Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Oct. 30, 2020 | |
Cover [Abstract] | ||
Entity Registrant Name | OCWEN FINANCIAL CORPORATION | |
Entity Central Index Key | 0000873860 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 1-13219 | |
Entity Incorporation, State or Country Code | FL | |
Entity Tax Identification Number | 65-0039856 | |
Entity Address, Address Line One | 1661 Worthington Road, Suite 100 | |
Entity Address, City or Town | West Palm Beach, | |
Entity Address, State or Province | FL | |
Entity Address, Postal Zip Code | 33409 | |
City Area Code | 561 | |
Local Phone Number | 682-8000 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2020 | |
Document Transition Report | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 8,683,994 | |
Title of 12(b) Security | Common Stock, $0.01 Par Value | |
Trading Symbol | OCN | |
Security Exchange Name | NYSE |
UNAUDITED CONSOLIDATED BALANCE
UNAUDITED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Assets | ||
Cash and cash equivalents | $ 321,455 | $ 428,339 |
Restricted cash (amounts related to variable interest entities (VIEs) of $13,108 and $20,434) | 61,511 | 64,001 |
Mortgage servicing rights (MSRs), at fair value | 1,069,013 | 1,486,395 |
Advances, net (amounts related to VIEs of $660,816 and $801,990) | 832,604 | 1,056,523 |
Loans held for sale ($366,966 and $208,752 carried at fair value) | 390,631 | 275,269 |
Loans held for investment, at fair value (amounts related to VIEs of $11,012 and $23,342) | 6,860,942 | 6,292,938 |
Receivables, net | 201,607 | 201,220 |
Premises and equipment, net | 23,620 | 38,274 |
Other assets ($25,204 and $8,524 carried at fair value) (amounts related to VIEs of $7,584 and $4,078) | 662,468 | 563,240 |
Total assets | 10,423,851 | 10,406,199 |
Liabilities | ||
Home Equity Conversion Mortgage-Backed Securities (HMBS) related borrowings, at fair value | 6,606,543 | 6,063,435 |
Advance match funded liabilities (related to VIEs) | 580,078 | 679,109 |
Other financing liabilities, at fair value (amounts related to VIEs of $11,012 and $22,002) | 588,321 | 972,595 |
Other secured borrowings, net (amounts related to VIEs $186,986 and $240,893) | 915,292 | 1,025,791 |
Senior notes, net | 311,689 | 311,085 |
Other liabilities ($1,671 and $100 carried at fair value) (amounts related to VIEs of $93 and $144) | 997,461 | 942,173 |
Total liabilities | 9,999,384 | 9,994,188 |
Commitments and Contingencies (Notes 21 and 22) | ||
Ocwen Financial Corporation (Ocwen) stockholders’ equity | ||
Common stock, $.01 par value; 13,333,333 shares authorized; 8,672,272 and 8,990,816 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively | 87 | 90 |
Additional paid-in capital | 556,176 | 558,057 |
Accumulated deficit | (124,459) | (138,542) |
Accumulated other comprehensive loss, net of income taxes | (7,337) | (7,594) |
Total stockholders’ equity | 424,467 | 412,011 |
Total liabilities and stockholders’ equity | $ 10,423,851 | $ 10,406,199 |
UNAUDITED CONSOLIDATED BALANC_2
UNAUDITED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Restricted cash (amounts related to variable interest entities (VIEs) of $13,108 and $20,434) | $ 61,511 | $ 64,001 |
Advances, net (amounts related to VIEs of $660,816 and $801,990) | 832,604 | 1,056,523 |
Loans held for sale ($366,966 and $208,752 carried at fair value) | 366,966 | 208,752 |
Loans held for investment, at fair value (amounts related to VIEs of $11,012 and $23,342) | 6,860,942 | 6,292,938 |
Other assets, at fair value | 25,204 | 8,524 |
Other assets | 662,468 | 563,240 |
Other financing liabilities, at fair value (amounts related to VIEs of $11,012 and $22,002) | 588,321 | 972,595 |
Other secured borrowings, net (amounts related to VIEs $186,986 and $240,893) | 915,292 | 1,025,791 |
Other liabilities ($1,671 and $100 carried at fair value) (amounts related to VIEs of $93 and $144) | 1,671 | 100 |
Other liabilities | $ 997,461 | $ 942,173 |
Common stock, $.01 par value; 13,333,333 shares authorized; 8,672,272 and 8,990,816 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 13,333,333 | 13,333,333 |
Common Stock, Shares, Issued | 8,672,272 | 8,990,816 |
Common Stock, Shares, Outstanding | 8,672,272 | 8,990,816 |
Residential Mortgage Backed Securitization Trusts | ||
Loans held for investment, at fair value (amounts related to VIEs of $11,012 and $23,342) | $ 11,012 | $ 23,342 |
Other financing liabilities, at fair value (amounts related to VIEs of $11,012 and $22,002) | 11,012 | 22,002 |
Variable Interest Entity, Primary Beneficiary | ||
Restricted cash (amounts related to variable interest entities (VIEs) of $13,108 and $20,434) | 13,108 | 20,434 |
Advances, net (amounts related to VIEs of $660,816 and $801,990) | 660,816 | 801,990 |
Other assets | 7,993 | 4,078 |
Other secured borrowings, net (amounts related to VIEs $186,986 and $240,893) | 186,986 | 240,893 |
Other liabilities | $ 287 | $ 144 |
UNAUDITED CONSOLIDATED STATEMEN
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenue | ||||
Servicing and subservicing fees | $ 181,722 | $ 248,517 | $ 568,445 | $ 745,093 |
Reverse mortgage revenue, net | 14,499 | 20,260 | 51,055 | 72,876 |
Gain on loans held for sale, net | 45,886 | 9,012 | 92,764 | 26,312 |
Other revenue, net | 6,928 | 5,726 | 17,637 | 17,460 |
Total revenue | 249,035 | 283,515 | 729,901 | 861,741 |
MSR valuation adjustments, net | (33,814) | 134,561 | (231,368) | (121,705) |
Operating expenses | ||||
Compensation and benefits | 69,648 | 73,414 | 195,393 | 250,393 |
Servicing and origination | 22,930 | 36,619 | 60,547 | 86,827 |
Professional services | 28,361 | 36,628 | 77,816 | 77,205 |
Technology and communications | 15,850 | 16,644 | 47,154 | 61,080 |
Occupancy and equipment | 9,572 | 17,262 | 37,677 | 52,550 |
Other expenses | 3,161 | (1,282) | 12,958 | 6,563 |
Total operating expenses | 149,522 | 179,285 | 431,545 | 534,618 |
Other income (expense) | ||||
Interest income | 3,801 | 4,129 | 12,762 | 12,524 |
Interest expense | (26,815) | (29,506) | (83,557) | (84,636) |
Pledged MSR liability expense | (57,404) | (256,416) | (105,684) | (303,302) |
Gain on repurchase of senior notes | 0 | 5,099 | 0 | 5,099 |
Other, net | 3,345 | (414) | 4,616 | 1,163 |
Total other expense, net | (77,073) | (277,108) | (171,863) | (369,152) |
Loss before income taxes | (11,374) | (38,317) | (104,875) | (163,734) |
Income tax (benefit) expense | (1,954) | 4,450 | (71,920) | 13,264 |
Net loss | $ (9,420) | $ (42,767) | $ (32,955) | $ (176,998) |
Loss per share | ||||
Basic (in USD per share) | $ (1.09) | $ (4.77) | $ (3.76) | $ (19.76) |
Diluted (in USD per share) | $ (1.09) | $ (4.77) | $ (3.76) | $ (19.76) |
Weighted average common shares outstanding | ||||
Basic (in shares) | 8,669,550 | 8,973,053 | 8,770,102 | 8,955,288 |
Diluted (in shares) | 8,669,550 | 8,973,053 | 8,770,102 | 8,955,288 |
UNAUDITED CONSOLIDATED STATEM_2
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (9,420) | $ (42,767) | $ (32,955) | $ (176,998) |
Other comprehensive income, net of income taxes: | ||||
Reclassification adjustment for losses on cash flow hedges included in net income | 42 | 38 | 118 | 108 |
Change in unfunded pension plan obligation liability | 47 | 611 | 139 | 1,285 |
Other | 0 | 8 | 0 | 21 |
Comprehensive loss | $ (9,331) | $ (42,110) | $ (32,698) | $ (175,584) |
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 | Cumulative Effect, Period of Adoption, Adjustment | Cumulative Effect, Period of Adoption, Adjustment(Accumulated Deficit) Retained Earnings |
Beginning Balance at Dec. 31, 2018 | $ 554,705 | $ 89 | $ 555,306 | $ 3,567 | $ (4,257) | ||
Beginning Balance (in shares) at Dec. 31, 2018 | 8,927,495 | ||||||
Net loss | (176,998) | (176,998) | |||||
Cumulative effect of adoption of Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) | $ 16 | $ 16 | |||||
Equity-based compensation and other | 2,048 | $ 1 | 2,047 | ||||
Equity-based compensation and other (in shares) | 45,558 | ||||||
Other comprehensive income, net of income taxes | 1,414 | 1,414 | |||||
Ending Balance at Sep. 30, 2019 | 381,185 | $ 90 | 557,353 | (173,415) | (2,843) | ||
Ending Balance (in shares) at Sep. 30, 2019 | 8,973,053 | ||||||
Beginning Balance at Jun. 30, 2019 | 422,894 | $ 90 | 556,952 | (130,648) | (3,500) | ||
Beginning Balance (in shares) at Jun. 30, 2019 | 8,973,053 | ||||||
Net loss | (42,767) | (42,767) | |||||
Equity-based compensation and other | 401 | $ 0 | 401 | ||||
Equity-based compensation and other (in shares) | 0 | ||||||
Other comprehensive income, net of income taxes | 657 | 657 | |||||
Ending Balance at Sep. 30, 2019 | 381,185 | $ 90 | 557,353 | (173,415) | (2,843) | ||
Ending Balance (in shares) at Sep. 30, 2019 | 8,973,053 | ||||||
Beginning Balance at Dec. 31, 2019 | $ 412,011 | $ 90 | 558,057 | (138,542) | (7,594) | ||
Beginning Balance (in shares) at Dec. 31, 2019 | 8,990,816 | 8,990,816 | |||||
Net loss | $ (32,955) | (32,955) | |||||
Cumulative effect of adoption of Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) | $ 47,038 | $ 47,038 | |||||
Repurchase of common stock | (4,605) | $ (4) | (4,601) | ||||
Repurchase of common stock (in shares) | (377,484) | ||||||
Additional shares issued on reverse stock split rounding | 4,692 | ||||||
Equity-based compensation and other | 2,721 | $ 1 | 2,720 | ||||
Equity-based compensation and other (in shares) | 54,248 | ||||||
Other comprehensive income, net of income taxes | 257 | 257 | |||||
Ending Balance at Sep. 30, 2020 | $ 424,467 | $ 87 | 556,176 | (124,459) | (7,337) | ||
Ending Balance (in shares) at Sep. 30, 2020 | 8,672,272 | 8,672,272 | |||||
Beginning Balance at Jun. 30, 2020 | $ 432,769 | $ 87 | 555,147 | (115,039) | (7,426) | ||
Beginning Balance (in shares) at Jun. 30, 2020 | 8,667,260 | ||||||
Net loss | $ (9,420) | (9,420) | |||||
Additional shares issued on reverse stock split rounding | 4,692 | 4,692 | |||||
Equity-based compensation and other | $ 1,029 | $ 0 | 1,029 | ||||
Equity-based compensation and other (in shares) | 320 | ||||||
Other comprehensive income, net of income taxes | 89 | 89 | |||||
Ending Balance at Sep. 30, 2020 | $ 424,467 | $ 87 | $ 556,176 | $ (124,459) | $ (7,337) | ||
Ending Balance (in shares) at Sep. 30, 2020 | 8,672,272 | 8,672,272 |
UNAUDITED CONSOLIDATED STATEM_4
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash flows from operating activities | ||
Net loss | $ (32,955) | $ (176,998) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
MSR valuation adjustments, net | 231,368 | 121,705 |
Gain on sale of MSRs, net | (48) | (571) |
Provision for bad debts | 18,801 | 26,971 |
Depreciation | 15,398 | 26,020 |
Gain on repurchase of senior notes | 0 | (5,099) |
Amortization of debt issuance costs | 4,631 | 2,268 |
Equity-based compensation expense | 2,392 | 1,890 |
(Gain) loss on valuation of Pledged MSR financing liability | (21,314) | 123,721 |
Net gain on valuation of loans held for investment and HMBS-related borrowings | (14,410) | (50,221) |
Gain on loans held for sale, net | (92,764) | (26,312) |
Bargain purchase gain | 0 | 381 |
Origination and purchase of loans held for sale | (4,378,999) | (872,914) |
Proceeds from sale and collections of loans held for sale | 4,259,127 | 787,683 |
Changes in assets and liabilities: | ||
Decrease in advances, net | 210,688 | 189,876 |
Decrease in receivables and other assets, net | 105,023 | 123,283 |
Decrease in other liabilities | (47,981) | (82,942) |
Other, net | (10,918) | (4,671) |
Net cash provided by operating activities | 248,039 | 184,070 |
Cash flows from investing activities | ||
Origination of loans held for investment | (867,702) | (675,898) |
Principal payments received on loans held for investment | 619,486 | 383,806 |
Purchase of MSRs | (82,990) | (112,417) |
Proceeds from sale of MSRs | 0 | 1,159 |
Acquisition of advances in connection with the purchase of MSRs | 0 | (1,457) |
Proceeds from sale of advances | 561 | 2,876 |
Additions to premises and equipment | (3,394) | (1,342) |
Proceeds from sale of real estate | 5,123 | 5,572 |
Other, net | 800 | 420 |
Net cash used in investing activities | (328,116) | (397,281) |
Cash flows from financing activities | ||
Repayment of advance match funded liabilities, net | (99,031) | (90,787) |
Repayment of other financing liabilities | (84,185) | (168,898) |
Proceeds from mortgage loan warehouse facilities, net | 109,538 | 87,484 |
Proceeds from MSR financing facilities | 128,641 | 144,260 |
Repayment of MSR financing facilities | (208,996) | (6,648) |
Repayment and repurchases of Senior notes | 0 | (131,791) |
Proceeds from issuance of additional senior secured term loan (SSTL) | 0 | 119,100 |
Repayment of SSTL borrowings | (136,066) | (19,074) |
Payment of debt issuance costs | (7,522) | (1,284) |
Proceeds from sale of MSRs accounted for as a financing | 0 | 1,221 |
Proceeds from sale of Home Equity Conversion Mortgages (HECM, or reverse mortgages) accounted for as a financing (HMBS-related borrowings) | 885,987 | 665,820 |
Repayment of HMBS-related borrowings | (613,026) | (377,094) |
Repurchase of common stock | (4,605) | 0 |
Other, net | (32) | (2,363) |
Net cash (used in) provided by financing activities | (29,297) | 219,946 |
Net (decrease) increase in cash, cash equivalents and restricted cash | (109,374) | 6,735 |
Cash, cash equivalents and restricted cash at beginning of year | 492,340 | 397,010 |
Cash, cash equivalents and restricted cash at end of period | 382,966 | 403,745 |
Supplemental non-cash investing and financing activities: | ||
Deconsolidation of mortgage-backed securitization trust, Loans held for investment | (10,715) | 0 |
Deconsolidation of mortgage-backed securitization trust, Other financing liabilities | (9,519) | 0 |
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 | 2,608 | 66,231 |
Lease liability | 2,597 | 66,247 |
Transfers of loans held for sale to real estate owned (REO) | 2,554 | 4,240 |
Cash and cash equivalents | 321,455 | 345,084 |
Debt service accounts | 14,873 | 17,026 |
Other restricted cash | $ 46,638 | $ 41,635 |
Organization and Basis of Prese
Organization and Basis of Presentation | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | Note 1 - Organization 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 to homeowners, investors and others through its primary operating subsidiary, PHH Mortgage Corporation (PMC). We are headquartered in West Palm Beach, Florida with offices and operations in the United States (U.S.), the United States Virgin Islands (USVI), 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, Ocwen Financial Solutions Private Limited (OFSPL) and Ocwen USVI Services, LLC (OVIS). On March 13, 2020, as part of Ocwen's legal entity restructuring, Ocwen’s wholly-owned subsidiary Liberty Home Equity Solutions, Inc. (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 source our servicing portfolio through multiple channels, including recapture, retail, wholesale, correspondent, flow MSR purchase agreements, the GSE Cash Window programs and bulk MSR purchases. We originate, sell and securitize conventional (conforming to the underwriting standards of Fannie Mae or Freddie Mac; collectively referred to as Agency or GSE 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 Home Equity Conversion Mortgage (HECM) loans, or reverse mortgages, that are mostly insured by the FHA and we are an approved issuer of Home Equity Conversion Mortgage-Backed Securities (HMBS) that are guaranteed by Ginnie Mae. In addition to our originated MSRs, we acquire MSRs through flow purchase agreements, the GSE Cash Window and Co-issue programs and bulk MSR purchases, and we acquire new subservicing through our enterprise sales. We had a total of approximately 5,200 employees at September 30, 2020 of which approximately 3,300 were located in India and approximately 400 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, approximately 74% were engaged in supporting our loan servicing operations as of September 30, 2020. We are facing certain challenges and uncertainties that could have significant adverse effects on our business, financial condition, liquidity and results of operations, and some of these challenges and uncertainties are amplified by the Coronavirus Disease 2019 (COVID-19) pandemic. Historical 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 are able to execute on our key business initiatives, we believe we will drive stronger financial performance. First, we must continue to expand our Originations business to replenish and grow our servicing portfolio and mitigate our client concentration risk with NRZ. Second, we must drive continuous cost improvement to maintain an industry competitive cost position. 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 growth initiatives. To this end, we continue to explore all strategic options to efficiently finance growth and leverage our proven operating capability in this environment, including the potential launch of an MSR funding vehicle. As previously disclosed, we have engaged bankers to support evaluation and execution of strategic options to fully realize the value of our platform. Finally, we must fulfill our regulatory commitments and resolve our remaining legal and regulatory matters on satisfactory terms. 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 and nine months ended September 30, 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. In August 2020, Ocwen implemented a reverse stock split of its shares of common stock in a ratio of one-for-15. The number of shares, loss per share amounts, repurchase price per share amounts, and Common stock and Additional paid-in capital balances have been retroactively adjusted for all periods presented in this Quarterly Report on Form 10-Q to give effect to the reverse stock split as if it occurred at the beginning of the first period presented. See Note 14 – Equity for additional information. 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 Certain amounts in the unaudited consolidated balance sheet at December 31, 2019, the unaudited consolidated statement of operations for the three and nine months ended September 30, 2019 and the unaudited consolidated statement of cash flows for the nine months ended September 30, 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: Periods Ended September 30, 2019 Reclassification within the Statement of Operations Three Months Nine Months Revenue From Gain on loans held for sale, net $ 7,001 $ 22,371 From Other revenue, net 14,062 52,839 From Servicing and subservicing fees (803) (2,334) To Reverse mortgage revenue, net (New line item) 20,260 72,876 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, 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 now separately present Amortization of debt issuance costs which was previously included in Other, net. • Within the Cash flows from investing activities section, we now separately present Proceeds from sale of real estate which was previously included in Other, net. • Within the Cash flows from financing activities section, we now separately present proceeds and repayments on mortgage loan warehouse facilities, net, MSR financing facilities and other financing liabilities. These amounts were previously reported as Proceeds from (Repayment of) mortgage loan warehouse facilities and other secured borrowings. 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 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. We do not anticipate that our adoption of this standard will have a material impact on our consolidated financial statements. Reference Rate Reform: Facilitation of the Effects of Reference Rate Reform on Financial Reporting (ASU 2020-04) This standard provides for optional expedients and other guidance regarding the accounting related to modifications of contracts, hedging relationships and other transactions affected by the expected phase-out of the London Inter-bank Offered Rate (LIBOR) by the end of 2021. This guidance is effective upon issuance in March 2020 through December 31, 2022 and allows for retrospective application to contract modifications as early as January 1, 2020. We have elected to retrospectively adopt this ASU as of January 1, 2020 which resulted in no immediate impact on our consolidated financial statements. Although we do not have any hedge accounting relationships, many of our debt facilities and loan agreements incorporate LIBOR as referenced interest rate. Some of these facilities and loan agreements either mature prior to the end of 2021 or have terms in place that provide for an alternative to LIBOR upon its phase-out. We do not anticipate that this standard will have a material impact on our consolidated financial statements. |
Severance and Restructuring Cha
Severance and Restructuring Charges | 9 Months Ended |
Sep. 30, 2020 | |
Restructuring and Related Activities [Abstract] | |
Severance and Restructuring Charges | Note 2 - Severance and Restructuring Charges In February 2020, we announced our intention to implement certain cost re-engineering initiatives in 2020 to generate further cost savings. During the second quarter of 2020, we executed certain of these cost re-engineering initiatives, some of which qualify as restructuring charges under GAAP, with the partial abandonment of one of our leased properties and additional severance costs. As a result of these initiatives, we accelerated the depreciation of the related facility lease right of use (ROU) asset and leasehold improvements by $2.9 million in the second quarter of 2020, recorded a $3.2 million facility exit cost liability and a $1.0 million employee severance cost liability. During the third quarter of 2020, we incurred an additional $0.9 million of employee severance costs. At September 30, 2020, our remaining facility exit cost liability and employee severance cost liability are $2.8 million and $0.7 million, respectively, and are included in Other accrued expenses, a component of Other liabilities. 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 September 30, 2020 is $2.2 million and is included in Other accrued expenses, a component of Other liabilities. The following table provides a summary of plan costs incurred in 2019: Employee-related Facility-related Other Total First quarter $ 20,787 $ — $ 1,328 $ 22,115 Second quarter 3,460 3,047 3,619 10,126 Third quarter 7,266 3,596 7,485 18,347 Fourth quarter 4,191 3,490 6,700 14,381 Total costs incurred $ 35,704 $ 10,133 $ 19,132 $ 64,969 The above 2019 and 2020 expenses were all incurred within the Corporate Items and Other segment. Employee-related costs and facility-related costs are reported in Compensation and benefits expense and Occupancy and equipment expense, respectively, 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 | 9 Months Ended |
Sep. 30, 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 variable interest entities (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 12 – Borrowings. 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 September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Proceeds received from securitizations $ 2,364,829 $ 235,175 $ 4,256,082 $ 674,108 Servicing fees collected (1) 12,561 8,866 35,204 37,610 Purchases of previously transferred assets, net of claims reimbursed (2,061) (2,093) (6,338) (3,140) $ 2,375,329 $ 241,948 $ 4,284,948 $ 708,578 (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 $22.1 million and $37.8 million, and $0.6 million and $2.2 million, during the three and nine months ended September 30, 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: September 30, 2020 December 31, 2019 Carrying value of assets MSRs, at fair value $ 101,506 $ 109,581 Advances 182,450 141,829 UPB of loans transferred 17,126,989 14,490,984 Maximum exposure to loss $ 17,410,945 $ 14,742,394 At September 30, 2020 and December 31, 2019, 9.4% 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 using SPEs 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 using SPEs 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 SPEs (trusts) were established in connection with this facility. On July 1, 2019, we also 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. On May 7, 2020 we renewed the facility through June 30, 2021 and reduced the borrowing capacity from $300.0 million to $250.0 million. We pledged the membership interest of the depositor for our OMART advance financing facility as additional collateral to this facility. 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. 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: September 30, 2020 December 31, 2019 MSRs pledged (MSRs, at fair value) $ 234,106 $ 245,533 Unamortized debt issuance costs (Other assets) 1,775 946 Debt service account (Restricted cash) 102 100 Outstanding borrowings (Other secured borrowings, net) 113,929 147,706 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: September 30, 2020 December 31, 2019 MSRs pledged (MSRs, at fair value) $ 133,169 $ 146,215 Debt service account (Restricted cash) 2,549 3,002 Outstanding borrowings (Other secured borrowings, net) 74,021 94,395 Unamortized debt issuance costs (Other secured borrowings, net) (964) (1,208) Mortgage-Backed Securitizations The table below presents the carrying value and classification of the assets and liabilities of 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. September 30, 2020 December 31, 2019 Loans held for investment, at fair value - Restricted for securitization investors $ 11,012 $ 23,342 Financing liability - Owed to securitization investors, at fair value 11,012 22,002 We 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. |
Fair Value
Fair Value | 9 Months Ended |
Sep. 30, 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: September 30, 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) (e) 3, 2 $ 366,966 $ 366,966 $ 208,752 $ 208,752 Loans held for sale, at lower of cost or fair value (b) 3 23,665 23,665 66,517 66,517 Total Loans held for sale $ 390,631 $ 390,631 $ 275,269 $ 275,269 Loans held for investment Loans held for investment - Reverse mortgages (a) 3 $ 6,849,930 $ 6,849,930 $ 6,269,596 $ 6,269,596 Loans held for investment - Restricted for securitization investors (a) 3 11,012 11,012 23,342 23,342 Total loans held for investment $ 6,860,942 $ 6,860,942 $ 6,292,938 $ 6,292,938 Advances, net (c) 3 $ 832,604 $ 832,604 $ 1,056,523 $ 1,056,523 Receivables, net (c) 3 201,607 201,607 201,220 201,220 Mortgage-backed securities (a) 3 2,150 2,150 2,075 2,075 Corporate bonds (a) 2 211 211 441 441 September 30, 2020 December 31, 2019 Level Carrying Value Fair Value Carrying Value Fair Value Financial liabilities: Advance match funded liabilities (c) 3 $ 580,078 $ 580,602 $ 679,109 $ 679,507 Financing liabilities: HMBS-related borrowings (a) 3 $ 6,606,543 $ 6,606,543 $ 6,063,435 $ 6,063,435 Financing liability - MSRs pledged (Rights to MSRs) (a) 3 577,309 577,309 950,593 950,593 Financing liability - Owed to securitization investors (a) 3 11,012 11,012 22,002 22,002 Total Financing liabilities $ 7,194,864 $ 7,194,864 $ 7,036,030 $ 7,036,030 Other secured borrowings: Senior secured term loan (c) (d) 2 $ 183,822 $ 188,666 $ 322,758 $ 324,643 Other (c) (d) 3 731,470 701,037 703,033 686,146 Total Other secured borrowings $ 915,292 $ 889,703 $ 1,025,791 $ 1,010,789 Senior notes: Senior unsecured notes (c) (d) 2 $ 21,278 $ 18,501 $ 21,046 $ 13,821 Senior secured notes (c) (d) 2 290,411 267,314 290,039 256,201 Total Senior notes $ 311,689 $ 285,815 $ 311,085 $ 270,022 Derivative financial instrument assets (liabilities) Interest rate lock commitments (a) (f) 3, 2 $ 22,679 $ 22,679 $ 4,878 $ 4,878 Forward trades - Loans held for sale (a) 1 (83) (83) (21) (21) TBA / Forward mortgage-backed securities (MBS) trades and futures - MSR hedging (a) 1 (579) (579) 1,121 1,121 Derivatives Futures (a) 1 (213) (213) — — MSRs (a) 3 $ 1,069,013 $ 1,069,013 $ 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 12 – Borrowings for additional information . (e) Loans repurchased from Ginnie Mae securitizations with a fair value of $26.4 million at September 30, 2020 are classified as Level 3. The remaining balance of loans held for sale at fair value at September 30, 2020 is classified as Level 2. The entire balance of Loans held for sale at fair value at December 31, 2019 was classified as Level 2. (f) Level 3 at September 30, 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 - Restricted for Securitization Investors Financing Liability - Owed to Securitization Investors Loans Held for Sale - Fair Value Mortgage-Backed Securities IRLCs Three months ended September 30, 2020 Beginning balance $ 11,664 $ (11,664) $ 25,950 $ 1,726 $ 17,818 Purchases, issuances, sales and settlements Purchases — — 45,445 — — Issuances — — — — 87,311 Sales — — (45,723) — — Settlements (652) 652 356 — — Transfers (to) from: Loans held for sale, at fair value — — — — (77,785) Receivables, net — — 157 — — (652) 652 235 — 9,526 Change in fair value included in earnings — — 224 424 (4,665) — — 224 424 (4,665) Transfers in and / or out of Level 3 — — — — — Ending balance $ 11,012 $ (11,012) $ 26,409 $ 2,150 $ 22,679 Loans Held for Investment - Restricted for Securitization Investors Financing Liability - Owed to Securitization Investors Mortgage-Backed Securities Derivatives - Interest Rate Caps Three months ended September 30, 2019 Beginning balance $ 25,324 $ (23,697) $ 2,014 $ 47 Purchases, issuances, sales and settlements Purchases — — — — Issuances — — — — Sales — — — — Settlements (879) 870 — — (879) 870 — — Change in fair value included in earnings — — 22 (47) — — 22 (47) Transfers in and / or out of Level 3 — — — — Ending balance $ 24,445 $ (22,827) $ 2,036 $ — Loans Held for Investment - Restricted for Securitization Investors Financing Liability - Owed to Securitization Investors Loans Held for Sale - Fair Value Mortgage-backed Securities IRLCs Nine Months Ended September 30, 2020 Beginning balance $ 23,342 $ (22,002) $ — $ 2,075 $ — Purchases, issuances, sales and settlements Purchases — — 103,955 — — Issuances — — — — 144,931 Deconsolidation of mortgage-backed securitization trusts (10,715) 9,519 — — Sales — — (104,273) — — Settlements (1,615) 1,615 (70) — — Transfers (to) from: Loans held for sale, at fair value — — — — (128,224) Receivables, net — — (113) — — (12,330) 11,134 (501) — 16,707 Change in fair value included in earnings — (144) 1,328 75 (4,506) Transfers in and / or out of Level 3 — — 25,582 — 10,478 Ending balance $ 11,012 $ (11,012) $ 26,409 $ 2,150 $ 22,679 Loans Held for Investment - Restricted for Securitization Investors Financing Liability - Owed to Securitization Investors Mortgage-backed Securities Derivatives - Interest Rate Caps Nine Months Ended September 30, 2019 Beginning balance $ 26,520 $ (24,815) $ 1,502 $ 678 Purchases, issuances, sales and settlements Purchases — — — — Issuances — — — — Sales — — — — Settlements (2,075) 1,988 — — (2,075) 1,988 — — Change in fair value included in earnings — — 534 (678) — — 534 (678) Transfers in and / or out of Level 3 — — Ending balance $ 24,445 $ (22,827) $ 2,036 $ — A rollforward of the beginning and ending balances of Loans Held for Investment and HMBS-related borrowings, MSRs and Financing liability - MSRs pledged that we measure at fair value on a recurring basis is provided in Note 6 – Reverse Mortgages, Note 8 – Mortgage Servicing and Note 9 — Rights to MSRs, respectively. The methodologies that we use and key assumptions that we make to estimate the fair value of financial instruments and other assets and liabilities measured at fair value on a recurring or non-recurring basis and those disclosed, but not carried, at fair value are described below. Loans Held for Sale Residential forward and reverse mortgage loans that we intend to sell are carried at fair value as a result of a fair value election. Such loans are subject to changes in fair value due to fluctuations in interest rates from the closing date through the date of the sale of the loan into the secondary market. These loans are 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 on or 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 September 30, 2020, as a result of the volatility of capital markets due to the COVID-19 pandemic, loans with a fair value of $26.4 million required the use of significant unobservable inputs, including the assumptions of the embedded MSR, margin and yield, and were 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 September 30, December 31, Life in years Range 1.0 to 8.2 2.4 to 7.8 Weighted average 6.1 6.0 Conditional repayment rate Range 10.4% to 34.1% 7.8% to 28.3% Weighted average 14.3 % 14.6 % Discount rate 1.8 % 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 September 30, 2020 December 31, 2019 Agency Non-Agency Agency Non-Agency Weighted average prepayment speed 14.9 % 11.5 % 11.7 % 12.2 % Weighted average delinquency rate 4.7 % 27.7 % 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 9.5 % 11.4 % 9.3 % 11.3 % Weighted average cost to service (in dollars) $ 96 $ 271 $ 85 $ 277 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 September 30, 2020 given hypothetical shifts in lifetime prepayments and yield assumptions: Adverse change in fair value 10% 20% Weighted average prepayment speeds $ (55,715) $ (106,603) Weighted average discount rate (15,696) (30,468) The sensitivity analysis measures the potential impact on fair values based on hypothetical changes, which in the case of our portfolio at September 30, 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 September 30, December 31, Life in years Range 1.0 to 8.2 2.4 to 7.8 Weighted average 6.1 6.0 Conditional repayment rate Range 10.4 % to 34.1% 7.8% to 28.3% Weighted average 14.3 % 14.6 % Discount rate 1.6 % 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 September 30, December 31, Weighted average prepayment speed 11.6 % 11.9 % Weighted average delinquency rate 29.4 % 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 11.7 % 10.7 % Weighted average cost to service (in dollars) $ 286 $ 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 September 30, 2020, IRLCs are classified as Level 3 assets as historical fallout rates required significant unobservable adjustments to account for the COVID-19 uncertainties. We use derivative instruments, including forward trades of MBS or Agency TBAs and exchange-traded interest rate swap futures, as economic hedging instruments. 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 | 9 Months Ended |
