at Fair Value, Amount [Roll Forward] | ||||
Beginning balance | 93,901 | |||
Fair value election - transfer of MSRs carried at amortized cost | 787,142 | |||
Cumulative effect of fair value election | 52,015 | |||
Sales | (72,274) | |||
Additions recognized on the sale of residential mortgage loans | 1,007 | |||
Servicing transfers and adjustments | (2,428) | |||
Changes in valuation inputs or other assumptions | [1] | 10,045 | ||
Realization of expected future cash flows and other changes | [1] | (108,218) | ||
Ending balance | 761,190 | 93,901 | ||
Fair Value Agency Mortgage Servicing Rights [Member] | Conventional [Member] | ||||
Servicing Asset at Fair Value, Amount [Roll Forward] | ||||
Beginning balance | 93,901 | 116,029 | $ 85,213 | |
Fair value election - transfer of MSRs carried at amortized cost | 0 | 0 | 0 | |
Cumulative effect of fair value election | 0 | 0 | 0 | |
Sales | (70,930) | 0 | 0 | |
Additions recognized on the sale of residential mortgage loans | 0 | 0 | 0 | |
Servicing transfers and adjustments | 0 | 0 | 0 | |
Changes in valuation inputs or other assumptions | [1] | (639) | (15,028) | 44,199 |
Realization of expected future cash flows and other changes | [1] | (7,261) | (7,100) | (13,383) |
Ending balance | 15,071 | 93,901 | $ 116,029 | |
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 of MSRs carried at amortized cost | 787,142 | |||
Cumulative effect of fair value election | 52,015 | |||
Sales | (1,344) | |||
Additions recognized on the sale of residential mortgage loans | 1,007 | |||
Servicing transfers and adjustments | (2,428) | |||
Changes in valuation inputs or other assumptions | [1] | 10,684 | ||
Realization of expected future cash flows and other changes | [1] | (100,957) | ||
Ending balance | $ 746,119 | $ 0 | ||
[1] | Changes in fair value are recognized in Servicing and origination expense in the Consolidated Statements of Operations. |
Mortgage Servicing - Summary102
Mortgage Servicing - Summary of Estimated Change in the Value of MSRs Carried at Fair Value (Details) $ in Thousands | Dec. 31, 2015USD ($) |
Transfers and Servicing [Abstract] | |
Weighted average prepayment speeds, 10% | $ (65,518) |
Weighted average prepayment speeds, 20% | (140,457) |
Discount rate (Option-adjusted spread), 10% | (17,407) |
Discount rate (Option-adjusted spread), 20% | $ (34,492) |
Mortgage Servicing - Schedul103
Mortgage Servicing - Schedule of Composition of Primary Servicing and Subservicing Portfolios by Type of Property Serviced as Measured by UPB (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Schedule of Servicing and Subservicing Portfolio [Line Items] | |||
Assets Serviced | $ 250,966,112 | ||
Residential [Member] | |||
Schedule of Servicing and Subservicing Portfolio [Line Items] | |||
Servicing | 230,132,729 | $ 361,288,281 | $ 397,546,635 |
Subservicing | 20,833,383 | 37,439,446 | 67,104,697 |
Assets Serviced | 250,966,112 | 398,727,727 | 464,651,332 |
Commercial [Member] | |||
Schedule of Servicing and Subservicing Portfolio [Line Items] | |||
Servicing | 0 | 0 | 0 |
Subservicing | 105,268 | 149,737 | 400,502 |
Assets Serviced | 105,268 | 149,737 | 400,502 |
Total [Member] | |||
Schedule of Servicing and Subservicing Portfolio [Line Items] | |||
Servicing | 230,132,729 | 361,288,281 | 397,546,635 |
Subservicing | 20,938,651 | 37,589,183 | 67,505,199 |
Assets Serviced | $ 251,071,380 | $ 398,877,464 | $ 465,051,834 |
Mortgage Servicing - Schedul104
Mortgage Servicing - Schedule of Composition of Primary Servicing and Subservicing Portfolios by Type of Property Serviced as Measured by UPB (Footnote) (Details) - USD ($) $ in Billions | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Schedule of Servicing and Subservicing Portfolio [Line Items] | |||
Primary servicing unpaid principal balance | $ 137.1 | $ 160.8 | $ 175.1 |
Mortgage Servicing - Narrative
Mortgage Servicing - Narrative (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015USD ($)Loan | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Servicing Asset at Amortized Cost [Line Items] | |||
UPB of rights to MSRs sold | $ 137,100 | $ 160,800 | $ 175,100 |
UPB of small-balance commercial assets | $ 1,800 | 2,300 | 2,600 |
Number of non-agency and whole loans servicing agreements | Loan | 3,979 | ||
Number of non-agency and whole loans servicing agreements with minimum servicer ratings | Loan | 745 | ||
Unpaid principal balance of non-agency and whole loans servicing agreements with minimum servicer ratings | $ 40,100 | ||
Number of non-agency and whole loans servicing agreements with termination rights triggered | Loan | 664 | ||
Unpaid principal balance of non-agency and whole loans servicing agreements with termination rights triggered | $ 34,300 | ||
Percentage of non-agency and whole loans servicing agreements with termination rights triggered of servicing portfolio | 18.30% | ||
Percentage of servicing transferred due to downgrades in mortgage servicer rating | 0.17% | ||
Float balances | $ 2,200 | 3,400 | $ 3,200 |
NRZ [Member] | |||
Servicing Asset at Amortized Cost [Line Items] | |||
Reimbursements on account of loss of servicing revenues | $ 2.2 | 2 | |
Secured Debt [Member] | OASIS Series 2014-1 [Member] | |||
Servicing Asset at Amortized Cost [Line Items] | |||
Face amount | 123.6 | ||
Mortgage Servicing Rights [Member] | |||
Servicing Asset at Amortized Cost [Line Items] | |||
Unpaid principal balance | $ 11,800 |
Mortgage Servicing - Summary106
Mortgage Servicing - Summary of Geographic Distributions of UPB and Count of Residential Loans and Real Estate Serviced (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2015USD ($)loan | |
Mortgage Loans on Real Estate [Line Items] | |
Amount | $ | $ 250,966,112 |
Residential loans, count | loan | 1,624,762 |
California [Member] | |
Mortgage Loans on Real Estate [Line Items] | |
Amount | $ | $ 60,567,867 |
Residential loans, count | loan | 234,371 |
Florida [Member] | |
Mortgage Loans on Real Estate [Line Items] | |
Amount | $ | $ 21,004,999 |
Residential loans, count | loan | 147,454 |
New York [Member] | |
Mortgage Loans on Real Estate [Line Items] | |
Amount | $ | $ 20,735,251 |
Residential loans, count | loan | 86,951 |
New Jersey [Member] | |
Mortgage Loans on Real Estate [Line Items] | |
Amount | $ | $ 11,495,328 |
Residential loans, count | loan | 55,175 |
Texas [Member] | |
Mortgage Loans on Real Estate [Line Items] | |
Amount | $ | $ 11,393,316 |
Residential loans, count | loan | 127,397 |
Other [Member] | |
Mortgage Loans on Real Estate [Line Items] | |
Amount | $ | $ 125,769,351 |
Residential loans, count | loan | 973,414 |
Mortgage Servicing - Schedul107
Mortgage Servicing - Schedule of Components of Servicing and Subservicing Fees (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Transfers and Servicing [Abstract] | |||
Servicing | $ 1,148,278 | $ 1,363,800 | $ 1,246,882 |
Subservicing | 58,384 | 128,797 | 146,605 |
Servicing and Subservicing fees, total | 1,206,662 | 1,492,597 | 1,393,487 |
Home Affordable Modification Program (HAMP) fees | 135,036 | 141,121 | 152,812 |
Late charges | 82,690 | 121,618 | 115,826 |
Loan collection fees | 31,763 | 33,983 | 31,022 |
Custodial accounts (float earnings) | 15,870 | 6,693 | 5,332 |
Other | 59,776 | 98,163 | 125,080 |
Fees, total | $ 1,531,797 | $ 1,894,175 | $ 1,823,559 |
Receivables - Schedule of Recei
Receivables - Schedule of Receivables (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | |
Receivables [Abstract] | |||
Amount due on sales of mortgage servicing rights and advances | $ 94,629 | $ 0 | |
Government-insured loan claims | [1] | 71,405 | 52,955 |
Reimbursable expenses | 29,856 | 32,387 | |
Due from custodial accounts | 13,800 | 11,627 | |
Other servicing receivables | 32,879 | 29,516 | |
Servicing | 242,569 | 126,485 | |
Income taxes receivable | 53,519 | 68,322 | |
Due from related parties | [2] | 0 | 58,892 |
Other receivables | [3] | 29,818 | 43,690 |
Other receivables, gross | 325,906 | 297,389 | |
Allowance for losses | [1] | (38,925) | (26,793) |
Receivables, total | $ 286,981 | $ 270,596 | |
[1] | At December 31, 2015 and 2014, the total allowance for losses 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 December 31, 2015 and 2014 were $20.6 million and $10.0 million, respectively. | ||
[2] | 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. See Note 24 — Related Party Transactions for additional information. | ||
[3] | At December 31, 2014, Other receivables includes $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 $38.1 million in cash. |
Receivables - Schedule of Re109
Receivables - Schedule of Receivables (Footnote) (Details) - USD ($) $ in Millions | Mar. 19, 2015 | Dec. 31, 2015 | Dec. 31, 2014 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Allowance for losses related to FHA or VA insured loans | $ 20.6 | $ 10 | |
Other receivables, probable losses | $ 28.8 | ||
Homeward Acquisition [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Settlement of indemnification claims | $ 38.1 |
Premises and Equipment - Schedu
Premises and Equipment - Schedule of Premises and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | $ 118,843 | $ 122,306 |
Less accumulated depreciation and amortization | (61,217) | (78,996) |
Premises and equipment, net | 57,626 | 43,310 |
Computer Hardware and Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | 68,228 | 55,132 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | 23,326 | 28,549 |
Office Equipment and Other [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | 11,761 | 13,268 |
Buildings [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | 9,689 | 13,049 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | $ 5,839 | $ 12,308 |
Goodwill - Narrative (Details)
Goodwill - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Goodwill [Line Items] | ||||
Goodwill impairment loss | $ 420,200 | $ 0 | $ 420,201 | $ 0 |
Servicing [Member] | ||||
Goodwill [Line Items] | ||||
Goodwill impairment loss | 371,100 | |||
Lending [Member] | ||||
Goodwill [Line Items] | ||||
Goodwill impairment loss | $ 49,100 |
Other Assets - Schedule of Othe
Other Assets - Schedule of Other Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | |
Other Assets [Abstract] | |||
Contingent loan repurchase asset | [1] | $ 346,984 | $ 274,265 |
Debt service accounts | [2] | 87,328 | 91,974 |
Prepaid expenses | [3] | 69,805 | 17,957 |
Prepaid lender fees and debt issuance costs, net | [4] | 43,997 | 31,337 |
Real estate | 20,489 | 16,720 | |
Prepaid income taxes | [5] | 11,749 | 16,450 |
Mortgage-backed securities, at fair value | 7,985 | 7,335 | |
Derivatives, at fair value | 6,367 | 6,065 | |
Other | 16,292 | 28,708 | |
Other assets | $ 610,996 | $ 490,811 | |
[1] | In connection with the Ginnie Mae EBO program, 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 loans on our consolidated balance sheets 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 a 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. | ||
[3] | In connection with the sale of Agency MSRs in 2015, we placed $52.9 million in escrow for the payment of representation, warranty and indemnification claims associated with the underlying loans serviced. Prepaid expenses at December 31, 2015 includes the remaining balance of $41.3 million. | ||
[4] | We amortize these costs to the earlier of the scheduled amortization date, contractual maturity date or prepayment date of the debt. | ||
[5] | The deferred tax effects of intra-entity transfers of MSRs have been recognized as prepaid income taxes and are being amortized to Income tax expense over a 7-year period. |
Other Assets - Schedule of O113
Other Assets - Schedule of Other Assets (Footnote) (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Other Assets [Abstract] | |
Period required to remit collections on pledged advances | 2 days |
Escrow deposit for payment of representation, warranty and indemnification claims | $ 52.9 |
Prepaid expenses | $ 41.3 |
Period for deferred tax effects being amortized to income tax expense | 7 years |
Borrowings - Schedule of Match
Borrowings - Schedule of Match Funded Liabilities (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | ||
Debt Instrument [Line Items] | |||
Available Committed Borrowing Capacity | $ 24,467,000 | ||
Match funded liabilities | $ 1,584,049,000 | $ 2,090,247,000 | |
Weighted average interest rate | 3.15% | 1.97% | |
Ocwen Master Advance Receivables Trust (OMART) [Member] | |||
Debt Instrument [Line Items] | |||
Available Committed Borrowing Capacity | [1] | $ 106,844,000 | |
Match funded liabilities | 1,393,156,000 | $ 1,657,659,000 | |
Total Ocwen Servicer Advance Receivables Trust III (OSARTIII) [Member] | |||
Debt Instrument [Line Items] | |||
Available Committed Borrowing Capacity | [1] | 23,585,000 | |
Match funded liabilities | 51,415,000 | 59,014,000 | |
Total Ocwen Freddie Advance Funding (OFAF) [Member] | |||
Debt Instrument [Line Items] | |||
Available Committed Borrowing Capacity | [1],[2] | 10,522,000 | |
Match funded liabilities | [2] | $ 139,478,000 | 0 |
Ocwen Freddie Servicer Advance Receivables Trust Series 2012-ADV1 [Member] | |||
Debt Instrument [Line Items] | |||
Maturity | [3],[4] | Jun. 30, 2017 | |
Amortization Date | [3],[4] | Jun. 2015 | |
Available Committed Borrowing Capacity | [1],[4] | $ 0 | |
Match funded liabilities | [4] | $ 0 | 373,080,000 |
Ocwen Servicer Advance Funding (SBC) Note [Member] | |||
Debt Instrument [Line Items] | |||
Maturity | [3],[5] | Dec. 31, 2015 | |
Amortization Date | [3],[5] | Dec. 2014 | |
Available Committed Borrowing Capacity | [1],[5] | $ 0 | |
Match funded liabilities | [5] | $ 0 | 494,000 |
Advance Receivables Backed Notes, Series 2013-VF2, Class A [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||
Debt Instrument [Line Items] | |||
Maturity | [3],[6] | Oct. 31, 2045 | |
Amortization Date | [3],[6] | Oct. 2015 | |
