Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | May 03, 2020 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Ocwen Financial Corporation | |
Entity Central Index Key | 0000873860 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 129,683,377 |
UNAUDITED CONSOLIDATED BALANCE
UNAUDITED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Assets | ||
Cash and cash equivalents | $ 263,555 | $ 428,339 |
Restricted cash (amounts related to variable interest entities (VIEs) of $13,881 and $20,434) | 53,177 | 64,001 |
Mortgage servicing rights (MSRs), at fair value | 1,050,228 | 1,486,395 |
Advances, net (amounts related to VIEs of $751,020 and $801,990) | 1,024,807 | 1,056,523 |
Loans held for sale ($203,592 and $208,752 carried at fair value) | 246,015 | 275,269 |
Loans held for investment, at fair value (amounts related to VIEs of $22,561 and $23,342) | 6,591,382 | 6,292,938 |
Receivables, net | 235,305 | 201,220 |
Premises and equipment, net | 37,430 | 38,274 |
Other assets ($17,711 and $8,524 carried at fair value) (amounts related to VIEs of $2,290 and $4,078) | 484,125 | 563,240 |
Total assets | 9,986,024 | 10,406,199 |
Liabilities | ||
Home Equity Conversion Mortgage-Backed Securities (HMBS) related borrowings, at fair value | 6,323,091 | 6,063,435 |
Advance match funded liabilities (related to VIEs) | 625,951 | 679,109 |
Other financing liabilities, at fair value (amounts related to VIEs of $21,365 and $22,002) | 623,049 | 972,595 |
Other secured borrowings, net (amounts related to VIEs $200,006 and $240,893) | 797,615 | 1,025,791 |
Senior notes, net | 311,290 | 311,085 |
Other liabilities ($2,589 and $100 carried at fair value) (amounts related to VIEs of $88 and $144) | 875,171 | 942,173 |
Total liabilities | 9,556,167 | 9,994,188 |
Commitments and Contingencies (Notes 20 and 21) | ||
Ocwen Financial Corporation (Ocwen) stockholders’ equity | ||
Common stock, $.01 par value; 200,000,000 shares authorized; 129,582,259 and 134,862,232 shares issued and outstanding at March 31, 2020 and December 31, 2019 respectively | 1,296 | 1,349 |
Additional paid-in capital | 553,066 | 556,798 |
Accumulated deficit | (116,993) | (138,542) |
Accumulated other comprehensive loss, net of income taxes | (7,512) | (7,594) |
Total stockholders’ equity | 429,857 | 412,011 |
Total liabilities and stockholders’ equity | $ 9,986,024 | $ 10,406,199 |
UNAUDITED CONSOLIDATED BALANC_2
UNAUDITED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Restricted cash (amounts related to variable interest entities (VIEs) of $13,881 and $20,434) | $ 53,177 | $ 64,001 |
Advances, net (amounts related to VIEs of $751,020 and $801,990) | 1,024,807 | 1,056,523 |
Loans held for sale ($203,592 and $208,752 carried at fair value) | 203,592 | 208,752 |
Loans held for investment, at fair value (amounts related to VIEs of $22,561 and $23,342) | 6,591,382 | 6,292,938 |
Other assets, at fair value | 17,711 | 8,524 |
Other assets | 484,125 | 563,240 |
Other financing liabilities, at fair value (amounts related to VIEs of $21,365 and $22,002) | 623,049 | 972,595 |
Other secured borrowings, net (amounts related to VIEs $200,006 and $240,893) | 797,615 | 1,025,791 |
Other liabilities ($2,589 and $100 carried at fair value) (amounts related to VIEs of $88 and $144) | 2,589 | 100 |
Other liabilities | $ 875,171 | $ 942,173 |
Common stock, $.01 par value; 200,000,000 shares authorized; 129,582,259 and 134,862,232 shares issued and outstanding at March 31, 2020 and December 31, 2019 respectively | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 129,582,259 | 134,862,232 |
Common stock, shares outstanding (in shares) | 129,582,259 | 134,862,232 |
Residential Mortgage Backed Securitization Trusts | ||
Loans held for investment, at fair value (amounts related to VIEs of $22,561 and $23,342) | $ 22,561 | $ 23,342 |
Other financing liabilities, at fair value (amounts related to VIEs of $21,365 and $22,002) | 21,365 | 22,002 |
Variable Interest Entity, Primary Beneficiary | ||
Restricted cash (amounts related to variable interest entities (VIEs) of $13,881 and $20,434) | 13,881 | 20,434 |
Advances, net (amounts related to VIEs of $751,020 and $801,990) | 751,020 | 801,990 |
Other assets | 2,290 | 4,078 |
Other secured borrowings, net (amounts related to VIEs $200,006 and $240,893) | 200,006 | 240,893 |
Other liabilities | $ 88 | $ 144 |
UNAUDITED CONSOLIDATED STATEMEN
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenue | ||
Servicing and subservicing fees | $ 211,483 | $ 256,616 |
Reverse mortgage revenue, net | 22,797 | 32,123 |
Gain on loans held for sale, net | 13,331 | 8,982 |
Other revenue, net | 6,231 | 6,167 |
Total revenue | 253,842 | 303,888 |
MSR valuation adjustments, net | (174,120) | (108,998) |
Operating expenses | ||
Compensation and benefits | 60,728 | 94,696 |
Servicing and origination | 20,256 | 28,698 |
Professional services | 25,637 | 3,441 |
Technology and communications | 15,193 | 24,435 |
Occupancy and equipment | 11,969 | 16,589 |
Other expenses | 3,431 | 3,248 |
Total operating expenses | 137,214 | 171,107 |
Other income (expense) | ||
Interest income | 5,395 | 4,558 |
Interest expense | (29,982) | (26,489) |
Pledged MSR liability expense | (6,594) | (43,956) |
Other, net | 1,328 | 1,020 |
Total other expense, net | (29,853) | (64,867) |
Loss before income taxes | (87,345) | (41,084) |
Income tax (benefit) expense | (61,856) | 3,410 |
Net loss attributable to Ocwen stockholders | $ (25,489) | $ (44,494) |
Loss per share attributable to Ocwen stockholders | ||
Basic and Diluted (in USD per share) | $ (0.19) | $ (0.33) |
Weighted average common shares outstanding | ||
Basic and Diluted (in shares) | 134,858,837 | 133,918,986 |
UNAUDITED CONSOLIDATED STATEM_2
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (25,489) | $ (44,494) |
Other comprehensive income, net of income taxes: | ||
Reclassification adjustment for losses on cash flow hedges included in net income | 36 | 34 |
Change in unfunded pension plan obligation liability | 46 | 337 |
Other | 0 | 6 |
Comprehensive loss | $ (25,407) | $ (44,117) |
UNAUDITED CONSOLIDATED STATEM_3
UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | (Accumulated Deficit) Retained Earnings | Accumulated Other Comprehensive Loss, Net of Income Taxes |
Beginning Balance at Dec. 31, 2018 | $ 554,705 | $ 1,339 | $ 554,056 | $ 3,567 | $ (4,257) |
Beginning Balance (in shares) at Dec. 31, 2018 | 133,912,425 | ||||
Net (loss) income | (44,494) | (44,494) | |||
Cumulative effect of fair value election - Mortgage servicing rights | 16 | 16 | |||
Equity-based compensation and other | 990 | 990 | |||
Equity-based compensation and other (in shares) | 33,630 | ||||
Other comprehensive income, net of income taxes | 377 | 377 | |||
Ending Balance at Mar. 31, 2019 | 511,594 | $ 1,339 | 555,046 | (40,911) | (3,880) |
Ending Balance (in shares) at Mar. 31, 2019 | 133,946,055 | ||||
Beginning Balance at Dec. 31, 2019 | $ 412,011 | $ 1,349 | 556,798 | (138,542) | (7,594) |
Beginning Balance (in shares) at Dec. 31, 2019 | 134,862,232 | 134,862,232 | |||
Net (loss) income | $ (25,489) | (25,489) | |||
Cumulative effect of adoption of FASB Accounting Standards Update No. 2016-02 | $ 47,038 | ||||
Repurchase of common stock (in shares) | (5,662,257) | (5,662,257) | |||
Repurchase of common stock | $ (4,605) | $ (57) | (4,548) | ||
Equity-based compensation and other | 820 | $ 4 | 816 | ||
Equity-based compensation and other (in shares) | 382,284 | ||||
Other comprehensive income, net of income taxes | 82 | 82 | |||
Ending Balance at Mar. 31, 2020 | $ 429,857 | $ 1,296 | $ 553,066 | $ (116,993) | $ (7,512) |
Ending Balance (in shares) at Mar. 31, 2020 | 129,582,259 | 129,582,259 |
UNAUDITED CONSOLIDATED STATEM_4
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flows from operating activities | ||
Net loss | $ (25,489) | $ (44,494) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
MSR valuation adjustments, net | 174,120 | 108,998 |
Gain on sale of MSRs, net | (286) | (369) |
Provision for bad debts | 4,879 | 9,170 |
Depreciation | 3,997 | 8,551 |
Amortization of debt issuance costs | 1,733 | 700 |
Equity-based compensation expense | 746 | 857 |
Gain on valuation of financing liability | (30,697) | (26,237) |
Net gain on valuation of mortgage loans held for investment and HMBS-related borrowings | (17,910) | (23,487) |
Gain on loans held for sale, net | (13,331) | (11,112) |
Origination and purchase of loans held for sale | (831,474) | (304,182) |
Proceeds from sale and collections of loans held for sale | 843,178 | 305,322 |
Changes in assets and liabilities: | ||
Decrease in advances, net | 29,428 | 91,114 |
Decrease in receivables and other assets, net | 13,642 | 23,627 |
Increase (decrease) in other liabilities | 18,033 | (36,755) |
Other, net | 408 | (1,039) |
Net cash provided by operating activities | 170,977 | 100,664 |
Cash flows from investing activities | ||
Origination of loans held for investment | (294,932) | (209,264) |
Principal payments received on loans held for investment | 175,095 | 104,630 |
Purchase of MSRs | (29,828) | (48,641) |
Proceeds from sale of MSRs | 0 | 868 |
Proceeds from sale of advances | 105 | 1,070 |
Additions to premises and equipment | (1,072) | (531) |
Proceeds from sale of real estate | 2,814 | 1,682 |
Other, net | 491 | (1,157) |
Net cash used in investing activities | (147,327) | (151,343) |
Cash flows from financing activities | ||
Repayment of advance match funded liabilities, net | (53,158) | (128,900) |
Proceeds from mortgage loan warehouse facilities and other secured borrowings | 1,330,667 | 616,891 |
Repayment of mortgage loan warehouse facilities and other secured borrowings | (1,478,616) | (727,711) |
Proceeds from issuance of additional senior secured term loan (SSTL) | 0 | 119,100 |
Repayment of SSTL borrowings | (126,066) | (6,358) |
Payment of debt issuance costs related to SSTL | (7,267) | (1,284) |
Proceeds from sale of MSRs accounted for as a financing | 0 | 577 |
Proceeds from sale of Home Equity Conversion Mortgages (HECM, or reverse mortgages) accounted for as a financing (HMBS-related borrowings) | 312,249 | 210,563 |
Repayment of HMBS-related borrowings | (172,429) | (102,389) |
Repurchase of common stock | (4,605) | 0 |
Other, net | (33) | (253) |
Net cash used in financing activities | (199,258) | (19,764) |
Net decrease in cash, cash equivalents and restricted cash | (175,608) | (70,443) |
Cash, cash equivalents and restricted cash at beginning of year | 492,340 | 397,010 |
Cash, cash equivalents and restricted cash at end of period | 316,732 | 326,567 |
Supplemental non-cash investing and financing activities: | ||
MSRs | (263,344) | 0 |
Financing liability - MSRs pledged (Rights to MSRs) | (263,344) | 0 |
Recognition of future draw commitments for HECM loans at fair value upon adoption of FASB ASU No. 2016-13 | 47,038 | 0 |
Right-of-use asset | 2,695 | 66,231 |
Lease liability | 2,695 | 66,247 |
Transfers of loans held for sale to real estate owned (REO) | 768 | 1,791 |
Cash and cash equivalents | 263,555 | 263,188 |
Debt service accounts | 15,868 | 22,087 |
Other restricted cash | $ 37,309 | $ 41,292 |
Organization, Business Environm
Organization, Business Environment and Basis of Presentation | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Business Environment and Basis of Presentation | Note 1 - Organization, Business Environment and Basis of Presentation Organization Ocwen Financial Corporation (NYSE: OCN) (Ocwen, we, us and our) is a non-bank mortgage servicer and originator providing solutions through its primary operating subsidiaries, PHH Mortgage Corporation (PMC) and Liberty Home Equity Solutions, Inc. (Liberty). We are headquartered in West Palm Beach, Florida with offices in the United States (U.S.) and the United States Virgin Islands (USVI) and operations in India and the Philippines. Ocwen is a Florida corporation organized in February 1988. Ocwen directly or indirectly owns all of the outstanding common stock of its operating subsidiaries, including PMC since its acquisition on October 4, 2018, Liberty, Ocwen Financial Solutions Private Limited (OFSPL) and Ocwen USVI Services, LLC (OVIS). On March 13, 2020, as part of Ocwen's legal entity restructuring, Liberty and PMC entered into an amended asset purchase agreement pursuant to which Liberty transferred substantially all of its assets, liabilities, contracts and employees to PMC effective March 15, 2020. We continue to originate and service reverse mortgage loans under the brand name Liberty Reverse Mortgage. We perform servicing activities related to our own MSR portfolio (primary) and 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 (PLS, or 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 generally 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, generally servicing retained. The GSEs or Ginnie Mae guarantee these mortgage securitizations. We originate HECM loans, or reverse mortgages, that are mostly insured by the FHA and are an approved issuer of HMBS that are guaranteed by Ginnie Mae. In addition to our originated MSRs, we acquire MSRs through multiple channels, including flow purchase agreements, the GSE Cash Window program and bulk MSR purchases. We had a total of approximately 5,400 employees at March 31, 2020 of which approximately 3,400 were located in India and approximately 500 were based in the Philippines. Our operations in India and the Philippines primarily provide internal support services, principally to our loan servicing business and our corporate functions. Of our foreign-based employees, nearly 80% were engaged in supporting our loan servicing operations as of March 31, 2020 . 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, and these challenges and uncertainties have been amplified by the emergence of the Coronavirus Disease 2019 (COVID-19) pandemic. Losses have significantly eroded stockholders’ equity and weakened our financial condition. Our near-term priority is to return to sustainable profitability in the shortest timeframe possible within an appropriate risk and compliance environment. If we execute on our key business initiatives, we believe we will drive stronger financial performance. 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. First, we must expand our lending business and acquisitions of MSRs that are prudent and well-executed with appropriate financial return targets to replenish and grow our servicing portfolio, and within the constraints of our liquidity. Our efforts to grow and diversify our sources of servicing volumes also mitigate our client concentration risk. We have exposure to client concentration and retention risk as a result of our relationship with NRZ, which accounted for 55% of the UPB in our servicing portfolio as of March 31, 2020 . Currently, subject to proper notice (generally 180 days’ notice), the payment of termination and loan deboarding fees and certain other provisions, NRZ has rights to terminate these agreements for convenience. Because of the large percentage of our servicing business that is represented by agreements with NRZ, if NRZ exercised all or a significant portion of these termination rights, we might need to right-size or restructure certain aspects of our servicing business as well as the related corporate support functions. On February 20, 2020, we received a notice of termination from NRZ with respect to the subservicing agreement between NRZ and PMC, which accounted for 19% of our servicing portfolio UPB at March 31, 2020 . Second, we must re-engineer our cost structure to go beyond eliminating redundant costs through the integration process and establish continuous cost improvement as a core strength. Our continuous cost improvement efforts are focused on leveraging our single servicing platform and technology, optimizing strategic sourcing and off-shore utilization, lean process design, automation and other technology-enabled productivity enhancements. Our initiatives are targeted at delivering superior accuracy, cost, speed and customer satisfaction. We believe these steps are necessary to simplify our operations and drive stronger financial performance. Third, we must manage our balance sheet to ensure adequate liquidity, finance our ongoing business needs and provide a solid platform for executing on our other key business initiatives. Regarding the current maturities of our borrowings, as of March 31, 2020 we had approximately $789.0 million of debt outstanding under facilities coming due in the next 12 months. Portions of our match funded advance 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 have assessed the potential impact of the COVID-19 pandemic on our financial projections and projected liquidity. We have an agreement in place to upsize and extend through June 2021 our OMART and OFAF advance financing facilities. The OMART VFN capacity will increase from $200.0 million to $500.0 million to accommodate forecasted advancing requirements and the amortization of $185.0 million in term notes in August 2020. The OFAF facility will increase to a total capacity of $70.0 million . In addition, we have executed an agreement to extend our MSR repurchase agreement and warehouse facilities with Barclays. We expect to renew, replace or extend our 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, 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 11 – Borrowings , Note 19 – Regulatory Requirements and Note 21 – Contingencies for further information. Finally, we must fulfill our regulatory commitments and resolve our remaining legal and regulatory matters on satisfactory terms. See Note 19 – Regulatory Requirements and Note 21 – Contingencies for further information. In March 2020, the World Health Organization (WHO) categorized COVID-19 as a pandemic and the COVID-19 outbreak was declared a national emergency in the U.S. The COVID-19 pandemic is adversely affecting economic conditions, including an increase in unemployment, and is creating significant uncertainty about the duration and magnitude of the downturn in the economy. We expect delinquencies and forbearance loans to rise in the near term. Delinquent loans and forbearance loans reduce our servicing fee revenue and are more costly to service. In addition, as servicer, we are required to advance unpaid principal and interest to investors for delinquent and forbearance loans and to make certain advances for unpaid taxes and insurance and other costs to the extent that we determine that such amounts are recoverable. An increase in loans in forbearance or an increase in delinquencies would increase our servicing advances and may increase the related interest expense. Such an increase could also adversely affect our liquidity and our ability to fund servicing advances or finance our business. We are currently negotiating extensions and increases to advance facility commitments with our lenders. There is no assurance that our lenders will agree to extend, renew or increase our financing facilities. We have experienced in the first quarter of 2020, and may continue to experience losses in the valuation of our MSRs, loans or other instruments. Further, our operations may be impacted by reduced employee availability due to illness, voluntary or government mandated social distancing and travel restrictions, as well as our shift to greater utilization of remote work arrangements. These factors may also reduce the capacity of vendors, government agencies, and other third parties on whom we are dependent to conduct our operations. We cannot estimate the duration or the impact of the outbreak on our company due to the recent and rapid developments and varied regulatory and agency responses at this time. Accordingly, the business disruption triggered by COVID-19 could materially and adversely affect our business, financial condition, liquidity or results of operations. Our ability to execute on our key business initiatives is not certain and is dependent on the successful execution of several complex actions, including our ability to grow our origination business and acquire MSRs with appropriate financial return targets, our ability to acquire, maintain and grow profitable client relationships, our ability to maintain relationships with the GSEs, Ginnie Mae, FHFA, lenders and regulators, our ability to implement further organizational redesign and cost reduction, as well as the absence of significant unforeseen costs, including regulatory or legal costs, that could negatively impact our return to sustainable profitability, and our ability to extend, renew or replace our debt agreements in the ordinary course of business. Our ability to execute on our key initiatives has been hindered by the recent COVID-19 environment and the impact on our organization depends on the duration of the lockdown and the magnitude of the economic downturn. There can be no assurances that the desired strategic and financial benefits of these actions will be realized. Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in conformity with the instructions of the Securities and Exchange Commission (SEC) to Form 10-Q and SEC Regulation S-X, Article 10, Rule 10-01 for interim financial statements. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (GAAP) for complete financial statements. In our opinion, the accompanying unaudited consolidated financial statements contain all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation. The results of operations and other data for the three months ended March 31, 2020 are not necessarily indicative of the results that may be expected for any other interim period or for the year ending December 31, 2020 . The unaudited consolidated financial statements presented herein should be read in conjunction with the audited consolidated financial statements and related notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2019 . Use of Estimates and Assumptions The preparation of financial statements in conformity with GAAP requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Such estimates and assumptions include, but are not limited to, those that relate to fair value measurements, income taxes, the provision for 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. We considered the impact of COVID-19 on the assumptions and estimates used in the unaudited consolidated financial statements for the three months ended March 31, 2020, as described in the relevant notes. Reclassifications Certain amounts in the unaudited consolidated balance sheet at December 31, 2019 and the unaudited consolidated statement of operations and consolidated statement of cash flows for the three months ended March 31, 2019 have been reclassified to conform to the current period presentation. The reclassifications had no impact on total assets or total liabilities in our unaudited consolidated balance sheets, no impact on net income (loss) or total revenue in our unaudited consolidated statements of operations and no impact on operating, investing and financing cash flows in our unaudited consolidated statements of cash flows. We now present Reverse mortgage revenue, net as a separate revenue line item on the face of the unaudited consolidated statements of operations to provide a further breakdown of Other revenue, net and provide greater transparency on the performance associated with our portfolio of HECM loans, net of the HMBS-related borrowings that are both measured at fair value, as follows: Reclassification within the Statement of Operations - Three Months Ended March 31, 2019 Revenue From Gain on loans held for sale, net $ 8,613 From Other revenue, net 24,263 From Servicing and subservicing fees (753 ) To Reverse mortgage revenue, net (New line item) 32,123 Total revenue — In addition to the above reclassifications, we have made the following presentation changes: • In the unaudited consolidated statements of operations, we now separately present MSR valuation adjustments, net from Total expenses, renamed “Operating expenses”. The purpose of this reclassification is to separately present fair value changes from operating expenses and provide additional insights on the nature of our performance. • Within Other income (expense), net on the unaudited consolidated statements of operations, we now present the expense related to the pledged MSR liability recorded at fair value separately from Interest expense. The purpose of this reclassification is to improve transparency between the interest expense associated with interest-bearing liabilities recorded on an accrual basis and expenses that are attributable to the pledged MSR liability recorded at fair value. The pledged MSR liability is the obligation to deliver to NRZ all contractual cash flows associated with the underlying MSR that did not meet the requirements for sale accounting treatment. The Pledged MSR liability expense reflects net servicing fee remittance and fair value changes. • Within the Total assets section of our consolidated balance sheet at December 31, 2019, we reclassified Match funded advances to Advances to present all servicing-related advances as a single line item. • Within the Cash flows from operating activities section, we reclassified Amortization of debt issuance costs of $0.7 million from Other, net to a new separate line item. • Within the Cash flows from investing activities section, we reclassified Proceeds from sale of real estate of $1.7 million from Other, net to a new separate line. Recently Adopted Accounting Standards Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments (ASU 2016-13 and ASU 2019-04) This ASU requires the measurement and recording of expected lifetime credit losses on loans and other financial instruments measured at amortized cost and replaces the existing incurred loss model for credit losses. The new guidance requires an organization to measure all current expected credit losses (CECL) for financial assets held and certain off-balance sheet credit exposures 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. We adopted this standard on January 1, 2020 by applying the guidance at the adoption date with a cumulative-effect adjustment to the opening balance of retained earnings. We used the modified retrospective method for all financial assets in scope of the standard. Our statements of operations for reporting periods beginning after January 1, 2020 are presented under the new guidance, while prior period amounts continue to be reported in accordance with previously applicable GAAP. As permitted by this standard, we made an irrevocable fair value election for certain financial instruments within the scope of the standard. We elected the fair value option for future draw commitments for HECM loans purchased or originated before January 1, 2019. For the HECM loan future draw commitments, we recorded a $47.0 million cumulative-effect transition gain adjustment (before income taxes) to retained earnings as of January 1, 2020 to recognize the fair value as of that date. We did not record any significant net tax effect related to this adjustment as the increase in the deferred tax liability was offset by a corresponding decrease to the valuation allowance. The transition adjustment related to financial instruments for which we are not electing the fair value option did not result in any significant adjustment to the opening balance of retained earnings. Our measurement of lifetime expected credit losses is based on relevant qualitative and quantitative information about past events, including historical loss experience, current conditions, and reasonable and supportable forecasts that affect collectability. Fair Value Measurement: Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement (ASU 2018-13) This ASU modifies the disclosure requirements for fair value measurements in FASB ASC Topic 820, Fair Value Measurement. The main provisions in this ASU include removal of the following disclosure requirements: 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. Our adoption of this standard on January 1, 2020 did not have a material impact on our unaudited consolidated financial statements. 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. Upon adoption of this standard on January 1, 2020, we elected to apply the amendments in this ASU prospectively to all implementation costs incurred subsequent to that date. Our adoption of this standard did not have a material impact on our unaudited consolidated financial statements. Accounting Standards Issued but Not Yet Adopted Income Taxes: Simplifying the Accounting for Income Taxes (ASU 2019-12) On December 18, 2019, the FASB issued this ASU to ASC Topic 740, Income Taxes, as part as part of its overall simplification initiative to reduce costs and complexity of applying accounting standards while maintaining or improving the usefulness of the information provided to users of financial statements. Amendments include the removal of certain exceptions to the general principles of ASC 740 in such areas as intraperiod tax allocation, year to date losses in interim periods and deferred tax liabilities related to outside basis differences. Amendments also include simplification in other areas such as interim recognition of enactment of tax laws or rate changes and accounting for a franchise tax (or similar tax) that is partially based on income. This standard will be effective for us on January 1, 2021. Early adoption is permitted in any interim or annual period, with any adjustments reflected as of the beginning of the fiscal year of adoption. If an entity chooses to early adopt, it must adopt all changes as a result of the ASU. We are currently evaluating the effect of this standard. |
Cost Re-Engineering Plan
Cost Re-Engineering Plan | 3 Months Ended |
Mar. 31, 2020 | |
Restructuring and Related Activities [Abstract] | |
Cost Re-Engineering Plan | Note 2 - Cost Re-Engineering Plan In February 2019, we announced our intention to execute cost re-engineering opportunities in order to drive stronger financial performance and, in the longer term, simplify our operations. Our cost re-engineering plan extended beyond eliminating redundant costs through the integration process and addressed organizational, process and control redesign and automation, human capital planning, off-shore utilization, strategic sourcing and facilities rationalization. Costs for this plan included severance, retention and other incentive awards, facilities-related costs and other costs to execute the reorganization. While we continue to pursue additional cost re-engineering initiatives, this $65.0 million cost re-engineering plan announced in February 2019 was completed by December 31, 2019. Our remaining liability at March 31, 2020 is $5.9 million and is included in Other accrued expenses, a component of Other liabilities. The following table provides a summary of plan costs incurred during the three months ended March 31, 2019: Employee-related Other Total Total costs incurred $ 19,163 $ 2,973 $ 22,136 The above expenses were all incurred within the Corporate Items and Other segment. Employee-related costs are reported in Compensation and benefits expense in the unaudited consolidated statements of operations. Other costs are primarily reported in Professional services expense and Other expenses. |
Securitizations and Variable In
Securitizations and Variable Interest Entities | 3 Months Ended |
Mar. 31, 2020 | |
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 using special purpose entities (SPEs) or VIEs into three groups: (1) securitizations of residential mortgage loans, (2) financings of advances and (3) MSR financings. Financing transactions that do not use SPEs or VIEs are disclosed in Note 11 – Borrowings . We have determined that the SPEs created in connection with our match funded advance financing facilities are 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 Transfers of Forward Loans We sell or securitize forward loans that we originate or purchase 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: Three Months Ended March 31, 2020 2019 Proceeds received from securitizations $ 820,001 $ 242,960 Servicing fees collected (1) 12,252 15,918 Purchases of previously transferred assets, net of claims reimbursed (2,607 ) (904 ) $ 829,646 $ 257,974 (1) 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 unaudited consolidated statements of operations. In connection with these transfers, we retained MSRs of $6.6 million and $0.8 million during the three months ended March 31, 2020 and 2019 , 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 an estimate of our maximum exposure to loss including the UPB of the transferred loans: March 31, 2020 December 31, 2019 Carrying value of assets MSRs, at fair value $ 83,582 $ 109,581 Advances 127,114 141,829 UPB of loans transferred 15,831,062 14,490,984 Maximum exposure to loss $ 16,041,758 $ 14,742,394 At March 31, 2020 and December 31, 2019 , 7.2% and 7.7% , 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 unaudited 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. The changes in fair value of the HECM loans and HMBS-related borrowings are included in Reverse mortgage revenue, net in our unaudited consolidated statements of operations. Financings of Advances Match funded advances, i.e., advances that are pledged as collateral to our advance facilities, 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 SPEs. These SPEs issue debt supported by collections on the transferred advances, and we refer to this debt as Advance 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 Advance match funded debt until the payment dates specified in the indenture are classified as debt service accounts within Restricted cash in our unaudited 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 advance facilities are held in the name of the SPE created in connection with the facility. We classify the transferred advances on our unaudited consolidated balance sheets as a component of Advances, net and the related liabilities as Advance 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 Advances, Restricted cash (Debt service accounts), Advance match funded liabilities and amounts due to affiliates. Amounts due to affiliates are eliminated in consolidation in our unaudited consolidated balance sheets. MSR Financings On July 1, 2019, we entered into a $300.0 million financing facility with a third-party secured by certain Fannie Mae and Freddie Mac MSRs (Agency MSRs). Two trusts were established in connection with this facility. On July 1, 2019 we entered into an MSR Excess Spread Participation Agreement under which we created a 100% participation interest in the portfolio excess servicing fees, pursuant to which the holder of the participation interest is entitled to receive certain funds collected on the related portfolio of mortgage loans (other than ancillary income and advance reimbursement amounts) with respect to such Portfolio Excess Servicing Fees. This participation interest has been contributed to the trusts. In connection with this facility, we entered into repurchase agreements with a third-party pursuant to which we sold trust certificates of the trusts representing certain indirect economic interests in the Agency MSRs and agreed to repurchase such certificates at a future date at the repurchase price set forth in the repurchase agreements. Our obligations under the facility are secured by a lien on the related Agency MSRs. In addition, Ocwen guarantees the obligations under the facility. This facility will terminate in June 2020 unless the parties mutually agree to renew or extend. We determined that the trusts are VIEs for which we are the primary beneficiary. Therefore, we have included the trusts in our consolidated financial statements effective July 1, 2019. We have the power to direct the activities of the VIEs that most significantly impact the VIE’s economic performance given that we are the servicer of the Agency MSRs that result in cash flows to the trusts. In addition, we have designed the trusts at inception to facilitate the third-party funding facility under which we have the obligation to absorb the losses of the VIEs that could be potentially significant to the VIEs. The table below presents the carrying value and classification of the assets and liabilities of the Agency MSR financing facility: March 31, 2020 December 31, 2019 MSRs pledged (MSRs, at fair value) $ 173,313 $ 245,533 Unamortized debt issuance costs (Other assets) 473 946 Debt service account (Restricted cash) 102 100 Outstanding borrowings (Other secured borrowings, net) 114,290 147,706 On November 26, 2019, we issued $100.0 million Ocwen Excess Spread-Collateralized Notes, Series 2019-PLS1 Class A (PLS Notes) secured by certain of PMC’s private label MSRs (PLS MSRs). PMC PLS ESR Issuer LLC (PLS Issuer) was established in this connection as a wholly owned subsidiary of PMC. PMC entered into an MSR Excess Spread Participation Agreement with PLS Issuer. PMC created a participation interest in the excess servicing fees, related float and REO fees pursuant to which the holder of the participation interest will be entitled to receive such Excess Servicing Fees, related float and REO fees. PMC holds the MSRs and services the loans which create the related excess cash flows pledged under the MSR Excess Spread Participation Agreement. PLS Issuer’s obligations under the facility are secured by a lien on the related PLS MSRs. PMC sold a participation certificate representing certain economic interests in the PLS MSRs and in order to secure its obligations under the participation certificate, it granted a security interest to PLS Issuer in the PLS MSRs. The PLS Issuer assigned the security interest in the PLS MSRs to the collateral agent for the noteholders. Ocwen guarantees the obligations of PLS Issuer under the facility. We determined that PLS Issuer is a VIE for which we are the primary beneficiary. Therefore, we have included PLS Issuer in our consolidated financial statements effective November 26, 2019. We have the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance given that we are the servicer of the MSRs that result in cash flows to PLS Issuer. In addition, PMC has designed PLS Issuer at inception to facilitate the funding for general corporate purposes. Separately, in return for the participation interests, PMC received the proceeds from issuance of the PLS Notes. PMC is the sole member of PLS Issuer, thus PMC has the obligation to absorb the losses of the VIE that could be potentially significant to the VIE. The table below presents the carrying value and classification of the assets and liabilities of the PLS Notes facility: March 31, 2020 December 31, 2019 MSRs pledged (MSRs, at fair value) $ 141,610 $ 146,215 Debt service account (Restricted cash) 2,941 3,002 Outstanding borrowings (Other secured borrowings, net) 86,911 94,395 Unamortized debt issuance costs (Other secured borrowings, net) (1,196 ) (1,207 ) 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 unaudited consolidated balance sheets as a result of residual securities we acquired which were issued by the trusts. March 31, 2020 December 31, 2019 Loans held for investment, at fair value - Restricted for securitization investors $ 22,561 $ 23,342 Financing liability - Owed to securitization investors, at fair value 21,365 22,002 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 the two securitization trust 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. |
