New Residential Investment Corp.
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(Exact name of registrant as specified in its charter)
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Delaware
|
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45-3449660
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(State or other jurisdiction of
incorporation or organization)
|
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(I.R.S. Employer Identification No.)
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|
|
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1345 Avenue of the Americas, New York, NY
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10105
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(Address of principal executive offices)
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(Zip Code)
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(212) 798-3150
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(Registrant’s telephone number, including area code)
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•
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reductions in cash flows received from our investments;
|
•
|
the quality and size of the investment pipeline and our ability to take advantage of investment opportunities at attractive risk-adjusted prices;
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•
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Servicer advances may not be recoverable or may take longer to recover than we expect, which could cause us to fail to achieve our targeted return on our investment in Servicer Advance Investments and servicer advances receivable;
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•
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our ability to deploy capital accretively and the timing of such deployment;
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•
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our counterparty concentration and default risks in Nationstar, Ocwen, OneMain, Ditech, PHH and other third parties;
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•
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events, conditions or actions that might occur at Nationstar, Ocwen, OneMain, Ditech, PHH and other third parties, as well as the continued effect of previously disclosed events;
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•
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a lack of liquidity surrounding our investments, which could impede our ability to vary our portfolio in an appropriate manner;
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•
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the impact that risks associated with subprime mortgage loans and consumer loans, as well as deficiencies in servicing and foreclosure practices, may have on the value of our MSRs, Excess MSRs, Servicer Advance Investments, RMBS, residential mortgage loan and consumer loan portfolios;
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•
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the risks that default and recovery rates on our MSRs, Excess MSRs, Servicer Advance Investments, RMBS, residential mortgage loans and consumer loans deteriorate compared to our underwriting estimates;
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•
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changes in prepayment rates on the loans underlying certain of our assets, including, but not limited to, our MSRs or Excess MSRs;
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•
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the risk that projected recapture rates on the loan pools underlying our MSRs or Excess MSRs are not achieved;
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•
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the relationship between yields on assets which are paid off and yields on assets in which such monies can be reinvested;
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•
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the relative spreads between the yield on the assets in which we invest and the cost of financing;
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•
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changes in economic conditions generally and the real estate and bond markets specifically;
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•
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adverse changes in the financing markets we access affecting our ability to finance our investments on attractive terms, or at all;
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•
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changing risk assessments by lenders that potentially lead to increased margin calls, not extending our repurchase agreements or other financings in accordance with their current terms or not entering into new financings with us;
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•
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changes in interest rates and/or credit spreads, as well as the success of any hedging strategy we may undertake in relation to such changes;
|
•
|
impairments in the value of the collateral underlying our investments and the relation of any such impairments to our judgments as to whether changes in the market value of our securities or loans are temporary or not and whether circumstances bearing on the value of such assets warrant changes in carrying values;
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•
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the availability and terms of capital for future investments;
|
•
|
competition within the finance and real estate industries;
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•
|
the legislative/regulatory environment, including, but not limited to, the impact of the Dodd-Frank Act, U.S. government programs intended to grow the economy, potential tax reform, the federal conservatorship of Fannie Mae and Freddie Mac and legislation that permits modification of the terms of residential mortgage loans;
|
•
|
our ability to maintain our qualification as a real estate investment trust (“REIT”) for U.S. federal income tax purposes and the potentially onerous consequences that any failure to maintain such qualification would have on our business;
|
•
|
our ability to maintain our exclusion from registration under the Investment Company Act of 1940 (the “1940 Act”) and the fact that maintaining such exclusion imposes limits on our operations;
|
•
|
the risks related to HLSS liabilities that we have assumed;
|
•
|
the impact of current or future legal proceedings and regulatory investigations and inquiries;
|
•
|
the impact of any material transactions with FIG LLC (the “Manager”) or one of its affiliates, including the impact of any actual, potential or perceived conflicts of interest;
|
•
|
effects of the pending merger of Fortress Investment Group LLC with affiliates of SoftBank Group Corp.; and
|
•
|
the risk that GSE or other regulatory initiatives or actions may adversely affect returns from investments in MSRs and Excess MSRs.
|
•
|
should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements proved to be inaccurate;
|
•
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have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement;
|
•
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may apply standards of materiality in a way that is different from what may be viewed as material to you or other investors; and
|
•
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were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments.
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PAGE
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Part I. Financial Information
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Part II. Other Information
|
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|
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(dollars in thousands)
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
|
(Unaudited)
|
|
|||||
Assets
|
|
|
|
||||
Investments in:
|
|
|
|
||||
Excess mortgage servicing rights, at fair value
|
$
|
1,178,308
|
|
|
$
|
1,399,455
|
|
Excess mortgage servicing rights, equity method investees, at fair value
|
175,633
|
|
|
194,788
|
|
||
Mortgage servicing rights, at fair value
|
1,702,749
|
|
|
659,483
|
|
||
Mortgage servicing rights financing receivable, at fair value
|
607,396
|
|
|
—
|
|
||
Servicer advance investments, at fair value
(A)
|
4,044,802
|
|
|
5,706,593
|
|
||
Real estate securities, available-for-sale
|
6,714,846
|
|
|
5,073,858
|
|
||
Residential mortgage loans, held-for-investment
|
702,227
|
|
|
190,761
|
|
||
Residential mortgage loans, held-for-sale
(A)
|
1,426,751
|
|
|
696,665
|
|
||
Real estate owned
|
107,281
|
|
|
59,591
|
|
||
Consumer loans, held-for-investment
(A)
|
1,467,933
|
|
|
1,799,486
|
|
||
Consumer loans, equity method investees
|
46,322
|
|
|
—
|
|
||
Cash and cash equivalents
(A)
|
279,760
|
|
|
290,602
|
|
||
Restricted cash
|
152,047
|
|
|
163,095
|
|
||
Servicer advances receivable
|
657,255
|
|
|
81,582
|
|
||
Trades receivable
|
1,785,708
|
|
|
1,687,788
|
|
||
Deferred tax asset, net
|
32,440
|
|
|
151,284
|
|
||
Other assets
|
323,375
|
|
|
244,498
|
|
||
|
$
|
21,404,833
|
|
|
$
|
18,399,529
|
|
|
|
|
|
||||
Liabilities and Equity
|
|
|
|
||||
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Repurchase agreements
|
$
|
7,848,028
|
|
|
$
|
5,190,631
|
|
Notes and bonds payable
(A)
|
7,236,967
|
|
|
7,990,605
|
|
||
Trades payable
|
1,076,086
|
|
|
1,381,968
|
|
||
Due to affiliates
|
79,624
|
|
|
47,348
|
|
||
Dividends payable
|
153,681
|
|
|
115,356
|
|
||
Accrued expenses and other liabilities
|
331,243
|
|
|
205,444
|
|
||
|
16,725,629
|
|
|
14,931,352
|
|
||
|
|
|
|
||||
Commitments and Contingencies
|
|
|
|
|
|
||
|
|
|
|
||||
Equity
|
|
|
|
||||
Common Stock, $0.01 par value, 2,000,000,000 shares authorized, 307,361,309 and 250,773,117 issued and outstanding at September 30, 2017 and December 31, 2016, respectively
|
3,074
|
|
|
2,507
|
|
||
Additional paid-in capital
|
3,760,372
|
|
|
2,920,730
|
|
||
Retained earnings
|
424,854
|
|
|
210,500
|
|
||
Accumulated other comprehensive income (loss)
|
383,312
|
|
|
126,363
|
|
||
Total New Residential stockholders’ equity
|
4,571,612
|
|
|
3,260,100
|
|
||
Noncontrolling interests in equity of consolidated subsidiaries
|
107,592
|
|
|
208,077
|
|
||
Total Equity
|
4,679,204
|
|
|
3,468,177
|
|
||
|
$
|
21,404,833
|
|
|
$
|
18,399,529
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS, CONTINUED
|
(dollars in thousands)
|
(A)
|
New Residential’s Condensed Consolidated Balance Sheets include the assets and liabilities of certain consolidated VIEs, the Buyer (Note 6), the RPL Borrowers (Note 8), and the Consumer Loan SPVs (Note 9), which primarily hold investments in Servicer Advance Investments, residential mortgage loans, and consumer loans, respectively, financed with notes and bonds payable. The balance sheets of the Buyer, the RPL Borrowers and the Consumer Loan SPVs are included in Notes 6, 8 and 9, respectively. The creditors of the Buyer, the RPL Borrowers, and the Consumer Loan SPVs do not have recourse to the general credit of New Residential and the assets of the Buyer, the RPL Borrowers, and the Consumer Loan SPVs are not directly available to satisfy New Residential’s obligations.
|
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
|
(dollars in thousands, except per share data)
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Interest income
|
$
|
397,722
|
|
|
$
|
282,388
|
|
|
$
|
1,162,212
|
|
|
$
|
749,901
|
|
Interest expense
|
125,278
|
|
|
96,488
|
|
|
338,664
|
|
|
278,401
|
|
||||
Net Interest Income
|
272,444
|
|
|
185,900
|
|
|
823,548
|
|
|
471,500
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Impairment
|
|
|
|
|
|
|
|
||||||||
Other-than-temporary impairment (OTTI) on securities
|
1,509
|
|
|
1,765
|
|
|
8,736
|
|
|
7,838
|
|
||||
Valuation and loss provision on loans and real estate owned
|
26,700
|
|
|
18,275
|
|
|
65,381
|
|
|
41,845
|
|
||||
|
28,209
|
|
|
20,040
|
|
|
74,117
|
|
|
49,683
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net interest income after impairment
|
244,235
|
|
|
165,860
|
|
|
749,431
|
|
|
421,817
|
|
||||
Servicing revenue, net
|
58,014
|
|
|
—
|
|
|
269,467
|
|
|
—
|
|
||||
Other Income
|
|
|
|
|
|
|
|
||||||||
Change in fair value of investments in excess mortgage servicing rights
|
(14,291
|
)
|
|
(17,060
|
)
|
|
(32,650
|
)
|
|
(24,397
|
)
|
||||
Change in fair value of investments in excess mortgage servicing rights, equity method investees
|
2,054
|
|
|
6,261
|
|
|
6,056
|
|
|
8,608
|
|
||||
Change in fair value of investments in mortgage servicing rights financing receivable
|
70,232
|
|
|
—
|
|
|
75,828
|
|
|
—
|
|
||||
Change in fair value of servicer advance investments
|
10,941
|
|
|
21,606
|
|
|
70,469
|
|
|
4,328
|
|
||||
Gain on consumer loans investment
|
—
|
|
|
—
|
|
|
—
|
|
|
9,943
|
|
||||
Gain on remeasurement of consumer loans investment
|
—
|
|
|
—
|
|
|
—
|
|
|
71,250
|
|
||||
Gain (loss) on settlement of investments, net
|
1,553
|
|
|
(11,165
|
)
|
|
1,250
|
|
|
(37,682
|
)
|
||||
Earnings from investments in consumer loans, equity method investees
|
6,769
|
|
|
—
|
|
|
12,649
|
|
|
—
|
|
||||
Other income (loss), net
|
9,887
|
|
|
27,059
|
|
|
7,696
|
|
|
6,850
|
|
||||
|
87,145
|
|
|
26,701
|
|
|
141,298
|
|
|
38,900
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating Expenses
|
|
|
|
|
|
|
|
||||||||
General and administrative expenses
|
19,919
|
|
|
8,777
|
|
|
47,788
|
|
|
28,082
|
|
||||
Management fee to affiliate
|
14,187
|
|
|
10,536
|
|
|
41,447
|
|
|
30,552
|
|
||||
Incentive compensation to affiliate
|
19,491
|
|
|
7,075
|
|
|
72,123
|
|
|
13,200
|
|
||||
Loan servicing expense
|
13,690
|
|
|
14,187
|
|
|
40,068
|
|
|
30,037
|
|
||||
Subservicing expense
|
49,773
|
|
|
—
|
|
|
123,435
|
|
|
—
|
|
||||
|
117,060
|
|
|
40,575
|
|
|
324,861
|
|
|
101,871
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Income Before Income Taxes
|
272,334
|
|
|
151,986
|
|
|
835,335
|
|
|
358,846
|
|
||||
Income tax expense (benefit)
|
32,613
|
|
|
20,900
|
|
|
121,053
|
|
|
18,195
|
|
||||
Net Income
|
$
|
239,721
|
|
|
$
|
131,086
|
|
|
$
|
714,282
|
|
|
$
|
340,651
|
|
Noncontrolling interests in Income of Consolidated Subsidiaries
|
$
|
13,600
|
|
|
$
|
32,178
|
|
|
$
|
45,051
|
|
|
$
|
61,355
|
|
Net Income Attributable to Common Stockholders
|
$
|
226,121
|
|
|
$
|
98,908
|
|
|
$
|
669,231
|
|
|
$
|
279,296
|
|
|
|
|
|
|
|
|
|
||||||||
Net Income Per Share of Common Stock
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.74
|
|
|
$
|
0.41
|
|
|
$
|
2.23
|
|
|
$
|
1.19
|
|
Diluted
|
$
|
0.73
|
|
|
$
|
0.41
|
|
|
$
|
2.21
|
|
|
$
|
1.19
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted Average Number of Shares of Common
Stock Outstanding |
|
|
|
|
|
|
|
||||||||
Basic
|
307,361,309
|
|
|
240,601,691
|
|
|
300,511,550
|
|
|
233,875,067
|
|
||||
Diluted
|
309,207,345
|
|
|
241,099,381
|
|
|
302,357,147
|
|
|
234,184,611
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Dividends Declared per Share of Common Stock
|
$
|
0.50
|
|
|
$
|
0.46
|
|
|
$
|
1.48
|
|
|
$
|
1.38
|
|
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
|
(dollars in thousands)
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Comprehensive income (loss), net of tax
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
239,721
|
|
|
$
|
131,086
|
|
|
$
|
714,282
|
|
|
$
|
340,651
|
|
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
||||||||
Net unrealized gain (loss) on securities
|
75,845
|
|
|
52,138
|
|
|
277,805
|
|
|
108,679
|
|
||||
Reclassification of net realized (gain)
loss on securities into earnings |
(5,833
|
)
|
|
2,444
|
|
|
(20,856
|
)
|
|
(7,234
|
)
|
||||
|
70,012
|
|
|
54,582
|
|
|
256,949
|
|
|
101,445
|
|
||||
Total comprehensive income
|
$
|
309,733
|
|
|
$
|
185,668
|
|
|
$
|
971,231
|
|
|
$
|
442,096
|
|
Comprehensive income attributable
to noncontrolling interests |
$
|
13,600
|
|
|
$
|
32,178
|
|
|
$
|
45,051
|
|
|
$
|
61,355
|
|
Comprehensive income attributable
to common stockholders |
$
|
296,133
|
|
|
$
|
153,490
|
|
|
$
|
926,180
|
|
|
$
|
380,741
|
|
(dollars in thousands)
|
|
Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
Shares
|
|
Amount
|
|
Additional Paid-in Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Income
|
|
Total New Residential Stockholders’ Equity
|
|
Noncontrolling
Interests in Equity of Consolidated Subsidiaries
|
|
Total Equity
|
|||||||||||||||
Equity - December 31, 2016
|
250,773,117
|
|
|
$
|
2,507
|
|
|
$
|
2,920,730
|
|
|
$
|
210,500
|
|
|
$
|
126,363
|
|
|
$
|
3,260,100
|
|
|
$
|
208,077
|
|
|
$
|
3,468,177
|
|
Dividends declared
|
—
|
|
|
—
|
|
|
—
|
|
|
(454,877
|
)
|
|
—
|
|
|
(454,877
|
)
|
|
—
|
|
|
(454,877
|
)
|
|||||||
Capital contributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Capital distributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(70,493
|
)
|
|
(70,493
|
)
|
|||||||
Issuance of common stock
|
56,545,787
|
|
|
566
|
|
|
833,963
|
|
|
—
|
|
|
—
|
|
|
834,529
|
|
|
—
|
|
|
834,529
|
|
|||||||
Purchase of noncontrolling interests in the Buyer
|
—
|
|
|
—
|
|
|
9,183
|
|
|
—
|
|
|
—
|
|
|
9,183
|
|
|
(75,043
|
)
|
|
(65,860
|
)
|
|||||||
Other dilution
|
—
|
|
|
—
|
|
|
(4,202
|
)
|
|
—
|
|
|
—
|
|
|
(4,202
|
)
|
|
—
|
|
|
(4,202
|
)
|
|||||||
Director share grants
|
42,405
|
|
|
1
|
|
|
698
|
|
|
—
|
|
|
—
|
|
|
699
|
|
|
—
|
|
|
699
|
|
|||||||
Comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
669,231
|
|
|
—
|
|
|
669,231
|
|
|
45,051
|
|
|
714,282
|
|
|||||||
Net unrealized gain (loss) on securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
277,805
|
|
|
277,805
|
|
|
—
|
|
|
277,805
|
|
|||||||
Reclassification of net realized (gain) loss on securities into earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(20,856
|
)
|
|
(20,856
|
)
|
|
—
|
|
|
(20,856
|
)
|
|||||||
Total comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
926,180
|
|
|
45,051
|
|
|
971,231
|
|
|||||||
Equity - September 30, 2017
|
307,361,309
|
|
|
$
|
3,074
|
|
|
$
|
3,760,372
|
|
|
$
|
424,854
|
|
|
$
|
383,312
|
|
|
$
|
4,571,612
|
|
|
$
|
107,592
|
|
|
$
|
4,679,204
|
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
|
(dollars in thousands)
|
|
Nine Months Ended
September 30, |
||||||
|
2017
|
|
2016
|
||||
Cash Flows From Operating Activities
|
|
|
|
||||
Net income
|
$
|
714,282
|
|
|
$
|
340,651
|
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
|
|
|
||||
Change in fair value of investments in excess mortgage servicing rights
|
32,650
|
|
|
24,397
|
|
||
Change in fair value of investments in excess mortgage servicing rights, equity method investees
|
(6,056
|
)
|
|
(8,608
|
)
|
||
Change in fair value of investments in mortgage servicing rights financing receivable
|
(75,828
|
)
|
|
—
|
|
||
Change in fair value of servicer advance investments
|
(70,469
|
)
|
|
(4,328
|
)
|
||
(Gain) / loss on remeasurement of consumer loans investment
|
—
|
|
|
(71,250
|
)
|
||
(Gain) / loss on settlement of investments (net)
|
(1,250
|
)
|
|
37,682
|
|
||
Earnings from investments in consumer loans, equity method investees
|
(12,649
|
)
|
|
—
|
|
||
Unrealized (gain) / loss on derivative instruments
|
124
|
|
|
15,112
|
|
||
Unrealized (gain) / loss on other ABS
|
(340
|
)
|
|
226
|
|
||
(Gain) / loss on transfer of loans to REO
|
(16,791
|
)
|
|
(14,660
|
)
|
||
(Gain) / loss on transfer of loans to other assets
|
(359
|
)
|
|
(3,021
|
)
|
||
(Gain) / loss on Excess MSR recapture agreements
|
(1,948
|
)
|
|
(2,188
|
)
|
||
(Gain) / loss on Ocwen common stock
|
(6,987
|
)
|
|
—
|
|
||
Accretion and other amortization
|
(811,922
|
)
|
|
(514,522
|
)
|
||
Other-than-temporary impairment
|
8,736
|
|
|
7,838
|
|
||
Valuation and loss provision on loans and real estate owned
|
65,381
|
|
|
41,845
|
|
||
Non-cash portions of servicing revenue, net
|
81,986
|
|
|
—
|
|
||
Non-cash directors’ compensation
|
699
|
|
|
300
|
|
||
Deferred tax provision
|
114,016
|
|
|
12,998
|
|
||
Changes in:
|
|
|
|
||||
Servicer advances receivable
|
(7,774
|
)
|
|
—
|
|
||
Other assets
|
(35,799
|
)
|
|
191,939
|
|
||
Due to affiliates
|
32,276
|
|
|
(5,175
|
)
|
||
Accrued expenses and other liabilities
|
48,442
|
|
|
12,136
|
|
||
Other operating cash flows:
|
|
|
|
||||
Interest received from excess mortgage servicing rights
|
53,067
|
|
|
119,386
|
|
||
Interest received from servicer advance investments
|
136,431
|
|
|
132,758
|
|
||
Interest received from Non-Agency RMBS
|
170,931
|
|
|
73,108
|
|
||
Interest received from residential mortgage loans, held-for-investment
|
5,906
|
|
|
2,815
|
|
||
Interest received from PCD consumer loans, held-for-investment
|
40,762
|
|
|
34,265
|
|
||
Distributions of earnings from investments in excess mortgage servicing rights, equity method investees
|
11,054
|
|
|
18,025
|
|
||
Distributions of earnings from investments in consumer loans, equity method investees
|
4,291
|
|
|
—
|
|
||
Purchases of residential mortgage loans, held-for-sale
|
(4,146,740
|
)
|
|
(788,824
|
)
|
||
Proceeds from sales of purchased residential mortgage loans, held-for-sale
|
2,986,992
|
|
|
802,110
|
|
||
Principal repayments from purchased residential mortgage loans, held-for-sale
|
69,069
|
|
|
52,805
|
|
||
Net cash provided by (used in) operating activities
|
(617,817
|
)
|
|
507,820
|
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED), CONTINUED
|
(dollars in thousands)
|
|
Nine Months Ended
September 30, |
||||
|
2017
|
|
2016
|
||
Cash Flows From Investing Activities
|
|
|
|
||
Acquisition of investments in excess mortgage servicing rights
|
—
|
|
|
(2,022
|
)
|
SpringCastle Transaction, net of cash acquired
|
—
|
|
|
(49,943
|
)
|
Restricted cash acquired from SpringCastle Transaction
|
—
|
|
|
74,603
|
|
Purchase of servicer advance investments
|
(9,328,137
|
)
|
|
(11,588,537
|
)
|
Purchase of MSRs, MSR Financing Receivables and servicer advances receivable
|
(1,586,063
|
)
|
|
—
|
|
Purchase of Agency RMBS
|
(6,352,488
|
)
|
|
(4,763,374
|
)
|
Purchase of Non-Agency RMBS
|
(2,070,898
|
)
|
|
(2,154,890
|
)
|
Purchase of residential mortgage loans
|
(585,983
|
)
|
|
(319
|
)
|
Purchase of derivatives
|
—
|
|
|
(4,457
|
)
|
Purchase of real estate owned and other assets
|
(25,667
|
)
|
|
(10,936
|
)
|
Purchase of investment in consumer loans, equity method investees
|
(344,902
|
)
|
|
(92,069
|
)
|
Draws on revolving consumer loans
|
(41,930
|
)
|
|
(33,137
|
)
|
Payments for settlement of derivatives
|
(146,898
|
)
|
|
(73,570
|
)
|
Return of investments in excess mortgage servicing rights
|
142,626
|
|
|
142,718
|
|
Return of investments in excess mortgage servicing rights, equity method investees
|
14,157
|
|
|
11,900
|
|
Return of investments in consumer loans, equity method investees
|
276,601
|
|
|
—
|
|
Principal repayments from servicer advance investments
|
10,898,739
|
|
|
13,101,409
|
|
Principal repayments from Agency RMBS
|
76,744
|
|
|
67,738
|
|
Principal repayments from Non-Agency RMBS
|
615,657
|
|
|
364,310
|
|
Principal repayments from residential mortgage loans
|
59,673
|
|
|
31,092
|
|
Principal repayments from consumer loans
|
312,132
|
|
|
199,022
|
|
Proceeds from sale of Agency RMBS
|
6,205,573
|
|
|
4,774,116
|
|
Proceeds from sale of Non-Agency RMBS
|
166,460
|
|
|
95,683
|
|
Proceeds from settlement of derivatives
|
81,505
|
|
|
9,642
|
|
Proceeds from sale of real estate owned
|
63,476
|
|
|
51,941
|
|
Net cash provided by (used in) investing activities
|
(1,569,623
|
)
|
|
150,920
|
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED), CONTINUED
|
(dollars in thousands)
|
|
Nine Months Ended
September 30, |
||||||
|
2017
|
|
2016
|
||||
Cash Flows From Financing Activities
|
|
|
|
||||
Repayments of repurchase agreements
|
(34,057,218
|
)
|
|
(21,179,260
|
)
|
||
Margin deposits under repurchase agreements and derivatives
|
(820,678
|
)
|
|
(274,645
|
)
|
||
Repayments of notes and bonds payable
|
(7,323,512
|
)
|
|
(6,786,408
|
)
|
||
Payment of deferred financing fees
|
(5,702
|
)
|
|
(19,922
|
)
|
||
Common stock dividends paid
|
(416,552
|
)
|
|
(318,060
|
)
|
||
Borrowings under repurchase agreements
|
36,713,743
|
|
|
22,065,713
|
|
||
Return of margin deposits under repurchase agreements and derivatives
|
815,903
|
|
|
276,634
|
|
||
Borrowings under notes and bonds payable
|
6,561,390
|
|
|
5,568,875
|
|
||
Issuance of common stock
|
835,465
|
|
|
279,600
|
|
||
Costs related to issuance of common stock
|
(936
|
)
|
|
(825
|
)
|
||
Noncontrolling interest in equity of consolidated subsidiaries - contributions
|
—
|
|
|
—
|
|
||
Noncontrolling interest in equity of consolidated subsidiaries - distributions
|
(70,493
|
)
|
|
(73,279
|
)
|
||
Purchase of noncontrolling interests in the Buyer
|
(65,860
|
)
|
|
—
|
|
||
Net cash provided by (used in) financing activities
|
2,165,550
|
|
|
(461,577
|
)
|
||
|
|
|
|
||||
Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash
|
(21,890
|
)
|
|
197,163
|
|
||
|
|
|
|
||||
Cash, Cash Equivalents, and Restricted Cash, Beginning of Period
|
453,697
|
|
|
344,638
|
|
||
|
|
|
|
||||
Cash, Cash Equivalents, and Restricted Cash, End of Period
|
$
|
431,807
|
|
|
$
|
541,801
|
|
|
|
|
|
||||
Supplemental Disclosure of Cash Flow Information
|
|
|
|
||||
Cash paid during the period for interest
|
$
|
320,804
|
|
|
$
|
265,114
|
|
Cash paid during the period for income taxes
|
4,956
|
|
|
943
|
|
||
|
|
|
|
||||
Supplemental Schedule of Non-Cash Investing and Financing Activities
|
|
|
|
||||
Dividends declared but not paid
|
$
|
153,681
|
|
|
$
|
115,356
|
|
Purchase of Agency and Non-Agency RMBS, settled after quarter end
|
1,076,086
|
|
|
1,296,296
|
|
||
Sale of investments, primarily Agency RMBS, settled after quarter end
|
1,785,708
|
|
|
1,530,726
|
|
||
Transfer from residential mortgage loans to real estate owned and other assets
|
105,750
|
|
|
218,467
|
|
||
Non-cash distributions from Consumer Loan Companies
|
—
|
|
|
25
|
|
||
Non-cash distributions from LoanCo
|
30,337
|
|
|
—
|
|
||
MSR purchase price holdback
|
79,045
|
|
|
—
|
|
||
Real estate securities retained from loan securitizations
|
310,579
|
|
|
122,585
|
|
||
Remeasurement of Consumer Loan Companies noncontrolling interest
|
—
|
|
|
110,438
|
|
||
Transfer of loans from held-for-investment to held-for sale
|
23,080
|
|
|
316,199
|
|
||
Ocwen transaction (Note 5) - excess mortgage servicing rights
|
71,982
|
|
|
—
|
|
||
Ocwen transaction (Note 5) - servicer advance investments
|
481,220
|
|
|
—
|
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
September 30, 2017
|
(dollars in tables in thousands, except share data)
|
1.
|
ORGANIZATION AND BASIS OF PRESENTATION
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
September 30, 2017
|
(dollars in tables in thousands, except share data)
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
September 30, 2017
|
(dollars in tables in thousands, except share data)
|
2.
|
OTHER INCOME, ASSETS AND LIABILITIES
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Gain (loss) on sale of real estate securities, net
|
$
|
7,342
|
|
|
$
|
(679
|
)
|
|
$
|
29,592
|
|
|
$
|
15,072
|
|
Gain (loss) on sale of residential mortgage loans, net
|
9,029
|
|
|
8,537
|
|
|
37,967
|
|
|
9,142
|
|
||||
Gain (loss) on settlement of derivatives
|
(18,756
|
)
|
|
(18,925
|
)
|
|
(58,326
|
)
|
|
(63,699
|
)
|
||||
Gain (loss) on liquidated residential mortgage loans
|
(2,152
|
)
|
|
(1,331
|
)
|
|
(7,996
|
)
|
|
(1,603
|
)
|
||||
Gain (loss) on sale of REO
|
(1,864
|
)
|
|
2,207
|
|
|
(7,176
|
)
|
|
5,193
|
|
||||
Other gains (losses)
|
7,954
|
|
|
(974
|
)
|
|
7,189
|
|
|
(1,787
|
)
|
||||
|
$
|
1,553
|
|
|
$
|
(11,165
|
)
|
|
$
|
1,250
|
|
|
$
|
(37,682
|
)
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Unrealized gain (loss) on derivative instruments
|
$
|
3,560
|
|
|
$
|
21,048
|
|
|
$
|
(124
|
)
|
|
$
|
(15,112
|
)
|
Unrealized gain (loss) on other ABS
|
189
|
|
|
724
|
|
|
340
|
|
|
(226
|
)
|
||||
Gain (loss) on transfer of loans to REO
|
5,179
|
|
|
4,373
|
|
|
16,791
|
|
|
14,660
|
|
||||
Gain (loss) on transfer of loans to other assets
|
66
|
|
|
2,743
|
|
|
359
|
|
|
3,021
|
|
||||
Gain on Excess MSR recapture agreements
|
606
|
|
|
768
|
|
|
1,948
|
|
|
2,188
|
|
||||
Gain (loss) on Ocwen common stock
|
6,987
|
|
|
—
|
|
|
6,987
|
|
|
—
|
|
||||
Other income (loss)
|
(6,700
|
)
|
|
(2,597
|
)
|
|
(18,605
|
)
|
|
2,319
|
|
||||
|
$
|
9,887
|
|
|
$
|
27,059
|
|
|
$
|
7,696
|
|
|
$
|
6,850
|
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
September 30, 2017
|
(dollars in tables in thousands, except share data)
|
|
Other Assets
|
|
|
|
Accrued Expenses
and Other Liabilities
|
||||||||||||
|
September 30, 2017
|
|
December 31, 2016
|
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||||||
Margin receivable, net
|
$
|
60,310
|
|
|
$
|
55,481
|
|
|
Interest payable
|
|
$
|
30,075
|
|
|
$
|
23,108
|
|
Other receivables
|
20,053
|
|
|
16,350
|
|
|
Accounts payable
|
|
85,622
|
|
|
31,299
|
|
||||
Principal and interest receivable
|
50,467
|
|
|
52,738
|
|
|
Derivative liabilities (Note 10)
|
|
82
|
|
|
3,021
|
|
||||
Receivable from government agency
|
43,313
|
|
|
54,706
|
|
|
Current taxes payable
|
|
4,553
|
|
|
2,314
|
|
||||
Call rights
|
327
|
|
|
337
|
|
|
Due to servicers
|
|
58,203
|
|
|
77,148
|
|
||||
Derivative assets (Note 10)
|
10,444
|
|
|
6,762
|
|
|
MSR purchase price holdback
|
|
139,481
|
|
|
60,436
|
|
||||
Servicing fee receivables
|
60,107
|
|
|
7,405
|
|
|
Other liabilities
|
|
13,227
|
|
|
8,118
|
|
||||
Ginnie Mae EBO servicer advance receivable, net
|
10,863
|
|
|
14,829
|
|
|
|
|
$
|
331,243
|
|
|
$
|
205,444
|
|
||
Due from servicers
|
22,014
|
|
|
22,134
|
|
|
|
|
|
|
|
||||||
Ocwen common stock, at fair value
|
20,900
|
|
|
—
|
|
|
|
|
|
|
|
||||||
Prepaid expenses
|
8,083
|
|
|
9,487
|
|
|
|
|
|
|
|
||||||
Other assets
|
16,494
|
|
|
4,269
|
|
|
|
|
|
|
|
||||||
|
$
|
323,375
|
|
|
$
|
244,498
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30, |
||||||
|
|
2017
|
|
2016
|
||||
Accretion of servicer advance investment and receivable interest income
|
|
$
|
451,824
|
|
|
$
|
257,877
|
|
Accretion of excess mortgage servicing rights income
|
|
75,237
|
|
|
106,848
|
|
||
Accretion of net discount on securities and loans
(A)
|
|
295,753
|
|
|
164,806
|
|
||
Amortization of deferred financing costs
|
|
(9,525
|
)
|
|
(13,889
|
)
|
||
Amortization of discount on notes and bonds payable
|
|
(1,367
|
)
|
|
(1,120
|
)
|
||
|
|
$
|
811,922
|
|
|
$
|
514,522
|
|
(A)
|
Includes accretion of the accretable yield on PCD loans.
|
3.
