Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2023 | Aug. 01, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2023 | |
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, $0.01 Par Value | |
Trading Symbol | OCN | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 7,677,008 | |
Entity Central Index Key | 0000873860 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
UNAUDITED CONSOLIDATED BALANCE
UNAUDITED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Assets | ||||||
Cash and cash equivalents | $ 213.4 | $ 208 | ||||
Restricted cash ($67.2 and $17.6 related to variable interest entities (VIEs)) | 119.1 | 66.2 | ||||
Mortgage servicing rights (MSRs), at fair value | 2,675.7 | 2,665.2 | ||||
Advances, net ($503.3 and $608.4 related to VIEs) | 602.7 | 718.9 | ||||
Loans held for sale ($1,352.9 and $617.8 carried at fair value) ($241.4 and $0.0 related to VIEs) | 1,356.5 | 622.7 | ||||
Loans held for investment, at fair value ($6.0 and $6.7 related to VIEs) | 7,680.7 | 7,510.8 | ||||
Receivables, net ($44.2 and $0.0 related to VIEs) | 188.6 | 180.8 | ||||
Investment in equity method investee | 34.6 | 42.2 | ||||
Premises and equipment, net | 16.9 | 20.2 | ||||
Other assets | 327.6 | 364.2 | ||||
Total assets | 13,216 | 12,399.2 | $ 12,107.7 | |||
Liabilities | ||||||
Home Equity Conversion Mortgage-Backed Securities (HMBS) related borrowings, at fair value | 7,486.4 | $ 7,470.6 | 7,326.8 | 7,155.3 | $ 7,118.8 | $ 6,885 |
Other financing liabilities, at fair value ($319.7 and $329.8 due to related party) ($6.0 and $6.7 related to VIEs) | 1,274 | 1,137.4 | ||||
Advance match funded liabilities ($429.5 and $512.5 related to VIEs) | 430.4 | 513.7 | ||||
Mortgage loan financing facilities, net ($238.3 and $— related to VIEs) | 1,515 | 702.7 | ||||
MSR financing facilities, net | 864.8 | 953.8 | ||||
Senior notes, net ($234.9 and $230.2 due to related party) | 605 | 599.6 | ||||
Other liabilities ($13.4 and $15.8 carried at fair value) | 606.6 | 708.5 | ||||
Total liabilities | 12,782.2 | 11,942.5 | ||||
Commitments and Contingencies (Notes 19 and 20) | ||||||
Stockholders’ Equity | ||||||
Common stock, $.01 par value; 13,333,333 shares authorized; 7,677,008 and 7,526,117 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively | 0.1 | 0.1 | ||||
Additional paid-in capital | 548.7 | 547 | ||||
Accumulated deficit | (112.6) | (87.9) | ||||
Accumulated other comprehensive loss, net of income taxes | (2.4) | (2.5) | ||||
Total stockholders’ equity | 433.8 | $ 416.3 | 456.7 | $ 543.9 | $ 534.1 | $ 476.7 |
Total liabilities and stockholders’ equity | $ 13,216 | $ 12,399.2 |
UNAUDITED CONSOLIDATED BALANC_2
UNAUDITED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Restricted cash | $ 119.1 | $ 66.2 |
Advances, net | 602.7 | 718.9 |
Loans held for sale, at fair value | 1,352.9 | 617.8 |
Loans held for sale | 1,356.5 | 622.7 |
Loans held for investment, at fair value | 7,680.7 | 7,510.8 |
Other assets, at fair value | 9.3 | 8 |
Other assets | 327.6 | 364.2 |
Other financing liabilities, due to related parties | 319.7 | 329.8 |
Other financing liabilities, at fair value | 1,274 | 1,137.4 |
Advance match funded liabilities | 430.4 | 513.7 |
Senior notes, due to related parties | 234.9 | 230.2 |
Other liabilities, fair value | $ 13.4 | $ 15.8 |
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) | 7,677,008 | 7,526,117 |
Common stock, shares, outstanding (in shares) | 7,677,008 | 7,526,117 |
Commitments and Contingencies (Notes 19 and 20) | ||
Receivables, net ($44.2 and $0.0 related to VIEs) | 188.6 | 180.8 |
Mortgage servicing rights (MSRs), at fair value | 2,675.7 | 2,665.2 |
Cash and cash equivalents | 213.4 | 208 |
Other liabilities ($13.4 and $15.8 carried at fair value) | 606.6 | 708.5 |
Liabilities | 12,782.2 | 11,942.5 |
Investment in equity method investee | 34.6 | 42.2 |
Total Assets | 13,216 | 12,399.2 |
Home Equity Conversion Mortgage-Backed Securities (HMBS) related borrowings, at fair value | 7,486.4 | 7,326.8 |
Mortgage loan financing facilities, net ($238.3 and $— related to VIEs) | 1,515 | 702.7 |
MSR financing facilities, net | 864.8 | 953.8 |
Senior notes, net ($234.9 and $230.2 due to related party) | 605 | 599.6 |
Additional paid-in capital | 548.7 | 547 |
Accumulated deficit | (112.6) | (87.9) |
Accumulated other comprehensive loss, net of income taxes | (2.4) | (2.5) |
Premises and equipment, net | 16.9 | 20.2 |
Common stock, $.01 par value; 13,333,333 shares authorized; 7,677,008 and 7,526,117 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively | 0.1 | 0.1 |
Cumulative effect of new accounting pronouncement | 433.8 | 456.7 |
Liabilities and Equity | 13,216 | 12,399.2 |
Variable Interest Entity, Primary Beneficiary | ||
Restricted cash | 67.2 | 17.6 |
Advances, net | 503.3 | 608.4 |
Loans held for sale | 241.4 | 0 |
Loans held for investment, at fair value | 6 | 6.7 |
Other assets | 13.7 | 3.2 |
Other financing liabilities, at fair value | 6 | 6.7 |
Advance match funded liabilities | 429.5 | 512.5 |
Receivables, net ($44.2 and $0.0 related to VIEs) | 44.2 | 0 |
Mortgage loan financing facilities, net ($238.3 and $— related to VIEs) | $ 238.3 | $ 0 |
UNAUDITED CONSOLIDATED STATEMEN
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Revenue | ||||
Servicing and subservicing fees | $ 237,600 | $ 215,100 | $ 469,700 | $ 427,800 |
Gain (loss) on reverse loans held for investment and HMBS-related borrowings, net | 700 | (2,600) | 21,900 | 10,500 |
Gain (loss) on loans held for sale, net | 25,300 | 900 | 28,100 | (2,300) |
Other revenue, net | 8,500 | 8,700 | 14,100 | 17,700 |
Total revenue | 272,000 | 222,200 | 533,900 | 453,700 |
MSR valuation adjustments, net | (48,900) | 22,100 | (117,900) | 57,500 |
Operating expenses | ||||
Compensation and benefits | 57,700 | 83,900 | 115,700 | 151,900 |
Servicing and origination | 17,600 | 19,100 | 33,300 | 33,300 |
Technology and communications | 13,000 | 14,700 | 26,400 | 29,600 |
Occupancy and equipment | 7,700 | 9,700 | 16,500 | 19,700 |
Other expenses | 5,100 | 8,400 | 10,100 | 16,100 |
Total operating expenses | 84,300 | 144,400 | 198,400 | 271,400 |
Other income (expense) | ||||
Interest income | 20,300 | 9,700 | 34,400 | 16,900 |
Interest expense ($10.9, $10.5, $21.7 and $20.9 on amounts due to related party) | (68,300) | (37,900) | (130,500) | (75,700) |
Pledged MSR liability expense ($13.2, $15.2, $27.3 and $29.5 on amounts due to related party) | (73,000) | (63,000) | (143,300) | (122,700) |
Earnings of equity method investee | 2,900 | 3,900 | 3,100 | 15,900 |
Other, net | (4,400) | (3,300) | (3,200) | (3,500) |
Total other income (expense), net | (122,500) | (90,400) | (239,500) | (169,100) |
Income (loss) before income taxes | 16,300 | 9,500 | (22,000) | 70,800 |
Income tax expense (benefit) | 900 | (900) | 2,700 | 2,300 |
Net income (loss) | $ 15,500 | $ 10,400 | $ (24,700) | $ 68,400 |
Earnings (loss) per share | ||||
Basic (in USD per share) | $ 2.02 | $ 1.12 | $ (3.25) | $ 7.41 |
Diluted (in USD per share) | $ 1.95 | $ 1.11 | $ (3.25) | $ 7.19 |
Weighted average common shares outstanding | ||||
Basic (in shares) | 7,652,563 | 9,257,089 | 7,593,391 | 9,236,221 |
Diluted (in shares) | 7,919,587 | 9,366,606 | 7,593,391 | 9,514,202 |
Servicing and subservicing fees | $ 237,600 | $ 215,100 | $ 469,700 | $ 427,800 |
Gain (loss) on reverse loans held for investment and HMBS-related borrowings, net | 700 | (2,600) | 21,900 | 10,500 |
Other revenue, net | 8,500 | 8,700 | 14,100 | 17,700 |
Revenue | 272,000 | 222,200 | 533,900 | 453,700 |
MSR valuation adjustments, net | 48,900 | (22,100) | 117,900 | (57,500) |
Interest expense | 68,300 | 37,900 | 130,500 | 75,700 |
MSR Pledged liability expense | $ 73,000 | $ 63,000 | $ 143,300 | $ 122,700 |
Basic (in shares) | 7,652,563 | 9,257,089 | 7,593,391 | 9,236,221 |
Professional Fees (Income) | $ (16,900) | $ 8,700 | $ (3,600) | $ 20,900 |
OFC Senior Secured Notes | ||||
Other income (expense) | ||||
Interest expense ($10.9, $10.5, $21.7 and $20.9 on amounts due to related party) | (10,900) | (10,500) | (21,700) | (20,900) |
Interest expense | $ 10,900 | $ 10,500 | $ 21,700 | $ 20,900 |
UNAUDITED CONSOLIDATED STATEM_2
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 15,500 | $ 10,400 | $ (24,700) | $ 68,400 |
Other comprehensive income (loss), net of income taxes: | ||||
Change in unfunded pension plan obligation liability | 0 | 100 | 0 | 200 |
Other | 0 | 0 | 100 | 0 |
Comprehensive income (loss) | $ 15,500 | $ 10,500 | $ (24,600) | $ 68,600 |
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, 2021 | 9,208,312 | ||||
Beginning balance at Dec. 31, 2021 | $ 476,700 | $ 100 | $ 592,600 | $ (113,600) | $ (2,400) |
Net income (loss) | 68,400 | 68,400 | |||
Equity-based compensation and other (in shares) | 64,780 | ||||
Equity-based compensation and other | 800 | $ 0 | 800 | ||
Other comprehensive income, net of income taxes | 200 | 200 | |||
Ending balance (in shares) at Jun. 30, 2022 | 9,189,005 | ||||
Ending balance at Jun. 30, 2022 | 543,900 | $ 100 | 591,100 | (45,200) | (2,100) |
Repurchase of common stock (in shares) | (84,087) | ||||
Repurchase of common stock | (2,300) | $ 0 | (2,300) | ||
Beginning balance (in shares) at Mar. 31, 2022 | 9,243,658 | ||||
Beginning balance at Mar. 31, 2022 | 534,100 | $ 100 | 591,800 | (55,500) | (2,300) |
Net income (loss) | 10,400 | 10,400 | |||
Equity-based compensation and other (in shares) | 29,434 | ||||
Equity-based compensation and other | 1,600 | $ 0 | 1,600 | ||
Other comprehensive income, net of income taxes | 100 | 100 | |||
Ending balance (in shares) at Jun. 30, 2022 | 9,189,005 | ||||
Ending balance at Jun. 30, 2022 | 543,900 | $ 100 | 591,100 | (45,200) | (2,100) |
Repurchase of common stock (in shares) | (84,087) | ||||
Repurchase of common stock | $ (2,300) | $ 0 | (2,300) | ||
Beginning balance (in shares) at Dec. 31, 2022 | 7,526,117 | 7,526,117 | |||
Beginning balance at Dec. 31, 2022 | $ 456,700 | $ 100 | 547,000 | (87,900) | (2,500) |
Net income (loss) | (24,700) | (24,700) | |||
Equity-based compensation and other (in shares) | 150,891 | ||||
Equity-based compensation and other | 1,700 | $ 0 | 1,700 | ||
Other comprehensive income, net of income taxes | $ 100 | 100 | |||
Ending balance (in shares) at Jun. 30, 2023 | 7,677,008 | 7,677,008 | |||
Ending balance at Jun. 30, 2023 | $ 433,800 | $ 100 | 548,700 | (112,600) | (2,400) |
Beginning balance (in shares) at Mar. 31, 2023 | 7,638,611 | ||||
Beginning balance at Mar. 31, 2023 | 416,300 | $ 100 | 546,700 | (128,100) | (2,400) |
Net income (loss) | 15,500 | 15,500 | |||
Equity-based compensation and other (in shares) | 38,397 | ||||
Equity-based compensation and other | 2,000 | $ 0 | 2,000 | ||
Other comprehensive income, net of income taxes | $ 0 | 0 | |||
Ending balance (in shares) at Jun. 30, 2023 | 7,677,008 | 7,677,008 | |||
Ending balance at Jun. 30, 2023 | $ 433,800 | $ 100 | $ 548,700 | $ (112,600) | $ (2,400) |
UNAUDITED CONSOLIDATED STATEM_4
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Cash flows from operating activities | ||
Net income (loss) | $ (24,700) | $ 68,400 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
MSR valuation adjustment, net increase (decrease) | 162,900 | (500) |
Increase (Decrease) in Derivative Assets and Liabilities | (49,700) | (7,900) |
Provision for (reversal of) representation and warranty obligations | 3,300 | (2,000) |
Loss on sale of MSRs, net | 300 | 200 |
Provision for bad debts (advances and receivables) | 12,500 | 9,800 |
Depreciation | 3,400 | 5,200 |
Amortization of debt issuance costs and discount | 6,100 | 5,100 |
Amortization of intangibles | 2,900 | 2,100 |
Equity-based compensation expense | 4,100 | 1,300 |
Gain on extinguishment of debt | 0 | (900) |
Net loss (gain) on valuation of loans held for investment and HMBS-related borrowings | (13,700) | 16,200 |
Earnings of equity method investee | (3,100) | (15,900) |
Distribution of earnings from equity method investee | 3,100 | 12,000 |
Loss (gain) on loans held for sale, net | (28,100) | 2,300 |
Origination and purchase of loans held for sale | (5,412,300) | (8,154,600) |
Proceeds from sale and collections of loans held for sale | 4,624,300 | 8,275,200 |
Changes in assets and liabilities: | ||
Decrease in advances, net | 114,000 | 105,900 |
Decrease in receivables and other assets, net | 12,500 | 32,100 |
Decrease in other liabilities | (56,800) | (43,600) |
Other, net | (9,600) | 500 |
Net cash provided by (used in) operating activities | (648,700) | 310,900 |
Cash flows from investing activities | ||
Origination of loans held for investment | (507,400) | (1,144,900) |
Principal payments received on loans held for investment | 528,000 | 995,700 |
Acquisition of loans held for investment, net | 0 | (3,600) |
Acquisition of reverse mortgage subservicing agreements | 0 | (6,900) |
Purchase of MSRs | (52,300) | (103,500) |
Proceeds from sale of MSRs | 300 | 134,500 |
Proceeds from sale of advances | 5,100 | 800 |
Additions to premises and equipment | (1,800) | (2,200) |
Purchase of real estate | (10,200) | (200) |
Proceeds from sale of real estate | 8,100 | 4,400 |
Proceeds from sale of premises and equipment | 100 | 100 |
Distribution from (investment in) equity method investee, net | 7,600 | |
Distribution from (investment in) equity method investee, net | (11,600) | |
Net cash used in investing activities | (22,500) | (137,300) |
Cash flows from financing activities | ||
Repayment of advance match funded liabilities, net | (83,200) | (35,300) |
Repayment of other financing liabilities | (45,700) | (57,600) |
Proceeds from (repayment of) mortgage loan financing facilities, net | 816,000 | (305,800) |
Proceeds from MSR financing facilities | 443,400 | 277,700 |
Repayment of MSR financing facilities | (531,800) | (188,900) |
Repurchase and repayment of Senior notes | 0 | (23,600) |
Payment of debt issuance costs | (3,400) | (1,200) |
Proceeds from other financing liabilities - Sale of MSRs accounted for as secured financing | 88,300 | 66,200 |
Proceeds from other financing liabilities - Excess Servicing Spread (ESS) liability | 68,700 | 0 |
Proceeds from sale of Home Equity Conversion Mortgages (HECM, or reverse mortgages) accounted for as a financing (HMBS-related borrowings) | 502,300 | 1,149,900 |
Repayment of HMBS-related borrowings | (525,100) | (993,500) |
Net cash provided by (used in) financing activities | 729,500 | (114,400) |
Net increase in cash, cash equivalents and restricted cash | 58,300 | 59,100 |
Cash, cash equivalents and restricted cash at beginning of year | 274,200 | 263,400 |
Cash, cash equivalents and restricted cash at end of period | 332,500 | 322,600 |
Supplemental non-cash investing and financing activities: | ||
Loans held for investment acquired at fair value | 0 | 224,100 |
HMBS-related borrowings assumed at fair value | 0 | (219,500) |
Purchase price holdback | 0 | (900) |
Net cash paid to acquire loans held for investment | 0 | 3,600 |
Right-of-use asset | (1,500) | 8,600 |
Lease liability | (1,500) | 8,600 |
Transfers of loans held for sale to real estate owned (REO) | 11,500 | 400 |
Supplemental information - Sale and deconsolidation of subsidiary | ||
Cash and cash equivalents | 213,400 | 255,900 |
Debt service accounts | 71,200 | 13,600 |
Other restricted cash | 47,900 | 53,100 |
Total cash, cash equivalents and restricted cash reported in the statements of cash flows | 332,500 | 322,600 |
Repurchase of common stock | $ 0 | $ (2,300) |
UNAUDITED CONSOLIDATED STATEM_5
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Interest expense | $ 68.3 | $ 37.9 | $ 130.5 | $ 75.7 |
Other, net | (4.4) | (3.3) | (3.2) | (3.5) |
Affiliated Entity | ||||
Pledged MSR liability expense, related party | 13.2 | 15.2 | 27.3 | 29.5 |
OFC Senior Secured Notes | ||||
Interest expense | $ 10.9 | $ 10.5 | $ 21.7 | $ 20.9 |
Organization and Basis of Prese
Organization and Basis of Presentation | 6 Months Ended |
Jun. 30, 2023 | |
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). 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 GSE underwriting standards) 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, which 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 4,600 employees at June 30, 2023 of which approximately 3,100 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 six months ended June 30, 2023 are not necessarily indicative of the results that may be expected for any other interim period or for the year ending December 31, 2023. 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, 2022. Change in Presentation Effective in the fourth quarter of 2022, in our consolidated statements of operations we present all fair value gains and losses of Other financing liabilities, at fair value in MSR valuation adjustments, net (previously reported in Pledged MSR liability expense). In addition, effective December 31, 2022, we changed our accounting policy from the nature of the distribution approach to the cumulative earnings approach for classifying distributions from our equity method investee MAV Canopy between operating and investing cash flows. The consolidated statements of operations for the three and six months ended June 30, 2022, and the consolidated statements of cash flows for the six months ended June 30, 2022, have been recast to conform to the current presentation policy. For additional information, including the impact on previously reported periods, see the “Change in Presentation” section of Note 1 to our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2022. 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 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 GAAP). Our adoption of this ASU on January 1, 2023 did not have a material impact on our consolidated financial statements. Financial Instruments—Credit Losses (ASC 326) Troubled Debt Restructurings and Vintage Disclosures (ASU 2022-02) The amendments in this ASU are related to 1) troubled debt restructurings (TDRs) and 2) vintage disclosures which affect all entities after they have adopted ASU 2016-13. The amendments eliminate the accounting guidance for TDRs by creditors in Subtopic 310-40 Receivables – Troubled Debt Restructurings by Creditors, while enhancing disclosure requirements for certain loan refinancing and restructurings by creditors when a borrower is experiencing financial difficulty. Specifically, rather than applying the recognition and measurement guidance for TDRs, an entity must apply the loan refinancing and restructuring guidance in ASC 310-20-35-9 through 35-11 to determine whether a modification results in a new loan or a continuation of an existing loan. The amendments in this ASU also requires an entity to disclose current-period gross write-offs by year of origination for financing receivables and net investments in leases with the scope of ASC 326 – Financial Instruments – Credit Losses – Measured at Amortized Cost. Our adoption of this ASU on January 1, 2023 did not have a material impact on our consolidated financial statements. Accounting Standards Issued but Not Yet Adopted Leases (Topic 842) Common Control Arrangements (ASU 2023-01) The amendments in this ASU affect 1) all lessees that are a party to a lease between entities under common control in which there are leasehold improvements, and apply to all entities and 2) require leasehold improvements associated with common control leases be a) amortized by the lessee over the useful life of the leasehold improvements to the common group (regardless of lease term) and b) accounted for as a transfer between two entities under common control through an adjustment to equity, if and when the lessee no longer controls the use of the underlying asset. The amendments in this ASU are effective for us on January 1, 2024. 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 | 6 Months Ended |
Jun. 30, 2023 | |
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 advances and (3) MSR financings. Financing transactions that do not use SPEs or VIEs are disclosed in Note 12 – Borrowings. 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 June 30, Six Months Ended June 30, 2023 2022 2023 2022 Proceeds received from securitizations $ 2,298.1 $ 4,109.6 $ 4,614.9 $ 7,697.8 Servicing fees collected (1) 28.2 23.9 55.2 45.6 Purchases of previously transferred assets, net of claims reimbursed (4.0) (4.8) (7.1) (6.8) $ 2,322.4 $ 4,128.7 $ 4,663.0 $ 7,736.6 (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 $31.5 million and $62.6 million during the three and six months ended June 30, 2023, respectively, and $60.2 million and $106.0 million during the three and six months ended June 30, 2022, respectively. Certain obligations arise from the agreements associated with our transfers of loans. Under these agreements, we may be obligated to repurchase the loans, or otherwise indemnify or reimburse the investor or insurer for losses incurred due to material breach of contractual representations and warranties. 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 the Loan Put-Back and Related Contingencies section of Note 20 – 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: June 30, 2023 December 31, 2022 Carrying value of assets MSRs, at fair value $ 583.2 $ 524.3 Advances 62.0 75.9 UPB of loans transferred (1) 40,875.0 37,571.1 Maximum exposure to loss (2) $ 41,520.2 $ 38,171.2 (1) Includes $8.0 billion and $6.8 billion of loans delivered to Ginnie Mae as of June 30, 2023 and December 31, 2022, respectively, and includes loan modifications repurchased and delivered through the Ginnie Mae Early Buyout Program (EBO). (2) The maximum exposure to loss in the table above is primarily based on the remaining UPB of loans serviced and assumes all loans were deemed worthless as of the reporting date. It does not take into consideration the proceeds from the underlying collateral liquidation, recoveries or any other recourse available to us, including from mortgage insurance, guarantees or correspondent sellers. We do not believe the maximum exposure to loss from our involvement with these previously transferred loans is representative of the actual loss we are likely to incur based on our contractual rights and historical loss experience and projections. Also, refer to the Loan Put-Back and Related Contingencies section in Note 20 – Contingencies. At June 30, 2023 and December 31, 2022, 2.2% and 2.5%, 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 7.1% and 8.3%, 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. As the transfers of the HECM loans do not qualify for sale accounting, we account for these transfers as financings, with the HECM loans classified as Loans held for investment, at fair value, on our unaudited consolidated balance sheets. Financing of Loans Held for Sale, Receivables and Other Assets using SPEs In 2021, we consolidated an SPE (trust) in connection with a warehouse mortgage loan financing facility structured as a gestation repurchase facility whereby Agency mortgage loans are transferred by PMC to the trust for collateralization purposes. As of December 31, 2022, the certificates issued by the trust and pledged as collateral had been reduced to zero. As of June 30, 2023, $100.3 million loans held for sale were pledged as collateral for $100.0 million debt certificates issued by the trust. In June 2023, we completed a private placement securitization of HECM loans that are insured by the FHA and REO properties, also referred to as reverse mortgage buyouts. The securitized assets include assets originated by PHH and assets acquired in April 2023. The securitization trust, Ocwen Loan Investment Trust 2023-HB1 (OLIT) issued senior and mezzanine class Notes to third party investors. We retain certain mezzanine class Notes and ownership interests and service the underlying assets. We determined we were the primary beneficiary, thus consolidate the securitization trust, OLIT and related depositor. Recourse for the Notes is limited to the assets of OLIT. Also refer to Note 12 – Borrowings . The table below presents the carrying value and classification of the assets and liabilities reported on our consolidated balance sheet that are associated with the securitization reverse mortgage loans buyouts and financing liabilities: June 30, 2023 Mortgage loans (Loans held for sale, at fair value) $ 141.1 Receivables, net 44.2 REO (Other Assets) 12.5 Debt service accounts (Restricted cash) 50.8 Outstanding borrowings (Mortgage loan financing facilities, net) 264.9 Unamortized discount and debt issuance costs (Mortgage loan financing facilities, net) 26.6 Prepaid interest - Interest Reserve Account (Other assets) 0.7 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 - that we include in our consolidate financial statements - in exchange for cash. The table below presents the carrying value and classification of the assets and liabilities of the advance financing facilities: June 30, 2023 December 31, 2022 Match funded advances (Advances, net) $ 503.3 $ 608.4 Debt service accounts (Restricted cash) 14.6 15.8 Unamortized deferred lender fees (Other assets) 0.5 2.3 Prepaid interest (Other assets) 0.7 0.9 Advance match funded liabilities 429.5 512.5 MSR Financings using SPEs We consolidate two SPEs (PMC ESR Trusts) in connection with a third-party financing facility secured by certain of PMC’s Fannie Mae and Freddie Mac MSRs (Agency MSRs) and one SPE (PMC PLS ESR Issuer LLC) in connection with our PLS MSR financing facility (Ocwen Excess Spread-Collateralized Notes, Series 2022-PLS1 Class A). The table below presents the carrying value and classification of the assets and liabilities of the Agency MSR financing facility and the PLS Notes facility: June 30, 2023 December 31, 2022 MSRs pledged (MSRs, at fair value) $ 521.9 $ 696.9 Debt service account (Restricted cash) 1.8 1.8 Unamortized deferred lender fees (Other assets) 1.3 1.1 Outstanding borrowings (MSR financing facilities, net) 285.2 366.5 Unamortized debt issuance costs (MSR financing facilities, net) 0.6 0.8 |
Fair Value
Fair Value | 6 Months Ended |
Jun. 30, 2023 | |
