Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 21, 2020 | Jun. 30, 2019 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | Ocwen Financial Corporation | ||
Entity Central Index Key | 0000873860 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | false | ||
Entity Common Stock, Shares Outstanding | 134,948,008 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Shell Company | false | ||
Entity Public Float | $ 275,549,706 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Assets | ||
Cash and cash equivalents | $ 428,339 | $ 329,132 |
Restricted cash (amounts related to variable interest entities (VIEs) of $20,434 and $20,968) | 64,001 | 67,878 |
Mortgage servicing rights (MSRs), at fair value | 1,486,395 | 1,457,149 |
Advances, net | 254,533 | 249,382 |
Match funded advances (related to VIEs) | 801,990 | 937,294 |
Loans held for sale ($208,752 and $176,525 carried at fair value) | 275,269 | 242,622 |
Loans held for investment, at fair value (amounts related to VIEs of $23,342 and $26,520) | 6,292,938 | 5,498,719 |
Receivables, net | 201,220 | 198,262 |
Premises and equipment, net | 38,274 | 33,417 |
Other assets ($8,524 and $7,568 carried at fair value) (amounts related to VIEs of $4,078 and $2,874) | 563,240 | 379,567 |
Assets related to discontinued operations | 0 | 794 |
Total assets | 10,406,199 | 9,394,216 |
Liabilities | ||
Home Equity Conversion Mortgage-Backed Securities (HMBS) - related borrowings, at fair value | 6,063,435 | 5,380,448 |
Other financing liabilities ($972,595 and $1,057,671 carried at fair value) (amounts related to VIEs of $22,002 and $24,815) | 972,595 | 1,062,090 |
Match funded liabilities (related to VIEs) | 679,109 | 778,284 |
Other secured borrowings, net (amounts related to VIEs of $242,101 and $0) | 1,025,791 | 448,061 |
Senior notes, net | 311,085 | 448,727 |
Other liabilities ($100 and $4,986 carried at fair value) (amounts related to VIEs of $144 and $0) | 942,173 | 703,636 |
Liabilities related to discontinued operations | 0 | 18,265 |
Total liabilities | 9,994,188 | 8,839,511 |
Commitments and Contingencies (Notes 25 and 26) | ||
Stockholders’ Equity | ||
Common stock, $.01 par value; 200,000,000 shares authorized; 134,862,232 and 133,912,425 shares issued and outstanding at December 31, 2019 and December 31, 2018, respectively | 1,349 | 1,339 |
Additional paid-in capital | 556,798 | 554,056 |
(Accumulated deficit) retained earnings | (138,542) | 3,567 |
Accumulated other comprehensive loss, net of income taxes | (7,594) | (4,257) |
Total stockholders’ equity | 412,011 | 554,705 |
Total liabilities and stockholders’ equity | $ 10,406,199 | $ 9,394,216 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Restricted cash, amounts related to VIEs | $ 20,434,000 | $ 20,968,000 |
Mortgage servicing rights, at fair value | 1,486,395,000 | 1,457,149,000 |
Loans held for sale, at fair value | 208,752,000 | 176,525,000 |
Loans held for investment | 6,292,938,000 | 5,498,719,000 |
Other assets, at fair value | 8,524,000 | 7,568,000 |
Other assets, amounts related to VIEs | 4,078,000 | 2,874,000 |
Other secured borrowings, net | 1,025,791,000 | 448,061,000 |
Other financing liabilities | 972,595,000 | 1,062,090,000 |
Other financing liabilities, at fair value | 972,595,000 | 1,057,671,000 |
Other liabilities, at fair value | 100,000 | 4,986,000 |
Other liabilities, related to VIEs | $ 942,173,000 | $ 703,636,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 134,862,232 | 133,912,425 |
Common stock, shares outstanding (in shares) | 134,862,232 | 133,912,425 |
Residential Mortgage Backed Securitization Trusts | ||
Loans held for investment | $ 23,342,000 | $ 26,520,000 |
Other financing liabilities | 22,002,000 | 24,815,000 |
Variable Interest Entity, Primary Beneficiary | ||
Other secured borrowings, net | 242,101,000 | 242,101,000 |
Other liabilities, related to VIEs | $ 144,000 | $ 0 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue | |||
Servicing and subservicing fees | $ 975,507 | $ 937,083 | $ 991,597 |
Gain on loans held for sale, net | 38,300 | 37,336 | 57,183 |
Reverse mortgage revenue, net | 86,309 | 60,237 | 75,515 |
Other revenue, net | 23,259 | 28,389 | 70,281 |
Total revenue | 1,123,375 | 1,063,045 | 1,194,576 |
MSR valuation adjustments, net | (120,876) | (153,457) | (52,962) |
Operating expenses | |||
Compensation and benefits | 313,508 | 298,036 | 358,994 |
Servicing and origination | 109,007 | 131,297 | 141,496 |
Professional services | 102,638 | 165,554 | 229,451 |
Technology and communications | 79,166 | 98,241 | 100,490 |
Occupancy and equipment | 68,146 | 59,631 | 66,019 |
Other expenses | 1,474 | 26,280 | 49,233 |
Total operating expenses | 673,939 | 779,039 | 945,683 |
Other income (expense) | |||
Interest income | 17,104 | 14,026 | 15,965 |
Interest expense | (114,129) | (103,371) | (126,927) |
Pledged MSR liability expense | (372,089) | (171,670) | (236,311) |
Gain on repurchase of senior secured notes | 5,099 | 0 | 0 |
Bargain purchase gain | (381) | 64,036 | 0 |
Gain on sale of MSRs, net | 453 | 1,325 | 10,537 |
Other, net | 8,892 | (6,371) | (3,168) |
Total other expense, net | (455,051) | (202,025) | (339,904) |
Loss from continuing operations before income taxes | (126,491) | (71,476) | (143,973) |
Income tax expense (benefit) | 15,634 | 529 | (15,516) |
Loss from continuing operations, net of tax | (142,125) | (72,005) | (128,457) |
Income from discontinued operations, net of tax | 0 | 1,409 | 0 |
Net loss | (142,125) | (70,596) | (128,457) |
Net (income) loss attributable to non-controlling interests | 0 | (176) | 491 |
Net loss attributable to Ocwen stockholders | $ (142,125) | $ (70,772) | $ (127,966) |
Earnings (loss) per share attributable to Ocwen stockholders - Basic and Diluted | |||
Continuing operations (USD per share) | $ (1.06) | $ (0.54) | $ (1.01) |
Discontinued operations (USD per share) | 0 | 0.01 | 0 |
Earnings per share, basic and diluted (USD per share) | $ (1.06) | $ (0.53) | $ (1.01) |
Weighted average common shares outstanding | |||
Basic (in shares) | 134,444,402 | 133,703,359 | 127,082,058 |
Diluted (in shares) | 134,444,402 | 133,703,359 | 127,082,058 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | |||
Net loss | $ (142,125) | $ (70,596) | $ (128,457) |
Other comprehensive income (loss), net of income taxes | |||
Reclassification adjustment for losses on cash flow hedges included in net income | 147 | 149 | 201 |
Change in unfunded pension plan obligation liability | (3,442) | (3,219) | 0 |
Other | (42) | 61 | 0 |
Comprehensive loss | (145,462) | (73,605) | (128,256) |
Comprehensive (income) loss attributable to non-controlling interests | 0 | (176) | 491 |
Comprehensive loss attributable to Ocwen stockholders | $ (145,462) | $ (73,781) | $ (127,765) |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive Income (Loss), Net of Taxes | Non-controlling Interest in Subsidiaries |
Balance at (in shares) at Dec. 31, 2016 | 123,988,160 | |||||
Balance at at Dec. 31, 2016 | $ 655,283 | $ 1,240 | $ 527,001 | $ 126,167 | $ (1,450) | $ 2,325 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | (128,457) | (127,966) | (491) | |||
Cumulative effect of new accounting standards | 284 | (284) | ||||
Issuance of common stock (in shares) | 6,700,510 | |||||
Issuance of common stock | 15,325 | $ 67 | 15,258 | |||
Equity-based compensation and other (in shares) | 795,388 | |||||
Equity-based compensation and other | 4,522 | $ 8 | 4,514 | |||
Other comprehensive income (loss), net of income taxes | 201 | 201 | ||||
Balance at (in shares) at Dec. 31, 2017 | 131,484,058 | |||||
Balance at at Dec. 31, 2017 | 546,874 | $ 1,315 | 547,057 | (2,083) | (1,249) | 1,834 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | (70,596) | (70,772) | 176 | |||
Cumulative effect of new accounting standards | 82,043 | |||||
Issuance of common stock (in shares) | 1,875,000 | |||||
Issuance of common stock | 5,719 | $ 19 | 5,700 | |||
Equity-based compensation and other (in shares) | 553,367 | |||||
Equity-based compensation and other | 1,304 | $ 5 | 1,299 | |||
Other comprehensive income (loss), net of income taxes | (3,008) | (3,008) | ||||
Cumulative effect of adoption of FASB ASU No. 2016-16 | (5,621) | (5,621) | ||||
Capital distribution to non-controlling interest | (822) | (822) | ||||
Purchase of non-controlling interest | $ (1,188) | (1,188) | ||||
Balance at (in shares) at Dec. 31, 2018 | 133,912,425 | 133,912,425 | ||||
Balance at at Dec. 31, 2018 | $ 554,705 | $ 1,339 | 554,056 | 3,567 | (4,257) | 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | (142,125) | (142,125) | 0 | |||
Cumulative effect of new accounting standards | 16 | 16 | ||||
Equity-based compensation and other (in shares) | 949,807 | |||||
Equity-based compensation and other | 2,752 | $ 10 | 2,742 | |||
Other comprehensive income (loss), net of income taxes | $ (3,337) | (3,337) | ||||
Balance at (in shares) at Dec. 31, 2019 | 134,862,232 | 134,862,232 | ||||
Balance at at Dec. 31, 2019 | $ 412,011 | $ 1,349 | $ 556,798 | $ (138,542) | $ (7,594) | $ 0 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Cash flows from operating activities | |||
Net loss | $ (142,125) | $ (70,596) | $ (128,457) |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||
MSR valuation adjustments, net | 120,876 | 153,457 | 52,962 |
Gain on sale of MSRs, net | (453) | (1,325) | (10,537) |
Provision for bad debts | 34,867 | 49,180 | 76,828 |
Depreciation | 31,911 | 27,202 | 26,886 |
Loss on write-off of fixed assets, net | 0 | 0 | 8,502 |
Amortization of debt issuance costs | 3,170 | 2,921 | 2,738 |
Gain on repurchase of senior secured notes | (5,099) | 0 | 0 |
Provision for (reversal of) valuation allowance on deferred tax assets | 32,470 | (23,347) | (29,979) |
Decrease (increase) in deferred tax assets other than provision for valuation allowance | (29,350) | 20,058 | 30,710 |
Equity-based compensation expense | 2,697 | 2,366 | 5,624 |
(Gain) loss on valuation of financing liability | 152,986 | (19,269) | 41,282 |
(Gain) loss on trading securities | (215) | (527) | 6,756 |
Net gain on valuation of mortgage loans held for investment and HMBS-related borrowings | (55,869) | (18,698) | (23,733) |
Bargain purchase gain | 381 | (64,036) | 0 |
Gain on loans held for sale, net | (38,300) | (32,722) | (53,209) |
Origination and purchase of loans held for sale | (1,488,974) | (1,715,190) | (3,695,163) |
Proceeds from sale and collections of loans held for sale | 1,380,138 | 1,625,116 | 3,662,065 |
Changes in assets and liabilities: | |||
Decrease in advances and match funded advances | 105,052 | 258,899 | 330,052 |
Decrease in receivables and other assets, net | 126,881 | 144,310 | 199,209 |
Decrease in other liabilities | (72,182) | (69,207) | (100,650) |
Other, net | (6,922) | 3,986 | 7,135 |
Net cash provided by operating activities | 151,940 | 272,578 | 409,021 |
Cash flows from investing activities | |||
Origination of loans held for investment | (1,026,154) | (920,476) | (1,277,615) |
Principal payments received on loans held for investment | 558,720 | 400,521 | 444,388 |
Net cash acquired in the acquisition of PHH | 0 | 64,692 | 0 |
Restricted cash acquired in the acquisition of PHH | 0 | 38,813 | 0 |
Purchase of MSRs | (145,668) | (5,433) | (1,658) |
Proceeds from sale of MSRs | 4,984 | 7,276 | 4,234 |
Acquisition of advances in connection with the purchase of MSRs | (1,457) | ||
Proceeds from sale of advances and match funded advances | 14,186 | 33,792 | 9,446 |
Issuance of automotive dealer financing notes | 0 | (19,642) | (174,363) |
Collections of automotive dealer financing notes | 0 | 52,598 | 162,965 |
Additions to premises and equipment | (1,954) | (9,016) | (9,053) |
Proceeds from sale of real estate | 7,548 | 9,546 | 3,147 |
Other, net | 2,357 | 2,464 | (707) |
Net cash used in investing activities | (587,438) | (344,865) | (839,216) |
Cash flows from financing activities | |||
Repayment of match funded liabilities, net | (99,175) | (220,334) | (282,379) |
Proceeds from mortgage loan warehouse facilities and other secured borrowings | 3,137,326 | 2,991,261 | 7,215,264 |
Repayments of mortgage loan warehouse facilities and other secured borrowings | (2,875,377) | (3,350,648) | (7,395,013) |
Repayment and repurchase of senior notes | (131,791) | (18,482) | 0 |
Proceeds from issuance of additional senior secured term loan (SSTL) | 119,100 | ||
Repayment of SSTL borrowing | (25,433) | (66,750) | (36,750) |
Payment of debt issuance costs | (2,813) | (841) | |
Proceeds from sale of MSRs accounted for as a financing | 0 | 279,586 | 54,601 |
Proceeds from sale of Home Equity Conversion Mortgages (HECM, or reverse mortgages) accounted for as a financing (HMBS-related borrowings) | 962,113 | 948,917 | 1,281,543 |
Repayment of HMBS-related borrowings | (549,600) | (391,985) | (418,503) |
Issuance of common stock | 0 | 0 | 13,913 |
Capital distribution to non-controlling interest | 0 | (822) | 0 |
Purchase of non-controlling interest | 0 | (1,188) | 0 |
Other, net | (3,522) | (2,818) | (1,478) |
Net cash provided by financing activities | 530,828 | 166,737 | 430,357 |
Net increase in cash, cash equivalents and restricted cash | 95,330 | 94,450 | 162 |
Cash, cash equivalents and restricted cash at beginning of year | 397,010 | 302,560 | 302,398 |
Cash, cash equivalents and restricted cash at end of year | 492,340 | 397,010 | 302,560 |
Supplemental cash flow information | |||
Interest paid | 111,144 | 100,165 | 128,391 |
Income tax payments (refunds), net | 4,075 | 10,957 | (23,501) |
Supplemental non-cash investing and financing activities | |||
Loans held for investment | 0 | 28,373 | 0 |
Other financing liabilities | 0 | 26,643 | 0 |
Transfers from loans held for investment to loans held for sale | 1,892 | 1,038 | 3,803 |
Transfers of loans held for sale to real estate owned (REO) | 6,636 | 4,241 | 875 |
Issuance of common stock in connection with litigation settlement | 0 | 5,719 | 1,937 |
Cumulative effect adjustment for election of fair value for MSRs previously accounted for using the amortization method | 16 | 82,043 | |
Lease liability | 66,247 | ||
Supplemental business acquisition information | |||
Fair value of assets acquired | 262 | 1,192,155 | 0 |
Fair value of liabilities assumed | 643 | 769,723 | 0 |
Total identifiable net assets acquired | (381) | 422,432 | 0 |
Bargain purchase gain | (381) | 64,036 | 0 |
Total consideration | 0 | 358,396 | 0 |
Less: Cash consideration paid by PHH | 0 | (325,000) | 0 |
Cash consideration paid by Ocwen | 0 | 33,396 | 0 |
Cash acquired from PHH | 0 | 98,088 | 0 |
Net cash acquired in the acquisition of PHH | 0 | 64,692 | 0 |
Restricted cash and equivalents: | |||
Cash and cash equivalents | 428,339 | 329,132 | 259,655 |
Debt service accounts | 23,276 | 26,626 | 33,726 |
Other restricted cash | 40,725 | 41,252 | 9,179 |
Property, Plant and Equipment | |||
Supplemental non-cash investing and financing activities | |||
Right-of-use asset | 66,231 | ||
Fair Value Election For Assets Previously Using Amortization Method | |||
Supplemental non-cash investing and financing activities | |||
Cumulative effect adjustment for election of fair value for MSRs previously accounted for using the amortization method | $ 0 | $ 82,043 | $ 0 |
Organization, Business Environm
Organization, Business Environment, Basis of Presentation and Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Business Environment, Basis of Presentation and Significant Accounting Policies | Note 1 — Organization, Business Environment, Basis of Presentation and Significant Accounting Policies Organization Ocwen Financial Corporation (NYSE: OCN) (Ocwen, we, us and our) is a non-bank mortgage servicer and originator providing solutions through its primary operating subsidiaries, PHH Mortgage Corporation (PMC) and Liberty Home Equity Solutions, Inc. (Liberty). We are headquartered in West Palm Beach, Florida with offices in the United States (U.S.) and the United States Virgin Islands (USVI) and operations in India and the Philippines. Ocwen is a Florida corporation organized in February 1988. Ocwen directly or indirectly owns all of the outstanding common stock of its operating subsidiaries, including PMC since its acquisition on October 4, 2018, Liberty, Ocwen Financial Solutions Private Limited (OFSPL) and Ocwen USVI Services, LLC (OVIS). We perform servicing activities related to our own MSR portfolio (primary) and on behalf of other servicers (subservicing), the largest being New Residential Investment Corp. (NRZ), and investors (primary and master servicing), including the Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac) (collectively, the GSEs), the Government National Mortgage Association (Ginnie Mae) and private-label securitizations (non-Agency). As a subservicer or primary servicer, we may be required to make advances for certain property tax and insurance premium payments, default and property maintenance payments and principal and interest payments on behalf of delinquent borrowers to mortgage loan investors before recovering them from borrowers. Most, but not all, of our subservicing agreements provide for us to be reimbursed for any such advances by the owner of the servicing rights. Advances made by us as primary servicer are generally recovered from the borrower or the mortgage loan investor. As master servicer, we collect mortgage payments from primary servicers and distribute the funds to investors in the mortgage-backed securities. To the extent the primary servicer does not advance the scheduled principal and interest, as master servicer we are responsible for advancing the shortfall, subject to certain limitations. We originate, sell and securitize conventional (conforming to the underwriting standards of Fannie Mae or Freddie Mac; collectively referred to as Agency loans) and government-insured (Federal Housing Administration (FHA) or Department of Veterans Affairs (VA)) forward mortgages, generally servicing retained. The GSEs or Ginnie Mae guarantee these mortgage securitizations. We originate HECM loans, or reverse mortgages, that are mostly insured by the FHA and are an approved issuer of HMBS that are guaranteed by Ginnie Mae. We had a total of approximately 5,300 employees at December 31, 2019 of which approximately 3,400 were located in India and approximately 400 were based in the Philippines. Our operations in India and the Philippines primarily provide internal support services, principally to our loan servicing business and our corporate functions. Of our foreign-based employees, nearly 80% were engaged in supporting our loan servicing operations as of December 31, 2019 . Business Environment We are facing certain challenges and uncertainties that could have significant adverse effects on our business, financial condition, liquidity and results of operations. The ability of management to appropriately address these challenges and uncertainties in a timely manner is critical to our ability to operate our business successfully. Losses have significantly eroded stockholders’ equity and weakened our financial condition. Our near-term priority is to return to sustainable profitability in the shortest timeframe possible within an appropriate risk and compliance environment. If we execute on our key business initiatives, we believe we will drive stronger financial performance. First, we must expand our lending business and acquisitions of MSRs that are prudent and well-executed with appropriate financial return targets to replenish and grow our servicing portfolio. Second, we must re-engineer our cost structure to go beyond eliminating redundant costs through the integration process and establish continuous cost improvement as a core strength. Our continuous cost improvement efforts are focused on leveraging our single servicing platform and technology, optimizing strategic sourcing and off-shore utilization, lean process design, automation and other technology-enabled productivity enhancements. Our initiatives are targeted at delivering superior accuracy, cost, speed and customer satisfaction. We believe these steps are necessary to simplify our operations and drive stronger financial performance. Third, we must manage our balance sheet to ensure adequate liquidity, finance our ongoing business needs and provide a solid platform for executing on our other key business initiatives. Regarding the current maturities of our borrowings, as of December 31, 2019 , we had approximately $1.2 billion of debt outstanding under facilities coming due in 2020. In January 2020, we extended the maturity of our SSTL from December 2020 to May 2022 and we reduced the outstanding balance from $326.1 million to $200.0 million . Portions of our match funded advance facilities and all of our mortgage loan warehouse facilities have 364 -day terms consistent with market practice. We have historically renewed these facilities on or before their expiration in the ordinary course of financing our business. We expect to renew, replace or extend all such borrowings to the extent necessary to finance our business on or prior to their respective maturities consistent with our historical experience. Finally, we must fulfill our regulatory commitments and resolve our remaining legal and regulatory matters on satisfactory terms. See Note 24 — Regulatory Requirements and Note 26 — Contingencies for further information. Our debt agreements contain various qualitative and quantitative events of default provisions that include, among other things, noncompliance with covenants, breach of representations, or the occurrence of a material adverse change. If a lender were to allege an event of default and we are unable to avoid, remedy or secure a waiver of such alleged default, we could be subject to adverse actions by our lenders that could have a material adverse impact on us. In addition, PMC and Liberty are parties to seller/servicer agreements and/or subject to guidelines and regulations (collectively, seller/servicer obligations) with one or more of the GSEs, the Department of Housing and Urban Development (HUD), FHA, VA and Ginnie Mae. To the extent these requirements are not met or waived, the applicable agency may, at its option, utilize a variety of remedies including requirements to provide certain information or take actions at the direction of the applicable agency, requirements to deposit funds as security for our obligations, sanctions, suspension or even termination of approved seller/servicer status, which would prohibit future originations or securitizations of forward or reverse mortgage loans or servicing for the applicable agency. Any of these actions could have a material adverse impact on us. See Note 14 — Borrowings , Note 24 — Regulatory Requirements and Note 26 — Contingencies for further information. In certain recent periods, Ocwen has incurred significant losses as a result of accelerated declines in the fair value of our MSRs due to interest rate decreases. Further interest rate decreases, prepayment speed increases and changes to other fair value inputs or assumptions could result in further fair value declines and hamper our ability to return to profitability. Starting in September 2019, we have implemented a hedging strategy to partially offset the changes in fair value of our net MSR portfolio. See Note 17 — Derivative Financial Instruments and Hedging Activities for further information. In addition, we have exposure to concentration risk and client retention risk as a result of our relationship with NRZ, which accounted for 56% of the UPB in our servicing portfolio as of December 31, 2019. Currently, subject to proper notice (generally 180 days’ notice), the payment of termination and loan deboarding fees and certain other provisions, NRZ has rights to terminate these agreements for convenience. Because of the large percentage of our servicing business that is represented by agreements with NRZ, if NRZ exercised all or a significant portion of these termination rights, we might need to right-size or restructure certain aspects of our servicing business as well as the related corporate support functions. On February 20, 2020, we received a notice of termination from NRZ with respect to the subservicing agreement between NRZ and PMC, which accounted for 20% of our servicing portfolio UPB at December 31, 2019. See Note 28 — Subsequent Events . Our ability to execute on our key initiatives is not certain and is dependent on the successful execution of several complex actions, including our ability to grow our lending business and acquire MSRs with appropriate financial return targets, our ability to acquire, maintain and grow profitable client relationships, our ability to maintain relationships with the GSEs, Ginnie Mae, FHFA, lenders and regulators, our ability to implement further organizational redesign and cost reduction, as well as the absence of significant unforeseen costs, including regulatory or legal costs, that could negatively impact our return to sustainable profitability, and our ability to extend, renew or replace our debt agreements in the ordinary course of business. There can be no assurances that the desired strategic and financial benefits of these actions will be realized. Basis of Presentation and Significant Accounting Policies Consolidation and Basis of Presentation Principles of Consolidation Our consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the U.S. (GAAP). Our consolidated financial statements include the accounts of Ocwen, its wholly-owned subsidiaries and any variable interest entity (VIE) for which we have determined that we are the primary beneficiary. We apply the equity method of accounting to investments when the entity is not a VIE, and we are able to exercise significant influence, but not control, over the policies and procedures of the entity but own 50% or less of the voting securities. Our statements of operations and consolidated balance sheets include the accounts and results of PHH Corporation and its subsidiaries since acquisition on October 4, 2018. See Note 2 — Business Acquisition for additional information. We have eliminated intercompany accounts and transactions in consolidation. Foreign Currency Translation The functional currency of each of our foreign subsidiaries is the U.S. dollar. Re-measurement adjustments of foreign-denominated amounts to U.S. dollars are included in Other, net in our consolidated statements of operations. Reclassifications Certain amounts in the consolidated statements of operations for 2018 and 2017 have been reclassified to conform to the current year presentation. The reclassifications had no impact on net income (loss) or total revenue in our consolidated statements of operations and no impact on operating, investing and financing cash flows in our consolidated statements of cash flows. We now present Reverse mortgage revenue, net as a separate revenue line item on the face of the statements of operations to provide a further breakdown of Other revenue, net and provide greater transparency on the performance associated with our portfolio of HECM loans, net of the HMBS-related borrowings that are both measured at fair value, as follows: Years ended December 31, 2018 2017 Statements of Operations Revenue From Gain on loans held for sale, net $ 40,407 $ 46,219 From Other revenue, net 22,577 31,517 From Servicing and subservicing fees (2,747 ) (2,221 ) To Reverse mortgage revenue, net (New line item) 60,237 75,515 Total revenue — — In addition to the above reclassifications, we have made the following presentation changes: • In the consolidated statements of operations, we now separately present MSR valuation adjustments, net from Total expenses, renamed “Operating expenses”. The purpose of this reclassification is to separately present fair value changes from operating expenses and provide additional insights on the nature of our performance. • Within the Other income (expense), net on the consolidated statements of operations, we now present the expense related to the pledged MSR liability recorded at fair value separately from Interest expense. The purpose of this reclassification is to improve transparency between the interest expense associated with interest-bearing liabilities recorded on an accrual basis and expenses that are attributable to the pledged MSR liability recorded at fair value. The pledged MSR liability is the obligation to deliver NRZ all contractual cash flows associated with the underlying MSR that did not meet the requirements for sale accounting treatment. The Pledged MSR liability expense reflects net servicing fee remittance and fair value changes. In the Supplemental cash flow section of the consolidated statements of cash flows, as a result of this reclassification of Pledged MSR liability expense from interest expense, we have reclassified $171.7 million and $236.3 million of Pledged MSR liability expense out of Interest paid in 2018 and 2017, respectively. • Within the Total liabilities section of our consolidated balance sheet at December 31, 2018, we reclassified borrowings with an outstanding balance of $65.5 million from Other financing liabilities to Other secured borrowings. Effective with this reclassification, all amounts included in Other financing liabilities represent secured financing as a result of sale transactions that do not meet the requirements for sale accounting treatment. • Within the Cash flows from financing activities section of our consolidated statements of cash flows, we reclassified repayments of our SSTL from the Repayments of mortgage loan warehouse facilities and other secured borrowings line item to a new line item (Repayment of SSTL borrowings). Use of Estimates and Assumptions The preparation of financial statements in conformity with GAAP requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Such estimates and assumptions include, but are not limited to fair value measurements, allowance for losses, income taxes, indemnification obligations, litigation-related obligations, and our going concern evaluation. In developing estimates and assumptions, management uses all available information; however, actual results could materially differ from those estimates and assumptions. Significant Accounting Policies Cash and cash equivalents Cash includes both interest-bearing and non-interest-bearing demand deposits with financial institutions that have original maturities of 90 days or less. Restricted Cash Restricted cash includes amounts specifically designated to repay debt, to provide over-collateralization for secured borrowings and match funded debt facilities, and to provide additional collateral to support certain obligations, including letters of credit. Mortgage Servicing Rights MSRs are assets representing our right to service portfolios of mortgage loans. We retain MSRs on originated or purchased loans when they are sold in the secondary market. We also acquire MSRs through asset purchases or business combination transactions. The unpaid principal balance (UPB) of the loans underlying the MSRs is not included on our consolidated balance sheets. For servicing retained in connection with the securitization of reverse mortgage loans accounted for as secured financings, we do not recognize an MSR. All newly acquired or retained MSRs are initially measured at fair value. To the extent any portfolio contract is not expected to compensate us adequately for performing the servicing, we would recognize a servicing liability. We define contracts as Agency, government-insured or non-Agency (commonly referred to as non-prime, subprime or private-label loans) based on their general comparability with regard to servicing guidelines, underwriting standards and borrower risk characteristics. We identify classes of servicing assets and servicing liabilities based on the availability of market inputs used in determining their fair value and our methods for managing their risks. Servicing assets are not recognized for subservicing arrangements entered into with the entity that owns the MSRs. Subsequent to acquisition, we account for servicing assets and servicing liabilities at fair value, and report changes in fair value in earnings (MSR valuation adjustments, net) in the period in which the changes occur. Effective January 1, 2018, we elected fair value accounting for our MSRs previously accounted for using the amortization method, which included Agency MSRs and government-insured MSRs. Effective with this election, our entire portfolio of MSRs is accounted for using the fair value measurement method. We recorded a cumulative-effect adjustment of $82.0 million to retained earnings as of January 1, 2018 to reflect the excess of the fair value over the carrying amount. See Note 9 — Mortgage Servicing for additional information. Until December 31, 2017, for servicing assets or liabilities that we previously accounted for using the amortization method, we amortized the balances in proportion to, and over the period of, estimated net servicing income (if servicing revenues exceed servicing costs) or net servicing loss (if servicing costs exceed servicing revenues). Estimated net servicing income is primarily driven by the estimated future cash flows of the underlying mortgage loan portfolio, which, absent new purchases, declines over time from prepayments and scheduled loan amortization. We adjusted MSR amortization prospectively in response to changes in estimated projections of future cash flows. We stratified servicing assets or liabilities based upon one or more of the predominant risk characteristics of the underlying portfolios and assess servicing assets or liabilities for impairment or increased obligation by determining the difference, if any, between the carrying amount and estimated fair value at each reporting date. We recognized any impairment, or increased obligation, through a valuation allowance which was adjusted to reflect subsequent changes in the measurement of impairment and reported in earnings (MSR valuation adjustments, net) in the period in which the changes occurred. We do not recognize fair value in excess of the carrying amount of servicing assets for any stratum. We earn fees for servicing and subservicing mortgage loans. We collect servicing and subservicing fees, generally expressed as a percent of UPB, from the borrowers’ payments. In addition to servicing and subservicing fees, we also report late fees, prepayment penalties, float earnings and other ancillary fees as revenue in Servicing and subservicing fees in our consolidated statements of operations. We recognize servicing and subservicing fees as revenue when the fees are earned, which is generally when the borrowers’ payments are collected or when loans are modified or liquidated through the sale of the underlying real estate collateral or otherwise. Advances and Match Funded Advances During any period in which a borrower does not make payments, servicing and subservicing agreements may require that we advance our own funds to meet contractual principal and interest remittance requirements for the investors, to pay property taxes and insurance premiums and to process foreclosures. We also advance funds to maintain, repair and market foreclosed real estate properties on behalf of investors. These advances are made pursuant to the terms of each servicing and subservicing contract. Each servicing and subservicing contract is associated with specific loans, identified as a pool. When we make an advance on a loan under each servicing or subservicing contract, we are entitled to recover that advance either from the borrower, for reinstated and performing loans, or from guarantors (GSEs), insurers (FHA/VA) and investors, for modified and liquidated loans. Most of our servicing and subservicing contracts provide that the advances made under the respective agreement have priority over all other cash payments from the proceeds of the loan, and in the majority of cases, the proceeds of the pool of loans that are the subject of that servicing or subservicing contract. As a result, we are entitled to repayment from loan proceeds before any interest or principal is paid on the bonds, and in the majority of cases, advances in excess of loan proceeds may be recovered from pool level proceeds. We establish an allowance for losses through a charge to earnings (Servicing and origination expense) to the extent we believe that a portion of advances are uncollectible under the provisions of each servicing contract taking into consideration, among other factors, probability of cure or modification, length of delinquency and the amount of the advance. We are generally only obligated to advance funds to the extent that we believe the advances are recoverable from expected proceeds from the loan. We continually assess collectibility using proprietary cash flow projection models that incorporate a number of different factors, depending on the characteristics of the mortgage loan or pool, including, for example, estimated time to a foreclosure sale, estimated costs of foreclosure action, estimated future property tax payments and the estimated value of the underlying property net of estimated carrying costs, commissions and closing costs. Under the terms of our subservicing agreements, we are generally reimbursed by our subservicing clients on a monthly or more frequent basis. For those advances that have been reimbursed, i.e., that are off-balance sheet, if a loss contingency is probable and reasonably estimable, we recognize a loss contingency accrual for the amount of advances deemed uncollectible caused by our failure to comply with the subservicing agreements or our servicing practices. We report such loss contingency within Other liabilities - Liability for indemnification obligations. Loans Held for Sale Loans held for sale include forward and reverse mortgage loans that we do not intend to hold until maturity. We report loans held for sale at either fair value or the lower of cost or fair value computed on an aggregate basis. For loans we measure at the lower of cost or fair value, we account for any excess of cost over fair value as a valuation allowance and include changes in the valuation allowance in Other, net, in the consolidated statements of operations in the period in which the change occurs. For loans that we elected to measure at fair value on a recurring basis, we report changes in fair value in Gain on loans held for sale, net in the consolidated statements of operations in the period in which the changes occur. These loans are expected to be sold into the secondary market to the GSEs, into Ginnie Mae guaranteed securitizations or to third-party investors. We report any gain or loss on the transfer of loans held for sale in Gain on loans held for sale, net in the consolidated statements of operations along with the changes in fair value of the loans and the gain or loss on any related derivatives. When loans are sold or securitized with servicing retained, the gain on sale includes the MSR retained as non-cash proceeds at the date of sale. We include all changes in loans held for sale and related derivative balances in operating activities in the consolidated statements of cash flows. We accrue interest income as earned. We place loans on non-accrual status after any portion of principal or interest has been delinquent for more than 89 days , or earlier if management determines the borrower is unable to continue performance. When we place a loan on non-accrual status, we reverse the interest that we have accrued but not yet received. We return loans to accrual status only when we reinstate the loan and there is no significant uncertainty as to collectability. Loans Held for Investment Newly originated reverse residential mortgage loans that are insured by the FHA and pooled into Ginnie Mae guaranteed securities that we sell into the secondary market with servicing rights retained are classified as loans held for investment. We have elected to measure these loans at fair value. Loan transfers in these Ginnie Mae securitizations do not meet the definition of a participating interest and as a result, the transfers of the reverse mortgages do not qualify for sale accounting. Therefore, we account for these transfers as financings, with the reverse mortgages classified as Loans held for investment, at fair value, on our consolidated balance sheets, with no gain or loss recognized on the transfer. We have elected to fair value future draw commitments for HECM loans purchased or originated after December 31, 2018. The estimated fair value is included in Loans held for investment on our consolidated balance sheet with changes in fair value recognized in Reverse mortgage revenue, net in our consolidated statement of operations. The value of future draw commitments for HECM loans purchased or originated before January 1, 2019 is recognized as the draws are securitized or sold. Upfront costs and fees related to loans held for investment, including broker fees, are recognized in Reverse mortgage revenue, net in the statement of operations as incurred and are not capitalized. Premiums on loans purchased via the correspondent channel are capitalized upon origination because they represent part of the purchase price. However, the loans are subsequently measured at fair value on a recurring basis. We record the proceeds from the transfer of assets as secured borrowings (HMBS-related borrowings) in Financing liabilities and recognize no gain or loss on the transfer. We measure the HECM loans and HMBS-related borrowings at fair value on a recurring basis. The changes in fair value of the HECM loans and HMBS-related borrowings are included in Reverse mortgage revenue, net in our consolidated statements of operations. Included in net fair value changes on the HECM loans and related HMBS borrowings are the net interest income that we expect to be collected on the HECM loans and the interest expense that we expect to be paid on the HMBS-related borrowings. In addition, reverse mortgage revenue, net includes the fair value changes of the interest rate lock commitments related to reverse mortgage loans. We report originations and collections of HECM loans in investing activities in the consolidated statements of cash flows. We report net fair value gains on HECM loans and the related HMBS borrowings as an adjustment to the net cash provided by or used in operating activities in the consolidated statements of cash flows. Proceeds from securitizations of HECM loans and payments on HMBS-related borrowings are included in financing activities in the consolidated statements of cash flows. Transfers of Financial Assets and MSRs We securitize, sell and service forward and reverse residential mortgage loans. Securitization transactions typically involve the use of VIEs and are accounted for either as sales or as secured financings. We typically retain economic interests in the securitized assets in the form of servicing rights and obligations. In order to efficiently finance our assets and operations and create liquidity, we may sell servicing advances, MSRs or the right to receive certain servicing fees relating to MSRs (Rights to MSRs). In order to determine whether or not a VIE is required to be consolidated, we consider our ongoing involvement with the VIE. In circumstances where we have both the power to direct the activities that most significantly impact the performance of the VIE and the obligation to absorb losses or the right to receive benefits that could be significant, we would conclude that we would consolidate the entity, which precludes us from recording an accounting sale in connection with the transfer of the financial assets. In the case of a consolidated VIE, we continue to report the underlying residential mortgage loans or servicing advances, and we record the securitized debt on our consolidated balance sheet. In the case of transfers where either one or both of the power or economic criteria above are not met, we evaluate whether a sale has occurred for accounting purposes. In order to recognize a sale, the transferred assets must be legally isolated, not be constrained by restrictions from further transfer and be deemed to be beyond our control. If the transfer does not meet any of these three criteria, the transaction is accounted for consistent with a secured financing. In certain situations, we may have continuing involvement in transferred loans through our retained servicing. Transactions involving retained servicing would still be eligible for sale accounting, as we have ceded effective control of these loans to the purchaser. Subsequent to the determination that a transaction does not meet the accounting sale criteria, we may determine that we meet the criteria. In the event we subsequently meet the accounting sale criteria, we derecognize the transferred assets and related liabilities. In connection with the Ginnie Mae early buyout program, our agreements provide either that: (a) we have the right, but not the obligation, to repurchase previously transferred mortgage loans under certain conditions, including the mortgage loans becoming eligible for pooling under a program sponsored by Ginnie Mae; or (b) we have the obligation to repurchase previously transferred mortgage loans that have been subject to a successful trial modification before any permanent modification is made. Once these conditions are met, we have effectively regained control over the mortgage loan(s), and under GAAP, must re-recognize the loans on our consolidated balance sheets and establish a corresponding repurchase liability. With respect to those loans that we have the right, but not the obligation, to repurchase under the applicable agreement, this requirement applies regardless of whether we have any intention to repurchase the loan. We re-recognize the loans in Other assets and a corresponding liability in Other liabilities. In the case of transfers of MSRs and Rights to MSRs where we retain the right to subservice, we defer any related gain or loss and amortize the balance over the life of the subservicing agreement. Gains or losses on off-balance sheet securitizations take into consideration any retained interests, including servicing rights and representation and warranty obligations, both of which are initially recorded at fair value at the date of sale in Gain on loans held for sale, net, in our consolidated statements of operations. Premises and Equipment We report premises and equipment at cost and, except for land, depreciate them over their estimated useful lives on a straight-line basis as follows: Computer software 2 – 3 years Computer hardware 3 years Buildings 40 years Leasehold improvements Term of the lease not to exceed useful life Right of Use (ROU) assets Term of the lease not to exceed useful life Furniture and fixtures 5 years Office equipment 5 years Litigation We monitor our legal matters, including advice from external legal counsel, and periodically perform assessments of these matters for potential loss accrual and disclosure. We establish a liability for settlements, judgments on appeal and filed and/or threatened claims for which we believe that it is probable that a loss has been or will be incurred and the amount can be reasonably estimated. We recognize legal costs associated with loss contingencies in Professional services expense in the consolidated statement of operations as incurred. Stock-Based Compensation We initially measure the cost of employee services received in exchange for a stock-based award as the fair value of the award on the grant date. For awards which must be settled in cash and are therefore classified as liabilities rat |
Business Acquisitions
Business Acquisitions | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Business Acquisitions | Note 2 — Business Acquisition On October 4, 2018, we completed our acquisition of PHH, a non-bank servicer with established servicing and origination recapture capabilities. As a result of the acquisition, PHH became a wholly owned subsidiary of Ocwen. The acquisition has been accounted for under the acquisition method of accounting pursuant to ASC 805, Business Combinations . Assets acquired and liabilities assumed are recorded at their fair value as of the date of acquisition based on management’s estimates using currently available information. The results of PHH operations are included in Ocwen’s consolidated statements of operations from the date of acquisition. For U.S. income tax purposes, the acquisition of PHH is treated as a stock purchase. The aggregate consideration paid to the former holders of PHH common stock was $358.4 million in cash and was funded by a combination of PHH cash on hand of $325.0 million and Ocwen cash on hand of $33.4 million . At the closing, there were 32,581,485 shares of PHH common stock, par value $0.01 , outstanding, all of which were converted into the right to receive $11.00 in cash per share. In connection with the acquisition, all outstanding options to purchase PHH common stock and all PHH equity awards with performance-based vesting conditions were cancelled without any consideration or cash payment. All other PHH equity awards were cancelled in exchange for a cash payment equal to $11.00 per share underlying the award. We recognized a bargain purchase gain, net of tax, of $63.7 million ( $64.0 million in 2018) in connection with the acquisition. The bargain purchase gain results from the fair value of PHH’s net assets exceeding the purchase price we paid. The purchase price we negotiated contemplated that PHH would incur losses after the acquisition date. To the extent those losses are realized, they are included in our consolidated statements of operations. Costs incurred in connection with the transaction are expensed as incurred and are reported in Professional services in the consolidated statements of operations. Such costs were $13.7 million during 2018. Purchase Price Allocation The purchase price allocation provided in the table below reflects the final determination of the fair value of assets acquired and liabilities assumed in the acquisition of PHH, with the excess of total identifiable net assets over total consideration paid recorded as a bargain purchase gain. Independent valuation specialists conducted analyses to assist management in determining the fair value of certain acquired assets and assumed liabilities. Management is responsible for these third-party valuations and appraisals. The methodologies that we use and key assumptions that we made to estimate the fair value of the acquired assets and assumed debt are described in Note 5 — Fair Value . Purchase Price Allocation October 4, 2018 Adjustments Final Cash $ 423,088 $ — $ 423,088 Restricted cash 38,813 — 38,813 MSRs 518,127 — 518,127 Advances 96,163 (96 ) 96,067 Loans held for sale 42,324 358 42,682 Receivables 46,838 — 46,838 Premises and equipment 15,203 — 15,203 Real estate owned (REO) 3,289 — 3,289 Other assets 6,293 — 6,293 Assets related to discontinued operations 2,017 — 2,017 Financing liabilities (MSRs pledged, at fair value) (481,020 ) — (481,020 ) Other secured borrowings (27,594 ) — (27,594 ) Senior notes (Senior unsecured notes) (120,624 ) — (120,624 ) Accrued legal fees and settlements (9,960 ) — (9,960 ) Other accrued expenses (36,889 ) — (36,889 ) Loan repurchase and indemnification liability (27,736 ) — (27,736 ) Unfunded pension liability (9,815 ) — (9,815 ) Other liabilities (34,131 ) (643 ) (34,774 ) Liabilities related to discontinued operations (21,954 ) — (21,954 ) Total identifiable net assets 422,432 (381 ) 422,051 Total consideration paid to seller (358,396 ) — (358,396 ) Bargain purchase gain $ 64,036 $ (381 ) $ 63,655 Post-Acquisition Results of Operations The following table presents the results of operations of PHH that are included in our consolidated statements of operations from the acquisition date of October 4, 2018 through December 31, 2018: Revenues $ 72,487 Expenses 84,877 Other income (expense) (19,132 ) Income tax benefit (6,711 ) Net loss from continuing operations $ (24,811 ) Pro Forma Results of Operations (Unaudited) The following table presents supplemental pro forma information for Ocwen as if the PHH Acquisition occurred on January 1, 2017. Pro forma adjustments include: • Increase (decrease) in MSR valuation adjustments, net of $24.4 million and $(16.9) million in 2018 and 2017, respectively, to conform the accounting for MSRs to the valuation policies of Ocwen related to acquired MSRs; • Adjust interest expense for a total net impact of $30.6 million and $(73.8) million in 2018 and 2017, respectively. The pro forma adjustments primarily pertain to fair value adjustments of $31.4 million and $(79.3) million in 2018 and 2017, respectively, related to the assumed MSR secured liability using valuation assumptions consistent with Ocwen's methodology; • Report the bargain purchase gain of $63.7 million as if the acquisition had occurred in 2017 rather than 2018; • Report Ocwen and PHH acquisition-related charges of $18.5 million for professional services as if they had been incurred in 2017 rather than 2018; • Adjust depreciation expense to amortize internally developed software acquired from PHH on a straight-line basis based on a useful life of three years; • Adjust revenue for a total net increase of $120.6 million and $134.6 million in 2018 and 2017, respectively, which primarily include adjusting servicing and subservicing fees for $127.7 million and $97.0 million in 2018 and 2017, respectively, to gross up activity related to PHH MSRs sold accounted for as secured borrowings consistent with Ocwen’s presentation. The offset to these adjustments are interest income and interest expense, with no net effect on earnings. • Income tax benefit of $0.3 million and $0.2 million in 2018 and 2017, respectively, to record lower 2018 current federal tax under the new base erosion and anti-abuse tax (BEAT) provision of the Tax Act assuming Ocwen and PHH would file a consolidated federal tax return beginning January 1, 2017 and the benefit of the additional acquisition-related charges as if they had been incurred in 2017, based on management’s estimate of the blended applicable statutory tax rates and observing the continued need for a valuation allowance. 2018 2017 (Unaudited) (Unaudited) Revenues $ 1,305,972 $ 1,785,408 Loss from continuing operations, net of tax attributable to Ocwen common stockholders $ (201,382 ) $ (356,824 ) The pro forma consolidated results presented above are not indicative of what Ocwen’s consolidated results would have been had we completed the acquisition on the date indicated due to a number of factors, including but not limited to expected reductions in servicing, origination and overhead costs through the realization of targeted cost synergies and improved economies of scale, the impact of incremental costs to integrate the two companies and differences in servicing practices and cost structures between Ocwen and PHH. In addition, the pro forma consolidated results do not purport to project combined future operating results of Ocwen and PHH nor do they reflect the expected realization of any cost savings associated with the acquisition of PHH. Discontinued Operations In November 2016, PHH announced its plan to exit the private label solutions (PLS) business, and in February 2017, PHH announced its intention to operate as a smaller business that is focused solely on subservicing and portfolio retention services, and exit the Real Estate channel. As a result, PHH would exit the PLS business through the run-off of operations, and exit the Real Estate channel through the sale of certain assets of PHH Home Loans, LLC (PHH Home Loans) and its subsidiaries and subsequent run-off of the operations. Those exit activities were substantially complete prior to our acquisition of PHH, and as such, the results of PLS and Real Estate have been presented as discontinued operations in the consolidated statement of operations and consolidated statement of comprehensive income (loss), and are excluded from continuing operations and segment results for the post-acquisition period. Results of Operations The results of discontinued operations for the post-acquisition period (October 4, 2018, through December 31, 2018) are summarized below: Net revenues $ 413 Total expenses (1) (996 ) Income before income taxes 1,409 Income tax expense (benefit) — Income from discontinued operations $ 1,409 (1) Total expenses are shown net of a severance expense reversal that occurred as a result of voluntary post-acquisition employee departures and amortization of facility exit costs. There was no gain or loss directly attributed to the completion of the disposal of these businesses. Assets and Liabilities The carrying amounts of major classes of assets and liabilities related to discontinued operations consisted of the following at December 31, 2018: Assets Mortgage loans held for sale $ 650 Accounts receivable, net 144 Total assets related to discontinued operations $ 794 Liabilities Other liabilities (1) 18,265 Total liabilities related to discontinued operations $ 18,265 (1) The primary component of Other liabilities is an exit cost liability which includes $14.9 million of facility exit costs related to vacating certain facilities. Cash Flows The cash flows related to discontinued operations have not been segregated and are included in the consolidated statement of cash flows for the post-acquisition period. There were no significant adjustments necessary to reconcile Net loss to net cash provided by operating activities that relate to discontinued operations. |
Cost Re-Engineering Plan Cost R
Cost Re-Engineering Plan Cost Re-Engineering Plan | 12 Months Ended |
Dec. 31, 2019 | |
Restructuring and Related Activities [Abstract] | |
Cost Re-Engineering Plan | Note 3 — Cost Re-Engineering Plan In February 2019, we announced our intention to execute cost re-engineering opportunities in order to drive stronger financial performance and, in the longer term, simplify our operations. Our cost re-engineering plans extend beyond eliminating redundant costs through the integration process and address organizational, process and control redesign and automation, human capital planning, off-shore utilization, strategic sourcing and facilities rationalization. Costs for this plan include severance, retention and other incentive awards, facilities-related costs and other costs to execute the reorganization. While we continue to pursue additional cost re-engineering initiatives, this cost re-engineering plan announced in February 2019 was completed by December 31, 2019 and our remaining liability at December 31, 2019 is $11.9 million . The following table provides a summary of the aggregate activity of the liability for the re-engineering plan costs, including the detail of the $65.0 million total cost incurred in the year ended December 31, 2019: Employee-related Facility-related Other Total Beginning balance $ — $ — $ — $ — Charges (1) 35,704 10,133 19,133 64,970 Payments / Other (29,449 ) (7,202 ) (16,414 ) (53,065 ) Ending balance (2) $ 6,255 $ 2,931 $ 2,719 $ 11,905 (1) The expenses were all incurred within the Corporate Items and Other segment. Employee-related costs and facility-related costs are reported in Compensation and benefits expense and Occupancy and equipment expense, respectively, in the consolidated statement of operations. Other costs are primarily reported in Professional services expense and Other expenses. (2) The liability for re-engineering plan costs at December 31, 2019 is included in Other liabilities (Other accrued expenses). |
Securitizations and Variable In
Securitizations and Variable Interests Entities | 12 Months Ended |
Dec. 31, 2019 | |
Transfers and Servicing [Abstract] | |
Securitizations and Variable Interest Entities | Note 4 — Securitizations and Variable Interest Entities We securitize, sell and service forward and reverse residential mortgage loans and regularly transfer financial assets in connection with asset-backed financing arrangements. We have aggregated these securitizations and asset-backed financing arrangements using special purpose entities (SPEs) or VIEs into three groups: (1) securitizations of residential mortgage loans, (2) financings of advances and (3) MSR financings. Financing transactions that do not use SPEs or VIEs are disclosed in Note 14 — Borrowings . We have determined that the SPEs created in connection with our match funded advance financing facilities are VIEs for which we are the primary beneficiary. From time to time, we may acquire beneficial interests issued in connection with mortgage-backed securitizations where we may also be the master and/or primary servicer. These beneficial interests consist of subordinate and residual interests acquired from third-parties in market transactions. We consolidate the VIE when we conclude we are the primary beneficiary. Securitizations of Residential Mortgage Loans Transfers of Forward Loans We sell or securitize forward loans that we originate or purchased from third parties, generally in the form of mortgage-backed securities guaranteed by the GSEs or Ginnie Mae. Securitization typically occurs within 30 days of loan closing or purchase. We act only as a fiduciary and do not have a variable interest in the securitization trusts. As a result, we account for these transactions as sales upon transfer. The following table presents a summary of cash flows received from and paid to securitization trusts related to transfers of loans accounted for as sales that were outstanding: Years Ended December 31, 2019 2018 2017 Proceeds received from securitizations $ 1,248,837 $ 1,290,682 $ 3,256,625 Servicing fees collected (1) 50,326 45,046 41,509 Purchases of previously transferred assets, net of claims reimbursed (4,602 ) (4,395 ) (5,948 ) $ 1,294,561 $ 1,331,333 $ 3,292,186 (1) We receive servicing fees based upon the securitized loan balances and certain ancillary fees, all of which are reported in Servicing and subservicing fees in the consolidated statements of operations. In connection with these transfers, we retained MSRs of $7.5 million , $8.3 million and $20.7 million during 2019 , 2018 and 2017 , respectively. We securitize forward and reverse residential mortgage loans involving the GSEs and loans insured by the FHA or VA through Ginnie Mae. Certain obligations arise from the agreements associated with our transfers of loans. Under these agreements, we may be obligated to repurchase the loans, or otherwise indemnify or reimburse the investor or insurer for losses incurred due to material breach of contractual representations and warranties. The following table presents the carrying amounts of our assets that relate to our continuing involvement with forward loans that we have transferred with servicing rights retained as well as an estimate of our maximum exposure to loss including the UPB of the transferred loans: December 31, 2019 2018 Carrying value of assets MSRs, at fair value $ 109,581 $ 132,774 Advances and match funded advances 141,829 138,679 UPB of loans transferred 14,490,984 15,600,971 Maximum exposure to loss $ 14,742,394 $ 15,872,424 At December 31, 2019 and 2018 , 7.7% and 8.3% , respectively, of the transferred residential loans that we service were 60 days or more past due. Transfers of Reverse Mortgages We pool HECM loans into HMBS that we sell into the secondary market with servicing rights retained or we sell the loans to third parties with servicing rights released. We have determined that loan transfers in the HMBS program do not meet the definition of a participating interest because of the servicing requirements in the product that require the issuer/servicer to absorb some level of interest rate risk, cash flow timing risk and incidental credit risk. As a result, the transfers of the HECM loans do not qualify for sale accounting, and therefore, we account for these transfers as financings. Under this accounting treatment, the HECM loans are classified as Loans held for investment, at fair value, on our consolidated balance sheets. Holders of participating interests in the HMBS have no recourse against the assets of Ocwen, except with respect to standard representations and warranties and our contractual obligation to service the HECM loans and the HMBS. Financings of Advances Match funded advances result from our transfers of residential loan servicing advances to SPEs in exchange for cash. We consolidate these SPEs because we have determined that Ocwen is the primary beneficiary of the SPE. These SPEs issue debt supported by collections on the transferred advances, and we refer to this debt as Match funded liabilities. We make transfers to these SPEs in accordance with the terms of our advance financing facility agreements. Debt service accounts require us to remit collections on pledged advances to the trustee within two days of receipt. Collected funds that are not applied to reduce the related match funded debt until the payment dates specified in the indenture are classified as debt service accounts within Restricted cash in our consolidated balance sheets. The balances also include amounts that have been set aside from the proceeds of our match funded advance facilities to provide for possible shortfalls in the funds available to pay certain expenses and interest, as well as amounts set aside as required by our warehouse facilities as security for our obligations under the related agreements. The funds are held in interest earning accounts and those amounts related to match funded advance facilities are held in the name of the SPE created in connection with the facility. We classify the transferred advances on our consolidated balance sheets as a component of Match funded assets and the related liabilities as Match funded liabilities. The SPEs use collections of the pledged advances to repay principal and interest and to pay the expenses of the SPE. Holders of the debt issued by these entities have recourse only to the assets of the SPE for satisfaction of the debt. The assets and liabilities of the advance financing SPEs are comprised solely of Match funded advances, Restricted cash (debt service accounts), Match funded liabilities and amounts due to affiliates. Amounts due to affiliates are eliminated in consolidation in our consolidated balance sheets. MSR Financings On July 1, 2019, we entered into a $300.0 million financing facility with a third-party secured by certain Fannie Mae and Freddie Mac MSRs. Two trusts were established in connection with this facility. On July 1, 2019 we entered into an MSR Excess Spread Participation Agreement under which we created a 100% participation interest in the Portfolio Excess Servicing Fees, as defined, pursuant to which the holder of the participation interest is entitled to receive certain funds collected on the related portfolio of mortgage loans (other than ancillary income and advance reimbursement amounts) with respect to such Portfolio Excess Servicing Fees. Portfolio Excess Servicing Fees are defined within the Excess Spread Participation Agreement as: (a) the portfolio collections received during the collection period, net of the base servicing fee; and (b) all other amounts payable by a loan owner or master servicer with respect to the servicing rights for the portfolio mortgage loans, including any portfolio termination payments. This participation interest has been contributed to the trusts. In connection with this facility, we entered into repurchase agreements with a third-party pursuant to which we sold trust certificates of the trusts representing certain indirect economic interests in the MSRs and agreed to repurchase such certificates at a future date at the repurchase price set forth in the repurchase agreements. Our obligations under the facility are secured by a lien on the related MSRs. In addition, Ocwen guarantees the obligations under the facility. This facility will terminate in June 2020 unless the parties mutually agree to renew or extend. We determined that the trusts are VIEs for which we are the primary beneficiary. Therefore, we have included the trusts in our consolidated financial statements effective July 1, 2019. We have the power to direct the activities of the VIEs that most significantly impact the VIE’s economic performance given that we are the servicer of the MSRs that result in cash flows to the trusts. In addition, we have designed the trusts at inception to facilitate the third-party funding facility under which we have the obligation to absorb the losses of the VIEs that could be potentially significant to the VIEs. At December 31, 2019 , $147.7 million was outstanding under this facility which is included in Other secured borrowings, net on our consolidated balance sheet. See Note 14 — Borrowings for additional information. The carrying value of the pledged MSRs was $245.5 million at December 31, 2019 . At December 31, 2019 , $0.9 million of unamortized debt issuance costs related to this facility are included in Other assets, $0.1 million of accrued interest payable related to this facility are included in Other liabilities and $0.1 million of debt service account related to this facility are included in Restricted cash. The assets and liabilities of the trusts include amounts due to or from affiliates which are eliminated in consolidation in our consolidated balance sheets. On November 26, 2019, we issued $100.0 million Ocwen Excess Spread-Collateralized Notes, Series 2019-PLS1 Class A (PLS Notes) secured by certain of PMC’s private label MSRs (PLS MSRs). PMC PLS ESR Issuer LLC (PLS Issuer) was established in this connection as a wholly owned subsidiary of PMC. PMC entered into an MSR Excess Spread Participation Agreement with PLS Issuer. PMC created a participation interest in the Excess Servicing Fees, related float and REO fees pursuant to which the holder of the participation interest will be entitled to receive such Excess Servicing Fees, related float and REO fees. PMC holds the MSRs and services the loans which create the related excess cash flows pledged under the MSR Excess Spread Participation Agreement. “Excess Servicing Fees” shall mean: “with respect to each servicing agreement and any collection period, an amount equal to the total Servicing Fees payable under such servicing agreement for such collection period minus the product of 13.0 basis points multiplied by the unpaid principal balance of the related mortgage loans for such servicing agreement as of the first day of such collection period.” PLS Issuer’s obligations under the facility are secured by a lien on the related PLS MSRs. PMC sold a participation certificate representing certain economic interests in the PLS MSRs and in order to secure its obligations under the participation certificate, it granted a security interest to PLS Issuer in the PLS MSRs. The PLS Issuer assigned the security interest in the PLS MSRs to the collateral agent for the noteholders. Ocwen guarantees the obligations of PLS Issuer under the facility. We determined that PLS Issuer is a VIE for which we are the primary beneficiary. Therefore, we have included PLS Issuer in our consolidated financial statements effective November 26, 2019. We have the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance given that we are the servicer of the MSRs that result in cash flows to PLS Issuer. In addition, PMC has designed PLS Issuer at inception to facilitate the funding for general corporate purposes. Separately, in return for the participation interests, PMC received the proceeds from issuance of the PLS Notes. PMC is the sole member of PLS Issuer, thus PMC has the obligation to absorb the losses of the VIE that could be potentially significant to the VIE. At December 31, 2019 , $94.4 million was outstanding under this facility which is included in Other secured borrowings on our consolidated balance sheet. See Note 14 — Borrowings for additional information. The carrying value of the pledged MSRs was $146.2 million at December 31, 2019 . At December 31, 2019 , $1.2 million of unamortized debt issuance costs related to the PLS Notes is reported as a reduction to the secured borrowing liability, $0.1 million of accrued interest payable related to this facility are included in Other liabilities and a $3.0 million debt service account related to this facility is included in Restricted cash. The assets and liabilities of PLS Issuer include amounts due to or from affiliates which are eliminated in consolidation in our consolidated balance sheets. Mortgage-Backed Securitizations The table below presents the carrying value and classification of the assets and liabilities of two consolidated mortgage-backed securitization trusts included in our consolidated balance sheet as a result of residual securities issued by the trust that we acquired during the third quarter of 2018. December 31, 2019 2018 Loans held for investment, at fair value - Restricted for securitization investors $ 23,342 $ 26,520 Financing liability - Owed to securitization investors, at fair value 22,002 24,815 We have concluded we are the primary beneficiary of certain residential mortgage-backed securitizations as a result of beneficial interests consisting of residual securities, which expose us to the expected losses and residual returns of the trust, and our role as master servicer, where we have the ability to direct the activities that most significantly impact the performance of the trust. Upon consolidation of the securitization trusts, we elected to apply the measurement alternative to ASC Topic 820, Fair Value Measurement for collateralized financing entities. The measurement alternative requires a reporting entity to use the more observable of the fair value of the financial assets or the financial liabilities to measure both the financial assets and the financial liabilities of the entity. We determined that the fair value of the loans held by the trusts is more observable than the fair value of the debt certificates issued by the trusts. Through the application of the measurement alternative, the fair value of the financial liabilities of the trusts are measured as the difference between the fair value of the financial assets and the fair value of our investment in the residual securities of the trusts. Holders of the debt issued by the two securitization trust entities have recourse only to the assets of the SPE for satisfaction of the debt and have no recourse against the assets of Ocwen. Similarly, the general creditors of Ocwen have no claim on the assets of the trusts. Our exposure to loss as a result of our continuing involvement is limited to the carrying values of our investments in the residual securities of the trusts, our MSRs and related advances. |