Available Committed Borrowing Capacity | [1],[6] | $ 0 | |
Match funded liabilities | [6] | $ 0 | 519,634,000 |
Advance Receivables Backed Notes, Series 2013-VF2, Class B [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||
Debt Instrument [Line Items] | |||
Maturity | [3],[6] | Oct. 31, 2045 | |
Amortization Date | [3],[6] | Oct. 2015 | |
Available Committed Borrowing Capacity | [1],[6] | $ 0 | |
Match funded liabilities | [6] | $ 0 | 32,919,000 |
Advance Receivables Backed Notes - Series 2014-VF3, Class A [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||
Debt Instrument [Line Items] | |||
Maturity | [3],[7] | Sep. 30, 2046 | |
Amortization Date | [3],[7] | Sep. 2016 | |
Available Committed Borrowing Capacity | [1],[7] | $ 29,034,000 | |
Match funded liabilities | [7] | $ 132,651,000 | 552,553,000 |
Advance Receivables Backed Notes - Series 2014-VF3, Class B [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||
Debt Instrument [Line Items] | |||
Maturity | [3],[7] | Sep. 30, 2046 | |
Amortization Date | [3],[7] | Sep. 2016 | |
Available Committed Borrowing Capacity | [1],[7] | $ 1,294,000 | |
Match funded liabilities | [7] | $ 6,330,000 | 0 |
Advance Receivables Backed Notes - Series 2014-VF3, Class C [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||
Debt Instrument [Line Items] | |||
Maturity | [3],[7] | Sep. 30, 2046 | |
Amortization Date | [3],[7] | Sep. 2016 | |
Available Committed Borrowing Capacity | [1],[7] | $ 1,458,000 | |
Match funded liabilities | [7] | $ 6,977,000 | 0 |
Advance Receivables Backed Notes - Series 2014-VF3, Class D [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||
Debt Instrument [Line Items] | |||
Maturity | [3],[7] | Sep. 30, 2046 | |
Amortization Date | [3],[7] | Sep. 2016 | |
Available Committed Borrowing Capacity | [1],[7] | $ 3,829,000 | |
Match funded liabilities | [7] | $ 18,427,000 | 0 |
Advance Receivables Backed Notes - Series 2014-VF4, Class A [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||
Debt Instrument [Line Items] | |||
Maturity | [3],[8] | Sep. 30, 2046 | |
Amortization Date | [3],[8] | Sep. 2016 | |
Available Committed Borrowing Capacity | [1],[8] | $ 29,034,000 | |
Match funded liabilities | [8] | $ 132,651,000 | 552,553,000 |
Advance Receivables Backed Notes - Series 2014-VF4, Class B [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||
Debt Instrument [Line Items] | |||
Maturity | [3],[8] | Sep. 30, 2046 | |
Amortization Date | [3],[8] | Sep. 2016 | |
Available Committed Borrowing Capacity | [1],[8] | $ 1,294,000 | |
Match funded liabilities | [8] | $ 6,330,000 | 0 |
Advance Receivables Backed Notes - Series 2014-VF4, Class C [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||
Debt Instrument [Line Items] | |||
Maturity | [3],[8] | Sep. 30, 2046 | |
Amortization Date | [3],[8] | Sep. 2016 | |
Available Committed Borrowing Capacity | [1],[8] | $ 1,458,000 | |
Match funded liabilities | [8] | $ 6,977,000 | 0 |
Advance Receivables Backed Notes - Series 2014-VF4, Class D [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||
Debt Instrument [Line Items] | |||
Maturity | [3],[8] | Sep. 30, 2046 | |
Amortization Date | [3],[8] | Sep. 2016 | |
Available Committed Borrowing Capacity | [1],[8] | $ 3,829,000 | |
Match funded liabilities | [8] | $ 18,427,000 | 0 |
Advance Receivables Backed Notes - Series 2015-VF5, Class A [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||
Debt Instrument [Line Items] | |||
Maturity | [3],[9] | Sep. 30, 2046 | |
Amortization Date | [3],[9] | Sep. 2016 | |
Available Committed Borrowing Capacity | [1],[9] | $ 29,033,000 | |
Match funded liabilities | [9] | $ 132,652,000 | 0 |
Advance Receivables Backed Notes - Series 2015-VF5, Class B [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||
Debt Instrument [Line Items] | |||
Maturity | [3],[9] | Sep. 30, 2046 | |
Amortization Date | [3],[9] | Sep. 2016 | |
Available Committed Borrowing Capacity | [1],[9] | $ 1,294,000 | |
Match funded liabilities | [9] | $ 6,330,000 | 0 |
Advance Receivables Backed Notes - Series 2015-VF5, Class C [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||
Debt Instrument [Line Items] | |||
Maturity | [3],[9] | Sep. 30, 2046 | |
Amortization Date | [3],[9] | Sep. 2016 | |
Available Committed Borrowing Capacity | [1],[9] | $ 1,458,000 | |
Match funded liabilities | [9] | $ 6,977,000 | 0 |
Advance Receivables Backed Notes - Series 2015-VF5, Class D [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||
Debt Instrument [Line Items] | |||
Maturity | [3],[9] | Sep. 30, 2046 | |
Amortization Date | [3],[9] | Sep. 2016 | |
Available Committed Borrowing Capacity | [1],[9] | $ 3,829,000 | |
Match funded liabilities | [9] | $ 18,427,000 | 0 |
Advance Receivables Backed Notes - Series 2015-T1, Class A [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||
Debt Instrument [Line Items] | |||
Interest Rate | [9] | 2.5365% | |
Maturity | [3],[9] | Sep. 30, 2046 | |
Amortization Date | [3],[9] | Sep. 2016 | |
Available Committed Borrowing Capacity | [1],[9] | $ 0 | |
Match funded liabilities | [9] | $ 244,809,000 | 0 |
Advance Receivables Backed Notes - Series 2015-T1, Class B [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||
Debt Instrument [Line Items] | |||
Interest Rate | [9] | 3.0307% | |
Maturity | [3],[9] | Sep. 30, 2046 | |
Amortization Date | [3],[9] | Sep. 2016 | |
Available Committed Borrowing Capacity | [1],[9] | $ 0 | |
Match funded liabilities | [9] | $ 10,930,000 | 0 |
Advance Receivables Backed Notes - Series 2015-T1, Class C [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||
Debt Instrument [Line Items] | |||
Interest Rate | [9] | 3.524% | |
Maturity | [3],[9] | Sep. 30, 2046 | |
Amortization Date | [3],[9] | Sep. 2016 | |
Available Committed Borrowing Capacity | [1],[9] | $ 0 | |
Match funded liabilities | [9] | $ 12,011,000 | 0 |
Advance Receivables Backed Notes - Series 2015-T1, Class D [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||
Debt Instrument [Line Items] | |||
Interest Rate | [9] | 4.10% | |
Maturity | [3],[9] | Sep. 30, 2046 | |
Amortization Date | [3],[9] | Sep. 2016 | |
Available Committed Borrowing Capacity | [1],[9] | $ 0 | |
Match funded liabilities | [9] | $ 32,250,000 | 0 |
Advance Receivables Backed Notes - Series 2015-T2, Class A [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||
Debt Instrument [Line Items] | |||
Interest Rate | [10] | 2.532% | |
Maturity | [3],[10] | Nov. 30, 2046 | |
Amortization Date | [3],[10] | Nov. 2016 | |
Available Committed Borrowing Capacity | [1],[10] | $ 0 | |
Match funded liabilities | [10] | $ 161,973,000 | 0 |
Advance Receivables Backed Notes - Series 2015-T2, Class B [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||
Debt Instrument [Line Items] | |||
Interest Rate | [10] | 3.372% | |
Maturity | [3],[10] | Nov. 30, 2046 | |
Amortization Date | [3],[10] | Nov. 2016 | |
Available Committed Borrowing Capacity | [1],[10] | $ 0 | |
Match funded liabilities | [10] | $ 7,098,000 | 0 |
Advance Receivables Backed Notes - Series 2015-T2, Class C [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||
Debt Instrument [Line Items] | |||
Interest Rate | [10] | 3.766% | |
Maturity | [3],[10] | Nov. 30, 2046 | |
Amortization Date | [3],[10] | Nov. 2016 | |
Available Committed Borrowing Capacity | [1],[10] | $ 0 | |
Match funded liabilities | [10] | $ 8,113,000 | 0 |
Advance Receivables Backed Notes - Series 2015-T2, Class D [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||
Debt Instrument [Line Items] | |||
Interest Rate | [10] | 4.258% | |
Maturity | [3],[10] | Nov. 30, 2046 | |
Amortization Date | [3],[10] | Nov. 2016 | |
Available Committed Borrowing Capacity | [1],[10] | $ 0 | |
Match funded liabilities | [10] | $ 22,816,000 | 0 |
Advance Receivables Backed Notes - Series 2015-T3, Class A [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||
Debt Instrument [Line Items] | |||
Interest Rate | [10] | 3.211% | |
Maturity | [3],[10] | Nov. 30, 2047 | |
Amortization Date | [3],[10] | Nov. 2017 | |
Available Committed Borrowing Capacity | [1],[10] | $ 0 | |
Match funded liabilities | [10] | $ 310,195,000 | 0 |
Advance Receivables Backed Notes - Series 2015-T3, Class B [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||
Debt Instrument [Line Items] | |||
Interest Rate | [10] | 3.704% | |
Maturity | [3],[10] | Nov. 30, 2047 | |
Amortization Date | [3],[10] | Nov. 2017 | |
Available Committed Borrowing Capacity | [1],[10] | $ 0 | |
Match funded liabilities | [10] | $ 17,695,000 | 0 |
Advance Receivables Backed Notes - Series 2015-T3, Class C [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||
Debt Instrument [Line Items] | |||
Interest Rate | [10] | 4.196% | |
Maturity | [3],[10] | Nov. 30, 2047 | |
Amortization Date | [3],[10] | Nov. 2017 | |
Available Committed Borrowing Capacity | [1],[10] | $ 0 | |
Match funded liabilities | [10] | $ 19,262,000 | 0 |
Advance Receivables Backed Notes - Series 2015-T3, Class D [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||
Debt Instrument [Line Items] | |||
Interest Rate | [10] | 4.687% | |
Maturity | [3],[10] | Nov. 30, 2047 | |
Amortization Date | [3],[10] | Nov. 2017 | |
Available Committed Borrowing Capacity | [1],[10] | $ 0 | |
Match funded liabilities | [10] | $ 52,848,000 | 0 |
Advance Receivables Backed Notes, Series 2014-VF1, Class A [Member] | Total Ocwen Servicer Advance Receivables Trust III (OSARTIII) [Member] | |||
Debt Instrument [Line Items] | |||
Maturity | [3],[11] | Dec. 31, 2046 | |
Amortization Date | [3],[11] | Dec. 2016 | |
Available Committed Borrowing Capacity | [1],[11] | $ 14,350,000 | |
Match funded liabilities | [11] | $ 31,343,000 | 21,192,000 |
Advance Receivables Backed Notes, Series 2014-VF1, Class B [Member] | Total Ocwen Servicer Advance Receivables Trust III (OSARTIII) [Member] | |||
Debt Instrument [Line Items] | |||
Maturity | [3],[11] | Dec. 31, 2046 | |
Amortization Date | [3],[11] | Dec. 2016 | |
Available Committed Borrowing Capacity | [1],[11] | $ 1,902,000 | |
Match funded liabilities | [11] | $ 4,157,000 | 13,598,000 |
Advance Receivables Backed Notes, Series 2014-VF1, Class C [Member] | Total Ocwen Servicer Advance Receivables Trust III (OSARTIII) [Member] | |||
Debt Instrument [Line Items] | |||
Maturity | [3],[11] | Dec. 31, 2046 | |
Amortization Date | [3],[11] | Dec. 2016 | |
Available Committed Borrowing Capacity | [1],[11] | $ 2,096,000 | |
Match funded liabilities | [11] | $ 4,564,000 | 10,224,000 |
Advance Receivables Backed Notes, Series 2014-VF1, Class D [Member] | Total Ocwen Servicer Advance Receivables Trust III (OSARTIII) [Member] | |||
Debt Instrument [Line Items] | |||
Maturity | [3],[11] | Dec. 31, 2046 | |
Amortization Date | [3],[11] | Dec. 2016 | |
Available Committed Borrowing Capacity | [1],[11] | $ 5,237,000 | |
Match funded liabilities | [11] | $ 11,351,000 | 14,000,000 |
Advance Receivables Backed Notes, Series 2015-VF1, Class A [Member] | Total Ocwen Freddie Advance Funding (OFAF) [Member] | |||
Debt Instrument [Line Items] | |||
Maturity | [3] | Jun. 30, 2046 | |
Amortization Date | [3] | Jun. 2016 | |
Available Committed Borrowing Capacity | [1] | $ 8,584,000 | |
Match funded liabilities | $ 112,882,000 | 0 | |
Advance Receivables Backed Notes, Series 2015-VF1, Class B [Member] | Total Ocwen Freddie Advance Funding (OFAF) [Member] | |||
Debt Instrument [Line Items] | |||
Maturity | [3] | Jun. 30, 2046 | |
Amortization Date | [3] | Jun. 2016 | |
Available Committed Borrowing Capacity | [1] | $ 599,000 | |
Match funded liabilities | $ 12,268,000 | 0 | |
Advance Receivables Backed Notes, Series 2015-VF1, Class C [Member] | Total Ocwen Freddie Advance Funding (OFAF) [Member] | |||
Debt Instrument [Line Items] | |||
Maturity | [3] | Jun. 30, 2046 | |
Amortization Date | [3] | Jun. 2016 | |
Available Committed Borrowing Capacity | [1] | $ 649,000 | |
Match funded liabilities | $ 5,951,000 | 0 | |
Advance Receivables Backed Notes, Series 2015-VF1, Class D [Member] | Total Ocwen Freddie Advance Funding (OFAF) [Member] | |||
Debt Instrument [Line Items] | |||
Maturity | [3] | Jun. 30, 2046 | |
Amortization Date | [3] | Jun. 2016 | |
Available Committed Borrowing Capacity | [1] | $ 690,000 | |
Match funded liabilities | 8,377,000 | 0 | |
Match Funded Liabilties [Member] | |||
Debt Instrument [Line Items] | |||
Available Committed Borrowing Capacity | [1] | 140,951,000 | |
Match funded liabilities | $ 1,584,049,000 | $ 2,090,247,000 | |
LIBOR [Member] | Ocwen Freddie Servicer Advance Receivables Trust Series 2012-ADV1 [Member] | |||
Debt Instrument [Line Items] | |||
Interest Rate | [3],[4],[12] | 1.75% | |
LIBOR [Member] | Ocwen Servicer Advance Funding (SBC) Note [Member] | |||
Debt Instrument [Line Items] | |||
Interest Rate | [5] | 3.00% | |
LIBOR [Member] | Advance Receivables Backed Notes - Series 2014-VF3, Class A [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||
Debt Instrument [Line Items] | |||
Interest Rate | [7] | 2.35% | |
LIBOR [Member] | Advance Receivables Backed Notes - Series 2014-VF3, Class B [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||
Debt Instrument [Line Items] | |||
Interest Rate | [7] | 3.00% | |
LIBOR [Member] | Advance Receivables Backed Notes - Series 2014-VF3, Class C [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||
Debt Instrument [Line Items] | |||
Interest Rate | [7] | 4.25% | |
LIBOR [Member] | Advance Receivables Backed Notes - Series 2014-VF3, Class D [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||
Debt Instrument [Line Items] | |||
Interest Rate | [7] | 5.75% | |
LIBOR [Member] | Advance Receivables Backed Notes - Series 2014-VF4, Class A [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||
Debt Instrument [Line Items] | |||
Interest Rate | [8] | 2.35% | |
LIBOR [Member] | Advance Receivables Backed Notes - Series 2014-VF4, Class B [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||
Debt Instrument [Line Items] | |||