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: June 30, 2023 December 31, 2022 Level Carrying Value Fair Value Carrying Value Fair Value Financial assets Loans held for sale Loans held for sale, at fair value (a) (f) 3, 2 $ 1,352.9 $ 1,352.9 $ 617.8 $ 617.8 Loans held for sale, at lower of cost or fair value (b) 3 3.7 3.7 4.9 4.9 Total Loans held for sale $ 1,356.6 $ 1,356.6 $ 622.7 $ 622.7 Loans held for investment, at fair value Loans held for investment - Reverse mortgages (a) 3 $ 7,674.8 $ 7,674.8 $ 7,504.1 $ 7,504.1 Loans held for investment - Restricted for securitization investors (a) 3 6.0 6.0 6.7 6.7 Total Loans held for investment, at fair value $ 7,680.7 $ 7,680.7 $ 7,510.8 $ 7,510.8 Advances, net (c) 3 $ 602.7 $ 602.7 $ 718.9 $ 718.9 Receivables, net (c) 3 188.6 188.6 180.8 180.8 June 30, 2023 December 31, 2022 Level Carrying Value Fair Value Carrying Value Fair Value Financial liabilities Advance match funded liabilities (c) 3 $ 430.4 $ 430.4 $ 513.7 $ 513.7 Financing liabilities, at fair value HMBS-related borrowings (a) 3 $ 7,486.4 $ 7,486.4 $ 7,326.8 $ 7,326.8 Other financing liabilities Financing liability - Pledged MSR liability (a) 3 $ 1,009.5 $ 1,009.5 $ 931.7 $ 931.7 Financing liability - Excess Servicing Spread (ESS) (a) 3 258.5 258.5 199.0 199.0 Financing liability - Owed to securitization investors (a) 3 6.0 6.0 6.7 6.7 Total Other financing liabilities $ 1,274.0 $ 1,274.0 $ 1,137.4 $ 1,137.4 Mortgage loan financing facilities (c) (d) 3 1,515.0 1,515.0 702.7 702.7 MSR financing facilities (c) (e) 3 864.8 845.3 953.8 932.1 Senior notes: PMC Senior secured notes due 2026 (c) (e) 2 $ 370.1 $ 335.1 $ 369.4 $ 331.4 OFC Senior secured notes due 2027 (c) (e) 3 234.9 226.5 230.2 223.9 Total Senior notes $ 605.0 $ 561.6 $ 599.6 $ 555.2 Derivative financial instrument assets (liabilities), net Interest rate lock commitments (IRLCs) (a) 3 $ 1.4 $ 1.4 $ (0.7) $ (0.7) Forward sales of loans (a) 1 — — 0.5 0.5 TBA / Forward mortgage-backed securities (MBS) trades (a) 1 (0.7) (0.7) (0.7) (0.7) Interest rate swap futures (a) 1 (10.9) (10.9) (13.6) (13.6) TBA forward pipeline trades (a) 1 7.0 7.0 6.6 6.6 Option contracts (a) 1 (1.2) (1.2) — — Other (a) 3 (0.1) (0.1) (0.1) (0.1) MSRs (a) 3 $ 2,675.7 $ 2,675.7 $ 2,665.2 $ 2,665.2 (a) Measured at fair value on a recurring basis in our financial statements. (b) Measured at fair value on a non-recurring basis in our financial statements. (c) Disclosed, but not measured at fair value in our financial statements. (d) As of June 30, 2023, the carrying value of the OLIT Notes approximated fair value as the notes were recently issued on June 21, 2023. (e) The carrying values are net of unamortized debt issuance costs and discount. See Note 12 – Borrowings for additional information . (f) Loans repurchased from Ginnie Mae securitizations with a fair value of $197.4 million (includes loans which were previously classified as Level 2) and $32.1 million at June 30, 2023 and December 31, 2022, 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 June 30, 2023 Beginning balance $ 6.2 $ (6.2) $ 23.3 $ (263.1) $ 4.8 Purchases, issuances, sales and settlements Purchases and other — — 240.4 — — Issuances (1) — — — — 4.4 Sales — — (38.5) — — Settlements (2) (0.2) 0.2 (25.8) 8.1 — Transfers: Loans held for investment, at fair value — — 1.5 — — Loans held for sale, at fair value (1) — — — — (10.8) REO (Other assets) — — (7.1) — — Receivables, net — — (15.6) — — Capitalization of advances on Ginnie Mae modifications — — 1.7 — — Other — — 2.8 — — Net addition (disposition/derecognition) (0.2) 0.2 159.5 8.2 (6.5) Included in earnings: Change in fair value (1) — — 11.7 (3.6) 3.0 Gain (loss) on sale of loans and other — — 2.9 — — — — 14.6 (3.6) 3.0 Ending balance $ 6.0 $ (6.0) $ 197.4 $ (258.5) $ 1.4 Loans Held for Investment - Restricted for Securitization Investors Financing Liability - Owed to Securitization Investors Loans Held for Sale - Fair Value IRLCs Three months ended June 30, 2022 Beginning balance $ 7.7 $ (7.7) $ 230.4 $ 5.7 Purchases, issuances, sales and settlements Purchases and other — — 57.5 — Issuances (1) — — — 82.2 Sales — — (243.8) — Settlements (0.4) 0.4 — — Transfers: Loans held for sale, at fair value (1) — — — 3.6 Receivables, net — — (1.7) — Net addition (disposition/derecognition) (0.4) 0.4 (187.9) 85.9 Change in fair value included in earnings (1) — — (1.2) (85.8) Ending balance $ 7.3 $ (7.3) $ 41.4 $ 5.7 Loans Held for Investment - Restricted for Securitization Investors Financing Liability - Owed to Securitization Investors Loans Held for Sale - Fair Value ESS Financing Liability IRLCs Six Months Ended June 30, 2023 Beginning balance $ 6.7 $ (6.7) $ 32.1 $ (199.0) $ (0.7) Purchases, issuances, sales and settlements Purchases and other — — 252.8 — Issuances (1) — — — (68.7) 10.1 Sales — — (58.7) — — Settlements (2) (0.7) 0.7 (25.8) 14.9 — Transfers: Loans held for investment, at fair value — — 1.5 — — Loans held for sale, at fair value (1) — — — — (31.2) REO (Other assets) — — (7.1) — — Receivables, net — — (16.1) — — Capitalization of advances on Ginnie Mae modifications — — 1.7 — — Other — — 2.8 — — Net addition (disposition/derecognition) (0.7) 0.7 151.3 (53.8) (21.0) Included in earnings: Change in fair value (1) — — 11.2 (5.6) 23.1 Gain (loss) on sale of loans and other — — 2.9 — — — — 14.0 (5.6) 23.1 Ending balance $ 6.0 $ (6.0) $ 197.4 $ (258.5) $ 1.4 Loans Held for Investment - Restricted for Securitization Investors Financing Liability - Owed to Securitization Investors Loans Held for Sale - Fair Value IRLCs Six Months Ended June 30, 2022 Beginning balance $ 7.9 $ (7.9) $ 220.9 $ 18.1 Purchases, issuances, sales and settlements Purchases and other — — 118.2 — Issuances (1) — — — 161.9 Sales — — (291.6) — Settlements (0.6) 0.6 — — Transfers: Loans held for sale, at fair value (1) — — — (53.9) Receivables, net — — (1.8) — Net addition (disposition/derecognition) (0.6) 0.6 (175.1) 108.0 Change in fair value included in earnings (1) — — (4.4) (120.3) Ending balance $ 7.3 $ (7.3) $ 41.4 $ 5.7 (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 $(3.4) million and $2.1 million for the three and six months ended June 30, 2023, respectively, and $0.1 million and $(12.3) million for the three and six months ended June 30, 2022, respectively. See Note 14 – Derivative Financial Instruments and Hedging Activities (2) Settlements related to the ESS financing liability are recorded in earnings as MSR valuation adjustments , net . See Note 7 – Mortgage Servicing A reconciliation from the beginning balances to the ending balances of Loans Held for Investment and HMBS-related borrowings, MSRs and Pledged MSR 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 — Other Financing Liabilities, at Fair Value, respectively. The significant unobservable assumptions that we make to estimate the fair value of certain assets and liabilities classified as Level 3 and measured at fair value on a 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 and reverse 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 June 30, December 31, Life in years Range 0.9 to 7.8 1.0 to 7.6 Weighted average 5.2 5.0 Conditional prepayment rate, including voluntary and involuntary prepayments Range 11.9% to 40.6% 13.2% to 45.0% Weighted average 17.3 % 18.0 % Discount rate 5.2 % 5.1 % 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. We engage third-party valuation experts who generally utilize: (a) transactions involving instruments with similar collateral and risk profiles, adjusted as necessary based on specific characteristics of the asset or liability being valued; and/or (b) industry-standard modeling, such as a discounted cash flow model and prepayment model, in arriving at their estimate of fair value. The prices provided by the valuation experts reflect their observations and assumptions related to market activity, generally the bulk market, incorporating available industry survey results and client feedback, and including risk premiums and liquidity adjustments. While interest rates are a key value driver, MSR fair value may change for other market-driven factors, including but not limited to the supply and demand of the market or the required yield or perceived value by investors of such MSRs. While the models and related assumptions used by the valuation experts are proprietary to them, we understand the methodologies and assumptions used to develop the prices based on our ongoing due diligence, which includes regular discussions with the valuation experts. We believe that the procedures executed by the valuation experts, supported by our verification and analytical procedures, provide reasonable assurance that the prices used in our consolidated financial statements comply with the accounting guidance for fair value measurements and disclosures and reflect the assumptions that a market participant would use. We evaluate the reasonableness of our third-party experts’ assumptions using historical experience adjusted for prevailing market conditions and benchmarks of assumptions and value estimates. 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 June 30, 2023 December 31, 2022 Agency Non-Agency Agency Non-Agency Weighted average prepayment speed 7.1 % 7.9 % 6.9 % 7.9 % Weighted average lifetime delinquency rate 1.1 % 10.3 % 1.4 % 10.1 % Weighted average discount rate 9.6 % 10.6 % 9.6 % 10.6 % Weighted average cost to service (in dollars) $ 71 $ 202 $ 72 $ 201 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 June 30, 2023 given hypothetical increases in lifetime prepayments and yield assumptions: Adverse change in fair value 10% 20% Change in weighted average prepayment speeds (in percentage points) 0.8 1.6 Change in fair value due to change in weighted average prepayment speeds $ (63.0) $ (123.4) Change in weighted average discount rate (in percentage points) 1.0 1.9 Change in fair value due to change in weighted average discount rate $ (72.5) $ (139.3) 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. We determine fair value using a discounted cash flow approach, by discounting the projected recovery of principal and interest over the estimated life of the borrowing at a market rate commensurate with the risk of the estimated cash flows. We engage third-party valuation experts to support our valuation and provide observations and assumptions related to market activities. The fair value is equal to the fair value mark provided by a third-party valuation expert. We evaluate the reasonableness of our fair value estimate and assumptions using historical experience, or cash flow backtesting, adjusted for prevailing market conditions and benchmarks of assumptions and value estimates. 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 June 30, December 31, Life in years Range 0.9 to 7.8 1.0 to 7.6 Weighted average 5.2 5.0 Conditional prepayment rate Range 11.9% to 40.6% 13.2% to 45.0% Weighted average 17.3 % 18.0 % Discount rate 5.2 % 5.0 % 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 contractually retained cash flows and expected life of subservicing agreements, when applicable. Significant unobservable assumptions June 30, December 31, Weighted average prepayment speed 7.2 % 7.6 % Weighted average delinquency rate 6.7 % 7.1 % Weighted average subservicing life (in years) 4.5 5.6 Weighted average discount rate 10.2 % 10.2 % Weighted average cost to service (in dollars) $ 166 $ 174 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 reference pools of 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 expected servicing spread cash flows, consistent with the valuation model and behavioral projections of the underlying MSR, as applicable. The fair value of the ESS financing liability is determined using a third-party valuation expert. The significant unobservable assumptions used in the valuation of the ESS financing liability include prepayment speeds, delinquency rates, and discount rates. The discount rate is initially determined based on the expected cash flows and the proceeds from each issuance, and is subsequently updated, at each issuance level, based on the change in discount rate of the underlying MSR or other factors, as provided by third-party valuation expert. At June 30, 2023 and December 31, 2022, the weighted average discount rate of the ESS financing liability was 9.4% and 7.6%, respectively. Refer to MSRs above for a description of other significant unobservable assumptions. Also see Note 8 — Other Financing Liabilities, at Fair Value. Derivative Financial Instruments |
Loans Held for Sale
Loans Held for Sale | 6 Months Ended |
Jun. 30, 2023 | |
Receivables [Abstract] | |
Loans Held for Sale | Note 4 – Loans Held for Sale Loans Held for Sale - Fair Value Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Beginning balance $ 845.2 $ 716.0 $ 617.8 $ 917.5 Originations and purchases 2,859.9 4,682.0 5,412.3 8,154.6 Proceeds from sales (2,279.6) (4,603.4) (4,575.8) (8,174.2) Principal collections (31.6) (65.8) (47.0) (95.2) Transfers from (to): Loans held for investment, at fair value 1.5 16.5 3.1 19.6 Receivables, net (15.6) 32.9 (14.5) 32.2 REO (Other assets) (7.1) — (11.2) — Capitalization of advances on Ginnie Mae modifications 1.7 5.8 3.7 13.1 Realized loss on sale of loans (1) (28.4) (114.3) (50.4) (186.6) Fair value gain (loss) on loans held for sale 4.0 10.8 10.2 (1.4) Other 2.8 2.5 4.5 3.6 Ending balance $ 1,352.9 $ 683.1 $ 1,352.9 $ 683.1 UPB $ 1,341.0 $ 685.1 Premium (discount) 15.0 3.8 Fair value adjustment (3.1) (5.7) Total $ 1,352.9 $ 683.1 (1) Excludes retained MSR and gain (loss) on economic hedge instruments. The following table presents the fair value of Loans held for sale, at fair value by type: June 30, 2023 December 31, 2022 GSE loans $ 790.0 $ 318.3 Government- Forward loans 365.5 150.2 Forward loans repurchased from Ginnie Mae guaranteed securitization (1) 20.0 32.1 Reverse loans (1) (2) 159.4 102.5 Other residential mortgage loans 18.0 14.8 Total $ 1,352.9 $ 617.8 (1) Pursuant to Ginnie Mae servicing guidelines. (2) Includes inactive reverse mortgage loans purchased from Ginnie Mae securitization pools that reached the 98% of maximum claim amount and are generally liquidated through foreclosure and subsequent sale of the REO properties. Loans Held for Sale - Lower of Cost or Fair Value June 30, 2023 2022 Carrying amount before valuation allowance $ 7.4 $ 8.1 Valuation allowance (3.7) (3.8) Ending balance, net $ 3.7 $ 4.3 Gain (Loss) on Loans Held for Sale, Net Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Gain (loss) on sales of loans, net MSRs retained on transfers of forward mortgage loans $ 31.5 $ 60.2 $ 62.6 $ 106.0 Gain (loss) on sale of forward mortgage loans (1) (28.1) (90.3) (50.2) (162.6) Gain (loss) on sale of repurchased Ginnie Mae loans (1) (2) (0.1) (10.3) 0.1 (9.7) 3.3 (40.4) 12.4 (66.3) Change in fair value of IRLCs (3.2) 0.9 2.4 (11.2) Change in fair value of loans held for sale (3) 4.3 12.0 9.1 0.4 Gain (loss) on economic hedge instruments (4) 21.2 29.1 4.8 76.2 Other (0.3) (0.7) (0.6) (1.4) $ 25.3 $ 0.9 $ 28.1 $ (2.3) (1) Realized gain (loss) on sale of loans, excluding retained MSRs. (2) Includes an $8.8 million loss during the three months ended June 30, 2022 on certain delinquent and aged loans repurchased (net of the associated Ginnie Mae MSR fair value adjustment) in connection with the Ginnie Mae EBO program with an aggregated UPB of $299.7 million, net of the associated MSR fair value adjustment. (3) Includes a $10.9 million unrealized gain during the three months ended June 30, 2023 related to the revaluation of inactive HECM loan buyouts opportunistically acquired at a discount and securitized in a private placement transaction completed in June 2023. Also see Note 2 – Securitizations and Variable Interest Entities. (4) Excludes gains of $0.1 million and $13.4 million during the three and six months ended June 30, 2022, respectively, on inter-segment economic hedge derivatives presented within MSR valuation adjustments, net. No such gains or losses were recognized during the three and six months ended June 30, 2023. 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 and are eliminated in the consolidated financial statements. Refer to Note 17 – Business Segment Reporting. |
Reverse Mortgages
Reverse Mortgages | 3 Months Ended |
Jun. 30, 2022 | |
Receivables [Abstract] | |
Reverse Mortgages | Note 5 - Reverse Mortgages Three Months Ended June 30, 2023 2022 Loans Held for Investment - Reverse Mortgages HMBS - Related Borrowings Loans Held for Investment - Reverse Mortgages HMBS - Related Borrowings Beginning balance $ 7,662.9 $ (7,470.6) $ 7,451.6 $ (7,118.8) Originations 272.2 — 524.6 — Securitization of HECM loans accounted for as a financing (including realized fair value changes) — (271.1) — (566.0) Additional proceeds from securitization of HECM loans and tails — 0.1 — (10.1) Repayments (principal payments received) (291.8) 289.8 (476.3) 476.1 Transfers to: Loans held for sale, at fair value (1.5) — (16.5) — Receivables, net (1.0) — (36.9) — Change in fair value included in earnings (1) 34.1 (34.5) (69.9) 63.6 Ending balance $ 7,674.8 $ (7,486.4) $ 7,376.5 $ (7,155.3) Securitized loans (pledged to HMBS-related borrowings) $ 7,553.7 $ (7,486.4) $ 7,220.8 $ (7,155.3) Unsecuritized loans 121.0 155.8 Total $ 7,674.8 $ 7,376.5 Six Months Ended June 30, 2023 2022 Loans Held for Investment - Reverse Mortgages HMBS - Related Borrowings Loans Held for Investment - Reverse Mortgages HMBS - Related Borrowings Beginning balance $ 7,504.1 $ (7,326.8) $ 7,199.8 $ (6,885.0) Originations 507.4 — 1,144.9 — Securitization of HECM loans accounted for as a financing (including realized fair value changes) — (502.3) — (1,149.9) Additional proceeds from securitization of HECM loans and tails — (6.1) — (22.3) Acquisition — — 211.3 (209.1) Repayments (principal payments received) (527.3) 525.1 (995.1) 993.5 Transfers to: Loans held for sale, at fair value (3.1) — (19.6) — Receivables, net (2.0) — (49.4) — REO (Other assets) (0.1) — (0.1) — Change in fair value included in earnings (1) 195.7 (176.2) (115.1) 117.5 Ending balance $ 7,674.8 $ (7,486.4) $ 7,376.5 $ (7,155.3) Securitized loans (pledged to HMBS-related borrowings) $ 7,553.7 $ (7,486.4) $ 7,220.8 $ (7,155.3) Unsecuritized loans 121.0 155.8 Total $ 7,674.8 $ 7,376.5 (1) See further breakdown of the net gain (loss) in the table below. Gain (Loss) on Reverse Loans Held for Investment and HMBS-related Borrowings, Net Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Gain on new originations (1) $ 3.6 $ 12.7 $ 9.6 $ 33.3 Gain on tail securitizations (2) 2.5 2.8 6.1 6.7 Net interest income (servicing fee) (3) 5.8 5.4 11.7 10.7 Other change in fair value of securitized loans held for investment and HMBS-related borrowings, net (12.4) (27.3) (7.9) (48.3) Fair value gains (losses) included in earnings (2) (0.5) (6.4) 19.5 2.5 Loan fees and other 1.2 3.7 2.4 8.0 $ 0.7 $ (2.6) $ 21.9 $ 10.5 (1) Includes the changes in fair value of newly originated loans held for investment in the period from interest rate lock commitment date through securitization date. (2) Includes the cash realized gains upon securitization of tails (previously reported within Other change in fair value of securitized loans held for investment and HMBS-related borrowings, net in the table above). |
Advances
Advances | 6 Months Ended |
Jun. 30, 2023 | |
Advances [Abstract] | |
Advances | Note 6 – Advances June 30, 2023 December 31, 2022 Principal and interest $ 202.6 $ 215.5 Taxes and insurance 271.4 367.5 Foreclosures, bankruptcy, REO and other 136.0 142.1 610.0 725.1 Allowance for losses (7.4) (6.2) Advances, net $ 602.7 $ 718.9 The following table summarizes the activity in net advances: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Beginning balance - before Allowance for Losses $ 663.1 $ 736.9 $ 725.1 $ 779.5 New advances 146.5 190.0 335.3 387.3 Transfer from Receivables 2.2 1.6 — 11.1 — Sales of advances (0.6) (0.2) (4.9) (0.8) Collections of advances and other (201.1) (272.9) (456.6) (512.1) Ending balance - before Allowance for Losses 610.0 653.8 610.0 653.8 Beginning balance - Allowance for Losses $ (6.2) $ (6.9) (6.2) (7.0) Provision expense (2.8) (2.1) (4.6) (3.9) Net charge-offs and other 1.6 2.4 3.4 4.3 Ending balance - Allowance for Losses (7.4) (6.6) (7.4) (6.6) Ending balance, net $ 602.7 $ 647.2 $ 602.7 $ 647.2 |
Mortgage Servicing
Mortgage Servicing | 6 Months Ended |
Jun. 30, 2023 | |
Transfers and Servicing [Abstract] | |
Mortgage Servicing | Note 7 – Mortgage Servicing MSRs – At Fair Value Three Months Ended June 30, 2023 2022 Agency Non-Agency Total Agency Non-Agency Total Beginning balance $ 1,896.4 $ 684.2 $ 2,580.6 $ 1,664.9 $ 658.4 $ 2,323.3 Sales — — — — — — Additions: Recognized on the sale of residential mortgage loans 31.5 — 31.5 60.2 — 60.2 Purchases 19.1 — 19.1 36.9 — 36.9 Servicing transfers and adjustments (1) (32.5) — (32.5) 11.8 2.9 14.7 Net additions (sales) 18.1 — 18.1 108.8 2.9 111.7 Changes in fair value recognized in earnings: Changes in valuation inputs or assumptions 103.5 33.3 136.8 86.0 32.3 118.3 Realization of expected cash flows (50.6) (9.1) (59.7) (43.0) (24.6) (67.6) Fair value gains (losses) recognized in earnings 52.9 24.2 77.1 43.0 7.7 50.7 Ending balance $ 1,967.4 $ 708.4 $ 2,675.7 $ 1,816.6 $ 669.1 $ 2,485.7 MSRs – At Fair Value Six Months Ended June 30, 2023 2022 Agency Non-Agency Total Agency Non-Agency Total Beginning balance $ 1,931.8 $ 733.5 $ 2,665.2 $ 1,571.8 $ 678.3 $ 2,250.1 Sales — — — (149.3) — (149.4) Additions: Recognized on the sale of residential mortgage loans 62.6 — 62.6 106.0 — 106.0 Purchases 44.0 — 44.0 83.7 — 83.7 Servicing transfers and adjustments (1) (32.5) — (32.5) 14.7 (0.8) 13.9 Net additions (sales) 74.1 — 74.1 55.1 (0.8) 54.2 Changes in fair value recognized in earnings: Changes in valuation inputs or assumptions 61.4 (8.2) 53.2 280.4 41.3 321.8 Realization of expected cash flows (99.9) (16.9) (116.8) (90.7) (49.7) (140.4) Fair value gains (losses) recognized in earnings (38.5) (25.1) (63.6) 189.7 (8.4) 181.4 Ending balance $ 1,967.4 $ 708.4 $ 2,675.7 $ 1,816.6 $ 669.1 $ 2,485.7 (1) Servicing transfers and adjustments for the three months ended June 30, 2023 include a $32.5 million derecognition of Agency MSRs previously sold to MAV in a transaction which did not qualify for sale accounting treatment. We derecognized the MSRs with a UPB of $2.3 billion from our balance sheet together with the associated Pledged MSR liability upon the sale of the MSRs by MAV to a third party. The following table summarizes delinquency status of the loans underlying our MSRs: June 30, 2023 December 31, 2022 Delinquent loans Agency Non - Agency Total Agency Non - Agency Total 30 days 1.6 % 8.4 % 4.6 % 1.7 % 8.5 % 4.8 % 60 days 0.5 3.4 1.7 0.5 3.3 1.8 90 days or more 1.0 8.2 4.2 1.1 8.6 4.5 Total 30-60-90 days or more 3.1 % 20.0 % 10.5 % 3.3 % 20.4 % 11.1 % MSR UPB and Fair Value June 30, 2023 December 31, 2022 June 30, 2022 Fair Value UPB ($ billions) Fair Value UPB ($ billions) Fair Value UPB ($ billions) Owned MSRs $ 1,643.7 $ 121.1 $ 1,710.6 $ 126.2 $ 1,552.6 $ 116.3 Rithm and others transferred MSRs (1) (2) 702.0 $ 53.4 601.2 $ 47.3 550.8 $ 49.7 MAV transferred MSRs (1) 330.0 $ 22.9 353.4 $ 26.1 382.2 $ 28.5 Total MSRs $ 2,675.7 $ 197.4 $ 2,665.2 $ 199.6 $ 2,485.7 $ 194.5 (1) MSRs subject to sale agreements that do not meet sale accounting criteria. See Note 8 — Other Financing Liabilities, at Fair Value. (2) At June 30, 2023, the UPB of MSRs transferred to Rithm for which title is retained by Ocwen was $10.3 billion. We purchased MSRs with a UPB of $3.8 billion and $7.3 billion from unrelated third-parties during the six months ended June 30, 2023 and 2022, respectively. We sold MSRs, servicing released, with a UPB of $31.3 million and $11.1 billion during the six months ended June 30, 2023 and 2022, respectively, to unrelated third parties. Servicing Revenue Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Loan servicing and subservicing fees Servicing $ 89.4 $ 80.9 $ 179.3 $ 169.4 Subservicing 18.4 20.4 38.0 35.0 MAV (1) 17.4 18.8 35.7 35.5 Rithm and others (1) 59.2 64.7 118.8 131.9 184.4 184.8 371.8 371.8 Ancillary income Custodial accounts (float earnings) 26.2 1.8 46.4 2.8 Late charges 9.5 11.7 19.0 21.8 Reverse subservicing ancillary fees 9.8 6.3 18.0 9.4 Loan collection fees 2.3 2.9 4.9 5.8 Recording fees 1.3 2.6 2.5 5.9 Boarding and deboarding fees 0.9 1.9 1.8 3.6 GSE forbearance fees 0.3 0.2 0.5 0.4 Other, net 2.9 3.0 4.8 6.3 53.2 30.3 97.9 56.0 Total Servicing and subservicing fees $ 237.6 $ 215.1 $ 469.7 $ 427.8 (1) Includes servicing fees related to transferred MSRs and subservicing fees. See Note 8 — Other Financing Liabilities, at Fair Value . Float balances, on which we earn interest referred to as float earnings (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 $2.2 billion, $1.5 billion and $1.8 billion at June 30, 2023, December 31, 2022 and June 30, 2022, respectively. The following table presents the components of MSR valuation adjustments, net: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 MSR fair value changes due to rates and assumptions $ 136.8 $ 118.3 $ 53.2 $ 321.8 MSR realization of expected cash flows (59.6) (67.6) (116.6) (140.4) Total MSR fair value gains (losses) (1) 77.2 50.7 (63.3) 181.4 Pledged MSR liability fair value changes due to rates and assumptions (81.0) (40.4) (42.8) (97.2) Pledged MSR liability realization of expected cash flows 15.6 28.8 30.1 57.0 Total Pledged MSR liability fair value gains (losses) (2) (65.4) (11.7) (12.7) (40.2) ESS financing liability fair value changes due to rates and assumptions (3.6) — (5.6) — ESS financing liability realization of expected cash flows 8.1 — 14.9 — Total ESS financing liability fair value gains (losses) (2) 4.6 — 9.3 — Derivative fair value gain (loss) (MSR economic hedges) (65.2) (16.9) (51.1) (83.7) MSR valuation adjustments, net $ (48.9) $ 22.1 $ (117.9) $ 57.5 (1) Includes $0.1 million and $0.3 million for the three and six months ended June 30, 2023, respectively, and $0 and $0 during the three and six months ended June 30, 2022, respectively, of fair value changes on the reverse MSR liability and other. (2) Also refer to Note 8 — Other Financing Liabilities, at Fair Value for additional information related to the ESS financing liability and Pledged MSR liability, including a tabular presentation of activity of the Pledged MSR liability for the reported periods. |
MSR Transfers Not Qualifying fo
MSR Transfers Not Qualifying for Sale Accounting | 6 Months Ended |
Jun. 30, 2023 | |
Transfers and Servicing [Abstract] | |
MSR Transfers Not Qualifying for Sale Accounting | Note 8 — Other Financing Liabilities, at Fair Value The following tables presents financing liabilities carried at fair value which include pledged MSR liabilities recorded in connection with MSR transfers, subservicing retained, 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 (see Note 12 – Borrowings for ESS financing liability carried at amortized cost). Outstanding Balance Borrowing Type Collateral Maturity June 30, 2023 December 31, 2022 MSR transfers not qualifying for sale accounting (1): Original Rights to MSRs Agreements, at fair value - Rithm MSRs (1) $ 577.1 $ 601.2 Pledged MSR liability, at fair value - MAV MSRs (1) 319.7 329.8 Pledged MSR liability, at fair value - Others MSRs (1) 112.7 0.7 1,009.5 931.7 Financing liability - Owed to securitization investors, at fair value: Residential Asset Securitization Trust 2003-A11 (RAST 2003-A11) (2) Loans held for investment October 2033 6.0 6.7 ESS financing liability, at fair value (3) MSRs (3) (3) 258.5 199.0 Total Other financing liabilities, at fair value $ 1,274.0 $ 1,137.4 (1) MSRs transferred, subservicing retained, or sold in transactions which do not qualify for sale accounting treatment are accounted for as secured financings. (2) Consists of securitization debt certificates due to third parties that represent beneficial interests in trusts that are consolidated. (3) Consists of the obligation to remit to a third party a specified percentage of future servicing fee collections (servicing spread) on reference pools of MSRs, which we are entitled to as owner of the related MSRs. 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 June 30, 2023 2022 Pledged MSR Liability Rithm and Others MAV (1) Total Rithm and Others MAV (1) Total Beginning Balance $ 564.5 $ 318.7 $ 883.3 $ 545.3 $ 319.0 $ 864.3 MSR transfers 93.3 0.1 93.4 — 30.3 30.3 Derecognition of financing liability (2) — (32.5) (32.5) — — — Fair value gain (loss) Changes in fair value due to inputs and assumptions 39.3 41.8 81.0 24.7 15.7 40.4 Realization of expected cash flows (7.2) (8.4) (15.6) (19.2) (9.5) (28.8) Total fair value (gain) loss 32.1 33.4 65.4 5.5 6.2 11.7 Ending Balance $ 689.9 $ 319.7 $ 1,009.5 $ 550.8 $ 355.5 $ 906.3 Six Months Ended June 30, 2023 2022 Pledged MSR Liability Rithm and Others MAV Agreements (1) Total Original Rights to MSRs Agreements - Rithm MAV Agreements (1) Total Beginning Balance $ 601.9 $ 329.8 $ 931.7 $ 558.9 $ 238.1 $ 797.1 MSR transfers 97.6 0.2 97.8 — 69.6 69.6 Derecognition of financing liability (2) — (32.5) (32.5) — — — Calls — — — (0.6) — (0.6) Fair value gain (loss) Changes in fair value due to inputs and assumptions 3.5 39.2 42.7 31.5 65.6 97.2 Realization of expected cash flows (13.1) (17.0) (30.1) (39.1) (17.9) (57.0) Total fair value (gain) loss (3) (9.6) 22.2 12.6 (7.6) 47.7 40.2 Ending Balance $ 689.9 $ 319.7 $ 1,009.5 $ 550.8 $ 355.5 $ 906.3 (1) 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 contractually retained by PMC (shared between PMC and MAV) and other contractual cash flows during the expected life of the subservicing agreement. (2) During the three months ended June 30, 2023, 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 $2.3 billion. (3) The changes in fair value of the MAV Pledged MSR liability includes a $14.1 million loss associated with the amendment to the MAV Subservicing Agreement in March 2022, resulting in lower contractual ancillary income retained by PMC. The following table presents the Pledged MSR liability expense recorded in connection with the MSR sale agreements with MAV, Rithm and others that do not qualify for sale accounting and the ESS financing liabilities. Three Months Ended June 30, 2023 Three Months Ended June 30, 2022 Rithm and Others MAV Total Rithm and Others MAV Total Servicing fees collected on behalf of Rithm, MAV and others $ 59.2 $ 15.5 $ 74.7 $ 64.7 $ 17.5 $ 82.2 Less: Subservicing fee retained by Ocwen (16.9) (2.1) (19.1) (18.8) (2.3) (21.0) Ancillary fee/income and other settlement (including expense reimbursement) 3.6 (0.2) 3.5 1.8 — 1.8 Transferred MSR net servicing fee remittance $ 45.9 $ 13.2 59.1 $ 47.7 $ 15.2 63.0 ESS servicing spread remittance 13.9 — Pledged MSR liability expense $ 73.0 $ 63.0 Six Months Ended June 30, 2023 Six Months Ended June 30, 2022 Rithm and Others MAV Total Rithm and Others MAV Total Servicing fees collected on behalf of Rithm, MAV and others $ 118.8 $ 31.9 $ 150.7 $ 131.9 $ 33.2 $ 165.1 Less: Subservicing fee retained by Ocwen (34.2) (4.4) (38.6) (38.1) (4.4) (42.5) Ancillary fee/income and other settlement (including expense reimbursement) 6.9 (0.2) 6.7 (0.5) 0.6 0.1 Transferred MSR net servicing fee remittance $ 91.5 $ 27.3 118.8 $ 93.2 $ 29.5 122.7 ESS servicing spread remittance 24.5 — Pledged MSR liability expense $ 143.3 $ 122.7 On May 2, 2022, Ocwen entered into amendments to its servicing agreements with Rithm to extend their terms to December 31, 2023 and provide for subsequent, automatic one-year renewals, unless Ocwen provides six months’ advance notice of termination (by July 1), or Rithm provides three months’ advance notice of termination (by October 1), among other changes. Ocwen did not provide notice of termination on July 1, 2023. As of June 30, 2023, the UPB of MSRs subject to the servicing agreements with Rithm subsidiaries is $47.0 billion, including $1.8 billion for which Ocwen or Rithm is subservicer for another entity as servicer of record and $10.3 billion for which title has not transferred to Rithm. We describe Rithm’s rights and obligations with respect to such non-transferred MSRs as “Rights to MSRs”. As the third-party consents required for title to the MSRs to transfer were not obtained, the $10.3 billion Rights to MSRs may (i) be acquired by Ocwen at a price determined in accordance with the terms of the previously disclosed agreements entered into in January 2018 (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, 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 subservicing agreement. As stated above, Rithm has the right to terminate the $10.3 billion Rights to MSRs for convenience, in whole but not in part, subject to three months’ advance notice of termination. 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 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 described above. 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 applicable 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 |
Receivables
Receivables | 6 Months Ended |
Jun. 30, 2023 | |
Receivables [Abstract] | |