Fair Value
Fair Value | 3 Months Ended |
Mar. 31, 2020 | |
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 measured, at fair value are as follows: March 31, 2020 December 31, 2019 Level Carrying Value Fair Value Carrying Value Fair Value Financial assets Loans held for sale Loans held for sale, at fair value (a) (f) 3, 2 $ 203,592 $ 203,592 $ 208,752 $ 208,752 Loans held for sale, at lower of cost or fair value (b) 3 42,423 42,423 66,517 66,517 Total Loans held for sale $ 246,015 $ 246,015 $ 275,269 $ 275,269 Loans held for investment Loans held for investment - Reverse mortgages (a) 3 $ 6,568,821 $ 6,568,821 $ 6,269,596 $ 6,269,596 Loans held for investment - Restricted for securitization investors (a) 3 22,561 22,561 23,342 23,342 Total loans held for investment $ 6,591,382 $ 6,591,382 $ 6,292,938 $ 6,292,938 March 31, 2020 December 31, 2019 Level Carrying Value Fair Value Carrying Value Fair Value Advances, net (c) 3 $ 1,024,807 $ 1,024,807 $ 1,056,523 $ 1,056,523 Receivables, net (c) 3 235,305 235,305 201,220 201,220 Mortgage-backed securities (a) 3 1,670 1,670 2,075 2,075 Corporate bonds (a) 2 211 211 441 441 Financial liabilities: Advance match funded liabilities (c) 3 $ 625,951 $ 631,247 $ 679,109 $ 679,507 Financing liabilities: HMBS-related borrowings (a) 3 $ 6,323,091 $ 6,323,091 $ 6,063,435 $ 6,063,435 Financing liability - MSRs pledged (Rights to MSRs) (a) (e) 3 601,684 601,684 950,593 950,593 Financing liability - Owed to securitization investors (a) 3 21,365 21,365 22,002 22,002 Total Financing liabilities $ 6,946,140 $ 6,946,140 $ 7,036,030 $ 7,036,030 Other secured borrowings: Senior secured term loan (c) (d) 2 $ 191,810 $ 177,546 $ 322,758 $ 324,643 Other (c) 3 605,805 580,569 703,033 686,146 Total Other secured borrowings $ 797,615 $ 758,115 $ 1,025,791 $ 1,010,789 Senior notes: Senior unsecured notes (c) (d) 2 $ 21,125 $ 14,902 $ 21,046 $ 13,821 Senior secured notes (c) (d) 2 290,165 238,379 290,039 256,201 Total Senior notes $ 311,290 $ 253,281 $ 311,085 $ 270,022 Derivative financial instrument assets (liabilities) Interest rate lock commitments (a) (f) 3, 2 $ 10,478 $ 10,478 $ 4,878 $ 4,878 Forward trades - Loans held for sale (a) 1 (235 ) (235 ) (92 ) (92 ) TBA / Forward mortgage-backed securities (MBS) trades and futures - MSR hedging (a) 1 2,999 2,999 1,121 1,121 MSRs (a) (e) 3 $ 1,050,228 $ 1,050,228 $ 1,486,395 $ 1,486,395 (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 11 – Borrowings for additional information . (e) A rollforward of the beginning and ending balances of MSRs and Financing liability - MSRs pledged that we measure at fair value on a recurring basis is provided in Note 7 – Mortgage Servicing and Note 8 — Rights to MSRs , respectively. (f) Level 3 at March 31, 2020 and Level 2 at December 31, 2019. The following tables present a rollforward of the beginning and ending balances 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- tion Investors Financing Liability - Owed to Securit - ization Investors Loans Held for Sale - Fair Value Mortgage-Backed Securities IRLCs Three months ended March 31, 2020 Beginning balance $ 6,269,596 $ (6,063,434 ) $ 23,342 $ (22,002 ) $ — $ 2,075 $ — Cumulative effect of fair value election 47,038 — — — — — Purchases, issuances, sales and settlements Purchases — — — — — — — Issuances 294,932 (312,249 ) — — — — — Sales — — — — — — — Settlements (175,095 ) 172,429 (781 ) 637 — — — Transfers (to) from: Loans held for sale, at fair value (578 ) — — — — — — Other assets (265 ) — — — — — — Receivables, net (129 ) — — — — — — 165,903 (139,820 ) (781 ) 637 — — — Total realized and unrealized gains (losses) Included in earnings: Change in fair value 133,322 (119,837 ) — — — (405 ) — Calls and other — — — — — — — 133,322 (119,837 ) — — — (405 ) — Transfers in and / or out of Level 3 — — — — 25,582 — 10,478 Ending balance $ 6,568,821 $ (6,323,091 ) $ 22,561 $ (21,365 ) $ 25,582 $ 1,670 $ 10,478 Loans Held for Investment - Reverse Mortgages HMBS-Related Borrowings Loans Held for Inv. - Restricted for Securitiza- tion Investors Financing Liability - Owed to Securit - ization Investors Mortgage-Backed Securities Derivatives - Interest Rate Caps Three months ended March 31, 2019 Beginning balance $ 5,472,199 $ (5,380,448 ) $ 26,520 $ (24,815 ) $ 1,502 $ 678 Purchases, issuances, sales and settlements Purchases — — — — — — Issuances 209,264 (210,563 ) — — — — Sales — — — — — — Settlements (104,630 ) 102,389 (283 ) 253 — — Transfers (to) from: Loans held for sale, at fair value (396 ) — — — — — Other assets (119 ) — — — — — Receivables, net (68 ) — — — — — 104,051 (108,174 ) (283 ) 253 — — Total realized and unrealized gains (losses) Included in earnings: Change in fair value 150,667 (126,066 ) — — 284 (402 ) Calls and other — — — — — — 150,667 (126,066 ) — — 284 (402 ) Transfers in and / or out of Level 3 — — — — — — Ending balance $ 5,726,917 $ (5,614,688 ) $ 26,237 $ (24,562 ) $ 1,786 $ 276 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 generally 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 purchase certain loans from Ginnie Mae guaranteed securitizations in connection with loan modifications, strategic early buyouts (EBO) and loan resolution activity as part of our contractual obligations as the servicer of the loans. On January 1, 2020, we elected to classify any repurchased loans after January 1, 2020 as loans held for sale at fair value. Modified and EBO loans purchased before January 1, 2020 are classified as loans held for sale at the lower of cost or fair value. We expect to redeliver (sell) the loans into new Ginnie Mae guaranteed securitizations (in the case of modified loans) or sell the loans to a private investor (in the case of EBO loans). The fair value of these loans was estimated using published forward Ginnie Mae prices or existing sale contracts at December 31, 2019. At March 31, 2020, as a result of the volatility of capital markets due to the COVID-19 pandemic, loans with a fair value of $25.6 million required the use of significant unobservable inputs, including the assumptions of the embedded MSR, margin and yield, and was classified as Level 3. Loans repurchased in connection with loan resolution activities are classified as 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. 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, unless facts and circumstances exist that could impact deal economics, at which point we use judgment to determine appropriate adjustments to recorded fair value, if any. We determine 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, including all future draw commitments for HECM loans. On January 1, 2019, we made an irrevocable fair value election on all future draw commitments for HECM loans that were purchased or originated on or after January 1, 2019. In connection with our adoption of ASU 2016-13 on January 1, 2020, we made an irrevocable fair value election on all future draw commitments for HECM loans that were purchased or originated before January 1, 2019. Significant assumptions include expected future draws and 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. Significant valuation assumptions March 31, December 31, Life in years Range 1.2 to 8.4 2.4 to 7.8 Weighted average 6.5 6.0 Conditional repayment rate Range 8.0% to 24.3% 7.8% to 28.3% Weighted average 13.2 % 14.6 % Discount rate 2.0 % 2.8 % 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, excluding future draw commitments, 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 from 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. MSRs We determine the fair value of MSRs primarily using discounted cash flow methodologies. 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. We engage third-party valuation experts who 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 and prepayment 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, incorporating available industry survey results and client feedback, and including risk premiums and liquidity adjustments. While the models and related assumptions used by the valuation experts are proprietary to them, we understand the methodologies 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 unaudited consolidated financial statements comply with the accounting guidance for fair value measurements and disclosures and reflect the assumptions that a market participant would use. We evaluate the reasonableness of our third-party experts’ assumptions using historical experience adjusted for prevailing market conditions. Assumptions used in the valuation of MSRs include: • Mortgage prepayment speeds • 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 • Curtailment on advances MSRs are carried at fair value and classified within Level 3 of the valuation hierarchy. The fair value is determined using 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 recorded 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 are contemplated along with other market-based transactions in their model validation. A change in the valuation inputs or assumptions might result in a significantly higher or lower fair value measurement. Changes in market interest rates predominantly impact the fair value for Agency MSRs via prepayment speeds by altering the borrower refinance incentive and the non-Agency MSRs due to the impact on advance costs. Other key assumptions used in the valuation of these MSRs include delinquency rates and discount rates. Significant valuation assumptions March 31, 2020 December 31, 2019 Agency Non-Agency Agency Non-Agency Weighted average prepayment speed 17.5 % 12.2 % 11.7 % 12.2 % Weighted average delinquency rate 4.8 % 25.7 % 3.2 % 27.3 % Advance financing cost 5-year swap 5-yr swap plus 2.00% 5-year swap 5-yr swap plus 2.00% 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 9.4 % 11.3 % 9.3 % 11.3 % Weighted average cost to service (in dollars) $ 93 $ 278 $ 85 $ 277 As a result of the market volatility and uncertainties due to the COVID-19 outbreak, management exercised significant judgment in determining and updating the key assumptions that market participants would use when pricing the MSR based on the known or knowable information as of March 31, 2020. 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 as of March 31, 2020 given hypothetical shifts in lifetime prepayments and yield assumptions: Adverse change in fair value 10% 20% Weighted average prepayment speeds $ (52,979 ) $ (100,320 ) Weighted average discount rate (14,339 ) (27,843 ) The sensitivity analysis measures the potential impact on fair values based on hypothetical changes, which in the case of our portfolio at March 31, 2020 are increased prepayment speeds and an increase in the yield assumption. Advances We value advances at their net realizable value, which generally approximates fair value. Servicing advances have no stated maturity and do not bear interest. Principal and interest advances are generally realized within a relatively short period of time. The timing of recovery of taxes, insurance and other corporate advances depends on the underlying loan attributes, performance, and in many cases, foreclosure or liquidation timeline. The fair value adjustment to servicing advances associated with the estimated time to recover such advances is separately measured and reported as a component of the fair value of the associated MSR, consistent with actual market transactions. Refer to MSRs above for a description of the valuation methodology and assumptions related to the cost of financing servicing advances and discount rate, among other factors. Receivables The carrying value of receivables generally approximates fair value because of the relatively short period of time between their origination and realization. Mortgage-Backed Securities (MBS) Our subordinate and residual securities are not actively traded, and therefore, we estimate the fair value of these securities 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 unaudited consolidated statements of operations. Advance Match Funded Liabilities For advance 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 advance 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 assume the notes are refinanced at the end of their revolving periods, consistent with how we manage our advance facilities. 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. Significant valuation assumptions March 31, December 31, Life in years Range 1.2 to 8.4 2.4 to 7.8 Weighted average 6.5 6 Conditional repayment rate Range 8.0% to 24.3% 7.8% to 28.3% Weighted average 13.2 % 14.6 % Discount rate 1.8 % 2.7 % Significant increases or decreases in any of these assumptions in isolation would have resulted in a significantly higher or lower fair value. MSRs Pledged (Rights to MSRs) We have elected to measure and record 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. We determine the fair value of the pledged MSR liability following a similar approach as for the associated pledged MSRs. 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. Significant valuation assumptions March 31, December 31, Weighted average prepayment speed 12.3 % 11.9 % Weighted average delinquency rate 27.7 % 20.3 % Advance financing cost 5-year swap plus 0% to 2.00% 5-year swap plus 0% to 2.00% Interest rate for computing float earnings 5-year swap minus 0% to 0.50% 5-year swap minus 0% to 0.50% Weighted average discount rate 11.4 % 10.7 % Weighted average cost to service (in dollars) $ 292 $ 223 Significant increases or decreases in these assumptions in isolation would have resulted in a significantly higher or lower fair value. 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 SSTL, we base the fair value on valuation data obtained from a pricing service. Secured Notes In 2014, we issued Ocwen Asset Servicing Income Series (OASIS), Series 2014-1 Notes secured by Ocwen-owned MSRs relating to Freddie Mac mortgages. In 2019, we issued Ocwen Excess Spread-Collateralized Notes, Series 2019-PLS1 notes secured by certain of PMC’s private label MSRs. We determine the fair value of these notes based on bid prices provided by third parties involved in the issuance and placement of the notes. Senior Notes We base the fair value on quoted prices in a market with limited trading activity, or on valuation data obtained from a pricing service in the absence of trading data. 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. As of December 31, 2019, IRLCs were classified within Level 2 of the valuation hierarchy as the primary component of the price was 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. As of March 31, 2020, IRLCs were transferred to Level 3 assets as historical fallout rates required significant unobservable adjustments to account for the COVID-19 uncertainties. We entered 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 until August 2019 and, beginning in September 2019, to hedge of our net MSR portfolio. TBAs and interest rate swap futures 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 | 3 Months Ended |
Mar. 31, 2020 | |
Receivables [Abstract] | |
Loans Held for Sale | Note 5 – Loans Held for Sale Loans Held for Sale - Fair Value Three Months Ended March 31, 2020 2019 Beginning balance $ 208,752 $ 176,525 Originations and purchases (2) 831,474 219,867 Proceeds from sales (805,202 ) (235,895 ) Principal collections (6,833 ) (5,516 ) Transfers from (to): Loans held for investment, at fair value 578 396 Receivables, net (31,302 ) (581 ) REO (Other assets) (768 ) (696 ) Gain on sale of loans 6,418 8,191 Decrease in fair value of loans (1,642 ) (228 ) Other 2,117 (8,923 ) Ending balance (1) (2) (3) $ 203,592 $ 153,140 (1) At March 31, 2020 and 2019 , the balances include $(9.4) million and $(7.8) million , respectively, of fair value adjustments. (2) We elected the fair value option for all newly repurchased loans after December 31, 2019, consistent with our fair value election of originated loans. (3) At March 31, 2020 and 2019 , the balances include $25.6 million and nil , 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 - Lower of Cost or Fair Value Three Months Ended March 31, 2020 2019 Beginning balance $ 66,517 $ 66,097 Purchases (1) — 84,315 Proceeds from sales (30,492 ) (62,135 ) Principal collections (651 ) (1,776 ) Transfers from (to): Receivables, net 266 (27,411 ) REO (Other assets) — (1,095 ) Gain on sale of loans 1,842 551 Decrease in valuation allowance (138 ) 706 Other 5,079 10,295 Ending balance (1) $ 42,423 $ 69,547 (1) At March 31, 2020 and 2019 , the balances include $29.3 million and $42.7 million , respectively, of loans that we repurchased from Ginnie Mae guaranteed securitizations pursuant to Ginnie Mae servicing guidelines. Loans repurchased after December 31, 2019 are classified as Loans Held for Sale - Fair Value since we elected the fair value option, consistent with our fair value election for originated or purchased loans. Valuation Allowance - Loans Held for Sale at Lower of Cost or Fair Value Three Months Ended March 31, 2020 2019 Beginning balance $ 6,643 $ 11,569 Provision 570 642 Transfer from Liability for indemnification obligations (Other liabilities) 25 67 Sales of loans (457 ) (1,415 ) Ending balance $ 6,781 $ 10,863 Gain on Loans Held for Sale, Net Three Months Ended March 31, 2020 2019 Gain on sales of loans, net MSRs retained on transfers of forward mortgage loans $ 6,561 $ 828 Gain on sale of repurchased Ginnie Mae loans 1,842 538 Gain on sale of forward mortgage loans 6,418 10,444 14,821 11,810 Change in fair value of IRLCs 5,714 (341 ) Change in fair value of loans held for sale 159 (142 ) Loss on economic hedge instruments (7,192 ) (2,270 ) Other (171 ) (75 ) $ 13,331 $ 8,982 |
Advances
Advances | 3 Months Ended |
Mar. 31, 2020 | |
Advances [Abstract] | |
Advances | Note 6 – Advances March 31, 2020 December 31, 2019 Principal and interest $ 426,308 $ 414,846 Taxes and insurance 383,829 422,383 Foreclosures, bankruptcy, REO and other 222,043 229,219 1,032,180 1,066,448 Allowance for losses (7,373 ) (9,925 ) Advances, net $ 1,024,807 $ 1,056,523 The following table summarizes the activity in net advances: Three Months Ended March 31, 2020 2019 Beginning balance $ 1,056,523 $ 1,186,676 New advances 243,545 105,995 Sales of advances (228 ) (707 ) Collections of advances and other (277,585 ) (198,008 ) Net decrease in allowance for losses (1) 2,552 124 Ending balance $ 1,024,807 $ 1,094,080 (1) As disclosed in Note 1, there was no significant adjustment as of January 1, 2020 as a result of the adoption of ASU 2016-13. Servicing advances are generally expected to be fully reimbursed under the terms of the servicing agreements. The estimate for the allowance for losses is based on relevant qualitative and quantitative information about past events, including historical collection and loss experience, current conditions, and reasonable and supportable forecasts that affect collectability. The allowance for losses includes an estimate for claimable (with investors) but nonrecoverable expenses, for example due to servicer error, such as lack of reasonable documentation as to the type and amount of advances. Allowance for Losses Three Months Ended March 31, 2020 2019 Beginning balance $ 9,925 $ 23,259 Provision (reversal) (761 ) 1,762 Net charge-offs and other (1,791 ) (1,886 ) Ending balance (1) $ 7,373 $ 23,135 (1) $18.0 million allowance related to sold advances was reclassified in the third quarter of 2019 and presented as Other liabilities (Liability for indemnification obligations). |
Mortgage Servicing
Mortgage Servicing | 3 Months Ended |
Mar. 31, 2020 | |
Transfers and Servicing [Abstract] | |
Mortgage Servicing | Note 7 – Mortgage Servicing During each period, we remeasure our MSR at fair value, which contemplates the receipt or nonreceipt of the servicing income for that period. The servicing income, including expectations of future servicing cash flows, are inputs for the measurement of the MSR fair value. The net result on the statement of operations is that we record the contractual cash received in each period as revenue within Servicing and subservicing fees, offset by the remeasurement of the MSR fair value within MSR valuation adjustments, net. MSRs – Fair Value Measurement Method Three Months Ended March 31, 2020 2019 Agency Non-Agency Total Agency Non-Agency Total Beginning balance $ 714,006 $ 772,389 $ 1,486,395 $ 865,587 $ 591,562 $ 1,457,149 Sales and other transfers — (56 ) (56 ) (435 ) (132 ) (567 ) Additions: Recognized on the sale of residential mortgage loans 5,930 — 5,930 1,407 — 1,407 Purchase of MSRs 31,490 — 31,490 54,513 — 54,513 Servicing transfers and adjustments (1) (263,630 ) (893 ) (264,523 ) — (3,313 ) (3,313 ) Changes in fair value (2): Changes in valuation inputs or other assumptions (166,532 ) 10,392 (156,140 ) (64,117 ) (156 ) (64,273 ) Realization of expected future cash flows and other changes (27,037 ) (25,831 ) (52,868 ) (31,263 ) (13,462 ) (44,725 ) Ending balance $ 294,227 $ 756,001 $ 1,050,228 $ 825,692 $ 574,499 $ 1,400,191 (1) Servicing transfers and adjustments include a $263.7 million derecognition of MSRs/Rights to MSRs effective with the February 20, 2020 termination of the subservicing agreement between NRZ and PMC. See Note 8 — Rights to MSRs for further information. (2) Changes in fair value are recognized in MSR valuation adjustments, net in the unaudited consolidated statements of operations. Portfolio of Assets Serviced The following table presents the composition of our primary servicing and subservicing portfolios as measured by UPB. The UPB amounts in the table below are not included on our unaudited consolidated balance sheets, with the exception of the Reverse mortgage loans. UPB at March 31, 2020 December 31, 2019 March 31, 2019 Servicing $ 70,718,538 $ 70,428,208 $ 69,616,987 Reverse mortgage loan servicing (1) 6,432,003 6,229,724 5,671,103 Subservicing 17,676,677 17,120,905 49,805,407 NRZ (2) (3) 113,934,122 118,587,594 125,987,243 $ 208,761,340 $ 212,366,431 $ 251,080,740 (1) Reverse mortgage loans are reported on our unaudited consolidated balance sheets and are classified as loans held for investment. No separate MSRs are recognized in our unaudited consolidated balance sheets. (2) UPB of loans for which the Rights to MSRs have been sold to NRZ, including $55.6 billion for which third-party consents have been received and the MSRs have been transferred to NRZ (the MSRs remain on balance sheet as the transactions do not achieve sale accounting treatment). (3) Includes $40.0 billion of servicing UPB at March 31, 2020 pursuant to the subservicing agreement between NRZ and PMC for which we received a notice of termination from NRZ on February 20, 2020. While the MSRs and the Rights to MSRs associated with these loans are derecognized from our consolidated balance sheet, we continue to service these loans until deboarding. See Note 8 — Rights to MSRs . We acquired MSRs on portfolios with a UPB of $2.9 billion and $4.9 billion during the three months ended March 31, 2020 and 2019, respectively. We sold MSRs on portfolios with a UPB of $17.6 million and $99.4 million during the three months ended March 31, 2020 and 2019, 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. To date, terminations as servicer as a result of a breach of any of these provisions have been minimal. At March 31, 2020 , the S&P Global Ratings, Inc.’s (S&P’s) servicer ratings outlook for PMC is stable. On March 24, 2020, Fitch Ratings, Inc. (Fitch) placed all U.S Residential Mortgage Backed Securities (RMBS) servicer ratings on Outlook Negative, resulting from a rapidly evolving economic and operating environment due to the sudden impact of the COVID-19 virus. Downgrades in servicer ratings could adversely affect our ability to service loans, 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. As a result of our current servicer ratings, termination rights have been triggered in some non-Agency servicing agreements. To date, terminations as servicer as a result of a breach of any of these provisions have been minimal. Servicing Revenue Three Months Ended March 31, 2020 2019 Loan servicing and subservicing fees Servicing $ 55,408 $ 53,345 Subservicing 5,190 6,207 NRZ 119,669 155,847 180,267 215,399 Late charges 14,639 15,439 Custodial accounts (float earnings) 6,141 11,934 Loan collection fees 4,256 4,349 Home Affordable Modification Program (HAMP) fees (1) 408 1,777 Other, net 5,772 7,881 $ 211,483 $ 256,779 (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 unaffiliated banks and are excluded from our unaudited consolidated balance sheets. Float balances amounted to $1.9 billion , $1.7 billion and $1.8 billion at March 31, 2020 , December 31, 2019 and March 31, 2019 , respectively. |
Rights to MSRs
Rights to MSRs | 3 Months Ended |
Mar. 31, 2020 | |
Transfers and Servicing [Abstract] | |
Rights to MSRs | Note 8 — Rights to MSRs Ocwen and PMC 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 in 2012 and 2013, legal title was retained by Ocwen, causing the Rights to MSRs transactions to be accounted for as secured financings. In the case of the PMC 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 agreements, 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 sheets, as well as the full amount of servicing revenue and changes in the fair value of the MSRs and related financing liability in our unaudited consolidated statements of operations. Changes in fair value of the Rights to MSRs are recognized in MSR valuation adjustments, net in the unaudited consolidated statements of operations. Changes in fair value of the MSR related financing liability are reported in Pledged MSR liability expense. The following tables present selected assets and liabilities recorded on our unaudited consolidated balance sheets as well as the impacts to our unaudited consolidated statements of operations in connection with our NRZ agreements. Balance Sheets March 31, 2020 December 31, 2019 MSRs, at fair value (1) $ 591,705 $ 915,148 Due from NRZ (Receivables) Sales and transfers of MSRs (2) $ 22,631 $ 24,167 Subservicing fees and reimbursable expenses 1,601 9,197 $ 24,232 $ 33,364 Due to NRZ (Other liabilities) $ 98,555 $ 63,596 Financing liability - MSRs pledged, at fair value Original Rights to MSRs Agreements $ 591,705 $ 603,046 2017 Agreements and New RMSR Agreements (3) 9,979 35,445 PMC MSR Agreements (1) — 312,102 $ 601,684 $ 950,593 (1) On February 20, 2020, we received a notice of termination from NRZ with respect to the PMC MSR Agreements. While the MSRs and the Rights to MSRs associated with these loans are derecognized from our balance sheet at March 31, 2020, we continue to service these loans until deboarding, and account for them as a subservicing relationship. (2) Balance represents the holdback of proceeds from PMC MSR sales and transfers to address indemnification claims and mortgage loan document deficiencies. These sales were executed by PMC prior to the acquisition date. (3) $10.0 million of income is expected to be recognized for the quarter ended June 30, 2020 as a reduction in the financing liability based on the remaining term of the original agreements. Three Months Ended March 31, 2020 2019 Statements of Operations Servicing fees collected on behalf of NRZ (1) $ 119,669 $ 155,847 Less: Subservicing fee retained by Ocwen (1) 29,331 37,407 Net servicing fees remitted to NRZ 90,338 118,440 Less: Reduction (increase) in financing liability Changes in fair value: Original Rights to MSRs Agreements (9,120 ) 121 2017 Agreements and New RMSR Agreements (903 ) (6,980 ) PMC MSR Agreements (1) 40,720 33,096 30,697 26,237 Runoff and settlement: Original Rights to MSRs Agreements 17,793 9,035 2017 Agreements and New RMSR Agreements 25,142 23,320 PMC MSR Agreements (1) 7,492 17,774 50,427 50,129 Other 2,620 (1,882 ) Pledged MSR liability expense $ 6,594 $ 43,956 (1) On February 20, 2020, we received a notice of termination from NRZ with respect to the PMC MSR Agreements. As the MSRs and the Rights to MSRs associated with these loans were derecognized from our consolidated balance sheet on February 20, 2020, we did not report the associated servicing fees collected on behalf of, and remitted to NRZ, or the change in fair value, runoff and settlement of the financing liability subsequent to February 20, 2020. Financing Liability - MSRs Pledged Original Rights to MSRs Agreements 2017 Agreements and New RMSR Agreements PMC MSR Agreements Total Balance at December 31, 2019 $ 603,046 $ 35,445 $ 312,102 $ 950,593 Additions — — — — Receipt of lump-sum cash payments — — — — Sales — — (226 ) (226 ) Changes in fair value: Original Rights to MSRs Agreements 9,120 — — 9,120 2017 Agreements and New RMSR Agreements — 903 — 903 PMC MSR Agreements — — (40,720 ) (40,720 ) Runoff and settlement: Original Rights to MSRs Agreements (17,793 ) — — (17,793 ) 2017 Agreements and New RMSR Agreements — (25,142 ) — (25,142 ) PMC MSR Agreements — — (7,492 ) (7,492 ) Derecognition of Pledged MSR financing liability due to termination of PMC MSR Agreements — — (263,664 ) (263,664 ) Calls (1): Original Rights to MSRs Agreements (2,668 ) — — (2,668 ) 2017 Agreements and New RMSR Agreements — (1,227 ) — (1,227 ) Balance at March 31, 2020 $ 591,705 $ 9,979 $ — $ 601,684 Financing Liability - MSRs Pledged Original Rights to MSRs Agreements 2017 Agreements and New RMSR Agreements PMC MSR Agreements Total Balance at December 31, 2018 $ 436,511 $ 138,854 $ 457,491 $ 1,032,856 Purchases — — 577 577 Changes in fair value: Original Rights to MSRs Agreements (121 ) — — (121 ) 2017 Agreements and New RMSR Agreements — 6,980 — 6,980 PHH MSR Agreements — — (33,096 ) (33,096 ) Runoff and settlement: Original Rights to MSRs Agreements (9,035 ) — — (9,035 ) 2017 Agreements and New RMSR Agreements — (23,320 ) — (23,320 ) PHH MSR Agreements — — (17,774 ) (17,774 ) Calls (1): Original Rights to MSRs Agreements (3,269 ) — — (3,269 ) 2017 Agreements and New RMSR Agreements — (2,582 ) — (2,582 ) Balance at March 31, 2019 $ 424,086 $ 119,932 $ 407,198 $ 951,216 (1) Represents the carrying value of MSRs in connection with call rights exercised by NRZ, for MSRs transferred to NRZ under the 2017 Agreements and New RMSR Agreements, or by Ocwen at NRZ’s direction, for MSRs underlying the Original Rights to MSRs Agreements. Ocwen derecognizes the MSRs and the related financing liability upon collapse of the securitization. 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, a Transfer Agreement and the Subservicing Agreement between Ocwen and New Residential Mortgage LLC (NRM), a subsidiary of NRZ, relating to non-agency loans (the NRM 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 ending July 2022 (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. Under the new agreements, following receipt of the required consents and transfer of the MSRs, Ocwen subservices the mortgage loans underlying the transferred MSRs pursuant to the 2017 Agreements and the August 2018 subservicing agreement with NewRez LLC dba Shellpoint Mortgage Servicing (Shellpoint) described below. Ocwen received lump-sum cash payments of $54.6 million and $279.6 million in September 2017 and January 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. We recognized the cash received as a financing liability that we are accounting for at fair value through the remaining term of the original agreements (April 2020). Changes in fair value are recognized in Pledged MSR liability expense in the unaudited consolidated statements of operations. On August 17, 2018, Ocwen and NRZ entered into certain amendments (i) to the New RMSR Agreements to include Shellpoint, a subsidiary of NRZ, as a party to which legal title to the MSRs could be transferred after related consents are received, (ii) to add a Subservicing Agreement between Ocwen and Shellpoint relating to non-agency loans (the Shellpoint Subservicing Agreement), (iii) to add an Agency Subservicing Agreement between Ocwen and NRM relating to agency loans (the Agency Subservicing Agreement), and (iv) to conform the New RMSR Agreements and the NRM Subservicing Agreement to certain of the terms of the Shellpoint Subservicing Agreement and the Agency Subservicing Agreement. At any time during the Initial Term, NRZ may terminate the Subservicing Agreements and Servicing Addendum for convenience, subject to Ocwen’s right to receive a termination fee and 180 days’ notice. The termination fee is calculated as specified in the Subservicing Agreements and Servicing Addendum, and is a discounted percentage of the expected revenues that would be owed to Ocwen over the remaining contract term based on certain portfolio run-off assumptions. Following the Initial Term, NRZ may extend the term of the Subservicing Agreements and Servicing Addendum for additional three -month periods by providing proper notice. Following the Initial Term, the Subservicing Agreements and Servicing Addendum can be cancelled by Ocwen on an annual basis. NRZ and Ocwen have the ability to terminate the Subservicing Agreements and Servicing Addendum for cause if certain specified conditions occur. The terminations must be terminations in whole (i.e., cover all the loans under the relevant Subservicing Agreement or Servicing Addendum) and not in part, except for limited circumstances specified in the agreements. In addition, if NRZ terminates any of the NRM or Shellpoint Subservicing Agreements or the Servicing Addendum for cause, the other agreements will also terminate automatically. Under the terms of the Subservicing Agreements and Servicing Addendum, in addition to a base servicing fee, Ocwen receives certain ancillary fees, primarily late fees, loan modification fees and Speedpay ® fees. We may also receive certain incentive fees or pay penalties tied to various contractual performance metrics. NRZ receives all float earnings and deferred servicing fees related to delinquent borrower payments, as well as being entitled to receive certain REO related income including REO referral commissions. As of March 31, 2020 , the UPB of MSRs subject to the Servicing Agreements and the New RMSR Agreements is $73.6 billion , including $17.9 billion for which title has not transferred to NRZ. We and NRZ are currently discussing various alternative arrangements for the servicing of these MSRs. As the third-party consents required for title to the MSRs to transfer were not obtained by May 31, 2019, the New RMSR Agreements set forth a process under which NRZ’s $17.9 billion Rights to MSRs may (i) be acquired by Ocwen at a price determined in accordance with the terms of the New RMSR Agreements, at the option of Ocwen, or (ii) be sold, together with Ocwen’s title to those MSRs, to a third party in accordance with the terms of the New RMSR Agreements, subject to an additional Ocwen option to acquire at a price based on the winning third-party bid rather than selling to the third party. If the Rights to MSRs are not transferred pursuant to these alternatives, then the Rights to MSRs will remain subject to the New RMSR Agreements. In addition, as noted above, during the Initial Term, NRZ has the right to terminate the $17.9 billion New RMSR Agreements for convenience, in whole but not in part, subject to payment of a termination fee and 180 days’ notice. If NRZ exercises this termination right, NRZ has the option of seeking (i) the transfer of the MSRs through a sale to a third party of its Rights to MSRs (together with a transfer of Ocwen’s title to those MSRs) or (ii) a substitute RMSR arrangement that substantially replicates the Rights to MSRs structure (a Substitute RMSR Arrangement) under which we would transfer title to the MSRs to a successor servicer and NRZ would continue to own the economic rights and obligations related to the MSRs. In the case of option (i), we have a purchase option as specified in the New RMSR Agreements. If NRZ is not able to sell the Rights to MSRs or establish a Substitute RMSR Arrangement with another servicer, NRZ has the right to revoke its termination notice and re-instate the Servicing Addendum or to establish a subservicing arrangement whereby the MSRs remaining subject to the New RMSR Agreements would be transferred to up to three subservicers who would subservice under Ocwen’s oversight. If such a subservicing arrangement were established, Ocwen would receive an oversight fee and reimbursement of expenses. We may also agree on alternative arrangements that are not contemplated under our existing agreements or that are variations of those contemplated under our existing agreements. PMC Transactions On December 28, 2016, PMC entered into an agreement to sell substantially all of its MSRs, and the related servicing advances, to NRM (the 2016 PMC Sale Agreement). In connection with this agreement, on December 28, 2016, PMC also entered into a subservicing agreement with NRZ which was subsequently amended and restated as of March 29, 2019 (together with the 2016 PMC Sale Agreement, the PMC MSR Agreements). The PMC subservicing agreement has an initial term of three years from the initial transaction date of June 16, 2017, subject to certain transfer and termination provisions. The PMC subservicing agreement generates revenue based on a schedule of fees per loan per month that includes revenue adjustments for delinquent loans to cover the incremental cost associated with servicing such loans. As of March 31, 2020 , Ocwen serviced 269,403 loans (with a UPB of $33.8 billion ) under this arrangement, excluding loans added by NRZ in 2019, and recorded servicing fee revenues for the three months ended March 31, 2020 of $3.9 million . In addition to the $33.8 billion in UPB of loans in the PMC subservicing agreement for which the MSR sale transaction did not achieve sale accounting treatment, PMC is also subservicing loans with approximately $6.2 billion in UPB at March 31, 2020 that NRZ added to the PMC subservicing agreement after NRZ acquired the MSRs from an unrelated party during 2019. Consistent with a subservicing relationship, no MSR or pledged MSR liability is recorded on our consolidated balance sheets for the $6.2 billion loan UPB. Subject to the payment of the applicable deboarding fee and proper notice, NRZ has the right to terminate an amount not to exceed 25% of the underlying mortgage loans (not including loans added by NRZ in 2019) being subserviced during the period from June 2019 through the end of the initial term in June 2020. The PMC subservicing agreement automatically renews for successive one -year terms unless either party provides notice of renewal in accordance with the PMC subservicing agreement, which is 180 days’ notice in the case of NRZ and nine months’ notice in the case of PMC. NRZ and PMC each also has the right to terminate the PMC subservicing agreement after the initial term without cause subject to 180 days’ notice in the case of NRZ and nine months’ notice in the case of PMC and, if NRZ elects to terminate, NRZ’s payment of deboarding fees. NRZ and PMC each has the ability to terminate the subservicing agreement for cause if certain specified conditions occur. On February 20, 2020, we received a notice of termination from NRZ with respect to the PMC MSR Agreements, which accounted for $40.0 billion loan UPB. The notice states that the effective date of termination is June 19, 2020 with respect to 25% of the Initial Mortgage Loans under the agreement and August 18, 2020 for the remainder of the loans under the agreement. The loans that were added by NRZ under the PMC subservicing agreement in 2019 and amounted to approximately $6.6 billion in UPB are subject to the termination with the stated effective date of August 18, 2020. In connection with the termination, we are entitled to loan deboarding fees from NRZ. This termination is for convenience and not for cause. As the sale accounting criteria were met upon the notice of termination, the MSRs and the Rights to MSRs associated with the $40.0 billion loan UPB were derecognized from our balance sheet on February 20, 2020 without any gain or loss on derecognition. We continue to service these loans until deboarding, and account for them as a subservicing relationship. Accordingly, we recognized subservicing fees associated with the subservicing agreement subsequent to February 20, 2020 and did not report any servicing fees collected on behalf of, and remitted to NRZ, any change in fair value, runoff and settlement in financing liability thereafter. |
