Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 23, 2018 | Jun. 30, 2017 | |
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 | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Amendment Description | |||
Entity Common Stock, Shares Outstanding | 133,359,058 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 331,954,234 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Assets | ||
Cash | $ 259,655 | $ 256,549 |
Mortgage servicing rights ($671,962 and $679,256 carried at fair value) | 1,008,844 | 1,042,978 |
Advances, net | 211,793 | 257,882 |
Match funded assets (related to variable interest entities (VIEs)) | 1,177,357 | 1,451,964 |
Loans held for sale ($214,262 and $284,632 carried at fair value) | 238,358 | 314,006 |
Loans held for investment, at fair value | 4,715,831 | 3,565,716 |
Receivables, net | 199,529 | 265,720 |
Premises and equipment, net | 37,006 | 62,744 |
Other assets ($8,900 and $20,007 carried at fair value)(amounts related to VIEs of $27,359 and $43,331) | 554,791 | 438,104 |
Total assets | 8,403,164 | 7,655,663 |
Liabilities | ||
HMBS-related borrowings, at fair value | 4,601,556 | 3,433,781 |
Other financing liabilities ($508,291 and $477,707 carried at fair value) | 593,518 | 579,031 |
Match funded liabilities (related to VIEs) | 998,618 | 1,280,997 |
Other secured borrowings, net | 545,850 | 678,543 |
Senior notes, net | 347,338 | 346,789 |
Other liabilities ($635 and $1,550 carried at fair value) | 769,410 | 681,239 |
Total liabilities | 7,856,290 | 7,000,380 |
Commitments and Contingencies (Notes 23 and 24) | ||
Equity | ||
Common stock, $.01 par value; 200,000,000 shares authorized; 131,484,058 and 123,988,160 shares issued and outstanding at December 31, 2017 and 2016, respectively | 1,315 | 1,240 |
Additional paid-in capital | 547,057 | 527,001 |
Retained earnings (accumulated deficit) | (2,083) | 126,167 |
Accumulated other comprehensive loss, net of income taxes | (1,249) | (1,450) |
Total Ocwen stockholders’ equity | 545,040 | 652,958 |
Non-controlling interest in subsidiaries | 1,834 | 2,325 |
Total equity | 546,874 | 655,283 |
Total liabilities and equity | $ 8,403,164 | $ 7,655,663 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Financial Position [Abstract] | |||
Mortgage servicing rights, at fair value | $ 671,962 | $ 679,256 | |
Loans held for sale, at fair value | [1] | 214,262 | 284,632 |
Other assets, at fair value | 8,900 | 20,007 | |
Amounts related to VIEs | 27,359 | 43,331 | |
Other financing liabilities, at fair value | 508,291 | 477,707 | |
Other liabilities, at fair value | $ 635 | $ 1,550 | |
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) | 131,484,058 | 123,988,160 | |
Common stock, shares outstanding (in shares) | 131,484,058 | 123,988,160 | |
[1] | At December 31, 2017, 2016 and 2015, the balances include $5.0 million, $4.9 million and $11.9 million, respectively, of fair value adjustments. |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Revenue | ||||
Servicing and subservicing fees | $ 989,376 | $ 1,186,620 | $ 1,531,797 | |
Gain on loans held for sale, net | 103,402 | 90,391 | 134,969 | |
Other | 101,798 | 110,152 | 74,332 | |
Total revenue | [1] | 1,194,576 | 1,387,163 | 1,741,098 |
Expenses | ||||
Compensation and benefits | 358,994 | 381,340 | 415,055 | |
Professional services | 229,451 | 305,586 | 276,393 | |
Servicing and origination | 142,670 | 279,801 | 344,560 | |
Technology and communications | 100,490 | 110,333 | 154,758 | |
Occupancy and equipment | 66,019 | 80,191 | 112,864 | |
Amortization of mortgage servicing rights | 51,788 | 32,978 | 99,194 | |
Other | 49,233 | 33,025 | 75,360 | |
Total expenses | [1] | 998,645 | 1,223,254 | 1,478,184 |
Other income (expense) | ||||
Interest income | 15,965 | 19,083 | 18,320 | |
Interest expense | (363,238) | (412,583) | (482,373) | |
Gain on sale of mortgage servicing rights, net | 10,537 | 8,492 | 83,921 | |
Other, net | (3,168) | 14,738 | (12,643) | |
Total other expense, net | (339,904) | (370,270) | (392,775) | |
Loss before income taxes | (143,973) | (206,361) | (129,861) | |
Income tax (benefit) expense | (15,516) | (6,986) | 116,851 | |
Net loss | (128,457) | (199,375) | (246,712) | |
Net (income) loss attributable to non-controlling interests | 491 | (387) | (305) | |
Net loss attributable to Ocwen stockholders | $ (127,966) | $ (199,762) | $ (247,017) | |
Loss per share attributable to Ocwen stockholders | ||||
Basic (in dollars per share) | $ (1.01) | $ (1.61) | $ (1.97) | |
Diluted (in dollars per share) | $ (1.01) | $ (1.61) | $ (1.97) | |
Weighted average common shares outstanding | ||||
Basic (in shares) | 127,082,058 | 123,990,700 | 125,315,899 | |
Diluted (in shares) | 127,082,058 | 123,990,700 | 125,315,899 | |
[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. |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (128,457) | $ (199,375) | $ (246,712) | |
Other comprehensive income, net of income taxes | ||||
Reclassification adjustment for losses on cash flow hedges included in net income | [1],[2] | 201 | 313 | 6,650 |
Comprehensive loss | (128,256) | (199,062) | (240,062) | |
Comprehensive (income) loss attributable to non-controlling interests | 491 | (387) | (305) | |
Comprehensive loss attributable to Ocwen stockholders | $ (127,765) | $ (199,449) | $ (240,367) | |
[1] | Net of income tax expense of $0.02 million and $0.4 million for 2016 and 2015, respectively. | |||
[2] | These losses are reclassified to Other, net in the Consolidated Statements of Operations. |
CONSOLIDATED STATEMENTS OF COM6
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Footnote) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | ||
Income tax expense on reclassification adjustment for losses on cash flow hedges | $ 0 | $ (0.4) |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings (Accumulated Deficit) [Member] | Accumulated Other Comprehensive Income (Loss), Net of Taxes [Member] | Non-controlling Interest in Subsidiaries [Member] |
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 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | (246,712) | (247,017) | 305 | |||
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 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | (199,375) | (199,762) | 387 | |||
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 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | $ (128,457) | (127,966) | (491) | |||
Cumulative effect of adoption of FASB Accounting Standards Update No. 2016-09 | 284 | (284) | ||||
Issuance of common stock | 15,325 | $ 67 | 15,258 | |||
Issuance of common stock, shares | 6,700,510 | |||||
Equity-based compensation and other | 4,522 | $ 8 | 4,514 | |||
Equity-based compensation and other (in shares) | 795,388 | |||||
Other comprehensive income, net of income taxes | 201 | 201 | ||||
Balance at at Dec. 31, 2017 | $ 546,874 | $ 1,315 | $ 547,057 | $ (2,083) | $ (1,249) | $ 1,834 |
Balance at (in shares) at Dec. 31, 2017 | 131,484,058 | 131,484,058 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities | |||
Net loss | $ (128,457) | $ (199,375) | $ (246,712) |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||
Amortization of mortgage servicing rights | 51,788 | 32,978 | 99,194 |
Loss on valuation of mortgage servicing rights, at fair value | 4,540 | 80,238 | 98,173 |
Impairment charge (reversal) on mortgage servicing rights | (3,366) | 10,813 | 17,341 |
Gain on sale of mortgage servicing rights, net | (10,537) | (8,492) | (83,921) |
Realized and unrealized losses on derivative financial instruments | 191 | 1,724 | 8,419 |
Provision for bad debts | 76,828 | 81,079 | 101,226 |
Depreciation | 26,886 | 25,338 | 19,159 |
Loss on write-off of fixed assets, net | 8,502 | 0 | 0 |
Amortization of debt issuance costs | 2,738 | 25,662 | 22,664 |
Provision for (reversal of) valuation allowance on deferred tax assets | (29,979) | 15,639 | 97,069 |
Decrease (increase) in deferred tax assets other than provision for valuation allowance | 30,710 | (11,119) | (28,136) |
Equity-based compensation expense | 5,624 | 5,181 | 7,291 |
Loss on valuation of financing liability | 41,282 | 0 | 0 |
Loss (gain) on trading securities | 6,756 | (335) | (650) |
Net gain on valuation of mortgage loans held for investment and HMBS-related borrowings | (23,733) | (26,016) | (7,661) |
Gain on loans held for sale, net | (53,209) | (65,649) | (103,112) |
Origination and purchase of loans held for sale | (3,695,163) | (6,090,432) | (5,000,681) |
Proceeds from sale and collections of loans held for sale | 3,662,065 | 5,969,812 | 5,125,203 |
Changes in assets and liabilities: | |||
Decrease in advances and match funded advances | 330,052 | 452,435 | 531,313 |
Decrease in receivables and other assets, net | 202,153 | 181,835 | 46,463 |
Decrease in other liabilities | (100,650) | (7,143) | (109,407) |
Other, net | 6,944 | 492 | (11,552) |
Net cash provided by operating activities | 411,965 | 474,665 | 581,683 |
Cash flows from investing activities | |||
Origination of loans held for investment | (1,277,615) | (1,098,758) | (1,008,065) |
Principal payments received on loans held for investment | 444,388 | 243,596 | 151,107 |
Purchase of mortgage servicing rights | (1,658) | (17,356) | (12,355) |
Proceeds from sale of mortgage servicing rights | 4,234 | 47,044 | 686,838 |
Proceeds from sale of advances and match funded advances | 9,446 | 103,017 | 486,311 |
Issuance of automotive dealer financing notes | (174,363) | (100,722) | 0 |
Collections of automotive dealer financing notes | 162,965 | 65,688 | 0 |
Additions to premises and equipment | (9,053) | (33,518) | (37,487) |
Other, net | 2,440 | (610) | 14,021 |
Net cash provided by (used in) investing activities | (839,216) | (791,619) | 280,370 |
Cash flows from financing activities | |||
Repayment of match funded liabilities, net | (282,379) | (303,052) | (506,198) |
Proceeds from mortgage loan warehouse facilities and other secured borrowings | 7,215,264 | 9,242,671 | 7,170,831 |
Repayments of mortgage loan warehouse facilities and other secured borrowings | (7,431,763) | (9,463,063) | (8,249,742) |
Payment of debt issuance costs | (841) | (11,136) | (23,480) |
Proceeds from sale of mortgage servicing rights accounted for as a financing | 54,601 | 0 | 0 |
Proceeds from sale of reverse mortgages (HECM loans) accounted for as a financing (HMBS-related borrowings) | 1,281,543 | 1,086,795 | 1,024,361 |
Repayment of HMBS-related borrowings | (418,503) | (230,045) | (153,016) |
Issuance of common stock | 13,913 | 0 | 0 |
Repurchase of common stock | 0 | (5,890) | (4,142) |
Other | (1,478) | (49) | 7,132 |
Net cash provided by (used in) financing activities | 430,357 | 316,231 | (734,254) |
Net increase (decrease) in cash | 3,106 | (723) | 127,799 |
Cash at beginning of year | 256,549 | 257,272 | 129,473 |
Cash at end of year | 259,655 | 256,549 | 257,272 |
Supplemental cash flow information | |||
Interest paid | 364,702 | 389,638 | 470,724 |
Income tax payments (refunds), net | (23,501) | 19,715 | 5,706 |
Supplemental non-cash investing and financing activities | |||
Exchange of senior unsecured notes for senior secured notes | 0 | 346,878 | 0 |
Transfers from loans held for investment to loans held for sale | 3,803 | 0 | 0 |
Transfers of loans held for sale to real estate owned | $ 875 | 7,675 | 18,594 |
Issuance of common stock in connection with litigation settlement | $ 0 | $ 0 |
Organization, Business Environm
Organization, Business Environment, Basis of Presentation and Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
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 servicing activities on behalf of other servicers (subservicing), the largest being New Residential Investment Corp. (NRZ), and investors (primary and master servicing), 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 a subservicer or primary servicer, we may be required to make certain property tax and insurance premium payments, default and property maintenance payments, as well as advances of principal and interest payments to mortgage loan investors before collecting them from borrowers. Most, but not all, of our subservicing agreements provide for us to be reimbursed for any such advances by the owner of the servicing rights. Advances made by us as primary servicer are recovered from the borrower or the mortgage loan investor. As master servicer, we collect mortgage payments from primary servicers and distribute the funds to investors in the mortgage-backed securities. To the extent the primary servicer does not advance the scheduled principal and interest, as master servicer we are responsible for advancing the shortfall subject to certain limitations. We originate, 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 are an approved issuer of 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 had a total of approximately 7,600 employees at December 31, 2017 of which approximately 5,000 were located in India and approximately 600 were based in the Philippines. Our operations in India and the Philippines primarily provide internal support services, principally to our loan servicing business and our corporate functions. Of our foreign-based employees, more than 80% were engaged in supporting our loan servicing operations as of December 31, 2017 . Business Environment We are facing certain challenges and uncertainties that could have significant adverse effects on our business, financial condition, liquidity and results of operations. The ability of management to appropriately address these challenges and uncertainties in a timely manner is critical to our ability to successfully operate our business. We have incurred a net loss in each of the last four fiscal years, which has significantly eroded stockholders’ equity and weakened our financial condition. In order to drive stronger financial performance, we have been exploring strategic approaches to streamline our business and leverage our competitive advantages by focusing our operations on mortgage servicing, on our retail forward lending channel, primarily through retail lending recapture, and on our reverse mortgage business. As part of this strategic assessment, we exited the forward lending correspondent and wholesale channels during 2017 and we plan to exit the independent used car dealer floor plan lending business conducted through our Automotive Capital Services, Inc. subsidiary by the end of the second quarter of 2018. While these changes may limit our generation of new assets in the near term, we believe that they will, over time, improve our returns and improve cash flow relative to current operations. In addition, we have significantly strengthened our cash position through the receipt of a lump-sum fee payment of $279.6 million from NRZ in January 2018 in connection with our new rights to mortgage servicing rights arrangements. See Note 8 — Rights to MSRs for further information. Our business, operating results and financial condition have been significantly impacted in recent periods by regulatory actions against us and by significant litigation matters. Should the number or scope of regulatory or legal actions against us increase or expand or should we be unable to reach reasonable resolutions in existing regulatory and legal matters, our business, reputation, financial condition, liquidity and results of operations could be materially and adversely affected, even if we are successful in our ongoing efforts to drive stronger financial performance. See Note 22 — Regulatory Requirements and Note 24 — Contingencies for further information. Regarding the current maturities of our borrowings, as of December 31, 2017, we have approximately $1.0 billion of debt outstanding under facilities coming due in the next 12 months. Portions of our match funded facilities 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. Our debt agreements contain various qualitative and quantitative events of default provisions that include, among other things, noncompliance with covenants, breach of representations, or the occurrence of a material adverse change. If a lender were to allege an event of default and we are unable to avoid, remedy or secure a waiver, we could be subject to adverse actions by our lenders that could have a material adverse impact on us. In addition, OLS, Homeward and Liberty are parties to seller/servicer agreements and/or subject to guidelines and regulations (collectively, seller/servicer obligations) with one or more of the GSEs, the Department of Housing and Urban Development (HUD), FHA, VA and Ginnie Mae. To the extent these requirements are not met or waived, the applicable agency may, at its option, utilize a variety of remedies including requirements to provide certain information or take actions at the direction of the applicable agency, 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. Any of these actions could have a material adverse impact on us. See Note 12 — Borrowings , Note 22 — Regulatory Requirements and Note 24 — Contingencies for further 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 consolidated 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 adoption on January 1, 2017 of FASB Accounting Standards Update (ASU) 2016-09, Compensation - Stock Compensation: Improvements to Accounting for Employee Share-Based Payments , excess tax benefits have been classified along with other income tax cash flows as an operating activity in our consolidated statements of cash flows, rather than being separated from other income tax cash flows and classified as a financing activity. Additionally, cash paid by Ocwen when directly withholding shares for tax-withholding purposes has been classified as a financing activity in our consolidated statements of cash flows, rather than being classified as an operating activity. Certain amounts in the Consolidated Statements of Cash Flows for 2016 and 2015 have been reclassified to conform to the current year presentation as follows: • Within the operating activities section, we reclassified Amortization of debt discount to Other, net and Gain on trading securities from Other, net to a new line. • Within the financing activities section of the consolidated statements of cash flows, we reclassified Repayments of HMBS-related borrowings from Repayments of mortgage loan warehouse facilities and other secured borrowings to a new separate line item. These reclassifications had no impact on our consolidated cash flows from operating, investing or financing activities. Certain amounts in the consolidated balance sheet at December 31, 2016 have been reclassified to conform to the current year presentation as follows: • Within the total assets section, we reclassified Deferred tax assets, net to Other assets. • Within the total liabilities section, we reclassified HMBS-related borrowings from Financing liabilities to a new separate line item. 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 retain MSRs on originated loans when they are sold in the secondary market. The UPB of the loans underlying the MSRs is not included on our balance sheet. For servicing retained in connection with the securitization of reverse mortgage loans accounted for as secured financings, we do not recognize an MSR. All newly acquired or retained MSRs are initially measured at fair value. We recognize a servicing liability for portfolio contracts that are not expected to compensate us adequately for performing the servicing. For this purpose, we define contracts as Agency, 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. We identify classes of servicing assets and servicing liabilities based on the availability of market inputs used in determining their fair value and our methods for managing their risks. 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. Any fair value election is irrevocable. Once a 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. At the start of any fiscal year, a company may elect to transfer servicing assets and servicing liabilities from a class measured using the amortization method to a class measured at fair value. Furthermore, if a new class is created, and no servicing assets or servicing liabilities that would belong to that class have previously been recognized, electing to subsequently measure that new class at fair value is permitted at the date those servicing assets or servicing liabilities are initially recognized. 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). 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 stratify servicing assets or liabilities based upon one or more of the predominant risk characteristics of the underlying portfolios and assess servicing assets or liabilities for impairment or increased obligation by determining the difference, if any, between the carrying amount and estimated fair value at each reporting date. We recognize any impairment, or increased obligation, through a valuation allowance which is adjusted to reflect subsequent changes in the measurement of impairment and reported in earnings in the period in which the changes occur. We do not recognize fair value in excess of the carrying amount of servicing assets for any stratum. For servicing assets or liabilities that we account for using the fair value measurement method (fair value election), 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 and subservicing mortgage loans. We collect servicing and subservicing 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 and subservicing revenue. We recognize servicing and subservicing 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, servicing and subservicing agreements may 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 and subservicing contract. Each servicing and subservicing contract is associated with specific loans, identified as a pool. When we make an advance on a loan under each servicing or subservicing contract, we are entitled to recover that advance either from the borrower, for reinstated and performing loans, or from guarantors (GSEs), insurers (FHA/VA) and investors, for modified and liquidated loans. Most of our servicing and subservicing 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 or subservicing 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 forward and reverse mortgage loans that we 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. We account for any 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. 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. We report any gain or loss on the transfer of 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. 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 Newly originated reverse residential mortgage loans that are insured by the FHA and pooled into Ginnie Mae guaranteed securities that we sell into the secondary market with servicing rights retained are classified as loans held for investment. We have elected to measure these loans at fair value. 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, 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. 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. 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. 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 certain servicing fees relating to 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 transaction is accounted for consistent with a secured financing. In certain situations, we may have continuing involvement in transferred loans through our retained servicing. Transactions involving retained servicing 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 connection with the Ginnie Mae early buyout 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. 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. 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 U.S. 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. In December 2017, the Securities and Exchange Commission Staff issued Staff Accounting Bulletin (SAB) 118, which provides guidance on accounting for the income tax effects of the Tax Cuts and Jobs Act (Tax Act) signed into law by the President of the United States on December 22, 2017. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under Accounting Standards Codification (ASC) 740, Income Taxes . In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Tax Act for which the accounting under ASC 740 is complete. To the extent that a company's accounting for certain income tax effects of the Tax Act is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements and should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the Tax Act. We adopted the guidance of SAB 118 as of December 31, 2017. See Note 18 — Income Taxes for additional information on the Tax Act and the impact on our consolidated financial statements. 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. Going Concern In accordance with FASB 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. Our financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The assessment of our ability to meet our future obligations is inherently judgmental, subjective and susceptible to change. Our assessment considers information including, but not limited to, our financial condition, liquidity sources, obligations coming due within one year after the financial statements are issued, funds necessary to maintain current operations and any negative financial trends or other indicators of possible financial difficulty, including adverse regulatory or legal proceedings or rating agency decisions and management’s plans to address these matters. We considered both qualitative and quantitative factors as part of our assessment that were known or reasonably knowable at December 31, 2017, and concluded that when considering management’s plans to mitigate, conditions and events considered in the aggregate do not indicate that it is probable that Ocwen will be unable to meet its obligations during the evaluation period. Recently Adopted Accounting Standards Revenue from Contracts with Customers (ASU 2014-09) This ASU clarifies the principles for recognizing revenue and creates a common revenue standard. Under this ASU, an entity will recognize revenue to depict the transfer |
Securitizations and Variable In
Securitizations and Variable Interests Entities | 12 Months Ended |
Dec. 31, 2017 | |
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 three groups: (1) securitizations of residential mortgage loans, (2) financings of advances and (3) financings of automotive dealer financing notes. We have determined that the special purpose entities (SPEs) created in connection with our match funded advance financing facilities are variable interest entities (VIEs) for which we are the primary beneficiary. Securitizations of Residential Mortgage Loans We securitize forward and reverse residential mortgage loans involving the GSEs and loans insured by the FHA or VA through Ginnie Mae. To the extent we retain the right to service these loans, we 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 purchased from third parties, generally in the form of mortgage-backed securities guaranteed by the GSEs or Ginnie Mae. Securitization typically occurs within 30 days of loan closing or purchase. 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. The following table presents a summary of cash flows received from and paid to securitization trusts related to transfers of loans accounted for as sales that were outstanding: Years Ended December 31, 2017 2016 2015 Proceeds received from securitizations $ 3,256,625 $ 5,197,071 $ 4,970,454 Servicing fees collected 41,509 14,616 29,239 Purchases of previously transferred assets, net of claims reimbursed (5,948 ) (1,271 ) (2,863 ) $ 3,292,186 $ 5,210,416 $ 4,996,830 In connection with these transfers, we retained MSRs of $20.7 million , $37.2 million and $36.0 million during 2017 , 2016 and 2015 , respectively. Certain obligations arise from the agreements associated with our transfers of loans. Under these agreements, we may be obligated to repurchase the loans, or otherwise indemnify or reimburse the investor or insurer for losses incurred due to material breach of contractual representations and warranties. The following table presents the carrying amounts of our assets that relate to our continuing involvement with forward loans that we have transferred with servicing rights retained as well as our maximum exposure to loss including the UPB of the transferred loans. December 31, 2017 2016 Carrying value of assets MSRs, at amortized cost $ 97,832 $ 94,492 MSRs, at fair value 227 233 Advances and match funded advances 57,636 37,336 UPB of loans transferred 12,077,635 10,485,697 Maximum exposure to loss $ 12,233,330 $ 10,617,758 At December 31, 2017 and 2016 , 8.9% and 7.6% , respectively, of the transferred residential loans that we service were 60 days or more past due. During 2017 and 2016 , there were $0.6 million and $0.3 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 pool HECM loans into HMBS that we sell into the secondary market with servicing rights retained or we sell the loans to third parties with servicing rights released. 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, cash flow timing 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, at fair value, on our consolidated balance sheets. 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. At December 31, 2017 and 2016 , HMBS-related borrowings of $4.6 billion and $3.4 billion , respectively, were outstanding. Loans held for investment, at fair value were $4.7 billion and $3.6 billion at December 31, 2017 and 2016 , respectively. At December 31, 2017 and 2016 , Loans held for investment included $83.8 million and $81.3 million , respectively, of originated loans which had not yet been pledged as collateral. See Note 3 — Fair Value and Note 12 — Borrowings for additional information on HMBS-related borrowings and Loans held for investment. Financings of Advances Match funded advances 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 transfers to these SPEs in accordance with the terms of our advance financing facility agreements. Debt service accounts require us to remit collections on pledged advances to the trustee within two days of receipt. Collected funds that are not applied to reduce the related match funded debt until the payment dates specified in the indenture are classified as debt service accounts within Other assets in our consolidated balance sheets. 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. We classify the transferred advances on our consolidated balance sheets as a component of Match funded assets 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. Financings of Automotive Dealer Financing Notes Match funded automotive dealer financing notes result from our transfers of short-term, inventory-secured loans to car dealers to an SPE in exchange for cash. We consolidate this SPE because we have determined that Ocwen is the primary beneficiary of the SPE. The SPE issues debt supported by collections on the transferred loans. We make transfers to the SPE in accordance with the terms of our automotive capital asset receivables financing facility agreements. We classify the transferred loans on our consolidated balance sheets as a component of Match funded assets and the related liabilities as Match funded liabilities. The SPE uses collections of the pledged loans to repay principal and interest and to pay the expenses of the SPE. Holders of the debt issued by the SPE have recourse only to the assets of the SPE for satisfaction of the debt. The assets and liabilities of the automotive capital asset receivables financing SPE are comprised solely of Match funded automotive dealer financing notes, Debt service accounts, Match funded liabilities and amounts due to affiliates. Amounts due to affiliates are eliminated in consolidation in our consolidated balance sheets. |
Fair Value
Fair Value | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Note 3 — Fair Value Fair value is estimated based on a hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs. Observable inputs are inputs that reflect the assumptions that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The fair value hierarchy prioritizes the inputs to valuation techniques into three broad levels whereby the highest priority is given to Level 1 inputs and the lowest to Level 3 inputs. Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date. Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3: Unobservable inputs for the asset or liability. We classify assets in their entirety based on the lowest level of input that is significant to the fair value measurement. The carrying amounts and the estimated fair values of our financial instruments and certain of our nonfinancial assets measured at fair value on a recurring or non-recurring basis or disclosed, but not carried, at fair value are as follows: December 31, 2017 2016 Level Carrying Value Fair Value Carrying Value Fair Value Financial assets: Loans held for sale: Loans held for sale, at fair value (a) 2 $ 214,262 $ 214,262 $ 284,632 $ 284,632 Loans held for sale, at lower of cost or fair value (b) 3 24,096 24,096 29,374 29,374 Total Loans held for sale $ 238,358 $ 238,358 $ 314,006 $ 314,006 Loans held for investment (a) 3 $ 4,715,831 $ 4,715,831 $ 3,565,716 $ 3,565,716 Advances (including match funded) (c) 3 1,356,393 1,356,393 1,709,846 1,709,846 Automotive dealer financing notes (including match funded) (c) 3 32,757 32,590 33,224 33,147 Receivables, net (c) 3 199,529 199,529 265,720 265,720 Mortgage-backed securities, at fair value (a) 3 1,592 1,592 8,342 8,342 U.S. Treasury notes (a) 1 1,567 1,567 2,078 2,078 Financial liabilities: Match funded liabilities (c) 3 $ 998,618 $ 992,698 $ 1,280,997 $ 1,275,059 Financing liabilities: HMBS-related borrowings, at fair value (a) 3 $ 4,601,556 $ 4,601,556 $ 3,433,781 $ 3,433,781 Financing liability - MSRs pledged, at fair value (a) 3 508,291 508,291 477,707 477,707 Other (c) 3 85,227 65,202 101,321 81,805 Total Financing liabilities $ 5,195,074 $ 5,175,049 $ 4,012,809 $ 3,993,293 Other secured borrowings: Senior secured term loan (c) (d) 2 $ 290,068 $ 299,741 $ 323,514 $ 327,674 Other (c) 3 255,782 255,782 355,029 355,029 Total Other secured borrowings $ 545,850 $ 555,523 $ 678,543 $ 682,703 Senior notes: Senior unsecured notes (c) (d) 2 $ 3,122 $ 2,872 $ 3,094 $ 3,048 Senior secured notes (c) (d) 2 344,216 355,550 343,695 352,255 Total Senior notes $ 347,338 $ 358,422 $ 346,789 $ 355,303 Derivative financial instrument assets (liabilities), at fair value (a): Interest rate lock commitments 2 $ 3,283 $ 3,283 $ 6,507 $ 6,507 Forward mortgage-backed securities 1 (545 ) (545 ) (614 ) (614 ) Interest rate caps 3 2,056 2,056 1,836 1,836 Mortgage servicing rights: Mortgage servicing rights, at fair value (a) 3 $ 671,962 $ 671,962 $ 679,256 $ 679,256 Mortgage servicing rights, at amortized cost (c) (e) 3 336,882 418,745 363,722 467,911 Total Mortgage servicing rights $ 1,008,844 $ 1,090,707 $ 1,042,978 $ 1,147,167 (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 12 — Borrowings for additional information . (e) Balances include the 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 $24.8 million , the carrying value of the impaired stratum at December 31, 2017 was $158.0 million . At December 31, 2016 , the carrying value of this stratum was $172.9 million before applying the valuation allowance of $28.2 million . The following tables present a reconciliation of the changes in fair value of Level 3 assets and liabilities that we measure at fair value on a recurring basis: Loans Held for Investment - Reverse Mortgages HMBS-Related Borrowings Mortgage-Backed Securities Financing Liability - MSRs Pledged Derivatives MSRs Total Year Ended December 31, 2017 Beginning balance $ 3,565,716 $ (3,433,781 ) $ 8,342 $ (477,707 ) $ 1,836 $ 679,256 $ 343,662 Purchases, issuances, sales and settlements Purchases — — — — 655 — 655 Issuances (1) 1,277,615 (1,281,543 ) — (54,601 ) — (2,214 ) (60,743 ) Sales — — — — — (540 ) (540 ) Transfers to Loans held for sale - Fair value (3,803 ) — — — — — (3,803 ) Transfers to Receivables (3,583 ) — — — — — (3,583 ) Transfers to Other assets (1,929 ) — — — — — (1,929 ) Settlements (444,388 ) 418,503 — 59,190 (445 ) — 32,860 823,912 (863,040 ) — 4,589 210 (2,754 ) (37,083 ) Total realized and unrealized gains (losses) (2) Included in earnings (1): Change in fair value 326,203 (304,735 ) (6,750 ) (41,282 ) 10 (4,540 ) (31,094 ) Calls and other — — — 6,109 — — 6,109 Included in Other comprehensive income — — — — — — — 326,203 (304,735 ) (6,750 ) (35,173 ) 10 (4,540 ) (24,985 ) Transfers in and / or out of Level 3 — — — — — — — Ending balance $ 4,715,831 $ (4,601,556 ) $ 1,592 $ (508,291 ) $ 2,056 $ 671,962 $ 281,594 Loans Held for Investment - Reverse Mortgages HMBS-Related Borrowings Mortgage-Backed Securities Financing Liability - MSRs Pledged 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 (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 (losses) (2) 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 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 (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 (losses) 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 (1) On September 1, 2017, Ocwen transferred MSRs with UPB of $15.9 billion to NRZ and received a lump-sum payment of $54.6 million . The fair value of the portion of the Financing Liability - MSRs Pledged recognized in connection with the transfer declined $42.0 million in 2017 primarily due to $37.6 million recognized at the time of the initial transfer of the MSRs, which had a contractual servicing fee rate of 33.4 bps as compared to the weighted average of 47.1 bps for the loan characteristics used to determine the lump sum payment. See Note 8 — Rights to MSRs . (2) Total gains (losses) attributable to derivative financial instruments still held at December 31, 2017 and 2016 were $0.1 million, $0.3 million and $(1.0) million for 2017 , 2016 and 2015 , respectively. Total losses for 2017 , 2016 and 2015 attributable to MSRs still held at December 31, 2017 , 2016 and 2015 were $4.5 million , $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 Residential forward and reverse mortgage loans that we intend to sell 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 loans for which we have no agreement to sell 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 based 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. December 31, Significant valuation assumptions 2017 2016 Life in years Range 4.4 to 8.1 5.5 to 8.7 Weighted average 6.4 6.1 Conditional repayment rate Range 5.4% to 51.9% 5.2% to 53.8% Weighted average 13.1 % 20.9 % Discount rate 3.2 % 3.3 % 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 understand 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 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 • Delinquency rates • Cost of servicing • Interest rate used for computing float earnings • Discount rate • Compensating interest expense • Interest rate used for computing the cost of financing servicing advances • Collection rate of other ancillary fees 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. December 31, Significant valuation assumptions 2017 2016 Weighted average prepayment speed 8.8 % 8.9 % Weighted average delinquency rate 10.9 % 11.1 % 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 9.2 % 8.9 % Weighted average cost to service (in dollars) $ 108 $ 108 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 disclosed 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. December 31, Significant valuation assumptions 2017 2016 Agency Non-Agency Agency Non-Agency Weighted average prepayment speed 8.1 % 16.6 % 8.4 % 16.5 % Weighted average delinquency rate 1.0 % 28.5 % 1.0 % 29.3 % Advance financing cost 5-year swap 5-yr swap plus 2.75% 5-year swap 1-Month LIBOR (1ML) plus 3.5% Interest rate for computing float earnings 5-year swap 5-yr swap minus 0.50% 5-year swap 1ML Weighted average discount rate 9.0 % 13.0 % 9.0 % 14.9 % Weighted average cost to service (in dollars) $ 64 $ 305 $ 64 $ 307 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. Automotive Dealer Financing Notes We estimate the fair value of our automotive dealer financing notes using unobservable inputs within an internally developed cash flow model. Key inputs included projected repayments, interest and fee receipts, deferrals, delinquencies, recoveries and charge-offs of the notes within the portfolio. The projected cash flows are then discounted at a rate commensurate with the risk of the estimated cash flows to derive the fair value of the portfolio. December 31, Significant valuation assumptions 2017 2016 Weighted average life in months 2.2 2.7 Average note rate 8.5 % 8.3 % Discount rate 10.0 % 10.0 % Loan loss rate 21.5 % 11.3 % Mortgage-Backed Securities (MBS) Our subordinate and residual securities are not actively traded, and therefore, we estimate the fair value of these securities using a process based upon the use of an independent third-party valuation expert. Where possible, we consider observable trading activity in the valuation of our securities. 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. We classify subordinate and residual securities as trading securities and account for them at fair value on a recurring basis. Changes in the fair value of our investment in subordinate and residual securities are recognized in Other, net in the consolidated statements of operations. U.S. Treasury Notes We classify U.S. Treasury notes as trading securities and account for them at fair value on a recurring basis. We base the fair value on quoted prices in active markets to which we have access. Changes in the fair value of our investment in U.S. Treasury notes are recognized in Other, net in the consolidated statements of operations. 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 advance 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. 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. 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. December 31, Significant valuation assumptions 2017 2016 Life in years Range 4.4 to 8.1 4.5 to 8.7 Weighted average 6.4 5.1 Conditional repayment rate Range 5.4% to 51.9% 5.2% to 53.8% Weighted average 13.1 % 20.9 % Discount rate 3.1 % 2.7 % Significant increases or decreases in any of these assumptions in isolation would result in a significantly higher or lower fair value. MSRs Pledged (Rights to MSRs) We have elected to measure these borrowings at fair value. We recognize the proceeds received in connection with Rights to MSRs transactions as a secured borrowing that we account for at fair value. Fair value for the portion of the borrowing attributable to the MSRs underlying the Rights to MSRs is determined using the mid-point of the range of prices provided by third-party valuation experts. Fair value for the portion of the borrowing attributable to any lump sum payments received in connection with the transfer of MSRs underlying such Rights to MSRs to the extent such transfer is accounted for as a financing is determined by discounting the relevant future cash flows that were altered through such transfer using assumptions consistent with the mid-point of the range of prices provided by third-party valuation experts for the related MSR. 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 partially offset by changes in the fair value of the related MSRs. See Note 8 — Rights to MSRs for additional information. December 31, Significant valuation assumptions 2017 2016 Weighted average prepayment speed 17.0 % 17.0 % Weighted average delinquency rate 28.9 % 29.8 % Advance financing cost 5-year swap plus 2.75% 1ML plus 3.5% Interest rate for computing float earnings 5-year swap minus 0.50% 1ML Weighted average discount rate 13.7 % 14.9 % Weighted average cost to service (in dollars) $ 311 $ 313 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 Senior Secured Term Loan (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, 2017 | |
Receivables [Abstract] | |