|
SEGMENT REPORTING
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
September 30, 2017
|
(dollars in tables in thousands, except share data)
|
|
Servicing Related Assets
|
|
Residential Securities and Loans
|
|
|
|
|
|
|
||||||||||||||||||||||
|
Excess MSRs
|
|
MSRs
|
|
Servicer Advances
|
|
Real Estate Securities
|
|
Residential Mortgage Loans
|
|
Consumer Loans
|
|
Corporate
|
|
Total
|
||||||||||||||||
Three Months Ended September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest income
|
$
|
25,691
|
|
|
$
|
31,707
|
|
|
$
|
130,796
|
|
|
$
|
114,181
|
|
|
$
|
31,645
|
|
|
$
|
63,527
|
|
|
$
|
175
|
|
|
$
|
397,722
|
|
Interest expense
|
10,225
|
|
|
15,262
|
|
|
35,931
|
|
|
35,211
|
|
|
15,487
|
|
|
13,162
|
|
|
—
|
|
|
125,278
|
|
||||||||
Net interest income (expense)
|
15,466
|
|
|
16,445
|
|
|
94,865
|
|
|
78,970
|
|
|
16,158
|
|
|
50,365
|
|
|
175
|
|
|
272,444
|
|
||||||||
Impairment
|
—
|
|
|
—
|
|
|
—
|
|
|
1,509
|
|
|
14,099
|
|
|
12,601
|
|
|
—
|
|
|
28,209
|
|
||||||||
Servicing revenue, net
|
—
|
|
|
58,014
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
58,014
|
|
||||||||
Other income (loss)
|
(12,034
|
)
|
|
70,047
|
|
|
18,732
|
|
|
(6,035
|
)
|
|
2,653
|
|
|
6,796
|
|
|
6,986
|
|
|
87,145
|
|
||||||||
Operating expenses
|
152
|
|
|
53,634
|
|
|
1,212
|
|
|
351
|
|
|
9,759
|
|
|
10,764
|
|
|
41,188
|
|
|
117,060
|
|
||||||||
Income (Loss) Before Income Taxes
|
3,280
|
|
|
90,872
|
|
|
112,385
|
|
|
71,075
|
|
|
(5,047
|
)
|
|
33,796
|
|
|
(34,027
|
)
|
|
272,334
|
|
||||||||
Income tax expense (benefit)
|
—
|
|
|
11,156
|
|
|
31,097
|
|
|
—
|
|
|
(9,640
|
)
|
|
—
|
|
|
—
|
|
|
32,613
|
|
||||||||
Net Income (Loss)
|
$
|
3,280
|
|
|
$
|
79,716
|
|
|
$
|
81,288
|
|
|
$
|
71,075
|
|
|
$
|
4,593
|
|
|
$
|
33,796
|
|
|
$
|
(34,027
|
)
|
|
$
|
239,721
|
|
Noncontrolling interests in income (loss) of consolidated subsidiaries
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,224
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12,376
|
|
|
$
|
—
|
|
|
$
|
13,600
|
|
Net income (loss) attributable to common stockholders
|
$
|
3,280
|
|
|
$
|
79,716
|
|
|
$
|
80,064
|
|
|
$
|
71,075
|
|
|
$
|
4,593
|
|
|
$
|
21,420
|
|
|
$
|
(34,027
|
)
|
|
$
|
226,121
|
|
|
Servicing Related Assets
|
|
Residential Securities and Loans
|
|
|
|
|
|
|
||||||||||||||||||||||
|
Excess MSRs
|
|
MSRs
|
|
Servicer Advances
|
|
Real Estate Securities
|
|
Residential Mortgage Loans
|
|
Consumer Loans
|
|
Corporate
|
|
Total
|
||||||||||||||||
Nine Months Ended September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest income
|
$
|
75,237
|
|
|
$
|
34,267
|
|
|
$
|
451,808
|
|
|
$
|
321,464
|
|
|
$
|
75,276
|
|
|
$
|
203,631
|
|
|
$
|
529
|
|
|
$
|
1,162,212
|
|
Interest expense
|
29,302
|
|
|
26,849
|
|
|
120,527
|
|
|
85,663
|
|
|
34,655
|
|
|
41,668
|
|
|
—
|
|
|
338,664
|
|
||||||||
Net interest income (expense)
|
45,935
|
|
|
7,418
|
|
|
331,281
|
|
|
235,801
|
|
|
40,621
|
|
|
161,963
|
|
|
529
|
|
|
823,548
|
|
||||||||
Impairment
|
—
|
|
|
—
|
|
|
—
|
|
|
8,736
|
|
|
17,342
|
|
|
48,039
|
|
|
—
|
|
|
74,117
|
|
||||||||
Servicing revenue, net
|
—
|
|
|
269,467
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
269,467
|
|
||||||||
Other income (loss)
|
(25,049
|
)
|
|
75,856
|
|
|
75,307
|
|
|
(27,005
|
)
|
|
22,491
|
|
|
12,712
|
|
|
6,986
|
|
|
141,298
|
|
||||||||
Operating expenses
|
350
|
|
|
132,675
|
|
|
2,641
|
|
|
979
|
|
|
24,018
|
|
|
33,746
|
|
|
130,452
|
|
|
324,861
|
|
||||||||
Income (Loss) Before Income Taxes
|
20,536
|
|
|
220,066
|
|
|
403,947
|
|
|
199,081
|
|
|
21,752
|
|
|
92,890
|
|
|
(122,937
|
)
|
|
835,335
|
|
||||||||
Income tax expense (benefit)
|
—
|
|
|
(789
|
)
|
|
128,836
|
|
|
—
|
|
|
(7,164
|
)
|
|
170
|
|
|
—
|
|
|
121,053
|
|
||||||||
Net Income (Loss)
|
$
|
20,536
|
|
|
$
|
220,855
|
|
|
$
|
275,111
|
|
|
$
|
199,081
|
|
|
$
|
28,916
|
|
|
$
|
92,720
|
|
|
$
|
(122,937
|
)
|
|
$
|
714,282
|
|
Noncontrolling interests in income (loss) of consolidated subsidiaries
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,372
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
34,679
|
|
|
$
|
—
|
|
|
$
|
45,051
|
|
Net income (loss) attributable to common stockholders
|
$
|
20,536
|
|
|
$
|
220,855
|
|
|
$
|
264,739
|
|
|
$
|
199,081
|
|
|
$
|
28,916
|
|
|
$
|
58,041
|
|
|
$
|
(122,937
|
)
|
|
$
|
669,231
|
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
September 30, 2017
|
(dollars in tables in thousands, except share data)
|
|
Servicing Related Assets
|
|
Residential Securities and Loans
|
|
|
|
|
|
|
||||||||||||||||||||||
|
Excess MSRs
|
|
MSRs
|
|
Servicer Advances
|
|
Real Estate Securities
|
|
Residential Mortgage Loans
|
|
Consumer Loans
|
|
Corporate
|
|
Total
|
||||||||||||||||
September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Investments
|
$
|
1,353,941
|
|
|
$
|
2,310,145
|
|
|
$
|
4,044,802
|
|
|
$
|
6,714,846
|
|
|
$
|
2,236,259
|
|
|
$
|
1,514,255
|
|
|
$
|
—
|
|
|
$
|
18,174,248
|
|
Cash and cash equivalents
|
210
|
|
|
132,361
|
|
|
74,993
|
|
|
3,341
|
|
|
4,747
|
|
|
33,430
|
|
|
30,678
|
|
|
279,760
|
|
||||||||
Restricted cash
|
12,360
|
|
|
28,839
|
|
|
60,615
|
|
|
—
|
|
|
—
|
|
|
50,233
|
|
|
—
|
|
|
152,047
|
|
||||||||
Other assets
|
8,757
|
|
|
712,765
|
|
|
44,312
|
|
|
1,840,028
|
|
|
126,767
|
|
|
31,632
|
|
|
34,517
|
|
|
2,798,778
|
|
||||||||
Total assets
|
$
|
1,375,268
|
|
|
$
|
3,184,110
|
|
|
$
|
4,224,722
|
|
|
$
|
8,558,215
|
|
|
$
|
2,367,773
|
|
|
$
|
1,629,550
|
|
|
$
|
65,195
|
|
|
$
|
21,404,833
|
|
Debt
|
$
|
583,415
|
|
|
$
|
1,672,101
|
|
|
$
|
3,567,862
|
|
|
$
|
6,003,165
|
|
|
$
|
1,830,731
|
|
|
$
|
1,427,721
|
|
|
$
|
—
|
|
|
$
|
15,084,995
|
|
Other liabilities
|
1,042
|
|
|
241,919
|
|
|
23,542
|
|
|
1,092,745
|
|
|
34,542
|
|
|
6,308
|
|
|
240,536
|
|
|
1,640,634
|
|
||||||||
Total liabilities
|
584,457
|
|
|
1,914,020
|
|
|
3,591,404
|
|
|
7,095,910
|
|
|
1,865,273
|
|
|
1,434,029
|
|
|
240,536
|
|
|
16,725,629
|
|
||||||||
Total equity
|
790,811
|
|
|
1,270,090
|
|
|
633,318
|
|
|
1,462,305
|
|
|
502,500
|
|
|
195,521
|
|
|
(175,341
|
)
|
|
4,679,204
|
|
||||||||
Noncontrolling interests in equity of consolidated subsidiaries
|
—
|
|
|
—
|
|
|
73,316
|
|
|
—
|
|
|
—
|
|
|
34,276
|
|
|
—
|
|
|
107,592
|
|
||||||||
Total New Residential stockholders’ equity
|
$
|
790,811
|
|
|
$
|
1,270,090
|
|
|
$
|
560,002
|
|
|
$
|
1,462,305
|
|
|
$
|
502,500
|
|
|
$
|
161,245
|
|
|
$
|
(175,341
|
)
|
|
$
|
4,571,612
|
|
Investments in equity method investees
|
$
|
175,633
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
46,322
|
|
|
$
|
—
|
|
|
$
|
221,955
|
|
|
Servicing Related Assets
|
|
Residential Securities and Loans
|
|
|
|
|
|
|
||||||||||||||||||
|
Excess MSRs
|
|
Servicer Advances
|
|
Real Estate Securities
|
|
Residential Mortgage Loans
|
|
Consumer Loans
|
|
Corporate
|
|
Total
|
||||||||||||||
Three Months Ended September 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Interest income
|
$
|
30,617
|
|
|
$
|
101,359
|
|
|
$
|
58,855
|
|
|
$
|
13,947
|
|
|
$
|
77,231
|
|
|
$
|
379
|
|
|
$
|
282,388
|
|
Interest expense
|
4,002
|
|
|
54,802
|
|
|
13,008
|
|
|
6,153
|
|
|
18,523
|
|
|
—
|
|
|
96,488
|
|
|||||||
Net interest income (expense)
|
26,615
|
|
|
46,557
|
|
|
45,847
|
|
|
7,794
|
|
|
58,708
|
|
|
379
|
|
|
185,900
|
|
|||||||
Impairment
|
—
|
|
|
—
|
|
|
1,765
|
|
|
(291
|
)
|
|
18,566
|
|
|
—
|
|
|
20,040
|
|
|||||||
Servicing revenue, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Other income (loss)
|
(10,052
|
)
|
|
21,430
|
|
|
1,392
|
|
|
13,931
|
|
|
—
|
|
|
—
|
|
|
26,701
|
|
|||||||
Operating expenses
|
536
|
|
|
1,029
|
|
|
369
|
|
|
4,251
|
|
|
11,976
|
|
|
22,414
|
|
|
40,575
|
|
|||||||
Income (Loss) Before Income Taxes
|
16,027
|
|
|
66,958
|
|
|
45,105
|
|
|
17,765
|
|
|
28,166
|
|
|
(22,035
|
)
|
|
151,986
|
|
|||||||
Income tax expense (benefit)
|
—
|
|
|
16,348
|
|
|
—
|
|
|
4,556
|
|
|
—
|
|
|
(4
|
)
|
|
20,900
|
|
|||||||
Net Income (Loss)
|
$
|
16,027
|
|
|
$
|
50,610
|
|
|
$
|
45,105
|
|
|
$
|
13,209
|
|
|
$
|
28,166
|
|
|
$
|
(22,031
|
)
|
|
$
|
131,086
|
|
Noncontrolling interests in income (loss) of consolidated subsidiaries
|
$
|
—
|
|
|
$
|
18,853
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
13,325
|
|
|
$
|
—
|
|
|
$
|
32,178
|
|
Net income (loss) attributable to common stockholders
|
$
|
16,027
|
|
|
$
|
31,757
|
|
|
$
|
45,105
|
|
|
$
|
13,209
|
|
|
$
|
14,841
|
|
|
$
|
(22,031
|
)
|
|
$
|
98,908
|
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
September 30, 2017
|
(dollars in tables in thousands, except share data)
|
|
Servicing Related Assets
|
|
Residential Securities and Loans
|
|
|
|
|
|
|
||||||||||||||||||
|
Excess MSRs
|
|
Servicer Advances
|
|
Real Estate Securities
|
|
Residential Mortgage Loans
|
|
Consumer Loans
|
|
Corporate
|
|
Total
|
||||||||||||||
Nine Months Ended September 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Interest income
|
$
|
106,848
|
|
|
$
|
265,119
|
|
|
$
|
172,982
|
|
|
$
|
47,712
|
|
|
$
|
155,541
|
|
|
$
|
1,699
|
|
|
$
|
749,901
|
|
Interest expense
|
12,117
|
|
|
176,672
|
|
|
31,425
|
|
|
20,447
|
|
|
37,740
|
|
|
—
|
|
|
278,401
|
|
|||||||
Net interest income (expense)
|
94,731
|
|
|
88,447
|
|
|
141,557
|
|
|
27,265
|
|
|
117,801
|
|
|
1,699
|
|
|
471,500
|
|
|||||||
Impairment
|
—
|
|
|
—
|
|
|
7,838
|
|
|
7,309
|
|
|
34,536
|
|
|
—
|
|
|
49,683
|
|
|||||||
Servicing revenue, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Other income (loss)
|
(14,234
|
)
|
|
9,103
|
|
|
(59,472
|
)
|
|
22,295
|
|
|
81,193
|
|
|
15
|
|
|
38,900
|
|
|||||||
Operating expenses
|
1,066
|
|
|
3,076
|
|
|
1,307
|
|
|
11,194
|
|
|
26,194
|
|
|
59,034
|
|
|
101,871
|
|
|||||||
Income (Loss) Before Income Taxes
|
79,431
|
|
|
94,474
|
|
|
72,940
|
|
|
31,057
|
|
|
138,264
|
|
|
(57,320
|
)
|
|
358,846
|
|
|||||||
Income tax expense (benefit)
|
—
|
|
|
13,743
|
|
|
—
|
|
|
4,377
|
|
|
75
|
|
|
—
|
|
|
18,195
|
|
|||||||
Net Income (Loss)
|
$
|
79,431
|
|
|
$
|
80,731
|
|
|
$
|
72,940
|
|
|
$
|
26,680
|
|
|
$
|
138,189
|
|
|
$
|
(57,320
|
)
|
|
$
|
340,651
|
|
Noncontrolling interests in income (loss) of consolidated subsidiaries
|
$
|
—
|
|
|
$
|
33,400
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
27,955
|
|
|
$
|
—
|
|
|
$
|
61,355
|
|
Net income (loss) attributable to common stockholders
|
$
|
79,431
|
|
|
$
|
47,331
|
|
|
$
|
72,940
|
|
|
$
|
26,680
|
|
|
$
|
110,234
|
|
|
$
|
(57,320
|
)
|
|
$
|
279,296
|
|
4.
|
INVESTMENTS IN EXCESS MORTGAGE SERVICING RIGHTS
|
|
|
Servicer
|
||||||||||||||
|
|
Nationstar
|
|
SLS
(A)
|
|
Ocwen
(B)
|
|
Total
|
||||||||
Balance as of December 31, 2016
|
|
$
|
611,293
|
|
|
$
|
3,935
|
|
|
$
|
784,227
|
|
|
$
|
1,399,455
|
|
Purchases
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Interest income
|
|
33,837
|
|
|
(255
|
)
|
|
41,656
|
|
|
75,238
|
|
||||
Other income
|
|
1,948
|
|
|
—
|
|
|
1,993
|
|
|
3,941
|
|
||||
Proceeds from repayments
|
|
(98,802
|
)
|
|
(1,215
|
)
|
|
(95,677
|
)
|
|
(195,694
|
)
|
||||
Change in fair value
|
|
(6,442
|
)
|
|
381
|
|
|
(26,589
|
)
|
|
(32,650
|
)
|
||||
Ocwen Transaction (Note 5)
|
|
—
|
|
|
—
|
|
|
(71,982
|
)
|
|
(71,982
|
)
|
||||
Balance as of September 30, 2017
|
|
$
|
541,834
|
|
|
$
|
2,846
|
|
|
$
|
633,628
|
|
|
$
|
1,178,308
|
|
(A)
|
Specialized Loan Servicing LLC (“SLS”).
|
(B)
|
Ocwen Loan Servicing LLC, a subsidiary of Ocwen Financial Corporation (together with its subsidiaries, including Ocwen Loan Servicing LLC, “Ocwen”), services the loans underlying the Excess MSRs and Servicer Advance Investments acquired from HLSS.
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
September 30, 2017
|
(dollars in tables in thousands, except share data)
|
|
September 30, 2017
|
|
December 31, 2016
|
|||||||||||||||||||||||
|
UPB of Underlying Mortgages
|
|
Interest in Excess MSR
|
|
Weighted Average Life Years
(A)
|
|
Amortized Cost Basis
(B)
|
|
Carrying Value
(C)
|
|
Carrying Value
(C)
|
|||||||||||||||
|
|
|
New Residential
(D)
|
|
Fortress-managed funds
|
|
Nationstar
|
|
|
|
|
|
|
|
|
|||||||||||
Agency
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Original and Recaptured Pools
|
$
|
68,449,802
|
|
|
32.5% - 66.7% (53.3%)
|
|
|
0.0% - 40.0%
|
|
|
20.0% - 35.0%
|
|
|
5.8
|
|
$
|
263,374
|
|
|
$
|
288,345
|
|
|
$
|
330,323
|
|
Recapture Agreements
|
—
|
|
|
32.5% - 66.7% (53.3%)
|
|
|
0.0% - 40.0%
|
|
|
20.0% - 35.0%
|
|
|
12.6
|
|
20,299
|
|
|
45,504
|
|
|
51,434
|
|
||||
|
68,449,802
|
|
|
|
|
|
|
|
|
6.3
|
|
283,673
|
|
|
333,849
|
|
|
381,757
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Non-Agency
(E)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Nationstar and SLS Serviced:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Original and Recaptured Pools
|
$
|
67,453,347
|
|
|
33.3% - 100.0% (59.4%)
|
|
|
0.0% - 50.0%
|
|
|
0.0% - 33.3%
|
|
|
5.3
|
|
$
|
160,665
|
|
|
$
|
191,270
|
|
|
$
|
219,980
|
|
Recapture Agreements
|
—
|
|
|
33.3% - 100.0% (59.4%)
|
|
|
0.0% - 50.0%
|
|
|
0.0% - 33.3%
|
|
|
12.5
|
|
8,352
|
|
|
19,561
|
|
|
13,491
|
|
||||
Ocwen Serviced Pools
|
92,270,579
|
|
|
100.0
|
%
|
|
—
|
%
|
|
—
|
%
|
|
6.0
|
|
617,401
|
|
|
633,628
|
|
|
784,227
|
|
||||
|
159,723,926
|
|
|
|
|
|
|
|
|
5.9
|
|
786,418
|
|
|
844,459
|
|
|
1,017,698
|
|
|||||||
Total
|
$
|
228,173,728
|
|
|
|
|
|
|
|
|
6.0
|
|
$
|
1,070,091
|
|
|
$
|
1,178,308
|
|
|
$
|
1,399,455
|
|
(A)
|
Weighted Average Life represents the weighted average expected timing of the receipt of expected cash flows for this investment.
|
(B)
|
The amortized cost basis of the recapture agreements is determined based on the relative fair values of the recapture agreements and related Excess MSRs at the time they were acquired.
|
(C)
|
Carrying Value represents the fair value of the pools or recapture agreements, as applicable.
|
(D)
|
Amounts in parentheses represent weighted averages.
|
(E)
|
New Residential also invested in related Servicer Advance Investments, including the basic fee component of the related MSR as of
September 30, 2017
(Note 6) on
$145.8 billion
UPB underlying these Excess MSRs.
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Original and Recaptured Pools
|
|
$
|
(12,047
|
)
|
|
$
|
(15,395
|
)
|
|
$
|
(41,032
|
)
|
|
$
|
(28,392
|
)
|
Recapture Agreements
|
|
(2,244
|
)
|
|
(1,665
|
)
|
|
8,382
|
|
|
3,995
|
|
||||
|
|
$
|
(14,291
|
)
|
|
$
|
(17,060
|
)
|
|
$
|
(32,650
|
)
|
|
$
|
(24,397
|
)
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
September 30, 2017
|
(dollars in tables in thousands, except share data)
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
Excess MSR assets
|
|
$
|
329,986
|
|
|
$
|
372,391
|
|
Other assets
|
|
21,279
|
|
|
17,184
|
|
||
Other liabilities
|
|
—
|
|
|
—
|
|
||
Equity
|
|
$
|
351,265
|
|
|
$
|
389,575
|
|
New Residential’s investment
|
|
$
|
175,633
|
|
|
$
|
194,788
|
|
|
|
|
|
|
||||
New Residential’s ownership
|
|
50.0
|
%
|
|
50.0
|
%
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Interest income
|
|
$
|
6,969
|
|
|
$
|
12,205
|
|
|
$
|
20,083
|
|
|
$
|
24,526
|
|
Other income (loss)
|
|
(2,843
|
)
|
|
339
|
|
|
(7,908
|
)
|
|
(7,244
|
)
|
||||
Expenses
|
|
(18
|
)
|
|
(22
|
)
|
|
(63
|
)
|
|
(66
|
)
|
||||
Net income
|
|
$
|
4,108
|
|
|
$
|
12,522
|
|
|
$
|
12,112
|
|
|
$
|
17,216
|
|
Balance at December 31, 2016
|
$
|
194,788
|
|
Contributions to equity method investees
|
—
|
|
|
Transfers to direct ownership
|
—
|
|
|
Distributions of earnings from equity method investees
|
(11,054
|
)
|
|
Distributions of capital from equity method investees
|
(14,157
|
)
|
|
Change in fair value of investments in equity method investees
|
6,056
|
|
|
Balance at September 30, 2017
|
$
|
175,633
|
|
|
September 30, 2017
|
||||||||||||||||||
|
Unpaid Principal Balance
|
|
Investee Interest in Excess MSR
(A)
|
|
New Residential Interest in Investees
|
|
Amortized Cost Basis
(B)
|
|
Carrying Value
(C)
|
|
Weighted Average Life (Years)
(D)
|
||||||||
Agency
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Original and Recaptured Pools
|
$
|
53,675,234
|
|
|
66.7
|
%
|
|
50.0
|
%
|
|
$
|
221,830
|
|
|
$
|
279,722
|
|
|
5.8
|
Recapture Agreements
|
—
|
|
|
66.7
|
%
|
|
50.0
|
%
|
|
24,827
|
|
|
50,264
|
|
|
12.5
|
|||
Total
|
$
|
53,675,234
|
|
|
|
|
|
|
$
|
246,657
|
|
|
$
|
329,986
|
|
|
6.4
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
September 30, 2017
|
(dollars in tables in thousands, except share data)
|
(A)
|
The remaining interests are held by Nationstar.
|
(B)
|
Represents the amortized cost basis of the equity method investees in which New Residential holds a 50% interest. The amortized cost basis of the recapture agreements is determined based on the relative fair values of the recapture agreements and related Excess MSRs at the time they were acquired.
|
(C)
|
Represents the carrying value of the Excess MSRs held in equity method investees, in which New Residential holds a 50% interest. Carrying value represents the fair value of the pools or recapture agreements, as applicable.
|
(D)
|
The weighted average life represents the weighted average expected timing of the receipt of cash flows of each investment.
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
September 30, 2017
|
(dollars in tables in thousands, except share data)
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
September 30, 2017
|
(dollars in tables in thousands, except share data)
|
|
Three Months Ended September 30, 2017
|
|
Nine Months Ended
September 30, 2017 |
||||
Servicing fee revenue
|
$
|
113,741
|
|
|
$
|
299,642
|
|
Ancillary and other fees
|
24,641
|
|
|
51,811
|
|
||
Servicing fee revenue and fees
|
138,382
|
|
|
351,453
|
|
||
Amortization of servicing rights
|
(68,850
|
)
|
|
(159,451
|
)
|
||
Change in valuation inputs and assumptions
|
(11,518
|
)
|
|
77,465
|
|
||
Servicing revenue, net
|
$
|
58,014
|
|
|
$
|
269,467
|
|
Balance as of December 31, 2016
|
|
$
|
659,483
|
|
Purchases
|
|
1,125,252
|
|
|
Amortization of servicing rights
(A)
|
|
(159,451
|
)
|
|
Change in valuation inputs and assumptions
|
|
77,465
|
|
|
Balance as of September 30, 2017
|
|
$
|
1,702,749
|
|
(A)
|
Based on the ratio of the current UPB of the underlying residential mortgage loans relative to the original UPB of the underlying residential mortgage loans.
|
|
UPB of Underlying Mortgages
|
|
Weighted Average Life (Years)
(A)
|
|
Amortized Cost Basis
|
|
Carrying Value
(B)
|
||||||
Agency
|
$
|
177,220,692
|
|
|
6.4
|
|
$
|
1,521,605
|
|
|
$
|
1,702,749
|
|
Non-Agency
|
64,733
|
|
|
5.8
|
|
—
|
|
|
—
|
|
|||
Total
|
$
|
177,285,425
|
|
|
6.4
|
|
$
|
1,521,605
|
|
|
$
|
1,702,749
|
|
(A)
|
Weighted Average Life represents the weighted average expected timing of the receipt of expected cash flows for this investment.
|
(B)
|
Carrying Value represents fair value. As of
September 30, 2017
, a weighted average discount rate of
9.8%
was used to value New Residential’s investments in MSRs.
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
September 30, 2017
|
(dollars in tables in thousands, except share data)
|
•
|
The parties will cooperate to obtain any third party consents required to transfer Ocwen’s remaining interests in the Ocwen Subject MSRs to New Residential.
|
•
|
Upon obtaining the required third party consents and each Ocwen Subject MSR ceasing to be a Deferred Servicing Agreement (as defined in the Existing Ocwen Agreements) covered under the Existing Ocwen Agreements, New Residential will make a lump sum payment to Ocwen. These lump sum payments may total up to approximately
$400.0 million
in the aggregate if all of the Ocwen Subject MSRs are transferred to New Residential.
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
September 30, 2017
|
(dollars in tables in thousands, except share data)
|
•
|
Upon transfer, Ocwen will subservice the mortgage loans related to such Ocwen Subject MSRs pursuant to the Ocwen Subservicing Agreement (as defined below).
|
•
|
In the event that the required third party consents are not obtained within one year (by July 23, 2018) or such earlier date mutually agreed to by the parties, the applicable Ocwen Subject MSRs may (i) become subject to a new mortgage servicing rights agreement to be negotiated between Ocwen and New Residential, (ii) be acquired by Ocwen at a price determined in accordance with the terms of the Ocwen Master Agreement, (iii) be sold to one or more third parties in accordance with the terms of the Ocwen Master Agreement, or (iv) remain subject to the Existing Ocwen Agreements.
|
•
|
New Residential agrees to up to an eighteen month standstill (until January 23, 2019), subject to certain conditions, of its rights with respect to certain Ocwen Subject MSRs under the Existing Ocwen Agreements to replace Ocwen as named servicer upon the occurrence of certain specified termination events. New Residential will permanently waive such rights if a specified percentage of the Ocwen Subject MSRs have been transferred to NRM or are not otherwise subject to the Existing Ocwen Agreements before the end of the period contemplated by the Ocwen Master Agreement.
|
•
|
The resolution of certain payment obligations by New Residential and Ocwen under the terms of the Existing Ocwen Agreements.
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
September 30, 2017
|
(dollars in tables in thousands, except share data)
|
|
Three Months Ended September 30, 2017
|
|
Nine Months Ended
September 30, 2017 |
||||
Servicing fee revenue
|
$
|
38,510
|
|
|
$
|
41,185
|
|
Ancillary and other fees
|
4,327
|
|
|
4,402
|
|
||
Less: subservicing expense
|
(11,139
|
)
|
|
(11,433
|
)
|
||
Interest income, investments in mortgage servicing rights financing receivable
|
$
|
31,698
|
|
|
$
|
34,154
|
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
September 30, 2017
|
(dollars in tables in thousands, except share data)
|
|
Three Months Ended September 30, 2017
|
|
Nine Months Ended
September 30, 2017 |
||||
Amortization of servicing rights
|
$
|
(18,883
|
)
|
|
$
|
(20,010
|
)
|
Change in valuation inputs and assumptions
|
89,115
|
|
|
95,838
|
|
||
Change in fair value of investments in mortgage servicing rights financing receivable
|
$
|
70,232
|
|
|
$
|
75,828
|
|
Balance as of December 31, 2016
|
|
$
|
—
|
|
Investments made
|
|
467,118
|
|
|
Ocwen Transaction (Note 5)
|
|
64,450
|
|
|
Amortization of servicing rights
(A)
|
|
(20,010
|
)
|
|
Change in valuation inputs and assumptions
|
|
95,838
|
|
|
Balance as of September 30, 2017
|
|
$
|
607,396
|
|
(A)
|
Based on the ratio of the current UPB of the underlying residential mortgage loans relative to the original UPB of the underlying residential mortgage loans.
|
|
UPB of Underlying Mortgages
|
|
Weighted Average Life (Years)
(A)
|
|
Amortized Cost Basis
|
|
Carrying Value
(B)
|
||||||
Agency
|
$
|
51,533,451
|
|
|
5.6
|
|
$
|
447,925
|
|
|
$
|
473,669
|
|
Non-Agency
|
15,519,498
|
|
|
5.8
|
|
63,633
|
|
|
133,727
|
|
|||
Total
|
$
|
67,052,949
|
|
|
5.6
|
|
$
|
511,558
|
|
|
$
|
607,396
|
|
(A)
|
Weighted Average Life represents the weighted average expected timing of the receipt of expected cash flows for this investment.
|
(B)
|
Carrying Value represents fair value. As of
September 30, 2017
, a weighted average discount rate of
10.4%
was used to value New Residential’s investments in mortgage servicing rights financing receivable.
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
September 30, 2017
|
(dollars in tables in thousands, except share data)
|
6.
|
SERVICER ADVANCE INVESTMENTS
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
September 30, 2017
|
(dollars in tables in thousands, except share data)
|
|
Amortized Cost Basis
|
|
Carrying Value
(A)
|
|
Weighted Average Discount Rate
|
|
Weighted Average Yield
|
|
Weighted Average Life (Years)
(B)
|
||||||
September 30, 2017
|
|
|
|
|
|
|
|
|
|
||||||
Servicer Advance Investments
(C)
|
$
|
3,955,375
|
|
|
$
|
4,044,802
|
|
|
6.8
|
%
|
|
7.2
|
%
|
|
5.1
|
As of December 31, 2016
|
|
|
|
|
|
|
|
|
|
||||||
Servicer Advance Investments
(C)
|
$
|
5,687,635
|
|
|
$
|
5,706,593
|
|
|
5.6
|
%
|
|
5.5
|
%
|
|
4.6
|
(A)
|
Carrying value represents the fair value of the Servicer Advance Investments, including the basic fee component of the related MSRs.
|
(B)
|
Weighted Average Life represents the weighted average expected timing of the receipt of expected net cash flows for this investment.
|
(C)
|
Excludes asset-backed securities collateralized by servicer advances, which had an aggregate face amount of
$100.0 million
and an aggregate carrying value of
$100.1 million
as of
December 31, 2016
.
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Changes in Fair Value Recorded in Other Income
|
|
$
|
10,941
|
|
|
$
|
21,606
|
|
|
$
|
70,469
|
|
|
$
|
4,328
|
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
September 30, 2017
|
(dollars in tables in thousands, except share data)
|
|
|
|
|
|
|
|
|
|
Loan-to-Value (“LTV”)
(A)
|
|
Cost of Funds
(C)
|
|||||||||||||||
|
UPB of Underlying Residential Mortgage Loans
|
|
Outstanding Servicer Advances
|
|
Servicer Advances to UPB of Underlying Residential Mortgage Loans
|
|
Face Amount of Notes and Bonds Payable
|
|
Gross
|
|
Net
(B)
|
|
Gross
|
|
Net
|
|||||||||||
September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Servicer Advance Investments
(D)
|
$
|
145,763,758
|
|
|
$
|
3,651,705
|
|
|
2.5
|
%
|
|
$
|
3,504,060
|
|
|
92.5
|
%
|
|
91.4
|
%
|
|
3.3
|
%
|
|
2.9
|
%
|
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Servicer Advance Investments
(D)
|
$
|
186,362,657
|
|
|
$
|
5,617,759
|
|
|
3.0
|
%
|
|
$
|
5,560,412
|
|
|
94.5
|
%
|
|
93.4
|
%
|
|
3.2
|
%
|
|
2.8
|
%
|
(A)
|
Based on outstanding servicer advances, excluding purchased but unsettled servicer advances and certain deferred servicing fees (“DSF”) on which New Residential receives financing. If New Residential were to include these DSF in the servicer advance balance, gross and net LTV as of
September 30, 2017
would be
86.6%
and
85.6%
, respectively. Also excludes retained Non-Agency bonds with a current face amount of
$79.9 million
from the outstanding servicer advance debt. If New Residential were to sell these bonds, gross and net LTV as of
September 30, 2017
would be
94.6%
and
93.5%
, respectively.
|
(B)
|
Ratio of face amount of borrowings to par amount of servicer advance collateral, net of any general reserve.
|
(C)
|
Annualized measure of the cost associated with borrowings. Gross Cost of Funds primarily includes interest expense and facility fees. Net Cost of Funds excludes facility fees.
|
(D)
|
The following types of advances are included in the Servicer Advance Investments:
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
Principal and interest advances
|
|
$
|
939,897
|
|
|
$
|
1,489,929
|
|
Escrow advances (taxes and insurance advances)
|
|
1,634,892
|
|
|
2,613,050
|
|
||
Foreclosure advances
|
|
1,076,916
|
|
|
1,514,780
|
|
||
Total
|
|
$
|
3,651,705
|
|
|
$
|
5,617,759
|
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Interest income, gross of amounts attributable to servicer compensation
|
|
$
|
83,979
|
|
|
$
|
161,601
|
|
|
$
|
290,933
|
|
|
$
|
581,231
|
|
Amounts attributable to base servicer compensation
(A)
|
|
(38,549
|
)
|
|
(15,276
|
)
|
|
(145,055
|
)
|
|
(68,184
|
)
|
||||
Amounts attributable to incentive servicer compensation
(A)
|
|
84,724
|
|
|
(45,197
|
)
|
|
300,788
|
|
|
(255,170
|
)
|
||||
Interest income from Servicer Advance Investments
(A)
|
|
$
|
130,154
|
|
|
$
|
101,128
|
|
|
$
|
446,666
|
|
|
$
|
257,877
|
|
(A)
|
Total interest income of
$130.2 million
and
$446.7 million
for the three and nine months ended
September 30, 2017
includes retrospective adjustments of
$46.5 million
and
$204.1 million
, respectively, mainly due to changes in cash flow assumptions relating to the HLSS portfolio, including a change in the cost of subservicing assumption to
13
bps.
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
September 30, 2017
|
(dollars in tables in thousands, except share data)
|
|
|
As of
|
||||||
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
Assets
|
|
|
|
|
||||
Servicer advance investments, at fair value
|
|
$
|
1,039,103
|
|
|
$
|
1,731,633
|
|
Cash and cash equivalents
|
|
40,222
|
|
|
37,854
|
|
||
All other assets
|
|
12,961
|
|
|
19,799
|
|
||
Total assets
(A)
|
|
$
|
1,092,286
|
|
|
$
|
1,789,286
|
|
Liabilities
|
|
|
|
|
||||
Notes and bonds payable
|
|
$
|
819,190
|
|
|
$
|
1,464,851
|
|
All other liabilities
|
|
3,637
|
|
|
5,187
|
|
||
Total liabilities
(A)
|
|
$
|
822,827
|
|
|
$
|
1,470,038
|
|
(A)
|
The creditors of the Buyer do not have recourse to the general credit of New Residential and the assets of the Buyer are not directly available to satisfy New Residential’s obligations.