Receivables
Receivables | 3 Months Ended |
Mar. 31, 2020 | |
Receivables [Abstract] | |
Receivables | Note 9 – Receivables March 31, 2020 December 31, 2019 Servicing-related receivables: Government-insured loan claims $ 120,410 $ 122,557 Due from NRZ: Sales and transfers of MSRs 22,631 24,167 Subservicing fees and reimbursable expenses 1,601 9,197 Reimbursable expenses 9,325 13,052 Due from custodial accounts 11,306 27,175 Other 3,665 4,970 168,938 201,118 Income taxes receivable (1) 102,566 37,888 Other receivables 23,064 20,086 294,568 259,092 Allowance for losses (59,263 ) (57,872 ) $ 235,305 $ 201,220 (1) See Note 16 – Income Taxes At March 31, 2020 and December 31, 2019 , 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 and not subsequently sold to third-party investors (government-insured loan claims) was $58.1 million and $56.9 million at March 31, 2020 and December 31, 2019 , respectively. The government-insured loan claims are guaranteed by the U.S. government. Allowance for Losses - Government-Insured Loan Claims Three Months Ended March 31, 2020 2019 Beginning balance (1) $ 56,868 $ 52,497 Provision 5,072 7,247 Charge-offs and other, net (3,837 ) (8,464 ) Ending balance $ 58,103 $ 51,280 (1) The adoption of ASU 2016-13 did not result in any significant change to the allowance for losses related to receivables as of January 1, 2020. |
Other Assets
Other Assets | 3 Months Ended |
Mar. 31, 2020 | |
Other Assets [Abstract] | |
Other Assets | Note 10 – Other Assets March 31, 2020 December 31, 2019 Contingent loan repurchase asset $ 393,395 $ 492,900 Prepaid expenses 35,514 21,996 Prepaid representation, warranty and indemnification claims - Agency MSR sale 15,173 15,173 Derivatives, at fair value 15,830 6,007 REO 7,907 8,556 Prepaid lender fees, net 6,464 8,647 Security deposits 2,150 2,163 Mortgage backed securities, at fair value 1,670 2,075 Deferred tax asset, net 1,647 2,169 Interest-earning time deposits 371 390 Other 4,004 3,164 $ 484,125 $ 563,240 |
Borrowings
Borrowings | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Borrowings | Note 11 – Borrowings Advance Match Funded Liabilities March 31, 2020 December 31, 2019 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 2015-VF5 (4) Dec. 2050 Dec. 2020 $ 59,021 3.05 % $ 140,979 3.36 % $ 190,555 Advance Receivables Backed Notes, Series 2019-T1 (5) Aug. 2050 Aug. 2020 — 2.62 185,000 2.62 185,000 Advance Receivables Backed Notes, Series 2019-T2 (5) Aug. 2051 Aug. 2021 — 2.53 285,000 2.53 285,000 Total Ocwen Master Advance Receivables Trust (OMART) 59,021 2.68 610,979 2.79 660,555 Ocwen Freddie Advance Funding (OFAF) - Advance Receivables Backed Notes, Series 2015-VF1 (6) Jun. 2050 Jun. 2020 45,028 3.26 14,972 3.53 18,554 $ 104,049 2.69 % $ 625,951 2.81 % $ 679,109 (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 ratably to each outstanding amortizing note to reduce the balance and as such the collection of advances allocated to the amortizing note may not be used to fund new advances. (2) Borrowing capacity under the OMART and OFAF facilities is available to us provided that we have sufficient eligible collateral to pledge. At March 31, 2020 , none of the available borrowing capacity of our advance financing notes could be used based on the amount of eligible collateral. (3) 1ML was 0.99% and 1.76% at March 31, 2020 and December 31, 2019 , respectively. (4) The total borrowing capacity of the Series 2015-VF5 variable notes is $200.0 million , with interest computed based on the lender’s cost of funds plus a margin. At March 31, 2020 , the weighted average interest margin was 136 bps. (5) On August 14, 2019, we issued two fixed-rate term notes of $185.0 million (Series 2019 T-1) and $285.0 million (Series 2019-T2) with amortization dates of August 17, 2020 and August 16, 2021, respectively, for a total combined borrowing capacity of $470.0 million . The weighted average rate of the notes is 2.57% with rates on the individual classes of notes ranging from 2.42% to 4.44% . (6) The borrowing capacity of this facility is $60.0 million with interest computed based on the lender’s cost of funds plus a margin. At March 31, 2020 , the weighted average interest margin was 157 bps. 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. As of March 31, 2020 , we were the servicer of Rights to MSRs sold to NRZ pertaining to $17.9 billion in UPB, which excludes those Rights to MSRs where legal title has transferred to NRZ. NRZ’s associated outstanding servicing advances were approximately $668.5 million and $704.2 million as of March 31, 2020 and December 31, 2019 , respectively. We are dependent upon NRZ for funding the servicing advance obligations for Rights to MSRs where we are the servicer. 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. 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. If NRZ were unable to meet its advance funding obligations, we would remain obligated to meet any future advance financing obligations with respect to the loans underlying these Rights to MSRs for which legal title has not transferred, which could materially and adversely affect our liquidity, financial condition, results of operations and servicing business. See Note 8 — Rights to MSRs for additional information. In addition, although we are not an obligor or guarantor under NRZ’s advance financing facilities, we are a party to certain of the facility documents as the servicer of the underlying loans on which advances are being financed. As the servicer, we make certain representations, warranties and covenants, including representations and warranties in connection with advances subsequently sold to, or reimbursed by, NRZ. Financing Liabilities Outstanding Balance Borrowing Type Collateral Interest Rate Maturity March 31, 2020 December 31, 2019 HMBS-Related Borrowings, at fair value (1) Loans held for investment 1ML + 260 bps (1) $ 6,323,091 $ 6,063,435 Other Financing Liabilities MSRs pledged (Rights to MSRs), at fair value: Original Rights to MSRs Agreements MSRs (2) (2) 591,705 603,046 2017 Agreements and New RMSR Agreements MSRs (3) (3) 9,979 35,445 PMC MSR Agreements MSRs (4) (4) — 312,102 601,684 950,593 Financing liability - Owed to securitization investors, at fair value: IndyMac Mortgage Loan Trust (INDX 2004-AR11) (5) Loans held for investment (5) (5) 9,544 9,794 Residential Asset Securitization Trust 2003-A11 (RAST 2003-A11) (5) Loans held for investment (5) (5) 11,821 12,208 21,365 22,002 Total Other Financing Liabilities 623,049 972,595 $ 6,946,140 $ 7,036,030 (1) Represents amounts due to the holders of beneficial interests in Ginnie Mae guaranteed HMBS which did not qualify for sale accounting treatment of HECM loans. Under this accounting treatment, the HECM loans securitized with Ginnie Mae remain on our consolidated balance sheet and the proceeds from the sale are recognized as a secured liability. The beneficial interests have no maturity dates, and the borrowings mature as the related loans are repaid. We elected to record the HMBS-related borrowings at fair value consistent with the related HECM loans. Changes in fair value are reported within Reverse mortgage revenue, net. (2) This pledged MSR liability is recognized due to the accounting treatment of MSR sale transactions with NRZ which did not qualify as sales for accounting purposes. 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. This financing liability has no contractual maturity or repayment schedule. We elected to record the liability at fair value consistent with the related MSRs. 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. Changes in fair value are reported within Pledged MSR liability expense, and are offset by corresponding changes in fair value of the MSR pledged to NRZ within MSR valuation adjustments, net. (3) This financing liability arose in connection with lump sum payments of $54.6 million 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. We recognized the cash received as a financing liability that we are accounting for at fair value through the remaining term of the original agreements (April 2020). 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, with changes in fair value recognized in Pledged MSR liability expense in the unaudited consolidated statements of operations. (4) Represented a liability for sales of MSRs to NRZ which did not qualify for sale accounting treatment and were 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 remained on the consolidated balance sheet and the proceeds from the sale were recognized as a secured liability. We elected to record the liability at fair value consistent with the related MSRs. As disclosed in Note 8 — Rights to MSRs , the liability was derecognized upon termination of the agreement by NRZ on February 20, 2020. (5) 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 3.38% and 3.85% at March 31, 2020 . 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. Other Secured Borrowings Outstanding Balance Borrowing Type Collateral Interest Rate Termination / Maturity Available Borrowing Capacity (1) March 31, 2020 December 31, 2019 SSTL (2) (2) 1-Month Euro-dollar rate + 600 bps with a Eurodollar floor of 100 bps (2) May 2022 $ — $ 200,000 $ 326,066 Other Secured Borrowings Outstanding Balance Borrowing Type Collateral Interest Rate Termination / Maturity Available Borrowing Capacity (1) March 31, 2020 December 31, 2019 Mortgage loan warehouse facilities Master repurchase agreement (3) Loans held for sale (LHFS) 1ML + 195 - 300 bps Sep. 2020 — 110,607 91,573 Mortgage warehouse agreement (4) LHFS (reverse mortgages) Greater of 1ML + 250 bps or 350 bps; Libor Floor 0% Aug. 2020 — — 72,443 Master repurchase agreement (5) LHFS (forward and reverse mortgages) 1ML + 225 bps forward; 1ML + 275 bps reverse Dec. 2020 119,637 80,363 139,227 Master repurchase agreement (6) LHFS (reverse mortgages) Prime + 0.0% (4.0% floor) Jan. 2020 — — 898 Master repurchase agreement (7) N/A 1ML + 170 bps; Libor Floor 35 bps N/A — — — Participation agreement (8) LHFS N/A May 2020 — 29,102 17,304 Mortgage warehouse agreement (9) LHFS 1ML + 350 bps; Libor Floor 175 bps Dec. 2020 36,583 13,417 10,780 Mortgage warehouse agreement (10) LHFS (reverse mortgages) 1ML + 250 bps; 1ML floor of 350 bps Aug. 2020 — 55,633 — 156,220 289,122 332,225 Agency MSR financing facility (11) MSRs 1ML + 300bps Jun. 2020 185,710 114,290 147,706 Ginnie Mae MSR financing facility (12) MSRs 1ML + 395 bps Nov. 2021 — 61,082 72,320 Ocwen Excess Spread-Collateralized Notes, Series 2019-PLS1 (13) MSRs 5.07% Nov. 2024 — 86,911 94,395 Secured Notes, Ocwen Asset Servicing Income Series, Series 2014-1 (14) MSRs (14) Feb. 2028 — 55,596 57,594 185,710 317,879 372,015 $ 341,930 807,001 1,030,306 Unamortized debt issuance costs - SSTL and PLS Notes (8,808 ) (3,381 ) Discount - SSTL (578 ) (1,134 ) $ 797,615 $ 1,025,791 Weighted average interest rate 4.09 % 4.74 % (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, none of the available borrowing capacity could be used at March 31, 2020 based on the amount of eligible collateral that could be pledged. (2) On January 27, 2020, we entered into a Joinder and Second Amendment Agreement (the Amendment) which amends the Amended and Restated SSTL Facility Agreement dated as of December 5, 2016, as amended by a Joinder and Amendment Agreement dated as of March 18, 2019. The Amendment provided for a net prepayment of $126.1 million of the outstanding balance at December 31, 2019 such that the facility has a maximum outstanding balance of $200.0 million . The Amendment also (i) extended the maturity of the remaining outstanding loans under the SSTL to May 15, 2022, (ii) provides that the loans under the SSTL bear interest at the one-month Eurodollar Rate or the Base Rate (as defined in the SSTL), at our option, plus a margin of 6.00% per annum for Eurodollar Rate loans or 5.00% per annum for Base Rate loans (increasing to a margin of 6.50% per annum for Eurodollar Rate loans or 5.50% per annum for Base Rate loans on January 27, 2021), (iii) provides for a prepayment premium of 2.00% until January 27, 2022 and (iv) requires quarterly principal payments of $5.0 million . (3) The maximum borrowing under this agreement is $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 $1.0 million on a committed basis. 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 March 12, 2020, we voluntarily reduced the maximum borrowing capacity from $100.0 million to $1.0 million in connection with Liberty’s transfer of substantially all of its assets, liabilities, contracts and employees to PMC effective March 15, 2020. (5) The maximum borrowing under this agreement is $250.0 million , of which $200.0 million is available on a committed basis and the remainder is available on an uncommitted basis. 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, t he lender provides financing for up to $50.0 million on an uncommitted basis. This facility expired on January 22, 2020 and was not renewed. (7) 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. (8) Under this master participation agreement, the lender will provide $300.0 million of borrowing capacity to PMC on an uncommitted basis. The participation agreement allows the lender to acquire a 100% beneficial interest in the underlying mortgage loans. The transaction does not qualify for sale accounting treatment and is accounted for as a secured borrowing. The lender earns the stated interest rate of the underlying mortgage loans while the loans are financed under the participation agreement. On March 26, 2020, we renewed this facility through May 3, 2020, and subsequently extended for an additional 30 days until June 3, 2020 for $150.0 million . (9) Under this agreement, the lender provides financing for up to $50.0 million on a committed basis. The lender earns the stated interest rate of 1ML plus a margin of 350 bps. (10) On March 12, 2020, PMC entered into a mortgage loan warehouse agreement to fund reverse mortgage loan draws by borrowers subsequent to origination. Under this agreement, t he lender provides financing for up to $100.0 million on an uncommitted basis and the lender earns the stated interest rate of 1ML plus a margin of 250 bps. (11) Financing facility entered into by PMC that is secured by certain Fannie Mae and Freddie Mac MSRs. In connection with this facility, PMC entered into repurchase agreements pursuant to which PMC sold trust certificates representing certain indirect economic interests in the MSRs and agreed to repurchase such trust certificates at a future date at the repurchase price set forth in the repurchase agreements. PMC’s obligations under this facility are secured by a lien on the related MSRs. Ocwen guarantees the obligations of PMC under this facility. The maximum amount which we may borrow pursuant to the repurchase agreements is $300.0 million on a committed basis. The lender earns the stated interest rate of 1ML plus a margin of 300 bps. See Note 3 – Securitizations and Variable Interest Entities for additional information. We are subject to daily margining requirements under the terms of our MSR financing facilities. Declines in fair value of our MSRs due to declines in market interest rates, assumption updates or other factors require that we provide additional collateral to our lenders under these facilities. (12) Financing facility entered into by PMC that is secured by certain Ginnie Mae MSRs. In connection with the facility, PMC entered into a repurchase agreement pursuant to which PMC has sold a participation certificate representing certain economic interests in the Ginnie Mae MSRs and has agreed to repurchase such participation certificate at a future date at the repurchase price set forth in the repurchase agreement. PMC’s obligations under the facility are secured by a lien on the related Ginnie Mae MSRs. Ocwen guarantees the obligations of PMC under the facility. The maximum amount which we may borrow pursuant to the facility is $100.0 million on an uncommitted basis. The lender earns the stated interest rate of 1ML plus a margin of 395 bps. See (11) above regarding daily margining requirements. (13) PMC issued the PLS Notes secured by certain of PMC’s MSRs (PLS MSRs) pursuant to a credit agreement. PLS Issuer’s obligations under the facility are secured by a lien on the related PLS MSRs. Ocwen guarantees the obligations of PLS Issuer under the facility. The Class A PLS Notes issued pursuant to the credit agreement have an initial principal amount of $100.0 million and amortize in accordance with a pre-determined schedule subject to modification under certain events. The notes have a stated coupon rate of 5.07% . See Note 3 – Securitizations and Variable Interest Entities for additional information. See (11) above regarding daily margining requirements. (14) 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. Senior Notes Interest Rate Maturity Outstanding Balance March 31, 2020 December 31, 2019 Senior unsecured notes: PHH (1) 6.375% Aug. 2021 $ 21,543 $ 21,543 21,543 21,543 Senior secured notes 8.375% Nov. 2022 291,509 291,509 313,052 313,052 Unamortized debt issuance costs (1,344 ) (1,470 ) Fair value adjustments (1) (418 ) (497 ) $ 311,290 $ 311,085 (1) 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 purchase accounting 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. At any time, we may redeem all or a part of the 8.375% 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. We may redeem all or a part of these 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 2019 104.188% 2020 102.094% 2021 and thereafter 100.000% Upon a change of control (as defined in the Indenture), we are required to make an offer to the holders of the 8.375% Senior secured notes to repurchase all or a portion of each holder’s notes at a purchase price equal to 101.0% of the principal amount of the notes purchased plus accrued and unpaid interest to the date of purchase. Credit Ratings Credit ratings are intended to be an indicator of the creditworthiness of a company’s debt obligation. At March 31, 2020 , the S&P issuer credit rating for Ocwen was “B-”. On July 3, 2019, S&P assigned a B- issuer credit rating with Negative outlook to PMC. On April 13, 2020, S&P placed Ocwen’s ratings outlook on CreditWatch with negative implications due to the uncertain economic impact of COVID-19 on liquidity. 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 forms of 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 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 (i.e., the ratio of total outstanding loans under the SSTL to certain collateral and other assets as defined under the SSTL), as of the last date of any fiscal quarter; and • specified levels of tangible net worth and liquidity at the consolidated Ocwen level. Certain new financial covenants were added as part of the amendment and extension of our SSTL which closed on January 27, 2020. These include i) maintain a minimum unencumbered asset coverage ratio (i.e., the ratio of unrestricted cash and certain first priority perfected collateral to total outstanding loans under the SSTL) as of the last day of any fiscal quarter of 200% increasing to 225% after December 31, 2020 and ii) maintain minimum unrestricted cash of $125.0 million as of the last day of each fiscal quarter. As of March 31, 2020 , the most restrictive consolidated tangible net worth requirements contained in our debt agreements were for a minimum of $200.0 million in consolidated tangible net worth, as defined, under certain of our advance match funded debt, MSR financing facilities and mortgage warehouse agreements. The most restrictive liquidity requirements were for a minimum of $100.0 million in consolidated liquidity, as defined, under certain of our advance match funded debt and mortgage warehouse 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 and investment activities or raise certain types of 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 we were in compliance with all of the qualitative and quantitative covenants in our debt agreements as of the date of these unaudited consolidated 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 March 31, 2020 : Collateral for Secured Borrowings Total Assets Advance Match Funded Liabilities Financing Liabilities Mortgage Loan Warehouse / MSR Facilities Sales and Other Commitments (1) Other (2) Cash $ 263,555 $ — $ — $ — $ — $ 263,555 Restricted cash 53,177 10,838 — 5,031 37,308 — MSRs (3) 1,050,228 — 591,705 459,027 — 513 Advances, net 1,024,807 751,020 — — — 273,787 Loans held for sale 246,015 — — 205,080 — 40,935 Loans held for investment 6,591,382 — 6,461,371 97,273 — 32,738 Receivables, net 235,305 — — 32,560 — 202,745 Premises and equipment, net 37,430 — — — — 37,430 Other assets 484,125 — — 5,204 410,718 68,203 Total assets $ 9,986,024 $ 761,858 $ 7,053,076 $ 804,175 $ 448,026 $ 919,906 (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 EBO 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, 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, 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. Assets 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. (3) MSRs pledged as collateral for secured borrowings includes MSRs pledged to NRZ in connection with the Rights to MSRs transactions which are accounted for as secured financings and MSRs securing the financing facilities. Certain MSR cohorts with a negative fair value of $1.0 million that would be presented as Other are excluded from the eligible collateral of the facilities and are comprised of $23.3 million of negative fair value related to RMBS and $22.1 million of positive fair value related to private EBO and PLS MSRs. |
Other Liabilities
Other Liabilities | 3 Months Ended |
Mar. 31, 2020 | |
Other Liabilities Disclosure [Abstract] | |
Other Liabilities | Note 12 – Other Liabilities March 31, 2020 December 31, 2019 Contingent loan repurchase liability $ 393,395 $ 492,900 Due to NRZ - Advance collections and servicing fees 98,555 63,596 Servicing-related obligations 96,994 88,167 Liability for indemnification obligations 48,608 52,785 Other accrued expenses 48,452 67,241 Lease liability 42,863 44,488 Accrued legal fees and settlements 33,305 30,663 Checks held for escheat 32,706 31,959 Liability for uncertain tax positions 16,527 17,197 Accrued interest payable 12,561 5,964 Liability for unfunded pension obligation 13,074 13,383 Liability for mortgage insurance contingency 6,820 6,820 Liability for unfunded India gratuity plan 5,160 5,331 Derivatives, at fair value 2,589 100 Deferred revenue 774 488 Other 22,788 21,091 $ 875,171 $ 942,173 |
Equity (Notes)
Equity (Notes) | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Equity | Note 13 – Equity On February 3, 2020, Ocwen’s Board of Directors authorized a share repurchase program for an aggregate amount of up to $5.0 million of Ocwen’s issued and outstanding shares of common stock. During the three months ended March 31, 2020 , we completed the repurchase of 5,662,257 shares of common stock in the open market under this program at prevailing market prices for a total purchase price of $4.5 million for an average price paid per share of $0.79 . In addition, Ocwen paid $0.1 million in commissions. The repurchased shares were formally retired as of March 31, 2020. Unless we amend the share repurchase program or repurchase the remaining $0.5 million by an earlier date, the share repurchase program will expire on February 3, 2021. No assurances can be given as to the amount of shares, if any, that we may repurchase in any given period. On April 8, 2020, Ocwen was notified by the New York Stock Exchange (the NYSE) that the average per share trading price of its common stock was below the NYSE’s continued listing standard rule relating to minimum average share price. The NYSE generally requires that a company’s common stock trade at a minimum average closing price of $1.00 over a consecutive 30 trading-day period. Companies have six months from receipt of the notice to regain compliance with the NYSE’s price condition. Receipt of the NYSE notification does not conflict with nor cause an event of default under any of Ocwen’s debt agreements. Pursuant to the NYSE’s rules, during the cure period, Ocwen’s common stock will continue to be listed and trade on the NYSE. On April 21, 2020, the NYSE announced that, due to market-wide declines brought about by the extraordinary circumstances of the COVID-19 pandemic, it would toll until July 1, 2020 the running of cure periods for companies not in compliance with the minimum share price standard. As a result, the remainder of Ocwen’s cure period will be tolled until July 1, 2020 and Ocwen must regain compliance with the NYSE’s share price standard by December 17, 2020. The likelihood and nature of any further NYSE relief remain uncertain at this time. On April 15, 2020, the Board of Directors of Ocwen (the Board) approved including a proposal in Ocwen’s proxy statement relating to its Annual Meeting of Shareholders, currently scheduled for May 27, 2020, that would seek advisory approval of an amendment to our Articles of Incorporation to effect a reverse split of all outstanding shares of our common stock at a ratio of any amount between, and including, one-for-five and one-for-25, and reduce the number of authorized shares of our common stock by the same proportion as the ratio of the reverse stock split. The Board intends to take into account the results of the advisory vote as well as changing market conditions and other developments in order to make a determination with respect to the best course of action to pursue in order to regain compliance with the NYSE’s minimum share price requirement. |
Derivative Financial Instrument
Derivative Financial Instruments and Hedging Activities | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments and Hedging Activities | Note 14 – Derivative Financial Instruments and Hedging Activities The following table summarizes derivative activity, including the derivatives used in each of our identified hedging programs. The notional amount of our contracts does not represent our exposure to credit loss. None of the derivatives were designated as a hedge for accounting purposes as of, or during the three months ended March 31, 2020 and 2019 : IRLCs Interest Rate Risk MSR Hedging IRLCs and Loans Held for Sale Borrowings TBA / Forward MBS Trades and Futures (1) Forward Trades Interest Rate Caps Notional balance at March 31, 2020 $ 382,773 $ 740,000 $ 100,000 $ 10,833 Notional balance at December 31, 2019 232,566 1,200,000 60,000 27,083 Maturity April 2020 - June 2020 May 2020 - June 2020 April 2020 - May 2020 May 2020 Fair value of derivative assets (liabilities) at: March 31, 2020 $ 10,478 $ 2,999 $ (235 ) $ — December 31, 2019 4,878 1,121 (92 ) — Gains (losses) on derivatives during the three months ended: Gain on loans held for sale, net MSR valuation adjustments, net Gain on loans held for sale, net Other, net March 31, 2020 $ 5,714 $ 35,291 $ (7,192 ) $ — March 31, 2019 (341 ) $ — (2,270 ) (402 ) (1) The March 31, 2020 balances include $500.0 million notional balance and $0.8 million fair value, of interest rate swap futures (nil at December 31, 2019). The related gain on these interest rate futures for the three months ended March 31, 2020 was $0.8 million . We report derivatives at fair value in Other assets or in Other liabilities on our unaudited consolidated balance sheets. Derivative instruments are generally entered into as economic hedges against changes in the fair value of a recognized asset or liability and are not designated as hedges for accounting purposes. We report the changes in fair value of such derivative instruments in the same line item in the unaudited consolidated statement of operations as the changes in fair value of the related asset or liability. For all other derivative instruments not designated as a hedging instrument, we report changes in fair value in Other, net. 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 (losses) gains were $(0.9) million and $0.2 million , during the three months ended March 31, 2020 and 2019 , respectively, and are reported in Other, net in the unaudited consolidated statements of operations. Interest Rate Risk MSR Hedging MSRs are carried at fair value with changes in fair value being recorded in earnings in the period in which the changes occur. The fair value of MSRs is subject to changes in market interest rates and prepayment speeds, among other factors. Beginning in September 2019, management implemented a hedging strategy to partially offset the changes in fair value of our net MSR portfolio to interest rate changes. We define our net MSR portfolio exposure as follows: • our more interest rate-sensitive Agency MSR portfolio, • less the Agency MSRs subject to our agreements with NRZ (See Note 8 — Rights to MSRs ), • less the asset value for securitized HECM loans, net of the corresponding HMBS-related borrowings, and • less the net value of our held for sale loan portfolio and interest rate lock commitments (pipeline). We determine and monitor daily a hedge coverage based on the duration and interest rate sensitivity measures of our net MSR portfolio exposure, considering market and liquidity conditions. At March 31, 2020 , our hedging strategy provides for a partial coverage of our net MSR portfolio exposure. We use forward trades of MBS or Agency TBAs with different banking counterparties and exchange-traded interest rate swap futures as hedging instruments. These derivative instruments are not designated as accounting hedges. TBAs, or To-Be-Announced securities are actively traded, forward contracts to purchase or sell Agency MBS on a specific future date. Interest rate swap futures are exchange-traded and centrally cleared. We report changes in fair value of these derivative instruments in MSR valuation adjustments, net in our unaudited consolidated statements of operations. The TBAs and interest rate swap futures are subject to margin requirements. Ocwen may be required to post or may be entitled to receive cash collateral with its counterparties, based on daily value changes of the instruments. Changes in market factors, including interest rates, and our credit rating could require us to post additional cash collateral and could have a material adverse impact on our financial condition and liquidity. 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 had previously been economically hedged with freestanding derivatives such as forward contracts. Beginning in September 2019, this exposure is not individually hedged, but rather used as an offset to our MSR exposure and managed as part of our MSR hedging strategy described above. 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 had previously entered into forward MBS trades to provide an economic hedge against those changes in fair value on mortgage loans held for sale. Forward MBS trades were primarily used to fix the forward sales price that would be realized upon the sale of mortgage loans into the secondary market. Beginning in September 2019, this exposure is not individually hedged, but rather used as an offset to our MSR exposure and managed as part of our MSR hedging strategy described above. Advance Match Funded Liabilities When required by our advance financing arrangements, we purchase 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. |
Interest Expense
Interest Expense | 3 Months Ended |
Mar. 31, 2020 | |
Other Income and Expenses [Abstract] | |
Interest Expense | Note 15 – Interest Expense Three Months Ended March 31, 2020 2019 Senior notes $ 6,661 $ 8,512 Advance match funded liabilities 5,665 7,652 Other secured borrowings 15,292 8,947 Other 2,364 1,378 $ 29,982 $ 26,489 |
Income Taxes (Notes)
Income Taxes (Notes) | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 16 – Income Taxes On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law. The CARES Act includes several significant business tax provisions that, among other things, temporarily repealed the taxable income limitation for certain net operating losses (NOL) and allows businesses to carry back NOLs arising in 2018, 2019, and 2020 tax years to the five prior tax years, accelerate refunds of previously generated corporate Alternative Minimum Tax (AMT) credits, and adjusts the business interest expense limitation under section 163(j) from 30% to 50% of Adjusted Taxable Income (ATI) for 2019 and 2020 tax years. Based on information available at this time, we estimate that modifications to the tax rules for the carryback of NOLs and business interest expense limitations will result in U.S. and USVI federal net tax refunds of approximately $62.9 million and $1.9 million , respectively, and as such we have recognized an income tax benefit of $64.8 million in our unaudited consolidated financial statements for the three months ended March 31, 2020. The income tax benefit recognized represents the release of valuation allowances against certain NOL and Section 163(j) deferred tax assets that are now more likely than not to be realizable as a result of certain provisions of the CARES Act as well as permanent income tax benefit related to the carryback of NOLs created in a tax year that was subject to a U.S. federal tax at a 21% rate to a tax year subject to tax at a 35% rate. The determination of the refund potential associated with the NOL carryback provision of the CARES Act is subject to change as we continue to wait upon further guidance from the IRS and analyze additional information necessary to finalize the calculations and maximize the long-term value to Ocwen. As we await further guidance and continue to analyze our options, our determination of the impact of the CARES Act on our 2020 financial statements is preliminary at this time. We recognized income tax expense, exclusive of the impact of the CARES Act, of $2.9 million due to the mix of earnings among different tax jurisdictions with different statutory tax rates. Under our transfer pricing agreements, our operations in India and Philippines are compensated on a cost-plus basis for the services they provide, such that even when we have a consolidated pre-tax loss from continuing operations these foreign operations have taxable income, which is subject to statutory tax rates in these jurisdictions that are significantly higher than the U.S. statutory rate of 21%. |
Basic and Diluted Earnings (Los
Basic and Diluted Earnings (Loss) per Share | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Earnings (Loss) per Share | Note 17 – 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 period. 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 the three months ended March 31, 2020 and 2019 , we have excluded the effect of all 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. Three Months Ended March 31, 2020 2019 Basic and Diluted loss per share Net loss $ (25,489 ) $ (44,494 ) Weighted average shares of common stock — Basic and Diluted 134,858,837 133,918,986 Basic and Diluted loss per share $ (0.19 ) $ (0.33 ) Stock options and common stock awards excluded from the computation of diluted earnings per share Anti-dilutive (1) 3,737,824 3,226,255 Market-based (2) 1,880,954 381,877 (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. |
Business Segment Reporting