Fair Value
Fair Value | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Note 5 — Fair Value Fair value is estimated based on a hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs. Observable inputs are inputs that reflect the assumptions that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The fair value hierarchy prioritizes the inputs to valuation techniques into three broad levels whereby the highest priority is given to Level 1 inputs and the lowest to Level 3 inputs. Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date. Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3: Unobservable inputs for the asset or liability. We classify assets in their entirety based on the lowest level of input that is significant to the fair value measurement. We have elected to fair value future draw commitments for HECM loans purchased or originated after December 31, 2018. The estimated fair value is included in Loans held for investment on our consolidated balance sheets with changes in fair value recognized in Reverse mortgage revenue, net in our consolidated statements of operations. The value of future draw commitments for HECM loans purchased or originated before January 1, 2019 is recognized as the draws are securitized or sold. The carrying amounts and the estimated fair values of our financial instruments and certain of our nonfinancial assets measured at fair value on a recurring or non-recurring basis or disclosed, but not measured, at fair value are as follows: December 31, 2019 2018 Level Carrying Value Fair Value Carrying Value Fair Value Financial assets: Loans held for sale Loans held for sale, at fair value (a) 2 $ 208,752 $ 208,752 $ 176,525 $ 176,525 Loans held for sale, at lower of cost or fair value (b) 3 66,517 66,517 66,097 66,097 Total Loans held for sale $ 275,269 $ 275,269 $ 242,622 $ 242,622 Loans held for investment Loans held for investment - Reverse mortgages (a) 3 $ 6,269,596 $ 6,269,596 $ 5,472,199 $ 5,472,199 Loans held for investment - Restricted for securitization investors (a) 3 23,342 23,342 26,520 26,520 Total loans held for investment 6,292,938 6,292,938 5,498,719 5,498,719 Advances (including match funded), net (c) 3 1,056,523 1,056,523 1,186,676 1,186,676 Receivables, net (c) 3 201,220 201,220 198,262 198,262 Mortgage-backed securities (a) 3 2,075 2,075 1,502 1,502 U.S. Treasury notes (a) 1 — — 1,064 1,064 Corporate bonds (a) 2 441 441 450 450 December 31, 2019 2018 Level Carrying Value Fair Value Carrying Value Fair Value Financial liabilities: Match funded liabilities (c) 3 $ 679,109 $ 679,507 $ 778,284 $ 776,485 Financing liabilities: HMBS-related borrowings (a) 3 $ 6,063,435 $ 6,063,435 $ 5,380,448 $ 5,380,448 Financing liability - MSRs pledged (Rights to MSRs) (a) 3 950,593 950,593 1,032,856 1,032,856 Financing liability - Owed to securitization investors (a) 3 22,002 22,002 24,815 24,815 Other (c) 3 — — 4,419 4,419 Total Financing liabilities $ 7,036,030 $ 7,036,030 $ 6,442,538 $ 6,442,538 Other secured borrowings: Senior secured term loan (c) (d) 2 $ 322,758 $ 324,643 $ 226,825 $ 227,449 Other (c) 3 703,033 686,146 221,236 204,864 Total Other secured borrowings $ 1,025,791 $ 1,010,789 $ 448,061 $ 432,313 Senior notes: Senior unsecured notes (c) (d) 2 $ 21,046 $ 13,821 $ 119,924 $ 119,258 Senior secured notes (c) (d) 2 290,039 256,201 328,803 306,889 Total Senior notes $ 311,085 $ 270,022 $ 448,727 $ 426,147 Derivative financial instrument assets (liabilities) Interest rate lock commitments (a) 2 $ 4,878 $ 4,878 $ 3,871 $ 3,871 Forward trades - Loans held for sale (a) 1 (92 ) (92 ) (4,983 ) (4,983 ) TBA / Forward mortgage-backed securities (MBS) trades - MSR hedging (a) 1 1,121 1,121 — — Interest rate caps (a) 3 — — 678 678 MSRs (a) 3 $ 1,486,395 $ 1,486,395 $ 1,457,149 $ 1,457,149 (a) Measured at fair value on a recurring basis. (b) Measured at fair value on a non-recurring basis. (c) Disclosed, but not measured, at fair value. (d) The carrying values are net of unamortized debt issuance costs and discount. See Note 14 — Borrowings for additional information . The following tables present a reconciliation of the changes in fair value of Level 3 assets and liabilities that we measure at fair value on a recurring basis: Loans Held for Investment - Reverse Mortgages HMBS-Related Borrowings Loans Held for Inv. - Restricted for Securitiza- Financing Liability - Owed to Securitiza - Mortgage-Backed Securities Financing Liability - MSRs Pledged Derivatives MSRs Year Ended December 31, 2019 Beginning balance $ 5,472,199 $ (5,380,448 ) $ 26,520 $ (24,815 ) $ 1,502 $ (1,032,856 ) $ 678 $ 1,457,149 Purchases, issuances, sales and settlements Purchases — — — — — (1,276 ) — 162,300 Issuances 1,026,154 (962,113 ) — — — — — — Sales — — — — — (44 ) — (4,344 ) Settlements (558,720 ) 549,600 (3,178 ) 2,813 — 214,364 — (7,309 ) Transfers (to) from: Loans held for sale, at fair value (1,892 ) — — — — — — — Receivables, net (327 ) — — — — — — — Other assets (513 ) — — — — — — — 464,702 (412,513 ) (3,178 ) 2,813 — 213,044 — 150,647 Total realized and unrealized gains (losses) Included in earnings: Change in fair value (1) 332,430 (270,473 ) — — 573 (152,986 ) (678 ) (121,401 ) Calls and other — — — — — 22,205 — — 332,430 (270,473 ) — — 573 (130,781 ) (678 ) (121,401 ) Transfers in and / or out of Level 3 — — — — — — — — Ending balance $ 6,269,331 $ (6,063,434 ) $ 23,342 $ (22,002 ) $ 2,075 $ (950,593 ) $ — $ 1,486,395 Loans Held for Investment - Reverse Mortgages HMBS-Related Borrowings Loans Held for Inv. - Restricted for Securitiza- Financing Liability - Owed to Securitiza - Mortgage-Backed Securities Financing Liability - MSRs Pledged Derivatives MSRs Year Ended December 31, 2018 Beginning balance $ 4,715,831 $ (4,601,556 ) $ — $ — $ 1,592 $ (508,291 ) $ 2,056 $ 671,962 Purchases, issuances, sales and settlements Purchases — — — — — (667 ) 95 13,712 Recognized (assumed) in connection with the acquisition of PHH — — — — — (481,020 ) — 518,127 Issuances (2) 920,476 (948,917 ) — — — (279,586 ) — — Consolidation of mortgage-backed securitization trusts — — 28,373 (26,643 ) — — — — Sales — — — — — — — (6,240 ) Settlements (400,521 ) 391,985 (1,853 ) 1,828 — 211,766 (371 ) (5,880 ) Transfers (to) from: MSRs carried at amortized cost, net of valuation allowance — — — — — — — 418,925 Loans held for sale, at fair value (1,039 ) — — — — — — — Receivables, net (158 ) — — — — — — — Other assets (411 ) — — — — — — — 518,347 (556,932 ) 26,520 (24,815 ) — (549,507 ) (276 ) 938,644 Total realized and unrealized gains (losses) Included in earnings: Change in fair value (2) 238,021 (221,960 ) — — (90 ) 19,269 (1,102 ) (153,457 ) Calls and other — — — — — 5,673 — — 238,021 (221,960 ) — — (90 ) 24,942 (1,102 ) (153,457 ) Transfers in and / or out of Level 3 — — — — — — — — Ending balance $ 5,472,199 $ (5,380,448 ) $ 26,520 $ (24,815 ) $ 1,502 $ (1,032,856 ) $ 678 $ 1,457,149 Loans Held for Investment - Reverse Mortgages HMBS-Related Borrowings Mortgage-Backed Securities Financing Liability - MSRs Pledged Derivatives MSRs Year Ended December 31, 2017 Beginning balance $ 3,565,716 $ (3,433,781 ) $ 8,342 $ (477,707 ) $ 1,836 $ 679,256 Purchases, issuances, sales and settlements Purchases — — — — 655 — Issuances (3) 1,277,615 (1,281,543 ) — (54,601 ) — (2,214 ) Sales — — — — — (540 ) Settlements (444,388 ) 418,503 — 59,190 (445 ) — Transfers (to) from: Loans held for sale, at fair value (3,803 ) — — — — — Receivables, net (3,583 ) — — — — — Other assets (1,929 ) — — — — — 823,912 (863,040 ) — 4,589 210 (2,754 ) Total realized and unrealized gains (losses) (4) Included in earnings Change in fair value (3) 326,203 (304,735 ) (6,750 ) (41,282 ) 10 (4,540 ) Calls and other — — — 6,109 — — 326,203 (304,735 ) (6,750 ) (35,173 ) 10 (4,540 ) Transfers in and / or out of Level 3 — — — — — — Ending balance $ 4,715,831 $ (4,601,556 ) $ 1,592 $ (508,291 ) $ 2,056 $ 671,962 (1) The change in fair value adjustments on Loans held for investment for 2019 include $12.2 million in connection with the fair value election for future draw commitments on HECM reverse mortgage loans purchased or originated after December 31, 2018. (2) On January 18, 2018, Ocwen received a lump-sum payment of $279.6 million in accordance with terms of the agreements with NRZ. See Note 10 — Rights to MSRs . (3) On September 1, 2017, Ocwen transferred MSRs with UPB of $15.9 billion to NRZ and received a lump-sum payment of $54.6 million . See Note 10 — Rights to MSRs . (4) Total gains (losses) attributable to derivative financial instruments still held at December 31, 2019 and 2018 and 2017 were $(0.7) million, $(1.1) million and $0.1 million for 2019 , 2018 and 2017 , respectively. Total losses for 2019 , 2018 and 2017 attributable to MSRs still held at December 31, 2019 , 2018 and 2017 were $98.1 million , $153.5 million and $4.5 million , respectively. The methodologies that we use and key assumptions that we make to estimate the fair value of financial instruments and other assets and liabilities measured at fair value on a recurring or non-recurring basis and those disclosed, but not carried, at fair value are described below. Loans Held for Sale Residential forward and reverse mortgage loans that we intend to sell are carried at fair value as a result of a fair value election. Such loans are subject to changes in fair value due to fluctuations in interest rates from the closing date through the date of the sale of the loan into the secondary market. These loans are classified within Level 2 of the valuation hierarchy because the primary component of the price is obtained from observable values of mortgage forwards for loans of similar terms and characteristics. We have the ability to access this market, and it is the market into which conventional and government-insured mortgage loans are typically sold. We purchase certain loans from Ginnie Mae guaranteed securitizations in connection with loan modifications, strategic early buyouts (EBO) and loan resolution activity as part of our contractual obligations as the servicer of the loans. Modified and EBO loans are classified as loans held for sale at the lower of cost or fair value as we expect to redeliver (sell) the loans into new Ginnie Mae guaranteed securitizations (in the case of modified loans) or sell the loans to a private investor (in the case of EBO loans). The fair value of these loans is estimated using published forward Ginnie Mae prices or existing sale contracts. Loans repurchased in connection with loan resolution activities are classified as receivables. Because these loans are insured or guaranteed by the FHA or VA, the fair value of these loans represents the net recovery value taking into consideration the insured or guaranteed claim. We report all other loans held for sale at the lower of cost or fair value. When we enter into an agreement to sell a loan or pool of loans to an investor at a set price, we value the loan or loans at the commitment price, unless facts and circumstances exist that could impact deal economics, at which point we use judgment to determine appropriate adjustments to recorded fair value, if any. We determine the fair value of loans for which we have no agreement to sell on the expected future cash flows discounted at a rate commensurate with the risk of the estimated cash flows. Loans Held for Investment Loans Held for Investment - Reverse Mortgages We measure these loans at fair value based on the expected future cash flows discounted over the expected life of the loans at a rate commensurate with the risk of the estimated cash flows, including future draw commitments for HECM loans purchased or originated after December 31, 2018. Significant assumptions include expected future draws and prepayment and delinquency rates and cumulative loss curves. The discount rate assumption for these assets is primarily based on an assessment of current market yields on newly originated reverse mortgage loans, expected duration of the asset and current market interest rates. December 31, Significant valuation assumptions 2019 2018 Life in years Range 2.4 to 7.8 3.0 to 7.6 Weighted average 6.0 5.9 Conditional repayment rate Range 7.8% to 28.3% 6.8% to 38.4% Weighted average 14.6 % 14.7 % Discount rate 2.8 % 3.4 % Significant increases or decreases in any of these assumptions in isolation could result in a significantly lower or higher fair value, respectively. The effects of changes in the assumptions used to value the loans held for investment, excluding future draw commitments, are largely offset by the effects of changes in the assumptions used to value the HMBS-related borrowings that are associated with these loans. Loans Held for Investment – Restricted for securitization investors We have elected to measure loans held by consolidated mortgage-backed securitization trusts at fair value. The loans are secured by first liens on single family residential properties. Fair value is based on proprietary cash flow modeling processes from a third-party broker/dealer and a third-party valuation expert. Significant assumptions used in the valuation include projected monthly payments, projected prepayments and defaults, property liquidation values and discount rates. MSRs We determine the fair value of MSRs primarily using discounted cash flow methodologies. The significant components of the estimated future cash inflows for MSRs include servicing fees, late fees, float earnings and other ancillary fees. Significant cash outflows include the cost of servicing, the cost of financing servicing advances and compensating interest payments. We engage third-party valuation experts who generally utilize: (a) transactions involving instruments with similar collateral and risk profiles, adjusted as necessary based on specific characteristics of the asset or liability being valued; and/or (b) industry-standard modeling, such as a discounted cash flow model and a prepayment model, in arriving at their estimate of fair value. The prices provided by the valuation experts reflect their observations and assumptions related to market activity, incorporating available industry survey results and client feedback, and including risk premiums and liquidity adjustments. While the models and related assumptions used by the valuation experts are proprietary to them, we understand the methodologies and assumptions used to develop the prices based on our ongoing due diligence, which includes regular discussions with the valuation experts. We believe that the procedures executed by the valuation experts, supported by our verification and analytical procedures, provide reasonable assurance that the prices used in our consolidated financial statements comply with the accounting guidance for fair value measurements and disclosures and reflect the assumptions that a market participant would use. We evaluate the reasonableness of our third-party experts’ assumptions using historical experience adjusted for prevailing market conditions. Assumptions used in the valuation of MSRs include: • Mortgage prepayment speeds • Delinquency rates • Cost of servicing • Interest rate used for computing float earnings • Discount rate • Compensating interest expense • Interest rate used for computing the cost of financing servicing advances • Collection rate of other ancillary fees • Curtailment on advances MSRs are carried at fair value and classified within Level 3 of the valuation hierarchy. The fair value is determined using the mid-point of the range of prices provided by third-party valuation experts, without adjustment, except in the event we have a potential or completed sale, including transactions where we have executed letters of intent, in which case the fair value of the MSRs is recorded at the estimated sale price. Fair value reflects actual Ocwen sale prices for orderly transactions where available in lieu of independent third-party valuations. Our valuation process includes discussions of bid pricing with the third-party valuation experts and are contemplated along with other market-based transactions in their model validation. A change in valuation inputs or assumptions may result in a significantly higher or lower fair value measurement. Changes in market interest rates predominantly impact the fair value for Agency MSRs via prepayment speeds by altering the borrower refinance incentive and the non-Agency MSRs due to the impact on advance costs. Other key assumptions used in the valuation of these MSRs include delinquency rates and discount rates. December 31, Significant valuation assumptions 2019 2018 Agency Non-Agency Agency Non-Agency Weighted average prepayment speed 11.7 % 12.2 % 8.5 % 15.4 % Weighted average delinquency rate 3.2 % 27.3 % 6.6 % 27.1 % Advance financing cost 5-year swap 5-yr swap plus 2.00% 5-year swap 5-yr swap plus 2.75% Interest rate for computing float earnings 5-year swap 5-yr swap minus 0.50% 5-year swap 5-yr swap minus 0.50% Weighted average discount rate 9.3 % 11.3 % 9.1 % 12.8 % Weighted average cost to service (in dollars) $ 85 $ 277 $ 90 $ 297 Because the mortgages underlying these MSRs permit the borrowers to prepay the loans, the value of the MSRs generally tends to diminish in periods of declining interest rates, an improving housing market or expanded product availability (as prepayments increase) and increase in periods of rising interest rates, a deteriorating housing market or reduced product availability (as prepayments decrease). The following table summarizes the estimated change in the value of the MSRs that we carry at fair value as of December 31, 2019 given hypothetical shifts in lifetime prepayments and yield assumptions: Adverse change in fair value 10% 20% Weighted average prepayment speeds $ (116,951 ) $ (224,689 ) Weighted average discount rate (49,463 ) (95,885 ) The sensitivity analysis measures the potential impact on fair values based on hypothetical changes, which in the case of our portfolio at December 31, 2019 are increased prepayment speeds and an increase in the yield assumption. Advances We value advances and match funded advances at their net realizable value, which generally approximates fair value. Servicing advances have no stated maturity and do not bear interest. Principal and interest advances are generally realized within a relatively short period of time. The timing of recovery of taxes, insurance and other corporate advances depends on the underlying loan attributes, performance, and in many cases, foreclosure or liquidation timeline. The fair value adjustment to servicing advances associated with the estimated time to recover such advances is separately measured and reported as a component of the fair value of the associated MSR, consistent with actual market transactions. Refer to MSRs above for a description of the valuation methodology and assumptions related to the cost of financing servicing advances and discount rate, among other factors. The fair value of advances and match funded advances does not include the fair value of any servicer advance commitments that is included and measured as a component of the fair value of the associated MSR. Receivables The carrying value of receivables generally approximates fair value because of the relatively short period of time between their origination and realization. Mortgage-Backed Securities (MBS) Our subordinate and residual securities are not actively traded, and therefore, we estimate the fair value of these securities using a process based upon the use of an independent third-party valuation expert. Where possible, we consider observable trading activity in the valuation of our securities. Key inputs include expected prepayment rates, delinquency and cumulative loss curves and discount rates commensurate with the risks. Where possible, we use observable inputs in the valuation of our securities. However, the subordinate and residual securities in which we have invested trade infrequently and therefore have few or no observable inputs and little price transparency. Additionally, during periods of market dislocation, the observability of inputs is further reduced. We classify subordinate and residual securities as trading securities and account for them at fair value on a recurring basis. Changes in the fair value of our investment in subordinate and residual securities are recognized in Other, net in the consolidated statements of operations. U.S. Treasury Notes We classify U.S. Treasury notes as trading securities and account for them at fair value on a recurring basis. We base the fair value on quoted prices in active markets to which we have access. Changes in the fair value of our investment in U.S. Treasury notes are recognized in Other, net in the consolidated statements of operations. Match Funded Liabilities For match funded liabilities that bear interest at a rate that is adjusted regularly based on a market index, the carrying value approximates fair value. For match funded liabilities that bear interest at a fixed rate, we determine fair value by discounting the future principal and interest repayments at a market rate commensurate with the risk of the estimated cash flows. We assume the notes are refinanced at the end of their revolving periods, consistent with how we manage our advance facilities. Financing Liabilities HMBS-Related Borrowings We have elected to measure these borrowings at fair value. These borrowings are not actively traded, and therefore, quoted market prices are not available. We determine fair value by discounting the projected recovery of principal, interest and advances over the estimated life of the borrowing at a market rate commensurate with the risk of the estimated cash flows. Significant assumptions include prepayments, discount rate and borrower mortality rates. The discount rate assumption for these liabilities is based on an assessment of current market yields for newly issued HMBS, expected duration and current market interest rates. December 31, Significant valuation assumptions 2019 2018 Life in years Range 2.4 to 7.8 3.0 to 7.6 Weighted average 6.0 5.9 Conditional repayment rate Range 7.8% to 28.3% 6.8% to 38.4% Weighted average 14.6 % 14.7 % Discount rate 2.7 % 3.3 % Significant increases or decreases in any of these assumptions in isolation would result in a significantly higher or lower fair value. MSRs Pledged (Rights to MSRs) We have elected to measure and record these borrowings at fair value. We recognize the proceeds received in connection with Rights to MSRs transactions as a secured borrowing that we account for at fair value. We determine the fair value of the pledged MSR liability following a similar approach as for the associated pledged MSRs. Fair value for the portion of the borrowing attributable to the MSRs underlying the Rights to MSRs is determined using the mid-point of the range of prices provided by third-party valuation experts. Fair value for the portion of the borrowing attributable to any lump sum payments received in connection with the transfer of MSRs underlying such Rights to MSRs to the extent such transfer is accounted for as a financing is determined by discounting the relevant future cash flows that were altered through such transfer using assumptions consistent with the mid-point of the range of prices provided by third-party valuation experts for the related MSR. December 31, Significant valuation assumptions 2019 2018 Weighted average prepayment speed 11.9 % 13.9 % Weighted average delinquency rate 20.3 % 20.3 % Advance financing cost 5-year swap plus 0% to 2.00% 5-year swap plus 0% to 2.75% Interest rate for computing float earnings 5-year swap minus 0% to 0.50% 5-year swap minus 0% to 0.50% Weighted average discount rate 10.7 % 12.0 % Weighted average cost to service (in dollars) $ 223 $ 234 Significant increases or decreases in these assumptions in isolation would result in a significantly higher or lower fair value. Financing Liability – Owed to Securitization Investors Consists of securitization debt certificates due to third parties that represent beneficial ownership interests in mortgage-backed securitization trusts that we include in our consolidated financial statements. We determine fair value using the measurement alternative to ASC Topic 820, Fair Value Measurement as disclosed in Note 4 — Securitizations and Variable Interest Entities . In accordance with the measurement alternative, the fair value of the consolidated securitization debt certificates is measured as the fair value of the loans held by the trust less the fair value of the beneficial interests held by us in the form of residual securities. Other Secured Borrowings The carrying value of secured borrowings that bear interest at a rate that is adjusted regularly based on a market index approximates fair value. For other secured borrowings that bear interest at a fixed rate, we determine fair value by discounting the future principal and interest repayments at a market rate commensurate with the risk of the estimated cash flows. For the SSTL, we base the fair value on valuation data obtained from a pricing service. Secured Notes In 2014, we issued Ocwen Asset Servicing Income Series (OASIS), Series 2014-1 Notes secured by Ocwen-owned MSRs relating to Freddie Mac mortgages. In 2019, we issued Ocwen Excess Spread-Collateralized Notes, Series 2019-PLS1 notes secured by certain of PMC’s private label MSRs. We determine the fair value of these notes based on bid prices provided by third parties involved in the issuance and placement of the notes. Senior Notes We base the fair value on quoted prices in a market with limited trading activity, or on valuation data obtained from a pricing service in the absence of trading data. Derivative Financial Instruments Interest rate lock commitments (IRLCs) represent an agreement to purchase loans from a third-party originator or an agreement to extend credit to a mortgage applicant (locked pipeline), whereby the interest rate is set prior to funding. IRLCs are classified within Level 2 of the valuation hierarchy as the primary component of the price is obtained from observable values of mortgage forwards for loans of similar terms and characteristics. Fair value amounts of IRLCs are adjusted for expected “fallout” (locked pipeline loans not expected to close) using models that consider cumulative historical fallout rates and other factors. We entered into forward MBS trades to provide an economic hedge against changes in the fair value of residential forward and reverse mortgage loans held for sale that we carry at fair value until August 2019 and, beginning in September 2019, to hedge of our net MSR portfolio. Forward contracts are actively traded in the market and we obtain unadjusted market quotes for these derivatives; thus, they are classified within Level 1 of the valuation hierarchy. In addition, we may use interest rate caps to minimize future interest rate exposure on variable rate debt issued on servicing advance financing facilities from increases in one-month or three-month Eurodollar rate (1ML or 3ML, respectively) interest rates. The fair value for interest rate caps is based on counterparty market prices and adjusted for counterparty credit risk. |
Loans Held for Sale
Loans Held for Sale | 12 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
Loans Held for Sale | Note 6 — Loans Held for Sale Loans Held for Sale - Fair Value Years Ended December 31, 2019 2018 2017 Beginning balance $ 176,525 $ 214,262 $ 284,632 Originations and purchases 1,168,885 944,627 2,678,372 Proceeds from sales (1,124,247 ) (1,019,211 ) (2,785,422 ) Principal collections (23,116 ) (20,774 ) (4,867 ) Acquired in connection with the acquisition of PHH — 42,324 — Transfers from (to): Loans held for investment, at fair value 1,892 1,038 3,803 Receivables (2,480 ) (1,132 ) — REO (Other assets) (2,520 ) (1,886 ) — Gain on sale of loans 25,253 34,724 35,429 (Decrease) increase in fair value of loans (589 ) (13,435 ) 151 Other (10,851 ) (4,012 ) 2,164 Ending balance (1) $ 208,752 $ 176,525 $ 214,262 (1) At December 31, 2019 , 2018 and 2017 , the balances include $(7.8) million , $(7.2) million and $5.0 million , respectively, of fair value adjustments. Loans Held for Sale - Lower of Cost or Fair Value Years Ended December 31, 2019 2018 2017 Beginning balance $ 66,097 $ 24,096 $ 29,374 Purchases 320,089 770,563 1,016,791 Proceeds from sales (221,471 ) (569,718 ) (861,569 ) Principal collections (11,304 ) (15,413 ) (10,207 ) Transfers from (to): Receivables, net (104,635 ) (155,586 ) (171,797 ) REO (Other assets) (4,116 ) (2,355 ) (875 ) Gain on sale of loans 4,974 3,659 11,683 Decrease (increase) in valuation allowance 4,926 (4,251 ) 2,746 Other 11,957 15,102 7,950 Ending balance (1) $ 66,517 $ 66,097 $ 24,096 (1) At December 31, 2019 , 2018 and 2017 , the balances include $60.6 million , $51.8 million and $19.6 million , respectively, of loans that we repurchased from Ginnie Mae guaranteed securitizations pursuant to Ginnie Mae servicing guidelines. We may repurchase loans that have been modified, to facilitate loss reduction strategies, or as otherwise obligated as a Ginnie Mae servicer. Repurchased loans may be modified or otherwise remediated through loss mitigation activities, may be sold to a third party, or are reclassified to Receivables. Valuation Allowance - Loans Held for Sale at Lower of Cost or Fair Value Years Ended December 31, 2019 2018 2017 Beginning balance $ 11,569 $ 7,318 $ 10,064 Provision 2,537 4,033 3,109 Transfer from Liability for indemnification obligations (Other liabilities) 403 2,021 3,246 Sales of loans (7,866 ) (1,824 ) (9,415 ) Other — 21 314 Ending balance $ 6,643 $ 11,569 $ 7,318 Years Ended December 31, Gains on Loans Held for Sale, Net 2019 2018 2017 Gain on sales of loans, net MSRs retained on transfers of forward mortgage loans $ 7,458 $ 7,412 $ 20,900 Gain on sale of forward mortgage loans 25,310 34,216 35,445 Gain on sale of repurchased Ginnie Mae loans 4,764 3,659 11,683 37,532 45,287 68,028 Change in fair value of IRLCs 756 3,809 (3,089 ) Change in fair value of loans held for sale 3,005 (11,569 ) 1,475 (Loss) gain on economic hedge instruments (2,689 ) 136 (8,529 ) Other (304 ) (327 ) (702 ) $ 38,300 $ 37,336 $ 57,183 |
Advances
Advances | 12 Months Ended |
Dec. 31, 2019 | |
Advances [Abstract] | |
Advances | Note 7 — Advances December 31, 2019 2018 Principal and interest $ 80,229 $ 43,671 Taxes and insurance 92,315 160,373 Foreclosures, bankruptcy, REO and other 91,914 68,597 264,458 272,641 Allowance for losses (9,925 ) (23,259 ) $ 254,533 $ 249,382 The following table summarizes the activity in net advances: Years Ended December 31, 2019 2018 2017 Beginning balance $ 249,382 $ 211,793 $ 257,882 Asset acquisition 1,457 — — Acquired in connection with the acquisition of PHH — 96,163 — Transfers to match funded advances — (71,623 ) — Sales of advances (11,791 ) (32,081 ) (444 ) Collections of advances, charge-offs and other, net 2,151 51,924 (67,132 ) Net decrease (increase) in allowance for losses (1) 13,334 (6,794 ) 21,487 Ending balance $ 254,533 $ 249,382 $ 211,793 Allowance for Losses Years Ended December 31, 2019 2018 2017 Beginning balance $ 23,259 $ 16,465 $ 37,952 Provision 3,220 5,732 21,429 Net charge-offs and other (1) (16,554 ) 1,062 (42,916 ) Ending balance $ 9,925 $ 23,259 $ 16,465 (1) Net change for the year ended December 31, 2019 includes $18.0 million allowance related to sold advances presented in Other liabilities (Liability for indemnification obligations). |
Match Funded Assets
Match Funded Assets | 12 Months Ended |
Dec. 31, 2019 | |
Transfers and Servicing [Abstract] | |
Match Funded Assets | Note 8 — Match Funded Assets December 31, 2019 2018 Advances: Principal and interest $ 334,617 $ 412,897 Taxes and insurance 330,068 374,853 Foreclosures, bankruptcy, REO and other 137,305 149,544 $ 801,990 $ 937,294 The following table summarizes the activity in match funded assets: Years Ended December 31, 2019 2018 2017 Advances Advances Automotive Dealer Financing Notes Advances Automotive Dealer Financing Notes Beginning balance $ 937,294 $ 1,144,600 $ 32,757 $ 1,451,964 $ — Transfers from advances — 71,623 — — — Transfer (to) from Other assets — — (36,896 ) — 25,180 Sales — — — (691 ) — New advances (collections), net (135,304 ) (278,929 ) 1,504 (306,673 ) 10,212 Decrease (increase) in allowance for losses — — 2,635 — (2,635 ) Ending balance $ 801,990 $ 937,294 $ — $ 1,144,600 $ 32,757 |
Mortgage Servicing
Mortgage Servicing | 12 Months Ended |
Dec. 31, 2019 | |
Transfers and Servicing [Abstract] | |
Mortgage Servicing | Note 9 — Mortgage Servicing Mortgage Servicing Rights – Amortization Method Years Ended December 31, 2018 2017 Beginning balance $ 336,882 $ 363,722 Fair value election - transfer to MSRs carried at fair value (1) (361,670 ) — Additions recognized in connection with asset acquisitions — 1,658 Additions recognized on the sale of mortgage loans — 20,738 Sales — (1,066 ) Servicing transfers and adjustments — 252 (24,788 ) 385,304 Decrease in impairment valuation allowance (1) (2) 24,788 3,366 Amortization (1) — (51,788 ) Ending balance $ — $ 336,882 Estimated fair value at end of year $ — $ 418,745 (1) Effective January 1, 2018, we elected fair value accounting for our MSRs previously accounted for using the amortization method, which included Agency MSRs and government-insured MSRs. This irrevocable election applies to all subsequently acquired or originated servicing assets and liabilities that have characteristics consistent with each of these classes. We recorded a cumulative-effect adjustment of $82.0 million to retained earnings as of January 1, 2018 to reflect the excess of the fair value of the Agency MSRs over their carrying amount. We also recognized the tax effect of this adjustment through an increase in retained earnings of $6.8 million and a deferred tax asset for the same amount. However, we established a full valuation allowance on the resulting deferred tax asset through a reduction in retained earnings. The government-insured MSRs were impaired by $24.8 million at December 31, 2017; therefore, these MSRs were already effectively carried at fair value. (2) Impairment of MSRs is recognized in MSR valuation adjustments, net in the consolidated statements of operations for 2017. Impairment valuation allowance balance of $24.8 million was reclassified to reduce the carrying value of the related MSRs on January 1, 2018 in connection with our fair value election. Mortgage Servicing Rights – Fair Value Measurement Method Years Ended December 31, 2019 2018 2017 Agency Non-Agency Total Agency Non-Agency Total Agency Non-Agency Total Beginning balance $ 865,587 $ 591,562 $ 1,457,149 $ 11,960 $ 660,002 $ 671,962 $ 13,357 $ 665,899 $ 679,256 Fair value election - Transfer from MSRs carried at amortized cost — — — 336,882 — 336,882 — — — Cumulative effect of fair value election — — — 82,043 — 82,043 — — — Sales (3,578 ) (766 ) (4,344 ) (4,748 ) (1,492 ) (6,240 ) — (540 ) (540 ) Additions: Recognized on the sale of residential mortgage loans 8,795 — 8,795 8,279 — 8,279 162 — 162 Recognized in connection with the acquisition of PHH — — — 494,348 23,779 518,127 — — — Purchase of MSRs 153,505 — 153,505 5,433 — 5,433 — — — Servicing transfers and adjustments — (7,309 ) (7,309 ) (1,047 ) (4,833 ) (5,880 ) — (2,376 ) (2,376 ) Changes in fair value (1): Changes in valuation inputs or other assumptions (171,050 ) 265,003 93,953 11,558 (5,705 ) 5,853 243 86,721 86,964 Realization of expected future cash flows and other changes (139,253 ) (76,101 ) (215,354 ) (79,121 ) (80,189 ) (159,310 ) (1,802 ) (89,702 ) (91,504 ) Ending balance $ 714,006 $ 772,389 $ 1,486,395 $ 865,587 $ 591,562 $ 1,457,149 $ 11,960 $ 660,002 $ 671,962 (1) Changes in fair value are recognized in MSR valuation adjustments, net in the consolidated statements of operations. Portfolio of Assets Serviced The following table presents the composition of our primary servicing and subservicing portfolios as measured by UPB. The UPB amounts in the table below are not included on our consolidated balance sheets. UPB at December 31, 2019 2018 2017 Servicing (1) $ 76,657,932 $ 72,378,693 $ 75,469,327 Subservicing (1) 17,120,905 53,104,560 2,063,669 NRZ (1) (2) 118,587,594 130,517,237 101,819,557 $ 212,366,431 $ 256,000,490 $ 179,352,553 (1) UPB at December 31, 2018 includes $6.3 billion , $51.3 billion and $42.3 billion UPB of loans serviced, subserviced or subserviced on behalf of NRZ, respectively, added to the portfolio in connection with the PHH acquisition. (2) UPB of loans for which the Rights to MSRs have been sold to NRZ, including $57.7 billion for which third-party consents have been received and the MSRs have been transferred to NRZ (the MSRs remain on balance sheet as the transactions do not achieve sale accounting treatment). At December 31, 2019, the $118.6 billion NRZ UPB includes $6.6 billion of loans that are subserviced on behalf of NRZ and were added in 2019 by NRZ to the PMC subservicing agreement. This $6.6 billion loan UPB is not included in the MSR loan UPB or associated Rights to MSRs - See Note 10 — Rights to MSRs . On February 20, 2020, we received a notice of termination from NRZ with respect to the subservicing agreement between NRZ and PMC, which accounted for 20% of our servicing portfolio UPB at December 31, 2019. See Note 28 — Subsequent Events . We acquired MSRs on portfolios with a UPB of $14.6 billion and $144.1 million during 2019 and 2018 , respectively. We also sold MSRs with a UPB of $140.8 million , $901.3 million and $219.4 million during 2019 , 2018 and 2017 , respectively. A significant portion of the servicing agreements for our non-Agency servicing portfolio contain provisions where we could be terminated as servicer without compensation upon the failure of the serviced loans to meet certain portfolio delinquency or cumulative loss thresholds. To date, terminations as servicer as a result of a breach of any of these provisions have been minimal. At December 31, 2019 , the S&P Global Ratings, Inc.’s (S&P) and Fitch Ratings, Inc.’s (Fitch) servicer ratings outlook for both PMC is stable. Downgrades in servicer ratings could adversely affect our ability to service loans, sell or finance servicing advances and could impair our ability to consummate future servicing transactions or adversely affect our dealings with lenders, other contractual counterparties, and regulators, including our ability to maintain our status as an approved servicer by Fannie Mae and Freddie Mac. The servicer rating requirements of Fannie Mae do not necessarily require or imply immediate action, as Fannie Mae has discretion with respect to whether we are in compliance with their requirements and what actions it deems appropriate under the circumstances in the event that we fall below their desired servicer ratings. Certain of our servicing agreements require that we maintain specified servicer ratings from rating agencies such as Moody’s and S&P. As a result of our current servicer ratings, termination rights have been triggered in some non-Agency servicing agreements. To date, terminations as servicer as a result of a breach of any of these provisions have been minimal. The geographic concentration of the UPB of residential loans and real estate we serviced at December 31, 2019 was as follows: Amount Count California $ 47,350,699 189,959 New York 19,557,621 90,805 Florida 16,366,372 121,875 New Jersey 10,921,867 57,182 Texas 10,073,637 100,868 Other 108,096,235 859,254 $ 212,366,431 1,419,943 Years Ended December 31, Servicing Revenue 2019 2018 2017 Loan servicing and subservicing fees Servicing $ 227,490 $ 227,639 $ 259,640 Subservicing 15,459 8,904 7,775 NRZ 577,015 539,039 549,411 819,964 775,582 816,826 Late charges 57,194 61,453 61,763 Home Affordable Modification Program (HAMP) fees (1) 5,538 14,312 43,310 Custodial accounts (float earnings) 47,562 40,115 25,237 Loan collection fees 15,539 18,392 22,770 Other 29,710 27,229 21,691 $ 975,507 $ 937,083 $ 991,597 (1) The HAMP expired on December 31, 2016. Borrowers who had requested assistance or to whom an offer of assistance had been extended as of that date had until September 30, 2017 to finalize their modification. We continue to earn HAMP success fees for HAMP modifications that remain less than 90 days delinquent at the first-, second- and third-year anniversary of the start of the trial modification. Float balances (balances in custodial accounts, which represent collections of principal and interest that we receive from borrowers) are held in escrow by unaffiliated banks and are excluded from our consolidated balance sheets. Float balances amounted to $1.7 billion , $1.7 billion and $1.5 billion at December 31, 2019 , 2018 and 2017 , respectively. |
Rights to MSRs Rights to MSRs
Rights to MSRs Rights to MSRs | 12 Months Ended |
Dec. 31, 2019 | |
Transfers and Servicing [Abstract] | |
Rights to MSRs | Note 10 — Rights to MSRs Ocwen and PMC have entered into agreements to sell MSRs or Rights to MSRs and the related servicing advances to NRZ, and in all cases have been retained by NRZ as subservicer. In the case of Ocwen Rights to MSRs transactions, while the majority of the risks and rewards of ownership were transferred in 2012 and 2013, legal title was retained by Ocwen, causing the Rights to MSRs transactions to be accounted for as secured financings. In the case of the PMC transactions, and for those Ocwen MSRs where consents were subsequently received and legal title was transferred to NRZ, due to the length of the non-cancellable term of the subservicing agreements, the transactions do not qualify as a sale and are accounted for as secured financings. As a result, we continue to recognize the MSRs and related financing liability on our consolidated balance sheets, as well as the full amount of servicing revenue and changes in the fair value of the MSRs and related financing liability in our consolidated statements of operations. Changes in fair value of the Rights to MSRs are recognized in MSR valuation adjustments, net in the consolidated statements of operations. Changes in fair value of the MSR related financing liability are reported in Pledged MSR liability expense. The following tables present selected assets and liabilities recorded on our consolidated balance sheets as well as the impacts to our consolidated statements of operations in connection with our NRZ agreements. Years Ended December 31, 2019 2018 2017 Balance Sheets MSRs, at fair value $ 915,148 $ 894,002 $ 499,042 Due from NRZ (Receivables) Sales and transfers of MSRs (1) 24,167 23,757 — Advance funding, subservicing fees and reimbursable expenses 9,197 30,845 14,924 $ 33,364 $ 54,602 $ 14,924 Due to NRZ (Other liabilities) $ 63,596 $ 53,001 $ 98,493 Financing liability - MSRs pledged, at fair value Original Rights to MSRs Agreements $ 603,046 $ 436,511 $ 499,042 2017 Agreements and New RMSR Agreements (2) 35,445 138,854 9,249 PMC MSR Agreements 312,102 457,491 — $ 950,593 $ 1,032,856 $ 508,291 Statements of Operations Servicing fees collected on behalf of NRZ $ 577,015 $ 539,039 $ 549,411 Less: Subservicing fee retained 139,343 142,334 295,192 Net servicing fees remitted to NRZ 437,672 396,705 254,219 Less: Reduction (increase) in financing liability Changes in fair value: Original Rights to MSRs Agreements (229,198 ) 171 (83,300 ) 2017 Agreements and New RMSR Agreements (5,866 ) 14,369 42,018 PMC MSR Agreements 82,078 4,729 — (152,986 ) 19,269 (41,282 ) Years Ended December 31, 2019 2018 2017 Runoff and settlement: Original Rights to MSRs Agreements 48,729 58,837 57,264 2017 Agreements and New RMSR Agreements 101,003 134,509 1,926 PMC MSR Agreements 64,631 18,420 — 214,363 211,766 59,190 Other 4,206 (6,000 ) — Pledged MSR liability expense $ 372,089 $ 171,670 $ 236,311 (1) Balance represents the holdback of proceeds from PMC MSR sales and transfers to address indemnification claims and mortgage loan document deficiencies. These sales were executed by PMC prior to the acquisition date. (2) $35.4 million income is expected to be recognized for the year ended December 31, 2020 as a reduction in the pledged MSR liability. Year Ended December 31, 2019 Financing Liability - MSRs Pledged Original Rights to MSRs Agreements 2017 Agreements and New RMSR Agreements PMC MSR Agreements Total Beginning balance $ 436,511 $ 138,854 $ 457,491 $ 1,032,856 Additions — — 1,276 1,276 Sales — — 44 44 Changes in fair value: Original Rights to MSRs Agreements 229,198 — — 229,198 2017 Agreements and New RMSR Agreements — 5,866 — 5,866 PMC MSR Agreements — — (82,078 ) (82,078 ) Runoff and settlement: Original Rights to MSRs Agreements (48,730 ) — — (48,730 ) 2017 Agreements and New RMSR Agreements — (101,003 ) — (101,003 ) PMC MSR Agreements — — (64,631 ) (64,631 ) Calls (1): Original Rights to MSRs Agreements (13,933 ) — — (13,933 ) 2017 Agreements and New RMSR Agreements — (8,272 ) — (8,272 ) PMC MSR Agreements — — — — Ending balance $ 603,046 $ 35,445 $ 312,102 $ 950,593 Year Ended December 31, 2018 Financing Liability - MSRs Pledged Original Rights to MSRs Agreements 2017 Agreements and New RMSR Agreements PMC MSR Agreements Total Beginning balance $ 499,042 $ 9,249 $ — $ 508,291 Additions — — 667 667 Assumed in connection with the acquisition of PHH — — 481,020 481,020 Receipt of lump-sum cash payments — 279,586 — 279,586 Changes in fair value: Original Rights to MSRs Agreements (171 ) — — (171 ) 2017 Agreements and New RMSR Agreements — (14,369 ) — (14,369 ) PMC MSR Agreements — — (4,729 ) (4,729 ) Runoff and settlement: Original Rights to MSRs Agreements (58,837 ) — — (58,837 ) 2017 Agreements and New RMSR Agreements — (134,509 ) — (134,509 ) PMC MSR Agreements — — (18,420 ) (18,420 ) Calls (1): — — — Original Rights to MSRs Agreements (3,523 ) — — (3,523 ) 2017 Agreements and New RMSR Agreements — (1,103 ) — (1,103 ) PMC MSR Agreements — — (1,047 ) (1,047 ) Ending balance $ 436,511 $ 138,854 $ 457,491 $ 1,032,856 (1) Represents the carrying value of MSRs in connection with call rights exercised by NRZ, for MSRs transferred to NRZ under the 2017 Agreements and New RMSR Agreements, or by Ocwen at NRZ’s direction, for MSRs underlying the Original Rights to MSRs Agreements. Ocwen derecognizes the MSRs and the related financing liability upon collapse of the securitization. Ocwen Transactions Prior to the transfer of legal title under the Master Servicing Rights Purchase Agreement dated as of October 1, 2012, as amended, and certain Sale Supplements, as amended (collectively, the Original Rights to MSRs Agreements), Ocwen agreed to service the mortgage loans underlying the MSRs on the economic terms set forth in the Original Rights to MSRs Agreements. After the transfer of legal title as contemplated under the Original Rights to MSRs Agreements, Ocwen was to service the mortgage loans underlying the MSRs as subservicer on substantially the same economic terms. On July 23, 2017 and January 18, 2018, we entered into a series of agreements with NRZ that collectively modify, supplement and supersede the arrangements among the parties as set forth in the Original Rights to MSRs Agreements. The July 23, 2017 agreements, as amended, include a Master Agreement, a Transfer Agreement and the Subservicing Agreement between Ocwen and New Residential Mortgage LLC (NRM), a subsidiary of NRZ, relating to non-agency loans (the NRM Subservicing Agreement) (collectively, the 2017 Agreements) pursuant to which the parties agreed, among other things, to undertake certain actions to facilitate the transfer from Ocwen to NRZ of Ocwen’s legal title to the remaining MSRs that were subject to the Original Rights to MSRs Agreements and under which Ocwen would subservice mortgage loans underlying the MSRs for an initial term ending July 2022 (the Initial Term). On January 18, 2018, the parties entered into new agreements (including a Servicing Addendum) regarding the Rights to MSRs related to MSRs that remained subject to the Original Rights to MSRs Agreements as of January 1, 2018 and amended the Transfer Agreement (collectively, New RMSR Agreements) to accelerate the implementation of certain parts of our arrangements in order to achieve the intent of the 2017 Agreements sooner. Under the new agreements, following receipt of the required consents and transfer of the MSRs, Ocwen subservices the mortgage loans underlying the transferred MSRs pursuant to the 2017 Agreements and the August 2018 subservicing agreement with NewRez LLC dba Shellpoint Mortgage Servicing (Shellpoint) described below. Ocwen received lump-sum cash payments of $54.6 million and $279.6 million in September 2017 and January 2018 in accordance with the terms of the 2017 Agreements and New RMSR Agreements, respectively. These upfront payments generally represent the net present value of the difference between the future revenue stream Ocwen would have received under the Original Rights to MSRs Agreements and the future revenue stream Ocwen expects to receive under the 2017 Agreements and the New RMSR Agreements. We recognized the cash received as a financing liability that we are accounting for at fair value through the remaining term of the original agreements (April 2020). Changes in fair value are recognized in Pledged MSR liability expense in the consolidated statements of operations. On August 17, 2018, Ocwen and NRZ entered into certain amendments (i) to the New RMSR Agreements to include Shellpoint, a subsidiary of NRZ, as a party to which legal title to the MSRs could be transferred after related consents are received, (ii) to add a Subservicing Agreement between Ocwen and Shellpoint relating to non-agency loans (the Shellpoint Subservicing Agreement), (iii) to add an Agency Subservicing Agreement between Ocwen and NRM relating to agency loans (the Agency Subservicing Agreement), and (iv) to conform the New RMSR Agreements and the NRM Subservicing Agreement to certain of the terms of the Shellpoint Subservicing Agreement and the Agency Subservicing Agreement. At any time during the Initial Term, NRZ may terminate the Subservicing Agreements and Servicing Addendum for convenience, subject to Ocwen’s right to receive a termination fee and 180 days’ notice. The termination fee is calculated as specified in the Subservicing Agreements and Servicing Addendum, and is a discounted percentage of the expected revenues that would be owed to Ocwen over the remaining contract term based on certain portfolio run off assumptions. Following the Initial Term, NRZ may extend the term of the Subservicing Agreements and Servicing Addendum for additional three -month periods by providing proper notice. Following the Initial Term, the Subservicing Agreements and Servicing Addendum can be cancelled by Ocwen on an annual basis. NRZ and Ocwen have the ability to terminate the Subservicing Agreements and Servicing Addendum for cause if certain specified conditions occur. The terminations must be terminations in whole (i.e., cover all the loans under the relevant Subservicing Agreement or Servicing Addendum) and not in part, except for limited circumstances specified in the agreements. In addition, if NRZ terminates any of the NRM or Shellpoint Subservicing Agreements or the Servicing Addendum for cause, the other agreements will also terminate automatically. Under the terms of the Subservicing Agreements and Servicing Addendum, in addition to a base servicing fee, Ocwen receives certain ancillary fees, primarily late fees, loan modification fees and Speedpay ® fees. We may also receive certain incentive fees or pay penalties tied to various contractual performance metrics. NRZ receives all float earnings and deferred servicing fees related to delinquent borrower payments, as well as being entitled to receive certain real estate owned (REO) related income including REO referral commissions. As of December 31, 2019 , the UPB of MSRs subject to the Servicing Agreements and the New RMSR Agreements is $76.1 billion , including $18.5 billion for which title has not transferred to NRZ. We and NRZ are currently discussing various alternative arrangements for the servicing of these MSRs. As the third-party consents required for title to the MSRs to transfer were not obtained by May 31, 2019, the New RMSR Agreements set forth a process under which NRZ’s $18.5 billion Rights to MSRs may (i) be acquired by Ocwen at a price determined in accordance with the terms of the New RMSR Agreements, at the option of Ocwen, or (ii) be sold, together with Ocwen’s title to those MSRs, to a third party in accordance with the terms of the New RMSR Agreements, subject to an additional Ocwen option to acquire at a price based on the winning third-party bid rather than selling to the third party. If the Rights to MSRs are not transferred pursuant to these alternatives, then the Rights to MSRs will remain subject to the New RMSR Agreements. In addition, as noted above, during the Initial Term, NRZ has the right to terminate the $18.5 billion New RMSR Agreements for convenience, in whole but not in part, subject to payment of a termination fee and 180 days’ notice. If NRZ exercises this termination right, NRZ has the option of seeking (i) the transfer of the MSRs through a sale to a third party of its Rights to MSRs (together with a transfer of Ocwen’s title to those MSRs) or (ii) a substitute RMSR arrangement that substantially replicates the Rights to MSRs structure (a Substitute RMSR Arrangement) under which we would transfer title to the MSRs to a successor servicer and NRZ would continue to own the economic rights and obligations related to the MSRs. In the case of option (i), we have a purchase option as specified in the New RMSR Agreements. If NRZ is not able to sell the Rights to MSRs or establish a Substitute RMSR Arrangement with another servicer, NRZ has the right to revoke its termination notice and re-instate the Servicing Addendum or to establish a subservicing arrangement whereby the MSRs remaining subject to the New RMSR Agreements would be transferred to up to three subservicers who would subservice under Ocwen’s oversight. If such a subservicing arrangement were established, Ocwen would receive an oversight fee and reimbursement of expenses. We may also agree on alternative arrangements that are not contemplated under our existing agreements or that are variations of those contemplated under our existing agreements. PMC Transactions On December 28, 2016, PMC entered into an agreement to sell substantially all of its MSRs, and the related servicing advances, to NRM (the 2016 PMC Sale Agreement). In connection with this agreement, on December 28, 2016, PMC also entered into a subservicing agreement with NRZ, which was subsequently amended and restated as of March 29, 2019 (together with the 2016 PMC Sale Agreement, the PMC MSR Agreements). The PMC subservicing agreement has an initial term of three years from the initial transaction date of June 16, 2017, subject to certain transfer and termination provisions. The PMC subservicing agreement generates revenue based on a schedule of fees per loan per month that includes revenue adjustments for delinquent loans to cover the incremental cost associated with servicing such loans. As of December 31, 2019 , Ocwen serviced 278,909 loans (with a UPB of $35.5 billion ) under this arrangement, excluding loans added by NRZ in 2019, and recorded servicing fee revenues for 2019 and 2018 of $28.8 million and $7.4 million , respectively. In addition to the $35.5 billion in UPB of loans in the PMC subservicing agreement for which the MSR sale transaction did not achieve sale accounting treatment, PMC is also subservicing loans with approximately $6.6 billion in UPB at December 31, 2019 that NRZ added to the PMC subservicing agreement after NRZ acquired the MSRs from an unrelated party during 2019. Consistent with a subservicing relationship, no MSR or pledged MSR liability is recorded on our consolidated balance sheets for the $6.6 billion loan UPB. Through its acquisition of PHH on October 4, 2018, Ocwen added MSRs with $42.3 billion UPB related to the 2016 PMC Sale Agreement. As of December 31, 2019 , $2.7 billion UPB of MSRs and related advances remain to be sold to NRZ under this agreement. Ocwen and NRZ are in discussions regarding the disposition of these remaining assets. Subject to the payment of the applicable deboarding fee and proper notice, NRZ has the right to terminate an amount not to exceed 25% of the underlying mortgage loans (not including loans added by NRZ in 2019) being subserviced during the period from June 2019 through the end of the initial term in June 2020. The PMC subservicing agreement automatically renews for successive one -year terms unless either party provides notice of non-renewal in accordance with the PMC subservicing agreement, which is 180 days’ notice in the case of NRZ and nine months’ notice in the case of PMC. NRZ and PMC each also has the right to terminate the PMC subservicing agreement after the initial term without cause subject to 180 days’ notice in the case of NRZ and nine months’ notice in the case of PMC and, if NRZ elects to terminate, NRZ’s payment of deboarding fees. NRZ and PMC each has the ability to terminate the subservicing agreement for cause if certain specified conditions occur. On February 20, 2020, we received a notice of termination from NRZ with respect to the subservicing agreement between NRZ and PMC, which accounted for 20% of our servicing portfolio UPB at December 31, 2019. See Note 28 — Subsequent Events . |
Receivables
Receivables | 12 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
Receivables | Note 11 — Receivables December 31, 2019 2018 Servicing-related receivables: Government-insured loan claims $ 122,557 $ 105,258 Due from custodial accounts 27,175 9,060 Due from NRZ: Sales and transfers of MSRs 24,167 23,757 Advance funding, subservicing fees and reimbursable expenses 9,197 30,845 Reimbursable expenses 13,052 11,508 Other 4,970 7,754 201,118 188,182 Income taxes receivable 37,888 45,987 Other receivables 20,086 17,672 259,092 251,841 Allowance for losses (57,872 ) (53,579 ) $ 201,220 $ 198,262 At December 31, 2019 and 2018 , the allowance for losses related to receivables of our Servicing business. Allowance for losses related to defaulted FHA- or VA-insured loans repurchased from Ginnie Mae guaranteed securitizations and not subsequently sold to third-party investors (government-insured loan claims) was $56.9 million and $52.5 million at December 2019 and 2018, respectively. This allowance represents management’s estimate of incurred losses and is maintained at a level that management considers adequate based upon continuing assessments of collectibility, current trends, and historical loss experience. Allowance for Losses - Government-Insured Loan Claims Years Ended December 31, 2019 2018 2017 Beginning balance $ 52,497 $ 53,340 $ 53,258 Provision 29,034 37,352 40,424 Charge-offs and other, net (24,663 ) (38,195 ) (40,342 ) Ending balance $ 56,868 $ 52,497 $ 53,340 |
Premises and Equipment
Premises and Equipment | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Premises and Equipment | Note 12 — Premises and Equipment December 31, 2019 2018 Computer hardware $ 32,747 $ 34,240 Operating lease right-of-use assets 31,329 — Computer software 24,377 46,029 Leasehold improvements 22,019 27,798 Buildings 8,550 9,689 Office equipment 6,929 7,370 Furniture and fixtures 3,506 4,674 Other 44 818 129,501 130,618 Less accumulated depreciation and amortization (91,227 ) (97,201 ) $ 38,274 $ 33,417 |
Other Assets
Other Assets | 12 Months Ended |
Dec. 31, 2019 | |
Other Assets [Abstract] | |
Other Assets | Note 13 — Other Assets December 31, 2019 2018 Contingent loan repurchase asset $ 492,900 $ 302,581 Other prepaid expenses 21,996 27,647 Prepaid representation, warranty and indemnification claims - Agency MSR sale 15,173 15,173 Prepaid lender fees, net (1) 8,647 6,589 REO 8,556 7,368 Derivatives, at fair value 6,007 4,552 Deferred tax assets, net 2,169 5,289 Security deposits 2,163 2,278 Mortgage-backed securities, at fair value 2,075 1,502 Interest-earning time deposits 390 1,338 Other 3,164 5,250 $ 563,240 $ 379,567 (1) We amortize these costs to the earlier of the scheduled amortization date, contractual maturity date or prepayment date of the debt. |
Borrowings
Borrowings | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Borrowings | Note 14 — Borrowings Match Funded Liabilities December 31, 2019 December 31, 2018 Borrowing Type Maturity (1) Amorti-zation Date (1) Available Borrowing Capacity (2) Weighted Average Interest Rate (3) Balance Weighted Average Interest Rate (3) Balance Advance Financing Facilities Advance Receivables Backed Notes - Series 2015-VF5 (4) Dec. 2049 Dec. 2020 $ 9,445 3.36 $ 190,555 4.06 $ 216,559 Advance Receivables Backed Notes - Series 2016-T2 (5) Aug. 2049 Aug. 2019 — — — 2.99 235,000 Advance Receivables Backed Notes, Series 2018-T1 (5) Aug. 2049 Aug. 2019 — — — 3.50 150,000 Advance Receivables Backed Notes, Series 2018-T2 (5) Aug. 2050 Aug. 2020 — — — 3.81 150,000 Advance Receivables Backed Notes, Series 2019-T1 (5) Aug. 2050 Aug. 2020 — 2.62 185,000 — — Advance Receivables Backed Notes, Series 2019-T2 (5) Aug. 2051 Aug. 2021 — 2.53 285,000 — — Total Ocwen Master Advance Receivables Trust (OMART) 9,445 2.79 660,555 3.56 751,559 Ocwen Freddie Advance Funding (OFAF ) - Advance Receivables Backed Notes, Series 2015-VF1 (6) Jun. 2050 Jun. 2020 41,446 3.53 18,554 5.03 26,725 $ 50,891 2.81 % $ 679,109 3.61 % $ 778,284 (1) The amortization date of our facilities is the date on which the revolving period ends under each advance facility note and repayment of the outstanding balance must begin if the note is not renewed or extended. The maturity date is the date on which all outstanding balances must be repaid. In all of our advance facilities, there are multiple notes outstanding. For each note, after the amortization date, all collections that represent the repayment of advances pledged to the facility must be applied ratably to each outstanding amortizing note to reduce the balance and as such the collection of advances allocated to the amortizing note may not be used to fund new advances. (2) Borrowing capacity under the OMART and OFAF facilities is available to us provided that we have sufficient eligible collateral to pledge. At December 31, 2019 , none of the available borrowing capacity of our advance financing notes could be used based on the amount of eligible collateral. (3) 1ML was 1.76% and 2.50% at December 31, 2019 and 2018 , respectively. (4) On December 12, 2019, we renewed this facility through December 11, 2020 and borrowing capacity was reduced from $225.0 million to $200.0 million , with interest computed based on the lender’s cost of funds plus a margin. At December 31, 2019 , the weighted average interest margin was 136 bps. (5) On August 14, 2019, we issued two fixed-rate term notes of $185.0 million (Series 2019 T-1) and $285.0 million (Series 2019-T2) with amortization dates of August 17, 2020 and August 16, 2021, respectively, for a total combined borrowing capacity of $470.0 million . The weighted average rate of the notes at December 31, 2019 is 2.57% with rates on the individual classes of notes ranging from 2.42% to 4.44% . The Series 2016-T2, 2018-T1 and 2018-T2 fixed-rate term notes were all redeemed on August 15, 2019. (6) On June 6, 2019, we renewed this facility through June 5, 2020 and borrowing capacity was reduced from $65.0 million to $60.0 million with interest computed based on the lender’s cost of funds plus a margin. At December 31, 2019 , the weighted average interest margin was 157 bps. Pursuant to the 2017 Agreements and New RMSR Agreements, NRZ is obligated to fund new servicing advances with respect to the MSRs underlying the Rights to MSRs. We are dependent upon NRZ for funding the servicing advance obligations for Rights to MSRs where we are the servicer. As the servicer, we are contractually required under our servicing agreements to make certain servicing advances even if NRZ does not perform its contractual obligations to fund those advances. NRZ currently uses advance financing facilities in order to fund a substantial portion of the servicing advances that they are contractually obligated to purchase pursuant to our agreements with them. As of December 31, 2019 , we were the servicer of Rights to MSRs sold to NRZ pertaining to $18.5 billion in UPB, which excludes those Rights to MSRs where legal title has transferred to NRZ. NRZ’s associated outstanding servicing advances as of such date were approximately $704.2 million . Should NRZ’s advance financing facilities fail to perform as envisaged or should NRZ otherwise be unable to meet its advance funding obligations, our liquidity, financial condition, result of operations and business could be materially and adversely affected. As the servicer, we are contractually required under our servicing agreements to make certain servicing advances even if NRZ does not perform its contractual obligations to fund those advances. See Note 10 — Rights to MSRs for additional information. In addition, although we are not an obligor or guarantor under NRZ’s advance financing facilities, we are a party to certain of the facility documents as the servicer of the underlying loans on which advances are being financed. As the servicer, we make certain representations, warranties and covenants, including representations and warranties in connection with advances subsequently sold to, or reimbursed by, NRZ. Financing Liabilities Outstanding Balance at December 31, Borrowing Type Collateral Interest Rate Maturity 2019 2018 HMBS-Related Borrowings, at fair value (1) Loans held for investment 1ML + 260 bps (1) $ 6,063,435 $ 5,380,448 Other Financing Liabilities MSRs pledged (Rights to MSRs), at fair value: Original Rights to MSRs Agreements MSRs (2) (2) 603,046 436,511 2017 Agreements and New RMSR Agreements MSRs (3) (3) 35,445 138,854 PMC MSR Agreements MSRs (4) (4) 312,102 457,491 950,593 1,032,856 Financing liability - Owed to securitization investors, at fair value: IndyMac Mortgage Loan Trust (INDX 2004-AR11) (5) Loans held for investment (5) (5) 9,794 11,012 Residential Asset Securitization Trust 2003-A11 (RAST 2003-A11) (5) Loans held for investment (5) (5) 12,208 13,803 22,002 24,815 Advances pledged (6) Advances on loans (6) — 4,419 Total Other financing liabilities 972,595 1,062,090 $ 7,036,030 $ 6,442,538 (1) Represents amounts due to the holders of beneficial interests in Ginnie Mae guaranteed HMBS which did not qualify for sale accounting treatment of HECM loans. Under this accounting treatment, the HECM loans securitized with Ginnie Mae remain on our consolidated balance sheet and the proceeds from the sale are recognized as a secured liability. The beneficial interests have no maturity dates, and the borrowings mature as the related loans are repaid. We elected to record the HMBS-related borrowings at fair value consistent with the related HECM loans. Changes in fair value are reported within Reverse mortgage revenue, net. (2) This pledged MSR liability is recognized due to the accounting treatment of MSR sale transactions with NRZ which did not qualify as sales for accounting purposes. Under this accounting treatment, the MSRs transferred to NRZ remain on the consolidated balance sheet and the proceeds from the sale are recognized as a secured liability. This financing liability has no contractual maturity or repayment schedule. We elected to record the liability at fair value consistent with the related MSRs. The balance of the liability is adjusted each reporting period to its fair value based on the present value of the estimated future cash flows underlying the related MSRs. Changes in fair value are reported within Pledged MSR liability expense, and are offset by corresponding changes in fair value of the MSR pledged to NRZ within MSR valuation adjustments, net. (3) This financing liability arose in connection with lump sum payments of $54.6 million received upon transfer of legal title of the MSRs related to the Rights to MSRs transactions to NRZ in September 2017. In connection with the execution of the New RMSR Agreements in January 2018, we received a lump sum payment of $279.6 million as compensation for foregoing certain payments under the Original Rights to MSRs Agreements. The balance of the liability is adjusted each reporting period to its fair value based on the present value of the estimated future cash flows. The expected maturity of the liability is April 30, 2020, the date through which we were scheduled to be the servicer on loans underlying the Rights to MSRs per the Original Rights to MSRs Agreements. (4) Represents a liability for sales of MSRs to NRZ which did not qualify for sale accounting treatment and are accounted for as a secured borrowing which we assumed in connection with the acquisition of PHH. Under this accounting treatment, the MSRs transferred to NRZ remain on the consolidated balance sheet and the proceeds from the sale are recognized as a secured liability. We elected to record the liability at fair value consistent with the related MSRs. (5) Consists of securitization debt certificates due to third parties that represent beneficial interests in trusts that we include in our consolidated financial statements, as more fully described in Note 4 — Securitizations and Variable Interest Entities . The holders of these certificates have no recourse against the assets of Ocwen. The certificates in the INDX 2004-AR11 Trust pay interest based on variable rates which are generally based on weighted average net mortgage rates and which range between 3.39% and 3.85% at December 31, 2019 . The certificates in the RAST 2003-A11 Trust pay interest based on fixed rates ranging between 4.25% and 5.75% and a variable rate based on 1ML plus 0.45% . The maturity of the certificates occurs upon maturity of the loans held by the trust. The remaining loans in the INDX 2004-AR11 Trust and RAST 2003-A11 Trust have maturity dates extending through November 2034 and October 2033, respectively. (6) Certain sales of advances did not qualify for sales accounting treatment and were accounted for as a financing. This financing liability has no contractual maturity. The effective interest rate is based on 1ML plus a margin of 450 bps. Other Secured Borrowings Outstanding Balance at December 31, Borrowing Type Collateral Interest Rate Termination / Maturity Available Borrowing Capacity (1) 2019 2018 SSTL (2) (2) 1-Month Euro-dollar rate + 500 bps with a Eurodollar floor of 100 bps (2) Dec. 2020 $ — $ 326,066 $ 231,500 Mortgage loan warehouse facilities Master repurchase agreement (3) Loans held for sale (LHFS) 1ML + 195 - 300 bps Sep. 2020 8,427 91,573 74,693 Participation agreements (4) LHFS N/A Jul. 2019 — — 42,331 Mortgage warehouse agreement (5) LHFS (reverse mortgages) 1ML + 250 bps; 1ML floor of 350 bps Aug. 2020 — 72,443 8,009 Master repurchase agreement (6) LHFS (forward and reverse mortgages) 1ML + 225 bps forward; 1ML + 275 bps reverse Dec. 2020 60,773 139,227 30,680 Master repurchase agreement (7) LHFS (reverse mortgages) Prime - 0.25% (3.75% floor) Jan. 2020 — 898 — Master repurchase agreement (8) N/A 1ML + 170 bps N/A — — — Participation agreement (9) LHFS (9) Feb. 2020 — 17,304 — Mortgage warehouse agreement (10) LHFS (reverse mortgages) 1ML + 350 bps; 1ML floor of 525 bps Dec. 2020 39,220 10,780 — 108,420 332,225 155,713 Other Secured Borrowings Outstanding Balance at December 31, Borrowing Type Collateral Interest Rate Termination / Maturity Available Borrowing Capacity (1) 2019 2018 Agency MSR financing facility (11) MSRs 1ML + 300 bps Jun. 2020 152,294 147,706 — Ginnie Mae MSR financing facility (12) MSRs 1ML + 395 bps Nov. 2021 27,680 72,320 — Ocwen Excess Spread-Collateralized Notes, Series 2019-PLS1 (13) MSRs 5.07% Nov. 2024 — 94,395 — Ocwen Asset Servicing Income Series Notes, Series 2014-1 (14) MSRs (14) Feb. 2028 — 57,594 65,523 179,974 372,015 65,523 $ 288,394 1,030,306 452,736 Unamortized debt issuance costs - SSTL and PLS Notes (3,381 ) (3,098 ) Discount - SSTL (1,134 ) (1,577 ) $ 1,025,791 $ 448,061 Weighted average interest rate 4.74 % 4.70 % (1) Available borrowing capacity for our mortgage loan warehouse facilities does not consider the amount of the facility that the lender has extended on an uncommitted basis. Of the borrowing capacity extended on a committed basis, none of the available borrowing capacity could be used at December 31, 2019 based on the amount of eligible collateral that could be pledged. (2) On March 18, 2019, we entered into a Joinder and Amendment Agreement which amends the existing Amended and Restated SSTL Facility Agreement dated December 5, 2016 to provide