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
Total Advance Purchaser LLC equity
|
|
$
|
269,459
|
|
|
$
|
319,248
|
|
Others’ ownership interest
|
|
27.2
|
%
|
|
54.2
|
%
|
||
Others’ interest in equity of consolidated subsidiary
|
|
$
|
73,316
|
|
|
$
|
173,057
|
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net Advance Purchaser LLC income
|
|
$
|
3,584
|
|
|
$
|
33,985
|
|
|
$
|
20,460
|
|
|
$
|
60,207
|
|
Others’ ownership interest as a percent of total
(A)
|
|
34.2
|
%
|
|
55.5
|
%
|
|
50.7
|
%
|
|
55.5
|
%
|
||||
Others’ interest in net income of consolidated subsidiaries
|
|
$
|
1,224
|
|
|
$
|
18,853
|
|
|
$
|
10,372
|
|
|
$
|
33,400
|
|
(A)
|
As a result, New Residential owned
65.8%
and
44.5%
of the Buyer, on average during the
three months ended September 30, 2017
and
2016
, respectively
49.3%
and
44.5%
of the Buyer, on average during the
nine months ended September 30, 2017
and
2016
, respectively.
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
September 30, 2017
|
(dollars in tables in thousands, except share data)
|
7.
|
INVESTMENTS IN REAL ESTATE SECURITIES
|
|
Nine Months Ended
September 30, 2017 |
||||||
|
(in millions)
|
||||||
|
Agency
|
|
Non-Agency
|
||||
Purchases
|
|
|
|
||||
Face
|
$
|
5,848.4
|
|
|
$
|
6,173.4
|
|
Purchase Price
|
$
|
6,037.9
|
|
|
$
|
2,418.4
|
|
|
|
|
|
||||
Sales
|
|
|
|
||||
Face
|
$
|
6,134.9
|
|
|
$
|
219.4
|
|
Amortized Cost
|
$
|
6,293.3
|
|
|
$
|
147.9
|
|
Sale Price
|
$
|
6,304.4
|
|
|
$
|
166.4
|
|
Gain (Loss) on Sale
|
$
|
11.1
|
|
|
$
|
18.4
|
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
Gross Unrealized
|
|
|
|
|
|
Weighted Average
|
|
|
||||||||||||||||||||||||||
Asset Type
|
|
Outstanding Face Amount
|
|
Amortized Cost Basis
|
|
Gains
|
|
Losses
|
|
Carrying Value
(A)
|
|
Number of Securities
|
|
Rating
(B)
|
|
Coupon
(C)
|
|
Yield
|
|
Life (Years)
(D)
|
|
Principal Subordination
(E)
|
|
Carrying Value
|
||||||||||||||||
Agency
RMBS
(F) (G)
|
|
$
|
1,123,553
|
|
|
$
|
1,195,281
|
|
|
$
|
1,352
|
|
|
$
|
(5,977
|
)
|
|
$
|
1,190,656
|
|
|
68
|
|
|
AAA
|
|
4.08
|
%
|
|
2.96
|
%
|
|
7.6
|
|
N/A
|
|
|
$
|
1,530,298
|
|
Non-Agency
RMBS
(H) (I)
|
|
11,906,608
|
|
|
5,136,883
|
|
|
412,213
|
|
|
(24,906
|
)
|
|
5,524,190
|
|
|
752
|
|
|
CCC-
|
|
1.97
|
%
|
|
5.77
|
%
|
|
7.7
|
|
8.9
|
%
|
|
3,543,560
|
|
||||||
Total/
Weighted
Average
|
|
$
|
13,030,161
|
|
|
$
|
6,332,164
|
|
|
$
|
413,565
|
|
|
$
|
(30,883
|
)
|
|
$
|
6,714,846
|
|
|
820
|
|
|
B
|
|
2.33
|
%
|
|
5.24
|
%
|
|
7.7
|
|
|
|
$
|
5,073,858
|
|
(A)
|
Fair value, which is equal to carrying value for all securities. See Note 12 regarding the estimation of fair value.
|
(B)
|
Represents the weighted average of the ratings of all securities in each asset type, expressed as an S&P equivalent rating. This excludes the ratings of the collateral underlying
218
bonds with a carrying value of
$335.8 million
which either have never been rated or for which rating information is no longer provided. For each security rated by multiple rating agencies, the lowest rating is used. New Residential used an implied AAA rating for the Agency RMBS. Ratings provided were
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
September 30, 2017
|
(dollars in tables in thousands, except share data)
|
(C)
|
Excludes residual bonds, and certain other Non-Agency bonds, with a carrying value of
$161.1 million
and
$0.0 million
, respectively, for which no coupon payment is expected.
|
(D)
|
The weighted average life is based on the timing of expected principal reduction on the assets.
|
(E)
|
Percentage of the amortized cost basis of securities that is subordinate to New Residential’s investments, excluding fair value option securities and servicer advance bonds.
|
(F)
|
Includes securities issued or guaranteed by U.S. Government agencies such as Fannie Mae or Freddie Mac.
|
(G)
|
The total outstanding face amount was
$1.0 billion
for fixed rate securities and
$113.6 million
for floating rate securities as of
September 30, 2017
.
|
(H)
|
The total outstanding face amount was
$1.2 billion
(including
$0.7 billion
of residual and fair value option notional amount) for fixed rate securities and
$10.7 billion
(including
$4.2 billion
of residual and fair value option notional amount) for floating rate securities as of
September 30, 2017
.
|
(I)
|
Includes other asset backed securities (“ABS”) consisting primarily of (i) interest-only securities and servicing strips (fair value option securities) which New Residential elected to carry at fair value and record changes to valuation through the income statement, (ii) bonds backed by servicer advances and (iii) bonds backed by consumer loans.
|
|
|
|
|
|
|
Gross Unrealized
|
|
|
|
|
|
Weighted Average
|
|||||||||||||||||||||||
Asset Type
|
|
Outstanding Face Amount
|
|
Amortized Cost Basis
|
|
Gains
|
|
Losses
|
|
Carrying Value
|
|
Number of Securities
|
|
Rating
|
|
Coupon
|
|
Yield
|
|
Life (Years)
|
|
Principal Subordination
|
|||||||||||||
Consumer loan bonds
|
|
$
|
24,472
|
|
|
$
|
29,048
|
|
|
$
|
3,202
|
|
|
$
|
—
|
|
|
$
|
32,250
|
|
|
2
|
|
|
N/A
|
|
N/A
|
|
|
17.31
|
%
|
|
1.4
|
|
N/A
|
Fair Value Option Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Interest-only securities
|
|
4,219,861
|
|
|
203,359
|
|
|
8,545
|
|
|
(10,257
|
)
|
|
201,647
|
|
|
45
|
|
|
AA+
|
|
1.57
|
%
|
|
5.81
|
%
|
|
2.8
|
|
N/A
|
|||||
Servicing strips
|
|
442,479
|
|
|
5,108
|
|
|
1,270
|
|
|
(193
|
)
|
|
6,185
|
|
|
16
|
|
|
N/A
|
|
0.27
|
%
|
|
22.40
|
%
|
|
6.7
|
|
N/A
|
|
|
|
|
Amortized Cost Basis
|
|
|
|
|
|
|
|
Weighted Average
|
|||||||||||||||||||||||||
Securities in an Unrealized Loss Position
|
|
Outstanding Face Amount
|
|
Before Impairment
|
|
Other-Than-
Temporary Impairment
(A)
|
|
After Impairment
|
|
Gross Unrealized Losses
|
|
Carrying Value
|
|
Number of Securities
|
|
Rating
(B)
|
|
Coupon
|
|
Yield
|
|
Life
(Years)
|
|||||||||||||||
Less than 12 Months
|
|
$
|
3,545,243
|
|
|
$
|
1,449,339
|
|
|
$
|
(1,223
|
)
|
|
$
|
1,448,116
|
|
|
$
|
(17,928
|
)
|
|
$
|
1,430,188
|
|
|
153
|
|
|
CCC+
|
|
2.32
|
%
|
|
4.50
|
%
|
|
7.2
|
12 or More Months
|
|
783,653
|
|
|
226,610
|
|
|
(286
|
)
|
|
226,324
|
|
|
(12,955
|
)
|
|
213,369
|
|
|
59
|
|
|
BBB
|
|
2.51
|
%
|
|
3.28
|
%
|
|
3.5
|
||||||
Total/Weighted Average
|
|
$
|
4,328,896
|
|
|
$
|
1,675,949
|
|
|
$
|
(1,509
|
)
|
|
$
|
1,674,440
|
|
|
$
|
(30,883
|
)
|
|
$
|
1,643,557
|
|
|
212
|
|
|
B
|
|
2.34
|
%
|
|
4.33
|
%
|
|
6.7
|
(A)
|
This amount represents OTTI recorded on securities that are in an unrealized loss position as of
September 30, 2017
.
|
(B)
|
The weighted average rating of securities in an unrealized loss position for less than 12 months excludes the rating of
50
bonds which either have never been rated or for which rating information is no longer provided. The weighted average rating of securities in an unrealized loss position for 12 or more months excludes the rating of
14
bonds which either have never been rated or for which rating information is no longer provided.
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
September 30, 2017
|
(dollars in tables in thousands, except share data)
|
|
September 30, 2017
|
||||||||||||||
|
|
|
|
|
Gross Unrealized Losses
|
||||||||||
|
Fair Value
|
|
Amortized Cost Basis After Impairment
|
|
Credit
(A)
|
|
Non-Credit
(B)
|
||||||||
Securities New Residential intends to sell
(C)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Securities New Residential is more likely than not to be required to sell
(D)
|
—
|
|
|
—
|
|
|
—
|
|
|
N/A
|
|
||||
Securities New Residential has no intent to sell and is not more likely than not to be required to sell:
|
|
|
|
|
|
|
|
||||||||
Credit impaired securities
|
373,046
|
|
|
378,585
|
|
|
(1,509
|
)
|
|
(5,539
|
)
|
||||
Non-credit impaired securities
|
1,270,511
|
|
|
1,295,855
|
|
|
—
|
|
|
(25,344
|
)
|
||||
Total debt securities in an unrealized loss position
|
$
|
1,643,557
|
|
|
$
|
1,674,440
|
|
|
$
|
(1,509
|
)
|
|
$
|
(30,883
|
)
|
(A)
|
This amount is required to be recorded as OTTI through earnings. In measuring the portion of credit losses, New Residential estimates the expected cash flow for each of the securities. This evaluation includes a review of the credit status and the performance of the collateral supporting those securities, including the credit of the issuer, key terms of the securities and the effect of local, industry and broader economic trends. Significant inputs in estimating the cash flows include New Residential’s expectations of prepayment rates, default rates and loss severities. Credit losses are measured as the decline in the present value of the expected future cash flows discounted at the investment’s effective interest rate.
|
(B)
|
This amount represents unrealized losses on securities that are due to non-credit factors and recorded through other comprehensive income.
|
(C)
|
A portion of securities New Residential intends to sell have a fair value equal to their amortized cost basis after impairment, and, therefore do
no
t have unrealized losses reflected in other comprehensive income as of
September 30, 2017
.
|
(D)
|
New Residential may, at times, be more likely than not to be required to sell certain securities for liquidity purposes. While the amount of the securities to be sold may be an estimate, and the securities to be sold have not yet been identified, New Residential must make its best estimate, which is subject to significant judgment regarding future events, and may differ materially from actual future sales.
|
|
Nine Months Ended September 30, 2017
|
||
Beginning balance of credit losses on debt securities for which a portion of an OTTI was
recognized in other comprehensive income
|
$
|
15,495
|
|
Increases to credit losses on securities for which an OTTI was previously recognized and a portion
of an OTTI was recognized in other comprehensive income
|
3,433
|
|
|
Additions for credit losses on securities for which an OTTI was not previously recognized
|
5,303
|
|
|
Reductions for securities for which the amount previously recognized in other comprehensive
income was recognized in earnings because the entity intends to sell the security or more likely
than not will be required to sell the security before recovery of its amortized cost basis
|
—
|
|
|
Reduction for credit losses on securities for which no OTTI was recognized in other
comprehensive income at the current measurement date
|
—
|
|
|
Reduction for securities sold during the period
|
(1,679
|
)
|
|
Ending balance of credit losses on debt securities for which a portion of an OTTI was recognized
in other comprehensive income
|
$
|
22,552
|
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
September 30, 2017
|
(dollars in tables in thousands, except share data)
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||||||||
Geographic Location
(A)
|
|
Outstanding Face Amount
|
|
Percentage of Total Outstanding
|
|
Outstanding Face Amount
|
|
Percentage of Total Outstanding
|
||||||
Western U.S.
|
|
$
|
4,571,310
|
|
|
38.5
|
%
|
|
$
|
2,757,424
|
|
|
38.3
|
%
|
Southeastern U.S.
|
|
2,826,743
|
|
|
23.8
|
%
|
|
1,635,596
|
|
|
22.7
|
%
|
||
Northeastern U.S.
|
|
2,354,645
|
|
|
19.8
|
%
|
|
1,426,519
|
|
|
19.8
|
%
|
||
Midwestern U.S.
|
|
1,258,005
|
|
|
10.6
|
%
|
|
778,372
|
|
|
10.8
|
%
|
||
Southwestern U.S.
|
|
851,851
|
|
|
7.2
|
%
|
|
557,033
|
|
|
7.7
|
%
|
||
Other
(B)
|
|
19,582
|
|
|
0.1
|
%
|
|
47,274
|
|
|
0.7
|
%
|
||
|
|
$
|
11,882,136
|
|
|
100.0
|
%
|
|
$
|
7,202,218
|
|
|
100.0
|
%
|
(A)
|
Excludes
$24.5 million
face amount of bonds backed by consumer loans as of
September 30, 2017
and
$100.0 million
face amount of bonds backed by servicer advances as of December 31, 2016.
|
(B)
|
Represents collateral for which New Residential was unable to obtain geographic information.
|
|
Outstanding Face Amount
|
|
Carrying Value
|
||||
September 30, 2017
|
$
|
4,862,764
|
|
|
$
|
3,140,510
|
|
December 31, 2016
|
2,951,498
|
|
|
1,871,466
|
|
|
Nine Months Ended September 30, 2017
|
||
Balance at December 31, 2016
|
$
|
1,200,125
|
|
Additions
|
734,367
|
|
|
Accretion
|
(149,334
|
)
|
|
Reclassifications from (to) non-accretable difference
|
271,919
|
|
|
Disposals
|
(67,197
|
)
|
|
Balance at September 30, 2017
|
$
|
1,989,880
|
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
September 30, 2017
|
(dollars in tables in thousands, except share data)
|
8.
|
INVESTMENTS IN RESIDENTIAL MORTGAGE LOANS
|
•
|
Loans Held-for-Investment (which may include PCD Loans)
|
•
|
Loans Held-for-Sale
|
•
|
Real Estate Owned (“REO”)
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||||||||||||||||||||||||||
|
|
Outstanding Face Amount
|
|
Carrying
Value |
|
Loan
Count |
|
Weighted Average Yield
|
|
Weighted Average Life (Years)
(A)
|
|
Floating Rate Loans as a % of Face Amount
|
|
Loan to Value Ratio (“LTV”)
(B)
|
|
Weighted Avg. Delinquency
(C)
|
|
Weighted Average FICO
(D)
|
|
Carrying Value
|
||||||||||||
Loan Type
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Reverse Mortgage Loans
(E) (F)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
N/A
|
|
|
$
|
—
|
|
Performing Loans
(G)
|
|
556,361
|
|
|
507,300
|
|
|
8,079
|
|
|
8.0
|
%
|
|
5.6
|
|
18.7
|
%
|
|
78.8
|
%
|
|
7.6
|
%
|
|
651
|
|
|
—
|
|
|||
Purchased Credit Deteriorated Loans
(H)
|
|
264,183
|
|
|
194,927
|
|
|
2,258
|
|
|
7.1
|
%
|
|
3.0
|
|
14.4
|
%
|
|
81.5
|
%
|
|
79.3
|
%
|
|
597
|
|
|
190,761
|
|
|||
Total Residential Mortgage Loans, held-for-investment
|
|
$
|
820,544
|
|
|
$
|
702,227
|
|
|
10,337
|
|
|
7.7
|
%
|
|
4.8
|
|
17.3
|
%
|
|
79.6
|
%
|
|
30.7
|
%
|
|
634
|
|
|
$
|
190,761
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Reverse Mortgage Loans
(E) (F)
|
|
$
|
19,207
|
|
|
$
|
9,342
|
|
|
51
|
|
|
7.2
|
%
|
|
4.3
|
|
13.6
|
%
|
|
135.1
|
%
|
|
81.6
|
%
|
|
N/A
|
|
|
$
|
11,468
|
|
Performing Loans
(G) (I)
|
|
779,618
|
|
|
791,134
|
|
|
11,139
|
|
|
4.0
|
%
|
|
4.9
|
|
16.4
|
%
|
|
65.8
|
%
|
|
3.4
|
%
|
|
663
|
|
|
175,194
|
|
|||
Non-Performing Loans
(H) (I)
|
|
820,912
|
|
|
626,275
|
|
|
5,228
|
|
|
5.5
|
%
|
|
4.3
|
|
21.4
|
%
|
|
97.0
|
%
|
|
60.0
|
%
|
|
583
|
|
|
510,003
|
|
|||
Total Residential Mortgage Loans, held-for-sale
|
|
$
|
1,619,737
|
|
|
$
|
1,426,751
|
|
|
16,418
|
|
|
4.8
|
%
|
|
4.6
|
|
18.9
|
%
|
|
82.4
|
%
|
|
33.0
|
%
|
|
622
|
|
|
$
|
696,665
|
|
(A)
|
The weighted average life is based on the expected timing of the receipt of cash flows.
|
(B)
|
LTV refers to the ratio comparing the loan’s unpaid principal balance to the value of the collateral property.
|
(C)
|
Represents the percentage of the total principal balance that is 60+ days delinquent.
|
(D)
|
The weighted average FICO score is based on the weighted average of information updated and provided by the loan servicer on a monthly basis.
|
(E)
|
Represents a
70%
participation interest that New Residential holds in a portfolio of reverse mortgage loans. The average loan balance outstanding based on total UPB was
$0.5 million
. Approximately
59%
of these loans have reached a termination event. As a result of the termination event, each such loan has matured and the borrower can no longer make draws on these loans.
|
(F)
|
FICO scores are not used in determining how much a borrower can access via a reverse mortgage loan.
|
(G)
|
Performing loans are generally placed on nonaccrual status when principal or interest is 120 days or more past due.
|
(H)
|
Includes loans with evidence of credit deterioration since origination where it is probable that New Residential will not collect all contractually required principal and interest payments. As of
September 30, 2017
, New Residential has placed Non-Performing Loans, held-for-sale on nonaccrual status, except as described in (I) below.
|
(I)
|
Includes
$34.9 million
and
$70.6 million
UPB of Ginnie Mae EBO performing and non-performing loans, respectively, on accrual status as contractual cash flows are guaranteed by the FHA.
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
September 30, 2017
|
(dollars in tables in thousands, except share data)
|
|
|
Percentage of Total Outstanding Unpaid Principal Amount
|
||||
State Concentration
|
|
September 30, 2017
|
|
December 31, 2016
|
||
New York
|
|
13.5
|
%
|
|
16.7
|
%
|
Florida
|
|
7.7
|
%
|
|
11.4
|
%
|
California
|
|
11.9
|
%
|
|
10.3
|
%
|
New Jersey
|
|
5.8
|
%
|
|
9.6
|
%
|
Texas
|
|
6.1
|
%
|
|
3.9
|
%
|
Illinois
|
|
3.9
|
%
|
|
4.0
|
%
|
Pennsylvania
|
|
3.2
|
%
|
|
2.9
|
%
|
Massachusetts
|
|
3.1
|
%
|
|
3.5
|
%
|
Maryland
|
|
2.9
|
%
|
|
4.7
|
%
|
Washington
|
|
1.9
|
%
|
|
2.8
|
%
|
Other U.S.
|
|
40.0
|
%
|
|
30.2
|
%
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
|
|
|
Securities Owned Prior
|
|
Assets Acquired
|
|
|
|
Loans Sold
(C)
|
|
Retained Bonds
|
|
Retained Assets
(C)
|
|||||||||||||||||||||||||||||||||||
Date of Call
(A)
|
|
Number of Trusts Called
|
|
Face Amount
|
|
Amortized Cost Basis
|
|
Loan UPB
|
|
Loan Price
(B)
|
|
REO & Other Price
(B)
|
|
Date of Securitization
|
|
UPB
|
|
Gain (Loss)
|
|
Basis
|
|
Loan UPB
|
|
Loan Price
|
|
REO & Other Price
|
|||||||||||||||||||||||
January 2017
|
|
2
|
|
|
$
|
49.3
|
|
|
$
|
43.6
|
|
|
$
|
98.8
|
|
|
$
|
96.7
|
|
|
$
|
7.5
|
|
|
N/A
(C)
|
|
N/A
(C)
|
|
|
N/A
(C)
|
|
|
N/A
(C)
|
|
|
N/A
(C)
|
|
|
N/A
(C)
|
|
|
N/A
(C)
|
|
||||||
February 2017
|
|
31
|
|
|
60.9
|
|
|
40.1
|
|
|
882.0
|
|
|
895.5
|
|
|
10.1
|
|
|
March 2017
|
|
$
|
773.8
|
|
|
$
|
2.1
|
|
|
$
|
81.9
|
|
|
$
|
105.9
|
|
|
$
|
90.1
|
|
|
$
|
10.8
|
|
|||||
March 2017
|
|
12
|
|
|
—
|
|
|
—
|
|
|
222.4
|
|
|
228.8
|
|
|
0.4
|
|
|
N/A
(C)
|
|
N/A
(C)
|
|
|
N/A
(C)
|
|
|
N/A
(C)
|
|
|
27.7
|
|
|
25.7
|
|
|
0.4
|
|
|||||||||||
April 2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
April 2017
|
|
668.0
|
|
|
10.3
|
|
|
76.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||||
April 2017
|
|
14
|
|
|
9.8
|
|
|
6.3
|
|
|
376.9
|
|
|
378.8
|
|
|
5.9
|
|
|
N/A
(C)
|
|
N/A
(C)
|
|
|
N/A
(C)
|
|
|
N/A
(C)
|
|
|
62.5
|
|
|
55.7
|
|
|
5.9
|
|
|||||||||||
May 2017
|
|
15
|
|
|
26.4
|
|
|
16.9
|
|
|
420.5
|
|
|
424.4
|
|
|
3.7
|
|
|
June 2017
#1
|
|
716.0
|
|
|
5.7
|
|
|
68.4
|
|
|
47.6
|
|
|
40.5
|
|
|
3.7
|
|
|||||||||||
June 2017
|
|
20
|
|
|
1.0
|
|
|
0.5
|
|
|
534.8
|
|
|
549.8
|
|
|
0.8
|
|
|
June 2017
#2
|
|
497.6
|
|
|
10.3
|
|
|
58.4
|
|
|
34.9
|
|
|
40.4
|
|
|
0.8
|
|
|||||||||||
June 2017
|
|
3
|
|
|
28.2
|
|
|
17.3
|
|
|
101.7
|
|
|
106.6
|
|
|
1.9
|
|
|
N/A
(C)
|
|
N/A
(C)
|
|
|
N/A
(C)
|
|
|
N/A
(C)
|
|
|
N/A
(C)
|
|
|
N/A
(C)
|
|
|
N/A
(C)
|
|
|||||||||||
July 2017
|
|
22
|
|
|
19.9
|
|
|
15.7
|
|
|
358.5
|
|
|
360.5
|
|
|
1.7
|
|
|
July 2017
|
|
339.3
|
|
|
2.7
|
|
|
25.7
|
|
|
18.3
|
|
|
18.6
|
|
|
1.7
|
|
|||||||||||
September 2017
|
|
21
|
|
|
120.6
|
|
|
95.1
|
|
|
583.7
|
|
|
593.2
|
|
|
5.3
|
|
|
N/A
(C)
|
|
N/A
(C)
|
|
N/A
(C)
|
|
N/A
(C)
|
|
N/A
(C)
|
|
N/A
(C)
|
|
N/A
(C)
|
(A)
|
Any related securitization may occur on the same or a subsequent date, depending on market conditions and other factors.
|
(B)
|
Price includes par amount paid for all underlying residential mortgage loans of the trusts, plus the basis of the exercised call rights, plus advances and costs incurred (including MSR Fund Payments, as defined in Note 15) in exercising such call rights.
|
(C)
|
Loans were sold through a securitization which was treated as a sale for accounting purposes. Retained assets are reflected as of the date of the relevant securitization. The securitization that occurred in April 2017 primarily included loans from the March 2017 calls and other acquired loans. The June 2017
#1
securitization primarily included loans from the April 2017 and May 2017 calls, but also included
$31.1 million
of previously acquired loans. No loans from the January 2017 calls, no loans from the last three June 2017 calls and no loans from the September 2017 calls had been securitized by
September 30, 2017
. In May 2017, certain reperforming residential mortgage loans were financed with a securitization which was not treated as a sale for accounting purposes (see Variable Interest Entities below and Note 11).
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
September 30, 2017
|
(dollars in tables in thousands, except share data)
|
September 30, 2017
|
|||
Days Past Due
|
|
Delinquency Status
(A)
|
|
Current
|
|
84.6
|
%
|
30-59
|
|
7.6
|
%
|
60-89
|
|
3.6
|
%
|
90-119
(B)
|
|
2.1
|
%
|
120+
(C)
|
|
2.1
|
%
|
|
|
100.0
|
%
|
(A)
|
Represents the percentage of the total principal balance that corresponds to loans that are in each delinquency status.
|
(B)
|
Includes loans 90-119 days past due and still accruing interest because they are generally placed on nonaccrual status at 120 days or more past due.
|
(C)
|
Represents nonaccrual loans.
|
|
Performing Loans
|
||
Balance at December 31, 2016
|
$
|
—
|
|
Purchases/additional fundings
|
527,098
|
|
|
Proceeds from repayments
|
(23,704
|
)
|
|
Accretion of loan discount (premium) and other amortization
(A)
|
4,387
|
|
|
Charge-offs
|
(481
|
)
|
|
Transfer of loans to other assets
|
—
|
|
|
Transfer of loans to real estate owned
|
—
|
|
|
Balance at September 30, 2017
|
$
|
507,300
|
|
(A)
|
Includes accelerated accretion of discount on loans paid in full and on loans transferred to other assets.
|
|
Performing Loans
|
||
Balance at December 31, 2016
|
$
|
—
|
|
Provision for loan losses
(A)
|
481
|
|
|
Charge-offs
(B)
|
(481
|
)
|
|
Balance at September 30, 2017
|
$
|
—
|
|
(A)
|
Based on an analysis of collective borrower performance, credit ratings of borrowers, loan-to-value ratios, estimated value of the underlying collateral, key terms of the loans and historical and anticipated trends in defaults and loss severities at a pool level.
|
(B)
|
Loans, other than PCD loans, are generally charged off or charged down to the net realizable value of the collateral (i.e., fair value less costs to sell), with an offset to the allowance for loan losses, when available information confirms that loans are uncollectible.
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
September 30, 2017
|
(dollars in tables in thousands, except share data)
|
Balance at December 31, 2016
|
$
|
190,761
|
|
Purchases/additional fundings
|
58,884
|
|
|
Sales
|
—
|
|
|
Proceeds from repayments
|
(25,166
|
)
|
|
Accretion of loan discount and other amortization
|
14,898
|
|
|
Transfer of loans to real estate owned
|
(21,370
|
)
|
|
Transfer of loans to held-for-sale
|
(23,080
|
)
|
|
Balance at September 30, 2017
|
$
|
194,927
|
|
|
Unpaid Principal Balance
|
|
Carrying Value
|
||||
September 30, 2017
|
$
|
264,183
|
|
|
$
|
194,927
|
|
December 31, 2016
|
203,673
|
|
|
190,761
|
|
Balance at December 31, 2016
|
$
|
23,688
|
|
Additions
|
21,454
|
|
|
Accretion
|
(14,898
|
)
|
|
Reclassifications from non-accretable difference
(A)
|
24,075
|
|
|
Disposals
(B)
|
(1,507
|
)
|
|
Transfer of loans to held-for-sale
(C)
|
—
|
|
|
Balance at September 30, 2017
|
$
|
52,812
|
|
(A)
|
Represents a probable and significant increase in cash flows previously expected to be uncollectible.
|
(B)
|
Includes sales of loans or foreclosures, which result in removal of the loan from the PCD loan pool at its carrying amount.
|
(C)
|
Represents loans not initially acquired with the intent to sell for which New Residential determined that it no longer has the intent to hold for the foreseeable future, or until maturity or payoff.
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
September 30, 2017
|
(dollars in tables in thousands, except share data)
|
|
|
For the
Nine Months Ended September 30, 2017 |
||
|
|
Loans Held-for-Sale
|
||
Balance at December 31, 2016
|
|
$
|
696,665
|
|
Purchases
(A)
|
|
4,146,740
|
|
|
Transfer of loans from held-for-investment
(B)
|
|
23,080
|
|
|
Sales
|
|
(3,267,595
|
)
|
|
Transfer of loans to other assets
(C)
|
|
(13,976
|
)
|
|
Transfer of loans to real estate owned
|
|
(53,254
|
)
|
|
Proceeds from repayments
|
|
(85,746
|
)
|
|
Valuation (provision) reversal on loans
(D)
|
|
(19,163
|
)
|
|
Balance at September 30, 2017
|
|
$
|
1,426,751
|
|
(A)
|
Represents loans acquired with the intent to sell.
|
(B)
|
Represents loans not initially acquired with the intent to sell for which New Residential determined that it no longer has the intent to hold for the foreseeable future, or until maturity or payoff.
|
(C)
|
Represents loans for which foreclosure has been completed and for which New Residential has made, or intends to make, a claim with the governmental agency that has guaranteed the loans that are now recognized as claims receivable in Other Assets (Note 2).
|
(D)
|
Represents the fair value adjustments to loans upon transfer to held-for-sale and provision recorded on certain purchased held-for-sale loans, including an aggregate of
$21.6 million
of provision related to the call transactions executed during the
nine months ended September 30, 2017
.
|
|
|
Real Estate Owned
|
||
Balance at December 31, 2016
|
|
$
|
59,591
|
|
Purchases
|
|
25,667
|
|
|
Transfer of loans to real estate owned
|
|
91,414
|
|
|
Sales
|
|
(70,652
|
)
|
|
Valuation (provision) reversal on REO
|
|
1,261
|
|
|
Balance at September 30, 2017
|
|
$
|
107,281
|
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
September 30, 2017
|
(dollars in tables in thousands, except share data)
|
|
|
As of
|
||
|
|
September 30, 2017
|
||
Assets
|
|
|
||
Residential mortgage loans
|
|
$
|
193,010
|
|
Other assets
|
|
—
|
|
|
Total assets
(A)
|
|
$
|
193,010
|
|
Liabilities
|
|
|
||
Notes and bonds payable
(B)
|
|
$
|
189,843
|
|
Accounts payable and accrued expenses
|
|
16
|
|
|
Total liabilities
(A)
|
|
$
|
189,859
|
|
(A)
|
The creditors of the RPL Borrowers do not have recourse to the general credit of New Residential, and the assets of the RPL Borrowers are not directly available to satisfy New Residential’s obligations.
|
(B)
|
Includes
$78.2 million
of bonds retained by New Residential issued by these VIEs.
|
Residential mortgage loan UPB
|
|
$
|
4,701,889
|
|
Weighted average delinquency
(A)
|
|
1.64
|
%
|
|
Net credit losses for the nine months ended September 30, 2017
|
|
$
|
4,943
|
|
Face amount of debt held by third parties
(B)
|
|
$
|
4,453,838
|
|
|
|
|
||
Carrying value of bonds retained by New Residential
|
|
$
|
400,793
|
|
Cash flows received by New Residential on these bonds for the nine months ended September 30, 2017
|
|
$
|
63,064
|
|
(A)
|
Represents the percentage of the UPB that is
60
+ days delinquent.
|
(B)
|
Excludes bonds retained by New Residential.
|
9.
|
INVESTMENTS IN CONSUMER LOANS
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
September 30, 2017
|
(dollars in tables in thousands, except share data)
|
•
|
Loans Held-for-Investment:
|
◦
|
Performing Loans
|
◦
|
PCD Loans
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
September 30, 2017
|
(dollars in tables in thousands, except share data)
|
|
Unpaid Principal Balance
|
|
Interest in Consumer Loans
|
|
Carrying Value
|
|
Weighted Average Coupon
|
|
Weighted Average Expected Life (Years)
(A)
|
|
Weighted Average Delinquency
(B)
|
|||||||
September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Consumer Loan Companies
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Performing Loans
|
$
|
1,064,345
|
|
|
53.5
|
%
|
|
$
|
1,111,493
|
|
|
18.7
|
%
|
|
3.8
|
|
5.7
|
%
|
Purchased Credit Deteriorated Loans
(C)
|
302,093
|
|
|
53.5
|
%
|
|
254,005
|
|
|
16.3
|
%
|
|
3.4
|
|
12.4
|
%
|
||
Other - Performing Loans
|
106,535
|
|
|
100.0
|
%
|
|
102,435
|
|
|
14.2
|
%
|
|
1.1
|
|
3.4
|
%
|
||
Total Consumer Loans, held-for-investment
|
$
|
1,472,973
|
|
|
|
|
$
|
1,467,933
|
|
|
17.9
|
%
|
|
3.5
|
|
6.9
|
%
|
|
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Consumer Loan Companies
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Performing Loans
|
$
|
1,275,121
|
|
|
53.5
|
%
|
|
$
|
1,321,825
|
|
|
18.7
|
%
|
|
4.2
|
|
6.3
|
%
|
Purchased Credit Deteriorated Loans
(C)
|
371,261
|
|
|
53.5
|
%
|
|
316,532
|
|
|
16.6
|
%
|
|
3.6
|
|
14.0
|
%
|
||
Other - Performing Loans
|
163,570
|
|
|
100.0
|
%
|
|
161,129
|
|
|
14.2
|
%
|
|
1.5
|
|
0.3
|
%
|
||
Total Consumer Loans, held-for-investment
|
$
|
1,809,952
|
|
|
|
|
$
|
1,799,486
|
|
|
17.9
|
%
|
|
3.8
|
|
7.3
|
%
|
(A)
|
Represents the weighted average expected timing of the receipt of expected cash flows for this investment.
|
(B)
|
Represents the percentage of the total unpaid principal balance that is 30+ days delinquent. Delinquency status is the primary credit quality indicator as it provides early warning of borrowers who may be experiencing financial difficulties.
|
(C)
|
Includes loans with evidence of credit deterioration since origination where it is probable that New Residential will not collect all contractually required principal and interest payments, which are accounted for as PCD loans.
|
September 30, 2017
|
|||
Days Past Due
|
|
Delinquency Status
(A)
|
|
Current
|
|
94.5
|
%
|
30-59
|
|
2.2
|
%
|
60-89
|
|
1.3
|
%
|
90-119
(B)
|
|
0.8
|
%
|
120+
(B) (C)
|
|
1.2
|
%
|
|
|
100.0
|
%
|
(A)
|
Represents the percentage of the total unpaid principal balance that corresponds to loans that are in each delinquency status.
|
(B)
|
Includes loans more than 90 days past due and still accruing interest.
|
(C)
|
Interest is accrued up to the date of charge-off at 180 days past due.