Receivables | Note 9 – Receivables June 30, 2023 December 31, 2022 Servicing-related receivables: Government-insured loan claims - Forward $ 50.6 $ 65.0 Government-insured loan claims - Reverse 89.0 73.8 Subservicing fees and reimbursable expenses 13.5 11.7 Due from custodial accounts 11.6 16.3 Receivable from sale of MSRs (holdback) 10.5 1.5 Subservicing fees and reimbursable expenses - Due from Rithm 1.8 3.0 Subservicing fees, reimbursable expenses and other - Due from MAV 1.7 1.0 Other 0.7 3.2 179.4 175.5 Income taxes receivable 27.3 34.4 Other receivables 9.3 5.2 216.0 215.1 Allowance for losses (27.4) (34.3) $ 188.6 $ 180.8 At June 30, 2023 and December 31, 2022, 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 $27.0 million and $33.8 million at June 30, 2023 and December 31, 2022, respectively. Allowance for Losses - Government-Insured Loan Claims Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Beginning balance $ 29.1 $ 40.8 $ 33.8 $ 41.5 Provision 3.9 3.3 8.0 5.5 Charge-offs and other, net (6.0) (4.3) (14.8) (7.2) Ending balance $ 27.0 $ 39.8 $ 27.0 $ 39.8 |
Investment in Equity Method Inv
Investment in Equity Method Investee and Related Party Transactions | 6 Months Ended |
Jun. 30, 2023 | |
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 We account for our 15% investment in MAV Canopy under the equity method. As of June 30, 2023, PMC subserviced a total $46.6 billion UPB on behalf of MAV under the Subservicing Agreement, of which $22.9 billion MSR was previously sold by PMC to MAV and remains reported on the consolidated balance sheet of PMC. During the six months ended June 30, 2023 and 2022, PMC transferred UPB of $17.9 million and $191.4 million under a flow MSR sale agreement (Recapture Agreement), respectively. During the six months ended June 30, 2023 and 2022, PMC transferred MSRs with UPB of nil and $5.7 billion to MAV under various MSR purchase and sale agreements, respectively. These 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 — Other Financing Liabilities, at Fair Value. |
Other Assets
Other Assets | 6 Months Ended |
Jun. 30, 2023 | |
Other Assets [Abstract] | |
Other Assets | Note 11 – Other Assets June 30, 2023 December 31, 2022 Contingent loan repurchase asset $ 247.1 $ 289.9 REO 18.0 9.8 Prepaid expenses 17.4 19.8 Derivatives, at fair value 8.9 7.7 Intangible assets, net (net of accumulated amortization of $8.0 million and $5.0 million) 8.3 14.7 Prepaid lender fees, net 7.0 7.7 Derivative margin deposit 6.8 1.5 Prepaid representation, warranty and indemnification claims - Agency MSR sale 5.0 5.0 Deferred tax asset, net 2.5 2.6 Security deposits 0.8 0.8 Other 5.8 4.7 $ 327.6 $ 364.2 |
Borrowings
Borrowings | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
Borrowings | Note 12 – Borrowings Advance Match Funded Liabilities Borrowing Capacity Outstanding Balance Borrowing Type Maturity Amort. Date (1) Total Available (2) June 30, 2023 Dec. 31, 2022 Ocwen Master Advance Receivables Trust (OMART) - Advance Receivables Backed Notes - Series 2015-VF5 Aug. 2053 Aug. 2023 $ 450.0 $ 67.8 $ 382.2 $ 422.5 Ocwen GSE Advance Funding (OGAF ) - Advance Receivables Backed Notes, Series 2015-VF1 Aug. 2053 Aug. 2023 90.0 42.7 47.3 90.0 EBO Advance facility (3) May 2026 NA 14.4 13.5 0.9 1.2 $ 554.4 $ 124.0 $ 430.4 $ 513.7 Weighted average interest rate (4) 8.15 % 7.09 % (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. 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 June 30, 2023, 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) We entered into a loan and security agreement to finance the acquisition of advances in connection with the early buyout of certain fixed-rate, fully-amortizing FHA-insured residential mortgage loans. At June 30, 2023, none of the available borrowing capacity of the facility could be used based on the amount of eligible collateral. (4) The weighted average interest rate, excluding the effect of the amortization of prepaid lender fees. At June 30, 2023 and December 31, 2022, the balance of unamortized prepaid lender fees was $0.5 million and $2.3 million, respectively, and are included in Other assets in our consolidated balance sheets. Mortgage Loan Financing Facilities, net Available Borrowing Capacity Outstanding Balance Borrowing Type Collateral Maturity Un-committed Committed (1) June 30, 2023 Dec. 31, 2022 $175 million Master repurchase agreement Loans held for sale (LHFS), Receivables and REO Aug. 2023 $ 125.0 $ 39.3 $ 10.7 $ 142.2 Master repurchase agreement (2) LHFS and Loans Held for Investment (LHFI) N/A — — — 100.3 $50 million Mortgage warehouse agreement (3) LHFS N/A 50.0 — — — $400 million Participation agreement (4) LHFS November 2023 91.9 — 308.1 64.3 $173 million Master repurchase agreement (5) LHFS, LHFI and Receivables August 2023 — 1.3 171.7 26.1 Master repurchase agreement (6) LHFS June 2024 — 1.0 — — $50 million Mortgage warehouse agreement (7) LHFI October 2023 — 36.0 14.0 7.8 $204 million Mortgage warehouse agreement (8) LHFS and LHFI March 2024 137.1 — 66.9 44.2 $230 million Mortgage warehouse agreement (9) LHFS and Receivables (9) 216.0 — 14.0 21.9 Master repurchase agreement (10) LHFS (10) — — 100.4 — $50 million Loan and security agreement (11) LHFS and Receivables March 2024 — 42.5 7.5 7.2 $700 million Master repurchase agreement (12) LHFS and LHFI April 2024 116.6 — 583.4 288.8 $200 million Master repurchase agreement (13) LHFS, April 2024 200.0 — — — OLIT Asset-Backed Notes (14) Reverse LHFS, June 2036 — — 264.9 — Total Mortgage Loan Financing Facilities, net $ 936.5 $ 120.1 $ 1,541.6 $ 702.7 Unamortized discount and debt issuance costs - OLIT Notes $ (26.6) $ — Total Mortgage Loan Financing Facilities, net $ 1,515.0 $ 702.7 Weighted average interest rate (15) 6.03 % 5.74 % (1) Of the borrowing capacity on mortgage loan financing facilities extended on a committed basis, $1.7 million of the available borrowing capacity could be used at June 30, 2023 based on the amount of eligible collateral that could be pledged. (2) On February 9, 2023, we voluntarily allowed the facility to mature. (3) This agreement has no stated maturity dat e. (4) In June 2023, the maturity date of this facility was extended to July 22, 2023 and the uncommitted borrowing capacity was increased to $400.0 million. In July 2023, the maturity date was further extended to November 30, 2023 and the uncommitted borrowing capacity was increased to $650.0 million. (5) In June 2023, the maturity date of this facility was extended to July 22, 2023 and further extended to August 22, 2023 in July 2023. (6) In June 2023, the maturity date of this facility was extended to June 22, 2024. (7) In June 2023, the maturity date of this facility was extended to July 14, 2023. In July 2023, the maturity date was further extended to October 12, 2023 and the committed borrowing capacity was reduced to $40.0 million. (8) In May 2023, the maturity date of this facility was extended to March 31, 2024 and the interest rate margin was revised . (9) The agreement has no stated maturity date, however each transaction has a maximum duration of four years. (10) 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. Each certificate is renewed monthly and the interest rate for this facility is 1 month Term Secured Overnight Financing Rate (SOFR) plus applicable margin. See Note 2 – Securitizations and Variable Interest Entities for additional information. (11) This revolving facility agreement provides committed borrowing capacity secured by eligible HECM loans that are active buyouts, as defined in the agreement. In April 2023, the maturity date of this facility was extended to March 31, 2024. (12) In April 2023, the maturity date of this facility was extended to April 6, 2024. (13) On April 3, 2023, we entered into a master repurchase agreement with a total uncommitted borrowing capacity of $200.0 million to finance the purchase of reverse mortgage loans held for sale, claim receivables from HUD and REOs at an interest rate of 1M Term SOFR plus applicable margin. (14) In June 2023, OLIT issued different classes of Asset-Backed Notes at a discount, with a stated interest rate of 3.0% and a mandatory call date of June 2026. Payments of interest and principal are made from available funds from a pool of reverse mortgage buyout loans and REOs in accordance with the indenture priority of payments. Also see Note 2 – Securitizations and Variable Interest Entities. (15) The weighted average interest rate excludes the effect of the amortization of prepaid lender fees. At June 30, 2023 and December 31, 2022, unamortized prepaid lender fees were $1.5 million and $0.5 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) June 30, 2023 Dec. 31, 2022 $265 million Agency MSR financing facility (2) MSRs June 2024 $ — $ 27.2 $ 237.8 $ 309.8 $200 million Ginnie Mae MSR financing facility (3) MSRs, Advances April 2024 38.2 — 161.8 157.9 Ocwen Excess Spread-Collateralized Notes, Series 2022-PLS1 (4) MSRs Feb. 2025 — — 47.4 56.7 Secured Notes, Ocwen Asset Servicing Income Series Notes, Series 2014-1 (5) MSRs Feb. 2028 — — 30.9 33.4 $400 million Agency MSR financing facility - revolving loan (6) MSRs Dec. 2025 — 12.6 387.4 396.8 Total MSR financing facilities $ 38.2 $ 39.7 865.3 954.6 Unamortized debt issuance costs - PLS Notes (7) (0.6) (0.8) Total MSR financing facilities, net $ 864.8 $ 953.8 Weighted average interest rate (8) 7.88% 7.31% (1) Of the borrowing capacity on MSR financing facilities extended on a committed basis, $18.1 million of the available borrowing capacity could be used at June 30, 2023 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. See Note 2 – Securitizations and Variable Interest Entities for additional information. We are subject to daily margining requirements under the terms of the facility. In June 2023, the maturity date of this facility was extended to June 28, 2024, the committed borrowing capacity was reduced by $185.0 million to $265.0 million, and the interest rate margin was revised. (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. In April 2023, the maturity date of this facility was extended to April 26, 2024. (4) The single class PLS Notes are an amortizing debt instrument with an original principal amount of $75.0 million and a fixed interest rate of 5.114%. The PLS Notes are issued by a trust (PLS Issuer) that is included in our consolidated financial statements, and 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 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 revolving loan secured by a lien on certain of PMC’s Agency MSRs and is subject to daily margining requirements. Any outstanding borrowings on the revolving loan will convert into a term loan in November 2024. (7) At June 30, 2023 and December 31, 2022, unamortized prepaid lender fees related to revolving type MSR financing facilities were $5.0 million and $4.9 million, respectively, and are included in Other assets in our consolidated balance sheets. (8) Weighted average interest rate excluding the effect of the amortization of debt issuance costs and prepaid lender fees. Senior Notes Interest Rate (1) Maturity Outstanding Balance June 30, 2023 December 31, 2022 PMC Senior Secured Notes (2) 7.875% March 2026 $ 375.0 $ 375.0 OFC Senior Secured Notes (due to related parties) (3) 12% paid in cash or 13.25% paid-in-kind (see below) March 2027 285.0 285.0 Principal balance 660.0 660.0 Discount PMC Senior Secured Notes (1.1) (1.3) OFC Senior Secured Notes (43.3) (47.3) (44.4) (48.6) Unamortized debt issuance costs PMC Senior Secured Notes (3.7) (4.3) OFC Senior Secured Notes (6.9) (7.5) (10.6) (11.8) $ 605.0 $ 599.6 (1) Excluding the effect of the amortization of debt issuance costs and discount. (2) Redeemable at 103.938% and 101.969% before March 15, 2024 and March 15, 2025, respectively, at par thereafter. The Indenture contains customary covenants that limit the ability of PHH Corporation (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. (3) Redeemable at par plus a make-whole premium prior to March 4, 2026, at par thereafter. The make-whole premium represents the present value of all scheduled interest payments due through March 4, 2026. The Notes are solely the obligation of Ocwen and are secured by a pledge of substantially all of the assets of Ocwen, including its directly held subsidiaries. Credit Ratings Credit ratings are intended to be an indicator of the creditworthiness of a company’s debt obligations. On January 24, 2023, S&P affirmed the issuer credit rating for Ocwen of “B-” and the “B” rating of the PMC Senior Secured Notes. On August 15, 2022, Moody’s affirmed 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 June 30, 2023 is a minimum of $300.0 million tangible net worth for both Ocwen and PMC, as defined in certain of our mortgage warehouse, MSR financing and advance financing facilities agreements. The most restrictive liquidity requirement under our debt agreements with borrowings outstanding at June 30, 2023 is for a minimum of $75.0 million for both Ocwen and PMC consolidated liquidity, as defined, under certain of our MSR financing facilities and mortgage warehouse agreements. The minimum tangible net worth and liquidity requirements at PMC are also subject to the minimum requirement set forth by the Agencies. See also Note 18 – Regulatory Requirements. 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 June 30, 2023: Assets Pledged Collateralized Borrowings Unencumbered Assets (1) Cash $ 213.4 $ — $ — $ 213.4 Restricted cash 119.1 119.1 50.8 — Loans held for sale 1,356.5 1,320.9 1,309.0 35.6 Loans held for investment - securitized (2) 7,553.7 7,553.7 7,486.4 — Loans held for investment - unsecuritized 121.0 86.6 79.7 34.5 MSRs (3) 1,643.8 1,654.4 1,094.7 0.3 Advances, net 602.7 552.9 459.6 49.8 Receivables, net 188.6 83.7 87.7 104.9 REO 18.0 13.6 14.5 4.4 Total (4) $ 11,816.8 $ 11,384.8 $ 10,582.3 $ 443.0 (1) Certain assets are pledged as collateral to the PMC Senior Secured Notes and 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 MAV, Rithm and others, 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 security interests, 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 PMC Senior Secured Notes, including PHH and MAV; cash and investment accounts at OFC; and certain other assets, including receivables. June 30, 2023 Specified net servicing advances $ 191.3 Specified deferred servicing fee 4.0 Specified MSR value less borrowings 644.6 Specified unrestricted cash balances 118.5 Specified advance facility reserves 14.6 Specified loan value 83.2 Specified residual value — Total $ 1,056.2 |
Other Liabilities
Other Liabilities | 6 Months Ended |
Jun. 30, 2023 | |
Other Liabilities Disclosure [Abstract] | |
Other Liabilities | Note 13 – Other Liabilities June 30, 2023 December 31, 2022 Contingent loan repurchase liability $ 247.1 $ 289.9 Due to Rithm - Advance collections, servicing fees and other 61.6 64.4 Other accrued expenses 52.6 75.9 Checks held for escheat 50.9 48.1 Liability for indemnification obligations 41.6 43.8 Servicing-related obligations 41.6 40.1 Accrued interest payable 17.6 13.7 Lease liability 14.2 16.6 Derivatives, at fair value 13.2 15.7 Liability for uncertain tax positions 11.5 10.9 Accrued legal fees and settlements 10.2 42.2 Liability for unfunded pension obligation and India gratuity plan 9.2 9.3 Derivative related payables 9.0 6.0 Income taxes payable 6.8 6.2 MSR purchase price holdback 5.6 13.9 Mortgage insurance premium payable 5.3 5.0 Excess servicing fee spread payable 3.8 3.4 Other 4.7 3.4 $ 606.6 $ 708.5 |
Derivative Financial Instrument
Derivative Financial Instruments and Hedging Activities | 6 Months Ended |
Jun. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments and Hedging Activities | Note 14 – 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 six months ended June 30, 2023 and 2022. June 30, 2023 December 31, 2022 Maturities Notional Fair value Maturities Notional Fair value Derivative Assets (Other assets) Forward sales of Reverse loans July 2023 $ 30.0 $ 0.1 Jan. 2023 $ 20.0 $ 0.1 Forward loans IRLCs July - Nov. 2023 1,136.7 1.1 N/A — — Reverse loans IRLCs Aug. 2023 16.4 0.3 Jan. 2023 13.8 0.6 TBA forward MBS trades July - Sep. 2023 1,620.0 7.4 Jan. - Mar. 2023 804.0 6.6 Forward sales of Forward loans — — Jan. 2023 100.0 0.4 Total $ 2,803.1 $ 8.9 $ 937.8 $ 7.7 Derivative Liabilities (Other liabilities) Forward loans IRLCs N/A $ — $ — Jan. - Apr. 2023 $ 540.1 $ (1.3) Forward sales of Reverse loans July 2023 20.0 — Jan. 2023 20.0 (0.1) TBA forward MBS trades July - Sep. 2023 381.0 (1.1) Jan. - Feb. 2023 85.0 (0.7) Interest rate swap futures Sep. 2023 1,570.0 (10.9) Jan. 2023 670.0 (13.6) Interest rate option contracts Aug. 2023 620.0 (1.2) N/A — — Other 77.6 (0.1) N/A 56.4 (0.1) Total $ 2,668.6 $ (13.2) $ 1,371.4 $ (15.7) The table below summarizes the net gains and losses of our derivative instruments recognized in our consolidated statement of operations. Three Months Ended June 30, Six Months Ended June 30, Financial Statement Line Gain (loss) 2023 2022 2023 2022 Derivative Instruments Forward loans IRLCs $ (3.2) $ 0.6 $ 2.4 $ (11.5) Gain on loans held for sale, net Reverse loans IRLCs (0.2) (0.8) (0.3) (1.2) Gain on reverse loans held for investment and HMBS-related borrowings, net Reverse loans IRLCs (Equity IQ loans) — 0.3 — 0.3 Gain on loans held for sale, net TBA trades (economically hedging forward pipeline trades and EBO pipeline) 21.2 29.1 4.8 76.2 Gain on loans held for sale, net (Economic hedge) TBA trades (economically hedging reverse pipeline trades) — (0.1) — (0.1) Gain on reverse loans held for investment and HMBS-related borrowings, net Interest rate swap futures, TBA trades and interest rate option contracts (65.2) (16.9) (51.1) (83.7) MSR valuation adjustments, net Forward sales of Reverse loans — 0.6 — 0.2 Gain on reverse loans held for investment and HMBS-related borrowings, net Other — 0.5 0.3 0.9 Other, net Total $ (47.4) $ 13.3 $ (44.0) $ (18.7) Interest Rate Risk MSR Hedging Under our MSR hedging strategy, the interest-rate sensitive MSR portfolio exposure to be hedged is 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 MAV, Rithm and others (See Note 8 — Other Financing Liabilities, at Fair Value), • 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. Since September 2022, our hedge policy establishes a minimum 25% and 30% hedge coverage ratio required for interest rate declines less than, and more than 50 basis points, respectively. 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. During the second quarter of 2023, management raised its minimum hedge coverage ratio to 60%. With a partial hedge coverage ratio, 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. 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 with the objective of enhancing 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 minimize the use of third-party derivatives. The fair value gains and losses of such inter-segment derivatives effectively reclassify certain derivative gains and losses between MSR valuation adjustments, net within the Servicing segment and Gain on loans held for sale, net within the Originations segment to reflect the performance of these economic hedging strategies in the appropriate segments (see Note 17 – Business Segment Reporting for the amount of such reclassification). 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 40 to 60 days and our commitments to correspondent sellers for 5 to 15 days. Loans held for sale are generally funded and sold within 5 to 30 days. This 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 or Gain on reverse loans held for investment and HMBS-related borrowings, net in our consolidated statements of operations, respectively. See above description of inter-segment derivatives. 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. Beginning June 2022, management started hedging the in-process GNMA modification pipeline as well. |
Interest Expense
Interest Expense | 6 Months Ended |
Jun. 30, 2023 | |
Other Income and Expenses [Abstract] | |
Interest Expense | Note 15 – Interest Expense Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 MSR financing facilities $ 17.8 $ 8.6 $ 35.3 $ 16.4 Mortgage loan financing facilities 19.8 6.7 33.4 13.8 OFC Senior Secured Notes (1) 10.9 10.5 21.7 20.9 Advance match funded liabilities 10.4 2.8 21.1 5.5 PMC Senior Secured Notes 7.8 8.1 15.5 16.3 Escrow 1.6 1.2 3.5 2.9 $ 68.3 $ 37.9 $ 130.5 $ 75.7 (1) Notes issued to Oaktree affiliates, inclusive of amortization of debt issuance costs and discount of $2.4 million and $4.7 million during the three and six months ended June 30, 2023, respectively, and $2.0 million and $3.9 million for the three and six months ended June 30, 2022 , respectively. |
Basic and Diluted Earnings per
Basic and Diluted Earnings per Share | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Earnings per Share | Note 16 – 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. For the six months ended June 30, 2023, we have excluded the effect of all stock options, common stock awards and warrants from the computation of diluted loss per share because of the anti-dilutive effect of our reported net loss. Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Basic earnings (loss) per share Net income (loss) $ 15.5 $ 10.4 $ (24.7) $ 68.4 Weighted average shares of common stock 7,652,563 9,257,089 7,593,391 9,236,221 Basic earnings (loss) per share $ 2.02 $ 1.12 $ (3.25) $ 7.41 Diluted earnings (loss) per share Net income (loss) $ 15.5 $ 10.4 $ (24.7) $ 68.4 Weighted average shares of common stock 7,652,563 9,257,089 7,593,391 9,236,221 Effect of dilutive elements Common stock warrants 115,977 — — 139,160 Stock option awards — — — 37 Common stock awards 151,047 109,517 — 138,784 Dilutive weighted average shares of common stock 7,919,587 9,366,606 7,593,391 9,514,202 Diluted earnings (loss) per share $ 1.95 $ 1.11 $ (3.25) $ 7.19 Stock options and common stock awards excluded from the computation of diluted earnings per share Anti-dilutive (1) 84,748 460,512 59,703 279,516 Market-based (2) 61,354 76,534 61,354 76,534 (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 | 6 Months Ended |
Jun. 30, 2023 | |
Segment Reporting [Abstract] | |
Business Segment Reporting | Note 17 – Business Segment Reporting Our business segments reflect the internal reporting that we use to evaluate our operating and financial performance and to assess the allocation of our resources. Our reportable business segments consist of Servicing, Originations, and Corporate Items and Other. During the six months ended June 30, 2023, 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, 2022. Financial information for our segments is as follows: Three Months Ended June 30, 2023 Results of Operations Servicing Originations Corporate Items and Other Corporate Eliminations (1) Business Segments Consolidated Servicing and subservicing fees $ 237.2 $ 0.4 $ — $ — $ 237.6 Gain (loss) on reverse loans held for investment and HMBS-related borrowings, net (4.1) 4.8 — — 0.7 Gain on loans held for sale, net (1) 15.1 10.2 — — 25.3 Other revenue, net 0.3 4.0 4.2 — 8.5 Revenue 248.5 19.3 4.2 — 272.0 MSR valuation adjustments, net (1) (50.5) 1.6 — — (48.9) Operating expenses 79.6 21.1 (16.4) — 84.3 Other income (expense): Interest income 5.9 13.1 1.2 — 20.3 Interest expense (43.3) (14.1) (10.9) — (68.3) Pledged MSR liability expense (73.1) — — — (73.0) Earnings of equity method investee 2.9 — — — 2.9 Other (3.7) (0.2) (0.5) — (4.4) Other expense, net (111.2) (1.2) (10.1) — (122.5) Income (loss) before income taxes $ 7.1 $ (1.3) $ 10.5 $ — $ 16.3 Three Months Ended June 30, 2022 Results of Operations Servicing Originations Corporate Items and Other Corporate Eliminations (1) Business Segments Consolidated Servicing and subservicing fees $ 214.5 $ 0.6 $ — $ — 215.1 Gain (loss) on reverse loans held for investment and HMBS-related borrowings, net (19.0) 16.4 — — (2.6) Gain (loss) on loans held for sale, net (1) (11.5) 12.5 — (0.1) 0.9 Other revenue, net 0.4 6.7 1.6 — 8.7 Revenue 184.4 36.3 1.6 (0.1) 222.2 MSR valuation adjustments, net (1) 19.3 2.6 — 0.1 22.1 Operating expenses 82.5 42.5 19.4 — 144.4 Other income (expense): Interest income 3.0 6.6 0.1 — 9.7 Interest expense (22.3) (5.1) (10.4) — (37.9) Pledged MSR liability expense (63.0) — — — (63.0) Earnings of equity method investee 3.9 — — — 3.9 Other (4.3) 0.3 0.7 — (3.3) Other expense, net (82.6) 1.8 (9.6) — (90.4) Income (loss) before income taxes $ 38.6 $ (1.8) $ (27.3) $ — $ 9.4 Six Months Ended June 30, 2023 Results of Operations Servicing Originations Corporate Items and Other Corporate Eliminations (1) Business Segments Consolidated Servicing and subservicing fees $ 469.0 $ 0.8 $ — $ — $ 469.7 Gain on reverse loans held for investment and HMBS-related borrowings, net 9.9 12.0 — — 21.9 Gain on loans held for sale, net (1) 13.8 14.3 — — 28.1 Other revenue, net 0.8 7.1 6.2 — 14.1 Revenue 493.5 34.1 6.2 — 533.9 MSR valuation adjustments, net (1) (121.4) 3.5 — — (117.9) Operating expenses (2) 159.4 39.8 (0.7) — 198.4 Other (expense) income: Interest income 10.1 22.1 2.2 — 34.4 Interest expense (84.8) (24.0) (21.7) — (130.5) Pledged MSR liability expense (143.4) — 0.1 — (143.3) Earnings of equity method investee 3.1 — — — 3.1 Other (3.4) — 0.2 — (3.2) Other expense, net (218.5) (1.9) (19.1) — (239.5) Income (loss) before income taxes $ (5.8) $ (4.0) $ (12.2) $ — $ (22.0) Six months ended June 30, 2022 Results of Operations Servicing Originations Corporate Items and Other Corporate Eliminations (1) Business Segments Consolidated Servicing and subservicing fees $ 426.7 $ 1.1 $ — $ — $ 427.8 Gain (loss) on reverse loans held for investment and HMBS-related borrowings, net (30.9) 41.4 — — 10.5 Gain (loss) on loans held for sale, net (1) (14.2) 25.3 — (13.4) (2.3) Other revenue, net 0.8 13.5 3.4 — 17.7 Revenue 382.4 81.3 3.4 (13.4) 453.7 MSR valuation adjustments, net (1) 40.4 3.7 — 13.4 57.5 Operating expenses 156.8 88.7 25.9 — 271.4 Other (expense) income: Interest income 7.1 9.6 0.2 — 16.9 Interest expense (45.4) (9.4) (21.0) — (75.7) Pledged MSR liability expense (122.7) — — — (122.7) Earnings of equity method investee 15.9 — — — 15.9 Other (3.6) (1.1) 1.2 — (3.5) Other expense, net (148.7) (0.9) (19.5) — (169.1) Income (loss) before income taxes $ 117.4 $ (4.7) $ (41.9) $ — $ 70.8 (1) Corporate Eliminations includes inter-segment derivatives eliminations of $0.1 million and $13.4 million for the three and six months ended June 30, 2022 , respectively, reported as Gain on loans held for sale, net in Originations with a corresponding offset in MSR valuation adjustments, net in Servicing. No such derivatives eliminations were recognized during the three and six months ended June 30, 2023. Total Assets Servicing Originations Corporate Items and Other Business Segments Consolidated June 30, 2023 $ 11,682.1 $ 1,249.9 $ 284.0 $ 13,216.0 December 31, 2022 $ 11,535.0 $ 570.5 $ 293.7 $ 12,399.2 June 30, 2022 $ 11,053.6 $ 694.1 $ 360.0 $ 12,107.7 Depreciation and Amortization Expense Servicing Originations Corporate Items and Other Business Segments Consolidated Three months ended June 30, 2023 Depreciation expense $ 0.2 $ 0.1 $ 1.3 $ 1.6 Amortization of debt issuance costs and discount 0.5 — 2.7 3.3 Amortization of intangibles 1.5 — — 1.5 Three months ended June 30, 2022 Depreciation expense $ 0.3 $ 0.1 $ 2.2 $ 2.6 Amortization of debt issuance costs and discount 0.2 — 2.3 2.5 Amortization of intangibles 1.5 — — 1.5 Six months ended June 30, 2023 Depreciation expense $ 0.4 $ 0.2 $ 2.9 $ 3.4 Amortization of debt issuance costs and discount 0.7 — 5.5 6.1 Amortization of intangibles 2.9 — — 2.9 Six months ended June 30, 2022 Depreciation expense $ 0.4 $ 0.2 $ 4.5 $ 5.2 Amortization of debt issuance costs and discount 0.4 — 4.7 5.1 Amortization of intangibles 2.1 — — 2.1 |
Regulatory Requirements
Regulatory Requirements | 6 Months Ended |
Jun. 30, 2023 | |
Broker-Dealer [Abstract] | |
Regulatory Requirements | Note 18 – 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 our servicing and lending activities. Accordingly, we are regularly subject to examinations, inquiries and requests, including civil investigative demands and subpoenas. 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. 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, which could increase the possibility of adverse regulatory action against us. 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 June 30, 2023. 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 $359.4 million at June 30, 2023. PMC’s adjusted net worth was $565.3 million at June 30, 2023. The most restrictive of the various liquidity requirements for licensing and seller/servicer obligations referenced above pertains to PMC and the required minimum liquidity was $40.0 million at June 30, 2023. PMC’s liquid assets were $190.0 million at June 30, 2023. In 2022, the FHFA, the GSEs 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. The majority of the updated requirements are effective on September 30, 2023, with Ginnie Mae’s risk-based capital requirements effective on December 31, 2024. We believe PMC would be in compliance with the updated requirements if the updated requirements were in effect as of June 30, 2023, except for the new risk-based capital requirement. We are currently evaluating the potential impacts of these updated requirements, the costs and benefits of achieving compliance, and possible courses of action involving external investor solutions, structural solutions or exiting Ginnie Mae forward originations and owned servicing activities. If we are unable to identify and execute a cost-effective solution that allows us to continue these businesses and are unable to replace the lost income from these activities, or if we misjudge the magnitude of the costs and benefits and their impacts on our business, our financial results could be negatively impacted. As of June 30, 2023, our forward owned servicing portfolio included government-insured loans with a UPB of $14.4 billion, 7% of our total forward owned MSRs or 5% of our total UPB serviced and subserviced. 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. |