Interest Rate | [8] | 3.00% | |
LIBOR [Member] | Advance Receivables Backed Notes - Series 2014-VF4, Class C [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||
Debt Instrument [Line Items] | |||
Interest Rate | [8] | 4.25% | |
LIBOR [Member] | Advance Receivables Backed Notes - Series 2014-VF4, Class D [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||
Debt Instrument [Line Items] | |||
Interest Rate | [8] | 5.75% | |
LIBOR [Member] | Advance Receivables Backed Notes - Series 2015-VF5, Class A [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||
Debt Instrument [Line Items] | |||
Interest Rate | [9] | 2.35% | |
LIBOR [Member] | Advance Receivables Backed Notes - Series 2015-VF5, Class B [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||
Debt Instrument [Line Items] | |||
Interest Rate | [9] | 3.00% | |
LIBOR [Member] | Advance Receivables Backed Notes - Series 2015-VF5, Class C [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||
Debt Instrument [Line Items] | |||
Interest Rate | [9] | 4.25% | |
LIBOR [Member] | Advance Receivables Backed Notes - Series 2015-VF5, Class D [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||
Debt Instrument [Line Items] | |||
Interest Rate | [9] | 5.75% | |
LIBOR [Member] | Advance Receivables Backed Notes, Series 2015-VF1, Class A [Member] | Total Ocwen Freddie Advance Funding (OFAF) [Member] | |||
Debt Instrument [Line Items] | |||
Interest Rate | 2.125% | ||
LIBOR [Member] | Advance Receivables Backed Notes, Series 2015-VF1, Class B [Member] | Total Ocwen Freddie Advance Funding (OFAF) [Member] | |||
Debt Instrument [Line Items] | |||
Interest Rate | 3.00% | ||
LIBOR [Member] | Advance Receivables Backed Notes, Series 2015-VF1, Class C [Member] | Total Ocwen Freddie Advance Funding (OFAF) [Member] | |||
Debt Instrument [Line Items] | |||
Interest Rate | 3.50% | ||
LIBOR [Member] | Advance Receivables Backed Notes, Series 2015-VF1, Class D [Member] | Total Ocwen Freddie Advance Funding (OFAF) [Member] | |||
Debt Instrument [Line Items] | |||
Interest Rate | 4.25% | ||
Cost of Funds [Member] | Advance Receivables Backed Notes, Series 2013-VF2, Class A [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||
Debt Instrument [Line Items] | |||
Interest Rate | [6] | 2.39% | |
Cost of Funds [Member] | Advance Receivables Backed Notes, Series 2013-VF2, Class B [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||
Debt Instrument [Line Items] | |||
Interest Rate | [6] | 4.29% | |
Cost of Funds [Member] | Advance Receivables Backed Notes, Series 2014-VF1, Class A [Member] | Total Ocwen Servicer Advance Receivables Trust III (OSARTIII) [Member] | |||
Debt Instrument [Line Items] | |||
Interest Rate | [11] | 2.65% | |
Cost of Funds [Member] | Advance Receivables Backed Notes, Series 2014-VF1, Class B [Member] | Total Ocwen Servicer Advance Receivables Trust III (OSARTIII) [Member] | |||
Debt Instrument [Line Items] | |||
Interest Rate | [11] | 4.25% | |
Cost of Funds [Member] | Advance Receivables Backed Notes, Series 2014-VF1, Class C [Member] | Total Ocwen Servicer Advance Receivables Trust III (OSARTIII) [Member] | |||
Debt Instrument [Line Items] | |||
Interest Rate | [11] | 4.65% | |
Cost of Funds [Member] | Advance Receivables Backed Notes, Series 2014-VF1, Class D [Member] | Total Ocwen Servicer Advance Receivables Trust III (OSARTIII) [Member] | |||
Debt Instrument [Line Items] | |||
Interest Rate | [11] | 5.15% | |
[1] | Borrowing capacity is available to us provided that we have additional eligible collateral to pledge. Collateral may only be pledged to one facility. At December 31, 2015, $24.5 million of the available borrowing capacity could be used based on the amount of eligible collateral that had been pledged. | ||
[2] | We entered into OFAF facility on June 10, 2015, and issued the Series 2015-T1 and Series 2015-T2 Term Notes on June 26, 2015. The Series 2015-T2 Notes with a combined borrowing capacity of $155.0 million were fully repaid on September 15, 2015, and the Series 2015-T1 Notes with a combined borrowing capacity of $70.0 million were fully repaid on November 16, 2015. On November 20, 2015, the combined borrowing capacity of the Series 2015-VF1 Notes issued under this facility was reduced to $150.0 million. | ||
[3] | The amortization date of our facilities is the date on which the revolving period ends under each advance facility note and repayment of the outstanding balance must begin if the note is not renewed or extended. The maturity date is the date on which all outstanding balances must be repaid. In all 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 outstanding, and any new advances are ineligible to be financed. | ||
[4] | We repaid this facility in full in June 2015 from the proceeds of the OFAF facility. | ||
[5] | We voluntarily terminated this advance facility on January 30, 2015. | ||
[6] | The OMART Series 2013-VF2 Notes were repaid in full on September 18, 2015. | ||
[7] | On September 18, 2015, the Series 2014-VF3 Notes, Class B, C and D Notes, a series of variable funding notes under our OMART facility, were issued, and the existing Class A Note was canceled and a new Class A Note was issued. During 2015, we negotiated a series of reductions in the combined maximum borrowing capacity of the Series 2014-VF3 Notes from $600.0 million at December 31, 2014 to $200.0 million at December 31, 2015. There is a ceiling of 75 bps for 1 ML in determining the interest rate for these 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. During 2015, we negotiated a series of reductions in the combined maximum borrowing capacity of the Series 2014-VF4 Notes from $600.0 million at December 31, 2014 to $200.0 million at December 31, 2015. There is a ceiling 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. We negotiated a series of reductions in the combined maximum borrowing capacity of the Series 2015-VF5 Notes from $450.0 million at September 18, 2015 to $200.0 million at December 31, 2015. There is a ceiling of 75 bps for 1 ML in determining the interest for variable rate Notes. | ||
[10] | On November 13, 2015, we issued the Series 2015-T2 and Series 2015 T-3 Notes under our OMART facility. Under the terms of the agreement, we must continue to borrow the full amount of the Series 2015-T2 and T-3 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. | ||
[11] | Beginning April 23, 2015, the maximum borrowing under the OSART III facility decreased by $6.3 million per month until it reduced to $75.0 million. On December 21, 2015, we renewed this facility for an additional year and maintained the maximum borrowing capacity. | ||
[12] | 1-Month LIBOR was 0.43% and 0.17% at December 31, 2015 and 2014, respectively. |
Borrowings - Schedule of Mat115
Borrowings - Schedule of Match Funded Liabilities (Footnote) (Details) - USD ($) | Nov. 16, 2015 | Sep. 18, 2015 | Sep. 15, 2015 | Jul. 01, 2015 | Apr. 23, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Debt Instrument [Line Items] | ||||||||
Available borrowing capacity | $ 24,467,000 | |||||||
Total Ocwen Servicer Advance Receivables Trust III (OSARTIII) [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Available borrowing capacity | [1] | 23,585,000 | ||||||
Maximum borrowing capacity | $ 75,000,000 | |||||||
Increase (decrease) to borrowing capacity | $ (6,300,000) | |||||||
Ocwen Freddie Servicer Advance Receivables Trust Series 2012-ADV1 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Available borrowing capacity | [1],[2] | 0 | ||||||
Ocwen Servicer Advance Funding (SBC) Note [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Available borrowing capacity | [1],[3] | $ 0 | ||||||
Advance facility, termination date | Jan. 30, 2015 | |||||||
OMART Series 2013-VF2 Notes [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Advance facility, repayment date | Sep. 18, 2015 | |||||||
Series 2014 VF3 Notes [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | $ 200,000,000 | $ 600,000,000 | ||||||
Interest rate | 0.75% | |||||||
Series 2014 VF4 Notes [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | 200,000,000 | $ 600,000,000 | ||||||
Interest rate | 0.75% | |||||||
Series 2015 VF2 Notes [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | $ 450,000,000 | $ 200,000,000 | ||||||
Interest rate | 7.50% | |||||||
Series 2015 T2 Notes [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Advance facility, repayment date | Sep. 15, 2015 | |||||||
Repayments of Debt | $ 155,000,000 | |||||||
Series 2015 T1 Notes [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Advance facility, repayment date | Nov. 16, 2015 | |||||||
Repayments of Debt | $ 70,000,000 | |||||||
Series 2015 VF1 Notes [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | $ 150,000,000 | |||||||
LIBOR [Member] | Ocwen Freddie Servicer Advance Receivables Trust Series 2012-ADV1 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
1-Month LIBOR | 0.43% | 0.17% | ||||||
Interest rate | [2],[4],[5] | 1.75% | ||||||
LIBOR [Member] | Ocwen Servicer Advance Funding (SBC) Note [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate | [3] | 3.00% | ||||||
[1] | Borrowing capacity is available to us provided that we have additional eligible collateral to pledge. Collateral may only be pledged to one facility. At December 31, 2015, $24.5 million of the available borrowing capacity could be used based on the amount of eligible collateral that had been pledged. | |||||||
[2] | We repaid this facility in full in June 2015 from the proceeds of the OFAF facility. | |||||||
[3] | We voluntarily terminated this advance facility on January 30, 2015. | |||||||
[4] | 1-Month LIBOR was 0.43% and 0.17% at December 31, 2015 and 2014, respectively. | |||||||
[5] | The amortization date of our facilities is the date on which the revolving period ends under each advance facility note and repayment of the outstanding balance must begin if the note is not renewed or extended. The maturity date is the date on which all outstanding balances must be repaid. In all of our advance facilities, there are multiple notes outstanding. For each note, after the amortization date, all collections that represent the repayment of advances pledged to the facility must be applied to reduce the balance of the note outstanding, and any new advances are ineligible to be financed. |
Borrowings - Schedule of Financ
Borrowings - Schedule of Financing Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | ||
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 3,089,255 | $ 2,258,641 | |
Financing Liabilities [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 3,089,255 | 2,258,641 | |
Financing Liabilities [Member] | Servicing [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 697,893 | 814,389 | |
Financing Liability - MSRs Pledged [Member] | Financing Liabilities [Member] | Servicing [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | [1] | $ 541,704 | 614,441 |
Secured Notes, Ocwen Asset Servicing Income Series, Series 2014-1 [Member] | Financing Liabilities [Member] | Servicing [Member] | |||
Debt Instrument [Line Items] | |||
Maturity | Feb. 28, 2028 | ||
Long-term debt, gross | [2] | $ 96,546 | 111,459 |
Financing Liability – Advances Pledged [Member] | Financing Liabilities [Member] | Servicing [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | [3] | 59,643 | 88,489 |
HMBS - Related Borrowings [Member] | Financing Liabilities [Member] | Lending [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | [4] | $ 2,391,362 | $ 1,444,252 |
LIBOR [Member] | HMBS - Related Borrowings [Member] | Financing Liabilities [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate | 2.48% | ||
[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 Fin117
Borrowings - Schedule of Financing Liabilities (Footnote) (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Secured Notes, Ocwen Asset Servicing Income Series, Series 2014-1 [Member] | |
Debt Instrument [Line Items] | |
Basis points | 0.21% |
Borrowings - Schedule of Other
Borrowings - Schedule of Other Secured Borrowings (Details) - USD ($) | Oct. 20, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Feb. 15, 2013 | |
Line of Credit Facility [Line Items] | |||||
Available Committed Borrowing Capacity | $ 24,467,000 | ||||
Long-term debt, gross | 3,089,255,000 | $ 2,258,641,000 | |||
Total Balance | 2,716,472,000 | ||||
SSTL [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Percentage of additional interest rates | 0.50% | ||||
Other Secured Borrowings [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Available Committed Borrowing Capacity | 50,801,000 | ||||
Long-term debt, gross | 783,774,000 | 1,737,722,000 | |||
Discount | [1] | (1,351,000) | (4,031,000) | ||
Total Balance | $ 782,423,000 | $ 1,733,691,000 | |||
Weighted average interest rate | 4.38% | 4.33% | |||
Servicing [Member] | Other Secured Borrowings [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Available Committed Borrowing Capacity | $ 7,027,000 | ||||
Long-term debt, gross | $ 441,427,000 | $ 1,309,268,000 | |||
Servicing [Member] | Other Secured Borrowings [Member] | SSTL [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Maturity date | [1] | Feb. 28, 2018 | |||
Available Committed Borrowing Capacity | [1] | $ 0 | |||
Long-term debt, gross | [1] | $ 398,454,000 | 1,277,250,000 | ||
Discount | $ (6,500,000) | ||||
Servicing [Member] | Other Secured Borrowings [Member] | Repurchase Agreement [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Maturity date | [2] | Sep. 30, 2016 | |||
Available Committed Borrowing Capacity | [2] | $ 7,027,000 | |||
Long-term debt, gross | [2] | 42,973,000 | 32,018,000 | ||
Lending [Member] | Other Secured Borrowings [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Available Committed Borrowing Capacity | 43,774,000 | ||||
Long-term debt, gross | $ 342,347,000 | 428,454,000 | |||