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
September 30, 2017
|
(dollars in tables in thousands, except share data)
|
|
|
Performing Loans
|
||
Balance at December 31, 2016
|
|
$
|
1,482,954
|
|
Purchases
|
|
—
|
|
|
Additional fundings
(A)
|
|
41,930
|
|
|
Proceeds from repayments
|
|
(256,210
|
)
|
|
Accretion of loan discount and premium amortization, net
|
|
3,987
|
|
|
Gross charge-offs
|
|
(56,569
|
)
|
|
Additions to the allowance for loan losses, net
|
|
(2,164
|
)
|
|
Balance at September 30, 2017
|
|
$
|
1,213,928
|
|
(A)
|
Represents draws on consumer loans with revolving privileges.
|
|
|
Collectively Evaluated
(A)
|
|
Individually Impaired
(B)
|
|
Total
|
||||||
Balance at December 31, 2016
|
|
$
|
2,441
|
|
|
$
|
997
|
|
|
$
|
3,438
|
|
Provision (reversal) for loan losses
|
|
50,212
|
|
|
504
|
|
|
50,716
|
|
|||
Net charge-offs
(C)
|
|
(48,552
|
)
|
|
—
|
|
|
(48,552
|
)
|
|||
Balance at September 30, 2017
|
|
$
|
4,101
|
|
|
$
|
1,501
|
|
|
$
|
5,602
|
|
(A)
|
Represents smaller-balance homogeneous loans that are not individually considered impaired and are evaluated based on an analysis of collective borrower performance, key terms of the loans and historical and anticipated trends in defaults and loss severities, and consideration of the unamortized acquisition discount.
|
(B)
|
Represents consumer loan modifications considered to be troubled debt restructurings (“TDRs”) as they provide concessions to borrowers, primarily in the form of interest rate reductions, who are experiencing financial difficulty. As of
September 30, 2017
, there are
$9.5 million
in UPB and
$9.6 million
in carrying value of consumer loans classified as TDRs.
|
(C)
|
Consumer loans, other than PCD loans, are charged off when available information confirms that loans are uncollectible, which is generally when they become 180 days past due. Charge-offs are presented net of
$8.0 million
in recoveries of previously charged-off UPB.
|
Balance at December 31, 2016
|
|
$
|
316,532
|
|
(Allowance) reversal for loan losses
(A)
|
|
3,013
|
|
|
Proceeds from repayments
|
|
(96,684
|
)
|
|
Accretion of loan discount and other amortization
|
|
31,144
|
|
|
Balance at September 30, 2017
|
|
$
|
254,005
|
|
(A)
|
An allowance represents the present value of cash flows expected at acquisition that are no longer expected to be collected. A reversal results from an increase to expected cash flows that reverses a prior allowance.
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
September 30, 2017
|
(dollars in tables in thousands, except share data)
|
|
Unpaid Principal Balance
|
|
Carrying Value
|
||||
September 30, 2017
|
$
|
302,093
|
|
|
$
|
254,005
|
|
December 31, 2016
|
371,261
|
|
|
316,532
|
|
Balance at December 31, 2016
|
|
$
|
167,928
|
|
Accretion
|
|
(31,144
|
)
|
|
Reclassifications to non-accretable difference
(A)
|
|
(902
|
)
|
|
Balance at September 30, 2017
|
|
$
|
135,882
|
|
(A)
|
Represents a probable and significant decrease in cash flows previously expected to be collectible.
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
Total Consumer Loan Companies equity
|
|
$
|
73,720
|
|
|
$
|
75,311
|
|
Others’ ownership interest
|
|
46.5
|
%
|
|
46.5
|
%
|
||
Others’ interests in equity of consolidated subsidiary
|
|
$
|
34,276
|
|
|
$
|
35,020
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net Consumer Loan Companies income (loss)
|
$
|
26,616
|
|
|
$
|
28,655
|
|
|
$
|
74,580
|
|
|
$
|
60,118
|
|
Others’ ownership interest as a percent of total
|
46.5
|
%
|
|
46.5
|
%
|
|
46.5
|
%
|
|
46.5
|
%
|
||||
Others’ interest in net income (loss) of consolidated subsidiaries
|
$
|
12,376
|
|
|
$
|
13,325
|
|
|
$
|
34,679
|
|
|
$
|
27,955
|
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
September 30, 2017
|
(dollars in tables in thousands, except share data)
|
|
|
As of
|
||
|
|
September 30, 2017
|
||
Assets
|
|
|
||
Consumer loans, held-for-investment
|
|
$
|
1,365,498
|
|
Restricted cash
|
|
11,965
|
|
|
Accrued interest receivable
|
|
19,890
|
|
|
Total assets
(A)
|
|
$
|
1,397,353
|
|
Liabilities
|
|
|
||
Notes and bonds payable
(B)
|
|
$
|
1,364,186
|
|
Accounts payable and accrued expenses
|
|
4,834
|
|
|
Total liabilities
(A)
|
|
$
|
1,369,020
|
|
(A)
|
The creditors of the Consumer Loan SPVs do not have recourse to the general credit of New Residential, and the assets of the Consumer Loan SPVs are not directly available to satisfy New Residential’s obligations.
|
(B)
|
Includes
$121.0 million
of bonds retained by New Residential issued by these VIEs.
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
September 30, 2017
|
(dollars in tables in thousands, except share data)
|
|
|
September 30, 2017
(A)
|
||
Consumer loans, at fair value
|
|
$
|
231,839
|
|
Warrants
|
|
32,500
|
|
|
Other assets
|
|
55,821
|
|
|
Warehouse financing
|
|
(149,185
|
)
|
|
Other liabilities
|
|
(942
|
)
|
|
Equity
|
|
$
|
170,033
|
|
New Residential’s investment
|
|
$
|
42,044
|
|
New Residential’s ownership
|
|
24.7
|
%
|
|
|
Three Months Ended
September 30, 2017 (A) |
|
Nine Months Ended
September 30, 2017 (A) |
||||
Interest income
|
|
$
|
12,276
|
|
|
$
|
25,105
|
|
Interest expense
|
|
(2,635
|
)
|
|
(5,768
|
)
|
||
Change in fair value of consumer loans and warrants
|
|
12,475
|
|
|
16,030
|
|
||
Gain on sale of consumer loans
(B)
|
|
6,928
|
|
|
18,778
|
|
||
Other expenses
|
|
(1,459
|
)
|
|
(3,039
|
)
|
||
Net income
|
|
$
|
27,585
|
|
|
$
|
51,106
|
|
New Residential’s equity in net income
|
|
$
|
6,769
|
|
|
$
|
12,649
|
|
New Residential’s ownership
|
|
24.5
|
%
|
|
24.8
|
%
|
(A)
|
Data as of, and for the periods ended,
August 31, 2017
, as a result of the one month reporting lag.
|
(B)
|
During the
nine months ended
September 30, 2017
, LoanCo sold, through securitizations which were treated as sales for accounting purposes,
$1.1 billion
in UPB of consumer loans. LoanCo retained
$121.3 million
of residual interests in the securitizations and distributed them to the LoanCo co-investors, including New Residential.
|
|
Unpaid Principal Balance
|
|
Interest in Consumer Loans
|
|
Carrying Value
|
|
Weighted Average Coupon
|
|
Weighted Average Expected Life (Years)
(A)
|
|
Weighted Average Delinquency
(B)
|
|||||||
September 30, 2017
(C)
|
$
|
231,839
|
|
|
25.0
|
%
|
|
$
|
231,839
|
|
|
16.4
|
%
|
|
1.4
|
|
0.3
|
%
|
(A)
|
Represents the weighted average expected timing of the receipt of expected cash flows for this investment.
|
(B)
|
Represents the percentage of the total unpaid principal balance that is 30+ days delinquent. Delinquency status is the primary credit quality indicator as it provides early warning of borrowers who may be experiencing financial difficulties.
|
(C)
|
Data as of
August 31, 2017
as a result of the one month reporting lag.
|
|
Nine Months Ended
September 30, 2017 |
||
Balance at beginning of period
|
$
|
—
|
|
Contributions to equity method investees
|
344,902
|
|
|
Distributions of earnings from equity method investees
|
(4,291
|
)
|
|
Distributions of capital from equity method investees
|
(306,938
|
)
|
|
Earnings from investments in consumer loans, equity method investees
|
12,649
|
|
|
Balance at end of period
|
$
|
46,322
|
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
September 30, 2017
|
(dollars in tables in thousands, except share data)
|
10.
|
DERIVATIVES
|
(A)
|
Net of
$5.6 million
of related variation margin accounts.
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
TBAs, short position
(A)
|
$
|
2,731,000
|
|
|
$
|
3,465,500
|
|
TBAs, long position
(A)
|
1,730,000
|
|
|
2,125,552
|
|
||
Interest Rate Caps
(B)
|
897,500
|
|
|
1,185,000
|
|
||
Interest Rate Swaps
(C)
|
3,713,500
|
|
|
3,640,000
|
|
(A)
|
Represents the notional amount of Agency RMBS, classified as derivatives.
|
(B)
|
Caps LIBOR at
0.50%
for
$550.0 million
of notional, at
0.75%
for
$12.5 million
of notional, at
2.00%
for
$185.0 million
of notional, and at
4.00%
for
$150.0 million
of notional. The weighted average maturity of the interest rate caps as of
September 30, 2017
was
11
months.
|
(C)
|
Receive LIBOR and pay a fixed rate. The weighted average maturity of the interest rate swaps as of
September 30, 2017
was
26
months and the weighted average fixed pay rate was
1.68%
.
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
September 30, 2017
|
(dollars in tables in thousands, except share data)
|
|
|
For the
Three Months Ended September 30, |
|
For the
Nine Months Ended September 30, |
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Other income (loss), net
(A)
|
|
|
|
|
|
|
|
|
||||||||
TBAs
|
|
$
|
(657
|
)
|
|
$
|
10,502
|
|
|
$
|
880
|
|
|
$
|
(22
|
)
|
Interest Rate Caps
|
|
(1,083
|
)
|
|
463
|
|
|
(1,353
|
)
|
|
(3,683
|
)
|
||||
Interest Rate Swaps
|
|
5,300
|
|
|
10,083
|
|
|
349
|
|
|
(11,407
|
)
|
||||
|
|
3,560
|
|
|
21,048
|
|
|
(124
|
)
|
|
(15,112
|
)
|
||||
Gain (loss) on settlement of investments, net
|
|
|
|
|
|
|
|
|
||||||||
TBAs
|
|
(16,579
|
)
|
|
(15,922
|
)
|
|
(45,989
|
)
|
|
(55,159
|
)
|
||||
Interest Rate Caps
|
|
322
|
|
|
—
|
|
|
(240
|
)
|
|
(1,124
|
)
|
||||
Interest Rate Swaps
|
|
(2,499
|
)
|
|
(3,003
|
)
|
|
(12,097
|
)
|
|
(7,416
|
)
|
||||
|
|
(18,756
|
)
|
|
(18,925
|
)
|
|
(58,326
|
)
|
|
(63,699
|
)
|
||||
Total income (losses)
|
|
$
|
(15,196
|
)
|
|
$
|
2,123
|
|
|
$
|
(58,450
|
)
|
|
$
|
(78,811
|
)
|
(A)
|
Represents unrealized gains (losses).
|
11.
|
DEBT OBLIGATIONS
|
|
|
September 30, 2017
|
|
December 31, 2016
|
|||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Collateral
|
|
|
|||||||||||||||||||
Debt Obligations/Collateral
|
|
Outstanding Face Amount
|
|
Carrying Value
(A)
|
|
Final Stated Maturity
(B)
|
|
Weighted Average Funding Cost
|
|
Weighted Average Life (Years)
|
|
Outstanding Face
|
|
Amortized Cost Basis
|
|
Carrying Value
|
|
Weighted Average Life (Years)
|
|
Carrying Value
(A)
|
|||||||||||||
Repurchase Agreements
(C)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Agency RMBS
(D)
|
|
$
|
1,846,934
|
|
|
$
|
1,846,934
|
|
|
Oct-17 to Nov-17
|
|
1.35
|
%
|
|
0.1
|
|
$
|
1,845,992
|
|
|
$
|
1,905,003
|
|
|
$
|
1,907,360
|
|
|
0.3
|
|
$
|
1,764,760
|
|
Non-Agency RMBS
(E)
|
|
4,316,544
|
|
|
4,316,544
|
|
|
Oct-17 to Jan-18
|
|
2.76
|
%
|
|
0.1
|
|
11,050,796
|
|
|
5,024,799
|
|
|
5,404,713
|
|
|
7.7
|
|
2,654,242
|
|
||||||
Residential Mortgage Loans
(F)
|
|
1,584,033
|
|
|
1,581,980
|
|
|
Oct-17 to Feb-19
|
|
3.75
|
%
|
|
0.3
|
|
2,136,065
|
|
|
1,907,212
|
|
|
1,890,819
|
|
|
4.3
|
|
686,412
|
|
||||||
Real Estate Owned
(G)(H)
|
|
102,703
|
|
|
102,570
|
|
|
Oct-17 to Feb-19
|
|
3.57
|
%
|
|
0.5
|
|
N/A
|
|
|
N/A
|
|
|
145,939
|
|
|
N/A
|
|
85,217
|
|
||||||
Total Repurchase Agreements
|
|
7,850,214
|
|
|
7,848,028
|
|
|
|
|
2.64
|
%
|
|
0.1
|
|
|
|
|
|
|
|
|
|
5,190,631
|
|
|||||||||
Notes and Bonds Payable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Secured Corporate Notes
(I)
|
|
583,686
|
|
|
583,415
|
|
|
Jun-19 to Jul-22
|
|
4.98
|
%
|
|
2.9
|
|
263,232,259
|
|
|
1,085,585
|
|
|
1,212,791
|
|
|
5.9
|
|
729,145
|
|
||||||
MSRs
(J)
|
|
1,097,085
|
|
|
1,096,380
|
|
|
Feb-18 to Apr-22
|
|
5.28
|
%
|
|
2.3
|
|
223,999,150
|
|
|
1,949,608
|
|
|
2,145,609
|
|
|
6.2
|
|
—
|
|
||||||
Servicer Advances
(K)
|
|
4,081,010
|
|
|
4,073,283
|
|
|
Nov-17 to Dec-21
|
|
3.29
|
%
|
|
2.2
|
|
4,297,775
|
|
|
4,591,210
|
|
|
4,680,637
|
|
|
4.5
|
|
5,549,872
|
|
||||||
Residential Mortgage Loans
(L)
|
|
143,207
|
|
|
143,207
|
|
|
Oct-17 to Apr-20
|
|
3.61
|
%
|
|
2.5
|
|
234,686
|
|
|
184,639
|
|
|
184,639
|
|
|
7.9
|
|
8,271
|
|
||||||
Consumer Loans
(M)
|
|
1,340,943
|
|
|
1,337,708
|
|
|
Dec-21 to Mar-24
|
|
3.35
|
%
|
|
3.2
|
|
1,472,792
|
|
|
1,473,353
|
|
|
1,467,752
|
|
|
3.5
|
|
1,700,211
|
|
||||||
Receivable from government agency
(L)
|
|
2,974
|
|
|
2,974
|
|
|
Oct-17
|
|
3.78
|
%
|
|
1.1
|
|
N/A
|
|
|
N/A
|
|
|
2,792
|
|
|
N/A
|
|
3,106
|
|
||||||
Total Notes and Bonds Payable
|
|
7,248,905
|
|
|
7,236,967
|
|
|
|
|
3.75
|
%
|
|
2.5
|
|
|
|
|
|
|
|
|
|
7,990,605
|
|
|||||||||
Total/ Weighted Average
|
|
$
|
15,099,119
|
|
|
$
|
15,084,995
|
|
|
|
|
3.17
|
%
|
|
1.3
|
|
|
|
|
|
|
|
|
|
$
|
13,181,236
|
|
(A)
|
Net of deferred financing costs.
|
(B)
|
All debt obligations with a stated maturity of
October 2017
were refinanced, extended or repaid.
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
September 30, 2017
|
(dollars in tables in thousands, except share data)
|
(C)
|
These repurchase agreements had approximately
$18.4 million
of associated accrued interest payable as of
September 30, 2017
.
|
(D)
|
All of the Agency RMBS repurchase agreements have a fixed rate. Collateral amounts include approximately
$1.8 billion
of related trade and other receivables.
|
(E)
|
All of the Non-Agency RMBS repurchase agreements have LIBOR-based floating interest rates. This includes repurchase agreements of
$160.3 million
on retained servicer advance and consumer loan bonds.
|
(F)
|
All of these repurchase agreements have LIBOR-based floating interest rates.
|
(G)
|
All of these repurchase agreements have LIBOR-based floating interest rates.
|
(H)
|
Includes financing collateralized by receivables including claims from FHA on Ginnie Mae EBO loans for which foreclosure has been completed and for which New Residential has made or intends to make a claim on the FHA guarantee.
|
(I)
|
Includes
$213.7 million
of corporate loans which bear interest equal to the sum of (i) a floating rate index equal to one-month LIBOR and (ii) a margin of
3.75%
, and includes
$370.0 million
of corporate loans which bear interest equal to the sum of (i) a floating rate index equal to one-month LIBOR and (ii) a margin of
3.75%
. The outstanding face amount of the collateral represents the UPB of the residential mortgage loans underlying the Excess MSRs that secure these notes.
|
(J)
|
Includes
$290.0 million
of MSR notes which bear interest equal to the sum of (i) a floating rate index equal to one-month LIBOR and (ii) a margin of
4.25%
,
$232.9 million
of MSR notes which bear interest equal to the sum of (i) a floating rate index equal to one-month LIBOR and (ii) a margin of
3.75%
,
$74.0 million
of MSR notes which bear interest equal to the sum of (i) a floating rate index equal to one-month LIBOR and (ii) a margin of
3.50%
, and
$500.2 million
of MSR notes which bear interest equal to the sum of (i) a floating rate index equal to one-month LIBOR and (ii) a margin of
4.00%
. The outstanding face amount of the collateral represents the UPB of the residential mortgage loans underlying the MSRs and mortgage servicing rights financing receivable that secure these notes.
|
(K)
|
$3.8 billion
face amount of the notes have a fixed rate while the remaining notes bear interest equal to the sum of (i) a floating rate index equal to one-month LIBOR or a cost of funds rate, as applicable, and (ii) a margin ranging from
1.9%
to
2.4%
. Collateral includes Servicer Advance Investments, as well as servicer advances receivable related to the mortgage servicing rights and mortgage servicing rights financing receivables owned by NRM.
|
(L)
|
Represents: (i) a
$10.8 million
note payable to Nationstar that bears interest equal to one-month LIBOR plus
2.88%
and (ii)
$135.4 million
of asset-backed notes held by third parties which bear interest equal to
3.60%
.
|
(M)
|
Includes the SpringCastle debt, which is comprised of the following classes of asset-backed notes held by third parties:
$1.0 billion
UPB of Class A notes with a coupon of
3.05%
and a stated maturity date in November 2023;
$210.8 million
UPB of Class B notes with a coupon of
4.10%
and a stated maturity date in March 2024;
$18.3 million
UPB of Class C-1 notes with a coupon of
5.63%
and a stated maturity date in March 2024;
$18.3 million
UPB of Class C-2 notes with a coupon of
5.63%
and a stated maturity date in March 2024. Also includes a
$86.3 million
face amount note collateralized by newly originated consumer loans which bears interest equal to
4.00%
.
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
September 30, 2017
|
(dollars in tables in thousands, except share data)
|
|
Excess MSRs
|
|
MSRs
|
|
Servicer Advances
(A)
|
|
Real Estate Securities
|
|
Residential Mortgage Loans and REO
|
|
Consumer Loans
|
|
Total
|
||||||||||||||
Balance at December 31, 2016
|
$
|
729,145
|
|
|
$
|
—
|
|
|
$
|
5,549,872
|
|
|
$
|
4,419,002
|
|
|
$
|
783,006
|
|
|
$
|
1,700,211
|
|
|
$
|
13,181,236
|
|
Repurchase Agreements:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Borrowings
|
—
|
|
|
—
|
|
|
—
|
|
|
35,275,158
|
|
|
1,438,585
|
|
|
—
|
|
|
36,713,743
|
|
|||||||
Repayments
|
—
|
|
|
—
|
|
|
—
|
|
|
(33,530,682
|
)
|
|
(526,536
|
)
|
|
—
|
|
|
(34,057,218
|
)
|
|||||||
Capitalized deferred financing costs, net of amortization
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
871
|
|
|
—
|
|
|
871
|
|
|||||||
Notes and Bonds Payable:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Borrowings
|
1,300,354
|
|
|
1,098,058
|
|
|
4,022,655
|
|
|
—
|
|
|
140,323
|
|
|
—
|
|
|
6,561,390
|
|
|||||||
Repayments
|
(1,450,922
|
)
|
|
(973
|
)
|
|
(5,502,088
|
)
|
|
—
|
|
|
(5,518
|
)
|
|
(364,011
|
)
|
|
(7,323,512
|
)
|
|||||||
Discount on borrowings, net of amortization
|
—
|
|
|
—
|
|
|
(156
|
)
|
|
—
|
|
|
—
|
|
|
1,335
|
|
|
1,179
|
|
|||||||
Capitalized deferred financing costs, net of amortization
|
4,838
|
|
|
(705
|
)
|
|
3,000
|
|
|
—
|
|
|
—
|
|
|
173
|
|
|
7,306
|
|
|||||||
Balance at September 30, 2017
|
$
|
583,415
|
|
|
$
|
1,096,380
|
|
|
$
|
4,073,283
|
|
|
$
|
6,163,478
|
|
|
$
|
1,830,731
|
|
|
$
|
1,337,708
|
|
|
$
|
15,084,995
|
|
(A)
|
New Residential net settles daily borrowings and repayments of the Notes and Bonds Payable on its servicer advances.
|
Year
|
|
Nonrecourse
|
|
Recourse
|
|
Total
|
||||||
October 1 through December 31, 2017
|
|
$
|
185,907
|
|
|
$
|
7,624,943
|
|
|
$
|
7,810,850
|
|
2018
|
|
829,678
|
|
|
832,334
|
|
|
1,662,012
|
|
|||
2019
|
|
1,551,725
|
|
|
370,639
|
|
|
1,922,364
|
|
|||
2020
|
|
511,622
|
|
|
—
|
|
|
511,622
|
|
|||
2021
|
|
1,223,797
|
|
|
—
|
|
|
1,223,797
|
|
|||
2022 and thereafter
|
|
1,254,602
|
|
|
713,872
|
|
|
1,968,474
|
|
|||
|
|
$
|
5,557,331
|
|
|
$
|
9,541,788
|
|
|
$
|
15,099,119
|
|
Debt Obligations / Collateral
|
|
Collateral Type
|
|
Borrowing Capacity
|
|
Balance Outstanding
|
|
Available Financing
|
||||||
Repurchase Agreements
|
|
|
|
|
|
|
|
|
||||||
Residential Mortgage Loans
|
|
Residential mortgage loans and REO
|
|
$
|
2,890,000
|
|
|
$
|
1,686,736
|
|
|
$
|
1,203,264
|
|
Notes and Bonds Payable
|
|
|
|
|
|
|
|
|
||||||
Secured Corporate Loan
|
|
Excess MSRs
|
|
750,000
|
|
|
370,000
|
|
|
380,000
|
|
|||
MSRs
|
|
MSRs
|
|
700,000
|
|
|
596,898
|
|
|
103,102
|
|
|||
Servicer Advances
(A)
|
|
Servicer advances
|
|
2,339,192
|
|
|
1,474,512
|
|
|
864,680
|
|
|||
Consumer Loans
|
|
Consumer loans
|
|
150,000
|
|
|
86,343
|
|
|
63,657
|
|
|||
|
|
|
|
$
|
6,829,192
|
|
|
$
|
4,214,489
|
|
|
$
|
2,614,703
|
|
(A)
|
New Residential’s unused borrowing capacity is available if New Residential has additional eligible collateral to pledge and meets other borrowing conditions as set forth in the applicable agreements, including any applicable advance rate. New Residential pays a
0.1%
fee on the unused borrowing capacity. Excludes borrowing capacity and outstanding debt for retained Non-Agency bonds collateralized by servicer advances with a current face amount of
$93.5 million
.
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
September 30, 2017
|
(dollars in tables in thousands, except share data)
|
12.
|
FAIR VALUE MEASUREMENT
|
|
|
|
|
|
Fair Value
|
|||||||||||||||||||
|
Principal Balance or Notional Amount
|
|
Carrying Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Investments in:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Excess mortgage servicing rights, at fair value
(A)
|
$
|
228,173,728
|
|
|
$
|
1,178,308
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,178,308
|
|
|
$
|
1,178,308
|
|
|
Excess mortgage servicing rights, equity method investees, at fair value
(A)
|
53,675,234
|
|
|
175,633
|
|
|
—
|
|
|
—
|
|
|
175,633
|
|
|
175,633
|
|
|||||||
Mortgage servicing rights, at fair value
(A)
|
177,285,425
|
|
|
1,702,749
|
|
|
—
|
|
|
—
|
|
|
1,702,749
|
|
|
1,702,749
|
|
|||||||
Mortgage servicing rights financing receivable, at fair value
|
67,052,949
|
|
|
607,396
|
|
|
—
|
|
—
|
|
—
|
|
|
607,396
|
|
|
607,396
|
|
||||||
Servicer advance investments, at fair
value
|
3,651,705
|
|
|
4,044,802
|
|
|
—
|
|
|
—
|
|
|
4,044,802
|
|
|
4,044,802
|
|
|||||||
Real estate securities, available-for-sale
|
13,030,161
|
|
|
6,714,846
|
|
|
—
|
|
|
1,190,656
|
|
|
5,524,190
|
|
|
6,714,846
|
|
|||||||
Residential mortgage loans, held-for-investment
|
820,544
|
|
|
702,227
|
|
|
—
|
|
|
—
|
|
|
713,665
|
|
|
713,665
|
|
|||||||
Residential mortgage loans, held-for-sale
|
1,619,737
|
|
|
1,426,751
|
|
|
—
|
|
|
—
|
|
|
1,474,430
|
|
|
1,474,430
|
|
|||||||
Consumer loans, held-for-investment
|
1,472,973
|
|
|
1,467,933
|
|
|
—
|
|
|
—
|
|
|
1,483,223
|
|
|
1,483,223
|
|
|||||||
Derivative assets
|
5,358,500
|
|
|
10,444
|
|
|
—
|
|
|
10,444
|
|
|
—
|
|
|
10,444
|
|
|||||||
Cash and cash equivalents
|
279,760
|
|
|
279,760
|
|
|
279,760
|
|
|
—
|
|
|
—
|
|
|
279,760
|
|
|||||||
Restricted cash
|
152,047
|
|
|
152,047
|
|
|
152,047
|
|
|
—
|
|
|
—
|
|
|
152,047
|
|
|||||||
Other assets
|
1,427,891
|
|
|
31,150
|
|
|
20,900
|
|
|
—
|
|
|
10,250
|
|
|
31,150
|
|
|||||||
|
|
|
$
|
18,494,046
|
|
|
$
|
452,707
|
|
|
$
|
1,201,100
|
|
|
$
|
16,914,646
|
|
|
$
|
18,568,453
|
|
|||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Repurchase agreements
|
$
|
7,850,214
|
|
|
$
|
7,848,028
|
|
|
$
|
—
|
|
|
$
|
7,850,214
|
|
|
$
|
—
|
|
|
$
|
7,850,214
|
|
|
Notes and bonds payable
|
7,248,905
|
|
|
7,236,967
|
|
|
—
|
|
|
—
|
|
|
7,248,265
|
|
|
7,248,265
|
|
|||||||
Derivative liabilities
|
3,713,500
|
|
|
82
|
|
|
—
|
|
|
82
|
|
|
—
|
|
|
82
|
|
|||||||
|
|
|
$
|
15,085,077
|
|
|
$
|
—
|
|
|
$
|
7,850,296
|
|
|
$
|
7,248,265
|
|
|
$
|
15,098,561
|
|
(A)
|
The notional amount represents the total unpaid principal balance of the residential mortgage loans underlying the MSRs and Excess MSRs. New Residential does not receive an excess mortgage servicing amount on non-performing loans in Agency portfolios.
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
September 30, 2017
|
(dollars in tables in thousands, except share data)
|
|
Level 3
|
|
|
||||||||||||||||||||||||||||
|
Excess MSRs
(A)
|
|
Excess MSRs in Equity Method Investees
(A)(B)
|
|
MSRs
|
|
Mortgage Servicing Rights Financing Receivable
|
|
Servicer Advance Investments
|
|
Non-Agency RMBS
|
|
|
||||||||||||||||||
|
Agency
|
|
Non-Agency
|
|
|
|
|
|
Total
|
||||||||||||||||||||||
Balance at December 31, 2016
|
$
|
381,757
|
|
|
$
|
1,017,698
|
|
|
$
|
194,788
|
|
|
$
|
659,483
|
|
|
$
|
—
|
|
|
$
|
5,706,593
|
|
|
$
|
3,543,560
|
|
|
$
|
11,503,879
|
|
Transfers
(C)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Transfers from Level 3
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Transfers to Level 3
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Gains (losses) included in net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Included in other-than-temporary impairment on securities
(D)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,736
|
)
|
|
(8,736
|
)
|
||||||||
Included in change in fair value of investments in excess mortgage servicing rights
(D)
|
(9,550
|
)
|
|
(23,100
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(32,650
|
)
|
||||||||
Included in change in fair value of investments in excess mortgage servicing rights, equity method investees
(D)
|
—
|
|
|
|
|
|
6,056
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,056
|
|
||||||||
Included in servicing revenue, net
(E)
|
—
|
|
|
—
|
|
|
—
|
|
|
(81,986
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(81,986
|
)
|
||||||||
Included in change in fair value of investments in mortgage servicing rights financing receivable
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
75,828
|
|
|
—
|
|
|
—
|
|
|
75,828
|
|
||||||||
Included in change in fair value of servicer advance investments
|
—
|
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
70,469
|
|
|
—
|
|
|
70,469
|
|
||||||||
Included in gain (loss) on settlement of investments, net
|
—
|
|
|
1,993
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,327
|
|
|
18,426
|
|
|
29,746
|
|
||||||||
Included in other income (loss), net
(D)
|
1,755
|
|
|
193
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
340
|
|
|
2,288
|
|
||||||||
Gains (losses) included in other comprehensive income
(F)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
259,313
|
|
|
259,313
|
|
||||||||
Interest income
|
20,505
|
|
|
54,733
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
446,666
|
|
|
246,890
|
|
|
768,794
|
|
||||||||
Purchases, sales and repayments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Purchases
|
—
|
|
|
—
|
|
|
—
|
|
|
1,125,252
|
|
|
467,118
|
|
|
9,328,137
|
|
|
2,418,381
|
|
|
13,338,888
|
|
||||||||
Proceeds from sales
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(166,400
|
)
|
|
(166,400
|
)
|
||||||||
Proceeds from repayments
|
(60,618
|
)
|
|
(135,076
|
)
|
|
(25,211
|
)
|
|
—
|
|
|
—
|
|
|
(11,035,170
|
)
|
|
(787,584
|
)
|
|
(12,043,659
|
)
|
||||||||
Ocwen Transaction (Note 5)
|
—
|
|
|
(71,982
|
)
|
|
—
|
|
|
—
|
|
|
64,450
|
|
|
(481,220
|
)
|
|
—
|
|
|
(488,752
|
)
|
||||||||
Balance at September 30, 2017
|
$
|
333,849
|
|
|
$
|
844,459
|
|
|
$
|
175,633
|
|
|
$
|
1,702,749
|
|
|
$
|
607,396
|
|
|
$
|
4,044,802
|
|
|
$
|
5,524,190
|
|
|
$
|
13,233,078
|
|
(A)
|
Includes the recapture agreement for each respective pool.
|
(B)
|
Amounts represent New Residential’s portion of the Excess MSRs held by the respective joint ventures in which New Residential has a
50%
interest.
|
(C)
|
Transfers are assumed to occur at the beginning of the respective period.
|
(D)
|
The gains (losses) recorded in earnings during the period are attributable to the change in unrealized gains (losses) relating to Level 3 assets still held at the reporting dates and realized gains (losses) recorded during the period.
|
(E)
|
The components of Servicing revenue, net are disclosed in Note 5.
|
(F)
|
These gains (losses) were included in net unrealized gain (loss) on securities in the Condensed Consolidated Statements of Comprehensive Income.