Business Segment Reporting | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Business Segment Reporting | Note 18 – 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 or securitization 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. Originations. The Originations segment (previously labeled as Lending) purchases and 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 forward mortgage loans directly with customers (recapture channel) as well as through correspondent lending arrangements since the second quarter of 2019. We originate reverse mortgage loans in all three channels, through our correspondent lending arrangements, broker relationships (wholesale) and retail channels. In addition to our originated MSRs, we acquire MSRs through multiple channels, including flow purchase agreements, the GSE Cash Window program and bulk MSR purchases. The pricing and acquisition decisions are made relative to other originated MSR channels. Accordingly, as part of our internal management reporting we renamed the Lending segment as Originations effective in the first quarter 2020, without any other changes to our operating and reporting segments. 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. Corporate Items and Other also includes severance, retention, facility-related and other expenses incurred in 2019 related to cost our re-engineering plan. 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. We allocate a portion of interest income to each business segment, including interest earned on cash balances. We also allocate certain expenses incurred by corporate support services that are not directly attributable to a segment to each business segment. Beginning in 2020, we updated our methodology to allocate overhead costs incurred by corporate support services to the Servicing and Originations segments which now incorporates the utilization of various measurements primarily based on time studies, personnel volumes and service consumption levels. In 2019, corporate support services costs were primarily allocated based on relative segment size. Support services costs not allocated to the Servicing and Originations segments are retained in the Corporate Items and Other segment along with certain other costs including certain litigation and settlement related expenses or recoveries, costs related to our re-engineering plan, and other costs related to operating as a public company. Interest expense on direct asset-backed financings are recorded in the respective Servicing and Originations segments, while interest expense on the SSTL and Senior Notes is recorded in Corporate Items and Other and is not allocated. Financial information for our segments is as follows: Three Months Ended March 31, 2020 Results of Operations Servicing Originations Corporate Items and Other Business Segments Consolidated Revenue $ 213,555 $ 37,647 $ 2,640 $ 253,842 MSR valuation adjustments, net (174,436 ) 316 — (174,120 ) Operating expenses (1) (2) 80,473 26,958 29,783 137,214 Other (expense) income: Interest income 1,886 2,266 1,243 5,395 Interest expense (13,667 ) (2,861 ) (13,454 ) (29,982 ) Pledged MSR liability expense (6,623 ) — 29 (6,594 ) Other 3,662 (29 ) (2,305 ) 1,328 Other expense, net (14,742 ) (624 ) (14,487 ) (29,853 ) (Loss) income before income taxes $ (56,096 ) $ 10,381 $ (41,630 ) $ (87,345 ) Three Months Ended March 31, 2019 Results of Operations Servicing Originations Corporate Items and Other Business Segments Consolidated Revenue $ 259,274 $ 41,091 $ 3,523 $ 303,888 MSR valuation adjustments, net (108,914 ) (84 ) — (108,998 ) Operating expenses (1) (2) 156,984 21,247 (7,124 ) 171,107 Other (expense) income: Interest income 2,294 1,549 715 4,558 Interest expense (10,742 ) (1,668 ) (14,079 ) (26,489 ) Pledged MSR liability expense (43,956 ) — — (43,956 ) Other 1,525 219 (724 ) 1,020 Other (expense) income, net (50,879 ) 100 (14,088 ) (64,867 ) (Loss) income before income taxes $ (57,503 ) $ 19,860 $ (3,441 ) $ (41,084 ) (1) Compensation and benefits expense in the Corporate Items and Other segment for the three months ended March 31, 2020 and 2019 includes $0.2 million and $18.5 million , respectively, of severance expense attributable to PHH integration-related headcount reductions of primarily U.S.-based employees in 2019, as well as our overall efforts to reduce costs. (2) Included in the Corporate Items and Other segment for the three months ended March 31, 2019, we recorded in Professional services expense a recovery from a service provider of $30.7 million of amounts previously recognized as expense. Total Assets Servicing Originations Corporate Items and Other Business Segments Consolidated March 31, 2020 $ 2,787,250 $ 6,739,576 $ 459,198 $ 9,986,024 December 31, 2019 $ 3,378,515 $ 6,459,367 $ 568,317 $ 10,406,199 March 31, 2019 $ 3,221,779 $ 5,848,830 $ 466,601 $ 9,537,210 Depreciation and Amortization Expense Servicing Originations Corporate Items and Other Business Segments Consolidated Three months ended March 31, 2020 Depreciation expense $ 215 $ 37 $ 3,745 $ 3,997 Amortization of debt discount — — 929 929 Amortization of debt issuance costs 112 — 1,621 1,733 Three months ended March 31, 2019 Depreciation expense $ 806 $ 36 $ 7,709 $ 8,551 Amortization of debt discount — — 351 351 Amortization of debt issuance costs — — 700 700 |
Regulatory Requirements
Regulatory Requirements | 3 Months Ended |
Mar. 31, 2020 | |
Brokers and Dealers [Abstract] | |
Regulatory Requirements | Note 19 – 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. In addition, the rules and regulations applicable to mortgage servicers and lenders, including relevant agency and investor requirements, are changing rapidly in response to the COVID-19 pandemic. 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 have in the past incurred, and may in the future incur, costs to comply with the terms of such resolutions, including staffing costs, legal costs and, in certain cases the costs of audits, reviews and third-party firms to monitor our compliance with such resolutions. We must comply with a large number of federal, state and local consumer protection and other laws and regulations, including, among others, the CARES Act, 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 (FDCPA), 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, and the requirements applicable to our business have been changing especially rapidly in response to the COVID-19 pandemic. 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, financial condition, liquidity and results of operations. As further described below and in Note 21 – 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 made various commitments relating to the process of transferring loans off the REALServicing ® servicing system and onto the Black Knight Financial Services, Inc. (Black Knight) LoanSphere MSP® servicing system (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 March 31, 2020 . PMC 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. We believe we were in compliance with applicable net worth requirements at March 31, 2020 . 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 for licensing and seller/servicer obligations referenced above is based on the UPB of assets serviced by PMC. Under the applicable formula, the required minimum net worth was $222.1 million at March 31, 2020 . PMC’s net worth was $339.0 million at March 31, 2020 . 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, privacy, 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 and PMC. In addition, we were prohibited from boarding any additional loans onto the REALServicing system and we were required to 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 have transferred all loans onto Black Knight MSP and no longer service any loans on the REALServicing system. 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 further 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, Ocwen Loan Servicing, LLC (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 confirmation of our completion of $198.0 million in debt forgiveness for California borrowers by June 30, 2019. We believe that we fulfilled this requirement during the first quarter of 2019. However, our completion of this requirement is subject to testing by the CA DBO’s third-party administrator who must confirm, among other things, that modified loans have remained current for specified time periods. If we are unable to satisfy this requirement 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. |
Commitments
Commitments | 3 Months Ended |
Mar. 31, 2020 | |
Other Commitments [Abstract] | |
Commitments | Note 20 — Commitments Servicer Advance Obligations In the normal course of business as servicer or master servicer, we are required to advance loan principal and interest payments (P&I), property taxes and insurance premiums (T&I) on behalf of the borrower to the investor of the loan, if delinquent or under a forbearance plan. We also advance legal fees, inspection, maintenance, and preservation costs (Corporate advances) on properties that are in default or have been foreclosed. Our obligations to make these advances are governed by servicing agreements or guides, depending on investors or guarantor. For PLS loans, generally, we may stop advancing for P&I once deemed non-recoverable from the net proceeds of the property, although we are generally obligated to continue T&I and Corporate advances until the loan is brought current or until completion of a foreclosure, in which case, we generally recover our advances from the net proceeds of the property or the pool level proceeds, i.e., generally after the completion of the foreclosure. For Ginnie Mae loans, we are required to make advances for the life of the loan without regard to whether we will be able to recover those payments from cure, liquidation proceeds, insurance proceeds, or late payments. We may stop advancing P&I by purchasing loans out of the pool when they are more than 90 days delinquent. To the extent there are excess funds in the custodial accounts, we are permitted to net for our P&I remittance. We are also required to advance both T&I and Corporate advances until cure or liquidation. For GSE loans, we are required to advance P&I until the borrower is 120 days delinquent, and can submit reimbursement claims for certain T&I and Corporate advances after incurring the expense. T&I and Corporate advancing on GSE loans continues until the property is sold. As subservicer, we are required to make P&I, T&I and Corporate advances on behalf of servicers following the servicing agreements or guides. Servicers are generally required to reimburse us within 30 days of our advancing under the terms of the subservicing agreements. NRZ is obligated to fund new servicing advances with respect to the MSRs underlying the Rights to MSRs (RMSR), pursuant to the 2017 Agreements and New RMSR Agreements. NRZ has the responsibility to fund advances for loans where they own the MSR, i.e., are the servicer of record. We are dependent upon NRZ for funding the servicing advance obligations for Rights to MSRs where we are the servicer. 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. 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. See Note 8 — Rights to MSRs and Note 11 – Borrowings for additional information. As of March 31, 2020, the UPB of loans serviced on behalf of NRZ comprised the following: Ocwen servicer of record (MSR title retained by Ocwen) - Ocwen MSR (1) $ 17,910,643 NRZ servicer of record (MSR title transferred to NRZ) - Ocwen MSR (1) 89,811,915 Ocwen subservicer 6,211,564 Total NRZ UPB at March 31, 2020 $ 113,934,122 (1) The MSR sale transactions did not achieve sale accounting treatment. COVID-19 Update On March 27, 2020, the CARES Act was signed into law. The CARES Act allows borrowers with federally backed mortgage loans who are affected by COVID-19 to request temporary loan forbearance. Servicers must provide such forbearance for up to 180 days if requested by the borrower. Borrowers may request additional forbearance period of up to 180 days for FHA and VA guaranteed loans. Although PLS loans are not explicitly covered under the CARES Act, these loans are subject to various requirements and expectations from state Governors, regulators, and Attorneys General to assist borrowers enduring financial hardship due to COVID-19 with forbearance and other requirements. Ocwen provides payment relief to such borrowers in accordance with these requirements and expectations, as well as our servicing agreements. For example, we intend to grant eligible borrowers an initial three months of forbearance and related protection, including suspension of late fees, as well as suspension of foreclosure and eviction activity. For eligible PLS loans that were not significantly delinquent at the time forbearance was applied to the account, Ocwen intends to administer each three-month forbearance period through a series of one-month forbearance plans each of which advances the due date upon completion and move the resulting missed payment to or near the loan’s maturity as a non-interest bearing balance. As such, Ocwen does not expect to be out of pocket cash for P&I and T&I advances for any more than one month for each of these eligible loans with forbearance protection. For Ginnie Mae loans, advance requirements until cure or liquidation are mitigated by the ability to use excess funds in custodial accounts to cover principal and interest advances, though the remaining advances are covered by corporate cash. For loans in forbearance, we will advance P&I while the forbearance plan is active. Reimbursement of such P&I advance is expected after the forbearance period ends, through loan resolution, cure or liquidation. For GSE loans, the Federal Housing Finance Agency (FHFA) announced on April 21, 2020 that the 120-day P&I servicer advance obligation limit for delinquent loans will apply to loans in forbearance. Accordingly, once a servicer has advanced four months of missed payments on a loan, it will have no further obligation to advance scheduled payments as the loan will be moved into an “Actual/Actual” remittance status. Reimbursement of such P&I advance is expected after the forbearance period ends, through loan resolution, cure or liquidation. Mortgage loans with COVID-19 payment forbearance will be treated as they would in the event of a natural disaster event and will remain in the MBS pools. GSE servicers are required to make T&I and Corporate advances until the property is sold but can submit reimbursement claims for certain T&I and Corporate advances after incurring the expense. Due to the adverse economic conditions created by the COVID-19 pandemic, we expect the number of forbearance plans to continue to increase in the near term, consistent with the industry trend, and to continue to correlate with unemployment claims. An increase in loans in forbearance would increase our servicing advance obligations. The below table shows the requests for forbearance plans and the estimated obligation to advance monthly P&I: COVID-19 impacted borrowers and monthly P&I advance estimate As of March 31, 2020 As of April 30, 2020 Number of Forbearance Plans (3) Estimated Monthly P&I Advance Obligation ($ million) Number of Forbearance Plans (3) Estimated Monthly P&I Advance Obligation ($ million) GSE loans 1,400 $ 1.8 6,200 $ 7.9 Ginnie Mae loans 400 0.5 8,400 7.9 PLS loans 3,700 5.8 16,000 24.4 Servicer 5,500 $ 8.1 30,600 $ 40.2 GSE loans 2,300 $ 2.6 9,400 $ 10.5 PLS loans 14,500 14.0 63,200 62.4 NRZ’s responsibility (1) 16,800 $ 16.6 72,600 $ 72.9 Subservicer (2) 3,900 $ 4.5 6,500 $ 8.9 No advance requirements 1,300 — 4,900 — Total 27,500 $ 29.2 114,600 $ 122.0 (1) Ocwen is obligated to advance under the terms of the 2017 Agreements and New RMSR Agreements, and NRZ is obligated to reimburse Ocwen daily for PLS and weekly for Freddie Mac and Fannie Mae servicing advances. See above, Note 8 — Rights to MSRs and Note 11 – Borrowings for additional information, and below description of NRZ Relationship. (2) Ocwen is obligated to advance under the terms of subservicing agreements, and subservicing clients (servicers) are generally obligated to reimburse Ocwen within one day to 30 days for P&I advances. (3) Numbers have been rounded. Unfunded Lending Commitments We have originated floating-rate reverse mortgage loans under which the borrowers have additional borrowing capacity of $1.6 billion at March 31, 2020 . This additional borrowing capacity is available on a scheduled or unscheduled payment basis. We also had short-term commitments to lend $357.2 million and $25.6 million in connection with our forward and reverse mortgage loan IRLCs, respectively, outstanding at March 31, 2020 . 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, with a claim filed with HUD for recoverable remaining principal and advance balances. The recovery timeline for inactive repurchased loans depends on various factors, including foreclosure status at the time of repurchase, state-level foreclosure timelines, and the post-foreclosure REO liquidation timeline. 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: Three Months Ended March 31, 2020 Active Inactive Total Number Amount Number Amount Number Amount Beginning balance 62 $ 10,546 258 $ 25,147 320 $ 35,693 Additions (1) 47 10,337 73 9,519 120 19,856 Recoveries, net (2) (3 ) (5,413 ) (1 ) (3,184 ) (4 ) (8,597 ) Transfers (2 ) (553 ) 2 553 — — Changes in value — 43 — (992 ) — (949 ) Ending balance 104 $ 14,960 332 $ 31,043 436 $ 46,003 (1) Total repurchases during the three months ended March 31, 2020 includes 89 loans totaling $18.1 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 Receivables 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 recorded at fair value. Loans are reclassified to REO in Other assets or Receivables as the loans move through the resolution process and permissible claims are submitted to HUD for reimbursement. Receivables are valued at net realizable value. REO is valued at the estimated value of the underlying property less cost to sell. NRZ Relationship Our Servicing segment has exposure to concentration risk and client retention risk. As of March 31, 2020 , our servicing portfolio included significant client relationships with NRZ which represented 55% and 60% of our servicing portfolio UPB and loan count, respectively. The NRZ servicing portfolio accounts for approximately 72% of all delinquent loans that Ocwen services. The current terms of our agreements with NRZ extend through July 2022 (legacy Ocwen agreements). On February 20, 2020, we received a notice of termination from NRZ with respect to the subservicing agreement between NRZ and PMC, which accounted for 19% of our servicing portfolio UPB at March 31, 2020. Currently, subject to proper notice (generally 180 days’ notice), the payment of termination fees and certain other provisions, NRZ has rights to terminate the legacy Ocwen agreements for convenience. Because of the large percentage of our servicing business that is represented by agreements with NRZ, if NRZ exercised all or a significant portion of these termination rights, we might need to right-size or restructure certain aspects of our servicing business as well as the related corporate support functions. We currently account for the MSR sale agreements with NRZ as secured financings as the transactions did not achieve sale accounting treatment, except for the PMC agreement since February 2020. Accordingly, our balance sheet reflects a $591.7 million MSR asset pledged to NRZ out of a total $1.1 billion MSRs at fair value at March 31, 2020 , and a corresponding $591.7 million pledged MSR liability at fair value within Other financing liabilities. Similarly, our unaudited consolidated statement of operations reflects $90.3 million net servicing fee collected on behalf of, and remitted to, NRZ out of a total $211.5 million Servicing and subservicing fees for the three months ended March 31, 2020 , and a corresponding $90.3 million expense reported within Pledged MSR liability expense. The net servicing fees collected on behalf of, and remitted to, NRZ did not affect our net earnings. In addition, we recognize amortization income related to lump sum payments we received from NRZ in 2017 and 2018, through April 2020, with an outstanding unamortized balance of $10.0 million at March 31, 2020 . The reporting of MSRs and revenue gross versus net in our financial statements is required until sale accounting criteria are met, upon the earliest of the terms of the agreements or any termination notice. The NRZ agreements affect our net earnings through the recognition of subservicing fees we retain, which amounted to $29.3 million for the three months ended March 31, 2020 , and ancillary income. If NRZ were to exercise its termination rights, our net earnings would be affected by the loss of such subservicing revenue and a decrease in direct operating expenses for servicing the NRZ portfolio. Selected assets and liabilities recorded on our consolidated balance sheets as well as the impacts to our unaudited consolidated statements of operations in connection with our NRZ agreements are disclosed in Note 8 — Rights to MSRs . NRZ is obligated to fund new servicing advances with respect to the MSRs underlying the Rights to MSRs, pursuant to the 2017 Agreements and New RMSR Agreements. We are dependent upon NRZ for funding the servicing advance obligations for Rights to MSRs where we are the servicer. As part of our risk management practices, we closely monitor the counterparty exposure arising from the funding obligations of our servicer clients, including NRZ, to ensure timely advance remittance in accordance with contractual requirements. Refer to the Servicer Advance Obligations above. |
Contingencies
Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Loss Contingency [Abstract] | |
Contingencies | Note 21 – 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. In addition, we may be a party or potential party to threatened or pending legal proceedings brought by commercial counterparties, including claims by parties to whom we have sold MSRs or other assets, parties on whose behalf we service mortgage loans, and parties who provide ancillary services including property preservation and other post-foreclosure related services. 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 FDCPA, the RESPA, the TILA, 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 and mortgage reinsurance 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 FDCPA and similar state laws, (2) certain fees we assess on borrowers are marked up improperly in violation of applicable state and federal law, (3) we breached fiduciary duties we purportedly owe to benefit plans due to the discretion we exercise in servicing certain securitized mortgage loans and (4) certain legacy mortgage reinsurance arrangements violated RESPA. 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, including punitive 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, liquidity 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 $33.3 million at March 31, 2020 . We cannot currently estimate the amount, if any, of reasonably possible losses above amounts that have been recorded at March 31, 2020 . 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 sought statutory damages under the FDCPA, compensatory damages and injunctive relief. We subsequently entered into an agreement in principle to resolve this matter, and in August 2019, the court granted final approval of the class settlement. While we believe we had sound legal and factual defenses, we agreed to this settlement in order to avoid the uncertain outcome of litigation and the additional expense and demands on the time of our senior management that such litigation would involve. Our accrual with respect to this matter is included in the $33.3 million legal and regulatory accrual referenced above. We are also subject to individual lawsuits relating to our FDCPA compliance and putative state law class actions based on state laws similar to the FDCPA. At this time, we cannot estimate the amount, if any, of reasonably possible loss related to these matters. 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 individuals’ 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.) . In October 2017, the court preliminarily approved the settlement and, thereafter, we paid a 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 agreement on a revised settlement. In June 2019, the court entered an order approving the settlement, which provided for the establishment of a settlement fund to be distributed to class members 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 the settlement 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. Ocwen is also involved in a related TCPA class action that involves claims against trustees of RMBS trusts based on vicarious liability for Ocwen’s alleged non-compliance with the TCPA. The trustees have sought indemnification from Ocwen based on the vicarious liability claims. Additional lawsuits have been and may be filed against us in relation to our TCPA compliance. Our accrual with respect to TCPA matters is included in the $33.3 million legal and regulatory accrual referenced above. At this time, Ocwen is unable to predict the outcome of existing lawsuits or any additional lawsuits that may be filed, the possible loss or range of loss, if any, above the amount accrued 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, reputation, financial condition, liquidity and results of operations could be materially and adversely affected. From time to time we are also subject to indemnification claims from contractual parties on whose behalf we service or subservice loans. We are currently involved in a dispute with a former subservicing client relating to alleged violations of our contractual agreements, including that we did not properly submit mortgage insurance and other claims for reimbursement. We are presently engaged in a dispute resolution process relating to these claims. Ocwen is currently unable to predict the outcome of this dispute or estimate the size of any loss which could result from a potential resolution reached through mediation, following litigation or otherwise. 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, reputation, financial condition, liquidity 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. 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, reputation, financial condition, liquidity and results of operations. Regulatory We are subject to a number of ongoing federal and state regulatory examinations, consent orders, inquiries, subpoenas, civil investigative demands, requests for information and other actions. Where we determine that a loss contingency is probable in connection with a regulatory matter and the amount of our loss can be reasonably estimated, we record an accrual for the loss. Where we determine that a loss is not probable but is reasonably possible or where a loss in excess of the amount accrued is reasonably possible, we disclose an estimate of the amount of the loss or range of possible losses for the claim if a reasonable estimate can be made, unless the amount of such reasonably possible loss is not material to our financial position, results of operations or cash flows. It is possible that we will incur losses relating to regulatory matters that materially exceed any accrued amount. Predicting the outcome of any regulatory matter is inherently difficult and we generally cannot predict the eventual outcome of any regulatory matter or the eventual loss, if any, associated with the outcome. 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, Ocwen Mortgage Servicing, Inc. (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 laws prohibiting unfair, deceptive or abusive acts or practices, as well as violations of other 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. In September 2019, the court issued a ruling on our motion to dismiss, granting it in part and denying it in part. The court granted our motion dismissing the entire complaint without prejudice because the court found that the CFPB engaged in impermissible “shotgun pleading,” holding that the CFPB must amend its complaint to specifically allege and distinguish the facts between all claims. The CFPB filed an amended complaint in October 2019, and we filed our answer and affirmative defenses on November 1, 2019. 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. We are taking all reasonable and prudent actions to resolve the CFPB matter, along with the Florida matter discussed below, in the shortest time frame possible that would result in an acceptable financial outcome for our stakeholders. In this regard, we have increased our legal and regulatory accrual related to the CFPB and Florida matters by $4.4 million in the first quarter of 2020. Our accrual with respect to this matter is included in the $33.3 million legal and regulatory accrual referenced above. Trial in the CFPB matter is currently scheduled for October 2020; trial in the Florida matter has not yet been scheduled. The outcome of the matters raised by the CFPB, whether through negotiated settlements, court rulings or otherwise, could potentially involve monetary fines or penalties or additional restrictions on our business and 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 would regain eligibility to acquire residential MSRs on Massachusetts loans (including loans originated by Ocwen) as we met certain thresholds in our transition to a new servicing system. Pursuant to this agreement, all restrictions on Massachusetts MSR acquisitions would be lifted when Ocwen completed the second phase of a three-phase data integrity audit. Having now completed the first and second phases of this audit, Ocwen is no longer bound by any restriction on the volume of MSR acquisitions in Massachusetts. • 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 and shortly thereafter. We have taken substantial steps toward fulfilling our commitments under the agreements described above, including completing the transfer of loans to Black Knight MSP, completing pre-transfer and post-transfer data integrity audits as described above, developing and implementing certain enhancements to our consumer complaint process, engaging a third-party auditor who has issued its final report with respect to the escrow review and ongoing reporting and information sharing. 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. In September 2019, the court issued its ruling on our motion to dismiss, granting it in part and denying it in part. The court granted our motion dismissing the entire complaint without prejudice because the court found that the plaintiffs engaged in impermissible “shotgun pleading,” holding that the plaintiffs must amend their complaint to specifically allege and distinguish the facts between all claims. The plaintiffs filed an amended complaint in November 2019. We filed a partial motion to dismiss the amended complaint in December 2019. On April 22, 2020, the court granted our motion and dismissed Count V of the amended complaint with prejudice holding the plaintiff failed to plead an actionable claim under the Florida Deceptive and Unfair Trade Practices Act. We believe we have factual and legal defenses to the remaining allegations raised in this lawsuit and are vigorously defending ourselves. The outcome of this lawsuit, whether through a negotiated settlement, 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. Our accrual with respect to this matter is included in the $33.3 million litigation and regulatory matters accrual referenced above. We cannot currently estimate the amount, if any, of reasonably possible loss above the amount currently accrued. Our accrual with respect to the administrative and legal actions initiated in April 2017 is included in the $33.3 million litigation and regulatory matters accrual referenced above. We have also incurred, and will continue to incur costs to comply with the terms of the settlements we have entered into, including the costs of conducting an escrow review, Maryland organizational assessments and Massachusetts data integrity audits, and costs relating to the transition to Black Knight MSP. With respect to the escrow review, the third-party auditor has issued its final report, which will require some additional remediation measures in connection with which we will incur costs that we expect will be immaterial to our overall financial condition. In addition, it is possible that legal or other actions could be taken against us with respect to such errors, which could result in additional costs or other adverse impacts. If we fail to comply with the terms of our settlements, additional legal or other 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) and six states relating to a servicing examination from 2013 to 2015. Among other things, the MOU prohibited us from repurchasing stock during the development of a going forward plan and, thereafter, except as permitted by the plan. We submitted a plan in 2016 that contained no stock repurchase restrictions and, therefore, we do not believe we are currently restricted from repurchasing stock. We requested confirmation from the signatories of the MOU that they agree with this interpretation, and received affirmative responses from the MMC and five states, and a response declining to take a legal position from the remaining state. On occasion, we engage with agencies of the federal government on various matters. For example, OLS received a letter from the Department of Justice, Civil Rights Division, notifying OLS that the Department of Justice had initiated a general investigation into OLS’s policies and procedures to determine whether violations of the Servicemembers Civil Relief Act by OLS might exist. The Department of Justice has informed us that it has decided not to take enforcement action related to this matter at this time and has, consequently, closed its investigation. In addition, Ocwen was named as a defendant in a HUD administrative complaint filed by a non-profit organization alleging discrimination in the manner in which the company maintains REO properties in minority communities. In February 2018, this matter was administratively closed, and similar claims were filed in federal court. We believe these claims are without merit and intend to vigorously defend ourselves. In May 2016, Ocwen received a subpoena from the Office of Inspector General of HUD requesting the production of documentation related to HECM loans originated by Liberty. We understand that other lenders in the industry have received similar subpoenas. In April 2017, Ocwen received a subpoena from the Office of Inspector General of HUD requesting the production of documentation related to lender-placed insurance arrangements with a mortgage insurer and the amounts paid for such insurance. We understand that other servicers in the industry have received similar subpoenas. In May 2017, Ocwen received a subpoena from the Office of the Special Inspector General for the Troubled Asset Relief Program requesting documents and information related to Ocwen’s participation from 2009 to the present in the Treasury Department’s Making Home Affordable Program and its HAMP. We have been providing documents and information in response to these subpoenas. In April 2019, PMC received a subpoena from the VA Office of the Inspector General requesting the production of documentation related to the origination and underwriting of loans guaranteed by the Veterans Benefits Administration. We understand that other servicers in the industry have received similar subpoenas. Loan Put-Back and Related Contingencies Our contracts with purchasers of originated loans contain provisions that require indemnification or repurchase of the relat |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 22 – Subsequent Events COVID-19 Update In March 2020, the WHO categorized COVID-19 as a pandemic and the COVID-19 outbreak was declared a national emergency in the U.S. The COVID-19 pandemic is adversely affecting economic conditions, including an increase in unemployment, and is creating significant uncertainty about the duration and magnitude of the downturn in the economy. On March 27, 2020, the CARES Act was signed into law. The CARES Act allows borrowers with federally backed mortgage loans who are affected by COVID-19 to request temporary loan forbearance for up to 180 days. Borrowers may request additional forbearance period of up to 180 days for FHA and VA guaranteed loans. Although PLS loans are not explicitly covered under the CARES Act, these loans are subject to various requirements and expectations from state Governors, regulators, and Attorneys General to assist borrowers enduring financial hardship due to COVID-19 with forbearance and other requirements. Ocwen provides payment relief to such borrowers in accordance with these requirements and expectations, as well as our servicing agreements. For example, we intend to grant eligible borrowers an initial three months of forbearance and related protection, including suspension of late fees, as well as suspension of foreclosure and eviction activity. Due to the adverse economic conditions created by the COVID-19 pandemic, the number of loans under a forbearance plan offered by Ocwen to borrowers has significantly increased since March 31, 2020, and is expected to continue to increase in the near term and to continue to correlate with unemployment claims, consistent with the industry trend. The number of forbearance loans we service increased from approximately 27,500 at March 31, 2020 to 114,600 at April 30, 2020, or from 2.0% to 8.5% of our total serviced portfolio. An increase in loans in forbearance directly increases our servicing advance obligations. Refer to Note 20, Servicing Advance Obligations. Any material increase in forbearance and delinquencies could materially and adversely affect our business, financial condition, liquidity and results of operations. |
Organization, Business Enviro_2
Organization, Business Environment and Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in conformity with the instructions of the Securities and Exchange Commission (SEC) to Form 10-Q and SEC Regulation S-X, Article 10, Rule 10-01 for interim financial statements. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (GAAP) for complete financial statements. In our opinion, the accompanying unaudited consolidated financial statements contain all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation. The results of operations and other data for the three months ended March 31, 2020 are not necessarily indicative of the results that may be expected for any other interim period or for the year ending December 31, 2020 . The unaudited consolidated financial statements presented herein should be read in conjunction with the audited consolidated financial statements and related notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2019 . |
Use of Estimates and Assumptions | Use of Estimates and Assumptions The preparation of financial statements in conformity with GAAP requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Such estimates and assumptions include, but are not limited to, those that relate to fair value measurements, income taxes, the provision for 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. |
Reclassifications | Reclassifications Certain amounts in the unaudited consolidated balance sheet at December 31, 2019 and the unaudited consolidated statement of operations and consolidated statement of cash flows for the three months ended March 31, 2019 have been reclassified to conform to the current period presentation. The reclassifications had no impact on total assets or total liabilities in our unaudited consolidated balance sheets, no impact on net income (loss) or total revenue in our unaudited consolidated statements of operations and no impact on operating, investing and financing cash flows in our unaudited consolidated statements of cash flows. |
