Table of operations and reputation. Furthermore, customer and governmental authorities increasingly impose more stringent security obligations on us, our services and the security of our customers’ data and PI, and impose new liabilities for data breaches, all of which could have an adverse effect on us and our results of operations.Contents

Our business is susceptible to disruption from natural disasters or intentional acts of destruction that may render certain of our assets and business facilities unusable for an extended period of time.

Our physical facilities and technology infrastructure, including infrastructure provided by third parties, could be susceptible to disruption due to natural disasters or intentional acts of destruction that could impair or prevent our use of such facilities and infrastructure for an extended period of time. Current business continuity plans, back-up facilities and technology infrastructure may not be adequate or sufficient to remotely operate for an extended period of time, and current business interruption insurance may not be adequate to sufficiently compensate for any loss, in the event of a natural disaster or intentional act of destruction. Furthermore, certain of our assets, including our short-term investments in real estate, are concentrated in geographical areas that may be affected by natural disasters, which may result in limited access to those assets, significant damage to such assets or destruction of such assets. Interruptions in our operations for an extended period of time and/or damage or destruction of assets and facilities could have an adverse effect on our business, financial condition or results of operations.

We have long development and sales cycles for many of our services, analytics and technology solutions and if we fail to close sales after expending significant time and resources to do so, our business, financial condition and results of operations may be adversely affected.

We have long development and sales cycles for many of our services, analytics and technology solutions. We may expend significant time and resources in pursuing a particular customer that does not generate revenue or pursuing a particular service or solution for our existing customers that does not generate revenue. We may encounter delays when developing new services or technology solutions. Changes in relevant regulations or industry practices may render existing solutions or ongoing development efforts obsolete or require significant modifications. We may experience difficulties in installing or integrating our technologies on platforms used by our customers. Further, defects in our technology solutions, errors or delays in the processing of electronic transactions or other difficulties could result in interruption of business operations, delay in market acceptance, additional development and remediation costs, loss of customers, negative publicity or exposure to liability claims, and our results of operations could be adversely impacted.

~~Delays due to the length of our sales cycle or costs incurred that do not result in sales could have an adverse effect on our business, financial condition or results of operations.~~

The ~~failure of any of the~~ insurance underwriting loss limitation methods we use could ~~have adverse effects on our results.~~fail.

Altisource, through its subsidiary Association of Certified Mortgage Originators Risk Retention Group, Inc., provides certified loan insurance to its customers. Altisource reduces a portion of its risk of insurance loss through third party reinsurance. The incidence and severity of claims against insurance policies are inherently unpredictable. Although we attempt to manage our exposure to insurance underwriting risk through the use of disciplined underwriting controls and the purchase of third party reinsurance, the frequency and severity of claims could be greater than contemplated in our pricing and risk management methods and our controls and mitigation efforts may not be effective or sufficient.

We also face counterparty risk when purchasing reinsurance from third party reinsurers. The insolvency or unwillingness of any of our present or future reinsurers to contract with us or make timely payments to us under the terms of our reinsurance agreements could have an adverse effect on us. Further, there is no certainty that we will be able to purchase the amount or type of reinsurance we desire in the future or that the reinsurance we desire will be available on terms we consider acceptable or with reinsurers with whom we want to do business. ~~Any failure~~

Under certain material agreements that we are currently a party to or may enter into in the future, the formation by shareholders of ~~our insurance underwriting loss limitation methods~~Altisource of a “group” with ownership of Altisource capital stock exceeding a defined percentage may give rise to a termination event or ~~similar insurance related risks described above could adversely impact our results~~an event of ~~operations.~~default.

~~Our business and the business of our customers are subject to extensive scrutiny and regulation, and failure to comply with existing or new regulations or license requirements may adversely impact us.~~

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~~SPAM, ECOA, FACTA, FCRA, FDCPA, Fair Housing Act, the FTC Act, GLBA, HARP, HMDA, HOEPA, RPAPL, RESPA, the SAFE Act, SCRA, TCPA, TILA, UDAAP and FCPA. We are also subject, or~~we may enter into material agreements in the future ~~become subject, to various foreign laws~~that contain similar provisions. The formation of a “group” could occur without the involvement of or input by us, and ~~regulations as well, including those pertaining to data protection, such as the GDPR. These foreign, federal, state and local requirements can and do change as statutes and regulations~~we are enacted, promulgated or amended. Furthermore, the interpretation or enforcement by regulatory authorities of these requirements may change over time. The creation of new regulatory authorities or changes in the regulatory authorities overseeing applicable laws and regulations may also result in changing interpretation or enforcement of such laws or regulations. We are also subject to licensing and regulation as a provider of certain services including, among others, services as a mortgage origination underwriter, valuation provider, appraisal management company, asset manager, property manager, title insurance agent, insurance broker and underwriter, real estate broker, auctioneer, foreclosure trustee and debt collectornot in a ~~number~~position to prevent such an event from occurring. Such a change of ~~states. Our employees and subsidiaries may be required to be licensed by various state commissions for the particular type~~control could constitute a termination event or an event of service sold and to participate in regular continuing education programs. We incur significant ongoing costs to comply with licensing requirements and governmental regulations and to respond to government and regulatory confidential inquiries, audits, regulatory examinations and other similar matters. We also may lose or fail to maintain required licenses necessary to continue to do business in certain of our markets, which could have an adverse effect on our financial condition or results of operations.

Participants in the industries in which we operate are subject to a high level of government and regulatory scrutiny. This scrutiny has included review by federal and state governmental authorities of all aspects of the mortgage servicing and lending industries and the debt collection industry, including an increased legislative and regulatory focus on consumer protection practices. Our and our customers’ failure to comply with applicable laws, regulations, consent orders or settlements could subject us to civil and criminal liability, loss of licensure, damage to our reputation in the industry, significant penalties, fines, settlements, adverse publicity, litigation, including class action lawsuits or administrative enforcement actions, costs and consent orders against us or our customers that may curtail or restrict our business as it is currently conducted. If governmental authorities continue to impose new or more restrictive requirements or enhanced oversight, we may be required to increase or decrease our prices and/or we may incur significant additional costs to comply with such requirements. Also, if we are unable to adapt our products and services to conform to the new laws and regulations, or ifdefault under these laws and regulations have a negative impact on our clients, we may experience client losses or increased operating costs. Any of the foregoing outcomes could have an adverse effect on our financial condition or results of operations. Furthermore, even if we believe we complied with such laws and regulations, we may choose to settle enforcement actions or lawsuits in order to avoid the potentially significant costs of defending such actions or lawsuits and to further avoid the risk of increased damages if we ultimately were to receive an unfavorable outcome.

In addition, certain of our technology and other services are provided at the direction and pursuant to the identified requirements of our customers. The failure of our customers to properly identify or account for regulatory requirements applicable to such services could expose us to significant penalties, fines, settlements, costs and consent orders that could have an adverse effect on our financial condition or results of operations.

Periodically, we are subject to audits and examinations by federal, state and local governmental authorities and receive subpoenas, civil investigative demands or other requests for information from such governmental authorities in connection with their regulatory or investigative authority. We are currently responding to such inquiries from governmental authorities relating to certain aspects of our business, including as set forth in the Government Regulation section of Item 1 of Part I, “~~Business~~” above. Responding to such audits, examinations and inquiries will cause us to incur costs, including legal fees or other charges, which may be material in amount, and in addition, may result in management distraction or may cause us to modify or terminate certain services we currently offer. If any such audits, examinations or inquiries result in allegations or findings of non-compliance, we could incur significant penalties, fines, settlements, costs and consent orders that may curtail, restrict or otherwise have an adverse effect on our business and results of operations. Furthermore, even if we believe we complied with applicable laws and regulations, we may choose to settle such allegations with the governmental authorities in order to avoid the potentially significant costs of defending such allegations and to further avoid the risk of increased damages if we ultimately were to receive an unfavorable outcome, but such settlements may also result in further claims.

National servicing standards and federal and state government scrutiny and regulation and other requirements require very specific loan modification and foreclosure procedures among others that have further reduced the number of loans entering the foreclosure process and have negatively impacted our default services revenue and profit. It is unclear when or if volumes will increase in the future.

Our customers are subject to government regulation, requiring our customers to, among other things, oversee their vendors and maintain documentation that demonstrates their oversight. If our performance does not meet such requirements, our results of operations could be adversely affected.

Our customers are subject to a variety of federal, state and local government regulations, including the Bank Service Company Act and those promulgated by the CFPB and others, as well as consent orders and settlements, including the National Mortgage

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Settlement. The foregoing may require our customers to oversee their vendors and document the procedures performed to demonstrate that oversight. Altisource, as a vendor, is subject to oversight by our customers. If we do not meet the standards established by or imposed upon our customers or if any other oversight procedures result in a negative outcome for Altisource, we may lose customers, may no longer be granted referrals for certain services, or may have to conform our business to address these standards, negatively impacting our business and results of operations. Even if Altisource satisfies its contractual obligations to its clients, regulators may allege that products or services provided by Altisource fail to meet applicable regulatory requirements.

The tax regulations, and the interpretation thereof, in the countries, states and local jurisdictions in which we operate periodically change, which may impact our results of operations associated with higher taxes.

Certain of our subsidiaries provide services in the United States and several countries internationally. Those jurisdictions are subject to changing tax environments, which may result in higher operating expenses and/or taxes and which may introduce uncertainty as to the application of tax laws and regulations to our operations. We may not be able to raise our prices to customers or pass-through such taxes to our customers or vendors, which could adversely affect our results of operations. In addition, if we fail to accurately anticipate or apply tax laws and regulations to our operations, we could be subject to liabilities and penalties.agreements.

We rely on third party vendors for many aspects of our business. If our vendor oversight activities are ineffective, we may fail to meet customer or regulatory ~~requirements or we~~requirements. We may face difficulties sourcing required vendors or managing our relationships with third party ~~vendors, our results of operations could be adversely affected.~~vendors.

We rely on third party vendors to provide goods and services in relation to many aspects of our ~~operations.~~operations, including certain providers of web-based services or software as services. Our dependence on these vendors makes our operations vulnerable to the unavailability of such third parties, the pricing and quality of services offered by such third parties, solvency of those third parties and such third parties’ failure to perform adequately under our agreements with them. In addition, where a vendor provides services that we are required to provide under a contract with a ~~client,~~customer, we are generally responsible for such performance and could be held accountable by the ~~client~~customer for any failure of performance by our vendors. ~~We evaluate~~If our vendor sourcing efforts are not effective or if we are otherwise not able to secure an appropriate supply and quality of vendors and services, or if vendors are prohibited or prevented from performing the ~~competency and solvency~~services or providing the products for which we contract, including as the result of ~~our key third party vendors. We perform ongoing vendor oversight activities~~restrictions imposed by state or local governments or health departments, we may be unable to ~~identify potential new vendors, review vendor pricing and to identify any performance~~provide services or ~~other issues related to current vendors.~~compliant services. If our vendor oversight activities are ineffective or if a vendor fails to provide the services that we require or expect, or fails to meet contractual requirements, such as service levels or compliance with applicable laws, the failure could negatively impact our business by adversely affecting our ability to serve our customers ~~and/~~or subjecting us to litigation and regulatory risk for ineffective vendor oversight. Furthermore, the failure to obtain services at anticipated pricing could impact our cost structure and the prices of services we provide. In addition, Altisource may be contractually required by its customers or by applicable regulations to oversee its vendors and document procedures performed to demonstrate that oversight. If we fail to meet such customer or regulatory requirements, or we face difficulties managing our relationships with third party vendors, we may lose customers or may no longer be granted referrals for certain services or could be subject to adverse regulatory ~~action, negatively impacting~~action.

We make extensive use of contractors in certain of our lines of business. If we are required to reclassify contractors as employees, we may incur fines and penalties and additional costs and taxes.