Loans Held for Sale | Note 4 — Loans Held for Sale Years Ended December 31, Loans Held for Sale - Fair Value 2017 2016 2015 Beginning balance $ 284,632 $ 309,054 $ 401,120 Originations and purchases 2,678,372 4,211,871 3,944,509 Proceeds from sales (2,785,422 ) (4,236,158 ) (4,061,217 ) Principal collections (4,867 ) (11,620 ) (8,647 ) Transfers from Loans held for investment 3,803 — — Transfers from Loans held for sale - Lower of cost or fair value — 3,266 1,200 Gain on sale of loans 35,429 13,421 42,053 Increase (decrease) in fair value of loans 151 (7,030 ) (9,066 ) Other 2,164 1,828 (898 ) Ending balance (1) $ 214,262 $ 284,632 $ 309,054 (1) At December 31, 2017 , 2016 and 2015 , the balances include $5.0 million , $4.9 million and $11.9 million , respectively, of fair value adjustments. At December 31, 2017 , loans held for sale, at fair value with a UPB of $195.2 million were pledged as collateral to warehouse lines of credit in our Lending segment. Years Ended December 31, Loans Held for Sale - Lower of Cost or Fair Value 2017 2016 2015 Beginning balance $ 29,374 $ 104,992 $ 87,492 Purchases 1,016,791 1,878,561 1,056,172 Proceeds from sales (861,569 ) (1,699,427 ) (1,001,939 ) Principal collections (10,207 ) (22,607 ) (53,400 ) Transfers to Receivables, net (171,797 ) (256,336 ) (53,468 ) Transfers to Other assets (875 ) (7,675 ) (18,594 ) Transfers to Loans held for sale - Fair value — (3,266 ) (1,200 ) Gain on sale of loans 11,683 24,565 43,449 Decrease in valuation allowance 2,746 4,594 35,018 Other 7,950 5,973 11,462 Ending balance (1) $ 24,096 $ 29,374 $ 104,992 (1) At December 31, 2017 , 2016 and 2015 , the balances include $19.6 million , $24.8 million and $85.9 million , respectively, of loans that we were required to repurchase from Ginnie Mae guaranteed securitizations as part of our servicing obligations. Repurchased loans are modified or otherwise remediated through loss mitigation activities or are reclassified to receivables. The changes in the valuation allowance are as follows: Years Ended December 31, 2017 2016 2015 Beginning balance $ 10,064 $ 14,658 $ 49,676 Provision 3,109 3,599 (400 ) Transfer from Liability for indemnification obligations (Other liabilities) 3,246 2,368 1,180 Sales of loans (9,415 ) (10,208 ) (37,776 ) Other 314 (353 ) 1,978 Ending balance $ 7,318 $ 10,064 $ 14,658 At December 31, 2017 , loans held for sale, at lower of cost or fair value with a UPB of $8.4 million were pledged as collateral to a warehouse line of credit in our Servicing segment. In 2015, we recognized gains of $20.1 million on sales to third parties of loans with a total UPB of $75.7 million we had repurchased under representation and warranty provisions of our contractual obligations to the GSEs as primary servicer of the loans. Years Ended December 31, Gains on Loans Held for Sale, Net 2017 2016 2015 Gain on sales of loans, net MSRs retained on transfers of forward loans $ 20,900 $ 36,049 $ 35,968 Fair value gains related to transfers of reverse mortgage loans, net 50,194 24,742 31,857 Gain on sale of repurchased Ginnie Mae loans 11,683 24,565 22,960 Other, net 31,470 7,952 62,185 114,247 93,308 152,970 Change in fair value of IRLCs (3,089 ) (55 ) 14 Change in fair value of loans held for sale 1,475 4,595 (8,525 ) Loss on economic hedge instruments (8,529 ) (6,592 ) (8,675 ) Other (702 ) (865 ) (815 ) $ 103,402 $ 90,391 $ 134,969 |
Advances
Advances | 12 Months Ended |
Dec. 31, 2017 | |
Advances [Abstract] | |
Advances | Note 5 — Advances December 31, 2017 2016 Principal and interest $ 20,207 $ 31,334 Taxes and insurance 144,454 170,131 Foreclosures, bankruptcy and other 63,597 94,369 228,258 295,834 Allowance for losses (16,465 ) (37,952 ) $ 211,793 $ 257,882 Advances at December 31, 2017 and 2016 include $18.1 million and $29.0 million , respectively, of advances relating to sales of loans that did not qualify for sale accounting. The following table summarizes the activity in net advances: Years Ended December 31, 2017 2016 2015 Beginning balance $ 257,882 $ 444,298 $ 893,914 Sales of advances (1) (444 ) (24,631 ) (253,335 ) Collections of advances, charge-offs and other, net (67,132 ) (165,734 ) (224,414 ) Net decrease in allowance for losses 21,487 3,949 28,133 Ending balance $ 211,793 $ 257,882 $ 444,298 (1) 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. The changes in the allowance for losses are as follows: Years Ended December 31, 2017 2016 2015 Beginning balance $ 37,952 $ 41,901 $ 70,034 Provision 21,429 (2,043 ) 61,445 Net charge-offs and other (42,916 ) (1,906 ) (89,578 ) Ending balance $ 16,465 $ 37,952 $ 41,901 |
Match Funded Assets
Match Funded Assets | 12 Months Ended |
Dec. 31, 2017 | |
Transfers and Servicing [Abstract] | |
Match Funded Assets | Note 6 — Match Funded Assets December 31, 2017 2016 Advances: Principal and interest $ 523,248 $ 711,272 Taxes and insurance 439,857 530,946 Foreclosures, bankruptcy, real estate and other 181,495 209,746 1,144,600 1,451,964 Automotive dealer financing notes (1) 35,392 — Allowance for losses (1) (2,635 ) — 32,757 — $ 1,177,357 $ 1,451,964 (1) Automotive dealer financing notes which have not been pledged to our automotive dealer loan financing facility are reported as Other assets. See Note 11 — Other Assets . The following table summarizes the activity in match funded assets: Years Ended December 31, 2017 2016 2015 Advances Automotive Dealer Financing Notes Advances Advances Beginning balance $ 1,451,964 $ — $ 1,706,768 $ 2,409,442 Transfer from Other assets — 25,180 — — Sales (691 ) — (8,923 ) (308,990 ) New advances (collections), net (306,673 ) 10,212 (245,881 ) (393,684 ) Increase in allowance for losses — (2,635 ) — — Ending balance $ 1,144,600 $ 32,757 $ 1,451,964 $ 1,706,768 |
Mortgage Servicing
Mortgage Servicing | 12 Months Ended |
Dec. 31, 2017 | |
Transfers and Servicing [Abstract] | |
Mortgage Servicing | Note 7 — Mortgage Servicing Years Ended December 31, Mortgage Servicing Rights – Amortization Method 2017 2016 2015 Beginning balance $ 363,722 $ 377,379 $ 1,820,091 Fair value election - transfer to MSRs carried at fair value (1) — — (787,142 ) Additions recognized in connection with asset acquisitions 1,658 17,356 12,355 Additions recognized on the sale of mortgage loans 20,738 37,230 34,962 Sales (1,066 ) (24,452 ) (586,352 ) Servicing transfers and adjustments 252 — — 385,304 407,513 493,914 Decrease (increase) in impairment valuation allowance (2) 3,366 (10,813 ) (17,341 ) Amortization (51,788 ) (32,978 ) (99,194 ) Ending balance $ 336,882 $ 363,722 $ 377,379 Estimated fair value at end of year $ 418,745 $ 467,911 $ 461,555 (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. 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. (2) Impairment of MSRs is recognized in Servicing and origination expense in the consolidated statements of operations. See Note 3 — Fair Value for additional information regarding impairment and the valuation allowance. The estimated amortization expense for MSRs, calculated based on assumptions used at December 31, 2017 , is projected as follows over the next five years: 2018 $ 46,705 2019 38,141 2020 34,824 2021 33,578 2022 30,552 Mortgage Servicing Rights – Fair Value Measurement Method Years Ended December 31, 2017 2016 2015 Agency Non-Agency Total Agency Non-Agency Total Agency Non-Agency Total Beginning balance $ 13,357 $ 665,899 $ 679,256 $ 15,071 $ 746,119 $ 761,190 $ 93,901 $ — $ 93,901 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 — (540 ) (540 ) (3 ) (145 ) (148 ) (70,930 ) (1,344 ) (72,274 ) Additions recognized on the sale of residential mortgage loans 162 — 162 — — — — 1,007 1,007 Servicing transfers and adjustments — (2,376 ) (2,376 ) — (1,548 ) (1,548 ) — (2,428 ) (2,428 ) Changes in fair value (1): Changes in valuation inputs or other assumptions 243 86,721 86,964 305 — 305 (639 ) 10,684 10,045 Realization of expected future cash flows and other changes (1,802 ) (89,702 ) (91,504 ) (2,016 ) (78,527 ) (80,543 ) (7,261 ) (100,957 ) (108,218 ) Ending balance $ 11,960 $ 660,002 $ 671,962 $ 13,357 $ 665,899 $ 679,256 $ 15,071 $ 746,119 $ 761,190 (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, 2017 given hypothetical shifts in lifetime prepayments and yield assumptions: Adverse change in fair value 10% 20% Weighted average prepayment speeds $ (69,646 ) $ (133,017 ) Discount rate (option-adjusted spread) (14,167 ) (27,901 ) The sensitivity analysis measures the potential impact on fair values based on hypothetical changes, which in the case of our portfolio at December 31, 2017 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 (1) Commercial (2) Total UPB at December 31, 2017 Servicing $ 75,469,327 $ — $ 75,469,327 Subservicing 2,063,669 — 2,063,669 NRZ (3) 101,819,557 — 101,819,557 $ 179,352,553 $ — $ 179,352,553 UPB at December 31, 2016 Servicing $ 86,049,298 $ — $ 86,049,298 Subservicing 4,330,084 92,933 4,423,017 NRZ (3) 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 (3) 137,142,809 — 137,142,809 $ 250,966,112 $ 105,268 $ 251,071,380 (1) Includes foreclosed real estate and small-balance commercial assets. (2) Consists of large-balance foreclosed real estate. During 2017, we sold or transferred servicing on the remaining managed assets. (3) UPB of loans serviced for which the Rights to MSRs have been sold to NRZ, including those subserviced for which third-party consents have been received and the MSRs have been transferred to NRZ. We sold MSRs relating to loans with a UPB of $219.4 million , $3.7 billion and $87.6 billion during 2017 , 2016 and 2015 , respectively. 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. From time to time, rating agencies including Moody’s Investors Service, Inc. (Moody’s), Standard & Poor’s Ratings Services (S&P) and Fitch Ratings, Inc. (Fitch) will assign an outlook (or a ratings watch) to the rating status of a mortgage servicer. A negative outlook is generally used to indicate that a rating “may be lowered,” while a positive outlook is generally used to indicate a rating “may be raised.” At December 31, 2017, S&P’s servicer ratings outlook for Ocwen is stable in general and its outlook for master servicing is positive. Fitch’s servicer ratings outlook is Negative and Moody’s servicer ratings are on Watch for Downgrade. 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. Certain of our servicing agreements require that we maintain specified servicer ratings from rating agencies such as Moody’s and S&P. At December 31, 2017, non-Agency servicing agreements with a UPB of $29.8 billion have minimum servicer ratings criteria. As a result of our current servicer ratings, termination rights have been triggered in non-Agency servicing agreements with a UPB of $9.4 billion , or 7% of our total non-Agency servicing portfolio. The geographic distribution of the UPB and count of residential loans and real estate we serviced was as follows: December 31, 2017 Amount Count California $ 40,548,633 164,652 New York 17,132,957 72,500 Florida 15,133,283 114,070 New Jersey 8,843,459 43,819 Texas 8,130,540 95,999 Other 89,563,681 730,655 $ 179,352,553 1,221,695 Years Ended December 31, Servicing Revenue 2017 2016 2015 Loan servicing and subservicing fees Servicing $ 257,419 $ 293,210 $ 453,445 Subservicing 7,775 21,427 58,384 NRZ 549,411 633,545 694,833 814,605 948,182 1,206,662 Late charges 61,763 66,709 82,690 Home Affordable Modification Program (HAMP) fees (1) 43,310 110,367 135,036 Custodial accounts (float earnings) 25,237 8,969 15,870 Loan collection fees 22,770 27,213 31,763 Other 21,691 25,180 59,776 $ 989,376 $ 1,186,620 $ 1,531,797 (1) The HAMP program expired on December 31, 2016. Borrowers who had requested assistance or to whom an offer of assistance had been extended as of that date had until September 30, 2017 to finalize their modification. Float balances (balances in custodial accounts, which represent collections of principal and interest that we receive from borrowers) are held in escrow by an unaffiliated bank and are excluded from our consolidated balance sheets. Float balances amounted to $1.5 billion , $2.1 billion and $2.2 billion at December 31, 2017 , 2016 and 2015 , respectively. 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. |
Rights to MSRs Rights to MSRs
Rights to MSRs Rights to MSRs | 12 Months Ended |
Dec. 31, 2017 | |
Transfers and Servicing [Abstract] | |
Rights To MSRs | Note 8 — Rights to MSRs In 2012 and 2013, we sold Rights to MSRs with respect to certain non-Agency MSRs and the related servicing advances to Home Loan Servicing Solutions, Ltd. (HLSS), an indirect wholly-owned subsidiary of NRZ. While certain underlying economics of the MSRs were transferred, legal title was retained by Ocwen, causing the Rights to MSRs transactions to be accounted for as secured financings. We continue to recognize the MSRs and related financing liability on our consolidated balance sheet as well as the full amount of servicing revenue and changes in the fair value of the MSRs and related financing liability in our consolidated statements of operations. On July 23, 2017 and January 18, 2018, we entered into a series of agreements with NRZ that collectively modify, supplement and supersede the arrangements among the parties as set forth in (i) the Master Servicing Rights Purchase Agreement dated as of October 1, 2012, as amended, and (ii) certain Sale Supplements, as amended (collectively, the Existing Rights to MSRs Agreements). The July 23, 2017 agreements, as amended, include a Master Agreement, Transfer Agreement and Subservicing Agreement (collectively, the 2017 Agreements) pursuant to which the parties agreed, among other things, to undertake certain actions to facilitate the transfer of the MSRs underlying the Rights to MSRs to NRZ and under which Ocwen will subservice mortgage loans underlying the MSRs for an initial term of five years (the Initial Term). While we continue the process of obtaining the third-party consents necessary to transfer the MSRs to NRZ, on January 18, 2018, the parties entered into new agreements regarding the Rights to MSRs that remained subject to the Existing Rights to MSRs Agreements (including a Servicing Addendum) and amended the Transfer Agreement (collectively, New RMSR Agreements) to accelerate the implementation of certain parts of our arrangement in order to achieve the intent of the 2017 Agreements sooner. Ocwen will continue to service the related mortgage loans until the necessary third-party consents are obtained in order to transfer the applicable MSRs in accordance with the New RMSR Agreements. Upon receiving the required consents and transferring the MSRs, Ocwen will subservice the mortgage loans underlying the MSRs pursuant to the 2017 Agreements. The 2017 Agreements and New RMSR Agreements provide for the conversion of the economics of the Existing Rights to MSRs Agreements into a more traditional subservicing arrangement and involve upfront payments to Ocwen. Prior to execution of the New RMSR Agreements, we received these payments upon obtaining the required third-party consents and the transfer of the MSRs. Upon execution of the New RMSR Agreements, we received the balance of these upfront payments. These upfront payments generally represent the net present value of the difference between the future revenue stream Ocwen would have received under the Existing Rights to MSRs Agreements and the future revenue Ocwen expects to receive under the 2017 Agreements. On September 1, 2017, pursuant to the 2017 Agreements, Ocwen successfully transferred MSRs with UPB of $15.9 billion to NRZ and received a lump-sum payment of $54.6 million . On January 18, 2018, Ocwen received a lump-sum payment of $279.6 million in accordance with the terms of the New RMSR Agreements. Due to the length of the Initial Term of the Subservicing Agreement, the transactions in which MSRs are transferred as described above do not qualify as a sale and are accounted for as secured financings. A new liability is recognized in an amount equal to the fair value of any lump sum payments received in connection with the 2017 Agreements and New RMSR Agreements. Due diligence and consent-related costs are recorded in Professional services expense as incurred. Changes in the fair value of the financing liability are recognized in Interest expense. In the event the required third-party consents are not obtained with respect to any dates specified in, and in accordance with the process set forth in, the New RMSR Agreements, such MSRs will either: (i) remain subject to the New RMSR Agreements at the option of NRZ, (ii) be acquired by Ocwen at a price determined in accordance with the terms of the New RMSR Agreements, or (iii) be sold to a third party in accordance with the terms of the New RMSR Agreements. At any time during the Initial Term, NRZ may terminate the Subservicing Agreement and Servicing Addendum for convenience, subject to Ocwen’s right to receive a termination fee and proper notice. Following the Initial Term, NRZ may extend the term of the Subservicing Agreement and Servicing Addendum for additional three -month periods by providing proper notice. Following the Initial Term, the Subservicing Agreement and Servicing Addendum can be cancelled by Ocwen on an annual basis. NRZ and Ocwen have the ability to terminate the Subservicing Agreement and Servicing Addendum for cause if certain specified conditions occur. Under the terms of the Subservicing Agreement and Servicing Addendum, in addition to a base servicing fee, Ocwen will continue to receive ancillary income, which primarily includes late fees, loan modification fees and Speedpay ® fees. NRZ will receive all float earnings and deferred servicing fees related to delinquent borrower payments, as well as be entitled to receive all real estate owned (REO) related income including REO referral commissions. Prior to January 18, 2018, MSRs as to which necessary transfer consents had not yet been obtained continued to be subject to the terms of the agreements entered into in 2012 and 2013. Under the 2012 and 2013 agreements, the servicing fees payable under the servicing agreements underlying the Rights to MSRs were apportioned between NRZ and us. NRZ retained a fee based on the UPB of the loans serviced, and OLS received certain fees, including a performance fee based on servicing fees paid less an amount calculated based on the amount of servicing advances and the cost of financing those advances. Interest expense related to financing liabilities recorded in connection with the NRZ transactions is indicated in the table below. Years Ended December 31, 2017 2016 2015 Servicing fees collected on behalf of NRZ $ 549,411 $ 633,545 $ 694,833 Less: Subservicing fee retained by Ocwen 295,192 337,727 355,527 Net servicing fees remitted to NRZ 254,219 295,818 339,306 Less: Reduction (increase) in financing liability Changes in fair value: Existing Rights to MSRs Agreements (83,300 ) (2,580 ) — 2017 Agreements 42,018 — — Runoff, settlement and other 59,190 63,997 70,513 $ 236,311 $ 234,401 $ 268,793 Interest expense for 2016 and 2015 includes $10.5 million and $14.3 million , respectively of fees incurred in connection with our agreement to compensate NRZ 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. In April 2015, Ocwen sold all economic beneficial rights to the “clean-up call rights” to which we are entitled pursuant to servicing agreements that underlie the Rights to MSRs to NRZ for a payment upon exercise of 0.50% of the UPB of all performing mortgage loans (mortgage loans that are current or 30 days or less delinquent) associated with such clean-up call. We received $5.9 million , $3.1 million and $2.6 million during 2017 , 2016 and 2015 , respectively, from NRZ in connection with such clean-up calls. As a result of the 2017 Agreements and the New RMSR Agreements, Ocwen will no longer be entitled to the 0.50% purchase price but will continue to be reimbursed for costs incurred with respect to such efforts and will receive an administrative fee. |
Receivables
Receivables | 12 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
Receivables | Note 9 — Receivables December 31, 2017 2016 Servicing-related receivables Government-insured loan claims $ 114,971 $ 133,063 Due from custodial accounts 36,122 44,761 Reimbursable expenses 31,709 29,358 Due from NRZ 14,924 21,837 Other 11,959 27,086 209,685 256,105 Income taxes receivable 36,831 61,932 Other receivables 19,600 21,125 266,116 339,162 Allowance for losses (66,587 ) (73,442 ) $ 199,529 $ 265,720 At December 31, 2017 and 2016 , the allowance for losses related to receivables of our Servicing business. Allowance for losses related to defaulted FHA or VA insured loans repurchased from Ginnie Mae guaranteed securitizations (government-insured loan claims) were $53.3 million at both December 31, 2017 and 2016 . Changes in the allowance for losses related to government-insured loan claims are as follows: Years Ended December 31, 2017 2016 2015 Beginning balance $ 53,258 $ 20,571 $ 9,976 Provision 40,424 61,322 33,710 Charge-offs and other, net (40,342 ) (28,635 ) (23,115 ) Ending balance $ 53,340 $ 53,258 $ 20,571 |
Premises and Equipment
Premises and Equipment | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Premises and Equipment | Note 10 — Premises and Equipment December 31, 2017 2016 Computer software $ 43,137 $ 58,322 Computer hardware 29,848 35,192 Leasehold improvements 23,425 25,975 Buildings 9,689 9,689 Office equipment 8,071 9,200 Furniture and fixtures 4,141 6,825 Other 1,364 2,914 119,675 148,117 Less accumulated depreciation and amortization (82,669 ) (85,373 ) $ 37,006 $ 62,744 |
Other Assets
Other Assets | 12 Months Ended |
Dec. 31, 2017 | |
Other Assets [Abstract] | |
Other Assets | Note 11 — Other Assets December 31, 2017 2016 Contingent loan repurchase asset $ 431,492 $ 246,081 Debt service accounts 33,726 42,822 Other prepaid expenses 22,559 22,271 Prepaid representation, warranty and indemnification claims - Agency MSR sale 20,173 34,917 Prepaid lender fees, net (1) 9,496 9,023 Other restricted cash 9,179 3,027 Prepaid income taxes (2) 5,621 8,392 Derivatives, at fair value 5,429 9,279 Interest-earning time deposits 4,739 6,454 Real estate 3,070 5,249 Mortgage-backed securities, at fair value 1,592 8,342 Automotive dealer financing notes, net — 33,224 Other 7,715 9,023 $ 554,791 $ 438,104 (1) We amortize these costs to the earlier of the scheduled amortization date, contractual maturity date or prepayment date of the debt. (2) 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. Automotive dealer financing notes represent short-term inventory-secured floor plan loans to independent used car dealerships that have not been pledged to our automotive dealer loan financing facility. We ceased new lending and terminated this facility in January 2018. The balance of the notes of $7.7 million and $37.6 million are reported net of an allowance of $7.7 million and $4.4 million at December 31, 2017 and 2016 , respectively. Changes in the allowance are as follows: Years Ended December 31, 2017 2016 2015 Beginning balance $ 4,371 $ 27 $ — Provision 3,293 4,344 27 Ending balance $ 7,664 $ 4,371 $ 27 |
Borrowings
Borrowings | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Borrowings | Note 12 — Borrowings Match Funded Liabilities December 31, 2017 December 31, 2016 Borrowing Type Maturity (1) Amorti-zation Date (1) Available Borrowing Capacity (2) Weighted Average Interest Rate (3) Balance Weighted Average Interest Rate (3) Balance Advance Financing Facilities Advance Receivables Backed Notes, Series 2014-VF3 Aug. 2047 Aug. 2017 $ — — % $ — 3.12 % $ 74,394 Advance Receivables Backed Notes, Series 2014-VF4 (4) Aug. 2048 Aug. 2018 37,905 4.29 67,095 3.12 74,394 Advance Receivables Backed Notes - Series 2015-VF5 (4) Aug. 2048 Aug. 2018 37,905 4.29 67,095 3.12 74,394 Advance Receivables Backed Notes - Series 2015-T3 (5) Nov. 2047 Nov. 2017 — — — 3.48 400,000 Advance Receivables Backed Notes - Series 2016-T1 (5) Aug. 2048 Aug. 2018 — 2.77 265,000 2.77 265,000 Advance Receivables Backed Notes - Series 2016-T2 (5) Aug. 2049 Aug. 2019 — 2.99 235,000 2.99 235,000 Advance Receivables Backed Notes - Series 2017-T1 (5) Sep. 2048 Sep. 2018 — 2.64 250,000 — — Total Ocwen Master Advance Receivables Trust (OMART) 75,810 3.02 884,190 3.14 1,123,182 Total Ocwen Servicer Advance Receivables Trust III (OSART III) - Advance Receivables Backed Notes, Series 2014-VF1 (6) Dec. 2048 Dec. 2018 21,232 4.63 33,768 4.63 63,093 Ocwen Freddie Advance Funding (OFAF ) - Advance Receivables Backed Notes, Series 2015-VF1 (7) Jun. 2048 Jun. 2018 53,922 4.52 56,078 3.54 94,722 Total Servicing Advance Financing Facilities 150,964 3.16 % 974,036 3.21 % 1,280,997 Automotive Capital Asset Receivables Trust (ACART) - Loan Series 2017-1 (8) Feb. 2021 Feb. 2019 25,418 6.77 % 24,582 — % — $ 176,382 3.25 % $ 998,618 3.21 % $ 1,280,997 (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 eligible collateral to pledge. Collateral may only be pledged to one facility. At December 31, 2017 , $12.4 million of the available borrowing capacity of our advance financing notes could be used based on the amount of eligible collateral that had been pledged. (3) 1ML was 1.56% and 0.77% at December 31, 2017 and 2016 , respectively. (4) Effective January 1, 2018, the borrowing capacity of the Series 2014-VF4 and the Series 2014-VF5 variable rate notes were each reduced from $105.0 million to $70.0 million . There is a ceiling of 125 basis points (bps) for 1ML in determining the interest rate for these variable rate notes. Rates on the individual notes are based on 1ML plus a margin of 235 to 635 bps. (5) Under the terms of the agreement, we must continue to borrow the full amount of the Series 2016-T1 and Series 2016-T2 fixed-rate term notes until the amortization date. If there is insufficient eligible collateral to support the level of borrowing, the excess cash proceeds in an amount necessary to make up the deficit are not distributed to Ocwen but are held by the trustee, and interest expense continues to be based on the full amount of the outstanding notes. The Series 2016-T1, Series 2016-T2 and Series 2017-T1 term notes have a total combined borrowing capacity of $750.0 million . Rates on the individual classes of notes range from 2.4989% to 4.4456% . (6) The maximum borrowing capacity under this facility is $55.0 million . There is a ceiling of 300 bps for 1ML in determining the interest rate for these variable rate notes. Rates on the individual notes are based on the lender’s cost of funds plus a margin of 235 to 475 bps. (7) The combined borrowing capacity of the notes is $110.0 million with interest computed based on the lender’s cost of funds plus a margin of 250 to 500 bps. There is a ceiling of 300 bps for 1ML in determining the interest rate for these variable rate notes. (8) The committed borrowing capacity for the Loan Series 2017-1 Notes is $50.0 million at December 31, 2017. Rates on the Loan Series 2017-1 Notes are based on cost of funds plus a margin of 500 bps. On January 23, 2018, we voluntarily terminated the Loan Series 2017-1 Notes. Pursuant to the Existing Rights to MSRs Agreements, NRZ assumed the obligation to fund new servicing advances with respect to the MSRs underlying the Rights to MSRs. 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, 2017 , we were the servicer on Rights to MSRs sold to NRZ pertaining to approximately $101.8 billion in UPB and the associated outstanding servicing advances as of such date were approximately $3.2 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. See Note 8 — Rights to MSRs for additional information. 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 advances subsequently sold to, or reimbursed by, NRZ. Financing Liabilities Balance at December 31, Borrowing Type Collateral Interest Rate Maturity 2017 2016 HMBS-Related Borrowings, at fair value (1) Loans held for investment 1ML + 260 bps (1) 4,601,556 3,433,781 Other Financing Liabilities MSRs pledged, at fair value Existing Rights to MSRs Agreements MSRs (2) (2) 499,042 477,707 2017 Agreements MSRs (3) (3) 9,249 — 508,291 477,707 Secured Notes, Ocwen Asset Servicing Income Series, Series 2014-1 (4) MSRs (4) Feb. 2028 72,575 81,131 Advances pledged (5) Advances on loans (5) (5) 12,652 20,193 593,518 579,031 $ 5,195,074 $ 4,012,812 (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. (2) This financing liability 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. (3) This financing liability arose in connection with lump sum payments received upon transfer of legal title of the MSRs related to the Rights to MSRs transactions to NRZ. We received lump sum payments of $54.6 million as compensation for foregoing certain payments under the Existing Rights to MSRs Agreements. This liability 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. (4) OASIS noteholders are entitled to receive a monthly payment equal to the sum of: (a) 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. 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 notes. (5) Certain sales of advances did not qualify for sales accounting treatment and were accounted for as a financing. This financing liability has no contractual maturity or interest rate. Other Secured Borrowings Balance at December 31, Borrowing Type Collateral Interest Rate Termination / Maturity Available Borrowing Capacity (1) 2017 2016 SSTL (2) (2) 1-Month Euro-dollar rate + 500 bps with a Eurodollar floor of 100 bps (2) Dec. 2020 $ — $ 298,251 $ 335,000 Mortgage loan warehouse facilities Repurchase agreement (3) Loans held for sale (LHFS) 1ML + 200 - 345 bps Aug. 2018 79,279 8,221 12,370 Master repurchase agreements LHFS 1ML + 200 bps; 1ML floor of 0.0% Aug. 2017 — — 173,543 Participation agreements (4) LHFS N/A Apr. 2018 (4) — 161,433 92,739 Mortgage warehouse agreement (5) LHFS (reverse mortgages) 1ML + 275 bps; interest rate floor of 350 bps Oct. 2018 — 32,042 26,254 Master repurchase agreement LHFS (reverse mortgages) 1ML + 275 bps; 1ML floor of 25 bps Aug. 2017 — — 50,123 Master repurchase agreement (6) LHFS (forward and reverse mortgages) 1ML + 225 bps forward; 1ML + 275 bps reverse Dec.2018 95,914 54,086 — Master repurchase agreement (7) LHFS (reverse mortgages) Prime + 0.0% (4.0% floor) Dec.2018 50,000 — — 225,193 255,782 355,029 $ 225,193 554,033 690,029 Unamortized debt issuance costs - SSTL (5,423 ) (7,612 ) Discount - SSTL (2,760 ) (3,874 ) $ 545,850 $ 678,543 Weighted average interest rate 5.22 % 4.56 % (1) Available borrowing capacity for our mortgage loan warehouse facilities does not consider the amount of the facility that the lender has extended on an uncommitted basis. Of the borrowing capacity extended on a committed basis, $21.8 million could be used at December 31, 2017 based on the amount of eligible collateral that had been pledged. (2) Under the terms of the Amended and Restated Senior Secured Term Loan Facility Agreement with a borrowing capacity of $335.0 million , 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 of $4.2 million on the SSTL, the first of which was paid 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. (3) $87.5 million of the maximum borrowing amount of $137.5 million is available on a committed basis and the remainder is available at the discretion of the lender. We primarily 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 these participation agreements, the lender provides financing for a 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. (5) Under this participation agreement, the lender provides financing for $100.0 million at the discretion of the lender. The participation agreement allows the lender to acquire a 100% beneficial interest in the underlying mortgage loans. The transaction does not qualify for sale accounting treatment and is accounted for as a secured borrowing. (6) Under this agreement, the lender provides financing on a committed basis for up to $150.0 million . The 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. (7) Under this agreement, t he lender provides financing for up to $50.0 million at the discretion of the lender. Senior Notes Balance at December 31, Interest Rate Maturity 2017 2016 Senior unsecured notes (1) 6.625% May 2019 $ 3,122 $ 3,122 Senior secured notes (2) 8.375% Nov. 2022 346,878 346,878 350,000 350,000 Unamortized debt issuance costs (2,662 ) (3,211 ) $ 347,338 $ 346,789 (1) Ocwen may redeem all or a part of the remaining 6.625% Senior Unsecured Notes due May 15, 2019 (Senior Unsecured Notes), upon not less than 30 nor more than 60 days’ notice, at a redemption price (expressed as percentages of principal amount) of 103.313% and 100.000% during the twelve-month periods beginning on May 15, 2017 and 2018 (and thereafter), respectively, plus accrued and unpaid interest and additional interest, if any. (2) In 2016, OLS completed a debt-for-debt exchange offer whereby OLS issued $346.9 million aggregate principal amount of 8.375% Senior Secured Second Lien Notes that mature November 15, 2022 (Senior Secured Notes) in exchange for $346.9 million aggregate principal amount (or 99.1% ) of Ocwen’s Senior Unsecured Notes. Interest is payable semiannually on each May 15 and November 15, and commenced 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 make whole 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 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 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. See Note 26 — Subsequent Events for more information on certain additional debt we will assume in connection with our pending acquisition of PHH Corporation. Credit Ratings Credit ratings are intended to be an indicator of the creditworthiness of a particular company, security or obligation. At December 31, 2017, S&P affirmed our long-term corporate rating of “B-”, Moody’s downgraded our long-term corporate rating to “Caal” and Fitch placed our ratings on Negative. At December 31, 2017, the Kroll ratings were withdrawn at the request of Ocwen. It is possible that additional actions by credit rating agencies could have a material adverse impact on our liquidity and funding position, including materially changing the terms on which we may be able to borrow money. 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 or making distributions on or purchasing equity interests of Ocwen, repurchasing or redeeming capital stock or junior capital, repurchasing or redeeming subordinated debt prior to maturity, issuing preferred stock, selling or transferring assets or making loans or investments or acquisitions or other restricted payments, entering into mergers or consolidations or sales of all or substantially all of the assets of Ocwen and its subsidiaries, creating liens on assets to secure debt of OLS or any Guarantor, enter into transactions with an affiliate; • 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. Many of the restrictive covenants arising from the indenture for the Senior Secured Notes will be suspended if the Senior Secured Notes achieve an investment-grade rating from both Moody’s and S&P and if no default or event of default has occurred and is continuing. Financial covenants in our debt agreements require that we maintain, among other things: • a 40% loan to collateral value ratio, as defined under our SSTL, as of the last date of any fiscal quarter; and • specified levels of tangible net worth and liquidity at the OLS level. As of December 31, 2017 , the most restrictive consolidated tangible net worth requirements contained in our debt agreements were for a minimum of $1.1 billion in consolidated tangible net worth, as defined, at OLS under our match funded debt and certain of our repurchase agreements, and $450.0 million at Ocwen under our automotive dealer loan financing facility. In January 2018, we terminated the automotive dealer loan financing facility. 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, nonpayment of principal or interest, noncompliance with our covenants, breach of representations, 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 was 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 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) 2018 2019 2020 2021 2022 There- after Total Fair Match funded liabilities $ 739,036 $ 259,582 $ — $ — $ — $ — $ 998,618 $ 992,698 Other secured borrowings 272,532 16,750 264,751 — — — 554,033 555,523 Senior notes — 3,122 — — 346,878 — 350,000 358,422 $ 1,011,568 $ 279,454 $ 264,751 $ — $ 346,878 $ — $ 1,902,651 $ 1,906,643 (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 recognized in connection with asset sales transactions accounted for as financings, including $499.0 million recorded in connection with sales of Rights to MSRs and $4.6 billion recorded in connection with the securitizations of HMBS. These financing liabilities have no contractual maturity and are amortized over the life of the underlying assets. |
Other Liabilities
Other Liabilities | 12 Months Ended |
Dec. 31, 2017 | |
Other Liabilities Disclosure [Abstract] | |
Other Liabilities | Note 13 — Other Liabilities December 31, 2017 2016 Contingent loan repurchase liability $ 431,492 $ 246,081 Due to NRZ (1) 98,493 83,248 Other accrued expenses 75,088 80,021 Accrued legal fees and settlements 51,057 93,797 Servicing-related obligations 35,239 35,324 Liability for indemnification obligations 23,117 27,546 Checks held for escheat 19,306 16,890 Amounts due in connection with MSR sales 8,291 39,398 Accrued interest payable 5,172 3,698 Deferred income 3,463 4,481 Liability for uncertain tax positions 3,252 23,216 Derivatives, at fair value 635 1,550 Other 14,805 25,989 $ 769,410 $ 681,239 (1) Balances represent advance collections and servicing fees to be remitted to NRZ. We monitor our legal and regulatory 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, including fines and penalties, judgments on appeal and filed and/or threatened claims for which we believe it is probable that a loss has been or will be incurred and the amount can be reasonably estimated. See Note 22 — Regulatory Requirements and Note 24 — Contingencies for additional information. We recognize legal costs associated with loss contingencies in Professional services expense in the consolidated statement of operations as incurred. The changes in the liability for legal fees and settlements are as follows: Years Ended December 31, 2017 2016 2015 Beginning balance $ 93,797 $ 74,922 $ 38,962 Accrual for probable losses (1) 133,656 74,943 30,691 Payments (2) (174,941 ) (47,754 ) (4,928 ) Net change in accrued legal fees 482 (6,231 ) 10,196 Other (3) (1,937 ) (2,083 ) 1 Ending balance $ 51,057 $ 93,797 $ 74,922 (1) Consists of amounts accrued for probable losses in connection with legal and regulatory settlements and judgments. Such amounts are reported in Professional services expense in the consolidated statements of operations. (2) Includes cash payments made in connection with resolved legal and regulatory matters. (3) During the year ended December 31, 2017 , Ocwen issued 625,000 shares of common stock with a fair value of $1.9 million in connection with a legal settlement. The remaining 1,875,000 shares were issued in January 2018. |
Equity
Equity | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Equity | Note 14 — Equity Common Stock On October 31, 2013 , we announced that Ocwen’s Board of Directors had authorized a share repurchase program for an aggregate of up to $500.0 million of Ocwen’s issued and outstanding shares of common stock. 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 . Ocwen and NRZ entered into a share purchase agreement pursuant to which Ocwen sold NRZ 6,075,510 shares of newly-issued Ocwen common stock for $13.9 million . Ocwen received the sales proceeds from NRZ on July 24, 2017 and issued the shares. The shares have not been registered under the Securities Act of 1933 and were issued and sold in reliance upon the exemption from registration contained in Section 4(a)(2) of the Act and Rule 506(b) promulgated thereunder. See Note 8 — Rights to MSRs for additional information. Ocwen agreed to issue an aggregate of 2,500,000 shares of common stock in connection with a mediated settlement of litigation. As of December 31, 2017, Ocwen had issued 625,000 shares with the remaining 1,875,000 shares issued in January 2018. The shares have not been registered under the Securities Act of 1933 and were issued in reliance upon the exemption from registration set forth in Section 3(a)(10) of the Act. See Note 24 — Contingencies for additional information. Accumulated Other Comprehensive Loss The components of accumulated other comprehensive loss (AOCL), net of income taxes, were as follows: December 31, 2017 2016 Unrealized losses on cash flow hedges $ 1,128 $ 1,329 Other 121 121 $ 1,249 $ 1,450 |
Derivative Financial Instrument
Derivative Financial Instruments and Hedging Activities | 12 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments and Hedging Activities | Note 15 — Derivative Financial Instruments and Hedging Activities Certain of our current derivative agreements are not exchange-traded, exposing us 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 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 derivative activity, including the derivatives used in each of our identified hedging programs. None of the derivatives was designated as a hedge for accounting purposes at December 31, 2017 : Interest Rate Risk IRLCs and Loans Held for Sale Borrowings IRLCs Forward MBS Trades Interest Rate Caps Notional balance at December 31, 2016 $ 360,450 $ 609,177 $ 955,000 Additions 3,711,902 2,914,283 211,667 Amortization — — (416,667 ) Maturities (3,221,782 ) (2,289,228 ) — Terminations (754,231 ) (993,409 ) (375,000 ) Notional balance at December 31, 2017 $ 96,339 $ 240,823 $ 375,000 Maturity Jan. 2018 - Mar. 2018 Feb. 2018 Jul. 2018 - Dec. 2019 Fair value of derivative assets (liabilities) (1) at: December 31, 2017 $ 3,283 $ (545 ) $ 2,056 December 31, 2016 6,507 (614 ) 1,836 Gains (losses) on derivatives during the years ended: Gain on Loans Held for Sale, Net Other, Net December 31, 2017 $ (3,089 ) $ (8,529 ) $ 10 December 31, 2016 (55 ) (6,592 ) (1,387 ) (1) Derivatives are reported at fair value in Other assets or in Other liabilities on our consolidated balance sheets. 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 Our operations in India and the Philippines expose us to insignificant foreign currency exchange rate risk. Interest Rate Risk 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. 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. 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, which is used in determining the interest rate on the debt. We currently do not hedge our fixed rate debt. Included in AOCL at December 31, 2017 and 2016 , respectively, were $1.2 million and $1.4 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 were as follows: Years Ended December 31, 2017 2016 2015 Beginning balance $ 1,450 $ 1,763 $ 8,413 Losses on terminated cash flow hedging relationships amortized to earnings (201 ) (337 ) (7,042 ) Decrease in deferred taxes on accumulated losses on cash flow hedges — 24 392 Decrease in accumulated losses on cash flow hedges, net of taxes (201 ) (313 ) (6,650 ) Ending balance $ 1,249 $ 1,450 $ 1,763 Other income (expense), net, includes the following related to derivative financial instruments: Years Ended December 31, 2017 2016 2015 Gain (loss) on economic hedges $ 10 $ (1,387 ) $ (1,377 ) Write-off of losses in AOCL for a discontinued hedge relationship (1) (201 ) (337 ) (7,042 ) $ (191 ) $ (1,724 ) $ (8,419 ) (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, 2017 | |
Other Income and Expenses [Abstract] | |
Interest Income | Note 16 — Interest Income Years Ended December 31, 2017 2016 2015 Loans held for sale $ 11,100 $ 15,774 $ 16,167 Automotive dealer financing notes 3,069 1,534 39 Interest earning cash deposits and other 1,796 1,775 2,114 $ 15,965 $ 19,083 $ 18,320 |
Interest Expense
Interest Expense | 12 Months Ended |
Dec. 31, 2017 | |
Other Income and Expenses [Abstract] | |
