Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2022 | Oct. 31, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 1-13219 | |
Entity Registrant Name | OCWEN FINANCIAL CORPORATION | |
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 | |
Title of 12(b) Security | Common Stock, $0.01 Par Value | |
Trading Symbol | OCN | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 7,590,348 | |
Entity Central Index Key | 0000873860 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
UNAUDITED CONSOLIDATED BALANCE
UNAUDITED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Assets | ||
Cash and cash equivalents | $ 226,570 | $ 192,792 |
Restricted cash ($11,859 and $9,759 related to variable interest entities (VIEs)) | 45,269 | 70,654 |
Mortgage servicing rights (MSRs), at fair value | 2,714,225 | 2,250,147 |
Advances, net ($540,142 and $587,059 related to VIEs) | 642,461 | 772,433 |
Loans held for sale ($725,218 and $917,534 carried at fair value) ($0 and $462,144 related to VIEs) | 729,638 | 928,527 |
Loans held for investment, at fair value ($6,802 and $7,879 related to VIEs) | 7,402,285 | 7,207,641 |
Receivables, net | 170,838 | 180,707 |
Investment in equity method investee | 38,711 | 23,297 |
Premises and equipment, net | 18,782 | 13,674 |
Other assets | 371,290 | 507,250 |
Total assets | 12,360,069 | 12,147,123 |
Liabilities | ||
Home Equity Conversion Mortgage-Backed Securities (HMBS) related borrowings, at fair value | 7,208,385 | 6,885,022 |
Other financing liabilities, at fair value ($341,965 and $238,144 due to related party) ($6,802 and $7,879 related to VIEs ) | 989,722 | 804,963 |
Advance match funded liabilities ($456,233 and $512,297 related to VIEs) | 457,452 | 512,297 |
Mortgage loan warehouse facilities | 819,557 | 1,085,076 |
MSR financing facilities, net | 1,020,606 | 900,760 |
Senior notes, net ($228,122 and $222,242 due to related party) | 597,129 | 614,797 |
Other liabilities ($23,747 and $3,080 carried at fair value) | 721,112 | 867,514 |
Total liabilities | 11,813,963 | 11,670,429 |
Commitments and Contingencies (Notes 21 and 22) | ||
Stockholders’ Equity | ||
Common stock, $.01 par value; 13,333,333 shares authorized; 7,934,594 and 9,208,312 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively | 79 | 92 |
Additional paid-in capital | 556,290 | 592,572 |
Accumulated deficit | (8,229) | (113,604) |
Accumulated other comprehensive loss, net of income taxes | (2,034) | (2,366) |
Total stockholders’ equity | 546,106 | 476,694 |
Total liabilities and stockholders’ equity | $ 12,360,069 | $ 12,147,123 |
UNAUDITED CONSOLIDATED BALANC_2
UNAUDITED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Restricted cash | $ 45,269 | $ 70,654 |
Advances, net | 642,461 | 772,433 |
Loans held for sale, at fair value | 725,218 | 917,534 |
Loans held for sale | 729,638 | 928,527 |
Loans held for investment, at fair value | 7,402,285 | 7,207,641 |
Other assets, at fair value | 25,014 | 21,886 |
Other assets | 371,290 | 507,250 |
Other financing liabilities, due to related parties | 341,965 | 238,144 |
Other financing liabilities, at fair value | 989,722 | 804,963 |
Advance match funded liabilities | 457,452 | 512,297 |
Senior notes, due to related parties | 228,122 | 222,242 |
Other liabilities, fair value | $ 23,747 | $ 3,080 |
Common stock, par value per share (in usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 13,333,333 | 13,333,333 |
Common stock, shares, issued (in shares) | 7,934,594 | 9,208,312 |
Common stock, shares, outstanding (in shares) | 7,934,594 | 9,208,312 |
Variable Interest Entity, Primary Beneficiary | ||
Restricted cash | $ 11,859 | $ 9,759 |
Advances, net | 540,142 | 587,059 |
Loans held for sale, at fair value | 0 | 462,144 |
Loans held for sale | 0 | 462,144 |
Loans held for investment, at fair value | 6,802 | 7,879 |
Other assets | 2,857 | 1,530 |
Other financing liabilities, at fair value | 6,802 | 7,879 |
Advance match funded liabilities | $ 456,233 | $ 512,297 |
UNAUDITED CONSOLIDATED STATEMEN
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenue | ||||
Servicing and subservicing fees | $ 215,562 | $ 206,585 | $ 643,316 | $ 562,764 |
Reverse mortgage revenue, net | 6,885 | 5,035 | 17,379 | 56,162 |
Gain (loss) on loans held for sale, net | 18,931 | 59,702 | 16,665 | 108,136 |
Other revenue, net | 8,344 | 11,779 | 26,084 | 29,078 |
Total revenue | 249,722 | 283,101 | 703,444 | 756,140 |
MSR valuation adjustments, net | 95,159 | (6,320) | 190,989 | (57,562) |
Operating expenses | ||||
Compensation and benefits | 71,320 | 68,960 | 223,202 | 209,413 |
Servicing and origination | 18,998 | 27,932 | 52,264 | 82,044 |
Technology and communications | 14,380 | 14,737 | 43,983 | 41,050 |
Professional services | 17,196 | 18,379 | 38,049 | 61,245 |
Occupancy and equipment | 12,396 | 8,962 | 32,121 | 25,699 |
Other expenses | 7,118 | 6,466 | 23,178 | 15,422 |
Total operating expenses | 141,408 | 145,436 | 412,797 | 434,873 |
Other income (expense) | ||||
Interest income | 13,732 | 7,869 | 30,590 | 15,993 |
Interest expense ($10,578, $10,238, $31,461 and $21,351 on amounts due to related party) | (50,395) | (40,623) | (126,131) | (102,591) |
Pledged MSR liability expense ($28,845, $(2,094), $104,202, and $(2,094) on amounts due to related party) | (131,635) | (91,160) | (292,616) | (168,820) |
Earnings of equity method investee | 3,346 | 932 | 19,281 | 1,282 |
Gain (loss) on extinguishment of debt | 0 | 0 | 914 | (15,458) |
Other, net | (5,538) | 1,900 | (9,936) | 5,554 |
Total other income (expense), net | (170,490) | (121,082) | (377,898) | (264,040) |
Income (loss) before income taxes | 32,983 | 10,263 | 103,738 | (335) |
Income tax expense (benefit) | (3,956) | (11,289) | (1,637) | (20,108) |
Net income | $ 36,939 | $ 21,552 | $ 105,375 | $ 19,773 |
Earnings per share | ||||
Basic (in USD per share) | $ 4.33 | $ 2.35 | $ 11.71 | $ 2.21 |
Diluted (in USD per share) | $ 4.17 | $ 2.29 | $ 11.34 | $ 2.13 |
Weighted average common shares outstanding | ||||
Basic (in shares) | 8,530,209 | 9,189,030 | 8,998,298 | 8,960,696 |
Diluted (in shares) | 8,866,925 | 9,401,858 | 9,295,857 | 9,270,751 |
UNAUDITED CONSOLIDATED STATEM_2
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 36,939 | $ 21,552 | $ 105,375 | $ 19,773 |
Other comprehensive income (loss), net of income taxes: | ||||
Change in unfunded pension plan obligation liability | 91 | (386) | 273 | (1,119) |
Other | 16 | 18 | 60 | 63 |
Comprehensive income | $ 37,047 | $ 21,184 | $ 105,707 | $ 18,717 |
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 Income (Loss), Net of Income Taxes |
Beginning balance (in shares) at Dec. 31, 2020 | 8,687,750 | ||||
Beginning balance at Dec. 31, 2020 | $ 415,372 | $ 87 | $ 556,062 | $ (131,682) | $ (9,095) |
Net income | 19,773 | 19,773 | |||
Issuance of common stock (in shares) | 426,705 | ||||
Issuance of common stock | 12,169 | $ 4 | 12,165 | ||
Issuance of common stock warrants, net of issuance costs | 19,956 | 19,956 | |||
Equity-based compensation and other (in shares) | 74,575 | ||||
Equity-based compensation and other | 3,657 | $ 1 | 3,656 | ||
Other comprehensive income, net of income taxes | (1,056) | (1,056) | |||
Ending balance (in shares) at Sep. 30, 2021 | 9,189,030 | ||||
Ending balance at Sep. 30, 2021 | 469,871 | $ 92 | 591,839 | (111,909) | (10,151) |
Beginning balance (in shares) at Jun. 30, 2021 | 9,189,030 | ||||
Beginning balance at Jun. 30, 2021 | 447,100 | $ 92 | 590,252 | (133,461) | (9,783) |
Net income | 21,552 | 21,552 | |||
Equity-based compensation and other (in shares) | 0 | ||||
Equity-based compensation and other | 1,587 | $ 0 | 1,587 | ||
Other comprehensive income, net of income taxes | (368) | (368) | |||
Ending balance (in shares) at Sep. 30, 2021 | 9,189,030 | ||||
Ending balance at Sep. 30, 2021 | $ 469,871 | $ 92 | 591,839 | (111,909) | (10,151) |
Beginning balance (in shares) at Dec. 31, 2021 | 9,208,312 | 9,208,312 | |||
Beginning balance at Dec. 31, 2021 | $ 476,694 | $ 92 | 592,572 | (113,604) | (2,366) |
Net income | $ 105,375 | 105,375 | |||
Repurchase of common stock (in shares) | (1,338,498) | (1,338,498) | |||
Repurchase of common stock | $ (38,768) | $ (13) | (38,755) | ||
Equity-based compensation and other (in shares) | 64,780 | ||||
Equity-based compensation and other | 2,474 | $ 1 | 2,473 | ||
Other comprehensive income, net of income taxes | $ 332 | 332 | |||
Ending balance (in shares) at Sep. 30, 2022 | 7,934,594 | 7,934,594 | |||
Ending balance at Sep. 30, 2022 | $ 546,106 | $ 79 | 556,290 | (8,229) | (2,034) |
Beginning balance (in shares) at Jun. 30, 2022 | 9,189,005 | ||||
Beginning balance at Jun. 30, 2022 | 543,915 | $ 92 | 591,132 | (45,168) | (2,141) |
Net income | 36,939 | 36,939 | |||
Repurchase of common stock (in shares) | (1,254,411) | ||||
Repurchase of common stock | (36,507) | $ (13) | (36,494) | ||
Equity-based compensation and other (in shares) | 0 | ||||
Equity-based compensation and other | 1,652 | $ 0 | 1,652 | ||
Other comprehensive income, net of income taxes | $ 107 | 107 | |||
Ending balance (in shares) at Sep. 30, 2022 | 7,934,594 | 7,934,594 | |||
Ending balance at Sep. 30, 2022 | $ 546,106 | $ 79 | $ 556,290 | $ (8,229) | $ (2,034) |
UNAUDITED CONSOLIDATED STATEM_4
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flows from operating activities | ||
Net income | $ 105,375 | $ 19,773 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
MSR valuation adjustments, net | (190,989) | 57,562 |
Loss on sale of MSRs, net | 317 | 64 |
Provision for bad debts | 15,235 | 16,069 |
Depreciation | 7,649 | 7,527 |
Amortization of debt issuance costs and discount | 7,526 | 5,438 |
Amortization of intangibles | 3,332 | 0 |
Equity-based compensation expense | 2,773 | 3,697 |
Loss (gain) on extinguishment of debt | (914) | 15,458 |
Loss on valuation of Pledged MSR financing liability | 184,936 | 71,273 |
Net loss (gain) on valuation of loans held for investment and HMBS-related borrowings | 15,802 | (9,993) |
Earnings of equity method investee | (19,281) | (1,282) |
Distribution of earnings from equity method investee | 5,175 | 0 |
Gain on loans held for sale, net | (16,665) | (108,136) |
Origination and purchase of loans held for sale | (13,489,346) | (12,987,522) |
Proceeds from sale and collections of loans held for sale | 13,527,586 | 12,411,398 |
Changes in assets and liabilities: | ||
Decrease in advances, net | 101,753 | 69,868 |
Decrease in receivables and other assets, net | 22,350 | 9,659 |
Decrease (increase) in other liabilities | (23,083) | 9,582 |
Other, net | 83 | (3,271) |
Net cash provided by (used in) operating activities | 259,614 | (412,836) |
Cash flows from investing activities | ||
Origination of loans held for investment | (1,493,951) | (1,214,772) |
Principal payments received on loans held for investment | 1,322,519 | 1,172,011 |
Acquisition of loans held for investment, net | (4,089) | 0 |
Acquisition of reverse mortgage subservicing agreements | (6,906) | 0 |
Purchase of MSRs | (174,886) | (785,194) |
Proceeds from sale of MSRs | 149,051 | 0 |
Proceeds from sale of advances | 2,462 | 305 |
Additions to premises and equipment | (4,760) | (2,062) |
Purchase of real estate | (863) | (6,057) |
Proceeds from sale of real estate | 6,156 | 8,350 |
Proceeds from sale of premises and equipment | 135 | 624 |
Investment in equity method investee | (33,750) | (18,512) |
Distribution of capital from equity method investee | 32,385 | 0 |
Other, net | (1) | (74) |
Net cash used in investing activities | (206,498) | (845,381) |
Cash flows from financing activities | ||
Repayment of advance match funded liabilities, net | (54,845) | (64,716) |
Repayment of other financing liabilities | (85,476) | (62,076) |
Proceeds from (repayment of) mortgage loan warehouse facilities, net | (265,519) | 617,457 |
Proceeds from MSR financing facilities | 379,739 | 680,711 |
Repayment of MSR financing facilities | (257,757) | (170,500) |
Repurchase and repayment of Senior notes | (23,625) | (319,156) |
Proceeds from issuance of Senior notes and warrants | 0 | 647,944 |
Repayment of senior secured term loan (SSTL) borrowings | 0 | (188,700) |
Payment of debt issuance costs | (1,261) | (16,173) |
Proceeds from sale of MSRs accounted for as secured financing | 78,742 | 130,024 |
Proceeds from Excess Servicing Spread (ESS) liability financing | 36,241 | 0 |
Proceeds from sale of Home Equity Conversion Mortgages (HECM, or reverse mortgages) accounted for as a financing (HMBS-related borrowings) | 1,507,617 | 1,119,742 |
Repayment of HMBS-related borrowings | (1,319,811) | (1,161,609) |
Issuance of common stock | 0 | 9,878 |
Repurchase of common stock | (38,768) | 0 |
Other, net | 0 | (525) |
Net cash provided by (used in) financing activities | (44,723) | 1,222,301 |
Net increase (decrease) in cash, cash equivalents and restricted cash | 8,393 | (35,916) |
Cash, cash equivalents and restricted cash at beginning of year | 263,446 | 357,265 |
Cash, cash equivalents and restricted cash at end of period | 271,839 | 321,349 |
Supplemental non-cash investing and financing activities: | ||
Loans held for investment acquired at fair value | 224,052 | 0 |
HMBS-related borrowings assumed at fair value | (219,509) | 0 |
Purchase price holdback | (454) | 0 |
Net cash paid to acquire loans held for investment | 4,089 | 0 |
Right-of-use asset | 8,043 | 3,955 |
Lease liability | 8,026 | 3,955 |
Transfers of loans held for sale to real estate owned (REO) | 1,031 | 5,879 |
MSRs | 39,045 | 0 |
Financing liability - MSRs pledged | 35,925 | 0 |
Supplemental information - Sale and deconsolidation of subsidiary | ||
Cash proceeds received | 0 | 4,409 |
Equity / cash balance held by subsidiary upon sale | 0 | (5,250) |
Cash and cash equivalents | 226,570 | 236,072 |
Debt service accounts | 16,074 | 13,271 |
Other restricted cash | 29,195 | 72,006 |
Total cash, cash equivalents and restricted cash reported in the statements of cash flows | $ 271,839 | $ 321,349 |
UNAUDITED CONSOLIDATED STATEM_5
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Interest expense | $ 50,395 | $ 40,623 | $ 126,131 | $ 102,591 |
MSR Pledged liability expense | 131,635 | 91,160 | 292,616 | 168,820 |
Affiliated Entity | ||||
MSR Pledged liability expense | 28,845 | (2,094) | 104,202 | (2,094) |
OFC Senior Secured Notes | ||||
Interest expense | $ 10,578 | $ 10,238 | $ 31,461 | $ 21,351 |
Organization and Basis of Prese
Organization and Basis of Presentation | 9 Months Ended |
Sep. 30, 2022 | |
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, OFC, we, us and our) is a non-bank mortgage servicer and originator providing solutions to homeowners, clients, 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). Effective May 3, 2021, Ocwen holds a 15% equity interest in MAV Canopy HoldCo I, LLC (MAV Canopy) that invests in mortgage servicing assets through its licensed mortgage subsidiary MSR Asset Vehicle LLC (MAV). See Note 10 - Investment in Equity Method Investee and Related Party Transactions for additional information. We perform servicing activities related to our own MSR portfolio (primary) and on behalf of other servicers (subservicing), the largest being Rithm Capital Corp. (Rithm), formerly known as 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 referred to as GSEs), the Government National Mortgage Association (Ginnie Mae, and together with the GSEs, the Agencies) 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 retail, wholesale, correspondent, flow MSR purchase agreements, the Agency 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), Department of Veterans Affairs (VA) or United States Department of Agriculture (USDA)) forward mortgage loans, generally with servicing retained. The GSEs or Ginnie Mae guarantee these mortgage securitizations. We originate and purchase 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. We had a total of approximately 5,100 employees at September 30, 2022 of which approximately 3,300 were located in India and approximately 400 were based in the Philippines. Our operations in India and the Philippines provide internal support services to our loan servicing and originations businesses and our corporate functions. 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, 2022 are not necessarily indicative of the results that may be expected for any other interim period or for the year ending December 31, 2022. 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, 2021. 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 and the provision for losses that may arise from contingencies including litigation proceedings. In developing estimates and assumptions, management uses all available information; however, actual results could materially differ from those estimates and assumptions. Recently Adopted Accounting Standards Earnings Per Share (ASC 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (ASC 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (a consensus of the FASB Emerging Issues Task Force) (ASU 2021-04) The amendments in this ASU provide the following guidance for a modification or an exchange of a freestanding equity-classified written call option that is not within the scope of another Topic: (1) treat a modification of the terms or conditions or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange as an exchange of the original instrument for a new instrument, (2) measure the effect of a modification or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange and (3) recognize the effect of a modification or an exchange of a freestanding equity-classified written call option to compensate for goods or services in accordance with the guidance in ASC 718. In a multiple-element transaction (for example, one that includes both debt financing and equity financing), the total effect of the modification should be allocated to the respective elements in the transaction. Our adoption of this standard on January 1, 2022 did not 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 phase-out of certain tenors of the London Inter-bank Offered Rate (LIBOR) by the end of 2021 (or June 30, 2023 for U.S. dollar LIBOR of certain tenors). 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 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 the referenced interest rate. Some of these facilities and loan agreements either matured prior to September 30, 2022 or have terms in place that provide for an alternative to LIBOR upon its phase-out. Accounting Standards Issued but Not Yet Adopted Business Combinations (ASC 805) - Accounting for Contract Assets and Contract Liabilities (ASU 2021-08) The amendments in this Update apply to all entities that enter into a business combination within the scope of Subtopic 805-10, Business Combinations— Overall. The amendments in this ASU are issued to improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to the following: (1) recognition of an acquired contract liability and (2) payment terms and their effect on subsequent revenue recognized by the acquirer. The amendments in this ASU require that an entity (acquirer) recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606. At the acquisition date, an acquirer should account for the related revenue contracts in accordance with ASC 606 as if it had originated the contracts. To achieve this, an acquirer may assess how the acquiree applied ASC 606 to determine what to record for the acquired revenue contracts. Generally, this should result in an acquirer recognizing and measuring the acquired contract assets and contract liabilities consistent with how they were recognized and measured in the acquiree’s financial statements (if the acquiree prepared financial statements in accordance with generally accepted accounting principles (GAAP)). The amendments in this ASU are effective for us on January 1, 2023. We do not anticipate that the adoption of this standard will have a material impact on our consolidated financial statements. |
Securitizations and Variable In
Securitizations and Variable Interest Entities | 9 Months Ended |
Sep. 30, 2022 | |
Transfers and Servicing [Abstract] | |
Securitizations and Variable Interest Entities | Note 2 – Securitizations and Variable Interest Entities We securitize, sell and service forward and reverse residential mortgage loans and regularly transfer financial assets in connection with asset-backed financing arrangements. We have aggregated these transfers of financial assets and asset-backed financing arrangements using special purpose entities (SPEs) or variable interest entities (VIEs) into the following groups: (1) securitizations of residential mortgage loans, (2) financings of loans held for sale, (3) financings of advances and (4) MSR financings. Financing transactions that do not use SPEs or VIEs are disclosed in Note 13 – 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, 2022 2021 2022 2021 Proceeds received from securitizations $ 5,227,470 $ 5,823,765 $ 12,925,295 $ 12,220,596 Servicing fees collected (1) 21,577 16,440 67,154 43,968 Purchases of previously transferred assets, net of claims reimbursed (3,500) (6,065) (10,324) (16,085) $ 5,245,547 $ 5,834,140 $ 12,982,125 $ 12,248,479 (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 $70.2 million and $176.2 million during the three and nine months ended September 30, 2022, respectively, and $66.4 million and $136.5 million during the three and nine months ended September 30, 2021, respectively. We securitize forward and reverse residential mortgage loans involving the GSEs and loans insured by the FHA, VA or USDA 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. We receive customary origination representations and warranties from our network of approved correspondent lenders. To the extent that we have recourse against a third-party originator, we may recover part or all of any loss we incur. Also refer to Note 22 – Contingencies - Loan Put-Back and Related Contingencies. 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, 2022 December 31, 2021 Carrying value of assets MSRs, at fair value $ 510,427 $ 360,830 Advances 63,396 151,166 UPB of loans transferred (1) 34,060,639 31,864,769 Maximum exposure to loss (2) $ 34,634,462 $ 32,376,765 (1) Includes $6.3 billion and $5.6 billion of loans delivered to Ginnie Mae as of September 30, 2022 and December 31, 2021, respectively, and includes loan modifications repurchased and delivered through the Ginnie Mae Early Buyout Program (EBO). (2) The maximum exposure to loss does not take into consideration any recourse available to us, including from the underlying collateral or from correspondent sellers. Also, refer to Loan Put-Back and Related Contingencies in Note 22 – Contingencies. At September 30, 2022 and December 31, 2021, 2.4% and 3.6%, respectively, of the transferred residential loans that we service were 60 days or more past due, including 60 days or more past due loans under forbearance. This includes 7.7% and 12.0%, respectively, of loans delivered to Ginnie Mae that are 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. We have determined that loan transfers in the HMBS program do not meet the definition of a participating interest and the servicing requirements 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. Financing of Loans Held for Sale using SPEs We entered into a warehouse mortgage loan financing facility with a third-party lender involving an SPE (trust). This facility is structured as a gestation repurchase facility whereby Agency mortgage loans are transferred by PMC to the trust for collateralization purposes. We have designed the trust to facilitate the third party financing facility and have determined that the trust is a VIE for which we are the primary beneficiary. Therefore, we have included the trust in our consolidated financial statements. As of September 30, 2022, the certificates issued by the trust that are pledged as collateral have been reduced to zero. See Note 13 – Borrowings. The table below presents the carrying value and classification of the assets and liabilities of the loans held for sale financing facility: September 30, 2022 December 31, 2021 Mortgage loans (Loans held for sale, at fair value) $ — $ 462,144 Outstanding borrowings (Mortgage loan warehouse facilities) — 459,344 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 we are the primary beneficiary of the SPEs. Through wholly-owned subsidiaries we hold the sole equity interests in the SPEs and service the mortgage loans that generate the advances. These SPEs issue debt supported by collections on the transferred advances, and we refer to this debt as Advance match funded liabilities. Holders of the debt issued by the SPEs have recourse only to the assets of the SPE for satisfaction of the debt. The table below presents the carrying value and classification of the assets and liabilities of the advance financing facilities: September 30, 2022 December 31, 2021 Match funded advances (Advances, net) $ 540,142 $ 587,059 Debt service accounts (Restricted cash) 10,064 7,687 Unamortized deferred lender fees (Other assets) 2,379 1,305 Prepaid interest (Other assets) 477 225 Advance match funded liabilities 456,233 512,297 MSR Financings using SPEs We established two SPEs (trusts) in connection with a third-party financing facility secured by certain Fannie Mae and Freddie Mac MSRs (Agency MSRs). 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. 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, 2022 December 31, 2021 MSRs pledged (MSRs, at fair value) $ 820,382 $ 630,605 Unamortized deferred lender fees (Other assets) 1,716 1,495 Debt service account (Restricted cash) 103 104 Outstanding borrowings (MSR financing facilities, net) 412,287 317,523 In 2019, we issued Ocwen Excess Spread-Collateralized Notes, Series 2019-PLS1 Class A (PLS Notes) secured by certain of PMC’s private label MSRs (PLS MSRs). On March 15, 2022, we replaced the existing PLS Notes with a new series of notes, Ocwen Excess Spread-Collateralized Notes, Series 2022-PLS1 Class A, at an initial principal amount of $75.0 million . An SPE, PMC PLS ESR Issuer LLC (PLS Issuer), was established in this connection as a wholly owned subsidiary of PMC. 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. 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 of PMC’s MSRs. 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, 2022 December 31, 2021 MSRs pledged (MSRs, at fair value) $ 129,586 $ 99,833 Debt service account (Restricted cash) 1,692 1,968 Outstanding borrowings (MSR financing facilities, net) 61,752 41,663 Unamortized debt issuance costs (MSR financing facilities, net) 884 413 |
Fair Value
Fair Value | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Note 3 – Fair Value Fair value is estimated based on a hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs. Observable inputs are inputs that reflect the assumptions that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The fair value hierarchy prioritizes the inputs to valuation techniques into three broad levels whereby the highest priority is given to Level 1 inputs and the lowest to Level 3 inputs. 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, 2022 December 31, 2021 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 $ 725,218 $ 725,218 $ 917,534 $ 917,534 Loans held for sale, at lower of cost or fair value (b) 3 4,420 4,420 10,993 10,993 Total Loans held for sale $ 729,638 $ 729,638 $ 928,527 $ 928,527 September 30, 2022 December 31, 2021 Level Carrying Value Fair Value Carrying Value Fair Value Loans held for investment Loans held for investment - Reverse mortgages (a) 3 $ 7,395,483 $ 7,395,483 $ 7,199,762 $ 7,199,762 Loans held for investment - Restricted for securitization investors (a) 3 6,802 6,802 7,879 7,879 Total loans held for investment $ 7,402,285 $ 7,402,285 $ 7,207,641 $ 7,207,641 Advances, net (c) 3 $ 642,461 $ 642,461 $ 772,433 $ 772,433 Receivables, net (c) 3 170,838 170,838 180,707 180,707 Mortgage-backed securities (a) 3 — — 1 1 Corporate bonds (a) 2 211 211 211 211 Financial liabilities: Advance match funded liabilities (c) 3 $ 457,452 $ 457,452 $ 512,297 $ 511,994 Financing liabilities: HMBS-related borrowings (a) 3 $ 7,208,385 $ 7,208,385 $ 6,885,022 $ 6,885,022 Other financing liabilities Financing liability -Transferred MSR liability (a) 3 $ 946,619 $ 946,619 $ 797,084 $ 797,084 Financing liability - Excess Servicing Spread (ESS) (a) 3 36,301 36,301 — — Financing liability - Owed to securitization investors (a) 3 6,802 6,802 7,879 7,879 Total Other financing liabilities $ 989,722 $ 989,722 $ 804,963 $ 804,963 Mortgage loan warehouse facilities (c) 3 819,557 819,557 1,085,076 1,085,076 MSR financing facilities (c) (d) 3 1,020,606 999,022 900,760 873,820 Senior notes: PMC Senior secured notes due 2026 (c) (d) 2 $ 369,007 $ 325,736 $ 392,555 $ 413,472 OFC Senior secured notes due 2027 (c) (d) 3 228,122 218,647 222,242 261,455 Total Senior notes $ 597,129 $ 544,383 $ 614,797 $ 674,927 Derivative financial instrument assets (liabilities), net Interest rate lock commitments (IRLCs) (a) 3 $ (12,190) $ (12,190) $ 18,085 $ 18,085 Forward trades - Reverse Loans (a) 2 87 87 364 364 TBA / Forward mortgage-backed securities (MBS) trades (a) 1 21,769 21,769 (240) (240) Interest rate swap futures (a) 1 (7,274) (7,274) 1,734 1,734 Option contracts (a) 2 (1,172) (1,172) (277) (277) Other (a) 3 (164) (164) (1,070) (1,070) MSRs (a) 3 $ 2,714,225 $ 2,714,225 $ 2,250,147 $ 2,250,147 (a) Measured at fair value on a recurring basis. (b) Measured at fair value on a non-recurring basis. (c) Disclosed, but not measured, at fair value. (d) The carrying values are net of unamortized debt issuance costs and discount. See Note 13 – Borrowings for additional information . (e) Loans repurchased from Ginnie Mae securitizations with a fair value of $30.5 million and $220.9 million at September 30, 2022 and December 31, 2021, respectively, are classified as Level 3. The remaining balance of loans held for sale at fair value is classified as Level 2. The following tables present a reconciliation of the changes in fair value of Level 3 assets and liabilities that we measure at fair value on a recurring basis: Loans Held for Investment - Restricted for Securitization Investors Financing Liability - Owed to Securitization Investors Loans Held for Sale - Fair Value ESS Financing Liability IRLCs Three months ended September 30, 2022 Beginning balance $ 7,289 $ (7,289) $ 41,363 $ — $ 5,746 Purchases, issuances, sales and settlements Purchases — — 9,478 — — Issuances (1) — — — (36,241) 50,912 Sales — — (16,569) — — Settlements (487) 487 — 644 — Transfers (to) from: Loans held for sale, at fair value (1) — — — — 17,643 Receivables, net — — (1,581) — — (487) 487 (8,672) (35,597) 68,555 Change in fair value included in earnings (1) — — (2,171) (704) (86,491) Ending balance $ 6,802 $ (6,802) $ 30,520 $ (36,301) $ (12,190) 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, 2021 Beginning balance $ 8,680 $ (8,680) $ 138,842 $ 1,607 $ 17,437 Purchases, issuances, sales and settlements Purchases — — 136,996 — — Issuances (1) — — — — 184,995 Sales — — (64,032) — — Settlements (676) 676 — — — Transfers (to) from: Loans held for sale, at fair value (1) — — — — (182,783) Receivables, net — — (558) — — (676) 676 72,406 — 2,212 Change in fair value included in earnings (1) — — (496) 11 (5,619) Ending balance $ 8,004 $ (8,004) $ 210,752 $ 1,618 $ 14,030 Loans Held for Investment - Restricted for Securitization Investors Financing Liability - Owed to Securitization Investors Loans Held for Sale - Fair Value ESS Financing Liability IRLCs Nine Months Ended September 30, 2022 Beginning balance $ 7,879 $ (7,879) $ 220,940 $ — $ 18,085 Purchases, issuances, sales and settlements Purchases — — 127,715 — Issuances (1) — — — (36,241) 212,764 Sales — — (308,181) — — Settlements (1,077) 1,077 — 644 — Transfers (to) from: Loans held for sale, at fair value (1) — — — — (36,220) Receivables, net — — (3,350) — — (1,077) 1,077 (183,816) (35,597) 176,544 Change in fair value included in earnings (1) — — (6,604) (704) (206,819) Ending balance $ 6,802 $ (6,802) $ 30,520 $ (36,301) $ (12,190) 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, 2021 Beginning balance $ 9,770 $ (9,770) $ 51,072 $ 2,019 $ 22,706 Purchases, issuances, sales and settlements Purchases — — 303,117 — — Issuances (1) — — — — 446,751 Sales — — (135,088) — — Settlements (1,766) 1,766 — — — Transfers (to) from: Loans held for sale, at fair value (1) — — — — (425,169) Other assets — — (377) — — Receivables, net — — (1,113) — — (1,766) 1,766 166,539 — 21,582 Change in fair value included in earnings (1) — — (6,859) (401) (30,258) Ending balance $ 8,004 $ (8,004) $ 210,752 $ 1,618 $ 14,030 (1) IRLC activity (issuances and transfers) represent changes in fair value included in earnings. This activity is presented on a gross basis in the table for disclosure purposes. Total net change in fair value included in earnings attributed to IRLCs is a gain (loss) of $(17.9) million and $(30.3) million for the three and nine months ended September 30, 2022, respectively, and $(3.4) million and $(8.7) million for the three and nine months ended September 30, 2021, respectively. See Note 16 – Derivative Financial Instruments and Hedging Activities. A reconciliation from the beginning balances to the ending balances of Loans Held for Investment and HMBS-related borrowings, MSRs and Pledged liabilities that we measure at fair value on a recurring basis is disclosed in Note 5 - Reverse Mortgages, Note 7 – Mortgage Servicing and Note 8 — MSR Transfers Not Qualifying for Sale Accounting, respectively. During the nine months ended September 30, 2022, there have been no changes to the methodologies that we use in estimating fair values or classifications under the valuation hierarchy as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021. The significant unobservable assumptions that we make to estimate the fair value of significant assets and liabilities classified as Level 3 and measured at fair value on a recurring or non-recurring basis are provided below. Loans Held for Sale The fair value of loans we purchased from Ginnie Mae guaranteed securitizations is estimated using both observable and unobservable inputs, including published forward Ginnie Mae prices or existing sale contracts, as well as estimated default, prepayment, and discount rates. The significant unobservable input in estimating fair value is the estimated default rate. Accordingly, these repurchased Ginnie Mae loans are classified as Level 3 within the valuation hierarchy. Loans Held for Investment - Reverse Mortgages Reverse mortgage loans held for investment are carried at fair value and classified as Level 3 within the valuation hierarchy. Significant unobservable assumptions include conditional prepayment rate and discount rate. The conditional prepayment rate assumption displayed in the table below is inclusive of voluntary (repayment or payoff) and involuntary (inactive/delinquent status and default) prepayments. The discount rate assumption is primarily based on an assessment of current market yields on reverse mortgage loan and tail securitizations, expected duration of the asset and current market interest rates. Significant unobservable assumptions September 30, December 31, Life in years Range 0.4 to 7.2 1.0 to 8.2 Weighted average 4.8 5.7 Conditional prepayment rate, including voluntary and involuntary prepayments Range 13.0% to 48.1% 11.2% to 36.6% Weighted average 18.7 % 16.0 % Discount rate 5.1 % 2.6 % 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 securitized loans held for investment, excluding future draw commitments, are partially offset by the effects of changes in the assumptions used to value the HMBS-related borrowings that are associated with these loans. MSRs MSRs are carried at fair value and classified within Level 3 of the valuation hierarchy. The fair value is equal to the fair value mark provided by the 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. A change in the valuation inputs or assumptions may result in a significantly higher or lower fair value measurement. Changes in market interest rates predominantly impact the fair value of Agency MSRs via prepayment speeds by altering the borrower refinance incentive and the non-Agency MSRs due to the impact on advance funding costs. The significant unobservable assumptions used in the valuation of these MSRs include prepayment speeds, delinquency rates, cost to service and discount rates. Significant unobservable assumptions September 30, 2022 December 31, 2021 Agency Non-Agency Agency Non-Agency Weighted average prepayment speed 6.6 % 9.3 % 8.5 % 12.1 % Weighted average lifetime delinquency rate 1.4 % 10.3 % 1.2 % 11.9 % Weighted average discount rate 9.1 % 10.6 % 8.5 % 11.2 % Weighted average cost to service (in dollars) $ 72 $ 193 $ 71 $ 205 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, 2022 given hypothetical increases in lifetime prepayments and yield assumptions: Adverse change in fair value 10% 20% Weighted average prepayment speeds $ (60,457) $ (118,162) Weighted average discount rate (76,572) (147,150) Financing Liabilities HMBS-Related Borrowings HMBS-related borrowings are carried at fair value and classified as Level 3 within the valuation hierarchy. These borrowings are not actively traded, and therefore, quoted market prices are not available. Significant unobservable assumptions include yield spread and discount rate. The yield spread and discount rate assumption for these liabilities are primarily based on an assessment of current market yields for newly issued HMBS, expected duration and current market interest rates. Significant unobservable assumptions September 30, December 31, Life in years Range 0.4 to 7.2 1.0 to 8.2 Weighted average 4.8 5.7 Conditional prepayment rate Range 13.0% to 48.1% 11.2% to 36.6% Weighted average 18.7 % 16.0 % Discount rate 5.0 % 2.5 % Significant increases or decreases in any of these assumptions in isolation could result in a significantly higher or lower fair value, respectively. The effects of changes in the assumptions used to value the HMBS-related borrowings are partially offset by the effects of changes in the assumptions used to value the associated pledged loans held for investment, excluding future draw commitments. Pledged MSR Liabilities Pledged MSR liabilities are carried at fair value and classified as Level 3 within the valuation hierarchy. We determine the fair value of the pledged MSR liability consistent with the prices provided by third-party valuation experts for the related MSR, considering retained cash flows. Significant unobservable assumptions September 30, December 31, Weighted average prepayment speed 8.5 % 10.9 % Weighted average delinquency rate 7.2 % 8.8 % Weighted average discount rate 10.1 % 10.5 % Weighted average cost to service (in dollars) $ 169 $ 182 Significant increases or decreases in these assumptions in isolation would result in a significantly higher or lower fair value. ESS Financing Liability The Excess Servicing Spread (ESS) financing liability consists of the obligation to remit to a third party a specified percentage of future servicing fee collections on a reference pool of GSE mortgage loans, which we are entitled to as owner of the related MSRs. We have elected to carry the ESS Financing liability at fair value and have classified it as Level 3 within the valuation hierarchy. The fair value represents the net present value of the excess servicing spread cash flows, consistent with the valuation model, inputs and assumptions of the underlying MSR, as applicable, The significant unobservable assumptions used in the valuation of the ESS financing liability include prepayment speeds, delinquency rates, and discount rates. Refer to MSRs above for description of significant unobservable assumptions. Also see Note 12 - Other Financing Liabilities. Derivative Financial Instruments |
Loans Held for Sale
Loans Held for Sale | 9 Months Ended |
Sep. 30, 2022 | |
Receivables [Abstract] | |