A significant number of contractors provide services in our operations for whom we do not pay or withhold any federal, state or local employment tax or provide employee benefits. These contractors may be retained by us or retained by vendors providing services to us. There are a number of tests used in determining whether an individual is an employee or a contractor. There can be no assurance that legislative, judicial or regulatory (including tax) authorities will not introduce proposals or assert interpretations of existing rules and regulations that would change, or at least challenge, the classification of our contractors. Although we believe we have properly classified our contractors, and require our vendors to property classify contractors used in connection with providing services to us, the United States Internal Revenue Service or other United States federal or state authorities or similar authorities of a foreign government may determine that we or our vendors have misclassified our contractors for employment tax or other purposes and, as a result, seek additional taxes from us, require us to pay certain

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compensation or benefits to wrongly classified employees, or attempt to impose fines or penalties. In addition, contractors may assert claims that they are our employees and seek to recover compensation, benefits, damages and penalties from us. If we are required to pay employer taxes, pay backup withholding compensation, benefits, damages or penalties with respect to prior periods with respect to or on behalf of our contractors or those of our vendors, our operating costs will increase.

We could have conflicts of interest with Ocwen, NRZ, and/or certain of our shareholders, members of management, employees and members of our Board of Directors, which may be resolved in a manner adverse to us.

We have significant business relationships with and provide services to Ocwen and to NRZ. Certain members of our management and independent members of our Board of Directors (or entities affiliated with such Board of Directors members) have direct or beneficial equity interests in Ocwen or in NRZ, including in one instance, equity interests in Ocwen (slightly less than 10%) and Altisource (approximately 24%) as well as debt of both of these parties, and equity interests in NRZ (less than 1%). Such interests could create, or appear to create, potential conflicts of interest with respect to matters potentially or actually involving or affecting us and Ocwen or NRZ. There can be no assurance that we will implement measures that will enable us to manage potential conflicts with Ocwen or NRZ. There can be no assurance that any current or future measures that may be implemented to manage potential conflicts will be effective or that we will be able to manage or resolve all potential conflicts with Ocwen or NRZ, and, even if we do, that the resolution will be no less favorable to us than if we were dealing with another third party that has none of the connections we have with Ocwen or NRZ.

Further, certain employees, directors and officers have, and may continue to hold interests in, non-wholly owned subsidiaries. Their ownership of these interests may divert their time and attention away from operating our business and may otherwise create or appear to create potential conflicts of interest with us. There can be no guarantee that we will be able to continue to implement appropriate measures to manage these potential conflicts of interest.

Our success depends on the relevant industry experience and relationships of certain members of our Board of Directors, executive officers and other key personnel.

Our success is dependent on the efforts and abilities of members of our Board of Directors, our executive officers and other key employees, many of whom have significant experience in the real estate and mortgage, financial services and technology industries or play a substantial role in our relationship with certain customers. In particular, we are dependent on the services of members of our Board of Directors and key executives at our corporate headquarters and personnel at each of our lines of business and support groups. In addition, certain members of our Board of Directors, executive officers or other key employees have relationships with certain customers or vendors that facilitate our business and operations. The loss of the services of any of these members of our Board of Directors, executives or key personnel could have an adverse effect on our business and results of ~~operations. Such failures could adversely affect~~operations or relationships with certain customers or vendors.

To maintain our substance and leadership as a Luxembourg company, we seek to convene Board meetings in Luxembourg several times each year and our executive management is largely based in Luxembourg. The travel required by our directors, and current restrictions on and requirements to such travel, to Luxembourg may serve as an impediment to attract and retain directors and director candidates. Our Luxembourg location can also make it difficult to attract and retain executive officers and other senior leadership.

We may face difficulties to attract, motivate and retain skilled employees.

Our business is labor intensive and places significant importance on our ability to recruit, engage, train and retain skilled employees. Additionally, demand for qualified professionals with experience in certain businesses (e.g. residential title, valuation and loan underwriting) or technologies may exceed available supply. Our ability to recruit and train employees is critical to achieving our growth objective. Further, some of our business operations require recruiting and retaining employees with certain professional licenses, particularly in the ~~reliability~~United States. In 2020, we saw an increase demand for professionals licensed to work in our originations and ~~quality~~default business, and significant turnover in that area. Our originations business may continue to encounter significant challenges in attracting and retaining employees as needed to satisfy demand or growth expectations for our services, or to be able to limit compensation related costs to make operations economically viable. We may not be able to attract and retain skilled employees, we may face an increase in wages or other costs of attracting, training or retaining skilled employees.

The presence of our operations in multiple countries subject us to risks endemic to those countries.

We have employees and operations outside of the US in countries such as Luxembourg, India and Uruguay. The occurrence of natural disasters, epidemics or other health emergencies, or political or economic instability impacting these countries could interfere with work performed by these labor sources or could result in us having to replace or reduce these labor sources.

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customers in the United States. Governmental authorities may attempt to prohibit or otherwise discourage our United States-based customers from sourcing services from foreign companies and, as a result, some of our customers may require us to use labor based in the United States or cease doing business with Altisource. In addition, some of our customers may require us to use labor based in the United States for other reasons. To the extent that we are required to use labor based in the United States, we may not be able to pass on the increased costs of higher-priced United States-based labor to our customers.

Risks Related to our Growth Strategy

We may be unable to realize sales represented by our awarded business or sales pipeline.

We have significantly expanded the scope of services that we provide to our existing customer base and expanded our customer portfolio with the addition of several new customers. As part of our business and financial planning, we make assumptions about the quantity and timing of services that each of these customers will order from us. In many instances, however, our customers may not be obligated to acquire our services or may only be obligated to acquire our services to the extent the customer can make use of such services. Our volume of sales may not materialize to the extent our customers elect to use providers of services other than us, or if economic or industry conditions exist such that our clients do not require the assumed quantity of services. For example, economic conditions and restrictions instituted by governmental authorities, GSEs, servicers or investors in response to the COVID-19 pandemic may negatively impact the quantity or timing of customer demand for our services despite the existence of an agreement. Our customers may use more than one provider for given services resulting in such customers varying over time the quantity or mix of services acquired from us versus other providers. Even in cases where our customer contracts require minimum purchases by a customer, we may be unable or we may determine that it is unadvisable for us to seek to enforce or collect upon the contractual minimums.

We may fail to adapt our services to changes in technology or in the marketplace related to mortgage servicing or originations, changing requirements of governmental authorities, GSEs and customers. Customers may seek to reduce reliance upon or the number of service providers.

The markets for our services are characterized by constant technological and other changes, our customers’ and competitors’ frequent introduction of new services, and evolving industry standards and government regulations. We are currently in the process of, and from time to time will be, developing and introducing new services and technologies and improvements to existing services. Our future success will be significantly affected by our ability to complete our current efforts and in the future enhance, our services and develop and introduce new services that address the increasingly sophisticated needs of our customers and ~~could adversely affect our results of operations.~~

~~If financial institutions at which we hold cash and cash equivalents~~their customers, as well as ~~escrow~~our ability to reduce costs by relying on cloud architecture and ~~trust funds fail, it could have an adverse impact on~~other infrastructure advancements. These efforts may include implementing new real estate auction and marketing capabilities, as well as technological and other modifications to increase efficiency and flexibility in supplying our ~~Company.~~

~~We hold our cash~~default-related and ~~cash equivalents at various financial institutions.~~originations services. These initiatives carry the risks associated with any new service development effort, including cost overruns, delays in delivery and performance effectiveness. There can be no assurance that we will be successful in developing, marketing, selling and implementing new and improved services. In addition, we ~~hold customers’~~may experience difficulties that could delay or prevent the successful development, introduction and marketing of these services. Our services and their enhancements may also not adequately meet the demands of the marketplace or governmental authorities and achieve market acceptance.

Customers of our default-related services and origination services may seek to reduce the number of service providers employed through vendor consolidation, insourcing (providing the services itself) or by other means. Such changes could reduce the demand for our services or control over the prices we are able to charge for our services.

Acquisitions to accelerate growth initiatives involve potential risks.

Historically, our strategy has included the acquisition of complementary businesses from time to time. In the future, we may consider acquisitions of or merger with other businesses that could complement our business, offer us greater access in our current markets or offer us greater access and expertise in other asset types and markets that are related to ours but we do not currently serve. Our ability to pursue additional acquisitions in the future is dependent on our access to sufficient capital (equity and/or debt) to fund the acquisition and subsequent integration. Because of the obligations to maintain a minimum cash threshold in the Cooperative Brokerage Agreement and restrictions in our senior secured term loan agreement, we may not be able to secure adequate capital as needed on terms that are acceptable to us, or at all.

When we acquire new businesses, we may face a number of integration risks, including a loss of focus on our daily operations, the need for additional management, constraints on operating resources, constraints on financial resources from integration and system conversion costs and the inability to maintain key pre-acquisition relationships with customers, suppliers and employees. We may have particular integration risks as we are a Luxembourg-domiciled company, resulting in numerous changes that may need to be made immediately or promptly following closing of such an acquisition. In addition, any acquisition may result in the incurrence of additional amortization expense of related intangible assets, which could reduce our profitability.

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Failure to properly and timely integrate any acquired business may result in ~~escrow~~our inability to realize the expected value from the acquisition, which can lead us to sell or otherwise dispose of the acquired business at a loss.

Risks Related to our Industry

Changes in the housing or mortgage originations markets could negatively impact demand for our services.

A decrease in sales of residential properties in the United States could reduce the demand for certain of our services provided in connection with the marketing and ~~trust accounts at various financial institutions~~sale of real estate, including services ancillary to the sale, such as closing services and title insurance services. In addition, reduced demand for residential property could depress the price of sales that do occur, negatively impacting commissions and other fees we receive which are set as a percentage of the property sale price.

Reductions in the volume of residential mortgage originations in the United States could decrease the demand for mortgage originations and mortgage insurance related products, including services provided to members of the Lenders One mortgage cooperative.

A reduction in residential mortgage delinquencies, defaults or foreclosures in the United States can negatively affect demand for certain of our services.

We provide certain services to residential mortgage servicers and subservicers, as well as government sponsored entities, federal agencies and others, to protect, preserve, manage and potentially dispose of properties securing residential mortgage loans, when such loans become delinquent, default, undergo foreclosure or become a REO asset. Rates of residential mortgage delinquencies, defaults and foreclosures can be negatively impacted by numerous factors, including strengthening economic conditions, a reduction in the number of residential mortgages outstanding or a reduction in home ownership levels or by governmental action. National servicing standards, federal and state government scrutiny and regulation, requirements specifying loan loss mitigation, modification and foreclosure procedures, rules instituted by governmental authorities, GSEs, servicers or investors preventing actions related to loan delinquencies and foreclosures, including moratoriums on foreclosures and mortgage payment forbearance plans, such as those implemented in response to the COVID-19 pandemic, among others may reduce the number of mortgage loans entering the foreclosure process and suspend pending ~~completion~~foreclosure and eviction actions. If these conditions continue, they would likely negatively impact demand for our default services. The expiration dates of certain real estate activities. We also hold cash in trust accounts at various financial institutions where contractual obligations mandate maintaining dedicated bank accounts. These amounts are held in escrow and trust accounts for limited periods of ~~time and are not included~~these requirements may be indefinite or extended in the ~~accompanying consolidated balance sheets. We~~future making it difficult to predict when such requirements may ~~become liable~~end. Reductions in the rates of residential mortgage delinquencies, defaults, foreclosures and REO would likely reduce demand for ~~funds owed~~our services related to ~~third parties~~inspecting, maintaining, valuing, marketing and selling such assets.

If faced with an extended period of decline in demand for and revenue from certain of our services as a result of economic conditions or due to government, GSE, servicer or investor restrictions related to loan delinquencies and foreclosures, including moratoriums on foreclosures and mortgage payment forbearance plans, such as those implemented in response to the ~~failure~~COVID-19 pandemic, we may be unable to sufficiently adjust our cost structure to avoid losses in our operations that provide such impacted services or to maintain our ability to offer those services in the future. In response to such conditions, we may be required to modify or suspend such operations which could negatively impact our ability to timely respond to an increase in demand for such services or to provide such services in the future, or which could cause us to incur significant expense to restart or scale such services in response to an increase in demand.