Interest Expense | Note 17 — Interest Expense Years Ended December 31, 2017 2016 2015 Financing liabilities $ 242,514 $ 248,834 $ 292,306 Match funded liabilities 47,624 66,879 65,248 Other secured borrowings 39,531 60,469 91,391 Senior notes 29,806 30,012 26,259 Other 3,763 6,389 7,169 $ 363,238 $ 412,583 $ 482,373 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 18 — Income Taxes For income tax purposes, the components of loss before taxes were as follows: Years Ended December 31, 2017 2016 2015 Domestic $ (75,143 ) $ (130,920 ) $ (62,903 ) Foreign (68,830 ) (75,441 ) (66,958 ) $ (143,973 ) $ (206,361 ) $ (129,861 ) The components of income tax expense (benefit) were as follows: Years Ended December 31, 2017 2016 2015 Current: Federal $ (21,859 ) $ (8,025 ) $ 46,680 State (3,938 ) 460 1,079 Foreign 9,550 5,099 161 (16,247 ) (2,466 ) 47,920 Deferred: Federal 27,289 (22,054 ) (27,173 ) State 702 4,701 (3,719 ) Foreign 2,719 (2,806 ) 2,754 Provision for (reversal of) valuation allowance on deferred tax assets (29,979 ) 15,639 97,069 731 (4,520 ) 68,931 Total $ (15,516 ) $ (6,986 ) $ 116,851 Income tax expense differs from the amounts computed by applying the U.S. Federal corporate income tax rate of 35% as follows: Years Ended December 31, 2017 2016 2015 Expected income tax expense (benefit) at statutory rate $ (50,391 ) $ (72,225 ) $ (45,451 ) Differences between expected and actual income tax expense: U.S Tax Reform - Change in Federal rate 62,758 — — U.S Tax Reform - Transition Tax 34,846 — — Foreign tax differential including effectively connected income (1) (12,140 ) 42,463 41,695 Provision for (reversal of) liability for uncertain tax positions (16,925 ) 2,236 18,205 Provision for (reversal of) valuation allowance on deferred tax assets (2) (29,979 ) 15,639 97,069 Provision for liability for intra-entity transactions 2,484 3,357 4,700 State tax, after Federal tax benefit (3,938 ) 250 (2,867 ) Excess tax benefits from share-based compensation (3,701 ) — — Other permanent differences 2,783 515 (463 ) Non-deductible regulatory settlements — — 700 Other (1,313 ) 779 3,263 Actual income tax expense (benefit) $ (15,516 ) $ (6,986 ) $ 116,851 (1) The foreign tax differential includes a benefit recognized in 2017 and 2016 for taxable losses earned by OMS which are taxable in the U.S. as effectively connected income (ECI). The foreign tax differential for 2015 included positive ECI expected to be generated for that year. The impact of ECI to income tax expense (benefit) for 2017, 2016 and 2015 was $(28.5) million , $(7.4) million and $7.3 million , respectively. (2) The benefit recorded for the provision for valuation allowance in 2017 relates primarily to the reduction in the valuation allowance necessary as a result of revaluing our deferred tax assets due to U.S. tax reform and the reduction in the corporate tax rate. This benefit is partially offset by an increase in valuation allowance necessary for current year losses. 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 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. The Tax Act amends the Internal Revenue Code to reduce tax rates and modify policies, credits, and deductions for individuals and businesses. For businesses, the Tax Act reduces the corporate federal tax rate from a maximum of 35% to a flat 21% rate. The rate reduction took effect on January 1, 2018. This reduction in the statutory U.S. federal rate is expected to positively impact our future U.S. after-tax earnings. However, the ultimate impact is subject to the effect of other complex provisions in the Tax Act (including the Base Erosion and Anti-Abuse Tax (BEAT), Global Intangible Low-Taxed Income (GILTI), and revised interest deductibility limitations) which we are currently reviewing. It is possible that any impact of these provisions could significantly reduce the benefit of the reduction in the statutory U.S. federal rate. Due to the uncertain practical and technical application of many of these provisions in the Tax Act, at this time, we are unable to make a final determination of the precise impact on its future earnings. Under the Tax Act, the transition to a new territorial tax system will cause Ocwen to incur a deemed repatriation tax (Transition Tax) on undistributed earnings of non-U.S. subsidiaries. The amount of the Transition Tax is dependent upon many factors, including the accumulated earnings and profits (E&P) of Ocwen’s non-U.S. subsidiaries, our ability and willingness to utilize foreign tax credits and/or net operating loss (NOL) carryforwards, and 2017 taxable income or loss amounts in the U.S. and non-U.S. jurisdictions. The estimated impact of the Transition Tax on the December 31, 2017 financial statements is a reduction to the U.S. federal NOL carryforward of approximately $16.9 million . The reduction of the NOL deferred tax asset results in an offsetting release of the valuation allowance. Due to the various factors affecting the calculation, our decision regarding how best to utilize the foreign tax credits and/or NOL carryforwards is subject to change as we continue to wait for further guidance and analyze additional information necessary to finalize the calculations and maximize the long-term value to Ocwen. As we await further guidance and continue to analyze our options with regard to the 2017 income tax return filing position, our determination of the impact of the Transition Tax on our December 31, 2017 financial statements for U.S. federal income taxes and state income taxes is preliminary at this time. Net deferred tax assets were comprised of the following: December 31, 2017 2016 Deferred tax assets Net operating loss carryforward $ 59,271 $ 67,657 Foreign deferred assets 6,769 5,219 Intangible asset amortization 5,541 8,223 Partnership losses 5,360 8,976 Accrued incentive compensation 4,798 8,017 Foreign tax credit 4,262 4,262 Stock-based compensation expense 4,202 5,659 Mortgage servicing rights amortization 3,664 11,592 Accrued other liabilities 3,239 5,543 Accrued legal settlements 3,602 9,178 Tax residuals and deferred income on tax residuals 2,569 4,037 Bad debt and allowance for loan losses 2,383 3,268 Interest expense disallowance 2,032 — Reserve for servicing exposure 1,312 1,900 Capital losses 937 1,450 Delinquent servicing fees 769 1,647 Other 3,245 1,872 113,955 148,500 Deferred tax liabilities Foreign undistributed earnings 4,858 13,619 Other 49 76 4,907 13,695 109,048 134,805 Valuation allowance (1) (107,048 ) (132,073 ) Deferred tax assets, net $ 2,000 $ 2,732 (1) The decline in the valuation allowance of $25.0 million in 2017 is due to a $30.0 million reversal of valuation allowance on deferred tax assets (through a reduction in income tax expense), offset in part by the establishment of a $5.0 million valuation allowance (through a reduction in retained earnings) on the deferred tax asset recognized in connection with our adoption of ASU 2016-09. As of December 31, 2017, we had a U.S. net deferred tax asset of $62.9 million and a USVI net deferred tax asset of $43.9 million . As a result of the reduction in the corporate income tax rate from 35% to 21% under the Tax Act, we have revalued our U.S. and USVI net deferred tax assets at December 31, 2017. The net deferred tax assets in the U.S. and USVI jurisdictions have decreased by $36.1 million and $26.6 million , respectively, due to the change in the corporate tax rate. As the net deferred tax assets in these jurisdictions have full valuation allowances, the revaluation of our net deferred tax assets does not have an impact on our consolidated statement of financial position or consolidated statement of operations. In addition to the reduction in our net deferred tax assets above, the Tax Act may have other impacts to our deferred tax assets, including, but not limited to, a reassessment of the valuation allowance due to changes in future taxable income and the likelihood of our ability to realize the existing deferred tax asset associated with previously disallowed interest expense. As a result, the net deferred tax assets recorded as of December 31, 2017 are provisional in accordance with the guidance in SAB 118. We will record any additional tax effects to our deferred tax assets in the first reporting period during which the amounts are determined. 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. Both the U.S. and USVI jurisdictions are in a three-year cumulative loss position as of December 31, 2017 . 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 $62.9 million and $95.5 million on our U.S. net deferred tax assets at December 31, 2017 and 2016 , respectively, and a valuation allowance of $43.9 million and $36.2 million on our USVI net deferred tax assets at December 31, 2017 and 2016 , 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, 2017 , we had U.S. NOL carryforwards and USVI NOL carryforwards of $266.4 million and $463.4 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. and USVI NOL carryforwards will not be realized. In recognition of this risk, we have provided a total valuation allowance of $55.9 million and $3.1 million on the deferred tax assets relating to these U.S. and USVI NOL carryforwards, respectively. 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, 2017 will be accounted for as a reduction of income tax expense. Additionally, $328.4 million of USVI NOLs have been 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 U.S. and USVI capital loss carryforwards of $0.5 million and $15.3 million , respectively, at December 31, 2017 against which a valuation allowance has been recorded. NOL carryforwards may be subject to annual limitations under Internal Revenue Code Section 382 (Section 382) (or comparable provisions of foreign or state law) in the event that certain changes in ownership were to occur. We periodically evaluate our NOL carryforwards and whether certain changes in ownership have occurred that would limit our ability to utilize a portion of our NOL carryforwards. If it is determined that an ownership change(s) has occurred, there may be annual limitations on the use of these NOL carryforwards under Section 382 (or comparable provisions of foreign or state law). Generally, a Section 382 ownership change occurs if, over a rolling three-year period, there has been an aggregate increase of 50 percentage points or more in the percentage of our stock owned by one or more “ 5 -percent shareholders.” Ownership for Section 382 purposes is determined primarily by an economic test, while the SEC definition of beneficial ownership focuses generally on the right to vote or control disposition of the shares. In general, the Section 382 economic test looks to who has the right to receive dividends paid with respect to shares, and who has the right to receive proceeds from the sale or other disposition of shares. Section 382 also contains certain constructive ownership rules, which generally attribute ownership of stock held by estates, trusts, corporations, partnerships or other entities to the ultimate indirect individual owner of the shares, or to related individuals. Generally, a person’s direct or indirect economic ownership interest in shares (rather than record title, voting control or other factors) is taken into account for Section 382 purposes. For purposes of determining the existence and identity of, and the amount of stock owned by any shareholder, the Internal Revenue Service permits us to rely on the existence or absence of filings with the SEC of Schedules 13D, 13F and 13G (or similar filings) as of any date, subject to our actual knowledge of the ownership of our common stock. Investors who file a Schedule 13G or Schedule 13D (or list our common stock in their Schedules 13F) may beneficially own 5% or more of our common stock for SEC reporting purposes but nonetheless may not be Section 382 “ 5 -percent shareholders” and therefore their beneficial ownership will not result in a Section 382 ownership change. We are currently in the process of evaluating whether we experienced an ownership change, as defined under Section 382, and have identified risk that an ownership change may have occurred in the U.S. jurisdiction during 2015, which would also result in an ownership change under 382 in the USVI jurisdiction during 2015. As part of this evaluation, Ocwen is seeking additional information pertaining to certain identified 5% shareholders, and their economic ownership for Section 382 purposes. To the extent an ownership change is ultimately determined to have occurred, the annual utilization of our NOLs may be subject to certain limitations under Section 382 and other limitations under state tax laws. Any reduction to our NOL deferred tax asset due to an annual Section 382 limitation and the NOL carryforward period is expected to result in an offsetting reduction in valuation allowance related to the NOL deferred tax asset. Therefore, at this time, we anticipate that any limitation would not have a material impact on our consolidated statements of operations. However, as we are still in the process of evaluating whether and when we experienced an ownership change and are seeking additional information from shareholders, the final impact of Section 382 limitations has not been determined. Our major jurisdiction tax years that remain subject to examination are our U.S. federal tax return for the years ended December 31, 2014 through the present, our USVI corporate tax return for the years ended December 31, 2014 through the present, and our India corporate tax returns for the years ended March 31, 2010 through the present. We currently do not have any tax returns under income tax examination in the U.S. or USVI tax jurisdictions. A reconciliation of the beginning and ending amount of the total liability for uncertain tax positions is as follows: Years Ended December 31, 2017 2016 2015 Beginning balance $ 16,994 $ 32,548 $ 22,523 Additions for tax positions of prior years 2,281 — 13,162 Reductions for tax positions of prior years — — (2,741 ) Reductions for settlements (387 ) (14,420 ) — Lapses in statute of limitations (16,607 ) (1,134 ) (396 ) Ending balance $ 2,281 $ 16,994 $ 32,548 We recognized total interest and penalties of $(5.1) million , $(1.0) million and $6.3 million in 2017 , 2016 and 2015 , respectively. At December 31, 2017 and 2016 , accruals for interest and penalties were $1.0 million and $6.2 million , respectively. As of December 31, 2017 and 2016 , we had a liability for uncertain tax positions of $2.3 million and $17.0 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 $2.3 million in unrecognized tax benefits may be necessary within the next 12 months. As of December 31, 2017 , we have recognized a deferred tax liability of $4.9 million for India and Philippines subsidiary undistributed earnings of $30.2 million . With the exception of 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, 2017 , our foreign subsidiaries have approximately $209.8 million of undistributed earnings and $257.6 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 Christiansted, 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 EDC benefits had no impact on our current foreign tax benefit in 2017 because we are incurring current losses in the USVI and do not have carryback potential for these losses. As a result, no current benefit can be recognized for these losses. 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. The detriment of these EDC benefits on diluted earnings per share was $(0.51) and $(0.54) for 2016 and 2015 , respectively. |
Basic and Diluted Earnings (Los
Basic and Diluted Earnings (Loss) per Share | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Earnings (Loss) per Share | Note 19 — 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 loss attributable to Ocwen common stockholders by the weighted average number of common shares outstanding during the year. We calculate diluted earnings or loss per share by dividing net income or loss attributable to Ocwen by the weighted average number of common shares outstanding including the potential dilutive common shares related to outstanding stock options and restricted stock awards. For 2017, 2016 and 2015, we have excluded the effect of stock options and common stock awards from the computation of diluted loss per share because of the anti-dilutive effect of our reported net loss. Years Ended December 31, 2017 2016 2015 Basic loss per share Net loss attributable to Ocwen stockholders $ (127,966 ) $ (199,762 ) $ (247,017 ) Weighted average shares of common stock 127,082,058 123,990,700 125,315,899 Basic loss per share $ (1.01 ) $ (1.61 ) $ (1.97 ) Diluted loss per share Net loss attributable to Ocwen stockholders $ (127,966 ) $ (199,762 ) $ (247,017 ) Weighted average shares of common stock 127,082,058 123,990,700 125,315,899 Effect of dilutive elements — — — Dilutive weighted average shares of common stock 127,082,058 123,990,700 125,315,899 Diluted loss per share $ (1.01 ) $ (1.61 ) $ (1.97 ) Stock options and common stock awards excluded from the computation of diluted earnings per share Anti-dilutive (1) 5,487,164 7,176,089 2,038,588 Market-based (2) 862,446 795,456 924,438 (1) Stock options were anti-dilutive because their exercise price was greater than the average market price of Ocwen’s stock. (2) Shares that are issuable upon the achievement of certain market-based performance criteria related to Ocwen’s stock price. |
Employee Compensation and Benef
Employee Compensation and Benefit Plans | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Employee Compensation and Benefit Plans | Note 20 — 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 $5.4 million , $5.0 million and $5.4 million for the years ended December 31, 2017 , 2016 and 2015 , respectively. Annual Incentive Plan The Ocwen Financial Corporation Amended 1998 Annual Incentive Plan and the 2017 Performance Incentive Plan (the 2017 Equity Plan) are our primary incentive compensation plans for executives and other eligible employees. Previously issued equity awards remain outstanding under the 2007 Equity Incentive Plan (the 2007 Equity Plan). 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 $24.5 million , $25.5 million and $30.2 million of compensation expense during 2017 , 2016 and 2015 , respectively, related to annual incentive compensation awarded in cash. The 2007 Equity Plan and the 2017 Equity Plan authorize the grant of stock options, restricted stock, stock units or other equity-based awards to employees. Effective with the approval of the 2017 Equity Plan by Ocwen shareholders on May 24, 2017, no new awards will be granted under the 2007 Equity Plan. The number of remaining shares available for award grants under the 2007 Equity Plan became available for award grants under the 2017 Equity Plan effective upon shareholder approval. At December 31, 2017 , there were 4,696,602 shares of common stock remaining available for future issuance under these plans. Awards under these plans 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 % 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 % Type of Award Percent of Total Equity Award Vesting Period 2016 and 2017 Awards: Stock Units: Service Condition: Time-based 30 % Over three years with 1/3rd vesting on each of the first three anniversaries of the grant date. Market Condition: Time-based vesting schedule and Market performance-based vesting date 70 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. Years Ended December 31, Stock Options 2017 2016 2015 Number of Options Weighted Average Exercise Price Number of Options Weighted Average Exercise Price Number of Options Weighted Average Exercise Price Outstanding at beginning of year 6,926,634 $ 9.88 7,151,225 $ 10.10 6,828,861 $ 9.99 Granted (1)(2) — — — — 968,041 17.48 Exercised (3)(4) — — (69,805 ) 5.81 (145,677 ) 5.24 Forfeited/Canceled (1) (217,979 ) 7.16 (154,786 ) 21.80 (500,000 ) 24.38 Outstanding at end of year (5)(6) 6,708,655 $ 9.97 6,926,634 $ 9.88 7,151,225 $ 10.10 Exercisable at end of year (5)(6)(7) 6,234,830 $ 8.87 6,344,958 $ 8.71 6,187,559 $ 8.25 (1) Upon the resignation of our former executive chairman 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 in 2015 was $3.28 . (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 and $0.3 million for 2016 and 2015 , respectively. (4) In connection with the exercise of stock options during 2015, employees delivered 56,013 shares 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 net shares of stock were issued in 2015 related to the exercise of stock options. (5) At December 31, 2017 , 280,000 options with a market condition for vesting based on an average common stock trading price of $32.24 , had not met their performance criteria. The net aggregate intrinsic value of stock options outstanding and stock options exercisable at December 31, 2017 was $0 and $0 , respectively. A total of 4,662,814 market-based options were outstanding at December 31, 2017 , of which 4,382,814 were exercisable. (6) At December 31, 2017 , the weighted average remaining contractual term of options outstanding and options exercisable was 1.94 years and 1.58 years , respectively. (7) The total fair value of stock options that vested and became exercisable during 2017 , 2016 and 2015 , based on grant-date fair value, was $0.7 million , $1.1 million and $2.0 million , respectively. Years Ended December 31, Stock Units 2017 2016 2015 Number of Weighted Number of Weighted Number of Weighted Unvested at beginning of year 2,752,054 $ 3.91 835,730 $ 10.00 79,612 $ 32.23 Granted 971,761 2.56 2,184,100 2.19 790,397 8.53 Vested (1)(2) (896,272 ) 3.26 (26,666 ) 32.56 (34,279 ) 27.92 Forfeited/Canceled (73,625 ) 2.20 (241,110 ) 6.17 — — Unvested at end of year (3)(4) 2,753,918 $ 3.69 2,752,054 $ 3.91 835,730 $ 10.00 (1) The total intrinsic value of stock units vested, which is defined as the market value of the stock on the date of vesting, was $4.6 million , $0.1 million and $0.3 million for 2017 , 2016 and 2015 , respectively. (2) The total fair value of the stock units that vested during 2017 , 2016 and 2015 , based on grant-date fair value, was $2.9 million , $0.9 million and $1.0 million , respectively. (3) Excluding the 582,446 market-based stock awards that have not met their performance criteria, the net aggregate intrinsic value of stock awards outstanding at December 31, 2017 was $6.8 million . At December 31, 2017 , 502,446 and 80,000 stock units with a market condition for vesting based on an average common stock trading price of $16.26 and $11.72 , respectively, had not yet met the market condition. (4) At December 31, 2017 , the weighted average remaining contractual term of share units outstanding was 1.40 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: Years Ended December 31, 2017 2016 2015 Monte Carlo Monte Carlo Black-Scholes Binomial Monte Carlo Risk-free interest rate 1.12% – 1.18% 1.12% 1.60% – 2.08% 0.20% - 2.74% 1.23% Expected stock price volatility (1) 71% - 77% 77% 45% 51% - 108% 65% Expected dividend yield —% —% —% —% —% Expected life (in years) (2) (3) (3) 5.50 5.41 - 5.46 (3) Contractual life (in years) N/A N/A N/A 10 N/A Fair value $2.00 - $4.80 $2.00 $3.36 - $4.62 $5.41 - $5.46 $7.99 (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: Years Ended December 31, 2017 2016 2015 Equity-based compensation expense Stock option awards $ 1,457 $ 1,644 $ 3,978 Stock awards 4,167 3,537 3,313 Excess tax benefit related to share-based awards 3,701 686 6,824 As of December 31, 2017 , unrecognized compensation costs related to non-vested stock options amounted to $1.0 million , which will be recognized over a weighted-average remaining requisite service period of 1.16 years . Unrecognized compensation costs related to non-vested stock units as of December 31, 2017 amounted to $3.3 million , which will be recognized over a weighted-average remaining life of 1.40 years. |
Business Segment Reporting
Business Segment Reporting | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Business Segment Reporting | Note 21 — 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. While our expense allocation methodology for the current period is consistent with that used in prior periods presented, during the first quarter of 2017, we moved certain functions which had been associated with corporate cost centers to our Lending and Servicing segments because these functions align more closely with those segments. As applicable, the results of operations for the years ended December 31, 2016 and 2015 have been recast to conform to the current year presentation. As a result of these changes, income before income taxes for the Lending segment for the years ended December 31, 2016 and 2015 decreased by $9.9 million and $10.7 million , respectively, while income before income taxes for the Servicing segment increased by the same amounts for the same years. 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 originates and purchases conventional and government-insured residential forward and reverse mortgage loans mainly through correspondent lending arrangements, broker relationships (wholesale) and directly with mortgage customers (retail). The loans are typically sold shortly after origination into a liquid market on a servicing retained (securitization) or servicing released (sale to a third party) basis. In 2017, we closed our forward correspondent lending channel and have effectively exited the forward wholesale lending business. We wrote off the capitalized balance of software developed internally for the forward wholesale lending business and recorded a loss of $6.8 million in Other expenses in 2017. We continue to originate loans through our forward retail lending channel as well as through all three channels of reverse mortgage lending. Corporate Items and Other. Corporate Items and Other includes revenues and expenses of CR Limited (CRL), our wholly-owned captive reinsurance subsidiary, 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. CRL provides re-insurance related to coverage on foreclosed real estate properties owned or serviced by us. ACS provided short-term inventory-secured loans to independent used car dealers to finance their inventory. In January 2018, we entered into an agreement to sell the majority of our portfolio. We expect to have exited the business by the end of the second quarter of 2018, although we will retain, and continue to attempt to collect on, defaulted loans. We allocate a portion of interest income to each business segment, including interest earned on cash balances and short-term investments. We also allocate expenses incurred by corporate support services to each business segment. Financial information for our segments is as follows: Results of Operations Servicing Lending Corporate Items and Other Corporate Eliminations Business Segments Consolidated Year Ended December 31, 2017 Revenue (1) $ 1,041,290 $ 127,475 $ 25,811 $ — $ 1,194,576 Expenses (1) 716,384 128,058 154,203 — 998,645 Other income (expense): Interest income 783 10,914 4,268 — 15,965 Interest expense (293,595 ) (13,893 ) (55,750 ) — (363,238 ) Gain on sale of mortgage servicing rights, net 10,537 — — — 10,537 Other (1) 4,049 (869 ) (6,348 ) — (3,168 ) Other expense, net (278,226 ) (3,848 ) (57,830 ) — (339,904 ) Income (loss) before income taxes $ 46,680 $ (4,431 ) $ (186,222 ) $ — $ (143,973 ) Year Ended December 31, 2016 Revenue (1) $ 1,247,159 $ 112,363 $ 27,646 $ (5 ) $ 1,387,163 Expenses (1) 910,577 114,199 198,483 (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 $ 3,364 $ 131 $ (209,856 ) $ — $ (206,361 ) Year Ended December 31, 2015 Revenue (1) $ 1,613,537 $ 124,724 $ 2,895 $ (58 ) $ 1,741,098 Expenses (1) 1,211,140 108,431 158,671 (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 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 $ 26,615 $ 23,226 $ (179,702 ) $ — $ (129,861 ) Total Assets Servicing Lending Corporate Items and Other Corporate Eliminations Business Segments Consolidated December 31, 2017 $ 3,033,243 $ 4,945,456 $ 424,465 $ — $ 8,403,164 December 31, 2016 3,312,371 3,863,862 479,430 — 7,655,663 December 31, 2015 4,089,911 2,811,165 479,232 — 7,380,308 (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. Depreciation and Amortization Expense Servicing Lending Corporate Items and Other Business Segments Consolidated Year Ended December 31, 2017: Depreciation expense $ 5,797 $ 194 $ 20,895 $ 26,886 Amortization of mortgage servicing rights 51,515 273 — 51,788 Amortization of debt discount — — 1,114 1,114 Amortization of debt issuance costs — — 2,738 2,738 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 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 |
Regulatory Requirements
Regulatory Requirements | 12 Months Ended |
Dec. 31, 2017 | |
Brokers and Dealers [Abstract] | |
Regulatory Requirements | Note 22 — 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 and conduct examinations of our servicing and lending activities. In addition, we operate under a number of regulatory settlements that subject us to ongoing reporting and other obligations. 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 our servicing and lending 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 (i) administrative fines and penalties and litigation, (ii) loss of our licenses and approvals to engage in our servicing and lending businesses, (iii) governmental investigations and enforcement actions (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 otherwise fund our operations and (viii) inability to execute on our business strategy. In addition to amounts paid to resolve regulatory matters, we could incur costs to comply with the terms of such resolutions, including, but not limited to, the costs of audits, reviews, and third-party firms to monitor our compliance with such resolutions. We have recognized $177.5 million in such third-party monitoring costs from January 1, 2014 through December 31, 2017 in connection with the 2013 Ocwen National Mortgage Settlement, our 2014 settlement with the New York Department of Financial Services (NY DFS) and our 2015 settlement with the California Department of Business Oversight (CA DBO). We must comply with a large number of federal, state and local consumer protection and other laws and regulations, including, among others, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act), the Telephone Consumer Protection 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 Servicemembers Civil Relief Act, the Homeowners Protection Act, the Federal Trade Commission Act, the Fair Credit Reporting Act and the Equal Credit Opportunity Act, as well as individual state licensing and foreclosure laws, individual state and local laws relating to registration of vacant or foreclosed properties, and federal and local bankruptcy rules. These laws and regulations 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 fees assessed on borrowers, and they mandate certain disclosures and notices to borrowers. These requirements can and do change as laws and regulations are enacted, promulgated, amended, interpreted and enforced, including through CFPB interpretive bulletins and other regulatory pronouncements. In addition, the actions of legislative bodies and regulatory agencies relating to a particular matter or business practice may or may not be coordinated or consistent. As a result, ensuring ongoing compliance with applicable legal and regulatory requirements can be challenging. The recent trend among federal, state and local legislative bodies and regulatory agencies as well as state attorneys general has been toward increasing laws, regulations, investigative proceedings and enforcement actions with regard to residential real estate lenders and servicers. New regulatory and legislative measures, or changes in enforcement practices, including those related to the technology we use, could, either individually or in the aggregate, require significant changes to our business practices, impose additional costs on us, limit our product offerings, limit our ability to efficiently pursue business opportunities, negatively impact asset values or reduce our revenues. Accordingly, they could materially and adversely affect our business and our financial condition, liquidity and results of operations. Ocwen has various subsidiaries, including OLS, Homeward and Liberty, that are licensed to originate and/or service forward and reverse mortgage loans in those jurisdictions in which they operate and which require licensing. 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 and satisfying minimum net worth requirements and non-financial requirements such as satisfactory completion of examinations relating 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 business, reputation, 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, 2017 . OLS, Homeward and Liberty are also subject to seller/servicer obligations under agreements with one or more of the GSEs, HUD, FHA, VA and Ginnie Mae. These seller/servicer obligations contain financial requirements, including 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 provide certain information or take actions at the direction of the applicable agency, 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. Any of these actions could have a material adverse impact on us. To date, none of these counterparties has communicated any material sanction, suspension or prohibition in connection with our seller/servicer obligations. See Note 24 — Contingencies for additional information relating to our recent interactions with Ginnie Mae as a result of the state regulatory actions discussed in that note. We believe we were in compliance with applicable net worth requirements at December 31, 2017 . 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 referenced above is based on the total assets of OLS, and the required net worth was $283.0 million at December 31, 2017 . There are a number of foreign laws and regulations that are applicable to our operations outside of the U.S., including laws and regulations that govern licensing, employment, safety, taxes and insurance and laws and regulations that govern the creation, continuation and the winding up of companies as well as the relationships between shareholders, our corporate entities, the public and the government in these countries. Non-compliance with these laws and regulations could result in adverse actions against us, including (i) restrictions on our operations in these countries, (ii) fines, penalties or sanctions or (iii) reputational damage. During 2017, we made progress addressing the legacy regulatory matters discussed below. However, we still have significant work to do in order to resolve regulatory matters impacting Ocwen, including those discussed in Note 24 — Contingencies . New York Department of Financial Services. In December 2014, we entered into a consent order (the 2014 NY Consent Order) with the NY DFS as a result of an investigation relating to Ocwen’s servicing of residential mortgages. The 2014 NY Consent Order contained monetary and non-monetary provisions including the appointment of a third-party operations monitor (NY 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. We were also required to pay all reasonable and necessary costs of the NY Operations Monitor, and those costs were substantial. On March 27, 2017, we entered into a consent order (the 2017 NY Consent Order) with the NY DFS that provided for (1) the termination of the engagement of the NY Operations Monitor on April 14, 2017, (2) a regulatory examination of our servicing business, following which the NY DFS would make a determination on whether the restrictions on our ability to acquire MSRs contained in the 2014 NY Consent Order should be eased and (3) certain reporting and other obligations, including in connection with matters identified in a final report by the NY Operations Monitor. In addition, the 2017 NY Consent Order provides that if the NY DFS concludes that we have materially failed to comply with our obligations under the order or otherwise finds that our servicing operations are materially deficient, the NY DFS may, among other things, and, in addition to its general authority to take regulatory action against us, require us to retain an independent consultant to review and issue recommendations on our servicing operations. The NY Operations Monitor delivered its final report in April 2017 when its engagement terminated. The final report contained certain recommended operational enhancements to which we have responded. Under the 2017 NY Consent Order, we are required to update the NY DFS quarterly on our implementation of the enhancements that we and the NY DFS agreed should be made. We made what we believe to be our final required report to the NY DFS in December 2017. Our updates to date show that all agreed upon enhancements are being implemented. 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 alleged 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. We paid $25.4 million to the CA DBO in borrower restitution, costs, fees and penalties in connection with the 2017 CA Consent Order. The 2017 CA Consent Order does not involve any admission of wrongdoing by OLS, OBS or OFSPL. Additionally, we have certain reporting and other obligations under the 2017 CA Consent Order. We believe that we have completed those obligations of the 2017 CA Consent Order that have already come due, and we have so notified the CA DBO. If the CA DBO were to allege that we failed to comply with these obligations or otherwise were in breach of applicable laws, regulations or licensing requirements, it could take regulatory action against us. Ocwen 2013 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 (the Ocwen National Mortgage Settlement). The settlement contained monetary and non-monetary provisions, including quarterly testing on various metrics relating to servicing standards agreed under the Ocwen National Mortgage Settlement. In September 2017, Ocwen reached an agreement in principle with the Monitoring Committee established under the Ocwen National Mortgage Settlement relating to a previously disclosed potential violation of one of the tested metrics during the first quarter of 2017. To resolve the matter and without agreeing with the Monitoring Committee’s allegations, Ocwen agreed to pay $1.0 million and to provide notices to certain borrowers with active lender placed insurance policies. On September 26, 2017, the court overseeing the Ocwen National Mortgage Settlement issued an order approving the agreement in principle. The parties reached this agreement in principle following the filing of the final report of the Office of Mortgage Settlement Oversight under the Ocwen National Mortgage Settlement. With this final report, the Office of Mortgage Settlement Oversight has concluded all monitoring and testing activities under the Ocwen National Mortgage Settlement. Separately, Ocwen is finalizing an agreement regarding a 2016 letter agreement it entered with certain state signatories to the Ocwen National Mortgage Settlement (the State Government Parties). Per the terms of the 2016 letter agreement, the parties agreed to certain timelines by which Ocwen would implement corrective action plans and return to metric testing. Such timelines were not established previously in the Ocwen National Mortgage Settlement. The State Government Parties alleged that Ocwen had failed to meet certain of these timeframes, and asserted that Ocwen was subject to monetary penalties pursuant to the terms of the letter agreement. Although Ocwen denies these allegations, to resolve the dispute, Ocwen is finalizing an agreement that will include a payment to the State Government Parties. Such payment is not expected to be material to Ocwen’s overall financial condition. If the agreement is not finalized, Ocwen intends to vigorously defend itself against these allegations. The funds paid relating to the resolution of these matters are included in the $174.9 million referred to in Note 24 — Contingencies relating to amounts paid in 2017 in connection with legal and regulatory matters. |
Commitments
Commitments | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments | Note 23 — Commitments Unfunded Lending Commitments We have originated floating-rate reverse mortgage loans under which the borrowers have additional borrowing capacity of $1.4 billion at December 31, 2017 . This additional borrowing capacity is available on a scheduled or unscheduled payment basis. We also had short-term commitments to lend $81.7 million and $14.6 million in connection with our forward and reverse mortgage loan IRLCs, respectively, outstanding at December 31, 2017 . 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 a subsidiary of Altisource Portfolio Solutions, S.A. (Altisource) under long-term agreements, many of which include renewal provisions. 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 currently provides title services to Liberty. Ocwen also has a General Referral Fee agreement with Altisource 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. However, for MSRs that transferred to NRZ in September 2017, as well as those subject to the New RMSR Agreements we entered into in January 2018, we will not be entitled to REO referral commissions. Our servicing system runs on an information technology system that we license from Altisource pursuant to a statement of work under the Technology Products Services Agreements. 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. We are currently in the process of transitioning to a new servicing system and have entered into agreements with certain subsidiaries of Black Knight, Inc. (Black Knight) pursuant to which we plan to transition to Black Knight’s LoanSphere MSP ® servicing system. Ocwen currently anticipates a twenty-four-month implementation timeline for its transition onto the new servicing system. Based on substantive discussions with Altisource prior to entering into our agreements with Black Knight, Ocwen expects to enter into mutually acceptable agreements that provide for Ocwen’s transition to the LoanSphere MSP ® servicing system and the termination of the statement of work for the use of the REALServicing system. 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. Under certain circumstances, we would have recourse under our contractual agreements with Altisource if we were to experience adverse consequences as a result of Altisource’s non-compliance with applicable servicing criteria. 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: 2018 $ 10,135 2019 10,051 2020 7,754 2021 6,568 2022 4,018 Thereafter 932 39,458 Less: Sublease income (492 ) Total minimum lease payments, net $ 38,966 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, 2017 . Rent expense for 2017 , 2016 and 2015 was $17.9 million , $20.0 million and $23.7 million , respectively. |
Contingencies
Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Note 24 — 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 even if the potential loss could be material and adverse to our business, reputation, financial condition and results of operations. 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 by regulatory agencies (discussed further under “Regulatory” below), those brought on behalf of various classes of claimants, and those brought derivatively on behalf of Ocwen against certain current or former officers and directors or others. The majority of these proceedings are based on alleged violations of federal, state and local laws and regulations governing our mortgage servicing and lending activities, including, among others, the Dodd-Frank Act, the Gramm-Leach-Bliley Act, the Fair Debt Collection Practices Act (FDCPA), the Real Estate Settlement Procedures Act, the Truth in Lending Act, 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. Such proceedings include wrongful foreclosure and eviction actions, allegations of wrongdoing in connection with lender-placed insurance arrangements, claims relating to our property preservation activities, claims related to REO management, 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, escrow and other processing operations, claims relating to fees imposed on borrowers relating to payment processing, payment facilitation, or payment convenience, claims related to ancillary products marketed and sold to borrowers, 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. For example, we are a defendant in various class action matters alleging that (1) certain fees we assess on borrowers are marked up improperly in violation of applicable state and federal law; and (2) the solicitation and marketing to borrowers of certain ancillary products was unfair and deceptive. 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. We have accrued 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. Our accrual for probable and estimable legal and regulatory matters, including accrued legal fees, was $51.1 million at December 31, 2017 . We paid $174.9 million during 2017 in connection with legal and regulatory settlements, judgments, penalties and fines, including but not limited to, in connection with putative class actions related to Telephone Consumer Protection Act and consolidated and “opt-out” securities fraud legal matters and the 2017 CA Consent Order. We cannot currently estimate the amount, if any, of reasonably possible losses above amounts that have been recorded at December 31, 2017 . In 2014, plaintiffs filed a putative class action against Ocwen in the United States District Court for the Northern District of Alabama, alleging that Ocwen violated the FDCPA by charging borrowers a convenience fee for making certain loan payments. See McWhorter et al. v. Ocwen Loan Servicing, LLC, 2:15-cv-01831 (N.D. Ala.) . The plaintiffs are seeking statutory damages under the FDCPA, compensatory damages and injunctive relief. The presiding court previously ruled on Ocwen’s motions to dismiss, and Ocwen has answered the operative complaint. Our accrual with respect to this matter is included in the $51.1 million litigation accrual referenced above. We cannot currently estimate the amount, if any, of reasonably possible loss above the amount accrued. Ocwen has been named in putative class actions and individual actions related to its compliance with the Telephone Consumer Protection Act. Generally, plaintiffs in these actions allege that Ocwen knowingly and willfully violated the Telephone Consumer Protection Act by using an automated telephone dialing system to call class members’ cell phones without their consent. On July 28, 2017, Ocwen entered into an agreement in principle to resolve two such putative class actions, which have been consolidated in the United States District Court for the Northern District of Illinois. See Snyder v. Ocwen Loan Servicing, LLC, 1:14-cv-08461-MFK (N.D. Ill.); Beecroft v. Ocwen Loan Servicing, LLC, 1:16-cv-08677-MFK (N.D. Ill.) . Subject to final approval by the court, the settlement will include the establishment of a settlement fund to be distributed to impacted borrowers that submit claims for settlement benefits pursuant to a claims administration process. While Ocwen believes that it has sound legal and factual defenses, Ocwen agreed to this settlement in principle in order to avoid the uncertain outcome of litigation and the additional expense and demands on the time of its senior management that such litigation would involve. The court has preliminarily approved the settlement and we have paid the settlement amount into an escrow account held by the settlement administrator. However, there can be no assurance that the court will finally approve the settlement. In the event the settlement is not finally approved, the litigation would continue, and we would vigorously defend the allegations made against Ocwen. Additional lawsuits may be filed against us in relation to these matters. At this time, Ocwen is unable to predict the outcome of these existing lawsuits or any additional lawsuits that may be filed, the possible loss or range of loss, if any, associated with the resolution of such lawsuits or the potential impact such lawsuits may have on us or our operations. Ocwen intends 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. We have previously disclosed several 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, among other matters. Those lawsuits were consolidated in the United States District Court for the Southern District of Florida in the matter captioned In re Ocwen Financial Corporation Securities Litigation , 9:14-cv-81057-WPD (S.D. Fla.) (such consolidated lawsuit, the Securities Class Action). On December 22, 2017, the Court approved our settlement of this matter. Pursuant to the settlement, we paid $49.0 million (of which $14.0 million was recovered from insurance proceeds) and agreed to issue an aggregate of 2,500,000 shares of our common stock to members of the class and their counsel. Ocwen issued 625,000 of the shares in December 2017, and the remaining 1,875,000 shares in January 2018. In January 2016, Ocwen was named as a defendant in a separate “opt-out” securities fraud action brought on behalf of certain putative shareholders of Ocwen based on similar allegations to those contained in the Securities Class Action. See Broadway Gate Master Fund, Ltd. et al. v. Ocwen Financial Corporation et al., 9:16-cv-80056-WPD (S.D. Fla.) . On November 27, 2017, following a mediated settlement process resulting in all parties’ acceptance of the mediator’s recommendation for settlement, the parties advised the presiding court of the settlement in principle and the court postponed the trial date to allow finalization of the settlement. The parties have finalized definitive settlement documentation (which included an aggregate cash payment by Ocwen of $36.0 million ), and the case has been dismissed with prejudice. While Ocwen believes that it has sound legal and factual defenses, Ocwen agreed to this settlement in order to avoid the uncertain outcome of trial and the additional expense and demands on the time of its senior management that a trial would involve. Additional lawsuits may be filed against us in relation to these matters. At this time, Ocwen is unable to predict the outcome of any additional lawsuits that may be filed, the possible loss or range of loss, if any, associated with the resolution of such lawsuits or the potential impact such lawsuits may have on us or our operations. Ocwen and the other defendants intend to vigorously defend against such 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 previously disclosed litigation matters relating to claims under the False Claims Act. The settlement agreement, which was subsequently approved by the United States, contained no admission of liability or wrongdoing by Ocwen and provided for the payment of $15.0 million to the United States and $15.0 million for the private citizens’ attorneys’ fees and costs. We paid the settlement amount in April 2017. The funds paid relating to the resolution of these matters are included in the $174.9 million referred to above. We have previously disclosed that as a result of the federal and state regulatory actions described below under “Regulatory”, and the impact on our stock price, several putative securities fraud class action lawsuits were filed against Ocwen and certain of its officers that contain allegations in connection with Ocwen’s statements concerning its efforts to satisfy the evolving regulatory environment, and the resources it devoted to regulatory compliance, among other matters. Those lawsuits were consolidated in the United States District Court for the Southern District of Florida in the matter captioned Carvelli v. Ocwen Financial Corporation et al. , 9:14-cv-9:17-cv-80500-RLR (S.D. Fla.). Additional lawsuits may be filed against us in relation to these matters. At this time, Ocwen is unable to predict the outcome of these existing lawsuits or any additional lawsuits that may be filed, the possible loss or range of loss, if any, associated with the resolution of such lawsuits or the potential impact such lawsuits may have on us or our operations. Ocwen and the other defendants intend to vigorously defend against such lawsuits. If our efforts to defend these lawsuits are not successful, our business, financial condition, liquidity and results of operations could be materially and adversely affected. In several recent court actions, mortgage loan sellers against whom repurchase claims have been asserted based on alleged breaches of representations and warranties are defending on various grounds including the expiration of statutes of limitation, lack of notice and opportunity to cure, and vitiation of the obligation to repurchase as a result of foreclosure or charge-off of the loan. We have entered into tolling agreements with respect to our role as servicer for a small number of securitizations 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. Although Ocwen has not yet been sued by an RMBS trustee in response to a notice of default, there is a risk that Ocwen could be replaced as servicer as a result of said notices, that the trustees could take legal action on behalf of the trust certificateholders, or, under certain circumstances, that the RMBS investors who issue notices of default could seek to press their allegations against Ocwen, independent of the trustees. At present, one such group of affiliated RMBS investors sought to direct one trustee to bring suit against Ocwen. The trustee declined to bring suit, and the RMBS investors instead brought suit against Ocwen directly. The court dismissed the RMBS investors’ suit without prejudice on October 4, 2017, and the RMBS investors subsequently filed an amended complaint. On January 23, 2018, the court dismissed the RMBS investors’ amended suit with prejudice. To the extent these RMBS investors attempt to refile their suit, Ocwen intends to defend itself vigorously. We are unable at this time to predict what, if any, actions any trustee will take in response to a notice of default, nor can we predict at this time the potential loss or range of loss, if any, associated with the resolution of any notices of default 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, cease and desist orders, 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. To the extent that an examination, audit or other regulatory engagement results in an alleged failure by us to comply with applicable laws, regulations or licensing requirements, or if allegations are made that we have failed to comply with applicable laws, regulations or licensing requirements or the commitments we have made in connection with our regulatory settlements (whether such allegations are made through administrative actions such as cease and desist orders, through legal proceedings or otherwise) or if other regulatory actions of a similar or different nature are taken in the future against us, this could lead to (i) administrative fines and penalties and litigation, (ii) loss of our licenses and approvals to engage in our servicing and lending businesses, (iii) governmental investigations and enforcement actions, (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 otherwise fund our operations 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. CFPB On April 20, 2017, the CFPB filed a lawsuit in the federal district court for the Southern District of Florida against Ocwen, OMS and OLS alleging violations of federal consumer financial laws relating to our servicing business dating back to 2014. The CFPB’s claims include allegations regarding (1) the adequacy of Ocwen’s servicing system and integrity of Ocwen’s mortgage servicing data, (2) Ocwen’s foreclosure practices and (3) various purported servicer errors with respect to borrower escrow accounts, hazard insurance policies, timely cancellation of private mortgage insurance, handling of customer complaints, and marketing of optional products. The CFPB alleges violations of unfair, deceptive acts or abusive practices, as well as violations of specific laws or regulations. The CFPB does not claim specific monetary damages, although it does seek consumer relief, disgorgement of allegedly improper gains, and civil money penalties. We believe we have factual and legal defenses to the CFPB’s allegations and are vigorously defending ourselves. Prior to the initiation of legal proceedings, we had been engaged with the CFPB in efforts to resolve the matter and recorded $12.5 million as of December 31, 2016 as a result of these discussions. 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. State Licensing, State Attorneys General 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 satisfactorily completing 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 servicing and lending businesses. We also regularly engage with state attorneys general and the CFPB and, on occasion, we engage with other federal agencies, including the Department of Justice and various inspectors general on various matters, including responding 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, and such resolutions could have material and adverse effects on our business, reputation, operations, results of operations and financial condition. On April 20, 2017 and shortly thereafter, mortgage and banking regulatory agencies from 30 states and the District of Columbia took regulatory actions against OLS and certain other Ocwen companies that alleged deficiencies in our compliance with laws and regulations relating to our servicing and lending activities. In general, the regulatory actions took the form of orders styled as “cease and desist orders,” and we use that term to refer to all of the orders for ease of reference; for ease of reference we also include the District of Columbia as a state when we reference states below. All of the cease and desist orders were applicable to OLS, but additional Ocwen entities were named in some orders, including Ocwen Financial Corporation, OMS, Homeward and Liberty. Following the issuance of the orders, we reached agreements with certain regulatory agencies to obtain delays in the enforcement of certain terms or exceptions to certain terms contained in the cease and desist orders. Additionally, we revised our operations based on the terms of the orders while we sought to negotiate resolutions. We have entered into agreements with 28 states plus the District of Columbia to resolve these regulatory actions. These agreements generally contain the following key terms (the Multi-State Common Settlement Terms): • Ocwen will not acquire any new residential mortgage servicing rights until April 30, 2018. • Ocwen will develop a plan of action and milestones regarding its transition from the servicing system we currently use, REALServicing ® , to an alternate servicing system and, with certain exceptions, will not board any new loans onto the REALServicing system. • In the event that Ocwen chooses to merge with or acquire an unaffiliated company or its assets in order to effectuate a transfer of loans from the REALServicing system, Ocwen must give the applicable regulatory agency prior notice to the signing of any final agreement and the opportunity to object (which prior notice requirement is independent of, and in addition to, applicable state law notice and consent requirements relating to change of control transactions). If no objection is received, the provisions of the first bullet point above shall not prohibit the transaction, or limit the transfer of loans from the REALServicing system onto the merged or acquired company’s alternate servicing system. In the event that an unaffiliated company merges with or acquires Ocwen or Ocwen’s assets, the provisions of the first bullet point above shall not prohibit the transaction, or limit the transfer of loans from the REALServicing system onto the merging or acquiring company’s alternate servicing system. • Ocwen will engage a third-party auditor to perform an analysis with respect to our compliance with certain federal and state laws relating to escrow by testing approximately 9,000 loan files relating to residential real property in various states, and Ocwen must develop corrective action plans for any errors that are identified by the third-party auditor. • Ocwen will develop and submit for review a plan to enhance our consumer complaint handling processes. • Ocwen will provide financial condition reporting on a confidential basis as part of each state’s supervisory framework through September 2020. In addition to the terms described above, Ocwen entered into settlements with certain states on different or additional terms, which include making certain additional communications with and for borrowers, and certain review and reporting obligations. In addition, Ocwen agreed with the Connecticut regulatory agency to pay certain amounts only in the event we fail to comply with certain requirements under our agreement with Connecticut. In its agreement with the Maryland regulatory agency, Ocwen agreed to complete an independent management assessment and enterprise risk assessment, to certain other review and reporting requirements, and to a prohibition, with certain de minimis exceptions, on repurchases of our stock until December 7, 2018. Ocwen also agreed to make certain payments to Maryland, to provide remediation to certain borrowers in the form of cash payments or credits and to pay certain amounts only in the event we fail to comply with certain requirements under our agreement with Maryland. Our accrual with respect to this matter is included in the $51.1 million litigation and regulatory matters accrual referenced above. We will also incur costs complying with the terms of these settlements, including in connection with the escrow analysis and transition to a new servicing system. In addition, in the event errors were to be uncovered during the escrow analysis, we could incur costs remedying such errors or other actions could be taken against us by regulators or others. We continue to seek timely resolutions with the remaining two state regulatory agencies, one of which took action in conjunction with its state Attorney General, as discussed below. If Ocwen is successful in reaching such resolutions, they may contain some or all of the Multi-State Common Settlement Terms and may also contain additional terms, including potentially monetary fines or penalties or additional restrictions on our business. There can be no assurance that Ocwen will be able to reach resolutions with the remaining regulatory agencies. It is possible that the outcome of the remaining 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. Certain of the state regulators’ cease and desist orders reference a confidential supervisory memorandum of understanding (MOU) that we entered into with the Multistate Mortgage Committee (MMC), a multistate coalition of various mortgage banking regulators, and six states relating to a servicing examination from 2013 to 2015. The MOU contained various provisions relating to servicing practices and safety and soundness aspects of the regulatory review, 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, and continues to provide certain reports and other information pursuant to the MOU. In April 2017, and concurrent with the issuance of the cease and desist orders and the filing of the CFPB lawsuit discussed above, two state attorneys general took actions against us relating to our servicing practices. The Florida Attorney General, together with the Florida Office of Financial Regulation, filed a lawsuit in the federal district court for the Southern District of Florida against Ocwen, OMS and OLS alleging violations of federal and state consumer financial laws relating to our servicing business. These claims are similar to the claims made by the CFPB. The Florida lawsuit seeks injunctive and equitable relief, costs, and civil money penalties in excess of $10,000 per confirmed violation of the applicable statute. As previously disclosed, the Massachusetts Attorney General had sent us a civil investigative demand requesting information relating to various aspects of our servicing practices, including lender-placed insurance and property preservation fees. Subsequently, the Massachusetts Attorney General filed a lawsuit against OLS in the Superior Court for the Commonwealth of Massachusetts alleging violations of state consumer financial laws relating to our servicing business, including with respect to our activities relating to lender-placed insurance and property preservation fees. The Massachusetts Attorney General’s lawsuit seeks injunctive and equitable relief, costs, and civil money penalties of $5,000 per confirmed violation of the applicable statute. While we endeavor to negotiate appropriate resolutions in these two matters, we are vigorously defending ourselves, as we believe we have valid defenses to the claims made in both lawsuits. The outcome of these two lawsuits, whether through negotiated settlements, court rulings or otherwise, could potentially involve monetary fines or penalties or additional restrictions on our business and 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. On occasion, we engage with agencies of the federal government on various matters. For example, OLS received a letter from the Department of Justice, Civil Rights Division, notifying OLS that the Department of Justice had initiated a general investigation into OLS’s policies and procedures to determine whether violations of the Servicemembers Civil Relief Act by OLS might exist. The letter stated that at this point, the investigation is preliminary in nature and the Department of Justice has not made any determination as to whether OLS violated the act. In addition, Ocwen was named as a defendant in a HUD administrative complaint filed by a non-profit organization alleging discrimination in the manner in which the company maintains REO properties in minority communities. In February 2018, this matter was administratively closed; and similar claims were filed in federal court. We believe these claims are without merit and intend to vigorously defend ourselves. I |
Quarterly Results of Operations
Quarterly Results of Operations (Unaudited) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Results of Operations (Unaudited) | Note 25 — Quarterly Results of Operations (Unaudited) Quarters Ended December 31, September 30, June 30, March 31, Revenue $ 276,770 $ 284,642 $ 311,300 $ 321,864 Expenses (1) (2) 168,303 273,479 280,480 276,383 Other expense, net (1) (153,781 ) (37,716 ) (72,428 ) (75,979 ) Loss before income taxes (45,314 ) (26,553 ) (41,608 ) (30,498 ) Income tax expense (benefit) (51 ) (20,418 ) 2,828 2,125 Net loss (45,263 ) (6,135 ) (44,436 ) (32,623 ) Net loss (income) attributable to non-controlling interests 780 (117 ) (71 ) (101 ) Net loss attributable to Ocwen stockholders $ (44,483 ) $ (6,252 ) $ (44,507 ) $ (32,724 ) Loss per share attributable to Ocwen stockholders Basic $ (0.34 ) $ (0.05 ) $ (0.36 ) $ (0.26 ) Diluted $ (0.34 ) $ (0.05 ) $ (0.36 ) $ (0.26 ) (1) A benchmarking valuation assumption update related to our non-Agency MSRs carried at fair value resulted in an $84.4 million increase in value and reduction in related losses (reported in Servicing and origination expense) during the quarter ended December 31, 2017. This reflects an upward trend in market pricing on non-Agency MSRs similar in profile to Ocwen’s portfolio. This valuation assumption update also resulted in a largely offsetting increase of $73.4 million in the value of the NRZ financing liability which was recognized as interest expense. (2) Includes the recovery of $28.5 million of losses during the quarter ended December 31, 2017 related to a settlement of outstanding claims that arose from indemnification obligations in connection with our acquisition of MSRs and related servicing advances in 2013. We had recognized such losses on advances in prior periods and recorded the 2017 recovery in Servicing and origination expense. 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 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 stockholders $ (10,444 ) $ 9,391 $ (87,378 ) $ (111,331 ) Earnings (loss) per share attributable to Ocwen stockholders Basic $ (0.08 ) $ 0.08 $ (0.71 ) $ (0.90 ) Diluted $ (0.08 ) $ 0.08 $ (0.71 ) $ (0.90 ) |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 26 — Subsequent Events MSR Fair Value Election Effective January 1, 2018, we elected fair value accounting for our MSRs previously accounted for using the amortization method, which included Agency MSRs and government-insured MSRs. This irrevocable election applies to all subsequently acquired or originated servicing assets and liabilities that have characteristics consistent with each of these classes. We recorded a cumulative-effect adjustment of $82.0 million (before income taxes) to retained earnings as of January 1, 2018 to reflect the excess of the fair value of the Agency MSRs over their carrying amount. The government-insured MSRs were impaired by $24.8 million at December 31, 2017; therefore, these MSRs are already effectively carried at fair value. We will subsequently measure these MSRs at fair value at each reporting date and report changes in fair value in earnings in the period in which the changes occur. At December 31, 2017, the UPB and net carrying value of Agency MSRs for which the fair value election was made was $24.0 billion and $203.7 million , respectively. At December 31, 2017, the UPB and net carrying value of government-insured MSRs for which the fair value election was made was $16.9 billion and $133.2 million , respectively. Pending Acquisition of PHH On February 27, 2018, we entered into an Agreement and Plan of Merger, dated as of February 27, 2018 (the Merger Agreement), with PHH Corporation, a Maryland corporation (PHH), and POMS Corp, a Maryland corporation and a wholly owned subsidiary of Ocwen (Merger Sub). PHH is a leading non-bank servicer with established servicing and origination recapture capabilities. Pursuant to the Merger Agreement, Merger Sub will merge with and into PHH (the Merger), with PHH surviving. As a result of the Merger, PHH will become a wholly owned subsidiary of Ocwen. The merger consideration to be paid in the acquisition will be approximately $360.0 million and is expected to be funded by a combination of PHH’s cash on hand and Ocwen’s cash on hand. The portion to be funded by Ocwen’s cash on hand is currently estimated to be approximately $74.0 million , including payment of certain transaction expenses at closing, based on financial information provided by PHH, internal analysis and using an assumed closing date of June 30, 2018. We also expect cash payments for integration and other transaction-related costs following the closing of the transaction. Upon the closing of the transaction, Ocwen will also assume debt (at the subsidiary level) in the form of PHH’s outstanding senior unsecured notes. The aggregate principal amount of these notes is approximately $119.0 million , representing approximately $97.0 million of PHH’s 7.375% Senior Notes Due 2019 and approximately $22.0 million of PHH’s 6.375% Senior Notes Due 2021. This transaction is expected to close in the second half of 2018. Under the terms and subject to the conditions of the Merger Agreement, at the effective time of the Merger, each outstanding share of PHH common stock, par value $0.01 per share, will be converted into the right to receive $11.00 in cash. |
Organization, Business Enviro35
Organization, Business Environment, Basis of Presentation and Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
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 servicing activities on behalf of other servicers (subservicing), the largest being New Residential Investment Corp. (NRZ), and investors (primary and master servicing), 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 a subservicer or primary servicer, we may be required to make certain property tax and insurance premium payments, default and property maintenance payments, as well as advances of principal and interest payments to mortgage loan investors before collecting them from borrowers. Most, but not all, of our subservicing agreements provide for us to be reimbursed for any such advances by the owner of the servicing rights. Advances made by us as primary servicer are recovered from the borrower or the mortgage loan investor. As master servicer, we collect mortgage payments from primary servicers and distribute the funds to investors in the mortgage-backed securities. To the extent the primary servicer does not advance the scheduled principal and interest, as master servicer we are responsible for advancing the shortfall subject to certain limitations. We originate, 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 are an approved issuer of 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 had a total of approximately 7,600 employees at December 31, 2017 of which approximately 5,000 were located in India and approximately 600 were based in the Philippines. Our operations in India and the Philippines primarily provide internal support services, principally to our loan servicing business and our corporate functions. Of our foreign-based employees, more than 80% were engaged in supporting our loan servicing operations as of December 31, 2017 . |
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 consolidated 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 adoption on January 1, 2017 of FASB Accounting Standards Update (ASU) 2016-09, Compensation - Stock Compensation: Improvements to Accounting for Employee Share-Based Payments , excess tax benefits have been classified along with other income tax cash flows as an operating activity in our consolidated statements of cash flows, rather than being separated from other income tax cash flows and classified as a financing activity. Additionally, cash paid by Ocwen when directly withholding shares for tax-withholding purposes has been classified as a financing activity in our consolidated statements of cash flows, rather than being classified as an operating activity. Certain amounts in the Consolidated Statements of Cash Flows for 2016 and 2015 have been reclassified to conform to the current year presentation as follows: • Within the operating activities section, we reclassified Amortization of debt discount to Other, net and Gain on trading securities from Other, net to a new line. • Within the financing activities section of the consolidated statements of cash flows, we reclassified Repayments of HMBS-related borrowings from Repayments of mortgage loan warehouse facilities and other secured borrowings to a new separate line item. These reclassifications had no impact on our consolidated cash flows from operating, investing or financing activities. Certain amounts in the consolidated balance sheet at December 31, 2016 have been reclassified to conform to the current year presentation as follows: • Within the total assets section, we reclassified Deferred tax assets, net to Other assets. • Within the total liabilities section, we reclassified HMBS-related borrowings from Financing liabilities to a new separate line item. |
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 (MRS) | Mortgage Servicing Rights (MSRs) MSRs are assets representing our right to service portfolios of mortgage loans. We retain MSRs on originated loans when they are sold in the secondary market. The UPB of the loans underlying the MSRs is not included on our balance sheet. For servicing retained in connection with the securitization of reverse mortgage loans accounted for as secured financings, we do not recognize an MSR. All newly acquired or retained MSRs are initially measured at fair value. We recognize a servicing liability for portfolio contracts that are not expected to compensate us adequately for performing the servicing. For this purpose, we define contracts as Agency, 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. We identify classes of servicing assets and servicing liabilities based on the availability of market inputs used in determining their fair value and our methods for managing their risks. 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. Any fair value election is irrevocable. Once a 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. At the start of any fiscal year, a company may elect to transfer servicing assets and servicing liabilities from a class measured using the amortization method to a class measured at fair value. Furthermore, if a new class is created, and no servicing assets or servicing liabilities that would belong to that class have previously been recognized, electing to subsequently measure that new class at fair value is permitted at the date those servicing assets or servicing liabilities are initially recognized. 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). 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 stratify servicing assets or liabilities based upon one or more of the predominant risk characteristics of the underlying portfolios and assess servicing assets or liabilities for impairment or increased obligation by determining the difference, if any, between the carrying amount and estimated fair value at each reporting date. We recognize any impairment, or increased obligation, through a valuation allowance which is adjusted to reflect subsequent changes in the measurement of impairment and reported in earnings in the period in which the changes occur. We do not recognize fair value in excess of the carrying amount of servicing assets for any stratum. For servicing assets or liabilities that we account for using the fair value measurement method (fair value election), 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 and subservicing mortgage loans. We collect servicing and subservicing 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 and subservicing revenue. We recognize servicing and subservicing 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, servicing and subservicing agreements may 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 and subservicing contract. Each servicing and subservicing contract is associated with specific loans, identified as a pool. When we make an advance on a loan under each servicing or subservicing contract, we are entitled to recover that advance either from the borrower, for reinstated and performing loans, or from guarantors (GSEs), insurers (FHA/VA) and investors, for modified and liquidated loans. Most of our servicing and subservicing 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 or subservicing 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 forward and reverse mortgage loans that we 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. We account for any 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. 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. We report any gain or loss on the transfer of 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. 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 Newly originated reverse residential mortgage loans that are insured by the FHA and pooled into Ginnie Mae guaranteed securities that we sell into the secondary market with servicing rights retained are classified as loans held for investment. We have elected to measure these loans at fair value. 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, 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. 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. 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. |
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 certain servicing fees relating to 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 transaction is accounted for consistent with a secured financing. In certain situations, we may have continuing involvement in transferred loans through our retained servicing. Transactions involving retained servicing 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 connection with the Ginnie Mae early buyout 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. 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. |
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 U.S. 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. In December 2017, the Securities and Exchange Commission Staff issued Staff Accounting Bulletin (SAB) 118, which provides guidance on accounting for the income tax effects of the Tax Cuts and Jobs Act (Tax Act) signed into law by the President of the United States on December 22, 2017. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under Accounting Standards Codification (ASC) 740, Income Taxes . In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Tax Act for which the accounting under ASC 740 is complete. To the extent that a company's accounting for certain income tax effects of the Tax Act is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements and should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the Tax Act. We adopted the guidance of SAB 118 as of December 31, 2017. See Note 18 — Income Taxes for additional information on the Tax Act and the impact on our consolidated financial statements. |
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. |
Going Concern | Going Concern In accordance with FASB 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. Our financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The assessment of our ability to meet our future obligations is inherently judgmental, subjective and susceptible to change. Our assessment considers information including, but not limited to, our financial condition, liquidity sources, obligations coming due within one year after the financial statements are issued, funds necessary to maintain current operations and any negative financial trends or other indicators of possible financial difficulty, including adverse regulatory or legal proceedings or rating agency decisions and management’s plans to address these matters. We considered both qualitative and quantitative factors as part of our assessment that were known or reasonably knowable at December 31, 2017, and concluded that when considering management’s plans to mitigate, conditions and events considered in the aggregate do not indicate that it is probable that Ocwen will be unable to meet its obligations during the evaluation period. |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards Revenue from Contracts with Customers (ASU 2014-09) This ASU clarifies the principles for recognizing revenue and creates a common revenue standard. Under this ASU, an entity will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. An entity will recognize revenue through the following five-step process: Step 1: Identify the contract(s) with a customer. Step 2: Identify the performance obligations in the contract. Step 3: Determine the transaction price. Step 4: Allocate the transaction price to the performance obligations in the contract. Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation. The guidance in this standard does not apply to financial instruments and other contractual rights or obligations within the scope of ASC 860, Transfers and Servicing , among other ASC topics . As a result, our adoption of this standard on a modified retrospective basis on January 1, 2018 will not have a material impact on our consolidated financial statements. Financial Instruments: Recognition and Measurement of Financial Assets and Financial Liabilities (ASU 2016-01) This ASU provides users with more useful information regarding the recognition, measurement, presentation, and disclosure of financial instruments and also improves 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. Our adoption of this standard on January 1, 2018 will not 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) This ASU requires an equity method investor add the cost of acquiring an additional interest in an 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. Our adoption of this standard on January 1, 2017 did not have a material impact on our consolidated financial statements. Compensation - Stock Compensation: Improvements to Employee Shared-Based Payment Accounting (ASU 2016-09) This ASU requires excess tax benefits associated with employee share-based payments to be recognized through the income statement, regardless of whether the benefit reduces income taxes payable in the current period. Concurrent with our adoption of ASU 2016-09, we made an accounting policy election to account for forfeitures when they occur, rather than estimating the number of awards that are expected to vest. Amendments requiring recognition of excess tax benefits in the income statement were adopted prospectively. Amendments related to the timing of when excess tax benefits are recognized and accounting for forfeitures were adopted using a modified retrospective transition method by means of cumulative-effect adjustments to equity as of January 1, 2017. For the timing of the recognition of excess tax benefits, the cumulative-effect adjustment was to recognize an increase in retained earnings of $5.0 million and a deferred tax asset for the same amount. However, because we have determined that our U.S. and USVI deferred tax assets are not considered to be more likely than not realizable, we established a full valuation allowance on the deferred tax asset through a reduction in retained earnings. For the change in accounting for forfeitures, we recognized a cumulative-effect adjustment through a reduction of $0.3 million in retained earnings and an increase in additional paid-in capital for the same amount. We also recognized the tax effect of this adjustment through an increase in retained earnings of $0.1 million and a deferred tax asset for the same amount. However, we also fully reserved the resulting deferred tax asset as an offsetting reduction in retained earnings. Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments (ASU 2016-15) This ASU clarifies 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). Our adoption of this standard on January 1, 2018 will not have a material impact on our consolidated financial statements. Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory (ASU 2016-16) This ASU requires an entity to recognize the income tax consequences of intra-entity transfers of assets other than inventory when the transfer occurs. Previously, recognition of current and deferred income taxes for an intra-entity transfer was prohibited until the asset had been sold to an outside party. We adopted this standard on a modified retrospective basis on January 1, 2018 by recording a cumulative-effect reduction of $5.6 million to retained earnings. Consolidation: Interests Held through Related Parties That Are under Common Control (ASU 2016-17) This ASU amends 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. 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. Our adoption of this standard on January 1, 2017 did not have a material impact on our consolidated financial statements. Statement of Cash Flows: Restricted Cash (ASU 2016-18) This ASU clarifies 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. Our adoption of this standard on January 1, 2018 will not have a material impact on our consolidated financial statements. Business Combinations: Clarifying the Definition of a Business (ASU 2017-01) This ASU clarifies 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. Our adoption of this standard on January 1, 2018 will not have a material impact on our consolidated financial statements. Compensation: Stock Compensation (ASU 2017-09) This ASU reduces both diversity in practice as well as cost and complexity when applying the modification accounting guidance in FASB ASC Topic 718, Compensation -- Stock Compensation , to a change to the terms or conditions of a share-based payment award. Our adoption of this standard on January 1, 2018 will not have a material impact on our consolidated financial statements. Accounting Standards Issued but Not Yet Adopted Leases (ASU 2016-02) This ASU will require a lessee 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 of the amount, timing and uncertainty of cash flows arising from leases will be required. This standard will be effective for us on January 1, 2019, with early application permitted. We do not anticipate that our adoption of this standard will have a material impact on our consolidated financial statements. Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments (ASU 2016-13) This ASU will require timelier recording of credit losses on loans and other financial instruments. 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. 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 related to the 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. Receivables: Nonrefundable Fees and Other Costs (ASU 2017-08) This ASU amends the amortization period for certain purchased callable debt securities held at a premium. This standard shortens the amortization period for the premium to the earliest call date, rather than generally amortizing the premium as an adjustment of yield over the contractual life of the instrument. This standard will be effective for us on January 1, 2019. We do not anticipate that our adoption of this standard will have a material impact on our consolidated financial statements. Income Statement - Reporting Comprehensive Income: Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (ASU 2018-02) This ASU provides entities with an option to reclassify stranded tax effects within accumulated other comprehensive income to retained earnings in each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act (or portion thereof) is recorded. This standard will be effective for us on January 1, 2019. We do not anticipate that our adoption of this standard will have a material impact on our consolidated financial statements. |
Organization, Business Enviro36
Organization, Business Environment, Basis of Presentation and Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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 37
Securitizations and Variable Interests Entities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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 of loans accounted for as sales that were outstanding: Years Ended December 31, 2017 2016 2015 Proceeds received from securitizations $ 3,256,625 $ 5,197,071 $ 4,970,454 Servicing fees collected 41,509 14,616 29,239 Purchases of previously transferred assets, net of claims reimbursed (5,948 ) (1,271 ) (2,863 ) $ 3,292,186 $ 5,210,416 $ 4,996,830 |
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. December 31, 2017 2016 Carrying value of assets MSRs, at amortized cost $ 97,832 $ 94,492 MSRs, at fair value 227 233 Advances and match funded advances 57,636 37,336 UPB of loans transferred 12,077,635 10,485,697 Maximum exposure to loss $ 12,233,330 $ 10,617,758 |
Fair Value (Tables)