Sep. 30, 2020 | |
Receivables [Abstract] | |
Loans Held for Sale | Note 5 – Loans Held for Sale Loans Held for Sale - Fair Value Nine Months Ended September 30, 2020 2019 Beginning balance $ 208,752 $ 176,525 Originations and purchases (1) 4,378,999 615,303 Proceeds from sales (4,190,355) (581,678) Principal collections (21,479) (17,155) Transfers from (to): Loans held for investment, at fair value 1,900 1,405 Loans held for sale - Lower of cost or fair value — (1) Receivables, net (62,949) (2,248) REO (Other assets) (2,554) (1,501) Gain on sale of loans 45,762 24,005 Increase (decrease) in fair value of loans 1,925 (197) Other 6,965 (6,813) Ending balance (1) (2) (3) $ 366,966 $ 207,645 (1) We elected the fair value option for all newly repurchased loans after December 31, 2019, consistent with our fair value election of originated loans. (2) At September 30, 2020 and 2019, the balances include $(5.8) million and $(7.4) million, respectively, of fair value adjustments. (3) At September 30, 2020 and 2019, the balances include $26.4 million and zero, 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 Nine Months Ended September 30, 2020 2019 Beginning balance $ 66,517 $ 66,097 Purchases — 257,611 Proceeds from sales (45,974) (183,048) Principal collections (1,319) (5,802) Transfers from (to): Receivables, net 61 (78,865) REO (Other assets) — (2,739) Loans held for sale - Fair value — 1 Gain on sale of loans 474 3,364 Decrease in valuation allowance 412 4,473 Other 3,494 6,842 Ending balance (1) $ 23,665 $ 67,934 (1) At September 30, 2020 and 2019, the balances include $14.8 million and $58.6 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 September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Beginning balance $ 6,400 $ 10,057 $ 6,643 $ 11,569 Provision (45) 769 1,084 1,805 Transfer from Liability for indemnification obligations (Other liabilities) 42 266 117 340 Sales of loans (166) (3,996) (1,613) (6,618) Ending balance $ 6,231 $ 7,096 $ 6,231 $ 7,096 Gain on Loans Held for Sale, Net Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Gain on sales of loans, net MSRs retained on transfers of forward mortgage loans $ 22,096 $ 605 $ 37,785 $ 2,249 Gain on sale of repurchased Ginnie Mae loans 4,663 1,364 11,036 3,154 Gain on sale of forward mortgage loans 11,897 5,896 35,201 23,102 38,656 7,865 84,022 28,505 Change in fair value of IRLCs 4,828 697 16,876 401 Change in fair value of loans held for sale 3,061 610 3,367 936 Gain (loss) on economic hedge instruments 179 (106) (10,141) (3,344) Other (838) (54) (1,360) (186) $ 45,886 $ 9,012 $ 92,764 $ 26,312 |
Reverse Mortgages
Reverse Mortgages | 9 Months Ended |
Sep. 30, 2020 | |
Receivables [Abstract] | |
Reverse Mortgages | Note 6 – Reverse Mortgages Three Months Ended September 30, 2020 2019 Loans Held for Investment - Reverse Mortgages HMBS - Related Borrowings Loans Held for Investment - Reverse Mortgages HMBS - Related Borrowings Beginning balance $ 6,718,992 $ (6,477,616) $ 5,872,407 $ (5,745,383) Originations 299,628 — 248,877 — Securitization of HECM loans accounted for as a financing (incl. realized fair value changes) — (307,754) — (246,734) Repayments (principal payments received) (249,372) 247,793 (151,292) 149,079 Transfers to: Loans held for sale, at fair value (781) — (521) — Receivables, net 105 — (89) — REO (Other assets) (38) — (211) — Change in fair value 81,396 (68,966) 80,071 (60,927) Ending Balance $ 6,849,930 $ (6,606,543) $ 6,049,242 $ (5,903,965) Securitized loans (pledged to HMBS-Related Borrowings) $ 6,715,093 $ (6,606,543) $ 5,960,959 $ (5,903,965) Unsecuritized loans 134,837 88,283 Total $ 6,849,930 $ 6,049,242 Nine Months Ended September 30, 2020 2019 Loans Held for Investment - Reverse Mortgages HMBS - Related Borrowings Loans Held for Investment - Reverse Mortgages HMBS - Related Borrowings Beginning balance $ 6,269,596 $ (6,063,435) $ 5,472,199 $ (5,380,448) Cumulative effect of fair value election (1) 47,038 — — — Originations 867,702 — 675,169 — Securitization of HECM loans accounted for as a financing (incl. realized fair value changes) — (914,559) — (681,681) Repayments (principal payments received) (619,486) 613,026 (383,806) 377,094 Transfers to: Loans held for sale, at fair value (1,900) — (1,405) — Receivables, net (181) — (202) — REO (Other assets) (403) — (366) — Change in fair value 287,564 (241,575) 287,653 (218,930) Ending Balance $ 6,849,930 $ (6,606,543) $ 6,049,242 $ (5,903,965) (1) In conjunction with the adoption of ASU 2016-13, we elected the fair value option for future draw commitments (tails) on HECM reverse mortgage loans purchased or originated before December 31, 2018, which resulted in the recognition of the fair value of such tails through shareholders’ equity on January 1, 2020. Reverse Mortgage Revenue, net Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Gain on new originations (1) $ 13,545 $ 5,075 $ 33,156 $ 10,422 Change in fair value of securitized loans held for investment and HMBS-related borrowings, net (1,115) 14,069 12,832 58,301 Loan fees and other 2,069 1,116 5,067 4,153 $ 14,499 $ 20,260 $ 51,055 $ 72,876 |
Advances
Advances | 9 Months Ended |
Sep. 30, 2020 | |
Advances [Abstract] | |
Advances | Note 7 – Advances September 30, 2020 December 31, 2019 Principal and interest $ 299,355 $ 414,846 Taxes and insurance 342,704 422,383 Foreclosures, bankruptcy, REO and other 196,623 229,219 838,682 1,066,448 Allowance for losses (6,078) (9,925) Advances, net $ 832,604 $ 1,056,523 The following table summarizes the activity in net advances: Nine Months Ended September 30, 2020 2019 Beginning balance $ 1,056,523 $ 1,186,676 Asset acquisitions 14 1,457 New advances 667,577 394,964 Sales of advances (604) (747) Collections of advances and other (894,753) (557,868) Net decrease in allowance for losses (1) 3,847 13,962 Ending balance $ 832,604 $ 1,038,444 (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 September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Beginning balance $ 7,820 $ 27,653 $ 9,925 $ 23,259 Provision 2,173 729 5,944 4,532 Net charge-offs and other (1) (3,915) (19,085) (9,791) (18,494) Ending balance $ 6,078 $ 9,297 $ 6,078 $ 9,297 (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 | 9 Months Ended |
Sep. 30, 2020 | |
Transfers and Servicing [Abstract] | |
Mortgage Servicing | Note 8 – 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, partially offset by the remeasurement of the MSR fair value within MSR valuation adjustments, net. MSRs – Fair Value Measurement Method Three Months Ended September 30, 2020 2019 Agency Non-Agency Total Agency Non-Agency Total Beginning balance $ 305,085 $ 739,829 $ 1,044,914 $ 745,735 $ 566,898 $ 1,312,633 Sales and other transfers — (1) (1) — (15) (15) Additions: Recognized on the sale of residential mortgage loans 22,096 — 22,096 1,235 — 1,235 Purchase of MSRs 32,249 — 32,249 9,298 1,268 10,566 Servicing transfers and adjustments 16 — 16 — (3,105) (3,105) Changes in fair value (2): Changes in valuation inputs or other assumptions 4,074 13,749 17,823 (63,360) 252,293 188,933 Realization of expected future cash flows and other changes (23,856) (24,228) (48,084) (36,898) (17,796) (54,694) Ending balance $ 339,664 $ 729,349 $ 1,069,013 $ 656,010 $ 799,543 $ 1,455,553 MSRs – Fair Value Measurement Method For the Nine Months Ended September 30, 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 — (108) (108) (29) (556) (585) Additions: Recognized on the sale of residential mortgage loans 37,785 — 37,785 3,933 — 3,933 Purchase of MSRs 78,994 — 78,994 123,600 1,355 124,955 Servicing transfers and adjustments (1) (263,830) 403 (263,427) — (7,872) (7,872) Changes in fair value (2): Changes in valuation inputs or other assumptions (159,351) 20,679 (138,672) (235,036) 264,876 29,840 Realization of expected future cash flows and other changes (67,940) (64,014) (131,954) (102,045) (49,822) (151,867) Ending balance $ 339,664 $ 729,349 $ 1,069,013 $ 656,010 $ 799,543 $ 1,455,553 (1) Servicing transfers and adjustments include a $263.7 million derecognition of MSRs/Rights to MSRs effective with the February 20, 2020 notice of termination of the subservicing agreement between NRZ and PMC. See Note 9 — 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. MSR UPB UPB at September 30, 2020 December 31, 2019 September 30, 2019 Owned MSRs $ 71,301,427 $ 70,973,496 $ 71,372,447 NRZ pledged MSRs (1) 66,782,351 108,837,877 113,441,618 Total recognized MSRs $ 138,083,778 $ 179,811,373 $ 184,814,065 (1) MSRs subject to sale agreements with NRZ that do not meet sale accounting criteria. See Note 9 — Rights to MSRs. We acquired MSRs with a UPB of $9.9 billion and $11.9 billion during the nine months ended September 30, 2020 and 2019, respectively. We sold MSRs with a UPB of $55.7 million during the nine months ended September 30, 2020, mostly to Freddie Mac under the Voluntary Partial Cancellation (VPC) program for delinquent loans. We sold non-Agency MSRs with a UPB of $116.1 million during the nine months ended September 30, 2019. 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. We have not had any terminations as servicer as a result of a breach of any of these provisions in 2020 and 2019. At September 30, 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. No termination rights have been triggered as result of our servicer ratings in 2020 and 2019. Servicing Revenue Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Loan servicing and subservicing fees Servicing $ 53,410 $ 61,485 $ 161,154 $ 170,054 Subservicing 10,324 1,365 26,143 11,775 NRZ 91,015 146,567 299,089 443,505 154,749 209,417 486,386 625,334 Ancillary income Late charges 11,012 14,105 38,323 42,786 Custodial accounts (float earnings) 1,057 13,464 8,787 38,739 Loan collection fees 3,047 3,862 10,048 11,613 Home Affordable Modification Program (HAMP) fees (1) 104 1,216 532 4,558 Other, net 11,753 6,453 24,369 22,063 26,973 39,100 82,059 119,759 $ 181,722 $ 248,517 $ 568,445 $ 745,093 (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 |
Rights to MSRs
Rights to MSRs | 9 Months Ended |
Sep. 30, 2020 | |
Transfers and Servicing [Abstract] | |
Rights to MSRs | Note 9 — Rights to MSRs Ocwen and PMC 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 did not initially qualify for sale accounting treatment which resulted in such transactions being accounted for as secured financings. Until such time as the transaction qualifies as a sale for accounting purposes, 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 September 30, 2020 December 31, 2019 MSRs, at fair value (1) $ 577,309 $ 915,148 Due from NRZ (Receivables) Sales and transfers of MSRs (2) $ — $ 24,167 Subservicing fees and reimbursable expenses 2,364 9,197 $ 2,364 $ 33,364 Due to NRZ (Other liabilities) $ 95,803 $ 63,596 Financing liability - MSRs pledged, at fair value Original Rights to MSRs Agreements $ 577,309 $ 603,046 2017 Agreements and New RMSR Agreements (3) — 35,445 PMC MSR Agreements (1) — 312,102 $ 577,309 $ 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 were derecognized from our balance sheet, we continued to service these loans until deboarding on October 1, 2020, and accounted 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 Ocwen’s acquisition of PHH. (3) Income was recognized through April 30, 2020 as a reduction in the financing liability based on the term of the original agreements. Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Statements of Operations Servicing fees collected on behalf of NRZ (1) $ 91,015 $ 146,567 $ 299,089 $ 443,505 Less: Subservicing fee retained by Ocwen (1) 25,674 35,462 80,529 108,774 Net servicing fees remitted to NRZ 65,341 111,105 218,560 334,731 Less: Reduction (increase) in financing liability Changes in fair value: Original Rights to MSRs Agreements (10,401) (228,644) (18,503) (230,193) 2017 Agreements and New RMSR Agreements — (2,216) (903) (4,562) PMC MSR Agreements (1) — 30,156 40,720 111,034 (10,401) (200,704) 21,314 (123,721) Runoff and settlement: Original Rights to MSRs Agreements 15,650 11,170 41,572 31,617 2017 Agreements and New RMSR Agreements — 26,705 35,121 76,087 PMC MSR Agreements (1) — 15,881 7,492 49,469 15,650 53,756 84,185 157,173 Other 2,688 1,637 7,377 (2,023) Pledged MSR liability expense $ 57,404 $ 256,416 $ 105,684 $ 303,302 (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 do 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. Three Months Ended September 30, 2020 Financing Liability - MSRs Pledged Original Rights to MSRs Agreements 2017 Agreements and New RMSR Agreements PMC MSR Agreements Total Beginning Balance $ 582,558 $ — $ — $ 582,558 Changes in fair value: Original Rights to MSRs Agreements 10,402 — — 10,402 2017 Agreements and New RMSR Agreements — — — — PMC MSR Agreements — — — — Runoff and settlement: Original Rights to MSRs Agreements (15,651) — — (15,651) 2017 Agreements and New RMSR Agreements — — — — PMC MSR Agreements — — — — Balance at September 30, 2020 $ 577,309 $ — $ — $ 577,309 Three Months Ended September 30, 2019 Financing Liability - MSRs Pledged Original Rights to MSRs Agreements 2017 Agreements and New RMSR Agreements PMC MSR Agreements Total Beginning Balance $ 412,909 $ 88,103 $ 343,901 $ 844,913 Additions — — 345 345 Changes in fair value: Original Rights to MSRs Agreements 228,643 — — 228,643 2017 Agreements and New RMSR Agreements — 2,216 — 2,216 PMC MSR Agreements — — (30,156) (30,156) Runoff and settlement: Original Rights to MSRs Agreements (11,170) — — (11,170) 2017 Agreements and New RMSR Agreements — (26,705) — (26,705) PMC MSR Agreements — — (15,881) (15,881) Calls (1): Original Rights to MSRs Agreements (3,095) — — (3,095) 2017 Agreements and New RMSR Agreements — (2,169) — (2,169) Balance at September 30, 2019 $ 627,287 $ 61,445 $ 298,220 $ 986,952 Nine Months Ended September 30, 2020 Financing Liability - MSRs Pledged Original Rights to MSRs Agreements 2017 Agreements and New RMSR Agreements PMC MSR Agreements Total Beginning Balance $ 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 18,503 — — 18,503 2017 Agreements and New RMSR Agreements — 903 — 903 PMC MSR Agreements — — (40,720) (40,720) Runoff and settlement: Original Rights to MSRs Agreements (41,572) — — (41,572) 2017 Agreements and New RMSR Agreements — (35,121) — (35,121) 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 September 30, 2020 $ 577,309 $ — $ — $ 577,309 Nine Months Ended September 30, 2019 Financing Liability - MSRs Pledged Original Rights to MSRs Agreements 2017 Agreements and New RMSR Agreements PMC MSR Agreements Total Beginning Balance $ 436,511 $ 138,854 $ 457,491 $ 1,032,856 Purchases — — 1,221 1,221 Sales — — 11 11 Changes in fair value: Original Rights to MSRs Agreements 230,193 — — 230,193 2017 Agreements and New RMSR Agreements — 4,562 — 4,562 PMC MSR Agreements — — (111,034) (111,034) Runoff and settlement: Original Rights to MSRs Agreements (31,617) — — (31,617) 2017 Agreements and New RMSR Agreements — (76,087) — (76,087) PMC MSR Agreements — — (49,469) (49,469) Calls (1): Original Rights to MSRs Agreements (7,800) — — (7,800) 2017 Agreements and New RMSR Agreements — (5,884) — (5,884) Balance at September 30, 2019 $ 627,287 $ 61,445 $ 298,220 $ 986,952 (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 represented 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 expected to receive under the 2017 Agreements and the New RMSR Agreements. We recognized the cash received as a financing liability that we accounted for at fair value through the term of the original agreements (April 2020). Changes in fair value were 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 convenience or 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 September 30, 2020, the UPB of MSRs subject to the Servicing Agreements and the New RMSR Agreements is $69.1 billion, including $16.9 billion for which title has not transferred to NRZ. 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 $16.9 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 $16.9 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 had an initial term of three years from the initial transaction date of June 16, 2017, subject to certain transfer and termination provisions. The MSR sale transaction did not originally achieve sale accounting treatment. On February 20, 2020, we received a notice of termination from NRZ with respect to the PMC MSR Agreements, which accounted for $37.1 billion loan UPB at June 30, 2020, and $16.0 billion at September 30, 2020. This termination was for convenience and not for cause, and provided for loan deboarding fees to be paid by NRZ. As the sale accounting criteria were met upon the notice of termination, the MSRs and the Rights to MSRs were derecognized from our balance sheet on February 20, 2020 without any gain or loss on derecognition. We continued to service these loans until deboarding, and accounted for |
Receivables
Receivables | 9 Months Ended |
Sep. 30, 2020 | |
Receivables [Abstract] | |
Receivables | Note 10 – Receivables September 30, 2020 December 31, 2019 Servicing-related receivables: Government-insured loan claims - Forward $ 107,917 $ 122,557 Government-insured loan claims - Reverse 43,681 14,123 Sales and transfers of MSRs - Due from NRZ — 24,167 Subservicing fees and reimbursable expenses - Due from NRZ 2,364 9,197 Reimbursable expenses 5,604 13,052 Due from custodial accounts 8,212 27,175 Other 1,869 4,970 169,647 215,241 Income taxes receivable (1) 68,683 37,888 Other receivables 4,795 5,963 243,125 259,092 Allowance for losses (41,518) (57,872) $ 201,607 $ 201,220 (1) See Note 17 – Income Taxes At September 30, 2020 and December 31, 2019, the allowance for losses primarily related to receivables of our Servicing business. The allowance for losses related to FHA- or VA-insured loans repurchased from Ginnie Mae guaranteed securitizations (government-insured loan claims) was $40.8 million and $56.9 million at September 30, 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 September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Beginning balance (1) $ 53,310 $ 50,511 $ 56,868 $ 52,497 Provision 5,055 11,013 12,249 22,819 Charge-offs and other, net (17,607) (8,349) (28,359) (22,141) Ending balance $ 40,758 $ 53,175 $ 40,758 $ 53,175 (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 | 9 Months Ended |
Sep. 30, 2020 | |
Other Assets [Abstract] | |
Other Assets | Note 11 – Other Assets September 30, 2020 December 31, 2019 Contingent loan repurchase asset $ 580,599 $ 492,900 Derivatives, at fair value 22,843 6,007 Prepaid expenses 15,791 21,996 Prepaid representation, warranty and indemnification claims - Agency MSR sale 15,173 15,173 Prepaid lender fees, net 10,767 8,647 REO 8,354 8,556 Security deposits 2,181 2,163 Deferred tax asset, net 1,821 2,169 Mortgage backed securities, at fair value 2,150 2,075 Interest-earning time deposits 377 390 Other 2,412 3,164 $ 662,468 $ 563,240 |
Borrowings
Borrowings | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Borrowings | Note 12 – Borrowings Advance Match Funded Liabilities Borrowing Capacity September 30, 2020 December 31, 2019 Borrowing Type Maturity (1) Amorti- zation Date (1) Total Available (2) Weighted Average Interest Rate Balance Weighted Average Interest Rate Balance Advance Receivables Backed Notes - Series 2015-VF5 (3) Jun. 2051 Jun. 2021 $ 250,000 $ 158,080 4.28 % $ 91,920 3.36 % $ 190,555 Advance Receivables Backed Notes, Series 2019-T1 (4) Aug. 2050 Aug. 2020 — — — — 2.62 % 185,000 Advance Receivables Backed Notes, Series 2019-T2 (4) Aug. 2051 Aug. 2021 — — — — 2.53 % 285,000 Advance Receivables Backed Notes, Series 2020-T1 (4) Aug. 2052 Aug. 2022 475,000 — 1.49 % 475,000 — % — Total Ocwen Master Advance Receivables Trust (OMART) 725,000 158,080 1.94 % 566,920 2.79 % 660,555 Ocwen Freddie Advance Funding (OFAF) - Advance Receivables Backed Notes, Series 2015-VF1 (5) Jun. 2051 Jun. 2021 70,000 56,842 3.28 % 13,158 3.53 % 18,554 $ 795,000 $ 214,922 1.97 % $ 580,078 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 September 30, 2020, $10.0 million and none of the available borrowing capacity of the OMART and OFAF advance financing notes, respectively, could be used based on the amount of eligible collateral. (3) On May 7, 2020, we renewed this facility through June 30, 2021, and increased the total borrowing capacity of the Series 2015-VF5 variable notes from $200.0 million to $500.0 million, with interest computed based on the lender’s cost of funds plus a margin of 400 bps. On August 17, 2020, we reduced the total borrowing capacity to $250.0 million in conjunction with the issuance of new fixed-rate term notes with a borrowing capacity of $475.0 million, as disclosed in (4) below. (4) On August 12, 2020, we issued fixed-rate term notes with a total borrowing capacity of $475.0 million (Series 2020 T-1). The weighted average rate of the notes at September 30, 2020 is 1.49%, with rates on the individual classes of notes ranging from 1.28% to 5.42%. The Series 2019-T1 and 2019-T2 fixed-rate term notes were redeemed on August 17, 2020. (5) On May 7, 2020, we renewed this facility through June 30, 2021 and increased the borrowing capacity from $60.0 million to $70.0 million with interest computed based on the lender’s cost of funds plus a margin of 300 bps. Financing Liabilities Outstanding Balance Borrowing Type Collateral Interest Rate Maturity September 30, 2020 December 31, 2019 HMBS-related borrowings, at fair value (1) Loans held for investment 1ML + 260 bps (1) $ 6,606,543 $ 6,063,435 Other financing liabilities, at fair value MSRs pledged (Rights to MSRs), at fair value: Original Rights to MSRs Agreements MSRs (2) (2) 577,309 603,046 2017 Agreements and New RMSR Agreements MSRs (3) (3) — 35,445 PMC MSR Agreements MSRs (4) (4) — 312,102 577,309 950,593 Financing liability - Owed to securitization investors, at fair value: IndyMac Mortgage Loan Trust (INDX 2004-AR11) (5) Loans held for investment (5) (5) — 9,794 Residential Asset Securitization Trust 2003-A11 (RAST 2003-A11) (5) Loans held for investment (5) (5) 11,012 12,208 11,012 22,002 Total Other financing liabilities, at fair value 588,321 972,595 $ 7,194,864 $ 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. (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. See Note 9 — Rights to MSRs for additional information. (3) This financing liability arose in connection with lump sum payments received in 2017 upon transfer of legal title of the MSRs related to the Rights to MSRs transactions to NRZ and in 2018 in connection with the execution of the New RMSR Agreements as compensation for foregoing certain payments under the Original Rights to MSRs Agreements. See Note 9 — Rights to MSRs for additional information. (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 Corporation (PHH). As disclosed in Note 9 — 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. In June 2020, we sold the beneficial interests held in the INDX 2004-AR11 securitization trust and deconsolidated the trust . 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 RAST 2003-A11 Trust have maturity dates extending through October 2033. Other Secured Borrowings Available Borrowing Capacity Outstanding Balance Borrowing Type Collateral Interest Rate (1) Maturity Uncommitted Committed (2) September 30, 2020 December 31, 2019 SSTL (3) (3) 1-Month Euro-dollar rate + 600 bps with a Eurodollar floor of 100 bps (3) May 2022 $ — $ — $ 190,000 $ 326,066 Master repurchase agreement (4) Loans held for sale (LHFS) 1ML + 220 - 375 bps June 2021 19,756 — 155,244 91,573 Mortgage warehouse agreement (5) LHFS (reverse) Greater of 1ML + 250 bps or 3.50%; LIBOR Floor 0% August 2021 1,000 — — 72,443 Master repurchase agreement (6) LHFS (forward and reverse) 1ML + 225 bps forward; 1ML + 275 bps reverse Dec. 2020 50,000 8,869 191,131 139,227 Master repurchase agreement (7) LHFS (reverse) Prime + 0.0%; 4.0% floor January 2020 — — — 898 Master repurchase agreement (8) N/A 1ML + 180 bps; LIBOR Floor 35 bps N/A 50,000 — — — Participation agreement (9) LHFS (9) June 2021 120,000 — — 17,304 Master repurchase agreement (9) LHFS (9) June 2021 — 76,497 13,503 — Master repurchase agreement LHFS 1 ML + 250 bps March 2021 — 1,000 — — Mortgage warehouse agreement (10) LHFS 1ML + 350 bps; LIBOR Floor 525 bps Dec. 2020 — 48,211 1,789 10,780 Mortgage warehouse agreement (11) LHFS (reverse) 1ML + 250 bps; 3.50% floor Nov. 2020 19,904 — 80,096 — Mortgage warehouse agreement (12) LHFS (12) N/A 100,000 — — — Total mortgage loan warehouse facilities 360,660 134,577 441,763 332,225 Other Secured Borrowings Available Borrowing Capacity Outstanding Balance Borrowing Type Collateral Interest Rate (1) Maturity Uncommitted Committed (2) September 30, 2020 December 31, 2019 Agency MSR financing facility (13) MSRs, Advances 1ML + 450 bps June 2021 — 136,071 113,929 147,706 Ginnie Mae MSR financing facility (14) MSRs, Advances 1ML + 395 bps Dec. 2020 74,947 — 52,553 72,320 Ocwen Excess Spread-Collateralized Notes, Series 2019-PLS1 (15) MSRs 5.07% Nov. 2024 — — 74,021 94,395 Secured Notes, Ocwen Asset Servicing Income Series, Series 2014-1 (16) MSRs (15) Feb. 2028 — — 50,168 57,594 Total MSR financing facilities 74,947 136,071 290,671 372,015 $ 435,607 $ 270,648 922,434 1,030,306 Unamortized debt issuance costs - SSTL and PLS Notes (6,712) (3,381) Discount - SSTL (430) (1,134) $ 915,292 $ 1,025,791 Weighted average interest rate 4.51 % 4.74 % (1) 1ML was 0.15% and 1.76% at September 30, 2020 and December 31, 2019, respectively. (2) Of the borrowing capacity on mortgage loan warehouse facilities extended on a committed basis, $34.1 million of the available borrowing capacity could be used at September 30, 2020 based on the amount of eligible collateral that could be pledged. (3) 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. (4) The maximum borrowing under this agreement is $175.0 million, of which $110.0 million is available on a committed basis and the remainder is available at the discretion of the lender. (5) 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. On August 10, 2020, the maturity date of this agreement was extended to August 13, 2021. (6) 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. (7) This facility expired on January 22, 2020 and was not renewed. (8) T he lender provides financing for up to $50.0 million at the discretion of the lender. The agreement has no stated maturity date. (9) Under the original terms, the lender provided $300.0 million of borrowing capacity on an uncommitted basis. On June 25, 2020, this facility was amended to be comprised of two lines, a $120.0 million uncommitted participation agreement and a $90.0 million committed repurchase agreement. The maturity date of the facility was extended to June 24, 2021. The agreements allow the lender to acquire a 100% beneficial interest in the underlying mortgage loans. The transactions do not qualify for sale accounting treatment and are accounted for as secured borrowings. The lender earns the stated interest rate of the underlying mortgage loans less 35 bps, with a floor of 3.5%, while the loans are financed under both the participation and repurchase agreements. (10) Under this agreement, the lender provides financing for up to $50.0 million on a committed basis. (11) On March 12, 2020, we 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. In October 2020, the maturity date was extended to October 29, 2021 and the capacity was temporarily increased to $150.0 million until November 15, 2020 when it will be reduced to $100.0 million. (12) On September 30, 2020, we entered into a $100.0 million uncommitted repurchase agreement to finance the purchase of EBO loans from Ginnie Mae. The agreement has no stated maturity date, however each transaction has a maximum duration of four years. The cost of this line is set at each transaction date and is based on the interest rate on the collateral. (13) PMC’s obligations under this facility are secured by a lien on the related MSRs. Ocwen guarantees the obligations of PMC under this facility. On May 7, 2020, we renewed the facility through June 30, 2021 and reduced the maximum amount which we may borrow pursuant to the repurchase agreements from $300.0 million to $250.0 million on a committed basis. We also pledged the membership interest of the depositor for our OMART advance financing facility as additional collateral to this facility. 