Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | Apr. 25, 2016 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Ocwen Financial Corporation | |
Entity Central Index Key | 873,860 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 123,853,683 |
UNAUDITED CONSOLIDATED BALANCE
UNAUDITED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Assets | ||
Cash | $ 280,513 | $ 257,272 |
Mortgage servicing rights ($732,174 and $761,190 carried at fair value) | 1,078,213 | 1,138,569 |
Advances, net | 317,348 | 444,298 |
Match funded advances | 1,720,897 | 1,706,768 |
Loans held for sale ($321,739 and $309,054 carried at fair value) | 408,809 | 414,046 |
Loans held for investment - Reverse mortgages, at fair value | 2,771,242 | 2,488,253 |
Receivables, net | 237,583 | 286,981 |
Premises and equipment, net | 72,323 | 57,626 |
Other assets ($22,501 and $14,352 carried at fair value) | 520,182 | 586,495 |
Total assets | 7,407,110 | 7,380,308 |
Liabilities | ||
Match funded liabilities | 1,537,096 | 1,584,049 |
Financing liabilities ($3,171,602 and $2,933,066 carried at fair value) | 3,319,646 | 3,089,255 |
Other secured borrowings, net | 718,830 | 762,411 |
Senior unsecured notes, net | 345,847 | 345,511 |
Other liabilities | 747,223 | 744,444 |
Total liabilities | $ 6,668,642 | $ 6,525,670 |
Commitments and Contingencies (Notes 18 and 19) | ||
Ocwen Financial Corporation (Ocwen) stockholders’ equity | ||
Common stock, $.01 par value; 200,000,000 shares authorized; 123,853,683 and 124,774,516 shares issued and outstanding at March 31, 2016 and December 31, 2015, respectively | $ 1,239 | $ 1,248 |
Additional paid-in capital | 522,222 | 526,148 |
Retained earnings | 214,598 | 325,929 |
Accumulated other comprehensive loss, net of income taxes | (1,658) | (1,763) |
Total Ocwen stockholders’ equity | 736,401 | 851,562 |
Non-controlling interest in subsidiaries | 2,067 | 3,076 |
Total equity | 738,468 | 854,638 |
Total liabilities and equity | $ 7,407,110 | $ 7,380,308 |
UNAUDITED CONSOLIDATED BALANCE3
UNAUDITED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Mortgage servicing rights, at fair value | $ 732,174 | $ 761,190 |
Loans held for sale, at fair value | 321,739 | 309,054 |
Other assets, at fair value | 22,501 | 14,352 |
Financing liabilities, at fair value | $ 3,171,602 | $ 2,933,066 |
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) | 123,853,683 | 124,774,516 |
Common stock, shares outstanding (in shares) | 123,853,683 | 124,774,516 |
UNAUDITED CONSOLIDATED STATEMEN
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | ||
Revenue | |||
Servicing and subservicing fees | $ 297,496 | $ 446,541 | |
Gain on loans held for sale, net | 15,572 | 44,504 | |
Other revenues | 17,689 | 19,399 | |
Total revenue | [1] | 330,757 | 510,444 |
Expenses | |||
Compensation and benefits | 96,249 | 105,144 | |
Amortization of mortgage servicing rights | 12,806 | 38,494 | |
Servicing and origination | 95,692 | 101,802 | |
Technology and communications | 26,869 | 39,351 | |
Professional services | 70,907 | 56,931 | |
Occupancy and equipment | 24,745 | 25,714 | |
Other | 1,389 | 10,922 | |
Total expenses | [1],[2] | 328,657 | 378,358 |
Other income (expense) | |||
Interest income | 4,190 | 5,575 | |
Interest expense | (106,089) | (119,396) | |
Gain on sale of mortgage servicing rights, net | 1,175 | 26,406 | |
Other, net | (3,501) | (1,842) | |
Total other expense, net | (104,225) | (89,257) | |
Income (loss) before income taxes | (102,125) | 42,829 | |
Income tax expense | 9,076 | 8,440 | |
Net income (loss) | (111,201) | 34,389 | |
Net income attributable to non-controlling interests | (130) | (34) | |
Net income (loss) attributable to Ocwen stockholders | $ (111,331) | $ 34,355 | |
Earnings (loss) per share attributable to Ocwen stockholders | |||
Basic (in USD per share) | $ (0.90) | $ 0.27 | |
Diluted (in USD per share) | $ (0.90) | $ 0.27 | |
Weighted average common shares outstanding | |||
Basic (in shares) | 124,093,339 | 125,272,228 | |
Diluted (in shares) | 124,093,339 | 126,999,662 | |
[1] | Intersegment billings for services rendered to other segments are recorded as revenues, as contra-expense or as other income, depending on the type of service that is rendered. | ||
[2] | Depreciation and amortization expense are as follows: Servicing Lending Corporate Items and Other Business Segments ConsolidatedFor the three months ended March 31, 2016Depreciation expense$1,135 $72 $3,832 $5,039Amortization of mortgage servicing rights12,725 81 — 12,806Amortization of debt discount206 — — 206Amortization of debt issuance costs 2,933 — 344 3,277 For the three months ended March 31, 2015Depreciation expense$529 $104 $3,711 $4,344Amortization of mortgage servicing rights38,405 89 — 38,494Amortization of debt discount356 — — 356Amortization of debt issuance costs 3,423 — 332 3,755 |
UNAUDITED CONSOLIDATED STATEME5
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | ||
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | $ (111,201) | $ 34,389 | |
Other comprehensive income, net of income taxes: | |||
Reclassification adjustment for losses on cash flow hedges included in net income | [1] | 105 | 418 |
Comprehensive income (loss) | (111,096) | 34,807 | |
Comprehensive income attributable to non-controlling interests | (130) | (34) | |
Comprehensive income (loss) attributable to Ocwen stockholders | $ (111,226) | $ 34,773 | |
[1] | These losses are reclassified to Other, net in the Unaudited Consolidated Statements of Operations. |
UNAUDITED CONSOLIDATED STATEME6
UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (Loss), Net of Taxes [Member] | Non-controlling Interest in Subsidiaries [Member] |
Beginning Balance at Dec. 31, 2014 | $ 1,041,165 | $ 1,252 | $ 515,194 | $ 530,361 | $ (8,413) | $ 2,771 |
Beginning Balance (in shares) at Dec. 31, 2014 | 125,215,615 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | 34,389 | 34,355 | 34 | |||
Cumulative effect of fair value election - Mortgage servicing rights, net of income taxes | 42,846 | 42,846 | ||||
Exercise of common stock options | 509 | $ 1 | 508 | |||
Exercise of common stock options (in shares) | 85,173 | |||||
Equity-based compensation and other | 2,213 | $ 0 | 2,213 | |||
Equity-based compensation and other (in shares) | 2,000 | |||||
Other comprehensive income, net of income taxes | 418 | 418 | ||||
Ending Balance at Mar. 31, 2015 | 1,121,540 | $ 1,253 | 517,915 | 607,562 | (7,995) | 2,805 |
Ending Balance (in shares) at Mar. 31, 2015 | 125,302,788 | |||||
Beginning Balance at Dec. 31, 2015 | $ 854,638 | $ 1,248 | 526,148 | 325,929 | (1,763) | 3,076 |
Beginning Balance (in shares) at Dec. 31, 2015 | 124,774,516 | 124,774,516 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | $ (111,201) | (111,331) | 130 | |||
Repurchase of common stock | (5,890) | $ (10) | (5,880) | |||
Repurchase of common stock (in shares) | (991,985) | |||||
Exercise of common stock options | 442 | $ 1 | 441 | |||
Exercise of common stock options (in shares) | 69,805 | |||||
Equity-based compensation and other | 1,513 | $ 0 | 1,513 | |||
Equity-based compensation and other (in shares) | 1,347 | |||||
Capital distribution to non-controlling interest | (1,139) | (1,139) | ||||
Other comprehensive income, net of income taxes | 105 | 105 | ||||
Ending Balance at Mar. 31, 2016 | $ 738,468 | $ 1,239 | $ 522,222 | $ 214,598 | $ (1,658) | $ 2,067 |
Ending Balance (in shares) at Mar. 31, 2016 | 123,853,683 | 123,853,683 |
UNAUDITED CONSOLIDATED STATEME7
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Cash flows from operating activities | ||
Net income (loss) | $ (111,201) | $ 34,389 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Amortization of mortgage servicing rights | 12,806 | 38,494 |
Loss on valuation of mortgage servicing rights, at fair value | 29,293 | 33,175 |
Impairment of mortgage servicing rights | 29,953 | 17,769 |
Gain on sale of mortgage servicing rights | (1,175) | (26,406) |
Realized and unrealized losses on derivative financial instruments | 1,496 | 1,153 |
Provision for bad debts | 11,382 | 14,170 |
Depreciation | 5,039 | 4,344 |
Amortization of debt issuance costs | 3,277 | 3,755 |
Increase in deferred tax assets | 0 | (890) |
Equity-based compensation expense | 1,416 | 2,117 |
Gain on loans held for sale, net | (15,572) | (44,504) |
Origination and purchase of loans held for sale | (1,211,076) | (1,036,150) |
Proceeds from sale and collections of loans held for sale | 1,165,503 | 1,142,282 |
Changes in assets and liabilities: | ||
Decrease in advances and match funded advances | 109,076 | 104,258 |
Decrease in receivables and other assets, net | 84,512 | 1,330 |
Increase in other liabilities | 21,473 | 20,127 |
Other, net | 4,686 | 15,605 |
Net cash provided by operating activities | 140,888 | 325,018 |
Cash flows from investing activities | ||
Origination of loans held for investment – reverse mortgages | (304,058) | (235,271) |
Principal payments received on loans held for investment - reverse mortgages | 87,237 | 26,170 |
Purchase of mortgage servicing rights, net | (4,263) | (3,267) |
Proceeds from sale of mortgage servicing rights | 15,305 | 49,465 |
Proceeds from sale of advances and match funded advances | 41,003 | 1,765 |
Additions to premises and equipment | (19,800) | (3,918) |
Other | 1,624 | 301 |
Net cash used in investing activities | (182,952) | (164,755) |
Cash flows from financing activities | ||
Repayment of match funded liabilities | (46,953) | (89,571) |
Proceeds from other secured borrowings | 1,902,472 | 1,858,258 |
Repayments of other secured borrowings | (2,014,474) | (2,042,969) |
Payment of debt issuance costs | (2,242) | (12,643) |
Proceeds from sale of loans accounted for as a financing | 233,174 | 238,615 |
Proceeds from sale of advances accounted for as a financing | 0 | 472 |
Repurchase of common stock | (5,890) | 0 |
Proceeds from exercise of common stock options | 406 | 413 |
Other | (1,188) | 21 |
Net cash provided by (used in) financing activities | 65,305 | (47,404) |
Net increase in cash | 23,241 | 112,859 |
Cash at beginning of year | 257,272 | 129,473 |
Cash at end of period | $ 280,513 | $ 242,332 |
Organization, Business Environm
Organization, Business Environment and Basis of Presentation | 3 Months Ended |
Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Business Environment and Basis of Presentation | Note 1 – Organization, Business Environment and Basis of Presentation Organization Ocwen Financial Corporation (NYSE: OCN) (Ocwen, we, us and our) is a financial services holding company which, through its subsidiaries, originates and services loans. We are headquartered in West Palm Beach, Florida with offices located throughout the United States (U.S.) and in the United States Virgin Islands (USVI) and operations in India and the Philippines. Ocwen is a Florida corporation organized in February 1988. Ocwen owns all of the common stock of its primary operating subsidiary, Ocwen Mortgage Servicing, Inc. (OMS), and directly or indirectly owns all of the outstanding stock of its other primary operating subsidiaries: Ocwen Loan Servicing, LLC (OLS), Ocwen Financial Solutions Private Limited (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 17 – Regulatory Requirements and Note 19 – 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 mortgage servicing rights (MSRs), which we refer to as Rights to MSRs. As of March 31, 2016 , these Rights to MSRs relate to approximately $132.7 billion in unpaid principal balance (UPB) of our non-Agency 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. Under the Master Servicing Rights Purchase Agreement and Sale Supplements with NRZ, if a termination event related to our servicer rating exists with respect to any servicing agreement, NRZ will have the right to direct the transfer of servicing with respect to any affected servicing agreement to a licensed replacement servicer that obtains all required third-party consents. As of March 31, 2016, 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. 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. Effective March 28, 2016 we entered into an amendment to our Senior Secured Term Loan (SSTL) which, among other things, removes in their entirety (including the consolidated total debt to consolidated tangible net worth ratio) or amends for the remaining term of the SSTL certain financial covenants and requires prepayments of $6.3 million on each of May 31, 2016, July 29, 2016 and September 30, 2016. As a result of this amendment, we project we will maintain compliance with our financial covenants during 2016. In order to avoid an event of default arising from a covenant breach, we could repay or refinance debt, among other actions. See Note 11 – Borrowings for further information regarding our debt agreements. Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in conformity with the instructions of the Securities and Exchange Commission (SEC) to Form 10-Q and SEC Regulation S-X, Article 10, Rule 10-01 for interim financial statements. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (GAAP) for complete financial statements. In our opinion, the accompanying unaudited consolidated financial statements contain all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation. The results of operations and other data for the three months ended March 31, 2016 are not necessarily indicative of the results that may be expected for any other interim period or for the year ending December 31, 2016 . The unaudited consolidated financial statements presented herein should be read in conjunction with the audited consolidated financial statements and related notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2015 . Reclassifications As a result of our retrospective adoption on January 1, 2016 of FASB Accounting Standards Update (ASU) 2015-03, Interest—Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs , and ASU 2015-15, 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 , unamortized debt issuance costs that are not related to revolving line-of-credit arrangements have been reclassified from other assets to other secured borrowings and senior unsecured notes on the consolidated balance sheets, resulting in a reduction to the Company’s assets and liabilities of $23.5 million and $24.5 million at March 31, 2016 and December 31, 2015, respectively. Use of Estimates and Assumptions The preparation of financial statements in conformity with GAAP requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, the reported amounts of revenues and expenses during the reporting period and the related disclosures in the accompanying notes. Such estimates and assumptions include, but are not limited to, those that relate to fair value measurements, the provision for potential losses that may arise from litigation proceedings, and representation and warranty and other indemnification obligations. In developing estimates and assumptions, management uses all available information; however, actual results could materially differ from those estimates and assumptions. Recently Issued Accounting Standards Leases (ASU 2016-02) In February 2016, the FASB issued ASU 2016-02 to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key qualitative and quantitative information about leasing arrangements. A lessee will be required to recognize assets and liabilities for leases with lease terms of more than 12 months, regardless of whether the lease is classified as a finance or operating lease. Additional disclosures will help investors and financial statement users better understand the amount, timing and uncertainty of cash flows arising from leases. ASU 2016-02 will be effective for us on January 1, 2019, with early application permitted. We are currently evaluating the effect of adopting this standard. Derivatives and Hedging: Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships (ASU 2016-05) In March 2016, the FASB issued ASU 2016-05 to clarify that a change in the counterparty to a derivative instrument that has been designated as a hedging instrument under FASB Accounting Standards Codification (ASC) Topic 815, Derivatives and Hedging , does not, in and of itself, require dedesignation of that hedging relationship provided that all other hedge accounting criteria continue to be met. ASU 2016-05 will be effective for us on January 1, 2017, with early adoption permitted, including adoption in an interim period. We do not anticipate that our adoption of this standard will have a material impact on our consolidated financial statements. Derivatives and Hedging: Contingent Put and Call Options in Debt Instruments (ASU 2016-06) In March 2016, the FASB issued ASU 2016-06 to clarify that in assessing whether embedded contingent put or call options that can accelerate the payment of principal on debt instruments are clearly and closely related to their debt hosts, an entity is required to apply only the four-step decision sequence in FASB ASC 815-15-25-42 (as amended by this ASU). An entity does not have to separately assess whether the event that triggers its ability to exercise the contingent option is itself indexed only to interest rates or credit risk. ASU 2016-06 will be effective for us on January 1, 2017, with early adoption permitted, including adoption in an interim period. We are currently evaluating the effect of adopting this standard. Investments - Equity Method and Joint Ventures: Simplifying the Transition to the Equity Method of Accounting (ASU 2016-07) In March 2016, the FASB issued ASU 2016-07 to simplify the transition to the equity method of accounting as part of its simplification initiative to reduce cost and complexity in accounting standards while maintaining or improving the usefulness of the information provided to the users of financial statements. This standard requires that an equity method investor add the cost of acquiring the additional interest in the investee to the current basis of the investor’s previously held interest and adopt the equity method of accounting as of the date the investment qualifies for equity method accounting, rather than adjusting the investment retroactively. This standard also requires that an entity that has an available-for-sale equity security that qualifies for the equity method of accounting recognize through earnings the unrealized holding gain or loss in accumulated other comprehensive income at the date the investment qualifies for use of the equity method. ASU 2016-07 will be effective for us on January 1, 2017, with early application permitted. We are currently evaluating the effect of adopting this standard. Revenue from Contracts with Customers: Principal versus Agent Considerations (ASU 2016-08) In March 2016, the FASB issued ASU 2016-08 to clarify the implementation guidance included in FASB ASC Topic 606, Revenue from Contracts with Customers , related to principal versus agent considerations and add illustrative examples to assist in the application of the guidance. When another party is involved in providing goods or services to a customer, an entity is required to determine whether the nature of its promise is that of a principal -- providing the specified good or service itself, or that of an agent -- arranging for that good or service to be provided by the other party. An entity is a principal if it controls the specified good or service before that good or service is transferred to a customer. ASU 2016-08 will be effective for us on January 1, 2018, with early application permitted. We are currently evaluating the effect of adopting this standard. Compensation - Stock Compensation: Improvements to Employee Shared-Based Payment Accounting (ASU 2016-09) In March 2016, the FASB issued ASU 2016-09 to improve the accounting for employee share-based payments. This standard simplifies several aspects of the accounting for share-based payment award transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows, as part of FASB’s simplification initiative to reduce cost and complexity in accounting standards while maintaining or improving the usefulness of the information provided to the users of financial statements. ASU 2016-09 will be effective for us on January 1, 2017, with early adoption permitted. We are currently evaluating the effect of adopting this standard. |
Securitizations and Variable In
Securitizations and Variable Interest Entities | 3 Months Ended |
Mar. 31, 2016 | |
Transfers and Servicing [Abstract] | |
Securitizations and Variable Interest Entities | Note 2 – Securitizations and Variable Interest Entities We securitize, sell and service forward and reverse residential mortgage loans and regularly transfer financial assets in connection with asset-backed financing arrangements. We have aggregated these securitizations and asset-backed financing arrangements into two groups: (1) securitizations of residential mortgage loans and (2) financings of advances on loans serviced for others. We have determined that the special purpose entities (SPEs) created in connection with our match funded advance financing facilities are variable interest entities (VIEs) for which we are the primary beneficiary. Securitizations of Residential Mortgage Loans Currently, we securitize forward and reverse residential mortgage loans involving the GSEs and Ginnie Mae and loans insured by the FHA or VA. We retain the right to service these loans and receive servicing fees based upon the securitized loan balances and certain ancillary fees, all of which are reported in Servicing and subservicing fees in the Unaudited Consolidated Statements of Operations. Transfers of Forward Loans We sell or securitize forward loans that we originate or that we purchase from third parties, generally in the form of mortgage-backed securities guaranteed by the GSEs or Ginnie Mae. Securitization usually occurs within 30 days of loan closing or purchase. We retain the servicing rights associated with the transferred loans and receive a servicing fee for services provided. We act only as a fiduciary and do not have a variable interest in the securitization trusts. As a result, we account for these transactions as sales upon transfer. We report the gain or loss on the transfer of the loans held for sale in Gain on loans held for sale, net in the Unaudited Consolidated Statements of Operations along with the changes in fair value of the loans and the gain or loss on any related derivatives. We include all changes in loans held for sale and related derivative balances in operating activities in the Unaudited Consolidated Statements of Cash Flows. The following table presents a summary of cash flows received from and paid to securitization trusts related to transfers accounted for as sales that were outstanding during the three months ended March 31: 2016 2015 Proceeds received from securitizations $ 1,009,264 $ 1,070,772 Servicing fees collected 3,124 347 Purchases of previously transferred assets, net of claims reimbursed (13 ) 500 $ 1,012,375 $ 1,071,619 In connection with these transfers, we retained MSRs of $7.2 million and $8.5 million during the three months ended March 31, 2016 and 2015 , respectively. Certain obligations arise from the agreements associated with our transfers of loans. Under these agreements, we may be obligated to repurchase the loans, or otherwise indemnify or reimburse the investor or insurer for losses incurred due to material breach of contractual representations and warranties. The following table presents the carrying amounts of our assets that relate to our continuing involvement with forward loans that we have transferred with servicing rights retained as well as our maximum exposure to loss including the UPB of the transferred loans at the dates indicated: March 31, 2016 December 31, 2015 Carrying value of assets: Mortgage servicing rights, at amortized cost $ 57,553 $ 54,729 Mortgage servicing rights, at fair value 200 236 Advances and match funded advances 26,789 26,968 UPB of loans transferred 8,101,276 7,471,025 Maximum exposure to loss $ 8,185,818 $ 7,552,958 At March 31, 2016 and December 31, 2015 , 7.4% and 8.2% , respectively, of the transferred residential loans that we service were 60 days or more past due. 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 (HECM, 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 HECM loans do not qualify for sale accounting, and therefore, we account for these transfers as financings. Under this accounting treatment, the HECM loans are classified as Loans held for investment - reverse mortgages, at fair value, on our Unaudited Consolidated Balance Sheets. We record the proceeds from the transfer of assets as secured borrowings (HMBS-related borrowings) in Financing liabilities and recognize no gain or loss on the transfer. Holders of participating interests in the HMBS have no recourse against the assets of Ocwen, except with respect to standard representations and warranties and our contractual obligation to service the HECM loans and the HMBS. We have elected to measure the HECM loans and HMBS-related borrowings at fair value. The changes in fair value of the HECM loans and HMBS-related borrowings are included in Other revenues in our Unaudited Consolidated Statements of Operations. Included in net fair value gains on the HECM loans and related HMBS borrowings are the interest income that we expect to be collected on the HECM loans and the interest expense that we expect to be paid on the HMBS-related borrowings. We report originations and collections of HECM loans in investing activities in the Unaudited Consolidated Statements of Cash Flows. We report net fair value gains on HECM loans and the related HMBS borrowings as an adjustment to the net cash provided by or used in operating activities in the Unaudited Consolidated Statements of Cash Flows. Proceeds from securitizations of HECM loans and payments on HMBS-related borrowings are included in financing activities in the Unaudited Consolidated Statements of Cash Flows. At March 31, 2016 and December 31, 2015 , we had HMBS-related borrowings of $2.6 billion and $2.4 billion , respectively. HECM loans pledged as collateral to the pools were $2.8 billion and $2.5 billion at March 31, 2016 and December 31, 2015 , respectively. Financings of Advances on Loans Serviced for Others Match funded advances on loans serviced for others result from our transfers of residential loan servicing advances to SPEs in exchange for cash. We consolidate these SPEs because we have determined that Ocwen is the primary beneficiary of the SPE. These SPEs issue debt supported by collections on the transferred advances, and we refer to this debt as Match funded liabilities. We make the transfers to these SPEs under the terms of our advance financing facility agreements. We classify the transferred advances on our Unaudited Consolidated Balance Sheets as Match funded advances and the related liabilities as Match funded liabilities. The SPEs use collections of the pledged advances to repay principal and interest and to pay the expenses of the SPE. Holders of the debt issued by these entities 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 Unaudited Consolidated Balance Sheets. |
Fair Value