Developments that reduce the supply or sale of ~~one or more of these financial institutions, in addition to loss~~REO could negatively affect demand for certain of our ~~cash~~services and ~~cash equivalents,~~negatively impact our ability to meet certain contractual performance metrics.

Reduction in the supply of REO or sales of REO in the United States could reduce the demand for and ~~there is no guarantee~~volume of certain of our services, including REO asset management, REO property inspection and preservation, real estate brokerage and real estate auction and marketing services, as well as sales of REO, especially in cases where more desirable properties are sold at foreclosure auctions and do not convert to REO. For example, we ~~would recover~~anticipate that the ~~funds deposited, whether~~continuation of foreclosure and eviction moratoriums will reduce the supply of REO we receive from our customers through ~~Federal Deposit Insurance Corporation coverage, private insurance~~2021. The reduction in the supply of REO or sales of REO could also impact our ability to meet certain contractually required service metrics, including those related to aging of assets, time on market and sale price compared to valuation. If we fail to satisfy applicable performance metrics or perform in a manner satisfactory to our customers, such customers may reduce the services they acquire from us or otherwise terminate us as a service provider.

Risks Related to Financing, Our Indebtedness and Capital Structure

If we are unable to generate sufficient cash flow or access the capital markets or our ~~results~~borrowing capacity is reduced, our liquidity and competitive position may be negatively affected.

An extended period of ~~operations~~reduced demand for our default-related services or for our higher margin default-related services could negatively impact our cash flow such that we may need to use unrestricted cash on hand to satisfy our obligations, which would

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reduce our cash balance negatively impacting our liquidity. If the limitations on foreclosures and evictions, and the forbearance plans, instituted by governmental authorities, GSEs, servicers or investors in response to the COVID-19 pandemic are extended, this could lengthen the period of reduced demand for our default-related services and continue to negatively impact our higher margin default related services, negatively impacting our liquidity.

In addition, our liquidity could be adversely ~~impacted.~~affected by any inability to access the capital markets, volatility in the capital markets, unforeseen outflows of cash, funding for contingencies and increased regulatory liquidity requirements.

Our ability to borrow money could be limited, or our cost of borrowing could increase, due to volatility in the capital markets, worsening terms on which credit is available or limitations in our senior secured term loan agreements. In addition, reduced revenue or cash flow, or volatility in the markets which we support, could negatively impact our ability to borrow or our ability to continue to satisfy the covenants and terms of our senior secured term loan agreements. If we were to have a covenant default under our loan agreements, we would not be able borrow additional funds under our existing agreements and our lenders could seek to enforce the remedies available to them under our loan agreements. A reduction in our ability to borrow funds to support our operations could also reduce our ability to pursue our business strategy to diversify and grow our customer base.

We ~~generate~~have a significant ~~cash from~~net operating loss recognized by one of our operations that is deposited into our operating accounts at banks and also, in connection with debt collections (in our Other Businesses, Corporate and Eliminations segment) and real estate transactions (Mortgage Market and Real Estate Market segments), in escrow and trust accounts, which exposes us to risk of loss due to fraudulent or inadvertent misappropriation of cash.

Luxembourg subsidiaries, Altisource S.à r.l. We hold our cash and cash equivalents at various financial institutions. In addition, we hold customers’ assets in escrow and trust accounts at various financial institutions pending completion of certain real estate activities. These cash balances expose us to purposeful misappropriation of cash by employees or others and unintentional mistakes resulting in a loss of cash which may not be ~~recoverable.~~able to fully utilize this deferred tax asset before the net operating loss expires.

In connection with a merger of two of the Company’s wholly-owned subsidiaries in December 2017, which was recognized at fair value, a net operating loss of $1.3 billion with a 17 year life was generated, creating a deferred tax asset of $342.6 million. During 2019, the Company recognized a full valuation allowance with respect to this deferred tax asset. If Altisource S.à r.l. is unable to generate sufficient pretax income by 2034, the Company may not be able to fully utilize this deferred tax asset. In addition, ~~we may become liable for funds owed to third parties as a result~~changes in our structure or operations could prevent us from fully realizing the benefit of such ~~purposeful misappropriation of cash by employees or others and unintentional mistakes resulting in a loss of cash held in escrow and trust accounts, and there~~

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~~is no guarantee we would recover the lost funds from the party or parties involved in a fraudulent or inadvertent misappropriation of cash and our results of operations could be adversely impacted.~~deferred tax asset.

Our primary source of liquidity is cash flows from operations. ~~We seek to deploy cash generated in a disciplined manner, including to repurchase and repay our senior secured term loan and, from time to time, repurchase shares~~Our level of ~~our common stock. We may not continue to deploy cash as we have in the past.~~

While we have historically used cash from operations to repurchase and repay our senior secured term loan and repurchase shares of our common stock, there is no guarantee that we will continue to do so or that we will do so at attractive prices. Furthermore, there is no guarantee that cash from operations will be available for repurchasing our senior secured term loan and repurchasing shares of our common stock. Also, we may not repurchase our senior secured term loan and common stock at the same levels as in the past. In addition, while the Company has not historically declared dividends, the Company may decide in the future to declare a dividend rather than, or in addition to, repurchasing our senior secured term loan and/or repurchasing shares of our common stock. If we continue such repurchases or declare a dividend, we may not have sufficient cash for other opportunities that may arise.

~~We may be subject to claims of legal violations or wrongful conduct which may cause us to pay unexpected litigation costs, damages or indemnifications, or modify our products or processes.~~

From time to time, we may be subject to costly and time-consuming regulatory or legal proceedings that claim legal violations or wrongful conduct. These proceedings may involve regulators, clients, our clients’ customers, vendors, competitors and/or other large groups of plaintiffs and, if resulting in findings of violations, could result in substantial damages or indemnification obligations. Additionally, we may be forced to settle some claims and change existing company practices, services and processes that are currently revenue generating. This could lead to unexpected costs or a loss of revenue and our results of operations could be adversely impacted. Furthermore, even if we believe we have no liability for the alleged regulatory or legal violations or wrongful conduct, we may choose to settle such regulatory or legal proceedings in order to avoid the potentially significant costs of defending such allegations and to further avoid the risk of increased damages if we ultimately were to receive an unfavorable outcome.

~~Our senior secured term loan~~debt makes us ~~more~~ sensitive to the effects of ~~economic change;~~our declining financial performance and interest rate increases; our level of debt and provisions in our senior secured term loan agreement could limit our ability to react to changes in the economy or our industry.

Our senior secured term loan makes us more vulnerable to changes in our results of operations because a portion of our cash flows from operations is dedicated to servicing our debt and is not available for other purposes. Our senior secured term loan is secured by virtually all of our assets and from time to time ~~trades~~may trade at a substantial discount to face value. Our ability to raise additional debt is largely limited and in many circumstances would be subject to lender approval and would require modification of ~~our current~~certain senior secured term loan ~~agreement.~~agreements. Additionally, increases in interest rates above 1% will negatively impact our cash flows as the interest rate on our debt is variable. The provisions of our senior secured term loan ~~agreement~~agreements could have other negative consequences to us including the following:

•limiting our ability to borrow money for our working capital, capital expenditures and debt service requirements or other general corporate purposes;

•limiting our flexibility in planning for, or reacting to, changes in our operations, our business or the industry in which we compete;

•requiring us to use a portion of our consolidated excess cash flow, as ~~defined~~specified in the ~~debt agreement,~~senior secured term loan agreements, to repay debt in the event our net debt less marketable securities to ~~EBITDA ratios,~~earnings before interest, taxes, depreciation and amortization (“EBITDA”) ratio, as ~~defined~~specified in the ~~debt agreement,~~senior secured term loan agreements, exceed certain thresholds; and

•placing us at a competitive disadvantage by limiting our ability to invest in our business.

Our ability to make payments on our indebtedness depends, in part, on our ability to generate cash in the future. If we do not generate sufficient cash flows and do not have sufficient cash on hand to meet our debt service and working capital requirements, we may need to seek additional financing, raise equity or sell ~~assets.~~assets, and our ability to take these actions may be limited by the terms of our senior secured term loan. This may make it more difficult for us to obtain financing on terms that are acceptable to us, or at all. Without any such financing, ~~or equity issuance,~~ we could be forced to sell assets under unfavorable circumstances to make up for any shortfall in our payment ~~obligations under unfavorable circumstances.~~obligations. If necessary, we may not be able to sell assets quickly enough or for sufficient amounts to enable us to meet our obligations. Failure to meet our debt service requirements could result in an event of default under our senior secured term loan agreement which, if not cured or waived, could result in the holders of the defaulted debt causing all outstanding amounts with respect to that debt to be immediately due and ~~payable.~~payable and potentially permitting lenders to execute applicable security interests, impacting our future operations or ability to engage in other favorable business activities.

In addition, ~~our~~certain senior secured term loan ~~agreement contains~~agreements contain covenants that may limit our flexibility in planning for, or reacting to changes in, our business and our industry, including limitations on incurring additional indebtedness, making investments, adding new product lines, disposing or selling of assets, granting liens and merging or consolidating with other

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companies. Complying with these covenants may impair our ability to finance our future operations or capital needs or to engage in other favorable business activities.

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Our failure to comply with the covenants or terms contained in our senior secured term loan ~~agreement,~~agreements, including as a result of events beyond our control, could result in an event of ~~default which could adversely affect our operating results and our financial condition.~~default.

Our senior secured term loan ~~agreement requires~~agreements require us to comply with various operational, reporting and other covenants or terms including, among other things, limiting us from engaging in certain types of transactions. If ~~there were~~we experience an event of default under our senior secured term loan ~~agreement~~agreements that ~~was~~is not cured or waived, it could result in a going concern uncertainty, which in turn could provide certain of our clients the ability to terminate our agreements, and allows the holders of the defaulted debt ~~could~~to cause all amounts outstanding with respect to that debt to be immediately due and ~~payable. There~~payable or choose to execute on applicable security interests. Our assets or cash flows may not be sufficient to fully repay borrowings under our outstanding senior secured term loan if accelerated upon an event of default and we may not be able to refinance or restructure the payments on the senior secured term loan.

We may be unable to repay the balance of our senior secured term loan upon maturity in April 2024, particularly if cash from operations declines, assets are not readily available for sale or we are unable to refinance on favorable terms or at all.

Our senior secured term loan agreements require us to repay the outstanding balance due in April 2024 ($247.2 million, based on scheduled repayments through the maturity date). If our cash from operations declines, there can be no assurance that our cash balances and other assets ~~or cash flows~~readily available for sale would be sufficient to fully repay borrowings under our outstanding senior secured term loan ~~either~~ upon maturity ~~or if accelerated, upon an event of default~~in April 2024 or that we ~~would~~will be able to refinance ~~or restructure~~ the ~~payments~~remaining portion of the debt prior to the due date. If we were to default on the senior secured term ~~loan.~~loan, our lenders could take action adverse to our interests under the terms of the loan agreement, including seeking to take possession of the applicable collateral. Under such circumstances, if we are not able to agree upon a resolution with our lenders, we might seek applicable legal protections including under bankruptcy law, which in turn could provide certain of our clients the ability to terminate our agreements. If we refinance the loan under less favorable terms, we may be more constrained in our ability to finance and operate our business.

Our failure to maintain ~~certain~~the net debt less marketable securities to EBITDA ~~ratios~~ratio contained in our senior secured term loan ~~agreement~~agreements could result in required payments to the lenders of a percentage of our excess cash ~~flows, which could adversely affect our ability to use our excess cash flows for other purposes.~~flows.

Our senior secured term loan ~~agreement requires~~agreements require us to distribute to our lenders 50% of our consolidated excess cash flows, as ~~defined~~specified in the senior secured term loan ~~agreement,~~agreements, if our net debt less marketable securities to EBITDA ratio, as defined in the senior secured term loan ~~agreement, exceeds~~agreements, exceed 3.50 to 1.00, and 25% of our consolidated excess cash flows if our net debt less marketable securities to EBITDA ratio is 3.50 to 1.00 or less, but greater than 3.00 to 1.00. If we were required to distribute a portion of our excess cash flows to our lenders, we may be limited in our ability to support our business, grow our business through acquisitions or investments in technology and we may be limited in our ability to repurchase our common ~~stock.~~stock, pay dividends or take other potentially advantageous actions. There can be no assurance that we will maintain net debt less marketable securities to EBITDA ~~ratios~~ratio at levels that will not require us to distribute a portion of our excess cash flows to lenders.