an additional term loan of $120.0 million subject to the same maturity, interest rate and other material terms of existing borrowings under the SSTL. Effective with this amendment, the quarterly principal payment increased from $4.2 million to $6.4 million beginning March 31, 2019. See information regarding collateral in the table below. Borrowings bear interest, at the election of Ocwen, at a rate per annum equal to either (a) the base rate (the greatest of (i) the prime rate in effect on such day , (ii) the federal funds rate in effect on such day plus 0.50% and (iii) 1ML , plus a margin of 4.00% and subject to a base rate floor of 2.00% or (b) 1ML , plus a margin of 5.00% and subject to a 1ML floor of 1.00% . To date we have elected option (b) to determine the interest rate. On January 27, 2020, we prepaid $126.1 million of the outstanding balance at December 31, 2019 and executed an additional amendment to the SSTL which reduced the maximum borrowing capacity to $200.0 million , extended the maturity date to May 15, 2022, reduced the quarterly principal payment to $5.0 million and modified the interest rate. See Note 28 — Subsequent Events for additional information. (3) The maximum borrowing under this agreement is $175.0 million , of which $100.0 million is available on a committed basis and the remainder is available at the discretion of the lender. On September 27, 2019, we renewed this facility through September 25, 2020. (4) Effective with the mergers of Homeward Residential, Inc. (Homeward) into PMC in February 2019 and Ocwen Loan Servicing, LLC (OLS) into PMC in June 2019, the participation agreements with total uncommitted borrowing capacity of $250.0 million were terminated. (5) Under this participation agreement, the lender provides financing for $100.0 million on an uncommitted basis. The participation agreement allows the lender to acquire a 100% beneficial interest in the underlying mortgage loans. The transaction does not qualify for sale accounting treatment and is accounted for as a secured borrowing. On August 13, 2019, we renewed this facility through August 14, 2020. (6) On December 6, 2019, we renewed this facility through December 5, 2020. The maximum borrowing under this agreement is $250.0 million , of which $200.0 million is available on a committed basis and the remainder is available on an uncommitted basis. The agreement allows the lender to acquire a 100% beneficial interest in the underlying mortgage loans. The transaction does not qualify for sale accounting treatment and is accounted for as a secured borrowing. (7) Under this agreement, t he lender provides financing for up to $50.0 million on an uncommitted basis. This facility expired on January 22, 2020 and was not renewed. (8) This agreement was originally entered into by PHH and subsequently assumed by Ocwen in connection with its acquisition of PHH. T he lender provides financing for up to $200.0 million at the discretion of the lender. The agreement has no stated maturity date. (9) We entered into a master participation agreement on February 4, 2019 under which the lender will provide $300.0 million of borrowing capacity to PMC on an uncommitted basis. The participation agreement allows the lender to acquire a 100% beneficial interest in the underlying mortgage loans. The transaction does not qualify for sale accounting treatment and is accounted for as a secured borrowing. The lender earns the stated interest rate of the underlying mortgage loans less 25 bps while the loans are financed under the participation agreement. On January 27, 2020, we renewed this facility through April 3, 2020. (10) On December 26, 2019, PMC entered into a warehouse facility. Under this agreement, t he lender provides financing for up to $50.0 million on a committed basis. The lender earns the stated interest rate of 1ML plus a margin of 350 bps . (11) On July 1, 2019, PMC entered into a financing facility that is secured by certain Fannie Mae and Freddie Mac MSRs. In connection with this facility, PMC entered into repurchase agreements pursuant to which PMC sold trust certificates representing certain indirect economic interests in the MSRs and agreed to repurchase such trust certificates at a future date at the repurchase price set forth in the repurchase agreements. PMC’s obligations under this facility are secured by a lien on the related MSRs. Ocwen guarantees the obligations of PMC under this facility. The maximum amount which we may borrow pursuant to the repurchase agreements is $300.0 million on a committed basis. The lender earns the stated interest rate of 1ML plus a margin of 300 bps . See Note 4 — Securitizations and Variable Interest Entities for additional information. (12) On November 26, 2019, PMC entered into a financing facility that is secured by certain Ginnie Mae MSRs. In connection with the facility, PMC entered into a repurchase agreement pursuant to which PMC has sold a participation certificate representing certain economic interests in the Ginnie Mae MSRs and has agreed to repurchase such participation certificate at a future date at the repurchase price set forth in the repurchase agreement. PMC’s obligations under the facility are secured by a lien on the related Ginnie Mae MSRs. Ocwen guarantees the obligations of PMC under the facility. The maximum amount available to be borrowed pursuant to the facility is $27.7 million on a committed basis. The lender earns the stated interest rate of 1ML plus a margin of 395 bps . (13) On November 26, 2019, PMC issued the PLS Notes secured by certain of PMC’s MSRs (PLS MSRs) pursuant to a credit agreement. PLS Issuer’s obligations under the facility are secured by a lien on the related PLS MSRs. Ocwen guarantees the obligations of PLS Issuer under the facility. The Class A PLS Notes issued pursuant to the credit agreement have an initial principal amount of $100.0 million and amortize in accordance with a pre-determined schedule subject to modification under certain events. The notes have a stated coupon rate of 5.07% . See Note 4 — Securitizations and Variable Interest Entities for additional information. (14) OASIS noteholders are entitled to receive a monthly payment equal to the sum of: (a) 21 basis points of the UPB of the reference pool of Freddie Mac mortgages; (b) any termination payment amounts; (c) any excess refinance amounts; and (d) the note redemption amounts, each as defined in the indenture supplement for the notes. Monthly amortization of the liability is estimated using the proportion of monthly projected service fees on the underlying MSRs as a percentage of lifetime projected fees, adjusted for the term of the notes. Senior Notes Outstanding Balance at December 31, Interest Rate Maturity 2019 2018 Senior unsecured notes: PHH (1) (2) 7.375% Sep. 2019 $ — $ 97,521 PHH (2) 6.375% Aug. 2021 21,543 21,543 21,543 119,064 Senior secured notes (3) 8.375% Nov. 2022 291,509 330,878 313,052 449,942 Unamortized debt issuance costs (1,470 ) (2,075 ) Fair value adjustments (2) (497 ) 860 $ 311,085 $ 448,727 (1) On September 2, 2019, we redeemed all of the Senior unsecured notes due in September 2019, at a redemption price of 100.0% of the outstanding principal balance plus accrued and unpaid interest. (2) These notes were originally issued by PHH and subsequently assumed by Ocwen in connection with its acquisition of PHH. We recorded the notes at their respective fair values on the date of acquisition, and we are amortizing the resulting fair value purchase accounting adjustments over the remaining term of the notes. We have the option to redeem the notes due in August 2021, in whole or in part, on or after January 1, 2019 at a redemption price equal to 100.0% of the principal amount plus any accrued and unpaid interest. (3) During July and August 2019, we repurchased a total of $39.4 million of our 8.375% Senior secured notes in the open market for a price of $34.3 million . We recognized a gain of $5.1 million on these repurchases which is reported in Gain on repurchases of senior secured notes in the consolidated statement of operations. At any time, we may redeem all or a part of the 8.375% Senior secured notes, upon not less than 30 nor more than 60 days’ notice at a specified redemption price, plus accrued and unpaid interest to the date of redemption. We may redeem all or a part of these notes at the redemption prices (expressed as percentages of principal amount) specified in the Indenture. The redemption prices during the twelve-month periods beginning on November 15 th of each year are as follows: Year Redemption Price 2018 106.281 % 2019 104.188 2020 102.094 2021 and thereafter 100.000 Upon a change of control (as defined in the Indenture), we are required to make an offer to the holders of the 8.375% Senior secured notes to repurchase all or a portion of each holder’s notes at a purchase price equal to 101.0% of the principal amount of the notes purchased plus accrued and unpaid interest to the date of purchase. The Indenture contains certain covenants, including, but not limited to, limitations and restrictions on Ocwen’s ability and the ability of its restricted subsidiaries (including PMC as the surviving entity in the merger with OLS) to (i) incur additional debt or issue preferred stock; (ii) pay dividends or make distributions on or purchase equity interests of Ocwen (iii) repurchase or redeem subordinated debt prior to maturity; (iv) make investments or other restricted payments; (v) create liens on assets to secure debt of PMC or any Guarantor; (vi) sell or transfer assets; (vii) enter into transactions with affiliates; and (viii) enter into mergers, consolidations, or sales of all or substantially all of the assets of Ocwen and its restricted subsidiaries, taken as a whole. As of the date of the Indenture, all of Ocwen’s subsidiaries are restricted subsidiaries. The restrictive covenants set forth in the Indenture are subject to important exceptions and qualifications. Many of the restrictive covenants will be suspended if (i) the Senior Secured Notes achieve an investment grade rating from both Moody’s and S&P and (ii) no default or event of default has occurred and is continuing under the Indenture. Covenants that are suspended as a result of achieving these ratings will again apply if one or both of Moody’s and S&P withdraws its investment grade rating or downgrades the rating assigned to the Senior Secured Notes below an investment grade rating. Credit Ratings Credit ratings are intended to be an indicator of the creditworthiness of a company’s debt obligation. At December 31, 2019 , the S&P issuer credit rating for Ocwen was “B-”. On June 1, 2019, OLS, the borrower under the SSTL and 8.375% Senior secured notes, merged with PMC which became the successor obligor for these borrowings. As a result, on July 3, 2019, S&P withdrew the ratings of OLS and assigned a B- issuer credit rating with Negative outlook to PMC. On January 27, 2020 S&P upgraded the outlook for the issuer rating from Negative to Stable simultaneously with the closing of the SSTL transaction. On September 11, 2019 Moody’s withdrew the Caa1 corporate family rating of Ocwen as it no longer maintained any rated debt outstanding and issued a corporate family rating of Caa1 with negative outlook to PMC. It is possible that additional actions by credit rating agencies could have a material adverse impact on our liquidity and funding position, including materially changing the terms on which we may be able to borrow money. Covenants Under the terms of our debt agreements, we are subject to various qualitative and quantitative covenants. Collectively, these covenants include: • Financial covenants; • Covenants to operate in material compliance with applicable laws; • Restrictions on our ability to engage in various activities, including but not limited to incurring additional forms of debt, paying dividends or making distributions on or purchasing equity interests of Ocwen, repurchasing or redeeming capital stock or junior capital, repurchasing or redeeming subordinated debt prior to maturity, issuing preferred stock, selling or transferring assets or making loans or investments or acquisitions or other restricted payments, entering into mergers or consolidations or sales of all or substantially all of the assets of Ocwen and its subsidiaries, creating liens on assets to secure debt of any guarantor, entering into transactions with affiliates; • Monitoring and reporting of various specified transactions or events, including specific reporting on defined events affecting collateral underlying certain debt agreements; and • Requirements to provide audited financial statements within specified timeframes, including requirements that Ocwen’s financial statements and the related audit report be unqualified as to going concern. Many of the restrictive covenants arising from the indenture for the Senior Secured Notes will be suspended if the Senior Secured Notes achieve an investment-grade rating from both Moody’s and S&P and if no default or event of default has occurred and is continuing. Financial covenants in certain of our debt agreements require that we maintain, among other things: • a 40% loan to collateral value ratio (i.e., the ratio of total outstanding loans under the SSTL to certain collateral and other assets as defined under the SSTL) as of the last date of any fiscal quarter; and • specified levels of tangible net worth and liquidity at the consolidated Ocwen level. Certain new financial covenants were added as part of the amendment and extension of our SSTL which closed on January 27, 2020. These include i) maintain a minimum unencumbered asset coverage ratio (i.e., the ratio of unrestricted cash and certain first priority perfected collateral to total outstanding loans under the SSTL) as of the last day of any fiscal quarter of 200% increasing to 225% after December 31, 2020 and ii) maintain minimum unrestricted cash of $125.0 million as of the last day of each fiscal quarter. As of December 31, 2019 , the most restrictive consolidated tangible net worth requirements contained in our debt agreements were for a minimum of $200.0 million in consolidated tangible net worth, as defined, under certain of our match funded debt, MSR financing facilities and mortgage warehouse agreements. The most restrictive liquidity requirements were for a minimum of $100.0 million in consolidated liquidity, as defined, under certain of our match funded debt and mortgage warehouse agreements. As a result of the covenants to which we are subject, we may be limited in the manner in which we conduct our business and may be limited in our ability to engage in favorable business and investment activities or raise certain types of capital to finance future operations or satisfy future liquidity needs. In addition, breaches or events that may result in a default under our debt agreements include, among other things, nonpayment of principal or interest, noncompliance with our covenants, breach of representations, the occurrence of a material adverse change, insolvency, bankruptcy, certain material judgments and changes of control. Covenants and default provisions of this type are commonly found in debt agreements such as ours. Certain of these covenants and default provisions are open to subjective interpretation and, if our interpretation was contested by a lender, a court may ultimately be required to determine compliance or lack thereof. In addition, our debt agreements generally include cross default provisions such that a default under one agreement could trigger defaults under other agreements. If we fail to comply with our debt agreements and are unable to avoid, remedy or secure a waiver of any resulting default, we may be subject to adverse action by our lenders, including termination of further funding, acceleration of outstanding obligations, enforcement of liens against the assets securing or otherwise supporting our obligations and other legal remedies. Our lenders can waive their contractual rights in the event of a default. We believe we were in compliance with all of the qualitative and quantitative covenants in our debt agreements as of the date of these financial statements. Collateral Our assets held as collateral related to secured borrowings, committed under sale or other contractual obligations and which may be subject to secured liens under the SSTL and Senior Secured Notes are as follows at December 31, 2019 : Collateral for Secured Borrowings Total Assets Match Funded Liabilities Financing Liabilities Mortgage Loan Warehouse/MSR Facilities Sales and Other Commitments (1) Other (2) Cash $ 428,339 $ — $ — $ — $ — $ 428,339 Restricted cash 64,001 17,332 — 5,944 40,725 — MSRs (3) 1,486,395 — 915,148 575,471 — 525 Advances, net 254,533 — — — 28,737 225,796 Match funded assets 801,990 801,990 — — — — Loans held for sale 275,269 — — 236,517 — 38,752 Loans held for investment 6,292,938 — 6,144,275 115,130 — 33,533 Receivables, net 201,220 — — 24,795 — 176,425 Premises and equipment, net 38,274 — — — — 38,274 Other assets 563,240 — — 5,285 510,236 47,719 Total Assets $ 10,406,199 $ 819,322 $ 7,059,423 $ 963,142 $ 579,698 $ 989,363 (1) Sales and Other Commitments include MSRs and related advances committed under sale agreements, Restricted cash and deposits held as collateral to support certain contractual obligations, and Contingent loan repurchase assets related to the Ginnie Mae EBO program for which a corresponding liability is recognized in Other liabilities. (2) The borrowings under the SSTL are secured by a first priority security interest in substantially all of the assets of Ocwen, PHH, PMC and the other guarantors thereunder, excluding among other things, 35% of the voting capital stock of foreign subsidiaries, securitization assets and equity interests of securitization entities, assets securing permitted funding indebtedness and non-recourse indebtedness, REO assets, as well as other customary carve-outs (collectively, the Collateral). The Collateral is subject to certain permitted liens set forth under the SSTL and related security agreement. The Senior Secured Notes are guaranteed by Ocwen and the other guarantors that guarantee the SSTL, and the borrowings under the Senior Secured Notes are secured by a second priority security interest in the Collateral. Assets securing borrowings under the SSTL and Senior Secured Notes may include amounts presented in Other as well as certain assets presented in Collateral for Secured Borrowings and Sales and Other Commitments, subject to permitted liens as defined in the applicable debt documents. The amounts presented here may differ in their calculation and are not intended to represent amounts that may be used in connection with covenants under the applicable debt documents. (3) MSRs pledged as collateral for secured borrowings includes MSRs pledged to NRZ in connection with the Rights to MSRs transactions which are accounted for as secured financings and MSRs securing the financing facilities. Certain MSR cohorts with a negative fair value of $4.7 million that would be presented as Other are excluded from the eligible collateral of the facilities and are comprised of $27.9 million of negative fair value related to RMBS and $23.2 million of positive fair value related to private EBO and PLS MSRs. Maturities of Borrowings and Management’s Plans to Address Maturing Borrowings Certain of our borrowings mature within one year of the date of issuance of these financial statements. Based on management’s evaluation, we expect to renew, replace or extend all such borrowings to the extent necessary to finance our business on or prior to their respective maturities consistent with our historical experience. Expected Maturity Date (1) (2) (3) 2020 2021 2022 2023 2024 Thereafter Total Fair Match funded liabilities $ 394,109 $ 285,000 $ — $ — $ — $ — $ 679,109 $ 679,507 Other secured borrowings 832,078 98,971 41,663 — — 57,594 1,030,306 1,010,789 Senior notes — 21,543 291,509 — — — 313,052 270,022 $ 1,226,187 $ 405,514 $ 333,172 $ — $ — $ 57,594 $ 2,022,467 $ 1,960,318 (1) Amounts are exclusive of any related discount, unamortized debt issuance costs or fair value adj |
Other Liabilities
Other Liabilities | 12 Months Ended |
Dec. 31, 2019 | |
Other Liabilities Disclosure [Abstract] | |
Other Liabilities | Note 15 — Other Liabilities December 31, 2019 2018 Contingent loan repurchase liability $ 492,900 $ 302,581 Servicing-related obligations 88,167 41,922 Other accrued expenses 67,241 94,835 Due to NRZ - Advance collections and servicing fees 63,596 53,001 Liability for indemnification obligations 52,785 51,574 Lease liability 44,488 — Checks held for escheat 31,959 20,686 Accrued legal fees and settlements 30,663 62,763 Liability for uncertain tax positions 17,197 13,739 Liability for unfunded pension obligation 13,383 12,683 Accrued interest payable 5,964 7,209 Liability for mortgage insurance contingency 6,820 6,820 Liability for unfunded India gratuity plan 5,331 4,904 Deferred revenue 488 4,441 Derivatives, at fair value 100 4,986 Other 21,091 21,492 $ 942,173 $ 703,636 Accrued Legal Fees and Settlements Years Ended December 31, 2019 2018 2017 Beginning balance $ 62,763 $ 51,057 $ 93,797 Accrual for probable losses (1) 3,011 19,774 131,113 Payments (2) (30,356 ) (12,983 ) (174,941 ) Assumed in connection with the acquisition of PHH — 9,960 — Issuance of common stock in settlement of litigation (3) — (5,719 ) (1,937 ) Net increase (decrease) in accrued legal fees (4,884 ) (1,917 ) 482 Other 129 2,591 2,543 Ending balance $ 30,663 $ 62,763 $ 51,057 (1) Consists of amounts accrued for probable losses in connection with legal and regulatory settlements and judgments. Such amounts are reported in Professional services expense in the consolidated statements of operations. (2) Includes cash payments made in connection with resolved legal and regulatory matters. (3) See Note 16 — Equity for additional information. |
Equity
Equity | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Equity | Note 16 — Equity Common Stock In 2017, Ocwen and NRZ entered into a share purchase agreement pursuant to which Ocwen sold NRZ 6,075,510 shares of newly-issued Ocwen common stock for $13.9 million . Ocwen received the sales proceeds from NRZ on July 24, 2017 and issued the shares. The shares have not been registered under the Securities Act of 1933 and were issued and sold in reliance upon the exemption from registration contained in Section 4(a)(2) of the Act and Rule 506(b) promulgated thereunder. In 2017, Ocwen agreed to issue an aggregate of 2,500,000 shares of common stock in connection with a mediated settlement of litigation. Ocwen issued 625,000 of the shares in December 2017 and the remaining 1,875,000 shares in January 2018. The shares have not been registered under the Securities Act of 1933 and were issued in reliance upon the exemption from registration set forth in Section 3(a)(10) of the Act. Accumulated Other Comprehensive Loss The components of accumulated other comprehensive loss (AOCL), net of income taxes, were as follows: December 31, 2019 2018 Unfunded pension plan obligation, net $ 6,789 $ 3,347 Unrealized losses on cash flow hedges, net 832 979 Other (27 ) (69 ) $ 7,594 $ 4,257 |
Derivative Financial Instrument
Derivative Financial Instruments and Hedging Activities | 12 Months Ended |
Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments and Hedging Activities | Note 17 — Derivative Financial Instruments and Hedging Activities The following table summarizes derivative activity, including the derivatives used in each of our identified hedging programs. The notional amount of our contracts does not represent our exposure to credit loss. None of the derivatives were designated as a hedge for accounting purposes as of or during the years ended December 31, 2019 , 2018 and 2017 : Interest Rate Risk MSR Hedging IRLCs and Loans Held for Sale Borrowings IRLCs TBA / Forward MBS Trades Forward Trades Interest Rate Caps Notional balance at December 31, 2019 $ 232,566 $ 1,200,000 $ 60,000 $ 27,083 Maturity Jan. 2020 - Mar. 2020 Jan. 2020 - Mar. 2020 Jan. 2020 May 2020 Fair value of derivative assets (liabilities) at: December 31, 2019 $ 4,878 1,121 $ (92 ) $ — December 31, 2018 3,871 — (4,983 ) 678 Gains (losses) on derivatives during the years ended: Gain on loans held for sale, net MSR valuation adjustments, net Gain on loans held for sale, net Other, net December 31, 2019 $ 756 525 $ (2,689 ) $ (358 ) December 31, 2018 3,809 — 136 (841 ) We report derivatives at fair value in Other assets or in Other liabilities on our consolidated balance sheets. Derivative instruments are generally entered into as economic hedges against changes in the fair value of a recognized asset or liability and are not designated as hedges for accounting purposes. We report the changes in fair value of such derivative instruments in the same line item in the consolidated statement of operations as the changes in fair value of the related asset or liability. For all other derivative instruments not designated as a hedging instrument, we report changes in fair value in Other, net. Foreign Currency Exchange Rate Risk Our operations in India and the Philippines expose us to foreign currency exchange rate risk to the extent that our foreign exchange positions remain unhedged. We have not entered into any forward exchange contracts during the reported periods to hedge against the effect of changes in the value of the India Rupee or Philippine Peso. Foreign currency remeasurement exchange gains (losses) were $(0.2) million , $(3.2) million and $1.7 million during the years ended December 31, 2019 , 2018 and 2017 , respectively, and are reported in Other, net in the consolidated statements of operations. Interest Rate Risk MSR Hedging MSRs are carried at fair value with changes in fair value being recorded in earnings in the period in which the changes occur. The fair value of MSRs is subject to changes in market interest rates and prepayment speeds, among other factors. Beginning in September 2019, management implemented a hedging strategy to partially offset the changes in fair value of our net MSR portfolio to interest rate changes. We define our net MSR portfolio exposure as follows: • our more interest rate-sensitive Agency MSR portfolio, • less the Agency MSRs subject to our agreements with NRZ (See Note 10 — Rights to MSRs ), • less the asset value for securitized HECM loans, net of the corresponding HMBS-related borrowings, and • less the net value of our held for sale loan portfolio and interest rate lock commitments (pipeline). We determine and monitor daily a hedge coverage based on the duration and interest rate sensitivity measures of our net MSR portfolio exposure, considering market and liquidity conditions. At December 31, 2019 , our hedging strategy provides for a partial coverage of our net MSR portfolio exposure. We use forward trades of MBS or Agency TBAs with different banking counterparties as hedging instruments that are not designated as accounting hedges. TBAs, or To-Be-Announced securities are actively traded, forward contracts to purchase or sell Agency MBS on a specific future date. We report changes in fair value of these derivative instruments in MSR valuation adjustments, net in our consolidated statements of operations. The TBAs are subject to margin requirements. Ocwen may be required to post or may be entitled to receive cash collateral with its counterparties, based on daily value changes of the instruments. Changes in market factors, including interest rates, and our credit rating could require us to post additional cash collateral and could have a material adverse impact on our financial condition and liquidity. Interest Rate Lock Commitments A loan commitment binds us (subject to the loan approval process) to fund the loan at the specified rate, regardless of whether interest rates have changed between the commitment date and the loan funding date. As such, outstanding IRLCs are subject to interest rate risk and related price risk during the period from the date of the commitment through the loan funding date or expiration date. The borrower is not obligated to obtain the loan; thus, we are subject to fallout risk related to IRLCs, which is realized if approved borrowers choose not to close on the loans within the terms of the IRLCs. Our interest rate exposure on these derivative loan commitments had previously been economically hedged with freestanding derivatives such as forward contracts. Beginning in September 2019, this exposure is not individually hedged, but rather used as an offset to our MSR exposure and managed as part of our MSR hedging strategy described above. Loans Held for Sale, at Fair Value Mortgage loans held for sale that we carry at fair value are subject to interest rate and price risk from the loan funding date until the date the loan is sold into the secondary market. Generally, the fair value of a loan will decline in value when interest rates increase and will rise in value when interest rates decrease. To mitigate this risk, we had previously entered into forward MBS trades to provide an economic hedge against those changes in fair value on mortgage loans held for sale. Forward MBS trades were primarily used to fix the forward sales price that would be realized upon the sale of mortgage loans into the secondary market. Beginning in September 2019, this exposure is not individually hedged, but rather used as an offset to our MSR exposure and managed as part of our MSR hedging strategy described above. Match Funded Liabilities When required by our advance financing arrangements, we purchase interest rate caps to minimize future interest rate exposure from increases in the interest on our variable rate debt as a result of increases in the index, such as 1ML, which is used in determining the interest rate on the debt. We currently do not hedge our fixed-rate debt. |
Interest Income
Interest Income | 12 Months Ended |
Dec. 31, 2019 | |
Other Income and Expenses [Abstract] | |
Interest Income | Note 18 — Interest Income Years Ended December 31, 2019 2018 2017 Loans held for sale $ 14,669 $ 10,756 $ 11,100 Interest earning cash deposits and other 2,435 2,850 1,796 Automotive dealer financing notes — 420 3,069 $ 17,104 $ 14,026 $ 15,965 |
Interest Expense
Interest Expense | 12 Months Ended |
Dec. 31, 2019 | |
Other Income and Expenses [Abstract] | |
Interest Expense | Note 19 — Interest Expense Years Ended December 31, 2019 2018 2017 Senior notes $ 31,804 $ 31,280 $ 29,806 Match funded liabilities 26,902 31,870 47,624 Other secured borrowings 46,278 35,412 45,099 Financing liabilities — 66 635 Other 9,145 4,743 3,763 $ 114,129 $ 103,371 $ 126,927 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 20 — Income Taxes On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (Tax Act), which made broad and complex changes to the U.S. federal corporate income tax rules. The Tax Act amends the Internal Revenue Code to reduce tax rates, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and creates new taxes on certain foreign-sourced earnings, among other provisions. For businesses, the Tax Act reduced the corporate federal tax rate from a maximum of 35% to a flat 21% rate. The rate reduction took effect on January 1, 2018. The Tax Act significantly changed the taxation of U.S.-based multinational corporations. The reduction in the statutory U.S. federal rate is expected to positively impact our future U.S. after-tax earnings. However, the ultimate impact is subject to the effect of other complex provisions in the Tax Act (including the BEAT, Global Intangible Low-Taxed Income (GILTI), and revised interest deductibility limitations). The U.S. Treasury Department, the U.S. Internal Revenue Service and state tax authorities have issued and are expected to continue to issue guidance on how the provisions of the Tax Act will be applied or otherwise administered. As regulations and guidance evolve with respect to the Tax Act, the results of newly issued guidance could be adverse and may differ from previous estimates. As such, we are continuing to evaluate the impact of the new U.S. tax legislation, including recently issued regulations on our global tax position. SAB 118 Measurement Period We applied the guidance in SAB 118 when accounting for the enactment date effects of the Tax Act in 2017 and throughout 2018. At December 31, 2017, we had not completed our accounting for all of the enactment-date income tax effects of the Tax Act under ASC 740, Income Taxes ; therefore, we recorded provisional amounts related to the one-time deemed repatriation tax (Transition Tax) liability related to the undistributed earnings of certain foreign subsidiaries that were not previously taxed and adjusted deferred tax assets and liabilities to account for the reduction in the statutory U.S. federal rate. As of December 31, 2018, we had completed our accounting for all of the enactment-date income tax effects of the Tax Act. As further discussed below, during 2018, we recognized adjustments to the provisional amounts recorded at December 31, 2017, which produced changes in the amount of deferred tax assets recorded in the U.S. and USVI jurisdictions. As the net deferred tax assets in these jurisdictions have full valuation allowances, the adjustments to the provisional amounts recorded under SAB 118 did not have an impact on our consolidated statements of financial position or consolidated statements of operations. One-Time Transition Tax Under the Tax Act, the transition to a new territorial tax system caused Ocwen to incur a Transition Tax on our total post-1986 undistributed earnings and profits (E&P) of our non-U.S. subsidiaries, the tax on which we previously deferred from U.S. income taxes under U.S. law. The amount of the Transition Tax was dependent upon many factors, including the accumulated E&P of Ocwen’s non-U.S. subsidiaries, our ability and willingness to utilize foreign tax credits and/or net operating loss (NOL) carryforwards, and 2017 taxable income or loss amounts in the U.S. and non-U.S. jurisdictions. We recorded a provisional amount for our one-time Transition Tax liability in our December 31, 2017 financial statements as a reduction to the U.S. federal NOL carryforward of $16.9 million . The reduction of the NOL deferred tax asset resulted in an offsetting release of the valuation allowance. Due to the various factors affecting the calculation, our decision regarding how best to utilize the foreign tax credits and/or NOL carryforwards was subject to change as we continued to wait for further guidance and analyze additional information necessary to finalize the calculations and maximize the long-term value to Ocwen. Upon further analysis of the Tax Act as well as notices and regulations issued and proposed by the U.S. Department of the Treasury and the Internal Revenue Service, we finalized our calculations of the Transition Tax liability in 2018. We increased our December 31, 2017 provisional amount by increasing foreign tax credits by $19.9 million and further reducing the U.S. federal NOL carryforward by $51.7 million . As the net deferred tax asset in the U.S. jurisdiction has a full valuation allowance, the recording of the changes to these deferred tax assets does not have an impact on our consolidated balance sheets or consolidated statements of operations. Deferred Tax Assets & Liabilities As a result of the reduction in the corporate income tax rate, we revalued our U.S. and USVI net deferred tax assets at December 31, 2017. In 2017, we recorded a provisional decrease to our net deferred tax assets in the U.S. and USVI jurisdictions of $36.1 million and $26.6 million , respectively, due to the change in the corporate tax rate. Upon further analysis of certain aspects of the Tax Act as well as notices and regulations issued and proposed by the U.S. Department of the Treasury and the Internal Revenue Service and refinement of our calculations during 2018, we adjusted our provisional amount by recording an increase to our net deferred tax assets in the U.S. and USVI jurisdictions of $6.0 million and $4.6 million , respectively. This increase resulted in a net decrease to the deferred tax assets in 2018 in the U.S. and USVI jurisdictions of $30.1 million and $22.0 million , respectively. As the net deferred tax assets in these jurisdictions have full valuation allowances, the revaluation of our net deferred tax assets did not have any impact on our consolidated balance sheets or consolidated statements of operations. Global Intangible Low-Taxed Income (GILTI) The Tax Act subjects a U.S. shareholder to tax on GILTI earned by certain foreign subsidiaries. The FASB Staff Q&A, Topic 740, No. 5, Accounting for Global Intangible Low-Taxed Income , states that an entity can make an accounting policy election to either recognize deferred taxes for temporary basis differences expected to reverse as GILTI in future years or to provide for the tax expense related to GILTI in the year the tax is incurred as a period expense only. Because we were evaluating the provision of GILTI at December 31, 2017, we recorded no GILTI-related deferred taxes in 2017. After further consideration in 2018, we elected to account for GILTI in the year the tax is incurred. For income tax purposes, the components of loss from continuing operations before taxes were as follows: Years Ended December 31, 2019 2018 2017 Domestic $ (93,487 ) $ 11,477 $ (75,143 ) Foreign (33,004 ) (82,953 ) (68,830 ) $ (126,491 ) $ (71,476 ) $ (143,973 ) The components of income tax expense (benefit) were as follows: Years Ended December 31, 2019 2018 2017 Current: Federal $ 873 $ (7,670 ) $ (21,859 ) State 4,460 356 (3,938 ) Foreign 7,181 11,132 9,550 12,514 3,818 (16,247 ) Deferred: Federal (40,429 ) 23,991 27,289 State (914 ) 319 702 Foreign 11,993 (4,252 ) 2,719 Provision for (reversal of) valuation allowance on deferred tax assets 32,470 (23,347 ) (29,979 ) 3,120 (3,289 ) 731 Total $ 15,634 $ 529 $ (15,516 ) Ocwen is a global company with operations in the USVI, India and the Philippines, among other jurisdictions. In the effective tax rate reconciliation, we first calculate income tax expense attributable to worldwide continuing operations at the U.S. statutory tax rate. The foreign tax rate differential therefore represents the difference in tax expense between jurisdictional income taxed at the U.S. statutory rate and each respective jurisdictional statutory rate. Income tax expense differs from the amounts computed by applying the U.S. Federal corporate income tax rate as follows: Years Ended December 31, 2019 2018 2017 Expected income tax expense (benefit) at statutory rate (1) $ (26,563 ) $ (15,010 ) $ (50,391 ) Differences between expected and actual income tax expense (2): Bargain purchase gain disallowance 80 (13,448 ) — Revaluation of deferred tax assets related to legal entity mergers (25,509 ) — — Reduction in tax attributes for Section 382 & 383 limitations — 55,668 — U.S. Tax Reform - Change in Federal rate — (10,666 ) 62,758 U.S. Tax Reform - Transition Tax — 14,412 34,846 U.S. Tax Reform - BEAT Tax (555 ) 1,076 — U.S. Tax Reform - GILTI inclusion 11,859 — — Foreign tax differential including effectively connected income (3) 15,979 22,990 (12,140 ) Provision for (reversal of) liability for uncertain tax positions 4,198 (3,987 ) (16,925 ) Provision for (reversal of) valuation allowance on deferred tax assets (4) 32,470 (23,347 ) (29,979 ) Provision for liability for intra-entity transactions (5) — — 2,484 State tax, after Federal tax benefit (784 ) 675 (3,938 ) Excess tax benefits from share-based compensation 381 (356 ) (3,701 ) Other permanent differences 66 122 (267 ) Foreign tax credit (generation) utilization 263 (25,601 ) — Executive compensation disallowance 1,344 959 221 Subpart F income — 3,222 2,824 Other provision to return differences 1,242 (6,559 ) 221 Other 1,163 379 (1,529 ) Actual income tax expense (benefit) $ 15,634 $ 529 $ (15,516 ) (1) The U.S. Federal corporate income tax rate is 21% beginning January 1, 2018 and was 35% until December 31, 2017. (2) ASC 740-10-50 and SEC Regulation S-X, Rule 4-08(h) require the disclosure of significant reconciling items in the effective tax rate reconciliation schedule. We have prepared the 2019 effective tax rate reconciliation consistent with prior years, taking into account the materiality of reconciling items, comparability with prior years and the usefulness of the information. (3) The foreign tax differential includes expense recognized in 2019 and a benefit recognized in 2018 and 2017 for taxable income or losses earned by Ocwen Mortgage Servicing, Inc. (OMS) prior to the merger of OMS into OVIS in 2019 as disclosed below, which are taxable in the U.S. as effectively connected income (ECI). The impact of ECI to income tax expense (benefit) for 2019 , 2018 and 2017 was $2.6 million , $(3.3) million and $(28.5) million , respectively. (4) The benefit recorded for the provision for valuation allowance in 2017 relates primarily to the reduction in the valuation allowance necessary as a result of revaluing our deferred tax assets due to U.S. tax reform and the reduction in the corporate tax rate. This benefit is partially offset by an increase in valuation allowance necessary for current year losses. (5) ASU 2016-16 requires an entity to recognize the income tax consequences of intra-entity transfers of assets other than inventory when the transfer occurs. Previously, recognition of current and deferred income taxes for an intra-entity transfer was prohibited until the asset had been sold to an outside party. We adopted this standard on a modified retrospective basis on January 1, 2018 by recording a cumulative-effect reduction of $5.6 million to retained earnings. Net deferred tax assets were comprised of the following: December 31, 2019 2018 Deferred tax assets Net operating loss carryforwards - federal and foreign $ 64,817 $ 31,587 Net operating loss carryforwards and credits - state and local 70,254 — Reserve for servicing exposure 7,711 10,331 Accrued other liabilities 6,377 8,966 Foreign deferred assets 3,620 7,142 Partnership losses 7,029 6,681 Stock-based compensation expense 5,297 5,610 Interest expense disallowance 12,423 4,773 Intangible asset amortization 4,946 4,579 Accrued incentive compensation 5,063 4,527 Accrued legal settlements 6,028 4,350 Bad debt and allowance for loan losses 2,530 3,498 Tax residuals and deferred income on tax residuals 2,885 2,905 Foreign tax credit 94 357 Lease liabilities 5,459 580 Deferred income 8,493 — Other 8,708 8,252 221,734 104,138 Deferred tax liabilities Mortgage servicing rights amortization 16,358 27,860 Foreign undistributed earnings 1,615 2,059 Other 1,151 804 19,124 30,723 202,610 73,415 Valuation allowance (200,441 ) (68,126 ) Deferred tax assets, net $ 2,169 $ 5,289 As of December 31, 2019 , we had a deferred tax asset, net of deferred tax liability, including $199.5 million in the U.S. Valuation Allowances We conduct periodic evaluations of positive and negative evidence to determine whether it is more likely than not that the deferred tax asset can be realized in future periods. In these evaluations, we gave more significant weight to objective evidence, such as our actual financial condition and historical results of operations, as compared to subjective evidence, such as projections of future taxable income or losses. Both the U.S. and USVI jurisdictions are in a three-year cumulative loss position as of December 31, 2019 . Other factors considered in these evaluations are estimates of future taxable income, future reversals of temporary differences, taxable income in prior carryback years, tax character and the impact of tax planning strategies that may be implemented, if warranted. As a result of these evaluations, we recorded a valuation allowance of $199.5 million and $46.3 million on our U.S. net deferred tax assets at December 31, 2019 and 2018 , respectively, and a valuation allowance of $0.4 million and $21.3 million on our USVI net deferred tax assets at December 31, 2019 and 2018 , respectively. These U.S. and USVI jurisdictional deferred tax assets are not considered to be more likely than not realizable based on all available positive and negative evidence. We intend to continue maintaining a full valuation allowance on our deferred tax assets in both the U.S. and USVI until there is sufficient evidence to support the reversal of all or some portion of these allowances. Net Operating Loss Carryforwards At December 31, 2019 , we had U.S. NOL carryforwards of $306.5 million . In addition to our historic NOL carryforwards, this amount includes U.S. NOL carryforwards of $125.7 million acquired in connection with the acquisition of PHH. At December 31, 2019, we had state NOL and tax credit carryforwards valued at $70.3 million , including state NOLs and tax credits acquired in connection with the acquisition of PHH of $54.3 million . All of the acquired tax attributes were fully offset by a valuation allowance. These U.S. federal and state NOL carryforwards will expire beginning 2020 through 2039 with U.S. federal NOLs generated after 2017 never expiring. We believe that it is more likely than not that the benefit from certain U.S. federal and state NOL carryforwards will not be realized. In recognition of this risk, we have provided a total valuation allowance of $64.4 million and $70.3 million on the deferred tax assets relating to the U.S. federal and state NOL carryforwards, respectively. If our assumptions change and we determine we will be able to realize these NOLs, the tax benefits relating to any reversal of the valuation allowance on deferred tax assets as of December 31, 2019 will be accounted for as a reduction of income tax expense. Additionally, $334.5 million of USVI NOLs have been carried back to offset prior period tax due in the USVI and we have, therefore, reflected the tax-effect of this attribute as a $12.9 million income taxes receivable. We also have U.S. capital loss carryforwards of $7.6 million at December 31, 2019 against which a valuation allowance has been recorded. Change of Control: Annual Limitations on Utilization of Tax Attributes NOL carryforwards may be subject to annual limitations under Internal Revenue Code Section 382 (Section 382) (or comparable provisions of foreign or state law) in the event that certain changes in ownership were to occur. We periodically evaluate our NOL carryforwards and whether certain changes in ownership have occurred that would limit our ability to utilize a portion of our NOL and tax credit carryforwards. If it is determined that an ownership change(s) has occurred, there may be annual limitations on the use of these NOL and tax credit carryforwards under Section 382 (or comparable provisions of foreign or state law). Generally, a Section 382 ownership change occurs if, over a rolling three-year period, there has been an aggregate increase of 50 percentage points or more in the percentage of our stock owned by one or more “ 5 -percent shareholders.” Ownership for Section 382 purposes is determined primarily by an economic test, while the SEC definition of beneficial ownership focuses generally on the right to vote or control disposition of the shares. In general, the Section 382 economic test looks to who has the right to receive dividends paid with respect to shares, and who has the right to receive proceeds from the sale or other disposition of shares. Section 382 also contains certain constructive ownership rules, which generally attribute ownership of stock held by estates, trusts, corporations, partnerships or other entities to the ultimate indirect individual owner of the shares, or to related individuals. Generally, a person’s direct or indirect economic ownership interest in shares (rather than record title, voting control or other factors) is taken into account for Section 382 purposes. For purposes of determining the existence and identity of, and the amount of stock owned by any shareholder, the Internal Revenue Service permits us to rely on the existence or absence of filings with the SEC of Schedules 13D, 13F and 13G (or similar filings) as of any date, subject to our actual knowledge of the ownership of our common stock. Investors who file a Schedule 13G or Schedule 13D (or list our common stock in their Schedules 13F) may beneficially own 5% or more of our common stock for SEC reporting purposes but nonetheless may not be Section 382 “ 5 -percent shareholders” and therefore their beneficial ownership will not result in a Section 382 ownership change. We have evaluated whether we experienced an ownership change, as defined under Section 382, and determined that an ownership change did occur in the U.S. jurisdiction in January 2015 and in December 2017, which also results in an ownership change under Section 382 in the USVI jurisdiction. In addition, a Section 382 ownership change occurred at PHH when Ocwen acquired the stock of PHH in October 2018. PHH was a loss corporation as defined under Section 382 at the date of the acquisition. PHH also had an existing Section 382 ownership change on March 31, 2018. For certain states, an additional Section 382 ownership change occurred on August 9, 2017. These Section 382 ownership changes may limit our ability to fully utilize NOLs, tax credit carryforwards, deductions and/or certain built-in losses that existed as of each respective ownership change date in various jurisdictions. Due to the Section 382 and 383 limitations and the maximum carryforward period for our NOLs and tax credits, we will be unable to fully recognize certain deferred tax assets. Accordingly, as of December 31, 2018, we reduced our gross deferred tax asset related to our U.S. federal and USVI NOLs by $160.9 million , our foreign tax credit deferred tax asset by $29.5 million , and corresponding valuation allowance by $55.7 million . The realization of all or a portion of our remaining deferred income tax assets (including NOLs and tax credits) is dependent upon the generation of future taxable income during the statutory carryforward periods. In addition, the limitation on the utilization of our NOL and tax credit carryforwards could result in Ocwen incurring a current tax liability in future tax years. Our inability to utilize our pre-ownership change NOL carryforwards, any future recognized built-in losses or deductions, and tax credit carryforwards could have an adverse effect on our financial condition, results of operations and cash flows. As part of our Section 382 evaluation and consistent with the rules provided within Section 382, Ocwen relies strictly on the existence or absence, as well as the information contained in certain publicly available documents ( e.g. , Schedule 13D, Schedule 13G or other documents filed with the SEC) to identify shareholders that own a 5-percent or greater interest in Ocwen stock throughout the period tested. Further, Ocwen relies on such public filings to identify dates in which such 5-percent shareholders acquired, disposed, or otherwise transacted in Ocwen common stock. As the requirement for filing such notices of ownership from the SEC is to report beneficial ownership, as opposed to actual economic ownership of the stock of Ocwen, certain SEC filings may not represent ownership in Ocwen stock that should be considered in determining whether Ocwen experienced an ownership change under the Section 382 rules. Notwithstanding the preceding sentences (regarding Ocwen’ s ability to rely on the existence and absence of information in publicly filed Schedules 13D and 13G), the rules prescribed in Section 382 and the regulations thereunder provide that Ocwen may (but is not required to) seek additional clarification from shareholders filing such Schedules 13D and 13G if there are questions or uncertainty regarding the true economic ownership of shares reported in such filing (whether due to ambiguity in the filing, an overly complex ownership structure, the type of instruments owned and reported in the filings, etc.) (often referred to “actual knowledge” questionnaires). Such information can be sought on a filer by filer basis ( i.e., there is no requirement that if actual knowledge is sought with respect to one shareholder, actual knowledge must be sought with respect to all shareholders that filed schedules 13D or 13G). While the seeking of actual knowledge can be beneficial in some instances it may be detrimental in others. Once such actual knowledge is received, Section 382 requires the inclusion of such actual knowledge, even if such inclusion is detrimental to the conclusion reached. Ocwen has performed its analysis of the rules under Section 382 and, based on all currently available information, identified it experienced an ownership change for Section 382 purposes in January 2015 and December 2017. Prior to 2018, Ocwen was aware of shareholder activity in 2015 and 2017 that may have caused a Section 382 ownership change(s) but determined that additional information could potentially be obtained from certain shareholders that would indicate a Section 382 ownership change had not occurred. In completing this analysis, Ocwen identified several shareholders that filed a schedule 13G during the period disclosing a greater than 5-percent interest in Ocwen stock where beneficial versus economic ownership of the stock was unclear, and Ocwen therefore requested further details. As of the date of this Form 10-K, Ocwen has not received all requested responses from selected shareholders and will continue to consider such shareholders as economic owners of Ocwen’s stock until actual knowledge is otherwise received. Ocwen is continuing to monitor the ownership in its stock to evaluate information that will become available in 2020 and that may result in a different outcome for Section 382 purposes and our future cash tax obligations. As part of this monitoring, Ocwen periodically evaluates whether it is appropriate and beneficial to retroactively seek actual knowledge on certain previously identified and included 5-percent shareholders, whereby, depending on the responses received, Ocwen may conclude that either the January 2015 or December 2017 Section 382 ownership changes may have instead occurred on a different date, or did not occur at all. As such, our analysis regarding the amount of tax attributes that may be available to offset taxable income in the future without restrictions imposed by Section 382 may continue to evolve. Uncertain Tax Positions Our major jurisdiction tax years that remain subject to examination are our U.S. federal tax return for the years ended December 31, 2016 through the present, our USVI corporate tax return for the years ended December 31, 2013 through the present, and our India corporate tax returns for the years ended March 31, 2010 through the present. We are currently under audit in the USVI jurisdiction for tax years 2013 - 2016 due to the carryback of losses generated in 2015 and 2016 to tax years 2013 and 2014, respectively. A reconciliation of the beginning and ending amounts of the total unrecognized tax benefits for uncertain tax positions, which are included in the Liability for uncertain tax positions in Other liabilities, is as follows: Years Ended December 31, 2019 2018 2017 Beginning balance $ 9,622 $ 2,281 $ 16,994 Additions - PHH acquisition — 13,108 — Additions for tax positions of current year 207 412 — Additions for tax positions of prior years 3,110 1,354 2,281 Reductions for tax positions of prior years — (236 ) — Reductions for settlements (1,293 ) (3,188 ) (387 ) Lapses in statute of limitations (1,057 ) (4,109 ) (16,607 ) Ending balance $ 10,589 $ 9,622 $ 2,281 We recognized total interest and penalties of $2.7 million , $2.9 million and $5.1 million as income tax expense or benefit in 2019 , 2018 and 2017 , respectively. At December 31, 2019 and 2018 , accruals for interest and penalties were $6.6 million and $4.1 million , respectively, and are included in the Liability for uncertain tax positions in Other liabilities. As of December 31, 2019 and 2018 , we had unrecognized tax benefits for uncertain tax positions, excluding accrued interest and penalties, of $10.6 million and $9.6 million , respectively, all of which if recognized would affect the effective tax rate. It is reasonably possible that there could be a change in the amount of our unrecognized tax benefits within the next 12 months due to activities of the Internal Revenue Service or other taxing authorities, including proposed assessments of additional tax, possible settlement of audit issues, or the expiration of applicable statutes of limitations. We believe that it is reasonably possible that a decrease of up to $8.8 million in unrecognized tax benefits may be necessary within the next 12 months. Undistributed Foreign Earnings and Non-U.S. Jurisdictions As of December 31, 2019 , we have recognized a deferred tax liability of $1.6 million for foreign subsidiary undistributed earnings. We do not consider our foreign subsidiary undistributed earnings to be indefinitely invested outside the U.S. OVIS (and formerly OMS) is headquartered in St. Croix, USVI and is located in a federally recognized economic development zone where qualified entities are eligible for certain benefits. We refer to these benefits as “EDC benefits” as they are granted by the USVI Economic Development Commission. We were approved as a Category IIA service business, and are therefore entitled to receive benefits that may have a favorable impact on our effective tax rate. These benefits, among others, enable us to avail ourselves of a credit of 90% of income taxes on certain qualified income related to our servicing business. The exemption was granted as of October 1, 2012 and is available for a period of 30 years until expiration on September 30, 2042. The EDC benefits had no impact on our current foreign tax benefit in 2019, 2018 and 2017 because we are incurring current losses in the USVI and do not have carryback potential for these losses. As a result, no current benefit can be recognized for these losses. During 2019, in connection with our acquisition of PHH, overall corporate simplification and cost reduction efforts, we executed a legal entity reorganization whereby OLS, through which we previously conducted a substantial portion of our servicing business, was merged into PHH. OLS was previously the wholly-owned subsidiary of OMS, which was incorporated and headquartered in the USVI prior to its merger with OVIS, an entity which is also organized and headquartered in the USVI. As a result of this reorganization, the majority of our USVI operations and assets were transferred to the U.S. We plan to continue to maintain operations and the EDC Benefits in the USVI until, through and after the reorganization. We expect the reorganization to result in efficiencies and operational cost savings through reduced complexity and a simplification of our global structure. |
Basic and Diluted Earnings (Los
Basic and Diluted Earnings (Loss) per Share | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Earnings (Loss) per Share | Note 21 — Basic and Diluted Earnings (Loss) per Share Basic earnings or loss per share excludes common stock equivalents and is calculated by dividing net income or loss attributable to Ocwen common stockholders by the weighted average number of common shares outstanding during the year. We calculate diluted earnings or loss per share by dividing net income or loss attributable to Ocwen by the weighted average number of common shares outstanding including the potential dilutive common shares related to outstanding stock options and restricted stock awards. For 2019, 2018 and 2017, we have excluded the effect of all stock options and common stock awards from the computation of diluted loss per share because of the anti-dilutive effect of our reported net loss. Years Ended December 31, 2019 2018 2017 Loss from continuing operations, net of tax attributable to Ocwen common stockholders $ (142,125 ) $ (72,181 ) $ (127,966 ) Income from discontinued operations, net of tax — 1,409 — Net loss attributable to Ocwen stockholders $ (142,125 ) $ (70,772 ) $ (127,966 ) Weighted average shares of common stock outstanding - Basic and Diluted 134,444,402 133,703,359 127,082,058 Earnings (loss) per share - Basic and Diluted Continuing operations $ (1.06 ) $ (0.54 ) $ (1.01 ) Discontinued operations $ — $ 0.01 $ — Total attributable to Ocwen stockholders $ (1.06 ) $ (0.53 ) $ (1.01 ) Stock options and common stock awards excluded from the computation of diluted earnings per share Anti-dilutive (1) 3,167,624 4,989,725 5,487,164 Market-based (2) 787,204 670,829 862,446 (1) Includes stock options that are anti-dilutive because their exercise price was greater than the average market price of Ocwen’s stock, and stock awards that are anti-dilutive based on the application of the treasury stock method. (2) Shares that are issuable upon the achievement of certain market-based performance criteria related to Ocwen’s stock price. |
Employee Compensation and Benef
Employee Compensation and Benefit Plans | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Employee Compensation and Benefit Plans | Note 22 — Employee Compensation and Benefit Plans We maintain defined contribution plans to provide post-retirement benefits to our eligible employees and non-contributory defined benefit pension plans which are frozen and cover certain former eligible employees. We also maintain additional incentive compensation plans for certain employees. We designed these plans to facilitate a pay-for-performance culture, further align the interests of our officers and key employees with the interests of our shareholders and to assist in attracting and retaining employees vital to our long-term success. These plans are summarized below. Defined Contribution Savings Plans We sponsor defined contribution savings plans for eligible employees in the U.S (401(k) plan) and India (Provident Fund). Effective July 1, 2019, the PHH Corporation Employee Savings Plan and the PHH Home Loans, LLC Employee Savings Plan were merged into the Ocwen Financial Corporation 401(k) Savings Plan which applied to all current and former employees with account balances as of the date of the merger. Contributions of participating employees to the plans are matched on the basis specified by these plans. For the 401(k) plans, we match 50% of the first 6% of each eligible participant’s contribution to the 401(k) plans with maximum aggregate matching of $8,400 for 2019 . For the Provident Fund, both the employee and the employer are required to make minimum contributions to the fund at a predetermined rate (currently 12% ) applied to a portion of the employee's salary. Employers are not required to make contributions beyond this minimum. Our contributions to these plans were $5.9 million , $4.8 million and $5.3 million for the years ended December 31, 2019 , 2018 and 2017 , respectively. Defined Benefit Pension Plans Ocwen sponsors different non-contributory defined benefit pension plans for which benefits are based on an employee’s years of credited service and a percentage of final average compensation, or as otherwise described by the plan. Both defined benefit pension plans were assumed as part of business acquisitions and are frozen, wherein the plans only accrue additional benefits for a limited number of employees and no additional employees are eligible for participation in the plans. The following table shows the total change in the benefit obligation, plan assets and funded status for the pension plans: December 31, 2019 2018 Benefit obligation $ 54,603 $ 49,122 Fair value of plan assets 41,220 36,439 Unfunded status recognized in Other liabilities $ (13,383 ) $ (12,683 ) Amounts recognized in Accumulated other comprehensive income $ 6,864 $ 3,422 The net periodic benefit cost related to the defined benefit pension plans, included in Other expenses, was $(2.0) million and $0.4 million for 2019 and 2018 , respectively, and insignificant for 2017 . As of December 31, 2019 , future expected benefit payments to be made from the assets of the defined benefit pension plans is $2.9 million for the year ending December 31, 2020, $2.8 million for the years ending December 31, 2021 through 2023 and $3.1 million for the year ending December 31, 2024. The expected benefit payments to be made for the subsequent five years ending December 31, 2025 through 2029 are $15.7 million . Ocwen contributes to the defined benefit pension plans amounts sufficient to meet minimum funding requirements as set forth in employee benefit and tax laws as well as additional amounts at their discretion. Our contributions to the defined benefit pension plans were $0.8 million , $0.2 million and $0.1 million for the years ended December 31, 2019 , 2018 and 2017 , respectively. On October 4, 2018, Ocwen assumed all benefit obligations associated with PHH’s defined benefit pension plan as a result of its completed acquisition of PHH and no contribution was required to be made during the post-acquisition period ended December 31, 2018 . Gratuity Plan In accordance with India law, OFSPL provides for a defined benefit retirement plan (Gratuity Plan) covering all of its employees in India. The Gratuity Plan provides a lump-sum payment to vested employees at retirement or termination of employment based upon the respective employee’s salary and years of employment. OFSPL provides for the gratuity benefit through actuarially determined valuations. The following table shows the total change in the benefit obligation, plan assets and funded status for the Gratuity Plan: December 31, 2019 2018 Benefit obligation $ 5,370 $ 4,941 Fair value of plan assets 39 37 Unfunded status recognized in Other liabilities $ (5,331 ) $ (4,904 ) During the years ended December 31, 2019 and 2018 , benefits of $0.9 million and $0.3 million were paid by OFSPL. As of December 31, 2019 , future expected benefit payments to be made from the assets of the Gratuity Plan, which reflect expected future service, is $1.0 million , $0.9 million , $0.8 million , $0.7 million and $0.6 million for the years ending December 31, 2020, 2021, 2022, 2023 and 2024, respectively. The expected benefit payments to be made for the subsequent five years ending December 31, 2025 through 2029 are $1.9 million . Annual Incentive Plan The Ocwen Financial Corporation Amended 1998 Annual Incentive Plan and the 2017 Performance Incentive Plan (the 2017 Equity Plan) are our primary incentive compensation plans for executives and other eligible employees. Previously issued equity awards remain outstanding under the 2007 Equity Incentive Plan (the 2007 Equity Plan). Under the terms of these plans, participants can earn cash and equity-based awards as determined by the Compensation and Human Capital Committee of the Board of Directors (the Committee). The awards are based on objective and subjective performance criteria established by the Committee. The Committee may at its discretion adjust performance measurements to reflect significant unforeseen events. We recognized $16.6 million , $20.5 million and $24.5 million of compensation expense during 2019 , 2018 and 2017 , respectively, related to annual incentive compensation awarded in cash. The 2007 Equity Plan and the 2017 Equity Plan authorize the grant of stock options, restricted stock, stock units or other equity-based awards, including cash-settled awards, to employees. Effective with the approval of the 2017 Equity Plan by Ocwen shareholders on May 24, 2017, no new awards will be granted under the 2007 Equity Plan. The number of remaining shares available for award grants under the 2007 Equity Plan became available for award grants under the 2017 Equity Plan effective upon shareholder approval. At December 31, 2019 , there were 6,841,386 shares of common stock remaining available for future issuance under these plans. Equity Awards Outstanding equity awards granted under the 2007 Equity Plan and the 2017 Equity Plan had the following characteristics in common: Type of Award Percent of Total Equity Award Vesting Period 2011 - 2014 Awards: Options: Service Condition: Time-based 60 % Ratably over four years (25% on each of the four anniversaries of the grant date) Market Condition: Market performance-based 35 Over three years beginning with 25% vesting on the date that the stock price has at least doubled over the exercise price and the compounded annual gain over the exercise price is at least 20% and then ratably over three years (25% on each of the next three anniversaries of the achievement of the market condition) Extraordinary market performance-based 5 Over three years beginning with 25% vesting on the date that the stock price has at least tripled over the exercise price and the compounded annual gain over the exercise price is at least 25% and then ratably over three years (25% on each of the next three anniversaries of the achievement of the market condition) Total Award 100 % Type of Award Percent of Total Equity Award Vesting Period 2015 - 2016 Awards: Options: Service Condition: Time-based 34 % Ratably over four years (25% vesting on each of the first four anniversaries of the grant date.) Stock Units: Service Condition: Time-based — Over four years with 1/3 vesting on each of the 2 nd , 3 rd and 4 th anniversaries of the grant date. Market Condition: Time-based vesting schedule and Market performance-based vesting date 66 Vest over four years with 25% vesting on each of the four anniversaries of the grant date. However, none are considered vested until the first trading day (if any) on or before the 4 th anniversary of the award date on which the average stock price equals or exceeds the price set in the individual award agreement, at which time all units that have met their time-based vesting schedule vest immediately with the remainder vesting in accordance with their time-based schedule. Total Award 100 % 2017 - 2019 Awards: Options: Service Condition: Time-based 15 % Ratably over three years (1/3 vesting on each of the first three anniversaries of the grant date). Stock Units: Service Condition: Time-based 56 Over three years with 1/3 vesting on each of the first three anniversaries of the grant date. Market Condition: Time-based vesting schedule and Market performance-based vesting date 29 Vest over four years with 25% vesting on each of the four anniversaries of the grant date. However, none are considered vested until the first trading day (if any) on or before the 4 th anniversary of the award date on which the average stock price equals or exceeds the price set in the individual award agreement, at which time all units that have met their time-based vesting schedule vest immediately with the remainder vesting in accordance with their time-based schedule. Total Award 100 % The contractual term of all options granted is ten years from the grant date, except where employment terminates by reason of death, disability or retirement, in which case, the agreement may provide for an earlier termination of the options. The terms of the market-based options do not include a retirement provision. Stock units have a three-year or four-year term. If the market conditions are not met by the third or fourth anniversary of the award of stock units, those units terminate on that date. Years Ended December 31, Stock Options 2019 2018 2017 Number of Options Weighted Average Exercise Price Number of Options Weighted Average Exercise Price Number of Options Weighted Average Exercise Price Outstanding at beginning of year 2,092,599 $ 19.22 6,708,655 $ 9.97 6,926,634 $ 9.88 Granted (1) (2) 51,409 2.08 348,385 3.66 — — Exercised — — — — — — Forfeited / Expired (3) (164,577 ) 18.69 (4,964,441 ) 5.62 (217,979 ) 7.16 Outstanding at end of year (4)(5) 1,979,431 $ 18.82 2,092,599 $ 19.22 6,708,655 $ 9.97 Exercisable at end of year (4)(5)(6) 1,580,766 $ 20.16 1,520,039 $ 21.29 6,234,830 $ 8.87 (1) Stock options granted in 2019 include 33,180 options awarded to Ocwen’s Chief Financial Officer at a strike price of $2.17 equal to the closing price of our common stock on the effective date of her employment. Stock options granted in 2018 include 266,990 options awarded to Ocwen’s current Chief Executive Officer (CEO) at an exercise price of $4.12 equal to the closing price of our common stock on the effective date of his employment, which was the closing date of the PHH acquisition. (2) The weighted average grant date fair value of stock options granted in 2019 was $1.49 . (3) Includes 73,696 and 4,719,750 options which expired unexercised in 2019 and 2018, because their exercise price was greater than the market price of Ocwen’s stock. (4) At December 31, 2019 , 115,000 options with a market condition for vesting based on an average common stock trading price of $38.41 , had not met their performance criteria. Outstanding and exercisable stock options at December 31, 2019 have a net aggregate intrinsic value of $0 . A total of 810,939 market-based options were outstanding at December 31, 2019 , of which 695,939 were exercisable. (5) At December 31, 2019 , the weighted average remaining contractual term of options outstanding and options exercisable was 4.13 years and 3.28 years , respectively. (6) The total fair value of stock options that vested and became exercisable during 2019 , 2018 and 2017 , based on grant-date fair value, was $0.6 million , $0.6 million and $0.7 million , respectively. Years Ended December 31, Stock Units - Equity Awards 2019 2018 2017 Number of Weighted Number of Weighted Number of Weighted Unvested at beginning of year 2,946,800 $ 3.75 2,753,918 $ 3.69 2,752,054 $ 3.91 Granted (1)(2) 1,256,952 2.00 1,809,373 3.57 971,761 2.56 Vested (3)(4) (1,137,696 ) 3.08 (796,856 ) 2.78 (896,272 ) 3.26 Forfeited/Cancelled (1) (406,931 ) 9.58 (819,635 ) 4.57 (73,625 ) 2.20 Unvested at end of year (5)(6) 2,659,125 $ 2.63 2,946,800 $ 3.75 2,753,918 $ 3.69 (1) Upon the resignation of Ocwen’s former CEO on June 30, 2018, 377,525 unvested stock units which would have been forfeited immediately were modified to allow continued vesting in accordance with the original terms. This had the equivalent effect of canceling the original award and granting a new award. (2) Stock units granted in 2019 include 1,130,653 units granted to Ocwen’s CEO under the new long-term incentive (LTI) program described below. Stock units granted in 2018 include 983,010 units granted to Ocwen’s current CEO on the effective date of his employment, which was the closing date of the PHH acquisition. (3) The total intrinsic value of stock units vested, which is defined as the market value of the stock on the date of vesting, was $2.1 million , $3.3 million and $4.6 million for 2019 , 2018 and 2017 , respectively. (4) The total fair value of the stock units that vested during 2019 , 2018 and 2017 , based on grant-date fair value, was $3.5 million , $2.2 million and $2.9 million , respectively. (5) Excluding the 787,204 market-based stock awards that have not met their performance criteria, the net aggregate intrinsic value of stock awards outstanding at December 31, 2019 was $2.6 million . At December 31, 2019 , 40,000 , 93,023 , 57,604 , and 31,250 stock units with a market condition for vesting based on an average common stock trading price of $11.72 , $5.80 , $4.34 , and $3.84 respectively, as well as 565,327 stock units requiring an average common stock trading price of $2.56 to vest a minimum of 50% of units, had not yet met the market condition (and time-vesting requirements, where applicable). (6) At December 31, 2019 , the weighted average remaining contractual term of share units outstanding was 1.88 years . Liability Awards In 2019, Ocwen established a long-term incentive (LTI) program in connection with changes made by the Committee to the compensation structure of Ocwen’s executives. The LTI program is designed to promote actions and decisions aligned with our strategic objectives and reward our executives and other program participants for long-term value creation for our shareholders in a manner that is consistent with our pay-for-performance philosophy. The 2019 awards granted under the LTI program are cash-settled to avoid share dilution, except that a portion of awards to Ocwen’s Chief Executive Officer will be settled in shares of common stock. The program includes both a time-vesting component for retention purposes and a performance component to align with pay-for-performance objectives, using absolute total shareholder return as the performance metric. The LTI awards are granted under the 2017 Equity Plan. A total of 4,896,796 awards were granted in 2019 under the LTI, of which 3,766,143 were cash-settled awards and 1,130,653 were equity-settled awards granted to Ocwen’s CEO as disclosed above. Of the awards granted under the LTI program in 2019, 74% were performance-based with a market condition and the remaining 26% were time-based. The time-based awards vest equally (one-third) on the first, second and third anniversaries of the award grant date if the continued employment condition is met. The recurring annual performance-based awards cliff-vest 100% after three years subject to meeting the performance conditions and continuing employment. Certain one-time retention and transitional performance-based awards granted in 2019 vest equally (one-third) on the first, second and third anniversaries of the award grant date subject to meeting the performance conditions and continuing employment. Because the cash-settled awards must be settled in cash, they are classified as liabilities (Other liabilities) in the consolidated balance sheets and remeasured at fair value at each reporting date with adjustments recorded as Compensation expense in the consolidated statements of operations. Stock Units - Liability Awards Year Ended December 31, 2019 Unvested units at beginning of year — Granted 3,766,143 Vested — Forfeited/Cancelled 114,528 Unvested units at end of year 3,651,615 The performance-based awards vest in separate tranches based on the total shareholder return (TSR), as defined, over one, two and three-year annual performance periods ending March 29, 2020, 2021 and 2022. TSR is calculated using the average closing stock prices during the 30 trading days up to and including the beginning and end date of each performance period. The number of units earned depends on the level of performance achieved (Threshold = 50%; Target = 100%; Maximum = 200%, with results between levels interpolated). No units will be awarded for performance below the Threshold level. Compensation expense related to all stock-based awards is initially measured at fair value on the grant date using an appropriate valuation model based on the vesting conditions of the awards. Awards classified as liabilities are subsequently remeasured at fair value at each reporting date, as described above. The fair value of the time-based option awards was determined using the Black-Scholes options pricing model, while a lattice (binomial) model was used to determine the fair value of the market-based option awards. Lattice (binomial) models incorporate ranges of assumptions for inputs. Stock unit awards with only a service condition are valued at their intrinsic value, which is the market value of the stock on the date of the award. The fair value of Stock unit awards with both a service condition and a market-based vesting condition is based on the output of a Monte Carlo simulation. The following assumptions were used to value awards: Years Ended December 31, 2019 2018 2017 Black-Scholes Monte Carlo Black-Scholes Monte Carlo Monte Carlo Risk-free interest rate 2.60% 1.16% - 2.40% 2.79% – 3.14% 1.15% – 1.18% 1.12% – 1.18% Expected stock price volatility (1) 68% 72.5% - 75.9% 67% 71% - 74% 71% - 77% Expected dividend yield —% —% —% —% —% Expected life (in years) (2) 8.5 (3) 8.5 (3) (3) Contractual life (in years) N/A N/A N/A N/A N/A Fair value $1.37 - $1.55 $1.75 - $2.25 $1.53 - $2.96 $1.84 - $4.80 $2.00 - $4.80 (1) We generally estimate volatility based on the historical volatility of Ocwen’s common stock over the most recent period that corresponds with the estimated expected life of the option. For awards valued using a Monte Carlo simulation, volatility is computed as a blend of historical volatility and implied volatility based on traded options on Ocwen’s common stock. (2) For the options valued using the Black-Scholes model we determined the expected life based on historical experience with similar awards, giving consideration to the contractual term, exercise patterns and post vesting forfeitures. The expected term of the options valued using the lattice (binomial) model is derived from the output of the model. The lattice (binomial) model incorporates exercise assumptions based on analysis of historical data. For all options, the expected life represents the period of time that options granted were expected to be outstanding at the date of the award. (3) The stock units that contain both a service condition and a market-based condition are valued using the Monte Carlo simulation. The expected term is derived from the output of the simulation and represents the expected time to meet the market-based vesting condition. For equity awards with both service and market conditions, the requisite service period is the longer of the derived or explicit service period. In this case, the explicit service condition (vesting period) is the requisite service period, and the graded vesting method is used for expense recognition. The following table summarizes Ocwen's stock-based compensation expense included as a component of Compensation and benefits expense in the consolidated statements of operations: Years Ended December 31, 2019 2018 2017 Compensation expense - Equity awards Stock option awards $ (121 ) $ (368 ) $ 1,457 Stock awards 2,818 2,734 4,167 2,697 2,366 5,624 Compensation expense - Liability awards 1,082 — — (Tax deficiency) excess tax benefit related to share-based awards (381 ) 294 3,701 As of December 31, 2019 , unrecognized compensation costs related to non-vested stock options amounted to $0.6 million , which will be recognized over a weighted-average remaining requisite service period of 1.80 years . Unrecognized compensation costs related to non-vested stock units as of December 31, 2019 amounted to $5.5 million , which will be recognized over a weighted-average remaining life of 1.88 years. Unrecognized compensation costs related to unvested liability awards as of December 31, 2019 amounted to $3.1 million, which will be recognized over a weighted-average remaining life of 2.34 years. |