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. (14) PMC’s obligations under this facility are secured by a lien on the related Ginnie Mae MSRs. Ocwen guarantees the obligations of PMC under the facility. On June 30, 2020, we amended the facility to increase the borrowing capacity from $100.0 million to $127.5 million on an uncommitted basis, accelerate the maturity date to December 27, 2020 and include Ginnie Mae servicing advances as additional collateral. The lender earns the stated interest rate of 1ML plus a margin of 395 bps on borrowings prior to June 1, 2020, with any subsequent borrowings at a stated interest of 1ML plus a margin of 700 bps. See (13) above regarding daily margining requirements. (15) 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 had an initial principal amount of $100.0 million and amortize in accordance with a pre-determined schedule subject to modification under certain events. See Note 3 – Securitizations and Variable Interest Entities for additional information. See (12) above regarding daily margining requirements. (16) 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 September 30, 2020 December 31, 2019 Senior unsecured notes (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 (1,098) (1,470) Fair value adjustments (1) (265) (497) $ 311,689 $ 311,085 (1) These notes were assumed by Ocwen in connection with its acquisition of PHH. We are amortizing the 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 of 104.188% and 102.094% during the twelve-month periods beginning on November 15 th of 2019 and 2020, respectively. Thereafter, the redemption price is 100%. 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 September 30, 2020, the S&P issuer credit rating for Ocwen was “B-”. 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. The CreditWatch was removed on July 23, 2020 and the Outlook was revised to Negative. On August 21, 2020, Moody’s reaffirmed their ratings. It is possible that additional actions by credit rating agencies could have a material adverse impact on our liquidity and funding position, including materially changing the terms on which we may be able to borrow money. Covenants Under the terms of our debt agreements, we are subject to various qualitative and quantitative covenants. Collectively, these covenants include: • Financial covenants; • Covenants to operate in material compliance with applicable laws; • Restrictions on our ability to engage in various activities, including but not limited to incurring additional 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. Certain financial covenants were added as part of the amendment and extension of our SSTL on January 27, 2020. These include i) maintaining 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) maintaining minimum unrestricted cash of $125.0 million as of the last day of each fiscal quarter. As of September 30, 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 $125.0 million in consolidated liquidity, as defined, under certain of our advance match funded debt and mortgage warehouse agreements. In addition, as amended, the SSTL limits our capacity to repurchase our securities and prepay certain junior debt to a combined total of $10.0 million, among other restrictions. Our current repurchase capacity has been reduced to the extent of repurchases executed under Ocwen’s share repurchase program announced in February 2020. See Note 14 – Equity for additional information regarding share repurchases. 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 September 30, 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 $ 321,455 $ — $ — $ — $ — $ 321,455 Restricted cash 61,511 10,458 — 4,416 46,637 — MSRs (3) 1,069,013 — 577,886 490,583 — 48 Advances, net 832,604 660,816 — 61,081 — 110,707 Loans held for sale 390,631 — — 335,726 — 54,905 Loans held for investment 6,860,942 — 6,726,105 95,619 — 39,218 Receivables, net 201,607 — — 52,417 — 149,190 Premises and equipment, net 23,620 — — — — 23,620 Other assets 662,468 — — 7,077 597,953 57,438 Total assets $ 10,423,851 $ 671,274 $ 7,303,991 $ 1,046,919 $ 644,590 $ 756,581 (1) Sales and Other Commitments include 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 in connection with the Rights to MSRs transactions with NRZ which are accounted for as secured financings. Certain MSR cohorts with a negative fair value of $0.5 million that would be presented as Other are excluded from the eligible collateral of the facilities and are comprised of $17.4 million of negative fair value related to RMBS and $17.9 million of positive fair value related to private EBO and PLS MSRs. |
Other Liabilities
Other Liabilities | 9 Months Ended |
Sep. 30, 2020 | |
Other Liabilities Disclosure [Abstract] | |
Other Liabilities | Note 13 – Other Liabilities September 30, 2020 December 31, 2019 Contingent loan repurchase liability $ 580,599 $ 492,900 Due to NRZ - Advance collections, servicing fees and other 95,803 63,596 Other accrued expenses 71,093 67,241 Liability for indemnification obligations 44,170 52,785 Servicing-related obligations 40,659 88,167 Lease liability 34,426 44,488 Accrued legal fees and settlements 31,015 30,663 Checks held for escheat 29,106 31,959 Accrued interest payable 13,891 5,964 Liability for unfunded pension obligation 11,734 13,383 Liability for uncertain tax positions 17,123 17,197 Liability for unfunded India gratuity plan 5,416 5,331 Derivatives, at fair value 1,671 100 Liability for mortgage insurance contingency — 6,820 Other 20,755 21,579 $ 997,461 $ 942,173 |
Equity
Equity | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Equity | Note 14 – 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 377,484 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 $11.90. In addition, Ocwen paid $0.1 million in commissions. The repurchased shares were formally retired as of March 31, 2020. At September 30, 2020, no additional shares were repurchased. 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. |
Derivative Financial Instrument
Derivative Financial Instruments and Hedging Activities | 9 Months Ended |
Sep. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments and Hedging Activities | Note 15 – Derivative Financial Instruments and Hedging Activities The table below 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 nine months ended September 30, 2020 and 2019. September 30, 2020 December 31, 2019 Maturities Notional Fair value Maturities Notional Fair value Derivative Assets Forward sales of Reverse loans Nov. 2020 $ 20,000 $ 31 Jan. 2020 $ 40,000 $ 8 Forward loans IRLCs Oct. to Dec. 2020 857,257 21,606 Mar. 2020 204,020 4,745 Reverse loans IRLCs Oct. 2020 30,977 1,073 Jan. 2020 28,546 133 TBA forward MBS trades Oct. to Nov. 2020 400,000 117 Jan to Mar. 2020 1,200,000 1,121 Other n/a — 16 n/a — — Total $ 1,308,234 $ 22,843 $ 1,472,566 $ 6,007 Derivative Liabilities Forward sales of Reverse loans Oct. 2020 $ 60,000 $ (114) Jan. 2020 $ 20,000 $ (29) TBA forward MBS trades Oct. to Nov. 2020 190,000 (696) n/a — — Interest rate swap futures Dec. 2020 355,000 (213) n/a — — Borrowings - interest rate caps n/a — — May 2020 27,083 — Other n/a — (648) n/a — (71) Total $ 605,000 $ (1,671) $ 47,083 $ (100) 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 generally 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. Nine Months Ended September 30, 2020 Nine Months Ended September 30, 2019 Gain / (Loss) Gain / (Loss) Amount Financial Statement Line Amount Financial Statement Line Derivative Assets (Liabilities) Forward loans IRLCs $ 16,860 Gain on loans held for sale, net $ 401 Gain on loans held for sale, net Reverse loans IRLCs 940 Reverse mortgage revenue, net 802 Reverse mortgage revenue, net Forward LHFS trades — (3,689) Gain on loans held for sale, net Interest rate swap futures and TBA forward MBS trades (9,564) Gain on loans held for sale, net (Economic hedge) 345 Gain on loans held for sale, net (Economic hedge) Interest rate swap futures and TBA forward MBS trades 39,258 MSR valuation adjustments, net 322 MSR valuation adjustments, net Forward sales of Reverse loans (62) Reverse mortgage revenue, net 106 Reverse mortgage revenue, net Borrowings - interest rate caps — Other, net (358) Other, net Other (561) Gain on loans held for sale, net (220) Total $ 46,871 $ (2,291) 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 9 — 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 September 30, 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. Foreign Currency Exchange Rate Risk |
Interest Expense
Interest Expense | 9 Months Ended |
Sep. 30, 2020 | |
Other Income and Expenses [Abstract] | |
Interest Expense | Note 16 – Interest Expense Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Other secured borrowings $ 12,246 $ 12,918 $ 39,171 $ 31,933 Senior notes 6,658 8,039 19,977 25,053 Advance match funded liabilities 6,565 6,165 19,541 20,862 Other 1,346 2,384 4,868 6,788 $ 26,815 $ 29,506 $ 83,557 $ 84,636 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 17 – 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 $70.3 million and $1.2 million, respectively, and as such we recognized an income tax benefit of $71.5 million in our unaudited consolidated financial statements for the nine months ended September 30, 2020. We collected $51.4 million in the three months ended September 30, 2020, which represents the tax refund associated with the NOLs generated in 2018 carried back to prior tax years. 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 U.S. federal tax at a 21% rate to a tax year subject to tax at a 35% rate. Our estimation of the impact of the CARES Act on our 2020 financial statements is subject to change. |
Basic and Diluted Earnings (Los
Basic and Diluted Earnings (Loss) per Share | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Earnings (Loss) per Share | Note 18 – 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 and nine months ended September 30, 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 September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Basic earnings (loss) per share Net loss $ (9,420) $ (42,767) $ (32,955) $ (176,998) Weighted average shares of common stock 8,669,550 8,973,053 8,770,102 8,955,288 Basic loss per share $ (1.09) $ (4.77) $ (3.76) $ (19.76) Diluted earnings (loss) per share Net loss $ (9,420) $ (42,767) $ (32,955) $ (176,998) Weighted average shares of common stock 8,669,550 8,973,053 8,770,102 8,955,288 Effect of dilutive elements Stock option awards — — — — Common stock awards — — — — Dilutive weighted average shares of common stock 8,669,550 8,973,053 8,770,102 8,955,288 Diluted loss per share $ (1.09) $ (4.77) $ (3.76) $ (19.76) Stock options and common stock awards excluded from the computation of diluted loss per share Anti-dilutive (1) 193,144 196,875 218,020 222,870 Market-based (2) 125,395 60,147 125,395 60,147 (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 | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Business Segment Reporting | Note 19 – 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 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 through multiple channels. The loans are typically sold shortly after origination 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 Co-issue and Cash Window programs and bulk MSR purchases, and we acquire new subservicing through our enterprise sales. 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 and 2020 related to our cost re-engineering plan and initiatives. 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. Beginning in the third quarter of 2020, we began allocating interest expense on corporate debt, including the SSTL and Senior Notes, used to fund servicing advances and other servicing assets from Corporate Items and Other to Servicing. Amortization of debt issuance costs and discount are excluded from the interest expense allocation. The interest expense related to the corporate debt has been allocated to the Servicing segment for prior periods to conform to the current period presentation. The interest expense allocation for the nine months ended September 30, 2020 is $28.8 million, including $10.5 million, $9.5 million and $8.8 million for the three months ended March 31, 2020, June 30, 2020 and September 30, 2020, respectively. The interest expense allocation for the nine months ended September 30, 2019 is $43.3 million, including $13.8 million, $15.5 million and $14.0 million for the three months ended March 31, 2019, June 30, 2019 and September 30, 2019, respectively. Financial information for our segments is as follows: Three Months Ended September 30, 2020 Results of Operations Servicing Originations Corporate Items and Other Business Segments Consolidated Revenue (1) $ 185,892 $ 53,755 $ 9,388 $ 249,035 MSR valuation adjustments, net (1) (38,356) 12,375 (7,833) (33,814) Operating expenses (2) 79,522 35,421 34,579 149,522 Other (expense) income: Interest income 872 2,717 212 3,801 Interest expense (21,421) (3,163) (2,231) (26,815) Pledged MSR liability expense (57,434) — 30 (57,404) Other 2,211 197 937 3,345 Other expense, net (75,772) (249) (1,052) (77,073) Income (loss) before income taxes $ (7,758) $ 30,460 $ (34,076) $ (11,374) Three Months Ended September 30, 2019 Results of Operations Servicing Originations Corporate Items and Other Business Segments Consolidated Revenue $ 250,224 $ 29,502 $ 3,789 $ 283,515 MSR valuation adjustments, net 134,617 (56) — 134,561 Operating expenses (2) 135,507 20,609 23,169 179,285 Other (expense) income: Interest income 2,105 1,688 336 4,129 Interest expense (26,087) (2,133) (1,286) (29,506) Pledged MSR liability expense (256,499) — 83 (256,416) Gain on repurchase of senior secured notes — — 5,099 5,099 Other 3,917 498 (4,829) (414) Other (expense) income, net (276,564) 53 (597) (277,108) Income (loss) before income taxes $ (27,230) $ 8,890 $ (19,977) $ (38,317) Nine Months Ended September 30, 2020 Results of Operations Servicing Originations Corporate Items and Other Business Segments Consolidated Revenue (1) $ 579,883 $ 136,947 $ 13,071 $ 729,901 MSR valuation adjustments, net (1) (249,396) 25,861 (7,833) (231,368) Operating expenses (2) 242,735 91,129 97,681 431,545 Other (expense) income: Interest income 4,196 6,857 1,709 12,762 Interest expense (67,923) (8,423) (7,211) (83,557) Pledged MSR liability expense (105,771) — 87 (105,684) Other 8,332 167 (3,883) 4,616 Other expense, net (161,166) (1,399) (9,298) (171,863) Income (loss) before income taxes $ (73,414) $ 70,280 $ (101,741) $ (104,875) Nine Months Ended September 30, 2019 Results of Operations Servicing Originations Corporate Items and Other Business Segments Consolidated Revenue $ 752,010 $ 99,386 $ 10,345 $ 861,741 MSR valuation adjustments, net (121,497) (208) — (121,705) Operating expenses (2) (3) 435,377 62,813 36,428 534,618 Other (expense) income: Interest income 6,270 4,783 1,471 12,524 Interest expense (77,328) (5,200) (2,108) (84,636) Pledged MSR liability expense (303,385) — 83 (303,302) Gain on repurchase of senior secured notes — — 5,099 5,099 Other 6,332 1,161 (6,330) 1,163 Other (expense) income, net (368,111) 744 (1,785) (369,152) Income (loss) before income taxes $ (172,975) $ 37,109 $ (27,868) $ (163,734) (1) Revenue in the Corporate Items and Other segment for the three and nine months ended September 30, 2020 includes an inter-segment derivatives elimination of $7.8 million with a corresponding offset in MSR valuation adjustments, net. (2) Compensation and benefits expense in the Corporate Items and Other segment for the three and nine months ended September 30, 2020 and 2019 includes $1.0 million and $2.6 million, and $(0.1) million and $19.1 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. (3) Included in the Corporate Items and Other segment for the nine months ended September 30, 2019, we recorded in Professional services expense a recovery from a service provider of $30.7 million during the first quarter of 2019 of amounts previously recognized as expense. Total Assets Servicing Originations Corporate Items and Other Business Segments Consolidated September 30, 2020 $ 2,694,561 $ 7,259,257 $ 470,033 $ 10,423,851 December 31, 2019 $ 3,378,515 $ 6,459,367 $ 568,317 $ 10,406,199 September 30, 2019 $ 3,227,245 $ 6,225,394 $ 504,014 $ 9,956,653 Depreciation and Amortization Expense Servicing Originations Corporate Items and Other Business Segments Consolidated Three months ended September 30, 2020 Depreciation expense $ 219 $ 31 $ 4,055 $ 4,305 Amortization of debt issuance costs and discount 115 — 1,039 1,154 Three months ended September 30, 2019 Depreciation expense $ 105 $ (32) $ 6,386 $ 6,459 Amortization of debt issuance costs and discount — — 1,146 1,146 Nine Months Ended September 30, 2020 Depreciation expense $ 652 $ 102 $ 14,644 $ 15,398 Amortization of debt issuance costs and discount 343 — 4,992 5,335 Nine months ended September 30, 2019 Depreciation expense $ 1,674 $ 49 $ 24,297 $ 26,020 Amortization of debt issuance costs and discount — — 3,299 3,299 |
Regulatory Requirements
Regulatory Requirements | 9 Months Ended |
Sep. 30, 2020 | |
Brokers and Dealers [Abstract] | |
Regulatory Requirements | Note 20 – Regulatory Requirements Our business is subject to extensive regulation and supervision 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. 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 and local laws, and federal and local bankruptcy rules. These laws and regulations apply to all facets of our business, including, but not limited to, licensing, loan originations, consumer disclosures, default servicing and collections, foreclosure, filing of claims, registration of vacant or foreclosed properties, handling of escrow accounts, payment application, interest rate adjustments, assessment of fees, loss mitigation, use of credit reports, and safeguarding of non-public personally identifiable information about our customers. These complex requirements can and do change as laws and regulations are enacted, promulgated, amended, interpreted and enforced, 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. 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. 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. 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. We are also subject to seller/servicer obligations under agreements with the GSEs, HUD, FHA, VA and Ginnie Mae, including capital requirements related to tangible net worth, as defined by the applicable agency, an obligation to provide audited financial statements within 90 days of the applicable entity’s fiscal year end as well as extensive requirements regarding servicing, selling and other matters. We believe our licensed entities were in compliance with all of their minimum net worth requirements at September 30, 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 $224.5 million at September 30, 2020. PMC’s net worth was $376.5 million at September 30, 2020. We have faced and expect to continue to face heightened regulatory and public scrutiny as an organization and have entered into a number of significant settlements with federal and state regulators and state attorneys general that have imposed additional requirements on our business. Our failure to comply with our settlement obligations to our regulators or with applicable federal, state and local laws, regulations, licensing requirements and agency guidelines could lead to (i) administrative fines, penalties, sanctions or 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) additional costs to address these matters and comply with the terms of any resulting resolutions, (vii) suspension or termination of our approved agency seller/servicer status, (viii) inability to raise capital or otherwise fund our operations and (ix) inability to execute on our business strategy, which could have a material adverse impact on our business, reputation, results of operations, liquidity and financial condition. New York Department of Financial Services (NYDFS). We operate pursuant to certain regulatory requirements with the NYDFS, including obligations arising under a consent order entered into in March 2017 (the NY Consent Order) and the terms of the NY DFS’ conditional approval in September 2018 of our acquisition of PHH. The conditional approval includes reporting obligations and record retention and other requirements relating to the transfer of loans collateralized by New York property (New York loans) onto our servicing system 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 restricts our ability to acquire MSRs with respect to New York loans, so that Ocwen may not increase its aggregate portfolio of New York loans serviced or subserviced by Ocwen by more than 2% per year. 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 transferred all loans onto Black Knight MSP in 2019 and no longer service any loans on the REALServicing system. We believe we have complied with all terms of the PHH acquisition conditional approval to date. We continue to work with the NY DFS to address matters they raise with us as well as to fulfill our commitments under the NY Consent Order and PHH acquisition conditional approval. California Department of Business Oversight (CA DBO) . In January 2015 and February 2017, Ocwen Loan Servicing, LLC (OLS) entered into consent orders with the CA DBO relating to our alleged failure to produce certain information and documents during a routine licensing examination and relating to alleged servicing practices. We have completed all of our obligations under each of these consent orders. In October 2020, we entered into a consent order with the CA DBO in order to resolve a legacy PHH examination finding and, in conjunction therewith, agreed to pay $62,000 (sixty-two thousand dollars) in penalties. We continue to work with the CA DBO to address matters they raise with us as well as to fulfill our commitments under the consent order. |
Commitments
Commitments | 9 Months Ended |
Sep. 30, 2020 | |
Other Commitments [Abstract] | |
Commitments | Note 21 — 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 delinquent and 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 future advances are 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 interest payments until the borrower is 120 days delinquent for Freddie Mac loans and P&I until borrower resolution or liquidation for Fannie Mae loans. For Freddie Mac loans, servicers may submit claims for T&I and Corporate advances upon borrower resolution or liquidation. For Fannie Mae loans, we 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. We are generally reimbursed by NRZ the same day we fund P&I advances, or within no more than three days for servicing advances and certain P&I advances under the Ocwen 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 of record. As the servicer of record, 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. 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. See Note 9 — Rights to MSRs for additional information. As of September 30, 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) (2) $ 15,060,347 NRZ servicer of record (MSR title transferred to NRZ) - Ocwen MSR (1) 51,722,004 NRZ PMC Subservicing Agreement subject to termination (3) 16,007,995 Ocwen subservicer 2,802,967 Total NRZ UPB at September 30, 2020 $ 85,593,313 (1) The MSR sale transactions did not achieve sale accounting treatment. (2) NRZ’s associated outstanding servicing advances were approximately $584.6 million as of September 30, 2020. (3) On October 1, 2020, these loans were transferred out in connection with the termination of the PMC servicing agreement by NRZ. See Note 9 — Rights to MSRs. 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 an additional forbearance period of up to 180 days for FHA and VA guaranteed loans and GSE 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 have granted 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 are not significantly delinquent at the time forbearance was applied to the account, Ocwen places these borrowers on initial forbearance plans of three months. Ocwen provides monthly payment deferrals throughout the forbearance period which advance the due date and move the resulting missed payments 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 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, once we have advanced four months of missed payments on a loan, we 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. We 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 on Fannie Mae loans. Freddie Mac requires servicers to wait until borrower resolution or liquidation to submit claims for T&I and Corporate advances. The below table shows the loans under forbearance and the associated P&I advances: As of September 30, 2020 As of June 30, 2020 Number of Forbearance Plans (3) Estimated Monthly P&I Advance Obligation Number of Forbearance Plans (3) Estimated Monthly P&I Advance Obligation GSE loans 5,300 $ 6.5 6,600 $ 8.3 Ginnie Mae loans 10,100 9.2 9,900 9.2 PLS loans 14,500 21.0 18,000 26.5 Servicer 29,900 $ 36.7 34,500 $ 44.0 GSE loans 900 $ 0.9 10,100 $ 11.0 PLS loans 64,100 60.0 73,800 70.8 NRZ’s responsibility (1) 65,000 $ 60.9 83,900 $ 81.8 Subservicer (2) 8,000 $ 9.8 7,600 $ 10.1 No advance requirements 3,400 — 5,400 — Total 106,300 $ 107.4 131,400 $ 135.9 (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 9 — Rights to MSRs 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 September 30, 2020. This additional borrowing capacity is available on a scheduled or unscheduled payment basis. We also had short-term commitments to lend $857.3 million and $31.0 million in connection with our forward and reverse mortgage loan IRLCs, respectively, outstanding at September 30, 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: Nine Months Ended September 30, 2020 Active Inactive Total Number Amount Number Amount Number Amount Beginning balance 62 $ 10,546 258 $ 25,147 320 $ 35,693 Additions (1) 159 40,875 219 32,789 378 73,664 Recoveries, net (2) (7) (9,492) (26) (8,480) (33) (17,972) Transfers (10) (2,933) 10 2,933 — — Changes in value — 43 — (2,576) — (2,533) Ending balance 204 $ 39,039 461 $ 49,813 665 $ 88,852 (1) Total repurchases during the nine months ended September 30, 2020 includes 308 loans totaling $66.9 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 September 30, 2020, our servicing portfolio included significant client relationships with NRZ which represented 46% and 54% of our servicing portfolio UPB and loan count, respectively, and approximately 62% 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 $37.1 billion of our servicing portfolio UPB at June 30, 2020. The loans subject to termination were all deboarded and transferred to an affiliate of NRZ on September 1, 2020 and October 1, 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. The NRZ agreements affect our net earnings through the recognition of subservicing fees we retain, which amounted to $25.7 million and $80.5 million for the three and nine months ended September 30, 2020, respectively, 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 9 — 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 | 9 Months Ended |
Sep. 30, 2020 | |
Loss Contingency [Abstract] | |
