Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Feb. 22, 2019 | Jun. 30, 2018 | |
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, 2018 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | false | ||
Entity Common Stock, Shares Outstanding | 133,918,693 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Shell Company | false | ||
Entity Public Float | $ 524,401,246 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Assets | ||
Cash | $ 329,132 | $ 259,655 |
Restricted cash (amounts related to VIEs of $20,968 and $21,922) | 67,878 | 42,905 |
Mortgage servicing rights ($1,457,149 and $671,962 carried at fair value) | 1,457,149 | 1,008,844 |
Advances, net | 249,382 | 211,793 |
Match funded assets (related to variable interest entities (VIEs)) | 937,294 | 1,177,357 |
Loans held for sale ($176,525 and $214,262 carried at fair value) | 242,622 | 238,358 |
Loans held for investment, at fair value (amounts related to VIEs of $26,520 and $0) | 5,498,719 | 4,715,831 |
Receivables, net | 198,262 | 199,529 |
Premises and equipment, net | 33,417 | 37,006 |
Other assets ($7,568 and $8,900 carried at fair value)(amounts related to VIEs of $2,874 and $5,437) | 379,567 | 511,886 |
Assets related to discontinued operations | 794 | 0 |
Total assets | 9,394,216 | 8,403,164 |
Liabilities | ||
HMBS-related borrowings, at fair value | 5,380,448 | 4,601,556 |
Other financing liabilities ($1,057,671 and $508,291 carried at fair value) (amounts related to VIEs of $24,815 and $0) | 1,127,613 | 593,518 |
Match funded liabilities (related to VIEs) | 778,284 | 998,618 |
Other secured borrowings, net | 382,538 | 545,850 |
Senior notes, net | 448,727 | 347,338 |
Other liabilities ($4,986 and $635 carried at fair value) | 703,636 | 769,410 |
Liabilities related to discontinued operations | 18,265 | 0 |
Total liabilities | 8,839,511 | 7,856,290 |
Commitments and Contingencies (Notes 24 and 25) | ||
Equity | ||
Common stock, $.01 par value; 200,000,000 shares authorized; 133,912,425 and 131,484,058 shares issued and outstanding at December 31, 2018 and December 31, 2017, respectively | 1,339 | 1,315 |
Additional paid-in capital | 554,056 | 547,057 |
Retained earnings (accumulated deficit) | 3,567 | (2,083) |
Accumulated other comprehensive loss, net of income taxes | (4,257) | (1,249) |
Total Ocwen stockholders’ equity | 554,705 | 545,040 |
Non-controlling interest in subsidiaries | 0 | 1,834 |
Total equity | 554,705 | 546,874 |
Total liabilities and equity | $ 9,394,216 | $ 8,403,164 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | |
Restricted cash, amounts related to VIEs | $ 20,968 | $ 21,922 | |
Mortgage servicing rights, at fair value | 1,457,149 | 671,962 | |
Loans held for sale, at fair value | [1] | 176,525 | 214,262 |
Loans held for investment, at fair value | 5,498,719 | 4,715,831 | |
Other assets, at fair value | 7,568 | 8,900 | |
Other assets, amounts related to VIEs | 2,874 | 5,437 | |
Other financing liabilities | 1,127,613 | 593,518 | |
Other financing liabilities, at fair value | 1,057,671 | 508,291 | |
Other liabilities, at fair value | $ 4,986 | $ 635 | |
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) | 133,912,425 | 131,484,058 | |
Common stock, shares outstanding (in shares) | 133,912,425 | 131,484,058 | |
Residential Mortgage Backed Securitization Trusts [Member] | |||
Mortgage servicing rights, at fair value | $ 200 | ||
Loans held for investment, at fair value | 26,520 | $ 0 | |
Other financing liabilities | $ 24,815 | $ 0 | |
[1] | At December 31, 2018, 2017 and 2016, the balances include $(7.2) million, $5.0 million and $4.9 million, respectively, of fair value adjustments. |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Revenue | ||||
Servicing and subservicing fees | $ 934,336 | $ 989,376 | $ 1,186,620 | |
Gain on loans held for sale, net | 77,743 | 103,402 | 90,391 | |
Other revenue, net | 50,966 | 101,798 | 110,152 | |
Total revenue | [1] | 1,063,045 | 1,194,576 | 1,387,163 |
Expenses | ||||
Compensation and benefits | 298,036 | 358,994 | 381,340 | |
Professional services | 165,554 | 229,451 | 305,586 | |
MSR valuation adjustments, net | 153,457 | 52,962 | 124,029 | |
Servicing and origination | 131,297 | 141,496 | 188,750 | |
Technology and communications | 98,241 | 100,490 | 110,333 | |
Occupancy and equipment | 59,631 | 66,019 | 80,191 | |
Other expenses | 26,280 | 49,233 | 33,025 | |
Total expenses | [1] | 932,496 | 998,645 | 1,223,254 |
Other income (expense) | ||||
Interest income | 14,026 | 15,965 | 19,083 | |
Interest expense | (275,041) | (363,238) | (412,583) | |
Bargain purchase gain | 64,036 | 0 | 0 | |
Gain on sale of mortgage servicing rights, net | 1,325 | 10,537 | 8,492 | |
Other, net | (6,371) | (3,168) | 14,738 | |
Total other expense, net | (202,025) | (339,904) | (370,270) | |
Loss from continuing operations before income taxes | (71,476) | (143,973) | (206,361) | |
Income tax expense (benefit) | 529 | (15,516) | (6,986) | |
Loss from continuing operations, net of tax | (72,005) | (128,457) | (199,375) | |
Income from discontinued operations, net of tax | 1,409 | 0 | 0 | |
Net loss | (70,596) | (128,457) | (199,375) | |
Net (income) loss attributable to non-controlling interests | (176) | 491 | (387) | |
Net loss attributable to Ocwen stockholders | $ (70,772) | $ (127,966) | $ (199,762) | |
Earnings (loss) per share attributable to Ocwen stockholders - Basic and Diluted | ||||
Continuing operations | $ (0.54) | $ (1.01) | $ (1.61) | |
Discontinued operations | 0.01 | 0 | 0 | |
Earnings per share, basic and diluted | $ (0.53) | $ (1.01) | $ (1.61) | |
Weighted average common shares outstanding | ||||
Basic (in shares) | 133,703,359 | 127,082,058 | 123,990,700 | |
Diluted (in shares) | 133,703,359 | 127,082,058 | 123,990,700 | |
[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, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (70,596) | $ (128,457) | $ (199,375) | |
Other comprehensive income, net of income taxes | ||||
Reclassification adjustment for losses on cash flow hedges included in net income | [1] | 149 | 201 | 313 |
Change in unfunded pension plan obligation liability | (3,219) | 0 | 0 | |
Other | 61 | 0 | 0 | |
Comprehensive loss | (73,605) | (128,256) | (199,062) | |
Comprehensive (income) loss attributable to non-controlling interests | (176) | 491 | (387) | |
Comprehensive loss attributable to Ocwen stockholders | $ (73,781) | $ (127,765) | $ (199,449) | |
[1] | These losses are reclassified to Other, net in the Consolidated Statements of Operations. |
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, 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 | |||||
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 | 0 | 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 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | $ (70,596) | (70,772) | 176 | |||
Cumulative effect of fair value election - Mortgage servicing rights, net of taxes | 82,043 | 82,043 | ||||
Cumulative effect of adoption of FASB Accounting Standards Update No. 2016-16 | (5,621) | (5,621) | ||||
Issuance of common stock | 5,719 | $ 19 | 5,700 | |||
Issuance of common stock, shares | 1,875,000 | |||||
Equity-based compensation and other | 1,304 | $ 5 | 1,299 | |||
Equity-based compensation and other (in shares) | 553,367 | |||||
Capital distribution to non-controlling interest | (822) | (822) | ||||
Purchase of non-controlling interest | (1,188) | (1,188) | ||||
Other comprehensive income, net of income taxes | (3,008) | (3,008) | ||||
Balance at at Dec. 31, 2018 | $ 554,705 | $ 1,339 | $ 554,056 | $ 3,567 | $ (4,257) | $ 0 |
Balance at (in shares) at Dec. 31, 2018 | 133,912,425 | 133,912,425 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Cash flows from operating activities | ||||
Net loss | $ (70,596) | $ (128,457) | $ (199,375) | |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||
MSR valuation adjustments, net | 153,457 | 52,962 | 124,029 | |
Gain on sale of mortgage servicing rights, net | (1,325) | (10,537) | (8,492) | |
Provision for bad debts | 49,180 | 76,828 | 81,079 | |
Depreciation | 27,202 | 26,886 | 25,338 | |
Loss on write-off of fixed assets, net | 0 | 8,502 | 0 | |
Amortization of debt issuance costs | 2,921 | 2,738 | 25,662 | |
Provision for (reversal of) valuation allowance on deferred tax assets | (23,347) | (29,979) | 15,639 | |
Decrease (increase) in deferred tax assets other than provision for valuation allowance | 20,058 | 30,710 | (11,119) | |
Equity-based compensation expense | 2,366 | 5,624 | 5,181 | |
(Gain) loss on valuation of financing liability | (19,269) | 41,282 | 0 | |
(Gain) loss on trading securities | (527) | 6,756 | (335) | |
Net gain on valuation of mortgage loans held for investment and HMBS-related borrowings | (18,698) | (23,733) | (26,016) | |
Bargain purchase gain | 64,036 | 0 | 0 | |
Gain on loans held for sale, net | (32,722) | (53,209) | (65,649) | |
Origination and purchase of loans held for sale | (1,715,190) | (3,695,163) | (6,090,432) | |
Proceeds from sale and collections of loans held for sale | 1,625,116 | 3,662,065 | 5,969,812 | |
Changes in assets and liabilities: | ||||
Decrease in advances and match funded advances | 258,899 | 330,052 | 452,435 | |
Decrease in receivables and other assets, net | 144,310 | 199,209 | 128,398 | |
Decrease in other liabilities | (69,207) | (100,650) | (7,143) | |
Other, net | 3,986 | 7,135 | 2,216 | |
Net cash provided by operating activities | 272,578 | 409,021 | 421,228 | |
Cash flows from investing activities | ||||
Origination of loans held for investment | (920,476) | (1,277,615) | (1,098,758) | |
Principal payments received on loans held for investment | 400,521 | 444,388 | 243,596 | |
Net cash acquired by Ocwen | 64,692 | 0 | 0 | |
Restricted cash acquired in the acquisition of PHH | 38,813 | 0 | 0 | |
Purchase of mortgage servicing rights | (5,433) | (1,658) | (17,356) | |
Proceeds from sale of mortgage servicing rights | 7,276 | 4,234 | 47,044 | |
Proceeds from sale of advances and match funded advances | 33,792 | 9,446 | 103,017 | |
Issuance of automotive dealer financing notes | (19,642) | (174,363) | (100,722) | |
Collections of automotive dealer financing notes | 52,598 | 162,965 | 65,688 | |
Additions to premises and equipment | (9,016) | (9,053) | (33,518) | |
Proceeds from sale of real estate | 9,546 | 3,147 | 11,069 | |
Other, net | 2,464 | (707) | (11,679) | |
Net cash used in investing activities | (344,865) | (839,216) | (791,619) | |
Cash flows from financing activities | ||||
Repayment of match funded liabilities, net | (220,334) | (282,379) | (303,052) | |
Proceeds from mortgage loan warehouse facilities and other secured borrowings | 2,991,261 | 7,215,264 | 9,242,671 | |
Repayments of mortgage loan warehouse facilities and other secured borrowings | (3,417,398) | (7,431,763) | (9,463,063) | |
Repurchase of senior notes, net | (18,482) | 0 | 0 | |
Payment of debt issuance costs | 0 | (841) | (11,136) | |
Proceeds from sale of mortgage servicing rights accounted for as a financing | 279,586 | 54,601 | 0 | |
Proceeds from sale of reverse mortgages (HECM loans) accounted for as a financing (HMBS-related borrowings) | 948,917 | 1,281,543 | 1,086,795 | |
Repayment of HMBS-related borrowings | (391,985) | (418,503) | (230,045) | |
Issuance of common stock | 0 | 13,913 | 0 | |
Repurchase of common stock | 0 | 0 | (5,890) | |
Capital distribution to non-controlling interest | (822) | 0 | 0 | |
Purchase of non-controlling interest | (1,188) | 0 | 0 | |
Other | (2,818) | (1,478) | (49) | |
Net cash provided by financing activities | 166,737 | 430,357 | 316,231 | |
Net increase (decrease) in cash and restricted cash | 94,450 | 162 | (54,160) | |
Cash and restricted cash at beginning of year | 302,560 | 302,398 | 356,558 | |
Cash and restricted cash at end of year | 397,010 | 302,560 | 302,398 | |
Supplemental cash flow information | ||||
Interest paid | 271,835 | 364,702 | 389,638 | |
Income tax payments (refunds), net | 10,957 | (23,501) | 19,715 | |
Supplemental non-cash investing and financing activities | ||||
Loans held for investment | 28,373 | 0 | 0 | |
Other financing liabilities | 26,643 | 0 | 0 | |
Transfers from loans held for investment to loans held for sale | 1,038 | 3,803 | 0 | |
Transfers of loans held for sale to real estate owned | 4,241 | 875 | 7,675 | |
Issuance of common stock in connection with litigation settlement | [1] | 5,719 | 1,937 | 0 |
Exchange of senior unsecured notes for senior secured notes | 0 | 0 | 346,878 | |
Fair value of assets acquired | ||||
Fair value of assets acquired | 1,192,155 | 0 | 0 | |
Fair value of liabilities assumed | ||||
Fair value of liabilities assumed | 769,723 | 0 | 0 | |
Total identifiable net assets acquired | 422,432 | 0 | 0 | |
Bargain purchase gain | 64,036 | 0 | 0 | |
Total consideration | 358,396 | 0 | 0 | |
Less: Cash consideration paid by PHH | (325,000) | 0 | 0 | |
Cash consideration paid by Ocwen | 33,396 | 0 | 0 | |
Cash acquired from PHH | 98,088 | 0 | 0 | |
Net cash acquired by Ocwen | $ 64,692 | $ 0 | $ 0 | |
[1] | See Note 15 — Equity for additional information. |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Cash Flows [Abstract] | |||
Cash | $ 329,132 | $ 259,655 | $ 256,549 |
Restricted cash and equivalents: | |||
Debt service accounts | 26,626 | 33,726 | 42,822 |
Other restricted cash | 41,252 | 9,179 | 3,027 |
Total cash and restricted cash reported in the statements of cash flows | $ 397,010 | $ 302,560 | $ 302,398 |
Organization, Business Environm
Organization, Business Environment, Basis of Presentation and Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
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 subsidiaries, Ocwen Mortgage Servicing, Inc. (OMS) and PHH Corporation (PHH), and directly or indirectly owns all of the outstanding stock of its other primary operating subsidiaries: Ocwen Loan Servicing, LLC (OLS), PHH Mortgage Corporation (PMC), 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 advances for certain property tax and insurance premium payments, default and property maintenance payments and principal and interest payments on behalf of delinquent borrowers to mortgage loan investors before recovering 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 mortgages. The GSEs or Ginnie Mae guarantee these mortgage securitizations. We originate Home Equity Conversion Mortgages (HECM, or reverse mortgages) that are insured by the FHA and are an approved issuer of Home Equity Conversion Mortgage-Backed Securities (HMBS) that are guaranteed by Ginnie Mae. We had a total of approximately 7,200 employees at December 31, 2018 of which approximately 4,100 were located in India and approximately 500 were based in the Philippines. Our operations in India and the Philippines primarily provide internal support services 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, 2018 . 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 operate our business successfully. Losses have significantly eroded stockholders’ equity and weakened our financial condition. Our near-term priority is to return to profitability in the shortest timeframe possible within an appropriate risk and compliance environment. We believe our acquisition of PHH provides us with the opportunity to transform into a stronger, more efficient company better able to serve our customers and clients, and positions us for a return to growth and profitability. See Note 2 — Business Acquisition and Note 23 — Regulatory Requirements for additional information regarding the acquisition of PHH. Now that we have consummated our acquisition of PHH, if we can execute on five key initiatives, we believe we will drive stronger financial performance. First, we must successfully execute on the integration of PHH’s business with ours, including a smooth transition onto the Black Knight Financial Services, Inc. (Black Knight) LoanSphere MSP ® servicing system (Black Knight MSP). Second, we must re-engineer our cost structure to go beyond eliminating redundant costs through the integration process. Third, we must fulfill our regulatory commitments and resolve our remaining legal and regulatory matters on satisfactory terms. Fourth, we must replenish our servicing portfolio through expanding our lending business and permissible MSR acquisitions that are prudent and well-executed with appropriate financial return targets. Finally, we must ensure that we continue to manage our balance sheet to provide a solid platform for executing on our growth and other initiatives. We believe the PHH acquisition will provide the following benefits to enable the execution of the phase one initiatives: • Accelerate our transition to Black Knight MSP versus a de novo implementation; • Reduce fixed costs, on a combined basis, through reductions in duplicative corporate overhead and other costs; • Improve economies of scale through growth in our servicing portfolio; and, • Provide a foundation to enable the combined business to resume new business and growth activities that will, at a minimum, offset portfolio runoff. The New York Department of Financial Services (NY DFS) has eased its restriction on Ocwen’s ability to acquire MSRs to allow certain acquisitions of MSRs that are boarded onto Black Knight MSP subject to annual portfolio growth limitations until such time as the NY DFS determines that all loans have been successfully migrated to Black Knight MSP and that Ocwen has developed a satisfactory infrastructure to board sizeable portfolios of MSRs. 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 23 — Regulatory Requirements and Note 25 — Contingencies for further information. Regarding the current maturities of our borrowings, as of December 31, 2018 , we have approximately $0.9 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 of such alleged default, we could be subject to adverse actions by our lenders that could have a material adverse impact on us. In addition, OLS, Homeward, PMC 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 13 — Borrowings , Note 23 — Regulatory Requirements and Note 25 — 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. Our statements of operations and consolidated balance sheets include the accounts and results of PHH Corporation and its subsidiaries from the acquisition date of October 4, 2018 through December 31, 2018. See Note 2 — Business Acquisition for additional information. 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 Certain amounts in the consolidated balance sheet at December 31, 2017, consolidated statements of operations for 2017 and 2016, and consolidated statements of cash flows for 2017 and 2016 have been reclassified to conform to the current year presentation as follows: December 31, 2017 Balance sheet From Other assets Debt service accounts $ 33,726 Other restricted cash 9,179 To Restricted cash 42,905 Years ended December 31, 2017 2016 Statements of Operations From Servicing and origination expense Impairment charge (reversal) on MSRs $ (3,366 ) $ 10,813 Loss on valuation of MSRs, at fair value 4,540 80,238 From Amortization of MSRs 51,788 32,978 To MSR valuation adjustments, net 52,962 124,029 Statements of Cash Flows Operating activities From Amortization of MSRs $ 51,788 $ 32,978 From Loss on valuation of MSRs, at fair value 4,540 80,238 From Impairment charge (reversal) on MSRs (3,366 ) 10,813 To MSR valuation adjustments, net 52,962 124,029 From Realized and unrealized gains on derivative financial instruments 191 1,724 To Other, net 191 1,724 Investing activities From Other, net 3,147 11,069 To Proceeds from sale of real estate 3,147 11,069 These reclassifications had no impact on total assets in our consolidated balance sheet, total expenses in our consolidated statements of operations or cash flows from operating, investing or financing activities in our consolidated statements of cash flows. 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 the assets acquired and liabilities assumed in connection with the PHH acquisition, fair value measurements, income taxes, the provision for potential losses that may arise from litigation proceedings, 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. Restricted Cash Restricted cash includes amounts specifically designated to repay debt, to provide over-collateralization for secured borrowings and match funded debt facilities, and to provide additional collateral to support certain obligations, including letters of credit. Mortgage Servicing Rights 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 unpaid principal balance (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. To the extent any portfolio contract is not expected to compensate us adequately for performing the servicing, we would recognize a servicing liability. 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 (MSR valuation adjustments, net) 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 (MSR valuation adjustments, net) in the period in which the changes occur. 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. Effective with this election, our entire portfolio of MSRs is accounted for using the fair value measurement method. We recorded a cumulative-effect adjustment of $82.0 million to retained earnings as of January 1, 2018 to reflect the excess of the fair value over the carrying amount. See Note 8 — Mortgage Servicing for additional information. 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. In addition to servicing and subservicing fees, we also report late fees, prepayment penalties, float earnings and other ancillary fees as revenue in Servicing and subservicing fees in our consolidated statements of operations. 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 (Servicing and origination expense) to the extent we believe that a portion of advances are uncollectible under the provisions of each servicing contract taking into consideration, among other factors, probability of cure or modification, length of delinquency and the amount of the advance. 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 continually assess collectibility using proprietary cash flow projection models that incorporate a number of different factors, depending on the characteristics of the mortgage loan or pool, including, for example, estimated time to a foreclosure sale, estimated costs of foreclosure action, estimated future property tax payments and the estimated value of the underlying property net of estimated carrying costs, commissions and closing costs. Loans Held for Sale Loans held for sale include 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. For loans we measure at the lower of cost or fair value, 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 Gain on loans held for sale, net in the statement of operations as incurred and are not capitalized. Premiums on loans purchased via the correspondent channel are capitalized upon origination because they represent part of the purchase price. However, the loans are subsequently measured at fair value on a recurring basis. 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 revenue, net 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 any 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 in Professional services expense in the consolidated statement of operations as 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 (as further clarified by FASB ASU 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 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 t |
Business Acquisitions
Business Acquisitions | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Business Acquisitions | Note 2 — Business Acquisition On October 4, 2018, we completed our acquisition of PHH, a non-bank servicer with established servicing and origination recapture capabilities. As a result of the acquisition, PHH became a wholly owned subsidiary of Ocwen. The acquisition has been accounted for under the acquisition method of accounting pursuant to ASC 805, Business Combinations . Assets acquired and liabilities assumed are recorded at their fair value as of the date of acquisition based on management’s estimates using currently available information. The results of PHH operations are included in Ocwen’s consolidated statements of operations from the date of acquisition. For U.S. income tax purposes, the acquisition of PHH is treated as a stock purchase. The aggregate consideration paid to the former holders of PHH common stock was $358.4 million in cash and was funded by a combination of PHH cash on hand of $325.0 million and Ocwen cash on hand of $33.4 million . At the closing, there were 32,581,485 shares of PHH common stock, par value $0.01 , outstanding, all of which were converted into the right to receive $11.00 in cash per share. In connection with the acquisition, all outstanding options to purchase PHH common stock and all PHH equity awards with performance-based vesting conditions were cancelled without any consideration or cash payment. All other PHH equity awards were cancelled in exchange for a cash payment equal to $11.00 per share underlying the award. We have recognized a bargain purchase gain, net of tax, of $64.0 million in connection with the acquisition. The bargain purchase gain results from the fair value of PHH’s net assets exceeding the purchase price we paid. The purchase price we negotiated contemplated that PHH would incur losses after the acquisition date. To the extent those losses are realized, they will be included in our consolidated statements of operations. Costs incurred in connection with the transaction are expensed as incurred and are reported in Professional services in the consolidated statements of operations. Such costs were $13.7 million during 2018. Purchase Price Allocation The purchase price allocation provided in the table below reflects the fair value of assets acquired and liabilities assumed in the acquisition of PHH, with the excess of total identifiable net assets over total consideration paid recorded as a bargain purchase gain. Independent valuation specialists conducted analyses to assist management in determining the fair value of certain acquired assets and assumed liabilities. Management is responsible for these third-party valuations and appraisals. The methodologies that we use and key assumptions that we made to estimate the fair value of the acquired assets and assumed debt are described in Note 4 — Fair Value . Purchase Price Allocation October 4, 2018 Cash $ 423,088 Restricted cash 38,813 Mortgage servicing rights 518,127 Advances, net 96,163 Loans held for sale 42,324 Receivables, net 46,838 Premises and equipment, net 15,203 Real estate owned 3,289 Other assets 6,293 Assets related to discontinued operations 2,017 Financing liabilities (MSRs pledged, at fair value) (481,020 ) Other secured borrowings, net (27,594 ) Senior notes, net (Senior unsecured notes) (120,624 ) Accrued legal fees and settlements (9,960 ) Other accrued expenses (36,889 ) Loan repurchase and indemnification liability (27,736 ) Unfunded pension liability (9,815 ) Other liabilities (34,131 ) Liabilities related to discontinued operations (21,954 ) Total identifiable net assets 422,432 Total consideration paid to seller (358,396 ) Bargain purchase gain $ 64,036 In a business combination, the initial allocation of the purchase price is considered preliminary and therefore subject to change until the end of the measurement period (not to exceed one year from the acquisition date). Because the measurement period is still open, certain fair value estimates may change once all information necessary to make a final fair value assessment has been received. Post-Acquisition Results of Operations The following table presents the results of operations of PHH that are included in our consolidated statements of operations from the acquisition date of October 4, 2018 through December 31, 2018: Revenues $ 72,487 Expenses 84,877 Other income (expense) (19,132 ) Income tax benefit (6,711 ) Net loss from continuing operations $ (24,811 ) Pro Forma Results of Operations (Unaudited) The following table presents supplemental pro forma information for Ocwen as if the PHH Acquisition occurred on January 1, 2017. Pro forma adjustments include: • Fair value adjustments of $24.4 million and $(16.9) million in 2018 and 2017, respectively, to conform the accounting for MSRs to the valuation policies of Ocwen related to acquired MSRs; • Adjust interest expense for a total net impact of $30.6 million and $(73.8) million in 2018 and 2017, respectively. The pro forma adjustments primarily pertain to fair value adjustments of $31.4 million and $(79.3) million in 2018 and 2017, respectively, related to the assumed MSR secured liability using valuation assumptions consistent with Ocwen's methodology; • Report the bargain purchase gain of $64.0 million as if the acquisition had occurred in 2017 rather than 2018; • Report Ocwen and PHH acquisition-related charges of $18.5 million for professional services as if they had been incurred in 2017 rather than 2018; • Adjust depreciation expense to amortize internally developed software acquired from PHH on a straight-line basis for the years presented based on a useful life of three years; • Adjust revenue for a total net impact of $120.6 million and $134.6 million in 2018 and 2017, respectively, which primarily include adjusting servicing and subservicing fees for $127.7 million and $97.0 million in 2018 and 2017, respectively, to gross up activity related to PHH MSRs sold accounted for as secured borrowings consistent with Ocwen’s presentation. The offset to these adjustments are interest income and interest expense, with no net effect on earnings. • Income tax benefit of $0.3 million and $0.2 million in 2018 and 2017, respectively, to record lower 2018 current federal tax under the new base erosion and anti-abuse tax (BEAT) provision of the Tax Act assuming Ocwen and PHH would file a consolidated federal tax return beginning January 1, 2017 and the benefit of the additional acquisition-related charges as if they had been incurred in 2017. 2018 2017 (Unaudited) (Unaudited) Revenues $ 1,305,972 $ 1,785,408 Loss from continuing operations, net of tax attributable to Ocwen common stockholders $ (201,382 ) $ (356,824 ) The pro forma consolidated results presented above are not indicative of what Ocwen’s consolidated results would have been had we completed the acquisition on the date indicated due to a number of factors, including but not limited to expected reductions in servicing, origination and overhead costs through the realization of targeted cost synergies and improved economies of scale, the impact of incremental costs to integrate the two companies and differences in servicing practices and cost structures between Ocwen and PHH. In addition, the pro forma consolidated results do not purport to project combined future operating results of Ocwen and PHH nor do they reflect the expected realization of any cost savings associated with the acquisition of PHH. Discontinued Operations In November 2016, PHH announced its plan to exit the private label solutions (PLS) business, and in February 2017, PHH announced its intention to operate as a smaller business that is focused solely on subservicing and portfolio retention services, and exit the Real Estate channel. As a result, PHH would exit the PLS business through the run-off of operations, and exit the Real Estate channel through the sale of certain assets of PHH Home Loans, LLC (PHH Home Loans) and its subsidiaries and subsequent run-off of the operations. Those exit activities were substantially complete prior to our acquisition of PHH, and as such, the results of PLS and Real Estate have been presented as discontinued operations in the consolidated statement of operations and consolidated statement of comprehensive income (loss), and are excluded from continuing operations and segment results for the post-acquisition period. Results of Operations The results of discontinued operations for the post-acquisition period (October 4, 2018, through December 31, 2018) are summarized below: Net revenues $ 413 Total expenses (1) (996 ) Income before income taxes 1,409 Income tax expense (benefit) — Income from discontinued operations $ 1,409 (1) Total expenses are shown net of a severance expense reversal that occurred as a result of voluntary post-acquisition employee departures and amortization of facility exit costs. There was no gain or loss directly attributed to the completion of the disposal of these businesses. Assets and Liabilities The carrying amounts of major classes of assets and liabilities related to discontinued operations consisted of the following at December 31, 2018: Assets Mortgage loans held for sale $ 650 Accounts receivable, net 144 Total assets related to discontinued operations $ 794 Liabilities Other liabilities (1) 18,265 Total liabilities related to discontinued operations $ 18,265 (1) The primary component of Other liabilities is an exit cost liability which includes $14.9 million of facility exit costs related to vacating certain facilities. Cash Flows The cash flows related to discontinued operations have not been segregated and are included in the consolidated statement of cash flows for the post-acquisition period. There were no significant adjustments necessary to reconcile Net loss to net cash provided by operating activities that relate to discontinued operations. |
Securitizations and Variable In
Securitizations and Variable Interests Entities | 12 Months Ended |
Dec. 31, 2018 | |
Transfers and Servicing [Abstract] | |
Securitizations and Variable Interest Entities | Note 3 — 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 asset financing facilities are variable interest entities (VIEs) for which we are the primary beneficiary. From time to time, we may acquire beneficial interests issued in connection with mortgage-backed securitizations where we may also be the master and/or primary servicer. These beneficial interests consist of subordinate and residual interests acquired from third-parties in market transactions. We consolidate the VIE when we conclude we are the primary beneficiary. Securitizations of Residential Mortgage 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, 2018 2017 2016 Proceeds received from securitizations $ 1,290,682 $ 3,256,625 $ 5,197,071 Servicing fees collected 45,046 41,509 14,616 Purchases of previously transferred assets, net of claims reimbursed (4,395 ) (5,948 ) (1,271 ) $ 1,331,333 $ 3,292,186 $ 5,210,416 In connection with these transfers, we retained MSRs of $8.3 million , $20.7 million and $37.2 million during 2018 , 2017 and 2016 , respectively. We securitize forward and reverse residential mortgage loans involving the GSEs and loans insured by the FHA or VA through Ginnie Mae. 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, 2018 2017 Carrying value of assets MSRs ($132,774 and $227 carried at fair value) $ 132,774 $ 98,059 Advances and match funded advances 138,679 57,636 UPB of loans transferred 15,600,971 12,077,635 Maximum exposure to loss $ 15,872,424 $ 12,233,330 At December 31, 2018 and 2017 , 8.3% and 8.9% , respectively, of the transferred residential loans that we service were 60 days or more past due. 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 risk, cash flow timing risk and incidental credit risk. As a result, the transfers of the HECM loans do not qualify for sale accounting, and therefore, we account for these transfers as financings. Under this accounting treatment, the HECM loans are classified as Loans held for investment, 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, 2018 and 2017 , Loans held for investment included $68.4 million and $83.8 million , respectively, of originated loans which had not yet been pledged as collateral. See Note 4 — Fair Value and Note 13 — Borrowings for additional information. 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, Restricted cash (debt service accounts), Match funded liabilities and amounts due to affiliates. Amounts due to affiliates are eliminated in consolidation in our consolidated balance sheets. Mortgage-Backed Securitizations The table below presents the carrying value and classification of the assets and liabilities of two consolidated mortgage-backed securitization trusts included in our consolidated balance sheet at December 31, 2018 as a result of residual securities issued by the trust that we acquired during the third quarter of 2018. Loans held for investment, at fair value - Restricted for securitization investors $ 26,520 Financing liability - Owed to securitization investors, at fair value 24,815 We have concluded we are the primary beneficiary of certain residential mortgage-backed securitizations as a result of beneficial interests consisting of residual securities, which expose us to the expected losses and residual returns of the trust, and our role as master servicer, where we have the ability to direct the activities that most significantly impact the performance of the trust. Upon consolidation of the securitization trusts, we elected to apply the measurement alternative to ASC Topic 820, Fair Value Measurement for collateralized financing entities. The measurement alternative requires a reporting entity to use the more observable of the fair value of the financial assets or the financial liabilities to measure both the financial assets and the financial liabilities of the entity. We determined that the fair value of the loans held by the trusts is more observable than the fair value of the debt certificates issued by the trusts. Through the application of the measurement alternative, the fair value of the financial liabilities of the trusts are measured as the difference between the fair value of the financial assets and the fair value of our investment in the residual securities of the trusts. Holders of the debt issued by these entities have recourse only to the assets of the SPE for satisfaction of the debt and have no recourse against the assets of Ocwen. Similarly, the general creditors of Ocwen have no claim on the assets of the trusts. Our exposure to loss as a result of our continuing involvement is limited to the carrying values of our investments in the residual securities of the trusts, our MSRs and related advances. At December 31, 2018 , MSRs were $0.2 million and our $1.7 million investment in the residual securities of the trusts was eliminated in consolidation. Advances outstanding at December 31, 2018 were $1.2 million . Financings of Automotive Dealer Financing Notes Match funded automotive dealer financing notes resulted from our transfers of short-term, inventory-secured loans to car dealers to an SPE in exchange for cash. We consolidated this SPE because we determined that Ocwen is the primary beneficiary of the SPE. The SPE issued debt supported by collections on the transferred loans. In January 2018, we exited the independent used car dealer floor plan lending business conducted through Automotive Capital Services, Inc. (ACS). We made transfers to the SPE in accordance with the terms of the automotive capital asset receivables financing facility agreements, which we terminated in January 2018 in connection with our decision to exit the business. We classified 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 used 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 had 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 were comprised solely of Match funded automotive dealer financing notes, Restricted cash (debt service accounts), Match funded liabilities and amounts due to affiliates. Amounts due to affiliates have been eliminated in consolidation in our consolidated balance sheets. |
Fair Value
Fair Value | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Note 4 — Fair Value Fair value is estimated based on a hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs. Observable inputs are inputs that reflect the assumptions that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The fair value hierarchy prioritizes the inputs to valuation techniques into three broad levels whereby the highest priority is given to Level 1 inputs and the lowest to Level 3 inputs. Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date. Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3: Unobservable inputs for the asset or liability. We classify assets in their entirety based on the lowest level of input that is significant to the fair value measurement. The carrying amounts and the estimated fair values of our financial instruments and certain of our nonfinancial assets measured at fair value on a recurring or non-recurring basis or disclosed, but not carried, at fair value are as follows: December 31, 2018 2017 Level Carrying Value Fair Value Carrying Value Fair Value Financial assets: Loans held for sale: Loans held for sale, at fair value (a) 2 $ 176,525 $ 176,525 $ 214,262 $ 214,262 Loans held for sale, at lower of cost or fair value (b) 3 66,097 66,097 24,096 24,096 Total Loans held for sale $ 242,622 $ 242,622 $ 238,358 $ 238,358 Loans held for investment, at fair value Loans held for investment - Reverse mortgages (a) 3 $ 5,472,199 $ 5,472,199 $ 4,715,831 $ 4,715,831 Loans held for investment - Restricted for securitization investors (a) 3 26,520 26,520 — — Total loans held for investment 5,498,719 5,498,719 4,715,831 4,715,831 Advances (including match funded) (c) 3 1,186,676 1,186,676 1,356,393 1,356,393 Automotive dealer financing notes (including match funded) (c) 3 — — 32,757 32,590 Receivables, net (c) 3 198,262 198,262 199,529 199,529 Mortgage-backed securities, at fair value (a) 3 1,502 1,502 1,592 1,592 U.S. Treasury notes (a) 1 1,064 1,064 1,567 1,567 Corporate bonds (a) 2 450 450 313 313 Financial liabilities: Match funded liabilities (c) 3 $ 778,284 $ 776,485 $ 998,618 $ 992,698 Financing liabilities: HMBS-related borrowings, at fair value (a) 3 $ 5,380,448 $ 5,380,448 $ 4,601,556 $ 4,601,556 Financing liability - MSRs pledged, at fair value (a) 3 1,032,856 1,032,856 508,291 508,291 Financing liability - Owed to securitization investors, at fair value (a) 3 24,815 24,815 — — Other (c) 3 69,942 53,570 85,227 65,202 Total Financing liabilities $ 6,508,061 $ 6,491,689 $ 5,195,074 $ 5,175,049 Other secured borrowings: Senior secured term loan (c) (d) 2 $ 226,825 $ 227,449 $ 290,068 $ 299,741 Other (c) 3 155,713 155,713 255,782 255,782 Total Other secured borrowings $ 382,538 $ 383,162 $ 545,850 $ 555,523 December 31, 2018 2017 Senior notes: Senior unsecured notes (c) (d) 2 $ 119,924 $ 119,258 $ 3,122 $ 2,872 Senior secured notes (c) (d) 2 328,803 306,889 344,216 355,550 Total Senior notes $ 448,727 $ 426,147 $ 347,338 $ 358,422 Derivative financial instrument assets (liabilities), at fair value (a): Interest rate lock commitments 2 $ 3,871 $ 3,871 $ 3,283 $ 3,283 Forward mortgage-backed securities 1 (4,983 ) (4,983 ) (545 ) (545 ) Interest rate caps 3 678 678 2,056 2,056 Mortgage servicing rights: Mortgage servicing rights, at fair value (a) 3 $ 1,457,149 $ 1,457,149 $ 671,962 $ 671,962 Mortgage servicing rights, at amortized cost (e) 3 — — 336,882 418,745 Total Mortgage servicing rights $ 1,457,149 $ 1,457,149 $ 1,008,844 $ 1,090,707 (a) Measured at fair value on a recurring basis. (b) Measured at fair value on a non-recurring basis. (c) Disclosed, but not measured, at fair value. (d) The carrying values are net of unamortized debt issuance costs and discount. See Note 13 — Borrowings for additional information . (e) 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. The balance at December 31, 2017 includes the impaired government-insured stratum of amortization method MSRs, which was measured at fair value on a non-recurring basis and reported net of the valuation allowance. At December 31, 2017 , the carrying value of this stratum was $158.0 million before applying the valuation allowance of $24.8 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 Loans Held for Inv. - Restricted for Securitiza- Financing Liability - Owed to Securitiza - Mortgage-Backed Securities Financing Liability - MSRs Pledged Derivatives MSRs Year Ended December 31, 2018 Beginning balance $ 4,715,831 $ (4,601,556 ) $ — $ — $ 1,592 $ (508,291 ) $ 2,056 $ 671,962 Purchases, issuances, sales and settlements Purchases — — — — — (667 ) 95 13,712 Recognized (assumed) in connection with the acquisition of PHH — — — — — (481,020 ) — 518,127 Issuances (1) 920,476 (948,917 ) — — — (279,586 ) — — Consolidation of mortgage-backed securitization trusts — — 28,373 (26,643 ) — — — — Sales — — — — — — — (6,240 ) Settlements (400,521 ) 391,985 (1,853 ) 1,828 — 211,766 (371 ) (5,880 ) Loans Held for Investment - Reverse Mortgages HMBS-Related Borrowings Loans Held for Inv. - Restricted for Securitiza- Financing Liability - Owed to Securitiza - Mortgage-Backed Securities Financing Liability - MSRs Pledged Derivatives MSRs Year Ended December 31, 2018 Transfers (to) from: MSRs carried at amortized cost, net of valuation allowance — — — — — — — 418,925 Loans held for sale, at fair value (1,039 ) — — — — — — — Receivables, net (158 ) — — — — — — — Other assets (411 ) — — — — — — — 518,347 (556,932 ) 26,520 (24,815 ) — (549,507 ) (276 ) 938,644 Total realized and unrealized gains (losses) (2) Included in earnings (1): Change in fair value 238,021 (221,960 ) — — (90 ) 19,269 (1,102 ) (153,457 ) Calls and other — — — — — 5,673 — — Included in Other comprehensive income — — — — — — — — 238,021 (221,960 ) — — (90 ) 24,942 (1,102 ) (153,457 ) Transfers in and / or out of Level 3 — — — — — — — — Ending balance $ 5,472,199 $ (5,380,448 ) $ 26,520 $ (24,815 ) $ 1,502 $ (1,032,856 ) $ 678 $ 1,457,149 Loans Held for Investment - Reverse Mortgages HMBS-Related Borrowings Mortgage-Backed Securities Financing Liability - MSRs Pledged Derivatives MSRs Year Ended December 31, 2017 Beginning balance $ 3,565,716 $ (3,433,781 ) $ 8,342 $ (477,707 ) $ 1,836 $ 679,256 Purchases, issuances, sales and settlements Purchases — — — — 655 — Issuances 1,277,615 (1,281,543 ) — (54,601 ) — (2,214 ) Sales — — — — — (540 ) Settlements (444,388 ) 418,503 — 59,190 (445 ) — Transfers (to) from: Loans held for sale, at fair value (3,803 ) — — — — — Receivables, net (3,583 ) — — — — — Other assets (1,929 ) — — — — — 823,912 (863,040 ) — 4,589 210 (2,754 ) 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 ) Calls and other — — — 6,109 — — Included in Other comprehensive income — — — — — — 326,203 (304,735 ) (6,750 ) (35,173 ) 10 (4,540 ) Transfers in and / or out of Level 3 — — — — — — Ending balance $ 4,715,831 $ (4,601,556 ) $ 1,592 $ (508,291 ) $ 2,056 $ 671,962 Loans Held for Investment - Reverse Mortgages HMBS-Related Borrowings Mortgage-Backed Securities Financing Liability - MSRs Pledged Derivatives MSRs Year Ended December 31, 2016 Beginning balance $ 2,488,253 $ (2,391,362 ) $ 7,985 $ (541,704 ) $ 2,042 $ 761,190 Purchases, issuances, sales and settlements Purchases — — — — 1,337 — Issuances 1,107,046 (1,086,795 ) — — — (1,548 ) Sales — — — — — (148 ) Settlements (243,596 ) 230,045 — 63,997 (156 ) — 863,450 (856,750 ) — 63,997 1,181 (1,696 ) Total realized and unrealized gains (losses) Included in earnings Change in fair value 214,013 (185,669 ) 357 — (1,387 ) (80,238 ) Included in Other comprehensive income — — — — — — 214,013 (185,669 ) 357 — (1,387 ) (80,238 ) Transfers in and / or out of Level 3 — — — — — — Ending balance $ 3,565,716 $ (3,433,781 ) $ 8,342 $ (477,707 ) $ 1,836 $ 679,256 (1) On January 18, 2018, Ocwen received a lump-sum payment of $279.6 million in accordance with terms of the agreements with NRZ. A $16.6 million reduction in the fair value of the Financing Liability - MSRs Pledged was recognized in connection with the receipt of the lump-sum payment. See Note 9 — Rights to MSRs . (2) 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 . A reduction in the fair value of the Financing Liability - MSRs Pledged of $37.6 million was recognized at the time of the initial transfer of the MSRs. See Note 9 — Rights to MSRs . (3) Total gains (losses) attributable to derivative financial instruments still held at December 31, 2018 and 2017 and 2016 were $(1.1) million, $0.1 million and $0.3 million for 2018 , 2017 and 2016 , respectively. Total losses for 2018 , 2017 and 2016 attributable to MSRs still held at December 31, 2018 , 2017 and 2016 were $153.5 million , $4.5 million and $78.3 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 Loans Held for Investment - Reverse Mortgages 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 2018 2017 Life in years Range 3.0 to 7.6 4.4 to 8.1 Weighted average 5.9 6.4 Conditional repayment rate Range 6.8% to 38.4% 5.4% to 51.9% Weighted average 14.7 % 13.1 % Discount rate 3.4 % 3.2 % 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. Loans Held for Investment – Restricted for securitization investors We have elected to measure loans held by consolidated mortgage-backed securitization trusts at fair value. The loans are secured by first liens on single family residential properties. Fair value is based on proprietary cash flow modeling processes for a third-party broker/dealer and a third-party valuation expert. Significant assumptions used in the valuation include projected monthly payments, projected prepayments and defaults, property liquidation values and discount rates. 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 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 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 2018 2017 Agency Non-Agency Agency Non-Agency Weighted average prepayment speed 8.5 % 15.4 % 8.1 % 16.6 % Weighted average delinquency rate 6.6 % 27.1 % 1.0 % 28.5 % Advance financing cost 5-year swap 5-yr swap plus 2.75% 5-year swap 5-yr swap plus 2.75% Interest rate for computing float earnings 5-year swap 5-yr swap minus 0.50% 5-year swap 5-yr swap minus 0.50% Weighted average discount rate 9.1 % 12.8 % 9.0 % 13.0 % Weighted average cost to service (in dollars) $ 90 $ 297 $ 64 $ 305 (1) Valuation assumptions for Agency MSRs at December 31, 2018 include assumptions for MSRs we carried at amortized cost at December 31, 2017. Effective January 1, 2018, we elected fair value accounting for our remaining MSRs that we had previously carried at amortized cost. Amortized Cost MSRs Prior to our fair value election on January 1, 2018 for our remaining portfolio of MSRs carried at amortized cost, we estimated the fair value using a process that involved 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 disclosed actual Ocwen sale prices for orderly transactions where available in lieu of third-party valuations. Significant valuation assumptions December 31, 2017 Weighted average prepayment speed 8.8 % Weighted average delinquency rate 10.9 % Advance financing cost 5-year swap Interest rate for computing float earnings 5-year swap Weighted average discount rate 9.2 % Weighted average cost to service (in dollars) $ 108 We performed an impairment analysis based on the difference between the carrying amount and fair value after grouping the underlying loans into the applicable strata, which we defined as conventional and government-insured. 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. Significant valuation assumptions December 31, 2017 Weighted average life in months 2.2 Average note rate 8.5 % Discount rate 10.0 % Loan loss rate 21.5 % 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 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 projected recovery of principal, interest and advances 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 2018 2017 Life in years Range 3.0 to 7.6 4.4 to 8.1 Weighted average 5.9 6.4 Conditional repayment rate Range 6.8% to 38.4% 5.4% to 51.9% Weighted average 14.7 % 13.1 % Discount rate 3.3 % 3.11 % 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. Because we carry all MSRs at fair value, changes in the Financing Liability - MSRs Pledged value are partially offset by changes in the fair value of the related MSRs. See Note 9 — Rights to MSRs for additional information. December 31, Significant valuation assumptions 2018 2017 Weighted average prepayment speed 13.9 % 17.0 % Weighted average delinquency rate 20.3 % 28.9 % Advance financing cost 5-year swap plus 0% to 2.75% 5-year swap plus 2.75% Interest rate for computing float earnings 5-year swap minus 0% to 0.50% 5-year swap minus 0.50% Weighted average discount rate 12.0 % 13.7 % Weighted average cost to service (in dollars) $ 234 $ 311 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. Financing Liability – Owed to Securitization Investors Consists of securitization debt certificates due to third parties that represent beneficial ownership interests in mortgage-backed securitization trusts that we include in our consolidated financial statements. We determine fair value using the measurement alternative to ASC Topic 820, Fair Value Measurement as disclosed in Note 3 — Securitizations and Variable Interest Entities . In accordance with the measurement alternative, the fair value of the consolidated securitization debt certificates is measured as the fair value of the loans held by the trust less the fair value of the beneficial interests held by us in the form of residual securities. 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 one-month or three-month Eurodollar rate (1ML or 3ML, respectively) 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, 2018 | |