If we fail to maintain proper and effective internal controls, our ability to prepare accurate and timely financial statements could be impaired, which could adversely affect investor confidence in our reported financial information.

We may discover areas of our internal controls that need improvement. We cannot be certain that we will be successful in implementing or maintaining adequate internal control over our financial reporting and financial processes. The existence of material weaknesses in our internal control over financial reporting could materially adversely affect our ability to comply with applicable financial reporting requirements.

We have significant investments in goodwill and intangible assets recorded as a result of prior acquisitions and an impairment of these assets would require a write-down that would reduce our net income.

As a result of prior investments we have made, we significant goodwill and intangible assets recorded in our financial statements. Goodwill and intangible assets are assessed for impairment annually or sooner if circumstances indicate a possible impairment. Factors that could lead to impairment of goodwill and intangible assets include significant under-performance relative to historical or projected future operating results, a significant decline in our stock price and market capitalization and negative industry or economic trends, among other indications of impairment. In the event that the recorded values of goodwill and intangible assets are impaired, any such impairment would be charged to earnings in the period of impairment. In the event of significant volatility in the capital markets or a worsening of current economic conditions, we may be required to record an impairment charge, which would negatively impact our results of operations. Possible future impairment of goodwill and intangible assets may have a material adverse effect on our business, results of operations and financial condition.

~~Risks Related to our Growth Strategy~~

~~Our ability to grow is affected by our ability to execute on our strategic businesses, retain and expand our existing customer relationships and our ability to attract new customers.~~

~~Our ability to retain existing customers and expand those relationships and attract new customers is subject to a number of risks including the risk that we do not:~~

~~execute on our strategic businesses;~~

~~maintain or improve the quality and compliance of services we provide to our customers;~~

~~meet or exceed the expectations of our customers;~~

~~successfully leverage our existing customer relationships to sell additional services; and~~

~~attract new customers.~~

If our efforts to execute on our strategic businesses, retain and expand our customer relationships and attract new customers do not prove effective, it could have an adverse effect on our business and results of operations and our ability to maintain and grow our operations.

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Our ability to expand existing relationships and attract new customers is also affected by broader economic factors and the strength of the overall housing market, which can reduce demand for our services and increase competition for each customer’s business, and our results of operations could be adversely ~~impacted. See “The economy and the housing market can~~ affect ~~demand for our services.”~~

If we do not adapt our services to changes in technology or in the marketplace, changing requirements of governmental authorities, GSEs and clients or if our ongoing efforts to upgrade our technology and particularly our efforts to complete development of our technology are not successful, we could lose customers and have difficulty attracting new customers for our services, which could have an adverse effect on our business and results of operations.

~~The markets for~~Cash, cash equivalents and escrow funds we hold at financial institutions could be lost and not recoverable.

We hold our ~~services are characterized~~cash and cash equivalents at various financial institutions, including customer deposits in escrow accounts pending completion of certain real estate activities. These cash balances expose us to purposeful misappropriation of cash by ~~constant technological change, our customers’~~employees or others and ~~competitors’ frequent introduction~~unintentional mistakes resulting in a loss of new services and evolving industry standards and government regulation. We are currently in the process of, and from time to time will be, developing and introducing new technologies and improvements to existing technologies. Our future success will be significantly affected by our ability to complete our current efforts and in the future enhance, primarily through use of automation, econometrics and behavioral science principles, our services and develop and introduce new services that address the increasingly sophisticated needs of our customers and their customers. These initiatives carry the risks associated with any new service development effort, including cost overruns, delays in delivery and performance effectiveness. There can be no assurance that we will be successful in developing, marketing and selling new and improved technologies and services. In addition, we may experience difficulties that could delay or prevent the successful development, introduction and marketing of these services. Our services and their enhancements may also not adequately meet the demands of the marketplace or governmental authorities and achieve market acceptance. Finally, certain prices that we can charge may be dictated by GSEs and/or our large clients and wecash which may not be ~~able~~recoverable.

Amounts that are held in escrow accounts for limited periods of time are not included in the accompanying consolidated balance sheets. We may become liable for funds owed to ~~reduce our vendor costs in order to maintain our profitability for those services. Any~~third parties as a result of purposeful misappropriation of cash by employees or others, unintentional mistakes or the failure of one or more of these ~~results could~~financial institutions. There is no guarantee

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we would recover the funds deposited, whether through Federal Deposit Insurance Corporation coverage, private insurance or otherwise.

Foreign Exchange

We have ~~a negative impact on our financial condition~~operations in India, Luxembourg and ~~results of operations and our ability to maintain and grow our operations.~~

~~Our ability to meet our growth objectives is dependent on the timing and market acceptance of our new service offerings.~~

Our ability to grow may be adversely affected by difficulties or delays in service development or the inability to gain market acceptance of new services to existing and new customers. There are no guarantees that new services will prove to be commercially successful and our results of operations could be adversely impacted.

~~Some of our businesses are dependent on outsourcing.~~

Our continued growth at historical rates for some of our businesses is dependent on industry participants accepting of outsourcing. Organizations may elect to perform such services themselves or may be prevented from outsourcing services. A significant change in our customers’ preference or ability to outsource could have an adverse effect on our continued growth and our results of operations.

~~Acquisitions to accelerate growth initiatives involve potential risks.~~

Our strategy has included the acquisition of complementary businesses from time to time. During 2016, we acquired Granite Loan Management of Delaware, LLC (“Granite”). During 2015, we acquired CastleLine Holdings, LLC and its subsidiaries (“CastleLine”) and GoldenGator, LLC (doing business as RentRange) (“RentRange”), REIsmart, LLC (doing business as Investability) (“Investability”) and Onit Solutions, LLC, a support company for RentRange and Investability (collectively “RentRange and Investability”). During 2014, we acquired certain assets and assumed certain liabilities of Mortgage Builder Software, Inc. (“Mortgage Builder”) and acquired certain assets and assumed certain liabilities of Owners Advantage, LLC (“Owners”).

In the future, we may consider acquisitions of other businesses that could complement our business, offer us greater access in our current markets or offer us greater access and expertise in other asset types and markets that are related to ours but we do not currently serve. Our ability to pursue additional acquisitions in the future is dependent on our access to sufficient capital (equity and/or debt) to fund the acquisition and subsequent integration. We may not be able to secure adequate capital as needed on terms that are acceptable to us, or at all, and our ability to secure such capital through debt financing is limited by our senior secured term loan agreement.

When we acquire new businesses, we may face a number of integration risks, including a loss of focus on our daily operations, the need for additional management, constraints on operating resources, constraints on financial resources from integration and system conversion costs and the inability to maintain key pre-acquisition relationships with customers, suppliers and employees. In addition, any acquisitionUruguay which may result in ~~the incurrence of additional amortization expense of related intangible assets, which could reduce our profitability. Our failure~~us being party to ~~effectively pursue~~non-United States dollar denominated transactions or ~~integrate acquisitions, and such acquisitions themselves, may have an adverse effect on our financial condition or results of operations.~~

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~~Risks Related to International Business~~

~~Our international operations subject us to additional risks which could have an adverse effect on our results of operations.~~

~~We have attempted to control our operating expenses by utilizing lower cost labor~~incurring obligations in foreign countries such as India, the Philippines and Uruguay. As of December 31, 2017, 5,930 of our employees were based in India, the Philippines and Uruguay. These countries are subject to relatively higher degrees of political and social instability and may lack the infrastructure to withstand political unrest or natural disasters. The occurrence of natural disasters or political or economic instability in these countries could interfere with work performed by these labor sources, or could result in our having to replace or reduce these labor sources. Such disruptions could decrease efficiency, increase our costs and have an adverse effect on our financial condition or results of operations.

Furthermore, the practice of utilizing labor based in foreign countries has come under increased scrutiny in the United States. Governmental authorities could seek to impose financial costs or restrictions on foreign companies providing services to customers in the United States. Governmental authorities may attempt to prohibit or otherwise discourage our United States-based customers from sourcing services from foreign companies and, as a result, some of our customers may require us to use labor based incurrencies other than the United States ~~or cease doing business with Altisource. In addition, some of our customers may require us to use labor based in the United States~~dollar, including, for other reasons. To the extent that we are required to use labor based in the United States, we may not be able to pass on the increased costs of higher-priced United States-based labor to our customers, which ultimately could have an adverse effect on our results of operations.

The FCPA and other applicable anti-corruption laws and regulations prohibit certain types of payments by our employees, vendors and agents. Any violation of the applicable anti-corruption laws or regulations by us, our subsidiaries or our local agents, could expose us to significant penalties, fines, settlements, costs and consent orders that may curtail or restrict our business as it is currently conducted and could have an adverse effect on our financial condition or results of operations.

example, payroll, taxes, facilities-related expenses. Weakness of the United States dollar in relation to these applicable currencies (e.g., Euro, Indian rupee, Uruguayan peso) may increase our costs.

Risks Relating to Luxembourg Organization and Ownership of Our Shares

We are a Luxembourg company. The rights of shareholder under Luxembourg law may differ in certain respects from the ~~currencies used~~rights afforded to shareholders of companies organized under laws in ~~these foreign countries~~other jurisdictions. It may also ~~reduce the savings achievable through this strategy and could have an adverse effect on our financial condition or our results of operations.~~

~~Altisource is a Luxembourg company and it may~~ be difficult to obtain and enforce judgments against itus or ~~its~~our directors and executive officers.

~~Altisource is~~We are a public limited liability company organized under the laws of, and headquartered in, Luxembourg. As a result, Luxembourg law and ~~the~~our articles of incorporation govern the rights of shareholders. The rights of shareholders under Luxembourg law may differ from the rights of shareholders of companies incorporated in other jurisdictions. A significant portion of ~~the~~our assets ~~of Altisource~~ are owned outside of the United States. It may be difficult for our investors to obtain and enforce, in the United States, judgments obtained in United States courts against ~~Altisource~~us or ~~its~~our directors based on the civil liability provisions of the United States securities laws or to enforce, in Luxembourg, judgments obtained in other jurisdictions including the United States.

A significant challenge of the Luxembourg tax regime or of its interpretation by the Luxembourg tax authorities, or ~~others~~its application of us or our business could ~~adversely affect our results of operations.~~negative impact us.

~~The Company~~We received and historically operated under a tax ruling from the Luxembourg tax authorities, which would have expired in 2019 unless extended or renewed. In connection with an internal reorganization by the Company during 2017, ~~the Company~~we no longer ~~operates~~operate under ~~the~~this tax ruling. The European Commission (“EC”) has initiated investigations into several EU member states, including Luxembourg, to determine whether these EU member states have provided tax advantages to companies pursuant to tax rulings or otherwise on a basis not allowed by the EU. While the EC’s investigations continue, it has concluded that certain companies in certain EU member states, including Luxembourg, have been provided such tax advantages. The EC is requiring these EU member states to recover from certain companies the prior year tax benefits they received. ~~Such~~

Risks Relating to Regulation

Our business and the business of our customers are subject to extensive scrutiny and legal requirements. We, or our services, may fail or be perceived as failing to comply with applicable legal requirements.

Our business and the business of our customers are subject to extensive scrutiny and regulation by federal, state and local governmental authorities including the FTC, the CFPB, the SEC, HUD and state and local agencies, including those which license or oversee certain of our auction, real estate brokerage, mortgage services, trustee services, residential mortgage origination services and insurance services. We also must comply with a ~~development~~number of federal, state and local consumer protection laws including, among others, the laws and regulations listed in the Government Regulation section of Item 1 of Part I, “Business” above. We are also subject to various foreign laws and regulations based on our operations or the location of our affiliates as well, including those pertaining to data protection, such as the GDPR. These foreign, federal, state and local requirements can and do change as statutes and regulations are enacted, promulgated or amended. Furthermore, the interpretation or enforcement by regulatory authorities of these requirements may change over time or may not be predictable or consistent with our interpretations or expectations. The creation of new regulatory authorities or changes in the regulatory authorities overseeing applicable laws and regulations may also result in changing interpretation or enforcement of such laws or regulations.

