Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Feb. 17, 2017 | Jun. 30, 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 | Accelerated Filer | ||
Document Type | 10-K/A | ||
Document Period End Date | Dec. 31, 2016 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | true | ||
Amendment Description | Ocwen Financial Corporation (Ocwen, we, us, our) is filing this Amendment No. 1 (Amendment) to our Annual Report on Form 10-K for the year ended December 31, 2016 (Original Form 10-K) to restate our previously issued consolidated financial statements for the year ended December 31, 2016. We are restating our consolidated financial statements for the year ended December 31, 2016 to amend Note 26 - Contingencies to our consolidated financial statements for the year ended December 31, 2016 to add the following: In December 2016, we entered into a confidential memorandum of understanding (MOU) with the Multistate Mortgage Committee (MMC), a multistate coalition of various mortgage banking regulators, and six states relating to a servicing examination by the MMC covering the period January 1, 2013 through February 28, 2015. The MOU contained various provisions relating to servicing practices and safety and soundness aspects of the regulatory review, as well as a requirement for us to develop a plan for submission to the MMC to address concerns from the review by the MMC, as a step toward closing the 2013 - 2015 examination. There were no monetary or other penalties under the MOU. Ocwen responded to the MOU items. On April 20, 2017 and subsequently, thirty state mortgage and banking regulatory agencies issued orders against OLS and certain other Ocwen companies. In general, the orders are styled as “cease and desist orders,” and we use that term to refer to all of the orders for ease of reference; we also include the District of Columbia regulator as a state regulator for ease of reference. All of the cease and desist orders apply to OLS, but additional Ocwen entities are named in some state orders, including Ocwen Financial Corporation, OMS, Homeward and Liberty. While each state’s cease and desist order is different, the orders generally prohibit a range of actions, including (1) acquiring new MSRs (17 states), (2) originating or acquiring new mortgage loans, where we would be the servicer (13 states), (3) originating or acquiring new mortgage loans (4 states) and (4) conducting foreclosure activities (2 states), among others. We intend to vigorously defend ourselves against unfounded claims while continuing to work with these regulatory agencies to resolve their concerns. We are currently working toward an agreement of an escrow account review plan to be conducted by an independent firm engaged by Ocwen. The independent firm would develop a statistically-based sample population, consistent with MMC guidelines (which would be substantially less than the entire loan population), as well as a possible targeted review of escrow accounts linked to certain loan categories. We have agreed with certain regulatory agencies, where necessary, to obtain delays or exceptions to the orders. Additionally, we have revised our operations, where necessary, so as to comply with the orders in the interim period while we attempt to negotiate resolutions. For example, in certain states, we are arranging to release servicing on new originations and we have paused our origination activities in two states. If we are unable to obtain timely resolutions in certain states, more serious consequences could result. For example, we could be required to transfer all of our mortgage servicing in Massachusetts and we could be required to cease mortgage servicing in Rhode Island. It is possible that the outcome of these state regulatory actions, whether through negotiated settlements or other resolutions, could be materially adverse to our business, reputation, financial condition, liquidity and results of operations. We cannot currently estimate the amount, if any, of reasonably possible loss related to these matters. The MOU was confidential under various state laws until made public by certain state regulators on April 20, 2017. The restatement of our consolidated financial statements for the year ended December 31, 2016 did not result in any changes to our consolidated financial statements and related footnote disclosures, other than the changes to the disclosure in Note 26 — Contingencies. In connection with the restatement, management has re-evaluated the effectiveness of Ocwen’s disclosure controls and procedures and internal control over financial reporting as of December 31, 2016 based on the framework in “Internal Control-Integrated Framework (2013 framework)” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Management has concluded that Ocwen’s disclosure controls and procedures and internal controls over financial reporting were not effective as of December 31, 2016 solely due to a material weakness in internal control over financial reporting that resulted in the failure to provide disclosure of the MOU. For a discussion of management’s consideration of our disclosure controls and procedures, internal controls over financial reporting, and the material weaknesses identified, see Part II, Item 9A, “Controls and Procedures” of this Amendment. | ||
Entity Common Stock, Shares Outstanding | 123,988,160 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 210,586,493 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Assets | ||
Cash | $ 256,549 | $ 257,272 |
Mortgage servicing rights ($679,256 and $761,190 carried at fair value) | 1,042,978 | 1,138,569 |
Advances, net | 257,882 | 444,298 |
Match funded advances (related to variable interest entities (VIEs)) | 1,451,964 | 1,706,768 |
Loans held for sale ($284,632 and $309,054 carried at fair value) | 314,006 | 414,046 |
Loans held for investment - Reverse mortgages, at fair value | 3,565,716 | 2,488,253 |
Receivables, net | 265,720 | 286,981 |
Deferred tax assets, net | 2,732 | |
Premises and equipment, net | 62,744 | 57,626 |
Other assets ($20,007 and $14,352 carried at fair value)(amounts related to VIEs of $43,331 and $59,278) | 435,372 | 586,495 |
Total assets | 7,655,663 | 7,380,308 |
Liabilities | ||
Match funded liabilities (related to VIEs) | 1,280,997 | 1,584,049 |
Financing liabilities ($3,911,488 and $2,933,066 carried at fair value) | 4,012,812 | 3,089,255 |
Other secured borrowings, net | 678,543 | 762,411 |
Senior notes, net | 346,789 | 345,511 |
Other liabilities ($1,550 and $0 carried at fair value) | 681,239 | 744,444 |
Total liabilities | 7,000,380 | 6,525,670 |
Commitments and Contingencies (Notes 25 and 26) | ||
Equity | ||
Common stock, $.01 par value; 200,000,000 shares authorized; 123,988,160 and 124,774,516 shares issued and outstanding at December 31, 2016 and 2015, respectively | 1,240 | 1,248 |
Additional paid-in capital | 527,001 | 526,148 |
Retained earnings | 126,167 | 325,929 |
Accumulated other comprehensive loss, net of income taxes | (1,450) | (1,763) |
Total Ocwen stockholders’ equity | 652,958 | 851,562 |
Non-controlling interest in subsidiaries | 2,325 | 3,076 |
Total equity | 655,283 | 854,638 |
Total liabilities and equity | $ 7,655,663 | $ 7,380,308 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Financial Position [Abstract] | |||
Mortgage servicing rights, at fair value | $ 679,256 | $ 761,190 | |
Loans held for sale, at fair value | [1] | 284,632 | 309,054 |
Other assets, at fair value | 20,007 | 14,352 | |
Amounts related to VIEs | 43,331 | 59,278 | |
Financing liabilities, at fair value | 3,911,488 | 2,933,066 | |
Other liabilities, at fair value | $ 1,550 | $ 0 | |
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) | 123,988,160 | 124,774,516 | |
Common stock, shares outstanding (in shares) | 123,988,160 | 124,774,516 | |
[1] | At December 31, 2016, 2015 and 2014, the balances include $4.9 million, $11.9 million and $21.0 million, respectively, of fair value adjustments. |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Revenue | ||||
Servicing and subservicing fees | $ 1,186,620 | $ 1,531,797 | $ 1,894,175 | |
Gain on loans held for sale, net | 90,391 | 134,969 | 134,297 | |
Other revenues | 110,152 | 74,332 | 82,853 | |
Total revenue | [1] | 1,387,163 | 1,741,098 | 2,111,325 |
Expenses | ||||
Compensation and benefits | 381,340 | 415,055 | 415,530 | |
Goodwill impairment loss | 0 | 0 | 420,201 | |
Amortization of mortgage servicing rights | 32,978 | 99,194 | 250,375 | |
Servicing and origination | 279,801 | 344,560 | 202,739 | |
Technology and communications | 110,333 | 154,758 | 167,053 | |
Professional services | 305,586 | 276,393 | 326,667 | |
Occupancy and equipment | 80,191 | 112,864 | 109,179 | |
Other | 33,025 | 75,360 | 143,464 | |
Total expenses | [1],[2] | 1,223,254 | 1,478,184 | 2,035,208 |
Other income (expense) | ||||
Interest income | 19,083 | 18,320 | 22,991 | |
Interest expense | (412,583) | (482,373) | (541,757) | |
Gain on sale of mortgage servicing rights, net | 8,492 | 83,921 | 0 | |
Gain on extinguishment of debt | 0 | 0 | 2,609 | |
Other, net | 14,738 | (12,643) | (3,119) | |
Total other expense, net | (370,270) | (392,775) | (519,276) | |
Loss before income taxes | (206,361) | (129,861) | (443,159) | |
Income tax expense (benefit) | (6,986) | 116,851 | 26,396 | |
Net loss | (199,375) | (246,712) | (469,555) | |
Net income attributable to non-controlling interests | (387) | (305) | (245) | |
Net loss attributable to Ocwen stockholders | (199,762) | (247,017) | (469,800) | |
Preferred stock dividends | 0 | 0 | (1,163) | |
Deemed dividends related to beneficial conversion feature of preferred stock | 0 | 0 | (1,639) | |
Net loss attributable to Ocwen common stockholders | [3] | $ (199,762) | $ (247,017) | $ (472,602) |
Loss per share attributable to Ocwen common stockholders | ||||
Basic (in dollars per share) | $ (1.61) | $ (1.97) | $ (3.60) | |
Diluted (in dollars per share) | $ (1.61) | $ (1.97) | $ (3.60) | |
Weighted average common shares outstanding | ||||
Basic (in shares) | 123,990,700 | 125,315,899 | 131,362,284 | |
Diluted (in shares) | 123,990,700 | 125,315,899 | 131,362,284 | |
[1] | Inter-segment billings for services rendered to other segments are recorded as revenues, as contra-expense or as other income, depending on the type of service that is rendered. | |||
[2] | Depreciation and amortization expense are as follows: Servicing Lending Corporate Items and Other Business Segments ConsolidatedFor the year ended December 31, 2016: Depreciation expense$6,804 $228 $18,306 $25,338Amortization of mortgage servicing rights32,669 309 — 32,978Amortization of debt discount727 — 3,450 4,177Amortization of debt issuance costs 13,455 — 12,207 25,662 For the year ended December 31, 2015: Depreciation expense$2,990 $380 $15,789 $19,159Amortization of mortgage servicing rights98,849 345 — 99,194Amortization of debt discount2,680 — — 2,680Amortization of debt issuance costs 21,269 — 1,395 22,664 For the year ended December 31, 2014: Depreciation expense$9,955 $332 $11,623 $21,910Amortization of mortgage servicing rights249,471 705 199 250,375Amortization of debt discount1,318 — — 1,318Amortization of debt issuance costs 4,294 — 845 5,139 | |||
[3] | For 2016, 2015 and 2014, we have excluded the effect of preferred stock, stock options and common stock awards from the computation of diluted earnings per share because of the anti-dilutive effect of our reported net loss. |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (199,375) | $ (246,712) | $ (469,555) | |
Other comprehensive income, net of income taxes: | ||||
Reclassification adjustment for losses on cash flow hedges included in net income | [1],[2] | 313 | 6,650 | 1,734 |
Other | 0 | 0 | 4 | |
Total other comprehensive income, net of income taxes | 313 | 6,650 | 1,738 | |
Comprehensive loss | (199,062) | (240,062) | (467,817) | |
Comprehensive income attributable to non-controlling interests | (387) | (305) | (245) | |
Comprehensive loss attributable to Ocwen stockholders | $ (199,449) | $ (240,367) | $ (468,062) | |
[1] | Net of income tax expense of $0.02 million, $0.4 million and $0.2 million for 2016, 2015 and 2014, respectively. | |||
[2] | These losses are reclassified to Other, net in the Consolidated Statements of Operations. |
CONSOLIDATED STATEMENTS OF COM6
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Footnote) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statement of Comprehensive Income [Abstract] | |||
Income tax benefit (expense) on reclassification adjustment for losses on cash flow hedges | $ 0 | $ (0.4) | $ (0.2) |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (Loss), Net of Taxes [Member] | Noncontrolling Interest in Subsidiaries [Member] |
Balance at at Dec. 31, 2013 | $ 1,812,591 | $ 1,352 | $ 818,427 | $ 1,002,963 | $ (10,151) | $ 0 |
Balance at (in shares) at Dec. 31, 2013 | 135,176,271 | |||||
Net income (loss) | (469,555) | (469,800) | 245 | |||
Preferred stock dividends | (1,163) | (1,163) | ||||
Deemed dividend related to beneficial conversion feature of preferred stock | (1,639) | (1,639) | ||||
Conversion of preferred stock | 62,000 | $ 20 | 61,980 | |||
Conversion of preferred stock (in shares) | 1,950,296 | |||||
Repurchase of common stock | (382,487) | $ (124) | (382,363) | |||
Repurchase of common stock (in shares) | (12,370,692) | |||||
Exercise of common stock options | (70) | $ 4 | (74) | |||
Exercise of common stock options (in shares) | 434,054 | |||||
Equity-based compensation and other | 17,224 | 17,224 | ||||
Equity-based compensation and other (in shares) | 25,686 | |||||
Non-controlling interest in connection with the acquisition of a controlling interest in Ocwen Structured Investments, LLC | 2,526 | 2,526 | ||||
Other comprehensive income, net of income taxes | 1,738 | 1,738 | ||||
Balance at at Dec. 31, 2014 | 1,041,165 | $ 1,252 | 515,194 | 530,361 | (8,413) | 2,771 |
Balance at (in shares) at Dec. 31, 2014 | 125,215,615 | |||||
Net income (loss) | (246,712) | (247,017) | 305 | |||
Preferred stock dividends | 0 | |||||
Deemed dividend related to beneficial conversion feature of preferred stock | 0 | |||||
Cumulative effect of fair value election - Mortgage servicing rights, net of taxes | 42,585 | 42,585 | ||||
Repurchase of common stock | (4,142) | $ (6) | (4,136) | |||
Repurchase of common stock (in shares) | (625,705) | |||||
Exercise of common stock options | 519 | $ 1 | 518 | |||
Exercise of common stock options (in shares) | 89,664 | |||||
Equity-based compensation and other | 14,573 | $ 1 | 14,572 | |||
Equity-based compensation and other (in shares) | 94,942 | |||||
Other comprehensive income, net of income taxes | 6,650 | 6,650 | ||||
Balance at at Dec. 31, 2015 | $ 854,638 | $ 1,248 | 526,148 | 325,929 | (1,763) | 3,076 |
Balance at (in shares) at Dec. 31, 2015 | 124,774,516 | 124,774,516 | ||||
Net income (loss) | $ (199,375) | (199,762) | 387 | |||
Preferred stock dividends | 0 | |||||
Deemed dividend related to beneficial conversion feature of preferred stock | 0 | |||||
Repurchase of common stock | $ (5,890) | $ (10) | (5,880) | |||
Repurchase of common stock (in shares) | (991,985) | (991,985) | ||||
Exercise of common stock options | $ 442 | $ 1 | 441 | |||
Exercise of common stock options (in shares) | 69,805 | |||||
Equity-based compensation and other | 6,293 | $ 1 | 6,292 | |||
Equity-based compensation and other (in shares) | 135,824 | |||||
Capital distribution to non-controlling interest | (1,138) | (1,138) | ||||
Other comprehensive income, net of income taxes | 313 | 313 | ||||
Balance at at Dec. 31, 2016 | $ 655,283 | $ 1,240 | $ 527,001 | $ 126,167 | $ (1,450) | $ 2,325 |
Balance at (in shares) at Dec. 31, 2016 | 123,988,160 | 123,988,160 |
CONSOLIDATED STATEMENTS OF CHA8
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Parenthetical) | 12 Months Ended |
Dec. 31, 2014$ / shares | |
Statement of Stockholders' Equity [Abstract] | |
Preferred stock dividends (in dollars per share) | $ 18.75 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities | |||
Net loss | $ (199,375) | $ (246,712) | $ (469,555) |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||
Goodwill impairment loss | 0 | 0 | 420,201 |
Amortization of mortgage servicing rights | 32,978 | 99,194 | 250,375 |
Loss on valuation of mortgage servicing rights, at fair value | 80,238 | 98,173 | 22,068 |
Impairment of mortgage servicing rights | 10,813 | 17,341 | 0 |
Gain on sale of mortgage servicing rights, net | (8,492) | (83,921) | 0 |
Realized and unrealized losses on derivative financial instruments | 1,724 | 8,419 | 2,643 |
Provision for bad debts | 81,079 | 101,226 | 84,751 |
Depreciation | 25,338 | 19,159 | 21,910 |
Amortization of debt discount | 4,177 | 2,680 | 1,318 |
Amortization of debt issuance costs | 25,662 | 22,664 | 5,139 |
Gain on extinguishment of debt | 0 | 0 | (2,609) |
Provision for valuation allowance on deferred tax assets | 15,639 | 97,069 | 3,601 |
(Increase) decrease in deferred tax assets other than provision for valuation allowance | (11,119) | (28,136) | 34,241 |
Equity-based compensation expense | 5,181 | 7,291 | 10,729 |
Net gain on valuation of mortgage loans held for investment and HMBS-related borrowings | (26,016) | (7,661) | (6,787) |
Gain on loans held for sale, net | (65,649) | (103,112) | (110,300) |
Origination and purchase of loans held for sale | (6,090,432) | (5,000,681) | (7,430,340) |
Proceeds from sale and collections of loans held for sale | 5,969,812 | 5,125,203 | 7,345,730 |
Changes in assets and liabilities: | |||
Decrease in advances and match funded advances | 452,435 | 531,313 | 291,989 |
Decrease (increase) in receivables and other assets, net | 181,835 | 46,463 | (37,394) |
Decrease in other liabilities | (7,147) | (109,511) | (94,508) |
Other, net | (4,020) | (14,882) | 9,322 |
Net cash provided by operating activities | 474,661 | 581,579 | 352,524 |
Cash flows from investing activities | |||
Origination of loans held for investment - reverse mortgages | (1,098,758) | (1,008,065) | (816,881) |
Principal payments received on loans held for investment - reverse mortgages | 243,596 | 151,107 | 86,234 |
Purchase of mortgage servicing rights | (17,356) | (12,355) | (22,488) |
Proceeds from sale of mortgage servicing rights | 47,044 | 686,838 | 287 |
Acquisition of advances in connection with the purchase of mortgage servicing rights | (85,521) | ||
Acquisition of advances in connection with the purchase of loans | 0 | 0 | (60,482) |
Proceeds from sale of advances and match funded advances | 103,017 | 486,311 | 1,054 |
Issuance of automotive dealer financing notes | (100,722) | 0 | 0 |
Collections of automotive dealer financing notes | 65,688 | 0 | 0 |
Additions to premises and equipment | (33,518) | (37,487) | (11,430) |
Distribution of capital from unconsolidated entities | 0 | 0 | 6,572 |
Other | (610) | 14,021 | 6,461 |
Net cash provided by (used in) investing activities | (791,619) | 280,370 | (958,247) |
Cash flows from financing activities | |||
Repayment of match funded liabilities, net | (303,052) | (506,198) | (274,567) |
Proceeds from mortgage loan warehouse facilities and other secured borrowings | 9,242,671 | 7,170,831 | 5,677,291 |
Repayments of mortgage loan warehouse facilities and other secured borrowings | (9,693,108) | (8,402,758) | (5,809,239) |
Proceeds from issuance of senior notes | 0 | 0 | 350,000 |
Payment of debt issuance costs | (11,136) | (23,480) | (6,835) |
Proceeds from sale of mortgage servicing rights accounted for as a financing | 0 | 0 | 123,551 |
Proceeds from sale of reverse mortgages (HECM loans) accounted for as a financing (HMBS-related borrowings) | 1,086,795 | 1,024,361 | 783,009 |
Proceeds from sale of advances accounted for as a financing | 0 | 0 | 88,981 |
Repurchase of common stock | (5,890) | (4,142) | (382,487) |
Payment of preferred stock dividends | 0 | 0 | (1,163) |
Other | (45) | 7,236 | 8,143 |
Net cash provided by (used in) financing activities | 316,235 | (734,150) | 556,684 |
Net increase (decrease) in cash | (723) | 127,799 | (49,039) |
Cash at beginning of year | 257,272 | 129,473 | 178,512 |
Cash at end of year | 256,549 | 257,272 | 129,473 |
Supplemental cash flow information | |||
Interest paid | 389,638 | 470,724 | 560,208 |
Income tax payments, net | 19,715 | 5,706 | 38,293 |
Supplemental non-cash investing and financing activities | |||
Exchange of senior unsecured notes for senior secured notes | 346,878 | 0 | 0 |
Transfers of loans held for sale to loans held for investment | 0 | 0 | 110,874 |
Transfers of loans held for sale to real estate owned | 7,675 | 18,594 | 8,808 |
Conversion of Series A preferred stock to common stock | 0 | 0 | 62,000 |
ResCap [Member] | |||
Cash flows from investing activities | |||
Purchase of mortgage servicing rights | (11,400) | ||
Acquisition of advances in connection with the purchase of mortgage servicing rights | (54,200) | ||
Acquisition of advances in connection with the purchase of loans | (39,200) | ||
Payments to acquire business | 0 | 0 | (54,220) |
Ocwen Structured Investments, LLC (OSI) [Member] | |||
Cash flows from investing activities | |||
Payments to acquire business | $ 0 | $ 0 | $ (7,833) |
Organization, Business Environm
Organization, Business Environment, Basis of Presentation and Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Business Environment, Basis of Presentation and Significant Accounting Policies | Note 1 — Organization, Business Environment, Basis of Presentation and Significant Accounting Policies Organization Ocwen Financial Corporation (NYSE: OCN) (Ocwen, we, us and our) is a financial services holding company which, through its subsidiaries, originates and services loans. 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 with operations located 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 Administration (FHA) or Department of Veterans Affairs (VA)) forward and reverse mortgages. The GSEs or Ginnie Mae guarantee these mortgage securitizations. We had a total of approximately 9,700 employees at December 31, 2016 of which approximately 6,300 were located in India and approximately 800 were based in the Philippines. Our operations in India and the Philippines provide internal support services, principally to our loan servicing business as well as to our corporate functions. Of our foreign-based employees, more than 80% were engaged in supporting our loan servicing operations as of December 31, 2016 . Business Environment We are facing certain challenges and uncertainties that could have significant adverse effects on our business, liquidity and financing activities. The ability of management to appropriately address these challenges and uncertainties in a timely manner is critical to our ability to successfully operate and grow our business. We have incurred net losses in each of the last three years, which has eroded our equity and weakened our financial condition. However, we have generated positive operating cash flow in each of these years. We are reinvesting cash flows generated by our Servicing business to grow not only our residential mortgage lending business but also to grow other new business lines such as our Automotive Capital Services (ACS) business to diversify our income profile and drive improved financial performance. We believe asset generation, through our residential mortgage lending business and our ACS business, will be Ocwen’s primary drivers of growth for the future. We are also focused on improving our operations to enhance customer experiences and improve operating effectiveness, both of which we believe will drive stronger financial performance through lower overall costs and improved customer retention. In the current regulatory environment, we have faced and expect to continue to face, heightened regulatory and public scrutiny as an organization as well as stricter and more comprehensive regulation of the entire mortgage sector. 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. We anticipate resolution of certain matters where we continue to face regulatory challenges and, upon such resolution, we may begin to consider opportunities for growing our servicing portfolio in addition to growing our lending businesses. See Note 24 — Regulatory Requirements and Note 26 — Contingencies for further information regarding regulatory requirements, regulatory settlements and regulatory-related contingencies. With regard to the current maturities of our borrowings, we have $1.2 billion of debt coming due in the next 12 months, related to our servicing match funded liabilities and our mortgage loan warehouse facilities. Portions of our match funded liabilities and all of our mortgage loan warehouse facilities have 364 -day terms consistent with market practice. We have historically renewed these facilities on or before their expiration in the ordinary course of financing our business. We expect to renew, replace or extend all such borrowings to the extent necessary to finance our business on or prior to their respective maturities consistent with our historical experience. See Note 13 — Borrowings for additional information. Basis of Presentation and Significant Accounting Policies Consolidation and Basis of Presentation Principles of Consolidation Our consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the U.S. (GAAP). Our financial statements include the accounts of Ocwen, its majority-owned subsidiaries and any variable interest entity (VIE) for which we have determined that we are the primary beneficiary. We apply the equity method of accounting to investments when the entity is not a VIE, and we are able to exercise significant influence, but not control, over the policies and procedures of the entity but own 50% or less of the voting securities. We have eliminated intercompany accounts and transactions in consolidation. Foreign Currency Translation The functional currency of each of our foreign subsidiaries is the U.S. dollar. Re-measurement adjustments of foreign-denominated amounts to U.S. dollars are included in Other, net in our consolidated statements of operations. Reclassifications 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 ( $20.0 million ) and Senior notes ( $4.5 million ) on the consolidated balance sheets, resulting in a reduction to Ocwen’s total assets and total liabilities of $24.5 million at December 31, 2015. Certain amounts in the Consolidated Statements of Cash Flows for 2015 and 2014 have been reclassified to conform to the current year presentation as follows: • Within the operating activities section, we reclassified Amortization of debt discount and Net gain on valuation of mortgage loans held for investment and HMBS-related borrowings from Other to new separate line items. In addition, we reclassified amounts related to reverse mortgages from Gain on loans held for sale, net to Other. • Within the investing activities section, we reclassified Proceeds from sale of premises and equipment to Other. • Within the financing activities section, we reclassified Proceeds from exercise of stock options to Other. These reclassifications had no impact on our consolidated cash flows from operating, investing or financing activities. Use of Estimates and Assumptions The preparation of financial statements in conformity with GAAP requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Such estimates and assumptions include, but are not limited to, those that relate to fair value measurements, the amortization of mortgage servicing rights, income taxes, the provision for potential losses that may arise from litigation proceedings, representation and warranty and other indemnification obligations, and our going concern evaluation. In developing estimates and assumptions, management uses all available information; however, actual results could materially differ from those estimates and assumptions. Significant Accounting Policies Cash Cash includes both interest-bearing and non-interest-bearing demand deposits with financial institutions that have original maturities of 90 days or less. Mortgage Servicing Rights (MSRs) MSRs are assets representing our right to service portfolios of mortgage loans. We have primarily obtained MSRs through asset purchases or business combination transactions. We also retain MSRs on originated loans when they are sold in the secondary market. For servicing retained in connection with the securitization of reverse mortgage loans accounted for as secured financings, we do not recognize an MSR. An agreement between the various parties to a mortgage securitization transaction typically specifies the rights and obligations of the holder of the MSRs, which include guidelines and procedures for servicing the loans. Two examples of these guidelines and procedures include remittance and reporting requirements. The UPB of the loans underlying the MSRs is not included on our balance sheet. Custodial accounts, which hold funds representing collections of principal and interest that we receive from borrowers (float balances), are held in escrow by an unaffiliated bank and excluded from our balance sheet. All newly acquired or retained MSRs are initially measured at fair value. We recognize a servicing liability for those portfolio contracts that are not expected to compensate us adequately for performing the servicing. For this purpose, we define contracts as conventional, government-insured or non-Agency (commonly referred to as non-prime, subprime or private-label loans) based on their general comparability with regard to servicing guidelines, underwriting standards and borrower risk characteristics. Servicing assets are not recognized for subservicing arrangements entered into with the entity that owns the MSRs. Subsequent to acquisition, we account for servicing assets and servicing liabilities using the amortization method or the fair value measurement method. The fair value election is irrevocable and can be made at the beginning of any fiscal year. Additionally, transferring servicing assets and servicing liabilities from a class subsequently measured using the amortization method to a class subsequently measured at fair value is permitted as of the start of any fiscal year. As discussed further in Note 8 — Mortgage Servicing , effective January 1, 2015, we elected fair value accounting for a newly-created class of non-Agency MSRs, which were previously accounted for using the amortization method. Once the fair value election is made for a particular class of MSRs, that election applies to all subsequently acquired or originated servicing assets and liabilities with characteristics consistent with the class. We defined our classes based on our strategy for managing the risks of the underlying portfolios. For certain of the servicing assets, we previously managed the effects of interest rate risk with derivative financial instruments. We elected to account for this class of servicing assets using the fair value measurement method. For servicing assets or liabilities that we account for using the amortization method, we amortize the balances in proportion to, and over the period of, estimated net servicing income (if servicing revenues exceed servicing costs) or net servicing loss (if servicing costs exceed servicing revenues). We assess servicing assets or liabilities for impairment or increased obligation based on fair value at each reporting date. Estimated net servicing income is primarily driven by the estimated future cash flows of the underlying mortgage loan portfolio, which, absent new purchases, declines over time from prepayments and scheduled loan amortization. We adjust MSR amortization prospectively in response to changes in estimated projections of future cash flows. We perform an impairment analysis based on the difference between the carrying amount and estimated fair value after grouping the underlying portfolios into the applicable strata. We recognize any impairment through a valuation allowance. We adjust the valuation allowance to reflect subsequent changes in the measurement of impairment. However, we do not recognize fair value in excess of the carrying amount of servicing assets for that stratum. For servicing assets or liabilities that we account for at fair value on a recurring basis, we measure the balances at fair value at each reporting date and report changes in fair value in earnings in the period in which the changes occur. We earn fees for servicing mortgage loans. We collect servicing fees, generally expressed as a percent of UPB, from the borrowers’ payments. We also include late fees, prepayment penalties, float earnings and other ancillary fees in servicing revenue. We recognize servicing fees as revenue when the fees are earned, which is generally when the borrowers’ payments are collected or when loans are modified or liquidated through the sale of the underlying real estate collateral or otherwise. Advances and Match Funded Advances During any period in which a borrower does not make payments, most of our servicing agreements require that we advance our own funds to meet contractual principal and interest remittance requirements for the investors, to pay property taxes and insurance premiums and to process foreclosures. We also advance funds to maintain, repair and market foreclosed real estate properties on behalf of investors. These advances are made pursuant to the terms of each servicing contract. Each servicing contract is associated with specific loans, identified as a pool. When we make an advance on a loan under each servicing contract, we are entitled to recover that advance either from the borrower, for reinstated and performing loans, or from investors, for modified and liquidated loans. Most of our servicing contracts provide that the advances made under the respective agreement have priority over all other cash payments from the proceeds of the loan, and in the majority of cases, the proceeds of the pool of loans that are the subject of that servicing contract. As a result, we are entitled to repayment from loan proceeds before any interest or principal is paid on the bonds, and in the majority of cases, advances in excess of loan proceeds may be recovered from pool level proceeds. We establish an allowance for losses through a charge to earnings to the extent that we believe advances are uncollectible under the provisions of each servicing contract taking into consideration our historical collection rates, length of delinquency and the amount of the advance. However, we are generally only obligated to advance funds to the extent that we believe the advances are recoverable from expected proceeds from the loan. We assess collectability using proprietary cash flow projection models that incorporate a number of different factors, depending on the characteristics of the mortgage loan or pool, including, for example, estimated time to a foreclosure sale, estimated costs of foreclosure action, estimated future property tax payments and the estimated value of the underlying property net of estimated carrying costs, commissions and closing costs. Loans Held for Sale Loans held for sale include residential mortgage loans that we originate or purchase and do not intend to hold until maturity. We report loans held for sale at either fair value or the lower of cost or fair value computed on an aggregate basis. For loans held for sale that are reported at the lower of cost or fair value, loan origination fees, as well as premium and discount, points and incremental direct origination costs, are initially recorded as an adjustment of the cost basis of the loan and are deferred until the loan is sold. For loans that we elected to measure at fair value on a recurring basis, we report changes in fair value in Gain on loans held for sale, net in the consolidated statements of operations in the period in which the changes occur. These loans are expected to be sold into the secondary market to the GSEs or into Ginnie Mae guaranteed securitizations. For all other loans held for sale which we report at the lower of cost or fair value, we account for the excess of cost over fair value as a valuation allowance and include changes in the valuation allowance in Other, net, in the consolidated statements of operations in the period in which the change occurs. We accrue interest income as earned. We place loans on non-accrual status after any portion of principal or interest has been delinquent for more than 89 days , or earlier if management determines the borrower is unable to continue performance. When we place a loan on non-accrual status, we reverse the interest that we have accrued but not yet received. We return loans to accrual status only when we reinstate the loan and there is no significant uncertainty as to collectability. Loans Held for Investment Loans held for investment include reverse residential mortgage loans that we originate and which we have elected to measure at fair value. These reverse mortgages are insured by the FHA and pooled into Ginnie Mae guaranteed securities that we sell into the secondary market with servicing rights retained. Loan transfers in these Ginnie Mae securitizations do not meet the definition of a participating interest and as a result, the transfers of the reverse mortgages do not qualify for sale accounting. Therefore, we account for these transfers as financings, with the reverse mortgages classified as Loans held for investment - reverse mortgages, at fair value, on our consolidated balance sheets, with no gain or loss recognized on the transfer. Upfront costs and fees related to loans held for investment, including broker fees, are recognized in earnings as incurred and are not capitalized. However, we capitalize premiums on loans purchased via the correspondent channel, because they represent part of the purchase price. Transfers of Financial Assets We securitize, sell and service forward and reverse residential mortgage loans. Securitization transactions typically involve the use of VIEs and are accounted for either as sales or as secured financings. We typically retain economic interests in the securitized assets in the form of servicing rights and obligations. In order to efficiently finance our assets and operations and create liquidity, we may sell servicing advances, MSRs or the right to receive servicing fees, excluding ancillary income, relating to certain of our MSRs (Rights to MSRs). In order to determine whether or not a VIE is required to be consolidated, we consider our ongoing involvement with the VIE. In circumstances where we have both the power to direct the activities that most significantly impact the performance of the VIE and the obligation to absorb losses or the right to receive benefits that could be significant, we would conclude that we would consolidate the entity, which precludes us from recording an accounting sale in connection with the transfer of the financial assets. In the case of a consolidated VIE, we continue to report the underlying residential mortgage loans or servicing advances, and we record the securitized debt on our consolidated balance sheet. In the case of transfers where either one or both of the power or economic criteria above are not met, we evaluate whether a sale has occurred for accounting purposes. In order to recognize a sale, the transferred assets must be legally isolated, not be constrained by restrictions from further transfer and be deemed to be beyond our control. If the transfer does not meet any of these three criteria, the accounting is consistent with a secured financing as described in the preceding paragraph. In certain situations, we may have continuing involvement in transferred loans through our retained servicing. Additionally, we may have the right, but not the obligation, to buy certain re-performing loans from the purchaser for which we have secured a commitment to re-pool those loans under a Ginnie Mae program. In both cases, transactions involving these situations typically would still be eligible for sale accounting, as we have ceded effective control of these loans to the purchaser. Subsequent to the determination that a transaction does not meet the accounting sale criteria, we may determine that we meet the criteria. In the event we subsequently meet the accounting sale criteria, we derecognize the transferred assets and related liabilities. In the case of transfers of MSRs and Rights to MSRs where we retain the right to subservice, we defer the related gain or loss and amortize the balance over the life of the subservicing agreement. Gains or losses on off-balance sheet securitizations take into consideration any retained interests, including servicing rights and representation and warranty obligations, both of which are initially recorded at fair value at the date of sale in Gain on loans held for sale, net, in our consolidated statements of operations. Premises and Equipment We report premises and equipment at cost and, except for land, depreciate them over their estimated useful lives on a straight-line basis as follows: Computer software 2 – 3 years Computer hardware 3 years Buildings 40 years Leasehold improvements Term of the lease not to exceed useful life Furniture and fixtures 5 years Office equipment 5 years Litigation We monitor our legal matters, including advice from external legal counsel, and periodically perform assessments of these matters for potential loss accrual and disclosure. We establish a liability for settlements, judgments on appeal and filed and/or threatened claims for which we believe that it is probable that a loss has been or will be incurred and the amount can be reasonably estimated. We recognize legal costs associated with loss contingencies as they are incurred. Derivative Financial Instruments We recognize all derivatives on our consolidated balance sheet at fair value. On the date that we enter into a derivative contract, we designate and document each derivative contract as one of the following at the time the contract is executed: (a) a hedge of a recognized asset or liability (fair value hedge); (b) a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability (cash flow hedge); (c) a hedge of a net investment in a foreign operation; or (d) a derivative instrument not designated as a hedging instrument. To qualify for hedge accounting, a derivative must be highly effective at reducing the risk associated with the exposure being hedged. In addition, the documentation must include the risk management objective and strategy. We assess and document quarterly the extent to which a derivative has been and is expected to continue to be effective in offsetting the changes in the fair value or the cash flows of the hedged item. To assess effectiveness, we use statistical methods, such as regression analysis, as well as non-statistical methods including dollar-offset analysis. For a fair value hedge, we record changes in the fair value of the derivative, to the extent that it is effective, and changes in the fair value of the hedged asset or liability attributable to the hedged risk in the same financial statement category as the hedged item on the face of the statement of operations. For a cash flow hedge, to the extent that it is effective, we record changes in the estimated fair value of the derivative in other comprehensive income. We subsequently reclassify these changes in estimated fair value to net income in the same period, or periods, that the hedged transaction affects earnings and in the same financial statement category as the hedged item. For derivative instruments not designated as a hedge for accounting purposes that were entered into as an economic hedge against changes in fair value of a recognized asset, we report changes in the fair value in the same financial statement category of the statement of operations as the changes in fair value of the related asset. For all other derivative instruments not designated as a hedging instrument, we report changes in their fair values in Other income (expense), net. If a derivative instrument in a cash flow hedge is terminated or the hedge designation is removed, we reclassify related amounts in accumulated other comprehensive income into earnings in the same period or periods during which the cash flows that were hedged affect earnings. In a period where we determine it is probable that a hedged forecasted transaction will not occur, such as variable-rate interest payments on debt that has been repaid in advance, any related amounts in accumulated other comprehensive income are reclassified into earnings in that period. The cash collateral held by counterparties to our derivative agreements is included in Other assets. Stock-Based Compensation We measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. For equity awards with a service condition, we recognize the cost as compensation expense ratably over the vesting period. For equity awards with a market condition, we recognize the cost as compensation expense ratably over the expected life of the option that is derived from an options pricing model. When equity awards with a market condition meet their vesting requirements, any unrecognized compensation at the vesting date is recognized ratably over the vesting period. For equity awards with both a market condition and a service condition for vesting, we recognize cost as compensation expense over the requisite service period for each tranche of the award using the graded-vesting method. Income Taxes We file consolidated federal income tax returns. We allocate consolidated income tax among all subsidiaries included in the consolidated return as if each subsidiary filed a separate return or, in certain cases, a consolidated return. We account for income taxes using the asset and liability method, which requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Additionally, we adjust deferred taxes to reflect estimated tax rate changes. We conduct periodic evaluations to determine whether it is more likely than not that some or all of our deferred tax assets will not be realized. Among the factors considered in this evaluation are estimates of future earnings, the future reversal of temporary differences and the impact of tax planning strategies that we can implement if warranted. We provide a valuation allowance for any portion of our deferred tax assets that, more likely than not, will not be realized. We recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the consolidated financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. We recognize interest and penalties related to income tax matters in Income tax expense. Basic and Diluted Earnings per Share We calculate basic earnings per share based upon the weighted average number of shares of common stock outstanding during the year. We calculate diluted earnings per share based upon the weighted average number of shares of common stock outstanding and all dilutive potential common shares outstanding during the year. The computation of diluted earnings per share includes the estimated impact of the exercise of the outstanding options to purchase common stock using the treasury stock method. The computation of diluted earnings per share also includes the potential shares of converted common stock associated with our previously outstanding Series A Perpetual Convertible Preferred Stock using the if-converted method. Going Concern In accordance with Accounting Standards Codification (ASC) 205-40, Presentation of Financial Statements - Going Concern , we evaluate whether there are conditions that are known or reasonably knowable, such as those discussed in the “Business Environment” section, that raise substantial doubt about our ability to continue as a going concern within one year after the date that our financial statements are issued. We perform a detailed review and analysis of relevant quantitative and qualitative information from across our organization in connection with this evaluation. To support this effort, senior management from key business units reviews and assesses the following information: • our current financial condition, including liquidity sources at the date that the financial statements are issued (e.g., available liquid funds and available access to credit, including covenant compliance); • our conditional and unconditional obligations due or anticipated within one year after the date that the financial statements are issued (regardless of whether those obligations are recognized in our financial statements); • funds necessary to maintain operations considering our current financial condition, obligations and other expected cash flows within one year after the date that the financial statements are issued (i.e., financial forecasting); and • other conditions and events, when considered in conjunction with the above items, that may adversely affect our ability to meet obligations within one year after the date that the financial statements are issued (e.g., negative financial trends, indications of possible financial difficulties, internal matters such as a need to significantly revise operations and external matters such as adverse regulatory/legal proceedings or rating agency decisions). If such conditions exist, management evaluates its plans that when implemented would mitigate the condition(s) and alleviate the substantial doubt about our ability to continue as a going concern. Such plans are considered only if information available as of the date that the financial statements are issued indicates both of the following are true: • it is probable management’s plans will be implemented within the evaluation period; and • it is probable management’s plans, when implemented individually or in the aggregate, will mitigate the condition(s) that raise substantial doubt about our ability to continue as a going concern in the evaluation period. Our evaluation of whether it is probable that management’s plans will be effectively implemented within the evaluation period is based on the feasibility of implementation of management’s plans in light of our specific facts and circumstances. Our evaluation of whether it is probable that our plans, individually or in the aggregate, will be implemented in the evaluation period involves a degree of judgment, including about matters that are, to different degrees, uncertain. Recently Adopted Accounting Standards Consolidation: Measuring the Financial Assets and the Financial Liabilities of a Consolidated Collateralized Financing Entity (ASU 2014-13) This ASU requires that when a reporting entity elects the measurement alternative included in this ASU for a consolidated collateralized financing entity, the reporting entity should measure both the financial assets and |
Securitizations and Variable In
Securitizations and Variable Interests Entities | 12 Months Ended |
Dec. 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 VIEs for which we are the primary beneficiary. Securitizations of Residential Mortgage Loans Currently, we securitize forward and reverse residential mortgage loans involving the GSEs and Ginnie Mae and loans insured by the FHA or VA. We retain the right to service these loans and receive servicing fees based upon the securitized loan balances and certain ancillary fees, all of which are reported in Servicing and subservicing fees in the consolidated statements of operations. Transfers of Forward Loans We sell or securitize forward loans that we originate or that we purchase from third parties, generally in the form of mortgage-backed securities guaranteed by the GSEs or Ginnie Mae. Securitization usually occurs within 30 days of loan closing or purchase. We retain the servicing rights associated with the transferred loans and receive a servicing fee for services provided. We act only as a fiduciary and do not have a variable interest in the securitization trusts. As a result, we account for these transactions as sales upon transfer. We report the gain or loss on the transfer of the loans held for sale in Gain on loans held for sale, net in the consolidated statements of operations along with the changes in fair value of the loans and the gain or loss on any related derivatives. We include all changes in loans held for sale and related derivative balances in operating activities in the consolidated statements of cash flows. The following table presents a summary of cash flows received from and paid to securitization trusts related to transfers accounted for as sales that were outstanding during the years ended December 31: 2016 2015 2014 Proceeds received from securitizations $ 5,197,071 $ 4,970,454 $ 5,265,183 Servicing fees collected 14,616 29,239 25,438 Purchases of previously transferred assets, net of claims reimbursed (1,271 ) (2,863 ) 4,973 $ 5,210,416 $ 4,996,830 $ 5,295,594 In connection with these transfers, we retained MSRs of $37.2 million , $36.0 million and $39.8 million during 2016 , 2015 and 2014 , 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 December 31: 2016 2015 Carrying value of assets: Mortgage servicing rights, at amortized cost $ 94,492 $ 54,729 Mortgage servicing rights, at fair value 233 236 Advances and match funded advances 37,336 26,968 UPB of loans transferred 10,485,697 7,471,025 Maximum exposure to loss $ 10,617,758 $ 7,552,958 At December 31, 2016 and 2015 , 7.6% and 8.2% , respectively, of the transferred residential loans that we service were 60 days or more past due. During 2016 and 2015 , there were $0.3 million and $0.5 million , respectively, of charge-offs, net of recoveries, associated with these transferred loans related to our standard representations and warranties obligations. 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 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 measure the HECM loans and HMBS-related borrowings at fair value on a recurring basis. The changes in fair value of the HECM loans and HMBS-related borrowings are included in Other revenues in our 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 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 consolidated statements of cash flows. Proceeds from securitizations of HECM loans and payments on HMBS-related borrowings are included in financing activities in the consolidated statements of cash flows. At December 31, 2016 and 2015 , we had HMBS-related borrowings of $3.4 billion and $2.4 billion , respectively. Loans held for investment - Reverse mortgages, at fair value were $3.6 billion and $2.5 billion at December 31, 2016 and 2015 , respectively. At December 31, 2016 , Loans held for investment included $81.3 million of originated loans that had not yet been pledged as collateral. See Note 4 — Fair Value and Note 13 — Borrowings for additional information on HMBS-related borrowings and Loans held for investment - Reverse mortgages. Financings of Advances on Loans Serviced for Others Match funded advances on loans serviced for others result from our transfers of residential loan servicing advances to SPEs in exchange for cash. We consolidate these SPEs because we have determined that Ocwen is the primary beneficiary of the SPE. These SPEs issue debt supported by collections on the transferred advances, and we refer to this debt as Match funded liabilities. We make the transfers to these SPEs under the terms of our advance financing facility agreements. We classify the transferred advances on our consolidated balance sheets as Match funded advances and the related liabilities as Match funded liabilities. The SPEs use collections of the pledged advances to repay principal and interest and to pay the expenses of the SPE. Holders of the debt issued by these entities have recourse only to the assets of the SPE for satisfaction of the debt. The assets and liabilities of the advance financing SPEs are comprised solely of Match funded advances, Debt service accounts, Match funded liabilities and amounts due to affiliates. Amounts due to affiliates are eliminated in consolidation in our consolidated balance sheets. |
Sales of Advances and MSRs
Sales of Advances and MSRs | 12 Months Ended |
Dec. 31, 2016 | |
Transfers and Servicing of Financial Assets [Abstract] | |