Fair Value (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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: December 31, 2017 2016 Level Carrying Value Fair Value Carrying Value Fair Value Financial assets: Loans held for sale: Loans held for sale, at fair value (a) 2 $ 214,262 $ 214,262 $ 284,632 $ 284,632 Loans held for sale, at lower of cost or fair value (b) 3 24,096 24,096 29,374 29,374 Total Loans held for sale $ 238,358 $ 238,358 $ 314,006 $ 314,006 Loans held for investment (a) 3 $ 4,715,831 $ 4,715,831 $ 3,565,716 $ 3,565,716 Advances (including match funded) (c) 3 1,356,393 1,356,393 1,709,846 1,709,846 Automotive dealer financing notes (including match funded) (c) 3 32,757 32,590 33,224 33,147 Receivables, net (c) 3 199,529 199,529 265,720 265,720 Mortgage-backed securities, at fair value (a) 3 1,592 1,592 8,342 8,342 U.S. Treasury notes (a) 1 1,567 1,567 2,078 2,078 Financial liabilities: Match funded liabilities (c) 3 $ 998,618 $ 992,698 $ 1,280,997 $ 1,275,059 Financing liabilities: HMBS-related borrowings, at fair value (a) 3 $ 4,601,556 $ 4,601,556 $ 3,433,781 $ 3,433,781 Financing liability - MSRs pledged, at fair value (a) 3 508,291 508,291 477,707 477,707 Other (c) 3 85,227 65,202 101,321 81,805 Total Financing liabilities $ 5,195,074 $ 5,175,049 $ 4,012,809 $ 3,993,293 Other secured borrowings: Senior secured term loan (c) (d) 2 $ 290,068 $ 299,741 $ 323,514 $ 327,674 Other (c) 3 255,782 255,782 355,029 355,029 Total Other secured borrowings $ 545,850 $ 555,523 $ 678,543 $ 682,703 Senior notes: Senior unsecured notes (c) (d) 2 $ 3,122 $ 2,872 $ 3,094 $ 3,048 Senior secured notes (c) (d) 2 344,216 355,550 343,695 352,255 Total Senior notes $ 347,338 $ 358,422 $ 346,789 $ 355,303 Derivative financial instrument assets (liabilities), at fair value (a): Interest rate lock commitments 2 $ 3,283 $ 3,283 $ 6,507 $ 6,507 Forward mortgage-backed securities 1 (545 ) (545 ) (614 ) (614 ) Interest rate caps 3 2,056 2,056 1,836 1,836 Mortgage servicing rights: Mortgage servicing rights, at fair value (a) 3 $ 671,962 $ 671,962 $ 679,256 $ 679,256 Mortgage servicing rights, at amortized cost (c) (e) 3 336,882 418,745 363,722 467,911 Total Mortgage servicing rights $ 1,008,844 $ 1,090,707 $ 1,042,978 $ 1,147,167 (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 12 — Borrowings for additional information . (e) Balances include the 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 $24.8 million , the carrying value of the impaired stratum at December 31, 2017 was $158.0 million . At December 31, 2016 , the carrying value of this stratum was $172.9 million before applying the valuation allowance of $28.2 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 Derivatives MSRs Total Year Ended December 31, 2017 Beginning balance $ 3,565,716 $ (3,433,781 ) $ 8,342 $ (477,707 ) $ 1,836 $ 679,256 $ 343,662 Purchases, issuances, sales and settlements Purchases — — — — 655 — 655 Issuances (1) 1,277,615 (1,281,543 ) — (54,601 ) — (2,214 ) (60,743 ) Sales — — — — — (540 ) (540 ) Transfers to Loans held for sale - Fair value (3,803 ) — — — — — (3,803 ) Transfers to Receivables (3,583 ) — — — — — (3,583 ) Transfers to Other assets (1,929 ) — — — — — (1,929 ) Settlements (444,388 ) 418,503 — 59,190 (445 ) — 32,860 823,912 (863,040 ) — 4,589 210 (2,754 ) (37,083 ) Total realized and unrealized gains (losses) (2) Included in earnings (1): Change in fair value 326,203 (304,735 ) (6,750 ) (41,282 ) 10 (4,540 ) (31,094 ) Calls and other — — — 6,109 — — 6,109 Included in Other comprehensive income — — — — — — — 326,203 (304,735 ) (6,750 ) (35,173 ) 10 (4,540 ) (24,985 ) Transfers in and / or out of Level 3 — — — — — — — Ending balance $ 4,715,831 $ (4,601,556 ) $ 1,592 $ (508,291 ) $ 2,056 $ 671,962 $ 281,594 Loans Held for Investment - Reverse Mortgages HMBS-Related Borrowings Mortgage-Backed Securities Financing Liability - MSRs Pledged 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 (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 (losses) (2) 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 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 (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 (losses) 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 (1) On September 1, 2017, Ocwen transferred MSRs with UPB of $15.9 billion to NRZ and received a lump-sum payment of $54.6 million . The fair value of the portion of the Financing Liability - MSRs Pledged recognized in connection with the transfer declined $42.0 million in 2017 primarily due to $37.6 million recognized at the time of the initial transfer of the MSRs, which had a contractual servicing fee rate of 33.4 bps as compared to the weighted average of 47.1 bps for the loan characteristics used to determine the lump sum payment. See Note 8 — Rights to MSRs . (2) Total gains (losses) attributable to derivative financial instruments still held at December 31, 2017 and 2016 were $0.1 million, $0.3 million and $(1.0) million for 2017 , 2016 and 2015 , respectively. Total losses for 2017 , 2016 and 2015 attributable to MSRs still held at December 31, 2017 , 2016 and 2015 were $4.5 million , $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 | December 31, Significant valuation assumptions 2017 2016 Life in years Range 4.4 to 8.1 5.5 to 8.7 Weighted average 6.4 6.1 Conditional repayment rate Range 5.4% to 51.9% 5.2% to 53.8% Weighted average 13.1 % 20.9 % Discount rate 3.2 % 3.3 % |
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 | December 31, Significant valuation assumptions 2017 2016 Weighted average prepayment speed 8.8 % 8.9 % Weighted average delinquency rate 10.9 % 11.1 % 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 9.2 % 8.9 % Weighted average cost to service (in dollars) $ 108 $ 108 |
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 | December 31, Significant valuation assumptions 2017 2016 Agency Non-Agency Agency Non-Agency Weighted average prepayment speed 8.1 % 16.6 % 8.4 % 16.5 % Weighted average delinquency rate 1.0 % 28.5 % 1.0 % 29.3 % Advance financing cost 5-year swap 5-yr swap plus 2.75% 5-year swap 1-Month LIBOR (1ML) plus 3.5% Interest rate for computing float earnings 5-year swap 5-yr swap minus 0.50% 5-year swap 1ML Weighted average discount rate 9.0 % 13.0 % 9.0 % 14.9 % Weighted average cost to service (in dollars) $ 64 $ 305 $ 64 $ 307 |
Automotive Dealer Financing Notes [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Schedule of Significant Assumptions used in Valuation | December 31, Significant valuation assumptions 2017 2016 Weighted average life in months 2.2 2.7 Average note rate 8.5 % 8.3 % Discount rate 10.0 % 10.0 % Loan loss rate 21.5 % 11.3 % |
HMBS - Related Borrowings [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Schedule of Significant Assumptions used in Valuation | December 31, Significant valuation assumptions 2017 2016 Life in years Range 4.4 to 8.1 4.5 to 8.7 Weighted average 6.4 5.1 Conditional repayment rate Range 5.4% to 51.9% 5.2% to 53.8% Weighted average 13.1 % 20.9 % Discount rate 3.1 % 2.7 % |
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 | December 31, Significant valuation assumptions 2017 2016 Weighted average prepayment speed 17.0 % 17.0 % Weighted average delinquency rate 28.9 % 29.8 % Advance financing cost 5-year swap plus 2.75% 1ML plus 3.5% Interest rate for computing float earnings 5-year swap minus 0.50% 1ML Weighted average discount rate 13.7 % 14.9 % Weighted average cost to service (in dollars) $ 311 $ 313 |
Loans Held for Sale (Tables)
Loans Held for Sale (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
Summary of Activity in Balance of Loans Held for Sale, at Fair Value | Years Ended December 31, Loans Held for Sale - Fair Value 2017 2016 2015 Beginning balance $ 284,632 $ 309,054 $ 401,120 Originations and purchases 2,678,372 4,211,871 3,944,509 Proceeds from sales (2,785,422 ) (4,236,158 ) (4,061,217 ) Principal collections (4,867 ) (11,620 ) (8,647 ) Transfers from Loans held for investment 3,803 — — Transfers from Loans held for sale - Lower of cost or fair value — 3,266 1,200 Gain on sale of loans 35,429 13,421 42,053 Increase (decrease) in fair value of loans 151 (7,030 ) (9,066 ) Other 2,164 1,828 (898 ) Ending balance (1) $ 214,262 $ 284,632 $ 309,054 (1) At December 31, 2017 , 2016 and 2015 , the balances include $5.0 million , $4.9 million and $11.9 million , respectively, of fair value adjustments. |
Summary of Activity in Balance of Loans Held for Sale, at Lower of Cost or Fair Value | Years Ended December 31, Loans Held for Sale - Lower of Cost or Fair Value 2017 2016 2015 Beginning balance $ 29,374 $ 104,992 $ 87,492 Purchases 1,016,791 1,878,561 1,056,172 Proceeds from sales (861,569 ) (1,699,427 ) (1,001,939 ) Principal collections (10,207 ) (22,607 ) (53,400 ) Transfers to Receivables, net (171,797 ) (256,336 ) (53,468 ) Transfers to Other assets (875 ) (7,675 ) (18,594 ) Transfers to Loans held for sale - Fair value — (3,266 ) (1,200 ) Gain on sale of loans 11,683 24,565 43,449 Decrease in valuation allowance 2,746 4,594 35,018 Other 7,950 5,973 11,462 Ending balance (1) $ 24,096 $ 29,374 $ 104,992 (1) At December 31, 2017 , 2016 and 2015 , the balances include $19.6 million , $24.8 million and $85.9 million , respectively, of loans that we were required to repurchase from Ginnie Mae guaranteed securitizations as part of our servicing obligations. Repurchased loans are modified or otherwise remediated through loss mitigation activities or are reclassified to receivables. |
Summary of Changes in Valuation Allowance of Loans Held for Sale | The changes in the valuation allowance are as follows: Years Ended December 31, 2017 2016 2015 Beginning balance $ 10,064 $ 14,658 $ 49,676 Provision 3,109 3,599 (400 ) Transfer from Liability for indemnification obligations (Other liabilities) 3,246 2,368 1,180 Sales of loans (9,415 ) (10,208 ) (37,776 ) Other 314 (353 ) 1,978 Ending balance $ 7,318 $ 10,064 $ 14,658 |
Summary of Activity in Gain on Loans Held for Sale, Net | Years Ended December 31, Gains on Loans Held for Sale, Net 2017 2016 2015 Gain on sales of loans, net MSRs retained on transfers of forward loans $ 20,900 $ 36,049 $ 35,968 Fair value gains related to transfers of reverse mortgage loans, net 50,194 24,742 31,857 Gain on sale of repurchased Ginnie Mae loans 11,683 24,565 22,960 Other, net 31,470 7,952 62,185 114,247 93,308 152,970 Change in fair value of IRLCs (3,089 ) (55 ) 14 Change in fair value of loans held for sale 1,475 4,595 (8,525 ) Loss on economic hedge instruments (8,529 ) (6,592 ) (8,675 ) Other (702 ) (865 ) (815 ) $ 103,402 $ 90,391 $ 134,969 |
Advances (Tables)
Advances (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Advances [Abstract] | |
Schedule of Advance Payments by Financial Institution on Foreclosed Properties | December 31, 2017 2016 Principal and interest $ 20,207 $ 31,334 Taxes and insurance 144,454 170,131 Foreclosures, bankruptcy and other 63,597 94,369 228,258 295,834 Allowance for losses (16,465 ) (37,952 ) $ 211,793 $ 257,882 |
Schedule of Activity in Advances | The following table summarizes the activity in net advances: Years Ended December 31, 2017 2016 2015 Beginning balance $ 257,882 $ 444,298 $ 893,914 Sales of advances (1) (444 ) (24,631 ) (253,335 ) Collections of advances, charge-offs and other, net (67,132 ) (165,734 ) (224,414 ) Net decrease in allowance for losses 21,487 3,949 28,133 Ending balance $ 211,793 $ 257,882 $ 444,298 (1) 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. |
Schedule of Change in Allowance for Losses | The changes in the allowance for losses are as follows: Years Ended December 31, 2017 2016 2015 Beginning balance $ 37,952 $ 41,901 $ 70,034 Provision 21,429 (2,043 ) 61,445 Net charge-offs and other (42,916 ) (1,906 ) (89,578 ) Ending balance $ 16,465 $ 37,952 $ 41,901 |
Match Funded Assets (Tables)
Match Funded Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Transfers and Servicing [Abstract] | |
Schedule of Match Funded Advances on Residential Loans | December 31, 2017 2016 Advances: Principal and interest $ 523,248 $ 711,272 Taxes and insurance 439,857 530,946 Foreclosures, bankruptcy, real estate and other 181,495 209,746 1,144,600 1,451,964 Automotive dealer financing notes (1) 35,392 — Allowance for losses (1) (2,635 ) — 32,757 — $ 1,177,357 $ 1,451,964 (1) Automotive dealer financing notes which have not been pledged to our automotive dealer loan financing facility are reported as Other assets. See Note 11 — Other Assets . |
Schedule of Activity In Match Funded Advances | The following table summarizes the activity in match funded assets: Years Ended December 31, 2017 2016 2015 Advances Automotive Dealer Financing Notes Advances Advances Beginning balance $ 1,451,964 $ — $ 1,706,768 $ 2,409,442 Transfer from Other assets — 25,180 — — Sales (691 ) — (8,923 ) (308,990 ) New advances (collections), net (306,673 ) 10,212 (245,881 ) (393,684 ) Increase in allowance for losses — (2,635 ) — — Ending balance $ 1,144,600 $ 32,757 $ 1,451,964 $ 1,706,768 |
Mortgage Servicing (Tables)
Mortgage Servicing (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Transfers and Servicing [Abstract] | |
Summary of Activity in Carrying Value of Amortization Method Servicing Assets | Years Ended December 31, Mortgage Servicing Rights – Amortization Method 2017 2016 2015 Beginning balance $ 363,722 $ 377,379 $ 1,820,091 Fair value election - transfer to MSRs carried at fair value (1) — — (787,142 ) Additions recognized in connection with asset acquisitions 1,658 17,356 12,355 Additions recognized on the sale of mortgage loans 20,738 37,230 34,962 Sales (1,066 ) (24,452 ) (586,352 ) Servicing transfers and adjustments 252 — — 385,304 407,513 493,914 Decrease (increase) in impairment valuation allowance (2) 3,366 (10,813 ) (17,341 ) Amortization (51,788 ) (32,978 ) (99,194 ) Ending balance $ 336,882 $ 363,722 $ 377,379 Estimated fair value at end of year $ 418,745 $ 467,911 $ 461,555 (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. 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. (2) Impairment of MSRs is recognized in Servicing and origination expense in the consolidated statements of operations. See Note 3 — Fair Value for additional information regarding impairment and the valuation allowance. |
Schedule of Estimated Amortization Expense for MSRs | The estimated amortization expense for MSRs, calculated based on assumptions used at December 31, 2017 , is projected as follows over the next five years: 2018 $ 46,705 2019 38,141 2020 34,824 2021 33,578 2022 30,552 |
Summary of Activity Related to Fair Value Servicing Assets | Years Ended December 31, 2017 2016 2015 Agency Non-Agency Total Agency Non-Agency Total Agency Non-Agency Total Beginning balance $ 13,357 $ 665,899 $ 679,256 $ 15,071 $ 746,119 $ 761,190 $ 93,901 $ — $ 93,901 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 — (540 ) (540 ) (3 ) (145 ) (148 ) (70,930 ) (1,344 ) (72,274 ) Additions recognized on the sale of residential mortgage loans 162 — 162 — — — — 1,007 1,007 Servicing transfers and adjustments — (2,376 ) (2,376 ) — (1,548 ) (1,548 ) — (2,428 ) (2,428 ) Changes in fair value (1): Changes in valuation inputs or other assumptions 243 86,721 86,964 305 — 305 (639 ) 10,684 10,045 Realization of expected future cash flows and other changes (1,802 ) (89,702 ) (91,504 ) (2,016 ) (78,527 ) (80,543 ) (7,261 ) (100,957 ) (108,218 ) Ending balance $ 11,960 $ 660,002 $ 671,962 $ 13,357 $ 665,899 $ 679,256 $ 15,071 $ 746,119 $ 761,190 (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, 2017 given hypothetical shifts in lifetime prepayments and yield assumptions: Adverse change in fair value 10% 20% Weighted average prepayment speeds $ (69,646 ) $ (133,017 ) Discount rate (option-adjusted spread) (14,167 ) (27,901 ) |
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 (1) Commercial (2) Total UPB at December 31, 2017 Servicing $ 75,469,327 $ — $ 75,469,327 Subservicing 2,063,669 — 2,063,669 NRZ (3) 101,819,557 — 101,819,557 $ 179,352,553 $ — $ 179,352,553 UPB at December 31, 2016 Servicing $ 86,049,298 $ — $ 86,049,298 Subservicing 4,330,084 92,933 4,423,017 NRZ (3) 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 (3) 137,142,809 — 137,142,809 $ 250,966,112 $ 105,268 $ 251,071,380 (1) Includes foreclosed real estate and small-balance commercial assets. (2) Consists of large-balance foreclosed real estate. During 2017, we sold or transferred servicing on the remaining managed assets. (3) UPB of loans serviced for which the Rights to MSRs have been sold to NRZ, including those subserviced for which third-party consents have been received and the MSRs have been transferred to NRZ. |
Summary of Geographic Distributions of UPB and Count of Residential Loans and Real Estate Serviced | The geographic distribution of the UPB and count of residential loans and real estate we serviced was as follows: December 31, 2017 Amount Count California $ 40,548,633 164,652 New York 17,132,957 72,500 Florida 15,133,283 114,070 New Jersey 8,843,459 43,819 Texas 8,130,540 95,999 Other 89,563,681 730,655 $ 179,352,553 1,221,695 |
Schedule of Components of Servicing and Subservicing Fees | Years Ended December 31, Servicing Revenue 2017 2016 2015 Loan servicing and subservicing fees Servicing $ 257,419 $ 293,210 $ 453,445 Subservicing 7,775 21,427 58,384 NRZ 549,411 633,545 694,833 814,605 948,182 1,206,662 Late charges 61,763 66,709 82,690 Home Affordable Modification Program (HAMP) fees (1) 43,310 110,367 135,036 Custodial accounts (float earnings) 25,237 8,969 15,870 Loan collection fees 22,770 27,213 31,763 Other 21,691 25,180 59,776 $ 989,376 $ 1,186,620 $ 1,531,797 (1) The HAMP program expired on December 31, 2016. Borrowers who had requested assistance or to whom an offer of assistance had been extended as of that date had until September 30, 2017 to finalize their modification. |
Rights to MSRs (Tables)
Rights to MSRs (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Transfers and Servicing [Abstract] | |
Schedule of Interest Expense Related to Financial Liability | Interest expense related to financing liabilities recorded in connection with the NRZ transactions is indicated in the table below. Years Ended December 31, 2017 2016 2015 Servicing fees collected on behalf of NRZ $ 549,411 $ 633,545 $ 694,833 Less: Subservicing fee retained by Ocwen 295,192 337,727 355,527 Net servicing fees remitted to NRZ 254,219 295,818 339,306 Less: Reduction (increase) in financing liability Changes in fair value: Existing Rights to MSRs Agreements (83,300 ) (2,580 ) — 2017 Agreements 42,018 — — Runoff, settlement and other 59,190 63,997 70,513 $ 236,311 $ 234,401 $ 268,793 |
Receivables (Tables)
Receivables (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
Schedule of Receivables | December 31, 2017 2016 Servicing-related receivables Government-insured loan claims $ 114,971 $ 133,063 Due from custodial accounts 36,122 44,761 Reimbursable expenses 31,709 29,358 Due from NRZ 14,924 21,837 Other 11,959 27,086 209,685 256,105 Income taxes receivable 36,831 61,932 Other receivables 19,600 21,125 266,116 339,162 Allowance for losses (66,587 ) (73,442 ) $ 199,529 $ 265,720 At December 31, 2017 and 2016 , the allowance for losses related to receivables of our Servicing business. Allowance for losses related to defaulted FHA or VA insured loans repurchased from Ginnie Mae guaranteed securitizations (government-insured loan claims) were $53.3 million at both December 31, 2017 and 2016 . Changes in the allowance for losses related to government-insured loan claims are as follows: Years Ended December 31, 2017 2016 2015 Beginning balance $ 53,258 $ 20,571 $ 9,976 Provision 40,424 61,322 33,710 Charge-offs and other, net (40,342 ) (28,635 ) (23,115 ) Ending balance $ 53,340 $ 53,258 $ 20,571 |
Premises and Equipment (Tables)
Premises and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Premises and Equipment | December 31, 2017 2016 Computer software $ 43,137 $ 58,322 Computer hardware 29,848 35,192 Leasehold improvements 23,425 25,975 Buildings 9,689 9,689 Office equipment 8,071 9,200 Furniture and fixtures 4,141 6,825 Other 1,364 2,914 119,675 148,117 Less accumulated depreciation and amortization (82,669 ) (85,373 ) $ 37,006 $ 62,744 |
Other Assets (Tables)
Other Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Schedule of Other Assets | December 31, 2017 2016 Contingent loan repurchase asset $ 431,492 $ 246,081 Debt service accounts 33,726 42,822 Other prepaid expenses 22,559 22,271 Prepaid representation, warranty and indemnification claims - Agency MSR sale 20,173 34,917 Prepaid lender fees, net (1) 9,496 9,023 Other restricted cash 9,179 3,027 Prepaid income taxes (2) 5,621 8,392 Derivatives, at fair value 5,429 9,279 Interest-earning time deposits 4,739 6,454 Real estate 3,070 5,249 Mortgage-backed securities, at fair value 1,592 8,342 Automotive dealer financing notes, net — 33,224 Other 7,715 9,023 $ 554,791 $ 438,104 (1) We amortize these costs to the earlier of the scheduled amortization date, contractual maturity date or prepayment date of the debt. (2) 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. |
Schedule of Changes in allowance of Automotive Dealer Financing Notes | The changes in the valuation allowance are as follows: Years Ended December 31, 2017 2016 2015 Beginning balance $ 10,064 $ 14,658 $ 49,676 Provision 3,109 3,599 (400 ) Transfer from Liability for indemnification obligations (Other liabilities) 3,246 2,368 1,180 Sales of loans (9,415 ) (10,208 ) (37,776 ) Other 314 (353 ) 1,978 Ending balance $ 7,318 $ 10,064 $ 14,658 |
Automotive Dealer Financing Notes [Member] | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Schedule of Changes in allowance of Automotive Dealer Financing Notes | Changes in the allowance are as follows: Years Ended December 31, 2017 2016 2015 Beginning balance $ 4,371 $ 27 $ — Provision 3,293 4,344 27 Ending balance $ 7,664 $ 4,371 $ 27 |
Borrowings (Tables)
Borrowings (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Instrument, Redemption [Line Items] | |
Schedule of Match Funded Liabilities | Match Funded Liabilities December 31, 2017 December 31, 2016 Borrowing Type Maturity (1) Amorti-zation Date (1) Available Borrowing Capacity (2) Weighted Average Interest Rate (3) Balance Weighted Average Interest Rate (3) Balance Advance Financing Facilities Advance Receivables Backed Notes, Series 2014-VF3 Aug. 2047 Aug. 2017 $ — — % $ — 3.12 % $ 74,394 Advance Receivables Backed Notes, Series 2014-VF4 (4) Aug. 2048 Aug. 2018 37,905 4.29 67,095 3.12 74,394 Advance Receivables Backed Notes - Series 2015-VF5 (4) Aug. 2048 Aug. 2018 37,905 4.29 67,095 3.12 74,394 Advance Receivables Backed Notes - Series 2015-T3 (5) Nov. 2047 Nov. 2017 — — — 3.48 400,000 Advance Receivables Backed Notes - Series 2016-T1 (5) Aug. 2048 Aug. 2018 — 2.77 265,000 2.77 265,000 Advance Receivables Backed Notes - Series 2016-T2 (5) Aug. 2049 Aug. 2019 — 2.99 235,000 2.99 235,000 Advance Receivables Backed Notes - Series 2017-T1 (5) Sep. 2048 Sep. 2018 — 2.64 250,000 — — Total Ocwen Master Advance Receivables Trust (OMART) 75,810 3.02 884,190 3.14 1,123,182 Total Ocwen Servicer Advance Receivables Trust III (OSART III) - Advance Receivables Backed Notes, Series 2014-VF1 (6) Dec. 2048 Dec. 2018 21,232 4.63 33,768 4.63 63,093 Ocwen Freddie Advance Funding (OFAF ) - Advance Receivables Backed Notes, Series 2015-VF1 (7) Jun. 2048 Jun. 2018 53,922 4.52 56,078 3.54 94,722 Total Servicing Advance Financing Facilities 150,964 3.16 % 974,036 3.21 % 1,280,997 Automotive Capital Asset Receivables Trust (ACART) - Loan Series 2017-1 (8) Feb. 2021 Feb. 2019 25,418 6.77 % 24,582 — % — $ 176,382 3.25 % $ 998,618 3.21 % $ 1,280,997 (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 eligible collateral to pledge. Collateral may only be pledged to one facility. At December 31, 2017 , $12.4 million of the available borrowing capacity of our advance financing notes could be used based on the amount of eligible collateral that had been pledged. (3) 1ML was 1.56% and 0.77% at December 31, 2017 and 2016 , respectively. (4) Effective January 1, 2018, the borrowing capacity of the Series 2014-VF4 and the Series 2014-VF5 variable rate notes were each reduced from $105.0 million to $70.0 million . There is a ceiling of 125 basis points (bps) for 1ML in determining the interest rate for these variable rate notes. Rates on the individual notes are based on 1ML plus a margin of 235 to 635 bps. (5) Under the terms of the agreement, we must continue to borrow the full amount of the Series 2016-T1 and Series 2016-T2 fixed-rate term notes until the amortization date. If there is insufficient eligible collateral to support the level of borrowing, the excess cash proceeds in an amount necessary to make up the deficit are not distributed to Ocwen but are held by the trustee, and interest expense continues to be based on the full amount of the outstanding notes. The Series 2016-T1, Series 2016-T2 and Series 2017-T1 term notes have a total combined borrowing capacity of $750.0 million . Rates on the individual classes of notes range from 2.4989% to 4.4456% . (6) The maximum borrowing capacity under this facility is $55.0 million . There is a ceiling of 300 bps for 1ML in determining the interest rate for these variable rate notes. Rates on the individual notes are based on the lender’s cost of funds plus a margin of 235 to 475 bps. (7) The combined borrowing capacity of the notes is $110.0 million with interest computed based on the lender’s cost of funds plus a margin of 250 to 500 bps. There is a ceiling of 300 bps for 1ML in determining the interest rate for these variable rate notes. (8) The committed borrowing capacity for the Loan Series 2017-1 Notes is $50.0 million at December 31, 2017. Rates on the Loan Series 2017-1 Notes are based on cost of funds plus a margin of 500 bps. On January 23, 2018, we voluntarily terminated the Loan Series 2017-1 Notes. |
Schedule of Financing Liabilities | Financing Liabilities Balance at December 31, Borrowing Type Collateral Interest Rate Maturity 2017 2016 HMBS-Related Borrowings, at fair value (1) Loans held for investment 1ML + 260 bps (1) 4,601,556 3,433,781 Other Financing Liabilities MSRs pledged, at fair value Existing Rights to MSRs Agreements MSRs (2) (2) 499,042 477,707 2017 Agreements MSRs (3) (3) 9,249 — 508,291 477,707 Secured Notes, Ocwen Asset Servicing Income Series, Series 2014-1 (4) MSRs (4) Feb. 2028 72,575 81,131 Advances pledged (5) Advances on loans (5) (5) 12,652 20,193 593,518 579,031 $ 5,195,074 $ 4,012,812 (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. (2) This financing liability 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. (3) This financing liability arose in connection with lump sum payments received upon transfer of legal title of the MSRs related to the Rights to MSRs transactions to NRZ. We received lump sum payments of $54.6 million as compensation for foregoing certain payments under the Existing Rights to MSRs Agreements. This liability 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. (4) OASIS noteholders are entitled to receive a monthly payment equal to the sum of: (a) 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. 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 notes. (5) Certain sales of advances did not qualify for sales accounting treatment and were accounted for as a financing. This financing liability has no contractual maturity or interest rate. |
Schedule of Other Secured Borrowings | Other Secured Borrowings Balance at December 31, Borrowing Type Collateral Interest Rate Termination / Maturity Available Borrowing Capacity (1) 2017 2016 SSTL (2) (2) 1-Month Euro-dollar rate + 500 bps with a Eurodollar floor of 100 bps (2) Dec. 2020 $ — $ 298,251 $ 335,000 Mortgage loan warehouse facilities Repurchase agreement (3) Loans held for sale (LHFS) 1ML + 200 - 345 bps Aug. 2018 79,279 8,221 12,370 Master repurchase agreements LHFS 1ML + 200 bps; 1ML floor of 0.0% Aug. 2017 — — 173,543 Participation agreements (4) LHFS N/A Apr. 2018 (4) — 161,433 92,739 Mortgage warehouse agreement (5) LHFS (reverse mortgages) 1ML + 275 bps; interest rate floor of 350 bps Oct. 2018 — 32,042 26,254 Master repurchase agreement LHFS (reverse mortgages) 1ML + 275 bps; 1ML floor of 25 bps Aug. 2017 — — 50,123 Master repurchase agreement (6) LHFS (forward and reverse mortgages) 1ML + 225 bps forward; 1ML + 275 bps reverse Dec.2018 95,914 54,086 — Master repurchase agreement (7) LHFS (reverse mortgages) Prime + 0.0% (4.0% floor) Dec.2018 50,000 — — 225,193 255,782 355,029 $ 225,193 554,033 690,029 Unamortized debt issuance costs - SSTL (5,423 ) (7,612 ) Discount - SSTL (2,760 ) (3,874 ) $ 545,850 $ 678,543 Weighted average interest rate 5.22 % 4.56 % (1) Available borrowing capacity for our mortgage loan warehouse facilities does not consider the amount of the facility that the lender has extended on an uncommitted basis. Of the borrowing capacity extended on a committed basis, $21.8 million could be used at December 31, 2017 based on the amount of eligible collateral that had been pledged. (2) Under the terms of the Amended and Restated Senior Secured Term Loan Facility Agreement with a borrowing capacity of $335.0 million , 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 of $4.2 million on the SSTL, the first of which was paid 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. (3) $87.5 million of the maximum borrowing amount of $137.5 million is available on a committed basis and the remainder is available at the discretion of the lender. We primarily 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 these participation agreements, the lender provides financing for a 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. (5) Under this participation agreement, the lender provides financing for $100.0 million at the discretion of the lender. The participation agreement allows the lender to acquire a 100% beneficial interest in the underlying mortgage loans. The transaction does not qualify for sale accounting treatment and is accounted for as a secured borrowing. (6) Under this agreement, the lender provides financing on a committed basis for up to $150.0 million . The 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. (7) Under this agreement, t he lender provides financing for up to $50.0 million at the discretion of the lender. |
Schedule of Senior Notes | Senior Notes Balance at December 31, Interest Rate Maturity 2017 2016 Senior unsecured notes (1) 6.625% May 2019 $ 3,122 $ 3,122 Senior secured notes (2) 8.375% Nov. 2022 346,878 346,878 350,000 350,000 Unamortized debt issuance costs (2,662 ) (3,211 ) $ 347,338 $ 346,789 (1) Ocwen may redeem all or a part of the remaining 6.625% Senior Unsecured Notes due May 15, 2019 (Senior Unsecured Notes), upon not less than 30 nor more than 60 days’ notice, at a redemption price (expressed as percentages of principal amount) of 103.313% and 100.000% during the twelve-month periods beginning on May 15, 2017 and 2018 (and thereafter), respectively, plus accrued and unpaid interest and additional interest, if any. (2) In 2016, OLS completed a debt-for-debt exchange offer whereby OLS issued $346.9 million aggregate principal amount of 8.375% Senior Secured Second Lien Notes that mature November 15, 2022 (Senior Secured Notes) in exchange for $346.9 million aggregate principal amount (or 99.1% ) of Ocwen’s Senior Unsecured Notes. Interest is payable semiannually on each May 15 and November 15, and commenced 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. |
Schedule of Aggregate Long-term Borrowings | 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) 2018 2019 2020 2021 2022 There- after Total Fair Match funded liabilities $ 739,036 $ 259,582 $ — $ — $ — $ — $ 998,618 $ 992,698 Other secured borrowings 272,532 16,750 264,751 — — — 554,033 555,523 Senior notes — 3,122 — — 346,878 — 350,000 358,422 $ 1,011,568 $ 279,454 $ 264,751 $ — $ 346,878 $ — $ 1,902,651 $ 1,906,643 (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 recognized in connection with asset sales transactions accounted for as financings, including $499.0 million recorded in connection with sales of Rights to MSRs and $4.6 billion recorded in connection with the securitizations of HMBS. These financing liabilities have no contractual maturity and are amortized over the life of the underlying assets. |
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, 2017 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Other Liabilities | December 31, 2017 2016 Contingent loan repurchase liability $ 431,492 $ 246,081 Due to NRZ (1) 98,493 83,248 Other accrued expenses 75,088 80,021 Accrued legal fees and settlements 51,057 93,797 Servicing-related obligations 35,239 35,324 Liability for indemnification obligations 23,117 27,546 Checks held for escheat 19,306 16,890 Amounts due in connection with MSR sales 8,291 39,398 Accrued interest payable 5,172 3,698 Deferred income 3,463 4,481 Liability for uncertain tax positions 3,252 23,216 Derivatives, at fair value 635 1,550 Other 14,805 25,989 $ 769,410 $ 681,239 (1) Balances represent advance collections and servicing fees to be remitted to NRZ. We monitor our legal and regulatory 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, including fines and penalties, judgments on appeal and filed and/or threatened claims for which we believe it is probable that a loss has been or will be incurred and the amount can be reasonably estimated. See Note 22 — Regulatory Requirements and Note 24 — Contingencies for additional information. We recognize legal costs associated with loss contingencies in Professional services expense in the consolidated statement of operations as incurred. The changes in the liability for legal fees and settlements are as follows: Years Ended December 31, 2017 2016 2015 Beginning balance $ 93,797 $ 74,922 $ 38,962 Accrual for probable losses (1) 133,656 74,943 30,691 Payments (2) (174,941 ) (47,754 ) (4,928 ) Net change in accrued legal fees 482 (6,231 ) 10,196 Other (3) (1,937 ) (2,083 ) 1 Ending balance $ 51,057 $ 93,797 $ 74,922 (1) Consists of amounts accrued for probable losses in connection with legal and regulatory settlements and judgments. Such amounts are reported in Professional services expense in the consolidated statements of operations. (2) Includes cash payments made in connection with resolved legal and regulatory matters. (3) During the year ended December 31, 2017 , Ocwen issued 625,000 shares of common stock with a fair value of $1.9 million in connection with a legal settlement. The remaining 1,875,000 shares were issued in January 2018. |
Equity (Tables)
Equity (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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: December 31, 2017 2016 Unrealized losses on cash flow hedges $ 1,128 $ 1,329 Other 121 121 $ 1,249 $ 1,450 |
Derivative Financial Instrume50
Derivative Financial Instruments and Hedging Activities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of Changes in Notional Balances of Holdings of Derivatives | The following table summarizes derivative activity, including the derivatives used in each of our identified hedging programs. None of the derivatives was designated as a hedge for accounting purposes at December 31, 2017 : Interest Rate Risk IRLCs and Loans Held for Sale Borrowings IRLCs Forward MBS Trades Interest Rate Caps Notional balance at December 31, 2016 $ 360,450 $ 609,177 $ 955,000 Additions 3,711,902 2,914,283 211,667 Amortization — — (416,667 ) Maturities (3,221,782 ) (2,289,228 ) — Terminations (754,231 ) (993,409 ) (375,000 ) Notional balance at December 31, 2017 $ 96,339 $ 240,823 $ 375,000 Maturity Jan. 2018 - Mar. 2018 Feb. 2018 Jul. 2018 - Dec. 2019 Fair value of derivative assets (liabilities) (1) at: December 31, 2017 $ 3,283 $ (545 ) $ 2,056 December 31, 2016 6,507 (614 ) 1,836 Gains (losses) on derivatives during the years ended: Gain on Loans Held for Sale, Net Other, Net December 31, 2017 $ (3,089 ) $ (8,529 ) $ 10 December 31, 2016 (55 ) (6,592 ) (1,387 ) (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 were as follows: Years Ended December 31, 2017 2016 2015 Beginning balance $ 1,450 $ 1,763 $ 8,413 Losses on terminated cash flow hedging relationships amortized to earnings (201 ) (337 ) (7,042 ) Decrease in deferred taxes on accumulated losses on cash flow hedges — 24 392 Decrease in accumulated losses on cash flow hedges, net of taxes (201 ) (313 ) (6,650 ) Ending balance $ 1,249 $ 1,450 $ 1,763 |
Schedule of Other Income (Expense), Net Related to Derivative Financial Instruments | Other income (expense), net, includes the following related to derivative financial instruments: Years Ended December 31, 2017 2016 2015 Gain (loss) on economic hedges $ 10 $ (1,387 ) $ (1,377 ) Write-off of losses in AOCL for a discontinued hedge relationship (1) (201 ) (337 ) (7,042 ) $ (191 ) $ (1,724 ) $ (8,419 ) (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, 2017 | |
Other Income and Expenses [Abstract] | |
Schedule of Components of Interest Income | Years Ended December 31, 2017 2016 2015 Loans held for sale $ 11,100 $ 15,774 $ 16,167 Automotive dealer financing notes 3,069 1,534 39 Interest earning cash deposits and other 1,796 1,775 2,114 $ 15,965 $ 19,083 $ 18,320 |
Interest Expense (Tables)
Interest Expense (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Other Income and Expenses [Abstract] | |
Schedule of Components of Interest Expense | Years Ended December 31, 2017 2016 2015 Financing liabilities $ 242,514 $ 248,834 $ 292,306 Match funded liabilities 47,624 66,879 65,248 Other secured borrowings 39,531 60,469 91,391 Senior notes 29,806 30,012 26,259 Other 3,763 6,389 7,169 $ 363,238 $ 412,583 $ 482,373 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Before Taxes | For income tax purposes, the components of loss before taxes were as follows: Years Ended December 31, 2017 2016 2015 Domestic $ (75,143 ) $ (130,920 ) $ (62,903 ) Foreign (68,830 ) (75,441 ) (66,958 ) $ (143,973 ) $ (206,361 ) $ (129,861 ) |
Schedule of Components of Income Tax Expense (Benefit) | The components of income tax expense (benefit) were as follows: Years Ended December 31, 2017 2016 2015 Current: Federal $ (21,859 ) $ (8,025 ) $ 46,680 State (3,938 ) 460 1,079 Foreign 9,550 5,099 161 (16,247 ) (2,466 ) 47,920 Deferred: Federal 27,289 (22,054 ) (27,173 ) State 702 4,701 (3,719 ) Foreign 2,719 (2,806 ) 2,754 Provision for (reversal of) valuation allowance on deferred tax assets (29,979 ) 15,639 97,069 731 (4,520 ) 68,931 Total $ (15,516 ) $ (6,986 ) $ 116,851 |
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: Years Ended December 31, 2017 2016 2015 Expected income tax expense (benefit) at statutory rate $ (50,391 ) $ (72,225 ) $ (45,451 ) Differences between expected and actual income tax expense: U.S Tax Reform - Change in Federal rate 62,758 — — U.S Tax Reform - Transition Tax 34,846 — — Foreign tax differential including effectively connected income (1) (12,140 ) 42,463 41,695 Provision for (reversal of) liability for uncertain tax positions (16,925 ) 2,236 18,205 Provision for (reversal of) valuation allowance on deferred tax assets (2) (29,979 ) 15,639 97,069 Provision for liability for intra-entity transactions 2,484 3,357 4,700 State tax, after Federal tax benefit (3,938 ) 250 (2,867 ) Excess tax benefits from share-based compensation (3,701 ) — — Other permanent differences 2,783 515 (463 ) Non-deductible regulatory settlements — — 700 Other (1,313 ) 779 3,263 Actual income tax expense (benefit) $ (15,516 ) $ (6,986 ) $ 116,851 (1) The foreign tax differential includes a benefit recognized in 2017 and 2016 for taxable losses earned by OMS which are taxable in the U.S. as effectively connected income (ECI). The foreign tax differential for 2015 included positive ECI expected to be generated for that year. The impact of ECI to income tax expense (benefit) for 2017, 2016 and 2015 was $(28.5) million , $(7.4) million and $7.3 million , respectively. (2) The benefit recorded for the provision for valuation allowance in 2017 relates primarily to the reduction in the valuation allowance necessary as a result of revaluing our deferred tax assets due to U.S. tax reform and the reduction in the corporate tax rate. This benefit is partially offset by an increase in valuation allowance necessary for current year losses. 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 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: December 31, 2017 2016 Deferred tax assets Net operating loss carryforward $ 59,271 $ 67,657 Foreign deferred assets 6,769 5,219 Intangible asset amortization 5,541 8,223 Partnership losses 5,360 8,976 Accrued incentive compensation 4,798 8,017 Foreign tax credit 4,262 4,262 Stock-based compensation expense 4,202 5,659 Mortgage servicing rights amortization 3,664 11,592 Accrued other liabilities 3,239 5,543 Accrued legal settlements 3,602 9,178 Tax residuals and deferred income on tax residuals 2,569 4,037 Bad debt and allowance for loan losses 2,383 3,268 Interest expense disallowance 2,032 — Reserve for servicing exposure 1,312 1,900 Capital losses 937 1,450 Delinquent servicing fees 769 1,647 Other 3,245 1,872 113,955 148,500 Deferred tax liabilities Foreign undistributed earnings 4,858 13,619 Other 49 76 4,907 13,695 109,048 134,805 Valuation allowance (1) (107,048 ) (132,073 ) Deferred tax assets, net $ 2,000 $ 2,732 |
Schedule of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of the total liability for uncertain tax positions is as follows: Years Ended December 31, 2017 2016 2015 Beginning balance $ 16,994 $ 32,548 $ 22,523 Additions for tax positions of prior years 2,281 — 13,162 Reductions for tax positions of prior years — — (2,741 ) Reductions for settlements (387 ) (14,420 ) — Lapses in statute of limitations (16,607 ) (1,134 ) (396 ) Ending balance $ 2,281 $ 16,994 $ 32,548 |
Basic and Diluted Earnings (L54
Basic and Diluted Earnings (Loss) per Share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliation of the Calculation of Basic EPS to Diluted EPS | Years Ended December 31, 2017 2016 2015 Basic loss per share Net loss attributable to Ocwen stockholders $ (127,966 ) $ (199,762 ) $ (247,017 ) Weighted average shares of common stock 127,082,058 123,990,700 125,315,899 Basic loss per share $ (1.01 ) $ (1.61 ) $ (1.97 ) Diluted loss per share Net loss attributable to Ocwen stockholders $ (127,966 ) $ (199,762 ) $ (247,017 ) Weighted average shares of common stock 127,082,058 123,990,700 125,315,899 Effect of dilutive elements — — — Dilutive weighted average shares of common stock 127,082,058 123,990,700 125,315,899 Diluted loss per share $ (1.01 ) $ (1.61 ) $ (1.97 ) Stock options and common stock awards excluded from the computation of diluted earnings per share Anti-dilutive (1) 5,487,164 7,176,089 2,038,588 Market-based (2) 862,446 795,456 924,438 (1) Stock options were anti-dilutive because their exercise price was greater than the average market price of Ocwen’s stock. (2) Shares that are issuable upon the achievement of certain market-based performance criteria related to Ocwen’s stock price. |
Employee Compensation and Ben55
Employee Compensation and Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Stock Options Vesting | Awards under these plans 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 % 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 % Type of Award Percent of Total Equity Award Vesting Period 2016 and 2017 Awards: Stock Units: Service Condition: Time-based 30 % Over three years with 1/3rd vesting on each of the first three anniversaries of the grant date. Market Condition: Time-based vesting schedule and Market performance-based vesting date 70 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 | Years Ended December 31, Stock Options 2017 2016 2015 Number of Options Weighted Average Exercise Price Number of Options Weighted Average Exercise Price Number of Options Weighted Average Exercise Price Outstanding at beginning of year 6,926,634 $ 9.88 7,151,225 $ 10.10 6,828,861 $ 9.99 Granted (1)(2) — — — — 968,041 17.48 Exercised (3)(4) — — (69,805 ) 5.81 (145,677 ) 5.24 Forfeited/Canceled (1) (217,979 ) 7.16 (154,786 ) 21.80 (500,000 ) 24.38 Outstanding at end of year (5)(6) 6,708,655 $ 9.97 6,926,634 $ 9.88 7,151,225 $ 10.10 Exercisable at end of year (5)(6)(7) 6,234,830 $ 8.87 6,344,958 $ 8.71 6,187,559 $ 8.25 (1) Upon the resignation of our former executive chairman 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 in 2015 was $3.28 . (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 and $0.3 million for 2016 and 2015 , respectively. (4) In connection with the exercise of stock options during 2015, employees delivered 56,013 shares 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 net shares of stock were issued in 2015 related to the exercise of stock options. (5) At December 31, 2017 , 280,000 options with a market condition for vesting based on an average common stock trading price of $32.24 , had not met their performance criteria. The net aggregate intrinsic value of stock options outstanding and stock options exercisable at December 31, 2017 was $0 and $0 , respectively. A total of 4,662,814 market-based options were outstanding at December 31, 2017 , of which 4,382,814 were exercisable. (6) At December 31, 2017 , the weighted average remaining contractual term of options outstanding and options exercisable was 1.94 years and 1.58 years , respectively. (7) The total fair value of stock options that vested and became exercisable during 2017 , 2016 and 2015 , based on grant-date fair value, was $0.7 million , $1.1 million and $2.0 million , respectively. |
Schedule of Stock Unit Activity | Years Ended December 31, Stock Units 2017 2016 2015 Number of Weighted Number of Weighted Number of Weighted Unvested at beginning of year 2,752,054 $ 3.91 835,730 $ 10.00 79,612 $ 32.23 Granted 971,761 2.56 2,184,100 2.19 790,397 8.53 Vested (1)(2) (896,272 ) 3.26 (26,666 ) 32.56 (34,279 ) 27.92 Forfeited/Canceled (73,625 ) 2.20 (241,110 ) 6.17 — — Unvested at end of year (3)(4) 2,753,918 $ 3.69 2,752,054 $ 3.91 835,730 $ 10.00 (1) The total intrinsic value of stock units vested, which is defined as the market value of the stock on the date of vesting, was $4.6 million , $0.1 million and $0.3 million for 2017 , 2016 and 2015 , respectively. (2) The total fair value of the stock units that vested during 2017 , 2016 and 2015 , based on grant-date fair value, was $2.9 million , $0.9 million and $1.0 million , respectively. (3) Excluding the 582,446 market-based stock awards that have not met their performance criteria, the net aggregate intrinsic value of stock awards outstanding at December 31, 2017 was $6.8 million . At December 31, 2017 , 502,446 and 80,000 stock units with a market condition for vesting based on an average common stock trading price of $16.26 and $11.72 , respectively, had not yet met the market condition. (4) At December 31, 2017 , the weighted average remaining contractual term of share units outstanding was 1.40 years . |
Schedule of Assumptions used to Value Stock Option Awards Granted | The following assumptions were used to value awards: Years Ended December 31, 2017 2016 2015 Monte Carlo Monte Carlo Black-Scholes Binomial Monte Carlo Risk-free interest rate 1.12% – 1.18% 1.12% 1.60% – 2.08% 0.20% - 2.74% 1.23% Expected stock price volatility (1) 71% - 77% 77% 45% 51% - 108% 65% Expected dividend yield —% —% —% —% —% Expected life (in years) (2) (3) (3) 5.50 5.41 - 5.46 (3) Contractual life (in years) N/A N/A N/A 10 N/A Fair value $2.00 - $4.80 $2.00 $3.36 - $4.62 $5.41 - $5.46 $7.99 (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: Years Ended December 31, 2017 2016 2015 Equity-based compensation expense Stock option awards $ 1,457 $ 1,644 $ 3,978 Stock awards 4,167 3,537 3,313 Excess tax benefit related to share-based awards 3,701 686 6,824 |