Lending [Member] | Other Secured Borrowings [Member] | Master Repurchase Agreement [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Maturity date | [3] | Aug. 31, 2016 | |||
Available Committed Borrowing Capacity | [3] | $ 43,774,000 | |||
Long-term debt, gross | [3] | $ 156,226,000 | 208,010,000 | ||
Lending [Member] | Other Secured Borrowings [Member] | Participation Agreement [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Maturity date | [4] | Apr. 30, 2016 | |||
Available Committed Borrowing Capacity | [4] | $ 0 | |||
Long-term debt, gross | [4] | $ 49,897,000 | 41,646,000 | ||
Lending [Member] | Other Secured Borrowings [Member] | Participation Agreement [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Maturity date | [5] | Apr. 30, 2016 | |||
Available Committed Borrowing Capacity | [5] | $ 0 | |||
Long-term debt, gross | [5] | $ 73,049,000 | 196,000 | ||
Lending [Member] | Other Secured Borrowings [Member] | Master Repurchase Agreement [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Maturity date | [6] | Jul. 31, 2015 | |||
Available Committed Borrowing Capacity | [6] | $ 0 | |||
Long-term debt, gross | [6] | $ 0 | 102,073,000 | ||
Lending [Member] | Other Secured Borrowings [Member] | Master Repurchase Agreement [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Maturity date | [7] | Jul. 31, 2015 | |||
Available Committed Borrowing Capacity | [7] | $ 0 | |||
Long-term debt, gross | [7] | $ 0 | 52,678,000 | ||
Lending [Member] | Other Secured Borrowings [Member] | Mortgage Warehouse Agreement [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Maturity date | [8] | May 31, 2016 | |||
Available Committed Borrowing Capacity | [8] | $ 0 | |||
Long-term debt, gross | [8] | $ 63,175,000 | $ 23,851,000 | ||
Interest rate at floor | [8] | 3.50% | |||
LIBOR [Member] | Lending [Member] | Other Secured Borrowings [Member] | Master Repurchase Agreement [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Interest rate | [3] | 2.00% | |||
LIBOR [Member] | Lending [Member] | Other Secured Borrowings [Member] | Master Repurchase Agreement [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Interest rate | [7] | 2.75% | |||
LIBOR [Member] | Lending [Member] | Other Secured Borrowings [Member] | Mortgage Warehouse Agreement [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Interest rate | [8] | 2.75% | |||
Eurodollar [Member] | Servicing [Member] | Other Secured Borrowings [Member] | SSTL [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Interest rate | [1] | 4.25% | |||
Interest rate at floor | [1] | 1.25% | |||
Maximum [Member] | LIBOR [Member] | Servicing [Member] | Other Secured Borrowings [Member] | Repurchase Agreement [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Interest rate | [2] | 3.45% | |||
Maximum [Member] | LIBOR [Member] | Lending [Member] | Other Secured Borrowings [Member] | Master Repurchase Agreement [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Interest rate | [6] | 2.75% | |||
Minimum [Member] | LIBOR [Member] | Servicing [Member] | Other Secured Borrowings [Member] | Repurchase Agreement [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Interest rate | [2] | 2.00% | |||
Minimum [Member] | LIBOR [Member] | Lending [Member] | Other Secured Borrowings [Member] | Master Repurchase Agreement [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Interest rate | [6] | 1.75% | |||
[1] | On February 15, 2013, we entered into a new SSTL facility agreement and borrowed $1.3 billion that was used principally to fund the ResCap Acquisition and repay the balance of the previous SSTL. The loan was issued with an original issue discount of $6.5 million that we are amortizing over the term of the loan. We are required to repay the principal amount of the borrowings in consecutive quarterly installments of $3.3 million. 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 3.25% and a base rate floor of 2.25% or (b) the one month Eurodollar rate, plus a margin of 4.25% and a one month Eurodollar floor of 1.25%. To date we have elected option (b) to determine the interest rate.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:•waived, until the fiscal quarter ending June 30, 2017, the interest coverage ratio and corporate leverage ratio financial covenants;•established a process for designating foreign subsidiaries as subsidiary guarantors under the SSTL;•increased our capacity to make certain permitted investments under the investment covenant;•expanded our ability to exclude certain assets from the collateral securing the SSTL, to the extent necessary to meet regulatory minimum net worth requirements;•increased the applicable interest rate margin by 0.50%;•required that we 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;•provided 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•made certain conforming modifications as well as adjustments to definitions. | ||||
[2] | On September 20, 2015, this repurchase agreement was renewed through September 29, 2016. On November 20, 2015, the maximum borrowing under this facility was limited to the lesser of $100.0 million or $550.0 million less the lender’s current lending to Ocwen under advance funding facilities. Fifty percent of the maximum borrowing is available on a committed basis and fifty percent is available at the discretion of the lender. | ||||
[3] | On August 25, 2015, this repurchase agreement was renewed through August 23, 2016. Under this repurchase agreement, the lender provides financing on a committed basis for $200.0 million. | ||||
[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. On March 10, 2015, the maturity date of this agreement was extended to April 30, 2016, and the maximum borrowing was reduced to $50.0 million. On April 16, 2015, the maximum borrowing capacity was increased to $100.0 million. | ||||
[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. On March 10, 2015, the maturity date of this agreement was extended to April 30, 2016. | ||||
[6] | On April 16, 2015, this facility was voluntarily terminated. | ||||
[7] | This facility was voluntarily terminated on its maturity date. | ||||
[8] | Borrowing capacity of $100.0 million under this facility is available at the discretion of the lender. This facility was renewed on August 24, 2015. |
Borrowings - Schedule of Oth119
Borrowings - Schedule of Other Secured Borrowings (Footnote) (Details) - USD ($) | Nov. 20, 2015 | Oct. 20, 2015 | Feb. 15, 2013 | Dec. 31, 2015 | Apr. 16, 2015 | Mar. 10, 2015 | Dec. 31, 2014 | |
Secured Debt [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Discount | [1] | $ 1,351,000 | $ 4,031,000 | |||||
SSTL [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Percentage of additional interest rates | 0.50% | |||||||
Percentage Of Net Cash Proceeds From Permitted Asset Sales Allowed To Prepay Loans | 100.00% | |||||||
Percentage Of Lender Fee | 3.00% | |||||||
Servicing [Member] | SSTL [Member] | Secured Debt [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Amount borrowed | $ 1,300,000,000 | |||||||
Discount | 6,500,000 | |||||||
Amount of consecutive quarterly installments | $ 3,300,000 | |||||||
Servicing [Member] | Repurchase Agreement [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Percentage Of Borrowing Capacity Available On Commitment Basis | 50.00% | |||||||
Percentage Of Maximum Borrowing Available at Discretion Of Lender | 50.00% | |||||||
Servicing [Member] | Repurchase Agreement [Member] | Secured Debt [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | $ 100,000,000 | |||||||
Lending [Member] | Master Repurchase Agreement [Member] | Secured Debt [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | 200,000,000 | |||||||
Lending [Member] | Participation Agreement [Member] | Secured Debt [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | $ 100,000,000 | $ 100,000,000 | $ 50,000,000 | |||||
Beneficial interest | 100.00% | |||||||
Lending [Member] | Participation Agreement [Member] | Secured Debt [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | $ 150,000,000 | |||||||
Beneficial interest | 100.00% | |||||||
Lending [Member] | Mortgage Warehouse Agreement [Member] | Secured Debt [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate at floor | [2] | 3.50% | ||||||
Additional borrowing capacity | $ 100,000,000 | |||||||
Option A1 [Member] | Servicing [Member] | SSTL [Member] | Secured Debt [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Description of variable rate basis | the prime rate in effect on such day | |||||||
Option A2 [Member] | Servicing [Member] | SSTL [Member] | Secured Debt [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Description of variable rate basis | the federal funds rate in effect on such day | |||||||
Interest rate | 0.50% | |||||||
Option A3 [Member] | Servicing [Member] | SSTL [Member] | Secured Debt [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Description of variable rate basis | the one-month Eurodollar rate (1-Month LIBOR) | |||||||
Interest rate | 3.25% | |||||||
Interest rate at floor | 2.25% | |||||||
Option B [Member] | Servicing [Member] | SSTL [Member] | Secured Debt [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Description of variable rate basis | the one month Eurodollar rate | |||||||
Interest rate | 4.25% | |||||||
Interest rate at floor | 1.25% | |||||||
Maximum [Member] | Servicing [Member] | Repurchase Agreement [Member] | Secured Debt [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | $ 550,000,000 | |||||||
[1] | On February 15, 2013, we entered into a new SSTL facility agreement and borrowed $1.3 billion that was used principally to fund the ResCap Acquisition and repay the balance of the previous SSTL. The loan was issued with an original issue discount of $6.5 million that we are amortizing over the term of the loan. We are required to repay the principal amount of the borrowings in consecutive quarterly installments of $3.3 million. 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 3.25% and a base rate floor of 2.25% or (b) the one month Eurodollar rate, plus a margin of 4.25% and a one month Eurodollar floor of 1.25%. To date we have elected option (b) to determine the interest rate.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:•waived, until the fiscal quarter ending June 30, 2017, the interest coverage ratio and corporate leverage ratio financial covenants;•established a process for designating foreign subsidiaries as subsidiary guarantors under the SSTL;•increased our capacity to make certain permitted investments under the investment covenant;•expanded our ability to exclude certain assets from the collateral securing the SSTL, to the extent necessary to meet regulatory minimum net worth requirements;•increased the applicable interest rate margin by 0.50%;•required that we 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;•provided 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•made certain conforming modifications as well as adjustments to definitions. | |||||||
[2] | Borrowing capacity of $100.0 million under this facility is available at the discretion of the lender. This facility was renewed on August 24, 2015. |
Borrowings - Narrative (Details
Borrowings - Narrative (Details) - USD ($) | May. 12, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Line of Credit Facility [Line Items] | ||||
UPB of rights to MSRs sold | $ 119,700,000,000 | |||
Percentage of principal amount, repurchase price | 101.00% | |||
Deb covenant, required consolidated tangible net worth | $ 1,100,000,000 | |||
Senior Unsecured Notes [Member] | 6.625 Senior Notes, Due 2019 [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Face amount | $ 350,000,000 | |||
Stated interest rate | 6.625% | |||
Net proceeds from sale of notes | $ 343,300,000 | |||
Maturity | May 15, 2019 | |||
Period of time after closing of offering to file registration statement and have it become effective | 270 days | |||
Percentage of additional interest rates | 0.25% | |||
Period for additional interest accrued on non completion of exchange offer | 90 days | |||
Unamortized balance of issuance costs | $ 4,500,000 | $ 5,800,000 | ||
Any Time Prior to May 15, 2016 [Member] | Senior Unsecured Notes [Member] | 6.625 Senior Notes, Due 2019 [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Redemption price | 100.00% | |||
Maximum percentage available for redemption using net cash proceeds of one or more Equity Offerings as defined in Indenture | 35.00% | |||
Percentage of principal amount, redemption price | 106.625% | |||
Percentage of principal amount to remain outstanding after redemption requirement | 65.00% | |||
Maximum period for redemption after consummation of Equity Offering | 120 days | |||
Any Time Prior to May 15, 2016 [Member] | Senior Unsecured Notes [Member] | 6.625 Senior Notes, Due 2019 [Member] | Minimum [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Redemption period, notice | 30 days | |||
Additional premium, percentage of principal amount | 1.00% | |||
Any Time Prior to May 15, 2016 [Member] | Senior Unsecured Notes [Member] | 6.625 Senior Notes, Due 2019 [Member] | Maximum [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Redemption period, notice | 60 days | |||
On or After May 15, 2016 [Member] | Senior Unsecured Notes [Member] | 6.625 Senior Notes, Due 2019 [Member] | Minimum [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Redemption period, notice | 30 days | |||
On or After May 15, 2016 [Member] | Senior Unsecured Notes [Member] | 6.625 Senior Notes, Due 2019 [Member] | Maximum [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Redemption period, notice | 60 days | |||
NRZ [Member] | ||||
Line of Credit Facility [Line Items] | ||||
UPB of rights to MSRs sold | $ 137,100,000,000 | |||
Outstanding servicing advances | $ 5,200,000,000 |
Borrowings - Schedule of Redemp
Borrowings - Schedule of Redemption Prices (Details) - 6.625 Senior Notes, Due 2019 [Member] - Senior Unsecured Notes [Member] | 12 Months Ended |