Sales of Advances and MSRs | Note 3 — Sales of Advances and MSRs In order to efficiently finance our assets, streamline our operations and generate liquidity, we sell MSRs, Rights to MSRs and servicing advances to market participants. We may retain the right to subservice loans when we sell MSRs. In connection with sales of Rights to MSRs, we retain legal ownership of the MSRs and continue to service the related mortgage loans until such time as all necessary consents to a transfer of the MSRs are received. The following table provides a summary of the MSRs and advances sold during the years ended December 31: 2016 (1) 2015 (1) 2014 (2) Mortgage Servicing Rights Advances and Match Funded Advances Mortgage Servicing Rights Advances and Match Funded Advances Mortgage Servicing Rights Advances and Match Funded Advances Sales price of assets sold: Accounted for as a sale $ 29,550 $ 31,904 $ 775,351 $ 562,325 $ 287 $ 1,054 Accounted for as a financing — — — — 123,551 88,981 29,550 31,904 775,351 562,325 123,838 90,035 Amount due from purchaser at December 31 — (399 ) (18,615 ) (76,014 ) — — Amounts paid to purchaser for estimated representation and warranty obligations, compensatory fees and related indemnification obligations (1,320 ) — (69,898 ) — — — Amounts received from purchaser for items outstanding at the end of the previous year 18,814 71,512 — — — — Total net cash received $ 47,044 $ 103,017 $ 686,838 $ 486,311 $ 123,838 $ 90,035 (1) In 2016 and 2015, we sold MSRs relating to loans with a UPB of $3.7 billion (Agency and non-Agency) and $87.6 billion (Agency), respectively. (2) In 2014, we issued $123.6 million of OASIS Series 2014-1 Notes secured by Ocwen-owned MSRs relating to Freddie Mac mortgages of $11.8 billion UPB. On April 6, 2015, Home Loan Servicing Solutions, Ltd. (HLSS) closed on the sale of substantially all of its assets to New Residential Investment, Corp. (NRZ). References to NRZ in these consolidated financial statements include HLSS and HLSS Holdings, LLC (Holdings) for periods prior to April 6, 2015 because, following HLSS’ sale of substantially all of its assets (including the stock of Holdings) on April 6, 2015, NRZ, through its subsidiaries, is the owner of the Rights to MSRs and has assumed HLSS’ 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. As of December 31, 2016 , these Rights to MSRs relate to approximately $118.7 billion in UPB of our non-Agency MSRs. Pursuant to our agreements with NRZ, NRZ has assumed the obligation to fund new servicing advances with respect to the Rights to MSRs. We continue to service the loans for which the Rights to MSRs have been sold to NRZ. Accordingly, in the event NRZ were unable to fulfill its advance funding obligations, as the servicer under our servicing agreements with the residential mortgage backed securitization trusts, we would be contractually obligated to fund such advances under those servicing agreements. At December 31, 2016 , NRZ had outstanding advances of approximately $4.1 billion in connection with the Rights to MSRs. The servicing fees payable under the servicing agreements underlying the Rights to MSRs are apportioned between NRZ and us as provided in our agreements with NRZ. NRZ retains a fee based on the UPB of the loans serviced, and OLS receives certain fees, including a performance fee based on servicing fees actually paid less an amount calculated based on the amount of servicing advances and cost of financing those advances. The apportionment of these fees with respect to each tranche of Rights to MSRs sold to NRZ is subject to negotiations required to be commenced by NRZ no later than six months prior to the servicing fee reset date. The servicing fee reset date is 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, unless there is an uncured termination event with respect to an affected servicing agreement due to a servicer rating downgrade of OLS’s S&P or Moody’s Investors Service, Inc. (Moody’s), residential primary servicer rating for subprime loans to Below Average (or lower) or SQ4 (or lower), respectively, on the sixth anniversary of the closing date of the particular tranche, in which case such six year anniversary shall be the fee reset date. If the parties are not able to agree on servicing fees prior to the fee reset date, NRZ is required to continue paying under the existing fee structure and the agreements between the parties will continue in effect with respect to each underlying servicing agreement unless and until NRZ directs the transfer of servicing under such servicing agreement to a third-party servicer with respect to which all required third-party consents and licenses have been obtained. Under our agreements with NRZ, the legal ownership of the MSRs and certain other rights under the servicing agreements may be transferred to Holdings or a third party as described below. The parties have agreed to a standstill of the transfer period that extends through April 6, 2017, such that a transfer to Holdings will not occur and NRZ will not take action to direct a transfer to a third party except under certain limited circumstances. Beginning April 7, 2017, we will be obligated to transfer legal ownership of the MSRs to Holdings (now owned by NRZ) if and when Holdings 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 Holdings, and the subservicing agreement will have a subservicing fee reset date comparable to the servicing fee reset date described above. Also beginning April 7, 2017, NRZ will have a general right to direct us to transfer servicing of the servicing agreements underlying the Rights to MSRs to a third party that can obtain all required third-party consents and licenses, provided that the transfer is subject to our continued right to be paid the servicing fees and other amounts payable under our agreements with NRZ. Pursuant to our agreements with NRZ, if a termination event occurs with respect to a servicing agreement, NRZ has the right to direct the transfer of servicing with respect to an affected servicing agreement to a replacement servicer that obtains all required third-party consents and licenses. Following any such transfer, we would no longer be entitled to receive future servicing fee revenue with respect to the transferred servicing agreement. Under the Amendment, NRZ agreed to a standstill through April 6, 2017, to not take action with respect to any termination event that is related to any servicer rating downgrade in any such affected servicing agreement except under certain limited circumstances. 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. Under our agreements with NRZ, if S&P downgraded our servicer rating to Below Average (which it did in 2015), we agreed to compensate NRZ for certain increased costs associated with its servicing advance financing facilities. This compensation requirement ran for a period of 12 months beginning June 2015. The NRZ/HLSS Transactions are accounted for as financings. If and when transfer of legal ownership of the underlying MSRs occurs upon receipt of third-party consents, we would derecognize the related MSRs. Upon derecognition, any resulting gain or loss is deferred and amortized over the expected life of the related subservicing agreement. Until derecognition, we continue to recognize the full amount of servicing revenue and amortization of the MSRs. The sales of advances in connection with MSR sales, including the NRZ/HLSS Transactions, meet the requirements for sale accounting, and the advances are derecognized from our consolidated financial statements at the servicing transfer date, or, in the case of advances sold in connection with the sale of Rights to MSRs, at the time of the sale. In 2014, Ocwen sold advances related to certain FHA-insured mortgage loans to subsidiaries of NRZ. These advance sales did not qualify for sales treatment and were accounted for as financings (Financing liability - Advances pledged). |
Fair Value
Fair Value | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Note 4 — Fair Value Fair value is estimated based on a hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs. Observable inputs are inputs that reflect the assumptions that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The fair value hierarchy prioritizes the inputs to valuation techniques into three broad levels whereby the highest priority is given to Level 1 inputs and the lowest to Level 3 inputs. Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date. Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3: Unobservable inputs for the asset or liability. We classify assets in their entirety based on the lowest level of input that is significant to the fair value measurement. The carrying amounts and the estimated fair values of our financial instruments and certain of our nonfinancial assets measured at fair value on a recurring or non-recurring basis or disclosed, but not carried, at fair value are as follows at December 31: 2016 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 $ 284,632 $ 284,632 $ 309,054 $ 309,054 Loans held for sale, at lower of cost or fair value (b) 3 29,374 29,374 104,992 104,992 Total Loans held for sale $ 314,006 $ 314,006 $ 414,046 $ 414,046 Loans held for investment - Reverse mortgages, at fair value (a) 3 $ 3,565,716 $ 3,565,716 $ 2,488,253 $ 2,488,253 Advances and match funded advances (c) 3 1,709,846 1,709,846 2,151,066 2,151,066 Receivables, net (c) 3 265,720 265,720 286,981 286,981 Mortgage-backed securities, at fair value (a) 3 8,342 8,342 7,985 7,985 U.S. Treasury notes (a) 1 2,078 2,078 — — Financial liabilities: Match funded liabilities (c) 3 $ 1,280,997 $ 1,275,059 $ 1,584,049 $ 1,581,786 Financing liabilities: HMBS-related borrowings, at fair value (a) 3 $ 3,433,781 $ 3,433,781 $ 2,391,362 $ 2,391,362 Financing liability - MSRs pledged (a) 3 477,707 477,707 541,704 541,704 Other (c) 3 101,324 81,805 156,189 131,940 Total Financing liabilities $ 4,012,812 $ 3,993,293 $ 3,089,255 $ 3,065,006 Other secured borrowings: Senior secured term loan (c) (d) 2 $ 323,514 $ 327,674 $ 377,091 $ 397,956 Other (c) 3 355,029 355,029 385,320 385,320 Total Other secured borrowings $ 678,543 $ 682,703 $ 762,411 $ 783,276 Senior notes: Senior unsecured notes (c) (d) 2 $ 3,094 $ 3,048 $ 345,511 $ 318,063 Senior secured notes (c) (d) 2 343,695 352,255 — — Total Senior notes $ 346,789 $ 355,303 $ 345,511 $ 318,063 Derivative financial instruments assets (liabilities) (a): Interest rate lock commitments 2 $ 6,507 $ 6,507 $ 6,080 $ 6,080 Forward mortgage-backed securities trades 1 (614 ) (614 ) 295 295 Interest rate caps 3 1,836 1,836 2,042 2,042 Mortgage servicing rights: Mortgage servicing rights, at fair value (a) 3 $ 679,256 $ 679,256 $ 761,190 $ 761,190 Mortgage servicing rights, at amortized cost (c) (e) 3 363,722 467,911 377,379 461,555 Total Mortgage servicing rights $ 1,042,978 $ 1,147,167 $ 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 13 — Borrowings for additional information . (e) Balances include our impaired government-insured stratum of amortization method MSRs, which is measured at fair value on a non-recurring basis and reported net of the valuation allowance. Before applying the valuation allowance of $28.2 million , the carrying value of the impaired stratum at December 31, 2016 was $172.9 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 (1) Derivatives MSRs Total Year Ended December 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 — — — — 1,337 — 1,337 Issuances 1,107,046 (1,086,795 ) — — — (1,548 ) 18,703 Sales — — — — — (148 ) (148 ) Settlements (2) (243,596 ) 230,045 — 63,997 (156 ) — 50,290 863,450 (856,750 ) — 63,997 1,181 (1,696 ) 70,182 Total realized and unrealized gains and (losses) (3): Included in earnings 214,013 (185,669 ) 357 — (1,387 ) (80,238 ) (52,924 ) Included in Other comprehensive income — — — — — — — 214,013 (185,669 ) 357 — (1,387 ) (80,238 ) (52,924 ) Transfers in and / or out of Level 3 — — — — — — — Ending balance $ 3,565,716 $ (3,433,781 ) $ 8,342 $ (477,707 ) $ 1,836 $ 679,256 $ 343,662 Loans Held for Investment - Reverse Mortgages HMBS-Related Borrowings Mortgage-Backed Securities Financing Liability - MSRs Pledged (1) Derivatives MSRs Total Year Ended December 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 — — — — 2,506 1,007 3,513 Issuances 1,008,065 (1,024,361 ) — — — (2,428 ) (18,724 ) Transfer from MSRs carried at amortized cost — — — — — 839,157 839,157 Sales — — — — — (72,274 ) (72,274 ) Settlements (2) (151,134 ) 153,016 — 72,737 346 — 74,965 856,931 (871,345 ) — 72,737 2,852 765,462 826,637 Total realized and unrealized gains and (losses) (3): Included in earnings 81,181 (75,765 ) 650 — (1,377 ) (98,173 ) (93,484 ) Included in Other comprehensive income — — — — — — — 81,181 (75,765 ) 650 — (1,377 ) (98,173 ) (93,484 ) Transfers in and / or out of Level 3 — — — — — — Ending balance $ 2,488,253 $ (2,391,362 ) $ 7,985 $ (541,704 ) $ 2,042 $ 761,190 $ 326,404 Loans Held for Investment - Reverse Mortgages HMBS-Related Borrowings Mortgage-Backed Securities Financing Liability - MSRs Pledged (1) Derivatives MSRs Total Year Ended December 31, 2014 Beginning balance $ 618,018 $ (615,576 ) $ — $ (633,804 ) $ 442 $ 116,029 $ (514,891 ) Purchases, issuances, sales and settlements: Purchases — — 7,677 — 787 — 8,464 Issuances 816,881 (783,009 ) — — — — 33,872 Transfers from Loans held for sale, at fair value 110,874 — — — — — 110,874 Sales — — — — — — — Settlements (2) (99,923 ) 47,077 — 19,363 — — (33,483 ) 827,832 (735,932 ) 7,677 19,363 787 — 119,727 Total realized and unrealized gains and (losses): Included in earnings 104,291 (92,744 ) (342 ) — (662 ) (22,128 ) (11,585 ) Included in Other comprehensive income — — — — — — — 104,291 (92,744 ) (342 ) — (662 ) (22,128 ) (11,585 ) Transfers in and / or out of Level 3 — — — — — — — Ending balance $ 1,550,141 $ (1,444,252 ) $ 7,335 $ (614,441 ) $ 567 $ 93,901 $ (406,749 ) (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 2015 and 2014 include $2.2 million and $2.0 million , respectively, of such reimbursements. There were no such payments in 2016. (2) Settlements for Loans held for investment - reverse mortgages consist chiefly of principal payments received but also may include non-cash settlements of loans. (3) Total gains (losses) attributable to derivative financial instruments still held at December 31, 2016 and 2015 were $0.3 million and $(1.0) million for 2016 and 2015 , respectively. Total losses for 2016 and 2015 attributable to MSRs still held at December 31, 2016 and 2015 were $78.3 million and $90.3 million , 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 We 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 included in the valuations consisted of the following at December 31: 2016 2015 Life in years Range 5.53 to 8.67 6.11 to 9.70 Weighted average 6.05 6.49 Conditional repayment rate Range 5.23% to 53.75% 4.96% to 53.75% Weighted average 20.91 % 19.85 % Discount rate 3.32 % 3.36 % Significant increases or decreases in any of these assumptions in isolation could result in a significantly lower or higher fair value, respectively. The effects of changes in the assumptions used to value the loans held for investment are largely offset by the effects of changes in the assumptions used to value the HMBS-related borrowings that are associated with these loans. Mortgage Servicing Rights The significant components of the estimated future cash inflows for MSRs include servicing fees, late fees, float earnings and other ancillary fees. Significant cash outflows include the cost of servicing, the cost of financing servicing advances and compensating interest payments. Third-party valuation experts generally utilize: (a) transactions involving instruments with similar collateral and risk profiles, adjusted as necessary based on specific characteristics of the asset or liability being valued; and/or (b) industry-standard modeling, such as a discounted cash flow model, in arriving at their estimate of fair value. The prices provided by the valuation experts reflect their observations and assumptions related to market activity, including risk premiums and liquidity adjustments. The models and related assumptions used by the valuation experts are owned and managed by them and, in many cases, the significant inputs used in the valuation techniques are not reasonably available to us. However, we have an internal understanding of the processes and assumptions used to develop the prices based on our ongoing due diligence, which includes regular discussions with the valuation experts. We believe that the procedures executed by the valuation experts, supported by our internal verification and analytical procedures, provide reasonable assurance that the prices used in our consolidated financial statements comply with the accounting guidance for fair value measurements and disclosures and reflect the assumptions that a market participant would use. We evaluate the reasonableness of our third-party experts’ assumptions using historical experience adjusted for prevailing market conditions. Assumptions used in the valuation of MSRs include: • Mortgage prepayment speeds • Interest rate used for computing the cost of financing servicing advances • Cost of servicing • Interest rate used for computing float earnings • Discount rate • Compensating interest expense • Delinquency rates • Collection rate of other ancillary fees Amortized Cost MSRs We estimate the fair value of MSRs carried at amortized cost using a process that involves either actual sale prices obtained or the use of independent third-party valuation experts, supported by commercially available discounted cash flow models and analysis of current market data. To provide greater price transparency to investors, we disclose actual Ocwen sale prices for orderly transactions where available in lieu of third-party valuations. The more significant assumptions used in the valuations consisted of the following at December 31: 2016 2015 Weighted average prepayment speed 8.90 % 11.34 % Weighted average delinquency rate 11.08 % 13.27 % Advance financing cost 5-year swap 5-year swap Interest rate for computing float earnings 5-year swap 5-year swap Weighted average discount rate 8.90 % 9.41 % Weighted average cost to service (in dollars) $ 108 $ 92 We perform an impairment analysis based on the difference between the carrying amount and fair value after grouping the underlying loans into the applicable strata. Our strata are defined as conventional and government-insured. Fair Value MSRs MSRs carried at fair value are classified within Level 3 of the valuation hierarchy. The fair value is equal to the mid-point of the range of prices provided by third-party valuation experts, without adjustment, except in the event we have a potential or completed Ocwen sale, including transactions where we have executed letters of intent, in which case the fair value of the MSRs is carried at the estimated sale price. Fair value reflects actual Ocwen sale prices for orderly transactions where available in lieu of independent third-party valuations. Our valuation process includes discussions of bid pricing with the third-party valuation experts and presumably are contemplated along with other market-based transactions in their model validation. A change in the valuation inputs utilized by the valuation experts might result in a significantly higher or lower fair value measurement. Changes in market interest rates tend to impact the fair value for Agency MSRs via prepayment speeds by altering the borrower refinance incentive and the 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 valuations consisted of the following at December 31: 2016 2015 Agency Non-Agency Agency Non-Agency Weighted average prepayment speed 8.36 % 16.47 % 9.91 % 16.83 % Weighted average delinquency rate 0.99 % 29.32 % 0.82 % 27.99 % Advance financing cost 5-year swap 1-Month LIBOR (1ML) plus 3.5% 5-year swap 1-Month LIBOR (1ML) plus 3.5% Interest rate for computing float earnings 5-year swap 1ML 5-year swap 1ML Weighted average discount rate 9.00 % 14.93 % 9.00 % 15.03 % Weighted average cost to service (in dollars) $ 64 $ 307 $ 71 $ 321 Advances We value advances at their net realizable value, which generally approximates fair value, because advances have no stated maturity, are generally realized within a relatively short period of time and do not bear interest. Receivables The carrying value of receivables generally approximates fair value because of the relatively short period of time between their origination and realization. Mortgage-Backed Securities (MBS) Our subordinate and residual securities are not actively traded, and therefore, we estimate the fair value of these securities based on the present value of expected future cash flows from the underlying mortgage pools. We use our best estimate of the key assumptions we believe are used by market participants. We calibrate our internally developed discounted cash flow models for trading activity when appropriate to do so in light of market liquidity levels. Key inputs include expected prepayment rates, delinquency and cumulative loss curves and discount rates commensurate with the risks. Where possible, we use observable inputs in the valuation of our securities. However, the subordinate and residual securities in which we have invested trade infrequently and therefore have few or no observable inputs and little price transparency. Additionally, during periods of market dislocation, the observability of inputs is further reduced. Changes in the fair value of our investment in subordinate and residual securities are recognized in Other, net in the consolidated statements of operations. Discount rates for the subordinate and residual securities are determined based upon an assessment of prevailing market conditions and prices for similar assets. We project the delinquency, loss and prepayment assumptions based on a comparison to actual historical performance curves adjusted for prevailing market conditions. U.S. Treasury Notes We base the fair value on quoted prices in active markets to which we have access. 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 valuations consisted of the following at December 31: 2016 2015 Life in years Range 4.50 to 8.67 4.73 to 9.70 Weighted average 5.09 5.39 Conditional repayment rate Range 5.23 % to 53.75% 4.96% to 53.75% Weighted average 20.91 % 19.85 % Discount rate 2.70 % 2.78 % Significant increases or decreases in any of these assumptions in isolation would result in a significantly higher or lower fair value. MSRs Pledged We periodically sell Rights to MSRs and the related servicing advances. Because we have retained legal title to the MSRs, the sales of Rights to MSRs are accounted for as financings. We initially establish the value of the Financing Liability - 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 prices of the underlying MSRs consisted of the following at December 31: 2016 2015 Weighted average prepayment speed 16.96 % 17.43 % Weighted average delinquency rate 29.80 % 29.83 % Advance financing cost 1ML plus 3.5% 1 ML plus 3.5% Interest rate for computing float earnings 1ML 1ML Weighted average discount rate 14.85 % 14.92 % Weighted average cost to service (in dollars) $ 313 $ 326 Significant increases or decreases in these assumptions in isolation would result in a significantly higher or lower fair value. Secured Notes We issued Ocwen Asset Servicing Income Series (OASIS), Series 2014-1 Notes secured by Ocwen-owned MSRs relating to Freddie Mac mortgages. We accounted for this transaction as a financing. We determine the fair value based on bid prices provided by third parties involved in the issuance and placement of the notes. Other Secured Borrowings The carrying value of secured borrowings that bear interest at a rate that is adjusted regularly based on a market index approximates fair value. For other secured borrowings that bear interest at a fixed rate, we determine fair value by discounting the future principal and interest repayments at a market rate commensurate with the risk of the estimated cash flows. For the SSTL, we based the fair value on quoted prices in a market with limited trading activity. Senior 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 1ML interest rates. The fair value for interest rate caps is based on counterparty market prices and adjusted for counterparty credit risk. |
Loans Held for Sale
Loans Held for Sale | 12 Months Ended |
Dec. 31, 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 years ended December 31: 2016 2015 2014 Beginning balance $ 309,054 $ 401,120 $ 503,753 Originations and purchases 4,211,871 3,944,509 4,967,767 Proceeds from sales (4,236,158 ) (4,061,217 ) (5,001,935 ) Principal collections (11,620 ) (8,647 ) (13,300 ) Transfers to loans held for investment - reverse mortgages — — (110,874 ) Transfers from loans held for sale at lower of cost or fair value 3,266 1,200 — Gain on sale of loans 13,421 42,053 49,533 Increase (decrease) in fair value of loans (7,030 ) (9,066 ) 6,198 Other 1,828 (898 ) (22 ) Ending balance (1) $ 284,632 $ 309,054 $ 401,120 (1) At December 31, 2016 , 2015 and 2014 , the balances include $4.9 million , $11.9 million and $21.0 million , respectively, of fair value adjustments. At December 31, 2016 , loans held for sale, at fair value with a UPB of $279.0 million were pledged as collateral to 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 years ended December 31: 2016 2015 2014 Beginning balance $ 104,992 $ 87,492 $ 62,907 Purchases 1,878,561 1,056,172 2,462,573 Proceeds from sales (1,699,427 ) (1,001,939 ) (2,067,965 ) Principal collections (22,607 ) (53,400 ) (262,196 ) Transfers to accounts receivable (256,336 ) (53,468 ) (114,675 ) Transfers to real estate owned (7,675 ) (18,594 ) (8,808 ) Transfers to loans held for sale at fair value (3,266 ) (1,200 ) — Gain on sale of loans 24,565 43,449 31,853 Decrease (increase) in valuation allowance 4,594 35,018 (18,965 ) Other 5,973 11,462 2,768 Ending balance (1) $ 29,374 $ 104,992 $ 87,492 (1) At December 31, 2016 , 2015 and 2014 , the balances include $24.8 million , $85.9 million and $42.0 million , respectively, of loans that we were required to repurchase from Ginnie Mae guaranteed securitizations as part of our servicing obligations. Repurchased loans are modified or otherwise remediated through loss mitigation activities or are reclassified to receivables. The change in the valuation allowance during the years ended December 31 is as follows: 2016 2015 2014 Beginning balance $ 14,658 $ 49,676 $ 30,711 Provision 3,599 (400 ) (1,301 ) Transfer from liability for indemnification obligations 2,368 1,180 20,441 Sales of loans (10,208 ) (37,776 ) (7,614 ) Other (353 ) 1,978 7,439 Ending balance $ 10,064 $ 14,658 $ 49,676 At December 31, 2016 , loans held for sale, at lower of cost or fair value with a UPB of $12.7 million were pledged as collateral to a warehouse line of credit in our Servicing segment. In March 2014, we purchased delinquent FHA-insured loans with a UPB of $549.4 million out of Ginnie Mae guaranteed securitizations under the terms of a conditional repurchase option whereby as servicer we have the right, but not the obligation, to repurchase delinquent loans at par plus delinquent interest (the Ginnie Mae early buy-out (EBO) program). Immediately after their purchase, we sold the loans and related advances to a subsidiary of NRZ for $612.3 million ( $556.6 million for the loans and $55.7 million for the related servicing advances). We recognized a gain of $7.2 million on the sale of the loans. Following the initial transactions, we sold an additional $13.1 million of advances to a subsidiary of NRZ. We had recorded these advances in connection with the subsequent servicing of the sold loans. On May 1, 2014, we purchased a second group of delinquent FHA-insured loans with a UPB of $451.0 million through the Ginnie Mae EBO program for $479.6 million , including delinquent interest. On May 2, 2014, we sold the loans to an unrelated third party for $462.5 million and recognized a gain of $1.3 million , including the value assigned to the retained MSRs. Separately, we sold $20.2 million of the advances related to these loans to a subsidiary of NRZ. The sales of advances to NRZ subsidiaries in 2014 did not qualify for sales treatment and were accounted for as a financing. In March 2015, we recognized a gain of $12.9 million on sales of loans with a total UPB of $42.7 million to an unrelated third party. In May 2015, we recognized a gain of $7.2 million on sales of a second group of loans with a total UPB of $33.0 million to an unrelated third party. We had repurchased these loans under the representation and warranty provisions of our contractual obligations to the GSEs as primary servicer of the loans. Gain on Loans Held for Sale, Net The following table summarizes the activity in Gain on loans held for sale, net, during the years ended December 31: 2016 2015 2014 Gain on sales of loans, net $ 93,308 $ 152,970 $ 168,449 Change in fair value of IRLCs (55 ) 14 (25,822 ) Change in fair value of loans held for sale 4,595 (8,525 ) 10,489 Loss on economic hedge instruments (6,592 ) (8,675 ) (17,214 ) Other (865 ) (815 ) (1,605 ) $ 90,391 $ 134,969 $ 134,297 Gain on loans held for sale, net includes $36.0 million , $36.0 million and $39.8 million for 2016 , 2015 and 2014 , 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 $24.6 million , $23.0 million and $54.7 million recorded during 2016 , 2015 and 2014 , 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 $125.7 million , $112.6 million and $72.7 million during 2016 , 2015 and 2014 , respectively. |
Advances
Advances | 12 Months Ended |
Dec. 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 December 31: 2016 2015 Principal and interest $ 31,334 $ 81,681 Taxes and insurance 170,131 278,487 Foreclosures, bankruptcy and other 94,369 126,031 295,834 486,199 Allowance for losses (37,952 ) (41,901 ) $ 257,882 $ 444,298 Advances at December 31, 2016 and 2015 include $29.0 million and $86.4 million , respectively, of previously sold advances that did not qualify for sale accounting. The following table summarizes the activity in net advances for the years ended December 31: 2016 2015 2014 Beginning balance $ 444,298 $ 893,914 $ 890,832 Acquisitions (1) — — 99,319 Transfers to match funded advances — — (10,156 ) Sales of advances (2) (24,631 ) (253,335 ) — Collections of advances, charge-offs and other, net (165,734 ) (224,414 ) (54,424 ) Decrease (increase) in allowance for losses 3,949 28,133 (31,657 ) Ending balance $ 257,882 $ 444,298 $ 893,914 (1) Servicing advances acquired primarily in connection with the acquisition of MSRs. Acquisitions in 2014 include advances acquired in connection with the purchase of loans through the Ginnie Mae EBO program. (2) Servicing advances sold primarily in connection with sales of MSRs which met the requirements for sale accounting and which were derecognized from our financial statements at the time of the sale. However, advances sold during 2014 in connection with the sale of loans purchased through the Ginnie Mae EBO program did not qualify as sales for accounting purposes and were accounted for as a financing. The change in the allowance for losses for the years ended December 31 is as follows: 2016 2015 2014 Beginning balance $ 41,901 $ 70,034 $ 38,377 Provision (2,043 ) 61,445 83,164 Recoveries (charge-offs), net and other (1,906 ) (89,578 ) (51,507 ) Ending balance $ 37,952 $ 41,901 $ 70,034 |
Match Funded Advances
Match Funded Advances | 12 Months Ended |
Dec. 31, 2016 | |
Transfers and Servicing [Abstract] | |
Match Funded Advances | Note 7 — Match Funded Advance s Match funded advances on residential loans we service for others are comprised of the following at December 31: 2016 2015 Principal and interest $ 711,272 $ 948,376 Taxes and insurance 530,946 608,404 Foreclosures, bankruptcy, real estate and other 209,746 149,988 $ 1,451,964 $ 1,706,768 The following table summarizes the activity in match funded advances for the years ended December 31: 2016 2015 2014 Beginning balance $ 1,706,768 $ 2,409,442 $ 2,552,383 Acquisitions (1) — — 85,521 Transfers from advances (2) — — 10,156 Sales of advances (8,923 ) (308,990 ) — Collections of pledged advances, net (245,881 ) (393,684 ) (238,618 ) Ending balance $ 1,451,964 $ 1,706,768 $ 2,409,442 (1) Servicing advances acquired primarily in connection with the acquisition of MSRs that were pledged to advance facilities at the date of acquisition. (2) New servicing advances initially classified as Advances at the date of payment and subsequently pledged to advance financing facilities. |
Mortgage Servicing
Mortgage Servicing | 12 Months Ended |
Dec. 31, 2016 | |
Transfers and Servicing [Abstract] | |
Mortgage Servicing | Note 8 — Mortgage Servicing Mortgage Servicing Rights – Amortization Method The following table summarizes changes in the net carrying value of servicing assets that we account for using the amortization method for the years ended December 31. 2016 2015 2014 Beginning balance $ 377,379 $ 1,820,091 $ 1,953,352 Fair value election - transfer to MSRs carried at fair value (1) — (787,142 ) — Additions recognized in connection with business acquisitions (2) (3) — — 20,378 Additions recognized in connection with asset acquisitions 17,356 12,356 35,326 Additions recognized on the sale of mortgage loans 37,231 34,961 63,310 Sales (24,452 ) (586,352 ) (137 ) Servicing transfers and adjustments — — (1,763 ) 407,514 493,914 2,070,466 Increase in impairment valuation allowance (4) (10,813 ) (17,341 ) — Amortization (32,979 ) (99,194 ) (250,375 ) Ending balance $ 363,722 $ 377,379 $ 1,820,091 Estimated fair value at end of year $ 467,911 $ 461,555 $ 2,237,703 (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) As of the February 15, 2013 acquisition date, the purchase of certain MSRs from Residential Capital, LLC (ResCap) was not complete pending the receipt of certain consents and court approvals. Subsequent to the acquisition, we obtained the required consents and approvals for a portion of these MSRs and, in 2014, paid an additional purchase price of $54.2 million , which included $11.4 million to acquire the MSRs and $39.2 million to acquire the related advances. We recorded a contingent asset effective as of the ResCap acquisition date. (3) On January 31, 2014, we increased our ownership in Ocwen Structured Investments, LLC (OSI) from 26.00% to 87.35% . The acquired net assets were $20.0 million and consisted primarily of MSRs ( $9.0 million ), mortgage-backed securities ( $7.7 million ) and cash ( $3.2 million ). (4) Impairment of MSRs is recognized in Servicing and origination expense in the consolidated statements of operations. The estimated amortization expense for MSRs, calculated based on assumptions used at December 31, 2016 , is projected as follows over the next five years: 2017 $ 45,960 2018 37,158 2019 35,264 2020 35,832 2021 33,134 Mortgage Servicing Rights – Fair Value Measurement Method The following table summarizes changes in the fair value of servicing assets that we account for at fair value on a recurring basis for the years ended December 31: 2016 2015 2014 Agency Non-Agency Total Agency Non-Agency Total Agency Beginning balance $ 15,071 $ 746,119 $ 761,190 $ 93,901 $ — $ 93,901 $ 116,029 Fair value election - transfer from MSRs carried at amortized cost — — — — 787,142 787,142 — Cumulative effect of fair value election — — — — 52,015 52,015 — Sales (3 ) (145 ) (148 ) (70,930 ) (1,344 ) (72,274 ) — Additions recognized on the sale of residential mortgage loans — — — — 1,007 1,007 — Servicing transfers and adjustments — (1,548 ) (1,548 ) — (2,428 ) (2,428 ) — Changes in fair value (1): — Changes in valuation inputs or other assumptions 305 — 305 (639 ) 10,684 10,045 (15,028 ) Realization of expected future cash flows and other changes (2,016 ) (78,527 ) (80,543 ) (7,261 ) (100,957 ) (108,218 ) (7,100 ) Ending balance $ 13,357 $ 665,899 $ 679,256 $ 15,071 $ 746,119 $ 761,190 $ 93,901 (1) Changes in fair value are recognized in Servicing and origination expense in the consolidated statements of operations. Because the mortgages underlying these MSRs permit the borrowers to prepay the loans, the value of the MSRs generally tends to diminish in periods of declining interest rates, 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 December 31, 2016 given hypothetical shifts in lifetime prepayments and yield assumptions: Adverse change in fair value 10% 20% Weighted average prepayment speeds $ (64,604 ) $ (131,414 ) Discount rate (option-adjusted spread) $ (19,043 ) $ (34,224 ) The sensitivity analysis measures the potential impact on fair values based on hypothetical changes, which in the case of our portfolio at December 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 consolidated balance sheets. Residential Commercial Total UPB at December 31, 2016 Servicing $ 86,049,298 $ — $ 86,049,298 Subservicing 4,330,084 92,933 4,423,017 NRZ (1) 118,712,748 — 118,712,748 $ 209,092,130 $ 92,933 $ 209,185,063 UPB at December 31, 2015 Servicing $ 100,058,745 $ — $ 100,058,745 Subservicing 13,764,558 105,268 13,869,826 NRZ (1) 137,142,809 — 137,142,809 $ 250,966,112 $ 105,268 $ 251,071,380 UPB at December 31, 2014 Servicing $ 208,135,523 $ — $ 208,135,523 Subservicing 29,806,924 149,737 29,956,661 NRZ (1) 160,785,280 — 160,785,280 $ 398,727,727 $ 149,737 $ 398,877,464 (1) UPB of loans serviced 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 $1.4 billion , $1.8 billion and $2.3 billion at December 31, 2016 , 2015 and 2014 , respectively. Commercial assets consist of large-balance foreclosed real estate. A significant portion of the servicing agreements for our non-Agency servicing portfolio contain provisions where we could be terminated as servicer without compensation upon the failure of the serviced loans to meet certain portfolio delinquency or cumulative loss thresholds. As a result of the economic downturn beginning in 2007 - 2008, 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. Of 3,796 non-Agency servicing agreements, 718 with approximately $34.1 billion of UPB as of December 31, 2016 have minimum servicer ratings criteria. As a result of our current servicer ratings, termination rights have been triggered in 174 of these non-Agency servicing agreements. This represents approximately $10.8 billion in UPB as of December 31, 2016 , or approximately 6.8% of our total non-Agency servicing portfolio. Downgrades in servicer ratings could adversely affect our ability to finance servicing advances and maintain our status as an approved servicer by Fannie Mae and Freddie Mac. The servicer rating requirements of Fannie Mae do not necessarily require or imply immediate action, as Fannie Mae has discretion with respect to whether we are in compliance with their requirements and what actions it deems appropriate under the circumstances in the event that we fall below their desired servicer ratings. At December 31, 2016 , the geographic distribution of the UPB and count of residential loans and real estate we serviced was as follows: Amount Count California $ 48,094,471 191,031 New York 18,741,164 79,197 Florida 17,282,020 126,949 New Jersey 10,254,163 49,857 Texas 9,522,228 109,763 Other 105,198,084 836,969 $ 209,092,130 1,393,766 Servicing Revenue The following table presents the components of servicing and subservicing fees for the years ended December 31: 2016 2015 2014 Loan servicing and subservicing fees: Servicing $ 293,210 $ 453,445 $ 627,678 Subservicing 21,427 58,384 128,797 NRZ 633,545 694,833 736,122 948,182 1,206,662 1,492,597 Home Affordable Modification Program (HAMP) fees 110,367 135,036 141,121 Late charges 66,709 82,690 121,618 Loan collection fees 27,213 31,763 33,983 Custodial accounts (float earnings) 8,969 15,870 6,693 Other 25,180 59,776 98,163 $ 1,186,620 $ 1,531,797 $ 1,894,175 Float balances amounted to $2.1 billion , $2.2 billion and $4.3 billion at December 31, 2016 , 2015 and 2014 , respectively. In addition to mortgage servicing and subservicing fees, in 2016 we executed clean-up calls on five small-balance commercial mortgage securitization trusts, which resulted in our recognizing income of $14.8 million related to the value of the underlying collateral held by the trusts, including amounts on deposit in spread accounts (a form of cash collateral account). We reported this income in Other, net, (a component of Other income (expense)) in the consolidated statements of operations. Simultaneously with the execution of the clean-up calls, we entered into a mortgage loan purchase agreement to sell the acquired commercial loans and foreclosed properties to a third party. The proceeds from the sale were used to fund the required payments to the holders of the debt securities issued by the trusts. The sales price of the loans represented a discount to the repurchase price of $2.8 million , which we reported in Gain on loans held for sale, net. |
Receivables
Receivables | 12 Months Ended |
Dec. 31, 2016 | |
Receivables [Abstract] | |
Receivables | Note 9 — Receivables Receivables consisted of the following at December 31: 2016 2015 Servicing-related receivables: Government-insured loan claims (1) $ 133,063 $ 71,405 Due from custodial accounts 44,761 13,800 Reimbursable expenses 29,358 29,856 Amount due on sales of mortgage servicing rights and advances 2,871 94,629 Other 46,052 32,879 256,105 242,569 Income taxes receivable 61,932 53,519 Other receivables 21,125 29,818 339,162 325,906 Allowance for losses (1) (73,442 ) (38,925 ) $ 265,720 $ 286,981 (1) At December 31, 2016 and 2015 , the allowance for losses related entirely to receivables of our Servicing business. Allowance for losses related to defaulted FHA or VA insured loans repurchased from Ginnie Mae guaranteed securitizations (government-insured loan claims) at December 31, 2016 and 2015 were $53.3 million and $20.6 million , respectively. |
Premises and Equipment
Premises and Equipment | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Premises and Equipment | Note 10 — Premises and Equipment Premises and equipment are summarized as follows at December 31: 2016 2015 Computer software $ 58,322 $ 45,411 Computer hardware 35,192 22,817 Leasehold improvements 25,975 23,326 Office equipment and other 12,114 11,761 Buildings 9,689 9,689 Furniture and fixtures 6,825 5,839 148,117 118,843 Less accumulated depreciation and amortization (85,373 ) (61,217 ) $ 62,744 $ 57,626 |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Note 11 — Goodwill During the fourth quarter of 2014, we determined that sufficient indicators of potential impairment existed to require an interim goodwill impairment analysis as of December 31, 2014. These indicators included significant declines in the market price of our common stock during the fourth quarter of 2014, including declines in reaction to the New York Department of Financial Services (NY DFS) settlement announced in December 2014, which included the resignation of our former Executive Chairman, and the California Department of Business Oversight (CA DBO) settlement announced in January 2015 that related to events in 2014. This reassessment resulted in the recognition of an impairment charge of $420.2 million in 2014, representing the entire balance of goodwill in our Servicing and Lending segments of $371.1 million and $49.1 million , respectively. In performing the two-step quantitative assessment, we first compared the fair value of each reporting unit with its net carrying value, including goodwill. Because the fair value of the reporting units exceeded their carrying value, it was necessary to perform the second step of the impairment test to measure the amount of impairment loss. In the second step, we compared the implied fair value of the reporting unit’s goodwill with the carrying value. Because the carrying amount of the goodwill exceeded the implied fair value for the reporting units, we recognized an impairment loss in an amount equal to that excess (up to the carrying value of goodwill). We determined the fair value of the reporting units based a combination of the income approach (discounted cash flow valuation methodology) and the market approach, and with the assistance of a third-party valuation firm. |
Other Assets
Other Assets | 12 Months Ended |
Dec. 31, 2016 | |
Other Assets [Abstract] | |
Other Assets | Note 12 — Other Assets Other assets consisted of the following at December 31: 2016 2015 Contingent loan repurchase asset (1) $ 246,081 $ 346,984 Prepaid expenses (2) 57,188 69,805 Debt service accounts (3) 42,822 87,328 Automotive dealer financing notes, net (4) 33,224 2,538 Derivatives, at fair value 9,279 6,367 Prepaid lender fees, net (5) 9,023 19,496 Prepaid income taxes (6) 8,392 11,749 Mortgage-backed securities, at fair value 8,342 7,985 Real estate 5,249 20,489 Other 15,772 13,754 $ 435,372 $ 586,495 (1) In connection with the Ginnie Mae EBO program, our agreements provide either that: (a) we have the right, but not the obligation, to repurchase previously transferred mortgage loans under certain conditions, including the mortgage loans becoming eligible for pooling under a program sponsored by Ginnie Mae; or (b) we have the obligation to repurchase previously transferred mortgage loans that have been subject to a successful trial modification before any permanent modification is made. Once these conditions are met, we have effectively regained control over the mortgage loan(s), and under GAAP, must re-recognize the loans on our consolidated balance sheets and establish a corresponding repurchase liability. With respect to those loans that we have the right, but not the obligation, to repurchase under the applicable agreement, this requirement applies regardless of whether we have any intention to repurchase the loan. We re-recognize the 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 December 31, 2016 and 2015 includes the remaining balance of $34.9 million and $41.3 million , respectively. (3) Under our advance 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. (4) These notes represent short-term inventory-secured floor plan loans provided to independent used car dealerships through our ACS venture. Automotive dealer financing notes are net of an allowance of $4.4 million and $0.03 million at December 31, 2016 and 2015 , respectively. We recognized a provision for losses on these notes of $4.3 million in 2016. (5) We amortize these costs to the earlier of the scheduled amortization date, contractual maturity date or prepayment date of the debt. (6) The deferred tax effects of intra-entity transfers of MSRs have been recognized as prepaid income taxes and are presently being amortized to Income tax expense over 7 -year periods through 2021. |
Borrowings
Borrowings | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Borrowings | Note 13 — Borrowings Match Funded Liabilities Match funded liabilities are comprised of the following at December 31: Borrowing Type Interest Rate Maturity (1) Amortization Date (1) Available Borrowing Capacity (2) 2016 2015 Advance Receivables Backed Notes, Series 2014-VF3, 1ML (3) + 185 bps Aug. 2047 Aug. 2017 $ 53,287 $ 59,892 $ 132,651 Advance Receivables Backed Notes - Series 2014-VF3, 1ML + 250 bps Aug. 2047 Aug. 2017 2,458 2,879 6,330 Advance Receivables Backed Notes - Series 2014-VF3, 1ML + 380 bps Aug. 2047 Aug. 2017 2,716 3,189 6,977 Advance Receivables Backed Notes - Series 2014-VF3, 1ML + 545 bps Aug. 2047 Aug. 2017 7,145 8,434 18,427 Advance Receivables Backed Notes - Series 2014-VF4, 1ML + 185 bps Aug. 2047 Aug. 2017 53,287 59,892 132,651 Advance Receivables Backed Notes - Series 2014-VF4, 1ML + 250 bps Aug. 2047 Aug. 2017 2,458 2,879 6,330 Advance Receivables Backed Notes - Series 2014-VF4, 1ML + 380 bps Aug. 2047 Aug. 2017 2,716 3,189 6,977 Advance Receivables Backed Notes - Series 2014-VF4, 1ML + 545 bps Aug. 2047 Aug. 2017 7,145 8,434 18,427 Advance Receivables Backed Notes - Series 2015-VF5, 1ML + 185 bps Aug. 2047 Aug. 2017 53,287 59,892 132,652 Advance Receivables Backed Notes - Series 2015-VF5, 1ML + 250 bps Aug. 2047 Aug. 2017 2,458 2,879 6,330 Advance Receivables Backed Notes - Series 2015-VF5, 1ML + 380 bps Aug. 2047 Aug. 2017 2,716 3,189 6,977 Borrowing Type Interest Rate Maturity (1) Amortization Date (1) Available Borrowing Capacity (2) 2016 2015 Advance Receivables Backed Notes - Series 2015-VF5, 1ML + 545 bps Aug. 2047 Aug. 2017 7,145 8,434 18,427 Advance Receivables Backed Notes - Series 2015-T1, 2.5365% Sep. 2046 Sep. 2016 — — 244,809 Advance Receivables Backed Notes - Series 2015-T1, 3.0307% Sep. 2046 Sep. 2016 — — 10,930 Advance Receivables Backed Notes - Series 2015-T1, 3.5240% Sep. 2046 Sep. 2016 — — 12,011 Advance Receivables Backed Notes - Series 2015-T1, 4.1000% Sep. 2046 Sep. 2016 — — 32,250 Advance Receivables Backed Notes - Series 2015-T2, 2.5320% Nov. 2046 Nov. 2016 — — 161,973 Advance Receivables Backed Notes - Series 2015-T2, 3.3720% Nov. 2046 Nov. 2016 — — 7,098 Advance Receivables Backed Notes - Series 2015-T2, 3.7660% Nov. 2046 Nov. 2016 — — 8,113 Advance Receivables Backed Notes - Series 2015-T2, 4.2580% Nov. 2046 Nov. 2016 — — 22,816 Advance Receivables Backed Notes - Series 2015-T3, 3.2110% Nov. 2047 Nov. 2017 — 310,195 310,195 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 Advance Receivables Backed Notes - Series 2016-T1, 2.5207% Aug. 2048 Aug. 2018 — 216,700 — Advance Receivables Backed Notes - Series 2016-T1, 3.0643% Aug. 2048 Aug. 2018 — 9,000 — Advance Receivables Backed Notes - Series 2016-T1, 3.6067% Aug. 2048 Aug. 2018 — 10,800 — Advance Receivables Backed Notes - Series 2016-T1, 4.2462% Aug. 2048 Aug. 2018 — 28,500 — Advance Receivables Backed Notes - Series 2016-T2, 2.7215% Aug. 2049 Aug. 2019 — 188,300 — Advance Receivables Backed Notes - Series 2016-T2, 3.2647% Aug. 2049 Aug. 2019 — 8,500 — Borrowing Type Interest Rate Maturity (1) Amortization Date (1) Available Borrowing Capacity (2) 2016 2015 Advance Receivables Backed Notes - Series 2016-T2, 3.8066% Aug. 2049 Aug. 2019 — 10,300 — Advance Receivables Backed Notes - Series 2016-T2, 4.4456% Aug. 2049 Aug. 2019 — 27,900 — Total Ocwen Master Advance Receivables Trust (OMART) 196,818 1,123,182 1,393,156 Advance Receivables Backed Notes, Series 2014-VF1, Cost of Funds + 230 bps Dec. 2047 Dec. 2017 8,171 43,229 31,343 Advance Receivables Backed Notes, Series 2014-VF1, Cost of Funds + 360 bps Dec. 2047 Dec. 2017 597 3,403 4,157 Advance Receivables Backed Notes, Series 2014-VF1, Cost of Funds + 410 bps Dec. 2047 Dec. 2017 879 4,421 4,564 Advance Receivables Backed Notes, Series 2014-VF1, Cost of Funds + 470 bps Dec. 2047 Dec. 2017 2,260 12,040 11,351 Total Ocwen Servicer Advance Receivables Trust III (OSART III) (6) 11,907 63,093 51,415 Advance Receivables Backed Notes, Series 2015-VF1, Class A 1ML + 240 bps Jun. 2047 Jun. 2017 44,395 74,605 112,882 Advance Receivables Backed Notes, Series 2015-VF1, Class B 1ML + 340 bps Jun. 2047 Jun. 2017 8,091 7,909 12,268 Advance Receivables Backed Notes, Series 2015-VF1, Class C 1ML + 400 bps Jun. 2047 Jun. 2017 3,594 3,406 5,951 Advance Receivables Backed Notes, Series 2015-VF1, Class D 1ML + 480 bps Jun. 2047 Jun. 2017 9,198 8,802 8,377 Total Ocwen Freddie Advance Funding (OFAF) (7) 65,278 94,722 139,478 $ 274,003 $ 1,280,997 $ 1,584,049 Weighted average interest rate 3.21 % 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 December 31, 2016 , none of the available borrowing capacity could be used based on the amount of eligible collateral that had been pledged. (3) 1ML was 0.77% and 0.43% at December 31, 2016 and 2015 , respectively. (4) On August 12, 2016, the supplemental indentures for the OMART facility variable funding notes were amended to reduce the borrowing capacity of each series from $200.0 million to $140.0 million or a total decrease in borrowing capacity of $180.0 million . There is a ceiling of 75 bps for 1ML 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-T3 Notes and the Series 2016-T1 and T2 Notes until the amortization date. If there is insufficient collateral to support the level of borrowing, the excess cash proceeds are not distributed to Ocwen but are held by the trustee, and interest expense continues to be based on the full amount of the term notes. On August 12, 2016, we issued the Series 2016-T1 and 2016-T2 Notes with a total borrowing capacity of $500.0 million . The proceeds from these notes were used to prepay at par the $500.0 million of Series 2015-T1 and 2015-T2 notes that were outstanding. (6) On December 15, 2016, we extended the term of this facility for an additional year and reduced the maximum borrowing capacity under the facility from $90.0 million to $75.0 million . There is a ceiling of 75 bps for 1ML in determining the interest rate for these variable rate notes. (7) On March 31, 2016, the combined borrowing capacity of the Series 2015-VF1 Notes was increased to $160.0 million . On June 10, 2016, the term of this facility was extended for an additional year. There is a ceiling of 125 bps for 1ML in determining the interest rate for these notes. Pursuant to our agreements with NRZ, NRZ has assumed the obligation to fund new servicing advances with respect to the MSRs underlying the Rights to MSRs, or NRZ/HLSS Transactions. We are dependent upon NRZ for funding 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 purchase pursuant to our agreements with them. As of December 31, 2016 , we were the servicer on Rights to MSRs sold to NRZ pertaining to approximately $118.7 billion in UPB and the associated outstanding servicing advances as of such date were approximately $4.1 billion . Should NRZ’s advance financing facilities fail to perform as envisaged or should NRZ otherwise be unable to meet its advance funding 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 December 31: Borrowings Collateral Interest Rate Maturity 2016 2015 Financing liability – MSRs pledged MSRs (1) (1) $ 477,707 $ 541,704 Secured Notes, Ocwen Asset Servicing Income Series, Series 2014-1 (2) MSRs (2) Feb. 2028 81,131 96,546 Financing liability – Advances pledged (3) Advances on loans (3) (3) 20,193 59,643 HMBS-related borrowings (4) Loans held for investment 1ML + 260 bps (4) 3,433,781 2,391,362 $ 4,012,812 $ 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. 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. This financing liability has no contractual maturity. (4) Represents amounts due to the holders of beneficial interests in Ginnie Mae guaranteed HMBS. The beneficial interests have no maturity dates, and the borrowings mature as the related loans are repaid. Other Secured Borrowings Other secured borrowings are comprised of the following at December 31: Borrowings Collateral Interest Rate Maturity Available Borrowing Capacity (1) 2016 2015 Senior secured term loan (SSTL): SSTL (2) (2) 1-Month Euro-dollar rate + 425 bps with a Eurodollar floor of 125 bps Feb. 2018 $ — $ — $ 398,454 SSTL (2) (2) 1-Month Euro-dollar rate + 500 bps with a Eurodollar floor of 100 bps (2) Dec. 2020 — 335,000 — — 335,000 398,454 Mortgage loan warehouse facilities: Repurchase agreement (3) Loans held for sale (LHFS) 1ML + 200 - 345 bps Sep. 2017 37,630 12,370 42,973 Master repurchase agreement (4) LHFS 1ML + 200 bps; 1ML floor of 0.0% Jan. 2017 (4) 26,457 173,543 156,226 Participation agreement (5) LHFS N/A Apr. 2017 (5) — 44,413 49,897 Participation agreement (5) LHFS N/A Apr. 2017 (5) — 48,326 73,049 Mortgage warehouse agreement (6) LHFS (reverse mortgages) 1ML + 275 bps; 1ML floor of 300 or 350 bps Aug. 2017 — 26,254 63,175 Master repurchase agreement (7) LHFS (reverse mortgages) 1ML + 275 bps; 1ML floor of 25 bps Jan. 2018 49,877 50,123 — 113,964 355,029 385,320 $ 113,964 690,029 783,774 Unamortized debt issuance costs - SSTL (7,612 ) (20,012 ) Discount - SSTL (3,874 ) (1,351 ) $ 678,543 $ 762,411 Weighted average interest rate 4.56 % 4.38 % (1) For our mortgage loan warehouse facilities, available borrowing capacity does not consider the amount of the facility that the lender has extended on an uncommitted basis. (2) On December 5, 2016, we entered into an Amended and Restated Senior Secured Term Loan Facility Agreement (the Amended and Restated Agreement). The Amended and Restated Agreement establishes a new SSTL with a borrowing capacity of $335.0 million and a maturity date of December 5, 2020 . We used the proceeds of the new SSTL to repay our obligations under the prior SSTL and to pay certain fees and expenses of the transaction. We may request increases to the loan amount of up to $100.0 million , with additional increases subject to certain limitations. We are required to make quarterly payments on the SSTL in an amount of $4.2 million commencing on March 31, 2017. The borrowings under the SSTL are secured by a first priority security interest in substantially all of the assets of Ocwen, OLS and the other guarantors thereunder, excluding among other things, 35% of the capital stock of foreign subsidiaries, securitization assets and equity interests of securitization entities, assets securing permitted funding indebtedness and non-recourse indebtedness, REO assets, servicing agreements where an acknowledgment from the GSE has not been obtained, as well as other customary carve-outs. 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 (1ML) ), plus a margin of 4.00% and subject to a base rate floor of 2.00% or (b) the one month Eurodollar rate , plus a margin of 5.00% and subject to a one month Eurodollar floor of 1.00% . To date we have elected option (b) to determine the interest rate. The amended and restated agreement includes covenants that are substantially similar to the prior senior secured term loan, including the requirement that Ocwen maintain a loan-to-value ratio at a 40% level as of the last date of any fiscal quarter throughout the term of the SSTL. (3) Fifty percent of the maximum borrowing amount of $100.0 million is available on a committed basis and fifty percent is available at the discretion of the lender. On September 29, 2016, we renewed this facility through September 28, 2017 with no change in interest rates or maximum borrowing capacity. We use this facility to fund the repurchase of 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. (4) Under this repurchase agreement, the lender provides financing on a committed basis for $200.0 million . On November 28, 2016, we extended the term of this agreement to January 31, 2017 with no change in rates or maximum borrowing capacity, although a LIBOR floor of 0.0% was added to the terms of the facility effective September 30, 2016. On January 31, 2017, the term of this agreement was further extended to February 28, 2017. (5) Under these participation agreements, the lender provides financing for a combined total of $250.0 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 26, 2016, the term of these agreements was extended to April 30, 2017. (6) Under this participation agreement, the lender provides financing for $110.0 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 August 17, 2016, the term of this agreement was extended to August 17, 2017. (7) We entered into this agreement on January 5, 2016. The lender provides financing on a committed basis for $100.0 million . On December 23, 2016, the term of this agreement was extended to January 2, 2018. The other terms remained unchanged. Senior Notes Senior notes, net are comprised of the following at December 31: 2016 2015 6.625% Senior unsecured notes $ 3,122 $ 350,000 8.375% Senior secured notes 346,878 — 350,000 $ 350,000 Unamortized debt issuance costs (3,211 ) (4,489 ) $ 346,789 $ 345,511 Senior Unsecured Notes On May 12, 2014, Ocwen completed the issuance and sale of $350.0 million aggregate principal amount of 6.625% Senior Unsecured Notes due 2019 (Senior Unsecured Notes) in a private offering. On December 5, 2016, holders of $346.9 million principal amount of the Senior Unsecured Notes exchanged their notes for 8.375% Senior Secured Second Lien Notes issued by OLS that mature in 2022 (Senior Secured Notes). Ocwen may redeem all or a part of the remaining Senior Unsecured Notes, upon not less than 30 nor more than 60 days’ notice, at the redemption prices (expressed as percentages of principal amount) specified in the Indenture plus accrued and unpaid interest and additional interest, if any. The redemption prices during the twelve-month periods beginning on May 15 th of each year are as follows: Year Redemption Price 2016 104.969% 2017 103.313% 2018 and thereafter 100.000% In connection with our issuance of the Senior Unsecured Notes, we incurred certain costs that we capitalized and are amortizing over the period from the date of issuance to May 15, 2019 . The unamortized balance of these issuance costs was $0.03 million and $4.5 million at December 31, 2016 and 2015 , respectively. Senior Secured Notes On December 5, 2016, OLS completed a debt-for-debt exchange offer whereby OLS issued $346.9 million aggregate principal amount of Senior Secured Notes in exchange for $346.9 million aggregate principal amount (or 99.1% ) of Ocwen’s Senior Unsecured Notes. The Senior Secured Notes will mature on November 15, 2022. Interest will be payable semiannually on each May 15 and November 15, commencing on May 15, 2017. The Senior Secured Notes are guaranteed by Ocwen and OMS, Homeward Residential Holdings, Inc., Homeward and ACS (the Guarantors). The Senior Secured Notes are secured by second priority liens on the assets and properties of OLS and the Guarantors that secure the first priority obligations under the SSTL, excluding certain MSRs. At any time, OLS may redeem all or a part of the Senior Secured Notes, upon not less than 30 nor more than 60 days’ notice at a specified redemption price, plus accrued and unpaid interest to the date of redemption. Prior to November 15, 2018, the Senior Secured Notes may be redeemed at a redemption price equal to 100.0% of the principal amount of the Senior Secured Notes redeemed, plus the applicable premium (as defined in the Indenture). On or after November 15, 2018, OLS may redeem all or a part of the Senior Secured Notes at the redemption prices (expressed as percentages of principal amount) specified in the Indenture. The redemption prices during the twelve-month periods beginning on November 15 th of each year are as follows: Year Redemption Price 2018 106.281% 2019 104.188% 2020 102.094% 2021 and thereafter 100.000% At any time, on or prior to November 15, 2018, OLS may, at its option, use the net cash proceeds of one or more equity offerings (as defined in the Indenture) to redeem up to 35.0% of the principal amount of all Senior Secured Notes issued at a redemption price equal to 108.375% of the principal amount of the Senior Secured Notes redeemed plus accrued and unpaid interest to the date of redemption, provided that: (i) at least 65.0% of the principal amount of all Senior Secured Notes issued under the Indenture (including any additional Senior Secured Notes) remains outstanding immediately after any such redemption; and (ii) OLS makes such redemption not more than 120 days after the consummation of any such Equity Offering. Upon the occurrence of a change of control (as defined in the Indenture), OLS is required to make an offer to the holders of the Senior Secured Notes to repurchase all or a portion of each holder’s Senior Secured Notes at a purchase price equal to 101.0% of the principal amount of the Senior Secured Notes purchased plus accrued and unpaid interest to the date of purchase. The Indenture contains certain covenants, including, but not limited to, limitations and restrictions on Ocwen’s ability and the ability of its restricted subsidiaries (including OLS) to (i) incur additional debt or issue preferred stock; (ii) pay dividends or make distributions on or purchase equity interests of Ocwen (iii) repurchase or redeem subordinated debt prior to maturity; (iv) make investments or other restricted payments; (v) create liens on assets to secure debt of OLS or any Guarantor; (vi) sell or transfer assets; (vii) enter into transactions with affiliates; and (viii) enter into mergers, consolidations, or sales of all or substantially all of the assets of Ocwen and its restricted subsidiaries, taken as a whole. As of the date of the Indenture, all of Ocwen’s subsidiaries are restricted subsidiaries. The restrictive covenants set forth in the Indenture are subject to important exceptions and qualifications. Many of the restrictive covenants will be suspended if (i) the Senior Secured Notes achieve an investment grade rating from both Moody’s and Standard & Poor’s Ratings Services (S&P) and (ii) no default or event of default has occurred and is continuing under the Indenture. Covenants that are suspended as a result of achieving these ratings will again apply if one or both of Moody’s and S&P withdraws its investment grade rating or downgrades the rating assigned to the Senior Secured Notes below an investment grade rating. In connection with our issuance of the Senior Secured Notes, we incurred certain costs that we capitalized and are amortizing over the period from the date of issuance to November 15, 2022 . The unamortized balance of these issuance costs was $3.2 million at December 31, 2016 . 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 or junior capital, 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 of December 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 three repurchase agreements and $575.0 million at Ocwen under a master repurchase agreement. As a result of the covenants to which we are subject, we may be limited in the manner in which we conduct our business and may be limited in our ability to engage in favorable business activities or raise additional capital to finance future operations or satisfy future liquidity needs. In addition, breaches or events that may result in a default under our debt agreements include, among other things, noncompliance with our covenants, nonpayment of principal or interest, material misrepresentations, the occurrence of a material adverse change, insolvency, bankruptcy, certain material judgments and changes of control. Covenants and default provisions of this type are commonly found in debt agreements such as ours. Certain of these covenants and default provisions are open to subjective interpretation and, if our interpretation were contested by a lender, a court may ultimately be required to determine compliance or lack thereof. In addition, our debt agreements generally include cross default provisions such that a default under one agreement could trigger defaults under other agreements. If we fail to comply with our debt agreements and are unable to avoid, remedy or secure a waiver of any resulting default, we may be subject to adverse action by our lenders, including termination of further funding, acceleration of outstanding obligations, enforcement of liens against the assets securing or otherwise supporting our obligations and other legal remedies. Our lenders can waive their contractual rights in the event of a default. We believe that we are in compliance with all of the qualitative and quantitative covenants in our debt agreements as of the date of these financial statements. Maturities of Borrowings and Management’s Plans to Address Maturing Borrowings Aggregate expected maturities of our borrowings at December 31, 2016 are included in the table below. Certain of our borrowings mature within one year of the date of issuance of these financial statements. Based on management’s evaluation, we expect to renew, replace or extend all such borrowings to the extent necessary to finance our business on or prior to their respective maturities consistent with our historical experience. Expected Maturity Date (1) (2) (3) 2017 2018 2019 2020 2021 There- after Total Fair Match funded liabilities $ 780,997 $ 265,000 $ 235,000 $ — $ — $ — $ 1,280,997 $ 1,275,059 Other secured borrowings 321,656 66,873 16,750 284,750 — — 690,029 682,703 Senior notes — — 3,122 — — 346,878 350,000 355,303 $ 1,102,653 $ 331,873 $ 254,872 $ 284,750 $ — $ 346,878 $ 2,321,026 $ 2,313,065 (1) Amounts are exclusive of any related discount or unamortized debt issuance costs. (2) For match funded liabilities, the expected maturity date is the date on which the revolving period ends for each advance financing facility note and repayment of the outstanding balance must begin if the note is not renewed or extended. (3) Excludes financing liabilities, which we recognized in connection with asset sales transactions that we accounted for as financings. Financing liabilities include $477.7 million recorded in connection with sales of Rights to MSRs and $3.4 billion recorded in connection with the securitizations of HMBS. The MSR-related financing liabilities have no contractual maturity and are amortized over the life of the transferred Rights to MSRs. The HMBS-related financing liabilities have no contractual maturity and are amortized as the related loans are repaid. |