Business Segment Reporting (Tab
Business Segment Reporting (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting Information [Line Items] | |
Schedule of Segment Reporting Information | Financial information for our segments is as follows: Results of Operations Servicing Lending Corporate Items and Other Corporate Eliminations Business Segments Consolidated Year Ended December 31, 2017 Revenue (1) $ 1,041,290 $ 127,475 $ 25,811 $ — $ 1,194,576 Expenses (1) 716,384 128,058 154,203 — 998,645 Other income (expense): Interest income 783 10,914 4,268 — 15,965 Interest expense (293,595 ) (13,893 ) (55,750 ) — (363,238 ) Gain on sale of mortgage servicing rights, net 10,537 — — — 10,537 Other (1) 4,049 (869 ) (6,348 ) — (3,168 ) Other expense, net (278,226 ) (3,848 ) (57,830 ) — (339,904 ) Income (loss) before income taxes $ 46,680 $ (4,431 ) $ (186,222 ) $ — $ (143,973 ) Year Ended December 31, 2016 Revenue (1) $ 1,247,159 $ 112,363 $ 27,646 $ (5 ) $ 1,387,163 Expenses (1) 910,577 114,199 198,483 (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 $ 3,364 $ 131 $ (209,856 ) $ — $ (206,361 ) Year Ended December 31, 2015 Revenue (1) $ 1,613,537 $ 124,724 $ 2,895 $ (58 ) $ 1,741,098 Expenses (1) 1,211,140 108,431 158,671 (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 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 $ 26,615 $ 23,226 $ (179,702 ) $ — $ (129,861 ) Total Assets Servicing Lending Corporate Items and Other Corporate Eliminations Business Segments Consolidated December 31, 2017 $ 3,033,243 $ 4,945,456 $ 424,465 $ — $ 8,403,164 December 31, 2016 3,312,371 3,863,862 479,430 — 7,655,663 December 31, 2015 4,089,911 2,811,165 479,232 — 7,380,308 (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. Depreciation and Amortization Expense Servicing Lending Corporate Items and Other Business Segments Consolidated Year Ended December 31, 2017: Depreciation expense $ 5,797 $ 194 $ 20,895 $ 26,886 Amortization of mortgage servicing rights 51,515 273 — 51,788 Amortization of debt discount — — 1,114 1,114 Amortization of debt issuance costs — — 2,738 2,738 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 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 |
Depreciation and Amortization [Member] | |
Segment Reporting Information [Line Items] | |
Schedule of Segment Reporting Information | Depreciation and Amortization Expense Servicing Lending Corporate Items and Other Business Segments Consolidated Year Ended December 31, 2017: Depreciation expense $ 5,797 $ 194 $ 20,895 $ 26,886 Amortization of mortgage servicing rights 51,515 273 — 51,788 Amortization of debt discount — — 1,114 1,114 Amortization of debt issuance costs — — 2,738 2,738 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 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 |
Commitments (Tables)
Commitments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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: 2018 $ 10,135 2019 10,051 2020 7,754 2021 6,568 2022 4,018 Thereafter 932 39,458 Less: Sublease income (492 ) Total minimum lease payments, net $ 38,966 |
Contingencies (Tables)
Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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: Years Ended December 31, 2017 2016 2015 Beginning balance $ 24,285 $ 36,615 $ 132,918 Provision for representation and warranty obligations (1,371 ) (4,060 ) (8,418 ) New production reserves 702 864 814 Payments made in connection with sales of MSRs — (1,320 ) (81,498 ) Charge-offs and other (1) (4,387 ) (7,814 ) (7,201 ) Ending balance $ 19,229 $ 24,285 $ 36,615 (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 Operatio59
Quarterly Results of Operations (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Results of Operations (Unaudited) | Quarters Ended December 31, September 30, June 30, March 31, Revenue $ 276,770 $ 284,642 $ 311,300 $ 321,864 Expenses (1) (2) 168,303 273,479 280,480 276,383 Other expense, net (1) (153,781 ) (37,716 ) (72,428 ) (75,979 ) Loss before income taxes (45,314 ) (26,553 ) (41,608 ) (30,498 ) Income tax expense (benefit) (51 ) (20,418 ) 2,828 2,125 Net loss (45,263 ) (6,135 ) (44,436 ) (32,623 ) Net loss (income) attributable to non-controlling interests 780 (117 ) (71 ) (101 ) Net loss attributable to Ocwen stockholders $ (44,483 ) $ (6,252 ) $ (44,507 ) $ (32,724 ) Loss per share attributable to Ocwen stockholders Basic $ (0.34 ) $ (0.05 ) $ (0.36 ) $ (0.26 ) Diluted $ (0.34 ) $ (0.05 ) $ (0.36 ) $ (0.26 ) (1) A benchmarking valuation assumption update related to our non-Agency MSRs carried at fair value resulted in an $84.4 million increase in value and reduction in related losses (reported in Servicing and origination expense) during the quarter ended December 31, 2017. This reflects an upward trend in market pricing on non-Agency MSRs similar in profile to Ocwen’s portfolio. This valuation assumption update also resulted in a largely offsetting increase of $73.4 million in the value of the NRZ financing liability which was recognized as interest expense. (2) Includes the recovery of $28.5 million of losses during the quarter ended December 31, 2017 related to a settlement of outstanding claims that arose from indemnification obligations in connection with our acquisition of MSRs and related servicing advances in 2013. We had recognized such losses on advances in prior periods and recorded the 2017 recovery in Servicing and origination expense. 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 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 stockholders $ (10,444 ) $ 9,391 $ (87,378 ) $ (111,331 ) Earnings (loss) per share attributable to Ocwen stockholders Basic $ (0.08 ) $ 0.08 $ (0.71 ) $ (0.90 ) Diluted $ (0.08 ) $ 0.08 $ (0.71 ) $ (0.90 ) |
Organization, Business Enviro60
Organization, Business Environment, Basis of Presentation and Significant Accounting Policies - Narrative (Details) $ in Thousands | Jan. 18, 2018USD ($) | Jan. 31, 2018USD ($) | Dec. 31, 2017USD ($)Employees | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Jan. 01, 2018USD ($) |
Description of Business and Basis of Presentation [Line Items] | ||||||
Total number of employees | Employees | 7,600 | |||||
Percentage of foreign based employees engaged in supporting loan servicing operations | 80.00% | |||||
Proceeds from sale of mortgage servicing rights accounted for as financing | $ 54,601 | $ 0 | $ 0 | |||
Current maturities of borrowings in next 12 months | $ 1,000,000 | |||||
Debt instrument term | 364 days | |||||
Threshold period past due for financing receivables to be delinquent | 89 days | |||||
Cumulative-effect adjustment, recognition of excess tax benefits | $ 5,000 | |||||
Cumulative-effect adjustment, change in accounting for forfeitures | 300 | |||||
Cumulative-effect adjustment, change in accounting for forfeitures, tax | $ 100 | |||||
Subsequent Event [Member] | ||||||
Description of Business and Basis of Presentation [Line Items] | ||||||
cumulative-effect of reduction to retained earnings | $ 5,600 | |||||
India [Member] | ||||||
Description of Business and Basis of Presentation [Line Items] | ||||||
Total number of employees | Employees | 5,000 | |||||
Philippines [Member] | ||||||
Description of Business and Basis of Presentation [Line Items] | ||||||
Total number of employees | Employees | 600 | |||||
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% | |||||
NRZ [Member] | ||||||
Description of Business and Basis of Presentation [Line Items] | ||||||
Proceeds from sale of mortgage servicing rights accounted for as financing | $ 54,600 | |||||
NRZ [Member] | Subsequent Event [Member] | ||||||
Description of Business and Basis of Presentation [Line Items] | ||||||
Proceeds from sale of mortgage servicing rights accounted for as financing | $ 279,600 | $ 279,600 |
Organization, Business Enviro61
Organization, Business Environment, Basis of Presentation and Significant Accounting Policies - Schedule of Property and Equipment Useful Lives (Details) | 12 Months Ended |
Dec. 31, 2017 | |
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 62
Securitizations and Variable Interests Entities - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Servicing Assets at Fair Value [Line Items] | |||
Average period to securitization | 30 days | ||
HMBS-related borrowings | $ 4,601,556 | $ 3,433,781 | |
Loans held for investment, at fair value | $ 4,715,831 | 3,565,716 | |
Pledge advance remittance period | 2 days | ||
Forward Loans [Member] | |||
Servicing Assets at Fair Value [Line Items] | |||
MSRs retained | $ 20,700 | $ 37,200 | $ 36,000 |
Percentage of transferred residential loans serviced 60 days or more past due | 8.90% | 7.60% | |
Charge-offs, net of recovers, associated with transferred residential loans serviced 60 days or more past due | $ 600 | $ 300 | |
HECM [Member] | |||
Servicing Assets at Fair Value [Line Items] | |||
Loans held for investment, at fair value | 4,700,000 | 3,600,000 | |
Loans held for investment, not pledged as collateral | $ 83,800 | $ 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 |
Securitizations and Variable 63
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, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Transfers and Servicing [Abstract] | |||
Proceeds received from securitizations | $ 3,256,625 | $ 5,197,071 | $ 4,970,454 |
Servicing fees collected | 41,509 | 14,616 | 29,239 |
Purchases of previously transferred assets, net of claims reimbursed | (5,948) | (1,271) | (2,863) |
Cash flows between transferor and transferee proceeds and payment related to transfers accounted for sales | $ 3,292,186 | $ 5,210,416 | $ 4,996,830 |
Securitizations and Variable 64
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, 2017 | Dec. 31, 2016 |
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||
UPB of loans transferred | $ 12,077,635 | $ 10,485,697 |
Maximum exposure to loss | 12,233,330 | 10,617,758 |
Mortgage Servicing Rights, at Amortized Cost [Member] | ||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||
Carrying value of assets | 97,832 | 94,492 |
Mortgage Servicing Rights, at Fair Value [Member] | ||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||
Carrying value of assets | 227 | 233 |
Advances And Match Funded Advances [Member] | ||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||
Carrying value of assets | $ 57,636 | $ 37,336 |
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, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||||
Financial assets: | ||||||||
Loans held for sale, at fair value | $ 214,262 | [1] | $ 284,632 | [1] | $ 309,054 | [1] | $ 401,120 | |
Financial liabilities: | ||||||||
Match funded liabilities | 998,618 | 1,280,997 | ||||||
Financing liabilities: | ||||||||
HMBS-related borrowings, at fair value | 4,601,556 | 3,433,781 | ||||||
Other secured borrowings: | ||||||||
Total Other secured borrowings | 545,850 | 678,543 | ||||||
Senior notes: | ||||||||
Total Senior notes | 347,338 | 346,789 | ||||||
Mortgage servicing rights: | ||||||||
Mortgage servicing rights, at fair value | 671,962 | 679,256 | $ 761,190 | $ 93,901 | ||||
Total Mortgage servicing rights | 1,008,844 | 1,042,978 | ||||||
Carrying Value [Member] | ||||||||
Financial assets: | ||||||||
Total Loans held for sale | 238,358 | 314,006 | ||||||
Financing liabilities: | ||||||||
Total Financing liabilities | 5,195,074 | 4,012,809 | ||||||
Other secured borrowings: | ||||||||
Total Other secured borrowings | 545,850 | 678,543 | ||||||
Senior notes: | ||||||||
Total Senior notes | 347,338 | 346,789 | ||||||
Mortgage servicing rights: | ||||||||
Total Mortgage servicing rights | 1,008,844 | 1,042,978 | ||||||
Fair Value [Member] | ||||||||
Financial assets: | ||||||||
Total Loans held for sale | 238,358 | 314,006 | ||||||
Financing liabilities: | ||||||||
Total Financing liabilities | 5,175,049 | 3,993,293 | ||||||
Other secured borrowings: | ||||||||
Total Other secured borrowings | 555,523 | 682,703 | ||||||
Senior notes: | ||||||||
Total Senior notes | 358,422 | 355,303 | ||||||
Mortgage servicing rights: | ||||||||
Total Mortgage servicing rights | 1,090,707 | 1,147,167 | ||||||
Level 2 [Member] | Carrying Value [Member] | ||||||||
Financial assets: | ||||||||
Loans held for sale, at fair value | [2] | 214,262 | 284,632 | |||||
Other secured borrowings: | ||||||||
Senior secured term loan | [3],[4] | 290,068 | 323,514 | |||||
Senior notes: | ||||||||
Senior unsecured notes | [3],[4] | 3,122 | 3,094 | |||||
Senior secured notes | [3],[4] | 344,216 | 343,695 | |||||
Derivative financial instrument assets (liabilities), at fair value | ||||||||
Interest rate lock commitments | [2] | 3,283 | 6,507 | |||||
Level 2 [Member] | Fair Value [Member] | ||||||||
Financial assets: | ||||||||
Loans held for sale, at fair value | [2] | 214,262 | 284,632 | |||||
Other secured borrowings: | ||||||||
Senior secured term loan | [3],[4] | 299,741 | 327,674 | |||||
Senior notes: | ||||||||
Senior unsecured notes | [3],[4] | 2,872 | 3,048 | |||||
Senior secured notes | [3],[4] | 355,550 | 352,255 | |||||
Derivative financial instrument assets (liabilities), at fair value | ||||||||
Interest rate lock commitments | [2] | 3,283 | 6,507 | |||||
Level 3 [Member] | Carrying Value [Member] | ||||||||
Financial assets: | ||||||||
Loans held for sale, at lower of cost or fair value | [5] | 24,096 | 29,374 | |||||
Loans held for investment | [2] | 4,715,831 | 3,565,716 | |||||
Advances (including match funded) | [3] | 1,356,393 | 1,709,846 | |||||
Automotive dealer financing notes (including match funded) | [3] | 32,757 | 33,224 | |||||
Receivables, net | [3] | 199,529 | 265,720 | |||||
Mortgage-backed securities, at fair value | [2] | 1,592 | 8,342 | |||||
Financial liabilities: | ||||||||
Match funded liabilities | [3] | 1,280,997 | ||||||
Financing liabilities: | ||||||||
HMBS-related borrowings, at fair value | [2] | 4,601,556 | 3,433,781 | |||||
Financing liability - MSRs pledged, at fair value | [2] | 508,291 | 477,707 | |||||
Other | [3] | 85,227 | 101,321 | |||||
Other secured borrowings: | ||||||||
Other | [3] | 255,782 | 355,029 | |||||
Derivative financial instrument assets (liabilities), at fair value | ||||||||
Interest rate caps | [2] | 2,056 | 1,836 | |||||
Mortgage servicing rights: | ||||||||
Mortgage servicing rights, at fair value | [2] | 671,962 | 679,256 | |||||
Mortgage servicing rights, at amortized cost | [3],[6] | 336,882 | 363,722 | |||||
Level 3 [Member] | Fair Value [Member] | ||||||||
Financial assets: | ||||||||
Loans held for sale, at lower of cost or fair value | [5] | 24,096 | 29,374 | |||||
Loans held for investment | [2] | 4,715,831 | 3,565,716 | |||||
Advances (including match funded) | [3] | 1,356,393 | 1,709,846 | |||||
Automotive dealer financing notes (including match funded) | [3] | 32,590 | 33,147 | |||||
Receivables, net | [3] | 199,529 | 265,720 | |||||
Mortgage-backed securities, at fair value | [2] | 1,592 | 8,342 | |||||
Financial liabilities: | ||||||||
Match funded liabilities | [3] | 992,698 | 1,275,059 | |||||
Financing liabilities: | ||||||||
HMBS-related borrowings, at fair value | [2] | 4,601,556 | 3,433,781 | |||||
Financing liability - MSRs pledged, at fair value | [2] | 508,291 | 477,707 | |||||
Other | [3] | 65,202 | 81,805 | |||||
Other secured borrowings: | ||||||||
Other | [3] | 255,782 | 355,029 | |||||
Derivative financial instrument assets (liabilities), at fair value | ||||||||
Interest rate caps | [2] | 2,056 | 1,836 | |||||
Mortgage servicing rights: | ||||||||
Mortgage servicing rights, at fair value | [2] | 671,962 | 679,256 | |||||
Mortgage servicing rights, at amortized cost | [3],[6] | 418,745 | 467,911 | |||||
Level 1 [Member] | Carrying Value [Member] | ||||||||
Financial assets: | ||||||||
U.S. Treasury notes | [2] | 1,567 | 2,078 | |||||
Derivative financial instrument assets (liabilities), at fair value | ||||||||
Forward mortgage-backed securities trades | [2] | (545) | (614) | |||||
Level 1 [Member] | Fair Value [Member] | ||||||||
Financial assets: | ||||||||
U.S. Treasury notes | [2] | 1,567 | 2,078 | |||||
Derivative financial instrument assets (liabilities), at fair value | ||||||||
Forward mortgage-backed securities trades | [2] | $ (545) | $ (614) | |||||
[1] | At December 31, 2017, 2016 and 2015, the balances include $5.0 million, $4.9 million and $11.9 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 12 — Borrowings for additional information. | |||||||
[5] | Measured at fair value on a non-recurring basis. | |||||||
[6] | Balances include the 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 $24.8 million, the carrying value of the impaired stratum at December 31, 2017 was $158.0 million. At December 31, 2016, the carrying value of this stratum was $172.9 million before applying the valuation allowance of $28.2 million. |
Fair Value - Schedule of Carr66
Fair Value - Schedule of Carrying Amounts and Estimated Fair Values of Financial Instruments and Nonfinancial Assets Measured at Fair Value on a Recurring or Non-recurring basis or Disclosed, but not Carried, at Fair Value (Footnote) (Details) - Impaired Government Insured Stratum [Member] - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Servicing asset at carrying value | $ 158 | $ 172.9 |
Valuation allowance of MSRs | $ 24.8 | $ 28.2 |
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, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||||
Total realized and unrealized gains and (losses): | ||||||
Included in earnings | $ (4,500) | $ (78,300) | $ (90,300) | |||
Level 3 [Member] | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Beginning balance | 343,662 | 326,404 | (406,749) | |||
Purchases, issuances, sales and settlements | ||||||
Purchases | 655 | 1,337 | 3,513 | |||
Issuances | (60,743) | [1] | 18,703 | (18,724) | ||
Transfer from MSRs carried at amortized cost | 839,157 | |||||
Sales | (540) | (148) | (72,274) | |||
Transfers to Loans held for sale - Fair value | (3,803) | |||||
Transfers to Receivables | (3,583) | |||||
Transfers to Other assets | (1,929) | |||||
Settlements | [1] | 32,860 | 50,290 | 74,965 | ||
Purchases, issuances, sales and settlements, total | (37,083) | 70,182 | 826,637 | |||
Total realized and unrealized gains and (losses): | ||||||
Included in earnings | (31,094) | [1],[2] | (52,924) | [2] | (93,484) | |
Included in Other comprehensive income | 0 | 0 | 0 | |||
Included in earnings and other comprehensive income | (24,985) | [2] | (52,924) | [2] | (93,484) | |
Transfers in and / or out of Level 3 | 0 | 0 | 0 | |||
Ending balance | 281,594 | 343,662 | 326,404 | |||
Level 3 [Member] | Calls and Other [Member] | ||||||
Total realized and unrealized gains and (losses): | ||||||
Included in earnings | [1],[2] | 6,109 | ||||
Loans Held for Investment [Member] | Level 3 [Member] | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Beginning balance | 3,565,716 | 2,488,253 | 1,550,141 | |||
Purchases, issuances, sales and settlements | ||||||
Purchases | 0 | 0 | 0 | |||
Issuances | 1,277,615 | [1] | 1,107,046 | 1,008,065 | ||
Transfer from MSRs carried at amortized cost | 0 | |||||
Sales | 0 | 0 | 0 | |||
Transfers to Loans held for sale - Fair value | (3,803) | |||||
Transfers to Receivables | (3,583) | |||||
Transfers to Other assets | (1,929) | |||||
Settlements | [1] | (444,388) | (243,596) | (151,134) | ||
Purchases, issuances, sales and settlements, total | 823,912 | 863,450 | 856,931 | |||
Total realized and unrealized gains and (losses): | ||||||
Included in earnings | 326,203 | [1],[2] | 214,013 | [2] | 81,181 | |
Included in Other comprehensive income | 0 | 0 | 0 | |||
Included in earnings and other comprehensive income | 326,203 | [2] | 214,013 | [2] | 81,181 | |
Transfers in and / or out of Level 3 | 0 | 0 | 0 | |||
Ending balance | 4,715,831 | 3,565,716 | 2,488,253 | |||
Loans Held for Investment [Member] | Level 3 [Member] | Calls and Other [Member] | ||||||
Total realized and unrealized gains and (losses): | ||||||
Included in earnings | [1],[2] | 0 | ||||
HMBS - Related Borrowings [Member] | Level 3 [Member] | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Beginning balance | (3,433,781) | (2,391,362) | (1,444,252) | |||
Purchases, issuances, sales and settlements | ||||||
Purchases | 0 | 0 | 0 | |||
Issuances | (1,281,543) | [1] | (1,086,795) | (1,024,361) | ||
Transfer from MSRs carried at amortized cost | 0 | |||||
Sales | 0 | 0 | 0 | |||
Transfers to Loans held for sale - Fair value | 0 | |||||
Transfers to Receivables | 0 | |||||
Transfers to Other assets | 0 | |||||
Settlements | [1] | 418,503 | 230,045 | 153,016 | ||
Purchases, issuances, sales and settlements, total | (863,040) | (856,750) | (871,345) | |||
Total realized and unrealized gains and (losses): | ||||||
Included in earnings | (304,735) | [1],[2] | (185,669) | [2] | (75,765) | |
Included in Other comprehensive income | 0 | 0 | 0 | |||
Included in earnings and other comprehensive income | (304,735) | [2] | (185,669) | [2] | (75,765) | |
Transfers in and / or out of Level 3 | 0 | 0 | 0 | |||
Ending balance | (4,601,556) | (3,433,781) | (2,391,362) | |||
HMBS - Related Borrowings [Member] | Level 3 [Member] | Calls and Other [Member] | ||||||
Total realized and unrealized gains and (losses): | ||||||
Included in earnings | [1],[2] | 0 | ||||
Mortgage Backed Securities [Member] | Level 3 [Member] | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Beginning balance | 8,342 | 7,985 | 7,335 | |||
Purchases, issuances, sales and settlements | ||||||
Purchases | 0 | 0 | 0 | |||
Issuances | 0 | [1] | 0 | 0 | ||
Transfer from MSRs carried at amortized cost | 0 | |||||
Sales | 0 | 0 | 0 | |||
Transfers to Loans held for sale - Fair value | 0 | |||||
Transfers to Receivables | 0 | |||||
Transfers to Other assets | 0 | |||||
Settlements | [1] | 0 | 0 | 0 | ||
Purchases, issuances, sales and settlements, total | 0 | 0 | 0 | |||
Total realized and unrealized gains and (losses): | ||||||
Included in earnings | (6,750) | [1],[2] | 357 | [2] | 650 | |
Included in Other comprehensive income | 0 | 0 | 0 | |||
Included in earnings and other comprehensive income | (6,750) | [2] | 357 | [2] | 650 | |
Transfers in and / or out of Level 3 | 0 | 0 | 0 | |||
Ending balance | 1,592 | 8,342 | 7,985 | |||
Mortgage Backed Securities [Member] | Level 3 [Member] | Calls and Other [Member] | ||||||
Total realized and unrealized gains and (losses): | ||||||
Included in earnings | [1],[2] | 0 | ||||
Financing Liability - MSRs Pledged [Member] | Level 3 [Member] | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Beginning balance | (477,707) | (541,704) | (614,441) | |||
Purchases, issuances, sales and settlements | ||||||
Purchases | 0 | 0 | 0 | |||
Issuances | (54,601) | [1] | 0 | 0 | ||
Transfer from MSRs carried at amortized cost | 0 | |||||
Sales | 0 | 0 | 0 | |||
Transfers to Loans held for sale - Fair value | 0 | |||||
Transfers to Receivables | 0 | |||||
Transfers to Other assets | 0 | |||||
Settlements | [1] | 59,190 | 63,997 | 72,737 | ||
Purchases, issuances, sales and settlements, total | 4,589 | 63,997 | 72,737 | |||
Total realized and unrealized gains and (losses): | ||||||
Included in earnings | (41,282) | [1],[2] | 0 | [2] | 0 | |
Included in Other comprehensive income | 0 | 0 | 0 | |||
Included in earnings and other comprehensive income | (35,173) | [2] | 0 | [2] | 0 | |
Transfers in and / or out of Level 3 | 0 | 0 | 0 | |||
Ending balance | (508,291) | (477,707) | (541,704) | |||
Financing Liability - MSRs Pledged [Member] | Level 3 [Member] | Calls and Other [Member] | ||||||
Total realized and unrealized gains and (losses): | ||||||
Included in earnings | [1],[2] | 6,109 | ||||
Derivatives [Member] | Level 3 [Member] | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Beginning balance | 1,836 | 2,042 | 567 | |||
Purchases, issuances, sales and settlements | ||||||
Purchases | 655 | 1,337 | 2,506 | |||
Issuances | 0 | [1] | 0 | 0 | ||
Transfer from MSRs carried at amortized cost | 0 | |||||
Sales | 0 | 0 | 0 | |||
Transfers to Loans held for sale - Fair value | 0 | |||||
Transfers to Receivables | 0 | |||||
Transfers to Other assets | 0 | |||||
Settlements | [1] | (445) | (156) | 346 | ||
Purchases, issuances, sales and settlements, total | 210 | 1,181 | 2,852 | |||
Total realized and unrealized gains and (losses): | ||||||
Included in earnings | 10 | [1],[2] | (1,387) | [2] | (1,377) | |
Included in Other comprehensive income | 0 | 0 | 0 | |||
Included in earnings and other comprehensive income | 10 | [2] | (1,387) | [2] | (1,377) | |
Transfers in and / or out of Level 3 | 0 | 0 | 0 | |||
Ending balance | 2,056 | 1,836 | 2,042 | |||
Derivatives [Member] | Level 3 [Member] | Calls and Other [Member] | ||||||
Total realized and unrealized gains and (losses): | ||||||
Included in earnings | [1],[2] | 0 | ||||
MSRs [Member] | Level 3 [Member] | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Beginning balance | 679,256 | 761,190 | 93,901 | |||
Purchases, issuances, sales and settlements | ||||||
Purchases | 0 | 0 | 1,007 | |||
Issuances | (2,214) | [1] | (1,548) | (2,428) | ||
Transfer from MSRs carried at amortized cost | 839,157 | |||||
Sales | (540) | (148) | (72,274) | |||
Transfers to Loans held for sale - Fair value | 0 | |||||
Transfers to Receivables | 0 | |||||
Transfers to Other assets | 0 | |||||
Settlements | [1] | 0 | 0 | 0 | ||
Purchases, issuances, sales and settlements, total | (2,754) | (1,696) | 765,462 | |||
Total realized and unrealized gains and (losses): | ||||||
Included in earnings | (4,540) | [1],[2] | (80,238) | [2] | (98,173) | |
Included in Other comprehensive income | 0 | 0 | 0 | |||
Included in earnings and other comprehensive income | (4,540) | [2] | (80,238) | [2] | (98,173) | |
Transfers in and / or out of Level 3 | 0 | 0 | 0 | |||
Ending balance | 671,962 | $ 679,256 | $ 761,190 | |||
MSRs [Member] | Level 3 [Member] | Calls and Other [Member] | ||||||
Total realized and unrealized gains and (losses): | ||||||
Included in earnings | [1],[2] | $ 0 | ||||
[1] | On September 1, 2017, Ocwen transferred MSRs with UPB of $15.9 billion to NRZ and received a lump-sum payment of $54.6 million. The fair value of the portion of the Financing Liability - MSRs Pledged recognized in connection with the transfer declined $42.0 million in 2017 primarily due to $37.6 million recognized at the time of the initial transfer of the MSRs, which had a contractual servicing fee rate of 33.4 bps as compared to the weighted average of 47.1 bps for the loan characteristics used to determine the lump sum payment. See Note 8 — Rights to MSRs. | |||||
[2] | Total gains (losses) attributable to derivative financial instruments still held at December 31, 2017 and 2016 were $0.1 million, $0.3 million and $(1.0) million for 2017, 2016 and 2015, respectively. Total losses for 2017, 2016 and 2015 attributable to MSRs still held at December 31, 2017, 2016 and 2015 were $4.5 million, $78.3 million and $90.3 million, respectively. |
Fair Value - Summary of Recon68
Fair Value - Summary of Reconciliation of the Changes in Fair Value of Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis (Footnote) (Details) - USD ($) $ in Thousands | Sep. 01, 2017 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Proceeds from sale of mortgage servicing rights accounted for as financing | $ (54,601) | $ 0 | $ 0 | ||
Gain (loss) attributable to derivatives | 100 | 300 | (1,000) | ||
Losses attributable to MSRs held | (4,500) | $ (78,300) | $ (90,300) | ||
NRZ [Member] | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Transfers upon receipt of consents, MSRs | $ 15,900,000 | ||||
Proceeds from sale of mortgage servicing rights accounted for as financing | (54,600) | ||||
Decrease in fair value of portion of Financing liability - MSRs pledged | $ 37,600 | $ 42,000 | |||
Contractual servicing fee rate of transferred MSRs | 0.334% | ||||
Weighted average contractual servicing fee rates | 0.471% |
Fair Value - Schedule of Signif
Fair Value - Schedule of Significant Assumptions used in Valuation (Details) - $ / loan | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Loans Held for Investment [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Life | 6 years 4 months 24 days | 6 years 1 month 6 days |
Repayment rate | 13.10% | 20.90% |
Weighted average discount rate | 3.20% | 3.30% |
Mortgage Servicing Rights - Amortized Costs [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Weighted average prepayment speed | 8.80% | 8.90% |
Weighted average delinquency rate | 10.90% | 11.10% |
Advance financing cost | 5 years | 5 years |
Interest rate for computing float earnings | 5 years | 5 years |
Weighted average discount rate | 9.20% | 8.90% |
Weighted average cost to service (in dollars) | 108 | 108 |
Fair Value Agency Mortgage Servicing Rights [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Weighted average prepayment speed | 8.10% | 8.40% |
Weighted average delinquency rate | 1.00% | 1.00% |
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 | 64 |
Fair Value Non-Agency Mortgage Servicing Rights [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Weighted average prepayment speed | 16.60% | 16.50% |
Weighted average delinquency rate | 28.50% | 29.30% |
Interest rate for computing float earnings | 5 years | |
Fair value inputs financing costs float earnings, basis spread | 0.50% | |
Fair value input, interest rate | 2.75% | |
Weighted average discount rate | 13.00% | 14.90% |
Weighted average cost to service (in dollars) | 305 | 307 |
Automotive Dealer Financing Notes [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Life | 2 months 19 days | 3 months 7 days |
Weighted average discount rate | 10.00% | 10.00% |
Fair value inputs average note rate | 8.50% | 8.30% |
Fair value inputs loan loss rate | 21.50% | 11.30% |
HMBS - Related Borrowings [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Life | 6 years 4 months 24 days | 5 years 1 month 6 days |
Repayment rate | 13.10% | 20.90% |
Weighted average discount rate | 3.10% | 2.70% |
Mortgage Servicing Rights Pledged [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Weighted average prepayment speed | 17.00% | 17.00% |
Weighted average delinquency rate | 28.90% | 29.80% |
Interest rate for computing float earnings | 5 years | |
Fair value inputs financing costs float earnings, basis spread | 0.50% | |
Fair value input, interest rate | 2.75% | |
Weighted average discount rate | 13.70% | 14.90% |
Weighted average cost to service (in dollars) | 311 | 313 |
LIBOR [Member] | Fair Value Non-Agency Mortgage Servicing Rights [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Interest rate for computing float earnings | 1 month | |
Fair value input, interest rate | 3.50% | |
LIBOR [Member] | Mortgage Servicing Rights Pledged [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Interest rate for computing float earnings | 1 month | |
Fair value input, interest rate | 3.50% | |
Minimum [Member] | Loans Held for Investment [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Life | 4 years 4 months 24 days | 5 years 6 months |
Repayment rate | 5.40% | 5.20% |
Minimum [Member] | HMBS - Related Borrowings [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Life | 4 years 4 months 24 days | 4 years 6 months |
Repayment rate | 5.40% | 5.20% |
Maximum [Member] | Loans Held for Investment [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Life | 8 years 1 month 6 days | 8 years 8 months 12 days |
Repayment rate | 51.90% | 53.80% |
Maximum [Member] | HMBS - Related Borrowings [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Life | 8 years 1 month 6 days | 8 years 8 months 12 days |
Repayment rate | 51.90% | 53.80% |
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, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||||
Movement In Loans Held For Sale At Fair Value [Roll Forward] | ||||||
Beginning balance | $ 284,632 | [1] | $ 309,054 | [1] | $ 401,120 | |
Originations and purchases | 2,678,372 | 4,211,871 | 3,944,509 | |||
Proceeds from sales | (2,785,422) | (4,236,158) | (4,061,217) | |||
Principal collections | (4,867) | (11,620) | (8,647) | |||
Transfers from Loans held for investment | 0 | 0 | ||||
Transfers from Loans held for sale - Lower of cost or fair value | 0 | 3,266 | 1,200 | |||
Gain on sale of loans | 35,429 | 13,421 | 42,053 | |||
Increase (decrease) in fair value of loans | 151 | (7,030) | (9,066) | |||
Other | 2,164 | 1,828 | (898) | |||
Ending balance | [1] | $ 214,262 | $ 284,632 | $ 309,054 | ||
[1] | At December 31, 2017, 2016 and 2015, the balances include $5.0 million, $4.9 million and $11.9 million, respectively, of fair value adjustments. |
Loans Held for Sale - Summary71
Loans Held for Sale - Summary of Activity in Balance of Loans Held for Sale, at Fair Value (Footnote) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Receivables [Abstract] | |||
Fair value adjustments of loans held-for-sale | $ 5 | $ 4.9 | $ 11.9 |
Loans Held for Sale - Narrative
Loans Held for Sale - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Mar. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Gain on loans held for sale, net | $ 103,402 | $ 90,391 | $ 134,969 | |
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 | 195,200 | |||
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 | $ 8,400 | |||
Unrelated Party [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Gain on loans held for sale, net | $ 20,100 | |||
UPB of loans held for sale | $ 75,700 |
Loans Held for Sale - Summary73
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, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||||
Movement In Loans Held For Sale At Fair Value [Roll Forward] | ||||||
Beginning balance | $ 29,374 | [1] | $ 104,992 | [1] | $ 87,492 | |
Purchases | 1,016,791 | 1,878,561 | 1,056,172 | |||
Proceeds from sales | (861,569) | (1,699,427) | (1,001,939) | |||
Principal collections | (10,207) | (22,607) | (53,400) | |||
Transfers to Receivables, net | (171,797) | (256,336) | (53,468) | |||
Transfers to Other assets | (875) | (7,675) | (18,594) | |||
Transfers to Loans held for sale - Fair value | 0 | (3,266) | (1,200) | |||
Gain on sale of loans | 11,683 | 24,565 | 43,449 | |||
Decrease in valuation allowance | 2,746 | 4,594 | 35,018 | |||
Other | 7,950 | 5,973 | 11,462 | |||
Ending balance | [1] | $ 24,096 | $ 29,374 | $ 104,992 | ||
[1] | At December 31, 2017, 2016 and 2015, the balances include $19.6 million, $24.8 million and $85.9 million, respectively, of loans that we were required to repurchase from Ginnie Mae guaranteed securitizations as part of our servicing obligations. Repurchased loans are modified or otherwise remediated through loss mitigation activities or are reclassified to receivables. |
Loans Held for Sale - Summary74
Loans Held for Sale - Summary of Activity in Balance of Loans Held for Sale, at Lower of Cost or Fair Value (Footnote) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Ginnie Mae [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans held for sale, at lower of cost or fair value | $ 19.6 | $ 24.8 | $ 85.9 |
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, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Allowance for Loan and Lease Losses [Roll Forward] | |||
Beginning balance | $ 10,064 | $ 14,658 | $ 49,676 |
Provision | 3,109 | 3,599 | (400) |
Transfer from Liability for indemnification obligations (Other liabilities) | 3,246 | 2,368 | 1,180 |
Sales of loans | (9,415) | (10,208) | (37,776) |
Other | 314 | (353) | 1,978 |
Ending balance | $ 7,318 | $ 10,064 | $ 14,658 |
Loans Held for Sale - Summary76
Loans Held for Sale - Summary of Activity in Gain on Loans Held for Sale, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Gain on sales of loans, net | $ 114,247 | $ 93,308 | $ 152,970 |
Change in fair value of IRLCs | (3,089) | (55) | 14 |
Change in fair value of loans held for sale | 1,475 | 4,595 | (8,525) |
Loss on economic hedge instruments | (8,529) | (6,592) | (8,675) |
Other | (702) | (865) | (815) |
Gain on loans held for sale, net | 103,402 | 90,391 | 134,969 |
MSRs Retained on Transfers of Forward Loans [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Gain on sales of loans, net | 20,900 | 36,049 | 35,968 |
Fair Value Gains Related to Transfers of Reverse Mortgage Loans, Net [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Gain on sales of loans, net | 50,194 | 24,742 | 31,857 |
Gain on Sale of Repurchased Ginnie Mae Loans [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Gain on sales of loans, net | 11,683 | 24,565 | 22,960 |
Other, Net [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Gain on sales of loans, net | $ 31,470 | $ 7,952 | $ 62,185 |
Advances - Schedule of Advance
Advances - Schedule of Advance Payments by Financial Institution on Foreclosed Properties (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Advances On Behalf of Borrowers [Line Items] | ||||
Advances | $ 228,258 | $ 295,834 | ||
Allowance for losses | (16,465) | (37,952) | $ (41,901) | $ (70,034) |
Advances, net | 211,793 | 257,882 | $ 444,298 | $ 893,914 |
Principal And Interest [Member] | ||||
Advances On Behalf of Borrowers [Line Items] | ||||
Advances | 20,207 | 31,334 | ||
Taxes And Insurance [Member] | ||||
Advances On Behalf of Borrowers [Line Items] | ||||
Advances | 144,454 | 170,131 | ||
Foreclosures Bankruptcy And Other [Member] | ||||
Advances On Behalf of Borrowers [Line Items] | ||||
Advances | $ 63,597 | $ 94,369 |
Advances - Narrative (Details)
Advances - Narrative (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Advances [Abstract] | ||
Sold Advances | $ 18.1 | $ 29 |
Advances - Schedule of Activity
Advances - Schedule of Activity in Advances (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Advances [Roll Forward] | ||||
Advances, beginning balance | $ 257,882 | $ 444,298 | $ 893,914 | |
Sales of advances | [1] | (444) | (24,631) | (253,335) |
Collections of advances, charge-offs and other, net | (67,132) | (165,734) | (224,414) | |
Net decrease in allowance for losses | 21,487 | 3,949 | 28,133 | |
Advances, ending balance | $ 211,793 | $ 257,882 | $ 444,298 | |
[1] | 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. |
Advances Schedule of Change in
Advances Schedule of Change in Allowance for Losses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | |||
Beginning balance | $ 37,952 | $ 41,901 | $ 70,034 |
Provision | 21,429 | (2,043) | 61,445 |
Net charge-offs and other | (42,916) | (1,906) | (89,578) |
Ending balance | $ 16,465 | $ 37,952 | $ 41,901 |
Match Funded Assets - Schedule
Match Funded Assets - Schedule of Match Funded Advances on Residential Loans (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | |
Match Funded Advances [Line Items] | |||
Automotive dealer financing notes, net | $ 0 | $ 33,224 | |
Match funded assets | 1,177,357 | 1,451,964 | |
Automotive Dealer Financing Notes [Member] | |||
Match Funded Advances [Line Items] | |||
Allowance for losses | [1] | (2,635) | 0 |
Automotive dealer financing notes, net | 32,757 | 0 | |
Match funded assets | [1] | 35,392 | 0 |
Residential Mortgage [Member] | |||
Match Funded Advances [Line Items] | |||
Match funded assets | 1,144,600 | 1,451,964 | |
Residential Mortgage [Member] | Principal And Interest [Member] | |||
Match Funded Advances [Line Items] | |||
Match funded assets | 523,248 | 711,272 | |
Residential Mortgage [Member] | Taxes And Insurance [Member] | |||
Match Funded Advances [Line Items] | |||
Match funded assets | 439,857 | 530,946 | |
Residential Mortgage [Member] | Foreclosures Bankruptcy And Other [Member] | |||
Match Funded Advances [Line Items] | |||
Match funded assets | $ 181,495 | $ 209,746 | |
[1] | Automotive dealer financing notes which have not been pledged to our automotive dealer loan financing facility are reported as Other assets. See Note 11 — Other Assets. |
Match Funded Assets - Schedul82
Match Funded Assets - Schedule of Activity in Match Funded Advances (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Match Funded Advances [Roll Forward] | |||
Increase in allowance for losses | $ 21,487 | $ 3,949 | $ 28,133 |
Automotive Dealer Financing Notes [Member] | |||
Match Funded Advances [Roll Forward] | |||
Beginning balance | 0 | ||
Transfer from Other assets | 25,180 | ||
Sales | 0 | ||
New advances (collections), net | (10,212) | ||
Increase in allowance for losses | (2,635) | ||
Ending balance | 32,757 | 0 | |
Residential Mortgage [Member] | |||
Match Funded Advances [Roll Forward] | |||
Beginning balance | 1,451,964 | 1,706,768 | 2,409,442 |
Sales | (691) | (8,923) | (308,990) |
New advances (collections), net | (306,673) | (245,881) | (393,684) |
Ending balance | $ 1,144,600 | $ 1,451,964 | $ 1,706,768 |
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, 2017 | 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 | $ 0 | $ (787,142) | ||
Estimated fair value at end of year | 671,962 | 679,256 | 761,190 | $ 93,901 | |
Mortgage Servicing Rights - Amortized Costs [Member] | |||||
Servicing Asset at Amortized Cost, Balance [Roll Forward] | |||||
Beginning balance, MSRs | 363,722 | 377,379 | 1,820,091 | ||
Fair value election - transfer of MSRs carried at fair value | [1] | 0 | 0 | (787,142) | |
Additions recognized in connection with asset acquisitions | 1,658 | 17,356 | 12,355 | ||
Additions recognized on the sale of mortgage loans | 20,738 | 37,230 | 34,962 | ||
Sales | (1,066) | (24,452) | (586,352) | ||
Servicing transfers and adjustments | 252 | 0 | 0 | ||
Mortgage servicing rights, gross | 385,304 | 407,513 | 493,914 | ||
Decrease (increase) in impairment valuation allowance | [2] | 3,366 | (10,813) | (17,341) | |
Amortization | (51,788) | (32,978) | (99,194) | ||
Ending balance, MSRs | 336,882 | 363,722 | 377,379 | ||
Estimated fair value at end of year | $ 418,745 | $ 467,911 | $ 461,555 | ||
[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. We recorded a cumulative-effect adjustment of $52.0 million (before deferred income taxes of $9.2 million) to retained earnings as of January 1, 2015 to reflect the excess of the fair value of these MSRs over their carrying amount. | ||||
[2] | Impairment of MSRs is recognized in Servicing and origination expense in the consolidated statements of operations. See Note 3 — Fair Value for additional information regarding impairment and the valuation allowance. |
Mortgage Servicing - Summary 84
Mortgage Servicing - Summary of Activity in Carrying Value of Amortization Method Servicing Assets (Footnote) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Servicing Asset at Amortized Cost [Line Items] | |||
Fair value measurement of non-agency MSRs, cumulative-effect on retained earnings | $ 0 | $ 0 | $ 52,015 |
Non Agency Mortgage Servicing Rights [Member] | |||
Servicing Asset at Amortized Cost [Line Items] | |||
Fair value measurement of non-agency MSRs, cumulative-effect on retained earnings | 52,000 | ||
Deferred income taxes | $ 9,200 |
Mortgage Servicing - Schedule o
Mortgage Servicing - Schedule of Estimated Amortization Expense for MSRs (Details) - Mortgage Servicing Rights - Amortized Costs [Member] $ in Thousands | Dec. 31, 2017USD ($) |
Servicing Asset at Amortized Cost [Line Items] | |
2,018 | $ 46,705 |
2,019 | 38,141 |
2,020 | 34,824 |
2,021 | 33,578 |
2,022 | $ 30,552 |
Mortgage Servicing - Summary 86
Mortgage Servicing - Summary of Activity Related to Fair Value Servicing Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Servicing Asset at Fair Value, Amount [Roll Forward] | ||||
Beginning balance | $ 679,256 | $ 761,190 | $ 93,901 | |
Fair value election - transfer from MSRs carried at amortized cost | 0 | 0 | 787,142 | |
Cumulative effect of fair value election | 0 | 0 | 52,015 | |
Sales | (540) | (148) | (72,274) | |
Additions recognized on the sale of residential mortgage loans | 162 | 0 | 1,007 | |
Servicing transfers and adjustments | (2,376) | (1,548) | (2,428) | |
Changes in valuation inputs or other assumptions | [1] | 86,964 | 305 | 10,045 |
Realization of expected future cash flows and other changes | [1] | (91,504) | (80,543) | (108,218) |
Ending balance | 671,962 | 679,256 | 761,190 | |
Fair Value Agency Mortgage Servicing Rights [Member] | ||||
Servicing Asset at Fair Value, Amount [Roll Forward] | ||||
Beginning balance | 13,357 | 15,071 | 93,901 | |
Fair value election - transfer from MSRs carried at amortized cost | 0 | 0 | 0 | |
Cumulative effect of fair value election | 0 | 0 | 0 | |
Sales | 0 | (3) | (70,930) | |
Additions recognized on the sale of residential mortgage loans | 162 | 0 | 0 | |
Servicing transfers and adjustments | 0 | 0 | 0 | |
Changes in valuation inputs or other assumptions | [1] | 243 | 305 | (639) |
Realization of expected future cash flows and other changes | [1] | (1,802) | (2,016) | (7,261) |
Ending balance | 11,960 | 13,357 | 15,071 | |
Fair Value Non-Agency Mortgage Servicing Rights [Member] | ||||
Servicing Asset at Fair Value, Amount [Roll Forward] | ||||
Beginning balance | 665,899 | 746,119 | 0 | |
Fair value election - transfer from MSRs carried at amortized cost | 0 | 0 | 787,142 | |