If governmental authorities impose new or more restrictive requirements or enhanced oversight related to our services, we may be required to increase or decrease our prices, modify our contracts or course of dealing and/or we may incur significant additional costs to comply with such requirements. Additionally, we may be unable to adapt our services to conform to the new laws and regulations.

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in allegations or findings of non-compliance, we could incur significant penalties, fines, settlements, costs and consent orders that may curtail, restrict or otherwise have an adverse effect on our ~~financial condition~~business.

Regulatory inquiries or determinations of failures to comply with applicable requirements could increase our costs and expose us to sanctions which could include limitations on our ability to provide services, or otherwise reduce demand for our services. Furthermore, even if we believe we comply with applicable laws and regulations, we may choose to settle such allegations in order to avoid the potentially significant costs of defending such allegations and to further avoid the risk of increased damages if we ultimately were to receive an unfavorable outcome, but such settlements may also result in further claims or create issues for existing and potential customers. Such settlements and additional actions could increase costs, place limitations on our services, and result in a reduction in demand.

From time to time, we may be subject to costly and time-consuming regulatory or legal proceedings that claim legal violations or wrongful conduct, including claims for violations of consumer protection laws, laws concerning PI or third party intellectual property rights. These proceedings may involve regulators, customers, our customers’ clients, vendors, competitors, third parties or other large groups of plaintiffs and, if resulting in findings of violations, could result in substantial damages or indemnification obligations. Additionally, we may be forced to settle some claims and change our existing practices, services processes or technologies that are currently revenue generating. Certain regulations to which we are subject provide for potentially significant penalties such that even if we believe we have no liability for the alleged regulatory or legal violations or wrongful conduct, we may choose to settle such regulatory or legal proceedings in order to avoid the potentially significant costs of defending such allegations and to further avoid the risk of increased damages if we ultimately were to receive an unfavorable outcome; however, such settlements may also result in further claims or create issues for existing and potential customers. Such proceedings and settlement could increase our costs and expose us to sanctions, including limitations on our ability to provide services, or otherwise reduce demand for our services.

We are subject to licensing and regulation as a provider of certain services. If we fail to maintain our licenses or if our licenses are suspended or terminated, we may not be able to provide certain of our services. In addition, the lack of certain licenses in one or more jurisdictions could cause us to breach applicable contracts.

We are required to have and maintain licenses as a provider of certain product and services including, among others, services as a residential mortgage origination underwriter, valuation provider, appraisal management company, asset manager, property manager, title insurance agent, insurance broker and underwriter, real estate broker, auctioneer and foreclosure trustee in a number of jurisdictions. Our employees and subsidiaries may be required to be licensed by various state or regulatory commissions or bodies for the particular type of product or service provided and to participate in regular continuing education programs. If one or more of our licenses are lost, revoked, expire or limited, or if we fail to maintain or otherwise surrender one or more such license, we may be prohibited from doing business in certain markets. Further, certain of our agreements require that we possess and maintain certain licenses. The failure to hold such licenses may result in us breaching certain agreements, which could cause us to be subject to claims for damages, termination of applicable agreements or unable to obtain inputs required for certain of our services.

A violation by our customers of applicable legal requirements in the selection or use of our services could generate legal liability for us.

Certain of our services are provided at the direction and pursuant to the identified requirements of our customers, including property preservation, inspection, foreclosure and eviction services that are triggered by information provided by our customers. The failure of our customers to properly identify or account for regulatory requirements applicable to the use of our services, in selecting appropriate services for the intended purposes, or in specifying how services are rendered could expose us to significant penalties, fines, litigation, settlements, costs and consent orders.

Certain of our customers are subject to governmental oversight, regulations, orders, judgments or settlements which may impose certain obligations and limitations on their use of our services.

Participants in the industries in which we operate are subject to a high level of oversight and regulation. The failure of our services to meet applicable legal requirements could subject us to civil and criminal liability, loss of licensure, damage to our reputation, significant penalties, fines, settlements, adverse publicity, litigation, including class action lawsuits or administrative enforcement actions, costs and consent orders against us or our customers that may curtail or restrict our business as it is currently conducted. Such failures could also cause customers to reduce or cease using our services.

Certain of our customers are subject to vendor oversight requirements. As such, we are subject to oversight by our customers. If we do not meet the standards established by or imposed upon our customers, regulators allege that products or services provided by Altisource fail to meet applicable legal requirements, or if any other oversight procedures result in a negative outcome for Altisource, we may lose customers, may no longer be granted referrals for certain services, or may have to conform our business to address these standards.

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The tax regulations, and the interpretation thereof, in the countries, states and local jurisdictions in which we operate periodically change, which may adversely affect our results due to higher taxes, interest and penalties, or our inability to utilize tax credits available to us.

Certain of ~~operations.~~

~~In the fourth quarter of 2017,~~our subsidiaries provide services in the United States ~~amended its~~and several other countries. Those jurisdictions are subject to changing tax ~~code~~environments, which ~~resulted~~may result in higher operating expenses or taxes and which may introduce uncertainty as to the ~~reduction~~application of ~~the United States corporate~~ tax ~~rate. This tax code amendment will likely change our consolidated effective income tax rate, including compared~~laws and regulations to our ~~competitors,~~operations. Furthermore, we may determine that we owe additional taxes or may be required to pay taxes for services provided in prior periods as interpretations of tax laws and regulations are clarified or revised. Changes in laws concerning sales tax, gross recipient tax, dividends, retained earnings, application of operating or other losses, and intercompany transactions and loans, among others, could impact us. We may not be able to raise our prices to customers or pass-through such taxes to our customers or vendors in response to changes, which could adversely affect our results of operations.

~~This significant change~~ If we fail to accurately anticipate or apply tax laws and regulations to our operations, we could be subject to liabilities and penalties. We may be unable to take advantage of operating losses or other tax credits to the full extent available or at all due to changes in ~~the United States~~ tax ~~code that resulted in the reduction of the United States corporate tax rate could reduce the effective tax rate of some of~~regulations or our competitors. A reduction in the effective tax rate of some of our competitors may put us at a competitive disadvantage. Such disadvantage and potential loss of customers could have an adverse effect on our financial condition and results of operations.

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Our consolidated effective income tax rate for financial reporting purposes may change periodically due to the creation and our ability to utilize net operating loss and tax credit carryforwards, changes in enacted tax rates and fluctuations in the mix of income earned from our domestic and international operations, and could adversely affect our financial condition and results of operations.

~~Risks Related to Our Employees~~

~~Our success depends on our directors, executive officers and other key personnel.~~

Our success is dependent on the efforts and abilities of our directors, executive officers and other key employees, many of whom have significant experience in the real estate and mortgage, financial services and technology industries. In particular, we are dependent on the services of our Board of Directors and key executives at our corporate headquarters and personnel at each of our segments. The loss of the services of any of these directors, executives or key personnel, for any reason, could have an adverse effect upon our business, financial condition and results of operations.

~~Our inability to attract, motivate and retain skilled employees may adversely impact our business.~~

Our business is labor intensive and places significant importance on our ability to recruit, engage, train and retain skilled employees. Additionally, demand for qualified technical and software professionals conversant in certain technologies may exceed supply as new and additional skills are required to keep pace with evolving computer technology. Our ability to recruit and train employees is critical to achieving our growth objective. Our inability to attract and retain skilled employees or an increase in wages or other costs of attracting, training or retaining skilled employees could have an adverse effect on our business, financial condition and results of operations.

~~Risks Related to Our Relationships~~

We could have conflicts of interest with Ocwen, Front Yard Residential Corporation (formerly Altisource Residential Corporation) (“RESI”), Altisource Asset Management Corporation (“AAMC”) and certain members of our management, which may be resolved in a manner adverse to us.

We have significant business relationships with and provide services to Ocwen and RESI. We also provide certain services to AAMC. Our largest shareholder, William C. Erbey, owns or controls common stock in each of Altisource, Ocwen, RESI and AAMC, RESI’s external manager. As of December 31, 2017, based on public filings, Mr. Erbey reported beneficially owning or controlling approximately 34% of the common stock of Altisource, approximately 15% of the common stock of Ocwen, less than 5% of the common stock of RESI and approximately 46% of the common stock of AAMC. In addition, based on public filings through February 16, 2018, Mr. Erbey reported beneficially owning or controlling approximately 34% of the common stock of Altisource, approximately 8% of the common stock of Ocwen, less than 5% of the common stock of RESI and approximately 46% of the common stock of AAMC. Certain members of our management and independent members of our Board of Directors have equity interests in Ocwen, RESI and/or AAMC. Such ownership interests could create, or appear to create, potential conflicts of interest with respect to matters potentially or actually involving or affecting us and Ocwen, RESI and AAMC, as the case may be.

We believe we have practices designed to manage potential conflicts with respect to our dealings with Ocwen, RESI and AAMC, where necessary, including a management review process of the terms of material transactions with these companies and review and approval of such transactions by our Audit Committee, which is comprised of independent directors. There can be no assurance that we will always be able to implement such measures or that such measures will be effective, that we will be able to manage or resolve all potential conflicts with these companies, and, even if we do, that the resolution will be no less favorable to us than if we were dealing with a third party that has none of the connections we have with these companies.


~~ITEM 1B.~~	~~UNRESOLVED STAFF COMMENTS~~

ITEM 1B.UNRESOLVED STAFF COMMENTS

None.

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~~ITEM 2.~~	~~PROPERTIES~~

ITEM 2. PROPERTIES

Our principal executive offices are located in leased office space in Luxembourg, Grand Duchy of Luxembourg. ~~A summary of our~~Our principal leased ~~office space~~offices in other countries as of December 31, ~~2017~~2020 include four offices in the United States and ~~the segments primarily occupying~~one office each ~~location is as follows:~~



	~~Mortgage Market~~	~~Real Estate Market~~	~~Other Businesses, Corporate and Eliminations~~

~~Luxembourg~~	X	X	X

~~United States~~
~~Atlanta, GA~~	X	X	X
~~Boston, MA~~	X		X
~~Denver, CO~~	X	X
~~Endicott, NY~~			X
~~Fort Washington, PA~~	X		X
~~Irvine, CA~~	X
~~Los Angeles, CA~~	X		X
~~Plano, TX~~	X	X	X
~~Sacramento, CA~~			X
~~Southfield, MI~~	X
~~St. Louis, MO~~	X	X	X
~~Tempe, AZ~~			X

~~Montevideo, Uruguay~~	X		X

~~Pasay City, Philippines~~	X	X	X

~~India~~
~~Bangalore~~	X	X	X
~~Mumbai~~	X	X	X

in India and Uruguay.

We do not own any office facilities. We consider these facilities to be suitable and currently adequate for the management and operations of our businesses.


~~ITEM 3.~~	~~LEGAL PROCEEDINGS~~

ITEM 3.LEGAL PROCEEDINGS

Litigation

We are currently involved in legal actions in the course of our business, some of which seek monetary damages. We do not believe that the outcome of these proceedings, both individually and in the aggregate, will have a material impact on our financial condition, results of operations or cash flows.

Regulatory Matters

Periodically, we are subject to audits, examinations and investigations by federal, state and local governmental authorities and receive subpoenas, civil investigative demands or other requests for information from such governmental authorities in connection with their regulatory or investigative authority. We are currently responding to such inquiries from governmental authorities relating to certain aspects of our business. We believe it is premature to predict the potential outcome or to estimate any potential financial impact in connection with these inquiries.