Receivables [Abstract] | |
Loans Held for Sale | Note 5 — Loans Held for Sale Loans Held for Sale - Fair Value Years Ended December 31, 2018 2017 2016 Beginning balance $ 214,262 $ 284,632 $ 309,054 Originations and purchases 944,627 2,678,372 4,211,871 Proceeds from sales (1,019,211 ) (2,785,422 ) (4,236,158 ) Principal collections (20,774 ) (4,867 ) (11,620 ) Acquired in connection with the acquisition of PHH 42,324 — — Transfers from (to): Loans held for investment, at fair value 1,038 3,803 — Loans held for sale - Lower of cost or fair value — — 3,266 Receivables (1,132 ) — — Real estate owned (Other assets) (1,886 ) — — Gain on sale of loans 34,724 35,429 13,421 Increase (decrease) in fair value of loans (13,435 ) 151 (7,030 ) Other (4,012 ) 2,164 1,828 Ending balance (1) $ 176,525 $ 214,262 $ 284,632 (1) At December 31, 2018 , 2017 and 2016 , the balances include $(7.2) million , $5.0 million and $4.9 million , respectively, of fair value adjustments. Loans Held for Sale - Lower of Cost or Fair Value Years Ended December 31, 2018 2017 2016 Beginning balance $ 24,096 $ 29,374 $ 104,992 Purchases 770,563 1,016,791 1,878,561 Proceeds from sales (569,718 ) (861,569 ) (1,699,427 ) Principal collections (15,413 ) (10,207 ) (22,607 ) Transfers from (to): Receivables, net (155,586 ) (171,797 ) (256,336 ) Real estate owned (Other assets) (2,355 ) (875 ) (7,675 ) Loans held for sale - Fair value — — (3,266 ) Gain on sale of loans 3,659 11,683 24,565 (Increase) decrease in valuation allowance (4,251 ) 2,746 4,594 Other 15,102 7,950 5,973 Ending balance (1) $ 66,097 $ 24,096 $ 29,374 (1) At December 31, 2018 , 2017 and 2016 , the balances include $51.8 million , $19.6 million and $24.8 million , respectively, of loans that we repurchased from Ginnie Mae guaranteed securitizations pursuant to Ginnie Mae servicing guidelines. We may repurchase loans that have been modified, to facilitate loss reduction strategies, or as otherwise obligated as a Ginnie Mae servicer. Repurchased loans may be modified or otherwise remediated through loss mitigation activities, may be sold to a third party, or are reclassified to receivables. Valuation Allowance - Loans Held for Sale at Lower of Cost or Fair Value Years Ended December 31, 2018 2017 2016 Beginning balance $ 7,318 $ 10,064 $ 14,658 Provision 4,033 3,109 3,599 Transfer from Liability for indemnification obligations (Other liabilities) 2,021 3,246 2,368 Sales of loans (1,824 ) (9,415 ) (10,208 ) Other 21 314 (353 ) Ending balance $ 11,569 $ 7,318 $ 10,064 Years Ended December 31, Gains on Loans Held for Sale, Net 2018 2017 2016 Gain on sales of loans, net MSRs retained on transfers of forward loans $ 7,412 $ 20,900 $ 36,049 Fair value gains related to transfers of reverse mortgage loans, net 45,020 50,194 24,742 Gain on sale of repurchased Ginnie Mae loans 3,659 11,683 24,565 Other, net 29,603 31,470 7,952 85,694 114,247 93,308 Change in fair value of IRLCs 3,809 (3,089 ) (55 ) Change in fair value of loans held for sale (11,569 ) 1,475 4,595 Loss on economic hedge instruments 136 (8,529 ) (6,592 ) Other (327 ) (702 ) (865 ) $ 77,743 $ 103,402 $ 90,391 |
Advances
Advances | 12 Months Ended |
Dec. 31, 2018 | |
Advances [Abstract] | |
Advances | Note 6 — Advances December 31, 2018 2017 Principal and interest $ 43,671 $ 20,207 Taxes and insurance 160,373 144,454 Foreclosures, bankruptcy and other 68,597 63,597 272,641 228,258 Allowance for losses (23,259 ) (16,465 ) $ 249,382 $ 211,793 The following table summarizes the activity in net advances: Years Ended December 31, 2018 2017 2016 Beginning balance $ 211,793 $ 257,882 $ 444,298 Acquired in connection with the acquisition of PHH 96,163 — — Transfers to match funded advances (71,623 ) — — Sales (1) (32,081 ) (444 ) (24,631 ) Collections, charge-offs and other, net 51,924 (67,132 ) (165,734 ) Net (increase) decrease in allowance for losses (6,794 ) 21,487 3,949 Ending balance $ 249,382 $ 211,793 $ 257,882 (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. Allowance for Losses Years Ended December 31, 2018 2017 2016 Beginning balance $ 16,465 $ 37,952 $ 41,901 Provision 5,732 21,429 (2,043 ) Net charge-offs and other 1,062 (42,916 ) (1,906 ) Ending balance $ 23,259 $ 16,465 $ 37,952 |
Match Funded Assets
Match Funded Assets | 12 Months Ended |
Dec. 31, 2018 | |
Transfers and Servicing [Abstract] | |
Match Funded Assets | Note 7 — Match Funded Assets December 31, 2018 2017 Advances: Principal and interest $ 412,897 $ 523,248 Taxes and insurance 374,853 439,857 Foreclosures, bankruptcy, real estate and other 149,544 181,495 937,294 1,144,600 Automotive dealer financing notes (1) — 35,392 Allowance for losses (1) — (2,635 ) — 32,757 $ 937,294 $ 1,177,357 (1) In January 2018, we terminated our automotive dealer loan financing facility. Automotive dealer financing notes not pledged to our automotive dealer loan financing facility are reported as Other assets. See Note 12 — Other Assets . The following table summarizes the activity in match funded assets: Years Ended December 31, 2018 2017 2016 Advances Automotive Dealer Financing Notes Advances Automotive Dealer Financing Notes Advances Beginning balance $ 1,144,600 $ 32,757 $ 1,451,964 $ — $ 1,706,768 Transfers from advances 71,623 — — — — Transfer (to) from other assets — (36,896 ) — 25,180 — Sales — — (691 ) — (8,923 ) New advances (collections), net (278,929 ) 1,504 (306,673 ) 10,212 (245,881 ) Decrease (increase) in allowance for losses — 2,635 — (2,635 ) — Ending balance $ 937,294 $ — $ 1,144,600 $ 32,757 $ 1,451,964 |
Mortgage Servicing
Mortgage Servicing | 12 Months Ended |
Dec. 31, 2018 | |
Transfers and Servicing [Abstract] | |
Mortgage Servicing | Note 8 — Mortgage Servicing Mortgage Servicing Rights – Amortization Method Years Ended December 31, 2018 2017 2016 Beginning balance $ 336,882 $ 363,722 $ 377,379 Fair value election - transfer to MSRs carried at fair value (1) (361,670 ) — — Additions recognized in connection with asset acquisitions — 1,658 17,356 Additions recognized on the sale of mortgage loans — 20,738 37,230 Sales — (1,066 ) (24,452 ) Servicing transfers and adjustments — 252 — (24,788 ) 385,304 407,513 Decrease (increase) in impairment valuation allowance (1) (2) 24,788 3,366 (10,813 ) Amortization (1) — (51,788 ) (32,978 ) Ending balance $ — $ 336,882 $ 363,722 Estimated fair value at end of year $ — $ 418,745 $ 467,911 (1) 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 to retained earnings as of January 1, 2018 to reflect the excess of the fair value of the Agency MSRs over their carrying amount. We also recognized the tax effect of this adjustment through an increase in retained earnings of $6.8 million and a deferred tax asset for the same amount. However, we established a full valuation allowance on the resulting deferred tax asset through a reduction in retained earnings. The government-insured MSRs were impaired by $24.8 million at December 31, 2017; therefore, these MSRs were already effectively carried at fair value. (2) Impairment of MSRs is recognized in MSR valuation adjustments, net in the consolidated statements of operations for 2017 and 2016. Impairment valuation allowance balance of $24.8 million was reclassified to reduce the carrying value of the related MSRs on January 1, 2018 in connection with our fair value election. See Note 4 — Fair Value for additional information regarding impairment and the valuation allowance. Mortgage Servicing Rights – Fair Value Measurement Method Years Ended December 31, 2018 2017 2016 Agency Non-Agency Total Agency Non-Agency Total Agency Non-Agency Total Beginning balance $ 11,960 $ 660,002 $ 671,962 $ 13,357 $ 665,899 $ 679,256 $ 15,071 $ 746,119 $ 761,190 Fair value election - transfer from MSRs carried at amortized cost 336,882 — 336,882 — — — — — — Cumulative effect of fair value election 82,043 — 82,043 — — — — — — Sales (4,748 ) (1,492 ) (6,240 ) — (540 ) (540 ) (3 ) (145 ) (148 ) Additions: Recognized on the sale of residential mortgage loans 8,279 — 8,279 162 — 162 — — — Recognized in connection with the acquisition of PHH 494,348 23,779 518,127 — — — — — — Purchase of MSRs 5,433 — 5,433 — — — — — — Servicing transfers and adjustments (1,047 ) (4,833 ) (5,880 ) — (2,376 ) (2,376 ) — (1,548 ) (1,548 ) Changes in fair value (1): Changes in valuation inputs or other assumptions 11,558 (5,705 ) 5,853 243 86,721 86,964 305 — 305 Realization of expected future cash flows and other changes (79,121 ) (80,189 ) (159,310 ) (1,802 ) (89,702 ) (91,504 ) (2,016 ) (78,527 ) (80,543 ) Ending balance $ 865,587 $ 591,562 $ 1,457,149 $ 11,960 $ 660,002 $ 671,962 $ 13,357 $ 665,899 $ 679,256 (1) Changes in fair value are recognized in MSR valuation adjustments, net 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, 2018 given hypothetical shifts in lifetime prepayments and yield assumptions: Adverse change in fair value 10% 20% Weighted average prepayment speeds $ (122,911 ) $ (237,916 ) Discount rate (option-adjusted spread) (43,410 ) (84,631 ) The sensitivity analysis measures the potential impact on fair values based on hypothetical changes, which in the case of our portfolio at December 31, 2018 are increased prepayment speeds and a decrease in the yield assumption. Portfolio of Assets Serviced The following table presents the composition of our residential primary servicing and subservicing portfolios as measured by UPB, including foreclosed real estate and small-balance commercial loans. 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. UPB at December 31, 2018 Servicing (3) $ 72,378,693 Subservicing (3) 53,104,560 NRZ (1) (3) 130,517,237 $ 256,000,490 UPB at December 31, 2017 Servicing $ 75,469,327 Subservicing 2,063,669 NRZ (1) 101,819,557 $ 179,352,553 UPB at December 31, 2016 Servicing $ 86,049,298 Subservicing (2) 4,330,084 NRZ (1) 118,712,748 $ 209,092,130 (1) UPB of loans for which the Rights to MSRs have been sold to NRZ, including those for which third-party consents have been received and the MSRs have been transferred to NRZ. (2) Excludes $92.9 million of large-balance commercial foreclosed real estate. During 2017, we sold or transferred servicing on the remaining managed assets. (3) Includes $6.3 billion , $51.3 billion and $42.3 billion UPB of loans serviced, subserviced or subserviced on behalf of NRZ, respectively, added to the portfolio in connection with the PHH acquisition. We sold MSRs relating to loans with a UPB of $901.3 million , $219.4 million and $3.7 billion during 2018 , 2017 and 2016 , 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 in 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. At December 31, 2018 , the S&P Global Ratings, Inc.’s (S&P) and Fitch Ratings, Inc.’s (Fitch) servicer ratings outlook for both OLS and PHH is stable. Moody’s Investors Service, Inc.’s (Moody’s) servicer ratings for OLS are on Watch for Downgrade. Downgrades in servicer ratings could adversely affect our ability to sell or finance servicing advances and could impair our ability to consummate future servicing transactions or adversely affect our dealings with lenders, other contractual counterparties, and regulators, including our ability to 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, 2018 , non-Agency servicing agreements with a UPB of $25.9 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 $8.2 billion , or 7% of our total non-Agency servicing portfolio. To date, terminations as servicer as a result of a breach of any of these provisions have been minimal. The geographic distribution of the UPB and count of residential loans and real estate we serviced at December 31, 2018 was as follows: Amount Count California $ 56,455,157 201,058 New York 25,411,051 101,444 Florida 20,345,407 134,335 New Jersey 13,711,894 65,263 Texas 11,858,287 111,512 Other 128,218,694 948,626 $ 256,000,490 1,562,238 Years Ended December 31, Servicing Revenue 2018 2017 2016 Loan servicing and subservicing fees Servicing $ 224,892 $ 257,419 $ 293,210 Subservicing 8,904 7,775 21,427 NRZ 539,039 549,411 633,545 772,835 814,605 948,182 Late charges 61,453 61,763 66,709 Home Affordable Modification Program (HAMP) fees (1) 14,312 43,310 110,367 Custodial accounts (float earnings) 40,115 25,237 8,969 Loan collection fees 18,392 22,770 27,213 Other 27,229 21,691 25,180 $ 934,336 $ 989,376 $ 1,186,620 (1) The HAMP 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. We continue to earn HAMP success fees for HAMP modifications that remain less than 90 days delinquent at the first-, second- and third-year anniversary of the start of the trial 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 $1.7 billion , $1.5 billion and $2.1 billion at December 31, 2018 , 2017 and 2016 , 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, which we reported in Other, net, in the consolidated statements of operations. Simultaneously with the execution of the clean-up calls, we sold the acquired commercial loans and foreclosed properties to a third party, repaid the holders of the debt securities issued by the trusts and recognized a gain of $2.8 million equal to the discount on the repurchase price of the loans 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, 2018 | |
Transfers and Servicing [Abstract] | |
Rights To MSRs | Note 9 — Rights to MSRs Ocwen and PHH have entered into agreements to sell MSRs or Rights to MSRs and the related servicing advances to NRZ, and in all cases have been retained by NRZ as subservicer. In the case of Ocwen Rights to MSRs transactions, while the majority of the risks and rewards of ownership were transferred, legal title was retained by Ocwen, causing the Rights to MSRs transactions to be accounted for as secured financings. In the case of the PHH transactions, and for those Ocwen MSRs where consents were subsequently received and legal title was transferred to NRZ, due to the length of the non-cancellable term of the subservicing agreement, the transactions do not qualify as a sale and are accounted for as secured financings. As a result, 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. NRZ is our largest servicing client, accounting for 51% of the UPB of residential assets serviced and 70% of our loan servicing and subservicing fee revenue as of and for the year ended December 31, 2018, respectively. The following table presents the assets and liabilities recorded on our consolidated balance sheets as well as the impacts to our consolidated statements of operations in connection with our NRZ agreements. Years Ended December 31, 2018 2017 2016 Balance Sheets MSRs, at fair value $ 894,002 $ 499,042 $ 477,707 Due from NRZ 25,196 14,924 21,873 Due to NRZ (1) 53,001 98,493 83,248 Financing liability - MSRs pledged, at fair value 1,032,856 508,291 477,707 Statements of Operations Servicing fees collected on behalf of NRZ $ 539,039 $ 549,411 $ 633,545 Less: Subservicing fee retained 142,334 295,192 337,727 Net servicing fees remitted to NRZ 396,705 254,219 295,818 Less: Reduction (increase) in financing liability Changes in fair value: Original Rights to MSRs Agreements 171 (83,300 ) (2,580 ) 2017 Agreements and New RMSR Agreements 14,369 42,018 — PHH MSR Agreements 4,729 — — 19,269 (41,282 ) (2,580 ) Runoff, settlement and other: Original Rights to MSRs Agreements 50,620 57,264 63,997 2017 Agreements and New RMSR Agreements 136,700 1,926 — PHH MSR Agreements 18,446 — — 205,766 59,190 63,997 Interest expense $ 171,670 $ 236,311 $ 234,401 (1) Amounts collected on behalf of NRZ for advances and servicing fees. Ocwen Transactions Prior to the transfer of legal title under the Master Servicing Rights Purchase Agreement dated as of October 1, 2012, as amended, and certain Sale Supplements, as amended (collectively, the Original Rights to MSRs Agreements), Ocwen agreed to service the mortgage loans underlying the MSRs on the economic terms set forth in the Original Rights to MSRs Agreements. After the transfer of legal title as contemplated under the Original Rights to MSRs Agreements, Ocwen was to service the mortgage loans underlying the MSRs as subservicer on substantially the same economic terms. 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 the Original 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 from Ocwen to NRZ of Ocwen’s legal title to the remaining MSRs that were subject to the Original Rights to MSRs Agreements and under which Ocwen would subservice mortgage loans underlying the MSRs for an initial term of five years (the Initial Term). On January 18, 2018, the parties entered into new agreements (including a Servicing Addendum) regarding the Rights to MSRs related to MSRs that remained subject to the Original Rights to MSRs Agreements as of January 1, 2018 and amended the Transfer Agreement (collectively, New RMSR Agreements) to accelerate the implementation of certain parts of our arrangements in order to achieve the intent of the 2017 Agreements sooner. Upon receiving the required consents and transferring the MSRs, Ocwen will subservice the mortgage loans underlying the MSRs pursuant to the 2017 Agreements. Ocwen received lump-sum cash payments of $54.6 million and $279.6 million in 2017 and 2018 in accordance with the terms of the 2017 Agreements and New RMSR Agreements, respectively. These upfront payments generally represent the net present value of the difference between the future revenue stream Ocwen would have received under the Original Rights to MSRs Agreements and the future revenue stream Ocwen expects to receive under the 2017 Agreements and the New RMSR Agreements. On August 17, 2018, Ocwen and NRZ entered into certain amendments to the New RMSR Agreements to include New Penn Financial, LLC dba Shellpoint Mortgage Servicing (Shellpoint), a subsidiary of NRZ, as a party and to conform the New RMSR Agreements to certain of the terms of the Shellpoint Subservicing Agreement between Ocwen and Shellpoint. 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 certain 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. PHH Transactions On December 28, 2016, PHH entered into an agreement to sell substantially all of its MSRs, and the related servicing advances, to New Residential Mortgage LLC, a wholly-owned subsidiary of NRZ. In connection with this agreement, on December 28, 2016, PHH also entered into a subservicing agreement with NRZ (collectively, the PHH MSR Agreements). The PHH subservicing agreement has an initial term of three years, subject to certain transfer and termination provisions. Through its acquisition of PHH on October 4, 2018, Ocwen recognized MSRs of $42.3 billion UPB related to the PHH MSRs Agreements. As of December 31, 2018 , $3.5 billion UPB of private-investor MSRs and related advances remain committed to be sold to New Residential under the PHH MSRs Agreements. At any time during each of the second and third years of the initial term, and subject to the payment of the applicable deboarding fee, NRZ may terminate an amount not to exceed 25% of the underlying mortgage loans with proper notice. The PHH MSR Agreements automatically renew for successive one-year terms unless either party provides notice of termination. NRZ and PHH each have the ability to terminate the subservicing agreement for cause if certain specified conditions occur. |
Receivables
Receivables | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
Receivables | Note 10 — Receivables December 31, 2018 2017 Servicing-related receivables: Government-insured loan claims, net $ 105,258 $ 114,971 Due from NRZ 25,196 14,924 Amount due on sales of MSRs (1) 30,148 1,037 Reimbursable expenses 11,508 31,709 Due from custodial accounts 9,060 36,122 Other 7,012 10,922 188,182 209,685 Income taxes receivable 45,987 36,831 Other receivables 17,672 19,600 251,841 266,116 Allowance for losses (53,579 ) (66,587 ) $ 198,262 $ 199,529 (1) Balance represents the holdback of proceeds from MSR sales and transfers to address indemnification claims and mortgage loan document deficiencies. The balance at December 31, 2018 includes $29.5 million of receivables acquired in connection with the acquisition of PHH that relate to sales executed by PHH prior to the acquisition date. At December 31, 2018 and 2017 , 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) was $52.5 million and $53.3 million at December 2018 and 2017, respectively. This allowance represents management’s estimate of incurred losses and is maintained at a level that management considers adequate based upon continuing assessments of collectibility, current trends, and historical loss experience. Allowance for Losses - Government-Insured Loan Claims Years Ended December 31, 2018 2017 2016 Beginning balance $ 53,340 $ 53,258 $ 20,571 Provision 37,352 40,424 61,322 Charge-offs and other, net (38,195 ) (40,342 ) (28,635 ) Ending balance $ 52,497 $ 53,340 $ 53,258 |
Premises and Equipment
Premises and Equipment | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Premises and Equipment | Note 11 — Premises and Equipment December 31, 2018 2017 Computer software $ 46,029 $ 43,137 Computer hardware 34,240 29,848 Leasehold improvements 27,798 23,425 Buildings 9,689 9,689 Office equipment 7,370 8,071 Furniture and fixtures 4,674 4,141 Other 818 1,364 130,618 119,675 Less accumulated depreciation and amortization (97,201 ) (82,669 ) $ 33,417 $ 37,006 |
Other Assets
Other Assets | 12 Months Ended |
Dec. 31, 2018 | |
Other Assets [Abstract] | |
Other Assets | Note 12 — Other Assets December 31, 2018 2017 Contingent loan repurchase asset $ 302,581 $ 431,492 Other prepaid expenses 27,647 22,559 Prepaid representation, warranty and indemnification claims - Agency MSR sale 15,173 20,173 Real estate 7,368 3,070 Prepaid lender fees, net (1) 6,589 9,496 Deferred tax assets, net 5,289 2,000 Derivatives, at fair value 4,552 5,429 Security deposits 2,278 3,019 Mortgage-backed securities, at fair value 1,502 1,592 Interest-earning time deposits 1,338 4,739 Prepaid income taxes (2) — 5,621 Other 5,250 2,696 $ 379,567 $ 511,886 (1) We amortize these costs to the earlier of the scheduled amortization date, contractual maturity date or prepayment date of the debt. (2) We recognized the balance of prepaid income taxes as a cumulative-effect reduction of retained earnings upon adoption of ASU 2016-16 on January 1, 2018. See Note 1 — Organization, Business Environment, Basis of Presentation and Significant Accounting Policies for additional information. Automotive dealer financing notes not pledged to our former automotive dealer loan financing facility were reported as Other assets. We ceased new lending and terminated this facility in January 2018. There were no remaining notes outstanding at December 31, 2018. At December 31, 2017 , the balance of the notes was $0 , net of an allowance of $7.7 million . Changes in the allowance are as follows: Years Ended December 31, 2018 2017 2016 Beginning balance $ 7,664 $ 4,371 $ 27 Provision (265 ) 3,293 4,344 Charge-offs and other (7,399 ) — — Ending balance $ — $ 7,664 $ 4,371 |
Borrowings
Borrowings | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Borrowings | Note 13 — Borrowings Match Funded Liabilities December 31, 2018 December 31, 2017 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-VF4 (4) Aug. 2048 Aug. 2018 $ — — % $ — 4.29 % $ 67,095 Advance Receivables Backed Notes - Series 2015-VF5 (4) Dec. 2049 Dec. 2019 8,441 4.06 216,559 4.29 67,095 Advance Receivables Backed Notes - Series 2016-T1 (5) Aug. 2048 Aug. 2018 — — — 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 Advance Receivables Backed Notes, Series 2018-T1 (5) Aug. 2049 Aug. 2019 — 3.50 150,000 — — Advance Receivables Backed Notes, Series 2018-T2 (5) Aug. 2050 Aug. 2020 — 3.81 150,000 — — Total Ocwen Master Advance Receivables Trust (OMART) 8,441 3.56 751,559 3.02 884,190 Ocwen Servicer Advance Receivables Trust III (OSART III) - Advance Receivables Backed Notes, Series 2014-VF1 (6) Dec. 2048 Dec. 2018 — — — 4.63 33,768 Ocwen Freddie Advance Funding (OFAF ) - Advance Receivables Backed Notes, Series 2015-VF1 (7) Jun. 2049 Jun. 2019 38,275 5.03 26,725 3.54 56,078 Total Servicing Advance Financing Facilities 46,716 3.61 % 778,284 3.16 % 974,036 Automotive Capital Asset Receivables Trust (ACART) - Loan Series 2017-1 (8) Feb. 2021 Feb. 2019 — — % — 6.77 % 24,582 $ 46,716 3.61 % $ 778,284 3.25 % $ 998,618 (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, 2018 , none 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 2.50% and 1.56% at December 31, 2018 and 2017 , respectively. (4) Effective January 1, 2018, the borrowing capacity of the Series 2014-VF4 and the Series 2015-VF5 variable rate notes were each reduced from $105.0 million to $70.0 million . The interest rate was based on 1ML, with a ceiling of 125 basis points (bps) plus a margin of 235 to 635 bps. On July 13, 2018, we increased the borrowing capacity of the Series 2015-VF5 variable notes to $225.0 million and extended the amortization date to December 15, 2019, with interest computed based on the lender’s cost of funds plus a margin of 105 to 250 bps. The increased capacity was used on July 16, 2018 to redeem the Series 2016-T1 term notes with an outstanding balance of $265.0 million and an amortization date of August 15, 2018. We also voluntarily terminated the Series 2014-VF4 variable notes on July 16, 2018. (5) Under the terms of the agreement, we must continue to borrow the full amount of the Series 2016-T2, 2018-T1 and 2018-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-T2, 2018-T1 and 2018-T2 term notes have a total combined borrowing capacity of $535.0 million . Rates on the individual classes of notes range from 2.72% to 4.53% . The Series 2016-T1 and Series 2017-T1 term notes were redeemed on July 16, 2018 and August 14, 2018, respectively. On August 15, 2018, we issued two $150.0 million fixed-rate term notes (Series 2018 T-1 and Series 2018-T2) with amortization dates of August 15, 2019 and August 17, 2020, respectively (6) We voluntarily terminated the Series 2014-VF1 variable notes on December 5, 2018. The maximum borrowing capacity under this facility was $55.0 million . There was a ceiling of 300 bps for 3ML in determining the interest rate for these variable rate notes. Rates on the individual notes were based on the lender’s cost of funds plus a margin of 235 to 475 bps. (7) On June 7, 2018, borrowing capacity was reduced from $110.0 million to $65.0 million with interest computed based on the lender’s cost of funds plus a margin of 180 to 450 bps. There is a ceiling of 300 bps for 3ML in determining the interest rate for these variable rate notes. (8) On January 23, 2018, we voluntarily terminated the Loan Series 2017-1 Notes. Pursuant to the 2017 Agreements and New RMSR Agreements, NRZ is obligated 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, 2018 , we were the servicer of Rights to MSRs sold to NRZ pertaining to $88.3 billion in UPB and the associated outstanding servicing advances as of such date were approximately $2.7 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 certain servicing advances even if NRZ does not perform its contractual obligations to fund those advances. See Note 9 — 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 Outstanding Balance at December 31, Borrowing Type Collateral Interest Rate Maturity 2018 2017 HMBS-Related Borrowings, at fair value (1) Loans held for investment 1ML + 260 bps (1) $ 5,380,448 $ 4,601,556 Other Financing Liabilities MSRs pledged, at fair value Original Rights to MSRs Agreements MSRs (2) (2) 436,511 499,042 2017 Agreements and New RMSR Agreements MSRs (3) (3) 138,854 9,249 PHH MSR Agreements MSRs (4) (4) 457,491 — 1,032,856 508,291 Secured Notes, Ocwen Asset Servicing Income Series, Series 2014-1 (5) MSRs (5) Feb. 2028 65,523 72,575 Financing liability - Owed to securitization investors, at fair value: IndyMac Mortgage Loan Trust (INDX 2004-AR11) (6) Loans held for investment (6) (6) 11,012 — Residential Asset Securitization Trust 2003-A11 (RAST 2003-A11) (6) Loans held for investment (6) (6) 13,803 — 24,815 — Advances pledged (7) Advances on loans (7) (7) 4,419 12,652 1,127,613 593,518 $ 6,508,061 $ 5,195,074 (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 in September 2017. In connection with the execution of the New RMSR Agreements in January 2018, we received a lump sum payment of $279.6 million as compensation for foregoing certain payments under the Original Rights to MSRs Agreements. 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. The expected maturity of the liability is April 30, 2020, the date through which we were scheduled to be the servicer on loans underlying the Rights to MSRs per the Original Rights to MSRs Agreements. (4) Represents a liability for sales of MSRs that are accounted for as a secured borrowing which we assumed in connection with the acquisition of PHH. Under this accounting treatment, the MSRs transferred to NRZ remain on the consolidated balance sheet and the proceeds from the sale are recognized as a secured liability. We elected to record the liability at fair value consistent with the related MSRs. (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. (6) Consists of securitization debt certificates due to third parties that represent beneficial interests in trusts that we include in our unaudited consolidated financial statements, as more fully described in Note 3 — Securitizations and Variable Interest Entities . The holders of these certificates have no recourse against the assets of Ocwen. The certificates in the INDX 2004-AR11 Trust pay interest based on variable rates which are generally based on weighted average net mortgage rates and which range between 3.68% and 4.26% at December 31, 2018 . The certificates in the RAST 2003-A11 Trust pay interest based on fixed rates ranging between 4.25% and 5.75% and a variable rate based on 1ML plus 0.45% . The maturity of the certificates occurs upon maturity of the loans held by the trust. The remaining loans in the INDX 2004-AR11 Trust and RAST 2003-A11 Trust have maturity dates extending through November 2034 and October 2033, respectively. (7) 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. The effective interest rate is based on 1ML plus a margin of 450 bps. Other Secured Borrowings Outstanding Balance at December 31, Borrowing Type Collateral Interest Rate Termination / Maturity Available Borrowing Capacity (1) 2018 2017 SSTL (2) (2) 1-Month Euro-dollar rate + 500 bps with a Eurodollar floor of 100 bps (2) Dec. 2020 $ — $ 231,500 $ 298,251 Mortgage loan warehouse facilities Repurchase agreement (3) Loans held for sale (LHFS) 1ML + 195 - 300 bps Sep. 2019 25,307 74,693 8,221 Participation agreements (4) LHFS N/A (4) — 42,331 161,433 Mortgage warehouse agreement (5) LHFS (reverse mortgages) 1ML + 275 bps; 1ML floor of 350 bps Aug. 2019 — 8,009 32,042 Master repurchase agreement (6) LHFS (forward and reverse mortgages) 1ML + 225 bps forward; 1ML + 275 bps reverse Dec. 2019 169,320 30,680 54,086 Master repurchase agreement (7) LHFS (reverse mortgages) Prime + 0.0% (4.0% floor) Jan. 2020 — — — Master repurchase agreement (8) N/A 1ML + 170bps N/A — — — 194,627 155,713 255,782 $ 194,627 387,213 554,033 Unamortized debt issuance costs - SSTL (3,098 ) (5,423 ) Discount - SSTL (1,577 ) (2,760 ) $ 382,538 $ 545,850 Weighted average interest rate 5.49 % 5.22 % (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, $62.4 million could be used at December 31, 2018 based on the amount of eligible collateral that could be pledged. (2) Under the terms of the Amended and Restated Senior Secured Term Loan Facility Agreement with an original 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 principal payments of $4.2 million on the SSTL. 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) 1ML , plus a margin of 4.00% and subject to a base rate floor of 2.00% or (b) 1ML , plus a margin of 5.00% and subject to a 1ML floor of 1.00% . To date we have elected option (b) to determine the interest rate. (3) On September 28, 2018, we renewed this facility through September 27, 2019. In connection with the renewal, we increased the maximum borrowing amount from $137.5 million to $175.0 million , of which $100.0 million is available on a committed basis and the remainder is available at the discretion of the lender. (4) Under these participation agreements, the lender provides financing for a combined total of $250.0 million at the discretion of the lender. The participation agreements allow the lender to acquire a 100% beneficial interest in the underlying mortgage loans. The transaction does not qualify for sale accounting treatment and is accounted for as a secured borrowing. The lender earns the stated interest rate of the underlying mortgage loans while the loans are financed under the participation agreement. On May 31, 2018, we renewed these facilities through April 30, 2019 ( $175.0 million ) and May 31, 2019 ( $75.0 million ). (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. On August 15, 2018, we renewed these facilities through August 15, 2019. (6) On December 7, 2018, we renewed this facility through December 6, 2019. In connection with the renewal, we increased the maximum borrowing amount from $150.0 million to $250.0 million , of which $200.0 million is available on a committed basis and the remainder is available at the discretion of the lender. 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. On January 23, 2019, we renewed this facility through January 22, 2020. (8) This agreement was originally entered into by PHH and subsequently assumed by Ocwen in connection with its acquisition of PHH. T he lender provides financing for up to $200.0 million at the discretion of the lender. The agreement has no stated maturity date. In addition to the above mortgage loan warehouse facilities, we entered into a master participation agreement on February 4, 2019 under which the lender will provide $300.0 million of borrowing capacity to PMC on an uncommitted basis to finance single family mortgage loans held for sale. Senior Notes Outstanding Balance at December 31, Interest Rate Maturity 2018 2017 Senior unsecured notes: Ocwen (1) 6.625% May 2019 $ — $ 3,122 PHH (2) 7.375% Sep. 2019 97,521 — PHH (2) 6.375% Aug. 2021 21,543 — 119,064 3,122 Senior secured notes (3) 8.375% Nov. 2022 330,878 346,878 449,942 350,000 Unamortized debt issuance costs (2,075 ) (2,662 ) Fair value adjustments (2) 860 — $ 448,727 $ 347,338 (1) On December 21, 2018, we redeemed all of the remaining Senior unsecured notes due in May 2019, at a redemption price of 100.0% of the outstanding principal balance plus accrued and unpaid interest. (2) These notes were originally issued by PHH and subsequently assumed by Ocwen in connection with its acquisition of PHH. We recorded the notes at their respective fair values on the date of acquisition, and we are amortizing the resulting fair value adjustments over the remaining term of the notes. We have the option to redeem the notes due in August 2021, in whole or in part, on or after January 1, 2019 at a redemption price equal to 100.0% of the principal amount plus any accrued and unpaid interest. (3) 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. In December 2018, Ocwen repurchased $16.0 million of the Senior Secured Notes at a price of 96.0% . 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. 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 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. Credit Ratings Credit ratings are intended to be an indicator of the creditworthiness of a company, security or obligation. At December 31, 2018 , the S&P long-term corporate rating was “B-”. On December 11, 2018, Moody’s affirmed the long-term corporate rating of “Caal” and revised the outlook to stable from negative. On July 25, 2018, Fitch affirmed the long-term issuer default rating of “B-” and withdrew all corporate ratings. 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, entering into transactions with affiliates; • 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 requirements 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 certain of 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, 2018 , the most restrictive consolidated tangible net worth requirements contained in our debt agreements were for a minimum of $275.0 million in consolidated tangible net worth, as defined, at Ocwen under our match funded debt and certain of our other debt agreements. 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. Collateral Our assets held as collateral related to secured borrowings, committed under sale or other contractual obligations and which may be subject to secured liens under the SSTL and Senior Secured Notes are as follows at December 31, 2018: Collateral for Secured Borrowings Total Assets Match Funded Liabilities Financing Liabilities Mortgage Loan Warehouse Facilities Sales and Other Commitments (1) Other (2) Cash $ 329,132 $ — $ — $ — $ — $ 329,132 Restricted cash 67,878 20,968 — 5,658 41,252 — Mortgage servicing rights 1,457,149 — 985,576 — 9,867 461,706 Advances, net 249,382 — 11,162 — 31,216 207,004 Match funded assets 937,294 937,294 — — — — Loans held for sale 242,622 — — 143,704 — 98,918 Loans held for investment 5,498,719 — 5,406,968 33,567 — 58,184 Receivables, net 198,262 — — — — 198,262 Premises and equipment, net 33,417 — — — — 33,417 Other assets 379,567 — — — 320,032 59,535 Assets related to discontinued operations 794 — — — — 794 Total Assets $ 9,394,216 $ 958,262 $ 6,403,706 $ 182,929 $ 402,367 $ 1,446,952 (1) Sales and Other Commitments include MSRs and related advances committed under sale agreements, Restricted cash and deposits held as collateral to support certain contractual obligations, and Contingent loan repurchase assets related to the Ginnie Mae early buyout program for which a corresponding liability is recognized in Other liabilities. (2) The borrowings under the SSTL are secured by a first priority security interest in substantially all of the assets of Ocwen, OLS, PHH, PMC and the other guarantors thereunder, excluding among other things, 35% of the voting capital stock of foreign subsidiaries, securitization assets and equity interests of securitization entities, assets securing permitted funding indebtedness and non-recourse indebtedness, REO assets, Agency MSRs with respect to which an acknowledgment agreement acknowledging such security interest has not been obtained, as well as other customary carve-outs (collectively, the Collateral). The Collateral is subject to certain permitted liens set forth under the SSTL and related security agreement. The Senior Secured Notes are guaranteed by Ocwen and the other guarantors that guarantee the SSTL, and the borrowings under the Senior Secured Notes are secured by a second priority security interest in the Collateral. Security interests securing borrowings under the SSTL and Senior Secured Notes may include amounts presented in Other as well as certain assets presented in Collateral for Secured Borrowings and Sales and Other Commitments, subject to permitted liens as defined in the applicable debt documents. The amounts presented here may differ in their calculation and are not intended to represent amounts that may be used in connection with covenants under the applicable debt documents. 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) 2019 2020 2021 2022 Total Fair Match funded liabilities $ 628,284 $ 150,000 $ — $ — $ 778,284 $ 776,485 Other secured borrowings 172,463 214,750 — 387,213 383,162 Senior notes 97,521 — 21,543 330,878 449,942 426,147 $ 898,268 $ 364,750 $ 21,543 $ 330,878 $ 1,615,439 $ 1,585,794 (1) Amounts are exclusive of any related discount, unamortized debt issuance costs or fair value adjustment. (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 $1.0 billion recorded in connection with sales of Rights to MSRs and MSRs and $5.4 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, 2018 | |
Other Liabilities Disclosure [Abstract] | |
Other Liabilities | Note 14 — Other Liabilities December 31, 2018 2017 Contingent loan repurchase liability $ 302,581 $ 431,492 Other accrued expenses 99,739 75,088 Accrued legal fees and settlements 62,763 51,057 Due to NRZ - Advance collections and servicing fees 53,001 98,493 Liability for indemnification obligations 51,574 23,117 Servicing-related obligations 41,922 36,296 Checks held for escheat 20,686 19,306 Liability for uncertain tax positions 13,739 3,252 Liability for unfunded pension obligation 12,683 165 Accrued interest payable 7,209 5,172 Liability for mortgage insurance contingency 6,820 6,820 Derivatives, at fair value 4,986 635 Deferred revenue 4,441 3,463 Other 21,492 15,054 $ 703,636 $ 769,410 Accrued Legal Fees and Settlements Years Ended December 31, 2018 2017 2016 Beginning balance $ 51,057 $ 93,797 $ 74,922 Accrual for probable losses (1) 19,774 131,113 74,943 Payments (2) (12,983 ) (174,941 ) (47,754 ) Assumed in connection with the acquisition of PHH 9,960 — — Issuance of common stock in settlement of litigation (3) (5,719 ) (1,937 ) — Net increase (decrease) in accrued legal fees (1,917 ) 482 (6,231 ) Other 2,591 2,543 (2,083 ) Ending balance $ 62,763 $ 51,057 $ 93,797 (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) See Note 15 — Equity for additional information. |
Equity
Equity | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Equity | Note 15 — Equity Common Stock During 2016, we completed the repurchase of 991,985 shares of common stock in the open market for a total purchase price of $5.9 million under a program authorized by Ocwen’s Board of Directors in October 2013 for the repurchase of up to an aggregate of $500.0 million of Ocwen’s issued and outstanding shares of common stock. From inception of this program through its expiration in July 2016, we completed the repurchase of 13,163,793 shares for an aggregate purchase price of $380.3 million . In 2017, 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. In 2017, Ocwen agreed to issue an aggregate of 2,500,000 shares of common stock in connection with a mediated settlement of litigation. Ocwen issued 625,000 of the shares in December 2017 and the remaining 1,875,000 shares 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. Accumulated Other Comprehensive Loss The components of accumulated other comprehensive loss (AOCL), net of income taxes, were as follows: December 31, 2018 2017 Unfunded pension plan obligation $ 3,347 $ 128 Unrealized losses on cash flow hedges 979 1,128 Other (69 ) (7 ) $ 4,257 $ 1,249 |
Derivative Financial Instrument
Derivative Financial Instruments and Hedging Activities | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments and Hedging Activities | Note 16 — 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, 2018 : Interest Rate Risk IRLCs and Loans Held for Sale Borrowings IRLCs Forward MBS Trades Interest Rate Caps Notional balance at December 31, 2017 $ 96,339 $ 240,823 $ 375,000 Additions 1,288,938 404,162 173,750 Assumed in connection with the acquisition of PHH 50,731 — — Amortization — — (288,750 ) Maturities (1,014,466 ) (479,622 ) — Terminations (271,367 ) — — Notional balance at December 31, 2018 $ 150,175 $ 165,363 $ 260,000 Maturity Jan. 2019 to Mar. 2019 Mar. 2019 May 2019 to May 2020 Fair value of derivative assets (liabilities) (1) at: December 31, 2018 $ 3,871 $ (4,983 ) $ 678 December 31, 2017 3,283 (545 ) 2,056 Gains (losses) on derivatives during the years ended: Gain on loans held for sale, net Other, net December 31, 2018 $ 3,809 $ 136 $ (841 ) December 31, 2017 (3,089 ) (8,529 ) 10 (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 foreign currency exchange rate risk to the extent that our foreign exchange positions remain unhedged. We have not entered into any forward exchange contracts during the reported periods to hedge against the effect of changes in the value of the India Rupee or Philippine Peso. Foreign currency remeasurement exchange gains (losses) were $(3.2) million , $1.7 million and $0.2 million during the years ended December 31, 2018 , 2017 and 2016 , respectively, and are reported in Other, net in the consolidated statements of operations. The losses in 2018 are primarily attributed to depreciation of the India Rupee against the U.S. Dollar. 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, 2018 and 2017 , respectively, were $1.1 million and $1.2 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. These deferred losses in AOCL are amortized to Other, net in the consolidated statements of operations. |
Interest Income
Interest Income | 12 Months Ended |
Dec. 31, 2018 | |
Other Income and Expenses [Abstract] | |
Interest Income | Note 17 — Interest Income Years Ended December 31, 2018 2017 2016 Loans held for sale $ 10,756 $ 11,100 $ 15,774 Automotive dealer financing notes 420 3,069 1,534 Interest earning cash deposits and other 2,850 1,796 1,775 $ 14,026 $ 15,965 $ 19,083 |
Interest Expense
Interest Expense | 12 Months Ended |
Dec. 31, 2018 | |
Other Income and Expenses [Abstract] | |