Cumulative effect of fair value election | 0 | 0 | 52,015 | |
Sales | (540) | (145) | (1,344) | |
Additions recognized on the sale of residential mortgage loans | 0 | 0 | 1,007 | |
Servicing transfers and adjustments | (2,376) | (1,548) | (2,428) | |
Changes in valuation inputs or other assumptions | [1] | 86,721 | 0 | 10,684 |
Realization of expected future cash flows and other changes | [1] | (89,702) | (78,527) | (100,957) |
Ending balance | $ 660,002 | $ 665,899 | $ 746,119 | |
[1] | Changes in fair value are recognized in Servicing and origination expense in the consolidated statements of operations. |
Mortgage Servicing - Summary 87
Mortgage Servicing - Summary of Estimated Change in the Value of MSRs Carried at Fair Value (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Transfers and Servicing [Abstract] | |
Weighted average prepayment speeds, 10% | $ (69,646) |
Weighted average prepayment speeds, 20% | (133,017) |
Discount rate (Option-adjusted spread), 10% | (14,167) |
Discount rate (Option-adjusted spread), 20% | $ (27,901) |
Mortgage Servicing - Schedule88
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, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Schedule of Servicing and Subservicing Portfolio [Line Items] | ||||
Servicing | $ 75,469,327 | $ 86,049,298 | $ 100,058,745 | |
Subservicing | 2,063,669 | 4,423,017 | 13,869,826 | |
NRZ | [1] | 101,819,557 | 118,712,748 | 137,142,809 |
Assets Serviced | 179,352,553 | 209,185,063 | 251,071,380 | |
Residential [Member] | ||||
Schedule of Servicing and Subservicing Portfolio [Line Items] | ||||
Servicing | [2] | 75,469,327 | 86,049,298 | 100,058,745 |
Subservicing | [2] | 2,063,669 | 4,330,084 | 13,764,558 |
NRZ | [1],[2] | 101,819,557 | 118,712,748 | 137,142,809 |
Assets Serviced | [2] | 179,352,553 | 209,092,130 | 250,966,112 |
Commercial [Member] | ||||
Schedule of Servicing and Subservicing Portfolio [Line Items] | ||||
Servicing | [3] | 0 | 0 | 0 |
Subservicing | [3] | 0 | 92,933 | 105,268 |
NRZ | [1],[3] | 0 | 0 | 0 |
Assets Serviced | [3] | $ 0 | $ 92,933 | $ 105,268 |
[1] | UPB of loans serviced for which the Rights to MSRs have been sold to NRZ, including those subserviced for which third-party consents have been received and the MSRs have been transferred to NRZ. | |||
[2] | Includes foreclosed real estate and small-balance commercial assets. | |||
[3] | Consists of large-balance foreclosed real estate. During 2017, we sold or transferred servicing on the remaining managed assets. |
Mortgage Servicing - Narrative
Mortgage Servicing - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Servicing Asset at Amortized Cost [Line Items] | |||
Unpaid principal balance of non-agency and whole loans servicing agreements with minimum servicer ratings | $ 29,800 | ||
Unpaid principal balance of non-agency and whole loans servicing agreements with termination rights triggered | $ 9,400 | ||
Percentage of non-agency and whole loans servicing agreements with termination rights triggered of servicing portfolio | 7.00% | ||
Float balances | $ 1,500 | $ 2,100 | $ 2,200 |
Income recognized in connection with execution of clean-up call on securitization trusts | 14.8 | ||
Discount on repurchase price | 2.8 | ||
Agency And Non-Agency Mortgage Servicing Rights [Member] | |||
Servicing Asset at Amortized Cost [Line Items] | |||
UPB of MSRs sold | $ 219.4 | $ 3,700 | $ 87,600 |
Mortgage Servicing - Summary 90
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, 2017USD ($)loan | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | ||
Mortgage Loans on Real Estate [Line Items] | ||||
Amount | $ 179,352,553 | $ 209,185,063 | $ 251,071,380 | |
Residential Mortgage [Member] | ||||
Mortgage Loans on Real Estate [Line Items] | ||||
Amount | [1] | $ 179,352,553 | $ 209,092,130 | $ 250,966,112 |
Count | loan | 1,221,695 | |||
California [Member] | Residential Mortgage [Member] | ||||
Mortgage Loans on Real Estate [Line Items] | ||||
Amount | $ 40,548,633 | |||
Count | loan | 164,652 | |||
New York [Member] | Residential Mortgage [Member] | ||||
Mortgage Loans on Real Estate [Line Items] | ||||
Amount | $ 17,132,957 | |||
Count | loan | 72,500 | |||
Florida [Member] | Residential Mortgage [Member] | ||||
Mortgage Loans on Real Estate [Line Items] | ||||
Amount | $ 15,133,283 | |||
Count | loan | 114,070 | |||
New Jersey [Member] | Residential Mortgage [Member] | ||||
Mortgage Loans on Real Estate [Line Items] | ||||
Amount | $ 8,843,459 | |||
Count | loan | 43,819 | |||
Texas [Member] | Residential Mortgage [Member] | ||||
Mortgage Loans on Real Estate [Line Items] | ||||
Amount | $ 8,130,540 | |||
Count | loan | 95,999 | |||
Other [Member] | Residential Mortgage [Member] | ||||
Mortgage Loans on Real Estate [Line Items] | ||||
Amount | $ 89,563,681 | |||
Count | loan | 730,655 | |||
[1] | Includes foreclosed real estate and small-balance commercial assets. |
Mortgage Servicing - Schedule91
Mortgage Servicing - Schedule of Components of Servicing and Subservicing Fees (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Transfers and Servicing [Abstract] | ||||
Servicing | $ 257,419 | $ 293,210 | $ 453,445 | |
Subservicing | 7,775 | 21,427 | 58,384 | |
NRZ | 549,411 | 633,545 | 694,833 | |
Servicing and Subservicing fees, total | 814,605 | 948,182 | 1,206,662 | |
Late charges | 61,763 | 66,709 | 82,690 | |
Home Affordable Modification Program (HAMP) fees | [1] | 43,310 | 110,367 | 135,036 |
Custodial accounts (float earnings) | 25,237 | 8,969 | 15,870 | |
Loan collection fees | 22,770 | 27,213 | 31,763 | |
Other | 21,691 | 25,180 | 59,776 | |
Fees, total | $ 989,376 | $ 1,186,620 | $ 1,531,797 | |
[1] | The HAMP program expired on December 31, 2016. Borrowers who had requested assistance or to whom an offer of assistance had been extended as of that date had until September 30, 2017 to finalize their modification. |
Rights to MSRs - Narrative (Det
Rights to MSRs - Narrative (Details) - USD ($) $ in Thousands | Jan. 18, 2018 | Sep. 01, 2017 | Jan. 31, 2018 | Apr. 30, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Servicing Assets at Fair Value [Line Items] | |||||||
Proceeds from sale of mortgage servicing rights accounted for as financing | $ 54,601 | $ 0 | $ 0 | ||||
Threshold percentage to initiate clean-up call rights | 0.50% | 0.50% | |||||
NRZ [Member] | |||||||
Servicing Assets at Fair Value [Line Items] | |||||||
Initial term to subservice mortgage servicing rights | 5 years | ||||||
Transfers upon receipt of consents, MSRs | $ 15,900,000 | ||||||
Proceeds from sale of mortgage servicing rights accounted for as financing | $ 54,600 | ||||||
Term of extended subservicing agreement following initial term | 3 months | ||||||
Compensatory fee payable | 10,500 | 14,300 | |||||
Proceeds from execution of clean-up calls | $ 5,900 | $ 3,100 | $ 2,600 | ||||
NRZ [Member] | Subsequent Event [Member] | |||||||
Servicing Assets at Fair Value [Line Items] | |||||||
Proceeds from sale of mortgage servicing rights accounted for as financing | $ 279,600 | $ 279,600 |
Rights to MSRs - Schedule of In
Rights to MSRs - Schedule of Interest Expense Related to Financial Liability (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Servicing Liabilities at Fair Value [Line Items] | |||
Changes in fair value | $ (41,282) | $ 0 | $ 0 |
NRZ [Member] | |||
Servicing Liabilities at Fair Value [Line Items] | |||
Servicing fees collected on behalf of NRZ | 549,411 | 633,545 | 694,833 |
Less: Subservicing fee retained by Ocwen | 295,192 | 337,727 | 355,527 |
Net servicing fees remitted to NRZ | 254,219 | 295,818 | 339,306 |
Changes in fair value | 83,300 | 2,580 | 0 |
Runoff, settlement and other | 59,190 | 63,997 | 70,513 |
Interest expense on NRZ/HLSS financing liability | 236,311 | 234,401 | 268,793 |
NRZ [Member] | 2017 Agreements [Member] | |||
Servicing Liabilities at Fair Value [Line Items] | |||
Changes in fair value | $ (42,018) | $ 0 | $ 0 |
Receivables - Schedule of Recei
Receivables - Schedule of Receivables (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Receivables [Abstract] | ||
Government-insured loan claims | $ 114,971 | $ 133,063 |
Due from custodial accounts | 36,122 | 44,761 |
Reimbursable expenses | 31,709 | 29,358 |
Due from NRZ | 14,924 | 21,837 |
Other | 11,959 | 27,086 |
Servicing | 209,685 | 256,105 |
Income taxes receivable | 36,831 | 61,932 |
Other receivables | 19,600 | 21,125 |
Other receivables, gross | 266,116 | 339,162 |
Allowance for losses | (66,587) | (73,442) |
Receivables, total | $ 199,529 | $ 265,720 |
Receivables Schedule of Changes
Receivables Schedule of Changes in Allowance for Loan Losses (Details) - Delinquent FHA or VA Insured Loans [Member] - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Beginning balance | $ 53,258 | $ 20,571 | $ 9,976 |
Provision | 40,424 | 61,322 | 33,710 |
Net charge-offs and other | (40,342) | (28,635) | (23,115) |
Ending balance | $ 53,340 | $ 53,258 | $ 20,571 |
Receivables - Narrative (Detail
Receivables - Narrative (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Delinquent FHA or VA Insured Loans [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Allowance for losses related to defaulted FHA or VA insured loans | $ 53,340 | $ 53,258 | $ 20,571 | $ 9,976 |
Premises and Equipment - Schedu
Premises and Equipment - Schedule of Premises and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | $ 119,675 | $ 148,117 |
Less accumulated depreciation and amortization | (82,669) | (85,373) |
Premises and equipment, net | 37,006 | 62,744 |
Computer Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | 43,137 | 58,322 |
Computer Hardware [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | 29,848 | 35,192 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | 23,425 | 25,975 |
Buildings [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | 9,689 | 9,689 |
Office Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | 8,071 | 9,200 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | 4,141 | 6,825 |
Other [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | $ 1,364 | $ 2,914 |
Other Assets - Schedule of Othe
Other Assets - Schedule of Other Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | |
Other Assets [Abstract] | |||
Contingent loan repurchase asset | $ 431,492 | $ 246,081 | |
Debt service accounts | 33,726 | 42,822 | |
Other prepaid expenses | 22,559 | 22,271 | |
Prepaid representation, warranty and indemnification claims - Agency MSR sale | 20,173 | 34,917 | |
Prepaid lender fees, net | [1] | 9,496 | 9,023 |
Other restricted cash | 9,179 | 3,027 | |
Prepaid income taxes | [2] | 5,621 | 8,392 |
Derivatives, at fair value | 5,429 | 9,279 | |
Interest-earning time deposits | 4,739 | 6,454 | |
Real estate | 3,070 | 5,249 | |
Mortgage-backed securities, at fair value | 1,592 | 8,342 | |
Automotive dealer financing notes, net | 0 | 33,224 | |
Other | 7,715 | 9,023 | |
Other assets | $ 554,791 | $ 438,104 | |
[1] | We amortize these costs to the earlier of the scheduled amortization date, contractual maturity date or prepayment date of the debt | ||
[2] | 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 Ot99
Other Assets - Schedule of Other Assets (Footnote) (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Other Assets [Abstract] | |
Period for deferred tax effects being amortized to income tax expense | 7 years |
Other Assets - Narrative (Detai
Other Assets - Narrative (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Other Assets [Abstract] | ||
Automotive dealer financing notes, gross | $ 7.7 | $ 37.6 |
Allowance for financing notes | $ 7.7 | $ 4.4 |
Other Assets - Schedule of Chan
Other Assets - Schedule of Changes in Allowance of Automotive Dealer Financing Notes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | |||
Beginning balance | $ 10,064 | $ 14,658 | $ 49,676 |
Ending balance | 7,318 | 10,064 | 14,658 |
Automotive Dealer Financing Notes [Member] | |||
Allowance for Doubtful Accounts Receivable [Roll Forward] | |||
Beginning balance | 4,371 | 27 | 0 |
Provision | 3,293 | 4,344 | 27 |
Ending balance | $ 7,664 | $ 4,371 | $ 27 |
Borrowings - Schedule of Match
Borrowings - Schedule of Match Funded Liabilities (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | |||
Debt Instrument [Line Items] | ||||
Maturity | [1] | Dec. 31, 2020 | ||
Available borrowing capacity | $ 12,408,000 | |||
Match funded liabilities | 998,618,000 | $ 1,280,997,000 | ||
Ocwen Master Advance Receivables Trust (OMART) [Member] | ||||
Debt Instrument [Line Items] | ||||
Available borrowing capacity | [2] | $ 75,810,000 | ||
Weighted average interest rate | [3] | 3.02% | 3.14% | |
Match funded liabilities | $ 884,190,000 | $ 1,123,182,000 | ||
Advance Receivables Backed Notes - Series 2014-VF3 [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | ||||
Debt Instrument [Line Items] | ||||
Maturity | [4] | Aug. 31, 2047 | ||
Debt Instrument Amortization Date | [4] | Aug. 2017 | ||
Available borrowing capacity | [2] | $ 0 | ||
Weighted average interest rate | [3] | 0.00% | 3.12% | |
Match funded liabilities | $ 0 | $ 74,394,000 | ||
Advance Receivables Backed Notes - Series 2014-VF4 [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | ||||
Debt Instrument [Line Items] | ||||
Maturity | [4],[5] | Aug. 31, 2048 | ||
Debt Instrument Amortization Date | [4],[5] | Aug. 2018 | ||
Available borrowing capacity | [2],[5] | $ 37,905,000 | ||
Weighted average interest rate | [3],[5] | 4.29% | 3.12% | |
Match funded liabilities | [5] | $ 67,095,000 | $ 74,394,000 | |
Advance Receivables Backed Notes - Series 2015-VF5 [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | ||||
Debt Instrument [Line Items] | ||||
Maturity | [4],[5] | Aug. 31, 2048 | ||
Debt Instrument Amortization Date | [4],[5] | Aug. 2018 | ||
Available borrowing capacity | [2],[5] | $ 37,905,000 | ||
Weighted average interest rate | [3],[5] | 4.29% | 3.12% | |
Match funded liabilities | [5] | $ 67,095,000 | $ 74,394,000 | |
Advance Receivables Backed Notes - Series 2015-T3 [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | ||||
Debt Instrument [Line Items] | ||||
Maturity | [4],[6] | Nov. 30, 2047 | ||
Debt Instrument Amortization Date | [4],[6] | Nov. 2017 | ||
Available borrowing capacity | [2],[6] | $ 0 | ||
Weighted average interest rate | [3],[6] | 0.00% | 3.48% | |
Match funded liabilities | [6] | $ 0 | $ 400,000,000 | |
Advance Receivables Backed Notes - Series 2016-T1 [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | ||||
Debt Instrument [Line Items] | ||||
Maturity | [4],[6] | Aug. 31, 2048 | ||
Debt Instrument Amortization Date | [4],[6] | Aug. 2018 | ||
Available borrowing capacity | [2],[6] | $ 0 | ||
Weighted average interest rate | [3],[6] | 2.77% | 2.77% | |
Match funded liabilities | [6] | $ 265,000,000 | $ 265,000,000 | |
Advance Receivables Backed Notes - Series 2016-T2 [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | ||||
Debt Instrument [Line Items] | ||||
Maturity | [4],[6] | Aug. 31, 2049 | ||
Debt Instrument Amortization Date | [4],[6] | Aug. 2019 | ||
Available borrowing capacity | [2],[6] | $ 0 | ||
Weighted average interest rate | [3],[6] | 2.99% | 2.99% | |
Match funded liabilities | [6] | $ 235,000,000 | $ 235,000,000 | |
Advance Receivables Backed Notes - Series 2017-T1 [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | ||||
Debt Instrument [Line Items] | ||||
Maturity | [4],[6] | Sep. 30, 2048 | ||
Debt Instrument Amortization Date | [4],[6] | Sep. 2018 | ||
Available borrowing capacity | [2],[6] | $ 0 | ||
Weighted average interest rate | [3],[6] | 2.64% | 0.00% | [7] |
Match funded liabilities | [6] | $ 250,000,000 | $ 0 | |
Advance Receivables Backed Notes, Series 2014-VF1 [Member] | Total Ocwen Servicer Advance Receivables Trust III (OSARTIII) [Member] | ||||
Debt Instrument [Line Items] | ||||
Maturity | [4],[8] | Dec. 31, 2048 | ||
Debt Instrument Amortization Date | [4],[8] | Dec. 2018 | ||
Available borrowing capacity | [2],[8] | $ 21,232,000 | ||
Weighted average interest rate | [3],[8] | 4.63% | ||
Match funded liabilities | [8] | $ 33,768,000 | $ 63,093,000 | |
Advance Receivables Backed Notes, Series 2015-VF1 [Member] | Total Ocwen Freddie Advance Funding (OFAF) [Member] | ||||
Debt Instrument [Line Items] | ||||
Maturity | [4],[9] | Jun. 30, 2048 | ||
Debt Instrument Amortization Date | [4],[9] | Jun. 2018 | ||
Available borrowing capacity | [2],[9] | $ 53,922,000 | ||
Weighted average interest rate | [3],[9] | 4.52% | 3.54% | |
Match funded liabilities | [9] | $ 56,078,000 | $ 94,722,000 | |
Advance Financing Facilities [Member] | ||||
Debt Instrument [Line Items] | ||||
Available borrowing capacity | [2] | $ 150,964,000 | ||
Weighted average interest rate | [3] | 3.16% | 3.21% | |
Match funded liabilities | $ 974,036,000 | $ 1,280,997,000 | ||
Loan Series 2017-1 [Member] | Total Automotive Capital Asset Receivables Trust (ACART) [Member] | ||||
Debt Instrument [Line Items] | ||||
Maturity | [4],[7] | Feb. 28, 2021 | ||
Debt Instrument Amortization Date | [4],[7] | Feb. 2019 | ||
Available borrowing capacity | [2],[7] | $ 25,418,000 | ||
Weighted average interest rate | [3],[7] | 6.77% | ||
Match funded liabilities | [7] | $ 24,582,000 | $ 0 | |
Match Funded Liabilties [Member] | ||||
Debt Instrument [Line Items] | ||||
Available borrowing capacity | [2] | $ 176,382,000 | ||
Weighted average interest rate | [3] | 3.25% | 3.21% | |
Match funded liabilities | $ 998,618,000 | $ 1,280,997,000 | ||
[1] | Under the terms of the Amended and Restated Senior Secured Term Loan Facility Agreement with a borrowing capacity of $335.0 million, 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 of $4.2 million on the SSTL, the first of which was paid 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. | |||
[2] | Borrowing capacity is available to us provided that we have eligible collateral to pledge. Collateral may only be pledged to one facility. At December 31, 2017, $12.4 million of the available borrowing capacity of our advance financing notes could be used based on the amount of eligible collateral that had been pledged. | |||
[3] | 1ML was 1.56% and 0.77% at December 31, 2017 and 2016, respectively. | |||
[4] | 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. | |||
[5] | Effective January 1, 2018, the borrowing capacity of the Series 2014-VF4 and the Series 2014-VF5 variable rate notes were each reduced from $105.0 million to $70.0 million. There is a ceiling of 125 basis points (bps) for 1ML in determining the interest rate for these variable rate notes. Rates on the individual notes are based on 1ML plus a margin of 235 to 635 bps. | |||
[6] | Under the terms of the agreement, we must continue to borrow the full amount of the Series 2016-T1 and Series 2016-T2 fixed-rate term notes until the amortization date. If there is insufficient eligible collateral to support the level of borrowing, the excess cash proceeds in an amount necessary to make up the deficit are not distributed to Ocwen but are held by the trustee, and interest expense continues to be based on the full amount of the outstanding notes. The Series 2016-T1, Series 2016-T2 and Series 2017-T1 term notes have a total combined borrowing capacity of $750.0 million. Rates on the individual classes of notes range from 2.4989% to 4.4456%. | |||
[7] | The committed borrowing capacity for the Loan Series 2017-1 Notes is $50.0 million at December 31, 2017. Rates on the Loan Series 2017-1 Notes are based on cost of funds plus a margin of 500 bps. On January 23, 2018, we voluntarily terminated the Loan Series 2017-1 Notes. | |||
[8] | The maximum borrowing capacity under this facility is $55.0 million. There is a ceiling of 300 bps for 1ML in determining the interest rate for these variable rate notes. Rates on the individual notes are based on the lender’s cost of funds plus a margin of 235 to 475 bps. | |||
[9] | The combined borrowing capacity of the notes is $110.0 million with interest computed based on the lender’s cost of funds plus a margin of 250 to 500 bps. There is a ceiling of 300 bps for 1ML in determining the interest rate for these variable rate notes. |
Borrowings - Schedule of Mat103
Borrowings - Schedule of Match Funded Liabilities (Footnote) (Details) - USD ($) | Jan. 18, 2018 | Jan. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Jan. 01, 2018 |
Debt Instrument [Line Items] | ||||||
Proceeds from sale of mortgage servicing rights accounted for as a financing | $ 54,601,000 | $ 0 | $ 0 | |||
Available borrowing capacity | $ 12,408,000 | |||||
Minimum [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, interest rate | 2.4989% | |||||
Maximum [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, interest rate | 4.4456% | |||||
Advance Receivable Backed Variable Funding Notes [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 105,000,000 | |||||
Advance Receivable Backed Variable Funding Notes [Member] | Subsequent Event [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 70,000,000 | |||||
Series 2016 and 2017 Term Notes [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | 750,000,000 | |||||
Advance Receivables Backed Notes, Series 2014-VF1 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 55,000,000 | |||||
Ceiling percentage of 1ML in determining interest rate | 3.00% | |||||
Advance Receivables Backed Notes, Series 2014-VF1 [Member] | Minimum [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 2.35% | |||||
Advance Receivables Backed Notes, Series 2014-VF1 [Member] | Maximum [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 4.75% | |||||
Advance Receivables Backed Notes, Series 2015-VF1 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 110,000,000 | |||||
Basis spread on variable rate | 3.00% | |||||
Advance Receivables Backed Notes, Series 2015-VF1 [Member] | Minimum [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 2.50% | |||||
Advance Receivables Backed Notes, Series 2015-VF1 [Member] | Maximum [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 5.00% | |||||
Loan Series 2017-1 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 50,000,000 | |||||
Basis spread on variable rate | 5.00% | |||||
LIBOR [Member] | ||||||
Debt Instrument [Line Items] | ||||||
1-Month LIBOR | 1.56% | 0.77% | ||||
LIBOR [Member] | Advance Receivable Backed Variable Funding Notes [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Ceiling percentage of 1ML in determining interest rate | 1.25% | |||||
LIBOR [Member] | Advance Receivable Backed Variable Funding Notes [Member] | Minimum [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 2.35% | |||||
LIBOR [Member] | Advance Receivable Backed Variable Funding Notes [Member] | Maximum [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 6.35% | |||||
NRZ [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Proceeds from sale of mortgage servicing rights accounted for as a financing | $ 54,600,000 | |||||
NRZ [Member] | Subsequent Event [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Proceeds from sale of mortgage servicing rights accounted for as a financing | $ 279,600,000 | $ 279,600,000 |
Borrowings - Narrative (Details
Borrowings - Narrative (Details) - USD ($) $ in Millions | Dec. 05, 2016 | Dec. 31, 2017 | Dec. 31, 2016 |
Line of Credit Facility [Line Items] | |||
Percentage of senior unsecured notes exchanged for senior secured second lien notes | 99.10% | ||
Deb covenant, required consolidated tangible net worth | $ 450 | ||
NRZ [Member] | |||
Line of Credit Facility [Line Items] | |||
UPB of rights to MSRs sold | 101,800 | ||
Outstanding servicing advances | $ 3,200 | ||
Senior Notes [Member] | 8.375% Senior Secured Notes Due In 2022 [Member] | |||
Line of Credit Facility [Line Items] | |||
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% | ||
SSTL [Member] | |||
Line of Credit Facility [Line Items] | |||
Percentage of loan to value | 40.00% | ||
Ocwen Loan Servicing [Member] | |||
Line of Credit Facility [Line Items] | |||
Deb covenant, required consolidated tangible net worth | $ 1,100 |
Borrowings - Schedule of Financ
Borrowings - Schedule of Financing Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | ||
Debt Instrument [Line Items] | |||
Maturity | [1] | Dec. 31, 2020 | |
Other financing liabilities ($508,291 and $477,707 carried at fair value) | $ 593,518 | $ 579,031 | |
Financing Liabilities [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 5,195,074 | 4,012,812 | |
Financing Liability - MSRs Pledged [Member] | |||
Debt Instrument [Line Items] | |||
Other financing liabilities ($508,291 and $477,707 carried at fair value) | 508,291 | 477,707 | |
Financing Liability - MSRs Pledged [Member] | Financing Liabilities [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | [2] | $ 499,042 | 477,707 |
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 | [3] | $ 72,575 | 81,131 |
Financing Liability – Advances Pledged [Member] | Financing Liabilities [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | [4] | 12,652 | 20,193 |
HMBS - Related Borrowings [Member] | Financing Liabilities [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | [5] | $ 4,601,556 | 3,433,781 |
LIBOR [Member] | HMBS - Related Borrowings [Member] | Financing Liabilities [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate | 2.60% | ||
2017 Agreements [Member] | Financing Liability - MSRs Pledged [Member] | |||
Debt Instrument [Line Items] | |||
Other financing liabilities ($508,291 and $477,707 carried at fair value) | $ 9,249 | $ 0 | |
[1] | Under the terms of the Amended and Restated Senior Secured Term Loan Facility Agreement with a borrowing capacity of $335.0 million, 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 of $4.2 million on the SSTL, the first of which was paid 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. | ||
[2] | 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. | ||
[3] | This financing liability 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. | ||
[4] | This financing liability arose in connection with lump sum payments received upon transfer of legal title of the MSRs related to the Rights to MSRs transactions to NRZ. We received lump sum payments of $54.6 million as compensation for foregoing certain payments under the Existing Rights to MSRs Agreements. This liability has no contractual maturity or repayment schedule. The balance of the liability is adjusted each reporting period to its fair value based on the present value of the estimated future cash flows. | ||
[5] | OASIS noteholders are entitled to receive a monthly payment equal to the sum of: (a) 21 basis points of the UPB of the reference pool of Freddie Mac mortgages; (b) any termination payment amounts; (c) any excess refinance amounts; and (d) the note redemption amounts, each as defined in the indenture supplement for the notes. Monthly amortization of the liability is estimated using the proportion of monthly projected service fees on the underlying MSRs as a percentage of lifetime projected fees, adjusted for the term of the notes. |
Borrowings - Schedule of Fin106
Borrowings - Schedule of Financing Liabilities (Footnote) (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Secured Notes, Ocwen Asset Servicing Income Series, Series 2014-1 [Member] | |
Debt Instrument [Line Items] | |
Basis points | 0.21% |
Borrowings - Schedule of Other
Borrowings - Schedule of Other Secured Borrowings (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | |||
Line of Credit Facility [Line Items] | ||||
Maturity date | [1] | Dec. 31, 2020 | ||
Available Borrowing Capacity | $ 12,408,000 | |||
Other Secured Borrowings [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Available Borrowing Capacity | [2] | 225,193,000 | ||
Long-term debt, gross | 554,033,000 | $ 690,029,000 | ||
Unamortized debt issuance costs | (5,423,000) | (7,612,000) | ||
Discount | (2,760,000) | (3,874,000) | ||
Total Balance | $ 545,850,000 | $ 678,543,000 | ||
Weighted average interest rate | 5.22% | 4.56% | ||
SSTL [Member] | Other Secured Borrowings [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Available Borrowing Capacity | [1],[2] | $ 0 | ||
Long-term debt, gross | [1] | 298,251,000 | $ 335,000,000 | |
Mortgage Loan Warehouse Facilities [Member] | Other Secured Borrowings [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Available Borrowing Capacity | [2] | 225,193,000 | ||
Long-term debt, gross | $ 255,782,000 | 355,029,000 | ||
Mortgage Loan Warehouse Facilities [Member] | Repurchase Agreement [Member] | Other Secured Borrowings [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Maturity date | [3] | Aug. 31, 2018 | ||
Available Borrowing Capacity | [2],[3] | $ 79,279,000 | ||
Long-term debt, gross | [3] | $ 8,221,000 | 12,370,000 | |
Mortgage Loan Warehouse Facilities [Member] | Master Repurchase Agreement [Member] | Other Secured Borrowings [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Maturity date | [4] | Aug. 31, 2017 | ||
Available Borrowing Capacity | [2],[4] | $ 0 | ||
Long-term debt, gross | [4] | $ 0 | 173,543,000 | |
Mortgage Loan Warehouse Facilities [Member] | Participation Agreement [Member] | Other Secured Borrowings [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Maturity date | [4] | Apr. 30, 2018 | ||
Available Borrowing Capacity | [2],[5] | $ 0 | ||
Long-term debt, gross | [5] | $ 161,433,000 | 92,739,000 | |
Mortgage Loan Warehouse Facilities [Member] | Mortgage Warehouse Agreement [Member] | Other Secured Borrowings [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Maturity date | [5] | Oct. 31, 2018 | ||
Available Borrowing Capacity | [2],[6] | $ 0 | ||
Long-term debt, gross | [6] | $ 32,042,000 | 26,254,000 | |
Mortgage Loan Warehouse Facilities [Member] | Master Repurchase Agreement [Member] | Other Secured Borrowings [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Maturity date | [7] | Aug. 31, 2017 | ||
Available Borrowing Capacity | [2],[7] | $ 0 | ||
Long-term debt, gross | $ 0 | 50,123,000 | [7] | |
Mortgage Loan Warehouse Facilities [Member] | Master Repurchase Agreement [Member] | Other Secured Borrowings [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Maturity date | [7] | Dec. 31, 2018 | ||
Available Borrowing Capacity | $ 95,914,000 | |||
Long-term debt, gross | $ 54,086,000 | 0 | ||
Mortgage Loan Warehouse Facilities [Member] | Master Repurchase Agreement [Member] | Other Secured Borrowings [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Maturity date | [7] | Dec. 31, 2018 | ||
Available Borrowing Capacity | $ 50,000,000 | |||
Long-term debt, gross | $ 0 | $ 0 | ||
Interest rate | [7] | 0.00% | ||
Interest rate at floor | 4.00% | |||
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 | [5] | 2.75% | ||
Interest rate at floor | [5] | 3.50% | ||
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% | ||
LIBOR [Member] | Mortgage Loan Warehouse Facilities [Member] | Master Repurchase Agreement [Member] | Other Secured Borrowings [Member] | Forward Lending [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Interest rate | [7] | 2.25% | ||
LIBOR [Member] | Mortgage Loan Warehouse Facilities [Member] | Master Repurchase Agreement [Member] | Other Secured Borrowings [Member] | Reverse Lending [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Interest rate | [7] | 2.75% | ||
Eurodollar [Member] | SSTL [Member] | Other Secured Borrowings [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Interest rate | [1] | 5.00% | ||
Interest rate at floor | [1] | 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% | ||
[1] | Under the terms of the Amended and Restated Senior Secured Term Loan Facility Agreement with a borrowing capacity of $335.0 million, 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 of $4.2 million on the SSTL, the first of which was paid 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. | |||
[2] | Available borrowing capacity for our mortgage loan warehouse facilities does not consider the amount of the facility that the lender has extended on an uncommitted basis. Of the borrowing capacity extended on a committed basis, $21.8 million could be used at December 31, 2017 based on the amount of eligible collateral that had been pledged. | |||
[3] | $87.5 million of the maximum borrowing amount of $137.5 million is available on a committed basis and the remainder is available at the discretion of the lender. We primarily 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 these participation agreements, the lender provides financing for a 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. | |||
[5] | Under this participation agreement, the lender provides financing for $100.0 million at the discretion of the lender. The participation agreement allows the lender to acquire a 100% beneficial interest in the underlying mortgage loans. The transaction does not qualify for sale accounting treatment and is accounted for as a secured borrowing. | |||
[6] | Under this agreement, the lender provides financing on a committed basis for up to $150.0 million. The 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. | |||
[7] | Under this agreement, the lender provides financing for up to $50.0 million at the discretion of the lender. |
Borrowings - Schedule of Oth108
Borrowings - Schedule of Other Secured Borrowings (Footnote) (Details) - USD ($) | Dec. 05, 2016 | Dec. 31, 2017 | Nov. 20, 2015 |
Debt Instrument [Line Items] | |||
Available borrowing capacity | $ 12,408,000 | ||
Percentage of equity interest in foreign subsidiaries pledged as security to secured debt | 35.00% | ||
SSTL [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 | ||
Percentage of loan to value | 40.00% | ||
Mortgage Loan Warehouse Facilities [Member] | Other Secured Borrowings [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | $ 21,800,000 | ||
Mortgage Loan Warehouse Facilities [Member] | Other Secured Borrowings [Member] | Repurchase Agreement [Member] | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 137,500,000 | ||
Borrowings available o committed basis | 87,500,000 | ||
Mortgage Loan Warehouse Facilities [Member] | Other Secured Borrowings [Member] | Participation Agreement [Member] | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 250,000,000 | ||
Beneficial interest | 100.00% | ||
Mortgage Loan Warehouse Facilities [Member] | Other Secured Borrowings [Member] | Mortgage Warehouse Agreement [Member] | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 100,000,000 | ||
Mortgage Loan Warehouse Facilities [Member] | Other Secured Borrowings [Member] | Master Repurchase Agreement [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | $ 150,000,000 | ||
Beneficial interest | 100.00% | ||
Mortgage Loan Warehouse Facilities [Member] | Other Secured Borrowings [Member] | Master Repurchase Agreement [Member] | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | $ 50,000,000 | ||
Senior Secured Term Loan Option One [Member] | Federal Funds Rate [Member] | Other Secured Borrowings [Member] | SSTL [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate | 0.50% | ||
Senior Secured Term Loan Option One [Member] | Eurodollar [Member] | Other Secured Borrowings [Member] | SSTL [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate | 4.00% | ||
Senior Secured Term Loan Option One [Member] | Base Rate [Member] | Other Secured Borrowings [Member] | SSTL [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate at floor | 2.00% | ||
Senior Secured Term Loan Option Two [Member] | Eurodollar [Member] | Other Secured Borrowings [Member] | SSTL [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate | 5.00% | ||
Interest rate at floor | 1.00% |
Borrowings - Schedule of Senior
Borrowings - Schedule of Senior Notes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | ||
Debt Instrument [Line Items] | |||
Maturity | [1] | Dec. 31, 2020 | |
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 | (2,662) | (3,211) | |
Senior notes | 347,338 | 346,789 | |
Senior Notes [Member] | 6.625 Senior Notes, Due 2019 [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 3,122 | 3,122 | |
Debt instrument, interest rate | 6.625% | ||
Maturity | May 31, 2019 | ||
Senior Notes [Member] | 8.375% Senior Secured Notes Due In 2022 [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 346,878 | $ 346,878 | |
Debt instrument, interest rate | 8.375% | ||
Maturity | Nov. 30, 2022 | ||
[1] | Under the terms of the Amended and Restated Senior Secured Term Loan Facility Agreement with a borrowing capacity of $335.0 million, 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 of $4.2 million on the SSTL, the first of which was paid on March 31, 2017.The borrowings under the SSTL are secured by a first priority security interest in substantially all of the assets of Ocwen, OLS and the other guarantors thereunder, excluding among other things, 35% of the capital stock of foreign subsidiaries, securitization assets and equity interests of securitization entities, assets securing permitted funding indebtedness and non-recourse indebtedness, REO assets, servicing agreements where an acknowledgment from the GSE has not been obtained, as well as other customary carve-outs.Borrowings bear interest, at the election of Ocwen, at a rate per annum equal to either (a) the base rate (the greatest of (i) the prime rate in effect on such day, (ii) the federal funds rate in effect on such day plus 0.50% and (iii) the one-month Eurodollar rate (1ML)), plus a margin of 4.00% and subject to a base rate floor of 2.00% or (b) the one-month Eurodollar rate, plus a margin of 5.00% and subject to a one-month Eurodollar floor of 1.00%. To date we have elected option (b) to determine the interest rate. |
Borrowings - Schedule of Sen110
Borrowings - Schedule of Senior Notes (Footnote) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Debt Instrument [Line Items] | ||
Percentage of senior unsecured notes exchanged for senior secured second lien notes | 99.10% | |
8.375% Senior Secured Notes Due In 2022 [Member] | ||
Debt Instrument [Line Items] | ||
Senior notes | $ 346.9 | |
Senior Unsecured Notes [Member] | ||
Debt Instrument [Line Items] | ||
Senior notes | $ 346.9 | |
Senior Unsecured Notes [Member] | On Or After May 15, 2017 [Member] | ||
Debt Instrument [Line Items] | ||
Redemption price | 103.313% | |
Senior Unsecured Notes [Member] | 2018 and thereafter [Member] | ||
Debt Instrument [Line Items] | ||
Redemption price | 100.00% | |
Senior Unsecured Notes [Member] | 6.625 Senior Notes, Due 2019 [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument stated percentage of interest | 6.625% | |
Senior Unsecured Notes [Member] | 6.625 Senior Notes, Due 2019 [Member] | On or After May 15, 2016 [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Redemption period, notice | 30 days | |
Senior Unsecured Notes [Member] | 6.625 Senior Notes, Due 2019 [Member] | On or After May 15, 2016 [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Redemption period, notice | 60 days | |
Senior Unsecured Notes [Member] | 8.375% Senior Secured Notes Due In 2022 [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument stated percentage of interest | 8.375% |
Borrowings - Schedule of Redemp
Borrowings - Schedule of Redemption Prices (Details) - Other Secured Borrowings [Member] | 12 Months Ended |
Dec. 31, 2017 | |
2018 [Member] | |
Debt Instrument [Line Items] | |
Redemption Price | 106.281% |
2019 [Member] | |
Debt Instrument [Line Items] | |
Redemption Price | 104.188% |
2020 [Member] | |
Debt Instrument [Line Items] | |
Redemption Price | 102.094% |
2021 and thereafter [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, 2017USD ($) | |
Debt Instrument [Line Items] | ||
2,018 | $ 1,011,568 | [1],[2],[3] |
2,019 | 279,454 | [1],[2],[3] |
2,020 | 264,751 | [1],[2],[3] |
2,021 | 0 | [1],[2],[3] |
2,022 | 346,878 | [1],[2],[3] |
There-after | 0 | [1],[2],[3] |
Long-term debt, gross | 1,902,651 | |
Fair value | 1,906,643 | |
Match Funded Liabilties [Member] | ||
Debt Instrument [Line Items] | ||
2,018 | 739,036 | [1],[2],[3] |
2,019 | 259,582 | [1],[2],[3] |
2,020 | 0 | [1],[2],[3] |
2,021 | 0 | [1],[2],[3] |
2,022 | 0 | [1],[2],[3] |
There-after | 0 | [1],[2],[3] |
Long-term debt, gross | 998,618 | |
Fair value | 992,698 | |
Other Secured Borrowings [Member] | ||
Debt Instrument [Line Items] | ||
2,018 | 272,532 | [1],[2],[3] |
2,019 | 16,750 | [1],[2],[3] |
2,020 | 264,751 | [1],[2],[3] |
2,021 | 0 | [1],[2],[3] |
2,022 | 0 | [1],[2],[3] |
There-after | 0 | [1],[2],[3] |
Long-term debt, gross | 554,033 | |
Fair value | 555,523 | |
Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
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] |
2,022 | 346,878 | [1],[2],[3] |
There-after | 0 | [1],[2],[3] |
Long-term debt, gross | 350,000 | |
Fair value | $ 358,422 | |
[1] | Amounts are exclusive of any related discount or unamortized debt issuance costs. | |
[2] | Excludes financing liabilities recognized in connection with asset sales transactions accounted for as financings, including $499.0 million recorded in connection with sales of Rights to MSRs and $4.6 billion recorded in connection with the securitizations of HMBS. These financing liabilities have no contractual maturity and are amortized over the life of the underlying assets. | |
[3] | For match funded liabilities, the Expected Maturity Date is the date on which the revolving period ends for each advance financing facility note and repayment of the outstanding balance must begin if the note is not renewed or extended. |
Borrowings - Schedule of Agg113
Borrowings - Schedule of Aggregate Long-term Borrowings (Footnote) (Details) - Financing Liabilities [Member] - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | |
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 5,195,074 | $ 4,012,812 | |
Sale of MSRs and Rights To MSRs [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 499,000 | ||
HMBS - Related Borrowings [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | [1] | $ 4,601,556 | $ 3,433,781 |
[1] | OASIS noteholders are entitled to receive a monthly payment equal to the sum of: (a) 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. 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 notes. |
Other Liabilities - Schedule of
Other Liabilities - Schedule of Other Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | |
Other Liabilities Disclosure [Abstract] | |||
Contingent loan repurchase liability | $ 431,492 | $ 246,081 | |
Due to NRZ | [1] | 98,493 | 83,248 |
Other accrued expenses | 75,088 | 80,021 | |
Accrued legal fees and settlements | 51,057 | 93,797 | |
Servicing-related obligations | 35,239 | 35,324 | |
Liability for indemnification obligations | 23,117 | 27,546 | |
Checks held for escheat | 19,306 | 16,890 | |
Amounts due in connection with MSR sales | 8,291 | 39,398 | |
Accrued interest payable | 5,172 | 3,698 | |
Deferred income | 3,463 | 4,481 | |
Liability for uncertain tax positions | 3,252 | 23,216 | |
Derivatives, at fair value | 635 | 1,550 | |
Other | 14,805 | 25,989 | |
Other liabilities | $ 769,410 | $ 681,239 | |
[1] | Balances represent advance collections and servicing fees to be remitted to NRZ.We monitor our legal and regulatory 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, including fines and penalties, judgments on appeal and filed and/or threatened claims for which we believe it is probable that a loss has been or will be incurred and the amount can be reasonably estimated. See Note 22 — Regulatory Requirements and Note 24 — Contingencies for additional information. We recognize legal costs associated with loss contingencies in Professional services expense in the consolidated statement of operations as incurred. The changes in the liability for legal fees and settlements are as follows: Years Ended December 31, 2017 2016 2015Beginning balance$93,797 $74,922 $38,962Accrual for probable losses (1)133,656 74,943 30,691Payments (2)(174,941) (47,754) (4,928)Net change in accrued legal fees482 (6,231) 10,196Other (3)(1,937) (2,083) 1Ending balance$51,057 $93,797 $74,922(1)Consists of amounts accrued for probable losses in connection with legal and regulatory settlements and judgments. Such amounts are reported in Professional services expense in the consolidated statements of operations. (2)Includes cash payments made in connection with resolved legal and regulatory matters. (3)During the year ended December 31, 2017, Ocwen issued 625,000 shares of common stock with a fair value of $1.9 million in connection with a legal settlement. The remaining 1,875,000 shares were issued in January 2018. |
Other Liabilities Schedule of C
Other Liabilities Schedule of Changes in Liability for Legal Fees and Settlements (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Other Liabilities Disclosure [Abstract] | ||||
Beginning balance | $ 93,797 | $ 74,922 | $ 38,962 | |
Accrual for probable losses | [1] | 133,656 | 74,943 | 30,691 |
Payments | [2] | (174,941) | (47,754) | (4,928) |
Net change in accrued legal fees | 482 | (6,231) | 10,196 | |
Other | [3] | (1,937) | (2,083) | 1 |
Ending balance | $ 51,057 | $ 93,797 | $ 74,922 | |
[1] | Consists of amounts accrued for probable losses in connection with legal and regulatory settlements and judgments. Such amounts are reported in Professional services expense in the consolidated statements of operations. | |||
[2] | ncludes cash payments made in connection with resolved legal and regulatory matters. | |||