Other Liabilities
Other Liabilities | 12 Months Ended |
Dec. 31, 2016 | |
Other Liabilities Disclosure [Abstract] | |
Other Liabilities | Note 14 — Other Liabilities Other liabilities were comprised of the following at December 31: 2016 2015 Contingent loan repurchase liability (1) $ 246,081 $ 346,984 Accrued legal fees and settlements 93,797 74,922 Due to NRZ (2) 83,248 18,538 Other accrued expenses 80,021 113,934 Servicing-related obligations 35,324 44,385 Liability for indemnification obligations 27,546 36,615 Liability for uncertain tax positions 23,216 44,751 Checks held for escheat 16,890 14,301 Deferred income 4,481 4,341 Accrued interest payable 3,698 3,667 Derivatives, at fair value 1,550 — Other 65,387 42,006 $ 681,239 $ 744,444 (1) In connection with the Ginnie Mae EBO program, we have re-recognized certain loans on our consolidated balance sheets and established a corresponding repurchase liability regardless of our intention to repurchase the loan. (2) Balances represent advance collections and servicing fees to be remitted to NRZ. |
Equity
Equity | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Equity | Note 15 — Equity Common Stock On September 23, 2013, Ocwen paid $157.9 million to repurchase from the holders of our convertible preferred stock all 3,145,640 shares of Ocwen common stock that were issued upon their election to convert 100,000 of the preferred shares into shares of common stock. On July 14, 2014, Ocwen paid $72.3 million to repurchase all 1,950,296 shares of common stock that were issued upon conversion of the remaining 62,000 preferred shares. On October 31, 2013 , we announced that Ocwen’s Board of Directors had authorized a share repurchase program for an aggregate of up to $500.0 million of Ocwen’s issued and outstanding shares of common stock. This share repurchase program expired on July 31, 2016. During 2016 , we completed the repurchase of 991,985 shares of common stock in the open market under this program for a total purchase price of $5.9 million . From inception of this program through expiration, we completed the repurchase of 13,163,793 shares for an aggregate purchase price of $380.3 million . Preferred Stock On December 27, 2012, Ocwen issued 162,000 shares of Series A Perpetual Convertible Preferred Stock, having a par value of $0.01 per share as part of the consideration paid to acquire Homeward. Holders of the preferred stock were entitled to receive mandatory and cumulative dividends payable quarterly at the rate per share equal to the greater of (i) 3.75% per annum multiplied by $1,000 per share and (ii) in the event Ocwen pays a regular quarterly dividend on its common stock in such quarter, the rate per share payable in respect of such quarterly dividend on an as-converted basis. Each preferred share, together with any accrued and unpaid dividends, was convertible to common stock at the option of the holder at a conversion price equal to $31.79 . On September 23, 2013, holders elected to convert 100,000 of the preferred shares into 3,145,640 shares of common stock. On July 14, 2014, holders elected to convert the remaining 62,000 shares into 1,950,296 shares of common stock. We evaluated the preferred stock and determined that, prior to conversion, it should be accounted for as “mezzanine” equity in our consolidated balance sheets rather than permanent equity as part of Stockholders’ equity because change of control provisions could result in a redemption not solely under Ocwen’s control. We also evaluated the conversion option of the preferred stock and determined that it represented a Beneficial Conversion Feature (BCF). Therefore, we determined the intrinsic value of the BCF and accounted for it as a discount on the preferred stock with an offsetting increase in additional paid in capital. We determined the period over which the discount would be amortized and reported the amortization as a deemed dividend in our consolidated statements of operations. Accumulated Other Comprehensive Loss The components of accumulated other comprehensive loss (AOCL), net of income taxes, were as follows at December 31: 2016 2015 Unrealized losses on cash flow hedges $ 1,329 $ 1,641 Other 121 122 $ 1,450 $ 1,763 |
Derivative Financial Instrument
Derivative Financial Instruments and Hedging Activities | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments and Hedging Activities | Note 16 — Derivative Financial Instruments and Hedging Activities Because many of our current derivative agreements are not exchange-traded, we are exposed to credit loss in the event of nonperformance by the counterparty to the agreements. We manage counterparty credit risk by entering into financial instrument transactions through national exchanges, primary dealers or approved counterparties and the use of mutual margining agreements whenever possible to limit potential exposure. We regularly evaluate the financial position and creditworthiness of our counterparties. The notional amount of our contracts does not represent our exposure to credit loss. The following table summarizes the changes in the notional balances of our holdings of derivatives during the year ended December 31, 2016 : IRLCs Forward MBS Trades Interest Rate Caps Beginning notional balance $ 278,317 $ 632,720 $ 2,110,000 Additions 6,711,653 5,529,405 703,333 Amortization — — (793,333 ) Maturities (5,236,398 ) (2,820,929 ) — Terminations (1,393,122 ) (2,732,019 ) (1,065,000 ) Ending notional balance $ 360,450 $ 609,177 $ 955,000 Fair value of derivative assets (liabilities) at: December 31, 2016 $ 6,507 $ (614 ) $ 1,836 December 31, 2015 $ 6,080 $ 295 $ 2,042 Maturity Jan. 2017 - May 2017 Mar. 2017 Oct. 2017 - Dec. 2018 As loans are originated and sold or as loan commitments expire, our forward MBS trade positions mature and are replaced by new positions based upon new loan originations and commitments and expected time to sell. Foreign Currency Exchange Rate Risk Management Our operations in India and the Philippines also expose us to foreign currency exchange rate risk, but we currently consider this risk to be insignificant. Interest Rate Risk 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 Mortgage loans held for sale that we carry at fair value are subject to interest rate and price risk from the loan funding date until the date the loan is sold into the secondary market. Generally, the fair value of a loan will decline in value when interest rates increase and will rise in value when interest rates decrease. To mitigate this risk, we enter into forward MBS trades to provide an economic hedge against those changes in fair value on mortgage loans held for sale. Forward MBS trades are primarily used to fix the forward sales price that will be realized upon the sale of mortgage loans into the secondary market. Interest Rate Lock Commitments A loan commitment binds us (subject to the loan approval process) to fund the loan at the specified rate, regardless of whether interest rates have changed between the commitment date and the loan funding date. As such, outstanding IRLCs are subject to interest rate risk and related price risk during the period from the date of the commitment through the loan funding date or expiration date. The borrower is not obligated to obtain the loan, thus we are subject to fallout risk related to IRLCs, which is realized if approved borrowers choose not to close on the loans within the terms of the IRLCs. Our interest rate exposure on these derivative loan commitments is hedged with freestanding derivatives such as forward contracts. We enter into forward contracts with respect to both fixed and variable rate loan commitments. The following summarizes our open derivative positions at December 31, 2016 and the gains (losses) on all derivatives used in each of the identified hedging programs for the year then ended. None of the derivatives was designated as a hedge for accounting purposes at December 31, 2016 : Purpose Expiration Date Notional Amount Fair Value (1) Gains (Losses) Consolidated Statement of Operations Caption Interest rate risk of borrowings Interest rate caps Oct. 2017 - Dec. 2018 $ 955,000 $ 1,836 $ (1,387 ) Other, net Interest rate risk of mortgage loans held for sale and of IRLCs Forward MBS trades Mar. 2017 609,177 (614 ) (6,592 ) Gain on loans held for sale, net IRLCs Jan. 2017 - May 2017 360,450 6,507 (55 ) Gain on loans held for sale, net Total derivatives $ 7,729 $ (8,034 ) (1) Derivatives are reported at fair value in Other assets or in Other liabilities on our consolidated balance sheets. Included in AOCL at December 31, 2016 and 2015 , respectively, were $1.4 million and $1.7 million of deferred unrealized losses, before taxes of $0.1 million and $0.1 million , respectively, on interest rate swaps that we had designated as cash flow hedges. Changes in AOCL during the years ended December 31 were as follows: 2016 2015 2014 Beginning balance $ 1,763 $ 8,413 $ 10,151 Losses on terminated cash flow hedging relationships amortized to earnings (337 ) (7,042 ) (1,982 ) Decrease in deferred taxes on accumulated losses on cash flow hedges 24 392 248 Decrease in accumulated losses on cash flow hedges, net of taxes (313 ) (6,650 ) (1,734 ) Other, net of taxes — — (4 ) Ending balance $ 1,450 $ 1,763 $ 8,413 As of December 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 2017 . 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 years ended December 31: 2016 2015 2014 Losses on economic hedges (1,387 ) (1,377 ) (661 ) Write-off of losses in AOCL for a discontinued hedge relationship (1) (337 ) (7,042 ) (1,982 ) $ (1,724 ) $ (8,419 ) $ (2,643 ) (1) Includes the accelerated write-off in 2015 of deferred losses on a swap that had been designated for accounting purposes as a hedge of the purchase price of an MSR acquisition, when we sold a portion of the related MSRs. |
Interest Income
Interest Income | 12 Months Ended |
Dec. 31, 2016 | |
Other Income and Expenses [Abstract] | |
Interest Income | Note 17 — Interest Income The following table presents the components of interest income for the years ended December 31: 2016 2015 2014 Loans held for sale $ 15,774 $ 16,167 $ 20,299 Automotive dealer financing notes 1,534 39 — Interest earning cash deposits and other 1,775 2,114 2,692 $ 19,083 $ 18,320 $ 22,991 Interest income that we expect to be collected on Loans Held for Investment - Reverse Mortgages, or HECMs, is included with net fair value gains in Other revenues. |
Interest Expense
Interest Expense | 12 Months Ended |
Dec. 31, 2016 | |
Other Income and Expenses [Abstract] | |
Interest Expense | Note 18 — Interest Expense The following table presents the components of interest expense for the years ended December 31: 2016 2015 2014 Financing liabilities (1) (2) $ 248,834 $ 292,306 $ 371,852 Match funded liabilities 66,879 65,248 61,576 Other secured borrowings 60,469 91,391 82,837 Senior notes 30,012 26,259 15,595 Other 6,389 7,169 9,897 $ 412,583 $ 482,373 $ 541,757 (1) Includes interest expense related to financing liabilities recorded in connection with the NRZ/HLSS Transactions as indicated in the table below: 2016 2015 2014 Servicing fees collected on behalf of NRZ/HLSS $ 633,545 $ 694,833 $ 736,122 Less: Subservicing fee retained by Ocwen 337,727 355,527 358,053 Net servicing fees remitted to NRZ/HLSS 295,818 339,306 378,069 Less: Reduction in financing liability 61,418 70,513 17,374 Interest expense on NRZ/HLSS financing liability $ 234,400 $ 268,793 $ 360,695 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 NRZ/HLSS. (2) Includes $10.5 million and $14.3 million of fees incurred in 2016 and 2015, respectively, in connection with our agreement to compensate NRZ/HLSS through June 2016 for certain increased costs associated with its servicing advance financing facilities that were the direct result of a previous downgrade of our S&P servicer rating. Interest expense that we expect to be paid on the HMBS-related borrowings is included with net fair value gains in Other revenues. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 19 — Income Taxes For income tax purposes, the components of loss before taxes were as follows for the years ended December 31: 2016 2015 2014 Domestic $ (130,920 ) $ (62,903 ) $ (401,741 ) Foreign (75,441 ) (66,958 ) (41,418 ) $ (206,361 ) $ (129,861 ) $ (443,159 ) The components of income tax expense (benefit) were as follows for the years ended December 31: 2016 2015 2014 Current: Federal $ (8,025 ) $ 46,680 $ (20,824 ) State 460 1,079 (403 ) Foreign 5,099 161 9,195 (2,466 ) 47,920 (12,032 ) Deferred: Federal (22,054 ) (27,173 ) 41,986 State 4,701 (3,719 ) (997 ) Foreign (2,806 ) 2,754 (6,162 ) Provision for valuation allowance on deferred tax assets 15,639 97,069 3,601 (4,520 ) 68,931 38,428 Total $ (6,986 ) $ 116,851 $ 26,396 Income tax expense differs from the amounts computed by applying the U.S. Federal corporate income tax rate of 35% as follows for the years ended December 31: 2016 2015 2014 Expected income tax expense (benefit) at statutory rate $ (72,225 ) $ (45,451 ) $ (155,106 ) Differences between expected and actual income tax expense: Impairment of goodwill — — 92,034 State tax, after Federal tax benefit 250 (2,867 ) (1,084 ) Provision for liability for uncertain tax positions 2,236 18,205 47 Provision for liability for intra-entity transactions 3,357 4,700 6,037 Non-deductible regulatory settlements — 700 53,375 Other permanent differences 515 (463 ) (254 ) Foreign tax differential 42,463 41,695 27,799 Provision for valuation allowance on deferred tax assets (1) 15,639 97,069 3,601 Other 779 3,263 (53 ) Actual income tax expense (benefit) $ (6,986 ) $ 116,851 $ 26,396 (1) The provision for valuation allowance in 2016 and 2015 primarily relates to the recording of the valuation allowance on both the U.S. and USVI net deferred tax assets as of December 31, 2016 and 2015. Also included in the provision for valuation allowance in 2015 is the reversal of a portion of the valuation allowance previously recorded on taxable losses earned by OMS which were taxable in the U.S. as effectively connected income (ECI), which is equal to the positive taxable income that is expected to be generated for ECI purposes for the year ended December 31, 2015. Ocwen is a global company with operations in the USVI, India and the Philippines, among other jurisdictions. In the effective tax rate reconciliation, we first calculate income tax expense attributable to worldwide continuing operations at the U.S. statutory tax rate of 35%. The foreign tax rate differential therefore represents the difference in tax expense between jurisdictional income taxed at the U.S. statutory rate of 35% and each respective jurisdictional statutory rate. As the U.S. tax rate is among the highest global tax rates and a majority of our income is subject to tax in the USVI at a significantly lower tax rate, the foreign tax rate differential component of our effective tax rate reconciliation is often the most significant adjusting item to our global rate. Net deferred tax assets were comprised of the following at December 31: 2016 2015 Deferred tax assets: Net operating loss carryforward $ 67,657 $ 24,511 Mortgage servicing rights amortization 11,592 15,697 Partnership losses 8,976 10,137 Intangible asset amortization 8,223 10,293 Accrued incentive compensation 8,017 10,107 Accrued legal settlements 9,178 10,519 Stock-based compensation expense 5,659 4,834 Accrued other liabilities 5,543 5,641 Foreign deferred assets 5,219 3,647 Foreign tax credit 4,262 — Tax residuals and deferred income on tax residuals 4,037 4,052 Bad debt and allowance for loan losses 3,268 6,227 Reserve for servicing exposure 1,900 3,353 Delinquent servicing fees 1,647 2,360 Capital losses 1,450 1,710 Other 1,872 7,056 148,500 120,144 Deferred tax liabilities: Foreign undistributed earnings 13,619 5,421 Other 76 77 13,695 5,498 134,805 114,646 Valuation allowance (132,073 ) (116,434 ) Deferred tax assets (liabilities), net $ 2,732 $ (1,788 ) We conduct periodic evaluations of positive and negative evidence to determine whether it is more likely than not that the deferred tax asset can be realized in future periods. In these evaluations, we gave more significant weight to objective evidence, such as our actual financial condition and historical results of operations, as compared to subjective evidence, such as projections of future taxable income or losses. We are diversifying our strategic focus due to both regulatory and market-based factors affecting the Servicing business, and we believe our residential lending business and other new business lines will be our primary driver of growth for the future. As a result, we are seeking to transform Ocwen over time by reinvesting cash flows generated by the Servicing business to grow not only our residential mortgage lending business but also to grow other new business lines, which we believe can diversify our income profile and assist us in returning Ocwen to profitability. Both the U.S. and USVI jurisdictions are in a three-year cumulative loss position as of December 31, 2016 due to poor operating results in both jurisdictions in addition to the significant goodwill impairment and NY DFS settlement in 2014 in the US jurisdiction and significant monitoring and regulatory compliance costs in the USVI jurisdiction. Other factors considered in these evaluations are estimates of future taxable income, future reversals of temporary differences, taxable income in prior carryback years, tax character and the impact of tax planning strategies that may be implemented, if warranted. As a result of these evaluations, we recorded a valuation allowance of $95.5 million and $84.5 million on our U.S. net deferred tax assets at December 31, 2016 and 2015 , respectively, and a valuation allowance of $36.2 million and $31.6 million on our USVI net deferred tax assets at December 31, 2016 and 2015 , respectively. These U.S. and USVI jurisdictional deferred tax assets are not considered to be more likely than not realizable based on all available positive and negative evidence. We intend to continue maintaining a full valuation allowance on our deferred tax assets in both the U.S. and USVI until there is sufficient evidence to support the reversal of all or some portion of these allowances. At December 31, 2016 , we had U.S. NOL carryforwards and USVI NOL carryforwards of $192.4 million and $361.2 million . These carryforwards will expire beginning 2019 through 2035. We believe that it is more likely than not that the benefit from certain U.S. NOL carryforwards will not be realized. In recognition of this risk, we have provided a total valuation allowance of $67.3 million on the deferred tax assets relating to these U.S. NOL carryforwards. If our assumptions change and we determine we will be able to realize these NOLs, the tax benefits relating to any reversal of the valuation allowance on deferred tax assets as of December 31, 2016 will be accounted for as a reduction of income tax expense. Additionally, it is our expectation that $361.2 million of USVI NOLs will be carried back to offset prior period tax due in the USVI and we have, therefore, reflected the tax-effect of this attribute as a component of income taxes receivable. We also have USVI capital loss carryforwards of $23.0 million at December 31, 2016 against which a valuation allowance has been recorded. Our major jurisdiction tax years that remain subject to examination are our U.S. federal tax return for the years ended December 31, 2012 through the present, our USVI corporate tax return for the years ended December 31, 2012 through the present and our India corporate tax returns for the years ended March 31, 2009 through the present. Our U.S. federal tax return for the year ended December 31, 2012 is currently under examination. A reconciliation of the beginning and ending amount of the total liability for uncertain tax positions is as follows for the years ended December 31: 2016 2015 2014 Beginning balance $ 32,548 $ 22,523 $ 27,273 Additions for tax positions of prior years — 13,162 1,392 Reductions for tax positions of prior years — (2,741 ) (6,010 ) Reductions for settlements (14,420 ) — — Lapses in statute of limitations (1,134 ) (396 ) (132 ) Ending balance $ 16,994 $ 32,548 $ 22,523 We recognized total interest and penalties of $(1.0) million , $6.3 million and $2.3 million in 2016 , 2015 and 2014 , respectively. At December 31, 2016 and 2015 , accruals for interest and penalties were $6.2 million and $12.2 million , respectively. As of December 31, 2016 and 2015 , we had a liability for uncertain tax positions of $17.0 million and $32.5 million , respectively, all of which if recognized would affect the effective tax rate. It is reasonably possible that there could be a change in the amount of our unrecognized tax benefits within the next 12 months due to activities of the Internal Revenue Service or other taxing authorities, including proposed assessments of additional tax, possible settlement of audit issues, or the expiration of applicable statutes of limitations. We believe that it is reasonably possible that a decrease of up to $17.0 million in unrecognized tax benefits may be necessary within the next 12 months. As of December 31, 2016 , we have recognized a deferred tax liability of $13.6 million for India and Philippines subsidiary undistributed earnings of $29.7 million . With the exception of the India and Philippines subsidiary earnings, we consider the remainder of our foreign subsidiary undistributed earnings to be indefinitely invested outside the U.S. based on our specific plans for reinvestment. As of December 31, 2016 , our foreign subsidiaries have approximately $157.0 million of undistributed earnings and $200.2 million of cash and short-term investments. Should we decide to repatriate the foreign earnings, we would need to adjust our income tax provision in the period we determined that the earnings will no longer be indefinitely reinvested. Determination of the amount of unrecognized deferred tax liability is not practicable. OMS is headquartered in Frederiksted, St. Croix, USVI and is located in a federally recognized economic development zone where qualified entities are eligible for certain benefits. We refer to these benefits as “EDC benefits” as they are granted by the USVI Economic Development Commission. We were approved as a Category IIA service business, and are therefore entitled to receive benefits that may have a favorable impact on our effective tax rate. These benefits, among others, enable us to avail ourselves of a credit of 90% of income taxes on certain qualified income related to our servicing business. The exemption was granted as of October 1, 2012 and is available for a period of 30 years until expiration on September 30, 2042. The impact of these EDC benefits decreased our current foreign tax benefit by $62.7 million and $68.2 million related to 2016 and 2015 USVI losses, respectively, and decreased our foreign tax expense by $61.2 million related to 2014 USVI income. The benefit (detriment) of these EDC benefits on diluted earnings per share was $(0.51) , $(0.54) and $0.47 for 2016 , 2015 and 2014 , respectively. |
Basic and Diluted Earnings (Los
Basic and Diluted Earnings (Loss) per Share | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Earnings (Loss) per Share | Note 20 — Basic and Diluted Earnings (Loss) per Share Basic earnings or loss per share excludes common stock equivalents and is calculated by dividing net income or net loss attributable to Ocwen common stockholders by the weighted average number of common shares outstanding during the year. We calculate diluted earnings per share by dividing net income attributable to Ocwen, as adjusted to add back any preferred stock dividends, by the weighted average number of common shares outstanding including the potential dilutive common shares related to outstanding stock options, restricted stock awards and preferred stock. The following is a reconciliation of the calculation of basic loss per share to diluted loss per share for the years ended December 31: 2016 2015 2014 Basic loss per share: Net loss attributable to Ocwen common stockholders $ (199,762 ) $ (247,017 ) $ (472,602 ) Weighted average shares of common stock 123,990,700 125,315,899 131,362,284 Basic loss per share $ (1.61 ) $ (1.97 ) $ (3.60 ) Diluted loss per share (1): Net loss attributable to Ocwen common stockholders $ (199,762 ) $ (247,017 ) $ (472,602 ) Preferred stock dividends (1) (2) — — — Adjusted net loss attributable to Ocwen $ (199,762 ) $ (247,017 ) $ (472,602 ) Weighted average shares of common stock 123,990,700 125,315,899 131,362,284 Effect of dilutive elements (1): Preferred stock (1) (2) — — — Stock options — — — Common stock awards — — — Dilutive weighted average shares of common stock 123,990,700 125,315,899 131,362,284 Diluted loss per share $ (1.61 ) $ (1.97 ) $ (3.60 ) Stock options and common stock awards excluded from the computation of diluted earnings per share: Anti-dilutive (3) 7,176,089 2,038,588 314,688 Market-based (4) 795,456 924,438 295,000 (1) For 2016, 2015 and 2014, we have excluded the effect of preferred stock, stock options and common stock awards from the computation of diluted earnings per share because of the anti-dilutive effect of our reported net loss. (2) Prior to the conversion of our remaining preferred stock into common stock in July 2014, we computed the effect on diluted earnings per share using the if-converted method. Under this method, we assumed the conversion of the preferred stock into shares of common stock unless the effect was anti-dilutive. (3) These stock options were anti-dilutive because their exercise price was greater than the average market price of our stock. (4) Shares that are issuable upon the achievement of certain performance criteria related to Ocwen’s stock price and an annualized rate of return to investors. |
Employee Compensation and Benef
Employee Compensation and Benefit Plans | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Employee Compensation and Benefit Plans | Note 21 — Employee Compensation and Benefit Plans We maintain a defined contribution plan to provide post-retirement benefits to our eligible employees. We also maintain additional compensation plans for certain employees. We designed these plans to facilitate a pay-for-performance culture, further align the interests of our officers and key employees with the interests of our shareholders and assist in attracting and retaining employees vital to our long-term success. These plans are summarized below. Retirement Plan We maintain defined contribution plans for employees in the U.S (401(k) plan) and India (Provident Fund). Generally, for the 401(k) plan, we match 50% of each employee’s contributions, limited to 2% of the employee’s compensation. For the Provident Fund, b oth th e e mpl oyee and th e employer are required to make minimum con tributi ons to th e fund at a predetermined rat e (currently 12% ) applied to a portion of the employee 's sala r y . Employers are not required to make contributions beyond this minimum. Our contributions to these plans were $5.0 million , $5.4 million and $5.8 million for the years ended December 31, 2016 , 2015 and 2014 , respectively. Annual Incentive Plan The Ocwen Financial Corporation Amended 1998 Annual Incentive Plan and the 2007 Equity Incentive Plan (the 2007 Equity Plan) are our primary incentive compensation plans for executives and other eligible employees. Under the terms of these plans, participants can earn cash and equity-based awards as determined by the Compensation Committee of the Board of Directors (the Committee). The awards are based on objective and subjective performance criteria established by the Committee. The Committee may at its discretion adjust performance measurements to reflect significant unforeseen events. We recognized $25.5 million , $30.2 million and $13.5 million of compensation expense during 2016 , 2015 and 2014 , respectively, related to annual incentive compensation awarded in cash. The 2007 Equity Plan authorizes the grant of stock options, restricted stock or other equity-based awards to employees. At December 31, 2016 , there were 5,097,874 shares of common stock remaining available for future issuance under the 2007 Equity Plan. Beginning in 2008, Ocwen granted equity-based awards to certain members of senior management that included stock options, a portion of which included only a service condition and a portion of which included only a market condition. Beginning in 2015, Ocwen began granting equity awards to certain members of senior management that included stock options with only a service condition, stock units with only a service condition and stock units with both a service condition and a market condition. These awards had the following characteristics in common: Type of Award Percent of Total Equity Award Vesting Period 2008 - 2014 Awards: Options: Service Condition: Time-based 25 % Ratably over four years (25% on each of the four anniversaries of the grant date) Market Condition: Market performance-based 50 Over three years beginning with 25% vesting on the date that the stock price has at least doubled over the exercise price and the compounded annual gain over the exercise price is at least 20% and then ratably over three years (25% on each of the next three anniversaries of the achievement of the market condition) Extraordinary market performance-based 25 Over three years beginning with 25% vesting on the date that the stock price has at least tripled over the exercise price and the compounded annual gain over the exercise price is at least 25% and then ratably over three years (25% on each of the next three anniversaries of the achievement of the market condition) Total award 100 % Type of Award Percent of Total Equity Award Vesting Period 2015 Awards: Options: Service Condition: Time-based 35 % Ratably over four years (25% vesting on each of the first four anniversaries of the grant date.) Stock Units: Service Condition: Time-based 16 Over four years with 1/3 vesting on each of the 2 nd , 3 rd and 4 th anniversaries of the grant date. Market Condition: Time-based vesting schedule and Market performance-based vesting date 49 Vest over four years with 25% vesting on each of the four anniversaries of the grant date. However, none are considered vested until the first trading day (if any) on or before the 4 th anniversary of the award date on which the average stock price equals or exceeds the price set in the individual award agreement, at which time all units that have met their time-based vesting schedule vest immediately with the remainder vesting in accordance with their time-based schedule. Total Award 100 % 2016 Awards: Stock Units: Service Condition: Time-based 47 % Over four years with 25% vesting on each of the first four anniversaries of the grant date. Market Condition: Time-based vesting schedule and Market performance-based vesting date 53 Vest over four years with 25% vesting on each of the four anniversaries of the grant date. However, none are considered vested until the first trading day (if any) on or before the 4 th anniversary of the award date on which the average stock price equals or exceeds the price set in the individual award agreement, at which time all units that have met their time-based vesting schedule vest immediately with the remainder vesting in accordance with their time-based schedule. Total Award 100 % The contractual term of all options granted is ten years from the grant date, except where employment terminates by reason of death, disability or retirement, in which case, the agreement may provide for an earlier termination of the options. The terms of the market-based options do not include a retirement provision. Stock units have a four-year term. If the market conditions are not met by the fourth anniversary of the award of stock units, those units terminate on that date. Stock option activity for the years ended December 31 was as follows: 2016 2015 2014 Number of Options Weighted Average Exercise Price Number of Options Weighted Average Exercise Price Number of Options Weighted Average Exercise Price Outstanding at beginning of year 7,151,225 $ 10.10 6,828,861 $ 9.99 8,182,611 $ 10.62 Granted (1)(2) — $ — 968,041 $ 17.48 330,000 $ 34.48 Exercised (3)(4) (69,805 ) $ 5.81 (145,677 ) $ 5.24 (683,750 ) $ 8.30 Forfeited/Canceled (1)(5) (154,786 ) $ 21.80 (500,000 ) $ 24.38 (1,000,000 ) $ 24.38 Outstanding at end of year (6)(7) 6,926,634 $ 9.88 7,151,225 $ 10.10 6,828,861 $ 9.99 Exercisable at end of year (6)(7)(8) 6,344,958 $ 8.71 6,187,559 $ 8.25 5,750,739 $ 6.84 (1) Upon Mr. Erbey’s resignation as an officer and director of Ocwen on January 16, 2015, 500,000 of his unvested options would have been forfeited immediately. However, Ocwen agreed to modify the awards to allow them to vest. This had an effect equivalent to the canceling of the original awards and the granting of new awards effective on the date of resignation. (2) The weighted average grant date fair value of stock options granted was $3.28 and $12.94 during 2015 and 2014 , respectively. (3) The total intrinsic value of stock options exercised, which is defined as the amount by which the market value of the stock on the date of exercise exceeds the exercise price, was $0.1 million , $0.3 million and $13.7 million for 2016 , 2015 and 2014 , respectively. (4) In connection with the exercise of stock options during 2015 and 2014 , employees delivered 56,013 and 249,696 shares, respectively, of common stock to Ocwen as payment for the exercise price and the income tax withholdings on the compensation. As a result, a total of 89,664 and 434,054 net shares of stock were issued in 2015 and 2014 , respectively, related to the exercise of stock options. (5) Stock options granted in 2012 included 2,000,000 options granted to Ocwen’s former Executive Chairman, William C. Erbey at an exercise price of $24.38 equal to the closing price of the stock on the day of the Committee’s approval. On April 22, 2014, Mr. Erbey surrendered 1,000,000 of these options. We recognized the remaining $5.7 million of previously unrecognized compensation expense associated with these options as of the date of surrender. (6) Excluding 280,000 market-based options that have not met their performance criteria, the net aggregate intrinsic value of stock options outstanding and stock options exercisable at December 31, 2016 was $0 and $0 , respectively. A total of 4,662,814 market-based options were outstanding at December 31, 2016 , of which 4,382,814 were exercisable. (7) At December 31, 2016 , the weighted average remaining contractual term of options outstanding and options exercisable was 2.86 years and 2.42 years , respectively. (8) The total fair value of the stock options that vested and became exercisable during 2016 , 2015 and 2014 , based on grant-date fair value, was $1.1 million , $2.0 million and $2.6 million , respectively. Stock unit activity for the years ended December 31 was as follows: 2016 2015 2014 Number of Weighted Number of Weighted Number of Weighted Unvested at beginning of year 835,730 $ 10.00 79,612 $ 32.23 28,235 $ 25.23 Granted (1)(2) 2,184,100 $ 2.19 790,397 $ 8.53 63,500 $ 34.34 Vested (3)(4) (26,666 ) $ 32.56 (34,279 ) $ 27.92 (12,123 ) $ 26.98 Forfeited/Canceled (241,110 ) $ 6.17 — $ — — $ — Unvested at end of year (5)(6) 2,752,054 $ 3.91 835,730 $ 10.00 79,612 $ 32.23 (1) Stock units granted in 2015 included 584,438 stock units with a market condition for vesting based on an average common stock trading price of $16.26 . As of December 31, 2016 , these awards had not yet met the market condition. (2) Stock units granted in 2016 included 1,156,500 stock units with a market condition for vesting based on an average common stock trading price of $4.78 . The market condition for these awards was met on November 30, 2016. (3) The total intrinsic value of stock units vested, which is defined as the market value of the stock on the date of vesting, was $0.1 million , $0.3 million and $0.3 million for 2016 , 2015 and 2014 , respectively. (4) The total fair value of the stock units that vested during 2016 , 2015 and 2014 , based on grant-date fair value, was $0.9 million , $1.0 million and $0.3 million , respectively. (5) Excluding the 502,446 market-based stock awards that have not met their performance criteria, the net aggregate intrinsic value of stock awards outstanding at December 31, 2016 was $12.1 million . (6) At December 31, 2016 , the weighted average remaining contractual term of share units outstanding was 2.60 years . Compensation expense related to equity-based awards is measured based on the grant-date fair value of the awards using an appropriate valuation model based on the vesting conditions of the awards. The fair value of the time-based option awards was determined using the Black-Scholes options pricing model, while a lattice (binomial) model was used to determine the fair value of the market-based option awards. Lattice (binomial) models incorporate ranges of assumptions for inputs. Stock unit awards with only a service condition are valued at their intrinsic value, which is the market value of the stock on the date of the award. The fair value of Stock unit awards with both a service condition and a market-based vesting condition is based on the output of a Monte Carlo simulation. The following assumptions were used to value awards granted during the years ended December 31: 2016 2015 2014 Monte Carlo Black-Scholes Binomial Monte Carlo Black-Scholes Binomial Risk-free interest rate 1.12% 1.60% – 2.08% 0.20% - 2.74% 1.23% 1.98% – 2.60% 0% - 3.05% Expected stock price volatility (1) 77% 45% 51% - 108% 65% 42% 41% - 42% Expected dividend yield —% —% —% —% —% —% Expected life (in years) (2) (3) 5.50 5.41 - 5.46 (3) 6.50 4.35 - 5.64 Contractual life (in years) — — 10 — — 10 Fair value $2.00 $3.36 - $4.62 $5.41 - $5.46 $7.99 $11.93 - $17.01 $8.99 - $13.82 (1) We generally estimate volatility based on the historical volatility of Ocwen’s common stock over the most recent period that corresponds with the estimated expected life of the option. For stock awards valued using a Monte Carlo simulation, volatility is computed as a blend of historical volatility and implied volatility based on traded options on Ocwen’s common stock. (2) For the options valued using the Black-Scholes model we determined the expected life based on historical experience with similar awards, giving consideration to the contractual term, exercise patterns and post vesting forfeitures. The expected term of the options valued using the lattice (binomial) model is derived from the output of the model. The lattice (binomial) model incorporates exercise assumptions based on analysis of historical data. For all options, the expected life represents the period of time that options granted were expected to be outstanding at the date of the award. (3) The stock units that contain both a service condition and a market-based condition are valued using the Monte Carlo simulation. The expected term is derived from the output of the simulation and represents the expected time to meet the market-based vesting condition. For equity awards with both service and market conditions, the requisite service period is the longer of the derived or explicit service period. In this case, the explicit service condition (vesting period) is the requisite service period, and the graded vesting method is used for expense recognition. The following table sets forth equity-based compensation related to stock options and stock awards and the related excess tax benefit for the years ended December 31: 2016 2015 2014 Equity-based compensation expense: Stock option awards $ 1,644 $ 3,978 $ 9,983 Stock awards 3,537 3,313 746 Excess tax benefit related to share-based awards 686 6,824 6,374 As of December 31, 2016 , unrecognized compensation costs related to non-vested stock options amounted to $2.4 million , which will be recognized over a weighted-average remaining requisite service period of 1.87 years . Unrecognized compensation costs related to non-vested stock units as of December 31, 2016 amounted to $5.1 million , which will be recognized over a weighted-average remaining life of 1.91 years. |
Business Segment Reporting
Business Segment Reporting | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Business Segment Reporting | Note 22 — 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 of ACS and our other business activities that are individually insignificant, revenues and expenses that are not directly related to other reportable segments, interest income on short-term investments of cash, interest expense on corporate debt and certain corporate expenses. Our cash balances are included in Corporate Items and Other. ACS provides short-term inventory-secured loans to independent used car dealers to finance their inventory. In addition, Ocwen formed CR Limited (CRL), our wholly-owned captive reinsurance subsidiary, and entered into a quota share re-insurance agreement effective in 2016 with a third-party insurer related to coverage on foreclosed real estate properties owned or serviced by us. We allocate portions of interest income and interest expense to each business segment, including interest earned on cash balances and short-term investments and interest incurred on corporate debt. We also allocate expenses incurred by corporate support services to each business segment. Financial information for our segments is as follows: Servicing Lending Corporate Items and Other Corporate Eliminations Business Segments Consolidated Results of Operations For the year ended December 31, 2016 Revenue (1) $ 1,247,159 $ 112,363 $ 27,646 $ (5 ) $ 1,387,163 Expenses (1) (2) 920,434 104,342 198,483 (5 ) 1,223,254 Other income (expense): Interest income (109 ) 15,300 3,892 — 19,083 Interest expense (357,413 ) (14,398 ) (40,772 ) — (412,583 ) Gain on sale of mortgage servicing rights, net 8,492 — — — 8,492 Other (1) 15,812 1,065 (2,139 ) — 14,738 Other income (expense), net (333,218 ) 1,967 (39,019 ) — (370,270 ) Income (loss) before income taxes $ (6,493 ) $ 9,988 $ (209,856 ) $ — $ (206,361 ) For the year ended December 31, 2015 Revenue (1) $ 1,613,537 $ 124,724 $ 2,895 $ (58 ) $ 1,741,098 Expenses (1) (2) 1,221,879 97,692 158,671 (58 ) 1,478,184 Other income (expense): Interest income 1,044 14,669 2,607 — 18,320 Interest expense (446,377 ) (9,859 ) (26,137 ) — (482,373 ) Gain on sale of mortgage servicing rights, net 83,921 — — — 83,921 Other (1) (14,370 ) 2,123 (396 ) — (12,643 ) Other income (expense), net (375,782 ) 6,933 (23,926 ) — (392,775 ) Income (loss) before income taxes $ 15,876 $ 33,965 $ (179,702 ) $ — $ (129,861 ) Servicing Lending Corporate Items and Other Corporate Eliminations Business Segments Consolidated For the year ended December 31, 2014 Revenue (1) $ 1,985,436 $ 119,220 $ 6,825 $ (156 ) $ 2,111,325 Expenses (1) (2) 1,643,323 156,272 235,769 (156 ) 2,035,208 Other income (expense): Interest income 2,981 16,459 3,551 — 22,991 Interest expense (515,141 ) (10,725 ) (15,891 ) — (541,757 ) Other (1) (4,043 ) 4,476 (943 ) — (510 ) Other income (expense), net (516,203 ) 10,210 (13,283 ) — (519,276 ) Loss before income taxes $ (174,090 ) $ (26,842 ) $ (242,227 ) $ — $ (443,159 ) Servicing Lending Corporate Items and Other Corporate Eliminations Business Segments Consolidated Total Assets December 31, 2016 $ 3,312,357 $ 3,863,848 $ 479,458 $ — $ 7,655,663 December 31, 2015 $ 4,089,064 $ 2,811,154 $ 480,090 $ — $ 7,380,308 December 31, 2014 $ 5,864,061 $ 1,963,729 $ 415,872 $ — $ 8,243,662 (1) Inter-segment billings for services rendered to other segments are recorded as revenues, as contra-expense or as other income, depending on the type of service that is rendered. (2) Depreciation and amortization expense are as follows: Servicing Lending Corporate Items and Other Business Segments Consolidated For the year ended December 31, 2016: Depreciation expense $ 6,804 $ 228 $ 18,306 $ 25,338 Amortization of mortgage servicing rights 32,669 309 — 32,978 Amortization of debt discount 727 — 3,450 4,177 Amortization of debt issuance costs 13,455 — 12,207 25,662 For the year ended December 31, 2015: Depreciation expense $ 2,990 $ 380 $ 15,789 $ 19,159 Amortization of mortgage servicing rights 98,849 345 — 99,194 Amortization of debt discount 2,680 — — 2,680 Amortization of debt issuance costs 21,269 — 1,395 22,664 For the year ended December 31, 2014: Depreciation expense $ 9,955 $ 332 $ 11,623 $ 21,910 Amortization of mortgage servicing rights 249,471 705 199 250,375 Amortization of debt discount 1,318 — — 1,318 Amortization of debt issuance costs 4,294 — 845 5,139 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 23 — Related Party Transactions Ocwen’s former Executive Chairman, William C. Erbey, also formerly served as Chairman of the Board of Altisource Portfolio Solutions, S.A. (Altisource), HLSS, Altisource Residential Corporation (Residential) and Altisource Asset Management Corporation (AAMC). As a result, he had obligations to Ocwen as well as to Altisource, HLSS, Residential and AAMC. Effective January 16, 2015, Mr. Erbey resigned as an officer and director of Ocwen. Effective on that same date, Mr. Erbey also resigned from the boards of Altisource, HLSS, Altisource Residential and AAMC. Following his resignation, effective as of January 16, 2015, Mr. Erbey has no directorial, management, oversight, consulting or any other role at Ocwen, and we are expressly prohibited from providing any non-public information about Ocwen to Mr. Erbey pursuant to our settlement with the NY DFS. As a result of these and other relevant facts and circumstances, we believe that from and after January 17, 2015 Mr. Erbey does not possess the power, direct or indirect, to direct or cause the direction of our management and policies and, accordingly, we do not consider Altisource, HLSS, Residential or AAMC to be related parties. Revenues and expenses related to these agreements for the period from January 1 to January 16, 2015 are not significant and have not been disclosed. Absent a change in circumstances, we do not expect that we will consider any of these entities to be related parties in future periods. The following table summarizes revenues and expenses related to our agreements with Altisource, HLSS (prior to the sale of its assets to NRZ), AAMC and Residential (and, as applicable, their subsidiaries) for the year ended December 31, 2014. See Note 25 — Commitments for additional discussion of our long-term agreements with Altisource. See Note 3 — Sales of Advances and MSRs , Note 5 — Loans Held for Sale , Note 8 — Mortgage Servicing and Note 13 — Borrowings for additional discussion of the NRZ/HLSS Transactions. Revenues and Expenses: Altisource agreements: Revenues $ 43,075 Expenses 101,520 HLSS support services agreement: Revenues $ 1,315 Expenses 1,729 AAMC support services and facilities agreements Revenues $ 1,160 Residential servicing agreement Revenues $ 15,658 |
Regulatory Requirements
Regulatory Requirements | 12 Months Ended |
Dec. 31, 2016 | |
Brokers and Dealers [Abstract] | |
Regulatory Requirements | Note 24 — 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 (including requests in the form of subpoenas and civil investigative demands) 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 heightened 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. In addition to amounts paid to resolve regulatory matters, we could be required to pay for the costs of third party firms to monitor our compliance with such resolutions. We have recognized $171.0 million in such third party monitoring costs from January 1, 2014 through December 31, 2016 in connection with our settlements with the CA DBO and the NY DFS and in connection with our National Mortgage Settlement. We must comply with a large number of federal, state and local consumer protection laws including, among others, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act), 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, as well as individual state licensing and foreclosure laws and federal and local bankruptcy rules. 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. Ocwen has various subsidiaries, including OLS, Homeward and Liberty, that 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 generally include financial requirements such as providing audited financial statements or satisfying minimum net worth requirements and non-financial requirements such as examinations as to the licensee’s compliance with applicable laws and regulations. Failure to satisfy any of the requirements to which our licensed entities 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 a material adverse impact on our results of operations and financial condition. The minimum net worth requirements to which our licensed entities are subject are unique to each state and type of license. We believe our licensed entities were in compliance with all of their minimum net worth requirements at December 31, 2016 . 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 December 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 a material adverse impact on our business. The most restrictive of the various net worth requirements is based on the total assets of OLS and was $344.7 million at December 31, 2016 . There are a number of foreign laws and regulations that are applicable to our operations in India and the Philippines, including laws and regulations that govern licensing, employment, safety, taxes and insurance and laws and regulations that govern the creation, continuation and 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. We expect to continue to invest significantly in our operational platform and risk and compliance management systems in order to comply with applicable laws and regulations. Furthermore, there may be additional federal, state or international laws enacted that place additional obligations on us and require additional investments by us. |
Commitments
Commitments | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments | Note 25 — Commitments Unfunded Lending Commitments We have originated floating-rate reverse mortgage loans under which the borrowers have additional borrowing capacity of $1.2 billion at December 31, 2016 . This additional borrowing capacity is available on a scheduled or unscheduled payment basis. We also had short-term commitments to lend $322.3 million and $38.2 million in connection with our forward and reverse mortgage loan IRLCs, respectively, outstanding at December 31, 2016 . We finance originated and purchased forward and reverse mortgage loans with repurchase and participation agreements, commonly referred to as warehouse lines. Long Term Contracts Our business is currently dependent on many of the services and products provided by Altisource under long-term agreements, many of which include renewal provisions. Our servicing platform runs on an information technology system that we license from Altisource. If Altisource were to fail to fulfill its contractual obligations to us, including through a failure to provide services at the required level to maintain and support our systems, or if Altisource were to become unable to fulfill such obligations, 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. Each of 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. Amounts incurred or received in connection with the above agreements for periods prior to January 1, 2015 are disclosed in Note 23 — Related Party Transactions . Certain services provided by Altisource under these agreements are charged to the borrower and/or mortgage loan investor. Accordingly, such services, while derived from our loan servicing portfolio, are not reported as expenses by Ocwen. These services include residential property valuation, residential property preservation and inspection services, title services and real estate sales-related services. 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 Agreements. Beginning April 1, 2015, the only services that were regularly provided under these Support Services Agreements were corporate services such as vendor procurement for technology and facilities management services. Altisource does not currently provide any services to us under the Support Services Agreements. Lease Commitments We lease certain of our premises and equipment under non-cancelable operating leases with terms expiring through 2023 exclusive of renewal option periods. Our annual aggregate minimum rental commitments under these leases are summarized as follows: 2017 $ 14,037 2018 9,878 2019 5,590 2020 2,929 2021 1,379 Thereafter 1,184 34,997 Less: Sublease income (1,027 ) Total minimum lease payments, net $ 33,970 In connection with business acquisitions we completed in prior years, we assumed the obligation for the lease agreements associated with certain facilities. The rental commitments in the table above for operating leases include the remaining amounts due through the earlier of the lease expiration date or the early termination date. We converted rental commitments for our facilities outside the U.S. to U.S. dollars using exchange rates in effect at December 31, 2016 . Rent expense for 2016 , 2015 and 2014 was $20.0 million , $23.7 million and $19.0 million , respectively. |