Fair Value | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Note 3 – Fair Value Fair value is estimated based on a hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs. Observable inputs are inputs that reflect the assumptions that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The fair value hierarchy prioritizes the inputs to valuation techniques into three broad levels whereby the highest priority is given to Level 1 inputs and the lowest to Level 3 inputs. Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date. Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3: Unobservable inputs for the asset or liability. We classify assets in their entirety based on the lowest level of input that is significant to the fair value measurement. The carrying amounts and the estimated fair values of our financial instruments and certain of our nonfinancial assets measured at fair value on a recurring or non-recurring basis or disclosed, but not carried, at fair value are as follows at the dates indicated: March 31, 2016 December 31, 2015 Level Carrying Value Fair Value Carrying Value Fair Value Financial assets: Loans held for sale: Loans held for sale, at fair value (a) 2 $ 321,739 $ 321,739 $ 309,054 $ 309,054 Loans held for sale, at lower of cost or fair value (b) 3 87,070 87,070 104,992 104,992 Total Loans held for sale $ 408,809 $ 408,809 $ 414,046 $ 414,046 Loans held for investment - Reverse mortgages, at fair value (a) 3 $ 2,771,242 $ 2,771,242 $ 2,488,253 $ 2,488,253 Advances and match funded advances (c) 3 2,038,245 2,038,245 2,151,066 2,151,066 Receivables, net (c) 3 237,583 237,583 286,981 286,981 Mortgage-backed securities, at fair value (a) 3 8,386 8,386 7,985 7,985 Financial liabilities: Match funded liabilities (c) 3 $ 1,537,096 $ 1,537,611 $ 1,584,049 $ 1,581,786 Financing liabilities: HMBS-related borrowings, at fair value (a) 3 $ 2,648,100 $ 2,648,100 $ 2,391,362 $ 2,391,362 Financing liability - MSRs pledged (a) 3 523,503 523,503 541,704 541,704 Other (c) 3 148,043 106,857 156,189 131,940 Total Financing liabilities $ 3,319,646 $ 3,278,460 $ 3,089,255 $ 3,065,006 Other secured borrowings: Senior secured term loan (c)(d) 2 $ 359,428 $ 382,508 $ 377,091 $ 397,956 Other (c) 3 359,402 359,402 385,320 385,320 Total Other secured borrowings $ 718,830 $ 741,910 $ 762,411 $ 783,276 Senior unsecured notes (c)(d) 2 $ 345,847 $ 294,350 $ 345,511 $ 318,063 March 31, 2016 December 31, 2015 Level Carrying Value Fair Value Carrying Value Fair Value Derivative financial instruments assets (liabilities) (a): Interest rate lock commitments 2 $ 13,545 $ 13,545 $ 6,080 $ 6,080 Forward mortgage-backed securities trades 1 (5,291 ) (5,291 ) 295 295 Interest rate caps 3 570 570 2,042 2,042 Mortgage servicing rights: Mortgage servicing rights, at fair value (a) 3 $ 732,174 $ 732,174 $ 761,190 $ 761,190 Mortgage servicing rights, at amortized cost (c)(e) 3 346,039 390,970 377,379 461,555 Total Mortgage servicing rights $ 1,078,213 $ 1,123,144 $ 1,138,569 $ 1,222,745 (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 carrying values are net of unamortized debt issuance costs and discount. See Note 11 – Borrowings for additional information . (e) The net carrying value at March 31, 2016 and December 31, 2015 is net of the valuation allowance on the impaired government-insured stratum of our amortization method MSRs, which is measured at fair value on a non-recurring basis. Before applying the valuation allowance of $47.3 million , the carrying value of this stratum at March 31, 2016 was $146.7 million . At December 31, 2015 , the carrying value of this stratum was $146.5 million before applying the 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: Loans Held for Investment - Reverse Mortgages HMBS-Related Borrowings Mortgage-Backed Securities Financing Liability - MSRs Pledged Derivatives MSRs Total Three months ended March 31, 2016 Beginning balance $ 2,488,253 $ (2,391,362 ) $ 7,985 $ (541,704 ) $ 2,042 $ 761,190 $ 326,404 Purchases, issuances, sales and settlements: Purchases — — — — — 419 419 Issuances 304,058 (233,174 ) — — — — 70,884 Transfer from MSRs carried at amortized cost — — — — — — — Sales — — — — — (142 ) (142 ) Settlements (1) (87,237 ) 39,654 — 18,201 (81 ) — (29,463 ) 216,821 (193,520 ) — 18,201 (81 ) 277 41,698 Total realized and unrealized gains and (losses) (2): Included in earnings 66,168 (63,218 ) 401 — (1,391 ) (29,293 ) (27,333 ) Included in Other comprehensive income — — — — — — — 66,168 (63,218 ) 401 — (1,391 ) (29,293 ) (27,333 ) Transfers in and / or out of Level 3 — — — — — — — Ending balance $ 2,771,242 $ (2,648,100 ) $ 8,386 $ (523,503 ) $ 570 $ 732,174 $ 340,769 Loans Held for Investment - Reverse Mortgages HMBS-Related Borrowings Mortgage-Backed Securities Financing Liability - MSRs Pledged Derivatives MSRs Total Three months ended March 31, 2015 Beginning balance $ 1,550,141 $ (1,444,252 ) $ 7,335 $ (614,441 ) $ 567 $ 93,901 $ (406,749 ) Purchases, issuances, sales and settlements: Purchases — — — — — — — Issuances 235,271 (238,615 ) — — — (1,169 ) (4,513 ) Transfer from MSRs carried at amortized cost — — — — — 839,157 839,157 Sales — — — — (917 ) (917 ) Settlements (1) (26,233 ) 25,985 — 19,946 — — 19,698 209,038 (212,630 ) — 19,946 — 837,071 853,425 Total realized and unrealized gains and (losses) (2): Included in earnings 48,962 (45,515 ) 366 — (364 ) (33,175 ) (29,726 ) Included in Other comprehensive income — — — — — — — 48,962 (45,515 ) 366 — (364 ) (33,175 ) (29,726 ) Transfers in and / or out of Level 3 — — — — — — — Ending balance $ 1,808,141 $ (1,702,397 ) $ 7,701 $ (594,495 ) $ 203 $ 897,797 $ 416,950 (1) In the event of a transfer to another party of servicing related to Rights to MSRs, we are required to reimburse NRZ at predetermined contractual rates for the loss of servicing revenues. Settlements for Financing liability - MSRs pledged for the three months ended March 31, 2015 includes $2.2 million of such reimbursements. (2) Total losses attributable to derivative financial instruments still held at March 31, 2016 and March 31, 2015 were $1.5 million and $0.4 million for the three months ended March 31, 2016 and 2015 , respectively. Total losses attributable to MSRs still held at March 31, 2016 and March 31, 2015 were $29.1 million and $31.7 million for the three months ended March 31, 2016 and 2015 , respectively. 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 March 31, 2016 valuation include: • Life in years ranging from 5.96 to 9.46 (weighted average of 6.52 ); • Conditional repayment rate ranging from 4.92% to 53.75% (weighted average of 19.70% ); and • Discount rate of 2.74% . Significant increases or decreases in any of these assumptions in isolation could result in a significantly lower or higher fair value, respectively. The effects of changes in the assumptions used to value the loans held for investment are largely offset by the effects of changes in the assumptions used to value the HMBS-related borrowings that are associated with these loans. Mortgage Servicing Rights The significant components of the estimated future cash inflows for MSRs include servicing fees, late fees, float earnings and other ancillary fees. Significant cash outflows include the cost of servicing, the cost of financing servicing advances and compensating interest payments. Third-party valuation experts generally utilize: (a) transactions involving instruments with similar collateral and risk profiles, adjusted as necessary based on specific characteristics of the asset or liability being valued; and/or (b) industry-standard modeling, such as a discounted cash flow model, in arriving at their estimate of fair value. The prices provided by the valuation experts reflect their observations and assumptions related to market activity, including risk premiums and liquidity adjustments. The models and related assumptions used by the valuation experts are owned and managed by them and, in many cases, the significant inputs used in the valuation techniques are not reasonably available to us. However, we have an internal understanding of the processes and assumptions used to develop the prices based on our ongoing due diligence, which includes regular discussions with the valuation experts. We believe that the procedures executed by the valuation experts, supported by our internal verification and analytical procedures, provide reasonable assurance that the prices used in our Unaudited Consolidated Financial Statements comply with the accounting guidance for fair value measurements and disclosures and reflect the assumptions that a market participant would use. We evaluate the reasonableness of our third-party experts’ assumptions using historical experience adjusted for prevailing market conditions. Assumptions used in the valuation of MSRs include: • Mortgage prepayment speeds • Interest rate used for computing the cost of financing servicing advances • Cost of servicing • Interest rate used for computing float earnings • Discount rate • Compensating interest expense • Delinquency rates • Collection rate of other ancillary fees Amortized Cost MSRs We estimate the fair value of MSRs carried at amortized cost using a process that involves either actual sale prices obtained or the use of 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 March 31, 2016 valuation include: Weighted average prepayment speed 12.11 % Weighted average delinquency rate 12.32 % Advance financing cost 5-year swap Interest rate for computing float earnings 5-year swap Weighted average discount rate 9.33 % Weighted average cost to service (in dollars) $ 111 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 March 31, 2016 valuation include: Agency Non Agency Weighted average prepayment speed 13.27 % 16.83 % Weighted average delinquency rate 0.99 % 27.42 % Advance financing cost 5-year swap 1ML plus 3.5% Interest rate for computing float earnings 5-year swap 1ML Weighted average discount rate 9.00 % 14.68 % Weighted average cost to service (in dollars) $ 74 $ 313 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 Unaudited 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 March 31, 2016 valuation include: • Life in years ranging from 4.74 to 9.46 (weighted average of 5.40 ); • Conditional repayment rate ranging from 4.92% to 53.75% (weighted average of 19.70% ); and • Discount rate of 2.17% . 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 - MSRs Pledged based on the price at which the Rights to MSRs are sold. Thereafter, the carrying value of the Financing Liability - MSRs pledged is adjusted to fair value at each reporting date. We determine fair value by applying the price of the underlying MSRs to the remaining principal balance related to the underlying MSRs. Since we have elected fair value for our portfolio of 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 March 31, 2016 include: Weighted average prepayment speed 17.35 % Weighted average delinquency rate 29.21 % Advance financing cost 1 ML plus 3.5% Interest rate for computing float earnings 1ML Weighted average discount rate 14.54 % Weighted average cost to service (in dollars) $ 318 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. |
Sales of Advances and MSRs
Sales of Advances and MSRs | 3 Months Ended |
Mar. 31, 2016 | |
Transfers and Servicing [Abstract] | |
Sales of Advances and MSRs | Note 4 — Sales of Advances and MSRs In order to efficiently finance our assets, streamline our operations and generate liquidity, we sell MSRs, Rights to MSRs and servicing advances to market participants. We may retain the right to subservice loans when we sell MSRs. In connection with sales of Rights to MSRs, we retain legal ownership of the MSRs and continue to service the related mortgage loans until such time as all necessary consents to a transfer of the MSRs are received. During the three months ended March 31, 2016 and 2015 , we sold MSRs relating to loans with a UPB of $34.5 million (non-Agency) and $9.1 billion (Agency), respectively. The following table provides a summary of the MSRs and advances sold during the three months ended March 31: 2016 2015 MSRs Advances and Match Funded Advances MSRs Advances and Match Funded Advances Sales price of assets sold and adjustments: Accounted for as a sale $ 1,162 $ 261 $ 97,530 $ 1,765 Amount due from purchaser at March 31 (1) — — (48,065 ) — Amounts received from purchaser for items outstanding at the end of the previous year 14,143 40,742 — — Total net cash received $ 15,305 $ 41,003 $ 49,465 $ 1,765 (1) There were no amounts due from purchaser at March 31, 2016 related to assets sold during the three months ended March 31, 2016 . The total amount due at March 31, 2016 on sales of MSRs and advances, which consists only of amounts due on sales completed in 2015, is $39.7 million . In 2012 and 2013, we sold Rights to MSRs and the related servicing advances to Home Loan Servicing Solutions, Ltd. (HLSS). On April 6, 2015, HLSS closed on the sale of substantially all of its assets to NRZ. References to NRZ in these unaudited consolidated financial statements include HLSS for periods prior to April 6, 2015 because, following HLSS’ sale of substantially all of its assets on April 6, 2015, NRZ, through its subsidiaries, is the owner of the Rights to MSRs and has assumed all rights and obligations under the associated agreements. 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 March 31, 2016 , NRZ had outstanding advances of approximately $4.9 billion in connection with the Rights to MSRs. The servicing fees payable under the servicing agreements underlying the Rights to MSRs are apportioned between NRZ and us as provided in our agreements with NRZ. NRZ retains a fee based on the UPB of the loans serviced, and OLS receives certain fees, including a performance fee based on servicing fees actually paid less an amount calculated based on the amount of servicing advances and cost of financing those advances. After the earlier of April 30, 2020 or eight years after the closing date of the sale of each tranche of Rights to MSRs to NRZ, the apportionment of these fees with respect to such tranche is subject to re-negotiation. 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. Beginning April 7, 2017, under the Master Servicing Rights Purchase Agreement and Sale Supplements with NRZ, if a termination event related to a servicer rating downgrade exists with respect to any servicing agreement, NRZ will have the right to direct the transfer of servicing with respect to any affected servicing agreement to a replacement servicer that obtains all required third-party consents and licenses. As of March 31, 2016, 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 of an affected servicing agreement, we would no longer be entitled to receive future servicing fee revenue with respect to the transferred servicing agreement. To the extent servicing agreements underlying Rights to MSRs are terminated as a result of a termination event, NRZ is entitled to payment of an amount equal to an amortized percentage of NRZ’s purchase price for the related Rights to MSRs. We paid NRZ $2.2 million during the three months ended March 31, 2015 in connection with the termination of four servicing agreements underlying the Rights to MSRs. 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 $6.2 million during the three months ended March 31, 2016 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). |
Loans Held for Sale
Loans Held for Sale | 3 Months Ended |
Mar. 31, 2016 | |
Receivables [Abstract] | |
Loans Held for Sale | Note 5 – Loans Held for Sale Loans Held for Sale - Fair Value Loans held for sale, at fair value, represent residential mortgage loans originated or purchased and held until sold to secondary market investors, such as the GSEs or other third parties. The following table summarizes the activity in the balance during the three months ended March 31: 2016 2015 Beginning balance $ 309,054 $ 401,120 Originations and purchases 789,180 922,254 Proceeds from sales (783,187 ) (990,634 ) Principal collections (3,280 ) (2,667 ) Gain on sale of loans 7,646 15,265 Other (1) 2,326 (5,830 ) Ending balance $ 321,739 $ 339,508 (1) Other includes the increase (decrease) in fair value of $1.8 million and $(6.9) million for the three months ended March 31, 2016 and 2015 , respectively. At March 31, 2016 , loans held for sale, at fair value with a UPB of $285.1 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 net balance during the three months ended March 31: 2016 2015 Beginning balance $ 104,992 $ 87,492 Purchases 421,896 113,896 Proceeds from sales (372,583 ) (140,948 ) Principal collections (6,453 ) (13,863 ) Transfers to accounts receivable (61,212 ) (16,572 ) Transfers to real estate owned (1,224 ) (2,296 ) Gain on sale of loans 5,010 17,271 Decrease (increase) in valuation allowance (3,335 ) 19,728 Other (21 ) 3,781 Ending balance (1) $ 87,070 $ 68,489 (1) At March 31, 2016 and March 31, 2015 , the balances include $55.5 million and $43.9 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. The change in the valuation allowance during the three months ended March 31 is as follows: 2016 2015 Beginning balance $ 14,658 $ 49,676 Provision 2,597 1,104 Transfer from liability for indemnification obligations 1,030 664 Sales of loans — (22,488 ) Other (292 ) 992 Ending balance $ 17,993 $ 29,948 At March 31, 2016 , Loans held for sale, at lower of cost or fair value with a UPB of $37.1 million were pledged to secure a warehouse line of credit in our Servicing segment. 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. We had repurchased these loans under the representation and warranty provisions of our contractual obligations to the GSEs as primary servicer of the loans. Gain on Loans Held for Sale, Net The following table summarizes the activity in Gain on loans held for sale, net, during the three months ended March 31: 2016 2015 Gain on sales of loans $ 17,939 $ 51,400 Change in fair value of IRLCs 7,465 (2,233 ) Change in fair value of loans held for sale 3,521 (4,008 ) Loss on economic hedge instruments (13,202 ) (427 ) Other (151 ) (228 ) $ 15,572 $ 44,504 Gain on loans held for sale, net include $6.5 million and $8.5 million for the three months ended March 31, 2016 and 2015 , 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 $5.0 million and $4.3 million recorded during the three months ended March 31, 2016 and 2015 , 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 $8.0 million and $25.6 million for the three months ended March 31, 2016 and 2015 , respectively. |
Advances
Advances | 3 Months Ended |
Mar. 31, 2016 | |
Advances [Abstract] | |
Advances | Note 6 – Advances Advances, net, which represent payments made on behalf of borrowers or on foreclosed properties, consisted of the following at the dates indicated: March 31, 2016 December 31, 2015 Principal and interest $ 58,290 $ 81,681 Taxes and insurance 233,202 278,487 Foreclosures, bankruptcy and other 68,379 126,031 359,871 486,199 Allowance for losses (42,523 ) (41,901 ) $ 317,348 $ 444,298 Advances at March 31, 2016 include $79.6 million of previously sold advances that did not qualify for sales accounting. The following table summarizes the activity in net advances for the three months ended March 31: 2016 2015 Beginning balance $ 444,298 $ 893,914 Sales of advances (261 ) (1,765 ) New advances (collections of advances), net (126,067 ) 52,217 Increase in allowance for losses (622 ) (1,828 ) Ending balance $ 317,348 $ 942,538 The change in the allowance for losses during the three months ended March 31 is as follows: 2016 2015 Beginning balance $ 41,901 $ 70,034 Provision 3,483 4,960 Charge-offs and other (2,861 ) (3,132 ) Ending balance $ 42,523 $ 71,862 |
Match Funded Advances
Match Funded Advances | 3 Months Ended |
Mar. 31, 2016 | |
Transfers and Servicing [Abstract] | |
Match Funded Advances | Note 7 – Match Funded Advances Match funded advances on residential loans we service for others are comprised of the following at the dates indicated: March 31, 2016 December 31, 2015 Principal and interest $ 879,242 $ 948,376 Taxes and insurance 620,795 608,404 Foreclosures, bankruptcy, real estate and other 220,860 149,988 $ 1,720,897 $ 1,706,768 The following table summarizes the activity in match funded advances for the three months ended March 31: 2016 2015 Beginning balance $ 1,706,768 $ 2,409,442 New advances (collections of pledged advances), net 14,129 (156,475 ) Ending balance $ 1,720,897 $ 2,252,967 |
Mortgage Servicing
Mortgage Servicing | 3 Months Ended |
Mar. 31, 2016 | |
Transfers and Servicing [Abstract] | |
Mortgage Servicing | Note 8 – 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 three months ended March 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. 2016 2015 Beginning balance $ 377,379 $ 1,820,091 Fair value election - transfer of MSRs carried at fair value (1) — (787,142 ) Additions recognized in connection with asset acquisitions 4,263 3,267 Additions recognized on the sale of mortgage loans 7,156 8,528 Sales — (65,627 ) 388,798 979,117 Amortization (12,806 ) (38,494 ) Increase in impairment valuation allowance (2) (29,953 ) (17,769 ) Ending balance $ 346,039 $ 922,854 Estimated fair value at end of period $ 390,970 $ 1,064,134 (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 $9.2 million ) to retained earnings as of January 1, 2015 to reflect the excess of the fair value of these MSRs over their carrying amount. At December 31, 2014, the UPB of the loans related to the non-Agency MSRs for which the fair value election was made was $195.3 billion . (2) Impairment of MSRs is recognized in Servicing and origination expense in the Unaudited Consolidated Statements of Operations. 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 three months ended March 31: 2016 2015 Agency Non-Agency Total Agency Non-Agency Total Beginning balance $ 15,071 $ 746,119 $ 761,190 $ 93,901 $ — $ 93,901 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 — (142 ) (142 ) — (947 ) (947 ) Servicing transfers and adjustments — 419 419 — (1,139 ) (1,139 ) Changes in fair value (1): Changes in valuation inputs or other assumptions (2,709 ) (3,671 ) (6,380 ) (6,110 ) — (6,110 ) Realization of expected future cash flows and other changes (351 ) (22,562 ) (22,913 ) (3,276 ) (23,789 ) (27,065 ) Ending balance $ 12,011 $ 720,163 $ 732,174 $ 84,515 $ 813,282 $ 897,797 (1) Changes in fair value are recognized in Servicing and origination expense in the Unaudited Consolidated Statements of Operations. Because the mortgages underlying these MSRs permit the borrowers to prepay the loans, the value of the MSRs generally tends to diminish in periods of declining interest rates, an improving housing market or expanded product availability (as prepayments increase) and increase in periods of rising interest rates, a deteriorating housing market or reduced product availability (as prepayments decrease). The following table summarizes the estimated change in the value of the MSRs that we carry at fair value as of March 31, 2016 given hypothetical shifts in lifetime prepayments and yield assumptions: Adverse change in fair value 10% 20% Weighted average prepayment speeds $ (77,665 ) $ (150,075 ) Discount rate (option-adjusted spread) $ (17,894 ) $ (34,728 ) The sensitivity analysis measures the potential impact on fair values based on hypothetical changes, which in the case of our portfolio at March 31, 2016 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 Unaudited Consolidated Balance Sheets. Residential Commercial Total UPB at March 31, 2016 Servicing $ 223,731,371 $ — $ 223,731,371 Subservicing 13,349,665 136,473 13,486,138 $ 237,081,036 $ 136,473 $ 237,217,509 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 March 31, 2015 Servicing $ 337,125,187 $ — $ 337,125,187 Subservicing 45,088,815 161,887 45,250,702 $ 382,214,002 $ 161,887 $ 382,375,889 UPB serviced at March 31, 2016 , December 31, 2015 and March 31, 2015 includes $132.7 billion , $137.1 billion and $156.3 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 $1.7 billion , $1.8 billion and $2.1 billion at March 31, 2016 , December 31, 2015 and March 31, 2015 , 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 3,908 non-Agency servicing agreements, approximately 735 with approximately $38.1 billion of UPB as of March 31, 2016 have minimum servicer ratings criteria. As a result of downgrades in our servicer ratings, termination rights have been triggered in 651 of these non-Agency servicing agreements. This represents approximately $32.4 billion in UPB as of March 31, 2016 , or approximately 18% of our total non-Agency servicing portfolio. Under 272 of the 651 triggered agreements, trustees and master servicers have sent notices to investors indicating that they did not currently intend to take action relating to the termination rights. In addition, in connection with 69 of the triggered agreements, the trustee or master servicer sent solicitation notices to investors asking whether or not the investor wanted to direct the trustee or master servicer to terminate Ocwen as servicer. The trustee or master servicer has announced results for 47 of the solicitations: 43 resulted in no direction to terminate and four resulted in the termination of Ocwen as servicer in early 2015 due to rating downgrades. The 272 notices regarding no action at this time and the 43 solicitations resulting in no direction to terminate Ocwen as servicer represent approximately $19.3 billion in UPB as of March 31, 2016, or approximately 59.6% of the UPB of the non-Agency servicing agreements with triggered termination rights. As noted above, 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. Servicing Revenue The following table presents the components of servicing and subservicing fees for the three months ended March 31: 2016 2015 Loan servicing and subservicing fees: Servicing $ 238,638 $ 332,201 Subservicing 7,239 18,341 245,877 350,542 Home Affordable Modification Program (HAMP) fees 22,618 35,176 Late charges 18,603 24,122 Loan collection fees 7,129 9,563 Other 3,269 27,138 $ 297,496 $ 446,541 Float balances (balances in custodial accounts, which represent collections of principal and interest that we receive from borrowers), are held in escrow by an unaffiliated bank and are excluded from our Unaudited Consolidated Balance Sheets. Float balances amounted to $2.3 billion and $4.0 billion at March 31, 2016 and March 31, 2015 , respectively. |
Receivables
Receivables | 3 Months Ended |
Mar. 31, 2016 | |
Receivables [Abstract] | |
Receivables | Note 9 – Receivables Receivables, net consisted of the following at the dates indicated: March 31, 2016 December 31, 2015 Servicing: Amount due on sales of mortgage servicing rights and advances $ 39,744 $ 94,629 Government-insured loan claims (1) 67,950 71,405 Due from custodial accounts 20,798 13,800 Reimbursable expenses 28,400 29,856 Other servicing receivables 48,195 32,879 205,087 242,569 Income taxes receivable 50,384 53,519 Other receivables 20,882 29,818 276,353 325,906 Allowance for losses (1) (38,770 ) (38,925 ) $ 237,583 $ 286,981 (1) At March 31, 2016 and December 31, 2015 , 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 March 31, 2016 and December 31, 2015 were $21.5 million and $20.6 million , respectively. |
Other Assets
Other Assets | 3 Months Ended |
Mar. 31, 2016 | |
Other Assets [Abstract] | |
Other Assets | Note 10 – Other Assets Other assets consisted of the following at the dates indicated: March 31, 2016 December 31, 2015 Contingent loan repurchase asset (1) $ 316,002 $ 346,984 Prepaid expenses (2) 58,992 69,805 Debt service accounts (3) 56,946 87,328 Real estate 18,607 20,489 Derivatives, at fair value 14,115 6,367 Prepaid lender fees and debt issuance costs, net 14,903 19,496 Prepaid income taxes 10,910 11,749 Mortgage backed securities, at fair value 8,386 7,985 Other 21,321 16,292 $ 520,182 $ 586,495 (1) In connection with the Ginnie Mae early buy-out (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) 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. Prepaid expenses at March 31, 2016 and December 31, 2015 includes the remaining balance of $39.3 million and $41.3 million , respectively. (3) 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 to provide for possible shortfalls in the funds available to pay certain expenses and interest, as well as amounts set aside as required by our warehouse facilities as security for our obligations under the related agreements. The funds are held in interest earning accounts and those amounts related to match funded facilities are held in the name of the SPE created in connection with the facility. |
Borrowings