Recently Adopted and Issued Accounting Standards | Recently Adopted Accounting Standards Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments (ASU 2016-13 and ASU 2019-04) This ASU requires the measurement and recording of expected lifetime credit losses on loans and other financial instruments measured at amortized cost and replaces the existing incurred loss model for credit losses. The new guidance requires an organization to measure all current expected credit losses (CECL) for financial assets held and certain off-balance sheet credit exposures 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. We adopted this standard on January 1, 2020 by applying the guidance at the adoption date with a cumulative-effect adjustment to the opening balance of retained earnings. We used the modified retrospective method for all financial assets in scope of the standard. Our statements of operations for reporting periods beginning after January 1, 2020 are presented under the new guidance, while prior period amounts continue to be reported in accordance with previously applicable GAAP. As permitted by this standard, we made an irrevocable fair value election for certain financial instruments within the scope of the standard. We elected the fair value option for future draw commitments for HECM loans purchased or originated before January 1, 2019. For the HECM loan future draw commitments, we recorded a $47.0 million cumulative-effect transition gain adjustment (before income taxes) to retained earnings as of January 1, 2020 to recognize the fair value as of that date. We did not record any significant net tax effect related to this adjustment as the increase in the deferred tax liability was offset by a corresponding decrease to the valuation allowance. The transition adjustment related to financial instruments for which we are not electing the fair value option did not result in any significant adjustment to the opening balance of retained earnings. Our measurement of lifetime expected credit losses is based on relevant qualitative and quantitative information about past events, including historical loss experience, current conditions, and reasonable and supportable forecasts that affect collectability. Fair Value Measurement: Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement (ASU 2018-13) This ASU modifies the disclosure requirements for fair value measurements in FASB ASC Topic 820, Fair Value Measurement. The main provisions in this ASU include removal of the following disclosure requirements: 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. Our adoption of this standard on January 1, 2020 did not have a material impact on our unaudited consolidated financial statements. 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. Upon adoption of this standard on January 1, 2020, we elected to apply the amendments in this ASU prospectively to all implementation costs incurred subsequent to that date. Our adoption of this standard did not have a material impact on our unaudited consolidated financial statements. Accounting Standards Issued but Not Yet Adopted Income Taxes: Simplifying the Accounting for Income Taxes (ASU 2019-12) On December 18, 2019, the FASB issued this ASU to ASC Topic 740, Income Taxes, as part as part of its overall simplification initiative to reduce costs and complexity of applying accounting standards while maintaining or improving the usefulness of the information provided to users of financial statements. Amendments include the removal of certain exceptions to the general principles of ASC 740 in such areas as intraperiod tax allocation, year to date losses in interim periods and deferred tax liabilities related to outside basis differences. Amendments also include simplification in other areas such as interim recognition of enactment of tax laws or rate changes and accounting for a franchise tax (or similar tax) that is partially based on income. This standard will be effective for us on January 1, 2021. Early adoption is permitted in any interim or annual period, with any adjustments reflected as of the beginning of the fiscal year of adoption. If an entity chooses to early adopt, it must adopt all changes as a result of the ASU. We are currently evaluating the effect of this standard. |
Organization, Business Enviro_3
Organization, Business Environment and Basis of Presentation - (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Reclassifications of Prior Period Amounts to Confirm with Current Period Presentation [Table Text Block] | We now present Reverse mortgage revenue, net as a separate revenue line item on the face of the unaudited consolidated statements of operations to provide a further breakdown of Other revenue, net and provide greater transparency on the performance associated with our portfolio of HECM loans, net of the HMBS-related borrowings that are both measured at fair value, as follows: Reclassification within the Statement of Operations - Three Months Ended March 31, 2019 Revenue From Gain on loans held for sale, net $ 8,613 From Other revenue, net 24,263 From Servicing and subservicing fees (753 ) To Reverse mortgage revenue, net (New line item) 32,123 Total revenue — |
Cost Re-Engineering Plan (Table
Cost Re-Engineering Plan (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Expenses Incurred To-Date, Including an Estimate of Remaining and Total Plan Costs | The following table provides a summary of plan costs incurred during the three months ended March 31, 2019: Employee-related Other Total Total costs incurred $ 19,163 $ 2,973 $ 22,136 |
Securitizations and Variable _2
Securitizations and Variable Interest Entities (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Transfers and Servicing [Abstract] | |
Schedule of Cash Flows Related to Transfers Accounted for as Sales | The following table presents a summary of cash flows received from and paid to securitization trusts related to transfers of loans accounted for as sales that were outstanding: Three Months Ended March 31, 2020 2019 Proceeds received from securitizations $ 820,001 $ 242,960 Servicing fees collected (1) 12,252 15,918 Purchases of previously transferred assets, net of claims reimbursed (2,607 ) (904 ) $ 829,646 $ 257,974 |
Schedule of Assets That Relate to Continuing Involvement with Transferred Financial Assets with Servicing Rights and Maximum Exposure to Loss Including the Unpaid Principal Balance | The following table presents the carrying amounts of our assets that relate to our continuing involvement with forward loans that we have transferred with servicing rights retained as well as an estimate of our maximum exposure to loss including the UPB of the transferred loans: March 31, 2020 December 31, 2019 Carrying value of assets MSRs, at fair value $ 83,582 $ 109,581 Advances 127,114 141,829 UPB of loans transferred 15,831,062 14,490,984 Maximum exposure to loss $ 16,041,758 $ 14,742,394 |
Schedule of Mortgage Servicing Rights Assets and Liabilities | The table below presents the carrying value and classification of the assets and liabilities of the PLS Notes facility: March 31, 2020 December 31, 2019 MSRs pledged (MSRs, at fair value) $ 141,610 $ 146,215 Debt service account (Restricted cash) 2,941 3,002 Outstanding borrowings (Other secured borrowings, net) 86,911 94,395 Unamortized debt issuance costs (Other secured borrowings, net) (1,196 ) (1,207 ) The table below presents the carrying value and classification of the assets and liabilities of the Agency MSR financing facility: March 31, 2020 December 31, 2019 MSRs pledged (MSRs, at fair value) $ 173,313 $ 245,533 Unamortized debt issuance costs (Other assets) 473 946 Debt service account (Restricted cash) 102 100 Outstanding borrowings (Other secured borrowings, net) 114,290 147,706 As of March 31, 2020, the UPB of loans serviced on behalf of NRZ comprised the following: Ocwen servicer of record (MSR title retained by Ocwen) - Ocwen MSR (1) $ 17,910,643 NRZ servicer of record (MSR title transferred to NRZ) - Ocwen MSR (1) 89,811,915 Ocwen subservicer 6,211,564 Total NRZ UPB at March 31, 2020 $ 113,934,122 |
Schedule of Carrying Value of Assets and Liabilities of Consolidated Mortgage-backed Securitization Trusts | The table below presents the carrying value and classification of the assets and liabilities of two consolidated mortgage-backed securitization trusts included in our unaudited consolidated balance sheets as a result of residual securities we acquired which were issued by the trusts. March 31, 2020 December 31, 2019 Loans held for investment, at fair value - Restricted for securitization investors $ 22,561 $ 23,342 Financing liability - Owed to securitization investors, at fair value 21,365 22,002 |
Fair Value (Tables)
Fair Value (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Assets and Liabilities | The carrying amounts and the estimated fair values of our financial instruments and certain of our nonfinancial assets measured at fair value on a recurring or non-recurring basis or disclosed, but not measured, at fair value are as follows: March 31, 2020 December 31, 2019 Level Carrying Value Fair Value Carrying Value Fair Value Financial assets Loans held for sale Loans held for sale, at fair value (a) (f) 3, 2 $ 203,592 $ 203,592 $ 208,752 $ 208,752 Loans held for sale, at lower of cost or fair value (b) 3 42,423 42,423 66,517 66,517 Total Loans held for sale $ 246,015 $ 246,015 $ 275,269 $ 275,269 Loans held for investment Loans held for investment - Reverse mortgages (a) 3 $ 6,568,821 $ 6,568,821 $ 6,269,596 $ 6,269,596 Loans held for investment - Restricted for securitization investors (a) 3 22,561 22,561 23,342 23,342 Total loans held for investment $ 6,591,382 $ 6,591,382 $ 6,292,938 $ 6,292,938 March 31, 2020 December 31, 2019 Level Carrying Value Fair Value Carrying Value Fair Value Advances, net (c) 3 $ 1,024,807 $ 1,024,807 $ 1,056,523 $ 1,056,523 Receivables, net (c) 3 235,305 235,305 201,220 201,220 Mortgage-backed securities (a) 3 1,670 1,670 2,075 2,075 Corporate bonds (a) 2 211 211 441 441 Financial liabilities: Advance match funded liabilities (c) 3 $ 625,951 $ 631,247 $ 679,109 $ 679,507 Financing liabilities: HMBS-related borrowings (a) 3 $ 6,323,091 $ 6,323,091 $ 6,063,435 $ 6,063,435 Financing liability - MSRs pledged (Rights to MSRs) (a) (e) 3 601,684 601,684 950,593 950,593 Financing liability - Owed to securitization investors (a) 3 21,365 21,365 22,002 22,002 Total Financing liabilities $ 6,946,140 $ 6,946,140 $ 7,036,030 $ 7,036,030 Other secured borrowings: Senior secured term loan (c) (d) 2 $ 191,810 $ 177,546 $ 322,758 $ 324,643 Other (c) 3 605,805 580,569 703,033 686,146 Total Other secured borrowings $ 797,615 $ 758,115 $ 1,025,791 $ 1,010,789 Senior notes: Senior unsecured notes (c) (d) 2 $ 21,125 $ 14,902 $ 21,046 $ 13,821 Senior secured notes (c) (d) 2 290,165 238,379 290,039 256,201 Total Senior notes $ 311,290 $ 253,281 $ 311,085 $ 270,022 Derivative financial instrument assets (liabilities) Interest rate lock commitments (a) (f) 3, 2 $ 10,478 $ 10,478 $ 4,878 $ 4,878 Forward trades - Loans held for sale (a) 1 (235 ) (235 ) (92 ) (92 ) TBA / Forward mortgage-backed securities (MBS) trades and futures - MSR hedging (a) 1 2,999 2,999 1,121 1,121 MSRs (a) (e) 3 $ 1,050,228 $ 1,050,228 $ 1,486,395 $ 1,486,395 (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 11 – Borrowings for additional information . (e) A rollforward of the beginning and ending balances of MSRs and Financing liability - MSRs pledged that we measure at fair value on a recurring basis is provided in Note 7 – Mortgage Servicing and Note 8 — Rights to MSRs , respectively. (f) Level 3 at March 31, 2020 and Level 2 at December 31, 2019. |
Schedule of Reconciliation of Changes in Fair Value of Level 3 Assets and Liabilities | The following tables present a rollforward of the beginning and ending balances 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- tion Investors Financing Liability - Owed to Securit - ization Investors Loans Held for Sale - Fair Value Mortgage-Backed Securities IRLCs Three months ended March 31, 2020 Beginning balance $ 6,269,596 $ (6,063,434 ) $ 23,342 $ (22,002 ) $ — $ 2,075 $ — Cumulative effect of fair value election 47,038 — — — — — Purchases, issuances, sales and settlements Purchases — — — — — — — Issuances 294,932 (312,249 ) — — — — — Sales — — — — — — — Settlements (175,095 ) 172,429 (781 ) 637 — — — Transfers (to) from: Loans held for sale, at fair value (578 ) — — — — — — Other assets (265 ) — — — — — — Receivables, net (129 ) — — — — — — 165,903 (139,820 ) (781 ) 637 — — — Total realized and unrealized gains (losses) Included in earnings: Change in fair value 133,322 (119,837 ) — — — (405 ) — Calls and other — — — — — — — 133,322 (119,837 ) — — — (405 ) — Transfers in and / or out of Level 3 — — — — 25,582 — 10,478 Ending balance $ 6,568,821 $ (6,323,091 ) $ 22,561 $ (21,365 ) $ 25,582 $ 1,670 $ 10,478 Loans Held for Investment - Reverse Mortgages HMBS-Related Borrowings Loans Held for Inv. - Restricted for Securitiza- tion Investors Financing Liability - Owed to Securit - ization Investors Mortgage-Backed Securities Derivatives - Interest Rate Caps Three months ended March 31, 2019 Beginning balance $ 5,472,199 $ (5,380,448 ) $ 26,520 $ (24,815 ) $ 1,502 $ 678 Purchases, issuances, sales and settlements Purchases — — — — — — Issuances 209,264 (210,563 ) — — — — Sales — — — — — — Settlements (104,630 ) 102,389 (283 ) 253 — — Transfers (to) from: Loans held for sale, at fair value (396 ) — — — — — Other assets (119 ) — — — — — Receivables, net (68 ) — — — — — 104,051 (108,174 ) (283 ) 253 — — Total realized and unrealized gains (losses) Included in earnings: Change in fair value 150,667 (126,066 ) — — 284 (402 ) Calls and other — — — — — — 150,667 (126,066 ) — — 284 (402 ) Transfers in and / or out of Level 3 — — — — — — Ending balance $ 5,726,917 $ (5,614,688 ) $ 26,237 $ (24,562 ) $ 1,786 $ 276 |
Schedule of Significant Assumptions used in Valuation | Significant valuation assumptions March 31, 2020 December 31, 2019 Agency Non-Agency Agency Non-Agency Weighted average prepayment speed 17.5 % 12.2 % 11.7 % 12.2 % Weighted average delinquency rate 4.8 % 25.7 % 3.2 % 27.3 % Advance financing cost 5-year swap 5-yr swap plus 2.00% 5-year swap 5-yr swap plus 2.00% 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 9.4 % 11.3 % 9.3 % 11.3 % Weighted average cost to service (in dollars) $ 93 $ 278 $ 85 $ 277 Significant valuation assumptions March 31, December 31, Life in years Range 1.2 to 8.4 2.4 to 7.8 Weighted average 6.5 6.0 Conditional repayment rate Range 8.0% to 24.3% 7.8% to 28.3% Weighted average 13.2 % 14.6 % Discount rate 2.0 % 2.8 % . |
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 as of March 31, 2020 given hypothetical shifts in lifetime prepayments and yield assumptions: Adverse change in fair value 10% 20% Weighted average prepayment speeds $ (52,979 ) $ (100,320 ) Weighted average discount rate (14,339 ) (27,843 ) |
Loans Held for Sale (Tables)
Loans Held for Sale (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Receivables [Abstract] | |
Schedule of Loans Held for Sale Fair Value | Loans Held for Sale - Fair Value Three Months Ended March 31, 2020 2019 Beginning balance $ 208,752 $ 176,525 Originations and purchases (2) 831,474 219,867 Proceeds from sales (805,202 ) (235,895 ) Principal collections (6,833 ) (5,516 ) Transfers from (to): Loans held for investment, at fair value 578 396 Receivables, net (31,302 ) (581 ) REO (Other assets) (768 ) (696 ) Gain on sale of loans 6,418 8,191 Decrease in fair value of loans (1,642 ) (228 ) Other 2,117 (8,923 ) Ending balance (1) (2) (3) $ 203,592 $ 153,140 (1) At March 31, 2020 and 2019 , the balances include $(9.4) million and $(7.8) million , respectively, of fair value adjustments. (2) We elected the fair value option for all newly repurchased loans after December 31, 2019, consistent with our fair value election of originated loans. (3) At March 31, 2020 and 2019 , the balances include $25.6 million and nil , 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. |
Schedule of Loans Held for Sale at Lower Cost or Fair Value, Activity | Loans Held for Sale - Lower of Cost or Fair Value Three Months Ended March 31, 2020 2019 Beginning balance $ 66,517 $ 66,097 Purchases (1) — 84,315 Proceeds from sales (30,492 ) (62,135 ) Principal collections (651 ) (1,776 ) Transfers from (to): Receivables, net 266 (27,411 ) REO (Other assets) — (1,095 ) Gain on sale of loans 1,842 551 Decrease in valuation allowance (138 ) 706 Other 5,079 10,295 Ending balance (1) $ 42,423 $ 69,547 (1) At March 31, 2020 and 2019 , the balances include $29.3 million and $42.7 million , respectively, of loans that we repurchased from Ginnie Mae guaranteed securitizations pursuant to Ginnie Mae servicing guidelines. Loans repurchased after December 31, 2019 are classified as Loans Held for Sale - Fair Value since we elected the fair value option, consistent with our fair value election for originated or purchased loans. Valuation Allowance - Loans Held for Sale at Lower of Cost or Fair Value Three Months Ended March 31, 2020 2019 Beginning balance $ 6,643 $ 11,569 Provision 570 642 Transfer from Liability for indemnification obligations (Other liabilities) 25 67 Sales of loans (457 ) (1,415 ) Ending balance $ 6,781 $ 10,863 |
Schedule of Changes in Allowance For Losses | Valuation Allowance - Loans Held for Sale at Lower of Cost or Fair Value Three Months Ended March 31, 2020 2019 Beginning balance $ 6,643 $ 11,569 Provision 570 642 Transfer from Liability for indemnification obligations (Other liabilities) 25 67 Sales of loans (457 ) (1,415 ) Ending balance $ 6,781 $ 10,863 Allowance for Losses Three Months Ended March 31, 2020 2019 Beginning balance $ 9,925 $ 23,259 Provision (reversal) (761 ) 1,762 Net charge-offs and other (1,791 ) (1,886 ) Ending balance (1) $ 7,373 $ 23,135 (1) $18.0 million allowance related to sold advances was reclassified in the third quarter of 2019 and presented as Other liabilities (Liability for indemnification obligations). |
Schedule of Gains on Loans Held for Sale, Net | Gain on Loans Held for Sale, Net Three Months Ended March 31, 2020 2019 Gain on sales of loans, net MSRs retained on transfers of forward mortgage loans $ 6,561 $ 828 Gain on sale of repurchased Ginnie Mae loans 1,842 538 Gain on sale of forward mortgage loans 6,418 10,444 14,821 11,810 Change in fair value of IRLCs 5,714 (341 ) Change in fair value of loans held for sale 159 (142 ) Loss on economic hedge instruments (7,192 ) (2,270 ) Other (171 ) (75 ) $ 13,331 $ 8,982 |
Advances (Tables)
Advances (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Advances [Abstract] | |
Schedule of Advances Paid on Behalf of Borrowers or on Foreclosed Properties | March 31, 2020 December 31, 2019 Principal and interest $ 426,308 $ 414,846 Taxes and insurance 383,829 422,383 Foreclosures, bankruptcy, REO and other 222,043 229,219 1,032,180 1,066,448 Allowance for losses (7,373 ) (9,925 ) Advances, net $ 1,024,807 $ 1,056,523 |
Schedule of Activity in Advances | The following table summarizes the activity in net advances: Three Months Ended March 31, 2020 2019 Beginning balance $ 1,056,523 $ 1,186,676 New advances 243,545 105,995 Sales of advances (228 ) (707 ) Collections of advances and other (277,585 ) (198,008 ) Net decrease in allowance for losses (1) 2,552 124 Ending balance $ 1,024,807 $ 1,094,080 (1) As disclosed in Note 1, there was no significant adjustment as of January 1, 2020 as a result of the adoption of ASU 2016-13. Servicing advances are generally expected to be fully reimbursed under the terms of the servicing agreements. The estimate for the allowance for losses is based on relevant qualitative and quantitative information about past events, including historical collection and loss experience, current conditions, and reasonable and supportable forecasts that affect collectability. The allowance for losses includes an estimate for claimable (with investors) but nonrecoverable expenses, for example due to servicer error, such as lack of reasonable documentation as to the type and amount of advances. |
Schedule of Changes in Allowance For Losses | Valuation Allowance - Loans Held for Sale at Lower of Cost or Fair Value Three Months Ended March 31, 2020 2019 Beginning balance $ 6,643 $ 11,569 Provision 570 642 Transfer from Liability for indemnification obligations (Other liabilities) 25 67 Sales of loans (457 ) (1,415 ) Ending balance $ 6,781 $ 10,863 Allowance for Losses Three Months Ended March 31, 2020 2019 Beginning balance $ 9,925 $ 23,259 Provision (reversal) (761 ) 1,762 Net charge-offs and other (1,791 ) (1,886 ) Ending balance (1) $ 7,373 $ 23,135 (1) $18.0 million allowance related to sold advances was reclassified in the third quarter of 2019 and presented as Other liabilities (Liability for indemnification obligations). |
Mortgage Servicing (Tables)
Mortgage Servicing (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Transfers and Servicing [Abstract] | |
Schedule of Activity Related to MSRs - Fair Value Measurement Method | MSRs – Fair Value Measurement Method Three Months Ended March 31, 2020 2019 Agency Non-Agency Total Agency Non-Agency Total Beginning balance $ 714,006 $ 772,389 $ 1,486,395 $ 865,587 $ 591,562 $ 1,457,149 Sales and other transfers — (56 ) (56 ) (435 ) (132 ) (567 ) Additions: Recognized on the sale of residential mortgage loans 5,930 — 5,930 1,407 — 1,407 Purchase of MSRs 31,490 — 31,490 54,513 — 54,513 Servicing transfers and adjustments (1) (263,630 ) (893 ) (264,523 ) — (3,313 ) (3,313 ) Changes in fair value (2): Changes in valuation inputs or other assumptions (166,532 ) 10,392 (156,140 ) (64,117 ) (156 ) (64,273 ) Realization of expected future cash flows and other changes (27,037 ) (25,831 ) (52,868 ) (31,263 ) (13,462 ) (44,725 ) Ending balance $ 294,227 $ 756,001 $ 1,050,228 $ 825,692 $ 574,499 $ 1,400,191 (1) Servicing transfers and adjustments include a $263.7 million derecognition of MSRs/Rights to MSRs effective with the February 20, 2020 termination of the subservicing agreement between NRZ and PMC. See Note 8 — Rights to MSRs for further information. (2) Changes in fair value are recognized in MSR valuation adjustments, net in the unaudited consolidated statements of operations. |
Schedule of Composition of Servicing and Subservicing Portfolios by Type of Property Serviced | The following table presents the composition of our primary servicing and subservicing portfolios as measured by UPB. The UPB amounts in the table below are not included on our unaudited consolidated balance sheets, with the exception of the Reverse mortgage loans. UPB at March 31, 2020 December 31, 2019 March 31, 2019 Servicing $ 70,718,538 $ 70,428,208 $ 69,616,987 Reverse mortgage loan servicing (1) 6,432,003 6,229,724 5,671,103 Subservicing 17,676,677 17,120,905 49,805,407 NRZ (2) (3) 113,934,122 118,587,594 125,987,243 $ 208,761,340 $ 212,366,431 $ 251,080,740 (1) Reverse mortgage loans are reported on our unaudited consolidated balance sheets and are classified as loans held for investment. No separate MSRs are recognized in our unaudited consolidated balance sheets. (2) UPB of loans for which the Rights to MSRs have been sold to NRZ, including $55.6 billion for which third-party consents have been received and the MSRs have been transferred to NRZ (the MSRs remain on balance sheet as the transactions do not achieve sale accounting treatment). (3) Includes $40.0 billion of servicing UPB at March 31, 2020 pursuant to the subservicing agreement between NRZ and PMC for which we received a notice of termination from NRZ on February 20, 2020. While the MSRs and the Rights to MSRs associated with these loans are derecognized from our consolidated balance sheet, we continue to service these loans until deboarding. See Note 8 — Rights to MSRs . |
Schedule of Components of Servicing and Subservicing Fees | Servicing Revenue Three Months Ended March 31, 2020 2019 Loan servicing and subservicing fees Servicing $ 55,408 $ 53,345 Subservicing 5,190 6,207 NRZ 119,669 155,847 180,267 215,399 Late charges 14,639 15,439 Custodial accounts (float earnings) 6,141 11,934 Loan collection fees 4,256 4,349 Home Affordable Modification Program (HAMP) fees (1) 408 1,777 Other, net 5,772 7,881 $ 211,483 $ 256,779 (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 (Tables)
Rights to MSRs (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Transfers and Servicing [Abstract] | |
Schedule of Assets, Liabilities, Servicing and Subservicing Fees Related to NRZ Agreements | The following tables present selected assets and liabilities recorded on our unaudited consolidated balance sheets as well as the impacts to our unaudited consolidated statements of operations in connection with our NRZ agreements. Balance Sheets March 31, 2020 December 31, 2019 MSRs, at fair value (1) $ 591,705 $ 915,148 Due from NRZ (Receivables) Sales and transfers of MSRs (2) $ 22,631 $ 24,167 Subservicing fees and reimbursable expenses 1,601 9,197 $ 24,232 $ 33,364 Due to NRZ (Other liabilities) $ 98,555 $ 63,596 Financing liability - MSRs pledged, at fair value Original Rights to MSRs Agreements $ 591,705 $ 603,046 2017 Agreements and New RMSR Agreements (3) 9,979 35,445 PMC MSR Agreements (1) — 312,102 $ 601,684 $ 950,593 (1) On February 20, 2020, we received a notice of termination from NRZ with respect to the PMC MSR Agreements. While the MSRs and the Rights to MSRs associated with these loans are derecognized from our balance sheet at March 31, 2020, we continue to service these loans until deboarding, and account for them as a subservicing relationship. (2) Balance represents the holdback of proceeds from PMC MSR sales and transfers to address indemnification claims and mortgage loan document deficiencies. These sales were executed by PMC prior to the acquisition date. (3) $10.0 million of income is expected to be recognized for the quarter ended June 30, 2020 as a reduction in the financing liability based on the remaining term of the original agreements. Three Months Ended March 31, 2020 2019 Statements of Operations Servicing fees collected on behalf of NRZ (1) $ 119,669 $ 155,847 Less: Subservicing fee retained by Ocwen (1) 29,331 37,407 Net servicing fees remitted to NRZ 90,338 118,440 Less: Reduction (increase) in financing liability Changes in fair value: Original Rights to MSRs Agreements (9,120 ) 121 2017 Agreements and New RMSR Agreements (903 ) (6,980 ) PMC MSR Agreements (1) 40,720 33,096 30,697 26,237 Runoff and settlement: Original Rights to MSRs Agreements 17,793 9,035 2017 Agreements and New RMSR Agreements 25,142 23,320 PMC MSR Agreements (1) 7,492 17,774 50,427 50,129 Other 2,620 (1,882 ) Pledged MSR liability expense $ 6,594 $ 43,956 (1) On February 20, 2020, we received a notice of termination from NRZ with respect to the PMC MSR Agreements. As the MSRs and the Rights to MSRs associated with these loans were derecognized from our consolidated balance sheet on February 20, 2020, we did not report the associated servicing fees collected on behalf of, and remitted to NRZ, or the change in fair value, runoff and settlement of the financing liability subsequent to February 20, 2020. |
Schedule of Activity Related to Rights to Mortgage Servicing Rights | Financing Liability - MSRs Pledged Original Rights to MSRs Agreements 2017 Agreements and New RMSR Agreements PMC MSR Agreements Total Balance at December 31, 2019 $ 603,046 $ 35,445 $ 312,102 $ 950,593 Additions — — — — Receipt of lump-sum cash payments — — — — Sales — — (226 ) (226 ) Changes in fair value: Original Rights to MSRs Agreements 9,120 — — 9,120 2017 Agreements and New RMSR Agreements — 903 — 903 PMC MSR Agreements — — (40,720 ) (40,720 ) Runoff and settlement: Original Rights to MSRs Agreements (17,793 ) — — (17,793 ) 2017 Agreements and New RMSR Agreements — (25,142 ) — (25,142 ) PMC MSR Agreements — — (7,492 ) (7,492 ) Derecognition of Pledged MSR financing liability due to termination of PMC MSR Agreements — — (263,664 ) (263,664 ) Calls (1): Original Rights to MSRs Agreements (2,668 ) — — (2,668 ) 2017 Agreements and New RMSR Agreements — (1,227 ) — (1,227 ) Balance at March 31, 2020 $ 591,705 $ 9,979 $ — $ 601,684 Financing Liability - MSRs Pledged Original Rights to MSRs Agreements 2017 Agreements and New RMSR Agreements PMC MSR Agreements Total Balance at December 31, 2018 $ 436,511 $ 138,854 $ 457,491 $ 1,032,856 Purchases — — 577 577 Changes in fair value: Original Rights to MSRs Agreements (121 ) — — (121 ) 2017 Agreements and New RMSR Agreements — 6,980 — 6,980 PHH MSR Agreements — — (33,096 ) (33,096 ) Runoff and settlement: Original Rights to MSRs Agreements (9,035 ) — — (9,035 ) 2017 Agreements and New RMSR Agreements — (23,320 ) — (23,320 ) PHH MSR Agreements — — (17,774 ) (17,774 ) Calls (1): Original Rights to MSRs Agreements (3,269 ) — — (3,269 ) 2017 Agreements and New RMSR Agreements — (2,582 ) — (2,582 ) Balance at March 31, 2019 $ 424,086 $ 119,932 $ 407,198 $ 951,216 (1) Represents the carrying value of MSRs in connection with call rights exercised by NRZ, for MSRs transferred to NRZ under the 2017 Agreements and New RMSR Agreements, or by Ocwen at NRZ’s direction, for MSRs underlying the Original Rights to MSRs Agreements. Ocwen derecognizes the MSRs and the related financing liability upon collapse of the securitization |
Receivables (Tables)
Receivables (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Schedule of Receivables | March 31, 2020 December 31, 2019 Servicing-related receivables: Government-insured loan claims $ 120,410 $ 122,557 Due from NRZ: Sales and transfers of MSRs 22,631 24,167 Subservicing fees and reimbursable expenses 1,601 9,197 Reimbursable expenses 9,325 13,052 Due from custodial accounts 11,306 27,175 Other 3,665 4,970 168,938 201,118 Income taxes receivable (1) 102,566 37,888 Other receivables 23,064 20,086 294,568 259,092 Allowance for losses (59,263 ) (57,872 ) $ 235,305 $ 201,220 (1) See Note 16 – Income Taxes |
Schedule of Changes in Allowance For Losses | Valuation Allowance - Loans Held for Sale at Lower of Cost or Fair Value Three Months Ended March 31, 2020 2019 Beginning balance $ 6,643 $ 11,569 Provision 570 642 Transfer from Liability for indemnification obligations (Other liabilities) 25 67 Sales of loans (457 ) (1,415 ) Ending balance $ 6,781 $ 10,863 Allowance for Losses Three Months Ended March 31, 2020 2019 Beginning balance $ 9,925 $ 23,259 Provision (reversal) (761 ) 1,762 Net charge-offs and other (1,791 ) (1,886 ) Ending balance (1) $ 7,373 $ 23,135 (1) $18.0 million allowance related to sold advances was reclassified in the third quarter of 2019 and presented as Other liabilities (Liability for indemnification obligations). |
Government Insured Loans Claims | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Schedule of Changes in Allowance For Losses | Allowance for Losses - Government-Insured Loan Claims Three Months Ended March 31, 2020 2019 Beginning balance (1) $ 56,868 $ 52,497 Provision 5,072 7,247 Charge-offs and other, net (3,837 ) (8,464 ) Ending balance $ 58,103 $ 51,280 (1) The adoption of ASU 2016-13 did not result in any significant change to the allowance for losses related to receivables as of January 1, 2020. |
Other Assets (Tables)
Other Assets (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Other Assets [Abstract] | |
Schedule of Other Assets | March 31, 2020 December 31, 2019 Contingent loan repurchase asset $ 393,395 $ 492,900 Prepaid expenses 35,514 21,996 Prepaid representation, warranty and indemnification claims - Agency MSR sale 15,173 15,173 Derivatives, at fair value 15,830 6,007 REO 7,907 8,556 Prepaid lender fees, net 6,464 8,647 Security deposits 2,150 2,163 Mortgage backed securities, at fair value 1,670 2,075 Deferred tax asset, net 1,647 2,169 Interest-earning time deposits 371 390 Other 4,004 3,164 $ 484,125 $ 563,240 |
Borrowings (Tables)
Borrowings (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Match Funded Liabilities | Advance Match Funded Liabilities March 31, 2020 December 31, 2019 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 2015-VF5 (4) Dec. 2050 Dec. 2020 $ 59,021 3.05 % $ 140,979 3.36 % $ 190,555 Advance Receivables Backed Notes, Series 2019-T1 (5) Aug. 2050 Aug. 2020 — 2.62 185,000 2.62 185,000 Advance Receivables Backed Notes, Series 2019-T2 (5) Aug. 2051 Aug. 2021 — 2.53 285,000 2.53 285,000 Total Ocwen Master Advance Receivables Trust (OMART) 59,021 2.68 610,979 2.79 660,555 Ocwen Freddie Advance Funding (OFAF) - Advance Receivables Backed Notes, Series 2015-VF1 (6) Jun. 2050 Jun. 2020 45,028 3.26 14,972 3.53 18,554 $ 104,049 2.69 % $ 625,951 2.81 % $ 679,109 (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 ratably to each outstanding amortizing note to reduce the balance and as such the collection of advances allocated to the amortizing note may not be used to fund new advances. (2) Borrowing capacity under the OMART and OFAF facilities is available to us provided that we have sufficient eligible collateral to pledge. At March 31, 2020 , none of the available borrowing capacity of our advance financing notes could be used based on the amount of eligible collateral. (3) 1ML was 0.99% and 1.76% at March 31, 2020 and December 31, 2019 , respectively. (4) The total borrowing capacity of the Series 2015-VF5 variable notes is $200.0 million , with interest computed based on the lender’s cost of funds plus a margin. At March 31, 2020 , the weighted average interest margin was 136 bps. (5) On August 14, 2019, we issued two fixed-rate term notes of $185.0 million (Series 2019 T-1) and $285.0 million (Series 2019-T2) with amortization dates of August 17, 2020 and August 16, 2021, respectively, for a total combined borrowing capacity of $470.0 million . The weighted average rate of the notes is 2.57% with rates on the individual classes of notes ranging from 2.42% to 4.44% . (6) The borrowing capacity of this facility is $60.0 million with interest computed based on the lender’s cost of funds plus a margin. At March 31, 2020 , the weighted average interest margin was 157 bps. |
Schedule of Financing Liabilities | Financing Liabilities Outstanding Balance Borrowing Type Collateral Interest Rate Maturity March 31, 2020 December 31, 2019 HMBS-Related Borrowings, at fair value (1) Loans held for investment 1ML + 260 bps (1) $ 6,323,091 $ 6,063,435 Other Financing Liabilities MSRs pledged (Rights to MSRs), at fair value: Original Rights to MSRs Agreements MSRs (2) (2) 591,705 603,046 2017 Agreements and New RMSR Agreements MSRs (3) (3) 9,979 35,445 PMC MSR Agreements MSRs (4) (4) — 312,102 601,684 950,593 Financing liability - Owed to securitization investors, at fair value: IndyMac Mortgage Loan Trust (INDX 2004-AR11) (5) Loans held for investment (5) (5) 9,544 9,794 Residential Asset Securitization Trust 2003-A11 (RAST 2003-A11) (5) Loans held for investment (5) (5) 11,821 12,208 21,365 22,002 Total Other Financing Liabilities 623,049 972,595 $ 6,946,140 $ 7,036,030 (1) Represents amounts due to the holders of beneficial interests in Ginnie Mae guaranteed HMBS which did not qualify for sale accounting treatment of HECM loans. Under this accounting treatment, the HECM loans securitized with Ginnie Mae remain on our consolidated balance sheet and the proceeds from the sale are recognized as a secured liability. The beneficial interests have no maturity dates, and the borrowings mature as the related loans are repaid. We elected to record the HMBS-related borrowings at fair value consistent with the related HECM loans. Changes in fair value are reported within Reverse mortgage revenue, net. (2) This pledged MSR liability is recognized due to the accounting treatment of MSR sale transactions with NRZ which did not qualify as sales for accounting purposes. 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. This financing liability has no contractual maturity or repayment schedule. We elected to record the liability at fair value consistent with the related MSRs. 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. Changes in fair value are reported within Pledged MSR liability expense, and are offset by corresponding changes in fair value of the MSR pledged to NRZ within MSR valuation adjustments, net. (3) This financing liability arose in connection with lump sum payments of $54.6 million 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. We recognized the cash received as a financing liability that we are accounting for at fair value through the remaining term of the original agreements (April 2020). 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, with changes in fair value recognized in Pledged MSR liability expense in the unaudited consolidated statements of operations. (4) Represented a liability for sales of MSRs to NRZ which did not qualify for sale accounting treatment and were 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 remained on the consolidated balance sheet and the proceeds from the sale were recognized as a secured liability. We elected to record the liability at fair value consistent with the related MSRs. As disclosed in Note 8 — Rights to MSRs , the liability was derecognized upon termination of the agreement by NRZ on February 20, 2020. (5) 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 3.38% and 3.85% at March 31, 2020 . 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. |