Contingencies
Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Note 26 — 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 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 or others, 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 such as claims under the Telephone Consumer Protection Act, 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. 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 loss can be reasonably estimated, we record an accrual for the loss. Excluding expenses of internal or external legal counsel, we have accrued $44.6 million as of December 31, 2016 for losses relating to threatened and pending litigation 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 that materially exceed the amount accrued. We cannot currently estimate the amount, if any, of reasonably possible losses above amounts that have been recorded at December 31, 2016 . We have previously disclosed several putative securities fraud class action lawsuits filed against Ocwen and certain of its officers and directors that contain allegations in connection with the restatements of our 2013 and first quarter 2014 financial statements and our December 2014 Consent Order with the NY DFS, among other matters. Those lawsuits have been consolidated and are pending in federal court in Florida. In September 2015, the presiding federal court dismissed the consolidated securities fraud class action. That action has since been re-filed in federal court. On December 22, 2015, the presiding federal court dismissed in part the action and it remains pending. On November 17, 2016, the presiding federal court granted plaintiffs’ motion for class certification. 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, liquidity and results of operations could be materially and adversely affected. On February 17, 2017, OFC, OLS, and Homeward signed an agreement with two qui tam relators to settle the following previously disclosed litigation matters relating to claims under the False Claims Act: U.S. Ex rel. Fisher v. Homeward Residential, Inc., et al and U.S. Ex rel. Fisher v. Ocwen Loan Servicing, LLC, et al (the Fisher Cases). The agreement confirms an earlier settlement in principle of these matters. The United States Department of Justice has agreed to seek final approval of the settlement agreement, which includes the following terms: • No admission of liability or wrongdoing by Ocwen; • Payment of $15.0 million to the United States and $15.0 million for the private citizens’ attorneys’ fees and costs. Ocwen agreed to the settlement, notwithstanding its belief that it has sound legal and factual defenses, in order to avoid the uncertain outcome of two trials and the additional expense and management time involved. We accrued $30.0 million as of June 30, 2016 with respect to the settlement agreement and we continue to believe this amount is both probable and reasonably estimable based on current information. We have not yet paid any portion of this $30.0 million accrual. There can be no assurance that the settlement agreement will be approved by the United States. In the event the settlement agreement is not approved, the Fisher Cases would continue and we would vigorously defend the allegations made against Ocwen. If our efforts to defend were not successful, our business, financial condition, liquidity and results of operations could be materially and adversely affected. The $44.6 million accrual for litigation matters noted above includes the $30.0 million accrual for the Fisher Cases. 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 relating to our performance under the servicing agreements for those 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 party 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 ourselves against 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, liquidity, 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, subpoenas, civil investigative demands, requests for information and other actions. Where we determine that a loss contingency is probable in connection with a regulatory matter and the amount of our loss can be reasonably estimated, we record an accrual for the loss. 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 regulatory matters that materially exceed any accrued amount. Predicting the outcome of any regulatory matter is inherently difficult and we generally cannot predict the eventual outcome of any regulatory matter or the eventual loss, if any, associated with the outcome. CFPB We are currently engaged with the CFPB in efforts to resolve certain concerns the CFPB has expressed relating to our servicing practices and technology. These concerns primarily stemmed from a CFPB examination of us that began in 2014. The CFPB has sent us several civil investigative demands seeking information about our servicing practices followed by a Notice and Opportunity to Respond and Advise (NORA) letter from the CFPB under which the CFPB (1) notified us that the CFPB’s Office of Enforcement is considering recommending that the CFPB take legal action against us relating to compliance with federal laws pertaining to our servicing practices and (2) provided us with the opportunity to make a NORA submission, which is a written statement setting forth reasons of law, policy and fact as to why we do not believe such action is appropriate. We made a NORA submission detailing why such action would not be appropriate. Subsequently, we were informed that the enforcement staff has been authorized to engage with us regarding the resolution of their concerns. Our negotiations with the enforcement staff of the CFPB could result in a consent order with the CFPB and could entail payment of monetary amounts by us or injunctive relief, among other consequences. In accordance with ASC 450, we have accrued $12.5 million as of December 31, 2016 as a result of our negotiations with the CFPB. We have not reached any agreement with the CFPB and cannot predict whether or when we may reach such an agreement. If we are unable to agree upon a resolution, the CFPB could bring an adversarial enforcement action against us. Accordingly, whether or not we reach an agreement after discussions with the CFPB, it is possible that we could incur losses that materially exceed the amount accrued as of December 31, 2016, and the resolution of the matters raised by the CFPB could have a material adverse impact on our business, reputation, financial condition, liquidity and results of operations. We cannot currently estimate the amount, if any, of reasonably possible loss above amounts that have been recorded as of December 31, 2016. New York Department of Financial Services In December 2014, we entered into a consent order (the NY Consent Order) with the NY DFS as a result of an investigation relating to Ocwen’s servicing of residential mortgages. 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 a third-party Operations Monitor to monitor various aspects of our operations and restrictions on our ability to acquire MSRs that effectively prohibit any such future acquisitions until we have satisfied certain specified conditions. The Operations Monitor was appointed in March 2015 for a two -year period, extendable for one year at the discretion of the NY DFS. We must pay all reasonable and necessary costs of the Operations Monitor. The expenses associated with the Operations Monitor have and will continue to impact us, as the expenses are substantial and we have limited ability to control, monitor or contest the Operation Monitor’s charges. 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 entered into a consent order (the 2015 CA Consent Order) with the CA DBO relating to our failure to produce certain information and documents during a routine licensing examination. The order contained monetary and non-monetary provisions, including the appointment of an independent third-party auditor (the CA Auditor) to assess OLS’ compliance with laws and regulations impacting California borrowers and a prohibition on acquiring any additional MSRs for loans secured in California. We were also required to pay all reasonable and necessary costs of the CA Auditor, and those costs were substantial. On February 17, 2017, OLS, and two other subsidiaries, Ocwen Business Solutions, Inc. (OBS) and OFSPL, reached an agreement, in three consent orders (collectively, the 2017 CA Consent Order), with the CA DBO that terminated the 2015 CA Consent Order and resolved open matters between the CA DBO and OLS, OBS and OFSPL, including certain matters relating to OLS’ servicing practices and the licensed activities of OBS and OFSPL. The 2017 CA Consent Order does not involve any admission of wrongdoing by OLS, OBS or OFSPL. The 2017 CA Consent Order also contains certain monetary and non-monetary provisions, including the following: • Ocwen agrees to make a cash settlement payment of $25.0 million to the CA DBO, comprised of $20.0 million for the CA DBO to distribute to Ocwen serviced borrowers at its discretion and $5.0 million in costs, fees, and penalties. We initially accrued $25.0 million as of September 30, 2016. Additionally, OFSPL and OBS agreed to pay $350,000 in the aggregate as a penalty. • Ocwen will provide $198.0 million in debt forgiveness through loan modifications to California borrowers over three years, commencing on July 1, 2016. Ocwen’s loan modifications are designed to be sustainable for homeowners while providing an estimated net present value for mortgage loan investors that is superior to that of foreclosure. Debt forgiveness as part of a loan modification is determined on a case-by-case basis in accordance with the applicable servicing agreement. Debt forgiveness does not involve an expense to Ocwen other than the operating expense incurred in arranging the modification, which is part of Ocwen’s role as loan servicer . • The 2017 CA Consent Order rescinds the prohibition on Ocwen acquiring MSRs for loans secured in California. • The CA Auditor appointment under the 2015 CA Consent Order is terminated. • OLS, OBS and OFSPL were released from claims relating to the matters covered by the 2017 CA Consent Order. • Ocwen will update certain policies and procedures pursuant to an action plan, which was agreed upon with the CA Auditor prior to the termination of its appointment. • Ocwen agrees to attempt to contact 19,295 California borrowers who did not respond to its initial voluntary solicitation of borrowers who may have been affected by issues disclosed in 2014 relating to erroneously dated borrower correspondence. • Ocwen agrees to establish and maintain a hotline for its California borrowers for three years to supplement Ocwen’s primary customer service center operations. • The CA DBO will select, engage and pay a third party administrator to confirm that Ocwen completes its commitments under the 2017 CA Consent Order. All costs and expenses of the administrator will be paid by the CA DBO. Ocwen National Mortgage Settlement In December 2013, we entered into a settlement with the CFPB and various state attorneys general and other state agencies that regulate the mortgage servicing industry relating to various allegations regarding deficient mortgage servicing practices, including those with respect to foreclosures (the Ocwen National Mortgage Settlement). The settlement contained monetary and non-monetary provisions, including quarterly testing on various metrics to ensure compliance with the Ocwen National Mortgage Settlement. The Office of Mortgage Settlement Oversight (OMSO) reports have detailed a number of instances where our testing has exceeded the applicable error rate threshold for a metric. 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 following submission, approval, and completion of a corrective action plan (CAP) to OMSO. 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 for certain metrics. In addition, in the event of substantial noncompliance with the settlement’s servicing standards, it is possible that a party to the settlement could bring an action to enforce the terms of the settlement and seek to impose on us a broader range of financial, injunctive or other penalties. 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. OMSO’s April 28, 2016 report indicated that Ocwen completed all Consumer Relief required under the National Mortgage Settlement, crediting Ocwen with over $2.1 billion in consumer relief credits, which exceeded Ocwen’s obligations. Securities and Exchange Commission 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. State Licensing and Other Matters 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 generally include financial requirements such as providing audited financial statements or satisfying minimum net worth requirements and non-financial requirements such as examinations as to the licensee’s compliance with applicable laws and regulations. Failure to satisfy any of the requirements to which our licensed entities 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 a material adverse impact on our results of operations and financial condition. In addition, we receive information requests and other inquiries, both formal and informal in nature, from our state financial regulators as part of their general regulatory oversight of our loan origination and servicing businesses. We also regularly engage with state attorneys general and the CFPB to respond to information requests and other inquiries. Many of our regulatory engagements arise from a complaint that the entity is investigating, although some are formal investigations or proceedings. 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 have in the past resolved, and may in the future resolve, matters via consent orders or payment of monetary amounts to settle issues identified in connection with examinations or regulatory or other oversight activities. The 2016 Consolidated Financial Statements have been restated to include the matter in the following two paragraphs: In December 2016, we entered into a confidential memorandum of understanding (MOU) with the Multistate Mortgage Committee (MMC), a multistate coalition of various mortgage banking regulators, and six states relating to a servicing examination by the MMC covering the period January 1, 2013 through February 28, 2015. The MOU contained various provisions relating to servicing practices and safety and soundness aspects of the regulatory review, as well as a requirement for us to develop a plan for submission to the MMC to address concerns from the review by the MMC, as a step toward closing the 2013 - 2015 examination. There were no monetary or other penalties under the MOU. Ocwen responded to the MOU items. On April 20, 2017 and subsequently, thirty state mortgage and banking regulatory agencies issued orders against OLS and certain other Ocwen companies. In general, the orders are styled as “cease and desist orders,” and we use that term to refer to all of the orders for ease of reference; we also include the District of Columbia regulator as a state regulator for ease of reference. All of the cease and desist orders apply to OLS, but additional Ocwen entities are named in some state orders, including Ocwen Financial Corporation, OMS, Homeward and Liberty. While each state’s cease and desist order is different, the orders generally prohibit a range of actions, including (1) acquiring new MSRs ( 17 states), (2) originating or acquiring new mortgage loans, where we would be the servicer ( 13 states), (3) originating or acquiring new mortgage loans ( 4 states) and (4) conducting foreclosure activities ( 2 states), among others. We intend to vigorously defend ourselves against unfounded claims while continuing to work with these regulatory agencies to resolve their concerns. We are currently working toward an agreement of an escrow account review plan to be conducted by an independent firm engaged by Ocwen. The independent firm would develop a statistically-based sample population, consistent with MMC guidelines(which would be substantially less than the entire loan population), as well as a possible targeted review of escrow accounts linked to certain loan categories. We have agreed with certain regulatory agencies, where necessary, to obtain delays or exceptions to the orders. Additionally, we have revised our operations, where necessary, so as to comply with the orders in the interim period while we attempt to negotiate resolutions. For example, in certain states, we are arranging to release servicing on new originations and we have paused our origination activities in two states. If we are unable to obtain timely resolutions in certain states, more serious consequences could result. For example, we could be required to transfer all of our mortgage servicing in Massachusetts and we could be required to cease mortgage servicing in Rhode Island. It is possible that the outcome of these state regulatory actions, whether through negotiated settlements or other resolutions, could be materially adverse to our business, reputation, financial condition, liquidity and results of operations. We cannot currently estimate the amount, if any, of reasonably possible loss related to these matters. Subsequent events solely related to this matter. On occasion, we engage with state Attorneys General and the Department of Justice on various matters. For example, Ocwen is currently in receipt of a civil investigative demand from the Massachusetts Attorney General’s Office requesting information relating to 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 (including commitments under any corrective action plans under such 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, liquidity and results of operations. Loan Put-Back and Related Contingencies Our contracts with purchasers of originated loans contain provisions that require indemnification or repurchase of the related loans under certain circumstances. While the language in the purchase contracts varies, they contain provisions that require us to indemnify purchasers of related loans or repurchase such loans if: • representations and warranties concerning loan quality, contents of the loan file or loan underwriting circumstances are inaccurate; • adequate mortgage insurance is not secured within a certain period after closing; • a mortgage insurance provider denies coverage; or • there is a failure to comply, at the individual loan level or otherwise, with regulatory requirements. Additionally, in one of the servicing contracts that Homeward acquired in 2008 from Freddie Mac, Homeward assumed the origination representations and warranties even though it did not originate the loans. We receive origination representations and warranties from our network of approved originators in connection with loans we purchase through our correspondent lending channel. To the extent that we have recourse against a third-party originator, we may recover part or all of any loss we incur. We believe that, as a result of the current market environment, many purchasers of residential mortgage loans are particularly aware of the conditions under which originators must indemnify or repurchase loans and under which such purchasers would benefit from enforcing any indemnification rights and repurchase remedies they may have. As our lending business grows, we expect that our exposure to indemnification risks and repurchase requests is likely to increase. If home values were to decrease, our realized loan losses from loan repurchases and indemnifications may increase as well. As a result, our liability for repurchases may increase beyond our current expectations. If we are required to indemnify or repurchase loans that we originate and sell, or where we have assumed this risk on loans that we service, as discussed above, in either case resulting in losses that exceed our related liability, our business, financial condition and results of operations could be adversely affected. We have exposure to origination representation, warranty and indemnification obligations because of our lending, sales and securitization activities and in connection with our servicing practices. We initially recognize these obligations at fair value. Thereafter, the estimation of the liability considers probable future obligations based on industry data of loans of similar type segregated by year of origination, to the extent applicable, and estimated loss severity based on current loss rates for similar loans, our historical rescission rates and the current pipeline of unresolved demands. Our historical loss severity considers the historical loss experience that we incur upon sale or liquidation of a repurchased loan as well as current market conditions. We monitor the adequacy of the overall liability and make adjustments, as necessary, after consideration of other qualitative factors including ongoing dialogue and experience with our counterparties. At December 31, |
Quarterly Results of Operations
Quarterly Results of Operations (Unaudited) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Results of Operations (Unaudited) | Note 27 — Quarterly Results of Operations (Unaudited) Quarters Ended December 31, September 30, June 30, March 31, Revenue $ 323,904 $ 359,448 $ 373,054 $ 330,757 Expenses 237,901 271,678 385,018 328,657 Other income (expense), net (96,205 ) (85,406 ) (84,434 ) (104,225 ) Income (loss) before income taxes (10,202 ) 2,364 (96,398 ) (102,125 ) Income tax expense (benefit) 228 (7,110 ) (9,180 ) 9,076 Net income (loss) (10,430 ) 9,474 (87,218 ) (111,201 ) Net income attributable to non-controlling interests (14 ) (83 ) (160 ) (130 ) Net income (loss) attributable to Ocwen common stockholders $ (10,444 ) $ 9,391 $ (87,378 ) $ (111,331 ) Earnings (loss) per share attributable to Ocwen common stockholders Basic $ (0.08 ) $ 0.08 $ (0.71 ) $ (0.90 ) Diluted $ (0.08 ) $ 0.08 $ (0.71 ) $ (0.90 ) Quarters Ended December 31, September 30, June 30, March 31, Revenue $ 362,457 $ 404,946 $ 463,251 $ 510,444 Expenses 359,848 387,726 352,252 378,358 Other income (expense), net (1) (131,881 ) (73,138 ) (98,499 ) (89,257 ) Income (loss) before income taxes (129,272 ) (55,918 ) 12,500 42,829 Income tax expense 94,985 10,832 2,594 8,440 Net income (loss) (224,257 ) (66,750 ) 9,906 34,389 Net loss (income) attributable to non-controlling interests 16 (119 ) (168 ) (34 ) Net income (loss) attributable to Ocwen common stockholders $ (224,241 ) $ (66,869 ) $ 9,738 $ 34,355 Earnings (loss) per share attributable to Ocwen common stockholders Basic $ (1.79 ) $ (0.53 ) $ 0.08 $ 0.27 Diluted $ (1.79 ) $ (0.53 ) $ 0.08 $ 0.27 (1) Other income (expense), net for 2015 includes gains (losses) on the sale of MSRs in the first, second, third and fourth quarter of $26.4 million , $30.3 million , $41.2 million and $(14.0) million , respectively. |
Organization, Business Enviro37
Organization, Business Environment, Basis of Presentation and Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization Ocwen Financial Corporation (NYSE: OCN) (Ocwen, we, us and our) is a financial services holding company which, through its subsidiaries, originates and services loans. 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 with operations located 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 Administration (FHA) or Department of Veterans Affairs (VA)) forward and reverse mortgages. The GSEs or Ginnie Mae guarantee these mortgage securitizations. We had a total of approximately 9,700 employees at December 31, 2016 of which approximately 6,300 were located in India and approximately 800 were based in the Philippines. Our operations in India and the Philippines provide internal support services, principally to our loan servicing business as well as to our corporate functions. Of our foreign-based employees, more than 80% were engaged in supporting our loan servicing operations as of December 31, 2016 . |
Consolidation and Basis of Presentation | Consolidation and Basis of Presentation Principles of Consolidation Our consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the U.S. (GAAP). Our financial statements include the accounts of Ocwen, its majority-owned subsidiaries and any variable interest entity (VIE) for which we have determined that we are the primary beneficiary. We apply the equity method of accounting to investments when the entity is not a VIE, and we are able to exercise significant influence, but not control, over the policies and procedures of the entity but own 50% or less of the voting securities. We have eliminated intercompany accounts and transactions in consolidation. Foreign Currency Translation The functional currency of each of our foreign subsidiaries is the U.S. dollar. Re-measurement adjustments of foreign-denominated amounts to U.S. dollars are included in Other, net in our consolidated statements of operations. |
Reclassifications | Reclassifications 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 ( $20.0 million ) and Senior notes ( $4.5 million ) on the consolidated balance sheets, resulting in a reduction to Ocwen’s total assets and total liabilities of $24.5 million at December 31, 2015. Certain amounts in the Consolidated Statements of Cash Flows for 2015 and 2014 have been reclassified to conform to the current year presentation as follows: • Within the operating activities section, we reclassified Amortization of debt discount and Net gain on valuation of mortgage loans held for investment and HMBS-related borrowings from Other to new separate line items. In addition, we reclassified amounts related to reverse mortgages from Gain on loans held for sale, net to Other. • Within the investing activities section, we reclassified Proceeds from sale of premises and equipment to Other. • Within the financing activities section, we reclassified Proceeds from exercise of stock options to Other. These reclassifications had no impact on our consolidated cash flows from operating, investing or financing activities. |
Use of Estimates and Assumptions | Use of Estimates and Assumptions The preparation of financial statements in conformity with GAAP requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Such estimates and assumptions include, but are not limited to, those that relate to fair value measurements, the amortization of mortgage servicing rights, income taxes, the provision for potential losses that may arise from litigation proceedings, representation and warranty and other indemnification obligations, and our going concern evaluation. In developing estimates and assumptions, management uses all available information; however, actual results could materially differ from those estimates and assumptions. |
Cash | Cash Cash includes both interest-bearing and non-interest-bearing demand deposits with financial institutions that have original maturities of 90 days or less. |
Mortgage Servicing Rights | Mortgage Servicing Rights (MSRs) MSRs are assets representing our right to service portfolios of mortgage loans. We have primarily obtained MSRs through asset purchases or business combination transactions. We also retain MSRs on originated loans when they are sold in the secondary market. For servicing retained in connection with the securitization of reverse mortgage loans accounted for as secured financings, we do not recognize an MSR. An agreement between the various parties to a mortgage securitization transaction typically specifies the rights and obligations of the holder of the MSRs, which include guidelines and procedures for servicing the loans. Two examples of these guidelines and procedures include remittance and reporting requirements. The UPB of the loans underlying the MSRs is not included on our balance sheet. Custodial accounts, which hold funds representing collections of principal and interest that we receive from borrowers (float balances), are held in escrow by an unaffiliated bank and excluded from our balance sheet. All newly acquired or retained MSRs are initially measured at fair value. We recognize a servicing liability for those portfolio contracts that are not expected to compensate us adequately for performing the servicing. For this purpose, we define contracts as conventional, government-insured or non-Agency (commonly referred to as non-prime, subprime or private-label loans) based on their general comparability with regard to servicing guidelines, underwriting standards and borrower risk characteristics. Servicing assets are not recognized for subservicing arrangements entered into with the entity that owns the MSRs. Subsequent to acquisition, we account for servicing assets and servicing liabilities using the amortization method or the fair value measurement method. The fair value election is irrevocable and can be made at the beginning of any fiscal year. Additionally, transferring servicing assets and servicing liabilities from a class subsequently measured using the amortization method to a class subsequently measured at fair value is permitted as of the start of any fiscal year. As discussed further in Note 8 — Mortgage Servicing , effective January 1, 2015, we elected fair value accounting for a newly-created class of non-Agency MSRs, which were previously accounted for using the amortization method. Once the fair value election is made for a particular class of MSRs, that election applies to all subsequently acquired or originated servicing assets and liabilities with characteristics consistent with the class. We defined our classes based on our strategy for managing the risks of the underlying portfolios. For certain of the servicing assets, we previously managed the effects of interest rate risk with derivative financial instruments. We elected to account for this class of servicing assets using the fair value measurement method. For servicing assets or liabilities that we account for using the amortization method, we amortize the balances in proportion to, and over the period of, estimated net servicing income (if servicing revenues exceed servicing costs) or net servicing loss (if servicing costs exceed servicing revenues). We assess servicing assets or liabilities for impairment or increased obligation based on fair value at each reporting date. Estimated net servicing income is primarily driven by the estimated future cash flows of the underlying mortgage loan portfolio, which, absent new purchases, declines over time from prepayments and scheduled loan amortization. We adjust MSR amortization prospectively in response to changes in estimated projections of future cash flows. We perform an impairment analysis based on the difference between the carrying amount and estimated fair value after grouping the underlying portfolios into the applicable strata. We recognize any impairment through a valuation allowance. We adjust the valuation allowance to reflect subsequent changes in the measurement of impairment. However, we do not recognize fair value in excess of the carrying amount of servicing assets for that stratum. For servicing assets or liabilities that we account for at fair value on a recurring basis, we measure the balances at fair value at each reporting date and report changes in fair value in earnings in the period in which the changes occur. We earn fees for servicing mortgage loans. We collect servicing fees, generally expressed as a percent of UPB, from the borrowers’ payments. We also include late fees, prepayment penalties, float earnings and other ancillary fees in servicing revenue. We recognize servicing fees as revenue when the fees are earned, which is generally when the borrowers’ payments are collected or when loans are modified or liquidated through the sale of the underlying real estate collateral or otherwise. |
Advances and Match Funded Advances | Advances and Match Funded Advances During any period in which a borrower does not make payments, most of our servicing agreements require that we advance our own funds to meet contractual principal and interest remittance requirements for the investors, to pay property taxes and insurance premiums and to process foreclosures. We also advance funds to maintain, repair and market foreclosed real estate properties on behalf of investors. These advances are made pursuant to the terms of each servicing contract. Each servicing contract is associated with specific loans, identified as a pool. When we make an advance on a loan under each servicing contract, we are entitled to recover that advance either from the borrower, for reinstated and performing loans, or from investors, for modified and liquidated loans. Most of our servicing contracts provide that the advances made under the respective agreement have priority over all other cash payments from the proceeds of the loan, and in the majority of cases, the proceeds of the pool of loans that are the subject of that servicing contract. As a result, we are entitled to repayment from loan proceeds before any interest or principal is paid on the bonds, and in the majority of cases, advances in excess of loan proceeds may be recovered from pool level proceeds. We establish an allowance for losses through a charge to earnings to the extent that we believe advances are uncollectible under the provisions of each servicing contract taking into consideration our historical collection rates, length of delinquency and the amount of the advance. However, we are generally only obligated to advance funds to the extent that we believe the advances are recoverable from expected proceeds from the loan. We assess collectability using proprietary cash flow projection models that incorporate a number of different factors, depending on the characteristics of the mortgage loan or pool, including, for example, estimated time to a foreclosure sale, estimated costs of foreclosure action, estimated future property tax payments and the estimated value of the underlying property net of estimated carrying costs, commissions and closing costs. |
Loans Held for Sale | Loans Held for Sale Loans held for sale include residential mortgage loans that we originate or purchase and do not intend to hold until maturity. We report loans held for sale at either fair value or the lower of cost or fair value computed on an aggregate basis. For loans held for sale that are reported at the lower of cost or fair value, loan origination fees, as well as premium and discount, points and incremental direct origination costs, are initially recorded as an adjustment of the cost basis of the loan and are deferred until the loan is sold. For loans that we elected to measure at fair value on a recurring basis, we report changes in fair value in Gain on loans held for sale, net in the consolidated statements of operations in the period in which the changes occur. These loans are expected to be sold into the secondary market to the GSEs or into Ginnie Mae guaranteed securitizations. For all other loans held for sale which we report at the lower of cost or fair value, we account for the excess of cost over fair value as a valuation allowance and include changes in the valuation allowance in Other, net, in the consolidated statements of operations in the period in which the change occurs. We accrue interest income as earned. We place loans on non-accrual status after any portion of principal or interest has been delinquent for more than 89 days , or earlier if management determines the borrower is unable to continue performance. When we place a loan on non-accrual status, we reverse the interest that we have accrued but not yet received. We return loans to accrual status only when we reinstate the loan and there is no significant uncertainty as to collectability. |
Loans Held for Investment | Loans Held for Investment Loans held for investment include reverse residential mortgage loans that we originate and which we have elected to measure at fair value. These reverse mortgages are insured by the FHA and pooled into Ginnie Mae guaranteed securities that we sell into the secondary market with servicing rights retained. Loan transfers in these Ginnie Mae securitizations do not meet the definition of a participating interest and as a result, the transfers of the reverse mortgages do not qualify for sale accounting. Therefore, we account for these transfers as financings, with the reverse mortgages classified as Loans held for investment - reverse mortgages, at fair value, on our consolidated balance sheets, with no gain or loss recognized on the transfer. Upfront costs and fees related to loans held for investment, including broker fees, are recognized in earnings as incurred and are not capitalized. However, we capitalize premiums on loans purchased via the correspondent channel, because they represent part of the purchase price. |
Transfers of Financial Assets | Transfers of Financial Assets We securitize, sell and service forward and reverse residential mortgage loans. Securitization transactions typically involve the use of VIEs and are accounted for either as sales or as secured financings. We typically retain economic interests in the securitized assets in the form of servicing rights and obligations. In order to efficiently finance our assets and operations and create liquidity, we may sell servicing advances, MSRs or the right to receive servicing fees, excluding ancillary income, relating to certain of our MSRs (Rights to MSRs). In order to determine whether or not a VIE is required to be consolidated, we consider our ongoing involvement with the VIE. In circumstances where we have both the power to direct the activities that most significantly impact the performance of the VIE and the obligation to absorb losses or the right to receive benefits that could be significant, we would conclude that we would consolidate the entity, which precludes us from recording an accounting sale in connection with the transfer of the financial assets. In the case of a consolidated VIE, we continue to report the underlying residential mortgage loans or servicing advances, and we record the securitized debt on our consolidated balance sheet. In the case of transfers where either one or both of the power or economic criteria above are not met, we evaluate whether a sale has occurred for accounting purposes. In order to recognize a sale, the transferred assets must be legally isolated, not be constrained by restrictions from further transfer and be deemed to be beyond our control. If the transfer does not meet any of these three criteria, the accounting is consistent with a secured financing as described in the preceding paragraph. In certain situations, we may have continuing involvement in transferred loans through our retained servicing. Additionally, we may have the right, but not the obligation, to buy certain re-performing loans from the purchaser for which we have secured a commitment to re-pool those loans under a Ginnie Mae program. In both cases, transactions involving these situations typically would still be eligible for sale accounting, as we have ceded effective control of these loans to the purchaser. Subsequent to the determination that a transaction does not meet the accounting sale criteria, we may determine that we meet the criteria. In the event we subsequently meet the accounting sale criteria, we derecognize the transferred assets and related liabilities. In the case of transfers of MSRs and Rights to MSRs where we retain the right to subservice, we defer the related gain or loss and amortize the balance over the life of the subservicing agreement. Gains or losses on off-balance sheet securitizations take into consideration any retained interests, including servicing rights and representation and warranty obligations, both of which are initially recorded at fair value at the date of sale in Gain on loans held for sale, net, in our consolidated statements of operations. |
Premises and Equipment | Premises and Equipment We report premises and equipment at cost and, except for land, depreciate them over their estimated useful lives on a straight-line basis as follows: Computer software 2 – 3 years Computer hardware 3 years Buildings 40 years Leasehold improvements Term of the lease not to exceed useful life Furniture and fixtures 5 years Office equipment 5 years |
Litigation | Litigation We monitor our legal matters, including advice from external legal counsel, and periodically perform assessments of these matters for potential loss accrual and disclosure. We establish a liability for settlements, judgments on appeal and filed and/or threatened claims for which we believe that it is probable that a loss has been or will be incurred and the amount can be reasonably estimated. We recognize legal costs associated with loss contingencies as they are incurred. |
Derivative Financial Instruments | Derivative Financial Instruments We recognize all derivatives on our consolidated balance sheet at fair value. On the date that we enter into a derivative contract, we designate and document each derivative contract as one of the following at the time the contract is executed: (a) a hedge of a recognized asset or liability (fair value hedge); (b) a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability (cash flow hedge); (c) a hedge of a net investment in a foreign operation; or (d) a derivative instrument not designated as a hedging instrument. To qualify for hedge accounting, a derivative must be highly effective at reducing the risk associated with the exposure being hedged. In addition, the documentation must include the risk management objective and strategy. We assess and document quarterly the extent to which a derivative has been and is expected to continue to be effective in offsetting the changes in the fair value or the cash flows of the hedged item. To assess effectiveness, we use statistical methods, such as regression analysis, as well as non-statistical methods including dollar-offset analysis. For a fair value hedge, we record changes in the fair value of the derivative, to the extent that it is effective, and changes in the fair value of the hedged asset or liability attributable to the hedged risk in the same financial statement category as the hedged item on the face of the statement of operations. For a cash flow hedge, to the extent that it is effective, we record changes in the estimated fair value of the derivative in other comprehensive income. We subsequently reclassify these changes in estimated fair value to net income in the same period, or periods, that the hedged transaction affects earnings and in the same financial statement category as the hedged item. For derivative instruments not designated as a hedge for accounting purposes that were entered into as an economic hedge against changes in fair value of a recognized asset, we report changes in the fair value in the same financial statement category of the statement of operations as the changes in fair value of the related asset. For all other derivative instruments not designated as a hedging instrument, we report changes in their fair values in Other income (expense), net. If a derivative instrument in a cash flow hedge is terminated or the hedge designation is removed, we reclassify related amounts in accumulated other comprehensive income into earnings in the same period or periods during which the cash flows that were hedged affect earnings. In a period where we determine it is probable that a hedged forecasted transaction will not occur, such as variable-rate interest payments on debt that has been repaid in advance, any related amounts in accumulated other comprehensive income are reclassified into earnings in that period. The cash collateral held by counterparties to our derivative agreements is included in Other assets. |
Stock-Based Compensation | Stock-Based Compensation We measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. For equity awards with a service condition, we recognize the cost as compensation expense ratably over the vesting period. For equity awards with a market condition, we recognize the cost as compensation expense ratably over the expected life of the option that is derived from an options pricing model. When equity awards with a market condition meet their vesting requirements, any unrecognized compensation at the vesting date is recognized ratably over the vesting period. For equity awards with both a market condition and a service condition for vesting, we recognize cost as compensation expense over the requisite service period for each tranche of the award using the graded-vesting method. |
Income Taxes | Income Taxes We file consolidated federal income tax returns. We allocate consolidated income tax among all subsidiaries included in the consolidated return as if each subsidiary filed a separate return or, in certain cases, a consolidated return. We account for income taxes using the asset and liability method, which requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Additionally, we adjust deferred taxes to reflect estimated tax rate changes. We conduct periodic evaluations to determine whether it is more likely than not that some or all of our deferred tax assets will not be realized. Among the factors considered in this evaluation are estimates of future earnings, the future reversal of temporary differences and the impact of tax planning strategies that we can implement if warranted. We provide a valuation allowance for any portion of our deferred tax assets that, more likely than not, will not be realized. We recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the consolidated financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. We recognize interest and penalties related to income tax matters in Income tax expense. |
Basic and Diluted Earnings per Share | Basic and Diluted Earnings per Share We calculate basic earnings per share based upon the weighted average number of shares of common stock outstanding during the year. We calculate diluted earnings per share based upon the weighted average number of shares of common stock outstanding and all dilutive potential common shares outstanding during the year. The computation of diluted earnings per share includes the estimated impact of the exercise of the outstanding options to purchase common stock using the treasury stock method. The computation of diluted earnings per share also includes the potential shares of converted common stock associated with our previously outstanding Series A Perpetual Convertible Preferred Stock using the if-converted method. |
Going Concern | Going Concern In accordance with Accounting Standards Codification (ASC) 205-40, Presentation of Financial Statements - Going Concern , we evaluate whether there are conditions that are known or reasonably knowable, such as those discussed in the “Business Environment” section, that raise substantial doubt about our ability to continue as a going concern within one year after the date that our financial statements are issued. We perform a detailed review and analysis of relevant quantitative and qualitative information from across our organization in connection with this evaluation. To support this effort, senior management from key business units reviews and assesses the following information: • our current financial condition, including liquidity sources at the date that the financial statements are issued (e.g., available liquid funds and available access to credit, including covenant compliance); • our conditional and unconditional obligations due or anticipated within one year after the date that the financial statements are issued (regardless of whether those obligations are recognized in our financial statements); • funds necessary to maintain operations considering our current financial condition, obligations and other expected cash flows within one year after the date that the financial statements are issued (i.e., financial forecasting); and • other conditions and events, when considered in conjunction with the above items, that may adversely affect our ability to meet obligations within one year after the date that the financial statements are issued (e.g., negative financial trends, indications of possible financial difficulties, internal matters such as a need to significantly revise operations and external matters such as adverse regulatory/legal proceedings or rating agency decisions). If such conditions exist, management evaluates its plans that when implemented would mitigate the condition(s) and alleviate the substantial doubt about our ability to continue as a going concern. Such plans are considered only if information available as of the date that the financial statements are issued indicates both of the following are true: • it is probable management’s plans will be implemented within the evaluation period; and • it is probable management’s plans, when implemented individually or in the aggregate, will mitigate the condition(s) that raise substantial doubt about our ability to continue as a going concern in the evaluation period. Our evaluation of whether it is probable that management’s plans will be effectively implemented within the evaluation period is based on the feasibility of implementation of management’s plans in light of our specific facts and circumstances. Our evaluation of whether it is probable that our plans, individually or in the aggregate, will be implemented in the evaluation period involves a degree of judgment, including about matters that are, to different degrees, uncertain. |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards Consolidation: Measuring the Financial Assets and the Financial Liabilities of a Consolidated Collateralized Financing Entity (ASU 2014-13) This ASU requires that when a reporting entity elects the measurement alternative included in this ASU for a consolidated collateralized financing entity, the reporting entity should measure both the financial assets and the financial liabilities of that collateralized financing entity in its consolidated financial statements using the more observable of the fair value of the financial assets and the fair value of the financial liabilities. A collateralized financing entity is a variable interest entity with no more than nominal equity that holds financial assets and issues beneficial interests in those financial assets; the beneficial interests have contractual recourse only to the related assets of the collateralized financing entity and are classified as financial liabilities. Our adoption of this standard on January 1, 2016 did not have a material impact on our consolidated financial statements. Presentation of Financial Statements—Going Concern: Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (ASU 2014-15) This ASU defines management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures, as applicable. In connection with preparing financial statements for each reporting period, an organization’s management should evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the organization’s ability to continue as a going concern within one year after the date that the financial statements are issued (or are available to be issued, when applicable), based on relevant conditions and events that are known and reasonably knowable at the date that the financial statements are issued (or are available to be issued, when applicable). We have provided the disclosures required as a result of our adoption of this standard. Derivatives and Hedging: Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity (ASU 2014-16) This ASU clarifies how current GAAP should be interpreted in evaluating the economic characteristics and risks of a host contract in a hybrid financial instrument that is issued in the form of a share. For hybrid financial instruments issued in the form of a share, an entity is required to determine the nature of the host contract by considering all stated and implied substantive terms and features of the hybrid financial instrument, weighing each term and feature on the basis of all relevant facts and circumstances. An entity should determine the nature of the host contract by considering the economic characteristics and risks of the entire hybrid financial instrument, including the embedded derivative feature that is being evaluated for separate accounting from the host contract. Our adoption of this standard on January 1, 2016 did not have a material impact on our consolidated financial statements. Income Statement—Extraordinary and Unusual Items: Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items (ASU 2015-01) This ASU eliminates the concept of extraordinary items from GAAP . Under this standard, the presentation and disclosure guidance for items that are unusual in nature or occur infrequently has been retained and expanded to include items that are both unusual in nature and infrequently occurring. Our prospective adoption of this standard on January 1, 2016 did not have a material impact on our consolidated financial statements. Consolidation—Amendments to the Consolidation Analysis (ASU 2015-02) This ASU improves targeted areas of consolidation guidance for legal entities such as limited partnerships, limited liability corporations, and securitization structures (collateralized debt obligations, collateralized loan obligations, and mortgage-backed security transactions). This standard reduces the number of consolidation models from four to two by eliminating specialized guidance for limited partnerships and similar legal entities. It also places more emphasis on risk of loss when determining a controlling financial interest. A reporting organization may no longer have to consolidate a legal entity in certain circumstances based solely on its fee arrangement when certain criteria are met. Additionally, this standard reduces the frequency of the application of related-party guidance when determining a controlling financial interest in a VIE and changes consolidation conclusions for public and private companies that typically make use of limited partnerships or VIEs. Our adoption of this standard on January 1, 2016 did not have a material impact on our consolidated financial statements. Interest—Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs (ASU 2015-03) This ASU simplifies presentation of debt issuance costs. Under this standard, debt issuance costs related to a recognized debt liability will be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability and amortization of debt issuance costs will be reported as interest expense, consistent with the accounting for debt discounts. Recognition and measurement guidance for debt issuance costs will not be affected. Our retrospective adoption of this standard on January 1, 2016 did not have a material impact on our consolidated financial statements. See Reclassifications section above. Intangibles—Goodwill and Other—Internal-Use Software: Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement (ASU 2015-05) This ASU helps entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement by providing guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. Our prospective adoption of this standard on January 1, 2016 did not have a material impact on our consolidated financial statements. Interest—Imputation of Interest: Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements—Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting (ASU 2015-15) This ASU clarifies ASU 2015-03, Interest -- Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs , by providing guidance regarding the presentation and subsequent measurement of debt issuance costs related to line-of-credit arrangements. Given the absence of authoritative guidance on this matter, the Securities and Exchange Commission (SEC) staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on that line-of-credit arrangement. Our retrospective adoption of this standard on January 1, 2016 did not have a material impact on our consolidated financial statements. Income Taxes: Balance Sheet Classification of Deferred Taxes (ASU 2015-17) This ASU requires that deferred tax assets and liabilities be classified as noncurrent in a classified statement of financial position, thereby aligning this presentation with International Financial Reporting Standards. The current requirement that deferred tax assets and liabilities of a tax-paying component of an entity be offset and presented as a single amount is not affected by this guidance. Our adoption of this standard on January 1, 2017 will not have any impact on our consolidated financial statements, as we do not present a classified statement of financial position. Recently Issued Accounting Standards Financial Instruments: Recognition and Measurement of Financial Assets and Financial Liabilities (ASU 2016-01) In January 2016, the FASB issued ASU 2016-01, which is intended to provide users with more useful information regarding the recognition, measurement, presentation, and disclosure of financial instruments and also improve the accounting model to better meet the requirements of today’s complex economic environment. Most changes in this ASU require the same information, but some changes will revise the geography of that information on the financial statements. This standard will be effective for us on January 1, 2018. Early adoption will be permitted only for the provision to record fair value changes for financial liabilities under the fair value option resulting from instrument-specific credit risk in other comprehensive income. An entity should apply the amendments in this standard by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. The amendments related to equity securities without readily determinable fair values (including disclosure requirements) should be applied prospectively to equity investments that exist as of the date of adoption of this ASU. We do not anticipate that our adoption of this standard will have a material impact on our consolidated financial statements. 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 to better understand the amount, timing and uncertainty of cash flows arising from leases. This standard 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 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. We do not anticipate that our adoption of this standard on January 1, 2017 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. We do not anticipate that our adoption of this standard on January 1, 2017 will have a material impact on our consolidated financial statements. 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. We do not anticipate that our adoption of this standard on January 1, 2017 will have a material impact on our consolidated financial statements. 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. We do not anticipate that our adoption of this standard on January 1, 2017 will have a material impact on our consolidated financial statements. Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments (ASU 2016-13) In June 2016, the FASB issued ASU 2016-13 to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. This standard aligns the accounting with the economics of lending by requiring banks and other lending institutions to immediately record the full amount of credit losses that are expected in their loan portfolios, providing investors with better information about those losses on a more timely basis. The new guidance requires an organization to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This standard requires enhanced disclosures to help investors and other financial statement users to better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization’s portfolio. Additionally, the new guidance amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. This standard will be effective for us on January 1, 2020, with early application permitted. We are currently evaluating the effect of adopting this standard. Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments (ASU 2016-15) In August 2016, the FASB issued ASU 2016-15 to clarify how certain cash receipts and cash payments are presented and classified in the statement of cash flows under FASB ASC Topic 230, Statement of Cash Flows (ASC 230). This standard addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. ASU 2016-15 will be effective for us on January 1, 2018, with early adoption permitted. We do not anticipate that our adoption of this standard will have a material impact on our consolidated financial statements. Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory (ASU 2016-16) In October 2016, the FASB issued ASU 2016-16 to improve the accounting for the income tax consequences of intra-entity transfers of assets other than inventory by requiring an entity to recognize such consequences when the transfer occurs. Currently, recognition of current and deferred income taxes for an intra-entity transfer is prohibited until the asset has been sold to an outside party. ASU 2016-16 should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. This standard will be effective for us on January 1, 2018, with early adoption permitted. We are currently evaluating the effect of adopting this standard. Consolidation: Interests Held through Related Parties That Are under Common Control (ASU 2016-17) In October 2016, the FASB issued ASU 2016-17 to amend the consolidation guidance on how a reporting entity that is the single decision maker of a VIE should treat indirect interests in the entity held through related parties that are under common control with the reporting entity when determining whether it is the primary beneficiary of that VIE. The primary beneficiary of a VIE is the reporting entity that has a controlling financial interest in a VIE and, therefore, consolidates the VIE. A reporting entity has an indirect interest in a VIE if it has a direct interest in a related party that, in turn, has a direct interest in the VIE. We do not anticipate that our adoption of this standard on January 1, 2017 will have a material impact on our consolidated financial statements. Statement of Cash Flows: Restricted Cash (ASU 2016-18) In November 2016, the FASB issued ASU 2016-18 to clarify how changes in restricted cash are classified and presented in the statement of cash flows under ASC 230. This standard requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This standard will be effective for us on January 1, 2018, with early adoption permitted. We do not anticipate that our adoption of this standard will have a material impact on our consolidated financial statements. Technical Corrections and Improvements (ASU 2016-19) In December 2016, the FASB issued ASU 2016-19 to clarify, correct errors, and make minor improvements to FASB’s Accounting Standards Codification. This standard makes the Accounting Standards Codification easier to understand and easier to apply by eliminating inconsistencies and providing clarifications. Most of the amendments are effective immediately. Our adoption of this standard on December 14, 2016 (for amendments that were effective upon issuance) and January 1, 2017 (for amendments that require transition guidance) did not have a material impact on our consolidated financial statements. Business Combinations: Clarifying the Definition of a Business (ASU 2017-01) In January 2017, the FASB issued ASU 2017-01 to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. This standard provides a more robust framework to use in determining when a set of assets and activities is a business and also provides more consistency in applying the guidance, reduces the costs of application, and makes the definition of a business more operable. This standard will be effective for us on January 1, 2018. We do not anticipate that our adoption of this standard will have a material impact on our consolidated financial statements. |