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
September 30, 2017
|
(dollars in tables in thousands, except share data)
|
|
|
Significant Inputs
(A)
|
||||||||||||
|
|
Prepayment
Rate
(B)
|
|
Delinquency
(C)
|
|
Recapture
Rate
(D)
|
|
Mortgage Servicing Amount or Excess Mortgage Servicing Amount (bps)
(E)
|
|
Collateral Weighted Average Maturity (Years)
(F)
|
||||
Excess MSRs Directly Held (Note 4)
|
|
|
|
|
|
|
|
|
|
|
||||
Agency
|
|
|
|
|
|
|
|
|
|
|
||||
Original Pools
|
|
9.4
|
%
|
|
2.9
|
%
|
|
30.5
|
%
|
|
21
|
|
|
23
|
Recaptured Pools
|
|
7.2
|
%
|
|
3.7
|
%
|
|
22.9
|
%
|
|
22
|
|
|
25
|
Recapture Agreement
|
|
7.0
|
%
|
|
3.5
|
%
|
|
25.8
|
%
|
|
21
|
|
|
—
|
|
|
8.7
|
%
|
|
3.1
|
%
|
|
28.5
|
%
|
|
21
|
|
|
23
|
Non-Agency
(G)
|
|
|
|
|
|
|
|
|
|
|
||||
Nationstar and SLS Serviced:
|
|
|
|
|
|
|
|
|
|
|
||||
Original Pools
|
|
12.2
|
%
|
|
N/A
|
|
|
15.0
|
%
|
|
15
|
|
|
24
|
Recaptured Pools
|
|
7.0
|
%
|
|
N/A
|
|
|
19.8
|
%
|
|
22
|
|
|
24
|
Recapture Agreement
|
|
7.0
|
%
|
|
N/A
|
|
|
19.7
|
%
|
|
20
|
|
|
—
|
Ocwen Serviced Pools
|
|
9.2
|
%
|
|
N/A
|
|
|
—
|
%
|
|
14
|
|
|
26
|
|
|
9.7
|
%
|
|
N/A
|
|
|
3.9
|
%
|
|
14
|
|
|
26
|
Total/Weighted Average--Excess MSRs Directly Held
|
|
9.4
|
%
|
|
3.1
|
%
|
|
10.9
|
%
|
|
16
|
|
|
25
|
|
|
|
|
|
|
|
|
|
|
|
||||
Excess MSRs Held through Equity Method Investees (Note 4)
|
|
|
|
|
|
|
|
|
|
|
||||
Agency
|
|
|
|
|
|
|
|
|
|
|
||||
Original Pools
|
|
11.0
|
%
|
|
4.9
|
%
|
|
34.9
|
%
|
|
18
|
|
|
22
|
Recaptured Pools
|
|
7.4
|
%
|
|
4.6
|
%
|
|
24.3
|
%
|
|
23
|
|
|
24
|
Recapture Agreement
|
|
7.4
|
%
|
|
4.6
|
%
|
|
24.2
|
%
|
|
23
|
|
|
—
|
Total/Weighted Average--Excess MSRs Held through Investees
|
|
9.3
|
%
|
|
4.8
|
%
|
|
29.8
|
%
|
|
20
|
|
|
23
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total/Weighted Average--Excess MSRs All Pools
|
|
9.4
|
%
|
|
3.5
|
%
|
|
15.0
|
%
|
|
17
|
|
|
25
|
|
|
|
|
|
|
|
|
|
|
|
||||
MSRs
|
|
|
|
|
|
|
|
|
|
|
||||
Agency
|
|
|
|
|
|
|
|
|
|
|
||||
Mortgage Servicing Rights
(H)
|
|
10.2
|
%
|
|
0.9
|
%
|
|
25.7
|
%
|
|
27
|
|
|
21
|
Mortgage Servicing Rights Financing Receivable
(H)
|
|
10.4
|
%
|
|
0.9
|
%
|
|
14.6
|
%
|
|
27
|
|
|
21
|
Non-Agency
|
|
|
|
|
|
|
|
|
|
|
||||
Mortgage Servicing Rights Financing Receivable
(H)
|
|
8.3
|
%
|
|
11.4
|
%
|
|
—
|
%
|
|
33
|
|
|
22
|
(A)
|
Weighted by fair value of the portfolio.
|
(B)
|
Projected annualized weighted average lifetime voluntary and involuntary prepayment rate using a prepayment vector.
|
(C)
|
Projected percentage of residential mortgage loans in the pool for which the borrower will miss its mortgage payments.
|
(D)
|
Percentage of voluntarily prepaid loans that are expected to be refinanced by the related servicer or subservicer, as applicable.
|
(E)
|
Weighted average total mortgage servicing amount, in excess of the basic fee as applicable, measured in basis points (bps). A weighted average cost of subservicing of
$7.26
per loan per month was used to value the agency MSRs, including MSR Financing Receivables. A weighted average cost of subservicing of
$12.57
per loan per month was used to value the non-agency MSRs, including MSR Financing Receivables.
|
(F)
|
Weighted average maturity of the underlying residential mortgage loans in the pool.
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
September 30, 2017
|
(dollars in tables in thousands, except share data)
|
(G)
|
For certain pools, the Excess MSR will be paid on the total UPB of the mortgage portfolio (including both performing and delinquent loans until REO). For these pools, no delinquency assumption is used.
|
(H)
|
For certain pools, recapture rate represents the expected recapture rate with the successor subservicer appointed by NRM.
|
|
Significant Inputs
|
|||||||||||||||
|
Weighted Average
|
|
|
|
||||||||||||
|
Outstanding Servicer Advances to UPB of Underlying Residential Mortgage Loans
|
|
Prepayment Rate
(A)
|
|
Delinquency
|
|
Mortgage Servicing Amount
(B)
|
|
Discount Rate
|
|
Collateral Weighted Average Maturity (Years)
(C)
|
|||||
September 30, 2017
|
1.8
|
%
|
|
10.1
|
%
|
|
13.2
|
%
|
|
17.2
|
|
bps
|
6.8
|
%
|
|
25.6
|
(A)
|
Projected annual weighted average lifetime voluntary and involuntary prepayment rate using a prepayment vector.
|
(B)
|
Mortgage servicing amount is net of
13.1
bps which represents the amount New Residential pays its servicers as a monthly servicing fee.
|
(C)
|
Weighted average maturity of the underlying residential mortgage loans in the pool.
|
|
|
|
|
|
|
Fair Value
|
|||||||||||||||||
Asset Type
|
|
Outstanding Face Amount
|
|
Amortized Cost Basis
|
|
Multiple Quotes
(A)
|
|
Single Quote
(B)
|
|
Total
|
|
Level
|
|||||||||||
Agency RMBS
|
|
$
|
1,123,553
|
|
|
$
|
1,195,281
|
|
|
$
|
1,190,656
|
|
|
$
|
—
|
|
|
$
|
1,190,656
|
|
|
2
|
|
Non-Agency RMBS
(C)
|
|
11,906,608
|
|
|
5,136,883
|
|
|
5,516,426
|
|
|
7,764
|
|
|
5,524,190
|
|
|
3
|
|
|||||
Total
|
|
$
|
13,030,161
|
|
|
$
|
6,332,164
|
|
|
$
|
6,707,082
|
|
|
$
|
7,764
|
|
|
$
|
6,714,846
|
|
|
|
(A)
|
New Residential generally obtained pricing service quotations or broker quotations from
two
sources, one of which was generally the seller (the party that sold New Residential the security) for Non-Agency RMBS. New Residential evaluates quotes received and determines one as being most representative of fair value, and does not use an average of the quotes. Even if New Residential receives two or more quotes on a particular security that come from non-selling brokers or pricing services, it does not use an average because it believes using an actual quote more closely represents a transactable price for the security than an average level. Furthermore, in some cases there is a wide disparity between the quotes New Residential receives. New Residential believes using an average of the quotes in these cases would not represent the fair value of the asset. Based on New Residential’s own fair value analysis, it selects one of the quotes which is believed to more accurately reflect fair value. New Residential has not adjusted any of the quotes received in the periods presented. These quotations are generally received via email and contain disclaimers which state that they are “indicative” and not “actionable” — meaning that the party giving the quotation is not bound to actually purchase the security at the quoted price. New Residential’s investments in Agency RMBS are classified within Level 2 of the fair value hierarchy because the market for these securities is very active and market prices are readily observable.
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
September 30, 2017
|
(dollars in tables in thousands, except share data)
|
|
|
Fair Value
|
|
Discount Rate
|
|
Prepayment Rate
(a)
|
|
CDR
(b)
|
|
Loss Severity
(c)
|
||
Non-Agency RMBS
|
|
$
|
4,521,531
|
|
|
2.07% to 32.75%
|
|
0.25% to 20.9%
|
|
0.1% to 9.00%
|
|
5.0 % to 100%
|
(a)
|
Represents the annualized rate of the prepayments as a percentage of the total principal balance of the pool.
|
(b)
|
Represents the annualized rate of the involuntary prepayments (defaults) as a percentage of the total principal balance of the pool.
|
(c)
|
Represents the expected amount of future realized losses resulting from the ultimate liquidation of a particular loan, expressed as the net amount of loss relative to the outstanding balance.
|
(B)
|
New Residential was unable to obtain quotations from more than one source on these securities. For approximately
$7.3 million
, the one source was the party that sold New Residential the security.
|
(C)
|
Includes New Residential’s investments in interest-only notes for which the fair value option for financial instruments was elected.
|
|
|
Fair Value and Carrying Value
|
|
Discount Rate
|
|
Weighted Average Life (Years)
(A)
|
|
Prepayment Rate
|
|
CDR
(B)
|
|
Loss Severity
(C)
|
||||||
Residential Mortgage Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Performing Loans
|
|
$
|
693,427
|
|
|
3.8
|
%
|
|
5.1
|
|
9.4
|
%
|
|
1.2
|
%
|
|
37.2
|
%
|
Non-Performing Loans
|
|
60,979
|
|
|
6.6
|
%
|
|
2.9
|
|
3.0
|
%
|
|
3.0
|
%
|
|
30.0
|
%
|
|
Total/Weighted Average
|
|
$
|
754,406
|
|
|
4.0
|
%
|
|
4.9
|
|
8.9
|
%
|
|
1.3
|
%
|
|
36.6
|
%
|
(A)
|
The weighted average life is based on the expected timing of the receipt of cash flows.
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
September 30, 2017
|
(dollars in tables in thousands, except share data)
|
(B)
|
Represents the annualized rate of the involuntary prepayments (defaults) as a percentage of the total principal balance.
|
(C)
|
Loss severity is the expected amount of future realized losses resulting from the ultimate liquidation of a particular loan, expressed as the net amount of loss relative to the outstanding loan balance.
|
|
|
Carrying Value
|
|
Fair Value
|
|
Discount Rate
|
|
Weighted Average Life (Years)
(A)
|
|
Prepayment Rate
|
|
CDR
(B)
|
|
Loss Severity
(C)
|
||||||||
Reverse Mortgage Loans
(D)
|
|
$
|
9,342
|
|
|
$
|
10,748
|
|
|
7.0
|
%
|
|
4.3
|
|
N/A
|
|
|
N/A
|
|
|
6.2
|
%
|
Performing Loans
|
|
605,007
|
|
|
602,544
|
|
|
7.7
|
%
|
|
5.3
|
|
4.2
|
%
|
|
2.6
|
%
|
|
41.9
|
%
|
||
Non-Performing Loans
|
|
760,223
|
|
|
820,397
|
|
|
5.8
|
%
|
|
4.0
|
|
3.4
|
%
|
|
2.9
|
%
|
|
34.0
|
%
|
||
Total/Weighted Average
|
|
$
|
1,374,572
|
|
|
$
|
1,433,689
|
|
|
6.6
|
%
|
|
4.6
|
|
|
|
|
|
37.3
|
%
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Consumer Loans
|
|
$
|
1,467,933
|
|
|
$
|
1,483,223
|
|
|
9.0
|
%
|
|
3.5
|
|
22.3
|
%
|
|
6.3
|
%
|
|
86.9
|
%
|
(A)
|
The weighted average life is based on the expected timing of the receipt of cash flows.
|
(B)
|
Represents the annualized rate of the involuntary prepayments (defaults) as a percentage of the total principal balance.
|
(C)
|
Loss severity is the expected amount of future realized losses resulting from the ultimate liquidation of a particular loan, expressed as the net amount of loss relative to the outstanding loan balance.
|
(D)
|
Carrying value and fair value represent a
70%
participation interest New Residential holds in the portfolio of reverse mortgage loans.
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
September 30, 2017
|
(dollars in tables in thousands, except share data)
|
13.
|
EQUITY AND EARNINGS PER SHARE
|
Held by the Manager
|
16,128,730
|
|
Issued to the Manager and subsequently transferred to certain of the Manager’s employees
|
2,367,458
|
|
Issued to the independent directors
|
6,000
|
|
Total
|
18,502,188
|
|
Recipient
|
Date of
Grant/
Exercise
(A)
|
|
Number of Unexercised
Options
|
|
Options
Exercisable as of
September 30, 2017
|
|
Weighted
Average
Exercise
Price
(B)
|
|
Intrinsic
Value of Exercisable Options as of
September 30, 2017
(millions)
|
||||||
Directors
|
Various
|
|
6,000
|
|
|
6,000
|
|
|
$
|
13.99
|
|
|
$
|
—
|
|
Manager
(C)
|
2012
|
|
25,000
|
|
|
25,000
|
|
|
7.19
|
|
|
0.2
|
|
||
Manager
(C)
|
2013
|
|
835,571
|
|
|
835,571
|
|
|
11.48
|
|
|
4.4
|
|
||
Manager
(C)
|
2014
|
|
1,437,500
|
|
|
1,437,500
|
|
|
12.20
|
|
|
6.5
|
|
||
Manager
(C)
|
2015
|
|
8,543,539
|
|
|
8,072,518
|
|
|
15.46
|
|
|
10.3
|
|
||
Manager
(C)
|
2016
|
|
2,000,000
|
|
|
866,667
|
|
|
14.20
|
|
|
2.2
|
|
||
Manager
(C)
|
2017
|
|
5,654,578
|
|
|
1,319,402
|
|
|
15.00
|
|
|
2.3
|
|
||
Outstanding
|
|
|
18,502,188
|
|
|
12,562,658
|
|
|
|
|
|
(A)
|
Options expire on the tenth anniversary from date of grant.
|
(B)
|
The exercise prices are subject to adjustment in connection with return of capital dividends.
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
September 30, 2017
|
(dollars in tables in thousands, except share data)
|
(C)
|
The Manager assigned certain of its options to Fortress’s employees as follows:
|
Date of Grant
|
|
Range of Exercise
Prices
|
|
Total Unexercised
Inception to Date
|
|
2014
|
|
$12.20
|
|
258,750
|
|
2015
|
|
$15.25 to $15.88
|
|
1,708,708
|
|
2016
|
|
$14.20
|
|
400,000
|
|
Total
|
|
|
|
2,367,458
|
|
|
|
Amount
|
|
Weighted Average Exercise Price
|
|||
December 31, 2016 outstanding options
|
|
13,196,610
|
|
|
|
||
Options granted
|
|
5,654,578
|
|
|
$
|
15.00
|
|
Options exercised
|
|
—
|
|
|
$
|
—
|
|
Options expired unexercised
|
|
(349,000
|
)
|
|
|
||
September 30, 2017 outstanding options
|
|
18,502,188
|
|
|
See table above
|
14.
|
COMMITMENTS AND CONTINGENCIES
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
September 30, 2017
|
(dollars in tables in thousands, except share data)
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
September 30, 2017
|
(dollars in tables in thousands, except share data)
|
15.
|
TRANSACTIONS WITH AFFILIATES AND AFFILIATED ENTITIES
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
September 30, 2017
|
(dollars in tables in thousands, except share data)
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
Management fees
|
$
|
4,734
|
|
|
$
|
3,689
|
|
Incentive compensation
|
72,123
|
|
|
42,197
|
|
||
Expense reimbursements and other
|
2,767
|
|
|
1,462
|
|
||
|
$
|
79,624
|
|
|
$
|
47,348
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Management fees
|
$
|
14,187
|
|
|
$
|
10,536
|
|
|
$
|
41,447
|
|
|
$
|
30,552
|
|
Incentive compensation
|
19,491
|
|
|
7,075
|
|
|
72,123
|
|
|
13,200
|
|
||||
Expense reimbursements
(A)
|
125
|
|
|
125
|
|
|
375
|
|
|
375
|
|
||||
Total
|
$
|
33,803
|
|
|
$
|
17,736
|
|
|
$
|
113,945
|
|
|
$
|
44,127
|
|
(A)
|
Included in General and Administrative Expenses in the Condensed Consolidated Statements of Income.
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
September 30, 2017
|
(dollars in tables in thousands, except share data)
|
16.
|
RECLASSIFICATION FROM ACCUMULATED OTHER COMPREHENSIVE INCOME INTO NET INCOME
|
Accumulated Other Comprehensive Income Components
|
|
Statement of Income Location
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Reclassification of net realized (gain) loss on securities into earnings
|
|
Gain (loss) on settlement of investments, net
|
|
$
|
(7,342
|
)
|
|
$
|
679
|
|
|
$
|
(29,592
|
)
|
|
$
|
(15,072
|
)
|
Reclassification of net realized (gain) loss on securities into earnings
|
|
Other-than-temporary impairment on securities
|
|
1,509
|
|
|
1,765
|
|
|
8,736
|
|
|
7,838
|
|
||||
Total reclassifications
|
|
|
|
$
|
(5,833
|
)
|
|
$
|
2,444
|
|
|
$
|
(20,856
|
)
|
|
$
|
(7,234
|
)
|
17.
|
INCOME TAXES
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Current:
|
|
|
|
|
|
|
|
|
||||||||
Federal
|
|
$
|
4,072
|
|
|
$
|
3,290
|
|
|
$
|
6,683
|
|
|
$
|
4,561
|
|
State and Local
|
|
131
|
|
|
478
|
|
|
354
|
|
|
636
|
|
||||
Total Current Income Tax Expense (Benefit)
|
|
4,203
|
|
|
3,768
|
|
|
7,037
|
|
|
5,197
|
|
||||
Deferred:
|
|
|
|
|
|
|
|
|
||||||||
Federal
|
|
20,977
|
|
|
16,375
|
|
|
97,053
|
|
|
12,575
|
|
||||
State and Local
|
|
7,433
|
|
|
757
|
|
|
16,963
|
|
|
423
|
|
||||
Total Deferred Income Tax Expense (Benefit)
|
|
28,410
|
|
|
17,132
|
|
|
114,016
|
|
|
12,998
|
|
||||
Total Income Tax Expense (Benefit)
|
|
$
|
32,613
|
|
|
$
|
20,900
|
|
|
$
|
121,053
|
|
|
$
|
18,195
|
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
September 30, 2017
|
(dollars in tables in thousands, except share data)
|
18.
|
SUBSEQUENT EVENTS
|
|
Outstanding
Face Amount
|
|
Amortized
Cost Basis
|
|
Percentage of Total Amortized Cost Basis
|
|
Carrying
Value
|
|
Weighted
Average
Life (years)
(A)
|
|||||||
Investments in:
|
|
|
|
|
|
|
|
|
|
|||||||
Excess MSRs
(B)
|
$
|
281,848,962
|
|
|
$
|
1,193,420
|
|
|
6.9
|
%
|
|
$
|
1,353,941
|
|
|
6.1
|
MSRs
(B) (C)
|
177,285,425
|
|
|
1,521,605
|
|
|
8.8
|
%
|
|
1,702,749
|
|
|
6.4
|
|||
Mortgage Servicing Rights Financing Receivable
(B) (C)
|
67,052,949
|
|
|
511,558
|
|
|
3.0
|
%
|
|
607,396
|
|
|
5.6
|
|||
Servicer Advance Investments
(B) (D)
|
3,651,705
|
|
|
3,955,375
|
|
|
23.0
|
%
|
|
4,044,802
|
|
|
5.1
|
|||
Agency RMBS
(E)
|
1,123,553
|
|
|
1,195,281
|
|
|
6.9
|
%
|
|
1,190,656
|
|
|
7.6
|
|||
Non-Agency RMBS
(E)
|
11,906,608
|
|
|
5,136,883
|
|
|
29.7
|
%
|
|
5,524,190
|
|
|
7.7
|
|||
Residential Mortgage Loans
|
2,440,281
|
|
|
2,164,212
|
|
|
12.5
|
%
|
|
2,128,978
|
|
|
4.6
|
|||
Real Estate Owned
|
N/A
|
|
|
117,413
|
|
|
0.7
|
%
|
|
107,281
|
|
|
N/A
|
|||
Consumer Loans
|
1,472,973
|
|
|
1,473,534
|
|
|
8.5
|
%
|
|
1,467,933
|
|
|
3.5
|
|||
Consumer Loans, Equity Method Investees
|
231,839
|
|
|
N/A
|
|
|
N/A
|
|
|
46,322
|
|
|
1.4
|
|||
Total/Weighted Average
|
|
|
$
|
17,269,281
|
|
|
100.0
|
%
|
|
$
|
18,174,248
|
|
|
6.0
|
||
|
|
|
|
|
|
|
|
|
|
|||||||
Reconciliation to GAAP total assets:
|
|
|
|
|
|
|
|
|
|
|||||||
Cash and restricted cash
|
|
|
|
|
|
|
431,807
|
|
|
|
||||||
Servicer advances receivable
|
|
|
|
|
|
|
657,255
|
|
|
|
||||||
Trades receivable
|
|
|
|
|
|
|
1,785,708
|
|
|
|
||||||
Deferred tax asset, net
|
|
|
|
|
|
|
32,440
|
|
|
|
||||||
Other assets
|
|
|
|
|
|
|
323,375
|
|
|
|
||||||
GAAP total assets
|
|
|
|
|
|
|
$
|
21,404,833
|
|
|
|
(A)
|
Weighted average life is based on the timing of expected principal reduction on the asset.
|
(B)
|
The outstanding face amount of Excess MSRs, MSRs, Mortgage Servicing Rights Financing Receivable, and Servicer Advance Investments is based on 100% of the face amount of the underlying residential mortgage loans and currently outstanding advances, as applicable.
|
(C)
|
Represents MSRs where our subsidiary, NRM, is the named servicer.
|
(D)
|
The value of our Servicer Advance Investments also includes the rights to a portion of the related MSR.
|
(E)
|
Amortized cost basis is net of impairment.
|
|
Current UPB (bn)
|
|
Weighted Average MSR (bps)
|
|
|
Carrying Value (mm)
|
|||||
Mortgage Servicing Rights
|
|
|
|
|
|
|
|||||
Agency
|
$
|
177.2
|
|
|
27
|
|
bps
|
|
$
|
1,702.7
|
|
Non-Agency
|
0.1
|
|
|
50
|
|
|
|
—
|
|
||
Mortgage Servicing Rights Financing Receivable
|
|
|
|
|
|
|
|
|
|
||
Agency
|
51.5
|
|
|
27
|
|
|
|
473.7
|
|
||
Non-Agency
|
15.5
|
|
|
33
|
|
|
|
133.7
|
|
||
Total/Weighted Average
|
$
|
244.3
|
|
|
27
|
|
bps
|
|
$
|
2,310.1
|
|
|
Collateral Characteristics
|
||||||||||||||||||||||||||||||||||||
|
Current Carrying Amount
|
|
Current Principal Balance
|
|
Number of Loans
|
|
WA FICO Score
(A)
|
|
WA Coupon
|
|
WA Maturity (months)
|
|
Average Loan Age (months)
|
|
Adjustable Rate Mortgage %
(B)
|
|
Three Month Average CPR
(C)
|
|
Three Month Average CRR
(D)
|
|
Three Month Average CDR
(E)
|
|
Three Month Average Recapture Rate
|
||||||||||||||
Mortgage Servicing Rights
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Agency
|
$
|
1,702,749
|
|
|
$
|
177,220,692
|
|
|
1,268,758
|
|
|
743
|
|
|
4.3
|
%
|
|
258
|
|
|
67
|
|
|
3.3
|
%
|
|
13.5
|
%
|
|
13.3
|
%
|
|
0.1
|
%
|
|
11.5
|
%
|
Non-Agency
|
—
|
|
|
64,733
|
|
|
919
|
|
|
626
|
|
|
7.2
|
%
|
|
197
|
|
|
174
|
|
|
44.1
|
%
|
|
11.8
|
%
|
|
1.7
|
%
|
|
10.3
|
%
|
|
—
|
%
|
||
Mortgage Servicing Rights Financing Receivable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Agency
|
473,669
|
|
|
51,533,451
|
|
|
376,971
|
|
|
744
|
|
|
4.2
|
%
|
|
248
|
|
|
71
|
|
|
7.7
|
%
|
|
13.0
|
%
|
|
12.5
|
%
|
|
0.4
|
%
|
|
3.5
|
%
|
||
Non-Agency
|
133,727
|
|
|
15,519,498
|
|
|
111,358
|
|
|
657
|
|
|
5.1
|
%
|
|
267
|
|
|
140
|
|
|
21.3
|
%
|
|
4.9
|
%
|
|
3.8
|
%
|
|
1.1
|
%
|
|
—
|
%
|
||
Total/Weighted Average
|
$
|
2,310,145
|
|
|
$
|
244,338,374
|
|
|
1,758,006
|
|
|
738
|
|
|
4.4
|
%
|
|
256
|
|
|
73
|
|
|
5.4
|
%
|
|
12.8
|
%
|
|
12.5
|
%
|
|
0.2
|
%
|
|
9.1
|
%
|
|
Collateral Characteristics
|
||||||||||||||||
|
Delinquency 30 Days
(F)
|
|
Delinquency 60 Days
(F)
|
|
Delinquency 90+ Days
(F)
|
|
Loans in Foreclosure
|
|
Real Estate Owned
|
|
Loans in Bankruptcy
|
||||||
Mortgage Servicing Rights
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Agency
|
1.7
|
%
|
|
0.4
|
%
|
|
0.6
|
%
|
|
0.2
|
%
|
|
—
|
%
|
|
0.2
|
%
|
Non-Agency
|
7.9
|
%
|
|
3.2
|
%
|
|
2.7
|
%
|
|
19.8
|
%
|
|
—
|
%
|
|
3.2
|
%
|
Mortgage Servicing Rights Financing Receivable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agency
|
1.8
|
%
|
|
0.3
|
%
|
|
0.5
|
%
|
|
0.5
|
%
|
|
—
|
%
|
|
0.4
|
%
|
Non-Agency
|
7.4
|
%
|
|
4.1
|
%
|
|
6.5
|
%
|
|
3.5
|
%
|
|
2.1
|
%
|
|
2.9
|
%
|
Total/Weighted Average
|
2.1
|
%
|
|
0.6
|
%
|
|
1.0
|
%
|
|
0.5
|
%
|
|
0.2
|
%
|
|
0.4
|
%
|
(A)
|
The WA FICO score is based on the weighted average of information provided by the loan servicer on a monthly basis. The loan servicer generally updates the FICO score when loans are refinanced or become delinquent.
|
(B)
|
Adjustable Rate Mortgage % represents the percentage of the total principal balance of the pool that corresponds to adjustable rate mortgages.
|
(C)
|
Three Month Average CPR, or the constant prepayment rate, represents the annualized rate of the prepayments during the quarter as a percentage of the total principal balance of the pool.
|
(D)
|
Three Month Average CRR, or the voluntary prepayment rate, represents the annualized rate of the voluntary prepayments during the quarter as a percentage of the total principal balance of the pool.
|
(E)
|
Three Month Average CDR, or the involuntary prepayment rate, represents the annualized rate of the involuntary prepayments (defaults) during the quarter as a percentage of the total principal balance of the pool.
|
(F)
|
Delinquency 30 Days, Delinquency 60 Days and Delinquency 90+ Days represent the percentage of the total principal balance of the pool that corresponds to loans that are delinquent by 30–59 days, 60–89 days or 90 or more days, respectively.
|
|
|
|
MSR Component
(A)
|
|
|
|
Excess MSR
|
||||||||
|
Current UPB
(bn) |
|
Weighted Average MSR (bps)
|
|
Weighted Average Excess MSR (bps)
|
|
Interest in Excess MSR (%)
|
|
Carrying Value (mm)
|
||||||
Agency
|
|
|
|
|
|
|
|
|
|
||||||
Original and Recaptured Pools
|
$
|
68.4
|
|
|
28
|
|
bps
|
21
|
|
bps
|
32.5% - 66.7%
|
|
$
|
288.3
|
|
Recapture Agreements
|
—
|
|
|
29
|
|
|
21
|
|
|
32.5% - 66.7%
|
|
45.5
|
|
||
|
68.4
|
|
|
28
|
|
|
21
|
|
|
|
|
333.8
|
|
||
Non-Agency
(B)
|
|
|
|
|
|
|
|
|
|
||||||
Nationstar and SLS Serviced:
|
|
|
|
|
|
|
|
|
|
||||||
Original and Recaptured Pools
|
$
|
67.5
|
|
|
35
|
|
|
15
|
|
|
33.3% - 100.0%
|
|
$
|
191.3
|
|
Recapture Agreements
|
—
|
|
|
26
|
|
|
20
|
|
|
33.3% - 100.0%
|
|
19.6
|
|
||
Ocwen Serviced Pools
|
92.3
|
|
|
46
|
|
|
14
|
|
|
100.0%
|
|
633.5
|
|
||
|
159.8
|
|
|
43
|
|
|
14
|
|
|
|
|
844.4
|
|
||
Total/Weighted Average
|
$
|
228.2
|
|
|
39
|
|
bps
|
16
|
|
bps
|
|
|
$
|
1,178.2
|
|
(A)
|
The MSR is a weighted average as of
September 30, 2017
, and the Excess MSR represents the difference between the weighted average MSR and the basic fee (which fee remains constant).
|
(B)
|
We also invested in related Servicer Advance Investments, including the basic fee component of the related MSR (Note 6 to our Condensed Consolidated Financial Statements) on
$145.8 billion
UPB underlying these Excess MSRs.
|
|
|
|
MSR Component
(A)
|
|
|
|
|
|
|
|
||||||||||||
|
Current UPB (bn)
|
|
Weighted Average MSR (bps)
|
|
Weighted Average Excess MSR (bps)
|
|
New Residential Interest in Investee (%)
|
|
Investee Interest in Excess MSR (%)
|
|
New Residential Effective Ownership (%)
|
|
Investee Carrying Value (mm)
|
|||||||||
Agency
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Original and Recaptured Pools
|
$
|
53.7
|
|
|
32
|
|
bps
|
20
|
|
bps
|
50.0
|
%
|
|
66.7
|
%
|
|
33.3
|
%
|
|
$
|
279.7
|
|
Recapture Agreements
|
—
|
|
|
32
|
|
|
23
|
|
|
50.0
|
%
|
|
66.7
|
%
|
|
33.3
|
%
|
|
50.3
|
|
||
Total/Weighted Average
|
$
|
53.7
|
|
|
32
|
|
bps
|
20
|
|
bps
|
|
|
|
|
|
|
|
|
|
$
|
330.0
|
|
(A)
|
The MSR is a weighted average as of
September 30, 2017
, and the Excess MSR represents the difference between the weighted average MSR and the basic fee (which fee remains constant).
|
|
Collateral Characteristics
|
||||||||||||||||||||||||||||||||||||
|
Current Carrying Amount
|
|
Current Principal Balance
|
|
Number of Loans
|
|
WA FICO Score
(A)
|
|
WA Coupon
|
|
WA Maturity (months)
|
|
Average Loan Age (months)
|
|
Adjustable Rate Mortgage %
(B)
|
|
Three Month Average CPR
(C)
|
|
Three Month Average CRR
(D)
|
|
Three Month Average CDR
(E)
|
|
Three Month Average Recapture Rate
|
||||||||||||||
Agency
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Original Pools
|
$
|
227,407
|
|
|
$
|
55,909,712
|
|
|
373,818
|
|
|
706
|
|
|
4.5
|
%
|
|
280
|
|
|
99
|
|
|
9.2
|
%
|
|
16.3
|
%
|
|
15.3
|
%
|
|
1.1
|
%
|
|
25.1
|
%
|
Recaptured Loans
|
60,938
|
|
|
12,540,090
|
|
|
73,083
|
|
|
721
|
|
|
4.3
|
%
|
|
292
|
|
|
27
|
|
|
0.7
|
%
|
|
10.5
|
%
|
|
10.2
|
%
|
|
0.4
|
%
|
|
24.2
|
%
|
||
Recapture Agreement
|
45,504
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
||
|
$
|
333,849
|
|
|
$
|
68,449,802
|
|
|
446,901
|
|
|
709
|
|
|
4.5
|
%
|
|
282
|
|
|
85
|
|
|
7.6
|
%
|
|
15.2
|
%
|
|
14.4
|
%
|
|
1.0
|
%
|
|
25.0
|
%
|
Non-Agency
(F)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Nationstar and SLS Serviced:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Original Pools
|
$
|
179,130
|
|
|
$
|
64,374,054
|
|
|
350,584
|
|
|
670
|
|
|
4.5
|
%
|
|
285
|
|
|
140
|
|
|
39.0
|
%
|
|
16.5
|
%
|
|
12.7
|
%
|
|
4.3
|
%
|
|
11.6
|
%
|
Recaptured Loans
|
12,140
|
|
|
3,079,293
|
|
|
13,600
|
|
|
740
|
|
|
4.1
|
%
|
|
290
|
|
|
19
|
|
|
3.7
|
%
|
|
12.3
|
%
|
|
12.3
|
%
|
|
—
|
%
|
|
21.4
|
%
|
||
Recapture Agreement
|
19,561
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
||
Ocwen Serviced Pools
(H)
|
633,628
|
|
|
92,270,579
|
|
|
639,783
|
|
|
637
|
|
|
4.5
|
%
|
|
314
|
|
|
143
|
|
|
16.1
|
%
|
|
10.8
|
%
|
|
7.6
|
%
|
|
3.5
|
%
|
|
—
|
%
|
||
|
$
|
844,459
|
|
|
$
|
159,723,926
|
|
|
1,003,967
|
|
|
647
|
|
|
4.5
|
%
|
|
306
|
|
|
141
|
|
|
25.1
|
%
|
|
12.2
|
%
|
|
8.9
|
%
|
|
3.7
|
%
|
|
3.5
|
%
|
Total/Weighted Average
(I)
|
$
|
1,178,308
|
|
|
$
|
228,173,728
|
|
|
1,450,868
|
|
|
660
|
|
|
4.5
|
%
|
|
301
|
|
|
129
|
|
|
19.8
|
%
|
|
12.8
|
%
|
|
10.0
|
%
|
|
3.1
|
%
|
|
8.7
|
%
|
|
Collateral Characteristics
|
||||||||||||||||
|
Delinquency 30 Days
(G)
|
|
Delinquency 60 Days
(G)
|
|
Delinquency 90+ Days
(G)
|
|
Loans in
Foreclosure |
|
Real
Estate Owned |
|
Loans in
Bankruptcy |
||||||
Agency
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Original Pools
|
4.8
|
%
|
|
1.5
|
%
|
|
1.2
|
%
|
|
1.3
|
%
|
|
0.3
|
%
|
|
0.3
|
%
|
Recaptured Loans
|
2.1
|
%
|
|
0.5
|
%
|
|
0.4
|
%
|
|
0.3
|
%
|
|
0.1
|
%
|
|
0.1
|
%
|
Recapture Agreement
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
4.2
|
%
|
|
1.3
|
%
|
|
1.0
|
%
|
|
1.1
|
%
|
|
0.3
|
%
|
|
0.3
|
%
|
Non-Agency
(F)
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Nationstar and SLS Serviced:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Original Pools
|
10.3
|
%
|
|
3.0
|
%
|
|
2.6
|
%
|
|
7.4
|
%
|
|
1.4
|
%
|
|
2.2
|
%
|
Recaptured Loans
|
1.4
|
%
|
|
0.3
|
%
|
|
0.1
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Recapture Agreement
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Ocwen Serviced Pools
(H)
|
8.5
|
%
|
|
5.0
|
%
|
|
6.0
|
%
|
|
7.7
|
%
|
|
2.1
|
%
|
|
1.8
|
%
|
|
8.9
|
%
|
|
4.4
|
%
|
|
5.0
|
%
|
|
7.5
|
%
|
|
1.9
|
%
|
|
1.9
|
%
|
Total/Weighted Average
(I)
|
7.9
|
%
|
|
3.7
|
%
|
|
4.2
|
%
|
|
6.2
|
%
|
|
1.6
|
%
|
|
1.5
|
%
|
(A)
|
The WA FICO score is based on the weighted average of information provided by the loan servicer on a monthly basis. The loan servicer generally updates the FICO score when loans are refinanced or become delinquent.