Interest Expense | Note 18 — Interest Expense Years Ended December 31, 2018 2017 2016 Financing liabilities NRZ $ 171,670 $ 236,311 $ 234,401 Other financing liabilities 5,013 6,203 14,433 176,683 242,514 248,834 Match funded liabilities 31,870 47,624 66,879 Senior notes 31,280 29,806 30,012 Other secured borrowings 30,465 39,531 60,469 Other 4,743 3,763 6,389 $ 275,041 $ 363,238 $ 412,583 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 19 — Income Taxes On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (Tax Act), which made broad and complex changes to the U.S. federal corporate income tax rules. The Tax Act amends the Internal Revenue Code to reduce tax rates, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and creates new taxes on certain foreign-sourced earnings, among other provisions. 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. The 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 BEAT, Global Intangible Low-Taxed Income (GILTI), and revised interest deductibility limitations). We are continuing to evaluate the impact of the new U.S. tax legislation and guiding regulations (which are still being promulgated and finalized) on our global tax position. It is possible that any impact of these provisions could significantly reduce the benefit of the reduction in the statutory U.S. federal rate. SAB 118 Measurement Period We applied the guidance in SAB 118 when accounting for the enactment date effects of the Tax Act in 2017 and throughout 2018. At December 31, 2017, we had not completed our accounting for all of the enactment-date income tax effects of the Tax Act under ASC 740, Income Taxes ; therefore, we recorded provisional amounts related to the one-time deemed repatriation tax (Transition Tax) liability related to the undistributed earnings of certain foreign subsidiaries that were not previously taxed and adjusted deferred tax assets and liabilities to account for the reduction in the statutory U.S. federal rate. At December 31, 2018, we have now completed our accounting for all of the enactment-date income tax effects of the Tax Act. As further discussed below, during 2018, we recognized adjustments to the provisional amounts recorded at December 31, 2017, which produced changes in the amount of deferred tax assets recorded in the U.S. and USVI jurisdictions. As the net deferred tax assets in these jurisdictions have full valuation allowances, the adjustments to the provisional amounts recorded under SAB 118 do not have an impact on our consolidated statements of financial position or consolidated statements of operations. One-Time Transition Tax Under the Tax Act, the transition to a new territorial tax system caused Ocwen to incur a Transition Tax on our total post-1986 undistributed earnings and profits (E&P) of our non-U.S. subsidiaries, the tax on which we previously deferred from U.S. income taxes under U.S. law. The amount of the Transition Tax was dependent upon many factors, including the accumulated 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. We recorded a provisional amount for our one-time Transition Tax liability in our December 31, 2017 financial statements as a reduction to the U.S. federal NOL carryforward of $16.9 million . The reduction of the NOL deferred tax asset resulted 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 was subject to change as we continued to wait for further guidance and analyze additional information necessary to finalize the calculations and maximize the long-term value to Ocwen. Upon further analysis of the Tax Act as well as notices and regulations issued and proposed by the U.S. Department of the Treasury and the Internal Revenue Service, we finalized our calculations of the Transition Tax liability in 2018. We increased our December 31, 2017 provisional amount by increasing foreign tax credits by $19.9 million and further reducing the U.S. federal NOL carryforward by $51.7 million . As the net deferred tax asset in the U.S. jurisdiction has a full valuation allowance, the recording of the changes to these deferred tax assets does not have an impact on our consolidated balance sheets or consolidated statements of operations. Deferred Tax Assets & Liabilities As a result of the reduction in the corporate income tax rate, we revalued our U.S. and USVI net deferred tax assets at December 31, 2017. We recorded a provisional decrease to our net deferred tax assets in the U.S. and USVI jurisdictions of $36.1 million and $26.6 million , respectively, due to the change in the corporate tax rate. Upon further analysis of certain aspects of the Tax Act as well as notices and regulations issued and proposed by the U.S. Department of the Treasury and the Internal Revenue Service and refinement of our calculations during the 12 months ended December 31, 2018, we adjusted our provisional amount by recording an increase to our net deferred tax assets in the U.S. and USVI jurisdictions of $6.0 million and $4.6 million , respectively. This increase resulted in a net decrease to the deferred tax assets in the U.S. and USVI jurisdictions of $30.1 million and $22.0 million , respectively. 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 balance sheets or consolidated statements of operations. Global Intangible Low-Taxed Income (GILTI) The Tax Act subjects a U.S. shareholder to tax on GILTI earned by certain foreign subsidiaries. The FASB Staff Q&A, Topic 740, No. 5, Accounting for Global Intangible Low-Taxed Income , states that an entity can make an accounting policy election to either recognize deferred taxes for temporary basis differences expected to reverse as GILTI in future years or to provide for the tax expense related to GILTI in the year the tax is incurred as a period expense only. Because we were evaluating the provision of GILTI at December 31, 2017, we recorded no GILTI-related deferred taxes in 2017. After further consideration in the current year, we have elected to account for GILTI in the year the tax is incurred. For income tax purposes, the components of loss from continuing operations before taxes were as follows: Years Ended December 31, 2018 2017 2016 Domestic $ 11,477 $ (75,143 ) $ (130,920 ) Foreign (82,953 ) (68,830 ) (75,441 ) $ (71,476 ) $ (143,973 ) $ (206,361 ) The components of income tax benefit were as follows: Years Ended December 31, 2018 2017 2016 Current: Federal $ (7,670 ) $ (21,859 ) $ (8,025 ) State 356 (3,938 ) 460 Foreign 11,132 9,550 5,099 3,818 (16,247 ) (2,466 ) Deferred: Federal 23,991 27,289 (22,054 ) State 319 702 4,701 Foreign (4,252 ) 2,719 (2,806 ) Provision for (reversal of) valuation allowance on deferred tax assets (23,347 ) (29,979 ) 15,639 (3,289 ) 731 (4,520 ) Total $ 529 $ (15,516 ) $ (6,986 ) 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. The foreign tax rate differential therefore represents the difference in tax expense between jurisdictional income taxed at the U.S. statutory rate and each respective jurisdictional statutory rate. As 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. Income tax expense differs from the amounts computed by applying the U.S. Federal corporate income tax rate as follows: Years Ended December 31, 2018 2017 2016 Expected income tax expense (benefit) at statutory rate (1) $ (15,010 ) $ (50,391 ) $ (72,225 ) Differences between expected and actual income tax expense (2): Bargain purchase gain disallowance (13,448 ) — — Reduction in tax attributes for Section 382 & 383 limitations 55,668 — — U.S. Tax Reform - Change in Federal rate (10,666 ) 62,758 — U.S. Tax Reform - Transition Tax 14,412 34,846 — U.S. Tax Reform - BEAT Tax 1,076 — — Foreign tax differential including effectively connected income (3) 22,990 (12,140 ) 39,249 Provision for (reversal of) liability for uncertain tax positions (3,987 ) (16,925 ) 2,236 Provision for (reversal of) valuation allowance on deferred tax assets (4) (23,347 ) (29,979 ) 15,639 Provision for liability for intra-entity transactions — 2,484 3,357 State tax, after Federal tax benefit 675 (3,938 ) 250 Excess tax benefits from share-based compensation (356 ) (3,701 ) — Other permanent differences 122 (267 ) (138 ) Foreign tax credit (generation) utilization (25,601 ) — 3,214 Executive compensation disallowance 959 221 425 Subpart F income 3,222 2,824 228 Other provision to return differences (6,559 ) 221 (1,334 ) Other 379 (1,529 ) 2,113 Actual income tax expense (benefit) $ 529 $ (15,516 ) $ (6,986 ) (1) The U.S. Federal corporate income tax rate is 21% beginning January 1, 2018 and was 35% until December 31, 2017. (2) ASC 740-10-50 and SEC Regulation S-X, Rule 4-08(h) require the disclosure of significant reconciling items in the effective tax rate reconciliation schedule. We have prepared the 2018 effective tax rate reconciliation consistent with prior years, taking into account the materiality of reconciling items, comparability with prior years and the usefulness of the information. (3) The foreign tax differential includes a benefit recognized in 2018, 2017 and 2016 for taxable losses earned by OMS which are taxable in the U.S. as effectively connected income (ECI). The impact of ECI to income tax benefit for 2018 , 2017 6 and 2016 was $3.3 million , $28.5 million and $7.4 million , respectively. (4) 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 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. Net deferred tax assets were comprised of the following: December 31, 2018 2017 Deferred tax assets Net operating loss carryforward $ 31,587 $ 59,271 Reserve for servicing exposure 10,331 1,312 Accrued other liabilities 8,966 3,239 Foreign deferred assets 7,142 6,769 Partnership losses 6,681 5,360 Stock-based compensation expense 5,610 4,202 Interest expense disallowance 4,773 2,032 Intangible asset amortization 4,579 5,541 Accrued incentive compensation 4,527 4,798 Accrued legal settlements 4,350 3,602 Bad debt and allowance for loan losses 3,498 2,383 Tax residuals and deferred income on tax residuals 2,905 2,569 Foreign tax credit 357 4,262 Mortgage servicing rights amortization — 3,664 Other 8,832 4,951 104,138 113,955 Deferred tax liabilities Mortgage servicing rights amortization 27,860 — Foreign undistributed earnings 2,059 4,858 Other 804 49 30,723 4,907 73,415 109,048 Valuation allowance (68,126 ) (107,048 ) Deferred tax assets, net $ 5,289 $ 2,000 As of December 31, 2018 , we had a U.S. net deferred tax asset of $46.3 million and a USVI net deferred tax asset of $21.3 million . Valuation Allowances 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, 2018 . 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 $46.3 million and $62.9 million on our U.S. net deferred tax assets at December 31, 2018 and 2017 , respectively, and a valuation allowance of $21.3 million and $43.9 million on our USVI net deferred tax assets at December 31, 2018 and 2017 , 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. Net Operating Loss Carryforwards At December 31, 2018 , we had U.S. NOL carryforwards and USVI NOL carryforwards of $133.0 million and $134.2 million . These carryforwards will expire beginning 2020 through 2037 with NOLs generated in 2018 never expiring. 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 $27.9 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, 2018 will be accounted for as a reduction of income tax expense. Additionally, $334.5 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 $0.7 million and $0.2 million , respectively, at December 31, 2018 against which a valuation allowance has been recorded. Change of Control: Annual Limitations on Utilization of Tax Attributes 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 and tax credit carryforwards. If it is determined that an ownership change(s) has occurred, there may be annual limitations on the use of these NOL and tax credit 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 have evaluated whether we experienced an ownership change, as defined under Section 382, and determined that an ownership change did occur in the U.S. jurisdiction in January 2015 and in December 2017, which also results in an ownership change under Section 382 in the USVI jurisdiction. This determination was made based on information available as of the date of our Form 10-K filing for the fiscal year ended December 31, 2018. Due to the Section 382 and 383 limitations and the maximum carryforward period for our NOLs and tax credits, we will be unable to fully recognize certain deferred tax assets. Accordingly, as of December 31, 2018, we have reduced our gross deferred tax asset related to our NOLs by $160.9 million , our foreign tax credit deferred tax asset by $29.5 million , and corresponding valuation allowance by $55.7 million . The realization of all or a portion of our remaining deferred income tax assets (including NOLs and tax credits) is dependent upon the generation of future taxable income during the statutory carryforward periods. In addition, the limitation on the utilization of our NOL and tax credit carryforwards could result in Ocwen incurring a current tax liability in future tax years. Our inability to utilize our pre-ownership change NOL carryforwards, any future recognized built-in losses or deductions, and tax credit carryforwards could have an adverse effect on our financial condition, results of operations and cash flows. As part of our Section 382 evaluation and consistent with the rules provided within Section 382, Ocwen relies strictly on the existence or absence, as well as the information contained in certain publicly available documents ( e.g. , Schedule 13D, Schedule 13G or other documents filed with the SEC) to identify shareholders that own a 5-percent or greater interest in Ocwen stock throughout the period tested. Further, Ocwen relies on such public filings to identify dates in which such 5-percent shareholders acquired, disposed, or otherwise transacted in Ocwen common stock. As the requirement for filing such notices of ownership from the SEC is to report beneficial ownership, as opposed to actual economic ownership of the stock of Ocwen, certain SEC filings may not represent ownership in Ocwen stock that should be considered in determining whether Ocwen experienced an ownership change under the Section 382 rules. Notwithstanding the preceding sentences (regarding Ocwen’ s ability to rely on the existence and absence of information in publicly filed Schedules 13D and 13G), the rules prescribed in Section 382 and the regulations thereunder provide that Ocwen may (but is not required to) seek additional clarification from shareholders filing such Schedules 13D and 13G if there are questions or uncertainty regarding the true economic ownership of shares reported in such filing (whether due to ambiguity in the filing, an overly complex ownership structure, the type of instruments owned and reported in the filings, etc.) (often referred to “actual knowledge” questionnaires). Such information can be sought on a filer by filer basis ( i.e., there is no requirement that if actual knowledge is sought with respect to one shareholder, actual knowledge must be sought with respect to all shareholders that filed schedules 13D or 13G). While the seeking of actual knowledge can be beneficial in some instances it may be detrimental in others. Once such actual knowledge is received, Section 382 requires the inclusion of such actual knowledge, even if such inclusion is detrimental to the conclusion reached. Ocwen has performed its analysis of the rules under Section 382 and, based on all currently available information, identified it experienced an ownership change for Section 382 purposes in January 2015 and December 2017. Prior to 2018, Ocwen was aware of shareholder activity in 2015 and 2017 that may have caused a Section 382 ownership change(s), but determined that additional information could potentially be obtained from certain shareholders that would indicate a Section 382 ownership change had not occurred. In completing this analysis, Ocwen identified several shareholders that filed a schedule 13G during the period disclosing a greater than 5-percent interest in Ocwen stock where beneficial versus economic ownership of the stock was unclear, and Ocwen therefore requested further details. As of the date of this Form 10-K, Ocwen has not received all requested responses from selected shareholders, and will continue to consider such shareholders as economic owners of Ocwen’s stock until actual knowledge is otherwise received. Ocwen is continuing to monitor the ownership in its stock to evaluate information that will become available later in 2019 and that may result in a different outcome for Section 382 purposes and our future cash tax obligations. As part of this monitoring, Ocwen periodically evaluates whether it is appropriate and beneficial to retroactively seek actual knowledge on certain previously identified and included 5-percent shareholders, whereby, depending on the responses received, Ocwen may conclude that either the January 2015 or December 2017 Section 382 ownership changes may have instead occurred on a different date, or did not occur at all. As such, our analysis regarding the amount of tax attributes that may be available to offset taxable income in the future without restrictions imposed by Section 382 may continue to evolve. Uncertain Tax Positions 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, 2013 through the present, and our India corporate tax returns for the years ended March 31, 2010 through the present. We are currently under audit in the USVI jurisdiction for tax years 2013 - 2016 due to the carryback of losses generated in 2015 and 2016 to tax years 2013 and 2014, respectively. A reconciliation of the beginning and ending amount of the total liability for uncertain tax positions is as follows: Years Ended December 31, 2018 2017 2016 Beginning balance $ 2,281 $ 16,994 $ 32,548 Additions - PHH acquisition 13,108 — — Additions for tax positions of current year 412 — — Additions for tax positions of prior years 1,354 2,281 — Reductions for tax positions of prior years (236 ) — — Reductions for settlements (3,188 ) (387 ) (14,420 ) Lapses in statute of limitations (4,109 ) (16,607 ) (1,134 ) Ending balance $ 9,622 $ 2,281 $ 16,994 We recognized total interest and penalties of $2.9 million , $5.1 million and $1.0 million as income tax benefit in 2018 , 2017 and 2016 , respectively. At December 31, 2018 and 2017 , accruals for interest and penalties were $4.1 million and $1.0 million , respectively. As of December 31, 2018 and 2017 , we had a liability for uncertain tax positions of $9.6 million and $2.3 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 $9.6 million in unrecognized tax benefits may be necessary within the next 12 months. Undistributed Foreign Earnings and Non-U.S. Jurisdictions As of December 31, 2018 , we have recognized a deferred tax liability of $2.1 million for India and Philippines subsidiary undistributed earnings of $11.7 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. 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. Federal income tax expense has been recognized on these reinvested foreign earnings as a result of the Tax Act. Determination of the amount of unrecognized deferred tax liability with respect to items such as foreign withholding taxes, state income tax expense or foreign exchange gain or loss on these reinvested foreign earnings 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 2018 and 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 related to 2016 USVI losses. The detriment of these EDC benefits on diluted earnings per share was $(0.51) for 2016 . |
Basic and Diluted Earnings (Los
Basic and Diluted Earnings (Loss) per Share | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Earnings (Loss) per Share | Note 20 — Basic and Diluted Earnings (Loss) per Share Basic earnings or loss per share excludes common stock equivalents and is calculated by dividing net income or 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 2018, 2017 and 2016, 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, 2018 2017 2016 Loss from continuing operations, net of tax attributable to Ocwen common stockholders $ (72,181 ) $ (127,966 ) $ (199,762 ) Income from discontinued operations, net of tax 1,409 — — Net loss attributable to Ocwen stockholders $ (70,772 ) $ (127,966 ) $ (199,762 ) Weighted average shares of common stock outstanding - Basic and Diluted 133,703,359 127,082,058 123,990,700 Earnings (loss) per share - Basic and Diluted Continuing operations $ (0.54 ) $ (1.01 ) $ (1.61 ) Discontinued operations $ 0.01 $ — $ — Total attributable to Ocwen stockholders $ (0.53 ) $ (1.01 ) $ (1.61 ) Stock options and common stock awards excluded from the computation of diluted earnings per share Anti-dilutive (1) 4,989,725 5,487,164 7,176,089 Market-based (2) 670,829 862,446 795,456 (1) Includes stock options that are anti-dilutive because their exercise price was greater than the average market price of Ocwen’s stock, and stock awards that are anti-dilutive based on the application of the treasury stock method. (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, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Employee Compensation and Benefit Plans | Note 21 — Employee Compensation and Benefit Plans We maintain defined contribution plans to provide post-retirement benefits to our eligible employees and non-contributory defined benefit pension plans which are frozen and cover certain former eligible employees. We also maintain additional incentive 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 to assist in attracting and retaining employees vital to our long-term success. These plans are summarized below. Defined Contribution Savings Plans We maintain defined contribution savings plans for employees in the U.S (401(k) plans) and India (Provident Fund). We sponsor separate defined contribution plans for Ocwen, PHH Corporation and PHH Home Loans that provide certain eligible employees an opportunity to accumulate funds for retirement. Contributions of participating employees are matched on the basis specified by these plans. The employee match percentage ranges from 50% of each employee’s contributions, limited to 2% , to 100% of each eligible participant’s salary deferred up to 4% of such participant’s eligible compensation per pay period with maximum aggregate matching of $10,800 for 2018. For the Provident Fund, both the employee and the employer are required to make minimum contributions to the fund at a predetermined rate (currently 12% ) applied to a portion of the employee's salary. Employers are not required to make contributions beyond this minimum. Our contributions to these plans were $4.8 million , $5.3 million and $4.9 million for the years ended December 31, 2018 , 2017 and 2016 , respectively. Defined Benefit Pension Plans Ocwen and PHH sponsor non-contributory defined benefit pension plan for which benefits are based on an employee’s years of credited service and a percentage of final average compensation, or as otherwise described by the plan. Both defined benefit pension plans are frozen, wherein the plans only accrue additional benefits for a limited number of employees and no additional employees are eligible for participation in the plans. On October 4, 2018, Ocwen assumed all benefit obligations associated with PHH’s defined benefit pension plan as a result of its completed acquisition of PHH. The following table shows the total change in the benefit obligation, plan assets and funded status for the pension plans: December 31, 2018 Benefit obligation $ 49,122 Fair value of plan assets 36,439 Unfunded status recognized in Other liabilities $ (12,683 ) Amounts recognized in Accumulated other comprehensive income $ 3,422 The net periodic benefit cost related to the defined benefit pension plans is $0.4 million for the year ended December 31, 2018 and not significant for the years ended December 31, 2017 and 2016 , respectively and is included in Other expenses. As of December 31, 2018 , future expected benefit payments to be made from the defined benefit pension plan’s assets, which reflect expected future service, is $2.7 million for the year ending December 31, 2019, $2.8 million for the years ending December 31, 2020 through 2021 and $2.7 million for the years ending December 31, 2022 through 2023. The expected benefit payments to be made for the subsequent five years ending December 31, 2024 through 2028 are $15.4 million . Both Ocwen and PHH’s policy is to contribute amounts to the defined benefit pension plans sufficient to meet minimum funding requirements as set forth in employee benefit and tax laws and additional amounts at their discretion. Our contributions to the Ocwen plan were $0.2 million , $0.1 million and $0.1 million for the years ended December 31, 2018 , 2017 and 2016 , respectively. No contributions were required to be made to the PHH plan during the post-acquisition period ended December 31, 2018, and contributions are not expected to be significant for the year ended December 31, 2019. 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 $20.5 million , $24.5 million and $25.5 million of compensation expense during 2018 , 2017 and 2016 , 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, 2018 , there were 7,917,804 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 % 2016 - 2018 Awards: Options: Service Condition: Time-based 9 % Ratably over three years (1/3 vesting on each of the first three anniversaries of the grant date). Stock Units: Service Condition: Time-based 55 Over three years with 1/3 vesting on each of the first three anniversaries of the grant date. Market Condition: Time-based vesting schedule and Market performance-based vesting date 36 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 2018 2017 2016 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 6,708,655 $ 9.97 6,926,634 $ 9.88 7,151,225 $ 10.10 Granted (1) 348,385 3.66 — — — — Exercised (2) — — — — (69,805 ) 5.81 Forfeited / Expired (4) (4,964,441 ) 5.62 (217,979 ) 7.16 (154,786 ) 21.80 Outstanding at end of year (5)(6) 2,092,599 $ 19.22 6,708,655 $ 9.97 6,926,634 $ 9.88 Exercisable at end of year (5)(6)(7) 1,520,039 $ 21.29 6,234,830 $ 8.87 6,344,958 $ 8.71 (1) Stock options granted in 2018 include 266,990 options awarded to Ocwen’s current Chief Executive Officer at an exercise price of $4.12 equal to the closing price of our common stock on the effective date of his employment, which was the closing date of the PHH acquisition. (2) The weighted average grant date fair value of stock options granted in 2018 was $2.63 . (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 in 2016 . (4) Includes 4,719,750 options which expired unexercised in 2018 because their exercise price was greater than the market price of Ocwen’s stock. (5) At December 31, 2018 , 160,000 options with a market condition for vesting based on an average common stock trading price of $38.94 , had not met their performance criteria. Outstanding and exercisable stock options at December 31, 2018 have a net aggregate intrinsic value of $0 . A total of 870,939 market-based options were outstanding at December 31, 2018 , of which 710,939 were exercisable. (6) At December 31, 2018 , the weighted average remaining contractual term of options outstanding and options exercisable was 5.02 years and 3.87 years , respectively. (7) The total fair value of stock options that vested and became exercisable during 2018 , 2017 and 2016 , based on grant-date fair value, was $0.6 million , $0.7 million and $1.1 million , respectively. Years Ended December 31, Stock Units 2018 2017 2016 Number of Weighted Number of Weighted Number of Weighted Unvested at beginning of year 2,753,918 $ 3.69 2,752,054 $ 3.91 835,730 $ 10.00 Granted (1)(2) 1,809,373 3.57 971,761 2.56 2,184,100 2.19 Vested (3)(4) (796,856 ) 2.78 (896,272 ) 3.26 (26,666 ) 32.56 Forfeited/Cancelled (1) (819,635 ) 4.57 (73,625 ) 2.20 (241,110 ) 6.17 Unvested at end of year (5)(6) 2,946,800 $ 3.75 2,753,918 $ 3.69 2,752,054 $ 3.91 (1) Upon the resignation of Ocwen’s former Chief Executive Officer on June 30, 2018, 377,525 unvested stock units which would have been forfeited immediately were modified to allow continued vesting in accordance with the original terms. This had the equivalent effect of canceling the original award and granting a new award. (2) Stock units granted in 2018 include 983,010 units granted to Ocwen’s current Chief Executive Officer on the effective date of his employment, which was the closing date of the PHH acquisition. (3) The total intrinsic value of stock units vested, which is defined as the market value of the stock on the date of vesting, was $3.3 million , $4.6 million and $0.1 million for 2018 , 2017 and 2016 , respectively. (4) The total fair value of the stock units that vested during 2018 , 2017 and 2016 , based on grant-date fair value, was $2.2 million , $2.9 million and $0.9 million , respectively. (5) Excluding the 510,829 market-based stock awards that have not met their performance criteria, the net aggregate intrinsic value of stock awards outstanding at December 31, 2018 was $3.3 million . At December 31, 2018 , 377,806 , 40,000 and 93,023 stock units with a market condition for vesting based on an average common stock trading price of $16.26 , $11.72 and $5.80 respectively, had not yet met the market condition. (6) At December 31, 2018 , the weighted average remaining contractual term of share units outstanding was 2.46 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, 2018 2017 2016 Black-Scholes Monte Carlo Monte Carlo Monte Carlo Risk-free interest rate 2.79% – 3.14% 1.15% – 1.18% 1.12% – 1.18% 1.12% Expected stock price volatility (1) 67% 71% - 74% 71% - 77% 77% Expected dividend yield —% —% —% —% Expected life (in years) (2) 8.5 (3) (3) (3) Contractual life (in years) N/A N/A N/A N/A Fair value $1.53 - $2.96 $1.84 - $4.80 $2.00 - $4.80 $2.00 (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, 2018 2017 2016 Equity-based compensation expense Stock option awards $ (368 ) $ 1,457 $ 1,644 Stock awards 2,734 4,167 3,537 Excess tax benefit related to share-based awards 294 3,701 686 As of December 31, 2018 , unrecognized compensation costs related to non-vested stock options amounted to $0.9 million , which will be recognized over a weighted-average remaining requisite service period of 2.56 years . Unrecognized compensation costs related to non-vested stock units as of December 31, 2018 amounted to $5.0 million , which will be recognized over a weighted-average remaining life of 2.46 years. |
Business Segment Reporting
Business Segment Reporting | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Business Segment Reporting | Note 22 — Business Segment Reporting Our business segments reflect the internal reporting that we use to evaluate operating performance of services and to assess the allocation of our resources. A brief description of our current business segments is as follows: Servicing. This segment is primarily comprised of our core residential mortgage servicing business and currently accounts for most of our total revenues. 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 conventional and government-insured residential forward and reverse mortgage loans. 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. We originate loans directly with customers (retail channel) in forward lending as well as through our correspondent lending arrangements, broker relationships (wholesale) and retail channels of reverse mortgage lending. In 2017, we closed our forward correspondent lending channel and exited the forward wholesale lending business due to higher liquidity and capital requirements versus the available liquidity at the time. 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 corporate support services, CR Limited (CRL), our wholly-owned captive reinsurance subsidiary, discontinued operations and inactive entities, 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 and interest expense on corporate debt. 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. In January 2018, we decided to exit the ACS business and have liquidated our portfolio of inventory-secured loans to independent used car dealers. 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, 2018 Revenue (1) $ 951,224 $ 93,672 $ 18,149 $ — $ 1,063,045 Expenses (1) 772,467 82,906 77,123 — 932,496 Other income (expense): Interest income 5,383 6,061 2,582 — 14,026 Interest expense (214,172 ) (6,639 ) (54,230 ) — (275,041 ) Bargain purchase gain — 64,036 64,036 Gain on sale of mortgage servicing rights, net 1,325 — — — 1,325 Other, net (1) (3,241 ) 966 (4,096 ) — (6,371 ) Other income (expense), net (210,705 ) 388 8,292 — (202,025 ) Income (loss) from continuing operations before income taxes $ (31,948 ) $ 11,154 $ (50,682 ) $ — $ (71,476 ) 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, net (1) 4,049 (869 ) (6,348 ) — (3,168 ) Other income (expense), net (278,226 ) (3,848 ) (57,830 ) — (339,904 ) Income (loss) from continuing operations 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 8,492 — — — 8,492 Other, net (1) 15,812 1,065 (2,139 ) — 14,738 Other income (expense), net (333,218 ) 1,967 (39,019 ) — (370,270 ) Income (loss) from continuing operations before income taxes $ 3,364 $ 131 $ (209,856 ) $ — $ (206,361 ) Total Assets Servicing Lending Corporate Items and Other Corporate Eliminations Business Segments Consolidated December 31, 2018 $ 3,306,208 $ 5,603,481 $ 484,527 $ — $ 9,394,216 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 (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, 2018: Depreciation expense $ 4,601 $ 103 $ 22,498 $ 27,202 Amortization of debt discount — — 1,183 1,183 Amortization of debt issuance costs — — 2,921 2,921 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 |
Regulatory Requirements
Regulatory Requirements | 12 Months Ended |
Dec. 31, 2018 | |
Brokers and Dealers [Abstract] | |
Regulatory Requirements | Note 23 — Regulatory Requirements Our business is subject to extensive regulation by federal, state and local governmental authorities, including the Consumer Financial Protection Bureau (CFPB), 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 evolving regulatory environment in which we operate and to meet its requirements. 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 recognized $177.5 million in such third-party monitoring costs 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 (TCPA), 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, 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. Over the past decade, the general 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. As further described below and in Note 25 — Contingencies , in recent years Ocwen has entered into a number of significant settlements with federal and state regulators and state attorneys general that have imposed additional requirements on our business. For example, we have made various commitments relating to the process of moving loans off the REALServicing ® servicing system and onto Black Knight MSP, we have engaged a third-party auditor to perform an analysis with respect to our compliance with certain federal and state laws relating to the escrow of mortgage loan payments, we have revised various aspects of our complaint handling processes and we have extensive review and reporting obligations to various regulatory bodies with respect to various matters, including our financial condition. We devote significant management time and resources to compliance with these additional requirements. These requirements are generally unique to Ocwen and, while certain of our competitors may have entered into regulatory-related settlements of their own, our competitors are generally not subject to either the same specific or the same breadth of additional requirements to which we are subject. Ocwen has various subsidiaries 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, entry into a consent order, 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, 2018 . 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 25 — 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, 2018 . 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 $172.3 million at December 31, 2018 . In addition, a number of foreign laws and regulations apply 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. New York Department of Financial Services. In March 2017, we entered into a consent order with the NY DFS (the 2017 NY Consent Order) that provided for the termination of the engagement of a monitor appointed pursuant to an earlier 2014 consent order and for us to address certain concerns raised by the NY DFS that primarily relate to our servicing operations, as well as for us to comply with certain reporting and other obligations. In addition, in connection with the NY DFS’ approval in September 2018, of our acquisition of PHH, we agreed to satisfy certain post-closing requirements, including reporting obligations and record retention and other requirements relating to the transfer of loans collateralized by New York property (New York loans) onto Black Knight MSP and certain requirements with respect to the evaluation and supervision of management of both Ocwen Financial Corporation and PHH Mortgage Corporation. In addition, we are prohibited from boarding any additional loans onto the current REALServicing system and we must transfer all New York loans off the REALServicing system by April 30, 2020. The conditional approval also modified a preexisting restriction on our ability to acquire MSRs such that the restriction applies only to New York loans and, with respect to New York loans, provides that Ocwen may not increase its aggregate portfolio of New York loans serviced or subserviced by Ocwen by more than 2% per year (based on the unpaid principal balance of loans serviced at the prior calendar year-end). This restriction will remain in place until the NY DFS determines that all loans serviced on the REALServicing system have been successfully migrated to Black Knight MSP and that Ocwen has developed a satisfactory infrastructure to board sizable portfolios of MSRs. We continue to work with the NY DFS to address matters they continue to raise with us as well as to fulfill our commitments under the 2017 NY Consent Order and PHH acquisition conditional approval. To the extent that we fail to address adequately any concerns raised by the NY DFS or fail to fulfill our commitments to the NY DFS, the NY DFS could take regulatory action against us, including imposing fines or penalties or otherwise restricting our business activities. Any such actions could have a material adverse impact on our business, financial condition liquidity and results of operations. 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. In February 2017, we entered into another consent order with the CA DBO (the 2017 CA Consent Order) that terminated the 2015 CA Consent Order and resolved open matters between us and the CA DBO. 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. We have certain remaining reporting and other obligations under the 2017 CA Consent Order. Pursuant to the 2017 CA Consent Order, the CA DBO has engaged a third-party administrator who, at the expense of the CA DBO, has commenced work to confirm that Ocwen has completed certain commitments under the 2017 CA Consent Order. Still outstanding, however, is our completion of $198.0 million in debt forgiveness for California borrowers by June 30, 2019. As of December 31, 2018, we estimate that we have approximately $15.0 million of debt forgiveness remaining to complete. Based on internal forecasting, we currently believe that we will be able to complete this requirement by June 30, 2019. However, if we are unable to complete this requirement by the deadline or obtain an extension, the 2017 CA Consent Order obligates us to pay the remaining amount to the CA DBO in cash. Our debt forgiveness activities take place as we modify loans - our loan modifications are designed to be sustainable for homeowners while providing a net present value for mortgage loan investors that is superior to that of foreclosure. Debt forgiveness as part of a loan modification is determined on a case-by-case basis in accordance with the applicable servicing agreement. Debt forgiveness does not involve an expense to Ocwen other than the operating expense incurred in arranging the modification, which is part of Ocwen’s role as loan servicer. If the CA DBO were to allege that we failed to comply with our obligations under the 2017 CA Consent Order or that we otherwise were in breach of applicable laws, regulations or licensing requirements, the CA DBO could also take regulatory actions against us, including imposing fines or penalties or otherwise restricting our business activities. Any such actions could have a material adverse impact on our business, financial condition liquidity and results of operations. Separately, in June 2018, we entered into a consent order with the CA DBO in order to resolve a finding stemming from a lending examination of Homeward. Pursuant to the consent order, we consented to a finding that certain records maintained by Homeward were not in compliance with certain California statutory requirements. Homeward cooperated in the examination, timely produced requested documents and records, and confirmed that no borrowers were overcharged as a result. No fines or penalties were payable under the consent order. |
Commitments
Commitments | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments | Note 24 — 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, 2018 . This additional borrowing capacity is available on a scheduled or unscheduled payment basis. We also had short-term commitments to lend $132.1 million and $18.1 million in connection with our forward and reverse mortgage loan IRLCs, respectively, outstanding at December 31, 2018 . We finance originated and purchased forward and reverse mortgage loans with repurchase and participation agreements, commonly referred to as warehouse lines. HMBS Issuer Obligations As an HMBS issuer, we assume certain obligations related to each security issued. The most significant obligation is the requirement to purchase loans out of the Ginnie Mae securitization pools once the outstanding principal balance of the related HECM is equal to or greater than 98% of the maximum claim amount (MCA repurchases). Active repurchased loans are assigned to HUD and payment is received from HUD, typically within 60 days of repurchase. HUD reimburses us for the outstanding principal balance on the loan up to the maximum claim amount. We bear the risk of exposure if the amount of the outstanding principal balance on a loan exceeds the maximum claim amount. Inactive repurchased loans (the borrower is deceased, no longer occupies the property or is delinquent on tax and insurance payments) are generally liquidated through foreclosure and subsequent sale of REO. The timing and amount of our obligation with respect to MCA repurchases is uncertain as repurchase is dependent largely on circumstances outside of our control including the amount and timing of future draws and the status of the loan. MCA repurchases are expected to continue to increase due to the increased flow of HECMs and REO that are reaching 98% of their maximum claim amount. Activity with regard to HMBS repurchases, including MCA repurchases, follows: Active Inactive Total Number Amount Number Amount Number Amount Beginning balance, December 31, 2017 — $ — 137 $ 9,141 137 $ 9,141 Additions (1) 14 2,979 140 12,012 154 14,991 Recoveries, net (2) (2 ) (496 ) (27 ) (6,141 ) (29 ) (6,637 ) Transfers (2 ) (436 ) 2 436 — — Changes in value — — — (615 ) — (615 ) Ending balance, December 31, 2018 10 $ 2,047 252 $ 14,833 262 $ 16,880 (1) Total repurchases during the year ended December 31, 2018, includes 59 loans totaling $11.4 million related to MCA repurchases. (2) Includes amounts received upon assignment of loan to HUD, loan payoff, REO liquidation and claim proceeds less any amounts charged off as unrecoverable. Active loan repurchases are classified as Accounts receivable as reimbursement from HUD is generally received within 60 days and are initially recorded at fair value. Inactive loan repurchases are classified as Loans held for sale and are initially recorded at fair value. Loans are reclassified to REO in Other assets or Accounts receivable as the loans move through the resolution process and permissible claims are submitted to HUD for reimbursement. Loans held for sale repurchased prior to October 1, 2018 are carried at the lower of cost or fair value. Accounts receivable is valued at net realizable value. REO is valued at the estimated value of the underlying property less cost to sell. 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 are not 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. We are currently in the process of transitioning to Black Knight MSP from REALServicing. On February 22, 2019, Ocwen and Altisource S.à r.l (a subsidiary of Altisource) signed a Binding Term Sheet, which among other things, confirms Altisource’s cooperation with the de-boarding of loans from Altisource’s REALServicing servicing system to Black Knight’s MSP servicing system. The Binding Term Sheet also includes provisions regarding assuring that data is accurately transferred to Ocwen, including Ocwen having the ability to verify data accuracy and having continued access to the REALServicing system for an acceptable period of time. The Binding Term Sheet also amends certain provisions in the Services Agreements. After certain conditions have been met and where Ocwen has the right to select the services provider, Ocwen will use Altisource to provide the types of services that Altisource currently provides under the Services Agreements for at least 90% of services for all portfolios for which Ocwen is the servicer or subservicer, except that Altisource will be the provider for all such services for the portfolios: (i) acquired by Ocwen pursuant to loan servicing under agreements from Homeward (acquired in 2012) or assigned and assumed by Ocwen from Residential Capital, LLC, et al (assets acquired in 2013); and (ii) acquired from Ocwen, excluding certain portfolios in which PHH Corporation has an interest, by NRZ or its affiliates prior to the date of the Binding Term Sheet. Notwithstanding the foregoing, Altisource will be the provider of mortgage charge-off collections services under the Services Agreements. The Binding Term Sheet also sets forth a framework for negotiating additional service level changes in the future. As specified in the Binding Term Sheet, if Altisource fails certain performance standards for specified periods of time, then Ocwen may terminate Altisource as a provider for the applicable service(s), subject to Altisource’s right to cure. For certain claims arising from referrals received by Altisource after the effective date of the Binding Term Sheet, the provisions include reciprocal indemnification obligations in the event of negligence by either Party and Altisource’s indemnification obligations of Ocwen in the event of any breach by Altisource of its obligations under the Services Agreements. The limitations of liability provisions include an exception for losses either party suffers as a result of third party claims. 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 2025 exclusive of renewal option periods. Our annual aggregate minimum rental commitments under these leases are summarized as follows: 2019 $ 17,808 2020 16,674 2021 15,787 2022 13,971 2023 3,545 Thereafter 1,409 69,194 Less: Sublease income (4,744 ) Total minimum lease payments, net $ 64,450 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. In connection with PHH acquisition, we assumed the obligation for the lease agreements associated with certain facilities. The minimum rental commitments in the table above include facility lease obligations of $7.7 million , $7.1 million , $6.9 million and $6.6 million for the years 2019 , 2020 , 2021 and 2022 , respectively, related to agreements assumed in connection with the acquisition of PHH. We converted rental commitments for our facilities outside the U.S. to U.S. dollars using exchange rates in effect at December 31, 2018 . Rent expense for 2018 , 2017 and 2016 was $16.0 million , $17.9 million and $20.0 million , respectively. |
Contingencies
Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Note 25 — 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 TCPA, 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 TCPA, 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 currently a defendant in various matters alleging that (1) certain fees imposed on borrowers relating to payment processing, payment facilitation, or payment convenience violate the Fair Debt Collection Practices Act (FDCPA), (2) we violated the Telephone Consumer Protection Act by using an automated telephone dialing system to call class members’ cell phones without their consent, (3) we committed securities fraud in connection with certain of our public disclosures, (4) certain fees we assess on borrowers are marked up improperly in violation of applicable state and federal law, (5) the solicitation and marketing to borrowers of certain ancillary products was unfair and deceptive and (6) that we breached fiduciary duties we purportedly owe to benefit plans due to the discretion we exercise in servicing certain securitized mortgage loans. In the future, we are likely to become subject to other private legal proceedings alleging failures to comply with applicable laws and regulations, including putative class actions, in the ordinary course of our business. 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 $62.8 million at December 31, 2018 . We cannot currently estimate the amount, if any, of reasonably possible losses above amounts that have been recorded at December 31, 2018 . 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 (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 answered the operative complaint. Ocwen subsequently entered into an agreement in principle to resolve this matter, and in January 2019, the presiding court granted preliminary approval of the parties’ proposed class settlement. While Ocwen believes that it has sound legal and factual defenses, we 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. 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. Our accrual with respect to this matter is included in the $62.8 million legal and regulatory 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 TCPA. Generally, plaintiffs in these actions allege that Ocwen knowingly and willfully violated the TCPA by using an automated telephone dialing system to call class members’ cell phones without their consent. In July 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 (N.D. Ill.); Beecroft v. Ocwen Loan Servicing, LLC (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. In October 2017, the court preliminarily approved the settlement and, thereafter, we paid the settlement amount into an escrow account held by the settlement administrator. However, in September 2018, the Court denied the motion for final approval. In November 2018, the parties engaged in mediation to address the issues raised by the Court in its denial order. The parties thereafter reached a revised agreement, and in January 2019, the Court indicated it intended to grant the parties’ renewed motion for final approval, but to date has not yet done so. 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 the settlement of the consolidated securities fraud class action lawsuit that contained allegations in connection with the restatements of our 2013 and first quarter 2014 financial statements, among other matters, in the United States District Court for the Southern District of Florida captioned In re Ocwen Financial Corporation Securities Litigation (S.D. Fla.) (such consolidated lawsuit, the Securities Class Action). In December 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 March 2018 and April 2018, respectively, Ocwen was named as a defendant in two separate “opt-out” securities fraud actions brought on behalf of certain putative shareholders of Ocwen based on similar allegations to those contained in the Securities Class Action. See Brahman Partners et al. v. Ocwen Financial Corporation et al. (S.D. Fla.) and Owl Creek et al. v. Ocwen Financial Corporation et al. (S.D. Fla.). In February 2019, the parties entered into definitive settlement agreements to resolve both “opt-out” matters. The parties have alerted the presiding courts in both matters of their settlements, and the cases have been dismissed with prejudice. Our accrual with respect to these matters is included in the $58.2 million legal and regulatory accrual referenced above. While Ocwen believes that it has sound legal and factual defenses, we agreed to these settlements 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. We have previously disclosed that as a result of the federal and state regulatory actions taken in April 2017 and shortly thereafter, which are 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. (S.D. Fla.). In April 2018, the court in Carvelli granted our motion to dismiss, and dismissed the consolidated case with prejudice. Plaintiffs thereafter filed a notice of appeal, and that appeal remains pending. Ocwen and the other defendants intend to defend themselves vigorously. Additional lawsuits may be filed against us in relation to these matters. At this time, Ocwen is unable to predict the outcome of this existing lawsuit 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. If additional lawsuits are filed, Ocwen intends to vigorously defend itself against such lawsuits. If our efforts to defend the existing lawsuit or any future lawsuit are not successful, our business, financial condition, liquidity and results of operations could be materially and adversely affected. Over the past several years, lawsuits have been filed by RMBS trust investors alleging that the trustees and master servicers breached their contractual and statutory duties by (i) failing to require loan servicers to abide by their contractual obligations; (ii) failing to declare that certain alleged servicing events of default under the applicable contracts occurred; and (iii) failing to demand that loan sellers repurchase allegedly defective loans, among other things. Ocwen has received several letters from trustees and master servicers purporting to put Ocwen on notice that the trustees and master servicers may ultimately seek indemnification from Ocwen in connection with the litigations. Ocwen has not yet been impleaded into any of these cases, but it has produced and continues to produce documents to the parties in response to third-party subpoenas. Ocwen has, however, been impleaded as a third-party defendant into five consolidated loan repurchase cases first filed against Nomura Credit & Capital, Inc. in 2012 and 2013. Ocwen is vigorously defending itself in those cases against allegations by the mortgage loan seller-defendant that Ocwen failed to inform its contractual counterparties that it had discovered defective loans in the course of servicing them and had otherwise failed to service the loans in accordance with accepted standards. Ocwen is unable at this time to predict the ultimate outcome of these matters, the possible loss or range of loss, if any, associated with the resolution of these matters 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, several 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. Previously, 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 trial court dismissed the RMBS investors’ suit with prejudice in 2018. The RMBS investors thereafter appealed the court’s dismissal, and on February 13, 2019, the appellate court affirmed the trial court’s dismissal. It is unknown whether the RMBS investors will attempt to further appeal this matter; Ocwen will continue to vigorously defend itself. 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 In April 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. Our accrual with respect to this matter is included in the $62.8 million legal and regulatory accrual referenced above. The outcome of the matters raised by the CFPB, whether through negotiated settlements, court rulings or otherwise, 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, entry into a consent order, 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, payments of monetary amounts and other agreements in order to settle issues identified in connection with examinations or other oversight activities, and such resolutions could have material and adverse effects on our business, reputation, operations, results of operations and financial condition. In April 2017 and shortly thereafter, mortgage and banking regulatory agencies from 29 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. An additional state regulator brought legal action together with that state’s attorney general, as described below. 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, Liberty, OFSPL and Ocwen Business Solutions, Inc. (OBS). We entered into agreements with all 29 states plus the District of Columbia to resolve these regulatory actions. These agreements generally contained the following key terms (the Multi-State Common Settlement Terms): • Ocwen would not acquire any new residential MSRs until April 30, 2018. • Ocwen would develop a plan of action and milestones regarding its transition from the REALServicing servicing system to an alternate servicing system and, with certain exceptions, would not board any new loans onto the REALServicing system. • In the event that Ocwen chose to merge with or acquire an unaffiliated company or its assets in order to effectuate a transfer of loans from the REALServicing system, Ocwen was required to comply with regulatory notice and waiting period requirements. • Ocwen would 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 would develop corrective action plans for any errors identified by the third-party auditor. • Ocwen would develop and submit for review a plan to enhance our consumer complaint handling processes. • Ocwen would 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 additional communications with and for borrowers, certain restrictions, certain review, reporting and remediation obligations, and the following additional terms: • Ocwen agreed with the Connecticut Department of Banking 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 Office of the Commissioner of Financial Regulation, Ocwen agreed to complete an independent management assessment and enterprise risk assessment 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. • Ocwen agreed with the Massachusetts Division of Banks to pay $1.0 million to the Commonwealth of Massachusetts Mortgage Education Trust. Ocwen and the Massachusetts regulatory agency also agreed on a schedule pursuant to which we will regain eligibility to acquire residential MSRs on Massachusetts loans (including loans originated by Ocwen) as it meets certain thresholds in its transition to a new servicing system. All restrictions on Massachusetts MSR acquisitions will be lifted when Ocwen completes the second phase of a three-phase data integrity audit which will be conducted by an independent third-party following completion of Ocwen’s servicing system transition. The first phase of this audit, which was required to be completed prior to transitioning any Massachusetts loans to a new servicing system, has already been completed. • Ocwen agreed with the Nebraska Department of Banking and Finance until April 30, 2019, to limit its growth through acquisition from correspondent relationships to no more than ten percent per year for Nebraska loans (based on the total number of loans held at the prior calendar year-end). Accordingly, we have now resolved all of the administrative actions (but not all of the legal actions, which are described below) taken by state regulators in April 2017. We have taken substantial steps toward fulfilling our commitments under the agreements described above, including transferring loans to Black Knight MSP, developing and implementing certain enhancements to our consumer complaint process, engaging a third-party auditor who is currently performing escrow-related testing, and complying with our other information sharing and reporting obligations. In April 2017 and shortly thereafter, 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. 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. Previously, 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. 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 above amounts currently accrued. Our accrual with respect to the administrative and legal actions initiated in April 2017 is included in the $62.8 million litigation and regulatory matters accrual referenced above. We will also incur costs complying with the terms of the settlements we have entered into, including in connection with the escrow review and transition to a new servicing system. For example, with respect to the escrow review, which is currently underway, we will incur remediation costs to the extent that errors are identified which require remediation. If we fail to comply with the terms of our settlements, additional administrative or legal regulatory actions could be taken against us. Such actions could have a materially adverse impact on our business, reputation, financial condition, liquidity and results of operations. Certain of the state regulators’ cease and desist orders referenced 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. Ocwen responded to the MOU items and continues to provide certain reports and other information pursuant to the MOU. There were no monetary or other penalties imposed under the MOU. However, the MOU prohibited us from repurchasing stock during the development of a going forward plan and, thereafter, except as permitted by the plan. We prepared and submitted a plan that contained no stock repurchase restrictions and, therefore, we do not believe we are currently restricted from repurchasing stock. However, the MMC may not agree with our interpretation. For this reason, and on the basis of our progress to date responding to our obligations under the MOU, we have requested that the MOU be terminated. To the extent that we cannot terminate the MOU, we may remain subject to a share repurchase restriction and continued reporting obligations. On occasion, we engage with agencies of the federal government on vari |
Quarterly Results of Operations
Quarterly Results of Operations (Unaudited) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Results of Operations (Unaudited) | Note 26 — Quarterly Results of Operations (Unaudited) Quarters Ended December 31, 2018 (1) September 30, June 30, March 31, Revenue $ 310,929 $ 238,278 $ 253,581 $ 260,257 Expenses 302,819 217,526 205,650 206,501 Other expense, net (2) (15,873 ) (61,025 ) (76,336 ) (48,791 ) Income (loss) from continuing operations before income taxes (7,763 ) (40,273 ) (28,405 ) 4,965 Income tax expense (benefit) (4,012 ) 845 1,348 2,348 Income (loss) from continuing operations (3,751 ) (41,118 ) (29,753 ) 2,617 Income from discontinued operations, net of income taxes 1,409 — — — Net income (loss) (2,342 ) (41,118 ) (29,753 ) 2,617 Net income attributable to non-controlling interests — (29 ) (78 ) (69 ) Net income (loss) attributable to Ocwen stockholders $ (2,342 ) $ (41,147 ) $ (29,831 ) $ 2,548 Earnings (loss) per share attributable to Ocwen stockholders - Basic and Diluted Continuing operations $ (0.03 ) $ (0.31 ) $ (0.22 ) $ 0.02 Discontinued operations 0.01 — — — $ (0.02 ) $ (0.31 ) $ (0.22 ) $ 0.02 (1) The quarter ended December 31, 2018 includes the results of operations of PHH from the acquisition date of October 4, 2018 through December 31, 2018. See Note 2 — Business Acquisition for additional information. (2) Includes a bargain purchase gain, net of tax, of $64.0 million recognized during the quarter ended December 31, 2018 in connection with the acquisition of PHH. 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 and Diluted Continuing operations $ (0.34 ) $ (0.05 ) $ (0.36 ) $ (0.26 ) Discontinued operations $ — $ — $ — $ — $ (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 MSR valuation adjustments, net) during the quarter ended December 31, 2017. This reflected 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. |
Organization, Business Enviro_2
Organization, Business Environment, Basis of Presentation and Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
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 subsidiaries, Ocwen Mortgage Servicing, Inc. (OMS) and PHH Corporation (PHH), and directly or indirectly owns all of the outstanding stock of its other primary operating subsidiaries: Ocwen Loan Servicing, LLC (OLS), PHH Mortgage Corporation (PMC), 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 advances for certain property tax and insurance premium payments, default and property maintenance payments and principal and interest payments on behalf of delinquent borrowers to mortgage loan investors before recovering 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 mortgages. The GSEs or Ginnie Mae guarantee these mortgage securitizations. We originate Home Equity Conversion Mortgages (HECM, or reverse mortgages) that are insured by the FHA and are an approved issuer of Home Equity Conversion Mortgage-Backed Securities (HMBS) that are guaranteed by Ginnie Mae. We had a total of approximately 7,200 employees at December 31, 2018 of which approximately 4,100 were located in India and approximately 500 were based in the Philippines. Our operations in India and the Philippines primarily provide internal support services 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, 2018 . |
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. Our statements of operations and consolidated balance sheets include the accounts and results of PHH Corporation and its subsidiaries from the acquisition date of October 4, 2018 through December 31, 2018. See Note 2 — Business Acquisition for additional information. 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 Certain amounts in the consolidated balance sheet at December 31, 2017, consolidated statements of operations for 2017 and 2016, and consolidated statements of cash flows for 2017 and 2016 have been reclassified to conform to the current year presentation as follows: December 31, 2017 Balance sheet From Other assets Debt service accounts $ 33,726 Other restricted cash 9,179 To Restricted cash 42,905 Years ended December 31, 2017 2016 Statements of Operations From Servicing and origination expense Impairment charge (reversal) on MSRs $ (3,366 ) $ 10,813 Loss on valuation of MSRs, at fair value 4,540 80,238 From Amortization of MSRs 51,788 32,978 To MSR valuation adjustments, net 52,962 124,029 Statements of Cash Flows Operating activities From Amortization of MSRs $ 51,788 $ 32,978 From Loss on valuation of MSRs, at fair value 4,540 80,238 From Impairment charge (reversal) on MSRs (3,366 ) 10,813 To MSR valuation adjustments, net 52,962 124,029 From Realized and unrealized gains on derivative financial instruments 191 1,724 To Other, net 191 1,724 Investing activities From Other, net 3,147 11,069 To Proceeds from sale of real estate 3,147 11,069 These reclassifications had no impact on total assets in our consolidated balance sheet, total expenses in our consolidated statements of operations or cash flows from operating, investing or financing activities in our consolidated statements of cash flows. |
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 the assets acquired and liabilities assumed in connection with the PHH acquisition, fair value measurements, income taxes, the provision for potential losses that may arise from litigation proceedings, 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. |
Restricted Cash | Restricted Cash Restricted cash includes amounts specifically designated to repay debt, to provide over-collateralization for secured borrowings and match funded debt facilities, and to provide additional collateral to support certain obligations, including letters of credit. |
Mortgage Servicing Rights (MSR) | Mortgage Servicing Rights 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 unpaid principal balance (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. To the extent any portfolio contract is not expected to compensate us adequately for performing the servicing, we would recognize a servicing liability. 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 (MSR valuation adjustments, net) 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 (MSR valuation adjustments, net) in the period in which the changes occur. 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. Effective with this election, our entire portfolio of MSRs is accounted for using the fair value measurement method. We recorded a cumulative-effect adjustment of $82.0 million to retained earnings as of January 1, 2018 to reflect the excess of the fair value over the carrying amount. See Note 8 — Mortgage Servicing for additional information. 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. In addition to servicing and subservicing fees, we also report late fees, prepayment penalties, float earnings and other ancillary fees as revenue in Servicing and subservicing fees in our consolidated statements of operations. 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 (Servicing and origination expense) to the extent we believe that a portion of advances are uncollectible under the provisions of each servicing contract taking into consideration, among other factors, probability of cure or modification, length of delinquency and the amount of the advance. 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 continually assess collectibility using proprietary cash flow projection models that incorporate a number of different factors, depending on the characteristics of the mortgage loan or pool, including, for example, estimated time to a foreclosure sale, estimated costs of foreclosure action, estimated future property tax payments and the estimated value of the underlying property net of estimated carrying costs, commissions and closing costs. |
Loans Held for Sale | Loans Held for Sale Loans held for sale include 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. For loans we measure at the lower of cost or fair value, 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 Gain on loans held for sale, net in the statement of operations as incurred and are not capitalized. Premiums on loans purchased via the correspondent channel are capitalized upon origination because they represent part of the purchase price. However, the loans are subsequently measured at fair value on a recurring basis. 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 revenue, net 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 any 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 in Professional services expense in the consolidated statement of operations as 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 (as further clarified by FASB ASU 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 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. We finalized our provisional amounts recognized under SAB 118 in the fourth quarter of 2018. See Note 19 — Income Taxes for additional information. |
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 as of the date our financial statements were issued, 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 recognizes 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 shall 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 FASB 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 did not have a material impact on our consolidated financial statements. Leases (ASU 2016-02, ASU 2018-10 and ASU 2018-11) This ASU requires 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. We adopted the new leasing guidance on January 1, 2019 by applying the guidance at the adoption date with a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. We currently expect the transition adjustment to result in an insignificant adjustment to the opening balance of retained earnings and we estimate that we will increase both our total assets and total liabilities by approximately $60 million , representing the gross recognition of the right-of-use assets and lease liabilities. We elected a package of practical expedients which provided us transition relief when assessing leases that commenced prior to the adoption date, including determining whether existing contracts are or contain leases, the classification of such leases as operating or financing, and the accounting for initial direct costs. For short-term leases, we recognize lease payments on a straight-line basis over the lease term and variable lease payments in the period in which the obligation for those payments is incurred. Our current minimum commitments under noncancelable operating leases as of December 31, 2018 are described in Note 24 — Commitments . 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. 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 did not have a material impact on our consolidated financial statements. The amendments in this update have been applied using a retrospective transition method to each period presented. Our revision of the consolidated statements of cash flows for the years ended December 31, 2017 and 2016 to conform to the new standard resulted in a decrease in Net cash provided by operating activities of $2.9 million and $53.4 million , respectively (reduction in the line item Decrease in receivables and other assets, net). 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. Our adoption of this standard on January 1, 2019 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 did not 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 Act (or portion thereof) is recorded. Our adoption of this standard on January 1, 2019 did not have a material impact on our consolidated financial statements. Accounting Standards Issued but Not Yet Adopted 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. Fair Value Measurement: Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement (ASU 2018-13) This ASU modifies the disclosure requirements on fair value measurements in FASB ASC Topic 820, Fair Value Measurement. The main provisions in this update include removal of the following disclosure requirements from this ASC: 1) the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, 2) the policy for timing of transfers between levels and 3) the valuation processes for Level 3 fair value measurements. This standard adds disclosure requirements to report the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period, and for certain unobservable inputs an entity may disclose other quantitative information in lieu of the weighted average if the entity determines that other quantitative information would be a more reasonable and rational method to reflect the distribution of unobservable inputs used to develop Level 3 fair value measurements. This standard will be effective for us on January 1, 2020, with early application permitted on any removed or modified disclosures and to be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption, and to allow a delayed adoption of the additional disclosures until the effective date. We are currently evaluating the effect of adopting this standard. Intangibles - Goodwill and Other - Internal-Use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (ASU 2018-15) This ASU aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal use software license). The accounting for the service element of a hosting arrangement that is a service contract is not affected by the amendments in this ASU. The amendments in this ASU require an entity (customer) in a hosting arrangement that is a service contract to follow the guidance to determine which implementation costs to capitalize as an asset related to the service contract and which costs to expense. The amendments in this ASU require the entity (customer) to expense the capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement. The amendments in this ASU also require the entity to present the expense related to the capitalized implementation costs in the same line item in the statement of operations as the fees associated with the hosting element (service) of the arrangement and classify payments for capitalized implementation costs in the statement of cash flows in the same manner as payments made for fees associated with the hosting element. This standard will be effective for us on January 1, 2020, with early adoption permitted, including adoption in any interim period. The amendments in this ASU should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. We are currently evaluating the effect of adopting this standard. |
Organization, Business Enviro_3
Organization, Business Environment, Basis of Presentation and Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Reclassifications of Prior Period Amounts to Confirm with Current Period Presentation | Certain amounts in the consolidated balance sheet at December 31, 2017, consolidated statements of operations for 2017 and 2016, and consolidated statements of cash flows for 2017 and 2016 have been reclassified to conform to the current year presentation as follows: December 31, 2017 Balance sheet From Other assets Debt service accounts $ 33,726 Other restricted cash 9,179 To Restricted cash 42,905 Years ended December 31, 2017 2016 Statements of Operations From Servicing and origination expense Impairment charge (reversal) on MSRs $ (3,366 ) $ 10,813 Loss on valuation of MSRs, at fair value 4,540 80,238 From Amortization of MSRs 51,788 32,978 To MSR valuation adjustments, net 52,962 124,029 Statements of Cash Flows Operating activities From Amortization of MSRs $ 51,788 $ 32,978 From Loss on valuation of MSRs, at fair value 4,540 80,238 From Impairment charge (reversal) on MSRs (3,366 ) 10,813 To MSR valuation adjustments, net 52,962 124,029 From Realized and unrealized gains on derivative financial instruments 191 1,724 To Other, net 191 1,724 Investing activities From Other, net 3,147 11,069 To Proceeds from sale of real estate 3,147 11,069 |
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 |
Business Acquisitions (Tables)
Business Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Schedule of Purchase Price Allocation of Assets Acquired and Liabilities Assumed | Purchase Price Allocation October 4, 2018 Cash $ 423,088 Restricted cash 38,813 Mortgage servicing rights 518,127 Advances, net 96,163 Loans held for sale 42,324 Receivables, net 46,838 Premises and equipment, net 15,203 Real estate owned 3,289 Other assets 6,293 Assets related to discontinued operations 2,017 Financing liabilities (MSRs pledged, at fair value) (481,020 ) Other secured borrowings, net (27,594 ) Senior notes, net (Senior unsecured notes) (120,624 ) Accrued legal fees and settlements (9,960 ) Other accrued expenses (36,889 ) Loan repurchase and indemnification liability (27,736 ) Unfunded pension liability (9,815 ) Other liabilities (34,131 ) Liabilities related to discontinued operations (21,954 ) Total identifiable net assets 422,432 Total consideration paid to seller (358,396 ) Bargain purchase gain $ 64,036 |
Schedule of Post Acquisition Results of Operations | The following table presents the results of operations of PHH that are included in our consolidated statements of operations from the acquisition date of October 4, 2018 through December 31, 2018: Revenues $ 72,487 Expenses 84,877 Other income (expense) (19,132 ) Income tax benefit (6,711 ) Net loss from continuing operations $ (24,811 ) |
Schedule of Pro Forma Results of Operations | 2018 2017 (Unaudited) (Unaudited) Revenues $ 1,305,972 $ 1,785,408 Loss from continuing operations, net of tax attributable to Ocwen common stockholders $ (201,382 ) $ (356,824 ) |
Schedule of Discontinued Operations | The results of discontinued operations for the post-acquisition period (October 4, 2018, through December 31, 2018) are summarized below: Net revenues $ 413 Total expenses (1) (996 ) Income before income taxes 1,409 Income tax expense (benefit) — Income from discontinued operations $ 1,409 (1) Total expenses are shown net of a severance expense reversal that occurred as a result of voluntary post-acquisition employee departures and amortization of facility exit costs. There was no gain or loss directly attributed to the completion of the disposal of these businesses. Assets and Liabilities The carrying amounts of major classes of assets and liabilities related to discontinued operations consisted of the following at December 31, 2018: Assets Mortgage loans held for sale $ 650 Accounts receivable, net 144 Total assets related to discontinued operations $ 794 Liabilities Other liabilities (1) 18,265 Total liabilities related to discontinued operations $ 18,265 (1) The primary component of Other liabilities is an exit cost liability which includes $14.9 million of facility exit costs related to vacating certain facilities. |
Securitizations and Variable _2
Securitizations and Variable Interests Entities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 2017 2016 Proceeds received from securitizations $ 1,290,682 $ 3,256,625 $ 5,197,071 Servicing fees collected 45,046 41,509 14,616 Purchases of previously transferred assets, net of claims reimbursed (4,395 ) (5,948 ) (1,271 ) $ 1,331,333 $ 3,292,186 $ 5,210,416 |
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, 2018 2017 Carrying value of assets MSRs ($132,774 and $227 carried at fair value) $ 132,774 $ 98,059 Advances and match funded advances 138,679 57,636 UPB of loans transferred 15,600,971 12,077,635 Maximum exposure to loss $ 15,872,424 $ 12,233,330 |
Fair Value (Tables)
Fair Value (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 2017 Level Carrying Value Fair Value Carrying Value Fair Value Financial assets: Loans held for sale: Loans held for sale, at fair value (a) 2 $ 176,525 $ 176,525 $ 214,262 $ 214,262 Loans held for sale, at lower of cost or fair value (b) 3 66,097 66,097 24,096 24,096 Total Loans held for sale $ 242,622 $ 242,622 $ 238,358 $ 238,358 Loans held for investment, at fair value Loans held for investment - Reverse mortgages (a) 3 $ 5,472,199 $ 5,472,199 $ 4,715,831 $ 4,715,831 Loans held for investment - Restricted for securitization investors (a) 3 26,520 26,520 — — Total loans held for investment 5,498,719 5,498,719 4,715,831 4,715,831 Advances (including match funded) (c) 3 1,186,676 1,186,676 1,356,393 1,356,393 Automotive dealer financing notes (including match funded) (c) 3 — — 32,757 32,590 Receivables, net (c) 3 198,262 198,262 199,529 199,529 Mortgage-backed securities, at fair value (a) 3 1,502 1,502 1,592 1,592 U.S. Treasury notes (a) 1 1,064 1,064 1,567 1,567 Corporate bonds (a) 2 450 450 313 313 Financial liabilities: Match funded liabilities (c) 3 $ 778,284 $ 776,485 $ 998,618 $ 992,698 Financing liabilities: HMBS-related borrowings, at fair value (a) 3 $ 5,380,448 $ 5,380,448 $ 4,601,556 $ 4,601,556 Financing liability - MSRs pledged, at fair value (a) 3 1,032,856 1,032,856 508,291 508,291 Financing liability - Owed to securitization investors, at fair value (a) 3 24,815 24,815 — — Other (c) 3 69,942 53,570 85,227 65,202 Total Financing liabilities $ 6,508,061 $ 6,491,689 $ 5,195,074 $ 5,175,049 Other secured borrowings: Senior secured term loan (c) (d) 2 $ 226,825 $ 227,449 $ 290,068 $ 299,741 Other (c) 3 155,713 155,713 255,782 255,782 Total Other secured borrowings $ 382,538 $ 383,162 $ 545,850 $ 555,523 December 31, 2018 2017 Senior notes: Senior unsecured notes (c) (d) 2 $ 119,924 $ 119,258 $ 3,122 $ 2,872 Senior secured notes (c) (d) 2 328,803 306,889 344,216 355,550 Total Senior notes $ 448,727 $ 426,147 $ 347,338 $ 358,422 Derivative financial instrument assets (liabilities), at fair value (a): Interest rate lock commitments 2 $ 3,871 $ 3,871 $ 3,283 $ 3,283 Forward mortgage-backed securities 1 (4,983 ) (4,983 ) (545 ) (545 ) Interest rate caps 3 678 678 2,056 2,056 Mortgage servicing rights: Mortgage servicing rights, at fair value (a) 3 $ 1,457,149 $ 1,457,149 $ 671,962 $ 671,962 Mortgage servicing rights, at amortized cost (e) 3 — — 336,882 418,745 Total Mortgage servicing rights $ 1,457,149 $ 1,457,149 $ 1,008,844 $ 1,090,707 (a) Measured at fair value on a recurring basis. (b) Measured at fair value on a non-recurring basis. (c) Disclosed, but not measured, at fair value. (d) The carrying values are net of unamortized debt issuance costs and discount. See Note 13 — Borrowings for additional information . (e) 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. The balance at December 31, 2017 includes the impaired government-insured stratum of amortization method MSRs, which was measured at fair value on a non-recurring basis and reported net of the valuation allowance. At December 31, 2017 , the carrying value of this stratum was $158.0 million before applying the valuation allowance of $24.8 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 Loans Held for Inv. - Restricted for Securitiza- Financing Liability - Owed to Securitiza - Mortgage-Backed Securities Financing Liability - MSRs Pledged Derivatives MSRs Year Ended December 31, 2018 Beginning balance $ 4,715,831 $ (4,601,556 ) $ — $ — $ 1,592 $ (508,291 ) $ 2,056 $ 671,962 Purchases, issuances, sales and settlements Purchases — — — — — (667 ) 95 13,712 Recognized (assumed) in connection with the acquisition of PHH — — — — — (481,020 ) — 518,127 Issuances (1) 920,476 (948,917 ) — — — (279,586 ) — — Consolidation of mortgage-backed securitization trusts — — 28,373 (26,643 ) — — — — Sales — — — — — — — (6,240 ) Settlements (400,521 ) 391,985 (1,853 ) 1,828 — 211,766 (371 ) (5,880 ) Loans Held for Investment - Reverse Mortgages HMBS-Related Borrowings Loans Held for Inv. - Restricted for Securitiza- Financing Liability - Owed to Securitiza - Mortgage-Backed Securities Financing Liability - MSRs Pledged Derivatives MSRs Year Ended December 31, 2018 Transfers (to) from: MSRs carried at amortized cost, net of valuation allowance — — — — — — — 418,925 Loans held for sale, at fair value (1,039 ) — — — — — — — Receivables, net (158 ) — — — — — — — Other assets (411 ) — — — — — — — 518,347 (556,932 ) 26,520 (24,815 ) — (549,507 ) (276 ) 938,644 Total realized and unrealized gains (losses) (2) Included in earnings (1): Change in fair value 238,021 (221,960 ) — — (90 ) 19,269 (1,102 ) (153,457 ) Calls and other — — — — — 5,673 — — Included in Other comprehensive income — — — — — — — — 238,021 (221,960 ) — — (90 ) 24,942 (1,102 ) (153,457 ) Transfers in and / or out of Level 3 — — — — — — — — Ending balance $ 5,472,199 $ (5,380,448 ) $ 26,520 $ (24,815 ) $ 1,502 $ (1,032,856 ) $ 678 $ 1,457,149 Loans Held for Investment - Reverse Mortgages HMBS-Related Borrowings Mortgage-Backed Securities Financing Liability - MSRs Pledged Derivatives MSRs Year Ended December 31, 2017 Beginning balance $ 3,565,716 $ (3,433,781 ) $ 8,342 $ (477,707 ) $ 1,836 $ 679,256 Purchases, issuances, sales and settlements Purchases — — — — 655 — Issuances 1,277,615 (1,281,543 ) — (54,601 ) — (2,214 ) Sales — — — — — (540 ) Settlements (444,388 ) 418,503 — 59,190 (445 ) — Transfers (to) from: Loans held for sale, at fair value (3,803 ) — — — — — Receivables, net (3,583 ) — — — — — Other assets (1,929 ) — — — — — 823,912 (863,040 ) — 4,589 210 (2,754 ) 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 ) Calls and other — — — 6,109 — — Included in Other comprehensive income — — — — — — 326,203 (304,735 ) (6,750 ) (35,173 ) 10 (4,540 ) Transfers in and / or out of Level 3 — — — — — — Ending balance $ 4,715,831 $ (4,601,556 ) $ 1,592 $ (508,291 ) $ 2,056 $ 671,962 Loans Held for Investment - Reverse Mortgages HMBS-Related Borrowings Mortgage-Backed Securities Financing Liability - MSRs Pledged Derivatives MSRs Year Ended December 31, 2016 Beginning balance $ 2,488,253 $ (2,391,362 ) $ 7,985 $ (541,704 ) $ 2,042 $ 761,190 Purchases, issuances, sales and settlements Purchases — — — — 1,337 — Issuances 1,107,046 (1,086,795 ) — — — (1,548 ) Sales — — — — — (148 ) Settlements (243,596 ) 230,045 — 63,997 (156 ) — 863,450 (856,750 ) — 63,997 1,181 (1,696 ) Total realized and unrealized gains (losses) Included in earnings Change in fair value 214,013 (185,669 ) 357 — (1,387 ) (80,238 ) Included in Other comprehensive income — — — — — — 214,013 (185,669 ) 357 — (1,387 ) (80,238 ) Transfers in and / or out of Level 3 — — — — — — Ending balance $ 3,565,716 $ (3,433,781 ) $ 8,342 $ (477,707 ) $ 1,836 $ 679,256 (1) On January 18, 2018, Ocwen received a lump-sum payment of $279.6 million in accordance with terms of the agreements with NRZ. A $16.6 million reduction in the fair value of the Financing Liability - MSRs Pledged was recognized in connection with the receipt of the lump-sum payment. See Note 9 — Rights to MSRs . (2) 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 . A reduction in the fair value of the Financing Liability - MSRs Pledged of $37.6 million was recognized at the time of the initial transfer of the MSRs. See Note 9 — Rights to MSRs . (3) Total gains (losses) attributable to derivative financial instruments still held at December 31, 2018 and 2017 and 2016 were $(1.1) million, $0.1 million and $0.3 million for 2018 , 2017 and 2016 , respectively. Total losses for 2018 , 2017 and 2016 attributable to MSRs still held at December 31, 2018 , 2017 and 2016 were $153.5 million , $4.5 million and $78.3 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 2018 2017 Life in years Range 3.0 to 7.6 4.4 to 8.1 Weighted average 5.9 6.4 Conditional repayment rate Range 6.8% to 38.4% 5.4% to 51.9% Weighted average 14.7 % 13.1 % Discount rate 3.4 % 3.2 % |
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 | Significant valuation assumptions December 31, 2017 Weighted average prepayment speed 8.8 % Weighted average delinquency rate 10.9 % Advance financing cost 5-year swap Interest rate for computing float earnings 5-year swap Weighted average discount rate 9.2 % Weighted average cost to service (in dollars) $ 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 2018 2017 Agency Non-Agency Agency Non-Agency Weighted average prepayment speed 8.5 % 15.4 % 8.1 % 16.6 % Weighted average delinquency rate 6.6 % 27.1 % 1.0 % 28.5 % Advance financing cost 5-year swap 5-yr swap plus 2.75% 5-year swap 5-yr swap plus 2.75% Interest rate for computing float earnings 5-year swap 5-yr swap minus 0.50% 5-year swap 5-yr swap minus 0.50% Weighted average discount rate 9.1 % 12.8 % 9.0 % 13.0 % Weighted average cost to service (in dollars) $ 90 $ 297 $ 64 $ 305 |
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 | Significant valuation assumptions December 31, 2017 Weighted average life in months 2.2 Average note rate 8.5 % Discount rate 10.0 % Loan loss rate 21.5 % |
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 2018 2017 Life in years Range 3.0 to 7.6 4.4 to 8.1 Weighted average 5.9 6.4 Conditional repayment rate Range 6.8% to 38.4% 5.4% to 51.9% Weighted average 14.7 % 13.1 % Discount rate 3.3 % 3.11 % |
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 2018 2017 Weighted average prepayment speed 13.9 % 17.0 % Weighted average delinquency rate 20.3 % 28.9 % Advance financing cost 5-year swap plus 0% to 2.75% 5-year swap plus 2.75% Interest rate for computing float earnings 5-year swap minus 0% to 0.50% 5-year swap minus 0.50% Weighted average discount rate 12.0 % 13.7 % Weighted average cost to service (in dollars) $ 234 $ 311 |
Loans Held for Sale (Tables)
Loans Held for Sale (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
Summary of Activity in Balance of Loans Held for Sale, at Fair Value | Loans Held for Sale - Fair Value Years Ended December 31, 2018 2017 2016 Beginning balance $ 214,262 $ 284,632 $ 309,054 Originations and purchases 944,627 2,678,372 4,211,871 Proceeds from sales (1,019,211 ) (2,785,422 ) (4,236,158 ) Principal collections (20,774 ) (4,867 ) (11,620 ) Acquired in connection with the acquisition of PHH 42,324 — — Transfers from (to): Loans held for investment, at fair value 1,038 3,803 — Loans held for sale - Lower of cost or fair value — — 3,266 Receivables (1,132 ) — — Real estate owned (Other assets) (1,886 ) — — Gain on sale of loans 34,724 35,429 13,421 Increase (decrease) in fair value of loans (13,435 ) 151 (7,030 ) Other (4,012 ) 2,164 1,828 Ending balance (1) $ 176,525 $ 214,262 $ 284,632 (1) At December 31, 2018 , 2017 and 2016 , the balances include $(7.2) million , $5.0 million and $4.9 million , respectively, of fair value adjustments. |
Summary of Activity in Balance of Loans Held for Sale, at Lower of Cost or Fair Value | Loans Held for Sale - Lower of Cost or Fair Value Years Ended December 31, 2018 2017 2016 Beginning balance $ 24,096 $ 29,374 $ 104,992 Purchases 770,563 1,016,791 1,878,561 Proceeds from sales (569,718 ) (861,569 ) (1,699,427 ) Principal collections (15,413 ) (10,207 ) (22,607 ) Transfers from (to): Receivables, net (155,586 ) (171,797 ) (256,336 ) Real estate owned (Other assets) (2,355 ) (875 ) (7,675 ) Loans held for sale - Fair value — — (3,266 ) Gain on sale of loans 3,659 11,683 24,565 (Increase) decrease in valuation allowance (4,251 ) 2,746 4,594 Other 15,102 7,950 5,973 Ending balance (1) $ 66,097 $ 24,096 $ 29,374 (1) At December 31, 2018 , 2017 and 2016 , the balances include $51.8 million , $19.6 million and $24.8 million , respectively, of loans that we repurchased from Ginnie Mae guaranteed securitizations pursuant to Ginnie Mae servicing guidelines. We may repurchase loans that have been modified, to facilitate loss reduction strategies, or as otherwise obligated as a Ginnie Mae servicer. Repurchased loans may be modified or otherwise remediated through loss mitigation activities, may be sold to a third party, or are reclassified to receivables. |
Summary of Changes in Valuation Allowance of Loans Held for Sale | Valuation Allowance - Loans Held for Sale at Lower of Cost or Fair Value Years Ended December 31, 2018 2017 2016 Beginning balance $ 7,318 $ 10,064 $ 14,658 Provision 4,033 3,109 3,599 Transfer from Liability for indemnification obligations (Other liabilities) 2,021 3,246 2,368 Sales of loans (1,824 ) (9,415 ) (10,208 ) Other 21 314 (353 ) Ending balance $ 11,569 $ 7,318 $ 10,064 |
Summary of Activity in Gain on Loans Held for Sale, Net | Years Ended December 31, Gains on Loans Held for Sale, Net 2018 2017 2016 Gain on sales of loans, net MSRs retained on transfers of forward loans $ 7,412 $ 20,900 $ 36,049 Fair value gains related to transfers of reverse mortgage loans, net 45,020 50,194 24,742 Gain on sale of repurchased Ginnie Mae loans 3,659 11,683 24,565 Other, net 29,603 31,470 7,952 85,694 114,247 93,308 Change in fair value of IRLCs 3,809 (3,089 ) (55 ) Change in fair value of loans held for sale (11,569 ) 1,475 4,595 Loss on economic hedge instruments 136 (8,529 ) (6,592 ) Other (327 ) (702 ) (865 ) $ 77,743 $ 103,402 $ 90,391 |
Advances (Tables)
Advances (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Advances [Abstract] | |
Schedule of Advance Payments by Financial Institution on Foreclosed Properties | December 31, 2018 2017 Principal and interest $ 43,671 $ 20,207 Taxes and insurance 160,373 144,454 Foreclosures, bankruptcy and other 68,597 63,597 272,641 228,258 Allowance for losses (23,259 ) (16,465 ) $ 249,382 $ 211,793 |
Schedule of Activity in Advances | The following table summarizes the activity in net advances: Years Ended December 31, 2018 2017 2016 Beginning balance $ 211,793 $ 257,882 $ 444,298 Acquired in connection with the acquisition of PHH 96,163 — — Transfers to match funded advances (71,623 ) — — Sales (1) (32,081 ) (444 ) (24,631 ) Collections, charge-offs and other, net 51,924 (67,132 ) (165,734 ) Net (increase) decrease in allowance for losses (6,794 ) 21,487 3,949 Ending balance $ 249,382 $ 211,793 $ 257,882 (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 | Allowance for Losses Years Ended December 31, 2018 2017 2016 Beginning balance $ 16,465 $ 37,952 $ 41,901 Provision 5,732 21,429 (2,043 ) Net charge-offs and other 1,062 (42,916 ) (1,906 ) Ending balance $ 23,259 $ 16,465 $ 37,952 |
Match Funded Assets (Tables)
Match Funded Assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Transfers and Servicing [Abstract] | |
Schedule of Match Funded Advances on Residential Loans | December 31, 2018 2017 Advances: Principal and interest $ 412,897 $ 523,248 Taxes and insurance 374,853 439,857 Foreclosures, bankruptcy, real estate and other 149,544 181,495 937,294 1,144,600 Automotive dealer financing notes (1) — 35,392 Allowance for losses (1) — (2,635 ) — 32,757 $ 937,294 $ 1,177,357 (1) In January 2018, we terminated our automotive dealer loan financing facility. Automotive dealer financing notes not pledged to our automotive dealer loan financing facility are reported as Other assets. See Note 12 — Other Assets . |
Schedule of Activity In Match Funded Advances | The following table summarizes the activity in match funded assets: Years Ended December 31, 2018 2017 2016 Advances Automotive Dealer Financing Notes Advances Automotive Dealer Financing Notes Advances Beginning balance $ 1,144,600 $ 32,757 $ 1,451,964 $ — $ 1,706,768 Transfers from advances 71,623 — — — — Transfer (to) from other assets — (36,896 ) — 25,180 — Sales — — (691 ) — (8,923 ) New advances (collections), net (278,929 ) 1,504 (306,673 ) 10,212 (245,881 ) Decrease (increase) in allowance for losses — 2,635 — (2,635 ) — Ending balance $ 937,294 $ — $ 1,144,600 $ 32,757 $ 1,451,964 |
Mortgage Servicing (Tables)
Mortgage Servicing (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Transfers and Servicing [Abstract] | |
Summary of Activity in Carrying Value of Amortization Method Servicing Assets | Mortgage Servicing Rights – Amortization Method Years Ended December 31, 2018 2017 2016 Beginning balance $ 336,882 $ 363,722 $ 377,379 Fair value election - transfer to MSRs carried at fair value (1) (361,670 ) — — Additions recognized in connection with asset acquisitions — 1,658 17,356 Additions recognized on the sale of mortgage loans — 20,738 37,230 Sales — (1,066 ) (24,452 ) Servicing transfers and adjustments — 252 — (24,788 ) 385,304 407,513 Decrease (increase) in impairment valuation allowance (1) (2) 24,788 3,366 (10,813 ) Amortization (1) — (51,788 ) (32,978 ) Ending balance $ — $ 336,882 $ 363,722 Estimated fair value at end of year $ — $ 418,745 $ 467,911 (1) 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 to retained earnings as of January 1, 2018 to reflect the excess of the fair value of the Agency MSRs over their carrying amount. We also recognized the tax effect of this adjustment through an increase in retained earnings of $6.8 million and a deferred tax asset for the same amount. However, we established a full valuation allowance on the resulting deferred tax asset through a reduction in retained earnings. The government-insured MSRs were impaired by $24.8 million at December 31, 2017; therefore, these MSRs were already effectively carried at fair value. (2) Impairment of MSRs is recognized in MSR valuation adjustments, net in the consolidated statements of operations for 2017 and 2016. Impairment valuation allowance balance of $24.8 million was reclassified to reduce the carrying value of the related MSRs on January 1, 2018 in connection with our fair value election. See Note 4 — Fair Value for additional information regarding impairment and the valuation allowance. |
Summary of Activity Related to Fair Value Servicing Assets | Mortgage Servicing Rights – Fair Value Measurement Method Years Ended December 31, 2018 2017 2016 Agency Non-Agency Total Agency Non-Agency Total Agency Non-Agency Total Beginning balance $ 11,960 $ 660,002 $ 671,962 $ 13,357 $ 665,899 $ 679,256 $ 15,071 $ 746,119 $ 761,190 Fair value election - transfer from MSRs carried at amortized cost 336,882 — 336,882 — — — — — — Cumulative effect of fair value election 82,043 — 82,043 — — — — — — Sales (4,748 ) (1,492 ) (6,240 ) — (540 ) (540 ) (3 ) (145 ) (148 ) Additions: Recognized on the sale of residential mortgage loans 8,279 — 8,279 162 — 162 — — — Recognized in connection with the acquisition of PHH 494,348 23,779 518,127 — — — — — — Purchase of MSRs 5,433 — 5,433 — — — — — — Servicing transfers and adjustments (1,047 ) (4,833 ) (5,880 ) — (2,376 ) (2,376 ) — (1,548 ) (1,548 ) Changes in fair value (1): Changes in valuation inputs or other assumptions 11,558 (5,705 ) 5,853 243 86,721 86,964 305 — 305 Realization of expected future cash flows and other changes (79,121 ) (80,189 ) (159,310 ) (1,802 ) (89,702 ) (91,504 ) (2,016 ) (78,527 ) (80,543 ) Ending balance $ 865,587 $ 591,562 $ 1,457,149 $ 11,960 $ 660,002 $ 671,962 $ 13,357 $ 665,899 $ 679,256 (1) Changes in fair value are recognized in MSR valuation adjustments, net 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, 2018 given hypothetical shifts in lifetime prepayments and yield assumptions: Adverse change in fair value 10% 20% Weighted average prepayment speeds $ (122,911 ) $ (237,916 ) Discount rate (option-adjusted spread) (43,410 ) (84,631 ) |