Organization, Business Enviro38
Organization, Business Environment, Basis of Presentation and Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Property and Equipment Useful Lives | We report premises and equipment at cost and, except for land, depreciate them over their estimated useful lives on a straight-line basis as follows: Computer software 2 – 3 years Computer hardware 3 years Buildings 40 years Leasehold improvements Term of the lease not to exceed useful life Furniture and fixtures 5 years Office equipment 5 years |
Securitizations and Variable 39
Securitizations and Variable Interests Entities (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Transfers and Servicing [Abstract] | |
Summary of Cash Flows Received from and Paid to Securitization Trusts Related to Transfers Accounted for as Sales Outstanding | The following table presents a summary of cash flows received from and paid to securitization trusts related to transfers accounted for as sales that were outstanding during the years ended December 31: 2016 2015 2014 Proceeds received from securitizations $ 5,197,071 $ 4,970,454 $ 5,265,183 Servicing fees collected 14,616 29,239 25,438 Purchases of previously transferred assets, net of claims reimbursed (1,271 ) (2,863 ) 4,973 $ 5,210,416 $ 4,996,830 $ 5,295,594 |
Schedule of Carrying Amounts of Assets that Relate to Continuing Involvement with Transferred Forward Loans | The following table presents the carrying amounts of our assets that relate to our continuing involvement with forward loans that we have transferred with servicing rights retained as well as our maximum exposure to loss including the UPB of the transferred loans at December 31: 2016 2015 Carrying value of assets: Mortgage servicing rights, at amortized cost $ 94,492 $ 54,729 Mortgage servicing rights, at fair value 233 236 Advances and match funded advances 37,336 26,968 UPB of loans transferred 10,485,697 7,471,025 Maximum exposure to loss $ 10,617,758 $ 7,552,958 |
Sales of Advances and MSRs (Tab
Sales of Advances and MSRs (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Transfers and Servicing of Financial Assets [Abstract] | |
Summary of MSRs and Advances Sold | The following table provides a summary of the MSRs and advances sold during the years ended December 31: 2016 (1) 2015 (1) 2014 (2) Mortgage Servicing Rights Advances and Match Funded Advances Mortgage Servicing Rights Advances and Match Funded Advances Mortgage Servicing Rights Advances and Match Funded Advances Sales price of assets sold: Accounted for as a sale $ 29,550 $ 31,904 $ 775,351 $ 562,325 $ 287 $ 1,054 Accounted for as a financing — — — — 123,551 88,981 29,550 31,904 775,351 562,325 123,838 90,035 Amount due from purchaser at December 31 — (399 ) (18,615 ) (76,014 ) — — Amounts paid to purchaser for estimated representation and warranty obligations, compensatory fees and related indemnification obligations (1,320 ) — (69,898 ) — — — Amounts received from purchaser for items outstanding at the end of the previous year 18,814 71,512 — — — — Total net cash received $ 47,044 $ 103,017 $ 686,838 $ 486,311 $ 123,838 $ 90,035 (1) In 2016 and 2015, we sold MSRs relating to loans with a UPB of $3.7 billion (Agency and non-Agency) and $87.6 billion (Agency), respectively. (2) In 2014, we issued $123.6 million of OASIS Series 2014-1 Notes secured by Ocwen-owned MSRs relating to Freddie Mac mortgages of $11.8 billion UPB. |
Fair Value (Tables)
Fair Value (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Schedule of Carrying Amounts and Estimated Fair Values of Financial Instruments and Nonfinancial Assets Measured at Fair Value on a Recurring or Non-recurring basis or Disclosed, but not Carried, at Fair Value | The carrying amounts and the estimated fair values of our financial instruments and certain of our nonfinancial assets measured at fair value on a recurring or non-recurring basis or disclosed, but not carried, at fair value are as follows at December 31: 2016 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 $ 284,632 $ 284,632 $ 309,054 $ 309,054 Loans held for sale, at lower of cost or fair value (b) 3 29,374 29,374 104,992 104,992 Total Loans held for sale $ 314,006 $ 314,006 $ 414,046 $ 414,046 Loans held for investment - Reverse mortgages, at fair value (a) 3 $ 3,565,716 $ 3,565,716 $ 2,488,253 $ 2,488,253 Advances and match funded advances (c) 3 1,709,846 1,709,846 2,151,066 2,151,066 Receivables, net (c) 3 265,720 265,720 286,981 286,981 Mortgage-backed securities, at fair value (a) 3 8,342 8,342 7,985 7,985 U.S. Treasury notes (a) 1 2,078 2,078 — — Financial liabilities: Match funded liabilities (c) 3 $ 1,280,997 $ 1,275,059 $ 1,584,049 $ 1,581,786 Financing liabilities: HMBS-related borrowings, at fair value (a) 3 $ 3,433,781 $ 3,433,781 $ 2,391,362 $ 2,391,362 Financing liability - MSRs pledged (a) 3 477,707 477,707 541,704 541,704 Other (c) 3 101,324 81,805 156,189 131,940 Total Financing liabilities $ 4,012,812 $ 3,993,293 $ 3,089,255 $ 3,065,006 Other secured borrowings: Senior secured term loan (c) (d) 2 $ 323,514 $ 327,674 $ 377,091 $ 397,956 Other (c) 3 355,029 355,029 385,320 385,320 Total Other secured borrowings $ 678,543 $ 682,703 $ 762,411 $ 783,276 Senior notes: Senior unsecured notes (c) (d) 2 $ 3,094 $ 3,048 $ 345,511 $ 318,063 Senior secured notes (c) (d) 2 343,695 352,255 — — Total Senior notes $ 346,789 $ 355,303 $ 345,511 $ 318,063 Derivative financial instruments assets (liabilities) (a): Interest rate lock commitments 2 $ 6,507 $ 6,507 $ 6,080 $ 6,080 Forward mortgage-backed securities trades 1 (614 ) (614 ) 295 295 Interest rate caps 3 1,836 1,836 2,042 2,042 Mortgage servicing rights: Mortgage servicing rights, at fair value (a) 3 $ 679,256 $ 679,256 $ 761,190 $ 761,190 Mortgage servicing rights, at amortized cost (c) (e) 3 363,722 467,911 377,379 461,555 Total Mortgage servicing rights $ 1,042,978 $ 1,147,167 $ 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 13 — Borrowings for additional information . (e) Balances include our impaired government-insured stratum of amortization method MSRs, which is measured at fair value on a non-recurring basis and reported net of the valuation allowance. Before applying the valuation allowance of $28.2 million , the carrying value of the impaired stratum at December 31, 2016 was $172.9 million . At December 31, 2015 , the carrying value of this stratum was $146.5 million before applying the valuation allowance of $17.3 million . |
Summary of Reconciliation of the Changes in Fair Value of Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following tables present a reconciliation of the changes in fair value of Level 3 assets and liabilities that we measure at fair value on a recurring basis: Loans Held for Investment - Reverse Mortgages HMBS-Related Borrowings Mortgage-Backed Securities Financing Liability - MSRs Pledged (1) Derivatives MSRs Total Year Ended December 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 — — — — 1,337 — 1,337 Issuances 1,107,046 (1,086,795 ) — — — (1,548 ) 18,703 Sales — — — — — (148 ) (148 ) Settlements (2) (243,596 ) 230,045 — 63,997 (156 ) — 50,290 863,450 (856,750 ) — 63,997 1,181 (1,696 ) 70,182 Total realized and unrealized gains and (losses) (3): Included in earnings 214,013 (185,669 ) 357 — (1,387 ) (80,238 ) (52,924 ) Included in Other comprehensive income — — — — — — — 214,013 (185,669 ) 357 — (1,387 ) (80,238 ) (52,924 ) Transfers in and / or out of Level 3 — — — — — — — Ending balance $ 3,565,716 $ (3,433,781 ) $ 8,342 $ (477,707 ) $ 1,836 $ 679,256 $ 343,662 Loans Held for Investment - Reverse Mortgages HMBS-Related Borrowings Mortgage-Backed Securities Financing Liability - MSRs Pledged (1) Derivatives MSRs Total Year Ended December 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 — — — — 2,506 1,007 3,513 Issuances 1,008,065 (1,024,361 ) — — — (2,428 ) (18,724 ) Transfer from MSRs carried at amortized cost — — — — — 839,157 839,157 Sales — — — — — (72,274 ) (72,274 ) Settlements (2) (151,134 ) 153,016 — 72,737 346 — 74,965 856,931 (871,345 ) — 72,737 2,852 765,462 826,637 Total realized and unrealized gains and (losses) (3): Included in earnings 81,181 (75,765 ) 650 — (1,377 ) (98,173 ) (93,484 ) Included in Other comprehensive income — — — — — — — 81,181 (75,765 ) 650 — (1,377 ) (98,173 ) (93,484 ) Transfers in and / or out of Level 3 — — — — — — Ending balance $ 2,488,253 $ (2,391,362 ) $ 7,985 $ (541,704 ) $ 2,042 $ 761,190 $ 326,404 Loans Held for Investment - Reverse Mortgages HMBS-Related Borrowings Mortgage-Backed Securities Financing Liability - MSRs Pledged (1) Derivatives MSRs Total Year Ended December 31, 2014 Beginning balance $ 618,018 $ (615,576 ) $ — $ (633,804 ) $ 442 $ 116,029 $ (514,891 ) Purchases, issuances, sales and settlements: Purchases — — 7,677 — 787 — 8,464 Issuances 816,881 (783,009 ) — — — — 33,872 Transfers from Loans held for sale, at fair value 110,874 — — — — — 110,874 Sales — — — — — — — Settlements (2) (99,923 ) 47,077 — 19,363 — — (33,483 ) 827,832 (735,932 ) 7,677 19,363 787 — 119,727 Total realized and unrealized gains and (losses): Included in earnings 104,291 (92,744 ) (342 ) — (662 ) (22,128 ) (11,585 ) Included in Other comprehensive income — — — — — — — 104,291 (92,744 ) (342 ) — (662 ) (22,128 ) (11,585 ) Transfers in and / or out of Level 3 — — — — — — — Ending balance $ 1,550,141 $ (1,444,252 ) $ 7,335 $ (614,441 ) $ 567 $ 93,901 $ (406,749 ) (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 2015 and 2014 include $2.2 million and $2.0 million , respectively, of such reimbursements. There were no such payments in 2016. (2) Settlements for Loans held for investment - reverse mortgages consist chiefly of principal payments received but also may include non-cash settlements of loans. (3) Total gains (losses) attributable to derivative financial instruments still held at December 31, 2016 and 2015 were $0.3 million and $(1.0) million for 2016 and 2015 , respectively. Total losses for 2016 and 2015 attributable to MSRs still held at December 31, 2016 and 2015 were $78.3 million and $90.3 million , respectively. |
Loans Held for Investment [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 included in the valuations consisted of the following at December 31: 2016 2015 Life in years Range 5.53 to 8.67 6.11 to 9.70 Weighted average 6.05 6.49 Conditional repayment rate Range 5.23% to 53.75% 4.96% to 53.75% Weighted average 20.91 % 19.85 % Discount rate 3.32 % 3.36 % |
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 | 2016 2015 Weighted average prepayment speed 8.90 % 11.34 % Weighted average delinquency rate 11.08 % 13.27 % Advance financing cost 5-year swap 5-year swap Interest rate for computing float earnings 5-year swap 5-year swap Weighted average discount rate 8.90 % 9.41 % Weighted average cost to service (in dollars) $ 108 $ 92 |
Fair Value Mortgage Servicing Rights [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Schedule of Significant Assumptions used in Valuation | The primary assumptions used in the valuations consisted of the following at December 31: 2016 2015 Agency Non-Agency Agency Non-Agency Weighted average prepayment speed 8.36 % 16.47 % 9.91 % 16.83 % Weighted average delinquency rate 0.99 % 29.32 % 0.82 % 27.99 % Advance financing cost 5-year swap 1-Month LIBOR (1ML) plus 3.5% 5-year swap 1-Month LIBOR (1ML) plus 3.5% Interest rate for computing float earnings 5-year swap 1ML 5-year swap 1ML Weighted average discount rate 9.00 % 14.93 % 9.00 % 15.03 % Weighted average cost to service (in dollars) $ 64 $ 307 $ 71 $ 321 |
HMBS - Related Borrowings [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 valuations consisted of the following at December 31: 2016 2015 Life in years Range 4.50 to 8.67 4.73 to 9.70 Weighted average 5.09 5.39 Conditional repayment rate Range 5.23 % to 53.75% 4.96% to 53.75% Weighted average 20.91 % 19.85 % Discount rate 2.70 % 2.78 % |
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 prices of the underlying MSRs consisted of the following at December 31: 2016 2015 Weighted average prepayment speed 16.96 % 17.43 % Weighted average delinquency rate 29.80 % 29.83 % Advance financing cost 1ML plus 3.5% 1 ML plus 3.5% Interest rate for computing float earnings 1ML 1ML Weighted average discount rate 14.85 % 14.92 % Weighted average cost to service (in dollars) $ 313 $ 326 |
Loans Held for Sale (Tables)
Loans Held for Sale (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Receivables [Abstract] | |
Summary of Changes in Valuation Allowance of Loans Held for Sale | The change in the valuation allowance during the years ended December 31 is as follows: 2016 2015 2014 Beginning balance $ 14,658 $ 49,676 $ 30,711 Provision 3,599 (400 ) (1,301 ) Transfer from liability for indemnification obligations 2,368 1,180 20,441 Sales of loans (10,208 ) (37,776 ) (7,614 ) Other (353 ) 1,978 7,439 Ending balance $ 10,064 $ 14,658 $ 49,676 |
Summary of Activity in Balance of Loans Held for Sale, at Fair Value | The following table summarizes the activity in the balance during the years ended December 31: 2016 2015 2014 Beginning balance $ 309,054 $ 401,120 $ 503,753 Originations and purchases 4,211,871 3,944,509 4,967,767 Proceeds from sales (4,236,158 ) (4,061,217 ) (5,001,935 ) Principal collections (11,620 ) (8,647 ) (13,300 ) Transfers to loans held for investment - reverse mortgages — — (110,874 ) Transfers from loans held for sale at lower of cost or fair value 3,266 1,200 — Gain on sale of loans 13,421 42,053 49,533 Increase (decrease) in fair value of loans (7,030 ) (9,066 ) 6,198 Other 1,828 (898 ) (22 ) Ending balance (1) $ 284,632 $ 309,054 $ 401,120 (1) At December 31, 2016 , 2015 and 2014 , the balances include $4.9 million , $11.9 million and $21.0 million , respectively, of fair value adjustments. |
Summary of Activity in Balance of Loans Held for Sale, at Lower of Cost or Fair Value | The following table summarizes the activity in the net balance during the years ended December 31: 2016 2015 2014 Beginning balance $ 104,992 $ 87,492 $ 62,907 Purchases 1,878,561 1,056,172 2,462,573 Proceeds from sales (1,699,427 ) (1,001,939 ) (2,067,965 ) Principal collections (22,607 ) (53,400 ) (262,196 ) Transfers to accounts receivable (256,336 ) (53,468 ) (114,675 ) Transfers to real estate owned (7,675 ) (18,594 ) (8,808 ) Transfers to loans held for sale at fair value (3,266 ) (1,200 ) — Gain on sale of loans 24,565 43,449 31,853 Decrease (increase) in valuation allowance 4,594 35,018 (18,965 ) Other 5,973 11,462 2,768 Ending balance (1) $ 29,374 $ 104,992 $ 87,492 (1) At December 31, 2016 , 2015 and 2014 , the balances include $24.8 million , $85.9 million and $42.0 million , respectively, of loans that we were required to repurchase from Ginnie Mae guaranteed securitizations as part of our servicing obligations. Repurchased loans are modified or otherwise remediated through loss mitigation activities or are reclassified to receivables. |
Summary of Activity in Gain on Loans Held for Sale, Net | The following table summarizes the activity in Gain on loans held for sale, net, during the years ended December 31: 2016 2015 2014 Gain on sales of loans, net $ 93,308 $ 152,970 $ 168,449 Change in fair value of IRLCs (55 ) 14 (25,822 ) Change in fair value of loans held for sale 4,595 (8,525 ) 10,489 Loss on economic hedge instruments (6,592 ) (8,675 ) (17,214 ) Other (865 ) (815 ) (1,605 ) $ 90,391 $ 134,969 $ 134,297 |
Advances (Tables)
Advances (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Advances [Abstract] | |
Schedule of Advance Payments by Financial Institution on Foreclosed Properties | Advances, net, which represent payments made on behalf of borrowers or on foreclosed properties, consisted of the following at December 31: 2016 2015 Principal and interest $ 31,334 $ 81,681 Taxes and insurance 170,131 278,487 Foreclosures, bankruptcy and other 94,369 126,031 295,834 486,199 Allowance for losses (37,952 ) (41,901 ) $ 257,882 $ 444,298 |
Schedule of Activity in Advances | The following table summarizes the activity in net advances for the years ended December 31: 2016 2015 2014 Beginning balance $ 444,298 $ 893,914 $ 890,832 Acquisitions (1) — — 99,319 Transfers to match funded advances — — (10,156 ) Sales of advances (2) (24,631 ) (253,335 ) — Collections of advances, charge-offs and other, net (165,734 ) (224,414 ) (54,424 ) Decrease (increase) in allowance for losses 3,949 28,133 (31,657 ) Ending balance $ 257,882 $ 444,298 $ 893,914 (1) Servicing advances acquired primarily in connection with the acquisition of MSRs. Acquisitions in 2014 include advances acquired in connection with the purchase of loans through the Ginnie Mae EBO program. (2) Servicing advances sold primarily in connection with sales of MSRs which met the requirements for sale accounting and which were derecognized from our financial statements at the time of the sale. However, advances sold during 2014 in connection with the sale of loans purchased through the Ginnie Mae EBO program did not qualify as sales for accounting purposes and were accounted for as a financing. |
Schedule of Change in Allowance for Losses | The change in the allowance for losses for the years ended December 31 is as follows: 2016 2015 2014 Beginning balance $ 41,901 $ 70,034 $ 38,377 Provision (2,043 ) 61,445 83,164 Recoveries (charge-offs), net and other (1,906 ) (89,578 ) (51,507 ) Ending balance $ 37,952 $ 41,901 $ 70,034 |
Match Funded Advances (Tables)
Match Funded Advances (Tables) | 12 Months Ended |
Dec. 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 December 31: 2016 2015 Principal and interest $ 711,272 $ 948,376 Taxes and insurance 530,946 608,404 Foreclosures, bankruptcy, real estate and other 209,746 149,988 $ 1,451,964 $ 1,706,768 |
Schedule of Activity In Match Funded Advances | The following table summarizes the activity in match funded advances for the years ended December 31: 2016 2015 2014 Beginning balance $ 1,706,768 $ 2,409,442 $ 2,552,383 Acquisitions (1) — — 85,521 Transfers from advances (2) — — 10,156 Sales of advances (8,923 ) (308,990 ) — Collections of pledged advances, net (245,881 ) (393,684 ) (238,618 ) Ending balance $ 1,451,964 $ 1,706,768 $ 2,409,442 (1) Servicing advances acquired primarily in connection with the acquisition of MSRs that were pledged to advance facilities at the date of acquisition. (2) New servicing advances initially classified as Advances at the date of payment and subsequently pledged to advance financing facilities. |
Mortgage Servicing (Tables)
Mortgage Servicing (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Transfers and Servicing [Abstract] | |
Summary of Activity in Carrying Value of Amortization Method Servicing Assets | The following table summarizes changes in the net carrying value of servicing assets that we account for using the amortization method for the years ended December 31. 2016 2015 2014 Beginning balance $ 377,379 $ 1,820,091 $ 1,953,352 Fair value election - transfer to MSRs carried at fair value (1) — (787,142 ) — Additions recognized in connection with business acquisitions (2) (3) — — 20,378 Additions recognized in connection with asset acquisitions 17,356 12,356 35,326 Additions recognized on the sale of mortgage loans 37,231 34,961 63,310 Sales (24,452 ) (586,352 ) (137 ) Servicing transfers and adjustments — — (1,763 ) 407,514 493,914 2,070,466 Increase in impairment valuation allowance (4) (10,813 ) (17,341 ) — Amortization (32,979 ) (99,194 ) (250,375 ) Ending balance $ 363,722 $ 377,379 $ 1,820,091 Estimated fair value at end of year $ 467,911 $ 461,555 $ 2,237,703 (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) As of the February 15, 2013 acquisition date, the purchase of certain MSRs from Residential Capital, LLC (ResCap) was not complete pending the receipt of certain consents and court approvals. Subsequent to the acquisition, we obtained the required consents and approvals for a portion of these MSRs and, in 2014, paid an additional purchase price of $54.2 million , which included $11.4 million to acquire the MSRs and $39.2 million to acquire the related advances. We recorded a contingent asset effective as of the ResCap acquisition date. (3) On January 31, 2014, we increased our ownership in Ocwen Structured Investments, LLC (OSI) from 26.00% to 87.35% . The acquired net assets were $20.0 million and consisted primarily of MSRs ( $9.0 million ), mortgage-backed securities ( $7.7 million ) and cash ( $3.2 million ). (4) Impairment of MSRs is recognized in Servicing and origination expense in the consolidated statements of operations. |
Schedule of Estimated Amortization Expense for MSRs | The estimated amortization expense for MSRs, calculated based on assumptions used at December 31, 2016 , is projected as follows over the next five years: 2017 $ 45,960 2018 37,158 2019 35,264 2020 35,832 2021 33,134 |
Summary of Activity Related to Fair Value Servicing Assets | The following table summarizes changes in the fair value of servicing assets that we account for at fair value on a recurring basis for the years ended December 31: 2016 2015 2014 Agency Non-Agency Total Agency Non-Agency Total Agency Beginning balance $ 15,071 $ 746,119 $ 761,190 $ 93,901 $ — $ 93,901 $ 116,029 Fair value election - transfer from MSRs carried at amortized cost — — — — 787,142 787,142 — Cumulative effect of fair value election — — — — 52,015 52,015 — Sales (3 ) (145 ) (148 ) (70,930 ) (1,344 ) (72,274 ) — Additions recognized on the sale of residential mortgage loans — — — — 1,007 1,007 — Servicing transfers and adjustments — (1,548 ) (1,548 ) — (2,428 ) (2,428 ) — Changes in fair value (1): — Changes in valuation inputs or other assumptions 305 — 305 (639 ) 10,684 10,045 (15,028 ) Realization of expected future cash flows and other changes (2,016 ) (78,527 ) (80,543 ) (7,261 ) (100,957 ) (108,218 ) (7,100 ) Ending balance $ 13,357 $ 665,899 $ 679,256 $ 15,071 $ 746,119 $ 761,190 $ 93,901 (1) Changes in fair value are recognized in Servicing and origination expense in the consolidated statements of operations. |
Summary of Estimated Change in the Value of MSRs Carried at Fair Value | The following table summarizes the estimated change in the value of the MSRs that we carry at fair value as of December 31, 2016 given hypothetical shifts in lifetime prepayments and yield assumptions: Adverse change in fair value 10% 20% Weighted average prepayment speeds $ (64,604 ) $ (131,414 ) Discount rate (option-adjusted spread) $ (19,043 ) $ (34,224 ) |
Schedule of Composition of Primary Servicing and Subservicing Portfolios by Type of Property Serviced as Measured by UPB | The following table presents the composition of our primary servicing and subservicing portfolios by type of property serviced as measured by UPB. The servicing portfolio represents loans for which we own the servicing rights while subservicing represents all other loans. The UPB of assets serviced for others are not included on our consolidated balance sheets. Residential Commercial Total UPB at December 31, 2016 Servicing $ 86,049,298 $ — $ 86,049,298 Subservicing 4,330,084 92,933 4,423,017 NRZ (1) 118,712,748 — 118,712,748 $ 209,092,130 $ 92,933 $ 209,185,063 UPB at December 31, 2015 Servicing $ 100,058,745 $ — $ 100,058,745 Subservicing 13,764,558 105,268 13,869,826 NRZ (1) 137,142,809 — 137,142,809 $ 250,966,112 $ 105,268 $ 251,071,380 UPB at December 31, 2014 Servicing $ 208,135,523 $ — $ 208,135,523 Subservicing 29,806,924 149,737 29,956,661 NRZ (1) 160,785,280 — 160,785,280 $ 398,727,727 $ 149,737 $ 398,877,464 (1) UPB of loans serviced for which the Rights to MSRs have been sold to NRZ. |
Summary of Geographic Distributions of UPB and Count of Residential Loans and Real Estate Serviced | At December 31, 2016 , the geographic distribution of the UPB and count of residential loans and real estate we serviced was as follows: Amount Count California $ 48,094,471 191,031 New York 18,741,164 79,197 Florida 17,282,020 126,949 New Jersey 10,254,163 49,857 Texas 9,522,228 109,763 Other 105,198,084 836,969 $ 209,092,130 1,393,766 |
Schedule of Components of Servicing and Subservicing Fees | The following table presents the components of servicing and subservicing fees for the years ended December 31: 2016 2015 2014 Loan servicing and subservicing fees: Servicing $ 293,210 $ 453,445 $ 627,678 Subservicing 21,427 58,384 128,797 NRZ 633,545 694,833 736,122 948,182 1,206,662 1,492,597 Home Affordable Modification Program (HAMP) fees 110,367 135,036 141,121 Late charges 66,709 82,690 121,618 Loan collection fees 27,213 31,763 33,983 Custodial accounts (float earnings) 8,969 15,870 6,693 Other 25,180 59,776 98,163 $ 1,186,620 $ 1,531,797 $ 1,894,175 |
Receivables (Tables)
Receivables (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Receivables [Abstract] | |
Schedule of Receivables | Receivables consisted of the following at December 31: 2016 2015 Servicing-related receivables: Government-insured loan claims (1) $ 133,063 $ 71,405 Due from custodial accounts 44,761 13,800 Reimbursable expenses 29,358 29,856 Amount due on sales of mortgage servicing rights and advances 2,871 94,629 Other 46,052 32,879 256,105 242,569 Income taxes receivable 61,932 53,519 Other receivables 21,125 29,818 339,162 325,906 Allowance for losses (1) (73,442 ) (38,925 ) $ 265,720 $ 286,981 (1) At December 31, 2016 and 2015 , the allowance for losses related entirely to receivables of our Servicing business. Allowance for losses related to defaulted FHA or VA insured loans repurchased from Ginnie Mae guaranteed securitizations (government-insured loan claims) at December 31, 2016 and 2015 were $53.3 million and $20.6 million , respectively. |
Premises and Equipment (Tables)
Premises and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Premises and Equipment | Premises and equipment are summarized as follows at December 31: 2016 2015 Computer software $ 58,322 $ 45,411 Computer hardware 35,192 22,817 Leasehold improvements 25,975 23,326 Office equipment and other 12,114 11,761 Buildings 9,689 9,689 Furniture and fixtures 6,825 5,839 148,117 118,843 Less accumulated depreciation and amortization (85,373 ) (61,217 ) $ 62,744 $ 57,626 |
Other Assets (Tables)
Other Assets (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Other Assets [Abstract] | |
Schedule of Other Assets | Other assets consisted of the following at December 31: 2016 2015 Contingent loan repurchase asset (1) $ 246,081 $ 346,984 Prepaid expenses (2) 57,188 69,805 Debt service accounts (3) 42,822 87,328 Automotive dealer financing notes, net (4) 33,224 2,538 Derivatives, at fair value 9,279 6,367 Prepaid lender fees, net (5) 9,023 19,496 Prepaid income taxes (6) 8,392 11,749 Mortgage-backed securities, at fair value 8,342 7,985 Real estate 5,249 20,489 Other 15,772 13,754 $ 435,372 $ 586,495 (1) In connection with the Ginnie Mae EBO program, our agreements provide either that: (a) we have the right, but not the obligation, to repurchase previously transferred mortgage loans under certain conditions, including the mortgage loans becoming eligible for pooling under a program sponsored by Ginnie Mae; or (b) we have the obligation to repurchase previously transferred mortgage loans that have been subject to a successful trial modification before any permanent modification is made. Once these conditions are met, we have effectively regained control over the mortgage loan(s), and under GAAP, must re-recognize the loans on our consolidated balance sheets and establish a corresponding repurchase liability. With respect to those loans that we have the right, but not the obligation, to repurchase under the applicable agreement, this requirement applies regardless of whether we have any intention to repurchase the loan. We re-recognize the 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 December 31, 2016 and 2015 includes the remaining balance of $34.9 million and $41.3 million , respectively. (3) Under our advance 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. (4) These notes represent short-term inventory-secured floor plan loans provided to independent used car dealerships through our ACS venture. Automotive dealer financing notes are net of an allowance of $4.4 million and $0.03 million at December 31, 2016 and 2015 , respectively. We recognized a provision for losses on these notes of $4.3 million in 2016. (5) We amortize these costs to the earlier of the scheduled amortization date, contractual maturity date or prepayment date of the debt. (6) The deferred tax effects of intra-entity transfers of MSRs have been recognized as prepaid income taxes and are presently being amortized to Income tax expense over 7 -year periods through 2021. |
Borrowings (Tables)
Borrowings (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Instrument, Redemption [Line Items] | |
Schedule of Match Funded Liabilities | Match funded liabilities are comprised of the following at December 31: Borrowing Type Interest Rate Maturity (1) Amortization Date (1) Available Borrowing Capacity (2) 2016 2015 Advance Receivables Backed Notes, Series 2014-VF3, 1ML (3) + 185 bps Aug. 2047 Aug. 2017 $ 53,287 $ 59,892 $ 132,651 Advance Receivables Backed Notes - Series 2014-VF3, 1ML + 250 bps Aug. 2047 Aug. 2017 2,458 2,879 6,330 Advance Receivables Backed Notes - Series 2014-VF3, 1ML + 380 bps Aug. 2047 Aug. 2017 2,716 3,189 6,977 Advance Receivables Backed Notes - Series 2014-VF3, 1ML + 545 bps Aug. 2047 Aug. 2017 7,145 8,434 18,427 Advance Receivables Backed Notes - Series 2014-VF4, 1ML + 185 bps Aug. 2047 Aug. 2017 53,287 59,892 132,651 Advance Receivables Backed Notes - Series 2014-VF4, 1ML + 250 bps Aug. 2047 Aug. 2017 2,458 2,879 6,330 Advance Receivables Backed Notes - Series 2014-VF4, 1ML + 380 bps Aug. 2047 Aug. 2017 2,716 3,189 6,977 Advance Receivables Backed Notes - Series 2014-VF4, 1ML + 545 bps Aug. 2047 Aug. 2017 7,145 8,434 18,427 Advance Receivables Backed Notes - Series 2015-VF5, 1ML + 185 bps Aug. 2047 Aug. 2017 53,287 59,892 132,652 Advance Receivables Backed Notes - Series 2015-VF5, 1ML + 250 bps Aug. 2047 Aug. 2017 2,458 2,879 6,330 Advance Receivables Backed Notes - Series 2015-VF5, 1ML + 380 bps Aug. 2047 Aug. 2017 2,716 3,189 6,977 Borrowing Type Interest Rate Maturity (1) Amortization Date (1) Available Borrowing Capacity (2) 2016 2015 Advance Receivables Backed Notes - Series 2015-VF5, 1ML + 545 bps Aug. 2047 Aug. 2017 7,145 8,434 18,427 Advance Receivables Backed Notes - Series 2015-T1, 2.5365% Sep. 2046 Sep. 2016 — — 244,809 Advance Receivables Backed Notes - Series 2015-T1, 3.0307% Sep. 2046 Sep. 2016 — — 10,930 Advance Receivables Backed Notes - Series 2015-T1, 3.5240% Sep. 2046 Sep. 2016 — — 12,011 Advance Receivables Backed Notes - Series 2015-T1, 4.1000% Sep. 2046 Sep. 2016 — — 32,250 Advance Receivables Backed Notes - Series 2015-T2, 2.5320% Nov. 2046 Nov. 2016 — — 161,973 Advance Receivables Backed Notes - Series 2015-T2, 3.3720% Nov. 2046 Nov. 2016 — — 7,098 Advance Receivables Backed Notes - Series 2015-T2, 3.7660% Nov. 2046 Nov. 2016 — — 8,113 Advance Receivables Backed Notes - Series 2015-T2, 4.2580% Nov. 2046 Nov. 2016 — — 22,816 Advance Receivables Backed Notes - Series 2015-T3, 3.2110% Nov. 2047 Nov. 2017 — 310,195 310,195 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 Advance Receivables Backed Notes - Series 2016-T1, 2.5207% Aug. 2048 Aug. 2018 — 216,700 — Advance Receivables Backed Notes - Series 2016-T1, 3.0643% Aug. 2048 Aug. 2018 — 9,000 — Advance Receivables Backed Notes - Series 2016-T1, 3.6067% Aug. 2048 Aug. 2018 — 10,800 — Advance Receivables Backed Notes - Series 2016-T1, 4.2462% Aug. 2048 Aug. 2018 — 28,500 — Advance Receivables Backed Notes - Series 2016-T2, 2.7215% Aug. 2049 Aug. 2019 — 188,300 — Advance Receivables Backed Notes - Series 2016-T2, 3.2647% Aug. 2049 Aug. 2019 — 8,500 — Borrowing Type Interest Rate Maturity (1) Amortization Date (1) Available Borrowing Capacity (2) 2016 2015 Advance Receivables Backed Notes - Series 2016-T2, 3.8066% Aug. 2049 Aug. 2019 — 10,300 — Advance Receivables Backed Notes - Series 2016-T2, 4.4456% Aug. 2049 Aug. 2019 — 27,900 — Total Ocwen Master Advance Receivables Trust (OMART) 196,818 1,123,182 1,393,156 Advance Receivables Backed Notes, Series 2014-VF1, Cost of Funds + 230 bps Dec. 2047 Dec. 2017 8,171 43,229 31,343 Advance Receivables Backed Notes, Series 2014-VF1, Cost of Funds + 360 bps Dec. 2047 Dec. 2017 597 3,403 4,157 Advance Receivables Backed Notes, Series 2014-VF1, Cost of Funds + 410 bps Dec. 2047 Dec. 2017 879 4,421 4,564 Advance Receivables Backed Notes, Series 2014-VF1, Cost of Funds + 470 bps Dec. 2047 Dec. 2017 2,260 12,040 11,351 Total Ocwen Servicer Advance Receivables Trust III (OSART III) (6) 11,907 63,093 51,415 Advance Receivables Backed Notes, Series 2015-VF1, Class A 1ML + 240 bps Jun. 2047 Jun. 2017 44,395 74,605 112,882 Advance Receivables Backed Notes, Series 2015-VF1, Class B 1ML + 340 bps Jun. 2047 Jun. 2017 8,091 7,909 12,268 Advance Receivables Backed Notes, Series 2015-VF1, Class C 1ML + 400 bps Jun. 2047 Jun. 2017 3,594 3,406 5,951 Advance Receivables Backed Notes, Series 2015-VF1, Class D 1ML + 480 bps Jun. 2047 Jun. 2017 9,198 8,802 8,377 Total Ocwen Freddie Advance Funding (OFAF) (7) 65,278 94,722 139,478 $ 274,003 $ 1,280,997 $ 1,584,049 Weighted average interest rate 3.21 % 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 December 31, 2016 , none of the available borrowing capacity could be used based on the amount of eligible collateral that had been pledged. (3) 1ML was 0.77% and 0.43% at December 31, 2016 and 2015 , respectively. (4) On August 12, 2016, the supplemental indentures for the OMART facility variable funding notes were amended to reduce the borrowing capacity of each series from $200.0 million to $140.0 million or a total decrease in borrowing capacity of $180.0 million . There is a ceiling of 75 bps for 1ML 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-T3 Notes and the Series 2016-T1 and T2 Notes until the amortization date. If there is insufficient collateral to support the level of borrowing, the excess cash proceeds are not distributed to Ocwen but are held by the trustee, and interest expense continues to be based on the full amount of the term notes. On August 12, 2016, we issued the Series 2016-T1 and 2016-T2 Notes with a total borrowing capacity of $500.0 million . The proceeds from these notes were used to prepay at par the $500.0 million of Series 2015-T1 and 2015-T2 notes that were outstanding. (6) On December 15, 2016, we extended the term of this facility for an additional year and reduced the maximum borrowing capacity under the facility from $90.0 million to $75.0 million . There is a ceiling of 75 bps for 1ML in determining the interest rate for these variable rate notes. (7) On March 31, 2016, the combined borrowing capacity of the Series 2015-VF1 Notes was increased to $160.0 million . On June 10, 2016, the term of this facility was extended for an additional year. There is a ceiling of 125 bps for 1ML in determining the interest rate for these notes. |
Schedule of Financing Liabilities | Financing liabilities are comprised of the following at December 31: Borrowings Collateral Interest Rate Maturity 2016 2015 Financing liability – MSRs pledged MSRs (1) (1) $ 477,707 $ 541,704 Secured Notes, Ocwen Asset Servicing Income Series, Series 2014-1 (2) MSRs (2) Feb. 2028 81,131 96,546 Financing liability – Advances pledged (3) Advances on loans (3) (3) 20,193 59,643 HMBS-related borrowings (4) Loans held for investment 1ML + 260 bps (4) 3,433,781 2,391,362 $ 4,012,812 $ 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. 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. This financing liability has no contractual maturity. (4) Represents amounts due to the holders of beneficial interests in Ginnie Mae guaranteed HMBS. The beneficial interests have no maturity dates, and the borrowings mature as the related loans are repaid. |
Schedule of Other Secured Borrowings | Other secured borrowings are comprised of the following at December 31: Borrowings Collateral Interest Rate Maturity Available Borrowing Capacity (1) 2016 2015 Senior secured term loan (SSTL): SSTL (2) (2) 1-Month Euro-dollar rate + 425 bps with a Eurodollar floor of 125 bps Feb. 2018 $ — $ — $ 398,454 SSTL (2) (2) 1-Month Euro-dollar rate + 500 bps with a Eurodollar floor of 100 bps (2) Dec. 2020 — 335,000 — — 335,000 398,454 Mortgage loan warehouse facilities: Repurchase agreement (3) Loans held for sale (LHFS) 1ML + 200 - 345 bps Sep. 2017 37,630 12,370 42,973 Master repurchase agreement (4) LHFS 1ML + 200 bps; 1ML floor of 0.0% Jan. 2017 (4) 26,457 173,543 156,226 Participation agreement (5) LHFS N/A Apr. 2017 (5) — 44,413 49,897 Participation agreement (5) LHFS N/A Apr. 2017 (5) — 48,326 73,049 Mortgage warehouse agreement (6) LHFS (reverse mortgages) 1ML + 275 bps; 1ML floor of 300 or 350 bps Aug. 2017 — 26,254 63,175 Master repurchase agreement (7) LHFS (reverse mortgages) 1ML + 275 bps; 1ML floor of 25 bps Jan. 2018 49,877 50,123 — 113,964 355,029 385,320 $ 113,964 690,029 783,774 Unamortized debt issuance costs - SSTL (7,612 ) (20,012 ) Discount - SSTL (3,874 ) (1,351 ) $ 678,543 $ 762,411 Weighted average interest rate 4.56 % 4.38 % (1) For our mortgage loan warehouse facilities, available borrowing capacity does not consider the amount of the facility that the lender has extended on an uncommitted basis. (2) On December 5, 2016, we entered into an Amended and Restated Senior Secured Term Loan Facility Agreement (the Amended and Restated Agreement). The Amended and Restated Agreement establishes a new SSTL with a borrowing capacity of $335.0 million and a maturity date of December 5, 2020 . We used the proceeds of the new SSTL to repay our obligations under the prior SSTL and to pay certain fees and expenses of the transaction. We may request increases to the loan amount of up to $100.0 million , with additional increases subject to certain limitations. We are required to make quarterly payments on the SSTL in an amount of $4.2 million commencing on March 31, 2017. The borrowings under the SSTL are secured by a first priority security interest in substantially all of the assets of Ocwen, OLS and the other guarantors thereunder, excluding among other things, 35% of the capital stock of foreign subsidiaries, securitization assets and equity interests of securitization entities, assets securing permitted funding indebtedness and non-recourse indebtedness, REO assets, servicing agreements where an acknowledgment from the GSE has not been obtained, as well as other customary carve-outs. 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 (1ML) ), plus a margin of 4.00% and subject to a base rate floor of 2.00% or (b) the one month Eurodollar rate , plus a margin of 5.00% and subject to a one month Eurodollar floor of 1.00% . To date we have elected option (b) to determine the interest rate. The amended and restated agreement includes covenants that are substantially similar to the prior senior secured term loan, including the requirement that Ocwen maintain a loan-to-value ratio at a 40% level as of the last date of any fiscal quarter throughout the term of the SSTL. (3) Fifty percent of the maximum borrowing amount of $100.0 million is available on a committed basis and fifty percent is available at the discretion of the lender. On September 29, 2016, we renewed this facility through September 28, 2017 with no change in interest rates or maximum borrowing capacity. We use this facility to fund the repurchase of 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. (4) Under this repurchase agreement, the lender provides financing on a committed basis for $200.0 million . On November 28, 2016, we extended the term of this agreement to January 31, 2017 with no change in rates or maximum borrowing capacity, although a LIBOR floor of 0.0% was added to the terms of the facility effective September 30, 2016. On January 31, 2017, the term of this agreement was further extended to February 28, 2017. (5) Under these participation agreements, the lender provides financing for a combined total of $250.0 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 26, 2016, the term of these agreements was extended to April 30, 2017. (6) Under this participation agreement, the lender provides financing for $110.0 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 August 17, 2016, the term of this agreement was extended to August 17, 2017. (7) We entered into this agreement on January 5, 2016. The lender provides financing on a committed basis for $100.0 million . On December 23, 2016, the term of this agreement was extended to January 2, 2018. The other terms remained unchanged. |
Schedule of Senior Notes | Senior notes, net are comprised of the following at December 31: 2016 2015 6.625% Senior unsecured notes $ 3,122 $ 350,000 8.375% Senior secured notes 346,878 — 350,000 $ 350,000 Unamortized debt issuance costs (3,211 ) (4,489 ) $ 346,789 $ 345,511 |
Schedule of Aggregate Long-term Borrowings | Aggregate expected maturities of our borrowings at December 31, 2016 are included in the table below. Certain of our borrowings mature within one year of the date of issuance of these financial statements. Based on management’s evaluation, we expect to renew, replace or extend all such borrowings to the extent necessary to finance our business on or prior to their respective maturities consistent with our historical experience. Expected Maturity Date (1) (2) (3) 2017 2018 2019 2020 2021 There- after Total Fair Match funded liabilities $ 780,997 $ 265,000 $ 235,000 $ — $ — $ — $ 1,280,997 $ 1,275,059 Other secured borrowings 321,656 66,873 16,750 284,750 — — 690,029 682,703 Senior notes — — 3,122 — — 346,878 350,000 355,303 $ 1,102,653 $ 331,873 $ 254,872 $ 284,750 $ — $ 346,878 $ 2,321,026 $ 2,313,065 (1) Amounts are exclusive of any related discount or unamortized debt issuance costs. (2) For match funded liabilities, the expected maturity date is the date on which the revolving period ends for each advance financing facility note and repayment of the outstanding balance must begin if the note is not renewed or extended. (3) Excludes financing liabilities, which we recognized in connection with asset sales transactions that we accounted for as financings. Financing liabilities include $477.7 million recorded in connection with sales of Rights to MSRs and $3.4 billion recorded in connection with the securitizations of HMBS. The MSR-related financing liabilities have no contractual maturity and are amortized over the life of the transferred Rights to MSRs. The HMBS-related financing liabilities have no contractual maturity and are amortized as the related loans are repaid. |
6.625 Senior Notes, Due 2019 [Member] | |
Debt Instrument, Redemption [Line Items] | |
Schedule of Redemption Prices | The redemption prices during the twelve-month periods beginning on May 15 th of each year are as follows: Year Redemption Price 2016 104.969% 2017 103.313% 2018 and thereafter 100.000% |
8.375% Senior Secured Notes Due In 2022 [Member] | |
Debt Instrument, Redemption [Line Items] | |
Schedule of Redemption Prices | The redemption prices during the twelve-month periods beginning on November 15 th of each year are as follows: Year Redemption Price 2018 106.281% 2019 104.188% 2020 102.094% 2021 and thereafter 100.000% |
Other Liabilities (Tables)
Other Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Other Liabilities | Other liabilities were comprised of the following at December 31: 2016 2015 Contingent loan repurchase liability (1) $ 246,081 $ 346,984 Accrued legal fees and settlements 93,797 74,922 Due to NRZ (2) 83,248 18,538 Other accrued expenses 80,021 113,934 Servicing-related obligations 35,324 44,385 Liability for indemnification obligations 27,546 36,615 Liability for uncertain tax positions 23,216 44,751 Checks held for escheat 16,890 14,301 Deferred income 4,481 4,341 Accrued interest payable 3,698 3,667 Derivatives, at fair value 1,550 — Other 65,387 42,006 $ 681,239 $ 744,444 (1) In connection with the Ginnie Mae EBO program, we have re-recognized certain loans on our consolidated balance sheets and established a corresponding repurchase liability regardless of our intention to repurchase the loan. (2) Balances represent advance collections and servicing fees to be remitted to NRZ. |
Equity (Tables)
Equity (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Loss (AOCL), Net of Income Taxes | The components of accumulated other comprehensive loss (AOCL), net of income taxes, were as follows at December 31: 2016 2015 Unrealized losses on cash flow hedges $ 1,329 $ 1,641 Other 121 122 $ 1,450 $ 1,763 |
Derivative Financial Instrume52
Derivative Financial Instruments and Hedging Activities (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of Changes in Notional Balances of Holdings of Derivatives | The following table summarizes the changes in the notional balances of our holdings of derivatives during the year ended December 31, 2016 : IRLCs Forward MBS Trades Interest Rate Caps Beginning notional balance $ 278,317 $ 632,720 $ 2,110,000 Additions 6,711,653 5,529,405 703,333 Amortization — — (793,333 ) Maturities (5,236,398 ) (2,820,929 ) — Terminations (1,393,122 ) (2,732,019 ) (1,065,000 ) Ending notional balance $ 360,450 $ 609,177 $ 955,000 Fair value of derivative assets (liabilities) at: December 31, 2016 $ 6,507 $ (614 ) $ 1,836 December 31, 2015 $ 6,080 $ 295 $ 2,042 Maturity Jan. 2017 - May 2017 Mar. 2017 Oct. 2017 - Dec. 2018 |
Summary of Open Derivative Positions and the Gains (Losses) on all Derivatives | The following summarizes our open derivative positions at December 31, 2016 and the gains (losses) on all derivatives used in each of the identified hedging programs for the year then ended. None of the derivatives was designated as a hedge for accounting purposes at December 31, 2016 : Purpose Expiration Date Notional Amount Fair Value (1) Gains (Losses) Consolidated Statement of Operations Caption Interest rate risk of borrowings Interest rate caps Oct. 2017 - Dec. 2018 $ 955,000 $ 1,836 $ (1,387 ) Other, net Interest rate risk of mortgage loans held for sale and of IRLCs Forward MBS trades Mar. 2017 609,177 (614 ) (6,592 ) Gain on loans held for sale, net IRLCs Jan. 2017 - May 2017 360,450 6,507 (55 ) Gain on loans held for sale, net Total derivatives $ 7,729 $ (8,034 ) (1) Derivatives are reported at fair value in Other assets or in Other liabilities on our consolidated balance sheets. |
Schedule of Changes in the Losses on Cash Flow Hedges Included in AOCL | Changes in AOCL during the years ended December 31 were as follows: 2016 2015 2014 Beginning balance $ 1,763 $ 8,413 $ 10,151 Losses on terminated cash flow hedging relationships amortized to earnings (337 ) (7,042 ) (1,982 ) Decrease in deferred taxes on accumulated losses on cash flow hedges 24 392 248 Decrease in accumulated losses on cash flow hedges, net of taxes (313 ) (6,650 ) (1,734 ) Other, net of taxes — — (4 ) Ending balance $ 1,450 $ 1,763 $ 8,413 |
Schedule of Other Income (Expense), Net Related to Derivative Financial Instruments | Other income (expense), net, includes the following related to derivative financial instruments for the years ended December 31: 2016 2015 2014 Losses on economic hedges (1,387 ) (1,377 ) (661 ) Write-off of losses in AOCL for a discontinued hedge relationship (1) (337 ) (7,042 ) (1,982 ) $ (1,724 ) $ (8,419 ) $ (2,643 ) (1) Includes the accelerated write-off in 2015 of deferred losses on a swap that had been designated for accounting purposes as a hedge of the purchase price of an MSR acquisition, when we sold a portion of the related MSRs. |
Interest Income (Tables)
Interest Income (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Other Income and Expenses [Abstract] | |
Schedule of Components of Interest Income | The following table presents the components of interest income for the years ended December 31: 2016 2015 2014 Loans held for sale $ 15,774 $ 16,167 $ 20,299 Automotive dealer financing notes 1,534 39 — Interest earning cash deposits and other 1,775 2,114 2,692 $ 19,083 $ 18,320 $ 22,991 |
Interest Expense (Tables)
Interest Expense (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Other Income and Expenses [Abstract] | |
Schedule of Components of Interest Expense | The following table presents the components of interest expense for the years ended December 31: 2016 2015 2014 Financing liabilities (1) (2) $ 248,834 $ 292,306 $ 371,852 Match funded liabilities 66,879 65,248 61,576 Other secured borrowings 60,469 91,391 82,837 Senior notes 30,012 26,259 15,595 Other 6,389 7,169 9,897 $ 412,583 $ 482,373 $ 541,757 (1) Includes interest expense related to financing liabilities recorded in connection with the NRZ/HLSS Transactions as indicated in the table below: 2016 2015 2014 Servicing fees collected on behalf of NRZ/HLSS $ 633,545 $ 694,833 $ 736,122 Less: Subservicing fee retained by Ocwen 337,727 355,527 358,053 Net servicing fees remitted to NRZ/HLSS 295,818 339,306 378,069 Less: Reduction in financing liability 61,418 70,513 17,374 Interest expense on NRZ/HLSS financing liability $ 234,400 $ 268,793 $ 360,695 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 NRZ/HLSS. (2) Includes $10.5 million and $14.3 million of fees incurred in 2016 and 2015, respectively, in connection with our agreement to compensate NRZ/HLSS through June 2016 for certain increased costs associated with its servicing advance financing facilities that were the direct result of a previous downgrade of our S&P servicer rating. |
Schedule of Interest Expense Related to Financing Liabilities Recorded in Connection with the HLSS Transactions | Includes interest expense related to financing liabilities recorded in connection with the NRZ/HLSS Transactions as indicated in the table below: 2016 2015 2014 Servicing fees collected on behalf of NRZ/HLSS $ 633,545 $ 694,833 $ 736,122 Less: Subservicing fee retained by Ocwen 337,727 355,527 358,053 Net servicing fees remitted to NRZ/HLSS 295,818 339,306 378,069 Less: Reduction in financing liability 61,418 70,513 17,374 Interest expense on NRZ/HLSS financing liability $ 234,400 $ 268,793 $ 360,695 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Before Taxes | For income tax purposes, the components of loss before taxes were as follows for the years ended December 31: 2016 2015 2014 Domestic $ (130,920 ) $ (62,903 ) $ (401,741 ) Foreign (75,441 ) (66,958 ) (41,418 ) $ (206,361 ) $ (129,861 ) $ (443,159 ) |
Schedule of Components of Income Tax Expense (Benefit) | The components of income tax expense (benefit) were as follows for the years ended December 31: 2016 2015 2014 Current: Federal $ (8,025 ) $ 46,680 $ (20,824 ) State 460 1,079 (403 ) Foreign 5,099 161 9,195 (2,466 ) 47,920 (12,032 ) Deferred: Federal (22,054 ) (27,173 ) 41,986 State 4,701 (3,719 ) (997 ) Foreign (2,806 ) 2,754 (6,162 ) Provision for valuation allowance on deferred tax assets 15,639 97,069 3,601 (4,520 ) 68,931 38,428 Total $ (6,986 ) $ 116,851 $ 26,396 |
Schedule of Effective Income Tax Reconciliation | Income tax expense differs from the amounts computed by applying the U.S. Federal corporate income tax rate of 35% as follows for the years ended December 31: 2016 2015 2014 Expected income tax expense (benefit) at statutory rate $ (72,225 ) $ (45,451 ) $ (155,106 ) Differences between expected and actual income tax expense: Impairment of goodwill — — 92,034 State tax, after Federal tax benefit 250 (2,867 ) (1,084 ) Provision for liability for uncertain tax positions 2,236 18,205 47 Provision for liability for intra-entity transactions 3,357 4,700 6,037 Non-deductible regulatory settlements — 700 53,375 Other permanent differences 515 (463 ) (254 ) Foreign tax differential 42,463 41,695 27,799 Provision for valuation allowance on deferred tax assets (1) 15,639 97,069 3,601 Other 779 3,263 (53 ) Actual income tax expense (benefit) $ (6,986 ) $ 116,851 $ 26,396 (1) The provision for valuation allowance in 2016 and 2015 primarily relates to the recording of the valuation allowance on both the U.S. and USVI net deferred tax assets as of December 31, 2016 and 2015. Also included in the provision for valuation allowance in 2015 is the reversal of a portion of the valuation allowance previously recorded on taxable losses earned by OMS which were taxable in the U.S. as effectively connected income (ECI), which is equal to the positive taxable income that is expected to be generated for ECI purposes for the year ended December 31, 2015. |
Schedule of Deferred Tax Assets and Liabilities | Net deferred tax assets were comprised of the following at December 31: 2016 2015 Deferred tax assets: Net operating loss carryforward $ 67,657 $ 24,511 Mortgage servicing rights amortization 11,592 15,697 Partnership losses 8,976 10,137 Intangible asset amortization 8,223 10,293 Accrued incentive compensation 8,017 10,107 Accrued legal settlements 9,178 10,519 Stock-based compensation expense 5,659 4,834 Accrued other liabilities 5,543 5,641 Foreign deferred assets 5,219 3,647 Foreign tax credit 4,262 — Tax residuals and deferred income on tax residuals 4,037 4,052 Bad debt and allowance for loan losses 3,268 6,227 Reserve for servicing exposure 1,900 3,353 Delinquent servicing fees 1,647 2,360 Capital losses 1,450 1,710 Other 1,872 7,056 148,500 120,144 Deferred tax liabilities: Foreign undistributed earnings 13,619 5,421 Other 76 77 13,695 5,498 134,805 114,646 Valuation allowance (132,073 ) (116,434 ) Deferred tax assets (liabilities), net $ 2,732 $ (1,788 ) |
Schedule of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of the total liability for uncertain tax positions is as follows for the years ended December 31: 2016 2015 2014 Beginning balance $ 32,548 $ 22,523 $ 27,273 Additions for tax positions of prior years — 13,162 1,392 Reductions for tax positions of prior years — (2,741 ) (6,010 ) Reductions for settlements (14,420 ) — — Lapses in statute of limitations (1,134 ) (396 ) (132 ) Ending balance $ 16,994 $ 32,548 $ 22,523 |