Loans Held for Sale | Note 4 – Loans Held for Sale Loans Held for Sale - Fair Value Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Beginning balance $ 683,140 $ 680,866 $ 917,534 $ 366,364 Originations and purchases 5,334,747 6,366,795 13,489,346 12,987,522 Proceeds from sales (5,191,548) (6,098,495) (13,365,766) (12,362,149) Principal collections (60,653) (22,334) (155,884) (39,037) Transfers from (to): Loans held for investment, at fair value 10,807 1,220 30,437 2,898 Receivables, net 28,884 (7,625) 61,095 (25,151) REO (Other assets) (649) (1,767) (673) (5,312) Gain (loss) on sale of loans (62,148) 1,793 (248,751) (13,006) Capitalization of advances on Ginnie Mae modifications 2,585 7,334 15,698 14,625 Increase (decrease) in fair value of loans (22,064) (5,336) (23,493) (6,025) Other 2,117 (830) 5,675 892 Ending balance (1) $ 725,218 $ 921,621 $ 725,218 $ 921,621 (1) At September 30, 2022 and 2021, the balances include $(27.8) million and $(9.3) million, respectively, of fair value adjustments. Loans Held for Sale - Lower of Cost or Fair Value Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Beginning balance - before Valuation Allowance $ 8,138 $ 20,278 $ 15,365 $ 27,652 Proceeds from sales — (2,916) (5,160) (9,583) Principal collections (156) (415) (776) (629) Transfers from (to): Receivables, net 105 (444) (1,087) (1,160) REO (Other assets) — (22) (358) (567) Gain on sale of loans — 35 4 549 Other 81 144 180 398 Ending balance - before Valuation Allowance 8,168 16,661 8,168 16,661 Beginning balance - Valuation Allowance $ (3,813) $ (5,124) $ (4,372) $ (6,180) (Provision for) reversal of valuation allowance 44 602 81 1,582 Transfer to Liability for indemnification obligations (Other liabilities) 21 (60) 543 16 Ending balance - Valuation Allowance (3,748) (4,582) (3,748) (4,582) Ending balance, net $ 4,420 $ 12,079 $ 4,420 $ 12,079 Gain (Loss) on Loans Held for Sale, Net Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Gain (loss) on sales of loans, net MSRs retained on transfers of forward mortgage loans $ 70,225 $ 66,420 $ 176,190 $ 136,482 Gain (loss) on sale of forward mortgage loans (1) (2) (59,814) (2,601) (222,408) (25,440) Gain (loss) on sale of repurchased Ginnie Mae loans (1)(3) (116) 3,962 (9,780) 12,277 10,294 67,781 (55,998) 123,319 Change in fair value of IRLCs (17,687) (4,135) (28,854) (9,225) Change in fair value of loans held for sale (21,160) (3,491) (20,798) (3,323) Gain (loss) on economic hedge instruments (4) 48,389 780 124,613 592 Other (906) (1,233) (2,299) (3,227) $ 18,931 $ 59,702 $ 16,665 $ 108,136 (1) Realized gain (loss) on sale of loans, excluding retained MSRs. (2) Includes $22.5 million gain in the three and nine months ended September 30, 2021 related to loans purchased through the exercise of our servicer call rights with respect to certain Non-Agency trusts and sold, servicing released. (3) Activity for the nine months ended September 30, 2022 includes an $8.8 million loss during the three months ended June 30, 2022 on certain delinquent and aged loans repurchased in connection with the Ginnie Mae EBO program with an aggregated UPB of $299.7 million, net of the associated MSR fair value adjustment. (4) Excludes gains of $2.0 million and $15.4 million during the three and nine months ended September 30, 2022, respectively, and $1.5 million and $25.5 million during the three and nine months ended September 30, 2021, respectively, on inter-segment economic hedge derivatives presented within MSR valuation adjustments, net. Third-party derivatives are hedging the net exposure of MSR and pipeline, and the change in fair value of derivatives are reported within MSR valuation adjustments, net. Inter-segment derivatives are established to transfer risk and allocate hedging gains/losses to the pipeline separately from the MSR portfolio. Refer to Note 19 – Business Segment Reporting. |
Reverse Mortgages
Reverse Mortgages | 9 Months Ended |
Sep. 30, 2022 | |
Receivables [Abstract] | |
Reverse Mortgages | Note 5 - Reverse Mortgages Three Months Ended September 30, 2022 2021 Loans Held for Investment - Reverse Mortgages HMBS - Related Borrowings (2) Loans Held for Investment - Reverse Mortgages HMBS - Related Borrowings (2) Beginning balance $ 7,376,527 $ (7,155,251) $ 7,112,273 $ (6,823,911) Originations 349,095 — 494,330 — Securitization of HECM loans accounted for as a financing — (357,741) — (452,262) Additional proceeds from securitization of HECM loans and tails — (7,822) — (7,751) Repayments (principal payments received) (326,320) 326,323 (449,236) 446,277 Transfers to: Loans held for sale, at fair value (6,541) — (1,220) — Receivables, net (16,727) — (84) — Other assets (108) — (121) — Change in fair value included in earnings (3) 19,557 (13,894) (55,216) 55,083 Ending balance $ 7,395,483 $ (7,208,385) $ 7,100,726 $ (6,782,564) Securitized loans (pledged to HMBS-Related Borrowings) $ 7,267,982 $ (7,208,385) $ 6,874,025 $ (6,782,564) Unsecuritized loans 127,501 226,701 Total $ 7,395,483 $ 7,100,726 Nine Months Ended September 30, 2022 2021 Loans Held for Investment - Reverse Mortgages HMBS - Related Borrowings (2) Loans Held for Investment - Reverse Mortgages HMBS - Related Borrowings (2) Beginning balance $ 7,199,762 $ (6,885,022) $ 6,997,127 $ (6,772,711) Originations 1,493,951 — 1,214,772 — Securitization of HECM loans accounted for as a financing (incl. realized fair value changes) — (1,507,617) — (1,119,742) Additional proceeds from securitization of HECM loans and tails — (30,124) — (34,918) Acquisition (1) 211,258 (209,057) — — Repayments (principal payments received) (1,321,442) 1,319,811 (1,170,245) 1,161,609 Transfers to: Loans held for sale, at fair value (26,187) — (2,898) — Receivables, net (66,121) — (169) — REO (Other assets) (240) — (316) — Change in fair value (3) (95,498) 103,624 62,455 (16,802) Ending balance $ 7,395,483 $ (7,208,385) $ 7,100,726 $ (6,782,564) (1) During the three months ended March 31, 2022, we purchased a reverse mortgage servicing portfolio of HECM loans securitized in Ginnie Mae pools. As the Ginnie Mae HMBS program does not qualify for sale accounting, the transaction conveyed the HECM loans and associated HMBS-related borrowings to us. We have accounted for this transaction as a secured financing, as a purchase of loans held for investment and assumption of an HMBS securitization liability for the obligation to Ginnie Mae. (2) Represents amounts due to the holders of beneficial interests in Ginnie Mae guaranteed HMBS that did not qualify for sale accounting treatment of HECM loans. Under this accounting treatment, the HECM loans securitized with Ginnie Mae remain on our consolidated balance sheets and the proceeds from the sale are recognized as a financing liability, which is recorded at fair value consistent with the related HECM loans. The beneficial interests in Ginnie Mae guaranteed HMBS have no maturity dates, and the borrowings mature as the related loans are repaid. The interest rate is the pass-through rate of the loans less applicable margin. See Note 2 – Securitizations and Variable Interest Entities (3) See further breakdown in the table below. Reverse Mortgage Revenue, net Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Gain on new originations (1) $ 9,299 $ 12,900 $ 42,642 $ 46,170 Change in fair value of securitized loans held for investment and HMBS-related borrowings, net (3,636) (13,033) (34,517) (517) Change in fair value included in earnings, net (2) 5,663 (133) 8,125 45,653 Loan fees and other 1,222 5,168 9,254 10,509 $ 6,885 $ 5,035 $ 17,379 $ 56,162 (1) Includes the changes in fair value of newly originated loans held for investment in the period through securitization date. (2) See breakdown between loans held-for-investment and HMBS - related borrowings in the table above. |
Advances
Advances | 9 Months Ended |
Sep. 30, 2022 | |
Advances [Abstract] | |
Advances | Note 6 – Advances September 30, 2022 December 31, 2021 Principal and interest $ 224,684 $ 228,041 Taxes and insurance 279,502 381,025 Foreclosures, bankruptcy, REO and other 144,473 170,385 648,660 779,451 Allowance for losses (6,199) (7,018) Advances, net $ 642,461 $ 772,433 The following table summarizes the activity in net advances: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Beginning balance - before Allowance for Losses $ 653,768 $ 768,864 $ 779,451 $ 834,512 Acquisition of advances in connection with the purchase of MSRs — — — 4,495 New advances 153,193 181,567 540,467 565,284 Sales of advances (1,643) (80) (2,473) (328) Collections of advances and other (1) (156,658) (204,078) (668,785) (657,690) Ending balance - before Allowance for Losses 648,660 746,273 648,660 746,273 Beginning balance - Allowance for Losses $ (6,601) $ (6,891) $ (7,018) $ (6,273) Provision expense (1,965) (1,581) (5,841) (5,478) Net charge-offs and other 2,368 1,795 6,661 5,074 Ending balance - Allowance for Losses (6,199) (6,677) (6,199) (6,677) Ending balance, net $ 642,461 $ 739,596 $ 642,461 $ 739,596 (1) Activity for the nine months ended September 30, 2022 includes $22.6 million tax, insurance and other advances transferred during the three months ended June 30, 2022 on the repurchase of certain delinquent and aged loans in connection with the Ginnie Mae EBO program. See Note 4 – Loans Held for Sale. |
Mortgage Servicing
Mortgage Servicing | 9 Months Ended |
Sep. 30, 2022 | |
Transfers and Servicing [Abstract] | |
Mortgage Servicing | Note 7 – Mortgage Servicing MSRs – At Fair Value Three Months Ended September 30, 2022 2021 Agency Non-Agency Total Agency Non-Agency Total Beginning balance $ 1,816,604 $ 669,075 $ 2,485,679 $ 1,408,420 $ 664,098 $ 2,072,518 Sales of MSRs 3 — 3 — — — Additions: Recognized on the sale of residential mortgage loans 70,225 — 70,225 66,420 — 66,420 Purchase of MSRs 75,461 — 75,461 36,153 — 36,153 Servicing transfers and adjustments (1) (39,052) (83) (39,135) 17 (4,723) (4,706) Changes in fair value: Changes in valuation inputs or assumptions 99,099 91,546 190,645 6,983 67,836 74,819 Realization of expected cash flows (46,891) (21,762) (68,653) (38,186) (30,758) (68,944) Ending balance $ 1,975,449 $ 738,776 $ 2,714,225 $ 1,479,807 $ 696,453 $ 2,176,260 MSRs – At Fair Value Nine Months Ended September 30, 2022 2021 Agency Non-Agency Total Agency Non-Agency Total Beginning balance $ 1,571,837 $ 678,310 $ 2,250,147 $ 578,957 $ 715,860 $ 1,294,817 Sales of MSRs (149,336) (24) (149,360) — — — Additions: Recognized on the sale of residential mortgage loans 176,190 — 176,190 136,482 — 136,482 Purchase of MSRs 159,123 — 159,123 806,469 — 806,469 Servicing transfers and adjustments (1) (24,331) (907) (25,238) 73 (6,913) (6,841) Changes in fair value: Changes in valuation inputs or assumptions 379,530 132,888 512,418 47,132 73,306 120,438 Realization of expected cash flows (137,564) (71,491) (209,055) (89,306) (85,800) (175,106) Ending balance $ 1,975,449 $ 738,776 $ 2,714,225 $ 1,479,807 $ 696,453 $ 2,176,260 (1) Servicing transfers and adjustments for the three months ended September 30, 2022 include a $39.0 million derecognition of MSRs previously sold to MAV in a transaction which did not qualify for sale accounting treatment. We derecognized the MSRs with a UPB of $2.9 billion from our balance sheet upon the sale of the MSRs by MAV to a third party in the three months ended September 30, 2022. See Note 8 — MSR Transfers Not Qualifying for Sale Accounting for further information. The following table summarizes delinquency status of the loans underlying our MSRs: September 30, 2022 December 31, 2021 Delinquent loans Agency Non - Agency Total Agency Non - Agency Total 30 days 1.5 % 7.6 % 4.3 % 1.4 % 7.2 % 4.1 % 60 days 0.4 2.9 1.5 0.4 2.8 1.6 90 days or more 1.2 8.2 4.4 1.9 8.0 4.8 Total 30-60-90 days or more 3.1 % 18.7 % 10.2 % 3.7 % 18.0 % 10.5 % MSR UPB and Fair Value September 30, 2022 December 31, 2021 September 30, 2021 Fair Value UPB Fair Value UPB Fair Value UPB Owned MSRs $ 1,742,978 $ 123,440,335 $ 1,422,546 $ 127,919,800 $ 1,457,347 $ 136,316,900 Rithm transferred MSRs (1) (2) 604,654 48,354,675 558,940 53,652,843 574,020 56,141,289 MAV transferred MSRs (1) 366,593 26,194,483 268,661 24,018,904 144,893 13,570,892 Total $ 2,714,225 $ 197,989,493 $ 2,250,147 $ 205,591,547 $ 2,176,260 $ 206,029,081 (1) MSRs subject to sale agreements with Rithm and MAV that do not meet sale accounting criteria. During the nine months ended September 30, 2022 , we transferred MSRs with a UPB of $7.1 billion to MAV. See Note 8 — MSR Transfers Not Qualifying for Sale Accounting. (2) At September 30, 2022, the UPB of MSRs transferred to Rithm for which title is retained by Ocwen was $11.0 billion and the UPB of MSRs transferred to Rithm for which title has passed was $37.3 billion. We purchased MSRs with a UPB of $13.7 billion and $72.2 billion from unrelated third-parties during the nine months ended September 30, 2022 and 2021, respectively. We sold MSRs, service released, with a UPB of $11.1 billion and $18.0 million during the nine months ended September 30, 2022 and 2021, respectively, to unrelated third parties. Servicing Revenue Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Loan servicing and subservicing fees Servicing $ 83,348 $ 103,094 $ 252,773 $ 246,363 Subservicing 18,858 2,867 53,890 8,971 MAV (1) 19,275 1,575 54,735 1,575 Rithm (1) 63,362 75,034 195,237 233,135 184,844 182,570 556,635 490,044 Ancillary income Late charges 10,559 10,656 32,317 31,335 Reverse subservicing ancillary fees 4,918 — 14,308 — Recording fees 1,819 3,726 7,693 10,579 Loan collection fees 2,644 2,858 8,463 8,568 Boarding and deboarding fees 769 1,627 4,394 6,830 Custodial accounts (float earnings) 7,521 1,234 10,307 3,547 GSE forbearance fees 219 262 583 1,334 Other, net 2,268 3,652 8,616 10,525 30,718 24,016 86,681 72,720 Total Servicing and subservicing fees $ 215,562 $ 206,585 $ 643,316 $ 562,764 (1) Includes servicing fees related to transferred MSRs and subservicing fees. See Note 8 — MSR Transfers Not Qualifying for Sale Accounting . Float balances (balances in custodial accounts, which represent collections of principal and interest that we receive from borrowers on behalf of investors) are held in escrow by unaffiliated banks and are excluded from our unaudited consolidated balance sheets. Float balances amounted to $2.0 billion, $2.1 billion and $3.3 billion at September 30, 2022, December 31, 2021 and September 30, 2021, respectively. |
MSR Transfers Not Qualifying fo
MSR Transfers Not Qualifying for Sale Accounting | 9 Months Ended |
Sep. 30, 2022 | |
Transfers and Servicing [Abstract] | |
MSR Transfers Not Qualifying for Sale Accounting | Note 8 — MSR Transfers Not Qualifying for Sale Accounting MSRs transferred or sold in transactions which do not qualify for sale accounting treatment are 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 unaudited consolidated balance sheets, as well as the full amount of servicing fee collected as revenue and the servicing fee remitted as Pledged MSR liability expense in our unaudited consolidated statements of operations. In addition, changes in fair value of the transferred MSRs are recognized in MSR valuation adjustments, net in the unaudited consolidated statements of operations, while changes in fair value of the related MSR financing liability are reported in Pledged MSR liability expense. In 2021 and 2022, PMC entered into agreements to sell MSR portfolios to MAV on a bulk and flow basis. In each such agreement, PMC has been retained as subservicer for the sold portfolio in accordance with the terms of the subservicing agreement entered into on May 3, 2021. The transactions do not qualify for sale accounting treatment predominantly due to the termination restrictions of the subservicing agreement. See Note 10 - Investment in Equity Method Investee and Related Party Transactions. Starting in 2012, Ocwen entered into agreements to sell MSRs or Rights to MSRs and the related servicing advances to Rithm (formerly NRZ), and in all cases have been retained by Rithm as subservicer. In May 2022, Ocwen entered into amendments to the subservicing agreements to extend their terms to December 31, 2023 and establish a process for subsequent term extensions. In addition, the amendments provide for a modification of the sharing of some ancillary income between PMC and Rithm. Due to the length of the non-cancellable term of the subservicing agreements, the transactions do not qualify for sale accounting treatment which results in such transactions being accounted for as secured financings. In the case of Rights to MSRs transactions with Rithm, legal title was retained by Ocwen, causing the transactions to be accounted for as secured financings. The following tables present the activity of the pledged MSR liability recorded in connection with the MSR transfer agreements with Rithm and MAV that do not qualify for sale accounting. Three Months Ended September 30, 2022 2021 Pledged MSR Liability Original Rights to MSRs Agreements - Rithm MAV Agreements (2) Total Original Rights to MSRs Agreements - Rithm MAV Agreements (2) Total Beginning Balance $ 550,808 $ 355,530 $ 906,338 $ 535,571 $ — $ 535,571 MSR transfers — 13,420 13,420 — 132,003 132,003 Changes in fair value 71,072 18,533 89,605 63,762 (2,433) 61,329 Runoff and settlement (17,142) (9,592) (26,735) (21,100) (683) (21,783) Derecognition of financing liability(3) — (35,925) (35,925) — — — Calls (1) (84) — (84) (4,213) — (4,213) Ending Balance $ 604,654 $ 341,965 $ 946,619 $ 574,020 $ 128,887 $ 702,907 Nine Months Ended September 30, 2022 2021 Pledged MSR Liability Original Rights to MSRs Agreements - Rithm MAV Agreements (2) Total Original Rights to MSRs Agreements - Rithm MAV Agreements (2) Total Beginning Balance $ 558,940 $ 238,144 $ 797,085 $ 566,952 $ — $ 566,952 MSR transfers — 84,921 84,921 — 132,003 132,003 Changes in fair value (4) 102,606 82,329 184,935 73,706 (2,433) 71,273 Runoff and settlement (56,249) (27,504) (83,753) (59,626) (683) (60,309) Derecognition of financing liability(3) — (35,925) (35,925) — — — Calls (1) (643) — (643) (7,012) — (7,012) Ending Balance $ 604,654 $ 341,965 $ 946,619 $ 574,020 $ 128,887 $ 702,907 (1) Represents the carrying value of MSRs in connection with call rights exercised by Rithm, or by Ocwen at Rithm’s direction. Ocwen derecognizes the MSRs and the related financing liability upon collapse of the securitization. (2) The fair value of the Pledged MSR liability differs from the fair value of the associated transferred MSR asset mostly due to the portion of ancillary income that is retained by PMC (shared between PMC and MAV) and other contractual cash flows under the terms of the subservicing agreement. As the MSR sales to MAV do not achieve sale accounting, the MSR asset transferred remains on the consolidated balance sheet and the proceeds from the sale are initially recognized as a financing liability (Pledged MSR liability), which is recorded at fair value with changes in fair value reported in Pledged MSR liability expense. (3) During the three months ended September 30, 2022, we derecognized a portion of the MAV Pledged MSR liability upon sale of the related MSRs by MAV to a third party with a UPB of $2.9 billion. (4) The changes in fair value of the MAV Pledged MSR Liability in the nine months ended September 30, 2022 include a $14.1 million loss associated with the amendment to the MAV Subservicing Agreement in March 2022, resulting in lower contractually retained ancillary income by PMC. See Note 10 - Investment in Equity Method Investee and Related Party Transactions. The following table presents selected assets and liabilities recorded on our unaudited consolidated balance sheets in connection with the MSR transfer agreements with Rithm that do not qualify for sale accounting (refer to Note 9 – Receivables and Note 14 – Other Liabilities for receivables and other liabilities, respectively, related to MAV): September 30, 2022 December 31, 2021 Balance Sheet Rithm - Transferred MSRs, at fair value $ 604,654 $ 558,940 Other financing liability - Pledged MSR liability, at fair value Rithm - Original Rights to MSRs Agreements 604,654 558,940 Due from Rithm (Receivables) - Advance funding, subservicing fees and reimbursable expenses 2,245 3,781 Due to Rithm (Other liabilities) $ 80,438 $ 76,590 The following tables present selected items in our unaudited consolidated statements of operations in connection with the MSR transfer agreements with Rithm and MAV that do not qualify for sale accounting. Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Statements of Operations Servicing fees Servicing fees collected on behalf of Rithm $ 63,362 $ 75,034 $ 195,237 $ 233,135 Servicing fees collected on behalf of MAV 17,844 1,001 $ 51,048 1,001 $ 81,205 $ 76,035 $ 246,284 $ 234,136 Pledged MSR liability expense Rithm (see further details below) $ 102,790 $ 93,253 $ 188,414 $ 170,914 MAV (see further details below) 28,845 (2,094) 104,202 (2,094) $ 131,635 $ 91,160 $ 292,616 $ 168,820 Rithm Pledged MSR liability expense: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Servicing fees collected on behalf of Rithm $ 63,362 $ 75,034 $ 195,237 $ 233,135 Less: Subservicing fee retained by Ocwen 17,828 21,475 55,966 67,987 Net servicing fees remitted to Rithm 45,534 53,559 139,271 165,148 Less: Reduction (increase) in Pledged MSR liability Changes in fair value due to valuation inputs or assumptions - Original Rights to MSRs Agreements (71,072) (63,762) (102,606) (73,706) Runoff and settlement - Original Rights to MSRs Agreements 17,142 21,100 56,249 59,627 Other (3,326) 2,968 (2,786) 8,313 Pledged MSR liability expense - Rithm $ 102,790 $ 93,253 $ 188,414 $ 170,914 MAV Pledged MSR liability expense: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Servicing fees collected on behalf of MAV $ 17,844 $ 1,001 $ 51,048 $ 1,001 Less: Subservicing fee retained by Ocwen 2,313 178 6,678 178 Net servicing fees remitted to MAV 15,531 823 44,370 823 Less: Reduction (increase) in Pledged MSR liability Changes in fair value due to valuation inputs or assumptions (19,770) 2,433 (83,566) 2,433 Runoff and settlement (1) 6,472 683 24,384 683 Other (16) (199) (650) (199) Pledged MSR liability expense - MAV $ 28,845 $ (2,094) $ 104,202 $ (2,094) (1) Includes $3.1 million expense recognized during the three months ended September 30, 2022, representing the fair value of the MSRs in excess of the Pledged MSR Liability derecognized upon the sale of the related MSRs by MAV to a third party. Rithm - Ocwen Transactions Ocwen entered into a series of agreements to transfer Rithm the servicing of certain mortgage loans. 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 Rithm 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 Rithm, 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 Rithm 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 in July 2022 (the Initial Term). On January 18, 2018, the parties entered into new agreements (including a New RMSR Agreement, with an attached 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. On August 17, 2018, Ocwen and Rithm entered into certain amendments (i) to the New RMSR Agreements to include Shellpoint, a subsidiary of Rithm, 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. On May 2, 2022, Ocwen entered into amendments to the following three agreements with certain subsidiaries of Rithm: (a) the Shellpoint Subservicing Agreement; (b) the NRM Subservicing Agreement; and (c) the New RMSR Agreement, including the attached Servicing Addendum, dated as of January 18, 2018 with NRM, HLLS Holdings, LLC and HLSS MSR – EBO Acquisition LLC (the New RMSR Agreement or the Servicing Addendum). The amendments modified the terms of the Subservicing Agreements and the Servicing Addendum as follows: (i) the term of each Agreement was extended to December 31, 2023 (“Second Term”), with the Initial Term ending on May 1, 2022 and the Second Term beginning on May 2, 2022; (ii) subsequent term extensions will be automatic one-year renewals, unless Ocwen provides six months’ advance notice of termination (by July 1), or the Rithm parties provide three months’ advance notice of termination (by October 1) at the end of the then-current term as described below; and (iii) the parties will share a portion of some ancillary revenues. In addition, the amendments provided for certain immaterial modifications and clarifications of existing terms. The amendments on May 2, 2022 do not result in the prior transfers of MSR from Ocwen to Rithm qualifying for sale accounting prior to December 31, 2023, absent any subsequent amendment. Under the terms of the Subservicing Agreements and Servicing Addendum, as amended, in addition to a base servicing fee, Ocwen receives certain ancillary fees, primarily late fees, loan modification fees and convenience or other loan collection fees, where permitted. We may also receive certain incentive fees or pay penalties tied to various contractual performance metrics. Rithm receives all float earnings and deferred servicing fees related to delinquent borrower payments, as well as being entitled to receive a portion of some ancillary revenues and certain REO related income including REO referral commissions. Pursuant to the amendments noted above, the Subservicing Agreements and Servicing Addendum may be terminated by Ocwen or Rithm without cause (in effect a non-renewal) by providing notice in advance of the end of the Second Term or the end of each one-year extension of the applicable terms after the Second Term. Ocwen must provide a notice of termination by July 1, 2023, with respect to the Second Term or by July 1 of each one-year extended term after the Second Term and Rithm must provide notice by October 1, 2023 with respect to the Second Term or by October 1 of each one-year extended term after the Second Term. In addition, Rithm 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 Rithm terminates any of the NRM or Shellpoint Subservicing Agreements or the Servicing Addendum for cause, the other agreements will also terminate automatically. As of September 30, 2022, the UPB of MSRs subject to the Servicing Agreements and the New RMSR Agreements is $50.3 billion, including $11.0 billion for which title has not transferred to Rithm and $1.9 billion for which Ocwen is subservicer and Rithm servicer of record. 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 Rithm’s $11.0 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. As stated above, Rithm has the right to terminate the $11.0 billion New RMSR Agreements for convenience, in whole but not in part, subject to approximately three months’ advance notice of termination at the end of the Second Term or the end of the then-applicable annual extended term. If Rithm exercises this termination right, Rithm 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 Rithm 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 Rithm is not able to sell the Rights to MSRs or establish a Substitute RMSR Arrangement with another servicer, Rithm 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. |
Receivables
Receivables | 9 Months Ended |
Sep. 30, 2022 | |
Receivables [Abstract] | |
Receivables | Note 9 – Receivables September 30, 2022 December 31, 2021 Servicing-related receivables: Government-insured loan claims - Forward $ 70,089 $ 90,603 Government-insured loan claims - Reverse 48,840 39,895 Due from custodial accounts 29,900 7,777 Receivable from sale of MSRs (holdback) 7,794 — Servicing fees 7,033 6,662 Reimbursable expenses 6,770 6,056 Subservicing fees and reimbursable expenses - Due from Rithm 2,245 3,781 Subservicing fees, reimbursable expenses and other - Due from MAV 1,594 4,933 Other 948 1,223 175,213 160,930 Income taxes receivable 27,815 56,776 Due from MAV 432 990 Other receivables 4,542 3,760 208,002 222,456 Allowance for losses (37,164) (41,749) $ 170,838 $ 180,707 At September 30, 2022 and December 31, 2021, the allowance for losses primarily related to receivables of our Servicing business. The allowance for losses related to FHA-, VA- or USDA insured loans repurchased from Ginnie Mae guaranteed securitizations (government-insured claims) was $36.5 million and $41.5 million at September 30, 2022 and December 31, 2021, respectively. The government-insured claims that do not exceed HUD, VA, FHA or USDA insurance limits are not subject to any allowance for losses as guaranteed by the U.S. government. The receivable amount in excess of the guaranteed claim limits or recoverable amounts per insurer guidelines or as a result of servicer error, such as exceeding key filing or foreclosure timelines, is subject to an allowance for losses. Receivables are financial assets subject to the credit loss allowance model under ASC 326: Financial Instruments - Credit Losses (CECL). The allowance for expected credit losses is estimated 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. We generally charge off the receivable balance when management determines the receivable to be uncollectible and when the receivable has been classified as a loss by our servicing claims analysis process. Allowance for Losses - Government-Insured Loan Claims Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Beginning balance $ 39,751 $ 41,216 $ 41,495 $ 38,339 Provision 3,319 2,990 8,816 10,526 Charge-offs and other, net (6,577) (3,141) (13,818) (7,800) Ending balance $ 36,493 $ 41,065 $ 36,493 $ 41,065 |
Investment in Equity Method Inv
Investment in Equity Method Investee and Related Party Transactions | 9 Months Ended |
Sep. 30, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investment in Equity Method Investee and Related Party Transactions | Note 10 - Investment in Equity Method Investee and Related Party Transactions Investment in MAV Canopy. On December 21, 2020, Ocwen entered into a transaction agreement (the Transaction Agreement) with Oaktree Capital Management L.P. and certain affiliates (collectively Oaktree) to form a strategic relationship to invest in MSRs exclusively subserviced by PMC. The parties have agreed to invest their pro rata portions of up to an aggregate of $250.0 million in an intermediate holding company, MAV Canopy, held 15% by Ocwen and 85% by Oaktree. Also refer to Note 23 – Subsequent Events. On May 3, 2021, pursuant to the Transaction Agreement, Ocwen contributed 100% of its equity interest in MAV, which had total member’s equity and cash balances of approximately $5.0 million at the time of its contribution, to MAV Canopy. In exchange for its contribution, Ocwen received 15% equity interest of MAV Canopy plus $4.4 million cash consideration from MAV Canopy that was representative of the remaining 85% of MAV. MAV is a licensed mortgage servicing company approved to purchase GSE MSRs. PMC and MAV entered into a number of definitive agreements which govern the terms of their business relationship: We account for our 15% investment in MAV Canopy under the equity method. Our investment activity may be summarized as follows: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Beginning balance $ 38,821 $ 11,878 $ 23,297 $ — Capital contributions 17,250 6,984 33,750 18,512 Capital distributions (15,531) — (32,442) — Earnings distributions (5,175) — (5,175) — Earnings of equity method investee (1) 3,346 932 19,281 1,282 Ending balance $ 38,711 $ 19,794 $ 38,711 $ 19,794 (1) Note that MAV Canopy accounts for its MSR portfolio under the fair value option. Under the Amended & Restated Limited Liability Company Agreement with MAV Canopy, Ocwen is entitled to receive its 15% percentage interest share of MAV Canopy’s earnings, subject to certain adjustments. In addition, upon MAV Canopy liquidation or upon determination of the MAV Canopy Board of Directors to make advance distributions, Ocwen is entitled to receive a specified portion of the distribution amount available (“Promote Distribution”), after satisfaction of required distribution thresholds, including a specified internal rate of return threshold on Oaktree member’s gross adjusted capital contributions. We determined that the Promote Distribution represents an incentive fee under our various service agreements with MAV with a variable consideration and is recognized in earnings when it is probable that a significant reversal will not occur. As of September 30, 2022, Ocwen has not recognized any such Promote Distribution income. Subservicing Agreement. Effective May 3, 2021, PMC entered into a subservicing agreement with MAV for exclusive rights to service the mortgage loans underlying MSRs owned by MAV in exchange for a per-loan subservicing fee and certain other ancillary fees. The subservicing agreement will continue until terminated by mutual agreement of the parties or for cause, as defined. If either party terminates the agreement for cause, the other party is required to pay certain fees and costs. MAV is permitted to sell the underlying MSR without Ocwen’s consent after May 3, 2024. As of September 30, 2022, PMC subserviced a total $38.5 billion UPB on behalf of MAV, of which $26.2 billion MSR remains reported on the consolidated balance sheet of PMC - see below for information on MSR sales by PMC to MAV that do not achieve sale accounting. Subserviced loans exclude UPB of $10.1 billion that have not yet transferred to our servicing system as of September 30, 2022. Effective March 1, 2022, PMC and MAV amended certain provisions of the subservicing agreement to adjust down the ancillary fee retained by PMC to enhance the competitiveness of MAV when buying MSRs and generate additional subservicing volume to PMC . The amendment resulted in a $14.1 million fair value loss (as a change in the present value of future contractual cash flows) on the Pledged MSR liability that is reported at fair value in the three months ended March 31, 2022. Joint Marketing Agreement and Recapture Agreement. Effective May 3, 2021, in conjunction with the subservicing agreement, PMC and MAV entered into a joint marketing agreement and a flow MSR sale agreement (MSR recapture), whereby PMC is entitled to the exclusive right to solicit and refinance borrowers with loans underlying the MSR owned by MAV, and is obligated to transfer to MAV the MSR associated with the loans so originated. Under the agreements, the parties share the recapture benefits, whereby PMC realizes gains or losses on loans sold and MAV is delivered the recaptured MSR for no cash consideration. The joint marketing agreement and flow MSR sale agreement will continue until terminated by mutual agreement of the parties or for cause, as defined, or at the option of either party if the subservicing agreement is terminated. During the nine months ended September 30, 2022, PMC transferred UPB of $261.3 million under this agreement. Right of First Offer . Following the execution of the Transaction Agreement and until the parties have contributed their pro rata portions of the $250.0 million aggregate capital contributions, Ocwen and its affiliates may not acquire, without Oaktree’s prior written approval, GSE MSRs that meet certain underwriting and other criteria (such criteria are referred to as the “buy-box”) unless Ocwen notifies MAV of the opportunity and MAV does not pursue it by submitting a competitive bid to the MSR seller. In addition, until the earlier of (i) the time that MAV has been fully funded and (ii) May 3, 2024 (subject to two annual extensions by mutual agreement), if Ocwen seeks to sell any GSE MSRs that meet the buy-box, Ocwen must first offer such MSRs to MAV before initiating a sale process with a third party. If MAV does not accept Ocwen’s offer, Ocwen may sell the MSRs to a third party on terms no more favorable to the purchaser than those offered to MAV. The price at which Ocwen and its affiliates will offer MSRs to MAV will be based on the valuation of an independent third-party. This first offer provision does not apply to MSRs acquired by PMC prior to May 3, 2021. As of September 30, 2022, MAV Canopy aggregated capital contributions amounted to $139.9 million, net of distributions (excluding earnings distributions). Forward Bulk Servicing Rights Purchase and Sale Agreement: On September 9, 2021, PMC and MAV entered into an MSR purchase and sale agreement whereby PMC sells MAV on a monthly basis certain Fannie Mae MSRs at the price acquired by PMC, subject to certain adjustments. During the nine months ended September 30, 2022, PMC transferred MSRs with UPB of $6.3 billion to MAV under this agreement. Bulk Mortgage Servicing Rights Purchase and Sale Agreements. During the nine months ended September 30, 2022, PMC transferred MAV certain MSRs in bulk transactions for an aggregate UPB of approximately $598.3 million. The MSR sale transactions between PMC and MAV do not qualify for sale accounting primarily due to the termination restrictions of the subservicing agreement, and are accounted for as secured borrowings. See Note 8 — MSR Transfers Not Qualifying for Sale Accounting for a summary of transactions under this agreement. Administrative Services Agreement: Ocwen provides certain administrative services to MAV, including accounting, treasury, human resources, management information, MSR transaction management support, and certain licensing, regulatory and risk management support. Ocwen is entitled to a fee for such services, subject to an annual cap of $0.5 million. |
Other Assets
Other Assets | 9 Months Ended |
Sep. 30, 2022 | |
Other Assets [Abstract] | |
Other Assets | Note 11 – Other Assets September 30, 2022 December 31, 2021 Contingent loan repurchase asset $ 249,755 $ 403,740 Derivative margin deposit 26,104 2,024 Derivatives, at fair value 24,760 21,675 Prepaid expenses 20,791 21,498 Intangible assets, net (net of accumulated amortization of $4.1 million and $0.7 million) 18,622 14,335 REO 9,968 10,075 Prepaid lender fees, net 7,872 7,150 Prepaid representation, warranty and indemnification claims - Agency MSR sale 5,173 15,173 Deferred tax asset, net 3,323 3,329 Security deposits 900 1,174 Other 4,022 7,077 $ 371,290 $ 507,250 Intangible assets, net are primarily comprised of a reverse subservicing contract intangible asset with an unamortized balance of $18.0 million and $13.7 million at September 30, 2022 and December 31, 2021, respectively. On April 1, 2022, PMC boarded approximately 19,000 reverse mortgage loans with a UPB of $4.1 billion onto our servicing platform under the five-year subservicing agreement executed on October 1, 2021 with Mortgage Assets Management, LLC (formerly known as Reverse Mortgage Solutions, Inc.) (MAM (RMS)). A purchase price of $6.9 million was paid on April 7, 2022 with the assumption of a liability for curtailments and $8.1 million was recognized as a subservicing contract intangible asset, based on its relative fair value, to be amortized ratably over the five-year term of the subservicing contract based on portfolio runoff. This boarding is in addition to approximately 40,000 reverse mortgage loans with a UPB of $9.1 billion boarded during the first quarter of 2022. |
Other Financing Liabilities
Other Financing Liabilities | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Other Financing Liabilities | Note 12 - Other Financing Liabilities The following table presents financing liabilities carried at fair value. which include transferred MSR liabilities recorded in connection with MSR transfers that do not qualify for sale accounting, liabilities of consolidated mortgage-backed securitization trusts and MSR excess servicing spread (ESS) financing liability carried at fair value. Outstanding Balance Borrowing Type Collateral Maturity September 30, 2022 December 31, 2021 Original Rights to MSRs Agreements, at fair value - Rithm (1) MSRs (1) $ 604,654 $ 558,940 Pledged MSR liability, at fair value - MAV (1) MSRs (1) 341,965 238,144 946,619 797,084 Financing liability - Owed to securitization investors, at fair value: Residential Asset Securitization Trust 2003-A11 (RAST 2003-A11) (2) Loans held for investment Oct. 2033 6,802 7,879 ESS financing liability, at fair value (3) MSRs (3) N/A 36,301 — Total Other financing liabilities, at fair value $ 989,722 $ 804,963 (1) See Note 8 — MSR Transfers Not Qualifying for Sale Accounting for additional information. (2) Consists of securitization debt certificates due to third parties that represent beneficial interests in trusts that we include in our unaudited consolidated financial statements. Holders of the debt issued by the consolidated securitization trust entities have recourse only to the assets of the SPE for satisfaction of the debt and have no recourse against the assets of Ocwen. Similarly, the general creditors of Ocwen have no claim on the assets of the trusts. The certificates in the trust pay interest based on fixed rates ranging between 4.25% and 5.75% and a variable rate based on 1ML plus applicable margin, and include principal-only certificates that are not entitled to receive distributions of interest. The maturity of the certificates occurs upon maturity of the loans held by the trust. |
Borrowings