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 residential primary servicing and subservicing portfolios as measured by UPB, including foreclosed real estate and small-balance commercial loans. 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. UPB at December 31, 2018 Servicing (3) $ 72,378,693 Subservicing (3) 53,104,560 NRZ (1) (3) 130,517,237 $ 256,000,490 UPB at December 31, 2017 Servicing $ 75,469,327 Subservicing 2,063,669 NRZ (1) 101,819,557 $ 179,352,553 UPB at December 31, 2016 Servicing $ 86,049,298 Subservicing (2) 4,330,084 NRZ (1) 118,712,748 $ 209,092,130 (1) UPB of loans for which the Rights to MSRs have been sold to NRZ, including those for which third-party consents have been received and the MSRs have been transferred to NRZ. (2) Excludes $92.9 million of large-balance commercial foreclosed real estate. During 2017, we sold or transferred servicing on the remaining managed assets. (3) Includes $6.3 billion , $51.3 billion and $42.3 billion UPB of loans serviced, subserviced or subserviced on behalf of NRZ, respectively, added to the portfolio in connection with the PHH acquisition. |
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 at December 31, 2018 was as follows: Amount Count California $ 56,455,157 201,058 New York 25,411,051 101,444 Florida 20,345,407 134,335 New Jersey 13,711,894 65,263 Texas 11,858,287 111,512 Other 128,218,694 948,626 $ 256,000,490 1,562,238 |
Schedule of Components of Servicing and Subservicing Fees | Years Ended December 31, Servicing Revenue 2018 2017 2016 Loan servicing and subservicing fees Servicing $ 224,892 $ 257,419 $ 293,210 Subservicing 8,904 7,775 21,427 NRZ 539,039 549,411 633,545 772,835 814,605 948,182 Late charges 61,453 61,763 66,709 Home Affordable Modification Program (HAMP) fees (1) 14,312 43,310 110,367 Custodial accounts (float earnings) 40,115 25,237 8,969 Loan collection fees 18,392 22,770 27,213 Other 27,229 21,691 25,180 $ 934,336 $ 989,376 $ 1,186,620 (1) The HAMP 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, 2018 | |
Transfers and Servicing [Abstract] | |
Schedule of Interest Expense Related to Financial Liability | The following table presents the assets and liabilities recorded on our consolidated balance sheets as well as the impacts to our consolidated statements of operations in connection with our NRZ agreements. Years Ended December 31, 2018 2017 2016 Balance Sheets MSRs, at fair value $ 894,002 $ 499,042 $ 477,707 Due from NRZ 25,196 14,924 21,873 Due to NRZ (1) 53,001 98,493 83,248 Financing liability - MSRs pledged, at fair value 1,032,856 508,291 477,707 Statements of Operations Servicing fees collected on behalf of NRZ $ 539,039 $ 549,411 $ 633,545 Less: Subservicing fee retained 142,334 295,192 337,727 Net servicing fees remitted to NRZ 396,705 254,219 295,818 Less: Reduction (increase) in financing liability Changes in fair value: Original Rights to MSRs Agreements 171 (83,300 ) (2,580 ) 2017 Agreements and New RMSR Agreements 14,369 42,018 — PHH MSR Agreements 4,729 — — 19,269 (41,282 ) (2,580 ) Runoff, settlement and other: Original Rights to MSRs Agreements 50,620 57,264 63,997 2017 Agreements and New RMSR Agreements 136,700 1,926 — PHH MSR Agreements 18,446 — — 205,766 59,190 63,997 Interest expense $ 171,670 $ 236,311 $ 234,401 (1) Amounts collected on behalf of NRZ for advances and servicing fees. |
Receivables (Tables)
Receivables (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Schedule of Receivables | December 31, 2018 2017 Servicing-related receivables: Government-insured loan claims, net $ 105,258 $ 114,971 Due from NRZ 25,196 14,924 Amount due on sales of MSRs (1) 30,148 1,037 Reimbursable expenses 11,508 31,709 Due from custodial accounts 9,060 36,122 Other 7,012 10,922 188,182 209,685 Income taxes receivable 45,987 36,831 Other receivables 17,672 19,600 251,841 266,116 Allowance for losses (53,579 ) (66,587 ) $ 198,262 $ 199,529 (1) Balance represents the holdback of proceeds from MSR sales and transfers to address indemnification claims and mortgage loan document deficiencies. The balance at December 31, 2018 includes $29.5 million of receivables acquired in connection with the acquisition of PHH that relate to sales executed by PHH prior to the acquisition date. |
Schedule of Changes in Allowance For Losses | Valuation Allowance - Loans Held for Sale at Lower of Cost or Fair Value Years Ended December 31, 2018 2017 2016 Beginning balance $ 7,318 $ 10,064 $ 14,658 Provision 4,033 3,109 3,599 Transfer from Liability for indemnification obligations (Other liabilities) 2,021 3,246 2,368 Sales of loans (1,824 ) (9,415 ) (10,208 ) Other 21 314 (353 ) Ending balance $ 11,569 $ 7,318 $ 10,064 |
Government Insured Loans Claims [Member] | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Schedule of Changes in Allowance For Losses | Allowance for Losses - Government-Insured Loan Claims Years Ended December 31, 2018 2017 2016 Beginning balance $ 53,340 $ 53,258 $ 20,571 Provision 37,352 40,424 61,322 Charge-offs and other, net (38,195 ) (40,342 ) (28,635 ) Ending balance $ 52,497 $ 53,340 $ 53,258 |
Premises and Equipment (Tables)
Premises and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Premises and Equipment | December 31, 2018 2017 Computer software $ 46,029 $ 43,137 Computer hardware 34,240 29,848 Leasehold improvements 27,798 23,425 Buildings 9,689 9,689 Office equipment 7,370 8,071 Furniture and fixtures 4,674 4,141 Other 818 1,364 130,618 119,675 Less accumulated depreciation and amortization (97,201 ) (82,669 ) $ 33,417 $ 37,006 |
Other Assets (Tables)
Other Assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Schedule of Other Assets | December 31, 2018 2017 Contingent loan repurchase asset $ 302,581 $ 431,492 Other prepaid expenses 27,647 22,559 Prepaid representation, warranty and indemnification claims - Agency MSR sale 15,173 20,173 Real estate 7,368 3,070 Prepaid lender fees, net (1) 6,589 9,496 Deferred tax assets, net 5,289 2,000 Derivatives, at fair value 4,552 5,429 Security deposits 2,278 3,019 Mortgage-backed securities, at fair value 1,502 1,592 Interest-earning time deposits 1,338 4,739 Prepaid income taxes (2) — 5,621 Other 5,250 2,696 $ 379,567 $ 511,886 (1) We amortize these costs to the earlier of the scheduled amortization date, contractual maturity date or prepayment date of the debt. (2) We recognized the balance of prepaid income taxes as a cumulative-effect reduction of retained earnings upon adoption of ASU 2016-16 on January 1, 2018. See Note 1 — Organization, Business Environment, Basis of Presentation and Significant Accounting Policies for additional information. |
Schedule of Changes in Allowance For Losses | Valuation Allowance - Loans Held for Sale at Lower of Cost or Fair Value Years Ended December 31, 2018 2017 2016 Beginning balance $ 7,318 $ 10,064 $ 14,658 Provision 4,033 3,109 3,599 Transfer from Liability for indemnification obligations (Other liabilities) 2,021 3,246 2,368 Sales of loans (1,824 ) (9,415 ) (10,208 ) Other 21 314 (353 ) Ending balance $ 11,569 $ 7,318 $ 10,064 |
Automotive Dealer Financing Notes [Member] | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Schedule of Changes in Allowance For Losses | Changes in the allowance are as follows: Years Ended December 31, 2018 2017 2016 Beginning balance $ 7,664 $ 4,371 $ 27 Provision (265 ) 3,293 4,344 Charge-offs and other (7,399 ) — — Ending balance $ — $ 7,664 $ 4,371 |
Borrowings (Tables)
Borrowings (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Instrument, Redemption [Line Items] | |
Schedule of Match Funded Liabilities | Match Funded Liabilities December 31, 2018 December 31, 2017 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-VF4 (4) Aug. 2048 Aug. 2018 $ — — % $ — 4.29 % $ 67,095 Advance Receivables Backed Notes - Series 2015-VF5 (4) Dec. 2049 Dec. 2019 8,441 4.06 216,559 4.29 67,095 Advance Receivables Backed Notes - Series 2016-T1 (5) Aug. 2048 Aug. 2018 — — — 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 Advance Receivables Backed Notes, Series 2018-T1 (5) Aug. 2049 Aug. 2019 — 3.50 150,000 — — Advance Receivables Backed Notes, Series 2018-T2 (5) Aug. 2050 Aug. 2020 — 3.81 150,000 — — Total Ocwen Master Advance Receivables Trust (OMART) 8,441 3.56 751,559 3.02 884,190 Ocwen Servicer Advance Receivables Trust III (OSART III) - Advance Receivables Backed Notes, Series 2014-VF1 (6) Dec. 2048 Dec. 2018 — — — 4.63 33,768 Ocwen Freddie Advance Funding (OFAF ) - Advance Receivables Backed Notes, Series 2015-VF1 (7) Jun. 2049 Jun. 2019 38,275 5.03 26,725 3.54 56,078 Total Servicing Advance Financing Facilities 46,716 3.61 % 778,284 3.16 % 974,036 Automotive Capital Asset Receivables Trust (ACART) - Loan Series 2017-1 (8) Feb. 2021 Feb. 2019 — — % — 6.77 % 24,582 $ 46,716 3.61 % $ 778,284 3.25 % $ 998,618 (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, 2018 , none 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 2.50% and 1.56% at December 31, 2018 and 2017 , respectively. (4) Effective January 1, 2018, the borrowing capacity of the Series 2014-VF4 and the Series 2015-VF5 variable rate notes were each reduced from $105.0 million to $70.0 million . The interest rate was based on 1ML, with a ceiling of 125 basis points (bps) plus a margin of 235 to 635 bps. On July 13, 2018, we increased the borrowing capacity of the Series 2015-VF5 variable notes to $225.0 million and extended the amortization date to December 15, 2019, with interest computed based on the lender’s cost of funds plus a margin of 105 to 250 bps. The increased capacity was used on July 16, 2018 to redeem the Series 2016-T1 term notes with an outstanding balance of $265.0 million and an amortization date of August 15, 2018. We also voluntarily terminated the Series 2014-VF4 variable notes on July 16, 2018. (5) Under the terms of the agreement, we must continue to borrow the full amount of the Series 2016-T2, 2018-T1 and 2018-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-T2, 2018-T1 and 2018-T2 term notes have a total combined borrowing capacity of $535.0 million . Rates on the individual classes of notes range from 2.72% to 4.53% . The Series 2016-T1 and Series 2017-T1 term notes were redeemed on July 16, 2018 and August 14, 2018, respectively. On August 15, 2018, we issued two $150.0 million fixed-rate term notes (Series 2018 T-1 and Series 2018-T2) with amortization dates of August 15, 2019 and August 17, 2020, respectively (6) We voluntarily terminated the Series 2014-VF1 variable notes on December 5, 2018. The maximum borrowing capacity under this facility was $55.0 million . There was a ceiling of 300 bps for 3ML in determining the interest rate for these variable rate notes. Rates on the individual notes were based on the lender’s cost of funds plus a margin of 235 to 475 bps. (7) On June 7, 2018, borrowing capacity was reduced from $110.0 million to $65.0 million with interest computed based on the lender’s cost of funds plus a margin of 180 to 450 bps. There is a ceiling of 300 bps for 3ML in determining the interest rate for these variable rate notes. (8) On January 23, 2018, we voluntarily terminated the Loan Series 2017-1 Notes. |
Schedule of Financing Liabilities | Financing Liabilities Outstanding Balance at December 31, Borrowing Type Collateral Interest Rate Maturity 2018 2017 HMBS-Related Borrowings, at fair value (1) Loans held for investment 1ML + 260 bps (1) $ 5,380,448 $ 4,601,556 Other Financing Liabilities MSRs pledged, at fair value Original Rights to MSRs Agreements MSRs (2) (2) 436,511 499,042 2017 Agreements and New RMSR Agreements MSRs (3) (3) 138,854 9,249 PHH MSR Agreements MSRs (4) (4) 457,491 — 1,032,856 508,291 Secured Notes, Ocwen Asset Servicing Income Series, Series 2014-1 (5) MSRs (5) Feb. 2028 65,523 72,575 Financing liability - Owed to securitization investors, at fair value: IndyMac Mortgage Loan Trust (INDX 2004-AR11) (6) Loans held for investment (6) (6) 11,012 — Residential Asset Securitization Trust 2003-A11 (RAST 2003-A11) (6) Loans held for investment (6) (6) 13,803 — 24,815 — Advances pledged (7) Advances on loans (7) (7) 4,419 12,652 1,127,613 593,518 $ 6,508,061 $ 5,195,074 (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 in September 2017. In connection with the execution of the New RMSR Agreements in January 2018, we received a lump sum payment of $279.6 million as compensation for foregoing certain payments under the Original Rights to MSRs Agreements. 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. The expected maturity of the liability is April 30, 2020, the date through which we were scheduled to be the servicer on loans underlying the Rights to MSRs per the Original Rights to MSRs Agreements. (4) Represents a liability for sales of MSRs that are accounted for as a secured borrowing which we assumed in connection with the acquisition of PHH. Under this accounting treatment, the MSRs transferred to NRZ remain on the consolidated balance sheet and the proceeds from the sale are recognized as a secured liability. We elected to record the liability at fair value consistent with the related MSRs. (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. (6) Consists of securitization debt certificates due to third parties that represent beneficial interests in trusts that we include in our unaudited consolidated financial statements, as more fully described in Note 3 — Securitizations and Variable Interest Entities . The holders of these certificates have no recourse against the assets of Ocwen. The certificates in the INDX 2004-AR11 Trust pay interest based on variable rates which are generally based on weighted average net mortgage rates and which range between 3.68% and 4.26% at December 31, 2018 . The certificates in the RAST 2003-A11 Trust pay interest based on fixed rates ranging between 4.25% and 5.75% and a variable rate based on 1ML plus 0.45% . The maturity of the certificates occurs upon maturity of the loans held by the trust. The remaining loans in the INDX 2004-AR11 Trust and RAST 2003-A11 Trust have maturity dates extending through November 2034 and October 2033, respectively. (7) 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. The effective interest rate is based on 1ML plus a margin of 450 bps. |
Schedule of Other Secured Borrowings | Other Secured Borrowings Outstanding Balance at December 31, Borrowing Type Collateral Interest Rate Termination / Maturity Available Borrowing Capacity (1) 2018 2017 SSTL (2) (2) 1-Month Euro-dollar rate + 500 bps with a Eurodollar floor of 100 bps (2) Dec. 2020 $ — $ 231,500 $ 298,251 Mortgage loan warehouse facilities Repurchase agreement (3) Loans held for sale (LHFS) 1ML + 195 - 300 bps Sep. 2019 25,307 74,693 8,221 Participation agreements (4) LHFS N/A (4) — 42,331 161,433 Mortgage warehouse agreement (5) LHFS (reverse mortgages) 1ML + 275 bps; 1ML floor of 350 bps Aug. 2019 — 8,009 32,042 Master repurchase agreement (6) LHFS (forward and reverse mortgages) 1ML + 225 bps forward; 1ML + 275 bps reverse Dec. 2019 169,320 30,680 54,086 Master repurchase agreement (7) LHFS (reverse mortgages) Prime + 0.0% (4.0% floor) Jan. 2020 — — — Master repurchase agreement (8) N/A 1ML + 170bps N/A — — — 194,627 155,713 255,782 $ 194,627 387,213 554,033 Unamortized debt issuance costs - SSTL (3,098 ) (5,423 ) Discount - SSTL (1,577 ) (2,760 ) $ 382,538 $ 545,850 Weighted average interest rate 5.49 % 5.22 % (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, $62.4 million could be used at December 31, 2018 based on the amount of eligible collateral that could be pledged. (2) Under the terms of the Amended and Restated Senior Secured Term Loan Facility Agreement with an original 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 principal payments of $4.2 million on the SSTL. 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) 1ML , plus a margin of 4.00% and subject to a base rate floor of 2.00% or (b) 1ML , plus a margin of 5.00% and subject to a 1ML floor of 1.00% . To date we have elected option (b) to determine the interest rate. (3) On September 28, 2018, we renewed this facility through September 27, 2019. In connection with the renewal, we increased the maximum borrowing amount from $137.5 million to $175.0 million , of which $100.0 million is available on a committed basis and the remainder is available at the discretion of the lender. (4) Under these participation agreements, the lender provides financing for a combined total of $250.0 million at the discretion of the lender. The participation agreements allow the lender to acquire a 100% beneficial interest in the underlying mortgage loans. The transaction does not qualify for sale accounting treatment and is accounted for as a secured borrowing. The lender earns the stated interest rate of the underlying mortgage loans while the loans are financed under the participation agreement. On May 31, 2018, we renewed these facilities through April 30, 2019 ( $175.0 million ) and May 31, 2019 ( $75.0 million ). (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. On August 15, 2018, we renewed these facilities through August 15, 2019. (6) On December 7, 2018, we renewed this facility through December 6, 2019. In connection with the renewal, we increased the maximum borrowing amount from $150.0 million to $250.0 million , of which $200.0 million is available on a committed basis and the remainder is available at the discretion of the lender. 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. On January 23, 2019, we renewed this facility through January 22, 2020. (8) This agreement was originally entered into by PHH and subsequently assumed by Ocwen in connection with its acquisition of PHH. T he lender provides financing for up to $200.0 million at the discretion of the lender. The agreement has no stated maturity date. |
Schedule of Senior Notes | Senior Notes Outstanding Balance at December 31, Interest Rate Maturity 2018 2017 Senior unsecured notes: Ocwen (1) 6.625% May 2019 $ — $ 3,122 PHH (2) 7.375% Sep. 2019 97,521 — PHH (2) 6.375% Aug. 2021 21,543 — 119,064 3,122 Senior secured notes (3) 8.375% Nov. 2022 330,878 346,878 449,942 350,000 Unamortized debt issuance costs (2,075 ) (2,662 ) Fair value adjustments (2) 860 — $ 448,727 $ 347,338 (1) On December 21, 2018, we redeemed all of the remaining Senior unsecured notes due in May 2019, at a redemption price of 100.0% of the outstanding principal balance plus accrued and unpaid interest. (2) These notes were originally issued by PHH and subsequently assumed by Ocwen in connection with its acquisition of PHH. We recorded the notes at their respective fair values on the date of acquisition, and we are amortizing the resulting fair value adjustments over the remaining term of the notes. We have the option to redeem the notes due in August 2021, in whole or in part, on or after January 1, 2019 at a redemption price equal to 100.0% of the principal amount plus any accrued and unpaid interest. (3) 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. In December 2018, Ocwen repurchased $16.0 million of the Senior Secured Notes at a price of 96.0% . |
Schedule of Assets Held as Collateral Related to Secured Borrowings | Our assets held as collateral related to secured borrowings, committed under sale or other contractual obligations and which may be subject to secured liens under the SSTL and Senior Secured Notes are as follows at December 31, 2018: Collateral for Secured Borrowings Total Assets Match Funded Liabilities Financing Liabilities Mortgage Loan Warehouse Facilities Sales and Other Commitments (1) Other (2) Cash $ 329,132 $ — $ — $ — $ — $ 329,132 Restricted cash 67,878 20,968 — 5,658 41,252 — Mortgage servicing rights 1,457,149 — 985,576 — 9,867 461,706 Advances, net 249,382 — 11,162 — 31,216 207,004 Match funded assets 937,294 937,294 — — — — Loans held for sale 242,622 — — 143,704 — 98,918 Loans held for investment 5,498,719 — 5,406,968 33,567 — 58,184 Receivables, net 198,262 — — — — 198,262 Premises and equipment, net 33,417 — — — — 33,417 Other assets 379,567 — — — 320,032 59,535 Assets related to discontinued operations 794 — — — — 794 Total Assets $ 9,394,216 $ 958,262 $ 6,403,706 $ 182,929 $ 402,367 $ 1,446,952 (1) Sales and Other Commitments include MSRs and related advances committed under sale agreements, Restricted cash and deposits held as collateral to support certain contractual obligations, and Contingent loan repurchase assets related to the Ginnie Mae early buyout program for which a corresponding liability is recognized in Other liabilities. (2) The borrowings under the SSTL are secured by a first priority security interest in substantially all of the assets of Ocwen, OLS, PHH, PMC and the other guarantors thereunder, excluding among other things, 35% of the voting capital stock of foreign subsidiaries, securitization assets and equity interests of securitization entities, assets securing permitted funding indebtedness and non-recourse indebtedness, REO assets, Agency MSRs with respect to which an acknowledgment agreement acknowledging such security interest has not been obtained, as well as other customary carve-outs (collectively, the Collateral). The Collateral is subject to certain permitted liens set forth under the SSTL and related security agreement. The Senior Secured Notes are guaranteed by Ocwen and the other guarantors that guarantee the SSTL, and the borrowings under the Senior Secured Notes are secured by a second priority security interest in the Collateral. Security interests securing borrowings under the SSTL and Senior Secured Notes may include amounts presented in Other as well as certain assets presented in Collateral for Secured Borrowings and Sales and Other Commitments, subject to permitted liens as defined in the applicable debt documents. The amounts presented here may differ in their calculation and are not intended to represent amounts that may be used in connection with covenants under the applicable debt documents. |
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) 2019 2020 2021 2022 Total Fair Match funded liabilities $ 628,284 $ 150,000 $ — $ — $ 778,284 $ 776,485 Other secured borrowings 172,463 214,750 — 387,213 383,162 Senior notes 97,521 — 21,543 330,878 449,942 426,147 $ 898,268 $ 364,750 $ 21,543 $ 330,878 $ 1,615,439 $ 1,585,794 (1) Amounts are exclusive of any related discount, unamortized debt issuance costs or fair value adjustment. (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 $1.0 billion recorded in connection with sales of Rights to MSRs and MSRs and $5.4 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, 2018 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Other Liabilities | December 31, 2018 2017 Contingent loan repurchase liability $ 302,581 $ 431,492 Other accrued expenses 99,739 75,088 Accrued legal fees and settlements 62,763 51,057 Due to NRZ - Advance collections and servicing fees 53,001 98,493 Liability for indemnification obligations 51,574 23,117 Servicing-related obligations 41,922 36,296 Checks held for escheat 20,686 19,306 Liability for uncertain tax positions 13,739 3,252 Liability for unfunded pension obligation 12,683 165 Accrued interest payable 7,209 5,172 Liability for mortgage insurance contingency 6,820 6,820 Derivatives, at fair value 4,986 635 Deferred revenue 4,441 3,463 Other 21,492 15,054 $ 703,636 $ 769,410 |
Schedule of Accrued Legal Fees and Settlements | Accrued Legal Fees and Settlements Years Ended December 31, 2018 2017 2016 Beginning balance $ 51,057 $ 93,797 $ 74,922 Accrual for probable losses (1) 19,774 131,113 74,943 Payments (2) (12,983 ) (174,941 ) (47,754 ) Assumed in connection with the acquisition of PHH 9,960 — — Issuance of common stock in settlement of litigation (3) (5,719 ) (1,937 ) — Net increase (decrease) in accrued legal fees (1,917 ) 482 (6,231 ) Other 2,591 2,543 (2,083 ) Ending balance $ 62,763 $ 51,057 $ 93,797 (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) See Note 15 — Equity for additional information. |
Equity (Tables)
Equity (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 2017 Unfunded pension plan obligation $ 3,347 $ 128 Unrealized losses on cash flow hedges 979 1,128 Other (69 ) (7 ) $ 4,257 $ 1,249 |
Derivative Financial Instrume_2
Derivative Financial Instruments and Hedging Activities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 : Interest Rate Risk IRLCs and Loans Held for Sale Borrowings IRLCs Forward MBS Trades Interest Rate Caps Notional balance at December 31, 2017 $ 96,339 $ 240,823 $ 375,000 Additions 1,288,938 404,162 173,750 Assumed in connection with the acquisition of PHH 50,731 — — Amortization — — (288,750 ) Maturities (1,014,466 ) (479,622 ) — Terminations (271,367 ) — — Notional balance at December 31, 2018 $ 150,175 $ 165,363 $ 260,000 Maturity Jan. 2019 to Mar. 2019 Mar. 2019 May 2019 to May 2020 Fair value of derivative assets (liabilities) (1) at: December 31, 2018 $ 3,871 $ (4,983 ) $ 678 December 31, 2017 3,283 (545 ) 2,056 Gains (losses) on derivatives during the years ended: Gain on loans held for sale, net Other, net December 31, 2018 $ 3,809 $ 136 $ (841 ) December 31, 2017 (3,089 ) (8,529 ) 10 (1) Derivatives are reported at fair value in Other assets or in Other liabilities on our consolidated balance sheets. |
Interest Income (Tables)
Interest Income (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Other Income and Expenses [Abstract] | |
Schedule of Components of Interest Income | Years Ended December 31, 2018 2017 2016 Loans held for sale $ 10,756 $ 11,100 $ 15,774 Automotive dealer financing notes 420 3,069 1,534 Interest earning cash deposits and other 2,850 1,796 1,775 $ 14,026 $ 15,965 $ 19,083 |
Interest Expense (Tables)
Interest Expense (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Other Income and Expenses [Abstract] | |
Schedule of Components of Interest Expense | Years Ended December 31, 2018 2017 2016 Financing liabilities NRZ $ 171,670 $ 236,311 $ 234,401 Other financing liabilities 5,013 6,203 14,433 176,683 242,514 248,834 Match funded liabilities 31,870 47,624 66,879 Senior notes 31,280 29,806 30,012 Other secured borrowings 30,465 39,531 60,469 Other 4,743 3,763 6,389 $ 275,041 $ 363,238 $ 412,583 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Before Taxes | For income tax purposes, the components of loss from continuing operations before taxes were as follows: Years Ended December 31, 2018 2017 2016 Domestic $ 11,477 $ (75,143 ) $ (130,920 ) Foreign (82,953 ) (68,830 ) (75,441 ) $ (71,476 ) $ (143,973 ) $ (206,361 ) |
Schedule of Components of Income Tax Expense (Benefit) | The components of income tax benefit were as follows: Years Ended December 31, 2018 2017 2016 Current: Federal $ (7,670 ) $ (21,859 ) $ (8,025 ) State 356 (3,938 ) 460 Foreign 11,132 9,550 5,099 3,818 (16,247 ) (2,466 ) Deferred: Federal 23,991 27,289 (22,054 ) State 319 702 4,701 Foreign (4,252 ) 2,719 (2,806 ) Provision for (reversal of) valuation allowance on deferred tax assets (23,347 ) (29,979 ) 15,639 (3,289 ) 731 (4,520 ) Total $ 529 $ (15,516 ) $ (6,986 ) |
Schedule of Effective Income Tax Reconciliation | Income tax expense differs from the amounts computed by applying the U.S. Federal corporate income tax rate as follows: Years Ended December 31, 2018 2017 2016 Expected income tax expense (benefit) at statutory rate (1) $ (15,010 ) $ (50,391 ) $ (72,225 ) Differences between expected and actual income tax expense (2): Bargain purchase gain disallowance (13,448 ) — — Reduction in tax attributes for Section 382 & 383 limitations 55,668 — — U.S. Tax Reform - Change in Federal rate (10,666 ) 62,758 — U.S. Tax Reform - Transition Tax 14,412 34,846 — U.S. Tax Reform - BEAT Tax 1,076 — — Foreign tax differential including effectively connected income (3) 22,990 (12,140 ) 39,249 Provision for (reversal of) liability for uncertain tax positions (3,987 ) (16,925 ) 2,236 Provision for (reversal of) valuation allowance on deferred tax assets (4) (23,347 ) (29,979 ) 15,639 Provision for liability for intra-entity transactions — 2,484 3,357 State tax, after Federal tax benefit 675 (3,938 ) 250 Excess tax benefits from share-based compensation (356 ) (3,701 ) — Other permanent differences 122 (267 ) (138 ) Foreign tax credit (generation) utilization (25,601 ) — 3,214 Executive compensation disallowance 959 221 425 Subpart F income 3,222 2,824 228 Other provision to return differences (6,559 ) 221 (1,334 ) Other 379 (1,529 ) 2,113 Actual income tax expense (benefit) $ 529 $ (15,516 ) $ (6,986 ) (1) The U.S. Federal corporate income tax rate is 21% beginning January 1, 2018 and was 35% until December 31, 2017. (2) ASC 740-10-50 and SEC Regulation S-X, Rule 4-08(h) require the disclosure of significant reconciling items in the effective tax rate reconciliation schedule. We have prepared the 2018 effective tax rate reconciliation consistent with prior years, taking into account the materiality of reconciling items, comparability with prior years and the usefulness of the information. (3) The foreign tax differential includes a benefit recognized in 2018, 2017 and 2016 for taxable losses earned by OMS which are taxable in the U.S. as effectively connected income (ECI). The impact of ECI to income tax benefit for 2018 , 2017 6 and 2016 was $3.3 million , $28.5 million and $7.4 million , respectively. (4) 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 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. |
Schedule of Deferred Tax Assets and Liabilities | Net deferred tax assets were comprised of the following: December 31, 2018 2017 Deferred tax assets Net operating loss carryforward $ 31,587 $ 59,271 Reserve for servicing exposure 10,331 1,312 Accrued other liabilities 8,966 3,239 Foreign deferred assets 7,142 6,769 Partnership losses 6,681 5,360 Stock-based compensation expense 5,610 4,202 Interest expense disallowance 4,773 2,032 Intangible asset amortization 4,579 5,541 Accrued incentive compensation 4,527 4,798 Accrued legal settlements 4,350 3,602 Bad debt and allowance for loan losses 3,498 2,383 Tax residuals and deferred income on tax residuals 2,905 2,569 Foreign tax credit 357 4,262 Mortgage servicing rights amortization — 3,664 Other 8,832 4,951 104,138 113,955 Deferred tax liabilities Mortgage servicing rights amortization 27,860 — Foreign undistributed earnings 2,059 4,858 Other 804 49 30,723 4,907 73,415 109,048 Valuation allowance (68,126 ) (107,048 ) Deferred tax assets, net $ 5,289 $ 2,000 |
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, 2018 2017 2016 Beginning balance $ 2,281 $ 16,994 $ 32,548 Additions - PHH acquisition 13,108 — — Additions for tax positions of current year 412 — — Additions for tax positions of prior years 1,354 2,281 — Reductions for tax positions of prior years (236 ) — — Reductions for settlements (3,188 ) (387 ) (14,420 ) Lapses in statute of limitations (4,109 ) (16,607 ) (1,134 ) Ending balance $ 9,622 $ 2,281 $ 16,994 |
Basic and Diluted Earnings (L_2
Basic and Diluted Earnings (Loss) per Share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliation of the Calculation of Basic EPS to Diluted EPS | Years Ended December 31, 2018 2017 2016 Loss from continuing operations, net of tax attributable to Ocwen common stockholders $ (72,181 ) $ (127,966 ) $ (199,762 ) Income from discontinued operations, net of tax 1,409 — — Net loss attributable to Ocwen stockholders $ (70,772 ) $ (127,966 ) $ (199,762 ) Weighted average shares of common stock outstanding - Basic and Diluted 133,703,359 127,082,058 123,990,700 Earnings (loss) per share - Basic and Diluted Continuing operations $ (0.54 ) $ (1.01 ) $ (1.61 ) Discontinued operations $ 0.01 $ — $ — Total attributable to Ocwen stockholders $ (0.53 ) $ (1.01 ) $ (1.61 ) Stock options and common stock awards excluded from the computation of diluted earnings per share Anti-dilutive (1) 4,989,725 5,487,164 7,176,089 Market-based (2) 670,829 862,446 795,456 (1) Includes stock options that are anti-dilutive because their exercise price was greater than the average market price of Ocwen’s stock, and stock awards that are anti-dilutive based on the application of the treasury stock method. (2) Shares that are issuable upon the achievement of certain market-based performance criteria related to Ocwen’s stock price. |
Employee Compensation and Ben_2
Employee Compensation and Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Change in Benefit Obligation, Plan Assets and Funded Status for Pension Plans | The following table shows the total change in the benefit obligation, plan assets and funded status for the pension plans: December 31, 2018 Benefit obligation $ 49,122 Fair value of plan assets 36,439 Unfunded status recognized in Other liabilities $ (12,683 ) Amounts recognized in Accumulated other comprehensive income $ 3,422 |
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 % 2016 - 2018 Awards: Options: Service Condition: Time-based 9 % Ratably over three years (1/3 vesting on each of the first three anniversaries of the grant date). Stock Units: Service Condition: Time-based 55 Over three years with 1/3 vesting on each of the first three anniversaries of the grant date. Market Condition: Time-based vesting schedule and Market performance-based vesting date 36 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 2018 2017 2016 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 6,708,655 $ 9.97 6,926,634 $ 9.88 7,151,225 $ 10.10 Granted (1) 348,385 3.66 — — — — Exercised (2) — — — — (69,805 ) 5.81 Forfeited / Expired (4) (4,964,441 ) 5.62 (217,979 ) 7.16 (154,786 ) 21.80 Outstanding at end of year (5)(6) 2,092,599 $ 19.22 6,708,655 $ 9.97 6,926,634 $ 9.88 Exercisable at end of year (5)(6)(7) 1,520,039 $ 21.29 6,234,830 $ 8.87 6,344,958 $ 8.71 (1) Stock options granted in 2018 include 266,990 options awarded to Ocwen’s current Chief Executive Officer at an exercise price of $4.12 equal to the closing price of our common stock on the effective date of his employment, which was the closing date of the PHH acquisition. (2) The weighted average grant date fair value of stock options granted in 2018 was $2.63 . (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 in 2016 . (4) Includes 4,719,750 options which expired unexercised in 2018 because their exercise price was greater than the market price of Ocwen’s stock. (5) At December 31, 2018 , 160,000 options with a market condition for vesting based on an average common stock trading price of $38.94 , had not met their performance criteria. Outstanding and exercisable stock options at December 31, 2018 have a net aggregate intrinsic value of $0 . A total of 870,939 market-based options were outstanding at December 31, 2018 , of which 710,939 were exercisable. (6) At December 31, 2018 , the weighted average remaining contractual term of options outstanding and options exercisable was 5.02 years and 3.87 years , respectively. (7) The total fair value of stock options that vested and became exercisable during 2018 , 2017 and 2016 , based on grant-date fair value, was $0.6 million , $0.7 million and $1.1 million , respectively. |
Schedule of Stock Unit Activity | Years Ended December 31, Stock Units 2018 2017 2016 Number of Weighted Number of Weighted Number of Weighted Unvested at beginning of year 2,753,918 $ 3.69 2,752,054 $ 3.91 835,730 $ 10.00 Granted (1)(2) 1,809,373 3.57 971,761 2.56 2,184,100 2.19 Vested (3)(4) (796,856 ) 2.78 (896,272 ) 3.26 (26,666 ) 32.56 Forfeited/Cancelled (1) (819,635 ) 4.57 (73,625 ) 2.20 (241,110 ) 6.17 Unvested at end of year (5)(6) 2,946,800 $ 3.75 2,753,918 $ 3.69 2,752,054 $ 3.91 (1) Upon the resignation of Ocwen’s former Chief Executive Officer on June 30, 2018, 377,525 unvested stock units which would have been forfeited immediately were modified to allow continued vesting in accordance with the original terms. This had the equivalent effect of canceling the original award and granting a new award. (2) Stock units granted in 2018 include 983,010 units granted to Ocwen’s current Chief Executive Officer on the effective date of his employment, which was the closing date of the PHH acquisition. (3) The total intrinsic value of stock units vested, which is defined as the market value of the stock on the date of vesting, was $3.3 million , $4.6 million and $0.1 million for 2018 , 2017 and 2016 , respectively. (4) The total fair value of the stock units that vested during 2018 , 2017 and 2016 , based on grant-date fair value, was $2.2 million , $2.9 million and $0.9 million , respectively. (5) Excluding the 510,829 market-based stock awards that have not met their performance criteria, the net aggregate intrinsic value of stock awards outstanding at December 31, 2018 was $3.3 million . At December 31, 2018 , 377,806 , 40,000 and 93,023 stock units with a market condition for vesting based on an average common stock trading price of $16.26 , $11.72 and $5.80 respectively, had not yet met the market condition. (6) At December 31, 2018 , the weighted average remaining contractual term of share units outstanding was 2.46 years . |
Schedule of Assumptions used to Value Stock Option Awards Granted | The following assumptions were used to value awards: Years Ended December 31, 2018 2017 2016 Black-Scholes Monte Carlo Monte Carlo Monte Carlo Risk-free interest rate 2.79% – 3.14% 1.15% – 1.18% 1.12% – 1.18% 1.12% Expected stock price volatility (1) 67% 71% - 74% 71% - 77% 77% Expected dividend yield —% —% —% —% Expected life (in years) (2) 8.5 (3) (3) (3) Contractual life (in years) N/A N/A N/A N/A Fair value $1.53 - $2.96 $1.84 - $4.80 $2.00 - $4.80 $2.00 (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, 2018 2017 2016 Equity-based compensation expense Stock option awards $ (368 ) $ 1,457 $ 1,644 Stock awards 2,734 4,167 3,537 Excess tax benefit related to share-based awards 294 3,701 686 |
Business Segment Reporting (Tab
Business Segment Reporting (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 Revenue (1) $ 951,224 $ 93,672 $ 18,149 $ — $ 1,063,045 Expenses (1) 772,467 82,906 77,123 — 932,496 Other income (expense): Interest income 5,383 6,061 2,582 — 14,026 Interest expense (214,172 ) (6,639 ) (54,230 ) — (275,041 ) Bargain purchase gain — 64,036 64,036 Gain on sale of mortgage servicing rights, net 1,325 — — — 1,325 Other, net (1) (3,241 ) 966 (4,096 ) — (6,371 ) Other income (expense), net (210,705 ) 388 8,292 — (202,025 ) Income (loss) from continuing operations before income taxes $ (31,948 ) $ 11,154 $ (50,682 ) $ — $ (71,476 ) 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, net (1) 4,049 (869 ) (6,348 ) — (3,168 ) Other income (expense), net (278,226 ) (3,848 ) (57,830 ) — (339,904 ) Income (loss) from continuing operations 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 8,492 — — — 8,492 Other, net (1) 15,812 1,065 (2,139 ) — 14,738 Other income (expense), net (333,218 ) 1,967 (39,019 ) — (370,270 ) Income (loss) from continuing operations before income taxes $ 3,364 $ 131 $ (209,856 ) $ — $ (206,361 ) Total Assets Servicing Lending Corporate Items and Other Corporate Eliminations Business Segments Consolidated December 31, 2018 $ 3,306,208 $ 5,603,481 $ 484,527 $ — $ 9,394,216 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 (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, 2018: Depreciation expense $ 4,601 $ 103 $ 22,498 $ 27,202 Amortization of debt discount — — 1,183 1,183 Amortization of debt issuance costs — — 2,921 2,921 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 |
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, 2018: Depreciation expense $ 4,601 $ 103 $ 22,498 $ 27,202 Amortization of debt discount — — 1,183 1,183 Amortization of debt issuance costs — — 2,921 2,921 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 |
Commitments (Tables)
Commitments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Activity Related to HMBS Repurchases [Table Text Block] | Activity with regard to HMBS repurchases, including MCA repurchases, follows: Active Inactive Total Number Amount Number Amount Number Amount Beginning balance, December 31, 2017 — $ — 137 $ 9,141 137 $ 9,141 Additions (1) 14 2,979 140 12,012 154 14,991 Recoveries, net (2) (2 ) (496 ) (27 ) (6,141 ) (29 ) (6,637 ) Transfers (2 ) (436 ) 2 436 — — Changes in value — — — (615 ) — (615 ) Ending balance, December 31, 2018 10 $ 2,047 252 $ 14,833 262 $ 16,880 (1) Total repurchases during the year ended December 31, 2018, includes 59 loans totaling $11.4 million related to MCA repurchases. (2) Includes amounts received upon assignment of loan to HUD, loan payoff, REO liquidation and claim proceeds less any amounts charged off as unrecoverable. |
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 2025 exclusive of renewal option periods. Our annual aggregate minimum rental commitments under these leases are summarized as follows: 2019 $ 17,808 2020 16,674 2021 15,787 2022 13,971 2023 3,545 Thereafter 1,409 69,194 Less: Sublease income (4,744 ) Total minimum lease payments, net $ 64,450 |
Contingencies (Tables)
Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 2017 2016 Beginning balance $ 19,229 $ 24,285 $ 36,615 Provision for representation and warranty obligations 4,649 (1,371 ) (4,060 ) New production reserves 7,437 702 864 Obligation assumed in connection with the acquisition of PHH 27,736 — — Payments made in connection with sales of MSRs — — (1,320 ) Charge-offs and other (1) (9,784 ) (4,387 ) (7,814 ) Ending balance $ 49,267 $ 19,229 $ 24,285 (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 Operatio_2
Quarterly Results of Operations (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Results of Operations (Unaudited) | Quarters Ended December 31, 2018 (1) September 30, June 30, March 31, Revenue $ 310,929 $ 238,278 $ 253,581 $ 260,257 Expenses 302,819 217,526 205,650 206,501 Other expense, net (2) (15,873 ) (61,025 ) (76,336 ) (48,791 ) Income (loss) from continuing operations before income taxes (7,763 ) (40,273 ) (28,405 ) 4,965 Income tax expense (benefit) (4,012 ) 845 1,348 2,348 Income (loss) from continuing operations (3,751 ) (41,118 ) (29,753 ) 2,617 Income from discontinued operations, net of income taxes 1,409 — — — Net income (loss) (2,342 ) (41,118 ) (29,753 ) 2,617 Net income attributable to non-controlling interests — (29 ) (78 ) (69 ) Net income (loss) attributable to Ocwen stockholders $ (2,342 ) $ (41,147 ) $ (29,831 ) $ 2,548 Earnings (loss) per share attributable to Ocwen stockholders - Basic and Diluted Continuing operations $ (0.03 ) $ (0.31 ) $ (0.22 ) $ 0.02 Discontinued operations 0.01 — — — $ (0.02 ) $ (0.31 ) $ (0.22 ) $ 0.02 (1) The quarter ended December 31, 2018 includes the results of operations of PHH from the acquisition date of October 4, 2018 through December 31, 2018. See Note 2 — Business Acquisition for additional information. (2) Includes a bargain purchase gain, net of tax, of $64.0 million recognized during the quarter ended December 31, 2018 in connection with the acquisition of PHH. 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 and Diluted Continuing operations $ (0.34 ) $ (0.05 ) $ (0.36 ) $ (0.26 ) Discontinued operations $ — $ — $ — $ — $ (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 MSR valuation adjustments, net) during the quarter ended December 31, 2017. This reflected 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. |
Organization, Business Enviro_4
Organization, Business Environment, Basis of Presentation and Significant Accounting Policies - Narrative (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018USD ($)Employees | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Jan. 01, 2018USD ($) | |
Description of Business and Basis of Presentation [Line Items] | ||||
Total number of employees | Employees | 7,200 | |||
Percentage of foreign based employees engaged in supporting loan servicing operations | 80.00% | |||
Current maturities of borrowings in next 12 months | $ 900,000 | |||
Debt instrument term | 364 days | |||
Cumulative effect of fair value election | $ 82,043 | |||
Threshold period past due for financing receivables to be delinquent | 89 days | |||
Gross recognition of right-of-use assets and lease liabilities | $ 60,000 | |||
Cumulative-effect of reduction to retained earnings | $ 5,600 | |||
Decrease in net cash provided by operating activities | $ (2,900) | $ (53,400) | ||
India [Member] | ||||
Description of Business and Basis of Presentation [Line Items] | ||||
Total number of employees | Employees | 4,100 | |||
Philippines [Member] | ||||
Description of Business and Basis of Presentation [Line Items] | ||||
Total number of employees | Employees | 500 | |||
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% | |||
Retained Earnings (Accumulated Deficit) [Member] | ||||
Description of Business and Basis of Presentation [Line Items] | ||||
Cumulative effect of fair value election | $ 82,043 |
Organization, Business Enviro_5
Organization, Business Environment, Basis of Presentation and Significant Accounting Policies - Schedule of Reclassifications of Prior Period Amounts to Confirm with Current Period Presentation (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Prior Period Adjustments Restatement [Line Items] | ||||
Debt service accounts | $ 26,626 | $ 33,726 | $ 42,822 | |
Other restricted cash | 41,252 | 9,179 | 3,027 | |
Restricted cash | 67,878 | 42,905 | ||
Loss on valuation of MSRs, at fair value | [1] | 5,853 | 86,964 | 305 |
MSR valuation adjustments, net | 153,457 | 52,962 | 124,029 | |
Other, net | 3,986 | 7,135 | 2,216 | |
Other, net | (2,464) | 707 | 11,679 | |
Proceeds from sale of real estate | $ 9,546 | 3,147 | 11,069 | |
Previously Reported [Member] | Other Assets [Member] | ||||
Prior Period Adjustments Restatement [Line Items] | ||||
Debt service accounts | 33,726 | |||
Other restricted cash | 9,179 | |||
Previously Reported [Member] | Servicing and Origination Expense [Member] | ||||
Prior Period Adjustments Restatement [Line Items] | ||||
Impairment charge (reversal) on MSRs | (3,366) | 10,813 | ||
Loss on valuation of MSRs, at fair value | 4,540 | 80,238 | ||
Previously Reported [Member] | Expense [Member] | ||||
Prior Period Adjustments Restatement [Line Items] | ||||
Amortization of MSRs | 51,788 | 32,978 | ||
Previously Reported [Member] | Operating Activities [Member] | ||||
Prior Period Adjustments Restatement [Line Items] | ||||
Impairment charge (reversal) on MSRs | (3,366) | 10,813 | ||
Loss on valuation of MSRs, at fair value | 4,540 | 80,238 | ||
Amortization of MSRs | 51,788 | 32,978 | ||
Realized and unrealized gains on derivative financial instruments | 191 | 1,724 | ||
Previously Reported [Member] | Investing Activities [Member] | ||||
Prior Period Adjustments Restatement [Line Items] | ||||
Other, net | 3,147 | 11,069 | ||
Restatement Adjustment [Member] | ||||
Prior Period Adjustments Restatement [Line Items] | ||||
Restricted cash | 42,905 | |||
MSR valuation adjustments, net | 52,962 | 124,029 | ||
Restatement Adjustment [Member] | Operating Activities [Member] | ||||
Prior Period Adjustments Restatement [Line Items] | ||||
MSR valuation adjustments, net | 52,962 | 124,029 | ||
Other, net | 191 | 1,724 | ||
Restatement Adjustment [Member] | Investing Activities [Member] | ||||
Prior Period Adjustments Restatement [Line Items] | ||||
Proceeds from sale of real estate | $ 3,147 | $ 11,069 | ||
[1] | Changes in fair value are recognized in MSR valuation adjustments, net in the consolidated statements of operations. |
Organization, Business Enviro_6
Organization, Business Environment, Basis of Presentation and Significant Accounting Policies - Schedule of Property and Equipment Useful Lives (Details) | 12 Months Ended |
Dec. 31, 2018 | |
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 |
Business Acquisitions - Narrati
Business Acquisitions - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | Oct. 04, 2018 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |||
Business Acquisition [Line Items] | ||||||||||||||||
Aggregate consideration paid | $ (358,396) | $ 0 | $ 0 | |||||||||||||
Cash paid by PHH to former holders of common stock | 325,000 | 0 | 0 | |||||||||||||
Cash consideration paid by Ocwen to former holders of PHH common stock | $ 33,396 | $ 0 | 0 | |||||||||||||
Common stock, shares, outstanding | 133,912,425 | 131,484,058 | 133,912,425 | 131,484,058 | ||||||||||||
Common stock, par value per share | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | ||||||||||||
Bargain purchase gain | $ 64,036 | $ 0 | 0 | |||||||||||||
Acquisition related costs | 13,700 | |||||||||||||||
Mortgage servicing rights, at fair value | $ 1,457,149 | $ 671,962 | 1,457,149 | 671,962 | 679,256 | $ 761,190 | ||||||||||
Revenue | 310,929 | $ 238,278 | $ 253,581 | $ 260,257 | 276,770 | $ 284,642 | $ 311,300 | $ 321,864 | 1,063,045 | [1] | 1,194,576 | [1] | 1,387,163 | [1] | ||
Servicing and subservicing fees | 934,336 | 989,376 | 1,186,620 | |||||||||||||
Income tax expense (benefit) | (4,012) | $ 845 | $ 1,348 | $ 2,348 | (51) | $ (20,418) | $ 2,828 | $ 2,125 | 529 | (15,516) | $ (6,986) | |||||
PHH Corporation [Member] | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Aggregate consideration paid | $ (358,396) | |||||||||||||||
Common stock, shares, outstanding | 32,581,485 | |||||||||||||||
Common stock, par value per share | $ 0.01 | |||||||||||||||
Cash per share paid to former holders of common stock | $ 11 | |||||||||||||||
Bargain purchase gain | $ 64,036 | 64,000 | ||||||||||||||
Acquisition related costs | 18,500 | |||||||||||||||
Mortgage Servicing Rights Sold Accounted For As Secured Borrowings [Member] | PHH Corporation [Member] | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Revenue | 120,600 | 134,600 | ||||||||||||||
Servicing and subservicing fees | 127,700 | 97,000 | ||||||||||||||
Base Erosion And Anti-Abuse Tax [Member] | PHH Corporation [Member] | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Income tax expense (benefit) | 300 | 200 | ||||||||||||||
Fair Value Adjustments In Connection With Acquisition [Member] | PHH Corporation [Member] | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Mortgage servicing rights, at fair value | $ 24,400 | $ (16,900) | 24,400 | (16,900) | ||||||||||||
Interest expense | 30,600 | (73,800) | ||||||||||||||
Fair Value Adjustments In Connection With Acquisition [Member] | Financing Liability Mortgage Servicing Rights Pledged [Member] | PHH Corporation [Member] | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Interest expense | $ 31,400 | $ (79,300) | ||||||||||||||