Basic and Diluted Earnings (L56
Basic and Diluted Earnings (Loss) per Share (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliation of the Calculation of Basic EPS to Diluted EPS | The following is a reconciliation of the calculation of basic loss per share to diluted loss per share for the years ended December 31: 2016 2015 2014 Basic loss per share: Net loss attributable to Ocwen common stockholders $ (199,762 ) $ (247,017 ) $ (472,602 ) Weighted average shares of common stock 123,990,700 125,315,899 131,362,284 Basic loss per share $ (1.61 ) $ (1.97 ) $ (3.60 ) Diluted loss per share (1): Net loss attributable to Ocwen common stockholders $ (199,762 ) $ (247,017 ) $ (472,602 ) Preferred stock dividends (1) (2) — — — Adjusted net loss attributable to Ocwen $ (199,762 ) $ (247,017 ) $ (472,602 ) Weighted average shares of common stock 123,990,700 125,315,899 131,362,284 Effect of dilutive elements (1): Preferred stock (1) (2) — — — Stock options — — — Common stock awards — — — Dilutive weighted average shares of common stock 123,990,700 125,315,899 131,362,284 Diluted loss per share $ (1.61 ) $ (1.97 ) $ (3.60 ) Stock options and common stock awards excluded from the computation of diluted earnings per share: Anti-dilutive (3) 7,176,089 2,038,588 314,688 Market-based (4) 795,456 924,438 295,000 (1) For 2016, 2015 and 2014, we have excluded the effect of preferred stock, stock options and common stock awards from the computation of diluted earnings per share because of the anti-dilutive effect of our reported net loss. (2) Prior to the conversion of our remaining preferred stock into common stock in July 2014, we computed the effect on diluted earnings per share using the if-converted method. Under this method, we assumed the conversion of the preferred stock into shares of common stock unless the effect was anti-dilutive. (3) These stock options were anti-dilutive because their exercise price was greater than the average market price of our stock. (4) Shares that are issuable upon the achievement of certain performance criteria related to Ocwen’s stock price and an annualized rate of return to investors. |
Employee Compensation and Ben57
Employee Compensation and Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Stock Unit Activity | Stock unit activity for the years ended December 31 was as follows: 2016 2015 2014 Number of Weighted Number of Weighted Number of Weighted Unvested at beginning of year 835,730 $ 10.00 79,612 $ 32.23 28,235 $ 25.23 Granted (1)(2) 2,184,100 $ 2.19 790,397 $ 8.53 63,500 $ 34.34 Vested (3)(4) (26,666 ) $ 32.56 (34,279 ) $ 27.92 (12,123 ) $ 26.98 Forfeited/Canceled (241,110 ) $ 6.17 — $ — — $ — Unvested at end of year (5)(6) 2,752,054 $ 3.91 835,730 $ 10.00 79,612 $ 32.23 (1) Stock units granted in 2015 included 584,438 stock units with a market condition for vesting based on an average common stock trading price of $16.26 . As of December 31, 2016 , these awards had not yet met the market condition. (2) Stock units granted in 2016 included 1,156,500 stock units with a market condition for vesting based on an average common stock trading price of $4.78 . The market condition for these awards was met on November 30, 2016. (3) The total intrinsic value of stock units vested, which is defined as the market value of the stock on the date of vesting, was $0.1 million , $0.3 million and $0.3 million for 2016 , 2015 and 2014 , respectively. (4) The total fair value of the stock units that vested during 2016 , 2015 and 2014 , based on grant-date fair value, was $0.9 million , $1.0 million and $0.3 million , respectively. (5) Excluding the 502,446 market-based stock awards that have not met their performance criteria, the net aggregate intrinsic value of stock awards outstanding at December 31, 2016 was $12.1 million . (6) At December 31, 2016 , the weighted average remaining contractual term of share units outstanding was 2.60 years . |
Schedule of Stock Options Vesting | These awards had the following characteristics in common: Type of Award Percent of Total Equity Award Vesting Period 2008 - 2014 Awards: Options: Service Condition: Time-based 25 % Ratably over four years (25% on each of the four anniversaries of the grant date) Market Condition: Market performance-based 50 Over three years beginning with 25% vesting on the date that the stock price has at least doubled over the exercise price and the compounded annual gain over the exercise price is at least 20% and then ratably over three years (25% on each of the next three anniversaries of the achievement of the market condition) Extraordinary market performance-based 25 Over three years beginning with 25% vesting on the date that the stock price has at least tripled over the exercise price and the compounded annual gain over the exercise price is at least 25% and then ratably over three years (25% on each of the next three anniversaries of the achievement of the market condition) Total award 100 % Type of Award Percent of Total Equity Award Vesting Period 2015 Awards: Options: Service Condition: Time-based 35 % Ratably over four years (25% vesting on each of the first four anniversaries of the grant date.) Stock Units: Service Condition: Time-based 16 Over four years with 1/3 vesting on each of the 2 nd , 3 rd and 4 th anniversaries of the grant date. Market Condition: Time-based vesting schedule and Market performance-based vesting date 49 Vest over four years with 25% vesting on each of the four anniversaries of the grant date. However, none are considered vested until the first trading day (if any) on or before the 4 th anniversary of the award date on which the average stock price equals or exceeds the price set in the individual award agreement, at which time all units that have met their time-based vesting schedule vest immediately with the remainder vesting in accordance with their time-based schedule. Total Award 100 % 2016 Awards: Stock Units: Service Condition: Time-based 47 % Over four years with 25% vesting on each of the first four anniversaries of the grant date. Market Condition: Time-based vesting schedule and Market performance-based vesting date 53 Vest over four years with 25% vesting on each of the four anniversaries of the grant date. However, none are considered vested until the first trading day (if any) on or before the 4 th anniversary of the award date on which the average stock price equals or exceeds the price set in the individual award agreement, at which time all units that have met their time-based vesting schedule vest immediately with the remainder vesting in accordance with their time-based schedule. Total Award 100 % |
Schedule of Stock Option Activity | Stock option activity for the years ended December 31 was as follows: 2016 2015 2014 Number of Options Weighted Average Exercise Price Number of Options Weighted Average Exercise Price Number of Options Weighted Average Exercise Price Outstanding at beginning of year 7,151,225 $ 10.10 6,828,861 $ 9.99 8,182,611 $ 10.62 Granted (1)(2) — $ — 968,041 $ 17.48 330,000 $ 34.48 Exercised (3)(4) (69,805 ) $ 5.81 (145,677 ) $ 5.24 (683,750 ) $ 8.30 Forfeited/Canceled (1)(5) (154,786 ) $ 21.80 (500,000 ) $ 24.38 (1,000,000 ) $ 24.38 Outstanding at end of year (6)(7) 6,926,634 $ 9.88 7,151,225 $ 10.10 6,828,861 $ 9.99 Exercisable at end of year (6)(7)(8) 6,344,958 $ 8.71 6,187,559 $ 8.25 5,750,739 $ 6.84 (1) Upon Mr. Erbey’s resignation as an officer and director of Ocwen on January 16, 2015, 500,000 of his unvested options would have been forfeited immediately. However, Ocwen agreed to modify the awards to allow them to vest. This had an effect equivalent to the canceling of the original awards and the granting of new awards effective on the date of resignation. (2) The weighted average grant date fair value of stock options granted was $3.28 and $12.94 during 2015 and 2014 , respectively. (3) The total intrinsic value of stock options exercised, which is defined as the amount by which the market value of the stock on the date of exercise exceeds the exercise price, was $0.1 million , $0.3 million and $13.7 million for 2016 , 2015 and 2014 , respectively. (4) In connection with the exercise of stock options during 2015 and 2014 , employees delivered 56,013 and 249,696 shares, respectively, of common stock to Ocwen as payment for the exercise price and the income tax withholdings on the compensation. As a result, a total of 89,664 and 434,054 net shares of stock were issued in 2015 and 2014 , respectively, related to the exercise of stock options. (5) Stock options granted in 2012 included 2,000,000 options granted to Ocwen’s former Executive Chairman, William C. Erbey at an exercise price of $24.38 equal to the closing price of the stock on the day of the Committee’s approval. On April 22, 2014, Mr. Erbey surrendered 1,000,000 of these options. We recognized the remaining $5.7 million of previously unrecognized compensation expense associated with these options as of the date of surrender. (6) Excluding 280,000 market-based options that have not met their performance criteria, the net aggregate intrinsic value of stock options outstanding and stock options exercisable at December 31, 2016 was $0 and $0 , respectively. A total of 4,662,814 market-based options were outstanding at December 31, 2016 , of which 4,382,814 were exercisable. (7) At December 31, 2016 , the weighted average remaining contractual term of options outstanding and options exercisable was 2.86 years and 2.42 years , respectively. (8) The total fair value of the stock options that vested and became exercisable during 2016 , 2015 and 2014 , based on grant-date fair value, was $1.1 million , $2.0 million and $2.6 million , respectively. |
Schedule of Assumptions used to Value Stock Option Awards Granted | The following assumptions were used to value awards granted during the years ended December 31: 2016 2015 2014 Monte Carlo Black-Scholes Binomial Monte Carlo Black-Scholes Binomial Risk-free interest rate 1.12% 1.60% – 2.08% 0.20% - 2.74% 1.23% 1.98% – 2.60% 0% - 3.05% Expected stock price volatility (1) 77% 45% 51% - 108% 65% 42% 41% - 42% Expected dividend yield —% —% —% —% —% —% Expected life (in years) (2) (3) 5.50 5.41 - 5.46 (3) 6.50 4.35 - 5.64 Contractual life (in years) — — 10 — — 10 Fair value $2.00 $3.36 - $4.62 $5.41 - $5.46 $7.99 $11.93 - $17.01 $8.99 - $13.82 (1) We generally estimate volatility based on the historical volatility of Ocwen’s common stock over the most recent period that corresponds with the estimated expected life of the option. For stock awards valued using a Monte Carlo simulation, volatility is computed as a blend of historical volatility and implied volatility based on traded options on Ocwen’s common stock. (2) For the options valued using the Black-Scholes model we determined the expected life based on historical experience with similar awards, giving consideration to the contractual term, exercise patterns and post vesting forfeitures. The expected term of the options valued using the lattice (binomial) model is derived from the output of the model. The lattice (binomial) model incorporates exercise assumptions based on analysis of historical data. For all options, the expected life represents the period of time that options granted were expected to be outstanding at the date of the award. (3) The stock units that contain both a service condition and a market-based condition are valued using the Monte Carlo simulation. The expected term is derived from the output of the simulation and represents the expected time to meet the market-based vesting condition. For equity awards with both service and market conditions, the requisite service period is the longer of the derived or explicit service period. In this case, the explicit service condition (vesting period) is the requisite service period, and the graded vesting method is used for expense recognition. |
Schedule of Equity-based Compensation Expense Related to Stock Options and Stock Awards and Related Excess Tax Benefit | The following table sets forth equity-based compensation related to stock options and stock awards and the related excess tax benefit for the years ended December 31: 2016 2015 2014 Equity-based compensation expense: Stock option awards $ 1,644 $ 3,978 $ 9,983 Stock awards 3,537 3,313 746 Excess tax benefit related to share-based awards 686 6,824 6,374 |
Business Segment Reporting (Tab
Business Segment Reporting (Tables) | 12 Months Ended |
Dec. 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 For the year ended December 31, 2016 Revenue (1) $ 1,247,159 $ 112,363 $ 27,646 $ (5 ) $ 1,387,163 Expenses (1) (2) 920,434 104,342 198,483 (5 ) 1,223,254 Other income (expense): Interest income (109 ) 15,300 3,892 — 19,083 Interest expense (357,413 ) (14,398 ) (40,772 ) — (412,583 ) Gain on sale of mortgage servicing rights, net 8,492 — — — 8,492 Other (1) 15,812 1,065 (2,139 ) — 14,738 Other income (expense), net (333,218 ) 1,967 (39,019 ) — (370,270 ) Income (loss) before income taxes $ (6,493 ) $ 9,988 $ (209,856 ) $ — $ (206,361 ) For the year ended December 31, 2015 Revenue (1) $ 1,613,537 $ 124,724 $ 2,895 $ (58 ) $ 1,741,098 Expenses (1) (2) 1,221,879 97,692 158,671 (58 ) 1,478,184 Other income (expense): Interest income 1,044 14,669 2,607 — 18,320 Interest expense (446,377 ) (9,859 ) (26,137 ) — (482,373 ) Gain on sale of mortgage servicing rights, net 83,921 — — — 83,921 Other (1) (14,370 ) 2,123 (396 ) — (12,643 ) Other income (expense), net (375,782 ) 6,933 (23,926 ) — (392,775 ) Income (loss) before income taxes $ 15,876 $ 33,965 $ (179,702 ) $ — $ (129,861 ) Servicing Lending Corporate Items and Other Corporate Eliminations Business Segments Consolidated For the year ended December 31, 2014 Revenue (1) $ 1,985,436 $ 119,220 $ 6,825 $ (156 ) $ 2,111,325 Expenses (1) (2) 1,643,323 156,272 235,769 (156 ) 2,035,208 Other income (expense): Interest income 2,981 16,459 3,551 — 22,991 Interest expense (515,141 ) (10,725 ) (15,891 ) — (541,757 ) Other (1) (4,043 ) 4,476 (943 ) — (510 ) Other income (expense), net (516,203 ) 10,210 (13,283 ) — (519,276 ) Loss before income taxes $ (174,090 ) $ (26,842 ) $ (242,227 ) $ — $ (443,159 ) Servicing Lending Corporate Items and Other Corporate Eliminations Business Segments Consolidated Total Assets December 31, 2016 $ 3,312,357 $ 3,863,848 $ 479,458 $ — $ 7,655,663 December 31, 2015 $ 4,089,064 $ 2,811,154 $ 480,090 $ — $ 7,380,308 December 31, 2014 $ 5,864,061 $ 1,963,729 $ 415,872 $ — $ 8,243,662 (1) Inter-segment billings for services rendered to other segments are recorded as revenues, as contra-expense or as other income, depending on the type of service that is rendered. (2) Depreciation and amortization expense are as follows: Servicing Lending Corporate Items and Other Business Segments Consolidated For the year ended December 31, 2016: Depreciation expense $ 6,804 $ 228 $ 18,306 $ 25,338 Amortization of mortgage servicing rights 32,669 309 — 32,978 Amortization of debt discount 727 — 3,450 4,177 Amortization of debt issuance costs 13,455 — 12,207 25,662 For the year ended December 31, 2015: Depreciation expense $ 2,990 $ 380 $ 15,789 $ 19,159 Amortization of mortgage servicing rights 98,849 345 — 99,194 Amortization of debt discount 2,680 — — 2,680 Amortization of debt issuance costs 21,269 — 1,395 22,664 For the year ended December 31, 2014: Depreciation expense $ 9,955 $ 332 $ 11,623 $ 21,910 Amortization of mortgage servicing rights 249,471 705 199 250,375 Amortization of debt discount 1,318 — — 1,318 Amortization of debt issuance costs 4,294 — 845 5,139 |
Depreciation and Amortization [Member] | |
Segment Reporting Information [Line Items] | |
Schedule of Segment Reporting Information | Depreciation and amortization expense are as follows: Servicing Lending Corporate Items and Other Business Segments Consolidated For the year ended December 31, 2016: Depreciation expense $ 6,804 $ 228 $ 18,306 $ 25,338 Amortization of mortgage servicing rights 32,669 309 — 32,978 Amortization of debt discount 727 — 3,450 4,177 Amortization of debt issuance costs 13,455 — 12,207 25,662 For the year ended December 31, 2015: Depreciation expense $ 2,990 $ 380 $ 15,789 $ 19,159 Amortization of mortgage servicing rights 98,849 345 — 99,194 Amortization of debt discount 2,680 — — 2,680 Amortization of debt issuance costs 21,269 — 1,395 22,664 For the year ended December 31, 2014: Depreciation expense $ 9,955 $ 332 $ 11,623 $ 21,910 Amortization of mortgage servicing rights 249,471 705 199 250,375 Amortization of debt discount 1,318 — — 1,318 Amortization of debt issuance costs 4,294 — 845 5,139 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
Summary of Revenues and Expenses Related to Various Service Agreements | The following table summarizes revenues and expenses related to our agreements with Altisource, HLSS (prior to the sale of its assets to NRZ), AAMC and Residential (and, as applicable, their subsidiaries) for the year ended December 31, 2014. See Note 25 — Commitments for additional discussion of our long-term agreements with Altisource. See Note 3 — Sales of Advances and MSRs , Note 5 — Loans Held for Sale , Note 8 — Mortgage Servicing and Note 13 — Borrowings for additional discussion of the NRZ/HLSS Transactions. Revenues and Expenses: Altisource agreements: Revenues $ 43,075 Expenses 101,520 HLSS support services agreement: Revenues $ 1,315 Expenses 1,729 AAMC support services and facilities agreements Revenues $ 1,160 Residential servicing agreement Revenues $ 15,658 |
Commitments (Tables)
Commitments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Commitments under Non-cancelable Operating Leases | We lease certain of our premises and equipment under non-cancelable operating leases with terms expiring through 2023 exclusive of renewal option periods. Our annual aggregate minimum rental commitments under these leases are summarized as follows: 2017 $ 14,037 2018 9,878 2019 5,590 2020 2,929 2021 1,379 Thereafter 1,184 34,997 Less: Sublease income (1,027 ) Total minimum lease payments, net $ 33,970 |
Contingencies (Tables)
Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Changes in Liability for Representation and Warrant Obligations, Compensatory Fees for Foreclosures that may Ultimately Exceed Investor Timelines and Related Indemnification Obligations | The following table presents the changes in our liability for representation and warranty obligations, compensatory fees for foreclosures that may ultimately exceed investor timelines and similar indemnification obligations for the following years ended December 31: 2016 2015 2014 Beginning balance $ 36,615 $ 132,918 $ 192,716 Provision for representation and warranty obligations (4,060 ) (8,418 ) (1,947 ) New production reserves 864 814 1,605 Payments made in connection with sales of MSRs (1,320 ) (81,498 ) — Charge-offs and other (1) (7,814 ) (7,201 ) (59,456 ) Ending balance $ 24,285 $ 36,615 $ 132,918 (1) Includes principal and interest losses realized in connection with repurchased loans, make-whole, indemnification and fee payments and settlements net of recoveries, if any. |
Quarterly Results of Operatio62
Quarterly Results of Operations (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Results of Operations (Unaudited) | Quarters Ended December 31, September 30, June 30, March 31, Revenue $ 323,904 $ 359,448 $ 373,054 $ 330,757 Expenses 237,901 271,678 385,018 328,657 Other income (expense), net (96,205 ) (85,406 ) (84,434 ) (104,225 ) Income (loss) before income taxes (10,202 ) 2,364 (96,398 ) (102,125 ) Income tax expense (benefit) 228 (7,110 ) (9,180 ) 9,076 Net income (loss) (10,430 ) 9,474 (87,218 ) (111,201 ) Net income attributable to non-controlling interests (14 ) (83 ) (160 ) (130 ) Net income (loss) attributable to Ocwen common stockholders $ (10,444 ) $ 9,391 $ (87,378 ) $ (111,331 ) Earnings (loss) per share attributable to Ocwen common stockholders Basic $ (0.08 ) $ 0.08 $ (0.71 ) $ (0.90 ) Diluted $ (0.08 ) $ 0.08 $ (0.71 ) $ (0.90 ) Quarters Ended December 31, September 30, June 30, March 31, Revenue $ 362,457 $ 404,946 $ 463,251 $ 510,444 Expenses 359,848 387,726 352,252 378,358 Other income (expense), net (1) (131,881 ) (73,138 ) (98,499 ) (89,257 ) Income (loss) before income taxes (129,272 ) (55,918 ) 12,500 42,829 Income tax expense 94,985 10,832 2,594 8,440 Net income (loss) (224,257 ) (66,750 ) 9,906 34,389 Net loss (income) attributable to non-controlling interests 16 (119 ) (168 ) (34 ) Net income (loss) attributable to Ocwen common stockholders $ (224,241 ) $ (66,869 ) $ 9,738 $ 34,355 Earnings (loss) per share attributable to Ocwen common stockholders Basic $ (1.79 ) $ (0.53 ) $ 0.08 $ 0.27 Diluted $ (1.79 ) $ (0.53 ) $ 0.08 $ 0.27 (1) Other income (expense), net for 2015 includes gains (losses) on the sale of MSRs in the first, second, third and fourth quarter of $26.4 million , $30.3 million , $41.2 million and $(14.0) million , respectively. |
Organization, Business Enviro63
Organization, Business Environment, Basis of Presentation and Significant Accounting Policies - Narrative (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016USD ($)Employees | Dec. 31, 2015USD ($) | |
Description of Business and Basis of Presentation [Line Items] | ||
Total number of employees | Employees | 9,700 | |
Percentage of foreign based employees engaged in supporting loan servicing operations | 80.00% | |
Current maturities of borrowings in next 12 months | $ 1,200,000 | |
Debt instrument term | 364 days | |
Unamortized debt issuance costs | $ (24,500) | |
Threshold period past due for financing receivables to be delinquent | 89 days | |
India [Member] | ||
Description of Business and Basis of Presentation [Line Items] | ||
Total number of employees | Employees | 6,300 | |
Philippines [Member] | ||
Description of Business and Basis of Presentation [Line Items] | ||
Total number of employees | Employees | 800 | |
Maximum [Member] | ||
Description of Business and Basis of Presentation [Line Items] | ||
Maximum percentage till, the company exercise significant influence, but not control over subsidiaries or VIEs | 50.00% | |
Other Secured Borrowings [Member] | ||
Description of Business and Basis of Presentation [Line Items] | ||
Unamortized debt issuance costs | (20,000) | |
Senior Notes [Member] | ||
Description of Business and Basis of Presentation [Line Items] | ||
Unamortized debt issuance costs | $ (3,211) | $ (4,489) |
Organization, Business Enviro64
Organization, Business Environment, Basis of Presentation and Significant Accounting Policies - Schedule of Property and Equipment Useful Lives (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Computer Software [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 2 years |
Computer Software [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Computer Hardware [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Buildings [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 40 years |
Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | Term of the lease not to exceed useful life |
Furniture and Fixtures [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Office Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Securitizations and Variable 65
Securitizations and Variable Interests Entities - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Servicing Assets at Fair Value [Line Items] | |||
Average period to securitization | 30 days | ||
Total Financing liabilities | $ 4,012,812 | $ 3,089,255 | |
Loans held for investment - Reverse mortgages | 3,565,716 | 2,488,253 | |
Forward Loans [Member] | |||
Servicing Assets at Fair Value [Line Items] | |||
MSRs retained | $ 37,200 | $ 36,000 | $ 39,800 |
Percentage of transferred residential loans serviced 60 days or more past due | 7.60% | 8.20% | |
Charge-offs, net of recovers, associated with transferred residential loans serviced 60 days or more past due | $ 300 | $ 500 | |
HECM [Member] | |||
Servicing Assets at Fair Value [Line Items] | |||
Loans held for investment - Reverse mortgages | 3,600,000 | 2,500,000 | |
Loans held for investment - Reverse mortgages, not pledged as collateral | $ 81,300 | ||
Minimum [Member] | Forward Loans [Member] | |||
Servicing Assets at Fair Value [Line Items] | |||
Number of days that transferred residential loans serviced were past due | 60 days | ||
HMBS - Related Borrowings [Member] | |||
Servicing Assets at Fair Value [Line Items] | |||
Total Financing liabilities | $ 3,400,000 | $ 2,400,000 |
Securitizations and Variable 66
Securitizations and Variable Interests Entities - Summary of Cash Flows Received from and Paid to Securitization Trusts Related to Transfers Accounted for as Sales Outstanding (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Transfers and Servicing [Abstract] | |||
Proceeds received from securitizations | $ 5,197,071 | $ 4,970,454 | $ 5,265,183 |
Servicing fees collected | 14,616 | 29,239 | 25,438 |
Purchases of previously transferred assets, net of claims reimbursed | (1,271) | (2,863) | 4,973 |
Cash flows between transferor and transferee proceeds and payment related to transfers accounted for sales | $ 5,210,416 | $ 4,996,830 | $ 5,295,594 |
Securitizations and Variable 67
Securitizations and Variable Interests Entities - Schedule of Carrying Amounts of Assets that Relate to Continuing Involvement with Transferred Forward Loans (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||
UPB of loans transferred | $ 10,485,697 | $ 7,471,025 |
Maximum exposure to loss | 10,617,758 | 7,552,958 |
Mortgage Servicing Rights, at Amortized Cost [Member] | ||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||
Carrying value of assets | 94,492 | 54,729 |
Mortgage Servicing Rights, at Fair Value [Member] | ||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||
Carrying value of assets | 233 | 236 |
Advances And Match Funded Advances [Member] | ||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||
Carrying value of assets | $ 37,336 | $ 26,968 |
Sales of Advances and MSRs - Su
Sales of Advances and MSRs - Summary of MSRs and Advances Sold (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2016 | [1] | Dec. 31, 2015 | [1] | Dec. 31, 2014 | [2] | |
Mortgage Servicing Rights [Member] | ||||||
Servicing Assets at Fair Value [Line Items] | ||||||
Accounted for as a sale | $ 29,550 | $ 775,351 | $ 287 | |||
Accounted for as a financing | 0 | 0 | 123,551 | |||
Sales price of assets sold | 29,550 | 775,351 | 123,838 | |||
Amount due from purchaser at December 31 | 0 | (18,615) | 0 | |||
Amounts paid to purchaser for estimated representation and warranty obligations, compensatory fees and related indemnification obligations | (1,320) | (69,898) | 0 | |||
Amounts received from purchaser for items outstanding at the end of the previous year | 18,814 | 0 | 0 | |||
Total net cash received | 47,044 | 686,838 | 123,838 | |||
Advances And Match Funded Advances [Member] | ||||||
Servicing Assets at Fair Value [Line Items] | ||||||
Accounted for as a sale | 31,904 | 562,325 | 1,054 | |||
Accounted for as a financing | 0 | 0 | 88,981 | |||
Sales price of assets sold | 31,904 | 562,325 | 90,035 | |||
Amount due from purchaser at December 31 | (399) | (76,014) | 0 | |||
Amounts paid to purchaser for estimated representation and warranty obligations, compensatory fees and related indemnification obligations | 0 | 0 | 0 | |||
Amounts received from purchaser for items outstanding at the end of the previous year | 71,512 | 0 | 0 | |||
Total net cash received | $ 103,017 | $ 486,311 | $ 90,035 | |||
[1] | In 2016 and 2015, we sold MSRs relating to loans with a UPB of $3.7 billion (Agency and non-Agency) and $87.6 billion (Agency), respectively. | |||||
[2] | In 2014, we issued $123.6 million of OASIS Series 2014-1 Notes secured by Ocwen-owned MSRs relating to Freddie Mac mortgages of $11.8 billion UPB. |
Sales of Advances and MSRs - 69
Sales of Advances and MSRs - Summary of MSRs and Advances Sold (Footnote) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Agency And Non-Agency Mortgage Servicing Rights [Member] | |||
Servicing Assets at Fair Value [Line Items] | |||
UPB of rights to MSRs sold | $ 3,700 | ||
Agency MSRs [Member] | |||
Servicing Assets at Fair Value [Line Items] | |||
UPB of rights to MSRs sold | $ 87,600 | ||
Mortgage Servicing Rights [Member] | |||
Servicing Assets at Fair Value [Line Items] | |||
UPB of MSRs related to Freddie Mac mortgages | $ 11,800 | ||
OASIS Series 2014-1 [Member] | Secured Debt [Member] | |||
Servicing Assets at Fair Value [Line Items] | |||
Face amount | $ 123.6 |
Sales of Advances and MSRs - Na
Sales of Advances and MSRs - Narrative (Details) - NRZ [Member] - USD ($) $ in Billions | Apr. 06, 2015 | Dec. 31, 2016 |
Related Party Transaction [Line Items] | ||
UPB of rights to MSRs sold | $ 118.7 | |
Outstanding servicing advances | $ 4.1 | |
Period from sale of tranche of rights to mortgage servicing rights that apportionment of fees is subject to re-negotiation | 8 years |
Fair Value - Schedule of Carryi
Fair Value - Schedule of Carrying Amounts and Estimated Fair Values of Financial Instruments and Nonfinancial Assets Measured at Fair Value on a Recurring or Non-recurring basis or Disclosed, but not Carried, at Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||||
Financial assets: | ||||||||
Loans held for sale, at fair value | $ 284,632 | [1] | $ 309,054 | [1] | $ 401,120 | [1] | $ 503,753 | |
Total Loans held for sale | 314,006 | 414,046 | ||||||
Mortgage-backed securities, at fair value | 8,342 | 7,985 | ||||||
Financial liabilities: | ||||||||
Match funded liabilities | 1,280,997 | 1,584,049 | ||||||
Financing liabilities: | ||||||||
Total Financing liabilities | 4,012,812 | 3,089,255 | ||||||
Other secured borrowings: | ||||||||
Total Other secured borrowings | 678,543 | 762,411 | ||||||
Senior Notes: | ||||||||
Total Senior notes | 346,789 | 345,511 | ||||||
Derivative financial instruments: | ||||||||
Forward mortgage-backed securities trades | 1,550 | 0 | ||||||
Mortgage servicing rights: | ||||||||
Mortgage servicing rights, at fair value | 679,256 | 761,190 | $ 93,901 | |||||
Total Mortgage servicing rights | 1,042,978 | 1,138,569 | ||||||
Carrying Value [Member] | ||||||||
Financial assets: | ||||||||
Total Loans held for sale | 314,006 | 414,046 | ||||||
Financing liabilities: | ||||||||
Total Financing liabilities | 4,012,812 | 3,089,255 | ||||||
Other secured borrowings: | ||||||||
Total Other secured borrowings | 678,543 | 762,411 | ||||||
Senior Notes: | ||||||||
Total Senior notes | 346,789 | 345,511 | ||||||
Mortgage servicing rights: | ||||||||
Total Mortgage servicing rights | 1,042,978 | 1,138,569 | ||||||
Fair Value [Member] | ||||||||
Financial assets: | ||||||||
Total Loans held for sale | 314,006 | 414,046 | ||||||
Financing liabilities: | ||||||||
Total Financing liabilities | 3,993,293 | 3,065,006 | ||||||
Other secured borrowings: | ||||||||
Total Other secured borrowings | 682,703 | 783,276 | ||||||
Senior Notes: | ||||||||
Total Senior notes | 355,303 | 318,063 | ||||||
Mortgage servicing rights: | ||||||||
Total Mortgage servicing rights | 1,147,167 | 1,222,745 | ||||||
Level 2 [Member] | Carrying Value [Member] | ||||||||
Financial assets: | ||||||||
Loans held for sale, at fair value | [2] | 284,632 | 309,054 | |||||
Other secured borrowings: | ||||||||
Senior secured term loan | [3],[4] | 323,514 | 377,091 | |||||
Senior Notes: | ||||||||
Senior unsecured notes | [3],[4] | 3,094 | 345,511 | |||||
Senior secured notes | [3],[4] | 343,695 | 0 | |||||
Level 2 [Member] | Fair Value [Member] | ||||||||
Financial assets: | ||||||||
Loans held for sale, at fair value | [2] | 284,632 | 309,054 | |||||
Other secured borrowings: | ||||||||
Senior secured term loan | [3],[4] | 327,674 | 397,956 | |||||
Senior Notes: | ||||||||
Senior unsecured notes | [3],[4] | 3,048 | 318,063 | |||||
Senior secured notes | [3],[4] | 352,255 | 0 | |||||
Level 3 [Member] | Carrying Value [Member] | ||||||||
Financial assets: | ||||||||
Loans held for sale, at lower of cost or fair value | [5] | 29,374 | 104,992 | |||||
Loans held for investment - Reverse mortgages, at fair value | [2] | 3,565,716 | 2,488,253 | |||||
Advances and match funded advances | [3] | 1,709,846 | 2,151,066 | |||||
Receivables, net | [3] | 265,720 | 286,981 | |||||
Mortgage-backed securities, at fair value | [2] | 8,342 | 7,985 | |||||
Financial liabilities: | ||||||||
Match funded liabilities | [3] | 1,280,997 | 1,584,049 | |||||
Financing liabilities: | ||||||||
HMBS-related borrowings, at fair value | [2] | 3,433,781 | 2,391,362 | |||||
Financing liability - MSRs pledged | [2] | 477,707 | 541,704 | |||||
Other | [3] | 101,324 | 156,189 | |||||
Other secured borrowings: | ||||||||
Other | [3] | 355,029 | 385,320 | |||||
Mortgage servicing rights: | ||||||||
Mortgage servicing rights, at fair value | [2] | 679,256 | 761,190 | |||||
MSRs, at amortized cost | [3],[6] | 363,722 | 377,379 | |||||
Level 3 [Member] | Fair Value [Member] | ||||||||
Financial assets: | ||||||||
Loans held for sale, at lower of cost or fair value | [5] | 29,374 | 104,992 | |||||
Loans held for investment - Reverse mortgages, at fair value | [2] | 3,565,716 | 2,488,253 | |||||
Advances and match funded advances | [3] | 1,709,846 | 2,151,066 | |||||
Receivables, net | [3] | 265,720 | 286,981 | |||||
Mortgage-backed securities, at fair value | [2] | 8,342 | 7,985 | |||||
Financial liabilities: | ||||||||
Match funded liabilities | [3] | 1,275,059 | 1,581,786 | |||||
Financing liabilities: | ||||||||
HMBS-related borrowings, at fair value | [2] | 3,433,781 | 2,391,362 | |||||
Financing liability - MSRs pledged | [2] | 477,707 | 541,704 | |||||
Other | [3] | 81,805 | 131,940 | |||||
Other secured borrowings: | ||||||||
Other | [3] | 355,029 | 385,320 | |||||
Mortgage servicing rights: | ||||||||
Mortgage servicing rights, at fair value | [2] | 679,256 | 761,190 | |||||
MSRs, at amortized cost | [3],[6] | 467,911 | 461,555 | |||||
Level 1 [Member] | Carrying Value [Member] | ||||||||
Financial assets: | ||||||||
U.S. Treasury notes | [2] | 2,078 | 0 | |||||
Level 1 [Member] | Fair Value [Member] | ||||||||
Financial assets: | ||||||||
U.S. Treasury notes | [2] | 2,078 | 0 | |||||
Interest Rate Lock Commitments [Member] | Level 2 [Member] | Carrying Value [Member] | ||||||||
Derivative financial instruments: | ||||||||
Interest rate lock commitments | [2] | 6,507 | 6,080 | |||||
Interest Rate Lock Commitments [Member] | Level 2 [Member] | Fair Value [Member] | ||||||||
Derivative financial instruments: | ||||||||
Interest rate lock commitments | [2] | 6,507 | 6,080 | |||||
Forward Mortgage Backed Securities Trades [Member] | Level 1 [Member] | Carrying Value [Member] | ||||||||
Derivative financial instruments: | ||||||||
Forward mortgage-backed securities trades | [2] | (614) | 295 | |||||
Forward Mortgage Backed Securities Trades [Member] | Level 1 [Member] | Fair Value [Member] | ||||||||
Derivative financial instruments: | ||||||||
Forward mortgage-backed securities trades | [2] | (614) | 295 | |||||
Interest Rate Cap [Member] | Level 3 [Member] | Carrying Value [Member] | ||||||||
Derivative financial instruments: | ||||||||
Interest rate caps | [2] | 1,836 | 2,042 | |||||
Interest Rate Cap [Member] | Level 3 [Member] | Fair Value [Member] | ||||||||
Derivative financial instruments: | ||||||||
Interest rate caps | [2] | $ 1,836 | $ 2,042 | |||||
[1] | At December 31, 2016, 2015 and 2014, the balances include $4.9 million, $11.9 million and $21.0 million, respectively, of fair value adjustments. | |||||||
[2] | Measured at fair value on a recurring basis. | |||||||
[3] | Disclosed, but not carried, at fair value. | |||||||
[4] | The carrying values are net of unamortized debt issuance costs and discount. See Note 13 — Borrowings for additional information. | |||||||
[5] | Measured at fair value on a non-recurring basis. | |||||||
[6] | Balances include our impaired government-insured stratum of amortization method MSRs, which is measured at fair value on a non-recurring basis and reported net of the valuation allowance. Before applying the valuation allowance of $28.2 million, the carrying value of the impaired stratum at December 31, 2016 was $172.9 million. At December 31, 2015, the carrying value of this stratum was $146.5 million before applying the valuation allowance of $17.3 million. |
Fair Value - Schedule of Carr72
Fair Value - Schedule of Carrying Amounts and Estimated Fair Values of Financial Instruments and Nonfinancial Assets Measured at Fair Value on a Recurring or Non-recurring basis or Disclosed, but not Carried, at Fair Value (Footnote) (Details) - Impaired Government Insured Stratum [Member] - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Servicing asset at carrying value | $ 172.9 | $ 146.5 |
Valuation allowance of MSRs | $ 28.2 | $ 17.3 |
Fair Value - Summary of Reconci
Fair Value - Summary of Reconciliation of the Changes in Fair Value of Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||||
Total realized and unrealized gains and (losses): | ||||||
Included in earnings | $ (78,300) | $ (90,300) | ||||
Level 3 [Member] | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Beginning balance | 326,404 | (406,749) | $ (514,891) | |||
Purchases, issuances, sales and settlements: | ||||||
Purchases | 1,337 | 3,513 | 8,464 | |||
Issuances | 18,703 | (18,724) | 33,872 | |||
Transfer from MSRs carried at amortized cost | 839,157 | |||||
Transfers from Loans held for sale, at fair value | 110,874 | |||||
Sales | (148) | (72,274) | 0 | |||
Settlements | [1] | 50,290 | 74,965 | (33,483) | ||
Purchases, issuances, sales and settlements, total | 70,182 | 826,637 | 119,727 | |||
Total realized and unrealized gains and (losses): | ||||||
Included in earnings | (52,924) | [2] | (93,484) | [2] | (11,585) | |
Included in Other comprehensive income | 0 | [2] | 0 | [2] | 0 | |
Total realized and unrealized gains and (losses) | (52,924) | [2] | (93,484) | [2] | (11,585) | |
Transfers in and / or out of Level 3 | 0 | 0 | 0 | |||
Ending balance | 343,662 | 326,404 | (406,749) | |||
Loans Held for Investment [Member] | Level 3 [Member] | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Beginning balance | 2,488,253 | 1,550,141 | 618,018 | |||
Purchases, issuances, sales and settlements: | ||||||
Purchases | 0 | 0 | 0 | |||
Issuances | 1,107,046 | 1,008,065 | 816,881 | |||
Transfer from MSRs carried at amortized cost | 0 | |||||
Transfers from Loans held for sale, at fair value | 110,874 | |||||
Sales | 0 | 0 | 0 | |||
Settlements | [1] | (243,596) | (151,134) | (99,923) | ||
Purchases, issuances, sales and settlements, total | 863,450 | 856,931 | 827,832 | |||
Total realized and unrealized gains and (losses): | ||||||
Included in earnings | 214,013 | [2] | 81,181 | [2] | 104,291 | |
Included in Other comprehensive income | 0 | [2] | 0 | [2] | 0 | |
Total realized and unrealized gains and (losses) | 214,013 | [2] | 81,181 | [2] | 104,291 | |
Transfers in and / or out of Level 3 | 0 | 0 | 0 | |||
Ending balance | 3,565,716 | 2,488,253 | 1,550,141 | |||
HMBS - Related Borrowings [Member] | Level 3 [Member] | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Beginning balance | (2,391,362) | (1,444,252) | (615,576) | |||
Purchases, issuances, sales and settlements: | ||||||
Purchases | 0 | 0 | 0 | |||
Issuances | (1,086,795) | (1,024,361) | (783,009) | |||
Transfer from MSRs carried at amortized cost | 0 | |||||
Transfers from Loans held for sale, at fair value | 0 | |||||
Sales | 0 | 0 | 0 | |||
Settlements | [1] | 230,045 | 153,016 | 47,077 | ||
Purchases, issuances, sales and settlements, total | (856,750) | (871,345) | (735,932) | |||
Total realized and unrealized gains and (losses): | ||||||
Included in earnings | (185,669) | [2] | (75,765) | [2] | (92,744) | |
Included in Other comprehensive income | 0 | [2] | 0 | [2] | 0 | |
Total realized and unrealized gains and (losses) | (185,669) | [2] | (75,765) | [2] | (92,744) | |
Transfers in and / or out of Level 3 | 0 | 0 | 0 | |||
Ending balance | (3,433,781) | (2,391,362) | (1,444,252) | |||
Mortgage Backed Securities [Member] | Level 3 [Member] | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Beginning balance | 7,985 | 7,335 | 0 | |||
Purchases, issuances, sales and settlements: | ||||||
Purchases | 0 | 0 | 7,677 | |||
Issuances | 0 | 0 | 0 | |||
Transfer from MSRs carried at amortized cost | 0 | |||||
Transfers from Loans held for sale, at fair value | 0 | |||||
Sales | 0 | 0 | 0 | |||
Settlements | [1] | 0 | 0 | 0 | ||
Purchases, issuances, sales and settlements, total | 0 | 0 | 7,677 | |||
Total realized and unrealized gains and (losses): | ||||||
Included in earnings | 357 | [2] | 650 | [2] | (342) | |
Included in Other comprehensive income | 0 | [2] | 0 | [2] | 0 | |
Total realized and unrealized gains and (losses) | 357 | [2] | 650 | [2] | (342) | |
Transfers in and / or out of Level 3 | 0 | 0 | ||||
Ending balance | 8,342 | 7,985 | 7,335 | |||
Financing Liability - MSRs Pledged [Member] | Level 3 [Member] | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Beginning balance | [3] | (541,704) | (614,441) | (633,804) | ||
Purchases, issuances, sales and settlements: | ||||||
Purchases | [3] | 0 | 0 | 0 | ||
Issuances | [3] | 0 | 0 | 0 | ||
Transfer from MSRs carried at amortized cost | [3] | 0 | ||||
Transfers from Loans held for sale, at fair value | [3] | 0 | ||||
Sales | [3] | 0 | 0 | 0 | ||
Settlements | [1],[3] | 63,997 | 72,737 | 19,363 | ||
Purchases, issuances, sales and settlements, total | [3] | 63,997 | 72,737 | 19,363 | ||
Total realized and unrealized gains and (losses): | ||||||
Included in earnings | [3] | 0 | [2] | 0 | [2] | 0 |
Included in Other comprehensive income | [3] | 0 | [2] | 0 | [2] | 0 |
Total realized and unrealized gains and (losses) | [3] | 0 | [2] | 0 | [2] | 0 |
Transfers in and / or out of Level 3 | [3] | 0 | 0 | 0 | ||
Ending balance | [3] | (477,707) | (541,704) | (614,441) | ||
Derivatives [Member] | Level 3 [Member] | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Beginning balance | 2,042 | 567 | 442 | |||
Purchases, issuances, sales and settlements: | ||||||
Purchases | 1,337 | 2,506 | 787 | |||
Issuances | 0 | 0 | 0 | |||
Transfer from MSRs carried at amortized cost | 0 | |||||
Transfers from Loans held for sale, at fair value | 0 | |||||
Sales | 0 | 0 | 0 | |||
Settlements | [1] | (156) | 346 | 0 | ||
Purchases, issuances, sales and settlements, total | 1,181 | 2,852 | 787 | |||
Total realized and unrealized gains and (losses): | ||||||
Included in earnings | (1,387) | [2] | (1,377) | [2] | (662) | |
Included in Other comprehensive income | 0 | [2] | 0 | [2] | 0 | |
Total realized and unrealized gains and (losses) | (1,387) | [2] | (1,377) | [2] | (662) | |
Transfers in and / or out of Level 3 | 0 | 0 | 0 | |||
Ending balance | 1,836 | 2,042 | 567 | |||
MSRs [Member] | Level 3 [Member] | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Beginning balance | 761,190 | 93,901 | 116,029 | |||
Purchases, issuances, sales and settlements: | ||||||
Purchases | 0 | 1,007 | 0 | |||
Issuances | (1,548) | (2,428) | 0 | |||
Transfer from MSRs carried at amortized cost | 839,157 | |||||
Transfers from Loans held for sale, at fair value | 0 | |||||
Sales | (148) | (72,274) | 0 | |||
Settlements | [1] | 0 | 0 | 0 | ||
Purchases, issuances, sales and settlements, total | (1,696) | 765,462 | 0 | |||
Total realized and unrealized gains and (losses): | ||||||
Included in earnings | (80,238) | [2] | (98,173) | [2] | (22,128) | |
Included in Other comprehensive income | 0 | [2] | 0 | [2] | 0 | |
Total realized and unrealized gains and (losses) | (80,238) | [2] | (98,173) | [2] | (22,128) | |
Transfers in and / or out of Level 3 | 0 | 0 | 0 | |||
Ending balance | $ 679,256 | $ 761,190 | $ 93,901 | |||
[1] | Settlements for Loans held for investment - reverse mortgages consist chiefly of principal payments received but also may include non-cash settlements of loans. | |||||
[2] | Total gains (losses) attributable to derivative financial instruments still held at December 31, 2016 and 2015 were $0.3 million and $(1.0) million for 2016 and 2015, respectively. Total losses for 2016 and 2015 attributable to MSRs still held at December 31, 2016 and 2015 were $78.3 million and $90.3 million, respectively. | |||||
[3] | 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 2015 and 2014 include $2.2 million and $2.0 million, respectively, of such reimbursements. There were no such payments in 2016. |
Fair Value - Summary of Recon74
Fair Value - Summary of Reconciliation of the Changes in Fair Value of Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis (Footnote) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Gain (loss) attributable to derivatives | $ 0.3 | $ (1) | |
Losses attributable to MSRs held | $ (78.3) | (90.3) | |
NRZ [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Reimbursement to HLSS for loss of servicing revenues | $ 2.2 | $ 2 |
Fair Value Schedule of Signific
Fair Value Schedule of Significant Assumptions used in Valuation (Details) - $ / loan | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Loans Held for Investment [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Life | 6 years 18 days | 6 years 5 months 26 days |
Repayment rate | 20.91% | 19.85% |
Weighted average discount rate | 3.32% | 3.36% |
Mortgage Servicing Rights - Amortized Costs [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Weighted average prepayment speed | 8.90% | 11.34% |
Weighted average delinquency rate | 11.08% | 13.27% |
Advance financing cost | 5 years | 5 years |
Interest rate for computing float earnings | 5 years | 5 years |
Weighted average discount rate | 8.90% | 9.41% |
Weighted average cost to service (in dollars) | 108 | 92 |
Fair Value Agency Mortgage Servicing Rights [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Weighted average prepayment speed | 8.36% | 9.91% |
Weighted average delinquency rate | 0.99% | 0.82% |
Advance financing cost | 5 years | 5 years |
Interest rate for computing float earnings | 5 years | 5 years |
Weighted average discount rate | 9.00% | 9.00% |
Weighted average cost to service (in dollars) | 64 | 71 |
Fair Value Non-Agency Mortgage Servicing Rights [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Weighted average prepayment speed | 16.47% | 16.83% |
Weighted average delinquency rate | 29.32% | 27.99% |
Weighted average discount rate | 14.93% | 15.03% |
Weighted average cost to service (in dollars) | 307 | 321 |
Mortgage Servicing Rights Pledged [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Weighted average prepayment speed | 16.96% | 17.43% |
Weighted average delinquency rate | 29.80% | 29.83% |
Weighted average discount rate | 14.85% | 14.92% |
Weighted average cost to service (in dollars) | 313 | 326 |
HMBS - Related Borrowings [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Life | 5 years 1 month 2 days | 5 years 4 months 20 days |
Repayment rate | 20.91% | 19.85% |
Weighted average discount rate | 2.70% | 2.78% |
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 | 1 month |
Fair value input, interest rate | 3.50% | 3.50% |
LIBOR [Member] | Mortgage Servicing Rights Pledged [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Interest rate for computing float earnings | 1 month | 1 month |
Fair value input, interest rate | 3.50% | 3.50% |
Minimum [Member] | Loans Held for Investment [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Life | 5 years 6 months 11 days | 6 years 1 month 10 days |
Repayment rate | 5.23% | 4.96% |
Minimum [Member] | HMBS - Related Borrowings [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Life | 4 years 6 months | 4 years 8 months 23 days |
Repayment rate | 5.23% | 4.96% |
Maximum [Member] | Loans Held for Investment [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Life | 8 years 8 months 1 day | 9 years 8 months 12 days |
Repayment rate | 53.75% | 53.75% |
Maximum [Member] | HMBS - Related Borrowings [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Life | 8 years 8 months 1 day | 9 years 8 months 12 days |
Repayment rate | 53.75% | 53.75% |
Loans Held for Sale - Summary o
Loans Held for Sale - Summary of Activity in Balance of Loans Held for Sale, at Fair Value (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||||
Movement In Loans Held For Sale At Fair Value [Roll Forward] | ||||||
Beginning balance | $ 309,054 | [1] | $ 401,120 | [1] | $ 503,753 | |
Originations and purchases | 4,211,871 | 3,944,509 | 4,967,767 | |||
Proceeds from sales | (4,236,158) | (4,061,217) | (5,001,935) | |||
Principal collections | (11,620) | (8,647) | (13,300) | |||
Transfers to loans held for investment - reverse mortgages | 0 | 0 | (110,874) | |||
Transfers from loans held for sale at lower of cost or fair value | 3,266 | 1,200 | 0 | |||
Gain on sale of loans | 13,421 | 42,053 | 49,533 | |||
Increase (decrease) in fair value of loans | (7,030) | (9,066) | 6,198 | |||
Other | 1,828 | (898) | (22) | |||
Ending balance | [1] | $ 284,632 | $ 309,054 | $ 401,120 | ||
[1] | At December 31, 2016, 2015 and 2014, the balances include $4.9 million, $11.9 million and $21.0 million, respectively, of fair value adjustments. |
Loans Held for Sale - Summary77
Loans Held for Sale - Summary of Activity in Balance of Loans Held for Sale, at Fair Value (Footnote) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Receivables [Abstract] | |||
Fair value adjustments of loans held-for-sale | $ 4.9 | $ 11.9 | $ 21 |
Loans Held for Sale - Narrative
Loans Held for Sale - Narrative (Details) - USD ($) $ in Thousands | May 02, 2014 | May 01, 2014 | Mar. 03, 2014 | May 31, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Value assigned to MSRs retained on transfers of forward loans | $ 36,000 | $ 36,000 | $ 39,800 | |||||
Gains on sales of repurchased Ginnie Mae Loans which are carried at the lower of cost or fair value | 24,600 | 23,000 | 54,700 | |||||
Gain on loans held for sale, net | 90,391 | 134,969 | 134,297 | |||||
Payments to purchase loans held-for-sale | 6,090,432 | 5,000,681 | 7,430,340 | |||||
Line of Credit [Member] | Lending [Member] | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Loans held for sale, at fair value, UPB pledged to secure warehouse lines of credit | 279,000 | |||||||
Line of Credit [Member] | Servicing [Member] | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Loans held for sale, at fair value, UPB pledged to secure warehouse lines of credit | 12,700 | |||||||
Delinquent FHA Insured Loans [Member] | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
UPB of loans held for sale | $ 549,400 | |||||||
Total gains on sales of loans | 7,200 | |||||||
NRZ [Member] | Delinquent FHA Insured Loans [Member] | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Loan and related advances proceeds | $ 612,300 | |||||||
Unrelated Party [Member] | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
UPB of loans held for sale | $ 33,000 | $ 42,700 | ||||||
Loan and related advances proceeds | $ 462,500 | |||||||
Gain on loans held for sale, net | 1,300 | $ 7,200 | $ 12,900 | |||||
Delinquent FHA Insured Loans [Member] | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
UPB of loans held for sale | $ 451,000 | |||||||
Payments to purchase loans held-for-sale | $ 479,600 | |||||||
FHA Buyout Loans [Member] | NRZ [Member] | Delinquent FHA Insured Loans [Member] | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Loan and related advances proceeds | 556,600 | |||||||
Servicing Advances [Member] | NRZ [Member] | Delinquent FHA Insured Loans [Member] | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Loan and related advances proceeds | $ 20,200 | 55,700 | ||||||
Advances [Member] | NRZ [Member] | Delinquent FHA Insured Loans [Member] | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Loan and related advances proceeds | 13,100 | |||||||
Loans Held for Investment [Member] | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Gain on loans held for sale, net | $ 125,700 | $ 112,600 | $ 72,700 |
Loans Held for Sale - Summary79
Loans Held for Sale - Summary of Activity in Balance of Loans Held for Sale, at Lower of Cost or Fair Value (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||||
Movement In Loans Held For Sale At Fair Value [Roll Forward] | ||||||
Beginning balance | $ 104,992 | [1] | $ 87,492 | [1] | $ 62,907 | |
Purchases | 1,878,561 | 1,056,172 | 2,462,573 | |||
Proceeds from sales | (1,699,427) | (1,001,939) | (2,067,965) | |||
Principal collections | (22,607) | (53,400) | (262,196) | |||
Transfers to accounts receivable | (256,336) | (53,468) | (114,675) | |||
Transfers to real estate owned | (7,675) | (18,594) | (8,808) | |||
Transfers to loans held for sale at fair value | (3,266) | (1,200) | 0 | |||
Gain on sale of loans | 24,565 | 43,449 | 31,853 | |||
Decrease (increase) in valuation allowance | 4,594 | 35,018 | (18,965) | |||
Other | 5,973 | 11,462 | 2,768 | |||
Ending balance | [1] | $ 29,374 | $ 104,992 | $ 87,492 | ||
[1] | At December 31, 2016, 2015 and 2014, the balances include $24.8 million, $85.9 million and $42.0 million, respectively, of loans that we were required to repurchase from Ginnie Mae guaranteed securitizations as part of our servicing obligations. Repurchased loans are modified or otherwise remediated through loss mitigation activities or are reclassified to receivables. |
Loans Held for Sale - Summary80
Loans Held for Sale - Summary of Activity in Balance of Loans Held for Sale, at Lower of Cost or Fair Value (Footnote) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Ginnie Mae [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans held for sale, at lower of cost or fair value | $ 24.8 | $ 85.9 | $ 42 |
Loans Held for Sale Summary of
Loans Held for Sale Summary of Changes in Valuation Allowance of Loans Held for Sale (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Receivables [Abstract] | |||
Beginning balance | $ 14,658 | $ 49,676 | $ 30,711 |
Provision | 3,599 | (400) | (1,301) |
Transfer from liability for indemnification obligations | 2,368 | 1,180 | 20,441 |
Sales of loans | (10,208) | (37,776) | (7,614) |
Other | (353) | 1,978 | 7,439 |
Ending balance | $ 10,064 | $ 14,658 | $ 49,676 |
Loans Held for Sale - Summary82
Loans Held for Sale - Summary of Activity in Gain on Loans Held for Sale, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Loans Held For Sale At Fair Value [Abstract] | |||
Gain on sales of loans, net | $ 93,308 | $ 152,970 | $ 168,449 |
Change in fair value of IRLCs | (55) | 14 | (25,822) |
Change in fair value of loans held for sale | 4,595 | (8,525) | 10,489 |
Loss on economic hedge instruments | (6,592) | (8,675) | (17,214) |
Other | (865) | (815) | (1,605) |
Gain on loans held for sale, net | $ 90,391 | $ 134,969 | $ 134,297 |
Advances - Schedule of Advance
Advances - Schedule of Advance Payments by Financial Institution on Foreclosed Properties (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Advances On Behalf of Borrowers [Line Items] | ||||
Advances | $ 295,834 | $ 486,199 | ||
Allowance for losses | (37,952) | (41,901) | $ (70,034) | $ (38,377) |
Advances, net | 257,882 | 444,298 | $ 893,914 | $ 890,832 |
Principal And Interest [Member] | ||||
Advances On Behalf of Borrowers [Line Items] | ||||
Advances | 31,334 | 81,681 | ||
Taxes And Insurance [Member] | ||||
Advances On Behalf of Borrowers [Line Items] | ||||
Advances | 170,131 | 278,487 | ||
Foreclosures Bankruptcy And Other [Member] | ||||
Advances On Behalf of Borrowers [Line Items] | ||||
Advances | $ 94,369 | $ 126,031 |
Advances - Narrative (Details)
Advances - Narrative (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Advances [Abstract] | ||
Sold Advances | $ 29 | $ 86.4 |
Advances - Schedule of Activity
Advances - Schedule of Activity in Advances (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Advances [Roll Forward] | ||||
Advances, beginning balance | $ 444,298 | $ 893,914 | $ 890,832 | |
Acquisitions | [1] | 0 | 0 | 99,319 |
Transfers to match funded advances | 0 | 0 | (10,156) | |
Sales of advances | [2] | (24,631) | (253,335) | 0 |
Collections of advances, charge-offs and other, net | (165,734) | (224,414) | (54,424) | |
Decrease (increase) in allowance for losses | 3,949 | 28,133 | (31,657) | |
Advances, ending balance | $ 257,882 | $ 444,298 | $ 893,914 | |
[1] | Servicing advances acquired primarily in connection with the acquisition of MSRs. Acquisitions in 2014 include advances acquired in connection with the purchase of loans through the Ginnie Mae EBO program. | |||
[2] | Servicing advances sold primarily in connection with sales of MSRs which met the requirements for sale accounting and which were derecognized from our financial statements at the time of the sale. However, advances sold during 2014 in connection with the sale of loans purchased through the Ginnie Mae EBO program did not qualify as sales for accounting purposes and were accounted for as a financing. |
Advances Schedule of Change in
Advances Schedule of Change in Allowance for Losses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Advances [Abstract] | |||
Beginning balance | $ 41,901 | $ 70,034 | $ 38,377 |
Provision | (2,043) | 61,445 | 83,164 |
Recoveries (charge-offs), net and other | (1,906) | (89,578) | (51,507) |
Ending balance | $ 37,952 | $ 41,901 | $ 70,034 |
Match Funded Advances - Schedul
Match Funded Advances - Schedule of Match Funded Advances on Residential Loans (Details) - Residential Mortgage [Member] - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Match Funded Advances [Line Items] | ||||
Principal and interest | $ 711,272 | $ 948,376 | ||
Taxes and insurance | 530,946 | 608,404 | ||
Foreclosures, bankruptcy, real estate and other | 209,746 | 149,988 | ||
Match funded advances | $ 1,451,964 | $ 1,706,768 | $ 2,409,442 | $ 2,552,383 |
Match Funded Advances - Sched88
Match Funded Advances - Schedule of Activity in Match Funded Advances (Details) - Residential Mortgage [Member] - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Match Funded Advances [Roll Forward] | ||||
Beginning balance | $ 1,706,768 | $ 2,409,442 | $ 2,552,383 | |
Acquisitions | [1] | 0 | 0 | 85,521 |
Transfers from advances | [2] | 0 | 0 | 10,156 |
Sales of advances | (8,923) | (308,990) | 0 | |
Collections of pledged advances, net | (245,881) | (393,684) | (238,618) | |
Ending balance | $ 1,451,964 | $ 1,706,768 | $ 2,409,442 | |
[1] | Servicing advances acquired primarily in connection with the acquisition of MSRs that were pledged to advance facilities at the date of acquisition. | |||
[2] | New servicing advances initially classified as Advances at the date of payment and subsequently pledged to advance financing facilities. |
Mortgage Servicing - Summary of
Mortgage Servicing - Summary of Activity in Carrying Value of Amortization Method Servicing Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | 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 year | 679,256 | 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 | 1,953,352 | |
Fair value election - transfer of MSRs carried at fair value | [1] | 0 | (787,142) | 0 |
Additions recognized in connection with business acquisitions | [2],[3] | 0 | 0 | 20,378 |
Additions recognized in connection with asset acquisitions | 17,356 | 12,356 | 35,326 | |