Dec. 31, 2015 | |
2016 [Member] | |
Debt Instrument [Line Items] | |
Redemption Price | 104.969% |
2017 [Member] | |
Debt Instrument [Line Items] | |
Redemption Price | 103.313% |
2018 and Thereafter [Member] | |
Debt Instrument [Line Items] | |
Redemption Price | 100.00% |
Borrowings - Schedule of Aggreg
Borrowings - Schedule of Aggregate Long-term Borrowings (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | |
Debt Instrument [Line Items] | |||
2,016 | [1],[2] | $ 1,581,709 | |
2,017 | [1],[2] | 412,361 | |
2,018 | [1],[2] | 372,402 | |
2,019 | [1],[2] | 350,000 | |
2,020 | [1],[2] | 0 | |
There-after | [1],[2] | 0 | |
Total Balance | 2,716,472 | ||
Fair value | 2,683,125 | ||
Match Funded Liabilties [Member] | |||
Debt Instrument [Line Items] | |||
2,016 | [1],[2] | 1,184,049 | |
2,017 | [1],[2] | 400,000 | |
2,018 | [1],[2] | 0 | |
2,019 | [1],[2] | 0 | |
2,020 | [1],[2] | 0 | |
There-after | [1],[2] | 0 | |
Total Balance | 1,584,049 | ||
Fair value | 1,581,786 | ||
Other Secured Borrowings [Member] | |||
Debt Instrument [Line Items] | |||
2,016 | [1],[2] | 397,660 | |
2,017 | [1],[2] | 12,361 | |
2,018 | [1],[2] | 372,402 | |
2,019 | [1],[2] | 0 | |
2,020 | [1],[2] | 0 | |
There-after | [1],[2] | 0 | |
Total Balance | 782,423 | $ 1,733,691 | |
Fair value | 783,276 | ||
Senior Unsecured Notes [Member] | |||
Debt Instrument [Line Items] | |||
2,016 | [1],[2] | 0 | |
2,017 | [1],[2] | 0 | |
2,018 | [1],[2] | 0 | |
2,019 | [1],[2] | 350,000 | |
2,020 | [1],[2] | 0 | |
There-after | [1],[2] | 0 | |
Total Balance | 350,000 | ||
Fair value | $ 318,063 | ||
[1] | Excludes financing liabilities, which we recognized in connection with asset sales transactions that we accounted for as financings. Financing liabilities include $541.7 million recorded in connection with sales of MSRs and Rights to MSRs and $2.4 billion recorded in connection with the securitizations of HMBS. The MSR-related financing liabilities have no contractual maturity and are amortized over the life of the transferred Rights to MSRs. The HMBS-related financing liabilities have no contractual maturity and are amortized as the related loans are repaid. | ||
[2] | For match funded liabilities, the expected maturity date is the date on which the revolving period ends for each advance financing facility note and repayment of the outstanding balance must begin if the note is not renewed or extended. |
Borrowings - Schedule of Agg123
Borrowings - Schedule of Aggregate Long-term Borrowings (Footnote) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | |
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 3,089,255 | $ 2,258,641 | |
Financing Liabilities [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 3,089,255 | 2,258,641 | |
Servicing [Member] | Financing Liabilities [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 697,893 | 814,389 | |
Servicing [Member] | Financing Liabilities [Member] | Sale of MSRs and Rights To MSRs [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 541,700 | ||
Lending [Member] | Financing Liabilities [Member] | HMBS - Related Borrowings [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | [1] | $ 2,391,362 | $ 1,444,252 |
[1] | 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 Liabilities - Schedule of
Other Liabilities - Schedule of Other Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Other Liabilities Disclosure [Abstract] | |||||
Contingent loan repurchase liability | [1] | $ 346,984 | $ 274,265 | ||
Accrued expenses | 188,856 | 142,592 | |||
Liability for uncertain tax positions | 44,751 | 28,436 | |||
Liability for indemnification obligations | 36,615 | 132,918 | $ 192,716 | $ 38,140 | |
Payable to servicing and subservicing investors | [2] | 15,941 | 67,722 | ||
Due to related parties | [3] | 0 | 55,585 | ||
Checks held for escheat | 14,301 | 18,513 | |||
Other | 96,996 | 73,503 | |||
Other liabilities | $ 744,444 | $ 793,534 | |||
[1] | In connection with the Ginnie Mae EBO program, 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] | The balance represents amounts due to investors in connection with loans we service under servicing and subservicing agreements. | ||||
[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. See Note 24 — Related Party Transactions for additional information. |
Equity - Narrative (Details)
Equity - Narrative (Details) - USD ($) | Jul. 14, 2014 | Sep. 23, 2013 | Dec. 27, 2012 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2015 | Oct. 31, 2013 |
Class of Stock [Line Items] | ||||||||
Payments for repurchase of equity | $ 72,300,000 | |||||||
Share repurchase program, authorized amount of repurchase | $ 500,000,000 | |||||||
Repurchase of common stock, value (in dollars) | $ 4,142,000 | $ 382,487,000 | $ 217,903,000 | $ 374,400,000 | ||||
Repurchase of common stock (in shares) | 625,705 | 12,171,808 | ||||||
Homeward Acquisition [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Payments for repurchase of equity | $ 157,900,000 | |||||||
Shares issued upon election (in shares) | 1,950,296 | 3,145,640 | ||||||
Homeward Acquisition [Member] | Series A Perpetual Convertible Preferred Stock [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Number of convertible shares remaining (in shares) | 62,000 | 100,000 | ||||||
Preferred shares issued (in shares) | 162,000 | |||||||
Preferred stock, par value (in dollars per share) | $ 0.01 | |||||||
Preferred stock, dividend rate | 3.75% | |||||||
Preferred stock, dividend rate, per-dollar-amount | $ 1,000 | |||||||
Conversion price (in dollars per share) | $ 31.79 |
Equity - Schedule of Accumulate
Equity - Schedule of Accumulated Other Comprehensive Loss (AOCL), Net of Income Taxes (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Equity [Abstract] | ||
Unrealized losses on cash flow hedges | $ 1,641 | $ 8,291 |
Other | 122 | 122 |
Accumulated Other Comprehensive Income (Loss), Net of Tax | $ 1,763 | $ 8,413 |
Derivative Financial Instrum127
Derivative Financial Instruments and Hedging Activities - Summary of Changes in Notional Balances of Holdings of Derivatives (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | ||
Fair value of derivative assets (liabilities) at: | |||
Derivatives, at fair value | $ 6,367 | $ 6,065 | |
IRLCs [Member] | |||
Derivative Notional Balance [Roll Forward] | |||
Notional Amount, beginning balance | 239,406 | ||
Additions | 5,293,280 | ||
Amortization | 0 | ||
Maturities | (4,773,676) | ||
Terminations | (480,693) | ||
Notional Amount, ending balance | 278,317 | ||
Fair value of derivative assets (liabilities) at: | |||
Derivatives, at fair value | $ 6,080 | 6,065 | |
Maturity | Dec. 2015 - Mar. 2016 | ||
Forward Mortgage Backed Securities Trades [Member] | |||
Derivative Notional Balance [Roll Forward] | |||
Notional Amount, beginning balance | [1] | $ 703,725 | |
Additions | [1] | 7,887,651 | |
Amortization | [1] | 0 | |
Maturities | [1] | (4,371,218) | |
Terminations | [1] | (3,587,438) | |
Notional Amount, ending balance | [1] | 632,720 | |
Fair value of derivative assets (liabilities) at: | |||
Derivatives, at fair value | [1] | $ 295 | (2,854) |
Maturity | [1] | Feb. 2016 - Mar 2016 | |
Interest Rate Cap [Member] | |||
Derivative Notional Balance [Roll Forward] | |||
Notional Amount, beginning balance | $ 1,729,000 | ||
Additions | 2,261,000 | ||
Amortization | (1,880,000) | ||
Maturities | 0 | ||
Terminations | 0 | ||
Notional Amount, ending balance | 2,110,000 | ||
Fair value of derivative assets (liabilities) at: | |||
Derivatives, at fair value | $ 2,042 | 567 | |
Maturity | Nov. 2016 - Dec. 2017 | ||
Interest Rate Swap [Member] | |||
Derivative Notional Balance [Roll Forward] | |||
Notional Amount, beginning balance | $ 0 | ||
Additions | 450,000 | ||
Amortization | 0 | ||
Maturities | 0 | ||
Terminations | (450,000) | ||
Notional Amount, ending 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 originations and commitments and expected time to sell. |
Derivative Financial Instrum128
Derivative Financial Instruments and Hedging Activities - Summary of Open Derivative Positions and the Gains (Losses) on all Derivatives (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | ||
Not Designated as Hedging Instrument [Member] | |||
Hedge the effect of changes in interest rates on interest expense on borrowings | |||
Asset / (Liability) at Fair Value | [1] | $ 8,417 | |
Gains (Losses) | (10,038) | ||
Interest Rate Cap [Member] | |||
Hedge the effect of changes in interest rates on interest expense on borrowings | |||
Notional Amount | $ 2,110,000 | $ 1,729,000 | |
Interest Rate Cap [Member] | Other Net [Member] | Not Designated as Hedging Instrument [Member] | |||
Hedge the effect of changes in interest rates on interest expense on borrowings | |||
Expiration Date | [2] | Nov. 2016 - Dec. 2017 | |
Notional Amount | [2] | $ 2,110,000 | |
Asset / (Liability) at Fair Value | [1],[2] | 2,042 | |
Gains (Losses) | [2] | $ (1,377) | |
Consolidated Statement of Operations Caption | [2] | Other, net | |
Forward Mortgage Backed Securities Trades [Member] | |||
Hedge the effect of changes in interest rates on interest expense on borrowings | |||
Notional Amount | [3] | $ 632,720 | 703,725 |
Forward Mortgage Backed Securities Trades [Member] | Gain On Loans Held For Sale Net [Member] | Not Designated as Hedging Instrument [Member] | |||
Hedge the effect of changes in interest rates on interest expense on borrowings | |||
Expiration Date | Feb. 2016 - Mar 2016 | ||
Notional Amount | $ 632,720 | ||
Asset / (Liability) at Fair Value | [1] | 295 | |
Gains (Losses) | $ (8,675) | ||
Consolidated Statement of Operations Caption | Gain on loans held for sale, net | ||
IRLCs [Member] | |||
Hedge the effect of changes in interest rates on interest expense on borrowings | |||
Notional Amount | $ 278,317 | $ 239,406 | |
IRLCs [Member] | Gain On Loans Held For Sale Net [Member] | Not Designated as Hedging Instrument [Member] | |||
Hedge the effect of changes in interest rates on interest expense on borrowings | |||
Expiration Date | Dec. 2015 - Mar. 2016 | ||
Notional Amount | $ 278,317 | ||
Asset / (Liability) at Fair Value | [1] | 6,080 | |
Gains (Losses) | $ 14 | ||
Consolidated Statement 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 Consolidated Balance Sheets. | ||
[2] | To hedge the effect of increases in the interest on our variable rate debt as a result of increases in the index, such as 1ML, that is used in determining the interest rate on our variable rate advance funding facilities. | ||
[3] | 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 originations and commitments and expected time to sell. |
Derivative Financial Instrum129
Derivative Financial Instruments and Hedging Activities - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Derivative [Line Items] | ||
Deferred unrealized losses | $ (1.7) | $ (8.8) |
Deferred unrealized losses, tax | 0.1 | $ 0.5 |
Amortization of accumulated losses on cash flow hedges from AOCL to other income (expense), net, projection | $ 0.2 |
Derivative Financial Instrum130
Derivative Financial Instruments and Hedging Activities - Schedule of Changes in AOCL (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning balance | $ 8,413 | ||
Other, net of taxes | 0 | $ 4 | $ 5 |
Ending balance | 1,763 | 8,413 | |
Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning balance | 8,413 | 10,151 | 6,441 |
Additional net losses on cash flow hedges | 0 | 0 | 12,363 |
Ineffectiveness of cash flow hedges reclassified to earnings | 0 | 0 | (657) |
Losses on terminated hedging relationships amortized to earnings | (7,042) | (1,982) | (10,816) |
Net (decrease) increase in accumulated losses on cash flow hedges | (7,042) | (1,982) | 890 |
Decrease in deferred taxes on accumulated losses on cash flow hedges | 392 | 248 | 2,825 |
(Decrease) increase in accumulated losses on cash flow hedges, net of taxes | (6,650) | (1,734) | 3,715 |
Other, net of taxes | 0 | (4) | (5) |
Ending balance | $ 1,763 | $ 8,413 | $ 10,151 |
Derivative Financial Instrum131
Derivative Financial Instruments and Hedging Activities - Schedule of Other Income (Expense), Net Related to Derivative Financial Instruments (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||
Losses on economic hedges | $ (1,377) | $ (661) | $ (2,861) | |
Ineffectiveness of cash flow hedges | 0 | 0 | (657) | |
Write-off of losses in AOCL for a discontinued hedge relationship | [1] | (7,042) | (1,982) | (10,816) |
Gain (Loss) on Derivative, Net | $ (8,419) | $ (2,643) | $ (14,334) | |
[1] | Includes: (a) the accelerated write-off in 2015 of deferred losses on a swap, that had been designated for accounting purposes as a hedge of the purchase price of an MSR acquisition, when we sold a portion of the related MSRs; and (b) the write-off in 2013 of the remaining unamortized losses on a swap, that had been designated as a hedge for accounting purposes, when the borrowings under the related advance financing facility were repaid in full and the facility was terminated. |
Interest Income - Schedule of C
Interest Income - Schedule of Components of Interest Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Other Income and Expenses [Abstract] | |||
Loans held for sale | $ 16,167 | $ 20,299 | $ 18,563 |
Other | 2,153 | 2,692 | 3,792 |
Interest Income | $ 18,320 | $ 22,991 | $ 22,355 |
Interest Expense - Schedule of
Interest Expense - Schedule of Components of Interest Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Debt securities: | ||||
Interest expense | $ 482,373 | $ 541,757 | $ 395,586 | |
Financing Liabilities [Member] | ||||
Debt securities: | ||||
Interest expense | [1],[2] | 292,306 | 371,852 | 228,985 |
Other Secured Borrowings [Member] | ||||
Debt securities: | ||||
Interest expense | 91,391 | 82,837 | 81,851 | |
Match Funded Liabilties [Member] | ||||
Debt securities: | ||||