Software Development [Member] | PHH Corporation [Member] | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Estimated useful life | 3 years | |||||||||||||||
[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. |
Business Acquisitions - Schedul
Business Acquisitions - Schedule of Purchase Price Allocation of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Oct. 04, 2018 | Dec. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Business Acquisition [Line Items] | |||||
Total consideration paid to seller | $ (358,396) | $ 0 | $ 0 | ||
Bargain purchase gain | $ 64,036 | $ 0 | $ 0 | ||
PHH Corporation [Member] | |||||
Business Acquisition [Line Items] | |||||
Cash | $ 423,088 | ||||
Restricted cash | 38,813 | ||||
Mortgage servicing rights | 518,127 | ||||
Advances, net | 96,163 | ||||
Loans held for sale | 42,324 | ||||
Receivables, net | 46,838 | ||||
Premises and equipment, net | 15,203 | ||||
Real estate owned | 3,289 | ||||
Other assets | 6,293 | ||||
Assets related to discontinued operations | 2,017 | ||||
Financing liabilities (MSRs pledged, at fair value) | (481,020) | ||||
Other secured borrowings, net | (27,594) | ||||
Senior notes, net (Senior unsecured notes) | (120,624) | ||||
Accrued legal fees and settlements | (9,960) | ||||
Other accrued expenses | (36,889) | ||||
Loan repurchase and indemnification liability | (27,736) | ||||
Unfunded pension liability | (9,815) | ||||
Other liabilities | (34,131) | ||||
Liabilities related to discontinued operations | (21,954) | ||||
Total identifiable net assets | 422,432 | ||||
Total consideration paid to seller | (358,396) | ||||
Bargain purchase gain | $ 64,036 | $ 64,000 |
Business Acquisitions - Sched_2
Business Acquisitions - Schedule of Post Acquisition Results of Operations (Details) - PHH Corporation [Member] $ in Thousands | 3 Months Ended |
Dec. 31, 2018USD ($) | |
Business Acquisition [Line Items] | |
Revenues | $ 72,487 |
Expenses | 84,877 |
Other income (expense) | (19,132) |
Income tax benefit | (6,711) |
Net loss from continuing operations | $ (24,811) |
Business Acquisitions - Sched_3
Business Acquisitions - Schedule of Pro Forma Results of Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Business Acquisition, Pro Forma Information [Abstract] | ||
Revenues | $ 1,305,972 | $ 1,785,408 |
Loss from continuing operations, net of tax attributable to Ocwen common stockholders | $ (201,382) | $ (356,824) |
Business Acquisitions - Sched_4
Business Acquisitions - Schedule of Discontinued Operations for Post Acquisition Period (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||
Dec. 31, 2018 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Discontinued Operations and Disposal Groups [Abstract] | |||||||||
Net revenues | $ 413 | ||||||||
Total expenses | [1] | (996) | |||||||
Income before income taxes | 1,409 | ||||||||
Income tax expense (benefit) | 0 | ||||||||
Income from discontinued operations | $ 1,409 | $ 1,409 | $ 0 | $ 0 | $ 0 | $ 1,409 | $ 0 | $ 0 | |
[1] | Total expenses are shown net of a severance expense reversal that occurred as a result of voluntary post-acquisition employee departures and amortization of facility exit costs. |
Business Acquisitions - Sched_5
Business Acquisitions - Schedule of Carrying Amounts of Major Classes of Assets and Liabilities Related to Discontinued Operations (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |||
Mortgage loans held for sale | $ 650 | ||
Accounts receivable, net | 144 | ||
Total assets related to discontinued operations | 794 | $ 0 | |
Other liabilities | [1] | 18,265 | |
Total liabilities related to discontinued operations | $ 18,265 | $ 0 | |
[1] | The primary component of Other liabilities is an exit cost liability which includes $14.9 million of facility exit costs related to vacating certain facilities. |
Business Acquisitions - Sched_6
Business Acquisitions - Schedule of Carrying Amounts of Major Classes of Assets and Liabilities Related to Discontinued Operations (Footnote) (Details) $ in Millions | Dec. 31, 2018USD ($) |
Discontinued Operations and Disposal Groups [Abstract] | |
Exit cost liability | $ 14.9 |
Securitizations and Variable _3
Securitizations and Variable Interests Entities - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Servicing Assets at Fair Value [Line Items] | ||||
Average period to securitization | 30 days | |||
Pledge advance remittance period | 2 days | |||
Mortgage servicing rights, at fair value | $ 1,457,149 | $ 671,962 | $ 679,256 | $ 761,190 |
Advances | 249,382 | 211,793 | ||
Forward Loans [Member] | ||||
Servicing Assets at Fair Value [Line Items] | ||||
MSRs retained | $ 8,300 | $ 20,700 | $ 37,200 | |
Percentage of transferred residential loans serviced 60 days or more past due | 8.30% | 8.90% | ||
HECM [Member] | ||||
Servicing Assets at Fair Value [Line Items] | ||||
Loans held for investment, not pledged as collateral | $ 68,400 | $ 83,800 | ||
Residential Mortgage Backed Securitization Trusts [Member] | ||||
Servicing Assets at Fair Value [Line Items] | ||||
Mortgage servicing rights, at fair value | 200 | |||
Investment in the residual securities | 1,700 | |||
Advances | $ 1,200 | |||
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 _4
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, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Transfers and Servicing [Abstract] | |||
Proceeds received from securitizations | $ 1,290,682 | $ 3,256,625 | $ 5,197,071 |
Servicing fees collected | 45,046 | 41,509 | 14,616 |
Purchases of previously transferred assets, net of claims reimbursed | (4,395) | (5,948) | (1,271) |
Cash flows between transferor and transferee proceeds and payment related to transfers accounted for sales | $ 1,331,333 | $ 3,292,186 | $ 5,210,416 |
Securitizations and Variable _5
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, 2018 | Dec. 31, 2017 |
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||
UPB of loans transferred | $ 15,600,971 | $ 12,077,635 |
Maximum exposure to loss | 15,872,424 | 12,233,330 |
Mortgage Servicing Rights [Member] | ||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||
Carrying value of assets | 132,774 | 98,059 |
Advances And Match Funded Advances [Member] | ||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||
Carrying value of assets | $ 138,679 | $ 57,636 |
Securitizations and Variable _6
Securitizations and Variable Interests Entities - Schedule of Carrying Amounts of Assets that Relate to Continuing Involvement with Transferred Forward Loans (Parenthetical) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value Mortgage Servicing Rights [Member] | ||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||
Fair value of assets | $ 132,774 | $ 227 |
Securitizations and Variable _7
Securitizations and Variable Interests Entities - Schedule of Carrying Value of Assets and Liabilities of Consolidated Mortgage-backed Securitization Trusts (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||
Loans held for investment, at fair value | $ 5,498,719 | $ 4,715,831 |
Other financing liabilities | 1,127,613 | 593,518 |
Residential Mortgage Backed Securitization Trusts [Member] | ||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||
Loans held for investment, at fair value | 26,520 | 0 |
Other financing liabilities | $ 24,815 | $ 0 |
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, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||||
Financial assets: | ||||||||
Loans held for sale, at fair value | $ 176,525 | [1] | $ 214,262 | [1] | $ 284,632 | [1] | $ 309,054 | |
Financial liabilities: | ||||||||
Match funded liabilities | 778,284 | 998,618 | ||||||
Financing liabilities: | ||||||||
HMBS-related borrowings | 5,380,448 | 4,601,556 | ||||||
Other financing liabilities | 1,127,613 | 593,518 | ||||||
Other secured borrowings: | ||||||||
Total Other secured borrowings | 382,538 | 545,850 | ||||||
Senior notes: | ||||||||
Total Senior notes | 448,727 | 347,338 | ||||||
Mortgage servicing rights: | ||||||||
Mortgage servicing rights, at fair value | 1,457,149 | 671,962 | $ 679,256 | $ 761,190 | ||||
Total Mortgage servicing rights | 1,457,149 | 1,008,844 | ||||||
Carrying Value [Member] | ||||||||
Financial assets: | ||||||||
Total Loans held for sale | 242,622 | 238,358 | ||||||
Loans held for investment | 5,498,719 | 4,715,831 | ||||||
Financing liabilities: | ||||||||
Total Financing liabilities | 6,508,061 | 5,195,074 | ||||||
Other secured borrowings: | ||||||||
Total Other secured borrowings | 382,538 | 545,850 | ||||||
Senior notes: | ||||||||
Total Senior notes | 448,727 | 347,338 | ||||||
Mortgage servicing rights: | ||||||||
Total Mortgage servicing rights | 1,457,149 | 1,008,844 | ||||||
Fair Value [Member] | ||||||||
Financial assets: | ||||||||
Total Loans held for sale | 242,622 | 238,358 | ||||||
Loans held for investment | 5,498,719 | 4,715,831 | ||||||
Financing liabilities: | ||||||||
Total Financing liabilities | 6,491,689 | 5,175,049 | ||||||
Other secured borrowings: | ||||||||
Total Other secured borrowings | 383,162 | 555,523 | ||||||
Senior notes: | ||||||||
Total Senior notes | 426,147 | 358,422 | ||||||
Mortgage servicing rights: | ||||||||
Total Mortgage servicing rights | 1,457,149 | 1,090,707 | ||||||
Level 2 [Member] | Carrying Value [Member] | ||||||||
Financial assets: | ||||||||
Loans held for sale, at fair value | [2] | 176,525 | 214,262 | |||||
Corporate bonds | 450 | 313 | ||||||
Other secured borrowings: | ||||||||
Senior secured term loan | [3],[4] | 226,825 | 290,068 | |||||
Senior notes: | ||||||||
Senior unsecured notes | [3],[4] | 119,924 | 3,122 | |||||
Senior secured notes | [3],[4] | 328,803 | 344,216 | |||||
Derivative financial instrument assets (liabilities), at fair value | ||||||||
Interest rate lock commitments | [2] | 3,871 | 3,283 | |||||
Level 2 [Member] | Fair Value [Member] | ||||||||
Financial assets: | ||||||||
Loans held for sale, at fair value | [2] | 176,525 | 214,262 | |||||
Corporate bonds | 450 | 313 | ||||||
Other secured borrowings: | ||||||||
Senior secured term loan | [3],[4] | 227,449 | 299,741 | |||||
Senior notes: | ||||||||
Senior unsecured notes | [3],[4] | 119,258 | 2,872 | |||||
Senior secured notes | [3],[4] | 306,889 | 355,550 | |||||
Derivative financial instrument assets (liabilities), at fair value | ||||||||
Interest rate lock commitments | [2] | 3,871 | 3,283 | |||||
Level 3 [Member] | Carrying Value [Member] | ||||||||
Financial assets: | ||||||||
Loans held for sale, at lower of cost or fair value | [5] | 66,097 | 24,096 | |||||
Loans held for investment | [2] | 5,472,199 | 4,715,831 | |||||
Advances (including match funded) | [3] | 1,186,676 | 1,356,393 | |||||
Automotive dealer financing notes (including match funded) | [3] | 0 | 32,757 | |||||
Receivables, net | [3] | 198,262 | 199,529 | |||||
Mortgage-backed securities, at fair value | [2] | 1,502 | 1,592 | |||||
Financial liabilities: | ||||||||
Match funded liabilities | 778,284 | 998,618 | [3] | |||||
Financing liabilities: | ||||||||
HMBS-related borrowings | [2] | 5,380,448 | 4,601,556 | |||||
Other secured borrowings: | ||||||||
Other | [3] | 155,713 | 255,782 | |||||
Derivative financial instrument assets (liabilities), at fair value | ||||||||
Interest rate caps | [2] | 678 | 2,056 | |||||
Mortgage servicing rights: | ||||||||
Mortgage servicing rights, at fair value | [2] | 1,457,149 | 671,962 | |||||
Mortgage servicing rights, at amortized cost | [3],[6] | 0 | 336,882 | |||||
Level 3 [Member] | Carrying Value [Member] | Loans Held for Investments - Restricted for Securitization Investors [Member] | ||||||||
Financial assets: | ||||||||
Loans held for investment | 26,520 | 0 | ||||||
Level 3 [Member] | Carrying Value [Member] | Financing Liability - MSRs Pledged [Member] | ||||||||
Financing liabilities: | ||||||||
Other financing liabilities | [2] | 1,032,856 | 508,291 | |||||
Level 3 [Member] | Carrying Value [Member] | Financing Liability Owed to Securitization Investors [Member] | ||||||||
Financing liabilities: | ||||||||
Other financing liabilities | 24,815 | 0 | ||||||
Level 3 [Member] | Carrying Value [Member] | Other Financing Liabilities With Unrelated Parties [Member] | ||||||||
Financing liabilities: | ||||||||
Other financing liabilities | [3] | 69,942 | 85,227 | |||||
Level 3 [Member] | Fair Value [Member] | ||||||||
Financial assets: | ||||||||
Loans held for sale, at lower of cost or fair value | [5] | 66,097 | 24,096 | |||||
Loans held for investment | [2] | 5,472,199 | 4,715,831 | |||||
Advances (including match funded) | [3] | 1,186,676 | 1,356,393 | |||||
Automotive dealer financing notes (including match funded) | [3] | 0 | 32,590 | |||||
Receivables, net | [3] | 198,262 | 199,529 | |||||
Mortgage-backed securities, at fair value | [2] | 1,502 | 1,592 | |||||
Financial liabilities: | ||||||||
Match funded liabilities | [3] | 776,485 | 992,698 | |||||
Financing liabilities: | ||||||||
HMBS-related borrowings | [2] | 5,380,448 | 4,601,556 | |||||
Other secured borrowings: | ||||||||
Other | [3] | 155,713 | 255,782 | |||||
Derivative financial instrument assets (liabilities), at fair value | ||||||||
Interest rate caps | [2] | 678 | 2,056 | |||||
Mortgage servicing rights: | ||||||||
Mortgage servicing rights, at fair value | [2] | 1,457,149 | 671,962 | |||||
Mortgage servicing rights, at amortized cost | [3],[6] | 0 | 418,745 | |||||
Level 3 [Member] | Fair Value [Member] | Loans Held for Investments - Restricted for Securitization Investors [Member] | ||||||||
Financial assets: | ||||||||
Loans held for investment | 26,520 | 0 | ||||||
Level 3 [Member] | Fair Value [Member] | Financing Liability - MSRs Pledged [Member] | ||||||||
Financing liabilities: | ||||||||
Other financing liabilities | [2] | 1,032,856 | 508,291 | |||||
Level 3 [Member] | Fair Value [Member] | Financing Liability Owed to Securitization Investors [Member] | ||||||||
Financing liabilities: | ||||||||
Other financing liabilities | 24,815 | 0 | ||||||
Level 3 [Member] | Fair Value [Member] | Other Financing Liabilities With Unrelated Parties [Member] | ||||||||
Financing liabilities: | ||||||||
Other financing liabilities | [3] | 53,570 | 65,202 | |||||
Level 1 [Member] | Carrying Value [Member] | ||||||||
Financial assets: | ||||||||
U.S. Treasury notes | [2] | 1,064 | 1,567 | |||||
Derivative financial instrument assets (liabilities), at fair value | ||||||||
Forward mortgage-backed securities trades | [2] | (4,983) | (545) | |||||
Level 1 [Member] | Fair Value [Member] | ||||||||
Financial assets: | ||||||||
U.S. Treasury notes | [2] | 1,064 | 1,567 | |||||
Derivative financial instrument assets (liabilities), at fair value | ||||||||
Forward mortgage-backed securities trades | [2] | $ (4,983) | $ (545) | |||||
[1] | At December 31, 2018, 2017 and 2016, the balances include $(7.2) million, $5.0 million and $4.9 million, respectively, of fair value adjustments. | |||||||
[2] | Measured at fair value on a recurring basis. | |||||||
[3] | Disclosed, but not measured, at fair value. | |||||||
[4] | The carrying values are net of unamortized debt issuance costs and discount. See Note 13 — Borrowings for additional information. | |||||||
[5] | Measured at fair value on a non-recurring basis. | |||||||
[6] | 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. The balance at December 31, 2017 includes the impaired government-insured stratum of amortization method MSRs, which was measured at fair value on a non-recurring basis and reported net of the valuation allowance. At December 31, 2017, the carrying value of this stratum was $158.0 million before applying the valuation allowance of $24.8 million. |
Fair Value - Schedule of Carr_2
Fair Value - Schedule of Carrying Amounts and Estimated Fair Values of Financial Instruments and Nonfinancial Assets Measured at Fair Value on a Recurring or Non-recurring basis or Disclosed, but not Carried, at Fair Value (Footnote) (Details) - Impaired Government Insured Stratum [Member] $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Servicing asset at carrying value | $ 158 |
Valuation allowance of MSRs | $ 24.8 |
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, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||||
Total realized and unrealized gains and (losses): | ||||||
Included in earnings | $ 153,500 | $ 4,500 | $ 78,300 | |||
Loans Held for Investment [Member] | Level 3 [Member] | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Beginning balance | 4,715,831 | 3,565,716 | 2,488,253 | |||
Purchases, issuances, sales and settlements | ||||||
Purchases | 0 | 0 | 0 | |||
Issuances | 920,476 | [1] | 1,277,615 | 1,107,046 | ||
Sales | 0 | 0 | 0 | |||
Settlements | [1] | (400,521) | (444,388) | (243,596) | ||
Loans held for sale, at fair value | (1,039) | (3,803) | ||||
Receivables, net | (158) | (3,583) | ||||
Other assets | (411) | (1,929) | ||||
Purchases, issuances, sales and settlements, total | 518,347 | 823,912 | 863,450 | |||
Total realized and unrealized gains and (losses): | ||||||
Included in earnings | 238,021 | [1],[2] | 326,203 | [2] | 214,013 | |
Included in Other comprehensive income | 0 | 0 | 0 | |||
Included in earnings and other comprehensive income | 238,021 | [2] | 326,203 | [2] | 214,013 | |
Transfers in and / or out of Level 3 | 0 | 0 | 0 | |||
Ending balance | 5,472,199 | 4,715,831 | 3,565,716 | |||
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 | (4,601,556) | (3,433,781) | (2,391,362) | |||
Purchases, issuances, sales and settlements | ||||||
Purchases | 0 | 0 | 0 | |||
Issuances | (948,917) | [1] | (1,281,543) | (1,086,795) | ||
Sales | 0 | 0 | 0 | |||
Settlements | [1] | 391,985 | 418,503 | 230,045 | ||
Loans held for sale, at fair value | 0 | |||||
Receivables, net | 0 | |||||
Other assets | 0 | |||||
Purchases, issuances, sales and settlements, total | (556,932) | (863,040) | (856,750) | |||
Total realized and unrealized gains and (losses): | ||||||
Included in earnings | (221,960) | [1],[2] | (304,735) | [2] | (185,669) | |
Included in Other comprehensive income | 0 | 0 | 0 | |||
Included in earnings and other comprehensive income | (221,960) | [2] | (304,735) | [2] | (185,669) | |
Transfers in and / or out of Level 3 | 0 | 0 | 0 | |||
Ending balance | (5,380,448) | (4,601,556) | (3,433,781) | |||
HMBS - Related Borrowings [Member] | Level 3 [Member] | Calls and Other [Member] | ||||||
Total realized and unrealized gains and (losses): | ||||||
Included in earnings | [1],[2] | 0 | ||||
Loans Held for Investments - Restricted for Securitization Investors [Member] | Level 3 [Member] | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Beginning balance | 0 | |||||
Purchases, issuances, sales and settlements | ||||||
Purchases | 0 | |||||
Issuances | 0 | |||||
Consolidation of mortgage-backed securitization trusts | 28,373 | |||||
Sales | 0 | |||||
Settlements | (1,853) | |||||
Purchases, issuances, sales and settlements, total | 26,520 | |||||
Total realized and unrealized gains and (losses): | ||||||
Ending balance | 26,520 | 0 | ||||
Financing Liability Owed to Securitization Investors [Member] | Level 3 [Member] | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Beginning balance | 0 | |||||
Purchases, issuances, sales and settlements | ||||||
Purchases | 0 | |||||
Issuances | 0 | |||||
Consolidation of mortgage-backed securitization trusts | (26,643) | |||||
Sales | 0 | |||||
Settlements | 1,828 | |||||
Purchases, issuances, sales and settlements, total | (24,815) | |||||
Total realized and unrealized gains and (losses): | ||||||
Ending balance | (24,815) | 0 | ||||
Mortgage Backed Securities [Member] | Level 3 [Member] | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Beginning balance | 1,592 | 8,342 | 7,985 | |||
Purchases, issuances, sales and settlements | ||||||
Purchases | 0 | 0 | 0 | |||
Issuances | 0 | [1] | 0 | 0 | ||
Sales | 0 | 0 | 0 | |||
Settlements | [1] | 0 | 0 | 0 | ||
Transfer from MSRs carried at amortized cost | 0 | |||||
Loans held for sale, at fair value | 0 | |||||
Receivables, net | 0 | |||||
Other assets | 0 | |||||
Purchases, issuances, sales and settlements, total | 0 | 0 | 0 | |||
Total realized and unrealized gains and (losses): | ||||||
Included in earnings | (90) | [1],[2] | (6,750) | [2] | 357 | |
Included in Other comprehensive income | 0 | 0 | 0 | |||
Included in earnings and other comprehensive income | (90) | [2] | (6,750) | [2] | 357 | |
Transfers in and / or out of Level 3 | 0 | 0 | 0 | |||
Ending balance | 1,502 | 1,592 | 8,342 | |||
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 | (508,291) | (477,707) | (541,704) | |||
Purchases, issuances, sales and settlements | ||||||
Purchases | (667) | 0 | 0 | |||
Recognized (assumed) in connection with the acquisition of PHH | (481,020) | |||||
Issuances | (279,586) | [1] | (54,601) | 0 | ||
Consolidation of mortgage-backed securitization trusts | 0 | |||||
Sales | 0 | 0 | 0 | |||
Settlements | [1] | 211,766 | 59,190 | 63,997 | ||
Transfer from MSRs carried at amortized cost | 0 | |||||
Loans held for sale, at fair value | 0 | |||||
Receivables, net | 0 | |||||
Other assets | 0 | |||||
Purchases, issuances, sales and settlements, total | (549,507) | 4,589 | 63,997 | |||
Total realized and unrealized gains and (losses): | ||||||
Included in earnings | 19,269 | [1],[2] | (41,282) | [2] | 0 | |
Included in Other comprehensive income | 0 | 0 | 0 | |||
Included in earnings and other comprehensive income | 24,942 | [2] | (35,173) | [2] | 0 | |
Transfers in and / or out of Level 3 | 0 | 0 | 0 | |||
Ending balance | (1,032,856) | (508,291) | (477,707) | |||
Financing Liability - MSRs Pledged [Member] | Level 3 [Member] | Calls and Other [Member] | ||||||
Total realized and unrealized gains and (losses): | ||||||
Included in earnings | [1],[2] | 5,673 | 6,109 | |||
Derivatives [Member] | Level 3 [Member] | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Beginning balance | 2,056 | 1,836 | 2,042 | |||
Purchases, issuances, sales and settlements | ||||||
Purchases | 95 | 655 | 1,337 | |||
Issuances | 0 | [1] | 0 | 0 | ||
Consolidation of mortgage-backed securitization trusts | 0 | |||||
Sales | 0 | 0 | 0 | |||
Settlements | [1] | (371) | (445) | (156) | ||
Loans held for sale, at fair value | 0 | |||||
Receivables, net | 0 | |||||
Other assets | 0 | |||||
Purchases, issuances, sales and settlements, total | (276) | 210 | 1,181 | |||
Total realized and unrealized gains and (losses): | ||||||
Included in earnings | (1,102) | [1],[2] | 10 | [2] | (1,387) | |
Included in Other comprehensive income | 0 | 0 | 0 | |||
Included in earnings and other comprehensive income | (1,102) | [2] | 10 | [2] | (1,387) | |
Transfers in and / or out of Level 3 | 0 | 0 | 0 | |||
Ending balance | 678 | 2,056 | 1,836 | |||
Derivatives [Member] | Level 3 [Member] | Calls and Other [Member] | ||||||
Total realized and unrealized gains and (losses): | ||||||
Included in earnings | [1],[2] | 0 | ||||
Mortgage Servicing Rights [Member] | Level 3 [Member] | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Beginning balance | 671,962 | 679,256 | 761,190 | |||
Purchases, issuances, sales and settlements | ||||||
Purchases | 13,712 | 0 | 0 | |||
Recognized (assumed) in connection with the acquisition of PHH | 518,127 | |||||
Issuances | 0 | [1] | (2,214) | (1,548) | ||
Consolidation of mortgage-backed securitization trusts | 0 | |||||
Sales | (6,240) | (540) | (148) | |||
Settlements | [1] | (5,880) | 0 | 0 | ||
Transfer from MSRs carried at amortized cost | 418,925 | |||||
Loans held for sale, at fair value | 0 | |||||
Receivables, net | 0 | |||||
Other assets | 0 | |||||
Purchases, issuances, sales and settlements, total | 938,644 | (2,754) | (1,696) | |||
Total realized and unrealized gains and (losses): | ||||||
Included in earnings | (153,457) | [1],[2] | (4,540) | [2] | (80,238) | |
Included in Other comprehensive income | 0 | 0 | 0 | |||
Included in earnings and other comprehensive income | (153,457) | [2] | (4,540) | [2] | (80,238) | |
Transfers in and / or out of Level 3 | 0 | 0 | 0 | |||
Ending balance | 1,457,149 | $ 671,962 | $ 679,256 | |||
Mortgage Servicing Rights [Member] | Level 3 [Member] | Calls and Other [Member] | ||||||
Total realized and unrealized gains and (losses): | ||||||
Included in earnings | [1],[2] | $ 0 | ||||
[1] | On January 18, 2018, Ocwen received a lump-sum payment of $279.6 million in accordance with terms of the agreements with NRZ. A $16.6 million reduction in the fair value of the Financing Liability - MSRs Pledged was recognized in connection with the receipt of the lump-sum payment. See Note 9 — Rights to MSRs. | |||||
[2] | 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. A reduction in the fair value of the Financing Liability - MSRs Pledged of $37.6 million was recognized at the time of the initial transfer of the MSRs. See Note 9 — Rights to MSRs. |
Fair Value - Summary of Recon_2
Fair Value - Summary of Reconciliation of the Changes in Fair Value of Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis (Footnote) (Details) - USD ($) $ in Thousands | Jan. 18, 2018 | Sep. 01, 2017 | Sep. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Proceeds from sale of mortgage servicing rights accounted for as a financing | $ 279,586 | $ 54,601 | $ 0 | |||
Gain (loss) attributable to derivatives | (1,100) | 100 | 300 | |||
Losses attributable to MSRs held | (153,500) | (4,500) | $ (78,300) | |||
NRZ [Member] | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Proceeds from sale of mortgage servicing rights accounted for as a financing | $ 279,600 | 279,600 | $ 54,600 | |||
Transfers upon receipt of consents, MSRs | $ 15,900,000 | |||||
Decrease in fair value of portion of Financing liability - MSRs pledged | $ 37,600 | $ 16,600 |
Fair Value - Schedule of Signif
Fair Value - Schedule of Significant Assumptions used in Valuation (Details) - $ / loan | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Loans Held for Investment [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair value valuation assumptions, term | 5 years 10 months 24 days | 6 years 4 months 24 days |
Mortgage Servicing Rights - Amortized Costs [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Advance financing cost | 5 years | |
Interest rate for computing float earnings | 5 years | |
Weighted average cost to service (in dollars) | 108 | |
Fair Value Agency Mortgage Servicing Rights [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Advance financing cost | 5 years | 5 years |
Interest rate for computing float earnings | 5 years | 5 years |
Weighted average cost to service (in dollars) | 90 | 64 |
Fair Value Non-Agency Mortgage Servicing Rights [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Interest rate for computing float earnings | 5 years | 5 years |
Fair value inputs financing costs float earnings, basis spread | 0.50% | 0.50% |
Fair value input, interest rate | 2.75% | 2.75% |
Weighted average cost to service (in dollars) | 297 | 305 |
Automotive Dealer Financing Notes [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair value valuation assumptions, term | 2 months 19 days | |
Fair value inputs average note rate | 8.50% | |
Fair value inputs loan loss rate | 21.50% | |
HMBS - Related Borrowings [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair value valuation assumptions, term | 5 years 10 months 24 days | 6 years 4 months 24 days |
Mortgage Servicing Rights Pledged [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Interest rate for computing float earnings | 5 years | |
Fair value inputs financing costs float earnings, basis spread | 0.50% | 0.50% |
Fair value input, interest rate | 2.75% | 2.75% |
Weighted average cost to service (in dollars) | 234 | 311 |
Measurement Input, Prepayment Rate [Member] | Loans Held for Investment [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value Measurement Valuation Assumptions | 14.70% | 13.10% |
Measurement Input, Prepayment Rate [Member] | Mortgage Servicing Rights - Amortized Costs [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value Measurement Valuation Assumptions | 8.80% | |
Measurement Input, Prepayment Rate [Member] | Fair Value Agency Mortgage Servicing Rights [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value Measurement Valuation Assumptions | 8.50% | 8.10% |
Measurement Input, Prepayment Rate [Member] | Fair Value Non-Agency Mortgage Servicing Rights [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value Measurement Valuation Assumptions | 15.40% | 16.60% |
Measurement Input, Prepayment Rate [Member] | HMBS - Related Borrowings [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value Measurement Valuation Assumptions | 14.70% | 13.10% |
Measurement Input, Prepayment Rate [Member] | Mortgage Servicing Rights Pledged [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value Measurement Valuation Assumptions | 13.90% | 17.00% |
Measurement Input, Default Rate [Member] | Mortgage Servicing Rights - Amortized Costs [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value Measurement Valuation Assumptions | 10.90% | |
Measurement Input, Default Rate [Member] | Fair Value Agency Mortgage Servicing Rights [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value Measurement Valuation Assumptions | 6.60% | 1.00% |
Measurement Input, Default Rate [Member] | Fair Value Non-Agency Mortgage Servicing Rights [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value Measurement Valuation Assumptions | 27.10% | 28.50% |
Measurement Input, Default Rate [Member] | Mortgage Servicing Rights Pledged [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value Measurement Valuation Assumptions | 20.30% | 28.90% |
Measurement Input, Discount Rate [Member] | Loans Held for Investment [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value Measurement Valuation Assumptions | 3.40% | 3.20% |
Measurement Input, Discount Rate [Member] | Mortgage Servicing Rights - Amortized Costs [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value Measurement Valuation Assumptions | 9.20% | |
Measurement Input, Discount Rate [Member] | Fair Value Agency Mortgage Servicing Rights [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value Measurement Valuation Assumptions | 9.10% | 9.00% |
Measurement Input, Discount Rate [Member] | Fair Value Non-Agency Mortgage Servicing Rights [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value Measurement Valuation Assumptions | 12.80% | 13.00% |
Measurement Input, Discount Rate [Member] | Automotive Dealer Financing Notes [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value Measurement Valuation Assumptions | 10.00% | |
Measurement Input, Discount Rate [Member] | HMBS - Related Borrowings [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value Measurement Valuation Assumptions | 3.30% | 3.11% |
Measurement Input, Discount Rate [Member] | Mortgage Servicing Rights Pledged [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value Measurement Valuation Assumptions | 12.00% | 13.70% |
LIBOR [Member] | Mortgage Servicing Rights Pledged [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Interest rate for computing float earnings | 1 month | |
Minimum [Member] | Loans Held for Investment [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair value valuation assumptions, term | 3 years | 4 years 4 months 24 days |
Minimum [Member] | HMBS - Related Borrowings [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair value valuation assumptions, term | 3 years | 4 years 4 months 24 days |
Minimum [Member] | Measurement Input, Prepayment Rate [Member] | Loans Held for Investment [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value Measurement Valuation Assumptions | 6.80% | 5.40% |
Minimum [Member] | Measurement Input, Prepayment Rate [Member] | HMBS - Related Borrowings [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value Measurement Valuation Assumptions | 6.80% | 5.40% |
Maximum [Member] | Loans Held for Investment [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair value valuation assumptions, term | 7 years 7 months 6 days | 8 years 1 month 6 days |
Maximum [Member] | HMBS - Related Borrowings [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair value valuation assumptions, term | 7 years 7 months 6 days | 8 years 1 month 6 days |
Maximum [Member] | Measurement Input, Prepayment Rate [Member] | Loans Held for Investment [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value Measurement Valuation Assumptions | 38.40% | 51.90% |
Maximum [Member] | Measurement Input, Prepayment Rate [Member] | HMBS - Related Borrowings [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value Measurement Valuation Assumptions | 38.40% | 51.90% |
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, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||||
Movement In Loans Held For Sale At Fair Value [Roll Forward] | ||||||
Beginning balance | $ 214,262 | [1] | $ 284,632 | [1] | $ 309,054 | |
Originations and purchases | 944,627 | 2,678,372 | 4,211,871 | |||
Proceeds from sales | (1,019,211) | (2,785,422) | (4,236,158) | |||
Principal collections | (20,774) | (4,867) | (11,620) | |||
Acquired in connection with the acquisition of PHH | 42,324 | 0 | 0 | |||
Loans held for investment, at fair value | 1,038 | 3,803 | 0 | |||
Loans held for sale - Lower of cost or fair value | 0 | 0 | 3,266 | |||
Receivables | (1,132) | 0 | 0 | |||
Real estate owned (Other assets) | (1,886) | 0 | 0 | |||
Gain on sale of loans | 34,724 | 35,429 | 13,421 | |||
Increase (decrease) in fair value of loans | (13,435) | 151 | (7,030) | |||
Other | (4,012) | 2,164 | 1,828 | |||
Ending balance | [1] | $ 176,525 | $ 214,262 | $ 284,632 | ||
[1] | At December 31, 2018, 2017 and 2016, the balances include $(7.2) million, $5.0 million and $4.9 million, respectively, of fair value adjustments. |
Loans Held for Sale - Summary_2
Loans Held for Sale - Summary of Activity in Balance of Loans Held for Sale, at Fair Value (Footnote) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Receivables [Abstract] | |||
Fair value adjustments of loans held-for-sale | $ (7.2) | $ 5 | $ 4.9 |
Loans Held for Sale - Summary_3
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, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||||
Movement In Loans Held For Sale At Fair Value [Roll Forward] | ||||||
Beginning balance | $ 24,096 | [1] | $ 29,374 | [1] | $ 104,992 | |
Purchases | 770,563 | 1,016,791 | 1,878,561 | |||
Proceeds from sales | (569,718) | (861,569) | (1,699,427) | |||
Principal collections | (15,413) | (10,207) | (22,607) | |||
Receivables, net | (155,586) | (171,797) | (256,336) | |||
Real estate owned (Other assets) | (2,355) | (875) | (7,675) | |||
Loans held for sale - Fair value | 0 | 0 | (3,266) | |||
Gain on sale of loans | 3,659 | 11,683 | 24,565 | |||
(Increase) decrease in valuation allowance | (4,251) | 2,746 | 4,594 | |||
Other | 15,102 | 7,950 | 5,973 | |||
Ending balance | [1] | $ 66,097 | $ 24,096 | $ 29,374 | ||
[1] | At December 31, 2018, 2017 and 2016, the balances include $51.8 million, $19.6 million and $24.8 million, respectively, of loans that we repurchased from Ginnie Mae guaranteed securitizations pursuant to Ginnie Mae servicing guidelines. We may repurchase loans that have been modified, to facilitate loss reduction strategies, or as otherwise obligated as a Ginnie Mae servicer. Repurchased loans may be modified or otherwise remediated through loss mitigation activities, may be sold to a third party, or are reclassified to receivables. |
Loans Held for Sale - Summary_4
Loans Held for Sale - Summary of Activity in Balance of Loans Held for Sale, at Lower of Cost or Fair Value (Footnote) (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Ginnie Mae [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans held for sale, at lower of cost or fair value | $ 51.8 | $ 19.6 | $ 24.8 |
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, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Allowance for Loan and Lease Losses [Roll Forward] | |||
Beginning balance | $ 7,318 | $ 10,064 | $ 14,658 |
Provision | 4,033 | 3,109 | 3,599 |
Transfer from Liability for indemnification obligations (Other liabilities) | 2,021 | 3,246 | 2,368 |
Sales of loans | (1,824) | (9,415) | (10,208) |
Other | 21 | 314 | (353) |
Ending balance | $ 11,569 | $ 7,318 | $ 10,064 |
Loans Held for Sale - Summary_5
Loans Held for Sale - Summary of Activity in Gain on Loans Held for Sale, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Gain on sales of loans, net | $ 85,694 | $ 114,247 | $ 93,308 |
Change in fair value of IRLCs | 3,809 | (3,089) | (55) |
Change in fair value of loans held for sale | (11,569) | 1,475 | 4,595 |
Loss on economic hedge instruments | 136 | (8,529) | (6,592) |
Other | (327) | (702) | (865) |
Gain on loans held for sale, net | 77,743 | 103,402 | 90,391 |
MSRs Retained on Transfers of Forward Loans [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Gain on sales of loans, net | 7,412 | 20,900 | 36,049 |
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 | 45,020 | 50,194 | 24,742 |
Gain on Sale of Repurchased Ginnie Mae Loans [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Gain on sales of loans, net | 3,659 | 11,683 | 24,565 |
Other, Net [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Gain on sales of loans, net | $ 29,603 | $ 31,470 | $ 7,952 |
Advances - Schedule of Advance
Advances - Schedule of Advance Payments by Financial Institution on Foreclosed Properties (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Advances On Behalf of Borrowers [Line Items] | ||||
Advances | $ 272,641 | $ 228,258 | ||
Allowance for losses | (23,259) | (16,465) | $ (37,952) | $ (41,901) |
Advances, net | 249,382 | 211,793 | $ 257,882 | $ 444,298 |
Principal And Interest [Member] | ||||
Advances On Behalf of Borrowers [Line Items] | ||||
Advances | 43,671 | 20,207 | ||
Taxes And Insurance [Member] | ||||
Advances On Behalf of Borrowers [Line Items] | ||||
Advances | 160,373 | 144,454 | ||
Foreclosures Bankruptcy And Other [Member] | ||||
Advances On Behalf of Borrowers [Line Items] | ||||
Advances | $ 68,597 | $ 63,597 |
Advances - Schedule of Activity
Advances - Schedule of Activity in Advances (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Advances [Roll Forward] | ||||
Advances, beginning balance | $ 211,793 | $ 257,882 | $ 444,298 | |
Acquired in connection with the acquisition of PHH | 96,163 | 0 | 0 | |
Transfers to match funded advances | (71,623) | 0 | 0 | |
Sales | [1] | (32,081) | (444) | (24,631) |
Collections, charge-offs and other, net | 51,924 | (67,132) | (165,734) | |
Net (increase) decrease in allowance for losses | (6,794) | 21,487 | 3,949 | |
Advances, ending balance | $ 249,382 | $ 211,793 | $ 257,882 | |
[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, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | |||
Beginning balance | $ 16,465 | $ 37,952 | $ 41,901 |
Provision | 5,732 | 21,429 | (2,043) |
Net charge-offs and other | 1,062 | (42,916) | (1,906) |
Ending balance | $ 23,259 | $ 16,465 | $ 37,952 |
Match Funded Assets - Schedule
Match Funded Assets - Schedule of Match Funded Advances on Residential Loans (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | |
Match Funded Advances [Line Items] | |||
Match funded assets | $ 937,294 | $ 1,177,357 | |
Automotive Dealer Financing Notes [Member] | |||
Match Funded Advances [Line Items] | |||
Allowance for losses | [1] | 0 | (2,635) |
Automotive dealer financing notes, net | [1] | 0 | 35,392 |
Match funded assets | 0 | 32,757 | |
Residential Mortgage [Member] | |||
Match Funded Advances [Line Items] | |||
Match funded assets | 937,294 | 1,144,600 | |
Residential Mortgage [Member] | Principal And Interest [Member] | |||
Match Funded Advances [Line Items] | |||
Match funded assets | 412,897 | 523,248 | |
Residential Mortgage [Member] | Taxes And Insurance [Member] | |||
Match Funded Advances [Line Items] | |||
Match funded assets | 374,853 | 439,857 | |
Residential Mortgage [Member] | Foreclosures Bankruptcy And Other [Member] | |||
Match Funded Advances [Line Items] | |||
Match funded assets | $ 149,544 | $ 181,495 | |
[1] | (1)In January 2018, we terminated our automotive dealer loan financing facility. Automotive dealer financing notes not pledged to our automotive dealer loan financing facility are reported as Other assets. See Note 12 — Other Assets. |
Match Funded Assets - Schedul_2
Match Funded Assets - Schedule of Activity in Match Funded Advances (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Match Funded Advances [Roll Forward] | |||
Decrease (increase) in allowance for losses | $ (6,794) | $ 21,487 | $ 3,949 |
Residential Mortgage [Member] | |||
Match Funded Advances [Roll Forward] | |||
Beginning balance | 1,144,600 | 1,451,964 | 1,706,768 |
Sales | 0 | (691) | (8,923) |
New advances (collections), net | (278,929) | (306,673) | (245,881) |
Ending balance | 937,294 | 1,144,600 | 1,451,964 |
Automotive Dealer Financing Notes [Member] | |||
Match Funded Advances [Roll Forward] | |||
Beginning balance | 32,757 | 0 | |
Transfer (to) from other assets | (36,896) | 25,180 | |
Sales | 0 | ||
New advances (collections), net | 1,504 | 10,212 | |
Decrease (increase) in allowance for losses | 2,635 | (2,635) | |
Ending balance | $ 0 | $ 32,757 | $ 0 |
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, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Servicing Asset at Amortized Cost, Balance [Roll Forward] | |||||
Fair value election - transfer of MSRs carried at fair value | $ (336,882) | $ 0 | $ 0 | ||
Estimated fair value at end of year | 1,457,149 | 671,962 | 679,256 | $ 761,190 | |
Mortgage Servicing Rights - Amortized Costs [Member] | |||||
Servicing Asset at Amortized Cost, Balance [Roll Forward] | |||||
Beginning balance, MSRs | 336,882 | 363,722 | 377,379 | ||
Fair value election - transfer of MSRs carried at fair value | [1] | (361,670) | 0 | 0 | |
Additions recognized in connection with asset acquisitions | 0 | 1,658 | 17,356 | ||
Additions recognized on the sale of mortgage loans | 0 | 20,738 | 37,230 | ||
Sales | 0 | (1,066) | (24,452) | ||
Servicing transfers and adjustments | 0 | 252 | 0 | ||
Mortgage servicing rights, gross | (24,788) | 385,304 | 407,513 | ||
Valuation allowance of MSRs | [1],[2] | 24,788 | 3,366 | (10,813) | |
Amortization | [1] | 0 | (51,788) | (32,978) | |
Ending balance, MSRs | 0 | 336,882 | 363,722 | ||
Estimated fair value at end of year | $ 0 | $ 418,745 | $ 467,911 | ||
[1] | 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 to retained earnings as of January 1, 2018 to reflect the excess of the fair value of the Agency MSRs over their carrying amount. We also recognized the tax effect of this adjustment through an increase in retained earnings of $6.8 million and a deferred tax asset for the same amount. However, we established a full valuation allowance on the resulting deferred tax asset through a reduction in retained earnings. The government-insured MSRs were impaired by $24.8 million at December 31, 2017; therefore, these MSRs were already effectively carried at fair value. | ||||
[2] | Impairment of MSRs is recognized in MSR valuation adjustments, net in the consolidated statements of operations for 2017 and 2016. Impairment valuation allowance balance of $24.8 million was reclassified to reduce the carrying value of the related MSRs on January 1, 2018 in connection with our fair value election. See Note 4 — Fair Value for additional information regarding impairment and the valuation allowance. |
Mortgage Servicing - Summary _2
Mortgage Servicing - Summary of Activity in Carrying Value of Amortization Method Servicing Assets (Footnote) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Servicing Asset at Amortized Cost [Line Items] | ||||
Cumulative effect of fair value election | $ 82,043 | |||
Retained Earnings (Accumulated Deficit) [Member] | ||||
Servicing Asset at Amortized Cost [Line Items] | ||||
Cumulative effect of fair value election | 82,043 | |||
Mortgage Servicing Rights - Amortized Costs [Member] | ||||
Servicing Asset at Amortized Cost [Line Items] | ||||
Valuation allowance of MSRs | [1],[2] | 24,788 | $ 3,366 | $ (10,813) |
Mortgage Servicing Rights - Amortized Costs [Member] | Retained Earnings (Accumulated Deficit) [Member] | ||||
Servicing Asset at Amortized Cost [Line Items] | ||||
Tax effect of adjustment on retained earnings | $ 6,800 | |||
Impaired Government Insured Stratum [Member] | ||||
Servicing Asset at Amortized Cost [Line Items] | ||||
Valuation allowance of MSRs | $ 24,800 | |||
[1] | 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 to retained earnings as of January 1, 2018 to reflect the excess of the fair value of the Agency MSRs over their carrying amount. We also recognized the tax effect of this adjustment through an increase in retained earnings of $6.8 million and a deferred tax asset for the same amount. However, we established a full valuation allowance on the resulting deferred tax asset through a reduction in retained earnings. The government-insured MSRs were impaired by $24.8 million at December 31, 2017; therefore, these MSRs were already effectively carried at fair value. | |||
[2] | Impairment of MSRs is recognized in MSR valuation adjustments, net in the consolidated statements of operations for 2017 and 2016. Impairment valuation allowance balance of $24.8 million was reclassified to reduce the carrying value of the related MSRs on January 1, 2018 in connection with our fair value election. See Note 4 — Fair Value for additional information regarding impairment and the valuation allowance. |
Mortgage Servicing - Summary _3
Mortgage Servicing - Summary of Activity Related to Fair Value Servicing Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Servicing Asset at Fair Value, Amount [Roll Forward] | ||||
Beginning balance | $ 671,962 | $ 679,256 | $ 761,190 | |
Fair value election - transfer from MSRs carried at amortized cost | 336,882 | 0 | 0 | |
Cumulative effect of fair value election | 82,043 | 0 | 0 | |
Sales | (6,240) | (540) | (148) | |
Recognized on the sale of residential mortgage loans | 8,279 | 162 | 0 | |
Recognized in connection with the acquisition of PHH | 518,127 | 0 | 0 | |
Purchase of MSRs | 5,433 | 0 | 0 | |
Servicing transfers and adjustments | (5,880) | (2,376) | (1,548) | |
Changes in valuation inputs or other assumptions | [1] | 5,853 | 86,964 | 305 |
Realization of expected future cash flows and other changes | [1] | (159,310) | (91,504) | (80,543) |
Ending balance | 1,457,149 | 671,962 | 679,256 | |
Fair Value Agency Mortgage Servicing Rights [Member] | ||||
Servicing Asset at Fair Value, Amount [Roll Forward] | ||||
Beginning balance | 11,960 | 13,357 | 15,071 | |
Fair value election - transfer from MSRs carried at amortized cost | 336,882 | 0 | 0 | |
Cumulative effect of fair value election | 82,043 | 0 | 0 | |
Sales | (4,748) | 0 | (3) | |
Recognized on the sale of residential mortgage loans | 8,279 | 162 | 0 | |
Recognized in connection with the acquisition of PHH | 494,348 | 0 | 0 | |
Purchase of MSRs | 5,433 | 0 | 0 | |
Servicing transfers and adjustments | (1,047) | 0 | 0 | |
Changes in valuation inputs or other assumptions | [1] | 11,558 | 243 | 305 |
Realization of expected future cash flows and other changes | [1] | (79,121) | (1,802) | (2,016) |
Ending balance | 865,587 | 11,960 | 13,357 | |
Fair Value Non-Agency Mortgage Servicing Rights [Member] | ||||
Servicing Asset at Fair Value, Amount [Roll Forward] | ||||
Beginning balance | 660,002 | 665,899 | 746,119 | |
Fair value election - transfer from MSRs carried at amortized cost | 0 | 0 | 0 | |
Cumulative effect of fair value election | 0 | 0 | 0 | |
Sales | (1,492) | (540) | (145) | |
Recognized on the sale of residential mortgage loans | 0 | 0 | 0 | |
Recognized in connection with the acquisition of PHH | 23,779 | 0 | 0 | |
Purchase of MSRs | 0 | 0 | 0 | |
Servicing transfers and adjustments | (4,833) | (2,376) | (1,548) | |
Changes in valuation inputs or other assumptions | [1] | (5,705) | 86,721 | 0 |
Realization of expected future cash flows and other changes | [1] | (80,189) | (89,702) | (78,527) |
Ending balance | $ 591,562 | $ 660,002 | $ 665,899 | |
[1] | Changes in fair value are recognized in MSR valuation adjustments, net in the consolidated statements of operations. |
Mortgage Servicing - Summary _4
Mortgage Servicing - Summary of Estimated Change in the Value of MSRs Carried at Fair Value (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Transfers and Servicing [Abstract] | |
Weighted average prepayment speeds, 10% | $ (122,911) |
Weighted average prepayment speeds, 20% | (237,916) |
Discount rate (Option-adjusted spread), 10% | (43,410) |
Discount rate (Option-adjusted spread), 20% | $ (84,631) |
Mortgage Servicing - Schedule o
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, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |||
Schedule of Servicing and Subservicing Portfolio [Line Items] | ||||||
Servicing | $ 72,378,693 | [1] | $ 75,469,327 | $ 86,049,298 | ||
Subservicing | 53,104,560 | [1] | 2,063,669 | 4,330,084 | [2] | |
NRZ | [3] | 130,517,237 | [1] | 101,819,557 | 118,712,748 | |
Assets Serviced | 256,000,490 | 179,352,553 | $ 209,092,130 | |||
Residential [Member] | ||||||
Schedule of Servicing and Subservicing Portfolio [Line Items] | ||||||
Assets Serviced | $ 256,000,490 | |||||
Commercial [Member] | ||||||
Schedule of Servicing and Subservicing Portfolio [Line Items] | ||||||
Subservicing | $ 92,900 | |||||
[1] | Includes $6.3 billion, $51.3 billion and $42.3 billion UPB of loans serviced, subserviced or subserviced on behalf of NRZ, respectively, added to the portfolio in connection with the PHH acquisition. | |||||
[2] | Excludes $92.9 million of large-balance commercial foreclosed real estate. During 2017, we sold or transferred servicing on the remaining managed assets. | |||||
[3] | UPB of loans for which the Rights to MSRs have been sold to NRZ, including those for which third-party consents have been received and the MSRs have been transferred to NRZ. |
Mortgage Servicing - Schedule_2