Business Segment Reporting
Business Segment Reporting | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Business Segment Reporting | Note 23 — Business Segment Reporting Our business segments reflect the internal reporting that we use to evaluate operating performance of services and to assess the allocation of our resources. A brief description of our current business segments is as follows: Servicing. This segment is primarily comprised of our core residential mortgage servicing business and currently accounts for most of our total revenues. We provide residential and commercial mortgage loan servicing, special servicing and asset management services. We earn fees for providing these services to owners of the mortgage loans and foreclosed real estate. In most cases, we provide these services either because we purchased the MSRs from the owner of the mortgage, retained the MSRs on the sale or securitization of residential mortgage loans or because we entered into a subservicing or special servicing agreement with the entity that owns the MSR. Our residential servicing portfolio includes conventional, government-insured and non-Agency loans. Non-Agency loans include subprime loans, which represent residential loans that generally did not qualify under GSE guidelines or have subsequently become delinquent. Lending. The Lending segment purchases and originates conventional and government-insured residential forward and reverse mortgage loans. The loans are typically sold shortly after origination into a liquid market on a servicing retained (securitization) or servicing released (sale to a third party) basis. We originate forward mortgage loans directly with customers (retail channel) as well as through correspondent lending arrangements since the second quarter of 2019. We originate reverse mortgage loans in all three channels through our correspondent lending arrangements, broker relationships (wholesale) and retail channels. In 2017, we closed our forward correspondent lending channel and exited the forward wholesale lending business due to higher liquidity and capital requirements versus the available liquidity at the time. We wrote off the capitalized balance of software developed internally for the forward wholesale lending business and recorded a loss of $6.8 million in Other expenses in 2017. Corporate Items and Other. Corporate Items and Other includes revenues and expenses of corporate support services, CR Limited (CRL), our wholly-owned captive reinsurance subsidiary, discontinued operations and inactive entities, business activities that are individually insignificant, revenues and expenses that are not directly related to other reportable segments, interest income on short-term investments of cash and interest expense on corporate debt. Corporate Items and Other also includes severance, retention, facility-related and other expenses incurred in 2019 related to our cost re-engineering plan. Our cash balances are included in Corporate Items and Other. CRL provides re-insurance related to coverage on foreclosed real estate properties owned or serviced by us. In January 2018, we decided to exit the ACS business and have liquidated our portfolio of inventory-secured loans to independent used car dealers. We allocate a portion of interest income to each business segment, including interest earned on cash balances and short-term investments. We also allocate expenses incurred by corporate support services to each business segment. Interest expense on direct asset-backed financings are recorded in the respective Servicing and Lending segments, while interest expense on the SSTL and Senior Notes is recorded in Corporate Items and Other and is not allocated. Financial information for our segments is as follows: Results of Operations Servicing Lending Corporate Items and Other Corporate Eliminations Business Segments Consolidated Year Ended December 31, 2019 Revenue $ 985,102 $ 125,086 $ 13,187 $ — $ 1,123,375 MSR valuation adjustments, net (120,646 ) (230 ) — — (120,876 ) Operating expenses (1) (2) 536,153 84,280 53,506 — 673,939 Other income (expense): Interest income 8,051 7,277 1,776 — 17,104 Interest expense (47,347 ) (7,911 ) (58,871 ) — (114,129 ) Pledged MSR liability expense (372,172 ) — 83 — (372,089 ) Gain on repurchase of senior secured notes — — 5,099 — 5,099 Bargain purchase gain — — (381 ) (381 ) Gain on sale of MSRs, net 453 — — — 453 Other, net 11,942 791 (3,841 ) — 8,892 Other income (expense), net (399,073 ) 157 (56,135 ) — (455,051 ) Income (loss) before income taxes $ (70,770 ) $ 40,733 $ (96,454 ) $ — $ (126,491 ) Results of Operations Servicing Lending Corporate Items and Other Corporate Eliminations Business Segments Consolidated Year Ended December 31, 2018 Revenue $ 951,224 $ 93,672 $ 18,149 $ — $ 1,063,045 MSR valuation adjustments, net (152,983 ) (474 ) — — (153,457 ) Operating expenses (1) 619,484 82,432 77,123 — 779,039 Other income (expense): Interest income 5,383 6,061 2,582 — 14,026 Interest expense (41,830 ) (7,311 ) (54,230 ) — (103,371 ) Pledged MSR liability expense (172,342 ) 672 — — (171,670 ) Bargain purchase gain — — 64,036 — 64,036 Gain on sale of mortgage servicing rights, net 1,325 — — — 1,325 Other, net (3,241 ) 966 (4,096 ) — (6,371 ) Other income (expense), net (210,705 ) 388 8,292 — (202,025 ) Income (loss) from continuing operations before income taxes $ (31,948 ) $ 11,154 $ (50,682 ) $ — $ (71,476 ) Year Ended December 31, 2017 Revenue $ 1,041,290 $ 127,475 $ 25,811 $ — $ 1,194,576 MSR valuation adjustments, net (52,689 ) (273 ) — — (52,962 ) Operating expenses 663,695 127,785 154,203 — 945,683 Other income (expense): Interest income 783 10,914 4,268 — 15,965 Interest expense (57,284 ) (13,893 ) (55,750 ) — (126,927 ) Pledged MSR liability expense (236,311 ) — — — (236,311 ) Gain on sale of MSRs 10,537 — — — 10,537 Other, net 4,049 (869 ) (6,348 ) — (3,168 ) Other expense, net (278,226 ) (3,848 ) (57,830 ) — (339,904 ) Income (loss) before income taxes $ 46,680 $ (4,431 ) $ (186,222 ) $ — $ (143,973 ) (1) Compensation and benefits expense in the Corporate Items and Other segment for 2019 and 2018 includes $20.3 million and $11.9 million , respectively, of severance expense attributable to PHH integration-related headcount reductions of primarily U.S.-based employees in 2019 and severance expense attributable to headcount reductions in connection with our strategic decisions to exit the automotive capital services business and the forward lending correspondent and wholesale channels in late 2017 and early 2018, as well as our overall efforts to reduce costs. (2) Included in the Corporate Items and Other segment for 2019, we recorded in Professional services expense a recovery from a service provider of $30.7 million during the first quarter of amounts previously recognized as expense. Total Assets Servicing Lending Corporate Items and Other Corporate Eliminations Business Segments Consolidated December 31, 2019 $ 3,378,515 $ 6,459,367 $ 568,317 $ — $ 10,406,199 December 31, 2018 3,306,208 5,603,481 484,527 — 9,394,216 December 31, 2017 3,033,243 4,945,456 424,465 — 8,403,164 Depreciation and Amortization Expense Servicing Lending Corporate Items and Other Business Segments Consolidated Year Ended December 31, 2019: Depreciation expense $ 1,925 $ 93 $ 29,893 $ 31,911 Amortization of debt discount — — 1,342 1,342 Amortization of debt issuance costs 71 — 3,099 3,170 Year Ended December 31, 2018: Depreciation expense $ 4,601 $ 103 $ 22,498 $ 27,202 Amortization of debt discount — — 1,183 1,183 Amortization of debt issuance costs — — 2,921 2,921 Year Ended December 31, 2017: Depreciation expense $ 5,797 $ 194 $ 20,895 $ 26,886 Amortization of mortgage servicing rights 51,515 273 — 51,788 Amortization of debt discount — — 1,114 1,114 Amortization of debt issuance costs — — 2,738 2,738 |
Regulatory Requirements
Regulatory Requirements | 12 Months Ended |
Dec. 31, 2019 | |
Brokers and Dealers [Abstract] | |
Regulatory Requirements | Note 24 — Regulatory Requirements Our business is subject to extensive regulation by federal, state and local governmental authorities, including the Consumer Financial Protection Bureau (CFPB), HUD, the SEC and various state agencies that license and conduct examinations of our servicing and lending activities. In addition, we operate under a number of regulatory settlements that subject us to ongoing reporting and other obligations. From time to time, we also receive requests (including requests in the form of subpoenas and civil investigative demands) from federal, state and local agencies for records, documents and information relating to our servicing and lending activities. The GSEs (and their conservator, the Federal Housing Finance Authority (FHFA)), Ginnie Mae, the United States Treasury Department, various investors, non-Agency securitization trustees and others also subject us to periodic reviews and audits. In the current regulatory environment, we have faced and expect to continue to face heightened regulatory and public scrutiny as an organization as well as stricter and more comprehensive regulation of the entire mortgage sector. We continue to work diligently to assess and understand the implications of the evolving regulatory environment in which we operate and to meet its requirements. We devote substantial resources to regulatory compliance, while, at the same time, striving to meet the needs and expectations of our customers, clients and other stakeholders. Our failure to comply with applicable federal, state and local laws, regulations and licensing requirements could lead to (i) administrative fines and penalties and litigation, (ii) loss of our licenses and approvals to engage in our servicing and lending businesses, (iii) governmental investigations and enforcement actions, (iv) civil and criminal liability, including class action lawsuits and actions to recover incentive and other payments made by governmental entities, (v) breaches of covenants and representations under our servicing, debt or other agreements, (vi) damage to our reputation, (vii) inability to raise capital or otherwise fund our operations and (viii) inability to execute on our business strategy. In addition to amounts paid to resolve regulatory matters, we have in the past incurred, and may in the future incur, costs to comply with the terms of such resolutions, including staffing costs, legal costs and, in certain cases the costs of audits, reviews and third-party firms to monitor our compliance with such resolutions. We must comply with a large number of federal, state and local consumer protection and other laws and regulations, including, among others, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act), the Telephone Consumer Protection Act (TCPA), the Gramm-Leach-Bliley Act, the Fair Debt Collection Practices Act (FDCPA), the Real Estate Settlement Procedures Act (RESPA), the Truth in Lending Act (TILA), the Servicemembers Civil Relief Act, the Homeowners Protection Act, the Federal Trade Commission Act, the Fair Credit Reporting Act, the Equal Credit Opportunity Act, as well as individual state licensing and foreclosure laws, individual state and local laws relating to registration of vacant or foreclosed properties, and federal and local bankruptcy rules. These laws and regulations apply to many facets of our business, including loan origination, default servicing and collections, use of credit reports, safeguarding of non-public personally identifiable information about our customers, foreclosure and claims handling, investment of, and interest payments on, escrow balances and escrow payment features and fees assessed on borrowers, and they mandate certain disclosures and notices to borrowers. These requirements can and do change as laws and regulations are enacted, promulgated, amended, interpreted and enforced, including through CFPB interpretive bulletins and other regulatory pronouncements. In addition, the actions of legislative bodies and regulatory agencies relating to a particular matter or business practice may or may not be coordinated or consistent. As a result, ensuring ongoing compliance with applicable legal and regulatory requirements can be challenging. Over the past decade, the general trend among federal, state and local legislative bodies and regulatory agencies as well as state attorneys general has been toward increasing laws, regulations, investigative proceedings and enforcement actions with regard to residential real estate lenders and servicers. New regulatory and legislative measures, or changes in enforcement practices, including those related to the technology we use, could, either individually or in the aggregate, require significant changes to our business practices, impose additional costs on us, limit our product offerings, limit our ability to efficiently pursue business opportunities, negatively impact asset values or reduce our revenues. Accordingly, they could materially and adversely affect our business, financial condition, liquidity and results of operations. As further described below and in Note 26 — Contingencies , in recent years Ocwen has entered into a number of significant settlements with federal and state regulators and state attorneys general that have imposed additional requirements on our business. For example, we made various commitments relating to the process of transferring loans off the REALServicing ® servicing system and onto the Black Knight Financial Services, Inc. (Black Knight) LoanSphere MSP® servicing system (Black Knight MSP), we have engaged a third-party auditor to perform an analysis with respect to our compliance with certain federal and state laws relating to the escrow of mortgage loan payments, we have revised various aspects of our complaint handling processes and we have extensive review and reporting obligations to various regulatory bodies with respect to various matters, including our financial condition. We devote significant management time and resources to compliance with these additional requirements. These requirements are generally unique to Ocwen and, while certain of our competitors may have entered into regulatory-related settlements of their own, our competitors are generally not subject to either the same specific or the same breadth of additional requirements to which we are subject. Ocwen has various subsidiaries that are licensed to originate and/or service forward and reverse mortgage loans in those jurisdictions in which they operate, and which require licensing. Our licensed entities are required to renew their licenses, typically on an annual basis, and to do so they must satisfy the license renewal requirements of each jurisdiction, which generally include financial requirements such as providing audited financial statements and satisfying minimum net worth requirements and non-financial requirements such as satisfactory completion of examinations relating to the licensee’s compliance with applicable laws and regulations. Failure to satisfy any of the requirements to which our licensed entities are subject could result in a variety of regulatory actions ranging from a fine, a directive requiring a certain step to be taken, entry into a consent order, a suspension or, ultimately, a revocation of a license, any of which could have a material adverse impact on our business, reputation, results of operations and financial condition. The minimum net worth requirements to which our licensed entities are subject are unique to each state and type of license. We believe our licensed entities were in compliance with all of their minimum net worth requirements at December 31, 2019 . PMC and Liberty are also subject to seller/servicer obligations under agreements with one or more of the GSEs, HUD, FHA, VA and Ginnie Mae. These seller/servicer obligations contain financial requirements, including capital requirements related to tangible net worth, as defined by the applicable agency, an obligation to provide audited consolidated financial statements within 90 days of the applicable entity’s fiscal year end as well as extensive requirements regarding servicing, selling and other matters. To the extent that these requirements are not met or waived, the applicable agency may, at its option, utilize a variety of remedies including requirements to provide certain information or take actions at the direction of the applicable agency, requirements to deposit funds as security for our obligations, sanctions, suspension or even termination of approved seller/servicer status, which would prohibit future originations or securitizations of forward or reverse mortgage loans or servicing for the applicable agency. Any of these actions could have a material adverse impact on us. To date, none of these counterparties has communicated any material sanction, suspension or prohibition in connection with our seller/servicer obligations. We believe we were in compliance with applicable net worth requirements at December 31, 2019 . Our non-Agency servicing agreements also contain requirements regarding servicing practices and other matters, and a failure to comply with these requirements could have a material adverse impact on our business. The most restrictive of the various net worth requirements for licensing and seller/servicer obligations referenced above is due to Fannie Mae’s eligibility requirements for PMC related to a decline in lender adjusted net worth. Fannie Mae required PMC to demonstrate an adjusted net worth of $268.7 million at December 31, 2019. PMC’s net worth was $341.5 million at December 31, 2019 . In addition, a number of foreign laws and regulations apply to our operations outside of the U.S., including laws and regulations that govern licensing, privacy, employment, safety, taxes and insurance and laws and regulations that govern the creation, continuation and the winding up of companies as well as the relationships between shareholders, our corporate entities, the public and the government in these countries. Non-compliance with these laws and regulations could result in adverse actions against us, including (i) restrictions on our operations in these countries, (ii) fines, penalties or sanctions or (iii) reputational damage. New York Department of Financial Services. In March 2017, we entered into a consent order with the NY DFS (the 2017 NY Consent Order) that provided for the termination of the engagement of a monitor appointed pursuant to an earlier 2014 consent order and for us to address certain concerns raised by the NY DFS that primarily relate to our servicing operations, as well as for us to comply with certain reporting and other obligations. In addition, in connection with the NY DFS’ approval in September 2018 of our acquisition of PHH, we agreed to satisfy certain post-closing requirements, including reporting obligations and record retention and other requirements relating to the transfer of loans collateralized by New York property (New York loans) onto Black Knight MSP and certain requirements with respect to the evaluation and supervision of management of both Ocwen and PMC. In addition, we were prohibited from boarding any additional loans onto the REALServicing system and we were required to transfer all New York loans off the REALServicing system by April 30, 2020. The conditional approval also modified a preexisting restriction on our ability to acquire MSRs such that the restriction applies only to New York loans and, with respect to New York loans, provides that Ocwen may not increase its aggregate portfolio of New York loans serviced or subserviced by Ocwen by more than 2% per year (based on the unpaid principal balance of loans serviced at the prior calendar year-end). This restriction will remain in place until the NY DFS determines that all loans serviced on the REALServicing system have been successfully migrated to Black Knight MSP and that Ocwen has developed a satisfactory infrastructure to board sizable portfolios of MSRs. We have transferred all loans onto Black Knight MSP and no longer service any loans on the REALServicing system. We continue to work with the NY DFS to address matters they continue to raise with us as well as to fulfill our commitments under the 2017 NY Consent Order and PHH acquisition conditional approval. To the extent that we fail to address adequately any concerns raised by the NY DFS or fail to fulfill our commitments to the NY DFS, the NY DFS could take regulatory action against us, including imposing fines or penalties or otherwise further restricting our business activities. Any such actions could have a material adverse impact on our business, financial condition, liquidity and results of operations. California Department of Business Oversight. In January 2015, OLS entered into a consent order (the 2015 CA Consent Order) with the CA DBO relating to our alleged failure to produce certain information and documents during a routine licensing examination. In February 2017, we entered into another consent order with the CA DBO (the 2017 CA Consent Order) that terminated the 2015 CA Consent Order and resolved open matters between us and the CA DBO. We believe that we have completed those obligations of the 2017 CA Consent Order that have already come due, and we have so notified the CA DBO. We have certain remaining reporting and other obligations under the 2017 CA Consent Order. Pursuant to the 2017 CA Consent Order, the CA DBO has engaged a third-party administrator who, at the expense of the CA DBO, has commenced work to confirm that Ocwen has completed certain commitments under the 2017 CA Consent Order. Still outstanding, however, is confirmation of our completion of $198.0 million in debt forgiveness for California borrowers by June 30, 2019. We believe that we fulfilled this requirement during the first quarter of 2019. However, our completion of this requirement is subject to testing by the CA DBO’s third-party administrator who must confirm, among other things, that modified loans have remained current for specified time periods. If we are unable to satisfy this requirement or obtain an extension, the 2017 CA Consent Order obligates us to pay the remaining amount to the CA DBO in cash. Our debt forgiveness activities take place as we modify loans - our loan modifications are designed to be sustainable for homeowners while providing a net present value for mortgage loan investors that is superior to that of foreclosure. Debt forgiveness as part of a loan modification is determined on a case-by-case basis in accordance with the applicable servicing agreement. Debt forgiveness does not involve an expense to Ocwen other than the operating expense incurred in arranging the modification, which is part of Ocwen’s role as loan servicer. If the CA DBO were to allege that we failed to comply with our obligations under the 2017 CA Consent Order or that we otherwise were in breach of applicable laws, regulations or licensing requirements, the CA DBO could also take regulatory actions against us, including imposing fines or penalties or otherwise restricting our business activities. Any such actions could have a material adverse impact on our business, financial condition, liquidity and results of operations. |
Commitments
Commitments | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments | Note 25 — Commitments Unfunded Lending Commitments We have originated floating-rate reverse mortgage loans under which the borrowers have additional borrowing capacity of $1.5 billion at December 31, 2019 . This additional borrowing capacity is available on a scheduled or unscheduled payment basis. We also had short-term commitments to lend $204.0 million and $28.5 million in connection with our forward and reverse mortgage loan IRLCs, respectively, outstanding at December 31, 2019 . We finance originated and purchased forward and reverse mortgage loans with repurchase and participation agreements, commonly referred to as warehouse lines. HMBS Issuer Obligations As an HMBS issuer, we assume certain obligations related to each security issued. The most significant obligation is the requirement to purchase loans out of the Ginnie Mae securitization pools once the outstanding principal balance of the related HECM is equal to or greater than 98% of the maximum claim amount (MCA repurchases). Active repurchased loans are assigned to HUD and payment is received from HUD, typically within 60 days of repurchase. HUD reimburses us for the outstanding principal balance on the loan up to the maximum claim amount. We bear the risk of exposure if the amount of the outstanding principal balance on a loan exceeds the maximum claim amount. Inactive repurchased loans (the borrower is deceased, no longer occupies the property or is delinquent on tax and insurance payments) are generally liquidated through foreclosure and subsequent sale of REO, with a claim filed with HUD for recoverable remaining principal and advance balances. The recovery timeline for inactive repurchased loans depends on various factors, including foreclosure status at the time of repurchase, state-level foreclosure timelines, and the post-foreclosure REO liquidation timeline. The timing and amount of our obligation with respect to MCA repurchases is uncertain as repurchase is dependent largely on circumstances outside of our control including the amount and timing of future draws and the status of the loan. MCA repurchases are expected to continue to increase due to the increased flow of HECMs and REO that are reaching 98% of their maximum claim amount. Activity with regard to HMBS repurchases, including MCA repurchases, follows: Year Ended December 31, 2019 Active Inactive Total Number Amount Number Amount Number Amount Beginning balance 10 $ 2,047 252 $ 14,833 262 $ 16,880 Additions (1) 81 19,671 241 24,517 322 44,188 Recoveries, net (2) (30 ) (10,414 ) (234 ) (12,520 ) (264 ) (22,934 ) Transfers 1 (785 ) (1 ) 785 — — Changes in value — 27 — (2,468 ) — (2,441 ) Ending balance 62 $ 10,546 258 $ 25,147 320 $ 35,693 (1) Total repurchases during the year ended December 31, 2019 , includes 189 loans totaling $38.4 million related to MCA repurchases. (2) Includes amounts received upon assignment of loan to HUD, loan payoff, REO liquidation and claim proceeds less any amounts charged off as unrecoverable. Active loan repurchases are classified as Receivables as reimbursement from HUD is generally received within 60 days and are initially recorded at fair value. Inactive loan repurchases are classified as Loans held for sale and are initially recorded at fair value. Loans are reclassified to REO in Other assets or Receivables as the loans move through the resolution process and permissible claims are submitted to HUD for reimbursement. Loans held for sale repurchased prior to October 1, 2018 are carried at the lower of cost or fair value. Receivables are valued at net realizable value. REO is valued at the estimated value of the underlying property less cost to sell. Lease Commitments We lease certain of our premises and equipment under non-cancelable operating leases with terms expiring through 2025 exclusive of renewal option periods. At December 31, 2019, the weighted average remaining term of our leases was 3.3 years. A maturity analysis of our lease liability as of December 31, 2019 is summarized as follows: 2020 $ 16,652 2021 15,356 2022 13,102 2023 3,088 2024 697 Thereafter 654 49,549 Less: Adjustment to present value (5,061 ) Total lease payments, net $ 44,488 (1) At December 31, 2019, the weighted average of the discount rate used to estimate the present value was 7.5% based on our incremental borrowing rate. We converted rental commitments for our facilities outside the U.S. to U.S. dollars using exchange rates in effect at December 31, 2019 . Operating lease cost for 2019 and Rent expense for 2018 and 2017 was $26.1 million , $16.6 million and $18.8 million , respectively. The operating lease cost for 2019 includes $5.4 million of variable lease expense. We have subleased certain of our premises with terms expiring through 2022 . Sublease income for 2019 , 2018 and 2017 was $1.5 million , $0.9 million and $0.8 million , respectively. For 2020 , 2021 and 2022 , our future annual aggregate minimum sublease income is $1.7 million , $1.6 million and $1.2 million , respectively. NRZ Relationship Our Servicing segment has exposure to concentration risk and client retention risk. As of December 31, 2019 , our servicing portfolio included significant client relationships with NRZ which represented 56% and 61% of our servicing portfolio UPB and loan count, respectively. The NRZ servicing portfolio accounts for approximately 74% of all delinquent loans that Ocwen services. The current terms of our agreements with NRZ extend through June 2020, subject to an automatic renewal provision (legacy PMC agreement) and July 2022 (legacy Ocwen agreements). Currently, subject to proper notice (generally 180 days’ notice), the payment of deboarding fees (in the case of the legacy PMC agreement) and termination fees (in the case of the legacy Ocwen agreements) and certain other provisions, NRZ has rights to terminate these agreements for convenience. Because of the large percentage of our servicing business that is represented by agreements with NRZ, if NRZ exercised all or a significant portion of these termination rights, we might need to right-size or restructure certain aspects of our servicing business as well as the related corporate support functions. We currently account for the MSR sale agreements with NRZ as secured financings as the transactions did not achieve sale accounting treatment. Accordingly, our balance sheet reflects a $915.1 million MSR asset pledged to NRZ out of a total $1.5 billion MSRs at fair value at December 31, 2019, and a corresponding $915.1 million pledged MSR liability at fair value within Other financing liabilities. Similarly, our statement of operations reflects $437.7 million net servicing fee collected on behalf of, and remitted to NRZ out of a total $975.5 million Servicing and subservicing fees for the year ended December 31, 2019, and a corresponding $437.7 million expense reported within Pledged MSR liability expense. The $437.7 million net servicing fees collected on behalf of, and remitted to NRZ did not affect our net earnings. In addition, we recognize amortization income related to lump sum payments we received from NRZ in 2017 and 2018, through April 2020, with an outstanding unamortized balance of $35.4 million at December 31, 2019. The reporting of MSRs and revenue gross versus net in our financial statements is required until sale accounting criteria are met, upon the earliest of the terms of the agreements or any termination notice. The NRZ agreements affect our net earnings through the recognition of subservicing fees we retain, which amounted $139.3 million for the year ended December 31, 2019, and ancillary income, which we estimated to be $84.7 million for the year ended December 31, 2019. If NRZ were to exercise its termination rights, our net earnings would be affected by the loss of such subservicing revenue and the decrease of operating expenses for servicing the NRZ portfolio and the associated corporate overhead allocation. Selected assets and liabilities recorded on our consolidated balance sheets as well as the impacts to our consolidated statements of operations in connection with our NRZ agreements are disclosed in Note 10 — Rights to MSRs . On February 20, 2020, we received a notice of termination from NRZ with respect to the subservicing agreement between NRZ and PMC, which accounted for 20% of our servicing portfolio UPB at December 31, 2019. See Note 28 — Subsequent Events . |
Contingencies
Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Note 26 — Contingencies When we become aware of a matter involving uncertainty for which we may incur a loss, we assess the likelihood of any loss. If a loss contingency is probable and the amount of the loss can be reasonably estimated, we record an accrual for the loss. In such cases, there may be an exposure to potential loss in excess of the amount accrued. Where a loss is not probable but is reasonably possible or where a loss in excess of the amount accrued is reasonably possible, we disclose an estimate of the amount of the loss or range of possible losses for the claim if a reasonable estimate can be made, unless the amount of such reasonably possible loss is not material to our financial position, results of operations or cash flows. If a reasonable estimate of loss cannot be made, we do not accrue for any loss or disclose any estimate of exposure to potential loss even if the potential loss could be material and adverse to our business, reputation, financial condition and results of operations. An assessment regarding the ultimate outcome of any such matter involves judgments about future events, actions and circumstances that are inherently uncertain. The actual outcome could differ materially. Where we have retained external legal counsel or other professional advisers, such advisers assist us in making such assessments. Litigation In the ordinary course of business, we are a defendant in, or a party or potential party to, many threatened and pending legal proceedings, including proceedings brought by regulatory agencies (discussed further under “Regulatory” below), those brought on behalf of various classes of claimants, those brought derivatively on behalf of Ocwen against certain current or former officers and directors or others and those brought by commercial counterparties, including claims by parties to whom we have sold MSRs or other assets or those on whose behalf we service mortgage loans. The majority of these proceedings are based on alleged violations of federal, state and local laws and regulations governing our mortgage servicing and lending activities, including, among others, the Dodd-Frank Act, the Gramm-Leach-Bliley Act, the FDCPA, the RESPA, the TILA, the Fair Credit Reporting Act, the Servicemembers Civil Relief Act, the Homeowners Protection Act, the Federal Trade Commission Act, the TCPA, the Equal Credit Opportunity Act, as well as individual state licensing and foreclosure laws and federal and local bankruptcy rules. Such proceedings include wrongful foreclosure and eviction actions, allegations of wrongdoing in connection with lender-placed insurance and mortgage reinsurance arrangements, claims relating to our property preservation activities, claims related to REO management, claims relating to our written and telephonic communications with our borrowers such as claims under the TCPA, claims related to our payment, escrow and other processing operations, claims relating to fees imposed on borrowers relating to payment processing, payment facilitation or payment convenience, claims related to ancillary products marketed and sold to borrowers, and claims regarding certifications of our legal compliance related to our participation in certain government programs. In some of these proceedings, claims for substantial monetary damages are asserted against us. For example, we are currently a defendant in various matters alleging that (1) certain fees imposed on borrowers relating to payment processing, payment facilitation or payment convenience violate the FDCPA and similar state laws, (2) certain fees we assess on borrowers are marked up improperly in violation of applicable state and federal law, (3) we breached fiduciary duties we purportedly owe to benefit plans due to the discretion we exercise in servicing certain securitized mortgage loans and (4) certain legacy mortgage reinsurance arrangements violated RESPA. In the future, we are likely to become subject to other private legal proceedings alleging failures to comply with applicable laws and regulations, including putative class actions, in the ordinary course of our business. In view of the inherent difficulty of predicting the outcome of any threatened or pending legal proceedings, particularly where the claimants seek very large or indeterminate damages, including punitive damages, or where the matters present novel legal theories or involve a large number of parties, we generally cannot predict what the eventual outcome of such proceedings will be, what the timing of the ultimate resolution will be, or what the eventual loss, if any, will be. Any material adverse resolution could materially and adversely affect our business, reputation, financial condition, liquidity and results of operations. Where we determine that a loss contingency is probable in connection with a pending or threatened legal proceeding and the amount of our loss can be reasonably estimated, we record an accrual for the loss. We have accrued for losses relating to threatened and pending litigation that we believe are probable and reasonably estimable based on current information regarding these matters. Where we determine that a loss is not probable but is reasonably possible or where a loss in excess of the amount accrued is reasonably possible, we disclose an estimate of the amount of the loss or range of possible losses for the claim if a reasonable estimate can be made, unless the amount of such reasonably possible loss is not material to our financial position, results of operations or cash flows. It is possible that we will incur losses relating to threatened and pending litigation that materially exceed the amount accrued. Our accrual for probable and estimable legal and regulatory matters, including accrued legal fees, was $30.7 million at December 31, 2019 . We cannot currently estimate the amount, if any, of reasonably possible losses above amounts that have been recorded at December 31, 2019 . In 2014, plaintiffs filed a putative class action against Ocwen in the United States District Court for the Northern District of Alabama, alleging that Ocwen violated the FDCPA by charging borrowers a convenience fee for making certain loan payments. See McWhorter et al. v. Ocwen Loan Servicing, LLC (N.D. Ala.) . The plaintiffs sought statutory damages under the FDCPA, compensatory damages and injunctive relief. We subsequently entered into an agreement in principle to resolve this matter, and in August 2019, the court granted final approval of the class settlement. While we believe we had sound legal and factual defenses, we agreed to this settlement in order to avoid the uncertain outcome of litigation and the additional expense and demands on the time of our senior management that such litigation would involve. Our accrual with respect to this matter is included in the $30.7 million legal and regulatory accrual referenced above. We are also subject to individual lawsuits relating to our FDCPA compliance and putative state law class actions based on state laws similar to the FDCPA. At this time, we cannot estimate the amount, if any, of reasonably possible loss related to these matters. Ocwen has been named in putative class actions and individual actions related to its compliance with the TCPA. Generally, plaintiffs in these actions allege that Ocwen knowingly and willfully violated the TCPA by using an automated telephone dialing system to call individuals’ cell phones without their consent. In July 2017, Ocwen entered into an agreement in principle to resolve two such putative class actions, which have been consolidated in the United States District Court for the Northern District of Illinois. See Snyder v. Ocwen Loan Servicing, LLC (N.D. Ill.); Beecroft v. Ocwen Loan Servicing, LLC (N.D. Ill.) . In October 2017, the court preliminarily approved the settlement and, thereafter, we paid a settlement amount into an escrow account held by the settlement administrator. However, in September 2018, the Court denied the motion for final approval. In November 2018, the parties engaged in mediation to address the issues raised by the Court in its denial order. The parties thereafter reached agreement on a revised settlement. In June 2019, the court entered an order approving the settlement, which provided for the establishment of a settlement fund to be distributed to class members that submit claims for settlement benefits pursuant to a claims administration process. While Ocwen believes that it has sound legal and factual defenses, Ocwen agreed to the settlement in order to avoid the uncertain outcome of litigation and the additional expense and demands on the time of its senior management that such litigation would involve. Ocwen is also involved in a related TCPA class action that involves claims against trustees of RMBS trusts based on vicarious liability for Ocwen’s alleged non-compliance with the TCPA. The trustees have sought indemnification from Ocwen based on the vicarious liability claims. Additional lawsuits have been and may be filed against us in relation to our TCPA compliance. Our accrual with respect to TCPA matters is included in the $30.7 million legal and regulatory accrual referenced above. At this time, Ocwen is unable to predict the outcome of existing lawsuits or any additional lawsuits that may be filed, the possible loss or range of loss, if any, above the amount accrued or the potential impact such lawsuits may have on us or our operations. Ocwen intends to vigorously defend against these lawsuits. If our efforts to defend these lawsuits are not successful, our business, reputation, financial condition, liquidity and results of operations could be materially and adversely affected. From time to time we are also subject to indemnification claims from contractual parties on whose behalf we service or subservice loans. We are currently involved in a dispute with a former subservicing client relating to alleged violations of our contractual agreements, including that we did not properly submit mortgage insurance and other claims for reimbursement. We are presently engaged in a dispute resolution process relating to these claims. Ocwen is currently unable to predict the outcome of this dispute or estimate the size of any loss which could result from a potential resolution reached through mediation, following litigation or otherwise. We have settled two “opt-out” securities fraud actions brought on behalf of certain putative shareholders of Ocwen based on allegations in connection with the restatements of our 2013 and first quarter 2014 financial statements, among other matters. See Brahman Partners et al. v. Ocwen Financial Corporation et al. (S.D. Fla.) and Owl Creek et al. v. Ocwen Financial Corporation et al. (S.D. Fla.). Both of these cases were dismissed with prejudice in February 2019. We have previously disclosed that as a result of the federal and state regulatory actions taken in April 2017 and shortly thereafter, which are described below under “Regulatory”, and the impact on our stock price, several putative securities fraud class action lawsuits were filed against Ocwen and certain of its officers that contain allegations in connection with Ocwen’s statements concerning its efforts to satisfy the evolving regulatory environment, and the resources it devoted to regulatory compliance, among other matters. Those lawsuits were consolidated in the United States District Court for the Southern District of Florida in the matter captioned Carvelli v. Ocwen Financial Corporation et al. (S.D. Fla.). In April 2018, the court in Carvelli granted our motion to dismiss, and dismissed the consolidated case with prejudice. Plaintiffs thereafter filed a notice of appeal with the Court of Appeals for the Eleventh Circuit, and a hearing took place in June 2019. In August 2019, the Court of Appeals affirmed the district court’s ruling dismissing the consolidated case with prejudice. Plaintiffs had until November 13, 2019 to appeal to the United States Supreme Court, but did not do so. Therefore, the case remains dismissed with prejudice. Over the past several years, lawsuits have been filed by RMBS trust investors alleging that the trustees and master servicers breached their contractual and statutory duties by (i) failing to require loan servicers to abide by their contractual obligations; (ii) failing to declare that certain alleged servicing events of default under the applicable contracts occurred; and (iii) failing to demand that loan sellers repurchase allegedly defective loans, among other things. Ocwen has received several letters from trustees and master servicers purporting to put Ocwen on notice that the trustees and master servicers may ultimately seek indemnification from Ocwen in connection with the litigations. Ocwen has not yet been impleaded into any of these cases, but it has produced and continues to produce documents to the parties in response to third-party subpoenas. Ocwen has, however, been impleaded as a third-party defendant into five consolidated loan repurchase cases first filed against Nomura Credit & Capital, Inc. in 2012 and 2013. Ocwen is vigorously defending itself in those cases against allegations by the mortgage loan seller-defendant that Ocwen failed to inform its contractual counterparties that it had discovered defective loans in the course of servicing them and had otherwise failed to service the loans in accordance with accepted standards. Ocwen is unable at this time to predict the ultimate outcome of these matters, the possible loss or range of loss, if any, associated with the resolution of these matters or any potential impact they may have on us or our operations. If, however, we were required to compensate claimants for losses related to the alleged loan servicing breaches, then our business, reputation, financial condition, liquidity and results of operations could be adversely affected. In addition, several RMBS trustees have received notices of default alleging material failures by servicers to comply with applicable servicing agreements. Although Ocwen has not yet been sued by an RMBS trustee in response to a notice of default, there is a risk that Ocwen could be replaced as servicer as a result of said notices, that the trustees could take legal action on behalf of the trust certificateholders, or, under certain circumstances, that the RMBS investors who issue notices of default could seek to press their allegations against Ocwen, independent of the trustees. We are unable at this time to predict what, if any, actions any trustee will take in response to a notice of default, nor can we predict at this time the potential loss or range of loss, if any, associated with the resolution of any notices of default or the potential impact on our operations. If Ocwen were to be terminated as servicer, or other related legal actions were pursued against Ocwen, it could have an adverse effect on Ocwen’s business, reputation, financial condition, liquidity and results of operations. Regulatory We are subject to a number of ongoing federal and state regulatory examinations, consent orders, inquiries, subpoenas, civil investigative demands, requests for information and other actions. Where we determine that a loss contingency is probable in connection with a regulatory matter and the amount of our loss can be reasonably estimated, we record an accrual for the loss. Where we determine that a loss is not probable but is reasonably possible or where a loss in excess of the amount accrued is reasonably possible, we disclose an estimate of the amount of the loss or range of possible losses for the claim if a reasonable estimate can be made, unless the amount of such reasonably possible loss is not material to our financial position, results of operations or cash flows. It is possible that we will incur losses relating to regulatory matters that materially exceed any accrued amount. Predicting the outcome of any regulatory matter is inherently difficult and we generally cannot predict the eventual outcome of any regulatory matter or the eventual loss, if any, associated with the outcome. To the extent that an examination, audit or other regulatory engagement results in an alleged failure by us to comply with applicable laws, regulations or licensing requirements, or if allegations are made that we have failed to comply with applicable laws, regulations or licensing requirements or the commitments we have made in connection with our regulatory settlements (whether such allegations are made through administrative actions such as cease and desist orders, through legal proceedings or otherwise) or if other regulatory actions of a similar or different nature are taken in the future against us, this could lead to (i) administrative fines and penalties and litigation, (ii) loss of our licenses and approvals to engage in our servicing and lending businesses, (iii) governmental investigations and enforcement actions, (iv) civil and criminal liability, including class action lawsuits and actions to recover incentive and other payments made by governmental entities, (v) breaches of covenants and representations under our servicing, debt or other agreements, (vi) damage to our reputation, (vii) inability to raise capital or otherwise fund our operations and (viii) inability to execute on our business strategy. Any of these occurrences could increase our operating expenses and reduce our revenues, hamper our ability to grow or otherwise materially and adversely affect our business, reputation, financial condition, liquidity and results of operations. CFPB In April 2017, the CFPB filed a lawsuit in the federal district court for the Southern District of Florida against Ocwen, OMS and OLS alleging violations of federal consumer financial laws relating to our servicing business dating back to 2014. The CFPB’s claims include allegations regarding (1) the adequacy of Ocwen’s servicing system and integrity of Ocwen’s mortgage servicing data, (2) Ocwen’s foreclosure practices and (3) various purported servicer errors with respect to borrower escrow accounts, hazard insurance policies, timely cancellation of private mortgage insurance, handling of customer complaints, and marketing of optional products. The CFPB alleges violations of laws prohibiting unfair, deceptive or abusive acts or practices, as well as violations of other laws or regulations. The CFPB does not claim specific monetary damages, although it does seek consumer relief, disgorgement of allegedly improper gains, and civil money penalties. We believe we have factual and legal defenses to the CFPB’s allegations and are vigorously defending ourselves. In September 2019, the court issued a ruling on our motion to dismiss, granting it in part and denying it in part. The court granted our motion dismissing the entire complaint without prejudice because the court found that the CFPB engaged in impermissible “shotgun pleading,” holding that the CFPB must amend its complaint to specifically allege and distinguish the facts between all claims. The CFPB filed an amended complaint in October 2019, and we filed our answer and affirmative defenses on November 1, 2019. Prior to the initiation of legal proceedings, we had been engaged with the CFPB in efforts to resolve the matter and recorded $12.5 million as of December 31, 2016 as a result of these discussions. Our accrual with respect to this matter is included in the $30.7 million legal and regulatory accrual referenced above. The outcome of the matters raised by the CFPB, whether through negotiated settlements, court rulings or otherwise, could potentially involve monetary fines or penalties or additional restrictions on our business and could have a material adverse impact on our business, reputation, financial condition, liquidity and results of operations. State Licensing, State Attorneys General and Other Matters Our licensed entities are required to renew their licenses, typically on an annual basis, and to do so they must satisfy the license renewal requirements of each jurisdiction, which generally include financial requirements such as providing audited financial statements or satisfying minimum net worth requirements and non-financial requirements such as satisfactorily completing examinations as to the licensee’s compliance with applicable laws and regulations. Failure to satisfy any of the requirements to which our licensed entities are subject could result in a variety of regulatory actions ranging from a fine, a directive requiring a certain step to be taken, entry into a consent order, a suspension or ultimately a revocation of a license, any of which could have a material adverse impact on our results of operations and financial condition. In addition, we receive information requests and other inquiries, both formal and informal in nature, from our state financial regulators as part of their general regulatory oversight of our servicing and lending businesses. We also regularly engage with state attorneys general and the CFPB and, on occasion, we engage with other federal agencies, including the Department of Justice and various inspectors general on various matters, including responding to information requests and other inquiries. Many of our regulatory engagements arise from a complaint that the entity is investigating, although some are formal investigations or proceedings. The GSEs (and their conservator, FHFA), HUD, FHA, VA, Ginnie Mae, the United States Treasury Department, and others also subject us to periodic reviews and audits. We have in the past resolved, and may in the future resolve, matters via consent orders, payments of monetary amounts and other agreements in order to settle issues identified in connection with examinations or other oversight activities, and such resolutions could have material and adverse effects on our business, reputation, operations, results of operations and financial condition. In April 2017 and shortly thereafter, mortgage and banking regulatory agencies from 29 states and the District of Columbia took regulatory actions against OLS and certain other Ocwen companies that alleged deficiencies in our compliance with laws and regulations relating to our servicing and lending activities. An additional state regulator brought legal action together with that state’s attorney general, as described below. In general, the regulatory actions took the form of orders styled as “cease and desist orders,” and we use that term to refer to all of the orders for ease of reference; for ease of reference we also include the District of Columbia as a state when we reference states below. All of the cease and desist orders were applicable to OLS, but additional Ocwen entities were named in some orders, including Ocwen Financial Corporation, OMS, Homeward, Liberty, OFSPL and Ocwen Business Solutions, Inc. (OBS). We entered into agreements with all 29 states plus the District of Columbia to resolve these regulatory actions. These agreements generally contained the following key terms (the Multi-State Common Settlement Terms): • Ocwen would not acquire any new residential MSRs until April 30, 2018. • Ocwen would develop a plan of action and milestones regarding its transition from the REALServicing servicing system to an alternate servicing system and, with certain exceptions, would not board any new loans onto the REALServicing system. • In the event that Ocwen chose to merge with or acquire an unaffiliated company or its assets in order to effectuate a transfer of loans from the REALServicing system, Ocwen was required to comply with regulatory notice and waiting period requirements. • Ocwen would engage a third-party auditor to perform an analysis with respect to our compliance with certain federal and state laws relating to escrow by testing approximately 9,000 loan files relating to residential real property in various states, and Ocwen would develop corrective action plans for any errors identified by the third-party auditor. • Ocwen would develop and submit for review a plan to enhance our consumer complaint handling processes. • Ocwen would provide financial condition reporting on a confidential basis as part of each state’s supervisory framework through September 2020. In addition to the terms described above, Ocwen entered into settlements with certain states on different or additional terms, which include making additional communications with and for borrowers, certain restrictions, certain review, reporting and remediation obligations, and the following additional terms: • Ocwen agreed with the Connecticut Department of Banking to pay certain amounts only in the event we fail to comply with certain requirements under our agreement with Connecticut. • In its agreement with the Maryland Office of the Commissioner of Financial Regulation, Ocwen agreed to complete an independent management assessment and enterprise risk assessment and to a prohibition, with certain de minimis exceptions, on repurchases of our stock until December 7, 2018. Ocwen also agreed to make certain payments to Maryland, to provide remediation to certain borrowers in the form of cash payments or credits and to pay certain amounts only in the event we fail to comply with certain requirements under our agreement with Maryland. • Ocwen agreed with the Massachusetts Division of Banks to pay $1.0 million to the Commonwealth of Massachusetts Mortgage Education Trust. Ocwen and the Massachusetts regulatory agency also agreed on a schedule pursuant to which we would regain eligibility to acquire residential MSRs on Massachusetts loans (including loans originated by Ocwen) as we met certain thresholds in our transition to a new servicing system. Pursuant to this agreement, all restrictions on Massachusetts MSR acquisitions would be lifted when Ocwen completed the second phase of a three-phase data integrity audit. Having now completed both the first and second phases of this audit, Ocwen is no longer bound by any restriction on the volume of MSR acquisitions in Massachusetts. • Ocwen agreed with the Nebraska Department of Banking and Finance until April 30, 2019, to limit its growth through acquisition from correspondent relationships to no more than ten percent per year for Nebraska loans (based on the total number of loans held at the prior calendar year-end). Accordingly, we have now resolved all of the administrative actions (but not all of the legal actions, which are described below) taken by state regulators in April 2017 and shortly thereafter. We have taken substantial steps toward fulfilling our commitments under the agreements described above, including completing the transfer of loans to Black Knight MSP, completing pre-transfer and post-transfer data integrity audits as described above, developing and implementing certain enhancements to our consumer complaint process, engaging a third-party auditor who has completed the initial testing phase of its escrow review and ongoing reporting and information sharing. Concurrent with the issuance of the cease and desist orders and the filing of the CFPB lawsuit discussed above, two state attorneys general took actions against us relating to our servicing practices. The Florida Attorney General, together with the Florida Office of Financial Regulation, filed a lawsuit in the federal district court for the Southern District of Florida against Ocwen, OMS and OLS alleging violations of federal and state consumer financial laws relating to our servicing business. These claims are similar to the claims made by the CFPB. The Florida lawsuit seeks injunctive and equitable relief, costs, and civil money penalties in excess of $10,000 per confirmed violation of the applicable statute. In September 2019, the court issued its ruling on our motion to dismiss, granting it in part and denying it in part. The court granted our motion dismissing the entire complaint without prejudice because the court found that the plaintiffs engaged in impermissible “shotgun pleading,” holding that the plaintiffs must amend their complaint to specifically allege and distinguish the facts between all claims. The plaintiffs filed an amended complaint on November 1, 2019. We filed a partial motion to dismiss the amended complaint on December 6, 2019. We believe we have factual and legal defenses to the allegations raised in this lawsuit and are vigorously defending ourselves. The outcome of this lawsuit, whether through a negotiated settlement, court rulings or otherwise, could potentially involve monetary fines or penalties or additional restrictions on our business and could be materially adverse to our business, reputation, financial condition, liquidity and results of operations. Our accrual with respect to this matter is included in the $30.7 million litigation and regulatory matters accrual referenced above. We cannot currently estimate the amount, if any, of reasonably possible loss above the amount currently accrued. The Massachusetts Attorney General filed a lawsuit against OLS in the Superior Court for the Commonwealth of Massachusetts alleging violations of state consumer financial laws relating to our servicing business, including with respect to our activities relating to lender-placed insurance and property preservation fees. In April 2019, we agreed to resolve this matter without admitting liability. The resolution includes a payment to the Commonwealth of Massachusetts of $675,000 , a loan modification program for certain eligible Massachusetts borrowers, and certain already-completed relief. The settlement amount of $675,000 was paid in April 2019. Our accrual with respect to the administrative and legal actions initiated in April 2017 is included in the $30.7 million litigation and regulatory matters accrual referenced above. We have also incurred, and will continue to incur costs to comply with the terms of the settlements we have entered into, including the costs of conducting an escrow review, Maryland organizational assessments and Massachusetts data integrity audits, and costs relating to the transition to Black Knight MSP. With respect to the escrow review, although the initial testing phase is now complete, the third-party auditor continues its work, including drafting its final report. To the extent that errors that have been identified require remediation, we will incur costs in connection with remediating those errors. In addition, it is possible that legal or other actions could be taken against us with respect to such errors, which could result in additional costs or other adverse impacts. If we fail to comply with the terms of our settlements, additional legal or other actions could be taken against us. Such actions could have a materially adverse impact on our business, reputation, financial condition, liquidity and results of operations. Certain of the state regulators’ cease and desist orders referenced a confidential supervisory memorandum of understanding (MOU) that we entered into with the Multistate Mortgage Committee (MMC) and six states relating to a servicing examination from 2013 to 2015. Among other things, the MOU prohibited us from repurchasing stock during the development of a going forward plan and, thereafter, except as permitted by the plan. We submitted a plan in 2016 that contained no stock repurchase restrictions and, therefore, we do not believe we are currently restricted from repurchasing stock. We requested confirmation from the signatories of the MOU that they agree with this interpretation, and received affirmative responses from the MMC and five states, and a response declining to take a legal position from the remaining state. On occasion, we engage with agencies of the federal government on various matters. For example, OLS received a letter from the Department of Justice, Civil Rights Division, notifying OLS that the Department of Justice had initiated a general investigation into OLS’s policies and procedures to determine whether violations of the Servicemembers Civil Relief Act by OLS might exist. The Department of Justice has informed us that it has decided not to take enforcement action related to this matter at this time and has, consequently, closed its investigation. In addition, Ocwen was named as a defendant in a HUD administrative complaint filed by a non-profit organization alleging discrimination in the manner in which the company maintains REO properties in minority communities. In February 2018, this matter was administratively closed, and similar claims were filed in federal court. We believe these claims are without merit and intend to vigo |
Quarterly Results of Operations