Borrowings | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Borrowings | Note 13 – Borrowings Advance Match Funded Liabilities Borrowing Capacity Outstanding Balance Borrowing Type Maturity (1) Amort. Date (1) Total Available (2) September 30, 2022 December 31, 2021 Advance Receivables Backed Notes - Series 2015-VF5 (3) Aug. 2053 Aug. 2023 $ 450,000 $ 32,559 $ 417,441 $ 14,231 Advance Receivables Backed Notes, Series 2020-T1 (4) Aug. 2052 Aug. 2022 — — — 475,000 Total Ocwen Master Advance Receivables Trust (OMART) 450,000 32,559 417,441 489,231 Ocwen GSE Advance Funding (OGAF ) - Advance Receivables Backed Notes, Series 2015-VF1 (5) Aug. 2053 Aug. 2023 50,000 11,208 38,792 23,065 EBO Advance facility (6) May 2026 NA 20,000 18,781 $ 1,219 $ — Total Servicing Advance Financing Facilities $ 520,000 $ 62,548 $ 457,452 $ 512,297 Weighted average interest rate (7) 5.47 % 1.54 % (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. After the amortization date for each note, 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) The committed borrowing capacity under the OMART and OGAF facilities is available to us provided that we have sufficient eligible collateral to pledge. At September 30, 2022, none of the available borrowing capacity of the OMART and OGAF advance financing notes could be used based on the amount of eligible collateral. (3) Interest is computed based on the lender’s cost of funds plus applicable margin. Effective August 15, 2022, we extended the amortization date of Series 2015-VF5 variable funding notes to August 14, 2023, increased the borrowing capacity from $80.0 million to $450.0 million and modified the interest rate margins. (4) We voluntarily repaid the outstanding balance of the Series 2020-T1 term notes at the amortization date in August 2022 and replaced with variable funding notes. See (3) above. The range of interest rates on the individual classes of the repaid notes was between 1.28% to 5.42%. (5) Interest is computed based on the lender’s cost of funds plus applicable margin. On January 31, 2022, we amended the Ocwen Freddie Advance Funding (OFAF) advance facility to include Fannie Mae advances as eligible collateral and renamed the facility Ocwen GSE Advance Funding (OGAF). On August 26, 2022, the amortization date of the facility was extended to August 25, 2023, the committed borrowing capacity was increased from $40.0 million to $50.0 million and the interest rate margin was modified. (6) On May 2, 2022, we entered into a loan and security agreement and issued a $1.7 million promissory note to the lender. The facility has total uncommitted borrowing capacity of $20.0 million to finance the acquisition of advances in connection with the early buyout of certain fixed-rate, fully-amortizing FHA-insured residential mortgage loans, at an interest rate of 1M Term Secured Overnight Financing Rate ( SOFR) plus applicable margin. At September 30, 2022, none of the available borrowing capacity of the facility could be used based on the amount of eligible collateral. (7) The weighted average interest rate, excluding the effect of the amortization of prepaid lender fees, is computed using the outstanding balance of each respective note and its interest rate at the financial statement date. At September 30, 2022 and December 31, 2021, the balance of unamortized prepaid lender fees was $2.4 million and $1.3 million, respectively, and are included in Other assets in our consolidated balance sheets. Mortgage Loan Warehouse Facilities Available Borrowing Capacity Outstanding Balance Borrowing Type Collateral Maturity Un-committed Committed (1) September 30, 2022 December 31, 2021 Master repurchase agreement (2) Loans held for sale (LHFS), Receivables and REO Aug. 2023 $ 86,097 $ — $ 88,903 $ 109,437 Master repurchase agreement (3) LHFS and Loans Held for Investment (LHFI) Dec. 2022 250,000 6,797 193,203 160,882 Master repurchase agreement (4) LHFS N/A 50,000 — — — Participation agreement (5) LHFS June 2023 250,000 — — 45,186 Master repurchase agreement (5) LHFS and LHFI June 2023 — 45,156 127,844 1,766 Master repurchase agreement LHFS June 2023 — 1,000 — — Mortgage warehouse agreement (6) LHFS and LHFI Mar. 2023 — 34,090 15,910 11,792 Mortgage warehouse agreement (7) LHFS and LHFI Mar. 2023 171,659 — 32,341 87,813 Mortgage warehouse agreement (8) LHFS and Receivables (8) 205,945 — 24,055 192,023 Master repurchase agreement (9) LHFS (9) — — — 459,344 Loan and security agreement (10) LHFS and Receivables Mar. 2023 — 14,924 35,076 16,834 Master repurchase agreement (11) LHFS Apr. 2023 197,774 — 302,226 — Total mortgage loan warehouse facilities $ 1,211,475 $ 101,968 $ 819,557 $ 1,085,076 Weighted average interest rate (12) 4.36 % 2.61 % (1) Of the borrowing capacity on mortgage loan warehouse facilities extended on a committed basis, none of the available borrowing capacity could be used at September 30, 2022 based on the amount of eligible collateral that could be pledged. (2) The maximum borrowing under this agreement is $175.0 million, of which $50.0 million is available on a committed basis and the remainder is available at the discretion of the lender. On June 29, 2022, the interest rate was modified from 1ML plus applicable margin to 1M Term SOFR plus applicable margin. On July 29, 2022, the total maximum borrowing under this agreement was reduced from $275.0 million to $175.0 million. The borrowing available on a committed basis was reduced to $50.0 million and uncommitted capacity was increased to $125.0 million. On August 31, 2022, the maturity date of the facility was extended to August 30, 2023 and the applicable interest rate margins were modified. (3) The maximum borrowing under this agreement is $450.0 million, of which $200.0 million is available on a committed basis and the remainder is available on an uncommitted basis. The interest rate for this facility is 1ML plus applicable margin. (4) The lender provides financing for up to $50.0 million at the discretion of the lender. The agreement has no stated maturity dat e. Interest on this facility is based on the SOFR. T he interest rate for this facility is SOFR plus applicable margin, with a SOFR floor. (5) On August 11, 2022, the uncommitted borrowing capacity under the participation agreement of $150.0 million was temporarily increased to $200.0 million and permanently increased to $250.0 million on September 16, 2022. On June 23, 2022, the maturity date was extended to June 22 2023 and the interest rate on the participation agreement was modified to the greater of the stated interest rate of the mortgage loans less an agreed upon servicing fee percentage or the 1M Term SOFR, plus the applicable margin. The previous interest rate was the stated interest rate of the mortgage loans, less applicable margin with an interest rate floor for new originations. On June 23, 2022, the committed borrowing capacity under the repurchase agreement was increased from $100.0 million to $173.0 million. Also on June 23, 2022, the maturity date was extended to June 22, 2023 and the interest rate was modified to 1M Term SOFR plus applicable margin, with an interest rate floor for Ginnie Mae modifications, Ginnie Mae buyouts and RMBS bond clean-up loans. The previous interest rate was the stated interest rate of the mortgage loans, less applicable margin with an interest rate floor for new originations and less applicable margin with an interest rate floor for Ginnie Mae modifications, Ginnie Mae buyouts and RMBS bond clean-up loans. The participation and repurchase agreements allow the lender to acquire a 100% beneficial interest in the underlying mortgage loans. (6) Under this agreement, the lender provides financing for up to $50.0 million on a committed basis. The interest rate for this facility was modified to 1M Term SOFR plus applicable margin with an interest rate floor. On January 14, 2022, the maturity date of this facility was extended to March 16, 2022 when it was further extended to March 16, 2023. (7) Under this agreement, t he lender provides financing for up to $204.0 million on an uncommitted basis. On February 20, 2022, the interest rate for this facility was modified to 1M Term SOFR plus applicable margin, with an interest rate floor. On June 16, 2022, the maturity date of the facility was extended to March 16, 2023. (8) The total borrowing capacity of this facility, all of which is uncommitted, was increased from $200.0 million to $250.0 million on January 5, 2022. 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 e ach transaction date and is based on the interest rate and type of the collat eral. On May 2, 2022, $20.0 million of the uncommitted capacity of this facility was assigned to a new EBO advance facility. (9) This repurchase agreement provides borrowing at our discretion up to a certain maximum amount of capacity on a rolling 30-day committed basis. This facility is structured as a gestation repurchase facility whereby dry Agency mortgage loans are transferred to a trust which issues a trust certificate that is pledged as the collateral for the borrowings. See Note 2 – Securitizations and Variable Interest Entities for additional information. Each certificate is renewed monthly and the interest rate for this facility is 1ML plus applicable margin. During first half of 2022, we voluntarily reduced the trust certificates by $325.0 million and by an additional $125.0 million during the third quarter of 2022. (10) This revolving facility agreement provides up to $50.0 million of committed borrowing capacity secured by eligible HECM loans that are active buyouts (ABO), as defined in the agreement. On April 29, 2022, the maturity date was extended to March 16, 2023 and the interest rate was modified from Prime Rate plus applicable margin (with an interest rate floor) to 1M Term SOFR plus applicable margin, with an interest rate floor. (11) On April 11, 2022, we entered into a warehouse line (master repurchase agreement) with a total borrowing capacity of $350.0 million, of which $100.0 million is committed, to finance loans held for sale and loans held for investment at an interest rate of daily simple SOFR plus applicable margin. On August 11, 2022, we temporarily increased the uncommitted capacity from $250.0 million to $350.0 million, with an additional temporary increase to $400.0 million on September 11, 2022 extended through November 9, 2022. (12) 1ML was 3.14% and 0.10% at September 30, 2022 and December 31, 2021, respectively. Prime Rate was 3.25% at December 31, 2021, 1M Term SOFR was 3.04% and 0.05% at September 30, 2022 and December 31, 2021, respectively. The weighted average interest rate excludes the effect of the amortization of prepaid lender fees. At September 30, 2022 and December 31, 2021, unamortized prepaid lender fees were $0.9 million and $1.2 million, respectively, and are included in Other assets in our consolidated balance sheets. MSR financing facilities, net Available Borrowing Capacity Outstanding Balance Borrowing Type Collateral Maturity Un-committed Committed (1) September 30, 2022 December 31, 2021 Agency MSR financing facility (2) MSRs June 2023 $ — $ 37,713 $ 412,287 $ 317,523 Ginnie Mae MSR financing facility (3) MSRs, Advances Feb. 2023 33,255 — 141,745 131,694 Ocwen Excess Spread-Collateralized Notes, Series 2019/2022-PLS1 (4) MSRs Feb. 2025 — — 61,752 41,663 Secured Notes, Ocwen Asset Servicing Income Series Notes, Series 2014-1 (5) MSRs Feb. 2028 — — 34,663 39,529 Agency MSR financing facility - revolving loan (6) MSRs June 2026 — 7,929 277,071 277,071 Agency MSR financing facility - term loan (6) MSRs June 2023 — — 94,178 94,178 Total MSR financing facilities $ 33,255 $ 45,642 $ 1,021,696 901,658 Unamortized debt issuance costs - PLS Notes and Agency MSR financing - term loan (7) (1,090) (898) Total MSR financing facilities, net $ 1,020,606 $ 900,760 Weighted average interest rate (8) (9) 5.96% 3.71% (1) Of the borrowing capacity on MSR financing facilities extended on a committed basis, $28.1 million of the available borrowing capacity could be used at September 30, 2022 based on the amount of eligible collateral that could be pledged. (2) 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 June 30, 2022, the maturity date was extended to June 30, 2023, the maximum amount which we may borrow pursuant to the repurchase agreements was increased to $450.0 million (from $350.0 million) on a committed basis and the interest rate was modified from 1ML plus applicable margin to 1M Term SOFR plus applicable margin. See Note 2 – Securitizations and Variable Interest Entities for additional information. We are subject to daily margining requirements under the terms of the facility. 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. (3) In connection with this facility, PMC entered into a repurchase agreement pursuant to which PMC has sold a participation certificate representing certain economic interests in the Ginnie Mae MSRs and servicing advances and has agreed to repurchase such participation certificate at a future date at the repurchase price set forth in the repurchase agreement. PMC’s obligations under this facility are secured by a lien on the related Ginnie Mae MSRs and servicing advances. Ocwen guarantees the obligations of PMC under the facility. See (2) above regarding daily margining requirements. On January 31, 2022, the maturity date of this facility was extended to February 28, 2022. On February 28, 2022, the maturity date was extended to February 28, 2023, the borrowing capacity was increased from $150.0 million to $175.0 million ($50.0 million available on a committed basis) and the interest rate was modified to adjusted daily simple SOFR plus applicable margin (with an adjusted SOFR floor). (4) 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 a fixed interest rate of 5.07%. On March 15, 2022, we replaced the existing notes with a new series of notes (Series 2022-PLS1) at an initial principal amount of $75.0 million and a fixed interest rate of 5.114%. The principal balance amortizes in accordance with a predetermined schedule subject to modification under certain events, with a final payment due in February 2025. See Note 2 – Securitizations and Variable Interest Entities for additional information. (5) OASIS noteholders are entitled to receive a monthly payment equal to the sum of: (a) 21 basis points of the UPB of the reference pool of Freddie Mac mortgages; (b) any termination payment amounts; (c) any excess refinance amounts; and (d) the note redemption amounts, each as defined in the indenture supplement for the notes. Monthly amortization of the liability is estimated using the proportion of monthly projected service fees on the underlying MSRs as a percentage of lifetime projected fees, adjusted for the term of the notes. (6) This facility includes a $94.2 million ($135.0 million original balance) term loan and a $285.0 million revolving loan secured by a lien on certain of PMC’s Agency MSRs. See (2) above regarding daily margining requirements. On September 1, 2022, the interest rate for this facility was modified from 1-year swap rate plus applicable margin to 1M Term SOFR plus applicable margin, with an interest rate floor. (7) At September 30, 2022 and December 31, 2021, unamortized debt issuance costs included $1.1 million and $0.9 million, respectively, on the PLS Notes and the Agency MSR financing facility - term loan. At September 30, 2022 and December 31, 2021, unamortized prepaid lender fees related to revolving type MSR financing facilities were $4.6 million and $4.7 million, respectively, and are included in Other assets in our consolidated balance sheets. (8) Weighted average interest rate at, excluding the effect of the amortization of debt issuance costs and prepaid lender fees. (9) 1ML was 3.14% and 0.10% at September 30, 2022 and December 31, 2021, respectively. The 1-year swap rate was 0.19% at December 31, 2021. 1M Term SOFR was 3.04% and 0.05% at September 30, 2022 and December 31, 2021, respectively. Senior Notes Interest Rate (1) Maturity Outstanding Balance September 30, 2022 December 31, 2021 PMC Senior Secured Notes 7.875% March 2026 $ 375,000 $ 400,000 OFC Senior Secured Notes (due to related parties) 12% paid in cash or 13.25% paid-in-kind (see below) March 2027 285,000 285,000 Principal balance 660,000 685,000 Discount (2) PMC Senior Secured Notes (1,415) (1,758) OFC Senior Secured Notes (3) (49,095) (54,176) (50,510) (55,934) Unamortized debt issuance costs (2) PMC Senior Secured Notes (4,578) (5,687) OFC Senior Secured Notes (7,782) (8,582) (12,360) (14,269) $ 597,129 $ 614,797 (1) Excluding the effect of the amortization of debt issuance costs and discount. (2) The discount and debt issuance costs are amortized to interest expense through the maturity of the respective notes. (3) Includes original issue discount (OID) and additional discount related to the concurrent issuance of warrants and common stock. See below for additional information. Redemption of 6.375% Senior Unsecured Notes due 2021 and 8.375% Senior Secured Notes due 2022 On March 4, 2021, we redeemed all of PHH’s outstanding 6.375% Senior Notes due August 2021 at a price of 100% of the principal amount, plus accrued and unpaid interest, and all of PMC’s 8.375% Senior Secured Notes due November 2022 at a price of 102.094% of the principal amount, plus accrued and unpaid interest. The redemption resulted in our recognition of a $7.1 million loss on debt extinguishment. Issuance of 7.875% Senior Secured Notes due 2026 On March 4, 2021, PMC completed the issuance and sale of $400.0 million aggregate principal amount of 7.875% senior secured notes due March 15, 2026 (the PMC Senior Secured Notes) at a discount of $2.1 million. The PMC Senior Secured Notes are guaranteed on a senior secured basis by Ocwen and PHH and were sold in an offering exempt from the registration requirements of the Securities Act of 1933, as amended (the Securities Act). Interest on the PMC Senior Secured Notes accrues at a rate of 7.875% per annum and is payable semi-annually in arrears on March 15 and September 15 of each year, beginning on September 15, 2021. On or after March 15, 2023, PMC may redeem some or all of the PMC Senior Secured Notes at its option at the following redemption prices, plus accrued and unpaid interest, if any, on the notes redeemed to, but excluding, the redemption date if redeemed during the 12-month period beginning on March 15th of the years indicated below: Redemption Year Redemption Price 2023 103.938 % 2024 101.969 2025 and thereafter 100.000 Prior to March 15, 2023, PMC may, on any one or more occasions, redeem some or all of the PMC Senior Secured Notes at its option at a redemption price equal to 100% of the principal amount of the notes being redeemed, plus a “make-whole” premium equal to the greater of (i) 1.0% of the then outstanding principal amount of such note and (ii) the excess of (1) the present value at the redemption date of the sum of (A) the redemption price of the note at March 15, 2023 (such redemption price is set forth in the table above) plus (B) all required interest payments due on such notes through March 15, 2023 (excluding accrued but unpaid interest), such present value to be computed using a discount rate equal to the Treasury Rate (as defined in the indenture governing the PMC Senior Secured Notes (Indenture)) as of such redemption date plus 50 basis points; over (2) the then outstanding principal amount of such notes, plus accrued and unpaid interest, if any, on the notes redeemed to, but excluding, the redemption date. In addition, on or prior to March 15, 2023, PMC may also redeem up to 35.0% of the principal amount of all of the PMC Senior Secured Notes originally issued under the Indenture (including any additional PMC Senior Secured Notes issued under the Indenture) using the net proceeds of certain equity offerings at a redemption price equal to 107.875% of the principal amount thereof, plus accrued and unpaid interest to, but excluding, the date of redemption (subject to the rights of holders of notes on the relevant regular record date to receive interest due on the relevant interest payment date that is on or prior to the applicable date of redemption); provided that: (i) at least 65.0% of the principal amount of all PMC Senior Secured Notes issued under the Indenture remains outstanding immediately after any such redemption; and (ii) PMC makes such redemption not more than 120 days after the consummation of any such equity offering. The Indenture contains customary covenants for debt securities of this type that limit the ability of PHH and its restricted subsidiaries (including PMC) to, among other things, (i) incur or guarantee additional indebtedness, (ii) incur liens, (iii) pay dividends on or make distributions in respect of PHH’s capital stock or make other restricted payments, (iv) make investments, (v) consolidate, merge, sell or otherwise dispose of certain assets, and (vi) enter into transactions with Ocwen’s affiliates. During the three months ended June 30, 2022, we repurchased a total of $25.0 million of the PMC Senior Secured Notes in the open market for a price of $23.6 million, and recognized a $0.9 million gain on debt extinguishment, net of the respective write-off of unamortized discount and debt issuance costs. Issuance of OFC Senior Secured Notes On March 4, 2021, Ocwen completed the private placement of $199.5 million aggregate principal amount of senior secured notes (the OFC Senior Secured Notes) with an OID of $24.5 million to certain entities owned by funds and accounts managed by Oaktree Capital Management, L.P. (the Oaktree Investors). Concurrent with the issuance of the OFC Senior Secured Notes, Ocwen issued to the Oaktree Investors warrants to purchase shares of its common stock. The $158.5 million proceeds were allocated to the OFC Senior Secured Notes on a relative fair value basis resulting in an initial discount. On May 3, 2021, Ocwen issued to Oaktree the second tranche of the OFC Senior Secured Notes in an aggregate principal amount of $85.5 million with an OID of $10.5 million. Concurrent with the issuance of the second tranche of OFC Senior Secured Notes, Ocwen issued to the Oaktree Investors shares and warrants to purchase shares of its common stock. The $68.0 million proceeds were allocated to the OFC Senior Secured Notes on a relative fair value basis resulting in an initial discount. The OFC Senior Secured Notes mature on March 4, 2027 with no amortization of principal. Interest is payable quarterly in arrears on the last business day of each March, June, September and December and accrues at the rate of 12% per annum to the extent interest is paid in cash or 13.25% per annum to the extent interest is “paid-in-kind” through an increase in the principal amount or the issuance of additional notes (PIK Interest). Prior to March 4, 2022, all of the interest on the OFC Senior Secured Notes may, at our option, be paid as PIK Interest. On or after March 4, 2022, a minimum amount of interest is required to be paid in cash equal to the lesser of (i) 7% per annum of the outstanding principal amount of the OFC Senior Secured Notes and (ii) the total amount of unrestricted cash of Ocwen and its subsidiaries less the greater of $125.0 million and the minimum liquidity amounts required by any agency. The OFC Senior Secured Notes are solely the obligation of Ocwen and are secured by a pledge of substantially all of the assets of Ocwen, including a pledge of the equity of Ocwen’s directly held subsidiaries. The lien on Ocwen’s assets securing the OFC Senior Secured Notes is junior to the lien securing Ocwen’s guarantee of the 7.875% PMC Senior Secured Notes described above. The OFC Senior Secured Notes are not guaranteed by any of Ocwen’s subsidiaries nor are they secured by a pledge or lien on any assets of Ocwen’s subsidiaries. Prior to March 4, 2026, we are permitted to redeem the OFC Senior Secured Notes in whole or in part at any time at a redemption price equal to par, plus a make-whole premium, plus accrued and unpaid interest. On and after March 4, 2026, we will be permitted to redeem the OFC Senior Secured Notes in whole or in part at any time at a redemption price equal to par plus accrued and unpaid interest. Credit Ratings Credit ratings are intended to be an indicator of the creditworthiness of a company’s debt obligations. At September 30, 2022, the S&P issuer credit rating for Ocwen was “B-”. On January 24, 2022, S&P raised the assigned rating of the PMC Senior Secured Notes from “B-” to ‘B’ and maintained a stable issuer outlook citing improved profitability and an increase in assets. Moody’s reaffirmed their ratings of Caa1 and revised their outlook to Stable from Negative on February 24, 2021. On August 15, 2022, Moody’s reaffirmed PMC’s long-term corporate family ratings of Caa1 and revised their outlook to Positive from Stable. 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 affirmative and negative covenants. Collectively, these covenants include: • Financial covenants, including, but not limited to, specified levels of net worth, liquidity and leverage; • Covenants to operate in material compliance with applicable laws; • Restrictions on our ability to engage in various activities, including but not limited to incurring or guarantying additional forms of debt, paying dividends or making distributions on or purchasing equity interests of Ocwen and its subsidiaries, 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 other restricted payments, entering into mergers or consolidations or sales of all or substantially all of the assets of Ocwen and its subsidiaries or of PHH or PMC and their respective subsidiaries, creating liens on assets to secure debt, and 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. The most restrictive consolidated net worth requirement contained in our debt agreements with borrowings outstanding at September 30, 2022 is a minimum of $300.0 million tangible net worth at Ocwen, as defined in certain of our mortgage warehouse, MSR financing and advance financing facilities agreements. See also Note 20 – Regulatory Requirements. The most restrictive liquidity requirement under our debt agreements with borrowings outstanding at September 30, 2022 is for a minimum of $75.0 million in consolidated liquidity, as defined, under certain of our MSR financing facilities agreements. We believe we were in compliance with all of the covenants in our debt agreements as of the date of these unaudited consolidated financial statements. Collateral Our assets held as collateral for secured borrowings and other unencumbered assets which may be subject to a lien under various collateralized borrowings are as follows at September 30, 2022: Assets Pledged Collateralized Borrowings Unencumbered Assets (1) Cash $ 226,570 $ — $ — $ 226,570 Restricted cash 45,269 45,269 — — Loans held for sale 729,638 685,428 683,430 44,210 Loans held for investment - securitized (2) 7,267,982 7,267,982 7,208,385 — Loans held for investment - unsecuritized 127,501 94,884 88,021 32,617 MSRs (3) 1,742,978 1,750,870 1,028,262 4,578 Advances, net 642,461 545,520 487,186 96,941 Receivables, net 170,838 40,580 44,211 130,259 REO 9,968 4,539 3,895 5,429 Total (4) $ 10,963,206 $ 10,435,071 $ 9,543,390 $ 540,605 (1) Certain assets are pledged as collateral to the $375.0 million PMC Senior Secured Notes and $285.0 million OFC Senior Secured (second lien) Notes. (2) Reverse mortgage loans and real estate owned are pledged as collateral to the HMBS beneficial interest holders, and are not available to satisfy the claims of our creditors. Ginnie Mae, as guarantor of the HMBS, is obligated to the holders of the HMBS in an instance of PMC’s default on its servicing obligations, or if the proceeds realized on HECMs are insufficient to repay all outstanding HMBS related obligations. Ginnie Mae has recourse to PMC in connection with certain claims relating to the performance and obligations of PMC as both issuer of HMBS and servicer of HECMs underlying HMBS. (3) Excludes MSRs transferred to Rithm and MAV and associated Pledged MSR liability recorded as sale accounting criteria are not met. Pledged assets exceed the MSR asset balance due to the netting of certain PLS MSR portfolios with negative and positive fair values as eligible collateral. (4) The total of selected assets disclosed in the above table does not represent the total consolidated assets of Ocwen. For example, the total excludes premises and equipment and certain other assets. The OFC Senior Secured Notes due 2027 have a second lien priority on specified assets carried on PMC’s balance sheet, as defined under the OFC Senior Secured Note Agreement and listed in the table below, and have a priority lien on the following assets: investments by OFC in subsidiaries not guaranteeing the $375.0 million PMC Senior Secured Notes, including PHH and MAV; cash and investment accounts at OFC; and certain other assets, including receivables. September 30, 2022 Specified net servicing advances $ 116,980 Specified deferred servicing fee 21,591 Specified MSR value less borrowings 796,556 Specified unrestricted cash balances 146,849 Specified advance facility reserves 10,064 Specified loan value 84,754 Specified residual value 79,513 Total (PMC) $ 1,256,305 |
Other Liabilities
Other Liabilities | 9 Months Ended |
Sep. 30, 2022 | |
Other Liabilities Disclosure [Abstract] | |
Other Liabilities | Note 14 – Other Liabilities September 30, 2022 December 31, 2021 Contingent loan repurchase liability $ 249,755 $ 403,740 Due to Rithm - Advance collections, servicing fees and other 80,438 76,590 Other accrued expenses 80,138 104,931 Liability for indemnification obligations 52,489 51,243 Checks held for escheat 49,527 44,866 Accrued legal fees and settlements 47,102 43,990 Servicing-related obligations 37,583 32,366 Derivative related payables 24,894 3,714 Derivatives, at fair value 23,704 3,080 MSR purchase price holdback 16,402 32,620 Lease liability 15,836 16,842 Liability for uncertain tax positions 11,587 14,730 Accrued interest payable 9,206 11,998 Liability for unfunded India gratuity plan 5,885 6,263 Due to MAV 3,649 2,134 Liability for unfunded pension obligation 3,115 4,183 Other 9,802 14,224 $ 721,112 $ 867,514 |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Stockholders' Equity | Note 15 – Stockholders’ Equity On May 20, 2022, Ocwen’s Board of Directors authorized a share repurchase program for an aggregate amount of up to $50.0 million of Ocwen’s issued and outstanding shares of common stock. The repurchase program is intended to qualify for the affirmative defense provided by Rule 10b5-1 under the Securities Exchange Act of 1934, as amended. Through September 30, 2022, we have completed the repurchase of 1,338,498 shares of our common stock in the open market under this program at prevailing market prices for a total purchase price of $38.7 million (excluding commissions) at an average price per share of $28.93. The repurchased shares were retired as of September 30, 2022. Unless Ocwen amends the share repurchase program or |
Derivative Financial Instrument
Derivative Financial Instruments and Hedging Activities | 9 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments and Hedging Activities | Note 16 – Derivative Financial Instruments and Hedging Activities The table below summarizes the fair value, notional and maturity of our derivative instruments. 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, 2022 and 2021. September 30, 2022 December 31, 2021 Maturities Notional Fair value Maturities Notional Fair value Derivative Assets (Other assets) Forward sales of reverse loans Oct. 2022 $ 40,000 $ 173 Feb. 2022 $ 175,000 $ 364 Forward loans IRLCs N/A — — Jan. - Apr. 2022 1,021,978 16,074 Reverse loans IRLCs Oct. 2022 19,224 610 Jan. 2022 63,327 2,011 TBA forward MBS trades Oct. - Dec. 2022 1,448,000 23,977 Jan. - Mar. 2022 587,000 946 Interest rate swap futures N/A — — Mar. 2022 792,500 1,734 Interest rate option contracts N/A — — Jan. 2022 125,000 547 Total $ 1,507,224 $ 24,760 $ 2,764,805 $ 21,675 Derivative Liabilities (Other liabilities) Forward loans IRLCs Nov. 2022 - Feb. 2023 $ 1,289,388 $ (12,800) N/A $ — $ — Forward sales of reverse loans Oct. 2022 30,000 (85) N/A — — TBA forward MBS trades Oct. - Dec. 2022 418,000 (2,208) Jan. - Mar. 2022 1,195,000 (1,185) Interest rate swap futures Dec. 2022 440,000 (7,274) N/A — — Interest rate option contracts Oct. 2022 500,000 (1,172) Feb. 2022 450,000 (824) Other N/A 11,907 (164) N/A — (1,070) Total $ 2,689,295 $ (23,704) $ 1,645,000 $ (3,080) The table below summarizes the net gains and losses of our derivative instruments recognized in our consolidated statement of operations. Three Months Ended September 30, Nine Months Ended September 30, Financial Statement Line Gain (loss) 2022 2021 2022 2021 Derivative Instruments Forward loans IRLCs $ (17,953) $ (3,743) $ (28,834) $ (8,817) Gain on loans held for sale, net Reverse loans IRLCs (250) 327 (1,421) 141 Reverse mortgage revenue, net Reverse loans IRLCs (Equity IQ loans) 266 — (20) — Gain on loans held for sale, net TBA trades (economically hedging forward pipeline trades and EBO pipeline) 48,389 780 124,613 592 Gain on loans held for sale, net (Economic hedge) TBA trades (economically hedging reverse pipeline trades) (131) — (209) — Reverse mortgage revenue, net Interest rate swap futures, TBA trades and interest rate option contracts (23,814) (12,607) (107,490) (3,310) MSR valuation adjustments, net Forward sales of Reverse loans (478) 274 (276) 471 Reverse mortgage revenue, net Other — (423) — (439) Gain on loans held for sale, net Other (31) — 906 — Other, net Total $ 5,998 $ (15,392) $ (12,730) $ (11,362) 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 among other inputs and assumptions. Through May 2021, management implemented a macro-hedging strategy to reduce the volatility of the MSR portfolio attributable to interest rate changes. As a general matter, the impact of interest rates on the fair value of our MSR portfolio is naturally offset by other exposures, including our loan pipeline and our economic MSR value embedded in our reverse mortgage loan portfolio. Our hedging strategy was targeted at mitigating the residual exposure, which we referred to as our net MSR portfolio exposure. We defined our net MSR portfolio exposure as follows: • our more interest rate-sensitive Agency MSR portfolio, • less the Agency MSRs subject to our agreements with Rithm (See Note 8 — MSR Transfers Not Qualifying for Sale Accounting), • less the unsecuritized reverse mortgage loans and tails classified as held for investment, • 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 lock commitments (pipeline). Effective May 2021, management started hedging its MSR portfolio and its pipeline separately (see below for further description of pipeline hedging ) , effectively ending the macro-hedge strategy previously in place. Under the new MSR hedging strategy, the interest-rate sensitive MSR portfolio exposure is now defined as follows: • Agency MSR portfolio, • expected Agency MSR bulk transactions subject to letters of intent (LOI), • less the Agency MSRs subject to our sale agreements with Rithm and MAV (See Note 8 — MSR Transfers Not Qualifying for Sale Accounting), • less the asset value for securitized HECM loans, net of the corresponding HMBS-related borrowings. The objective of our MSR policy is to provide partial hedge coverage of interest-rate sensitive MSR portfolio exposure, considering market and liquidity conditions. The hedge coverage ratio, defined as the ratio of hedge and asset rate sensitivity (referred to as DV01) is subject to lower and upper thresholds, as modeled. As of September 30, 2022, a minimum 25% and 30% hedge coverage ratios were required for interest rate declines less than, and more than 50 basis points, respectively. Prior to September 30, 2022, the hedge coverage ratio was required to remain within a minimum of 40% and maximum of 60%. Accordingly, the changes in fair value of our hedging instruments may not fully offset the changes in fair value of our net MSR portfolio exposure attributable to interest rate changes. We periodically evaluate the hedge coverage ratio at the intended shock interval to determine if it is relevant or warrants adjustment based on market conditions, symmetry of interest rate risk exposure, and liquidity impacts of both the hedge and asset profile under shock scenarios. As the market dictates, management may choose to maintain hedge coverage ratio levels at or beyond the above thresholds, with approval of the Market Risk Committee, in order to preserve liquidity and/or optimize asset returns. In addition, while DV01 measures may remain within the range of our hedging strategy’s objective, actual changes in fair value of the derivatives and MSR portfolio may not offset to the same extent, due to non-parallel changes in the interest rate curve and the basis risk inherent in the MSR profile and hedging instruments, among other factors. We continuously evaluate the use of hedging instruments to strive to enhance the effectiveness of our interest rate hedging strategy. Our derivative instruments include forward trades of MBS or Agency TBAs with different banking counterparties, exchange-traded interest rate swap futures and interest rate options. 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. From time-to-time, we enter into exchange-traded options contracts with purchased put options financed by written call options. We report changes in fair value of these derivative instruments in MSR valuation adjustments, net in our consolidated statements of operations, within the Servicing segment. We may, from time to time, establish inter-segment derivative instruments between the MSR and pipeline hedging strategies to optimize the use of third party derivatives. Such inter-segment derivatives are eliminated in our consolidated financial statements. The derivative instruments are subject to margin requirements, posted as either initial or variation margin. Ocwen may be required to post or may be entitled to receive cash collateral with its counterparties through margin calls, based on daily value changes of the instruments. Changes in market factors, including interest rates, and our credit rating may require us to post additional cash collateral and could have a material adverse impact on our financial condition and liquidity. Pipeline Hedging - Interest Rate Lock Commitments and Loans Held for Sale, at Fair Value In our Originations business, we are exposed to interest rate risk and related price risk during the period from the date of the interest rate lock commitment through (i) the lock commitment cancellation or expiration date or (ii) through the date of sale or securitization of the resulting loan into the secondary mortgage market. Loan commitments for forward loans generally range from 5 to 90 days, with the majority of our commitments to borrowers for 55 to 75 days and our commitments to correspondent sellers for 7 days. Loans held for sale are generally funded and sold within 3 to 20 days. This interest rate exposure was not individually hedged until May 2021, but rather used as an offset to our MSR exposure and managed as part of our MSR macro-hedging strategy described above. Effective May 2021, we implemented a new pipeline hedging strategy, whereby the interest rate exposure of loans and IRLCs is economically hedged with derivative instruments, including forward sales of Agency TBAs. The objective of our pipeline hedging strategy is to reduce the volatility of the fair value of IRLCs and loans due to market interest rates, thus to preserve the initial gain on sale margin at lock date. We report changes in fair value of these derivative instruments as gain or loss on economic hedge instruments within either Gain on loans held for sale, net and Reverse mortgage revenue, net in our consolidated statements of operations, respectively. EBO and Loan Modification Hedging – Loans Held for Sale, at fair value Effective February 2022, management started hedging certain Ginnie Mae EBO loans as well as loans in process of modification pending redelivery/re-securitization to manage interest rate risk. Such interest rate exposure on these loans held for sale accounted for at fair value is economically hedged using forward trades of TBAs. Changes in fair value of these derivative instruments are reported as gain or loss on economic hedge instruments within Gain on loans held for sale, net in our consolidated statements of operations. Foreign Currency Exchange Rate Risk |
Interest Expense
Interest Expense | 9 Months Ended |
Sep. 30, 2022 | |
Other Income and Expenses [Abstract] | |
Interest Expense | Note 17 – Interest Expense Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 OFC Senior Secured Notes (1) $ 10,578 $ 10,238 $ 31,461 $ 21,351 PHH and PMC senior notes 7,748 8,245 24,002 23,581 MSR financing facilities 13,839 8,623 30,206 17,950 Mortgage loan warehouse facilities 10,785 8,985 24,574 20,673 Advance match funded liabilities 5,021 2,809 10,523 11,570 SSTL — — — 2,956 Escrow 2,424 1,723 5,365 4,510 $ 50,395 $ 40,623 $ 126,131 $ 102,591 (1) Notes issued to Oaktree affiliates, inclusive of amortization of debt issuance costs and discount of $2.0 million and $5.9 million for the three and nine months ended September 30, 2022, respectively, and $1.6 million and $3.4 million for the three and nine months ended September 30, 2021, respectively. |
Basic and Diluted Earnings per