Contingencies | Note 22 – 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, claims related to call recordings, 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 $31.0 million at September 30, 2020. We cannot currently estimate the amount, if any, of reasonably possible losses above amounts that have been recorded at September 30, 2020. As previously disclosed, we are subject to individual lawsuits relating to our FDCPA compliance and putative state law class actions based on state laws similar to the FDCPA. Ocwen has recently agreed to a settlement in principle of a putative class action , Morris v. PHH Mortgage Corp. , filed in March 2020 in the United States District Court for the Southern District of Florida, alleging that PMC’s practice of charging a fee to borrowers who voluntarily choose to use certain optional expedited payment options violates the FDCPA and its state law analogs. Several similar putative class actions have been filed against PMC and Ocwen since July 2019. Following mediation, PMC agreed to the terms of a settlement agreement to resolve all claims in the Morris matter. A motion requesting preliminary approval of the settlement was filed on August 25, 2020. If approved, settlement payments will be made via account credits for class members whose loans are currently serviced by PMC and via check payments for borrowers whose loans are no longer serviced by PMC and claim-in to the settlement. Ocwen expects final approval of the Morris settlement will resolve the claims of the substantial majority of the putative class members described in the other similar cases that Ocwen is defending. Counsel representing borrowers in other related class actions have attempted to intervene in the Morris settlement and could file objections to the proposed settlement. Ocwen cannot guarantee that the proposed settlement will receive final approval and in the absence of such approval, Ocwen cannot predict the eventual outcome of the Morris proceeding and similar putative class actions. In addition, we continue to be involved in legacy matters arising prior to Ocwen’s October 2018 acquisition of PHH, including a putative class action filed in 2008 in the United States District Court for the Eastern District of California against PHH and related entities in alleging that PHH’s legacy mortgage reinsurance arrangements between its captive reinsurer, Atrium Insurance Corporation, and certain mortgage insurance providers violated RESPA. Following numerous pre-trial developments, trial in the case, captioned Munoz v. PHH Corp. et al ., will likely be scheduled in 2021. PHH accrued $2.5 million when the case was filed in 2008 and that amount is included in the $31.0 million legal and regulatory accrual referenced above. At this time, Ocwen is unable to predict the outcome of this lawsuit or any additional lawsuits that may be filed, the possible loss or range of loss, if any, associated with the resolution of such lawsuits or the potential impact such lawsuits may have on us or our operations. Ocwen intends to vigorously defend against this lawsuit. If our efforts to defend this lawsuit are not successful, our business, financial condition liquidity and results of operations could be materially and adversely affected. Ocwen is involved in a 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. 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 (i) on whose behalf we service or subservice loans, or did so in the past and (ii) to whom we sold loans or mortgage servicing rights. We are currently involved in a dispute with a former subservicing client, HSBC Bank USA, N.A. (HSBC), which filed a Summons with Notice in the Supreme Court of the State of New York, indicating its intent to file a complaint against PHH. HSBC’s claims relate to alleged breaches of agreements entered into under a prior subservicing arrangement. We believe we have strong factual and legal defenses to all of HSBC’s claims and we intend to vigorously defend ourselves. 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 litigation or otherwise. We have also received demands for indemnification for alleged breaches of representations and warranties from parties to whom we sold loans and we are currently a defendant in an adversary proceeding brought by a bankruptcy plan administrator seeking to enforce its right to contractual indemnification for the sale of allegedly defective mortgage loans. 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 certificate holders, 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 in November 2019. Ocwen and the CFPB completed a summary judgment briefing on September 4, 2020, and the parties participated in a mediation session on October 23, 2020. The Court ordered the parties to mediate before ruling on the summary judgment briefs and setting a possible trial date. As a result, we do not anticipate a decision on summary judgment until late 2020 or 2021. To the extent the summary judgment ruling does not conclude the case and we do not otherwise resolve the matter before trial, we presently anticipate a trial will take place in the second half of 2021 or later. Prior to the initiation of legal proceedings, we had been engaged with the CFPB in efforts to resolve the matter. We are taking all reasonable and prudent actions to resolve the CFPB matter in the shortest time frame possible that would result in an acceptable financial outcome for our stakeholders. The Court has consolidated both the CFPB and Florida matters for trial, but has removed them from the October 2020 trial calendar and will reset the trial for a later date. As noted below, however, because the Florida matter is now resolved, when the Court schedules the bench trial it will only include the claims of the CFPB. Our current accrual with respect to this matter is included in the $31.0 million legal and regulatory accrual referenced above. The outcome of the matters raised by the CFPB, whether through negotiated settlements, court rulings or otherwise, could 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 administrative 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. These administrative actions were applicable to OLS, but additional Ocwen entities were named in some actions, including Ocwen Financial Corporation, OMS, Homeward, Liberty, OFSPL and Ocwen Business Solutions, Inc. (OBS). As discussed further below, we have now resolved all of the state regulatory matters arising in April 2017. In resolving these matters, we entered into agreements containing certain restrictions and commitments with respect to the operation of our business and our regulatory compliance activities, including restrictions and conditions relating to acquisitions of MSRs, a transition to an alternate loan servicing system from the REALServicing system, engagement of third-party auditors, escrow and data testing, error remediation, and financial condition reporting. In some instances, we also provided borrower financial remediation and made payments to state regulators. 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, 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. We continue to be subject to obligations under these agreements, including completing the final phase of a data integrity audit under our agreement with the State of Massachusetts. Concurrent with the initiation of the administrative actions 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 (ten thousand dollars) 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. On May 6, 2020, Ocwen filed its answer and affirmative defenses to the amended complaint. Ocwen and the plaintiffs completed a summary judgment briefing on September 4, 2020. On October 15, 2020, we announced that we had reached an agreement to resolve the Florida plaintiffs’ lawsuit. Pursuant to that agreement, Ocwen is required to pay the State of Florida $5.2 million within 60 days of the Court entering the final consent judgment between the parties. Ocwen then has an additional two years to provide debt forgiveness totaling at least $1.0 million to certain Florida borrowers. If Ocwen is unable to do so, then two years from now it will owe the State of Florida an additional $1.0 million. We anticipate that we will be able to satisfy the debt forgiveness obligation and therefore do not presently anticipate that the additional $1 million payment will be required. In addition, Ocwen has agreed to certain late fee waivers, a targeted loan modification program for certain eligible Florida borrowers, and certain non-monetary reporting and handling obligations. Ocwen did not admit any fault or liability as part of the settlement. The settlement amount is included in the $31.0 million litigation and regulatory matters accrual referenced above. Although we believe we had strong defenses to all of Florida’s claims, this was an opportunity to resolve one of Ocwen’s remaining significant legacy matters, and to do so without incurring further expense in preparing for trial next year. Our accrual with respect to the administrative and legal actions initiated in April 2017 is included in the $31.0 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 Ocwen 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 related loans under certain circumstances. While the language in the purchase contracts varies, they generally contain provisions that require us to indemnify purchasers of related loans or repurchase such loans if: • representations and warranties concerning loan quality, contents of the loan file or loan underwriting circumstances are inaccurate; • adequate mortgage insurance is not secured within a certain period after closing; • a mortgage insurance provider denies coverage; or • there is a failure to comply, at the individual loan level or otherwise, with regulatory requirements. We received origination representations and warranties from our network of approved originators in connection with loans we purchased through our correspondent lending channel. To the extent that we have recourse against a third-party originator, we may recover part or all of any loss we incur. We believe that, as a result of historical actions by investors, many purchasers of residential mortgage loans are particularly aware of the conditions under which originators must indemnify or repurchase loans and under which such purchasers would benefit from enforcing |
Organization and Basis of Pre_2
Organization and Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 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 and nine months ended September 30, 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, the unaudited consolidated statement of operations for the three and nine months ended September 30, 2019 and the unaudited consolidated statement of cash flows for the nine months ended September 30, 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: Periods Ended September 30, 2019 Reclassification within the Statement of Operations Three Months Nine Months Revenue From Gain on loans held for sale, net $ 7,001 $ 22,371 From Other revenue, net 14,062 52,839 From Servicing and subservicing fees (803) (2,334) To Reverse mortgage revenue, net (New line item) 20,260 72,876 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, 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 now separately present Amortization of debt issuance costs which was previously included in Other, net. • Within the Cash flows from investing activities section, we now separately present Proceeds from sale of real estate which was previously included in Other, net. • Within the Cash flows from financing activities section, we now separately present proceeds and repayments on mortgage loan warehouse facilities, net, MSR financing facilities and other financing liabilities. These amounts were previously reported as Proceeds from (Repayment of) mortgage loan warehouse facilities and other secured borrowings. |
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 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. We do not anticipate that our adoption of this standard will have a material impact on our consolidated financial statements. Reference Rate Reform: Facilitation of the Effects of Reference Rate Reform on Financial Reporting (ASU 2020-04) This standard provides for optional expedients and other guidance regarding the accounting related to modifications of contracts, hedging relationships and other transactions affected by the expected phase-out of the London Inter-bank Offered Rate (LIBOR) by the end of 2021. This guidance is effective upon issuance in March 2020 through December 31, 2022 and allows for retrospective application to contract modifications as early as January 1, 2020. We have elected to retrospectively adopt this ASU as of January 1, 2020 which resulted in no immediate impact on our consolidated financial statements. Although we do not have any hedge accounting relationships, many of our debt facilities and loan agreements incorporate LIBOR as referenced interest rate. Some of these facilities and loan agreements either mature prior to the end of 2021 or have terms in place that provide for an alternative to LIBOR upon its phase-out. We do not anticipate that this standard will have a material impact on our consolidated financial statements. |
Organization and Basis of Pre_3
Organization and Basis of Presentation - (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Reclassifications of Prior Period Amounts to Confirm with Current Period Presentation | 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: Periods Ended September 30, 2019 Reclassification within the Statement of Operations Three Months Nine Months Revenue From Gain on loans held for sale, net $ 7,001 $ 22,371 From Other revenue, net 14,062 52,839 From Servicing and subservicing fees (803) (2,334) To Reverse mortgage revenue, net (New line item) 20,260 72,876 Total revenue — — |
Severance and Restructuring C_2
Severance and Restructuring Charges (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Restructuring and Related Activities [Abstract] | |
Summary of Plan Costs Incurred | The following table provides a summary of plan costs incurred in 2019: Employee-related Facility-related Other Total First quarter $ 20,787 $ — $ 1,328 $ 22,115 Second quarter 3,460 3,047 3,619 10,126 Third quarter 7,266 3,596 7,485 18,347 Fourth quarter 4,191 3,490 6,700 14,381 Total costs incurred $ 35,704 $ 10,133 $ 19,132 $ 64,969 |
Securitizations and Variable _2
Securitizations and Variable Interest Entities (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Servicing Assets at Fair Value [Line Items] | |
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 September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Proceeds received from securitizations $ 2,364,829 $ 235,175 $ 4,256,082 $ 674,108 Servicing fees collected (1) 12,561 8,866 35,204 37,610 Purchases of previously transferred assets, net of claims reimbursed (2,061) (2,093) (6,338) (3,140) $ 2,375,329 $ 241,948 $ 4,284,948 $ 708,578 |
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: September 30, 2020 December 31, 2019 Carrying value of assets MSRs, at fair value $ 101,506 $ 109,581 Advances 182,450 141,829 UPB of loans transferred 17,126,989 14,490,984 Maximum exposure to loss $ 17,410,945 $ 14,742,394 |
Carrying Value And Classification Of Assets And Liabilities Of Agency MSR Financing Facility | The table below presents the carrying value and classification of the assets and liabilities of the Agency MSR financing facility: September 30, 2020 December 31, 2019 MSRs pledged (MSRs, at fair value) $ 234,106 $ 245,533 Unamortized debt issuance costs (Other assets) 1,775 946 Debt service account (Restricted cash) 102 100 Outstanding borrowings (Other secured borrowings, net) 113,929 147,706 |
Carrying Value And Classification Of Assets And Liabilities Of PLS Notes Facility | The table below presents the carrying value and classification of the assets and liabilities of the PLS Notes facility: September 30, 2020 December 31, 2019 MSRs pledged (MSRs, at fair value) $ 133,169 $ 146,215 Debt service account (Restricted cash) 2,549 3,002 Outstanding borrowings (Other secured borrowings, net) 74,021 94,395 Unamortized debt issuance costs (Other secured borrowings, net) (964) (1,208) |
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 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. September 30, 2020 December 31, 2019 Loans held for investment, at fair value - Restricted for securitization investors $ 11,012 $ 23,342 Financing liability - Owed to securitization investors, at fair value 11,012 22,002 |
Fair Value (Tables)
Fair Value (Tables) | 9 Months Ended |
Sep. 30, 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: September 30, 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) (e) 3, 2 $ 366,966 $ 366,966 $ 208,752 $ 208,752 Loans held for sale, at lower of cost or fair value (b) 3 23,665 23,665 66,517 66,517 Total Loans held for sale $ 390,631 $ 390,631 $ 275,269 $ 275,269 Loans held for investment Loans held for investment - Reverse mortgages (a) 3 $ 6,849,930 $ 6,849,930 $ 6,269,596 $ 6,269,596 Loans held for investment - Restricted for securitization investors (a) 3 11,012 11,012 23,342 23,342 Total loans held for investment $ 6,860,942 $ 6,860,942 $ 6,292,938 $ 6,292,938 Advances, net (c) 3 $ 832,604 $ 832,604 $ 1,056,523 $ 1,056,523 Receivables, net (c) 3 201,607 201,607 201,220 201,220 Mortgage-backed securities (a) 3 2,150 2,150 2,075 2,075 Corporate bonds (a) 2 211 211 441 441 September 30, 2020 December 31, 2019 Level Carrying Value Fair Value Carrying Value Fair Value Financial liabilities: Advance match funded liabilities (c) 3 $ 580,078 $ 580,602 $ 679,109 $ 679,507 Financing liabilities: HMBS-related borrowings (a) 3 $ 6,606,543 $ 6,606,543 $ 6,063,435 $ 6,063,435 Financing liability - MSRs pledged (Rights to MSRs) (a) 3 577,309 577,309 950,593 950,593 Financing liability - Owed to securitization investors (a) 3 11,012 11,012 22,002 22,002 Total Financing liabilities $ 7,194,864 $ 7,194,864 $ 7,036,030 $ 7,036,030 Other secured borrowings: Senior secured term loan (c) (d) 2 $ 183,822 $ 188,666 $ 322,758 $ 324,643 Other (c) (d) 3 731,470 701,037 703,033 686,146 Total Other secured borrowings $ 915,292 $ 889,703 $ 1,025,791 $ 1,010,789 Senior notes: Senior unsecured notes (c) (d) 2 $ 21,278 $ 18,501 $ 21,046 $ 13,821 Senior secured notes (c) (d) 2 290,411 267,314 290,039 256,201 Total Senior notes $ 311,689 $ 285,815 $ 311,085 $ 270,022 Derivative financial instrument assets (liabilities) Interest rate lock commitments (a) (f) 3, 2 $ 22,679 $ 22,679 $ 4,878 $ 4,878 Forward trades - Loans held for sale (a) 1 (83) (83) (21) (21) TBA / Forward mortgage-backed securities (MBS) trades and futures - MSR hedging (a) 1 (579) (579) 1,121 1,121 Derivatives Futures (a) 1 (213) (213) — — MSRs (a) 3 $ 1,069,013 $ 1,069,013 $ 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 12 – Borrowings for additional information . (e) Loans repurchased from Ginnie Mae securitizations with a fair value of $26.4 million at September 30, 2020 are classified as Level 3. The remaining balance of loans held for sale at fair value at September 30, 2020 is classified as Level 2. The entire balance of Loans held for sale at fair value at December 31, 2019 was classified as Level 2. (f) Level 3 at September 30, 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 - Restricted for Securitization Investors Financing Liability - Owed to Securitization Investors Loans Held for Sale - Fair Value Mortgage-Backed Securities IRLCs Three months ended September 30, 2020 Beginning balance $ 11,664 $ (11,664) $ 25,950 $ 1,726 $ 17,818 Purchases, issuances, sales and settlements Purchases — — 45,445 — — Issuances — — — — 87,311 Sales — — (45,723) — — Settlements (652) 652 356 — — Transfers (to) from: Loans held for sale, at fair value — — — — (77,785) Receivables, net — — 157 — — (652) 652 235 — 9,526 Change in fair value included in earnings — — 224 424 (4,665) — — 224 424 (4,665) Transfers in and / or out of Level 3 — — — — — Ending balance $ 11,012 $ (11,012) $ 26,409 $ 2,150 $ 22,679 Loans Held for Investment - Restricted for Securitization Investors Financing Liability - Owed to Securitization Investors Mortgage-Backed Securities Derivatives - Interest Rate Caps Three months ended September 30, 2019 Beginning balance $ 25,324 $ (23,697) $ 2,014 $ 47 Purchases, issuances, sales and settlements Purchases — — — — Issuances — — — — Sales — — — — Settlements (879) 870 — — (879) 870 — — Change in fair value included in earnings — — 22 (47) — — 22 (47) Transfers in and / or out of Level 3 — — — — Ending balance $ 24,445 $ (22,827) $ 2,036 $ — Loans Held for Investment - Restricted for Securitization Investors Financing Liability - Owed to Securitization Investors Loans Held for Sale - Fair Value Mortgage-backed Securities IRLCs Nine Months Ended September 30, 2020 Beginning balance $ 23,342 $ (22,002) $ — $ 2,075 $ — Purchases, issuances, sales and settlements Purchases — — 103,955 — — Issuances — — — — 144,931 Deconsolidation of mortgage-backed securitization trusts (10,715) 9,519 — — Sales — — (104,273) — — Settlements (1,615) 1,615 (70) — — Transfers (to) from: Loans held for sale, at fair value — — — — (128,224) Receivables, net — — (113) — — (12,330) 11,134 (501) — 16,707 Change in fair value included in earnings — (144) 1,328 75 (4,506) Transfers in and / or out of Level 3 — — 25,582 — 10,478 Ending balance $ 11,012 $ (11,012) $ 26,409 $ 2,150 $ 22,679 Loans Held for Investment - Restricted for Securitization Investors Financing Liability - Owed to Securitization Investors Mortgage-backed Securities Derivatives - Interest Rate Caps Nine Months Ended September 30, 2019 Beginning balance $ 26,520 $ (24,815) $ 1,502 $ 678 Purchases, issuances, sales and settlements Purchases — — — — Issuances — — — — Sales — — — — Settlements (2,075) 1,988 — — (2,075) 1,988 — — Change in fair value included in earnings — — 534 (678) — — 534 (678) Transfers in and / or out of Level 3 — — Ending balance $ 24,445 $ (22,827) $ 2,036 $ — |
Schedule of Significant Assumptions used in Valuation | Significant valuation assumptions September 30, December 31, Life in years Range 1.0 to 8.2 2.4 to 7.8 Weighted average 6.1 6.0 Conditional repayment rate Range 10.4% to 34.1% 7.8% to 28.3% Weighted average 14.3 % 14.6 % Discount rate 1.8 % 2.8 % Significant valuation assumptions September 30, 2020 December 31, 2019 Agency Non-Agency Agency Non-Agency Weighted average prepayment speed 14.9 % 11.5 % 11.7 % 12.2 % Weighted average delinquency rate 4.7 % 27.7 % 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 9.5 % 11.4 % 9.3 % 11.3 % Weighted average cost to service (in dollars) $ 96 $ 271 $ 85 $ 277 Significant valuation assumptions September 30, December 31, Life in years Range 1.0 to 8.2 2.4 to 7.8 Weighted average 6.1 6.0 Conditional repayment rate Range 10.4 % to 34.1% 7.8% to 28.3% Weighted average 14.3 % 14.6 % Discount rate 1.6 % 2.7 % Significant valuation assumptions September 30, December 31, Weighted average prepayment speed 11.6 % 11.9 % Weighted average delinquency rate 29.4 % 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 11.7 % 10.7 % Weighted average cost to service (in dollars) $ 286 $ 223 |
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 September 30, 2020 given hypothetical shifts in lifetime prepayments and yield assumptions: Adverse change in fair value 10% 20% Weighted average prepayment speeds $ (55,715) $ (106,603) Weighted average discount rate (15,696) (30,468) |
Loans Held for Sale (Tables)
Loans Held for Sale (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Receivables [Abstract] | |
Schedule of Loans Held for Sale Fair Value | Loans Held for Sale - Fair Value Nine Months Ended September 30, 2020 2019 Beginning balance $ 208,752 $ 176,525 Originations and purchases (1) 4,378,999 615,303 Proceeds from sales (4,190,355) (581,678) Principal collections (21,479) (17,155) Transfers from (to): Loans held for investment, at fair value 1,900 1,405 Loans held for sale - Lower of cost or fair value — (1) Receivables, net (62,949) (2,248) REO (Other assets) (2,554) (1,501) Gain on sale of loans 45,762 24,005 Increase (decrease) in fair value of loans 1,925 (197) Other 6,965 (6,813) Ending balance (1) (2) (3) $ 366,966 $ 207,645 (1) We elected the fair value option for all newly repurchased loans after December 31, 2019, consistent with our fair value election of originated loans. (2) At September 30, 2020 and 2019, the balances include $(5.8) million and $(7.4) million, respectively, of fair value adjustments. |
Schedule of Loans Held for Sale at Lower Cost or Fair Value, Activity | Loans Held for Sale - Lower of Cost or Fair Value Nine Months Ended September 30, 2020 2019 Beginning balance $ 66,517 $ 66,097 Purchases — 257,611 Proceeds from sales (45,974) (183,048) Principal collections (1,319) (5,802) Transfers from (to): Receivables, net 61 (78,865) REO (Other assets) — (2,739) Loans held for sale - Fair value — 1 Gain on sale of loans 474 3,364 Decrease in valuation allowance 412 4,473 Other 3,494 6,842 Ending balance (1) $ 23,665 $ 67,934 |
Schedule of Changes in Allowance For Losses | Valuation Allowance - Loans Held for Sale at Lower of Cost or Fair Value Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Beginning balance $ 6,400 $ 10,057 $ 6,643 $ 11,569 Provision (45) 769 1,084 1,805 Transfer from Liability for indemnification obligations (Other liabilities) 42 266 117 340 Sales of loans (166) (3,996) (1,613) (6,618) Ending balance $ 6,231 $ 7,096 $ 6,231 $ 7,096 Allowance for Losses Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Beginning balance $ 7,820 $ 27,653 $ 9,925 $ 23,259 Provision 2,173 729 5,944 4,532 Net charge-offs and other (1) (3,915) (19,085) (9,791) (18,494) Ending balance $ 6,078 $ 9,297 $ 6,078 $ 9,297 (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 September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Gain on sales of loans, net MSRs retained on transfers of forward mortgage loans $ 22,096 $ 605 $ 37,785 $ 2,249 Gain on sale of repurchased Ginnie Mae loans 4,663 1,364 11,036 3,154 Gain on sale of forward mortgage loans 11,897 5,896 35,201 23,102 38,656 7,865 84,022 28,505 Change in fair value of IRLCs 4,828 697 16,876 401 Change in fair value of loans held for sale 3,061 610 3,367 936 Gain (loss) on economic hedge instruments 179 (106) (10,141) (3,344) Other (838) (54) (1,360) (186) $ 45,886 $ 9,012 $ 92,764 $ 26,312 |
Reverse Mortgages (Tables)
Reverse Mortgages (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Receivables [Abstract] | |
Schedule of Loans Held For Investment and HMBS Related Borrowings | Three Months Ended September 30, 2020 2019 Loans Held for Investment - Reverse Mortgages HMBS - Related Borrowings Loans Held for Investment - Reverse Mortgages HMBS - Related Borrowings Beginning balance $ 6,718,992 $ (6,477,616) $ 5,872,407 $ (5,745,383) Originations 299,628 — 248,877 — Securitization of HECM loans accounted for as a financing (incl. realized fair value changes) — (307,754) — (246,734) Repayments (principal payments received) (249,372) 247,793 (151,292) 149,079 Transfers to: Loans held for sale, at fair value (781) — (521) — Receivables, net 105 — (89) — REO (Other assets) (38) — (211) — Change in fair value 81,396 (68,966) 80,071 (60,927) Ending Balance $ 6,849,930 $ (6,606,543) $ 6,049,242 $ (5,903,965) Securitized loans (pledged to HMBS-Related Borrowings) $ 6,715,093 $ (6,606,543) $ 5,960,959 $ (5,903,965) Unsecuritized loans 134,837 88,283 Total $ 6,849,930 $ 6,049,242 Nine Months Ended September 30, 2020 2019 Loans Held for Investment - Reverse Mortgages HMBS - Related Borrowings Loans Held for Investment - Reverse Mortgages HMBS - Related Borrowings Beginning balance $ 6,269,596 $ (6,063,435) $ 5,472,199 $ (5,380,448) Cumulative effect of fair value election (1) 47,038 — — — Originations 867,702 — 675,169 — Securitization of HECM loans accounted for as a financing (incl. realized fair value changes) — (914,559) — (681,681) Repayments (principal payments received) (619,486) 613,026 (383,806) 377,094 Transfers to: Loans held for sale, at fair value (1,900) — (1,405) — Receivables, net (181) — (202) — REO (Other assets) (403) — (366) — Change in fair value 287,564 (241,575) 287,653 (218,930) Ending Balance $ 6,849,930 $ (6,606,543) $ 6,049,242 $ (5,903,965) |
Schedule of Reverse Mortgage Revenue, Net | Reverse Mortgage Revenue, net Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Gain on new originations (1) $ 13,545 $ 5,075 $ 33,156 $ 10,422 Change in fair value of securitized loans held for investment and HMBS-related borrowings, net (1,115) 14,069 12,832 58,301 Loan fees and other 2,069 1,116 5,067 4,153 $ 14,499 $ 20,260 $ 51,055 $ 72,876 |
Advances (Tables)
Advances (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Advances [Abstract] | |
Schedule of Advances Paid on Behalf of Borrowers or on Foreclosed Properties | September 30, 2020 December 31, 2019 Principal and interest $ 299,355 $ 414,846 Taxes and insurance 342,704 422,383 Foreclosures, bankruptcy, REO and other 196,623 229,219 838,682 1,066,448 Allowance for losses (6,078) (9,925) Advances, net $ 832,604 $ 1,056,523 |
Schedule of Activity in Advances | The following table summarizes the activity in net advances: Nine Months Ended September 30, 2020 2019 Beginning balance $ 1,056,523 $ 1,186,676 Asset acquisitions 14 1,457 New advances 667,577 394,964 Sales of advances (604) (747) Collections of advances and other (894,753) (557,868) Net decrease in allowance for losses (1) 3,847 13,962 Ending balance $ 832,604 $ 1,038,444 (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 September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Beginning balance $ 6,400 $ 10,057 $ 6,643 $ 11,569 Provision (45) 769 1,084 1,805 Transfer from Liability for indemnification obligations (Other liabilities) 42 266 117 340 Sales of loans (166) (3,996) (1,613) (6,618) Ending balance $ 6,231 $ 7,096 $ 6,231 $ 7,096 Allowance for Losses Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Beginning balance $ 7,820 $ 27,653 $ 9,925 $ 23,259 Provision 2,173 729 5,944 4,532 Net charge-offs and other (1) (3,915) (19,085) (9,791) (18,494) Ending balance $ 6,078 $ 9,297 $ 6,078 $ 9,297 (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) | 9 Months Ended |
Sep. 30, 2020 | |
Transfers and Servicing [Abstract] | |
Schedule of Activity Related to MSRs - Fair Value Measurement Method | MSRs – Fair Value Measurement Method Three Months Ended September 30, 2020 2019 Agency Non-Agency Total Agency Non-Agency Total Beginning balance $ 305,085 $ 739,829 $ 1,044,914 $ 745,735 $ 566,898 $ 1,312,633 Sales and other transfers — (1) (1) — (15) (15) Additions: Recognized on the sale of residential mortgage loans 22,096 — 22,096 1,235 — 1,235 Purchase of MSRs 32,249 — 32,249 9,298 1,268 10,566 Servicing transfers and adjustments 16 — 16 — (3,105) (3,105) Changes in fair value (2): Changes in valuation inputs or other assumptions 4,074 13,749 17,823 (63,360) 252,293 188,933 Realization of expected future cash flows and other changes (23,856) (24,228) (48,084) (36,898) (17,796) (54,694) Ending balance $ 339,664 $ 729,349 $ 1,069,013 $ 656,010 $ 799,543 $ 1,455,553 MSRs – Fair Value Measurement Method For the Nine Months Ended September 30, 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 — (108) (108) (29) (556) (585) Additions: Recognized on the sale of residential mortgage loans 37,785 — 37,785 3,933 — 3,933 Purchase of MSRs 78,994 — 78,994 123,600 1,355 124,955 Servicing transfers and adjustments (1) (263,830) 403 (263,427) — (7,872) (7,872) Changes in fair value (2): Changes in valuation inputs or other assumptions (159,351) 20,679 (138,672) (235,036) 264,876 29,840 Realization of expected future cash flows and other changes (67,940) (64,014) (131,954) (102,045) (49,822) (151,867) Ending balance $ 339,664 $ 729,349 $ 1,069,013 $ 656,010 $ 799,543 $ 1,455,553 (1) Servicing transfers and adjustments include a $263.7 million derecognition of MSRs/Rights to MSRs effective with the February 20, 2020 notice of termination of the subservicing agreement between NRZ and PMC. See Note 9 — 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 UPB | UPB at September 30, 2020 December 31, 2019 September 30, 2019 Owned MSRs $ 71,301,427 $ 70,973,496 $ 71,372,447 NRZ pledged MSRs (1) 66,782,351 108,837,877 113,441,618 Total recognized MSRs $ 138,083,778 $ 179,811,373 $ 184,814,065 (1) MSRs subject to sale agreements with NRZ that do not meet sale accounting criteria. See Note 9 — Rights to MSRs. |
Schedule of Components of Servicing and Subservicing Fees | Servicing Revenue Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Loan servicing and subservicing fees Servicing $ 53,410 $ 61,485 $ 161,154 $ 170,054 Subservicing 10,324 1,365 26,143 11,775 NRZ 91,015 146,567 299,089 443,505 154,749 209,417 486,386 625,334 Ancillary income Late charges 11,012 14,105 38,323 42,786 Custodial accounts (float earnings) 1,057 13,464 8,787 38,739 Loan collection fees 3,047 3,862 10,048 11,613 Home Affordable Modification Program (HAMP) fees (1) 104 1,216 532 4,558 Other, net 11,753 6,453 24,369 22,063 26,973 39,100 82,059 119,759 $ 181,722 $ 248,517 $ 568,445 $ 745,093 (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) | 9 Months Ended |