|
(B)
|
Adjustable Rate Mortgage % represents the percentage of the total principal balance of the pool that corresponds to adjustable rate mortgages.
|
(C)
|
Three Month Average CPR, or the constant prepayment rate, represents the annualized rate of the prepayments during the quarter as a percentage of the total principal balance of the pool.
|
(D)
|
Three Month Average CRR, or the voluntary prepayment rate, represents the annualized rate of the voluntary prepayments during the quarter as a percentage of the total principal balance of the pool.
|
(E)
|
Three Month Average CDR, or the involuntary prepayment rate, represents the annualized rate of the involuntary prepayments (defaults) during the quarter as a percentage of the total principal balance of the pool.
|
(F)
|
We also invested in related Servicer Advance Investments, including the basic fee component of the related MSR (Note 6 to our Condensed Consolidated Financial Statements) on
$145.8 billion
UPB underlying these Excess MSRs.
|
(G)
|
Delinquency 30 Days, Delinquency 60 Days and Delinquency 90+ Days represent the percentage of the total principal balance of the pool that corresponds to loans that are delinquent by 30–59 days, 60–89 days or 90 or more days, respectively.
|
(H)
|
Collateral characteristics related to approximately
$2.2 billion
of UPB are as of August 31, 2017.
|
(I)
|
Weighted averages exclude collateral information for which collateral data was not available as of the report date.
|
|
Collateral Characteristics
|
|||||||||||||||||||||||||||||||||||||||
|
Current Carrying Amount
|
|
Current
Principal
Balance
|
|
New Residential Effective Ownership
(%)
|
|
Number
of Loans
|
|
WA FICO Score
(A)
|
|
WA Coupon
|
|
WA Maturity (months)
|
|
Average Loan
Age (months)
|
|
Adjustable Rate Mortgage %
(B)
|
|
Three Month Average
CPR
(C)
|
|
Three Month Average
CRR
(D)
|
|
Three Month Average
CDR
(E)
|
|
Three Month Average
Recapture Rate
|
|||||||||||||||
Agency
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Original Pools
|
$
|
171,301
|
|
|
$
|
38,271,187
|
|
|
33.3
|
%
|
|
331,939
|
|
|
689
|
|
|
5.0
|
%
|
|
273
|
|
|
114
|
|
|
9.6
|
%
|
|
18.0
|
%
|
|
15.9
|
%
|
|
2.4
|
%
|
|
26.5
|
%
|
Recaptured Loans
|
108,421
|
|
|
15,404,047
|
|
|
33.3
|
%
|
|
105,141
|
|
|
703
|
|
|
4.3
|
%
|
|
287
|
|
|
33
|
|
|
0.6
|
%
|
|
11.7
|
%
|
|
11.3
|
%
|
|
0.5
|
%
|
|
35.4
|
%
|
||
Recapture Agreement
|
50,264
|
|
|
—
|
|
|
33.3
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
||
Total/Weighted Average
(G)
|
$
|
329,986
|
|
|
$
|
53,675,234
|
|
|
|
|
437,080
|
|
|
693
|
|
|
4.8
|
%
|
|
277
|
|
|
91
|
|
|
7.0
|
%
|
|
16.3
|
%
|
|
14.7
|
%
|
|
1.9
|
%
|
|
28.5
|
%
|
|
Collateral Characteristics
|
||||||||||||||||
|
Delinquency 30 Days
(F)
|
|
Delinquency 60 Days
(F)
|
|
Delinquency 90+ Days
(F)
|
|
Loans in
Foreclosure
|
|
Real
Estate
Owned
|
|
Loans in
Bankruptcy
|
||||||
Agency
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Original Pools
|
6.3
|
%
|
|
1.9
|
%
|
|
1.3
|
%
|
|
1.9
|
%
|
|
0.6
|
%
|
|
0.4
|
%
|
Recaptured Loans
|
3.5
|
%
|
|
1.0
|
%
|
|
0.6
|
%
|
|
0.3
|
%
|
|
0.1
|
%
|
|
0.1
|
%
|
Recapture Agreement
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Total/Weighted Average
(G)
|
5.5
|
%
|
|
1.7
|
%
|
|
1.1
|
%
|
|
1.4
|
%
|
|
0.5
|
%
|
|
0.3
|
%
|
(A)
|
The WA FICO score is based on the weighted average of information provided by the loan servicer on a monthly basis. The loan servicer generally updates the FICO score on a monthly basis.
|
(B)
|
Adjustable Rate Mortgage % represents the percentage of the total principal balance of the pool that corresponds to adjustable rate mortgages.
|
(C)
|
Three Month Average CPR, or the constant prepayment rate, represents the annualized rate of the prepayments during the quarter as a percentage of the total principal balance of the pool.
|
(D)
|
Three Month Average CRR, or the voluntary prepayment rate, represents the annualized rate of the voluntary prepayments during the quarter as a percentage of the total principal balance of the pool.
|
(E)
|
Three Month Average CDR, or the involuntary prepayment rate, represents the annualized rate of the involuntary prepayments (defaults) during the quarter as a percentage of the total principal balance of the pool.
|
(F)
|
Delinquency 30 Days, Delinquency 60 Days and Delinquency 90+ Days represent the percentage of the total principal balance of the pool that corresponds to loans that are delinquent by 30-59 days, 60-89 days or 90 or more days, respectively.
|
(G)
|
Weighted averages exclude collateral information for which collateral data was not available as of the report date.
|
|
September 30, 2017
|
|||||||||||||||||
|
Amortized Cost Basis
|
|
Carrying Value
(A)
|
|
UPB of Underlying Residential Mortgage Loans
|
|
Outstanding Servicer Advances
|
|
Servicer Advances to UPB of Underlying Residential Mortgage Loans
|
|||||||||
Servicer Advance Investments
|
|
|
|
|
|
|
|
|
|
|||||||||
Nationstar and SLS serviced pools
|
$
|
1,058,024
|
|
|
$
|
1,091,358
|
|
|
$
|
53,468,730
|
|
|
$
|
924,597
|
|
|
1.7
|
%
|
Ocwen serviced pools
|
2,897,351
|
|
|
2,953,444
|
|
|
92,295,028
|
|
|
2,727,108
|
|
|
3.0
|
%
|
||||
Total
|
$
|
3,955,375
|
|
|
$
|
4,044,802
|
|
|
$
|
145,763,758
|
|
|
$
|
3,651,705
|
|
|
2.5
|
%
|
(A)
|
Carrying value represents the fair value of the Servicer Advance Investments, including the basic fee component of the related MSRs.
|
|
|
|
|
|
|
Nine Months Ended
September 30, 2017 |
|
|
|
Loan-to-Value (“LTV”)
(A)
|
|
Cost of Funds
(B)
|
|||||||||||||
|
|
Weighted Average Discount Rate
|
|
Weighted Average Life (Years)
(C)
|
|
Change in Fair Value Recorded in Other Income
|
|
Face Amount of Notes and Bonds Payable
|
|
Gross
|
|
Net
(D)
|
|
Gross
|
|
Net
|
|||||||||
Servicer Advance
Investments
(E)
|
|
6.8
|
%
|
|
5.1
|
|
$
|
70,469
|
|
|
$
|
3,504,060
|
|
|
92.5
|
%
|
|
91.4
|
%
|
|
3.3
|
%
|
|
2.9
|
%
|
(A)
|
Based on outstanding servicer advances, excluding purchased but unsettled servicer advances and certain deferred servicing fees (“DSF”) which we received financing on. If we were to include these DSF in the servicer advance balance, gross and net LTV as of
September 30, 2017
would be
86.6%
and
85.6%
, respectively. Also excludes retained Non-Agency bonds with a current face amount of
$79.9 million
from the outstanding servicer advance debt. If we were to sell these bonds, gross and net LTV as of
September 30, 2017
would be
94.6%
and
93.5%
, respectively.
|
(B)
|
Annualized measure of the cost associated with borrowings. Gross Cost of Funds primarily includes interest expense and facility fees. Net Cost of Funds excludes facility fees.
|
(C)
|
Weighted Average Life represents the weighted average expected timing of the receipt of expected net cash flows for this investment.
|
(D)
|
Ratio of face amount of borrowings to par amount of servicer advance collateral, net of any general reserve.
|
(E)
|
The following types of advances are included in the Servicer Advance Investments:
|
|
|
September 30, 2017
|
||
Principal and interest advances
|
|
$
|
939,897
|
|
Escrow advances (taxes and insurance advances)
|
|
1,634,892
|
|
|
Foreclosure advances
|
|
1,076,916
|
|
|
Total
|
|
$
|
3,651,705
|
|
|
|
|
|
|
|
|
|
Gross Unrealized
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Asset Type
|
|
Outstanding Face Amount
|
|
Amortized Cost Basis
|
|
Percentage of Total Amortized Cost Basis
|
|
Gains
|
|
Losses
|
|
Carrying
Value
(A)
|
|
Count
|
|
Weighted Average Life (Years)
|
|
3-Month CPR
|
|
Outstanding Repurchase Agreements
|
||||||||||||||||
Agency ARM RMBS
|
|
$
|
113,553
|
|
|
$
|
124,474
|
|
|
10.4
|
%
|
|
$
|
—
|
|
|
$
|
(5,549
|
)
|
|
$
|
118,925
|
|
|
26
|
|
|
4.5
|
|
|
22.0
|
%
|
|
$
|
126,624
|
|
Agency Specified Pools
|
|
1,010,000
|
|
|
1,070,807
|
|
|
89.6
|
%
|
|
1,352
|
|
|
(428
|
)
|
|
1,071,731
|
|
|
42
|
|
|
7.9
|
|
|
1.8
|
%
|
|
8,472
|
|
||||||
Agency RMBS
|
|
$
|
1,123,553
|
|
|
$
|
1,195,281
|
|
|
100.0
|
%
|
|
$
|
1,352
|
|
|
$
|
(5,977
|
)
|
|
$
|
1,190,656
|
|
|
68
|
|
|
7.6
|
|
|
3.9
|
%
|
|
$
|
126,624
|
|
(A)
|
Fair value, which is equal to carrying value for all securities.
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
|
|||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Periodic Cap
|
|
|
|
|
|||||||||||||||
Months to Next Reset
(A)
|
|
Number of Securities
|
|
Outstanding Face Amount
|
|
Amortized Cost Basis
|
|
Percentage of Total Amortized Cost Basis
|
|
Carrying Value
|
|
Coupon
|
|
Margin
|
|
1st Coupon Adjustment
(B)
|
|
Subsequent Coupon Adjustment
(C)
|
|
Lifetime Cap
(D)
|
|
Months to Reset
(E)
|
|||||||||||||
1 - 12
|
|
26
|
|
|
$
|
113,553
|
|
|
$
|
124,474
|
|
|
100.0
|
%
|
|
$
|
118,925
|
|
|
3.4
|
%
|
|
1.7
|
%
|
|
N/A
|
|
1.9
|
%
|
|
8.9
|
%
|
|
5
|
|
(A)
|
Of these investments,
94.5%
reset based on 12-month LIBOR index,
3.2%
reset based on one-month LIBOR, and
2.3%
reset based on the one-year Treasury Constant Maturity Rate.
|
(B)
|
Represents the maximum change in the coupon at the end of the fixed rate period. All securities in this category are past the first coupon adjustment.
|
(C)
|
Represents the maximum change in the coupon at each reset date subsequent to the first coupon adjustment.
|
(D)
|
Represents the maximum coupon on the underlying security over its life.
|
(E)
|
Represents recurrent weighted average months to the next interest rate reset.
|
Net Interest Spread
(A)
|
||
Weighted Average Asset Yield
|
2.96
|
%
|
Weighted Average Funding Cost
|
1.35
|
%
|
Net Interest Spread
|
1.61
|
%
|
(A)
|
The Agency RMBS portfolio consists of
10.4%
floating rate securities and
89.6%
fixed rate securities (based on amortized cost basis). See table above for details on rate resets of the floating rate securities.
|
|
|
|
|
|
|
Gross Unrealized
|
|
|
|
|
||||||||||||||
Asset Type
|
|
Outstanding Face Amount
|
|
Amortized Cost Basis
|
|
Gains
|
|
Losses
|
|
Carrying
Value
(A)
|
|
Outstanding Repurchase Agreements
|
||||||||||||
Non-Agency RMBS
|
|
$
|
11,906,608
|
|
|
$
|
5,136,883
|
|
|
$
|
412,213
|
|
|
$
|
(24,906
|
)
|
|
$
|
5,524,190
|
|
|
$
|
4,316,544
|
|
(A)
|
Fair value, which is equal to carrying value for all securities.
|
|
|
Non-Agency RMBS Characteristics
(A)
|
|
|
|||||||||||||||||||||||||||
Vintage
(B)
|
|
Average Minimum Rating
(C)
|
|
Number of Securities
|
|
Outstanding Face Amount
|
|
Amortized Cost Basis
|
|
Percentage of Total Amortized Cost Basis
|
|
Carrying Value
|
|
Principal Subordination
(D)
|
|
Excess Spread
(E)
|
|
Weighted Average Life (Years)
|
|
Weighted Average Coupon
(F)
|
|||||||||||
Pre 2006
|
|
CC
|
|
419
|
|
|
$
|
1,945,400
|
|
|
$
|
1,372,963
|
|
|
26.9
|
%
|
|
$
|
1,535,404
|
|
|
13.1
|
%
|
|
1.7
|
%
|
|
8.3
|
|
2.4
|
%
|
2006
|
|
CC
|
|
111
|
|
|
2,450,002
|
|
|
1,524,005
|
|
|
29.8
|
%
|
|
1,642,422
|
|
|
7.3
|
%
|
|
2.1
|
%
|
|
8.6
|
|
1.6
|
%
|
|||
2007
|
|
CCC-
|
|
92
|
|
|
2,896,107
|
|
|
1,641,641
|
|
|
32.1
|
%
|
|
1,744,402
|
|
|
6.9
|
%
|
|
1.3
|
%
|
|
7.8
|
|
1.9
|
%
|
|||
2008 and later
|
|
BBB
|
|
128
|
|
|
4,590,627
|
|
|
569,226
|
|
|
11.2
|
%
|
|
569,712
|
|
|
7.6
|
%
|
|
—
|
%
|
|
3.3
|
|
2.5
|
%
|
|||
Total/Weighted Average
|
|
CCC-
|
|
750
|
|
|
$
|
11,882,136
|
|
|
$
|
5,107,835
|
|
|
100.0
|
%
|
|
$
|
5,491,940
|
|
|
8.9
|
%
|
|
1.5
|
%
|
|
7.7
|
|
2.0
|
%
|
|
|
Collateral Characteristics
(A) (G)
|
|||||||||||||
Vintage
(B)
|
|
Average Loan Age (years)
|
|
Collateral Factor
(H)
|
|
3-Month CPR
(I)
|
|
Delinquency
(J)
|
|
Cumulative Losses to Date
|
|||||
Pre 2006
|
|
12.8
|
|
|
0.09
|
|
|
11.5
|
%
|
|
12.7
|
%
|
|
12.4
|
%
|
2006
|
|
11.5
|
|
|
0.15
|
|
|
10.2
|
%
|
|
14.1
|
%
|
|
29.6
|
%
|
2007
|
|
10.6
|
|
|
0.29
|
|
|
10.5
|
%
|
|
13.4
|
%
|
|
33.6
|
%
|
2008 and later
|
|
11.8
|
|
|
0.80
|
|
|
12.7
|
%
|
|
3.3
|
%
|
|
1.6
|
%
|
Total/Weighted Average
|
|
11.6
|
|
|
0.26
|
|
|
11.0
|
%
|
|
12.2
|
%
|
|
22.9
|
%
|
(A)
|
Excludes
$24.5 million
face amount of bonds backed by consumer loans.
|
(B)
|
The year in which the securities were issued.
|
(C)
|
Ratings provided above were determined by third party rating agencies, represent the most recent credit ratings available as of the reporting date and may not be current. This excludes the ratings of the collateral underlying
218
bonds with a carrying value of
$335.8 million
, which either have never been rated or for which rating information is no longer provided. We had
no
assets that were on negative watch for possible downgrade by at least one rating agency as of
September 30, 2017
.
|
(D)
|
The percentage of amortized cost basis of securities and residual interests that is subordinate to our investments. This excludes interest-only bonds.
|
(E)
|
The current amount of interest received on the underlying loans in excess of the interest paid on the securities, as a percentage of the outstanding collateral balance for the quarter ended
September 30, 2017
.
|
(F)
|
Excludes residual bonds, and certain other Non-Agency bonds, with a carrying value of
$161.1 million
and
$0.0 million
, respectively, for which no coupon payment is expected.
|
(G)
|
The weighted average loan size of the underlying collateral is
$176.8 thousand
.
|
(H)
|
The ratio of original UPB of loans still outstanding.
|
(I)
|
Three month average constant prepayment rate and default rates.
|
(J)
|
The percentage of underlying loans that are 90+ days delinquent, or in foreclosure or considered REO.
|
Net Interest Spread
(A)
|
||
Weighted Average Asset Yield
|
5.77
|
%
|
Weighted Average Funding Cost
|
2.76
|
%
|
Net Interest Spread
|
3.01
|
%
|
(A)
|
The Non-Agency RMBS portfolio consists of
92.0%
floating rate securities and
8.0%
fixed rate securities (based on amortized cost basis).
|
|
|
Outstanding Face Amount
|
|
Carrying
Value |
|
Loan
Count |
|
Weighted Average Yield
|
|
Weighted Average Life (Years)
(A)
|
|
Floating Rate Loans as a % of Face Amount
|
|
LTV Ratio
(B)
|
|
Weighted Avg. Delinquency
(C)
|
|
Weighted Average FICO
(D)
|
||||||||||
Reverse Mortgage Loans
(E) (F)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
N/A
|
|
Performing Loans
(G)
|
|
556,361
|
|
|
507,300
|
|
|
8,079
|
|
|
8.0
|
%
|
|
5.6
|
|
18.7
|
%
|
|
78.8
|
%
|
|
7.6
|
%
|
|
651
|
|
||
Purchased Credit Deteriorated Loans
(H)
|
|
264,183
|
|
|
194,927
|
|
|
2,258
|
|
|
7.1
|
%
|
|
3.0
|
|
14.4
|
%
|
|
81.5
|
%
|
|
79.3
|
%
|
|
597
|
|
||
Total Residential Mortgage Loans, held-for-investment
|
|
$
|
820,544
|
|
|
$
|
702,227
|
|
|
10,337
|
|
|
7.7
|
%
|
|
4.8
|
|
17.3
|
%
|
|
79.6
|
%
|
|
30.7
|
%
|
|
634
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Reverse Mortgage Loans
(E) (F)
|
|
$
|
19,207
|
|
|
$
|
9,342
|
|
|
51
|
|
|
7.2
|
%
|
|
4.3
|
|
13.6
|
%
|
|
135.1
|
%
|
|
81.6
|
%
|
|
N/A
|
|
Performing Loans
(G) (I)
|
|
779,618
|
|
|
791,134
|
|
|
11,139
|
|
|
4.0
|
%
|
|
4.9
|
|
16.4
|
%
|
|
65.8
|
%
|
|
3.4
|
%
|
|
663
|
|
||
Non-Performing Loans
(H) (I)
|
|
820,912
|
|
|
626,275
|
|
|
5,228
|
|
|
5.5
|
%
|
|
4.3
|
|
21.4
|
%
|
|
97.0
|
%
|
|
60.0
|
%
|
|
583
|
|
||
Total Residential Mortgage Loans, held-for-sale
|
|
$
|
1,619,737
|
|
|
$
|
1,426,751
|
|
|
16,418
|
|
|
4.8
|
%
|
|
4.6
|
|
18.9
|
%
|
|
82.4
|
%
|
|
33.0
|
%
|
|
622
|
|
(A)
|
The weighted average life is based on the expected timing of the receipt of cash flows.
|
(B)
|
LTV refers to the ratio comparing the loan’s unpaid principal balance to the value of the collateral property.
|
(C)
|
Represents the percentage of the total principal balance that is 60+ days delinquent.
|
(D)
|
The weighted average FICO score is based on the weighted average of information updated and provided by the loan servicer on a monthly basis.
|
(E)
|
Represents a
70%
participation interest we hold in a portfolio of reverse mortgage loans. The average loan balance outstanding based on total UPB was
$0.5 million
. Approximately
59%
of these loans outstanding have reached a termination event. As a result of the termination event, each such loan has matured and the borrower can no longer make draws on these loans.
|
(F)
|
FICO scores are not used in determining how much a borrower can access via a reverse mortgage loan.
|
(G)
|
Performing loans are generally placed on nonaccrual status when principal or interest is 120 days or more past due.
|
(H)
|
Includes loans with evidence of credit deterioration since origination where it is probable that we will not collect all contractually required principal and interest payments. As of
September 30, 2017
, we have placed all Non-Performing Loans, held-for-sale on nonaccrual status, except as described in (I) below.
|
(I)
|
Includes
$34.9 million
and
$70.6 million
UPB of Ginnie Mae EBO performing and non-performing loans, respectively, on accrual status as contractual cash flows are guaranteed by the FHA.
|
|
Collateral Characteristics
|
|||||||||||||||||||||||||||||||||||||||||
|
UPB
|
|
Personal Unsecured Loans %
|
|
Personal Homeowner Loans %
|
|
Number of Loans
|
|
Weighted Average Original FICO Score
(A)
|
|
Weighted Average Coupon
|
|
Adjustable Rate Loan %
|
|
Average Loan Age (months)
|
|
Average Expected Life (Years)
|
|
Delinquency 30 Days
(B)
|
|
Delinquency 60 Days
(B)
|
|
Delinquency 90+ Days
(B)
|
|
12-Month CRR
(C)
|
|
12-Month CDR
(D)
|
|||||||||||||||
Consumer loans, held-for-investment
|
$
|
1,472,973
|
|
|
69.6
|
%
|
|
30.4
|
%
|
|
182,463
|
|
|
671
|
|
|
17.9
|
%
|
|
10.6
|
%
|
|
139
|
|
|
3.5
|
|
|
2.2
|
%
|
|
1.2
|
%
|
|
2.2
|
%
|
|
17.0
|
%
|
|
6.3
|
%
|
(A)
|
Weighted average original FICO score represents the FICO score at the time the loan was originated.
|
(B)
|
Delinquency 30 Days, Delinquency 60 Days and Delinquency 90+ Days represent the percentage of the total principal balance of the pool that corresponds to loans that are delinquent by 30-59 days, 60-89 days or 90 or more days, respectively.
|
(C)
|
12-Month CRR, or the voluntary prepayment rate, represents the annualized rate of the voluntary prepayments during the three months as a percentage of the total principal balance of the pool.
|
(D)
|
12-Month CDR, or the involuntary prepayment rate, represents the annualized rate of the involuntary prepayments (defaults) during the three months as a percentage of the total principal balance of the pool.
|
|
Unpaid Principal Balance
|
|
Interest in Consumer Loans
|
|
Carrying Value
|
|
Weighted Average Coupon
|
|
Weighted Average Expected Life (Years)
(A)
|
|
Weighted Average Delinquency
(B)
|
|||||||
September 30, 2017
(C)
|
$
|
231,839
|
|
|
25.0
|
%
|
|
$
|
231,839
|
|
|
16.4
|
%
|
|
1.4
|
|
0.3
|
%
|
(A)
|
Represents the weighted average expected timing of the receipt of expected cash flows for this investment.
|
(B)
|
Represents the percentage of the total unpaid principal balance that is 30+ days delinquent. Delinquency status is the primary credit quality indicator as it provides early warning of borrowers who may be experiencing financial difficulties.
|
(C)
|
Data as of August 31, 2017 as a result of the one month reporting lag.
|
|
Three Months Ended
September 30, |
|
Increase (Decrease)
|
|
Nine Months Ended
September 30, |
|
Increase (Decrease)
|
||||||||||||||||
|
2017
|
|
2016
|
|
Amount
|
|
2017
|
|
2016
|
|
Amount
|
||||||||||||
Interest income
|
$
|
397,722
|
|
|
$
|
282,388
|
|
|
$
|
115,334
|
|
|
$
|
1,162,212
|
|
|
$
|
749,901
|
|
|
$
|
412,311
|
|
Interest expense
|
125,278
|
|
|
96,488
|
|
|
28,790
|
|
|
338,664
|
|
|
278,401
|
|
|
60,263
|
|
||||||
Net Interest Income
|
272,444
|
|
|
185,900
|
|
|
86,544
|
|
|
823,548
|
|
|
471,500
|
|
|
352,048
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Impairment
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other-than-temporary impairment (OTTI) on securities
|
1,509
|
|
|
1,765
|
|
|
(256
|
)
|
|
8,736
|
|
|
7,838
|
|
|
898
|
|
||||||
Valuation provision (reversal) on loans and real estate owned
|
26,700
|
|
|
18,275
|
|
|
8,425
|
|
|
65,381
|
|
|
41,845
|
|
|
23,536
|
|
||||||
|
28,209
|
|
|
20,040
|
|
|
8,169
|
|
|
74,117
|
|
|
49,683
|
|
|
24,434
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net interest income after impairment
|
244,235
|
|
|
165,860
|
|
|
78,375
|
|
|
749,431
|
|
|
421,817
|
|
|
327,614
|
|
||||||
Servicing revenue, net
|
58,014
|
|
|
—
|
|
|
58,014
|
|
|
269,467
|
|
|
—
|
|
|
269,467
|
|
||||||
Other Income
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Change in fair value of investments in excess mortgage servicing rights
|
(14,291
|
)
|
|
(17,060
|
)
|
|
2,769
|
|
|
(32,650
|
)
|
|
(24,397
|
)
|
|
(8,253
|
)
|
||||||
Change in fair value of investments in excess mortgage servicing rights, equity method investees
|
2,054
|
|
|
6,261
|
|
|
(4,207
|
)
|
|
6,056
|
|
|
8,608
|
|
|
(2,552
|
)
|
||||||
Change in fair value of investments in mortgage servicing rights financing receivable
|
70,232
|
|
|
—
|
|
|
70,232
|
|
|
75,828
|
|
|
—
|
|
|
75,828
|
|
||||||
Change in fair value of servicer advance investments
|
10,941
|
|
|
21,606
|
|
|
(10,665
|
)
|
|
70,469
|
|
|
4,328
|
|
|
66,141
|
|
||||||
Gain on consumer loans investment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,943
|
|
|
(9,943
|
)
|
||||||
Gain on remeasurement of consumer loans investment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
71,250
|
|
|
(71,250
|
)
|
||||||
Gain (loss) on settlement of investments, net
|
1,553
|
|
|
(11,165
|
)
|
|
12,718
|
|
|
1,250
|
|
|
(37,682
|
)
|
|
38,932
|
|
||||||
Earnings from investments in consumer loans, equity method investees
|
6,769
|
|
|
—
|
|
|
6,769
|
|
|
12,649
|
|
|
—
|
|
|
12,649
|
|
||||||
Other income (loss), net
|
9,887
|
|
|
27,059
|
|
|
(17,172
|
)
|
|
7,696
|
|
|
6,850
|
|
|
846
|
|
||||||
|
87,145
|
|
|
26,701
|
|
|
60,444
|
|
|
141,298
|
|
|
38,900
|
|
|
102,398
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
General and administrative expenses
|
19,919
|
|
|
8,777
|
|
|
11,142
|
|
|
47,788
|
|
|
28,082
|
|
|
19,706
|
|
||||||
Management fee to affiliate
|
14,187
|
|
|
10,536
|
|
|
3,651
|
|
|
41,447
|
|
|
30,552
|
|
|
10,895
|
|
||||||
Incentive compensation to affiliate
|
19,491
|
|
|
7,075
|
|
|
12,416
|
|
|
72,123
|
|
|
13,200
|
|
|
58,923
|
|
||||||
Loan servicing expense
|
13,690
|
|
|
14,187
|
|
|
(497
|
)
|
|
40,068
|
|
|
30,037
|
|
|
10,031
|
|
||||||
Subservicing expense
|
49,773
|
|
|
—
|
|
|
49,773
|
|
|
123,435
|
|
|
—
|
|
|
123,435
|
|
||||||
|
117,060
|
|
|
40,575
|
|
|
76,485
|
|
|
324,861
|
|
|
101,871
|
|
|
222,990
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income (Loss) Before Income Taxes
|
272,334
|
|
|
151,986
|
|
|
120,348
|
|
|
835,335
|
|
|
358,846
|
|
|
476,489
|
|
||||||
Income tax expense (benefit)
|
32,613
|
|
|
20,900
|
|
|
11,713
|
|
|
121,053
|
|
|
18,195
|
|
|
102,858
|
|
||||||
Net Income (Loss)
|
$
|
239,721
|
|
|
$
|
131,086
|
|
|
$
|
108,635
|
|
|
$
|
714,282
|
|
|
$
|
340,651
|
|
|
$
|
373,631
|
|
Noncontrolling Interests in Income (Loss) of Consolidated Subsidiaries
|
$
|
13,600
|
|
|
$
|
32,178
|
|
|
$
|
(18,578
|
)
|
|
$
|
45,051
|
|
|
$
|
61,355
|
|
|
$
|
(16,304
|
)
|
Net Income (Loss) Attributable to Common Stockholders
|
$
|
226,121
|
|
|
$
|
98,908
|
|
|
$
|
127,213
|
|
|
$
|
669,231
|
|
|
$
|
279,296
|
|
|
$
|
389,935
|
|
|
|
Three Months Ended
September 30, |
|
Increase (Decrease)
|
|
Nine Months Ended
September 30, |
|
Increase (Decrease)
|
||||||||||||||||
|
|
2017
|
|
2016
|
|
Amount
|
|
2017
|
|
2016
|
|
Amount
|
||||||||||||
Changes in interest rates and prepayment rates
|
|
$
|
(41,445
|
)
|
|
$
|
—
|
|
|
$
|
(41,445
|
)
|
|
$
|
(61,271
|
)
|
|
$
|
—
|
|
|
$
|
(61,271
|
)
|
Changes in discount rates
|
|
50,257
|
|
|
—
|
|
|
50,257
|
|
|
122,347
|
|
|
—
|
|
|
122,347
|
|
||||||
Changes in other factors
|
|
(20,330
|
)
|
|
—
|
|
|
(20,330
|
)
|
|
16,389
|
|
|
—
|
|
|
16,389
|
|
||||||
Total
|
|
$
|
(11,518
|
)
|
|
$
|
—
|
|
|
$
|
(11,518
|
)
|
|
$
|
77,465
|
|
|
$
|
—
|
|
|
$
|
77,465
|
|
|
|
Three Months Ended
September 30, |
|
Increase (Decrease)
|
|
Nine Months Ended
September 30, |
|
Increase (Decrease)
|
||||||||||||||||
|
|
2017
|
|
2016
|
|
Amount
|
|
2017
|
|
2016
|
|
Amount
|
||||||||||||
Changes in interest rates and prepayment rates
|
|
$
|
(14,267
|
)
|
|
$
|
(14,672
|
)
|
|
$
|
405
|
|
|
$
|
(34,465
|
)
|
|
$
|
(6,544
|
)
|
|
$
|
(27,921
|
)
|
Changes in discount rates
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Changes in other factors
|
|
(24
|
)
|
|
(2,388
|
)
|
|
2,364
|
|
|
1,815
|
|
|
(17,853
|
)
|
|
19,668
|
|
||||||
Total
|
|
$
|
(14,291
|
)
|
|
$
|
(17,060
|
)
|
|
$
|
2,769
|
|
|
$
|
(32,650
|
)
|
|
$
|
(24,397
|
)
|
|
$
|
(8,253
|
)
|
|
|
Three Months Ended
September 30, |
|
Increase (Decrease)
|
|
Nine Months Ended
September 30, |
|
Increase (Decrease)
|
||||||||||||||||
|
|
2017
|
|
2016
|
|
Amount
|
|
2017
|
|
2016
|
|
Amount
|
||||||||||||
Changes in interest rates and prepayment rates
|
|
$
|
(1,823
|
)
|
|
$
|
1,077
|
|
|
$
|
(2,900
|
)
|
|
$
|
(1,683
|
)
|
|
$
|
(1,526
|
)
|
|
$
|
(157
|
)
|
Changes in discount rates
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Changes in other factors
|
|
3,877
|
|
|
5,184
|
|
|
(1,307
|
)
|
|
7,739
|
|
|
10,134
|
|
|
(2,395
|
)
|
||||||
Total
|
|
$
|
2,054
|
|
|
$
|
6,261
|
|
|
$
|
(4,207
|
)
|
|
$
|
6,056
|
|
|
$
|
8,608
|
|
|
$
|
(2,552
|
)
|
|
|
Three Months Ended
September 30, |
|
Increase (Decrease)
|
|
Nine Months Ended
September 30, |
|
Increase (Decrease)
|
||||||||||||||||
|
|
2017
|
|
2016
|
|
Amount
|
|
2017
|
|
2016
|
|
Amount
|
||||||||||||
Changes in interest rates and prepayment rates
|
|
$
|
(9,097
|
)
|
|
$
|
—
|
|
|
$
|
(9,097
|
)
|
|
$
|
(12,625
|
)
|
|
$
|
—
|
|
|
$
|
(12,625
|
)
|
Changes in discount rates
|
|
56,694
|
|
|
—
|
|
|
56,694
|
|
|
65,997
|
|
|
—
|
|
|
65,997
|
|
||||||
Changes in other factors
|
|
41,518
|
|
|
—
|
|
|
41,518
|
|
|
42,466
|
|
|
—
|
|
|
42,466
|
|
||||||
Total
|
|
$
|
89,115
|
|
|
$
|
—
|
|
|
$
|
89,115
|
|
|
$
|
95,838
|
|
|
$
|
—
|
|
|
$
|
95,838
|
|
|
|
Three Months Ended
September 30, |
|
Increase (Decrease)
|
|
Nine Months Ended
September 30, |
|
Increase (Decrease)
|
||||||||||||||||
|
|
2017
|
|
2016
|
|
Amount
|
|
2017
|
|
2016
|
|
Amount
|
||||||||||||
Changes in interest rates and prepayment rates
|
|
$
|
(13,770
|
)
|
|
$
|
8,060
|
|
|
$
|
(21,830
|
)
|
|
$
|
(17,273
|
)
|
|
$
|
(74,744
|
)
|
|
$
|
57,471
|
|
Changes in discount rates
|
|
(3,099
|
)
|
|
—
|
|
|
(3,099
|
)
|
|
(157,903
|
)
|
|
59,708
|
|
|
(217,611
|
)
|
||||||
Changes in other factors
|
|
27,810
|
|
|
13,546
|
|
|
14,264
|
|
|
245,645
|
|
|
19,364
|
|
|
226,281
|
|
||||||
Total
|
|
$
|
10,941
|
|
|
$
|
21,606
|
|
|
$
|
(10,665
|
)
|
|
$
|
70,469
|
|
|
$
|
4,328
|
|
|
$
|
66,141
|
|
•
|
Access to Financing from Counterparties
– Decisions by investors, counterparties and lenders to enter into transactions with us will depend upon a number of factors, such as our historical and projected financial performance, compliance with the terms of our current credit arrangements, industry and market trends, the availability of capital and our investors’, counterparties’ and lenders’ policies and rates applicable thereto, and the relative attractiveness of alternative investment or lending opportunities. Our business strategy is dependent upon our ability to finance certain of our investments at rates that provide a positive net spread.