Interest expense | 65,248 | 61,576 | 75,979 | |
6.625% Senior Unsecured Notes [Member] | ||||
Debt securities: | ||||
Interest expense | 26,259 | 15,595 | 0 | |
Other [Member] | ||||
Debt securities: | ||||
Interest expense | $ 7,169 | $ 9,897 | $ 8,771 | |
[1] | Includes $14.3 million of fees incurred in 2015 in connection with our agreement to compensate NRZ/HLSS 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:201520142013Servicing fees collected on behalf of NRZ/HLSS$694,833 $736,122$633,377Less: Servicing fee retained by Ocwen355,527 358,053317,723Net servicing fees remitted to NRZ/HLSS339,306 378,069315,654Less: Reduction in financing liability70,513 17,37487,068Interest expense on NRZ/HLSS financing liability$268,793$360,695$228,586The reduction in the financing liability for 2015 and 2014 does not include reimbursements to NRZ/HLSS for the loss of servicing revenues when we were terminated as servicer and where the related Rights to MSRs had been sold to HLSS. |
Interest Expense - Schedule 134
Interest Expense - Schedule of Interest Expense Related to Financing Liabilities Recorded in Connection with the NRZ/HLSS Transactions (Details) - NRZ [Member] - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Schedule of Interest Expense [Line Items] | |||
Servicing fees collected on behalf of NRZ/HLSS | $ 694,833 | $ 736,122 | $ 633,377 |
Less: Servicing fee retained by Ocwen | 355,527 | 358,053 | 317,723 |
Net servicing fees remitted to NRZ/HLSS | 339,306 | 378,069 | 315,654 |
Less: Reduction in financing liability | 70,513 | 17,374 | 87,068 |
Interest expense on NRZ/HLSS financing liability | $ 268,793 | $ 360,695 | $ 228,586 |
Interest Expense - Schedule 135
Interest Expense - Schedule of Components of Interest Expense (Footnote) (Details) $ in Millions | Dec. 31, 2015USD ($) |
Other Income and Expenses [Abstract] | |
Expenses in connection with downgrade in servicers rating | $ 14.3 |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income Before Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | |||||||||||
Domestic | $ (62,903) | $ (401,741) | $ 76,957 | ||||||||
Foreign | (66,958) | (41,418) | 275,522 | ||||||||
Income (loss) before income taxes | $ (129,272) | $ (55,918) | $ 12,500 | $ 42,829 | $ (519,773) | $ (72,266) | $ 77,177 | $ 71,703 | $ (129,861) | $ (443,159) | $ 352,479 |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Current: | |||||||||||
Federal | $ 46,680 | $ (20,824) | $ 58,507 | ||||||||
State | 1,079 | (403) | 14,691 | ||||||||
Foreign | 161 | 9,195 | 15,545 | ||||||||
Current Income Tax Expense (Benefit) | 47,920 | (12,032) | 88,743 | ||||||||
Deferred: | |||||||||||
Federal | (27,173) | 41,986 | (53,711) | ||||||||
State | (3,719) | (997) | (4,325) | ||||||||
Foreign | 2,754 | (6,162) | (4,410) | ||||||||
Provision for valuation allowance on deferred tax assets | 97,069 | 3,601 | 15,764 | ||||||||
Deferred Income Tax Expense (Benefit) | 68,931 | 38,428 | (46,682) | ||||||||
Total | $ 94,985 | $ 10,832 | $ 2,594 | $ 8,440 | $ 2,022 | $ 2,992 | $ 10,165 | $ 11,217 | $ 116,851 | $ 26,396 | $ 42,061 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
U.S. Federal corporate income tax rate | 35.00% | ||
Total interest and penalties | $ 6,300 | $ 2,300 | $ 2,000 |
Accruals for interest and penalties | 12,200 | 5,900 | |
Liability for selected tax items | $ 32,500 | 22,500 | |
Range of period where there is possible change in unrecognized tax benefits | 12 months | ||
Valuation allowance on deferred tax assets | $ 23,900 | ||
Deferred tax liability | 1,788 | ||
EDC benefits, tax expense (benefit) | $ 68,200 | $ (61,200) | $ (109,100) |
EDC benefits, effect on diluted EPS (in dollars per share) | $ (0.54) | $ 0.47 | $ 0.78 |
U.S. [Member] | |||
Net deferred tax assets | $ 84,500 | ||
U.S. NOL carryforwards | 68,400 | ||
USVI [Member] | |||
Net deferred tax assets | 17,400 | ||
USVI NOL carryforwards | 199,000 | ||
Capital Loss Carryforward [Member] | USVI [Member] | |||
Capital loss carryforwards | 23,500 | ||
India And Philippines Subsidiary [Member] | |||
Deferred tax liability | 5,400 | ||
Undistributed earnings of foreign subsidiaries | 35,400 | ||
Foreign Subsidiaries [Member] | |||
Undistributed earnings of foreign subsidiaries | 241,400 | ||
Cash and short term investments | $ 221,800 | ||
Ocwen Mortgage Servicing Inc [Member] | |||
Percentage of income tax credit on qualified income | 90.00% | ||
EDC benefits, exemption term | 30 years |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Income Tax Disclosure [Abstract] | ||||||||||||
Expected income tax expense (benefit) at statutory rate | $ (45,451) | $ (155,106) | $ 123,368 | |||||||||
Differences between expected and actual income tax expense: | ||||||||||||
Impairment of goodwill | 0 | 92,034 | 0 | |||||||||
State tax, after Federal tax benefit | (2,867) | (1,084) | 5,639 | |||||||||
Provision for liability for uncertain tax positions | 18,205 | 47 | 4,935 | |||||||||
Provision for liability for intra-entity transactions | 4,700 | 6,037 | 7,283 | |||||||||
Non-deductible regulatory settlements | 700 | 53,375 | 0 | |||||||||
Other permanent differences | (463) | (254) | (636) | |||||||||
Foreign tax differential | 41,695 | 27,799 | (112,997) | |||||||||
Provision for valuation allowance on deferred tax assets | [1] | 97,069 | 3,601 | 15,764 | ||||||||
Other | 3,263 | (53) | (1,295) | |||||||||
Total | $ 94,985 | $ 10,832 | $ 2,594 | $ 8,440 | $ 2,022 | $ 2,992 | $ 10,165 | $ 11,217 | $ 116,851 | $ 26,396 | $ 42,061 | |
[1] | The provision for valuation allowance in 2015 primarily relates to the recording of the valuation allowance on both the U.S. and USVI net deferred tax assets as of December 31, 2015. Also included in the provision for valuation allowance is the reversal of a portion of the valuation allowance previously recorded on taxable losses earned by OMS which were taxable in the U.S. as effectively connected income (ECI), which is equal to the positive taxable income that is expected to be generated for ECI purposes for the year ended December 31, 2015. |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred tax assets: | ||
Net operating loss carryforward | $ 24,511 | $ 35,433 |
Mortgage servicing rights amortization | 15,697 | 0 |
Accrued legal settlements | 10,519 | 7,403 |
Intangible asset amortization | 10,293 | 10,741 |
Partnership losses | 10,137 | 10,663 |
Accrued incentive compensation | 10,107 | 5,029 |
Bad debt and allowance for loan losses | 6,227 | 10,727 |
Accrued other liabilities | 5,641 | 6,271 |
Stock-based compensation expense | 4,834 | 3,431 |
Tax residuals and deferred income on tax residuals | 4,052 | 4,021 |
Foreign deferred assets | 3,647 | 2,568 |
Reserve for servicing exposure | 3,353 | 7,093 |
Delinquent servicing fees | 2,360 | 3,591 |
Capital losses | 1,710 | 1,464 |
Accrued lease termination costs | 1,251 | 1,831 |
Valuation allowance on real estate | 736 | 1,007 |
Interest rate swaps | 103 | 494 |
Other | 4,966 | 5,606 |
Deferred tax assets, gross | 120,144 | 117,373 |
Deferred tax liabilities: | ||
Foreign undistributed earnings | 5,421 | 6,249 |
Mortgage servicing rights amortization | 0 | 14,696 |
Other | 77 | 76 |
Deferred tax liabilities, gross | 5,498 | 21,021 |
Deferred tax assets (liability), gross | 114,646 | 96,352 |
Valuation allowance | (116,434) | (19,365) |
Deferred tax assets (liabilities), net | $ (1,788) | |
Deferred tax assets (liabilities), net | $ 76,987 |
Income Taxes - Schedule of Unre
Income Taxes - Schedule of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | |||
Beginning balance | $ 22,523 | $ 27,273 | $ 22,702 |
Additions for tax positions of prior years | 13,162 | 1,392 | 4,944 |
Reductions for tax positions of prior years | (2,741) | (6,010) | 0 |
Lapses in statute of limitations | (396) | (132) | (373) |
Ending balance | $ 32,548 | $ 22,523 | $ 27,273 |
Basic and Diluted Earnings (142
Basic and Diluted Earnings (Loss) per Share - Schedule of Reconciliation of the Calculation of Basic EPS to Diluted EPS (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |||||
Basic earnings (loss) per share: | |||||||||||||||
Net income (loss) attributable to Ocwen common stockholders | $ (224,241) | $ (66,869) | $ 9,738 | $ 34,355 | $ (521,875) | $ (76,189) | $ 65,958 | $ 59,504 | $ (247,017) | [1] | $ (472,602) | [1] | $ 298,398 | [1] | |
Weighted average shares of common stock (in shares) | 125,315,899 | 131,362,284 | 135,678,088 | ||||||||||||
Basic earnings (loss) per share (in dollars per share) | $ (1.79) | $ (0.53) | $ 0.08 | $ 0.27 | $ (4.16) | $ (0.58) | $ 0.49 | $ 0.44 | $ (1.97) | $ (3.60) | $ 2.20 | ||||
Diluted earnings (loss) per share: | |||||||||||||||
Net income (loss) attributable to Ocwen common stockholders | $ (224,241) | $ (66,869) | $ 9,738 | $ 34,355 | $ (521,875) | $ (76,189) | $ 65,958 | $ 59,504 | $ (247,017) | [1] | $ (472,602) | [1] | $ 298,398 | [1] | |
Preferred stock dividends | [1],[2] | 0 | 0 | 0 | |||||||||||
Adjusted net income (loss) attributable to Ocwen | [1] | $ (247,017) | $ (472,602) | $ 298,398 | |||||||||||
Effect of dilutive elements: | |||||||||||||||
Preferred Shares | [1],[2] | 0 | 0 | 0 | |||||||||||
Stock options | [1] | 0 | 0 | 4,110,355 | |||||||||||
Common stock awards | [1] | 0 | 0 | 12,063 | |||||||||||
Dilutive weighted average shares of common stock (in shares) | [1] | 125,315,899 | 131,362,284 | 139,800,506 | |||||||||||
Diluted earnings (loss) per share (in dollars per share) | $ (1.79) | $ (0.53) | $ 0.08 | $ 0.27 | $ (4.16) | $ (0.58) | $ 0.48 | $ 0.43 | $ (1.97) | $ (3.60) | $ 2.13 | ||||
Stock options and common stock awards excluded from the computation of diluted earnings per share: | |||||||||||||||
Anti-dilutive Securities (in shares) | [3] | 2,038,588 | 314,688 | 0 | |||||||||||
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 | 547,500 | |||||||||||
[1] | For 2015 and 2014, we have excluded the effect of the 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. Under this method, we assumed the conversion of the preferred stock into shares of common stock unless the effect was anti-dilutive. Conversion of the preferred stock was not assumed for 2013 because the effect would have been antidilutive. | ||||||||||||||
[3] | These stock 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. |
Employee Compensation and Be143
Employee Compensation and Benefit Plans - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Employer percent match of employee contributions | 50.00% | ||
Employer match limit, percent of employee compensation | 2.00% | ||
Contributions to 401(k) | $ 4.7 | $ 3.8 | $ 4.2 |
Compensation expense recognized | $ 30.2 | $ 13.5 | $ 28.4 |
Common stock remaining available for future issuance (in shares) | 7,702,134 | ||
Contractual term of all options granted | 10 years | ||
Restricted stock units granted | 790,397 | ||
Average common stock trading price | $ 16.26 | ||
Unrecognized compensation costs related to non-vested stock options | $ 4.9 | ||
Weighted average remaining requisite service period | 1 year 11 months | ||
Market Condition For Vesting [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Restricted stock units granted | 584,438 |
Employee Compensation and Be144
Employee Compensation and Benefit Plans - Schedule of Stock Options Vesting (Details) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Service Condition: | ||
Percent of Options Awarded | 100.00% | 100.00% |
Service Condition Awards [Member] | ||
Service Condition: | ||
Percent of Options Awarded | 35.00% | 25.00% |
Award vesting period | 4 years | 4 years |
Vesting Period | Ratably over four years (1/4 vesting on each of the four anniversaries of the grant date.) | Ratably over four years (¼ on each of the four anniversaries of the grant date) |
Performance Shares [Member] | ||
Service Condition: | ||
Percent of Options Awarded | 50.00% | |
Award vesting period | 3 years | |
Vesting Period | Over three years beginning with ¼ vesting on the date that the stock price has at least doubled over the exercise price and the compounded annual gain over the exercise price is at least 20% and then ratably over three years (¼ on the next three anniversaries of the achievement of the market condition) | |
Extraordinary Performance-based Awards [Member] | ||
Service Condition: | ||
Percent of Options Awarded | 25.00% | |
Award vesting period | 3 years | |
Vesting Period | Over three years beginning with ¼ vesting on the date that the stock price has at least tripled over the exercise price and the compounded annual gain over the exercise price is at least 25% and then ratably over three years (¼ on the next three anniversaries of the achievement of the market condition) | |
Restricted Stock [Member] | ||
Service Condition: | ||
Percent of Options Awarded | 16.00% | |
Award vesting period | 4 years | |
Vesting Period | Over four years with 1/3 vesting on each of the 2nd, 3rd and 4th anniversaries of the grant date. | |
Time-Based Vesting Schedule And Market Performance-Based Vesting Date [Member] | ||
Service Condition: | ||
Percent of Options Awarded | 49.00% | |
Award vesting period | 4 years | |
Vesting Period | Vest over four years with 1/4 vesting on each of the four anniversaries of the grant date. However, none are considered vested until the first trading day (if any) on or before the 4th anniversary of the award date on which the average stock price equals or exceeds the price set in the individual award agreement, at which time all units that have met their time-based vesting schedule vest immediately with the remainder vesting in accordance with their time-based schedule. |
Employee Compensation and Be145
Employee Compensation and Benefit Plans - Schedule of Stock Option Activity (Details) - Stock Options [Member] - $ / shares | 12 Months Ended | |||||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Outstanding (in shares) | 6,828,861 | [1],[2] | 8,182,611 | [1],[2] | 8,938,179 | |