Sep. 30, 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 September 30, 2020 December 31, 2019 MSRs, at fair value (1) $ 577,309 $ 915,148 Due from NRZ (Receivables) Sales and transfers of MSRs (2) $ — $ 24,167 Subservicing fees and reimbursable expenses 2,364 9,197 $ 2,364 $ 33,364 Due to NRZ (Other liabilities) $ 95,803 $ 63,596 Financing liability - MSRs pledged, at fair value Original Rights to MSRs Agreements $ 577,309 $ 603,046 2017 Agreements and New RMSR Agreements (3) — 35,445 PMC MSR Agreements (1) — 312,102 $ 577,309 $ 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 were derecognized from our balance sheet, we continued to service these loans until deboarding on October 1, 2020, and accounted 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 Ocwen’s acquisition of PHH. (3) Income was recognized through April 30, 2020 as a reduction in the financing liability based on the term of the original agreements. Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Statements of Operations Servicing fees collected on behalf of NRZ (1) $ 91,015 $ 146,567 $ 299,089 $ 443,505 Less: Subservicing fee retained by Ocwen (1) 25,674 35,462 80,529 108,774 Net servicing fees remitted to NRZ 65,341 111,105 218,560 334,731 Less: Reduction (increase) in financing liability Changes in fair value: Original Rights to MSRs Agreements (10,401) (228,644) (18,503) (230,193) 2017 Agreements and New RMSR Agreements — (2,216) (903) (4,562) PMC MSR Agreements (1) — 30,156 40,720 111,034 (10,401) (200,704) 21,314 (123,721) Runoff and settlement: Original Rights to MSRs Agreements 15,650 11,170 41,572 31,617 2017 Agreements and New RMSR Agreements — 26,705 35,121 76,087 PMC MSR Agreements (1) — 15,881 7,492 49,469 15,650 53,756 84,185 157,173 Other 2,688 1,637 7,377 (2,023) Pledged MSR liability expense $ 57,404 $ 256,416 $ 105,684 $ 303,302 (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 do 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 Financing Liability - MSRs Pledged | Three Months Ended September 30, 2020 Financing Liability - MSRs Pledged Original Rights to MSRs Agreements 2017 Agreements and New RMSR Agreements PMC MSR Agreements Total Beginning Balance $ 582,558 $ — $ — $ 582,558 Changes in fair value: Original Rights to MSRs Agreements 10,402 — — 10,402 2017 Agreements and New RMSR Agreements — — — — PMC MSR Agreements — — — — Runoff and settlement: Original Rights to MSRs Agreements (15,651) — — (15,651) 2017 Agreements and New RMSR Agreements — — — — PMC MSR Agreements — — — — Balance at September 30, 2020 $ 577,309 $ — $ — $ 577,309 Three Months Ended September 30, 2019 Financing Liability - MSRs Pledged Original Rights to MSRs Agreements 2017 Agreements and New RMSR Agreements PMC MSR Agreements Total Beginning Balance $ 412,909 $ 88,103 $ 343,901 $ 844,913 Additions — — 345 345 Changes in fair value: Original Rights to MSRs Agreements 228,643 — — 228,643 2017 Agreements and New RMSR Agreements — 2,216 — 2,216 PMC MSR Agreements — — (30,156) (30,156) Runoff and settlement: Original Rights to MSRs Agreements (11,170) — — (11,170) 2017 Agreements and New RMSR Agreements — (26,705) — (26,705) PMC MSR Agreements — — (15,881) (15,881) Calls (1): Original Rights to MSRs Agreements (3,095) — — (3,095) 2017 Agreements and New RMSR Agreements — (2,169) — (2,169) Balance at September 30, 2019 $ 627,287 $ 61,445 $ 298,220 $ 986,952 Nine Months Ended September 30, 2020 Financing Liability - MSRs Pledged Original Rights to MSRs Agreements 2017 Agreements and New RMSR Agreements PMC MSR Agreements Total Beginning Balance $ 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 18,503 — — 18,503 2017 Agreements and New RMSR Agreements — 903 — 903 PMC MSR Agreements — — (40,720) (40,720) Runoff and settlement: Original Rights to MSRs Agreements (41,572) — — (41,572) 2017 Agreements and New RMSR Agreements — (35,121) — (35,121) 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 September 30, 2020 $ 577,309 $ — $ — $ 577,309 Nine Months Ended September 30, 2019 Financing Liability - MSRs Pledged Original Rights to MSRs Agreements 2017 Agreements and New RMSR Agreements PMC MSR Agreements Total Beginning Balance $ 436,511 $ 138,854 $ 457,491 $ 1,032,856 Purchases — — 1,221 1,221 Sales — — 11 11 Changes in fair value: Original Rights to MSRs Agreements 230,193 — — 230,193 2017 Agreements and New RMSR Agreements — 4,562 — 4,562 PMC MSR Agreements — — (111,034) (111,034) Runoff and settlement: Original Rights to MSRs Agreements (31,617) — — (31,617) 2017 Agreements and New RMSR Agreements — (76,087) — (76,087) PMC MSR Agreements — — (49,469) (49,469) Calls (1): Original Rights to MSRs Agreements (7,800) — — (7,800) 2017 Agreements and New RMSR Agreements — (5,884) — (5,884) Balance at September 30, 2019 $ 627,287 $ 61,445 $ 298,220 $ 986,952 |
Receivables (Tables)
Receivables (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Schedule of Receivables | September 30, 2020 December 31, 2019 Servicing-related receivables: Government-insured loan claims - Forward $ 107,917 $ 122,557 Government-insured loan claims - Reverse 43,681 14,123 Sales and transfers of MSRs - Due from NRZ — 24,167 Subservicing fees and reimbursable expenses - Due from NRZ 2,364 9,197 Reimbursable expenses 5,604 13,052 Due from custodial accounts 8,212 27,175 Other 1,869 4,970 169,647 215,241 Income taxes receivable (1) 68,683 37,888 Other receivables 4,795 5,963 243,125 259,092 Allowance for losses (41,518) (57,872) $ 201,607 $ 201,220 (1) See Note 17 – 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 September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Beginning balance $ 6,400 $ 10,057 $ 6,643 $ 11,569 Provision (45) 769 1,084 1,805 Transfer from Liability for indemnification obligations (Other liabilities) 42 266 117 340 Sales of loans (166) (3,996) (1,613) (6,618) Ending balance $ 6,231 $ 7,096 $ 6,231 $ 7,096 Allowance for Losses Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Beginning balance $ 7,820 $ 27,653 $ 9,925 $ 23,259 Provision 2,173 729 5,944 4,532 Net charge-offs and other (1) (3,915) (19,085) (9,791) (18,494) Ending balance $ 6,078 $ 9,297 $ 6,078 $ 9,297 (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 September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Beginning balance (1) $ 53,310 $ 50,511 $ 56,868 $ 52,497 Provision 5,055 11,013 12,249 22,819 Charge-offs and other, net (17,607) (8,349) (28,359) (22,141) Ending balance $ 40,758 $ 53,175 $ 40,758 $ 53,175 (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) | 9 Months Ended |
Sep. 30, 2020 | |
Other Assets [Abstract] | |
Schedule of Other Assets | September 30, 2020 December 31, 2019 Contingent loan repurchase asset $ 580,599 $ 492,900 Derivatives, at fair value 22,843 6,007 Prepaid expenses 15,791 21,996 Prepaid representation, warranty and indemnification claims - Agency MSR sale 15,173 15,173 Prepaid lender fees, net 10,767 8,647 REO 8,354 8,556 Security deposits 2,181 2,163 Deferred tax asset, net 1,821 2,169 Mortgage backed securities, at fair value 2,150 2,075 Interest-earning time deposits 377 390 Other 2,412 3,164 $ 662,468 $ 563,240 |
Borrowings (Tables)
Borrowings (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Match Funded Liabilities | Advance Match Funded Liabilities Borrowing Capacity September 30, 2020 December 31, 2019 Borrowing Type Maturity (1) Amorti- zation Date (1) Total Available (2) Weighted Average Interest Rate Balance Weighted Average Interest Rate Balance Advance Receivables Backed Notes - Series 2015-VF5 (3) Jun. 2051 Jun. 2021 $ 250,000 $ 158,080 4.28 % $ 91,920 3.36 % $ 190,555 Advance Receivables Backed Notes, Series 2019-T1 (4) Aug. 2050 Aug. 2020 — — — — 2.62 % 185,000 Advance Receivables Backed Notes, Series 2019-T2 (4) Aug. 2051 Aug. 2021 — — — — 2.53 % 285,000 Advance Receivables Backed Notes, Series 2020-T1 (4) Aug. 2052 Aug. 2022 475,000 — 1.49 % 475,000 — % — Total Ocwen Master Advance Receivables Trust (OMART) 725,000 158,080 1.94 % 566,920 2.79 % 660,555 Ocwen Freddie Advance Funding (OFAF) - Advance Receivables Backed Notes, Series 2015-VF1 (5) Jun. 2051 Jun. 2021 70,000 56,842 3.28 % 13,158 3.53 % 18,554 $ 795,000 $ 214,922 1.97 % $ 580,078 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 September 30, 2020, $10.0 million and none of the available borrowing capacity of the OMART and OFAF advance financing notes, respectively, could be used based on the amount of eligible collateral. (3) On May 7, 2020, we renewed this facility through June 30, 2021, and increased the total borrowing capacity of the Series 2015-VF5 variable notes from $200.0 million to $500.0 million, with interest computed based on the lender’s cost of funds plus a margin of 400 bps. On August 17, 2020, we reduced the total borrowing capacity to $250.0 million in conjunction with the issuance of new fixed-rate term notes with a borrowing capacity of $475.0 million, as disclosed in (4) below. (4) On August 12, 2020, we issued fixed-rate term notes with a total borrowing capacity of $475.0 million (Series 2020 T-1). The weighted average rate of the notes at September 30, 2020 is 1.49%, with rates on the individual classes of notes ranging from 1.28% to 5.42%. The Series 2019-T1 and 2019-T2 fixed-rate term notes were redeemed on August 17, 2020. |
Schedule of Financing Liabilities | Financing Liabilities Outstanding Balance Borrowing Type Collateral Interest Rate Maturity September 30, 2020 December 31, 2019 HMBS-related borrowings, at fair value (1) Loans held for investment 1ML + 260 bps (1) $ 6,606,543 $ 6,063,435 Other financing liabilities, at fair value MSRs pledged (Rights to MSRs), at fair value: Original Rights to MSRs Agreements MSRs (2) (2) 577,309 603,046 2017 Agreements and New RMSR Agreements MSRs (3) (3) — 35,445 PMC MSR Agreements MSRs (4) (4) — 312,102 577,309 950,593 Financing liability - Owed to securitization investors, at fair value: IndyMac Mortgage Loan Trust (INDX 2004-AR11) (5) Loans held for investment (5) (5) — 9,794 Residential Asset Securitization Trust 2003-A11 (RAST 2003-A11) (5) Loans held for investment (5) (5) 11,012 12,208 11,012 22,002 Total Other financing liabilities, at fair value 588,321 972,595 $ 7,194,864 $ 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. (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. See Note 9 — Rights to MSRs for additional information. (3) This financing liability arose in connection with lump sum payments received in 2017 upon transfer of legal title of the MSRs related to the Rights to MSRs transactions to NRZ and in 2018 in connection with the execution of the New RMSR Agreements as compensation for foregoing certain payments under the Original Rights to MSRs Agreements. See Note 9 — Rights to MSRs for additional information. (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 Corporation (PHH). As disclosed in Note 9 — 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. In June 2020, we sold the beneficial interests held in the INDX 2004-AR11 securitization trust and deconsolidated the trust . |
Schedule of Other Secured Borrowings | Other Secured Borrowings Available Borrowing Capacity Outstanding Balance Borrowing Type Collateral Interest Rate (1) Maturity Uncommitted Committed (2) September 30, 2020 December 31, 2019 SSTL (3) (3) 1-Month Euro-dollar rate + 600 bps with a Eurodollar floor of 100 bps (3) May 2022 $ — $ — $ 190,000 $ 326,066 Master repurchase agreement (4) Loans held for sale (LHFS) 1ML + 220 - 375 bps June 2021 19,756 — 155,244 91,573 Mortgage warehouse agreement (5) LHFS (reverse) Greater of 1ML + 250 bps or 3.50%; LIBOR Floor 0% August 2021 1,000 — — 72,443 Master repurchase agreement (6) LHFS (forward and reverse) 1ML + 225 bps forward; 1ML + 275 bps reverse Dec. 2020 50,000 8,869 191,131 139,227 Master repurchase agreement (7) LHFS (reverse) Prime + 0.0%; 4.0% floor January 2020 — — — 898 Master repurchase agreement (8) N/A 1ML + 180 bps; LIBOR Floor 35 bps N/A 50,000 — — — Participation agreement (9) LHFS (9) June 2021 120,000 — — 17,304 Master repurchase agreement (9) LHFS (9) June 2021 — 76,497 13,503 — Master repurchase agreement LHFS 1 ML + 250 bps March 2021 — 1,000 — — Mortgage warehouse agreement (10) LHFS 1ML + 350 bps; LIBOR Floor 525 bps Dec. 2020 — 48,211 1,789 10,780 Mortgage warehouse agreement (11) LHFS (reverse) 1ML + 250 bps; 3.50% floor Nov. 2020 19,904 — 80,096 — Mortgage warehouse agreement (12) LHFS (12) N/A 100,000 — — — Total mortgage loan warehouse facilities 360,660 134,577 441,763 332,225 Other Secured Borrowings Available Borrowing Capacity Outstanding Balance Borrowing Type Collateral Interest Rate (1) Maturity Uncommitted Committed (2) September 30, 2020 December 31, 2019 Agency MSR financing facility (13) MSRs, Advances 1ML + 450 bps June 2021 — 136,071 113,929 147,706 Ginnie Mae MSR financing facility (14) MSRs, Advances 1ML + 395 bps Dec. 2020 74,947 — 52,553 72,320 Ocwen Excess Spread-Collateralized Notes, Series 2019-PLS1 (15) MSRs 5.07% Nov. 2024 — — 74,021 94,395 Secured Notes, Ocwen Asset Servicing Income Series, Series 2014-1 (16) MSRs (15) Feb. 2028 — — 50,168 57,594 Total MSR financing facilities 74,947 136,071 290,671 372,015 $ 435,607 $ 270,648 922,434 1,030,306 Unamortized debt issuance costs - SSTL and PLS Notes (6,712) (3,381) Discount - SSTL (430) (1,134) $ 915,292 $ 1,025,791 Weighted average interest rate 4.51 % 4.74 % (1) 1ML was 0.15% and 1.76% at September 30, 2020 and December 31, 2019, respectively. (2) Of the borrowing capacity on mortgage loan warehouse facilities extended on a committed basis, $34.1 million of the available borrowing capacity could be used at September 30, 2020 based on the amount of eligible collateral that could be pledged. (3) 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. (4) The maximum borrowing under this agreement is $175.0 million, of which $110.0 million is available on a committed basis and the remainder is available at the discretion of the lender. (5) 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. On August 10, 2020, the maturity date of this agreement was extended to August 13, 2021. (6) 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. (7) This facility expired on January 22, 2020 and was not renewed. (8) T he lender provides financing for up to $50.0 million at the discretion of the lender. The agreement has no stated maturity date. (9) Under the original terms, the lender provided $300.0 million of borrowing capacity on an uncommitted basis. On June 25, 2020, this facility was amended to be comprised of two lines, a $120.0 million uncommitted participation agreement and a $90.0 million committed repurchase agreement. The maturity date of the facility was extended to June 24, 2021. The agreements allow the lender to acquire a 100% beneficial interest in the underlying mortgage loans. The transactions do not qualify for sale accounting treatment and are accounted for as secured borrowings. The lender earns the stated interest rate of the underlying mortgage loans less 35 bps, with a floor of 3.5%, while the loans are financed under both the participation and repurchase agreements. (10) Under this agreement, the lender provides financing for up to $50.0 million on a committed basis. (11) On March 12, 2020, we 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. In October 2020, the maturity date was extended to October 29, 2021 and the capacity was temporarily increased to $150.0 million until November 15, 2020 when it will be reduced to $100.0 million. (12) On September 30, 2020, we entered into a $100.0 million uncommitted repurchase agreement to finance the purchase of EBO loans from Ginnie Mae. The agreement has no stated maturity date, however each transaction has a maximum duration of four years. The cost of this line is set at each transaction date and is based on the interest rate on the collateral. (13) PMC’s obligations under this facility are secured by a lien on the related MSRs. Ocwen guarantees the obligations of PMC under this facility. On May 7, 2020, we renewed the facility through June 30, 2021 and reduced the maximum amount which we may borrow pursuant to the repurchase agreements from $300.0 million to $250.0 million on a committed basis. We also pledged the membership interest of the depositor for our OMART advance financing facility as additional collateral to this facility. 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. (14) PMC’s obligations under this facility are secured by a lien on the related Ginnie Mae MSRs. Ocwen guarantees the obligations of PMC under the facility. On June 30, 2020, we amended the facility to increase the borrowing capacity from $100.0 million to $127.5 million on an uncommitted basis, accelerate the maturity date to December 27, 2020 and include Ginnie Mae servicing advances as additional collateral. The lender earns the stated interest rate of 1ML plus a margin of 395 bps on borrowings prior to June 1, 2020, with any subsequent borrowings at a stated interest of 1ML plus a margin of 700 bps. See (13) above regarding daily margining requirements. (15) 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 had an initial principal amount of $100.0 million and amortize in accordance with a pre-determined schedule subject to modification under certain events. See Note 3 – Securitizations and Variable Interest Entities for additional information. See (12) above regarding daily margining requirements. (16) 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 September 30, 2020 December 31, 2019 Senior unsecured notes (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 (1,098) (1,470) Fair value adjustments (1) (265) (497) $ 311,689 $ 311,085 |
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 September 30, 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 $ 321,455 $ — $ — $ — $ — $ 321,455 Restricted cash 61,511 10,458 — 4,416 46,637 — MSRs (3) 1,069,013 — 577,886 490,583 — 48 Advances, net 832,604 660,816 — 61,081 — 110,707 Loans held for sale 390,631 — — 335,726 — 54,905 Loans held for investment 6,860,942 — 6,726,105 95,619 — 39,218 Receivables, net 201,607 — — 52,417 — 149,190 Premises and equipment, net 23,620 — — — — 23,620 Other assets 662,468 — — 7,077 597,953 57,438 Total assets $ 10,423,851 $ 671,274 $ 7,303,991 $ 1,046,919 $ 644,590 $ 756,581 (1) Sales and Other Commitments include 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 in connection with the Rights to MSRs transactions with NRZ which are accounted for as secured financings. Certain MSR cohorts with a negative fair value of $0.5 million that would be presented as Other are excluded from the eligible collateral of the facilities and are comprised of $17.4 million of negative fair value related to RMBS and $17.9 million of positive fair value related to private EBO and PLS MSRs. |
Other Liabilities (Tables)
Other Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Other Liabilities | September 30, 2020 December 31, 2019 Contingent loan repurchase liability $ 580,599 $ 492,900 Due to NRZ - Advance collections, servicing fees and other 95,803 63,596 Other accrued expenses 71,093 67,241 Liability for indemnification obligations 44,170 52,785 Servicing-related obligations 40,659 88,167 Lease liability 34,426 44,488 Accrued legal fees and settlements 31,015 30,663 Checks held for escheat 29,106 31,959 Accrued interest payable 13,891 5,964 Liability for unfunded pension obligation 11,734 13,383 Liability for uncertain tax positions 17,123 17,197 Liability for unfunded India gratuity plan 5,416 5,331 Derivatives, at fair value 1,671 100 Liability for mortgage insurance contingency — 6,820 Other 20,755 21,579 $ 997,461 $ 942,173 |
Derivative Financial Instrume_2
Derivative Financial Instruments and Hedging Activities (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Activity | The table below 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 nine months ended September 30, 2020 and 2019. September 30, 2020 December 31, 2019 Maturities Notional Fair value Maturities Notional Fair value Derivative Assets Forward sales of Reverse loans Nov. 2020 $ 20,000 $ 31 Jan. 2020 $ 40,000 $ 8 Forward loans IRLCs Oct. to Dec. 2020 857,257 21,606 Mar. 2020 204,020 4,745 Reverse loans IRLCs Oct. 2020 30,977 1,073 Jan. 2020 28,546 133 TBA forward MBS trades Oct. to Nov. 2020 400,000 117 Jan to Mar. 2020 1,200,000 1,121 Other n/a — 16 n/a — — Total $ 1,308,234 $ 22,843 $ 1,472,566 $ 6,007 Derivative Liabilities Forward sales of Reverse loans Oct. 2020 $ 60,000 $ (114) Jan. 2020 $ 20,000 $ (29) TBA forward MBS trades Oct. to Nov. 2020 190,000 (696) n/a — — Interest rate swap futures Dec. 2020 355,000 (213) n/a — — Borrowings - interest rate caps n/a — — May 2020 27,083 — Other n/a — (648) n/a — (71) Total $ 605,000 $ (1,671) $ 47,083 $ (100) 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 generally 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. Nine Months Ended September 30, 2020 Nine Months Ended September 30, 2019 Gain / (Loss) Gain / (Loss) Amount Financial Statement Line Amount Financial Statement Line Derivative Assets (Liabilities) Forward loans IRLCs $ 16,860 Gain on loans held for sale, net $ 401 Gain on loans held for sale, net Reverse loans IRLCs 940 Reverse mortgage revenue, net 802 Reverse mortgage revenue, net Forward LHFS trades — (3,689) Gain on loans held for sale, net Interest rate swap futures and TBA forward MBS trades (9,564) Gain on loans held for sale, net (Economic hedge) 345 Gain on loans held for sale, net (Economic hedge) Interest rate swap futures and TBA forward MBS trades 39,258 MSR valuation adjustments, net 322 MSR valuation adjustments, net Forward sales of Reverse loans (62) Reverse mortgage revenue, net 106 Reverse mortgage revenue, net Borrowings - interest rate caps — Other, net (358) Other, net Other (561) Gain on loans held for sale, net (220) Total $ 46,871 $ (2,291) |
Interest Expense (Tables)
Interest Expense (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Other Income and Expenses [Abstract] | |
Schedule of Components of Interest Expense | Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Other secured borrowings $ 12,246 $ 12,918 $ 39,171 $ 31,933 Senior notes 6,658 8,039 19,977 25,053 Advance match funded liabilities 6,565 6,165 19,541 20,862 Other 1,346 2,384 4,868 6,788 $ 26,815 $ 29,506 $ 83,557 $ 84,636 |
Basic and Diluted Earnings (L_2
Basic and Diluted Earnings (Loss) per Share (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliation of Calculation of Basic Loss per Share to Diluted Loss per Share | Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Basic earnings (loss) per share Net loss $ (9,420) $ (42,767) $ (32,955) $ (176,998) Weighted average shares of common stock 8,669,550 8,973,053 8,770,102 8,955,288 Basic loss per share $ (1.09) $ (4.77) $ (3.76) $ (19.76) Diluted earnings (loss) per share Net loss $ (9,420) $ (42,767) $ (32,955) $ (176,998) Weighted average shares of common stock 8,669,550 8,973,053 8,770,102 8,955,288 Effect of dilutive elements Stock option awards — — — — Common stock awards — — — — Dilutive weighted average shares of common stock 8,669,550 8,973,053 8,770,102 8,955,288 Diluted loss per share $ (1.09) $ (4.77) $ (3.76) $ (19.76) Stock options and common stock awards excluded from the computation of diluted loss per share Anti-dilutive (1) 193,144 196,875 218,020 222,870 Market-based (2) 125,395 60,147 125,395 60,147 (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) | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information | Financial information for our segments is as follows: Three Months Ended September 30, 2020 Results of Operations Servicing Originations Corporate Items and Other Business Segments Consolidated Revenue (1) $ 185,892 $ 53,755 $ 9,388 $ 249,035 MSR valuation adjustments, net (1) (38,356) 12,375 (7,833) (33,814) Operating expenses (2) 79,522 35,421 34,579 149,522 Other (expense) income: Interest income 872 2,717 212 3,801 Interest expense (21,421) (3,163) (2,231) (26,815) Pledged MSR liability expense (57,434) — 30 (57,404) Other 2,211 197 937 3,345 Other expense, net (75,772) (249) (1,052) (77,073) Income (loss) before income taxes $ (7,758) $ 30,460 $ (34,076) $ (11,374) Three Months Ended September 30, 2019 Results of Operations Servicing Originations Corporate Items and Other Business Segments Consolidated Revenue $ 250,224 $ 29,502 $ 3,789 $ 283,515 MSR valuation adjustments, net 134,617 (56) — 134,561 Operating expenses (2) 135,507 20,609 23,169 179,285 Other (expense) income: Interest income 2,105 1,688 336 4,129 Interest expense (26,087) (2,133) (1,286) (29,506) Pledged MSR liability expense (256,499) — 83 (256,416) Gain on repurchase of senior secured notes — — 5,099 5,099 Other 3,917 498 (4,829) (414) Other (expense) income, net (276,564) 53 (597) (277,108) Income (loss) before income taxes $ (27,230) $ 8,890 $ (19,977) $ (38,317) Nine Months Ended September 30, 2020 Results of Operations Servicing Originations Corporate Items and Other Business Segments Consolidated Revenue (1) $ 579,883 $ 136,947 $ 13,071 $ 729,901 MSR valuation adjustments, net (1) (249,396) 25,861 (7,833) (231,368) Operating expenses (2) 242,735 91,129 97,681 431,545 Other (expense) income: Interest income 4,196 6,857 1,709 12,762 Interest expense (67,923) (8,423) (7,211) (83,557) Pledged MSR liability expense (105,771) — 87 (105,684) Other 8,332 167 (3,883) 4,616 Other expense, net (161,166) (1,399) (9,298) (171,863) Income (loss) before income taxes $ (73,414) $ 70,280 $ (101,741) $ (104,875) Nine Months Ended September 30, 2019 Results of Operations Servicing Originations Corporate Items and Other Business Segments Consolidated Revenue $ 752,010 $ 99,386 $ 10,345 $ 861,741 MSR valuation adjustments, net (121,497) (208) — (121,705) Operating expenses (2) (3) 435,377 62,813 36,428 534,618 Other (expense) income: Interest income 6,270 4,783 1,471 12,524 Interest expense (77,328) (5,200) (2,108) (84,636) Pledged MSR liability expense (303,385) — 83 (303,302) Gain on repurchase of senior secured notes — — 5,099 5,099 Other 6,332 1,161 (6,330) 1,163 Other (expense) income, net (368,111) 744 (1,785) (369,152) Income (loss) before income taxes $ (172,975) $ 37,109 $ (27,868) $ (163,734) (1) Revenue in the Corporate Items and Other segment for the three and nine months ended September 30, 2020 includes an inter-segment derivatives elimination of $7.8 million with a corresponding offset in MSR valuation adjustments, net. (2) Compensation and benefits expense in the Corporate Items and Other segment for the three and nine months ended September 30, 2020 and 2019 includes $1.0 million and $2.6 million, and $(0.1) million and $19.1 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. (3) Included in the Corporate Items and Other segment for the nine months ended September 30, 2019, we recorded in Professional services expense a recovery from a service provider of $30.7 million during the first quarter of 2019 of amounts previously recognized as expense. Total Assets Servicing Originations Corporate Items and Other Business Segments Consolidated September 30, 2020 $ 2,694,561 $ 7,259,257 $ 470,033 $ 10,423,851 December 31, 2019 $ 3,378,515 $ 6,459,367 $ 568,317 $ 10,406,199 September 30, 2019 $ 3,227,245 $ 6,225,394 $ 504,014 $ 9,956,653 Depreciation and Amortization Expense Servicing Originations Corporate Items and Other Business Segments Consolidated Three months ended September 30, 2020 Depreciation expense $ 219 $ 31 $ 4,055 $ 4,305 Amortization of debt issuance costs and discount 115 — 1,039 1,154 Three months ended September 30, 2019 Depreciation expense $ 105 $ (32) $ 6,386 $ 6,459 Amortization of debt issuance costs and discount — — 1,146 1,146 Nine Months Ended September 30, 2020 Depreciation expense $ 652 $ 102 $ 14,644 $ 15,398 Amortization of debt issuance costs and discount 343 — 4,992 5,335 Nine months ended September 30, 2019 Depreciation expense $ 1,674 $ 49 $ 24,297 $ 26,020 Amortization of debt issuance costs and discount — — 3,299 3,299 |
Commitments (Tables)
Commitments (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Other Commitments [Abstract] | |
Schedule of Mortgage Servicing Rights Assets and Liabilities | As of September 30, 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) (2) $ 15,060,347 NRZ servicer of record (MSR title transferred to NRZ) - Ocwen MSR (1) 51,722,004 NRZ PMC Subservicing Agreement subject to termination (3) 16,007,995 Ocwen subservicer 2,802,967 Total NRZ UPB at September 30, 2020 $ 85,593,313 (1) The MSR sale transactions did not achieve sale accounting treatment. (2) NRZ’s associated outstanding servicing advances were approximately $584.6 million as of September 30, 2020. (3) On October 1, 2020, these loans were transferred out in connection with the termination of the PMC servicing agreement by NRZ. See Note 9 — Rights to MSRs. |
Schedule of Effect of Pandemic | The below table shows the loans under forbearance and the associated P&I advances: As of September 30, 2020 As of June 30, 2020 Number of Forbearance Plans (3) Estimated Monthly P&I Advance Obligation Number of Forbearance Plans (3) Estimated Monthly P&I Advance Obligation GSE loans 5,300 $ 6.5 6,600 $ 8.3 Ginnie Mae loans 10,100 9.2 9,900 9.2 PLS loans 14,500 21.0 18,000 26.5 Servicer 29,900 $ 36.7 34,500 $ 44.0 GSE loans 900 $ 0.9 10,100 $ 11.0 PLS loans 64,100 60.0 73,800 70.8 NRZ’s responsibility (1) 65,000 $ 60.9 83,900 $ 81.8 Subservicer (2) 8,000 $ 9.8 7,600 $ 10.1 No advance requirements 3,400 — 5,400 — Total 106,300 $ 107.4 131,400 $ 135.9 (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 9 — Rights to MSRs 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: Nine Months Ended September 30, 2020 Active Inactive Total Number Amount Number Amount Number Amount Beginning balance 62 $ 10,546 258 $ 25,147 320 $ 35,693 Additions (1) 159 40,875 219 32,789 378 73,664 Recoveries, net (2) (7) (9,492) (26) (8,480) (33) (17,972) Transfers (10) (2,933) 10 2,933 — — Changes in value — 43 — (2,576) — (2,533) Ending balance 204 $ 39,039 461 $ 49,813 665 $ 88,852 (1) Total repurchases during the nine months ended September 30, 2020 includes 308 loans totaling $66.9 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) | 9 Months Ended |
Sep. 30, 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: Nine Months Ended September 30, 2020 2019 Beginning balance (1) $ 50,838 $ 49,267 Provision (reversal) for representation and warranty obligations (1,141) (10,367) New production reserves 1,361 186 Charge-offs and other (2) (8,130) 14,887 Ending balance (1) $ 42,928 $ 53,973 (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 and Basis of Pre_4
Organization and Basis of Presentation - Narrative (Details) $ in Thousands | Aug. 13, 2020 | Sep. 30, 2020USD ($)Employee | Jun. 30, 2020USD ($) | Jan. 01, 2020USD ($) | Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Dec. 31, 2018USD ($) |
Description of Business and Basis of Presentation [Line Items] | ||||||||
Total number of employees | 5,200 | |||||||
Reverse stock split ratio | 0.07 | |||||||
Cumulative effect of new accounting pronouncement | $ | $ 424,467 | $ 432,769 | $ 412,011 | $ 381,185 | $ 422,894 | $ 554,705 | ||
INDIA | ||||||||
Description of Business and Basis of Presentation [Line Items] | ||||||||
Total number of employees | 3,300 | |||||||
PHILIPPINES | ||||||||
Description of Business and Basis of Presentation [Line Items] | ||||||||
Total number of employees | 400 | |||||||
Minimum | ||||||||
Description of Business and Basis of Presentation [Line Items] | ||||||||
Percentage of foreign based employees engaged in supporting loan servicing operations | 74.00% | |||||||
Cumulative Effect, Period of Adoption, Adjustment | Accounting Standards Update 2019-04 | ||||||||
Description of Business and Basis of Presentation [Line Items] | ||||||||
Cumulative effect of new accounting pronouncement | $ | $ 47,000 |
Organization and Basis of Pre_5
Organization and Basis of Presentation - Reclassifications (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Gain on loans held for sale, net | $ (45,886) | $ (9,012) | $ (92,764) | $ (26,312) |
Other revenue, net | (6,928) | (5,726) | (17,637) | (17,460) |
Servicing and subservicing fees | (181,722) | (248,517) | (568,445) | (745,093) |