|
•
|
Impact of Expected Repayment or Forecasted Sale on Cash Flows
– The timing of and proceeds from the repayment or sale of certain investments may be different than expected or may not occur as expected. Proceeds from sales of assets are unpredictable and may vary materially from their estimated fair value and their carrying value. Further, the availability
|
|
|
September 30, 2017
|
|||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Collateral
|
|||||||||||||||||
Debt Obligations/Collateral
|
|
Outstanding Face Amount
|
|
Carrying Value
(A)
|
|
Final Stated Maturity
(B)
|
|
Weighted Average Funding Cost
|
|
Weighted Average Life (Years)
|
|
Outstanding Face
|
|
Amortized Cost Basis
|
|
Carrying Value
|
|
Weighted Average Life (Years)
|
|||||||||||
Repurchase Agreements
(C)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Agency RMBS
(D)
|
|
$
|
1,846,934
|
|
|
$
|
1,846,934
|
|
|
Oct-17 to Nov-17
|
|
1.35
|
%
|
|
0.1
|
|
$
|
1,845,992
|
|
|
$
|
1,905,003
|
|
|
$
|
1,907,360
|
|
|
0.3
|
Non-Agency RMBS
(E)
|
|
4,316,544
|
|
|
4,316,544
|
|
|
Oct-17 to Jan-18
|
|
2.76
|
%
|
|
0.1
|
|
11,050,796
|
|
|
5,024,799
|
|
|
5,404,713
|
|
|
7.7
|
|||||
Residential Mortgage Loans
(F)
|
|
1,584,033
|
|
|
1,581,980
|
|
|
Oct-17 to Feb-19
|
|
3.75
|
%
|
|
0.3
|
|
2,136,065
|
|
|
1,907,212
|
|
|
1,890,819
|
|
|
4.3
|
|||||
Real Estate Owned
(G)(H)
|
|
102,703
|
|
|
102,570
|
|
|
Oct-17 to Feb-19
|
|
3.57
|
%
|
|
0.5
|
|
N/A
|
|
|
N/A
|
|
|
145,939
|
|
|
N/A
|
|||||
Total Repurchase Agreements
|
|
7,850,214
|
|
|
7,848,028
|
|
|
|
|
2.64
|
%
|
|
0.1
|
|
|
|
|
|
|
|
|
||||||||
Notes and Bonds Payable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Secured Corporate Notes
(I)
|
|
583,686
|
|
|
583,415
|
|
|
Jun-19 to Jul-22
|
|
4.98
|
%
|
|
2.9
|
|
263,232,259
|
|
|
1,085,585
|
|
|
1,212,791
|
|
|
5.9
|
|||||
MSRs
(J)
|
|
1,097,085
|
|
|
1,096,380
|
|
|
Feb-18 to Apr-22
|
|
5.28
|
%
|
|
2.3
|
|
223,999,150
|
|
|
1,949,608
|
|
|
2,145,609
|
|
|
6.2
|
|||||
Servicer Advances
(K)
|
|
4,081,010
|
|
|
4,073,283
|
|
|
Nov-17 to Dec-21
|
|
3.29
|
%
|
|
2.2
|
|
4,297,775
|
|
|
4,591,210
|
|
|
4,680,637
|
|
|
4.5
|
|||||
Residential Mortgage Loans
(L)
|
|
143,207
|
|
|
143,207
|
|
|
Oct-17 to Apr-20
|
|
3.61
|
%
|
|
2.5
|
|
234,686
|
|
|
184,639
|
|
|
184,639
|
|
|
7.9
|
|||||
Consumer Loans
(M)
|
|
1,340,943
|
|
|
1,337,708
|
|
|
Dec-21 to Mar-24
|
|
3.35
|
%
|
|
3.2
|
|
1,472,792
|
|
|
1,473,353
|
|
|
1,467,752
|
|
|
3.5
|
|||||
Receivable from government agency
(L)
|
|
2,974
|
|
|
2,974
|
|
|
Oct-17
|
|
3.78
|
%
|
|
1.1
|
|
N/A
|
|
|
N/A
|
|
|
2,792
|
|
|
N/A
|
|||||
Total Notes and Bonds Payable
|
|
7,248,905
|
|
|
7,236,967
|
|
|
|
|
3.75
|
%
|
|
2.5
|
|
|
|
|
|
|
|
|
||||||||
Total/ Weighted Average
|
|
$
|
15,099,119
|
|
|
$
|
15,084,995
|
|
|
|
|
3.17
|
%
|
|
1.3
|
|
|
|
|
|
|
|
|
(A)
|
Net of deferred financing costs.
|
(B)
|
All debt obligations with a stated maturity of
October 2017
were refinanced, extended or repaid.
|
(C)
|
These repurchase agreements had approximately
$18.4 million
of associated accrued interest payable as of
September 30, 2017
.
|
(D)
|
All of the Agency RMBS repurchase agreements have a fixed rate. Collateral amounts include approximately
$1.8 billion
of related trade and other receivables.
|
(E)
|
All of the Non-Agency RMBS repurchase agreements have LIBOR-based floating interest rates. This includes repurchase agreements of
$160.3 million
on retained servicer advance and consumer loan bonds.
|
(F)
|
All of these repurchase agreements have LIBOR-based floating interest rates.
|
(G)
|
All of these repurchase agreements have LIBOR-based floating interest rates.
|
(H)
|
Includes financing collateralized by receivables including claims from FHA on Ginnie Mae EBO loans for which foreclosure has been completed and for which we have made or intend to make a claim on the FHA guarantee.
|
(I)
|
Includes
$213.7 million
of corporate loans which bear interest equal to the sum of (i) a floating rate index equal to one-month LIBOR and (ii) a margin of
3.75%
, and includes
$370.0 million
of corporate loans which bear interest equal to the sum of (i) a floating rate index equal to one-month LIBOR and (ii) a margin of
3.75%
. The outstanding face amount of the collateral represents the UPB of our residential mortgage loans underlying our Excess MSRs that secure these notes.
|
(J)
|
Includes
$290.0 million
of MSR notes which bear interest equal to the sum of (i) a floating rate index equal to one-month LIBOR and (ii) a margin of
4.25%
,
$232.9 million
of MSR notes which bear interest equal to the sum of (i) a floating rate index equal to one-month LIBOR and (ii) a margin of
3.75%
,
$74.0 million
of MSR notes which bear interest equal to the sum of (i) a floating rate index equal to one-month LIBOR and (ii) a margin of
3.50%
, and
$500.2 million
of MSR notes which bear interest equal to the sum of (i) a floating rate index equal to one-month LIBOR and (ii) a margin of
4.00%
. The outstanding face amount of the collateral represents the UPB of our residential mortgage loans underlying our MSRs and mortgage servicing rights financing receivable that secure these notes.
|
(K)
|
$3.8 billion
face amount of the notes have a fixed rate while the remaining notes bear interest equal to the sum of (i) a floating rate index equal to one-month LIBOR or a cost of funds rate, as applicable, and (ii) a margin ranging from
1.9%
to
2.4%
. Collateral includes Servicer Advance Investments, as well as servicer advances receivable related to the mortgage servicing rights and mortgage servicing rights financing receivables owned by NRM.
|
(L)
|
Represents: (i) a
$10.8 million
note payable to Nationstar that bears interest equal to one-month LIBOR plus
2.88%
and (ii)
$135.4 million
of asset-backed notes held by third parties which bear interest equal to
3.60%
.
|
(M)
|
Includes the SpringCastle debt, which is comprised of the following classes of asset-backed notes held by third parties:
$1.0 billion
UPB of Class A notes with a coupon of
3.05%
and a stated maturity date in November 2023;
$210.8 million
UPB of Class B notes with a coupon of
4.10%
and a stated maturity date in March 2024;
$18.3 million
UPB of Class C-1 notes with a coupon of
5.63%
and a stated maturity date in March 2024;
$18.3 million
UPB of Class C-2 notes with a coupon of
5.63%
and a stated maturity date in March 2024. Also includes a
$86.3 million
face amount note collateralized by newly originated consumer loans which bears interest equal to
4.00%
.
|
|
|
|
Nine Months Ended September 30, 2017
|
|||||||||||
|
Outstanding
Balance at
September 30, 2017
|
|
Average Daily Amount Outstanding
(A)
|
|
Maximum Amount Outstanding
|
|
Weighted Average Daily Interest Rate
|
|||||||
Repurchase Agreements
|
|
|
|
|
|
|
|
|||||||
Agency RMBS
|
$
|
1,846,934
|
|
|
$
|
2,133,048
|
|
|
$
|
2,727,309
|
|
|
1.09
|
%
|
Non-Agency RMBS
|
4,316,544
|
|
|
3,625,930
|
|
|
4,352,060
|
|
|
2.62
|
%
|
|||
Residential Mortgage Loans
|
1,583,458
|
|
|
993,362
|
|
|
1,727,637
|
|
|
3.63
|
%
|
|||
Real Estate Owned
|
102,638
|
|
|
83,698
|
|
|
163,264
|
|
|
3.58
|
%
|
|||
Notes and Bonds Payable
|
|
|
|
|
|
|
|
|||||||
Secured Corporate Notes
|
—
|
|
|
218,694
|
|
|
220,000
|
|
|
5.51
|
%
|
|||
MSRs
|
596,898
|
|
|
432,560
|
|
|
596,898
|
|
|
5.15
|
%
|
|||
Servicer Advances
|
249,598
|
|
|
284,252
|
|
|
646,067
|
|
|
3.01
|
%
|
|||
Residential Mortgage Loans
|
7,831
|
|
|
7,836
|
|
|
8,819
|
|
|
3.77
|
%
|
|||
Real Estate Owned
|
2,974
|
|
|
2,672
|
|
|
3,136
|
|
|
3.78
|
%
|
|||
Total/Weighted Average
|
$
|
8,706,875
|
|
|
$
|
7,782,052
|
|
|
|
|
|
2.68
|
%
|
(A)
|
Represents the average for the period the debt was outstanding.
|
|
Average Daily Amount Outstanding
(A)
|
||||||||||||
|
Three Months Ended
December 31, 2016 |
|
Three Months Ended
March 31, 2017 |
|
Three Months Ended
June 30, 2017 |
|
Three Months Ended
September 30, 2017 |
||||||
Repurchase Agreements
|
|
|
|
|
|
|
|
||||||
Agency RMBS
|
$
|
1,530,739
|
|
|
$
|
1,905,559
|
|
|
2,531,373
|
|
|
1,961,597
|
|
Non-Agency RMBS
|
2,653,867
|
|
|
2,891,179
|
|
|
3,713,734
|
|
|
4,319,758
|
|
||
Residential Mortgage Loans
|
578,532
|
|
|
785,283
|
|
|
1,020,082
|
|
|
1,170,488
|
|
||
Real Estate Owned
|
60,494
|
|
|
92,169
|
|
|
83,235
|
|
|
75,870
|
|
||
Consumer Loans
|
30,565
|
|
|
—
|
|
|
—
|
|
|
—
|
|
(A)
|
Represents the average for the period the debt was outstanding.
|
Year
|
|
Nonrecourse
(A)
|
|
Recourse
(B)
|
|
Total
|
||||||
October 1 through December 31, 2017
|
|
$
|
185,907
|
|
|
$
|
7,624,943
|
|
|
$
|
7,810,850
|
|
2018
|
|
829,678
|
|
|
832,334
|
|
|
1,662,012
|
|
|||
2019
|
|
1,551,725
|
|
|
370,639
|
|
|
1,922,364
|
|
|||
2020
|
|
511,622
|
|
|
—
|
|
|
511,622
|
|
|||
2021
|
|
1,223,797
|
|
|
—
|
|
|
1,223,797
|
|
|||
2022 and thereafter
|
|
1,254,602
|
|
|
713,872
|
|
|
1,968,474
|
|
|||
|
|
$
|
5,557,331
|
|
|
$
|
9,541,788
|
|
|
$
|
15,099,119
|
|
(A)
|
Includes repurchase agreements and notes and bonds payable of
$0.0 million
and
$5,557.0 million
, respectively.
|
(B)
|
Includes repurchase agreements and notes and bonds payable of
$7,850.0 million
and
$1,692.0 million
, respectively.
|
Debt Obligations/ Collateral
|
|
Collateral Type
|
|
Borrowing Capacity
|
|
Balance Outstanding
|
|
Available Financing
|
||||||
Repurchase Agreements
|
|
|
|
|
|
|
|
|
||||||
Residential Mortgage Loans
|
|
Residential mortgage loans and REO
|
|
$
|
2,890,000
|
|
|
$
|
1,686,736
|
|
|
$
|
1,203,264
|
|
Notes and Bonds Payable
|
|
|
|
|
|
|
|
|
||||||
Secured Corporate Loans
|
|
Excess MSRs
|
|
750,000
|
|
|
370,000
|
|
|
380,000
|
|
|||
MSRs
|
|
MSRs
|
|
700,000
|
|
|
596,898
|
|
|
103,102
|
|
|||
Servicer Advances
(A)
|
|
Servicer advances
|
|
2,339,192
|
|
|
1,474,512
|
|
|
864,680
|
|
|||
Consumer Loans
|
|
Consumer loans
|
|
150,000
|
|
|
86,343
|
|
|
63,657
|
|
|||
|
|
|
|
$
|
6,829,192
|
|
|
$
|
4,214,489
|
|
|
$
|
2,614,703
|
|
(A)
|
Our unused borrowing capacity is available to us if we have additional eligible collateral to pledge and meet other borrowing conditions as set forth in the applicable agreements, including any applicable advance rate. We pay a
0.1%
fee on the unused borrowing capacity. Excludes borrowing capacity and outstanding debt for retained Non-Agency bonds, collateralized by servicer advances with a current face amount of
$93.5 million
.
|
Held by the Manager
|
16,128,730
|
|
Issued to the Manager and subsequently transferred to certain of the Manager’s employees
|
2,367,458
|
|
Issued to the independent directors
|
6,000
|
|
Total
|
18,502,188
|
|
|
Total Accumulated Other Comprehensive Income
|
||
Accumulated other comprehensive income, December 31, 2016
|
$
|
126,363
|
|
Net unrealized gain (loss) on securities
|
277,805
|
|
|
Reclassification of net realized (gain) loss on securities into earnings
|
(20,856
|
)
|
|
Accumulated other comprehensive income (loss), September 30, 2017
|
$
|
383,312
|
|
•
|
Derivatives –
as described in Note 10 to our Condensed Consolidated Financial Statements, we have altered the composition of our economic hedges during the period.
|
•
|
Debt obligations
– as described in Note 11 to our Condensed Consolidated Financial Statements, we borrowed additional amounts, including borrowings to fund MSRs.
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net income attributable to common stockholders
|
$
|
226,121
|
|
|
$
|
98,908
|
|
|
$
|
669,231
|
|
|
$
|
279,296
|
|
Impairment
|
28,209
|
|
|
20,040
|
|
|
74,117
|
|
|
49,683
|
|
||||
Other Income adjustments:
|
|
|
|
|
|
|
|
||||||||
Other Income
|
|
|
|
|
|
|
|
||||||||
Change in fair value of investments in excess mortgage servicing rights
|
14,291
|
|
|
17,060
|
|
|
32,650
|
|
|
24,397
|
|
||||
Change in fair value of investments in excess mortgage servicing rights, equity method investees
|
(2,054
|
)
|
|
(6,261
|
)
|
|
(6,056
|
)
|
|
(8,608
|
)
|
||||
Change in fair value of investments in mortgage servicing rights financing receivable
|
(89,115
|
)
|
|
—
|
|
|
(95,838
|
)
|
|
—
|
|
||||
Change in fair value of servicer advance investments
|
(10,941
|
)
|
|
(21,606
|
)
|
|
(70,469
|
)
|
|
(4,328
|
)
|
||||
Gain on consumer loans investment
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,943
|
)
|
||||
Gain on remeasurement of consumer loans investment
|
—
|
|
|
—
|
|
|
—
|
|
|
(71,250
|
)
|
||||
(Gain) loss on settlement of investments, net
|
(1,553
|
)
|
|
11,165
|
|
|
(1,250
|
)
|
|
37,682
|
|
||||
Unrealized (gain) loss on derivative instruments
|
(3,560
|
)
|
|
(21,048
|
)
|
|
124
|
|
|
15,112
|
|
||||
Unrealized (gain) loss on other ABS
|
(189
|
)
|
|
(724
|
)
|
|
(340
|
)
|
|
226
|
|
||||
(Gain) loss on transfer of loans to REO
|
(5,179
|
)
|
|
(4,373
|
)
|
|
(16,791
|
)
|
|
(14,660
|
)
|
||||
(Gain) loss on transfer of loans to other assets
|
(66
|
)
|
|
(2,743
|
)
|
|
(359
|
)
|
|
(3,021
|
)
|
||||
Gain on Excess MSR recapture agreements
|
(606
|
)
|
|
(768
|
)
|
|
(1,948
|
)
|
|
(2,188
|
)
|
||||
(Gain) loss on Ocwen common stock
|
(6,987
|
)
|
|
—
|
|
|
(6,987
|
)
|
|
—
|
|
||||
Other (income) loss
|
6,700
|
|
|
2,597
|
|
|
18,605
|
|
|
8,054
|
|
||||
Total Other Income Adjustments
|
(99,259
|
)
|
|
(26,701
|
)
|
|
(148,659
|
)
|
|
(28,527
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Other Income and Impairment attributable to non-controlling interests
|
(6,329
|
)
|
|
(4,783
|
)
|
|
(24,430
|
)
|
|
(9,970
|
)
|
||||
Change in fair value of investments in mortgage servicing rights
|
11,518
|
|
|
—
|
|
|
(77,465
|
)
|
|
—
|
|
||||
Non-capitalized transaction-related expenses
|
6,467
|
|
|
2,608
|
|
|
14,397
|
|
|
8,021
|
|
||||
Incentive compensation to affiliate
|
19,491
|
|
|
7,075
|
|
|
72,123
|
|
|
13,200
|
|
||||
Deferred taxes
|
28,410
|
|
|
17,132
|
|
|
114,016
|
|
|
12,998
|
|
||||
Interest income on residential mortgage loans, held-for-sale
|
4,603
|
|
|
6,177
|
|
|
12,069
|
|
|
12,650
|
|
||||
Limit on RMBS discount accretion related to called deals
|
(13,543
|
)
|
|
—
|
|
|
(20,059
|
)
|
|
(6,243
|
)
|
||||
Adjust consumer loans to level yield
|
(9,874
|
)
|
|
(2,621
|
)
|
|
(23,460
|
)
|
|
12,541
|
|
||||
Core earnings of equity method investees:
|
|
|
|
|
|
|
|
||||||||
Excess mortgage servicing rights
|
3,476
|
|
|
6,092
|
|
|
10,010
|
|
|
12,231
|
|
||||
Core Earnings
|
$
|
199,290
|
|
|
$
|
123,927
|
|
|
$
|
671,890
|
|
|
$
|
355,880
|
|
Fair value at September 30, 2017
|
|
$
|
333,849
|
|
|
|
|
|
|
|
||||||
Discount rate shift in %
|
|
-20%
|
|
-10%
|
|
10%
|
|
20%
|
||||||||
Estimated fair value
|
|
$
|
363,861
|
|
|
$
|
348,201
|
|
|
$
|
320,675
|
|
|
$
|
308,542
|
|
Change in estimated fair value:
|
|
|
|
|
|
|
|
|
||||||||
Amount
|
|
$
|
30,012
|
|
|
$
|
14,352
|
|
|
$
|
(13,174
|
)
|
|
$
|
(25,307
|
)
|
%
|
|
9.0
|
%
|
|
4.3
|
%
|
|
(3.9
|
)%
|
|
(7.6
|
)%
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Prepayment rate shift in %
|
|
-20%
|
|
-10%
|
|
10%
|
|
20%
|
||||||||
Estimated fair value
|
|
$
|
357,063
|
|
|
$
|
345,210
|
|
|
$
|
322,979
|
|
|
$
|
312,578
|
|
Change in estimated fair value:
|
|
|
|
|
|
|
|
|
||||||||
Amount
|
|
$
|
23,214
|
|
|
$
|
11,361
|
|
|
$
|
(10,870
|
)
|
|
$
|
(21,271
|
)
|
%
|
|
7.0
|
%
|
|
3.4
|
%
|
|
(3.3
|
)%
|
|
(6.4
|
)%
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Delinquency rate shift in %
|
|
-20%
|
|
-10%
|
|
10%
|
|
20%
|
||||||||
Estimated fair value
|
|
$
|
337,281
|
|
|
$
|
335,567
|
|
|
$
|
332,136
|
|
|
$
|
330,423
|
|
Change in estimated fair value:
|
|
|
|
|
|
|
|
|
||||||||
Amount
|
|
$
|
3,432
|
|
|
$
|
1,718
|
|
|
$
|
(1,713
|
)
|
|
$
|
(3,426
|
)
|
%
|
|
1.0
|
%
|
|
0.5
|
%
|
|
(0.5
|
)%
|
|
(1.0
|
)%
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Recapture rate shift in %
|
|
-20%
|
|
-10%
|
|
10%
|
|
20%
|
||||||||
Estimated fair value
|
|
$
|
324,225
|
|
|
$
|
329,006
|
|
|
$
|
338,768
|
|
|
$
|
343,758
|
|
Change in estimated fair value:
|
|
|
|
|
|
|
|
|
||||||||
Amount
|
|
$
|
(9,624
|
)
|
|
$
|
(4,843
|
)
|
|
$
|
4,919
|
|
|
$
|
9,909
|
|
%
|
|
(2.9
|
)%
|
|
(1.5
|
)%
|
|
1.5
|
%
|
|
3.0
|
%
|
Fair value at September 30, 2017
|
|
$
|
2,176,418
|
|
|
|
|
|
|
|
||||||
Discount rate shift in %
|
|
-20%
|
|
-10%
|
|
10%
|
|
20%
|
||||||||
Estimated fair value
|
|
$
|
2,359,336
|
|
|
$
|
2,264,143
|
|
|
$
|
2,095,371
|
|
|
$
|
2,020,301
|
|
Change in estimated fair value:
|
|
|
|
|
|
|
|
|
||||||||
Amount
|
|
$
|
182,918
|
|
|
$
|
87,725
|
|
|
$
|
(81,047
|
)
|
|
$
|
(156,117
|
)
|
%
|
|
8.4
|
%
|
|
4.0
|
%
|
|
(3.7
|
)%
|
|
(7.2
|
)%
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Prepayment rate shift in %
|
|
-20%
|
|
-10%
|
|
10%
|
|
20%
|
||||||||
Estimated fair value
|
|
$
|
2,342,182
|
|
|
$
|
2,257,295
|
|
|
$
|
2,099,363
|
|
|
$
|
2,025,931
|
|
Change in estimated fair value:
|
|
|
|
|
|
|
|
|
||||||||
Amount
|
|
$
|
165,764
|
|
|
$
|
80,877
|
|
|
$
|
(77,055
|
)
|
|
$
|
(150,487
|
)
|
%
|
|
7.6
|
%
|
|
3.7
|
%
|
|
(3.5
|
)%
|
|
(6.9
|
)%
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Delinquency rate shift in %
|
|
-20%
|
|
-10%
|
|
10%
|
|
20%
|
||||||||
Estimated fair value
|
|
$
|
2,195,027
|
|
|
$
|
2,185,725
|
|
|
$
|
2,167,117
|
|
|
$
|
2,157,813
|
|
Change in estimated fair value:
|
|
|
|
|
|
|
|
|
||||||||
Amount
|
|
$
|
18,609
|
|
|
$
|
9,307
|
|
|
$
|
(9,301
|
)
|
|
$
|
(18,605
|
)
|
%
|
|
0.9
|
%
|
|
0.4
|
%
|
|
(0.4
|
)%
|
|
(0.9
|
)%
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Recapture rate shift in %
|
|
-20%
|
|
-10%
|
|
10%
|
|
20%
|
||||||||
Estimated fair value
|
|
$
|
2,127,534
|
|
|
$
|
2,151,990
|
|
|
$
|
2,200,874
|
|
|
$
|
2,225,319
|
|
Change in estimated fair value:
|
|
|
|
|
|
|
|
|
||||||||
Amount
|
|
$
|
(48,884
|
)
|
|
$
|
(24,428
|
)
|
|
$
|
24,456
|
|
|
$
|
48,901
|
|
%
|
|
(2.2
|
)%
|
|
(1.1
|
)%
|
|
1.1
|
%
|
|
2.2
|
%
|
Fair value at September 30, 2017
|
|
$
|
133,727
|
|
|
|
|
|
|
|
||||||
Discount rate shift in %
|
|
-20%
|
|
-10%
|
|
10%
|
|
20%
|
||||||||
Estimated fair value
|
|
$
|
148,132
|
|
|
$
|
140,607
|
|
|
$
|
127,415
|
|
|
$
|
121,607
|
|
Change in estimated fair value:
|
|
|
|
|
|
|
|
|
||||||||
Amount
|
|
$
|
14,405
|
|
|
$
|
6,880
|
|
|
$
|
(6,312
|
)
|
|
$
|
(12,120
|
)
|
%
|
|
10.8
|
%
|
|
5.1
|
%
|
|
(4.7
|
)%
|
|
(9.1
|
)%
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Prepayment rate shift in %
|
|
-20%
|
|
-10%
|
|
10%
|
|
20%
|
||||||||
Estimated fair value
|
|
$
|
136,768
|
|
|
$
|
135,216
|
|
|
$
|
132,292
|
|
|
$
|
130,904
|
|
Change in estimated fair value:
|
|
|
|
|
|
|
|
|
||||||||
Amount
|
|
$
|
3,041
|
|
|
$
|
1,489
|
|
|
$
|
(1,435
|
)
|
|
$
|
(2,823
|
)
|
%
|
|
2.3
|
%
|
|
1.1
|
%
|
|
(1.1
|
)%
|
|
(2.1
|
)%
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Delinquency rate shift in %
|
|
-20%
|
|
-10%
|
|
10%
|
|
20%
|
||||||||
Estimated fair value
|
|
$
|
134,099
|
|
|
$
|
133,913
|
|
|
$
|
133,540
|
|
|
$
|
133,352
|
|
Change in estimated fair value:
|
|
|
|
|
|
|
|
|
||||||||
Amount
|
|
$
|
372
|
|
|
$
|
186
|
|
|
$
|
(187
|
)
|
|
$
|
(375
|
)
|
%
|
|
0.3
|
%
|
|
0.1
|
%
|
|
(0.1
|
)%
|
|
(0.3
|
)%
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Recapture rate shift in %
|
|
-20%
|
|
-10%
|
|
10%
|
|
20%
|
||||||||
Estimated fair value
|
|
$
|
133,727
|
|
|
$
|
133,727
|
|
|
$
|
133,727
|
|
|
$
|
133,727
|
|
Change in estimated fair value:
|
|
|
|
|
|
|
|
|
||||||||
Amount
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
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%
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%
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—
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%
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%
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—
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%
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•
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rates of prepayment and repayment of the underlying loans;
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•
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potential fluctuations in prevailing interest rates;
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rates of delinquencies and defaults;
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costs of engaging a subservicer to service MSRs;
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in the case of MSRs and Excess MSRs, recapture rates; and
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•
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in the case of Servicer Advance Investments and Servicer Advances Receivable, the amount and timing of servicer advances and recoveries.
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•
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payments on the servicer advances and the deferred servicing fees depend on the source of repayment, and whether and when the related servicer receives such payment (certain servicer advances are reimbursable only out of late payments and other collections and recoveries on the related residential mortgage loan, while others are also reimbursable out of principal and interest collections with respect to all residential mortgage loans serviced under the related servicing agreement, and as a consequence, the timing of such reimbursement is highly uncertain);
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the length of time necessary to obtain liquidation proceeds may be affected by conditions in the real estate market or the financial markets generally, the availability of financing for the acquisition of the real estate and other factors, including, but not limited to, government intervention;
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the length of time necessary to effect a foreclosure may be affected by variations in the laws of the particular jurisdiction in which the related mortgaged property is located, including whether or not foreclosure requires judicial action;
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the requirements for judicial actions for foreclosure (which can result in substantial delays in reimbursement of servicer advances and payment of deferred servicing fees), which vary from time to time as a result of changes in applicable state law; and
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•
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the ability of the related servicer to sell delinquent residential mortgage loans to third parties prior to liquidation, resulting in the early reimbursement of outstanding unreimbursed servicer advances in respect of such residential mortgage loans.
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its failure to comply with applicable laws and regulation;
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•
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a downgrade in, or failure to maintain, any of its servicer ratings;
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•
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its failure to maintain sufficient liquidity or access to sources of liquidity;
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•
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its failure to perform its loss mitigation obligations;
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its failure to perform adequately in its external audits;
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a failure in or poor performance of its operational systems or infrastructure;
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regulatory or legal scrutiny or regulatory actions regarding any aspect of a servicer’s operations, including, but not limited to, servicing practices and foreclosure processes lengthening foreclosure timelines;
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•
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an Agency’s or a whole-loan owner’s transfer of servicing to another party; or
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•
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any other reason.
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A commitment by Ocwen to service loans in accordance with specified servicing guidelines and to be subject to oversight by an independent national monitor for three years;
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•
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A payment of $127.3 million to a consumer relief fund to be disbursed by an independent administrator to eligible borrowers. In May 2014, Ocwen satisfied this obligation with regards to the consumer relief fund, $60.4 million of which is the responsibility of former owners of certain servicing portfolios acquired by Ocwen, pursuant to indemnification and loss sharing provisions in the applicable agreements; and
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A commitment by Ocwen to continue its principal forgiveness modification programs to delinquent and underwater borrowers, including underwater borrowers at imminent risk of default, in an aggregate amount of at least $2.0 billion over three years from the date of the consent order. Ocwen will only receive credit towards its $2.0 billion commitment for principal reductions that satisfy various criteria set forth in the settlement. In April 2016, Ocwen satisfied these obligations and was credited with over $2.1 billion in consumer relief credits, which exceeded such obligations.
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The termination of the engagement of the NY DFS Operations Monitor appointed pursuant to the 2014 Consent Order; and
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A determination on whether the restrictions on acquisitions of MSRs contained in the 2014 Consent Order should be eased following completion of a scheduled servicing examination.
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Payment of $25.0 million (which Ocwen had previously reserved as of September 30, 2016); and
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An additional $198.0 million in debt forgiveness through loan modifications to existing California borrowers over a three-year period.
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Payment of $2.5 million (of which Ocwen had previously accrued $2.0 million as of September 30, 2015 with respect to the proposed resolution); and
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Consent to the entry of an administrative order requiring that Ocwen cease and desist from any violations of Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act and certain related SEC rules promulgated thereunder.
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In April 2015, Walter announced that its wholly owned mortgage subservicing subsidiary, Ditech, entered into a stipulated order with the Federal Trade Commission (“FTC”) and the CFPB to resolve allegations resulting from an investigation by the FTC and CFPB that started in 2010 and continued into 2015 (“Stipulated Order”). According to Walter’s disclosure, the key elements to the Stipulated Order included injunctive relief, including establishing a data integrity program and a home preservation program, as well as payments of (i) $18 million for alleged misrepresentations relating to payment methods that entail convenience fees; (ii) $30 million for alleged misrepresentations related primarily to the time it would take to review short sale requests and for alleged delays in processing loan modifications in servicing transfers; and (iii) a
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•
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Walter has received various subpoenas for testimony and documents, motions for examinations pursuant to Federal Rule of Bankruptcy Procedure 2004, and other information requests from certain Offices of the United States Trustees, acting through trial counsel in various federal judicial districts, seeking information regarding an array of Walter’s policies, procedures and practices in servicing loans to borrowers who are in bankruptcy and Walter’s compliance with bankruptcy laws and rules. The information has been provided in response to these subpoenas and requests and Walter’s management have met with representatives of certain Offices of the United States Trustees to discuss various issues that have arisen in the course of these inquiries, including compliance with bankruptcy laws and rules. The outcome of the aforementioned proceedings and investigations cannot be predicted, which could result in requests for damages, fines, sanctions, or other remediation. Walter could face further legal proceedings in connection with these matters, and may seek to enter into one or more agreements to resolve these matters. Any such agreement may require Walter to pay fines or other amounts for alleged breaches of law and to change or otherwise remediate Walter’s business practices.
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•
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From time to time, Walter has received and may in the future receive subpoenas and other information requests from federal and state governmental and regulatory agencies that are examining or investigating Walter. Walter and certain of its current or former officers have received subpoenas from the SEC requesting documents, testimony and/or other information in connection with an investigation concerning trading in Walter’s securities. Walter and the aforementioned officers are cooperating with the investigation. Walter cannot provide any assurance as to the outcome of the aforementioned investigations or that such outcomes will not have a material adverse effect on Walter’s reputation, business, prospects, results of operations, liquidity or financial condition.