Commitments
Commitments | 6 Months Ended |
Jun. 30, 2023 | |
Other Commitments [Abstract] | |
Commitments | Note 19 — Commitments Unfunded Lending Commitments We have originated floating-rate reverse mortgage loans under which the borrowers have additional borrowing capacity of $1.8 billion at June 30, 2023. This additional borrowing capacity is available on a scheduled or unscheduled payment basis. During the six months ended June 30, 2023, we funded $135.9 million out of the $1.8 billion borrowing capacity as of December 31, 2022. We also had short-term commitments to lend $1.1 billion and $16.4 million in connection with our forward and reverse mortgage loan IRLCs, respectively, outstanding at June 30, 2023. 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 assume certain obligations related to each security issued. The most significant obligation is the requirement to purchase loans out of the Ginnie Mae securitization pools once the outstanding principal balance of a reverse mortgage loan is equal to or greater than 98% of the maximum claim amount (MCA repurchases). The table below provides the breakdown of the portfolio UPB with respect to the percentage of the MCA at June 30, 2023. June 30, 2023 Securitized HECM loans at less than 92% MCA $ 6,998.9 Securitized HECM loans at equal to or greater than 92% and less than 95% MCA 194.1 Securitized HECM loans at equal to or greater than 95% MCA and less than 98% MCA 175.6 Total Securitized HECM loans UPB $ 7,368.7 For the six months ended June 30, 2023 and 2022, we repurchased loans in the amount of $181.3 million and $96.6 million, respectively. Activity with regard to HMBS repurchases is as follows: Six Months Ended June 30, 2023 Active Inactive Total Beginning balance $ 70.7 $ 107.7 $ 178.4 Additions 133.7 47.6 181.3 Recoveries, net (1) (137.9) (26.9) (164.8) Transfers (0.6) 0.6 — Changes in value 0.1 (2.2) (2.2) Ending balance $ 66.0 $ 126.9 $ 192.8 (1) Includes amounts received upon assignment of loan to HUD, loan payoff, REO liquidation and claim proceeds less any amounts charged off as unrecoverable. Our subservicing clients bear the financial obligation and risks associated with purchasing loans out of securitization pools within the portfolio we subservice. Client Concentration Our Servicing segment has exposure to concentration risk and client retention risk. As of June 30, 2023, our servicing portfolio included a significant client relationship with Rithm which represented 16% and 27% of our total servicing portfolio UPB and loan count, respectively, and approximately 68% of all delinquent loans that Ocwen services. Our Subservicing Agreements and Servicing Addendum with Rithm are in their second terms that end December 31, 2023, but they provide for automatic one-year renewals, unless Ocwen (by July 1, 2023) or Rithm (by October 1, 2023) provide advance notice of termination. Ocwen did not provide notice of termination on July 1, 2023. At the end of the second term, if notice for termination is given by the appropriate time, Rithm has the right to terminate the Subservicing Agreements and Servicing Addendum for convenience. If Rithm exercises its right to terminate all or some of the agreements for convenience at the end of the Second Term on December 31, 2023, we might need to right-size certain aspects of our servicing business as well as the related corporate support functions. The impacts to our consolidated statements of operations in connection with our Rithm agreements are disclosed in Note 8 — Other Financing Liabilities, at Fair Value. Receivables and Other liabilities recorded on our consolidated balance sheets are disclosed in Note 9 – Receivables and Note 13 – Other Liabilities, respectively. |
Contingencies
Contingencies | 6 Months Ended |
Jun. 30, 2023 | |
Loss Contingency [Abstract] | |
Contingencies | Note 20 – 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), current or former employees, 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, (4) certain legacy mortgage reinsurance arrangements violated RESPA, and (5) we failed to subservice loans appropriately pursuant to subservicing and other agreements. 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 $10.2 million at June 30, 2023. We cannot currently estimate the amount, if any, of reasonably possible losses above amounts that have been recorded at June 30, 2023. 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 class actions challenging, under state and federal law, our practice of charging borrowers a fee to use certain optional payment methods, including: 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), Williams v. PHH Mortg. Corp., et al. (S.D. TX) and Jones v. PHH Mortg. Corp., et al. (D. N.J.). We have reached settlements in five of these class actions. In the Thacker and Torliatt cases, the parties executed settlement agreements which were granted final approval by the Court in November 2022. In the Morris class action, the parties’ settlement agreement was granted final approval by the Court on June 16, 2023. In the Williams class action, the Court has granted preliminary approval of the settlement. Finally, we have reached a tentative settlement with the class plaintiffs in the Forest class action. In February 2023, the Jones class action was filed in federal court in New Jersey and we have filed a motion to dismiss the complaint. 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. In January 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 on February 24, 2023 that court reversed and remanded for further proceedings. Ocwen will continue to vigorously defend itself. Our current accrual with respect to this matter is included in the $10.2 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. 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, the Court scheduled the trial for November 27, 2023. 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, 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. 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. On April 6, 2022, the Eleventh Circuit issued its opinion relating to the appeal, 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. Following briefing and oral argument, on May 2, 2023, the court issued an order granting in full Ocwen’s motion for summary judgment on the remaining 9 counts. In that order, based on a claim by claim analysis, the court found that all of the CFPB’s claims were barred under the principles of res judicata because they were premised on servicing activity covered by the 2014 Consent Judgment referenced above. Also on May 2, 2023, the court entered final judgment in our favor, denied all pending motions as moot, and closed the case. The CFPB did not appeal the court’s order and therefore the case will remain closed. Our prior accrual with respect to this matter was reversed effective June 30, 2023. State Licensing 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 (including our practice of charging borrowers a fee to use certain optional payment methods); 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, and engage with us on various matters. 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. Loan Put-Back and Related Contingencies We have exposure to representation, warranty and indemnification obligations relating to our lending, loan sales and securitization activities, and servicing practices. We receive origination representations and warranties from our network of approved originators in connection with loans we purchased through our correspondent lending channel. To the extent that we have recourse against a third-party originator, we may recover part or all of any loss we may incur. We do not provide or assume any origination representations and warranties in connection with our MSR purchases. At June 30, 2023 and June 30, 2022, we had outstanding representation and warranty repurchase demands of $39.1 million UPB (142 loans) and $51.9 million UPB (270 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: Six Months Ended June 30, 2023 2022 Beginning balance (1) $ 41.6 $ 49.4 Provision for (reversal of) representation and warranty obligations 2.1 (2.2) New production liability 0.6 1.4 Charge-offs and other (2) (6.2) (5.9) Ending balance (1) $ 38.1 $ 42.7 (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 June 30, 2023 . Other Ocwen, on its own behalf and on behalf of various mortgage loan investors, has 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 entered into tolling agreements, initiated arbitration or litigation, engaged in settlement discussions, or took other similar actions. Ocwen has now settled or otherwise resolved all of its pending mortgage insurance litigation matters. 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 | 6 Months Ended |
Jun. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 21 – Subsequent EventsOn August 1, 2023, PMC sold to MAV certain GSE MSRs with a UPB of approximately $6.8 billion in a transaction which did not qualify for sale accounting and was accounted for as a secured borrowing. |
Organization and Basis of Pre_2
Organization and Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
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 six months ended June 30, 2023 are not necessarily indicative of the results that may be expected for any other interim period or for the year ending December 31, 2023. 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, 2022. |
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 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 GAAP). Our adoption of this ASU on January 1, 2023 did not have a material impact on our consolidated financial statements. Financial Instruments—Credit Losses (ASC 326) Troubled Debt Restructurings and Vintage Disclosures (ASU 2022-02) The amendments in this ASU are related to 1) troubled debt restructurings (TDRs) and 2) vintage disclosures which affect all entities after they have adopted ASU 2016-13. The amendments eliminate the accounting guidance for TDRs by creditors in Subtopic 310-40 Receivables – Troubled Debt Restructurings by Creditors, while enhancing disclosure requirements for certain loan refinancing and restructurings by creditors when a borrower is experiencing financial difficulty. Specifically, rather than applying the recognition and measurement guidance for TDRs, an entity must apply the loan refinancing and restructuring guidance in ASC 310-20-35-9 through 35-11 to determine whether a modification results in a new loan or a continuation of an existing loan. The amendments in this ASU also requires an entity to disclose current-period gross write-offs by year of origination for financing receivables and net investments in leases with the scope of ASC 326 – Financial Instruments – Credit Losses – Measured at Amortized Cost. Our adoption of this ASU on January 1, 2023 did not have a material impact on our consolidated financial statements. |
Securitizations and Variable _2
Securitizations and Variable Interest Entities (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
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 June 30, Six Months Ended June 30, 2023 2022 2023 2022 Proceeds received from securitizations $ 2,298.1 $ 4,109.6 $ 4,614.9 $ 7,697.8 Servicing fees collected (1) 28.2 23.9 55.2 45.6 Purchases of previously transferred assets, net of claims reimbursed (4.0) (4.8) (7.1) (6.8) $ 2,322.4 $ 4,128.7 $ 4,663.0 $ 7,736.6 |
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: June 30, 2023 December 31, 2022 Carrying value of assets MSRs, at fair value $ 583.2 $ 524.3 Advances 62.0 75.9 UPB of loans transferred (1) 40,875.0 37,571.1 Maximum exposure to loss (2) $ 41,520.2 $ 38,171.2 (1) Includes $8.0 billion and $6.8 billion of loans delivered to Ginnie Mae as of June 30, 2023 and December 31, 2022, respectively, and includes loan modifications repurchased and delivered through the Ginnie Mae Early Buyout Program (EBO). (2) The maximum exposure to loss in the table above is primarily based on the remaining UPB of loans serviced and assumes all loans were deemed worthless as of the reporting date. It does not take into consideration the proceeds from the underlying collateral liquidation, recoveries or any other recourse available to us, including from mortgage insurance, guarantees or correspondent sellers. We do not believe the maximum exposure to loss from our involvement with these previously transferred loans is representative of the actual loss we are likely to incur based on our contractual rights and historical loss experience and projections. Also, refer to the Loan Put-Back and Related Contingencies section in Note 20 – Contingencies. |
Schedule Of Securitization Reverse Mortgage Loans Buyouts And Financing Liabilities | The table below presents the carrying value and classification of the assets and liabilities reported on our consolidated balance sheet that are associated with the securitization reverse mortgage loans buyouts and financing liabilities: June 30, 2023 Mortgage loans (Loans held for sale, at fair value) $ 141.1 Receivables, net 44.2 REO (Other Assets) 12.5 Debt service accounts (Restricted cash) 50.8 Outstanding borrowings (Mortgage loan financing facilities, net) 264.9 Unamortized discount and debt issuance costs (Mortgage loan financing facilities, net) 26.6 Prepaid interest - Interest Reserve Account (Other assets) 0.7 |
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: June 30, 2023 December 31, 2022 Match funded advances (Advances, net) $ 503.3 $ 608.4 Debt service accounts (Restricted cash) 14.6 15.8 Unamortized deferred lender fees (Other assets) 0.5 2.3 Prepaid interest (Other assets) 0.7 0.9 Advance match funded liabilities 429.5 512.5 |
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 Agency MSR financing facility and the PLS Notes facility: June 30, 2023 December 31, 2022 MSRs pledged (MSRs, at fair value) $ 521.9 $ 696.9 Debt service account (Restricted cash) 1.8 1.8 Unamortized deferred lender fees (Other assets) 1.3 1.1 Outstanding borrowings (MSR financing facilities, net) 285.2 366.5 Unamortized debt issuance costs (MSR financing facilities, net) 0.6 0.8 |
Fair Value (Tables)
Fair Value (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
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: June 30, 2023 December 31, 2022 Level Carrying Value Fair Value Carrying Value Fair Value Financial assets Loans held for sale Loans held for sale, at fair value (a) (f) 3, 2 $ 1,352.9 $ 1,352.9 $ 617.8 $ 617.8 Loans held for sale, at lower of cost or fair value (b) 3 3.7 3.7 4.9 4.9 Total Loans held for sale $ 1,356.6 $ 1,356.6 $ 622.7 $ 622.7 Loans held for investment, at fair value Loans held for investment - Reverse mortgages (a) 3 $ 7,674.8 $ 7,674.8 $ 7,504.1 $ 7,504.1 Loans held for investment - Restricted for securitization investors (a) 3 6.0 6.0 6.7 6.7 Total Loans held for investment, at fair value $ 7,680.7 $ 7,680.7 $ 7,510.8 $ 7,510.8 Advances, net (c) 3 $ 602.7 $ 602.7 $ 718.9 $ 718.9 Receivables, net (c) 3 188.6 188.6 180.8 180.8 June 30, 2023 December 31, 2022 Level Carrying Value Fair Value Carrying Value Fair Value Financial liabilities Advance match funded liabilities (c) 3 $ 430.4 $ 430.4 $ 513.7 $ 513.7 Financing liabilities, at fair value HMBS-related borrowings (a) 3 $ 7,486.4 $ 7,486.4 $ 7,326.8 $ 7,326.8 Other financing liabilities Financing liability - Pledged MSR liability (a) 3 $ 1,009.5 $ 1,009.5 $ 931.7 $ 931.7 Financing liability - Excess Servicing Spread (ESS) (a) 3 258.5 258.5 199.0 199.0 Financing liability - Owed to securitization investors (a) 3 6.0 6.0 6.7 6.7 Total Other financing liabilities $ 1,274.0 $ 1,274.0 $ 1,137.4 $ 1,137.4 Mortgage loan financing facilities (c) (d) 3 1,515.0 1,515.0 702.7 702.7 MSR financing facilities (c) (e) 3 864.8 845.3 953.8 932.1 Senior notes: PMC Senior secured notes due 2026 (c) (e) 2 $ 370.1 $ 335.1 $ 369.4 $ 331.4 OFC Senior secured notes due 2027 (c) (e) 3 234.9 226.5 230.2 223.9 Total Senior notes $ 605.0 $ 561.6 $ 599.6 $ 555.2 Derivative financial instrument assets (liabilities), net Interest rate lock commitments (IRLCs) (a) 3 $ 1.4 $ 1.4 $ (0.7) $ (0.7) Forward sales of loans (a) 1 — — 0.5 0.5 TBA / Forward mortgage-backed securities (MBS) trades (a) 1 (0.7) (0.7) (0.7) (0.7) Interest rate swap futures (a) 1 (10.9) (10.9) (13.6) (13.6) TBA forward pipeline trades (a) 1 7.0 7.0 6.6 6.6 Option contracts (a) 1 (1.2) (1.2) — — Other (a) 3 (0.1) (0.1) (0.1) (0.1) MSRs (a) 3 $ 2,675.7 $ 2,675.7 $ 2,665.2 $ 2,665.2 (a) Measured at fair value on a recurring basis in our financial statements. (b) Measured at fair value on a non-recurring basis in our financial statements. (c) Disclosed, but not measured at fair value in our financial statements. (d) As of June 30, 2023, the carrying value of the OLIT Notes approximated fair value as the notes were recently issued on June 21, 2023. (e) The carrying values are net of unamortized debt issuance costs and discount. See Note 12 – 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 June 30, 2023 Beginning balance $ 6.2 $ (6.2) $ 23.3 $ (263.1) $ 4.8 Purchases, issuances, sales and settlements Purchases and other — — 240.4 — — Issuances (1) — — — — 4.4 Sales — — (38.5) — — Settlements (2) (0.2) 0.2 (25.8) 8.1 — Transfers: Loans held for investment, at fair value — — 1.5 — — Loans held for sale, at fair value (1) — — — — (10.8) REO (Other assets) — — (7.1) — — Receivables, net — — (15.6) — — Capitalization of advances on Ginnie Mae modifications — — 1.7 — — Other — — 2.8 — — Net addition (disposition/derecognition) (0.2) 0.2 159.5 8.2 (6.5) Included in earnings: Change in fair value (1) — — 11.7 (3.6) 3.0 Gain (loss) on sale of loans and other — — 2.9 — — — — 14.6 (3.6) 3.0 Ending balance $ 6.0 $ (6.0) $ 197.4 $ (258.5) $ 1.4 Loans Held for Investment - Restricted for Securitization Investors Financing Liability - Owed to Securitization Investors Loans Held for Sale - Fair Value IRLCs Three months ended June 30, 2022 Beginning balance $ 7.7 $ (7.7) $ 230.4 $ 5.7 Purchases, issuances, sales and settlements Purchases and other — — 57.5 — Issuances (1) — — — 82.2 Sales — — (243.8) — Settlements (0.4) 0.4 — — Transfers: Loans held for sale, at fair value (1) — — — 3.6 Receivables, net — — (1.7) — Net addition (disposition/derecognition) (0.4) 0.4 (187.9) 85.9 Change in fair value included in earnings (1) — — (1.2) (85.8) Ending balance $ 7.3 $ (7.3) $ 41.4 $ 5.7 Loans Held for Investment - Restricted for Securitization Investors Financing Liability - Owed to Securitization Investors Loans Held for Sale - Fair Value ESS Financing Liability IRLCs Six Months Ended June 30, 2023 Beginning balance $ 6.7 $ (6.7) $ 32.1 $ (199.0) $ (0.7) Purchases, issuances, sales and settlements Purchases and other — — 252.8 — Issuances (1) — — — (68.7) 10.1 Sales — — (58.7) — — Settlements (2) (0.7) 0.7 (25.8) 14.9 — Transfers: Loans held for investment, at fair value — — 1.5 — — Loans held for sale, at fair value (1) — — — — (31.2) REO (Other assets) — — (7.1) — — Receivables, net — — (16.1) — — Capitalization of advances on Ginnie Mae modifications — — 1.7 — — Other — — 2.8 — — Net addition (disposition/derecognition) (0.7) 0.7 151.3 (53.8) (21.0) Included in earnings: Change in fair value (1) — — 11.2 (5.6) 23.1 Gain (loss) on sale of loans and other — — 2.9 — — — — 14.0 (5.6) 23.1 Ending balance $ 6.0 $ (6.0) $ 197.4 $ (258.5) $ 1.4 Loans Held for Investment - Restricted for Securitization Investors Financing Liability - Owed to Securitization Investors Loans Held for Sale - Fair Value IRLCs Six Months Ended June 30, 2022 Beginning balance $ 7.9 $ (7.9) $ 220.9 $ 18.1 Purchases, issuances, sales and settlements Purchases and other — — 118.2 — Issuances (1) — — — 161.9 Sales — — (291.6) — Settlements (0.6) 0.6 — — Transfers: Loans held for sale, at fair value (1) — — — (53.9) Receivables, net — — (1.8) — Net addition (disposition/derecognition) (0.6) 0.6 (175.1) 108.0 Change in fair value included in earnings (1) — — (4.4) (120.3) Ending balance $ 7.3 $ (7.3) $ 41.4 $ 5.7 (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 $(3.4) million and $2.1 million for the three and six months ended June 30, 2023, respectively, and $0.1 million and $(12.3) million for the three and six months ended June 30, 2022, respectively. See Note 14 – Derivative Financial Instruments and Hedging Activities (2) Settlements related to the ESS financing liability are recorded in earnings as MSR valuation adjustments , net . See Note 7 – Mortgage Servicing |
Schedule of Significant Assumptions used in Valuation | Significant unobservable assumptions June 30, December 31, Life in years Range 0.9 to 7.8 1.0 to 7.6 Weighted average 5.2 5.0 Conditional prepayment rate, including voluntary and involuntary prepayments Range 11.9% to 40.6% 13.2% to 45.0% Weighted average 17.3 % 18.0 % Discount rate 5.2 % 5.1 % Significant unobservable assumptions June 30, 2023 December 31, 2022 Agency Non-Agency Agency Non-Agency Weighted average prepayment speed 7.1 % 7.9 % 6.9 % 7.9 % Weighted average lifetime delinquency rate 1.1 % 10.3 % 1.4 % 10.1 % Weighted average discount rate 9.6 % 10.6 % 9.6 % 10.6 % Weighted average cost to service (in dollars) $ 71 $ 202 $ 72 $ 201 Significant unobservable assumptions June 30, December 31, Life in years Range 0.9 to 7.8 1.0 to 7.6 Weighted average 5.2 5.0 Conditional prepayment rate Range 11.9% to 40.6% 13.2% to 45.0% Weighted average 17.3 % 18.0 % Discount rate 5.2 % 5.0 % Significant unobservable assumptions June 30, December 31, Weighted average prepayment speed 7.2 % 7.6 % Weighted average delinquency rate 6.7 % 7.1 % Weighted average subservicing life (in years) 4.5 5.6 Weighted average discount rate 10.2 % 10.2 % Weighted average cost to service (in dollars) $ 166 $ 174 |
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 June 30, 2023 given hypothetical increases in lifetime prepayments and yield assumptions: Adverse change in fair value 10% 20% Change in weighted average prepayment speeds (in percentage points) 0.8 1.6 Change in fair value due to change in weighted average prepayment speeds $ (63.0) $ (123.4) Change in weighted average discount rate (in percentage points) 1.0 1.9 Change in fair value due to change in weighted average discount rate $ (72.5) $ (139.3) |
Loans Held for Sale (Tables)
Loans Held for Sale (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Receivables [Abstract] | |
Schedule of Loans Held for Sale Fair Value | Loans Held for Sale - Fair Value Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Beginning balance $ 845.2 $ 716.0 $ 617.8 $ 917.5 Originations and purchases 2,859.9 4,682.0 5,412.3 8,154.6 Proceeds from sales (2,279.6) (4,603.4) (4,575.8) (8,174.2) Principal collections (31.6) (65.8) (47.0) (95.2) Transfers from (to): Loans held for investment, at fair value 1.5 16.5 3.1 19.6 Receivables, net (15.6) 32.9 (14.5) 32.2 REO (Other assets) (7.1) — (11.2) — Capitalization of advances on Ginnie Mae modifications 1.7 5.8 3.7 13.1 Realized loss on sale of loans (1) (28.4) (114.3) (50.4) (186.6) Fair value gain (loss) on loans held for sale 4.0 10.8 10.2 (1.4) Other 2.8 2.5 4.5 3.6 Ending balance $ 1,352.9 $ 683.1 $ 1,352.9 $ 683.1 UPB $ 1,341.0 $ 685.1 Premium (discount) 15.0 3.8 Fair value adjustment (3.1) (5.7) Total $ 1,352.9 $ 683.1 (1) Excludes retained MSR and gain (loss) on economic hedge instruments. The following table presents the fair value of Loans held for sale, at fair value by type: June 30, 2023 December 31, 2022 GSE loans $ 790.0 $ 318.3 Government- Forward loans 365.5 150.2 Forward loans repurchased from Ginnie Mae guaranteed securitization (1) 20.0 32.1 Reverse loans (1) (2) 159.4 102.5 Other residential mortgage loans 18.0 14.8 Total $ 1,352.9 $ 617.8 (1) Pursuant to Ginnie Mae servicing guidelines. (2) Includes inactive reverse mortgage loans purchased from Ginnie Mae securitization pools that reached the 98% of maximum claim amount and are generally liquidated through foreclosure and subsequent sale of the REO properties. |
Schedule of Loans Held for Sale at Lower Cost or Fair Value, Activity | Loans Held for Sale - Lower of Cost or Fair Value June 30, 2023 2022 Carrying amount before valuation allowance $ 7.4 $ 8.1 Valuation allowance (3.7) (3.8) Ending balance, net $ 3.7 $ 4.3 |
Schedule of Gains on Loans Held for Sale, Net | Gain (Loss) on Loans Held for Sale, Net Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Gain (loss) on sales of loans, net MSRs retained on transfers of forward mortgage loans $ 31.5 $ 60.2 $ 62.6 $ 106.0 Gain (loss) on sale of forward mortgage loans (1) (28.1) (90.3) (50.2) (162.6) Gain (loss) on sale of repurchased Ginnie Mae loans (1) (2) (0.1) (10.3) 0.1 (9.7) 3.3 (40.4) 12.4 (66.3) Change in fair value of IRLCs (3.2) 0.9 2.4 (11.2) Change in fair value of loans held for sale (3) 4.3 12.0 9.1 0.4 Gain (loss) on economic hedge instruments (4) 21.2 29.1 4.8 76.2 Other (0.3) (0.7) (0.6) (1.4) $ 25.3 $ 0.9 $ 28.1 $ (2.3) (1) Realized gain (loss) on sale of loans, excluding retained MSRs. (2) Includes an $8.8 million loss during the three months ended June 30, 2022 on certain delinquent and aged loans repurchased (net of the associated Ginnie Mae MSR fair value adjustment) in connection with the Ginnie Mae EBO program with an aggregated UPB of $299.7 million, net of the associated MSR fair value adjustment. (3) Includes a $10.9 million unrealized gain during the three months ended June 30, 2023 related to the revaluation of inactive HECM loan buyouts opportunistically acquired at a discount and securitized in a private placement transaction completed in June 2023. Also see Note 2 – Securitizations and Variable Interest Entities. (4) Excludes gains of $0.1 million and $13.4 million during the three and six months ended June 30, 2022, respectively, on inter-segment economic hedge derivatives presented within MSR valuation adjustments, net. No such gains or losses were recognized during the three and six months ended June 30, 2023. 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 and are eliminated in the consolidated financial statements. Refer to Note 17 – Business Segment Reporting. |
Reverse Mortgages (Tables)
Reverse Mortgages (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Receivables [Abstract] | |
Schedule of Loans Held For Investment and HMBS Related Borrowings | Three Months Ended June 30, 2023 2022 Loans Held for Investment - Reverse Mortgages HMBS - Related Borrowings Loans Held for Investment - Reverse Mortgages HMBS - Related Borrowings Beginning balance $ 7,662.9 $ (7,470.6) $ 7,451.6 $ (7,118.8) Originations 272.2 — 524.6 — Securitization of HECM loans accounted for as a financing (including realized fair value changes) — (271.1) — (566.0) Additional proceeds from securitization of HECM loans and tails — 0.1 — (10.1) Repayments (principal payments received) (291.8) 289.8 (476.3) 476.1 Transfers to: Loans held for sale, at fair value (1.5) — (16.5) — Receivables, net (1.0) — (36.9) — Change in fair value included in earnings (1) 34.1 (34.5) (69.9) 63.6 Ending balance $ 7,674.8 $ (7,486.4) $ 7,376.5 $ (7,155.3) Securitized loans (pledged to HMBS-related borrowings) $ 7,553.7 $ (7,486.4) $ 7,220.8 $ (7,155.3) Unsecuritized loans 121.0 155.8 Total $ 7,674.8 $ 7,376.5 Six Months Ended June 30, 2023 2022 Loans Held for Investment - Reverse Mortgages HMBS - Related Borrowings Loans Held for Investment - Reverse Mortgages HMBS - Related Borrowings Beginning balance $ 7,504.1 $ (7,326.8) $ 7,199.8 $ (6,885.0) Originations 507.4 — 1,144.9 — Securitization of HECM loans accounted for as a financing (including realized fair value changes) — (502.3) — (1,149.9) Additional proceeds from securitization of HECM loans and tails — (6.1) — (22.3) Acquisition — — 211.3 (209.1) Repayments (principal payments received) (527.3) 525.1 (995.1) 993.5 Transfers to: Loans held for sale, at fair value (3.1) — (19.6) — Receivables, net (2.0) — (49.4) — REO (Other assets) (0.1) — (0.1) — Change in fair value included in earnings (1) 195.7 (176.2) (115.1) 117.5 Ending balance $ 7,674.8 $ (7,486.4) $ 7,376.5 $ (7,155.3) Securitized loans (pledged to HMBS-related borrowings) $ 7,553.7 $ (7,486.4) $ 7,220.8 $ (7,155.3) Unsecuritized loans 121.0 155.8 Total $ 7,674.8 $ 7,376.5 (1) See further breakdown of the net gain (loss) in the table below. |
Schedule of Reverse Mortgage Revenue, Net | Gain (Loss) on Reverse Loans Held for Investment and HMBS-related Borrowings, Net Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Gain on new originations (1) $ 3.6 $ 12.7 $ 9.6 $ 33.3 Gain on tail securitizations (2) 2.5 2.8 6.1 6.7 Net interest income (servicing fee) (3) 5.8 5.4 11.7 10.7 Other change in fair value of securitized loans held for investment and HMBS-related borrowings, net (12.4) (27.3) (7.9) (48.3) Fair value gains (losses) included in earnings (2) (0.5) (6.4) 19.5 2.5 Loan fees and other 1.2 3.7 2.4 8.0 $ 0.7 $ (2.6) $ 21.9 $ 10.5 (1) Includes the changes in fair value of newly originated loans held for investment in the period from interest rate lock commitment date through securitization date. (2) Includes the cash realized gains upon securitization of tails (previously reported within Other change in fair value of securitized loans held for investment and HMBS-related borrowings, net in the table above). |
Advances (Tables)
Advances (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Advances [Abstract] | |
Schedule of Advances Paid on Behalf of Borrowers or on Foreclosed Properties | June 30, 2023 December 31, 2022 Principal and interest $ 202.6 $ 215.5 Taxes and insurance 271.4 367.5 Foreclosures, bankruptcy, REO and other 136.0 142.1 610.0 725.1 Allowance for losses (7.4) (6.2) Advances, net $ 602.7 $ 718.9 |