Borrowings | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Borrowings | Note 11 – Borrowings Match Funded Liabilities Match funded liabilities are comprised of the following at the dates indicated: Borrowing Type Interest Rate Maturity (1) Amortization Date (1) Available Borrowing Capacity (2) March 31, 2016 December 31, 2015 Advance Receivables Backed Notes - Series 2014-VF3, 1-Month LIBOR (1ML)(3) + 235 bps (4) Sep. 2046 Sep. 2016 $ 47,741 $ 113,944 $ 132,651 Advance Receivables Backed Notes - Series 2014-VF3, 1ML + 300 bps (4) Sep. 2046 Sep. 2016 2,172 5,452 6,330 Advance Receivables Backed Notes - Series 2014-VF3, 1ML + 425 bps (4) Sep. 2046 Sep. 2016 2,426 6,009 6,977 Borrowing Type Interest Rate Maturity (1) Amortization Date (1) Available Borrowing Capacity (2) March 31, 2016 December 31, 2015 Advance Receivables Backed Notes - Series 2014-VF3, 1ML + 575 bps (4) Sep. 2046 Sep. 2016 6,404 15,852 18,427 Advance Receivables Backed Notes - Series 2014-VF4, 1ML + 235 bps (4) Sep. 2046 Sep. 2016 47,741 113,944 132,651 Advance Receivables Backed Notes - Series 2014-VF4, 1ML + 300 bps (4) Sep. 2046 Sep. 2016 2,172 5,452 6,330 Advance Receivables Backed Notes - Series 2014-VF4, 1ML + 425 bps (4) Sep. 2046 Sep. 2016 2,426 6,009 6,977 Advance Receivables Backed Notes - Series 2014-VF4, 1ML + 575 bps (4) Sep. 2046 Sep. 2016 6,404 15,852 18,427 Advance Receivables Backed Notes - Series 2015-VF5, 1ML + 235 bps (4) Sep. 2046 Sep. 2016 47,742 113,943 132,652 Advance Receivables Backed Notes - Series 2015-VF5, 1ML + 300 bps (4) Sep. 2046 Sep. 2016 2,172 5,452 6,330 Advance Receivables Backed Notes - Series 2015-VF5, 1ML + 425 bps (4) Sep. 2046 Sep. 2016 2,426 6,009 6,977 Advance Receivables Backed Notes - Series 2015-VF5, 1ML + 575 bps (4) Sep. 2046 Sep. 2016 6,404 15,852 18,427 Advance Receivables Backed Notes - Series 2015-T1, 2.5365% Sep. 2046 Sep. 2016 — 244,809 244,809 Advance Receivables Backed Notes - Series 2015-T1, 3.0307% Sep. 2046 Sep. 2016 — 10,930 10,930 Advance Receivables Backed Notes - Series 2015-T1, 3.5240% Sep. 2046 Sep. 2016 — 12,011 12,011 Advance Receivables Backed Notes - Series 2015-T1, 4.1000% Sep. 2046 Sep. 2016 — 32,250 32,250 Advance Receivables Backed Notes - Series 2015-T2, 2.5320% Nov. 2046 Nov. 2016 — 161,973 161,973 Advance Receivables Backed Notes - Series 2015-T2, 3.3720% Nov. 2046 Nov. 2016 — 7,098 7,098 Advance Receivables Backed Notes - Series 2015-T2, 3.7660% Nov. 2046 Nov. 2016 — 8,113 8,113 Advance Receivables Backed Notes - Series 2015-T2, 4.2580% Nov. 2046 Nov. 2016 — 22,816 22,816 Advance Receivables Backed Notes - Series 2015-T3, 3.2110% Nov. 2047 Nov. 2017 — 310,195 310,195 Borrowing Type Interest Rate Maturity (1) Amortization Date (1) Available Borrowing Capacity (2) March 31, 2016 December 31, 2015 Advance Receivables Backed Notes - Series 2015-T3, 3.7040% Nov. 2047 Nov. 2017 — 17,695 17,695 Advance Receivables Backed Notes - Series 2015-T3, 4.1960% Nov. 2047 Nov. 2017 — 19,262 19,262 Advance Receivables Backed Notes - Series 2015-T3, 4.6870% Nov. 2047 Nov. 2017 — 52,848 52,848 Total Ocwen Master Advance Receivables Trust (OMART) 176,230 1,323,770 1,393,156 Advance Receivables Backed Notes, Series 2014-VF1, Cost of Funds + 270 bps Dec. 2046 Dec. 2016 — 58,221 31,343 Advance Receivables Backed Notes, Series 2014-VF1, Cost of Funds + 425 bps Dec. 2046 Dec. 2016 — 6,044 4,157 Advance Receivables Backed Notes, Series 2014-VF1, Cost of Funds + 470 bps Dec. 2046 Dec. 2016 — 6,783 4,564 Advance Receivables Backed Notes, Series 2014-VF1, Cost of Funds + 520 bps Dec. 2046 Dec. 2016 — 18,952 11,351 Total Ocwen Servicer Advance Receivables Trust III (OSART III) (6) — 90,000 51,415 Advance Receivables Backed Notes, Series 2015-VF1, 1ML + 212.5 bps Jun. 2046 Jun. 2016 29,242 100,323 112,882 Advance Receivables Backed Notes, Series 2015-VF1, 1ML + 300 bps Jun. 2046 Jun. 2016 3,087 10,637 12,268 Advance Receivables Backed Notes, Series 2015-VF1, 1ML + 350 bps Jun. 2046 Jun. 2016 1,906 5,134 5,951 Advance Receivables Backed Notes, Series 2015-VF1, 1ML + 425 bps Jun. 2046 Jun. 2016 2,439 7,232 8,377 Total Ocwen Freddie Advance Funding Facility (OFAF) (7) 36,674 123,326 139,478 $ 212,904 $ 1,537,096 $ 1,584,049 Weighted average interest rate 3.17 % 3.15 % (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 March 31, 2016 , none of the available borrowing capacity could be used based on the amount of eligible collateral that had been pledged. (3) 1-Month LIBOR was 0.44% and 0.43% at March 31, 2016 and December 31, 2015 , respectively. (4) There is a ceiling of 75 bps for 1 ML in determining the interest rate for these variable rate notes. (5) Under the terms of the agreement, we must continue to borrow the full amount of the Series 2015-T1, T2 and T3 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. (6) On March 31, 2016, the maximum borrowing under the OSART III facility was increased to $90.0 million . (7) On March 31, 2016, the combined borrowing capacity of the Series 2015-VF1 Notes was increased to $160.0 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 Rights to 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 March 31, 2016 , we were the servicer on Rights to MSRs sold to NRZ pertaining to approximately $132.7 billion in UPB and the associated outstanding servicing advances as of such date were approximately $4.9 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. Financing Liabilities Financing liabilities are comprised of the following at the dates indicated: Borrowings Collateral Interest Rate Maturity March 31, 2016 December 31, 2015 Servicing: Financing liability – MSRs pledged MSRs (1) (1) $ 523,503 $ 541,704 Secured Notes, Ocwen Asset Servicing Income Series, Series 2014-1 (2) MSRs (2) Feb. 2028 93,217 96,546 Financing liability – Advances pledged (3) Advances on loans (3) (3) 54,826 59,643 671,546 697,893 Lending: HMBS-related borrowings (4) Loans held for investment 1ML + 248 bps (4) 2,648,100 2,391,362 $ 3,319,646 $ 3,089,255 (1) This financing liability arose in connection with the NRZ/HLSS Transactions and has no contractual maturity or repayment schedule. The balance of the liability is adjusted each reporting period to its fair value based on the present value of the estimated future cash flows underlying the related MSRs. (2) OASIS noteholders are entitled to receive a monthly payment amount equal to the sum of: (a) the designated servicing fee amount ( 21 basis points of the UPB of the reference pool of Freddie Mac mortgages); (b) any termination payment amounts; (c) any excess refinance amounts; and (d) the note redemption amounts, each as defined in the indenture supplement for the notes. The notes have a final stated maturity of February 2028. We accounted for this transaction as a financing. Monthly amortization of the liability is estimated using the proportion of monthly projected service fees on the underlying MSRs as a percentage of lifetime projected fees, adjusted for the term of the security. (3) Certain sales of advances in 2014 did not qualify for sales accounting treatment and were accounted for as a financing. (4) Represents amounts due to the holders of beneficial interests in Ginnie Mae guaranteed HMBS. The beneficial interests have no maturity dates, and the borrowings mature as the related loans are repaid. Other Secured Borrowings Other secured borrowings are comprised of the following at the dates indicated: Borrowings Collateral Interest Rate Maturity Available Borrowing Capacity March 31, 2016 December 31, 2015 Servicing: SSTL (1) (1) 1-Month Euro-dollar rate + 425 bps with a Eurodollar floor of 125 bps (1) Feb. 2018 $ — $ 379,895 $ 398,454 Repurchase agreement (2) Loans held for sale (LHFS) 1ML + 200 - 345 bps Sep. 2016 15,549 34,451 42,973 15,549 414,346 441,427 Lending: Master repurchase agreement (3) LHFS 1ML + 200 bps Aug. 2016 70,238 129,762 156,226 Participation agreement (4) LHFS N/A Apr. 2016 (4) — 28,824 49,897 Participation agreement (5) LHFS N/A Apr. 2016 (5) — 115,107 73,049 Mortgage warehouse agreement (6) LHFS (reverse mortgages) 1ML + 275 bps; floor of 350 bps May 2016 — — 63,175 Master repurchase agreement (7) LHFS (reverse mortgages) 1ML + 275 bps; 1ML floor of 25 bps Jan. 2017 48,742 51,258 — 118,980 324,951 342,347 134,529 739,297 783,774 Unamortized debt issuance costs - SSTL — (19,321 ) (20,012 ) Discount - SSTL — (1,146 ) (1,351 ) $ 134,529 $ 718,830 $ 762,411 Weighted average interest rate 4.46 % 4.38 % (1) The borrowings are secured by a first priority security interest in substantially all of the assets of Ocwen. Borrowings bear interest, at the election of Ocwen, at a rate per annum equal to either (a) the base rate (the greatest of (i) the prime rate in effect on such day, (ii) the federal funds rate in effect on such day plus 0.50% and (iii) the one-month Eurodollar rate (1-Month LIBOR)), plus a margin of 3.25% and subject to a base rate floor of 2.25% or (b) the one month Eurodollar rate, plus a margin of 4.25% and subject to a one month Eurodollar floor of 1.25% . To date we have elected option (b) to determine the interest rate. We entered into Amendment No. 5 to Senior Secured Term Loan Facility Agreement (the Amendment) effective as of March 28, 2016. The Amendment, among other things: • permanently removes the consolidated total debt to consolidated tangible net worth ratio, corporate leverage ratio and interest coverage ratio financial covenants; • maintains the loan-to-value ratio covenant at its current 40% level throughout the remaining term of the SSTL; • limits the repurchase of Ocwen’s common stock or options to an amount not to exceed the sum of (i) $20 million plus (ii) an amount equal to (x) $20 million times (y) the aggregate amount of prepayments on the SSTL made after March 28, 2016 divided by $50 million ; • limits the repurchase of Ocwen’s 6.625% Senior Notes (the Senior Unsecured Notes) due 2019 to an amount not to exceed the sum of (i) $30 million plus (ii) an amount equal to (x) $30 million times (y) the aggregate amount of prepayments on the SSTL made after March 28, 2016 divided by $50 million ; • requires that we make a prepayment on the SSTL in an amount equal to $6.3 million (for a total of $19.0 million ) on each of May 31, 2016, July 29, 2016 and September 30, 2016; and • provides for a fee payable to the consenting lenders equal to 1.0% of the aggregate amount of such consenting lenders’ SSTL loans outstanding. (2) The maximum borrowing under this facility is 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) 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 April 11, 2016, we negotiated an extension of this agreement to May 15, 2016 and reduced the maximum borrowing to $75.0 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 April 11, 2016, we negotiated an extension of this agreement to May 15, 2016 and increased the maximum borrowing to $175.0 million . (6) Borrowing capacity of $100.0 million under this facility is available at the discretion of the lender. (7) We entered into this agreement on January 5, 2016. The lender provides financing on a committed basis for $100.0 million . Senior Unsecured Notes On May 12, 2014, Ocwen completed the issuance and sale of $350.0 million of its Senior Unsecured Notes in a private offering. The Senior Unsecured Notes are general senior unsecured obligations of Ocwen and will mature on May 15, 2019 . Interest is payable semi-annually on May 15 th and November 15 th . The Senior Unsecured Notes are not guaranteed by any of Ocwen’s subsidiaries. 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 balances of Senior Unsecured Notes as reported on our Unaudited Consolidated Balance Sheets are net of unamortized debt issuance costs of $4.2 million and $4.5 million at March 31, 2016 and December 31, 2015 , 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 loan to collateral value ratio, as defined under our SSTL; and • specified levels of tangible net worth and liquidity at the consolidated and OLS levels. As a result of the Amendment of our SSTL in March 2016, the interest coverage ratio, corporate leverage ratio and consolidated total debt to consolidated tangible net worth financial covenants have been removed. As of March 31, 2016 , the most restrictive consolidated tangible net worth requirements were for a minimum of $1.1 billion at OLS under our match funded debt agreements and a repurchase agreement (Servicing) and $600.0 million at Ocwen under a master repurchase agreement (Lending). As a result of the covenants to which we are subject, we may be limited in the manner in which we conduct our business and may be limited in our ability to engage in favorable business activities or raise additional capital to finance future operations or satisfy future liquidity needs. In addition, breaches or events that may result in a default under our debt agreements include, among other things, noncompliance with our covenants, nonpayment of principal or interest, material misrepresentations, the occurrence of a material adverse change, insolvency, bankruptcy, certain material judgments and changes of control. Covenants and default provisions of this type are commonly found in debt agreements such as ours. Certain of these covenants and default provisions are open to subjective interpretation and, if our interpretation were contested by a lender, a court may ultimately be required to determine compliance or lack thereof. In addition, our debt agreements generally include cross default provisions such that a default under one agreement could trigger defaults under other agreements. If we fail to comply with our debt agreements and are unable to avoid, remedy or secure a waiver of any resulting default, we may be subject to adverse action by our lenders, including termination of further funding, acceleration of outstanding obligations, enforcement of liens against the assets securing or otherwise supporting our obligations and other legal remedies. Our lenders can waive their contractual rights in the event of a default. We believe that we are in compliance with all of the qualitative and quantitative covenants in our debt agreements as of the date of these financial statements. |
Other Liabilities
Other Liabilities | 3 Months Ended |
Mar. 31, 2016 | |
Other Liabilities Disclosure [Abstract] | |
Other Liabilities | Note 12 – Other Liabilities Other liabilities were comprised of the following at the dates indicated: March 31, 2016 December 31, 2015 Contingent loan repurchase liability (1) $ 316,002 $ 346,984 Accrued expenses 178,046 188,856 Liability for uncertain tax positions 48,328 44,751 Liability for indemnification obligations 32,329 36,615 Payable to loan servicing and subservicing investors 26,290 15,941 Checks held for escheat 15,131 14,301 Accrued interest payable 9,496 3,667 Derivatives, at fair value 5,291 — Other 116,310 93,329 $ 747,223 $ 744,444 (1) In connection with the Ginnie Mae EBO Transactions, we have re-recognized certain loans on our consolidated balance sheets and establish a corresponding repurchase liability regardless of our intention to repurchase the loan. |
Derivative Financial Instrument
Derivative Financial Instruments and Hedging Activities | 3 Months Ended |
Mar. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments and Hedging Activities | Note 13 – Derivative Financial Instruments and Hedging Activities Because many of our current derivative agreements are not exchange-traded, we are exposed to credit loss in the event of nonperformance by the counterparty to the agreements. We 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 three months ended March 31, 2016 : IRLCs Forward MBS Trades Interest Rate Caps Beginning notional balance $ 278,317 $ 632,720 $ 2,110,000 Additions 1,460,093 1,100,531 25,000 Amortization — — (400,000 ) Maturities (1,017,006 ) (392,398 ) — Terminations (241,099 ) (514,460 ) (50,000 ) Ending notional balance $ 480,305 $ 826,393 $ 1,685,000 Fair value of derivative assets (liabilities) at: March 31, 2016 $ 13,545 $ (5,291 ) $ 570 December 31, 2015 $ 6,080 $ 295 $ 2,042 Maturity Apr. 2016 - Jun. 2016 June 2016 Nov. 2016 - Dec. 2017 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 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 March 31, 2016 and the gains (losses) on all derivatives used in each of the identified hedging programs for the period then ended. None of the derivatives was designated as a hedge for accounting purposes at March 31, 2016 : Purpose Expiration Date Notional Amount Fair Value (1) Gains / (Losses) Consolidated Statements of Operations Caption Interest rate risk of borrowings Interest rate caps (2) Nov. 2016 - Dec. 2017 $ 1,685,000 $ 570 $ (1,391 ) Other, net Interest rate risk of mortgage loans held for sale and of IRLCs Forward MBS trades June 2016 826,393 (5,291 ) (13,202 ) Gain on loans held for sale, net IRLCs Apr. 2016 - Jun. 2016 480,305 13,545 7,465 Gain on loans held for sale, net Total derivatives $ 8,824 $ (7,128 ) (1) Derivatives are reported at fair value in Other assets or in Other liabilities on our Unaudited Consolidated Balance Sheets. (2) To hedge the effect of changes in 1ML on advance funding facilities. Included in Accumulated other comprehensive loss (AOCL) at March 31, 2016 and 2015 , respectively, were $1.6 million and $8.3 million of deferred unrealized losses, before taxes of $0.1 million and $0.5 million , respectively, on interest rate swaps that we designated as cash flow hedges. Changes in AOCL during the three months ended March 31 were as follows: 2016 2015 Beginning balance $ 1,763 $ 8,413 Losses on terminated hedging relationships amortized to earnings (105 ) (443 ) Decrease in deferred taxes on accumulated losses on cash flow hedges — 25 Decrease in accumulated losses on cash flow hedges, net of taxes (105 ) (418 ) Ending balance $ 1,658 $ 7,995 As of March 31, 2016 , amortization of accumulated losses on cash flow hedges from AOCL to Other income (expense), net is projected to be $0.3 million during the next twelve months. To the extent we sell the MSRs to which the accumulated losses on cash flow hedges applied, a proportionate amount of the remaining unamortized accumulated losses associated with the MSRs sold is recognized in earnings at that time. Other income (expense), net, includes the following related to derivative financial instruments for the three months ended March 31: 2016 2015 Losses on economic hedges $ (1,391 ) $ (710 ) Write-off of losses in AOCL for a discontinued hedge relationship (105 ) (443 ) $ (1,496 ) $ (1,153 ) |
Interest Expense
Interest Expense | 3 Months Ended |
Mar. 31, 2016 | |
Other Income and Expenses [Abstract] | |
Interest Expense | Note 14 – Interest Expense The following table presents the components of interest expense for the three months ended March 31: 2016 2015 Financing liabilities (1) (2) $ 67,707 $ 73,824 Match funded liabilities 18,174 14,280 Other secured borrowings 12,713 22,916 6.625% Senior unsecured notes 6,208 6,129 Other 1,287 2,247 $ 106,089 $ 119,396 (1) Includes interest expense related to financing liabilities recorded in connection with the NRZ/HLSS Transactions as indicated in the table below. 2016 2015 Servicing fees collected on behalf of NRZ/HLSS $ 162,129 $ 180,297 Less: Subservicing fee retained by Ocwen 84,370 91,214 Net servicing fees remitted to NRZ/HLSS 77,759 89,083 Less: Reduction in financing liability 18,201 17,723 Interest expense on NRZ/HLSS financing liability $ 59,558 $ 71,360 The reduction in the financing liability 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 $6.2 million of fees incurred during the three months ended March 31, 2016 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. |
Basic and Diluted Earnings per
Basic and Diluted Earnings per Share | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Earnings per Share | Note 15 – Basic and Diluted Earnings per Share Basic earnings per share excludes common stock equivalents and is calculated by dividing net income attributable to Ocwen common stockholders by the weighted average number of common shares outstanding during the year. We calculate diluted earnings per share by dividing net income attributable to Ocwen by the weighted average number of common shares outstanding, including the potential dilutive common shares related to outstanding stock options and restricted stock awards. The following is a reconciliation of the calculation of basic earnings per share to diluted earnings per share for the three months ended March 31: 2016 2015 Basic earnings per share: Net income (loss) attributable to Ocwen common stockholders $ (111,331 ) $ 34,355 Weighted average shares of common stock 124,093,339 125,272,228 Basic earnings (loss) per share $ (0.90 ) $ 0.27 Diluted earnings (loss) per share (1): Net income (loss) attributable to Ocwen common stockholders $ (111,331 ) $ 34,355 Weighted average shares of common stock 124,093,339 125,272,228 Effect of dilutive elements (1): Stock options — 1,725,280 Common stock awards — 2,154 Dilutive weighted average shares of common stock 124,093,339 126,999,662 Diluted earnings (loss) per share $ (0.90 ) $ 0.27 Stock options and common stock awards excluded from the computation of diluted earnings per share: Anti-dilutive (2) 6,985,914 2,010,902 Market-based (3) 2,080,938 851,263 (1) For the three months ended March 31, 2016, we have excluded the effect of 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) These stock options were anti-dilutive because their exercise price was greater than the average market price of our stock. (3) Shares that are issuable upon the achievement of certain performance criteria related to Ocwen’s stock price. |
Business Segment Reporting
Business Segment Reporting | 3 Months Ended |
Mar. 31, 2016 | |
Segment Reporting [Abstract] | |
Business Segment Reporting | Note 16 – Business Segment Reporting Our business segments reflect the internal reporting that we use to evaluate operating performance of services and to assess the allocation of our resources. A brief description of our current business segments is as follows: Servicing. This segment is primarily comprised of our core residential servicing business. We provide residential and commercial mortgage loan servicing, special servicing and asset management services. We earn fees for providing these services to owners of the mortgage loans and foreclosed real estate. In most cases, we provide these services either because we purchased the MSRs from the owner of the mortgage, retained the MSRs on the sale of residential mortgage loans or because we entered into a subservicing or special servicing agreement with the entity that owns the MSR. Our residential servicing portfolio includes conventional, government-insured and non-Agency loans. Non-Agency loans include subprime loans, which represent residential loans that generally did not qualify under GSE guidelines or have subsequently become delinquent. Lending. The Lending segment is focused on originating and purchasing conventional and government-insured residential forward and reverse mortgage loans mainly through our correspondent lending arrangements, broker relationships and directly with mortgage customers. The loans are typically sold shortly after origination into a liquid market on a servicing retained basis. Corporate Items and Other. Corporate Items and Other includes revenues and expenses that are not directly related to other reportable segments, business activities that are individually insignificant, interest income on short-term investments of cash, interest expense on corporate debt and certain corporate expenses. 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. We allocate interest income and expense to each business segment for funds raised or for funding of investments made, including interest earned on cash balances and short-term investments and interest incurred on corporate debt. We also allocate expenses generated by corporate support services to each business segment. Financial information for our segments is as follows: Servicing Lending Corporate Items and Other Corporate Eliminations Business Segments Consolidated Results of Operations Three months ended March 31, 2016 Revenue (1) $ 307,427 $ 23,285 $ 45 $ — $ 330,757 Expenses (1) (2) 276,896 21,799 29,962 — 328,657 Other income (expense): Interest income (147 ) 3,611 726 — 4,190 Interest expense (96,474 ) (3,448 ) (6,167 ) — (106,089 ) Gain on sale of mortgage servicing rights, net 1,175 — — — 1,175 Other (1) (3,343 ) 351 (509 ) — (3,501 ) Other income (expense), net (98,789 ) 514 (5,950 ) — (104,225 ) Income (loss) before income taxes $ (68,258 ) $ 2,000 $ (35,867 ) $ — $ (102,125 ) Three months ended March 31, 2015 Revenue (1) $ 471,125 $ 37,746 $ 1,608 $ (35 ) $ 510,444 Expenses (1) (2) 337,911 23,785 16,697 (35 ) 378,358 Other income (expense): Interest income 1,371 3,596 608 — 5,575 Interest expense (110,629 ) (2,639 ) (6,128 ) — (119,396 ) Gain on sale of mortgage servicing rights, net 26,406 — — — 26,406 Other (1) (3,640 ) 1,065 733 — (1,842 ) Other income (expense), net (86,492 ) 2,022 (4,787 ) — (89,257 ) Income (loss) before income taxes $ 46,722 $ 15,983 $ (19,876 ) $ — $ 42,829 Servicing Lending Corporate Items and Other Corporate Eliminations Business Segments Consolidated Total Assets March 31, 2016 $ 3,807,685 $ 3,116,531 $ 482,894 $ — $ 7,407,110 December 31, 2015 $ 4,089,064 $ 2,811,154 $ 480,090 $ — $ 7,380,308 March 31, 2015 $ 5,706,301 $ 2,165,742 $ 481,919 $ — $ 8,353,962 (1) Intersegment billings for services rendered to other segments are recorded as revenues, as contra-expense or as other income, depending on the type of service that is rendered. (2) Depreciation and amortization expense are as follows: Servicing Lending Corporate Items and Other Business Segments Consolidated For the three months ended March 31, 2016 Depreciation expense $ 1,135 $ 72 $ 3,832 $ 5,039 Amortization of mortgage servicing rights 12,725 81 — 12,806 Amortization of debt discount 206 — — 206 Amortization of debt issuance costs 2,933 — 344 3,277 For the three months ended March 31, 2015 Depreciation expense $ 529 $ 104 $ 3,711 $ 4,344 Amortization of mortgage servicing rights 38,405 89 — 38,494 Amortization of debt discount 356 — — 356 Amortization of debt issuance costs 3,423 — 332 3,755 |
Regulatory Requirements
Regulatory Requirements | 3 Months Ended |
Mar. 31, 2016 | |
Brokers and Dealers [Abstract] | |
Regulatory Requirements | Note 17 – 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 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 and actions to recover incentive and other payments made by governmental entities, (v) breaches of covenants and representations under our servicing, debt or other agreements, (vi) damage to our reputation, (vii) inability to raise capital or (viii) 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 several 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. 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 net worth 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 net worth requirements is based on the outstanding UPB of the owned and subserviced portfolio of OLS and was $513.1 million at March 31, 2016 . We believe our licensed subsidiaries are currently in compliance with all of their capital requirements. OLS, Homeward and Liberty are also parties to seller/servicer agreements and/or subject to guidelines and regulations (collectively, seller/servicer obligations) with one or more of the GSEs, HUD, FHA, VA and Ginnie Mae. These seller/servicer obligations include financial covenants that include capital requirements related to tangible net worth, as defined by the applicable agency, an obligation to provide audited consolidated financial statements within 90 days of the applicable entity’s fiscal year end as well as extensive requirements regarding servicing, selling and other matters. To the extent that these requirements are not met or waived, the applicable agency may, at its option, utilize a variety of remedies including requirements to deposit funds as security for our obligations, sanctions, suspension or even termination of approved seller/servicer status, which would prohibit future originations or securitizations of forward or reverse mortgage loans or servicing for the applicable agency. To date, none of these counterparties has communicated any material sanction, suspension or prohibition in connection with our seller/servicer obligations. We believe we were in compliance with the related net worth requirements at March 31, 2016 . 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 | 3 Months Ended |
Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments | Note 18 — Commitments Unfunded Lending Commitments We have originated floating-rate reverse mortgage loans under which the borrowers have additional borrowing capacity of $986.5 million at March 31, 2016 . This additional borrowing capacity is available on a scheduled or unscheduled payment basis. We also had short-term commitments to lend $471.2 million and $9.2 million in connection with our forward and reverse mortgage loan interest rate lock commitments, respectively, outstanding at March 31, 2016 . Long Term Contracts Our business is currently dependent on many of the services and products provided by Altisource Portfolio Solutions, S.A. (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. 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. 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 technology and facilities management services. As of January 2016, Altisource no longer provides facility management services to Ocwen. 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 Altisource Residential Corporation (Residential), pursuant to which Ocwen will service residential mortgage loans acquired by Residential and provide loan modification, assisted deed-in-lieu, assisted deed-for-lease and other loss mitigation programs. |
Contingencies
Contingencies | 3 Months Ended |
Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Note 19 – 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 $39.5 million as of March 31, 2016 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 March 31, 2016 . Following our announcement in August 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 in December 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). In September 2015, the presiding federal court dismissed both of 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 made by the United States on OLS- or Homeward-serviced loans and (ii) statutory penalties of between $5,500 and $11,000 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 June 27, 2016 and trial in the Homeward action is scheduled for November 14, 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 and the appointment of an independent Operations Monitor. 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 California Department of Business Oversight (CA DBO) relating to Ocwen’s failure to produce certain information and documents during a routine licensing examination, which resulted in the CA DBO withdrawing its notice of hearing to suspend OLS’ license in California. OLS and the CA DBO entered into a Consent Order pursuant to the California Residential Mortgage Lending Act (the CA Consent Order) with the CA DBO to reflect such settlement. The CA Consent Order addresses and resolves the examination disputes between the CA DBO and OLS, and does not involve any accusation or admission of wrongdoing with regard to OLS’ servicing practices. Under the terms of the CA Consent Order, OLS paid the CA DBO a penalty of $2.5 million plus costs associated with the examination. 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 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. 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, in February 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 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 incurred 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. 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 several 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 and actions to recover incentive and other payments made by governmental entities, (v) breaches of covenants and representations under our servicing, debt or other agreements, (vi) damage to our reputation, (vii) inability to raise capital and (viii) inability to execute on our business strategy. Any of these occurrences could increase our operating expenses and reduce our revenues, hamper our ability to grow or otherwise materially and adversely affect our business, reputation, financial condition and results of operations. Loan Put-Back and Related Contingencies We have exposure to origination representation, warranty and indemnification obligations because of our lending, sales and securitization activities and in connection with our servicing practices. At March 31, 2016 and March 31, 2015 , we had outstanding representation and warranty repurchase demands of $81.9 million UPB ( 408 loans) and $134.6 million ( 696 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 three months ended March 31: 2016 2015 Beginning balance $ 36,615 $ 132,918 Provision for representation and warranty obligations (840 ) (3,975 ) New production reserves 152 228 Charge-offs and other (1) (3,598 ) (9,989 ) Ending balance $ 32,329 $ 119,182 (1) Includes principal and interest losses realized in connection with repurchased loans, make-whole, indemnification and fee payments and settlements net of recoveries, if any. We believe that it is reasonably possible that losses beyond amounts currently recorded for potential representation and warranty obligations and other claims described above could occur, and such losses could have an adverse impact on our results of operations, financial condition or cash flows. However, based on currently available information, we are unable to estimate a range of reasonably possible losses above amounts that have been recorded at March 31, 2016 . Other OLS, on its own behalf and on behalf of various investors, has been engaged in a variety of activities to seek payments from mortgage insurers for unpaid claims, including claims where the mortgage insurers paid less than the full claim amount. Ocwen believes that many of the actions by mortgage insurers were in violation of the applicable insurance policies and insurance law. Ocwen is in the process of settlement discussions with certain mortgage insurers. In some cases, Ocwen has entered into tolling agreements, initiated arbitration or litigation, or taken other similar actions. While we expect the ultimate outcome to result in recovery of some unpaid mortgage insurance claims, we cannot quantify the likely amount at this time. |
Organization, Business Enviro27
Organization, Business Environment and Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in conformity with the instructions of the Securities and Exchange Commission (SEC) to Form 10-Q and SEC Regulation S-X, Article 10, Rule 10-01 for interim financial statements. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (GAAP) for complete financial statements. In our opinion, the accompanying unaudited consolidated financial statements contain all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation. The results of operations and other data for the three months ended March 31, 2016 are not necessarily indicative of the results that may be expected for any other interim period or for the year ending December 31, 2016 . The unaudited consolidated financial statements presented herein should be read in conjunction with the audited consolidated financial statements and related notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2015 . |
Reclassifications | Reclassifications As a result of our retrospective adoption on January 1, 2016 of FASB Accounting Standards Update (ASU) 2015-03, Interest—Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs , and ASU 2015-15, 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 , unamortized debt issuance costs that are not related to revolving line-of-credit arrangements have been reclassified from other assets to other secured borrowings and senior unsecured notes on the consolidated balance sheets, resulting in a reduction to the Company’s assets and liabilities of $23.5 million and $24.5 million at March 31, 2016 and December 31, 2015, respectively. |
Use of Estimates and Assumptions | Use of Estimates and Assumptions The preparation of financial statements in conformity with GAAP requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, the reported amounts of revenues and expenses during the reporting period and the related disclosures in the accompanying notes. Such estimates and assumptions include, but are not limited to, those that relate to fair value measurements, the provision for potential losses that may arise from litigation proceedings, and representation and warranty and other indemnification obligations. In developing estimates and assumptions, management uses all available information; however, actual results could materially differ from those estimates and assumptions. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards Leases (ASU 2016-02) In February 2016, the FASB issued ASU 2016-02 to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key qualitative and quantitative information about leasing arrangements. A lessee will be required to recognize assets and liabilities for leases with lease terms of more than 12 months, regardless of whether the lease is classified as a finance or operating lease. Additional disclosures will help investors and financial statement users better understand the amount, timing and uncertainty of cash flows arising from leases. ASU 2016-02 will be effective for us on January 1, 2019, with early application permitted. We are currently evaluating the effect of adopting this standard. Derivatives and Hedging: Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships (ASU 2016-05) In March 2016, the FASB issued ASU 2016-05 to clarify that a change in the counterparty to a derivative instrument that has been designated as a hedging instrument under FASB Accounting Standards Codification (ASC) Topic 815, Derivatives and Hedging , does not, in and of itself, require dedesignation of that hedging relationship provided that all other hedge accounting criteria continue to be met. ASU 2016-05 will be effective for us on January 1, 2017, with early adoption permitted, including adoption in an interim period. We do not anticipate that our adoption of this standard will have a material impact on our consolidated financial statements. Derivatives and Hedging: Contingent Put and Call Options in Debt Instruments (ASU 2016-06) In March 2016, the FASB issued ASU 2016-06 to clarify that in assessing whether embedded contingent put or call options that can accelerate the payment of principal on debt instruments are clearly and closely related to their debt hosts, an entity is required to apply only the four-step decision sequence in FASB ASC 815-15-25-42 (as amended by this ASU). An entity does not have to separately assess whether the event that triggers its ability to exercise the contingent option is itself indexed only to interest rates or credit risk. ASU 2016-06 will be effective for us on January 1, 2017, with early adoption permitted, including adoption in an interim period. We are currently evaluating the effect of adopting this standard. Investments - Equity Method and Joint Ventures: Simplifying the Transition to the Equity Method of Accounting (ASU 2016-07) In March 2016, the FASB issued ASU 2016-07 to simplify the transition to the equity method of accounting as part of its simplification initiative to reduce cost and complexity in accounting standards while maintaining or improving the usefulness of the information provided to the users of financial statements. This standard requires that an equity method investor add the cost of acquiring the additional interest in the investee to the current basis of the investor’s previously held interest and adopt the equity method of accounting as of the date the investment qualifies for equity method accounting, rather than adjusting the investment retroactively. This standard also requires that an entity that has an available-for-sale equity security that qualifies for the equity method of accounting recognize through earnings the unrealized holding gain or loss in accumulated other comprehensive income at the date the investment qualifies for use of the equity method. ASU 2016-07 will be effective for us on January 1, 2017, with early application permitted. We are currently evaluating the effect of adopting this standard. Revenue from Contracts with Customers: Principal versus Agent Considerations (ASU 2016-08) In March 2016, the FASB issued ASU 2016-08 to clarify the implementation guidance included in FASB ASC Topic 606, Revenue from Contracts with Customers , related to principal versus agent considerations and add illustrative examples to assist in the application of the guidance. When another party is involved in providing goods or services to a customer, an entity is required to determine whether the nature of its promise is that of a principal -- providing the specified good or service itself, or that of an agent -- arranging for that good or service to be provided by the other party. An entity is a principal if it controls the specified good or service before that good or service is transferred to a customer. ASU 2016-08 will be effective for us on January 1, 2018, with early application permitted. We are currently evaluating the effect of adopting this standard. Compensation - Stock Compensation: Improvements to Employee Shared-Based Payment Accounting (ASU 2016-09) In March 2016, the FASB issued ASU 2016-09 to improve the accounting for employee share-based payments. This standard simplifies several aspects of the accounting for share-based payment award transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows, as part of FASB’s simplification initiative to reduce cost and complexity in accounting standards while maintaining or improving the usefulness of the information provided to the users of financial statements. ASU 2016-09 will be effective for us on January 1, 2017, with early adoption permitted. We are currently evaluating the effect of adopting this standard. |
Securitizations and Variable 28
Securitizations and Variable Interest Entities (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Transfers and Servicing [Abstract] | |
Schedule of Cash Flows Related to Transfers Accounted for as Sales | The following table presents a summary of cash flows received from and paid to securitization trusts related to transfers accounted for as sales that were outstanding during the three months ended March 31: 2016 2015 Proceeds received from securitizations $ 1,009,264 $ 1,070,772 Servicing fees collected 3,124 347 Purchases of previously transferred assets, net of claims reimbursed (13 ) 500 $ 1,012,375 $ 1,071,619 |
Schedule of Assets That Relate to Continuing Involvement with Transferred Financial Assets with Servicing Rights and Maximum Exposure to Loss Including the Unpaid Principal Balance | The following table presents the carrying amounts of our assets that relate to our continuing involvement with forward loans that we have transferred with servicing rights retained as well as our maximum exposure to loss including the UPB of the transferred loans at the dates indicated: March 31, 2016 December 31, 2015 Carrying value of assets: Mortgage servicing rights, at amortized cost $ 57,553 $ 54,729 Mortgage servicing rights, at fair value 200 236 Advances and match funded advances 26,789 26,968 UPB of loans transferred 8,101,276 7,471,025 Maximum exposure to loss $ 8,185,818 $ 7,552,958 |
Fair Value (Tables)
Fair Value (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Schedule of Fair Value Assets and Liabilities | The carrying amounts and the estimated fair values of our financial instruments and certain of our nonfinancial assets measured at fair value on a recurring or non-recurring basis or disclosed, but not carried, at fair value are as follows at the dates indicated: March 31, 2016 December 31, 2015 Level Carrying Value Fair Value Carrying Value Fair Value Financial assets: Loans held for sale: Loans held for sale, at fair value (a) 2 $ 321,739 $ 321,739 $ 309,054 $ 309,054 Loans held for sale, at lower of cost or fair value (b) 3 87,070 87,070 104,992 104,992 Total Loans held for sale $ 408,809 $ 408,809 $ 414,046 $ 414,046 Loans held for investment - Reverse mortgages, at fair value (a) 3 $ 2,771,242 $ 2,771,242 $ 2,488,253 $ 2,488,253 Advances and match funded advances (c) 3 2,038,245 2,038,245 2,151,066 2,151,066 Receivables, net (c) 3 237,583 237,583 286,981 286,981 Mortgage-backed securities, at fair value (a) 3 8,386 8,386 7,985 7,985 Financial liabilities: Match funded liabilities (c) 3 $ 1,537,096 $ 1,537,611 $ 1,584,049 $ 1,581,786 Financing liabilities: HMBS-related borrowings, at fair value (a) 3 $ 2,648,100 $ 2,648,100 $ 2,391,362 $ 2,391,362 Financing liability - MSRs pledged (a) 3 523,503 523,503 541,704 541,704 Other (c) 3 148,043 106,857 156,189 131,940 Total Financing liabilities $ 3,319,646 $ 3,278,460 $ 3,089,255 $ 3,065,006 Other secured borrowings: Senior secured term loan (c)(d) 2 $ 359,428 $ 382,508 $ 377,091 $ 397,956 Other (c) 3 359,402 359,402 385,320 385,320 Total Other secured borrowings $ 718,830 $ 741,910 $ 762,411 $ 783,276 Senior unsecured notes (c)(d) 2 $ 345,847 $ 294,350 $ 345,511 $ 318,063 March 31, 2016 December 31, 2015 Level Carrying Value Fair Value Carrying Value Fair Value Derivative financial instruments assets (liabilities) (a): Interest rate lock commitments 2 $ 13,545 $ 13,545 $ 6,080 $ 6,080 Forward mortgage-backed securities trades 1 (5,291 ) (5,291 ) 295 295 Interest rate caps 3 570 570 2,042 2,042 Mortgage servicing rights: Mortgage servicing rights, at fair value (a) 3 $ 732,174 $ 732,174 $ 761,190 $ 761,190 Mortgage servicing rights, at amortized cost (c)(e) 3 346,039 390,970 377,379 461,555 Total Mortgage servicing rights $ 1,078,213 $ 1,123,144 $ 1,138,569 $ 1,222,745 (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 carrying values are net of unamortized debt issuance costs and discount. See Note 11 – Borrowings for additional information . (e) The net carrying value at March 31, 2016 and December 31, 2015 is net of the valuation allowance on the impaired government-insured stratum of our amortization method MSRs, which is measured at fair value on a non-recurring basis. Before applying the valuation allowance of $47.3 million , the carrying value of this stratum at March 31, 2016 was $146.7 million . At December 31, 2015 , the carrying value of this stratum was $146.5 million before applying the valuation allowance of $17.3 million . |
Schedule of Reconciliation of Changes in Fair Value of Level 3 Assets and Liabilities | The following tables present a reconciliation of the changes in fair value of Level 3 assets and liabilities that we measure at fair value on a recurring basis: Loans Held for Investment - Reverse Mortgages HMBS-Related Borrowings Mortgage-Backed Securities Financing Liability - MSRs Pledged Derivatives MSRs Total Three months ended March 31, 2016 Beginning balance $ 2,488,253 $ (2,391,362 ) $ 7,985 $ (541,704 ) $ 2,042 $ 761,190 $ 326,404 Purchases, issuances, sales and settlements: Purchases — — — — — 419 419 Issuances 304,058 (233,174 ) — — — — 70,884 Transfer from MSRs carried at amortized cost — — — — — — — Sales — — — — — (142 ) (142 ) Settlements (1) (87,237 ) 39,654 — 18,201 (81 ) — (29,463 ) 216,821 (193,520 ) — 18,201 (81 ) 277 41,698 Total realized and unrealized gains and (losses) (2): Included in earnings 66,168 (63,218 ) 401 — (1,391 ) (29,293 ) (27,333 ) Included in Other comprehensive income — — — — — — — 66,168 (63,218 ) 401 — (1,391 ) (29,293 ) (27,333 ) Transfers in and / or out of Level 3 — — — — — — — Ending balance $ 2,771,242 $ (2,648,100 ) $ 8,386 $ (523,503 ) $ 570 $ 732,174 $ 340,769 Loans Held for Investment - Reverse Mortgages HMBS-Related Borrowings Mortgage-Backed Securities Financing Liability - MSRs Pledged Derivatives MSRs Total Three months ended March 31, 2015 Beginning balance $ 1,550,141 $ (1,444,252 ) $ 7,335 $ (614,441 ) $ 567 $ 93,901 $ (406,749 ) Purchases, issuances, sales and settlements: Purchases — — — — — — — Issuances 235,271 (238,615 ) — — — (1,169 ) (4,513 ) Transfer from MSRs carried at amortized cost — — — — — 839,157 839,157 Sales — — — — (917 ) (917 ) Settlements (1) (26,233 ) 25,985 — 19,946 — — 19,698 209,038 (212,630 ) — 19,946 — 837,071 853,425 Total realized and unrealized gains and (losses) (2): Included in earnings 48,962 (45,515 ) 366 — (364 ) (33,175 ) (29,726 ) Included in Other comprehensive income — — — — — — — 48,962 (45,515 ) 366 — (364 ) (33,175 ) (29,726 ) Transfers in and / or out of Level 3 — — — — — — — Ending balance $ 1,808,141 $ (1,702,397 ) $ 7,701 $ (594,495 ) $ 203 $ 897,797 $ 416,950 (1) In the event of a transfer to another party of servicing related to Rights to MSRs, we are required to reimburse NRZ at predetermined contractual rates for the loss of servicing revenues. Settlements for Financing liability - MSRs pledged for the three months ended March 31, 2015 includes $2.2 million of such reimbursements. (2) Total losses attributable to derivative financial instruments still held at March 31, 2016 and March 31, 2015 were $1.5 million and $0.4 million for the three months ended March 31, 2016 and 2015 , respectively. Total losses attributable to MSRs still held at March 31, 2016 and March 31, 2015 were $29.1 million and $31.7 million for the three months ended March 31, 2016 and 2015 , respectively. |
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 March 31, 2016 valuation include: Weighted average prepayment speed 12.11 % Weighted average delinquency rate 12.32 % Advance financing cost 5-year swap Interest rate for computing float earnings 5-year swap Weighted average discount rate 9.33 % Weighted average cost to service (in dollars) $ 111 |
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 March 31, 2016 valuation include: Agency Non Agency Weighted average prepayment speed 13.27 % 16.83 % Weighted average delinquency rate 0.99 % 27.42 % Advance financing cost 5-year swap 1ML plus 3.5% Interest rate for computing float earnings 5-year swap 1ML Weighted average discount rate 9.00 % 14.68 % Weighted average cost to service (in dollars) $ 74 $ 313 |
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 March 31, 2016 include: Weighted average prepayment speed 17.35 % Weighted average delinquency rate 29.21 % Advance financing cost 1 ML plus 3.5% Interest rate for computing float earnings 1ML Weighted average discount rate 14.54 % Weighted average cost to service (in dollars) $ 318 |
Sales of Advances and MSRs (Tab
Sales of Advances and MSRs (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Transfers and Servicing [Abstract] | |
Schedule of MSRs and Advances Sold | The following table provides a summary of the MSRs and advances sold during the three months ended March 31: 2016 2015 MSRs Advances and Match Funded Advances MSRs Advances and Match Funded Advances Sales price of assets sold and adjustments: Accounted for as a sale $ 1,162 $ 261 $ 97,530 $ 1,765 Amount due from purchaser at March 31 (1) — — (48,065 ) — Amounts received from purchaser for items outstanding at the end of the previous year 14,143 40,742 — — Total net cash received $ 15,305 $ 41,003 $ 49,465 $ 1,765 (1) There were no amounts due from purchaser at March 31, 2016 related to assets sold during the three months ended March 31, 2016 . The total amount due at March 31, 2016 on sales of MSRs and advances, which consists only of amounts due on sales completed in 2015, is $39.7 million . |
Loans Held for Sale (Tables)
Loans Held for Sale (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Receivables [Abstract] | |
Schedule of Loans Held for Sale Fair Value | The following table summarizes the activity in the balance during the three months ended March 31: 2016 2015 Beginning balance $ 309,054 $ 401,120 Originations and purchases 789,180 922,254 Proceeds from sales (783,187 ) (990,634 ) Principal collections (3,280 ) (2,667 ) Gain on sale of loans 7,646 15,265 Other (1) 2,326 (5,830 ) Ending balance $ 321,739 $ 339,508 (1) Other includes the increase (decrease) in fair value of $1.8 million and $(6.9) million for the three months ended March 31, 2016 and 2015 , respectively. |
Schedule of Loans Held for Sale at Lower Cost or Fair Value, Activity | The following table summarizes the activity in the net balance during the three months ended March 31: 2016 2015 Beginning balance $ 104,992 $ 87,492 Purchases 421,896 113,896 Proceeds from sales (372,583 ) (140,948 ) Principal collections (6,453 ) (13,863 ) Transfers to accounts receivable (61,212 ) (16,572 ) Transfers to real estate owned (1,224 ) (2,296 ) Gain on sale of loans 5,010 17,271 Decrease (increase) in valuation allowance (3,335 ) 19,728 Other (21 ) 3,781 Ending balance (1) $ 87,070 $ 68,489 (1) At March 31, 2016 and March 31, 2015 , the balances include $55.5 million and $43.9 million , respectively, of loans that we were required to repurchase from Ginnie Mae guaranteed securitizations as part of our servicing obligations. Repurchased loans are modified or otherwise remediated through loss mitigation activities or are reclassified to receivables. |
Schedule of Changes in Valuation Allowance | The change in the valuation allowance during the three months ended March 31 is as follows: 2016 2015 Beginning balance $ 14,658 $ 49,676 Provision 2,597 1,104 Transfer from liability for indemnification obligations 1,030 664 Sales of loans — (22,488 ) Other (292 ) 992 Ending balance $ 17,993 $ 29,948 |
Schedule of Gains on Loans Held for Sale, Net | The following table summarizes the activity in Gain on loans held for sale, net, during the three months ended March 31: 2016 2015 Gain on sales of loans $ 17,939 $ 51,400 Change in fair value of IRLCs 7,465 (2,233 ) Change in fair value of loans held for sale 3,521 (4,008 ) Loss on economic hedge instruments (13,202 ) (427 ) Other (151 ) (228 ) $ 15,572 $ 44,504 |
Advances (Tables)
Advances (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Advances [Abstract] | |
Schedule of Advances Paid on Behalf of Borrowers or on Foreclosed Properties | Advances, net, which represent payments made on behalf of borrowers or on foreclosed properties, consisted of the following at the dates indicated: March 31, 2016 December 31, 2015 Principal and interest $ 58,290 $ 81,681 Taxes and insurance 233,202 278,487 Foreclosures, bankruptcy and other 68,379 126,031 359,871 486,199 Allowance for losses (42,523 ) (41,901 ) $ 317,348 $ 444,298 |
Schedule of Activity in Advances | The following table summarizes the activity in net advances for the three months ended March 31: 2016 2015 Beginning balance $ 444,298 $ 893,914 Sales of advances (261 ) (1,765 ) New advances (collections of advances), net (126,067 ) 52,217 Increase in allowance for losses (622 ) (1,828 ) Ending balance $ 317,348 $ 942,538 |
Schedule of Change in Allowance for Losses | The change in the allowance for losses during the three months ended March 31 is as follows: 2016 2015 Beginning balance $ 41,901 $ 70,034 Provision 3,483 4,960 Charge-offs and other (2,861 ) (3,132 ) Ending balance $ 42,523 $ 71,862 |
Match Funded Advances (Tables)
Match Funded Advances (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Transfers and Servicing [Abstract] | |
Schedule of Match Funded Advances on Residential Loans | Match funded advances on residential loans we service for others are comprised of the following at the dates indicated: March 31, 2016 December 31, 2015 Principal and interest $ 879,242 $ 948,376 Taxes and insurance 620,795 608,404 Foreclosures, bankruptcy, real estate and other 220,860 149,988 $ 1,720,897 $ 1,706,768 |
Schedule of Activity In Match Funded Advances | The following table summarizes the activity in match funded advances for the three months ended March 31: 2016 2015 Beginning balance $ 1,706,768 $ 2,409,442 New advances (collections of pledged advances), net 14,129 (156,475 ) Ending balance $ 1,720,897 $ 2,252,967 |
Mortgage Servicing (Tables)
Mortgage Servicing (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Transfers and Servicing [Abstract] | |
Schedule of Activity Related to MSRs - Amortization Method | The following table summarizes the activity in the carrying value of amortization method servicing assets for the three months ended March 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. 2016 2015 Beginning balance $ 377,379 $ 1,820,091 Fair value election - transfer of MSRs carried at fair value (1) — (787,142 ) Additions recognized in connection with asset acquisitions 4,263 3,267 Additions recognized on the sale of mortgage loans 7,156 8,528 Sales — (65,627 ) 388,798 979,117 Amortization (12,806 ) (38,494 ) Increase in impairment valuation allowance (2) (29,953 ) (17,769 ) Ending balance $ 346,039 $ 922,854 Estimated fair value at end of period $ 390,970 $ 1,064,134 (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 $9.2 million ) to retained earnings as of January 1, 2015 to reflect the excess of the fair value of these MSRs over their carrying amount. At December 31, 2014, the UPB of the loans related to the non-Agency MSRs for which the fair value election was made was $195.3 billion . (2) Impairment of MSRs is recognized in Servicing and origination expense in the Unaudited Consolidated Statements of Operations. |
Schedule of Activity Related to MSRs - Fair Value Measurement Method | The following table summarizes the activity related to fair value servicing assets for the three months ended March 31: 2016 2015 Agency Non-Agency Total Agency Non-Agency Total Beginning balance $ 15,071 $ 746,119 $ 761,190 $ 93,901 $ — $ 93,901 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 — (142 ) (142 ) — (947 ) (947 ) Servicing transfers and adjustments — 419 419 — (1,139 ) (1,139 ) Changes in fair value (1): Changes in valuation inputs or other assumptions (2,709 ) (3,671 ) (6,380 ) (6,110 ) — (6,110 ) Realization of expected future cash flows and other changes (351 ) (22,562 ) (22,913 ) (3,276 ) (23,789 ) (27,065 ) Ending balance $ 12,011 $ 720,163 $ 732,174 $ 84,515 $ 813,282 $ 897,797 (1) Changes in fair value are recognized in Servicing and origination expense in the Unaudited Consolidated Statements of Operations. |
Schedule of Estimated Change in Fair Value of MSRs | The following table summarizes the estimated change in the value of the MSRs that we carry at fair value as of March 31, 2016 given hypothetical shifts in lifetime prepayments and yield assumptions: Adverse change in fair value 10% 20% Weighted average prepayment speeds $ (77,665 ) $ (150,075 ) Discount rate (option-adjusted spread) $ (17,894 ) $ (34,728 ) |
Schedule of Composition of Servicing and Subservicing Portfolios by Type of Property Serviced | The following table presents the composition of our primary servicing and subservicing portfolios by type of property serviced as measured by UPB. The servicing portfolio represents loans for which we own the servicing rights while subservicing represents all other loans. The UPB of assets serviced for others are not included on our Unaudited Consolidated Balance Sheets. Residential Commercial Total UPB at March 31, 2016 Servicing $ 223,731,371 $ — $ 223,731,371 Subservicing 13,349,665 136,473 13,486,138 $ 237,081,036 $ 136,473 $ 237,217,509 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 March 31, 2015 Servicing $ 337,125,187 $ — $ 337,125,187 Subservicing 45,088,815 161,887 45,250,702 $ 382,214,002 $ 161,887 $ 382,375,889 |
Schedule of Components of Servicing and Subservicing Fees | The following table presents the components of servicing and subservicing fees for the three months ended March 31: 2016 2015 Loan servicing and subservicing fees: Servicing $ 238,638 $ 332,201 Subservicing 7,239 18,341 245,877 350,542 Home Affordable Modification Program (HAMP) fees 22,618 35,176 Late charges 18,603 24,122 Loan collection fees 7,129 9,563 Other 3,269 27,138 $ 297,496 $ 446,541 |