Basic and Diluted Earnings per Share | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Earnings per Share | Note 18 – Basic and Diluted Earnings 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 restricted stock awards, stock options and warrants as determined using the treasury stock method. Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Basic earnings per share Net income $ 36,939 $ 21,552 $ 105,375 $ 19,773 Weighted average shares of common stock 8,530,209 9,189,030 8,998,298 8,960,696 Basic earnings per share $ 4.33 $ 2.35 $ 11.71 $ 2.21 Diluted earnings per share Net income $ 36,939 $ 21,552 $ 105,375 $ 19,773 Weighted average shares of common stock 8,530,209 9,189,030 8,998,298 8,960,696 Effect of dilutive elements Common stock warrants 131,092 65,593 136,471 97,426 Stock option awards — — 24 — Common stock awards 205,624 147,235 161,064 161,049 Dilutive weighted average shares of common stock 8,866,925 9,401,858 9,295,857 9,270,751 Diluted earnings per share $ 4.17 $ 2.29 $ 11.34 $ 2.13 Stock options and common stock awards excluded from the computation of diluted earnings per share Anti-dilutive (1) 271,933 166,153 276,988 155,213 Market-based (2) 68,236 87,509 68,236 87,509 (1) Includes stock options 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, 2022 | |
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. Our reportable business segments consist of Servicing, Originations, and Corporate Items and Other. During the nine months ended September 30, 2022, there have been no changes to our business segments as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021, with the exception of certain reclassifications disclosed below. Effective in the first quarter of 2022, we recognize revaluation gains on Fannie Mae MSRs purchased through the Agency Cash Window Program within the Servicing segment that were historically reported in the Originations segment. MSR valuation adjustments, net for the Servicing and Originations segments have been revised for prior periods to conform to the current segment presentation. Such revaluation gains were $1.5 million for the three and nine months ended September 30, 2021. Revenues and expenses directly associated with each respective business segments are included in determining its results of operations. We allocate certain expenses incurred by corporate support services to each business segment using various methodologies intended to approximate the utilization of such services. We allocate overhead costs incurred by corporate support services to the Servicing and Originations segments which incorporates the utilization of various measurements primarily based on time studies, personnel volumes and service consumption levels. 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 initiatives, 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. We allocate interest expense on corporate debt from Corporate Items and Other to the Servicing segment and the Originations segment (starting in the fourth quarter of 2021) based on relative financing requirements. Effective in the first quarter of 2022, we no longer allocate interest expense on the OFC Senior Secured Notes to the Servicing and Originations segments. Interest expense allocated to the Servicing and Originations segments for prior periods has been revised to conform to the current period presentation. The interest expense allocation adjustment for the three and nine months ended September 30, 2021 is $7.5 million ($7.3 million Servicing and $0.2 million Originations) and $14.9 million ($14.7 million Servicing and $0.2 million Originations), respectively. As a result of our risk management strategy to hedge the interest rate risk of our net MSR portfolio, the fair value changes of third-party derivative instruments were reported within MSR valuation adjustments, net. For management segment reporting purposes, we established inter-segment derivative instruments to transfer the risks and allocate the associated fair value changes of derivatives between Servicing and Originations, and specifically between MSR valuation adjustments, net and Gain on loans held for sale, net (Gain/loss on economic hedge instruments). In the second quarter of 2021, we began separately hedging our MSR portfolio and pipeline. We may, from time to time, establish intersegment derivative instruments between our MSR and pipeline hedging strategies to optimize the use of third-party derivatives. The inter-segment derivative fair value changes are eliminated in the consolidated financial statements in the Corporate Eliminations column in the table below. Financial information for our segments is as follows: Three Months Ended September 30, 2022 Results of Operations Servicing Originations Corporate Items and Other Corporate Eliminations (1) Business Segments Consolidated Servicing and subservicing fees $ 214,977 $ 585 $ — $ — $ 215,562 Reverse mortgage revenue, net (3,636) 10,521 — — 6,885 Gain (loss) on loans held for sale, net (1) 154 20,746 — (1,969) 18,931 Other revenue, net 343 6,457 1,544 — 8,344 Revenue 211,838 38,309 1,544 (1,969) 249,722 MSR valuation adjustments, net (1) 89,569 3,621 — 1,969 95,159 Operating expenses (2) 86,100 33,256 22,052 — 141,408 Other (expense) income: Interest income 2,895 10,361 476 — 13,732 Interest expense (30,907) (8,931) (10,557) — (50,395) Pledged MSR liability expense (131,672) — 37 — (131,635) Earnings of equity method investee 3,346 — — — 3,346 Other (4,000) (605) (933) — (5,538) Other income (expense), net (160,338) 825 (10,977) — (170,490) Income (loss) before income taxes $ 54,969 $ 9,499 $ (31,485) $ — $ 32,983 Three Months Ended September 30, 2021 Results of Operations Servicing Originations Corporate Items and Other Corporate Eliminations (1) Business Segments Consolidated Servicing and subservicing fees $ 205,430 $ 1,155 $ — $ — $ 206,585 Reverse mortgage revenue, net (13,032) 18,067 — — 5,035 Gain on loans held for sale, net (1) 31,555 29,604 — (1,457) 59,702 Other revenue, net 303 9,947 1,529 — 11,779 Revenue 224,256 58,773 1,529 (1,457) 283,101 MSR valuation adjustments, net (1) (9,117) 1,340 — 1,457 (6,320) Operating expenses 80,849 43,966 20,621 — 145,436 Other (expense) income: Interest income 2,417 5,348 104 — 7,869 Interest expense (21,643) (6,542) (12,438) — (40,623) Pledged MSR liability expense (91,120) — (40) — (91,160) Earnings of equity method investee 932 — — — 932 Other 1,443 122 335 — 1,900 Other expense, net (107,971) (1,072) (12,039) — (121,082) Income (loss) before income taxes $ 26,319 $ 15,075 $ (31,131) $ — $ 10,263 Nine Months Ended September 30, 2022 Results of Operations Servicing Originations Corporate Items and Other Corporate Eliminations (1) Business Segments Consolidated Servicing and subservicing fees $ 641,679 $ 1,638 $ — $ — $ 643,316 Reverse mortgage revenue, net (34,517) 51,896 — — 17,379 Gain on loans held for sale, net (1) (14,015) 46,059 — (15,379) 16,665 Other revenue, net 1,107 19,999 4,978 — 26,084 Revenue 594,254 119,592 4,978 (15,379) 703,444 MSR valuation adjustments, net (1) 168,300 7,310 — 15,379 190,989 Operating expenses (2) 242,882 121,966 47,949 — 412,797 Other (expense) income: Interest income 9,946 19,942 701 — 30,590 Interest expense (76,305) (18,301) (31,525) — (126,131) Pledged MSR liability expense (292,677) — 61 — (292,616) Earnings of equity method investee 19,281 — — — 19,281 Gain (loss) on extinguishment of debt (33) — 947 — 914 Other (7,564) (1,731) (641) — (9,936) Other expense, net (347,352) (90) (30,457) — (377,898) Income (loss) before income taxes $ 172,320 $ 4,846 $ (73,428) $ — $ 103,738 Nine Months Ended September 30, 2021 Results of Operations Servicing Originations Corporate Items and Other Corporate Eliminations (1) Business Segments Consolidated Servicing and subservicing fees $ 556,927 $ 5,837 $ — $ — $ 562,764 Reverse mortgage revenue, net (511) 56,673 — — 56,162 Gain on loans held for sale, net (1) 39,206 94,471 — (25,541) 108,136 Other revenue, net 1,302 23,450 4,326 — 29,078 Revenue 596,924 180,431 4,326 (25,541) 756,140 MSR valuation adjustments, net (1) (101,755) 18,652 — 25,541 (57,562) Operating expenses 247,228 121,877 65,768 — 434,873 Other (expense) income: Interest income 4,905 10,776 312 — 15,993 Interest expense (57,861) (14,794) (29,936) — (102,591) Pledged MSR liability expense (168,847) — 27 — (168,820) Earnings of equity method investee 1,282 — — — 1,282 Gain (loss) on extinguishment of debt — — (15,458) — (15,458) Other 4,787 4 763 — 5,554 Other expense, net (215,734) (4,014) (44,292) — (264,040) Income (loss) before income taxes $ 32,207 $ 73,192 $ (105,734) $ — $ (335) (1) Corporate Eliminations includes inter-segment derivatives eliminations of $2.0 million and $15.4 million for the three and nine months ended September 30, 2022, respectively, and $1.5 million and $25.5 million for the three and nine months ended September 30, 2021, respectively, reported as Gain on loans held for sale, net with a corresponding offset in MSR valuation adjustments, net. (2) Included in Professional services expense are reimbursements received from mortgage loan investors related to prior year legal expenses and payments received following resolution of legacy litigation matters of $4.3 million (Servicing) and $25.3 million ($18.4 million Servicing and $6.9 million Corporate) during the three and nine months ended September 30, 2022, respectively. Total Assets Servicing Originations Corporate Items and Other Business Segments Consolidated September 30, 2022 $ 11,322,586 $ 731,057 $ 306,426 $ 12,360,069 December 31, 2021 $ 10,999,204 $ 823,530 $ 324,389 $ 12,147,123 September 30, 2021 $ 10,810,298 $ 865,018 $ 364,922 $ 12,040,238 Depreciation and Amortization Expense Servicing Originations Corporate Items and Other Business Segments Consolidated Three months ended September 30, 2022 Depreciation expense $ 245 $ 108 $ 2,127 $ 2,480 Amortization of debt issuance costs and discount 203 — 2,240 2,443 Amortization of intangibles 1,207 — — 1,207 Three months ended September 30, 2021 Depreciation expense $ 137 $ 77 $ 2,247 $ 2,461 Amortization of debt issuance costs and discount 129 — 2,076 2,205 Nine months ended September 30, 2022 Depreciation expense $ 669 $ 322 $ 6,658 $ 7,649 Amortization of debt issuance costs and discount 618 — 6,908 7,526 Amortization of intangibles 3,332 — — 3,332 Nine months ended September 30, 2021 Depreciation expense $ 514 $ 125 $ 6,888 $ 7,527 Amortization of debt issuance costs and discount 388 — 5,050 5,438 |
Regulatory Requirements
Regulatory Requirements | 9 Months Ended |
Sep. 30, 2022 | |
Brokers and Dealers [Abstract] | |
Regulatory Requirements | Note 20 – Regulatory Requirements Our business is subject to extensive regulation and supervision by federal, state, local and foreign 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 Agency (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, handling of unclaimed property, safeguarding of non-public personally identifiable information about our customers, and the ability of our employees to work remotely. 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, payroll and other 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 foreign subsidiaries are subject to inquiries and examinations from foreign governmental regulators in the countries in which we operate outside of the U.S. 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, 2022. 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 $364.9 million at September 30, 2022. PMC’s adjusted net worth was $678.7 million at September 30, 2022. The most restrictive of the various liquidity requirements for licensing and seller/servicer obligations referenced above pertains to PMC and was $40.3 million at September 30, 2022. PMC’s liquid assets were $205.3 million at September 30, 2022. On August 17, 2022, the FHFA and Ginnie Mae announced updated minimum financial eligibility requirements for GSE seller/servicers and Ginnie Mae issuers. The updated minimum financial eligibility requirements modify the definitions of tangible net worth and eligible liquidity, modify their minimum standard measurement and include a new risk-based capital ratio, among other changes. On September 21, 2022, at the direction of the FHFA, Fannie Mae and Freddie Mac announced similar revisions to minimum financial eligibility requirements. The majority of the updated requirements are effective on September 30, 2023. On October 21, 2022, Ginnie Mae extended the compliance date for its risk-based capital requirements to December 31, 2024. We are currently evaluating the potential impacts of these updated requirements. New York Department of Financial Services (NY DFS). We operate pursuant to certain regulatory requirements with the NY DFS, 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, the Black Knight Financial Services, Inc. (Black Knight) LoanSphere MSP® 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 Financial Protection and Innovation (CA DFPI) . In January 2015 and February 2017, Ocwen Loan Servicing, LLC (OLS) entered into consent orders with the CA DFPI (formerly known as the California Department of Business Oversight) 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. We continue to work with the CA DFPI to address matters they raise with us, including regarding the post-boarding process to verify loan and payment terms are properly implemented, calculated, and applied. |
Commitments
Commitments | 9 Months Ended |
Sep. 30, 2022 | |
Other Commitments [Abstract] | |
Commitments | Note 21 — Commitments Unfunded Lending Commitments We have originated floating-rate reverse mortgage loans under which the borrowers have additional borrowing capacity of $1.7 billion at September 30, 2022. This additional borrowing capacity is available on a scheduled or unscheduled payment basis. During the nine months ended September 30, 2022, we funded $181.2 million out of the $1.5 billion borrowing capacity as of December 31, 2021. We also had short-term commitments to lend $1.3 billion and $19.2 million in connection with our forward and reverse mortgage loan IRLCs, respectively, outstanding at September 30, 2022. We finance originated and purchased forward and reverse mortgage loans with repurchase and participation agreements, referred to as warehouse lines. HMBS Issuer Obligations As an HMBS issuer, we are required to purchase loans out of the Ginnie Mae securitization pools once the outstanding principal balance of a reverse mortgage loan is equal to or greater than 98% of the maximum claim amount (MCA repurchases), or when they become inactive (the borrower is deceased, no longer occupies the property or is delinquent on tax and insurance payments). Our subservicing clients bear the financial obligation and risks associated with purchasing loans out of securitization pools within the portfolio we subservice. Activity with regard to HMBS repurchases, primarily MCA repurchases, are as follows: Nine Months Ended September 30, 2022 Active Inactive Total Number Amount Number Amount Number Amount Beginning balance 138 $ 35,322 448 $ 93,813 586 $ 129,135 Additions 435 115,149 154 39,118 589 154,267 Recoveries, net (1) (370) (98,782) (147) (34,732) (517) (133,514) Transfers (11) (4,791) 11 4,791 — — Changes in value — 74 — (2,787) — (2,713) Ending balance 192 $ 46,972 466 $ 100,203 658 $ 147,175 (1) Includes amounts received upon assignment of loan to HUD, loan payoff, REO liquidation and claim proceeds less any amounts charged off as unrecoverable. Rithm Relationship (formerly NRZ) |
Contingencies
Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
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 borrowers, 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, and those brought under the False Claims Act by private citizens on behalf of the U.S. In addition, we may be a party or potential party to threatened or pending legal proceedings brought by fair-housing advocates, current and former commercial counterparties and market competitors, including, among others, claims related to the sale or purchase of loans, MSRs or other assets, and breach of contract actions, parties on whose behalf we service or serviced mortgage loans, parties who provide ancillary services including property preservation and other post-foreclosure related services, and parties who provide or provided consulting, subservicing, or other services to Ocwen. 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, federal and local bankruptcy rules, federal and local tax regulations, and state deceptive trade practices laws. Such proceedings include wrongful foreclosure and eviction actions, bankruptcy violation actions, payment misapplication 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 and individual state laws, claims related to our payment, escrow and other processing operations, claims relating to fees imposed on borrowers relating to inspection fees, foreclosure attorneys’ fees, reinstatement fees, foreclosure registration fees, payment processing, payment facilitation or payment convenience fees, claims related to ancillary products marketed and sold to borrowers, claims related to loan modifications and loan assumptions, claims related to call recordings, claims regarding certifications of our legal compliance related to our participation in certain government programs, claims related to improper occupancy inspections, and claims related to untimely recording of mortgage satisfactions. 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 improperly assessed and/or 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 $47.1 million at September 30, 2022. We cannot currently estimate the amount, if any, of reasonably possible losses above amounts that have been recorded at September 30, 2022. As previously disclosed, we are subject to individual lawsuits relating to our FDCPA compliance and putative state law class actions based on the FDCPA and similar state statutes. We are currently defending five class actions challenging, under state and federal law, our practice of charging borrowers a fee to use certain optional payment methods ( Morris v. PHH Mortg. Corp., et al. (S.D. FL), Torliatt v. PHH Mortg. Corp., et al. (N.D. Ca), Thacker v. PHH Mortg. Corp., et al. (N.D. WV), Forest v. PHH Mortg. Corp., et al. (D. RI), and Williams v. PHH Mortg. Corp., et al. (S.D. TX). We have reached settlements in four of these class actions. In the Torliatt matter, the Court granted preliminary approval of the parties’ proposed settlement and scheduled the final fairness hearing for November 16, 2022. In the Thacker class action, the Court granted preliminary approval of the parties’ proposed settlement and scheduled the final fairness hearing for November 14, 2022. Finally, we have reached tentative agreements with the plaintiffs in both the Morris and Williams class actions and we are currently finalizing the settlement agreements in both matters before filing motions for preliminary approval. 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 alleging that PHH’s legacy mortgage reinsurance arrangements between its captive reinsurer, Atrium Insurance Corporation, and certain mortgage insurance providers violated RESPA. See Munoz v. PHH Mortgage Corp. et al. (Eastern District of California). In June 2015, the court certified a class of borrowers who obtained loans with private mortgage insurance through PHH’s captive reinsurance arrangement between June 2007 and December 2009. PHH asserted numerous defenses to the merits of the case. Following pre-trial developments in August 2020, the only issues remaining for trial were whether the plaintiffs had standing to bring their claims and whether the reinsurance services provided by PHH’s captive reinsurance subsidiary, Atrium, were actually provided in order for the safe harbor provision of RESPA to apply. On January 31, 2022, the Court denied a motion by the plaintiffs to enter new evidence and a motion by PHH to decertify the class, which motion PHH may renew if the case ultimately goes to trial. Following the entry of this order, at the request of the parties, the Court dismissed all of the plaintiffs’ claims for lack of standing and entered judgment in favor of PHH. The plaintiffs appealed to the United States Court of Appeals for the Ninth Circuit and that appeal is now fully briefed. Ocwen will continue to vigorously defend itself. Our current accrual with respect to this matter is included in the $47.1 million legal and regulatory accrual referenced above. At this time, Ocwen is unable to predict the outcome of this lawsuit or the possible loss or range of loss, if any, associated with the resolution of such lawsuit. If our efforts to defend this lawsuit are not successful, our business, reputation, financial condition, liquidity and results of operations could be materially and adversely affected. The same plaintiffs who filed a TCPA class action against Ocwen subsequently filed a similar class action against trustees of RMBS trusts based on vicarious liability for Ocwen’s alleged non-compliance with the TCPA. This class action filed against the trustees has settled, and while the trustees previously have indicated their intent to seek indemnification from Ocwen based on the vicarious liability claims, they have yet to take any formal action. Additional lawsuits have been and may be filed against us in relation to our TCPA compliance. However, a recent Supreme Court decision significantly undercuts the predominant theory of liability under the TCPA, and should provide even greater defenses on which Ocwen can rely when defending existing lawsuits or any additional lawsuits that may be filed. Nevertheless, given the recency of this Supreme Court decision, and the lack of opportunity for lower courts to interpret and apply it, it remains difficult to predict 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. Ocwen is a defendant in a certified class action in the U.S. District Court in the Eastern District of California where the plaintiffs claim Ocwen marked up fees for property valuations and title searches in violation of California state law. See Weiner v. Ocwen Financial Corp., et al . In May 2020, the court ruled that plaintiff’s recoverable damages are limited to out-of-pocket costs, i.e. , the amount of marked-up fees actually paid, rather than the entire cost of the valuation that plaintiffs sought. Following further pre-trial developments, on August 3, 2022, the Court entered an order granting our motion to decertify each of the three classes. On August 17, 2022, plaintiffs filed a petition for permission to appeal the decertification decision and a motion asking the trial court to reconsider its decertification decision, each of which we opposed and are pending a ruling. 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 may have affirmative indemnification rights and/or other claims against third parties related to the allegations in the lawsuit. Although we may pursue these claims, we cannot currently estimate the amount, if any, of recoveries from these third parties. We are currently involved in a dispute with a former subservicing client, HSBC Bank USA, N.A. (HSBC), which filed a complaint in the Supreme Court of the State of New York against PHH. See HSBC Bank USA, N.A. v. PHH Mortgage Corp. (Supreme Court of the State of New York). HSBC’s claims relate to alleged breaches of agreements entered into under a prior subservicing arrangement and origination assistance agreement. In its complaint, HSBC also asserted a claim for fraud, which was dismissed by the Court. PHH has answered the complaint and has asserted counterclaims against HSBC for breach of contract. We believe we have strong factual and legal defenses to the remaining claims and are vigorously defending the action. 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. 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 events of default alleging material failures by servicers to comply with applicable servicing agreements. Although Ocwen has not been sued by an RMBS trustee in response to an event of default notice, 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 event 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 an event of default notice, nor can we predict at this time the potential loss or range of loss, if any, associated with the resolution of any event of default notice or the potential impact on our operations. If Ocwen were to be terminated as servicer, or other related legal actions were pursued against Ocwen, it could have an adverse effect on Ocwen’s business, 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. We may also on occasion be subject to foreign regulatory actions in the countries where we operate outside the U.S. 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. Our accrual for probable and estimable legal and regulatory matters, including accrued legal fees, was $47.1 million at September 30, 2022. We cannot currently estimate the amount, if any, of reasonably possible losses above amounts that have been recorded at September 30, 2022. 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. The parties participated in mediation in October 2020 and subsequently held additional settlement discussions. However, the parties were unable to reach a resolution of the litigation. On March 4, 2021, the court issued an order granting in part and reserving ruling in part on Ocwen’s motion for summary judgment. In that order, the court granted Ocwen summary judgment on 9 of 10 counts in the CFPB’s amended complaint, finding that the CFPB’s allegations were barred under the principles of claim preclusion or res judicata to the extent those claims are premised on servicing activity occurring prior to February 26, 2017 and are covered by a 2014 Consent Judgment entered by the United States District Court for the District of Columbia. The CFPB subsequently filed its Second Amended Complaint to remove count 10 as well as allegations in counts 1-9 concerning servicing activity that occurred after February 26, 2017. On April 21, 2021, the court entered final judgment in our favor, denied all pending motions as moot, and closed the case. The CFPB thereafter filed a notice of appeal. Appellate briefing concluded August 26, 2021, and oral argument before the Eleventh Circuit occurred on February 10, 2022. On April 6, 2022, the Eleventh Circuit issued its opinion, largely adopting the district court’s decision precluding the CFPB from bringing claims covered by the National Mortgage Settlement, but vacating and remanding the case back to the district court to determine which, if any, claims are not covered and may still be brought by the CFPB. Neither party sought rehearing of the Eleventh Circuit’s decision. Opening briefs were filed with the district court on September 1, 2022 and response briefs were filed on September 22, 2022. Ocwen will continue to vigorously defend itself. Our current accrual with respect to this matter is included in the $47.1 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, as well as from state attorneys general, the CFPB and other federal agencies, including the Department of Justice and various inspectors general. For example, we have received requests regarding the charging of certain fees to borrowers; the post-boarding process to verify loan and payment terms are properly implemented, calculated, and applied; bankruptcy practices; COVID-19-related forbearance and post-forbearance options; and Homeowner Assistance Fund participation and implementation. 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. We resolved the majority of these matters in 2017 and resolved the remaining matters in early 2018 An additional state regulator brought legal action together with that state’s attorney general, which we resolved in 2020. In resolving these matters, we entered into agreements that contained certain restrictions and commitments with respect to the operation of our business and our regulatory compliance activities, including certain 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. We also provided certain borrower financial remediation and made payments to state regulators. We believe we have completed all material obligations under these agreements, although a few remaining reporting and other such obligations are ongoing. On occasion, we engage with agencies of the federal government on various matters. For example, Ocwen was named as a defendant in a HUD administrative complaint filed by a non-profit organization in 2017 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 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 in the Treasury Department’s Making Home Affordable Program. Ocwen has also received subpoenas that appear to relate to federal government agency initiatives relating to our industry generally, since we understand other lenders and servicers have received similar subpoenas. These include subpoenas in 2016 and 2017 from the Office of Inspector General of HUD requesting documentation related to HECM loans and lender-placed insurance arrangements with a mortgage insurer and a 2019 subpoena from the VA Office of the Inspector General requesting documentation related to the origination and underwriting of loans guaranteed by the Veterans Benefits Administration. In each instance, we have provided documents and information in response to these subpoenas. Loan Put-Back and Related Contingencies We have exposure to representation, warranty and indemnification obligations relating to our Originations business, including lending, loan sales and securitization activities, and relating to our servicing practices. We do not provide or assume any origination representations and warranties in connection with our MSR purchases through MSR flow purchase agreements or Agency Cash Window programs. At September 30, 2022 and September 30, 2021, we had outstanding representation and warranty repurchase demands of $53.3 million UPB (280 loans) and $59.6 million UPB (301 loans), respectively. We review each demand and monitor through resolution, primarily through rescission, loan repurchase or make-whole payment. The following table presents the changes in our liability for representation and warranty obligations and similar indemnification obligations: Nine Months Ended September 30, 2022 2021 Beginning balance (1) $ 49,430 $ 40,374 Provision (reversal) for representation and warranty obligations 1,800 1,483 New production liability 2,299 3,227 Charge-offs and other (2) (2,730) (2,530) Ending balance (1) $ 50,798 $ 42,554 (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. We believe that it is reasonably possible that losses beyond amounts currently recorded for potential representation and warranty obligations and other claims described above could occur, and such losses could have an adverse impact on our results of operations, financial condition or cash flows. However, based on currently available information, we are unable to estimate a range of reasonably possible losses above amounts that have been recorded at September 30, 2022 . Other Ocwen, on its own behalf and on behalf of various mortgage loan investors, is engaged in a variety of activities to seek payments from mortgage insurers for unpaid claims, including claims where the mortgage insurers paid less than the full claim amount. Ocwen believes that many of the actions by mortgage insurers were in violation of the applicable insurance policies and insurance law. In some cases, Ocwen has entered into tolling agreements, initiated arbitration or litigation, engaged in settlement discussions, or taken other similar actions. To date, Ocwen has settled with five mortgage insurers, and expects the ultimate outcome to result in recovery of additional unpaid claims, although we cannot quantify the likely amount at this time. We may, from time to time, have affirmative indemnification and other claims against service providers, parties from whom we purchased MSRs or other assets, investors or other parties. Although we pursue these claims, we cannot currently estimate the amount, if any, of further recoveries. Similarly, from time to time, indemnification and other claims are made against us by parties to whom we sold MSRs or other assets or by parties on whose behalf we service mortgage loans. We cannot currently estimate the amount, if any, of reasonably possible loss above amounts recorded. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 23 – Subsequent Events During October 2022, we completed the repurchase of 344,246 shares of our common stock in the open market at prevailing market prices for a total purchase price of $9.0 million and at an average price paid per share of $26.13. These shares were repurchased under the $50.0 million program authorized by Ocwen’s Board of Directors in May 2022. See Note 15 – Stockholders’ Equity for additional information . On November 2, 2022, Ocwen and Oaktree entered into an agreement modifying certain terms relating to the capitalization, management and operations of the MSR joint venture, MAV Canopy. Under the terms of the agreement, Ocwen and Oaktree agreed to increase the aggregate capital contributions to MAV Canopy by up to an additional $250 million through May 2, 2024, subject to extension. Ocwen may elect to contribute its 15% pro rata share of the additional capital commitment. To the extent Ocwen does not contribute its pro rata share of the additional capital commitment, the ownership percentages held by Ocwen and Oaktree will be adjusted based on the parties’ current percentage interests, capital contributions and book value. In connection with the increased commitment, the parties agreed to reduce Ocwen’s Promote Distribution. Also refer to Note 10 - Investment in Equity Method Investee and Related Party Transactions. |
Organization and Basis of Pre_2
Organization and Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
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, 2022 are not necessarily indicative of the results that may be expected for any other interim period or for the year ending December 31, 2022. 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, 2021. |
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 and the provision for losses that may arise from contingencies including litigation proceedings. In developing estimates and assumptions, management uses all available information; however, actual results could materially differ from those estimates and assumptions. |
Recently Adopted Accounting Standards And Accounting Standards Issued but Not Yet Adopted | Recently Adopted Accounting Standards Earnings Per Share (ASC 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (ASC 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (a consensus of the FASB Emerging Issues Task Force) (ASU 2021-04) The amendments in this ASU provide the following guidance for a modification or an exchange of a freestanding equity-classified written call option that is not within the scope of another Topic: (1) treat a modification of the terms or conditions or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange as an exchange of the original instrument for a new instrument, (2) measure the effect of a modification or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange and (3) recognize the effect of a modification or an exchange of a freestanding equity-classified written call option to compensate for goods or services in accordance with the guidance in ASC 718. In a multiple-element transaction (for example, one that includes both debt financing and equity financing), the total effect of the modification should be allocated to the respective elements in the transaction. Our adoption of this standard on January 1, 2022 did not 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 phase-out of certain tenors of the London Inter-bank Offered Rate (LIBOR) by the end of 2021 (or June 30, 2023 for U.S. dollar LIBOR of certain tenors). 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 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 the referenced interest rate. Some of these facilities and loan agreements either matured prior to September 30, 2022 or have terms in place that provide for an alternative to LIBOR upon its phase-out. Accounting Standards Issued but Not Yet Adopted Business Combinations (ASC 805) - Accounting for Contract Assets and Contract Liabilities (ASU 2021-08) The amendments in this Update apply to all entities that enter into a business combination within the scope of Subtopic 805-10, Business Combinations— Overall. The amendments in this ASU are issued to improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to the following: (1) recognition of an acquired contract liability and (2) payment terms and their effect on subsequent revenue recognized by the acquirer. The amendments in this ASU require that an entity (acquirer) recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606. At the acquisition date, an acquirer should account for the related revenue contracts in accordance with ASC 606 as if it had originated the contracts. To achieve this, an acquirer may assess how the acquiree applied ASC 606 to determine what to record for the acquired revenue contracts. Generally, this should result in an acquirer recognizing and measuring the acquired contract assets and contract liabilities consistent with how they were recognized and measured in the acquiree’s financial statements (if the acquiree prepared financial statements in accordance with generally accepted accounting principles (GAAP)). The amendments in this ASU are effective for us on January 1, 2023. We do not anticipate that the adoption of this standard will have a material impact on our consolidated financial statements. |
Securitizations and Variable _2
Securitizations and Variable Interest Entities (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Transfers and Servicing [Abstract] | |
Schedule of Cash Flows Related to Transfers Accounted for as Sales | The following table presents a summary of cash flows received from and paid to securitization trusts related to transfers of loans accounted for as sales that were outstanding: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Proceeds received from securitizations $ 5,227,470 $ 5,823,765 $ 12,925,295 $ 12,220,596 Servicing fees collected (1) 21,577 16,440 67,154 43,968 Purchases of previously transferred assets, net of claims reimbursed (3,500) (6,065) (10,324) (16,085) $ 5,245,547 $ 5,834,140 $ 12,982,125 $ 12,248,479 |
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, 2022 December 31, 2021 Carrying value of assets MSRs, at fair value $ 510,427 $ 360,830 Advances 63,396 151,166 UPB of loans transferred (1) 34,060,639 31,864,769 Maximum exposure to loss (2) $ 34,634,462 $ 32,376,765 (1) Includes $6.3 billion and $5.6 billion of loans delivered to Ginnie Mae as of September 30, 2022 and December 31, 2021, respectively, and includes loan modifications repurchased and delivered through the Ginnie Mae Early Buyout Program (EBO). (2) The maximum exposure to loss does not take into consideration any recourse available to us, including from the underlying collateral or from correspondent sellers. Also, refer to Loan Put-Back and Related Contingencies in Note 22 – Contingencies. |
Carrying Value and Classification of Assets and Liabilities of Loans Held for Sale Financing Facility | The table below presents the carrying value and classification of the assets and liabilities of the loans held for sale financing facility: September 30, 2022 December 31, 2021 Mortgage loans (Loans held for sale, at fair value) $ — $ 462,144 Outstanding borrowings (Mortgage loan warehouse facilities) — 459,344 |
Carrying Value And Classification Of Assets And Liabilities Of Advance Financing Facilities | The table below presents the carrying value and classification of the assets and liabilities of the advance financing facilities: September 30, 2022 December 31, 2021 Match funded advances (Advances, net) $ 540,142 $ 587,059 Debt service accounts (Restricted cash) 10,064 7,687 Unamortized deferred lender fees (Other assets) 2,379 1,305 Prepaid interest (Other assets) 477 225 Advance match funded liabilities 456,233 512,297 |
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, 2022 December 31, 2021 MSRs pledged (MSRs, at fair value) $ 820,382 $ 630,605 Unamortized deferred lender fees (Other assets) 1,716 1,495 Debt service account (Restricted cash) 103 104 Outstanding borrowings (MSR financing facilities, net) 412,287 317,523 |
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, 2022 December 31, 2021 MSRs pledged (MSRs, at fair value) $ 129,586 $ 99,833 Debt service account (Restricted cash) 1,692 1,968 Outstanding borrowings (MSR financing facilities, net) 61,752 41,663 Unamortized debt issuance costs (MSR financing facilities, net) 884 413 |
Fair Value (Tables)