Reverse mortgage revenue, net (New line item) | 14,499 | 20,260 | 51,055 | 72,876 |
Revenues | $ 249,035 | 283,515 | $ 729,901 | 861,741 |
Restatement Adjustment | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Gain on loans held for sale, net | 7,001 | 22,371 | ||
Other revenue, net | 14,062 | 52,839 | ||
Servicing and subservicing fees | (803) | (2,334) | ||
Reverse mortgage revenue, net (New line item) | 20,260 | 72,876 | ||
Revenues | $ 0 | $ 0 |
Severance and Restructuring C_3
Severance and Restructuring Charges - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Sep. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | |
Restructuring Cost and Reserve [Line Items] | |||
Accelerated depreciation related to facility lease right of use | $ 2.9 | ||
Restructuring reserves | $ 2.2 | ||
Severance expense | 0.9 | ||
Cost related to re-engineering initiatives | $ 65 | ||
Facility-related | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring reserves | 2.8 | 3.2 | |
Employee-related | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring reserves | $ 0.7 | $ 1 |
Severance and Restructuring C_4
Severance and Restructuring Charges - Schedule of Plan Costs Incurred (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2019 | |
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring cost | $ 14,381 | $ 18,347 | $ 10,126 | $ 22,115 | $ 64,969 |
Employee-related | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring cost | 4,191 | 7,266 | 3,460 | 20,787 | 35,704 |
Facility-related | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring cost | 3,490 | 3,596 | 3,047 | 0 | 10,133 |
Other | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring cost | $ 6,700 | $ 7,485 | $ 3,619 | $ 1,328 | $ 19,132 |
Securitizations and Variable _3
Securitizations and Variable Interest Entities - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | May 07, 2020 | May 06, 2020 | Nov. 26, 2019 | Jul. 01, 2019 | |
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | |||||||||
Average period to securitization | 30 days | ||||||||
MSRs retained | $ 22,096,000 | $ 605,000 | $ 37,785,000 | $ 2,249,000 | |||||
Percentage of loan transferred through securitization 60 days or more past due | 9.40% | 7.70% | |||||||
Pledged advance remittance period | 2 days | ||||||||
Maximum borrowing capacity | $ 795,000,000 | $ 795,000,000 | |||||||
Financing Facility Secured By Fannie Mae And Freddie Mac | |||||||||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | |||||||||
Maximum borrowing capacity | $ 250,000,000 | $ 300,000,000 | $ 300,000,000 | ||||||
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 |
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 | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Transfers and Servicing [Abstract] | ||||
Proceeds received from securitizations | $ 2,364,829 | $ 235,175 | $ 4,256,082 | $ 674,108 |
Servicing fees collected | 12,561 | 8,866 | 35,204 | 37,610 |
Purchases of previously transferred assets, net of claims reimbursed | (2,061) | (2,093) | (6,338) | (3,140) |
Cash flows between transferor and transferee proceeds and payment related to transfers accounted for sales | $ 2,375,329 | $ 241,948 | $ 4,284,948 | $ 708,578 |
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 | Sep. 30, 2020 | Dec. 31, 2019 |
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||
UPB of loans transferred | $ 17,126,989 | $ 14,490,984 |
Maximum exposure to loss | 17,410,945 | 14,742,394 |
Mortgage Servicing Rights - Fair Value | ||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||
Carrying value of assets | 101,506 | 109,581 |
Advances and Match Funded Advances | ||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||
Carrying value of assets | $ 182,450 | $ 141,829 |
Securitizations and Variable _6
Securitizations and Variable Interest Entities - Schedule Of Carrying Value and Classification of Assets and Liabilities of Agency MSR Financing Facility (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 |
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | |||
Mortgage servicing rights (MSRs), at fair value | $ 1,069,013 | $ 1,486,395 | |
Unamortized debt issuance costs (Other secured borrowings, net) | 10,767 | 8,647 | |
Debt service accounts | 14,873 | $ 17,026 | |
Variable Interest Entity, Primary Beneficiary | Secured Debt | Agency Mortgage Servicing Rights Financing Facility | |||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | |||
Mortgage servicing rights (MSRs), at fair value | 234,106 | 245,533 | |
Unamortized debt issuance costs (Other secured borrowings, net) | 1,775 | 946 | |
Debt service accounts | 102 | 100 | |
Short-term debt | $ 113,929 | $ 147,706 |
Securitizations and Variable _7
Securitizations and Variable Interest Entities - Carrying Value and Classification of Assets And Liabilities of PLS Notes Facility (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 |
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | |||
Mortgage servicing rights (MSRs), at fair value | $ 1,069,013 | $ 1,486,395 | |
Debt service accounts | 14,873 | $ 17,026 | |
Unamortized debt issuance costs (Other secured borrowings, net) | 10,767 | 8,647 | |
Secured Debt | |||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | |||
Outstanding borrowings (Other secured borrowings, net) | 915,292 | 1,025,791 | |
Ocwen Excess Spread-Collateralized Notes, Series 2019-PLS1 Class A | Secured Debt | |||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | |||
Outstanding borrowings (Other secured borrowings, net) | 74,021 | 94,395 | |
Variable Interest Entity, Primary Beneficiary | Ocwen Excess Spread-Collateralized Notes, Series 2019-PLS1 Class A | Secured Debt | |||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | |||
Mortgage servicing rights (MSRs), at fair value | 133,169 | 146,215 | |
Debt service accounts | 2,549 | 3,002 | |
Outstanding borrowings (Other secured borrowings, net) | 74,021 | 94,395 | |
Unamortized debt issuance costs (Other secured borrowings, net) | $ 964 | $ 1,208 |
Securitizations and Variable _8
Securitizations and Variable Interest Entities - Schedule of Carrying Value of Assets and Liabilities of Consolidated Mortgage-backed Securitization Trusts (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||
Loans held for investment, at fair value - Restricted for securitization investors | $ 6,860,942 | $ 6,292,938 |
Other financing liabilities, at fair value | 588,321 | 972,595 |
Residential Mortgage Backed Securitization Trusts | ||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||
Loans held for investment, at fair value - Restricted for securitization investors | 11,012 | 23,342 |
Other financing liabilities, at fair value | $ 11,012 | $ 22,002 |
Fair Value - Schedule of Fair V
Fair Value - Schedule of Fair Value Assets and Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
Loans held for sale | ||||||
Loans held for sale, at fair value | $ 366,966 | $ 208,752 | $ 207,645 | $ 176,525 | ||
Financial liabilities: | ||||||
Advance match funded liabilities | 580,078 | 679,109 | ||||
HMBS-related borrowings | 6,606,543 | $ 6,477,616 | 6,063,435 | 5,903,965 | $ 5,745,383 | 5,380,448 |
Financing liabilities: | ||||||
Other financing liabilities, at fair value | 588,321 | 972,595 | ||||
Total Financing liabilities | 7,194,864 | 7,036,030 | ||||
Other secured borrowings: | ||||||
Total Other secured borrowings | 915,292 | 1,025,791 | ||||
Senior Notes [Abstract] | ||||||
Senior notes, net | 311,689 | 311,085 | ||||
Derivative financial instruments assets (liabilities): | ||||||
Derivatives Futures | 1,671 | 100 | ||||
Mortgage servicing rights | ||||||
Mortgage servicing rights, at fair value | 1,069,013 | $ 1,044,914 | 1,486,395 | $ 1,455,553 | $ 1,312,633 | $ 1,457,149 |
Carrying Value | ||||||
Loans held for sale | ||||||
Total Loans held for sale | 390,631 | 275,269 | ||||
Loans held for investment | 6,860,942 | 6,292,938 | ||||
Financing liabilities: | ||||||
Total Financing liabilities | 7,194,864 | 7,036,030 | ||||
Other secured borrowings: | ||||||
Total Other secured borrowings | 915,292 | 1,025,791 | ||||
Senior Notes [Abstract] | ||||||
Senior notes, net | 311,689 | 311,085 | ||||
Fair Value | ||||||
Loans held for sale | ||||||
Total Loans held for sale | 390,631 | 275,269 | ||||
Loans held for investment | 6,860,942 | 6,292,938 | ||||
Financing liabilities: | ||||||
Total Financing liabilities | 7,194,864 | 7,036,030 | ||||
Other secured borrowings: | ||||||
Total Other secured borrowings | 889,703 | 1,010,789 | ||||
Senior Notes [Abstract] | ||||||
Senior notes, net | 285,815 | 270,022 | ||||
Level 2 | Carrying Value | ||||||
Loans held for sale | ||||||
Loans held for sale, at fair value | 366,966 | 208,752 | ||||
Corporate bonds | 211 | 441 | ||||
Other secured borrowings: | ||||||
Senior secured term loan | 183,822 | 322,758 | ||||
Senior Notes [Abstract] | ||||||
Senior unsecured notes | 21,278 | 21,046 | ||||
Senior secured notes | 290,411 | 290,039 | ||||
Derivative financial instruments assets (liabilities): | ||||||
Interest rate lock commitments | 4,878 | |||||
Level 2 | Fair Value | ||||||
Loans held for sale | ||||||
Loans held for sale, at fair value | 366,966 | 208,752 | ||||
Corporate bonds | 211 | 441 | ||||
Other secured borrowings: | ||||||
Senior secured term loan | 188,666 | 324,643 | ||||
Senior Notes [Abstract] | ||||||
Senior unsecured notes | 18,501 | 13,821 | ||||
Senior secured notes | 267,314 | 256,201 | ||||
Derivative financial instruments assets (liabilities): | ||||||
Interest rate lock commitments | 4,878 | |||||
Level 3 | Carrying Value | ||||||
Loans held for sale | ||||||
Loans held for sale, at lower of cost or fair value | 23,665 | 66,517 | ||||
Loans held for investment | 6,849,930 | 6,269,596 | ||||
Advances (including match funded) | 832,604 | 1,056,523 | ||||
Receivables, net | 201,607 | 201,220 | ||||
Mortgage-backed securities, at fair value | 2,150 | 2,075 | ||||
Financial liabilities: | ||||||
Advance match funded liabilities | 580,078 | 679,109 | ||||
HMBS-related borrowings | 6,606,543 | 6,063,435 | ||||
Other secured borrowings: | ||||||
Other | 731,470 | 703,033 | ||||
Derivative financial instruments assets (liabilities): | ||||||
Interest rate lock commitments | 22,679 | |||||
Mortgage servicing rights | ||||||
Mortgage servicing rights, at fair value | 1,069,013 | 1,486,395 | ||||
Level 3 | Fair Value | ||||||
Loans held for sale | ||||||
Loans held for sale, at lower of cost or fair value | 23,665 | 66,517 | ||||
Loans held for investment | 6,849,930 | 6,269,596 | ||||
Advances (including match funded) | 832,604 | 1,056,523 | ||||
Receivables, net | 201,607 | 201,220 | ||||
Mortgage-backed securities, at fair value | 2,150 | 2,075 | ||||
Financial liabilities: | ||||||
Advance match funded liabilities | 580,602 | 679,507 | ||||
HMBS-related borrowings | 6,606,543 | 6,063,435 | ||||
Other secured borrowings: | ||||||
Other | 701,037 | 686,146 | ||||
Derivative financial instruments assets (liabilities): | ||||||
Interest rate lock commitments | 22,679 | |||||
Mortgage servicing rights | ||||||
Mortgage servicing rights, at fair value | 1,069,013 | 1,486,395 | ||||
Level 1 | Carrying Value | ||||||
Derivative financial instruments assets (liabilities): | ||||||
Forward trades - Loans held for sale | (83) | (21) | ||||
TBA / Forward mortgage-backed securities (MBS) trades and futures - MSR hedging | (579) | 1,121 | ||||
Derivatives Futures | (213) | 0 | ||||
Level 1 | Fair Value | ||||||
Derivative financial instruments assets (liabilities): | ||||||
Forward trades - Loans held for sale | (83) | (21) | ||||
TBA / Forward mortgage-backed securities (MBS) trades and futures - MSR hedging | (579) | 1,121 | ||||
Derivatives Futures | (213) | 0 | ||||
Loans Held for Investment Securitization Trusts | Level 3 | Carrying Value | ||||||
Loans held for sale | ||||||
Loans held for investment | 11,012 | 23,342 | ||||
Loans Held for Investment Securitization Trusts | Level 3 | Fair Value | ||||||
Loans held for sale | ||||||
Loans held for investment | 11,012 | 23,342 | ||||
Financing Liability - MSRs Pledged | ||||||
Financing liabilities: | ||||||
Other financing liabilities, at fair value | 577,309 | 950,593 | ||||
Financing Liability - MSRs Pledged | Level 3 | Carrying Value | ||||||
Financing liabilities: | ||||||
Other financing liabilities, at fair value | 577,309 | 950,593 | ||||
Financing Liability - MSRs Pledged | Level 3 | Fair Value | ||||||
Financing liabilities: | ||||||
Other financing liabilities, at fair value | 577,309 | 950,593 | ||||
Financing Liability Owed to Securitization Investors | Level 3 | Carrying Value | ||||||
Financing liabilities: | ||||||
Other financing liabilities, at fair value | 11,012 | 22,002 | ||||
Financing Liability Owed to Securitization Investors | Level 3 | Fair Value | ||||||
Financing liabilities: | ||||||
Other financing liabilities, at fair value | $ 11,012 | $ 22,002 |
Fair Value - Schedule of Fair_2
Fair Value - Schedule of Fair Value Assets and Liabilities (Footnote) (Details) - Level 3 - Loans Held for Sale - Fair Value - USD ($) $ in Thousands | Sep. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Loans related to Ginnie Mae guaranteed securitizations | $ 26,409 | $ 25,950 | $ 0 |
Ginnie Mae Loans | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Loans related to Ginnie Mae guaranteed securitizations | $ 26,409 |
Fair Value - Schedule of Reconc
Fair Value - Schedule of Reconciliation of Changes in Fair Value of Level 3 Assets and Liabilities (Details) - Level 3 - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Loans Held for Inv. - Restricted for Securitization Investors | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning balance | $ 11,664 | $ 25,324 | $ 23,342 | $ 26,520 |
Purchases, issuances, sales and settlements | ||||
Purchases | 0 | 0 | ||
Issuances | 0 | 0 | ||
Deconsolidation of mortgage-backed securitization trusts | (10,715) | |||
Sales | 0 | 0 | ||
Settlements | (652) | (879) | (1,615) | (2,075) |
Transfers to loans held for sale, at fair value | 0 | |||
Transfers to receivables, net | 0 | |||
Purchases, issuances, sales and settlements, total | (652) | (879) | (12,330) | (2,075) |
Total realized and unrealized gains and (losses): | ||||
Change in fair value | 0 | 0 | 0 | 0 |
Total realized and unrealized gains (losses) included in earnings | 0 | 0 | 0 | |
Transfers in and / or out of Level 3 | 0 | 0 | ||
Ending balance | 11,012 | 24,445 | 11,012 | 24,445 |
Financing Liability Owed to Securitization Investors | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning balance | (11,664) | (23,697) | (22,002) | (24,815) |
Purchases, issuances, sales and settlements | ||||
Purchases | 0 | 0 | ||
Issuances | 0 | 0 | ||
Deconsolidation of mortgage-backed securitization trusts | 9,519 | |||
Sales | 0 | 0 | ||
Settlements | 652 | 870 | 1,615 | 1,988 |
Transfers to loans held for sale, at fair value | 0 | |||
Transfers to receivables, net | 0 | |||
Purchases, issuances, sales and settlements, total | 652 | 870 | 11,134 | 1,988 |
Total realized and unrealized gains and (losses): | ||||
Change in fair value | 0 | 0 | (144) | 0 |
Total realized and unrealized gains (losses) included in earnings | 0 | 0 | 0 | |
Transfers in and / or out of Level 3 | 0 | 0 | ||
Ending balance | (11,012) | (22,827) | (11,012) | (22,827) |
Loans Held for Sale - Fair Value | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning balance | 25,950 | 0 | ||
Purchases, issuances, sales and settlements | ||||
Purchases | 45,445 | 103,955 | ||
Issuances | 0 | |||
Sales | (45,723) | (104,273) | ||
Settlements | 356 | (70) | ||
Transfers to loans held for sale, at fair value | 0 | |||
Transfers to receivables, net | 157 | (113) | ||
Purchases, issuances, sales and settlements, total | 235 | (501) | ||
Total realized and unrealized gains and (losses): | ||||
Change in fair value | 224 | 1,328 | ||
Total realized and unrealized gains (losses) included in earnings | 224 | |||
Transfers in and / or out of Level 3 | 0 | 25,582 | ||
Ending balance | 26,409 | 26,409 | ||
Mortgage-Backed Securities | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning balance | 1,726 | 2,014 | 2,075 | 1,502 |
Purchases, issuances, sales and settlements | ||||
Purchases | 0 | 0 | 0 | 0 |
Issuances | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Transfers to loans held for sale, at fair value | 0 | |||
Transfers to receivables, net | 0 | |||
Purchases, issuances, sales and settlements, total | 0 | 0 | 0 | 0 |
Total realized and unrealized gains and (losses): | ||||
Change in fair value | 424 | 22 | 75 | 534 |
Total realized and unrealized gains (losses) included in earnings | 424 | 22 | 534 | |
Transfers in and / or out of Level 3 | 0 | 0 | 0 | 0 |
Ending balance | 2,150 | 2,036 | 2,150 | 2,036 |
IRLCs | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning balance | 17,818 | 0 | ||
Purchases, issuances, sales and settlements | ||||
Purchases | 0 | 0 | ||
Issuances | 87,311 | 144,931 | ||
Sales | 0 | 0 | ||
Settlements | 0 | 0 | ||
Transfers to loans held for sale, at fair value | (77,785) | (128,224) | ||
Transfers to receivables, net | 0 | |||
Purchases, issuances, sales and settlements, total | 9,526 | 16,707 | ||
Total realized and unrealized gains and (losses): | ||||
Change in fair value | (4,665) | (4,506) | ||
Total realized and unrealized gains (losses) included in earnings | (4,665) | |||
Transfers in and / or out of Level 3 | 0 | 10,478 | ||
Ending balance | $ 22,679 | $ 22,679 | ||
Interest Rate Caps | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning balance | 47 | 678 | ||
Purchases, issuances, sales and settlements | ||||
Purchases | 0 | 0 | ||
Issuances | 0 | 0 | ||
Sales | 0 | 0 | ||
Settlements | 0 | 0 | ||
Purchases, issuances, sales and settlements, total | 0 | 0 | ||
Total realized and unrealized gains and (losses): | ||||
Change in fair value | (47) | (678) | ||
Total realized and unrealized gains (losses) included in earnings | (47) | (678) | ||
Transfers in and / or out of Level 3 | 0 | 0 | ||
Ending balance | $ 0 | $ 0 |
Fair Value - Narrative (Details
Fair Value - Narrative (Details) - Loans Held for Sale - Fair Value - Level 3 - USD ($) $ in Thousands | Sep. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Loans related to Ginnie Mae guaranteed securitizations | $ 26,409 | $ 25,950 | $ 0 |
Ginnie Mae Loans | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Loans related to Ginnie Mae guaranteed securitizations | $ 26,409 |
Fair Value - Schedule of Signif
Fair Value - Schedule of Significant Assumptions used in Valuation (Details) | Sep. 30, 2020USD ($) | Dec. 31, 2019USD ($) |
Loans Held for Investment Reverse Mortgages | Measurement Input, Expected Term | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 6.1 | 6 |
Loans Held for Investment Reverse Mortgages | Measurement Input, Prepayment Rate | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 0.143 | 0.146 |
Loans Held for Investment Reverse Mortgages | Measurement Input, Discount Rate | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 0.018 | 0.028 |
Loans Held for Investment Reverse Mortgages | Minimum | Measurement Input, Expected Term | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 1 | 2.4 |
Loans Held for Investment Reverse Mortgages | Minimum | Measurement Input, Prepayment Rate | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 0.104 | 0.078 |
Loans Held for Investment Reverse Mortgages | Maximum | Measurement Input, Expected Term | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 8.2 | 7.8 |
Loans Held for Investment Reverse Mortgages | Maximum | Measurement Input, Prepayment Rate | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 0.341 | 0.283 |
Fair Value Agency Mortgage Servicing Rights | Measurement Input, Prepayment Rate | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 0.149 | 0.117 |
Fair Value Agency Mortgage Servicing Rights | Measurement Input, Default Rate | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 0.047 | 0.032 |
Fair Value Agency Mortgage Servicing Rights | Measurement Input, Discount Rate | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 0.095 | 0.093 |
Fair Value Agency Mortgage Servicing Rights | Measurement Input, Weighted Average Cost to Service | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 96 | 85 |
Fair Value Non-Agency Mortgage Servicing Rights | Measurement Input, Prepayment Rate | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 0.115 | 0.122 |
Fair Value Non-Agency Mortgage Servicing Rights | Measurement Input, Default Rate | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 0.277 | 0.273 |
Fair Value Non-Agency Mortgage Servicing Rights | Measurement Input, Discount Rate | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 0.114 | 0.113 |
Fair Value Non-Agency Mortgage Servicing Rights | Measurement Input, Weighted Average Cost to Service | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 271 | 277 |
HMBS-Related Borrowings | Measurement Input, Expected Term | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 6.1 | 6 |
HMBS-Related Borrowings | Measurement Input, Prepayment Rate | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 0.143 | 0.146 |
HMBS-Related Borrowings | Measurement Input, Discount Rate | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 0.016 | 0.027 |
HMBS-Related Borrowings | Minimum | Measurement Input, Expected Term | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 1 | 2.4 |
HMBS-Related Borrowings | Minimum | Measurement Input, Prepayment Rate | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 0.104 | 0.078 |
HMBS-Related Borrowings | Maximum | Measurement Input, Expected Term | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 8.2 | 7.8 |
HMBS-Related Borrowings | Maximum | Measurement Input, Prepayment Rate | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 0.341 | 0.283 |
Mortgage Servicing Rights Pledged | Measurement Input, Prepayment Rate | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 0.116 | 0.119 |
Mortgage Servicing Rights Pledged | Measurement Input, Default Rate | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 0.294 | 0.203 |
Mortgage Servicing Rights Pledged | Measurement Input, Discount Rate | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 0.117 | 0.107 |
Mortgage Servicing Rights Pledged | Measurement Input, Weighted Average Cost to Service | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 286 | 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] | ||
Measurement input | 0.02 | 0.02 |
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] | ||
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] | ||
Measurement input | 0.02 | 0.02 |
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] | ||
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 | Sep. 30, 2020USD ($) |
Transfers and Servicing [Abstract] | |
Weighted average prepayment speeds, 10% | $ (55,715) |
Weighted average prepayment speeds, 20% | (106,603) |
Weighted average discount rate, 10% | (15,696) |
Weighted average discount rate, 20% | $ (30,468) |
Loans Held for Sale - Schedule
Loans Held for Sale - Schedule of Loans Held for Sale Fair Value (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Movement In Loans Held For Sale At Fair Value [Roll Forward] | ||
Beginning balance | $ 208,752 | $ 176,525 |
Originations and purchases | 4,378,999 | 615,303 |
Proceeds from sales | (4,190,355) | (581,678) |
Principal collections | (21,479) | (17,155) |
Loans held for investment, at fair value | 1,900 | 1,405 |
Loans held for sale - Lower of cost or fair value | 0 | (1) |
Receivables, net | (62,949) | (2,248) |
REO (Other assets) | (2,554) | (1,501) |
Gain on sale of loans | 45,762 | 24,005 |
Increase (decrease) in fair value of loans | 1,925 | (197) |
Other | 6,965 | (6,813) |
Ending balance | $ 366,966 | $ 207,645 |
Loans Held for Sale - Schedul_2
Loans Held for Sale - Schedule of Loans Held for Sale Fair Value (Footnote) (Details) - USD ($) | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 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 | $ (5,800,000) | $ (7,400,000) | ||
Loans held for sale, at fair value | 366,966,000 | 207,645,000 | $ 208,752,000 | $ 176,525,000 |
Ginnie Mae Loans | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loans held for sale, at fair value | $ 26,400,000 | $ 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 | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Movement In Loans Held For Sale At Fair Value [Roll Forward] | ||
Beginning balance | $ 66,517 | $ 66,097 |
Purchases | 0 | 257,611 |
Proceeds from sales | (45,974) | (183,048) |
Principal collections | (1,319) | (5,802) |
Receivables, net | 61 | (78,865) |
REO (Other assets) | 0 | (2,739) |
Loans held for sale - Fair value | 0 | 1 |
Gain on sale of loans | 474 | 3,364 |
Decrease in valuation allowance | 412 | 4,473 |
Other | 3,494 | 6,842 |
Ending balance | $ 23,665 | $ 67,934 |
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 | Sep. 30, 2020 | Sep. 30, 2019 |
Ginnie Mae Loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans repurchase obligation | $ 14.8 | $ 58.6 |
Loans Held for Sale - Schedul_5
Loans Held for Sale - Schedule of Changes in Valuation Allowance (Details) - Valuation Allowance for Loans Held for Sale - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Beginning balance | $ 6,400 | $ 10,057 | $ 6,643 | $ 11,569 |
Provision | (45) | 769 | 1,084 | 1,805 |
Transfer from Liability for indemnification obligations (Other liabilities) | 42 | 266 | 117 | 340 |
Sales of loans | (166) | (3,996) | (1,613) | (6,618) |
Ending balance | $ 6,231 | $ 7,096 | $ 6,231 | $ 7,096 |
Loans Held for Sale - Schedul_6
Loans Held for Sale - Schedule of Gains on Loans Held for Sale, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
MSRs retained on transfers of forward mortgage loans | $ 22,096 | $ 605 | $ 37,785 | $ 2,249 |
Gain on sales of loans, net | 38,656 | 7,865 | 84,022 | 28,505 |
Change in fair value of IRLCs | 4,828 | 697 | 16,876 | 401 |
Change in fair value of loans held for sale | 3,061 | 610 | 3,367 | 936 |
Gain (loss) on economic hedge instruments | 179 | (106) | (10,141) | (3,344) |
Other | (838) | (54) | (1,360) | (186) |
Gain on loans held for sale, net | 45,886 | 9,012 | 92,764 | 26,312 |
Gain on Sale of Repurchased Ginnie Mae Loans | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Gain on sales of loans, net | 4,663 | 1,364 | 11,036 | 3,154 |
Gain on Sale of Forward Mortgage Loans | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Gain on sales of loans, net | $ 11,897 | $ 5,896 | $ 35,201 | $ 23,102 |
Reverse Mortgages - Schedule of
Reverse Mortgages - Schedule of Loans Held For Investment and HMBS Related Borrowings (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Receivables [Abstract] | ||||
Loans held for investment - reverse mortgages, beginning balance | $ 6,718,992 | $ 5,872,407 | $ 6,269,596 | $ 5,472,199 |
Cumulative effect of fair value election | 47,038 | 0 | ||
Originations | 299,628 | 248,877 | 867,702 | 675,169 |
Repayments (principal payments received) | (249,372) | (151,292) | (619,486) | (383,806) |
Loans held for sale, at fair value | (781) | (521) | (1,900) | (1,405) |
Receivables, net | 105 | (89) | (181) | (202) |
REO (Other assets) | (38) | (211) | (403) | (366) |
Change in fair value | 81,396 | 80,071 | 287,564 | 287,653 |
Securitized loans (pledged to HMBS-Related Borrowings) | 6,715,093 | 5,960,959 | 6,715,093 | 5,960,959 |
Un-securitized loans | 134,837 | 88,283 | 134,837 | 88,283 |
Loans held for investment, reverse mortgages, ending balance | 6,849,930 | 6,049,242 | 6,849,930 | 6,049,242 |
Home Equity Conversion Mortgage-Backed Securities Related Borrowings At Fair Value | (6,477,616) | (5,745,383) | (6,063,435) | (5,380,448) |
Securitization of HECM loans accounted for as a financing | (307,754) | (246,734) | (914,559) | (681,681) |
Repayments (principal payments received) | 247,793 | 149,079 | 613,026 | 377,094 |
Change in fair value | (68,966) | (60,927) | (241,575) | (218,930) |
Home Equity Conversion Mortgage-Backed Securities Related Borrowings At Fair Value | (6,606,543) | (5,903,965) | (6,606,543) | (5,903,965) |
Securitized loans (pledged to HMBS-Related Borrowings) | $ (6,606,543) | $ (5,903,965) | $ (6,606,543) | $ (5,903,965) |
Reverse Mortgages - Schedule _2
Reverse Mortgages - Schedule of Reverse Mortgage Revenue, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Receivables [Abstract] | ||||
Gain on new originations | $ 13,545 | $ 5,075 | $ 33,156 | $ 10,422 |
Change in fair value of securitized loans held for investment and HMBS-related borrowings, net | (1,115) | 14,069 | 12,832 | 58,301 |
Loan fees and other | 2,069 | 1,116 | 5,067 | 4,153 |
Reverse mortgage revenue, net | $ 14,499 | $ 20,260 | $ 51,055 | $ 72,876 |
Advances - Schedule of Advances
Advances - Schedule of Advances Paid on Behalf of Borrowers or on Foreclosed Properties (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
Advances On Behalf of Borrowers [Line Items] | ||||||
Advances, gross | $ 838,682 | $ 1,066,448 | ||||
Allowance for losses | (6,078) | $ (7,820) | (9,925) | $ (9,297) | $ (27,653) | $ (23,259) |
Advances, net | 832,604 | 1,056,523 | ||||
Principal and Interest | ||||||
Advances On Behalf of Borrowers [Line Items] | ||||||
Advances, gross | 299,355 | 414,846 | ||||
Taxes and Insurance | ||||||
Advances On Behalf of Borrowers [Line Items] | ||||||
Advances, gross | 342,704 | 422,383 | ||||
Foreclosures, Bankruptcy, REO and Other | ||||||
Advances On Behalf of Borrowers [Line Items] | ||||||
Advances, gross | $ 196,623 | $ 229,219 |
Advances - Schedule of Activity
Advances - Schedule of Activity in Advances (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Advances [Roll Forward] | ||
Beginning balance | $ 1,056,523 | $ 1,186,676 |
Asset acquisitions | 14 | 1,457 |
New advances | 667,577 | 394,964 |
Sales of advances | (604) | (747) |
Collections of advances and other | (894,753) | (557,868) |
Net decrease (increase) in allowance for losses | 3,847 | 13,962 |
Ending balance | $ 832,604 | $ 1,038,444 |
Advances - Schedule of Changes
Advances - Schedule of Changes in Allowance for Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Financing Receivable, Allowance for Credit Loss [Line Items] | ||||
Beginning balance | $ 7,820 | $ 27,653 | $ 9,925 | $ 23,259 |
Provision | 2,173 | 729 | 5,944 | 4,532 |
Net charge-offs and other | (3,915) | (19,085) | (9,791) | (18,494) |
Ending balance | $ 6,078 | $ 9,297 | $ 6,078 | $ 9,297 |
Advances - Schedule of Change_2
Advances - Schedule of Changes in Allowance for Losses (Footnote) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
Financing Receivable, Allowance for Credit Loss [Line Items] | ||||||
Allowance for losses | $ 6,078 | $ 7,820 | $ 9,925 | $ 9,297 | $ 27,653 | $ 23,259 |
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 | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Servicing Asset at Fair Value, Amount [Roll Forward] | ||||
Beginning balance | $ 1,044,914 | $ 1,312,633 | $ 1,486,395 | $ 1,457,149 |
Sales and other transfers | (1) | (15) | (108) | (585) |