Outstanding (in dollars per share) | $ 9.99 | [1],[2] | $ 10.62 | [1],[2] | $ 9.93 | |
Granted (in shares) | [3],[4] | 968,041 | 330,000 | 50,000 | ||
Granted (in dollars per share) | [3],[4] | $ 17.48 | $ 34.48 | $ 51.70 | ||
Exercised (in shares) | [5],[6] | (145,677) | (683,750) | (790,568) | ||
Exercised (in dollars per share) | [5],[6] | $ 5.24 | $ 8.30 | $ 5.35 | ||
Forfeited/Canceled (in shares) | [3],[4] | (500,000) | (1,000,000) | (15,000) | ||
Forfeited/Canceled (in dollars per share) | [3],[4] | $ 24.38 | $ 24.38 | $ 15.27 | ||
Outstanding (in shares) | [1],[2] | 7,151,225 | 6,828,861 | 8,182,611 | ||
Outstanding (in dollars per share) | [1],[2] | $ 10.10 | $ 9.99 | $ 10.62 | ||
Exercisable at end of year (in shares) | [1],[2],[7] | 6,187,559 | 5,750,739 | 5,733,864 | ||
Exercisable at end of year (in dollars per share) | [1],[2],[7] | $ 8.25 | $ 6.84 | $ 6.53 | ||
[1] | At December 31, 2015, the weighted average remaining contractual term of options outstanding and options exercisable was 3.93 years and 3.22 years, respectively. | |||||
[2] | Excluding 340,000 market-based options that have not met their performance criteria, the net aggregate intrinsic value of stock options outstanding and stock options exercisable at December 31, 2015 was $0 and $0, respectively. A total of 4,722,814 market-based options were outstanding at December 31, 2015, of which 4,377,814 were exercisable. | |||||
[3] | Stock options granted in 2012 include 2,000,000 options granted to Ocwen’s former Executive Chairman, William C. Erbey at an exercise price of $24.38 equal to the closing price of the stock on the day of the Committee’s approval. On April 22, 2014, Mr. Erbey surrendered 1,000,000 of these options. We recognized the remaining $5.7 million of previously unrecognized compensation expense associated with these options as of the date of surrender. | |||||
[4] | Upon Mr. Erbey’s resignation as an officer and director of Ocwen on January 16, 2015, 500,000 of his unvested options would have been forfeited immediately. However, Ocwen agreed to modify the awards to allow them to vest. This had an effect equivalent to the canceling of the original awards and the granting of new awards effective on the date of resignation. | |||||
[5] | In connection with the exercise of stock options during 2015, 2014 and 2013, employees delivered 56,013, 249,696 and 138,553 shares, respectively, of common stock to Ocwen as payment for the exercise price and the income tax withholdings on the compensation. As a result, a total of 89,664, 434,054 and 652,015 net shares of stock were issued in 2015, 2014 and 2013, respectively, related to the exercise of stock options. | |||||
[6] | The total intrinsic value of stock options exercised, which is defined as the amount by which the market value of the stock on the date of exercise exceeds the exercise price, was $0.3 million, $13.7 million and $35.3 million for 2015, 2014 and 2013, respectively. | |||||
[7] | The total fair value of the stock options that vested and became exercisable during 2015, 2014 and 2013, based on grant-date fair value, was $2.0 million, $2.6 million and $4.7 million, respectively. |
Employee Compensation and Be146
Employee Compensation and Benefit Plans - Schedule of Stock Option Activity (Footnote) (Details) - USD ($) $ / shares in Units, $ in Millions | Jan. 16, 2015 | Apr. 22, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Total intrinsic value of stock options exercised | $ 0.3 | $ 13.7 | $ 35.3 | |||
Shares delivered by employees as payment for the exercise price and income tax withholdings on compensation (in shares) | 56,013 | 249,696 | 138,553 | |||
Shares issued related to exercise of stock options (in shares) | 89,664 | 434,054 | 652,015 | |||
Market-based options that have not met performance criteria (in shares) | 340,000 | |||||
Net aggregate intrinsic value of stock options outstanding | $ 0 | |||||
Net aggregate intrinsic value of stock options exercisable | $ 0 | |||||
Market-based options outstanding (in shares) | 4,722,814 | |||||
Market-based options outstanding, exercisable (in shares) | 4,377,814 | |||||
Weighted average remaining contractual term of options outstanding | 3 years 11 months 4 days | |||||
Weighted average remaining contractual term of options exercisable | 3 years 2 months 19 days | |||||
Total fair value of stock options vested and became exercisable | $ 2 | $ 2.6 | $ 4.7 | |||
Former Executive Chairman Of Board Of Directors [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock options granted (in shares) | 2,000,000 | |||||
Stock options granted, exercise price (in dollars per share) | $ 24.38 | |||||
Options surrendered (in shares) | 1,000,000 | |||||
Recognized compensation expense, previously unrecognized | $ 5.7 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares | 500,000 |
Employee Compensation and Be147
Employee Compensation and Benefit Plans - Schedule of Assumptions used to Value Stock Option Awards Granted (Details) - $ / shares | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Black Scholes [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Risk-free interest rate | 2.32% | |||
Risk-free interest rate, minimum | 1.60% | 1.98% | ||
Risk-free interest rate, maximum | 2.08% | 2.60% | ||
Expected stock price volatility | [1] | 45.00% | 42.00% | 44.00% |
Expected dividend yield | 0.00% | 0.00% | 0.00% | |
Expected option life (in years) | [2] | 5 years 6 months | 6 years 6 months | 6 years 6 months |
Fair value | $ 24.32 | |||
Binomial [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Risk-free interest rate, minimum | 0.20% | 0.00% | 0.24% | |
Risk-free interest rate, maximum | 2.74% | 3.05% | 3.56% | |
Expected stock price volatility, minimum | [1] | 51.00% | 41.00% | 33.00% |
Expected stock price volatility, maximum | [1] | 108.00% | 42.00% | 44.00% |
Expected dividend yield | 0.00% | 0.00% | 0.00% | |
Contractual life (in years) | 10 years | 10 years | 10 years | |
Monte Carlo [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Risk-free interest rate | 1.23% | |||
Expected stock price volatility | [1] | 65.00% | ||
Expected dividend yield | 0.00% | |||
Fair value | $ 7.99 | |||
Minimum [Member] | Black Scholes [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Fair value | $ 3.36 | $ 11.93 | ||
Minimum [Member] | Binomial [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected option life (in years) | [2] | 5 years 4 months 28 days | 4 years 4 months 6 days | 4 years 6 months |
Fair value | $ 5.41 | $ 8.99 | $ 18.04 | |
Maximum [Member] | Black Scholes [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Fair value | $ 4.62 | $ 17.01 | ||
Maximum [Member] | Binomial [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected option life (in years) | [2] | 5 years 5 months 16 days | 5 years 7 months 21 days | 5 years 9 months |
Fair value | $ 5.46 | $ 13.82 | $ 21.38 | |
[1] | We estimate volatility based on the historical volatility of Ocwen’s common stock over the most recent period that corresponds with the estimated expected life of the option. | |||
[2] | For the options valued using the Black-Scholes model we determined the expected life based on historical experience with similar awards, giving consideration to the contractual term, exercise patterns and post vesting forfeitures. The expected term of the options valued using the lattice (binomial) model is derived from the output of the model. The lattice (binomial) model incorporates exercise assumptions based on analysis of historical data. For all options, the expected life represents the period of time that options granted were expected to be outstanding at the date of the award. |
Employee Compensation and Be148
Employee Compensation and Benefit Plans - Schedule of Equity-based Compensation Expense Related to Stock Options and Stock Awards and Related Excess Tax Benefit (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Equity-based compensation expense: | |||
Awards | $ 7,291 | $ 10,729 | $ 5,648 |
Excess tax benefit related to share-based awards | 6,824 | 6,374 | 21,244 |
Stock Options [Member] | |||
Equity-based compensation expense: | |||
Awards | 3,978 | 9,983 | 5,388 |
Stock Awards [Member] | |||
Equity-based compensation expense: | |||
Awards | $ 3,313 | $ 746 | $ 260 |
Business Segment Reporting - Sc
Business Segment Reporting - Schedule of Segment Reporting Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |||||||||||||
Results of Operations | |||||||||||||||||||||||
Revenue | $ 362,457 | $ 404,946 | $ 463,251 | $ 510,444 | $ 493,292 | $ 513,698 | $ 553,074 | $ 551,261 | $ 1,741,098 | [1] | $ 2,111,325 | [1] | $ 2,038,273 | [1] | |||||||||
Expenses | 359,848 | 387,726 | 352,252 | 378,358 | 885,512 | [2],[3] | 455,039 | [2],[3] | 345,463 | [2],[3] | 349,194 | [2],[3] | 1,478,184 | [1],[4] | 2,035,208 | [1],[4] | 1,301,294 | [1],[4] | |||||
Other income (expense): | |||||||||||||||||||||||
Interest income | 18,320 | 22,991 | 22,355 | ||||||||||||||||||||
Interest expense | (482,373) | (541,757) | (395,586) | ||||||||||||||||||||
Gain on sale of mortgage servicing rights, net | (14,000) | 41,200 | 30,300 | 26,400 | 83,921 | 0 | 0 | ||||||||||||||||
Other | [1] | (12,643) | (510) | (11,269) | |||||||||||||||||||
Total other expense, net | (131,881) | [5] | (73,138) | [5] | (98,499) | [5] | (89,257) | [5] | (127,553) | (130,925) | (130,434) | (130,364) | (392,775) | (519,276) | (384,500) | ||||||||
Income (loss) before income taxes | (129,272) | $ (55,918) | $ 12,500 | $ 42,829 | (519,773) | $ (72,266) | $ 77,177 | $ 71,703 | (129,861) | (443,159) | 352,479 | ||||||||||||
Total Assets | |||||||||||||||||||||||
Balance | 7,404,809 | 8,267,278 | 7,404,809 | 8,267,278 | 7,927,003 | ||||||||||||||||||
Servicing [Member] | |||||||||||||||||||||||
Results of Operations | |||||||||||||||||||||||
Revenue | [1] | 1,613,537 | 1,985,436 | 1,895,921 | |||||||||||||||||||
Expenses | [1],[4] | 1,221,879 | 1,643,323 | 1,096,084 | |||||||||||||||||||
Other income (expense): | |||||||||||||||||||||||
Interest income | 1,044 | 2,981 | 1,599 | ||||||||||||||||||||
Interest expense | (446,377) | (515,141) | (381,477) | ||||||||||||||||||||
Gain on sale of mortgage servicing rights, net | 83,921 | ||||||||||||||||||||||
Other | [1] | (14,370) | (4,043) | (28,292) | |||||||||||||||||||
Total other expense, net | (375,782) | (516,203) | (408,170) | ||||||||||||||||||||
Income (loss) before income taxes | 15,876 | (174,090) | 391,667 | ||||||||||||||||||||
Total Assets | |||||||||||||||||||||||
Balance | 4,109,076 | 5,881,862 | 4,109,076 | 5,881,862 | 6,295,976 | ||||||||||||||||||
Lending [Member] | |||||||||||||||||||||||
Results of Operations | |||||||||||||||||||||||
Revenue | [1] | 124,724 | 119,220 | 120,899 | |||||||||||||||||||
Expenses | [1],[4] | 97,692 | 156,272 | 98,194 | |||||||||||||||||||
Other income (expense): | |||||||||||||||||||||||
Interest income | 14,669 | 16,459 | 16,295 | ||||||||||||||||||||
Interest expense | (9,859) | (10,725) | (13,508) | ||||||||||||||||||||
Gain on sale of mortgage servicing rights, net | 0 | ||||||||||||||||||||||
Other | [1] | 2,123 | 4,476 | 10,132 | |||||||||||||||||||
Total other expense, net | 6,933 | 10,210 | 12,919 | ||||||||||||||||||||
Income (loss) before income taxes | 33,965 | (26,842) | 35,624 | ||||||||||||||||||||
Total Assets | |||||||||||||||||||||||
Balance | 2,811,154 | 1,963,729 | 2,811,154 | 1,963,729 | 1,195,812 | ||||||||||||||||||
Corporate Items and Other [Member] | |||||||||||||||||||||||
Results of Operations | |||||||||||||||||||||||
Revenue | [1] | 2,895 | 6,825 | 22,092 | |||||||||||||||||||
Expenses | [1],[4] | 158,671 | 235,769 | 107,188 | |||||||||||||||||||
Other income (expense): | |||||||||||||||||||||||
Interest income | 2,607 | 3,551 | 4,461 | ||||||||||||||||||||
Interest expense | (26,137) | (15,891) | (601) | ||||||||||||||||||||
Gain on sale of mortgage servicing rights, net | 0 | ||||||||||||||||||||||
Other | [1] | (396) | (943) | 6,424 | |||||||||||||||||||
Total other expense, net | (23,926) | (13,283) | 10,284 | ||||||||||||||||||||
Income (loss) before income taxes | (179,702) | (242,227) | (74,812) | ||||||||||||||||||||
Total Assets | |||||||||||||||||||||||
Balance | 484,579 | 421,687 | 484,579 | 421,687 | 435,215 | ||||||||||||||||||
Corporate Eliminations [Member] | |||||||||||||||||||||||
Results of Operations | |||||||||||||||||||||||
Revenue | [1] | (58) | (156) | (639) | |||||||||||||||||||
Expenses | [1],[4] | (58) | (156) | (172) | |||||||||||||||||||
Other income (expense): | |||||||||||||||||||||||
Interest income | 0 | 0 | 0 | ||||||||||||||||||||
Interest expense | 0 | 0 | 0 | ||||||||||||||||||||
Gain on sale of mortgage servicing rights, net | 0 | ||||||||||||||||||||||
Other | [1] | 0 | 0 | 467 | |||||||||||||||||||
Total other expense, net | 0 | 0 | 467 | ||||||||||||||||||||
Income (loss) before income taxes | 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] | Operating expenses for the fourth quarter of 2014 include the recognition of a goodwill impairment loss of $420.2 million. | ||||||||||||||||||||||
[3] | Operating expenses for the third and fourth quarter of 2014 include charges of $100.0 million and $50.0 million, respectively, for losses related to a regulatory settlement with the NY DFS. These charges are included in Professional services on the Consolidated Statement of Operations and were recorded in the Corporate Items and Other segment. | ||||||||||||||||||||||