Fair Value (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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, 2022 December 31, 2021 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 $ 725,218 $ 725,218 $ 917,534 $ 917,534 Loans held for sale, at lower of cost or fair value (b) 3 4,420 4,420 10,993 10,993 Total Loans held for sale $ 729,638 $ 729,638 $ 928,527 $ 928,527 September 30, 2022 December 31, 2021 Level Carrying Value Fair Value Carrying Value Fair Value Loans held for investment Loans held for investment - Reverse mortgages (a) 3 $ 7,395,483 $ 7,395,483 $ 7,199,762 $ 7,199,762 Loans held for investment - Restricted for securitization investors (a) 3 6,802 6,802 7,879 7,879 Total loans held for investment $ 7,402,285 $ 7,402,285 $ 7,207,641 $ 7,207,641 Advances, net (c) 3 $ 642,461 $ 642,461 $ 772,433 $ 772,433 Receivables, net (c) 3 170,838 170,838 180,707 180,707 Mortgage-backed securities (a) 3 — — 1 1 Corporate bonds (a) 2 211 211 211 211 Financial liabilities: Advance match funded liabilities (c) 3 $ 457,452 $ 457,452 $ 512,297 $ 511,994 Financing liabilities: HMBS-related borrowings (a) 3 $ 7,208,385 $ 7,208,385 $ 6,885,022 $ 6,885,022 Other financing liabilities Financing liability -Transferred MSR liability (a) 3 $ 946,619 $ 946,619 $ 797,084 $ 797,084 Financing liability - Excess Servicing Spread (ESS) (a) 3 36,301 36,301 — — Financing liability - Owed to securitization investors (a) 3 6,802 6,802 7,879 7,879 Total Other financing liabilities $ 989,722 $ 989,722 $ 804,963 $ 804,963 Mortgage loan warehouse facilities (c) 3 819,557 819,557 1,085,076 1,085,076 MSR financing facilities (c) (d) 3 1,020,606 999,022 900,760 873,820 Senior notes: PMC Senior secured notes due 2026 (c) (d) 2 $ 369,007 $ 325,736 $ 392,555 $ 413,472 OFC Senior secured notes due 2027 (c) (d) 3 228,122 218,647 222,242 261,455 Total Senior notes $ 597,129 $ 544,383 $ 614,797 $ 674,927 Derivative financial instrument assets (liabilities), net Interest rate lock commitments (IRLCs) (a) 3 $ (12,190) $ (12,190) $ 18,085 $ 18,085 Forward trades - Reverse Loans (a) 2 87 87 364 364 TBA / Forward mortgage-backed securities (MBS) trades (a) 1 21,769 21,769 (240) (240) Interest rate swap futures (a) 1 (7,274) (7,274) 1,734 1,734 Option contracts (a) 2 (1,172) (1,172) (277) (277) Other (a) 3 (164) (164) (1,070) (1,070) MSRs (a) 3 $ 2,714,225 $ 2,714,225 $ 2,250,147 $ 2,250,147 (a) Measured at fair value on a recurring basis. (b) Measured at fair value on a non-recurring basis. (c) Disclosed, but not measured, at fair value. (d) The carrying values are net of unamortized debt issuance costs and discount. See Note 13 – Borrowings for additional information . |
Schedule of Reconciliation of Changes in Fair Value of Level 3 Assets and Liabilities | The following tables present a reconciliation of the changes in fair value of Level 3 assets and liabilities that we measure at fair value on a recurring basis: Loans Held for Investment - Restricted for Securitization Investors Financing Liability - Owed to Securitization Investors Loans Held for Sale - Fair Value ESS Financing Liability IRLCs Three months ended September 30, 2022 Beginning balance $ 7,289 $ (7,289) $ 41,363 $ — $ 5,746 Purchases, issuances, sales and settlements Purchases — — 9,478 — — Issuances (1) — — — (36,241) 50,912 Sales — — (16,569) — — Settlements (487) 487 — 644 — Transfers (to) from: Loans held for sale, at fair value (1) — — — — 17,643 Receivables, net — — (1,581) — — (487) 487 (8,672) (35,597) 68,555 Change in fair value included in earnings (1) — — (2,171) (704) (86,491) Ending balance $ 6,802 $ (6,802) $ 30,520 $ (36,301) $ (12,190) 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, 2021 Beginning balance $ 8,680 $ (8,680) $ 138,842 $ 1,607 $ 17,437 Purchases, issuances, sales and settlements Purchases — — 136,996 — — Issuances (1) — — — — 184,995 Sales — — (64,032) — — Settlements (676) 676 — — — Transfers (to) from: Loans held for sale, at fair value (1) — — — — (182,783) Receivables, net — — (558) — — (676) 676 72,406 — 2,212 Change in fair value included in earnings (1) — — (496) 11 (5,619) Ending balance $ 8,004 $ (8,004) $ 210,752 $ 1,618 $ 14,030 Loans Held for Investment - Restricted for Securitization Investors Financing Liability - Owed to Securitization Investors Loans Held for Sale - Fair Value ESS Financing Liability IRLCs Nine Months Ended September 30, 2022 Beginning balance $ 7,879 $ (7,879) $ 220,940 $ — $ 18,085 Purchases, issuances, sales and settlements Purchases — — 127,715 — Issuances (1) — — — (36,241) 212,764 Sales — — (308,181) — — Settlements (1,077) 1,077 — 644 — Transfers (to) from: Loans held for sale, at fair value (1) — — — — (36,220) Receivables, net — — (3,350) — — (1,077) 1,077 (183,816) (35,597) 176,544 Change in fair value included in earnings (1) — — (6,604) (704) (206,819) Ending balance $ 6,802 $ (6,802) $ 30,520 $ (36,301) $ (12,190) 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, 2021 Beginning balance $ 9,770 $ (9,770) $ 51,072 $ 2,019 $ 22,706 Purchases, issuances, sales and settlements Purchases — — 303,117 — — Issuances (1) — — — — 446,751 Sales — — (135,088) — — Settlements (1,766) 1,766 — — — Transfers (to) from: Loans held for sale, at fair value (1) — — — — (425,169) Other assets — — (377) — — Receivables, net — — (1,113) — — (1,766) 1,766 166,539 — 21,582 Change in fair value included in earnings (1) — — (6,859) (401) (30,258) Ending balance $ 8,004 $ (8,004) $ 210,752 $ 1,618 $ 14,030 (1) IRLC activity (issuances and transfers) represent changes in fair value included in earnings. This activity is presented on a gross basis in the table for disclosure purposes. Total net change in fair value included in earnings attributed to IRLCs is a gain (loss) of $(17.9) million and $(30.3) million for the three and nine months ended September 30, 2022, respectively, and $(3.4) million and $(8.7) million for the three and nine months ended September 30, 2021, respectively. See Note 16 – Derivative Financial Instruments and Hedging Activities. |
Schedule of Significant Assumptions used in Valuation | Significant unobservable assumptions September 30, December 31, Life in years Range 0.4 to 7.2 1.0 to 8.2 Weighted average 4.8 5.7 Conditional prepayment rate, including voluntary and involuntary prepayments Range 13.0% to 48.1% 11.2% to 36.6% Weighted average 18.7 % 16.0 % Discount rate 5.1 % 2.6 % Significant unobservable assumptions September 30, 2022 December 31, 2021 Agency Non-Agency Agency Non-Agency Weighted average prepayment speed 6.6 % 9.3 % 8.5 % 12.1 % Weighted average lifetime delinquency rate 1.4 % 10.3 % 1.2 % 11.9 % Weighted average discount rate 9.1 % 10.6 % 8.5 % 11.2 % Weighted average cost to service (in dollars) $ 72 $ 193 $ 71 $ 205 Significant unobservable assumptions September 30, December 31, Life in years Range 0.4 to 7.2 1.0 to 8.2 Weighted average 4.8 5.7 Conditional prepayment rate Range 13.0% to 48.1% 11.2% to 36.6% Weighted average 18.7 % 16.0 % Discount rate 5.0 % 2.5 % Significant unobservable assumptions September 30, December 31, Weighted average prepayment speed 8.5 % 10.9 % Weighted average delinquency rate 7.2 % 8.8 % Weighted average discount rate 10.1 % 10.5 % Weighted average cost to service (in dollars) $ 169 $ 182 |
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, 2022 given hypothetical increases in lifetime prepayments and yield assumptions: Adverse change in fair value 10% 20% Weighted average prepayment speeds $ (60,457) $ (118,162) Weighted average discount rate (76,572) (147,150) |
Loans Held for Sale (Tables)
Loans Held for Sale (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Receivables [Abstract] | |
Schedule of Loans Held for Sale Fair Value | Loans Held for Sale - Fair Value Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Beginning balance $ 683,140 $ 680,866 $ 917,534 $ 366,364 Originations and purchases 5,334,747 6,366,795 13,489,346 12,987,522 Proceeds from sales (5,191,548) (6,098,495) (13,365,766) (12,362,149) Principal collections (60,653) (22,334) (155,884) (39,037) Transfers from (to): Loans held for investment, at fair value 10,807 1,220 30,437 2,898 Receivables, net 28,884 (7,625) 61,095 (25,151) REO (Other assets) (649) (1,767) (673) (5,312) Gain (loss) on sale of loans (62,148) 1,793 (248,751) (13,006) Capitalization of advances on Ginnie Mae modifications 2,585 7,334 15,698 14,625 Increase (decrease) in fair value of loans (22,064) (5,336) (23,493) (6,025) Other 2,117 (830) 5,675 892 Ending balance (1) $ 725,218 $ 921,621 $ 725,218 $ 921,621 (1) At September 30, 2022 and 2021, the balances include $(27.8) million and $(9.3) 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 Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Beginning balance - before Valuation Allowance $ 8,138 $ 20,278 $ 15,365 $ 27,652 Proceeds from sales — (2,916) (5,160) (9,583) Principal collections (156) (415) (776) (629) Transfers from (to): Receivables, net 105 (444) (1,087) (1,160) REO (Other assets) — (22) (358) (567) Gain on sale of loans — 35 4 549 Other 81 144 180 398 Ending balance - before Valuation Allowance 8,168 16,661 8,168 16,661 Beginning balance - Valuation Allowance $ (3,813) $ (5,124) $ (4,372) $ (6,180) (Provision for) reversal of valuation allowance 44 602 81 1,582 Transfer to Liability for indemnification obligations (Other liabilities) 21 (60) 543 16 Ending balance - Valuation Allowance (3,748) (4,582) (3,748) (4,582) Ending balance, net $ 4,420 $ 12,079 $ 4,420 $ 12,079 |
Schedule of Gains on Loans Held for Sale, Net | Gain (Loss) on Loans Held for Sale, Net Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Gain (loss) on sales of loans, net MSRs retained on transfers of forward mortgage loans $ 70,225 $ 66,420 $ 176,190 $ 136,482 Gain (loss) on sale of forward mortgage loans (1) (2) (59,814) (2,601) (222,408) (25,440) Gain (loss) on sale of repurchased Ginnie Mae loans (1)(3) (116) 3,962 (9,780) 12,277 10,294 67,781 (55,998) 123,319 Change in fair value of IRLCs (17,687) (4,135) (28,854) (9,225) Change in fair value of loans held for sale (21,160) (3,491) (20,798) (3,323) Gain (loss) on economic hedge instruments (4) 48,389 780 124,613 592 Other (906) (1,233) (2,299) (3,227) $ 18,931 $ 59,702 $ 16,665 $ 108,136 (1) Realized gain (loss) on sale of loans, excluding retained MSRs. (2) Includes $22.5 million gain in the three and nine months ended September 30, 2021 related to loans purchased through the exercise of our servicer call rights with respect to certain Non-Agency trusts and sold, servicing released. (3) Activity for the nine months ended September 30, 2022 includes an $8.8 million loss during the three months ended June 30, 2022 on certain delinquent and aged loans repurchased in connection with the Ginnie Mae EBO program with an aggregated UPB of $299.7 million, net of the associated MSR fair value adjustment. (4) Excludes gains of $2.0 million and $15.4 million during the three and nine months ended September 30, 2022, respectively, and $1.5 million and $25.5 million during the three and nine months ended September 30, 2021, respectively, on inter-segment economic hedge derivatives presented within MSR valuation adjustments, net. Third-party derivatives are hedging the net exposure of MSR and pipeline, and the change in fair value of derivatives are reported within MSR valuation adjustments, net. Inter-segment derivatives are established to transfer risk and allocate hedging gains/losses to the pipeline separately from the MSR portfolio. Refer to Note 19 – Business Segment Reporting. |
Reverse Mortgages (Tables)
Reverse Mortgages (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Receivables [Abstract] | |
Schedule of Loans Held For Investment and HMBS Related Borrowings | Three Months Ended September 30, 2022 2021 Loans Held for Investment - Reverse Mortgages HMBS - Related Borrowings (2) Loans Held for Investment - Reverse Mortgages HMBS - Related Borrowings (2) Beginning balance $ 7,376,527 $ (7,155,251) $ 7,112,273 $ (6,823,911) Originations 349,095 — 494,330 — Securitization of HECM loans accounted for as a financing — (357,741) — (452,262) Additional proceeds from securitization of HECM loans and tails — (7,822) — (7,751) Repayments (principal payments received) (326,320) 326,323 (449,236) 446,277 Transfers to: Loans held for sale, at fair value (6,541) — (1,220) — Receivables, net (16,727) — (84) — Other assets (108) — (121) — Change in fair value included in earnings (3) 19,557 (13,894) (55,216) 55,083 Ending balance $ 7,395,483 $ (7,208,385) $ 7,100,726 $ (6,782,564) Securitized loans (pledged to HMBS-Related Borrowings) $ 7,267,982 $ (7,208,385) $ 6,874,025 $ (6,782,564) Unsecuritized loans 127,501 226,701 Total $ 7,395,483 $ 7,100,726 Nine Months Ended September 30, 2022 2021 Loans Held for Investment - Reverse Mortgages HMBS - Related Borrowings (2) Loans Held for Investment - Reverse Mortgages HMBS - Related Borrowings (2) Beginning balance $ 7,199,762 $ (6,885,022) $ 6,997,127 $ (6,772,711) Originations 1,493,951 — 1,214,772 — Securitization of HECM loans accounted for as a financing (incl. realized fair value changes) — (1,507,617) — (1,119,742) Additional proceeds from securitization of HECM loans and tails — (30,124) — (34,918) Acquisition (1) 211,258 (209,057) — — Repayments (principal payments received) (1,321,442) 1,319,811 (1,170,245) 1,161,609 Transfers to: Loans held for sale, at fair value (26,187) — (2,898) — Receivables, net (66,121) — (169) — REO (Other assets) (240) — (316) — Change in fair value (3) (95,498) 103,624 62,455 (16,802) Ending balance $ 7,395,483 $ (7,208,385) $ 7,100,726 $ (6,782,564) (1) During the three months ended March 31, 2022, we purchased a reverse mortgage servicing portfolio of HECM loans securitized in Ginnie Mae pools. As the Ginnie Mae HMBS program does not qualify for sale accounting, the transaction conveyed the HECM loans and associated HMBS-related borrowings to us. We have accounted for this transaction as a secured financing, as a purchase of loans held for investment and assumption of an HMBS securitization liability for the obligation to Ginnie Mae. (2) Represents amounts due to the holders of beneficial interests in Ginnie Mae guaranteed HMBS that did not qualify for sale accounting treatment of HECM loans. Under this accounting treatment, the HECM loans securitized with Ginnie Mae remain on our consolidated balance sheets and the proceeds from the sale are recognized as a financing liability, which is recorded at fair value consistent with the related HECM loans. The beneficial interests in Ginnie Mae guaranteed HMBS have no maturity dates, and the borrowings mature as the related loans are repaid. The interest rate is the pass-through rate of the loans less applicable margin. See Note 2 – Securitizations and Variable Interest Entities (3) See further breakdown in the table below. |
Schedule of Reverse Mortgage Revenue, Net | Reverse Mortgage Revenue, net Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Gain on new originations (1) $ 9,299 $ 12,900 $ 42,642 $ 46,170 Change in fair value of securitized loans held for investment and HMBS-related borrowings, net (3,636) (13,033) (34,517) (517) Change in fair value included in earnings, net (2) 5,663 (133) 8,125 45,653 Loan fees and other 1,222 5,168 9,254 10,509 $ 6,885 $ 5,035 $ 17,379 $ 56,162 (1) Includes the changes in fair value of newly originated loans held for investment in the period through securitization date. (2) See breakdown between loans held-for-investment and HMBS - related borrowings in the table above. |
Advances (Tables)
Advances (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Advances [Abstract] | |
Schedule of Advances Paid on Behalf of Borrowers or on Foreclosed Properties | September 30, 2022 December 31, 2021 Principal and interest $ 224,684 $ 228,041 Taxes and insurance 279,502 381,025 Foreclosures, bankruptcy, REO and other 144,473 170,385 648,660 779,451 Allowance for losses (6,199) (7,018) Advances, net $ 642,461 $ 772,433 |
Schedule of Activity in Advances | The following table summarizes the activity in net advances: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Beginning balance - before Allowance for Losses $ 653,768 $ 768,864 $ 779,451 $ 834,512 Acquisition of advances in connection with the purchase of MSRs — — — 4,495 New advances 153,193 181,567 540,467 565,284 Sales of advances (1,643) (80) (2,473) (328) Collections of advances and other (1) (156,658) (204,078) (668,785) (657,690) Ending balance - before Allowance for Losses 648,660 746,273 648,660 746,273 Beginning balance - Allowance for Losses $ (6,601) $ (6,891) $ (7,018) $ (6,273) Provision expense (1,965) (1,581) (5,841) (5,478) Net charge-offs and other 2,368 1,795 6,661 5,074 Ending balance - Allowance for Losses (6,199) (6,677) (6,199) (6,677) Ending balance, net $ 642,461 $ 739,596 $ 642,461 $ 739,596 (1) Activity for the nine months ended September 30, 2022 includes $22.6 million tax, insurance and other advances transferred during the three months ended June 30, 2022 on the repurchase of certain delinquent and aged loans in connection with the Ginnie Mae EBO program. See Note 4 – Loans Held for Sale. |
Mortgage Servicing (Tables)
Mortgage Servicing (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Transfers and Servicing [Abstract] | |
Schedule of Activity Related to MSRs - Fair Value Measurement Method | MSRs – At Fair Value Three Months Ended September 30, 2022 2021 Agency Non-Agency Total Agency Non-Agency Total Beginning balance $ 1,816,604 $ 669,075 $ 2,485,679 $ 1,408,420 $ 664,098 $ 2,072,518 Sales of MSRs 3 — 3 — — — Additions: Recognized on the sale of residential mortgage loans 70,225 — 70,225 66,420 — 66,420 Purchase of MSRs 75,461 — 75,461 36,153 — 36,153 Servicing transfers and adjustments (1) (39,052) (83) (39,135) 17 (4,723) (4,706) Changes in fair value: Changes in valuation inputs or assumptions 99,099 91,546 190,645 6,983 67,836 74,819 Realization of expected cash flows (46,891) (21,762) (68,653) (38,186) (30,758) (68,944) Ending balance $ 1,975,449 $ 738,776 $ 2,714,225 $ 1,479,807 $ 696,453 $ 2,176,260 MSRs – At Fair Value Nine Months Ended September 30, 2022 2021 Agency Non-Agency Total Agency Non-Agency Total Beginning balance $ 1,571,837 $ 678,310 $ 2,250,147 $ 578,957 $ 715,860 $ 1,294,817 Sales of MSRs (149,336) (24) (149,360) — — — Additions: Recognized on the sale of residential mortgage loans 176,190 — 176,190 136,482 — 136,482 Purchase of MSRs 159,123 — 159,123 806,469 — 806,469 Servicing transfers and adjustments (1) (24,331) (907) (25,238) 73 (6,913) (6,841) Changes in fair value: Changes in valuation inputs or assumptions 379,530 132,888 512,418 47,132 73,306 120,438 Realization of expected cash flows (137,564) (71,491) (209,055) (89,306) (85,800) (175,106) Ending balance $ 1,975,449 $ 738,776 $ 2,714,225 $ 1,479,807 $ 696,453 $ 2,176,260 (1) Servicing transfers and adjustments for the three months ended September 30, 2022 include a $39.0 million derecognition of MSRs previously sold to MAV in a transaction which did not qualify for sale accounting treatment. We derecognized the MSRs with a UPB of $2.9 billion from our balance sheet upon the sale of the MSRs by MAV to a third party in the three months ended September 30, 2022. See Note 8 — MSR Transfers Not Qualifying for Sale Accounting for further information. |
Financing Receivable, Past Due | The following table summarizes delinquency status of the loans underlying our MSRs: September 30, 2022 December 31, 2021 Delinquent loans Agency Non - Agency Total Agency Non - Agency Total 30 days 1.5 % 7.6 % 4.3 % 1.4 % 7.2 % 4.1 % 60 days 0.4 2.9 1.5 0.4 2.8 1.6 90 days or more 1.2 8.2 4.4 1.9 8.0 4.8 Total 30-60-90 days or more 3.1 % 18.7 % 10.2 % 3.7 % 18.0 % 10.5 % |
Schedule of Composition of Servicing UPB | September 30, 2022 December 31, 2021 September 30, 2021 Fair Value UPB Fair Value UPB Fair Value UPB Owned MSRs $ 1,742,978 $ 123,440,335 $ 1,422,546 $ 127,919,800 $ 1,457,347 $ 136,316,900 Rithm transferred MSRs (1) (2) 604,654 48,354,675 558,940 53,652,843 574,020 56,141,289 MAV transferred MSRs (1) 366,593 26,194,483 268,661 24,018,904 144,893 13,570,892 Total $ 2,714,225 $ 197,989,493 $ 2,250,147 $ 205,591,547 $ 2,176,260 $ 206,029,081 (1) MSRs subject to sale agreements with Rithm and MAV that do not meet sale accounting criteria. During the nine months ended September 30, 2022 , we transferred MSRs with a UPB of $7.1 billion to MAV. See Note 8 — MSR Transfers Not Qualifying for Sale Accounting. (2) At September 30, 2022, the UPB of MSRs transferred to Rithm for which title is retained by Ocwen was $11.0 billion and the UPB of MSRs transferred to Rithm for which title has passed was $37.3 billion. |
Schedule of Components of Servicing and Subservicing Fees | Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Loan servicing and subservicing fees Servicing $ 83,348 $ 103,094 $ 252,773 $ 246,363 Subservicing 18,858 2,867 53,890 8,971 MAV (1) 19,275 1,575 54,735 1,575 Rithm (1) 63,362 75,034 195,237 233,135 184,844 182,570 556,635 490,044 Ancillary income Late charges 10,559 10,656 32,317 31,335 Reverse subservicing ancillary fees 4,918 — 14,308 — Recording fees 1,819 3,726 7,693 10,579 Loan collection fees 2,644 2,858 8,463 8,568 Boarding and deboarding fees 769 1,627 4,394 6,830 Custodial accounts (float earnings) 7,521 1,234 10,307 3,547 GSE forbearance fees 219 262 583 1,334 Other, net 2,268 3,652 8,616 10,525 30,718 24,016 86,681 72,720 Total Servicing and subservicing fees $ 215,562 $ 206,585 $ 643,316 $ 562,764 (1) Includes servicing fees related to transferred MSRs and subservicing fees. See Note 8 — MSR Transfers Not Qualifying for Sale Accounting . |
MSR Transfers Not Qualifying _2
MSR Transfers Not Qualifying for Sale Accounting (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Transfers and Servicing [Abstract] | |
Schedule of Activity Related to Financing Liability - MSRs Pledged | The following tables present the activity of the pledged MSR liability recorded in connection with the MSR transfer agreements with Rithm and MAV that do not qualify for sale accounting. Three Months Ended September 30, 2022 2021 Pledged MSR Liability Original Rights to MSRs Agreements - Rithm MAV Agreements (2) Total Original Rights to MSRs Agreements - Rithm MAV Agreements (2) Total Beginning Balance $ 550,808 $ 355,530 $ 906,338 $ 535,571 $ — $ 535,571 MSR transfers — 13,420 13,420 — 132,003 132,003 Changes in fair value 71,072 18,533 89,605 63,762 (2,433) 61,329 Runoff and settlement (17,142) (9,592) (26,735) (21,100) (683) (21,783) Derecognition of financing liability(3) — (35,925) (35,925) — — — Calls (1) (84) — (84) (4,213) — (4,213) Ending Balance $ 604,654 $ 341,965 $ 946,619 $ 574,020 $ 128,887 $ 702,907 Nine Months Ended September 30, 2022 2021 Pledged MSR Liability Original Rights to MSRs Agreements - Rithm MAV Agreements (2) Total Original Rights to MSRs Agreements - Rithm MAV Agreements (2) Total Beginning Balance $ 558,940 $ 238,144 $ 797,085 $ 566,952 $ — $ 566,952 MSR transfers — 84,921 84,921 — 132,003 132,003 Changes in fair value (4) 102,606 82,329 184,935 73,706 (2,433) 71,273 Runoff and settlement (56,249) (27,504) (83,753) (59,626) (683) (60,309) Derecognition of financing liability(3) — (35,925) (35,925) — — — Calls (1) (643) — (643) (7,012) — (7,012) Ending Balance $ 604,654 $ 341,965 $ 946,619 $ 574,020 $ 128,887 $ 702,907 (1) Represents the carrying value of MSRs in connection with call rights exercised by Rithm, or by Ocwen at Rithm’s direction. Ocwen derecognizes the MSRs and the related financing liability upon collapse of the securitization. (2) The fair value of the Pledged MSR liability differs from the fair value of the associated transferred MSR asset mostly due to the portion of ancillary income that is retained by PMC (shared between PMC and MAV) and other contractual cash flows under the terms of the subservicing agreement. As the MSR sales to MAV do not achieve sale accounting, the MSR asset transferred remains on the consolidated balance sheet and the proceeds from the sale are initially recognized as a financing liability (Pledged MSR liability), which is recorded at fair value with changes in fair value reported in Pledged MSR liability expense. (3) During the three months ended September 30, 2022, we derecognized a portion of the MAV Pledged MSR liability upon sale of the related MSRs by MAV to a third party with a UPB of $2.9 billion. |
Schedule of Assets, Liabilities Related to MSR Transfer Agreements | The following table presents selected assets and liabilities recorded on our unaudited consolidated balance sheets in connection with the MSR transfer agreements with Rithm that do not qualify for sale accounting (refer to Note 9 – Receivables and Note 14 – Other Liabilities for receivables and other liabilities, respectively, related to MAV): September 30, 2022 December 31, 2021 Balance Sheet Rithm - Transferred MSRs, at fair value $ 604,654 $ 558,940 Other financing liability - Pledged MSR liability, at fair value Rithm - Original Rights to MSRs Agreements 604,654 558,940 Due from Rithm (Receivables) - Advance funding, subservicing fees and reimbursable expenses 2,245 3,781 Due to Rithm (Other liabilities) $ 80,438 $ 76,590 |
Schedule of Results of Operations in Connection With MSR Transfer Agreements that Do Not Qualify for Sale Accounting | The following tables present selected items in our unaudited consolidated statements of operations in connection with the MSR transfer agreements with Rithm and MAV that do not qualify for sale accounting. Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Statements of Operations Servicing fees Servicing fees collected on behalf of Rithm $ 63,362 $ 75,034 $ 195,237 $ 233,135 Servicing fees collected on behalf of MAV 17,844 1,001 $ 51,048 1,001 $ 81,205 $ 76,035 $ 246,284 $ 234,136 Pledged MSR liability expense Rithm (see further details below) $ 102,790 $ 93,253 $ 188,414 $ 170,914 MAV (see further details below) 28,845 (2,094) 104,202 (2,094) $ 131,635 $ 91,160 $ 292,616 $ 168,820 Rithm Pledged MSR liability expense: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Servicing fees collected on behalf of Rithm $ 63,362 $ 75,034 $ 195,237 $ 233,135 Less: Subservicing fee retained by Ocwen 17,828 21,475 55,966 67,987 Net servicing fees remitted to Rithm 45,534 53,559 139,271 165,148 Less: Reduction (increase) in Pledged MSR liability Changes in fair value due to valuation inputs or assumptions - Original Rights to MSRs Agreements (71,072) (63,762) (102,606) (73,706) Runoff and settlement - Original Rights to MSRs Agreements 17,142 21,100 56,249 59,627 Other (3,326) 2,968 (2,786) 8,313 Pledged MSR liability expense - Rithm $ 102,790 $ 93,253 $ 188,414 $ 170,914 MAV Pledged MSR liability expense: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Servicing fees collected on behalf of MAV $ 17,844 $ 1,001 $ 51,048 $ 1,001 Less: Subservicing fee retained by Ocwen 2,313 178 6,678 178 Net servicing fees remitted to MAV 15,531 823 44,370 823 Less: Reduction (increase) in Pledged MSR liability Changes in fair value due to valuation inputs or assumptions (19,770) 2,433 (83,566) 2,433 Runoff and settlement (1) 6,472 683 24,384 683 Other (16) (199) (650) (199) Pledged MSR liability expense - MAV $ 28,845 $ (2,094) $ 104,202 $ (2,094) (1) Includes $3.1 million expense recognized during the three months ended September 30, 2022, representing the fair value of the MSRs in excess of the Pledged MSR Liability derecognized upon the sale of the related MSRs by MAV to a third party. |
Receivables (Tables)
Receivables (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Receivables [Abstract] | |
Schedule of Receivables | September 30, 2022 December 31, 2021 Servicing-related receivables: Government-insured loan claims - Forward $ 70,089 $ 90,603 Government-insured loan claims - Reverse 48,840 39,895 Due from custodial accounts 29,900 7,777 Receivable from sale of MSRs (holdback) 7,794 — Servicing fees 7,033 6,662 Reimbursable expenses 6,770 6,056 Subservicing fees and reimbursable expenses - Due from Rithm 2,245 3,781 Subservicing fees, reimbursable expenses and other - Due from MAV 1,594 4,933 Other 948 1,223 175,213 160,930 Income taxes receivable 27,815 56,776 Due from MAV 432 990 Other receivables 4,542 3,760 208,002 222,456 Allowance for losses (37,164) (41,749) $ 170,838 $ 180,707 |
Schedule of Changes in Allowance For Losses | Allowance for Losses - Government-Insured Loan Claims Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Beginning balance $ 39,751 $ 41,216 $ 41,495 $ 38,339 Provision 3,319 2,990 8,816 10,526 Charge-offs and other, net (6,577) (3,141) (13,818) (7,800) Ending balance $ 36,493 $ 41,065 $ 36,493 $ 41,065 |
Investment in Equity Method I_2
Investment in Equity Method Investee and Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investment in equity method investee | We account for our 15% investment in MAV Canopy under the equity method. Our investment activity may be summarized as follows: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Beginning balance $ 38,821 $ 11,878 $ 23,297 $ — Capital contributions 17,250 6,984 33,750 18,512 Capital distributions (15,531) — (32,442) — Earnings distributions (5,175) — (5,175) — Earnings of equity method investee (1) 3,346 932 19,281 1,282 Ending balance $ 38,711 $ 19,794 $ 38,711 $ 19,794 (1) Note that MAV Canopy accounts for its MSR portfolio under the fair value option. |
Other Assets (Tables)
Other Assets (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Other Assets [Abstract] | |
Schedule of Other Assets | September 30, 2022 December 31, 2021 Contingent loan repurchase asset $ 249,755 $ 403,740 Derivative margin deposit 26,104 2,024 Derivatives, at fair value 24,760 21,675 Prepaid expenses 20,791 21,498 Intangible assets, net (net of accumulated amortization of $4.1 million and $0.7 million) 18,622 14,335 REO 9,968 10,075 Prepaid lender fees, net 7,872 7,150 Prepaid representation, warranty and indemnification claims - Agency MSR sale 5,173 15,173 Deferred tax asset, net 3,323 3,329 Security deposits 900 1,174 Other 4,022 7,077 $ 371,290 $ 507,250 |
Other Financing Liabilities (Ta
Other Financing Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Financing Liabilities | The following table presents financing liabilities carried at fair value. which include transferred MSR liabilities recorded in connection with MSR transfers that do not qualify for sale accounting, liabilities of consolidated mortgage-backed securitization trusts and MSR excess servicing spread (ESS) financing liability carried at fair value. Outstanding Balance Borrowing Type Collateral Maturity September 30, 2022 December 31, 2021 Original Rights to MSRs Agreements, at fair value - Rithm (1) MSRs (1) $ 604,654 $ 558,940 Pledged MSR liability, at fair value - MAV (1) MSRs (1) 341,965 238,144 946,619 797,084 Financing liability - Owed to securitization investors, at fair value: Residential Asset Securitization Trust 2003-A11 (RAST 2003-A11) (2) Loans held for investment Oct. 2033 6,802 7,879 ESS financing liability, at fair value (3) MSRs (3) N/A 36,301 — Total Other financing liabilities, at fair value $ 989,722 $ 804,963 (1) See Note 8 — MSR Transfers Not Qualifying for Sale Accounting for additional information. (2) Consists of securitization debt certificates due to third parties that represent beneficial interests in trusts that we include in our unaudited consolidated financial statements. Holders of the debt issued by the consolidated securitization trust entities have recourse only to the assets of the SPE for satisfaction of the debt and have no recourse against the assets of Ocwen. Similarly, the general creditors of Ocwen have no claim on the assets of the trusts. The certificates in the trust pay interest based on fixed rates ranging between 4.25% and 5.75% and a variable rate based on 1ML plus applicable margin, and include principal-only certificates that are not entitled to receive distributions of interest. The maturity of the certificates occurs upon maturity of the loans held by the trust. |
Borrowings (Tables)
Borrowings (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Match Funded Liabilities | Advance Match Funded Liabilities Borrowing Capacity Outstanding Balance Borrowing Type Maturity (1) Amort. Date (1) Total Available (2) September 30, 2022 December 31, 2021 Advance Receivables Backed Notes - Series 2015-VF5 (3) Aug. 2053 Aug. 2023 $ 450,000 $ 32,559 $ 417,441 $ 14,231 Advance Receivables Backed Notes, Series 2020-T1 (4) Aug. 2052 Aug. 2022 — — — 475,000 Total Ocwen Master Advance Receivables Trust (OMART) 450,000 32,559 417,441 489,231 Ocwen GSE Advance Funding (OGAF ) - Advance Receivables Backed Notes, Series 2015-VF1 (5) Aug. 2053 Aug. 2023 50,000 11,208 38,792 23,065 EBO Advance facility (6) May 2026 NA 20,000 18,781 $ 1,219 $ — Total Servicing Advance Financing Facilities $ 520,000 $ 62,548 $ 457,452 $ 512,297 Weighted average interest rate (7) 5.47 % 1.54 % (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. After the amortization date for each note, 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) The committed borrowing capacity under the OMART and OGAF facilities is available to us provided that we have sufficient eligible collateral to pledge. At September 30, 2022, none of the available borrowing capacity of the OMART and OGAF advance financing notes could be used based on the amount of eligible collateral. (3) Interest is computed based on the lender’s cost of funds plus applicable margin. Effective August 15, 2022, we extended the amortization date of Series 2015-VF5 variable funding notes to August 14, 2023, increased the borrowing capacity from $80.0 million to $450.0 million and modified the interest rate margins. (4) We voluntarily repaid the outstanding balance of the Series 2020-T1 term notes at the amortization date in August 2022 and replaced with variable funding notes. See (3) above. The range of interest rates on the individual classes of the repaid notes was between 1.28% to 5.42%. (5) Interest is computed based on the lender’s cost of funds plus applicable margin. On January 31, 2022, we amended the Ocwen Freddie Advance Funding (OFAF) advance facility to include Fannie Mae advances as eligible collateral and renamed the facility Ocwen GSE Advance Funding (OGAF). On August 26, 2022, the amortization date of the facility was extended to August 25, 2023, the committed borrowing capacity was increased from $40.0 million to $50.0 million and the interest rate margin was modified. (6) On May 2, 2022, we entered into a loan and security agreement and issued a $1.7 million promissory note to the lender. The facility has total uncommitted borrowing capacity of $20.0 million to finance the acquisition of advances in connection with the early buyout of certain fixed-rate, fully-amortizing FHA-insured residential mortgage loans, at an interest rate of 1M Term Secured Overnight Financing Rate ( SOFR) plus applicable margin. At September 30, 2022, none of the available borrowing capacity of the facility could be used based on the amount of eligible collateral. (7) The weighted average interest rate, excluding the effect of the amortization of prepaid lender fees, is computed using the outstanding balance of each respective note and its interest rate at the financial statement date. At September 30, 2022 and December 31, 2021, the balance of unamortized prepaid lender fees was $2.4 million and $1.3 million, respectively, and are included in Other assets in our consolidated balance sheets. |