Schedule of Other Secured Borrowings | Other Secured Borrowings Outstanding Balance Borrowing Type Collateral Interest Rate Termination / Maturity Available Borrowing Capacity (1) March 31, 2020 December 31, 2019 SSTL (2) (2) 1-Month Euro-dollar rate + 600 bps with a Eurodollar floor of 100 bps (2) May 2022 $ — $ 200,000 $ 326,066 Other Secured Borrowings Outstanding Balance Borrowing Type Collateral Interest Rate Termination / Maturity Available Borrowing Capacity (1) March 31, 2020 December 31, 2019 Mortgage loan warehouse facilities Master repurchase agreement (3) Loans held for sale (LHFS) 1ML + 195 - 300 bps Sep. 2020 — 110,607 91,573 Mortgage warehouse agreement (4) LHFS (reverse mortgages) Greater of 1ML + 250 bps or 350 bps; Libor Floor 0% Aug. 2020 — — 72,443 Master repurchase agreement (5) LHFS (forward and reverse mortgages) 1ML + 225 bps forward; 1ML + 275 bps reverse Dec. 2020 119,637 80,363 139,227 Master repurchase agreement (6) LHFS (reverse mortgages) Prime + 0.0% (4.0% floor) Jan. 2020 — — 898 Master repurchase agreement (7) N/A 1ML + 170 bps; Libor Floor 35 bps N/A — — — Participation agreement (8) LHFS N/A May 2020 — 29,102 17,304 Mortgage warehouse agreement (9) LHFS 1ML + 350 bps; Libor Floor 175 bps Dec. 2020 36,583 13,417 10,780 Mortgage warehouse agreement (10) LHFS (reverse mortgages) 1ML + 250 bps; 1ML floor of 350 bps Aug. 2020 — 55,633 — 156,220 289,122 332,225 Agency MSR financing facility (11) MSRs 1ML + 300bps Jun. 2020 185,710 114,290 147,706 Ginnie Mae MSR financing facility (12) MSRs 1ML + 395 bps Nov. 2021 — 61,082 72,320 Ocwen Excess Spread-Collateralized Notes, Series 2019-PLS1 (13) MSRs 5.07% Nov. 2024 — 86,911 94,395 Secured Notes, Ocwen Asset Servicing Income Series, Series 2014-1 (14) MSRs (14) Feb. 2028 — 55,596 57,594 185,710 317,879 372,015 $ 341,930 807,001 1,030,306 Unamortized debt issuance costs - SSTL and PLS Notes (8,808 ) (3,381 ) Discount - SSTL (578 ) (1,134 ) $ 797,615 $ 1,025,791 Weighted average interest rate 4.09 % 4.74 % (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, none of the available borrowing capacity could be used at March 31, 2020 based on the amount of eligible collateral that could be pledged. (2) On January 27, 2020, we entered into a Joinder and Second Amendment Agreement (the Amendment) which amends the Amended and Restated SSTL Facility Agreement dated as of December 5, 2016, as amended by a Joinder and Amendment Agreement dated as of March 18, 2019. The Amendment provided for a net prepayment of $126.1 million of the outstanding balance at December 31, 2019 such that the facility has a maximum outstanding balance of $200.0 million . The Amendment also (i) extended the maturity of the remaining outstanding loans under the SSTL to May 15, 2022, (ii) provides that the loans under the SSTL bear interest at the one-month Eurodollar Rate or the Base Rate (as defined in the SSTL), at our option, plus a margin of 6.00% per annum for Eurodollar Rate loans or 5.00% per annum for Base Rate loans (increasing to a margin of 6.50% per annum for Eurodollar Rate loans or 5.50% per annum for Base Rate loans on January 27, 2021), (iii) provides for a prepayment premium of 2.00% until January 27, 2022 and (iv) requires quarterly principal payments of $5.0 million . (3) The maximum borrowing under this agreement is $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 $1.0 million on a committed basis. 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 March 12, 2020, we voluntarily reduced the maximum borrowing capacity from $100.0 million to $1.0 million in connection with Liberty’s transfer of substantially all of its assets, liabilities, contracts and employees to PMC effective March 15, 2020. (5) The maximum borrowing under this agreement is $250.0 million , of which $200.0 million is available on a committed basis and the remainder is available on an uncommitted basis. 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, t he lender provides financing for up to $50.0 million on an uncommitted basis. This facility expired on January 22, 2020 and was not renewed. (7) 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. (8) Under this master participation agreement, the lender will provide $300.0 million of borrowing capacity to PMC on an uncommitted basis. The participation agreement allows the lender to acquire a 100% beneficial interest in the underlying mortgage loans. The transaction does not qualify for sale accounting treatment and is accounted for as a secured borrowing. The lender earns the stated interest rate of the underlying mortgage loans while the loans are financed under the participation agreement. On March 26, 2020, we renewed this facility through May 3, 2020, and subsequently extended for an additional 30 days until June 3, 2020 for $150.0 million . (9) Under this agreement, the lender provides financing for up to $50.0 million on a committed basis. The lender earns the stated interest rate of 1ML plus a margin of 350 bps. (10) On March 12, 2020, PMC entered into a mortgage loan warehouse agreement to fund reverse mortgage loan draws by borrowers subsequent to origination. Under this agreement, t he lender provides financing for up to $100.0 million on an uncommitted basis and the lender earns the stated interest rate of 1ML plus a margin of 250 bps. (11) Financing facility entered into by PMC that is secured by certain Fannie Mae and Freddie Mac MSRs. In connection with this facility, PMC entered into repurchase agreements pursuant to which PMC sold trust certificates representing certain indirect economic interests in the MSRs and agreed to repurchase such trust certificates at a future date at the repurchase price set forth in the repurchase agreements. PMC’s obligations under this facility are secured by a lien on the related MSRs. Ocwen guarantees the obligations of PMC under this facility. The maximum amount which we may borrow pursuant to the repurchase agreements is $300.0 million on a committed basis. The lender earns the stated interest rate of 1ML plus a margin of 300 bps. See Note 3 – Securitizations and Variable Interest Entities for additional information. We are subject to daily margining requirements under the terms of our MSR financing facilities. Declines in fair value of our MSRs due to declines in market interest rates, assumption updates or other factors require that we provide additional collateral to our lenders under these facilities. (12) Financing facility entered into by PMC that is secured by certain Ginnie Mae MSRs. In connection with the facility, PMC entered into a repurchase agreement pursuant to which PMC has sold a participation certificate representing certain economic interests in the Ginnie Mae MSRs and has agreed to repurchase such participation certificate at a future date at the repurchase price set forth in the repurchase agreement. PMC’s obligations under the facility are secured by a lien on the related Ginnie Mae MSRs. Ocwen guarantees the obligations of PMC under the facility. The maximum amount which we may borrow pursuant to the facility is $100.0 million on an uncommitted basis. The lender earns the stated interest rate of 1ML plus a margin of 395 bps. See (11) above regarding daily margining requirements. (13) PMC issued the PLS Notes secured by certain of PMC’s MSRs (PLS MSRs) pursuant to a credit agreement. PLS Issuer’s obligations under the facility are secured by a lien on the related PLS MSRs. Ocwen guarantees the obligations of PLS Issuer under the facility. The Class A PLS Notes issued pursuant to the credit agreement have an initial principal amount of $100.0 million and amortize in accordance with a pre-determined schedule subject to modification under certain events. The notes have a stated coupon rate of 5.07% . See Note 3 – Securitizations and Variable Interest Entities for additional information. See (11) above regarding daily margining requirements. (14) 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. |
Schedule of Senior Notes | Senior Notes Interest Rate Maturity Outstanding Balance March 31, 2020 December 31, 2019 Senior unsecured notes: PHH (1) 6.375% Aug. 2021 $ 21,543 $ 21,543 21,543 21,543 Senior secured notes 8.375% Nov. 2022 291,509 291,509 313,052 313,052 Unamortized debt issuance costs (1,344 ) (1,470 ) Fair value adjustments (1) (418 ) (497 ) $ 311,290 $ 311,085 (1) 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 purchase accounting 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. |
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 2019 104.188% 2020 102.094% 2021 and thereafter 100.000% |
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 March 31, 2020 : Collateral for Secured Borrowings Total Assets Advance Match Funded Liabilities Financing Liabilities Mortgage Loan Warehouse / MSR Facilities Sales and Other Commitments (1) Other (2) Cash $ 263,555 $ — $ — $ — $ — $ 263,555 Restricted cash 53,177 10,838 — 5,031 37,308 — MSRs (3) 1,050,228 — 591,705 459,027 — 513 Advances, net 1,024,807 751,020 — — — 273,787 Loans held for sale 246,015 — — 205,080 — 40,935 Loans held for investment 6,591,382 — 6,461,371 97,273 — 32,738 Receivables, net 235,305 — — 32,560 — 202,745 Premises and equipment, net 37,430 — — — — 37,430 Other assets 484,125 — — 5,204 410,718 68,203 Total assets $ 9,986,024 $ 761,858 $ 7,053,076 $ 804,175 $ 448,026 $ 919,906 (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 EBO 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, 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, 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. Assets 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. (3) MSRs pledged as collateral for secured borrowings includes MSRs pledged to NRZ in connection with the Rights to MSRs transactions which are accounted for as secured financings and MSRs securing the financing facilities. Certain MSR cohorts with a negative fair value of $1.0 million that would be presented as Other are excluded from the eligible collateral of the facilities and are comprised of $23.3 million of negative fair value related to RMBS and $22.1 million of positive fair value related to private EBO and PLS MSRs. |
Other Liabilities (Tables)
Other Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Other Liabilities | March 31, 2020 December 31, 2019 Contingent loan repurchase liability $ 393,395 $ 492,900 Due to NRZ - Advance collections and servicing fees 98,555 63,596 Servicing-related obligations 96,994 88,167 Liability for indemnification obligations 48,608 52,785 Other accrued expenses 48,452 67,241 Lease liability 42,863 44,488 Accrued legal fees and settlements 33,305 30,663 Checks held for escheat 32,706 31,959 Liability for uncertain tax positions 16,527 17,197 Accrued interest payable 12,561 5,964 Liability for unfunded pension obligation 13,074 13,383 Liability for mortgage insurance contingency 6,820 6,820 Liability for unfunded India gratuity plan 5,160 5,331 Derivatives, at fair value 2,589 100 Deferred revenue 774 488 Other 22,788 21,091 $ 875,171 $ 942,173 |
Derivative Financial Instrume_2
Derivative Financial Instruments and Hedging Activities (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Activity | The following table summarizes derivative activity, including the derivatives used in each of our identified hedging programs. The notional amount of our contracts does not represent our exposure to credit loss. None of the derivatives were designated as a hedge for accounting purposes as of, or during the three months ended March 31, 2020 and 2019 : IRLCs Interest Rate Risk MSR Hedging IRLCs and Loans Held for Sale Borrowings TBA / Forward MBS Trades and Futures (1) Forward Trades Interest Rate Caps Notional balance at March 31, 2020 $ 382,773 $ 740,000 $ 100,000 $ 10,833 Notional balance at December 31, 2019 232,566 1,200,000 60,000 27,083 Maturity April 2020 - June 2020 May 2020 - June 2020 April 2020 - May 2020 May 2020 Fair value of derivative assets (liabilities) at: March 31, 2020 $ 10,478 $ 2,999 $ (235 ) $ — December 31, 2019 4,878 1,121 (92 ) — Gains (losses) on derivatives during the three months ended: Gain on loans held for sale, net MSR valuation adjustments, net Gain on loans held for sale, net Other, net March 31, 2020 $ 5,714 $ 35,291 $ (7,192 ) $ — March 31, 2019 (341 ) $ — (2,270 ) (402 ) (1) The March 31, 2020 balances include $500.0 million notional balance and $0.8 million fair value, of interest rate swap futures (nil at December 31, 2019). The related gain on these interest rate futures for the three months ended March 31, 2020 was $0.8 million . |
Interest Expense (Tables)
Interest Expense (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Other Income and Expenses [Abstract] | |
Schedule of Components of Interest Expense | Three Months Ended March 31, 2020 2019 Senior notes $ 6,661 $ 8,512 Advance match funded liabilities 5,665 7,652 Other secured borrowings 15,292 8,947 Other 2,364 1,378 $ 29,982 $ 26,489 |
Basic and Diluted Earnings (L_2
Basic and Diluted Earnings (Loss) per Share (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliation of Calculation of Basic Loss per Share to Diluted Loss per Share | Three Months Ended March 31, 2020 2019 Basic and Diluted loss per share Net loss $ (25,489 ) $ (44,494 ) Weighted average shares of common stock — Basic and Diluted 134,858,837 133,918,986 Basic and Diluted loss per share $ (0.19 ) $ (0.33 ) Stock options and common stock awards excluded from the computation of diluted earnings per share Anti-dilutive (1) 3,737,824 3,226,255 Market-based (2) 1,880,954 381,877 (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. |
Business Segment Reporting (Tab
Business Segment Reporting (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information | Financial information for our segments is as follows: Three Months Ended March 31, 2020 Results of Operations Servicing Originations Corporate Items and Other Business Segments Consolidated Revenue $ 213,555 $ 37,647 $ 2,640 $ 253,842 MSR valuation adjustments, net (174,436 ) 316 — (174,120 ) Operating expenses (1) (2) 80,473 26,958 29,783 137,214 Other (expense) income: Interest income 1,886 2,266 1,243 5,395 Interest expense (13,667 ) (2,861 ) (13,454 ) (29,982 ) Pledged MSR liability expense (6,623 ) — 29 (6,594 ) Other 3,662 (29 ) (2,305 ) 1,328 Other expense, net (14,742 ) (624 ) (14,487 ) (29,853 ) (Loss) income before income taxes $ (56,096 ) $ 10,381 $ (41,630 ) $ (87,345 ) Three Months Ended March 31, 2019 Results of Operations Servicing Originations Corporate Items and Other Business Segments Consolidated Revenue $ 259,274 $ 41,091 $ 3,523 $ 303,888 MSR valuation adjustments, net (108,914 ) (84 ) — (108,998 ) Operating expenses (1) (2) 156,984 21,247 (7,124 ) 171,107 Other (expense) income: Interest income 2,294 1,549 715 4,558 Interest expense (10,742 ) (1,668 ) (14,079 ) (26,489 ) Pledged MSR liability expense (43,956 ) — — (43,956 ) Other 1,525 219 (724 ) 1,020 Other (expense) income, net (50,879 ) 100 (14,088 ) (64,867 ) (Loss) income before income taxes $ (57,503 ) $ 19,860 $ (3,441 ) $ (41,084 ) (1) Compensation and benefits expense in the Corporate Items and Other segment for the three months ended March 31, 2020 and 2019 includes $0.2 million and $18.5 million , respectively, of severance expense attributable to PHH integration-related headcount reductions of primarily U.S.-based employees in 2019, as well as our overall efforts to reduce costs. (2) Included in the Corporate Items and Other segment for the three months ended March 31, 2019, we recorded in Professional services expense a recovery from a service provider of $30.7 million of amounts previously recognized as expense. Total Assets Servicing Originations Corporate Items and Other Business Segments Consolidated March 31, 2020 $ 2,787,250 $ 6,739,576 $ 459,198 $ 9,986,024 December 31, 2019 $ 3,378,515 $ 6,459,367 $ 568,317 $ 10,406,199 March 31, 2019 $ 3,221,779 $ 5,848,830 $ 466,601 $ 9,537,210 Depreciation and Amortization Expense Servicing Originations Corporate Items and Other Business Segments Consolidated Three months ended March 31, 2020 Depreciation expense $ 215 $ 37 $ 3,745 $ 3,997 Amortization of debt discount — — 929 929 Amortization of debt issuance costs 112 — 1,621 1,733 Three months ended March 31, 2019 Depreciation expense $ 806 $ 36 $ 7,709 $ 8,551 Amortization of debt discount — — 351 351 Amortization of debt issuance costs — — 700 700 |
Commitments (Tables)
Commitments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Other Commitments [Abstract] | |
Schedule of Mortgage Servicing Rights Assets and Liabilities | The table below presents the carrying value and classification of the assets and liabilities of the PLS Notes facility: March 31, 2020 December 31, 2019 MSRs pledged (MSRs, at fair value) $ 141,610 $ 146,215 Debt service account (Restricted cash) 2,941 3,002 Outstanding borrowings (Other secured borrowings, net) 86,911 94,395 Unamortized debt issuance costs (Other secured borrowings, net) (1,196 ) (1,207 ) The table below presents the carrying value and classification of the assets and liabilities of the Agency MSR financing facility: March 31, 2020 December 31, 2019 MSRs pledged (MSRs, at fair value) $ 173,313 $ 245,533 Unamortized debt issuance costs (Other assets) 473 946 Debt service account (Restricted cash) 102 100 Outstanding borrowings (Other secured borrowings, net) 114,290 147,706 As of March 31, 2020, the UPB of loans serviced on behalf of NRZ comprised the following: Ocwen servicer of record (MSR title retained by Ocwen) - Ocwen MSR (1) $ 17,910,643 NRZ servicer of record (MSR title transferred to NRZ) - Ocwen MSR (1) 89,811,915 Ocwen subservicer 6,211,564 Total NRZ UPB at March 31, 2020 $ 113,934,122 |
Schedule of Effect of Pandemic | The below table shows the requests for forbearance plans and the estimated obligation to advance monthly P&I: COVID-19 impacted borrowers and monthly P&I advance estimate As of March 31, 2020 As of April 30, 2020 Number of Forbearance Plans (3) Estimated Monthly P&I Advance Obligation ($ million) Number of Forbearance Plans (3) Estimated Monthly P&I Advance Obligation ($ million) GSE loans 1,400 $ 1.8 6,200 $ 7.9 Ginnie Mae loans 400 0.5 8,400 7.9 PLS loans 3,700 5.8 16,000 24.4 Servicer 5,500 $ 8.1 30,600 $ 40.2 GSE loans 2,300 $ 2.6 9,400 $ 10.5 PLS loans 14,500 14.0 63,200 62.4 NRZ’s responsibility (1) 16,800 $ 16.6 72,600 $ 72.9 Subservicer (2) 3,900 $ 4.5 6,500 $ 8.9 No advance requirements 1,300 — 4,900 — Total 27,500 $ 29.2 114,600 $ 122.0 (1) Ocwen is obligated to advance under the terms of the 2017 Agreements and New RMSR Agreements, and NRZ is obligated to reimburse Ocwen daily for PLS and weekly for Freddie Mac and Fannie Mae servicing advances. See above, Note 8 — Rights to MSRs and Note 11 – Borrowings for additional information, and below description of NRZ Relationship. (2) Ocwen is obligated to advance under the terms of subservicing agreements, and subservicing clients (servicers) are generally obligated to reimburse Ocwen within one day to 30 days for P&I advances. (3) Numbers have been rounded. |
Schedule of Activity Related to HMBS Repurchases | Activity with regard to HMBS repurchases, including MCA repurchases, follows: Three Months Ended March 31, 2020 Active Inactive Total Number Amount Number Amount Number Amount Beginning balance 62 $ 10,546 258 $ 25,147 320 $ 35,693 Additions (1) 47 10,337 73 9,519 120 19,856 Recoveries, net (2) (3 ) (5,413 ) (1 ) (3,184 ) (4 ) (8,597 ) Transfers (2 ) (553 ) 2 553 — — Changes in value — 43 — (992 ) — (949 ) Ending balance 104 $ 14,960 332 $ 31,043 436 $ 46,003 (1) Total repurchases during the three months ended March 31, 2020 includes 89 loans totaling $18.1 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. |
Contingencies (Tables)
Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Loss Contingency [Abstract] | |
Schedule of Indemnification Obligations | The following table presents the changes in our liability for representation and warranty obligations and similar indemnification obligations: Three Months Ended March 31, 2020 2019 Beginning balance (1) $ 50,838 $ 49,267 Provision (reversal) for representation and warranty obligations (768 ) (2,155 ) New production reserves 170 75 Charge-offs and other (2) (3,161 ) (573 ) Ending balance (1) $ 47,079 $ 46,614 (1) The liability for representation and warranty obligations and compensatory fees for foreclosures is reported in Other liabilities (a component of Liability for indemnification obligations) on our unaudited consolidated balance sheets. (2) Includes principal and interest losses realized in connection with repurchased loans, make-whole, indemnification and fee payments and settlements net of recoveries, if any. |
Organization, Business Enviro_4
Organization, Business Environment and Basis of Presentation - Narrative (Details) | 3 Months Ended | ||||||
Mar. 31, 2020USD ($)Employee | Mar. 31, 2019USD ($) | Apr. 01, 2020USD ($) | Jan. 27, 2020USD ($) | Jan. 01, 2020USD ($) | Dec. 31, 2019USD ($) | Aug. 14, 2019USD ($) | |
Description of Business and Basis of Presentation [Line Items] | |||||||
Total number of employees | Employee | 5,400 | ||||||
Current maturities of borrowings in next 12 months | $ 789,000,000 | ||||||
Debt instrument, term | 364 days | ||||||
Match funded liabilities | $ 625,951,000 | $ 679,109,000 | |||||
Amortization of debt issuance costs | 1,733,000 | $ 700,000 | |||||
Other, net | (408,000) | 1,039,000 | |||||
Other, net | $ 491,000 | (1,157,000) | |||||
Accounting Standards Update 2019-04 | |||||||
Description of Business and Basis of Presentation [Line Items] | |||||||
Cumulative effect of new accounting pronouncement | $ 47,000,000 | ||||||
INDIA | |||||||
Description of Business and Basis of Presentation [Line Items] | |||||||
Total number of employees | Employee | 3,400 | ||||||
PHILIPPINES | |||||||
Description of Business and Basis of Presentation [Line Items] | |||||||
Total number of employees | Employee | 500 | ||||||
Minimum | |||||||
Description of Business and Basis of Presentation [Line Items] | |||||||
Percentage of foreign based employees engaged in supporting loan servicing operations | 80.00% | ||||||
Unpaid Principal Balance | Customer Concentration Risk | New Residential Investment Corp | |||||||
Description of Business and Basis of Presentation [Line Items] | |||||||
Concentration risk (percent) | 55.00% | ||||||
Servicing Portfolio | Customer Concentration Risk | New Residential Investment Corp | |||||||
Description of Business and Basis of Presentation [Line Items] | |||||||
Concentration risk (percent) | 19.00% | ||||||
Advance Receivables Backed Notes - Series 2015-VF5 | |||||||
Description of Business and Basis of Presentation [Line Items] | |||||||
Maximum borrowing capacity | $ 200,000,000 | ||||||
Advance Receivables Backed Notes, Series 2015-VF1 | |||||||
Description of Business and Basis of Presentation [Line Items] | |||||||
Maximum borrowing capacity | 60,000,000 | ||||||
Secured Debt | Senior Secured Term Loan | |||||||
Description of Business and Basis of Presentation [Line Items] | |||||||
Maximum borrowing capacity | $ 200,000,000 | ||||||
Restatement Adjustment | |||||||
Description of Business and Basis of Presentation [Line Items] | |||||||
Amortization of debt issuance costs | 700,000 | ||||||
Other, net | 700,000 | ||||||
Proceeds from sale of real estate | 1,700,000 | ||||||
Other, net | $ 1,700,000 | ||||||
Subsequent Event | Advance Receivables Backed Notes - Series 2015-VF5 | |||||||
Description of Business and Basis of Presentation [Line Items] | |||||||
Maximum borrowing capacity | $ 500,000,000 | ||||||
Subsequent Event | Advance Receivables Backed Notes, Series 2015-VF1 | |||||||
Description of Business and Basis of Presentation [Line Items] | |||||||
Maximum borrowing capacity | $ 70,000,000 | ||||||
Total Ocwen Master Advance Receivables Trust (OMART) | |||||||
Description of Business and Basis of Presentation [Line Items] | |||||||
Match funded liabilities | 610,979,000 | 660,555,000 | |||||
Total Ocwen Master Advance Receivables Trust (OMART) | Advance Receivables Backed Notes - Series 2015-VF5 | |||||||
Description of Business and Basis of Presentation [Line Items] | |||||||
Match funded liabilities | 140,979,000 | 190,555,000 | |||||
Total Ocwen Master Advance Receivables Trust (OMART) | Advance Receivables Backed Notes, Series 2019-T1 | |||||||
Description of Business and Basis of Presentation [Line Items] | |||||||
Match funded liabilities | $ 185,000,000 | $ 185,000,000 | $ 185,000,000 |
Organization, Business Enviro_5
Organization, Business Environment and Basis of Presentation - Reclassifications (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Gain on loans held for sale, net | $ (13,331) | $ (8,982) |
Other revenue, net | (6,231) | (6,167) |
Servicing and subservicing fees | (211,483) | (256,616) |
Reverse mortgage revenue, net (New line item) | 22,797 | 32,123 |
Total revenue | $ 253,842 | 303,888 |
Restatement Adjustment | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Gain on loans held for sale, net | 8,613 | |
Other revenue, net | 24,263 | |
Servicing and subservicing fees | (753) | |
Reverse mortgage revenue, net (New line item) | 32,123 | |
Total revenue | $ 0 |
Cost Re-Engineering Plan - Sche
Cost Re-Engineering Plan - Schedule of Expenses Incurred To-Date, Including an Estimate of Remaining and Total Plan Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2020 | Feb. 28, 2019 | |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring reserves | $ 5,900 | ||
Total costs incurred | $ 22,136 | ||
Employee-related | |||
Restructuring Cost and Reserve [Line Items] | |||
Total costs incurred | 19,163 | ||
Other | |||
Restructuring Cost and Reserve [Line Items] | |||
Total costs incurred | $ 2,973 | ||
Maximum | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring costs | $ 65,000 |
Securitizations and Variable _3
Securitizations and Variable Interest Entities - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Nov. 26, 2019 | Jul. 01, 2019 | |
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | |||||
Average period to securitization | 30 days | ||||
MSRs retained | $ 6,561,000 | $ 828,000 | |||
Percentage of loan transferred through securitization 60 days or more past due | 7.20% | 7.70% | |||
Pledged advance remittance period | 2 days | ||||
MSRs | $ 1,050,228,000 | $ 1,486,395,000 | |||
Unamortized debt issuance costs (Other assets) | 6,464,000 | 8,647,000 | |||
Debt service accounts | 15,868,000 | $ 22,087,000 | |||
Financing Facility Secured By Fannie Mae And Freddie Mac | |||||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | |||||
Maximum borrowing capacity | $ 300,000,000 | ||||
Secured Debt | |||||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | |||||
Short-term debt | 317,879,000 | 372,015,000 | |||
Long-term debt | 797,615,000 | 1,025,791,000 | |||
Secured Debt | Agency Mortgage Servicing Rights Financing Facility | |||||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | |||||
Maximum borrowing capacity | $ 300,000,000 | ||||
Short-term debt | 114,290,000 | 147,706,000 | |||
Secured Debt | Ocwen Excess Spread-Collateralized Notes, Series 2019-PLS1 Class A | |||||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | |||||
Debt instrument, face amount | $ 100,000,000 | ||||
Long-term debt | 86,911,000 | 94,395,000 | |||
Excess Spread-Collateralized Notes | Ocwen Excess Spread-Collateralized Notes, Series 2019-PLS1 Class A | |||||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | |||||
Debt instrument, face amount | $ 100,000,000 | ||||
Variable Interest Entity, Primary Beneficiary | Secured Debt | Agency Mortgage Servicing Rights Financing Facility | |||||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | |||||
MSRs | 173,300,000 | 245,500,000 | |||
Unamortized debt issuance costs (Other assets) | 473,000 | 946,000 | |||
Debt service accounts | 100,000 | 100,000 | |||
Short-term debt | 114,290,000 | 147,706,000 | |||
Variable Interest Entity, Primary Beneficiary | Secured Debt | Ocwen Excess Spread-Collateralized Notes, Series 2019-PLS1 Class A | |||||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | |||||
Long-term debt | 86,911,000 | 94,395,000 | |||
Variable Interest Entity, Primary Beneficiary | Excess Spread-Collateralized Notes | Ocwen Excess Spread-Collateralized Notes, Series 2019-PLS1 Class A | |||||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | |||||
MSRs | 141,600,000 | 146,200,000 | |||
Unamortized debt issuance costs (Other assets) | 1,196,000 | 1,207,000 | |||
Debt service accounts | $ 2,900,000 | $ 3,000,000 |
Securitizations and Variable _4
Securitizations and Variable Interest Entities - Schedule of Cash Flows Related to Transfers Accounted for as Sales (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Transfers and Servicing [Abstract] | ||
Proceeds received from securitizations | $ 820,001 | $ 242,960 |
Servicing fees collected | 12,252 | 15,918 |
Purchases of previously transferred assets, net of claims reimbursed | (2,607) | (904) |
Cash flows between transferor and transferee proceeds and payment related to transfers accounted for sales | $ 829,646 | $ 257,974 |
Securitizations and Variable _5
Securitizations and Variable Interest Entities - Schedule of Assets That Relate to Continuing Involvement with Transferred Financial Assets with Servicing Rights and Maximum Exposure to Loss Including the Unpaid Principal Balance (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||
UPB of loans transferred | $ 15,831,062 | $ 14,490,984 |
Maximum exposure to loss | 16,041,758 | 14,742,394 |
Mortgage Servicing Rights - Fair Value | ||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||
Carrying value of assets | 83,582 | 109,581 |
Advances and Match Funded Advances | ||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||
Carrying value of assets | $ 127,114 | $ 141,829 |
Securitizations and Variable _6
Securitizations and Variable Interest Entities - Schedule of Carrying Value of Assets and Liabilities of Consolidated Mortgage-backed Securitization Trusts (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||
Loans held for investment, at fair value (amounts related to VIEs of $22,561 and $23,342) | $ 6,591,382 | $ 6,292,938 |
Other financing liabilities, at fair value (amounts related to VIEs of $21,365 and $22,002) | 623,049 | 972,595 |
Residential Mortgage Backed Securitization Trusts | ||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||
Loans held for investment, at fair value (amounts related to VIEs of $22,561 and $23,342) | 22,561 | 23,342 |
Other financing liabilities, at fair value (amounts related to VIEs of $21,365 and $22,002) | $ 21,365 | $ 22,002 |
Fair Value - Schedule of Fair V
Fair Value - Schedule of Fair Value Assets and Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Loans held for sale | ||||
Loans held for sale, at fair value | $ 203,592 | $ 208,752 | $ 153,140 | $ 176,525 |
Financial liabilities: | ||||
Match funded liabilities | 625,951 | 679,109 | ||
HMBS-related borrowings | 6,323,091 | 6,063,435 | ||
Financing liabilities: | ||||
Other financing liabilities, at fair value (amounts related to VIEs of $21,365 and $22,002) | 623,049 | 972,595 | ||
Total Financing liabilities | 6,946,140 | 7,036,030 | ||
Other secured borrowings: | ||||
Other secured borrowings, net (amounts related to VIEs $200,006 and $240,893) | 797,615 | 1,025,791 | ||
Senior Notes [Abstract] | ||||
Senior notes, net | 311,290 | 311,085 | ||
Mortgage servicing rights | ||||
Mortgage servicing rights, at fair value | 1,050,228 | 1,486,395 | $ 1,400,191 | $ 1,457,149 |
Carrying Value | ||||
Loans held for sale | ||||
Total Loans held for sale | 246,015 | 275,269 | ||
Loans held for investment | 6,591,382 | 6,292,938 | ||
Financing liabilities: | ||||
Total Financing liabilities | 6,946,140 | 7,036,030 | ||
Other secured borrowings: | ||||
Other secured borrowings, net (amounts related to VIEs $200,006 and $240,893) | 797,615 | 1,025,791 | ||
Senior Notes [Abstract] | ||||
Senior notes, net | 311,290 | 311,085 | ||
Fair Value | ||||
Loans held for sale | ||||
Total Loans held for sale | 246,015 | 275,269 | ||
Loans held for investment | 6,591,382 | 6,292,938 | ||
Financing liabilities: | ||||
Total Financing liabilities | 6,946,140 | 7,036,030 | ||
Other secured borrowings: | ||||
Other secured borrowings, net (amounts related to VIEs $200,006 and $240,893) | 758,115 | 1,010,789 | ||
Senior Notes [Abstract] | ||||
Senior notes, net | 253,281 | 270,022 | ||
Level 2 | Carrying Value | ||||
Loans held for sale | ||||
Loans held for sale, at fair value | 203,592 | 208,752 | ||
Corporate bonds | 211 | 441 | ||
Other secured borrowings: | ||||
Senior secured term loan | 191,810 | 322,758 | ||
Senior Notes [Abstract] | ||||
Senior unsecured notes | 21,125 | 21,046 | ||
Senior secured notes | 290,165 | 290,039 | ||
Derivative financial instruments assets (liabilities): | ||||
Interest rate lock commitments | 10,478 | 4,878 | ||
Level 2 | Fair Value | ||||
Loans held for sale | ||||
Loans held for sale, at fair value | 203,592 | 208,752 | ||
Corporate bonds | 211 | 441 | ||
Other secured borrowings: | ||||
Senior secured term loan | 177,546 | 324,643 | ||
Senior Notes [Abstract] | ||||
Senior unsecured notes | 14,902 | 13,821 | ||
Senior secured notes | 238,379 | 256,201 | ||
Derivative financial instruments assets (liabilities): | ||||
Interest rate lock commitments | 10,478 | 4,878 | ||
Level 3 | Carrying Value | ||||
Loans held for sale | ||||
Loans held for sale, at lower of cost or fair value | 42,423 | 66,517 | ||
Loans held for investment | 6,568,821 | 6,269,596 | ||
Advances (including match funded) | 1,024,807 | 1,056,523 | ||
Receivables, net | 235,305 | 201,220 | ||
Mortgage-backed securities, at fair value | 1,670 | 2,075 | ||
Financial liabilities: | ||||
Match funded liabilities | 625,951 | 679,109 | ||
HMBS-related borrowings | 6,323,091 | 6,063,435 | ||
Other secured borrowings: | ||||
Other | 605,805 | 703,033 | ||
Mortgage servicing rights | ||||
Mortgage servicing rights, at fair value | 1,050,228 | 1,486,395 | ||
Level 3 | Fair Value | ||||
Loans held for sale | ||||
Loans held for sale, at lower of cost or fair value | 42,423 | 66,517 | ||
Loans held for investment | 6,568,821 | 6,269,596 | ||
Advances (including match funded) | 1,024,807 | 1,056,523 | ||
Receivables, net | 235,305 | 201,220 | ||
Mortgage-backed securities, at fair value | 1,670 | 2,075 | ||
Financial liabilities: | ||||
Match funded liabilities | 631,247 | 679,507 | ||
HMBS-related borrowings | 6,323,091 | 6,063,435 | ||
Other secured borrowings: | ||||
Other | 580,569 | 686,146 | ||
Mortgage servicing rights | ||||
Mortgage servicing rights, at fair value | 1,050,228 | 1,486,395 | ||
Level 1 | Carrying Value | ||||
Derivative financial instruments assets (liabilities): | ||||
Forward mortgage-backed securities | (235) | (92) | ||
Forward mortgage-backed securities (MBS) - Loans held for sale (a) | (2,999) | (1,121) | ||
Level 1 | Fair Value | ||||
Derivative financial instruments assets (liabilities): | ||||
Forward mortgage-backed securities | (235) | (92) | ||
Forward mortgage-backed securities (MBS) - Loans held for sale (a) | (2,999) | (1,121) | ||
Loans Held for Investment Securitization Trusts | Level 3 | Carrying Value | ||||
Loans held for sale | ||||
Loans held for investment | 22,561 | 23,342 | ||
Loans Held for Investment Securitization Trusts | Level 3 | Fair Value | ||||
Loans held for sale | ||||
Loans held for investment | 22,561 | 23,342 | ||
Financing Liability - MSRs Pledged | ||||
Financing liabilities: | ||||
Other financing liabilities, at fair value (amounts related to VIEs of $21,365 and $22,002) | 601,684 | 950,593 | ||
Financing Liability - MSRs Pledged | Level 3 | Carrying Value | ||||
Financing liabilities: | ||||
Other financing liabilities, at fair value (amounts related to VIEs of $21,365 and $22,002) | 601,684 | 950,593 | ||
Financing Liability - MSRs Pledged | Level 3 | Fair Value | ||||
Financing liabilities: | ||||
Other financing liabilities, at fair value (amounts related to VIEs of $21,365 and $22,002) | 601,684 | 950,593 | ||
Financing Liability Owed to Securitization Investors | Level 3 | Carrying Value | ||||
Financing liabilities: | ||||
Other financing liabilities, at fair value (amounts related to VIEs of $21,365 and $22,002) | 21,365 | 22,002 | ||
Financing Liability Owed to Securitization Investors | Level 3 | Fair Value | ||||
Financing liabilities: | ||||
Other financing liabilities, at fair value (amounts related to VIEs of $21,365 and $22,002) | $ 21,365 | $ 22,002 |
Fair Value - Schedule of Reconc
Fair Value - Schedule of Reconciliation of Changes in Fair Value of Level 3 Assets and Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Jan. 01, 2020 | |
Level 3 | Loans Held for Investment - Reverse Mortgages | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Beginning balance | $ 6,269,596 | $ 5,472,199 | |
Purchases, issuances, sales and settlements | |||
Purchases | 0 | 0 | |
Issuances | 294,932 | 209,264 | |
Sales | 0 | 0 | |
Settlements | (175,095) | (104,630) | |
Loans held for sale, at fair value | 396 | ||
Transfers to loans held for sale, at fair value | (578) | ||
Transfers to other assets | (265) | (119) | |
Transfers to receivables, net | (129) | (68) | |
Purchases, issuances, sales and settlements, total | 165,903 | 104,051 | |
Total realized and unrealized gains and (losses): | |||
Change in fair value | 133,322 | 150,667 | |
Calls and other | 0 | 0 | |
Total realized and unrealized gains (losses) included in earnings | 133,322 | 150,667 | |
Transfers in and / or out of Level 3 | 0 | 0 | |
Ending balance | 6,568,821 | 5,726,917 | |
Level 3 | HMBS-Related Borrowings | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Beginning balance | (6,063,434) | (5,380,448) | |
Purchases, issuances, sales and settlements | |||
Purchases | 0 | 0 | |
Issuances | (312,249) | (210,563) | |
Sales | 0 | 0 | |
Settlements | 172,429 | 102,389 | |
Loans held for sale, at fair value | 0 | ||
Transfers to loans held for sale, at fair value | 0 | ||
Transfers to other assets | 0 | 0 | |
Transfers to receivables, net | 0 | 0 | |
Purchases, issuances, sales and settlements, total | (139,820) | (108,174) | |
Total realized and unrealized gains and (losses): | |||
Change in fair value | (119,837) | (126,066) | |
Calls and other | 0 | 0 | |
Total realized and unrealized gains (losses) included in earnings | (119,837) | (126,066) | |
Transfers in and / or out of Level 3 | 0 | 0 | |
Ending balance | (6,323,091) | (5,614,688) | |
Level 3 | Loans Held for Inv. - Restricted for Securitization Investors | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Beginning balance | 23,342 | 26,520 | |
Purchases, issuances, sales and settlements | |||
Purchases | 0 | 0 | |
Issuances | 0 | 0 | |
Sales | 0 | 0 | |
Settlements | (781) | (283) | |
Loans held for sale, at fair value | 0 | ||
Transfers to loans held for sale, at fair value | 0 | ||
Transfers to other assets | 0 | 0 | |
Transfers to receivables, net | 0 | 0 | |
Purchases, issuances, sales and settlements, total | (781) | (283) | |
Total realized and unrealized gains and (losses): | |||
Change in fair value | 0 | 0 | |
Calls and other | 0 | 0 | |
Total realized and unrealized gains (losses) included in earnings | 0 | 0 | |
Transfers in and / or out of Level 3 | 0 | 0 | |
Ending balance | 22,561 | 26,237 | |
Level 3 | Financing Liability Owed to Securitization Investors | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Beginning balance | (22,002) | (24,815) | |
Purchases, issuances, sales and settlements | |||
Purchases | 0 | 0 | |
Issuances | 0 | 0 | |
Sales | 0 | 0 | |
Settlements | 637 | 253 | |
Loans held for sale, at fair value | 0 | ||