[4] | Depreciation and amortization expense are as follows: Servicing Lending Corporate Items and Other Business Segments ConsolidatedFor the year ended December 31, 2015: Depreciation expense$2,990 $380 $15,789 $19,159Amortization of mortgage servicing rights98,849 345 — 99,194Amortization of debt discount2,680 — — 2,680Amortization of debt issuance costs 21,269 — 1,395 22,664 For the year ended December 31, 2014: Depreciation expense$9,955 $332 $11,623 $21,910Amortization of mortgage servicing rights249,471 705 199 250,375Amortization of debt discount1,318 — — 1,318Amortization of debt issuance costs 4,294 — 845 5,139 For the year ended December 31, 2013: Depreciation expense$13,525 $320 $10,400 $24,245Amortization of mortgage servicing rights282,526 255 — 282,781Amortization of debt discount1,412 — — 1,412Amortization of debt issuance costs 4,395 — — 4,395 | ||||||||||||||||||||||
[5] | Other income (expense), net for 2015 includes gains (losses) on the sale of MSRs in the first, second, third and fourth quarter of $26.4 million, $30.3 million, $41.2 million and $(14.0) million, respectively. |
Business Segment Reporting -150
Business Segment Reporting - Schedule of Depreciation and Amortization by Segment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Segment Reporting Information [Line Items] | |||
Depreciation expense | $ 19,159 | $ 21,910 | $ 24,245 |
Amortization of mortgage servicing rights | 99,194 | 250,375 | 282,781 |
Amortization of debt discount | 2,680 | 1,318 | 1,412 |
Amortization of debt issuance costs | 22,664 | 5,139 | 4,395 |
Servicing [Member] | |||
Segment Reporting Information [Line Items] | |||
Depreciation expense | 2,990 | 9,955 | 13,525 |
Amortization of mortgage servicing rights | 98,849 | 249,471 | 282,526 |
Amortization of debt discount | 2,680 | 1,318 | 1,412 |
Amortization of debt issuance costs | 21,269 | 4,294 | 4,395 |
Lending [Member] | |||
Segment Reporting Information [Line Items] | |||
Depreciation expense | 380 | 332 | 320 |
Amortization of mortgage servicing rights | 345 | 705 | 255 |
Amortization of debt discount | 0 | 0 | 0 |
Amortization of debt issuance costs | 0 | 0 | 0 |
Corporate Items and Other [Member] | |||
Segment Reporting Information [Line Items] | |||
Depreciation expense | 15,789 | 11,623 | 10,400 |
Amortization of mortgage servicing rights | 0 | 199 | 0 |
Amortization of debt discount | 0 | 0 | 0 |
Amortization of debt issuance costs | $ 1,395 | $ 845 | $ 0 |
Related Party Transactions - Su
Related Party Transactions - Summary of Revenue and Expenses Related to Various Service Agreements (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Altisource Agreements [Member] | ||
Revenues and Expenses: | ||
Revenues | $ 43,075 | $ 22,739 |
Expenses | 101,520 | 55,119 |
HLSS Support Services Agreement [Member] | ||
Revenues and Expenses: | ||
Revenues | 1,315 | 631 |
Expenses | 1,729 | 2,018 |
AAMC Support Services And Facilities Agreements [Member] | ||
Revenues and Expenses: | ||
Revenues | 1,160 | 1,238 |
Residential Servicing Agreement [Member] | ||
Revenues and Expenses: | ||
Revenues | $ 15,658 | $ 2,436 |
Related Party Transactions - Sc
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 | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Brokers and Dealers [Abstract] | |
Capital requirement based on outstanding UPB of owned and subserviced portfolio | $ 529.8 |
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 | Apr. 12, 2013 | Apr. 12, 2013 | Mar. 29, 2013 | Mar. 29, 2013 | Dec. 21, 2012 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Other Commitments [Line Items] | ||||||||
Operating leases, rent expense | $ 23.7 | $ 19 | $ 27.4 | |||||
Floating Rate Reverse Mortgage Loans [Member] | ||||||||
Other Commitments [Line Items] | ||||||||
Additional borrowing capacity to borrowers | 922.8 | |||||||
Forward Mortgage Loan Interest Rate Lock Commitments [Member] | ||||||||
Other Commitments [Line Items] | ||||||||
Short-term commitments to lend | 266.5 | |||||||
Reverse Mortgage Loan Interest Rate Lock Commitments [Member] | ||||||||
Other Commitments [Line Items] | ||||||||
Short-term commitments to lend | $ 11.8 | |||||||
Altisource [Member] | ||||||||
Other Commitments [Line Items] | ||||||||
Proceeds from sale of businesses | $ 128.8 | |||||||
Automatic renewal term of support services agreement | 1 year | |||||||
Residential [Member] | ||||||||
Other Commitments [Line Items] | ||||||||
Term of servicing agreement | 15 years | |||||||
Homeward Residential Holdings, Inc. [Member] | Altisource [Member] | ||||||||
Other Commitments [Line Items] | ||||||||
Proceeds from sale of businesses | $ 87 | |||||||
Proceeds from sale of businesses, cash | $ 82 | |||||||
ResCap [Member] | Altisource [Member] | ||||||||
Other Commitments [Line Items] | ||||||||
Proceeds from sale of businesses | $ 128.8 |
Commitments - Schedule of Futur
Commitments - Schedule of Future Minimum Rental Commitments under Non-cancelable Operating Leases (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
2,016 | $ 18,293 |
2,017 | 13,203 |
2,018 | 6,409 |
2,019 | 3,377 |
2,020 | 990 |
Thereafter | 0 |
Total minimum lease payments, gross | 42,272 |
Less: Sublease income | (1,656) |
Total minimum lease payments, net | $ 40,616 |
Contingencies - Narrative (Deta
Contingencies - Narrative (Details) | Jan. 20, 2016USD ($) | Jan. 23, 2015USD ($) | Dec. 31, 2014USD ($)Loan | Sep. 30, 2014USD ($) | Dec. 31, 2015USD ($)LoanLicenseTrust | Dec. 31, 2014USD ($)Loan | Sep. 30, 2015USD ($) |
Loss Contingencies [Line Items] | |||||||
Minimum servicing licenses required | License | 1 | ||||||
Outstanding representation and warranty repurchase demands | $ 96,600,000 | $ 97,500,000 | $ 96,600,000 | ||||
Outstanding representation and warranty repurchase demands, number of loans | Loan | 511 | 506 | 511 | ||||
Mortgage Servicing Practice [Member] | |||||||
Loss Contingencies [Line Items] | |||||||
Amount accrued for losses relating to threatened and pending litigation | $ 40,200,000 | ||||||
Minimum [Member] | False Claims [Member] | |||||||
Loss Contingencies [Line Items] | |||||||
Loss Contingency, Damages Sought, Value | 5,000 | ||||||
Maximum [Member] | False Claims [Member] | |||||||
Loss Contingencies [Line Items] | |||||||
Loss Contingency, Damages Sought, Value | $ 10,000 | ||||||
RMBS Trusts [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] | |||||||
Litigation settlement expense | $ 50,000,000 | $ 100,000,000 | |||||
Office of Mortgage Settlement Oversight [Member] | Maximum [Member] | First Uncured Violation [Member] | |||||||
Loss Contingencies [Line Items] | |||||||
Financial penalties in case of uncured violations | $ 1,000,000 | ||||||
Office of Mortgage Settlement Oversight [Member] | Maximum [Member] | Second Uncured Violation [Member] | |||||||
Loss Contingencies [Line Items] | |||||||
Financial penalties in case of uncured violations | $ 5,000,000 | ||||||
California Department of Business Oversight [Member] | Unfavorable Regulatory Action [Member] | |||||||
Loss Contingencies [Line Items] | |||||||
Amount of penalty in consent order | $ 2,500,000 | ||||||
Period of oversight by an independent national monitor | 2 years | ||||||
Securities And Exchange Commission [Member] | Unfavorable Regulatory Action [Member] | |||||||
Loss Contingencies [Line Items] | |||||||
Accrued penalty | $ 2,000,000 | ||||||
Subsequent Event [Member] | Securities And Exchange Commission [Member] | Unfavorable Regulatory Action [Member] | |||||||
Loss Contingencies [Line Items] | |||||||
Amount of penalty in consent order | $ 2,000,000 |
Contingencies - Schedule of Cha
Contingencies - Schedule of Changes in Liability for Representation and Warrant Obligations, Compensatory Fees for Foreclosures that may Ultimately Exceed Investor Timelines and Related Indemnification Obligations (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Indemnification Obligations Liability [Roll Forward] | ||||
Beginning balance | $ 132,918 | $ 192,716 | $ 38,140 | |
Provision for representation and warranty obligations | (8,418) | (1,947) | 18,154 | |
New production reserves | 814 | 1,605 | 1,325 | |
Obligations assumed in connection with MSR and servicing business acquisitions | 0 | 0 | 190,658 | |
Payments made in connection with sales of MSRs | (81,498) | 0 | 0 | |
Charge-offs and other | [1] | (7,201) | (59,456) | (55,561) |
Ending balance | $ 36,615 | $ 132,918 | $ 192,716 | |
[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. |
Quarterly Results of Operati158
Quarterly Results of Operations (Unaudited) - Schedule of Quarterly Results of Operations (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||||||||
Revenue | $ 362,457 | $ 404,946 | $ 463,251 | $ 510,444 | $ 493,292 | $ 513,698 | $ 553,074 | $ 551,261 | $ 1,741,098 | [1] | $ 2,111,325 | [1] | $ 2,038,273 | [1] | ||||||||
Expenses | 359,848 | 387,726 | 352,252 | 378,358 | 885,512 | [2],[3] | 455,039 | [2],[3] | 345,463 | [2],[3] | 349,194 | [2],[3] | 1,478,184 | [1],[4] | 2,035,208 | [1],[4] | 1,301,294 | [1],[4] | ||||
Other income (expense), net | (131,881) | [5] | (73,138) | [5] | (98,499) | [5] | (89,257) | [5] | (127,553) | (130,925) | (130,434) | (130,364) | (392,775) | (519,276) | (384,500) | |||||||
Income (loss) before income taxes | (129,272) | (55,918) | 12,500 | 42,829 | (519,773) | (72,266) | 77,177 | 71,703 | (129,861) | (443,159) | 352,479 | |||||||||||
Income tax expense (benefit) | 94,985 | 10,832 | 2,594 | 8,440 | 2,022 | 2,992 | 10,165 | 11,217 | 116,851 | 26,396 | 42,061 | |||||||||||
Net income (loss) | (224,257) | (66,750) | 9,906 | 34,389 | (521,795) | (75,258) | 67,012 | 60,486 | (246,712) | (469,555) | 310,418 | |||||||||||
Net (income) loss attributable to non-controlling interests | 16 | (119) | (168) | (34) | (80) | (123) | (57) | 15 | (305) | (245) | 0 | |||||||||||
Preferred stock dividends | 0 | 0 | (582) | (581) | 0 | (1,163) | (5,031) | |||||||||||||||
Deemed dividend related to beneficial conversion feature of preferred stock | 0 | (808) | (415) | (416) | 0 | (1,639) | (6,989) | |||||||||||||||
Net income (loss) attributable to Ocwen common stockholders | $ (224,241) | $ (66,869) | $ 9,738 | $ 34,355 | $ (521,875) | $ (76,189) | $ 65,958 | $ 59,504 | $ (247,017) | [6] | $ (472,602) | [6] | $ 298,398 | [6] | ||||||||
Earnings (loss) per share attributable to Ocwen common stockholders | ||||||||||||||||||||||
Basic (in dollars per share) | $ (1.79) | $ (0.53) | $ 0.08 | $ 0.27 | $ (4.16) | $ (0.58) | $ 0.49 | $ 0.44 | $ (1.97) | $ (3.60) | $ 2.20 | |||||||||||
Diluted (in dollars per share) | $ (1.79) | $ (0.53) | $ 0.08 | $ 0.27 | $ (4.16) | $ (0.58) | $ 0.48 | $ 0.43 | $ (1.97) | $ (3.60) | $ 2.13 | |||||||||||
[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] | Operating expenses for the fourth quarter of 2014 include the recognition of a goodwill impairment loss of $420.2 million. | |||||||||||||||||||||
[3] | Operating expenses for the third and fourth quarter of 2014 include charges of $100.0 million and $50.0 million, respectively, for losses related to a regulatory settlement with the NY DFS. These charges are included in Professional services on the Consolidated Statement of Operations and were recorded in the Corporate Items and Other segment. | |||||||||||||||||||||
[4] | Depreciation and amortization expense are as follows: Servicing Lending Corporate Items and Other Business Segments ConsolidatedFor the year ended December 31, 2015: Depreciation expense$2,990 $380 $15,789 $19,159Amortization of mortgage servicing rights98,849 345 — 99,194Amortization of debt discount2,680 — — 2,680Amortization of debt issuance costs 21,269 — 1,395 22,664 For the year ended December 31, 2014: Depreciation expense$9,955 $332 $11,623 $21,910Amortization of mortgage servicing rights249,471 705 199 250,375Amortization of debt discount1,318 — — 1,318Amortization of debt issuance costs 4,294 — 845 5,139 For the year ended December 31, 2013: Depreciation expense$13,525 $320 $10,400 $24,245Amortization of mortgage servicing rights282,526 255 — 282,781Amortization of debt discount1,412 — — 1,412Amortization of debt issuance costs 4,395 — — 4,395 | |||||||||||||||||||||
[5] | Other income (expense), net for 2015 includes gains (losses) on the sale of MSRs in the first, second, third and fourth quarter of $26.4 million, $30.3 million, $41.2 million and $(14.0) million, respectively. | |||||||||||||||||||||
[6] | For 2015 and 2014, we have excluded the effect of the preferred stock, stock options and common stock awards from the computation of diluted earnings per share because of the anti-dilutive effect of our reported net loss. |
Quarterly Results of Operati159
Quarterly Results of Operations (Unaudited) - Schedule of Quarterly Results of Operations (Unaudited) (Footnote) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Quarterly Results of Operations [Line Items] | |||||||||
Gains (losses) on sale of mortgage servicing rights | $ (14,000) | $ 41,200 | $ 30,300 | $ 26,400 | $ 83,921 | $ 0 | $ 0 | ||
Goodwill impairment loss | $ 420,200 | $ 0 | $ 420,201 | $ 0 | |||||
Unfavorable Regulatory Action [Member] | New York Department of Financial Services [Member] | |||||||||
Quarterly Results of Operations [Line Items] | |||||||||
Losses related to regulatory settlement | $ 50,000 | $ 100,000 |
Subsequent Events - Narrative (
Subsequent Events - Narrative (Details) - USD ($) | Jan. 12, 2016 | Feb. 10, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2015 | Feb. 10, 2016 | Oct. 31, 2013 |
Subsequent Event [Line Items] | ||||||||
Repurchase of common stock (in shares) | 625,705 | 12,171,808 | ||||||
Share repurchase program, authorized amount of repurchase | $ 500,000,000 | |||||||
Repurchase of common stock, value (in dollars) | $ 4,142,000 | $ 382,487,000 | $ 217,903,000 | $ 374,400,000 | ||||
Subsequent Event [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Repurchase of common stock (in shares) | 991,985 | 13,163,793 | ||||||
Repurchase of common stock, value (in dollars) | $ 5,900,000 | $ 380,300,000 | ||||||
Warehouse Facility Borrowings [Member] | Subsequent Event [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Mortgage loan warehouse facility | $ 100,000,000 | |||||||
Interest Rate | 2.75% | |||||||
Interest rate at floor | 0.25% | |||||||
Maturity | Jan. 3, 2017 |