[3] | During the year ended December 31, 2017, Ocwen issued 625,000 shares of common stock with a fair value of $1.9 million in connection with a legal settlement. The remaining 1,875,000 shares were issued in January 2018. |
Other Liabilities Schedule o116
Other Liabilities Schedule of Changes in Liability for Legal Fees and Settlements (Footnote) (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Jan. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Loss Contingencies [Line Items] | ||||
Common stock issued, value | $ 0 | $ 0 | ||
Securities Class Action [Member] | ||||
Loss Contingencies [Line Items] | ||||
Issuance of common stock, shares | 625,000 | |||
Common stock issued, value | $ 1,937 | |||
Subsequent Event [Member] | Securities Class Action [Member] | ||||
Loss Contingencies [Line Items] | ||||
Issuance of common stock, shares | 1,875,000 |
Equity - Narrative (Details)
Equity - Narrative (Details) - USD ($) | 1 Months Ended | 12 Months Ended | 38 Months Ended | |||
Jan. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2016 | Oct. 31, 2013 | |
Class of Stock [Line Items] | ||||||
Share repurchase program, authorized amount of repurchase | $ 500,000,000 | |||||
Repurchase of common stock (in shares) | 991,985 | 13,163,793 | ||||
Repurchase of common stock, value (in dollars) | $ 5,890,000 | $ 4,142,000 | $ 380,300,000 | |||
Issuance of common stock | $ 15,325,000 | |||||
NRZ [Member] | ||||||
Class of Stock [Line Items] | ||||||
Issuance of common stock | $ 13,900,000 | |||||
Issuance of common stock, shares | 6,075,510 | |||||
Securities Class Action [Member] | ||||||
Class of Stock [Line Items] | ||||||
Issuance of common stock, shares | 625,000 | |||||
Common stock to be issued in connection with mediated settlement of litigation | 2,500,000 | |||||
Securities Class Action [Member] | Subsequent Event [Member] | ||||||
Class of Stock [Line Items] | ||||||
Issuance of common stock, shares | 1,875,000 |
Equity - Schedule of Accumulate
Equity - Schedule of Accumulated Other Comprehensive Loss (AOCL), Net of Income Taxes (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Equity [Abstract] | ||
Unrealized losses on cash flow hedges | $ 1,128 | $ 1,329 |
Other | 121 | 121 |
Accumulated other comprehensive loss | $ 1,249 | $ 1,450 |
Derivative Financial Instrum119
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, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Fair value of derivative assets (liabilities) at: | ||||
Derivatives, at fair value | $ 5,429 | $ 9,279 | ||
Gains (losses) on derivatives | 10 | (1,387) | $ (1,377) | |
IRLCs [Member] | ||||
Derivative Notional Balance [Roll Forward] | ||||
Notional Amount, beginning balance | 360,450 | |||
Additions | 3,711,902 | |||
Amortization | 0 | |||
Maturities | (3,221,782) | |||
Terminations | (754,231) | |||
Notional Amount, ending balance | 96,339 | 360,450 | ||
Fair value of derivative assets (liabilities) at: | ||||
Derivatives, at fair value | [1] | $ 3,283 | 6,507 | |
Maturity | Jan. 2018 - Mar. 2018 | |||
IRLCs [Member] | Gain on Loans Held for Sale Net [Member] | ||||
Fair value of derivative assets (liabilities) at: | ||||
Gains (losses) on derivatives | $ (3,089) | (55) | ||
Forward Mortgage Backed Securities Trades [Member] | ||||
Derivative Notional Balance [Roll Forward] | ||||
Notional Amount, beginning balance | 609,177 | |||
Additions | 2,914,283 | |||
Amortization | 0 | |||
Maturities | (2,289,228) | |||
Terminations | (993,409) | |||
Notional Amount, ending balance | 240,823 | 609,177 | ||
Fair value of derivative assets (liabilities) at: | ||||
Derivatives, at fair value | [1] | $ (545) | (614) | |
Maturity | Feb. 2018 | |||
Forward Mortgage Backed Securities Trades [Member] | Gain on Loans Held for Sale Net [Member] | ||||
Fair value of derivative assets (liabilities) at: | ||||
Gains (losses) on derivatives | $ (8,529) | (6,592) | ||
Interest Rate Cap [Member] | ||||
Derivative Notional Balance [Roll Forward] | ||||
Notional Amount, beginning balance | 955,000 | |||
Additions | 211,667 | |||
Amortization | (416,667) | |||
Maturities | 0 | |||
Terminations | (375,000) | |||
Notional Amount, ending balance | 375,000 | 955,000 | ||
Fair value of derivative assets (liabilities) at: | ||||
Derivatives, at fair value | [1] | $ 2,056 | $ 1,836 | |
Maturity | Jul. 2018 - Dec. 2019 | |||
[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, 2017 | Dec. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Deferred unrealized losses | $ (1.2) | $ (1.4) |
Deferred unrealized losses, tax | $ 0.1 | $ 0.1 |
Derivative Financial Instrum121
Derivative Financial Instruments and Hedging Activities - Schedule of Changes in AOCL (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning balance | $ 1,450 | ||
Ending balance | 1,249 | $ 1,450 | |
Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning balance | 1,450 | 1,763 | $ 8,413 |
Losses on terminated cash flow hedging relationships amortized to earnings | (201) | (337) | (7,042) |
Decrease in deferred taxes on accumulated losses on cash flow hedges | 0 | 24 | 392 |
Decrease in accumulated losses on cash flow hedges, net of taxes | (201) | (313) | (6,650) |
Ending balance | $ 1,249 | $ 1,450 | $ 1,763 |
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, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||
Gain (loss) on economic hedges | $ 10 | $ (1,387) | $ (1,377) | |
Write-off of losses in AOCL for a discontinued hedge relationship | [1] | (201) | (337) | (7,042) |
Gain (loss) on derivatives, net | $ (191) | $ (1,724) | $ (8,419) | |
[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, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Other Income and Expenses [Abstract] | |||
Loans held for sale | $ 11,100 | $ 15,774 | $ 16,167 |
Automotive dealer financing notes | 3,069 | 1,534 | 39 |
Interest earning cash deposits and other | 1,796 | 1,775 | 2,114 |
Interest and Other Income | $ 15,965 | $ 19,083 | $ 18,320 |
Interest Expense - Schedule of
Interest Expense - Schedule of Components of Interest Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Debt securities: | |||
Interest expense | $ 363,238 | $ 412,583 | $ 482,373 |
Financing Liabilities [Member] | |||
Debt securities: | |||
Interest expense | 242,514 | 248,834 | 292,306 |
Match Funded Liabilties [Member] | |||
Debt securities: | |||
Interest expense | 47,624 | 66,879 | 65,248 |
Other Secured Borrowings [Member] | |||
Debt securities: | |||
Interest expense | 39,531 | 60,469 | 91,391 |
Senior Notes [Member] | |||
Debt securities: | |||
Interest expense | 29,806 | 30,012 | 26,259 |
Other [Member] | |||
Debt securities: | |||
Interest expense | $ 3,763 | $ 6,389 | $ 7,169 |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income Before Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||||||||||
Domestic | $ (75,143) | $ (130,920) | $ (62,903) | ||||||||
Foreign | (68,830) | (75,441) | (66,958) | ||||||||
Loss before income taxes | $ (45,314) | $ (26,553) | $ (41,608) | $ (30,498) | $ (10,202) | $ 2,364 | $ (96,398) | $ (102,125) | $ (143,973) | $ (206,361) | $ (129,861) |
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, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Current: | |||||||||||
Federal | $ (21,859) | $ (8,025) | $ 46,680 | ||||||||
State | (3,938) | 460 | 1,079 | ||||||||
Foreign | 9,550 | 5,099 | 161 | ||||||||
Current Income Tax Expense (Benefit) | (16,247) | (2,466) | 47,920 | ||||||||
Deferred: | |||||||||||
Federal | 27,289 | (22,054) | (27,173) | ||||||||
State | 702 | 4,701 | (3,719) | ||||||||
Foreign | 2,719 | (2,806) | 2,754 | ||||||||
Provision for (reversal of) valuation allowance on deferred tax assets | (29,979) | 15,639 | 97,069 | ||||||||
Deferred Income Tax Expense (Benefit) | 731 | (4,520) | 68,931 | ||||||||
Total | $ (51) | $ (20,418) | $ 2,828 | $ 2,125 | $ 228 | $ (7,110) | $ (9,180) | $ 9,076 | $ (15,516) | $ (6,986) | $ 116,851 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Decrease in federal net operating loss carryforwards | $ 16,900 | ||||
Valuation allowance | [1] | 107,048 | $ 132,073 | ||
Total interest and penalties | (5,100) | (1,000) | $ 6,300 | ||
Accruals for interest and penalties | 1,000 | 6,200 | |||
Liability for selected tax items | $ 2,300 | 17,000 | |||
Range of period where there is possible change in unrecognized tax benefits | 12 months | ||||
Unrecognized Tax Benefits | $ 2,281 | 16,994 | 32,548 | $ 22,523 | |
EDC benefits, tax expense (benefit) | $ 62,700 | $ 68,200 | |||
EDC benefits, effect on diluted EPS (in dollars per share) | $ (0.51) | $ (0.54) | |||
U.S. [Member] | |||||
Valuation allowance | 62,900 | $ 95,500 | |||
Decrease in deferred tax asset | 36,100 | ||||
U.S. NOL carryforwards | 266,400 | ||||
USVI [Member] | |||||
Valuation allowance | 43,900 | $ 36,200 | |||
Decrease in deferred tax asset | 26,600 | ||||
USVI NOL carryforwards | 463,400 | ||||
Expected carry back of net operating loss | 328,400 | ||||
Operating Loss Carryforwards [Member] | U.S. [Member] | |||||
Valuation allowance on deferred tax assets | 55,900 | ||||
Operating Loss Carryforwards [Member] | USVI [Member] | |||||
Valuation allowance on deferred tax assets | 3,100 | ||||
Capital Loss Carryforward [Member] | U.S. [Member] | |||||
Capital loss carryforwards | 500 | ||||
Capital Loss Carryforward [Member] | USVI [Member] | |||||
Capital loss carryforwards | 15,300 | ||||
India And Philippines Subsidiary [Member] | |||||
Deferred tax liability | 4,900 | ||||
Undistributed earnings of foreign subsidiaries | 30,200 | ||||
Foreign Subsidiaries [Member] | |||||
Undistributed earnings of foreign subsidiaries | 209,800 | ||||
Cash and short term investments | $ 257,600 | ||||
Ocwen Mortgage Servicing Inc [Member] | |||||
Percentage of income tax credit on qualified income | 90.00% | ||||
EDC benefits, exemption term | 30 years | ||||
[1] | The decline in the valuation allowance of $25.0 million in 2017 is due to a $30.0 million reversal of valuation allowance on deferred tax assets (through a reduction in income tax expense), offset in part by the establishment of a $5.0 million valuation allowance (through a reduction in retained earnings) on the deferred tax asset recognized in connection with our adoption of ASU 2016-09. |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Income Tax Disclosure [Abstract] | ||||||||||||
Expected income tax expense (benefit) at statutory rate | $ (50,391) | $ (72,225) | $ (45,451) | |||||||||
Differences between expected and actual income tax expense: | ||||||||||||
U.S Tax Reform - Change in Federal rate | 62,758 | 0 | 0 | |||||||||
U.S Tax Reform - Transition Tax | 34,846 | 0 | 0 | |||||||||
Foreign tax differential including effectively connected income | [1] | (12,140) | 42,463 | 41,695 | ||||||||
Provision for (reversal of) liability for uncertain tax positions | (16,925) | 2,236 | 18,205 | |||||||||
Provision for (reversal of) valuation allowance on deferred tax assets | [2] | (29,979) | 15,639 | 97,069 | ||||||||
Provision for liability for intra-entity transactions | 2,484 | 3,357 | 4,700 | |||||||||
State tax, after Federal tax benefit | (3,938) | 250 | (2,867) | |||||||||
Excess tax benefits from share-based compensation | (3,701) | 0 | 0 | |||||||||
Other permanent differences | 2,783 | 515 | (463) | |||||||||
Non-deductible regulatory settlements | 0 | 0 | 700 | |||||||||
Other | (1,313) | 779 | 3,263 | |||||||||
Total | $ (51) | $ (20,418) | $ 2,828 | $ 2,125 | $ 228 | $ (7,110) | $ (9,180) | $ 9,076 | $ (15,516) | $ (6,986) | $ 116,851 | |
[1] | The foreign tax differential includes a benefit recognized in 2017 and 2016 for taxable losses earned by OMS which are taxable in the U.S. as effectively connected income (ECI). The foreign tax differential for 2015 included positive ECI expected to be generated for that year. The impact of ECI to income tax expense (benefit) for 2017, 2016 and 2015 was $(28.5) million, $(7.4) million and $7.3 million, respectively. | |||||||||||
[2] | The benefit recorded for the provision for valuation allowance in 2017 relates primarily to the reduction in the valuation allowance necessary as a result of revaluing our deferred tax assets due to U.S. tax reform and the reduction in the corporate tax rate. This benefit is partially offset by an increase in valuation allowance necessary for current year losses. The provision for valuation allowance in 2016 and 2015 primarily relates to the recording of the valuation allowance on both the U.S. and USVI net deferred tax assets as of December 31, 2016 and 2015. Also included in the provision for valuation allowance in 2015 is the reversal of a portion of the valuation allowance previously recorded on taxable losses earned by OMS which were taxable in the U.S. as ECI, which is equal to the positive taxable income that is expected to be generated for ECI purposes for the year ended December 31, 2015. |
Income Taxes - Schedule of E129
Income Taxes - Schedule of Effective Income Tax Reconciliation (Footnote) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Increase decrease in income tax expense as result of effectively connected income | $ (28.5) | $ (7.4) | $ 7.3 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | |
Deferred tax assets | |||
Net operating loss carryforward | $ 59,271 | $ 67,657 | |
Foreign deferred assets | 6,769 | 5,219 | |
Intangible asset amortization | 5,541 | 8,223 | |
Partnership losses | 5,360 | 8,976 | |
Accrued incentive compensation | 4,798 | 8,017 | |
Foreign tax credit | 4,262 | 4,262 | |
Stock-based compensation expense | 4,202 | 5,659 | |
Mortgage servicing rights amortization | 3,664 | 11,592 | |
Accrued other liabilities | 3,239 | 5,543 | |
Accrued legal settlements | 3,602 | 9,178 | |
Tax residuals and deferred income on tax residuals | 2,569 | 4,037 | |
Bad debt and allowance for loan losses | 2,383 | 3,268 | |
Interest expense disallowance | 2,032 | 0 | |
Reserve for servicing exposure | 1,312 | 1,900 | |
Capital losses | 937 | 1,450 | |
Delinquent servicing fees | 769 | 1,647 | |
Other | 3,245 | 1,872 | |
Deferred tax assets, gross | 113,955 | 148,500 | |
Deferred tax liabilities | |||
Foreign undistributed earnings | 4,858 | 13,619 | |
Other | 49 | 76 | |
Deferred tax liabilities, gross | 4,907 | 13,695 | |
Deferred tax assets (liability), gross | 109,048 | 134,805 | |
Valuation allowance | [1] | (107,048) | (132,073) |
Deferred tax assets, net | $ 2,000 | $ 2,732 | |
[1] | The decline in the valuation allowance of $25.0 million in 2017 is due to a $30.0 million reversal of valuation allowance on deferred tax assets (through a reduction in income tax expense), offset in part by the establishment of a $5.0 million valuation allowance (through a reduction in retained earnings) on the deferred tax asset recognized in connection with our adoption of ASU 2016-09. |
Income Taxes - Schedule of D131
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Footnote) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Decrease in valuation allowance in deferred tax assets | $ 25,000 | ||
Deferred tax asset, reversal of valuation allowance | (29,979) | $ 15,639 | $ 97,069 |
Cumulative-effect adjustment, recognition of excess tax benefits | $ 5,000 |
Income Taxes - Schedule of Unre
Income Taxes - Schedule of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation of Unrecognized Tax Benefits [Roll Forward] | |||
Beginning balance | $ 16,994 | $ 32,548 | $ 22,523 |
Additions for tax positions of prior years | 2,281 | 0 | 13,162 |
Reductions for tax positions of prior years | 0 | 0 | (2,741) |
Reductions for settlements | (387) | (14,420) | 0 |
Lapses in statute of limitations | (16,607) | (1,134) | (396) |
Ending balance | $ 2,281 | $ 16,994 | $ 32,548 |
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, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Basic loss per share | ||||||||||||
Net income (loss) attributable to Ocwen common stockholders | $ (44,483) | $ (6,252) | $ (44,507) | $ (32,724) | $ (10,444) | $ 9,391 | $ (87,378) | $ (111,331) | $ (127,966) | $ (199,762) | $ (247,017) | |
Weighted average shares of common stock (in shares) | 127,082,058 | 123,990,700 | 125,315,899 | |||||||||
Basic loss per share (in dollars per share) | $ (0.34) | $ (0.05) | $ (0.36) | $ (0.26) | $ (0.08) | $ 0.08 | $ (0.71) | $ (0.90) | $ (1.01) | $ (1.61) | $ (1.97) | |
Diluted loss per share | ||||||||||||
Net loss attributable to Ocwen stockholders | [1] | $ (127,966) | $ (199,762) | $ (247,017) | ||||||||
Weighted average shares of common stock (in shares) | 127,082,058 | 123,990,700 | 125,315,899 | |||||||||
Effect of dilutive elements (in shares) | 0 | 0 | 0 | |||||||||
Dilutive weighted average shares of common stock (in shares) | 127,082,058 | 123,990,700 | 125,315,899 | |||||||||
Diluted loss per share (in dollars per share) | $ (0.34) | $ (0.05) | $ (0.36) | $ (0.26) | $ (0.08) | $ 0.08 | $ (0.71) | $ (0.90) | $ (1.01) | $ (1.61) | $ (1.97) | |
Stock options and common stock awards excluded from the computation of diluted earnings per share | ||||||||||||
Anti-dilutive Securities (in shares) | [1] | 5,487,164 | 7,176,089 | 2,038,588 | ||||||||
Market Based [Member] | ||||||||||||
Stock options and common stock awards excluded from the computation of diluted earnings per share | ||||||||||||
Anti-dilutive Securities (in shares) | [2] | 862,446 | 795,456 | 924,438 | ||||||||
[1] | Stock options were anti-dilutive because their exercise price was greater than the average market price of Ocwen’s stock. | |||||||||||
[2] | Shares that are issuable upon the achievement of certain market-based performance criteria related to Ocwen’s stock price. |
Employee Compensation and Be134
Employee Compensation and Benefit Plans - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
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) | $ 5.4 | $ 5 | $ 5.4 |
Compensation expense recognized | $ 24.5 | $ 25.5 | $ 30.2 |
Common stock remaining available for future issuance (in shares) | 4,696,602 | ||
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 | $ 1 | ||
Weighted average remaining requisite service period | 1 year 1 month 27 days | ||
Restricted Stock Units [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Weighted average remaining requisite service period | 1 year 4 months 25 days | ||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options | $ 3.3 |
Employee Compensation and Be135
Employee Compensation and Benefit Plans - Schedule of Stock Awards Vesting (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
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 | 30.00% | ||
Award vesting period | 3 years | ||
Vesting percentage of Awards | 33.30% | ||
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 | 70.00% | ||
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, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Outstanding (in shares) | 6,926,634 | [1],[2] | 7,151,225 | [1],[2] | 6,828,861 | |
Outstanding (in dollars per share) | $ 9.88 | [1],[2] | $ 10.10 | [1],[2] | $ 9.99 | |
Granted (in shares) | [3],[4] | 968,041 | ||||
Granted (in dollars per share) | [3],[4] | $ 17.48 | ||||
Exercised (in shares) | [5],[6] | (69,805) | (145,677) | |||
Exercised (in dollars per share) | [5],[6] | $ 5.81 | $ 5.24 | |||
Forfeited/Canceled (in shares) | [4] | (217,979) | (154,786) | (500,000) | ||
Forfeited/Canceled (in dollars per share) | [4] | $ 7.16 | $ 21.80 | $ 24.38 | ||
Outstanding (in shares) | [1],[2] | 6,708,655 | 6,926,634 | 7,151,225 | ||
Outstanding (in dollars per share) | [1],[2] | $ 9.97 | $ 9.88 | $ 10.10 | ||
Exercisable at end of year (in shares) | [1],[2],[7] | 6,234,830 | 6,344,958 | 6,187,559 | ||
Exercisable at end of year (in dollars per share) | [1],[2],[7] | $ 8.87 | $ 8.71 | $ 8.25 | ||
[1] | At December 31, 2017, 280,000 options with a market condition for vesting based on an average common stock trading price of $32.24, had not met their performance criteria. The net aggregate intrinsic value of stock options outstanding and stock options exercisable at December 31, 2017 was $0 and $0, respectively. A total of 4,662,814 market-based options were outstanding at December 31, 2017, of which 4,382,814 were exercisable. | |||||
[2] | At December 31, 2017, the weighted average remaining contractual term of options outstanding and options exercisable was 1.94 years and 1.58 years, respectively. | |||||
[3] | The weighted average grant date fair value of stock options granted in 2015 was $3.28. | |||||
[4] | Upon the resignation of our former executive chairman 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, employees delivered 56,013 shares 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 net shares of stock were issued in 2015 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 and $0.3 million for 2016 and 2015, respectively. | |||||
[7] | The total fair value of stock options that vested and became exercisable during 2017, 2016 and 2015, based on grant-date fair value, was $0.7 million, $1.1 million and $2.0 million, respectively. |
Employee Compensation and Be137
Employee Compensation and Benefit Plans - Schedule of Stock Option Activity (Footnote) (Details) - USD ($) $ / shares in Units, $ in Millions | Jan. 16, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock options granted, fair value (in dollars per share) | $ 3.28 | |||
Total intrinsic value of stock options exercised | $ 0.1 | $ 0.3 | ||
Shares delivered by employees as payment for the exercise price and income tax withholdings on compensation (in shares) | 56,013 | |||
Shares issued related to exercise of stock options (in shares) | 89,664 | |||
Market-based options that have not met performance criteria (in shares) | 280,000 | |||
Average common stock trading price to determine market condition for options exercise | $ 32.24 | |||
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 | 1 year 11 months 8 days | |||
Weighted average remaining contractual term of options exercisable | 1 year 6 months 29 days | |||
Total fair value of stock options vested and became exercisable | $ 0.7 | $ 1.1 | $ 2 | |
Former Executive Chairman Of Board Of Directors [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
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, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||
Unvested at beginning of year (in shares) | 2,752,054 | [1],[2] | 835,730 | [1],[2] | 79,612 | |
Unvested at beginning of year (in dollar per share) | $ 3.91 | [1],[2] | $ 10 | [1],[2] | $ 32.23 | |
Granted (in shares) | 971,761 | 2,184,100 | 790,397 | |||
Granted (in dollar per share) | $ 2.56 | $ 2.19 | $ 8.53 | |||
Vested (in shares) | [3],[4] | (896,272) | (26,666) | (34,279) | ||
Vested (in dollar per share) | [3],[4] | $ 3.26 | $ 32.56 | $ 27.92 | ||
Forfeited/Canceled (in shares) | (73,625) | (241,110) | 0 | |||
Forfeited/Canceled (in dollar per share) | $ 2.20 | $ 6.17 | $ 0 | |||
Unvested at end of year (in shares) | [1],[2] | 2,753,918 | 2,752,054 | 835,730 | ||
Unvested at end of year (in dollar per share) | [1],[2] | $ 3.69 | $ 3.91 | $ 10 | ||
[1] | At December 31, 2017, the weighted average remaining contractual term of share units outstanding was 1.40 years. | |||||
[2] | Excluding the 582,446 market-based stock awards that have not met their performance criteria, the net aggregate intrinsic value of stock awards outstanding at December 31, 2017 was $6.8 million. At December 31, 2017, 502,446 and 80,000 stock units with a market condition for vesting based on an average common stock trading price of $16.26 and $11.72, respectively, had not yet met the market condition. | |||||
[3] | The total fair value of the stock units that vested during 2017, 2016 and 2015, based on grant-date fair value, was $2.9 million, $0.9 million and $1.0 million, respectively. | |||||
[4] | The total intrinsic value of stock units vested, which is defined as the market value of the stock on the date of vesting, was $4.6 million, $0.1 million and $0.3 million for 2017, 2016 and 2015, respectively. |
Employee Compensation and Be139
Employee Compensation and Benefit Plans Schedule of Stock Unit Activity (Footnote) (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock units granted | 971,761 | 2,184,100 | 790,397 | ||||
Intrinsic value of stock units vested | $ 4.6 | $ 0.1 | $ 0.3 | ||||
Total intrinsic value of stock units vested | $ 2.9 | $ 0.9 | $ 1 | ||||
Unvested stock units | 2,753,918 | [1],[2] | 2,752,054 | [1],[2] | 835,730 | [1],[2] | 79,612 |
Weighted average remaining contractual term of share units outstanding | 1 year 4 months 24 days | ||||||
Market-based Stock Awards [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock units granted | 80,000 | ||||||
Average common stock trading price | $ 11.72 | ||||||
Net aggregate intrinsic value of stock awards outstanding | $ 6.8 | ||||||
Market Performance-Based [Member] | Market-based Stock Awards [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock units granted | 502,446 | ||||||
Average common stock trading price | $ 16.26 | ||||||
Unvested stock units | 582,446 | ||||||
[1] | At December 31, 2017, the weighted average remaining contractual term of share units outstanding was 1.40 years. | ||||||
[2] | Excluding the 582,446 market-based stock awards that have not met their performance criteria, the net aggregate intrinsic value of stock awards outstanding at December 31, 2017 was $6.8 million. At December 31, 2017, 502,446 and 80,000 stock units with a market condition for vesting based on an average common stock trading price of $16.26 and $11.72, respectively, had not yet met the market condition. |
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, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Monte Carlo [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Risk-free interest rate | 1.12% | 1.23% | ||
Risk-free interest rate, minimum | 1.12% | |||
Risk-free interest rate, maximum | 1.18% | |||
Expected stock price volatility | [1] | 77.00% | 65.00% | |
Expected stock price volatility, minimum | [1] | 71.00% | ||
Expected stock price volatility, maximum | [1] | 77.00% | ||
Expected dividend yield | 0.00% | 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% | |||
Risk-free interest rate, maximum | 2.08% | |||
Expected stock price volatility | [1] | 45.00% | ||
Expected dividend yield | 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% | |||
Risk-free interest rate, maximum | 2.74% | |||
Expected stock price volatility, minimum | [1] | 51.00% | ||
Expected stock price volatility, maximum | [1] | 108.00% | ||
Expected dividend yield | 0.00% | |||
Contractual life (in years) | 10 years | |||
Minimum [Member] | Monte Carlo [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Fair value | $ 2 | |||
Minimum [Member] | Black Scholes [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Fair value | $ 3.36 | |||
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 | ||
Fair value | $ 5.41 | |||
Maximum [Member] | Monte Carlo [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Fair value | $ 4.80 | |||
Maximum [Member] | Black Scholes [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Fair value | $ 4.62 | |||
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 | ||
Fair value | $ 5.46 | |||
[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, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Equity-based compensation expense: | |||
Awards | $ 5,624 | $ 5,181 | $ 7,291 |
Excess tax benefit related to share-based awards | 3,701 | 686 | 6,824 |
Stock Options [Member] | |||
Equity-based compensation expense: | |||
Awards | 1,457 | 1,644 | 3,978 |
Stock Awards [Member] | |||
Equity-based compensation expense: | |||
Awards | $ 4,167 | $ 3,537 | $ 3,313 |
Business Segment Reporting - Sc
Business Segment Reporting - Schedule of Segment Reporting Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |||||||||
Results of Operations | |||||||||||||||||||
Revenue | $ 276,770 | $ 284,642 | $ 311,300 | $ 321,864 | $ 323,904 | $ 359,448 | $ 373,054 | $ 330,757 | $ 1,194,576 | [1] | $ 1,387,163 | [1] | $ 1,741,098 | [1] | |||||
Expenses | 168,303 | [2],[3] | 273,479 | [2],[3] | 280,480 | [2],[3] | 276,383 | [2],[3] | 237,901 | 271,678 | 385,018 | 328,657 | 998,645 | [1] | 1,223,254 | [1] | 1,478,184 | [1] | |
Other income (expense): | |||||||||||||||||||
Interest income | 15,965 | 19,083 | 18,320 | ||||||||||||||||
Interest expense | (363,238) | (412,583) | (482,373) | ||||||||||||||||
Gain on sale of mortgage servicing rights, net | 10,537 | 8,492 | 83,921 | ||||||||||||||||
Other | [1] | (3,168) | 14,738 | (12,643) | |||||||||||||||
Total other expense, net | (153,781) | [2] | (37,716) | [2] | (72,428) | [2] | (75,979) | [2] | (96,205) | (85,406) | (84,434) | (104,225) | (339,904) | (370,270) | (392,775) | ||||
Loss before income taxes | (45,314) | $ (26,553) | $ (41,608) | $ (30,498) | (10,202) | $ 2,364 | $ (96,398) | $ (102,125) | (143,973) | (206,361) | (129,861) | ||||||||
Total Assets | |||||||||||||||||||
Balance | 8,403,164 | 7,655,663 | 8,403,164 | 7,655,663 | 7,380,308 | ||||||||||||||
Servicing [Member] | |||||||||||||||||||
Results of Operations | |||||||||||||||||||
Revenue | [1] | 1,041,290 | 1,247,159 | 1,613,537 | |||||||||||||||
Expenses | [1] | 716,384 | 910,577 | 1,211,140 | |||||||||||||||
Other income (expense): | |||||||||||||||||||
Interest income | 783 | (109) | 1,044 | ||||||||||||||||
Interest expense | (293,595) | (357,413) | (446,377) | ||||||||||||||||
Gain on sale of mortgage servicing rights, net | 10,537 | 8,492 | 83,921 | ||||||||||||||||
Other | [1] | 4,049 | 15,812 | (14,370) | |||||||||||||||
Total other expense, net | (278,226) | (333,218) | (375,782) | ||||||||||||||||
Loss before income taxes | 46,680 | 3,364 | 26,615 | ||||||||||||||||
Total Assets | |||||||||||||||||||
Balance | 3,033,243 | 3,312,371 | 3,033,243 | 3,312,371 | 4,089,911 | ||||||||||||||
Lending [Member] | |||||||||||||||||||
Results of Operations | |||||||||||||||||||
Revenue | [1] | 127,475 | 112,363 | 124,724 | |||||||||||||||
Expenses | [1] | 128,058 | 114,199 | 108,431 | |||||||||||||||
Other income (expense): | |||||||||||||||||||
Interest income | 10,914 | 15,300 | 14,669 | ||||||||||||||||
Interest expense | (13,893) | (14,398) | (9,859) | ||||||||||||||||
Gain on sale of mortgage servicing rights, net | 0 | 0 | 0 | ||||||||||||||||
Other | [1] | (869) | 1,065 | 2,123 | |||||||||||||||
Total other expense, net | (3,848) | 1,967 | 6,933 | ||||||||||||||||
Loss before income taxes | (4,431) | 131 | 23,226 | ||||||||||||||||
Total Assets | |||||||||||||||||||
Balance | 4,945,456 | 3,863,862 | 4,945,456 | 3,863,862 | 2,811,165 | ||||||||||||||
Corporate Items and Other [Member] | |||||||||||||||||||
Results of Operations | |||||||||||||||||||
Revenue | [1] | 25,811 | 27,646 | 2,895 | |||||||||||||||
Expenses | [1] | 154,203 | 198,483 | 158,671 | |||||||||||||||
Other income (expense): | |||||||||||||||||||
Interest income | 4,268 | 3,892 | 2,607 | ||||||||||||||||
Interest expense | (55,750) | (40,772) | (26,137) | ||||||||||||||||
Gain on sale of mortgage servicing rights, net | 0 | 0 | 0 | ||||||||||||||||
Other | [1] | (6,348) | (2,139) | (396) | |||||||||||||||
Total other expense, net | (57,830) | (39,019) | (23,926) | ||||||||||||||||
Loss before income taxes | (186,222) | (209,856) | (179,702) | ||||||||||||||||
Total Assets | |||||||||||||||||||
Balance | 424,465 | 479,430 | 424,465 | 479,430 | 479,232 | ||||||||||||||
Corporate Eliminations [Member] | |||||||||||||||||||
Results of Operations | |||||||||||||||||||
Revenue | [1] | 0 | (5) | (58) | |||||||||||||||
Expenses | [1] | 0 | (5) | (58) | |||||||||||||||
Other income (expense): | |||||||||||||||||||
Interest income | 0 | 0 | 0 | ||||||||||||||||
Interest expense | 0 | 0 | 0 | ||||||||||||||||
Gain on sale of mortgage servicing rights, net | 0 | 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] | A benchmarking valuation assumption update related to our non-Agency MSRs carried at fair value resulted in an $84.4 million increase in value and reduction in related losses (reported in Servicing and origination expense) during the quarter ended December 31, 2017. This reflects an upward trend in market pricing on non-Agency MSRs similar in profile to Ocwen’s portfolio. This valuation assumption update also resulted in a largely offsetting increase of $73.4 million in the value of the NRZ financing liability which was recognized as interest expense. | ||||||||||||||||||
[3] | Includes the recovery of $28.5 million of losses during the quarter ended December 31, 2017 related to a settlement of outstanding claims that arose from indemnification obligations in connection with our acquisition of MSRs and related servicing advances in 2013. We had recognized such losses on advances in prior periods and recorded the 2017 recovery in Servicing and origination expense. |
Business Segment Reporting -143
Business Segment Reporting - Schedule of Depreciation and Amortization by Segment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segment Reporting Information [Line Items] | |||
Depreciation expense | $ 26,886 | $ 25,338 | $ 19,159 |
Amortization of mortgage servicing rights | 51,788 | 32,978 | 99,194 |
Amortization of debt discount | 1,114 | 4,177 | 2,680 |
Amortization of debt issuance costs | 2,738 | 25,662 | 22,664 |
Servicing [Member] | |||
Segment Reporting Information [Line Items] | |||
Depreciation expense | 5,797 | 6,804 | 2,990 |
Amortization of mortgage servicing rights | 51,515 | 32,669 | 98,849 |
Amortization of debt discount | 0 | 727 | 2,680 |
Amortization of debt issuance costs | 0 | 13,455 | 21,269 |
Lending [Member] | |||
Segment Reporting Information [Line Items] | |||
Depreciation expense | 194 | 228 | 380 |
Amortization of mortgage servicing rights | 273 | 309 | 345 |
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 | 20,895 | 18,306 | 15,789 |
Amortization of mortgage servicing rights | 0 | 0 | 0 |
Amortization of debt discount | 1,114 | 3,450 | 0 |
Amortization of debt issuance costs | $ 2,738 | $ 12,207 | $ 1,395 |
Business Segment Reporting - Na
Business Segment Reporting - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segment Reporting Information [Line Items] | |||
Write-off of internally developed software | $ 8,502 | $ 0 | $ 0 |
Lending [Member] | |||
Segment Reporting Information [Line Items] | |||
Decrease in income before income taxes | $ (9,900) | $ (10,700) | |
Forward Wholesale Lending Segment [Member] | |||
Segment Reporting Information [Line Items] | |||
Write-off of internally developed software | $ 6,800 |
Regulatory Requirements - Narra
Regulatory Requirements - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | 48 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2017 | ||
Loss Contingencies [Line Items] | |||||
Third party monitoring costs related to regulatory matters and resolutions | $ 177,500 | ||||
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 | $ 283,000 | 283,000 | |||
Aggregate cash payments in connection with legal and regulatory settlements | [1] | 174,941 | $ 47,754 | $ 4,928 | |
California Department of Business Oversight [Member] | |||||
Loss Contingencies [Line Items] | |||||
Litigation settlement expense | 25,400 | ||||
Office of Mortgage Settlement Oversight [Member] | |||||
Loss Contingencies [Line Items] | |||||
Civil penalty | $ 1,000 | $ 1,000 | |||
[1] | ncludes cash payments made in connection with resolved legal and regulatory matters. |
Commitments - Narrative (Detail
Commitments - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Other Commitments [Line Items] | |||
Operating leases, rent expense | $ 17.9 | $ 20 | $ 23.7 |
Floating Rate Reverse Mortgage Loans [Member] | |||
Other Commitments [Line Items] | |||
Additional borrowing capacity to borrowers | 1,400 | ||
Forward Mortgage Loan Interest Rate Lock Commitments [Member] | |||
Other Commitments [Line Items] | |||
Short-term commitments to lend | 81.7 | ||
Reverse Mortgage Loan Interest Rate Lock Commitments [Member] | |||
Other Commitments [Line Items] | |||
Short-term commitments to lend | $ 14.6 |
Commitments - Schedule of Futur
Commitments - Schedule of Future Minimum Rental Commitments under Non-cancelable Operating Leases (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
2,018 | $ 10,135 |
2,019 | 10,051 |
2,020 | 7,754 |
2,021 | 6,568 |
2,022 | 4,018 |
Thereafter | 932 |
Total minimum lease payments, gross | 39,458 |
Less: Sublease income | (492) |
Total minimum lease payments, net | $ 38,966 |
Contingencies - Narrative (Deta
Contingencies - Narrative (Details) | Feb. 01, 2018States | Apr. 28, 2017USD ($) | Apr. 20, 2017USD ($)StateStates | Jan. 31, 2018shares | Dec. 31, 2017USD ($)LoanStatesshares | Dec. 31, 2016USD ($)Loan | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Loss Contingencies [Line Items] | |||||||||
Loss contingency accrual | $ 51,057,000 | $ 93,797,000 | $ 74,922,000 | $ 38,962,000 | |||||
Aggregate cash payments in connection with legal and regulatory settlements | [1] | $ 174,941,000 | 47,754,000 | $ 4,928,000 | |||||
Number of states charging with regulatory action | States | 30 | ||||||||
Number of loan files to be tested relating to escrow on residential real property | Loan | 9,000 | ||||||||
Number of state attorneys general charging with regulatory action | State | 2 | ||||||||
Outstanding representation and warranty repurchase demands | $ 30,800,000 | $ 47,500,000 | |||||||
Outstanding representation and warranty repurchase demands, number of loans | Loan | 180 | 239 | |||||||
Indemnification claims recovered | $ 29,900,000 | ||||||||
Subsequent Event [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Number of jurisdictions where regulatory actions were resolved | States | 28 | ||||||||
Number of states where company is continuing to seek resolutions on regulatory actions | States | 2 | ||||||||
Securities Class Action [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Aggregate cash payments in connection with legal and regulatory settlements | 36,000,000 | ||||||||
Litigation settlement amount | 49,000,000 | ||||||||
Expected insurance recoveries | 14,000,000 | ||||||||
Fisher Cases [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Litigation settlement amount | 15,000,000 | ||||||||
Litigation settlement expense | 15,000,000 | ||||||||
Consumer Financial Protection Bureau [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Loss contingency accrual | $ 12,500,000 | ||||||||
Multistate Mortgage Committee [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Loss contingency accrual | $ 0 | ||||||||
Number of states who are part of confidential supervisory memorandum of understanding | States | 6 | ||||||||
Ginnie Mae [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Forbearance period for exercising rights on guaranty agreements | 90 days | ||||||||
Additional forbearance period for exercising rights on guaranty agreements | 90 days | ||||||||
Florida Attorney General [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Injunctive and equitable relief, costs, and civil money penalties sought | $ 10,000 | ||||||||
Massachusetts Attorney General [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Injunctive and equitable relief, costs, and civil money penalties sought | $ 5,000 | ||||||||
Securities Class Action [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Issuance of common stock to plaintiffs, shares | shares | 2,500,000 | ||||||||
Issuance of common stock, shares | shares | 625,000 | ||||||||
Securities Class Action [Member] | Subsequent Event [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Issuance of common stock, shares | shares | 1,875,000 | ||||||||
[1] | ncludes cash payments made in connection with resolved legal and regulatory matters. |
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, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Indemnification Obligations Liability [Roll Forward] | ||||
Beginning balance | $ 24,285 | $ 36,615 | $ 132,918 | |
Provision for representation and warranty obligations | (1,371) | (4,060) | (8,418) | |
New production reserves | 702 | 864 | 814 | |
Payments made in connection with sales of MSRs | 0 | (1,320) | (81,498) | |
Charge-offs and other | [1] | (4,387) | (7,814) | (7,201) |
Ending balance | $ 19,229 | $ 24,285 | $ 36,615 | |
[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, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||||||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||||
Revenue | $ 276,770 | $ 284,642 | $ 311,300 | $ 321,864 | $ 323,904 | $ 359,448 | $ 373,054 | $ 330,757 | $ 1,194,576 | [1] | $ 1,387,163 | [1] | $ 1,741,098 | [1] | ||||
Expenses | 168,303 | [2],[3] | 273,479 | [2],[3] | 280,480 | [2],[3] | 276,383 | [2],[3] | 237,901 | 271,678 | 385,018 | 328,657 | 998,645 | [1] | 1,223,254 | [1] | 1,478,184 | [1] |
Other expense, net | (153,781) | [2] | (37,716) | [2] | (72,428) | [2] | (75,979) | [2] | (96,205) | (85,406) | (84,434) | (104,225) | (339,904) | (370,270) | (392,775) | |||
Loss before income taxes | (45,314) | (26,553) | (41,608) | (30,498) | (10,202) | 2,364 | (96,398) | (102,125) | (143,973) | (206,361) | (129,861) | |||||||
Income tax expense (benefit) | (51) | (20,418) | 2,828 | 2,125 | 228 | (7,110) | (9,180) | 9,076 | (15,516) | (6,986) | 116,851 | |||||||
Net loss | (45,263) | (6,135) | (44,436) | (32,623) | (10,430) | 9,474 | (87,218) | (111,201) | (128,457) | (199,375) | (246,712) | |||||||
Net income attributable to non-controlling interests | 780 | (117) | (71) | (101) | (14) | (83) | (160) | (130) | 491 | (387) | (305) | |||||||
Net loss attributable to Ocwen common stockholders | $ (44,483) | $ (6,252) | $ (44,507) | $ (32,724) | $ (10,444) | $ 9,391 | $ (87,378) | $ (111,331) | $ (127,966) | $ (199,762) | $ (247,017) | |||||||
Loss per share attributable to Ocwen stockholders | ||||||||||||||||||
Basic (in dollars per share) | $ (0.34) | $ (0.05) | $ (0.36) | $ (0.26) | $ (0.08) | $ 0.08 | $ (0.71) | $ (0.90) | $ (1.01) | $ (1.61) | $ (1.97) | |||||||
Diluted (in dollars per share) | $ (0.34) | $ (0.05) | $ (0.36) | $ (0.26) | $ (0.08) | $ 0.08 | $ (0.71) | $ (0.90) | $ (1.01) | $ (1.61) | $ (1.97) | |||||||
[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] | A benchmarking valuation assumption update related to our non-Agency MSRs carried at fair value resulted in an $84.4 million increase in value and reduction in related losses (reported in Servicing and origination expense) during the quarter ended December 31, 2017. This reflects an upward trend in market pricing on non-Agency MSRs similar in profile to Ocwen’s portfolio. This valuation assumption update also resulted in a largely offsetting increase of $73.4 million in the value of the NRZ financing liability which was recognized as interest expense. | |||||||||||||||||
[3] | Includes the recovery of $28.5 million of losses during the quarter ended December 31, 2017 related to a settlement of outstanding claims that arose from indemnification obligations in connection with our acquisition of MSRs and related servicing advances in 2013. We had recognized such losses on advances in prior periods and recorded the 2017 recovery in Servicing and origination expense. |
Quarterly Results of Operati151
Quarterly Results of Operations (Unaudited) - Schedule of Quarterly Results of Operations (Unaudited) (Footnote) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Dec. 31, 2017 | Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | ||
Increase in fair value of non-agency MSRs | $ 84.4 | |
Increase in valuation of financing liabilities | $ 73.4 | |
Recovery of losses related to a settlement of outstanding claims | $ 28.5 |
Subsequent Events - Narrative (
Subsequent Events - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | Feb. 27, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Subsequent Event [Line Items] | ||||
Cumulative-effect adjustment on retained earnings, before tax | $ 300 | |||
Senior notes, net | $ 347,338 | $ 346,789 | ||
Common stock, par value per share | $ 0.01 | $ 0.01 | ||
Government Insured Servicing Rights [Member] | ||||
Subsequent Event [Line Items] | ||||
Valuation Allowance for Impairment of Recognized Servicing Assets, Balance | $ 24,800 | |||
UPB of MSRs for which fair value election was made | 16,900,000 | |||
Mortgage servicing rights, at amortized cost | 133,200 | |||
Agency MSRs [Member] | ||||
Subsequent Event [Line Items] | ||||
UPB of MSRs for which fair value election was made | 24,000,000 | |||
Mortgage servicing rights, at amortized cost | $ 203,700 | |||
Subsequent Event [Member] | PHH Corporation [Member] | ||||
Subsequent Event [Line Items] | ||||
Merger consideration to be paid in acquisition | $ 360,000 | |||
Estimated cash outflow related to acquisition | 74,000 | |||
Senior notes, net | $ 119,000 | |||
Common stock, par value per share | $ 0.01 | |||
Common stock, conversion into right to receive cash | $ 11 | |||
Subsequent Event [Member] | PHH Corporation [Member] | Senior Notes Due 2019 [Member] | ||||
Subsequent Event [Line Items] | ||||
Senior notes, net | $ 97,000 | |||
Debt instrument, interest rate | 7.375% | |||
Subsequent Event [Member] | PHH Corporation [Member] | Senior Notes Due 2021 [Member] | ||||
Subsequent Event [Line Items] | ||||
Senior notes, net | $ 22,000 | |||
Debt instrument, interest rate | 6.375% | |||
Subsequent Event [Member] | Fair Value Agency Mortgage Servicing Rights [Member] | ||||
Subsequent Event [Line Items] | ||||
Cumulative-effect adjustment on retained earnings, before tax | $ 82,000 |