Schedule of Activity in Advances | The following table summarizes the activity in net advances: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Beginning balance - before Allowance for Losses $ 663.1 $ 736.9 $ 725.1 $ 779.5 New advances 146.5 190.0 335.3 387.3 Transfer from Receivables 2.2 1.6 — 11.1 — Sales of advances (0.6) (0.2) (4.9) (0.8) Collections of advances and other (201.1) (272.9) (456.6) (512.1) Ending balance - before Allowance for Losses 610.0 653.8 610.0 653.8 Beginning balance - Allowance for Losses $ (6.2) $ (6.9) (6.2) (7.0) Provision expense (2.8) (2.1) (4.6) (3.9) Net charge-offs and other 1.6 2.4 3.4 4.3 Ending balance - Allowance for Losses (7.4) (6.6) (7.4) (6.6) Ending balance, net $ 602.7 $ 647.2 $ 602.7 $ 647.2 |
Mortgage Servicing (Tables)
Mortgage Servicing (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Transfers and Servicing [Abstract] | |
Schedule of Activity Related to MSRs - Fair Value Measurement Method | MSRs – At Fair Value Three Months Ended June 30, 2023 2022 Agency Non-Agency Total Agency Non-Agency Total Beginning balance $ 1,896.4 $ 684.2 $ 2,580.6 $ 1,664.9 $ 658.4 $ 2,323.3 Sales — — — — — — Additions: Recognized on the sale of residential mortgage loans 31.5 — 31.5 60.2 — 60.2 Purchases 19.1 — 19.1 36.9 — 36.9 Servicing transfers and adjustments (1) (32.5) — (32.5) 11.8 2.9 14.7 Net additions (sales) 18.1 — 18.1 108.8 2.9 111.7 Changes in fair value recognized in earnings: Changes in valuation inputs or assumptions 103.5 33.3 136.8 86.0 32.3 118.3 Realization of expected cash flows (50.6) (9.1) (59.7) (43.0) (24.6) (67.6) Fair value gains (losses) recognized in earnings 52.9 24.2 77.1 43.0 7.7 50.7 Ending balance $ 1,967.4 $ 708.4 $ 2,675.7 $ 1,816.6 $ 669.1 $ 2,485.7 MSRs – At Fair Value Six Months Ended June 30, 2023 2022 Agency Non-Agency Total Agency Non-Agency Total Beginning balance $ 1,931.8 $ 733.5 $ 2,665.2 $ 1,571.8 $ 678.3 $ 2,250.1 Sales — — — (149.3) — (149.4) Additions: Recognized on the sale of residential mortgage loans 62.6 — 62.6 106.0 — 106.0 Purchases 44.0 — 44.0 83.7 — 83.7 Servicing transfers and adjustments (1) (32.5) — (32.5) 14.7 (0.8) 13.9 Net additions (sales) 74.1 — 74.1 55.1 (0.8) 54.2 Changes in fair value recognized in earnings: Changes in valuation inputs or assumptions 61.4 (8.2) 53.2 280.4 41.3 321.8 Realization of expected cash flows (99.9) (16.9) (116.8) (90.7) (49.7) (140.4) Fair value gains (losses) recognized in earnings (38.5) (25.1) (63.6) 189.7 (8.4) 181.4 Ending balance $ 1,967.4 $ 708.4 $ 2,675.7 $ 1,816.6 $ 669.1 $ 2,485.7 (1) Servicing transfers and adjustments for the three months ended June 30, 2023 include a $32.5 million derecognition of Agency MSRs previously sold to MAV in a transaction which did not qualify for sale accounting treatment. We derecognized the MSRs with a UPB of $2.3 billion from our balance sheet together with the associated Pledged MSR liability upon the sale of the MSRs by MAV to a third party. |
Financing Receivable, Past Due | The following table summarizes delinquency status of the loans underlying our MSRs: June 30, 2023 December 31, 2022 Delinquent loans Agency Non - Agency Total Agency Non - Agency Total 30 days 1.6 % 8.4 % 4.6 % 1.7 % 8.5 % 4.8 % 60 days 0.5 3.4 1.7 0.5 3.3 1.8 90 days or more 1.0 8.2 4.2 1.1 8.6 4.5 Total 30-60-90 days or more 3.1 % 20.0 % 10.5 % 3.3 % 20.4 % 11.1 % |
Schedule of Composition of Servicing UPB | June 30, 2023 December 31, 2022 June 30, 2022 Fair Value UPB ($ billions) Fair Value UPB ($ billions) Fair Value UPB ($ billions) Owned MSRs $ 1,643.7 $ 121.1 $ 1,710.6 $ 126.2 $ 1,552.6 $ 116.3 Rithm and others transferred MSRs (1) (2) 702.0 $ 53.4 601.2 $ 47.3 550.8 $ 49.7 MAV transferred MSRs (1) 330.0 $ 22.9 353.4 $ 26.1 382.2 $ 28.5 Total MSRs $ 2,675.7 $ 197.4 $ 2,665.2 $ 199.6 $ 2,485.7 $ 194.5 (1) MSRs subject to sale agreements that do not meet sale accounting criteria. See Note 8 — Other Financing Liabilities, at Fair Value. (2) At June 30, 2023, the UPB of MSRs transferred to Rithm for which title is retained by Ocwen was $10.3 billion. |
Schedule of Components of Servicing and Subservicing Fees | Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Loan servicing and subservicing fees Servicing $ 89.4 $ 80.9 $ 179.3 $ 169.4 Subservicing 18.4 20.4 38.0 35.0 MAV (1) 17.4 18.8 35.7 35.5 Rithm and others (1) 59.2 64.7 118.8 131.9 184.4 184.8 371.8 371.8 Ancillary income Custodial accounts (float earnings) 26.2 1.8 46.4 2.8 Late charges 9.5 11.7 19.0 21.8 Reverse subservicing ancillary fees 9.8 6.3 18.0 9.4 Loan collection fees 2.3 2.9 4.9 5.8 Recording fees 1.3 2.6 2.5 5.9 Boarding and deboarding fees 0.9 1.9 1.8 3.6 GSE forbearance fees 0.3 0.2 0.5 0.4 Other, net 2.9 3.0 4.8 6.3 53.2 30.3 97.9 56.0 Total Servicing and subservicing fees $ 237.6 $ 215.1 $ 469.7 $ 427.8 (1) Includes servicing fees related to transferred MSRs and subservicing fees. See Note 8 — Other Financing Liabilities, at Fair Value . |
Fair Value Measurement Inputs and Valuation Techniques | The following table presents the components of MSR valuation adjustments, net: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 MSR fair value changes due to rates and assumptions $ 136.8 $ 118.3 $ 53.2 $ 321.8 MSR realization of expected cash flows (59.6) (67.6) (116.6) (140.4) Total MSR fair value gains (losses) (1) 77.2 50.7 (63.3) 181.4 Pledged MSR liability fair value changes due to rates and assumptions (81.0) (40.4) (42.8) (97.2) Pledged MSR liability realization of expected cash flows 15.6 28.8 30.1 57.0 Total Pledged MSR liability fair value gains (losses) (2) (65.4) (11.7) (12.7) (40.2) ESS financing liability fair value changes due to rates and assumptions (3.6) — (5.6) — ESS financing liability realization of expected cash flows 8.1 — 14.9 — Total ESS financing liability fair value gains (losses) (2) 4.6 — 9.3 — Derivative fair value gain (loss) (MSR economic hedges) (65.2) (16.9) (51.1) (83.7) MSR valuation adjustments, net $ (48.9) $ 22.1 $ (117.9) $ 57.5 (1) Includes $0.1 million and $0.3 million for the three and six months ended June 30, 2023, respectively, and $0 and $0 during the three and six months ended June 30, 2022, respectively, of fair value changes on the reverse MSR liability and other. (2) Also refer to Note 8 — Other Financing Liabilities, at Fair Value for additional information related to the ESS financing liability and Pledged MSR liability, including a tabular presentation of activity of the Pledged MSR liability for the reported periods. |
MSR Transfers Not Qualifying _2
MSR Transfers Not Qualifying for Sale Accounting (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
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 June 30, 2023 2022 Pledged MSR Liability Rithm and Others MAV (1) Total Rithm and Others MAV (1) Total Beginning Balance $ 564.5 $ 318.7 $ 883.3 $ 545.3 $ 319.0 $ 864.3 MSR transfers 93.3 0.1 93.4 — 30.3 30.3 Derecognition of financing liability (2) — (32.5) (32.5) — — — Fair value gain (loss) Changes in fair value due to inputs and assumptions 39.3 41.8 81.0 24.7 15.7 40.4 Realization of expected cash flows (7.2) (8.4) (15.6) (19.2) (9.5) (28.8) Total fair value (gain) loss 32.1 33.4 65.4 5.5 6.2 11.7 Ending Balance $ 689.9 $ 319.7 $ 1,009.5 $ 550.8 $ 355.5 $ 906.3 Six Months Ended June 30, 2023 2022 Pledged MSR Liability Rithm and Others MAV Agreements (1) Total Original Rights to MSRs Agreements - Rithm MAV Agreements (1) Total Beginning Balance $ 601.9 $ 329.8 $ 931.7 $ 558.9 $ 238.1 $ 797.1 MSR transfers 97.6 0.2 97.8 — 69.6 69.6 Derecognition of financing liability (2) — (32.5) (32.5) — — — Calls — — — (0.6) — (0.6) Fair value gain (loss) Changes in fair value due to inputs and assumptions 3.5 39.2 42.7 31.5 65.6 97.2 Realization of expected cash flows (13.1) (17.0) (30.1) (39.1) (17.9) (57.0) Total fair value (gain) loss (3) (9.6) 22.2 12.6 (7.6) 47.7 40.2 Ending Balance $ 689.9 $ 319.7 $ 1,009.5 $ 550.8 $ 355.5 $ 906.3 (1) 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 contractually retained by PMC (shared between PMC and MAV) and other contractual cash flows during the expected life of the subservicing agreement. (2) During the three months ended June 30, 2023, 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 $2.3 billion. (3) The changes in fair value of the MAV Pledged MSR liability includes a $14.1 million loss associated with the amendment to the MAV Subservicing Agreement in March 2022, resulting in lower contractual ancillary income retained by PMC. |
Schedule of Assets, Liabilities Related to MSR Transfer Agreements | |
Schedule of Results of Operations in Connection With MSR Transfer Agreements that Do Not Qualify for Sale Accounting | Three Months Ended June 30, 2023 Three Months Ended June 30, 2022 Rithm and Others MAV Total Rithm and Others MAV Total Servicing fees collected on behalf of Rithm, MAV and others $ 59.2 $ 15.5 $ 74.7 $ 64.7 $ 17.5 $ 82.2 Less: Subservicing fee retained by Ocwen (16.9) (2.1) (19.1) (18.8) (2.3) (21.0) Ancillary fee/income and other settlement (including expense reimbursement) 3.6 (0.2) 3.5 1.8 — 1.8 Transferred MSR net servicing fee remittance $ 45.9 $ 13.2 59.1 $ 47.7 $ 15.2 63.0 ESS servicing spread remittance 13.9 — Pledged MSR liability expense $ 73.0 $ 63.0 Six Months Ended June 30, 2023 Six Months Ended June 30, 2022 Rithm and Others MAV Total Rithm and Others MAV Total Servicing fees collected on behalf of Rithm, MAV and others $ 118.8 $ 31.9 $ 150.7 $ 131.9 $ 33.2 $ 165.1 Less: Subservicing fee retained by Ocwen (34.2) (4.4) (38.6) (38.1) (4.4) (42.5) Ancillary fee/income and other settlement (including expense reimbursement) 6.9 (0.2) 6.7 (0.5) 0.6 0.1 Transferred MSR net servicing fee remittance $ 91.5 $ 27.3 118.8 $ 93.2 $ 29.5 122.7 ESS servicing spread remittance 24.5 — Pledged MSR liability expense $ 143.3 $ 122.7 |
Receivables (Tables)
Receivables (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Receivables [Abstract] | |
Schedule of Receivables | June 30, 2023 December 31, 2022 Servicing-related receivables: Government-insured loan claims - Forward $ 50.6 $ 65.0 Government-insured loan claims - Reverse 89.0 73.8 Subservicing fees and reimbursable expenses 13.5 11.7 Due from custodial accounts 11.6 16.3 Receivable from sale of MSRs (holdback) 10.5 1.5 Subservicing fees and reimbursable expenses - Due from Rithm 1.8 3.0 Subservicing fees, reimbursable expenses and other - Due from MAV 1.7 1.0 Other 0.7 3.2 179.4 175.5 Income taxes receivable 27.3 34.4 Other receivables 9.3 5.2 216.0 215.1 Allowance for losses (27.4) (34.3) $ 188.6 $ 180.8 |
Schedule of Changes in Allowance For Losses | Allowance for Losses - Government-Insured Loan Claims Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Beginning balance $ 29.1 $ 40.8 $ 33.8 $ 41.5 Provision 3.9 3.3 8.0 5.5 Charge-offs and other, net (6.0) (4.3) (14.8) (7.2) Ending balance $ 27.0 $ 39.8 $ 27.0 $ 39.8 |
Other Assets (Tables)
Other Assets (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Other Assets [Abstract] | |
Schedule of Other Assets | June 30, 2023 December 31, 2022 Contingent loan repurchase asset $ 247.1 $ 289.9 REO 18.0 9.8 Prepaid expenses 17.4 19.8 Derivatives, at fair value 8.9 7.7 Intangible assets, net (net of accumulated amortization of $8.0 million and $5.0 million) 8.3 14.7 Prepaid lender fees, net 7.0 7.7 Derivative margin deposit 6.8 1.5 Prepaid representation, warranty and indemnification claims - Agency MSR sale 5.0 5.0 Deferred tax asset, net 2.5 2.6 Security deposits 0.8 0.8 Other 5.8 4.7 $ 327.6 $ 364.2 |
Borrowings (Tables)
Borrowings (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Match Funded Liabilities | Advance Match Funded Liabilities Borrowing Capacity Outstanding Balance Borrowing Type Maturity Amort. Date (1) Total Available (2) June 30, 2023 Dec. 31, 2022 Ocwen Master Advance Receivables Trust (OMART) - Advance Receivables Backed Notes - Series 2015-VF5 Aug. 2053 Aug. 2023 $ 450.0 $ 67.8 $ 382.2 $ 422.5 Ocwen GSE Advance Funding (OGAF ) - Advance Receivables Backed Notes, Series 2015-VF1 Aug. 2053 Aug. 2023 90.0 42.7 47.3 90.0 EBO Advance facility (3) May 2026 NA 14.4 13.5 0.9 1.2 $ 554.4 $ 124.0 $ 430.4 $ 513.7 Weighted average interest rate (4) 8.15 % 7.09 % (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. 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 June 30, 2023, 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) We entered into a loan and security agreement to finance the acquisition of advances in connection with the early buyout of certain fixed-rate, fully-amortizing FHA-insured residential mortgage loans. At June 30, 2023, none of the available borrowing capacity of the facility could be used based on the amount of eligible collateral. (4) The weighted average interest rate, excluding the effect of the amortization of prepaid lender fees. At June 30, 2023 and December 31, 2022, the balance of unamortized prepaid lender fees was $0.5 million and $2.3 million, respectively, and are included in Other assets in our consolidated balance sheets. Mortgage Loan Financing Facilities, net Available Borrowing Capacity Outstanding Balance Borrowing Type Collateral Maturity Un-committed Committed (1) June 30, 2023 Dec. 31, 2022 $175 million Master repurchase agreement Loans held for sale (LHFS), Receivables and REO Aug. 2023 $ 125.0 $ 39.3 $ 10.7 $ 142.2 Master repurchase agreement (2) LHFS and Loans Held for Investment (LHFI) N/A — — — 100.3 $50 million Mortgage warehouse agreement (3) LHFS N/A 50.0 — — — $400 million Participation agreement (4) LHFS November 2023 91.9 — 308.1 64.3 $173 million Master repurchase agreement (5) LHFS, LHFI and Receivables August 2023 — 1.3 171.7 26.1 Master repurchase agreement (6) LHFS June 2024 — 1.0 — — $50 million Mortgage warehouse agreement (7) LHFI October 2023 — 36.0 14.0 7.8 $204 million Mortgage warehouse agreement (8) LHFS and LHFI March 2024 137.1 — 66.9 44.2 $230 million Mortgage warehouse agreement (9) LHFS and Receivables (9) 216.0 — 14.0 21.9 Master repurchase agreement (10) LHFS (10) — — 100.4 — $50 million Loan and security agreement (11) LHFS and Receivables March 2024 — 42.5 7.5 7.2 $700 million Master repurchase agreement (12) LHFS and LHFI April 2024 116.6 — 583.4 288.8 $200 million Master repurchase agreement (13) LHFS, April 2024 200.0 — — — OLIT Asset-Backed Notes (14) Reverse LHFS, June 2036 — — 264.9 — Total Mortgage Loan Financing Facilities, net $ 936.5 $ 120.1 $ 1,541.6 $ 702.7 Unamortized discount and debt issuance costs - OLIT Notes $ (26.6) $ — Total Mortgage Loan Financing Facilities, net $ 1,515.0 $ 702.7 Weighted average interest rate (15) 6.03 % 5.74 % (1) Of the borrowing capacity on mortgage loan financing facilities extended on a committed basis, $1.7 million of the available borrowing capacity could be used at June 30, 2023 based on the amount of eligible collateral that could be pledged. (2) On February 9, 2023, we voluntarily allowed the facility to mature. (3) This agreement has no stated maturity dat e. (4) In June 2023, the maturity date of this facility was extended to July 22, 2023 and the uncommitted borrowing capacity was increased to $400.0 million. In July 2023, the maturity date was further extended to November 30, 2023 and the uncommitted borrowing capacity was increased to $650.0 million. (5) In June 2023, the maturity date of this facility was extended to July 22, 2023 and further extended to August 22, 2023 in July 2023. (6) In June 2023, the maturity date of this facility was extended to June 22, 2024. (7) In June 2023, the maturity date of this facility was extended to July 14, 2023. In July 2023, the maturity date was further extended to October 12, 2023 and the committed borrowing capacity was reduced to $40.0 million. (8) In May 2023, the maturity date of this facility was extended to March 31, 2024 and the interest rate margin was revised . (9) The agreement has no stated maturity date, however each transaction has a maximum duration of four years. (10) 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. Each certificate is renewed monthly and the interest rate for this facility is 1 month Term Secured Overnight Financing Rate (SOFR) plus applicable margin. See Note 2 – Securitizations and Variable Interest Entities for additional information. (11) This revolving facility agreement provides committed borrowing capacity secured by eligible HECM loans that are active buyouts, as defined in the agreement. In April 2023, the maturity date of this facility was extended to March 31, 2024. (12) In April 2023, the maturity date of this facility was extended to April 6, 2024. (13) On April 3, 2023, we entered into a master repurchase agreement with a total uncommitted borrowing capacity of $200.0 million to finance the purchase of reverse mortgage loans held for sale, claim receivables from HUD and REOs at an interest rate of 1M Term SOFR plus applicable margin. (14) In June 2023, OLIT issued different classes of Asset-Backed Notes at a discount, with a stated interest rate of 3.0% and a mandatory call date of June 2026. Payments of interest and principal are made from available funds from a pool of reverse mortgage buyout loans and REOs in accordance with the indenture priority of payments. Also see Note 2 – Securitizations and Variable Interest Entities. (15) The weighted average interest rate excludes the effect of the amortization of prepaid lender fees. At June 30, 2023 and December 31, 2022, unamortized prepaid lender fees were $1.5 million and $0.5 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) June 30, 2023 Dec. 31, 2022 $265 million Agency MSR financing facility (2) MSRs June 2024 $ — $ 27.2 $ 237.8 $ 309.8 $200 million Ginnie Mae MSR financing facility (3) MSRs, Advances April 2024 38.2 — 161.8 157.9 Ocwen Excess Spread-Collateralized Notes, Series 2022-PLS1 (4) MSRs Feb. 2025 — — 47.4 56.7 Secured Notes, Ocwen Asset Servicing Income Series Notes, Series 2014-1 (5) MSRs Feb. 2028 — — 30.9 33.4 $400 million Agency MSR financing facility - revolving loan (6) MSRs Dec. 2025 — 12.6 387.4 396.8 Total MSR financing facilities $ 38.2 $ 39.7 865.3 954.6 Unamortized debt issuance costs - PLS Notes (7) (0.6) (0.8) Total MSR financing facilities, net $ 864.8 $ 953.8 Weighted average interest rate (8) 7.88% 7.31% (1) Of the borrowing capacity on MSR financing facilities extended on a committed basis, $18.1 million of the available borrowing capacity could be used at June 30, 2023 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. See Note 2 – Securitizations and Variable Interest Entities for additional information. We are subject to daily margining requirements under the terms of the facility. In June 2023, the maturity date of this facility was extended to June 28, 2024, the committed borrowing capacity was reduced by $185.0 million to $265.0 million, and the interest rate margin was revised. (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. In April 2023, the maturity date of this facility was extended to April 26, 2024. (4) The single class PLS Notes are an amortizing debt instrument with an original principal amount of $75.0 million and a fixed interest rate of 5.114%. The PLS Notes are issued by a trust (PLS Issuer) that is included in our consolidated financial statements, and 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 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 revolving loan secured by a lien on certain of PMC’s Agency MSRs and is subject to daily margining requirements. Any outstanding borrowings on the revolving loan will convert into a term loan in November 2024. (7) At June 30, 2023 and December 31, 2022, unamortized prepaid lender fees related to revolving type MSR financing facilities were $5.0 million and $4.9 million, respectively, and are included in Other assets in our consolidated balance sheets. |
Schedule of Senior Notes | Senior Notes Interest Rate (1) Maturity Outstanding Balance June 30, 2023 December 31, 2022 PMC Senior Secured Notes (2) 7.875% March 2026 $ 375.0 $ 375.0 OFC Senior Secured Notes (due to related parties) (3) 12% paid in cash or 13.25% paid-in-kind (see below) March 2027 285.0 285.0 Principal balance 660.0 660.0 Discount PMC Senior Secured Notes (1.1) (1.3) OFC Senior Secured Notes (43.3) (47.3) (44.4) (48.6) Unamortized debt issuance costs PMC Senior Secured Notes (3.7) (4.3) OFC Senior Secured Notes (6.9) (7.5) (10.6) (11.8) $ 605.0 $ 599.6 (1) Excluding the effect of the amortization of debt issuance costs and discount. (2) Redeemable at 103.938% and 101.969% before March 15, 2024 and March 15, 2025, respectively, at par thereafter. The Indenture contains customary covenants that limit the ability of PHH Corporation (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. |
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 June 30, 2023: Assets Pledged Collateralized Borrowings Unencumbered Assets (1) Cash $ 213.4 $ — $ — $ 213.4 Restricted cash 119.1 119.1 50.8 — Loans held for sale 1,356.5 1,320.9 1,309.0 35.6 Loans held for investment - securitized (2) 7,553.7 7,553.7 7,486.4 — Loans held for investment - unsecuritized 121.0 86.6 79.7 34.5 MSRs (3) 1,643.8 1,654.4 1,094.7 0.3 Advances, net 602.7 552.9 459.6 49.8 Receivables, net 188.6 83.7 87.7 104.9 REO 18.0 13.6 14.5 4.4 Total (4) $ 11,816.8 $ 11,384.8 $ 10,582.3 $ 443.0 (1) Certain assets are pledged as collateral to the PMC Senior Secured Notes and 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 MAV, Rithm and others, 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 security interests, 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 PMC Senior Secured Notes, including PHH and MAV; cash and investment accounts at OFC; and certain other assets, including receivables. June 30, 2023 Specified net servicing advances $ 191.3 Specified deferred servicing fee 4.0 Specified MSR value less borrowings 644.6 Specified unrestricted cash balances 118.5 Specified advance facility reserves 14.6 Specified loan value 83.2 Specified residual value — Total $ 1,056.2 |
Other Liabilities (Tables)
Other Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Other Liabilities | June 30, 2023 December 31, 2022 Contingent loan repurchase liability $ 247.1 $ 289.9 Due to Rithm - Advance collections, servicing fees and other 61.6 64.4 Other accrued expenses 52.6 75.9 Checks held for escheat 50.9 48.1 Liability for indemnification obligations 41.6 43.8 Servicing-related obligations 41.6 40.1 Accrued interest payable 17.6 13.7 Lease liability 14.2 16.6 Derivatives, at fair value 13.2 15.7 Liability for uncertain tax positions 11.5 10.9 Accrued legal fees and settlements 10.2 42.2 Liability for unfunded pension obligation and India gratuity plan 9.2 9.3 Derivative related payables 9.0 6.0 Income taxes payable 6.8 6.2 MSR purchase price holdback 5.6 13.9 Mortgage insurance premium payable 5.3 5.0 Excess servicing fee spread payable 3.8 3.4 Other 4.7 3.4 $ 606.6 $ 708.5 |
Derivative Financial Instrume_2
Derivative Financial Instruments and Hedging Activities (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
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 six months ended June 30, 2023 and 2022. June 30, 2023 December 31, 2022 Maturities Notional Fair value Maturities Notional Fair value Derivative Assets (Other assets) Forward sales of Reverse loans July 2023 $ 30.0 $ 0.1 Jan. 2023 $ 20.0 $ 0.1 Forward loans IRLCs July - Nov. 2023 1,136.7 1.1 N/A — — Reverse loans IRLCs Aug. 2023 16.4 0.3 Jan. 2023 13.8 0.6 TBA forward MBS trades July - Sep. 2023 1,620.0 7.4 Jan. - Mar. 2023 804.0 6.6 Forward sales of Forward loans — — Jan. 2023 100.0 0.4 Total $ 2,803.1 $ 8.9 $ 937.8 $ 7.7 Derivative Liabilities (Other liabilities) Forward loans IRLCs N/A $ — $ — Jan. - Apr. 2023 $ 540.1 $ (1.3) Forward sales of Reverse loans July 2023 20.0 — Jan. 2023 20.0 (0.1) TBA forward MBS trades July - Sep. 2023 381.0 (1.1) Jan. - Feb. 2023 85.0 (0.7) Interest rate swap futures Sep. 2023 1,570.0 (10.9) Jan. 2023 670.0 (13.6) Interest rate option contracts Aug. 2023 620.0 (1.2) N/A — — Other 77.6 (0.1) N/A 56.4 (0.1) Total $ 2,668.6 $ (13.2) $ 1,371.4 $ (15.7) The table below summarizes the net gains and losses of our derivative instruments recognized in our consolidated statement of operations. Three Months Ended June 30, Six Months Ended June 30, Financial Statement Line Gain (loss) 2023 2022 2023 2022 Derivative Instruments Forward loans IRLCs $ (3.2) $ 0.6 $ 2.4 $ (11.5) Gain on loans held for sale, net Reverse loans IRLCs (0.2) (0.8) (0.3) (1.2) Gain on reverse loans held for investment and HMBS-related borrowings, net Reverse loans IRLCs (Equity IQ loans) — 0.3 — 0.3 Gain on loans held for sale, net TBA trades (economically hedging forward pipeline trades and EBO pipeline) 21.2 29.1 4.8 76.2 Gain on loans held for sale, net (Economic hedge) TBA trades (economically hedging reverse pipeline trades) — (0.1) — (0.1) Gain on reverse loans held for investment and HMBS-related borrowings, net Interest rate swap futures, TBA trades and interest rate option contracts (65.2) (16.9) (51.1) (83.7) MSR valuation adjustments, net Forward sales of Reverse loans — 0.6 — 0.2 Gain on reverse loans held for investment and HMBS-related borrowings, net Other — 0.5 0.3 0.9 Other, net Total $ (47.4) $ 13.3 $ (44.0) $ (18.7) |
Interest Expense (Tables)
Interest Expense (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Other Income and Expenses [Abstract] | |
Schedule of Components of Interest Expense | Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 MSR financing facilities $ 17.8 $ 8.6 $ 35.3 $ 16.4 Mortgage loan financing facilities 19.8 6.7 33.4 13.8 OFC Senior Secured Notes (1) 10.9 10.5 21.7 20.9 Advance match funded liabilities 10.4 2.8 21.1 5.5 PMC Senior Secured Notes 7.8 8.1 15.5 16.3 Escrow 1.6 1.2 3.5 2.9 $ 68.3 $ 37.9 $ 130.5 $ 75.7 (1) Notes issued to Oaktree affiliates, inclusive of amortization of debt issuance costs and discount of $2.4 million and $4.7 million during the three and six months ended June 30, 2023, respectively, and $2.0 million and $3.9 million for the three and six months ended June 30, 2022 , respectively. |
Basic and Diluted Earnings pe_2
Basic and Diluted Earnings per Share (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliation of Calculation of Basic Loss per Share to Diluted Loss per Share | Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Basic earnings (loss) per share Net income (loss) $ 15.5 $ 10.4 $ (24.7) $ 68.4 Weighted average shares of common stock 7,652,563 9,257,089 7,593,391 9,236,221 Basic earnings (loss) per share $ 2.02 $ 1.12 $ (3.25) $ 7.41 Diluted earnings (loss) per share Net income (loss) $ 15.5 $ 10.4 $ (24.7) $ 68.4 Weighted average shares of common stock 7,652,563 9,257,089 7,593,391 9,236,221 Effect of dilutive elements Common stock warrants 115,977 — — 139,160 Stock option awards — — — 37 Common stock awards 151,047 109,517 — 138,784 Dilutive weighted average shares of common stock 7,919,587 9,366,606 7,593,391 9,514,202 Diluted earnings (loss) per share $ 1.95 $ 1.11 $ (3.25) $ 7.19 Stock options and common stock awards excluded from the computation of diluted earnings per share Anti-dilutive (1) 84,748 460,512 59,703 279,516 Market-based (2) 61,354 76,534 61,354 76,534 (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) | 6 Months Ended |