Receivables (Tables)
Receivables (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Receivables [Abstract] | |
Schedule of Receivables | Receivables, net consisted of the following at the dates indicated: March 31, 2016 December 31, 2015 Servicing: Amount due on sales of mortgage servicing rights and advances $ 39,744 $ 94,629 Government-insured loan claims (1) 67,950 71,405 Due from custodial accounts 20,798 13,800 Reimbursable expenses 28,400 29,856 Other servicing receivables 48,195 32,879 205,087 242,569 Income taxes receivable 50,384 53,519 Other receivables 20,882 29,818 276,353 325,906 Allowance for losses (1) (38,770 ) (38,925 ) $ 237,583 $ 286,981 (1) At March 31, 2016 and December 31, 2015 , 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 March 31, 2016 and December 31, 2015 were $21.5 million and $20.6 million , respectively. |
Other Assets (Tables)
Other Assets (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Other Assets [Abstract] | |
Schedule of Other Assets | Other assets consisted of the following at the dates indicated: March 31, 2016 December 31, 2015 Contingent loan repurchase asset (1) $ 316,002 $ 346,984 Prepaid expenses (2) 58,992 69,805 Debt service accounts (3) 56,946 87,328 Real estate 18,607 20,489 Derivatives, at fair value 14,115 6,367 Prepaid lender fees and debt issuance costs, net 14,903 19,496 Prepaid income taxes 10,910 11,749 Mortgage backed securities, at fair value 8,386 7,985 Other 21,321 16,292 $ 520,182 $ 586,495 (1) In connection with the Ginnie Mae early buy-out (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) 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. Prepaid expenses at March 31, 2016 and December 31, 2015 includes the remaining balance of $39.3 million and $41.3 million , respectively. (3) 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 to provide for possible shortfalls in the funds available to pay certain expenses and interest, as well as amounts set aside as required by our warehouse facilities as security for our obligations under the related agreements. The funds are held in interest earning accounts and those amounts related to match funded facilities are held in the name of the SPE created in connection with the facility. |
Borrowings (Tables)
Borrowings (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Match Funded Liabilities | Match funded liabilities are comprised of the following at the dates indicated: Borrowing Type Interest Rate Maturity (1) Amortization Date (1) Available Borrowing Capacity (2) March 31, 2016 December 31, 2015 Advance Receivables Backed Notes - Series 2014-VF3, 1-Month LIBOR (1ML)(3) + 235 bps (4) Sep. 2046 Sep. 2016 $ 47,741 $ 113,944 $ 132,651 Advance Receivables Backed Notes - Series 2014-VF3, 1ML + 300 bps (4) Sep. 2046 Sep. 2016 2,172 5,452 6,330 Advance Receivables Backed Notes - Series 2014-VF3, 1ML + 425 bps (4) Sep. 2046 Sep. 2016 2,426 6,009 6,977 Borrowing Type Interest Rate Maturity (1) Amortization Date (1) Available Borrowing Capacity (2) March 31, 2016 December 31, 2015 Advance Receivables Backed Notes - Series 2014-VF3, 1ML + 575 bps (4) Sep. 2046 Sep. 2016 6,404 15,852 18,427 Advance Receivables Backed Notes - Series 2014-VF4, 1ML + 235 bps (4) Sep. 2046 Sep. 2016 47,741 113,944 132,651 Advance Receivables Backed Notes - Series 2014-VF4, 1ML + 300 bps (4) Sep. 2046 Sep. 2016 2,172 5,452 6,330 Advance Receivables Backed Notes - Series 2014-VF4, 1ML + 425 bps (4) Sep. 2046 Sep. 2016 2,426 6,009 6,977 Advance Receivables Backed Notes - Series 2014-VF4, 1ML + 575 bps (4) Sep. 2046 Sep. 2016 6,404 15,852 18,427 Advance Receivables Backed Notes - Series 2015-VF5, 1ML + 235 bps (4) Sep. 2046 Sep. 2016 47,742 113,943 132,652 Advance Receivables Backed Notes - Series 2015-VF5, 1ML + 300 bps (4) Sep. 2046 Sep. 2016 2,172 5,452 6,330 Advance Receivables Backed Notes - Series 2015-VF5, 1ML + 425 bps (4) Sep. 2046 Sep. 2016 2,426 6,009 6,977 Advance Receivables Backed Notes - Series 2015-VF5, 1ML + 575 bps (4) Sep. 2046 Sep. 2016 6,404 15,852 18,427 Advance Receivables Backed Notes - Series 2015-T1, 2.5365% Sep. 2046 Sep. 2016 — 244,809 244,809 Advance Receivables Backed Notes - Series 2015-T1, 3.0307% Sep. 2046 Sep. 2016 — 10,930 10,930 Advance Receivables Backed Notes - Series 2015-T1, 3.5240% Sep. 2046 Sep. 2016 — 12,011 12,011 Advance Receivables Backed Notes - Series 2015-T1, 4.1000% Sep. 2046 Sep. 2016 — 32,250 32,250 Advance Receivables Backed Notes - Series 2015-T2, 2.5320% Nov. 2046 Nov. 2016 — 161,973 161,973 Advance Receivables Backed Notes - Series 2015-T2, 3.3720% Nov. 2046 Nov. 2016 — 7,098 7,098 Advance Receivables Backed Notes - Series 2015-T2, 3.7660% Nov. 2046 Nov. 2016 — 8,113 8,113 Advance Receivables Backed Notes - Series 2015-T2, 4.2580% Nov. 2046 Nov. 2016 — 22,816 22,816 Advance Receivables Backed Notes - Series 2015-T3, 3.2110% Nov. 2047 Nov. 2017 — 310,195 310,195 Borrowing Type Interest Rate Maturity (1) Amortization Date (1) Available Borrowing Capacity (2) March 31, 2016 December 31, 2015 Advance Receivables Backed Notes - Series 2015-T3, 3.7040% Nov. 2047 Nov. 2017 — 17,695 17,695 Advance Receivables Backed Notes - Series 2015-T3, 4.1960% Nov. 2047 Nov. 2017 — 19,262 19,262 Advance Receivables Backed Notes - Series 2015-T3, 4.6870% Nov. 2047 Nov. 2017 — 52,848 52,848 Total Ocwen Master Advance Receivables Trust (OMART) 176,230 1,323,770 1,393,156 Advance Receivables Backed Notes, Series 2014-VF1, Cost of Funds + 270 bps Dec. 2046 Dec. 2016 — 58,221 31,343 Advance Receivables Backed Notes, Series 2014-VF1, Cost of Funds + 425 bps Dec. 2046 Dec. 2016 — 6,044 4,157 Advance Receivables Backed Notes, Series 2014-VF1, Cost of Funds + 470 bps Dec. 2046 Dec. 2016 — 6,783 4,564 Advance Receivables Backed Notes, Series 2014-VF1, Cost of Funds + 520 bps Dec. 2046 Dec. 2016 — 18,952 11,351 Total Ocwen Servicer Advance Receivables Trust III (OSART III) (6) — 90,000 51,415 Advance Receivables Backed Notes, Series 2015-VF1, 1ML + 212.5 bps Jun. 2046 Jun. 2016 29,242 100,323 112,882 Advance Receivables Backed Notes, Series 2015-VF1, 1ML + 300 bps Jun. 2046 Jun. 2016 3,087 10,637 12,268 Advance Receivables Backed Notes, Series 2015-VF1, 1ML + 350 bps Jun. 2046 Jun. 2016 1,906 5,134 5,951 Advance Receivables Backed Notes, Series 2015-VF1, 1ML + 425 bps Jun. 2046 Jun. 2016 2,439 7,232 8,377 Total Ocwen Freddie Advance Funding Facility (OFAF) (7) 36,674 123,326 139,478 $ 212,904 $ 1,537,096 $ 1,584,049 Weighted average interest rate 3.17 % 3.15 % (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 March 31, 2016 , none of the available borrowing capacity could be used based on the amount of eligible collateral that had been pledged. (3) 1-Month LIBOR was 0.44% and 0.43% at March 31, 2016 and December 31, 2015 , respectively. (4) There is a ceiling of 75 bps for 1 ML in determining the interest rate for these variable rate notes. (5) Under the terms of the agreement, we must continue to borrow the full amount of the Series 2015-T1, T2 and T3 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. (6) On March 31, 2016, the maximum borrowing under the OSART III facility was increased to $90.0 million . (7) On March 31, 2016, the combined borrowing capacity of the Series 2015-VF1 Notes was increased to $160.0 million . |
Schedule of Financing Liabilities | Financing liabilities are comprised of the following at the dates indicated: Borrowings Collateral Interest Rate Maturity March 31, 2016 December 31, 2015 Servicing: Financing liability – MSRs pledged MSRs (1) (1) $ 523,503 $ 541,704 Secured Notes, Ocwen Asset Servicing Income Series, Series 2014-1 (2) MSRs (2) Feb. 2028 93,217 96,546 Financing liability – Advances pledged (3) Advances on loans (3) (3) 54,826 59,643 671,546 697,893 Lending: HMBS-related borrowings (4) Loans held for investment 1ML + 248 bps (4) 2,648,100 2,391,362 $ 3,319,646 $ 3,089,255 (1) This financing liability arose in connection with the NRZ/HLSS Transactions and has no contractual maturity or repayment schedule. The balance of the liability is adjusted each reporting period to its fair value based on the present value of the estimated future cash flows underlying the related MSRs. (2) OASIS noteholders are entitled to receive a monthly payment amount equal to the sum of: (a) the designated servicing fee amount ( 21 basis points of the UPB of the reference pool of Freddie Mac mortgages); (b) any termination payment amounts; (c) any excess refinance amounts; and (d) the note redemption amounts, each as defined in the indenture supplement for the notes. The notes have a final stated maturity of February 2028. We accounted for this transaction as a financing. Monthly amortization of the liability is estimated using the proportion of monthly projected service fees on the underlying MSRs as a percentage of lifetime projected fees, adjusted for the term of the security. (3) Certain sales of advances in 2014 did not qualify for sales accounting treatment and were accounted for as a financing. (4) Represents amounts due to the holders of beneficial interests in Ginnie Mae guaranteed HMBS. The beneficial interests have no maturity dates, and the borrowings mature as the related loans are repaid. |
Schedule of Other Secured Borrowings | Other secured borrowings are comprised of the following at the dates indicated: Borrowings Collateral Interest Rate Maturity Available Borrowing Capacity March 31, 2016 December 31, 2015 Servicing: SSTL (1) (1) 1-Month Euro-dollar rate + 425 bps with a Eurodollar floor of 125 bps (1) Feb. 2018 $ — $ 379,895 $ 398,454 Repurchase agreement (2) Loans held for sale (LHFS) 1ML + 200 - 345 bps Sep. 2016 15,549 34,451 42,973 15,549 414,346 441,427 Lending: Master repurchase agreement (3) LHFS 1ML + 200 bps Aug. 2016 70,238 129,762 156,226 Participation agreement (4) LHFS N/A Apr. 2016 (4) — 28,824 49,897 Participation agreement (5) LHFS N/A Apr. 2016 (5) — 115,107 73,049 Mortgage warehouse agreement (6) LHFS (reverse mortgages) 1ML + 275 bps; floor of 350 bps May 2016 — — 63,175 Master repurchase agreement (7) LHFS (reverse mortgages) 1ML + 275 bps; 1ML floor of 25 bps Jan. 2017 48,742 51,258 — 118,980 324,951 342,347 134,529 739,297 783,774 Unamortized debt issuance costs - SSTL — (19,321 ) (20,012 ) Discount - SSTL — (1,146 ) (1,351 ) $ 134,529 $ 718,830 $ 762,411 Weighted average interest rate 4.46 % 4.38 % (1) The borrowings are secured by a first priority security interest in substantially all of the assets of Ocwen. Borrowings bear interest, at the election of Ocwen, at a rate per annum equal to either (a) the base rate (the greatest of (i) the prime rate in effect on such day, (ii) the federal funds rate in effect on such day plus 0.50% and (iii) the one-month Eurodollar rate (1-Month LIBOR)), plus a margin of 3.25% and subject to a base rate floor of 2.25% or (b) the one month Eurodollar rate, plus a margin of 4.25% and subject to a one month Eurodollar floor of 1.25% . To date we have elected option (b) to determine the interest rate. We entered into Amendment No. 5 to Senior Secured Term Loan Facility Agreement (the Amendment) effective as of March 28, 2016. The Amendment, among other things: • permanently removes the consolidated total debt to consolidated tangible net worth ratio, corporate leverage ratio and interest coverage ratio financial covenants; • maintains the loan-to-value ratio covenant at its current 40% level throughout the remaining term of the SSTL; • limits the repurchase of Ocwen’s common stock or options to an amount not to exceed the sum of (i) $20 million plus (ii) an amount equal to (x) $20 million times (y) the aggregate amount of prepayments on the SSTL made after March 28, 2016 divided by $50 million ; • limits the repurchase of Ocwen’s 6.625% Senior Notes (the Senior Unsecured Notes) due 2019 to an amount not to exceed the sum of (i) $30 million plus (ii) an amount equal to (x) $30 million times (y) the aggregate amount of prepayments on the SSTL made after March 28, 2016 divided by $50 million ; • requires that we make a prepayment on the SSTL in an amount equal to $6.3 million (for a total of $19.0 million ) on each of May 31, 2016, July 29, 2016 and September 30, 2016; and • provides for a fee payable to the consenting lenders equal to 1.0% of the aggregate amount of such consenting lenders’ SSTL loans outstanding. (2) The maximum borrowing under this facility is 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) 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 April 11, 2016, we negotiated an extension of this agreement to May 15, 2016 and reduced the maximum borrowing to $75.0 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 April 11, 2016, we negotiated an extension of this agreement to May 15, 2016 and increased the maximum borrowing to $175.0 million . (6) Borrowing capacity of $100.0 million under this facility is available at the discretion of the lender. (7) We entered into this agreement on January 5, 2016. The lender provides financing on a committed basis for $100.0 million . |
Other Liabilities (Tables)
Other Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Other Liabilities | Other liabilities were comprised of the following at the dates indicated: March 31, 2016 December 31, 2015 Contingent loan repurchase liability (1) $ 316,002 $ 346,984 Accrued expenses 178,046 188,856 Liability for uncertain tax positions 48,328 44,751 Liability for indemnification obligations 32,329 36,615 Payable to loan servicing and subservicing investors 26,290 15,941 Checks held for escheat 15,131 14,301 Accrued interest payable 9,496 3,667 Derivatives, at fair value 5,291 — Other 116,310 93,329 $ 747,223 $ 744,444 (1) In connection with the Ginnie Mae EBO Transactions, we have re-recognized certain loans on our consolidated balance sheets and establish a corresponding repurchase liability regardless of our intention to repurchase the loan. |
Derivative Financial Instrume39
Derivative Financial Instruments and Hedging Activities (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Changes in Notional Balance of Holdings of Derivatives | The following table summarizes the changes in the notional balances of our holdings of derivatives during the three months ended March 31, 2016 : IRLCs Forward MBS Trades Interest Rate Caps Beginning notional balance $ 278,317 $ 632,720 $ 2,110,000 Additions 1,460,093 1,100,531 25,000 Amortization — — (400,000 ) Maturities (1,017,006 ) (392,398 ) — Terminations (241,099 ) (514,460 ) (50,000 ) Ending notional balance $ 480,305 $ 826,393 $ 1,685,000 Fair value of derivative assets (liabilities) at: March 31, 2016 $ 13,545 $ (5,291 ) $ 570 December 31, 2015 $ 6,080 $ 295 $ 2,042 Maturity Apr. 2016 - Jun. 2016 June 2016 Nov. 2016 - Dec. 2017 |
Schedule of Gains (Losses) on Derivatives | The following summarizes our open derivative positions at March 31, 2016 and the gains (losses) on all derivatives used in each of the identified hedging programs for the period then ended. None of the derivatives was designated as a hedge for accounting purposes at March 31, 2016 : Purpose Expiration Date Notional Amount Fair Value (1) Gains / (Losses) Consolidated Statements of Operations Caption Interest rate risk of borrowings Interest rate caps (2) Nov. 2016 - Dec. 2017 $ 1,685,000 $ 570 $ (1,391 ) Other, net Interest rate risk of mortgage loans held for sale and of IRLCs Forward MBS trades June 2016 826,393 (5,291 ) (13,202 ) Gain on loans held for sale, net IRLCs Apr. 2016 - Jun. 2016 480,305 13,545 7,465 Gain on loans held for sale, net Total derivatives $ 8,824 $ (7,128 ) (1) Derivatives are reported at fair value in Other assets or in Other liabilities on our Unaudited Consolidated Balance Sheets. (2) To hedge the effect of changes in 1ML on advance funding facilities. |
Schedule of Changes in AOCL | Changes in AOCL during the three months ended March 31 were as follows: 2016 2015 Beginning balance $ 1,763 $ 8,413 Losses on terminated hedging relationships amortized to earnings (105 ) (443 ) Decrease in deferred taxes on accumulated losses on cash flow hedges — 25 Decrease in accumulated losses on cash flow hedges, net of taxes (105 ) (418 ) Ending balance $ 1,658 $ 7,995 |
Schedule of Other Income (Expense), Net Related to Derivative Financial Instruments | Other income (expense), net, includes the following related to derivative financial instruments for the three months ended March 31: 2016 2015 Losses on economic hedges $ (1,391 ) $ (710 ) Write-off of losses in AOCL for a discontinued hedge relationship (105 ) (443 ) $ (1,496 ) $ (1,153 ) |
Interest Expense (Tables)
Interest Expense (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Other Income and Expenses [Abstract] | |
Schedule of Components of Interest Expense | The following table presents the components of interest expense for the three months ended March 31: 2016 2015 Financing liabilities (1) (2) $ 67,707 $ 73,824 Match funded liabilities 18,174 14,280 Other secured borrowings 12,713 22,916 6.625% Senior unsecured notes 6,208 6,129 Other 1,287 2,247 $ 106,089 $ 119,396 (1) Includes interest expense related to financing liabilities recorded in connection with the NRZ/HLSS Transactions as indicated in the table below. 2016 2015 Servicing fees collected on behalf of NRZ/HLSS $ 162,129 $ 180,297 Less: Subservicing fee retained by Ocwen 84,370 91,214 Net servicing fees remitted to NRZ/HLSS 77,759 89,083 Less: Reduction in financing liability 18,201 17,723 Interest expense on NRZ/HLSS financing liability $ 59,558 $ 71,360 The reduction in the financing liability 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 $6.2 million of fees incurred during the three months ended March 31, 2016 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 Related Party Interest Expense | 2016 2015 Servicing fees collected on behalf of NRZ/HLSS $ 162,129 $ 180,297 Less: Subservicing fee retained by Ocwen 84,370 91,214 Net servicing fees remitted to NRZ/HLSS 77,759 89,083 Less: Reduction in financing liability 18,201 17,723 Interest expense on NRZ/HLSS financing liability $ 59,558 $ 71,360 |
Basic and Diluted Earnings pe41
Basic and Diluted Earnings per Share (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliation of Calculation of Basic Earnings per Share to Diluted Earnings per Share | The following is a reconciliation of the calculation of basic earnings per share to diluted earnings per share for the three months ended March 31: 2016 2015 Basic earnings per share: Net income (loss) attributable to Ocwen common stockholders $ (111,331 ) $ 34,355 Weighted average shares of common stock 124,093,339 125,272,228 Basic earnings (loss) per share $ (0.90 ) $ 0.27 Diluted earnings (loss) per share (1): Net income (loss) attributable to Ocwen common stockholders $ (111,331 ) $ 34,355 Weighted average shares of common stock 124,093,339 125,272,228 Effect of dilutive elements (1): Stock options — 1,725,280 Common stock awards — 2,154 Dilutive weighted average shares of common stock 124,093,339 126,999,662 Diluted earnings (loss) per share $ (0.90 ) $ 0.27 Stock options and common stock awards excluded from the computation of diluted earnings per share: Anti-dilutive (2) 6,985,914 2,010,902 Market-based (3) 2,080,938 851,263 (1) For the three months ended March 31, 2016, we have excluded the effect of 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) These stock options were anti-dilutive because their exercise price was greater than the average market price of our stock. (3) Shares that are issuable upon the achievement of certain performance criteria related to Ocwen’s stock price. |
Business Segment Reporting (Tab
Business Segment Reporting (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Segment Reporting Information [Line Items] | |
Schedule of Segment Reporting Information | Financial information for our segments is as follows: Servicing Lending Corporate Items and Other Corporate Eliminations Business Segments Consolidated Results of Operations Three months ended March 31, 2016 Revenue (1) $ 307,427 $ 23,285 $ 45 $ — $ 330,757 Expenses (1) (2) 276,896 21,799 29,962 — 328,657 Other income (expense): Interest income (147 ) 3,611 726 — 4,190 Interest expense (96,474 ) (3,448 ) (6,167 ) — (106,089 ) Gain on sale of mortgage servicing rights, net 1,175 — — — 1,175 Other (1) (3,343 ) 351 (509 ) — (3,501 ) Other income (expense), net (98,789 ) 514 (5,950 ) — (104,225 ) Income (loss) before income taxes $ (68,258 ) $ 2,000 $ (35,867 ) $ — $ (102,125 ) Three months ended March 31, 2015 Revenue (1) $ 471,125 $ 37,746 $ 1,608 $ (35 ) $ 510,444 Expenses (1) (2) 337,911 23,785 16,697 (35 ) 378,358 Other income (expense): Interest income 1,371 3,596 608 — 5,575 Interest expense (110,629 ) (2,639 ) (6,128 ) — (119,396 ) Gain on sale of mortgage servicing rights, net 26,406 — — — 26,406 Other (1) (3,640 ) 1,065 733 — (1,842 ) Other income (expense), net (86,492 ) 2,022 (4,787 ) — (89,257 ) Income (loss) before income taxes $ 46,722 $ 15,983 $ (19,876 ) $ — $ 42,829 Servicing Lending Corporate Items and Other Corporate Eliminations Business Segments Consolidated Total Assets March 31, 2016 $ 3,807,685 $ 3,116,531 $ 482,894 $ — $ 7,407,110 December 31, 2015 $ 4,089,064 $ 2,811,154 $ 480,090 $ — $ 7,380,308 March 31, 2015 $ 5,706,301 $ 2,165,742 $ 481,919 $ — $ 8,353,962 (1) Intersegment billings for services rendered to other segments are recorded as revenues, as contra-expense or as other income, depending on the type of service that is rendered. (2) Depreciation and amortization expense are as follows: Servicing Lending Corporate Items and Other Business Segments Consolidated For the three months ended March 31, 2016 Depreciation expense $ 1,135 $ 72 $ 3,832 $ 5,039 Amortization of mortgage servicing rights 12,725 81 — 12,806 Amortization of debt discount 206 — — 206 Amortization of debt issuance costs 2,933 — 344 3,277 For the three months ended March 31, 2015 Depreciation expense $ 529 $ 104 $ 3,711 $ 4,344 Amortization of mortgage servicing rights 38,405 89 — 38,494 Amortization of debt discount 356 — — 356 Amortization of debt issuance costs 3,423 — 332 3,755 |
Depreciation and Amortization [Member] | |
Segment Reporting Information [Line Items] | |
Schedule of Segment Reporting Information | Depreciation and amortization expense are as follows: Servicing Lending Corporate Items and Other Business Segments Consolidated For the three months ended March 31, 2016 Depreciation expense $ 1,135 $ 72 $ 3,832 $ 5,039 Amortization of mortgage servicing rights 12,725 81 — 12,806 Amortization of debt discount 206 — — 206 Amortization of debt issuance costs 2,933 — 344 3,277 For the three months ended March 31, 2015 Depreciation expense $ 529 $ 104 $ 3,711 $ 4,344 Amortization of mortgage servicing rights 38,405 89 — 38,494 Amortization of debt discount 356 — — 356 Amortization of debt issuance costs 3,423 — 332 3,755 |
Contingencies (Tables)
Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Indemnification Obligations | The following table presents the changes in our liability for representation and warranty obligations, compensatory fees for foreclosures that may ultimately exceed investor timelines and similar indemnification obligations for the three months ended March 31: 2016 2015 Beginning balance $ 36,615 $ 132,918 Provision for representation and warranty obligations (840 ) (3,975 ) New production reserves 152 228 Charge-offs and other (1) (3,598 ) (9,989 ) Ending balance $ 32,329 $ 119,182 (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. |
Organization, Business Enviro44
Organization, Business Environment and Basis of Presentation - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
UPB of MSRs sold | $ 132,700 | |
Periodic prepayment of SSTL | 6.3 | |
Unamortized debt issuance costs | $ 23.5 | $ 24.5 |
Securitizations and Variable 45
Securitizations and Variable Interest Entities - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Servicing Assets at Fair Value [Line Items] | |||
Average period to securitization | 30 days | ||
Percentage of loan transferred through securitization 60 days or more past due | 7.40% | 8.20% | |
Other secured borrowings | $ 3,319,646 | $ 3,089,255 | |
Home Equity Conversion Mortgages [Member] | |||
Servicing Assets at Fair Value [Line Items] | |||
Loans pledged as collateral | 2,800,000 | 2,500,000 | |
HMBS - Related Borrowings [Member] | |||
Servicing Assets at Fair Value [Line Items] | |||
Other secured borrowings | 2,600,000 | $ 2,400,000 | |
Mortgage Servicing Rights - Amortized Costs [Member] | |||
Servicing Assets at Fair Value [Line Items] | |||
MSRs retained | $ 7,200 | $ 8,500 |
Securitizations and Variable 46
Securitizations and Variable Interest Entities - Schedule of Cash Flows Related to Transfers Accounted for as Sales (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Disclosure of Transfer of Securitizations or Asset-backed Financing Financial Assets Accounted for as Sale [Abstract] | ||
Proceeds received from securitizations | $ 1,009,264 | $ 1,070,772 |
Servicing fees collected | 3,124 | 347 |
Purchases of previously transferred assets, net of claims reimbursed | (13) | 500 |
Cash flows received from and paid to securitization trusts | $ 1,012,375 | $ 1,071,619 |
Securitizations and Variable 47
Securitizations and Variable Interest Entities - Schedule of Assets That Relate to Continuing Involvement with Transferred Financial Assets with Servicing Rights and Maximum Exposure to Loss Including the Unpaid Principal Balance (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||
UPB of loans transferred | $ 8,101,276 | $ 7,471,025 |
Maximum exposure to loss | 8,185,818 | 7,552,958 |
Mortgage Servicing Rights - Amortized Costs [Member] | ||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||
Carrying value of assets | 57,553 | 54,729 |
Fair Value Mortgage Servicing Rights [Member] | ||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||
Carrying value of assets | 200 | 236 |
Advances And Match Funded Advances [Member] | ||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||
Carrying value of assets | $ 26,789 | $ 26,968 |
Fair Value - Schedule of Fair V
Fair Value - Schedule of Fair Value Assets and Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | |
Loans held for sale: | |||||
Loans held for sale, at fair value | $ 321,739 | $ 309,054 | $ 339,508 | $ 401,120 | |
Financial liabilities: | |||||
Match funded liabilities | 1,537,096 | 1,584,049 | |||
Financing liabilities: | |||||
Total Financing liabilities | 3,319,646 | 3,089,255 | |||
Other secured borrowings: | |||||
Total Other secured borrowings | 718,830 | 762,411 | |||
Senior unsecured notes | 345,847 | 345,511 | |||
Mortgage servicing rights: | |||||
Mortgage servicing rights, at fair value | 732,174 | 761,190 | $ 897,797 | $ 93,901 | |
Total Mortgage servicing rights | 1,078,213 | 1,138,569 | |||
Carrying Value [Member] | |||||
Loans held for sale: | |||||
Total Loans held for sale | 408,809 | 414,046 | |||
Financing liabilities: | |||||
Total Financing liabilities | 3,319,646 | 3,089,255 | |||
Other secured borrowings: | |||||
Total Other secured borrowings | 718,830 | 762,411 | |||
Mortgage servicing rights: | |||||
Total Mortgage servicing rights | 1,078,213 | 1,138,569 | |||
Carrying Value [Member] | Level 1 [Member] | Forward Mortgage Backed Securities Trades [Member] | |||||
Derivative financial instruments assets (liabilities): | |||||
Forward mortgage-backed securities trades | [1] | (5,291) | 295 | ||
Carrying Value [Member] | Level 2 [Member] | |||||
Loans held for sale: | |||||
Loans held for sale, at fair value | [1] | 321,739 | 309,054 | ||
Other secured borrowings: | |||||
Senior secured term loan | [2],[3] | 359,428 | 377,091 | ||
Senior unsecured notes | [2],[3] | 345,847 | 345,511 | ||
Carrying Value [Member] | Level 2 [Member] | Interest Rate Lock Commitments [Member] | |||||
Derivative financial instruments assets (liabilities): | |||||
Interest rate lock commitments | [1] | 13,545 | 6,080 | ||
Carrying Value [Member] | Level 3 [Member] | |||||
Loans held for sale: | |||||
Loans held for sale, at lower of cost or fair value | [4] | 87,070 | 104,992 | ||
Loans held for investment - Reverse mortgages, at fair value | [1] | 2,771,242 | 2,488,253 | ||
Advances and match funded advances | [2] | 2,038,245 | 2,151,066 | ||
Receivables, net | [2] | 237,583 | 286,981 | ||
Mortgage-backed securities, at fair value | [1] | 8,386 | 7,985 | ||
Financial liabilities: | |||||
Match funded liabilities | [2] | 1,537,096 | 1,584,049 | ||
Financing liabilities: | |||||
HMBS-related borrowings, at fair value | [1] | 2,648,100 | 2,391,362 | ||
Financing liability - MSRs pledged | [1] | 523,503 | 541,704 | ||
Other | [2] | 148,043 | 156,189 | ||
Other secured borrowings: | |||||
Other | [2] | 359,402 | 385,320 | ||
Mortgage servicing rights: | |||||
Mortgage servicing rights, at fair value | [1] | 732,174 | 761,190 | ||
Mortgage servicing rights, at amortized cost | [2],[5] | 346,039 | 377,379 | ||
Carrying Value [Member] | Level 3 [Member] | Interest Rate Caps [Member] | |||||