As previously disclosed, Altisource received a NORA letter on November 10, 2016 from the CFPB indicating that the CFPB is considering a potential enforcement action against Altisource relating to an alleged violation of federal law focused on REALServicing and certain other technology services provided to Ocwen, including claims related to the features, functioning and support of such technology. The NORA process provides the recipient an opportunity to present its positions to the CFPB before an enforcement action is recommended or commenced. On December 5, 2016, we provided a written response to the NORA letter setting forth the legal, policy and factual reasons why we believe an enforcement action is not warranted. We are committed to resolving any potential concerns of the CFPB. If the CFPB were to bring an enforcement action against us, the resolution of such action could have a material adverse impact on our business, reputation, financial condition and results of operations. However,

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~~we believe it is premature to predict the potential outcome or to estimate any potential financial impact in connection with any potential CFPB enforcement action.~~

Our businesses are also subject to extensive regulation which may result in regulatory proceedings or actions against us. For further information, see Item 1A of Part I, “Risk Factors” above and Note 2325 to the consolidated financial statements.


~~ITEM 4.~~	~~MINE SAFETY DISCLOSURES~~

ITEM 4.MINE SAFETY DISCLOSURES

Not applicable.

Table of Contents

PART II


~~ITEM 5.~~	~~MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES~~

ITEM 5.MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

Our common stock is listed on the NASDAQ Global Select Market under the symbol “ASPS.” ~~The following table sets forth the high and low close of day sales prices for our common stock, for the periods indicated, as reported by the NASDAQ Global Select Market:~~

2017
Quarter Ended Low High

March 31 $ 21.96
$ 36.85
June 30 17.92
45.02
September 30 19.79
27.65
December 31 24.90
29.48

2016
Quarter Ended Low High

March 31 $ 19.16
$ 35.69
June 30 24.21
31.29
September 30 23.20
33.90
December 31 24.09
32.91

The number of holders of record of our common stock as of ~~February 16, 2018~~March 5, 2021 was ~~76. The~~336. We believe the number of beneficial shareholders is substantially greater than the number of holders as a large portion of our common stock is held through brokerage firms.

Dividends

We have not historically declared or paid cash dividends on our common stock, but may declare dividends in the future. Under Luxembourg law, shareholders need to approve certain dividends. Such approval typically occurs during a company’s annual meeting of shareholders. Luxembourg law imposes limits on our ability to pay dividends based on annual net income and net income carried forward, less any amounts placed in reserve. The provisions of our senior secured term loan agreement, as amended, also limit our ability to pay dividends.

~~Table of Contents~~

Stock Performance Graph

The graph below compares the cumulative total stockholder return on our common stock with the cumulative total return on the S&P 500 Index and the NASDAQ Composite Index for the five year period ending on December 31, ~~2017.~~2020. The graph assumes an investment of $100 at the beginning of this period. The comparisons in the graph below are based upon historical data and are not indicative of, nor intended to forecast, future performance of our common stock.


	12/31/15		6/30/16		12/31/16		6/30/17		12/31/17		6/30/18		12/31/18		6/30/19		12/31/19		6/30/20		12/31/20

Altisource	$	100.00	$	100.11	$	95.61	$	78.46	$	100.68	$	104.89	$	80.87	$	70.69	$	69.51	$	53.00	$	46.31
S&P 500 Index	100.00		102.69		109.54		118.57		130.81		133.00		122.65		143.93		158.07		151.68		183.77
NASDAQ Composite Index	100.00		96.71		107.50		122.63		137.86		149.98		132.51		159.89		179.19		200.88		257.38

12/31/12 6/30/13 12/31/13 6/30/14 12/31/14 6/30/15 12/31/15 6/30/16 12/31/16 6/30/17 12/31/17

Altisource $ 100.00
$ 108.83
$ 183.07
$ 132.23
$ 39.00
$ 35.53
$ 32.09
$ 32.13
$ 30.69
$ 25.18
$ 32.31
S&P 500 Index 100.00
112.63
129.60
137.45
144.36
144.66
143.31
147.17
156.98
169.92
187.47
NASDAQ Composite Index 100.00
112.71
138.32
145.99
156.85
165.15
165.84
160.38
178.28
203.36
228.63

Table of Contents

Securities Authorized for Issuance under Equity Compensation Plans

The information required by this item is incorporated herein by reference to our definitive proxy statement in connection with our ~~2018~~2021 annual meeting of shareholders to be filed pursuant to Regulation 14A under the ~~Securities~~ Exchange ~~Act of 1934.~~Act.

Issuer Purchases of Equity Securities

On May ~~17, 2017,~~15, 2018, our shareholders approved the renewal and replacement of the share repurchase program previously approved by the shareholders on May ~~18, 2016, which replaced~~17, 2017. Under the ~~previous share repurchase program. We~~program, we are authorized to purchase up to ~~4.6~~4.3 million shares of our common stock, based on a limit of 25% of the outstanding shares of common stock on the date of approval, at a minimum price of $1.00 per share and a maximum price of $500.00 per share, for a period of five years from the date of approval. As of December 31, ~~2017,~~2020, approximately ~~3.4~~2.4 million shares of common stock remain available for repurchase under the program. ~~We purchased 1.6 million~~There were no purchases of shares of common stock during the year ended December 31, 2020. We purchased 1.0 million shares at an average price of ~~$23.84~~$20.33 per share during the year ended December 31, ~~2017, 1.4~~2019 and 1.6 million shares at an average price of ~~$26.81~~$25.53 per share during the year ended December 31, ~~2016 and 2.1 million shares at an average price of $27.60 per share during the year ended December 31, 2015.~~2018. Luxembourg law limits share repurchases to the balance of Altisource Portfolio Solutions S.A. (unconsolidated parent company) retained earnings, less the value of shares repurchased. As of December 31, ~~2017,~~2020, we can repurchase up to approximately ~~$178~~$91 million of our common stock under Luxembourg law. Our ~~senior secured term loan~~Credit Agreement also limits the amount we can spend on share repurchases, which limit was approximately ~~$446~~$430 million as of December 31, ~~2017,~~2020, and may prevent repurchases in certain ~~circumstances.~~

circumstances, including if our leverage ratio exceeds 3.50 to 1.00. Our leverage ratio exceeded 3.50 to 1.00 during the year ended December 31, 2020.

Table of Contents

~~The following table presents information related to the repurchases of our equity securities during the three months ended December 31, 2017:~~

Period
Total number of shares purchased ⁽¹⁾
Weighted average price paid per share
Total number of shares purchased as part of publicly announced plans or programs⁽²⁾

Maximum number of shares that may yet be purchased under the plans or programs⁽²⁾

Common stock:
October 1 – 31, 2017 53,662
$ 25.82
53,662
3,892,883
November 1 – 30, 2017 213,257
26.42
213,257
3,679,626
December 1 – 31, 2017 256,675
27.20
256,675
3,422,951

523,594
$ 26.74
523,594
3,422,951


⁽¹⁾	~~In addition to the repurchases included in the table above, 2,905 common shares were withheld from employees to satisfy tax withholding obligations that arose from the vesting of restricted shares.~~


⁽²⁾	On May 17, 2017, our shareholders approved the renewal of the share repurchase program originally approved by the shareholders on May 18, 2016, which replaced the previous share repurchase program and authorizes us to purchase up to 4.6 million shares of our common stock in the open market, subject to certain parameters.

~~Table of Contents~~


~~ITEM 6.~~	~~SELECTED FINANCIAL DATA~~

ITEM 6.SELECTED FINANCIAL DATA

The ~~following~~ selected financial data as of and for the years ended December 31, 2020, 2019, 2018, 2017 ~~2016, 2015, 2014~~ and ~~2013~~2016 has been derived from our audited consolidated financial statements. The historical results ~~presented below~~ may not be indicative of our future performance.

The selected consolidated financial data should be read in conjunction with the information contained in Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and notes thereto in Item 8 of Part II, “Financial Statements and Supplementary Data.”


	For the years ended December 31,
(in thousands, except per share data)	2020		2019		2018		2017		2016

Revenue	$	365,547	$	648,651	$	838,202	$	942,213	$	997,303
Cost of revenue	305,194		493,256		622,165		699,865		690,045
Gross profit	60,353		155,395		216,037		242,348		307,258
Operating expenses (income):
Selling, general and administrative expenses	92,736		141,076		175,670		192,642		214,155
Gain on sale of businesses	—		(17,814)		(13,688)		—		—
Restructuring charges	11,972		14,080		11,560		—		—
Litigation settlement loss, net of $4,000 insurance recovery	—		—		—		—		28,000
(Loss) income from operations	(44,355)		18,053		42,495		49,706		65,103
Other income (expense), net:
Interest expense	(17,730)		(21,393)		(26,254)		(22,253)		(24,412)
Unrealized gain (loss) on investment in equity securities(1)	4,004		14,431		(12,972)		—		—
Other income (expense), net	375		1,348		(1,870)		7,922		3,630
Total other income (expense), net	(13,351)		(5,614)		(41,096)		(14,331)		(20,782)

(Loss) income before income taxes and non-controlling interests	(57,706)		12,439		1,399		35,375		44,321
Income tax (provision) benefit	(8,609)		(318,296)		(4,098)		276,256		(12,935)

Net (loss) income	(66,315)		(305,857)		(2,699)		311,631		31,386
Net income attributable to non-controlling interests	(841)		(2,112)		(2,683)		(2,740)		(2,693)

Net (loss) income attributable to Altisource	$	(67,156)	$	(307,969)	$	(5,382)	$	308,891	$	28,693

(Loss) income per share:
Basic	$	(4.31)	$	(19.26)	$	(0.32)	$	16.99	$	1.53
Diluted	$	(4.31)	$	(19.26)	$	(0.32)	$	16.53	$	1.46

Weighted average shares outstanding:
Basic	15,598		15,991		17,073		18,183		18,696
Diluted	15,598		15,991		17,073		18,692		19,612

Outstanding shares (at December 31)	15,664		15,454		16,276		17,418		18,774

Non-GAAP Financial Measures(2)
Adjusted net (loss) income attributable to Altisource	$	(29,121)	$	21,802	$	42,609	$	55,617	$	94,884
Adjusted diluted (loss) earnings per share	$	(1.87)	$	1.34	$	2.43	$	2.98	$	4.84
Adjusted EBITDA	$	10,243	$	70,800	$	118,279	$	130,687	$	184,501

For the years ended December 31,
(in thousands, except per share data) 2017 2016 2015 2014 2013

Revenue $ 942,213
$ 997,303
$ 1,051,466
$ 1,078,916
$ 768,357
Cost of revenue 699,865
690,045
687,327
707,180
492,480
Gross profit 242,348
307,258
364,139
371,736
275,877
Selling, general and administrative expenses 192,642
214,155
220,868
201,733
113,810
Litigation settlement loss, net of $4,000
insurance recovery —
28,000
—
—
—
Impairment losses —
—
71,785
37,473
—
Change in the fair value of Equator^® Earn Out
—
—
(7,591 ) (37,924 ) —
Income from operations 49,706
65,103
79,077
170,454
162,067
Other income (expense), net:
Interest expense (22,253 ) (24,412 ) (28,208 ) (23,363 ) (20,291 )
Other income (expense), net 7,922
3,630
2,191
174
557
Total other income (expense), net (14,331 ) (20,782 ) (26,017 ) (23,189 ) (19,734 )

Income before income taxes and non-controlling interests 35,375
44,321
53,060
147,265
142,333
Income tax benefit (provision) 276,256
(12,935 ) (8,260 ) (10,178 ) (8,540 )

Net income 311,631
31,386
44,800
137,087
133,793
Net income attributable to non-controlling interests (2,740 ) (2,693 ) (3,202 ) (2,603 ) (3,820 )

Net income attributable to Altisource $ 308,891
$ 28,693
$ 41,598
$ 134,484
$ 129,973

Earnings per share:
Basic $ 16.99
$ 1.53
$ 2.13
$ 6.22
$ 5.63
Diluted $ 16.53
$ 1.46
$ 2.02
$ 5.69
$ 5.19

Weighted average shares outstanding:
Basic 18,183
18,696
19,504
21,625
23,072
Diluted 18,692
19,612
20,619
23,634
25,053