Quarterly Results of Operations (Unaudited) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Results of Operations (Unaudited) | Note 27 — Quarterly Results of Operations (Unaudited) Quarters Ended December 31, 2019 September 30, 2019 June 30, 2019 March 31, 2019 Revenue $ 261,171 $ 283,660 $ 274,493 $ 304,051 MSR valuation adjustments, net (1) 829 134,561 (147,268 ) (108,998 ) Operating expenses 138,858 179,430 184,381 171,270 Other income (expense), net (85,899 ) (277,108 ) (27,177 ) (64,867 ) Income (loss) before income taxes 37,243 (38,317 ) (84,333 ) (41,084 ) Income tax expense 2,370 4,450 5,404 3,410 Net income (loss) attributable to Ocwen stockholders $ 34,873 $ (42,767 ) $ (89,737 ) $ (44,494 ) Earnings (loss) per share attributable to Ocwen stockholders Basic $ 0.26 $ (0.32 ) $ (0.67 ) $ (0.33 ) Diluted 0.26 (0.32 ) (0.67 ) (0.33 ) (1) Positive valuation adjustments indicated in the above table represent fair value gains and negative valuation adjustments represent fair value losses. Quarters Ended December 31, 2018 (1) September 30, 2018 June 30, 2018 March 31, 2018 Revenue $ 310,929 $ 238,278 $ 253,581 $ 260,257 MSR valuation adjustments, net (61,762 ) (41,448 ) (33,118 ) (17,129 ) Operating expenses 241,057 176,078 172,532 189,372 Other income (expense), net (2) (15,873 ) (61,025 ) (76,336 ) (48,791 ) Income (loss) from continuing operations before income taxes (7,763 ) (40,273 ) (28,405 ) 4,965 Income tax expense (benefit) (4,012 ) 845 1,348 2,348 Income (loss) from continuing operations (3,751 ) (41,118 ) (29,753 ) 2,617 Income from discontinued operations, net of income taxes 1,409 — — — Net income (loss) (2,342 ) (41,118 ) (29,753 ) 2,617 Net income attributable to non-controlling interests — (29 ) (78 ) (69 ) Net loss (income) attributable to Ocwen stockholders $ (2,342 ) $ (41,147 ) $ (29,831 ) $ 2,548 Earnings (loss) per share attributable to Ocwen stockholders - Basic and Diluted Continuing operations $ (0.03 ) $ (0.31 ) $ (0.22 ) $ 0.02 Discontinued operations 0.01 — — — $ (0.02 ) $ (0.31 ) $ (0.22 ) $ 0.02 (1) The quarter ended December 31, 2018 includes the results of operations of PHH from the acquisition date of October 4, 2018 through December 31, 2018. See Note 2 — Business Acquisition for additional information. (2) Includes a bargain purchase gain, net of tax, of $64.0 million recognized during the quarter ended December 31, 2018 in connection with the acquisition of PHH. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 28 — Subsequent Events On January 27, 2020, we entered into a Joinder and Second Amendment Agreement (the Amendment) which amends the Amended and Restated SSTL Facility Agreement dated as of December 5, 2016, as amended by a Joinder and Amendment Agreement dated as of March 18, 2019. The Amendment provides for a net prepayment of $126.1 million of the outstanding loan amounts as of December 31, 2019 such that the facility has a maximum size and total initial outstanding amount of $200.0 million . The Amendment also (i) extends the maturity of the remaining outstanding loans under the SSTL to May 15, 2022, (ii) provides that the loans under the SSTL will bear interest at the one, two, three or six month Eurodollar Rate or the Base Rate (as defined in the SSTL), at our option, plus a margin of 6.00% per annum for Eurodollar Rate loans or 5.00% per annum for Base Rate loans (increasing to a margin of 6.50% per annum for Eurodollar Rate loans or 5.50% per annum for Base Rate loans on January 27, 2021) and (iii) provides for a prepayment premium of 2.00% until January 27, 2022. The loans under the amended SSTL are subject to quarterly principal payments of $5.0 million . On February 3, 2020, Ocwen’s Board of Directors authorized a share repurchase program for an aggregate amount of up to $5.0 million of Ocwen’s issued and outstanding shares of common stock. Repurchases may be made in open market transactions at prevailing market prices. The timing and execution of any related share repurchases is subject to market conditions, among other factors. Unless we amend the share repurchase program or repurchase the full $5.0 million amount by an earlier date, the share repurchase program will continue through February 3, 2021. No assurances can be given as to the amount of shares, if any, that we may repurchase in any given period. On February 20, 2020, we received a notice of termination from NRZ with respect to the PMC subservicing agreement discussed in Note 10 — Rights to MSRs . The notice states that the effective date of termination is June 19, 2020 with respect to 25% of the Initial Mortgage Loans under the agreement and August 18, 2020 for the remainder of the loans under the agreement. The portfolio subject to termination accounted for $42.1 billion in UPB, or 20% of our total servicing portfolio UPB at December 31, 2019, and $28.8 million servicing fees, or 4% of our total servicing and subservicing fees in 2019 (excluding ancillary income). The loans that were added by NRZ under the PMC subservicing agreement in 2019 and amounted to approximately $6.6 billion in UPB are subject to the termination with the stated effective date of August 18, 2020. At December 31, 2019, we reported a $312.1 million MSR asset at fair value for the servicing agreement subject to termination, or 3% of our total assets, and a corresponding $312.1 million pledged MSR liability at fair value. In connection with the termination, we estimate that we will receive loan deboarding fees of approximately $6.1 million from NRZ. This termination is for convenience and not for cause. We intend to work with NRZ to transfer the servicing of the loans in an orderly manner. NRZ has not provided notice of termination with respect to its other servicing agreements. |
Organization, Business Enviro_2
Organization, Business Environment, Basis of Presentation and Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization Ocwen Financial Corporation (NYSE: OCN) (Ocwen, we, us and our) is a non-bank mortgage servicer and originator providing solutions through its primary operating subsidiaries, PHH Mortgage Corporation (PMC) and Liberty Home Equity Solutions, Inc. (Liberty). We are headquartered in West Palm Beach, Florida with offices in the United States (U.S.) and the United States Virgin Islands (USVI) and operations in India and the Philippines. Ocwen is a Florida corporation organized in February 1988. Ocwen directly or indirectly owns all of the outstanding common stock of its operating subsidiaries, including PMC since its acquisition on October 4, 2018, Liberty, Ocwen Financial Solutions Private Limited (OFSPL) and Ocwen USVI Services, LLC (OVIS). We perform servicing activities related to our own MSR portfolio (primary) and on behalf of other servicers (subservicing), the largest being New Residential Investment Corp. (NRZ), and investors (primary and master servicing), including the Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac) (collectively, the GSEs), the Government National Mortgage Association (Ginnie Mae) and private-label securitizations (non-Agency). As a subservicer or primary servicer, we may be required to make advances for certain property tax and insurance premium payments, default and property maintenance payments and principal and interest payments on behalf of delinquent borrowers to mortgage loan investors before recovering them from borrowers. Most, but not all, of our subservicing agreements provide for us to be reimbursed for any such advances by the owner of the servicing rights. Advances made by us as primary servicer are generally recovered from the borrower or the mortgage loan investor. As master servicer, we collect mortgage payments from primary servicers and distribute the funds to investors in the mortgage-backed securities. To the extent the primary servicer does not advance the scheduled principal and interest, as master servicer we are responsible for advancing the shortfall, subject to certain limitations. We originate, sell and securitize conventional (conforming to the underwriting standards of Fannie Mae or Freddie Mac; collectively referred to as Agency loans) and government-insured (Federal Housing Administration (FHA) or Department of Veterans Affairs (VA)) forward mortgages, generally servicing retained. The GSEs or Ginnie Mae guarantee these mortgage securitizations. We originate HECM loans, or reverse mortgages, that are mostly insured by the FHA and are an approved issuer of HMBS that are guaranteed by Ginnie Mae. We had a total of approximately 5,300 employees at December 31, 2019 of which approximately 3,400 were located in India and approximately 400 were based in the Philippines. Our operations in India and the Philippines primarily provide internal support services, principally to our loan servicing business and our corporate functions. Of our foreign-based employees, nearly 80% were engaged in supporting our loan servicing operations as of December 31, 2019 . |
Consolidation and Basis of Presentation | Consolidation and Basis of Presentation Principles of Consolidation Our consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the U.S. (GAAP). Our consolidated financial statements include the accounts of Ocwen, its wholly-owned subsidiaries and any variable interest entity (VIE) for which we have determined that we are the primary beneficiary. We apply the equity method of accounting to investments when the entity is not a VIE, and we are able to exercise significant influence, but not control, over the policies and procedures of the entity but own 50% or less of the voting securities. Our statements of operations and consolidated balance sheets include the accounts and results of PHH Corporation and its subsidiaries since acquisition on October 4, 2018. See Note 2 — Business Acquisition for additional information. We have eliminated intercompany accounts and transactions in consolidation. Foreign Currency Translation The functional currency of each of our foreign subsidiaries is the U.S. dollar. Re-measurement adjustments of foreign-denominated amounts to U.S. dollars are included in Other, net in our consolidated statements of operations. |
Reclassifications | Reclassifications Certain amounts in the consolidated statements of operations for 2018 and 2017 have been reclassified to conform to the current year presentation. The reclassifications had no impact on net income (loss) or total revenue in our consolidated statements of operations and no impact on operating, investing and financing cash flows in our consolidated statements of cash flows. We now present Reverse mortgage revenue, net as a separate revenue line item on the face of the statements of operations to provide a further breakdown of Other revenue, net and provide greater transparency on the performance associated with our portfolio of HECM loans, net of the HMBS-related borrowings that are both measured at fair value, as follows: Years ended December 31, 2018 2017 Statements of Operations Revenue From Gain on loans held for sale, net $ 40,407 $ 46,219 From Other revenue, net 22,577 31,517 From Servicing and subservicing fees (2,747 ) (2,221 ) To Reverse mortgage revenue, net (New line item) 60,237 75,515 Total revenue — — In addition to the above reclassifications, we have made the following presentation changes: • In the consolidated statements of operations, we now separately present MSR valuation adjustments, net from Total expenses, renamed “Operating expenses”. The purpose of this reclassification is to separately present fair value changes from operating expenses and provide additional insights on the nature of our performance. • Within the Other income (expense), net on the consolidated statements of operations, we now present the expense related to the pledged MSR liability recorded at fair value separately from Interest expense. The purpose of this reclassification is to improve transparency between the interest expense associated with interest-bearing liabilities recorded on an accrual basis and expenses that are attributable to the pledged MSR liability recorded at fair value. The pledged MSR liability is the obligation to deliver NRZ all contractual cash flows associated with the underlying MSR that did not meet the requirements for sale accounting treatment. The Pledged MSR liability expense reflects net servicing fee remittance and fair value changes. In the Supplemental cash flow section of the consolidated statements of cash flows, as a result of this reclassification of Pledged MSR liability expense from interest expense, we have reclassified $171.7 million and $236.3 million of Pledged MSR liability expense out of Interest paid in 2018 and 2017, respectively. • Within the Total liabilities section of our consolidated balance sheet at December 31, 2018, we reclassified borrowings with an outstanding balance of $65.5 million from Other financing liabilities to Other secured borrowings. Effective with this reclassification, all amounts included in Other financing liabilities represent secured financing as a result of sale transactions that do not meet the requirements for sale accounting treatment. • Within the Cash flows from financing activities section of our consolidated statements of cash flows, we reclassified repayments of our SSTL from the Repayments of mortgage loan warehouse facilities and other secured borrowings line item to a new line item (Repayment of SSTL borrowings). |
Use of Estimates and Assumptions | Use of Estimates and Assumptions The preparation of financial statements in conformity with GAAP requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Such estimates and assumptions include, but are not limited to fair value measurements, allowance for losses, income taxes, indemnification obligations, litigation-related obligations, and our going concern evaluation. In developing estimates and assumptions, management uses all available information; however, actual results could materially differ from those estimates and assumptions. |
Cash | Cash and cash equivalents Cash includes both interest-bearing and non-interest-bearing demand deposits with financial institutions that have original maturities of 90 days or less. |
Restricted Cash | Restricted Cash Restricted cash includes amounts specifically designated to repay debt, to provide over-collateralization for secured borrowings and match funded debt facilities, and to provide additional collateral to support certain obligations, including letters of credit. |
Mortgage Servicing Rights (MSR) | Mortgage Servicing Rights MSRs are assets representing our right to service portfolios of mortgage loans. We retain MSRs on originated or purchased loans when they are sold in the secondary market. We also acquire MSRs through asset purchases or business combination transactions. The unpaid principal balance (UPB) of the loans underlying the MSRs is not included on our consolidated balance sheets. For servicing retained in connection with the securitization of reverse mortgage loans accounted for as secured financings, we do not recognize an MSR. All newly acquired or retained MSRs are initially measured at fair value. To the extent any portfolio contract is not expected to compensate us adequately for performing the servicing, we would recognize a servicing liability. We define contracts as Agency, government-insured or non-Agency (commonly referred to as non-prime, subprime or private-label loans) based on their general comparability with regard to servicing guidelines, underwriting standards and borrower risk characteristics. We identify classes of servicing assets and servicing liabilities based on the availability of market inputs used in determining their fair value and our methods for managing their risks. Servicing assets are not recognized for subservicing arrangements entered into with the entity that owns the MSRs. Subsequent to acquisition, we account for servicing assets and servicing liabilities at fair value, and report changes in fair value in earnings (MSR valuation adjustments, net) in the period in which the changes occur. Effective January 1, 2018, we elected fair value accounting for our MSRs previously accounted for using the amortization method, which included Agency MSRs and government-insured MSRs. Effective with this election, our entire portfolio of MSRs is accounted for using the fair value measurement method. We recorded a cumulative-effect adjustment of $82.0 million to retained earnings as of January 1, 2018 to reflect the excess of the fair value over the carrying amount. See Note 9 — Mortgage Servicing for additional information. Until December 31, 2017, for servicing assets or liabilities that we previously accounted for using the amortization method, we amortized the balances in proportion to, and over the period of, estimated net servicing income (if servicing revenues exceed servicing costs) or net servicing loss (if servicing costs exceed servicing revenues). Estimated net servicing income is primarily driven by the estimated future cash flows of the underlying mortgage loan portfolio, which, absent new purchases, declines over time from prepayments and scheduled loan amortization. We adjusted MSR amortization prospectively in response to changes in estimated projections of future cash flows. We stratified servicing assets or liabilities based upon one or more of the predominant risk characteristics of the underlying portfolios and assess servicing assets or liabilities for impairment or increased obligation by determining the difference, if any, between the carrying amount and estimated fair value at each reporting date. We recognized any impairment, or increased obligation, through a valuation allowance which was adjusted to reflect subsequent changes in the measurement of impairment and reported in earnings (MSR valuation adjustments, net) in the period in which the changes occurred. We do not recognize fair value in excess of the carrying amount of servicing assets for any stratum. We earn fees for servicing and subservicing mortgage loans. We collect servicing and subservicing fees, generally expressed as a percent of UPB, from the borrowers’ payments. In addition to servicing and subservicing fees, we also report late fees, prepayment penalties, float earnings and other ancillary fees as revenue in Servicing and subservicing fees in our consolidated statements of operations. We recognize servicing and subservicing fees as revenue when the fees are earned, which is generally when the borrowers’ payments are collected or when loans are modified or liquidated through the sale of the underlying real estate collateral or otherwise. |
Advances and Match Funded Advances | Advances and Match Funded Advances During any period in which a borrower does not make payments, servicing and subservicing agreements may require that we advance our own funds to meet contractual principal and interest remittance requirements for the investors, to pay property taxes and insurance premiums and to process foreclosures. We also advance funds to maintain, repair and market foreclosed real estate properties on behalf of investors. These advances are made pursuant to the terms of each servicing and subservicing contract. Each servicing and subservicing contract is associated with specific loans, identified as a pool. When we make an advance on a loan under each servicing or subservicing contract, we are entitled to recover that advance either from the borrower, for reinstated and performing loans, or from guarantors (GSEs), insurers (FHA/VA) and investors, for modified and liquidated loans. Most of our servicing and subservicing contracts provide that the advances made under the respective agreement have priority over all other cash payments from the proceeds of the loan, and in the majority of cases, the proceeds of the pool of loans that are the subject of that servicing or subservicing contract. As a result, we are entitled to repayment from loan proceeds before any interest or principal is paid on the bonds, and in the majority of cases, advances in excess of loan proceeds may be recovered from pool level proceeds. We establish an allowance for losses through a charge to earnings (Servicing and origination expense) to the extent we believe that a portion of advances are uncollectible under the provisions of each servicing contract taking into consideration, among other factors, probability of cure or modification, length of delinquency and the amount of the advance. We are generally only obligated to advance funds to the extent that we believe the advances are recoverable from expected proceeds from the loan. We continually assess collectibility using proprietary cash flow projection models that incorporate a number of different factors, depending on the characteristics of the mortgage loan or pool, including, for example, estimated time to a foreclosure sale, estimated costs of foreclosure action, estimated future property tax payments and the estimated value of the underlying property net of estimated carrying costs, commissions and closing costs. Under the terms of our subservicing agreements, we are generally reimbursed by our subservicing clients on a monthly or more frequent basis. For those advances that have been reimbursed, i.e., that are off-balance sheet, if a loss contingency is probable and reasonably estimable, we recognize a loss contingency accrual for the amount of advances deemed uncollectible caused by our failure to comply with the subservicing agreements or our servicing practices. We report such loss contingency within Other liabilities - Liability for indemnification obligations. |
Loans Held for Sale | Loans Held for Sale Loans held for sale include forward and reverse mortgage loans that we do not intend to hold until maturity. We report loans held for sale at either fair value or the lower of cost or fair value computed on an aggregate basis. For loans we measure at the lower of cost or fair value, we account for any excess of cost over fair value as a valuation allowance and include changes in the valuation allowance in Other, net, in the consolidated statements of operations in the period in which the change occurs. For loans that we elected to measure at fair value on a recurring basis, we report changes in fair value in Gain on loans held for sale, net in the consolidated statements of operations in the period in which the changes occur. These loans are expected to be sold into the secondary market to the GSEs, into Ginnie Mae guaranteed securitizations or to third-party investors. We report any gain or loss on the transfer of loans held for sale in Gain on loans held for sale, net in the consolidated statements of operations along with the changes in fair value of the loans and the gain or loss on any related derivatives. When loans are sold or securitized with servicing retained, the gain on sale includes the MSR retained as non-cash proceeds at the date of sale. We include all changes in loans held for sale and related derivative balances in operating activities in the consolidated statements of cash flows. We accrue interest income as earned. We place loans on non-accrual status after any portion of principal or interest has been delinquent for more than 89 days , or earlier if management determines the borrower is unable to continue performance. When we place a loan on non-accrual status, we reverse the interest that we have accrued but not yet received. We return loans to accrual status only when we reinstate the loan and there is no significant uncertainty as to collectability. |
Loans Held for Investment | Loans Held for Investment Newly originated reverse residential mortgage loans that are insured by the FHA and pooled into Ginnie Mae guaranteed securities that we sell into the secondary market with servicing rights retained are classified as loans held for investment. We have elected to measure these loans at fair value. Loan transfers in these Ginnie Mae securitizations do not meet the definition of a participating interest and as a result, the transfers of the reverse mortgages do not qualify for sale accounting. Therefore, we account for these transfers as financings, with the reverse mortgages classified as Loans held for investment, at fair value, on our consolidated balance sheets, with no gain or loss recognized on the transfer. We have elected to fair value future draw commitments for HECM loans purchased or originated after December 31, 2018. The estimated fair value is included in Loans held for investment on our consolidated balance sheet with changes in fair value recognized in Reverse mortgage revenue, net in our consolidated statement of operations. The value of future draw commitments for HECM loans purchased or originated before January 1, 2019 is recognized as the draws are securitized or sold. Upfront costs and fees related to loans held for investment, including broker fees, are recognized in Reverse mortgage revenue, net in the statement of operations as incurred and are not capitalized. Premiums on loans purchased via the correspondent channel are capitalized upon origination because they represent part of the purchase price. However, the loans are subsequently measured at fair value on a recurring basis. We record the proceeds from the transfer of assets as secured borrowings (HMBS-related borrowings) in Financing liabilities and recognize no gain or loss on the transfer. We measure the HECM loans and HMBS-related borrowings at fair value on a recurring basis. The changes in fair value of the HECM loans and HMBS-related borrowings are included in Reverse mortgage revenue, net in our consolidated statements of operations. Included in net fair value changes on the HECM loans and related HMBS borrowings are the net interest income that we expect to be collected on the HECM loans and the interest expense that we expect to be paid on the HMBS-related borrowings. In addition, reverse mortgage revenue, net includes the fair value changes of the interest rate lock commitments related to reverse mortgage loans. We report originations and collections of HECM loans in investing activities in the consolidated statements of cash flows. We report net fair value gains on HECM loans and the related HMBS borrowings as an adjustment to the net cash provided by or used in operating activities in the consolidated statements of cash flows. Proceeds from securitizations of HECM loans and payments on HMBS-related borrowings are included in financing activities in the consolidated statements of cash flows. |
Transfers of Financial Assets and MSRs | Transfers of Financial Assets and MSRs We securitize, sell and service forward and reverse residential mortgage loans. Securitization transactions typically involve the use of VIEs and are accounted for either as sales or as secured financings. We typically retain economic interests in the securitized assets in the form of servicing rights and obligations. In order to efficiently finance our assets and operations and create liquidity, we may sell servicing advances, MSRs or the right to receive certain servicing fees relating to MSRs (Rights to MSRs). In order to determine whether or not a VIE is required to be consolidated, we consider our ongoing involvement with the VIE. In circumstances where we have both the power to direct the activities that most significantly impact the performance of the VIE and the obligation to absorb losses or the right to receive benefits that could be significant, we would conclude that we would consolidate the entity, which precludes us from recording an accounting sale in connection with the transfer of the financial assets. In the case of a consolidated VIE, we continue to report the underlying residential mortgage loans or servicing advances, and we record the securitized debt on our consolidated balance sheet. In the case of transfers where either one or both of the power or economic criteria above are not met, we evaluate whether a sale has occurred for accounting purposes. In order to recognize a sale, the transferred assets must be legally isolated, not be constrained by restrictions from further transfer and be deemed to be beyond our control. If the transfer does not meet any of these three criteria, the transaction is accounted for consistent with a secured financing. In certain situations, we may have continuing involvement in transferred loans through our retained servicing. Transactions involving retained servicing would still be eligible for sale accounting, as we have ceded effective control of these loans to the purchaser. Subsequent to the determination that a transaction does not meet the accounting sale criteria, we may determine that we meet the criteria. In the event we subsequently meet the accounting sale criteria, we derecognize the transferred assets and related liabilities. In connection with the Ginnie Mae early buyout program, our agreements provide either that: (a) we have the right, but not the obligation, to repurchase previously transferred mortgage loans under certain conditions, including the mortgage loans becoming eligible for pooling under a program sponsored by Ginnie Mae; or (b) we have the obligation to repurchase previously transferred mortgage loans that have been subject to a successful trial modification before any permanent modification is made. Once these conditions are met, we have effectively regained control over the mortgage loan(s), and under GAAP, must re-recognize the loans on our consolidated balance sheets and establish a corresponding repurchase liability. With respect to those loans that we have the right, but not the obligation, to repurchase under the applicable agreement, this requirement applies regardless of whether we have any intention to repurchase the loan. We re-recognize the loans in Other assets and a corresponding liability in Other liabilities. In the case of transfers of MSRs and Rights to MSRs where we retain the right to subservice, we defer any related gain or loss and amortize the balance over the life of the subservicing agreement. Gains or losses on off-balance sheet securitizations take into consideration any retained interests, including servicing rights and representation and warranty obligations, both of which are initially recorded at fair value at the date of sale in Gain on loans held for sale, net, in our consolidated statements of operations. |
Premises and Equipment | Premises and Equipment We report premises and equipment at cost and, except for land, depreciate them over their estimated useful lives on a straight-line basis as follows: Computer software 2 – 3 years Computer hardware 3 years Buildings 40 years Leasehold improvements Term of the lease not to exceed useful life Right of Use (ROU) assets Term of the lease not to exceed useful life Furniture and fixtures 5 years Office equipment 5 years |
Litigation | Litigation We monitor our legal matters, including advice from external legal counsel, and periodically perform assessments of these matters for potential loss accrual and disclosure. We establish a liability for settlements, judgments on appeal and filed and/or threatened claims for which we believe that it is probable that a loss has been or will be incurred and the amount can be reasonably estimated. We recognize legal costs associated with loss contingencies in Professional services expense in the consolidated statement of operations as incurred. |
Stock-Based Compensation | Stock-Based Compensation We initially measure the cost of employee services received in exchange for a stock-based award as the fair value of the award on the grant date. For awards which must be settled in cash and are therefore classified as liabilities rather than equity in the consolidated balance sheet, fair value is subsequently remeasured and fair value changes are reported as compensation expense at each reporting date. For equity awards with a service condition, we recognize the cost as compensation expense ratably over the vesting period. For equity awards with a market condition, we recognize the cost as compensation expense ratably over the expected life of the option that is derived from an options pricing model. When equity awards with a market condition meet their vesting requirements, any unrecognized compensation at the vesting date is recognized ratably over the vesting period. For equity awards with both a market condition and a service condition for vesting, we recognize cost as compensation expense over the requisite service period for each tranche of the award using the graded-vesting method. |
Income Taxes | Income Taxes We file consolidated U.S. federal income tax returns. We allocate consolidated income tax among all subsidiaries included in the consolidated return as if each subsidiary filed a separate return or, in certain cases, a consolidated return. We account for income taxes using the asset and liability method, which requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Additionally, we adjust deferred taxes to reflect estimated tax rate changes. We conduct periodic evaluations to determine whether it is more likely than not that some or all of our deferred tax assets will not be realized. Among the factors considered in this evaluation are estimates of future earnings, the future reversal of temporary differences and the impact of tax planning strategies that we can implement if warranted. We provide a valuation allowance for any portion of our deferred tax assets that, more likely than not, will not be realized. We recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the consolidated financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. We recognize interest and penalties related to income tax matters in Income tax expense. In December 2017, the Securities and Exchange Commission Staff issued Staff Accounting Bulletin (SAB) 118 (as further clarified by FASB ASU 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118), which provides guidance on accounting for the income tax effects of the Tax Cuts and Jobs Act (Tax Act) signed into law by the President of the United States on December 22, 2017. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under Accounting Standards Codification (ASC) 740, Income Taxes . In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Tax Act for which the accounting under ASC 740 is complete. To the extent that a company's accounting for certain income tax effects of the Tax Act is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements and should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the Tax Act. We adopted the guidance of SAB 118 as of December 31, 2017. We finalized our provisional amounts recognized under SAB 118 in the fourth quarter of 2018. See Note 20 — Income Taxes for additional information. |
Basic and Diluted Earnings per Share | Basic and Diluted Earnings per Share We calculate basic earnings per share based upon the weighted average number of shares of common stock outstanding during the year. We calculate diluted earnings per share based upon the weighted average number of shares of common stock outstanding and all dilutive potential common shares outstanding during the year. The computation of diluted earnings per share includes the estimated impact of the exercise of the outstanding options to purchase common stock using the treasury stock method. |
Going Concern | Going Concern In accordance with FASB ASC 205-40, Presentation of Financial Statements - Going Concern , we evaluate whether there are conditions that are known or reasonably knowable, such as those discussed in the “Business Environment” section, that raise substantial doubt about our ability to continue as a going concern within one year after the date that our financial statements are issued. Our financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The assessment of our ability to meet our future obligations is inherently judgmental, subjective and susceptible to change. Our assessment considers information including, but not limited to, our financial condition, liquidity sources, obligations coming due within one year after the financial statements are issued, funds necessary to maintain current operations and any negative financial trends or other indicators of possible financial difficulty, including adverse regulatory or legal proceedings, adverse counterparty actions or rating agency decisions, and our client concentration. Based on our evaluation, we have determined that there are no conditions that are known or reasonably knowable that raise substantial doubt about our ability to continue as a going concern within one year after the date that our financial statements for the year ended December 31, 2019 are issued. |
Recently Adopted Accounting Standards | Accounting Standards Adopted in 2019 Leases (ASU 2016-02, ASU 2018-10, ASU 2018-11 and ASU 2019-01) This ASU requires a lessee to recognize right-of-use (ROU) assets and lease liabilities on the balance sheet, regardless of whether the lease is classified as a finance or operating lease. We adopted the new leasing guidance on January 1, 2019, and we elected practical expedients permitted by the new standard which provided us transition relief when assessing leases that commenced prior to the adoption date, including determining whether existing contracts are or contain leases, the classification of such leases as operating or financing, and the accounting for initial direct costs. No adjustments were made to comparative prior periods. The adoption resulted in the recognition of a cumulative-effect adjustment to the opening balance of Retained earnings, the recognition of a gross ROU asset and lease liability, and the reclassification of existing balances for our leases as follows: Balances as of December 31, 2018 (1) Recognition of Gross ROU Asset and Lease Liability Reclassification of Existing Balances Balances Premises and Equipment: Right-of-use assets $ — $ 66,231 $ (21,438 ) $ 44,793 Other Assets: Prepaid expenses (rent) 977 — (977 ) — Other Liabilities: Liability for lease abandonments and deferred rent (5,498 ) — 5,498 — Lease liability — (66,247 ) 977 (65,270 ) Liabilities related to discontinued operations: Liability for lease abandonments (3) (15,940 ) — 15,940 — Retained Earnings: Cumulative effect of adopting ASU 2016-02 — 16 — 16 (1) Represents amounts related to leases impacted by the adoption of this ASU that were included in our December 31, 2018 consolidated balance sheet. (2) ROU assets as of January 1, 2019 after transition adjustments includes $30.4 million related to premises located in the U.S., $13.6 million related to premises located in India and the Philippines, and $0.7 million related to equipment. (3) Represents lease impairments recognized by PHH prior to the acquisition. Our leases include non-cancelable operating leases for premises and equipment with maturities extending to 2025, exclusive of renewal option periods. At lease commencement and renewal date, we estimate the ROU assets and lease liability at present value using our estimated incremental borrowing rate, which was 7.5% on the initial recognition date of January 1, 2019. We elected to recognize ROU assets and lease liabilities that arise from short-term leases. Restricted cash includes a $23.2 million deposit as collateral for an irrevocable standby letter of credit issued in connection with one of our leased facilities. This letter of credit requirement under the terms of the lease agreement is primarily the result of PHH not meeting certain credit rating criteria prior to the acquisition. The required amount of the letter of credit will be reduced each month beginning in January 2021 through the lease expiration on December 31, 2022. We amortize the balance of the ROU assets and recognize interest on the lease liability that we report in Occupancy and equipment expense in our consolidated statements of operations. Our lease liability represents the present value of the lease payments and is reduced as we make cash payments on our lease obligations. Our ROU lease assets are evaluated for impairment, in accordance with ASC 360, Premises and Equipment , at each reporting date. Subsequent to adoption, we made the decision to vacate six leased properties prior to the contractual maturity date of the lease agreements. As a result of our plan to vacate the office space, we accelerated the recognition of amortization on the ROU assets based on the shortened remaining useful life of the leases. During 2019, we recorded total accelerated amortization and other expenses of $8.3 million related to these leases in Occupancy and equipment expense in our consolidated statements of operations. Receivables: Nonrefundable Fees and Other Costs (ASU 2017-08) This ASU amends the amortization period for certain purchased callable debt securities held at a premium. This standard shortens the amortization period for the premium to the earliest call date, rather than generally amortizing the premium as an adjustment of yield over the contractual life of the instrument. Our adoption of this standard on January 1, 2019 did not have a material impact on our consolidated financial statements. Income Statement - Reporting Comprehensive Income: Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (ASU 2018-02) This ASU provides entities with an option to reclassify stranded tax effects within accumulated other comprehensive income to retained earnings in each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Act (or portion thereof) is recorded. Our adoption of this standard on January 1, 2019 did not have a material impact on our consolidated financial statements. Accounting Standards Issued but Not Adopted in 2019 Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments (ASU 2016-13 and ASU 2019-04) This ASU will require more timely recording of credit losses on loans and other financial instruments. This standard aligns the accounting with the economics of lending by requiring banks and other lending institutions to immediately record the full amount of credit losses that are expected in their loan portfolios. The new guidance requires an organization to measure all expected credit losses for financial assets and certain off-balance sheet credit exposures at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This standard requires enhanced disclosures related to the significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization’s portfolio. Additionally, the new guidance amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. We will adopt this standard on January 1, 2020 by applying the guidance at the adoption date with a cumulative-effect adjustment to the opening balance of retained earnings. As permitted by this standard, we will make an irrevocable fair value election for certain financial instruments within the scope of the standard, including the future draw commitments for HECM loans that are not accounted at fair value (i.e., those purchased or originated before January 1, 2019). We expect to record a $47.0 million cumulative-effect transition gain adjustment (before income taxes) to retained earnings as of January 1, 2020 to reflect the fair value of these financial instruments. We do not expect any significant tax effect of this adjustment as the increase in the deferred tax liability is expected to be offset by a corresponding decrease to the valuation allowance. We currently do not expect the transition adjustment related to financial instruments for which we are not electing the fair value option to result in a significant adjustment to the opening balance of retained earnings. Fair Value Measurement: Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement (ASU 2018-13) This ASU modifies the disclosure requirements for fair value measurements in FASB ASC Topic 820, Fair Value Measurement. The main provisions in this ASU include removal of the following disclosure requirements: 1) the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, 2) the policy for timing of transfers between levels and 3) the valuation processes for Level 3 fair value measurements. This standard adds disclosure requirements to report the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period, and for certain unobservable inputs an entity may disclose other quantitative information in lieu of the weighted average if the entity determines that other quantitative information would be a more reasonable and rational method to reflect the distribution of unobservable inputs used to develop Level 3 fair value measurements. Our adoption of this standard on January 1, 2020 did not have a material impact on our consolidated financial statements. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty will be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments will be applied retrospectively to all periods presented upon their effective date. Intangibles - Goodwill and Other - Internal-Use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (ASU 2018-15) This ASU aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal use software license). The accounting for the service element of a hosting arrangement that is a service contract is not affected by the amendments in this ASU. The amendments in this ASU require an entity (customer) in a hosting arrangement that is a service contract to follow the guidance to determine which implementation costs to capitalize as an asset related to the service contract and which costs to expense. The amendments in this ASU require the entity (customer) to expense the capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement. The amendments in this ASU also require the entity to present the expense related to the capitalized implementation costs in the same line item in the statement of operations as the fees associated with the hosting element (service) of the arrangement and classify payments for capitalized implementation costs in the statement of cash flows in the same manner as payments made for fees associated with the hosting element. Upon adoption of this standard on January 1, 2020, we elected to apply the amendments in this ASU prospectively to all implementation costs incurred subsequent to that date. We do not anticipate that our adoption of this standard will have a material impact on our consolidated financial statements. Compensation - Retirement Benefits - Defined Benefit Plans: Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans (ASU 2018-14) This ASU modifies the disclosure requirements for defined benefit plans in FASB ASC Subtopic 715-20, Compensation-Retirement Benefits-Defined Benefit Plans-General. The main provisions in this ASU include removal of the following disclosure requirements: 1) the amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit cost over the next fiscal year, 2) the amount and timing of plan assets expected to be returned to the employer, 3) related party disclosures about the amount of future annual benefits covered by insurance and annuity contracts and significant transactions between the employer or related parties and the plan, and 4) the effects of a one-percentage-point change in assumed health care cost trend rates on the (a) aggregate of the service and interest cost components of net periodic benefit costs and (b) benefit obligation for postretirement health care benefits. This ASU adds disclosure requirements to report 1) the weighted-average interest crediting rates for cash balance plans and other plans with promised interest crediting rates and 2) an explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period. The ASU clarifies disclosure requirements in paragraph 715-20-50-3, which state that the 1) projected benefit obligation (PBO) and fair value of plan assets for plans with PBOs in excess of plan assets and 2) accumulated benefit obligation (ABO) and fair value of plan assets for plans with ABOs in excess of plan assets should be disclosed for defined benefit plans. Our adoption of this standard on January 1, 2020 did not have a material impact on our consolidated financial statements. Upon adoption, we elected to apply the amendments in this ASU prospectively. |
Organization, Business Enviro_3
Organization, Business Environment, Basis of Presentation and Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Reclassifications of Prior Period Amounts to Confirm with Current Period Presentation | We now present Reverse mortgage revenue, net as a separate revenue line item on the face of the statements of operations to provide a further breakdown of Other revenue, net and provide greater transparency on the performance associated with our portfolio of HECM loans, net of the HMBS-related borrowings that are both measured at fair value, as follows: Years ended December 31, 2018 2017 Statements of Operations Revenue From Gain on loans held for sale, net $ 40,407 $ 46,219 From Other revenue, net 22,577 31,517 From Servicing and subservicing fees (2,747 ) (2,221 ) To Reverse mortgage revenue, net (New line item) 60,237 75,515 Total revenue — — |
Schedule of Property and Equipment Useful Lives | We report premises and equipment at cost and, except for land, depreciate them over their estimated useful lives on a straight-line basis as follows: Computer software 2 – 3 years Computer hardware 3 years Buildings 40 years Leasehold improvements Term of the lease not to exceed useful life Right of Use (ROU) assets Term of the lease not to exceed useful life Furniture and fixtures 5 years Office equipment 5 years |
Schedule of Adoption of New Accounting Pronouncement | The adoption resulted in the recognition of a cumulative-effect adjustment to the opening balance of Retained earnings, the recognition of a gross ROU asset and lease liability, and the reclassification of existing balances for our leases as follows: Balances as of December 31, 2018 (1) Recognition of Gross ROU Asset and Lease Liability Reclassification of Existing Balances Balances Premises and Equipment: Right-of-use assets $ — $ 66,231 $ (21,438 ) $ 44,793 Other Assets: Prepaid expenses (rent) 977 — (977 ) — Other Liabilities: Liability for lease abandonments and deferred rent (5,498 ) — 5,498 — Lease liability — (66,247 ) 977 (65,270 ) Liabilities related to discontinued operations: Liability for lease abandonments (3) (15,940 ) — 15,940 — Retained Earnings: Cumulative effect of adopting ASU 2016-02 — 16 — 16 (1) Represents amounts related to leases impacted by the adoption of this ASU that were included in our December 31, 2018 consolidated balance sheet. (2) ROU assets as of January 1, 2019 after transition adjustments includes $30.4 million related to premises located in the U.S., $13.6 million related to premises located in India and the Philippines, and $0.7 million related to equipment. (3) Represents lease impairments recognized by PHH prior to the acquisition. |
Business Acquisitions (Tables)
Business Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Schedule of Purchase Price Allocation of Assets Acquired and Liabilities Assumed | Purchase Price Allocation October 4, 2018 Adjustments Final Cash $ 423,088 $ — $ 423,088 Restricted cash 38,813 — 38,813 MSRs 518,127 — 518,127 Advances 96,163 (96 ) 96,067 Loans held for sale 42,324 358 42,682 Receivables 46,838 — 46,838 Premises and equipment 15,203 — 15,203 Real estate owned (REO) 3,289 — 3,289 Other assets 6,293 — 6,293 Assets related to discontinued operations 2,017 — 2,017 Financing liabilities (MSRs pledged, at fair value) (481,020 ) — (481,020 ) Other secured borrowings (27,594 ) — (27,594 ) Senior notes (Senior unsecured notes) (120,624 ) — (120,624 ) Accrued legal fees and settlements (9,960 ) — (9,960 ) Other accrued expenses (36,889 ) — (36,889 ) Loan repurchase and indemnification liability (27,736 ) — (27,736 ) Unfunded pension liability (9,815 ) — (9,815 ) Other liabilities (34,131 ) (643 ) (34,774 ) Liabilities related to discontinued operations (21,954 ) — (21,954 ) Total identifiable net assets 422,432 (381 ) 422,051 Total consideration paid to seller (358,396 ) — (358,396 ) Bargain purchase gain $ 64,036 $ (381 ) $ 63,655 |
Schedule of Post Acquisition Results of Operations | The following table presents the results of operations of PHH that are included in our consolidated statements of operations from the acquisition date of October 4, 2018 through December 31, 2018: Revenues $ 72,487 Expenses 84,877 Other income (expense) (19,132 ) Income tax benefit (6,711 ) Net loss from continuing operations $ (24,811 ) |
Schedule of Pro Forma Results of Operations | 2018 2017 (Unaudited) (Unaudited) Revenues $ 1,305,972 $ 1,785,408 Loss from continuing operations, net of tax attributable to Ocwen common stockholders $ (201,382 ) $ (356,824 ) |
Schedule of Discontinued Operations | The results of discontinued operations for the post-acquisition period (October 4, 2018, through December 31, 2018) are summarized below: Net revenues $ 413 Total expenses (1) (996 ) Income before income taxes 1,409 Income tax expense (benefit) — Income from discontinued operations $ 1,409 (1) Total expenses are shown net of a severance expense reversal that occurred as a result of voluntary post-acquisition employee departures and amortization of facility exit costs. There was no gain or loss directly attributed to the completion of the disposal of these businesses. Assets and Liabilities The carrying amounts of major classes of assets and liabilities related to discontinued operations consisted of the following at December 31, 2018: Assets Mortgage loans held for sale $ 650 Accounts receivable, net 144 Total assets related to discontinued operations $ 794 Liabilities Other liabilities (1) 18,265 Total liabilities related to discontinued operations $ 18,265 (1) The primary component of Other liabilities is an exit cost liability which includes $14.9 million of facility exit costs related to vacating certain facilities. |
Cost Re-Engineering Plan (Table
Cost Re-Engineering Plan (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs | The following table provides a summary of the aggregate activity of the liability for the re-engineering plan costs, including the detail of the $65.0 million total cost incurred in the year ended December 31, 2019: Employee-related Facility-related Other Total Beginning balance $ — $ — $ — $ — Charges (1) 35,704 10,133 19,133 64,970 Payments / Other (29,449 ) (7,202 ) (16,414 ) (53,065 ) Ending balance (2) $ 6,255 $ 2,931 $ 2,719 $ 11,905 (1) The expenses were all incurred within the Corporate Items and Other segment. Employee-related costs and facility-related costs are reported in Compensation and benefits expense and Occupancy and equipment expense, respectively, in the consolidated statement of operations. Other costs are primarily reported in Professional services expense and Other expenses. (2) The liability for re-engineering plan costs at December 31, 2019 is included in Other liabilities (Other accrued expenses). |
Securitizations and Variable _2
Securitizations and Variable Interests Entities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Transfers and Servicing [Abstract] | |
Summary of Cash Flows Received from and Paid to Securitization Trusts Related to Transfers Accounted for as Sales Outstanding | The following table presents a summary of cash flows received from and paid to securitization trusts related to transfers of loans accounted for as sales that were outstanding: Years Ended December 31, 2019 2018 2017 Proceeds received from securitizations $ 1,248,837 $ 1,290,682 $ 3,256,625 Servicing fees collected (1) 50,326 45,046 41,509 Purchases of previously transferred assets, net of claims reimbursed (4,602 ) (4,395 ) (5,948 ) $ 1,294,561 $ 1,331,333 $ 3,292,186 (1) We receive servicing fees based upon the securitized loan balances and certain ancillary fees, all of which are reported in Servicing and subservicing fees in the consolidated statements of operations. |
Schedule of Carrying Amounts of Assets that Relate to Continuing Involvement with Transferred Forward Loans | The following table presents the carrying amounts of our assets that relate to our continuing involvement with forward loans that we have transferred with servicing rights retained as well as an estimate of our maximum exposure to loss including the UPB of the transferred loans: December 31, 2019 2018 Carrying value of assets MSRs, at fair value $ 109,581 $ 132,774 Advances and match funded advances 141,829 138,679 UPB of loans transferred 14,490,984 15,600,971 Maximum exposure to loss $ 14,742,394 $ 15,872,424 |
Schedule of Carrying Value of Assets and Liabilities of Consolidated Mortgage-backed Securitization Trusts | The table below presents the carrying value and classification of the assets and liabilities of two consolidated mortgage-backed securitization trusts included in our consolidated balance sheet as a result of residual securities issued by the trust that we acquired during the third quarter of 2018. December 31, 2019 2018 Loans held for investment, at fair value - Restricted for securitization investors $ 23,342 $ 26,520 Financing liability - Owed to securitization investors, at fair value 22,002 24,815 |
Fair Value (Tables)
Fair Value (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Schedule of Carrying Amounts and Estimated Fair Values of Financial Instruments and Nonfinancial Assets Measured at Fair Value on a Recurring or Non-recurring basis or Disclosed, but not Carried, at Fair Value | The carrying amounts and the estimated fair values of our financial instruments and certain of our nonfinancial assets measured at fair value on a recurring or non-recurring basis or disclosed, but not measured, at fair value are as follows: December 31, 2019 2018 Level Carrying Value Fair Value Carrying Value Fair Value Financial assets: Loans held for sale Loans held for sale, at fair value (a) 2 $ 208,752 $ 208,752 $ 176,525 $ 176,525 Loans held for sale, at lower of cost or fair value (b) 3 66,517 66,517 66,097 66,097 Total Loans held for sale $ 275,269 $ 275,269 $ 242,622 $ 242,622 Loans held for investment Loans held for investment - Reverse mortgages (a) 3 $ 6,269,596 $ 6,269,596 $ 5,472,199 $ 5,472,199 Loans held for investment - Restricted for securitization investors (a) 3 23,342 23,342 26,520 26,520 Total loans held for investment 6,292,938 6,292,938 5,498,719 5,498,719 Advances (including match funded), net (c) 3 1,056,523 1,056,523 1,186,676 1,186,676 Receivables, net (c) 3 201,220 201,220 198,262 198,262 Mortgage-backed securities (a) 3 2,075 2,075 1,502 1,502 U.S. Treasury notes (a) 1 — — 1,064 1,064 Corporate bonds (a) 2 441 441 450 450 December 31, 2019 2018 Level Carrying Value Fair Value Carrying Value Fair Value Financial liabilities: Match funded liabilities (c) 3 $ 679,109 $ 679,507 $ 778,284 $ 776,485 Financing liabilities: HMBS-related borrowings (a) 3 $ 6,063,435 $ 6,063,435 $ 5,380,448 $ 5,380,448 Financing liability - MSRs pledged (Rights to MSRs) (a) 3 950,593 950,593 1,032,856 1,032,856 Financing liability - Owed to securitization investors (a) 3 22,002 22,002 24,815 24,815 Other (c) 3 — — 4,419 4,419 Total Financing liabilities $ 7,036,030 $ 7,036,030 $ 6,442,538 $ 6,442,538 Other secured borrowings: Senior secured term loan (c) (d) 2 $ 322,758 $ 324,643 $ 226,825 $ 227,449 Other (c) 3 703,033 686,146 221,236 204,864 Total Other secured borrowings $ 1,025,791 $ 1,010,789 $ 448,061 $ 432,313 Senior notes: Senior unsecured notes (c) (d) 2 $ 21,046 $ 13,821 $ 119,924 $ 119,258 Senior secured notes (c) (d) 2 290,039 256,201 328,803 306,889 Total Senior notes $ 311,085 $ 270,022 $ 448,727 $ 426,147 Derivative financial instrument assets (liabilities) Interest rate lock commitments (a) 2 $ 4,878 $ 4,878 $ 3,871 $ 3,871 Forward trades - Loans held for sale (a) 1 (92 ) (92 ) (4,983 ) (4,983 ) TBA / Forward mortgage-backed securities (MBS) trades - MSR hedging (a) 1 1,121 1,121 — — Interest rate caps (a) 3 — — 678 678 MSRs (a) 3 $ 1,486,395 $ 1,486,395 $ 1,457,149 $ 1,457,149 (a) Measured at fair value on a recurring basis. (b) Measured at fair value on a non-recurring basis. (c) Disclosed, but not measured, at fair value. (d) The carrying values are net of unamortized debt issuance costs and discount. See Note 14 — Borrowings for additional information . |
Summary of Reconciliation of the Changes in Fair Value of Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following tables present a reconciliation of the changes in fair value of Level 3 assets and liabilities that we measure at fair value on a recurring basis: Loans Held for Investment - Reverse Mortgages HMBS-Related Borrowings Loans Held for Inv. - Restricted for Securitiza- Financing Liability - Owed to Securitiza - Mortgage-Backed Securities Financing Liability - MSRs Pledged Derivatives MSRs Year Ended December 31, 2019 Beginning balance $ 5,472,199 $ (5,380,448 ) $ 26,520 $ (24,815 ) $ 1,502 $ (1,032,856 ) $ 678 $ 1,457,149 Purchases, issuances, sales and settlements Purchases — — — — — (1,276 ) — 162,300 Issuances 1,026,154 (962,113 ) — — — — — — Sales — — — — — (44 ) — (4,344 ) Settlements (558,720 ) 549,600 (3,178 ) 2,813 — 214,364 — (7,309 ) Transfers (to) from: Loans held for sale, at fair value (1,892 ) — — — — — — — Receivables, net (327 ) — — — — — — — Other assets (513 ) — — — — — — — 464,702 (412,513 ) (3,178 ) 2,813 — 213,044 — 150,647 Total realized and unrealized gains (losses) Included in earnings: Change in fair value (1) 332,430 (270,473 ) — — 573 (152,986 ) (678 ) (121,401 ) Calls and other — — — — — 22,205 — — 332,430 (270,473 ) — — 573 (130,781 ) (678 ) (121,401 ) Transfers in and / or out of Level 3 — — — — — — — — Ending balance $ 6,269,331 $ (6,063,434 ) $ 23,342 $ (22,002 ) $ 2,075 $ (950,593 ) $ — $ 1,486,395 Loans Held for Investment - Reverse Mortgages HMBS-Related Borrowings Loans Held for Inv. - Restricted for Securitiza- Financing Liability - Owed to Securitiza - Mortgage-Backed Securities Financing Liability - MSRs Pledged Derivatives MSRs Year Ended December 31, 2018 Beginning balance $ 4,715,831 $ (4,601,556 ) $ — $ — $ 1,592 $ (508,291 ) $ 2,056 $ 671,962 Purchases, issuances, sales and settlements Purchases — — — — — (667 ) 95 13,712 Recognized (assumed) in connection with the acquisition of PHH — — — — — (481,020 ) — 518,127 Issuances (2) 920,476 (948,917 ) — — — (279,586 ) — — Consolidation of mortgage-backed securitization trusts — — 28,373 (26,643 ) — — — — Sales — — — — — — — (6,240 ) Settlements (400,521 ) 391,985 (1,853 ) 1,828 — 211,766 (371 ) (5,880 ) Transfers (to) from: MSRs carried at amortized cost, net of valuation allowance — — — — — — — 418,925 Loans held for sale, at fair value (1,039 ) — — — — — — — Receivables, net (158 ) — — — — — — — Other assets (411 ) — — — — — — — 518,347 (556,932 ) 26,520 (24,815 ) — (549,507 ) (276 ) 938,644 Total realized and unrealized gains (losses) Included in earnings: Change in fair value (2) 238,021 (221,960 ) — — (90 ) 19,269 (1,102 ) (153,457 ) Calls and other — — — — — 5,673 — — 238,021 (221,960 ) — — (90 ) 24,942 (1,102 ) (153,457 ) Transfers in and / or out of Level 3 — — — — — — — — Ending balance $ 5,472,199 $ (5,380,448 ) $ 26,520 $ (24,815 ) $ 1,502 $ (1,032,856 ) $ 678 $ 1,457,149 Loans Held for Investment - Reverse Mortgages HMBS-Related Borrowings Mortgage-Backed Securities Financing Liability - MSRs Pledged Derivatives MSRs Year Ended December 31, 2017 Beginning balance $ 3,565,716 $ (3,433,781 ) $ 8,342 $ (477,707 ) $ 1,836 $ 679,256 Purchases, issuances, sales and settlements Purchases — — — — 655 — Issuances (3) 1,277,615 (1,281,543 ) — (54,601 ) — (2,214 ) Sales — — — — — (540 ) Settlements (444,388 ) 418,503 — 59,190 (445 ) — Transfers (to) from: Loans held for sale, at fair value (3,803 ) — — — — — Receivables, net (3,583 ) — — — — — Other assets (1,929 ) — — — — — 823,912 (863,040 ) — 4,589 210 (2,754 ) Total realized and unrealized gains (losses) (4) Included in earnings Change in fair value (3) 326,203 (304,735 ) (6,750 ) (41,282 ) 10 (4,540 ) Calls and other — — — 6,109 — — 326,203 (304,735 ) (6,750 ) (35,173 ) 10 (4,540 ) Transfers in and / or out of Level 3 — — — — — — Ending balance $ 4,715,831 $ (4,601,556 ) $ 1,592 $ (508,291 ) $ 2,056 $ 671,962 (1) The change in fair value adjustments on Loans held for investment for 2019 include $12.2 million in connection with the fair value election for future draw commitments on HECM reverse mortgage loans purchased or originated after December 31, 2018. (2) On January 18, 2018, Ocwen received a lump-sum payment of $279.6 million in accordance with terms of the agreements with NRZ. See Note 10 — Rights to MSRs . (3) On September 1, 2017, Ocwen transferred MSRs with UPB of $15.9 billion to NRZ and received a lump-sum payment of $54.6 million . See Note 10 — Rights to MSRs . (4) Total gains (losses) attributable to derivative financial instruments still held at December 31, 2019 and 2018 and 2017 were $(0.7) million, $(1.1) million and $0.1 million for 2019 , 2018 and 2017 , respectively. Total losses for 2019 , 2018 and 2017 attributable to MSRs still held at December 31, 2019 , 2018 and 2017 were $98.1 million , $153.5 million and $4.5 million , respectively. |
Summary of Estimated Change in the Value of MSRs Carried at Fair Value | The following table summarizes the estimated change in the value of the MSRs that we carry at fair value as of December 31, 2019 given hypothetical shifts in lifetime prepayments and yield assumptions: Adverse change in fair value 10% 20% Weighted average prepayment speeds $ (116,951 ) $ (224,689 ) Weighted average discount rate (49,463 ) (95,885 ) |
Loans Held for Investment | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Schedule of Significant Assumptions used in Valuation | December 31, Significant valuation assumptions 2019 2018 Life in years Range 2.4 to 7.8 3.0 to 7.6 Weighted average 6.0 5.9 Conditional repayment rate Range 7.8% to 28.3% 6.8% to 38.4% Weighted average 14.6 % 14.7 % Discount rate 2.8 % 3.4 % |
Fair Value Mortgage Servicing Rights | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Schedule of Significant Assumptions used in Valuation | December 31, Significant valuation assumptions 2019 2018 Agency Non-Agency Agency Non-Agency Weighted average prepayment speed 11.7 % 12.2 % 8.5 % 15.4 % Weighted average delinquency rate 3.2 % 27.3 % 6.6 % 27.1 % Advance financing cost 5-year swap 5-yr swap plus 2.00% 5-year swap 5-yr swap plus 2.75% Interest rate for computing float earnings 5-year swap 5-yr swap minus 0.50% 5-year swap 5-yr swap minus 0.50% Weighted average discount rate 9.3 % 11.3 % 9.1 % 12.8 % Weighted average cost to service (in dollars) $ 85 $ 277 $ 90 $ 297 |
HMBS - Related Borrowings | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Schedule of Significant Assumptions used in Valuation | December 31, Significant valuation assumptions 2019 2018 Life in years Range 2.4 to 7.8 3.0 to 7.6 Weighted average 6.0 5.9 Conditional repayment rate Range 7.8% to 28.3% 6.8% to 38.4% Weighted average 14.6 % 14.7 % Discount rate 2.7 % 3.3 % |
Mortgage Servicing Rights Pledged | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Schedule of Significant Assumptions used in Valuation | December 31, Significant valuation assumptions 2019 2018 Weighted average prepayment speed 11.9 % 13.9 % Weighted average delinquency rate 20.3 % 20.3 % Advance financing cost 5-year swap plus 0% to 2.00% 5-year swap plus 0% to 2.75% Interest rate for computing float earnings 5-year swap minus 0% to 0.50% 5-year swap minus 0% to 0.50% Weighted average discount rate 10.7 % 12.0 % Weighted average cost to service (in dollars) $ 223 $ 234 |
Loans Held for Sale (Tables)
Loans Held for Sale (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
Summary of Activity in Balance of Loans Held for Sale, at Fair Value | Loans Held for Sale - Fair Value Years Ended December 31, 2019 2018 2017 Beginning balance $ 176,525 $ 214,262 $ 284,632 Originations and purchases 1,168,885 944,627 2,678,372 Proceeds from sales (1,124,247 ) (1,019,211 ) (2,785,422 ) Principal collections (23,116 ) (20,774 ) (4,867 ) Acquired in connection with the acquisition of PHH — 42,324 — Transfers from (to): Loans held for investment, at fair value 1,892 1,038 3,803 Receivables (2,480 ) (1,132 ) — REO (Other assets) (2,520 ) (1,886 ) — Gain on sale of loans 25,253 34,724 35,429 (Decrease) increase in fair value of loans (589 ) (13,435 ) 151 Other (10,851 ) (4,012 ) 2,164 Ending balance (1) $ 208,752 $ 176,525 $ 214,262 (1) At December 31, 2019 , 2018 and 2017 , the balances include $(7.8) million , $(7.2) million and $5.0 million , respectively, of fair value adjustments. |
Summary of Activity in Balance of Loans Held for Sale, at Lower of Cost or Fair Value | Loans Held for Sale - Lower of Cost or Fair Value Years Ended December 31, 2019 2018 2017 Beginning balance $ 66,097 $ 24,096 $ 29,374 Purchases 320,089 770,563 1,016,791 Proceeds from sales (221,471 ) (569,718 ) (861,569 ) Principal collections (11,304 ) (15,413 ) (10,207 ) Transfers from (to): Receivables, net (104,635 ) (155,586 ) (171,797 ) REO (Other assets) (4,116 ) (2,355 ) (875 ) Gain on sale of loans 4,974 3,659 11,683 Decrease (increase) in valuation allowance 4,926 (4,251 ) 2,746 Other 11,957 15,102 7,950 Ending balance (1) $ 66,517 $ 66,097 $ 24,096 (1) At December 31, 2019 , 2018 and 2017 , the balances include $60.6 million , $51.8 million and $19.6 million , respectively, of loans that we repurchased from Ginnie Mae guaranteed securitizations pursuant to Ginnie Mae servicing guidelines. We may repurchase loans that have been modified, to facilitate loss reduction strategies, or as otherwise obligated as a Ginnie Mae servicer. Repurchased loans may be modified or otherwise remediated through loss mitigation activities, may be sold to a third party, or are reclassified to Receivables. |
Summary of Changes in Valuation Allowance of Loans Held for Sale | Valuation Allowance - Loans Held for Sale at Lower of Cost or Fair Value Years Ended December 31, 2019 2018 2017 Beginning balance $ 11,569 $ 7,318 $ 10,064 Provision 2,537 4,033 3,109 Transfer from Liability for indemnification obligations (Other liabilities) 403 2,021 3,246 Sales of loans (7,866 ) (1,824 ) (9,415 ) Other — 21 314 Ending balance $ 6,643 $ 11,569 $ 7,318 |
Summary of Activity in Gain on Loans Held for Sale, Net | Years Ended December 31, Gains on Loans Held for Sale, Net 2019 2018 2017 Gain on sales of loans, net MSRs retained on transfers of forward mortgage loans $ 7,458 $ 7,412 $ 20,900 Gain on sale of forward mortgage loans 25,310 34,216 35,445 Gain on sale of repurchased Ginnie Mae loans 4,764 3,659 11,683 37,532 45,287 68,028 Change in fair value of IRLCs 756 3,809 (3,089 ) Change in fair value of loans held for sale 3,005 (11,569 ) 1,475 (Loss) gain on economic hedge instruments (2,689 ) 136 (8,529 ) Other (304 ) (327 ) (702 ) $ 38,300 $ 37,336 $ 57,183 |
Advances (Tables)
Advances (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Advances [Abstract] | |
Schedule of Advance Payments by Financial Institution on Foreclosed Properties | December 31, 2019 2018 Principal and interest $ 80,229 $ 43,671 Taxes and insurance 92,315 160,373 Foreclosures, bankruptcy, REO and other 91,914 68,597 264,458 272,641 Allowance for losses (9,925 ) (23,259 ) $ 254,533 $ 249,382 |
Schedule of Activity in Advances | The following table summarizes the activity in net advances: Years Ended December 31, 2019 2018 2017 Beginning balance $ 249,382 $ 211,793 $ 257,882 Asset acquisition 1,457 — — Acquired in connection with the acquisition of PHH — 96,163 — Transfers to match funded advances — (71,623 ) — Sales of advances (11,791 ) (32,081 ) (444 ) Collections of advances, charge-offs and other, net 2,151 51,924 (67,132 ) Net decrease (increase) in allowance for losses (1) 13,334 (6,794 ) 21,487 Ending balance $ 254,533 $ 249,382 $ 211,793 |
Schedule of Change in Allowance for Losses | Allowance for Losses Years Ended December 31, 2019 2018 2017 Beginning balance $ 23,259 $ 16,465 $ 37,952 Provision 3,220 5,732 21,429 Net charge-offs and other (1) (16,554 ) 1,062 (42,916 ) Ending balance $ 9,925 $ 23,259 $ 16,465 (1) Net change for the year ended December 31, 2019 includes $18.0 million allowance related to sold advances presented in Other liabilities (Liability for indemnification obligations). |
Match Funded Assets (Tables)
Match Funded Assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Transfers and Servicing [Abstract] | |
Schedule of Match Funded Advances on Residential Loans | December 31, 2019 2018 Advances: Principal and interest $ 334,617 $ 412,897 Taxes and insurance 330,068 374,853 Foreclosures, bankruptcy, REO and other 137,305 149,544 $ 801,990 $ 937,294 |
Schedule of Activity In Match Funded Advances | The following table summarizes the activity in match funded assets: Years Ended December 31, 2019 2018 2017 Advances Advances Automotive Dealer Financing Notes Advances Automotive Dealer Financing Notes Beginning balance $ 937,294 $ 1,144,600 $ 32,757 $ 1,451,964 $ — Transfers from advances — 71,623 — — — Transfer (to) from Other assets — — (36,896 ) — 25,180 Sales — — — (691 ) — New advances (collections), net (135,304 ) (278,929 ) 1,504 (306,673 ) 10,212 Decrease (increase) in allowance for losses — — 2,635 — (2,635 ) Ending balance $ 801,990 $ 937,294 $ — $ 1,144,600 $ 32,757 |
Mortgage Servicing (Tables)
Mortgage Servicing (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Transfers and Servicing [Abstract] | |