Transfers to loans held for sale, at fair value | 0 | ||
Transfers to other assets | 0 | 0 | |
Transfers to receivables, net | 0 | 0 | |
Purchases, issuances, sales and settlements, total | 637 | 253 | |
Total realized and unrealized gains and (losses): | |||
Change in fair value | 0 | 0 | |
Calls and other | 0 | 0 | |
Total realized and unrealized gains (losses) included in earnings | 0 | 0 | |
Transfers in and / or out of Level 3 | 0 | 0 | |
Ending balance | (21,365) | (24,562) | |
Level 3 | Loans Held for Sale - Fair Value | |||
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 | ||
Sales | 0 | ||
Settlements | 0 | ||
Transfers to loans held for sale, at fair value | 0 | ||
Transfers to other assets | 0 | ||
Transfers to receivables, net | 0 | ||
Purchases, issuances, sales and settlements, total | 0 | ||
Total realized and unrealized gains and (losses): | |||
Change in fair value | 0 | ||
Calls and other | 0 | ||
Total realized and unrealized gains (losses) included in earnings | 0 | ||
Transfers in and / or out of Level 3 | 25,582 | ||
Ending balance | 25,582 | ||
Level 3 | Mortgage-Backed Securities | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Beginning balance | 2,075 | 1,502 | |
Purchases, issuances, sales and settlements | |||
Purchases | 0 | 0 | |
Issuances | 0 | 0 | |
Sales | 0 | 0 | |
Settlements | 0 | 0 | |
Loans held for sale, at fair value | 0 | ||
Transfers to loans held for sale, at fair value | 0 | ||
Transfers to other assets | 0 | 0 | |
Transfers to receivables, net | 0 | 0 | |
Purchases, issuances, sales and settlements, total | 0 | 0 | |
Total realized and unrealized gains and (losses): | |||
Change in fair value | (405) | 284 | |
Calls and other | 0 | 0 | |
Total realized and unrealized gains (losses) included in earnings | (405) | 284 | |
Transfers in and / or out of Level 3 | 0 | 0 | |
Ending balance | 1,670 | 1,786 | |
Level 3 | IRLCs | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Beginning balance | 0 | 678 | |
Purchases, issuances, sales and settlements | |||
Purchases | 0 | 0 | |
Issuances | 0 | 0 | |
Sales | 0 | 0 | |
Settlements | 0 | 0 | |
Loans held for sale, at fair value | 0 | ||
Transfers to loans held for sale, at fair value | 0 | ||
Transfers to other assets | 0 | 0 | |
Transfers to receivables, net | 0 | 0 | |
Purchases, issuances, sales and settlements, total | 0 | 0 | |
Total realized and unrealized gains and (losses): | |||
Change in fair value | 0 | (402) | |
Calls and other | 0 | 0 | |
Total realized and unrealized gains (losses) included in earnings | 0 | (402) | |
Transfers in and / or out of Level 3 | 10,478 | 0 | |
Ending balance | $ 10,478 | $ 276 | |
Accounting Standards Update 2019-04 | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Cumulative effect of fair value election | $ (47,000) | ||
Accounting Standards Update 2019-04 | Level 3 | Loans Held for Investment - Reverse Mortgages | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Cumulative effect of fair value election | 47,038 | ||
Accounting Standards Update 2019-04 | Level 3 | HMBS-Related Borrowings | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Cumulative effect of fair value election | 0 | ||
Accounting Standards Update 2019-04 | Level 3 | Loans Held for Inv. - Restricted for Securitization Investors | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Cumulative effect of fair value election | 0 | ||
Accounting Standards Update 2019-04 | Level 3 | Financing Liability Owed to Securitization Investors | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Cumulative effect of fair value election | 0 | ||
Accounting Standards Update 2019-04 | Level 3 | Loans Held for Sale - Fair Value | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Cumulative effect of fair value election | 0 | ||
Accounting Standards Update 2019-04 | Level 3 | Mortgage-Backed Securities | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Cumulative effect of fair value election | $ 0 |
Fair Value - Schedule of Signif
Fair Value - Schedule of Significant Assumptions used in Valuation (Details) | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Loans Held for Investment Reverse Mortgages | Measurement Input, Expected Term | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
Measurement input | 6.50 | 6 |
Loans Held for Investment Reverse Mortgages | Measurement Input, Prepayment Rate | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
Measurement input | 0.132 | 0.146 |
Loans Held for Investment Reverse Mortgages | Measurement Input, Discount Rate | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
Measurement input | 0.020 | 0.028 |
Loans Held for Investment Reverse Mortgages | Minimum | Measurement Input, Expected Term | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
Measurement input | 1.20 | 2.40 |
Loans Held for Investment Reverse Mortgages | Minimum | Measurement Input, Prepayment Rate | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
Measurement input | 0.080 | 0.078 |
Loans Held for Investment Reverse Mortgages | Maximum | Measurement Input, Expected Term | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
Measurement input | 8.40 | 7.80 |
Loans Held for Investment Reverse Mortgages | Maximum | Measurement Input, Prepayment Rate | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
Measurement input | 0.243 | 0.283 |
Fair Value Agency Mortgage Servicing Rights | Measurement Input, Prepayment Rate | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
Measurement input | 0.175 | 0.117 |
Fair Value Agency Mortgage Servicing Rights | Measurement Input, Default Rate | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
Measurement input | 0.048 | 0.032 |
Fair Value Agency Mortgage Servicing Rights | Measurement Input, Discount Rate | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
Measurement input | 0.094 | 0.093 |
Fair Value Agency Mortgage Servicing Rights | Measurement Input, Weighted Average Cost to Service | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
Measurement input | 93 | 85 |
Fair Value Non-Agency Mortgage Servicing Rights | Measurement Input, Prepayment Rate | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
Measurement input | 0.122 | 0.122 |
Fair Value Non-Agency Mortgage Servicing Rights | Measurement Input, Default Rate | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
Measurement input | 0.257 | 0.273 |
Fair Value Non-Agency Mortgage Servicing Rights | Measurement Input, Discount Rate | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
Measurement input | 0.113 | 0.113 |
Fair Value Non-Agency Mortgage Servicing Rights | Measurement Input, Weighted Average Cost to Service | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
Measurement input | 278 | 277 |
HMBS-Related Borrowings | Measurement Input, Expected Term | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
Measurement input | 6.50 | 6 |
HMBS-Related Borrowings | Measurement Input, Prepayment Rate | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
Measurement input | 0.132 | 0.146 |
HMBS-Related Borrowings | Measurement Input, Discount Rate | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
Measurement input | 0.018 | 0.027 |
HMBS-Related Borrowings | Minimum | Measurement Input, Expected Term | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
Measurement input | 1.20 | 2.40 |
HMBS-Related Borrowings | Minimum | Measurement Input, Prepayment Rate | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
Measurement input | 0.080 | 0.078 |
HMBS-Related Borrowings | Maximum | Measurement Input, Expected Term | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
Measurement input | 8.40 | 7.80 |
HMBS-Related Borrowings | Maximum | Measurement Input, Prepayment Rate | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
Measurement input | 0.243 | 0.283 |
Mortgage Servicing Rights Pledged | Measurement Input, Prepayment Rate | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
Measurement input | 0.123 | 0.119 |
Mortgage Servicing Rights Pledged | Measurement Input, Default Rate | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
Measurement input | 0.277 | 0.203 |
Mortgage Servicing Rights Pledged | Measurement Input, Discount Rate | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
Measurement input | 0.114 | 0.107 |
Mortgage Servicing Rights Pledged | Measurement Input, Weighted Average Cost to Service | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
Measurement input | 292 | 223 |
5-Year Swap Rate | Fair Value Non-Agency Mortgage Servicing Rights | Measurement Input, Advance Financing Cost, Basis Spread on Variable Rate | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
Measurement input | 0.02 | 0.0275 |
5-Year Swap Rate | Fair Value Non-Agency Mortgage Servicing Rights | Measurement Input, Interest Rate for Computing Float Earnings, Basis Spread on Variable Rate | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
Measurement input | 0.005 | 0.005 |
5-Year Swap Rate | Mortgage Servicing Rights Pledged | Measurement Input, Advance Financing Cost, Basis Spread on Variable Rate | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
Measurement input | 0.0200 | 0.0275 |
5-Year Swap Rate | Mortgage Servicing Rights Pledged | Measurement Input, Interest Rate for Computing Float Earnings, Basis Spread on Variable Rate | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
Measurement input | 0.005 | 0.005 |
Fair Value - Schedule of Estima
Fair Value - Schedule of Estimated Change in Fair Value of MSRs (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Transfers and Servicing [Abstract] | |
Weighted average prepayment speeds, 10% | $ (52,979) |
Weighted average prepayment speeds, 20% | (100,320) |
Weighted average discount rate, 10% | (14,339) |
Weighted average discount rate, 20% | $ (27,843) |
Loans Held for Sale - Schedule
Loans Held for Sale - Schedule of Loans Held for Sale Fair Value (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Movement In Loans Held For Sale At Fair Value [Roll Forward] | ||
Beginning balance | $ 208,752 | $ 176,525 |
Originations and purchases (2) | 831,474 | 219,867 |
Proceeds from sales | (805,202) | (235,895) |
Principal collections | (6,833) | (5,516) |
Loans held for investment, at fair value | 578 | 396 |
Receivables, net | (31,302) | (581) |
REO (Other assets) | (768) | (696) |
Gain on sale of loans | 6,418 | 8,191 |
Decrease in fair value of loans | (1,642) | (228) |
Other | 2,117 | (8,923) |
Ending balance | $ 203,592 | $ 153,140 |
Loans Held for Sale - Schedul_2
Loans Held for Sale - Schedule of Loans Held for Sale Fair Value (Footnote) (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Increase (decrease) in fair value of loans held for sale | $ (9,400) | $ (7,800) | ||
Loans held for sale, at fair value | 203,592 | $ 153,140 | $ 208,752 | $ 176,525 |
Ginnie Mae Loans | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loans held for sale, at fair value | $ 25,582 | $ 0 |
Loans Held for Sale - Schedul_3
Loans Held for Sale - Schedule of Loans Held for Sale at Lower Cost or Fair Value, Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Movement In Loans Held For Sale At Fair Value [Roll Forward] | ||
Beginning balance | $ 66,517 | $ 66,097 |
Purchases (1) | 0 | 84,315 |
Proceeds from sales | (30,492) | (62,135) |
Principal collections | (651) | (1,776) |
Receivables, net | 266 | (27,411) |
REO (Other assets) | 0 | (1,095) |
Gain on sale of loans | 1,842 | 551 |
Decrease in valuation allowance | (138) | 706 |
Other | 5,079 | 10,295 |
Ending balance | $ 42,423 | $ 69,547 |
Loans Held for Sale - Schedul_4
Loans Held for Sale - Schedule of Loans Held for Sale at Lower Cost or Fair Value Activity (Footnote) (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Mar. 31, 2019 |
Ginnie Mae Loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans repurchase obligation | $ 29.3 | $ 42.7 |
Loans Held for Sale - Schedule
Loans Held for Sale - Schedule of Changes in Valuation Allowance (Details) - Valuation Allowance for Loans Held for Sale - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Beginning balance | $ 6,643 | $ 11,569 |
Provision | 570 | 642 |
Transfer from Liability for indemnification obligations (Other liabilities) | 25 | 67 |
Sales of loans | (457) | (1,415) |
Ending balance | $ 6,781 | $ 10,863 |
Loans Held for Sale - Schedul_5
Loans Held for Sale - Schedule of Gains on Loans Held for Sale, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
MSRs retained on transfers of forward mortgage loans | $ 6,561 | $ 828 |
Gain on sales of loans, net | 14,821 | 11,810 |
Change in fair value of IRLCs | 5,714 | (341) |
Change in fair value of loans held for sale | 159 | (142) |
Loss on economic hedge instruments | (7,192) | (2,270) |
Other | (171) | (75) |
Gain on loans held for sale, net | 13,331 | 8,982 |
Gain on Sale of Repurchased Ginnie Mae Loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gain on sales of loans, net | 1,842 | 538 |
Gain on Sale of Forward Mortgage Loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gain on sales of loans, net | $ 6,418 | $ 10,444 |
Advances - Schedule of Advances
Advances - Schedule of Advances Paid on Behalf of Borrowers or on Foreclosed Properties (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Advances On Behalf of Borrowers [Line Items] | ||||
Advances, gross | $ 1,032,180 | $ 1,066,448 | ||
Allowance for losses | (7,373) | (9,925) | $ (23,135) | $ (23,259) |
Advances, net | 1,024,807 | 1,056,523 | ||
Principal and Interest | ||||
Advances On Behalf of Borrowers [Line Items] | ||||
Advances, gross | 426,308 | 414,846 | ||
Taxes and Insurance | ||||
Advances On Behalf of Borrowers [Line Items] | ||||
Advances, gross | 383,829 | 422,383 | ||
Foreclosures, Bankruptcy and Other | ||||
Advances On Behalf of Borrowers [Line Items] | ||||
Advances, gross | $ 222,043 | $ 229,219 |
Advances - Schedule of Activity
Advances - Schedule of Activity in Advances (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Advances [Roll Forward] | ||
Beginning balance | $ 1,056,523 | $ 1,186,676 |
New advances | 243,545 | 105,995 |
Sales of advances | (228) | (707) |
Collections of advances, charge-offs and other, net | (277,585) | (198,008) |
Net decrease in allowance for losses | (2,552) | (124) |
Ending balance | $ 1,024,807 | $ 1,094,080 |
Advances - Schedule of Changes
Advances - Schedule of Changes in Allowance for Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Sep. 30, 2019 | |
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Beginning balance | $ 9,925 | $ 23,259 | |
Provision (reversal) | (761) | 1,762 | |
Net charge-offs and other | (1,791) | (1,886) | |
Ending balance | 7,373 | 23,135 | |
Allowance for losses | $ 7,373 | $ 23,135 | |
Sold Advances | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Allowance for losses | $ 18,000 |
Mortgage Servicing - Schedule o
Mortgage Servicing - Schedule of Activity Related to MSRs - Fair Value Measurement Method (Details) - USD ($) $ in Thousands | Feb. 20, 2020 | Mar. 31, 2020 | Mar. 31, 2019 |
Servicing Asset at Fair Value, Amount [Roll Forward] | |||
Beginning balance | $ 1,486,395 | $ 1,457,149 | |
Sales and other transfers | (56) | (567) | |
Recognized on the sale of residential mortgage loans | 5,930 | 1,407 | |
Purchase of MSRs | 31,490 | 54,513 | |
Servicing transfers and adjustments | (264,523) | (3,313) | |
Changes in fair value: | |||
Changes in valuation inputs or other assumptions | (156,140) | (64,273) | |
Realization of expected future cash flows and other changes | (52,868) | (44,725) | |
Ending balance | 1,050,228 | 1,400,191 | |
Fair Value Agency Mortgage Servicing Rights | |||
Servicing Asset at Fair Value, Amount [Roll Forward] | |||
Beginning balance | 714,006 | 865,587 | |
Sales and other transfers | 0 | (435) | |
Recognized on the sale of residential mortgage loans | 5,930 | 1,407 | |
Purchase of MSRs | 31,490 | 54,513 | |
Servicing transfers and adjustments | (263,630) | 0 | |
Changes in fair value: | |||
Changes in valuation inputs or other assumptions | (166,532) | (64,117) | |
Realization of expected future cash flows and other changes | (27,037) | (31,263) | |
Ending balance | 294,227 | 825,692 | |
Fair Value Non-Agency Mortgage Servicing Rights | |||
Servicing Asset at Fair Value, Amount [Roll Forward] | |||
Beginning balance | 772,389 | 591,562 | |
Sales and other transfers | (56) | (132) | |
Recognized on the sale of residential mortgage loans | 0 | 0 | |
Purchase of MSRs | 0 | 0 | |
Servicing transfers and adjustments | (893) | (3,313) | |
Changes in fair value: | |||
Changes in valuation inputs or other assumptions | 10,392 | (156) | |
Realization of expected future cash flows and other changes | (25,831) | (13,462) | |
Ending balance | 756,001 | $ 574,499 | |
New Residential Investment Corp | |||
Servicing Asset at Fair Value, Amount [Roll Forward] | |||
Beginning balance | 915,148 | ||
Servicing transfers and adjustments | $ 263,700 | ||
Changes in fair value: | |||
Ending balance | $ 591,700 |
Mortgage Servicing - Schedule_2
Mortgage Servicing - Schedule of Composition of Servicing and Subservicing Portfolios by Type of Property Serviced (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 |
Servicing Assets at Fair Value [Line Items] | |||
Servicing | $ 70,718,538 | $ 70,428,208 | $ 69,616,987 |
Reverse mortgage loan servicing | 6,432,003 | 6,229,724 | 5,671,103 |
Subservicing | 17,676,677 | 17,120,905 | 49,805,407 |
NRZ | 113,934,122 | 118,587,594 | 125,987,243 |
Assets serviced | 208,761,340 | $ 212,366,431 | $ 251,080,740 |
Third-party Consents Received And MSR Transferred | |||
Servicing Assets at Fair Value [Line Items] | |||
NRZ | 55,600,000 | ||
New Residential Investment Corp | |||
Servicing Assets at Fair Value [Line Items] | |||
Assets serviced | $ 40,000,000 |
Mortgage Servicing - Narrative
Mortgage Servicing - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Concentration Risk [Line Items] | |||
UPB of loans acquired | $ 2,900 | $ 4,900 | |
UPB of MSRs sold | 17.6 | 99.4 | |
Float balances | $ 1,900 | $ 1,800 | $ 1,700 |
Servicing Portfolio | New Residential Investment Corp | Customer Concentration Risk | |||
Concentration Risk [Line Items] | |||
Concentration risk (percent) | 19.00% |
Mortgage Servicing - Schedule_3
Mortgage Servicing - Schedule of Components of Servicing and Subservicing Fees (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Transfers and Servicing [Abstract] | ||
Servicing | $ 55,408 | $ 53,345 |
Subservicing | 5,190 | 6,207 |
NRZ | 119,669 | 155,847 |
Servicing and Subservicing fees, total | 180,267 | 215,399 |
Late charges | 14,639 | 15,439 |
Custodial accounts (float earnings) | 6,141 | 11,934 |
Loan collection fees | 4,256 | 4,349 |
Home Affordable Modification Program (HAMP) fees | 408 | 1,777 |
Other, net | 5,772 | 7,881 |
Fees, total | $ 211,483 | $ 256,779 |
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 | 3 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Servicing Liabilities at Fair Value [Line Items] | ||||
MSRs, at fair value | $ 1,050,228 | $ 1,400,191 | $ 1,486,395 | $ 1,457,149 |
Due from NRZ | 1,601 | 9,197 | ||
Other financing liabilities, at fair value (amounts related to VIEs of $21,365 and $22,002) | 623,049 | 972,595 | ||
Interest expense | 6,594 | 43,956 | ||
PHH MSR Agreements | ||||
Servicing Liabilities at Fair Value [Line Items] | ||||
Changes in fair value | 40,720 | 33,096 | ||
Runoff and settlement | 7,492 | 17,774 | ||
Financing Liability - MSRs Pledged | ||||
Servicing Liabilities at Fair Value [Line Items] | ||||
Other financing liabilities, at fair value (amounts related to VIEs of $21,365 and $22,002) | 601,684 | 950,593 | ||
NRZ | ||||
Servicing Liabilities at Fair Value [Line Items] | ||||
MSRs, at fair value | 591,700 | 915,148 | ||
Due from NRZ | 24,232 | 33,364 | ||
Due to NRZ | 98,555 | 63,596 | ||
Servicing fees collected on behalf of NRZ | 119,669 | 155,847 | ||
Less: Subservicing fee retained by Ocwen | 29,331 | 37,407 | ||
Net servicing fees remitted to NRZ | 90,338 | 118,440 | ||
Changes in fair value | 30,697 | 26,237 | ||
Runoff and settlement | 50,427 | 50,129 | ||
Other | 2,620 | (1,882) | ||
Interest expense | 6,594 | 43,956 | ||
NRZ | Sale And Transfers Of Mortgage Servicing Rights | ||||
Servicing Liabilities at Fair Value [Line Items] | ||||
Due from NRZ | 22,631 | 24,167 | ||
NRZ | Advance Funding, Subservicing Fees and Reimbursable Expenses | ||||
Servicing Liabilities at Fair Value [Line Items] | ||||
Due from NRZ | 1,601 | 9,197 | ||
NRZ | Original Rights to MSRs Agreements | ||||
Servicing Liabilities at Fair Value [Line Items] | ||||
Other financing liabilities, at fair value (amounts related to VIEs of $21,365 and $22,002) | 591,705 | 603,046 | ||
Changes in fair value | (9,120) | 121 | ||
Runoff and settlement | 17,793 | 9,035 | ||
NRZ | 2017 Agreements and New RMSR Agreements | ||||
Servicing Liabilities at Fair Value [Line Items] | ||||
Other financing liabilities, at fair value (amounts related to VIEs of $21,365 and $22,002) | 10,000 | 35,445 | ||
Changes in fair value | (903) | (6,980) | ||
Runoff and settlement | 25,142 | $ 23,320 | ||
NRZ | PHH MSR Agreements | ||||
Servicing Liabilities at Fair Value [Line Items] | ||||
Other financing liabilities, at fair value (amounts related to VIEs of $21,365 and $22,002) | $ 0 | $ 312,102 |
Rights to MSRs - Schedule of _2
Rights to MSRs - Schedule of Assets, Liabilities, Servicing and Subservicing Fees Related to NRZ Agreements (Footnote) (Details) $ in Millions | 3 Months Ended |
Jun. 30, 2020USD ($) | |
Forecast | |
Servicing Liabilities at Fair Value [Line Items] | |
Reduction in the financing liability and interest expense | $ 10 |
Rights to MSRs - Schedule of Ac
Rights to MSRs - Schedule of Activity Related to Rights to Mortgage Servicing Rights (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Servicing Assets at Fair Value [Line Items] | ||
Beginning balance, Financing Liability | $ 950,593 | $ 1,032,856 |
Additions | 0 | 577 |
Sales | (56) | (567) |
Derecognition of MSRs pledged financing liability | 263,344 | 0 |
Ending balance, Financing Liability | 601,684 | 951,216 |
Original Rights to MSRs Agreements | ||
Servicing Assets at Fair Value [Line Items] | ||
Beginning balance, Financing Liability | 603,046 | 436,511 |
Changes in fair value | (9,120) | 121 |
Runoff and settlement | (17,793) | (9,035) |
Calls | (2,668) | (3,269) |
Ending balance, Financing Liability | 591,705 | 424,086 |
Two Thousand Seventeen Agreements | ||
Servicing Assets at Fair Value [Line Items] | ||
Beginning balance, Financing Liability | 35,445 | 138,854 |
Changes in fair value | 903 | 6,980 |
Runoff and settlement | (25,142) | (23,320) |
Calls | (1,227) | (2,582) |
Ending balance, Financing Liability | 9,979 | 119,932 |
PHH MSR Agreements | ||
Servicing Assets at Fair Value [Line Items] | ||
Beginning balance, Financing Liability | 312,102 | 457,491 |
Additions | 0 | 577 |
Sales | (226) | |
Changes in fair value | (40,720) | (33,096) |
Runoff and settlement | (7,492) | (17,774) |
Derecognition of MSRs pledged financing liability | (263,664) | |
Ending balance, Financing Liability | $ 0 | $ 407,198 |
Rights to MSRs - Narrative (Det
Rights to MSRs - Narrative (Details) $ in Thousands | Oct. 04, 2018 | Jun. 16, 2017 | Jan. 31, 2018USD ($) | Sep. 30, 2017USD ($) | Mar. 31, 2020USD ($)dayloanmonth | Mar. 31, 2019USD ($) | Feb. 20, 2020USD ($) | Dec. 31, 2019USD ($) |
Servicing Assets at Fair Value [Line Items] | ||||||||
Proceeds from sale of mortgage servicing rights accounted for as financing | $ 279,600 | $ 54,600 | $ 0 | $ 577 | ||||
UPB of rights to MSRs sold | 73,600,000 | |||||||
Initial term to subservice mortgage servicing rights (years) | 3 years | |||||||
Servicing fee revenues | $ 119,669 | $ 155,847 | ||||||
Percentage of mortgage loans servicing that can be terminated | 25.00% | |||||||
Renewal term (years) | 1 year | |||||||
Required notice of non-renewal period (number of months) | month | 9 | |||||||
New Residential Investment Corp | ||||||||
Servicing Assets at Fair Value [Line Items] | ||||||||
Term of extended subservicing agreement (months) | 3 months | |||||||
UPB of rights to MSRs sold | $ 113,900,000 | |||||||
New Residential Investment Corp | ||||||||
Servicing Assets at Fair Value [Line Items] | ||||||||
Required notice of non-renewal period (number of days) | day | 180 | |||||||
New Residential Investment Corp | Unrelated Party | ||||||||
Servicing Assets at Fair Value [Line Items] | ||||||||
Unpaid principal balance on servicing assets acquired | $ 6,200,000 | $ 6,600,000 | ||||||
PHH Corporation | ||||||||
Servicing Assets at Fair Value [Line Items] | ||||||||
Number of loans serviced under subservicing arrangement | loan | 269,403 | |||||||
Servicing fee revenues | $ 3,900 | |||||||
PHH Corporation | New Residential Investment Corp | ||||||||
Servicing Assets at Fair Value [Line Items] | ||||||||
UPB of rights to MSRs sold | 33,800,000 | $ 40,000,000 | ||||||
Servicing Portfolio | Customer Concentration Risk | New Residential Investment Corp | ||||||||
Servicing Assets at Fair Value [Line Items] | ||||||||
Percentage of initial mortgage loans | 25.00% | |||||||
Ocwen | New Residential Investment Corp | ||||||||
Servicing Assets at Fair Value [Line Items] | ||||||||
UPB of rights to MSRs sold | $ 17,900,000 |
Receivables - Schedule of Recei
Receivables - Schedule of Receivables (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Receivables [Abstract] | ||
Government-insured loan claims, net | $ 120,410 | $ 122,557 |
Sales and transfers of MSRs | 22,631 | 24,167 |
Advance funding, subservicing fees and reimbursable expenses | 1,601 | 9,197 |
Reimbursable expenses | 9,325 | 13,052 |
Due from custodial accounts | 11,306 | 27,175 |
Other | 3,665 | 4,970 |
Servicing receivable, total | 168,938 | 201,118 |
Income taxes receivable | 102,566 | 37,888 |
Other receivables | 23,064 | 20,086 |
Other receivables, gross | 294,568 | 259,092 |
Allowance for losses | (59,263) | (57,872) |
Receivables, net | $ 235,305 | $ 201,220 |
Receivables - Narrative (Detail
Receivables - Narrative (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Income tax (benefit) expense | $ (61,856) | $ 3,410 | |
Servicing | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Allowance for financing notes | $ 58,100 | $ 56,900 |
Receivables - Schedule of Chang
Receivables - Schedule of Changes in allowance of Government-Insured Loan Claims (Details) - Government Insured Loans Claims - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Beginning balance | $ 56,868 | $ 52,497 |
Provision | 5,072 | 7,247 |
Charge-offs and other, net | (3,837) | (8,464) |
Ending balance | $ 58,103 | $ 51,280 |
Other Assets - Schedule of Othe
Other Assets - Schedule of Other Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Other Assets [Abstract] | ||
Contingent loan repurchase asset | $ 393,395 | $ 492,900 |
Prepaid expenses | 35,514 | 21,996 |
Prepaid representation, warranty and indemnification claims - Agency MSR sale | 15,173 | 15,173 |
Derivatives, at fair value | 15,830 | 6,007 |
REO | 7,907 | 8,556 |
Prepaid lender fees, net | 6,464 | 8,647 |
Security deposits | 2,150 | 2,163 |
Mortgage backed securities, at fair value | 1,670 | 2,075 |
Deferred tax asset, net | 1,647 | 2,169 |
Interest-earning time deposits | 371 | 390 |
Other | 4,004 | 3,164 |
Other assets | $ 484,125 | $ 563,240 |
Borrowings - Schedule of Match
Borrowings - Schedule of Match Funded Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | Aug. 14, 2019 |
Debt Instrument [Line Items] | |||
Available borrowing capacity | $ 0 | ||
Advance match funded liabilities (related to VIEs) | $ 625,951 | $ 679,109 | |
Advance Receivables Backed Notes - Series 2015-VF5 | |||
Debt Instrument [Line Items] | |||
Weighted average interest rate | 1.36% | ||
Advance Receivables Backed Notes, Series 2015-VF1 | |||
Debt Instrument [Line Items] | |||
Weighted average interest rate | 1.57% | ||
Match Funded Liabilties | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | $ 104,049 | ||
Weighted average interest rate | 2.69% | 2.81% | |
Advance match funded liabilities (related to VIEs) | $ 625,951 | $ 679,109 | |
Total Ocwen Master Advance Receivables Trust (OMART) | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | $ 59,021 | ||
Weighted average interest rate | 2.68% | 2.79% | |
Advance match funded liabilities (related to VIEs) | $ 610,979 | $ 660,555 | |
Total Ocwen Master Advance Receivables Trust (OMART) | Advance Receivables Backed Notes - Series 2015-VF5 | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | $ 59,021 | ||
Weighted average interest rate | 3.05% | 3.36% | |
Advance match funded liabilities (related to VIEs) | $ 140,979 | $ 190,555 | |
Total Ocwen Master Advance Receivables Trust (OMART) | Advance Receivables Backed Notes, Series 2019-T1 | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | $ 0 | ||
Weighted average interest rate | 2.62% | 2.62% | |
Advance match funded liabilities (related to VIEs) | $ 185,000 | $ 185,000 | $ 185,000 |
Total Ocwen Master Advance Receivables Trust (OMART) | Advance Receivables Backed Notes, Series 2019-T2 | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | $ 0 | ||
Weighted average interest rate | 2.53% | 2.53% | |
Advance match funded liabilities (related to VIEs) | $ 285,000 | $ 285,000 | $ 285,000 |
Total Ocwen Freddie Advance Funding Facility (OFAF) | Advance Receivables Backed Notes, Series 2015-VF1 | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | $ 45,028 | ||
Weighted average interest rate | 3.26% | 3.53% | |
Advance match funded liabilities (related to VIEs) | $ 14,972 | $ 18,554 |
Borrowings - Schedule of Matc_2
Borrowings - Schedule of Match Funded Liabilities (Footnote) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | Aug. 14, 2019 | |
Debt Instrument [Line Items] | |||
Available borrowing capacity that could be used based on amount of eligible collateral pledged | $ 0 | ||
Match funded liabilities | 625,951,000 | $ 679,109,000 | |
Advance Receivables Backed Notes - Series 2015-VF5 | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 200,000,000 | ||
Weighted average interest rate | 1.36% | ||
Series 2016 and 2018 Term Notes | |||
Debt Instrument [Line Items] | |||
Total borrowing capacity | $ 470,000,000 | ||
Series 2016 and 2018 Term Notes | Minimum | |||
Debt Instrument [Line Items] | |||
Weighted average interest rate | 2.57% | ||
Weighted average interest rate | 2.4187% | ||
Series 2016 and 2018 Term Notes | Maximum | |||
Debt Instrument [Line Items] | |||
Weighted average interest rate | 4.4358% | ||
Advance Receivables Backed Notes, Series 2015-VF1 | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 60,000,000 | ||
Weighted average interest rate | 1.57% | ||
Residential Asset Securitization Trust | Minimum | |||
Debt Instrument [Line Items] | |||
Weighted average interest rate | 4.25% | ||
Residential Asset Securitization Trust | Maximum | |||
Debt Instrument [Line Items] | |||
Weighted average interest rate | 5.75% | ||
London Interbank Offered Rate (LIBOR) | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 0.99% | 1.76% | |
Total Ocwen Master Advance Receivables Trust (OMART) | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity that could be used based on amount of eligible collateral pledged | $ 59,021,000 | ||
Match funded liabilities | $ 610,979,000 | $ 660,555,000 | |
Weighted average interest rate | 2.68% | 2.79% | |
Total Ocwen Master Advance Receivables Trust (OMART) | Advance Receivables Backed Notes - Series 2015-VF5 | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity that could be used based on amount of eligible collateral pledged | $ 59,021,000 | ||
Match funded liabilities | $ 140,979,000 | $ 190,555,000 | |
Weighted average interest rate | 3.05% | 3.36% | |
Total Ocwen Master Advance Receivables Trust (OMART) | Advance Receivables Backed Notes, Series 2019-T1 | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity that could be used based on amount of eligible collateral pledged | $ 0 | ||
Match funded liabilities | $ 185,000,000 | $ 185,000,000 | $ 185,000,000 |
Weighted average interest rate | 2.62% | 2.62% | |
Total Ocwen Master Advance Receivables Trust (OMART) | Advance Receivables Backed Notes, Series 2019-T2 | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity that could be used based on amount of eligible collateral pledged | $ 0 | ||
Match funded liabilities | $ 285,000,000 | $ 285,000,000 | $ 285,000,000 |
Weighted average interest rate | 2.53% | 2.53% |
Borrowings - Narrative (Details
Borrowings - Narrative (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | ||
UPB of rights to MSRs sold | $ 73,600,000,000 | |
Covenant compliance, consolidated tangible net worth at period end | 200,000,000 | |
NRZ | ||
Debt Instrument [Line Items] | ||
UPB of rights to MSRs sold | 113,900,000,000 | |
Outstanding servicing advances | $ 668,500,000 | $ 704,200,000 |
Senior Notes | 8.375% Senior Secured Notes Due In 2022 | ||
Debt Instrument [Line Items] | ||
Percentage of principal amount, repurchase price | 101.00% | |
Secured Debt | 8.375% Senior Secured Notes Due In 2022 | ||
Debt Instrument [Line Items] | ||
Interest rate (as a percent) | 8.375% | |
Minimum | ||
Debt Instrument [Line Items] | ||
Restrictive liquidity requirements | $ 100,000,000 | |
Minimum | Senior Notes | 8.375% Senior Secured Notes Due In 2022 | ||
Debt Instrument [Line Items] | ||
Redemption period, notice | 30 days | |
Maximum | Senior Notes | 8.375% Senior Secured Notes Due In 2022 | ||
Debt Instrument [Line Items] | ||
Redemption period, notice | 60 days | |
Senior Secured Term Loan | ||
Debt Instrument [Line Items] | ||
Percentage of loan to value | 40.00% | |
Minimum unencumbered asset coverage ratio, period one | 200.00% | |
Minimum unencumbered asset coverage ratio, period two | 225.00% | |
Minimum unrestricted cash | $ 125,000,000 | |
Ocwen | NRZ | ||
Debt Instrument [Line Items] | ||
UPB of rights to MSRs sold | $ 17,900,000,000 |
Borrowings - Schedule of Financ
Borrowings - Schedule of Financing Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | ||
HMBS-related borrowings | $ 6,323,091 | $ 6,063,435 |
Other financing liabilities, at fair value (amounts related to VIEs of $21,365 and $22,002) | 623,049 | 972,595 |
Total Financing liabilities | 6,946,140 | 7,036,030 |
Financing liability – MSRs pledged | ||
Debt Instrument [Line Items] | ||
Other financing liabilities, at fair value (amounts related to VIEs of $21,365 and $22,002) | 601,684 | 950,593 |
Financing liability – MSRs pledged | Original Rights to MSRs Agreements | ||
Debt Instrument [Line Items] | ||
Other financing liabilities, at fair value (amounts related to VIEs of $21,365 and $22,002) | 591,705 | 603,046 |
Financing liability – MSRs pledged | 2017 Agreements and New RMSR Agreements | ||
Debt Instrument [Line Items] | ||
Other financing liabilities, at fair value (amounts related to VIEs of $21,365 and $22,002) | 9,979 | 35,445 |
Financing liability – MSRs pledged | PMC MSR Agreements | ||
Debt Instrument [Line Items] | ||
Other financing liabilities, at fair value (amounts related to VIEs of $21,365 and $22,002) | 0 | 312,102 |
IndyMac Mortgage Loan Trust | ||
Debt Instrument [Line Items] | ||
Other financing liabilities, at fair value (amounts related to VIEs of $21,365 and $22,002) | 9,544 | 9,794 |
Residential Asset Securitization Trust | ||
Debt Instrument [Line Items] | ||
Other financing liabilities, at fair value (amounts related to VIEs of $21,365 and $22,002) | 11,821 | 12,208 |
Financing Liability Owed to Securitization Investors | ||
Debt Instrument [Line Items] | ||
Other financing liabilities, at fair value (amounts related to VIEs of $21,365 and $22,002) | $ 21,365 | $ 22,002 |
London Interbank Offered Rate (LIBOR) | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 0.99% | 1.76% |
Financing Liabilities | London Interbank Offered Rate (LIBOR) | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 2.60% |
Borrowings - Schedule of Fina_2
Borrowings - Schedule of Financing Liabilities (Footnote) (Details) - USD ($) $ in Millions | 1 Months Ended | ||
Jan. 31, 2018 | Sep. 30, 2017 | Mar. 31, 2020 | |
London Interbank Offered Rate (LIBOR) | Financing Liability Owed to Securitization Investors | |||
Debt Instrument [Line Items] | |||
Weighted average interest rate | 0.45% | ||
Minimum | IndyMac Mortgage Loan Trust | |||
Debt Instrument [Line Items] | |||
Weighted average interest rate | 3.38% | ||
Minimum | Residential Asset Securitization Trust | |||
Debt Instrument [Line Items] | |||
Weighted average interest rate | 4.25% | ||
Maximum | IndyMac Mortgage Loan Trust | |||
Debt Instrument [Line Items] | |||
Weighted average interest rate | 3.85% | ||
Maximum | Residential Asset Securitization Trust | |||
Debt Instrument [Line Items] | |||
Weighted average interest rate | 5.75% | ||
Two Thousand Seventeen Agreements | Financing liability – MSRs pledged | |||
Debt Instrument [Line Items] | |||
Receipt of lump sum payment in connection with transfer of MSRs to NRZ | $ 279.6 | $ 54.6 |
Borrowings - Schedule of Other
Borrowings - Schedule of Other Secured Borrowings (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Line of Credit Facility [Line Items] | ||
Available borrowing capacity | $ 0 | |
Other secured borrowings | $ 6,946,140 | $ 7,036,030 |
London Interbank Offered Rate (LIBOR) | ||
Line of Credit Facility [Line Items] | ||
Basis spread on variable rate | 0.99% | 1.76% |
Secured Debt | ||
Line of Credit Facility [Line Items] | ||
Available borrowing capacity | $ 185,710 | |
Short-term debt | 317,879 | $ 372,015 |
Unamortized debt issuance costs - SSTL | (8,808) | (3,381) |
Discount - SSTL | (578) | (1,134) |
Long-term debt | $ 797,615 | $ 1,025,791 |
Weighted average interest rate | 4.09% | 4.74% |
Secured Debt | Senior Secured Term Loan | ||
Line of Credit Facility [Line Items] | ||
Available borrowing capacity | $ 0 | |
Other secured borrowings | 200,000 | $ 326,066 |
Secured Debt | Repurchase Agreements | ||
Line of Credit Facility [Line Items] | ||
Available borrowing capacity | 0 | |
Other secured borrowings | 110,607 | 91,573 |
Secured Debt | Mortgage Loan Warehouse Agreement | ||
Line of Credit Facility [Line Items] | ||
Available borrowing capacity | 0 | |
Other secured borrowings | 0 | 72,443 |
Secured Debt | Master Repurchase Agreement | ||
Line of Credit Facility [Line Items] | ||
Available borrowing capacity | 119,637 | |
Other secured borrowings | 80,363 | 139,227 |
Secured Debt | Master Repurchase Agreement | ||
Line of Credit Facility [Line Items] | ||
Available borrowing capacity | 0 | |
Other secured borrowings | $ 0 | 898 |
Basis spread on variable rate | 0.00% | |
Interest rate at index floor rate | 4.00% | |
Secured Debt | Master Repurchase Agreement | ||
Line of Credit Facility [Line Items] | ||