Derivative financial instruments assets (liabilities): | |||||
Interest rate caps | [1] | 570 | 2,042 | ||
Fair Value [Member] | |||||
Loans held for sale: | |||||
Total Loans held for sale | 408,809 | 414,046 | |||
Financing liabilities: | |||||
Total Financing liabilities | 3,278,460 | 3,065,006 | |||
Other secured borrowings: | |||||
Total Other secured borrowings | 741,910 | 783,276 | |||
Mortgage servicing rights: | |||||
Total Mortgage servicing rights | 1,123,144 | 1,222,745 | |||
Fair Value [Member] | Level 1 [Member] | Forward Mortgage Backed Securities Trades [Member] | |||||
Derivative financial instruments assets (liabilities): | |||||
Forward mortgage-backed securities trades | [1] | (5,291) | 295 | ||
Fair Value [Member] | Level 2 [Member] | |||||
Loans held for sale: | |||||
Loans held for sale, at fair value | [1] | 321,739 | 309,054 | ||
Other secured borrowings: | |||||
Senior secured term loan | [2],[3] | 382,508 | 397,956 | ||
Senior unsecured notes | [2],[3] | 294,350 | 318,063 | ||
Fair Value [Member] | Level 2 [Member] | Interest Rate Lock Commitments [Member] | |||||
Derivative financial instruments assets (liabilities): | |||||
Interest rate lock commitments | [1] | 13,545 | 6,080 | ||
Fair Value [Member] | Level 3 [Member] | |||||
Loans held for sale: | |||||
Loans held for sale, at lower of cost or fair value | [4] | 87,070 | 104,992 | ||
Loans held for investment - Reverse mortgages, at fair value | [1] | 2,771,242 | 2,488,253 | ||
Advances and match funded advances | [2] | 2,038,245 | 2,151,066 | ||
Receivables, net | [2] | 237,583 | 286,981 | ||
Mortgage-backed securities, at fair value | [1] | 8,386 | 7,985 | ||
Financial liabilities: | |||||
Match funded liabilities | [2] | 1,537,611 | 1,581,786 | ||
Financing liabilities: | |||||
HMBS-related borrowings, at fair value | [1] | 2,648,100 | 2,391,362 | ||
Financing liability - MSRs pledged | [1] | 523,503 | 541,704 | ||
Other | [2] | 106,857 | 131,940 | ||
Other secured borrowings: | |||||
Other | [2] | 359,402 | 385,320 | ||
Mortgage servicing rights: | |||||
Mortgage servicing rights, at fair value | [1] | 732,174 | 761,190 | ||
Mortgage servicing rights, at amortized cost | [2],[5] | 390,970 | 461,555 | ||
Fair Value [Member] | Level 3 [Member] | Interest Rate Caps [Member] | |||||
Derivative financial instruments assets (liabilities): | |||||
Interest rate caps | [1] | $ 570 | $ 2,042 | ||
[1] | Measured at fair value on a recurring basis. | ||||
[2] | Disclosed, but not carried, at fair value. | ||||
[3] | {F|ahBzfndlYmZpbGluZ3MtaHJkcmoLEgZYTUxEb2MiXlhCUkxEb2NHZW5JbmZvOmEyZDAxMWQ0YzY5YjQxMmZiZjI2OGE0MmY4MGJkMmZmfFRleHRTZWxlY3Rpb246ODNGRTI2RUIyRjJCQTM5QzY2NTI0REQ0NTc3MTBFRjgM} | ||||
[4] | Measured at fair value on a non-recurring basis. | ||||
[5] | The net carrying value at March 31, 2016 and December 31, 2015 is net of the valuation allowance on the impaired government-insured stratum of our amortization method MSRs, which is measured at fair value on a non-recurring basis. Before applying the valuation allowance of $47.3 million, the carrying value of this stratum at March 31, 2016 was $146.7 million. At December 31, 2015, the carrying value of this stratum was $146.5 million before applying the valuation allowance of $17.3 million. |
Fair Value - Schedule of Fair49
Fair Value - Schedule of Fair Value Assets and Liabilities (Footnote) (Details) - Carrying Value [Member] - Impaired Government Insured Stratum [Member] - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
MSRs, at amortized cost | $ 146.7 | $ 146.5 |
Valuation allowance | $ 47.3 | $ 17.3 |
Fair Value - Schedule of Reconc
Fair Value - Schedule of Reconciliation of Changes in Fair Value of Level 3 Assets and Liabilities (Details) - Level 3 [Member] - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Beginning balance | $ 326,404 | $ (406,749) | |
Purchases, issuances, sales and settlements: | |||
Purchases | 419 | 0 | |
Issuances | 70,884 | (4,513) | |
Transfer from MSRs carried at amortized cost | 0 | 839,157 | |
Sales | (142) | (917) | |
Settlements | [1] | (29,463) | 19,698 |
Purchases, issuances, sales and settlements, total | 41,698 | 853,425 | |
Total realized and unrealized gains and (losses): | |||
Included in earnings | [2] | (27,333) | (29,726) |
Included in Other comprehensive income | [2] | 0 | 0 |
Total realized and unrealized gains and (losses) | [2] | (27,333) | (29,726) |
Transfers in and / or out of Level 3 | 0 | 0 | |
Ending balance | 340,769 | 416,950 | |
Loans Held for Investment - Reverse Mortgages [Member] | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Beginning balance | 2,488,253 | 1,550,141 | |
Purchases, issuances, sales and settlements: | |||
Purchases | 0 | 0 | |
Issuances | 304,058 | 235,271 | |
Transfer from MSRs carried at amortized cost | 0 | 0 | |
Sales | 0 | 0 | |
Settlements | [1] | (87,237) | (26,233) |
Purchases, issuances, sales and settlements, total | 216,821 | 209,038 | |
Total realized and unrealized gains and (losses): | |||
Included in earnings | [2] | 66,168 | 48,962 |
Included in Other comprehensive income | [2] | 0 | 0 |
Total realized and unrealized gains and (losses) | [2] | 66,168 | 48,962 |
Transfers in and / or out of Level 3 | 0 | 0 | |
Ending balance | 2,771,242 | 1,808,141 | |
HMBS - Related Borrowings [Member] | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Beginning balance | (2,391,362) | (1,444,252) | |
Purchases, issuances, sales and settlements: | |||
Purchases | 0 | 0 | |
Issuances | (233,174) | (238,615) | |
Transfer from MSRs carried at amortized cost | 0 | 0 | |
Sales | 0 | 0 | |
Settlements | [1] | 39,654 | 25,985 |
Purchases, issuances, sales and settlements, total | (193,520) | (212,630) | |
Total realized and unrealized gains and (losses): | |||
Included in earnings | [2] | (63,218) | (45,515) |
Included in Other comprehensive income | [2] | 0 | 0 |
Total realized and unrealized gains and (losses) | [2] | (63,218) | (45,515) |
Transfers in and / or out of Level 3 | 0 | 0 | |
Ending balance | (2,648,100) | (1,702,397) | |
Mortgage-Backed Securities [Member] | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Beginning balance | 7,985 | 7,335 | |
Purchases, issuances, sales and settlements: | |||
Purchases | 0 | 0 | |
Issuances | 0 | 0 | |
Transfer from MSRs carried at amortized cost | 0 | 0 | |
Sales | 0 | 0 | |
Settlements | [1] | 0 | 0 |
Purchases, issuances, sales and settlements, total | 0 | 0 | |
Total realized and unrealized gains and (losses): | |||
Included in earnings | [2] | 401 | 366 |
Included in Other comprehensive income | [2] | 0 | 0 |
Total realized and unrealized gains and (losses) | [2] | 401 | 366 |
Transfers in and / or out of Level 3 | 0 | 0 | |
Ending balance | 8,386 | 7,701 | |
Financing Liability - MSRs Pledged [Member] | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Beginning balance | (541,704) | (614,441) | |
Purchases, issuances, sales and settlements: | |||
Purchases | 0 | 0 | |
Issuances | 0 | 0 | |
Transfer from MSRs carried at amortized cost | 0 | 0 | |
Sales | 0 | 0 | |
Settlements | [1] | 18,201 | 19,946 |
Purchases, issuances, sales and settlements, total | 18,201 | 19,946 | |
Total realized and unrealized gains and (losses): | |||
Included in earnings | [2] | 0 | 0 |
Included in Other comprehensive income | [2] | 0 | 0 |
Total realized and unrealized gains and (losses) | [2] | 0 | 0 |
Transfers in and / or out of Level 3 | 0 | 0 | |
Ending balance | (523,503) | (594,495) | |
Derivatives [Member] | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Beginning balance | 2,042 | 567 | |
Purchases, issuances, sales and settlements: | |||
Purchases | 0 | 0 | |
Issuances | 0 | 0 | |
Transfer from MSRs carried at amortized cost | 0 | $ 0 | |
Sales | 0 | ||
Settlements | [1] | (81) | $ 0 |
Purchases, issuances, sales and settlements, total | (81) | 0 | |
Total realized and unrealized gains and (losses): | |||
Included in earnings | [2] | (1,391) | (364) |
Included in Other comprehensive income | [2] | 0 | 0 |
Total realized and unrealized gains and (losses) | [2] | (1,391) | (364) |
Transfers in and / or out of Level 3 | 0 | 0 | |
Ending balance | 570 | 203 | |
MSRs [Member] | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Beginning balance | 761,190 | 93,901 | |
Purchases, issuances, sales and settlements: | |||
Purchases | 419 | 0 | |
Issuances | 0 | (1,169) | |
Transfer from MSRs carried at amortized cost | 0 | 839,157 | |
Sales | (142) | (917) | |
Settlements | [1] | 0 | 0 |
Purchases, issuances, sales and settlements, total | 277 | 837,071 | |
Total realized and unrealized gains and (losses): | |||
Included in earnings | [2] | (29,293) | (33,175) |
Included in Other comprehensive income | [2] | 0 | 0 |
Total realized and unrealized gains and (losses) | [2] | (29,293) | (33,175) |
Transfers in and / or out of Level 3 | 0 | 0 | |
Ending balance | $ 732,174 | $ 897,797 | |
[1] | In the event of a transfer to another party of servicing related to Rights to MSRs, we are required to reimburse NRZ at predetermined contractual rates for the loss of servicing revenues. Settlements for Financing liability - MSRs pledged for the three months ended March 31, 2015 includes $2.2 million of such reimbursements. | ||
[2] | Total losses attributable to derivative financial instruments still held at March 31, 2016 and March 31, 2015 were $1.5 million and $0.4 million for the three months ended March 31, 2016 and 2015, respectively. Total losses attributable to MSRs still held at March 31, 2016 and March 31, 2015 were $29.1 million and $31.7 million for the three months ended March 31, 2016 and 2015, respectively. |
Fair Value - Schedule of Reco51
Fair Value - Schedule of Reconciliation of Changes in Fair Value of Level 3 Assets and Liabilities (Footnote) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Losses attributable to derivatives | $ (1.5) | $ (0.4) |
Losses attributable to MSRs still held | $ (29.1) | (31.7) |
NRZ [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Servicing revenue, reimbursement payable | $ 2.2 |
Fair Value - Narrative (Details
Fair Value - Narrative (Details) | 3 Months Ended |
Mar. 31, 2016 | |
Loans Held for Investment - Reverse Mortgages [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Life | 6 years 6 months 7 days |
Repayment rate | 19.70% |
Discount rate | 2.74% |
Minimum [Member] | Loans Held for Investment - Reverse Mortgages [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Life | 5 years 11 months 15 days |
Repayment rate | 4.92% |
Maximum [Member] | Loans Held for Investment - Reverse Mortgages [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Life | 9 years 5 months 15 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 24 days |
Repayment rate | 19.70% |
Discount rate | 2.17% |
HMBS - Related Borrowings [Member] | Minimum [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Life | 4 years 8 months 26 days |
Repayment rate | 4.92% |
HMBS - Related Borrowings [Member] | Maximum [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Life | 9 years 5 months 15 days |
Repayment rate | 53.75% |
Fair Value - Schedule of Signif
Fair Value - Schedule of Significant Assumptions used in Valuation (Details) | 3 Months Ended |
Mar. 31, 2016$ / loan | |
Mortgage Servicing Rights - Amortized Costs [Member] | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |
Weighted average prepayment speed | 12.11% |
Weighted average delinquency rate | 12.32% |
Advance financing cost | 5 years |
Interest rate for computing float earnings | 5 years |
Weighted average discount rate | 9.33% |
Weighted average cost to service (in dollars) | 111 |
Fair Value Agency Mortgage Servicing Rights [Member] | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |
Weighted average prepayment speed | 13.27% |
Weighted average delinquency rate | 0.99% |
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) | 74 |
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 | 27.42% |
Weighted average discount rate | 14.68% |
Weighted average cost to service (in dollars) | 313 |
Mortgage Servicing Rights Pledged [Member] | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |
Weighted average prepayment speed | 17.35% |
Weighted average delinquency rate | 29.21% |
Weighted average discount rate | 14.54% |
Weighted average cost to service (in dollars) | 318 |
London Interbank Offered Rate (LIBOR) [Member] | Fair Value Non-Agency Mortgage Servicing Rights [Member] | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |
Interest rate for computing float earnings | 1 month |
Fair value input, interest rate | 3.50% |
London Interbank Offered Rate (LIBOR) [Member] | Mortgage Servicing Rights Pledged [Member] | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |
Interest rate for computing float earnings | 1 month |
Fair value input, interest rate | 3.50% |
Sales of Advances and MSRs - Sc
Sales of Advances and MSRs - Schedule of MSRs and Advances Sold (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | ||
Servicing Assets at Fair Value [Line Items] | |||
Amount due from purchaser at March 31 | $ (39,700) | ||
Mortgage Servicing Rights [Member] | |||
Servicing Assets at Fair Value [Line Items] | |||
Accounted for as a sale | 1,162 | $ 97,530 | |
Amount due from purchaser at March 31 | [1] | 0 | (48,065) |
Amounts received from purchaser for items outstanding at the end of the previous year | 14,143 | 0 | |
Total net cash received | 15,305 | 49,465 | |
Advances And Match Funded Advances [Member] | |||
Servicing Assets at Fair Value [Line Items] | |||
Accounted for as a sale | 261 | 1,765 | |
Amount due from purchaser at March 31 | [1] | 0 | 0 |
Amounts received from purchaser for items outstanding at the end of the previous year | 40,742 | 0 | |
Total net cash received | $ 41,003 | $ 1,765 | |
[1] | There were no amounts due from purchaser at March 31, 2016 related to assets sold during the three months ended March 31, 2016. The total amount due at March 31, 2016 on sales of MSRs and advances, which consists only of amounts due on sales completed in 2015, is $39.7 million. |
Sales of Advances and MSRs Sche
Sales of Advances and MSRs Schedule of MSRs and Advances Sold (Footnote) (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Transfers and Servicing [Abstract] | |
Amounts due on sales of MSRs and advances | $ 39.7 |
Sales of Advances and MSRs - Na
Sales of Advances and MSRs - Narrative (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2016USD ($)Agreement | |
Non Agency Mortgage Servicing Rights [Member] | |
Servicing Assets at Fair Value [Line Items] | |
UPB of MSRs sold | $ 34.5 |
Agency Mortgage Servicing Rights [Member] | |
Servicing Assets at Fair Value [Line Items] | |
UPB of MSRs sold | 9,100 |
NRZ [Member] | |
Servicing Assets at Fair Value [Line Items] | |
Outstanding servicing advances | $ 4,900 |
Period from sale of tranche of rights to mortgage servicing rights that apportionment of fees is subject to re-negotiation | 8 years |
Liquidating damages paid | $ 2.2 |
Number of non-agency servicing agreements terminated due to downgrades in mortgage servicer rating | Agreement | 4 |
Increased costs of financing to be compensated during any calendar month | $ 3 |
Increased costs of financing to be compensated during contractual term | 36 |
Expenses in connection with downgrade in servicers rating | $ 6.2 |
Loans Held for Sale - Schedule
Loans Held for Sale - Schedule of Loans Held for Sale Fair Value (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | ||
Movement In Loans Held For Sale At Fair Value [Roll Forward] | |||
Beginning balance | $ 309,054 | $ 401,120 | |
Originations and purchases | 789,180 | 922,254 | |
Proceeds from sales | (783,187) | (990,634) | |
Principal collections | (3,280) | (2,667) | |
Gain on sale of loans | 7,646 | 15,265 | |
Other | [1] | 2,326 | (5,830) |
Ending balance | $ 321,739 | $ 339,508 | |
[1] | Other includes the increase (decrease) in fair value of $1.8 million and $(6.9) million for the three months ended March 31, 2016 and 2015, respectively. |
Loans Held for Sale - Schedul58
Loans Held for Sale - Schedule of Loans Held for Sale Fair Value (Footnote) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Receivables [Abstract] | ||
Change in fair value of loans held for sale | $ 1.8 | $ (6.9) |
Loans Held for Sale - Schedul59
Loans Held for Sale - Schedule of Loans Held for Sale at Lower Cost or Fair Value, Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | ||
Movement In Loans Held For Sale At Fair Value [Roll Forward] | |||
Beginning balance | $ 104,992 | $ 87,492 | |
Purchases | 421,896 | 113,896 | |
Proceeds from sales | (372,583) | (140,948) | |
Principal collections | (6,453) | (13,863) | |
Transfers to accounts receivable | (61,212) | (16,572) | |
Transfers to real estate owned | (1,224) | (2,296) | |
Gain on sale of loans | 5,010 | 17,271 | |
Decrease (increase) in valuation allowance | (3,335) | 19,728 | |
Other | (21) | 3,781 | |
Ending balance | [1] | $ 87,070 | $ 68,489 |
[1] | At March 31, 2016 and March 31, 2015, the balances include $55.5 million and $43.9 million, respectively, of loans that we were required to repurchase from Ginnie Mae guaranteed securitizations as part of our servicing obligations. Repurchased loans are modified or otherwise remediated through loss mitigation activities or are reclassified to receivables. |
Loans Held for Sale - Schedul60
Loans Held for Sale - Schedule of Loans Held for Sale at Lower Cost or Fair Value Activity (Footnote) (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans held for sale, at lower of cost or fair value | $ 87,070 | [1] | $ 104,992 | $ 68,489 | [1] | $ 87,492 |
Ginnie Mae Loans [Member] | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans held for sale, at lower of cost or fair value | $ 55,500 | $ 43,900 | ||||
[1] | At March 31, 2016 and March 31, 2015, the balances include $55.5 million and $43.9 million, respectively, of loans that we were required to repurchase from Ginnie Mae guaranteed securitizations as part of our servicing obligations. Repurchased loans are modified or otherwise remediated through loss mitigation activities or are reclassified to receivables. |
Loans Held for Sale Schedule of
Loans Held for Sale Schedule of Changes in Valuation Allowance (Details) - Valuation Allowance for Loans Held for Sale [Member] - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Beginning balance | $ 14,658 | $ 49,676 |
Provision | 2,597 | 1,104 |
Transfer from liability for indemnification obligations | 1,030 | 664 |
Sales of loans | 0 | (22,488) |
Other | (292) | 992 |
Ending balance | $ 17,993 | $ 29,948 |
Loans Held for Sale - Schedul62
Loans Held for Sale - Schedule of Gains on Loans Held for Sale, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Loans Held For Sale At Fair Value [Abstract] | ||
Gain on sales of loans | $ 17,939 | $ 51,400 |
Change in fair value of IRLCs | 7,465 | (2,233) |
Change in fair value of loans held for sale | 3,521 | (4,008) |
Loss on economic hedge instruments | (13,202) | (427) |
Other | (151) | (228) |
Gain on loans held for sale, net | $ 15,572 | $ 44,504 |
Loans Held for Sale - Narrative
Loans Held for Sale - Narrative (Details) - USD ($) $ in Thousands | May. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Gain on loans held for sale, net | $ 15,572 | $ 44,504 | |
Lending [Member] | Line of Credit [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Collateral | 285,100 | ||
Servicing [Member] | Line of Credit [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Collateral | 37,100 | ||
Unrelated Party [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Gain on loans held for sale, net | $ 7,200 | 12,900 | |
Unpaid principal balance | $ 33,000 | 42,700 | |
MSRs Retained [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Gain on loans held for sale, net | 6,500 | 8,500 | |
Ginnie Mae Loans [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Gain on loans held for sale, net | 5,000 | 4,300 | |
Gain on sales of reverse mortgage loans | $ 8,000 | $ 25,600 |
Advances - Schedule of Advances
Advances - Schedule of Advances Paid on Behalf of Borrowers or on Foreclosed Properties (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | |
Servicing: | |||||
Advances | $ 317,348 | $ 444,298 | $ 942,538 | $ 893,914 | |
Allowance for losses | (42,523) | (41,901) | $ (71,862) | $ (70,034) | |
Advances, net | 317,348 | 444,298 | |||
Servicing, Principal and Interest [Member] | |||||
Servicing: | |||||
Advances | 58,290 | 81,681 | |||
Servicing, Taxes and Insurance [Member] | |||||
Servicing: | |||||
Advances | 233,202 | 278,487 | |||
Servicing, Foreclosures, Bankruptcy and Other [Member] | |||||
Servicing: | |||||
Advances | [1] | 68,379 | 126,031 | ||
Servicing [Member] | |||||
Servicing: | |||||
Advances | $ 359,871 | $ 486,199 | |||
[1] | March 31, 2016 December 31, 2015Principal and interest$58,290 $81,681Taxes and insurance233,202 278,487Foreclosures, bankruptcy and other 68,379 126,031 359,871 486,199Allowance for losses(42,523) (41,901) $317,348 $444,298 |
Advances - Schedule of Activity
Advances - Schedule of Activity in Advances (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Advances [Roll Forward] | ||
Beginning balance | $ 444,298 | $ 893,914 |
Sales of advances | (261) | (1,765) |
New advances (collections of advances), net | (126,067) | 52,217 |
Increase in allowance for losses | (622) | (1,828) |
Ending balance | $ 317,348 | $ 942,538 |
Advances Schedule of Changes in
Advances Schedule of Changes in Allowance for Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Advances [Abstract] | ||
Beginning balance | $ 41,901 | $ 70,034 |
Provision | 3,483 | 4,960 |
Charge-offs and other | (2,861) | (3,132) |
Ending balance | $ 42,523 | $ 71,862 |
Advances - Narrative (Details)
Advances - Narrative (Details) $ in Millions | Mar. 31, 2016USD ($) |
Advances [Abstract] | |
Sold advances | $ 79.6 |
Match Funded Advances - Schedul
Match Funded Advances - Schedule of Match Funded Advances on Residential Loans (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 |
Match Funded Advances [Line Items] | ||||
Match funded advances | $ 1,720,897 | $ 1,706,768 | ||
Residential Mortgage [Member] | ||||
Match Funded Advances [Line Items] | ||||
Principal and interest | 879,242 | 948,376 | ||
Taxes and insurance | 620,795 | 608,404 | ||
Foreclosures, bankruptcy, real estate and other | 220,860 | 149,988 | ||
Match funded advances | $ 1,720,897 | $ 1,706,768 | $ 2,252,967 | $ 2,409,442 |
Match Funded Advances - Sched69
Match Funded Advances - Schedule of Activity in Match Funded Advances (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Match Funded Advances [Roll Forward] | ||
Beginning balance | $ 1,706,768 | |
Ending balance | 1,720,897 | |
Residential Mortgage [Member] | ||
Match Funded Advances [Roll Forward] | ||
Beginning balance | 1,706,768 | $ 2,409,442 |
New advances (collections of pledged advances), net | 14,129 | (156,475) |
Ending balance | $ 1,720,897 | $ 2,252,967 |
Mortgage Servicing - Schedule o
Mortgage Servicing - Schedule of Activity Related to MSRs - Amortization Method (Details) - USD ($) $ in Thousands | 3 Months Ended | ||||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Servicing Asset at Amortized Cost, Balance [Roll Forward] | |||||
Fair value election - transfer of MSRs carried at fair value | $ 0 | $ (787,142) | |||
Estimated fair value at end of period | 732,174 | 897,797 | $ 761,190 | $ 93,901 | |
Mortgage Servicing Rights - Amortized Costs [Member] | |||||
Servicing Asset at Amortized Cost, Balance [Roll Forward] | |||||
Beginning balance | 377,379 | 1,820,091 | |||
Fair value election - transfer of MSRs carried at fair value | [1] | 0 | (787,142) | ||
Additions recognized in connection with asset acquisitions | 4,263 | 3,267 | |||
Additions recognized on the sale of mortgage loans | 7,156 | 8,528 | |||
Sales | 0 | (65,627) | |||
Servicing asset at amortized value, gross | 388,798 | 979,117 | |||
Amortization | (12,806) | (38,494) | |||
Increase in impairment valuation allowance | [2] | (29,953) | (17,769) | ||
Ending balance | 346,039 | 922,854 | |||
Estimated fair value at end of period | $ 390,970 | $ 1,064,134 | |||
[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 $9.2 million) to retained earnings as of January 1, 2015 to reflect the excess of the fair value of these MSRs over their carrying amount. At December 31, 2014, the UPB of the loans related to the non-Agency MSRs for which the fair value election was made was $195.3 billion. | ||||
[2] | Impairment of MSRs is recognized in Servicing and origination expense in the Unaudited Consolidated Statements of Operations. |
Mortgage Servicing - Schedule71
Mortgage Servicing - Schedule of Activity Related to MSRs - Amortization Method (Footnote) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2014 | |
Servicing Asset at Amortized Cost [Line Items] | |||
Fair value measurement of non-agency MSRs, cumulative-effect on retained earnings | $ 0 | $ 52,015 | |
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 | $ 52,000 | ||
Deferred income taxes | 9,200 | ||
Unpaid principal balance of MSRs | $ 195,300,000 |
Mortgage Servicing - Schedule72
Mortgage Servicing - Schedule of Activity Related to MSRs - Fair Value Measurement Method (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | ||
Servicing Asset at Fair Value, Amount [Roll Forward] | |||
Beginning balance | $ 761,190 | $ 93,901 | |
Fair value election - transfer of MSRs carried at amortized cost | 0 | 787,142 | |
Cumulative effect of fair value election | 0 | 52,015 | |
Sales | (142) | (947) | |
Servicing transfers and adjustments | 419 | (1,139) | |
Changes in fair value: | |||
Changes in valuation inputs or other assumptions | [1] | (6,380) | (6,110) |
Realization of expected future cash flows and other changes | [1] | (22,913) | (27,065) |
Ending balance | 732,174 | 897,797 | |
Fair Value Agency Mortgage Servicing Rights [Member] | |||
Servicing Asset at Fair Value, Amount [Roll Forward] | |||
Beginning balance | 15,071 | 93,901 | |
Fair value election - transfer of MSRs carried at amortized cost | 0 | 0 | |
Cumulative effect of fair value election | 0 | 0 | |
Sales | 0 | 0 | |
Servicing transfers and adjustments | 0 | 0 | |
Changes in fair value: | |||
Changes in valuation inputs or other assumptions | [1] | (2,709) | (6,110) |
Realization of expected future cash flows and other changes | [1] | (351) | (3,276) |
Ending balance | 12,011 | 84,515 | |
Fair Value Non-Agency Mortgage Servicing Rights [Member] | |||
Servicing Asset at Fair Value, Amount [Roll Forward] | |||
Beginning balance | 746,119 | 0 | |
Fair value election - transfer of MSRs carried at amortized cost | 0 | 787,142 | |
Cumulative effect of fair value election | 0 | 52,015 | |
Sales | (142) | (947) | |
Servicing transfers and adjustments | 419 | (1,139) | |
Changes in fair value: | |||
Changes in valuation inputs or other assumptions | [1] | (3,671) | 0 |
Realization of expected future cash flows and other changes | [1] | (22,562) | (23,789) |
Ending balance | $ 720,163 | $ 813,282 | |
[1] | Changes in fair value are recognized in Servicing and origination expense in the Unaudited Consolidated Statements of Operations. |
Mortgage Servicing - Schedule73
Mortgage Servicing - Schedule of Estimated Change in Fair Value of MSRs (Details) $ in Thousands | Mar. 31, 2016USD ($) |
Transfers and Servicing [Abstract] | |
Weighted average prepayment speeds, 10% | $ (77,665) |
Weighted average prepayment speeds, 20% | (150,075) |
Discount rate (Option-adjusted spread), 10% | (17,894) |
Discount rate (Option-adjusted spread), 20% | $ (34,728) |
Mortgage Servicing - Schedule74
Mortgage Servicing - Schedule of Composition of Servicing and Subservicing Portfolios by Type of Property Serviced (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2015 | |
Schedule of Servicing and Subservicing Portfolio [Line Items] | ||||
Servicing | [1] | $ 223,731,371 | $ 230,132,729 | $ 337,125,187 |
Subservicing | 13,486,138 | 20,938,651 | 45,250,702 | |
Assets serviced | 237,217,509 | 251,071,380 | 382,375,889 | |
Residential [Member] | ||||
Schedule of Servicing and Subservicing Portfolio [Line Items] | ||||
Servicing | [1] | 223,731,371 | 230,132,729 | 337,125,187 |
Subservicing | 13,349,665 | 20,833,383 | 45,088,815 | |
Assets serviced | 237,081,036 | 250,966,112 | 382,214,002 | |
Commercial [Member] | ||||
Schedule of Servicing and Subservicing Portfolio [Line Items] | ||||
Servicing | [1] | 0 | 0 | 0 |
Subservicing | 136,473 | 105,268 | 161,887 | |
Assets serviced | $ 136,473 | $ 105,268 | $ 161,887 | |
[1] | UPB serviced at March 31, 2016, December 31, 2015 and March 31, 2015 includes $132.7 billion, $137.1 billion and $156.3 billion, respectively, for which the Rights to MSRs have been sold to NRZ. |
Mortgage Servicing - Narrative
Mortgage Servicing - Narrative (Details) $ in Billions | 3 Months Ended | ||
Mar. 31, 2016USD ($)Agreement | Dec. 31, 2015USD ($) | Mar. 31, 2015USD ($) | |
Servicing Asset at Amortized Cost [Line Items] | |||
Unpaid principal balance of small balance commercial loans serviced | $ | $ 1.7 | $ 1.8 | $ 2.1 |