Summary of Activity in Carrying Value of Amortization Method Servicing Assets | Mortgage Servicing Rights – Amortization Method Years Ended December 31, 2018 2017 Beginning balance $ 336,882 $ 363,722 Fair value election - transfer to MSRs carried at fair value (1) (361,670 ) — Additions recognized in connection with asset acquisitions — 1,658 Additions recognized on the sale of mortgage loans — 20,738 Sales — (1,066 ) Servicing transfers and adjustments — 252 (24,788 ) 385,304 Decrease in impairment valuation allowance (1) (2) 24,788 3,366 Amortization (1) — (51,788 ) Ending balance $ — $ 336,882 Estimated fair value at end of year $ — $ 418,745 (1) Effective January 1, 2018, we elected fair value accounting for our MSRs previously accounted for using the amortization method, which included Agency MSRs and government-insured MSRs. This irrevocable election applies to all subsequently acquired or originated servicing assets and liabilities that have characteristics consistent with each of these classes. We recorded a cumulative-effect adjustment of $82.0 million to retained earnings as of January 1, 2018 to reflect the excess of the fair value of the Agency MSRs over their carrying amount. We also recognized the tax effect of this adjustment through an increase in retained earnings of $6.8 million and a deferred tax asset for the same amount. However, we established a full valuation allowance on the resulting deferred tax asset through a reduction in retained earnings. The government-insured MSRs were impaired by $24.8 million at December 31, 2017; therefore, these MSRs were already effectively carried at fair value. (2) Impairment of MSRs is recognized in MSR valuation adjustments, net in the consolidated statements of operations for 2017. Impairment valuation allowance balance of $24.8 million was reclassified to reduce the carrying value of the related MSRs on January 1, 2018 in connection with our fair value election. |
Summary of Activity Related to Fair Value Servicing Assets | Mortgage Servicing Rights – Fair Value Measurement Method Years Ended December 31, 2019 2018 2017 Agency Non-Agency Total Agency Non-Agency Total Agency Non-Agency Total Beginning balance $ 865,587 $ 591,562 $ 1,457,149 $ 11,960 $ 660,002 $ 671,962 $ 13,357 $ 665,899 $ 679,256 Fair value election - Transfer from MSRs carried at amortized cost — — — 336,882 — 336,882 — — — Cumulative effect of fair value election — — — 82,043 — 82,043 — — — Sales (3,578 ) (766 ) (4,344 ) (4,748 ) (1,492 ) (6,240 ) — (540 ) (540 ) Additions: Recognized on the sale of residential mortgage loans 8,795 — 8,795 8,279 — 8,279 162 — 162 Recognized in connection with the acquisition of PHH — — — 494,348 23,779 518,127 — — — Purchase of MSRs 153,505 — 153,505 5,433 — 5,433 — — — Servicing transfers and adjustments — (7,309 ) (7,309 ) (1,047 ) (4,833 ) (5,880 ) — (2,376 ) (2,376 ) Changes in fair value (1): Changes in valuation inputs or other assumptions (171,050 ) 265,003 93,953 11,558 (5,705 ) 5,853 243 86,721 86,964 Realization of expected future cash flows and other changes (139,253 ) (76,101 ) (215,354 ) (79,121 ) (80,189 ) (159,310 ) (1,802 ) (89,702 ) (91,504 ) Ending balance $ 714,006 $ 772,389 $ 1,486,395 $ 865,587 $ 591,562 $ 1,457,149 $ 11,960 $ 660,002 $ 671,962 (1) Changes in fair value are recognized in MSR valuation adjustments, net in the consolidated statements of operations. |
Schedule of Composition of Primary Servicing and Subservicing Portfolios by Type of Property Serviced as Measured by UPB | The following table presents the composition of our primary servicing and subservicing portfolios as measured by UPB. The UPB amounts in the table below are not included on our consolidated balance sheets. UPB at December 31, 2019 2018 2017 Servicing (1) $ 76,657,932 $ 72,378,693 $ 75,469,327 Subservicing (1) 17,120,905 53,104,560 2,063,669 NRZ (1) (2) 118,587,594 130,517,237 101,819,557 $ 212,366,431 $ 256,000,490 $ 179,352,553 (1) UPB at December 31, 2018 includes $6.3 billion , $51.3 billion and $42.3 billion UPB of loans serviced, subserviced or subserviced on behalf of NRZ, respectively, added to the portfolio in connection with the PHH acquisition. (2) UPB of loans for which the Rights to MSRs have been sold to NRZ, including $57.7 billion for which third-party consents have been received and the MSRs have been transferred to NRZ (the MSRs remain on balance sheet as the transactions do not achieve sale accounting treatment). |
Summary of Geographic Distributions of UPB and Count of Residential Loans and Real Estate Serviced | The geographic concentration of the UPB of residential loans and real estate we serviced at December 31, 2019 was as follows: Amount Count California $ 47,350,699 189,959 New York 19,557,621 90,805 Florida 16,366,372 121,875 New Jersey 10,921,867 57,182 Texas 10,073,637 100,868 Other 108,096,235 859,254 $ 212,366,431 1,419,943 |
Schedule of Components of Servicing and Subservicing Fees | Years Ended December 31, Servicing Revenue 2019 2018 2017 Loan servicing and subservicing fees Servicing $ 227,490 $ 227,639 $ 259,640 Subservicing 15,459 8,904 7,775 NRZ 577,015 539,039 549,411 819,964 775,582 816,826 Late charges 57,194 61,453 61,763 Home Affordable Modification Program (HAMP) fees (1) 5,538 14,312 43,310 Custodial accounts (float earnings) 47,562 40,115 25,237 Loan collection fees 15,539 18,392 22,770 Other 29,710 27,229 21,691 $ 975,507 $ 937,083 $ 991,597 (1) The HAMP expired on December 31, 2016. Borrowers who had requested assistance or to whom an offer of assistance had been extended as of that date had until September 30, 2017 to finalize their modification. We continue to earn HAMP success fees for HAMP modifications that remain less than 90 days delinquent at the first-, second- and third-year anniversary of the start of the trial modification. |
Rights to MSRs (Tables)
Rights to MSRs (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Transfers and Servicing [Abstract] | |
Schedule of Interest Expense Related to Financial Liability | The following tables present selected assets and liabilities recorded on our consolidated balance sheets as well as the impacts to our consolidated statements of operations in connection with our NRZ agreements. Years Ended December 31, 2019 2018 2017 Balance Sheets MSRs, at fair value $ 915,148 $ 894,002 $ 499,042 Due from NRZ (Receivables) Sales and transfers of MSRs (1) 24,167 23,757 — Advance funding, subservicing fees and reimbursable expenses 9,197 30,845 14,924 $ 33,364 $ 54,602 $ 14,924 Due to NRZ (Other liabilities) $ 63,596 $ 53,001 $ 98,493 Financing liability - MSRs pledged, at fair value Original Rights to MSRs Agreements $ 603,046 $ 436,511 $ 499,042 2017 Agreements and New RMSR Agreements (2) 35,445 138,854 9,249 PMC MSR Agreements 312,102 457,491 — $ 950,593 $ 1,032,856 $ 508,291 Statements of Operations Servicing fees collected on behalf of NRZ $ 577,015 $ 539,039 $ 549,411 Less: Subservicing fee retained 139,343 142,334 295,192 Net servicing fees remitted to NRZ 437,672 396,705 254,219 Less: Reduction (increase) in financing liability Changes in fair value: Original Rights to MSRs Agreements (229,198 ) 171 (83,300 ) 2017 Agreements and New RMSR Agreements (5,866 ) 14,369 42,018 PMC MSR Agreements 82,078 4,729 — (152,986 ) 19,269 (41,282 ) Years Ended December 31, 2019 2018 2017 Runoff and settlement: Original Rights to MSRs Agreements 48,729 58,837 57,264 2017 Agreements and New RMSR Agreements 101,003 134,509 1,926 PMC MSR Agreements 64,631 18,420 — 214,363 211,766 59,190 Other 4,206 (6,000 ) — Pledged MSR liability expense $ 372,089 $ 171,670 $ 236,311 |
Schedule of Activity Related to Rights to Mortgage Servicing Rights | Year Ended December 31, 2019 Financing Liability - MSRs Pledged Original Rights to MSRs Agreements 2017 Agreements and New RMSR Agreements PMC MSR Agreements Total Beginning balance $ 436,511 $ 138,854 $ 457,491 $ 1,032,856 Additions — — 1,276 1,276 Sales — — 44 44 Changes in fair value: Original Rights to MSRs Agreements 229,198 — — 229,198 2017 Agreements and New RMSR Agreements — 5,866 — 5,866 PMC MSR Agreements — — (82,078 ) (82,078 ) Runoff and settlement: Original Rights to MSRs Agreements (48,730 ) — — (48,730 ) 2017 Agreements and New RMSR Agreements — (101,003 ) — (101,003 ) PMC MSR Agreements — — (64,631 ) (64,631 ) Calls (1): Original Rights to MSRs Agreements (13,933 ) — — (13,933 ) 2017 Agreements and New RMSR Agreements — (8,272 ) — (8,272 ) PMC MSR Agreements — — — — Ending balance $ 603,046 $ 35,445 $ 312,102 $ 950,593 Year Ended December 31, 2018 Financing Liability - MSRs Pledged Original Rights to MSRs Agreements 2017 Agreements and New RMSR Agreements PMC MSR Agreements Total Beginning balance $ 499,042 $ 9,249 $ — $ 508,291 Additions — — 667 667 Assumed in connection with the acquisition of PHH — — 481,020 481,020 Receipt of lump-sum cash payments — 279,586 — 279,586 Changes in fair value: Original Rights to MSRs Agreements (171 ) — — (171 ) 2017 Agreements and New RMSR Agreements — (14,369 ) — (14,369 ) PMC MSR Agreements — — (4,729 ) (4,729 ) Runoff and settlement: Original Rights to MSRs Agreements (58,837 ) — — (58,837 ) 2017 Agreements and New RMSR Agreements — (134,509 ) — (134,509 ) PMC MSR Agreements — — (18,420 ) (18,420 ) Calls (1): — — — Original Rights to MSRs Agreements (3,523 ) — — (3,523 ) 2017 Agreements and New RMSR Agreements — (1,103 ) — (1,103 ) PMC MSR Agreements — — (1,047 ) (1,047 ) Ending balance $ 436,511 $ 138,854 $ 457,491 $ 1,032,856 (1) Represents the carrying value of MSRs in connection with call rights exercised by NRZ, for MSRs transferred to NRZ under the 2017 Agreements and New RMSR Agreements, or by Ocwen at NRZ’s direction, for MSRs underlying the Original Rights to MSRs Agreements. Ocwen derecognizes the MSRs and the related financing liability upon collapse of the securitization. |
Receivables (Tables)
Receivables (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Schedule of Receivables | December 31, 2019 2018 Servicing-related receivables: Government-insured loan claims $ 122,557 $ 105,258 Due from custodial accounts 27,175 9,060 Due from NRZ: Sales and transfers of MSRs 24,167 23,757 Advance funding, subservicing fees and reimbursable expenses 9,197 30,845 Reimbursable expenses 13,052 11,508 Other 4,970 7,754 201,118 188,182 Income taxes receivable 37,888 45,987 Other receivables 20,086 17,672 259,092 251,841 Allowance for losses (57,872 ) (53,579 ) $ 201,220 $ 198,262 |
Schedule of Changes in Allowance For Losses | Valuation Allowance - Loans Held for Sale at Lower of Cost or Fair Value Years Ended December 31, 2019 2018 2017 Beginning balance $ 11,569 $ 7,318 $ 10,064 Provision 2,537 4,033 3,109 Transfer from Liability for indemnification obligations (Other liabilities) 403 2,021 3,246 Sales of loans (7,866 ) (1,824 ) (9,415 ) Other — 21 314 Ending balance $ 6,643 $ 11,569 $ 7,318 |
Government Insured Loans Claims | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Schedule of Changes in Allowance For Losses | Allowance for Losses - Government-Insured Loan Claims Years Ended December 31, 2019 2018 2017 Beginning balance $ 52,497 $ 53,340 $ 53,258 Provision 29,034 37,352 40,424 Charge-offs and other, net (24,663 ) (38,195 ) (40,342 ) Ending balance $ 56,868 $ 52,497 $ 53,340 |
Premises and Equipment (Tables)
Premises and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Premises and Equipment | December 31, 2019 2018 Computer hardware $ 32,747 $ 34,240 Operating lease right-of-use assets 31,329 — Computer software 24,377 46,029 Leasehold improvements 22,019 27,798 Buildings 8,550 9,689 Office equipment 6,929 7,370 Furniture and fixtures 3,506 4,674 Other 44 818 129,501 130,618 Less accumulated depreciation and amortization (91,227 ) (97,201 ) $ 38,274 $ 33,417 |
Other Assets (Tables)
Other Assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Other Assets [Abstract] | |
Schedule of Other Assets | December 31, 2019 2018 Contingent loan repurchase asset $ 492,900 $ 302,581 Other prepaid expenses 21,996 27,647 Prepaid representation, warranty and indemnification claims - Agency MSR sale 15,173 15,173 Prepaid lender fees, net (1) 8,647 6,589 REO 8,556 7,368 Derivatives, at fair value 6,007 4,552 Deferred tax assets, net 2,169 5,289 Security deposits 2,163 2,278 Mortgage-backed securities, at fair value 2,075 1,502 Interest-earning time deposits 390 1,338 Other 3,164 5,250 $ 563,240 $ 379,567 (1) We amortize these costs to the earlier of the scheduled amortization date, contractual maturity date or prepayment date of the debt. |
Borrowings (Tables)
Borrowings (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Instrument, Redemption [Line Items] | |
Schedule of Match Funded Liabilities | Match Funded Liabilities December 31, 2019 December 31, 2018 Borrowing Type Maturity (1) Amorti-zation Date (1) Available Borrowing Capacity (2) Weighted Average Interest Rate (3) Balance Weighted Average Interest Rate (3) Balance Advance Financing Facilities Advance Receivables Backed Notes - Series 2015-VF5 (4) Dec. 2049 Dec. 2020 $ 9,445 3.36 $ 190,555 4.06 $ 216,559 Advance Receivables Backed Notes - Series 2016-T2 (5) Aug. 2049 Aug. 2019 — — — 2.99 235,000 Advance Receivables Backed Notes, Series 2018-T1 (5) Aug. 2049 Aug. 2019 — — — 3.50 150,000 Advance Receivables Backed Notes, Series 2018-T2 (5) Aug. 2050 Aug. 2020 — — — 3.81 150,000 Advance Receivables Backed Notes, Series 2019-T1 (5) Aug. 2050 Aug. 2020 — 2.62 185,000 — — Advance Receivables Backed Notes, Series 2019-T2 (5) Aug. 2051 Aug. 2021 — 2.53 285,000 — — Total Ocwen Master Advance Receivables Trust (OMART) 9,445 2.79 660,555 3.56 751,559 Ocwen Freddie Advance Funding (OFAF ) - Advance Receivables Backed Notes, Series 2015-VF1 (6) Jun. 2050 Jun. 2020 41,446 3.53 18,554 5.03 26,725 $ 50,891 2.81 % $ 679,109 3.61 % $ 778,284 (1) The amortization date of our facilities is the date on which the revolving period ends under each advance facility note and repayment of the outstanding balance must begin if the note is not renewed or extended. The maturity date is the date on which all outstanding balances must be repaid. In all of our advance facilities, there are multiple notes outstanding. For each note, after the amortization date, all collections that represent the repayment of advances pledged to the facility must be applied ratably to each outstanding amortizing note to reduce the balance and as such the collection of advances allocated to the amortizing note may not be used to fund new advances. (2) Borrowing capacity under the OMART and OFAF facilities is available to us provided that we have sufficient eligible collateral to pledge. At December 31, 2019 , none of the available borrowing capacity of our advance financing notes could be used based on the amount of eligible collateral. (3) 1ML was 1.76% and 2.50% at December 31, 2019 and 2018 , respectively. (4) On December 12, 2019, we renewed this facility through December 11, 2020 and borrowing capacity was reduced from $225.0 million to $200.0 million , with interest computed based on the lender’s cost of funds plus a margin. At December 31, 2019 , the weighted average interest margin was 136 bps. (5) On August 14, 2019, we issued two fixed-rate term notes of $185.0 million (Series 2019 T-1) and $285.0 million (Series 2019-T2) with amortization dates of August 17, 2020 and August 16, 2021, respectively, for a total combined borrowing capacity of $470.0 million . The weighted average rate of the notes at December 31, 2019 is 2.57% with rates on the individual classes of notes ranging from 2.42% to 4.44% . The Series 2016-T2, 2018-T1 and 2018-T2 fixed-rate term notes were all redeemed on August 15, 2019. (6) On June 6, 2019, we renewed this facility through June 5, 2020 and borrowing capacity was reduced from $65.0 million to $60.0 million with interest computed based on the lender’s cost of funds plus a margin. At December 31, 2019 , the weighted average interest margin was 157 bps. |
Schedule of Financing Liabilities | Financing Liabilities Outstanding Balance at December 31, Borrowing Type Collateral Interest Rate Maturity 2019 2018 HMBS-Related Borrowings, at fair value (1) Loans held for investment 1ML + 260 bps (1) $ 6,063,435 $ 5,380,448 Other Financing Liabilities MSRs pledged (Rights to MSRs), at fair value: Original Rights to MSRs Agreements MSRs (2) (2) 603,046 436,511 2017 Agreements and New RMSR Agreements MSRs (3) (3) 35,445 138,854 PMC MSR Agreements MSRs (4) (4) 312,102 457,491 950,593 1,032,856 Financing liability - Owed to securitization investors, at fair value: IndyMac Mortgage Loan Trust (INDX 2004-AR11) (5) Loans held for investment (5) (5) 9,794 11,012 Residential Asset Securitization Trust 2003-A11 (RAST 2003-A11) (5) Loans held for investment (5) (5) 12,208 13,803 22,002 24,815 Advances pledged (6) Advances on loans (6) — 4,419 Total Other financing liabilities 972,595 1,062,090 $ 7,036,030 $ 6,442,538 (1) Represents amounts due to the holders of beneficial interests in Ginnie Mae guaranteed HMBS which did not qualify for sale accounting treatment of HECM loans. Under this accounting treatment, the HECM loans securitized with Ginnie Mae remain on our consolidated balance sheet and the proceeds from the sale are recognized as a secured liability. The beneficial interests have no maturity dates, and the borrowings mature as the related loans are repaid. We elected to record the HMBS-related borrowings at fair value consistent with the related HECM loans. Changes in fair value are reported within Reverse mortgage revenue, net. (2) This pledged MSR liability is recognized due to the accounting treatment of MSR sale transactions with NRZ which did not qualify as sales for accounting purposes. Under this accounting treatment, the MSRs transferred to NRZ remain on the consolidated balance sheet and the proceeds from the sale are recognized as a secured liability. This financing liability has no contractual maturity or repayment schedule. We elected to record the liability at fair value consistent with the related MSRs. The balance of the liability is adjusted each reporting period to its fair value based on the present value of the estimated future cash flows underlying the related MSRs. Changes in fair value are reported within Pledged MSR liability expense, and are offset by corresponding changes in fair value of the MSR pledged to NRZ within MSR valuation adjustments, net. (3) This financing liability arose in connection with lump sum payments of $54.6 million received upon transfer of legal title of the MSRs related to the Rights to MSRs transactions to NRZ in September 2017. In connection with the execution of the New RMSR Agreements in January 2018, we received a lump sum payment of $279.6 million as compensation for foregoing certain payments under the Original Rights to MSRs Agreements. The balance of the liability is adjusted each reporting period to its fair value based on the present value of the estimated future cash flows. The expected maturity of the liability is April 30, 2020, the date through which we were scheduled to be the servicer on loans underlying the Rights to MSRs per the Original Rights to MSRs Agreements. (4) Represents a liability for sales of MSRs to NRZ which did not qualify for sale accounting treatment and are accounted for as a secured borrowing which we assumed in connection with the acquisition of PHH. Under this accounting treatment, the MSRs transferred to NRZ remain on the consolidated balance sheet and the proceeds from the sale are recognized as a secured liability. We elected to record the liability at fair value consistent with the related MSRs. (5) Consists of securitization debt certificates due to third parties that represent beneficial interests in trusts that we include in our consolidated financial statements, as more fully described in Note 4 — Securitizations and Variable Interest Entities . The holders of these certificates have no recourse against the assets of Ocwen. The certificates in the INDX 2004-AR11 Trust pay interest based on variable rates which are generally based on weighted average net mortgage rates and which range between 3.39% and 3.85% at December 31, 2019 . The certificates in the RAST 2003-A11 Trust pay interest based on fixed rates ranging between 4.25% and 5.75% and a variable rate based on 1ML plus 0.45% . The maturity of the certificates occurs upon maturity of the loans held by the trust. The remaining loans in the INDX 2004-AR11 Trust and RAST 2003-A11 Trust have maturity dates extending through November 2034 and October 2033, respectively. (6) Certain sales of advances did not qualify for sales accounting treatment and were accounted for as a financing. This financing liability has no contractual maturity. The effective interest rate is based on 1ML plus a margin of 450 bps. |
Schedule of Other Secured Borrowings | Other Secured Borrowings Outstanding Balance at December 31, Borrowing Type Collateral Interest Rate Termination / Maturity Available Borrowing Capacity (1) 2019 2018 SSTL (2) (2) 1-Month Euro-dollar rate + 500 bps with a Eurodollar floor of 100 bps (2) Dec. 2020 $ — $ 326,066 $ 231,500 Mortgage loan warehouse facilities Master repurchase agreement (3) Loans held for sale (LHFS) 1ML + 195 - 300 bps Sep. 2020 8,427 91,573 74,693 Participation agreements (4) LHFS N/A Jul. 2019 — — 42,331 Mortgage warehouse agreement (5) LHFS (reverse mortgages) 1ML + 250 bps; 1ML floor of 350 bps Aug. 2020 — 72,443 8,009 Master repurchase agreement (6) LHFS (forward and reverse mortgages) 1ML + 225 bps forward; 1ML + 275 bps reverse Dec. 2020 60,773 139,227 30,680 Master repurchase agreement (7) LHFS (reverse mortgages) Prime - 0.25% (3.75% floor) Jan. 2020 — 898 — Master repurchase agreement (8) N/A 1ML + 170 bps N/A — — — Participation agreement (9) LHFS (9) Feb. 2020 — 17,304 — Mortgage warehouse agreement (10) LHFS (reverse mortgages) 1ML + 350 bps; 1ML floor of 525 bps Dec. 2020 39,220 10,780 — 108,420 332,225 155,713 Other Secured Borrowings Outstanding Balance at December 31, Borrowing Type Collateral Interest Rate Termination / Maturity Available Borrowing Capacity (1) 2019 2018 Agency MSR financing facility (11) MSRs 1ML + 300 bps Jun. 2020 152,294 147,706 — Ginnie Mae MSR financing facility (12) MSRs 1ML + 395 bps Nov. 2021 27,680 72,320 — Ocwen Excess Spread-Collateralized Notes, Series 2019-PLS1 (13) MSRs 5.07% Nov. 2024 — 94,395 — Ocwen Asset Servicing Income Series Notes, Series 2014-1 (14) MSRs (14) Feb. 2028 — 57,594 65,523 179,974 372,015 65,523 $ 288,394 1,030,306 452,736 Unamortized debt issuance costs - SSTL and PLS Notes (3,381 ) (3,098 ) Discount - SSTL (1,134 ) (1,577 ) $ 1,025,791 $ 448,061 Weighted average interest rate 4.74 % 4.70 % (1) Available borrowing capacity for our mortgage loan warehouse facilities does not consider the amount of the facility that the lender has extended on an uncommitted basis. Of the borrowing capacity extended on a committed basis, none of the available borrowing capacity could be used at December 31, 2019 based on the amount of eligible collateral that could be pledged. (2) On March 18, 2019, we entered into a Joinder and Amendment Agreement which amends the existing Amended and Restated SSTL Facility Agreement dated December 5, 2016 to provide an additional term loan of $120.0 million subject to the same maturity, interest rate and other material terms of existing borrowings under the SSTL. Effective with this amendment, the quarterly principal payment increased from $4.2 million to $6.4 million beginning March 31, 2019. See information regarding collateral in the table below. Borrowings bear interest, at the election of Ocwen, at a rate per annum equal to either (a) the base rate (the greatest of (i) the prime rate in effect on such day , (ii) the federal funds rate in effect on such day plus 0.50% and (iii) 1ML , plus a margin of 4.00% and subject to a base rate floor of 2.00% or (b) 1ML , plus a margin of 5.00% and subject to a 1ML floor of 1.00% . To date we have elected option (b) to determine the interest rate. On January 27, 2020, we prepaid $126.1 million of the outstanding balance at December 31, 2019 and executed an additional amendment to the SSTL which reduced the maximum borrowing capacity to $200.0 million , extended the maturity date to May 15, 2022, reduced the quarterly principal payment to $5.0 million and modified the interest rate. See Note 28 — Subsequent Events for additional information. (3) The maximum borrowing under this agreement is $175.0 million , of which $100.0 million is available on a committed basis and the remainder is available at the discretion of the lender. On September 27, 2019, we renewed this facility through September 25, 2020. (4) Effective with the mergers of Homeward Residential, Inc. (Homeward) into PMC in February 2019 and Ocwen Loan Servicing, LLC (OLS) into PMC in June 2019, the participation agreements with total uncommitted borrowing capacity of $250.0 million were terminated. (5) Under this participation agreement, the lender provides financing for $100.0 million on an uncommitted basis. The participation agreement allows the lender to acquire a 100% beneficial interest in the underlying mortgage loans. The transaction does not qualify for sale accounting treatment and is accounted for as a secured borrowing. On August 13, 2019, we renewed this facility through August 14, 2020. (6) On December 6, 2019, we renewed this facility through December 5, 2020. The maximum borrowing under this agreement is $250.0 million , of which $200.0 million is available on a committed basis and the remainder is available on an uncommitted basis. The agreement allows the lender to acquire a 100% beneficial interest in the underlying mortgage loans. The transaction does not qualify for sale accounting treatment and is accounted for as a secured borrowing. (7) Under this agreement, t he lender provides financing for up to $50.0 million on an uncommitted basis. This facility expired on January 22, 2020 and was not renewed. (8) This agreement was originally entered into by PHH and subsequently assumed by Ocwen in connection with its acquisition of PHH. T he lender provides financing for up to $200.0 million at the discretion of the lender. The agreement has no stated maturity date. (9) We entered into a master participation agreement on February 4, 2019 under which the lender will provide $300.0 million of borrowing capacity to PMC on an uncommitted basis. The participation agreement allows the lender to acquire a 100% beneficial interest in the underlying mortgage loans. The transaction does not qualify for sale accounting treatment and is accounted for as a secured borrowing. The lender earns the stated interest rate of the underlying mortgage loans less 25 bps while the loans are financed under the participation agreement. On January 27, 2020, we renewed this facility through April 3, 2020. (10) On December 26, 2019, PMC entered into a warehouse facility. Under this agreement, t he lender provides financing for up to $50.0 million on a committed basis. The lender earns the stated interest rate of 1ML plus a margin of 350 bps . (11) On July 1, 2019, PMC entered into a financing facility that is secured by certain Fannie Mae and Freddie Mac MSRs. In connection with this facility, PMC entered into repurchase agreements pursuant to which PMC sold trust certificates representing certain indirect economic interests in the MSRs and agreed to repurchase such trust certificates at a future date at the repurchase price set forth in the repurchase agreements. PMC’s obligations under this facility are secured by a lien on the related MSRs. Ocwen guarantees the obligations of PMC under this facility. The maximum amount which we may borrow pursuant to the repurchase agreements is $300.0 million on a committed basis. The lender earns the stated interest rate of 1ML plus a margin of 300 bps . See Note 4 — Securitizations and Variable Interest Entities for additional information. (12) On November 26, 2019, PMC entered into a financing facility that is secured by certain Ginnie Mae MSRs. In connection with the facility, PMC entered into a repurchase agreement pursuant to which PMC has sold a participation certificate representing certain economic interests in the Ginnie Mae MSRs and has agreed to repurchase such participation certificate at a future date at the repurchase price set forth in the repurchase agreement. PMC’s obligations under the facility are secured by a lien on the related Ginnie Mae MSRs. Ocwen guarantees the obligations of PMC under the facility. The maximum amount available to be borrowed pursuant to the facility is $27.7 million on a committed basis. The lender earns the stated interest rate of 1ML plus a margin of 395 bps . (13) On November 26, 2019, PMC issued the PLS Notes secured by certain of PMC’s MSRs (PLS MSRs) pursuant to a credit agreement. PLS Issuer’s obligations under the facility are secured by a lien on the related PLS MSRs. Ocwen guarantees the obligations of PLS Issuer under the facility. The Class A PLS Notes issued pursuant to the credit agreement have an initial principal amount of $100.0 million and amortize in accordance with a pre-determined schedule subject to modification under certain events. The notes have a stated coupon rate of 5.07% . See Note 4 — Securitizations and Variable Interest Entities for additional information. (14) OASIS noteholders are entitled to receive a monthly payment equal to the sum of: (a) 21 basis points of the UPB of the reference pool of Freddie Mac mortgages; (b) any termination payment amounts; (c) any excess refinance amounts; and (d) the note redemption amounts, each as defined in the indenture supplement for the notes. Monthly amortization of the liability is estimated using the proportion of monthly projected service fees on the underlying MSRs as a percentage of lifetime projected fees, adjusted for the term of the notes. |
Schedule of Senior Notes | Senior Notes Outstanding Balance at December 31, Interest Rate Maturity 2019 2018 Senior unsecured notes: PHH (1) (2) 7.375% Sep. 2019 $ — $ 97,521 PHH (2) 6.375% Aug. 2021 21,543 21,543 21,543 119,064 Senior secured notes (3) 8.375% Nov. 2022 291,509 330,878 313,052 449,942 Unamortized debt issuance costs (1,470 ) (2,075 ) Fair value adjustments (2) (497 ) 860 $ 311,085 $ 448,727 (1) On September 2, 2019, we redeemed all of the Senior unsecured notes due in September 2019, at a redemption price of 100.0% of the outstanding principal balance plus accrued and unpaid interest. (2) These notes were originally issued by PHH and subsequently assumed by Ocwen in connection with its acquisition of PHH. We recorded the notes at their respective fair values on the date of acquisition, and we are amortizing the resulting fair value purchase accounting adjustments over the remaining term of the notes. We have the option to redeem the notes due in August 2021, in whole or in part, on or after January 1, 2019 at a redemption price equal to 100.0% of the principal amount plus any accrued and unpaid interest. (3) During July and August 2019, we repurchased a total of $39.4 million of our 8.375% Senior secured notes in the open market for a price of $34.3 million . We recognized a gain of $5.1 million on these repurchases which is reported in Gain on repurchases of senior secured notes in the consolidated statement of operations. |
Schedule of Assets Held as Collateral Related to Secured Borrowings | Our assets held as collateral related to secured borrowings, committed under sale or other contractual obligations and which may be subject to secured liens under the SSTL and Senior Secured Notes are as follows at December 31, 2019 : Collateral for Secured Borrowings Total Assets Match Funded Liabilities Financing Liabilities Mortgage Loan Warehouse/MSR Facilities Sales and Other Commitments (1) Other (2) Cash $ 428,339 $ — $ — $ — $ — $ 428,339 Restricted cash 64,001 17,332 — 5,944 40,725 — MSRs (3) 1,486,395 — 915,148 575,471 — 525 Advances, net 254,533 — — — 28,737 225,796 Match funded assets 801,990 801,990 — — — — Loans held for sale 275,269 — — 236,517 — 38,752 Loans held for investment 6,292,938 — 6,144,275 115,130 — 33,533 Receivables, net 201,220 — — 24,795 — 176,425 Premises and equipment, net 38,274 — — — — 38,274 Other assets 563,240 — — 5,285 510,236 47,719 Total Assets $ 10,406,199 $ 819,322 $ 7,059,423 $ 963,142 $ 579,698 $ 989,363 (1) Sales and Other Commitments include MSRs and related advances committed under sale agreements, Restricted cash and deposits held as collateral to support certain contractual obligations, and Contingent loan repurchase assets related to the Ginnie Mae EBO program for which a corresponding liability is recognized in Other liabilities. (2) The borrowings under the SSTL are secured by a first priority security interest in substantially all of the assets of Ocwen, PHH, PMC and the other guarantors thereunder, excluding among other things, 35% of the voting capital stock of foreign subsidiaries, securitization assets and equity interests of securitization entities, assets securing permitted funding indebtedness and non-recourse indebtedness, REO assets, as well as other customary carve-outs (collectively, the Collateral). The Collateral is subject to certain permitted liens set forth under the SSTL and related security agreement. The Senior Secured Notes are guaranteed by Ocwen and the other guarantors that guarantee the SSTL, and the borrowings under the Senior Secured Notes are secured by a second priority security interest in the Collateral. Assets securing borrowings under the SSTL and Senior Secured Notes may include amounts presented in Other as well as certain assets presented in Collateral for Secured Borrowings and Sales and Other Commitments, subject to permitted liens as defined in the applicable debt documents. The amounts presented here may differ in their calculation and are not intended to represent amounts that may be used in connection with covenants under the applicable debt documents. (3) MSRs pledged as collateral for secured borrowings includes MSRs pledged to NRZ in connection with the Rights to MSRs transactions which are accounted for as secured financings and MSRs securing the financing facilities. Certain MSR cohorts with a negative fair value of $4.7 million that would be presented as Other are excluded from the eligible collateral of the facilities and are comprised of $27.9 million of negative fair value related to RMBS and $23.2 million of positive fair value related to private EBO and PLS MSRs. |
Schedule of Aggregate Long-term Borrowings | Certain of our borrowings mature within one year of the date of issuance of these financial statements. Based on management’s evaluation, we expect to renew, replace or extend all such borrowings to the extent necessary to finance our business on or prior to their respective maturities consistent with our historical experience. Expected Maturity Date (1) (2) (3) 2020 2021 2022 2023 2024 Thereafter Total Fair Match funded liabilities $ 394,109 $ 285,000 $ — $ — $ — $ — $ 679,109 $ 679,507 Other secured borrowings 832,078 98,971 41,663 — — 57,594 1,030,306 1,010,789 Senior notes — 21,543 291,509 — — — 313,052 270,022 $ 1,226,187 $ 405,514 $ 333,172 $ — $ — $ 57,594 $ 2,022,467 $ 1,960,318 (1) Amounts are exclusive of any related discount, unamortized debt issuance costs or fair value adjustment. (2) For match funded liabilities, the Expected Maturity Date is the date on which the revolving period ends for each advance financing facility note and repayment of the outstanding balance must begin if the note is not renewed or extended. (3) Excludes financing liabilities recognized in connection with asset sales transactions accounted for as financings, including $1.0 billion recorded in connection with sales of Rights to MSRs and MSRs and $6.1 billion recorded in connection with the securitizations of HMBS. These financing liabilities have no contractual maturity and are amortized over the life of the underlying assets. |
8.375% Senior Secured Notes Due In 2022 | |
Debt Instrument, Redemption [Line Items] | |
Schedule of Redemption Prices | The redemption prices during the twelve-month periods beginning on November 15 th of each year are as follows: Year Redemption Price 2018 106.281 % 2019 104.188 2020 102.094 2021 and thereafter 100.000 |
Other Liabilities (Tables)
Other Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Other Liabilities | December 31, 2019 2018 Contingent loan repurchase liability $ 492,900 $ 302,581 Servicing-related obligations 88,167 41,922 Other accrued expenses 67,241 94,835 Due to NRZ - Advance collections and servicing fees 63,596 53,001 Liability for indemnification obligations 52,785 51,574 Lease liability 44,488 — Checks held for escheat 31,959 20,686 Accrued legal fees and settlements 30,663 62,763 Liability for uncertain tax positions 17,197 13,739 Liability for unfunded pension obligation 13,383 12,683 Accrued interest payable 5,964 7,209 Liability for mortgage insurance contingency 6,820 6,820 Liability for unfunded India gratuity plan 5,331 4,904 Deferred revenue 488 4,441 Derivatives, at fair value 100 4,986 Other 21,091 21,492 $ 942,173 $ 703,636 |
Schedule of Accrued Legal Fees and Settlements | Accrued Legal Fees and Settlements Years Ended December 31, 2019 2018 2017 Beginning balance $ 62,763 $ 51,057 $ 93,797 Accrual for probable losses (1) 3,011 19,774 131,113 Payments (2) (30,356 ) (12,983 ) (174,941 ) Assumed in connection with the acquisition of PHH — 9,960 — Issuance of common stock in settlement of litigation (3) — (5,719 ) (1,937 ) Net increase (decrease) in accrued legal fees (4,884 ) (1,917 ) 482 Other 129 2,591 2,543 Ending balance $ 30,663 $ 62,763 $ 51,057 (1) Consists of amounts accrued for probable losses in connection with legal and regulatory settlements and judgments. Such amounts are reported in Professional services expense in the consolidated statements of operations. (2) Includes cash payments made in connection with resolved legal and regulatory matters. (3) See Note 16 — Equity for additional information. |
Equity (Tables)
Equity (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Loss (AOCL), Net of Income Taxes | The components of accumulated other comprehensive loss (AOCL), net of income taxes, were as follows: December 31, 2019 2018 Unfunded pension plan obligation, net $ 6,789 $ 3,347 Unrealized losses on cash flow hedges, net 832 979 Other (27 ) (69 ) $ 7,594 $ 4,257 |
Derivative Financial Instrume_2
Derivative Financial Instruments and Hedging Activities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of Changes in Notional Balances of Holdings of Derivatives | The following table summarizes derivative activity, including the derivatives used in each of our identified hedging programs. The notional amount of our contracts does not represent our exposure to credit loss. None of the derivatives were designated as a hedge for accounting purposes as of or during the years ended December 31, 2019 , 2018 and 2017 : Interest Rate Risk MSR Hedging IRLCs and Loans Held for Sale Borrowings IRLCs TBA / Forward MBS Trades Forward Trades Interest Rate Caps Notional balance at December 31, 2019 $ 232,566 $ 1,200,000 $ 60,000 $ 27,083 Maturity Jan. 2020 - Mar. 2020 Jan. 2020 - Mar. 2020 Jan. 2020 May 2020 Fair value of derivative assets (liabilities) at: December 31, 2019 $ 4,878 1,121 $ (92 ) $ — December 31, 2018 3,871 — (4,983 ) 678 Gains (losses) on derivatives during the years ended: Gain on loans held for sale, net MSR valuation adjustments, net Gain on loans held for sale, net Other, net December 31, 2019 $ 756 525 $ (2,689 ) $ (358 ) December 31, 2018 3,809 — 136 (841 ) |
Interest Income (Tables)
Interest Income (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Other Income and Expenses [Abstract] | |
Schedule of Components of Interest Income | Years Ended December 31, 2019 2018 2017 Loans held for sale $ 14,669 $ 10,756 $ 11,100 Interest earning cash deposits and other 2,435 2,850 1,796 Automotive dealer financing notes — 420 3,069 $ 17,104 $ 14,026 $ 15,965 |
Interest Expense (Tables)
Interest Expense (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Other Income and Expenses [Abstract] | |
Schedule of Components of Interest Expense | Years Ended December 31, 2019 2018 2017 Senior notes $ 31,804 $ 31,280 $ 29,806 Match funded liabilities 26,902 31,870 47,624 Other secured borrowings 46,278 35,412 45,099 Financing liabilities — 66 635 Other 9,145 4,743 3,763 $ 114,129 $ 103,371 $ 126,927 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Before Taxes | For income tax purposes, the components of loss from continuing operations before taxes were as follows: Years Ended December 31, 2019 2018 2017 Domestic $ (93,487 ) $ 11,477 $ (75,143 ) Foreign (33,004 ) (82,953 ) (68,830 ) $ (126,491 ) $ (71,476 ) $ (143,973 ) |
Schedule of Components of Income Tax Expense (Benefit) | The components of income tax expense (benefit) were as follows: Years Ended December 31, 2019 2018 2017 Current: Federal $ 873 $ (7,670 ) $ (21,859 ) State 4,460 356 (3,938 ) Foreign 7,181 11,132 9,550 12,514 3,818 (16,247 ) Deferred: Federal (40,429 ) 23,991 27,289 State (914 ) 319 702 Foreign 11,993 (4,252 ) 2,719 Provision for (reversal of) valuation allowance on deferred tax assets 32,470 (23,347 ) (29,979 ) 3,120 (3,289 ) 731 Total $ 15,634 $ 529 $ (15,516 ) |
Schedule of Effective Income Tax Reconciliation | Income tax expense differs from the amounts computed by applying the U.S. Federal corporate income tax rate as follows: Years Ended December 31, 2019 2018 2017 Expected income tax expense (benefit) at statutory rate (1) $ (26,563 ) $ (15,010 ) $ (50,391 ) Differences between expected and actual income tax expense (2): Bargain purchase gain disallowance 80 (13,448 ) — Revaluation of deferred tax assets related to legal entity mergers (25,509 ) — — Reduction in tax attributes for Section 382 & 383 limitations — 55,668 — U.S. Tax Reform - Change in Federal rate — (10,666 ) 62,758 U.S. Tax Reform - Transition Tax — 14,412 34,846 U.S. Tax Reform - BEAT Tax (555 ) 1,076 — U.S. Tax Reform - GILTI inclusion 11,859 — — Foreign tax differential including effectively connected income (3) 15,979 22,990 (12,140 ) Provision for (reversal of) liability for uncertain tax positions 4,198 (3,987 ) (16,925 ) Provision for (reversal of) valuation allowance on deferred tax assets (4) 32,470 (23,347 ) (29,979 ) Provision for liability for intra-entity transactions (5) — — 2,484 State tax, after Federal tax benefit (784 ) 675 (3,938 ) Excess tax benefits from share-based compensation 381 (356 ) (3,701 ) Other permanent differences 66 122 (267 ) Foreign tax credit (generation) utilization 263 (25,601 ) — Executive compensation disallowance 1,344 959 221 Subpart F income — 3,222 2,824 Other provision to return differences 1,242 (6,559 ) 221 Other 1,163 379 (1,529 ) Actual income tax expense (benefit) $ 15,634 $ 529 $ (15,516 ) (1) The U.S. Federal corporate income tax rate is 21% beginning January 1, 2018 and was 35% until December 31, 2017. (2) ASC 740-10-50 and SEC Regulation S-X, Rule 4-08(h) require the disclosure of significant reconciling items in the effective tax rate reconciliation schedule. We have prepared the 2019 effective tax rate reconciliation consistent with prior years, taking into account the materiality of reconciling items, comparability with prior years and the usefulness of the information. (3) The foreign tax differential includes expense recognized in 2019 and a benefit recognized in 2018 and 2017 for taxable income or losses earned by Ocwen Mortgage Servicing, Inc. (OMS) prior to the merger of OMS into OVIS in 2019 as disclosed below, which are taxable in the U.S. as effectively connected income (ECI). The impact of ECI to income tax expense (benefit) for 2019 , 2018 and 2017 was $2.6 million , $(3.3) million and $(28.5) million , respectively. (4) The benefit recorded for the provision for valuation allowance in 2017 relates primarily to the reduction in the valuation allowance necessary as a result of revaluing our deferred tax assets due to U.S. tax reform and the reduction in the corporate tax rate. This benefit is partially offset by an increase in valuation allowance necessary for current year losses. (5) ASU 2016-16 requires an entity to recognize the income tax consequences of intra-entity transfers of assets other than inventory when the transfer occurs. Previously, recognition of current and deferred income taxes for an intra-entity transfer was prohibited until the asset had been sold to an outside party. We adopted this standard on a modified retrospective basis on January 1, 2018 by recording a cumulative-effect reduction of $5.6 million to retained earnings. |
Schedule of Deferred Tax Assets and Liabilities | Net deferred tax assets were comprised of the following: December 31, 2019 2018 Deferred tax assets Net operating loss carryforwards - federal and foreign $ 64,817 $ 31,587 Net operating loss carryforwards and credits - state and local 70,254 — Reserve for servicing exposure 7,711 10,331 Accrued other liabilities 6,377 8,966 Foreign deferred assets 3,620 7,142 Partnership losses 7,029 6,681 Stock-based compensation expense 5,297 5,610 Interest expense disallowance 12,423 4,773 Intangible asset amortization 4,946 4,579 Accrued incentive compensation 5,063 4,527 Accrued legal settlements 6,028 4,350 Bad debt and allowance for loan losses 2,530 3,498 Tax residuals and deferred income on tax residuals 2,885 2,905 Foreign tax credit 94 357 Lease liabilities 5,459 580 Deferred income 8,493 — Other 8,708 8,252 221,734 104,138 Deferred tax liabilities Mortgage servicing rights amortization 16,358 27,860 Foreign undistributed earnings 1,615 2,059 Other 1,151 804 19,124 30,723 202,610 73,415 Valuation allowance (200,441 ) (68,126 ) Deferred tax assets, net $ 2,169 $ 5,289 |
Schedule of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amounts of the total unrecognized tax benefits for uncertain tax positions, which are included in the Liability for uncertain tax positions in Other liabilities, is as follows: Years Ended December 31, 2019 2018 2017 Beginning balance $ 9,622 $ 2,281 $ 16,994 Additions - PHH acquisition — 13,108 — Additions for tax positions of current year 207 412 — Additions for tax positions of prior years 3,110 1,354 2,281 Reductions for tax positions of prior years — (236 ) — Reductions for settlements (1,293 ) (3,188 ) (387 ) Lapses in statute of limitations (1,057 ) (4,109 ) (16,607 ) Ending balance $ 10,589 $ 9,622 $ 2,281 |
Basic and Diluted Earnings (L_2
Basic and Diluted Earnings (Loss) per Share (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliation of the Calculation of Basic EPS to Diluted EPS | Years Ended December 31, 2019 2018 2017 Loss from continuing operations, net of tax attributable to Ocwen common stockholders $ (142,125 ) $ (72,181 ) $ (127,966 ) Income from discontinued operations, net of tax — 1,409 — Net loss attributable to Ocwen stockholders $ (142,125 ) $ (70,772 ) $ (127,966 ) Weighted average shares of common stock outstanding - Basic and Diluted 134,444,402 133,703,359 127,082,058 Earnings (loss) per share - Basic and Diluted Continuing operations $ (1.06 ) $ (0.54 ) $ (1.01 ) Discontinued operations $ — $ 0.01 $ — Total attributable to Ocwen stockholders $ (1.06 ) $ (0.53 ) $ (1.01 ) Stock options and common stock awards excluded from the computation of diluted earnings per share Anti-dilutive (1) 3,167,624 4,989,725 5,487,164 Market-based (2) 787,204 670,829 862,446 (1) Includes stock options that are anti-dilutive because their exercise price was greater than the average market price of Ocwen’s stock, and stock awards that are anti-dilutive based on the application of the treasury stock method. (2) Shares that are issuable upon the achievement of certain market-based performance criteria related to Ocwen’s stock price. |
Employee Compensation and Ben_2
Employee Compensation and Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Change in Benefit Obligation, Plan Assets and Funded Status for Pension Plans | The following table shows the total change in the benefit obligation, plan assets and funded status for the pension plans: December 31, 2019 2018 Benefit obligation $ 54,603 $ 49,122 Fair value of plan assets 41,220 36,439 Unfunded status recognized in Other liabilities $ (13,383 ) $ (12,683 ) Amounts recognized in Accumulated other comprehensive income $ 6,864 $ 3,422 |
Schedule of Stock Options Vesting | wards granted under the 2007 Equity Plan and the 2017 Equity Plan had the following characteristics in common: Type of Award Percent of Total Equity Award Vesting Period 2011 - 2014 Awards: Options: Service Condition: Time-based 60 % Ratably over four years (25% on each of the four anniversaries of the grant date) Market Condition: Market performance-based 35 Over three years beginning with 25% vesting on the date that the stock price has at least doubled over the exercise price and the compounded annual gain over the exercise price is at least 20% and then ratably over three years (25% on each of the next three anniversaries of the achievement of the market condition) Extraordinary market performance-based 5 Over three years beginning with 25% vesting on the date that the stock price has at least tripled over the exercise price and the compounded annual gain over the exercise price is at least 25% and then ratably over three years (25% on each of the next three anniversaries of the achievement of the market condition) Total Award 100 % Type of Award Percent of Total Equity Award Vesting Period 2015 - 2016 Awards: Options: Service Condition: Time-based 34 % Ratably over four years (25% vesting on each of the first four anniversaries of the grant date.) Stock Units: Service Condition: Time-based — Over four years with 1/3 vesting on each of the 2 nd , 3 rd and 4 th anniversaries of the grant date. Market Condition: Time-based vesting schedule and Market performance-based vesting date 66 Vest over four years with 25% vesting on each of the four anniversaries of the grant date. However, none are considered vested until the first trading day (if any) on or before the 4 th anniversary of the award date on which the average stock price equals or exceeds the price set in the individual award agreement, at which time all units that have met their time-based vesting schedule vest immediately with the remainder vesting in accordance with their time-based schedule. Total Award 100 % 2017 - 2019 Awards: Options: Service Condition: Time-based 15 % Ratably over three years (1/3 vesting on each of the first three anniversaries of the grant date). Stock Units: Service Condition: Time-based 56 Over three years with 1/3 vesting on each of the first three anniversaries of the grant date. Market Condition: Time-based vesting schedule and Market performance-based vesting date 29 Vest over four years with 25% vesting on each of the four anniversaries of the grant date. However, none are considered vested until the first trading day (if any) on or before the 4 th anniversary of the award date on which the average stock price equals or exceeds the price set in the individual award agreement, at which time all units that have met their time-based vesting schedule vest immediately with the remainder vesting in accordance with their time-based schedule. Total Award 100 % |
Schedule of Stock Option Activity | Years Ended December 31, Stock Options 2019 2018 2017 Number of Options Weighted Average Exercise Price Number of Options Weighted Average Exercise Price Number of Options Weighted Average Exercise Price Outstanding at beginning of year 2,092,599 $ 19.22 6,708,655 $ 9.97 6,926,634 $ 9.88 Granted (1) (2) 51,409 2.08 348,385 3.66 — — Exercised — — — — — — Forfeited / Expired (3) (164,577 ) 18.69 (4,964,441 ) 5.62 (217,979 ) 7.16 Outstanding at end of year (4)(5) 1,979,431 $ 18.82 2,092,599 $ 19.22 6,708,655 $ 9.97 Exercisable at end of year (4)(5)(6) 1,580,766 $ 20.16 1,520,039 $ 21.29 6,234,830 $ 8.87 (1) Stock options granted in 2019 include 33,180 options awarded to Ocwen’s Chief Financial Officer at a strike price of $2.17 equal to the closing price of our common stock on the effective date of her employment. Stock options granted in 2018 include 266,990 options awarded to Ocwen’s current Chief Executive Officer (CEO) at an exercise price of $4.12 equal to the closing price of our common stock on the effective date of his employment, which was the closing date of the PHH acquisition. (2) The weighted average grant date fair value of stock options granted in 2019 was $1.49 . (3) Includes 73,696 and 4,719,750 options which expired unexercised in 2019 and 2018, because their exercise price was greater than the market price of Ocwen’s stock. (4) At December 31, 2019 , 115,000 options with a market condition for vesting based on an average common stock trading price of $38.41 , had not met their performance criteria. Outstanding and exercisable stock options at December 31, 2019 have a net aggregate intrinsic value of $0 . A total of 810,939 market-based options were outstanding at December 31, 2019 , of which 695,939 were exercisable. (5) At December 31, 2019 , the weighted average remaining contractual term of options outstanding and options exercisable was 4.13 years and 3.28 years , respectively. (6) The total fair value of stock options that vested and became exercisable during 2019 , 2018 and 2017 , based on grant-date fair value, was $0.6 million , $0.6 million and $0.7 million , respectively. |
Schedule of Stock Unit Activity | Years Ended December 31, Stock Units - Equity Awards 2019 2018 2017 Number of Weighted Number of Weighted Number of Weighted Unvested at beginning of year 2,946,800 $ 3.75 2,753,918 $ 3.69 2,752,054 $ 3.91 Granted (1)(2) 1,256,952 2.00 1,809,373 3.57 971,761 2.56 Vested (3)(4) (1,137,696 ) 3.08 (796,856 ) 2.78 (896,272 ) 3.26 Forfeited/Cancelled (1) (406,931 ) 9.58 (819,635 ) 4.57 (73,625 ) 2.20 Unvested at end of year (5)(6) 2,659,125 $ 2.63 2,946,800 $ 3.75 2,753,918 $ 3.69 (1) Upon the resignation of Ocwen’s former CEO on June 30, 2018, 377,525 unvested stock units which would have been forfeited immediately were modified to allow continued vesting in accordance with the original terms. This had the equivalent effect of canceling the original award and granting a new award. (2) Stock units granted in 2019 include 1,130,653 units granted to Ocwen’s CEO under the new long-term incentive (LTI) program described below. Stock units granted in 2018 include 983,010 units granted to Ocwen’s current CEO on the effective date of his employment, which was the closing date of the PHH acquisition. (3) The total intrinsic value of stock units vested, which is defined as the market value of the stock on the date of vesting, was $2.1 million , $3.3 million and $4.6 million for 2019 , 2018 and 2017 , respectively. (4) The total fair value of the stock units that vested during 2019 , 2018 and 2017 , based on grant-date fair value, was $3.5 million , $2.2 million and $2.9 million , respectively. (5) Excluding the 787,204 market-based stock awards that have not met their performance criteria, the net aggregate intrinsic value of stock awards outstanding at December 31, 2019 was $2.6 million . At December 31, 2019 , 40,000 , 93,023 , 57,604 , and 31,250 stock units with a market condition for vesting based on an average common stock trading price of $11.72 , $5.80 , $4.34 , and $3.84 respectively, as well as 565,327 stock units requiring an average common stock trading price of $2.56 to vest a minimum of 50% of units, had not yet met the market condition (and time-vesting requirements, where applicable). (6) At December 31, 2019 , the weighted average remaining contractual term of share units outstanding was 1.88 years . Stock Units - Liability Awards Year Ended December 31, 2019 Unvested units at beginning of year — Granted 3,766,143 Vested — Forfeited/Cancelled 114,528 Unvested units at end of year 3,651,615 |
Schedule of Assumptions used to Value Stock Option Awards Granted | The following assumptions were used to value awards: Years Ended December 31, 2019 2018 2017 Black-Scholes Monte Carlo Black-Scholes Monte Carlo Monte Carlo Risk-free interest rate 2.60% 1.16% - 2.40% 2.79% – 3.14% 1.15% – 1.18% 1.12% – 1.18% Expected stock price volatility (1) 68% 72.5% - 75.9% 67% 71% - 74% 71% - 77% Expected dividend yield —% —% —% —% —% Expected life (in years) (2) 8.5 (3) 8.5 (3) (3) Contractual life (in years) N/A N/A N/A N/A N/A Fair value $1.37 - $1.55 $1.75 - $2.25 $1.53 - $2.96 $1.84 - $4.80 $2.00 - $4.80 (1) We generally estimate volatility based on the historical volatility of Ocwen’s common stock over the most recent period that corresponds with the estimated expected life of the option. For awards valued using a Monte Carlo simulation, volatility is computed as a blend of historical volatility and implied volatility based on traded options on Ocwen’s common stock. (2) For the options valued using the Black-Scholes model we determined the expected life based on historical experience with similar awards, giving consideration to the contractual term, exercise patterns and post vesting forfeitures. The expected term of the options valued using the lattice (binomial) model is derived from the output of the model. The lattice (binomial) model incorporates exercise assumptions based on analysis of historical data. For all options, the expected life represents the period of time that options granted were expected to be outstanding at the date of the award. (3) The stock units that contain both a service condition and a market-based condition are valued using the Monte Carlo simulation. The expected term is derived from the output of the simulation and represents the expected time to meet the market-based vesting condition. For equity awards with both service and market conditions, the requisite service period is the longer of the derived or explicit service period. In this case, the explicit service condition (vesting period) is the requisite service period, and the graded vesting method is used for expense recognition. |
Schedule of Equity-based Compensation Expense Related to Stock Options and Stock Awards and Related Excess Tax Benefit | The following table summarizes Ocwen's stock-based compensation expense included as a component of Compensation and benefits expense in the consolidated statements of operations: Years Ended December 31, 2019 2018 2017 Compensation expense - Equity awards Stock option awards $ (121 ) $ (368 ) $ 1,457 Stock awards 2,818 2,734 4,167 2,697 2,366 5,624 Compensation expense - Liability awards 1,082 — — (Tax deficiency) excess tax benefit related to share-based awards (381 ) 294 3,701 |
Business Segment Reporting (Tab
Business Segment Reporting (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information | Financial information for our segments is as follows: Results of Operations Servicing Lending Corporate Items and Other Corporate Eliminations Business Segments Consolidated Year Ended December 31, 2019 Revenue $ 985,102 $ 125,086 $ 13,187 $ — $ 1,123,375 MSR valuation adjustments, net (120,646 ) (230 ) — — (120,876 ) Operating expenses (1) (2) 536,153 84,280 53,506 — 673,939 Other income (expense): Interest income 8,051 7,277 1,776 — 17,104 Interest expense (47,347 ) (7,911 ) (58,871 ) — (114,129 ) Pledged MSR liability expense (372,172 ) — 83 — (372,089 ) Gain on repurchase of senior secured notes — — 5,099 — 5,099 Bargain purchase gain — — (381 ) (381 ) Gain on sale of MSRs, net 453 — — — 453 Other, net 11,942 791 (3,841 ) — 8,892 Other income (expense), net (399,073 ) 157 (56,135 ) — (455,051 ) Income (loss) before income taxes $ (70,770 ) $ 40,733 $ (96,454 ) $ — $ (126,491 ) Results of Operations Servicing Lending Corporate Items and Other Corporate Eliminations Business Segments Consolidated Year Ended December 31, 2018 Revenue $ 951,224 $ 93,672 $ 18,149 $ — $ 1,063,045 MSR valuation adjustments, net (152,983 ) (474 ) — — (153,457 ) Operating expenses (1) 619,484 82,432 77,123 — 779,039 Other income (expense): Interest income 5,383 6,061 2,582 — 14,026 Interest expense (41,830 ) (7,311 ) (54,230 ) — (103,371 ) Pledged MSR liability expense (172,342 ) 672 — — (171,670 ) Bargain purchase gain — — 64,036 — 64,036 Gain on sale of mortgage servicing rights, net 1,325 — — — 1,325 Other, net (3,241 ) 966 (4,096 ) — (6,371 ) Other income (expense), net (210,705 ) 388 8,292 — (202,025 ) Income (loss) from continuing operations before income taxes $ (31,948 ) $ 11,154 $ (50,682 ) $ — $ (71,476 ) Year Ended December 31, 2017 Revenue $ 1,041,290 $ 127,475 $ 25,811 $ — $ 1,194,576 MSR valuation adjustments, net (52,689 ) (273 ) — — (52,962 ) Operating expenses 663,695 127,785 154,203 — 945,683 Other income (expense): Interest income 783 10,914 4,268 — 15,965 Interest expense (57,284 ) (13,893 ) (55,750 ) — (126,927 ) Pledged MSR liability expense (236,311 ) — — — (236,311 ) Gain on sale of MSRs 10,537 — — — 10,537 Other, net 4,049 (869 ) (6,348 ) — (3,168 ) Other expense, net (278,226 ) (3,848 ) (57,830 ) — (339,904 ) Income (loss) before income taxes $ 46,680 $ (4,431 ) $ (186,222 ) $ — $ (143,973 ) (1) Compensation and benefits expense in the Corporate Items and Other segment for 2019 and 2018 includes $20.3 million and $11.9 million , respectively, of severance expense attributable to PHH integration-related headcount reductions of primarily U.S.-based employees in 2019 and severance expense attributable to headcount reductions in connection with our strategic decisions to exit the automotive capital services business and the forward lending correspondent and wholesale channels in late 2017 and early 2018, as well as our overall efforts to reduce costs. (2) Included in the Corporate Items and Other segment for 2019, we recorded in Professional services expense a recovery from a service provider of $30.7 million during the first quarter of amounts previously recognized as expense. Total Assets Servicing Lending Corporate Items and Other Corporate Eliminations Business Segments Consolidated December 31, 2019 $ 3,378,515 $ 6,459,367 $ 568,317 $ — $ 10,406,199 December 31, 2018 3,306,208 5,603,481 484,527 — 9,394,216 December 31, 2017 3,033,243 4,945,456 424,465 — 8,403,164 Depreciation and Amortization Expense Servicing Lending Corporate Items and Other Business Segments Consolidated Year Ended December 31, 2019: Depreciation expense $ 1,925 $ 93 $ 29,893 $ 31,911 Amortization of debt discount — — 1,342 1,342 Amortization of debt issuance costs 71 — 3,099 3,170 Year Ended December 31, 2018: Depreciation expense $ 4,601 $ 103 $ 22,498 $ 27,202 Amortization of debt discount — — 1,183 1,183 Amortization of debt issuance costs — — 2,921 2,921 Year Ended December 31, 2017: Depreciation expense $ 5,797 $ 194 $ 20,895 $ 26,886 Amortization of mortgage servicing rights 51,515 273 — 51,788 Amortization of debt discount — — 1,114 1,114 Amortization of debt issuance costs — — 2,738 2,738 |
Commitments (Tables)
Commitments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Activity Related to HMBS Repurchases | Activity with regard to HMBS repurchases, including MCA repurchases, follows: Year Ended December 31, 2019 Active Inactive Total Number Amount Number Amount Number Amount Beginning balance 10 $ 2,047 252 $ 14,833 262 $ 16,880 Additions (1) 81 19,671 241 24,517 322 44,188 Recoveries, net (2) (30 ) (10,414 ) (234 ) (12,520 ) (264 ) (22,934 ) Transfers 1 (785 ) (1 ) 785 — — Changes in value — 27 — (2,468 ) — (2,441 ) Ending balance 62 $ 10,546 258 $ 25,147 320 $ 35,693 (1) Total repurchases during the year ended December 31, 2019 , includes 189 loans totaling $38.4 million related to MCA repurchases. (2) Includes amounts received upon assignment of loan to HUD, loan payoff, REO liquidation and claim proceeds less any amounts charged off as unrecoverable. |
Schedule of Future Minimum Rental Commitments under Non-cancelable Operating Leases | We lease certain of our premises and equipment under non-cancelable operating leases with terms expiring through 2025 exclusive of renewal option periods. At December 31, 2019, the weighted average remaining term of our leases was 3.3 years. A maturity analysis of our lease liability as of December 31, 2019 is summarized as follows: 2020 $ 16,652 2021 15,356 2022 13,102 2023 3,088 2024 697 Thereafter 654 49,549 Less: Adjustment to present value (5,061 ) Total lease payments, net $ 44,488 |
Contingencies (Tables)
Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Changes in Liability for Representation and Warrant Obligations, Compensatory Fees for Foreclosures that may Ultimately Exceed Investor Timelines and Related Indemnification Obligations | The following table presents the changes in our liability for representation and warranty obligations, compensatory fees for foreclosures that may ultimately exceed investor timelines and similar indemnification obligations: Years Ended December 31, 2019 2018 2017 Beginning balance (1) $ 49,267 $ 19,229 $ 24,285 Provision (reversal) for representation and warranty obligations (11,701 ) 4,649 (1,371 ) New production reserves 304 7,437 702 Obligation assumed in connection with the acquisition of PHH — 27,736 — Charge-offs and other (2) (3) 12,968 (9,784 ) (4,387 ) Ending balance (1) $ 50,838 $ 49,267 $ 19,229 (1) The liability for representation and warranty obligations and compensatory fees for foreclosures is reported in Other liabilities (a component of Liability for indemnification obligations) on our consolidated balance sheets. (2) Includes principal and interest losses realized in connection with repurchased loans, make-whole, indemnification and fee payments and settlements net of recoveries, if any. (3) Includes $18.0 million liability for representation and warranty obligations related to sold advances previously presented as allowance for losses. See Note 7 — Advances . |
Quarterly Results of Operatio_2
Quarterly Results of Operations (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Results of Operations (Unaudited) | Quarters Ended December 31, 2019 September 30, 2019 June 30, 2019 March 31, 2019 Revenue $ 261,171 $ 283,660 $ 274,493 $ 304,051 MSR valuation adjustments, net (1) 829 134,561 (147,268 ) (108,998 ) Operating expenses 138,858 179,430 184,381 171,270 Other income (expense), net (85,899 ) (277,108 ) (27,177 ) (64,867 ) Income (loss) before income taxes 37,243 (38,317 ) (84,333 ) (41,084 ) Income tax expense 2,370 4,450 5,404 3,410 Net income (loss) attributable to Ocwen stockholders $ 34,873 $ (42,767 ) $ (89,737 ) $ (44,494 ) Earnings (loss) per share attributable to Ocwen stockholders Basic $ 0.26 $ (0.32 ) $ (0.67 ) $ (0.33 ) Diluted 0.26 (0.32 ) (0.67 ) (0.33 ) (1) Positive valuation adjustments indicated in the above table represent fair value gains and negative valuation adjustments represent fair value losses. Quarters Ended December 31, 2018 (1) September 30, 2018 June 30, 2018 March 31, 2018 Revenue $ 310,929 $ 238,278 $ 253,581 $ 260,257 MSR valuation adjustments, net (61,762 ) (41,448 ) (33,118 ) (17,129 ) Operating expenses 241,057 176,078 172,532 189,372 Other income (expense), net (2) (15,873 ) (61,025 ) (76,336 ) (48,791 ) Income (loss) from continuing operations before income taxes (7,763 ) (40,273 ) (28,405 ) 4,965 Income tax expense (benefit) (4,012 ) 845 1,348 2,348 Income (loss) from continuing operations (3,751 ) (41,118 ) (29,753 ) 2,617 Income from discontinued operations, net of income taxes 1,409 — — — Net income (loss) (2,342 ) (41,118 ) (29,753 ) 2,617 Net income attributable to non-controlling interests — (29 ) (78 ) (69 ) Net loss (income) attributable to Ocwen stockholders $ (2,342 ) $ (41,147 ) $ (29,831 ) $ 2,548 Earnings (loss) per share attributable to Ocwen stockholders - Basic and Diluted Continuing operations $ (0.03 ) $ (0.31 ) $ (0.22 ) $ 0.02 Discontinued operations 0.01 — — — $ (0.02 ) $ (0.31 ) $ (0.22 ) $ 0.02 (1) The quarter ended December 31, 2018 includes the results of operations of PHH from the acquisition date of October 4, 2018 through December 31, 2018. See Note 2 — Business Acquisition for additional information. (2) Includes a bargain purchase gain, net of tax, of $64.0 million recognized during the quarter ended December 31, 2018 in connection with the acquisition of PHH. |
Organization, Business Enviro_4
Organization, Business Environment, Basis of Presentation and Significant Accounting Policies - Narrative (Details) $ in Thousands | Jan. 01, 2018USD ($) | Dec. 31, 2019USD ($)employee | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Jan. 31, 2020USD ($) | Jan. 01, 2020USD ($) |
Description of Business and Basis of Presentation [Line Items] | ||||||
Financing Interest Expense | $ 372,089 | $ 171,670 | $ 236,311 | |||
Total number of employees | employee | 5,300 | |||||
Percentage of foreign based employees engaged in supporting loan servicing operations | 80.00% | |||||
Current maturities of borrowings in next 12 months | $ 1,200,000 | |||||
Long-term debt, gross | $ 1,030,306 | 452,736 | ||||
Debt instrument term (years) | 364 days | |||||
Servicing asset at amortized cost | $ 372,089 | 171,670 | 236,311 | |||
Other financing liabilities | (972,595) | (1,062,090) | ||||
Other secured borrowings, net | $ 1,025,791 | 448,061 | ||||
Threshold period past due for financing receivables to be delinquent | 89 days | |||||
Estimated incremental borrowing rate (percentage) | 7.50% | |||||
Other restricted cash | $ 40,725 | 41,252 | 9,179 | |||
Accelerated depreciation | $ 8,300 | |||||
India | ||||||
Description of Business and Basis of Presentation [Line Items] | ||||||
Total number of employees | employee | 3,400 | |||||
Philippines | ||||||
Description of Business and Basis of Presentation [Line Items] | ||||||
Total number of employees | employee | 400 | |||||
Maximum | ||||||
Description of Business and Basis of Presentation [Line Items] | ||||||
Maximum percentage till, the company exercise significant influence, but not control over subsidiaries or VIEs | 50.00% | |||||
Senior Secured Term Loan | Secured Debt | ||||||
Description of Business and Basis of Presentation [Line Items] | ||||||
Long-term debt, gross | $ 326,100 | 231,500 | ||||
Subsequent Event | Senior Secured Term Loan | Secured Debt | ||||||
Description of Business and Basis of Presentation [Line Items] | ||||||
Long-term debt, gross | $ 200,000 | |||||
Leased Facility | ||||||
Description of Business and Basis of Presentation [Line Items] | ||||||
Other restricted cash | 23,200 | |||||
Accounting Standards Update 2019-04 | Subsequent Event | ||||||
Description of Business and Basis of Presentation [Line Items] | ||||||
Cumulative effect of new accounting pronouncement | $ 47,000 | |||||
Restatement Adjustment | ||||||
Description of Business and Basis of Presentation [Line Items] | ||||||
Other financing liabilities | 65,500 | |||||
Other secured borrowings, net | 65,500 | |||||
NRZ | ||||||
Description of Business and Basis of Presentation [Line Items] | ||||||
Financing Interest Expense | $ 372,089 | 171,670 | $ 236,311 | |||
NRZ | Customer Concentration Risk | Unpaid Principal Balance | ||||||
Description of Business and Basis of Presentation [Line Items] | ||||||
Concentration risk (percentage) | 56.00% | |||||
NRZ | Customer Concentration Risk | Servicing Portfolio | ||||||
Description of Business and Basis of Presentation [Line Items] | ||||||
Concentration risk (percentage) | 20.00% | |||||
Fair Value Agency Mortgage Servicing Rights | Retained Earnings (Accumulated Deficit) | ||||||
Description of Business and Basis of Presentation [Line Items] | ||||||
Cumulative effect of fair value election | $ 82,000 | $ 82,043 |
Organization, Business Enviro_5
Organization, Business Environment, Basis of Presentation and Significant Accounting Policies - Schedule of Reclassifications of Prior Period Amounts to Confirm with Current Period Presentation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Prior Period Adjustments Restatement [Line Items] | |||
Loss on valuation of MSRs, at fair value | $ 93,953 | $ 5,853 | $ 86,964 |
Servicing and subservicing fees | (975,507) | (937,083) | (991,597) |
Amortization of MSRs | $ 372,089 | 171,670 | 236,311 |
Previously Reported | Servicing and Origination Expense | |||
Prior Period Adjustments Restatement [Line Items] | |||
Impairment charge (reversal) on MSRs | 40,407 | 46,219 | |
Loss on valuation of MSRs, at fair value | 22,577 | 31,517 | |
Servicing and subservicing fees | (2,747) | (2,221) | |
Previously Reported | Expense | |||
Prior Period Adjustments Restatement [Line Items] | |||
Amortization of MSRs | $ 60,237 | $ 75,515 |
Organization, Business Enviro_6
Organization, Business Environment, Basis of Presentation and Significant Accounting Policies - Schedule of Property and Equipment Useful Lives (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Computer Software | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 2 years |
Computer Software | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Computer Hardware | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Buildings | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 40 years |
Furniture and Fixtures | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Office Equipment | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Organization, Business Enviro_7
Organization, Business Environment, Basis of Presentation and Significant Accounting Policies - Schedule of Impact of New Accounting Pronouncements (Details) - USD ($) $ in Thousands | Jan. 01, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Right-of-use assets | $ 31,329 | |||
Lease liability | (44,488) | |||
Cumulative effect of adopting ASU 2016-02 | 16 | $ 82,043 | ||
Property, Plant and Equipment | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Right-of-use asset | $ 66,231 | 66,231 | ||
Reclassification of existing balances, right-of-use assets | (21,438) | |||
Right-of-use assets | 44,793 | |||
Other Assets | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Reclassification of existing balances, right-of-use assets | (977) | |||
Prepaid expenses (rent) | 977 | |||
Other Liabilities | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Deferred rent credit | (5,498) | |||
Reclassification of existing balances, liability for lease abandonments and deferred rent | 5,498 | |||
Lease liability | 66,247 | |||
Lease liability | (65,270) | |||
Reclassification of existing balances, lease liability | 977 | |||