Additions recognized on the sale of mortgage loans | 37,231 | 34,961 | 63,310 | |
Sales | (24,452) | (586,352) | (137) | |
Servicing transfers and adjustments | 0 | 0 | (1,763) | |
Mortgage servicing rights, gross | 407,514 | 493,914 | 2,070,466 | |
Increase in impairment valuation allowance | [4] | (10,813) | (17,341) | 0 |
Amortization | (32,979) | (99,194) | (250,375) | |
Ending balance | 363,722 | 377,379 | 1,820,091 | |
Estimated fair value at end of year | $ 467,911 | $ 461,555 | $ 2,237,703 | |
[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] | As of the February 15, 2013 acquisition date, the purchase of certain MSRs from Residential Capital, LLC (ResCap) was not complete pending the receipt of certain consents and court approvals. Subsequent to the acquisition, we obtained the required consents and approvals for a portion of these MSRs and, in 2014, paid an additional purchase price of $54.2 million, which included $11.4 million to acquire the MSRs and $39.2 million to acquire the related advances. We recorded a contingent asset effective as of the ResCap acquisition date. | |||
[3] | On January 31, 2014, we increased our ownership in Ocwen Structured Investments, LLC (OSI) from 26.00% to 87.35%. The acquired net assets were $20.0 million and consisted primarily of MSRs ($9.0 million), mortgage-backed securities ($7.7 million) and cash ($3.2 million). | |||
[4] | Impairment of MSRs is recognized in Servicing and origination expense in the consolidated statements of operations. |
Mortgage Servicing - Summary 90
Mortgage Servicing - Summary of Activity in Carrying Value of Amortization Method Servicing Assets (Footnote) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Jan. 31, 2014 | Jan. 30, 2014 | |
Servicing Asset at Amortized Cost [Line Items] | |||||
Fair value measurement of non-agency MSRs, cumulative-effect on retained earnings | $ 0 | $ 52,015 | |||
Payments to acquire advances and MSRs | $ 85,521 | ||||
Payments to acquire MSRs | 17,356 | 12,355 | 22,488 | ||
Payments to acquire advances | $ 0 | 0 | 60,482 | ||
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 | ||||
ResCap [Member] | |||||
Servicing Asset at Amortized Cost [Line Items] | |||||
Payments to acquire advances and MSRs | 54,200 | ||||
Payments to acquire MSRs | 11,400 | ||||
Payments to acquire advances | $ 39,200 | ||||
Ocwen Structured Investments, LLC (OSI) [Member] | |||||
Servicing Asset at Amortized Cost [Line Items] | |||||
Percentage of ownership interests | 87.35% | 26.00% | |||
Acquired net assets | $ 20,000 | ||||
Mortgage servicing rights | 9,000 | ||||
Mortgage-backed securities | 7,700 | ||||
Cash acquired | $ 3,200 |
Mortgage Servicing - Schedule o
Mortgage Servicing - Schedule of Estimated Amortization Expense for MSRs (Details) - Mortgage Servicing Rights - Amortized Costs [Member] $ in Thousands | Dec. 31, 2015USD ($) |
Servicing Asset at Amortized Cost [Line Items] | |
2,017 | $ 45,960 |
2,018 | 37,158 |
2,019 | 35,264 |
2,020 | 35,832 |
2,021 | $ 33,134 |
Mortgage Servicing - Summary 92
Mortgage Servicing - Summary of Activity Related to Fair Value Servicing Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Servicing Asset at Fair Value, Amount [Roll Forward] | ||||
Beginning balance | $ 761,190 | $ 93,901 | ||
Fair value election - transfer from MSRs carried at amortized cost | 0 | 787,142 | ||
Cumulative effect of fair value election | 0 | 52,015 | ||
Sales | (148) | (72,274) | ||
Additions recognized on the sale of residential mortgage loans | 0 | 1,007 | ||
Servicing transfers and adjustments | (1,548) | (2,428) | ||
Changes in valuation inputs or other assumptions | [1] | 305 | 10,045 | |
Realization of expected future cash flows and other changes | [1] | (80,543) | (108,218) | |
Ending balance | 679,256 | 761,190 | $ 93,901 | |
Fair Value Agency Mortgage Servicing Rights [Member] | ||||
Servicing Asset at Fair Value, Amount [Roll Forward] | ||||
Beginning balance | 15,071 | 93,901 | 116,029 | |
Fair value election - transfer from MSRs carried at amortized cost | 0 | 0 | 0 | |
Cumulative effect of fair value election | 0 | 0 | 0 | |
Sales | (3) | (70,930) | 0 | |
Additions recognized on the sale of residential mortgage loans | 0 | 0 | 0 | |
Servicing transfers and adjustments | 0 | 0 | 0 | |
Changes in valuation inputs or other assumptions | [1] | 305 | (639) | (15,028) |
Realization of expected future cash flows and other changes | [1] | (2,016) | (7,261) | (7,100) |
Ending balance | 13,357 | 15,071 | 93,901 | |
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 from MSRs carried at amortized cost | 0 | 787,142 | ||
Cumulative effect of fair value election | 0 | 52,015 | ||
Sales | (145) | (1,344) | ||
Additions recognized on the sale of residential mortgage loans | 0 | 1,007 | ||
Servicing transfers and adjustments | (1,548) | (2,428) | ||
Changes in valuation inputs or other assumptions | [1] | 0 | 10,684 | |
Realization of expected future cash flows and other changes | [1] | (78,527) | (100,957) | |
Ending balance | $ 665,899 | $ 746,119 | $ 0 | |
[1] | Changes in fair value are recognized in Servicing and origination expense in the consolidated statements of operations. |
Mortgage Servicing - Summary 93
Mortgage Servicing - Summary of Estimated Change in the Value of MSRs Carried at Fair Value (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Transfers and Servicing [Abstract] | |
Weighted average prepayment speeds, 10% | $ (64,604) |
Weighted average prepayment speeds, 20% | (131,414) |
Discount rate (Option-adjusted spread), 10% | (19,043) |
Discount rate (Option-adjusted spread), 20% | $ (34,224) |
Mortgage Servicing - Schedule94
Mortgage Servicing - Schedule of Composition of Primary Servicing and Subservicing Portfolios by Type of Property Serviced as Measured by UPB (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Schedule of Servicing and Subservicing Portfolio [Line Items] | ||||
Servicing | $ 86,049,298 | $ 100,058,745 | $ 208,135,523 | |
Subservicing | 4,423,017 | 13,869,826 | 29,956,661 | |
NRZ | [1] | 118,712,748 | 137,142,809 | 160,785,280 |
Assets Serviced | 209,185,063 | 251,071,380 | 398,877,464 | |
Residential [Member] | ||||
Schedule of Servicing and Subservicing Portfolio [Line Items] | ||||
Servicing | 86,049,298 | 100,058,745 | 208,135,523 | |
Subservicing | 4,330,084 | 13,764,558 | 29,806,924 | |
NRZ | [1] | 118,712,748 | 137,142,809 | 160,785,280 |
Assets Serviced | 209,092,130 | 250,966,112 | 398,727,727 | |
Commercial [Member] | ||||
Schedule of Servicing and Subservicing Portfolio [Line Items] | ||||
Servicing | 0 | 0 | 0 | |
Subservicing | 92,933 | 105,268 | 149,737 | |
NRZ | [1] | 0 | 0 | 0 |
Assets Serviced | $ 92,933 | $ 105,268 | $ 149,737 | |
[1] | UPB of loans serviced for which the Rights to MSRs have been sold to NRZ. |
Mortgage Servicing - Narrative
Mortgage Servicing - Narrative (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016USD ($)Loan | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Transfers and Servicing [Abstract] | |||
UPB of small-balance commercial assets | $ 1,400 | $ 1,800 | $ 2,300 |
Number of non-agency and whole loans servicing agreements | Loan | 3,796 | ||
Number of non-agency and whole loans servicing agreements with minimum servicer ratings | Loan | 718 | ||
Unpaid principal balance of non-agency and whole loans servicing agreements with minimum servicer ratings | $ 34,100 | ||
Number of non-agency and whole loans servicing agreements with termination rights triggered | Loan | 174 | ||
Unpaid principal balance of non-agency and whole loans servicing agreements with termination rights triggered | $ 10,800 | ||
Percentage of non-agency and whole loans servicing agreements with termination rights triggered of servicing portfolio | 6.80% | ||
Float balances | $ 2,100 | $ 2,200 | $ 4,300 |
Income recognized in connection with execution of clean-up call on securitization trusts | 14.8 | ||
Discount on repurchase price | $ 2.8 |
Mortgage Servicing - Summary 96
Mortgage Servicing - Summary of Geographic Distributions of UPB and Count of Residential Loans and Real Estate Serviced (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016USD ($)loan | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Mortgage Loans on Real Estate [Line Items] | |||
Amount | $ 209,185,063 | $ 251,071,380 | $ 398,877,464 |
Residential Mortgage [Member] | |||
Mortgage Loans on Real Estate [Line Items] | |||
Amount | $ 209,092,130 | $ 250,966,112 | $ 398,727,727 |
Residential loans, count | loan | 1,393,766 | ||
California [Member] | Residential Mortgage [Member] | |||
Mortgage Loans on Real Estate [Line Items] | |||
Amount | $ 48,094,471 | ||
Residential loans, count | loan | 191,031 | ||
New York [Member] | Residential Mortgage [Member] | |||
Mortgage Loans on Real Estate [Line Items] | |||
Amount | $ 18,741,164 | ||
Residential loans, count | loan | 79,197 | ||
Florida [Member] | Residential Mortgage [Member] | |||
Mortgage Loans on Real Estate [Line Items] | |||
Amount | $ 17,282,020 | ||
Residential loans, count | loan | 126,949 | ||
New Jersey [Member] | Residential Mortgage [Member] | |||
Mortgage Loans on Real Estate [Line Items] | |||
Amount | $ 10,254,163 | ||
Residential loans, count | loan | 49,857 | ||
Texas [Member] | Residential Mortgage [Member] | |||
Mortgage Loans on Real Estate [Line Items] | |||
Amount | $ 9,522,228 | ||
Residential loans, count | loan | 109,763 | ||
Other [Member] | Residential Mortgage [Member] | |||
Mortgage Loans on Real Estate [Line Items] | |||
Amount | $ 105,198,084 | ||
Residential loans, count | loan | 836,969 |
Mortgage Servicing - Schedule97
Mortgage Servicing - Schedule of Components of Servicing and Subservicing Fees (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Transfers and Servicing [Abstract] | |||
Servicing | $ 293,210 | $ 453,445 | $ 627,678 |
Subservicing | 21,427 | 58,384 | 128,797 |
NRZ | 633,545 | 694,833 | 736,122 |
Servicing and Subservicing fees, total | 948,182 | 1,206,662 | 1,492,597 |
Home Affordable Modification Program (HAMP) fees | 110,367 | 135,036 | 141,121 |
Late charges | 66,709 | 82,690 | 121,618 |
Loan collection fees | 27,213 | 31,763 | 33,983 |
Custodial accounts (float earnings) | 8,969 | 15,870 | 6,693 |
Other | 25,180 | 59,776 | 98,163 |
Fees, total | $ 1,186,620 | $ 1,531,797 | $ 1,894,175 |
Receivables - Schedule of Recei
Receivables - Schedule of Receivables (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | |
Receivables [Abstract] | |||
Government-insured loan claims | [1] | $ 133,063 | $ 71,405 |
Due from custodial accounts | 44,761 | 13,800 | |
Reimbursable expenses | 29,358 | 29,856 | |
Amount due on sales of mortgage servicing rights and advances | 2,871 | 94,629 | |
Other | 46,052 | 32,879 | |
Servicing | 256,105 | 242,569 | |
Income taxes receivable | 61,932 | 53,519 | |
Other receivables | 21,125 | 29,818 | |
Other receivables, gross | 339,162 | 325,906 | |
Allowance for losses | [1] | (73,442) | (38,925) |
Receivables, total | $ 265,720 | $ 286,981 | |
[1] | At December 31, 2016 and 2015, the allowance for losses related entirely to receivables of our Servicing business. Allowance for losses related to defaulted FHA or VA insured loans repurchased from Ginnie Mae guaranteed securitizations (government-insured loan claims) at December 31, 2016 and 2015 were $53.3 million and $20.6 million, respectively. |
Receivables - Schedule of Rec99
Receivables - Schedule of Receivables (Footnote) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Receivables [Abstract] | ||
Allowance for losses related to FHA or VA insured loans | $ 53.3 | $ 20.6 |
Premises and Equipment - Schedu
Premises and Equipment - Schedule of Premises and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | $ 148,117 | $ 118,843 |
Less accumulated depreciation and amortization | (85,373) | (61,217) |
Premises and equipment, net | 62,744 | 57,626 |
Computer Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | 58,322 | 45,411 |
Computer Hardware [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | 35,192 | 22,817 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | 25,975 | 23,326 |
Office Equipment and Other [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | 12,114 | 11,761 |
Buildings [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | 9,689 | 9,689 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | $ 6,825 | $ 5,839 |
Goodwill - Narrative (Details)
Goodwill - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Goodwill [Line Items] | |||
Goodwill impairment loss | $ 0 | $ 0 | $ 420,201 |
Servicing [Member] | |||
Goodwill [Line Items] | |||
Goodwill impairment loss | 371,100 | ||
Lending [Member] | |||
Goodwill [Line Items] | |||
Goodwill impairment loss | $ 49,100 |
Other Assets - Schedule of Othe
Other Assets - Schedule of Other Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | |
Other Assets [Abstract] | |||
Contingent loan repurchase asset | [1] | $ 246,081 | $ 346,984 |
Prepaid expenses | [2] | 57,188 | 69,805 |
Debt service accounts | [3] | 42,822 | 87,328 |
Automotive dealer financing notes, net | [4] | 33,224 | 2,538 |
Derivatives, at fair value | 9,279 | 6,367 | |
Prepaid lender fees, net | [5] | 9,023 | 19,496 |
Prepaid income taxes | [6] | 8,392 | 11,749 |
Mortgage-backed securities, at fair value | 8,342 | 7,985 | |
Real estate | 5,249 | 20,489 | |
Other | 15,772 | 13,754 | |
Other assets | $ 435,372 | $ 586,495 | |
[1] | In connection with the Ginnie Mae EBO program, our agreements provide either that: (a) we have the right, but not the obligation, to repurchase previously transferred mortgage loans under certain conditions, including the mortgage loans becoming eligible for pooling under a program sponsored by Ginnie Mae; or (b) we have the obligation to repurchase previously transferred mortgage loans that have been subject to a successful trial modification before any permanent modification is made. Once these conditions are met, we have effectively regained control over the mortgage loan(s), and under GAAP, must re-recognize the loans on our consolidated balance sheets and establish a corresponding repurchase liability. With respect to those loans that we have the right, but not the obligation, to repurchase under the applicable agreement, this requirement applies regardless of whether we have any intention to repurchase the loan. We re-recognize the 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 December 31, 2016 and 2015 includes the remaining balance of $34.9 million and $41.3 million, respectively. | ||
[3] | Under our advance 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. | ||
[4] | These notes represent short-term inventory-secured floor plan loans provided to independent used car dealerships through our ACS venture. Automotive dealer financing notes are net of an allowance of $4.4 million and $0.03 million at December 31, 2016 and 2015, respectively. We recognized a provision for losses on these notes of $4.3 million in 2016. | ||
[5] | We amortize these costs to the earlier of the scheduled amortization date, contractual maturity date or prepayment date of the debt. | ||
[6] | The deferred tax effects of intra-entity transfers of MSRs have been recognized as prepaid income taxes and are presently being amortized to Income tax expense over 7-year periods through 2021. |
Other Assets - Schedule of O103
Other Assets - Schedule of Other Assets (Footnote) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Other Assets [Abstract] | ||
Escrow deposit for payment of representation, warranty and indemnification claims | $ 52,900 | |
Pledge Advance Remittance Period | 2 years | |
Prepaid expenses | $ 34,900 | $ 41,300 |
Allowance for automotive dealer financing notes | 4,400 | $ 30 |
Provision for loan losses on automotive dealer financing notes | $ 4,300 | |
Period for deferred tax effects being amortized to income tax expense | 7 years |
Borrowings - Schedule of Match
Borrowings - Schedule of Match Funded Liabilities (Details) - USD ($) | Dec. 15, 2016 | Mar. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Debt Instrument [Line Items] | |||||
Maturity | Dec. 31, 2020 | ||||
Available borrowing capacity | $ 0 | ||||
Match funded liabilities | $ 1,280,997,000 | $ 1,584,049,000 | |||
Weighted average interest rate | 3.21% | 3.15% | |||
Ocwen Master Advance Receivables Trust (OMART) [Member] | |||||
Debt Instrument [Line Items] | |||||
Available borrowing capacity | [1] | $ 196,818,000 | |||
Match funded liabilities | 1,123,182,000 | $ 1,393,156,000 | |||
Total Ocwen Servicer Advance Receivables Trust III (OSARTIII) [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest Rate | 0.75% | ||||
Available borrowing capacity | [1],[2] | 11,907,000 | |||
Match funded liabilities | [2] | 63,093,000 | 51,415,000 | ||
Total Ocwen Freddie Advance Funding (OFAF) [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest Rate | 1.25% | ||||
Available borrowing capacity | [1],[3] | 65,278,000 | |||
Match funded liabilities | [3] | $ 94,722,000 | 139,478,000 | ||
Advance Receivables Backed Notes - Series 2014-VF3, Class A [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||||
Debt Instrument [Line Items] | |||||
Maturity | [4],[5] | Aug. 31, 2047 | |||
Amortization Date | [4],[5] | Aug. 2017 | |||
Available borrowing capacity | [1],[4] | $ 53,287,000 | |||
Match funded liabilities | [4] | $ 59,892,000 | 132,651,000 | ||
Advance Receivables Backed Notes - Series 2014-VF3, Class B [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||||
Debt Instrument [Line Items] | |||||
Maturity | [4],[5] | Aug. 31, 2047 | |||
Amortization Date | [4],[5] | Aug. 2017 | |||
Available borrowing capacity | [1],[4] | $ 2,458,000 | |||
Match funded liabilities | [4] | $ 2,879,000 | 6,330,000 | ||
Advance Receivables Backed Notes - Series 2014-VF3, Class C [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||||
Debt Instrument [Line Items] | |||||
Maturity | [4],[5] | Aug. 31, 2047 | |||
Amortization Date | [4],[5] | Aug. 2017 | |||
Available borrowing capacity | [1],[4] | $ 2,716,000 | |||
Match funded liabilities | [4] | $ 3,189,000 | 6,977,000 | ||
Advance Receivables Backed Notes - Series 2014-VF3, Class D [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||||
Debt Instrument [Line Items] | |||||
Maturity | [4],[5] | Aug. 31, 2047 | |||
Amortization Date | [4],[5] | Aug. 2017 | |||
Available borrowing capacity | [1],[4] | $ 7,145,000 | |||
Match funded liabilities | [4] | $ 8,434,000 | 18,427,000 | ||
Advance Receivables Backed Notes - Series 2014-VF4, Class A [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||||
Debt Instrument [Line Items] | |||||
Maturity | [4],[5] | Aug. 31, 2047 | |||
Amortization Date | [4],[5] | Aug. 2017 | |||
Available borrowing capacity | [1],[4] | $ 53,287,000 | |||
Match funded liabilities | [4] | $ 59,892,000 | 132,651,000 | ||
Advance Receivables Backed Notes - Series 2014-VF4, Class B [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||||
Debt Instrument [Line Items] | |||||
Maturity | [4],[5] | Aug. 31, 2047 | |||
Amortization Date | [4],[5] | Aug. 2017 | |||
Available borrowing capacity | [1],[4] | $ 2,458,000 | |||
Match funded liabilities | [4] | $ 2,879,000 | 6,330,000 | ||
Advance Receivables Backed Notes - Series 2014-VF4, Class C [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||||
Debt Instrument [Line Items] | |||||
Maturity | [4],[5] | Aug. 31, 2047 | |||
Amortization Date | [4],[5] | Aug. 2017 | |||
Available borrowing capacity | [1],[4] | $ 2,716,000 | |||
Match funded liabilities | [4] | $ 3,189,000 | 6,977,000 | ||
Advance Receivables Backed Notes - Series 2014-VF4, Class D [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||||
Debt Instrument [Line Items] | |||||
Maturity | [4],[5] | Aug. 31, 2047 | |||
Amortization Date | [4],[5] | Aug. 2017 | |||
Available borrowing capacity | [1],[4] | $ 7,145,000 | |||
Match funded liabilities | [4] | $ 8,434,000 | 18,427,000 | ||
Advance Receivables Backed Notes - Series 2015-VF5, Class A [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||||
Debt Instrument [Line Items] | |||||
Maturity | [4],[5] | Aug. 31, 2047 | |||
Amortization Date | [4],[5] | Aug. 2017 | |||
Available borrowing capacity | [1],[4] | $ 53,287,000 | |||
Match funded liabilities | [4] | $ 59,892,000 | 132,652,000 | ||
Advance Receivables Backed Notes - Series 2015-VF5, Class B [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||||
Debt Instrument [Line Items] | |||||
Maturity | [4],[5] | Aug. 31, 2047 | |||
Amortization Date | [4],[5] | Aug. 2017 | |||
Available borrowing capacity | [1],[4] | $ 2,458,000 | |||
Match funded liabilities | [4] | $ 2,879,000 | 6,330,000 | ||
Advance Receivables Backed Notes - Series 2015-VF5, Class C [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||||
Debt Instrument [Line Items] | |||||
Maturity | [4],[5] | Aug. 31, 2047 | |||
Amortization Date | [4],[5] | Aug. 2017 | |||
Available borrowing capacity | [1],[4] | $ 2,716,000 | |||
Match funded liabilities | [4] | $ 3,189,000 | 6,977,000 | ||
Advance Receivables Backed Notes - Series 2015-VF5, Class D [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||||
Debt Instrument [Line Items] | |||||
Maturity | [4],[5] | Aug. 31, 2047 | |||
Amortization Date | [4],[5] | Aug. 2017 | |||
Available borrowing capacity | [1],[4] | $ 7,145,000 | |||
Match funded liabilities | [4] | $ 8,434,000 | 18,427,000 | ||
Advance Receivables Backed Notes - Series 2015-T1, Class A [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest Rate | [6] | 2.5365% | |||
Maturity | [5],[6] | Sep. 30, 2046 | |||
Amortization Date | [5],[6] | Sep. 2016 | |||
Available borrowing capacity | [1],[6] | $ 0 | |||
Match funded liabilities | [6] | $ 0 | 244,809,000 | ||
Advance Receivables Backed Notes - Series 2015-T1, Class B [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest Rate | [6] | 3.0307% | |||
Maturity | [5],[6] | Sep. 30, 2046 | |||
Amortization Date | [5],[6] | Sep. 2016 | |||
Available borrowing capacity | [1],[6] | $ 0 | |||
Match funded liabilities | [6] | $ 0 | 10,930,000 | ||
Advance Receivables Backed Notes - Series 2015-T1, Class C [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest Rate | [6] | 3.524% | |||
Maturity | [5],[6] | Sep. 30, 2046 | |||
Amortization Date | [5],[6] | Sep. 2016 | |||
Available borrowing capacity | [1],[6] | $ 0 | |||
Match funded liabilities | [6] | $ 0 | 12,011,000 | ||
Advance Receivables Backed Notes - Series 2015-T1, Class D [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest Rate | [6] | 4.10% | |||
Maturity | [5],[6] | Sep. 30, 2046 | |||
Amortization Date | [5],[6] | Sep. 2016 | |||
Available borrowing capacity | [1],[6] | $ 0 | |||
Match funded liabilities | [6] | $ 0 | 32,250,000 | ||
Advance Receivables Backed Notes - Series 2015-T2, Class A [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest Rate | [6] | 2.532% | |||
Maturity | [5],[6] | Nov. 30, 2046 | |||
Amortization Date | [5],[6] | Nov. 2016 | |||
Available borrowing capacity | [1],[6] | $ 0 | |||
Match funded liabilities | [6] | $ 0 | 161,973,000 | ||
Advance Receivables Backed Notes - Series 2015-T2, Class B [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest Rate | [6] | 3.372% | |||
Maturity | [5],[6] | Nov. 30, 2046 | |||
Amortization Date | [5],[6] | Nov. 2016 | |||
Available borrowing capacity | [1],[6] | $ 0 | |||
Match funded liabilities | [6] | $ 0 | 7,098,000 | ||
Advance Receivables Backed Notes - Series 2015-T2, Class C [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest Rate | [6] | 3.766% | |||
Maturity | [5],[6] | Nov. 30, 2046 | |||
Amortization Date | [5],[6] | Nov. 2016 | |||
Available borrowing capacity | [1],[6] | $ 0 | |||
Match funded liabilities | [6] | $ 0 | 8,113,000 | ||
Advance Receivables Backed Notes - Series 2015-T2, Class D [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest Rate | [6] | 4.258% | |||
Maturity | [5],[6] | Nov. 30, 2046 | |||
Amortization Date | [5],[6] | Nov. 2016 | |||
Available borrowing capacity | [1],[6] | $ 0 | |||
Match funded liabilities | [6] | $ 0 | 22,816,000 | ||
Advance Receivables Backed Notes - Series 2015-T3, Class A [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest Rate | [6] | 3.211% | |||
Maturity | [5],[6] | Nov. 30, 2047 | |||
Amortization Date | [5],[6] | Nov. 2017 | |||
Available borrowing capacity | [1],[6] | $ 0 | |||
Match funded liabilities | [6] | $ 310,195,000 | 310,195,000 | ||
Advance Receivables Backed Notes - Series 2015-T3, Class B [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest Rate | [6] | 3.704% | |||
Maturity | [5],[6] | Nov. 30, 2047 | |||
Amortization Date | [5],[6] | Nov. 2017 | |||
Available borrowing capacity | [1],[6] | $ 0 | |||
Match funded liabilities | [6] | $ 17,695,000 | 17,695,000 | ||
Advance Receivables Backed Notes - Series 2015-T3, Class C [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest Rate | [6] | 4.196% | |||
Maturity | [5],[6] | Nov. 30, 2047 | |||
Amortization Date | [5],[6] | Nov. 2017 | |||
Available borrowing capacity | [1],[6] | $ 0 | |||
Match funded liabilities | [6] | $ 19,262,000 | 19,262,000 | ||
Advance Receivables Backed Notes - Series 2015-T3, Class D [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest Rate | [6] | 4.687% | |||
Maturity | [5],[6] | Nov. 30, 2047 | |||
Amortization Date | [5],[6] | Nov. 2017 | |||
Available borrowing capacity | [1],[6] | $ 0 | |||
Match funded liabilities | [6] | $ 52,848,000 | 52,848,000 | ||
Advance Receivables Backed Notes - Series 2016-T1, Class A [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest Rate | [5] | 2.5207% | |||
Maturity | [5],[6] | Aug. 31, 2048 | |||
Amortization Date | [5],[6] | Aug. 2018 | |||
Available borrowing capacity | [1],[6] | $ 0 | |||
Match funded liabilities | [6] | $ 216,700,000 | 0 | ||
Advance Receivables Backed Notes - Series 2016-T1, Class B [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest Rate | [6] | 3.0643% | |||
Maturity | [5],[6] | Aug. 31, 2048 | |||
Amortization Date | [5],[6] | Aug. 2018 | |||
Available borrowing capacity | [1],[6] | $ 0 | |||
Match funded liabilities | [6] | $ 9,000,000 | 0 | ||
Advance Receivables Backed Notes - Series 2016-T1, Class C [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest Rate | [6] | 3.6067% | |||
Maturity | [5],[6] | Aug. 31, 2048 | |||
Amortization Date | [5],[6] | Aug. 2018 | |||
Available borrowing capacity | [1],[6] | $ 0 | |||
Match funded liabilities | [6] | $ 10,800,000 | 0 | ||
Advance Receivables Backed Notes - Series 2016-T1, Class D [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest Rate | [6] | 4.2462% | |||
Maturity | [5],[6] | Aug. 31, 2048 | |||
Amortization Date | [5],[6] | Aug. 2018 | |||
Available borrowing capacity | [1],[6] | $ 0 | |||
Match funded liabilities | [6] | $ 28,500,000 | 0 | ||
Advance Receivables Backed Notes - Series 2016-T2,Class A [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest Rate | [6] | 2.7215% | |||
Maturity | [5],[6] | Aug. 31, 2049 | |||
Amortization Date | [5],[6] | Aug. 2019 | |||
Available borrowing capacity | [1],[6] | $ 0 | |||
Match funded liabilities | [6] | $ 188,300,000 | 0 | ||
Advance Receivables Backed Notes - Series 2016-T2, Class B [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest Rate | [6] | 3.2647% | |||
Maturity | [5],[6] | Aug. 31, 2049 | |||
Amortization Date | [5],[6] | Aug. 2019 | |||
Available borrowing capacity | [1],[6] | $ 0 | |||
Match funded liabilities | [6] | $ 8,500,000 | 0 | ||
Advance Receivables Backed Notes - Series 2016-T2, Class C [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest Rate | [6] | 3.8066% | |||
Maturity | [5],[6] | Aug. 31, 2049 | |||
Amortization Date | [5],[6] | Aug. 2019 | |||
Available borrowing capacity | [1],[6] | $ 0 | |||
Match funded liabilities | [6] | $ 10,300,000 | 0 | ||
Advance Receivables Backed Notes - Series 2016-T2, Class D [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest Rate | [6] | 4.4456% | |||
Maturity | [5],[6] | Aug. 31, 2049 | |||
Amortization Date | [5],[6] | Aug. 2019 | |||
Available borrowing capacity | [1],[6] | $ 0 | |||
Match funded liabilities | [6] | $ 27,900,000 | 0 | ||
Advance Receivables Backed Notes, Series 2014-VF1, Class A [Member] | Total Ocwen Servicer Advance Receivables Trust III (OSARTIII) [Member] | |||||
Debt Instrument [Line Items] | |||||
Maturity | [2],[5] | Dec. 31, 2047 | |||
Amortization Date | [2],[5] | Dec. 2017 | |||
Available borrowing capacity | [1],[2] | $ 8,171,000 | |||
Match funded liabilities | [2] | $ 43,229,000 | 31,343,000 | ||
Advance Receivables Backed Notes, Series 2014-VF1, Class B [Member] | Total Ocwen Servicer Advance Receivables Trust III (OSARTIII) [Member] | |||||
Debt Instrument [Line Items] | |||||
Maturity | [2],[5] | Dec. 31, 2047 | |||
Amortization Date | [2],[5] | Dec. 2017 | |||
Available borrowing capacity | [1],[2] | $ 597,000 | |||
Match funded liabilities | [2] | $ 3,403,000 | 4,157,000 | ||
Advance Receivables Backed Notes, Series 2014-VF1, Class C [Member] | Total Ocwen Servicer Advance Receivables Trust III (OSARTIII) [Member] | |||||
Debt Instrument [Line Items] | |||||
Maturity | [2],[5] | Dec. 31, 2047 | |||
Amortization Date | [2],[5] | Dec. 2017 | |||
Available borrowing capacity | [1],[2] | $ 879,000 | |||
Match funded liabilities | [2] | $ 4,421,000 | 4,564,000 | ||
Advance Receivables Backed Notes, Series 2014-VF1, Class D [Member] | Total Ocwen Servicer Advance Receivables Trust III (OSARTIII) [Member] | |||||
Debt Instrument [Line Items] | |||||
Maturity | [2],[5] | Dec. 31, 2047 | |||
Amortization Date | [2],[5] | Dec. 2017 | |||
Available borrowing capacity | [1],[2] | $ 2,260,000 | |||
Match funded liabilities | [2] | $ 12,040,000 | 11,351,000 | ||
Advance Receivables Backed Notes, Series 2015-VF1, Class A [Member] | Total Ocwen Freddie Advance Funding (OFAF) [Member] | |||||
Debt Instrument [Line Items] | |||||
Maturity | [3],[5] | Jun. 30, 2047 | |||
Amortization Date | [3],[5] | Jun. 2017 | |||
Available borrowing capacity | [1],[3] | $ 44,395,000 | |||
Match funded liabilities | [3] | $ 74,605,000 | 112,882,000 | ||
Advance Receivables Backed Notes, Series 2015-VF1, Class B [Member] | Total Ocwen Freddie Advance Funding (OFAF) [Member] | |||||
Debt Instrument [Line Items] | |||||
Maturity | [3],[5] | Jun. 30, 2047 | |||
Amortization Date | [3],[5] | Jun. 2017 | |||
Available borrowing capacity | [1],[3] | $ 8,091,000 | |||
Match funded liabilities | [3] | $ 7,909,000 | 12,268,000 | ||
Advance Receivables Backed Notes, Series 2015-VF1, Class C [Member] | Total Ocwen Freddie Advance Funding (OFAF) [Member] | |||||
Debt Instrument [Line Items] | |||||
Maturity | [3],[5] | Jun. 30, 2047 | |||
Amortization Date | [3],[5] | Jun. 2017 | |||
Available borrowing capacity | [1],[3] | $ 3,594,000 | |||
Match funded liabilities | [3] | $ 3,406,000 | 5,951,000 | ||
Advance Receivables Backed Notes, Series 2015-VF1, Class D [Member] | Total Ocwen Freddie Advance Funding (OFAF) [Member] | |||||
Debt Instrument [Line Items] | |||||
Maturity | [3],[5] | Jun. 30, 2047 | |||
Amortization Date | [3],[5] | Jun. 2017 | |||
Available borrowing capacity | [1],[3] | $ 9,198,000 | |||
Match funded liabilities | [3] | 8,802,000 | 8,377,000 | ||
Match Funded Liabilties [Member] | |||||
Debt Instrument [Line Items] | |||||
Available borrowing capacity | [1] | 274,003,000 | |||
Match funded liabilities | $ 1,280,997,000 | $ 1,584,049,000 | |||
LIBOR [Member] | Advance Receivables Backed Notes - Series 2014-VF3, Class A [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest Rate | [4],[7] | 1.85% | |||
LIBOR [Member] | Advance Receivables Backed Notes - Series 2014-VF3, Class B [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest Rate | [4] | 2.50% | |||
LIBOR [Member] | Advance Receivables Backed Notes - Series 2014-VF3, Class C [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest Rate | [4] | 3.80% | |||
LIBOR [Member] | Advance Receivables Backed Notes - Series 2014-VF3, Class D [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest Rate | [4] | 5.45% | |||
LIBOR [Member] | Advance Receivables Backed Notes - Series 2014-VF4, Class A [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest Rate | [4] | 1.85% | |||
LIBOR [Member] | Advance Receivables Backed Notes - Series 2014-VF4, Class B [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest Rate | [4] | 2.50% | |||
LIBOR [Member] | Advance Receivables Backed Notes - Series 2014-VF4, Class C [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest Rate | [4] | 3.80% | |||
LIBOR [Member] | Advance Receivables Backed Notes - Series 2014-VF4, Class D [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest Rate | [4] | 5.45% | |||
LIBOR [Member] | Advance Receivables Backed Notes - Series 2015-VF5, Class A [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest Rate | [4] | 1.85% | |||
LIBOR [Member] | Advance Receivables Backed Notes - Series 2015-VF5, Class B [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest Rate | [4] | 2.50% | |||
LIBOR [Member] | Advance Receivables Backed Notes - Series 2015-VF5, Class C [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest Rate | [4] | 3.80% | |||
LIBOR [Member] | Advance Receivables Backed Notes - Series 2015-VF5, Class D [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest Rate | [4] | 5.45% | |||
LIBOR [Member] | Advance Receivables Backed Notes, Series 2015-VF1, Class A [Member] | Total Ocwen Freddie Advance Funding (OFAF) [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest Rate | [3] | 2.40% | |||
LIBOR [Member] | Advance Receivables Backed Notes, Series 2015-VF1, Class B [Member] | Total Ocwen Freddie Advance Funding (OFAF) [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest Rate | [3] | 3.40% | |||
LIBOR [Member] | Advance Receivables Backed Notes, Series 2015-VF1, Class C [Member] | Total Ocwen Freddie Advance Funding (OFAF) [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest Rate | [3] | 4.00% | |||
LIBOR [Member] | Advance Receivables Backed Notes, Series 2015-VF1, Class D [Member] | Total Ocwen Freddie Advance Funding (OFAF) [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest Rate | [3] | 4.80% | |||
Cost of Funds [Member] | Advance Receivables Backed Notes, Series 2014-VF1, Class A [Member] | Total Ocwen Servicer Advance Receivables Trust III (OSARTIII) [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest Rate | [2] | 2.30% | |||
Cost of Funds [Member] | Advance Receivables Backed Notes, Series 2014-VF1, Class B [Member] | Total Ocwen Servicer Advance Receivables Trust III (OSARTIII) [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest Rate | [2] | 3.60% | |||
Cost of Funds [Member] | Advance Receivables Backed Notes, Series 2014-VF1, Class C [Member] | Total Ocwen Servicer Advance Receivables Trust III (OSARTIII) [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest Rate | [2] | 4.10% | |||
Cost of Funds [Member] | Advance Receivables Backed Notes, Series 2014-VF1, Class D [Member] | Total Ocwen Servicer Advance Receivables Trust III (OSARTIII) [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest Rate | [2] | 4.70% | |||
[1] | Borrowing capacity is available to us provided that we have additional eligible collateral to pledge. Collateral may only be pledged to one facility. At December 31, 2016, none of the available borrowing capacity could be used based on the amount of eligible collateral that had been pledged. | ||||
[2] | On December 15, 2016, we extended the term of this facility for an additional year and reduced the maximum borrowing capacity under the facility from $90.0 million to $75.0 million. There is a ceiling of 75 bps for 1ML in determining the interest rate for these variable rate notes. | ||||
[3] | On March 31, 2016, the combined borrowing capacity of the Series 2015-VF1 Notes was increased to $160.0 million. On June 10, 2016, the term of this facility was extended for an additional year. There is a ceiling of 125 bps for 1ML in determining the interest rate for these notes. | ||||
[4] | On August 12, 2016, the supplemental indentures for the OMART facility variable funding notes were amended to reduce the borrowing capacity of each series from $200.0 million to $140.0 million or a total decrease in borrowing capacity of $180.0 million. There is a ceiling of 75 bps for 1ML in determining the interest rate for these variable rate notes. | ||||
[5] | The amortization date of our facilities is the date on which the revolving period ends under each advance facility note and repayment of the outstanding balance must begin if the note is not renewed or extended. The maturity date is the date on which all outstanding balances must be repaid. In all of our advance facilities, there are multiple notes outstanding. For each note, after the amortization date, all collections that represent the repayment of advances pledged to the facility must be applied to reduce the balance of the note outstanding, and any new advances are ineligible to be financed. | ||||
[6] | Under the terms of the agreement, we must continue to borrow the full amount of the Series 2015-T3 Notes and the Series 2016-T1 and T2 Notes until the amortization date. If there is insufficient collateral to support the level of borrowing, the excess cash proceeds are not distributed to Ocwen but are held by the trustee, and interest expense continues to be based on the full amount of the term notes. On August 12, 2016, we issued the Series 2016-T1 and 2016-T2 Notes with a total borrowing capacity of $500.0 million. The proceeds from these notes were used to prepay at par the $500.0 million of Series 2015-T1 and 2015-T2 notes that were outstanding. | ||||
[7] | 1ML was 0.77% and 0.43% at December 31, 2016 and 2015, respectively. |
Borrowings - Schedule of Mat105
Borrowings - Schedule of Match Funded Liabilities (Footnote) (Details) - USD ($) | Dec. 15, 2016 | Aug. 12, 2016 | Mar. 31, 2016 | Dec. 31, 2016 | Dec. 14, 2016 | Aug. 11, 2016 | Dec. 31, 2015 | |
Debt Instrument [Line Items] | ||||||||
Available borrowing capacity | $ 0 | |||||||
Advance Receivable Backed Variable Funding Notes [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | $ 140,000,000 | $ 200,000,000 | ||||||
Increase (decrease) to borrowing capacity | $ 180,000,000 | |||||||
Interest rate | 0.75% | |||||||
Series 2016 Term Notes [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | $ 500,000,000 | |||||||
Series 2015 Term Notes [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Repayments of Debt | $ 500,000,000 | |||||||
Total Ocwen Servicer Advance Receivables Trust III (OSARTIII) [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Available borrowing capacity | [1],[2] | 11,907,000 | ||||||
Maximum borrowing capacity | $ 75,000,000 | $ 90,000,000 | ||||||
Interest rate | 0.75% | |||||||
Total Ocwen Freddie Advance Funding (OFAF) [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Available borrowing capacity | [1],[3] | $ 65,278,000 | ||||||
Interest rate | 1.25% | |||||||
Total Ocwen Freddie Advance Funding (OFAF) [Member] | Series 2015-VF1 Notes [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | $ 160,000,000 | |||||||
LIBOR [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
1-Month LIBOR | 0.77% | 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 December 31, 2016, none of the available borrowing capacity could be used based on the amount of eligible collateral that had been pledged. | |||||||
[2] | On December 15, 2016, we extended the term of this facility for an additional year and reduced the maximum borrowing capacity under the facility from $90.0 million to $75.0 million. There is a ceiling of 75 bps for 1ML in determining the interest rate for these variable rate notes. | |||||||
[3] | On March 31, 2016, the combined borrowing capacity of the Series 2015-VF1 Notes was increased to $160.0 million. On June 10, 2016, the term of this facility was extended for an additional year. There is a ceiling of 125 bps for 1ML in determining the interest rate for these notes. |
Borrowings - Narrative (Details
Borrowings - Narrative (Details) - USD ($) | Dec. 05, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | May 12, 2014 |
Line of Credit Facility [Line Items] | ||||
Percentage of senior unsecured notes exchanged for senior secured second lien notes | 99.10% | |||
Unamortized debt issuance costs | $ 24,500,000 | |||
Deb covenant, required consolidated tangible net worth | $ 575,000,000 | |||
NRZ [Member] | ||||
Line of Credit Facility [Line Items] | ||||
UPB of rights to MSRs sold | 118,700,000,000 | |||
Outstanding servicing advances | 4,100,000,000 | |||
8.375% Senior Secured Notes Due In 2022 [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Stated interest rate | 8.375% | |||
Senior notes | $ 346,900,000 | |||
Senior Unsecured Notes [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Senior notes | $ 346,900,000 | |||
Senior Unsecured Notes [Member] | 6.625 Senior Notes, Due 2019 [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Face amount | $ 350,000,000 | |||
Stated interest rate | 6.625% | |||
Unamortized debt issuance costs | 0 | 4,500,000 | ||
Senior Notes [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Senior notes | 346,789,000 | 345,511,000 | ||
Unamortized debt issuance costs | 3,211,000 | $ 4,489,000 | ||
Senior Notes [Member] | 8.375% Senior Secured Notes Due In 2022 [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Unamortized debt issuance costs | $ 3,200,000 | |||
Maximum percentage available for redemption using net cash proceeds of one or more Equity Offerings as defined in Indenture | 35.00% | |||
Percentage of principal amount, redemption price | 108.375% | |||
Percentage of principal amount to remain outstanding after redemption requirement | 65.00% | |||
Maximum period for redemption after consummation of Equity Offering | 120 days | |||
Percentage of principal amount, repurchase price | 101.00% | |||
On or After May 15, 2016 [Member] | Senior Unsecured Notes [Member] | Minimum [Member] | 6.625 Senior Notes, Due 2019 [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Redemption period, notice | 30 days | |||
On or After May 15, 2016 [Member] | Senior Unsecured Notes [Member] | Maximum [Member] | 6.625 Senior Notes, Due 2019 [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Redemption period, notice | 60 days | |||
On or Before November 15, 2018 [Member] | Senior Notes [Member] | Minimum [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Redemption period, notice | 30 days | |||
On or Before November 15, 2018 [Member] | Senior Notes [Member] | Maximum [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Redemption period, notice | 60 days | |||
On or Before November 15, 2018 [Member] | Senior Notes [Member] | Maximum [Member] | 8.375% Senior Secured Notes Due In 2022 [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Redemption price | 100.00% | |||
Ocwen Loan Servicing [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Deb covenant, required consolidated tangible net worth | $ 1,100,000,000 |
Borrowings - Schedule of Financ
Borrowings - Schedule of Financing Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | ||
Debt Instrument [Line Items] | |||
Maturity | Dec. 31, 2020 | ||
Long-term debt, gross | $ 4,012,812 | $ 3,089,255 | |
Financing Liabilities [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 4,012,812 | 3,089,255 | |
Financing Liability - MSRs Pledged [Member] | Financing Liabilities [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | [1] | $ 477,707 | 541,704 |
Secured Notes, Ocwen Asset Servicing Income Series, Series 2014-1 [Member] | Financing Liabilities [Member] | |||
Debt Instrument [Line Items] | |||
Maturity | Feb. 28, 2028 | ||
Long-term debt, gross | [2] | $ 81,131 | 96,546 |
Financing Liability – Advances Pledged [Member] | Financing Liabilities [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | [3] | 20,193 | 59,643 |
HMBS - Related Borrowings [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 3,400,000 | 2,400,000 | |
HMBS - Related Borrowings [Member] | Financing Liabilities [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | [4] | $ 3,433,781 | $ 2,391,362 |
LIBOR [Member] | HMBS - Related Borrowings [Member] | Financing Liabilities [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate | 2.60% | ||
[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. 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. This financing liability has no contractual maturity. | ||
[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 Fin108
Borrowings - Schedule of Financing Liabilities (Footnote) (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Secured Notes, Ocwen Asset Servicing Income Series, Series 2014-1 [Member] | |
Debt Instrument [Line Items] | |
Basis points | 0.21% |
Borrowings - Schedule of Other
Borrowings - Schedule of Other Secured Borrowings (Details) - USD ($) | Nov. 28, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Line of Credit Facility [Line Items] | |||||
Maturity date | Dec. 31, 2020 | ||||
Available Borrowing Capacity | $ 0 | ||||
Long-term debt, gross | 4,012,812,000 | $ 3,089,255,000 | |||
Unamortized debt issuance costs | (24,500,000) | ||||
Other Secured Borrowings [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Available Borrowing Capacity | [1] | 113,964,000 | |||
Long-term debt, gross | 690,029,000 | 783,774,000 | |||
Unamortized debt issuance costs | (7,612,000) | (20,012,000) | |||
Discount | (3,874,000) | (1,351,000) | |||
Total Balance | $ 678,543,000 | $ 762,411,000 | |||
Weighted average interest rate | 4.56% | 4.38% | |||
Senior Notes [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Long-term debt, gross | $ 350,000,000 | $ 350,000,000 | |||
Unamortized debt issuance costs | (3,211,000) | (4,489,000) | |||
Total Balance | 346,789,000 | 345,511,000 | |||
Senior Notes [Member] | Other Secured Borrowings [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Available Borrowing Capacity | [1] | 0 | |||
Long-term debt, gross | $ 335,000,000 | 398,454,000 | |||
SSTL [Member] | Senior Notes [Member] | Other Secured Borrowings [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Maturity date | [1] | Feb. 28, 2018 | |||
Available Borrowing Capacity | [1],[2] | $ 0 | |||
Long-term debt, gross | [2] | 0 | 398,454,000 | ||
Amended Senior Secured Term Loan [Member] | Senior Notes [Member] | Other Secured Borrowings [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Available Borrowing Capacity | [1],[2] | 0 | |||
Long-term debt, gross | [2] | 335,000,000 | 0 | ||
Mortgage Loan Warehouse Facilities [Member] | Other Secured Borrowings [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Available Borrowing Capacity | [1] | 113,964,000 | |||
Long-term debt, gross | $ 355,029,000 | 385,320,000 | |||
Mortgage Loan Warehouse Facilities [Member] | Repurchase Agreement [Member] | Other Secured Borrowings [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Maturity date | [3] | Sep. 30, 2017 | |||
Available Borrowing Capacity | [1],[3] | $ 37,630,000 | |||
Long-term debt, gross | [3] | $ 12,370,000 | 42,973,000 | ||
Mortgage Loan Warehouse Facilities [Member] | Master Repurchase Agreement [Member] | Other Secured Borrowings [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Maturity date | [4] | Jan. 31, 2017 | |||
Available Borrowing Capacity | [1],[4] | $ 26,457,000 | |||
Long-term debt, gross | [4] | $ 173,543,000 | 156,226,000 | ||
Mortgage Loan Warehouse Facilities [Member] | Participation Agreement [Member] | Other Secured Borrowings [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Maturity date | [5] | Apr. 30, 2017 | |||
Available Borrowing Capacity | [1],[5] | $ 0 | |||
Long-term debt, gross | [5] | $ 44,413,000 | 49,897,000 | ||
Mortgage Loan Warehouse Facilities [Member] | Participation Agreement [Member] | Other Secured Borrowings [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Maturity date | [5] | Apr. 30, 2017 | |||
Available Borrowing Capacity | [1],[5] | $ 0 | |||
Long-term debt, gross | [5] | $ 48,326,000 | 73,049,000 | ||
Mortgage Loan Warehouse Facilities [Member] | Mortgage Warehouse Agreement [Member] | Other Secured Borrowings [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Maturity date | [6] | Aug. 31, 2017 | |||
Available Borrowing Capacity | [1],[6] | $ 0 | |||
Long-term debt, gross | [6] | $ 26,254,000 | 63,175,000 | ||
Mortgage Loan Warehouse Facilities [Member] | Master Repurchase Agreement [Member] | Other Secured Borrowings [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Maturity date | [7] | Jan. 31, 2018 | |||
Available Borrowing Capacity | [1],[7] | $ 49,877,000 | |||
Long-term debt, gross | $ 50,123,000 | $ 0 | [7] | ||
LIBOR [Member] | Mortgage Loan Warehouse Facilities [Member] | Master Repurchase Agreement [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Interest rate | 0.00% | ||||
LIBOR [Member] | Mortgage Loan Warehouse Facilities [Member] | Master Repurchase Agreement [Member] | Other Secured Borrowings [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Interest rate | [4] | 2.00% | |||
LIBOR [Member] | Mortgage Loan Warehouse Facilities [Member] | Mortgage Warehouse Agreement [Member] | Other Secured Borrowings [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Interest rate | [6] | 2.75% | |||
LIBOR [Member] | Mortgage Loan Warehouse Facilities [Member] | Master Repurchase Agreement [Member] | Other Secured Borrowings [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Interest rate | [7] | 2.75% | |||
Interest rate at floor | [7] | 0.25% | |||
Eurodollar [Member] | SSTL [Member] | Senior Notes [Member] | Other Secured Borrowings [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Interest rate | [1] | 4.25% | |||
Interest rate at floor | [1] | 1.25% | |||
Eurodollar [Member] | Amended Senior Secured Term Loan [Member] | Senior Notes [Member] | Other Secured Borrowings [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Interest rate | 5.00% | ||||
Interest rate at floor | 1.00% | ||||
Maximum [Member] | LIBOR [Member] | Mortgage Loan Warehouse Facilities [Member] | Repurchase Agreement [Member] | Other Secured Borrowings [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Interest rate | [3] | 3.45% | |||
Minimum [Member] | LIBOR [Member] | Mortgage Loan Warehouse Facilities [Member] | Repurchase Agreement [Member] | Other Secured Borrowings [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Interest rate | [3] | 2.00% | |||
Ocwen Loan Servicing [Member] | LIBOR [Member] | Mortgage Loan Warehouse Facilities [Member] | Mortgage Warehouse Agreement [Member] | Other Secured Borrowings [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Interest rate at floor | [6] | 3.00% | |||
Liberty Home Equity Solutions, Inc. [Member] | LIBOR [Member] | Mortgage Loan Warehouse Facilities [Member] | Mortgage Warehouse Agreement [Member] | Other Secured Borrowings [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Interest rate at floor | 3.50% | ||||
[1] | For our mortgage loan warehouse facilities, available borrowing capacity does not consider the amount of the facility that the lender has extended on an uncommitted basis. | ||||
[2] | On December 5, 2016, we entered into an Amended and Restated Senior Secured Term Loan Facility Agreement (the Amended and Restated Agreement). The Amended and Restated Agreement establishes a new SSTL with a borrowing capacity of $335.0 million and a maturity date of December 5, 2020. We used the proceeds of the new SSTL to repay our obligations under the prior SSTL and to pay certain fees and expenses of the transaction. We may request increases to the loan amount of up to $100.0 million, with additional increases subject to certain limitations. We are required to make quarterly payments on the SSTL in an amount of $4.2 million commencing on March 31, 2017.The borrowings under the SSTL are secured by a first priority security interest in substantially all of the assets of Ocwen, OLS and the other guarantors thereunder, excluding among other things, 35% of the capital stock of foreign subsidiaries, securitization assets and equity interests of securitization entities, assets securing permitted funding indebtedness and non-recourse indebtedness, REO assets, servicing agreements where an acknowledgment from the GSE has not been obtained, as well as other customary carve-outs.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 (1ML)), plus a margin of 4.00% and subject to a base rate floor of 2.00% or (b) the one month Eurodollar rate, plus a margin of 5.00% and subject to a one month Eurodollar floor of 1.00%. To date we have elected option (b) to determine the interest rate.The amended and restated agreement includes covenants that are substantially similar to the prior senior secured term loan, including the requirement that Ocwen maintain a loan-to-value ratio at a 40% level as of the last date of any fiscal quarter throughout the term of the SSTL. | ||||
[3] | Fifty percent of the maximum borrowing amount of $100.0 million is available on a committed basis and fifty percent is available at the discretion of the lender. On September 29, 2016, we renewed this facility through September 28, 2017 with no change in interest rates or maximum borrowing capacity. We use this facility to fund the repurchase of 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. | ||||
[4] | Under this repurchase agreement, the lender provides financing on a committed basis for $200.0 million. On November 28, 2016, we extended the term of this agreement to January 31, 2017 with no change in rates or maximum borrowing capacity, although a LIBOR floor of 0.0% was added to the terms of the facility effective September 30, 2016. On January 31, 2017, the term of this agreement was further extended to February 28, 2017. | ||||
[5] | Under these participation agreements, the lender provides financing for a combined total of $250.0 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 26, 2016, the term of these agreements was extended to April 30, 2017. | ||||
[6] | Under this participation agreement, the lender provides financing for $110.0 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 August 17, 2016, the term of this agreement was extended to August 17, 2017. | ||||
[7] | We entered into this agreement on January 5, 2016. The lender provides financing on a committed basis for $100.0 million. On December 23, 2016, the term of this agreement was extended to January 2, 2018. The other terms remained unchanged. |
Borrowings - Schedule of Oth110
Borrowings - Schedule of Other Secured Borrowings (Footnote) (Details) - USD ($) | Dec. 05, 2016 | Nov. 28, 2016 | Dec. 31, 2016 | Jan. 05, 2016 | Nov. 20, 2015 |
Debt Instrument [Line Items] | |||||
Percentage of equity interest in foreign subsidiaries pledged as security to secured debt | 35.00% | ||||
Amended Senior Secured Term Loan [Member] | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | $ 335,000,000 | ||||
New term loans issuable | $ 100,000,000 | ||||
Periodic prepayment of SSTL | $ 4,200,000 | ||||
Repurchase Agreement [Member] | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | $ 100,000,000 | ||||
Secured Debt [Member] | Amended Senior Secured Term Loan [Member] | |||||
Debt Instrument [Line Items] | |||||
Percentage of loan to value | 40.00% | ||||
Secured Debt [Member] | Master Repurchase Agreement [Member] | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | $ 100,000,000 | ||||
Mortgage Loan Warehouse Facilities [Member] | Repurchase Agreement [Member] | |||||
Debt Instrument [Line Items] | |||||
Percentage of maximum borrowing available on committed basis | 50.00% | ||||
Percentage of maximum borrowing available at discretion of lender | 50.00% | ||||
Mortgage Loan Warehouse Facilities [Member] | Master Repurchase Agreement [Member] | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | $ 200,000,000 | ||||
Mortgage Loan Warehouse Facilities [Member] | Participation Agreement [Member] | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | $ 250,000,000 | ||||
Beneficial interest | 100.00% | ||||
Mortgage Loan Warehouse Facilities [Member] | Mortgage Warehouse Agreement [Member] | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | $ 110,000,000 | ||||
Beneficial interest | 100.00% | ||||
LIBOR [Member] | Mortgage Loan Warehouse Facilities [Member] | Master Repurchase Agreement [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest rate | 0.00% | ||||
Senior Secured Term Loan Option One [Member] | Federal Funds Rate [Member] | Secured Debt [Member] | Amended Senior Secured Term Loan [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest rate | 0.50% | ||||
Senior Secured Term Loan Option One [Member] | Eurodollar [Member] | Secured Debt [Member] | Amended Senior Secured Term Loan [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest rate | 4.00% | ||||
Senior Secured Term Loan Option One [Member] | Base Rate [Member] | Secured Debt [Member] | Amended Senior Secured Term Loan [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest rate at floor | 2.00% | ||||
Senior Secured Term Loan Option Two [Member] | Eurodollar [Member] | Secured Debt [Member] | Amended Senior Secured Term Loan [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest rate | 5.00% | ||||
Interest rate at floor | 1.00% |
Borrowings Schedule of Senior N
Borrowings Schedule of Senior Notes (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 05, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 4,012,812 | $ 3,089,255 | |
Unamortized debt issuance costs | (24,500) | ||
8.375% Senior Secured Notes Due In 2022 [Member] | |||
Debt Instrument [Line Items] | |||
Senior notes | $ 346,900 | ||
Senior Notes [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 350,000 | 350,000 | |
Unamortized debt issuance costs | (3,211) | (4,489) | |
Senior notes | 346,789 | 345,511 | |
Senior Notes [Member] | 6.625 Senior Notes, Due 2019 [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 3,122 | 350,000 | |
Senior Notes [Member] | 8.375% Senior Secured Notes Due In 2022 [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 346,878 | $ 0 | |
Unamortized debt issuance costs | $ (3,200) |
Borrowings - Schedule of Redemp
Borrowings - Schedule of Redemption Prices (Details) | 12 Months Ended |
Dec. 31, 2016 | |
2016 [Member] | Senior Unsecured Notes [Member] | |
Debt Instrument [Line Items] | |
Redemption Price | 104.969% |
2017 [Member] | Senior Unsecured Notes [Member] | |
Debt Instrument [Line Items] | |
Redemption Price | 103.313% |
2018 [Member] | Secured Debt [Member] | |
Debt Instrument [Line Items] | |
Redemption Price | 106.281% |
2019 [Member] | Secured Debt [Member] | |
Debt Instrument [Line Items] | |
Redemption Price | 104.188% |
2020 [Member] | Secured Debt [Member] | |
Debt Instrument [Line Items] | |
Redemption Price | 102.094% |
2018 and thereafter [Member] | Senior Unsecured Notes [Member] | |
Debt Instrument [Line Items] | |
Redemption Price | 100.00% |
2021 and thereafter [Member] | Secured Debt [Member] | |
Debt Instrument [Line Items] | |
Redemption Price | 100.00% |
Borrowings - Schedule of Aggreg
Borrowings - Schedule of Aggregate Long-term Borrowings (Details) $ in Thousands | Dec. 31, 2016USD ($) | |
Debt Instrument [Line Items] | ||
2,017 | $ 1,102,653 | [1],[2],[3] |
2,018 | 331,873 | [1],[2],[3] |
2,019 | 254,872 | [1],[2],[3] |