Schedule of Mortgage Loan Warehouse, MSR Financing Facilities and SSTL | Mortgage Loan Warehouse Facilities Available Borrowing Capacity Outstanding Balance Borrowing Type Collateral Maturity Un-committed Committed (1) September 30, 2022 December 31, 2021 Master repurchase agreement (2) Loans held for sale (LHFS), Receivables and REO Aug. 2023 $ 86,097 $ — $ 88,903 $ 109,437 Master repurchase agreement (3) LHFS and Loans Held for Investment (LHFI) Dec. 2022 250,000 6,797 193,203 160,882 Master repurchase agreement (4) LHFS N/A 50,000 — — — Participation agreement (5) LHFS June 2023 250,000 — — 45,186 Master repurchase agreement (5) LHFS and LHFI June 2023 — 45,156 127,844 1,766 Master repurchase agreement LHFS June 2023 — 1,000 — — Mortgage warehouse agreement (6) LHFS and LHFI Mar. 2023 — 34,090 15,910 11,792 Mortgage warehouse agreement (7) LHFS and LHFI Mar. 2023 171,659 — 32,341 87,813 Mortgage warehouse agreement (8) LHFS and Receivables (8) 205,945 — 24,055 192,023 Master repurchase agreement (9) LHFS (9) — — — 459,344 Loan and security agreement (10) LHFS and Receivables Mar. 2023 — 14,924 35,076 16,834 Master repurchase agreement (11) LHFS Apr. 2023 197,774 — 302,226 — Total mortgage loan warehouse facilities $ 1,211,475 $ 101,968 $ 819,557 $ 1,085,076 Weighted average interest rate (12) 4.36 % 2.61 % (1) Of the borrowing capacity on mortgage loan warehouse facilities extended on a committed basis, none of the available borrowing capacity could be used at September 30, 2022 based on the amount of eligible collateral that could be pledged. (2) The maximum borrowing under this agreement is $175.0 million, of which $50.0 million is available on a committed basis and the remainder is available at the discretion of the lender. On June 29, 2022, the interest rate was modified from 1ML plus applicable margin to 1M Term SOFR plus applicable margin. On July 29, 2022, the total maximum borrowing under this agreement was reduced from $275.0 million to $175.0 million. The borrowing available on a committed basis was reduced to $50.0 million and uncommitted capacity was increased to $125.0 million. On August 31, 2022, the maturity date of the facility was extended to August 30, 2023 and the applicable interest rate margins were modified. (3) The maximum borrowing under this agreement is $450.0 million, of which $200.0 million is available on a committed basis and the remainder is available on an uncommitted basis. The interest rate for this facility is 1ML plus applicable margin. (4) The lender provides financing for up to $50.0 million at the discretion of the lender. The agreement has no stated maturity dat e. Interest on this facility is based on the SOFR. T he interest rate for this facility is SOFR plus applicable margin, with a SOFR floor. (5) On August 11, 2022, the uncommitted borrowing capacity under the participation agreement of $150.0 million was temporarily increased to $200.0 million and permanently increased to $250.0 million on September 16, 2022. On June 23, 2022, the maturity date was extended to June 22 2023 and the interest rate on the participation agreement was modified to the greater of the stated interest rate of the mortgage loans less an agreed upon servicing fee percentage or the 1M Term SOFR, plus the applicable margin. The previous interest rate was the stated interest rate of the mortgage loans, less applicable margin with an interest rate floor for new originations. On June 23, 2022, the committed borrowing capacity under the repurchase agreement was increased from $100.0 million to $173.0 million. Also on June 23, 2022, the maturity date was extended to June 22, 2023 and the interest rate was modified to 1M Term SOFR plus applicable margin, with an interest rate floor for Ginnie Mae modifications, Ginnie Mae buyouts and RMBS bond clean-up loans. The previous interest rate was the stated interest rate of the mortgage loans, less applicable margin with an interest rate floor for new originations and less applicable margin with an interest rate floor for Ginnie Mae modifications, Ginnie Mae buyouts and RMBS bond clean-up loans. The participation and repurchase agreements allow the lender to acquire a 100% beneficial interest in the underlying mortgage loans. (6) Under this agreement, the lender provides financing for up to $50.0 million on a committed basis. The interest rate for this facility was modified to 1M Term SOFR plus applicable margin with an interest rate floor. On January 14, 2022, the maturity date of this facility was extended to March 16, 2022 when it was further extended to March 16, 2023. (7) Under this agreement, t he lender provides financing for up to $204.0 million on an uncommitted basis. On February 20, 2022, the interest rate for this facility was modified to 1M Term SOFR plus applicable margin, with an interest rate floor. On June 16, 2022, the maturity date of the facility was extended to March 16, 2023. (8) The total borrowing capacity of this facility, all of which is uncommitted, was increased from $200.0 million to $250.0 million on January 5, 2022. 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 e ach transaction date and is based on the interest rate and type of the collat eral. On May 2, 2022, $20.0 million of the uncommitted capacity of this facility was assigned to a new EBO advance facility. (9) This repurchase agreement provides borrowing at our discretion up to a certain maximum amount of capacity on a rolling 30-day committed basis. This facility is structured as a gestation repurchase facility whereby dry Agency mortgage loans are transferred to a trust which issues a trust certificate that is pledged as the collateral for the borrowings. See Note 2 – Securitizations and Variable Interest Entities for additional information. Each certificate is renewed monthly and the interest rate for this facility is 1ML plus applicable margin. During first half of 2022, we voluntarily reduced the trust certificates by $325.0 million and by an additional $125.0 million during the third quarter of 2022. (10) This revolving facility agreement provides up to $50.0 million of committed borrowing capacity secured by eligible HECM loans that are active buyouts (ABO), as defined in the agreement. On April 29, 2022, the maturity date was extended to March 16, 2023 and the interest rate was modified from Prime Rate plus applicable margin (with an interest rate floor) to 1M Term SOFR plus applicable margin, with an interest rate floor. (11) On April 11, 2022, we entered into a warehouse line (master repurchase agreement) with a total borrowing capacity of $350.0 million, of which $100.0 million is committed, to finance loans held for sale and loans held for investment at an interest rate of daily simple SOFR plus applicable margin. On August 11, 2022, we temporarily increased the uncommitted capacity from $250.0 million to $350.0 million, with an additional temporary increase to $400.0 million on September 11, 2022 extended through November 9, 2022. (12) 1ML was 3.14% and 0.10% at September 30, 2022 and December 31, 2021, respectively. Prime Rate was 3.25% at December 31, 2021, 1M Term SOFR was 3.04% and 0.05% at September 30, 2022 and December 31, 2021, respectively. The weighted average interest rate excludes the effect of the amortization of prepaid lender fees. At September 30, 2022 and December 31, 2021, unamortized prepaid lender fees were $0.9 million and $1.2 million, respectively, and are included in Other assets in our consolidated balance sheets. MSR financing facilities, net Available Borrowing Capacity Outstanding Balance Borrowing Type Collateral Maturity Un-committed Committed (1) September 30, 2022 December 31, 2021 Agency MSR financing facility (2) MSRs June 2023 $ — $ 37,713 $ 412,287 $ 317,523 Ginnie Mae MSR financing facility (3) MSRs, Advances Feb. 2023 33,255 — 141,745 131,694 Ocwen Excess Spread-Collateralized Notes, Series 2019/2022-PLS1 (4) MSRs Feb. 2025 — — 61,752 41,663 Secured Notes, Ocwen Asset Servicing Income Series Notes, Series 2014-1 (5) MSRs Feb. 2028 — — 34,663 39,529 Agency MSR financing facility - revolving loan (6) MSRs June 2026 — 7,929 277,071 277,071 Agency MSR financing facility - term loan (6) MSRs June 2023 — — 94,178 94,178 Total MSR financing facilities $ 33,255 $ 45,642 $ 1,021,696 901,658 Unamortized debt issuance costs - PLS Notes and Agency MSR financing - term loan (7) (1,090) (898) Total MSR financing facilities, net $ 1,020,606 $ 900,760 Weighted average interest rate (8) (9) 5.96% 3.71% (1) Of the borrowing capacity on MSR financing facilities extended on a committed basis, $28.1 million of the available borrowing capacity could be used at September 30, 2022 based on the amount of eligible collateral that could be pledged. (2) 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 June 30, 2022, the maturity date was extended to June 30, 2023, the maximum amount which we may borrow pursuant to the repurchase agreements was increased to $450.0 million (from $350.0 million) on a committed basis and the interest rate was modified from 1ML plus applicable margin to 1M Term SOFR plus applicable margin. See Note 2 – Securitizations and Variable Interest Entities for additional information. We are subject to daily margining requirements under the terms of the facility. 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. (3) In connection with this facility, PMC entered into a repurchase agreement pursuant to which PMC has sold a participation certificate representing certain economic interests in the Ginnie Mae MSRs and servicing advances and has agreed to repurchase such participation certificate at a future date at the repurchase price set forth in the repurchase agreement. PMC’s obligations under this facility are secured by a lien on the related Ginnie Mae MSRs and servicing advances. Ocwen guarantees the obligations of PMC under the facility. See (2) above regarding daily margining requirements. On January 31, 2022, the maturity date of this facility was extended to February 28, 2022. On February 28, 2022, the maturity date was extended to February 28, 2023, the borrowing capacity was increased from $150.0 million to $175.0 million ($50.0 million available on a committed basis) and the interest rate was modified to adjusted daily simple SOFR plus applicable margin (with an adjusted SOFR floor). (4) 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 a fixed interest rate of 5.07%. On March 15, 2022, we replaced the existing notes with a new series of notes (Series 2022-PLS1) at an initial principal amount of $75.0 million and a fixed interest rate of 5.114%. The principal balance amortizes in accordance with a predetermined schedule subject to modification under certain events, with a final payment due in February 2025. See Note 2 – Securitizations and Variable Interest Entities for additional information. (5) OASIS noteholders are entitled to receive a monthly payment equal to the sum of: (a) 21 basis points of the UPB of the reference pool of Freddie Mac mortgages; (b) any termination payment amounts; (c) any excess refinance amounts; and (d) the note redemption amounts, each as defined in the indenture supplement for the notes. Monthly amortization of the liability is estimated using the proportion of monthly projected service fees on the underlying MSRs as a percentage of lifetime projected fees, adjusted for the term of the notes. (6) This facility includes a $94.2 million ($135.0 million original balance) term loan and a $285.0 million revolving loan secured by a lien on certain of PMC’s Agency MSRs. See (2) above regarding daily margining requirements. On September 1, 2022, the interest rate for this facility was modified from 1-year swap rate plus applicable margin to 1M Term SOFR plus applicable margin, with an interest rate floor. (7) At September 30, 2022 and December 31, 2021, unamortized debt issuance costs included $1.1 million and $0.9 million, respectively, on the PLS Notes and the Agency MSR financing facility - term loan. At September 30, 2022 and December 31, 2021, unamortized prepaid lender fees related to revolving type MSR financing facilities were $4.6 million and $4.7 million, respectively, and are included in Other assets in our consolidated balance sheets. (8) Weighted average interest rate at, excluding the effect of the amortization of debt issuance costs and prepaid lender fees. (9) 1ML was 3.14% and 0.10% at September 30, 2022 and December 31, 2021, respectively. The 1-year swap rate was 0.19% at December 31, 2021. 1M Term SOFR was 3.04% and 0.05% at September 30, 2022 and December 31, 2021, respectively. |
Schedule of Senior Notes | Senior Notes Interest Rate (1) Maturity Outstanding Balance September 30, 2022 December 31, 2021 PMC Senior Secured Notes 7.875% March 2026 $ 375,000 $ 400,000 OFC Senior Secured Notes (due to related parties) 12% paid in cash or 13.25% paid-in-kind (see below) March 2027 285,000 285,000 Principal balance 660,000 685,000 Discount (2) PMC Senior Secured Notes (1,415) (1,758) OFC Senior Secured Notes (3) (49,095) (54,176) (50,510) (55,934) Unamortized debt issuance costs (2) PMC Senior Secured Notes (4,578) (5,687) OFC Senior Secured Notes (7,782) (8,582) (12,360) (14,269) $ 597,129 $ 614,797 (1) Excluding the effect of the amortization of debt issuance costs and discount. (2) The discount and debt issuance costs are amortized to interest expense through the maturity of the respective notes. (3) Includes original issue discount (OID) and additional discount related to the concurrent issuance of warrants and common stock. See below for additional information. |
Schedule of Redemption Prices | On or after March 15, 2023, PMC may redeem some or all of the PMC Senior Secured Notes at its option at the following redemption prices, plus accrued and unpaid interest, if any, on the notes redeemed to, but excluding, the redemption date if redeemed during the 12-month period beginning on March 15th of the years indicated below: Redemption Year Redemption Price 2023 103.938 % 2024 101.969 2025 and thereafter 100.000 |
Schedule of Assets Held as Collateral Related to Secured Borrowings | Our assets held as collateral for secured borrowings and other unencumbered assets which may be subject to a lien under various collateralized borrowings are as follows at September 30, 2022: Assets Pledged Collateralized Borrowings Unencumbered Assets (1) Cash $ 226,570 $ — $ — $ 226,570 Restricted cash 45,269 45,269 — — Loans held for sale 729,638 685,428 683,430 44,210 Loans held for investment - securitized (2) 7,267,982 7,267,982 7,208,385 — Loans held for investment - unsecuritized 127,501 94,884 88,021 32,617 MSRs (3) 1,742,978 1,750,870 1,028,262 4,578 Advances, net 642,461 545,520 487,186 96,941 Receivables, net 170,838 40,580 44,211 130,259 REO 9,968 4,539 3,895 5,429 Total (4) $ 10,963,206 $ 10,435,071 $ 9,543,390 $ 540,605 (1) Certain assets are pledged as collateral to the $375.0 million PMC Senior Secured Notes and $285.0 million OFC Senior Secured (second lien) Notes. (2) Reverse mortgage loans and real estate owned are pledged as collateral to the HMBS beneficial interest holders, and are not available to satisfy the claims of our creditors. Ginnie Mae, as guarantor of the HMBS, is obligated to the holders of the HMBS in an instance of PMC’s default on its servicing obligations, or if the proceeds realized on HECMs are insufficient to repay all outstanding HMBS related obligations. Ginnie Mae has recourse to PMC in connection with certain claims relating to the performance and obligations of PMC as both issuer of HMBS and servicer of HECMs underlying HMBS. (3) Excludes MSRs transferred to Rithm and MAV and associated Pledged MSR liability recorded as sale accounting criteria are not met. Pledged assets exceed the MSR asset balance due to the netting of certain PLS MSR portfolios with negative and positive fair values as eligible collateral. |
Schedule of Second Lien Priority on Specified Assets Carried on Balance Sheet | The OFC Senior Secured Notes due 2027 have a second lien priority on specified assets carried on PMC’s balance sheet, as defined under the OFC Senior Secured Note Agreement and listed in the table below, and have a priority lien on the following assets: investments by OFC in subsidiaries not guaranteeing the $375.0 million PMC Senior Secured Notes, including PHH and MAV; cash and investment accounts at OFC; and certain other assets, including receivables. September 30, 2022 Specified net servicing advances $ 116,980 Specified deferred servicing fee 21,591 Specified MSR value less borrowings 796,556 Specified unrestricted cash balances 146,849 Specified advance facility reserves 10,064 Specified loan value 84,754 Specified residual value 79,513 Total (PMC) $ 1,256,305 |
Other Liabilities (Tables)
Other Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Other Liabilities | September 30, 2022 December 31, 2021 Contingent loan repurchase liability $ 249,755 $ 403,740 Due to Rithm - Advance collections, servicing fees and other 80,438 76,590 Other accrued expenses 80,138 104,931 Liability for indemnification obligations 52,489 51,243 Checks held for escheat 49,527 44,866 Accrued legal fees and settlements 47,102 43,990 Servicing-related obligations 37,583 32,366 Derivative related payables 24,894 3,714 Derivatives, at fair value 23,704 3,080 MSR purchase price holdback 16,402 32,620 Lease liability 15,836 16,842 Liability for uncertain tax positions 11,587 14,730 Accrued interest payable 9,206 11,998 Liability for unfunded India gratuity plan 5,885 6,263 Due to MAV 3,649 2,134 Liability for unfunded pension obligation 3,115 4,183 Other 9,802 14,224 $ 721,112 $ 867,514 |
Derivative Financial Instrume_2
Derivative Financial Instruments and Hedging Activities (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Activity | The table below summarizes the fair value, notional and maturity of our derivative instruments. 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, 2022 and 2021. September 30, 2022 December 31, 2021 Maturities Notional Fair value Maturities Notional Fair value Derivative Assets (Other assets) Forward sales of reverse loans Oct. 2022 $ 40,000 $ 173 Feb. 2022 $ 175,000 $ 364 Forward loans IRLCs N/A — — Jan. - Apr. 2022 1,021,978 16,074 Reverse loans IRLCs Oct. 2022 19,224 610 Jan. 2022 63,327 2,011 TBA forward MBS trades Oct. - Dec. 2022 1,448,000 23,977 Jan. - Mar. 2022 587,000 946 Interest rate swap futures N/A — — Mar. 2022 792,500 1,734 Interest rate option contracts N/A — — Jan. 2022 125,000 547 Total $ 1,507,224 $ 24,760 $ 2,764,805 $ 21,675 Derivative Liabilities (Other liabilities) Forward loans IRLCs Nov. 2022 - Feb. 2023 $ 1,289,388 $ (12,800) N/A $ — $ — Forward sales of reverse loans Oct. 2022 30,000 (85) N/A — — TBA forward MBS trades Oct. - Dec. 2022 418,000 (2,208) Jan. - Mar. 2022 1,195,000 (1,185) Interest rate swap futures Dec. 2022 440,000 (7,274) N/A — — Interest rate option contracts Oct. 2022 500,000 (1,172) Feb. 2022 450,000 (824) Other N/A 11,907 (164) N/A — (1,070) Total $ 2,689,295 $ (23,704) $ 1,645,000 $ (3,080) The table below summarizes the net gains and losses of our derivative instruments recognized in our consolidated statement of operations. Three Months Ended September 30, Nine Months Ended September 30, Financial Statement Line Gain (loss) 2022 2021 2022 2021 Derivative Instruments Forward loans IRLCs $ (17,953) $ (3,743) $ (28,834) $ (8,817) Gain on loans held for sale, net Reverse loans IRLCs (250) 327 (1,421) 141 Reverse mortgage revenue, net Reverse loans IRLCs (Equity IQ loans) 266 — (20) — Gain on loans held for sale, net TBA trades (economically hedging forward pipeline trades and EBO pipeline) 48,389 780 124,613 592 Gain on loans held for sale, net (Economic hedge) TBA trades (economically hedging reverse pipeline trades) (131) — (209) — Reverse mortgage revenue, net Interest rate swap futures, TBA trades and interest rate option contracts (23,814) (12,607) (107,490) (3,310) MSR valuation adjustments, net Forward sales of Reverse loans (478) 274 (276) 471 Reverse mortgage revenue, net Other — (423) — (439) Gain on loans held for sale, net Other (31) — 906 — Other, net Total $ 5,998 $ (15,392) $ (12,730) $ (11,362) |
Interest Expense (Tables)
Interest Expense (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Other Income and Expenses [Abstract] | |
Schedule of Components of Interest Expense | Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 OFC Senior Secured Notes (1) $ 10,578 $ 10,238 $ 31,461 $ 21,351 PHH and PMC senior notes 7,748 8,245 24,002 23,581 MSR financing facilities 13,839 8,623 30,206 17,950 Mortgage loan warehouse facilities 10,785 8,985 24,574 20,673 Advance match funded liabilities 5,021 2,809 10,523 11,570 SSTL — — — 2,956 Escrow 2,424 1,723 5,365 4,510 $ 50,395 $ 40,623 $ 126,131 $ 102,591 (1) Notes issued to Oaktree affiliates, inclusive of amortization of debt issuance costs and discount of $2.0 million and $5.9 million for the three and nine months ended September 30, 2022, respectively, and $1.6 million and $3.4 million for the three and nine months ended September 30, 2021, respectively. |
Basic and Diluted Earnings pe_2
Basic and Diluted Earnings per Share (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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, 2022 2021 2022 2021 Basic earnings per share Net income $ 36,939 $ 21,552 $ 105,375 $ 19,773 Weighted average shares of common stock 8,530,209 9,189,030 8,998,298 8,960,696 Basic earnings per share $ 4.33 $ 2.35 $ 11.71 $ 2.21 Diluted earnings per share Net income $ 36,939 $ 21,552 $ 105,375 $ 19,773 Weighted average shares of common stock 8,530,209 9,189,030 8,998,298 8,960,696 Effect of dilutive elements Common stock warrants 131,092 65,593 136,471 97,426 Stock option awards — — 24 — Common stock awards 205,624 147,235 161,064 161,049 Dilutive weighted average shares of common stock 8,866,925 9,401,858 9,295,857 9,270,751 Diluted earnings per share $ 4.17 $ 2.29 $ 11.34 $ 2.13 Stock options and common stock awards excluded from the computation of diluted earnings per share Anti-dilutive (1) 271,933 166,153 276,988 155,213 Market-based (2) 68,236 87,509 68,236 87,509 (1) Includes stock options 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, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information | Financial information for our segments is as follows: Three Months Ended September 30, 2022 Results of Operations Servicing Originations Corporate Items and Other Corporate Eliminations (1) Business Segments Consolidated Servicing and subservicing fees $ 214,977 $ 585 $ — $ — $ 215,562 Reverse mortgage revenue, net (3,636) 10,521 — — 6,885 Gain (loss) on loans held for sale, net (1) 154 20,746 — (1,969) 18,931 Other revenue, net 343 6,457 1,544 — 8,344 Revenue 211,838 38,309 1,544 (1,969) 249,722 MSR valuation adjustments, net (1) 89,569 3,621 — 1,969 95,159 Operating expenses (2) 86,100 33,256 22,052 — 141,408 Other (expense) income: Interest income 2,895 10,361 476 — 13,732 Interest expense (30,907) (8,931) (10,557) — (50,395) Pledged MSR liability expense (131,672) — 37 — (131,635) Earnings of equity method investee 3,346 — — — 3,346 Other (4,000) (605) (933) — (5,538) Other income (expense), net (160,338) 825 (10,977) — (170,490) Income (loss) before income taxes $ 54,969 $ 9,499 $ (31,485) $ — $ 32,983 Three Months Ended September 30, 2021 Results of Operations Servicing Originations Corporate Items and Other Corporate Eliminations (1) Business Segments Consolidated Servicing and subservicing fees $ 205,430 $ 1,155 $ — $ — $ 206,585 Reverse mortgage revenue, net (13,032) 18,067 — — 5,035 Gain on loans held for sale, net (1) 31,555 29,604 — (1,457) 59,702 Other revenue, net 303 9,947 1,529 — 11,779 Revenue 224,256 58,773 1,529 (1,457) 283,101 MSR valuation adjustments, net (1) (9,117) 1,340 — 1,457 (6,320) Operating expenses 80,849 43,966 20,621 — 145,436 Other (expense) income: Interest income 2,417 5,348 104 — 7,869 Interest expense (21,643) (6,542) (12,438) — (40,623) Pledged MSR liability expense (91,120) — (40) — (91,160) Earnings of equity method investee 932 — — — 932 Other 1,443 122 335 — 1,900 Other expense, net (107,971) (1,072) (12,039) — (121,082) Income (loss) before income taxes $ 26,319 $ 15,075 $ (31,131) $ — $ 10,263 Nine Months Ended September 30, 2022 Results of Operations Servicing Originations Corporate Items and Other Corporate Eliminations (1) Business Segments Consolidated Servicing and subservicing fees $ 641,679 $ 1,638 $ — $ — $ 643,316 Reverse mortgage revenue, net (34,517) 51,896 — — 17,379 Gain on loans held for sale, net (1) (14,015) 46,059 — (15,379) 16,665 Other revenue, net 1,107 19,999 4,978 — 26,084 Revenue 594,254 119,592 4,978 (15,379) 703,444 MSR valuation adjustments, net (1) 168,300 7,310 — 15,379 190,989 Operating expenses (2) 242,882 121,966 47,949 — 412,797 Other (expense) income: Interest income 9,946 19,942 701 — 30,590 Interest expense (76,305) (18,301) (31,525) — (126,131) Pledged MSR liability expense (292,677) — 61 — (292,616) Earnings of equity method investee 19,281 — — — 19,281 Gain (loss) on extinguishment of debt (33) — 947 — 914 Other (7,564) (1,731) (641) — (9,936) Other expense, net (347,352) (90) (30,457) — (377,898) Income (loss) before income taxes $ 172,320 $ 4,846 $ (73,428) $ — $ 103,738 Nine Months Ended September 30, 2021 Results of Operations Servicing Originations Corporate Items and Other Corporate Eliminations (1) Business Segments Consolidated Servicing and subservicing fees $ 556,927 $ 5,837 $ — $ — $ 562,764 Reverse mortgage revenue, net (511) 56,673 — — 56,162 Gain on loans held for sale, net (1) 39,206 94,471 — (25,541) 108,136 Other revenue, net 1,302 23,450 4,326 — 29,078 Revenue 596,924 180,431 4,326 (25,541) 756,140 MSR valuation adjustments, net (1) (101,755) 18,652 — 25,541 (57,562) Operating expenses 247,228 121,877 65,768 — 434,873 Other (expense) income: Interest income 4,905 10,776 312 — 15,993 Interest expense (57,861) (14,794) (29,936) — (102,591) Pledged MSR liability expense (168,847) — 27 — (168,820) Earnings of equity method investee 1,282 — — — 1,282 Gain (loss) on extinguishment of debt — — (15,458) — (15,458) Other 4,787 4 763 — 5,554 Other expense, net (215,734) (4,014) (44,292) — (264,040) Income (loss) before income taxes $ 32,207 $ 73,192 $ (105,734) $ — $ (335) (1) Corporate Eliminations includes inter-segment derivatives eliminations of $2.0 million and $15.4 million for the three and nine months ended September 30, 2022, respectively, and $1.5 million and $25.5 million for the three and nine months ended September 30, 2021, respectively, reported as Gain on loans held for sale, net with a corresponding offset in MSR valuation adjustments, net. (2) Included in Professional services expense are reimbursements received from mortgage loan investors related to prior year legal expenses and payments received following resolution of legacy litigation matters of $4.3 million (Servicing) and $25.3 million ($18.4 million Servicing and $6.9 million Corporate) during the three and nine months ended September 30, 2022, respectively. Total Assets Servicing Originations Corporate Items and Other Business Segments Consolidated September 30, 2022 $ 11,322,586 $ 731,057 $ 306,426 $ 12,360,069 December 31, 2021 $ 10,999,204 $ 823,530 $ 324,389 $ 12,147,123 September 30, 2021 $ 10,810,298 $ 865,018 $ 364,922 $ 12,040,238 Depreciation and Amortization Expense Servicing Originations Corporate Items and Other Business Segments Consolidated Three months ended September 30, 2022 Depreciation expense $ 245 $ 108 $ 2,127 $ 2,480 Amortization of debt issuance costs and discount 203 — 2,240 2,443 Amortization of intangibles 1,207 — — 1,207 Three months ended September 30, 2021 Depreciation expense $ 137 $ 77 $ 2,247 $ 2,461 Amortization of debt issuance costs and discount 129 — 2,076 2,205 Nine months ended September 30, 2022 Depreciation expense $ 669 $ 322 $ 6,658 $ 7,649 Amortization of debt issuance costs and discount 618 — 6,908 7,526 Amortization of intangibles 3,332 — — 3,332 Nine months ended September 30, 2021 Depreciation expense $ 514 $ 125 $ 6,888 $ 7,527 Amortization of debt issuance costs and discount 388 — 5,050 5,438 |
Commitments (Tables)
Commitments (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Other Commitments [Abstract] | |
Schedule of Activity Related to HMBS Repurchases | Activity with regard to HMBS repurchases, primarily MCA repurchases, are as follows: Nine Months Ended September 30, 2022 Active Inactive Total Number Amount Number Amount Number Amount Beginning balance 138 $ 35,322 448 $ 93,813 586 $ 129,135 Additions 435 115,149 154 39,118 589 154,267 Recoveries, net (1) (370) (98,782) (147) (34,732) (517) (133,514) Transfers (11) (4,791) 11 4,791 — — Changes in value — 74 — (2,787) — (2,713) Ending balance 192 $ 46,972 466 $ 100,203 658 $ 147,175 (1) 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, 2022 | |
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, 2022 2021 Beginning balance (1) $ 49,430 $ 40,374 Provision (reversal) for representation and warranty obligations 1,800 1,483 New production liability 2,299 3,227 Charge-offs and other (2) (2,730) (2,530) Ending balance (1) $ 50,798 $ 42,554 (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_3
Organization and Basis of Presentation - Narrative (Details) | Sep. 30, 2022 numberOfEmployees employee | May 03, 2021 | Dec. 21, 2020 |
Description of Business and Basis of Presentation [Line Items] | |||
Total number of employees | 5,100 | ||
MAV Canopy HoldCo I, LLC | |||
Description of Business and Basis of Presentation [Line Items] | |||
Ownership percentage | 15% | 15% | 15% |
INDIA | |||
Description of Business and Basis of Presentation [Line Items] | |||
Total number of employees | employee | 3,300 | ||
PHILIPPINES | |||
Description of Business and Basis of Presentation [Line Items] | |||
Total number of employees | 400 |
Securitizations and Variable _3
Securitizations and Variable Interest Entities - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Mar. 15, 2022 | |
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||||||
Average period to securitization | 30 days | |||||
MSRs retained | $ 70,225,000 | $ 66,420,000 | $ 176,190,000 | $ 136,482,000 | ||
Percentage of loan transferred through securitization 60 days or more past due | 2.40% | 3.60% | ||||
Threshold period past due | 60 days | 60 days | 60 days | |||
Certificates issued pledged as collateral | $ 0 | $ 0 | ||||
Ocwen Excess Spread-Collateralized Notes, Series 2019/2022-PLS1 Class A | Secured Debt | ||||||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||||||
Debt instrument, face amount | $ 100,000,000 | $ 100,000,000 | $ 75,000,000 | |||
Ginnie Mae Loans | ||||||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||||||
Percentage of loan transferred through securitization 60 days or more past due | 7.70% | 12% | ||||
Threshold period past due | 60 days | 60 days | 60 days |
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, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Transfers and Servicing [Abstract] | ||||
Proceeds received from securitizations | $ 5,227,470 | $ 5,823,765 | $ 12,925,295 | $ 12,220,596 |
Servicing fees collected | 21,577 | 16,440 | 67,154 | 43,968 |
Purchases of previously transferred assets, net of claims reimbursed | (3,500) | (6,065) | (10,324) | (16,085) |
Cash flows between transferor and transferee proceeds and payment related to transfers accounted for sales | $ 5,245,547 | $ 5,834,140 | $ 12,982,125 | $ 12,248,479 |
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, 2022 | Dec. 31, 2021 |
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||
UPB of loans transferred | $ 34,060,639 | $ 31,864,769 |
Maximum exposure to loss | 34,634,462 | 32,376,765 |
GinnieMae | ||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||
UPB of loans transferred | 6,300,000 | 5,600,000 |
Mortgage Servicing Rights - Fair Value | ||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||
Carrying value of assets | 510,427 | 360,830 |
Advances | ||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||
Carrying value of assets | $ 63,396 | $ 151,166 |
Securitizations and Variable _6
Securitizations and Variable Interest Entities - Schedule of Carrying Value of Assets and Liabilities of Loans Held for Sale Financing Facility (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||||||
Mortgage loans (Loans held for sale, at fair value) | $ 725,218 | $ 683,140 | $ 917,534 | $ 921,621 | $ 680,866 | $ 366,364 |
Variable Interest Entity, Primary Beneficiary | ||||||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||||||
Mortgage loans (Loans held for sale, at fair value) | 0 | 462,144 | ||||
Outstanding borrowings (Mortgage loan warehouse facilities) | $ 0 | $ 459,344 |
Securitizations and Variable _7
Securitizations and Variable Interest Entities - Schedule Of Carrying Value and Classification of Assets and Liabilities of Advance Financing Facilities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 |
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | |||
Debt service accounts | $ 16,074 | $ 13,271 | |
Unamortized deferred lender fees (Other assets) | 7,872 | $ 7,150 | |
Advance match funded liabilities | 457,452 | 512,297 | |
Variable Interest Entity, Primary Beneficiary | |||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | |||
Advance match funded liabilities | 456,233 | 512,297 | |
Variable Interest Entity, Primary Beneficiary | Advance match funded liabilities | |||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | |||
Match funded advances (Advances, net) | 540,142 | 587,059 | |
Debt service accounts | 10,064 | 7,687 | |
Unamortized deferred lender fees (Other assets) | 2,379 | 1,305 | |
Prepaid interest (Other assets) | 477 | 225 | |
Advance match funded liabilities | $ 456,233 | $ 512,297 |
Securitizations and Variable _8
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, 2022 | Dec. 31, 2021 | Sep. 30, 2021 |
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | |||
MSRs pledged (MSRs, at fair value) | $ 2,714,225 | $ 2,250,147 | |
Unamortized deferred lender fees (Other assets) | 7,872 | 7,150 | |
Debt service accounts | 16,074 | $ 13,271 | |
Variable Interest Entity, Primary Beneficiary | Secured Debt | Agency Mortgage Servicing Rights Financing Facility | |||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | |||
MSRs pledged (MSRs, at fair value) | 820,382 | 630,605 | |
Unamortized deferred lender fees (Other assets) | 1,716 | 1,495 | |
Debt service accounts | 103 | 104 | |
Outstanding borrowings (MSR financing facilities, net) | $ 412,287 | $ 317,523 |
Securitizations and Variable _9
Securitizations and Variable Interest Entities - Carrying Value and Classification of Assets And Liabilities of PLS Notes Facility (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 |
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | |||
MSRs pledged (MSRs, at fair value) | $ 2,714,225 | $ 2,250,147 | |
Debt service account (Restricted cash) | 16,074 | $ 13,271 | |
Unamortized deferred lender fees (Other assets) | 7,872 | 7,150 | |
Secured Debt | |||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | |||
Outstanding borrowings (MSR financing facilities, net) | 1,020,606 | 900,760 | |
Variable Interest Entity, Primary Beneficiary | Secured Debt | Ocwen Excess Spread-Collateralized Notes, Series 2019/2022-PLS1 Class A | |||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | |||
MSRs pledged (MSRs, at fair value) | 129,586 | 99,833 | |
Debt service account (Restricted cash) | 1,692 | 1,968 | |
Outstanding borrowings (MSR financing facilities, net) | 61,752 | 41,663 | |
Unamortized deferred lender fees (Other assets) | $ 884 | $ 413 |
Fair Value - Schedule of Fair V
Fair Value - Schedule of Fair Value Assets and Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Loans held for sale | ||||||
Loans held for sale, at fair value | $ 725,218 | $ 683,140 | $ 917,534 | $ 921,621 | $ 680,866 | $ 366,364 |
Financial liabilities: | ||||||
Advance match funded liabilities | 457,452 | 512,297 | ||||
Financing liabilities: | ||||||
HMBS-related borrowings | 7,208,385 | 7,155,251 | 6,885,022 | 6,782,564 | 6,823,911 | 6,772,711 |
Other financing liabilities, at fair value | 989,722 | 804,963 | ||||
Other secured borrowings: | ||||||
Mortgage loan warehouse facilities | 819,557 | 1,085,076 | ||||
MSR financing facilities | 1,020,606 | 900,760 | ||||
Senior notes: | ||||||
Total Senior notes | 597,129 | 614,797 | ||||
Derivative financial instrument assets (liabilities), net | ||||||
Derivative liabilities | 23,704 | 3,080 | ||||
Mortgage servicing rights | ||||||
MSRs | 2,714,225 | 2,485,679 | 2,250,147 | 2,176,260 | 2,072,518 | 1,294,817 |
Carrying Value | ||||||
Loans held for sale | ||||||
Total Loans held for sale | 729,638 | 928,527 | ||||
Loans held for investment | 7,402,285 | 7,207,641 | ||||
Financing liabilities: | ||||||
Other financing liabilities, at fair value | 989,722 | 804,963 | ||||
Senior notes: | ||||||
Total Senior notes | 597,129 | 614,797 | ||||
Fair Value | ||||||
Loans held for sale | ||||||
Total Loans held for sale | 729,638 | 928,527 | ||||
Loans held for investment | 7,402,285 | 7,207,641 | ||||
Financing liabilities: | ||||||
Other financing liabilities, at fair value | 989,722 | 804,963 | ||||
Senior notes: | ||||||
Total Senior notes | 544,383 | 674,927 | ||||
ESS Financing Liability | ||||||
Financing liabilities: | ||||||
Other financing liabilities, at fair value | 36,301 | 0 | ||||
Level 3 | Carrying Value | ||||||
Loans held for sale | ||||||
Loans held for sale, at fair value | 725,218 | 917,534 | ||||
Loans held for sale, at lower of cost or fair value | 4,420 | 10,993 | ||||
Loans held for investment | 7,395,483 | 7,199,762 | ||||
Advances, net | 642,461 | 772,433 | ||||
Receivables, net | 170,838 | 180,707 | ||||
Mortgage-backed securities | 0 | 1 | ||||
Financial liabilities: | ||||||
Advance match funded liabilities | 457,452 | 512,297 | ||||
Financing liabilities: | ||||||
HMBS-related borrowings | 7,208,385 | 6,885,022 | ||||
Other secured borrowings: | ||||||
Mortgage loan warehouse facilities | 819,557 | 1,085,076 | ||||
MSR financing facilities | 1,020,606 | 900,760 | ||||
Mortgage servicing rights | ||||||
MSRs | 2,714,225 | 2,250,147 | ||||
Level 3 | Carrying Value | Second Lien | ||||||
Senior notes: | ||||||
Senior secured notes | 228,122 | 222,242 | ||||
Level 3 | Fair Value | ||||||
Loans held for sale | ||||||
Loans held for sale, at fair value | 725,218 | 917,534 | ||||
Loans held for sale, at lower of cost or fair value | 4,420 | 10,993 | ||||
Loans held for investment | 7,395,483 | 7,199,762 | ||||
Advances, net | 642,461 | 772,433 | ||||
Receivables, net | 170,838 | 180,707 | ||||
Mortgage-backed securities | 0 | 1 | ||||
Financial liabilities: | ||||||
Advance match funded liabilities | 457,452 | 511,994 | ||||
Financing liabilities: | ||||||
HMBS-related borrowings | 7,208,385 | 6,885,022 | ||||
Other secured borrowings: | ||||||
Mortgage loan warehouse facilities | 819,557 | 1,085,076 | ||||
MSR financing facilities | 999,022 | 873,820 | ||||
Mortgage servicing rights | ||||||
MSRs | 2,714,225 | 2,250,147 | ||||
Level 3 | Fair Value | Second Lien | ||||||
Senior notes: | ||||||
Senior secured notes | 218,647 | 261,455 | ||||
Level 3 | Interest Rate Contract | Carrying Value | ||||||
Derivative financial instrument assets (liabilities), net | ||||||
Interest rate lock commitments | (12,190) | 18,085 | ||||
Level 3 | Interest Rate Contract | Fair Value | ||||||
Derivative financial instrument assets (liabilities), net | ||||||
Interest rate lock commitments | (12,190) | 18,085 | ||||
Level 3 | Other | Carrying Value | ||||||
Derivative financial instrument assets (liabilities), net | ||||||
Other | (164) | (1,070) | ||||
Level 3 | Other | Fair Value | ||||||
Derivative financial instrument assets (liabilities), net | ||||||
Other | (164) | (1,070) | ||||
Level 3 | ESS Financing Liability | Carrying Value | ||||||
Financing liabilities: | ||||||
Other financing liabilities, at fair value | 946,619 | 797,084 | ||||
Level 3 | ESS Financing Liability | Fair Value | ||||||
Financing liabilities: | ||||||
Other financing liabilities, at fair value | 946,619 | 797,084 | ||||
Level 3 | ESS Financing Liability | ||||||
Mortgage servicing rights | ||||||
Loans related to Ginnie Mae guaranteed securitizations | (36,301) | |||||
Level 3 | ESS Financing Liability | Carrying Value | ||||||
Financing liabilities: | ||||||
Other financing liabilities, at fair value | 36,301 | 0 | ||||
Level 3 | ESS Financing Liability | Fair Value | ||||||
Financing liabilities: | ||||||
Other financing liabilities, at fair value | 36,301 | 0 | ||||
Level 3 | Financing Liability - Owed to Securitization Investors | ||||||
Mortgage servicing rights | ||||||
Loans related to Ginnie Mae guaranteed securitizations | (6,802) | (7,289) | (7,879) | (8,004) | (8,680) | (9,770) |
Level 3 | Financing Liability - Owed to Securitization Investors | Carrying Value | ||||||
Financing liabilities: | ||||||
Other financing liabilities, at fair value | 6,802 | 7,879 | ||||
Level 3 | Financing Liability - Owed to Securitization Investors | Fair Value | ||||||
Financing liabilities: | ||||||
Other financing liabilities, at fair value | 6,802 | 7,879 | ||||
Level 3 | Loans Held for Sale - Fair Value | ||||||
Mortgage servicing rights | ||||||
Loans related to Ginnie Mae guaranteed securitizations | 30,520 | $ 41,363 | 220,940 | $ 210,752 | $ 138,842 | $ 51,072 |
Level 3 | Loans Held for Sale - Fair Value | Ginnie Mae Loans | ||||||
Mortgage servicing rights | ||||||
Loans related to Ginnie Mae guaranteed securitizations | 30,500 | 220,900 | ||||
Level 3 | Loans Held for Investment Securitization Trusts | Carrying Value | ||||||
Loans held for sale | ||||||
Loans held for investment | 6,802 | 7,879 | ||||
Level 3 | Loans Held for Investment Securitization Trusts | Fair Value | ||||||
Loans held for sale | ||||||
Loans held for investment | 6,802 | 7,879 | ||||
Level 2 | Carrying Value | ||||||
Loans held for sale | ||||||
Loans held for sale, at fair value | 725,218 | 917,534 | ||||
Corporate bonds | 211 | 211 | ||||
Senior notes: | ||||||
Senior secured notes | 369,007 | 392,555 | ||||
Level 2 | Fair Value | ||||||
Loans held for sale | ||||||
Loans held for sale, at fair value | 725,218 | 917,534 | ||||
Corporate bonds | 211 | 211 | ||||
Senior notes: | ||||||
Senior secured notes | 325,736 | 413,472 | ||||
Level 2 | Forward LHFS Trades | Carrying Value | ||||||
Derivative financial instrument assets (liabilities), net | ||||||
Derivative asset | 87 | 364 | ||||
Level 2 | Forward LHFS Trades | Fair Value | ||||||
Derivative financial instrument assets (liabilities), net | ||||||
Derivative asset | 87 | 364 | ||||
Level 2 | Option Contracts | Carrying Value | ||||||
Derivative financial instrument assets (liabilities), net | ||||||
Derivative liabilities | (1,172) | (277) | ||||
Level 2 | Option Contracts | Fair Value | ||||||
Derivative financial instrument assets (liabilities), net | ||||||
Derivative liabilities | (1,172) | (277) | ||||
Level 1 | TBA forward MBS trades | Carrying Value | ||||||
Derivative financial instrument assets (liabilities), net | ||||||
Derivative liabilities | (21,769) | 240 | ||||
Level 1 | TBA forward MBS trades | Fair Value | ||||||
Derivative financial instrument assets (liabilities), net | ||||||
Derivative liabilities | (21,769) | 240 | ||||
Level 1 | Interest Rate Swap | Carrying Value | ||||||
Derivative financial instrument assets (liabilities), net | ||||||
Derivative asset | (7,274) | 1,734 | ||||
Level 1 | Interest Rate Swap | Fair Value | ||||||
Derivative financial instrument assets (liabilities), net | ||||||
Derivative asset | $ (7,274) | $ 1,734 |
Fair Value - Schedule of Reconc
Fair Value - Schedule of Reconciliation of Changes in Fair Value of Level 3 Assets and Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Total realized and unrealized gains and (losses): | ||||
Gains (losses) on derivatives | $ 5,998 | $ (15,392) | $ (12,730) | $ (11,362) |
Forward loans IRLCs | ||||
Total realized and unrealized gains and (losses): | ||||
Gains (losses) on derivatives | (17,900) | (3,400) | (30,300) | (8,700) |
Level 3 | Loans Held for Investment - Restricted for Securitization Investors | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning balance | 7,289 | 8,680 | 7,879 | 9,770 |
Purchases, issuances, sales and settlements | ||||
Settlements | (487) | (676) | (1,077) | (1,766) |
Purchases, issuances, sales and settlements, total | (487) | (676) | (1,077) | (1,766) |
Total realized and unrealized gains and (losses): | ||||
Ending balance | 6,802 | 8,004 | 6,802 | 8,004 |
Level 3 | Financing Liability - Owed to Securitization Investors | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning balance | (7,289) | (8,680) | (7,879) | (9,770) |
Purchases, issuances, sales and settlements | ||||
Settlements | 487 | 676 | 1,077 | 1,766 |
Purchases, issuances, sales and settlements, total | 487 | 676 | 1,077 | 1,766 |
Total realized and unrealized gains and (losses): | ||||
Ending balance | (6,802) | (8,004) | (6,802) | (8,004) |
Level 3 | Loans Held for Sale - Fair Value | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning balance | 41,363 | 138,842 | 220,940 | 51,072 |
Purchases, issuances, sales and settlements | ||||
Purchases | 9,478 | 136,996 | 127,715 | 303,117 |
Sales | (16,569) | (64,032) | (308,181) | (135,088) |
Other assets | (377) | |||
Receivables, net | (1,581) | (558) | (3,350) | (1,113) |
Purchases, issuances, sales and settlements, total | (8,672) | 72,406 | (183,816) | 166,539 |
Total realized and unrealized gains and (losses): | ||||
Change in fair value included in earnings | (2,171) | (496) | (6,604) | (6,859) |
Ending balance | 30,520 | 210,752 | 30,520 | 210,752 |
Level 3 | ESS Financing Liability | ||||
Purchases, issuances, sales and settlements | ||||
Issuances | (36,241) | (36,241) | ||
Settlements | 644 | 644 | ||
Purchases, issuances, sales and settlements, total | (35,597) | (35,597) | ||
Total realized and unrealized gains and (losses): | ||||
Change in fair value included in earnings | (704) | (704) | ||
Ending balance | (36,301) | (36,301) | ||
Level 3 | Mortgage-Backed Securities | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning balance | 1,607 | 2,019 | ||