Mortgage Servicing - Schedule of Composition of Primary Servicing and Subservicing Portfolios by Type of Property Serviced as Measured by UPB (Footnote) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Schedule of Servicing and Subservicing Portfolio [Line Items] | |||||
Subservicing | $ 53,104,560 | [1] | $ 2,063,669 | $ 4,330,084 | [2] |
Servicing | 72,378,693 | [1] | 75,469,327 | 86,049,298 | |
Commercial [Member] | |||||
Schedule of Servicing and Subservicing Portfolio [Line Items] | |||||
Subservicing | 92,900 | ||||
PHH Corporation [Member] | NRZ [Member] | |||||
Schedule of Servicing and Subservicing Portfolio [Line Items] | |||||
Servicing | $ 6,300,000 | $ 51,300,000 | $ 42,300,000 | ||
[1] | Includes $6.3 billion, $51.3 billion and $42.3 billion UPB of loans serviced, subserviced or subserviced on behalf of NRZ, respectively, added to the portfolio in connection with the PHH acquisition. | ||||
[2] | Excludes $92.9 million of large-balance commercial foreclosed real estate. During 2017, we sold or transferred servicing on the remaining managed assets. |
Mortgage Servicing - Narrative
Mortgage Servicing - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Servicing Asset at Amortized Cost [Line Items] | |||
Unpaid principal balance of non-agency and whole loans servicing agreements with minimum servicer ratings | $ 25,900 | ||
Unpaid principal balance of non-agency and whole loans servicing agreements with termination rights triggered | $ 8,200 | ||
Percentage of non-agency and whole loans servicing agreements with termination rights triggered of servicing portfolio | 7.00% | ||
Float balances | $ 1,700 | $ 1,500 | $ 2,100 |
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 | $ 901.3 | $ 219.4 | $ 3,700 |
Mortgage Servicing - Summary _5
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, 2018USD ($)loan | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Amount | $ 256,000,490 | $ 179,352,553 | $ 209,092,130 |
Residential Mortgage [Member] | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Amount | $ 256,000,490 | ||
Count | loan | 1,562,238 | ||
California [Member] | Residential Mortgage [Member] | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Amount | $ 56,455,157 | ||
Count | loan | 201,058 | ||
New York [Member] | Residential Mortgage [Member] | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Amount | $ 25,411,051 | ||
Count | loan | 101,444 | ||
Florida [Member] | Residential Mortgage [Member] | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Amount | $ 20,345,407 | ||
Count | loan | 134,335 | ||
New Jersey [Member] | Residential Mortgage [Member] | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Amount | $ 13,711,894 | ||
Count | loan | 65,263 | ||
Texas [Member] | Residential Mortgage [Member] | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Amount | $ 11,858,287 | ||
Count | loan | 111,512 | ||
Other [Member] | Residential Mortgage [Member] | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Amount | $ 128,218,694 | ||
Count | loan | 948,626 |
Mortgage Servicing - Schedule_3
Mortgage Servicing - Schedule of Components of Servicing and Subservicing Fees (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Transfers and Servicing [Abstract] | ||||
Servicing | $ 224,892 | $ 257,419 | $ 293,210 | |
Subservicing | 8,904 | 7,775 | 21,427 | |
NRZ | 539,039 | 549,411 | 633,545 | |
Servicing and Subservicing fees, total | 772,835 | 814,605 | 948,182 | |
Late charges | 61,453 | 61,763 | 66,709 | |
Home Affordable Modification Program (HAMP) fees | [1] | 14,312 | 43,310 | 110,367 |
Custodial accounts (float earnings) | 40,115 | 25,237 | 8,969 | |
Loan collection fees | 18,392 | 22,770 | 27,213 | |
Other | 27,229 | 21,691 | 25,180 | |
Fees, total | $ 934,336 | $ 989,376 | $ 1,186,620 | |
[1] | The HAMP 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. We continue to earn HAMP success fees for HAMP modifications that remain less than 90 days delinquent at the first-, second- and third-year anniversary of the start of the trial modification. |
Rights to MSRs - Narrative (Det
Rights to MSRs - Narrative (Details) - USD ($) $ in Thousands | Jan. 18, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Oct. 04, 2018 |
Servicing Assets at Fair Value [Line Items] | |||||
Proceeds from sale of mortgage servicing rights accounted for as financing | $ 279,586 | $ 54,601 | $ 0 | ||
NRZ [Member] | |||||
Servicing Assets at Fair Value [Line Items] | |||||
Percentage UPB of residential assets serviced | 50.9832% | ||||
Percentage of loan servicing and subservicing fee revenue from client | 69.74826% | ||||
Initial term to subservice mortgage servicing rights | 5 years | ||||
Proceeds from sale of mortgage servicing rights accounted for as financing | $ 279,600 | $ 279,600 | $ 54,600 | ||
Term of extended subservicing agreement following initial term | 3 months | ||||
NRZ [Member] | PHH Corporation [Member] | |||||
Servicing Assets at Fair Value [Line Items] | |||||
Unpaid principal balance on servicing assets acquired | $ 42,300,000 | ||||
Unpaid principal balance on servicing assets and advances committed to sale | $ 3,500,000 | ||||
Percentage of mortgage loans servicing that can be terminated | 25.00% |
Rights to MSRs - Schedule of As
Rights to MSRs - Schedule of Assets, Liabilities, Servicing and Subservicing Fees Related to NRZ Agreements (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |||
Servicing Liabilities at Fair Value [Line Items] | ||||||
Mortgage servicing rights, at fair value | $ 1,457,149 | $ 671,962 | $ 679,256 | $ 761,190 | ||
Due from NRZ | 25,196 | 14,924 | ||||
Due to NRZ | 53,001 | [1] | 98,493 | |||
Other financing liabilities | 1,127,613 | 593,518 | ||||
Changes in fair value | 19,269 | (41,282) | 0 | |||
NRZ [Member] | ||||||
Servicing Liabilities at Fair Value [Line Items] | ||||||
Mortgage servicing rights, at fair value | 894,002 | 499,042 | 477,707 | |||
Due from NRZ | 25,196 | 14,924 | 21,873 | |||
Due to NRZ | [2] | 53,001 | 98,493 | 83,248 | ||
Other financing liabilities | 1,032,856 | 508,291 | 477,707 | |||
Servicing fees collected on behalf of NRZ | 539,039 | 549,411 | 633,545 | |||
Less: Subservicing fee retained | 142,334 | 295,192 | 337,727 | |||
Net servicing fees remitted to NRZ | 396,705 | 254,219 | 295,818 | |||
Changes in fair value | (19,269) | 41,282 | 2,580 | |||
Runoff, settlement and other | 205,766 | 59,190 | 63,997 | |||
Interest expense | 171,670 | 236,311 | 234,401 | |||
NRZ [Member] | Original Rights to MSRs Agreements [Member] | ||||||
Servicing Liabilities at Fair Value [Line Items] | ||||||
Changes in fair value | (171) | 83,300 | 2,580 | |||
Runoff, settlement and other | 50,620 | 57,264 | 63,997 | |||
NRZ [Member] | 2017 Agreements and New RMSR Agreements [Member] | ||||||
Servicing Liabilities at Fair Value [Line Items] | ||||||
Changes in fair value | (14,369) | (42,018) | 0 | |||
Runoff, settlement and other | 136,700 | 1,926 | 0 | |||
NRZ [Member] | PHH MSR Agreements [Member] | ||||||
Servicing Liabilities at Fair Value [Line Items] | ||||||
Changes in fair value | (4,729) | 0 | 0 | |||
Runoff, settlement and other | $ 18,446 | $ 0 | $ 0 | |||
[1] | See Note 15 — Equity for additional information. | |||||
[2] | Amounts collected on behalf of NRZ for advances and servicing fees. |
Receivables - Schedule of Recei
Receivables - Schedule of Receivables (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | |
Receivables [Abstract] | |||
Government-insured loan claims, net | $ 105,258 | $ 114,971 | |
Due from NRZ | 25,196 | 14,924 | |
Amount Due On Sales Of Mortgage Servicing Rights | [1] | 30,148 | 1,037 |
Reimbursable expenses | 11,508 | 31,709 | |
Due from custodial accounts | 9,060 | 36,122 | |
Other | 7,012 | 10,922 | |
Servicing | 188,182 | 209,685 | |
Income taxes receivable | 45,987 | 36,831 | |
Other receivables | 17,672 | 19,600 | |
Other receivables, gross | 251,841 | 266,116 | |
Allowance for losses | (53,579) | (66,587) | |
Receivables, total | $ 198,262 | $ 199,529 | |
[1] | Balance represents the holdback of proceeds from MSR sales and transfers to address indemnification claims and mortgage loan document deficiencies. The balance at December 31, 2018 includes $29.5 million of receivables acquired in connection with the acquisition of PHH that relate to sales executed by PHH prior to the acquisition date. |
Receivables - Schedule of Rec_2
Receivables - Schedule of Receivables (Footnote) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Amount Due On Sales Of Mortgage Servicing Rights | [1] | $ 30,148 | $ 1,037 |
PHH Corporation [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Amount Due On Sales Of Mortgage Servicing Rights | $ 29,500 | ||
[1] | Balance represents the holdback of proceeds from MSR sales and transfers to address indemnification claims and mortgage loan document deficiencies. The balance at December 31, 2018 includes $29.5 million of receivables acquired in connection with the acquisition of PHH that relate to sales executed by PHH prior to the acquisition date. |
Receivables Schedule of Changes
Receivables Schedule of Changes in Allowance for Loan Losses (Details) - Government Insured Loans Claims [Member] - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Beginning balance | $ 53,340 | $ 53,258 | $ 20,571 |
Provision | 37,352 | 40,424 | 61,322 |
Net charge-offs and other | (38,195) | (40,342) | (28,635) |
Ending balance | $ 52,497 | $ 53,340 | $ 53,258 |
Receivables - Narrative (Detail
Receivables - Narrative (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
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 | $ 52.5 | $ 53.3 |
Premises and Equipment - Schedu
Premises and Equipment - Schedule of Premises and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | $ 130,618 | $ 119,675 |
Less accumulated depreciation and amortization | (97,201) | (82,669) |
Premises and equipment, net | 33,417 | 37,006 |
Computer Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | 46,029 | 43,137 |
Computer Hardware [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | 34,240 | 29,848 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | 27,798 | 23,425 |
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 | 7,370 | 8,071 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | 4,674 | 4,141 |
Other [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | $ 818 | $ 1,364 |
Other Assets - Schedule of Othe
Other Assets - Schedule of Other Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | |
Other Assets [Abstract] | |||
Contingent loan repurchase asset | $ 302,581 | $ 431,492 | |
Other prepaid expenses | 27,647 | 22,559 | |
Prepaid representation, warranty and indemnification claims - Agency MSR sale | 15,173 | 20,173 | |
Real estate | 7,368 | 3,070 | |
Prepaid lender fees, net | [1] | 6,589 | 9,496 |
Deferred tax assets, net | 5,289 | 2,000 | |
Derivatives, at fair value | 4,552 | 5,429 | |
Security deposits | 2,278 | 3,019 | |
Mortgage-backed securities, at fair value | 1,502 | 1,592 | |
Interest-earning time deposits | 1,338 | 4,739 | |
Prepaid income taxes | [2] | 0 | 5,621 |
Other | 5,250 | 2,696 | |
Other assets | $ 379,567 | $ 511,886 | |
[1] | We amortize these costs to the earlier of the scheduled amortization date, contractual maturity date or prepayment date of the debt | ||
[2] | We recognized the balance of prepaid income taxes as a cumulative-effect reduction of retained earnings upon adoption of ASU 2016-16 on January 1, 2018. See Note 1 — Organization, Business Environment, Basis of Presentation and Significant Accounting Policies for additional information. |
Other Assets - Narrative (Detai
Other Assets - Narrative (Details) $ in Millions | Dec. 31, 2017USD ($) |
Other Assets [Abstract] | |
Automotive dealer financing notes, gross | $ 0 |
Allowance for financing notes | $ 7.7 |
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, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | |||
Beginning balance | $ 7,318 | $ 10,064 | $ 14,658 |
Ending balance | 11,569 | 7,318 | 10,064 |
Automotive Dealer Financing Notes [Member] | |||
Allowance for Doubtful Accounts Receivable [Roll Forward] | |||
Beginning balance | 7,664 | 4,371 | 27 |
Provision | (265) | 3,293 | 4,344 |
Charge-offs and other | (7,399) | 0 | 0 |
Ending balance | $ 0 | $ 7,664 | $ 4,371 |
Borrowings - Schedule of Match
Borrowings - Schedule of Match Funded Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | |||
Debt Instrument [Line Items] | ||||
Maturity | [1] | Dec. 31, 2020 | ||
Match funded liabilities | $ 778,284 | $ 998,618 | ||
Ocwen Master Advance Receivables Trust (OMART) [Member] | ||||
Debt Instrument [Line Items] | ||||
Available borrowing capacity | [2] | $ 8,441 | ||
Weighted average interest rate | [3] | 3.56% | 3.02% | |
Match funded liabilities | $ 751,559 | $ 884,190 | ||
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],[4] | $ 0 | ||
Weighted average interest rate | [3],[4] | 0.00% | 4.29% | |
Match funded liabilities | [4] | $ 0 | $ 67,095 | |
Advance Receivables Backed Notes - Series 2015-VF5 [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | ||||
Debt Instrument [Line Items] | ||||
Maturity | [4],[5] | Dec. 31, 2049 | ||
Debt Instrument Amortization Date | [4],[5] | Dec. 2019 | ||
Available borrowing capacity | [2],[4] | $ 8,441 | ||
Weighted average interest rate | [3],[4] | 4.06% | 4.29% | |
Match funded liabilities | [4] | $ 216,559 | $ 67,095 | |
Advance Receivables Backed Notes - Series 2016-T1 [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | ||||
Debt Instrument [Line Items] | ||||
Maturity | [5],[6] | Aug. 31, 2048 | ||
Debt Instrument Amortization Date | [5],[6] | Aug. 2018 | ||
Available borrowing capacity | [2],[6] | $ 0 | ||
Weighted average interest rate | [3],[6] | 0.00% | 2.77% | |
Match funded liabilities | [6] | $ 0 | $ 265,000 | |
Advance Receivables Backed Notes - Series 2016-T2 [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | ||||
Debt Instrument [Line Items] | ||||
Maturity | [5],[6] | Aug. 31, 2049 | ||
Debt Instrument Amortization Date | [5],[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 | $ 235,000 | |
Advance Receivables Backed Notes - Series 2017-T1 [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | ||||
Debt Instrument [Line Items] | ||||
Maturity | [5],[6] | Sep. 30, 2048 | ||
Debt Instrument Amortization Date | [5],[6] | Sep. 2018 | ||
Weighted average interest rate | [3],[6] | 0.00% | 2.64% | [7] |
Match funded liabilities | $ 250,000 | |||
Advance Receivables Backed Notes, Series 2018-T1 [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | ||||
Debt Instrument [Line Items] | ||||
Maturity | [5],[6] | Aug. 31, 2049 | ||
Debt Instrument Amortization Date | [5],[6] | Aug. 2019 | ||
Available borrowing capacity | $ 0 | |||
Weighted average interest rate | 3.50% | 0.00% | ||
Match funded liabilities | $ 150,000 | $ 0 | ||
Advance Receivables Backed Notes, Series 2018-T2 [Member] | Ocwen Master Advance Receivables Trust (OMART) [Member] | ||||
Debt Instrument [Line Items] | ||||
Maturity | [5],[6] | Aug. 31, 2050 | ||
Debt Instrument Amortization Date | [5],[6] | Aug. 2020 | ||
Available borrowing capacity | $ 0 | |||
Weighted average interest rate | 3.81% | 0.00% | ||
Match funded liabilities | $ 150,000 | $ 0 | ||
Advance Receivables Backed Notes, Series 2014-VF1 [Member] | Total Ocwen Servicer Advance Receivables Trust III (OSARTIII) [Member] | ||||
Debt Instrument [Line Items] | ||||
Maturity | [5],[8] | Dec. 31, 2048 | ||
Debt Instrument Amortization Date | [5],[8] | Dec. 2018 | ||
Available borrowing capacity | [2],[8] | $ 0 | ||
Weighted average interest rate | [3],[8] | 4.63% | ||
Match funded liabilities | [8] | $ 0 | $ 33,768 | |
Advance Receivables Backed Notes, Series 2015-VF1 [Member] | Total Ocwen Freddie Advance Funding (OFAF) [Member] | ||||
Debt Instrument [Line Items] | ||||
Maturity | [5],[9] | Jun. 30, 2049 | ||
Debt Instrument Amortization Date | [5],[9] | Jun. 2019 | ||
Available borrowing capacity | [2],[9] | $ 38,275 | ||
Weighted average interest rate | [3],[9] | 5.03% | 3.54% | |
Match funded liabilities | [9] | $ 26,725 | $ 56,078 | |
Advance Financing Facilities [Member] | ||||
Debt Instrument [Line Items] | ||||
Available borrowing capacity | [2] | $ 46,716 | ||
Weighted average interest rate | [3] | 3.61% | 3.16% | |
Match funded liabilities | $ 778,284 | $ 974,036 | ||
Loan Series 2017-1 [Member] | Total Automotive Capital Asset Receivables Trust (ACART) [Member] | ||||
Debt Instrument [Line Items] | ||||
Maturity | [5],[7] | Feb. 28, 2021 | ||
Debt Instrument Amortization Date | [5],[7] | Feb. 2019 | ||
Available borrowing capacity | [2],[7] | $ 0 | ||
Weighted average interest rate | [3],[7] | 0.00% | ||
Match funded liabilities | [7] | $ 0 | $ 24,582 | |
Match Funded Liabilties [Member] | ||||
Debt Instrument [Line Items] | ||||
Available borrowing capacity | [2] | $ 46,716 | ||
Weighted average interest rate | [3] | 3.61% | 3.25% | |
Match funded liabilities | $ 778,284 | $ 998,618 | ||
[1] | Under the terms of the Amended and Restated Senior Secured Term Loan Facility Agreement with an original 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 principal payments of $4.2 million on the SSTL.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) 1ML, plus a margin of 4.00% and subject to a base rate floor of 2.00% or (b) 1ML, plus a margin of 5.00% and subject to a 1ML 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, 2018, none 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 2.50% and 1.56% at December 31, 2018 and 2017, respectively. | |||
[4] | Effective January 1, 2018, the borrowing capacity of the Series 2014-VF4 and the Series 2015-VF5 variable rate notes were each reduced from $105.0 million to $70.0 million. The interest rate was based on 1ML, with a ceiling of 125 basis points (bps) plus a margin of 235 to 635 bps. On July 13, 2018, we increased the borrowing capacity of the Series 2015-VF5 variable notes to $225.0 million and extended the amortization date to December 15, 2019, with interest computed based on the lender’s cost of funds plus a margin of 105 to 250 bps. The increased capacity was used on July 16, 2018 to redeem the Series 2016-T1 term notes with an outstanding balance of $265.0 million and an amortization date of August 15, 2018. We also voluntarily terminated the Series 2014-VF4 variable notes on July 16, 2018. | |||
[5] | The amortization date of our facilities is the date on which the revolving period ends under each advance facility note and repayment of the outstanding balance must begin if the note is not renewed or extended. The maturity date is the date on which all outstanding balances must be repaid. In all of our advance facilities, there are multiple notes outstanding. For each note, after the amortization date, all collections that represent the repayment of advances pledged to the facility must be applied to reduce the balance of the note outstanding, and any new advances are ineligible to be financed. | |||
[6] | Under the terms of the agreement, we must continue to borrow the full amount of the Series 2016-T2, 2018-T1 and 2018-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-T2, 2018-T1 and 2018-T2 term notes have a total combined borrowing capacity of $535.0 million. Rates on the individual classes of notes range from 2.72% to 4.53%. The Series 2016-T1 and Series 2017-T1 term notes were redeemed on July 16, 2018 and August 14, 2018, respectively. On August 15, 2018, we issued two $150.0 million fixed-rate term notes (Series 2018 T-1 and Series 2018-T2) with amortization dates of August 15, 2019 and August 17, 2020, respectively | |||
[7] | On January 23, 2018, we voluntarily terminated the Loan Series 2017-1 Notes. | |||
[8] | We voluntarily terminated the Series 2014-VF1 variable notes on December 5, 2018. The maximum borrowing capacity under this facility was $55.0 million. There was a ceiling of 300 bps for 3ML in determining the interest rate for these variable rate notes. Rates on the individual notes were based on the lender’s cost of funds plus a margin of 235 to 475 bps. | |||
[9] | On June 7, 2018, borrowing capacity was reduced from $110.0 million to $65.0 million with interest computed based on the lender’s cost of funds plus a margin of 180 to 450 bps. There is a ceiling of 300 bps for 3ML in determining the interest rate for these variable rate notes. |
Borrowings - Schedule of Matc_2
Borrowings - Schedule of Match Funded Liabilities (Footnote) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 05, 2018 | Aug. 15, 2018 | Jul. 16, 2018 | Jul. 13, 2018 | Jan. 01, 2018 | Jun. 07, 2017 | |
Debt Instrument [Line Items] | |||||||||
Proceeds from sale of mortgage servicing rights accounted for as a financing | $ 279,586 | $ 54,601 | $ 0 | ||||||
Minimum [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, interest rate | 2.72% | ||||||||
Maximum [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, interest rate | 4.53% | ||||||||
Advance Receivable Backed Variable Funding Notes [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | $ 70,000 | $ 105,000 | |||||||
Advance Receivables Backed Notes - Series 2015-VF5 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | $ 225,000 | ||||||||
Advance Receivables Backed Notes - Series 2015-VF5 [Member] | Minimum [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, interest rate | 1.05% | ||||||||
Advance Receivables Backed Notes - Series 2015-VF5 [Member] | Maximum [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, interest rate | 2.50% | ||||||||
Advance Receivables Backed Notes - Series 2016-T1 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | $ 265,000 | ||||||||
Series 2016 and 2018 Term Notes [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | $ 535,000 | ||||||||
Series 2018 Term Notes [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | $ 150,000 | ||||||||
Advance Receivables Backed Notes, Series 2014-VF1 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | $ 55,000 | ||||||||
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 | $ 65,000 | |||||||
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 | 1.80% | ||||||||
Advance Receivables Backed Notes, Series 2015-VF1 [Member] | Maximum [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 4.50% | ||||||||
LIBOR [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
1-Month LIBOR | 2.50% | 1.56% | |||||||
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% |
Borrowings - Narrative (Details
Borrowings - Narrative (Details) - USD ($) $ in Thousands | Dec. 05, 2016 | Dec. 31, 2018 | Feb. 04, 2019 | Dec. 31, 2017 |
NRZ [Member] | ||||
Line of Credit Facility [Line Items] | ||||
UPB of rights to MSRs sold | $ 88,300,000 | |||
Outstanding servicing advances | $ 2,700,000 | |||
SSTL [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Percentage of loan to value | 40.00% | |||
Master Repurchase Agreement [Member] | Subsequent Event [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Long-term debt, gross | $ 300,000 | |||
Senior Notes [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Long-term debt, gross | $ 449,942 | $ 350,000 | ||
On or Before November 15, 2018 [Member] | Minimum [Member] | Senior Notes [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Redemption period, notice | 30 days | |||
On or Before November 15, 2018 [Member] | Maximum [Member] | Senior Notes [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Redemption period, notice | 60 days | |||
Ocwen Loan Servicing [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Deb covenant, required consolidated tangible net worth | $ 275,000 | |||
8.375% Senior Secured Notes Due In 2022 [Member] | Senior Notes [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Percentage of principal amount, repurchase price | 101.00% |
Borrowings - Schedule of Financ
Borrowings - Schedule of Financing Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | ||
Debt Instrument [Line Items] | |||
Maturity | [1] | Dec. 31, 2020 | |
HMBS-related borrowings | $ 5,380,448 | $ 4,601,556 | |
Other financing liabilities | 1,127,613 | 593,518 | |
Financing Liabilities [Member] | |||
Debt Instrument [Line Items] | |||
HMBS-related borrowings | [2] | 5,380,448 | 4,601,556 |
Other financing liabilities | 1,032,856 | 508,291 | |
Long-term debt, gross | $ 6,508,061 | 5,195,074 | |
Secured Notes, Ocwen Asset Servicing Income Series, Series 2014-1 [Member] | Financing Liabilities [Member] | |||
Debt Instrument [Line Items] | |||
Maturity | Feb. 28, 2028 | ||
Other financing liabilities | [3] | $ 65,523 | 72,575 |
IndyMac Mortgage Loan Trust (INDX 2004-AR11) [Member] | Financing Liabilities [Member] | |||
Debt Instrument [Line Items] | |||
Other financing liabilities | 11,012 | 0 | |
Residential Asset Securitization Trust 2003-A11 (RAST 2003-A11) [Member] | Financing Liabilities [Member] | |||
Debt Instrument [Line Items] | |||
Other financing liabilities | 13,803 | 0 | |
Financing Liability Owed to Securitization Investors [Member] | Financing Liabilities [Member] | |||
Debt Instrument [Line Items] | |||
Other financing liabilities | $ 24,815 | 0 | |
Financing Liability – Advances Pledged [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate | 4.50% | ||
Financing Liability – Advances Pledged [Member] | Financing Liabilities [Member] | |||
Debt Instrument [Line Items] | |||
Other financing liabilities | [4] | $ 4,419 | 12,652 |
LIBOR [Member] | Financing Liabilities [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate | 2.60% | ||
LIBOR [Member] | Residential Asset Securitization Trust 2003-A11 (RAST 2003-A11) [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate | 0.45% | ||
Original Rights to MSRs Agreements [Member] | Financing Liabilities [Member] | |||
Debt Instrument [Line Items] | |||
Other financing liabilities | [5] | $ 436,511 | 499,042 |
2017 Agreements and New RMSR Agreements [Member] | Financing Liabilities [Member] | |||
Debt Instrument [Line Items] | |||
Other financing liabilities | 138,854 | 9,249 | |
PHH MSR Agreements [Member] | Financing Liabilities [Member] | |||
Debt Instrument [Line Items] | |||
Other financing liabilities | $ 457,491 | $ 0 | |
[1] | Under the terms of the Amended and Restated Senior Secured Term Loan Facility Agreement with an original 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 principal payments of $4.2 million on the SSTL.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) 1ML, plus a margin of 4.00% and subject to a base rate floor of 2.00% or (b) 1ML, plus a margin of 5.00% and subject to a 1ML floor of 1.00%. To date we have elected option (b) to determine the interest rate. | ||
[2] | 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. | ||
[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 in September 2017. In connection with the execution of the New RMSR Agreements in January 2018, we received a lump sum payment of $279.6 million as compensation for foregoing certain payments under the Original Rights to MSRs Agreements. 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. The expected maturity of the liability is April 30, 2020, the date through which we were scheduled to be the servicer on loans underlying the Rights to MSRs per the Original Rights to MSRs Agreements. | ||
[5] | Represents amounts due to the holders of beneficial interests in Ginnie Mae guaranteed HMBS. The beneficial interests have no maturity dates, and the borrowings mature as the related loans are repaid. |
Borrowings - Schedule of Fina_2
Borrowings - Schedule of Financing Liabilities (Footnote) (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Minimum [Member] | |
Debt Instrument [Line Items] | |
Debt instrument, interest rate | 2.72% |
Maximum [Member] | |
Debt Instrument [Line Items] | |
Debt instrument, interest rate | 4.53% |
Secured Notes, Ocwen Asset Servicing Income Series, Series 2014-1 [Member] | |
Debt Instrument [Line Items] | |
Basis points | 0.21% |
IndyMac Mortgage Loan Trust (INDX 2004-AR11) [Member] | Minimum [Member] | |
Debt Instrument [Line Items] | |
Debt instrument, interest rate | 3.68% |
IndyMac Mortgage Loan Trust (INDX 2004-AR11) [Member] | Maximum [Member] | |
Debt Instrument [Line Items] | |
Debt instrument, interest rate | 4.26% |
Residential Asset Securitization Trust 2003-A11 (RAST 2003-A11) [Member] | Minimum [Member] | |
Debt Instrument [Line Items] | |
Debt instrument, interest rate | 4.25% |
Residential Asset Securitization Trust 2003-A11 (RAST 2003-A11) [Member] | Maximum [Member] | |
Debt Instrument [Line Items] | |
Debt instrument, interest rate | 5.75% |
Residential Asset Securitization Trust 2003-A11 (RAST 2003-A11) [Member] | LIBOR [Member] | |
Debt Instrument [Line Items] | |
Interest rate | 0.45% |
Financing Liability – Advances Pledged [Member] | |
Debt Instrument [Line Items] | |
Interest rate | 4.50% |
Borrowings - Schedule of Other
Borrowings - Schedule of Other Secured Borrowings (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | ||
Line of Credit Facility [Line Items] | |||
Maturity date | [1] | Dec. 31, 2020 | |
Other Secured Borrowings [Member] | |||
Line of Credit Facility [Line Items] | |||
Available Borrowing Capacity | [2] | $ 194,627 | |
Long-term debt, gross | 387,213 | $ 554,033 | |
Unamortized debt issuance costs | (3,098) | (5,423) | |
Discount | (1,577) | (2,760) | |
Total Balance | $ 382,538 | $ 545,850 | |
Weighted average interest rate | 5.49% | 5.22% | |
SSTL [Member] | Other Secured Borrowings [Member] | |||
Line of Credit Facility [Line Items] | |||
Available Borrowing Capacity | [1],[2] | $ 0 | |
Long-term debt, gross | [1] | 231,500 | $ 298,251 |
Mortgage Loan Warehouse Facilities [Member] | Other Secured Borrowings [Member] | |||
Line of Credit Facility [Line Items] | |||
Available Borrowing Capacity | [2] | 194,627 | |
Long-term debt, gross | $ 155,713 | 255,782 | |
Mortgage Loan Warehouse Facilities [Member] | Repurchase Agreement [Member] | Other Secured Borrowings [Member] | |||
Line of Credit Facility [Line Items] | |||
Maturity date | [3] | Sep. 30, 2019 | |
Available Borrowing Capacity | [2],[3] | $ 25,307 | |
Long-term debt, gross | [3] | $ 74,693 | 8,221 |
Mortgage Loan Warehouse Facilities [Member] | Participation Agreement [Member] | Other Secured Borrowings [Member] | |||
Line of Credit Facility [Line Items] | |||
Maturity date | [4] | Apr. 30, 2019 | |
Available Borrowing Capacity | [2],[5] | $ 0 | |
Long-term debt, gross | [5] | $ 42,331 | 161,433 |
Mortgage Loan Warehouse Facilities [Member] | Mortgage Warehouse Agreement [Member] | Other Secured Borrowings [Member] | |||
Line of Credit Facility [Line Items] | |||
Maturity date | [5] | Aug. 31, 2019 | |
Available Borrowing Capacity | [2],[6] | $ 0 | |
Long-term debt, gross | [6] | $ 8,009 | 32,042 |
Mortgage Loan Warehouse Facilities [Member] | Master Repurchase Agreement [Member] | Other Secured Borrowings [Member] | |||
Line of Credit Facility [Line Items] | |||
Maturity date | [7] | Dec. 31, 2019 | |
Available Borrowing Capacity | $ 169,320 | ||
Long-term debt, gross | $ 30,680 | 54,086 | |
Mortgage Loan Warehouse Facilities [Member] | Master Repurchase Agreement [Member] | Other Secured Borrowings [Member] | |||
Line of Credit Facility [Line Items] | |||
Maturity date | [7] | Jan. 31, 2020 | |
Available Borrowing Capacity | $ 0 | ||
Long-term debt, gross | $ 0 | 0 | |
Interest rate | [7] | 0.00% | |
Interest rate at floor | 4.00% | ||
Mortgage Loan Warehouse Facilities [Member] | Master Repurchase Agreement [Member] | Other Secured Borrowings [Member] | |||
Line of Credit Facility [Line Items] | |||
Available Borrowing Capacity | $ 0 | ||
Long-term debt, gross | $ 0 | $ 0 | |
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] | 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% | |
LIBOR [Member] | Mortgage Loan Warehouse Facilities [Member] | Master Repurchase Agreement [Member] | Other Secured Borrowings [Member] | |||
Line of Credit Facility [Line Items] | |||
Interest rate | [7] | 1.70% | |
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] | 3.00% | |
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] | 1.95% | |
[1] | Under the terms of the Amended and Restated Senior Secured Term Loan Facility Agreement with an original 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 principal payments of $4.2 million on the SSTL.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) 1ML, plus a margin of 4.00% and subject to a base rate floor of 2.00% or (b) 1ML, plus a margin of 5.00% and subject to a 1ML 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, $62.4 million could be used at December 31, 2018 based on the amount of eligible collateral that could be pledged. | ||
[3] | On September 28, 2018, we renewed this facility through September 27, 2019. In connection with the renewal, we increased the maximum borrowing amount from $137.5 million to $175.0 million, of which $100.0 million is available on a committed basis and the remainder is available at the discretion of the lender. | ||
[4] | Under these participation agreements, the lender provides financing for a combined total of $250.0 million at the discretion of the lender. The participation agreements allow the lender to acquire a 100% beneficial interest in the underlying mortgage loans. The transaction does not qualify for sale accounting treatment and is accounted for as a secured borrowing. The lender earns the stated interest rate of the underlying mortgage loans while the loans are financed under the participation agreement. On May 31, 2018, we renewed these facilities through April 30, 2019 ($175.0 million) and May 31, 2019 ($75.0 million). | ||
[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. On August 15, 2018, we renewed these facilities through August 15, 2019. | ||
[6] | On December 7, 2018, we renewed this facility through December 6, 2019. In connection with the renewal, we increased the maximum borrowing amount from $150.0 million to $250.0 million, of which $200.0 million is available on a committed basis and the remainder is available at the discretion of the lender. 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 $50.0 million at the discretion of the lender. On January 23, 2019, we renewed this facility through January 22, 2020. |
Borrowings - Schedule of Othe_2
Borrowings - Schedule of Other Secured Borrowings (Footnote) (Details) - USD ($) | Dec. 05, 2016 | Dec. 31, 2018 | Dec. 07, 2018 | Sep. 28, 2018 | |
SSTL [Member] | |||||
Debt Instrument [Line Items] | |||||
New term loans issuable | $ 100,000,000 | ||||
Periodic prepayment of SSTL | $ 4,200,000 | ||||
Maximum borrowing capacity | $ 335,000,000 | ||||
Percentage of loan to value | 40.00% | ||||
Mortgage Loan Warehouse Facilities [Member] | Other Secured Borrowings [Member] | |||||
Debt Instrument [Line Items] | |||||
Available borrowing capacity | $ 62,400,000 | ||||
Mortgage Loan Warehouse Facilities [Member] | Other Secured Borrowings [Member] | Repurchase Agreement [Member] | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | 175,000,000 | $ 137,500,000 | |||
Borrowings available o committed basis | 100,000,000 | ||||
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] | Participation Agreement [Member] | April 30, 2019 Maturity [Member] | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | $ 175,000,000 | ||||
Mortgage Loan Warehouse Facilities [Member] | Other Secured Borrowings [Member] | Participation Agreement [Member] | May 31, 2019 Maturity [Member] | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | 75,000,000 | ||||
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 | 250,000,000 | $ 150,000,000 | |||
Borrowings available o committed basis | $ 200,000,000 | ||||
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 | ||||
Mortgage Loan Warehouse Facilities [Member] | Other Secured Borrowings [Member] | Master Repurchase Agreement [Member] | April 30, 2019 Maturity [Member] | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | 200,000,000 | ||||
Other Secured Borrowings [Member] | |||||
Debt Instrument [Line Items] | |||||
Available borrowing capacity | [1] | 194,627,000 | |||
Other Secured Borrowings [Member] | SSTL [Member] | |||||
Debt Instrument [Line Items] | |||||
Available borrowing capacity | [1],[2] | 0 | |||
Other Secured Borrowings [Member] | Mortgage Loan Warehouse Facilities [Member] | |||||
Debt Instrument [Line Items] | |||||
Available borrowing capacity | [1] | 194,627,000 | |||
Other Secured Borrowings [Member] | Mortgage Loan Warehouse Facilities [Member] | Repurchase Agreement [Member] | |||||
Debt Instrument [Line Items] | |||||
Available borrowing capacity | [1],[3] | 25,307,000 | |||
Other Secured Borrowings [Member] | Mortgage Loan Warehouse Facilities [Member] | Participation Agreement [Member] | |||||
Debt Instrument [Line Items] | |||||
Available borrowing capacity | [1],[4] | 0 | |||
Other Secured Borrowings [Member] | Mortgage Loan Warehouse Facilities [Member] | Mortgage Warehouse Agreement [Member] | |||||
Debt Instrument [Line Items] | |||||
Available borrowing capacity | [1],[5] | 0 | |||
Other Secured Borrowings [Member] | Mortgage Loan Warehouse Facilities [Member] | Master Repurchase Agreement [Member] | |||||
Debt Instrument [Line Items] | |||||
Available borrowing capacity | 169,320,000 | ||||
Other Secured Borrowings [Member] | Mortgage Loan Warehouse Facilities [Member] | Master Repurchase Agreement [Member] | |||||
Debt Instrument [Line Items] | |||||
Available borrowing capacity | $ 0 | ||||
Interest rate | [6] | 0.00% | |||
Interest rate at floor | 4.00% | ||||
Other Secured Borrowings [Member] | Mortgage Loan Warehouse Facilities [Member] | Master Repurchase Agreement [Member] | |||||
Debt Instrument [Line Items] | |||||
Available borrowing capacity | $ 0 | ||||
Other Secured Borrowings [Member] | Eurodollar [Member] | SSTL [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest rate | [2] | 5.00% | |||
Interest rate at floor | [2] | 1.00% | |||
Other Secured Borrowings [Member] | LIBOR [Member] | Mortgage Loan Warehouse Facilities [Member] | Mortgage Warehouse Agreement [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest rate | [4] | 2.75% | |||
Interest rate at floor | [4] | 3.50% | |||
Other Secured Borrowings [Member] | LIBOR [Member] | Mortgage Loan Warehouse Facilities [Member] | Master Repurchase Agreement [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest rate | [6] | 1.70% | |||
Other Secured Borrowings [Member] | Minimum [Member] | LIBOR [Member] | Mortgage Loan Warehouse Facilities [Member] | Repurchase Agreement [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest rate | [3] | 1.95% | |||
Other Secured Borrowings [Member] | Maximum [Member] | LIBOR [Member] | Mortgage Loan Warehouse Facilities [Member] | Repurchase Agreement [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest rate | [3] | 3.00% | |||
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% | ||||
Reverse Lending [Member] | Other Secured Borrowings [Member] | LIBOR [Member] | Mortgage Loan Warehouse Facilities [Member] | Master Repurchase Agreement [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest rate | [6] | 2.75% | |||
[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, $62.4 million could be used at December 31, 2018 based on the amount of eligible collateral that could be pledged. | ||||
[2] | Under the terms of the Amended and Restated Senior Secured Term Loan Facility Agreement with an original 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 principal payments of $4.2 million on the SSTL.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) 1ML, plus a margin of 4.00% and subject to a base rate floor of 2.00% or (b) 1ML, plus a margin of 5.00% and subject to a 1ML floor of 1.00%. To date we have elected option (b) to determine the interest rate. | ||||
[3] | On September 28, 2018, we renewed this facility through September 27, 2019. In connection with the renewal, we increased the maximum borrowing amount from $137.5 million to $175.0 million, of which $100.0 million is available on a committed basis and the remainder is available at the discretion of the lender. | ||||
[4] | Under this participation agreement, the lender provides financing for $100.0 million at the discretion of the lender. The participation agreement allows the lender to acquire a 100% beneficial interest in the underlying mortgage loans. The transaction does not qualify for sale accounting treatment and is accounted for as a secured borrowing. On August 15, 2018, we renewed these facilities through August 15, 2019. | ||||
[5] | On December 7, 2018, we renewed this facility through December 6, 2019. In connection with the renewal, we increased the maximum borrowing amount from $150.0 million to $250.0 million, of which $200.0 million is available on a committed basis and the remainder is available at the discretion of the lender. 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. | ||||
[6] | Under this agreement, the lender provides financing for up to $50.0 million at the discretion of the lender. On January 23, 2019, we renewed this facility through January 22, 2020. |
Borrowings - Schedule of Senior
Borrowings - Schedule of Senior Notes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | ||
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 Unsecured Notes [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 119,064 | 3,122 | |
Fair value adjustments | 860 | 0 | |
Senior notes | 346,900 | ||
Senior Unsecured Notes [Member] | 6.625 Senior Notes, Due 2019 [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 0 | 3,122 | |
Debt instrument, interest rate | 6.625% | ||
Maturity | May 31, 2019 | ||
Senior Unsecured Notes [Member] | 7.375% Senior Notes, Due 2019 [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 97,521 | 0 | |
Debt instrument, interest rate | 7.375% | ||
Maturity | Sep. 30, 2019 | ||
Senior Unsecured Notes [Member] | 6.375% Senior Notes, Due 2021 [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 21,543 | 0 | |
Debt instrument, interest rate | 6.375% | ||
Maturity | Aug. 31, 2021 | ||
Other Secured Borrowings [Member] | 8.375% Senior Secured Notes Due In 2022 [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 330,878 | 346,878 | |
Debt instrument, interest rate | 8.375% | ||
Maturity | Nov. 30, 2022 | ||
Senior Notes [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 449,942 | 350,000 | |
Unamortized debt issuance costs | (2,075) | (2,662) | |
Senior notes | $ 448,727 | $ 347,338 | |
[1] | Under the terms of the Amended and Restated Senior Secured Term Loan Facility Agreement with an original 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 principal payments of $4.2 million on the SSTL.Borrowings bear interest, at the election of Ocwen, at a rate per annum equal to either (a) the base rate (the greatest of (i) the prime rate in effect on such day, (ii) the federal funds rate in effect on such day plus 0.50% and (iii) 1ML, plus a margin of 4.00% and subject to a base rate floor of 2.00% or (b) 1ML, plus a margin of 5.00% and subject to a 1ML floor of 1.00%. To date we have elected option (b) to determine the interest rate. |
Borrowings - Schedule of Seni_2
Borrowings - Schedule of Senior Notes (Footnote) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | ||
Percentage of senior unsecured notes exchanged for senior secured second lien notes | 99.10% | |
Repurchase of senior secured note | $ 16 | |
8.375% Senior Secured Notes Due In 2022 [Member] | ||
Debt Instrument [Line Items] | ||
Senior notes | $ 346.9 | |
Debt instrument stated percentage of interest | 8.375% | |
Senior Unsecured Notes [Member] | ||
Debt Instrument [Line Items] | ||
Redemption price | 100.00% | |
Senior notes | $ 346.9 | |
Senior Unsecured Notes [Member] | 2018 and thereafter [Member] | ||
Debt Instrument [Line Items] | ||
Redemption price | 100.00% | |
Secured Debt [Member] | ||
Debt Instrument [Line Items] | ||
Redemption price | 96.00% |
Borrowings - Schedule of Redemp
Borrowings - Schedule of Redemption Prices (Details) - Other Secured Borrowings [Member] | 12 Months Ended |
Dec. 31, 2018 | |
Debt Instrument [Line Items] | |
Redemption Price | 96.00% |
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 Assets
Borrowings - Schedule of Assets Held as Collateral Related to Secured Borrowings (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Debt Instrument [Line Items] | ||||
Cash | $ 329,132 | $ 259,655 | ||
Restricted cash | 67,878 | 42,905 | ||
Total Mortgage servicing rights | 1,457,149 | 1,008,844 | ||
Advances, net | 249,382 | 211,793 | ||
Match funded assets | 937,294 | 1,177,357 | ||
Loans held for sale | 242,622 | 238,358 | ||
Loans held for investment, at fair value | 5,498,719 | 4,715,831 | ||
Receivables, net | 198,262 | 199,529 | ||
Premises and equipment, net | 33,417 | 37,006 | ||
Other assets | 379,567 | 511,886 | ||
Assets related to discontinued operations | 794 | 0 | ||
Total assets | 9,394,216 | $ 8,403,164 | $ 7,655,663 | |
Match Funded Liabilties [Member] | ||||
Debt Instrument [Line Items] | ||||
Cash | 0 | |||
Restricted cash | 20,968 | |||
Total Mortgage servicing rights | 0 | |||
Advances, net | 0 | |||
Match funded assets | 937,294 | |||
Loans held for sale | 0 | |||
Loans held for investment, at fair value | 0 | |||
Receivables, net | 0 | |||
Premises and equipment, net | 0 | |||
Other assets | 0 | |||
Assets related to discontinued operations | 0 | |||
Total assets | 958,262 | |||
Financing Liabilities [Member] | ||||
Debt Instrument [Line Items] | ||||
Cash | 0 | |||
Restricted cash | 0 | |||
Total Mortgage servicing rights | 985,576 | |||
Advances, net | 11,162 | |||
Match funded assets | 0 | |||
Loans held for sale | 0 | |||
Loans held for investment, at fair value | 5,406,968 | |||
Receivables, net | 0 | |||
Premises and equipment, net | 0 | |||
Other assets | 0 | |||
Assets related to discontinued operations | 0 | |||
Total assets | 6,403,706 | |||
Mortgage Warehouse Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Cash | 0 | |||
Restricted cash | 5,658 | |||
Total Mortgage servicing rights | 0 | |||
Advances, net | 0 | |||
Match funded assets | 0 | |||
Loans held for sale | 143,704 | |||
Loans held for investment, at fair value | 33,567 | |||
Receivables, net | 0 | |||
Premises and equipment, net | 0 | |||
Other assets | 0 | |||
Assets related to discontinued operations | 0 | |||
Total assets | 182,929 | |||
Sale and Other Commitments [Member] | ||||
Debt Instrument [Line Items] | ||||
Cash | [1] | 0 | ||
Restricted cash | [1] | 41,252 | ||
Total Mortgage servicing rights | [1] | 9,867 | ||
Advances, net | [1] | 31,216 | ||
Match funded assets | [1] | 0 | ||
Loans held for sale | [1] | 0 | ||
Loans held for investment, at fair value | [1] | 0 | ||
Receivables, net | [1] | 0 | ||
Premises and equipment, net | [1] | 0 | ||
Other assets | [1] | 320,032 | ||
Assets related to discontinued operations | [1] | 0 | ||
Total assets | [1] | 402,367 | ||
Other [Member] | ||||
Debt Instrument [Line Items] | ||||
Cash | [2] | 329,132 | ||
Restricted cash | [2] | 0 | ||
Total Mortgage servicing rights | [2] | 461,706 | ||
Advances, net | [2] | 207,004 | ||
Match funded assets | [2] | 0 | ||
Loans held for sale | [2] | 98,918 | ||
Loans held for investment, at fair value | [2] | 58,184 | ||
Receivables, net | [2] | 198,262 | ||
Premises and equipment, net | [2] | 33,417 | ||
Other assets | [2] | 59,535 | ||
Assets related to discontinued operations | [2] | 794 | ||
Total assets | [2] | $ 1,446,952 | ||
[1] | Sales and Other Commitments include MSRs and related advances committed under sale agreements, Restricted cash and deposits held as collateral to support certain contractual obligations, and Contingent loan repurchase assets related to the Ginnie Mae early buyout program for which a corresponding liability is recognized in Other liabilities. | |||
[2] | The borrowings under the SSTL are secured by a first priority security interest in substantially all of the assets of Ocwen, OLS, PHH, PMC and the other guarantors thereunder, excluding among other things, 35% of the voting capital stock of foreign subsidiaries, securitization assets and equity interests of securitization entities, assets securing permitted funding indebtedness and non-recourse indebtedness, REO assets, Agency MSRs with respect to which an acknowledgment agreement acknowledging such security interest has not been obtained, as well as other customary carve-outs (collectively, the Collateral). The Collateral is subject to certain permitted liens set forth under the SSTL and related security agreement. The Senior Secured Notes are guaranteed by Ocwen and the other guarantors that guarantee the SSTL, and the borrowings under the Senior Secured Notes are secured by a second priority security interest in the Collateral. Security interests securing borrowings under the SSTL and Senior Secured Notes may include amounts presented in Other as well as certain assets presented in Collateral for Secured Borrowings and Sales and Other Commitments, subject to permitted liens as defined in the applicable debt documents. The amounts presented here may differ in their calculation and are not intended to represent amounts that may be used in connection with covenants under the applicable debt documents. |
Borrowings - Schedule of Aggreg
Borrowings - Schedule of Aggregate Long-term Borrowings (Details) $ in Thousands | Dec. 31, 2018USD ($) | |
Debt Instrument [Line Items] | ||
2,019 | $ 898,268 | [1],[2],[3] |
2,020 | 364,750 | [1],[2],[3] |
2,021 | 21,543 | [1],[2],[3] |
2,022 | 330,878 | [1],[2],[3] |
Long-term debt, gross | 1,615,439 | |
Fair value | 1,585,794 | |
Match Funded Liabilties [Member] | ||
Debt Instrument [Line Items] | ||
2,019 | 628,284 | [1],[2],[3] |
2,020 | 150,000 | [1],[2],[3] |
2,021 | 0 | [1],[2],[3] |
2,022 | 0 | [1],[2],[3] |
Long-term debt, gross | 778,284 | |
Fair value | 776,485 | |
Other Secured Borrowings [Member] | ||
Debt Instrument [Line Items] | ||
2,019 | 172,463 | [1],[2],[3] |
2,020 | 214,750 | [1],[2],[3] |
2,021 | [1],[2],[3] | |
2,022 | 0 | [1],[2],[3] |
Long-term debt, gross | 387,213 | |
Fair value | 383,162 | |
Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
2,019 | 97,521 | [1],[2],[3] |
2,020 | 0 | [1],[2],[3] |