Recognized on the sale of residential mortgage loans | 22,096 | 1,235 | 37,785 | 3,933 |
Purchase of MSRs | 32,249 | 10,566 | 78,994 | 124,955 |
Servicing transfers and adjustments | 16 | (3,105) | (263,427) | (7,872) |
Changes in fair value: | ||||
Changes in valuation inputs or other assumptions | 17,823 | 188,933 | (138,672) | 29,840 |
Realization of expected future cash flows and other changes | (48,084) | (54,694) | (131,954) | (151,867) |
Ending balance | 1,069,013 | 1,455,553 | 1,069,013 | 1,455,553 |
Fair Value Agency Mortgage Servicing Rights | ||||
Servicing Asset at Fair Value, Amount [Roll Forward] | ||||
Beginning balance | 305,085 | 745,735 | 714,006 | 865,587 |
Sales and other transfers | 0 | 0 | 0 | (29) |
Recognized on the sale of residential mortgage loans | 22,096 | 1,235 | 37,785 | 3,933 |
Purchase of MSRs | 32,249 | 9,298 | 78,994 | 123,600 |
Servicing transfers and adjustments | 16 | 0 | (263,830) | 0 |
Changes in fair value: | ||||
Changes in valuation inputs or other assumptions | 4,074 | (63,360) | (159,351) | (235,036) |
Realization of expected future cash flows and other changes | (23,856) | (36,898) | (67,940) | (102,045) |
Ending balance | 339,664 | 656,010 | 339,664 | 656,010 |
Fair Value Non-Agency Mortgage Servicing Rights | ||||
Servicing Asset at Fair Value, Amount [Roll Forward] | ||||
Beginning balance | 739,829 | 566,898 | 772,389 | 591,562 |
Sales and other transfers | (1) | (15) | (108) | (556) |
Recognized on the sale of residential mortgage loans | 0 | 0 | 0 | 0 |
Purchase of MSRs | 0 | 1,268 | 0 | 1,355 |
Servicing transfers and adjustments | 0 | (3,105) | 403 | (7,872) |
Changes in fair value: | ||||
Changes in valuation inputs or other assumptions | 13,749 | 252,293 | 20,679 | 264,876 |
Realization of expected future cash flows and other changes | (24,228) | (17,796) | (64,014) | (49,822) |
Ending balance | $ 729,349 | $ 799,543 | $ 729,349 | $ 799,543 |
Mortgage Servicing - Schedule_2
Mortgage Servicing - Schedule of Activity Related to MSRs - Fair Value Measurement Method (Footnote) (Details) - USD ($) $ in Thousands | Feb. 20, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
Servicing Assets at Fair Value [Line Items] | |||||
Servicing transfers and adjustments | $ (16) | $ 3,105 | $ 263,427 | $ 7,872 | |
New Residential Investment Corp | |||||
Servicing Assets at Fair Value [Line Items] | |||||
Servicing transfers and adjustments | $ 263,700 |
Mortgage Servicing - Schedule_3
Mortgage Servicing - Schedule of Composition of Servicing UPB (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 |
Transfers and Servicing [Abstract] | |||
Owned MSRs | $ 71,301,427 | $ 70,973,496 | $ 71,372,447 |
NRZ pledged MSRs | 66,782,351 | 108,837,877 | 113,441,618 |
Total recognized MSRs | $ 138,083,778 | $ 179,811,373 | $ 184,814,065 |
Mortgage Servicing - Schedule_4
Mortgage Servicing - Schedule of Components of Servicing and Subservicing Fees (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Transfers and Servicing [Abstract] | ||||
Servicing | $ 53,410 | $ 61,485 | $ 161,154 | $ 170,054 |
Subservicing | 10,324 | 1,365 | 26,143 | 11,775 |
NRZ | 91,015 | 146,567 | 299,089 | 443,505 |
Servicing and Subservicing fees, total | 154,749 | 209,417 | 486,386 | 625,334 |
Late charges | 11,012 | 14,105 | 38,323 | 42,786 |
Custodial accounts (float earnings) | 1,057 | 13,464 | 8,787 | 38,739 |
Loan collection fees | 3,047 | 3,862 | 10,048 | 11,613 |
Home Affordable Modification Program (HAMP) fees | 104 | 1,216 | 532 | 4,558 |
Other, net | 11,753 | 6,453 | 24,369 | 22,063 |
Ancillary income | 26,973 | 39,100 | 82,059 | 119,759 |
Servicing and subservicing fees | $ 181,722 | $ 248,517 | $ 568,445 | $ 745,093 |
Mortgage Servicing - Narrative
Mortgage Servicing - Narrative (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | |
Servicing Assets at Fair Value [Line Items] | |||
UPB of loans acquired | $ 9,900 | $ 11,900 | |
UPB of MSRs sold | 55.7 | ||
Float balances | 2,000 | $ 1,700 | $ 2,100 |
Fair Value Non-Agency Mortgage Servicing Rights | |||
Servicing Assets at Fair Value [Line Items] | |||
UPB of MSRs sold | $ 116.1 |
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 | 9 Months Ended | ||||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | |
Servicing Liabilities at Fair Value [Line Items] | ||||||||
MSRs, at fair value | $ 1,069,013 | $ 1,455,553 | $ 1,069,013 | $ 1,455,553 | $ 1,044,914 | $ 1,486,395 | $ 1,312,633 | $ 1,457,149 |
Due from NRZ | 2,364 | 2,364 | 9,197 | |||||
Other financing liabilities, at fair value | 588,321 | 588,321 | 972,595 | |||||
Interest expense | 57,404 | 256,416 | 105,684 | 303,302 | ||||
PHH MSR Agreements | ||||||||
Servicing Liabilities at Fair Value [Line Items] | ||||||||
Changes in fair value | 0 | 30,156 | 40,720 | 111,034 | ||||
Runoff and settlement | 0 | 15,881 | 7,492 | 49,469 | ||||
Financing Liability - MSRs Pledged | ||||||||
Servicing Liabilities at Fair Value [Line Items] | ||||||||
Other financing liabilities, at fair value | 577,309 | 577,309 | 950,593 | |||||
New Residential Investment Corp | ||||||||
Servicing Liabilities at Fair Value [Line Items] | ||||||||
MSRs, at fair value | 577,309 | 577,309 | 915,148 | |||||
Due from NRZ | 2,364 | 2,364 | 33,364 | |||||
Due to NRZ | 95,803 | 95,803 | 63,596 | |||||
Servicing fees collected on behalf of NRZ | 91,015 | 146,567 | 299,089 | 443,505 | ||||
Less: Subservicing fee retained by Ocwen | 25,674 | 35,462 | 80,529 | 108,774 | ||||
Net servicing fees remitted to NRZ | 65,341 | 111,105 | 218,560 | 334,731 | ||||
Changes in fair value | (10,401) | (200,704) | 21,314 | (123,721) | ||||
Runoff and settlement | 15,650 | 53,756 | 84,185 | 157,173 | ||||
Other | 2,688 | 1,637 | 7,377 | (2,023) | ||||
Interest expense | 57,404 | 256,416 | 105,684 | 303,302 | ||||
New Residential Investment Corp | Sale and Transfers of Mortgage Servicing Rights | ||||||||
Servicing Liabilities at Fair Value [Line Items] | ||||||||
Due from NRZ | 0 | 0 | 24,167 | |||||
New Residential Investment Corp | Subservicing Fees and Reimbursable Expenses | ||||||||
Servicing Liabilities at Fair Value [Line Items] | ||||||||
Due from NRZ | 2,364 | 2,364 | 9,197 | |||||
New Residential Investment Corp | Original Rights to MSRs Agreements | ||||||||
Servicing Liabilities at Fair Value [Line Items] | ||||||||
Other financing liabilities, at fair value | 577,309 | 577,309 | 603,046 | |||||
Changes in fair value | (10,401) | (228,644) | (18,503) | (230,193) | ||||
Runoff and settlement | 15,650 | 11,170 | 41,572 | 31,617 | ||||
New Residential Investment Corp | 2017 Agreements and New RMSR Agreements | ||||||||
Servicing Liabilities at Fair Value [Line Items] | ||||||||
Other financing liabilities, at fair value | 0 | 0 | 35,445 | |||||
Changes in fair value | 0 | (2,216) | (903) | (4,562) | ||||
Runoff and settlement | 0 | $ 26,705 | 35,121 | $ 76,087 | ||||
New Residential Investment Corp | PHH MSR Agreements | ||||||||
Servicing Liabilities at Fair Value [Line Items] | ||||||||
Other financing liabilities, at fair value | $ 0 | $ 0 | $ 312,102 |
Rights to MSRs - Schedule of Ac
Rights to MSRs - Schedule of Activity Related to Financing Liability - MSRs Pledged (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Servicing Assets at Fair Value [Line Items] | ||||
Beginning balance, Financing Liability | $ 582,558 | $ 844,913 | $ 950,593 | $ 1,032,856 |
Additions | 345 | 1,221 | ||
Sales | (1) | (15) | (108) | (585) |
Derecognition of MSRs pledged financing liability | (263,344) | 0 | ||
Ending balance, Financing Liability | 577,309 | 986,952 | 577,309 | 986,952 |
Original Rights to MSRs Agreements | ||||
Servicing Assets at Fair Value [Line Items] | ||||
Beginning balance, Financing Liability | 582,558 | 412,909 | 603,046 | 436,511 |
Changes in fair value | 10,402 | 228,643 | 18,503 | 230,193 |
Runoff and settlement | (15,651) | (11,170) | (41,572) | (31,617) |
Calls | (3,095) | (2,668) | (7,800) | |
Ending balance, Financing Liability | 577,309 | 627,287 | 577,309 | 627,287 |
2017 Agreements and New RMSR Agreements | ||||
Servicing Assets at Fair Value [Line Items] | ||||
Beginning balance, Financing Liability | 0 | 88,103 | 35,445 | 138,854 |
Changes in fair value | 2,216 | 903 | 4,562 | |
Runoff and settlement | (26,705) | (35,121) | (76,087) | |
Calls | (2,169) | (1,227) | (5,884) | |
Ending balance, Financing Liability | 0 | 61,445 | 0 | 61,445 |
PHH MSR Agreements | ||||
Servicing Assets at Fair Value [Line Items] | ||||
Beginning balance, Financing Liability | 0 | 343,901 | 312,102 | 457,491 |
Additions | 345 | 1,221 | ||
Sales | (226) | 11 | ||
Changes in fair value | (30,156) | (40,720) | (111,034) | |
Runoff and settlement | (15,881) | (7,492) | (49,469) | |
Derecognition of MSRs pledged financing liability | (263,664) | |||
Ending balance, Financing Liability | $ 0 | $ 298,220 | $ 0 | $ 298,220 |
Rights to MSRs - Narrative (Det
Rights to MSRs - Narrative (Details) $ in Thousands | Oct. 01, 2020Loan | Sep. 01, 2020Loan | Jun. 16, 2017 | Jan. 31, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2020USD ($) |
Servicing Assets at Fair Value [Line Items] | ||||||||
Proceeds from sale of mortgage servicing rights accounted for as financing | $ 279,600 | $ 54,600 | $ 0 | $ 1,221 | ||||
UPB of rights to MSRs sold | 69,100,000 | |||||||
Initial term to subservice mortgage servicing rights (years) | 3 years | |||||||
New Residential Investment Corp | ||||||||
Servicing Assets at Fair Value [Line Items] | ||||||||
UPB of rights to MSRs sold | 85,593,313 | |||||||
Unpaid principal balance of loans related to termination | 16,000,000 | $ 37,100,000 | ||||||
Number of loans de-boarded from servicing portfolio | Loan | 133,718 | |||||||
New Residential Investment Corp | Subsequent Event | ||||||||
Servicing Assets at Fair Value [Line Items] | ||||||||
Number of loans de-boarded from servicing portfolio | Loan | 136,500 | |||||||
New Residential Investment Corp | Mortgage Servicing Rights Title Retained | ||||||||
Servicing Assets at Fair Value [Line Items] | ||||||||
UPB of rights to MSRs sold | 15,060,347 | |||||||
2017 Agreements and New RMSR Agreements | New Residential Investment Corp | Mortgage Servicing Rights Title Retained | ||||||||
Servicing Assets at Fair Value [Line Items] | ||||||||
UPB of rights to MSRs sold | $ 16,900,000 |
Receivables - Schedule of Recei
Receivables - Schedule of Receivables (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Receivables [Abstract] | ||
Government-insured loan claims - Forward | $ 107,917 | $ 122,557 |
Government-insured loan claims - Reverse | 43,681 | 14,123 |
Sales and transfers of MSRs - Due from NRZ | 0 | 24,167 |
Subservicing fees and reimbursable expenses - Due from NRZ | 2,364 | 9,197 |
Reimbursable expenses | 5,604 | 13,052 |
Due from custodial accounts | 8,212 | 27,175 |
Other | 1,869 | 4,970 |
Servicing receivable, total | 169,647 | 215,241 |
Income taxes receivable | 68,683 | 37,888 |
Other receivables | 4,795 | 5,963 |
Other receivables, gross | 243,125 | 259,092 |
Allowance for losses | (41,518) | (57,872) |
Receivables, net | $ 201,607 | $ 201,220 |
Receivables - Narrative (Detail
Receivables - Narrative (Detail) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Servicing | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Allowance for financing notes | $ 40.8 | $ 56.9 |
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 | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Beginning balance | $ 53,310 | $ 50,511 | $ 56,868 | $ 52,497 |
Provision | 5,055 | 11,013 | 12,249 | 22,819 |
Charge-offs and other, net | (17,607) | (8,349) | (28,359) | (22,141) |
Ending balance | $ 40,758 | $ 53,175 | $ 40,758 | $ 53,175 |
Other Assets - Schedule of Othe
Other Assets - Schedule of Other Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Other Assets [Abstract] | ||
Contingent loan repurchase asset | $ 580,599 | $ 492,900 |
Derivatives, at fair value | 22,843 | 6,007 |
Prepaid expenses | 15,791 | 21,996 |
Prepaid representation, warranty and indemnification claims - Agency MSR sale | 15,173 | 15,173 |
Prepaid lender fees, net | 10,767 | 8,647 |
REO | 8,354 | 8,556 |
Security deposits | 2,181 | 2,163 |
Deferred tax asset, net | 1,821 | 2,169 |
Mortgage backed securities, at fair value | 2,150 | 2,075 |
Interest-earning time deposits | 377 | 390 |
Other | 2,412 | 3,164 |
Other assets | $ 662,468 | $ 563,240 |
Borrowings - Schedule of Match
Borrowings - Schedule of Match Funded Liabilities (Details) - USD ($) | Sep. 30, 2020 | Aug. 17, 2020 | May 07, 2020 | May 06, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | |||||
Borrowing Capacity | $ 795,000,000 | ||||
Advance match funded liabilities (related to VIEs) | 580,078,000 | $ 679,109,000 | |||
Advance Receivables Backed Notes, Series 2015-VF1 | |||||
Debt Instrument [Line Items] | |||||
Borrowing Capacity | $ 70,000,000 | $ 60,000,000 | |||
Advance Match Funded Liabilities | |||||
Debt Instrument [Line Items] | |||||
Available borrowing capacity | $ 214,922,000 | ||||
Weighted average interest rate | 1.97% | 2.81% | |||
Advance match funded liabilities (related to VIEs) | $ 580,078,000 | $ 679,109,000 | |||
Total Ocwen Master Advance Receivables Trust (OMART) | |||||
Debt Instrument [Line Items] | |||||
Borrowing Capacity | 725,000,000 | ||||
Available borrowing capacity | $ 158,080,000 | ||||
Weighted average interest rate | 1.94% | 2.79% | |||
Advance match funded liabilities (related to VIEs) | $ 566,920,000 | $ 660,555,000 | |||
Total Ocwen Master Advance Receivables Trust (OMART) | Advance Receivables Backed Notes - Series 2015-VF5 | |||||
Debt Instrument [Line Items] | |||||
Borrowing Capacity | 250,000,000 | $ 250,000,000 | $ 500,000,000 | $ 200,000,000 | |
Available borrowing capacity | $ 158,080,000 | ||||
Weighted average interest rate | 4.28% | 3.36% | |||
Advance match funded liabilities (related to VIEs) | $ 91,920,000 | $ 190,555,000 | |||
Total Ocwen Master Advance Receivables Trust (OMART) | Advance Receivables Backed Notes, Series 2019-T1 | |||||
Debt Instrument [Line Items] | |||||
Borrowing Capacity | 0 | ||||
Available borrowing capacity | $ 0 | ||||
Weighted average interest rate | 0.00% | 2.62% | |||
Advance match funded liabilities (related to VIEs) | $ 0 | $ 185,000,000 | |||
Total Ocwen Master Advance Receivables Trust (OMART) | Advance Receivables Backed Notes, Series 2019-T2 | |||||
Debt Instrument [Line Items] | |||||
Borrowing Capacity | 0 | ||||
Available borrowing capacity | $ 0 | ||||
Weighted average interest rate | 0.00% | 2.53% | |||
Advance match funded liabilities (related to VIEs) | $ 0 | $ 285,000,000 | |||
Total Ocwen Master Advance Receivables Trust (OMART) | Advance Receivables Backed Notes, Series 2020-T1 | |||||
Debt Instrument [Line Items] | |||||
Borrowing Capacity | 475,000,000 | ||||
Available borrowing capacity | $ 0 | ||||
Weighted average interest rate | 1.49% | 0.00% | |||
Advance match funded liabilities (related to VIEs) | $ 475,000,000 | $ 0 | |||
Total Ocwen Freddie Advance Funding Facility (OFAF) | Advance Receivables Backed Notes, Series 2015-VF1 | |||||
Debt Instrument [Line Items] | |||||
Borrowing Capacity | 70,000,000 | ||||
Available borrowing capacity | $ 56,842,000 | ||||
Weighted average interest rate | 3.28% | 3.53% | |||
Advance match funded liabilities (related to VIEs) | $ 13,158,000 | $ 18,554,000 |
Borrowings - Schedule of Matc_2
Borrowings - Schedule of Match Funded Liabilities (Footnote) (Details) - USD ($) | 9 Months Ended | ||||
Sep. 30, 2020 | Aug. 17, 2020 | May 07, 2020 | May 06, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | $ 795,000,000 | ||||
Advance match funded liabilities | $ 580,078,000 | $ 679,109,000 | |||
Advance Receivables Backed Notes - Series 2015-VF5 | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 4.00% | ||||
Advance Receivables Backed Notes, Series 2015-VF1 | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 3.00% | ||||
Maximum borrowing capacity | $ 70,000,000 | $ 60,000,000 | |||
Total Ocwen Master Advance Receivables Trust (OMART) | |||||
Debt Instrument [Line Items] | |||||
Available borrowing capacity based on amount of eligible collateral | $ 10,000,000 | ||||
Available borrowing capacity | 158,080,000 | ||||
Maximum borrowing capacity | 725,000,000 | ||||
Advance match funded liabilities | $ 566,920,000 | $ 660,555,000 | |||
Weighted average interest rate | 1.94% | 2.79% | |||
Total Ocwen Master Advance Receivables Trust (OMART) | Advance Receivables Backed Notes - Series 2015-VF5 | |||||
Debt Instrument [Line Items] | |||||
Available borrowing capacity | $ 158,080,000 | ||||
Maximum borrowing capacity | 250,000,000 | $ 250,000,000 | $ 500,000,000 | $ 200,000,000 | |
Advance match funded liabilities | $ 91,920,000 | $ 190,555,000 | |||
Weighted average interest rate | 4.28% | 3.36% | |||
Total Ocwen Master Advance Receivables Trust (OMART) | Advance Receivables Backed Notes, Series 2020-T1 | |||||
Debt Instrument [Line Items] | |||||
Available borrowing capacity | $ 0 | ||||
Maximum borrowing capacity | $ 475,000,000 | ||||
Weighted average interest rate | 1.49% | ||||
Advance match funded liabilities | $ 475,000,000 | $ 0 | |||
Weighted average interest rate | 1.49% | 0.00% | |||
Total Ocwen Master Advance Receivables Trust (OMART) | Advance Receivables Backed Notes, Series 2020-T1 | Minimum | |||||
Debt Instrument [Line Items] | |||||
Weighted average interest rate | 1.28% | ||||
Total Ocwen Master Advance Receivables Trust (OMART) | Advance Receivables Backed Notes, Series 2020-T1 | Maximum | |||||
Debt Instrument [Line Items] | |||||
Weighted average interest rate | 5.42% | ||||
Total Ocwen Freddie Advance Funding Facility (OFAF) | |||||
Debt Instrument [Line Items] | |||||
Available borrowing capacity based on amount of eligible collateral | $ 0 | ||||
Total Ocwen Freddie Advance Funding Facility (OFAF) | Advance Receivables Backed Notes, Series 2015-VF1 | |||||
Debt Instrument [Line Items] | |||||
Available borrowing capacity | 56,842,000 | ||||
Maximum borrowing capacity | 70,000,000 | ||||
Advance match funded liabilities | $ 13,158,000 | $ 18,554,000 | |||
Weighted average interest rate | 3.28% | 3.53% |
Borrowings - Narrative (Details
Borrowings - Narrative (Details) | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Debt Instrument [Line Items] | |
Covenant compliance, consolidated tangible net worth at period end | $ 200,000,000 |
Debt instrument covenant compliance on repurchase of securities and prepayment of junior debt | $ 10,000,000 |
Debt Instrument, Redemption, Period One | |
Debt Instrument [Line Items] | |
Redemption price | 104.188% |
Debt Instrument, Redemption, Period Two | |
Debt Instrument [Line Items] | |
Redemption price | 102.094% |
Thereafter | |
Debt Instrument [Line Items] | |
Redemption price | 100.00% |
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 | $ 125,000,000 |
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 |
Borrowings - Schedule of Financ
Borrowings - Schedule of Financing Liabilities (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | ||||||
HMBS-related borrowings | $ 6,606,543 | $ 6,063,435 | $ 6,477,616 | $ 5,903,965 | $ 5,745,383 | $ 5,380,448 |
Other financing liabilities, at fair value | 588,321 | 972,595 | ||||
Total Financing liabilities | 7,194,864 | 7,036,030 | ||||
Financing liability – MSRs pledged | ||||||
Debt Instrument [Line Items] | ||||||
Other financing liabilities, at fair value | 577,309 | 950,593 | ||||
Financing liability – MSRs pledged | Original Rights to MSRs Agreements | ||||||
Debt Instrument [Line Items] | ||||||
Other financing liabilities, at fair value | 577,309 | 603,046 | ||||
Financing liability – MSRs pledged | 2017 Agreements and New RMSR Agreements | ||||||
Debt Instrument [Line Items] | ||||||
Other financing liabilities, at fair value | 0 | 35,445 | ||||
Financing liability – MSRs pledged | PMC MSR Agreements | ||||||
Debt Instrument [Line Items] | ||||||
Other financing liabilities, at fair value | 0 | 312,102 | ||||
IndyMac Mortgage Loan Trust | ||||||
Debt Instrument [Line Items] | ||||||
Other financing liabilities, at fair value | 0 | 9,794 | ||||
Residential Asset Securitization Trust | ||||||
Debt Instrument [Line Items] | ||||||
Other financing liabilities, at fair value | 11,012 | 12,208 | ||||
Financing Liability Owed to Securitization Investors | ||||||
Debt Instrument [Line Items] | ||||||
Other financing liabilities, at fair value | 11,012 | 22,002 | ||||
Secured Debt | ||||||
Debt Instrument [Line Items] | ||||||
Total Financing liabilities | 290,671 | 372,015 | ||||
Secured Debt | Master Repurchase Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Total Financing liabilities | $ 0 | $ 0 | ||||
London Interbank Offered Rate (LIBOR) | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 0.15% | 1.76% | ||||
London Interbank Offered Rate (LIBOR) | Financing Liabilities | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 2.60% | |||||
London Interbank Offered Rate (LIBOR) | Secured Debt | Master Repurchase Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 1.80% |
Borrowings - Schedule of Fina_2
Borrowings - Schedule of Financing Liabilities (Footnote) (Details) | Sep. 30, 2020 |
London Interbank Offered Rate (LIBOR) | Financing Liability Owed to Securitization Investors | |
Debt Instrument [Line Items] | |
Weighted average interest rate | 0.45% |
Minimum | Residential Asset Securitization Trust | |
Debt Instrument [Line Items] | |
Weighted average interest rate | 4.25% |
Maximum | Residential Asset Securitization Trust | |
Debt Instrument [Line Items] | |
Weighted average interest rate | 5.75% |
Borrowings - Schedule of Other
Borrowings - Schedule of Other Secured Borrowings (Details) - USD ($) $ in Thousands | May 31, 2020 | Sep. 30, 2020 | Dec. 31, 2019 |
Line of Credit Facility [Line Items] | |||
Other secured borrowings | $ 7,194,864 | $ 7,036,030 | |
London Interbank Offered Rate (LIBOR) | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 0.15% | 1.76% | |
Secured Debt | |||
Line of Credit Facility [Line Items] | |||
Uncommitted available borrowing capacity | $ 74,947 | ||
Available borrowing capacity | 136,071 | ||
Other secured borrowings | 290,671 | $ 372,015 | |
Unamortized debt issuance costs - SSTL | (6,712) | (3,381) | |
Discount - SSTL | (430) | (1,134) | |
Long-term debt | $ 915,292 | $ 1,025,791 | |
Weighted average interest rate | 4.51% | 4.74% | |
Secured Debt | Senior Secured Term Loan | |||
Line of Credit Facility [Line Items] | |||
Uncommitted available borrowing capacity | $ 0 | ||
Available borrowing capacity | 0 | ||
Other secured borrowings | 190,000 | $ 326,066 | |
Secured Debt | Master Repurchase Agreement | |||
Line of Credit Facility [Line Items] | |||
Uncommitted available borrowing capacity | 19,756 | ||
Available borrowing capacity | 0 | ||
Other secured borrowings | 155,244 | 91,573 | |
Secured Debt | Mortgage Warehouse Agreement | |||
Line of Credit Facility [Line Items] | |||
Uncommitted available borrowing capacity | 1,000 | ||
Available borrowing capacity | 0 | ||
Other secured borrowings | 0 | 72,443 | |
Secured Debt | Master Repurchase Agreement | |||
Line of Credit Facility [Line Items] | |||
Uncommitted available borrowing capacity | 50,000 | ||
Available borrowing capacity | 8,869 | ||
Other secured borrowings | 191,131 | 139,227 | |
Secured Debt | Master Repurchase Agreement | |||
Line of Credit Facility [Line Items] | |||
Uncommitted available borrowing capacity | 0 | ||
Available borrowing capacity | 0 | ||
Other secured borrowings | $ 0 | 898 | |
Interest rate at index floor rate | 4.00% | ||
Secured Debt | Master Repurchase Agreement | |||
Line of Credit Facility [Line Items] | |||
Uncommitted available borrowing capacity | $ 50,000 | ||
Available borrowing capacity | 0 | ||
Other secured borrowings | 0 | 0 | |
Secured Debt | Participation Agreement | |||
Line of Credit Facility [Line Items] | |||
Uncommitted available borrowing capacity | 120,000 | ||
Other secured borrowings | 0 | 17,304 | |
Secured Debt | Master Repurchase Agreement | |||
Line of Credit Facility [Line Items] | |||
Uncommitted available borrowing capacity | 0 | ||
Available borrowing capacity | 76,497 | ||
Other secured borrowings | 13,503 | 0 | |
Secured Debt | Master Repurchase Agreement | |||
Line of Credit Facility [Line Items] | |||
Available borrowing capacity | 1,000 | ||
Other secured borrowings | 0 | 0 | |
Secured Debt | Mortgage Warehouse Agreement | |||
Line of Credit Facility [Line Items] | |||
Uncommitted available borrowing capacity | 0 | ||
Available borrowing capacity | 48,211 | ||
Other secured borrowings | 1,789 | 10,780 | |
Secured Debt | Mortgage Warehouse Agreement | |||
Line of Credit Facility [Line Items] | |||
Uncommitted available borrowing capacity | 19,904 | ||
Available borrowing capacity | 0 | ||
Other secured borrowings | 80,096 | 0 | |
Secured Debt | Mortgage Warehouse Agreement | |||
Line of Credit Facility [Line Items] | |||
Uncommitted available borrowing capacity | 100,000 | ||
Available borrowing capacity | 0 | ||
Other secured borrowings | 0 | 0 | |
Secured Debt | Agency Mortgage Servicing Rights Financing Facility | |||
Line of Credit Facility [Line Items] | |||
Uncommitted available borrowing capacity | 0 | ||
Available borrowing capacity | 136,071 | ||
Other secured borrowings | 113,929 | 147,706 | |
Secured Debt | Ginnie Mae Mortgage Servicing Rights Financing Facility | |||
Line of Credit Facility [Line Items] | |||
Uncommitted available borrowing capacity | 74,947 | ||
Available borrowing capacity | 0 | ||
Long-term debt | 52,553 | 72,320 | |
Secured Debt | Ocwen Excess Spread-Collateralized Notes, Series 2019-PLS1 Class A | |||
Line of Credit Facility [Line Items] | |||
Uncommitted available borrowing capacity | 0 | ||
Available borrowing capacity | 0 | ||
Long-term debt | 74,021 | 94,395 | |
Secured Debt | OASIS Series 2014-1 | |||
Line of Credit Facility [Line Items] | |||
Uncommitted available borrowing capacity | 0 | ||
Available borrowing capacity | 0 | ||
Long-term debt | 50,168 | 57,594 | |
Secured Debt | Total Servicing Lines of Credit | |||
Line of Credit Facility [Line Items] | |||
Uncommitted available borrowing capacity | 435,607 | ||
Available borrowing capacity | 270,648 | ||
Short term and long term debt | $ 922,434 | 1,030,306 | |
Secured Debt | London Interbank Offered Rate (LIBOR) | Mortgage Warehouse Agreement | |||
Line of Credit Facility [Line Items] | |||
Interest rate at index floor rate | 0.00% | ||
Secured Debt | London Interbank Offered Rate (LIBOR) | Master Repurchase Agreement | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 1.80% | ||
Interest rate at index floor rate | 0.35% | ||
Secured Debt | London Interbank Offered Rate (LIBOR) | Master Repurchase Agreement | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 2.50% | ||
Secured Debt | London Interbank Offered Rate (LIBOR) | Mortgage Warehouse Agreement | |||
Line of Credit Facility [Line Items] | |||
Interest rate at index floor rate | 5.25% | ||
Secured Debt | London Interbank Offered Rate (LIBOR) | Mortgage Warehouse Agreement | |||
Line of Credit Facility [Line Items] | |||
Interest rate at index floor rate | 3.50% | ||
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% | 7.00% | |
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 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] | |||
Basis spread on variable rate | 2.25% | ||
Secured Debt | Minimum | London Interbank Offered Rate (LIBOR) | Mortgage Warehouse Agreement | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 3.50% | ||
Secured Debt | Minimum | London Interbank Offered Rate (LIBOR) | Mortgage Warehouse Agreement | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 2.50% | ||
Secured Debt | Maximum | London Interbank Offered Rate (LIBOR) | Mortgage 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] | |||
Basis spread on variable rate | 2.75% | ||
Warehouse Agreement Borrowings | |||
Line of Credit Facility [Line Items] | |||
Available borrowing capacity | $ 34,100 | ||
Warehouse Agreement Borrowings | Secured Debt | |||
Line of Credit Facility [Line Items] | |||
Uncommitted available borrowing capacity | 360,660 | ||
Available borrowing capacity | 134,577 | ||
Other secured borrowings | $ 441,763 | $ 332,225 | |
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 | 4.50% | ||
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% | ||
Warehouse Agreement Borrowings | Secured Debt | Eurodollar | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 3.50% | ||
Warehouse Agreement Borrowings | Secured Debt | Minimum | London Interbank Offered Rate (LIBOR) | Master Repurchase Agreement | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 2.20% | ||
Warehouse Agreement Borrowings | Secured Debt | Maximum | London Interbank Offered Rate (LIBOR) | Master Repurchase Agreement | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 3.75% |
Borrowings - Schedule of Othe_2
Borrowings - Schedule of Other Secured Borrowings (Footnote) (Details) - USD ($) | May 31, 2020 | Jan. 27, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | Nov. 15, 2020 | Oct. 08, 2020 | Jun. 30, 2020 | Jun. 25, 2020 | May 07, 2020 | May 06, 2020 | Mar. 11, 2020 | Feb. 04, 2019 |
Debt Instrument [Line Items] | ||||||||||||
Maximum borrowing capacity | $ 795,000,000 | |||||||||||
Master Repurchase Agreement | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Maximum borrowing capacity | 175,000,000 | |||||||||||
Borrowings available on committed basis | $ 110,000,000 | |||||||||||
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 | 0.15% | 1.76% | ||||||||||
Secured Debt | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Available borrowing capacity | $ 136,071,000 | |||||||||||
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 | Mortgage Warehouse Agreement | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Available borrowing capacity | 0 | |||||||||||
Secured Debt | Master Repurchase Agreement | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Available borrowing capacity | 0 | |||||||||||
Secured Debt | Master Repurchase Agreement | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Available borrowing capacity | 8,869,000 | |||||||||||
Secured Debt | Master Repurchase Agreement | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Available borrowing capacity | 0 | |||||||||||
Secured Debt | Mortgage Warehouse Agreement | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Available borrowing capacity | 48,211,000 | |||||||||||
Secured Debt | Mortgage Warehouse Agreement | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Available borrowing capacity | 0 | |||||||||||
Secured Debt | Mortgage Warehouse Agreement | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Available borrowing capacity | 0 | |||||||||||
Secured Debt | Agency Mortgage Servicing Rights Financing Facility | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Available borrowing capacity | 136,071,000 | |||||||||||
Maximum borrowing capacity | $ 250,000,000 | $ 300,000,000 | ||||||||||
Secured Debt | Ginnie Mae Mortgage Servicing Rights Financing Facility | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Available borrowing capacity | 0 | |||||||||||
Maximum borrowing capacity | 127,500,000 | $ 100,000,000 | ||||||||||