Total realized and unrealized gains and (losses): | ||||
Change in fair value included in earnings | 11 | (401) | ||
Ending balance | 1,618 | 1,618 | ||
Level 3 | IRLCs | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning balance | 5,746 | 17,437 | 18,085 | 22,706 |
Purchases, issuances, sales and settlements | ||||
Issuances | 50,912 | 184,995 | 212,764 | 446,751 |
Loans held for sale, at fair value | 17,643 | (182,783) | (36,220) | (425,169) |
Purchases, issuances, sales and settlements, total | 68,555 | 2,212 | 176,544 | 21,582 |
Total realized and unrealized gains and (losses): | ||||
Change in fair value included in earnings | (86,491) | (5,619) | (206,819) | (30,258) |
Ending balance | $ (12,190) | $ 14,030 | $ (12,190) | $ 14,030 |
Fair Value - Schedule of Signif
Fair Value - Schedule of Significant Assumptions used in Valuation (Details) | Sep. 30, 2022 year USD ($) | Dec. 31, 2021 year USD ($) |
Loans Held for Investment Reverse Mortgages | Life in years | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 4.8 | 5.7 |
Loans Held for Investment Reverse Mortgages | Weighted average prepayment speed | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 0.187 | 0.160 |
Loans Held for Investment Reverse Mortgages | Discount rate | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 0.051 | 0.026 |
Loans Held for Investment Reverse Mortgages | Minimum | Life in years | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 0.4 | 1 |
Loans Held for Investment Reverse Mortgages | Minimum | Weighted average prepayment speed | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 0.130 | 0.112 |
Loans Held for Investment Reverse Mortgages | Maximum | Life in years | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 7.2 | 8.2 |
Loans Held for Investment Reverse Mortgages | Maximum | Weighted average prepayment speed | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 0.481 | 0.366 |
Fair Value Agency Mortgage Servicing Rights | Weighted average prepayment speed | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 0.066 | 0.085 |
Fair Value Agency Mortgage Servicing Rights | Weighted average lifetime delinquency rate | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 0.014 | 0.012 |
Fair Value Agency Mortgage Servicing Rights | Discount rate | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 0.091 | 0.085 |
Fair Value Agency Mortgage Servicing Rights | Weighted average cost to service (in dollars) | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | $ | 72 | 71 |
Fair Value Non-Agency Mortgage Servicing Rights | Weighted average prepayment speed | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 0.093 | 0.121 |
Fair Value Non-Agency Mortgage Servicing Rights | Weighted average lifetime delinquency rate | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 0.103 | 0.119 |
Fair Value Non-Agency Mortgage Servicing Rights | Discount rate | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 0.106 | 0.112 |
Fair Value Non-Agency Mortgage Servicing Rights | Weighted average cost to service (in dollars) | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | $ | 193 | 205 |
HMBS-Related Borrowings | Life in years | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 4.8 | 5.7 |
HMBS-Related Borrowings | Weighted average prepayment speed | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 0.187 | 0.160 |
HMBS-Related Borrowings | Discount rate | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 0.050 | 0.025 |
HMBS-Related Borrowings | Minimum | Life in years | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 0.4 | 1 |
HMBS-Related Borrowings | Minimum | Weighted average prepayment speed | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 0.130 | 0.112 |
HMBS-Related Borrowings | Maximum | Life in years | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 7.2 | 8.2 |
HMBS-Related Borrowings | Maximum | Weighted average prepayment speed | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 0.481 | 0.366 |
Mortgage Servicing Rights Pledged | Weighted average prepayment speed | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 0.085 | 0.109 |
Mortgage Servicing Rights Pledged | Weighted average lifetime delinquency rate | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 0.072 | 0.088 |
Mortgage Servicing Rights Pledged | Discount rate | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 0.101 | 0.105 |
Mortgage Servicing Rights Pledged | Weighted average cost to service (in dollars) | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | $ | 169 | 182 |
Fair Value - Schedule of Estima
Fair Value - Schedule of Estimated Change in Fair Value of MSRs (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Fair Value Disclosures [Abstract] | |
Weighted average prepayment speeds, 10% | $ (60,457) |
Weighted average prepayment speeds, 20% | (118,162) |
Weighted average discount rate, 10% | (76,572) |
Weighted average discount rate, 20% | $ (147,150) |
Loans Held for Sale - Schedule
Loans Held for Sale - Schedule of Loans Held for Sale Fair Value (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Movement In Loans Held For Sale At Fair Value [Roll Forward] | ||||
Beginning balance | $ 683,140 | $ 680,866 | $ 917,534 | $ 366,364 |
Originations and purchases | 5,334,747 | 6,366,795 | 13,489,346 | 12,987,522 |
Proceeds from sales | (5,191,548) | (6,098,495) | (13,365,766) | (12,362,149) |
Principal collections | (60,653) | (22,334) | (155,884) | (39,037) |
Loans held for investment, at fair value | 10,807 | 1,220 | 30,437 | 2,898 |
Receivables, net | 28,884 | (7,625) | 61,095 | (25,151) |
REO (Other assets) | (649) | (1,767) | (673) | (5,312) |
Gain (loss) on sale of loans | (62,148) | 1,793 | (248,751) | (13,006) |
Capitalization of advances on Ginnie Mae modifications | 2,585 | 7,334 | 15,698 | 14,625 |
Increase (decrease) in fair value of loans | (22,064) | (5,336) | (23,493) | (6,025) |
Other | 2,117 | (830) | 5,675 | 892 |
Ending balance | $ 725,218 | $ 921,621 | 725,218 | 921,621 |
Increase (decrease) in fair value of loans held for sale | $ (27,800) | $ (9,300) |
Loans Held for Sale - Schedul_2
Loans Held for Sale - Schedule of Loans Held for Sale at Lower Cost or Fair Value, Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Movement In Loans Held For Sale At Fair Value [Roll Forward] | ||||
Beginning balance - before Valuation Allowance | $ 8,138 | $ 20,278 | $ 15,365 | $ 27,652 |
Proceeds from sales | 0 | (2,916) | (5,160) | (9,583) |
Principal collections | (156) | (415) | (776) | (629) |
Receivables, net | 105 | (444) | (1,087) | (1,160) |
REO (Other assets) | 0 | (22) | (358) | (567) |
Gain on sale of loans | 0 | 35 | 4 | 549 |
Other | 81 | 144 | 180 | 398 |
Ending balance - before Valuation Allowance | 8,168 | 16,661 | 8,168 | 16,661 |
Ending balance, net | 4,420 | 12,079 | 4,420 | 12,079 |
Valuation Allowance for Loans Held for Sale | ||||
Movement In Loans Held For Sale At Fair Value [Roll Forward] | ||||
Beginning balance - Valuation Allowance | (3,813) | (5,124) | (4,372) | (6,180) |
(Provision for) reversal of valuation allowance | 44 | 602 | 81 | 1,582 |
Transfer to Liability for indemnification obligations (Other liabilities) | 21 | (60) | 543 | 16 |
Ending balance - Valuation Allowance | $ (3,748) | $ (4,582) | $ (3,748) | $ (4,582) |
Loans Held for Sale - Schedul_3
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, 2022 | Jun. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
MSRs retained on transfers of forward mortgage loans | $ 70,225 | $ 66,420 | $ 176,190 | $ 136,482 | |
Gain (loss) on sales of loans, net | 10,294 | 67,781 | (55,998) | 123,319 | |
Change in fair value of IRLCs | (17,687) | (4,135) | (28,854) | (9,225) | |
Change in fair value of loans held for sale | (21,160) | (3,491) | (20,798) | (3,323) | |
Gain (loss) on economic hedge instruments | 48,389 | 780 | 124,613 | 592 | |
Other | (906) | (1,233) | (2,299) | (3,227) | |
Gain (loss) on loans held for sale, net | 18,931 | 59,702 | 16,665 | 108,136 | |
MSR valuation adjustments, net | 95,159 | (6,320) | 190,989 | (57,562) | |
Intersegment Eliminations | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Gain (loss) on loans held for sale, net | (1,969) | (1,457) | (15,379) | (25,541) | |
MSR valuation adjustments, net | 1,969 | 1,457 | 15,379 | 25,541 | |
Gain (loss) on Sale of Forward Mortgage Loans | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Gain (loss) on sales of loans, net | (59,814) | (2,601) | (222,408) | (25,440) | |
Financing receivable, amount purchased on delinquent and aged loans | 22,500 | ||||
Repurchased Ginnie Mae Loans | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Gain (loss) on sales of loans, net | $ (116) | $ 3,962 | $ (9,780) | $ 12,277 | |
Financing receivable, amount purchased on delinquent and aged loans | $ (8,800) | ||||
Unpaid principal balance, net of MSR fair value adjustments | $ 299,700 |
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, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Loans Held for Investment - Reverse Mortgages | ||||
Beginning balance | $ 7,376,527 | $ 7,112,273 | $ 7,199,762 | $ 6,997,127 |
Originations | 349,095 | 494,330 | 1,493,951 | 1,214,772 |
Acquisition | 211,258 | |||
Repayments (principal payments received) | (326,320) | (449,236) | (1,321,442) | (1,170,245) |
Loans held for sale, at fair value | (6,541) | (1,220) | (26,187) | (2,898) |
Receivables, net | (16,727) | (84) | (66,121) | (169) |
Other assets | (108) | (121) | (240) | (316) |
Change in fair value | 19,557 | (55,216) | (95,498) | 62,455 |
Securitized loans (pledged to HMBS-Related Borrowings) | 7,267,982 | 6,874,025 | 7,267,982 | 6,874,025 |
Unsecuritized loans | 127,501 | 226,701 | 127,501 | 226,701 |
Ending balance | 7,395,483 | 7,100,726 | 7,395,483 | 7,100,726 |
HMBS Related Borrowings | ||||
Beginning balance | (7,155,251) | (6,823,911) | (6,885,022) | (6,772,711) |
Securitization of HECM loans accounted for as a financing | (357,741) | (452,262) | (1,507,617) | (1,119,742) |
Additional proceeds from securitization of HECM loans and tails | (7,822) | (7,751) | (30,124) | (34,918) |
Acquisition | (209,057) | |||
Repayments (principal payments received) | 326,323 | 446,277 | 1,319,811 | 1,161,609 |
Change in fair value | (13,894) | 55,083 | 103,624 | (16,802) |
Ending balance | (7,208,385) | (6,782,564) | (7,208,385) | (6,782,564) |
Securitized loans (pledged to HMBS-related borrowings) | $ (7,208,385) | $ (6,782,564) | $ (7,208,385) | $ (6,782,564) |
Reverse Mortgages - Schedule _2
Reverse Mortgages - Schedule of Reverse Mortgage Revenue, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Receivables [Abstract] | ||||
Gain on new originations | $ 9,299 | $ 12,900 | $ 42,642 | $ 46,170 |
Change in fair value of securitized loans held for investment and HMBS-related borrowings, net | (3,636) | (13,033) | (34,517) | (517) |
Change in fair value included in earnings, net | 5,663 | (133) | 8,125 | 45,653 |
Loan fees and other | 1,222 | 5,168 | 9,254 | 10,509 |
Reverse mortgage revenue, net | $ 6,885 | $ 5,035 | $ 17,379 | $ 56,162 |
Advances - Schedule of Advances
Advances - Schedule of Advances Paid on Behalf of Borrowers or on Foreclosed Properties (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Advances On Behalf of Borrowers [Line Items] | ||||||
Advances, gross | $ 648,660 | $ 779,451 | ||||
Allowance for losses | (6,199) | $ (6,601) | (7,018) | $ (6,677) | $ (6,891) | $ (6,273) |
Advances, net | 642,461 | 772,433 | ||||
Principal and interest | ||||||
Advances On Behalf of Borrowers [Line Items] | ||||||
Advances, gross | 224,684 | 228,041 | ||||
Taxes and insurance | ||||||
Advances On Behalf of Borrowers [Line Items] | ||||||
Advances, gross | 279,502 | 381,025 | ||||
Foreclosures, bankruptcy, REO and other | ||||||
Advances On Behalf of Borrowers [Line Items] | ||||||
Advances, gross | $ 144,473 | $ 170,385 |
Advances - Schedule of Activity
Advances - Schedule of Activity in Advances (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Jun. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Advances [Roll Forward] | |||||
Beginning balance - before Allowance for Losses | $ 653,768 | $ 768,864 | $ 779,451 | $ 834,512 | |
Acquisition of advances in connection with the purchase of MSRs | 0 | 0 | 0 | 4,495 | |
New advances | 153,193 | 181,567 | 540,467 | 565,284 | |
Sales of advances | (1,643) | (80) | (2,473) | (328) | |
Collections of advances and other | (156,658) | (204,078) | (668,785) | (657,690) | |
Ending balance - before Allowance for Losses | 648,660 | $ 653,768 | 746,273 | 648,660 | 746,273 |
Beginning balance - Allowance for Losses | (6,601) | (6,891) | (7,018) | (6,273) | |
Provision expense | (1,965) | (1,581) | (5,841) | (5,478) | |
Net charge-offs and other | 2,368 | 1,795 | 6,661 | 5,074 | |
Ending balance - Allowance for Losses | (6,199) | (6,601) | (6,677) | (6,199) | (6,677) |
Ending balance, net | $ 642,461 | $ 739,596 | $ 642,461 | $ 739,596 | |
Ginnie Mae EBO Program | |||||
Advances [Roll Forward] | |||||
Collections of advances and other | $ (22,600) |
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, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Servicing Asset at Fair Value, Amount [Roll Forward] | ||||
Beginning balance | $ 2,485,679 | $ 2,072,518 | $ 2,250,147 | $ 1,294,817 |
Sales of MSRs | 3 | 0 | 149,360 | 0 |
Recognized on the sale of residential mortgage loans | 70,225 | 66,420 | 176,190 | 136,482 |
Purchase of MSRs | 75,461 | 36,153 | 159,123 | 806,469 |
Servicing transfers and adjustments | (39,135) | (4,706) | (25,238) | (6,841) |
Changes in fair value: | ||||
Changes in valuation inputs or assumptions | 190,645 | 74,819 | 512,418 | 120,438 |
Realization of expected cash flows | (68,653) | (68,944) | (209,055) | (175,106) |
Ending balance | 2,714,225 | 2,176,260 | 2,714,225 | 2,176,260 |
Rithm | ||||
Servicing Asset at Fair Value, Amount [Roll Forward] | ||||
Servicing transfers and adjustments | 39,000 | |||
MSR Asset Vehicle LLC | ||||
Changes in fair value: | ||||
UPB of rights to MSRs sold | 2,900,000 | 2,900,000 | ||
Fair Value Agency Mortgage Servicing Rights | ||||
Servicing Asset at Fair Value, Amount [Roll Forward] | ||||
Beginning balance | 1,816,604 | 1,408,420 | 1,571,837 | 578,957 |
Sales of MSRs | 3 | 0 | 149,336 | 0 |
Recognized on the sale of residential mortgage loans | 70,225 | 66,420 | 176,190 | 136,482 |
Purchase of MSRs | 75,461 | 36,153 | 159,123 | 806,469 |
Servicing transfers and adjustments | (39,052) | 17 | (24,331) | 73 |
Changes in fair value: | ||||
Changes in valuation inputs or assumptions | 99,099 | 6,983 | 379,530 | 47,132 |
Realization of expected cash flows | (46,891) | (38,186) | (137,564) | (89,306) |
Ending balance | 1,975,449 | 1,479,807 | 1,975,449 | 1,479,807 |
Fair Value Non-Agency Mortgage Servicing Rights | ||||
Servicing Asset at Fair Value, Amount [Roll Forward] | ||||
Beginning balance | 669,075 | 664,098 | 678,310 | 715,860 |
Sales of MSRs | 0 | 0 | 24 | 0 |
Recognized on the sale of residential mortgage loans | 0 | 0 | 0 | 0 |
Purchase of MSRs | 0 | 0 | 0 | 0 |
Servicing transfers and adjustments | (83) | (4,723) | (907) | (6,913) |
Changes in fair value: | ||||
Changes in valuation inputs or assumptions | 91,546 | 67,836 | 132,888 | 73,306 |
Realization of expected cash flows | (21,762) | (30,758) | (71,491) | (85,800) |
Ending balance | $ 738,776 | $ 696,453 | $ 738,776 | $ 696,453 |
Mortgage Servicing - Summary of
Mortgage Servicing - Summary of Delinquency Status of Loans Underlying Mortgage Servicing Rights (Details) | Sep. 30, 2022 | Dec. 31, 2021 |
Participating Mortgage Loans [Line Items] | ||
Percent of aggregate unpaid principal balance | 10.20% | 10.50% |
30 days | ||
Participating Mortgage Loans [Line Items] | ||
Percent of aggregate unpaid principal balance | 4.30% | 4.10% |
60 days | ||
Participating Mortgage Loans [Line Items] | ||
Percent of aggregate unpaid principal balance | 1.50% | 1.60% |
90 days or more | ||
Participating Mortgage Loans [Line Items] | ||
Percent of aggregate unpaid principal balance | 4.40% | 4.80% |
Fair Value Agency Mortgage Servicing Rights | ||
Participating Mortgage Loans [Line Items] | ||
Percent of aggregate unpaid principal balance | 3.10% | 3.70% |
Fair Value Agency Mortgage Servicing Rights | 30 days | ||
Participating Mortgage Loans [Line Items] | ||
Percent of aggregate unpaid principal balance | 1.50% | 1.40% |
Fair Value Agency Mortgage Servicing Rights | 60 days | ||
Participating Mortgage Loans [Line Items] | ||
Percent of aggregate unpaid principal balance | 0.40% | 0.40% |
Fair Value Agency Mortgage Servicing Rights | 90 days or more | ||
Participating Mortgage Loans [Line Items] | ||
Percent of aggregate unpaid principal balance | 1.20% | 1.90% |
Fair Value Non-Agency Mortgage Servicing Rights | ||
Participating Mortgage Loans [Line Items] | ||
Percent of aggregate unpaid principal balance | 18.70% | 18% |
Fair Value Non-Agency Mortgage Servicing Rights | 30 days | ||
Participating Mortgage Loans [Line Items] | ||
Percent of aggregate unpaid principal balance | 7.60% | 7.20% |
Fair Value Non-Agency Mortgage Servicing Rights | 60 days | ||
Participating Mortgage Loans [Line Items] | ||
Percent of aggregate unpaid principal balance | 2.90% | 2.80% |
Fair Value Non-Agency Mortgage Servicing Rights | 90 days or more | ||
Participating Mortgage Loans [Line Items] | ||
Percent of aggregate unpaid principal balance | 8.20% | 8% |
Mortgage Servicing - Schedule_2
Mortgage Servicing - Schedule of Composition of Servicing UPB (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Servicing Assets at Fair Value [Line Items] | ||||||
MSRs, at fair value | $ 2,714,225 | $ 2,485,679 | $ 2,250,147 | $ 2,176,260 | $ 2,072,518 | $ 1,294,817 |
Assets serviced | 197,989,493 | 205,591,547 | 206,029,081 | |||
UPB of loans transferred | 34,060,639 | 31,864,769 | ||||
MSR Asset Vehicle LLC | ||||||
Servicing Assets at Fair Value [Line Items] | ||||||
UPB of rights to MSRs sold | 2,900,000 | |||||
Owned MSRs | ||||||
Servicing Assets at Fair Value [Line Items] | ||||||
MSRs, at fair value | 1,742,978 | 1,422,546 | 1,457,347 | |||
Assets serviced | 123,440,335 | 127,919,800 | 136,316,900 | |||
Rithm Transferred Mortgage Servicing Rights | ||||||
Servicing Assets at Fair Value [Line Items] | ||||||
MSRs, at fair value | 604,654 | 558,940 | 574,020 | |||
Assets serviced | 48,354,675 | 53,652,843 | 56,141,289 | |||
Rithm Transferred Mortgage Servicing Rights | Rithm Transferred Mortgage Servicing Rights | ||||||
Servicing Assets at Fair Value [Line Items] | ||||||
UPB of rights to MSRs sold | 37,300,000 | |||||
MAV Transferred MSRs | ||||||
Servicing Assets at Fair Value [Line Items] | ||||||
MSRs, at fair value | 366,593 | 268,661 | 144,893 | |||
Assets serviced | 26,194,483 | $ 24,018,904 | $ 13,570,892 | |||
MAV Transferred MSRs | MSR Asset Vehicle LLC | ||||||
Servicing Assets at Fair Value [Line Items] | ||||||
UPB of rights to MSRs sold | 7,100,000 | |||||
Mortgage Servicing Rights Title Retained | Rithm Transferred Mortgage Servicing Rights | ||||||
Servicing Assets at Fair Value [Line Items] | ||||||
UPB of loans transferred | $ 11,000,000 |
Mortgage Servicing - Narrative
Mortgage Servicing - Narrative (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Transfers and Servicing [Abstract] | |||
UPB of loans acquired | $ 13,700 | $ 72,200 | |
UPB of MSRs sold | 11,100 | 18 | |
Float balances | $ 2,000 | $ 3,300 | $ 2,100 |
Mortgage Servicing - Schedule_3
Mortgage Servicing - Schedule of Components of Servicing and Subservicing Fees (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Transfers and Servicing [Abstract] | ||||
Servicing | $ 83,348 | $ 103,094 | $ 252,773 | $ 246,363 |
Subservicing | 18,858 | 2,867 | 53,890 | 8,971 |
MAV | 19,275 | 1,575 | 54,735 | 1,575 |
Rithm | 63,362 | 75,034 | 195,237 | 233,135 |
Servicing and Subservicing fees, total | 184,844 | 182,570 | 556,635 | 490,044 |
Late charges | 10,559 | 10,656 | 32,317 | 31,335 |
Reverse subservicing ancillary fees | 4,918 | 0 | 14,308 | 0 |
Recording fees | 1,819 | 3,726 | 7,693 | 10,579 |
Loan collection fees | 2,644 | 2,858 | 8,463 | 8,568 |
Boarding and deboarding fees | 769 | 1,627 | 4,394 | 6,830 |
Custodial accounts (float earnings) | 7,521 | 1,234 | 10,307 | 3,547 |
GSE forbearance fees | 219 | 262 | 583 | 1,334 |
Other, net | 2,268 | 3,652 | 8,616 | 10,525 |
Total ancillary income | 30,718 | 24,016 | 86,681 | 72,720 |
Servicing and subservicing fees | $ 215,562 | $ 206,585 | $ 643,316 | $ 562,764 |
MSR Transfers Not Qualifying _3
MSR Transfers Not Qualifying for Sale Accounting - Schedule of Activity Related to Financing Liability - MSRs Pledged (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
ESS Financing Liability | |||||
Servicing Asset at Fair Value, Amount [Roll Forward] | |||||
Beginning Balance | $ 906,338 | $ 797,085 | $ 535,571 | $ 797,085 | $ 566,952 |
MSR transfers | 13,420 | 132,003 | 84,921 | 132,003 | |
Changes in fair value | 89,605 | 61,329 | 184,935 | 71,273 | |
Runoff and settlement | (26,735) | (21,783) | (83,753) | (60,309) | |
Derecognition of financing liability | (35,925) | (35,925) | |||
Calls | (84) | (4,213) | (643) | (7,012) | |
Ending Balance | 946,619 | 702,907 | 946,619 | 702,907 | |
Changes in fair value due to valuation inputs or assumptions | 14,100 | ||||
Rithm | Original Rights to Mortgage Servicing Rights Agreements | |||||
Servicing Asset at Fair Value, Amount [Roll Forward] | |||||
Ending Balance | 604,654 | 604,654 | |||
Changes in fair value due to valuation inputs or assumptions | (71,072) | (63,762) | (102,606) | (73,706) | |
Rithm | ESS Financing Liability | Original Rights to Mortgage Servicing Rights Agreements | |||||
Servicing Asset at Fair Value, Amount [Roll Forward] | |||||
Beginning Balance | 550,808 | 558,940 | 535,571 | 558,940 | 566,952 |
MSR transfers | 0 | 0 | 0 | 0 | |
Changes in fair value | 71,072 | 63,762 | 102,606 | 73,706 | |
Runoff and settlement | (17,142) | (21,100) | (56,249) | (59,626) | |
Calls | (84) | (4,213) | (643) | (7,012) | |
Ending Balance | 604,654 | 574,020 | 604,654 | 574,020 | |
MSR Asset Vehicle LLC | |||||
Servicing Asset at Fair Value, Amount [Roll Forward] | |||||
UPB of rights to MSRs sold | 2,900,000 | 2,900,000 | |||
Changes in fair value due to valuation inputs or assumptions | (19,770) | 2,433 | (83,566) | 2,433 | |
MSR Asset Vehicle LLC | ESS Financing Liability | |||||
Servicing Asset at Fair Value, Amount [Roll Forward] | |||||
Beginning Balance | 355,530 | $ 238,144 | 0 | 238,144 | 0 |
MSR transfers | 13,420 | 132,003 | 84,921 | 132,003 | |
Changes in fair value | 18,533 | (2,433) | 82,329 | (2,433) | |
Runoff and settlement | (9,592) | (683) | (27,504) | (683) | |
Derecognition of financing liability | (35,925) | (35,925) | |||
Calls | 0 | 0 | 0 | 0 | |
Ending Balance | $ 341,965 | $ 128,887 | $ 341,965 | $ 128,887 |
MSR Transfers Not Qualifying _4
MSR Transfers Not Qualifying for Sale Accounting - Schedule of Assets, Liabilities Related to MSR Transfer Agreements (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Servicing Liabilities at Fair Value [Line Items] | ||||||
MSRs, at fair value | $ 2,714,225 | $ 2,485,679 | $ 2,250,147 | $ 2,176,260 | $ 2,072,518 | $ 1,294,817 |
Other financing liabilities, at fair value | 989,722 | 804,963 | ||||
Due from Rithm | 2,245 | 3,781 | ||||
Rithm | ||||||
Servicing Liabilities at Fair Value [Line Items] | ||||||
Due to Rithm | 80,438 | 76,590 | ||||
Rithm | Transferred MSRs, at Fair Value | ||||||
Servicing Liabilities at Fair Value [Line Items] | ||||||
MSRs, at fair value | 604,654 | 558,940 | ||||
Rithm | Original Rights to Mortgage Servicing Rights Agreements | ESS Financing Liability | ||||||
Servicing Liabilities at Fair Value [Line Items] | ||||||
Other financing liabilities, at fair value | 604,654 | 558,940 | ||||
Rithm | Advance Funding, Subservicing Fees and Reimbursable Expenses | ||||||
Servicing Liabilities at Fair Value [Line Items] | ||||||
Due from Rithm | $ 2,245 | $ 3,781 |
MSR Transfers Not Qualifying _5
MSR Transfers Not Qualifying for Sale Accounting – Schedule of Results of Operations in Connection With MSR Transfer Agreements that Do Not Qualify for Sale Accounting (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Related Party Transaction [Line Items] | ||||
Servicing fees | $ 81,205 | $ 76,035 | $ 246,284 | $ 234,136 |
MSR Pledged liability expense | 131,635 | 91,160 | 292,616 | 168,820 |
Rithm | ||||
Related Party Transaction [Line Items] | ||||
Servicing fees | 63,362 | 75,034 | 195,237 | 233,135 |
Less: Subservicing fee retained by Ocwen | 17,828 | 21,475 | 55,966 | 67,987 |
Net servicing fees remitted to Rithm | 45,534 | 53,559 | 139,271 | 165,148 |
Other | (3,326) | 2,968 | (2,786) | 8,313 |
MSR Pledged liability expense | 102,790 | 93,253 | 188,414 | 170,914 |
Rithm | Original Rights to Mortgage Servicing Rights Agreements | ||||
Related Party Transaction [Line Items] | ||||
Changes in fair value due to valuation inputs or assumptions | (71,072) | (63,762) | (102,606) | (73,706) |
Runoff and settlement | 17,142 | 21,100 | 56,249 | 59,627 |
MSR Asset Vehicle LLC | ||||
Related Party Transaction [Line Items] | ||||
Servicing fees | 17,844 | 1,001 | 51,048 | 1,001 |
Less: Subservicing fee retained by Ocwen | 2,313 | 178 | 6,678 | 178 |
Net servicing fees remitted to Rithm | 15,531 | 823 | 44,370 | 823 |
Changes in fair value due to valuation inputs or assumptions | (19,770) | 2,433 | (83,566) | 2,433 |
Runoff and settlement | 6,472 | 683 | 24,384 | 683 |
Other | (16) | (199) | (650) | (199) |
MSR Pledged liability expense | 28,845 | $ (2,094) | $ 104,202 | $ (2,094) |
Fair value of MSR in excess of pledged MSR liability | $ 3,100 |
MSR Transfers Not Qualifying _6
MSR Transfers Not Qualifying for Sale Accounting - Narrative (Details) $ in Billions | May 02, 2022 agreement | Sep. 30, 2022 USD ($) subservicer |
Servicing Assets at Fair Value [Line Items] | ||
Automatic renewal term | 1 year | |
Number of subservicers | subservicer | 3 | |
Ocwen Financial Corporation | ||
Servicing Assets at Fair Value [Line Items] | ||
Servicing agreements notice of termination | 6 months | |
Rithm | ||
Servicing Assets at Fair Value [Line Items] | ||
Servicing agreements notice of termination | 3 months | |
Rithm | ||
Servicing Assets at Fair Value [Line Items] | ||
Number of agreements | agreement | 3 | |
New RMSR Agreements | Rithm | ||
Servicing Assets at Fair Value [Line Items] | ||
UPB of rights to MSRs sold | $ 50.3 | |
2017 Agreements and New RMSR Agreements | Mortgage Servicing Rights Title Retained | ||
Servicing Assets at Fair Value [Line Items] | ||
UPB of rights to MSRs sold | 1.9 | |
2017 Agreements and New RMSR Agreements | Rithm | Mortgage Servicing Rights Title Retained | ||
Servicing Assets at Fair Value [Line Items] | ||
UPB of rights to MSRs sold | $ 11 | |
Servicing agreements notice of termination | 3 months |
Receivables - Schedule of Recei
Receivables - Schedule of Receivables (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Receivables [Abstract] | ||
Government-insured loan claims - Forward | $ 70,089 | $ 90,603 |
Government-insured loan claims - Reverse | 48,840 | 39,895 |
Due from custodial accounts | 29,900 | 7,777 |
Receivable from sale of MSRs (holdback) | 7,794 | 0 |
Servicing fees | 7,033 | 6,662 |
Reimbursable expenses | 6,770 | 6,056 |
Subservicing fees and reimbursable expenses - Due from Rithm | 2,245 | 3,781 |
Subservicing fees, reimbursable expenses and other - Due from MAV | 1,594 | 4,933 |
Other | 948 | 1,223 |
Servicing receivable, total | 175,213 | 160,930 |
Income taxes receivable | 27,815 | 56,776 |
Due from MAV | 432 | 990 |
Other receivables | 4,542 | 3,760 |
Other receivables, gross | 208,002 | 222,456 |
Allowance for losses | (37,164) | (41,749) |
Receivables, net | $ 170,838 | $ 180,707 |
Receivables - Narrative (Detail
Receivables - Narrative (Detail) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Servicing | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Allowance for financing notes | $ 36.5 | $ 41.5 |
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, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Allowance for Losses - Government-Insured Loan Claims | ||||
Beginning balance | $ 39,751 | $ 41,216 | $ 41,495 | $ 38,339 |
Provision | 3,319 | 2,990 | 8,816 | 10,526 |
Charge-offs and other, net | (6,577) | (3,141) | (13,818) | (7,800) |
Ending balance | $ 36,493 | $ 41,065 | $ 36,493 | $ 41,065 |
Investment in Equity Method I_3
Investment in Equity Method Investee and Related Party Transactions (Narrative) (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
May 03, 2021 USD ($) | Sep. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Dec. 21, 2020 USD ($) | |
Schedule of Equity Method Investments [Line Items] | |||||||
Investment in equity method investee | $ 250,000 | ||||||
Contribution percentage | 1 | ||||||
Payments to Acquire Equity Method Investments | $ 5,000 | ||||||
Cash proceeds received | $ 4,400 | $ 0 | $ 4,409 | ||||
UPB of MSRs sold | 11,100,000 | 18,000 | |||||
MAV Canopy HoldCo I, LLC | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Aggregate capital contributions | $ 139,900 | $ 139,900 | |||||
MAV Canopy HoldCo I, LLC | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Ownership percentage | 15% | 15% | 15% | 15% | |||
ESS Financing Liability | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Changes in fair value due to valuation inputs or assumptions | $ 14,100 | ||||||
Oaktree | MAV Canopy HoldCo I, LLC | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Ownership percentage | 85% | 85% | |||||
MSR Asset Vehicle LLC | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Unpaid principal balance of loans subserviced | $ 38,500,000 | $ 38,500,000 | |||||
UPB of rights to MSRs sold | 2,900,000 | 2,900,000 | |||||
Unpaid principal balance of loans un-boarded | (10,100,000) | (10,100,000) | |||||
Changes in fair value due to valuation inputs or assumptions | (19,770) | $ 2,433 | (83,566) | 2,433 | |||
MSR Asset Vehicle LLC | Mortgage Servicing Rights Title Transferred | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
UPB of rights to MSRs sold | 26,200,000 | 26,200,000 | |||||
MAV Canopy HoldCo I, LLC | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Payments to Acquire Equity Method Investments | $ 17,250 | $ 6,984 | 33,750 | $ 18,512 | |||
Maximum | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Management fee expense | 500 | ||||||
Joint Marketing and Recapture Agreement | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
UPB of MSRs sold | 261,300 | ||||||
Forward Bulk Servicing Rights Purchase and Sale Agreement | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
UPB of MSRs sold | 6,300,000 | ||||||
Bulk Mortgage Servicing Rights Purchase and Sale Agreements | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
UPB of MSRs sold | $ 598,300 |
Investment in Equity Method I_4
Investment in Equity Method Investee and Related Party Transactions - Schedule of Investment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
May 03, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward] | |||||
Equity Method Investment, Aggregate Cost | $ 23,297 | ||||
Payments to Acquire Equity Method Investments | $ 5,000 | ||||
Proceeds from Equity Method Investment, Distribution, Return of Capital | (32,385) | $ 0 | |||
Earnings distributions | (5,175) | 0 | |||
Earnings of equity method investee | $ 3,346 | $ 932 | 19,281 | 1,282 | |
Equity Method Investment, Aggregate Cost | 38,711 | 38,711 | |||
MAV Canopy HoldCo I, LLC | |||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward] | |||||
Equity Method Investment, Aggregate Cost | 38,821 | 11,878 | 23,297 | 0 | |
Payments to Acquire Equity Method Investments | 17,250 | 6,984 | 33,750 | 18,512 | |
Proceeds from Equity Method Investment, Distribution, Return of Capital | (15,531) | 0 | (32,442) | 0 | |
Earnings distributions | (5,175) | 0 | (5,175) | 0 | |
Earnings of equity method investee | 3,346 | 932 | 19,281 | 1,282 | |
Equity Method Investment, Aggregate Cost | $ 38,711 | $ 19,794 | $ 38,711 | $ 19,794 |
Other Assets - Schedule of Othe
Other Assets - Schedule of Other Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Other Assets [Abstract] | ||
Accumulated amortization | $ (4,100) | $ (700) |
Contingent loan repurchase asset | 249,755 | 403,740 |
Derivative margin deposit | 26,104 | 2,024 |
Derivatives, at fair value | 24,760 | 21,675 |
Prepaid expenses | 20,791 | 21,498 |
Intangible assets, net (net of accumulated amortization of $4.1 million and $0.7 million) | 18,622 | 14,335 |
REO | 9,968 | 10,075 |
Prepaid lender fees, net | 7,872 | 7,150 |
Prepaid representation, warranty and indemnification claims - Agency MSR sale | 5,173 | 15,173 |
Deferred tax asset, net | 3,323 | 3,329 |
Security deposits | 900 | 1,174 |
Other | 4,022 | 7,077 |
Other Assets, Total | $ 371,290 | $ 507,250 |
Other Assets - Narrative (Detai
Other Assets - Narrative (Details) - Contract-Based Intangible Assets loan in Thousands, $ in Millions | 3 Months Ended | ||||||
Apr. 07, 2022 USD ($) | Apr. 01, 2022 USD ($) loan | Oct. 01, 2021 | Jun. 30, 2022 loan | Mar. 31, 2022 USD ($) | Sep. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Servicing Assets at Fair Value [Line Items] | |||||||
Intangible assets, net, unamortized balance | $ 18 | $ 13.7 | |||||
Finite-lived intangible asset, useful life | 5 years | 5 years | |||||
RMS | |||||||
Servicing Assets at Fair Value [Line Items] | |||||||
Number of loans boarded to servicing portfolio | loan | 19 | 40 | |||||
Finite-lived intangible assets acquired | $ 8.1 | $ 4,100 | $ 9,100 | ||||
Payments to acquire intangible assets | $ 6.9 |
Other Financing Liabilities - S
Other Financing Liabilities - Schedule of Financing Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Sep. 28, 2022 | Aug. 12, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | |||||||
Other financing liabilities, at fair value | $ 989,722 | $ 989,722 | $ 804,963 | ||||
Servicing and subservicing fees | 215,562 | $ 206,585 | 643,316 | $ 562,764 | |||
Servicing fee remittance and changes in fair value | (1,300) | (1,300) | |||||
Proceeds from Excess Servicing Spread (ESS) liability financing | 36,241 | $ 0 | |||||
ESS Financing Liability | |||||||
Debt Instrument [Line Items] | |||||||
Other financing liabilities, at fair value | 36,301 | 36,301 | 0 | ||||
Proceeds from Excess Servicing Spread (ESS) liability financing | $ 9,400,000 | ||||||
Freddie Mac and Fannie Mae Mortgages | |||||||
Debt Instrument [Line Items] | |||||||
Servicing and subservicing fees | $ 3,400,000 | ||||||
ESS Financing Liability | |||||||
Debt Instrument [Line Items] | |||||||
Other financing liabilities, at fair value | 946,619 | 946,619 | 797,084 | ||||
Residential Asset Securitization Trust | |||||||
Debt Instrument [Line Items] | |||||||
Other financing liabilities, at fair value | 6,802 | 6,802 | 7,879 | ||||
Original Rights to Mortgage Servicing Rights Agreements | ESS Financing Liability | |||||||
Debt Instrument [Line Items] | |||||||
Other financing liabilities, at fair value | 604,654 | 604,654 | 558,940 | ||||
MAV MSR Sale Agreements | ESS Financing Liability | |||||||
Debt Instrument [Line Items] | |||||||
Other financing liabilities, at fair value | $ 341,965 | $ 341,965 | $ 238,144 | ||||
Minimum | Residential Asset Securitization Trust | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, interest rate | 4.25% | 4.25% | |||||
Maximum | Residential Asset Securitization Trust | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, interest rate | 5.75% | 5.75% |
Borrowings - Schedule of Match
Borrowings - Schedule of Match Funded Liabilities (Details) - USD ($) | Sep. 30, 2022 | Aug. 26, 2022 | Aug. 25, 2022 | Aug. 15, 2022 | Aug. 14, 2022 | May 02, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | |||||||
Advance match funded liabilities | $ 457,452,000 | $ 512,297,000 | |||||
Prepaid lender fees, net | 7,872,000 | 7,150,000 | |||||
EBO Advance Facility | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | 20,000,000 | $ 20,000,000 | |||||
Available borrowing capacity | 18,781,000 | ||||||
Advance match funded liabilities | 1,219,000 | 0 | |||||
Available borrowing capacity based on amount of eligible collateral | 0 | ||||||
Promissory note | $ 1,700,000 | ||||||
Advance match funded liabilities | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | 520,000,000 | ||||||
Available borrowing capacity | 62,548,000 | ||||||
Advance match funded liabilities | $ 457,452,000 | $ 512,297,000 | |||||
Weighted average interest rate | 5.47% | 1.54% | |||||
Available borrowing capacity based on amount of eligible collateral | $ 0 | ||||||
Prepaid lender fees, net | 2,400,000 | $ 1,300,000 | |||||
Total Ocwen Master Advance Receivables Trust (OMART) | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | 450,000,000 | ||||||
Available borrowing capacity | 32,559,000 | ||||||
Advance match funded liabilities | 417,441,000 | 489,231,000 | |||||
Total Ocwen Master Advance Receivables Trust (OMART) | Advance Receivables Backed Notes - Series 2015-VF5 | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | 450,000,000 | $ 450,000,000 | $ 80,000,000 | ||||
Available borrowing capacity | 32,559,000 | ||||||
Advance match funded liabilities | 417,441,000 | 14,231,000 | |||||
Total Ocwen Master Advance Receivables Trust (OMART) | Advance Receivables Backed Notes, Series 2020-T1 | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | 0 | ||||||
Available borrowing capacity | 0 | ||||||
Advance match funded liabilities | $ 0 | 475,000,000 | |||||
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) | Advance Receivables Backed Notes, Series 2015-VF1 | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 50,000,000 | $ 50,000,000 | $ 40,000,000 | ||||
Available borrowing capacity | 11,208,000 | ||||||
Advance match funded liabilities | $ 38,792,000 | $ 23,065,000 |
Borrowings - Schedule of Mortga
Borrowings - Schedule of Mortgage Loan Warehouse and MSR Financing Facilities (Details) - USD ($) | 9 Months Ended | 12 Months Ended | ||||||||||||||||||
Sep. 01, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 16, 2022 | Sep. 11, 2022 | Aug. 11, 2022 | Aug. 10, 2022 | Jul. 29, 2022 | Jul. 28, 2022 | Jun. 30, 2022 | Jun. 29, 2022 | Jun. 23, 2022 | Jun. 22, 2022 | May 02, 2022 | Apr. 11, 2022 | Mar. 15, 2022 | Feb. 28, 2022 | Feb. 27, 2022 | Jan. 05, 2022 | Jan. 04, 2022 | |
Line of Credit Facility [Line Items] | ||||||||||||||||||||
Unamortized debt issuance costs | $ (1,100,000) | $ (900,000) | ||||||||||||||||||
Prepaid lender fees, net | 7,872,000 | 7,150,000 | ||||||||||||||||||
August 2022 Master Repurchase Agreement | ||||||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||||||
Uncommitted available borrowing capacity | $ 125,000,000 | |||||||||||||||||||
Maximum borrowing capacity | 175,000,000 | 175,000,000 | $ 275,000,000 | |||||||||||||||||
Borrowings available on committed basis | 50,000,000 | $ 50,000,000 | ||||||||||||||||||
December 2022 Master Repurchase Agreement | ||||||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||||||
Maximum borrowing capacity | 450,000,000 | |||||||||||||||||||
Borrowings available on committed basis | 200,000,000 | |||||||||||||||||||
Participation Agreement | ||||||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||||||
Maximum borrowing capacity | 150,000,000 | $ 250,000,000 | $ 200,000,000 | $ 173,000,000 | $ 100,000,000 | |||||||||||||||
March 2023 Mortgage Warehouse Agreement | ||||||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||||||
Borrowings available on committed basis | 50,000,000 | |||||||||||||||||||
March 2023 Mortgage Warehouse Agreement2 | ||||||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||||||
Maximum borrowing capacity | 204,000,000 | |||||||||||||||||||
Mortgage Warehouse Agreement | ||||||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||||||
Available borrowing capacity | 0 | |||||||||||||||||||
Maximum borrowing capacity | $ 250,000,000 | $ 200,000,000 | ||||||||||||||||||
Long-term debt, term | 4 years | |||||||||||||||||||
Master Repurchase Agreement2 | ||||||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||||||
Maximum borrowing capacity | 125,000,000 | $ 325,000,000 | ||||||||||||||||||
Loan and Security Agreement | ||||||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||||||
Borrowings available on committed basis | $ 50,000,000 | |||||||||||||||||||
April 2023 Master Repurchase Agreement | ||||||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||||||
Maximum borrowing capacity | $ 400,000,000 | $ 350,000,000 | ||||||||||||||||||
Borrowings available on committed basis | $ 100,000,000 | |||||||||||||||||||
Borrowings available on an uncommitted basis | $ 350,000,000 | $ 250,000,000 | ||||||||||||||||||
Ginnie Mae Mortgage Servicing Rights Financing Facility | ||||||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||||||
Maximum borrowing capacity | $ 175,000,000 | $ 150,000,000 | ||||||||||||||||||