Jun. 30, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information | Three Months Ended June 30, 2023 Results of Operations Servicing Originations Corporate Items and Other Corporate Eliminations (1) Business Segments Consolidated Servicing and subservicing fees $ 237.2 $ 0.4 $ — $ — $ 237.6 Gain (loss) on reverse loans held for investment and HMBS-related borrowings, net (4.1) 4.8 — — 0.7 Gain on loans held for sale, net (1) 15.1 10.2 — — 25.3 Other revenue, net 0.3 4.0 4.2 — 8.5 Revenue 248.5 19.3 4.2 — 272.0 MSR valuation adjustments, net (1) (50.5) 1.6 — — (48.9) Operating expenses 79.6 21.1 (16.4) — 84.3 Other income (expense): Interest income 5.9 13.1 1.2 — 20.3 Interest expense (43.3) (14.1) (10.9) — (68.3) Pledged MSR liability expense (73.1) — — — (73.0) Earnings of equity method investee 2.9 — — — 2.9 Other (3.7) (0.2) (0.5) — (4.4) Other expense, net (111.2) (1.2) (10.1) — (122.5) Income (loss) before income taxes $ 7.1 $ (1.3) $ 10.5 $ — $ 16.3 Three Months Ended June 30, 2022 Results of Operations Servicing Originations Corporate Items and Other Corporate Eliminations (1) Business Segments Consolidated Servicing and subservicing fees $ 214.5 $ 0.6 $ — $ — 215.1 Gain (loss) on reverse loans held for investment and HMBS-related borrowings, net (19.0) 16.4 — — (2.6) Gain (loss) on loans held for sale, net (1) (11.5) 12.5 — (0.1) 0.9 Other revenue, net 0.4 6.7 1.6 — 8.7 Revenue 184.4 36.3 1.6 (0.1) 222.2 MSR valuation adjustments, net (1) 19.3 2.6 — 0.1 22.1 Operating expenses 82.5 42.5 19.4 — 144.4 Other income (expense): Interest income 3.0 6.6 0.1 — 9.7 Interest expense (22.3) (5.1) (10.4) — (37.9) Pledged MSR liability expense (63.0) — — — (63.0) Earnings of equity method investee 3.9 — — — 3.9 Other (4.3) 0.3 0.7 — (3.3) Other expense, net (82.6) 1.8 (9.6) — (90.4) Income (loss) before income taxes $ 38.6 $ (1.8) $ (27.3) $ — $ 9.4 Six Months Ended June 30, 2023 Results of Operations Servicing Originations Corporate Items and Other Corporate Eliminations (1) Business Segments Consolidated Servicing and subservicing fees $ 469.0 $ 0.8 $ — $ — $ 469.7 Gain on reverse loans held for investment and HMBS-related borrowings, net 9.9 12.0 — — 21.9 Gain on loans held for sale, net (1) 13.8 14.3 — — 28.1 Other revenue, net 0.8 7.1 6.2 — 14.1 Revenue 493.5 34.1 6.2 — 533.9 MSR valuation adjustments, net (1) (121.4) 3.5 — — (117.9) Operating expenses (2) 159.4 39.8 (0.7) — 198.4 Other (expense) income: Interest income 10.1 22.1 2.2 — 34.4 Interest expense (84.8) (24.0) (21.7) — (130.5) Pledged MSR liability expense (143.4) — 0.1 — (143.3) Earnings of equity method investee 3.1 — — — 3.1 Other (3.4) — 0.2 — (3.2) Other expense, net (218.5) (1.9) (19.1) — (239.5) Income (loss) before income taxes $ (5.8) $ (4.0) $ (12.2) $ — $ (22.0) Six months ended June 30, 2022 Results of Operations Servicing Originations Corporate Items and Other Corporate Eliminations (1) Business Segments Consolidated Servicing and subservicing fees $ 426.7 $ 1.1 $ — $ — $ 427.8 Gain (loss) on reverse loans held for investment and HMBS-related borrowings, net (30.9) 41.4 — — 10.5 Gain (loss) on loans held for sale, net (1) (14.2) 25.3 — (13.4) (2.3) Other revenue, net 0.8 13.5 3.4 — 17.7 Revenue 382.4 81.3 3.4 (13.4) 453.7 MSR valuation adjustments, net (1) 40.4 3.7 — 13.4 57.5 Operating expenses 156.8 88.7 25.9 — 271.4 Other (expense) income: Interest income 7.1 9.6 0.2 — 16.9 Interest expense (45.4) (9.4) (21.0) — (75.7) Pledged MSR liability expense (122.7) — — — (122.7) Earnings of equity method investee 15.9 — — — 15.9 Other (3.6) (1.1) 1.2 — (3.5) Other expense, net (148.7) (0.9) (19.5) — (169.1) Income (loss) before income taxes $ 117.4 $ (4.7) $ (41.9) $ — $ 70.8 (1) Corporate Eliminations includes inter-segment derivatives eliminations of $0.1 million and $13.4 million for the three and six months ended June 30, 2022 , respectively, reported as Gain on loans held for sale, net in Originations with a corresponding offset in MSR valuation adjustments, net in Servicing. No such derivatives eliminations were recognized during the three and six months ended June 30, 2023. Total Assets Servicing Originations Corporate Items and Other Business Segments Consolidated June 30, 2023 $ 11,682.1 $ 1,249.9 $ 284.0 $ 13,216.0 December 31, 2022 $ 11,535.0 $ 570.5 $ 293.7 $ 12,399.2 June 30, 2022 $ 11,053.6 $ 694.1 $ 360.0 $ 12,107.7 Depreciation and Amortization Expense Servicing Originations Corporate Items and Other Business Segments Consolidated Three months ended June 30, 2023 Depreciation expense $ 0.2 $ 0.1 $ 1.3 $ 1.6 Amortization of debt issuance costs and discount 0.5 — 2.7 3.3 Amortization of intangibles 1.5 — — 1.5 Three months ended June 30, 2022 Depreciation expense $ 0.3 $ 0.1 $ 2.2 $ 2.6 Amortization of debt issuance costs and discount 0.2 — 2.3 2.5 Amortization of intangibles 1.5 — — 1.5 Six months ended June 30, 2023 Depreciation expense $ 0.4 $ 0.2 $ 2.9 $ 3.4 Amortization of debt issuance costs and discount 0.7 — 5.5 6.1 Amortization of intangibles 2.9 — — 2.9 Six months ended June 30, 2022 Depreciation expense $ 0.4 $ 0.2 $ 4.5 $ 5.2 Amortization of debt issuance costs and discount 0.4 — 4.7 5.1 Amortization of intangibles 2.1 — — 2.1 |
Commitments (Tables)
Commitments (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Other Commitments [Abstract] | |
Schedule of Activity Related to HMBS Repurchases | The table below provides the breakdown of the portfolio UPB with respect to the percentage of the MCA at June 30, 2023. June 30, 2023 Securitized HECM loans at less than 92% MCA $ 6,998.9 Securitized HECM loans at equal to or greater than 92% and less than 95% MCA 194.1 Securitized HECM loans at equal to or greater than 95% MCA and less than 98% MCA 175.6 Total Securitized HECM loans UPB $ 7,368.7 Six Months Ended June 30, 2023 Active Inactive Total Beginning balance $ 70.7 $ 107.7 $ 178.4 Additions 133.7 47.6 181.3 Recoveries, net (1) (137.9) (26.9) (164.8) Transfers (0.6) 0.6 — Changes in value 0.1 (2.2) (2.2) Ending balance $ 66.0 $ 126.9 $ 192.8 (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) | 6 Months Ended |
Jun. 30, 2023 | |
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: Six Months Ended June 30, 2023 2022 Beginning balance (1) $ 41.6 $ 49.4 Provision for (reversal of) representation and warranty obligations 2.1 (2.2) New production liability 0.6 1.4 Charge-offs and other (2) (6.2) (5.9) Ending balance (1) $ 38.1 $ 42.7 (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) | Jun. 30, 2023 numberOfEmployees employee |
Description of Business and Basis of Presentation [Line Items] | |
Total number of employees | 4,600 |
MAV Canopy HoldCo I, LLC | |
Description of Business and Basis of Presentation [Line Items] | |
Ownership percentage | 15% |
INDIA | |
Description of Business and Basis of Presentation [Line Items] | |
Total number of employees | employee | 3,100 |
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 ($) $ in Millions | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2022 | |
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||||||
Average period to securitization | 30 days | |||||
MSRs retained | $ 31.5 | $ 60.2 | $ 62.6 | $ 106 | ||
Percentage of loan transferred through securitization 60 days or more past due | 2.20% | 2.50% | ||||
Threshold period past due | 60 days | 60 days | 60 days | |||
Mortgages Held-for-sale, Fair Value Disclosure | $ 1,352.9 | $ 683.1 | $ 1,352.9 | $ 683.1 | ||
Mortgage Warehouse Agreement | Variable Interest Entity, Primary Beneficiary | ||||||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||||||
Mortgages Held-for-sale, Fair Value Disclosure | 100.3 | 100.3 | ||||
Warehouse Mortgage Loan Financing Facility | Variable Interest Entity, Primary Beneficiary | ||||||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||||||
Loans held for sale pledged as a collateral | 100 | 100 | ||||
Mortgages Held-for-sale, Fair Value Disclosure | $ 141.1 | $ 141.1 | ||||
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 | 7.10% | 8.30% | ||||
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 Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Transfers and Servicing [Abstract] | ||||
Proceeds received from securitizations | $ 2,298.1 | $ 4,109.6 | $ 4,614.9 | $ 7,697.8 |
Servicing fees collected | 28.2 | 23.9 | 55.2 | 45.6 |
Purchases of previously transferred assets, net of claims reimbursed | (4) | (4.8) | (7.1) | (6.8) |
Cash flows between transferor and transferee proceeds and payment related to transfers accounted for sales | $ 2,322.4 | $ 4,128.7 | $ 4,663 | $ 7,736.6 |
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 Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||
UPB of loans transferred | $ 40,875 | $ 37,571.1 |
Maximum exposure to loss | 41,520.2 | 38,171.2 |
GinnieMae | ||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||
UPB of loans transferred | 8,000 | 6,800 |
Mortgage Servicing Rights - Fair Value | ||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||
Carrying value of assets | 583.2 | 524.3 |
Advances | ||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||
Carrying value of assets | $ 62 | $ 75.9 |
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 Millions | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||||||
Loans Held-for-sale, Fair Value Disclosure | $ 1,352.9 | $ 845.2 | $ 617.8 | $ 683.1 | $ 716 | $ 917.5 |
Securitizations and Variable _7
Securitizations and Variable Interest Entities - Schedule Of Securitization Reverse Mortgage Loans Buyouts And Financing Liabilities (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 |
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | |||
Mortgages Held-for-sale, Fair Value Disclosure | $ 1,352.9 | $ 683.1 | |
Receivables, net | 188.6 | $ 180.8 | |
Debt service accounts | 71.2 | $ 13.6 | |
Mortgage loan financing facilities, net ($238.3 and $— related to VIEs) | 1,515 | 702.7 | |
Variable Interest Entity, Primary Beneficiary | |||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | |||
Receivables, net | 44.2 | 0 | |
Mortgage loan financing facilities, net ($238.3 and $— related to VIEs) | 238.3 | $ 0 | |
Variable Interest Entity, Primary Beneficiary | Warehouse Mortgage Loan Financing Facility | |||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | |||
Mortgages Held-for-sale, Fair Value Disclosure | 141.1 | ||
Receivables, net | 44.2 | ||
Real estate owned | 12.5 | ||
Debt service accounts | 50.8 | ||
Mortgage loan financing facilities, net ($238.3 and $— related to VIEs) | 264.9 | ||
Unamortized discount and debt issuance costs | 26.6 | ||
Prepaid interest (Other assets) | 0.7 | ||
Variable Interest Entity, Primary Beneficiary | Mortgage Warehouse Agreement | |||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | |||
Mortgages Held-for-sale, Fair Value Disclosure | $ 100.3 |
Securitizations and Variable _8
Securitizations and Variable Interest Entities - Schedule Of Carrying Value and Classification of Assets and Liabilities of Advance Financing Facilities (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 |
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | |||
Debt service accounts | $ 71.2 | $ 13.6 | |
Debt Issuance Costs, Net | 7 | $ 7.7 | |
Advance match funded liabilities | 430.4 | 513.7 | |
Variable Interest Entity, Primary Beneficiary | |||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | |||
Advance match funded liabilities | 429.5 | 512.5 | |
Variable Interest Entity, Primary Beneficiary | Advance match funded liabilities | |||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | |||
Match funded advances (Advances, net) | 503.3 | 608.4 | |
Debt service accounts | 14.6 | 15.8 | |
Debt Issuance Costs, Net | 0.5 | 2.3 | |
Prepaid interest (Other assets) | 0.7 | 0.9 | |
Advance match funded liabilities | $ 429.5 | $ 512.5 |
Securitizations and Variable _9
Securitizations and Variable Interest Entities - Schedule Of Carrying Value and Classification of Assets and Liabilities of Agency MSR Financing Facility (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 |
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | |||
Servicing Asset | $ 2,675.7 | $ 2,665.2 | |
Debt Issuance Costs, Net | 7 | $ 7.7 | |
Debt service accounts | $ 71.2 | $ 13.6 |
Securitizations and Variable_10
Securitizations and Variable Interest Entities - Carrying Value and Classification of Assets And Liabilities of PLS Notes Facility (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 |
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | |||
Servicing Asset | $ 2,675.7 | $ 2,665.2 | |
Debt service account (Restricted cash) | 71.2 | $ 13.6 | |
Debt Issuance Costs, Net | 7 | 7.7 | |
Secured Debt | |||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | |||
Unamortized debt issuance costs | 0.6 | 0.8 | |
Variable Interest Entity, Primary Beneficiary | Secured Debt | Agency and PLS Mortgage Servicing Rights Financing Facility | |||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | |||
Servicing Asset | 521.9 | 696.9 | |
Debt service account (Restricted cash) | 1.8 | 1.8 | |
Debt Issuance Costs, Net | 1.3 | 1.1 | |
Short-Term Debt | 285.2 | 366.5 | |
Unamortized debt issuance costs | $ 0.6 | $ 0.8 |
Fair Value - Schedule of Fair V
Fair Value - Schedule of Fair Value Assets and Liabilities (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Loans held for sale | ||||||
Loans held for sale, at fair value | $ 1,352.9 | $ 845.2 | $ 617.8 | $ 683.1 | $ 716 | $ 917.5 |
Total Loans held for sale | 1,352.9 | 683.1 | ||||
Financial liabilities | ||||||
Advance match funded liabilities | 430.4 | 513.7 | ||||
Financing liabilities, at fair value | ||||||
HMBS-related borrowings | 7,486.4 | 7,470.6 | 7,326.8 | 7,155.3 | 7,118.8 | 6,885 |
Other financing liabilities, at fair value | 1,274 | 1,137.4 | ||||
Other secured borrowings: | ||||||
Mortgage loan financing facilities, net ($238.3 and $— related to VIEs) | 1,515 | 702.7 | ||||
MSR financing facilities | 864.8 | 953.8 | ||||
Senior notes: | ||||||
Total Senior notes | 605 | 599.6 | ||||
Derivative financial instrument assets (liabilities), net | ||||||
Derivative liabilities | 13.2 | 15.7 | ||||
Mortgage servicing rights | ||||||
MSRs | 2,675.7 | 2,580.6 | 2,665.2 | 2,485.7 | 2,323.3 | 2,250.1 |
Carrying Value | ||||||
Loans held for sale | ||||||
Total Loans held for sale | 1,356.6 | 622.7 | ||||
Loans held for investment, at fair value | 7,680.7 | 7,510.8 | ||||
Financing liabilities, at fair value | ||||||
Other financing liabilities, at fair value | 1,274 | 1,137.4 | ||||
Senior notes: | ||||||
Total Senior notes | 605 | 599.6 | ||||
Fair Value | ||||||
Loans held for sale | ||||||
Total Loans held for sale | 1,356.6 | 622.7 | ||||
Loans held for investment, at fair value | 7,680.7 | 7,510.8 | ||||
Financing liabilities, at fair value | ||||||
Other financing liabilities, at fair value | 1,274 | 1,137.4 | ||||
Senior notes: | ||||||
Total Senior notes | 561.6 | 555.2 | ||||
ESS Financing Liability | ||||||
Financing liabilities, at fair value | ||||||
Other financing liabilities, at fair value | 258.5 | 199 | ||||
Level 3 | Carrying Value | ||||||
Loans held for sale | ||||||
Loans held for sale, at fair value | 1,352.9 | 617.8 | ||||
Loans held for sale, at lower of cost or fair value | 3.7 | 4.9 | ||||
Loans held for investment, at fair value | 7,674.8 | 7,504.1 | ||||
Advances, net | 602.7 | 718.9 | ||||
Receivables, net | 188.6 | 180.8 | ||||
Financial liabilities | ||||||
Advance match funded liabilities | 430.4 | 513.7 | ||||
Financing liabilities, at fair value | ||||||
HMBS-related borrowings | 7,486.4 | 7,326.8 | ||||
Other secured borrowings: | ||||||
Mortgage loan financing facilities, net ($238.3 and $— related to VIEs) | 1,515 | 702.7 | ||||
MSR financing facilities | 864.8 | 953.8 | ||||
Mortgage servicing rights | ||||||
MSRs | 2,675.7 | 2,665.2 | ||||
Level 3 | Carrying Value | Second Lien | ||||||
Senior notes: | ||||||
Senior secured notes | 234.9 | 230.2 | ||||
Level 3 | Fair Value | ||||||
Loans held for sale | ||||||
Loans held for sale, at fair value | 1,352.9 | 617.8 | ||||
Loans held for sale, at lower of cost or fair value | 3.7 | 4.9 | ||||
Loans held for investment, at fair value | 7,674.8 | 7,504.1 | ||||
Advances, net | 602.7 | 718.9 | ||||
Receivables, net | 188.6 | 180.8 | ||||
Financial liabilities | ||||||
Advance match funded liabilities | 430.4 | 513.7 | ||||
Financing liabilities, at fair value | ||||||
HMBS-related borrowings | 7,486.4 | 7,326.8 | ||||
Other secured borrowings: | ||||||
Mortgage loan financing facilities, net ($238.3 and $— related to VIEs) | 1,515 | 702.7 | ||||
MSR financing facilities | 845.3 | 932.1 | ||||
Mortgage servicing rights | ||||||
MSRs | 2,675.7 | 2,665.2 | ||||
Level 3 | Fair Value | Second Lien | ||||||
Senior notes: | ||||||
Senior secured notes | 226.5 | 223.9 | ||||
Level 3 | Interest Rate Contract | Carrying Value | ||||||
Derivative financial instrument assets (liabilities), net | ||||||
Interest rate lock commitments | 1.4 | (0.7) | ||||
Level 3 | Interest Rate Contract | Fair Value | ||||||
Derivative financial instrument assets (liabilities), net | ||||||
Interest rate lock commitments | 1.4 | (0.7) | ||||
Level 3 | Other | Carrying Value | ||||||
Derivative financial instrument assets (liabilities), net | ||||||
Other (a) | (0.1) | (0.1) | ||||
Level 3 | Other | Fair Value | ||||||
Derivative financial instrument assets (liabilities), net | ||||||
Other (a) | (0.1) | (0.1) | ||||
Level 3 | ESS Financing Liability | Carrying Value | ||||||
Financing liabilities, at fair value | ||||||
Other financing liabilities, at fair value | 1,009.5 | 931.7 | ||||
Level 3 | ESS Financing Liability | Fair Value | ||||||
Financing liabilities, at fair value | ||||||
Other financing liabilities, at fair value | 1,009.5 | 931.7 | ||||
Level 3 | ESS Financing Liability | ||||||
Mortgage servicing rights | ||||||
Loans related to Ginnie Mae guaranteed securitizations | (258.5) | |||||
Level 3 | ESS Financing Liability | Carrying Value | ||||||
Financing liabilities, at fair value | ||||||
Other financing liabilities, at fair value | 258.5 | 199 | ||||
Level 3 | ESS Financing Liability | Fair Value | ||||||
Financing liabilities, at fair value | ||||||
Other financing liabilities, at fair value | 258.5 | 199 | ||||
Level 3 | Financing Liability - Owed to Securitization Investors | ||||||
Mortgage servicing rights | ||||||
Loans related to Ginnie Mae guaranteed securitizations | (6) | (6.2) | (6.7) | (7.3) | (7.7) | (7.9) |
Level 3 | Financing Liability - Owed to Securitization Investors | Carrying Value | ||||||
Financing liabilities, at fair value | ||||||
Other financing liabilities, at fair value | 6 | 6.7 | ||||
Level 3 | Financing Liability - Owed to Securitization Investors | Fair Value | ||||||
Financing liabilities, at fair value | ||||||
Other financing liabilities, at fair value | 6 | 6.7 | ||||
Level 3 | Loans Held for Sale - Fair Value | ||||||
Mortgage servicing rights | ||||||
Loans related to Ginnie Mae guaranteed securitizations | 197.4 | $ 23.3 | 32.1 | $ 41.4 | $ 230.4 | $ 220.9 |
Level 3 | Loans Held for Sale - Fair Value | Ginnie Mae Loans | ||||||
Mortgage servicing rights | ||||||
Loans related to Ginnie Mae guaranteed securitizations | 197.4 | |||||
Level 3 | Loans Held for Investment Securitization Trusts | Carrying Value | ||||||
Loans held for sale | ||||||
Loans held for investment, at fair value | 6 | 6.7 | ||||
Level 3 | Loans Held for Investment Securitization Trusts | Fair Value | ||||||
Loans held for sale | ||||||
Loans held for investment, at fair value | 6 | 6.7 | ||||
Level 2 | Carrying Value | ||||||
Loans held for sale | ||||||
Loans held for sale, at fair value | 1,352.9 | 617.8 | ||||
Senior notes: | ||||||
Senior secured notes | 370.1 | 369.4 | ||||
Level 2 | Fair Value | ||||||
Loans held for sale | ||||||
Loans held for sale, at fair value | 1,352.9 | 617.8 | ||||
Senior notes: | ||||||
Senior secured notes | 335.1 | 331.4 | ||||
Level 2 | Forward LHFS Trades | Carrying Value | ||||||
Derivative financial instrument assets (liabilities), net | ||||||
Derivative asset | 0 | 0.5 | ||||
Level 2 | Forward LHFS Trades | Fair Value | ||||||
Derivative financial instrument assets (liabilities), net | ||||||
Derivative asset | 0 | 0.5 | ||||
Level 2 | Option Contracts | Carrying Value | ||||||
Derivative financial instrument assets (liabilities), net | ||||||
Derivative liabilities | (1.2) | 0 | ||||
Level 2 | Option Contracts | Fair Value | ||||||
Derivative financial instrument assets (liabilities), net | ||||||
Derivative liabilities | (1.2) | 0 | ||||
Level 1 | TBA forward MBS trades | Carrying Value | ||||||
Derivative financial instrument assets (liabilities), net | ||||||
Derivative liabilities | 0.7 | 0.7 | ||||
Level 1 | TBA forward MBS trades | Fair Value | ||||||
Derivative financial instrument assets (liabilities), net | ||||||
Derivative liabilities | 0.7 | 0.7 | ||||
Level 1 | Interest Rate Swap | Carrying Value | ||||||
Derivative financial instrument assets (liabilities), net | ||||||
Derivative asset | (10.9) | (13.6) | ||||
Level 1 | Interest Rate Swap | Fair Value | ||||||
Derivative financial instrument assets (liabilities), net | ||||||
Derivative asset | (10.9) | (13.6) | ||||
Level 1 | TBA Forward Pipelines Trades | Carrying Value | ||||||
Derivative financial instrument assets (liabilities), net | ||||||
Derivative asset | 7 | 6.6 | ||||
Level 1 | TBA Forward Pipelines Trades | Fair Value | ||||||
Derivative financial instrument assets (liabilities), net | ||||||
Derivative asset | $ 7 | $ 6.6 |
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 | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Purchases, issuances, sales and settlements | ||||
Capitalization of advances on Ginnie Mae modifications | $ 1,700 | $ 5,800 | $ 3,700 | $ 13,100 |
Total realized and unrealized gains and (losses): | ||||
Gains (losses) on derivatives | (47,400) | 13,300 | (44,000) | (18,700) |
Forward loans IRLCs | ||||
Total realized and unrealized gains and (losses): | ||||
Gains (losses) on derivatives | (3,400) | 100 | 2,100 | (12,300) |
Level 3 | ESS Financing Liability | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning balance | (263,100) | (199,000) | ||
Purchases, issuances, sales and settlements | ||||
Purchases and other | 0 | |||
Sales | 0 | |||
Total realized and unrealized gains and (losses): | ||||
Fair Value Measurement With Unobservable Inputs Reconciliation Asset Transfers Out of Level3 To Receivables | 0 | |||
Fair Value Measurement With Unobservable Inputs Reconciliation Asset Transfers Out of Level3 To Loans Held For Sale At Fair Value | 0 | |||
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 | 6,200 | 7,700 | 6,700 | 7,900 |
Purchases, issuances, sales and settlements | ||||
Settlements (2) | (200) | (400) | (700) | (600) |
Purchases, issuances, sales and settlements, total | (200) | (400) | (700) | (600) |
Total realized and unrealized gains and (losses): | ||||
Ending balance | 6,000 | 7,300 | 6,000 | 7,300 |
Calls and other | 0 | |||
Fair Value Measurement With Unobservable Inputs Reconciliation, Recurring Basis, Asset, Gain (Loss) Included In Earnings and Other Comprehensive Income (Loss) | 0 | 0 | ||
Level 3 | Financing Liability - Owed to Securitization Investors | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning balance | (6,200) | (7,700) | (6,700) | (7,900) |
Purchases, issuances, sales and settlements | ||||
Settlements (2) | 200 | 400 | 700 | 600 |
Purchases, issuances, sales and settlements, total | 200 | 400 | 700 | 600 |
Total realized and unrealized gains and (losses): | ||||
Ending balance | (6,000) | (7,300) | (6,000) | (7,300) |
Calls and other | 0 | |||
Fair Value Measurement With Unobservable Inputs Reconciliation, Recurring Basis, Asset, Gain (Loss) Included In Earnings and Other Comprehensive Income (Loss) | 0 | 0 | ||
Level 3 | Loans Held for Sale - Fair Value | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning balance | 23,300 | 230,400 | 32,100 | 220,900 |
Purchases, issuances, sales and settlements | ||||
Purchases and other | 240,400 | 57,500 | 252,800 | 118,200 |
Sales | (38,500) | (243,800) | (58,700) | (291,600) |
Settlements (2) | (25,800) | (25,800) | ||
Loans held for investment, at fair value | 1,500 | 1,500 | ||
Receivables, net | (15,600) | (1,700) | (16,100) | (1,800) |
Capitalization of advances on Ginnie Mae modifications | (1,700) | (1,700) | ||
Other | 2,800 | 2,800 | ||
Purchases, issuances, sales and settlements, total | 159,500 | (187,900) | 151,300 | (175,100) |
Total realized and unrealized gains and (losses): | ||||
Change in fair value included in earnings | 11,700 | (1,200) | 11,200 | (4,400) |
Ending balance | 197,400 | 41,400 | 197,400 | 41,400 |
REO (Other assets) | (7,100) | (7,100) | ||
Calls and other | 2,900 | 2,900 | ||
Fair Value Measurement With Unobservable Inputs Reconciliation, Recurring Basis, Asset, Gain (Loss) Included In Earnings and Other Comprehensive Income (Loss) | 14,600 | 14,000 | ||
Level 3 | ESS Financing Liability | ||||
Purchases, issuances, sales and settlements | ||||
Issuances | 0 | (68,700) | ||
Settlements (2) | 8,100 | 14,900 | ||
Purchases, issuances, sales and settlements, total | 8,200 | (53,800) | ||
Total realized and unrealized gains and (losses): | ||||
Change in fair value included in earnings | (3,600) | (5,600) | ||
Ending balance | (258,500) | (258,500) | ||
Fair Value Measurement With Unobservable Inputs Reconciliation, Recurring Basis, Asset, Gain (Loss) Included In Earnings and Other Comprehensive Income (Loss) | (3,600) | (5,600) | ||
Level 3 | IRLCs | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning balance | 4,800 | 5,700 | (700) | 18,100 |
Purchases, issuances, sales and settlements | ||||
Issuances | 4,400 | 82,200 | 10,100 | 161,900 |
Loans held for sale, at fair value | (10,800) | 3,600 | (31,200) | (53,900) |
Purchases, issuances, sales and settlements, total | (6,500) | 85,900 | (21,000) | 108,000 |
Total realized and unrealized gains and (losses): | ||||
Change in fair value included in earnings | 3,000 | (85,800) | 23,100 | (120,300) |
Ending balance | 1,400 | $ 5,700 | 1,400 | $ 5,700 |
REO (Other assets) | 0 | |||
Calls and other | 0 | |||
Fair Value Measurement With Unobservable Inputs Reconciliation, Recurring Basis, Asset, Gain (Loss) Included In Earnings and Other Comprehensive Income (Loss) | $ 3,000 | $ 23,100 |
Fair Value - Schedule of Signif
Fair Value - Schedule of Significant Assumptions used in Valuation (Details) | Jun. 30, 2023 year USD ($) | Dec. 31, 2022 year USD ($) |
Discount rate | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 0.094 | 0.076 |
Loans Held for Investment Reverse Mortgages | Life in years | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 5.2 | 5 |
Loans Held for Investment Reverse Mortgages | Weighted average prepayment speed | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 0.173 | 0.180 |
Loans Held for Investment Reverse Mortgages | Discount rate | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 0.052 | 0.051 |
Loans Held for Investment Reverse Mortgages | Minimum | Life in years | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 0.9 | 1 |
Loans Held for Investment Reverse Mortgages | Minimum | Weighted average prepayment speed | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 0.119 | 0.132 |
Loans Held for Investment Reverse Mortgages | Maximum | Life in years | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 7.8 | 7.6 |
Loans Held for Investment Reverse Mortgages | Maximum | Weighted average prepayment speed | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 0.406 | 0.450 |
Fair Value Agency Mortgage Servicing Rights | Weighted average prepayment speed | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 0.071 | 0.069 |
Fair Value Agency Mortgage Servicing Rights | Weighted average lifetime delinquency rate | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 0.011 | 0.014 |
Fair Value Agency Mortgage Servicing Rights | Discount rate | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 0.096 | 0.096 |
Fair Value Agency Mortgage Servicing Rights | Weighted average cost to service (in dollars) | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | $ | 71 | 72 |
Fair Value Non-Agency Mortgage Servicing Rights | Weighted average prepayment speed | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 0.079 | 0.079 |
Fair Value Non-Agency Mortgage Servicing Rights | Weighted average lifetime delinquency rate | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 0.103 | 0.101 |
Fair Value Non-Agency Mortgage Servicing Rights | Discount rate | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 0.106 | 0.106 |
Fair Value Non-Agency Mortgage Servicing Rights | Weighted average cost to service (in dollars) | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | $ | 202 | 201 |
HMBS-Related Borrowings | Life in years | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 5.2 | 5 |
HMBS-Related Borrowings | Weighted average prepayment speed | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 0.173 | 0.180 |
HMBS-Related Borrowings | Discount rate | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 0.052 | 0.050 |
HMBS-Related Borrowings | Minimum | Life in years | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 0.9 | 1 |
HMBS-Related Borrowings | Minimum | Weighted average prepayment speed | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 0.119 | 0.132 |
HMBS-Related Borrowings | Maximum | Life in years | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 7.8 | 7.6 |
HMBS-Related Borrowings | Maximum | Weighted average prepayment speed | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 0.406 | 0.450 |
Mortgage Servicing Rights Pledged | Life in years | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 4.5 | 5.6 |
Mortgage Servicing Rights Pledged | Weighted average prepayment speed | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 0.072 | 0.076 |
Mortgage Servicing Rights Pledged | Weighted average lifetime delinquency rate | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 0.067 | 0.071 |
Mortgage Servicing Rights Pledged | Discount rate | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | 0.102 | 0.102 |
Mortgage Servicing Rights Pledged | Weighted average cost to service (in dollars) | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Measurement input | $ | 166 | 174 |
Fair Value - Schedule of Estima
Fair Value - Schedule of Estimated Change in Fair Value of MSRs (Details) $ in Millions | Jun. 30, 2023 USD ($) |
Fair Value Disclosures [Abstract] | |
Weighted average prepayment speeds, 10% | $ (63) |
Weighted average prepayment speeds, 20% | (123.4) |
Weighted average discount rate, 10% | (72.5) |
Weighted average discount rate, 20% | $ (139.3) |
Sensitivity Analysis of Fair Value, Transferor's Interests in Transferred Financial Assets, Impact of 10 Percent Adverse Change in Prepayment Speed, Percent | 0.008 |
ensitivity Analysis of Fair Value, Transferor's Interests in Transferred Financial Assets, Impact of 20 Percent Adverse Change in Prepayment Speed, Percent | 0.016 |
Sensitivity Analysis of Fair Value, Transferor's Interests in Transferred Financial Assets, Impact of 10 Percent Adverse Change in Discount Rate, Percent | 0.010 |
Sensitivity Analysis of Fair Value, Transferor's Interests in Transferred Financial Assets, Impact of 20 Percent Adverse Change in Discount Rate, Percent | 0.019 |
Fair Value - Narrative (Details
Fair Value - Narrative (Details) | Jun. 30, 2023 | Dec. 31, 2022 |
Discount rate | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement input | 0.094 | 0.076 |
Loans Held for Sale - Schedule
Loans Held for Sale - Schedule of Loans Held for Sale Fair Value (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Movement In Loans Held For Sale At Fair Value [Roll Forward] | ||||
Beginning balance | $ 845.2 | $ 716 | $ 617.8 | $ 917.5 |
Originations and purchases | 2,859.9 | 4,682 | 5,412.3 | 8,154.6 |
Proceeds from sales | (2,279.6) | (4,603.4) | (4,575.8) | (8,174.2) |
Principal collections | (31.6) | (65.8) | (47) | (95.2) |
Loans held for investment, at fair value | 1.5 | 16.5 | 3.1 | 19.6 |
Receivables, net | (15.6) | 32.9 | (14.5) | 32.2 |
REO (Other assets) | (7.1) | 0 | (11.2) | 0 |