Other secured borrowings | $ 0 | 0 |
Secured Debt | Participation Agreement | ||
Line of Credit Facility [Line Items] | ||
Other secured borrowings | 29,102 | 17,304 |
Secured Debt | Mortgage Warehouse Agreement Two | ||
Line of Credit Facility [Line Items] | ||
Available borrowing capacity | 36,583 | |
Other secured borrowings | 13,417 | 10,780 |
Secured Debt | Mortgage Warehouse Agreement Three | ||
Line of Credit Facility [Line Items] | ||
Available borrowing capacity | 0 | |
Other secured borrowings | 55,633 | 0 |
Secured Debt | Agency Mortgage Servicing Rights Financing Facility | ||
Line of Credit Facility [Line Items] | ||
Available borrowing capacity | 185,710 | |
Short-term debt | 114,290 | 147,706 |
Secured Debt | Ginnie Mae Mortgage Servicing Rights Financing Facility | ||
Line of Credit Facility [Line Items] | ||
Available borrowing capacity | 0 | |
Long-term debt | 61,082 | 72,320 |
Secured Debt | Ocwen Excess Spread-Collateralized Notes, Series 2019-PLS1 Class A | ||
Line of Credit Facility [Line Items] | ||
Available borrowing capacity | 0 | |
Long-term debt | 86,911 | 94,395 |
Secured Debt | OASIS Series 2014-1 | ||
Line of Credit Facility [Line Items] | ||
Available borrowing capacity | 0 | |
Long-term debt | 55,596 | 57,594 |
Secured Debt | Total Servicing Lines of Credit | ||
Line of Credit Facility [Line Items] | ||
Available borrowing capacity | 341,930 | |
Short term and long term debt | $ 807,001 | 1,030,306 |
Secured Debt | London Interbank Offered Rate (LIBOR) | Mortgage Loan Warehouse Agreement | ||
Line of Credit Facility [Line Items] | ||
Interest rate at index floor rate | 0.00% | |
Secured Debt | London Interbank Offered Rate (LIBOR) | Mortgage Warehouse Agreement Two | ||
Line of Credit Facility [Line Items] | ||
Interest rate at index floor rate | 1.75% | |
Secured Debt | London Interbank Offered Rate (LIBOR) | Mortgage Warehouse Agreement Three | ||
Line of Credit Facility [Line Items] | ||
Basis spread on variable rate | 2.50% | |
Interest rate at index floor rate | 3.50% | |
Secured Debt | Eurodollar | Senior Secured Term Loan | ||
Line of Credit Facility [Line Items] | ||
Basis spread on variable rate | 6.00% | |
Interest rate at index floor rate | 1.00% | |
Secured Debt | Minimum | London Interbank Offered Rate (LIBOR) | Mortgage Loan Warehouse Agreement | ||
Line of Credit Facility [Line Items] | ||
Basis spread on variable rate | 2.50% | |
Secured Debt | Minimum | London Interbank Offered Rate (LIBOR) | Master Repurchase Agreement | ||
Line of Credit Facility [Line Items] | ||
Interest rate at index floor rate | 2.25% | |
Secured Debt | Minimum | London Interbank Offered Rate (LIBOR) | Mortgage Warehouse Agreement Two | ||
Line of Credit Facility [Line Items] | ||
Basis spread on variable rate | 3.50% | |
Secured Debt | Minimum | London Interbank Offered Rate (LIBOR) | Mortgage Warehouse Agreement Three | ||
Line of Credit Facility [Line Items] | ||
Basis spread on variable rate | 2.50% | |
Secured Debt | Maximum | London Interbank Offered Rate (LIBOR) | Mortgage Loan Warehouse Agreement | ||
Line of Credit Facility [Line Items] | ||
Basis spread on variable rate | 3.50% | |
Secured Debt | Maximum | London Interbank Offered Rate (LIBOR) | Master Repurchase Agreement | ||
Line of Credit Facility [Line Items] | ||
Interest rate at index floor rate | 2.75% | |
Warehouse Agreement Borrowings | ||
Line of Credit Facility [Line Items] | ||
Available borrowing capacity | $ 0 | |
Warehouse Agreement Borrowings | Secured Debt | ||
Line of Credit Facility [Line Items] | ||
Available borrowing capacity | 156,220 | |
Other secured borrowings | $ 289,122 | $ 332,225 |
Warehouse Agreement Borrowings | Secured Debt | London Interbank Offered Rate (LIBOR) | Master Repurchase Agreement | ||
Line of Credit Facility [Line Items] | ||
Basis spread on variable rate | 1.70% | |
Interest rate at index floor rate | 0.35% | |
Warehouse Agreement Borrowings | Secured Debt | London Interbank Offered Rate (LIBOR) | Mortgage Warehouse Agreement Two | ||
Line of Credit Facility [Line Items] | ||
Basis spread on variable rate | 3.50% | |
Warehouse Agreement Borrowings | Secured Debt | London Interbank Offered Rate (LIBOR) | Agency Mortgage Servicing Rights Financing Facility | ||
Line of Credit Facility [Line Items] | ||
Basis spread on variable rate | 3.00% | |
Warehouse Agreement Borrowings | Secured Debt | London Interbank Offered Rate (LIBOR) | Ginnie Mae Mortgage Servicing Rights Financing Facility | ||
Line of Credit Facility [Line Items] | ||
Basis spread on variable rate | 3.95% | |
Warehouse Agreement Borrowings | Secured Debt | London Interbank Offered Rate (LIBOR) | Ocwen Excess Spread-Collateralized Notes, Series 2019-PLS1 Class A | ||
Line of Credit Facility [Line Items] | ||
Interest rate (as a percent) | 5.07% | 5.07% |
Warehouse Agreement Borrowings | Secured Debt | Minimum | London Interbank Offered Rate (LIBOR) | Repurchase Agreement | ||
Line of Credit Facility [Line Items] | ||
Basis spread on variable rate | 1.95% | |
Warehouse Agreement Borrowings | Secured Debt | Maximum | London Interbank Offered Rate (LIBOR) | Repurchase Agreement | ||
Line of Credit Facility [Line Items] | ||
Basis spread on variable rate | 3.00% |
Borrowings - Schedule of Othe_2
Borrowings - Schedule of Other Secured Borrowings (Footnote) (Details) - USD ($) | May 04, 2020 | Jan. 27, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Nov. 26, 2019 | Jul. 01, 2019 | Feb. 04, 2019 |
Debt Instrument [Line Items] | |||||||
Available borrowing capacity | $ 0 | ||||||
Repurchase Agreements | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | 175,000,000 | ||||||
Borrowings available on committed basis | $ 100,000,000 | ||||||
Participation Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 300,000,000 | ||||||
London Interbank Offered Rate (LIBOR) | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 0.99% | 1.76% | |||||
Secured Debt | |||||||
Debt Instrument [Line Items] | |||||||
Available borrowing capacity | $ 185,710,000 | ||||||
Secured Debt | Senior Secured Term Loan | |||||||
Debt Instrument [Line Items] | |||||||
Available borrowing capacity | 0 | ||||||
Repayments of debt | $ 126,100,000 | ||||||
Maximum borrowing capacity | $ 200,000,000 | ||||||
Prepayment premium through January 27, 2022 (percent) | 2.00% | ||||||
Periodic prepayment of SSTL | $ 5,000,000 | ||||||
Secured Debt | Repurchase Agreements | |||||||
Debt Instrument [Line Items] | |||||||
Available borrowing capacity | 0 | ||||||
Secured Debt | Mortgage Loan Warehouse Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Available borrowing capacity | 0 | ||||||
Secured Debt | Master Repurchase Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Available borrowing capacity | 119,637,000 | ||||||
Secured Debt | Master Repurchase Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Available borrowing capacity | $ 0 | ||||||
Basis spread on variable rate | 0.00% | ||||||
Interest rate at index floor rate | 4.00% | ||||||
Secured Debt | Mortgage Warehouse Agreement Two | |||||||
Debt Instrument [Line Items] | |||||||
Available borrowing capacity | $ 36,583,000 | ||||||
Secured Debt | Agency Mortgage Servicing Rights Financing Facility | |||||||
Debt Instrument [Line Items] | |||||||
Available borrowing capacity | 185,710,000 | ||||||
Maximum borrowing capacity | $ 300,000,000 | ||||||
Secured Debt | Ginnie Mae Mortgage Servicing Rights Financing Facility | |||||||
Debt Instrument [Line Items] | |||||||
Available borrowing capacity | 0 | ||||||
Maximum borrowing capacity | 100,000,000 | ||||||
Secured Debt | Mortgage Warehouse Agreement Three | |||||||
Debt Instrument [Line Items] | |||||||
Available borrowing capacity | 0 | ||||||
Secured Debt | Ocwen Excess Spread-Collateralized Notes, Series 2019-PLS1 Class A | |||||||
Debt Instrument [Line Items] | |||||||
Available borrowing capacity | $ 0 | ||||||
Debt instrument, face amount | $ 100,000,000 | ||||||
Secured Debt | Eurodollar | Senior Secured Term Loan | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 6.00% | ||||||
Interest rate at index floor rate | 1.00% | ||||||
Secured Debt | London Interbank Offered Rate (LIBOR) | Mortgage Loan Warehouse Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate at index floor rate | 0.00% | ||||||
Secured Debt | London Interbank Offered Rate (LIBOR) | Mortgage Warehouse Agreement Two | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate at index floor rate | 1.75% | ||||||
Secured Debt | London Interbank Offered Rate (LIBOR) | Mortgage Warehouse Agreement Three | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 2.50% | ||||||
Interest rate at index floor rate | 3.50% | ||||||
OASIS Series 2014-1 | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on UPB | 0.21% | ||||||
Secured Debt | Mortgage Loan Warehouse Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 1,000,000 | $ 100,000,000 | |||||
Beneficial interest | 100.00% | ||||||
Secured Debt | Master Repurchase Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 250,000,000 | ||||||
Borrowings available on committed basis | $ 200,000,000 | ||||||
Beneficial interest | 100.00% | ||||||
Secured Debt | Master Repurchase Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 50,000,000 | ||||||
Secured Debt | Master Repurchase Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 200,000,000 | ||||||
Secured Debt | Participation Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Beneficial interest | 100.00% | ||||||
Warehouse Agreement Borrowings | |||||||
Debt Instrument [Line Items] | |||||||
Available borrowing capacity | $ 0 | ||||||
Warehouse Agreement Borrowings | Secured Debt | |||||||
Debt Instrument [Line Items] | |||||||
Available borrowing capacity | $ 156,220,000 | ||||||
Warehouse Agreement Borrowings | Secured Debt | London Interbank Offered Rate (LIBOR) | Master Repurchase Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 1.70% | ||||||
Interest rate at index floor rate | 0.35% | ||||||
Warehouse Agreement Borrowings | Secured Debt | London Interbank Offered Rate (LIBOR) | Mortgage Warehouse Agreement Two | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 3.50% | ||||||
Warehouse Agreement Borrowings | Secured Debt | London Interbank Offered Rate (LIBOR) | Agency Mortgage Servicing Rights Financing Facility | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 3.00% | ||||||
Warehouse Agreement Borrowings | Secured Debt | London Interbank Offered Rate (LIBOR) | Ginnie Mae Mortgage Servicing Rights Financing Facility | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 3.95% | ||||||
Warehouse Agreement Borrowings | Secured Debt | London Interbank Offered Rate (LIBOR) | Ocwen Excess Spread-Collateralized Notes, Series 2019-PLS1 Class A | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate (as a percent) | 5.07% | 5.07% | |||||
Warehouse Agreement Borrowings | Secured Debt | Committed Basis Debt | Mortgage Warehouse Agreement Two | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 50,000,000 | ||||||
Warehouse Agreement Borrowings | Secured Debt | Non Committed Basis Debt | Mortgage Warehouse Agreement Two | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 100,000,000 | ||||||
Debt Instrument, Redemption, Period One | Secured Debt | Eurodollar | Senior Secured Term Loan | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 6.00% | ||||||
Debt Instrument, Redemption, Period One | Secured Debt | Base Rate | Senior Secured Term Loan | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 5.00% | ||||||
Debt Instrument, Redemption, Period Two | Secured Debt | Eurodollar | Senior Secured Term Loan | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 6.50% | ||||||
Debt Instrument, Redemption, Period Two | Secured Debt | Base Rate | Senior Secured Term Loan | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 5.50% | ||||||
Subsequent Event | Secured Debt | Participation Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 150,000,000 | ||||||
Renewal term (days) | 30 days |
Borrowings - Schedule of Senior
Borrowings - Schedule of Senior Notes (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | ||
Senior notes | $ 311,290 | $ 311,085 |
Senior Unsecured Notes | ||
Debt Instrument [Line Items] | ||
Senior notes | 21,543 | 21,543 |
Senior Notes | ||
Debt Instrument [Line Items] | ||
Senior notes | 313,052 | 313,052 |
Unamortized debt issuance costs | (1,344) | (1,470) |
Fair value adjustments | (418) | (497) |
Long-term debt | 311,290 | 311,085 |
6.375% Senior Notes, Due 2021 | Senior Unsecured Notes | ||
Debt Instrument [Line Items] | ||
Senior notes | $ 21,543 | 21,543 |
Interest rate (as a percent) | 6.375% | |
8.375% Senior Secured Notes Due In 2022 | Secured Debt | ||
Debt Instrument [Line Items] | ||
Senior notes | $ 291,509 | $ 291,509 |
Interest rate (as a percent) | 8.375% |
Borrowings - Schedule of Seni_2
Borrowings - Schedule of Senior Notes (Footnote) (Details) | 3 Months Ended |
Mar. 31, 2020 | |
Senior Unsecured Notes | |
Debt Instrument [Line Items] | |
Redemption price | 100.00% |
Borrowings - Schedule of Redemp
Borrowings - Schedule of Redemption Prices (Details) - Secured Debt | 3 Months Ended |
Mar. 31, 2020 | |
2019 | |
Debt Instrument [Line Items] | |
Redemption price | 104.188% |
2020 | |
Debt Instrument [Line Items] | |
Redemption price | 102.094% |
2021 and Thereafter | |
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 | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||||
Cash and cash equivalents | $ 263,555 | $ 428,339 | ||
Restricted cash (amounts related to variable interest entities (VIEs) of $13,881 and $20,434) | 53,177 | 64,001 | ||
MSRs | 1,050,228 | 1,486,395 | ||
Advances, net (amounts related to VIEs of $751,020 and $801,990) | 1,024,807 | 1,056,523 | ||
Loans held for sale | 246,015 | 275,269 | ||
Loans held for investment, at fair value (amounts related to VIEs of $22,561 and $23,342) | 6,591,382 | 6,292,938 | ||
Receivables, net | 235,305 | 201,220 | ||
Premises and equipment, net | 37,430 | 38,274 | ||
Other assets | 484,125 | 563,240 | ||
Total assets | 9,986,024 | 10,406,199 | $ 9,537,210 | |
MSRs, at fair value | 1,050,228 | $ 1,486,395 | $ 1,400,191 | $ 1,457,149 |
Match Funded Liabilties | ||||
Debt Instrument [Line Items] | ||||
Cash and cash equivalents | 0 | |||
Restricted cash (amounts related to variable interest entities (VIEs) of $13,881 and $20,434) | 10,838 | |||
MSRs | 0 | |||
Advances, net (amounts related to VIEs of $751,020 and $801,990) | 751,020 | |||
Loans held for sale | 0 | |||
Loans held for investment, at fair value (amounts related to VIEs of $22,561 and $23,342) | 0 | |||
Receivables, net | 0 | |||
Premises and equipment, net | 0 | |||
Other assets | 0 | |||
Total assets | 761,858 | |||
Financing Liabilities | ||||
Debt Instrument [Line Items] | ||||
Cash and cash equivalents | 0 | |||
Restricted cash (amounts related to variable interest entities (VIEs) of $13,881 and $20,434) | 0 | |||
MSRs | 591,705 | |||
Advances, net (amounts related to VIEs of $751,020 and $801,990) | 0 | |||
Loans held for sale | 0 | |||
Loans held for investment, at fair value (amounts related to VIEs of $22,561 and $23,342) | 6,461,371 | |||
Receivables, net | 0 | |||
Premises and equipment, net | 0 | |||
Other assets | 0 | |||
Total assets | 7,053,076 | |||
Mortgage Loan Warehouse Agreement | ||||
Debt Instrument [Line Items] | ||||
Cash and cash equivalents | 0 | |||
Restricted cash (amounts related to variable interest entities (VIEs) of $13,881 and $20,434) | 5,031 | |||
MSRs | 459,027 | |||
Advances, net (amounts related to VIEs of $751,020 and $801,990) | 0 | |||
Loans held for sale | 205,080 | |||
Loans held for investment, at fair value (amounts related to VIEs of $22,561 and $23,342) | 97,273 | |||
Receivables, net | 32,560 | |||
Premises and equipment, net | 0 | |||
Other assets | 5,204 | |||
Total assets | 804,175 | |||
Sale and Other Commitments | ||||
Debt Instrument [Line Items] | ||||
Cash and cash equivalents | 0 | |||
Restricted cash (amounts related to variable interest entities (VIEs) of $13,881 and $20,434) | 37,308 | |||
MSRs | 0 | |||
Advances, net (amounts related to VIEs of $751,020 and $801,990) | 0 | |||
Loans held for sale | 0 | |||
Loans held for investment, at fair value (amounts related to VIEs of $22,561 and $23,342) | 0 | |||
Receivables, net | 0 | |||
Premises and equipment, net | 0 | |||
Other assets | 410,718 | |||
Total assets | 448,026 | |||
Other Liabilities | ||||
Debt Instrument [Line Items] | ||||
Cash and cash equivalents | 263,555 | |||
Restricted cash (amounts related to variable interest entities (VIEs) of $13,881 and $20,434) | 0 | |||
MSRs | 513 | |||
Advances, net (amounts related to VIEs of $751,020 and $801,990) | 273,787 | |||
Loans held for sale | 40,935 | |||
Loans held for investment, at fair value (amounts related to VIEs of $22,561 and $23,342) | 32,738 | |||
Receivables, net | 202,745 | |||
Premises and equipment, net | 37,430 | |||
Other assets | 68,203 | |||
Total assets | 919,906 | |||
Certain Cohorts | Other Liabilities | ||||
Debt Instrument [Line Items] | ||||
MSRs, at fair value | 1,000 | |||
Residential Mortgage Backed Securities | Certain Cohorts | Other Liabilities | ||||
Debt Instrument [Line Items] | ||||
MSRs, at fair value | 23,300 | |||
EBO And PLS Mortgage Servicing Rights | Certain Cohorts | Other Liabilities | ||||
Debt Instrument [Line Items] | ||||
MSRs, at fair value | $ 22,100 |
Other Liabilities - Schedule of
Other Liabilities - Schedule of Other Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Other Liabilities Disclosure [Abstract] | ||
Contingent loan repurchase liability | $ 393,395 | $ 492,900 |
Due to NRZ - Advance collections and servicing fees | 98,555 | 63,596 |
Servicing-related obligations | 96,994 | 88,167 |
Liability for indemnification obligations | 48,608 | 52,785 |
Other accrued expenses | 48,452 | 67,241 |
Lease liability | 42,863 | 44,488 |
Accrued legal fees and settlements | 33,305 | 30,663 |
Checks held for escheat | 32,706 | 31,959 |
Liability for uncertain tax positions | 16,527 | 17,197 |
Accrued interest payable | 12,561 | 5,964 |
Liability for unfunded pension obligation | 13,074 | 13,383 |
Liability for mortgage insurance contingency | 6,820 | 6,820 |
Liability for unfunded India gratuity plan | 5,160 | 5,331 |
Derivatives, at fair value | 2,589 | 100 |
Deferred revenue | 774 | 488 |
Other | 22,788 | 21,091 |
Total other liabilities | $ 875,171 | $ 942,173 |
Equity (Details)
Equity (Details) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2020USD ($)$ / sharesshares | Apr. 15, 2020 | |
Class of Stock [Line Items] | ||
Share repurchase program authorized amount | $ 5 | |
Shares repurchased (shares) | shares | 5,662,257 | |
Repurchase of common stock | $ 4.5 | |
Shares repurchased (USD per share) | $ / shares | $ 0.79 | |
Payments for commissions | $ 0.1 | |
Remaining repurchase amount | $ 0.5 | |
Minimum | Subsequent Event | ||
Class of Stock [Line Items] | ||
Proposed reverse stock split ratio | 0.2 | |
Maximum | Subsequent Event | ||
Class of Stock [Line Items] | ||
Proposed reverse stock split ratio | 0.04 |
Derivative Financial Instrume_3
Derivative Financial Instruments and Hedging Activities - Summary of Derivatives (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Fair value of derivative assets (liabilities) at: | |||
Derivatives, at fair value | $ 15,830 | $ 6,007 | |
Interest Rate Lock Commitments | |||
Derivative Notional Balance | |||
Notional balance at March 31, 2020 | 382,773 | 232,566 | |
Fair value of derivative assets (liabilities) at: | |||
Derivatives, at fair value | 10,478 | 4,878 | |
Gains (losses) on derivatives during the three months ended: | |||
Gains (losses) on derivatives | 5,714 | $ (341) | |
TBA/Forward Mortgage Backed Securities Trades | |||
Derivative Notional Balance | |||
Notional balance at March 31, 2020 | 740,000 | 1,200,000 | |
Fair value of derivative assets (liabilities) at: | |||
Derivatives, at fair value | 2,999 | 1,121 | |
Gains (losses) on derivatives during the three months ended: | |||
Gains (losses) on derivatives | 35,291 | 0 | |
Forward MBS Trades | |||
Derivative Notional Balance | |||
Notional balance at March 31, 2020 | 100,000 | 60,000 | |
Fair value of derivative assets (liabilities) at: | |||
Derivatives, at fair value | (235) | (92) | |
Gains (losses) on derivatives during the three months ended: | |||
Gains (losses) on derivatives | (7,192) | (2,270) | |
Interest Rate Caps | |||
Derivative Notional Balance | |||
Notional balance at March 31, 2020 | 10,833 | 27,083 | |
Fair value of derivative assets (liabilities) at: | |||
Derivatives, at fair value | 0 | $ 0 | |
Gains (losses) on derivatives during the three months ended: | |||
Gains (losses) on derivatives | 0 | $ (402) | |
Interest Rate Swap | |||
Derivative Notional Balance | |||
Notional balance at March 31, 2020 | 500,000 | ||
Fair value of derivative assets (liabilities) at: | |||
Derivatives, at fair value | $ 800 |
Derivative Financial Instrume_4
Derivative Financial Instruments and Hedging Activities - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Foreign currency exchange (losses) gains | $ (0.9) | $ 0.2 |
Interest Expense - Schedule of
Interest Expense - Schedule of Components of Interest Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Debt securities: | ||
Interest expense | $ 29,982 | $ 26,489 |
Senior Notes | ||
Debt securities: | ||
Interest expense | 6,661 | 8,512 |
Match Funded Liabilties | ||
Debt securities: | ||
Interest expense | 5,665 | 7,652 |
Other Secured Borrowings | ||
Debt securities: | ||
Interest expense | 15,292 | 8,947 |
Other | ||
Debt securities: | ||
Interest expense | $ 2,364 | $ 1,378 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Tax Contingency [Line Items] | ||
Income tax (benefit) expense | $ 61,856 | $ (3,410) |
Income tax (benefit) expense, before CARES Act | 2,900 | |
Coronavirus Aid, Relief, And Economic Security Act (CARES Act) | ||
Income Tax Contingency [Line Items] | ||
Income tax (benefit) expense | 64,800 | |
Coronavirus Aid, Relief, And Economic Security Act (CARES Act) | Domestic Tax Authority | ||
Income Tax Contingency [Line Items] | ||
Income tax (benefit) expense | 62,900 | |
Coronavirus Aid, Relief, And Economic Security Act (CARES Act) | Foreign Tax Authority | ||
Income Tax Contingency [Line Items] | ||
Income tax (benefit) expense | $ 1,900 |
Basic and Diluted Earnings (L_3
Basic and Diluted Earnings (Loss) per Share - Schedule of Reconciliation of Calculation of Basic Earnings per Share to Diluted Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Basic and Diluted loss per share | ||
Net loss | $ (25,489) | $ (44,494) |
Weighted average shares of common stock - basic and diluted (in shares) | 134,858,837 | 133,918,986 |
Basic and Diluted loss per share (in USD per share) | $ (0.19) | $ (0.33) |
Stock options and common stock awards excluded from the computation of diluted earnings per share | ||
Anti-dilutive Securities (in shares) | 3,737,824 | 3,226,255 |
Market Based | ||
Stock options and common stock awards excluded from the computation of diluted earnings per share | ||
Anti-dilutive Securities (in shares) | 1,880,954 | 381,877 |
Business Segment Reporting - Sc
Business Segment Reporting - Schedule of Segment Reporting Information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Results of Operations | |||
Revenue | $ 253,842 | $ 303,888 | |
MSR valuation adjustments, net | (174,120) | (108,998) | |
Operating expenses | 137,214 | 171,107 | |
Other (expense) income: | |||
Interest income | 5,395 | 4,558 | |
Interest expense | (29,982) | (26,489) | |
Pledged MSR liability expense | (6,594) | (43,956) | |
Other | 1,328 | 1,020 | |
Total other expense, net | (29,853) | (64,867) | |
Loss before income taxes | (87,345) | (41,084) | |
Total Assets | |||
Balance | 9,986,024 | 9,537,210 | $ 10,406,199 |
Operating Segments | Servicing | |||
Results of Operations | |||
Revenue | 213,555 | 259,274 | |
MSR valuation adjustments, net | (174,436) | (108,914) | |
Operating expenses | 80,473 | 156,984 | |
Other (expense) income: | |||
Interest income | 1,886 | 2,294 | |
Interest expense | (13,667) | (10,742) | |
Pledged MSR liability expense | (6,623) | (43,956) | |
Other | 3,662 | 1,525 | |
Total other expense, net | (14,742) | (50,879) | |
Loss before income taxes | (56,096) | (57,503) | |
Total Assets | |||
Balance | 2,787,250 | 3,221,779 | 3,378,515 |
Operating Segments | Lending | |||
Results of Operations | |||
Revenue | 37,647 | 41,091 | |
MSR valuation adjustments, net | 316 | (84) | |
Operating expenses | 26,958 | 21,247 | |
Other (expense) income: | |||
Interest income | 2,266 | 1,549 | |
Interest expense | (2,861) | (1,668) | |
Pledged MSR liability expense | 0 | 0 | |
Other | (29) | 219 | |
Total other expense, net | (624) | 100 | |
Loss before income taxes | 10,381 | 19,860 | |
Total Assets | |||
Balance | 6,739,576 | 5,848,830 | 6,459,367 |
Operating Segments | Corporate Items and Other | |||
Results of Operations | |||
Revenue | 2,640 | 3,523 | |
MSR valuation adjustments, net | 0 | 0 | |
Operating expenses | 29,783 | (7,124) | |
Other (expense) income: | |||
Interest income | 1,243 | 715 | |
Interest expense | (13,454) | (14,079) | |
Pledged MSR liability expense | 29 | 0 | |
Other | (2,305) | (724) | |
Total other expense, net | (14,487) | (14,088) | |
Loss before income taxes | (41,630) | (3,441) | |
Total Assets | |||
Balance | $ 459,198 | $ 466,601 | $ 568,317 |
Business Segment Reporting - _2
Business Segment Reporting - Schedule of Segment Reporting Information (Footnote) (Details) - Corporate and Other - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Segment Reporting Information [Line Items] | ||
Severance expense | $ 0.2 | $ 18.5 |
Recovery of professional services expense | $ 30.7 |
Business Segment Reporting - _3
Business Segment Reporting - Schedule of Depreciation and Amortization by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Segment Reporting Information [Line Items] | ||
Depreciation expense | $ 3,997 | $ 8,551 |
Amortization of debt discount | 929 | 351 |
Amortization of debt issuance costs | 1,733 | 700 |
Servicing | ||
Segment Reporting Information [Line Items] | ||
Depreciation expense | 215 | 806 |
Amortization of debt discount | 0 | 0 |
Amortization of debt issuance costs | 112 | 0 |
Lending | ||
Segment Reporting Information [Line Items] | ||
Depreciation expense | 37 | 36 |
Amortization of debt discount | 0 | 0 |
Amortization of debt issuance costs | 0 | 0 |
Corporate and Other | ||
Segment Reporting Information [Line Items] | ||
Depreciation expense | 3,745 | 7,709 |
Amortization of debt discount | 929 | 351 |
Amortization of debt issuance costs | $ 1,621 | $ 700 |
Regulatory Requirements - Narra
Regulatory Requirements - Narrative (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Brokers and Dealers [Abstract] | |
Number of days from fiscal year end that servicer is obliged to provide audited financial statements | 90 days |
Net worth requirement | $ 222.1 |
Net worth | 339 |
Outstanding amount of debt forgiveness for borrowers | $ 198 |
Commitments - Schedule of NRZ U
Commitments - Schedule of NRZ UPB (Details) $ in Billions | Mar. 31, 2020USD ($) |
Servicing Assets at Fair Value [Line Items] | |
UPB of rights to MSRs sold | $ 73.6 |
NRZ | |
Servicing Assets at Fair Value [Line Items] | |
UPB of rights to MSRs sold | 113.9 |
Ocwen | NRZ | |
Servicing Assets at Fair Value [Line Items] | |
UPB of rights to MSRs sold | 17.9 |
NRZ | NRZ | |
Servicing Assets at Fair Value [Line Items] | |
UPB of rights to MSRs sold | 89.8 |
Ocwen Subservicer | NRZ | |
Servicing Assets at Fair Value [Line Items] | |
UPB of rights to MSRs sold | $ 6.2 |
Commitments - Estimated Monthly
Commitments - Estimated Monthly Principal & Interest Advances (Details) $ in Millions | Apr. 30, 2020USD ($)Borrower | Mar. 31, 2020USD ($)Borrower |
Unusual or Infrequent Item, or Both [Line Items] | ||
Number of borrowers requesting forbearance plan | 27,500 | |
Number of borrowers requesting forbearance plan, no advance requirements | 1,300 | |
Estimate of liability | $ | $ 29.2 | |
Servicer | ||
Unusual or Infrequent Item, or Both [Line Items] | ||
Number of borrowers requesting forbearance plan | 5,500 | |
Estimate of liability | $ | $ 8.1 | |
New Residential Investment Corp | ||
Unusual or Infrequent Item, or Both [Line Items] | ||
Number of borrowers requesting forbearance plan | 16,800 | |
Estimate of liability | $ | $ 16.6 | |
Ocwen Subservicer | ||
Unusual or Infrequent Item, or Both [Line Items] | ||
Number of borrowers requesting forbearance plan | 3,900 | |
Estimate of liability | $ | $ 4.5 | |
GSE Loans | Servicer | ||
Unusual or Infrequent Item, or Both [Line Items] | ||
Number of borrowers requesting forbearance plan | 1,400 | |
Estimate of liability | $ | $ 1.8 | |
GSE Loans | New Residential Investment Corp | ||
Unusual or Infrequent Item, or Both [Line Items] | ||
Number of borrowers requesting forbearance plan | 2,300 | |
Estimate of liability | $ | $ 2.6 | |
Ginnie Mae Loans | Servicer | ||
Unusual or Infrequent Item, or Both [Line Items] | ||
Number of borrowers requesting forbearance plan | 400 | |
Estimate of liability | $ | $ 0.5 | |
PLS Loans | Servicer | ||
Unusual or Infrequent Item, or Both [Line Items] | ||
Number of borrowers requesting forbearance plan | 3,700 | |
Estimate of liability | $ | $ 5.8 | |
PLS Loans | New Residential Investment Corp | ||
Unusual or Infrequent Item, or Both [Line Items] | ||
Number of borrowers requesting forbearance plan | 14,500 | |
Estimate of liability | $ | $ 14 | |
Subsequent Event | ||
Unusual or Infrequent Item, or Both [Line Items] | ||
Number of borrowers requesting forbearance plan | 114,600 | |
Number of borrowers requesting forbearance plan, no advance requirements | 4,900 | |
Estimate of liability | $ | $ 122 | |
Subsequent Event | Servicer | ||
Unusual or Infrequent Item, or Both [Line Items] | ||
Number of borrowers requesting forbearance plan | 30,600 | |
Estimate of liability | $ | $ 40.2 | |
Subsequent Event | New Residential Investment Corp | ||
Unusual or Infrequent Item, or Both [Line Items] | ||
Number of borrowers requesting forbearance plan | 72,600 | |
Estimate of liability | $ | $ 72.9 | |
Subsequent Event | Ocwen Subservicer | ||
Unusual or Infrequent Item, or Both [Line Items] | ||
Number of borrowers requesting forbearance plan | 6,500 | |
Estimate of liability | $ | $ 8.9 | |
Subsequent Event | GSE Loans | Servicer | ||
Unusual or Infrequent Item, or Both [Line Items] | ||
Number of borrowers requesting forbearance plan | 6,200 | |
Estimate of liability | $ | $ 7.9 | |
Subsequent Event | GSE Loans | New Residential Investment Corp | ||
Unusual or Infrequent Item, or Both [Line Items] | ||
Number of borrowers requesting forbearance plan | 9,400 | |
Estimate of liability | $ | $ 10.5 | |
Subsequent Event | Ginnie Mae Loans | Servicer | ||
Unusual or Infrequent Item, or Both [Line Items] | ||
Number of borrowers requesting forbearance plan | 8,400 | |
Estimate of liability | $ | $ 7.9 | |
Subsequent Event | PLS Loans | Servicer | ||
Unusual or Infrequent Item, or Both [Line Items] | ||
Number of borrowers requesting forbearance plan | 16,000 | |
Estimate of liability | $ | $ 24.4 | |
Subsequent Event | PLS Loans | New Residential Investment Corp | ||
Unusual or Infrequent Item, or Both [Line Items] | ||
Number of borrowers requesting forbearance plan | 63,200 | |
Estimate of liability | $ | $ 62.4 |
Commitments - Narrative (Detail
Commitments - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Other Commitments [Line Items] | ||||
Threshold of outstanding principal balance on maximum claim amount (as a percent) | 98.00% | |||
MSRs, at fair value | $ 1,050,228 | $ 1,400,191 | $ 1,486,395 | $ 1,457,149 |
MSRs | 1,050,228 | 1,486,395 | ||
Servicing and subservicing fees | 211,483 | 256,616 | ||
Other financing liabilities | 623,049 | 972,595 | ||
Floating Rate Reverse Mortgage Loans [Member] | ||||
Other Commitments [Line Items] | ||||
Additional borrowing capacity to borrowers | 1,600,000 | |||
Forward Mortgage Loan Interest Rate Lock Commitments [Member] | ||||
Other Commitments [Line Items] | ||||
Short-term commitments to lend | 357,200 | |||
Reverse Mortgage Loan Interest Rate Lock Commitments [Member] | ||||
Other Commitments [Line Items] | ||||
Short-term commitments to lend | 25,600 | |||
New Residential Investment Corp | ||||
Other Commitments [Line Items] | ||||
MSRs, at fair value | 591,700 | 915,148 | ||
Net servicing fees remitted to NRZ | 90,338 | 118,440 | ||
Servicing fees retained | $ 29,331 | $ 37,407 | ||
Customer Concentration Risk | Unpaid Principal Balance | New Residential Investment Corp | ||||
Other Commitments [Line Items] | ||||
Concentration risk (percent) | 55.00% | |||
Customer Concentration Risk | Servicing Portfolio | New Residential Investment Corp | ||||
Other Commitments [Line Items] | ||||
Concentration risk (percent) | 19.00% | |||
Customer Concentration Risk | Loan Count [Member] | New Residential Investment Corp | ||||
Other Commitments [Line Items] | ||||
Concentration risk (percent) | 60.00% | |||
Customer Concentration Risk | Delinquent Loans [Member] | New Residential Investment Corp | ||||
Other Commitments [Line Items] | ||||
Concentration risk (percent) | 72.00% | |||
2017 Agreements and New RMSR Agreements | New Residential Investment Corp | ||||
Other Commitments [Line Items] | ||||
Other financing liabilities | $ 10,000 | $ 35,445 |
Commitments - Schedule of Activ
Commitments - Schedule of Activity Related to HMBS Repurchases (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($)loanSecurities | |
Long-term Purchase Commitment [Line Items] | |
Beginning balance, repurchase securities, number | Securities | 320 |
Additions, repurchase securities, number | Securities | 120 |
Recoveries, net, repurchase securities, number | Securities | (4) |
Transfers, repurchase securities, number | Securities | 0 |
Change in value, repurchase securities, number | Securities | 0 |
Ending balance, repurchase securities, number | Securities | 436 |
Beginning balance, repurchase securities, value | $ 35,693 |
Additions, repurchase securities, value | 19,856 |
Recoveries, repurchase securities, value | (8,597) |
Transfers, repurchase securities, value | 0 |
Change in value, repurchase securities, value | (949) |
Ending balance, repurchase securities, value | $ 46,003 |
Active | |
Long-term Purchase Commitment [Line Items] | |
Beginning balance, repurchase securities, number | loan | 62 |
Additions, repurchase securities, number | loan | 47 |
Recoveries, net, repurchase securities, number | loan | (3) |
Transfers, repurchase securities, number | loan | (2) |
Change in value, repurchase securities, number | loan | 0 |
Ending balance, repurchase securities, number | Securities | 104 |
Beginning balance, repurchase securities, value | $ 10,546 |
Additions, repurchase securities, value | 10,337 |
Recoveries, repurchase securities, value | (5,413) |
Transfers, repurchase securities, value | (553) |
Change in value, repurchase securities, value | 43 |
Ending balance, repurchase securities, value | $ 14,960 |
Inactive | |
Long-term Purchase Commitment [Line Items] | |
Beginning balance, repurchase securities, number | loan | 258 |
Additions, repurchase securities, number | loan | 73 |
Recoveries, net, repurchase securities, number | loan | (1) |
Transfers, repurchase securities, number | loan | 2 |
Change in value, repurchase securities, number | loan | 0 |
Ending balance, repurchase securities, number | Securities | 332 |
Beginning balance, repurchase securities, value | $ 25,147 |
Additions, repurchase securities, value | 9,519 |
Recoveries, repurchase securities, value | (3,184) |
Transfers, repurchase securities, value | 553 |
Change in value, repurchase securities, value | (992) |
Ending balance, repurchase securities, value | $ 31,043 |
Commitments - Schedule of Act_2
Commitments - Schedule of Activity Related to HMBS Repurchases (Footnote) (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($)loan | |
Other Commitments [Abstract] | |
Number of maximum claim amount repurchases loans | loan | 89 |
Amount of maximum claim amount repurchases | $ | $ 18.1 |
Contingencies - Narrative (Deta
Contingencies - Narrative (Details) | Apr. 20, 2017StateStates | Apr. 30, 2017USD ($) | Mar. 31, 2020USD ($)LoanStates | Mar. 31, 2019USD ($)Loan | Dec. 31, 2016USD ($) |
Loss Contingencies [Line Items] | |||||
Accrued penalty | $ 33,300,000 | ||||
Number of states charging with regulatory action | States | 29 | ||||
Number of states 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 | ||||
Warranty repurchase demands unpaid principal balance | $ 44,700,000 | $ 46,300,000 | |||
Warranty repurchase demands number of loans | Loan | 277 | 273 | |||
Consumer Financial Protection Bureau [Member] | |||||
Loss Contingencies [Line Items] | |||||
Accrued penalty | $ 12,500,000 | ||||
Increase in legal and regulatory accrual | $ 4,400,000 | ||||
Massachusetts Regulatory Agency [Member] | |||||
Loss Contingencies [Line Items] | |||||
Litigation settlement expense | $ 1,000,000 | ||||
Florida Attorney General [Member] | |||||
Loss Contingencies [Line Items] | |||||
Injunctive and equitable relief, costs, and civil money penalties sought | $ 10,000 | ||||
Multistate Mortgage Committee [Member] | |||||
Loss Contingencies [Line Items] | |||||
Number of states who are part of confidential supervisory memorandum of understanding | States | 6 |
Contingencies - Schedule of Ind
Contingencies - Schedule of Indemnification Obligations (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Indemnification Obligations Liability [Roll Forward] | ||
Beginning balance | $ 50,838 | $ 49,267 |
Provision (reversal) for representation and warranty obligations | (768) | (2,155) |
New production reserves | 170 | 75 |
Charge-offs and other | (3,161) | (573) |
Ending balance | $ 47,079 | $ 46,614 |
Subsequent Events - Narrative (
Subsequent Events - Narrative (Details) - Borrower | Apr. 30, 2020 | Mar. 31, 2020 |
Subsequent Event [Line Items] | ||
Number of borrowers requesting forbearance plan | 27,500 | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Number of borrowers requesting forbearance plan | 114,600 | |
Forbearance Loans | Number Of Serviced Portfolio Loans | ||
Subsequent Event [Line Items] | ||
Concentration risk (percent) | 2.00% | |
Forbearance Loans | Number Of Serviced Portfolio Loans | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Concentration risk (percent) | 8.50% |
Uncategorized Items - ocn-20200
Label | Element | Value |
Retained Earnings [Member] | ||
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification | us-gaap_NewAccountingPronouncementOrChangeInAccountingPrincipleEffectOfAdoptionQuantification | $ 47,038,000 |