Liabilities Related to Discontinued Operations | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Deferred rent credit | $ (15,940) | |||
Reclassification of existing balances, liability for lease abandonments | 15,940 | |||
Retained Earnings (Accumulated Deficit) | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative effect of adopting ASU 2016-02 | 16 | $ 16 | $ (284) | |
U.S. | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Right-of-use assets | 30,400 | |||
India | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Right-of-use assets | 13,600 | |||
Equipment | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Right-of-use assets | $ 700 |
Business Acquisitions - Narrati
Business Acquisitions - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | Oct. 04, 2018 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Business Acquisition [Line Items] | |||||||||||||
Aggregate consideration paid | $ 0 | $ (358,396) | $ 0 | ||||||||||
Cash paid by PHH to former holders of common stock | 0 | 325,000 | 0 | ||||||||||
Cash consideration paid by Ocwen to former holders of PHH common stock | $ 0 | $ 33,396 | 0 | ||||||||||
Common stock, shares, outstanding | 134,862,232 | 133,912,425 | 134,862,232 | 133,912,425 | |||||||||
Common stock, par value per share | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | |||||||||
Bargain purchase gain | $ (381) | $ 64,036 | 0 | ||||||||||
Acquisition related costs | 13,700 | ||||||||||||
Mortgage servicing rights, at fair value | $ 1,486,395 | $ 1,457,149 | 1,486,395 | 1,457,149 | 671,962 | $ 679,256 | |||||||
Revenue | 261,171 | $ 283,660 | $ 274,493 | $ 304,051 | 310,929 | $ 238,278 | $ 253,581 | $ 260,257 | 1,123,375 | 1,063,045 | 1,194,576 | ||
Servicing and subservicing fees | 975,507 | 937,083 | 991,597 | ||||||||||
Income tax expense (benefit) | $ 2,370 | $ 4,450 | $ 5,404 | $ 3,410 | (4,012) | $ 845 | $ 1,348 | $ 2,348 | 15,634 | 529 | (15,516) | ||
PHH Corporation | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Aggregate consideration paid | $ (358,396) | (358,396) | |||||||||||
Cash paid by PHH to former holders of common stock | 325,000 | ||||||||||||
Common stock, shares, outstanding | 32,581,485 | ||||||||||||
Common stock, par value per share | $ 0.01 | ||||||||||||
Cash per share paid to former holders of common stock | $ 11 | ||||||||||||
Bargain purchase gain | $ 64,036 | $ 63,655 | |||||||||||
Acquisition related costs | 18,500 | ||||||||||||
Mortgage Servicing Rights Sold Accounted for as Secured Borrowings | PHH Corporation | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Revenue | 120,600 | 134,600 | |||||||||||
Servicing and subservicing fees | 127,700 | 97,000 | |||||||||||
Base Erosion and Anti-Abuse Tax | PHH Corporation | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Income tax expense (benefit) | 300 | 200 | |||||||||||
Fair Value Adjustments in Connection with Acquisition | PHH Corporation | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Mortgage servicing rights, at fair value | $ 24,400 | 24,400 | (16,900) | ||||||||||
Interest expense | 30,600 | (73,800) | |||||||||||
Fair Value Adjustments in Connection with Acquisition | Financing Liability - MSRs Pledged | PHH Corporation | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Interest expense | $ 31,400 | $ (79,300) | |||||||||||
Software Development | PHH Corporation | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Estimated useful life | 3 years |
Business Acquisitions - Schedul
Business Acquisitions - Schedule of Purchase Price Allocation of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Oct. 04, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Business Acquisition [Line Items] | ||||
Total consideration paid to seller | $ 0 | $ (358,396) | $ 0 | |
Bargain purchase gain | (381) | $ 64,036 | $ 0 | |
PHH Corporation | ||||
Business Acquisition [Line Items] | ||||
Cash | $ 423,088 | 423,088 | ||
Restricted cash | 38,813 | 38,813 | ||
MSRs | 518,127 | 518,127 | ||
Advances | 96,163 | 96,067 | ||
Advances adjustment | (96) | |||
Loans held for sale | 42,324 | 42,682 | ||
Loans held for sale adjustment | 358 | |||
Receivables | 46,838 | 46,838 | ||
Premises and equipment | 15,203 | 15,203 | ||
Real estate owned | 3,289 | 3,289 | ||
Other assets | 6,293 | 6,293 | ||
Assets related to discontinued operations | 2,017 | 2,017 | ||
Financing liabilities (MSRs pledged, at fair value) | (481,020) | (481,020) | ||
Other secured borrowings | (27,594) | (27,594) | ||
Senior notes (Senior unsecured notes) | (120,624) | (120,624) | ||
Accrued legal fees and settlements | (9,960) | (9,960) | ||
Other accrued expenses | (36,889) | (36,889) | ||
Loan repurchase and indemnification liability | (27,736) | (27,736) | ||
Unfunded pension liability | (9,815) | (9,815) | ||
Other liabilities | (34,131) | (34,774) | ||
Other liabilities adjustment | (643) | |||
Liabilities related to discontinued operations | (21,954) | (21,954) | ||
Total identifiable net assets | 422,432 | 422,051 | ||
Total identifiable net assets adjustment | (381) | |||
Total consideration paid to seller | (358,396) | (358,396) | ||
Bargain purchase gain | $ 64,036 | 63,655 | ||
Bargain purchase gain adjustment | $ (381) |
Business Acquisitions - Sched_2
Business Acquisitions - Schedule of Post-Acquisition Results of Operations (Details) - PHH Corporation $ in Thousands | 3 Months Ended |
Dec. 31, 2018USD ($) | |
Business Acquisition [Line Items] | |
Revenues | $ 72,487 |
Expenses | 84,877 |
Other income (expense) | (19,132) |
Income tax benefit | (6,711) |
Net loss from continuing operations | $ (24,811) |
Business Acquisitions - Sched_3
Business Acquisitions - Schedule of Pro Forma Results of Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Business Acquisition, Pro Forma Information [Abstract] | ||
Revenues | $ 1,305,972 | $ 1,785,408 |
Loss from continuing operations, net of tax attributable to Ocwen common stockholders | $ (201,382) | $ (356,824) |
Business Acquisitions - Sched_4
Business Acquisitions - Schedule of Discontinued Operations for Post Acquisition Period (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||
Dec. 31, 2018 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | ||||||||
Net revenues | $ 413 | |||||||
Total expenses | (996) | |||||||
Income before income taxes | 1,409 | |||||||
Income tax expense (benefit) | 0 | |||||||
Income from discontinued operations | $ 1,409 | $ 1,409 | $ 0 | $ 0 | $ 0 | $ 0 | $ 1,409 | $ 0 |
Business Acquisitions - Sched_5
Business Acquisitions - Schedule of Carrying Amounts of Major Classes of Assets and Liabilities Related to Discontinued Operations (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Discontinued Operations and Disposal Groups [Abstract] | ||
Mortgage loans held for sale | $ 650 | |
Accounts receivable, net | 144 | |
Total assets related to discontinued operations | $ 0 | 794 |
Other liabilities | 18,265 | |
Total liabilities related to discontinued operations | $ 0 | $ 18,265 |
Business Acquisitions - Sched_6
Business Acquisitions - Schedule of Carrying Amounts of Major Classes of Assets and Liabilities Related to Discontinued Operations (Footnote) (Details) $ in Millions | Dec. 31, 2018USD ($) |
Discontinued Operations and Disposal Groups [Abstract] | |
Exit cost liability | $ 14.9 |
Cost Re-Engineering Plan (Detai
Cost Re-Engineering Plan (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Restructuring Reserve [Roll Forward] | |
Beginning balance | $ 0 |
Charges | 64,970 |
Payments / Other | (53,065) |
Ending balance | 11,905 |
Employee Severance | |
Restructuring Reserve [Roll Forward] | |
Beginning balance | 0 |
Charges | 35,704 |
Payments / Other | (29,449) |
Ending balance | 6,255 |
Facility Closing | |
Restructuring Reserve [Roll Forward] | |
Beginning balance | 0 |
Charges | 10,133 |
Payments / Other | (7,202) |
Ending balance | 2,931 |
Other Restructuring | |
Restructuring Reserve [Roll Forward] | |
Beginning balance | 0 |
Charges | 19,133 |
Payments / Other | (16,414) |
Ending balance | $ 2,719 |
Securitizations and Variable _3
Securitizations and Variable Interests Entities - Narrative (Details) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Nov. 26, 2019 | Jul. 01, 2019 | |
Servicing Assets at Fair Value [Line Items] | |||||
Average period to securitization | 30 days | ||||
Pledge advance remittance period | 2 days | ||||
Maximum borrowing capacity | $ 300,000,000 | ||||
Servicing asset | $ 1,486,395,000 | $ 1,457,149,000 | |||
Debt service accounts | 23,276,000 | 26,626,000 | $ 33,726,000 | ||
Forward Loans | |||||
Servicing Assets at Fair Value [Line Items] | |||||
MSRs retained | $ 7,500,000 | $ 8,300,000 | $ 20,700,000 | ||
Percentage of transferred residential loans serviced 60 days or more past due | 7.70% | 8.30% | |||
Minimum | Forward Loans | |||||
Servicing Assets at Fair Value [Line Items] | |||||
Number of days that transferred residential loans serviced were past due | 60 days | ||||
Secured Debt | |||||
Servicing Assets at Fair Value [Line Items] | |||||
Short-term debt | $ 372,015,000 | $ 65,523,000 | |||
Unamortized debt issuance costs | 3,381,000 | 3,098,000 | |||
Long-term debt | 1,025,791,000 | 448,061,000 | |||
Agency Mortgage Servicing Rights Financing Facility | Secured Debt | |||||
Servicing Assets at Fair Value [Line Items] | |||||
Short-term debt | 147,706,000 | $ 0 | |||
Servicing asset | 245,500,000 | ||||
Unamortized debt issuance costs | 900,000 | ||||
Interest payable | 100,000 | ||||
Debt service accounts | 100,000 | ||||
Excess Spread-Collateralized Notes | Ocwen Excess Spread-Collateralized Notes, Series 2019-PLS1 Class A | |||||
Servicing Assets at Fair Value [Line Items] | |||||
Servicing asset | 146,200,000 | ||||
Unamortized debt issuance costs | 1,200,000 | ||||
Interest payable | 100,000 | ||||
Debt instrument, face amount | $ 100,000,000 | ||||
Debt service accounts | $ 3,000,000 |
Securitizations and Variable _4
Securitizations and Variable Interests Entities - Summary of Cash Flows Received from and Paid to Securitization Trusts Related to Transfers Accounted for as Sales Outstanding (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Transfers and Servicing [Abstract] | |||
Proceeds received from securitizations | $ 1,248,837 | $ 1,290,682 | $ 3,256,625 |
Servicing fees collected (1) | 50,326 | 45,046 | 41,509 |
Purchases of previously transferred assets, net of claims reimbursed | (4,602) | (4,395) | (5,948) |
Cash flows between transferor and transferee proceeds and payment related to transfers accounted for sales | $ 1,294,561 | $ 1,331,333 | $ 3,292,186 |
Securitizations and Variable _5
Securitizations and Variable Interests Entities - Schedule of Carrying Amounts of Assets that Relate to Continuing Involvement with Transferred Forward Loans (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||
UPB of loans transferred | $ 14,490,984 | $ 15,600,971 |
Maximum exposure to loss | 14,742,394 | 15,872,424 |
Mortgage Servicing Rights | ||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||
Carrying value of assets | 109,581 | 132,774 |
Advances and Match Funded Advances | ||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||
Carrying value of assets | $ 141,829 | $ 138,679 |
Securitizations and Variable _6
Securitizations and Variable Interests Entities - Schedule of Carrying Value of Assets and Liabilities of Consolidated Mortgage-backed Securitization Trusts (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||
Loans held for investment | $ 6,292,938 | $ 5,498,719 |
Other financing liabilities | 972,595 | 1,062,090 |
Residential Mortgage Backed Securitization Trusts | ||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||
Loans held for investment | 23,342 | 26,520 |
Other financing liabilities | $ 22,002 | $ 24,815 |
Fair Value - Schedule of Carryi
Fair Value - Schedule of Carrying Amounts and Estimated Fair Values of Financial Instruments and Nonfinancial Assets Measured at Fair Value on a Recurring or Non-recurring basis or Disclosed, but not Carried, at Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Financial assets: | ||||
Loans held for sale, at fair value | $ 208,752 | $ 176,525 | $ 214,262 | $ 284,632 |
Financial liabilities: | ||||
Match funded liabilities | 679,109 | 778,284 | ||
Financing liabilities: | ||||
HMBS-related borrowings | 6,063,435 | 5,380,448 | ||
Other financing liabilities | 972,595 | 1,062,090 | ||
Total Financing liabilities | 1,030,306 | 452,736 | ||
Other secured borrowings: | ||||
Total Other secured borrowings | 1,025,791 | 448,061 | ||
Senior notes: | ||||
Total Senior notes | 311,085 | 448,727 | ||
Mortgage servicing rights: | ||||
Mortgage servicing rights, at fair value | 1,486,395 | 1,457,149 | 671,962 | $ 679,256 |
Financing Liability - MSRs Pledged | ||||
Financing liabilities: | ||||
Other financing liabilities | 950,593 | 1,032,856 | $ 508,291 | |
Carrying Value | ||||
Financial assets: | ||||
Total Loans held for sale | 275,269 | 242,622 | ||
Loans held for investment | 6,292,938 | 5,498,719 | ||
Financing liabilities: | ||||
Total Financing liabilities | 7,036,030 | 6,442,538 | ||
Other secured borrowings: | ||||
Total Other secured borrowings | 1,025,791 | 448,061 | ||
Senior notes: | ||||
Total Senior notes | 311,085 | 448,727 | ||
Fair Value | ||||
Financial assets: | ||||
Total Loans held for sale | 275,269 | 242,622 | ||
Loans held for investment | 6,292,938 | 5,498,719 | ||
Financing liabilities: | ||||
Total Financing liabilities | 7,036,030 | 6,442,538 | ||
Other secured borrowings: | ||||
Total Other secured borrowings | 1,010,789 | 432,313 | ||
Senior notes: | ||||
Total Senior notes | 270,022 | 426,147 | ||
Level 2 | Carrying Value | ||||
Financial assets: | ||||
Loans held for sale, at fair value | 208,752 | 176,525 | ||
Corporate bonds | 441 | 450 | ||
Other secured borrowings: | ||||
Senior secured term loan | 322,758 | 226,825 | ||
Senior notes: | ||||
Senior unsecured notes | 21,046 | 119,924 | ||
Senior secured notes | 290,039 | 328,803 | ||
Derivative financial instrument assets (liabilities), at fair value | ||||
Interest rate lock commitments | 4,878 | 3,871 | ||
TBA / Forward mortgage-backed securities (MBS) trades - MSR hedging | 1,121 | 0 | ||
Level 2 | Fair Value | ||||
Financial assets: | ||||
Loans held for sale, at fair value | 208,752 | 176,525 | ||
Corporate bonds | 441 | 450 | ||
Other secured borrowings: | ||||
Senior secured term loan | 324,643 | 227,449 | ||
Senior notes: | ||||
Senior unsecured notes | 13,821 | 119,258 | ||
Senior secured notes | 256,201 | 306,889 | ||
Derivative financial instrument assets (liabilities), at fair value | ||||
Interest rate lock commitments | 4,878 | 3,871 | ||
TBA / Forward mortgage-backed securities (MBS) trades - MSR hedging | 1,121 | 0 | ||
Level 3 | Carrying Value | ||||
Financial assets: | ||||
Loans held for sale, at lower of cost or fair value | 66,517 | 66,097 | ||
Loans held for investment | 6,269,596 | 5,472,199 | ||
Advances (including match funded) | 1,056,523 | 1,186,676 | ||
Receivables, net | 201,220 | 198,262 | ||
Mortgage-backed securities, at fair value | 2,075 | 1,502 | ||
Financial liabilities: | ||||
Match funded liabilities | 679,109 | 778,284 | ||
Financing liabilities: | ||||
HMBS-related borrowings | 6,063,435 | 5,380,448 | ||
Other secured borrowings: | ||||
Other | 703,033 | 221,236 | ||
Derivative financial instrument assets (liabilities), at fair value | ||||
Interest rate caps | 0 | 678 | ||
Mortgage servicing rights: | ||||
Mortgage servicing rights, at fair value | 1,486,395 | 1,457,149 | ||
Level 3 | Carrying Value | Loans Held for Investments - Restricted for Securitization Investors | ||||
Financial assets: | ||||
Loans held for investment | 23,342 | 26,520 | ||
Level 3 | Carrying Value | Financing Liability - MSRs Pledged | ||||
Financing liabilities: | ||||
Other financing liabilities | 950,593 | 1,032,856 | ||
Level 3 | Carrying Value | Financing Liability Owed to Securitization Investors | ||||
Financing liabilities: | ||||
Other financing liabilities | 22,002 | 24,815 | ||
Level 3 | Carrying Value | Other Financing Liabilities With Unrelated Parties | ||||
Financing liabilities: | ||||
Other financing liabilities | 0 | 4,419 | ||
Level 3 | Fair Value | ||||
Financial assets: | ||||
Loans held for sale, at lower of cost or fair value | 66,517 | 66,097 | ||
Loans held for investment | 6,269,596 | 5,472,199 | ||
Advances (including match funded) | 1,056,523 | 1,186,676 | ||
Receivables, net | 201,220 | 198,262 | ||
Mortgage-backed securities, at fair value | 2,075 | 1,502 | ||
Financial liabilities: | ||||
Match funded liabilities | 679,507 | 776,485 | ||
Financing liabilities: | ||||
HMBS-related borrowings | 6,063,435 | 5,380,448 | ||
Other secured borrowings: | ||||
Other | 686,146 | 204,864 | ||
Derivative financial instrument assets (liabilities), at fair value | ||||
Interest rate caps | 0 | 678 | ||
Mortgage servicing rights: | ||||
Mortgage servicing rights, at fair value | 1,486,395 | 1,457,149 | ||
Level 3 | Fair Value | Loans Held for Investments - Restricted for Securitization Investors | ||||
Financial assets: | ||||
Loans held for investment | 23,342 | 26,520 | ||
Level 3 | Fair Value | Financing Liability - MSRs Pledged | ||||
Financing liabilities: | ||||
Other financing liabilities | 950,593 | 1,032,856 | ||
Level 3 | Fair Value | Financing Liability Owed to Securitization Investors | ||||
Financing liabilities: | ||||
Other financing liabilities | 22,002 | 24,815 | ||
Level 3 | Fair Value | Other Financing Liabilities With Unrelated Parties | ||||
Financing liabilities: | ||||
Other financing liabilities | 0 | 4,419 | ||
Level 1 | Carrying Value | ||||
Financial assets: | ||||
U.S. Treasury notes | 0 | 1,064 | ||
Derivative financial instrument assets (liabilities), at fair value | ||||
Forward mortgage-backed securities trades | (92) | (4,983) | ||
Level 1 | Fair Value | ||||
Financial assets: | ||||
U.S. Treasury notes | 0 | 1,064 | ||
Derivative financial instrument assets (liabilities), at fair value | ||||
Forward mortgage-backed securities trades | $ (92) | $ (4,983) |
Fair Value - Summary of Reconci
Fair Value - Summary of Reconciliation of the Changes in Fair Value of Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Jan. 18, 2018 | Sep. 01, 2017 | Jan. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Total realized and unrealized gains and (losses): | ||||||
Included in earnings | $ 98,100 | $ 153,500 | $ 4,500 | |||
Proceeds from sale of MSRs accounted for as a financing | 0 | 279,586 | 54,601 | |||
Gain (loss) on sale of derivatives | (700) | (1,100) | 100 | |||
Loans Held for Investment | Level 3 | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Beginning balance | $ 4,715,831 | 5,472,199 | 4,715,831 | 3,565,716 | ||
Purchases, issuances, sales and settlements | ||||||
Purchases | 0 | 0 | 0 | |||
Issuances | 1,026,154 | 920,476 | 1,277,615 | |||
Sales | 0 | 0 | 0 | |||
Settlements | (558,720) | (400,521) | (444,388) | |||
Loans held for sale, at fair value | (1,892) | (1,039) | (3,803) | |||
Receivables, net | (327) | (158) | (3,583) | |||
Other assets | (513) | (411) | (1,929) | |||
Purchases, issuances, sales and settlements, total | 464,702 | 518,347 | 823,912 | |||
Total realized and unrealized gains and (losses): | ||||||
Included in earnings | 332,430 | 238,021 | 326,203 | |||
Included in earnings and other comprehensive income | 332,430 | 238,021 | 326,203 | |||
Transfers in and / or out of Level 3 | 0 | 0 | 0 | |||
Ending balance | 6,269,331 | 5,472,199 | 4,715,831 | |||
Loans Held for Investment | Level 3 | Calls and Other | ||||||
Total realized and unrealized gains and (losses): | ||||||
Included in earnings | 0 | 0 | 0 | |||
HMBS - Related Borrowings | Level 3 | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Beginning balance | (4,601,556) | (5,380,448) | (4,601,556) | (3,433,781) | ||
Purchases, issuances, sales and settlements | ||||||
Purchases | 0 | 0 | 0 | |||
Issuances | (962,113) | (948,917) | (1,281,543) | |||
Sales | 0 | 0 | 0 | |||
Settlements | 549,600 | 391,985 | 418,503 | |||
Loans held for sale, at fair value | 0 | 0 | 0 | |||
Receivables, net | 0 | 0 | ||||
Other assets | 0 | 0 | ||||
Purchases, issuances, sales and settlements, total | (412,513) | (556,932) | (863,040) | |||
Total realized and unrealized gains and (losses): | ||||||
Included in earnings | (270,473) | (221,960) | (304,735) | |||
Included in earnings and other comprehensive income | (270,473) | (221,960) | (304,735) | |||
Transfers in and / or out of Level 3 | 0 | 0 | 0 | |||
Ending balance | (6,063,434) | (5,380,448) | (4,601,556) | |||
HMBS - Related Borrowings | Level 3 | Calls and Other | ||||||
Total realized and unrealized gains and (losses): | ||||||
Included in earnings | 0 | 0 | 0 | |||
Loans Held for Investments - Restricted for Securitization Investors | Level 3 | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Beginning balance | 0 | 26,520 | 0 | |||
Purchases, issuances, sales and settlements | ||||||
Purchases | 0 | |||||
Issuances | 0 | |||||
Sales | 0 | |||||
Settlements | (3,178) | (1,853) | ||||
Loans held for sale, at fair value | 0 | |||||
Receivables, net | 0 | |||||
Other assets | 0 | |||||
Purchases, issuances, sales and settlements, total | (3,178) | 26,520 | ||||
Total realized and unrealized gains and (losses): | ||||||
Included in earnings | 0 | |||||
Included in earnings and other comprehensive income | 0 | 0 | ||||
Transfers in and / or out of Level 3 | 0 | |||||
Ending balance | 23,342 | 26,520 | 0 | |||
Loans Held for Investments - Restricted for Securitization Investors | Level 3 | Calls and Other | ||||||
Total realized and unrealized gains and (losses): | ||||||
Included in earnings | 0 | |||||
Financing Liability Owed to Securitization Investors | Level 3 | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Beginning balance | 0 | (24,815) | 0 | |||
Purchases, issuances, sales and settlements | ||||||
Purchases | 0 | |||||
Issuances | 0 | |||||
Sales | 0 | |||||
Settlements | 2,813 | 1,828 | ||||
Loans held for sale, at fair value | 0 | |||||
Receivables, net | 0 | |||||
Other assets | 0 | |||||
Purchases, issuances, sales and settlements, total | 2,813 | (24,815) | ||||
Total realized and unrealized gains and (losses): | ||||||
Included in earnings | 0 | |||||
Included in earnings and other comprehensive income | 0 | 0 | ||||
Transfers in and / or out of Level 3 | 0 | |||||
Ending balance | (22,002) | (24,815) | 0 | |||
Financing Liability Owed to Securitization Investors | Level 3 | Calls and Other | ||||||
Total realized and unrealized gains and (losses): | ||||||
Included in earnings | 0 | |||||
Mortgage Backed Securities | Level 3 | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Beginning balance | 1,592 | 1,502 | 1,592 | 8,342 | ||
Purchases, issuances, sales and settlements | ||||||
Purchases | 0 | 0 | 0 | |||
Issuances | 0 | 0 | 0 | |||
Sales | 0 | 0 | 0 | |||
Settlements | 0 | 0 | 0 | |||
Loans held for sale, at fair value | 0 | 0 | 0 | |||
Receivables, net | 0 | 0 | ||||
Other assets | 0 | 0 | ||||
Purchases, issuances, sales and settlements, total | 0 | 0 | 0 | |||
Total realized and unrealized gains and (losses): | ||||||
Included in earnings | 573 | (90) | (6,750) | |||
Included in earnings and other comprehensive income | 573 | (90) | (6,750) | |||
Transfers in and / or out of Level 3 | 0 | 0 | 0 | |||
Ending balance | 2,075 | 1,502 | 1,592 | |||
Mortgage Backed Securities | Level 3 | Calls and Other | ||||||
Total realized and unrealized gains and (losses): | ||||||
Included in earnings | 0 | 0 | 0 | |||
Financing Liability - MSRs Pledged | Level 3 | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Beginning balance | (508,291) | (1,032,856) | (508,291) | (477,707) | ||
Purchases, issuances, sales and settlements | ||||||
Purchases | (1,276) | (667) | 0 | |||
Recognized (assumed) in connection with the acquisition of PHH | (481,020) | |||||
Issuances | 0 | (279,586) | (54,601) | |||
Sales | (44) | 0 | 0 | |||
Settlements | 214,364 | 211,766 | 59,190 | |||
Loans held for sale, at fair value | 0 | 0 | 0 | |||
Receivables, net | 0 | 0 | ||||
Other assets | 0 | 0 | ||||
Purchases, issuances, sales and settlements, total | 213,044 | (549,507) | 4,589 | |||
Total realized and unrealized gains and (losses): | ||||||
Included in earnings | (152,986) | 19,269 | (41,282) | |||
Included in earnings and other comprehensive income | (130,781) | 24,942 | (35,173) | |||
Transfers in and / or out of Level 3 | 0 | 0 | 0 | |||
Ending balance | (950,593) | (1,032,856) | (508,291) | |||
Financing Liability - MSRs Pledged | Level 3 | Calls and Other | ||||||
Total realized and unrealized gains and (losses): | ||||||
Included in earnings | 22,205 | 5,673 | 6,109 | |||
Derivatives | Level 3 | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Beginning balance | 2,056 | 678 | 2,056 | 1,836 | ||
Purchases, issuances, sales and settlements | ||||||
Purchases | 0 | 95 | 655 | |||
Issuances | 0 | 0 | 0 | |||
Sales | 0 | 0 | 0 | |||
Settlements | 0 | (371) | (445) | |||
Loans held for sale, at fair value | 0 | 0 | 0 | |||
Receivables, net | 0 | 0 | ||||
Other assets | 0 | 0 | ||||
Purchases, issuances, sales and settlements, total | 0 | (276) | 210 | |||
Total realized and unrealized gains and (losses): | ||||||
Included in earnings | (678) | (1,102) | 10 | |||
Included in earnings and other comprehensive income | (678) | (1,102) | 10 | |||
Transfers in and / or out of Level 3 | 0 | 0 | 0 | |||
Ending balance | 0 | 678 | 2,056 | |||
Derivatives | Level 3 | Calls and Other | ||||||
Total realized and unrealized gains and (losses): | ||||||
Included in earnings | 0 | 0 | 0 | |||
Mortgage Servicing Rights | Level 3 | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Beginning balance | 671,962 | 1,457,149 | 671,962 | 679,256 | ||
Purchases, issuances, sales and settlements | ||||||
Purchases | 162,300 | 13,712 | 0 | |||
Recognized (assumed) in connection with the acquisition of PHH | 518,127 | |||||
Issuances | 0 | 0 | (2,214) | |||
Sales | (4,344) | (6,240) | (540) | |||
Settlements | (7,309) | (5,880) | 0 | |||
Loans held for sale, at fair value | 0 | 0 | 0 | |||
Receivables, net | 0 | 0 | ||||
Other assets | 0 | 0 | ||||
Purchases, issuances, sales and settlements, total | 150,647 | 938,644 | (2,754) | |||
Total realized and unrealized gains and (losses): | ||||||
Included in earnings | (121,401) | (153,457) | (4,540) | |||
Included in earnings and other comprehensive income | (121,401) | (153,457) | (4,540) | |||
Transfers in and / or out of Level 3 | 0 | 0 | 0 | |||
Ending balance | 1,486,395 | 1,457,149 | 671,962 | |||
Mortgage Servicing Rights | Level 3 | Calls and Other | ||||||
Total realized and unrealized gains and (losses): | ||||||
Included in earnings | 0 | 0 | $ 0 | |||
Loans Held for Investments - Restricted for Securitization Investors | Level 3 | ||||||
Purchases, issuances, sales and settlements | ||||||
Consolidation of mortgage-backed securitization trusts | 28,373 | |||||
Financing Liability Owed to Securitization Investors | Level 3 | ||||||
Purchases, issuances, sales and settlements | ||||||
Consolidation of mortgage-backed securitization trusts | (26,643) | |||||
Servicing Contracts | Level 3 | ||||||
Purchases, issuances, sales and settlements | ||||||
Transfer from MSRs carried at amortized cost | 418,925 | |||||
Loans Held for Investment | ||||||
Total realized and unrealized gains and (losses): | ||||||
Included in earnings | $ 12,200 | |||||
NRZ | ||||||
Total realized and unrealized gains and (losses): | ||||||
Proceeds from sale of MSRs accounted for as a financing | $ 279,600 | $ 54,600 | $ 279,600 | $ 54,600 | ||
Transfers upon receipt of consents mortgage servicing rights | $ 15,900,000 |
Fair Value - Schedule of Signif
Fair Value - Schedule of Significant Assumptions used in Valuation (Details) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) |
Measurement Input, Expected Term | Loans Held for Investment | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement inputs | 6 | 5.90 |
Measurement Input, Expected Term | Automotive Dealer Financing Notes | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement inputs | 0.22 | |
Measurement Input, Expected Term | HMBS - Related Borrowings | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement inputs | 6 | 5.90 |
Measurement Input, Prepayment Rate | Loans Held for Investment | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement inputs | 0.146 | 0.147 |
Measurement Input, Prepayment Rate | Fair Value Agency Mortgage Servicing Rights | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement inputs | 0.117 | 0.085 |
Measurement Input, Prepayment Rate | Fair Value Non-Agency Mortgage Servicing Rights | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement inputs | 0.122 | 0.154 |
Measurement Input, Prepayment Rate | HMBS - Related Borrowings | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement inputs | 0.146 | 0.147 |
Measurement Input, Prepayment Rate | Mortgage Servicing Rights Pledged | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement inputs | 0.119 | 0.139 |
Measurement Input, Default Rate | Fair Value Agency Mortgage Servicing Rights | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement inputs | 0.032 | 0.066 |
Measurement Input, Default Rate | Fair Value Non-Agency Mortgage Servicing Rights | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement inputs | 0.273 | 0.271 |
Measurement Input, Default Rate | Mortgage Servicing Rights Pledged | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement inputs | 0.203 | 0.203 |
Measurement Input, Discount Rate | Loans Held for Investment | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement inputs | 0.028 | 0.034 |
Measurement Input, Discount Rate | Fair Value Agency Mortgage Servicing Rights | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement inputs | 0.093 | 0.091 |
Measurement Input, Discount Rate | Fair Value Non-Agency Mortgage Servicing Rights | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement inputs | 0.113 | 0.128 |
Measurement Input, Discount Rate | HMBS - Related Borrowings | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement inputs | 0.027 | 0.0334 |
Measurement Input, Discount Rate | Mortgage Servicing Rights Pledged | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement inputs | 0.107 | 0.120 |
Measurement Input, Weighted Average Cost To Service, In USD Per Service | Fair Value Agency Mortgage Servicing Rights | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement inputs | 85 | 90 |
Measurement Input, Weighted Average Cost To Service, In USD Per Service | Fair Value Non-Agency Mortgage Servicing Rights | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement inputs | 277 | 297 |
Measurement Input, Weighted Average Cost To Service, In USD Per Service | Mortgage Servicing Rights Pledged | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement inputs | 223 | 234 |
5-Year Swap Rate | Measurement Input, Advance Financing Cost, Basis Spread On Variable Rate | Fair Value Non-Agency Mortgage Servicing Rights | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement inputs | 0.02 | 0.0275 |
5-Year Swap Rate | Measurement Input, Advance Financing Cost, Basis Spread On Variable Rate | Mortgage Servicing Rights Pledged | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement inputs | 0.0200 | 0.0275 |
5-Year Swap Rate | Measurement Input, Interest Rate For Computing Float Earnings, Basis Spread On Variable Rate | Fair Value Non-Agency Mortgage Servicing Rights | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement inputs | 0.0050 | 0.0050 |
5-Year Swap Rate | Measurement Input, Interest Rate For Computing Float Earnings, Basis Spread On Variable Rate | Mortgage Servicing Rights Pledged | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement inputs | 0.0050 | 0.005 |
Minimum | Measurement Input, Expected Term | Loans Held for Investment | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement inputs | 2.40 | 3 |
Minimum | Measurement Input, Expected Term | HMBS - Related Borrowings | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement inputs | 2.40 | 3 |
Minimum | Measurement Input, Prepayment Rate | Loans Held for Investment | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement inputs | 0.0780 | 0.068 |
Minimum | Measurement Input, Prepayment Rate | HMBS - Related Borrowings | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement inputs | 0.0780 | 0.068 |
Maximum | Measurement Input, Expected Term | Loans Held for Investment | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement inputs | 7.80 | 7.60 |
Maximum | Measurement Input, Expected Term | HMBS - Related Borrowings | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement inputs | 7.80 | 7.60 |
Maximum | Measurement Input, Prepayment Rate | Loans Held for Investment | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement inputs | 0.2830 | 0.384 |
Maximum | Measurement Input, Prepayment Rate | HMBS - Related Borrowings | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement inputs | 0.2830 | 0.384 |
Fair Value - Sensitivity Analys
Fair Value - Sensitivity Analysis (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Fair Value Disclosures [Abstract] | |
Weighted average prepayment speeds, 10% | $ (116,951) |
Weighted average prepayment speeds, 20% | (224,689) |
Discount rate (Option-adjusted spread), 10% | (49,463) |
Discount rate (Option-adjusted spread), 20% | $ (95,885) |
Loans Held for Sale - Summary o
Loans Held for Sale - Summary of Activity in Balance of Loans Held for Sale, at Fair Value (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Movement In Loans Held For Sale At Fair Value [Roll Forward] | |||
Beginning balance | $ 176,525 | $ 214,262 | $ 284,632 |
Originations and purchases | 1,168,885 | 944,627 | 2,678,372 |
Proceeds from sales | (1,124,247) | (1,019,211) | (2,785,422) |
Principal collections | (23,116) | (20,774) | (4,867) |
Acquired in connection with the acquisition of PHH | 0 | 42,324 | 0 |
Loans held for investment, at fair value | 1,892 | 1,038 | 3,803 |
Receivables | (2,480) | (1,132) | 0 |
Real estate owned (Other assets) | (2,520) | (1,886) | 0 |
Gain on sale of loans | 25,253 | 34,724 | 35,429 |
(Decrease) increase in fair value of loans | (589) | (13,435) | 151 |
Other | (10,851) | (4,012) | 2,164 |
Ending balance | $ 208,752 | $ 176,525 | $ 214,262 |
Loans Held for Sale - Summary_2
Loans Held for Sale - Summary of Activity in Balance of Loans Held for Sale, at Fair Value (Footnote) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Receivables [Abstract] | |||
Fair value adjustments of loans held-for-sale | $ (7.8) | $ (7.2) | $ 5 |
Loans Held for Sale - Summary_3
Loans Held for Sale - Summary of Activity in Balance of Loans Held for Sale, at Lower of Cost or Fair Value (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Movement In Loans Held For Sale At Fair Value [Roll Forward] | |||
Beginning balance | $ 66,097 | $ 24,096 | $ 29,374 |
Purchases | 320,089 | 770,563 | 1,016,791 |
Proceeds from sales | (221,471) | (569,718) | (861,569) |
Principal collections | (11,304) | (15,413) | (10,207) |
Receivables, net | (104,635) | (155,586) | (171,797) |
REO (Other assets) | (4,116) | (2,355) | (875) |
Gain on sale of loans | 4,974 | 3,659 | 11,683 |
Decrease (increase) in valuation allowance | 4,926 | (4,251) | 2,746 |
Other | 11,957 | 15,102 | 7,950 |
Ending balance | $ 66,517 | $ 66,097 | $ 24,096 |
Loans Held for Sale - Summary_4
Loans Held for Sale - Summary of Activity in Balance of Loans Held for Sale, at Lower of Cost or Fair Value (Footnote) (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Ginnie Mae | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans held for sale, at lower of cost or fair value | $ 60.6 | $ 51.8 | $ 19.6 |
Loans Held for Sale - Summary_5
Loans Held for Sale - Summary of Changes in Valuation Allowance of Loans Held for Sale (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Allowance for Loan and Lease Losses [Roll Forward] | |||
Beginning balance | $ 11,569 | $ 7,318 | $ 10,064 |
Provision | 2,537 | 4,033 | 3,109 |
Transfer from Liability for indemnification obligations (Other liabilities) | 403 | 2,021 | 3,246 |
Sales of loans | (7,866) | (1,824) | (9,415) |
Other | 0 | 21 | 314 |
Ending balance | $ 6,643 | $ 11,569 | $ 7,318 |
Loans Held for Sale - Summary_6
Loans Held for Sale - Summary of Activity in Gain on Loans Held for Sale, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Gain on sales of loans, net | $ 37,532 | $ 45,287 | $ 68,028 |
Change in fair value of IRLCs | 756 | 3,809 | (3,089) |
Change in fair value of loans held for sale | 3,005 | (11,569) | 1,475 |
Loss on economic hedge instruments | (2,689) | 136 | (8,529) |
Other | (304) | (327) | (702) |
Gain on loans held for sale, net | 38,300 | 37,336 | 57,183 |
MSRs Retained on Transfers of Forward Loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Gain on sales of loans, net | 7,458 | 7,412 | 20,900 |
Forward Mortgage Loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Gain on sales of loans, net | 25,310 | 34,216 | 35,445 |
Gain on Sale of Repurchased Ginnie Mae Loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Gain on sales of loans, net | $ 4,764 | $ 3,659 | $ 11,683 |
Advances - Schedule of Advance
Advances - Schedule of Advance Payments by Financial Institution on Foreclosed Properties (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Advances On Behalf of Borrowers [Line Items] | ||||
Advances | $ 264,458 | $ 272,641 | ||
Allowance for losses | (9,925) | (23,259) | $ (16,465) | $ (37,952) |
Advances, net | 254,533 | 249,382 | $ 211,793 | $ 257,882 |
Principal and interest | ||||
Advances On Behalf of Borrowers [Line Items] | ||||
Advances | 80,229 | 43,671 | ||
Taxes and insurance | ||||
Advances On Behalf of Borrowers [Line Items] | ||||
Advances | 92,315 | 160,373 | ||
Foreclosures, bankruptcy, REO and other | ||||
Advances On Behalf of Borrowers [Line Items] | ||||
Advances | $ 91,914 | $ 68,597 |
Advances - Schedule of Activity
Advances - Schedule of Activity in Advances (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Advances [Roll Forward] | |||
Advances, beginning balance | $ 249,382 | $ 211,793 | $ 257,882 |
Asset acquisition | 1,457 | 0 | 0 |
Acquired in connection with the acquisition of PHH | 0 | 96,163 | 0 |
Transfers to match funded advances | 0 | (71,623) | 0 |
Sales | (11,791) | (32,081) | (444) |
Collections of advances, charge-offs and other, net | 2,151 | 51,924 | (67,132) |
Net (increase) decrease in allowance for losses | 13,334 | (6,794) | 21,487 |
Advances, ending balance | $ 254,533 | $ 249,382 | $ 211,793 |
Advances - Schedule of Change i
Advances - Schedule of Change in Allowance for Losses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Beginning balance | $ 23,259 | $ 16,465 | $ 37,952 |
Provision | 3,220 | 5,732 | 21,429 |
Net charge-offs and other | (16,554) | 1,062 | (42,916) |
Ending balance | 9,925 | $ 23,259 | $ 16,465 |
Sold Advances | |||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Provision | $ 18,000 |
Match Funded Assets - Schedule
Match Funded Assets - Schedule of Match Funded Advances on Residential Loans (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Match Funded Advances [Line Items] | ||
Match funded assets | $ 801,990 | $ 937,294 |
Residential Mortgage | Principal and interest | ||
Match Funded Advances [Line Items] | ||
Match funded assets | 334,617 | 412,897 |
Residential Mortgage | Taxes and insurance | ||
Match Funded Advances [Line Items] | ||
Match funded assets | 330,068 | 374,853 |
Residential Mortgage | Foreclosures, bankruptcy, REO and other | ||
Match Funded Advances [Line Items] | ||
Match funded assets | $ 137,305 | $ 149,544 |
Match Funded Assets - Schedul_2
Match Funded Assets - Schedule of Activity in Match Funded Advances (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Match Funded Advances [Roll Forward] | |||
Decrease (increase) in allowance for losses | $ 13,334 | $ (6,794) | $ 21,487 |
Residential Mortgage | |||
Match Funded Advances [Roll Forward] | |||
Beginning balance | 937,294 | 1,144,600 | 1,451,964 |
Transfers from advances | 71,623 | ||
Sales | (691) | ||
New advances (collections), net | (135,304) | (278,929) | (306,673) |
Ending balance | 801,990 | 937,294 | 1,144,600 |
Automotive Dealer Financing Notes | |||
Match Funded Advances [Roll Forward] | |||
Beginning balance | $ 0 | 32,757 | 0 |
Transfer (to) from Other assets | (36,896) | 25,180 | |
New advances (collections), net | 1,504 | 10,212 | |
Decrease (increase) in allowance for losses | 2,635 | (2,635) | |
Ending balance | $ 0 | $ 32,757 |
Mortgage Servicing - Summary of
Mortgage Servicing - Summary of Activity in Carrying Value of Amortization Method Servicing Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Servicing Asset at Amortized Cost, Balance [Roll Forward] | ||||
Fair value election - transfer of MSRs carried at fair value | $ 0 | $ (336,882) | $ 0 | |
Pledged MSR liability expense | (372,089) | (171,670) | (236,311) | |
Estimated fair value at end of year | 1,486,395 | 1,457,149 | 671,962 | $ 679,256 |
Mortgage Servicing Rights - Amortized Costs | ||||
Servicing Asset at Amortized Cost, Balance [Roll Forward] | ||||
Beginning balance, MSRs | $ 0 | 336,882 | 363,722 | |
Fair value election - transfer of MSRs carried at fair value | (361,670) | 0 | ||
Additions recognized in connection with asset acquisitions | 0 | 1,658 | ||
Additions recognized on the sale of mortgage loans | 0 | 20,738 | ||
Sales | 0 | (1,066) | ||
Servicing transfers and adjustments | 0 | 252 | ||
Mortgage servicing rights, gross | (24,788) | 385,304 | ||
Valuation allowance of MSRs | 24,788 | 3,366 | ||
Pledged MSR liability expense | 0 | (51,788) | ||
Ending balance, MSRs | 0 | 336,882 | ||
Estimated fair value at end of year | $ 0 | $ 418,745 |
Mortgage Servicing - Summary _2
Mortgage Servicing - Summary of Activity in Carrying Value of Amortization Method Servicing Assets (Footnote) (Details) - USD ($) $ in Thousands | Jan. 01, 2018 | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value Agency Mortgage Servicing Rights | Retained Earnings (Accumulated Deficit) | |||
Servicing Asset at Amortized Cost [Line Items] | |||
Cumulative effect of fair value election | $ 82,000 | $ 82,043 | |
Mortgage Servicing Rights - Amortized Costs | |||
Servicing Asset at Amortized Cost [Line Items] | |||
Valuation allowance of MSRs | $ 24,788 | $ 3,366 | |
Mortgage Servicing Rights - Amortized Costs | Retained Earnings (Accumulated Deficit) | |||
Servicing Asset at Amortized Cost [Line Items] | |||
Tax effect of adjustment on retained earnings | $ 6,800 | ||
Impaired Government Insured Stratum | |||
Servicing Asset at Amortized Cost [Line Items] | |||
Valuation allowance of MSRs | $ 24,800 |
Mortgage Servicing - Summary _3
Mortgage Servicing - Summary of Activity Related to Fair Value Servicing Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Servicing Asset at Fair Value, Amount [Roll Forward] | |||
Beginning balance | $ 1,457,149 | $ 671,962 | $ 679,256 |
Fair value election - Transfer from MSRs carried at amortized cost | 0 | 336,882 | 0 |
Cumulative effect of fair value election | 0 | 82,043 | 0 |
Sales | (4,344) | (6,240) | (540) |
Recognized on the sale of residential mortgage loans | 8,795 | 8,279 | 162 |
Recognized in connection with the acquisition of PHH | 0 | 518,127 | 0 |
Purchase of MSRs | 153,505 | 5,433 | 0 |
Servicing transfers and adjustments | (7,309) | (5,880) | (2,376) |
Changes in valuation inputs or other assumptions | 93,953 | 5,853 | 86,964 |
Realization of expected future cash flows and other changes | (215,354) | (159,310) | (91,504) |
Ending balance | 1,486,395 | 1,457,149 | 671,962 |
Fair Value Agency Mortgage Servicing Rights | |||
Servicing Asset at Fair Value, Amount [Roll Forward] | |||
Beginning balance | 865,587 | 11,960 | 13,357 |
Fair value election - Transfer from MSRs carried at amortized cost | 0 | 336,882 | 0 |
Cumulative effect of fair value election | 0 | 82,043 | 0 |
Sales | (3,578) | (4,748) | 0 |
Recognized on the sale of residential mortgage loans | 8,795 | 8,279 | 162 |
Recognized in connection with the acquisition of PHH | 0 | 494,348 | 0 |
Purchase of MSRs | 153,505 | 5,433 | 0 |
Servicing transfers and adjustments | 0 | (1,047) | 0 |
Changes in valuation inputs or other assumptions | (171,050) | 11,558 | 243 |
Realization of expected future cash flows and other changes | (139,253) | (79,121) | (1,802) |
Ending balance | 714,006 | 865,587 | 11,960 |
Fair Value Non-Agency Mortgage Servicing Rights | |||
Servicing Asset at Fair Value, Amount [Roll Forward] | |||
Beginning balance | 591,562 | 660,002 | 665,899 |
Fair value election - Transfer from MSRs carried at amortized cost | 0 | 0 | 0 |
Cumulative effect of fair value election | 0 | 0 | 0 |
Sales | (766) | (1,492) | (540) |
Recognized on the sale of residential mortgage loans | 0 | 0 | 0 |
Recognized in connection with the acquisition of PHH | 0 | 23,779 | 0 |
Purchase of MSRs | 0 | 0 | 0 |
Servicing transfers and adjustments | (7,309) | (4,833) | (2,376) |
Changes in valuation inputs or other assumptions | 265,003 | (5,705) | 86,721 |
Realization of expected future cash flows and other changes | (76,101) | (80,189) | (89,702) |
Ending balance | $ 772,389 | $ 591,562 | $ 660,002 |
Mortgage Servicing - Schedule o
Mortgage Servicing - Schedule of Composition of Primary Servicing and Subservicing Portfolios by Type of Property Serviced as Measured by UPB (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Servicing Assets at Fair Value [Line Items] | |||
Servicing | $ 76,657,932 | $ 72,378,693 | $ 75,469,327 |
Subservicing | 17,120,905 | 53,104,560 | 2,063,669 |
NRZ | 118,587,594 | 130,517,237 | 101,819,557 |
Assets Serviced | 212,366,431 | $ 256,000,490 | $ 179,352,553 |
Third-party Consents Received and MSR Transferred | |||
Servicing Assets at Fair Value [Line Items] | |||
NRZ | 57,700,000 | ||
Unrelated Party | NRZ | |||
Servicing Assets at Fair Value [Line Items] | |||
Unpaid principal balance on servicing assets acquired | $ 6,600,000 |
Mortgage Servicing - Schedule_2
Mortgage Servicing - Schedule of Composition of Primary Servicing and Subservicing Portfolios by Type of Property Serviced as Measured by UPB (Footnote) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Schedule of Servicing and Subservicing Portfolio [Line Items] | |||
Servicing | $ 76,657,932 | $ 72,378,693 | $ 75,469,327 |
PHH Corporation | NRZ | |||
Schedule of Servicing and Subservicing Portfolio [Line Items] | |||
Servicing | $ 6,300,000 | $ 51,300,000 | $ 42,300,000 |
Mortgage Servicing - Narrative
Mortgage Servicing - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Servicing Asset at Amortized Cost [Line Items] | |||
UPB of portfolio loans acquired | $ 14,600 | $ 144.1 | |
UPB of MSRs sold | 76,100 | ||
Float balances | 1,700 | 1,700 | $ 1,500 |
Agency and Non-Agency Mortgage Servicing Rights | |||
Servicing Asset at Amortized Cost [Line Items] | |||
UPB of MSRs sold | 140.8 | $ 901.3 | $ 200 |
NRZ | |||
Servicing Asset at Amortized Cost [Line Items] | |||
UPB of MSRs sold | $ 18,500 | ||
Servicing Portfolio | Customer Concentration Risk | NRZ | |||
Servicing Asset at Amortized Cost [Line Items] | |||
Concentration risk (percentage) | 20.00% |
Mortgage Servicing - Summary _4
Mortgage Servicing - Summary of Geographic Distributions of UPB and Count of Residential Loans and Real Estate Serviced (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019USD ($)loan | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Amount | $ 212,366,431 | $ 256,000,490 | $ 179,352,553 |
Residential Mortgage | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Amount | $ 212,366,431 | ||
Count | loan | 1,419,943 | ||
California | Residential Mortgage | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Amount | $ 47,350,699 | ||
Count | loan | 189,959 | ||
New York | Residential Mortgage | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Amount | $ 19,557,621 | ||
Count | loan | 90,805 | ||
Florida | Residential Mortgage | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Amount | $ 16,366,372 | ||
Count | loan | 121,875 | ||
New Jersey | Residential Mortgage | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Amount | $ 10,921,867 | ||
Count | loan | 57,182 | ||
Texas | Residential Mortgage | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Amount | $ 10,073,637 | ||
Count | loan | 100,868 | ||
Other | Residential Mortgage | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Amount | $ 108,096,235 | ||
Count | loan | 859,254 |
Mortgage Servicing - Schedule_3
Mortgage Servicing - Schedule of Components of Servicing and Subservicing Fees (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Transfers and Servicing [Abstract] | |||
Servicing | $ 227,490 | $ 227,639 | $ 259,640 |
Subservicing | 15,459 | 8,904 | 7,775 |
NRZ | 577,015 | 539,039 | 549,411 |
Servicing and Subservicing fees, total | 819,964 | 775,582 | 816,826 |
Late charges | 57,194 | 61,453 | 61,763 |
Home Affordable Modification Program (HAMP) fees | 5,538 | 14,312 | 43,310 |
Custodial accounts (float earnings) | 47,562 | 40,115 | 25,237 |
Loan collection fees | 15,539 | 18,392 | 22,770 |
Other | 29,710 | 27,229 | 21,691 |
Fees, total | $ 975,507 | $ 937,083 | $ 991,597 |
Rights to MSRs - Schedule of As
Rights to MSRs - Schedule of Assets, Liabilities, Servicing and Subservicing Fees Related to NRZ Agreements (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Servicing Liabilities at Fair Value [Line Items] | |||||
Mortgage servicing rights, at fair value | $ 1,486,395 | $ 1,457,149 | $ 671,962 | $ 679,256 | |
Sales and transfers of MSRs | 24,167 | 23,757 | |||
Due to NRZ | 63,596 | 53,001 | |||
Other financing liabilities | 972,595 | 1,062,090 | |||
Changes in fair value | (152,986) | 19,269 | (41,282) | ||
Other | 2,435 | 2,850 | 1,796 | ||
Pledged MSR liability expense | 372,089 | 171,670 | 236,311 | ||
NRZ | |||||
Servicing Liabilities at Fair Value [Line Items] | |||||
Mortgage servicing rights, at fair value | 915,100 | 894,002 | 499,042 | ||
Sales and transfers of MSRs | 33,364 | 54,602 | 14,924 | ||
Due to NRZ | 63,596 | 53,001 | 98,493 | ||
Servicing fees collected on behalf of NRZ | 577,015 | 539,039 | 549,411 | ||
Less: Subservicing fee retained | 139,300 | 142,334 | 295,192 | ||
Net servicing fees remitted to NRZ | 437,700 | 396,705 | 254,219 | ||
Changes in fair value | 152,986 | (19,269) | 41,282 | ||
Runoff, settlement and other | 214,363 | 211,766 | 59,190 | ||
Other | 4,206 | ||||
Other | (6,000) | 0 | |||
Pledged MSR liability expense | 372,089 | 171,670 | 236,311 | ||
NRZ | Original Rights to MSRs Agreements | |||||
Servicing Liabilities at Fair Value [Line Items] | |||||
Changes in fair value | 229,198 | (171) | 83,300 | ||
Runoff, settlement and other | 48,729 | 58,837 | 57,264 | ||
NRZ | 2017 Agreements and New RMSR Agreements | |||||
Servicing Liabilities at Fair Value [Line Items] | |||||
Changes in fair value | 5,866 | (14,369) | (42,018) | ||
Runoff, settlement and other | 101,003 | 134,509 | 1,926 | ||
NRZ | PHH MSR Agreements | |||||
Servicing Liabilities at Fair Value [Line Items] | |||||
Changes in fair value | (82,078) | (4,729) | 0 | ||
Runoff, settlement and other | 64,631 | 18,420 | 0 | ||
Sale and Transfers of Mortgage Servicing Rights | NRZ | |||||
Servicing Liabilities at Fair Value [Line Items] | |||||
Sales and transfers of MSRs | 24,167 | 23,757 | 0 | ||
Advance Funding, Subservicing Fees and Reimbursable Expenses | NRZ | |||||
Servicing Liabilities at Fair Value [Line Items] | |||||
Sales and transfers of MSRs | 9,197 | 30,845 | 14,924 | ||
Original Rights to MSRs Agreements | NRZ | |||||
Servicing Liabilities at Fair Value [Line Items] | |||||
Other financing liabilities | 603,046 | 436,511 | 499,042 | ||
2017 Agreements and New RMSR Agreements | NRZ | |||||
Servicing Liabilities at Fair Value [Line Items] | |||||
Other financing liabilities | 35,400 | 138,854 | 9,249 | ||
PHH MSR Agreements | NRZ | |||||
Servicing Liabilities at Fair Value [Line Items] | |||||
Other financing liabilities | 312,102 | 457,491 | 0 | ||
Financing Liability - MSRs Pledged | |||||
Servicing Liabilities at Fair Value [Line Items] | |||||
Other financing liabilities | $ 950,593 | $ 1,032,856 | $ 508,291 | ||
Forecast | |||||
Servicing Liabilities at Fair Value [Line Items] | |||||
Runoff, settlement and other | $ 35,400 |
Rights to MSRs - Narrative (Det
Rights to MSRs - Narrative (Details) $ in Thousands | Jan. 18, 2018USD ($) | Sep. 01, 2017USD ($) | Jun. 16, 2017 | Jan. 31, 2018USD ($) | Dec. 31, 2019USD ($)loandaymonth | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Oct. 04, 2018USD ($) |
Servicing Assets at Fair Value [Line Items] | ||||||||
Proceeds from sale of mortgage servicing rights accounted for as financing | $ 0 | $ 279,586 | $ 54,601 | |||||
UPB of MSRs sold | 76,100,000 | |||||||
Initial term of subservicing agreement (years) | 3 years | |||||||
Service fee collected on behalf of counterparty | $ 577,015 | 539,039 | $ 549,411 | |||||
Automatic renewal term of subservicing agreement (years) | 1 year | |||||||
Months notice required of PMC for non-renewal of subservicing agreement | month | 9 | |||||||
PHH Corporation | ||||||||
Servicing Assets at Fair Value [Line Items] | ||||||||
Number of loans serviced under subservicing arrangement | loan | 278,909 | |||||||
Service fee collected on behalf of counterparty | $ 28,800 | 7,400 | ||||||
NRZ | ||||||||
Servicing Assets at Fair Value [Line Items] | ||||||||
Days notice required of NRZ for non-renewal of subservicing agreement | day | 180 | |||||||
NRZ | ||||||||
Servicing Assets at Fair Value [Line Items] | ||||||||
Proceeds from sale of mortgage servicing rights accounted for as financing | $ 279,600 | $ 54,600 | $ 279,600 | $ 54,600 | ||||
Term of extended subservicing agreement following initial term | 3 months | |||||||
UPB of MSRs sold | $ 18,500,000 | |||||||
NRZ | PHH Corporation | ||||||||
Servicing Assets at Fair Value [Line Items] | ||||||||
UPB of MSRs sold | 35,500,000 | |||||||
Unpaid principal balance on servicing assets acquired | $ 42,300,000 | |||||||
Unpaid principal balance on servicing assets and advances committed to sale | $ 2,700,000 | |||||||
Percentage of mortgage loans servicing that can be terminated | 25.00% | |||||||
Unrelated Party | NRZ | ||||||||
Servicing Assets at Fair Value [Line Items] | ||||||||
Unpaid principal balance on servicing assets acquired | $ 6,600,000 | |||||||
Customer Concentration Risk | Servicing Portfolio | NRZ | ||||||||
Servicing Assets at Fair Value [Line Items] | ||||||||
Concentration risk (percentage) | 20.00% |
Rights to MSRs - Financing Liab
Rights to MSRs - Financing Liability Rollforward (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Servicing Liability at Fair Value, Amount [Roll Forward] | ||
Beginning balance | $ 1,032,856 | $ 508,291 |
Additions | 1,276 | 667 |
Sales | 44 | |
Receipt of lump-sum cash payments | 279,586 | |
Ending balance | 950,593 | 1,032,856 |
Original Rights to MSRs Agreements | ||
Servicing Liability at Fair Value, Amount [Roll Forward] | ||
Beginning balance | 436,511 | 499,042 |
Changes in fair value: | 229,198 | (171) |
Runoff and settlement: | (48,730) | (58,837) |
Calls | (13,933) | (3,523) |
Ending balance | 603,046 | 436,511 |
2017 Agreements and New RMSR Agreements | ||
Servicing Liability at Fair Value, Amount [Roll Forward] | ||
Beginning balance | 138,854 | 9,249 |
Receipt of lump-sum cash payments | 279,586 | |
Changes in fair value: | 5,866 | (14,369) |
Runoff and settlement: | (101,003) | (134,509) |
Calls | (8,272) | (1,103) |
Ending balance | 35,445 | 138,854 |
PMC MSR Agreements | ||
Servicing Liability at Fair Value, Amount [Roll Forward] | ||
Beginning balance | 457,491 | 0 |
Additions | 1,276 | 667 |
Sales | 44 | |
Changes in fair value: | (82,078) | (4,729) |
Runoff and settlement: | (64,631) | (18,420) |
Calls | 0 | (1,047) |
Ending balance | $ 312,102 | 457,491 |
PHH Corporation | ||
Servicing Liability at Fair Value, Amount [Roll Forward] | ||
Additions | 481,020 | |
PHH Corporation | PMC MSR Agreements | ||
Servicing Liability at Fair Value, Amount [Roll Forward] | ||
Additions | $ 481,020 |
Receivables - Schedule of Recei
Receivables - Schedule of Receivables (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Receivables [Abstract] | ||
Government-insured loan claims | $ 122,557 | $ 105,258 |
Due from custodial accounts | 27,175 | 9,060 |
Sales and transfers of MSRs | 24,167 | 23,757 |
Advance funding, subservicing fees and reimbursable expenses | 9,197 | 30,845 |
Reimbursable expenses | 13,052 | 11,508 |
Other | 4,970 | 7,754 |
Servicing | 201,118 | 188,182 |
Income taxes receivable | 37,888 | 45,987 |
Other receivables | 20,086 | 17,672 |
Other receivables, gross | 259,092 | 251,841 |
Allowance for losses | (57,872) | (53,579) |
Receivables, total | $ 201,220 | $ 198,262 |
Receivables - Narrative (Detail
Receivables - Narrative (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Delinquent FHA or VA Insured Loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Allowance for losses related to defaulted FHA or VA insured loans | $ 56.9 | $ 52.5 |
Receivables Schedule of Changes
Receivables Schedule of Changes in Allowance for Loan Losses (Details) - Government Insured Loans Claims - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Allowance for Loan and Lease Losses [Roll Forward] | |||
Beginning balance | $ 52,497 | $ 53,340 | $ 53,258 |
Provision | 29,034 | 37,352 | 40,424 |
Net charge-offs and other | (24,663) | (38,195) | (40,342) |
Ending balance | $ 56,868 | $ 52,497 | $ 53,340 |
Premises and Equipment - Schedu
Premises and Equipment - Schedule of Premises and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Right-of-use assets | $ 31,329 | |
Premises and equipment, gross | 129,501 | $ 130,618 |
Less accumulated depreciation and amortization | (91,227) | (97,201) |
Premises and equipment, net | 38,274 | 33,417 |
Computer Software | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | 24,377 | 46,029 |
Computer Hardware | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | 32,747 | 34,240 |
Leasehold Improvements | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | 22,019 | 27,798 |
Buildings | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | 8,550 | 9,689 |
Office Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | 6,929 | 7,370 |
Furniture and Fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | 3,506 | 4,674 |
Other | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | $ 44 | $ 818 |
Other Assets - Schedule of Othe
Other Assets - Schedule of Other Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Other Assets [Abstract] | ||
Contingent loan repurchase asset | $ 492,900 | $ 302,581 |
Other prepaid expenses | 21,996 | 27,647 |
Prepaid representation, warranty and indemnification claims - Agency MSR sale | 15,173 | 15,173 |
Prepaid lender fees, net | 8,647 | 6,589 |
REO | 8,556 | 7,368 |
Derivatives, at fair value | 6,007 | 4,552 |
Deferred tax assets, net | 2,169 | 5,289 |
Security deposits | 2,163 | 2,278 |
Mortgage-backed securities, at fair value | 2,075 | 1,502 |
Interest-earning time deposits | 390 | 1,338 |
Other | 3,164 | 5,250 |
Other assets | $ 563,240 | $ 379,567 |
Borrowings - Schedule of Match
Borrowings - Schedule of Match Funded Liabilities (Details) - USD ($) | Dec. 31, 2019 | Aug. 14, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | |||
Available borrowing capacity | $ 288,394,000 | ||
Match funded liabilities | 679,109,000 | $ 778,284,000 | |
Ocwen Master Advance Receivables Trust (OMART) | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | $ 9,445,000 | ||
Weighted average interest rate (percentage) | 2.79% | 3.56% | |
Match funded liabilities | $ 660,555,000 | $ 751,559,000 | |
Advance Receivables Backed Notes - Series 2015-VF5 | |||
Debt Instrument [Line Items] | |||
Weighted average interest rate (percentage) | 1.36% | ||
Advance Receivables Backed Notes - Series 2015-VF5 | Ocwen Master Advance Receivables Trust (OMART) | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | $ 9,445,000 | ||
Weighted average interest rate (percentage) | 3.36% | 4.06% | |
Match funded liabilities | $ 190,555,000 | $ 216,559,000 | |
Advance Receivables Backed Notes - Series 2016-T2 | Ocwen Master Advance Receivables Trust (OMART) | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | $ 0 | ||
Weighted average interest rate (percentage) | 0.00% | 2.99% | |
Match funded liabilities | $ 0 | $ 235,000,000 | |
Advance Receivables Backed Notes, Series 2018-T1 | Ocwen Master Advance Receivables Trust (OMART) | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | $ 0 | ||
Weighted average interest rate (percentage) | 0.00% | 3.50% | |
Match funded liabilities | $ 0 | $ 150,000,000 | |
Advance Receivables Backed Notes, Series 2018-T2 | Ocwen Master Advance Receivables Trust (OMART) | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | $ 0 | ||
Weighted average interest rate (percentage) | 0.00% | 3.81% | |
Match funded liabilities | $ 0 | $ 150,000,000 | |
Advance Receivables Backed Notes, Series 2019-T1 | Ocwen Master Advance Receivables Trust (OMART) | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | $ 0 | ||
Weighted average interest rate (percentage) | 2.62% | 0.00% | |
Match funded liabilities | $ 185,000,000 | $ 185,000,000 | $ 0 |
Advance Receivables Backed Notes, Series 2019-T2 | Ocwen Master Advance Receivables Trust (OMART) | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | $ 0 | ||
Weighted average interest rate (percentage) | 2.53% | 0.00% | |
Match funded liabilities | $ 285,000,000 | $ 285,000,000 | $ 0 |
Advance Receivables Backed Notes, Series 2015-VF1 | |||
Debt Instrument [Line Items] | |||
Weighted average interest rate (percentage) | 1.57% | ||
Advance Receivables Backed Notes, Series 2015-VF1 | Total Ocwen Freddie Advance Funding (OFAF) | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | $ 41,446,000 | ||
Weighted average interest rate (percentage) | 3.53% | 5.03% | |
Match funded liabilities | $ 18,554,000 | $ 26,725,000 | |
Match Funded Liabilities | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | $ 50,891,000 | ||
Weighted average interest rate (percentage) | 2.81% | 3.61% | |
Match funded liabilities | $ 679,109,000 | $ 778,284,000 |
Borrowings - Schedule of Matc_2
Borrowings - Schedule of Match Funded Liabilities (Footnote) (Details) - USD ($) | Dec. 31, 2019 | Dec. 12, 2019 | Aug. 14, 2019 | Jul. 01, 2019 | Jun. 06, 2019 | Dec. 31, 2018 | Jul. 13, 2018 |
Debt Instrument [Line Items] | |||||||
Available borrowing capacity | $ 288,394,000 | ||||||
Maximum borrowing capacity | $ 300,000,000 | ||||||
Match funded liabilities | 679,109,000 | $ 778,284,000 | |||||
Current borrowing capacity | $ 0 | ||||||
Advance Receivables Backed Notes - Series 2015-VF5 | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 200,000,000 | $ 225,000,000 | |||||
Debt instrument, interest rate (percentage) | 1.36% | ||||||
Series 2016 and 2018 Term Notes | |||||||
Debt Instrument [Line Items] | |||||||
Current borrowing capacity | $ 470,000,000 | ||||||
Series 2016 and 2018 Term Notes | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Weighted average interest rate (percentage) | 2.57% | ||||||
Debt instrument, interest rate (percentage) | 2.42% | ||||||
Series 2016 and 2018 Term Notes | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, interest rate (percentage) | 4.44% | ||||||
Advance Receivables Backed Notes, Series 2015-VF1 | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 60,000,000 | $ 65,000,000 | |||||
Debt instrument, interest rate (percentage) | 1.57% | ||||||
LIBOR | |||||||
Debt Instrument [Line Items] | |||||||
1-Month LIBOR | 1.76% | 2.50% | |||||
Ocwen Master Advance Receivables Trust (OMART) | |||||||
Debt Instrument [Line Items] | |||||||
Available borrowing capacity | $ 9,445,000 | ||||||
Match funded liabilities | $ 660,555,000 | $ 751,559,000 | |||||
Debt instrument, interest rate (percentage) | 2.79% | 3.56% | |||||
Ocwen Master Advance Receivables Trust (OMART) | Advance Receivables Backed Notes - Series 2015-VF5 | |||||||
Debt Instrument [Line Items] | |||||||
Available borrowing capacity | $ 9,445,000 | ||||||
Match funded liabilities | $ 190,555,000 | $ 216,559,000 | |||||
Debt instrument, interest rate (percentage) | 3.36% | 4.06% | |||||
Ocwen Master Advance Receivables Trust (OMART) | Advance Receivables Backed Notes, Series 2019-T1 | |||||||
Debt Instrument [Line Items] | |||||||
Available borrowing capacity | $ 0 | ||||||
Match funded liabilities | $ 185,000,000 | 185,000,000 | $ 0 | ||||
Debt instrument, interest rate (percentage) | 2.62% | 0.00% | |||||
Ocwen Master Advance Receivables Trust (OMART) | Advance Receivables Backed Notes, Series 2019-T2 | |||||||
Debt Instrument [Line Items] | |||||||
Available borrowing capacity | $ 0 | ||||||
Match funded liabilities | $ 285,000,000 | $ 285,000,000 | $ 0 | ||||
Debt instrument, interest rate (percentage) | 2.53% | 0.00% |
Borrowings - Narrative (Details
Borrowings - Narrative (Details) - USD ($) | Dec. 05, 2016 | Dec. 31, 2019 | Dec. 31, 2018 |
Line of Credit Facility [Line Items] | |||
UPB of rights to MSRs sold | $ 76,100,000,000 | ||
Long-term debt, gross | 1,030,306,000 | $ 452,736,000 | |
NRZ | |||
Line of Credit Facility [Line Items] | |||
UPB of rights to MSRs sold | 18,500,000,000 | ||
Outstanding servicing advances | $ 700,000,000 | ||
SSTL | |||
Line of Credit Facility [Line Items] | |||
Percentage of loan to value | 40.00% | ||
Minimum unencumbered asset coverage ratio for period one (percentage) | 200.00% | ||
Minimum unencumbered asset coverage ratio for period two (percentage) | 225.00% | ||
Minimum unrestricted cash requirement | $ 125,000,000 | ||
Senior Notes | |||
Line of Credit Facility [Line Items] | |||
Long-term debt, gross | 313,052,000 | 449,942,000 | |
Minimum | |||
Line of Credit Facility [Line Items] | |||
Covenant liquidity requirement | $ 100,000,000 | ||
On or Before November 15, 2018 | Minimum | Senior Notes | |||
Line of Credit Facility [Line Items] | |||
Redemption period, notice | 30 days | ||
On or Before November 15, 2018 | Maximum | Senior Notes | |||
Line of Credit Facility [Line Items] | |||
Redemption period, notice | 60 days | ||
Ocwen Loan Servicing | Minimum | |||
Line of Credit Facility [Line Items] | |||
Debt covenant, required consolidated tangible net worth | $ 200,000,000 | ||
8.375% Senior Secured Notes Due In 2022 | Senior Notes | |||
Line of Credit Facility [Line Items] | |||
Percentage of principal amount, repurchase price | 101.00% | ||
8.375% Senior Secured Notes Due In 2022 | Secured Debt | |||
Line of Credit Facility [Line Items] | |||
Long-term debt, gross | $ 291,509,000 | $ 330,878,000 | |
Debt instrument stated percentage of interest (percentage) | 8.375% |
Borrowings - Schedule of Financ
Borrowings - Schedule of Financing Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | ||
HMBS-related borrowings | $ 6,063,435 | $ 5,380,448 |
Other financing liabilities | 972,595 | 1,062,090 |
Long-term debt, gross | 1,030,306 | 452,736 |
Financing Liabilities | ||
Debt Instrument [Line Items] | ||
HMBS-related borrowings | 6,063,435 | 5,380,448 |
Other financing liabilities | 950,593 | 1,032,856 |
Long-term debt, gross | 7,036,030 | 6,442,538 |
IndyMac Mortgage Loan Trust (INDX 2004-AR11) | Financing Liabilities | ||
Debt Instrument [Line Items] | ||
Other financing liabilities | 9,794 | 11,012 |
Residential Asset Securitization Trust 2003-A11 (RAST 2003-A11) | Financing Liabilities | ||
Debt Instrument [Line Items] | ||
Other financing liabilities | 12,208 | 13,803 |
Financing Liability Owed to Securitization Investors | Financing Liabilities | ||
Debt Instrument [Line Items] | ||
Other financing liabilities | $ 22,002 | 24,815 |
Financing Liability – Advances Pledged | ||
Debt Instrument [Line Items] | ||
Interest rate (percentage) | 4.50% | |
Financing Liability – Advances Pledged | Financing Liabilities | ||
Debt Instrument [Line Items] | ||
Other financing liabilities | $ 0 | 4,419 |
LIBOR | Financing Liabilities | ||
Debt Instrument [Line Items] | ||
Interest rate (percentage) | 2.60% | |
LIBOR | Residential Asset Securitization Trust 2003-A11 (RAST 2003-A11) | ||
Debt Instrument [Line Items] | ||
Interest rate (percentage) | 0.45% | |
Original Rights to MSRs Agreements | Financing Liabilities | ||
Debt Instrument [Line Items] | ||
Other financing liabilities | $ 603,046 | 436,511 |
2017 Agreements and New RMSR Agreements | Financing Liabilities | ||
Debt Instrument [Line Items] | ||
Other financing liabilities | 35,445 | 138,854 |
PHH MSR Agreements | Financing Liabilities | ||
Debt Instrument [Line Items] | ||
Other financing liabilities | $ 312,102 | $ 457,491 |
Borrowings - Schedule of Fina_2
Borrowings - Schedule of Financing Liabilities (Footnote) (Details) - USD ($) $ in Thousands | Jan. 18, 2018 | Sep. 01, 2017 | Jan. 31, 2018 | Sep. 30, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | |||||||
Receipt of lump-sum cash payments | $ 279,586 | ||||||
Proceeds from sale of MSRs accounted for as a financing | $ 0 | 279,586 | $ 54,601 | ||||
IndyMac Mortgage Loan Trust (INDX 2004-AR11) | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, interest rate (percentage) | 3.39% | ||||||
IndyMac Mortgage Loan Trust (INDX 2004-AR11) | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, interest rate (percentage) | 3.85% | ||||||
Residential Asset Securitization Trust 2003-A11 (RAST 2003-A11) | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, interest rate (percentage) | 4.25% | ||||||
Residential Asset Securitization Trust 2003-A11 (RAST 2003-A11) | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, interest rate (percentage) | 5.75% | ||||||
Residential Asset Securitization Trust 2003-A11 (RAST 2003-A11) | LIBOR | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate (percentage) | 0.45% | ||||||
2017 Agreements and New RMSR Agreements | |||||||
Debt Instrument [Line Items] | |||||||
Receipt of lump-sum cash payments | 279,586 | ||||||
2017 Agreements and New RMSR Agreements | Financing Liability - MSRs Pledged | |||||||
Debt Instrument [Line Items] | |||||||
Receipt of lump-sum cash payments | $ (54,600) | ||||||
NRZ | |||||||
Debt Instrument [Line Items] | |||||||
Proceeds from sale of MSRs accounted for as a financing | $ 279,600 | $ 54,600 | $ 279,600 | $ 54,600 |
Borrowings - Schedule of Other
Borrowings - Schedule of Other Secured Borrowings (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Line of Credit Facility [Line Items] | ||
Available borrowing capacity | $ 288,394 | |
Long-term debt, gross | 1,030,306 | $ 452,736 |
Other Secured Borrowings | ||
Line of Credit Facility [Line Items] | ||
Available borrowing capacity | 179,974 | |
Short-term debt | 372,015 | 65,523 |
Unamortized debt issuance costs | (3,381) | (3,098) |
Discount | (1,134) | (1,577) |
Senior notes | $ 1,025,791 | $ 448,061 |
Weighted average interest rate | 4.74% | 4.70% |
SSTL | Other Secured Borrowings | ||
Line of Credit Facility [Line Items] | ||
Available borrowing capacity | $ 0 | |
Long-term debt, gross | 326,100 | $ 231,500 |
Agency Mortgage Servicing Rights Financing Facility | Other Secured Borrowings | ||
Line of Credit Facility [Line Items] | ||
Available borrowing capacity | 152,294 | |
Short-term debt | 147,706 | 0 |
Unamortized debt issuance costs | (900) | |
Ginnie Mae Mortgage Servicing Rights Financing Facility | Other Secured Borrowings | ||
Line of Credit Facility [Line Items] | ||
Available borrowing capacity | 27,680 | |
Senior notes | 72,320 | 0 |
Ocwen Excess Spread-Collateralized Notes, Series 2019-PLS1 | Other Secured Borrowings | ||
Line of Credit Facility [Line Items] | ||
Available borrowing capacity | 0 | |
Senior notes | 94,395 | 0 |
OASIS Series 2014-1 | Other Secured Borrowings | ||
Line of Credit Facility [Line Items] | ||
Available borrowing capacity | 0 | |
Senior notes | 57,594 | 65,523 |
Mortgage Loan Warehouse Facilities | Other Secured Borrowings | ||
Line of Credit Facility [Line Items] | ||
Available borrowing capacity | 108,420 | |
Long-term debt, gross | 332,225 | 155,713 |
Mortgage Loan Warehouse Facilities | Repurchase Agreement | Other Secured Borrowings | ||
Line of Credit Facility [Line Items] | ||
Available borrowing capacity | 8,427 | |
Long-term debt, gross | 91,573 | 74,693 |
Mortgage Loan Warehouse Facilities | Participation Agreement | Other Secured Borrowings | ||
Line of Credit Facility [Line Items] | ||
Available borrowing capacity | 0 | |
Long-term debt, gross | 0 | 42,331 |
Mortgage Loan Warehouse Facilities | Mortgage Loan Warehouse/MSR Facilities | Other Secured Borrowings | ||
Line of Credit Facility [Line Items] | ||
Available borrowing capacity | 0 | |
Long-term debt, gross | 72,443 | 8,009 |
Mortgage Loan Warehouse Facilities | Master Repurchase Agreement | Other Secured Borrowings | ||
Line of Credit Facility [Line Items] | ||
Available borrowing capacity | 60,773 | |
Long-term debt, gross | 139,227 | 30,680 |
Mortgage Loan Warehouse Facilities | Master Repurchase Agreement | Other Secured Borrowings | ||
Line of Credit Facility [Line Items] | ||
Available borrowing capacity | 0 | |
Long-term debt, gross | $ 898 | 0 |
Interest rate (percentage) | 0.25% | |
Interest rate at floor (percentage) | 4.00% | |
Mortgage Loan Warehouse Facilities | Master Repurchase Agreement | Other Secured Borrowings | ||
Line of Credit Facility [Line Items] | ||
Available borrowing capacity | $ 0 | |
Long-term debt, gross | 0 | 0 |
Mortgage Loan Warehouse Facilities | Participation Agreement Two | Other Secured Borrowings | ||
Line of Credit Facility [Line Items] | ||
Available borrowing capacity | 0 | |
Long-term debt, gross | 17,304 | 0 |