Realized loss on sale of loans (1) | (28.4) | (114.3) | (50.4) | (186.6) |
Capitalization of advances on Ginnie Mae modifications | 1.7 | 5.8 | 3.7 | 13.1 |
Fair value gain (loss) on loans held for sale | 4 | 10.8 | 10.2 | (1.4) |
Other | 2.8 | 2.5 | 4.5 | 3.6 |
Ending balance | 1,352.9 | 683.1 | 1,352.9 | 683.1 |
Principal amount outstanding on loans held for sale | 1,341 | 685.1 | 1,341 | 685.1 |
Premium (discount) balance on loans held for sale | 15 | 3.8 | 15 | 3.8 |
Fair value adjustment to loans held for sale | (3.1) | (5.7) | (3.1) | (5.7) |
Mortgages Held-for-sale, Fair Value Disclosure | 1,352.9 | 683.1 | 1,352.9 | 683.1 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loans Held-for-sale, Fair Value Disclosure | 1,352.9 | $ 683.1 | 1,352.9 | $ 683.1 |
GSE loans | ||||
Movement In Loans Held For Sale At Fair Value [Roll Forward] | ||||
Beginning balance | 318.3 | |||
Ending balance | 790 | 790 | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loans Held-for-sale, Fair Value Disclosure | 790 | 790 | ||
Government- Forward loans | ||||
Movement In Loans Held For Sale At Fair Value [Roll Forward] | ||||
Beginning balance | 150.2 | |||
Ending balance | 365.5 | 365.5 | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loans Held-for-sale, Fair Value Disclosure | 365.5 | 365.5 | ||
Repurchased Ginnie Mae Loans | ||||
Movement In Loans Held For Sale At Fair Value [Roll Forward] | ||||
Beginning balance | 32.1 | |||
Ending balance | 20 | 20 | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loans Held-for-sale, Fair Value Disclosure | 20 | 20 | ||
Reverse Loans | ||||
Movement In Loans Held For Sale At Fair Value [Roll Forward] | ||||
Beginning balance | 102.5 | |||
Ending balance | 159.4 | 159.4 | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loans Held-for-sale, Fair Value Disclosure | 159.4 | 159.4 | ||
Other residential mortgage loans | ||||
Movement In Loans Held For Sale At Fair Value [Roll Forward] | ||||
Beginning balance | 14.8 | |||
Ending balance | 18 | 18 | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loans Held-for-sale, Fair Value Disclosure | $ 18 | $ 18 |
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 Millions | Jun. 30, 2023 | Jun. 30, 2022 |
Receivables [Abstract] | ||
Loans Held For Sale At Lower Of Cost Or Fair Value | $ 7.4 | $ 8.1 |
Allowance for financing notes | (3.7) | (3.8) |
Ending balance, net | $ 3.7 | $ 4.3 |
Loans Held for Sale - Schedul_3
Loans Held for Sale - Schedule of Gains on Loans Held for Sale, Net (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
MSRs retained on transfers of forward mortgage loans | $ 31.5 | $ 60.2 | $ 62.6 | $ 106 |
Gain (loss) on sales of loans, net | 3.3 | (40.4) | 12.4 | (66.3) |
Change in fair value of IRLCs | (3.2) | 0.9 | 2.4 | (11.2) |
Change in fair value of loans held for sale | 4.3 | 12 | 9.1 | 0.4 |
Gain (loss) on economic hedge instruments | 21.2 | 29.1 | 4.8 | 76.2 |
Other | (0.3) | (0.7) | (0.6) | (1.4) |
Gain (loss) on loans held for sale, net | 25.3 | 0.9 | 28.1 | (2.3) |
MSR valuation adjustments, net | (48.9) | 22.1 | (117.9) | 57.5 |
Change in fair value of loans held for sale, revaluation gain (loss) | 10.9 | |||
Intersegment Eliminations | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Gain (loss) on loans held for sale, net | 0 | (0.1) | 0 | (13.4) |
MSR valuation adjustments, net | 0 | 0.1 | 0 | 13.4 |
Gain (loss) on Sale of Forward Mortgage Loans | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Gain (loss) on sales of loans, net | (28.1) | (90.3) | (50.2) | (162.6) |
Repurchased Ginnie Mae Loans | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Gain (loss) on sales of loans, net | $ (0.1) | (10.3) | $ 0.1 | (9.7) |
Financing receivable, amount purchased on delinquent and aged loans | (8.8) | |||
Impaired financing receivable, unpaid principal balance | $ 299.7 | $ 299.7 |
Reverse Mortgages - Schedule of
Reverse Mortgages - Schedule of Loans Held For Investment and HMBS Related Borrowings (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Loans Held for Investment - Reverse Mortgages | ||||
Beginning balance | $ 7,662.9 | $ 7,451.6 | $ 7,504.1 | $ 7,199.8 |
Originations | 272.2 | 524.6 | 507.4 | 1,144.9 |
Acquisition | 0 | 211.3 | ||
Repayments (principal payments received) | (291.8) | (476.3) | (527.3) | (995.1) |
Loans held for sale, at fair value | (1.5) | (16.5) | (3.1) | (19.6) |
Receivables, net | (1) | (36.9) | (2) | (49.4) |
REO (Other assets) | (0.1) | (0.1) | ||
Change in fair value | 34.1 | (69.9) | 195.7 | (115.1) |
Securitized loans (pledged to HMBS-related borrowings) | 7,553.7 | 7,220.8 | 7,553.7 | 7,220.8 |
Unsecuritized loans | 121 | 155.8 | 121 | 155.8 |
Ending balance | 7,674.8 | 7,376.5 | 7,674.8 | 7,376.5 |
HMBS Related Borrowings | ||||
Beginning balance | (7,470.6) | (7,118.8) | (7,326.8) | (6,885) |
Securitization of HECM loans accounted for as a financing (including realized fair value changes) | (271.1) | (566) | (502.3) | (1,149.9) |
Additional proceeds from securitization of HECM loans and tails | 0.1 | (10.1) | (6.1) | (22.3) |
Acquisition | 0 | (209.1) | ||
Repayments (principal payments received) | 289.8 | 476.1 | 525.1 | 993.5 |
Change in fair value | (34.5) | 63.6 | (176.2) | 117.5 |
Ending balance | (7,486.4) | (7,155.3) | (7,486.4) | (7,155.3) |
Securitized loans (pledged to HMBS-related borrowings) | $ (7,486.4) | $ (7,155.3) | $ (7,486.4) | $ (7,155.3) |
Reverse Mortgages - Schedule _2
Reverse Mortgages - Schedule of Reverse Mortgage Revenue, Net (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Receivables [Abstract] | ||||
Gain on new originations | $ 3.6 | $ 12.7 | $ 9.6 | $ 33.3 |
Other change in fair value of securitized loans held for investment and HMBS-related borrowings, net | (12.4) | (27.3) | (7.9) | (48.3) |
Change in fair value included in earnings, net | (0.5) | (6.4) | 19.5 | 2.5 |
Loan fees and other | 1.2 | 3.7 | 2.4 | 8 |
Gain (loss) on reverse loans held for investment and HMBS-related borrowings, net | 0.7 | (2.6) | 21.9 | 10.5 |
Gain on tail securitization | 2.5 | 2.8 | 6.1 | 6.7 |
Net interest income (servicing fee) | $ 5.8 | $ 5.4 | $ 11.7 | $ 10.7 |
Advances - Schedule of Advances
Advances - Schedule of Advances Paid on Behalf of Borrowers or on Foreclosed Properties (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Advances On Behalf of Borrowers [Line Items] | ||||||
Advances, gross | $ 610 | $ 725.1 | ||||
Allowance for losses | (7.4) | $ (6.2) | (6.2) | $ (6.6) | $ (6.9) | $ (7) |
Advances, net | 602.7 | 718.9 | ||||
Principal and interest | ||||||
Advances On Behalf of Borrowers [Line Items] | ||||||
Advances, gross | 202.6 | 215.5 | ||||
Taxes and insurance | ||||||
Advances On Behalf of Borrowers [Line Items] | ||||||
Advances, gross | 271.4 | 367.5 | ||||
Foreclosures, bankruptcy, REO and other | ||||||
Advances On Behalf of Borrowers [Line Items] | ||||||
Advances, gross | $ 136 | $ 142.1 |
Advances - Schedule of Activity
Advances - Schedule of Activity in Advances (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Advances [Roll Forward] | ||||
Beginning balance - before Allowance for Losses | $ 663.1 | $ 736.9 | $ 725.1 | $ 779.5 |
New advances | 146.5 | 190 | 335.3 | 387.3 |
Sales of advances | (0.6) | (0.2) | (4.9) | (0.8) |
Collections of advances and other | (201.1) | (272.9) | (456.6) | (512.1) |
Ending balance - before Allowance for Losses | 610 | 653.8 | 610 | 653.8 |
Beginning balance - Allowance for Losses | (6.2) | (6.9) | (6.2) | (7) |
Provision expense | (2.8) | (2.1) | (4.6) | (3.9) |
Net charge-offs and other | 1.6 | 2.4 | 3.4 | 4.3 |
Ending balance - Allowance for Losses | (7.4) | (6.6) | (7.4) | (6.6) |
Ending balance, net | 602.7 | 647.2 | 602.7 | 647.2 |
Advances Payments On Behalf Of Borrower Transfers To Other Assets | $ 2.2 | $ 0 | $ 11.1 | $ 0 |
Mortgage Servicing - Schedule o
Mortgage Servicing - Schedule of Activity Related to MSRs - Fair Value Measurement Method (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Servicing Asset at Fair Value, Amount [Roll Forward] | ||||
Beginning balance | $ 2,580.6 | $ 2,323.3 | $ 2,665.2 | $ 2,250.1 |
Sales | 0 | 0 | 0 | (149.4) |
Recognized on the sale of residential mortgage loans | 31.5 | 60.2 | 62.6 | 106 |
Purchases | 19.1 | 36.9 | 44 | 83.7 |
Servicing transfers and adjustments | (32.5) | 14.7 | (32.5) | 13.9 |
Changes in fair value recognized in earnings: | ||||
Changes in valuation inputs or assumptions | 136.8 | 118.3 | 53.2 | 321.8 |
MSR realization of expected cash flows | (59.6) | (67.6) | (116.6) | (140.4) |
Total MSR fair value gains (losses) | 77.2 | 50.7 | (63.3) | 181.4 |
Realization of expected cash flows | (59.7) | (67.6) | (116.8) | (140.4) |
Ending balance | 2,675.7 | 2,485.7 | 2,675.7 | 2,485.7 |
Servicing Asset at Fair Value, Period Increase (Decrease) | 77.1 | 50.7 | (63.6) | 181.4 |
Servicing assets at fair value, net additions (sales) recognized | 18.1 | 111.7 | 74.1 | 54.2 |
Derivative, Gain (Loss) on Derivative, Net | 47.4 | (13.3) | 44 | 18.7 |
MSR valuation adjustments, net | 48.9 | (22.1) | 117.9 | (57.5) |
Total MSR Reserve Fair Value Gains (Losses) | 0.1 | 0 | 0.3 | 0 |
UPB of MSRs sold | 31.3 | 11,100 | ||
ESS Financing Liability | ||||
Changes in fair value recognized in earnings: | ||||
Servicing Liability at Fair Value, Changes in Fair Value Resulting from Changes in Valuation Inputs or Changes in Assumptions | (3.6) | 0 | (5.6) | 0 |
Realization of expected cash flows | (8.1) | 0 | (14.9) | 0 |
Total Fair value changes in Servicing liability at fair value | 4.6 | 0 | 9.3 | 0 |
ESS Financing Liability | ||||
Changes in fair value recognized in earnings: | ||||
Servicing Liability at Fair Value, Changes in Fair Value Resulting from Changes in Valuation Inputs or Changes in Assumptions | (81) | (40.4) | (42.8) | (97.2) |
Realization of expected cash flows | 15.6 | 28.8 | 30.1 | 57 |
Total Fair value changes in Servicing liability at fair value | (65.4) | (11.7) | (12.7) | (40.2) |
Derivative, Gain (Loss) on Derivative, Net | (65.2) | (16.9) | (51.1) | (83.7) |
MSR Asset Vehicle LLC | ESS Financing Liability | ||||
Changes in fair value recognized in earnings: | ||||
Realization of expected cash flows | 8.4 | 9.5 | 17 | 17.9 |
Fair Value Agency Mortgage Servicing Rights | ||||
Servicing Asset at Fair Value, Amount [Roll Forward] | ||||
Beginning balance | 1,896.4 | 1,664.9 | 1,931.8 | 1,571.8 |
Sales | 0 | 0 | 0 | (149.3) |
Recognized on the sale of residential mortgage loans | 31.5 | 60.2 | 62.6 | 106 |
Purchases | 19.1 | 36.9 | 44 | 83.7 |
Servicing transfers and adjustments | (32.5) | 11.8 | (32.5) | 14.7 |
Changes in fair value recognized in earnings: | ||||
Changes in valuation inputs or assumptions | 103.5 | 86 | 61.4 | 280.4 |
Realization of expected cash flows | (50.6) | (43) | (99.9) | (90.7) |
Ending balance | 1,967.4 | 1,816.6 | 1,967.4 | 1,816.6 |
Servicing Asset at Fair Value, Period Increase (Decrease) | 52.9 | 43 | (38.5) | 189.7 |
Servicing assets at fair value, net additions (sales) recognized | 18.1 | 108.8 | 74.1 | 55.1 |
Servicing asset at fair value, amount, derecognition | (32.5) | (32.5) | ||
UPB of MSRs sold | 2,300 | |||
Fair Value Non-Agency Mortgage Servicing Rights | ||||
Servicing Asset at Fair Value, Amount [Roll Forward] | ||||
Beginning balance | 684.2 | 658.4 | 733.5 | 678.3 |
Sales | 0 | 0 | 0 | 0 |
Recognized on the sale of residential mortgage loans | 0 | 0 | 0 | 0 |
Purchases | 0 | 0 | 0 | 0 |
Servicing transfers and adjustments | 0 | 2.9 | 0 | (0.8) |
Changes in fair value recognized in earnings: | ||||
Changes in valuation inputs or assumptions | 33.3 | 32.3 | (8.2) | 41.3 |
Realization of expected cash flows | (9.1) | (24.6) | (16.9) | (49.7) |
Ending balance | 708.4 | 669.1 | 708.4 | 669.1 |
Servicing Asset at Fair Value, Period Increase (Decrease) | 24.2 | 7.7 | (25.1) | (8.4) |
Servicing assets at fair value, net additions (sales) recognized | $ 0 | $ 2.9 | $ 0 | $ (0.8) |
Mortgage Servicing - Summary of
Mortgage Servicing - Summary of Delinquency Status of Loans Underlying Mortgage Servicing Rights (Details) | Jun. 30, 2023 | Dec. 31, 2022 |
Participating Mortgage Loans [Line Items] | ||
Percent of aggregate unpaid principal balance | 10.50% | 11.10% |
30 days | ||
Participating Mortgage Loans [Line Items] | ||
Percent of aggregate unpaid principal balance | 4.60% | 4.80% |
60 days | ||
Participating Mortgage Loans [Line Items] | ||
Percent of aggregate unpaid principal balance | 1.70% | 1.80% |
90 days or more | ||
Participating Mortgage Loans [Line Items] | ||
Percent of aggregate unpaid principal balance | 4.20% | 4.50% |
Fair Value Agency Mortgage Servicing Rights | ||
Participating Mortgage Loans [Line Items] | ||
Percent of aggregate unpaid principal balance | 3.10% | 3.30% |
Fair Value Agency Mortgage Servicing Rights | 30 days | ||
Participating Mortgage Loans [Line Items] | ||
Percent of aggregate unpaid principal balance | 1.60% | 1.70% |
Fair Value Agency Mortgage Servicing Rights | 60 days | ||
Participating Mortgage Loans [Line Items] | ||
Percent of aggregate unpaid principal balance | 0.50% | 0.50% |
Fair Value Agency Mortgage Servicing Rights | 90 days or more | ||
Participating Mortgage Loans [Line Items] | ||
Percent of aggregate unpaid principal balance | 1% | 1.10% |
Fair Value Non-Agency Mortgage Servicing Rights | ||
Participating Mortgage Loans [Line Items] | ||
Percent of aggregate unpaid principal balance | 20% | 20.40% |
Fair Value Non-Agency Mortgage Servicing Rights | 30 days | ||
Participating Mortgage Loans [Line Items] | ||
Percent of aggregate unpaid principal balance | 8.40% | 8.50% |
Fair Value Non-Agency Mortgage Servicing Rights | 60 days | ||
Participating Mortgage Loans [Line Items] | ||
Percent of aggregate unpaid principal balance | 3.40% | 3.30% |
Fair Value Non-Agency Mortgage Servicing Rights | 90 days or more | ||
Participating Mortgage Loans [Line Items] | ||
Percent of aggregate unpaid principal balance | 8.20% | 8.60% |
Mortgage Servicing - Schedule_2
Mortgage Servicing - Schedule of Composition of Servicing UPB (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Servicing Assets at Fair Value [Line Items] | ||||||
MSRs, at fair value | $ 2,675.7 | $ 2,580.6 | $ 2,665.2 | $ 2,485.7 | $ 2,323.3 | $ 2,250.1 |
Assets serviced | 197,400 | 199,600 | 194,500 | |||
UPB of loans transferred | 40,875 | 37,571.1 | ||||
Owned MSRs | ||||||
Servicing Assets at Fair Value [Line Items] | ||||||
MSRs, at fair value | 1,643.7 | 1,710.6 | 1,552.6 | |||
Assets serviced | 121,100 | 126,200 | 116,300 | |||
Rithm Transferred Mortgage Servicing Rights | ||||||
Servicing Assets at Fair Value [Line Items] | ||||||
MSRs, at fair value | 702 | 601.2 | 550.8 | |||
Assets serviced | 53,400 | 47,300 | 49,700 | |||
MAV Transferred MSRs | ||||||
Servicing Assets at Fair Value [Line Items] | ||||||
MSRs, at fair value | 330 | 353.4 | 382.2 | |||
Assets serviced | 22,900 | $ 26,100 | $ 28,500 | |||
Mortgage Servicing Rights Title Retained | Rithm Transferred Mortgage Servicing Rights | ||||||
Servicing Assets at Fair Value [Line Items] | ||||||
UPB of loans transferred | $ 10,300 |
Mortgage Servicing - Narrative
Mortgage Servicing - Narrative (Details) - USD ($) $ in Millions | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Transfers and Servicing [Abstract] | |||
UPB of loans acquired | $ 3,800 | $ 7,300 | |
UPB of MSRs sold | 31.3 | 11,100 | |
Float balances | $ 2,200 | $ 1,800 | $ 1,500 |
Mortgage Servicing - Schedule_3
Mortgage Servicing - Schedule of Components of Servicing and Subservicing Fees (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Transfers and Servicing [Abstract] | ||||
Servicing | $ 89.4 | $ 80.9 | $ 179.3 | $ 169.4 |
Subservicing | 18.4 | 20.4 | 38 | 35 |
MAV | 17.4 | 18.8 | 35.7 | 35.5 |
Rithm | 59.2 | 64.7 | 118.8 | 131.9 |
Servicing and Subservicing fees, total | 184.4 | 184.8 | 371.8 | 371.8 |
Late charges | 9.5 | 11.7 | 19 | 21.8 |
Reverse subservicing ancillary fees | 9.8 | 6.3 | 18 | 9.4 |
Recording fees | 1.3 | 2.6 | 2.5 | 5.9 |
Loan collection fees | 2.3 | 2.9 | 4.9 | 5.8 |
Boarding and deboarding fees | 0.9 | 1.9 | 1.8 | 3.6 |
Custodial accounts (float earnings) | 26.2 | 1.8 | 46.4 | 2.8 |
GSE forbearance fees | 0.3 | 0.2 | 0.5 | 0.4 |
Other, net | 2.9 | 3 | 4.8 | 6.3 |
Total ancillary income | 53.2 | 30.3 | 97.9 | 56 |
Servicing and subservicing fees | $ 237.6 | $ 215.1 | $ 469.7 | $ 427.8 |
MSR Transfers Not Qualifying _3
MSR Transfers Not Qualifying for Sale Accounting - Schedule of Activity Related to Financing Liability - MSRs Pledged (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Servicing Asset at Fair Value, Amount [Roll Forward] | ||||
UPB of MSRs sold | $ 31.3 | $ 11,100 | ||
Fair Value Agency Mortgage Servicing Rights | ||||
Servicing Asset at Fair Value, Amount [Roll Forward] | ||||
UPB of MSRs sold | $ 2,300 | |||
ESS Financing Liability | ||||
Servicing Asset at Fair Value, Amount [Roll Forward] | ||||
Beginning Balance | 883.3 | $ 864.3 | 931.7 | 797.1 |
MSR transfers | 93.4 | 30.3 | 97.8 | 69.6 |
Changes in fair value due to inputs and assumptions | 81 | 40.4 | 42.7 | 97.2 |
Realization of expected cash flows | (15.6) | (28.8) | (30.1) | (57) |
Derecognition of financing liability | 32.5 | 32.5 | ||
Calls | 0 | (0.6) | ||
Total fair value (gain) loss | 65.4 | 11.7 | 12.6 | 40.2 |
Ending Balance | 1,009.5 | 906.3 | 1,009.5 | 906.3 |
Changes in fair value due to valuation inputs or assumptions | 14.1 | |||
Rithm | Original Rights to Mortgage Servicing Rights Agreements | ||||
Servicing Asset at Fair Value, Amount [Roll Forward] | ||||
Ending Balance | 689.9 | 689.9 | ||
Rithm | ESS Financing Liability | Original Rights to Mortgage Servicing Rights Agreements | ||||
Servicing Asset at Fair Value, Amount [Roll Forward] | ||||
Beginning Balance | 564.5 | 545.3 | 601.9 | 558.9 |
MSR transfers | 93.3 | 0 | 97.6 | 0 |
Changes in fair value due to inputs and assumptions | 39.3 | 24.7 | 3.5 | 31.5 |
Realization of expected cash flows | (7.2) | (19.2) | (13.1) | (39.1) |
Calls | 0 | (0.6) | ||
Ending Balance | 689.9 | 550.8 | 689.9 | 550.8 |
MSR Asset Vehicle LLC | ESS Financing Liability | ||||
Servicing Asset at Fair Value, Amount [Roll Forward] | ||||
Beginning Balance | 318.7 | 319 | 329.8 | 238.1 |
MSR transfers | 0.1 | 30.3 | 0.2 | 69.6 |
Changes in fair value due to inputs and assumptions | 41.8 | 15.7 | 39.2 | 65.6 |
Realization of expected cash flows | (8.4) | (9.5) | (17) | (17.9) |
Derecognition of financing liability | 32.5 | 32.5 | ||
Calls | 0 | 0 | ||
Total fair value (gain) loss | 33.4 | 6.2 | 22.2 | 47.7 |
Ending Balance | 319.7 | 355.5 | 319.7 | 355.5 |
Rithm Capital Corp . and others | ESS Financing Liability | ||||
Servicing Asset at Fair Value, Amount [Roll Forward] | ||||
Total fair value (gain) loss | $ 32.1 | $ 5.5 | $ (9.6) | $ (7.6) |
MSR Transfers Not Qualifying _4
MSR Transfers Not Qualifying for Sale Accounting - Schedule of Assets, Liabilities Related to MSR Transfer Agreements (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Servicing Liabilities at Fair Value [Line Items] | ||
Other financing liabilities, at fair value | $ 1,274 | $ 1,137.4 |
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 Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Related Party Transaction [Line Items] | ||||
Proceeds from Collection of Loans Receivable | $ 74.7 | $ 82.2 | $ 150.7 | $ 165.1 |
Less: Subservicing fee retained by Ocwen | (19.1) | (21) | (38.6) | (42.5) |
MSR Pledged liability expense | 73 | 63 | 143.3 | 122.7 |
Ancillary and other settlement | 3.5 | 1.8 | 6.7 | 0.1 |
ESS Financing Liability | ||||
Related Party Transaction [Line Items] | ||||
Changes in fair value due to valuation inputs or assumptions | 14.1 | |||
MSR Pledged liability expense | 59.1 | 63 | 118.8 | 122.7 |
ESS Financing Liability | ||||
Related Party Transaction [Line Items] | ||||
MSR Pledged liability expense | 13.9 | 0 | 24.5 | |
MSR Asset Vehicle LLC | ||||
Related Party Transaction [Line Items] | ||||
Proceeds from Collection of Loans Receivable | 15.5 | 17.5 | 31.9 | 33.2 |
Less: Subservicing fee retained by Ocwen | (2.1) | (2.3) | (4.4) | (4.4) |
MSR Pledged liability expense | 13.2 | 15.2 | 27.3 | 29.5 |
Ancillary and other settlement | (0.2) | 0 | (0.2) | 0.6 |
Rithm Capital Corp . and others | ||||
Related Party Transaction [Line Items] | ||||
Proceeds from Collection of Loans Receivable | 59.2 | 64.7 | 118.8 | 131.9 |
Less: Subservicing fee retained by Ocwen | (16.9) | (18.8) | (34.2) | (38.1) |
MSR Pledged liability expense | 45.9 | 47.7 | 91.5 | 93.2 |
Ancillary and other settlement | $ 3.6 | $ 1.8 | $ 6.9 | $ (0.5) |
MSR Transfers Not Qualifying _6
MSR Transfers Not Qualifying for Sale Accounting - Narrative (Details) $ in Billions | May 02, 2022 | Jun. 30, 2023 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 | |
New RMSR Agreements | Rithm | ||
Servicing Assets at Fair Value [Line Items] | ||
UPB of rights to MSRs sold | $ 47 | |
2017 Agreements and New RMSR Agreements | Mortgage Servicing Rights Title Retained | ||
Servicing Assets at Fair Value [Line Items] | ||
UPB of rights to MSRs sold | 1.8 | |
2017 Agreements and New RMSR Agreements | Mortgage Servicing Rights Title Retained | Rithm | ||
Servicing Assets at Fair Value [Line Items] | ||
UPB of rights to MSRs sold | $ 10.3 | |
Servicing agreements notice of termination | 3 months |
Receivables - Schedule of Recei
Receivables - Schedule of Receivables (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Receivables [Abstract] | ||
Government-insured loan claims - Forward | $ 50.6 | $ 65 |
Government-insured loan claims - Reverse | 89 | 73.8 |
Due from custodial accounts | 11.6 | 16.3 |
Receivable from sale of MSRs (holdback) | 10.5 | 1.5 |
Subservicing fees and reimbursable expenses | 13.5 | 11.7 |
Subservicing fees and reimbursable expenses - Due from Rithm | 1.8 | 3 |
Subservicing fees, reimbursable expenses and other - Due from MAV | 1.7 | 1 |
Other | 0.7 | 3.2 |
Servicing receivable, total | 179.4 | 175.5 |
Income taxes receivable | 27.3 | 34.4 |
Other receivables | 9.3 | 5.2 |
Other receivables, gross | 216 | 215.1 |
Allowance for losses | (27.4) | (34.3) |
Receivables, net ($44.2 and $0.0 related to VIEs) | $ 188.6 | $ 180.8 |
Receivables - Narrative (Detail
Receivables - Narrative (Detail) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Allowance for financing notes | $ 3.7 | $ 3.8 | |
Servicing | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Allowance for financing notes | $ 27 | $ 33.8 |
Receivables - Schedule of Chang
Receivables - Schedule of Changes in allowance of Government-Insured Loan Claims (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Allowance for Losses - Government-Insured Loan Claims | ||||
Ending balance | $ 3.7 | $ 3.8 | $ 3.7 | $ 3.8 |
Government Insured Loans Claims | ||||
Allowance for Losses - Government-Insured Loan Claims | ||||
Beginning balance | 29.1 | 40.8 | 33.8 | 41.5 |
Provision | 3.9 | 3.3 | 8 | 5.5 |
Charge-offs and other, net | (6) | (4.3) | (14.8) | (7.2) |
Ending balance | $ 27 | $ 39.8 | $ 27 | $ 39.8 |
Investment in Equity Method I_2
Investment in Equity Method Investee and Related Party Transactions (Narrative) (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Schedule of Equity Method Investments [Line Items] | ||
UPB of MSRs sold | $ 31.3 | $ 11,100 |
MSR Asset Vehicle LLC | ||
Schedule of Equity Method Investments [Line Items] | ||
Unpaid principal balance of loans subserviced | 46,600 | |
MSR Asset Vehicle LLC | Mortgage Servicing Rights Title Transferred | ||
Schedule of Equity Method Investments [Line Items] | ||
UPB of rights to MSRs sold | 22,900 | |
Joint Marketing and Recapture Agreement | ||
Schedule of Equity Method Investments [Line Items] | ||
UPB of MSRs sold | 17.9 | 191.4 |
Other MSR Purchase and Sale Agreement | ||
Schedule of Equity Method Investments [Line Items] | ||
UPB of MSRs sold | $ 0 | $ 5,700 |
Other Assets - Schedule of Othe
Other Assets - Schedule of Other Assets (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Other Assets [Abstract] | ||
Accumulated amortization | $ (8) | $ (5) |
Contingent loan repurchase asset | 247.1 | 289.9 |
Derivative margin deposit | 6.8 | 1.5 |
Derivatives, at fair value | 8.9 | 7.7 |
Prepaid expenses | 17.4 | 19.8 |
Intangible assets, net (net of accumulated amortization of $8.0 million and $5.0 million) | 8.3 | 14.7 |
REO | 18 | 9.8 |
Prepaid lender fees, net | 7 | 7.7 |
Prepaid representation, warranty and indemnification claims - Agency MSR sale | 5 | 5 |
Deferred tax asset, net | 2.5 | 2.6 |
Security deposits | 0.8 | 0.8 |
Other | 5.8 | 4.7 |
Other Assets, Total | $ 327.6 | $ 364.2 |
Other Financing Liabilities - S
Other Financing Liabilities - Schedule of Financing Liabilities (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Debt Instrument [Line Items] | |||||
Other financing liabilities, at fair value | $ 1,274 | $ 1,274 | $ 1,137.4 | ||
Servicing and subservicing fees | 237.6 | $ 215.1 | 469.7 | $ 427.8 | |
Proceeds from other financing liabilities - Excess Servicing Spread (ESS) liability | 68.7 | $ 0 | |||
Other counterparties for Pledged MSR liab. | Financing Liabilities | |||||
Debt Instrument [Line Items] | |||||
Other financing liabilities, at fair value | 112.7 | 112.7 | 0.7 | ||
ESS Financing Liability | |||||
Debt Instrument [Line Items] | |||||
Other financing liabilities, at fair value | 258.5 | 258.5 | 199 | ||
ESS Financing Liability | |||||
Debt Instrument [Line Items] | |||||
Other financing liabilities, at fair value | 1,009.5 | 1,009.5 | 931.7 | ||
Residential Asset Securitization Trust | |||||
Debt Instrument [Line Items] | |||||
Other financing liabilities, at fair value | 6 | 6 | 6.7 | ||
Original Rights to Mortgage Servicing Rights Agreements | ESS Financing Liability | |||||
Debt Instrument [Line Items] | |||||
Other financing liabilities, at fair value | 577.1 | 577.1 | 601.2 | ||
MAV MSR Sale Agreements | ESS Financing Liability | |||||
Debt Instrument [Line Items] | |||||
Other financing liabilities, at fair value | $ 319.7 | $ 319.7 | $ 329.8 |
Borrowings - Schedule of Match
Borrowings - Schedule of Match Funded Liabilities (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Advance match funded liabilities ($429.5 and $512.5 related to VIEs) | $ 430.4 | $ 513.7 |
Prepaid lender fees, net | 7 | 7.7 |
Advance Receivables Backed Notes - Series 2015-VF5 | Total Ocwen Master Advance Receivables Trust (OMART) | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | 450 | |
Available borrowing capacity | 67.8 | |
Advance match funded liabilities ($429.5 and $512.5 related to VIEs) | 382.2 | 422.5 |
Advance Receivables Backed Notes, Series 2015-VF1 | Total Ocwen Freddie Advance Funding Facility (OFAF) | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | 90 | |
Available borrowing capacity | 42.7 | |
Advance match funded liabilities ($429.5 and $512.5 related to VIEs) | 47.3 | 90 |
EBO Advance Facility | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | 14.4 | |
Available borrowing capacity | 13.5 | |
Advance match funded liabilities ($429.5 and $512.5 related to VIEs) | 0.9 | 1.2 |
Available borrowing capacity based on amount of eligible collateral | 0 | |
Advance match funded liabilities | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | 554.4 | |
Available borrowing capacity | 124 | |
Advance match funded liabilities ($429.5 and $512.5 related to VIEs) | $ 430.4 | $ 513.7 |
Weighted average interest rate | 8.15% | 7.09% |
Available borrowing capacity based on amount of eligible collateral | $ 0 | |
Prepaid lender fees, net | $ 0.5 | $ 2.3 |
Borrowings - Schedule of Mortga
Borrowings - Schedule of Mortgage Loan Warehouse and MSR Financing Facilities (Details) - USD ($) $ in Millions | 1 Months Ended | 6 Months Ended | ||||
Jul. 31, 2023 | Jun. 30, 2023 | Jun. 30, 2023 | Apr. 03, 2023 | Dec. 31, 2022 | Jan. 05, 2022 | |
Line of Credit Facility [Line Items] | ||||||
Prepaid lender fees, net | $ 7 | $ 7 | $ 7.7 | |||
Secured Debt | ||||||
Line of Credit Facility [Line Items] | ||||||
Unamortized debt issuance costs | $ (26.6) | $ (26.6) | ||||
Mortgage loan financing facilities | ||||||
Line of Credit Facility [Line Items] | ||||||
Weighted average interest rate | 6.03% | 6.03% | 5.74% | |||
Prepaid lender fees, net | $ 1.5 | $ 1.5 | $ 0.5 | |||
Secured Debt | ||||||
Line of Credit Facility [Line Items] | ||||||
Uncommitted available borrowing capacity | 38.2 | 38.2 | ||||
Available borrowing capacity | 39.7 | 39.7 | ||||
Total Financing liabilities | 865.3 | 865.3 | 954.6 | |||
Unamortized debt issuance costs | (0.6) | (0.6) | (0.8) | |||
Outstanding borrowings (MSR financing facilities, net) | $ 864.8 | $ 864.8 | $ 953.8 | |||
Weighted average interest rate | 7.88% | 7.88% | 7.31% | |||
Secured Debt | Mortgage loan financing facilities | ||||||
Line of Credit Facility [Line Items] | ||||||
Uncommitted available borrowing capacity | $ 936.5 | $ 936.5 | ||||
Available borrowing capacity | 120.1 | 120.1 | ||||
Total Financing liabilities | 1,541.6 | 1,541.6 | $ 702.7 | |||
Outstanding borrowings (MSR financing facilities, net) | 1,515 | 1,515 | 702.7 | |||
MSR financing facilities | ||||||
Line of Credit Facility [Line Items] | ||||||
Available borrowing capacity | 18.1 | $ 18.1 | ||||
OASIS Series 2014-1 | ||||||
Line of Credit Facility [Line Items] | ||||||
Basis spread on variable rate | 0.21% | |||||
August 2022 Master Repurchase Agreement | Secured Debt | ||||||
Line of Credit Facility [Line Items] | ||||||
Uncommitted available borrowing capacity | 125 | $ 125 | ||||
Available borrowing capacity | 39.3 | 39.3 | ||||
Total Financing liabilities | 10.7 | 10.7 | 142.2 | |||
December 2022 Master Repurchase Agreement | Secured Debt | ||||||
Line of Credit Facility [Line Items] | ||||||
Uncommitted available borrowing capacity | 0 | 0 | ||||
Available borrowing capacity | 0 | 0 | ||||