Outstanding shares (at December 31) 17,418
18,774
19,021
20,279
22,629

Transactions with related parties included above:
Revenue $ —
$ —

N/A⁽¹⁾

$ 666,800
$ 502,087
Cost of revenue —
—

N/A⁽¹⁾

38,610
19,983
Selling, general and administrative expenses —
—

N/A⁽¹⁾

(268 ) 569
Other income —
—

N/A⁽¹⁾

—
773

Non-GAAP Financial Measures⁽²⁾

Adjusted net income attributable to Altisource $ 52,306
$ 90,095
$ 143,475
$ 169,141
$ 156,458
Adjusted diluted earnings per share $ 2.80
$ 4.59
$ 6.96
$ 7.16
$ 6.25
Adjusted EBITDA $ 126,432
$ 178,313
$ 219,732
$ 234,197
$ 205,137



Luxembourg						98-0554932
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)



Large accelerated filer o ☐			Accelerated filer þ ☑
Non-accelerated filer o ~~(Do not check if a smaller reporting company)~~ ☐			Smaller reporting company o ☐
			Emerging growth company o ☐


					Page
PART I
			ITEM 1.	BUSINESS	3
			ITEM 1A.	RISK FACTORS	12
			ITEM 1B.	UNRESOLVED STAFF COMMENTS	24
			ITEM 2.	PROPERTIES	24
			ITEM 3.	LEGAL PROCEEDINGS	24
			ITEM 4.	MINE SAFETY DISCLOSURES	24

						~~Page~~
~~PART I~~
	~~ITEM 1.~~	~~BUSINESS~~	3
	~~ITEM 1A.~~	~~RISK FACTORS~~	10
	~~ITEM 1B.~~	~~UNRESOLVED STAFF COMMENTS~~	21
	~~ITEM 2.~~	~~PROPERTIES~~	22
	~~ITEM 3.~~	~~LEGAL PROCEEDINGS~~	22
	~~ITEM 4.~~	~~MINE SAFETY DISCLOSURES~~	23

PART II
			ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	2425
			ITEM 6.	SELECTED FINANCIAL DATA	27
			ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	3234
			ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	5953
			ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	6054
			ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	~~101~~93
			ITEM 9A.	CONTROLS AND PROCEDURES	~~101~~93
			ITEM 9B.	OTHER INFORMATION	~~101~~93

PART III
			ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	~~102~~94
			ITEM 11.	EXECUTIVE COMPENSATION	~~102~~94
			ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	~~102~~94
			ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	~~102~~94
			ITEM 14.	PRINCIPAL ACCOUNTING FEES AND SERVICES	~~102~~94

PART IV
			ITEM 15.	EXHIBITS, FINANCIAL STATEMENT SCHEDULES	~~103~~95
			SCHEDULE II.	VALUATION AND QUALIFYING ACCOUNTS	~~108~~101

			SIGNATURES		~~109~~102



	2017	2016	2015

Mortgage Market	67%	65%	66%
Real Estate Market	1%	—%	9%
Other Businesses, Corporate and Eliminations	11%	27%	37%
Consolidated revenue	58%	56%	60%



	United States	India	Philippines	Uruguay	Luxembourg	Consolidated Altisource

Mortgage Market	745	2,964	177	8	4	3,898
Real Estate Market	167	199	140	1	5	512
Other Businesses, Corporate and Eliminations	565	1,951	361	129	12	3,018

Total employees	1,477	5,114	678	138	21	7,428



(Mark One)
þ☑			ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



o☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



~~• Property preservation and inspection services~~ ~~• Real estate brokerage and auction services~~ ~~• Title insurance (agent and related services) and settlement services~~ ~~• Appraisal management services and broker and non-broker valuation services~~ ~~• Foreclosure trustee services~~ ~~• Residential and commercial loan servicing technologies~~		~~• Vendor management, marketplace transaction management and payment management technologies~~ ~~• Document management platform~~ ~~• Default services (real estate owned (“REO”), foreclosure, bankruptcy, eviction) technologies~~ ~~• Mortgage charge-off collections~~ ~~• Residential and commercial loan disbursement processing, risk mitigation and construction inspection services~~



~~• Title insurance (agent and related services) and settlement services~~ ~~• Appraisal management services and broker and non-broker valuation services~~ ~~• Fulfillment services~~ ~~• Loan origination system~~		~~• Document management platform~~ ~~• Certified loan insurance and certification~~ ~~• Vendor management oversight platform~~ ~~• Mortgage banker cooperative management~~ ~~• Mortgage trading platform~~



~~• Real estate brokerage doing business as Owners.com~~^® ~~• Title insurance (agent and related services) and settlement services~~		~~• Mortgage brokerage~~ ~~• Homeowners insurance~~



~~• Property preservation and inspection services~~ ~~• Real estate brokerage and auction services~~ ~~• Data solutions~~ ~~• Title insurance (agent and related services) and settlement services~~		~~• Buy-renovate-lease-sell~~ ~~• Renovation services~~ ~~• Property management services~~ ~~• Appraisal management services and broker and non-broker valuation services~~


•	~~Selected by 7 lenders in 2017 and early 2018 to provide platform solutions including loan fulfillment services, loan processing services, or CastleLine~~^® ~~certification and insurance services~~



	2017
Quarter Ended	Low		High

March 31	$	21.96	$	36.85
June 30	17.92		45.02
September 30	19.79		27.65
December 31	24.90		29.48



	12/31/12		6/30/13		12/31/13		6/30/14		12/31/14		6/30/15		12/31/15		6/30/16		12/31/16		6/30/17		12/31/17

Altisource	$	100.00	$	108.83	$	183.07	$	132.23	$	39.00	$	35.53	$	32.09	$	32.13	$	30.69	$	25.18	$	32.31
S&P 500 Index	100.00		112.63		129.60		137.45		144.36		144.66		143.31		147.17		156.98		169.92		187.47
NASDAQ Composite Index	100.00		112.71		138.32		145.99		156.85		165.15		165.84		160.38		178.28		203.36		228.63



Period	Total number of shares purchased ⁽¹⁾	Weighted average price paid per share		Total number of shares purchased as part of publicly announced plans or programs⁽²⁾	Maximum number of shares that may yet be purchased under the plans or programs⁽²⁾

Common stock:
October 1 – 31, 2017	53,662	$	25.82	53,662	3,892,883
November 1 – 30, 2017	213,257	26.42		213,257	3,679,626
December 1 – 31, 2017	256,675	27.20		256,675	3,422,951

	523,594	$	26.74	523,594	3,422,951



	December 31,
(in thousands)	2017		2016		2015		2014		2013

Cash and cash equivalents	$	105,006	$	149,294	$	179,327	$	161,361	$	130,324
Available for sale securities	49,153		45,754		—		—		—
Accounts receivable, net	52,740		87,821		105,023		112,183		104,787
Premises and equipment, net	73,273		103,473		119,121		127,759		87,252
Goodwill	86,283		86,283		82,801		90,851		99,414
Intangible assets, net	120,065		155,432		197,003		245,246		276,162
Total assets	865,164		689,212		721,798		780,122		723,365
Long-term debt, net (including current portion)	409,281		473,545		528,178		580,515		388,569
Total liabilities	525,179		627,018		669,528		738,679		565,624


⁽²⁾	~~These are non-GAAP measures that are defined and reconciled to the corresponding GAAP measures on pages 29 to 31.~~


~~ITEM 7.~~	~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~


(in thousands, except per share data)	2020			% Increase (decrease)	2019			% Increase (decrease)	2018

Service revenue	$	347,313		(44)	$	621,866		(23)	$	805,480
Reimbursable expenses	16,285			(33)	24,172			(20)	30,039
Non-controlling interests	1,949			(25)	2,613			(3)	2,683
Total Revenue	365,547			(44)	648,651			(23)	838,202
Cost of Revenue	305,194			(38)	493,256			(21)	622,165
Gross profit	60,353			(61)	155,395			(28)	216,037
Operating expenses (income):
Selling, general and administrative expenses	92,736			(34)	141,076			(20)	175,670
Gain on sale of businesses	—			(100)	(17,814)			30	(13,688)
Restructuring charges	11,972			(15)	14,080			22	11,560
(Loss) income from operations	(44,355)			(346)	18,053			(58)	42,495
Other income (expense), net:
Interest expense	(17,730)			(17)	(21,393)			(19)	(26,254)
Unrealized gain (loss) on investment in equity securities	4,004			(72)	14,431			211	(12,972)
Other income (expense), net	375			(72)	1,348			172	(1,870)
Total other income (expense), net	(13,351)			138	(5,614)			(86)	(41,096)

(Loss) income before income taxes and non-controlling interests	(57,706)			N/M	12,439			N/M	1,399
Income tax provision	(8,609)			(97)	(318,296)			N/M	(4,098)

Net loss	(66,315)			(78)	(305,857)			N/M	(2,699)
Net income attributable to non-controlling interests	(841)			(60)	(2,112)			(21)	(2,683)

Net loss attributable to Altisource	$	(67,156)		(78)	$	(307,969)		N/M	$	(5,382)

Margins:
Gross profit/service revenue	17		%		25		%		27		%
(Loss) income from operations/service revenue	(13)		%		3		%		5		%

Loss per share:
Basic	$	(4.31)		(78)	$	(19.26)		N/M	$	(0.32)
Diluted	$	(4.31)		(78)	$	(19.26)		N/M	$	(0.32)

Weighted average shares outstanding:
Basic	15,598			(2)	15,991			(6)	17,073
Diluted	15,598			(2)	15,991			(6)	17,073



		For the year ended December 31, 2017
(in thousands)		Mortgage Market			Real Estate Market			Other Businesses, Corporate and Eliminations			Consolidated Altisource
	��
Revenue
Service revenue		$	754,058		$	86,821		$	58,682		$	899,561
Reimbursable expenses		36,886			2,966			60			39,912
Non-controlling interests		2,740			—			—			2,740
		793,684			89,787			58,742			942,213
Cost of revenue		545,507			96,967			57,391			699,865
Gross profit (loss)		248,177			(7,180		)	1,351			242,348
Selling, general and administrative expenses		114,215			18,718			59,709			192,642
Income (loss) from operations		133,962			(25,898		)	(58,358		)	49,706
Total other income (expense), net		72			(4		)	(14,399		)	(14,331		)

Income (loss) before income taxes and non-controlling interests		$	134,034		$	(25,902	)	$	(72,757	)	$	35,375

Margins:
Gross profit (loss)/service revenue		33		%	(8		)%	2		%	27		%
Income (loss) from operations/service revenue		18		%	(30		)%	(99		)%	6		%



	For the year ended December 31, 2016
(in thousands)	Mortgage Market			Real Estate Market			Other Businesses, Corporate and Eliminations			Consolidated Altisource

Revenue
Service revenue	$	774,514		$	84,805		$	83,280		$	942,599
Reimbursable expenses	50,117			1,785			109			52,011
Non-controlling interests	2,693			—			—			2,693
	827,324			86,590			83,389			997,303
Cost of revenue	546,540			64,566			78,939			690,045
Gross profit	280,784			22,024			4,450			307,258
Selling, general and administrative expenses	121,508			23,291			69,356			214,155
Litigation settlement loss, net of $4,000 insurance recovery	—			—			28,000			28,000
Income (loss) from operations	159,276			(1,267		)	(92,906		)	65,103
Total other income (expense), net	154			(5		)	(20,931		)	(20,782		)

Income (loss) before income taxes and non-controlling interests	$	159,430		$	(1,272	)	$	(113,837	)	$	44,321

Margins:
Gross profit/service revenue	36		%	26		%	5		%	33		%
Income (loss) from operations/service revenue	21		%	(1		)%	(112		)%	7		%



	For the year ended December 31, 2015
(in thousands)	Mortgage Market			Real Estate Market			Other Businesses, Corporate and Eliminations			Consolidated Altisource

Revenue
Service revenue	$	781,984		$	46,963		$	111,973		$	940,920
Reimbursable expenses	99,988			7,236			120			107,344
Non-controlling interests	3,202			—			—			3,202
	885,174			54,199			112,093			1,051,466
Cost of revenue	552,676			38,541			96,110			687,327
Gross profit	332,498			15,658			15,983			364,139
Selling, general and administrative expenses	132,334			7,514			81,020			220,868
Impairment losses	64,146			—			7,639			71,785
Change in the fair value of Equator Earn Out	(7,591		)	—			—			(7,591		)
Income (loss) from operations	143,609			8,144			(72,676		)	79,077
Total other income (expense), net	621			2			(26,640		)	(26,017		)