Mortgage Loan Warehouse Facilities | Mortgage Warehouse Agreement Two | Other Secured Borrowings | ||
Line of Credit Facility [Line Items] | ||
Available borrowing capacity | 39,220 | |
Long-term debt, gross | $ 10,780 | $ 0 |
Eurodollar | SSTL | Other Secured Borrowings | ||
Line of Credit Facility [Line Items] | ||
Interest rate (percentage) | 5.00% | |
Interest rate at floor (percentage) | 1.00% | |
LIBOR | Mortgage Loan Warehouse Facilities | Mortgage Loan Warehouse/MSR Facilities | Other Secured Borrowings | ||
Line of Credit Facility [Line Items] | ||
Interest rate (percentage) | 2.50% | |
Interest rate at floor (percentage) | 3.50% | |
LIBOR | Mortgage Loan Warehouse Facilities | Master Repurchase Agreement | Other Secured Borrowings | ||
Line of Credit Facility [Line Items] | ||
Interest rate (percentage) | 1.70% | |
LIBOR | Mortgage Loan Warehouse Facilities | Mortgage Warehouse Agreement Two | Other Secured Borrowings | ||
Line of Credit Facility [Line Items] | ||
Interest rate (percentage) | 3.50% | |
Interest rate at floor (percentage) | 5.30% | |
LIBOR | Mortgage Loan Warehouse Facilities | Agency Mortgage Servicing Rights Financing Facility | Other Secured Borrowings | ||
Line of Credit Facility [Line Items] | ||
Interest rate (percentage) | 3.00% | |
LIBOR | Mortgage Loan Warehouse Facilities | Ginnie Mae Mortgage Servicing Rights Financing Facility | Other Secured Borrowings | ||
Line of Credit Facility [Line Items] | ||
Interest rate (percentage) | 3.95% | |
LIBOR | Mortgage Loan Warehouse Facilities | Ocwen Excess Spread-Collateralized Notes, Series 2019-PLS1 | Other Secured Borrowings | ||
Line of Credit Facility [Line Items] | ||
Debt instrument stated percentage of interest (percentage) | 5.07% | |
Maximum | LIBOR | Mortgage Loan Warehouse Facilities | Repurchase Agreement | Other Secured Borrowings | ||
Line of Credit Facility [Line Items] | ||
Interest rate (percentage) | 3.00% | |
Minimum | LIBOR | Mortgage Loan Warehouse Facilities | Repurchase Agreement | Other Secured Borrowings | ||
Line of Credit Facility [Line Items] | ||
Interest rate (percentage) | 1.95% | |
Forward Lending | LIBOR | Mortgage Loan Warehouse Facilities | Master Repurchase Agreement | Other Secured Borrowings | ||
Line of Credit Facility [Line Items] | ||
Interest rate (percentage) | 2.25% | |
Reverse Lending | LIBOR | Mortgage Loan Warehouse Facilities | Master Repurchase Agreement | Other Secured Borrowings | ||
Line of Credit Facility [Line Items] | ||
Interest rate (percentage) | 2.75% |
Borrowings - Schedule of Othe_2
Borrowings - Schedule of Other Secured Borrowings (Footnote) (Details) - USD ($) | Jan. 27, 2020 | Mar. 18, 2019 | Dec. 05, 2016 | Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2019 | Nov. 26, 2019 | Jul. 01, 2019 | Jun. 30, 2019 | Feb. 04, 2019 |
Debt Instrument [Line Items] | ||||||||||
Available borrowing capacity | $ 288,394,000 | $ 288,394,000 | ||||||||
Proceeds from issuance of debt | $ 120,000,000 | |||||||||
Maximum borrowing capacity | $ 300,000,000 | |||||||||
SSTL | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Periodic prepayment of SSTL | $ 4,200,000 | 6,400,000 | ||||||||
Participation Agreement Two | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Maximum borrowing capacity | $ 300,000,000 | |||||||||
Other Secured Borrowings | Participation Agreement | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Maximum borrowing capacity | $ 250,000,000 | |||||||||
Other Secured Borrowings | Participation Agreement Two | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Beneficial interest | 100.00% | |||||||||
Mortgage Loan Warehouse Facilities | Other Secured Borrowings | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Available borrowing capacity | 0 | $ 0 | ||||||||
Mortgage Loan Warehouse Facilities | Other Secured Borrowings | Repurchase Agreement | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Maximum borrowing capacity | 175,000,000 | 175,000,000 | ||||||||
Borrowings available on committed basis | 100,000,000 | 100,000,000 | ||||||||
Mortgage Loan Warehouse Facilities | Other Secured Borrowings | Mortgage Loan Warehouse/MSR Facilities | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Maximum borrowing capacity | 100,000,000 | 100,000,000 | ||||||||
Mortgage Loan Warehouse Facilities | Other Secured Borrowings | Master Repurchase Agreement | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Available borrowing capacity | 250,000,000 | 250,000,000 | ||||||||
Borrowings available on committed basis | 200,000,000 | $ 200,000,000 | ||||||||
Beneficial interest | 100.00% | |||||||||
Mortgage Loan Warehouse Facilities | Other Secured Borrowings | Master Repurchase Agreement | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Available borrowing capacity | 50,000,000 | $ 50,000,000 | ||||||||
Mortgage Loan Warehouse Facilities | Other Secured Borrowings | Master Repurchase Agreement | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Maximum borrowing capacity | 200,000,000 | 200,000,000 | ||||||||
Mortgage Loan Warehouse Facilities | Other Secured Borrowings | Mortgage Warehouse Agreement Two | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Maximum borrowing capacity | 50,000,000 | $ 50,000,000 | ||||||||
Stated Interest Rate of Underlying Mortgage Loans | Other Secured Borrowings | Participation Agreement Two | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate (percentage) | (0.25%) | |||||||||
Other Secured Borrowings | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Available borrowing capacity | 179,974,000 | $ 179,974,000 | ||||||||
Other Secured Borrowings | SSTL | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Available borrowing capacity | 0 | 0 | ||||||||
Other Secured Borrowings | Ginnie Mae Mortgage Servicing Rights Financing Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Available borrowing capacity | 27,680,000 | 27,680,000 | ||||||||
Other Secured Borrowings | Ocwen Excess Spread-Collateralized Notes, Series 2019-PLS1 Class A | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Available borrowing capacity | 0 | 0 | ||||||||
Debt instrument, face amount | $ 100,000,000 | |||||||||
Other Secured Borrowings | OASIS Series 2014-1 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Available borrowing capacity | 0 | 0 | ||||||||
Other Secured Borrowings | Mortgage Loan Warehouse Facilities | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Available borrowing capacity | 108,420,000 | 108,420,000 | ||||||||
Other Secured Borrowings | Mortgage Loan Warehouse Facilities | Repurchase Agreement | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Available borrowing capacity | 8,427,000 | 8,427,000 | ||||||||
Other Secured Borrowings | Mortgage Loan Warehouse Facilities | Participation Agreement | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Available borrowing capacity | 0 | 0 | ||||||||
Other Secured Borrowings | Mortgage Loan Warehouse Facilities | Mortgage Loan Warehouse/MSR Facilities | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Available borrowing capacity | 0 | 0 | ||||||||
Other Secured Borrowings | Mortgage Loan Warehouse Facilities | Master Repurchase Agreement | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Available borrowing capacity | 60,773,000 | 60,773,000 | ||||||||
Other Secured Borrowings | Mortgage Loan Warehouse Facilities | Master Repurchase Agreement | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Available borrowing capacity | $ 0 | $ 0 | ||||||||
Interest rate (percentage) | 0.25% | |||||||||
Interest rate at floor (percentage) | 4.00% | 4.00% | ||||||||
Other Secured Borrowings | Mortgage Loan Warehouse Facilities | Master Repurchase Agreement | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Available borrowing capacity | $ 0 | $ 0 | ||||||||
Other Secured Borrowings | Mortgage Loan Warehouse Facilities | Participation Agreement Two | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Available borrowing capacity | 0 | 0 | ||||||||
Other Secured Borrowings | Mortgage Loan Warehouse Facilities | Mortgage Warehouse Agreement Two | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Available borrowing capacity | $ 39,220,000 | $ 39,220,000 | ||||||||
Other Secured Borrowings | Eurodollar | SSTL | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate (percentage) | 5.00% | |||||||||
Interest rate at floor (percentage) | 1.00% | 1.00% | ||||||||
Other Secured Borrowings | LIBOR | Mortgage Loan Warehouse Facilities | Mortgage Loan Warehouse/MSR Facilities | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate (percentage) | 2.50% | |||||||||
Interest rate at floor (percentage) | 3.50% | 3.50% | ||||||||
Other Secured Borrowings | LIBOR | Mortgage Loan Warehouse Facilities | Master Repurchase Agreement | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate (percentage) | 1.70% | |||||||||
Other Secured Borrowings | LIBOR | Mortgage Loan Warehouse Facilities | Mortgage Warehouse Agreement Two | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate (percentage) | 3.50% | |||||||||
Interest rate at floor (percentage) | 5.30% | 5.30% | ||||||||
Other Secured Borrowings | LIBOR | Mortgage Loan Warehouse Facilities | Ginnie Mae Mortgage Servicing Rights Financing Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate (percentage) | 3.95% | |||||||||
Other Secured Borrowings | LIBOR | Mortgage Loan Warehouse Facilities | Ocwen Excess Spread-Collateralized Notes, Series 2019-PLS1 Class A | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument stated percentage of interest (percentage) | 5.07% | 5.07% | ||||||||
Other Secured Borrowings | Unpaid Principal Balance of Reference Pool of Freddie Mac Mortgages | OASIS Series 2014-1 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt basis points of benchmark (percentage) | 0.21% | |||||||||
Senior Secured Term Loan Option One | Federal Funds Rate | Other Secured Borrowings | SSTL | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate (percentage) | 0.50% | |||||||||
Senior Secured Term Loan Option One | Eurodollar | Other Secured Borrowings | SSTL | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate (percentage) | 4.00% | |||||||||
Senior Secured Term Loan Option One | Base Rate | Other Secured Borrowings | SSTL | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate at floor (percentage) | 2.00% | |||||||||
Senior Secured Term Loan Option Two | Eurodollar | Other Secured Borrowings | SSTL | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate (percentage) | 5.00% | |||||||||
Interest rate at floor (percentage) | 1.00% | |||||||||
Subsequent Event | Other Secured Borrowings | SSTL | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Periodic prepayment of SSTL | $ 5,000,000 | |||||||||
Repayments of debt | 126,100,000 | |||||||||
Maximum borrowing capacity | $ 200,000,000 |
Borrowings - Schedule of Senior
Borrowings - Schedule of Senior Notes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 1,030,306 | $ 452,736 |
Senior Unsecured Notes | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 21,543 | 119,064 |
Fair value adjustments | $ (497) | 860 |
Senior Unsecured Notes | 7.375% Senior Notes, Due 2019 | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate (percentage) | 7.375% | |
Long-term debt, gross | $ 0 | 97,521 |
Senior Unsecured Notes | 6.375% Senior Notes, Due 2021 | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate (percentage) | 6.375% | |
Long-term debt, gross | $ 21,543 | 21,543 |
Other Secured Borrowings | 8.375% Senior Secured Notes Due In 2022 | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate (percentage) | 8.375% | |
Long-term debt, gross | $ 291,509 | 330,878 |
Senior Notes | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 313,052 | 449,942 |
Unamortized debt issuance costs | (1,470) | (2,075) |
Senior notes | $ 311,085 | $ 448,727 |
Borrowings - Schedule of Seni_2
Borrowings - Schedule of Senior Notes (Footnote) (Details) - USD ($) $ in Thousands | 2 Months Ended | 12 Months Ended | ||
Aug. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | ||||
Gain on repurchase of debt | $ 5,099 | $ 0 | $ 0 | |
Senior Unsecured Notes | ||||
Debt Instrument [Line Items] | ||||
Redemption price (percentage) | 100.00% | |||
Senior Unsecured Notes | 2018 and thereafter | ||||
Debt Instrument [Line Items] | ||||
Redemption price (percentage) | 100.00% | |||
Secured Debt | 8.375% Senior Secured Notes Due In 2022 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, repurchased amount | $ 39,400 | |||
Debt instrument stated percentage of interest (percentage) | 8.375% | |||
Debt instrument, repurchase price | 34,300 | |||
Gain on repurchase of debt | $ 5,100 |
Borrowings - Schedule of Redemp
Borrowings - Schedule of Redemption Prices (Details) - Other Secured Borrowings | 12 Months Ended |
Dec. 31, 2019 | |
2018 | |
Debt Instrument [Line Items] | |
Redemption Price | 106.281% |
2019 | |
Debt Instrument [Line Items] | |
Redemption Price | 104.188% |
2020 | |
Debt Instrument [Line Items] | |
Redemption Price | 102.094% |
2021 and thereafter | |
Debt Instrument [Line Items] | |
Redemption Price | 100.00% |
Borrowings - Schedule of Assets
Borrowings - Schedule of Assets Held as Collateral Related to Secured Borrowings (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||||
Cash | $ 428,339 | $ 329,132 | ||
Restricted cash | 64,001 | 67,878 | ||
MSRs | 1,486,395 | 1,457,149 | ||
Advances, net | 254,533 | 249,382 | ||
Match funded assets | 801,990 | 937,294 | ||
Loans held for sale | 275,269 | 242,622 | ||
Loans held for investment | 6,292,938 | 5,498,719 | ||
Receivables, net | 201,220 | 198,262 | ||
Premises and equipment, net | 38,274 | 33,417 | ||
Other assets | 563,240 | 379,567 | ||
Total assets | 10,406,199 | 9,394,216 | $ 8,403,164 | |
Mortgage servicing rights, at fair value | 1,486,395 | $ 1,457,149 | $ 671,962 | $ 679,256 |
Match Funded Liabilities | ||||
Debt Instrument [Line Items] | ||||
Cash | 0 | |||
Restricted cash | 17,332 | |||
MSRs | 0 | |||
Advances, net | 0 | |||
Match funded assets | 801,990 | |||
Loans held for sale | 0 | |||
Loans held for investment | 0 | |||
Receivables, net | 0 | |||
Premises and equipment, net | 0 | |||
Other assets | 0 | |||
Total assets | 819,322 | |||
Financing Liabilities | ||||
Debt Instrument [Line Items] | ||||
Cash | 0 | |||
Restricted cash | 0 | |||
MSRs | 915,148 | |||
Advances, net | 0 | |||
Match funded assets | 0 | |||
Loans held for sale | 0 | |||
Loans held for investment | 6,144,275 | |||
Receivables, net | 0 | |||
Premises and equipment, net | 0 | |||
Other assets | 0 | |||
Total assets | 7,059,423 | |||
Mortgage Loan Warehouse/MSR Facilities | ||||
Debt Instrument [Line Items] | ||||
Cash | 0 | |||
Restricted cash | 5,944 | |||
MSRs | 575,471 | |||
Advances, net | 0 | |||
Match funded assets | 0 | |||
Loans held for sale | 236,517 | |||
Loans held for investment | 115,130 | |||
Receivables, net | 24,795 | |||
Premises and equipment, net | 0 | |||
Other assets | 5,285 | |||
Total assets | 963,142 | |||
Sales and Other Commitments | ||||
Debt Instrument [Line Items] | ||||
Cash | 0 | |||
Restricted cash | 40,725 | |||
MSRs | 0 | |||
Advances, net | 28,737 | |||
Match funded assets | 0 | |||
Loans held for sale | 0 | |||
Loans held for investment | 0 | |||
Receivables, net | 0 | |||
Premises and equipment, net | 0 | |||
Other assets | 510,236 | |||
Total assets | 579,698 | |||
Other | ||||
Debt Instrument [Line Items] | ||||
Cash | 428,339 | |||
Restricted cash | 0 | |||
MSRs | 525 | |||
Advances, net | 225,796 | |||
Match funded assets | 0 | |||
Loans held for sale | 38,752 | |||
Loans held for investment | 33,533 | |||
Receivables, net | 176,425 | |||
Premises and equipment, net | 38,274 | |||
Other assets | 47,719 | |||
Total assets | 989,363 | |||
Certain Cohorts | Other | ||||
Debt Instrument [Line Items] | ||||
Mortgage servicing rights, at fair value | 4,700 | |||
Residential Mortgage Backed Securities | Certain Cohorts | Other | ||||
Debt Instrument [Line Items] | ||||
Mortgage servicing rights, at fair value | 27,900 | |||
EBO And PLS Mortgage Servicing Rights | Certain Cohorts | Other | ||||
Debt Instrument [Line Items] | ||||
Mortgage servicing rights, at fair value | $ 23,200 |
Borrowings - Schedule of Aggreg
Borrowings - Schedule of Aggregate Long-term Borrowings (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Debt Instrument [Line Items] | |
2020 | $ 1,226,187 |
2021 | 405,514 |
2022 | 333,172 |
2023 | 0 |
2024 | 0 |
Thereafter | 57,594 |
Long-term debt, gross | 2,022,467 |
Fair value | 1,960,318 |
Match Funded Liabilities | |
Debt Instrument [Line Items] | |
2020 | 394,109 |
2021 | 285,000 |
2022 | 0 |
2023 | 0 |
2024 | 0 |
Thereafter | 0 |
Long-term debt, gross | 679,109 |
Fair value | 679,507 |
Other Secured Borrowings | |
Debt Instrument [Line Items] | |
2020 | 832,078 |
2021 | 98,971 |
2022 | 41,663 |
2023 | 0 |
2024 | 0 |
Thereafter | 57,594 |
Long-term debt, gross | 1,030,306 |
Fair value | 1,010,789 |
Senior Notes | |
Debt Instrument [Line Items] | |
2020 | 0 |
2021 | 21,543 |
2022 | 291,509 |
2023 | 0 |
2024 | 0 |
Thereafter | 0 |
Long-term debt, gross | 313,052 |
Fair value | $ 270,022 |
Borrowings - Schedule of Aggr_2
Borrowings - Schedule of Aggregate Long-term Borrowings (Footnote) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 1,030,306 | $ 452,736 |
Financing Liabilities | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 7,036,030 | $ 6,442,538 |
Financing Liabilities | Sale of MSRs and Rights To MSRs | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 1,000,000 | |
Financing Liabilities | HMBS - Related Borrowings | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 6,100,000 |
Other Liabilities - Schedule of
Other Liabilities - Schedule of Other Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Other Liabilities Disclosure [Abstract] | ||
Contingent loan repurchase liability | $ 492,900 | $ 302,581 |
Servicing-related obligations | 88,167 | 41,922 |
Other accrued expenses | 67,241 | 94,835 |
Due to NRZ - Advance collections and servicing fees | 63,596 | 53,001 |
Liability for indemnification obligations | 52,785 | 51,574 |
Lease liability | 44,488 | |
Checks held for escheat | 31,959 | 20,686 |
Accrued legal fees and settlements | 30,663 | 62,763 |
Liability for uncertain tax positions | 17,197 | 13,739 |
Liability for unfunded pension obligation | 13,383 | 12,683 |
Accrued interest payable | 5,964 | 7,209 |
Liability for mortgage insurance contingency | 6,820 | 6,820 |
Liability for unfunded India gratuity plan | 5,331 | 4,904 |
Deferred revenue | 488 | 4,441 |
Derivatives, at fair value | 100 | 4,986 |
Other | 21,091 | 21,492 |
Other liabilities | $ 942,173 | $ 703,636 |
Other Liabilities Schedule of C
Other Liabilities Schedule of Changes in Liability for Legal Fees and Settlements (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Other Liabilities Disclosure [Abstract] | |||
Beginning balance | $ 62,763 | $ 51,057 | $ 93,797 |
Accrual for probable losses | 3,011 | 19,774 | 131,113 |
Payments | (30,356) | (12,983) | (174,941) |
Assumed in connection with the acquisition of PHH | 0 | 9,960 | 0 |
Issuance of common stock in settlement of litigation | 0 | (5,719) | (1,937) |
Net increase (decrease) in accrued legal fees | (4,884) | (1,917) | 482 |
Other | 129 | 2,591 | 2,543 |
Ending balance | $ 30,663 | $ 62,763 | $ 51,057 |
Equity - Narrative (Details)
Equity - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Jan. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Class of Stock [Line Items] | ||||
Issuance of common stock | $ 5,719 | $ 15,325 | ||
NRZ | ||||
Class of Stock [Line Items] | ||||
Issuance of common stock (in shares) | 6,075,510 | |||
Issuance of common stock | $ 13,900 | |||
Securities Class Action | ||||
Class of Stock [Line Items] | ||||
Issuance of common stock (in shares) | 1,875,000 | 625,000 | ||
Common stock to be issued in connection with mediated settlement of litigation | 2,500,000 |
Equity - Schedule of Accumulate
Equity - Schedule of Accumulated Other Comprehensive Loss (AOCL), Net of Income Taxes (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Equity [Abstract] | ||
Unfunded pension plan obligation | $ 6,789 | $ 3,347 |
Unrealized losses on cash flow hedges, net | 832 | 979 |
Other | (27) | (69) |
Accumulated other comprehensive loss | $ 7,594 | $ 4,257 |
Derivative Financial Instrume_3
Derivative Financial Instruments and Hedging Activities - Summary of Changes in Notional Balances of Holdings of Derivatives (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Fair value of derivative assets (liabilities) at: | ||
Derivatives, at fair value | $ 6,007 | $ 4,552 |
IRLCs | ||
Derivative [Line Items] | ||
Notional balance at December 31, 2019 | 232,566 | |
Fair value of derivative assets (liabilities) at: | ||
Derivatives, at fair value | 4,878 | 3,871 |
Gain (loss) on derivatives, net | 756 | 3,809 |
TBA / Forward MBS Trades | ||
Derivative [Line Items] | ||
Notional balance at December 31, 2019 | 1,200,000 | |
Fair value of derivative assets (liabilities) at: | ||
Derivatives, at fair value | 1,121 | 0 |
Gain (loss) on derivatives, net | 525 | 0 |
Forward Trades | ||
Derivative [Line Items] | ||
Notional balance at December 31, 2019 | 60,000 | |
Fair value of derivative assets (liabilities) at: | ||
Derivatives, at fair value | (92) | (4,983) |
Gain (loss) on derivatives, net | (2,689) | 136 |
Interest Rate Caps | ||
Derivative [Line Items] | ||
Notional balance at December 31, 2019 | 27,083 | |
Fair value of derivative assets (liabilities) at: | ||
Derivatives, at fair value | 0 | 678 |
Gain (loss) on derivatives, net | $ (358) | $ (841) |
Derivative Financial Instrume_4
Derivative Financial Instruments and Hedging Activities - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||
Foreign currency re-measurement exchange gains (losses) | $ (0.2) | $ (3.2) | $ 1.7 |
Interest Income - Schedule of C
Interest Income - Schedule of Components of Interest Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Other Income and Expenses [Abstract] | |||
Loans held for sale | $ 14,669 | $ 10,756 | $ 11,100 |
Interest earning cash deposits and other | 2,435 | 2,850 | 1,796 |
Automotive dealer financing notes | 0 | 420 | 3,069 |
Interest and Other Income | $ 17,104 | $ 14,026 | $ 15,965 |
Interest Expense - Schedule of
Interest Expense - Schedule of Components of Interest Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Debt securities: | |||
Interest expense | $ 114,129 | $ 103,371 | $ 126,927 |
Senior Notes | |||
Debt securities: | |||
Interest expense | 31,804 | 31,280 | 29,806 |
Match Funded Liabilities | |||
Debt securities: | |||
Interest expense | 26,902 | 31,870 | 47,624 |
Other Secured Borrowings | |||
Debt securities: | |||
Interest expense | 46,278 | 35,412 | 45,099 |
Financing Liabilities | Other Financing Liabilities With Unrelated Parties | |||
Debt securities: | |||
Interest expense | 0 | 66 | 635 |
Other | |||
Debt securities: | |||
Interest expense | $ 9,145 | $ 4,743 | $ 3,763 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Tax Credit Carryforward [Line Items] | |||
Decrease in federal net operating loss carryforwards | $ 16,900 | ||
Increase in foreign tax credits | $ (263) | $ 25,601 | 0 |
Deferred tax assets (liabilities), gross | 202,610 | 73,415 | |
Valuation allowance | 200,441 | 68,126 | |
Net operating loss carryforwards and credits - state and local | 70,254 | 0 | |
Income taxes receivable | 37,888 | 45,987 | |
Total interest and penalties | (2,700) | (2,900) | (5,100) |
Accruals for interest and penalties | 6,600 | 4,100 | |
Liability for selected tax items | $ 10,600 | 9,600 | |
Range of period where there is possible change in unrecognized tax benefits | 12 months | ||
Reasonably possible decrease of unrecognized tax benefits | $ 8,800 | ||
U.S. | |||
Tax Credit Carryforward [Line Items] | |||
Decrease in deferred tax asset | 30,100 | 36,100 | |
Increase in deferred tax asset | 6,000 | ||
Deferred tax assets (liabilities), gross | 199,500 | ||
Valuation allowance | 199,500 | 46,300 | |
U.S. NOL carryforwards | 306,500 | ||
Net operating loss carryforwards and credits - state and local | 70,300 | ||
USVI | |||
Tax Credit Carryforward [Line Items] | |||
Decrease in deferred tax asset | 22,000 | $ 26,600 | |
Increase in deferred tax asset | 4,600 | ||
Valuation allowance | 400 | 21,300 | |
Expected carry back of net operating loss | 334,500 | ||
Income taxes receivable | 12,900 | ||
India and Philippines Subsidiary | |||
Tax Credit Carryforward [Line Items] | |||
Deferred tax liability | 1,600 | ||
Undistributed earnings of foreign subsidiaries | $ 9,300 | ||
Ocwen Mortgage Servicing Inc | |||
Tax Credit Carryforward [Line Items] | |||
Percentage of income tax credit on qualified income | 90.00% | ||
EDC benefits, exemption term | 30 years | ||
PHH Corporation | U.S. | |||
Tax Credit Carryforward [Line Items] | |||
U.S. NOL carryforwards | $ 125,700 | ||
Net operating loss carryforwards and credits - state and local | 54,300 | ||
Transition Tax Liability | |||
Tax Credit Carryforward [Line Items] | |||
Decrease in federal net operating loss carryforwards | 51,700 | ||
Increase in foreign tax credits | 19,900 | ||
Annual Limitations on Utilization of Tax Attributes | |||
Tax Credit Carryforward [Line Items] | |||
Decrease in deferred tax asset | 160,900 | ||
Foreign Tax Credit | |||
Tax Credit Carryforward [Line Items] | |||
Decrease in deferred tax asset | 29,500 | ||
SEC Schedule, 12-09, Valuation Allowance, Tax Credit Carryforward | |||
Tax Credit Carryforward [Line Items] | |||
Decrease in deferred tax asset | $ 55,700 | ||
SEC Schedule, 12-09, Valuation Allowance, Operating Loss Carryforward | U.S. | |||
Tax Credit Carryforward [Line Items] | |||
Valuation allowance on deferred tax assets | 64,400 | ||
Capital Loss Carryforward | U.S. | |||
Tax Credit Carryforward [Line Items] | |||
Capital loss carryforwards | $ 7,600 |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income Before Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||||||||||
Domestic | $ (93,487) | $ 11,477 | $ (75,143) | ||||||||
Foreign | (33,004) | (82,953) | (68,830) | ||||||||
Loss from continuing operations before income taxes | $ 37,243 | $ (38,317) | $ (84,333) | $ (41,084) | $ (7,763) | $ (40,273) | $ (28,405) | $ 4,965 | $ (126,491) | $ (71,476) | $ (143,973) |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Current: | |||||||||||
Federal | $ 873 | $ (7,670) | $ (21,859) | ||||||||
State | 4,460 | 356 | (3,938) | ||||||||
Foreign | 7,181 | 11,132 | 9,550 | ||||||||
Current Income tax expense (benefit) | 12,514 | 3,818 | (16,247) | ||||||||
Deferred: | |||||||||||
Federal | (40,429) | 23,991 | 27,289 | ||||||||
State | (914) | 319 | 702 | ||||||||
Foreign | 11,993 | (4,252) | 2,719 | ||||||||
Provision for (reversal of) valuation allowance on deferred tax assets | 32,470 | (23,347) | (29,979) | ||||||||
Deferred income tax expense (benefit) | 3,120 | (3,289) | 731 | ||||||||
Total | $ 2,370 | $ 4,450 | $ 5,404 | $ 3,410 | $ (4,012) | $ 845 | $ 1,348 | $ 2,348 | $ 15,634 | $ 529 | $ (15,516) |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||||||||||
Expected income tax expense (benefit) at statutory rate | $ (26,563) | $ (15,010) | $ (50,391) | ||||||||
Differences between expected and actual income tax expense: | |||||||||||
Bargain purchase gain disallowance | 80 | (13,448) | 0 | ||||||||
Revaluation of deferred tax assets related to legal entity mergers | (25,509) | 0 | 0 | ||||||||
Reduction in tax attributes for Section 382 & 383 limitations | 0 | 55,668 | 0 | ||||||||
U.S. Tax Reform - Change in Federal rate | 0 | (10,666) | 62,758 | ||||||||
U.S. Tax Reform - Transition Tax | 0 | 14,412 | 34,846 | ||||||||
U.S. Tax Reform - BEAT Tax | (555) | 1,076 | 0 | ||||||||
U.S. Tax Reform - GILTI inclusion | 11,859 | 0 | 0 | ||||||||
Foreign tax differential including effectively connected income | 15,979 | 22,990 | (12,140) | ||||||||
Provision for (reversal of) liability for uncertain tax positions | 4,198 | (3,987) | (16,925) | ||||||||
Provision for (reversal of) valuation allowance on deferred tax assets | 32,470 | (23,347) | (29,979) | ||||||||
Provision for liability for intra-entity transactions | 0 | 0 | 2,484 | ||||||||
State tax, after Federal tax benefit | (784) | 675 | (3,938) | ||||||||
Excess tax benefits from share-based compensation | 381 | (356) | (3,701) | ||||||||
Other permanent differences | 66 | 122 | (267) | ||||||||
Foreign tax credit (generation) utilization | 263 | (25,601) | 0 | ||||||||
Executive compensation disallowance | 1,344 | 959 | 221 | ||||||||
Subpart F income | 0 | 3,222 | 2,824 | ||||||||
Other provision to return differences | 1,242 | (6,559) | 221 | ||||||||
Other | 1,163 | 379 | (1,529) | ||||||||
Total | $ 2,370 | $ 4,450 | $ 5,404 | $ 3,410 | $ (4,012) | $ 845 | $ 1,348 | $ 2,348 | $ 15,634 | $ 529 | $ (15,516) |
Income Taxes - Schedule of Ef_2
Income Taxes - Schedule of Effective Income Tax Reconciliation (Footnote) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 01, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Increase decrease in income tax expense as result of effectively connected income | $ 2.6 | $ (3.3) | $ (28.5) | |
Cumulative effect of change of accounting policy | $ 5.6 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets | ||
Net operating loss carryforwards - federal and foreign | $ 64,817 | $ 31,587 |
Net operating loss carryforwards and credits - state and local | 70,254 | 0 |
Reserve for servicing exposure | 7,711 | 10,331 |
Accrued other liabilities | 6,377 | 8,966 |
Foreign deferred assets | 3,620 | 7,142 |
Partnership losses | 7,029 | 6,681 |
Stock-based compensation expense | 5,297 | 5,610 |
Interest expense disallowance | 12,423 | 4,773 |
Intangible asset amortization | 4,946 | 4,579 |
Accrued incentive compensation | 5,063 | 4,527 |
Accrued legal settlements | 6,028 | 4,350 |
Bad debt and allowance for loan losses | 2,530 | 3,498 |
Tax residuals and deferred income on tax residuals | 2,885 | 2,905 |
Foreign tax credit | 94 | 357 |
Lease liabilities | 5,459 | 580 |
Deferred income | 8,493 | 0 |
Other | 8,708 | 8,252 |
Deferred tax assets, gross | 221,734 | 104,138 |
Deferred tax liabilities | ||
Mortgage servicing rights amortization | 16,358 | 27,860 |
Foreign undistributed earnings | 1,615 | 2,059 |
Other | 1,151 | 804 |
Deferred tax liabilities, gross | 19,124 | 30,723 |
Deferred tax assets (liability), gross | 202,610 | 73,415 |
Valuation allowance | (200,441) | (68,126) |
Deferred tax assets, net | $ 2,169 | $ 5,289 |
Income Taxes - Schedule of Unre
Income Taxes - Schedule of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Reconciliation of Unrecognized Tax Benefits [Roll Forward] | |||
Beginning balance | $ 9,622 | $ 2,281 | $ 16,994 |
Additions - PHH acquisition | 0 | 13,108 | 0 |
Additions for tax positions of current year | 207 | 412 | 0 |
Additions for tax positions of prior years | 3,110 | 1,354 | 2,281 |
Reductions for tax positions of prior years | 0 | (236) | 0 |
Reductions for settlements | (1,293) | (3,188) | (387) |
Lapses in statute of limitations | (1,057) | (4,109) | (16,607) |
Ending balance | $ 10,589 | $ 9,622 | $ 2,281 |
Basic and Diluted Earnings (L_3
Basic and Diluted Earnings (Loss) per Share - Schedule of Reconciliation of the Calculation of Basic EPS to Diluted EPS (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Basic loss per share | ||||||||||||
Loss from continuing operations, net of tax attributable to Ocwen common stockholders | $ (142,125) | $ (72,181) | $ (127,966) | |||||||||
Income from discontinued operations, net of tax | $ 1,409 | $ 1,409 | $ 0 | $ 0 | $ 0 | 0 | 1,409 | 0 | ||||
Net loss attributable to Ocwen stockholders | $ (142,125) | $ (70,772) | $ (127,966) | |||||||||
Weighted average shares of common stock outstanding - Basic and Diluted (shares) | 134,444,402 | 133,703,359 | 127,082,058 | |||||||||
Earnings (loss) per share attributable to Ocwen stockholders - Basic and Diluted | ||||||||||||
Continuing operations | $ 0.26 | $ (0.32) | $ (0.67) | $ (0.33) | $ (0.03) | $ (0.31) | $ (0.22) | $ 0.02 | $ (1.06) | $ (0.54) | $ (1.01) | |
Discontinued operations | $ 0.26 | $ (0.32) | $ (0.67) | $ (0.33) | 0.01 | 0 | 0 | 0 | 0 | 0.01 | 0 | |
Total attributable to Ocwen stockholders | $ (0.02) | $ (0.31) | $ (0.22) | $ 0.02 | $ (1.06) | $ (0.53) | $ (1.01) | |||||
Stock options and common stock awards excluded from the computation of diluted earnings per share | ||||||||||||
Anti-dilutive securities (in shares) | 3,167,624 | 4,989,725 | 5,487,164 | |||||||||
Market-based | ||||||||||||
Stock options and common stock awards excluded from the computation of diluted earnings per share | ||||||||||||
Anti-dilutive securities (in shares) | 787,204 | 670,829 | 862,446 |
Employee Compensation and Ben_3
Employee Compensation and Benefit Plans - Narrative (Details) | 12 Months Ended | ||
Dec. 31, 2019USD ($)trading_dayshares | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | |||
Provident fund contribution percentage on portion of employees salary | 12.00% | ||
Contributions to 401(k) | $ 5,900,000 | $ 4,800,000 | $ 5,300,000 |
Future expected benefit payments, year three | 2,800,000 | ||
Future expected benefit payments, year four | 2,800,000 | ||
Unfunded status recognized in Other liabilities | (5,331,000) | (4,904,000) | |
Compensation expense recognized | $ 16,600,000 | 20,500,000 | 24,500,000 |
Common stock remaining available for future issuance (in shares) | shares | 6,841,386 | ||
Contractual term of all options granted (years) | 10 years | ||
Minimum | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Percentage of employee contributions | 50.00% | ||
Maximum | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Employer match limit, percent of employee compensation | 6.00% | ||
Matching compensation per pay period (usd per pay period) | $ 8,400 | ||
Stock Options | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Unrecognized compensation costs related to non-vested stock options | $ 600,000 | ||
Weighted average remaining requisite service period | 1 year 9 months 18 days | ||
Restricted Stock Units | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Weighted average remaining requisite service period | 1 year 10 months 18 days | ||
Unvested awards, cost not yet recognized | $ 5,500,000 | ||
Liability Awards | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Weighted average remaining requisite service period | 2 years 4 months 1 day | ||
Unvested awards, cost not yet recognized | $ 3,100,000 | ||
Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Net periodic benefit cost | (2,000,000) | 400,000 | |
Future expected benefit payments, next twelve months | 2,900,000 | ||
Future expected benefit payments, year two | 2,800,000 | ||
Future expected benefit payments, year five | 3,100,000 | ||
Future expected benefit payments, five subsequent years | 15,700,000 | ||
Contributions to defined benefit pension plans | 800,000 | 200,000 | $ 100,000 |
Fair value of plan assets | 41,220,000 | 36,439,000 | |
Benefit obligation | 54,603,000 | 49,122,000 | |
Unfunded status recognized in Other liabilities | (13,383,000) | (12,683,000) | |
Gratuity Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Future expected benefit payments, next twelve months | 1,000,000 | ||
Future expected benefit payments, year two | 900,000 | ||
Future expected benefit payments, year three | 800,000 | ||
Future expected benefit payments, year four | 700,000 | ||
Future expected benefit payments, year five | 600,000 | ||
Future expected benefit payments, five subsequent years | 1,900,000 | ||
Plan assets, benefits paid | $ 900,000 | $ 300,000 | |
Long-Term Incentive (LTI) Program | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Granted (in shares) | shares | 3,766,143 | ||
Grants in period, performance-based (percentage) | 74.00% | ||
Grants in period, time-based (percentage) | 26.00% | ||
Long-Term Incentive (LTI) Program | Performance-Based Awards | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Vesting percentage of awards (percentage) | 100.00% | ||
Number of trading days used in total shareholder return calculation | trading_day | 30 | ||
Chief Executive Officer | Long-Term Incentive (LTI) Program | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Granted (in shares) | shares | 4,896,796 | ||
Chief Executive Officer | Long-Term Incentive (LTI) Program | Cash-Settled Awards | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Granted (in shares) | shares | 3,766,143 | ||
Chief Executive Officer | Long-Term Incentive (LTI) Program | Equity-Settled Awards | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Granted (in shares) | shares | 1,130,653 | ||
Share-based Payment Arrangement, Tranche One | Long-Term Incentive (LTI) Program | Time-Based Awards | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Vesting percentage of awards (percentage) | 33.33333% | ||
Share-based Payment Arrangement, Tranche One | Long-Term Incentive (LTI) Program | Performance-Based Awards | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Award vesting period (years) | 1 year | ||
Share-based Payment Arrangement, Tranche One | Long-Term Incentive (LTI) Program | One-Time Retention and Transitional Awards | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Vesting percentage of awards (percentage) | 33.33333% | ||
Share-based Payment Arrangement, Tranche Two | Long-Term Incentive (LTI) Program | Time-Based Awards | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Vesting percentage of awards (percentage) | 33.33333% | ||
Share-based Payment Arrangement, Tranche Two | Long-Term Incentive (LTI) Program | Performance-Based Awards | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Award vesting period (years) | 2 years | ||
Share-based Payment Arrangement, Tranche Two | Long-Term Incentive (LTI) Program | One-Time Retention and Transitional Awards | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Vesting percentage of awards (percentage) | 33.33333% | ||
Share-based Payment Arrangement, Tranche Three | Long-Term Incentive (LTI) Program | Time-Based Awards | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Vesting percentage of awards (percentage) | 33.33333% | ||
Share-based Payment Arrangement, Tranche Three | Long-Term Incentive (LTI) Program | Performance-Based Awards | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Award vesting period (years) | 3 years | ||
Share-based Payment Arrangement, Tranche Three | Long-Term Incentive (LTI) Program | One-Time Retention and Transitional Awards | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Vesting percentage of awards (percentage) | 33.33333% |
Employee Compensation and Ben_4
Employee Compensation and Benefit Plans - Schedule of Change in Benefit Obligation, Plan Assets and Funded Status for Pension Plans and Gratuity Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Unfunded status recognized in Other liabilities | $ (5,331) | $ (4,904) |
Pension Plan | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Benefit obligation | 54,603 | 49,122 |
Fair value of plan assets | 41,220 | 36,439 |
Unfunded status recognized in Other liabilities | (13,383) | (12,683) |
Amounts recognized in Accumulated other comprehensive income | 6,864 | 3,422 |
Gratuity Plan | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Benefit obligation | 5,370 | 4,941 |
Fair value of plan assets | 39 | 37 |
Unfunded status recognized in Other liabilities | $ (5,331) | $ (4,904) |
Employee Compensation and Ben_5
Employee Compensation and Benefit Plans - Schedule of Stock Awards Vesting (Details) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
2011 - 2014 Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percent of options awarded (percentage) | 100.00% | ||
2011 - 2014 Awards | Time-Based | Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percent of options awarded (percentage) | 60.00% | ||
Award vesting period (years) | 4 years | ||
Vesting percentage of awards (percentage) | 25.00% | ||
2011 - 2014 Awards | Market Performance-Based | Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percent of options awarded (percentage) | 35.00% | ||
Award vesting period (years) | 3 years | ||
Vesting percentage of awards (percentage) | 25.00% | ||
Percentage of compounded annual gain of stock price over the exercise price (percentage) | 20.00% | ||
2011 - 2014 Awards | Extraordinary Market Performance-Based | Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percent of options awarded (percentage) | 5.00% | ||
Award vesting period (years) | 3 years | ||
Vesting percentage of awards (percentage) | 25.00% | ||
Percentage of compounded annual gain of stock price over the exercise price (percentage) | 25.00% | ||
2011 - 2014 Awards | Market Performance Based - Stock Price Has at Least Doubled Over the Exercise Price | Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage of awards (percentage) | 25.00% | ||
2011 - 2014 Awards | Market Performance Based - Stock Price Has at Least Tripled Over the Exercise Price | Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage of awards (percentage) | 25.00% | ||
2015 - 2016 Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percent of options awarded (percentage) | 100.00% | ||
2015 - 2016 Awards | Time-Based | Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percent of options awarded (percentage) | 34.00% | ||
Award vesting period (years) | 4 years | ||
Vesting percentage of awards (percentage) | 25.00% | ||
2015 - 2016 Awards | Time-Based | Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percent of options awarded (percentage) | 0.00% | ||
Award vesting period (years) | 4 years | ||
Vesting percentage of awards (percentage) | 33.30% | ||
2015 - 2016 Awards | Time-Based Vesting Schedule and Market Performance-Based Vesting Date | Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percent of options awarded (percentage) | 66.00% | ||
Award vesting period (years) | 4 years | ||
Vesting percentage of awards (percentage) | 25.00% | ||
2017 - 2019 Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percent of options awarded (percentage) | 100.00% | ||
2017 - 2019 Awards | Time-Based | Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percent of options awarded (percentage) | 15.00% | ||
Award vesting period (years) | 3 years | ||
Vesting percentage of awards (percentage) | 33.30% | ||
2017 - 2019 Awards | Time-Based | Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percent of options awarded (percentage) | 56.00% | ||
Award vesting period (years) | 3 years | ||
Vesting percentage of awards (percentage) | 33.30% | ||
2017 - 2019 Awards | Time-Based Vesting Schedule and Market Performance-Based Vesting Date | Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percent of options awarded (percentage) | 29.00% | ||
Award vesting period (years) | 4 years | ||
Vesting percentage of awards (percentage) | 25.00% |
Employee Compensation and Ben_6
Employee Compensation and Benefit Plans - Schedule of Stock Option Activity (Details) - Stock Options - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Outstanding (in shares) | 2,092,599 | 6,708,655 | 6,926,634 |
Granted (in shares) | 51,409 | 348,385 | |
Forfeited / Expired (in shares) | (164,577) | (4,964,441) | (217,979) |
Outstanding (in shares) | 1,979,431 | 2,092,599 | 6,708,655 |
Exercisable at end of year (in shares) | 1,580,766 | 1,520,039 | 6,234,830 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |||
Outstanding (in dollars per share) | $ 19.22 | $ 9.97 | $ 9.88 |
Granted (in dollars per share) | 2.08 | 3.66 | |
Forfeited / Expired (in dollars per share) | 18.69 | 5.62 | 7.16 |
Outstanding (in dollars per share) | 18.82 | 19.22 | 9.97 |
Exercisable at end of year (in dollars per share) | $ 20.16 | $ 21.29 | $ 8.87 |
Employee Compensation and Ben_7
Employee Compensation and Benefit Plans - Schedule of Stock Option Activity (Footnote) (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options granted, fair value (in dollars per share) | $ 1.49 | ||
Stock options which expired unexercised | 73,696 | 4,719,750 | |
Market-based options that have not met performance criteria (in shares) | 115,000 | ||
Average common stock trading price to determine market condition for options exercise | $ 38.41 | ||
Net aggregate intrinsic value of stock options outstanding | $ 0 | ||
Market-based options outstanding (in shares) | 810,939 | ||
Market-based options outstanding, exercisable (in shares) | 695,939 | ||
Weighted average remaining contractual term of options outstanding | 4 years 1 month 16 days | ||
Weighted average remaining contractual term of options exercisable | 3 years 3 months 12 days | ||
Total fair value of stock options vested and became exercisable | $ 0.6 | $ 0.6 | $ 0.7 |
Chief Executive Officer | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options granted (in shares) | 33,180 | 266,990 | |
Stock options granted, exercise price (in dollars per share) | $ 2.17 | $ 4.12 |
Employee Compensation and Ben_8
Employee Compensation and Benefit Plans - Schedule of Stock Unit Activity (Details) - Stock Units - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Unvested at beginning of year (in shares) | 2,946,800 | 2,753,918 | 2,752,054 |
Granted (in shares) | 1,256,952 | 1,809,373 | 971,761 |
Vested (in shares) | (1,137,696) | (796,856) | (896,272) |
Forfeited/Cancelled (in shares) | (406,931) | (819,635) | (73,625) |
Unvested at end of year (in shares) | 2,659,125 | 2,946,800 | 2,753,918 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |||
Unvested at beginning of year (in dollar per share) | $ 3.75 | $ 3.69 | $ 3.91 |
Granted (in dollar per share) | 2 | 3.57 | 2.56 |
Vested (in dollar per share) | 3.08 | 2.78 | 3.26 |
Forfeited/Canceled (in dollar per share) | 9.58 | 4.57 | 2.20 |
Unvested at end of year (in dollar per share) | $ 2.63 | $ 3.75 | $ 3.69 |
Employee Compensation and Ben_9
Employee Compensation and Benefit Plans - Schedule of Stock Unit Activity (Footnote) (Details) - USD ($) $ / shares in Units, $ in Millions | Jun. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted (in shares) | 1,256,952 | 1,809,373 | 971,761 | ||
Intrinsic value of stock units vested | $ 2.1 | $ 3.3 | $ 4.6 | ||
Total intrinsic value of stock units vested | $ 3.5 | $ 2.2 | $ 2.9 | ||
Unvested stock units (in shares) | 2,659,125 | 2,946,800 | 2,753,918 | 2,752,054 | |
Minimum percentage of units to vest (percent) | 50.00% | ||||
Weighted average remaining contractual term of share units outstanding (years) | 1 year 10 months 18 days | ||||
Stock Units | Former Chief Executive Officer | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted (in shares) | 377,525 | ||||
Stock Units | Chief Executive Officer | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted (in shares) | 1,130,653 | 983,010 | |||
Market-based Stock Awards | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unvested stock units (in shares) | 787,204 | ||||
Net aggregate intrinsic value of stock awards outstanding | $ 2.6 | ||||
Share-based Payment Arrangement, Tranche One | Market-based Stock Awards | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted (in shares) | 40,000 | ||||
Average common stock trading price (USD per share) | $ 11.72 | ||||
Share-based Payment Arrangement, Tranche Two | Market-based Stock Awards | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted (in shares) | 93,023 | ||||
Average common stock trading price (USD per share) | $ 5.80 | ||||
Share-based Payment Arrangement, Tranche Three | Market-based Stock Awards | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted (in shares) | 57,604 | ||||
Average common stock trading price (USD per share) | $ 4.34 | ||||
Share-Based Payment Arrangement, Tranche Four | Market-based Stock Awards | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted (in shares) | 31,250 | ||||
Average common stock trading price (USD per share) | $ 3.84 | ||||
Share-Based Payments Arrangement, Tranche Five | Market-based Stock Awards | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Average common stock trading price (USD per share) | $ 2.56 | ||||
Net aggregate intrinsic value of stock awards outstanding | $ 0.6 |
Employee Compensation and Be_10
Employee Compensation and Benefit Plans - Schedule of Liability Award Activity (Details) - Long-Term Incentive (LTI) Program | 12 Months Ended |
Dec. 31, 2019shares | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Unvested at beginning of year (in shares) | 0 |
Granted (in shares) | 3,766,143 |
Vested (in shares) | 0 |
Forfeited/Cancelled (in shares) | 114,528 |
Unvested at end of year (in shares) | 3,651,615 |
Employee Compensation and Be_11
Employee Compensation and Benefit Plans - Schedule of Assumptions used to Value Stock Awards Granted (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Monte Carlo [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate, minimum (percentage) | 1.16% | 1.15% | 1.12% |
Risk-free interest rate, maximum (percentage) | 2.40% | 1.18% | 1.18% |
Expected stock price volatility, minimum (percentage) | 73.00% | 71.00% | 71.00% |
Expected stock price volatility, maximum (percentage) | 76.00% | 74.00% | 77.00% |
Black Scholes [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate (percentage) | 2.60% | ||
Risk-free interest rate, minimum (percentage) | 2.79% | ||
Risk-free interest rate, maximum (percentage) | 3.14% | ||
Expected stock price volatility (percentage) | 68.00% | 67.00% | |
Expected option life (in years) | 8 years 6 months | 8 years 6 months | |
Minimum | Monte Carlo [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair value (USD per share) | $ 1.75 | $ 1.84 | $ 2 |
Minimum | Black Scholes [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair value (USD per share) | 1.37 | 2 | |
Maximum | Monte Carlo [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair value (USD per share) | 2.25 | 4.80 | $ 4.80 |
Maximum | Black Scholes [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair value (USD per share) | $ 1.55 | $ 3.36 |
Employee Compensation and Be_12
Employee Compensation and Benefit Plans - Schedule of Equity-based Compensation Expense Related to Stock Options and Stock Awards and Related Excess Tax Benefit (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Equity-based compensation expense: | |||
Awards | $ 2,697 | $ 2,366 | $ 5,624 |
(Tax deficiency) excess tax benefit related to share-based awards | (381) | 294 | 3,701 |
Stock Options | |||
Equity-based compensation expense: | |||
Awards | (121) | (368) | 1,457 |
Stock Awards | |||
Equity-based compensation expense: | |||
Awards | 2,818 | 2,734 | 4,167 |
Liability Awards | |||
Equity-based compensation expense: | |||
Awards | $ 1,082 | $ 0 | $ 0 |
Business Segment Reporting - Sc
Business Segment Reporting - Schedule of Segment Reporting Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Segment Reporting Information [Line Items] | |||||||||||
Loss on write-off of fixed assets, net | $ 0 | $ 0 | $ 8,502 | ||||||||
Results of Operations | |||||||||||
Revenue | $ 261,171 | $ 283,660 | $ 274,493 | $ 304,051 | $ 310,929 | $ 238,278 | $ 253,581 | $ 260,257 | 1,123,375 | 1,063,045 | 1,194,576 |
MSR valuation adjustments, net | 829 | 134,561 | (147,268) | (108,998) | (61,762) | (41,448) | (33,118) | (17,129) | (120,876) | (153,457) | (52,962) |
Operating expenses | 138,858 | 179,430 | 184,381 | 171,270 | 241,057 | 176,078 | 172,532 | 189,372 | 673,939 | 779,039 | 945,683 |
Other income (expense): | |||||||||||
Interest income | 17,104 | 14,026 | 15,965 | ||||||||
Interest expense | (114,129) | (103,371) | (126,927) | ||||||||
Pledged MSR liability expense | (372,089) | (171,670) | (236,311) | ||||||||
Gain on repurchase of senior secured notes | 5,099 | 0 | 0 | ||||||||
Bargain purchase gain | (381) | 64,036 | 0 | ||||||||
Gain on sale of MSRs, net | 453 | 1,325 | 10,537 | ||||||||
Other, net | 8,892 | (6,371) | (3,168) | ||||||||
Total other expense, net | (85,899) | (277,108) | (27,177) | (64,867) | (15,873) | (61,025) | (76,336) | (48,791) | (455,051) | (202,025) | (339,904) |
Loss from continuing operations before income taxes | 37,243 | $ (38,317) | $ (84,333) | (41,084) | (7,763) | $ (40,273) | $ (28,405) | $ 4,965 | (126,491) | (71,476) | (143,973) |
Total Assets | |||||||||||
Balance | 10,406,199 | 9,394,216 | 10,406,199 | 9,394,216 | 8,403,164 | ||||||
Forward Wholesale Lending Segment | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Loss on write-off of fixed assets, net | 6,800 | ||||||||||
Corporate Items and Other | |||||||||||
Other income (expense): | |||||||||||
Severance costs | 20,300 | 11,900 | |||||||||
Recovery of direct costs | $ 30,700 | ||||||||||
Operating Segments | Servicing | |||||||||||
Results of Operations | |||||||||||
Revenue | 985,102 | 951,224 | 1,041,290 | ||||||||
MSR valuation adjustments, net | (120,646) | (152,983) | (52,689) | ||||||||
Operating expenses | 536,153 | 619,484 | 663,695 | ||||||||
Other income (expense): | |||||||||||
Interest income | 8,051 | 5,383 | 783 | ||||||||
Interest expense | (47,347) | (41,830) | (57,284) | ||||||||
Pledged MSR liability expense | (372,172) | (172,342) | (236,311) | ||||||||
Gain on repurchase of senior secured notes | 0 | ||||||||||
Bargain purchase gain | 0 | 0 | |||||||||
Gain on sale of MSRs, net | 453 | 1,325 | 10,537 | ||||||||
Other, net | 11,942 | (3,241) | 4,049 | ||||||||
Total other expense, net | (399,073) | (210,705) | (278,226) | ||||||||
Loss from continuing operations before income taxes | (70,770) | (31,948) | 46,680 | ||||||||
Total Assets | |||||||||||
Balance | 3,378,515 | 3,306,208 | 3,378,515 | 3,306,208 | 3,033,243 | ||||||
Operating Segments | Lending | |||||||||||
Results of Operations | |||||||||||
Revenue | 125,086 | 93,672 | 127,475 | ||||||||
MSR valuation adjustments, net | (230) | (474) | (273) | ||||||||
Operating expenses | 84,280 | 82,432 | 127,785 | ||||||||
Other income (expense): | |||||||||||
Interest income | 7,277 | 6,061 | 10,914 | ||||||||
Interest expense | (7,911) | (7,311) | (13,893) | ||||||||
Pledged MSR liability expense | 0 | 672 | 0 | ||||||||
Gain on repurchase of senior secured notes | 0 | ||||||||||
Bargain purchase gain | 0 | 0 | |||||||||
Gain on sale of MSRs, net | 0 | 0 | 0 | ||||||||
Other, net | 791 | 966 | (869) | ||||||||
Total other expense, net | 157 | 388 | (3,848) | ||||||||
Loss from continuing operations before income taxes | 40,733 | 11,154 | (4,431) | ||||||||
Total Assets | |||||||||||
Balance | 6,459,367 | 5,603,481 | 6,459,367 | 5,603,481 | 4,945,456 | ||||||
Operating Segments | Corporate Items and Other | |||||||||||
Results of Operations | |||||||||||
Revenue | 13,187 | 18,149 | 25,811 | ||||||||
MSR valuation adjustments, net | 0 | 0 | 0 | ||||||||
Operating expenses | 53,506 | 77,123 | 154,203 | ||||||||
Other income (expense): | |||||||||||
Interest income | 1,776 | 2,582 | 4,268 | ||||||||
Interest expense | (58,871) | (54,230) | (55,750) | ||||||||
Pledged MSR liability expense | 83 | 0 | 0 | ||||||||
Gain on repurchase of senior secured notes | 5,099 | ||||||||||
Bargain purchase gain | (381) | 64,036 | |||||||||
Gain on sale of MSRs, net | 0 | 0 | 0 | ||||||||
Other, net | (3,841) | (4,096) | (6,348) | ||||||||
Total other expense, net | (56,135) | 8,292 | (57,830) | ||||||||
Loss from continuing operations before income taxes | (96,454) | (50,682) | (186,222) | ||||||||
Total Assets | |||||||||||
Balance | 568,317 | 484,527 | 568,317 | 484,527 | 424,465 | ||||||
Intersegment Eliminations | |||||||||||
Results of Operations | |||||||||||
Revenue | 0 | 0 | 0 | ||||||||
MSR valuation adjustments, net | 0 | 0 | 0 | ||||||||
Operating expenses | 0 | 0 | 0 | ||||||||
Other income (expense): | |||||||||||
Interest income | 0 | 0 | 0 | ||||||||
Interest expense | 0 | 0 | 0 | ||||||||
Pledged MSR liability expense | 0 | 0 | 0 | ||||||||
Gain on repurchase of senior secured notes | 0 | ||||||||||
Bargain purchase gain | 0 | ||||||||||
Gain on sale of MSRs, net | 0 | 0 | 0 | ||||||||
Other, net | 0 | 0 | 0 | ||||||||
Total other expense, net | 0 | 0 | 0 | ||||||||
Loss from continuing operations before income taxes | 0 | 0 | 0 | ||||||||
Total Assets | |||||||||||
Balance | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |
Business Segment Reporting - _2
Business Segment Reporting - Schedule of Depreciation and Amortization by Segment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Segment Reporting Information [Line Items] | |||
Depreciation expense | $ 31,911 | $ 27,202 | $ 26,886 |
Amortization of mortgage servicing rights | 51,788 | ||
Amortization of debt discount | 1,342 | 1,183 | 1,114 |
Amortization of debt issuance costs | 3,170 | 2,921 | 2,738 |
Servicing | |||
Segment Reporting Information [Line Items] | |||
Depreciation expense | 1,925 | 4,601 | 5,797 |
Amortization of mortgage servicing rights | 51,515 | ||
Amortization of debt discount | 0 | 0 | 0 |
Amortization of debt issuance costs | 71 | 0 | 0 |
Lending | |||
Segment Reporting Information [Line Items] | |||
Depreciation expense | 93 | 103 | 194 |
Amortization of mortgage servicing rights | 273 | ||
Amortization of debt discount | 0 | 0 | 0 |
Amortization of debt issuance costs | 0 | 0 | 0 |
Corporate Items and Other | |||
Segment Reporting Information [Line Items] | |||
Depreciation expense | 29,893 | 22,498 | 20,895 |
Amortization of mortgage servicing rights | 0 | ||
Amortization of debt discount | 1,342 | 1,183 | 1,114 |
Amortization of debt issuance costs | $ 3,099 | $ 2,921 | $ 2,738 |
Regulatory Requirements - Narra
Regulatory Requirements - Narrative (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Compliance with Regulatory Capital Requirements for Mortgage Companies [Line Items] | |
Number of days from fiscal year end that servicer is obliged to provide audited financial statements | 90 days |
Capital | $ 341.5 |
Percentage portfolio of loans serviced or subserviced | 2.00% |
Fannie Mae | |
Compliance with Regulatory Capital Requirements for Mortgage Companies [Line Items] | |
Capital requirement based on outstanding UPB of owned and subserviced portfolio | $ 268.7 |
California Department of Business Oversight | |
Compliance with Regulatory Capital Requirements for Mortgage Companies [Line Items] | |
Amount of debt forgiveness for borrowers | $ 198 |
Commitments - Narrative (Detail
Commitments - Narrative (Details) $ in Thousands | 12 Months Ended | 36 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($)state | Dec. 31, 2015state | |
Other Commitments [Line Items] | |||||
Threshold percentage of outstanding principal balance on maximum claim amount | 98.00% | ||||
Weighted average remaining lease term (years) | 3 years 3 months 18 days | ||||
Weighted average discount rate (percent) | 7.50% | ||||
Operating lease cost | $ 26,100 | ||||
Operating leases, rent expense | $ 16,600 | $ 18,800 | |||
Variable lease cost | 5,400 | ||||
Sublease income | 1,500 | ||||
Sublease income | 900 | 800 | |||
2020 sublease income | 1,700 | ||||
2021 sublease income | 1,600 | ||||
2022 sublease income | 1,200 | ||||
Mortgage servicing rights, at fair value | 1,486,395 | 1,457,149 | 671,962 | $ 679,256 | |
Servicing asset | 1,486,395 | 1,457,149 | |||
Servicing and subservicing fees | 975,507 | 937,083 | 991,597 | ||
Other financing liabilities | 972,595 | 1,062,090 | |||
Ancillary income | 29,710 | 27,229 | 21,691 | ||
Floating Rate Reverse Mortgage Loans | |||||
Other Commitments [Line Items] | |||||
Additional borrowing capacity to borrowers | 1,500,000 | ||||
Forward Mortgage Loan Interest Rate Lock Commitments | |||||
Other Commitments [Line Items] | |||||
Short-term commitments to lend | 204,000 | ||||
Reverse Mortgage Loan Interest Rate Lock Commitments | |||||
Other Commitments [Line Items] | |||||
Short-term commitments to lend | 28,500 | ||||
NRZ | |||||
Other Commitments [Line Items] | |||||
Mortgage servicing rights, at fair value | 915,100 | 894,002 | 499,042 | ||
Net servicing fees remitted to NRZ | 437,700 | 396,705 | 254,219 | ||
Bank servicing fees retained | 139,300 | 142,334 | 295,192 | ||
Ancillary income | $ 84,700 | ||||
NRZ | Unpaid Principal Balance | Customer Concentration Risk | |||||
Other Commitments [Line Items] | |||||
Concentration risk (percentage) | 56.00% | ||||
NRZ | Loan Count | Customer Concentration Risk | |||||
Other Commitments [Line Items] | |||||
Concentration risk (percentage) | 61.00% | ||||
NRZ | Delinquent Loans | Customer Concentration Risk | |||||
Other Commitments [Line Items] | |||||
Concentration risk (percentage) | 74.00% | ||||
NRZ | Servicing Portfolio | Customer Concentration Risk | |||||
Other Commitments [Line Items] | |||||
Concentration risk (percentage) | 20.00% | ||||
2017 Agreements and New RMSR Agreements | NRZ | |||||
Other Commitments [Line Items] | |||||
Other financing liabilities | $ 35,400 | $ 138,854 | $ 9,249 | ||
Multistate Mortgage Committee | |||||
Other Commitments [Line Items] | |||||
Number of states who are part of confidential supervisory memorandum of understanding | state | 5 | 6 |
Commitments - Schedule of Activ
Commitments - Schedule of Activity Related to HMBS Repurchases (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($)security | |
Schedule Of Repurchases Activity [Roll Forward] | |
Beginning balance, repurchase securities, number | security | 262 |
Additions, repurchase securities, number | security | 322 |
Recoveries, net, repurchase securities, number | security | (264) |
Transfers, repurchase securities, number | security | 0 |
Change in value, repurchase securities, number | security | 0 |
Ending balance, repurchase securities, number | security | 320 |
Beginning balance, repurchase securities, value | $ | $ 16,880 |
Additions, repurchase securities, value | $ | 44,188 |
Recoveries, repurchase securities, value | $ | (22,934) |
Transfers, repurchase securities, value | $ | 0 |
Change in value, repurchase securities, value | $ | (2,441) |
Ending balance, repurchase securities, value | $ | $ 35,693 |
Active | |
Schedule Of Repurchases Activity [Roll Forward] | |
Beginning balance, repurchase securities, number | security | 10 |
Additions, repurchase securities, number | security | 81 |
Recoveries, net, repurchase securities, number | security | (30) |
Transfers, repurchase securities, number | security | 1 |
Change in value, repurchase securities, number | security | 0 |
Ending balance, repurchase securities, number | security | 62 |
Beginning balance, repurchase securities, value | $ | $ 2,047 |
Additions, repurchase securities, value | $ | 19,671 |
Recoveries, repurchase securities, value | $ | (10,414) |
Transfers, repurchase securities, value | $ | (785) |
Change in value, repurchase securities, value | $ | 27 |
Ending balance, repurchase securities, value | $ | $ 10,546 |
Inactive | |
Schedule Of Repurchases Activity [Roll Forward] | |
Beginning balance, repurchase securities, number | security | 252 |
Additions, repurchase securities, number | security | 241 |
Recoveries, net, repurchase securities, number | security | (234) |
Transfers, repurchase securities, number | security | (1) |
Change in value, repurchase securities, number | security | 0 |
Ending balance, repurchase securities, number | security | 258 |
Beginning balance, repurchase securities, value | $ | $ 14,833 |
Additions, repurchase securities, value | $ | 24,517 |
Recoveries, repurchase securities, value | $ | (12,520) |
Transfers, repurchase securities, value | $ | 785 |
Change in value, repurchase securities, value | $ | (2,468) |
Ending balance, repurchase securities, value | $ | $ 25,147 |
Commitments - Schedule of Act_2
Commitments - Schedule of Activity Related to HMBS Repurchases (Footnote) (Details) - Maximum Claim Amount $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($)loan | |
Long-term Purchase Commitment [Line Items] | |
Number of maximum claim amount repurchases loans | loan | 189 |
Amount of maximum claim amount repurchases | $ | $ 38.4 |
Commitments - Schedule of Futur
Commitments - Schedule of Future Minimum Rental Commitments under Non-cancelable Operating Leases (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2020 | $ 16,652 |
2021 | 15,356 |
2022 | 13,102 |
2023 | 3,088 |
2024 | 697 |
Thereafter | 654 |
Total minimum lease payments, gross | 49,549 |
Less: Adjustment to present value | (5,061) |
Total lease payments, net | $ 44,488 |
Contingencies - Narrative (Deta
Contingencies - Narrative (Details) | Feb. 01, 2018state | Apr. 30, 2019USD ($) | Apr. 30, 2017USD ($)state | Dec. 31, 2019USD ($)loan | Dec. 31, 2018USD ($)loan | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($)state | Dec. 31, 2015state |
Loss Contingencies [Line Items] | ||||||||
Accrued legal fees and settlements | $ 30,663,000 | $ 62,763,000 | ||||||
Loss contingency accrual | $ 30,663,000 | 62,763,000 | $ 51,057,000 | $ 93,797,000 | ||||
Number of states charging with regulatory action | state | 29 | |||||||
Number of jurisdictions where regulatory actions were resolved | state | 29 | |||||||
Number of loan files to be tested relating to escrow on residential real property | loan | 9,000 | |||||||
Aggregate cash payments in connection with legal and regulatory settlements | $ 30,356,000 | 12,983,000 | 174,941,000 | |||||
Number of state attorneys general charging with regulatory action | state | 2 | |||||||
Outstanding representation and warranty repurchase demands | $ 47,000,000 | $ 51,300,000 | ||||||
Outstanding representation and warranty repurchase demands, number of loans | loan | 285 | 316 | ||||||
Representation warranty and compensatory fees obligations | $ 50,838,000 | $ 49,267,000 | 19,229,000 | 24,285,000 | ||||
Indemnification claims recovered | $ 29,900,000 | |||||||
Securities Class Action | ||||||||
Loss Contingencies [Line Items] | ||||||||
Accrued legal fees and settlements | 30,700,000 | |||||||
Sold Advances | ||||||||
Loss Contingencies [Line Items] | ||||||||
Representation warranty and compensatory fees obligations | 18,000,000 | |||||||
Consumer Financial Protection Bureau | ||||||||
Loss Contingencies [Line Items] | ||||||||
Loss contingency accrual | $ 12,500,000 | |||||||
Multistate Mortgage Committee | ||||||||
Loss Contingencies [Line Items] | ||||||||
Number of states who are part of confidential supervisory memorandum of understanding | state | 5 | 6 | ||||||
Florida Attorney General | ||||||||
Loss Contingencies [Line Items] | ||||||||
Injunctive and equitable relief, costs, and civil money penalties sought | $ 10,000 | |||||||
Massachusetts Regulatory Agency | ||||||||
Loss Contingencies [Line Items] | ||||||||
Aggregate cash payments in connection with legal and regulatory settlements | $ 1,000,000 | |||||||
Litigation settlement expense | $ 675,000 |
Contingencies - Schedule of Cha
Contingencies - Schedule of Changes in Liability for Representation and Warrant Obligations, Compensatory Fees for Foreclosures that may Ultimately Exceed Investor Timelines and Related Indemnification Obligations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Indemnification Obligations Liability [Roll Forward] | |||
Beginning balance | $ 49,267 | $ 19,229 | $ 24,285 |
Provision (reversal) for representation and warranty obligations | (11,701) | 4,649 | (1,371) |
New production reserves | 304 | 7,437 | 702 |
Obligation assumed in connection with the acquisition of PHH | 0 | 27,736 | 0 |
Charge-offs and other | 12,968 | (9,784) | (4,387) |
Ending balance | $ 50,838 | $ 49,267 | $ 19,229 |
Quarterly Results of Operatio_3
Quarterly Results of Operations (Unaudited) - Schedule of Quarterly Results of Operations (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||
Revenue | $ 261,171 | $ 283,660 | $ 274,493 | $ 304,051 | $ 310,929 | $ 238,278 | $ 253,581 | $ 260,257 | $ 1,123,375 | $ 1,063,045 | $ 1,194,576 | |
MSR valuation adjustments, net | 829 | 134,561 | (147,268) | (108,998) | (61,762) | (41,448) | (33,118) | (17,129) | (120,876) | (153,457) | (52,962) | |
Expenses | 138,858 | 179,430 | 184,381 | 171,270 | 241,057 | 176,078 | 172,532 | 189,372 | 673,939 | 779,039 | 945,683 | |
Other expense, net | (85,899) | (277,108) | (27,177) | (64,867) | (15,873) | (61,025) | (76,336) | (48,791) | (455,051) | (202,025) | (339,904) | |
Loss from continuing operations before income taxes | 37,243 | (38,317) | (84,333) | (41,084) | (7,763) | (40,273) | (28,405) | 4,965 | (126,491) | (71,476) | (143,973) | |
Income tax expense (benefit) | 2,370 | 4,450 | 5,404 | 3,410 | (4,012) | 845 | 1,348 | 2,348 | 15,634 | 529 | (15,516) | |
Loss from continuing operations, net of tax | (3,751) | (41,118) | (29,753) | 2,617 | (142,125) | (72,005) | (128,457) | |||||
Income from discontinued operations, net of tax | $ 1,409 | 1,409 | 0 | 0 | 0 | 0 | 1,409 | 0 | ||||
Net loss | (2,342) | (41,118) | (29,753) | 2,617 | (142,125) | (70,596) | (128,457) | |||||
Net income attributable to non-controlling interests | 0 | (29) | (78) | (69) | $ 0 | $ (176) | $ 491 | |||||
Net loss attributable to Ocwen common stockholders | $ 34,873 | $ (42,767) | $ (89,737) | $ (44,494) | $ (2,342) | $ (41,147) | $ (29,831) | $ 2,548 | ||||
Earnings (loss) per share attributable to Ocwen stockholders | ||||||||||||
Continuing operations (USD per share) | $ 0.26 | $ (0.32) | $ (0.67) | $ (0.33) | $ (0.03) | $ (0.31) | $ (0.22) | $ 0.02 | $ (1.06) | $ (0.54) | $ (1.01) | |
Discontinued operations (USD per share) | $ 0.26 | $ (0.32) | $ (0.67) | $ (0.33) | 0.01 | 0 | 0 | 0 | 0 | 0.01 | 0 | |
Total attributable to Ocwen stockholders | $ (0.02) | $ (0.31) | $ (0.22) | $ 0.02 | $ (1.06) | $ (0.53) | $ (1.01) |
Quarterly Results of Operatio_4
Quarterly Results of Operations (Unaudited) - Schedule of Quarterly Results of Operations (Unaudited) (Footnote) (Details) - USD ($) $ in Thousands | Oct. 04, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Business Acquisition [Line Items] | ||||
Bargain purchase gain | $ (381) | $ 64,036 | $ 0 | |
PHH Corporation | ||||
Business Acquisition [Line Items] | ||||
Bargain purchase gain | $ 64,036 | $ 63,655 |
Subsequent Events - Narrative (
Subsequent Events - Narrative (Details) - USD ($) | Jan. 27, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Feb. 20, 2020 | Feb. 03, 2020 | Jul. 01, 2019 | Oct. 04, 2018 |
Subsequent Event [Line Items] | ||||||||||
Maximum borrowing capacity | $ 300,000,000 | |||||||||
UPB of rights to MSRs sold | $ 76,100,000,000 | $ 76,100,000,000 | ||||||||
Service fee collected on behalf of counterparty | 577,015,000 | $ 539,039,000 | $ 549,411,000 | |||||||
Other financing liabilities | 972,595,000 | $ 972,595,000 | 1,062,090,000 | |||||||
Subsequent Event | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Stock repurchase program, authorized aggregate amount | $ 5,000,000 | |||||||||
Estimated deboarding fees receivable | $ 6,100,000 | |||||||||
Senior Secured Term Loan | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Periodic prepayment of SSTL | $ 4,200,000 | 6,400,000 | ||||||||
Senior Secured Term Loan | Secured Debt | Subsequent Event | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Repayments of debt | $ 126,100,000 | |||||||||
Maximum borrowing capacity | $ 200,000,000 | |||||||||
Debt instrument, prepayment premium until January 27, 2022 (percentage) | 2.00% | |||||||||
Periodic prepayment of SSTL | $ 5,000,000 | |||||||||
Eurodollar | Senior Secured Term Loan | Secured Debt | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Basis spread on variable rate (percentage) | 5.00% | |||||||||
Until January 27, 2021 | Eurodollar | Senior Secured Term Loan | Secured Debt | Subsequent Event | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Basis spread on variable rate (percentage) | 6.00% | |||||||||
Until January 27, 2021 | Base Rate | Senior Secured Term Loan | Secured Debt | Subsequent Event | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Basis spread on variable rate (percentage) | 5.00% | |||||||||
Subsequent to January 27, 2021 | Eurodollar | Senior Secured Term Loan | Secured Debt | Subsequent Event | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Basis spread on variable rate (percentage) | 6.50% | |||||||||
Subsequent to January 27, 2021 | Base Rate | Senior Secured Term Loan | Secured Debt | Subsequent Event | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Basis spread on variable rate (percentage) | 5.50% | |||||||||
NRZ | ||||||||||
Subsequent Event [Line Items] | ||||||||||
UPB of rights to MSRs sold | 18,500,000,000 | $ 18,500,000,000 | ||||||||
PHH Corporation | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Service fee collected on behalf of counterparty | 28,800,000 | $ 7,400,000 | ||||||||
PHH Corporation | NRZ | ||||||||||
Subsequent Event [Line Items] | ||||||||||
UPB of rights to MSRs sold | 35,500,000,000 | 35,500,000,000 | ||||||||
Unpaid principal balance on servicing assets acquired | $ 42,300,000,000 | |||||||||
PHH Corporation | NRZ | Subsequent Event | ||||||||||
Subsequent Event [Line Items] | ||||||||||
UPB of rights to MSRs sold | $ 42,100,000,000 | |||||||||
NRZ | Unrelated Party | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Unpaid principal balance on servicing assets acquired | $ 6,600,000,000 | $ 6,600,000,000 | ||||||||
Servicing Portfolio | Customer Concentration Risk | NRZ | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Concentration risk (percentage) | 20.00% | |||||||||
Servicing Portfolio | Customer Concentration Risk | NRZ | Subsequent Event | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Percentage of initial mortgage loans (percentage) | 25.00% | |||||||||
Loan Servicing And Subservicing Fees | Customer Concentration Risk | NRZ | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Concentration risk (percentage) | 4.00% | |||||||||
Total Assets | Customer Concentration Risk | NRZ | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Concentration risk (percentage) | 3.00% |