Total Financing liabilities | 0 | 0 | 100.3 | |||
Master Repurchase Agreement | Secured Debt | ||||||
Line of Credit Facility [Line Items] | ||||||
Uncommitted available borrowing capacity | 50 | 50 | ||||
Available borrowing capacity | 0 | 0 | ||||
Total Financing liabilities | 0 | 0 | 0 | |||
Participation Agreement | Secured Debt | ||||||
Line of Credit Facility [Line Items] | ||||||
Uncommitted available borrowing capacity | 91.9 | 91.9 | ||||
Available borrowing capacity | 0 | 0 | ||||
Total Financing liabilities | 308.1 | 308.1 | 64.3 | |||
Uncommitted available borrowing capacity, increase (decrease) | (400) | |||||
Participation Agreement | Secured Debt | Subsequent Event | ||||||
Line of Credit Facility [Line Items] | ||||||
Uncommitted available borrowing capacity, increase (decrease) | $ (650) | |||||
June 2023 Master Repurchase Agreement | Secured Debt | ||||||
Line of Credit Facility [Line Items] | ||||||
Uncommitted available borrowing capacity | 0 | 0 | ||||
Available borrowing capacity | 1.3 | 1.3 | ||||
Total Financing liabilities | 171.7 | 171.7 | 26.1 | |||
June 2023 Master Repurchase Agreement2 | Secured Debt | ||||||
Line of Credit Facility [Line Items] | ||||||
Uncommitted available borrowing capacity | 0 | 0 | ||||
Available borrowing capacity | 1 | 1 | ||||
Total Financing liabilities | 0 | 0 | 0 | |||
March 2023 Mortgage Warehouse Agreement | Secured Debt | ||||||
Line of Credit Facility [Line Items] | ||||||
Uncommitted available borrowing capacity | 0 | 0 | ||||
Available borrowing capacity | 36 | 36 | ||||
Total Financing liabilities | 14 | 14 | 7.8 | |||
Uncommitted available borrowing capacity, increase (decrease) | $ 40 | |||||
March 2023 Mortgage Warehouse Agreement2 | Secured Debt | ||||||
Line of Credit Facility [Line Items] | ||||||
Uncommitted available borrowing capacity | 137.1 | 137.1 | ||||
Available borrowing capacity | 0 | 0 | ||||
Total Financing liabilities | 66.9 | 66.9 | 44.2 | |||
Mortgage Warehouse Agreement | ||||||
Line of Credit Facility [Line Items] | ||||||
Available borrowing capacity | 1.7 | 1.7 | ||||
Long-term debt, term | 4 years | |||||
Mortgage Warehouse Agreement | Secured Debt | ||||||
Line of Credit Facility [Line Items] | ||||||
Uncommitted available borrowing capacity | 216 | 216 | ||||
Available borrowing capacity | 0 | 0 | ||||
Total Financing liabilities | 14 | 14 | 21.9 | |||
Master Repurchase Agreement2 | Secured Debt | ||||||
Line of Credit Facility [Line Items] | ||||||
Uncommitted available borrowing capacity | 0 | 0 | ||||
Available borrowing capacity | 0 | 0 | ||||
Total Financing liabilities | 100.4 | 100.4 | 0 | |||
Loan and Security Agreement | Secured Debt | ||||||
Line of Credit Facility [Line Items] | ||||||
Uncommitted available borrowing capacity | 0 | 0 | ||||
Available borrowing capacity | 42.5 | 42.5 | ||||
Total Financing liabilities | 7.5 | 7.5 | 7.2 | |||
April 2023 Master Repurchase Agreement | Secured Debt | ||||||
Line of Credit Facility [Line Items] | ||||||
Uncommitted available borrowing capacity | 116.6 | 116.6 | ||||
Available borrowing capacity | 0 | 0 | ||||
Total Financing liabilities | 583.4 | 583.4 | 288.8 | |||
$200 million April 2024 Master Repurchase Agreement | Secured Debt | ||||||
Line of Credit Facility [Line Items] | ||||||
Uncommitted available borrowing capacity | 200 | 200 | $ 200 | |||
Total Financing liabilities | 0 | 0 | 0 | |||
OLIT 2023 Notes | Secured Debt | ||||||
Line of Credit Facility [Line Items] | ||||||
Uncommitted available borrowing capacity | 0 | 0 | ||||
Total Financing liabilities | $ 264.9 | $ 264.9 | ||||
Interest rate (as a percent) | 3% | 3% | ||||
OLIT Notes FY 2022 | Secured Debt | ||||||
Line of Credit Facility [Line Items] | ||||||
Total Financing liabilities | 0 | |||||
Agency Mortgage Servicing Rights Financing Facility | Secured Debt | ||||||
Line of Credit Facility [Line Items] | ||||||
Uncommitted available borrowing capacity | $ 0 | $ 0 | ||||
Available borrowing capacity | 27.2 | 27.2 | ||||
Total Financing liabilities | 237.8 | 237.8 | 309.8 | |||
Uncommitted available borrowing capacity, increase (decrease) | 265 | |||||
Uncommitted available borrowing capacity, increase (decrease) | 185 | |||||
Ginnie Mae Mortgage Servicing Rights Financing Facility | Secured Debt | ||||||
Line of Credit Facility [Line Items] | ||||||
Uncommitted available borrowing capacity | 38.2 | 38.2 | ||||
Available borrowing capacity | 0 | 0 | ||||
Total Financing liabilities | 161.8 | 161.8 | 157.9 | |||
Ocwen Excess Spread-Collateralized Notes, Series 2019/2022-PLS1 Class A | Secured Debt | ||||||
Line of Credit Facility [Line Items] | ||||||
Uncommitted available borrowing capacity | 0 | 0 | ||||
Available borrowing capacity | 0 | 0 | ||||
Total Financing liabilities | 47.4 | 47.4 | 56.7 | |||
Outstanding borrowings (MSR financing facilities, net) | $ 75 | $ 75 | ||||
Interest rate (as a percent) | 5.114% | 5.114% | ||||
OASIS Series 2014-1 | Secured Debt | ||||||
Line of Credit Facility [Line Items] | ||||||
Uncommitted available borrowing capacity | $ 0 | $ 0 | ||||
Available borrowing capacity | 0 | 0 | ||||
Total Financing liabilities | 30.9 | 30.9 | 33.4 | |||
Agency MSR Financing Facility Revolving Loan | ||||||
Line of Credit Facility [Line Items] | ||||||
Prepaid lender fees, net | 5 | 5 | 4.9 | |||
Agency MSR Financing Facility Revolving Loan | Secured Debt | ||||||
Line of Credit Facility [Line Items] | ||||||
Uncommitted available borrowing capacity | 0 | 0 | ||||
Available borrowing capacity | 12.6 | 12.6 | ||||
Total Financing liabilities | $ 387.4 | $ 387.4 | $ 396.8 |
Borrowings - Schedule of Senior
Borrowings - Schedule of Senior Notes (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Senior notes, net ($234.9 and $230.2 due to related party) | $ 605,000 | $ 599,600 |
Senior Notes | ||
Debt Instrument [Line Items] | ||
Senior notes | 660,000 | 660,000 |
Discount | (44,400) | (48,600) |
Unamortized debt issuance costs | $ (10,600) | (11,800) |
7.875% Senior Notes, Due 2026 | Secured Debt | ||
Debt Instrument [Line Items] | ||
Interest rate (as a percent) | 7.875% | |
Senior notes | $ 375,000 | 375,000 |
7.875% Senior Notes, Due 2026 | Secured Debt | Tranche One | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Redeemable, Percentage | 1.03938 | |
7.875% Senior Notes, Due 2026 | Secured Debt | Tranche Two | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Redeemable, Percentage | 1.01969 | |
7.875% Senior Notes, Due 2026 | Senior Notes | ||
Debt Instrument [Line Items] | ||
Discount | $ (1,100) | (1,300) |
Unamortized debt issuance costs | $ (3,700) | (4,300) |
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% 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 |
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% | |
12% Paid in Cash or 13.25% Paid in Kind Senior Notes, Due 2027 | Senior Notes | ||
Debt Instrument [Line Items] | ||
Discount | $ (43,300) | (47,300) |
Unamortized debt issuance costs | $ (6,900) | $ (7,500) |
Borrowings - Narrative (Details
Borrowings - Narrative (Details) $ in Millions | Jun. 30, 2023 USD ($) |
Debt Instrument [Line Items] | |
Covenant compliance, consolidated tangible net worth at period end | $ 300 |
Minimum | |
Debt Instrument [Line Items] | |
Restrictive liquidity requirements | $ 75 |
Borrowings - Schedule of Assets
Borrowings - Schedule of Assets Held as Collateral Related to Secured Borrowings (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 |
Debt Instrument [Line Items] | |||
Cash and cash equivalents | $ 213.4 | $ 208 | |
Restricted cash | 119.1 | 66.2 | |
Loans held for sale | 1,356.5 | 622.7 | |
Loans held for investment, at fair value | 7,680.7 | 7,510.8 | |
Unsecuritized loans | 121 | $ 155.8 | |
Mortgage servicing rights (MSRs), at fair value | 2,675.7 | 2,665.2 | |
Advances, net | 602.7 | 718.9 | |
Receivables, net ($44.2 and $0.0 related to VIEs) | 188.6 | 180.8 | |
REO | 18 | 9.8 | |
Total Assets | 13,216 | $ 12,399.2 | $ 12,107.7 |
Assets | |||
Debt Instrument [Line Items] | |||
Cash and cash equivalents | 213.4 | ||
Restricted cash | 119.1 | ||
Loans held for sale | 1,356.5 | ||
Loans held for investment, at fair value | 7,553.7 | ||
Unsecuritized loans | 121 | ||
Mortgage servicing rights (MSRs), at fair value | 1,643.8 | ||
Advances, net | 602.7 | ||
Receivables, net ($44.2 and $0.0 related to VIEs) | 188.6 | ||
REO | 18 | ||
Total Assets | 11,816.8 | ||
Pledged Assets | |||
Debt Instrument [Line Items] | |||
Cash and cash equivalents | 0 | ||
Restricted cash | 119.1 | ||
Loans held for sale | 1,320.9 | ||
Loans held for investment, at fair value | 7,553.7 | ||
Unsecuritized loans | 86.6 | ||
Mortgage servicing rights (MSRs), at fair value | 1,654.4 | ||
Advances, net | 552.9 | ||
Receivables, net ($44.2 and $0.0 related to VIEs) | 83.7 | ||
REO | 13.6 | ||
Collateralized Borrowings | |||
Debt Instrument [Line Items] | |||
Cash and cash equivalents | 0 | ||
Restricted cash | 50.8 | ||
Loans held for sale | 1,309 | ||
Loans held for investment, at fair value | 7,486.4 | ||
Unsecuritized loans | 79.7 | ||
Mortgage servicing rights (MSRs), at fair value | 1,094.7 | ||
Advances, net | 459.6 | ||
Receivables, net ($44.2 and $0.0 related to VIEs) | 87.7 | ||
REO | 14.5 | ||
Total Assets | 10,582.3 | ||
Senior Lien | Asset Pledged as Collateral with Right | |||
Debt Instrument [Line Items] | |||
Total Assets | 11,384.8 | ||
Unencumbered Assets | |||
Debt Instrument [Line Items] | |||
Cash and cash equivalents | 213.4 | ||
Restricted cash | 0 | ||
Loans held for sale | 35.6 | ||
Loans held for investment, at fair value | 0 | ||
Unsecuritized loans | 34.5 | ||
Mortgage servicing rights (MSRs), at fair value | 0.3 | ||
Advances, net | 49.8 | ||
Receivables, net ($44.2 and $0.0 related to VIEs) | 104.9 | ||
REO | 4.4 | ||
Total Assets | $ 443 |
Borrowings - Schedule of Second
Borrowings - Schedule of Second Lien Priority on Specified Assets Carried on Balance Sheet (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 |
Debt Instrument [Line Items] | |||
Advances, net | $ 602.7 | $ 718.9 | |
Mortgage servicing rights (MSRs), at fair value | 2,675.7 | 2,665.2 | |
Cash and cash equivalents | 213.4 | 208 | |
Total assets | 13,216 | $ 12,399.2 | $ 12,107.7 |
Second Lien | |||
Debt Instrument [Line Items] | |||
Advances, net | 191.3 | ||
Specified deferred servicing fee | 4 | ||
Mortgage servicing rights (MSRs), at fair value | 644.6 | ||
Cash and cash equivalents | 118.5 | ||
Specified advance facility reserves | 14.6 | ||
Specified loan value | 83.2 | ||
Specified residual value | 0 | ||
Total assets | $ 1,056.2 |
Other Liabilities - Schedule of
Other Liabilities - Schedule of Other Liabilities (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Other Liabilities Disclosure [Abstract] | ||
Contingent loan repurchase liability | $ 247.1 | $ 289.9 |
Due to Rithm - Advance collections, servicing fees and other | 61.6 | 64.4 |
Other accrued expenses | 52.6 | 75.9 |
Liability for indemnification obligations | 41.6 | 43.8 |
Checks held for escheat | 50.9 | 48.1 |
Accrued legal fees and settlements | 10.2 | 42.2 |
Servicing-related obligations | 41.6 | 40.1 |
Derivative related payables | 9 | 6 |
Derivatives, at fair value | 13.2 | 15.7 |
MSR purchase price holdback | 5.6 | 13.9 |
Lease liability | 14.2 | 16.6 |
Liability for uncertain tax positions | 11.5 | 10.9 |
Accrued interest payable | 17.6 | 13.7 |
Income taxes payable | 6.8 | 6.2 |
Liability for unfunded pension obligation and India gratuity plan | 9.2 | 9.3 |
Other | 4.7 | 3.4 |
Mortgage insurance premium payable | 5.3 | 5 |
Excess servicing fee spread payable | 3.8 | 3.4 |
Total other liabilities | $ 606.6 | $ 708.5 |
Derivative Financial Instrume_3
Derivative Financial Instruments and Hedging Activities - Summary of Derivatives (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Derivative [Line Items] | |||||
Notional balance | $ 2,803.1 | $ 2,803.1 | $ 937.8 | ||
Derivatives, at fair value | 8.9 | 8.9 | 7.7 | ||
Derivative liability, notional amount | 2,668.6 | 2,668.6 | 1,371.4 | ||
Derivative liability, fair value | (13.2) | (13.2) | (15.7) | ||
Gains (losses) on derivatives | (47.4) | $ 13.3 | (44) | $ (18.7) | |
Forward Sales Of Reverse Loans | |||||
Derivative [Line Items] | |||||
Notional balance | 30 | 30 | 20 | ||
Derivatives, at fair value | 0.1 | 0.1 | 0.1 | ||
Derivative liability, notional amount | 20 | 20 | 20 | ||
Derivative liability, fair value | 0 | 0 | (0.1) | ||
Gains (losses) on derivatives | 0 | 0.6 | 0 | 0.2 | |
Forward loans IRLCs | |||||
Derivative [Line Items] | |||||
Notional balance | 1,136.7 | 1,136.7 | 0 | ||
Derivatives, at fair value | 1.1 | 1.1 | 0 | ||
Derivative liability, notional amount | 0 | 0 | 540.1 | ||
Derivative liability, fair value | 0 | 0 | 1.3 | ||
Gains (losses) on derivatives | (3.2) | 0.6 | 2.4 | (11.5) | |
Reverse loans IRLCs | |||||
Derivative [Line Items] | |||||
Notional balance | 16.4 | 16.4 | 13.8 | ||
Derivatives, at fair value | 0.3 | 0.3 | 0.6 | ||
Gains (losses) on derivatives | (0.2) | (0.8) | (0.3) | (1.2) | |
Reverse loan IRLCs - EquityIQ loans | |||||
Derivative [Line Items] | |||||
Gains (losses) on derivatives | 0 | 0.3 | 0 | 0.3 | |
TBA forward MBS trades | |||||
Derivative [Line Items] | |||||
Notional balance | 1,620 | 1,620 | 804 | ||
Derivatives, at fair value | 7.4 | 7.4 | 6.6 | ||
Derivative liability, notional amount | 381 | 381 | 85 | ||
Derivative liability, fair value | (1.1) | (1.1) | (0.7) | ||
Interest Rate Swap | |||||
Derivative [Line Items] | |||||
Derivative liability, notional amount | 1,570 | 1,570 | 670 | ||
Derivative liability, fair value | (10.9) | (10.9) | (13.6) | ||
Interest rate option contracts | |||||
Derivative [Line Items] | |||||
Derivative liability, notional amount | 620 | 620 | 0 | ||
Derivative liability, fair value | (1.2) | (1.2) | 0 | ||
TBA Forward Pipelines Trades | |||||
Derivative [Line Items] | |||||
Gains (losses) on derivatives | 21.2 | 29.1 | 4.8 | 76.2 | |
TBA Trades | |||||
Derivative [Line Items] | |||||
Gains (losses) on derivatives | 0 | (0.1) | 0 | (0.1) | |
Interest Rate Swap Futures And TBA Forward MBS Trades | |||||
Derivative [Line Items] | |||||
Gains (losses) on derivatives | (65.2) | (16.9) | (51.1) | (83.7) | |
Other | |||||
Derivative [Line Items] | |||||
Derivative liability, notional amount | 77.6 | 77.6 | 56.4 | ||
Derivative liability, fair value | (0.1) | (0.1) | (0.1) | ||
Other Derivatives | |||||
Derivative [Line Items] | |||||
Gains (losses) on derivatives | 0 | $ 0.5 | 0.3 | $ 0.9 | |
Forward Trades | |||||
Derivative [Line Items] | |||||
Notional balance | 0 | 0 | 100 | ||
Derivatives, at fair value | $ 0 | $ 0 | $ 0.4 |
Derivative Financial Instrume_4
Derivative Financial Instruments and Hedging Activities - Narrative (Details) | 6 Months Ended |
Jun. 30, 2023 | |
Minimum | |
Derivative [Line Items] | |
Coverage ratio | 0.25 |
Loans held-for-sale, period of sale | 5 days |
Basis spread on variable rate | 0.50% |
Minimum | Forward loans IRLCs | |
Derivative [Line Items] | |
Loan commitment, term | 5 days |
Loan commitment, average term | 40 days |
Loan Commitment to Correspondents | 5 days |
Maximum | |
Derivative [Line Items] | |
Coverage ratio | 0.30 |
Loans held-for-sale, period of sale | 30 days |
Maximum | Forward loans IRLCs | |
Derivative [Line Items] | |
Loan commitment, term | 90 days |
Loan commitment, average term | 60 days |
Loan Commitment to Correspondents | 15 days |
Interest Expense - Schedule of
Interest Expense - Schedule of Components of Interest Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Debt securities: | ||||
Interest expense | $ 68.3 | $ 37.9 | $ 130.5 | $ 75.7 |
Amortization of debt issuance costs and discount | 3.3 | 2.5 | 6.1 | 5.1 |
OFC Senior Secured Notes | ||||
Debt securities: | ||||
Interest expense | 10.9 | 10.5 | 21.7 | 20.9 |
Amortization of debt issuance costs and discount | 2.4 | 2 | 4.7 | 3.9 |
Senior Notes | ||||
Debt securities: | ||||
Interest expense | 7.8 | 8.1 | 15.5 | 16.3 |
MSR financing facilities | ||||
Debt securities: | ||||
Interest expense | 17.8 | 8.6 | 35.3 | 16.4 |
Mortgage loan financing facilities | ||||
Debt securities: | ||||
Interest expense | 19.8 | 6.7 | 33.4 | 13.8 |
Advance match funded liabilities | ||||
Debt securities: | ||||
Interest expense | 10.4 | 2.8 | 21.1 | 5.5 |
Escrow | ||||
Debt securities: | ||||
Interest expense | $ 1.6 | $ 1.2 | $ 3.5 | $ 2.9 |
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 | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Weighted average common shares outstanding | ||||
Net income (loss) | $ 15,500 | $ 10,400 | $ (24,700) | $ 68,400 |
Weighted average shares of common stock (in shares) | 7,652,563 | 9,257,089 | 7,593,391 | 9,236,221 |
Basic earnings per share (in USD per share) | $ 2.02 | $ 1.12 | $ (3.25) | $ 7.41 |
Common stock warrants (in shares) | 115,977 | 0 | 0 | 139,160 |
Stock option awards (in shares) | 0 | 0 | 0 | 37 |
Common stock awards (in shares) | 151,047 | 109,517 | 0 | 138,784 |
Dilutive weighted average shares of common stock (in shares) | 7,919,587 | 9,366,606 | 7,593,391 | 9,514,202 |
Diluted earnings per share (in USD per share) | $ 1.95 | $ 1.11 | $ (3.25) | $ 7.19 |
Stock options and common stock awards excluded from the computation of diluted earnings per share | ||||
Anti-dilutive Securities (in shares) | 84,748 | 460,512 | 59,703 | 279,516 |
Market Based | ||||
Stock options and common stock awards excluded from the computation of diluted earnings per share | ||||
Anti-dilutive Securities (in shares) | 61,354 | 76,534 | 61,354 | 76,534 |
Business Segment Reporting - Na
Business Segment Reporting - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Segment Reporting Information [Line Items] | ||||
MSR valuation adjustments, net | $ 48.9 | $ (22.1) | $ 117.9 | $ (57.5) |
Interest expense | $ 68.3 | $ 37.9 | $ 130.5 | $ 75.7 |
Business Segment Reporting - Sc
Business Segment Reporting - Schedule of Segment Reporting Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Results of Operations | |||||
Servicing and subservicing fees | $ 237.6 | $ 215.1 | $ 469.7 | $ 427.8 | |
Gain (loss) on reverse loans held for investment and HMBS-related borrowings, net | 0.7 | (2.6) | 21.9 | 10.5 | |
Gain (loss) on loans held for sale, net | 25.3 | 0.9 | 28.1 | (2.3) | |
Other revenue, net | 8.5 | 8.7 | 14.1 | 17.7 | |
Revenue | 272 | 222.2 | 533.9 | 453.7 | |
MSR valuation adjustments, net | (48.9) | 22.1 | (117.9) | 57.5 | |
Operating expenses | 84.3 | 144.4 | 198.4 | 271.4 | |
Other income (expense): | |||||
Interest income | 20.3 | 9.7 | 34.4 | 16.9 | |
Interest expense | (68.3) | (37.9) | (130.5) | (75.7) | |
Pledged MSR liability expense | (73) | (63) | (143.3) | (122.7) | |
Earnings of equity method investee | 2.9 | 3.9 | 3.1 | 15.9 | |
Other | (4.4) | (3.3) | (3.2) | (3.5) | |
Other expense, net | (122.5) | (90.4) | (239.5) | (169.1) | |
Income (loss) before income taxes | 16.3 | 9.4 | (22) | 70.8 | |
Total Assets | |||||
Total Assets | 13,216 | 12,107.7 | 13,216 | 12,107.7 | $ 12,399.2 |
Operating Segments | Servicing | |||||
Results of Operations | |||||
Servicing and subservicing fees | 237.2 | 214.5 | 469 | 426.7 | |
Gain (loss) on reverse loans held for investment and HMBS-related borrowings, net | (4.1) | (19) | 9.9 | (30.9) | |
Gain (loss) on loans held for sale, net | 15.1 | (11.5) | 13.8 | (14.2) | |
Other revenue, net | 0.3 | 0.4 | 0.8 | 0.8 | |
Revenue | 248.5 | 184.4 | 493.5 | 382.4 | |
MSR valuation adjustments, net | (50.5) | 19.3 | (121.4) | 40.4 | |
Operating expenses | 79.6 | 82.5 | 159.4 | 156.8 | |
Other income (expense): | |||||
Interest income | 5.9 | 3 | 10.1 | 7.1 | |
Interest expense | (43.3) | (22.3) | (84.8) | (45.4) | |
Pledged MSR liability expense | (73.1) | (63) | (143.4) | (122.7) | |
Earnings of equity method investee | 2.9 | 3.9 | 3.1 | 15.9 | |
Other | (3.7) | (4.3) | (3.4) | (3.6) | |
Other expense, net | (111.2) | (82.6) | (218.5) | (148.7) | |
Income (loss) before income taxes | 7.1 | 38.6 | (5.8) | 117.4 | |
Total Assets | |||||
Total Assets | 11,682.1 | 11,053.6 | 11,682.1 | 11,053.6 | 11,535 |
Operating Segments | Originations | |||||
Results of Operations | |||||
Servicing and subservicing fees | 0.4 | 0.6 | 0.8 | 1.1 | |
Gain (loss) on reverse loans held for investment and HMBS-related borrowings, net | 4.8 | 16.4 | 12 | 41.4 | |
Gain (loss) on loans held for sale, net | 10.2 | 12.5 | 14.3 | 25.3 | |
Other revenue, net | 4 | 6.7 | 7.1 | 13.5 | |
Revenue | 19.3 | 36.3 | 34.1 | 81.3 | |
MSR valuation adjustments, net | 1.6 | 2.6 | 3.5 | 3.7 | |
Operating expenses | 21.1 | 42.5 | 39.8 | 88.7 | |
Other income (expense): | |||||
Interest income | 13.1 | 6.6 | 22.1 | 9.6 | |
Interest expense | (14.1) | (5.1) | (24) | (9.4) | |
Pledged MSR liability expense | 0 | 0 | 0 | 0 | |
Earnings of equity method investee | 0 | 0 | 0 | 0 | |
Other | (0.2) | 0.3 | 0 | (1.1) | |
Other expense, net | (1.2) | 1.8 | (1.9) | (0.9) | |
Income (loss) before income taxes | (1.3) | (1.8) | (4) | (4.7) | |
Total Assets | |||||
Total Assets | 1,249.9 | 694.1 | 1,249.9 | 694.1 | 570.5 |
Operating Segments | Corporate Items and Other | |||||
Results of Operations | |||||
Servicing and subservicing fees | 0 | 0 | 0 | 0 | |
Gain (loss) on reverse loans held for investment and HMBS-related borrowings, net | 0 | 0 | 0 | 0 | |
Gain (loss) on loans held for sale, net | 0 | 0 | 0 | 0 | |
Other revenue, net | 4.2 | 1.6 | 6.2 | 3.4 | |
Revenue | 4.2 | 1.6 | 6.2 | 3.4 | |
MSR valuation adjustments, net | 0 | 0 | 0 | 0 | |
Operating expenses | (16.4) | 19.4 | (0.7) | 25.9 | |
Other income (expense): | |||||
Interest income | 1.2 | 0.1 | 2.2 | 0.2 | |
Interest expense | (10.9) | (10.4) | (21.7) | (21) | |
Pledged MSR liability expense | 0 | 0 | 0.1 | 0 | |
Earnings of equity method investee | 0 | 0 | 0 | 0 | |
Other | (0.5) | 0.7 | 0.2 | 1.2 | |
Other expense, net | (10.1) | (9.6) | (19.1) | (19.5) | |
Income (loss) before income taxes | 10.5 | (27.3) | (12.2) | (41.9) | |
Total Assets | |||||
Total Assets | 284 | 360 | 284 | 360 | $ 293.7 |
Corporate Eliminations | |||||
Results of Operations | |||||
Servicing and subservicing fees | 0 | 0 | 0 | 0 | |
Gain (loss) on reverse loans held for investment and HMBS-related borrowings, net | 0 | 0 | 0 | 0 | |
Gain (loss) on loans held for sale, net | 0 | (0.1) | 0 | (13.4) | |
Other revenue, net | 0 | 0 | 0 | 0 | |
Revenue | 0 | (0.1) | 0 | (13.4) | |
MSR valuation adjustments, net | 0 | 0.1 | 0 | 13.4 | |
Operating expenses | 0 | 0 | 0 | 0 | |
Other income (expense): | |||||
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 | |
Other | 0 | 0 | 0 | 0 | |
Other 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 Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Segment Reporting Information [Line Items] | |||||
Depreciation expense | $ 1.6 | $ 2.6 | $ 3.4 | $ 5.2 | |
Amortization of debt issuance costs and discount | 3.3 | 2.5 | 6.1 | 5.1 | |
Amortization of intangibles | 1.5 | 1.5 | 2.9 | 2.1 | |
Total Assets | 13,216 | 12,107.7 | 13,216 | 12,107.7 | $ 12,399.2 |
Servicing | |||||
Segment Reporting Information [Line Items] | |||||
Depreciation expense | 0.2 | 0.3 | 0.4 | 0.4 | |
Amortization of debt issuance costs and discount | 0.5 | 0.2 | 0.7 | 0.4 | |
Amortization of intangibles | 1.5 | 1.5 | 2.9 | 2.1 | |
Servicing | Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Total Assets | 11,682.1 | 11,053.6 | 11,682.1 | 11,053.6 | 11,535 |
Originations | |||||
Segment Reporting Information [Line Items] | |||||
Depreciation expense | 0.1 | 0.1 | 0.2 | 0.2 | |
Amortization of debt issuance costs and discount | 0 | 0 | 0 | 0 | |
Amortization of intangibles | 0 | 0 | 0 | 0 | |
Originations | Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Total Assets | 1,249.9 | 694.1 | 1,249.9 | 694.1 | 570.5 |
Corporate Items and Other | |||||
Segment Reporting Information [Line Items] | |||||
Depreciation expense | 1.3 | 2.2 | 2.9 | 4.5 | |
Amortization of debt issuance costs and discount | 2.7 | 2.3 | 5.5 | 4.7 | |
Amortization of intangibles | 0 | 0 | 0 | 0 | |
Corporate Items and Other | Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Total Assets | $ 284 | $ 360 | $ 284 | $ 360 | $ 293.7 |
Regulatory Requirements - Narra
Regulatory Requirements - Narrative (Details) - USD ($) $ in Millions | 6 Months Ended | ||
Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 | |
Public Utilities, General Disclosures [Line Items] | |||
Net worth requirement | $ 359.4 | ||
Cash and cash equivalents | 213.4 | $ 208 | |
Assets serviced | $ 197,400 | 199,600 | $ 194,500 |
Percentage of portfolio to total forward owned servicing | 7% | ||
Percentage of government-insured loans UPB to total UPB serviced and sub-serviced | 5% | ||
Owned MSRs | |||
Public Utilities, General Disclosures [Line Items] | |||
Assets serviced | $ 121,100 | $ 126,200 | $ 116,300 |
Owned MSRs | Unpaid Principal Balance | |||
Public Utilities, General Disclosures [Line Items] | |||
Assets serviced | 14,400 | ||
CA DFPI | |||
Public Utilities, General Disclosures [Line Items] | |||
Litigation Settlement, Amount Awarded to Other Party | 2.5 | ||
PHH Mortgage Corporation | |||
Public Utilities, General Disclosures [Line Items] | |||
Net worth | 565.3 | ||
Restrictive liquidity requirements | 40 | ||
Cash and cash equivalents | $ 190 |
Commitments - Narrative (Detail
Commitments - Narrative (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2023 | Dec. 31, 2022 | |
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 | $ 1,800 | $ 1,800 |
Funded amount in connection with reverse mortgage loans | 135.9 | |
Forward Mortgage Loan Interest Rate Lock Commitments | ||
Other Commitments [Line Items] | ||
Short-term commitments to lend | 1,100 | |
Reverse loans IRLCs | ||
Other Commitments [Line Items] | ||
Short-term commitments to lend | $ 16.4 | |
Customer Concentration Risk | Unpaid Principal Balance | MAV Asset Vehicle LLC | ||
Other Commitments [Line Items] | ||
Concentration risk (percent) | 16% | |
Customer Concentration Risk | Unpaid Principal Balance | Rithm Capital Corp | ||
Other Commitments [Line Items] | ||
Concentration risk (percent) | 16% | |
Customer Concentration Risk | Loan Count | MAV Asset Vehicle LLC | ||
Other Commitments [Line Items] | ||
Concentration risk (percent) | 12% | |
Customer Concentration Risk | Loan Count | Rithm Capital Corp | ||
Other Commitments [Line Items] | ||
Concentration risk (percent) | 27% | |
Customer Concentration Risk | Delinquent Loans | Rithm | ||
Other Commitments [Line Items] | ||
Concentration risk (percent) | 68% |
Commitments - Schedule of Activ
Commitments - Schedule of Activity Related to HMBS Repurchases (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Long-term Purchase Commitment [Line Items] | ||
Securitized Home Equity Conversion Mortgage-Backed Security | $ 7,368.7 | |
Long-term Purchase Commitment [Roll Forward] | ||
Beginning balance, repurchase securities, amount | 178.4 | |
Additions, repurchase securities, amount | 181.3 | $ 96.6 |
Recoveries, net, repurchase securities, amount | (164.8) | |
Transfers, repurchase securities, amount | 0 | |
Change in value, repurchase securities, amount | (2.2) | |
Ending balance, repurchase securities, amount | 192.8 | |
Maximum Claim Amount, Less Than 92% | ||
Long-term Purchase Commitment [Line Items] | ||
Securitized Home Equity Conversion Mortgage-Backed Security | 6,998.9 | |
Maximum Claim Amount, Greater than 92% and Less Than 95% | ||
Long-term Purchase Commitment [Line Items] | ||
Securitized Home Equity Conversion Mortgage-Backed Security | 194.1 | |
Maximum Claim Amount, Greater than 95% and less Than 98% | ||
Long-term Purchase Commitment [Line Items] | ||
Securitized Home Equity Conversion Mortgage-Backed Security | 175.6 | |
Active | ||
Long-term Purchase Commitment [Roll Forward] | ||
Beginning balance, repurchase securities, amount | 70.7 | |
Additions, repurchase securities, amount | 133.7 | |
Recoveries, net, repurchase securities, amount | (137.9) | |
Transfers, repurchase securities, amount | (0.6) | |
Change in value, repurchase securities, amount | 0.1 | |
Ending balance, repurchase securities, amount | 66 | |
Inactive | ||
Long-term Purchase Commitment [Roll Forward] | ||
Beginning balance, repurchase securities, amount | 107.7 | |
Additions, repurchase securities, amount | 47.6 | |
Recoveries, net, repurchase securities, amount | (26.9) | |
Transfers, repurchase securities, amount | 0.6 | |
Change in value, repurchase securities, amount | (2.2) | |
Ending balance, repurchase securities, amount | $ 126.9 |
Contingencies - Narrative (Deta
Contingencies - Narrative (Details) $ in Millions | Jun. 30, 2023 USD ($) case loan | Jun. 30, 2022 USD ($) loan | Mar. 04, 2021 count |
Loss Contingency [Abstract] | |||
Accrued penalty | $ 10.2 | ||
Number of cases | case | 5 | ||
Number of counts granted summary judgement | count | 9 | ||
Warranty repurchase demands unpaid principal balance | $ 39.1 | $ 51.9 | |
Warranty repurchase demands number of loans | loan | 142 | 270 |
Contingencies - Schedule of Ind
Contingencies - Schedule of Indemnification Obligations (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Indemnification Obligations Liability [Roll Forward] | ||||
Beginning balance | $ 41.6 | $ 49.4 | ||
Provision for (reversal of) representation and warranty obligations | 2.1 | (2.2) | ||
New production liability | 0.6 | 1.4 | ||
Charge-offs and other | (6.2) | (5.9) | ||
Ending balance | $ 38.1 | $ 42.7 | 38.1 | 42.7 |
Servicing and subservicing fees | $ 237.6 | $ 215.1 | $ 469.7 | $ 427.8 |
Subsequent Events - Narrative (
Subsequent Events - Narrative (Details) - USD ($) $ in Millions | 6 Months Ended | ||
Aug. 01, 2023 | Jun. 30, 2023 | Jun. 30, 2022 | |
Subsequent Event [Line Items] | |||
UPB of MSRs sold | $ 31.3 | $ 11,100 | |
Subsequent Event | |||
Subsequent Event [Line Items] | |||
UPB of MSRs sold | $ 6,800 |