2,020 | 284,750 | [1],[2],[3] |
2,021 | 0 | [1],[2],[3] |
There-after | 346,878 | [1],[2],[3] |
Long-term debt, gross | 2,321,026 | |
Fair value | 2,313,065 | |
Match Funded Liabilties [Member] | ||
Debt Instrument [Line Items] | ||
2,017 | 780,997 | [1],[2],[3] |
2,018 | 265,000 | [1],[2],[3] |
2,019 | 235,000 | [1],[2],[3] |
2,020 | 0 | [1],[2],[3] |
2,021 | 0 | [1],[2],[3] |
There-after | 0 | [1],[2],[3] |
Long-term debt, gross | 1,280,997 | |
Fair value | 1,275,059 | |
Other Secured Borrowings [Member] | ||
Debt Instrument [Line Items] | ||
2,017 | 321,656 | [1],[2],[3] |
2,018 | 66,873 | [1],[2],[3] |
2,019 | 16,750 | [1],[2],[3] |
2,020 | 284,750 | [1],[2],[3] |
2,021 | 0 | [1],[2],[3] |
There-after | 0 | [1],[2],[3] |
Long-term debt, gross | 690,029 | |
Fair value | 682,703 | |
Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
2,017 | 0 | [1],[2],[3] |
2,018 | 0 | [1],[2],[3] |
2,019 | 3,122 | [1],[2],[3] |
2,020 | 0 | [1],[2],[3] |
2,021 | 0 | [1],[2],[3] |
There-after | 346,878 | [1],[2],[3] |
Long-term debt, gross | 350,000 | |
Fair value | $ 355,303 | |
[1] | Amounts are exclusive of any related discount or unamortized debt issuance costs. | |
[2] | Excludes financing liabilities, which we recognized in connection with asset sales transactions that we accounted for as financings. Financing liabilities include $477.7 million recorded in connection with sales of Rights to MSRs and $3.4 billion recorded in connection with the securitizations of HMBS. The MSR-related financing liabilities have no contractual maturity and are amortized over the life of the transferred Rights to MSRs. The HMBS-related financing liabilities have no contractual maturity and are amortized as the related loans are repaid. | |
[3] | For match funded liabilities, the expected maturity date is the date on which the revolving period ends for each advance financing facility note and repayment of the outstanding balance must begin if the note is not renewed or extended. |
Borrowings - Schedule of Agg114
Borrowings - Schedule of Aggregate Long-term Borrowings (Footnote) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | |
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 4,012,812 | $ 3,089,255 | |
HMBS - Related Borrowings [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 3,400,000 | 2,400,000 | |
Financing Liabilities [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 4,012,812 | 3,089,255 | |
Financing Liabilities [Member] | Sale of MSRs and Rights To MSRs [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 477,700 | ||
Financing Liabilities [Member] | HMBS - Related Borrowings [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | [1] | $ 3,433,781 | $ 2,391,362 |
[1] | Represents amounts due to the holders of beneficial interests in Ginnie Mae guaranteed HMBS. The beneficial interests have no maturity dates, and the borrowings mature as the related loans are repaid. |
Other Liabilities - Schedule of
Other Liabilities - Schedule of Other Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | |
Other Liabilities Disclosure [Abstract] | |||
Contingent loan repurchase liability | [1] | $ 246,081 | $ 346,984 |
Accrued legal fees and settlements | 93,797 | 74,922 | |
Due to NRZ | [2] | 83,248 | 18,538 |
Other accrued expenses | 80,021 | 113,934 | |
Servicing-related obligations | 35,324 | 44,385 | |
Liability for indemnification obligations | 27,546 | 36,615 | |
Liability for uncertain tax positions | 23,216 | 44,751 | |
Checks held for escheat | 16,890 | 14,301 | |
Deferred income | 4,481 | 4,341 | |
Accrued interest payable | 3,698 | 3,667 | |
Derivatives, at fair value | 1,550 | 0 | |
Other | 65,387 | 42,006 | |
Other liabilities | $ 681,239 | $ 744,444 | |
[1] | In connection with the Ginnie Mae EBO program, we have re-recognized certain loans on our consolidated balance sheets and established a corresponding repurchase liability regardless of our intention to repurchase the loan. | ||
[2] | Balances represent advance collections and servicing fees to be remitted to NRZ. |
Equity - Narrative (Details)
Equity - Narrative (Details) - USD ($) | Jul. 14, 2014 | Sep. 23, 2013 | Dec. 27, 2012 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Jul. 31, 2016 | Oct. 31, 2013 |
Class of Stock [Line Items] | ||||||||
Payments for repurchase of equity | $ 72,300,000 | |||||||
Share repurchase program, authorized amount of repurchase | $ 500,000,000 | |||||||
Repurchase of common stock, value (in dollars) | $ 5,890,000 | $ 4,142,000 | $ 382,487,000 | $ 380,300,000 | ||||
Repurchase of common stock (in shares) | 991,985 | 13,163,793 | ||||||
Homeward Acquisition [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Payments for repurchase of equity | $ 157,900,000 | |||||||
Shares issued upon election (in shares) | 1,950,296 | 3,145,640 | ||||||
Homeward Acquisition [Member] | Series A Perpetual Convertible Preferred Stock [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Number of convertible shares remaining (in shares) | 62,000 | 100,000 | ||||||
Preferred shares issued (in shares) | 162,000 | |||||||
Preferred stock, par value (in dollars per share) | $ 0.01 | |||||||
Preferred stock, dividend rate | 3.75% | |||||||
Preferred stock, dividend rate, per-dollar-amount | $ 1,000 | |||||||
Conversion price (in dollars per share) | $ 31.79 |
Equity - Schedule of Accumulate
Equity - Schedule of Accumulated Other Comprehensive Loss (AOCL), Net of Income Taxes (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Equity [Abstract] | ||
Unrealized losses on cash flow hedges | $ 1,329 | $ 1,641 |
Other | 121 | 122 |
Accumulated Other Comprehensive Income (Loss), Net of Tax | $ 1,450 | $ 1,763 |
Derivative Financial Instrum118
Derivative Financial Instruments and Hedging Activities - Summary of Changes in Notional Balances of Holdings of Derivatives (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Fair value of derivative assets (liabilities) at: | ||
Derivatives, at fair value | $ 9,279 | $ 6,367 |
IRLCs [Member] | ||
Derivative Notional Balance [Roll Forward] | ||
Notional Amount, beginning balance | 278,317 | |
Additions | 6,711,653 | |
Amortization | 0 | |
Maturities | (5,236,398) | |
Terminations | (1,393,122) | |
Notional Amount, ending balance | 360,450 | |
Fair value of derivative assets (liabilities) at: | ||
Derivatives, at fair value | $ 6,507 | 6,080 |
Maturity | Jan. 2017 - May 2017 | |
Forward Mortgage Backed Securities Trades [Member] | ||
Derivative Notional Balance [Roll Forward] | ||
Notional Amount, beginning balance | $ 632,720 | |
Additions | 5,529,405 | |
Amortization | 0 | |
Maturities | (2,820,929) | |
Terminations | (2,732,019) | |
Notional Amount, ending balance | 609,177 | |
Fair value of derivative assets (liabilities) at: | ||
Derivatives, at fair value | $ (614) | 295 |
Maturity | Mar. 2017 | |
Interest Rate Cap [Member] | ||
Derivative Notional Balance [Roll Forward] | ||
Notional Amount, beginning balance | $ 2,110,000 | |
Additions | 703,333 | |
Amortization | (793,333) | |
Maturities | 0 | |
Terminations | (1,065,000) | |
Notional Amount, ending balance | 955,000 | |
Fair value of derivative assets (liabilities) at: | ||
Derivatives, at fair value | $ 1,836 | $ 2,042 |
Maturity | Oct. 2017 - Dec. 2018 |
Derivative Financial Instrum119
Derivative Financial Instruments and Hedging Activities - Summary of Open Derivative Positions and the Gains (Losses) on all Derivatives (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | ||
Not Designated as Hedging Instrument [Member] | |||
Hedge the effect of changes in interest rates on interest expense on borrowings | |||
Asset / (Liability) at Fair Value | [1] | $ 7,729 | |
Gains (Losses) | (8,034) | ||
Interest Rate Cap [Member] | |||
Hedge the effect of changes in interest rates on interest expense on borrowings | |||
Notional Amount | $ 955,000 | $ 2,110,000 | |
Interest Rate Cap [Member] | Other Net [Member] | Not Designated as Hedging Instrument [Member] | |||
Hedge the effect of changes in interest rates on interest expense on borrowings | |||
Expiration Date | Oct. 2017 - Dec. 2018 | ||
Notional Amount | $ 955,000 | ||
Asset / (Liability) at Fair Value | [1] | 1,836 | |
Gains (Losses) | (1,387) | ||
Forward Mortgage Backed Securities Trades [Member] | |||
Hedge the effect of changes in interest rates on interest expense on borrowings | |||
Notional Amount | $ 609,177 | 632,720 | |
Forward Mortgage Backed Securities Trades [Member] | Gain On Loans Held For Sale Net [Member] | Not Designated as Hedging Instrument [Member] | |||
Hedge the effect of changes in interest rates on interest expense on borrowings | |||
Expiration Date | Mar. 2017 | ||
Notional Amount | $ 609,177 | ||
Asset / (Liability) at Fair Value | [1] | (614) | |
Gains (Losses) | (6,592) | ||
IRLCs [Member] | |||
Hedge the effect of changes in interest rates on interest expense on borrowings | |||
Notional Amount | $ 360,450 | $ 278,317 | |
IRLCs [Member] | Gain On Loans Held For Sale Net [Member] | Not Designated as Hedging Instrument [Member] | |||
Hedge the effect of changes in interest rates on interest expense on borrowings | |||
Expiration Date | Jan. 2017 - May 2017 | ||
Notional Amount | $ 360,450 | ||
Asset / (Liability) at Fair Value | [1] | 6,507 | |
Gains (Losses) | $ (55) | ||
[1] | Derivatives are reported at fair value in Other assets or in Other liabilities on our consolidated balance sheets. |
Derivative Financial Instrum120
Derivative Financial Instruments and Hedging Activities - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Deferred unrealized losses | $ (1.4) | $ (1.7) |
Deferred unrealized losses, tax | 0.1 | $ 0.1 |
Amortization of accumulated losses on cash flow hedges from AOCL to other income (expense), net, projection | $ 0.3 |
Derivative Financial Instrum121
Derivative Financial Instruments and Hedging Activities - Schedule of Changes in AOCL (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning balance | $ 1,763 | ||
Other, net of taxes | 0 | $ 0 | $ 4 |
Ending balance | 1,450 | 1,763 | |
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 | 10,151 |
Losses on terminated cash flow hedging relationships amortized to earnings | (337) | (7,042) | (1,982) |
Decrease in deferred taxes on accumulated losses on cash flow hedges | 24 | 392 | 248 |
Decrease in accumulated losses on cash flow hedges, net of taxes | (313) | (6,650) | (1,734) |
Other, net of taxes | 0 | 0 | (4) |
Ending balance | $ 1,450 | $ 1,763 | $ 8,413 |
Derivative Financial Instrum122
Derivative Financial Instruments and Hedging Activities - Schedule of Other Income (Expense), Net Related to Derivative Financial Instruments (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||
Losses on economic hedges | $ (1,387) | $ (1,377) | $ (661) | |
Write-off of losses in AOCL for a discontinued hedge relationship | [1] | (337) | (7,042) | (1,982) |
Gain (Loss) on Derivative, Net | $ (1,724) | $ (8,419) | $ (2,643) | |
[1] | Includes the accelerated write-off in 2015 of deferred losses on a swap that had been designated for accounting purposes as a hedge of the purchase price of an MSR acquisition, when we sold a portion of the related MSRs. |
Interest Income - Schedule of C
Interest Income - Schedule of Components of Interest Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Other Income and Expenses [Abstract] | |||
Loans held for sale | $ 15,774 | $ 16,167 | $ 20,299 |
Automotive dealer financing notes | 1,534 | 39 | 0 |
Interest earning cash deposits and other | 1,775 | 2,114 | 2,692 |
Interest and Other Income | $ 19,083 | $ 18,320 | $ 22,991 |
Interest Expense - Schedule of
Interest Expense - Schedule of Components of Interest Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Debt securities: | ||||
Interest expense | $ 412,583 | $ 482,373 | $ 541,757 | |
Financing Liabilities [Member] | ||||
Debt securities: | ||||
Interest expense | [1],[2] | 248,834 | 292,306 | 371,852 |
Match Funded Liabilties [Member] | ||||
Debt securities: | ||||
Interest expense | 66,879 | 65,248 | 61,576 | |
Other Secured Borrowings [Member] | ||||
Debt securities: | ||||
Interest expense | 60,469 | 91,391 | 82,837 | |
Senior Notes [Member] | ||||
Debt securities: | ||||
Interest expense | 30,012 | 26,259 | 15,595 | |
Other [Member] | ||||
Debt securities: | ||||
Interest expense | $ 6,389 | $ 7,169 | $ 9,897 | |
[1] | Includes $10.5 million and $14.3 million of fees incurred in 2016 and 2015, respectively, in connection with our agreement to compensate NRZ/HLSS through June 2016 for certain increased costs associated with its servicing advance financing facilities that were the direct result of a previous 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:20162015 2014Servicing fees collected on behalf of NRZ/HLSS$633,545 $694,833 $736,122Less: Subservicing fee retained by Ocwen337,727 355,527 358,053Net servicing fees remitted to NRZ/HLSS295,818 339,306 378,069Less: Reduction in financing liability61,418 70,513 17,374Interest expense on NRZ/HLSS financing liability$234,400$268,793 $360,695The reduction in the financing liability does not include reimbursements to NRZ/HLSS for the loss of servicing revenues when we were terminated as servicer and where the related Rights to MSRs had been sold to NRZ/HLSS. |
Interest Expense - Schedule 125
Interest Expense - Schedule of Interest Expense Related to Financing Liabilities Recorded in Connection with the NRZ/HLSS Transactions (Details) - NRZ [Member] - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Schedule of Interest Expense [Line Items] | |||
Servicing fees collected on behalf of NRZ/HLSS | $ 633,545 | $ 694,833 | $ 736,122 |
Less: Subservicing fee retained by Ocwen | 337,727 | 355,527 | 358,053 |
Net servicing fees remitted to NRZ/HLSS | 295,818 | 339,306 | 378,069 |
Less: Reduction in financing liability | 61,418 | 70,513 | 17,374 |
Interest expense on NRZ/HLSS financing liability | $ 234,400 | $ 268,793 | $ 360,695 |
Interest Expense - Schedule 126
Interest Expense - Schedule of Components of Interest Expense (Footnote) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Other Income and Expenses [Abstract] | ||
Expenses in connection with downgrade in servicers rating | $ 10.5 | $ 14.3 |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income Before Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||||||||||
Domestic | $ (130,920) | $ (62,903) | $ (401,741) | ||||||||
Foreign | (75,441) | (66,958) | (41,418) | ||||||||
Loss before income taxes | $ (10,202) | $ 2,364 | $ (96,398) | $ (102,125) | $ (129,272) | $ (55,918) | $ 12,500 | $ 42,829 | $ (206,361) | $ (129,861) | $ (443,159) |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Current: | |||||||||||
Federal | $ (8,025) | $ 46,680 | $ (20,824) | ||||||||
State | 460 | 1,079 | (403) | ||||||||
Foreign | 5,099 | 161 | 9,195 | ||||||||
Current Income Tax Expense (Benefit) | (2,466) | 47,920 | (12,032) | ||||||||
Deferred: | |||||||||||
Federal | (22,054) | (27,173) | 41,986 | ||||||||
State | 4,701 | (3,719) | (997) | ||||||||
Foreign | (2,806) | 2,754 | (6,162) | ||||||||
Provision for valuation allowance on deferred tax assets | 15,639 | 97,069 | 3,601 | ||||||||
Deferred Income Tax Expense (Benefit) | (4,520) | 68,931 | 38,428 | ||||||||
Total | $ 228 | $ (7,110) | $ (9,180) | $ 9,076 | $ 94,985 | $ 10,832 | $ 2,594 | $ 8,440 | $ (6,986) | $ 116,851 | $ 26,396 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Deferred Tax Assets, Valuation Allowance | $ 132,073 | $ 116,434 | |
U.S. Federal corporate income tax rate | 35.00% | ||
Total interest and penalties | $ (1,000) | 6,300 | $ 2,300 |
Accruals for interest and penalties | 6,200 | 12,200 | |
Liability for selected tax items | $ 17,000 | 32,500 | |
Range of period where there is possible change in unrecognized tax benefits | 12 months | ||
Decrease in Unrecognized Tax Benefits is Reasonably Possible | $ 17,000 | ||
Deferred tax liability | 1,788 | ||
EDC benefits, tax expense (benefit) | $ 62,700 | $ 68,200 | $ 61,200 |
EDC benefits, effect on diluted EPS (in dollars per share) | $ (0.51) | $ (0.54) | $ 0.47 |
U.S. [Member] | |||
Deferred Tax Assets, Valuation Allowance | $ 95,500 | $ 84,500 | |
U.S. NOL carryforwards | 192,400 | ||
USVI [Member] | |||
Deferred Tax Assets, Valuation Allowance | 36,200 | $ 31,600 | |
USVI NOL carryforwards | 361,200 | ||
Operating Loss Carryforwards [Member] | USVI [Member] | |||
Valuation allowance on deferred tax assets | 67,300 | ||
Capital Loss Carryforward [Member] | USVI [Member] | |||
Capital loss carryforwards | 23,000 | ||
India And Philippines Subsidiary [Member] | |||
Deferred tax liability | 13,600 | ||
Undistributed earnings of foreign subsidiaries | 29,700 | ||
Foreign Subsidiaries [Member] | |||
Undistributed earnings of foreign subsidiaries | 157,000 | ||
Cash and short term investments | $ 200,200 | ||
Ocwen Mortgage Servicing Inc [Member] | |||
Percentage of income tax credit on qualified income | 90.00% | ||
EDC benefits, exemption term | 30 years |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Income Tax Disclosure [Abstract] | ||||||||||||
Expected income tax expense (benefit) at statutory rate | $ (72,225) | $ (45,451) | $ (155,106) | |||||||||
Differences between expected and actual income tax expense: | ||||||||||||
Impairment of goodwill | 0 | 0 | 92,034 | |||||||||
State tax, after Federal tax benefit | 250 | (2,867) | (1,084) | |||||||||
Provision for liability for uncertain tax positions | 2,236 | 18,205 | 47 | |||||||||
Provision for liability for intra-entity transactions | 3,357 | 4,700 | 6,037 | |||||||||
Non-deductible regulatory settlements | 0 | 700 | 53,375 | |||||||||
Other permanent differences | 515 | (463) | (254) | |||||||||
Foreign tax differential | 42,463 | 41,695 | 27,799 | |||||||||
Provision for valuation allowance on deferred tax assets | [1] | 15,639 | 97,069 | 3,601 | ||||||||
Other | 779 | 3,263 | (53) | |||||||||
Total | $ 228 | $ (7,110) | $ (9,180) | $ 9,076 | $ 94,985 | $ 10,832 | $ 2,594 | $ 8,440 | $ (6,986) | $ 116,851 | $ 26,396 | |
[1] | The provision for valuation allowance in 2016 and 2015 primarily relates to the recording of the valuation allowance on both the U.S. and USVI net deferred tax assets as of December 31, 2016 and 2015. Also included in the provision for valuation allowance in 2015 is the reversal of a portion of the valuation allowance previously recorded on taxable losses earned by OMS which were taxable in the U.S. as effectively connected income (ECI), which is equal to the positive taxable income that is expected to be generated for ECI purposes for the year ended December 31, 2015. |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets: | ||
Net operating loss carryforward | $ 67,657 | $ 24,511 |
Mortgage servicing rights amortization | 11,592 | 15,697 |
Partnership losses | 8,976 | 10,137 |
Intangible asset amortization | 8,223 | 10,293 |
Accrued incentive compensation | 8,017 | 10,107 |
Accrued legal settlements | 9,178 | 10,519 |
Stock-based compensation expense | 5,659 | 4,834 |
Accrued other liabilities | 5,543 | 5,641 |
Foreign deferred assets | 5,219 | 3,647 |
Foreign tax credit | 4,262 | 0 |
Tax residuals and deferred income on tax residuals | 4,037 | 4,052 |
Bad debt and allowance for loan losses | 3,268 | 6,227 |
Reserve for servicing exposure | 1,900 | 3,353 |
Delinquent servicing fees | 1,647 | 2,360 |
Capital losses | 1,450 | 1,710 |
Other | 1,872 | 7,056 |
Deferred tax assets, gross | 148,500 | 120,144 |
Deferred tax liabilities: | ||
Foreign undistributed earnings | 13,619 | 5,421 |
Other | 76 | 77 |
Deferred tax liabilities, gross | 13,695 | 5,498 |
Deferred tax assets (liability), gross | 134,805 | 114,646 |
Valuation allowance | (132,073) | (116,434) |
Deferred tax assets (liabilities), net | $ 2,732 | |
Deferred tax assets (liabilities), net | $ 1,788 |
Income Taxes - Schedule of Unre
Income Taxes - Schedule of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Beginning balance | $ 32,548 | $ 22,523 | $ 27,273 |
Additions for tax positions of prior years | 0 | 13,162 | 1,392 |
Reductions for tax positions of prior years | 0 | (2,741) | (6,010) |
Reductions for settlements | (14,420) | 0 | 0 |
Lapses in statute of limitations | (1,134) | (396) | (132) |
Ending balance | $ 16,994 | $ 32,548 | $ 22,523 |
Basic and Diluted Earnings (133
Basic and Diluted Earnings (Loss) per Share - Schedule of Reconciliation of the Calculation of Basic EPS to Diluted EPS (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |||||
Basic loss per share: | |||||||||||||||
Net income (loss) attributable to Ocwen common stockholders | $ (10,444) | $ 9,391 | $ (87,378) | $ (111,331) | $ (224,241) | $ (66,869) | $ 9,738 | $ 34,355 | $ (199,762) | [1] | $ (247,017) | [1] | $ (472,602) | [1] | |
Weighted average shares of common stock (in shares) | 123,990,700 | 125,315,899 | 131,362,284 | ||||||||||||
Basic earnings (loss) per share (in dollars per share) | $ (0.08) | $ 0.08 | $ (0.71) | $ (0.90) | $ (1.79) | $ (0.53) | $ 0.08 | $ 0.27 | $ (1.61) | $ (1.97) | $ (3.60) | ||||
Diluted earnings (loss) per share: | |||||||||||||||
Net income (loss) attributable to Ocwen common stockholders | $ (10,444) | $ 9,391 | $ (87,378) | $ (111,331) | $ (224,241) | $ (66,869) | $ 9,738 | $ 34,355 | $ (199,762) | [1] | $ (247,017) | [1] | $ (472,602) | [1] | |
Preferred stock dividends | [1],[2] | 0 | 0 | 0 | |||||||||||
Adjusted net loss attributable to Ocwen | [1] | $ (199,762) | $ (247,017) | $ (472,602) | |||||||||||
Effect of dilutive elements: | |||||||||||||||
Preferred Shares | [1],[2] | 0 | 0 | 0 | |||||||||||
Stock options | [1] | 0 | 0 | 0 | |||||||||||
Common stock awards | [1] | 0 | 0 | 0 | |||||||||||
Dilutive weighted average shares of common stock (in shares) | 123,990,700 | 125,315,899 | 131,362,284 | ||||||||||||
Diluted earnings (loss) per share (in dollars per share) | $ (0.08) | $ 0.08 | $ (0.71) | $ (0.90) | $ (1.79) | $ (0.53) | $ 0.08 | $ 0.27 | $ (1.61) | $ (1.97) | $ (3.60) | ||||
Stock options and common stock awards excluded from the computation of diluted earnings per share: | |||||||||||||||
Anti-dilutive Securities (in shares) | [3] | 7,176,089 | 2,038,588 | 314,688 | |||||||||||
Market Based [Member] | |||||||||||||||
Stock options and common stock awards excluded from the computation of diluted earnings per share: | |||||||||||||||
Anti-dilutive Securities (in shares) | [4] | 795,456 | 924,438 | 295,000 | |||||||||||
[1] | For 2016, 2015 and 2014, we have excluded the effect of preferred stock, stock options and common stock awards from the computation of diluted earnings per share because of the anti-dilutive effect of our reported net loss. | ||||||||||||||
[2] | Prior to the conversion of our remaining preferred stock into common stock in July 2014, we computed the effect on diluted earnings per share using the if-converted method. Under this method, we assumed the conversion of the preferred stock into shares of common stock unless the effect was anti-dilutive. | ||||||||||||||
[3] | These stock options were anti-dilutive because their exercise price was greater than the average market price of our stock. | ||||||||||||||
[4] | Shares that are issuable upon the achievement of certain performance criteria related to Ocwen’s stock price and an annualized rate of return to investors. |
Employee Compensation and Be134
Employee Compensation and Benefit Plans - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Employer percent match of employee contributions | 50.00% | ||
Employer match limit, percent of employee compensation | 2.00% | ||
Provident fund contribution percentage on portion of employees salary | 12.00% | ||
Contributions to 401(k) | $ 5 | $ 5.4 | $ 5.8 |
Compensation expense recognized | $ 25.5 | $ 30.2 | $ 13.5 |
Common stock remaining available for future issuance (in shares) | 5,097,874 | ||
Contractual term of all options granted | 10 years | ||
Stock Options [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Unrecognized compensation costs related to non-vested stock options | $ 2.4 | ||
Weighted average remaining requisite service period | 1 year 10 months 15 days | ||
Restricted Stock Units [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Weighted average remaining requisite service period | 1 year 10 months 29 days | ||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options | $ 5.1 |
Employee Compensation and Be135
Employee Compensation and Benefit Plans - Schedule of Stock Awards Vesting (Details) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
2008 - 2014 Awards [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percent of options awarded | 100.00% | ||
2015 Awards [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percent of options awarded | 100.00% | ||
2016 Awards [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percent of options awarded | 100.00% | ||
Time-Based [Member] | Stock Options [Member] | 2008 - 2014 Awards [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percent of options awarded | 25.00% | ||
Award vesting period | 4 years | ||
Vesting percentage of Awards | 25.00% | ||
Time-Based [Member] | Stock Options [Member] | 2015 Awards [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percent of options awarded | 35.00% | ||
Award vesting period | 4 years | ||
Vesting percentage of Awards | 25.00% | ||
Time-Based [Member] | Restricted Stock Units [Member] | 2015 Awards [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percent of options awarded | 16.00% | ||
Award vesting period | 4 years | ||
Vesting percentage of Awards | 33.30% | ||
Time-Based [Member] | Restricted Stock Units [Member] | 2016 Awards [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percent of options awarded | 47.00% | ||
Award vesting period | 4 years | ||
Vesting percentage of Awards | 25.00% | ||
Market Performance-Based [Member] | Stock Options [Member] | 2008 - 2014 Awards [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percent of options awarded | 50.00% | ||
Award vesting period | 3 years | ||
Vesting percentage of Awards | 25.00% | ||
Percentage of compounded annual gain of stock price over the exercise price | 20.00% | ||
Extraordinary Market Performance-Based [Member] | Stock Options [Member] | 2008 - 2014 Awards [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percent of options awarded | 25.00% | ||
Award vesting period | 3 years | ||
Vesting percentage of Awards | 25.00% | ||
Percentage of compounded annual gain of stock price over the exercise price | 25.00% | ||
Time-Based Vesting Schedule And Market Performance-Based Vesting Date [Member] | Restricted Stock Units [Member] | 2015 Awards [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percent of options awarded | 49.00% | ||
Award vesting period | 4 years | ||
Vesting percentage of Awards | 25.00% | ||
Time-Based Vesting Schedule And Market Performance-Based Vesting Date [Member] | Restricted Stock Units [Member] | 2016 Awards [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percent of options awarded | 53.00% | ||
Award vesting period | 4 years | ||
Vesting percentage of Awards | 25.00% | ||
Market Performance Based - Stock Price Has At Least Doubled Over The Exercise Price [Member] | Stock Options [Member] | 2008 - 2014 Awards [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage of Awards | 25.00% | ||
Market Performance Based - Stock Price Has At Least Tripled Over The Exercise Price [Member] | Stock Options [Member] | 2008 - 2014 Awards [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage of Awards | 25.00% |
Employee Compensation and Be136
Employee Compensation and Benefit Plans - Schedule of Stock Option Activity (Details) - Stock Options [Member] - $ / shares | 12 Months Ended | |||||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Outstanding (in shares) | 7,151,225 | [1],[2] | 6,828,861 | [1],[2] | 8,182,611 | |
Outstanding (in dollars per share) | $ 10.10 | [1],[2] | $ 9.99 | [1],[2] | $ 10.62 | |
Granted (in shares) | [3],[4] | 968,041 | 330,000 | |||
Granted (in dollars per share) | [3],[4] | $ 17.48 | $ 34.48 | |||
Exercised (in shares) | [5],[6] | (69,805) | (145,677) | (683,750) | ||
Exercised (in dollars per share) | [5],[6] | $ 5.81 | $ 5.24 | $ 8.30 | ||
Forfeited/Canceled (in shares) | [4],[7] | (154,786) | (500,000) | (1,000,000) | ||
Forfeited/Canceled (in dollars per share) | [4],[7] | $ 21.80 | $ 24.38 | $ 24.38 | ||
Outstanding (in shares) | [1],[2] | 6,926,634 | 7,151,225 | 6,828,861 | ||
Outstanding (in dollars per share) | [1],[2] | $ 9.88 | $ 10.10 | $ 9.99 | ||
Exercisable at end of year (in shares) | [1],[2],[8] | 6,344,958 | 6,187,559 | 5,750,739 | ||
Exercisable at end of year (in dollars per share) | [1],[2],[8] | $ 8.71 | $ 8.25 | $ 6.84 | ||
[1] | At December 31, 2016, the weighted average remaining contractual term of options outstanding and options exercisable was 2.86 years and 2.42 years, respectively. | |||||
[2] | Excluding 280,000 market-based options that have not met their performance criteria, the net aggregate intrinsic value of stock options outstanding and stock options exercisable at December 31, 2016 was $0 and $0, respectively. A total of 4,662,814 market-based options were outstanding at December 31, 2016, of which 4,382,814 were exercisable. | |||||
[3] | The weighted average grant date fair value of stock options granted was $3.28 and $12.94 during 2015 and 2014, respectively. | |||||
[4] | Upon Mr. Erbey’s resignation as an officer and director of Ocwen on January 16, 2015, 500,000 of his unvested options would have been forfeited immediately. However, Ocwen agreed to modify the awards to allow them to vest. This had an effect equivalent to the canceling of the original awards and the granting of new awards effective on the date of resignation. | |||||
[5] | In connection with the exercise of stock options during 2015 and 2014, employees delivered 56,013 and 249,696 shares, respectively, of common stock to Ocwen as payment for the exercise price and the income tax withholdings on the compensation. As a result, a total of 89,664 and 434,054 net shares of stock were issued in 2015 and 2014, respectively, related to the exercise of stock options. | |||||
[6] | The total intrinsic value of stock options exercised, which is defined as the amount by which the market value of the stock on the date of exercise exceeds the exercise price, was $0.1 million, $0.3 million and $13.7 million for 2016, 2015 and 2014, respectively. | |||||
[7] | Stock options granted in 2012 included 2,000,000 options granted to Ocwen’s former Executive Chairman, William C. Erbey at an exercise price of $24.38 equal to the closing price of the stock on the day of the Committee’s approval. On April 22, 2014, Mr. Erbey surrendered 1,000,000 of these options. We recognized the remaining $5.7 million of previously unrecognized compensation expense associated with these options as of the date of surrender. | |||||
[8] | The total fair value of the stock options that vested and became exercisable during 2016, 2015 and 2014, based on grant-date fair value, was $1.1 million, $2.0 million and $2.6 million, respectively. |
Employee Compensation and Be137
Employee Compensation and Benefit Plans - Schedule of Stock Option Activity (Footnote) (Details) - USD ($) $ / shares in Units, $ in Millions | Jan. 16, 2015 | Apr. 22, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2012 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock options granted, fair value (in dollars per share) | $ 3.28 | $ 12.94 | ||||
Total intrinsic value of stock options exercised | $ 0.1 | $ 0.3 | $ 13.7 | |||
Shares delivered by employees as payment for the exercise price and income tax withholdings on compensation (in shares) | 56,013 | 249,696 | ||||
Shares issued related to exercise of stock options (in shares) | 89,664 | 434,054 | ||||
Market-based options that have not met performance criteria (in shares) | 280,000 | |||||
Net aggregate intrinsic value of stock options outstanding | $ 0 | |||||
Net aggregate intrinsic value of stock options exercisable | $ 0 | |||||
Market-based options outstanding (in shares) | 4,662,814 | |||||
Market-based options outstanding, exercisable (in shares) | 4,382,814 | |||||
Weighted average remaining contractual term of options outstanding | 2 years 10 months 9 days | |||||
Weighted average remaining contractual term of options exercisable | 2 years 5 months 1 day | |||||
Total fair value of stock options vested and became exercisable | $ 1.1 | $ 2 | $ 2.6 | |||
Former Executive Chairman Of Board Of Directors [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock options granted (in shares) | 2,000,000 | |||||
Stock options granted, exercise price (in dollars per share) | $ 24.38 | |||||
Options surrendered (in shares) | 1,000,000 | |||||
Recognized compensation expense, previously unrecognized | $ 5.7 | |||||
Stock options vested | 500,000 |
Employee Compensation and Be138
Employee Compensation and Benefit Plans Schedule of Stock Unit Activity (Details) - $ / shares | 12 Months Ended | |||||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||
Unvested at beginning of year (in shares) | 835,730 | [1],[2] | 79,612 | [1],[2] | 28,235 | |
Unvested at beginning of year (in dollar per share) | $ 10 | [1],[2] | $ 32.23 | [1],[2] | $ 25.23 | |
Granted (in shares) | [3],[4] | 2,184,100 | 790,397 | 63,500 | ||
Granted (in dollar per share) | [3],[4] | $ 2.19 | $ 8.53 | $ 34.34 | ||
Vested (in shares) | [5],[6] | (26,666) | (34,279) | (12,123) | ||
Vested (in dollar per share) | [5],[6] | $ 32.56 | $ 27.92 | $ 26.98 | ||
Forfeited/Canceled (in shares) | (241,110) | 0 | 0 | |||
Forfeited/Canceled (in dollar per share) | $ 6.17 | $ 0 | $ 0 | |||
Unvested at end of year (in shares) | [1],[2] | 2,752,054 | 835,730 | 79,612 | ||
Unvested at end of year (in dollar per share) | [1],[2] | $ 3.91 | $ 10 | $ 32.23 | ||
[1] | At December 31, 2016, the weighted average remaining contractual term of share units outstanding was 2.60 years. | |||||
[2] | Excluding the 502,446 market-based stock awards that have not met their performance criteria, the net aggregate intrinsic value of stock awards outstanding at December 31, 2016 was $12.1 million. | |||||
[3] | Stock units granted in 2015 included 584,438 stock units with a market condition for vesting based on an average common stock trading price of $16.26. As of December 31, 2016, these awards had not yet met the market condition. | |||||
[4] | Stock units granted in 2016 included 1,156,500 stock units with a market condition for vesting based on an average common stock trading price of $4.78. The market condition for these awards was met on November 30, 2016. | |||||
[5] | The total fair value of the stock units that vested during 2016, 2015 and 2014, based on grant-date fair value, was $0.9 million, $1.0 million and $0.3 million, respectively. | |||||
[6] | The total intrinsic value of stock units vested, which is defined as the market value of the stock on the date of vesting, was $0.1 million, $0.3 million and $0.3 million for 2016, 2015 and 2014, respectively. |
Employee Compensation and Be139
Employee Compensation and Benefit Plans Schedule of Stock Unit Activity (Footnote) (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |||||||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock units granted | [1],[2] | 2,184,100 | 790,397 | 63,500 | ||||
Intrinsic value of stock units vested | $ 0.1 | $ 0.3 | $ 0.3 | |||||
Total intrinsic value of stock units vested | $ 0.9 | $ 1 | $ 0.3 | |||||
Unvested stock units | 2,752,054 | [3],[4] | 835,730 | [3],[4] | 79,612 | [3],[4] | 28,235 | |
Net aggregate intrinsic value of stock awards outstanding | $ 12.1 | |||||||
Weighted average remaining contractual term of share units outstanding | 2 years 7 months 6 days | |||||||
Market Performance-Based [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock units granted | 1,156,500 | 584,438 | ||||||
Average common stock trading price | $ 4.78 | $ 16.26 | ||||||
Unvested stock units | 502,446 | |||||||
[1] | Stock units granted in 2015 included 584,438 stock units with a market condition for vesting based on an average common stock trading price of $16.26. As of December 31, 2016, these awards had not yet met the market condition. | |||||||
[2] | Stock units granted in 2016 included 1,156,500 stock units with a market condition for vesting based on an average common stock trading price of $4.78. The market condition for these awards was met on November 30, 2016. | |||||||
[3] | At December 31, 2016, the weighted average remaining contractual term of share units outstanding was 2.60 years. | |||||||
[4] | Excluding the 502,446 market-based stock awards that have not met their performance criteria, the net aggregate intrinsic value of stock awards outstanding at December 31, 2016 was $12.1 million. |
Employee Compensation and Be140
Employee Compensation and Benefit Plans - Schedule of Assumptions used to Value Stock Awards Granted (Details) - $ / shares | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Monte Carlo [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Risk-free interest rate | 1.12% | 1.23% | ||
Expected stock price volatility | [1] | 77.00% | 65.00% | |
Expected dividend yield | 0.00% | 0.00% | ||
Expected option life (in years) | [2],[3] | |||
Fair value | $ 2 | $ 7.99 | ||
Black Scholes [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Risk-free interest rate, minimum | 1.60% | 1.98% | ||
Risk-free interest rate, maximum | 2.08% | 2.60% | ||
Expected stock price volatility | [1] | 45.00% | 42.00% | |
Expected dividend yield | 0.00% | 0.00% | ||
Expected option life (in years) | [2] | 5 years 6 months | ||
Binomial [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Risk-free interest rate, minimum | 0.20% | 0.00% | ||
Risk-free interest rate, maximum | 2.74% | 3.05% | ||
Expected stock price volatility, minimum | [1] | 51.00% | 41.00% | |
Expected stock price volatility, maximum | [1] | 108.00% | 42.00% | |
Expected dividend yield | 0.00% | 0.00% | ||
Contractual life (in years) | 10 years | 10 years | ||
Minimum [Member] | Black Scholes [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected option life (in years) | [2] | 6 years 6 months | ||
Fair value | $ 3.36 | $ 11.93 | ||
Minimum [Member] | Binomial [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected option life (in years) | [2] | 5 years 4 months 28 days | 4 years 4 months 6 days | |
Fair value | $ 5.41 | $ 8.99 | ||
Maximum [Member] | Black Scholes [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Fair value | $ 4.62 | $ 17.01 | ||
Maximum [Member] | Binomial [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected option life (in years) | [2] | 5 years 5 months 16 days | 5 years 7 months 21 days | |
Fair value | $ 5.46 | $ 13.82 | ||
[1] | We generally estimate volatility based on the historical volatility of Ocwen’s common stock over the most recent period that corresponds with the estimated expected life of the option. For stock awards valued using a Monte Carlo simulation, volatility is computed as a blend of historical volatility and implied volatility based on traded options on Ocwen’s common stock. | |||
[2] | For the options valued using the Black-Scholes model we determined the expected life based on historical experience with similar awards, giving consideration to the contractual term, exercise patterns and post vesting forfeitures. The expected term of the options valued using the lattice (binomial) model is derived from the output of the model. The lattice (binomial) model incorporates exercise assumptions based on analysis of historical data. For all options, the expected life represents the period of time that options granted were expected to be outstanding at the date of the award. | |||
[3] | The stock units that contain both a service condition and a market-based condition are valued using the Monte Carlo simulation. The expected term is derived from the output of the simulation and represents the expected time to meet the market-based vesting condition. For equity awards with both service and market conditions, the requisite service period is the longer of the derived or explicit service period. In this case, the explicit service condition (vesting period) is the requisite service period, and the graded vesting method is used for expense recognition. |
Employee Compensation and Be141
Employee Compensation and Benefit Plans - Schedule of Equity-based Compensation Expense Related to Stock Options and Stock Awards and Related Excess Tax Benefit (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Equity-based compensation expense: | |||
Awards | $ 5,181 | $ 7,291 | $ 10,729 |
Excess tax benefit related to share-based awards | 686 | 6,824 | 6,374 |
Stock Options [Member] | |||
Equity-based compensation expense: | |||
Awards | 1,644 | 3,978 | 9,983 |
Stock Awards [Member] | |||
Equity-based compensation expense: | |||
Awards | $ 3,537 | $ 3,313 | $ 746 |
Business Segment Reporting - Sc
Business Segment Reporting - Schedule of Segment Reporting Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |||||||||
Results of Operations | |||||||||||||||||||
Revenue | $ 323,904 | $ 359,448 | $ 373,054 | $ 330,757 | $ 362,457 | $ 404,946 | $ 463,251 | $ 510,444 | $ 1,387,163 | [1] | $ 1,741,098 | [1] | $ 2,111,325 | [1] | |||||
Expenses | 237,901 | 271,678 | 385,018 | 328,657 | 359,848 | 387,726 | 352,252 | 378,358 | 1,223,254 | [1],[2] | 1,478,184 | [1],[2] | 2,035,208 | [1],[2] | |||||
Other income (expense): | |||||||||||||||||||
Interest income | 19,083 | 18,320 | 22,991 | ||||||||||||||||
Interest expense | (412,583) | (482,373) | (541,757) | ||||||||||||||||
Gain on sale of mortgage servicing rights, net | (14,000) | 41,200 | 30,300 | 26,400 | 8,492 | 83,921 | 0 | ||||||||||||
Other | [1] | 14,738 | (12,643) | (510) | |||||||||||||||
Total other expense, net | (96,205) | (85,406) | (84,434) | (104,225) | (131,881) | [3] | (73,138) | [3] | (98,499) | [3] | (89,257) | [3] | (370,270) | (392,775) | (519,276) | ||||
Loss before income taxes | (10,202) | $ 2,364 | $ (96,398) | $ (102,125) | (129,272) | $ (55,918) | $ 12,500 | $ 42,829 | (206,361) | (129,861) | (443,159) | ||||||||
Total Assets | |||||||||||||||||||
Balance | 7,655,663 | 7,380,308 | 7,655,663 | 7,380,308 | 8,243,662 | ||||||||||||||
Servicing [Member] | |||||||||||||||||||
Results of Operations | |||||||||||||||||||
Revenue | [1] | 1,247,159 | 1,613,537 | 1,985,436 | |||||||||||||||
Expenses | [1],[2] | 920,434 | 1,221,879 | 1,643,323 | |||||||||||||||
Other income (expense): | |||||||||||||||||||
Interest income | (109) | 1,044 | 2,981 | ||||||||||||||||
Interest expense | (357,413) | (446,377) | (515,141) | ||||||||||||||||
Gain on sale of mortgage servicing rights, net | 8,492 | 83,921 | |||||||||||||||||
Other | [1] | 15,812 | (14,370) | (4,043) | |||||||||||||||
Total other expense, net | (333,218) | (375,782) | (516,203) | ||||||||||||||||
Loss before income taxes | (6,493) | 15,876 | (174,090) | ||||||||||||||||
Total Assets | |||||||||||||||||||
Balance | 3,312,357 | 4,089,064 | 3,312,357 | 4,089,064 | 5,864,061 | ||||||||||||||
Lending [Member] | |||||||||||||||||||
Results of Operations | |||||||||||||||||||
Revenue | [1] | 112,363 | 124,724 | 119,220 | |||||||||||||||
Expenses | [1],[2] | 104,342 | 97,692 | 156,272 | |||||||||||||||
Other income (expense): | |||||||||||||||||||
Interest income | 15,300 | 14,669 | 16,459 | ||||||||||||||||
Interest expense | (14,398) | (9,859) | (10,725) | ||||||||||||||||
Gain on sale of mortgage servicing rights, net | 0 | 0 | |||||||||||||||||
Other | [1] | 1,065 | 2,123 | 4,476 | |||||||||||||||
Total other expense, net | 1,967 | 6,933 | 10,210 | ||||||||||||||||
Loss before income taxes | 9,988 | 33,965 | (26,842) | ||||||||||||||||
Total Assets | |||||||||||||||||||
Balance | 3,863,848 | 2,811,154 | 3,863,848 | 2,811,154 | 1,963,729 | ||||||||||||||
Corporate Items and Other [Member] | |||||||||||||||||||
Results of Operations | |||||||||||||||||||
Revenue | [1] | 27,646 | 2,895 | 6,825 | |||||||||||||||
Expenses | [1],[2] | 198,483 | 158,671 | 235,769 | |||||||||||||||
Other income (expense): | |||||||||||||||||||
Interest income | 3,892 | 2,607 | 3,551 | ||||||||||||||||
Interest expense | (40,772) | (26,137) | (15,891) | ||||||||||||||||
Gain on sale of mortgage servicing rights, net | 0 | 0 | |||||||||||||||||
Other | [1] | (2,139) | (396) | (943) | |||||||||||||||
Total other expense, net | (39,019) | (23,926) | (13,283) | ||||||||||||||||
Loss before income taxes | (209,856) | (179,702) | (242,227) | ||||||||||||||||
Total Assets | |||||||||||||||||||
Balance | 479,458 | 480,090 | 479,458 | 480,090 | 415,872 | ||||||||||||||
Corporate Eliminations [Member] | |||||||||||||||||||
Results of Operations | |||||||||||||||||||
Revenue | [1] | (5) | (58) | (156) | |||||||||||||||
Expenses | [1],[2] | (5) | (58) | (156) | |||||||||||||||
Other income (expense): | |||||||||||||||||||
Interest income | 0 | 0 | 0 | ||||||||||||||||
Interest expense | 0 | 0 | 0 | ||||||||||||||||
Gain on sale of mortgage servicing rights, net | 0 | 0 | |||||||||||||||||
Other | [1] | 0 | 0 | 0 | |||||||||||||||
Total other expense, net | 0 | 0 | 0 | ||||||||||||||||
Loss before income taxes | 0 | 0 | 0 | ||||||||||||||||
Total Assets | |||||||||||||||||||
Balance | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | ||||||||||||||
[1] | Inter-segment billings for services rendered to other segments are recorded as revenues, as contra-expense or as other income, depending on the type of service that is rendered. | ||||||||||||||||||
[2] | Depreciation and amortization expense are as follows: Servicing Lending Corporate Items and Other Business Segments ConsolidatedFor the year ended December 31, 2016: Depreciation expense$6,804 $228 $18,306 $25,338Amortization of mortgage servicing rights32,669 309 — 32,978Amortization of debt discount727 — 3,450 4,177Amortization of debt issuance costs 13,455 — 12,207 25,662 For the year ended December 31, 2015: Depreciation expense$2,990 $380 $15,789 $19,159Amortization of mortgage servicing rights98,849 345 — 99,194Amortization of debt discount2,680 — — 2,680Amortization of debt issuance costs 21,269 — 1,395 22,664 For the year ended December 31, 2014: Depreciation expense$9,955 $332 $11,623 $21,910Amortization of mortgage servicing rights249,471 705 199 250,375Amortization of debt discount1,318 — — 1,318Amortization of debt issuance costs 4,294 — 845 5,139 | ||||||||||||||||||
[3] | Other income (expense), net for 2015 includes gains (losses) on the sale of MSRs in the first, second, third and fourth quarter of $26.4 million, $30.3 million, $41.2 million and $(14.0) million, respectively. |
Business Segment Reporting -143
Business Segment Reporting - Schedule of Depreciation and Amortization by Segment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Segment Reporting Information [Line Items] | |||
Depreciation expense | $ 25,338 | $ 19,159 | $ 21,910 |
Amortization of mortgage servicing rights | 32,978 | 99,194 | 250,375 |
Amortization of debt discount | 4,177 | 2,680 | 1,318 |
Amortization of debt issuance costs | 25,662 | 22,664 | 5,139 |
Servicing [Member] | |||
Segment Reporting Information [Line Items] | |||
Depreciation expense | 6,804 | 2,990 | 9,955 |
Amortization of mortgage servicing rights | 32,669 | 98,849 | 249,471 |
Amortization of debt discount | 727 | 2,680 | 1,318 |
Amortization of debt issuance costs | 13,455 | 21,269 | 4,294 |
Lending [Member] | |||
Segment Reporting Information [Line Items] | |||
Depreciation expense | 228 | 380 | 332 |
Amortization of mortgage servicing rights | 309 | 345 | 705 |
Amortization of debt discount | 0 | 0 | 0 |
Amortization of debt issuance costs | 0 | 0 | 0 |
Corporate Items and Other [Member] | |||
Segment Reporting Information [Line Items] | |||
Depreciation expense | 18,306 | 15,789 | 11,623 |
Amortization of mortgage servicing rights | 0 | 0 | 199 |
Amortization of debt discount | 3,450 | 0 | 0 |
Amortization of debt issuance costs | $ 12,207 | $ 1,395 | $ 845 |
Related Party Transactions - Su
Related Party Transactions - Summary of Revenue and Expenses Related to Various Service Agreements (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2014USD ($) | |
Altisource Agreements [Member] | |
Revenues and Expenses: | |
Revenues | $ 43,075 |
Expenses | 101,520 |
HLSS Support Services Agreement [Member] | |
Revenues and Expenses: | |
Revenues | 1,315 |
Expenses | 1,729 |
AAMC Support Services And Facilities Agreements [Member] | |
Revenues and Expenses: | |
Revenues | 1,160 |
Residential Servicing Agreement [Member] | |
Revenues and Expenses: | |
Revenues | $ 15,658 |
Regulatory Requirements - Narra
Regulatory Requirements - Narrative (Details) $ in Millions | 12 Months Ended | 36 Months Ended |
Dec. 31, 2016USD ($) | Dec. 31, 2016USD ($) | |
Brokers and Dealers [Abstract] | ||
Third party monitoring costs related to regulatory matters and resolutions | $ 171 | |
Number of days from fiscal year end that servicer is obliged to provide audited financial statements | 90 days | |
Capital requirement based on outstanding UPB of owned and subserviced portfolio | $ 344.7 | $ 344.7 |
Commitments - Narrative (Detail
Commitments - Narrative (Details) - USD ($) $ in Millions | Mar. 29, 2013 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Other Commitments [Line Items] | ||||
Operating leases, rent expense | $ 20 | $ 23.7 | $ 19 | |
Floating Rate Reverse Mortgage Loans [Member] | ||||
Other Commitments [Line Items] | ||||
Additional borrowing capacity to borrowers | 1,200 | |||
Forward Mortgage Loan Interest Rate Lock Commitments [Member] | ||||
Other Commitments [Line Items] | ||||
Short-term commitments to lend | 322.3 | |||
Reverse Mortgage Loan Interest Rate Lock Commitments [Member] | ||||
Other Commitments [Line Items] | ||||
Short-term commitments to lend | $ 38.2 | |||
Altisource [Member] | ||||
Other Commitments [Line Items] | ||||
Automatic renewal term of support services agreement | 1 year |
Commitments - Schedule of Futur
Commitments - Schedule of Future Minimum Rental Commitments under Non-cancelable Operating Leases (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
2,017 | $ 14,037 |
2,018 | 9,878 |
2,019 | 5,590 |
2,020 | 2,929 |
2,021 | 1,379 |
Thereafter | 1,184 |
Total minimum lease payments, gross | 34,997 |
Less: Sublease income | (1,027) |
Total minimum lease payments, net | $ 33,970 |
Contingencies - Narrative (Deta
Contingencies - Narrative (Details) | Apr. 20, 2017States | Feb. 17, 2017USD ($)Borrower | Dec. 19, 2014USD ($) | Dec. 31, 2016USD ($)LoanTrustStates | Sep. 30, 2016USD ($) | Dec. 31, 2015USD ($)Loan |
Loss Contingencies [Line Items] | ||||||
Accrued penalty | $ 44,600,000 | |||||
Outstanding representation and warranty repurchase demands | $ 47,500,000 | $ 97,500,000 | ||||
Outstanding representation and warranty repurchase demands, number of loans | Loan | 239 | 506 | ||||
Subsequent Event [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Number of states charging with regulatory action | States | 30 | |||||
Number of states where acquiring new mortgage servicing rights are prohibited | States | 17 | |||||
Number of states where originating or acquiring new mortgage loans where we would be servicer are prohibited | States | 13 | |||||
Number of states where originating or acquiring new mortgage loans are prohibited | States | 4 | |||||
Number of states where conducting foreclosure activities are prohibited | States | 2 | |||||
Fisher Cases [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Accrued penalty | $ 30,000,000 | |||||
Litigation settlement expense | 15,000,000 | |||||
Amount of penalty in consent order | $ 15,000,000 | |||||
RMBS Trusts [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Ownership interest in trusts | 25.00% | |||||
Number of trusts where trustees received notice of servicer non-performance | Trust | 119 | |||||
Number of trusts to terminate as servicer in case if allegations proved | Trust | 119 | |||||
Number of trust where servicing transferred to another loan servicer | Trust | 2 | |||||
Consumer Financial Protection Bureau [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Accrued penalty | $ 12,500,000 | |||||
New York Department of Financial Services [Member] | Unfavorable Regulatory Action [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Period of oversight by an independent national monitor | 2 years | |||||
Independent operations monitor period extendable at discretion Regulator | 1 year | |||||
New York Department of Financial Services [Member] | Unfavorable Regulatory Action, Civil Penalty [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Litigation settlement expense | $ 100,000,000 | |||||
New York Department of Financial Services [Member] | Unfavorable Regulatory Action, Restitution Paid [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Litigation settlement expense | $ 50,000,000 | |||||
California Department of Business Oversight [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Accrued penalty | $ 25,000,000 | |||||
California Department of Business Oversight [Member] | Subsequent Event [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Litigation settlement expense | $ 25,000,000 | |||||
Amount of penalty in consent order | $ 20,000,000 | |||||
Period of debt forgiveness through loan modifications | 3 years | |||||
Number of borrowers who did not respond to remediation claims program | Borrower | 19,295 | |||||
Payments for costs, fees, and penalties | $ 5,000,000 | |||||
Amount of debt forgiveness through loan modifications | 198,000,000 | |||||
California Department of Business Oversight [Member] | Subsequent Event [Member] | OFSPL and OBS [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Payments for costs, fees, and penalties | $ 350,000 | |||||
Office of Mortgage Settlement Oversight [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Consumer relief credits | 2,100,000,000 | |||||
Office of Mortgage Settlement Oversight [Member] | Maximum [Member] | First Uncured Violation [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Financial penalties in case of uncured violations | 1,000,000 | |||||
Office of Mortgage Settlement Oversight [Member] | Maximum [Member] | Second Uncured Violation [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Financial penalties in case of uncured violations | 5,000,000 | |||||
Multistate Mortgage Committee [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Accrued penalty | $ 0 | |||||
Number of states who are part of confidential supervisory memorandum of understanding | States | 6 |
Contingencies - Schedule of Cha
Contingencies - Schedule of Changes in Liability for Representation and Warrant Obligations, Compensatory Fees for Foreclosures that may Ultimately Exceed Investor Timelines and Related Indemnification Obligations (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Indemnification Obligations Liability [Roll Forward] | ||||
Beginning balance | $ 36,615 | $ 132,918 | $ 192,716 | |
Provision for representation and warranty obligations | (4,060) | (8,418) | (1,947) | |
New production reserves | 864 | 814 | 1,605 | |
Payments made in connection with sales of MSRs | (1,320) | (81,498) | 0 | |
Charge-offs and other | [1] | (7,814) | (7,201) | (59,456) |
Ending balance | $ 24,285 | $ 36,615 | $ 132,918 | |
[1] | Includes principal and interest losses realized in connection with repurchased loans, make-whole, indemnification and fee payments and settlements net of recoveries, if any. |
Quarterly Results of Operati150
Quarterly Results of Operations (Unaudited) - Schedule of Quarterly Results of Operations (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||||||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||||
Revenue | $ 323,904 | $ 359,448 | $ 373,054 | $ 330,757 | $ 362,457 | $ 404,946 | $ 463,251 | $ 510,444 | $ 1,387,163 | [1] | $ 1,741,098 | [1] | $ 2,111,325 | [1] | ||||
Expenses | 237,901 | 271,678 | 385,018 | 328,657 | 359,848 | 387,726 | 352,252 | 378,358 | 1,223,254 | [1],[2] | 1,478,184 | [1],[2] | 2,035,208 | [1],[2] | ||||
Other income (expense), net | (96,205) | (85,406) | (84,434) | (104,225) | (131,881) | [3] | (73,138) | [3] | (98,499) | [3] | (89,257) | [3] | (370,270) | (392,775) | (519,276) | |||
Loss before income taxes | (10,202) | 2,364 | (96,398) | (102,125) | (129,272) | (55,918) | 12,500 | 42,829 | (206,361) | (129,861) | (443,159) | |||||||
Income tax expense (benefit) | 228 | (7,110) | (9,180) | 9,076 | 94,985 | 10,832 | 2,594 | 8,440 | (6,986) | 116,851 | 26,396 | |||||||
Net loss | (10,430) | 9,474 | (87,218) | (111,201) | (224,257) | (66,750) | 9,906 | 34,389 | (199,375) | (246,712) | (469,555) | |||||||
Net loss (income) attributable to non-controlling interests | (14) | (83) | (160) | (130) | 16 | (119) | (168) | (34) | (387) | (305) | (245) | |||||||
Net loss attributable to Ocwen common stockholders | $ (10,444) | $ 9,391 | $ (87,378) | $ (111,331) | $ (224,241) | $ (66,869) | $ 9,738 | $ 34,355 | $ (199,762) | [4] | $ (247,017) | [4] | $ (472,602) | [4] | ||||
Earnings (loss) per share attributable to Ocwen common stockholders | ||||||||||||||||||
Basic (in dollars per share) | $ (0.08) | $ 0.08 | $ (0.71) | $ (0.90) | $ (1.79) | $ (0.53) | $ 0.08 | $ 0.27 | $ (1.61) | $ (1.97) | $ (3.60) | |||||||
Diluted (in dollars per share) | $ (0.08) | $ 0.08 | $ (0.71) | $ (0.90) | $ (1.79) | $ (0.53) | $ 0.08 | $ 0.27 | $ (1.61) | $ (1.97) | $ (3.60) | |||||||
[1] | Inter-segment billings for services rendered to other segments are recorded as revenues, as contra-expense or as other income, depending on the type of service that is rendered. | |||||||||||||||||
[2] | Depreciation and amortization expense are as follows: Servicing Lending Corporate Items and Other Business Segments ConsolidatedFor the year ended December 31, 2016: Depreciation expense$6,804 $228 $18,306 $25,338Amortization of mortgage servicing rights32,669 309 — 32,978Amortization of debt discount727 — 3,450 4,177Amortization of debt issuance costs 13,455 — 12,207 25,662 For the year ended December 31, 2015: Depreciation expense$2,990 $380 $15,789 $19,159Amortization of mortgage servicing rights98,849 345 — 99,194Amortization of debt discount2,680 — — 2,680Amortization of debt issuance costs 21,269 — 1,395 22,664 For the year ended December 31, 2014: Depreciation expense$9,955 $332 $11,623 $21,910Amortization of mortgage servicing rights249,471 705 199 250,375Amortization of debt discount1,318 — — 1,318Amortization of debt issuance costs 4,294 — 845 5,139 | |||||||||||||||||
[3] | Other income (expense), net for 2015 includes gains (losses) on the sale of MSRs in the first, second, third and fourth quarter of $26.4 million, $30.3 million, $41.2 million and $(14.0) million, respectively. | |||||||||||||||||
[4] | For 2016, 2015 and 2014, we have excluded the effect of preferred stock, stock options and common stock awards from the computation of diluted earnings per share because of the anti-dilutive effect of our reported net loss. |
Quarterly Results of Operati151
Quarterly Results of Operations (Unaudited) - Schedule of Quarterly Results of Operations (Unaudited) (Footnote) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||
Gains (losses) on sale of mortgage servicing rights | $ (14,000) | $ 41,200 | $ 30,300 | $ 26,400 | $ 8,492 | $ 83,921 | $ 0 |