Income (loss) before income taxes and non-controlling interests	$	144,230		$	8,146		$	(99,316	)	$	53,060

Margins:
Gross profit/service revenue	43		%	33		%	14		%	39		%
Income (loss) from operations/service revenue	18		%	17		%	(65		)%	8		%


	Payments due by period											Payments due by period
(in thousands)	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years		(in thousands)	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years

Senior secured term loan											Senior secured term loan	$	247,204	$	—	$	—	$	247,204	$	—
Non-cancelable operating lease obligations	$	53,790	$	19,833	$	24,234	$	9,493	$	230	Non-cancelable operating lease obligations	22,204		8,268		10,436		3,500		—
Long-term debt	413,581		5,945		407,636		—		—
Contractual interest payments⁽¹⁾	57,824		19,937		37,887		—		—		Contractual interest payments(1)	40,239		12,360		24,720		3,159		—

Total	$	525,195	$	45,715	$	469,757	$	9,493	$	230	Total	$	309,647	$	20,628	$	35,156	$	253,863	$	—


⁽¹⁾ (1) Represents estimated future interest payments on our Credit Agreement based on the interest rate as of December 31, 2020.	~~Represents estimated future interest payments on our senior secured term loan based on applicable interest rates as of December 31, 2017.~~


~~ITEM 7A.~~	~~QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK~~


		Page

		~~Page~~

Reports of Independent Registered Public Accounting ~~Firms~~Firm	6155

Consolidated Balance Sheets as of December 31, ~~2017~~2020 and ~~2016~~2019		6559

Consolidated Statements of Operations and Comprehensive ~~Income~~Loss for the years ended December 31, ~~2017, 2016~~2020, 2019 and ~~2015~~2018		6660

Consolidated Statements of Equity for the years ended December 31, ~~2017, 2016~~2020, 2019 and ~~2015~~2018		6761

Consolidated Statements of Cash Flows for the years ended December 31, ~~2017, 2016~~2020, 2019 and ~~2015~~2018		6862

Notes to Consolidated Financial Statements		6963


	Altisource Equity (Deficit)
	Common stock			Additional paid-in capital		Retained earnings		Accumulated other comprehensive income (loss)		Treasury stock, at cost		Non-controlling interests		Total
	Shares

Balance, January 1, 2018	25,413	$	25,413	$	112,475	$	626,600	$	733	$	(426,609)	$	1,373	$	339,985

Net loss	—	—		—		(5,382)		—		—		2,683		(2,699)
Distributions to non-controlling interest holders	—	—		—		—		—		—		(2,819)		(2,819)
Share-based compensation expense	—	—		10,192		—		—		—		—		10,192
Cumulative effect of an accounting change (Note 5 and 18)	—	—		0		(9,715)		(733)		—		—		(10,448)
Exercise of stock options and issuance of restricted shares	—	—		—		(19,245)		—		22,889		—		3,644
Treasury shares withheld for the payment of tax on restricted share issuances and stock option exercises	—	—		—		(1,603)		—		778		—		(825)
Repurchase of shares	—	—		—		—		—		(40,362)		—		(40,362)

Balance, December 31, 2018	25,413	25,413		122,667		590,655		0		(443,304)		1,237		296,668

Net loss	—	—		—		(307,969)		—		—		2,112		(305,857)
Distributions to non-controlling interest holders	—	—		—		—		—		—		(2,752)		(2,752)
Share-based compensation expense	—	—		11,002		—		—		—		872		11,874
Exercise of stock options and issuance of restricted share units and restricted shares	—	—		—		(7,222)		—		7,622		—		400
Treasury shares withheld for the payment of tax on restricted share issuances and stock option exercises	—	—		—		(3,438)		—		1,743		—		(1,695)
Repurchase of shares	—	—		—		—		—		(19,995)		—		(19,995)

Balance, December 31, 2019	25,413	25,413		133,669		272,026		0		(453,934)		1,469		(21,357)

Net loss	—	—		—		(67,156)		—		—		841		(66,315)
Distributions to non-controlling interest holders	—	—		—		—		—		—		(1,101)		(1,101)
Share-based compensation expense	—	—		7,804		—		—		—		—		7,804
Exercise of stock options and issuance of restricted share units and restricted shares	—	—		—		(9,548)		—		9,548		—		0
Treasury shares withheld for the payment of tax on restricted share unit and restricted share issuances and stock option exercises	—	—		—		(4,939)		—		3,352		—		(1,587)


Balance, December 31, 2020	25,413	$	25,413	$	141,473	$	190,383	$	0	$	(441,034)	$	1,209	$	(82,556)



	Altisource Equity
	Common stock			Additional paid-in capital		Retained earnings			Accumulated other comprehensive income (loss)			Treasury stock, at cost			Non-controlling interests			Total
	Shares

Balance, January 1, 2015	25,413	$	25,413	$	91,509	$	367,967		$	—		$	(444,495	)	$	1,049		$	41,443

Net income	—	—		—		41,598			—			—			3,202			44,800
Distributions to non-controlling interest holders	—	—		—		—			—			—			(2,959		)	(2,959		)
Share-based compensation expense	—	—		4,812		—			—			—			—			4,812
Exercise of stock option	—	—		—		(8,292		)	—			9,682			—			1,390
Issuance of restricted shares for acquisitions	—	—		—		(32,003		)	—			53,736			—			21,733
Repurchase of shares	—	—		—		—			—			(58,949		)	—			(58,949		)

Balance, December 31, 2015	25,413	25,413		96,321		369,270			—			(440,026		)	1,292			52,270

Comprehensive income:
Net income	—	—		—		28,693			—			—			2,693			31,386
Other comprehensive loss, net of tax	—	—		—		—			(1,745		)	—			—			(1,745		)
Distributions to non-controlling interest holders	—	—		—		—			—			—			(2,580		)	(2,580		)
Share-based compensation expense	—	—		6,188		—			—			—			—			6,188
Excess tax benefit on stock-based compensation	—	—		4,779		—			—			—			—			4,779
Exercise of stock options and issuance of restricted shares	—	—		—		(64,177		)	—			73,735			—			9,558
Repurchase of shares	—	—		—		—			—			(37,662		)	—			(37,662		)

Balance, December 31, 2016	25,413	25,413		107,288		333,786			(1,745		)	(403,953		)	1,405			62,194

Comprehensive income:
Net income	—	—		—		308,891			—			—			2,740			311,631
Other comprehensive income, net of tax	—	—		—		—			2,478			—			—			2,478
Distributions to non-controlling interest holders	—	—		—		—			—			—			(2,772		)	(2,772		)
Share-based compensation expense	—	—		4,255		—			—			—			—			4,255
Cumulative effect of an accounting change (Note 2)	—	—		932		(932		)	—			—			—			—
Exercise of stock options and issuance of restricted shares	—	—		—		(13,491		)	—			15,865			—			2,374
Treasury shares withheld for the payment of tax on restricted share issuances	—	—		—		(1,654		)	—			490			—			(1,164		)
Repurchase of shares	—	—		—		—			—			(39,011		)	—			(39,011		)

Balance, December 31, 2017	25,413	$	25,413	$	112,475	$	626,600		$	733		$	(426,609	)	$	1,373		$	339,985



Furniture and fixtures		5 years
Office equipment		5 years
Computer hardware		3-5 years
~~Office equipment~~		~~5 years~~
~~Computer hardware~~	~~5 years~~
Computer software	3-7 years
Leasehold improvements		Shorter of useful life, 10 years or the term of the lease



(in thousands)

Accounts receivable, net	$	1,024
Prepaid expenses	22
Other assets	25
Premises and equipment, net	299
Non-compete agreements	100
Trademarks and trade names	100
Customer relationships	3,400
Goodwill	4,827
	9,797
Accounts payable and accrued expenses	(57		)
Other current liabilities	(192		)

Purchase price	$	9,548



(in thousands)	Initial purchase price allocation			Adjustments			Final purchase price allocation

Cash	$	3		$	—		$	3
Accounts receivable, net	245			(76		)	169
Premises and equipment, net	2,471			(1,067		)	1,404
Other assets	199			(196		)	3
Trademarks and trade names	1,205			—			1,205
Databases/other	910			1,035			1,945
Non-compete agreements	330			—			330
Customer relationships	255			—			255
Goodwill	19,565			50			19,615
	25,183			(254		)	24,929
Accounts payable and accrued expenses	(391		)	46			(345		)

Purchase price	$	24,792		$	(208	)	$	24,584


(in thousands)	Total

Balance as of January 1, 2019	$	81,387
^{Disposition (1)}	~~During the second quarter of 2016, goodwill was revised to reflect a purchase accounting measurement period adjustment related to the CastleLine acquisition. See Note 5.~~(2,378)

Write-off (2)	(5,160)

⁽²⁾ Balance as of December 31, 2020 and 2019	~~During the third quarter of 2016, goodwill was revised to reflect a purchase accounting measurement period adjustment related to the RentRange and Investability acquisition. See Note 5.~~$	73,849


	Weighted average estimated useful life (in years)		Gross carrying amount								Accumulated amortization								Net book value								Weighted average estimated useful life (in years)		Gross carrying amount						Accumulated amortization						Net book value
(in thousands)		2017				2016				2017				2016				2017				2016			(in thousands)			2020			2019			2020			2019			2020			2019

Definite lived intangible assets:																										Definite lived intangible assets:
Trademarks and trade names		13		$	15,354			$	15,354			$	(8,881	)		$	(7,724	)		$	6,473			$	7,630
Customer related intangible assets	10		277,828				277,828				(188,258		)		(156,980		)		89,570				120,848			Customer related intangible assets	9		$	214,973		$	214,973		$	(187,923)		$	(176,043)		$	27,050		$	38,930
Operating agreement	20		35,000				35,000				(13,865		)		(12,104		)		21,135				22,896			Operating agreement	20		35,000			35,000			(19,126)			(17,376)			15,874			17,624
Trademarks and trade names																										Trademarks and trade names	16		9,709			9,709			(6,307)			(5,893)			3,402			3,816
Non-compete agreements	4		1,560				1,560				(897		)		(507		)		663				1,053			Non-compete agreements	4		1,230			1,230			(1,230)			(1,215)			0			15
Intellectual property	10		300				300				(115		)		(85		)		185				215			Intellectual property	—		0			300			0			(175)			0			125
Other intangible assets	5		3,745				3,745				(1,706		)		(955		)		2,039				2,790			Other intangible assets	5		1,800			3,745			(1,800)			(3,209)			0			536

Total			$	333,787			$	333,787			$	(213,722	)		$	(178,355	)		$	120,065			$	155,432		Total			$	262,712		$	264,957		$	(216,386)		$	(203,911)		$	46,326		$	61,046



	December 31, 2017								December 31, 2016
(in thousands)	Carrying amount		Fair value						Carrying amount		Fair value
			Level 1		Level 2		Level 3				Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents	$	105,006	$	105,006	$	—	$	—	$	149,294	$	149,294	$	—	$	—
Restricted cash	3,837		3,837		—		—		4,127		4,127		—		—
Available for sale securities	49,153		49,153		—		—		45,754		45,754		—		—

Liabilities:
Acquisition contingent consideration	—		—		—		—		376		—		—		376
Long-term debt	413,581		—		407,377		—		479,653		—		474,856		—


	December 31, 2020								December 31, 2019
(in thousands)	Carrying amount		Fair value						Carrying amount		Fair value
			Level 1		Level 2		Level 3				Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents	$	58,263	$	58,263	$	0	$	0	$	82,741	$	82,741	$	0	$	0
Restricted cash	3,833		3,833		0		0		3,842		3,842		0		0
Investment in equity securities	0		0		0		0		42,618		42,618		0		0
Long-term receivable	2,531		0		0		2,531		2,371		0		0		2,371

Liabilities:
Senior secured term loan	247,204		0		201,472		0		293,826		0		277,666		0