Borrowings available on committed basis | $ 50,000,000 | |||||||||||||||||||
Ocwen Excess Spread-Collateralized Notes, Series 2019/2022-PLS1 Class A | ||||||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||||||
Interest rate (as a percent) | 5.07% | 5.114% | ||||||||||||||||||
Agency MSR Financing Facility Revolving Loan | ||||||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||||||
Prepaid lender fees, net | $ 4,600,000 | $ 4,700,000 | ||||||||||||||||||
One Year Swap Rate | ||||||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||||||
Debt instrument, term | 1 year | 1 year | ||||||||||||||||||
Basis spread on variable rate | 0.19% | |||||||||||||||||||
Secured Debt | ||||||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||||||
Uncommitted available borrowing capacity | 33,255,000 | |||||||||||||||||||
Available borrowing capacity | 45,642,000 | |||||||||||||||||||
Other secured borrowings | 1,021,696,000 | $ 901,658,000 | ||||||||||||||||||
Total MSR financing facilities, net | $ 1,020,606,000 | $ 900,760,000 | ||||||||||||||||||
Weighted average interest rate | 5.96% | 3.71% | ||||||||||||||||||
Unamortized debt issuance costs | $ (1,090,000) | $ (898,000) | ||||||||||||||||||
Secured Debt | August 2022 Master Repurchase Agreement | ||||||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||||||
Uncommitted available borrowing capacity | 86,097,000 | |||||||||||||||||||
Available borrowing capacity | 0 | |||||||||||||||||||
Other secured borrowings | 88,903,000 | 109,437,000 | ||||||||||||||||||
Secured Debt | December 2022 Master Repurchase Agreement | ||||||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||||||
Uncommitted available borrowing capacity | 250,000,000 | |||||||||||||||||||
Available borrowing capacity | 6,797,000 | |||||||||||||||||||
Other secured borrowings | 193,203,000 | 160,882,000 | ||||||||||||||||||
Secured Debt | Master Repurchase Agreement | ||||||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||||||
Uncommitted available borrowing capacity | 50,000,000 | |||||||||||||||||||
Available borrowing capacity | 0 | |||||||||||||||||||
Other secured borrowings | 0 | 0 | ||||||||||||||||||
Secured Debt | Participation Agreement | ||||||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||||||
Uncommitted available borrowing capacity | 250,000,000 | |||||||||||||||||||
Available borrowing capacity | 0 | |||||||||||||||||||
Other secured borrowings | $ 0 | 45,186,000 | ||||||||||||||||||
Beneficial interest | 100% | |||||||||||||||||||
Secured Debt | June 2023 Master Repurchase Agreement | ||||||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||||||
Uncommitted available borrowing capacity | $ 0 | |||||||||||||||||||
Available borrowing capacity | 45,156,000 | |||||||||||||||||||
Other secured borrowings | 127,844,000 | 1,766,000 | ||||||||||||||||||
Secured Debt | June 2023 Master Repurchase Agreement2 | ||||||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||||||
Uncommitted available borrowing capacity | 0 | |||||||||||||||||||
Available borrowing capacity | 1,000,000 | |||||||||||||||||||
Other secured borrowings | 0 | 0 | ||||||||||||||||||
Secured Debt | March 2023 Mortgage Warehouse Agreement | ||||||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||||||
Uncommitted available borrowing capacity | 0 | |||||||||||||||||||
Available borrowing capacity | 34,090,000 | |||||||||||||||||||
Other secured borrowings | 15,910,000 | 11,792,000 | ||||||||||||||||||
Secured Debt | March 2023 Mortgage Warehouse Agreement2 | ||||||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||||||
Uncommitted available borrowing capacity | 171,659,000 | |||||||||||||||||||
Available borrowing capacity | 0 | |||||||||||||||||||
Other secured borrowings | 32,341,000 | 87,813,000 | ||||||||||||||||||
Secured Debt | Mortgage Warehouse Agreement | ||||||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||||||
Uncommitted available borrowing capacity | 205,945,000 | |||||||||||||||||||
Available borrowing capacity | 0 | |||||||||||||||||||
Other secured borrowings | 24,055,000 | 192,023,000 | ||||||||||||||||||
Secured Debt | Master Repurchase Agreement2 | ||||||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||||||
Uncommitted available borrowing capacity | 0 | |||||||||||||||||||
Available borrowing capacity | 0 | |||||||||||||||||||
Other secured borrowings | 0 | 459,344,000 | ||||||||||||||||||
Secured Debt | Loan and Security Agreement | ||||||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||||||
Uncommitted available borrowing capacity | 0 | |||||||||||||||||||
Available borrowing capacity | 14,924,000 | |||||||||||||||||||
Other secured borrowings | 35,076,000 | 16,834,000 | ||||||||||||||||||
Secured Debt | April 2023 Master Repurchase Agreement | ||||||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||||||
Uncommitted available borrowing capacity | 197,774,000 | |||||||||||||||||||
Available borrowing capacity | 0 | |||||||||||||||||||
Other secured borrowings | 302,226,000 | 0 | ||||||||||||||||||
Secured Debt | Agency Mortgage Servicing Rights Financing Facility | ||||||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||||||
Uncommitted available borrowing capacity | 0 | |||||||||||||||||||
Available borrowing capacity | 37,713,000 | |||||||||||||||||||
Other secured borrowings | 412,287,000 | 317,523,000 | ||||||||||||||||||
Maximum borrowing capacity | $ 450,000,000 | $ 350,000,000 | ||||||||||||||||||
Secured Debt | Ginnie Mae Mortgage Servicing Rights Financing Facility | ||||||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||||||
Uncommitted available borrowing capacity | 33,255,000 | |||||||||||||||||||
Available borrowing capacity | 0 | |||||||||||||||||||
Other secured borrowings | 141,745,000 | 131,694,000 | ||||||||||||||||||
Secured Debt | Ocwen Excess Spread-Collateralized Notes, Series 2019/2022-PLS1 Class A | ||||||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||||||
Uncommitted available borrowing capacity | 0 | |||||||||||||||||||
Available borrowing capacity | 0 | |||||||||||||||||||
Other secured borrowings | 61,752,000 | 41,663,000 | ||||||||||||||||||
Debt instrument, face amount | 100,000,000 | $ 75,000,000 | ||||||||||||||||||
Secured Debt | OASIS Series 2014-1 | ||||||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||||||
Uncommitted available borrowing capacity | 0 | |||||||||||||||||||
Available borrowing capacity | 0 | |||||||||||||||||||
Other secured borrowings | 34,663,000 | 39,529,000 | ||||||||||||||||||
Secured Debt | Agency MSR Financing Facility Revolving Loan | ||||||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||||||
Uncommitted available borrowing capacity | 0 | |||||||||||||||||||
Available borrowing capacity | 7,929,000 | |||||||||||||||||||
Other secured borrowings | 277,071,000 | 277,071,000 | ||||||||||||||||||
Maximum borrowing capacity | 285,000,000 | |||||||||||||||||||
Secured Debt | Agency MSR Financing Facility Term Loan | ||||||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||||||
Uncommitted available borrowing capacity | 0 | |||||||||||||||||||
Available borrowing capacity | 0 | |||||||||||||||||||
Other secured borrowings | 94,178,000 | $ 94,178,000 | ||||||||||||||||||
Maximum borrowing capacity | 94,200,000 | |||||||||||||||||||
Debt instrument, face amount | 135,000,000 | |||||||||||||||||||
EBO Advance Facility | ||||||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||||||
Available borrowing capacity | 18,781,000 | |||||||||||||||||||
Maximum borrowing capacity | 20,000,000 | $ 20,000,000 | ||||||||||||||||||
MSR financing facilities | ||||||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||||||
Available borrowing capacity | $ 28,100,000 | |||||||||||||||||||
OASIS Series 2014-1 | ||||||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||||||
Basis spread on variable rate | 0.21% | |||||||||||||||||||
Mortgage loan warehouse facilities | ||||||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||||||
Weighted average interest rate | 4.36% | 2.61% | ||||||||||||||||||
Interest rate (as a percent) | 3.25% | |||||||||||||||||||
Prepaid lender fees, net | $ 900,000 | $ 1,200,000 | ||||||||||||||||||
Basis spread on variable rate | 3.04% | 0.05% | ||||||||||||||||||
Mortgage loan warehouse facilities | London Interbank Offered Rate (LIBOR) | ||||||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||||||
Basis spread on variable rate | 3.14% | 0.10% | ||||||||||||||||||
Mortgage loan warehouse facilities | Secured Debt | ||||||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||||||
Uncommitted available borrowing capacity | $ 1,211,475,000 | |||||||||||||||||||
Available borrowing capacity | 101,968,000 | |||||||||||||||||||
Other secured borrowings | $ 819,557,000 | $ 1,085,076,000 |
Borrowings - Schedule of Senior
Borrowings - Schedule of Senior Notes (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Mar. 04, 2021 |
Debt Instrument [Line Items] | |||
Unamortized debt issuance costs | $ (1,100) | $ (900) | |
Total Senior notes | 597,129 | 614,797 | |
Senior Notes | |||
Debt Instrument [Line Items] | |||
Senior notes | 660,000 | 685,000 | |
Discount | (50,510) | (55,934) | |
Unamortized debt issuance costs | $ (12,360) | (14,269) | |
7.875% Senior Notes, Due 2026 | Secured Debt | |||
Debt Instrument [Line Items] | |||
Interest rate (as a percent) | 7.875% | ||
Senior notes | $ 375,000 | 400,000 | |
Total Senior notes | 375,000 | $ 400,000 | |
7.875% Senior Notes, Due 2026 | Senior Notes | |||
Debt Instrument [Line Items] | |||
Discount | (1,415) | (1,758) | (2,100) |
Unamortized debt issuance costs | $ (4,578) | (5,687) | |
12% Paid in Cash or 13.25% Paid in Kind Senior Notes, Due 2027 | |||
Debt Instrument [Line Items] | |||
Interest rate (as a percent) | 12% | ||
Discount | (24,500) | ||
12% Paid in Cash or 13.25% Paid in Kind Senior Notes, Due 2027 | Secured Debt | |||
Debt Instrument [Line Items] | |||
Senior notes | $ 285,000 | 285,000 | |
Total Senior notes | 285,000 | $ 199,500 | |
12% Paid in Cash or 13.25% Paid in Kind Senior Notes, Due 2027 | Senior Notes | |||
Debt Instrument [Line Items] | |||
Discount | (49,095) | (54,176) | |
Unamortized debt issuance costs | $ (7,782) | $ (8,582) | |
12% Paid in Cash or 13.25% Paid in Kind Senior Notes, Due 2027 | Payment in Kind (PIK) Note | |||
Debt Instrument [Line Items] | |||
Interest rate (as a percent) | 13.25% |
Borrowings - Narrative (Details
Borrowings - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
May 03, 2021 | Mar. 04, 2021 | Sep. 30, 2022 | Jun. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | ||||||||
Gain (loss) on extinguishment of debt | $ 7,100 | $ 0 | $ 0 | $ 914 | $ (15,458) | |||
Total Senior notes | 597,129 | 597,129 | $ 614,797 | |||||
Restrictive liquidity requirements | 125,000 | 125,000 | ||||||
Covenant compliance, consolidated tangible net worth at period end | $ 300,000 | $ 300,000 | ||||||
Oaktree | ||||||||
Debt Instrument [Line Items] | ||||||||
Discount | $ (10,500) | |||||||
Debt instrument, face amount | 85,500 | |||||||
6.375% Senior Notes, Due 2021 | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate (as a percent) | 6.375% | 6.375% | 6.375% | |||||
6.375% Senior Notes, Due 2021 | Thereafter | ||||||||
Debt Instrument [Line Items] | ||||||||
Redemption price | 100% | |||||||
8.375% Senior Secured Notes Due In 2022 | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate (as a percent) | 8.375% | 8.375% | 8.375% | |||||
8.375% Senior Secured Notes Due In 2022 | Prior to March 15, 2023 | ||||||||
Debt Instrument [Line Items] | ||||||||
Redemption price | 102.094% | |||||||
7.875% Senior Notes, Due 2026 | ||||||||
Debt Instrument [Line Items] | ||||||||
Redemption price | 7.875% | |||||||
Gain (loss) on extinguishment of debt | $ 900 | |||||||
Debt instrument, repurchased amount | 25,000 | |||||||
Total repurchase open market price | $ 23,600 | |||||||
7.875% Senior Notes, Due 2026 | Prior to March 15, 2023 | ||||||||
Debt Instrument [Line Items] | ||||||||
Redemption price | 100% | |||||||
Percentage of premium on outstanding principal amount | 1% | |||||||
Basis spread on variable rate | 0.50% | |||||||
7.875% Senior Notes, Due 2026 | On or Prior to March 15, 2023 | ||||||||
Debt Instrument [Line Items] | ||||||||
Redemption price | 107.875% | |||||||
Redemption price, percentage of principal amount | 35% | |||||||
12% Paid in Cash or 13.25% Paid in Kind Senior Notes, Due 2027 | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate (as a percent) | 12% | 12% | ||||||
Discount | $ (24,500) | |||||||
Proceeds from issuance of senior secured notes | $ 68,000 | 158,500 | ||||||
Secured Debt | 7.875% Senior Notes, Due 2026 | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate (as a percent) | 7.875% | 7.875% | ||||||
Total Senior notes | 400,000 | $ 375,000 | $ 375,000 | |||||
Secured Debt | 12% Paid in Cash or 13.25% Paid in Kind Senior Notes, Due 2027 | ||||||||
Debt Instrument [Line Items] | ||||||||
Total Senior notes | 199,500 | $ 285,000 | $ 285,000 | |||||
Secured Debt | 12% Paid in Cash or 13.25% Paid in Kind Senior Notes, Due 2027 | Prior to March 4, 2022 | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate (as a percent) | 7% | 7% | ||||||
Senior Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Discount | $ (50,510) | $ (50,510) | (55,934) | |||||
Senior Notes | 7.875% Senior Notes, Due 2026 | ||||||||
Debt Instrument [Line Items] | ||||||||
Discount | $ (2,100) | (1,415) | (1,415) | (1,758) | ||||
Senior Notes | 12% Paid in Cash or 13.25% Paid in Kind Senior Notes, Due 2027 | ||||||||
Debt Instrument [Line Items] | ||||||||
Discount | (49,095) | $ (49,095) | $ (54,176) | |||||
Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 0.50% | |||||||
Restrictive liquidity requirements | $ 75,000 | $ 75,000 | ||||||
Minimum | 7.875% Senior Notes, Due 2026 | On or Prior to March 15, 2023 | ||||||||
Debt Instrument [Line Items] | ||||||||
Percentage of principal amount outstanding post redemption | 65% | 65% | ||||||
Maximum | 7.875% Senior Notes, Due 2026 | On or Prior to March 15, 2023 | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, redemption threshold | 120 days |
Borrowings - Schedule of Redemp
Borrowings - Schedule of Redemption Prices (Details) | 9 Months Ended |
Sep. 30, 2022 | |
2023 | |
Debt Instrument [Line Items] | |
Redemption price | 103.938% |
2024 | |
Debt Instrument [Line Items] | |
Redemption price | 101.969% |
2025 and thereafter | |
Debt Instrument [Line Items] | |
Redemption price | 100% |
Borrowings - Schedule of Assets
Borrowings - Schedule of Assets Held as Collateral Related to Secured Borrowings (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Mar. 04, 2021 |
Debt Instrument [Line Items] | ||||
Cash | $ 226,570 | $ 192,792 | ||
Restricted cash | 45,269 | 70,654 | ||
Loans held for sale | 729,638 | 928,527 | ||
Loans held for investment, at fair value | 7,402,285 | 7,207,641 | ||
Loans held for investment - unsecuritized | 127,501 | $ 226,701 | ||
MSRs pledged (MSRs, at fair value) | 2,714,225 | 2,250,147 | ||
Advances, net | 642,461 | 772,433 | ||
Receivables, net | 170,838 | 180,707 | ||
REO | 9,968 | 10,075 | ||
Total Assets | 12,360,069 | 12,147,123 | $ 12,040,238 | |
Total Senior notes | 597,129 | $ 614,797 | ||
7.875% Senior Notes, Due 2026 | Secured Debt | ||||
Debt Instrument [Line Items] | ||||
Total Senior notes | 375,000 | $ 400,000 | ||
12% Paid in Cash or 13.25% Paid in Kind Senior Notes, Due 2027 | Secured Debt | ||||
Debt Instrument [Line Items] | ||||
Total Senior notes | 285,000 | $ 199,500 | ||
Assets | ||||
Debt Instrument [Line Items] | ||||
Cash | 226,570 | |||
Restricted cash | 45,269 | |||
Loans held for sale | 729,638 | |||
Loans held for investment, at fair value | 7,267,982 | |||
Loans held for investment - unsecuritized | 127,501 | |||
MSRs pledged (MSRs, at fair value) | 1,742,978 | |||
Advances, net | 642,461 | |||
Receivables, net | 170,838 | |||
REO | 9,968 | |||
Total Assets | 10,963,206 | |||
Pledged Assets | ||||
Debt Instrument [Line Items] | ||||
Cash | 0 | |||
Restricted cash | 45,269 | |||
Loans held for sale | 685,428 | |||
Loans held for investment, at fair value | 7,267,982 | |||
Loans held for investment - unsecuritized | 94,884 | |||
MSRs pledged (MSRs, at fair value) | 1,750,870 | |||
Advances, net | 545,520 | |||
Receivables, net | 40,580 | |||
REO | 4,539 | |||
Total Assets | 10,435,071 | |||
Collateralized Borrowings | ||||
Debt Instrument [Line Items] | ||||
Cash | 0 | |||
Restricted cash | 0 | |||
Loans held for sale | 683,430 | |||
Loans held for investment, at fair value | 7,208,385 | |||
Loans held for investment - unsecuritized | 88,021 | |||
MSRs pledged (MSRs, at fair value) | 1,028,262 | |||
Advances, net | 487,186 | |||
Receivables, net | 44,211 | |||
REO | 3,895 | |||
Total Assets | 9,543,390 | |||
Unencumbered Assets | ||||
Debt Instrument [Line Items] | ||||
Cash | 226,570 | |||
Restricted cash | 0 | |||
Loans held for sale | 44,210 | |||
Loans held for investment, at fair value | 0 | |||
Loans held for investment - unsecuritized | 32,617 | |||
MSRs pledged (MSRs, at fair value) | 4,578 | |||
Advances, net | 96,941 | |||
Receivables, net | 130,259 | |||
REO | 5,429 | |||
Total Assets | $ 540,605 |
Borrowings - Schedule of Second
Borrowings - Schedule of Second Lien Priority on Specified Assets Carried on Balance Sheet (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 |
Debt Instrument [Line Items] | |||
Advances, net | $ 642,461 | $ 772,433 | |
Mortgage servicing rights (MSRs), at fair value | 2,714,225 | 2,250,147 | |
Cash and cash equivalents | 226,570 | 192,792 | |
Total assets | 12,360,069 | $ 12,147,123 | $ 12,040,238 |
Second Lien | |||
Debt Instrument [Line Items] | |||
Advances, net | 116,980 | ||
Specified deferred servicing fee | 21,591 | ||
Mortgage servicing rights (MSRs), at fair value | 796,556 | ||
Cash and cash equivalents | 146,849 | ||
Specified advance facility reserves | 10,064 | ||
Specified loan value | 84,754 | ||
Specified residual value | 79,513 | ||
Total assets | $ 1,256,305 |
Other Liabilities - Schedule of
Other Liabilities - Schedule of Other Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Other Liabilities Disclosure [Abstract] | ||
Contingent loan repurchase liability | $ 249,755 | $ 403,740 |
Due to Rithm - Advance collections, servicing fees and other | 80,438 | 76,590 |
Other accrued expenses | 80,138 | 104,931 |
Liability for indemnification obligations | 52,489 | 51,243 |
Checks held for escheat | 49,527 | 44,866 |
Accrued legal fees and settlements | 47,102 | 43,990 |
Servicing-related obligations | 37,583 | 32,366 |
Derivative related payables | 24,894 | 3,714 |
Derivatives, at fair value | 23,704 | 3,080 |
MSR purchase price holdback | 16,402 | 32,620 |
Lease liability | 15,836 | 16,842 |
Liability for uncertain tax positions | 11,587 | 14,730 |
Accrued interest payable | 9,206 | 11,998 |
Liability for unfunded India gratuity plan | 5,885 | 6,263 |
Due to MAV | 3,649 | 2,134 |
Liability for unfunded pension obligation | 3,115 | 4,183 |
Other | 9,802 | 14,224 |
Total other liabilities | $ 721,112 | $ 867,514 |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 9 Months Ended | ||
Sep. 30, 2022 | May 31, 2022 | May 20, 2022 | |
Equity [Abstract] | |||
Share repurchase program authorized amount | $ 50 | $ 50 | |
Repurchase of common stock (in shares) | 1,338,498 | ||
Repurchase of common stock, excluding commissions | $ 38.7 | ||
Average price paid per share (in usd per share) | $ 28.93 |
Derivative Financial Instrume_3
Derivative Financial Instruments and Hedging Activities - Summary of Derivatives (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Derivative [Line Items] | |||||
Notional balance | $ 1,507,224 | $ 1,507,224 | $ 2,764,805 | ||
Derivatives, at fair value | 24,760 | 24,760 | 21,675 | ||
Derivative liability, notional amount | 2,689,295 | 2,689,295 | 1,645,000 | ||
Derivative liability, fair value | (23,704) | (23,704) | (3,080) | ||
Gains (losses) on derivatives | 5,998 | $ (15,392) | (12,730) | $ (11,362) | |
Forward Sales Of Reverse Loans | |||||
Derivative [Line Items] | |||||
Notional balance | 40,000 | 40,000 | 175,000 | ||
Derivatives, at fair value | 173 | 173 | 364 | ||
Derivative liability, notional amount | 30,000 | 30,000 | 0 | ||
Derivative liability, fair value | (85) | (85) | 0 | ||
Gains (losses) on derivatives | (478) | 274 | (276) | 471 | |
Forward loans IRLCs | |||||
Derivative [Line Items] | |||||
Notional balance | 0 | 0 | 1,021,978 | ||
Derivatives, at fair value | 0 | 0 | 16,074 | ||
Derivative liability, notional amount | 1,289,388 | 1,289,388 | 0 | ||
Derivative liability, fair value | 12,800 | 12,800 | 0 | ||
Gains (losses) on derivatives | (17,953) | (3,743) | (28,834) | (8,817) | |
Reverse loans IRLCs | |||||
Derivative [Line Items] | |||||
Notional balance | 19,224 | 19,224 | 63,327 | ||
Derivatives, at fair value | 610 | 610 | 2,011 | ||
Gains (losses) on derivatives | (250) | 327 | (1,421) | 141 | |
TBA forward MBS trades | |||||
Derivative [Line Items] | |||||
Notional balance | 1,448,000 | 1,448,000 | 587,000 | ||
Derivatives, at fair value | 23,977 | 23,977 | 946 | ||
Derivative liability, notional amount | 418,000 | 418,000 | 1,195,000 | ||
Derivative liability, fair value | (2,208) | (2,208) | (1,185) | ||
Interest Rate Swap | |||||
Derivative [Line Items] | |||||
Notional balance | 0 | 0 | 792,500 | ||
Derivatives, at fair value | 0 | 0 | 1,734 | ||
Derivative liability, notional amount | 440,000 | 440,000 | 0 | ||
Derivative liability, fair value | (7,274) | (7,274) | 0 | ||
Interest rate option contracts | |||||
Derivative [Line Items] | |||||
Notional balance | 0 | 0 | 125,000 | ||
Derivatives, at fair value | 0 | 0 | 547 | ||
Derivative liability, notional amount | 500,000 | 500,000 | 450,000 | ||
Derivative liability, fair value | (1,172) | (1,172) | (824) | ||
Reverse loan IRLCs - EquityIQ loans | |||||
Derivative [Line Items] | |||||
Gains (losses) on derivatives | 266 | 0 | (20) | 0 | |
TBA Forward Pipelines Trades | |||||
Derivative [Line Items] | |||||
Gains (losses) on derivatives | 48,389 | 780 | 124,613 | 592 | |
TBA Trades | |||||
Derivative [Line Items] | |||||
Gains (losses) on derivatives | (131) | 0 | (209) | 0 | |
Interest Rate Swap Futures And TBA Forward MBS Trades | |||||
Derivative [Line Items] | |||||
Gains (losses) on derivatives | (23,814) | (12,607) | (107,490) | (3,310) | |
Other | |||||
Derivative [Line Items] | |||||
Derivative liability, notional amount | 11,907 | 11,907 | 0 | ||
Derivative liability, fair value | (164) | (164) | $ (1,070) | ||
Gains (losses) on derivatives | 0 | (423) | 0 | (439) | |
Other Derivatives | |||||
Derivative [Line Items] | |||||
Gains (losses) on derivatives | $ (31) | $ 0 | $ 906 | $ 0 |
Derivative Financial Instrume_4
Derivative Financial Instruments and Hedging Activities - Narrative (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 29, 2022 | |
Derivative [Line Items] | |||||
Loan commitment, term | 7 days | ||||
Foreign currency re-measurement exchange gains (losses) | $ (0.2) | $ 0.2 | $ (0.2) | $ 0.3 | |
Minimum | |||||
Derivative [Line Items] | |||||
Coverage ratio | 0.25 | 0.25 | 0.40 | ||
Loans held-for-sale, period of sale | 3 days | 3 days | |||
Minimum | Forward loans IRLCs | |||||
Derivative [Line Items] | |||||
Loan commitment, term | 5 days | ||||
Loan commitment, average term | 55 days | ||||
Maximum | |||||
Derivative [Line Items] | |||||
Coverage ratio | 0.30 | 0.30 | 0.60 | ||
Loans held-for-sale, period of sale | 20 days | 20 days | |||
Maximum | Forward loans IRLCs | |||||
Derivative [Line Items] | |||||
Loan commitment, term | 90 days | ||||
Loan commitment, average term | 75 days |
Interest Expense - Schedule of
Interest Expense - Schedule of Components of Interest Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Debt securities: | ||||
Interest expense | $ 50,395 | $ 40,623 | $ 126,131 | $ 102,591 |
Amortization of debt issuance costs and discount | 2,443 | 2,205 | 7,526 | 5,438 |
OFC Senior Secured Notes | ||||
Debt securities: | ||||
Interest expense | 10,578 | 10,238 | 31,461 | 21,351 |
Amortization of debt issuance costs and discount | 2,000 | 1,600 | 5,900 | 3,400 |
Senior Notes | ||||
Debt securities: | ||||
Interest expense | 7,748 | 8,245 | 24,002 | 23,581 |
MSR financing facilities | ||||
Debt securities: | ||||
Interest expense | 13,839 | 8,623 | 30,206 | 17,950 |
Mortgage loan warehouse facilities | ||||
Debt securities: | ||||
Interest expense | 10,785 | 8,985 | 24,574 | 20,673 |
Advance match funded liabilities | ||||
Debt securities: | ||||
Interest expense | 5,021 | 2,809 | 10,523 | 11,570 |
SSTL | ||||
Debt securities: | ||||
Interest expense | 0 | 0 | 0 | 2,956 |
Escrow | ||||
Debt securities: | ||||
Interest expense | $ 2,424 | $ 1,723 | $ 5,365 | $ 4,510 |
Basic and Diluted Earnings pe_3
Basic and Diluted Earnings 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, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Basic earnings per share | ||||
Net income | $ 36,939 | $ 21,552 | $ 105,375 | $ 19,773 |
Weighted average shares of common stock (in shares) | 8,530,209 | 9,189,030 | 8,998,298 | 8,960,696 |
Basic earnings per share (in USD per share) | $ 4.33 | $ 2.35 | $ 11.71 | $ 2.21 |
Common stock warrants (in shares) | 131,092 | 65,593 | 136,471 | 97,426 |
Stock option awards (in shares) | 0 | 0 | 24 | 0 |
Common stock awards (in shares) | 205,624 | 147,235 | 161,064 | 161,049 |
Dilutive weighted average shares of common stock (in shares) | 8,866,925 | 9,401,858 | 9,295,857 | 9,270,751 |
Diluted earnings per share (in USD per share) | $ 4.17 | $ 2.29 | $ 11.34 | $ 2.13 |
Stock options and common stock awards excluded from the computation of diluted earnings per share | ||||
Anti-dilutive Securities (in shares) | 271,933 | 166,153 | 276,988 | 155,213 |
Market Based | ||||
Stock options and common stock awards excluded from the computation of diluted earnings per share | ||||
Anti-dilutive Securities (in shares) | 68,236 | 87,509 | 68,236 | 87,509 |
Business Segment Reporting - Na
Business Segment Reporting - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Segment Reporting Information [Line Items] | ||||
MSR valuation adjustments, net | $ (95,159) | $ 6,320 | $ (190,989) | $ 57,562 |
Interest expense | $ 50,395 | 40,623 | $ 126,131 | 102,591 |
Restatement Adjustment | ||||
Segment Reporting Information [Line Items] | ||||
MSR valuation adjustments, net | (1,500) | (1,500) | ||
Interest expense | 7,500 | 14,900 | ||
Restatement Adjustment | Servicing | ||||
Segment Reporting Information [Line Items] | ||||
Interest expense | 7,300 | 14,700 | ||
Restatement Adjustment | Originations | ||||
Segment Reporting Information [Line Items] | ||||
Interest expense | $ 200 | $ 200 |
Business Segment Reporting - Sc
Business Segment Reporting - Schedule of Segment Reporting Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Mar. 04, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Results of Operations | ||||||
Servicing and subservicing fees | $ 215,562 | $ 206,585 | $ 643,316 | $ 562,764 | ||
Reverse mortgage revenue, net | 6,885 | 5,035 | 17,379 | 56,162 | ||
Gain (loss) on loans held for sale, net | 18,931 | 59,702 | 16,665 | 108,136 | ||
Other revenue, net | 8,344 | 11,779 | 26,084 | 29,078 | ||
Revenue | 249,722 | 283,101 | 703,444 | 756,140 | ||
MSR valuation adjustments, net | 95,159 | (6,320) | 190,989 | (57,562) | ||
Operating expenses | 141,408 | 145,436 | 412,797 | 434,873 | ||
Other (expense) income: | ||||||
Interest income | 13,732 | 7,869 | 30,590 | 15,993 | ||
Interest expense | (50,395) | (40,623) | (126,131) | (102,591) | ||
Pledged MSR liability expense | (131,635) | (91,160) | (292,616) | (168,820) | ||
Earnings of equity method investee | 3,346 | 932 | 19,281 | 1,282 | ||
Gain (loss) on extinguishment of debt | $ 7,100 | 0 | 0 | 914 | (15,458) | |
Other | (5,538) | 1,900 | (9,936) | 5,554 | ||
Other income (expense), net | (170,490) | (121,082) | (377,898) | (264,040) | ||
Income (loss) before income taxes | 32,983 | 10,263 | 103,738 | (335) | ||
Total Assets | ||||||
Total Assets | 12,360,069 | 12,040,238 | 12,360,069 | 12,040,238 | $ 12,147,123 | |
Servicing | ||||||
Other (expense) income: | ||||||
Servicing expense recovery | (4,300) | (18,400) | ||||
Corporate Items and Other | ||||||
Other (expense) income: | ||||||
Servicing expense recovery | (6,900) | |||||
Servicing and Corporate | ||||||
Other (expense) income: | ||||||
Servicing expense recovery | (25,300) | |||||
Operating Segments | Servicing | ||||||
Results of Operations | ||||||
Servicing and subservicing fees | 214,977 | 205,430 | 641,679 | 556,927 | ||
Reverse mortgage revenue, net | (3,636) | (13,032) | (34,517) | (511) | ||
Gain (loss) on loans held for sale, net | 154 | 31,555 | (14,015) | 39,206 | ||
Other revenue, net | 343 | 303 | 1,107 | 1,302 | ||
Revenue | 211,838 | 224,256 | 594,254 | 596,924 | ||
MSR valuation adjustments, net | 89,569 | (9,117) | 168,300 | (101,755) | ||
Operating expenses | 86,100 | 80,849 | 242,882 | 247,228 | ||
Other (expense) income: | ||||||
Interest income | 2,895 | 2,417 | 9,946 | 4,905 | ||
Interest expense | (30,907) | (21,643) | (76,305) | (57,861) | ||
Pledged MSR liability expense | (131,672) | (91,120) | (292,677) | (168,847) | ||
Earnings of equity method investee | 3,346 | 932 | 19,281 | 1,282 | ||
Gain (loss) on extinguishment of debt | (33) | 0 | ||||
Other | (4,000) | 1,443 | (7,564) | 4,787 | ||
Other income (expense), net | (160,338) | (107,971) | (347,352) | (215,734) | ||
Income (loss) before income taxes | 54,969 | 26,319 | 172,320 | 32,207 | ||
Total Assets | ||||||
Total Assets | 11,322,586 | 10,810,298 | 11,322,586 | 10,810,298 | 10,999,204 | |
Operating Segments | Originations | ||||||
Results of Operations | ||||||
Servicing and subservicing fees | 585 | 1,155 | 1,638 | 5,837 | ||
Reverse mortgage revenue, net | 10,521 | 18,067 | 51,896 | 56,673 | ||
Gain (loss) on loans held for sale, net | 20,746 | 29,604 | 46,059 | 94,471 | ||
Other revenue, net | 6,457 | 9,947 | 19,999 | 23,450 | ||
Revenue | 38,309 | 58,773 | 119,592 | 180,431 | ||
MSR valuation adjustments, net | 3,621 | 1,340 | 7,310 | 18,652 | ||
Operating expenses | 33,256 | 43,966 | 121,966 | 121,877 | ||
Other (expense) income: | ||||||
Interest income | 10,361 | 5,348 | 19,942 | 10,776 | ||
Interest expense | (8,931) | (6,542) | (18,301) | (14,794) | ||
Pledged MSR liability expense | 0 | 0 | 0 | 0 | ||
Earnings of equity method investee | 0 | 0 | 0 | 0 | ||
Gain (loss) on extinguishment of debt | 0 | 0 | ||||
Other | (605) | 122 | (1,731) | 4 | ||
Other income (expense), net | 825 | (1,072) | (90) | (4,014) | ||
Income (loss) before income taxes | 9,499 | 15,075 | 4,846 | 73,192 | ||
Total Assets | ||||||
Total Assets | 731,057 | 865,018 | 731,057 | 865,018 | 823,530 | |
Operating Segments | Corporate Items and Other | ||||||
Results of Operations | ||||||
Servicing and subservicing fees | 0 | 0 | 0 | 0 | ||
Reverse mortgage revenue, net | 0 | 0 | 0 | 0 | ||
Gain (loss) on loans held for sale, net | 0 | 0 | 0 | 0 | ||
Other revenue, net | 1,544 | 1,529 | 4,978 | 4,326 | ||
Revenue | 1,544 | 1,529 | 4,978 | 4,326 | ||
MSR valuation adjustments, net | 0 | 0 | 0 | 0 | ||
Operating expenses | 22,052 | 20,621 | 47,949 | 65,768 | ||
Other (expense) income: | ||||||
Interest income | 476 | 104 | 701 | 312 | ||
Interest expense | (10,557) | (12,438) | (31,525) | (29,936) | ||
Pledged MSR liability expense | 37 | (40) | 61 | 27 | ||
Earnings of equity method investee | 0 | 0 | 0 | 0 | ||
Gain (loss) on extinguishment of debt | 947 | (15,458) | ||||
Other | (933) | 335 | (641) | 763 | ||
Other income (expense), net | (10,977) | (12,039) | (30,457) | (44,292) | ||
Income (loss) before income taxes | (31,485) | (31,131) | (73,428) | (105,734) | ||
Total Assets | ||||||
Total Assets | 306,426 | 364,922 | 306,426 | 364,922 | $ 324,389 | |
Corporate Eliminations | ||||||
Results of Operations | ||||||
Servicing and subservicing fees | 0 | 0 | 0 | 0 | ||
Reverse mortgage revenue, net | 0 | 0 | 0 | 0 | ||
Gain (loss) on loans held for sale, net | (1,969) | (1,457) | (15,379) | (25,541) | ||
Other revenue, net | 0 | 0 | 0 | 0 | ||
Revenue | (1,969) | (1,457) | (15,379) | (25,541) | ||
MSR valuation adjustments, net | 1,969 | 1,457 | 15,379 | 25,541 | ||
Operating expenses | 0 | 0 | 0 | 0 | ||
Other (expense) income: | ||||||
Interest income | 0 | 0 | 0 | 0 | ||
Interest expense | 0 | 0 | 0 | 0 | ||
Pledged MSR liability expense | 0 | 0 | 0 | 0 | ||
Earnings of equity method investee | 0 | 0 | 0 | 0 | ||
Gain (loss) on extinguishment of debt | 0 | 0 | ||||
Other | 0 | 0 | 0 | 0 | ||
Other income (expense), net | 0 | 0 | 0 | 0 | ||
Income (loss) before income taxes | $ 0 | $ 0 | $ 0 | $ 0 |
Business Segment Reporting - _2
Business Segment Reporting - Schedule of Depreciation and Amortization by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Segment Reporting Information [Line Items] | |||||
Depreciation expense | $ 2,480 | $ 2,461 | $ 7,649 | $ 7,527 | |
Amortization of debt issuance costs and discount | 2,443 | 2,205 | 7,526 | 5,438 | |
Amortization of intangibles | 1,207 | 3,332 | 0 | ||
Total Assets | 12,360,069 | 12,040,238 | 12,360,069 | 12,040,238 | $ 12,147,123 |
Servicing | |||||
Segment Reporting Information [Line Items] | |||||
Depreciation expense | 245 | 137 | 669 | 514 | |
Amortization of debt issuance costs and discount | 203 | 129 | 618 | 388 | |
Amortization of intangibles | 1,207 | 3,332 | |||
Servicing | Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Total Assets | 11,322,586 | 10,810,298 | 11,322,586 | 10,810,298 | 10,999,204 |
Originations | |||||
Segment Reporting Information [Line Items] | |||||
Depreciation expense | 108 | 77 | 322 | 125 | |
Amortization of debt issuance costs and discount | 0 | 0 | 0 | 0 | |
Amortization of intangibles | 0 | 0 | |||
Originations | Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Total Assets | 731,057 | 865,018 | 731,057 | 865,018 | 823,530 |
Corporate Items and Other | |||||
Segment Reporting Information [Line Items] | |||||
Depreciation expense | 2,127 | 2,247 | 6,658 | 6,888 | |
Amortization of debt issuance costs and discount | 2,240 | 2,076 | 6,908 | 5,050 | |
Amortization of intangibles | 0 | 0 | |||
Corporate Items and Other | Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Total Assets | $ 306,426 | $ 364,922 | $ 306,426 | $ 364,922 | $ 324,389 |
Regulatory Requirements - Narra
Regulatory Requirements - Narrative (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Public Utilities, General Disclosures [Line Items] | ||
Net worth requirement | $ 364,900 | |
Restrictive liquidity requirements | 125,000 | |
Cash and cash equivalents | 226,570 | $ 192,792 |
PHH Mortgage Corporation | ||
Public Utilities, General Disclosures [Line Items] | ||
Net worth | 678,700 | |
Restrictive liquidity requirements | 40,300 | |
Cash and cash equivalents | $ 205,300 |
Commitments - Narrative (Detail
Commitments - Narrative (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Other Commitments [Line Items] | ||
Threshold of outstanding principal balance on maximum claim amount (as a percent) | 98% | |
Floating Rate Reverse Mortgage Loans | ||
Other Commitments [Line Items] | ||
Additional borrowing capacity to borrowers | $ 1,700 | $ 1,500 |
Funded amount in connection with reverse mortgage loans | 181.2 | |
Forward Mortgage Loan Interest Rate Lock Commitments | ||
Other Commitments [Line Items] | ||
Short-term commitments to lend | 1,300 | |
Reverse loans IRLCs | ||
Other Commitments [Line Items] | ||
Short-term commitments to lend | $ 19.2 | |
Customer Concentration Risk | Unpaid Principal Balance | Rithm | ||
Other Commitments [Line Items] | ||
Concentration risk (percent) | 18% | |
Customer Concentration Risk | Loan Count | Rithm | ||
Other Commitments [Line Items] | ||
Concentration risk (percent) | 28% | |
Customer Concentration Risk | Delinquent Loans | Rithm | ||
Other Commitments [Line Items] | ||
Concentration risk (percent) | 69% |
Commitments - Schedule of Activ
Commitments - Schedule of Activity Related to HMBS Repurchases (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) security | |
Long-term Purchase Commitment [Roll Forward] | |
Beginning balance, repurchase securities, number | security | 586 |
Additions, repurchase securities, number | security | 589 |
Recoveries, net, repurchase securities, number | security | (517) |
Transfers, repurchase securities, number | security | 0 |
Change in value, repurchase securities, number | security | 0 |
Ending balance, repurchase securities, number | security | 658 |
Beginning balance, repurchase securities, amount | $ | $ 129,135 |
Additions, repurchase securities, amount | $ | 154,267 |
Recoveries, net, repurchase securities, amount | $ | (133,514) |
Transfers, repurchase securities, amount | $ | 0 |
Change in value, repurchase securities, amount | $ | (2,713) |
Ending balance, repurchase securities, amount | $ | $ 147,175 |
Active | |
Long-term Purchase Commitment [Roll Forward] | |
Beginning balance, repurchase securities, number | security | 138 |
Additions, repurchase securities, number | security | 435 |
Recoveries, net, repurchase securities, number | security | (370) |
Transfers, repurchase securities, number | security | (11) |
Change in value, repurchase securities, number | security | 0 |
Ending balance, repurchase securities, number | security | 192 |
Beginning balance, repurchase securities, amount | $ | $ 35,322 |
Additions, repurchase securities, amount | $ | 115,149 |
Recoveries, net, repurchase securities, amount | $ | (98,782) |
Transfers, repurchase securities, amount | $ | (4,791) |
Change in value, repurchase securities, amount | $ | 74 |
Ending balance, repurchase securities, amount | $ | $ 46,972 |
Inactive | |
Long-term Purchase Commitment [Roll Forward] | |
Beginning balance, repurchase securities, number | security | 448 |
Additions, repurchase securities, number | security | 154 |
Recoveries, net, repurchase securities, number | security | (147) |
Transfers, repurchase securities, number | security | 11 |
Change in value, repurchase securities, number | security | 0 |
Ending balance, repurchase securities, number | security | 466 |
Beginning balance, repurchase securities, amount | $ | $ 93,813 |
Additions, repurchase securities, amount | $ | 39,118 |
Recoveries, net, repurchase securities, amount | $ | (34,732) |
Transfers, repurchase securities, amount | $ | 4,791 |
Change in value, repurchase securities, amount | $ | (2,787) |
Ending balance, repurchase securities, amount | $ | $ 100,203 |
Contingencies - Narrative (Deta
Contingencies - Narrative (Details) $ in Millions | 1 Months Ended | 9 Months Ended | ||
Apr. 30, 2017 state | Sep. 30, 2022 USD ($) loan case issuer | Sep. 30, 2021 USD ($) loan | Mar. 04, 2021 count | |
Loss Contingency [Abstract] | ||||
Accrued penalty | $ 47.1 | |||
Number of cases | case | 5 | |||
Number of counts granted summary judgement | count | 9 | |||
Number of states charging with regulatory action | state | 29 | |||
Warranty repurchase demands unpaid principal balance | $ 53.3 | $ 59.6 | ||
Warranty repurchase demands number of loans | loan | 280 | 301 | ||
Number of mortgage issuers | issuer | 5 |
Contingencies - Schedule of Ind
Contingencies - Schedule of Indemnification Obligations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Indemnification Obligations Liability [Roll Forward] | ||||
Beginning balance | $ 49,430 | $ 40,374 | ||
Provision (reversal) for representation and warranty obligations | 1,800 | 1,483 | ||
New production liability | 2,299 | 3,227 | ||
Charge-offs and other | (2,730) | (2,530) | ||
Ending balance | $ 50,798 | $ 42,554 | 50,798 | 42,554 |
Servicing and subservicing fees | $ 215,562 | $ 206,585 | $ 643,316 | $ 562,764 |
Subsequent Events - Narrative (
Subsequent Events - Narrative (Details) $ / shares in Units, $ in Millions | 1 Months Ended | 9 Months Ended | |||
Oct. 31, 2022 USD ($) $ / shares shares | Sep. 30, 2022 USD ($) $ / shares | Nov. 02, 2022 USD ($) | May 31, 2022 USD ($) | May 20, 2022 USD ($) | |
Subsequent Event [Line Items] | |||||
Average price paid per share (in usd per share) | $ / shares | $ 28.93 | ||||
Share repurchase program authorized amount | $ 50 | $ 50 | |||
MAV Canopy HoldCo I, LLC | |||||
Subsequent Event [Line Items] | |||||
Aggregate capital contributions | $ 139.9 | ||||
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Shares repurchased (in shares) | shares | 344,246 | ||||
Repurchase of common stock, value | $ 9 | ||||
Average price paid per share (in usd per share) | $ / shares | $ 26.13 | ||||
Subsequent Event | MAV Canopy HoldCo I, LLC | |||||
Subsequent Event [Line Items] | |||||
Aggregate capital contributions | $ 250 | ||||
Subsequent Event | Ocwen Financial Corporation | |||||
Subsequent Event [Line Items] | |||||
Percentage of aggregate capital contributions | 0.15 |