2,021 | 21,543 | [1],[2],[3] |
2,022 | 330,878 | [1],[2],[3] |
Long-term debt, gross | 449,942 | |
Fair value | $ 426,147 | |
[1] | Amounts are exclusive of any related discount, unamortized debt issuance costs or fair value adjustment. | |
[2] | Excludes financing liabilities recognized in connection with asset sales transactions accounted for as financings, including $1.0 billion recorded in connection with sales of Rights to MSRs and MSRs and $5.4 billion recorded in connection with the securitizations of HMBS. These financing liabilities have no contractual maturity and are amortized over the life of the underlying assets. | |
[3] | For match funded liabilities, the Expected Maturity Date is the date on which the revolving period ends for each advance financing facility note and repayment of the outstanding balance must begin if the note is not renewed or extended. |
Borrowings - Schedule of Aggr_2
Borrowings - Schedule of Aggregate Long-term Borrowings (Footnote) (Details) - Financing Liabilities [Member] - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 6,508,061 | $ 5,195,074 |
Sale of MSRs and Rights To MSRs [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 1,000,000 | |
HMBS - Related Borrowings [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 5,400,000 |
Other Liabilities - Schedule of
Other Liabilities - Schedule of Other Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | |
Other Liabilities Disclosure [Abstract] | |||
Contingent loan repurchase liability | $ 302,581 | $ 431,492 | |
Other accrued expenses | 99,739 | 75,088 | |
Accrued legal fees and settlements | 62,763 | 51,057 | |
Due to NRZ - Advance collections and servicing fees | 53,001 | [1] | 98,493 |
Liability for indemnification obligations | 51,574 | 23,117 | |
Servicing-related obligations | 41,922 | 36,296 | |
Checks held for escheat | 20,686 | 19,306 | |
Liability for uncertain tax positions | 13,739 | 3,252 | |
Liability for unfunded pension obligation | 12,683 | 165 | |
Accrued interest payable | 7,209 | 5,172 | |
Liability for mortgage insurance contingency | 6,820 | 6,820 | |
Derivatives, at fair value | 4,986 | 635 | |
Deferred revenue | 4,441 | 3,463 | |
Other | 21,492 | 15,054 | |
Other liabilities | $ 703,636 | $ 769,410 | |
[1] | See Note 15 — Equity for additional information. |
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, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Other Liabilities Disclosure [Abstract] | ||||
Beginning balance | $ 51,057 | $ 93,797 | $ 74,922 | |
Accrual for probable losses | [1] | 19,774 | 131,113 | 74,943 |
Payments | [2] | (12,983) | (174,941) | (47,754) |
Assumed in connection with the acquisition of PHH | 9,960 | 0 | 0 | |
Issuance of common stock in settlement of litigation | [3] | (5,719) | (1,937) | 0 |
Net increase (decrease) in accrued legal fees | (1,917) | 482 | (6,231) | |
Other | 2,591 | 2,543 | (2,083) | |
Ending balance | $ 62,763 | $ 51,057 | $ 93,797 | |
[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] | See Note 15 — Equity for additional information. |
Equity - Narrative (Details)
Equity - Narrative (Details) - USD ($) | 1 Months Ended | 12 Months Ended | 38 Months Ended | |||
Jan. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2016 | Oct. 31, 2013 | |
Class of Stock [Line Items] | ||||||
Repurchase of common stock (in shares) | 991,985 | 13,163,793 | ||||
Share repurchase program, authorized amount of repurchase | $ 500,000,000 | |||||
Repurchase of common stock, value (in dollars) | $ 5,890,000 | $ 380,300,000 | ||||
Issuance of common stock | $ 5,719,000 | $ 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 | 1,875,000 | 625,000 | ||||
Common stock to be issued in connection with mediated settlement of litigation | 2,500,000 |
Equity - Schedule of Accumulate
Equity - Schedule of Accumulated Other Comprehensive Loss (AOCL), Net of Income Taxes (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Equity [Abstract] | ||
Unfunded pension plan obligation | $ 3,347 | $ 128 |
Unrealized losses on cash flow hedges | 979 | 1,128 |
Other | (69) | (7) |
Accumulated other comprehensive loss | $ 4,257 | $ 1,249 |
Derivative Financial Instrume_3
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, 2018 | Dec. 31, 2017 | ||
Fair value of derivative assets (liabilities) at: | |||
Derivatives, at fair value | $ 4,552 | $ 5,429 | |
IRLCs [Member] | |||
Derivative Notional Balance [Roll Forward] | |||
Notional Amount, beginning balance | 96,339 | ||
Additions | 1,288,938 | ||
Assumed in connection with the acquisition of PHH | 50,731 | ||
Amortization | 0 | ||
Maturities | (1,014,466) | ||
Terminations | (271,367) | ||
Notional Amount, ending balance | 150,175 | 96,339 | |
Fair value of derivative assets (liabilities) at: | |||
Derivatives, at fair value | [1] | 3,871 | 3,283 |
Gains (losses) on derivatives | 3,809 | (3,089) | |
Forward Mortgage Backed Securities Trades [Member] | |||
Derivative Notional Balance [Roll Forward] | |||
Notional Amount, beginning balance | 240,823 | ||
Additions | 404,162 | ||
Assumed in connection with the acquisition of PHH | 0 | ||
Amortization | 0 | ||
Maturities | (479,622) | ||
Terminations | 0 | ||
Notional Amount, ending balance | 165,363 | 240,823 | |
Fair value of derivative assets (liabilities) at: | |||
Derivatives, at fair value | [1] | (4,983) | (545) |
Gains (losses) on derivatives | 136 | (8,529) | |
Interest Rate Cap [Member] | |||
Derivative Notional Balance [Roll Forward] | |||
Notional Amount, beginning balance | 375,000 | ||
Additions | 173,750 | ||
Assumed in connection with the acquisition of PHH | 0 | ||
Amortization | (288,750) | ||
Maturities | 0 | ||
Terminations | 0 | ||
Notional Amount, ending balance | 260,000 | 375,000 | |
Fair value of derivative assets (liabilities) at: | |||
Derivatives, at fair value | [1] | 678 | 2,056 |
Gains (losses) on derivatives | $ (841) | $ 10 | |
[1] | Derivatives are reported at fair value in Other assets or in Other liabilities on our consolidated balance sheets. |
Derivative Financial Instrume_4
Derivative Financial Instruments and Hedging Activities - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||
Foreign currency re-measurement exchange gains (losses) | $ (3.2) | $ 1.7 | $ 0.2 |
Deferred unrealized losses | (1.1) | (1.2) | |
Deferred unrealized losses, tax | $ 0.1 | $ 0.1 |
Interest Income - Schedule of C
Interest Income - Schedule of Components of Interest Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Other Income and Expenses [Abstract] | |||
Loans held for sale | $ 10,756 | $ 11,100 | $ 15,774 |
Automotive dealer financing notes | 420 | 3,069 | 1,534 |
Interest earning cash deposits and other | 2,850 | 1,796 | 1,775 |
Interest and Other Income | $ 14,026 | $ 15,965 | $ 19,083 |
Interest Expense - Schedule of
Interest Expense - Schedule of Components of Interest Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Debt securities: | |||
Interest expense | $ 275,041 | $ 363,238 | $ 412,583 |
Financing Liabilities [Member] | |||
Debt securities: | |||
Interest expense | 176,683 | 242,514 | 248,834 |
Financing Liabilities [Member] | NRZ [Member] | |||
Debt securities: | |||
Interest expense | 171,670 | 236,311 | 234,401 |
Financing Liabilities [Member] | Other Financing Liabilities With Unrelated Parties [Member] | |||
Debt securities: | |||
Interest expense | 5,013 | 6,203 | 14,433 |
Match Funded Liabilties [Member] | |||
Debt securities: | |||
Interest expense | 31,870 | 47,624 | 66,879 |
Senior Notes [Member] | |||
Debt securities: | |||
Interest expense | 31,280 | 29,806 | 30,012 |
Other Secured Borrowings [Member] | |||
Debt securities: | |||
Interest expense | 30,465 | 39,531 | 60,469 |
Other [Member] | |||
Debt securities: | |||
Interest expense | $ 4,743 | $ 3,763 | $ 6,389 |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income Before Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||||||||||
Domestic | $ 11,477 | $ (75,143) | $ (130,920) | ||||||||
Foreign | (82,953) | (68,830) | (75,441) | ||||||||
Loss from continuing operations before income taxes | $ (7,763) | $ (40,273) | $ (28,405) | $ 4,965 | $ (45,314) | $ (26,553) | $ (41,608) | $ (30,498) | $ (71,476) | $ (143,973) | $ (206,361) |
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, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Current: | |||||||||||
Federal | $ (7,670) | $ (21,859) | $ (8,025) | ||||||||
State | 356 | (3,938) | 460 | ||||||||
Foreign | 11,132 | 9,550 | 5,099 | ||||||||
Current Income tax expense (benefit) | 3,818 | (16,247) | (2,466) | ||||||||
Deferred: | |||||||||||
Federal | 23,991 | 27,289 | (22,054) | ||||||||
State | 319 | 702 | 4,701 | ||||||||
Foreign | (4,252) | 2,719 | (2,806) | ||||||||
Provision for (reversal of) valuation allowance on deferred tax assets | (23,347) | (29,979) | 15,639 | ||||||||
Deferred income tax expense (benefit) | (3,289) | 731 | (4,520) | ||||||||
Total | $ (4,012) | $ 845 | $ 1,348 | $ 2,348 | $ (51) | $ (20,418) | $ 2,828 | $ 2,125 | $ 529 | $ (15,516) | $ (6,986) |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Decrease in federal net operating loss carryforwards | $ 16,900 | |||
Increase in foreign tax credits | $ 25,601 | 0 | $ (3,214) | |
Valuation allowance | 68,126 | 107,048 | ||
Total interest and penalties | (2,900) | (5,100) | (1,000) | |
Accruals for interest and penalties | 4,100 | 1,000 | ||
Liability for selected tax items | $ 9,600 | 2,300 | ||
Range of period where there is possible change in unrecognized tax benefits | 12 months | |||
Unrecognized Tax Benefits | $ 9,622 | 2,281 | 16,994 | $ 32,548 |
EDC benefits, tax expense (benefit) | $ 62,700 | |||
EDC benefits, effect on diluted EPS (in dollars per share) | $ (0.51) | |||
Transition Tax Liability [Member] | ||||
Decrease in federal net operating loss carryforwards | 51,700 | |||
Increase in foreign tax credits | 19,900 | |||
Annual Limitations on Utilization of Tax Attributes [Member] | ||||
Decrease in deferred tax asset | 160,900 | |||
Foreign Tax Credit [Member] | ||||
Decrease in deferred tax asset | 29,500 | |||
Valuation Allowance [Member] | ||||
Decrease in deferred tax asset | 55,700 | |||
U.S. [Member] | ||||
Decrease in deferred tax asset | 30,100 | 36,100 | ||
Increase in deferred tax asset | 6,000 | |||
Valuation allowance | 46,300 | 62,900 | ||
U.S. NOL carryforwards | 133,000 | |||
U.S. [Member] | Operating Loss Carryforwards [Member] | ||||
Valuation allowance on deferred tax assets | 27,900 | |||
U.S. [Member] | Capital Loss Carryforward [Member] | ||||
Capital loss carryforwards | 700 | |||
USVI [Member] | ||||
Decrease in deferred tax asset | 22,000 | 26,600 | ||
Increase in deferred tax asset | 4,600 | |||
Valuation allowance | 21,300 | $ 43,900 | ||
USVI NOL carryforwards | 134,200 | |||
Expected carry back of net operating loss | 334,500 | |||
USVI [Member] | Operating Loss Carryforwards [Member] | ||||
Valuation allowance on deferred tax assets | 3,100 | |||
USVI [Member] | Capital Loss Carryforward [Member] | ||||
Capital loss carryforwards | 200 | |||
India And Philippines Subsidiary [Member] | ||||
Deferred tax liability | 2,100 | |||
Undistributed earnings of foreign subsidiaries | $ 11,700 | |||
Ocwen Mortgage Servicing Inc [Member] | ||||
Percentage of income tax credit on qualified income | 90.00% | |||
EDC benefits, exemption term | 30 years |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Income Tax Disclosure [Abstract] | ||||||||||||
Expected income tax expense (benefit) at statutory rate | $ (15,010) | $ (50,391) | $ (72,225) | |||||||||
Differences between expected and actual income tax expense (2): | ||||||||||||
Bargain purchase gain disallowance | (13,448) | 0 | 0 | |||||||||
Reduction in tax attributes for Section 382 & 383 limitations | 55,668 | 0 | 0 | |||||||||
U.S. Tax Reform - Change in Federal rate | (10,666) | 62,758 | 0 | |||||||||
U.S. Tax Reform - Transition Tax | 14,412 | 34,846 | 0 | |||||||||
U.S. Tax Reform - BEAT Tax | 1,076 | 0 | 0 | |||||||||
Foreign tax differential including effectively connected income | [1] | 22,990 | (12,140) | 39,249 | ||||||||
Provision for (reversal of) liability for uncertain tax positions | (3,987) | (16,925) | 2,236 | |||||||||
Provision for (reversal of) valuation allowance on deferred tax assets | [2] | (23,347) | (29,979) | 15,639 | ||||||||
Provision for liability for intra-entity transactions | 0 | 2,484 | 3,357 | |||||||||
State tax, after Federal tax benefit | 675 | (3,938) | 250 | |||||||||
Excess tax benefits from share-based compensation | (356) | (3,701) | 0 | |||||||||
Other permanent differences | 122 | (267) | (138) | |||||||||
Foreign tax credit (generation) utilization | (25,601) | 0 | 3,214 | |||||||||
Executive compensation disallowance | 959 | 221 | 425 | |||||||||
Subpart F income | 3,222 | 2,824 | 228 | |||||||||
Other provision to return differences | (6,559) | 221 | (1,334) | |||||||||
Other | 379 | (1,529) | 2,113 | |||||||||
Total | $ (4,012) | $ 845 | $ 1,348 | $ 2,348 | $ (51) | $ (20,418) | $ 2,828 | $ 2,125 | $ 529 | $ (15,516) | $ (6,986) | |
[1] | The foreign tax differential includes a benefit recognized in 2018, 2017 and 2016 for taxable losses earned by OMS which are taxable in the U.S. as effectively connected income (ECI). The impact of ECI to income tax benefit for 2018, 20176 and 2016 was $3.3 million, $28.5 million and $7.4 million, respectively. | |||||||||||
[2] | The benefit recorded for the provision for valuation allowance in 2017 relates primarily to the reduction in the valuation allowance necessary as a result of revaluing our deferred tax assets due to U.S. tax reform and the reduction in the corporate tax rate. This benefit is partially offset by an increase in valuation allowance necessary for current year losses. The provision for valuation allowance in 2016 primarily relates to the recording of the valuation allowance on both the U.S. and USVI net deferred tax assets as of December 31, 2016. |
Income Taxes - Schedule of Ef_2
Income Taxes - Schedule of Effective Income Tax Reconciliation (Footnote) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||
Increase decrease in income tax expense as result of effectively connected income | $ 28.5 | $ 7.4 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets | ||
Net operating loss carryforward | $ 31,587 | $ 59,271 |
Reserve for servicing exposure | 10,331 | 1,312 |
Accrued other liabilities | 8,966 | 3,239 |
Foreign deferred assets | 7,142 | 6,769 |
Partnership losses | 6,681 | 5,360 |
Stock-based compensation expense | 5,610 | 4,202 |
Interest expense disallowance | 4,773 | 2,032 |
Intangible asset amortization | 4,579 | 5,541 |
Accrued incentive compensation | 4,527 | 4,798 |
Accrued legal settlements | 4,350 | 3,602 |
Bad debt and allowance for loan losses | 3,498 | 2,383 |
Tax residuals and deferred income on tax residuals | 2,905 | 2,569 |
Foreign tax credit | 357 | 4,262 |
Mortgage servicing rights amortization | 0 | 3,664 |
Other | 8,832 | 4,951 |
Deferred tax assets, gross | 104,138 | 113,955 |
Deferred tax liabilities | ||
Mortgage servicing rights amortization | 27,860 | 0 |
Foreign undistributed earnings | 2,059 | 4,858 |
Other | 804 | 49 |
Deferred tax liabilities, gross | 30,723 | 4,907 |
Deferred tax assets (liability), gross | 73,415 | 109,048 |
Valuation allowance | (68,126) | (107,048) |
Deferred tax assets, net | $ 5,289 | $ 2,000 |
Income Taxes - Schedule of Unre
Income Taxes - Schedule of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation of Unrecognized Tax Benefits [Roll Forward] | |||
Beginning balance | $ 2,281 | $ 16,994 | $ 32,548 |
Additions - PHH acquisition | 13,108 | 0 | 0 |
Additions for tax positions of current year | 412 | 0 | 0 |
Additions for tax positions of prior years | 1,354 | 2,281 | 0 |
Reductions for tax positions of prior years | (236) | 0 | 0 |
Reductions for settlements | (3,188) | (387) | (14,420) |
Lapses in statute of limitations | (4,109) | (16,607) | (1,134) |
Ending balance | $ 9,622 | $ 2,281 | $ 16,994 |
Basic and Diluted Earnings (L_3
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, 2018 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Basic loss per share | |||||||||||||
Loss from continuing operations, net of tax attributable to Ocwen common stockholders | $ (72,181) | $ (127,966) | $ (199,762) | ||||||||||
Income from discontinued operations, net of tax | $ 1,409 | $ 1,409 | $ 0 | $ 0 | $ 0 | 1,409 | 0 | 0 | |||||
Net loss attributable to Ocwen stockholders | $ (70,772) | $ (127,966) | $ (199,762) | ||||||||||
Weighted average shares of common stock outstanding - Basic and Diluted | 133,703,359 | 127,082,058 | 123,990,700 | ||||||||||
Earnings (loss) per share attributable to Ocwen stockholders - Basic and Diluted | |||||||||||||
Continuing operations | $ (0.03) | $ (0.31) | $ (0.22) | $ 0.02 | $ (0.34) | $ (0.05) | $ (0.36) | $ (0.26) | $ (0.54) | $ (1.01) | $ (1.61) | ||
Discontinued operations | 0.01 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0.01 | 0 | 0 | ||
Total attributable to Ocwen stockholders | $ (0.02) | $ (0.31) | $ (0.22) | $ 0.02 | $ (0.34) | $ (0.05) | $ (0.36) | $ (0.26) | $ (0.53) | $ (1.01) | $ (1.61) | ||
Stock options and common stock awards excluded from the computation of diluted earnings per share | |||||||||||||
Anti-dilutive Securities (in shares) | [1] | 4,989,725 | 5,487,164 | 7,176,089 | |||||||||
Market Based [Member] | |||||||||||||
Stock options and common stock awards excluded from the computation of diluted earnings per share | |||||||||||||
Anti-dilutive Securities (in shares) | [2] | 670,829 | 862,446 | 795,456 | |||||||||
[1] | Includes stock options that are anti-dilutive because their exercise price was greater than the average market price of Ocwen’s stock, and stock awards that are anti-dilutive based on the application of the treasury stock method. | ||||||||||||
[2] | Shares that are issuable upon the achievement of certain market-based performance criteria related to Ocwen’s stock price. |
Employee Compensation and Ben_3
Employee Compensation and Benefit Plans - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Provident fund contribution percentage on portion of employees salary | 12.00% | ||
Contributions to 401(k) | $ 4,800,000 | $ 5,300,000 | $ 4,900,000 |
Net periodic benefit cost | 400,000 | ||
Future expected benefit payments, 2019 | 2,700,000 | ||
Future expected benefit payments, 2020 through 2021 | 2,800,000 | ||
Future expected benefit payments, 2022 through 2023 | 2,700,000 | ||
Future expected benefit payments, 2024 through 2028 | 15,400,000 | ||
Contributions to defined benefit pension plans | 200,000 | 100,000 | 100,000 |
Compensation expense recognized | $ 20,500,000 | $ 24,500,000 | $ 25,500,000 |
Common stock remaining available for future issuance (in shares) | 7,917,804 | ||
Contractual term of all options granted | 10 years | ||
Minimum [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Percentage of employee contributions | 50.00% | ||
Employer match limit, percent of employee compensation | 2.00% | ||
Maximum [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Percentage of employee contributions | 100.00% | ||
Employer match limit, percent of employee compensation | 4.00% | ||
Matching Compensation Per Pay Period | $ 10,800 | ||
Stock Options [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Unrecognized compensation costs related to non-vested stock options | $ 900,000 | ||
Weighted average remaining requisite service period | 2 years 6 months 21 days | ||
Restricted Stock Units [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Weighted average remaining requisite service period | 2 years 5 months 16 days | ||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options | $ 5,000,000 |
Employee Compensation and Ben_4
Employee Compensation and Benefit Plans - Schedule of Change in Benefit Obligation, Plan Assets and Funded Status for Pension Plans (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Retirement Benefits [Abstract] | |
Benefit obligation | $ 49,122 |
Fair value of plan assets | 36,439 |
Unfunded status recognized in Other liabilities | (12,683) |
Amounts recognized in Accumulated other comprehensive income | $ 3,422 |
Employee Compensation and Ben_5
Employee Compensation and Benefit Plans - Schedule of Stock Awards Vesting (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
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 - 2018 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] | Stock Options [Member] | 2016 - 2018 Awards [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percent of options awarded | 9.00% | ||
Award vesting period | 3 years | ||
Vesting percentage of Awards | 33.30% | ||
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 - 2018 Awards [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percent of options awarded | 55.00% | ||
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 - 2018 Awards [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percent of options awarded | 36.00% | ||
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 Ben_6
Employee Compensation and Benefit Plans - Schedule of Stock Option Activity (Details) - $ / shares | 12 Months Ended | |||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Forfeited/Canceled (in shares) | (4,719,750) | |||||
Stock Options [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Outstanding (in shares) | 6,708,655 | [1],[2] | 6,926,634 | [1],[2] | 7,151,225 | |
Outstanding (in dollars per share) | $ 9.97 | [1],[2] | $ 9.88 | [1],[2] | $ 10.10 | |
Granted (in shares) | [3],[4] | 348,385 | ||||
Granted (in dollars per share) | [3],[4] | $ 3.66 | ||||
Exercised (in shares) | [5],[6] | (69,805) | ||||
Exercised (in dollars per share) | [5],[6] | $ 5.81 | ||||
Forfeited/Canceled (in shares) | [3] | (4,964,441) | (217,979) | (154,786) | ||
Forfeited/Canceled (in dollars per share) | [3] | $ 5.62 | $ 7.16 | $ 21.80 | ||
Outstanding (in shares) | [1],[2] | 2,092,599 | 6,708,655 | 6,926,634 | ||
Outstanding (in dollars per share) | [1],[2] | $ 19.22 | $ 9.97 | $ 9.88 | ||
Exercisable at end of year (in shares) | [1],[2],[7] | 1,520,039 | 6,234,830 | 6,344,958 | ||
Exercisable at end of year (in dollars per share) | [1],[2],[7] | $ 21.29 | $ 8.87 | $ 8.71 | ||
[1] | At December 31, 2018, 160,000 options with a market condition for vesting based on an average common stock trading price of $38.94, had not met their performance criteria. Outstanding and exercisable stock options at December 31, 2018 have a net aggregate intrinsic value of $0. A total of 870,939 market-based options were outstanding at December 31, 2018, of which 710,939 were exercisable. | |||||
[2] | At December 31, 2018, the weighted average remaining contractual term of options outstanding and options exercisable was 5.02 years and 3.87 years, respectively. | |||||
[3] | Stock options granted in 2018 include 266,990 options awarded to Ocwen’s current Chief Executive Officer at an exercise price of $4.12 equal to the closing price of our common stock on the effective date of his employment, which was the closing date of the PHH acquisition. | |||||
[4] | The weighted average grant date fair value of stock options granted in 2018 was $2.63. | |||||
[5] | Includes 4,719,750 options which expired unexercised in 2018 because their exercise price was greater than the market price of Ocwen’s stock. | |||||
[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 in 2016. | |||||
[7] | The total fair value of stock options that vested and became exercisable during 2018, 2017 and 2016, based on grant-date fair value, was $0.6 million, $0.7 million and $1.1 million, respectively. |
Employee Compensation and Ben_7
Employee Compensation and Benefit Plans - Schedule of Stock Option Activity (Footnote) (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options granted, fair value (in dollars per share) | $ 2.63 | ||
Total intrinsic value of stock options exercised | $ 0.1 | ||
Stock options which expired unexercised | 4,719,750 | ||
Market-based options that have not met performance criteria (in shares) | 160,000 | ||
Average common stock trading price to determine market condition for options exercise | $ 38.94 | ||
Net aggregate intrinsic value of stock options outstanding | $ 0 | ||
Market-based options outstanding (in shares) | 870,939 | ||
Market-based options outstanding, exercisable (in shares) | 710,939 | ||
Weighted average remaining contractual term of options outstanding | 5 years 8 days | ||
Weighted average remaining contractual term of options exercisable | 3 years 10 months 15 days | ||
Total fair value of stock options vested and became exercisable | $ 0.6 | $ 0.7 | $ 1.1 |
Chief Executive Officer [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options granted | 266,990 | ||
Stock options granted, exercise price | $ 4.12 |
Employee Compensation and Ben_8
Employee Compensation and Benefit Plans Schedule of Stock Unit Activity (Details) - $ / shares | 12 Months Ended | |||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||
Unvested at beginning of year (in shares) | 2,753,918 | [1],[2] | 2,752,054 | [1],[2] | 835,730 | |
Unvested at beginning of year (in dollar per share) | $ 3.69 | [1],[2] | $ 3.91 | [1],[2] | $ 10 | |
Granted (in shares) | 1,809,373 | 971,761 | 2,184,100 | |||
Granted (in dollar per share) | $ 3.57 | $ 2.56 | $ 2.19 | |||
Vested (in shares) | [3],[4] | (796,856) | (896,272) | (26,666) | ||
Vested (in dollar per share) | [3],[4] | $ 2.78 | $ 3.26 | $ 32.56 | ||
Forfeited/Canceled (in shares) | (819,635) | (73,625) | (241,110) | |||
Forfeited/Canceled (in dollar per share) | $ 4.57 | $ 2.20 | $ 6.17 | |||
Unvested at end of year (in shares) | [1],[2] | 2,946,800 | 2,753,918 | 2,752,054 | ||
Unvested at end of year (in dollar per share) | [1],[2] | $ 3.75 | $ 3.69 | $ 3.91 | ||
[1] | The total fair value of the stock units that vested during 2018, 2017 and 2016, based on grant-date fair value, was $2.2 million, $2.9 million and $0.9 million, respectively. | |||||
[2] | The total intrinsic value of stock units vested, which is defined as the market value of the stock on the date of vesting, was $3.3 million, $4.6 million and $0.1 million for 2018, 2017 and 2016, respectively. | |||||
[3] | Stock units granted in 2018 include 983,010 units granted to Ocwen’s current Chief Executive Officer on the effective date of his employment, which was the closing date of the PHH acquisition. | |||||
[4] | Upon the resignation of Ocwen’s former Chief Executive Officer on June 30, 2018, 377,525 unvested stock units which would have been forfeited immediately were modified to allow continued vesting in accordance with the original terms. This had the equivalent effect of canceling the original award and granting a new award. |
Employee Compensation and Ben_9
Employee Compensation and Benefit Plans Schedule of Stock Unit Activity (Footnote) (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock units granted | 1,809,373 | 971,761 | 2,184,100 | ||||
Intrinsic value of stock units vested | $ 3.3 | $ 4.6 | $ 0.1 | ||||
Total intrinsic value of stock units vested | $ 2.2 | $ 2.9 | $ 0.9 | ||||
Unvested stock units | 2,946,800 | [1],[2] | 2,753,918 | [1],[2] | 2,752,054 | [1],[2] | 835,730 |
Weighted average remaining contractual term of share units outstanding | 2 years 5 months 16 days | ||||||
Former Chief Executive Officer [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock units granted | 377,525 | ||||||
Chief Executive Officer [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock units granted | 983,010 | ||||||
Market-based Stock Awards [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Net aggregate intrinsic value of stock awards outstanding | $ 3.3 | ||||||
Market Performance-Based [Member] | Market-based Stock Awards [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock units granted | 377,806 | ||||||
Average common stock trading price | $ 16.26 | ||||||
Unvested stock units | 510,829 | ||||||
Market Performance-Based [Member] | Market-based Stock Awards [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock units granted | 40,000 | ||||||
Average common stock trading price | $ 11.72 | ||||||
Market Performance-Based [Member] | Market-based Stock Awards [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock units granted | 93,023 | ||||||
Average common stock trading price | $ 5.80 | ||||||
[1] | The total fair value of the stock units that vested during 2018, 2017 and 2016, based on grant-date fair value, was $2.2 million, $2.9 million and $0.9 million, respectively. | ||||||
[2] | The total intrinsic value of stock units vested, which is defined as the market value of the stock on the date of vesting, was $3.3 million, $4.6 million and $0.1 million for 2018, 2017 and 2016, respectively. |
Employee Compensation and Be_10
Employee Compensation and Benefit Plans - Schedule of Assumptions used to Value Stock Awards Granted (Details) - $ / shares | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Monte Carlo [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Risk-free interest rate | 1.18% | 1.12% | ||
Risk-free interest rate, minimum | 1.12% | |||
Risk-free interest rate, maximum | 1.15% | 1.18% | ||
Expected stock price volatility | [1] | 74.00% | 77.00% | |
Expected stock price volatility, minimum | [1] | 71.00% | ||
Expected stock price volatility, maximum | [1] | 71.00% | 77.00% | |
Expected dividend yield | 0.00% | 0.00% | 0.00% | |
Expected option life (in years) | [2],[3] | |||
Fair value | $ 4.80 | $ 2 | ||
Black Scholes [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Risk-free interest rate, minimum | 3.14% | 1.60% | ||
Risk-free interest rate, maximum | 2.79% | |||
Expected stock price volatility | [1] | 67.00% | ||
Expected dividend yield | 0.00% | |||
Expected option life (in years) | [2] | 8 years 6 months | ||
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 | $ 2.96 | $ 3.36 | ||
Maximum [Member] | Monte Carlo [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Fair value | 1.84 | $ 4.80 | ||
Maximum [Member] | Black Scholes [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Fair value | $ 1.53 | |||
[1] | (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 Be_11
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, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Equity-based compensation expense: | |||
Awards | $ 2,366 | $ 5,624 | $ 5,181 |
Excess tax benefit related to share-based awards | 294 | 3,701 | 686 |
Stock Options [Member] | |||
Equity-based compensation expense: | |||
Awards | (368) | 1,457 | 1,644 |
Stock Awards [Member] | |||
Equity-based compensation expense: | |||
Awards | $ 2,734 | $ 4,167 | $ 3,537 |
Business Segment Reporting - Sc
Business Segment Reporting - Schedule of Segment Reporting Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |||||||||||||
Results of Operations | |||||||||||||||||||||||
Revenue | $ 310,929 | $ 238,278 | $ 253,581 | $ 260,257 | $ 276,770 | $ 284,642 | $ 311,300 | $ 321,864 | $ 1,063,045 | [1] | $ 1,194,576 | [1] | $ 1,387,163 | [1] | |||||||||
Expenses | 302,819 | [2],[3] | 217,526 | [2],[3] | 205,650 | [2],[3] | 206,501 | [2],[3] | 168,303 | [4],[5] | 273,479 | [4],[5] | 280,480 | [4],[5] | 276,383 | [4],[5] | 932,496 | [1] | 998,645 | [1] | 1,223,254 | [1] | |
Other income (expense): | |||||||||||||||||||||||
Interest income | 14,026 | 15,965 | 19,083 | ||||||||||||||||||||
Interest expense | (275,041) | (363,238) | (412,583) | ||||||||||||||||||||
Bargain purchase gain | 64,036 | 0 | 0 | ||||||||||||||||||||
Gain on sale of mortgage servicing rights, net | 1,325 | 10,537 | 8,492 | ||||||||||||||||||||
Other, net | [1] | (6,371) | (3,168) | 14,738 | |||||||||||||||||||
Total other expense, net | (15,873) | [3] | (61,025) | [3] | (76,336) | [3] | (48,791) | [3] | (153,781) | (37,716) | (72,428) | (75,979) | (202,025) | (339,904) | (370,270) | ||||||||
Loss from continuing operations before income taxes | (7,763) | $ (40,273) | $ (28,405) | $ 4,965 | (45,314) | $ (26,553) | $ (41,608) | $ (30,498) | (71,476) | (143,973) | (206,361) | ||||||||||||
Total Assets | |||||||||||||||||||||||
Balance | 9,394,216 | 8,403,164 | 9,394,216 | 8,403,164 | 7,655,663 | ||||||||||||||||||
Servicing [Member] | |||||||||||||||||||||||
Results of Operations | |||||||||||||||||||||||
Revenue | [1] | 951,224 | 1,041,290 | 1,247,159 | |||||||||||||||||||
Expenses | [1] | 772,467 | 716,384 | 910,577 | |||||||||||||||||||
Other income (expense): | |||||||||||||||||||||||
Interest income | 5,383 | 783 | (109) | ||||||||||||||||||||
Interest expense | (214,172) | (293,595) | (357,413) | ||||||||||||||||||||
Bargain purchase gain | 0 | ||||||||||||||||||||||
Gain on sale of mortgage servicing rights, net | 1,325 | 10,537 | 8,492 | ||||||||||||||||||||
Other, net | [1] | (3,241) | 4,049 | 15,812 | |||||||||||||||||||
Total other expense, net | (210,705) | (278,226) | (333,218) | ||||||||||||||||||||
Loss from continuing operations before income taxes | (31,948) | 46,680 | 3,364 | ||||||||||||||||||||
Total Assets | |||||||||||||||||||||||
Balance | 3,306,208 | 3,033,243 | 3,306,208 | 3,033,243 | 3,312,371 | ||||||||||||||||||
Lending [Member] | |||||||||||||||||||||||
Results of Operations | |||||||||||||||||||||||
Revenue | [1] | 93,672 | 127,475 | 112,363 | |||||||||||||||||||
Expenses | [1] | 82,906 | 128,058 | 114,199 | |||||||||||||||||||
Other income (expense): | |||||||||||||||||||||||
Interest income | 6,061 | 10,914 | 15,300 | ||||||||||||||||||||
Interest expense | (6,639) | (13,893) | (14,398) | ||||||||||||||||||||
Bargain purchase gain | |||||||||||||||||||||||
Gain on sale of mortgage servicing rights, net | 0 | 0 | 0 | ||||||||||||||||||||
Other, net | [1] | 966 | (869) | 1,065 | |||||||||||||||||||
Total other expense, net | 388 | (3,848) | 1,967 | ||||||||||||||||||||
Loss from continuing operations before income taxes | 11,154 | (4,431) | 131 | ||||||||||||||||||||
Total Assets | |||||||||||||||||||||||
Balance | 5,603,481 | 4,945,456 | 5,603,481 | 4,945,456 | 3,863,862 | ||||||||||||||||||
Corporate Items and Other [Member] | |||||||||||||||||||||||
Results of Operations | |||||||||||||||||||||||
Revenue | [1] | 18,149 | 25,811 | 27,646 | |||||||||||||||||||
Expenses | [1] | 77,123 | 154,203 | 198,483 | |||||||||||||||||||
Other income (expense): | |||||||||||||||||||||||
Interest income | 2,582 | 4,268 | 3,892 | ||||||||||||||||||||
Interest expense | (54,230) | (55,750) | (40,772) | ||||||||||||||||||||
Bargain purchase gain | 64,036 | ||||||||||||||||||||||
Gain on sale of mortgage servicing rights, net | 0 | 0 | 0 | ||||||||||||||||||||
Other, net | [1] | (4,096) | (6,348) | (2,139) | |||||||||||||||||||
Total other expense, net | 8,292 | (57,830) | (39,019) | ||||||||||||||||||||
Loss from continuing operations before income taxes | (50,682) | (186,222) | (209,856) | ||||||||||||||||||||
Total Assets | |||||||||||||||||||||||
Balance | 484,527 | 424,465 | 484,527 | 424,465 | 479,430 | ||||||||||||||||||
Corporate Eliminations [Member] | |||||||||||||||||||||||
Results of Operations | |||||||||||||||||||||||
Revenue | [1] | 0 | 0 | (5) | |||||||||||||||||||
Expenses | [1] | 0 | 0 | (5) | |||||||||||||||||||
Other income (expense): | |||||||||||||||||||||||
Interest income | 0 | 0 | 0 | ||||||||||||||||||||
Interest expense | 0 | 0 | 0 | ||||||||||||||||||||
Bargain purchase gain | |||||||||||||||||||||||
Gain on sale of mortgage servicing rights, net | 0 | 0 | 0 | ||||||||||||||||||||
Other, net | [1] | 0 | 0 | 0 | |||||||||||||||||||
Total other expense, net | 0 | 0 | 0 | ||||||||||||||||||||
Loss from continuing operations 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] | The quarter ended December 31, 2018 includes the results of operations of PHH from the acquisition date of October 4, 2018 through December 31, 2018. See Note 2 — Business Acquisition for additional information. | ||||||||||||||||||||||
[3] | ncludes a bargain purchase gain, net of tax, of $64.0 million recognized during the quarter ended December 31, 2018 in connection with the acquisition of PHH. | ||||||||||||||||||||||
[4] | 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 MSR valuation adjustments, net) during the quarter ended December 31, 2017. This reflected 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. | ||||||||||||||||||||||
[5] | Includes the recovery of $28.5 million of losses during the quarter ended December 31, 2017 related to a settlement of outstanding claims that arose from indemnification obligations in connection with our acquisition of MSRs and related servicing advances in 2013. We had recognized such losses on advances in prior periods and recorded the 2017 recovery in Servicing and origination expense. |
Business Segment Reporting - _2
Business Segment Reporting - Schedule of Depreciation and Amortization by Segment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | |||
Depreciation expense | $ 27,202 | $ 26,886 | $ 25,338 |
Amortization of mortgage servicing rights | 51,788 | 32,978 | |
Amortization of debt discount | 1,183 | 1,114 | 4,177 |
Amortization of debt issuance costs | 2,921 | 2,738 | 25,662 |
Servicing [Member] | |||
Segment Reporting Information [Line Items] | |||
Depreciation expense | 4,601 | 5,797 | 6,804 |
Amortization of mortgage servicing rights | 51,515 | 32,669 | |
Amortization of debt discount | 0 | 0 | 727 |
Amortization of debt issuance costs | 0 | 0 | 13,455 |
Lending [Member] | |||
Segment Reporting Information [Line Items] | |||
Depreciation expense | 103 | 194 | 228 |
Amortization of mortgage servicing rights | 273 | 309 | |
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 | 22,498 | 20,895 | 18,306 |
Amortization of mortgage servicing rights | 0 | 0 | |
Amortization of debt discount | 1,183 | 1,114 | 3,450 |
Amortization of debt issuance costs | $ 2,921 | $ 2,738 | $ 12,207 |
Business Segment Reporting - Na
Business Segment Reporting - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | |||
Write-off of internally developed software | $ 0 | $ 8,502 | $ 0 |
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) $ in Millions | 12 Months Ended | 60 Months Ended |
Dec. 31, 2018USD ($) | Dec. 31, 2018USD ($) | |
Loss Contingencies [Line Items] | ||
Third party monitoring costs | $ 177.5 | |
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 | $ 172.3 | 172.3 |
Percentage Portfolio of Loans Serviced or Subserviced | 2.00% | |
California Department of Business Oversight [Member] | ||
Loss Contingencies [Line Items] | ||
Amount of debt forgiveness for borrowers | $ 198 | 198 |
Outstanding amount of debt forgiveness for borrowers | $ 15 | $ 15 |
Commitments - Narrative (Detail
Commitments - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Other Commitments [Line Items] | |||
Minimum rental commitments, 2019 | $ 17,808 | ||
Minimum rental commitments, 2020 | 16,674 | ||
Minimum rental commitments, 2021 | 15,787 | ||
Minimum rental commitments, 2022 | 13,971 | ||
Operating leases, rent expense | $ 16,000 | $ 17,900 | $ 20,000 |
Threshold percentage of outstanding principal balance on maximum claim amount | 98.00% | ||
PHH Corporation [Member] | |||
Other Commitments [Line Items] | |||
Minimum rental commitments, 2019 | $ 7,700 | ||
Minimum rental commitments, 2020 | 7,100 | ||
Minimum rental commitments, 2021 | 6,900 | ||
Minimum rental commitments, 2022 | 6,600 | ||
Floating Rate Reverse Mortgage Loans [Member] | |||
Other Commitments [Line Items] | |||
Additional borrowing capacity to borrowers | 1,400,000 | ||
Forward Mortgage Loan Interest Rate Lock Commitments [Member] | |||
Other Commitments [Line Items] | |||
Short-term commitments to lend | 132,100 | ||
Reverse Mortgage Loan Interest Rate Lock Commitments [Member] | |||
Other Commitments [Line Items] | |||
Short-term commitments to lend | $ 18,100 |
Commitments - Schedule of Futur
Commitments - Schedule of Future Minimum Rental Commitments under Non-cancelable Operating Leases (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
2,019 | $ 17,808 |
2,020 | 16,674 |
2,021 | 15,787 |
2,022 | 13,971 |
2,023 | 3,545 |
Thereafter | 1,409 |
Total minimum lease payments, gross | 69,194 |
Less: Sublease income | (4,744) |
Total minimum lease payments, net | $ 64,450 |
Commitments - Schedule of Activ
Commitments - Schedule of Activity Related to HMBS Repurchases (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018USD ($)Securities | ||
Long-term Purchase Commitment [Line Items] | ||
Beginning balance, repurchase securities, number | Securities | 137 | |
Additions, repurchase securities, number | Securities | 154 | [1] |
Recoveries, net, repurchase securities, number | Securities | (29) | [2] |
Transfers, repurchase securities, number | Securities | 0 | |
Change in value, repurchase securities, number | Securities | 0 | |
Ending balance, repurchase securities, number | Securities | 262 | |
Beginning balance, repurchase securities, value | $ | $ 9,141 | |
Additions, repurchase securities, value | $ | 14,991 | [1] |
Recoveries, repurchase securities, value | $ | (6,637) | [2] |
Transfers, repurchase securities, value | $ | 0 | |
Change in value, repurchase securities, value | $ | (615) | |
Ending balance, repurchase securities, value | $ | $ 16,880 | |
Active [Member] | ||
Long-term Purchase Commitment [Line Items] | ||
Beginning balance, repurchase securities, number | Securities | 0 | |
Additions, repurchase securities, number | Securities | 14 | [1] |
Recoveries, net, repurchase securities, number | Securities | (2) | [2] |
Transfers, repurchase securities, number | Securities | (2) | |
Change in value, repurchase securities, number | Securities | 0 | |
Ending balance, repurchase securities, number | Securities | 10 | |
Beginning balance, repurchase securities, value | $ | $ 0 | |
Additions, repurchase securities, value | $ | 2,979 | [1] |
Recoveries, repurchase securities, value | $ | (496) | [2] |
Transfers, repurchase securities, value | $ | (436) | |
Change in value, repurchase securities, value | $ | 0 | |
Ending balance, repurchase securities, value | $ | $ 2,047 | |
Inactive [Member] | ||
Long-term Purchase Commitment [Line Items] | ||
Beginning balance, repurchase securities, number | Securities | 137 | |
Additions, repurchase securities, number | Securities | 140 | [1] |
Recoveries, net, repurchase securities, number | Securities | (27) | [2] |
Transfers, repurchase securities, number | Securities | 2 | |
Change in value, repurchase securities, number | Securities | 0 | |
Ending balance, repurchase securities, number | Securities | 252 | |
Beginning balance, repurchase securities, value | $ | $ 9,141 | |
Additions, repurchase securities, value | $ | 12,012 | [1] |
Recoveries, repurchase securities, value | $ | (6,141) | [2] |
Transfers, repurchase securities, value | $ | 436 | |
Change in value, repurchase securities, value | $ | (615) | |
Ending balance, repurchase securities, value | $ | $ 14,833 | |
[1] | Total repurchases during the year ended December 31, 2018, includes 59 loans totaling $11.4 million related to MCA repurchases. | |
[2] | Includes amounts received upon assignment of loan to HUD, loan payoff, REO liquidation and claim proceeds less any amounts charged off as unrecoverable. |
Commitments - Schedule of Act_2
Commitments - Schedule of Activity Related to HMBS Repurchases (Footnote) (Details) - Maximum Claim Amount [Member] $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($)Loan | |
Long-term Purchase Commitment [Line Items] | |
Number of maximum claim amount repurchases loans | Loan | 59 |
Amount of maximum claim amount repurchases | $ | $ 11.4 |
Contingencies - Narrative (Deta
Contingencies - Narrative (Details) | Feb. 01, 2018States | Apr. 28, 2017USD ($) | Apr. 20, 2017USD ($)StateStates | Jan. 31, 2018shares | Dec. 31, 2018USD ($)Loan | Dec. 31, 2017USD ($)LoanStatesshares | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Loss Contingencies [Line Items] | |||||||||
Accrued legal fees and settlements | $ 62,763,000 | $ 51,057,000 | |||||||
Loss contingency accrual | 62,763,000 | 51,057,000 | $ 93,797,000 | $ 74,922,000 | |||||
Aggregate cash payments in connection with legal and regulatory settlements | [1] | $ 12,983,000 | 174,941,000 | 47,754,000 | |||||
Number of states charging with regulatory action | States | 29 | ||||||||
Number of jurisdictions where regulatory actions were resolved | States | 29 | ||||||||
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 | $ 51,300,000 | $ 30,800,000 | |||||||
Outstanding representation and warranty repurchase demands, number of loans | Loan | 316 | 180 | |||||||
Indemnification claims recovered | $ 29,900,000 | ||||||||
Securities Class Action [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Accrued legal fees and settlements | 58,200,000 | ||||||||
Litigation settlement expense | $ 49,000,000 | ||||||||
Expected insurance recoveries | 14,000,000 | ||||||||
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 | ||||||||
Florida Attorney General [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Injunctive and equitable relief, costs, and civil money penalties sought | $ 10,000 | ||||||||
Massachusetts Regulatory Agency [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Aggregate cash payments in connection with legal and regulatory settlements | 1,000,000 | ||||||||
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 | 1,875,000 | 625,000 | |||||||
PHH Corporation [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Outstanding representation and warranty repurchase demands | $ 32,300,000 | ||||||||
Outstanding representation and warranty repurchase demands, number of loans | Loan | 211 | ||||||||
[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, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Indemnification Obligations Liability [Roll Forward] | ||||
Beginning balance | $ 19,229 | $ 24,285 | $ 36,615 | |
Provision for representation and warranty obligations | 4,649 | (1,371) | (4,060) | |
New production reserves | 7,437 | 702 | 864 | |
Obligation assumed in connection with the acquisition of PHH | 27,736 | 0 | 0 | |
Payments made in connection with sales of MSRs | 0 | 0 | (1,320) | |
Charge-offs and other | [1] | (9,784) | (4,387) | (7,814) |
Ending balance | $ 49,267 | $ 19,229 | $ 24,285 | |
[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 Operatio_3
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, 2018 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||
Revenue | $ 310,929 | $ 238,278 | $ 253,581 | $ 260,257 | $ 276,770 | $ 284,642 | $ 311,300 | $ 321,864 | $ 1,063,045 | [1] | $ 1,194,576 | [1] | $ 1,387,163 | [1] | |||||||||
Expenses | 302,819 | [2],[3] | 217,526 | [2],[3] | 205,650 | [2],[3] | 206,501 | [2],[3] | 168,303 | [4],[5] | 273,479 | [4],[5] | 280,480 | [4],[5] | 276,383 | [4],[5] | 932,496 | [1] | 998,645 | [1] | 1,223,254 | [1] | |
Other expense, net | (15,873) | [3] | (61,025) | [3] | (76,336) | [3] | (48,791) | [3] | (153,781) | (37,716) | (72,428) | (75,979) | (202,025) | (339,904) | (370,270) | ||||||||
Loss from continuing operations before income taxes | (7,763) | (40,273) | (28,405) | 4,965 | (45,314) | (26,553) | (41,608) | (30,498) | (71,476) | (143,973) | (206,361) | ||||||||||||
Income tax expense (benefit) | (4,012) | 845 | 1,348 | 2,348 | (51) | (20,418) | 2,828 | 2,125 | 529 | (15,516) | (6,986) | ||||||||||||
Loss from continuing operations, net of tax | (3,751) | (41,118) | (29,753) | 2,617 | (45,263) | (6,135) | (44,436) | (32,623) | (72,005) | (128,457) | (199,375) | ||||||||||||
Income from discontinued operations, net of tax | 1,409 | $ 1,409 | 0 | 0 | 0 | 1,409 | 0 | 0 | |||||||||||||||
Net income (loss) | (2,342) | (41,118) | (29,753) | 2,617 | (70,596) | (128,457) | (199,375) | ||||||||||||||||
Net loss (income) attributable to non-controlling interests | 0 | (29) | (78) | (69) | 780 | (117) | (71) | (101) | $ (176) | $ 491 | $ (387) | ||||||||||||
Net loss attributable to Ocwen common stockholders | $ (2,342) | $ (41,147) | $ (29,831) | $ 2,548 | $ (44,483) | $ (6,252) | $ (44,507) | $ (32,724) | |||||||||||||||
Earnings (loss) per share attributable to Ocwen stockholders - Basic and Diluted | |||||||||||||||||||||||
Continuing operations | $ (0.03) | $ (0.31) | $ (0.22) | $ 0.02 | $ (0.34) | $ (0.05) | $ (0.36) | $ (0.26) | $ (0.54) | $ (1.01) | $ (1.61) | ||||||||||||
Discontinued operations | 0.01 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0.01 | 0 | 0 | ||||||||||||
Earnings per share, basic and diluted | $ (0.02) | $ (0.31) | $ (0.22) | $ 0.02 | $ (0.34) | $ (0.05) | $ (0.36) | $ (0.26) | $ (0.53) | $ (1.01) | $ (1.61) | ||||||||||||
[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] | The quarter ended December 31, 2018 includes the results of operations of PHH from the acquisition date of October 4, 2018 through December 31, 2018. See Note 2 — Business Acquisition for additional information. | ||||||||||||||||||||||
[3] | ncludes a bargain purchase gain, net of tax, of $64.0 million recognized during the quarter ended December 31, 2018 in connection with the acquisition of PHH. | ||||||||||||||||||||||
[4] | 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 MSR valuation adjustments, net) during the quarter ended December 31, 2017. This reflected 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. | ||||||||||||||||||||||
[5] | Includes the recovery of $28.5 million of losses during the quarter ended December 31, 2017 related to a settlement of outstanding claims that arose from indemnification obligations in connection with our acquisition of MSRs and related servicing advances in 2013. We had recognized such losses on advances in prior periods and recorded the 2017 recovery in Servicing and origination expense. |
Quarterly Results of Operatio_4
Quarterly Results of Operations (Unaudited) - Schedule of Quarterly Results of Operations (Unaudited) (Footnote) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | ||||
Bargain purchase gain | $ 64,036 | $ 0 | $ 0 | |
Increase in fair value of non-agency MSRs | 84,400 | |||
Increase in valuation of financing liabilities | $ 73,400 | |||
Recovery of losses related to a settlement of outstanding claims | $ 28,500 |