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 Warehouse Agreement | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Interest rate at index floor rate | 0.00% | |||||||||||
Secured Debt | London Interbank Offered Rate (LIBOR) | Master Repurchase Agreement | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate | 1.80% | |||||||||||
Interest rate at index floor rate | 0.35% | |||||||||||
Secured Debt | London Interbank Offered Rate (LIBOR) | Mortgage Warehouse Agreement | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Interest rate at index floor rate | 5.25% | |||||||||||
Secured Debt | London Interbank Offered Rate (LIBOR) | Mortgage Warehouse Agreement | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Interest rate at index floor rate | 3.50% | |||||||||||
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% | 7.00% | ||||||||||
OASIS Series 2014-1 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on UPB | 0.21% | |||||||||||
Secured Debt | Mortgage Warehouse Agreement | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Maximum borrowing capacity | $ 1,000,000 | $ 100,000,000 | ||||||||||
Secured Debt | Master Repurchase Agreement | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Maximum borrowing capacity | 250,000,000 | |||||||||||
Borrowings available on committed basis | 200,000,000 | |||||||||||
Secured Debt | Master Repurchase Agreement | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Maximum borrowing capacity | 50,000,000 | |||||||||||
Secured Debt | Participation Agreement | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Maximum borrowing capacity | $ 120,000,000 | |||||||||||
Borrowings available on committed basis | $ 90,000,000 | |||||||||||
Beneficial interest | 100.00% | |||||||||||
Warehouse Agreement Borrowings | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Available borrowing capacity | $ 34,100,000 | |||||||||||
Warehouse Agreement Borrowings | Secured Debt | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Available borrowing capacity | $ 134,577,000 | |||||||||||
Warehouse Agreement Borrowings | Secured Debt | Eurodollar | ||||||||||||
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 | 4.50% | |||||||||||
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% | |||||||||||
Warehouse Agreement Borrowings | Secured Debt | Interest on Underlying Mortgage Loans | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate | 0.35% | |||||||||||
Warehouse Agreement Borrowings | Secured Debt | Mortgage Warehouse Agreement | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Borrowings available on committed basis | $ 50,000,000 | |||||||||||
Warehouse Agreement Borrowings | Secured Debt | Mortgage Warehouse Agreement | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Maximum borrowing capacity | 100,000,000 | |||||||||||
Warehouse Agreement Borrowings | Secured Debt | Mortgage Warehouse Agreement | ||||||||||||
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 | Warehouse Agreement Borrowings | Secured Debt | Mortgage Warehouse Agreement | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Maximum borrowing capacity | $ 100,000,000 | $ 150,000,000 |
Borrowings - Schedule of Senior
Borrowings - Schedule of Senior Notes (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | ||
Senior notes | $ 311,689 | $ 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 | (1,098) | (1,470) |
Fair value adjustments | (265) | (497) |
Long-term debt | 311,689 | 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) | 9 Months Ended |
Sep. 30, 2020 | |
Senior Unsecured Notes | |
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 | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 |
Debt Instrument [Line Items] | |||
Cash and cash equivalents | $ 321,455 | $ 428,339 | |
Restricted cash (amounts related to variable interest entities (VIEs) of $13,108 and $20,434) | 61,511 | 64,001 | |
MSRs | 1,069,013 | 1,486,395 | |
Advances, net (amounts related to VIEs of $660,816 and $801,990) | 832,604 | 1,056,523 | |
Loans held for sale | 390,631 | 275,269 | |
Loans held for investment, at fair value (amounts related to VIEs of $11,012 and $23,342) | 6,860,942 | 6,292,938 | |
Receivables, net | 201,607 | 201,220 | |
Premises and equipment, net | 23,620 | 38,274 | |
Other assets | 662,468 | 563,240 | |
Total assets | 10,423,851 | $ 10,406,199 | $ 9,956,653 |
Advance Match Funded Liabilities | |||
Debt Instrument [Line Items] | |||
Cash and cash equivalents | 0 | ||
Restricted cash (amounts related to variable interest entities (VIEs) of $13,108 and $20,434) | 10,458 | ||
MSRs | 0 | ||
Advances, net (amounts related to VIEs of $660,816 and $801,990) | 660,816 | ||
Loans held for sale | 0 | ||
Loans held for investment, at fair value (amounts related to VIEs of $11,012 and $23,342) | 0 | ||
Receivables, net | 0 | ||
Premises and equipment, net | 0 | ||
Other assets | 0 | ||
Total assets | 671,274 | ||
Financing Liabilities | |||
Debt Instrument [Line Items] | |||
Cash and cash equivalents | 0 | ||
Restricted cash (amounts related to variable interest entities (VIEs) of $13,108 and $20,434) | 0 | ||
MSRs | 577,886 | ||
Advances, net (amounts related to VIEs of $660,816 and $801,990) | 0 | ||
Loans held for sale | 0 | ||
Loans held for investment, at fair value (amounts related to VIEs of $11,012 and $23,342) | 6,726,105 | ||
Receivables, net | 0 | ||
Premises and equipment, net | 0 | ||
Other assets | 0 | ||
Total assets | 7,303,991 | ||
Mortgage Warehouse Agreement | |||
Debt Instrument [Line Items] | |||
Cash and cash equivalents | 0 | ||
Restricted cash (amounts related to variable interest entities (VIEs) of $13,108 and $20,434) | 4,416 | ||
MSRs | 490,583 | ||
Advances, net (amounts related to VIEs of $660,816 and $801,990) | 61,081 | ||
Loans held for sale | 335,726 | ||
Loans held for investment, at fair value (amounts related to VIEs of $11,012 and $23,342) | 95,619 | ||
Receivables, net | 52,417 | ||
Premises and equipment, net | 0 | ||
Other assets | 7,077 | ||
Total assets | 1,046,919 | ||
Sale and Other Commitments | |||
Debt Instrument [Line Items] | |||
Cash and cash equivalents | 0 | ||
Restricted cash (amounts related to variable interest entities (VIEs) of $13,108 and $20,434) | 46,637 | ||
MSRs | 0 | ||
Advances, net (amounts related to VIEs of $660,816 and $801,990) | 0 | ||
Loans held for sale | 0 | ||
Loans held for investment, at fair value (amounts related to VIEs of $11,012 and $23,342) | 0 | ||
Receivables, net | 0 | ||
Premises and equipment, net | 0 | ||
Other assets | 597,953 | ||
Total assets | 644,590 | ||
Other Liabilities | |||
Debt Instrument [Line Items] | |||
Cash and cash equivalents | 321,455 | ||
Restricted cash (amounts related to variable interest entities (VIEs) of $13,108 and $20,434) | 0 | ||
MSRs | 48 | ||
Advances, net (amounts related to VIEs of $660,816 and $801,990) | 110,707 | ||
Loans held for sale | 54,905 | ||
Loans held for investment, at fair value (amounts related to VIEs of $11,012 and $23,342) | 39,218 | ||
Receivables, net | 149,190 | ||
Premises and equipment, net | 23,620 | ||
Other assets | 57,438 | ||
Total assets | $ 756,581 |
Borrowings - Schedule of Asse_2
Borrowings - Schedule of Assets Held as Collateral Related to Secured Borrowings (Footnote) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||||||
MSRs, at fair value | $ 1,069,013 | $ 1,044,914 | $ 1,486,395 | $ 1,455,553 | $ 1,312,633 | $ 1,457,149 |
Certain Cohorts | Other Liabilities | ||||||
Debt Instrument [Line Items] | ||||||
MSRs, at fair value | (500) | |||||
Certain Cohorts | Other Liabilities | Residential Mortgage Backed Securities | ||||||
Debt Instrument [Line Items] | ||||||
MSRs, at fair value | (17,400) | |||||
Certain Cohorts | Other Liabilities | EBO And PLS Mortgage Servicing Rights | ||||||
Debt Instrument [Line Items] | ||||||
MSRs, at fair value | $ 17,900 |
Other Liabilities - Schedule of
Other Liabilities - Schedule of Other Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Other Liabilities Disclosure [Abstract] | ||
Contingent loan repurchase liability | $ 580,599 | $ 492,900 |
Due to NRZ - Advance collections and servicing fees | 95,803 | 63,596 |
Other accrued expenses | 71,093 | 67,241 |
Liability for indemnification obligations | 44,170 | 52,785 |
Servicing-related obligations | 40,659 | 88,167 |
Lease liability | 34,426 | 44,488 |
Accrued legal fees and settlements | 31,015 | 30,663 |
Checks held for escheat | 29,106 | 31,959 |
Accrued interest payable | 13,891 | 5,964 |
Liability for unfunded pension obligation | 11,734 | 13,383 |
Liability for uncertain tax positions | 17,123 | 17,197 |
Liability for unfunded India gratuity plan | 5,416 | 5,331 |
Derivatives, at fair value | 1,671 | 100 |
Liability for mortgage insurance contingency | 0 | 6,820 |
Other | 20,755 | 21,579 |
Total other liabilities | $ 997,461 | $ 942,173 |
Equity - Narrative (Details)
Equity - Narrative (Details) $ / shares in Units, $ in Millions | Aug. 13, 2020 | Sep. 30, 2020USD ($)$ / sharesshares | Mar. 31, 2020USD ($)$ / sharesshares | Aug. 12, 2020shares | Feb. 03, 2020USD ($) | Dec. 31, 2019$ / sharesshares |
Equity [Abstract] | ||||||
Share repurchase program authorized amount | $ | $ 5 | |||||
Shares repurchased (shares) | 377,484 | |||||
Repurchase of common stock | $ | $ 4.5 | |||||
Shares repurchased (USD per share) | $ / shares | $ 11.90 | |||||
Payments for commissions | $ | $ 0.1 | |||||
Remaining repurchase amount | $ | $ 0.5 | |||||
Reverse stock split ratio | 0.07 | |||||
Additional shares issued on reverse stock split rounding | 4,692 | |||||
Common stock outstanding before stock split | 130,013,696 | |||||
Common Stock, Shares, Outstanding | 8,672,272 | 8,990,816 | ||||
Common Stock, Shares Authorized | 13,333,333 | 200,000,000 | 13,333,333 | |||
Common stock, par value | $ / shares | $ 0.01 | $ 0.01 |
Derivative Financial Instrume_3
Derivative Financial Instruments and Hedging Activities - Summary of Derivatives (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Derivative Notional Balance | |||
Notional balance | $ 1,308,234 | $ 1,472,566 | |
Fair value of derivative assets (liabilities) at: | |||
Derivatives, at fair value | 22,843 | 6,007 | |
Derivative liability, notional amount | 605,000 | 47,083 | |
Derivative liability, fair value | (1,671) | (100) | |
Gains (losses) on derivatives | 46,871 | $ (2,291) | |
Forward Sales Of Reverse Loans | |||
Derivative Notional Balance | |||
Notional balance | 20,000 | 40,000 | |
Fair value of derivative assets (liabilities) at: | |||
Derivatives, at fair value | 31 | 8 | |
Derivative liability, notional amount | 60,000 | 20,000 | |
Derivative liability, fair value | (114) | (29) | |
Gains (losses) on derivatives | (62) | 106 | |
Forward loans IRLCs | |||
Derivative Notional Balance | |||
Notional balance | 857,257 | 204,020 | |
Fair value of derivative assets (liabilities) at: | |||
Derivatives, at fair value | 21,606 | 4,745 | |
Gains (losses) on derivatives | 16,860 | 401 | |
TBA forward MBS trades | |||
Derivative Notional Balance | |||
Notional balance | 400,000 | 1,200,000 | |
Fair value of derivative assets (liabilities) at: | |||
Derivatives, at fair value | 117 | 1,121 | |
Derivative liability, notional amount | 190,000 | 0 | |
Derivative liability, fair value | (696) | 0 | |
Forward LHFS Trades | |||
Fair value of derivative assets (liabilities) at: | |||
Gains (losses) on derivatives | 0 | (3,689) | |
Interest Rate Swap | |||
Fair value of derivative assets (liabilities) at: | |||
Derivative liability, notional amount | 355,000 | 0 | |
Derivative liability, fair value | (213) | 0 | |
Gains (losses) on derivatives | (9,564) | 345 | |
Interest Rate Swap Futures And TBA Forward MBS Trades | |||
Fair value of derivative assets (liabilities) at: | |||
Gains (losses) on derivatives | 39,258 | 322 | |
Interest Rate Caps | |||
Fair value of derivative assets (liabilities) at: | |||
Derivatives, at fair value | 0 | 0 | |
Derivative liability, notional amount | 0 | 27,083 | |
Gains (losses) on derivatives | 0 | (358) | |
Other | |||
Derivative Notional Balance | |||
Notional balance | 0 | 0 | |
Fair value of derivative assets (liabilities) at: | |||
Derivatives, at fair value | 16 | 0 | |
Derivative liability, notional amount | 0 | 0 | |
Derivative liability, fair value | (648) | (71) | |
Gains (losses) on derivatives | (561) | (220) | |
Reverse loans IRLCs | |||
Derivative Notional Balance | |||
Notional balance | 30,977 | 28,546 | |
Fair value of derivative assets (liabilities) at: | |||
Derivatives, at fair value | 1,073 | $ 133 | |
Gains (losses) on derivatives | $ 940 | $ 802 |
Interest Expense - Schedule of
Interest Expense - Schedule of Components of Interest Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Debt securities: | ||||
Interest expense | $ 26,815 | $ 29,506 | $ 83,557 | $ 84,636 |
Other Secured Borrowings | ||||
Debt securities: | ||||
Interest expense | 12,246 | 12,918 | 39,171 | 31,933 |
Senior Notes | ||||
Debt securities: | ||||
Interest expense | 6,658 | 8,039 | 19,977 | 25,053 |
Advance Match Funded Liabilities | ||||
Debt securities: | ||||
Interest expense | 6,565 | 6,165 | 19,541 | 20,862 |
Other | ||||
Debt securities: | ||||
Interest expense | $ 1,346 | $ 2,384 | $ 4,868 | $ 6,788 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Tax Contingency [Line Items] | ||||
Income tax (benefit) expense | $ 1,954 | $ (4,450) | $ 71,920 | $ (13,264) |
Tax refund associated with NOLs | $ 51,400 | |||
Coronavirus Aid, Relief, And Economic Security Act (CARES Act) | ||||
Income Tax Contingency [Line Items] | ||||
Income tax (benefit) expense | 71,500 | |||
Coronavirus Aid, Relief, And Economic Security Act (CARES Act) | Domestic Tax Authority | ||||
Income Tax Contingency [Line Items] | ||||
Income tax (benefit) expense | 70,300 | |||
Coronavirus Aid, Relief, And Economic Security Act (CARES Act) | Foreign Tax Authority | ||||
Income Tax Contingency [Line Items] | ||||
Income tax (benefit) expense | $ 1,200 |
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 | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Basic earnings (loss) per share | ||||
Net loss | $ (9,420) | $ (42,767) | $ (32,955) | $ (176,998) |
Weighted average shares of common stock | 8,669,550 | 8,973,053 | 8,770,102 | 8,955,288 |
Basic income (loss) per share | $ (1.09) | $ (4.77) | $ (3.76) | $ (19.76) |
Stock option awards | 0 | 0 | 0 | 0 |
Common stock awards | 0 | 0 | 0 | 0 |
Dilutive weighted average shares of common stock | 8,669,550 | 8,973,053 | 8,770,102 | 8,955,288 |
Diluted income (loss) per share | $ (1.09) | $ (4.77) | $ (3.76) | $ (19.76) |
Stock options and common stock awards excluded from the computation of diluted loss per share | ||||
Anti-dilutive Securities (in shares) | 193,144 | 196,875 | 218,020 | 222,870 |
Market Based | ||||
Stock options and common stock awards excluded from the computation of diluted loss per share | ||||
Anti-dilutive Securities (in shares) | 125,395 | 60,147 | 125,395 | 60,147 |
Basic and Diluted Earnings (L_4
Basic and Diluted Earnings (Loss) per Share - Narrative (Details) | Aug. 13, 2020 |
Earnings Per Share [Abstract] | |
Reverse stock split ratio | 0.07 |
Business Segment Reporting - Na
Business Segment Reporting - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Segment Reporting [Abstract] | ||||||||
Interest expense related to fund servicing advances and other servicing assets | $ 8.8 | $ 9.5 | $ 10.5 | $ 14 | $ 15.5 | $ 13.8 | $ 28.8 | $ 43.3 |
Business Segment Reporting - Sc
Business Segment Reporting - Schedule of Segment Reporting Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Results of Operations | |||||
Revenues | $ 249,035 | $ 283,515 | $ 729,901 | $ 861,741 | |
MSR valuation adjustments, net | (33,814) | 134,561 | (231,368) | (121,705) | |
Operating expenses | 149,522 | 179,285 | 431,545 | 534,618 | |
Other (expense) income: | |||||
Interest income | 3,801 | 4,129 | 12,762 | 12,524 | |
Interest expense | (26,815) | (29,506) | (83,557) | (84,636) | |
Pledged MSR liability expense | (57,404) | (256,416) | (105,684) | (303,302) | |
Gain on repurchase of senior notes | 0 | 5,099 | 0 | 5,099 | |
Other | 3,345 | (414) | 4,616 | 1,163 | |
Total other expense, net | (77,073) | (277,108) | (171,863) | (369,152) | |
Income (loss) before income taxes | (11,374) | (38,317) | (104,875) | (163,734) | |
Total Assets | |||||
Balance | 10,423,851 | 9,956,653 | 10,423,851 | 9,956,653 | $ 10,406,199 |
Operating Segments | Servicing | |||||
Results of Operations | |||||
Revenues | 185,892 | 250,224 | 579,883 | 752,010 | |
MSR valuation adjustments, net | (38,356) | 134,617 | (249,396) | (121,497) | |
Operating expenses | 79,522 | 135,507 | 242,735 | 435,377 | |
Other (expense) income: | |||||
Interest income | 872 | 2,105 | 4,196 | 6,270 | |
Interest expense | (21,421) | (26,087) | (67,923) | (77,328) | |
Pledged MSR liability expense | (57,434) | (256,499) | (105,771) | (303,385) | |
Gain on repurchase of senior notes | 0 | 0 | |||
Other | 2,211 | 3,917 | 8,332 | 6,332 | |
Total other expense, net | (75,772) | (276,564) | (161,166) | (368,111) | |
Income (loss) before income taxes | (7,758) | (27,230) | (73,414) | (172,975) | |
Total Assets | |||||
Balance | 2,694,561 | 3,227,245 | 2,694,561 | 3,227,245 | 3,378,515 |
Operating Segments | Originations | |||||
Results of Operations | |||||
Revenues | 53,755 | 29,502 | 136,947 | 99,386 | |
MSR valuation adjustments, net | 12,375 | (56) | 25,861 | (208) | |
Operating expenses | 35,421 | 20,609 | 91,129 | 62,813 | |
Other (expense) income: | |||||
Interest income | 2,717 | 1,688 | 6,857 | 4,783 | |
Interest expense | (3,163) | (2,133) | (8,423) | (5,200) | |
Pledged MSR liability expense | 0 | 0 | 0 | 0 | |
Gain on repurchase of senior notes | 0 | 0 | |||
Other | 197 | 498 | 167 | 1,161 | |
Total other expense, net | (249) | 53 | (1,399) | 744 | |
Income (loss) before income taxes | 30,460 | 8,890 | 70,280 | 37,109 | |
Total Assets | |||||
Balance | 7,259,257 | 6,225,394 | 7,259,257 | 6,225,394 | 6,459,367 |
Operating Segments | Corporate Items and Other | |||||
Results of Operations | |||||
Revenues | 9,388 | 3,789 | 13,071 | 10,345 | |
MSR valuation adjustments, net | (7,833) | 0 | (7,833) | 0 | |
Operating expenses | 34,579 | 23,169 | 97,681 | 36,428 | |
Other (expense) income: | |||||
Interest income | 212 | 336 | 1,709 | 1,471 | |
Interest expense | (2,231) | (1,286) | (7,211) | (2,108) | |
Pledged MSR liability expense | 30 | 83 | 87 | 83 | |
Gain on repurchase of senior notes | 5,099 | ||||
Other | 937 | (4,829) | (3,883) | (6,330) | |
Total other expense, net | (1,052) | (597) | (9,298) | (1,785) | |
Income (loss) before income taxes | (34,076) | (19,977) | (101,741) | (27,868) | |
Total Assets | |||||
Balance | $ 470,033 | $ 504,014 | $ 470,033 | $ 504,014 | $ 568,317 |
Business Segment Reporting - _2
Business Segment Reporting - Schedule of Segment Reporting Information (Footnote) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Segment Reporting Information [Line Items] | |||||
Severance expense | $ 0.9 | ||||
Intersegment Eliminations | |||||
Segment Reporting Information [Line Items] | |||||
Gains on derivatives | $ 7.8 | ||||
Corporate and Other | |||||
Segment Reporting Information [Line Items] | |||||
Severance expense | $ 1 | $ (0.1) | $ 2.6 | $ 19.1 | |
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 | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Segment Reporting Information [Line Items] | ||||
Depreciation expense | $ 4,305 | $ 6,459 | $ 15,398 | $ 26,020 |
Amortization of debt issuance costs and discount | 1,154 | 1,146 | 5,335 | 3,299 |
Servicing | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation expense | 219 | 105 | 652 | 1,674 |
Amortization of debt issuance costs and discount | 115 | 0 | 343 | 0 |
Originations | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation expense | 31 | (32) | 102 | 49 |
Amortization of debt issuance costs and discount | 0 | 0 | 0 | 0 |
Corporate and Other | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation expense | 4,055 | 6,386 | 14,644 | 24,297 |
Amortization of debt issuance costs and discount | $ 1,039 | $ 1,146 | $ 4,992 | $ 3,299 |
Regulatory Requirements - Narra
Regulatory Requirements - Narrative (Details) - USD ($) | 1 Months Ended | |
Oct. 31, 2020 | Sep. 30, 2020 | |
Public Utilities, General Disclosures [Line Items] | ||
Net worth requirement | $ 224,500,000 | |
Net worth | $ 376,500,000 | |
CA DBO | Subsequent Event | ||
Public Utilities, General Disclosures [Line Items] | ||
Litigation settlement expense | $ 62,000 |
Commitments - Schedule of NRZ U
Commitments - Schedule of NRZ UPB (Details) $ in Thousands | Sep. 30, 2020USD ($) |
Servicing Assets at Fair Value [Line Items] | |
UPB of loans serviced on behalf of NRZ | $ 69,100,000 |
New Residential Investment Corp | |
Servicing Assets at Fair Value [Line Items] | |
UPB of loans serviced on behalf of NRZ | 85,593,313 |
New Residential Investment Corp | Mortgage Servicing Rights Title Retained | |
Servicing Assets at Fair Value [Line Items] | |
UPB of loans serviced on behalf of NRZ | 15,060,347 |
New Residential Investment Corp | Mortgage Servicing Rights Title Transferred | |
Servicing Assets at Fair Value [Line Items] | |
UPB of loans serviced on behalf of NRZ | 51,722,004 |
New Residential Investment Corp | NRZ PMC Subservicing Agreement Subject to Termination | |
Servicing Assets at Fair Value [Line Items] | |
UPB of loans serviced on behalf of NRZ | 16,007,995 |
New Residential Investment Corp | Subservicing Assets | |
Servicing Assets at Fair Value [Line Items] | |
UPB of loans serviced on behalf of NRZ | $ 2,802,967 |
Commitments - Schedule of NRZ_2
Commitments - Schedule of NRZ UPB (Footnote) (Details) $ in Millions | Sep. 30, 2020USD ($) |
New Residential Investment Corp | |
Servicing Assets at Fair Value [Line Items] | |
Outstanding servicing advances | $ 584.6 |
Commitments - Estimated Monthly
Commitments - Estimated Monthly Principal & Interest Advances (Details) $ in Millions | Sep. 30, 2020USD ($)Borrower | Jun. 30, 2020USD ($)Borrower |
Unusual or Infrequent Item, or Both [Line Items] | ||
Number of borrowers requesting forbearance plan | 106,300 | 131,400 |
Number of borrowers requesting forbearance plan, no advance requirements | 3,400 | 5,400 |
Estimate of liability | $ | $ 107.4 | $ 135.9 |
Servicer | ||
Unusual or Infrequent Item, or Both [Line Items] | ||
Number of borrowers requesting forbearance plan | 29,900 | 34,500 |
Estimate of liability | $ | $ 36.7 | $ 44 |
New Residential Investment Corp | ||
Unusual or Infrequent Item, or Both [Line Items] | ||
Number of borrowers requesting forbearance plan | 65,000 | 83,900 |
Estimate of liability | $ | $ 60.9 | $ 81.8 |
Ocwen Subservicer | ||
Unusual or Infrequent Item, or Both [Line Items] | ||
Number of borrowers requesting forbearance plan | 8,000 | 7,600 |
Estimate of liability | $ | $ 9.8 | $ 10.1 |
GSE Loans | Servicer | ||
Unusual or Infrequent Item, or Both [Line Items] | ||
Number of borrowers requesting forbearance plan | 5,300 | 6,600 |
Estimate of liability | $ | $ 6.5 | $ 8.3 |
GSE Loans | New Residential Investment Corp | ||
Unusual or Infrequent Item, or Both [Line Items] | ||
Number of borrowers requesting forbearance plan | 900 | 10,100 |
Estimate of liability | $ | $ 0.9 | $ 11 |
Ginnie Mae Loans | Servicer | ||
Unusual or Infrequent Item, or Both [Line Items] | ||
Number of borrowers requesting forbearance plan | 10,100 | 9,900 |
Estimate of liability | $ | $ 9.2 | $ 9.2 |
PLS Loans | Servicer | ||
Unusual or Infrequent Item, or Both [Line Items] | ||
Number of borrowers requesting forbearance plan | 14,500 | 18,000 |
Estimate of liability | $ | $ 21 | $ 26.5 |
PLS Loans | New Residential Investment Corp | ||
Unusual or Infrequent Item, or Both [Line Items] | ||
Number of borrowers requesting forbearance plan | 64,100 | 73,800 |
Estimate of liability | $ | $ 60 | $ 70.8 |
Commitments - Estimated Month_2
Commitments - Estimated Monthly Principal & Interest Advances (Footnote) (Details) | 9 Months Ended |
Sep. 30, 2020 | |
Other Commitments [Line Items] | |
Advance reimbursement period | 30 days |
New Residential Investment Corp | |
Other Commitments [Line Items] | |
Advance reimbursement period | 3 days |
New Residential Investment Corp | Minimum | |
Other Commitments [Line Items] | |
Advance reimbursement period | 1 day |
New Residential Investment Corp | Maximum | |
Other Commitments [Line Items] | |
Advance reimbursement period | 30 days |
Commitments - Narrative (Detail
Commitments - Narrative (Details) - USD ($) $ in Thousands | Mar. 27, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Jun. 30, 2020 |
Other Commitments [Line Items] | ||||||
Advance reimbursement period | 30 days | |||||
Forbearance period | 180 days | |||||
Additional forbearance period | 180 days | |||||
Threshold of outstanding principal balance on maximum claim amount (as a percent) | 98.00% | |||||
Ginnie Mae Loans | ||||||
Other Commitments [Line Items] | ||||||
Term to advance principal and interest until loan is delinquent | 90 days | |||||
GSE Loans | ||||||
Other Commitments [Line Items] | ||||||
Term to advance principal and interest until loan is delinquent | 120 days | |||||
Period to advance scheduled payments for loan to be remittance status | 4 months | |||||
PLS Loans | ||||||
Other Commitments [Line Items] | ||||||
Forbearance period | 3 months | |||||
Floating Rate Reverse Mortgage Loans | ||||||
Other Commitments [Line Items] | ||||||
Additional borrowing capacity to borrowers | $ 1,600,000 | $ 1,600,000 | ||||
Forward Mortgage Loan Interest Rate Lock Commitments | ||||||
Other Commitments [Line Items] | ||||||
Short-term commitments to lend | 857,300 | 857,300 | ||||
Reverse loans IRLCs | ||||||
Other Commitments [Line Items] | ||||||
Short-term commitments to lend | 31,000 | $ 31,000 | ||||
New Residential Investment Corp | ||||||
Other Commitments [Line Items] | ||||||
Advance reimbursement period | 3 days | |||||
Unpaid principal balance of loans related to termination | 16,000,000 | $ 16,000,000 | $ 37,100,000 | |||
Servicing agreements notice of termination | 180 days | |||||
Servicing fees retained | $ 25,674 | $ 35,462 | $ 80,529 | $ 108,774 | ||
Customer Concentration Risk | Unpaid Principal Balance | New Residential Investment Corp | ||||||
Other Commitments [Line Items] | ||||||
Concentration risk (percent) | 46.00% | |||||
Customer Concentration Risk | Loan Count | New Residential Investment Corp | ||||||
Other Commitments [Line Items] | ||||||
Concentration risk (percent) | 54.00% | |||||
Customer Concentration Risk | Delinquent Loans | New Residential Investment Corp | ||||||
Other Commitments [Line Items] | ||||||
Concentration risk (percent) | 62.00% |
Commitments - Schedule of Activ
Commitments - Schedule of Activity Related to HMBS Repurchases (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2020USD ($)Securitiesloan | |
Long-term Purchase Commitment [Line Items] | |
Beginning balance, repurchase securities, number | Securities | 320 |
Additions, repurchase securities, number | Securities | 378 |
Recoveries, net, repurchase securities, number | Securities | (33) |
Transfers, repurchase securities, number | Securities | 0 |
Change in value, repurchase securities, number | Securities | 0 |
Ending balance, repurchase securities, number | Securities | 665 |
Beginning balance, repurchase securities, amount | $ 35,693 |
Additions, repurchase securities, amount | 73,664 |
Recoveries, repurchase securities, amount | (17,972) |
Transfers, repurchase securities, amount | 0 |
Change in value, repurchase securities, amount | (2,533) |
Ending balance, repurchase securities, amount | $ 88,852 |
Active | |
Long-term Purchase Commitment [Line Items] | |
Beginning balance, repurchase securities, number | loan | 62 |
Additions, repurchase securities, number | loan | 159 |
Recoveries, net, repurchase securities, number | loan | (7) |
Transfers, repurchase securities, number | loan | (10) |
Change in value, repurchase securities, number | loan | 0 |
Ending balance, repurchase securities, number | Securities | 204 |
Beginning balance, repurchase securities, amount | $ 10,546 |
Additions, repurchase securities, amount | 40,875 |
Recoveries, repurchase securities, amount | (9,492) |
Transfers, repurchase securities, amount | (2,933) |
Change in value, repurchase securities, amount | 43 |
Ending balance, repurchase securities, amount | $ 39,039 |
Inactive | |
Long-term Purchase Commitment [Line Items] | |
Beginning balance, repurchase securities, number | loan | 258 |
Additions, repurchase securities, number | loan | 219 |
Recoveries, net, repurchase securities, number | loan | (26) |
Transfers, repurchase securities, number | loan | 10 |
Change in value, repurchase securities, number | loan | 0 |
Ending balance, repurchase securities, number | Securities | 461 |
Beginning balance, repurchase securities, amount | $ 25,147 |
Additions, repurchase securities, amount | 32,789 |
Recoveries, repurchase securities, amount | (8,480) |
Transfers, repurchase securities, amount | 2,933 |
Change in value, repurchase securities, amount | (2,576) |
Ending balance, repurchase securities, amount | $ 49,813 |
Commitments - Schedule of Act_2
Commitments - Schedule of Activity Related to HMBS Repurchases (Footnote) (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2020USD ($)loan | |
Other Commitments [Abstract] | |
Number of maximum claim amount repurchases loans | loan | 308 |
Amount of maximum claim amount repurchases | $ | $ 66.9 |
Contingencies - Narrative (Deta
Contingencies - Narrative (Details) | Oct. 15, 2020USD ($) | Apr. 20, 2017StatesState | Apr. 30, 2017USD ($) | Sep. 30, 2020USD ($)LoanStates | Sep. 30, 2019USD ($)Loan | Dec. 31, 2018USD ($) |
Loss Contingencies [Line Items] | ||||||
Accrued penalty | $ 31,000,000 | |||||
Number of states charging with regulatory action | States | 29 | |||||
Number of state attorneys general charging with regulatory action | State | 2 | |||||
Warranty repurchase demands unpaid principal balance | $ 45,200,000 | $ 49,900,000 | ||||
Warranty repurchase demands number of loans | Loan | 263 | 289 | ||||
PHH Corporation | ||||||
Loss Contingencies [Line Items] | ||||||
Accrued penalty | $ 2,500,000 | |||||
Florida Attorney General | ||||||
Loss Contingencies [Line Items] | ||||||
Injunctive and equitable relief, costs, and civil money penalties sought | $ 10,000 | |||||
Florida Attorney General | Subsequent Event | ||||||
Loss Contingencies [Line Items] | ||||||
Litigation settlement expense | $ 5,200,000 | |||||
Debt forgiveness to certain borrowers | 1,000,000 | |||||
Obligation in case of not satisfying the initial debt forgiveness | $ 1,000,000 | |||||
Multistate Mortgage Committee | ||||||
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 | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Indemnification Obligations Liability [Roll Forward] | ||
Beginning balance | $ 50,838 | $ 49,267 |
Provision (reversal) for representation and warranty obligations | (1,141) | (10,367) |
New production reserves | 1,361 | 186 |
Charge-offs and other | (8,130) | 14,887 |
Ending balance | $ 42,928 | $ 53,973 |