Number of non-agency and whole loans servicing agreements | 3,908 | ||
Number of non-agency and whole loans servicing agreements with minimum servicer ratings | 735 | ||
Unpaid principal balance of non-agency and whole loans servicing agreements with minimum servicer ratings | $ | $ 38.1 | ||
Number of non-agency and whole loans servicing agreements with termination rights triggered | 651 | ||
Unpaid principal balance of non-agency and whole loans servicing agreements with termination rights triggered | $ | $ 32.4 | ||
Percentage of non-agency and whole loans servicing agreements with termination rights triggered of servicing portfolio | 18.00% | ||
Number of triggered agreements where trustees and master servicers have currently no intention to take action relating to termination rights | 272 | ||
Number of non-agency servicing agreements with termination rights triggered where trustees and master servicers sent solicitation notices to investors | 69 | ||
Number of results announced in connection with solicitation notices sent by trustees and master servicers to investors | 47 | ||
Number of solicitation notice results in which there is no direction to terminate company as servicer | 43 | ||
Unpaid principal balance of non-agency servicing portfolio with no direction to terminate company as servicer | $ | $ 19.3 | ||
Percentage of unpaid principal balance of non-agency servicing portfolio with no direction to terminate company as servicer to non-agency portfolio | 59.60% | ||
Percentage of servicing transferred due to downgrades in mortgage servicer rating | 0.17% | ||
Float balances | $ | $ 2.3 | 4 | |
NRZ [Member] | |||
Servicing Asset at Amortized Cost [Line Items] | |||
Primary servicing UPB | $ | $ 132.7 | $ 137.1 | $ 156.3 |
Number of non-agency servicing agreements terminated due to downgrades in mortgage servicer rating | 4 |
Mortgage Servicing - Schedule76
Mortgage Servicing - Schedule of Components of Servicing and Subservicing Fees (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Transfers and Servicing [Abstract] | ||
Servicing | $ 238,638 | $ 332,201 |
Subservicing | 7,239 | 18,341 |
Servicing and Subservicing fees, total | 245,877 | 350,542 |
Home Affordable Modification Program (HAMP) fees | 22,618 | 35,176 |
Late charges | 18,603 | 24,122 |
Loan collection fees | 7,129 | 9,563 |
Other | 3,269 | 27,138 |
Fees, total | $ 297,496 | $ 446,541 |
Receivables - Schedule of Recei
Receivables - Schedule of Receivables (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 | |
Receivables [Abstract] | |||
Amount due on sales of mortgage servicing rights and advances | $ 39,744 | $ 94,629 | |
Government-insured loan claims | [1] | 67,950 | 71,405 |
Due from custodial accounts | 20,798 | 13,800 | |
Reimbursable expenses | 28,400 | 29,856 | |
Other servicing receivables | 48,195 | 32,879 | |
Servicing receivable, total | 205,087 | 242,569 | |
Income taxes receivable | 50,384 | 53,519 | |
Other receivables | 20,882 | 29,818 | |
Other receivables, gross | 276,353 | 325,906 | |
Allowance for losses | [1] | (38,770) | (38,925) |
Other receivables | $ 237,583 | $ 286,981 | |
[1] | At March 31, 2016 and December 31, 2015, 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 March 31, 2016 and December 31, 2015 were $21.5 million and $20.6 million, respectively. |
Receivables - Schedule of Rec78
Receivables - Schedule of Receivables (Footnote) (Detail) - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 |
Receivables [Abstract] | ||
Servicing receivables, allowance for losses | $ (21.5) | $ (20.6) |
Other Assets - Schedule of Othe
Other Assets - Schedule of Other Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 | |
Other Assets [Abstract] | |||
Contingent loan repurchase asset | [1] | $ 316,002 | $ 346,984 |
Prepaid expenses | [2] | 58,992 | 69,805 |
Debt service accounts | [3] | 56,946 | 87,328 |
Real estate | 18,607 | 20,489 | |
Derivatives, at fair value | 14,115 | 6,367 | |
Prepaid lender fees and debt issuance costs, net | 14,903 | 19,496 | |
Prepaid income taxes | 10,910 | 11,749 | |
Mortgage backed securities, at fair value | 8,386 | 7,985 | |
Other | 21,321 | 16,292 | |
Other assets | $ 520,182 | $ 586,495 | |
[1] | In connection with the Ginnie Mae early buy-out (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] | 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. Prepaid expenses at March 31, 2016 and December 31, 2015 includes the remaining balance of $39.3 million and $41.3 million, respectively. | ||
[3] | Under our advance funding financing facilities, we are contractually required to remit collections on pledged advances to the trustee within two days of receipt. The collected funds are not applied to reduce the related match funded debt until the payment dates specified in the indenture. The balances also include amounts that have been set aside from the proceeds of our match funded advance facilities to provide for possible shortfalls in the funds available to pay certain expenses and interest, as well as amounts set aside as required by our warehouse facilities as security for our obligations under the related agreements. The funds are held in interest earning accounts and those amounts related to match funded facilities are held in the name of the SPE created in connection with the facility. |
Other Assets - Schedule of Ot80
Other Assets - Schedule of Other Assets (Footnote) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2015 | |
Other Assets [Abstract] | ||
Escrow deposit | $ 52.9 | |
Other Prepaid Expense, Current | $ 39.3 | $ 41.3 |
Period required to remit collections on pledged advances | 2 days |
Borrowings - Schedule of Match
Borrowings - Schedule of Match Funded Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Dec. 31, 2015 | ||
Debt Instrument [Line Items] | |||
Available borrowing capacity | $ 0 | ||
Match funded liabilities | $ 1,537,096 | $ 1,584,049 | |
Weighted average interest rate | 3.17% | 3.15% | |
Match Funded Liabilties [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1] | $ 212,904 | |
Match funded liabilities | 1,537,096 | $ 1,584,049 | |
Total Ocwen Master Advance Receivables Trust (OMART) [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1] | 176,230 | |
Match funded liabilities | 1,323,770 | 1,393,156 | |
Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes - Series 2014-VF3, Class A [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1] | 47,741 | |
Match funded liabilities | $ 113,944 | 132,651 | |
Maturity date | [2] | Sep. 30, 2046 | |
Amortization date | [2] | Sep. 30, 2016 | |
Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes - Series 2014-VF3, Class B [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1] | $ 2,172 | |
Match funded liabilities | $ 5,452 | 6,330 | |
Maturity date | [2] | Sep. 30, 2046 | |
Amortization date | [2] | Sep. 30, 2016 | |
Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes - Series 2014-VF3, Class C [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1] | $ 2,426 | |
Match funded liabilities | $ 6,009 | 6,977 | |
Maturity date | [2] | Sep. 30, 2046 | |
Amortization date | [2] | Sep. 30, 2016 | |
Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes - Series 2014-VF3, Class D [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1] | $ 6,404 | |
Match funded liabilities | $ 15,852 | 18,427 | |
Maturity date | [2] | Sep. 30, 2046 | |
Amortization date | [2] | Sep. 30, 2016 | |
Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes - Series 2014-VF4, Class A [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1] | $ 47,741 | |
Match funded liabilities | $ 113,944 | 132,651 | |
Maturity date | [2] | Sep. 30, 2046 | |
Amortization date | [2] | Sep. 30, 2016 | |
Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes - Series 2014-VF4, Class B [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1] | $ 2,172 | |
Match funded liabilities | $ 5,452 | 6,330 | |
Maturity date | [2] | Sep. 30, 2046 | |
Amortization date | [2] | Sep. 30, 2016 | |
Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes - Series 2014-VF4, Class C [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1] | $ 2,426 | |
Match funded liabilities | $ 6,009 | 6,977 | |
Maturity date | [2] | Sep. 30, 2046 | |
Amortization date | [2] | Sep. 30, 2016 | |
Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes - Series 2014-VF4, Class D [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1] | $ 6,404 | |
Match funded liabilities | $ 15,852 | 18,427 | |
Maturity date | [2] | Sep. 30, 2046 | |
Amortization date | [2] | Sep. 30, 2016 | |
Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes - Series 2015-VF5, Class A [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1] | $ 47,742 | |
Match funded liabilities | $ 113,943 | 132,652 | |
Maturity date | [2] | Sep. 30, 2046 | |
Amortization date | [2] | Sep. 30, 2016 | |
Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes - Series 2015-VF5, Class B [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1] | $ 2,172 | |
Match funded liabilities | $ 5,452 | 6,330 | |
Maturity date | [2] | Sep. 30, 2046 | |
Amortization date | [2] | Sep. 30, 2016 | |
Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes - Series 2015-VF5, Class C [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1] | $ 2,426 | |
Match funded liabilities | $ 6,009 | 6,977 | |
Maturity date | [2] | Sep. 30, 2046 | |
Amortization date | [2] | Sep. 30, 2016 | |
Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes - Series 2015-VF5, Class D [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1] | $ 6,404 | |
Match funded liabilities | $ 15,852 | 18,427 | |
Maturity date | [2] | Sep. 30, 2046 | |
Amortization date | [2] | Sep. 30, 2016 | |
Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes, Series 2015-T1,Class A [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1],[3] | $ 0 | |
Match funded liabilities | [3] | $ 244,809 | 244,809 |
Maturity date | [2],[3] | Sep. 30, 2046 | |
Amortization date | [2],[3] | Sep. 30, 2016 | |
Basis spread on variable rate | [3] | 2.5365% | |
Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes, Series 2015-T1,Class B [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1],[3] | $ 0 | |
Match funded liabilities | [3] | $ 10,930 | 10,930 |
Maturity date | [2],[3] | Sep. 30, 2046 | |
Amortization date | [2],[3] | Sep. 30, 2016 | |
Basis spread on variable rate | [3] | 3.0307% | |
Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes, Series 2015-T1,Class C [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1],[3] | $ 0 | |
Match funded liabilities | [3] | $ 12,011 | 12,011 |
Maturity date | [2],[3] | Sep. 30, 2046 | |
Amortization date | [2],[3] | Sep. 30, 2016 | |
Basis spread on variable rate | [3] | 3.524% | |
Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes, Series 2015-T1,Class D [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1],[3] | $ 0 | |
Match funded liabilities | [3] | $ 32,250 | 32,250 |
Maturity date | [2],[3] | Sep. 30, 2046 | |
Amortization date | [2],[3] | Sep. 30, 2016 | |
Basis spread on variable rate | [3] | 4.10% | |
Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes - Series 2015-T2,Class A [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1],[3] | $ 0 | |
Match funded liabilities | [3] | $ 161,973 | 161,973 |
Maturity date | [2],[3] | Nov. 30, 2046 | |
Amortization date | [2],[3] | Nov. 30, 2016 | |
Basis spread on variable rate | [3] | 2.532% | |
Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes - Series 2015-T2,Class B [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1],[3] | $ 0 | |
Match funded liabilities | [3] | $ 7,098 | 7,098 |
Maturity date | [2],[3] | Nov. 30, 2046 | |
Amortization date | [2],[3] | Nov. 30, 2016 | |
Basis spread on variable rate | [3] | 3.372% | |
Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes - Series 2015-T2,Class C [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1],[3] | $ 0 | |
Match funded liabilities | [3] | $ 8,113 | 8,113 |
Maturity date | [2],[3] | Nov. 30, 2046 | |
Amortization date | [2],[3] | Nov. 30, 2016 | |
Basis spread on variable rate | [3] | 3.766% | |
Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes - Series 2015-T2,Class D [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1],[3] | $ 0 | |
Match funded liabilities | [3] | $ 22,816 | 22,816 |
Maturity date | [2],[3] | Nov. 30, 2046 | |
Amortization date | [2],[3] | Nov. 30, 2016 | |
Basis spread on variable rate | [3] | 4.258% | |
Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes - Series 2015-T3,Class A [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1],[3] | $ 0 | |
Match funded liabilities | [3] | $ 310,195 | 310,195 |
Maturity date | [2],[3] | Nov. 30, 2047 | |
Amortization date | [2],[3] | Nov. 30, 2017 | |
Basis spread on variable rate | [3] | 3.211% | |
Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes - Series 2015-T3,Class B [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1],[3] | $ 0 | |
Match funded liabilities | [3] | $ 17,695 | 17,695 |
Maturity date | [2],[3] | Nov. 30, 2047 | |
Amortization date | [2],[3] | Nov. 30, 2017 | |
Basis spread on variable rate | [3] | 3.704% | |
Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes - Series 2015-T3,Class C [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1],[3] | $ 0 | |
Match funded liabilities | [3] | $ 19,262 | 19,262 |
Maturity date | [2],[3] | Nov. 30, 2047 | |
Amortization date | [2],[3] | Nov. 30, 2017 | |
Basis spread on variable rate | [3] | 4.196% | |
Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes - Series 2015-T3,Class D [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1],[3] | $ 0 | |
Match funded liabilities | [3] | $ 52,848 | 52,848 |
Maturity date | [2],[3] | Nov. 30, 2047 | |
Amortization date | [2],[3] | Nov. 30, 2017 | |
Basis spread on variable rate | [3] | 4.687% | |
Total Ocwen Servicer Advance Receivables Trust III (OSARTIII) [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1],[4] | $ 0 | |
Match funded liabilities | [4] | 90,000 | 51,415 |
Total Ocwen Servicer Advance Receivables Trust III (OSARTIII) [Member] | Advance Receivables Backed Notes, Series 2014-VF1,Class A [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1],[4] | 0 | |
Match funded liabilities | [4] | $ 58,221 | 31,343 |
Maturity date | [2],[4] | Dec. 31, 2046 | |
Amortization date | [2],[4] | Dec. 31, 2016 | |
Basis spread on variable rate | [4] | 2.70% | |
Total Ocwen Servicer Advance Receivables Trust III (OSARTIII) [Member] | Advance Receivables Backed Notes, Series 2014-VF1,Class B [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1],[4] | $ 0 | |
Match funded liabilities | [4] | $ 6,044 | 4,157 |
Maturity date | [2],[4] | Dec. 31, 2046 | |
Amortization date | [2],[4] | Dec. 31, 2016 | |
Basis spread on variable rate | [4] | 4.25% | |
Total Ocwen Servicer Advance Receivables Trust III (OSARTIII) [Member] | Advance Receivables Backed Notes, Series 2014-VF1,Class C [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1],[4] | $ 0 | |
Match funded liabilities | [4] | $ 6,783 | 4,564 |
Maturity date | [2],[4] | Dec. 31, 2046 | |
Amortization date | [2],[4] | Dec. 31, 2016 | |
Basis spread on variable rate | [4] | 4.70% | |
Total Ocwen Servicer Advance Receivables Trust III (OSARTIII) [Member] | Advance Receivables Backed Notes, Series 2014-VF1,Class D [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1],[4] | $ 0 | |
Match funded liabilities | [4] | $ 18,952 | 11,351 |
Maturity date | [2],[4] | Dec. 31, 2046 | |
Amortization date | [2],[4] | Dec. 31, 2016 | |
Basis spread on variable rate | [4] | 5.20% | |
Total Ocwen Freddie Advance Funding Facility (OFAF) [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1],[5] | $ 36,674 | |
Match funded liabilities | [5] | 123,326 | 139,478 |
Total Ocwen Freddie Advance Funding Facility (OFAF) [Member] | Advance Receivables Backed Notes, Series 2015-VF1,Class A [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1],[5] | 29,242 | |
Match funded liabilities | [5] | $ 100,323 | 112,882 |
Maturity date | [2],[5] | Jun. 30, 2046 | |
Amortization date | [2],[5] | Jun. 30, 2016 | |
Total Ocwen Freddie Advance Funding Facility (OFAF) [Member] | Advance Receivables Backed Notes, Series 2015-VF1,Class B [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1],[5] | $ 3,087 | |
Match funded liabilities | [5] | $ 10,637 | 12,268 |
Maturity date | [2],[5] | Jun. 30, 2046 | |
Amortization date | [2],[5] | Jun. 30, 2016 | |
Total Ocwen Freddie Advance Funding Facility (OFAF) [Member] | Advance Receivables Backed Notes, Series 2015-VF1,Class C [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1],[5] | $ 1,906 | |
Match funded liabilities | [5] | $ 5,134 | 5,951 |
Maturity date | [2],[5] | Jun. 30, 2046 | |
Amortization date | [2],[5] | Jun. 30, 2016 | |
Total Ocwen Freddie Advance Funding Facility (OFAF) [Member] | Advance Receivables Backed Notes, Series 2015-VF1,Class D [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | [1],[5] | $ 2,439 | |
Match funded liabilities | [5] | $ 7,232 | $ 8,377 |
Maturity date | [2],[5] | Jun. 30, 2046 | |
Amortization date | [2],[5] | Jun. 30, 2016 | |
London Interbank Offered Rate (LIBOR) [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 0.75% | ||
London Interbank Offered Rate (LIBOR) [Member] | Advance Receivables Backed Notes - Series 2014-VF3, Class A [Member] | |||
Debt Instrument [Line Items] | |||
Weighted average interest rate | 0.44% | 0.43% | |
London Interbank Offered Rate (LIBOR) [Member] | Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes - Series 2014-VF3, Class A [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | [6],[7] | 2.35% | |
London Interbank Offered Rate (LIBOR) [Member] | Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes - Series 2014-VF3, Class B [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | [7] | 3.00% | |
London Interbank Offered Rate (LIBOR) [Member] | Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes - Series 2014-VF3, Class C [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | [7] | 4.25% | |
London Interbank Offered Rate (LIBOR) [Member] | Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes - Series 2014-VF3, Class D [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | [7] | 5.75% | |
London Interbank Offered Rate (LIBOR) [Member] | Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes - Series 2014-VF4, Class A [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | [7] | 2.35% | |
London Interbank Offered Rate (LIBOR) [Member] | Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes - Series 2014-VF4, Class B [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | [7] | 3.00% | |
London Interbank Offered Rate (LIBOR) [Member] | Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes - Series 2014-VF4, Class C [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | [7] | 4.25% | |
London Interbank Offered Rate (LIBOR) [Member] | Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes - Series 2014-VF4, Class D [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | [7] | 5.75% | |
London Interbank Offered Rate (LIBOR) [Member] | Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes - Series 2015-VF5, Class A [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | [7] | 2.35% | |
London Interbank Offered Rate (LIBOR) [Member] | Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes - Series 2015-VF5, Class B [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | [7] | 3.00% | |
London Interbank Offered Rate (LIBOR) [Member] | Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes - Series 2015-VF5, Class C [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | [7] | 4.25% | |
London Interbank Offered Rate (LIBOR) [Member] | Total Ocwen Master Advance Receivables Trust (OMART) [Member] | Advance Receivables Backed Notes - Series 2015-VF5, Class D [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | [7] | 5.75% | |
London Interbank Offered Rate (LIBOR) [Member] | Total Ocwen Freddie Advance Funding Facility (OFAF) [Member] | Advance Receivables Backed Notes, Series 2015-VF1,Class A [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | [5] | 2.125% | |
London Interbank Offered Rate (LIBOR) [Member] | Total Ocwen Freddie Advance Funding Facility (OFAF) [Member] | Advance Receivables Backed Notes, Series 2015-VF1,Class B [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | [5] | 3.00% | |
London Interbank Offered Rate (LIBOR) [Member] | Total Ocwen Freddie Advance Funding Facility (OFAF) [Member] | Advance Receivables Backed Notes, Series 2015-VF1,Class C [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | [5] | 3.50% | |
London Interbank Offered Rate (LIBOR) [Member] | Total Ocwen Freddie Advance Funding Facility (OFAF) [Member] | Advance Receivables Backed Notes, Series 2015-VF1,Class D [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | [5] | 4.25% | |
[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 March 31, 2016, none of the available borrowing capacity could be used based on the amount of eligible collateral that had been pledged. | ||
[2] | 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. | ||
[3] | Under the terms of the agreement, we must continue to borrow the full amount of the Series 2015-T1, T2 and T3 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. | ||
[4] | On March 31, 2016, the maximum borrowing under the OSART III facility was increased to $90.0 million. | ||
[5] | On March 31, 2016, the combined borrowing capacity of the Series 2015-VF1 Notes was increased to $160.0 million. | ||
[6] | 1-Month LIBOR was 0.44% and 0.43% at March 31, 2016 and December 31, 2015, respectively. | ||
[7] | There is a ceiling of 75 bps for 1 ML in determining the interest rate for these variable rate notes. |
Borrowings - Schedule of Matc82
Borrowings - Schedule of Match Funded Liabilities (Footnote) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Dec. 31, 2015 | ||
Debt Instrument [Line Items] | |||
Available borrowing capacity that could be used based on amount of eligible collateral pledged | $ 0 | ||
Debt instrument, interest rate | 3.17% | 3.15% | |
Series 2015 VF Notes [Member] | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 160,000 | ||
Total Ocwen Servicer Advance Receivables Trust III (OSARTIII) [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity that could be used based on amount of eligible collateral pledged | [1],[2] | 0 | |
Maximum borrowing capacity | $ 90,000 | ||
London Interbank Offered Rate (LIBOR) [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 0.75% | ||
London Interbank Offered Rate (LIBOR) [Member] | Advance Receivables Backed Notes - Series 2014-VF3, Class A [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate | 0.44% | 0.43% | |
[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 March 31, 2016, none of the available borrowing capacity could be used based on the amount of eligible collateral that had been pledged. | ||
[2] | On March 31, 2016, the maximum borrowing under the OSART III facility was increased to $90.0 million. |
Borrowings - Narrative (Details
Borrowings - Narrative (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2015 | May. 12, 2014 | |
Debt Instrument [Line Items] | ||||
Unamortized debt issuance costs | $ 23,500,000 | $ 24,500,000 | ||
NRZ [Member] | ||||
Debt Instrument [Line Items] | ||||
Primary servicing UPB | 132,700,000,000 | 137,100,000,000 | $ 156,300,000,000 | |
Outstanding servicing advances | $ 4,900,000,000 | |||
Unsecured Debt [Member] | ||||
Debt Instrument [Line Items] | ||||
Maturity date | May 15, 2019 | |||
Unsecured Debt [Member] | 6.625% Senior Notes due 2019 | ||||
Debt Instrument [Line Items] | ||||
Face amount | $ 350,000,000 | |||
Unamortized debt issuance costs | $ 4,200,000 | $ 4,500,000 | ||
Servicing [Member] | ||||
Debt Instrument [Line Items] | ||||
Covenant compliance, consolidated tangible net worth at period end | 1,100,000,000 | |||
Lending [Member] | ||||
Debt Instrument [Line Items] | ||||
Covenant compliance, consolidated tangible net worth at period end | $ 600,000,000 |
Borrowings - Schedule of Financ
Borrowings - Schedule of Financing Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Dec. 31, 2015 | ||
Debt Instrument [Line Items] | |||
Total Financing liabilities | $ 3,319,646 | $ 3,089,255 | |
Financing Liabilities [Member] | |||
Debt Instrument [Line Items] | |||
Total Financing liabilities | 3,319,646 | 3,089,255 | |
HMBS - Related Borrowings [Member] | |||
Debt Instrument [Line Items] | |||
Total Financing liabilities | 2,600,000 | 2,400,000 | |
Servicing [Member] | Financing Liabilities [Member] | |||
Debt Instrument [Line Items] | |||
Total Financing liabilities | 671,546 | 697,893 | |
Servicing [Member] | Financing liability – MSRs pledged [Member] | Financing Liabilities [Member] | |||
Debt Instrument [Line Items] | |||
Total Financing liabilities | [1] | $ 523,503 | 541,704 |
Servicing [Member] | Secured Notes, Ocwen Asset Servicing Income Series, Series 2014-1 [Member] | Financing Liabilities [Member] | |||
Debt Instrument [Line Items] | |||
Maturity date | [2] | Feb. 28, 2028 | |
Total Financing liabilities | [2] | $ 93,217 | 96,546 |
Servicing [Member] | Financing Liability – Advances Pledged [Member] | Financing Liabilities [Member] | |||
Debt Instrument [Line Items] | |||
Total Financing liabilities | [3] | $ 54,826 | 59,643 |
Lending [Member] | HMBS - Related Borrowings [Member] | Financing Liabilities [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | [4] | 2.48% | |
Total Financing liabilities | [4] | $ 2,648,100 | $ 2,391,362 |
London Interbank Offered Rate (LIBOR) [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 0.75% | ||
[1] | This financing liability arose in connection with the NRZ/HLSS Transactions and has no contractual maturity or repayment schedule. 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 Fina85
Borrowings - Schedule of Financing Liabilities (Footnote) (Details) | 3 Months Ended |
Mar. 31, 2016 | |
OASIS Series 2014-1 [Member] | |
Debt Instrument [Line Items] | |
Basis spread on UPB | 0.21% |
Borrowings - Schedule of Other
Borrowings - Schedule of Other Secured Borrowings (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Dec. 31, 2015 | ||
Line of Credit Facility [Line Items] | |||
Available borrowing capacity | $ 0 | ||
Other secured borrowings | 3,319,646 | $ 3,089,255 | |
Unamortized debt issuance costs - SSTL | (23,500) | (24,500) | |
Other Secured Borrowings [Member] | |||
Line of Credit Facility [Line Items] | |||
Available borrowing capacity | 134,529 | ||
Unamortized debt issuance costs - SSTL | (19,321) | (20,012) | |
Discount - SSTL | (1,146) | (1,351) | |
Long-term Debt | $ 718,830 | $ 762,411 | |
Weighted average interest rate | 4.46% | 4.38% | |
Servicing [Member] | Other Secured Borrowings [Member] | |||
Line of Credit Facility [Line Items] | |||
Available borrowing capacity | $ 15,549 | ||
Other secured borrowings | 414,346 | $ 441,427 | |
Lending [Member] | Other Secured Borrowings [Member] | |||
Line of Credit Facility [Line Items] | |||
Available borrowing capacity | 118,980 | ||
Other secured borrowings | 324,951 | 342,347 | |
Senior Secured Term Loan [Member] | Servicing [Member] | Other Secured Borrowings [Member] | |||
Line of Credit Facility [Line Items] | |||
Available borrowing capacity | [1] | 0 | |
Other secured borrowings | [1] | $ 379,895 | 398,454 |
Maturity date | [1] | Feb. 28, 2018 | |
Repurchase Agreements [Member] | Servicing [Member] | Other Secured Borrowings [Member] | |||
Line of Credit Facility [Line Items] | |||
Available borrowing capacity | [2] | $ 15,549 | |
Other secured borrowings | [2] | $ 34,451 | 42,973 |
Maturity date | [2] | Sep. 30, 2016 | |
Master Repurchase Agreement [Member] | Lending [Member] | Other Secured Borrowings [Member] | |||
Line of Credit Facility [Line Items] | |||
Available borrowing capacity | [3] | $ 70,238 | |
Other secured borrowings | [3] | $ 129,762 | 156,226 |
Maturity date | [3] | Aug. 31, 2016 | |
Participation Agreement [Member] | Lending [Member] | Other Secured Borrowings [Member] | |||
Line of Credit Facility [Line Items] | |||
Available borrowing capacity | [4] | $ 0 | |
Other secured borrowings | [4] | $ 28,824 | 49,897 |
Maturity date | [4] | Apr. 30, 2016 | |
Participation Agreement [Member] | Lending [Member] | Other Secured Borrowings [Member] | |||
Line of Credit Facility [Line Items] | |||
Available borrowing capacity | [5] | $ 0 | |
Other secured borrowings | [5] | $ 115,107 | 73,049 |
Maturity date | [5] | Apr. 30, 2016 | |
Mortgage Warehouse Agreement [Member] | Lending [Member] | Other Secured Borrowings [Member] | |||
Line of Credit Facility [Line Items] | |||
Available borrowing capacity | [6] | $ 0 | |
Other secured borrowings | [6] | $ 0 | 63,175 |
Maturity date | [6] | May 31, 2016 | |
Interest rate at index floor rate | [6] | 3.50% | |
Master Repurchase Agreement [Member] | Lending [Member] | Other Secured Borrowings [Member] | |||
Line of Credit Facility [Line Items] | |||
Available borrowing capacity | [7] | $ 48,742 | |
Other secured borrowings | [7] | $ 51,258 | 0 |
Maturity date | [7] | Jan. 31, 2017 | |
Total Servicing Lines Of Credit [Member] | Other Secured Borrowings [Member] | |||
Line of Credit Facility [Line Items] | |||
Available borrowing capacity | $ 134,529 | ||
Other secured borrowings | $ 739,297 | $ 783,774 | |
London Interbank Offered Rate (LIBOR) [Member] | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 0.75% | ||
London Interbank Offered Rate (LIBOR) [Member] | Master Repurchase Agreement [Member] | Lending [Member] | Other Secured Borrowings [Member] | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | [3] | 2.00% | |
London Interbank Offered Rate (LIBOR) [Member] | Mortgage Warehouse Agreement [Member] | Lending [Member] | Other Secured Borrowings [Member] | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | [6] | 2.75% | |
Eurodollar [Member] | Senior Secured Term Loan [Member] | Servicing [Member] | Other Secured Borrowings [Member] | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | [1] | 4.25% | |
Interest rate at index floor rate | [1] | 1.25% | |
Minimum [Member] | London Interbank Offered Rate (LIBOR) [Member] | Repurchase Agreements [Member] | Servicing [Member] | Other Secured Borrowings [Member] | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | [2] | 2.00% | |
Minimum [Member] | London Interbank Offered Rate (LIBOR) [Member] | Master Repurchase Agreement [Member] | Lending [Member] | Other Secured Borrowings [Member] | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | [7] | 2.75% | |
Maximum [Member] | London Interbank Offered Rate (LIBOR) [Member] | Repurchase Agreements [Member] | Servicing [Member] | Other Secured Borrowings [Member] | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | [2] | 3.45% | |
Maximum [Member] | London Interbank Offered Rate (LIBOR) [Member] | Master Repurchase Agreement [Member] | Lending [Member] | Other Secured Borrowings [Member] | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | [7] | 0.25% | |
[1] | The borrowings are secured by a first priority security interest in substantially all of the assets of Ocwen. Borrowings bear interest, at the election of Ocwen, at a rate per annum equal to either (a) the base rate (the greatest of (i) the prime rate in effect on such day, (ii) the federal funds rate in effect on such day plus 0.50% and (iii) the one-month Eurodollar rate (1-Month LIBOR)), plus a margin of 3.25% and subject to a base rate floor of 2.25% or (b) the one month Eurodollar rate, plus a margin of 4.25% and subject to a one month Eurodollar floor of 1.25%. To date we have elected option (b) to determine the interest rate.We entered into Amendment No. 5 to Senior Secured Term Loan Facility Agreement (the Amendment) effective as of March 28, 2016. The Amendment, among other things:•permanently removes the consolidated total debt to consolidated tangible net worth ratio, corporate leverage ratio and interest coverage ratio financial covenants;•maintains the loan-to-value ratio covenant at its current 40% level throughout the remaining term of the SSTL;•limits the repurchase of Ocwen’s common stock or options to an amount not to exceed the sum of (i) $20 million plus (ii) an amount equal to (x) $20 million times (y) the aggregate amount of prepayments on the SSTL made after March 28, 2016 divided by $50 million;•limits the repurchase of Ocwen’s 6.625% Senior Notes (the Senior Unsecured Notes) due 2019 to an amount not to exceed the sum of (i) $30 million plus (ii) an amount equal to (x) $30 million times (y) the aggregate amount of prepayments on the SSTL made after March 28, 2016 divided by $50 million;•requires that we make a prepayment on the SSTL in an amount equal to $6.3 million (for a total of $19.0 million) on each of May 31, 2016, July 29, 2016 and September 30, 2016; and•provides for a fee payable to the consenting lenders equal to 1.0% of the aggregate amount of such consenting lenders’ SSTL loans outstanding. | ||
[2] | The maximum borrowing under this facility is 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] | 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 April 11, 2016, we negotiated an extension of this agreement to May 15, 2016 and reduced the maximum borrowing to $75.0 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 April 11, 2016, we negotiated an extension of this agreement to May 15, 2016 and increased the maximum borrowing to $175.0 million. | ||
[6] | Borrowing capacity of $100.0 million under this facility is available at the discretion of the lender. | ||
[7] | We entered into this agreement on January 5, 2016. The lender provides financing on a committed basis for $100.0 million. |
Borrowings - Schedule of Othe87
Borrowings - Schedule of Other Secured Borrowings (Footnote) (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2016 | Apr. 11, 2016 | Aug. 25, 2015 | ||
Debt Instrument [Line Items] | ||||
Periodic prepayment of SSTL | $ 6,300,000 | |||
Repurchase Agreements [Member] | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 550,000,000 | |||
Percentage of maximum borrowing available on committed basis | 50.00% | |||
Percentage of maximum borrowing available at discretion of lender | 50.00% | |||
Repurchase Agreements [Member] | Maximum [Member] | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 100,000,000 | |||
London Interbank Offered Rate (LIBOR) [Member] | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 0.75% | |||
Other Secured Borrowings [Member] | Amended Senior Secured Term Loan [Member] | ||||
Debt Instrument [Line Items] | ||||
Percentage of loan to value | 40.00% | |||
Permissible amount of repurchase of common stock | $ 20,000,000 | |||
Amount in multiples of aggregate amount of prepayments on senior secured term loan | 20,000,000 | |||
Base amount determined to divide amount in multiples of aggregate amount of prepayments on senior secured term loan | 50,000,000 | |||
Periodic prepayment of SSTL | 6,300,000 | |||
Aggregate prepayment of SSTL | $ 19,000,000 | |||
Percentage of fee charged on total loan outstanding | 1.00% | |||
Other Secured Borrowings [Member] | Master Repurchase Agreement [Member] | Lending [Member] | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 200,000,000 | |||
Other Secured Borrowings [Member] | Participation Agreement [Member] | Lending [Member] | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 100,000,000 | |||
Beneficial interest | 100.00% | |||
Other Secured Borrowings [Member] | Participation Agreement [Member] | Lending [Member] | Subsequent Event [Member] | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 75,000,000 | |||
Other Secured Borrowings [Member] | Participation Agreement [Member] | Lending [Member] | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 150,000,000 | |||
Beneficial interest | 100.00% | |||
Other Secured Borrowings [Member] | Participation Agreement [Member] | Lending [Member] | Subsequent Event [Member] | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 175,000,000 | |||
Other Secured Borrowings [Member] | Mortgage Warehouse Agreement [Member] | Lending [Member] | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | [1] | $ 100,000,000 | ||
Other Secured Borrowings [Member] | Master Repurchase Agreement [Member] | Lending [Member] | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | [1] | $ 100,000,000 | ||
Other Secured Borrowings [Member] | London Interbank Offered Rate (LIBOR) [Member] | Repurchase Agreements [Member] | Minimum [Member] | Servicing [Member] | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | [2] | 2.00% | ||
Other Secured Borrowings [Member] | London Interbank Offered Rate (LIBOR) [Member] | Repurchase Agreements [Member] | Maximum [Member] | Servicing [Member] | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | [2] | 3.45% | ||
Other Secured Borrowings [Member] | London Interbank Offered Rate (LIBOR) [Member] | Master Repurchase Agreement [Member] | Lending [Member] | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | [3] | 2.00% | ||
Other Secured Borrowings [Member] | London Interbank Offered Rate (LIBOR) [Member] | Mortgage Warehouse Agreement [Member] | Lending [Member] | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | [4] | 2.75% | ||
Other Secured Borrowings [Member] | London Interbank Offered Rate (LIBOR) [Member] | Master Repurchase Agreement [Member] | Minimum [Member] | Lending [Member] | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | [1] | 2.75% | ||
Other Secured Borrowings [Member] | London Interbank Offered Rate (LIBOR) [Member] | Master Repurchase Agreement [Member] | Maximum [Member] | Lending [Member] | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | [1] | 0.25% | ||
Other Secured Borrowings [Member] | Senior Secured Term Loan Option One [Member] | Federal Funds Rate [Member] | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 0.50% | |||
Other Secured Borrowings [Member] | Senior Secured Term Loan Option One [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 3.25% | |||
Other Secured Borrowings [Member] | Senior Secured Term Loan Option One [Member] | Base Rate [Member] | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 2.25% | |||
Other Secured Borrowings [Member] | Senior Secured Term Loan Option Two [Member] | Eurodollar [Member] | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 4.25% | |||
Other Secured Borrowings [Member] | Senior Secured Term Loan Option Two [Member] | Eurodollar Floor [Member] | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 1.25% | |||
Unsecured Debt [Member] | 6.625% Senior Notes due 2019 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument stated percentage of interest | 6.625% | |||
Unsecured Debt [Member] | 6.625% Senior Notes due 2019 | Amended Senior Secured Term Loan [Member] | ||||
Debt Instrument [Line Items] | ||||
Amount in multiples of aggregate amount of prepayments on senior secured term loan | $ 30,000,000 | |||
Base amount determined to divide amount in multiples of aggregate amount of prepayments on senior secured term loan | 50,000,000 | |||
Permissible amount of repurchase of senior unsecured notes | $ 30,000,000 | |||
[1] | We entered into this agreement on January 5, 2016. The lender provides financing on a committed basis for $100.0 million. | |||
[2] | The maximum borrowing under this facility is 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] | Under this repurchase agreement, the lender provides financing on a committed basis for $200.0 million. | |||
[4] | Borrowing capacity of $100.0 million under this facility is available at the discretion of the lender. |
Other Liabilities - Schedule of
Other Liabilities - Schedule of Other Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | |
Other Liabilities Disclosure [Abstract] | |||||
Contingent loan repurchase liability | [1] | $ 316,002 | $ 346,984 | ||
Accrued expenses | 178,046 | 188,856 | |||
Liability for uncertain tax positions | 48,328 | 44,751 | |||
Liability for indemnification obligations | 32,329 | 36,615 | $ 119,182 | $ 132,918 | |
Payable to loan servicing and subservicing investors | 26,290 | 15,941 | |||
Checks held for escheat | 15,131 | 14,301 | |||
Accrued interest payable | 9,496 | 3,667 | |||
Derivatives, at fair value | 5,291 | 0 | |||
Other | 116,310 | 93,329 | |||
Total other liabilities | $ 747,223 | $ 744,444 | |||
[1] | In connection with the Ginnie Mae EBO Transactions, we have re-recognized certain loans on our consolidated balance sheets and establish a corresponding repurchase liability regardless of our intention to repurchase the loan. |
Derivative Financial Instrume89
Derivative Financial Instruments and Hedging Activities - Schedule of Changes in Notional Balance of Holdings of Derivatives (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2015 | |
Fair value of derivative assets (liabilities) at: | ||
Derivatives, at fair value | $ 14,115 | $ 6,367 |
Interest Rate Lock Commitments [Member] | ||
Derivative Notional Balance [Roll Forward] | ||
Beginning notional balance | 278,317 | |
Additions | 1,460,093 | |
Amortization | 0 | |
Maturities | (1,017,006) | |
Terminations | (241,099) | |
Ending notional balance | 480,305 | |
Fair value of derivative assets (liabilities) at: | ||
Derivatives, at fair value | $ 13,545 | 6,080 |
Maturity | Apr. 2016 - Jun. 2016 | |
Forward MBS Trades [Member] | ||
Derivative Notional Balance [Roll Forward] | ||
Beginning notional balance | $ 632,720 | |
Additions | 1,100,531 | |
Amortization | 0 | |
Maturities | (392,398) | |
Terminations | (514,460) | |
Ending notional balance | 826,393 | |
Fair value of derivative assets (liabilities) at: | ||
Derivatives, at fair value | $ (5,291) | 295 |
Maturity | June 2,016 | |
Interest Rate Caps [Member] | ||
Derivative Notional Balance [Roll Forward] | ||
Beginning notional balance | $ 2,110,000 | |
Additions | 25,000 | |
Amortization | (400,000) | |
Maturities | 0 | |
Terminations | (50,000) | |
Ending notional balance | 1,685,000 | |
Fair value of derivative assets (liabilities) at: | ||
Derivatives, at fair value | $ 570 | $ 2,042 |
Maturity | Nov. 2016 - Dec. 2017 |
Derivative Financial Instrume90
Derivative Financial Instruments and Hedging Activities - Schedule of Gains (Losses) on Derivatives (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Dec. 31, 2015 | ||
Not Designated as Hedging Instrument [Member] | |||
Hedge the effect of changes in interest rates on interest expense on borrowings | |||
Fair Value | [1] | $ 8,824 | |
Gains / (Losses) | (7,128) | ||
Interest Rate Caps [Member] | |||
Hedge the effect of changes in interest rates on interest expense on borrowings | |||
Notional Amount | 1,685,000 | $ 2,110,000 | |
IRLCs [Member] | |||
Hedge the effect of changes in interest rates on interest expense on borrowings | |||
Notional Amount | $ 480,305 | $ 278,317 | |
Other Net [Member] | Interest Rate Caps [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] | $ 1,685,000 | |
Fair Value | [1],[2] | 570 | |
Gains / (Losses) | [2] | $ (1,391) | |
Consolidated Statements of Operations Caption | [2] | Other, net | |
Gain On Loans Held For Sale Net [Member] | Forward MBS Trades [Member] | Not Designated as Hedging Instrument [Member] | |||
Hedge the effect of changes in interest rates on interest expense on borrowings | |||
Expiration Date | June 2,016 | ||
Notional Amount | $ 826,393 | ||
Fair Value | [1] | (5,291) | |
Gains / (Losses) | $ (13,202) | ||
Consolidated Statements of Operations Caption | Gain on loans held for sale, net | ||
Gain On Loans Held For Sale Net [Member] | IRLCs [Member] | Not Designated as Hedging Instrument [Member] | |||
Hedge the effect of changes in interest rates on interest expense on borrowings | |||
Expiration Date | Apr. 2016 - Jun. 2016 | ||
Notional Amount | $ 480,305 | ||
Fair Value | [1] | 13,545 | |
Gains / (Losses) | $ 7,465 | ||
Consolidated Statements of Operations Caption | Gain on loans held for sale, net | ||
[1] | Derivatives are reported at fair value in Other assets or in Other liabilities on our Unaudited Consolidated Balance Sheets. | ||
[2] | To hedge the effect of changes in 1ML on advance funding facilities. |
Derivative Financial Instrume91
Derivative Financial Instruments and Hedging Activities - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Unrealized gain (loss) on derivatives arising during period, before tax | $ 1.6 | $ 8.3 |
Other comprehensive income (loss), tax | 0.1 | $ 0.5 |
Projected amortization of unrealized losses from AOCL to earnings, coming twelve months | $ 0.3 |
Derivative Financial Instrume92
Derivative Financial Instruments and Hedging Activities - Schedule of Changes in AOCL (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning balance | $ 1,763 | |
Ending balance | 1,658 | |
Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning balance | 1,763 | $ 8,413 |
Losses on terminated hedging relationships amortized to earnings | (105) | (443) |
Decrease in deferred taxes on accumulated losses on cash flow hedges | 0 | 25 |
Decrease in accumulated losses on cash flow hedges, net of taxes | (105) | (418) |
Ending balance | $ 1,658 | $ 7,995 |
Derivative Financial Instrume93
Derivative Financial Instruments and Hedging Activities - Schedule of Other Income (Expense), Net Related to Derivative Financial Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Losses on economic hedges | $ (1,391) | $ (710) |
Write-off of losses in AOCL for a discontinued hedge relationship | (105) | (443) |
Loss on derivatives | $ (1,496) | $ (1,153) |
Interest Expense - Schedule of
Interest Expense - Schedule of Components of Interest Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | ||
Debt securities: | |||
Interest expense | $ 106,089 | $ 119,396 | |
Financing Liabilities [Member] | |||
Debt securities: | |||
Interest expense | [1],[2] | 67,707 | 73,824 |
Match Funded Liabilties [Member] | |||
Debt securities: | |||
Interest expense | 18,174 | 14,280 | |
Other Secured Borrowings [Member] | |||
Debt securities: | |||
Interest expense | 12,713 | 22,916 | |
6.625% Senior Unsecured Notes [Member] | |||
Debt securities: | |||
Interest expense | 6,208 | 6,129 | |
Other [Member] | |||
Debt securities: | |||
Interest expense | $ 1,287 | $ 2,247 | |
[1] | Includes $6.2 million of fees incurred during the three months ended March 31, 2016 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. 2016 2015Servicing fees collected on behalf of NRZ/HLSS$162,129 $180,297Less: Subservicing fee retained by Ocwen84,370 91,214Net servicing fees remitted to NRZ/HLSS77,759 89,083Less: Reduction in financing liability18,201 17,723Interest expense on NRZ/HLSS financing liability$59,558$71,360 |
Interest Expense - Schedule o95
Interest Expense - Schedule of Components of Interest Expense (Footnote) (Details) $ in Millions | Mar. 31, 2016USD ($) |
NRZ [Member] | |
Schedule of Interest Expense [Line Items] | |
Expenses in connection with downgrade in servicers rating | $ 6.2 |
Interest Expense - Schedule o96
Interest Expense - Schedule of Related Party Interest Expense (Details) - NRZ [Member] - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Schedule of Interest Expense [Line Items] | ||
Servicing fees collected on behalf of NRZ/HLSS | $ 162,129 | $ 180,297 |
Less: Subservicing fee retained by Ocwen | 84,370 | 91,214 |
Net servicing fees remitted to NRZ/HLSS | 77,759 | 89,083 |
Less: Reduction in financing liability | 18,201 | 17,723 |
Interest expense on NRZ/HLSS financing liability | $ 59,558 | $ 71,360 |
Basic and Diluted Earnings pe97
Basic and Diluted Earnings per Share - Schedule of Reconciliation of Calculation of Basic Earnings per Share to Diluted Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | ||
Basic earnings per share: | |||
Net income (loss) attributable to Ocwen common stockholders | [1] | $ (111,331) | $ 34,355 |
Weighted average shares of common stock (in shares) | 124,093,339 | 125,272,228 | |
Basic earnings (loss) per share (in USD per share) | $ (0.90) | $ 0.27 | |
Diluted earnings per share: | |||
Net income (loss) attributable to Ocwen common stockholders | [1] | $ (111,331) | $ 34,355 |
Weighted average shares of common stock (in shares) | 124,093,339 | 125,272,228 | |
Effect of dilutive elements: | |||
Stock options (in shares) | [1] | 0 | 1,725,280 |
Common stock awards (in shares) | [1] | 0 | 2,154 |
Dilutive weighted average shares of common stock (in shares) | 124,093,339 | 126,999,662 | |
Diluted earnings (loss) per share (in USD per share) | $ (0.90) | $ 0.27 | |
Stock options and common stock awards excluded from the computation of diluted earnings per share: | |||
Anti-dilutive Securities (in shares) | [2] | 6,985,914 | 2,010,902 |
Market Based [Member] | |||
Stock options and common stock awards excluded from the computation of diluted earnings per share: | |||
Anti-dilutive Securities (in shares) | [3] | 2,080,938 | 851,263 |
[1] | For the three months ended March 31, 2016, we have excluded the effect of 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] | These stock options were anti-dilutive because their exercise price was greater than the average market price of our stock. | ||
[3] | Shares that are issuable upon the achievement of certain performance criteria related to Ocwen’s stock price. |
Business Segment Reporting - Sc
Business Segment Reporting - Schedule of Segment Reporting Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | ||
Results of Operations | ||||
Revenue | [1] | $ 330,757 | $ 510,444 | |
Expenses | [1],[2] | 328,657 | 378,358 | |
Other income (expense): | ||||
Interest income | 4,190 | 5,575 | ||
Interest expense | (106,089) | (119,396) | ||
Gain on sale of mortgage servicing rights, net | 1,175 | 26,406 | ||
Other | [1] | (3,501) | (1,842) | |
Other income (expense), net | (104,225) | (89,257) | ||
Income (loss) before income taxes | (102,125) | 42,829 | ||
Total Assets | ||||
Balance | 7,407,110 | 8,353,962 | $ 7,380,308 | |
Servicing [Member] | ||||
Results of Operations | ||||
Revenue | [1] | 307,427 | 471,125 | |
Expenses | [1],[2] | 276,896 | 337,911 | |
Other income (expense): | ||||
Interest income | (147) | 1,371 | ||
Interest expense | (96,474) | (110,629) | ||
Gain on sale of mortgage servicing rights, net | 1,175 | 26,406 | ||
Other | [1] | (3,343) | (3,640) | |
Other income (expense), net | (98,789) | (86,492) | ||
Income (loss) before income taxes | (68,258) | 46,722 | ||
Total Assets | ||||
Balance | 3,807,685 | 5,706,301 | 4,089,064 | |
Lending [Member] | ||||
Results of Operations | ||||
Revenue | [1] | 23,285 | 37,746 | |
Expenses | [1],[2] | 21,799 | 23,785 | |
Other income (expense): | ||||
Interest income | 3,611 | 3,596 | ||
Interest expense | (3,448) | (2,639) | ||
Gain on sale of mortgage servicing rights, net | 0 | 0 | ||
Other | [1] | 351 | 1,065 | |
Other income (expense), net | 514 | 2,022 | ||
Income (loss) before income taxes | 2,000 | 15,983 | ||
Total Assets | ||||
Balance | 3,116,531 | 2,165,742 | 2,811,154 | |
Corporate Items and Other [Member] | ||||
Results of Operations | ||||
Revenue | [1] | 45 | 1,608 | |
Expenses | [1],[2] | 29,962 | 16,697 | |
Other income (expense): | ||||
Interest income | 726 | 608 | ||
Interest expense | (6,167) | (6,128) | ||
Gain on sale of mortgage servicing rights, net | 0 | 0 | ||
Other | [1] | (509) | 733 | |
Other income (expense), net | (5,950) | (4,787) | ||
Income (loss) before income taxes | (35,867) | (19,876) | ||
Total Assets | ||||
Balance | 482,894 | 481,919 | 480,090 | |
Corporate Eliminations [Member] | ||||
Results of Operations | ||||
Revenue | [1] | 0 | (35) | |
Expenses | [1],[2] | 0 | (35) | |
Other income (expense): | ||||
Interest income | 0 | 0 | ||
Interest expense | 0 | 0 | ||
Gain on sale of mortgage servicing rights, net | 0 | 0 | ||
Other | [1] | 0 | 0 | |
Other income (expense), net | 0 | 0 | ||
Income (loss) before income taxes | 0 | 0 | ||
Total Assets | ||||
Balance | $ 0 | $ 0 | $ 0 | |
[1] | Intersegment billings for services rendered to other segments are recorded as revenues, as contra-expense or as other income, depending on the type of service that is rendered. | |||
[2] | Depreciation and amortization expense are as follows: Servicing Lending Corporate Items and Other Business Segments ConsolidatedFor the three months ended March 31, 2016Depreciation expense$1,135 $72 $3,832 $5,039Amortization of mortgage servicing rights12,725 81 — 12,806Amortization of debt discount206 — — 206Amortization of debt issuance costs 2,933 — 344 3,277 For the three months ended March 31, 2015Depreciation expense$529 $104 $3,711 $4,344Amortization of mortgage servicing rights38,405 89 — 38,494Amortization of debt discount356 — — 356Amortization of debt issuance costs 3,423 — 332 3,755 |
Business Segment Reporting - 99
Business Segment Reporting - Schedule of Depreciation and Amortization by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Segment Reporting Information [Line Items] | ||
Depreciation expense | $ 5,039 | $ 4,344 |
Amortization of mortgage servicing rights | 12,806 | 38,494 |
Amortization of debt discount | 206 | 356 |
Amortization of debt issuance costs | 3,277 | 3,755 |
Servicing [Member] | ||
Segment Reporting Information [Line Items] | ||
Depreciation expense | 1,135 | 529 |
Amortization of mortgage servicing rights | 12,725 | 38,405 |
Amortization of debt discount | 206 | 356 |
Amortization of debt issuance costs | 2,933 | 3,423 |
Lending [Member] | ||
Segment Reporting Information [Line Items] | ||
Depreciation expense | 72 | 104 |
Amortization of mortgage servicing rights | 81 | 89 |
Amortization of debt discount | 0 | 0 |
Amortization of debt issuance costs | 0 | 0 |
Corporate Items and Other [Member] | ||
Segment Reporting Information [Line Items] | ||
Depreciation expense | 3,832 | 3,711 |
Amortization of mortgage servicing rights | 0 | 0 |
Amortization of debt discount | 0 | 0 |
Amortization of debt issuance costs | $ 344 | $ 332 |
Regulatory Requirements - Narra
Regulatory Requirements - Narrative (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Brokers and Dealers [Abstract] | |
Capital requirement, unpaid principal balance | $ 513.1 |
Number of days from fiscal year end that servicer is obliged to provide audited financial statements | 90 days |
Commitments - Narrative (Detail
Commitments - Narrative (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended |
Dec. 21, 2012 | Mar. 31, 2016 | |
Altisource [Member] | ||
Other Commitments [Line Items] | ||
Automatic renewal term of support services agreement | 1 year | |
Altisource Residential Lp [Member] | ||
Other Commitments [Line Items] | ||
Term of agreement | 15 years | |
Floating Rate Reverse Mortgage Loans [Member] | ||
Other Commitments [Line Items] | ||
Additional borrowing capacity to borrowers | $ 986.5 | |
Forward Mortgage Loan Interest Rate Lock Commitments [Member] | ||
Other Commitments [Line Items] | ||
Short-term commitments to lend | 471.2 | |
Reverse Mortgage Loan Interest Rate Lock Commitments [Member] | ||
Other Commitments [Line Items] | ||
Short-term commitments to lend | $ 9.2 |
Contingencies - Narrative (Deta
Contingencies - Narrative (Details) | Jan. 23, 2015USD ($) | Dec. 19, 2014USD ($) | Mar. 31, 2016USD ($)LoanTrust | Sep. 30, 2015USD ($) | Mar. 31, 2015USD ($)Loan |
Loss Contingencies [Line Items] | |||||
Warranty repurchase demands unpaid principal balance | $ 81,900,000 | $ 134,600,000 | |||
Warranty repurchase demands number of loans | Loan | 408 | 696 | |||
Residential Mortgage Backed Securities [Member] | |||||
Loss Contingencies [Line Items] | |||||
Ownership interest in trusts | 25.00% | ||||
Number of trusts where trustees received notice of servicer non-performance | Trust | 119 | ||||
Number of trusts to terminate as servicer in case if allegations proved | Trust | 119 | ||||
Number of trust where servicing transferred to another loan servicer | Trust | 2 | ||||
Minimum [Member] | |||||
Loss Contingencies [Line Items] | |||||
Statutory penalties per alleged false claim | $ 5,500 | ||||
Maximum [Member] | |||||
Loss Contingencies [Line Items] | |||||
Statutory penalties per alleged false claim | 11,000 | ||||
Mortgage Servicing Practice [Member] | |||||
Loss Contingencies [Line Items] | |||||
Estimate of possible loss | $ 39,500,000 | ||||
Unfavorable Regulatory Action [Member] | California Department of Business Oversight [Member] | |||||
Loss Contingencies [Line Items] | |||||
Amount of penalty in consent order | $ 2,500,000 | ||||
Oversight monitor period | 2 years | ||||
Unfavorable Regulatory Action [Member] | Securities And Exchange Commission [Member] | |||||
Loss Contingencies [Line Items] | |||||
Estimate of possible loss | $ 2,000,000 | ||||
Accrued penalty | 2,000,000 | ||||
Unfavorable Regulatory Action, Civil Penalty [Member] | New York Department of Financial Services [Member] | |||||
Loss Contingencies [Line Items] | |||||
Litigation settlement expense | $ 100,000,000 | ||||
Unfavorable Regulatory Action, Restitution Paid [Member] | New York Department of Financial Services [Member] | |||||
Loss Contingencies [Line Items] | |||||
Litigation settlement expense | $ 50,000,000 | ||||
First Uncured Violation [Member] | Maximum [Member] | Office of Mortgage Settlement Oversight [Member] | |||||
Loss Contingencies [Line Items] | |||||
Financial penalties in case of uncured violations | 1,000,000 | ||||
Second Uncured Violation [Member] | Maximum [Member] | Office of Mortgage Settlement Oversight [Member] | |||||
Loss Contingencies [Line Items] | |||||
Financial penalties in case of uncured violations | $ 5,000,000 |
Contingencies - Schedule of Ind
Contingencies - Schedule of Indemnification Obligations (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | ||
Indemnification Obligations Liability [Roll Forward] | |||
Beginning balance | $ 36,615 | $ 132,918 | |
Provision for representation and warranty obligations | (840) | (3,975) | |
New production reserves | 152 | 228 | |
Charge-offs and other | [1] | (3,598) | (9,989) |
Ending balance | $ 32,329 | $ 119,182 | |
[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. |