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Since mid-2014, Walter has received subpoenas for documents and other information requests from the offices of various state attorneys general who have, as a group and individually, been investigating Walter’s mortgage servicing practices. According to Walter’s public filings, Walter has provided information in response to these subpoenas and requests and has had discussions with representatives of the states involved in the investigations to explain Walter’s practices. Walter may seek to reach an agreement to resolve these matters with one or more states. Any such agreement may include, among other things, enhanced servicing standards, monitoring and testing obligations, injunctive relief and payments for remediation, consumer relief, penalties and other amounts. Walter cannot predict whether litigation or other legal proceedings will be commenced by one or more states in relation to these investigations.
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Walter is involved in litigation, including putative class actions, and other legal proceedings concerning, among other things, lender-placed insurance, private mortgage insurance, bankruptcy practices, employment practices, the Consumer Financial Protection Act, the Fair Debt Collection Practices Act, the Telephone Consumer Protection Act, the Fair Credit Reporting Act, the Truth in Lending Act, the Real Estate Settlement Procedures Act, the Electronic Funds Transfer Act, the Equal Credit Opportunity Act, and other federal and state laws and statutes.
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On August 28, 2015, Walter’s wholly owned subsidiary, Reverse Mortgage Solutions, Inc. (“RMS”), received a Civil Investigative Demand (“CID”) from the CFPB to produce certain documents and answer questions relating to RMS’s marketing and provision of reverse mortgage products and services. On December 7, 2016, RMS agreed to the terms of a consent order that settled the matters arising from a CFPB investigation. Under the order, RMS, without admitting or denying the allegations detailed in the order, agreed to pay a $325,000 civil money penalty. RMS also agreed to injunctions against future violations of certain consumer protection statutes and regulations and agreed to establish and maintain a comprehensive compliance plan designed to ensure RMS’s compliance with applicable consumer financial protection law and the full terms of the consent order. If RMS fails to comply with the order, it could be subject to additional sanctions, including actions for contempt, actions seeking additional fines, or new actions alleging violations of consumer protection statutes.
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Walter has also disclosed that RMS has received (i) subpoenas from the Office of Inspector General of the U.S. Department of Housing and Urban Development (“HUD”), requiring RMS to produce documents and other materials relating to, among other things, the origination, underwriting and appraisal of reverse mortgages for the time period since January 1, 2005, and (ii) a letter from the NY DFS requesting information on RMS’s reverse mortgage servicing business in New York. RMS has also received a subpoena dated March 30, 2017 from the Office of the Attorney General of the State of New York requiring RMS to produce documents and information relating to, among other things, the servicing of HECMs insured by the FHA during the period since January 1, 2012. Walter also disclosed that it is cooperating with this inquiry.
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On June 17, 2016, Walter’s board of directors received a letter from a stockholder demanding that the board of directors assert legal claims against certain current and former directors and officers of Walter. The stockholder alleged that these directors and officers breached their fiduciary duties by failing to oversee Walter’s operations and internal controls regarding its loan servicing, loan origination, reverse mortgage and financial reporting practices. On June 27, 2016, the board formed an evaluation committee to consider and make a recommendation concerning the stockholder demand. On November 11, 2016, the evaluation committee recommended that the board refuse the demand, which the board adopted, and the demanding stockholder’s counsel has been informed of the board’s determination, according to Walter’s public disclosure.
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On March 14, 2017, Walter publicly disclosed that it had identified material weaknesses in internal controls over operational processes related to Ditech default servicing activities and that, as a result, it had made several adjustments to reserves during the fourth quarter of 2016. In March and April of 2017, class action lawsuits were filed against Walter on behalf of its stockholders, alleging that Walter and its management had made false and/or misleading statements and omissions relating to its business and financial condition as a result of deficient internal controls. One such complaint,
Courtney Elkin, et al. vs. Walter Investment Management Corp., et al.
, Case No. 2:17-cv-202025-AB, was transferred to the U.S. District Court for the Eastern District of Pennsylvania on May 2, 2017. The court has appointed a lead plaintiff in the action, and an amended complaint was due no later than August 18, 2017. Plaintiffs in the other two lawsuits,
Emil Bonomi, et al. vs. Walter Investment Management Corporation, et al.
, Case No 8:17-cv-00645 and
Joseph Petrovets, et al. vs. Walter Investment Management Corp., et al.
, Case No 8:17-cv-00695, agreed to dismiss their actions without prejudice and coordinate the pursuit of their claims with the claims in the
Elkin
action in the U.S. Court for the Eastern District of Pennsylvania. The
Bonomi
action was dismissed on May 4, 2017, and the
Petrovets
action was dismissed on May 9, 2017.
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•
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On August 9, 2017, Walter amended their Annual Report on Form 10-K for the fiscal year ended December 31, 2016 and Quarterly Reports on Form 10-Q for the fiscal periods ended June 30, 2016, September 30, 2016 and March 31, 2017, due to an error in their calculation of the valuation allowance on their deferred tax asset balances in the previously issued consolidated financial statements and other financial information contained in such reports. In light of their need to restate the aforementioned financial statements, Walter publicly disclosed that it has obtained the necessary waivers to certain provisions of a number of its and its subsidiaries’ credit and financing arrangements.
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On June 22, 2017, a stockholder derivative complaint was filed against the current members of Walter’s Board of Directors in the U.S. District Court for the Eastern District of Pennsylvania. The complaint,
Michael E. Vacek, Jr., et al. vs. George M. Awad, et al.,
Case No 2:17-cv-02820-AB, seeks monetary damages and equitable relief and asserts a claim for breach of fiduciary duty arising out of Walter’s alleged failure to disclose that: (i) it was involved in fraudulent practices that violated the False Claims Act; (ii) Ditech Financial had a material weakness in its internal controls over financial reporting; (iii) it had a material weakness relating to the ineffective review of the tax calculations associated with the valuation allowance on deferred tax asset balances; and (iv) it lacked adequate internal controls over financial reporting.
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On July 13, 2017 and August 11, 2017, Walter received written notifications from the NYSE, indicating that Walter was considered to be non-compliant with the NYSE listing standards. Walter announced that it intends to take steps to remedy the listing deficiencies in a timely manner and that neither notification constitutes a violation of the terms of, or constitutes an event of default under, any of Walter’s material debt obligations.
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•
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By regulatory actions taken against Ocwen;
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•
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By a default by Ocwen under its debt agreements;
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•
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By further downgrades in Ocwen’s servicer rating;
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If Ocwen fails to ensure its servicer advances comply with the terms of its Pooling and Servicing Agreements (“PSAs”);
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If Ocwen were terminated as servicer under certain PSAs;
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If Ocwen becomes subject to a bankruptcy proceeding; or
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•
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If Ocwen fails to meet its obligations or is deemed to be in default under the indenture governing notes issued under any servicer advance facility with respect to which Ocwen is the servicer.
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Was made to or for the benefit of a creditor;
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Was for or on account of an antecedent debt owed by such servicer before that transfer was made;
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Was made while such servicer was insolvent (a company is presumed to have been insolvent on and during the 90 days preceding the date the company’s bankruptcy petition was filed);
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Was made on or within 90 days (or if we are determined to be a statutory insider, on or within one year) before such servicer’s bankruptcy filing;
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Permitted us to receive more than we would have received in a Chapter 7 liquidation case of such servicer under U.S. bankruptcy laws; and
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Was a payment as to which none of the statutory defenses to a preference action apply.
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•
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interest rates and credit spreads;
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the availability of credit, including the price, terms and conditions under which it can be obtained;
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the quality, pricing and availability of suitable investments and credit losses with respect to our investments;
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the ability to obtain accurate market-based valuations;
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the ability of securities dealers to make markets in relevant securities and loans;
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loan values relative to the value of the underlying real estate assets;
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default rates on the loans underlying our investments and the amount of the related losses;
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prepayment rates, delinquency rates and legislative/regulatory changes with respect to our investments in MSRs, Excess MSRs, Servicer Advance Investments, RMBS, and loans, and the timing and amount of servicer advances;
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the availability and cost of quality servicers and subservicers, and advance and recapture rates;
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competition;
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the actual and perceived state of the real estate markets, bond markets, market for dividend-paying stocks and public capital markets generally;
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the impact of potential changes to the tax code;
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unemployment rates; and
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the attractiveness of other types of investments relative to investments in real estate or REITs generally.
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the integration of the portfolio into Nationstar’s information technology platforms and servicing systems;
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the quality of servicing during any interim servicing period after we purchase the portfolio but before Nationstar assumes servicing obligations from the seller or its agents;
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the disruption to our ongoing businesses and distraction of our management teams from ongoing business concerns;
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incomplete or inaccurate files and records;
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the retention of existing customers;
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the creation of uniform standards, controls, procedures, policies and information systems;
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the occurrence of unanticipated expenses; and
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potential unknown liabilities associated with the transactions, including legal liability related to origination and servicing prior to the acquisition.
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We have limited experience acquiring MSRs and operating a servicer. Although ownership of MSRs and the operation of a servicer includes many of the same risks as our other target assets and business activities, including risks related to prepayments, borrower credit, defaults, interest rates, hedging, and regulatory changes, there can be no assurance that we will be able to successfully operate a servicer subsidiary and integrate MSR investments into our business operations.
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As of today, we rely on subservicers to subservice the mortgage loans underlying our MSRs on our behalf. We are generally responsible under the applicable Servicing Guidelines for any subservicer’s non-compliance with any such applicable Servicing Guideline. In addition, there is a risk that our current subservicers will be unwilling or unable to continue subservicing on our behalf on terms favorable to us in the future. In such a situation, we may be unable to locate a replacement subservicer on favorable terms.
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NRM’s existing approvals from government-related entities or federal agencies are subject to compliance with their respective servicing guidelines, minimum capital requirements, reporting requirements and other conditions that they may impose from time to time at their discretion. Failure to satisfy such guidelines or conditions could result in the unilateral termination of NRM’s existing approvals or pending applications by one or more entities or agencies.
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NRM is presently licensed or otherwise eligible to hold MSRs in all states within the United States and the District of Columbia. Such state licenses may be suspended or revoked by a state regulatory authority, and we may as a result lose the ability to own MSRs under the regulatory jurisdiction of such state regulatory authority.
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Changes in minimum servicing compensation for Agency loans could occur at any time and could negatively impact the value of the income derived from any MSRs that we hold or may acquire in the future.
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Investments in MSRs are highly illiquid and subject to numerous restrictions on transfer and, as a result, there is risk that we would be unable to locate a willing buyer or get approval to sell any MSRs in the future should we desire to do so.
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part of the income and gain recognized by certain qualified employee pension trusts with respect to our stock may be treated as unrelated business taxable income if shares of our stock are predominantly held by qualified employee pension trusts, and we are required to rely on a special look-through rule for purposes of meeting one of the REIT ownership tests, and we are not operated in a manner to avoid treatment of such income or gain as unrelated business taxable income;
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part of the income and gain recognized by a tax-exempt investor with respect to our stock would constitute unrelated business taxable income if the investor incurs debt in order to acquire the stock; and
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to the extent that we are (or a part of us, or a disregarded subsidiary of ours, is) a “taxable mortgage pool,” or if we hold residual interests in a real estate mortgage investment conduit (“REMIC”), a portion of the distributions paid to a tax exempt stockholder that is allocable to excess inclusion income may be treated as unrelated business taxable income.
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a shift in our investor base;
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our quarterly or annual earnings and cash flows, or those of other comparable companies;
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actual or anticipated fluctuations in our operating results;
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changes in accounting standards, policies, guidance, interpretations or principles;
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announcements by us or our competitors of significant investments, acquisitions or dispositions;
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the failure of securities analysts to cover our common stock;
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changes in earnings estimates by securities analysts or our ability to meet those estimates;
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market performance of affiliates and other counterparties with whom we conduct business;
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the operating and stock price performance of other comparable companies;
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our failure to qualify as a REIT, maintain our exemption under the 1940 Act or satisfy the NYSE listing requirements;
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overall market fluctuations; and
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general economic conditions.
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a classified board of directors with staggered three-year terms;
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provisions regarding the election of directors, classes of directors, the term of office of directors, the filling of director vacancies and the resignation and removal of directors for cause only upon the affirmative vote of at least 80% of the then issued and outstanding shares of our capital stock entitled to vote thereon;
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provisions regarding corporate opportunity only upon the affirmative vote of at least 80% of the then issued and outstanding shares of our capital stock entitled to vote thereon;
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removal of directors only for cause and only with the affirmative vote of at least 80% of the then issued and outstanding shares of our capital stock entitled to vote in the election of directors;
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our board of directors to determine the powers, preferences and rights of our preferred stock and to issue such preferred stock without stockholder approval;
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advance notice requirements applicable to stockholders for director nominations and actions to be taken at annual meetings;
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a prohibition, in our certificate of incorporation, stating that no holder of shares of our common stock will have cumulative voting rights in the election of directors, which means that the holders of a majority of the issued and outstanding shares of common stock can elect all the directors standing for election; and
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a requirement in our bylaws specifically denying the ability of our stockholders to consent in writing to take any action in lieu of taking such action at a duly called annual or special meeting of our stockholders.
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Exhibit Number
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Exhibit Description
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2.1
†
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Separation and Distribution Agreement, dated as of April 26, 2013, by and between New Residential Investment Corp. and Newcastle Investment Corp. (incorporated by reference to Exhibit 2.1 to Amendment No. 6 of New Residential Investment Corp.’s Registration Statement on Form 10, filed April 29, 2013)
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2.2
†
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Purchase Agreement, dated as of March 5, 2013, by and among the Sellers listed therein, HSBC Finance Corporation and SpringCastle Acquisition LLC (incorporated by reference to Exhibit 99.1 to Drive Shack Inc.’s Current Report on Form 8-K, filed March 11, 2013)
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2.3
†
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Master Servicing Rights Purchase Agreement, dated as of December 17, 2013, by and between Nationstar Mortgage LLC and Advance Purchaser LLC (incorporated by reference to Exhibit 2.1 to New Residential Investment Corp.’s Current Report on Form 8-K, filed December 23, 2013)
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2.4
†
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Sale Supplement (Shuttle 1), dated as of December 17, 2013, by and between Nationstar Mortgage LLC and Advance Purchaser LLC (incorporated by reference to Exhibit 2.2 to New Residential Investment Corp.’s Current Report on Form 8-K, filed December 23, 2013)
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2.5
†
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|
Sale Supplement (Shuttle 2), dated as of December 17, 2013, by and between Nationstar Mortgage LLC and Advance Purchaser LLC (incorporated by reference to Exhibit 2.3 to New Residential Investment Corp.’s Current Report on Form 8-K, filed December 23, 2013)
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2.6
†
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|
Sale Supplement (First Tennessee), dated as of December 17, 2013, by and between Nationstar Mortgage LLC and Advance Purchaser LLC (incorporated by reference to Exhibit 2.4 to New Residential Investment Corp.’s Current Report on Form 8-K, filed December 23, 2013)
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2.7
†
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Purchase Agreement, dated as of March 31, 2016, by and among SpringCastle Holdings, LLC, Springleaf Acquisition Corporation, Springleaf Finance, Inc., NRZ Consumer LLC, NRZ SC America LLC, NRZ SC Credit Limited, NRZ SC Finance I LLC, NRZ SC Finance II LLC, NRZ SC Finance III LLC, NRZ SC Finance IV LLC, NRZ SC Finance V LLC, BTO Willow Holdings II, L.P. and Blackstone Family Tactical Opportunities Investment Partnership - NQ - ESC L.P., and solely with respect to Section 11(a) and Section 11(g), NRZ SC America Trust 2015-1, NRZ SC Credit Trust 2015-1, NRZ SC Finance Trust 2015-1, and BTO Willow Holdings, L.P. (incorporated by reference to Exhibit 2.10 to New Residential Investment Corp.’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2016, filed on May 4, 2016)
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Amended and Restated Certificate of Incorporation of New Residential Investment Corp. (incorporated by reference to Exhibit 3.1 to New Residential Investment Corp.’s Current Report on Form 8-K, filed May 3, 2013)
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Amended and Restated Bylaws of New Residential Investment Corp. (incorporated by reference to Exhibit 3.2 to New Residential Investment Corp.’s Current Report on Form 8-K, filed May 3, 2013)
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Certificate of Amendment to the Amended and Restated Certificate of Incorporation of New Residential Investment Corp. (incorporated by reference to Exhibit 3.1 to New Residential Investment Corp.’s Current Report on Form 8-K, filed October 17, 2014)
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Amended and Restated Indenture, dated as of August 17, 2017, by and among NRZ Advance Receivables Trust 2015-ONI, Deutsche Bank National Trust Company, Ocwen Loan Servicing, LLC, HLSS Holdings, LLC, New Residential Mortgage LLC and Credit Suisse AG, New York Branch (incorporated by reference to Exhibit 4.1 to New Residential Investment Corp.’s Current Report on Form 8-K, filed August 22, 2017)
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Omnibus Amendment to Term Note Indenture Supplements, dated as of August 17, 2017, by and among NRZ Advance Receivables Trust 2015-ON1, Deutsche Bank National Trust Company, Ocwen Loan Servicing, LLC, HLSS Holdings, LLC, New Residential Mortgage LLC, Credit Suisse AG, New York Branch and New Residential Investment Corp. (incorporated by reference to Exhibit 4.2 to New Residential Investment Corp.’s Current Report on Form 8-K, filed August 22, 2017)
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Series 2015-T1 Indenture Supplement, dated as of August 28, 2015, to the Indenture, dated as of August 28, 2015, by and among NRZ Advance Receivables Trust 2015-ON1, Deutsche Bank National Trust Company, Ocwen Loan Servicing, LLC, HLSS Holdings, LLC, Credit Suisse AG, New York Branch and New Residential Investment Corp. (incorporated by reference to Exhibit 4.19 to New Residential Investment Corp.’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2015)
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Series 2015-T2 Indenture Supplement, dated as of August 28, 2015, to the Indenture, dated as of August 28, 2015, by and among NRZ Advance Receivables Trust 2015-ON1, Deutsche Bank National Trust Company, Ocwen Loan Servicing, LLC, HLSS Holdings, LLC, Credit Suisse AG, New York Branch and New Residential Investment Corp. (incorporated by reference to Exhibit 4.20 to New Residential Investment Corp.’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2015)
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Exhibit Number
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Exhibit Description
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Series 2015-VF1 Indenture Supplement, dated as of August 28, 2015, to the Indenture, dated as of August 28, 2015, by and among NRZ Advance Receivables Trust 2015-ON1, Deutsche Bank National Trust Company, Ocwen Loan Servicing, LLC, HLSS Holdings, LLC, Credit Suisse AG, New York Branch and New Residential Investment Corp. (incorporated by reference to Exhibit 4.21 to New Residential Investment Corp.’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2015)
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Amendment No. 1, dated as of November 24, 2015, to the Series 2015-VF1 Indenture Supplement, dated as of August 28, 2015, to the Indenture, dated as of August 28, 2015, by and among NRZ Advance Receivables Trust 2015-ON1, Deutsche Bank National Trust Company, Ocwen Loan Servicing, LLC, HLSS Holdings, LLC, Credit Suisse AG, New York Branch and New Residential Investment Corp. (incorporated by reference to Exhibit 4.22 to New Residential Investment Corp.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015)
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Amendment No. 2, dated as of March 22, 2016, to the Series 2015-VF1 Indenture Supplement, dated as of August 28, 2015, to the Indenture, dated as of August 28, 2015, by and among NRZ Advance Receivables Trust 2015-ON1, Deutsche Bank National Trust Company, Ocwen Loan Servicing, LLC, HLSS Holdings, LLC, Credit Suisse AG, New York Branch and New Residential Investment Corp. (incorporated by reference to Exhibit 4.1 to New Residential Investment Corp.’s Current Report on Form 8-K, filed March 24, 2016)
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Amendment No. 3, dated as of May 9, 2016, to the Series 2015-VF1 Indenture Supplement, dated as of August 28, 2015, to the Indenture, dated as of August 28, 2015, by and among NRZ Advance Receivables Trust 2015-ON1, Deutsche Bank National Trust Company, Ocwen Loan Servicing, LLC, HLSS Holdings, LLC, Credit Suisse AG, New York Branch and New Residential Investment Corp. (incorporated by reference to Exhibit 4.1 to New Residential Investment Corp.’s Current Report on Form 8-K, filed May 13, 2016)
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Amendment No. 4, dated as of May 27, 2016, to the Series 2015-VF1 Indenture Supplement, dated as of August 28, 2015, to the Indenture, dated as of August 28, 2015, by and among NRZ Advance Receivables Trust 2015-ON1, Deutsche Bank National Trust Company, Ocwen Loan Servicing, LLC, HLSS Holdings, LLC, Credit Suisse AG, New York Branch and New Residential Investment Corp. (incorporated by reference to Exhibit 4.1 to New Residential Investment Corp.’s Current Report on Form 8-K, filed June 3, 2016)
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|
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|
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Amendment No. 5, dated as of December 15, 2016, to the Series 2015-VF1 Indenture Supplement, dated as of August 28, 2015, to the Indenture, dated as of August 28, 2015, by and among NRZ Advance Receivables Trust 2015-ON1, Deutsche Bank National Trust Company, Ocwen Loan Servicing, LLC, HLSS Holdings, LLC, Credit Suisse AG, New York Branch and New Residential Investment Corp. (incorporated by reference to Exhibit 4.3 to New Residential Investment Corp.’s Current Report on Form 8-K, filed December 16, 2016)
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|
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|
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Amendment No. 6, dated as of August 17, 2017, to Series 2015-VF1 Indenture Supplement, dated as of August 28, 2015, to the Amended and Restated Indenture, dated as of August 21, 2017, by and among NRZ Advance Receivables Trust 2015-ON1, Deutsche Bank National Trust Company, Ocwen Loan Servicing, LLC, HLSS Holdings, LLC, New Residential Mortgage LLC, Credit Suisse AG, New York Branch and New Residential Investment Corp. (incorporated by reference to Exhibit 4.3 to New Residential Investment Corp.’s Current Report on Form 8-K, filed August 22, 2017)
|
|
|
|
|
|
Series 2015-T3 Indenture Supplement, dated as of November 24, 2015, to the Indenture, dated as of August 28, 2015, by and among NRZ Advance Receivables Trust 2015-ON1, Deutsche Bank National Trust Company, Ocwen Loan Servicing, LLC, HLSS Holdings, LLC, Credit Suisse AG, New York Branch and New Residential Investment Corp. (incorporated by reference to Exhibit 4.23 to New Residential Investment Corp.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015)
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|
Series 2015-T4 Indenture Supplement, dated as of November 24, 2015, to the Indenture, dated as of August 28, 2015, by and among NRZ Advance Receivables Trust 2015-ON1, Deutsche Bank National Trust Company, Ocwen Loan Servicing, LLC, HLSS Holdings, LLC, Credit Suisse AG, New York Branch and New Residential Investment Corp. (incorporated by reference to Exhibit 4.24 to New Residential Investment Corp.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015)
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|
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|
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|
Series 2016-T1 Indenture Supplement, dated as of June 30, 2016, to the Indenture, dated as of August 28, 2015, by and among NRZ Advance Receivables Trust 2015-ON1, Deutsche Bank National Trust Company, Ocwen Loan Servicing, LLC, HLSS Holdings, LLC, Credit Suisse AG, New York Branch and New Residential Investment Corp. (incorporated by reference to Exhibit 4.1 to New Residential Investment Corp.’s Current Report on Form 8-K, filed July 7, 2016)
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|
Series 2016-T2 Indenture Supplement, dated as of October 25, 2016, to the Indenture, dated as of August 28, 2015, by and among NRZ Advance Receivables Trust 2015-ON1, Deutsche Bank National Trust Company, Ocwen Loan Servicing, LLC, HLSS Holdings, LLC, Credit Suisse AG, New York Branch and New Residential Investment Corp. (incorporated by reference to Exhibit 4.1 to New Residential Investment Corp.’s Current Report on Form 8-K, filed October 31, 2016)
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|
|
Exhibit Number
|
|
Exhibit Description
|
|
|
|
|
Series 2016-T3 Indenture Supplement, dated as of October 25, 2016, to the Indenture, dated as of August 28, 2015, by and among NRZ Advance Receivables Trust 2015-ON1, Deutsche Bank National Trust Company, Ocwen Loan Servicing, LLC, HLSS Holdings, LLC, Credit Suisse AG, New York Branch and New Residential Investment Corp. (incorporated by reference to Exhibit 4.2 to New Residential Investment Corp.’s Current Report on Form 8-K, filed October 31, 2016)
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|
|
|
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|
Series 2016-T4 Indenture Supplement, dated as of December 15, 2016, by and among NRZ Advance Receivables Trust 2015-ON1, Deutsche Bank National Trust Company, Ocwen Loan Servicing, LLC, HLSS Holdings, LLC, Credit Suisse AG, New York Branch and New Residential Investment Corp. (incorporated by reference to Exhibit 4.1 to New Residential Investment Corp.’s Current Report on Form 8-K, filed December 16, 2016)
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|
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|
|
Series 2016-T5 Indenture Supplement, dated as of December 15, 2016, by and among NRZ Advance Receivables Trust 2015-ON1, Deutsche Bank National Trust Company, Ocwen Loan Servicing, LLC, HLSS Holdings, LLC, Credit Suisse AG, New York Branch and New Residential Investment Corp. (incorporated by reference to Exhibit 4.2 to New Residential Investment Corp.’s Current Report on Form 8-K, filed December 16, 2016)
|
|
|
|
|
|
Series 2017-T1 Indenture Supplement, dated as of February 7, 2017, by and among NRZ Advance Receivables Trust 2015-ON1, Deutsche Bank National Trust Company, Ocwen Loan Servicing, LLC, HLSS Holdings, LLC, Credit Suisse AG, New York Branch and New Residential Investment Corp. (incorporated by reference to Exhibit 4.1 to New Residential Investment Corp.’s Current Report on Form 8-K filed February 7, 2017)
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|
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|
Third Amended and Restated Management and Advisory Agreement, dated as of May 7, 2015, by and between New Residential Investment Corp. and FIG LLC (incorporated by reference to Exhibit 10.4 to New Residential Investment Corp.’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2015)
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|
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Form of Indemnification Agreement by and between New Residential Investment Corp. and its directors and officers (incorporated by reference to Exhibit 10.2 to Amendment No. 3 to New Residential Investment Corp.’s Registration Statement on Form 10, filed March 27, 2013)
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|
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|
New Residential Investment Corp. Nonqualified Stock Option and Incentive Award Plan, adopted as of April 29, 2013 (incorporated by reference to Exhibit 10.1 to New Residential Investment Corp.’s Current Report on Form 8-K, filed May 3, 2013)
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|
|
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|
Amended and Restated New Residential Investment Corp. Nonqualified Stock Option and Incentive Plan, adopted as of November 4, 2014 (incorporated by reference to Exhibit 10.6 to New Residential Investment Corp.’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2014)
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|
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|
Investment Guidelines (incorporated by reference to Exhibit 10.4 to Amendment No. 4 to New Residential Investment Corp.’s Registration Statement on Form 10, filed April 9, 2013)
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|
Excess Servicing Spread Sale and Assignment Agreement, dated as of December 8, 2011, by and between Nationstar Mortgage LLC and NIC MSR I LLC (incorporated by reference to Exhibit 10.5 to Drive Shack Inc.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011)
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|
|
|
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|
Excess Spread Refinanced Loan Replacement Agreement, dated as of December 8, 2011, by and between Nationstar Mortgage LLC and NIC MSR I LLC (incorporated by reference to Exhibit 10.6 to Drive Shack Inc.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011)
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|
|
|
|
|
Future Spread Agreement for FHLMC Mortgage Loans, dated as of May 13, 2012, by and between Nationstar Mortgage LLC and NIC MSR IV LLC (incorporated by reference to Exhibit 10.4 to Drive Shack Inc.’s Current Report on Form 8-K, filed May 15, 2012)
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|
|
|
|
|
Future Spread Agreement for FNMA Mortgage Loans, dated as of May 13, 2012, by and between Nationstar Mortgage LLC and NIC MSR V LLC (incorporated by reference to Exhibit 10.2 to Drive Shack Inc.’s Current Report on Form 8-K, filed May 15, 2012)
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|
|
|
|
|
Future Spread Agreement for Non-Agency Mortgage Loans, dated as of May 13, 2012, by and between Nationstar Mortgage LLC and NIC MSR VI LLC (incorporated by reference to Exhibit 10.6 to Drive Shack Inc.’s Current Report on Form 8-K, filed May 15, 2012)
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|
|
|
|
|
Future Spread Agreement for GNMA Mortgage Loans, dated as of May 13, 2012, by and between Nationstar Mortgage LLC and NIC MSR VII, LLC (incorporated by reference to Exhibit 10.8 to Drive Shack Inc.’s Current Report on Form 8-K, filed May 15, 2012)
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|
|
|
|
|
Current Excess Servicing Spread Acquisition Agreement for FHLMC Mortgage Loans, dated as of May 31, 2012, by and between Nationstar Mortgage LLC and NIC MSR III LLC (incorporated by reference to Exhibit 10.1 to Drive Shack Inc.’s Current Report on Form 8-K, filed June 6, 2012)
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|
|
|
Exhibit Number
|
|
Exhibit Description
|
|
|
|
|
Future Spread Agreement for FHLMC Mortgage Loans, dated as of May 31, 2012, by and between Nationstar Mortgage LLC and NIC MSR III LLC (incorporated by reference to Exhibit 10.2 to Drive Shack Inc.’s Current Report on Form 8-K, filed June 6, 2012)
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|
|
|
|
|
Amended and Restated Current Excess Servicing Spread Acquisition Agreement for FNMA Mortgage Loans, dated as of June 7, 2012, by and between Nationstar Mortgage LLC and NIC MSR II LLC (incorporated by reference to Exhibit 10.1 to Drive Shack Inc.’s Current Report on Form 8-K, filed June 7, 2012)
|
|
|
|
|
|
Amended and Restated Future Spread Agreement for FNMA Mortgage Loans, dated as of June 7, 2012, by and between Nationstar Mortgage LLC and NIC MSR II LLC (incorporated by reference to Exhibit 10.2 to Drive Shack Inc.’s Current Report on Form 8-K, filed June 7, 2012)
|
|
|
|
|
|
Amended and Restated Current Excess Servicing Spread Acquisition Agreement for FHLMC Mortgage Loans, dated as of June 7, 2012, by and between Nationstar Mortgage LLC and NIC MSR II LLC (incorporated by reference to Exhibit 10.3 to Drive Shack Inc.’s Current Report on Form 8-K, filed June 7, 2012)
|
|
|
|
|
|
Amended and Restated Future Spread Agreement for FHLMC Mortgage Loans, dated as of June 7, 2012, by and between Nationstar Mortgage LLC and NIC MSR II LLC (incorporated by reference to Exhibit 10.4 to Drive Shack Inc.’s Current Report on Form 8-K, filed June 7, 2012)
|
|
|
|
|
|
Amended and Restated Current Excess Servicing Spread Acquisition Agreement for Non-Agency Mortgage Loans, dated as of June 7, 2012, by and between Nationstar Mortgage LLC and NIC MSR II LLC (incorporated by reference to Exhibit 10.5 to Drive Shack Inc.’s Current Report on Form 8-K, filed June 7, 2012)
|
|
|
|
|
|
Amended and Restated Future Spread Agreement for Non-Agency Mortgage Loans, dated as of June 7, 2012, by and between Nationstar Mortgage LLC and NIC MSR II LLC (incorporated by reference to Exhibit 10.6 to Drive Shack Inc.’s Current Report on Form 8-K, filed June 7, 2012)
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|
|
|
|
|
Amended and Restated Current Excess Servicing Spread Acquisition Agreement for FNMA Mortgage Loans, dated as of June 28, 2012, by and between Nationstar Mortgage LLC and NIC MSR V LLC (incorporated by reference to Exhibit 10.1 to Drive Shack Inc.’s Current Report on Form 8-K, filed July 5, 2012)
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|
|
|
|
|
Amended and Restated Current Excess Servicing Spread Acquisition Agreement for FHLMC Mortgage Loans, dated as of June 28, 2012, by and between Nationstar Mortgage LLC and NIC MSR IV LLC (incorporated by reference to Exhibit 10.2 to Drive Shack Inc.’s Current Report on Form 8-K, filed July 5, 2012)
|
|
|
|
|
|
Amended and Restated Current Excess Servicing Spread Acquisition Agreement for Non-Agency Mortgage Loans, dated as of June 28, 2012, by and between Nationstar Mortgage LLC and NIC MSR VI LLC (incorporated by reference to Exhibit 10.3 to Drive Shack Inc.’s Current Report on Form 8-K, filed July 5, 2012)
|
|
|
|
|
|
Amended and Restated Current Excess Servicing Spread Acquisition Agreement for GNMA Mortgage Loans, dated as of June 28, 2012, by and between Nationstar Mortgage LLC and NIC MSR VII LLC (incorporated by reference to Exhibit 10.4 to Drive Shack Inc.’s Current Report on Form 8-K, filed July 5, 2012)
|
|
|
|
|
|
Current Excess Servicing Spread Acquisition Agreement for GNMA Mortgage Loans, dated as of December 31, 2012, by and between Nationstar Mortgage LLC and MSR VIII LLC (incorporated by reference to Exhibit 10.35 to Drive Shack Inc.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012)
|
|
|
|
|
|
Future Spread Agreement for GNMA Mortgage Loans, dated as of December 31, 2012, by and between Nationstar Mortgage LLC and MSR VIII LLC (incorporated by reference to Exhibit 10.36 to Drive Shack Inc.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012)
|
|
|
|
|
|
Current Excess Servicing Spread Acquisition Agreement for FHLMC Mortgage Loans, dated as of January 6, 2013, by and between Nationstar Mortgage LLC and MSR IX LLC (incorporated by reference to Exhibit 10.37 to Drive Shack Inc.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012)
|
|
|
|
|
|
Future Spread Agreement for FHLMC Mortgage Loans, dated as of January 6, 2013, by and between Nationstar Mortgage LLC and MSR IX LLC (incorporated by reference to Exhibit 10.38 to Drive Shack Inc.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012)
|
|
|
|
|
|
Current Excess Servicing Spread Acquisition Agreement for FNMA Mortgage Loans, dated as of January 6, 2013, by and between Nationstar Mortgage LLC and MSR X LLC (incorporated by reference to Exhibit 10.39 to Drive Shack Inc.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012)
|
|
|
|
|
|
Future Spread Agreement for FNMA Mortgage Loans, dated as of January 6, 2013, by and between Nationstar Mortgage LLC and MSR X LLC (incorporated by reference to Exhibit 10.40 to Drive Shack Inc.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012)
|
|
|
|
|
Exhibit Number
|
|
Exhibit Description
|
|
|
|
|
Current Excess Servicing Spread Acquisition Agreement for GNMA Mortgage Loans, dated as of January 6, 2013, by and between Nationstar Mortgage LLC and MSR XI LLC (incorporated by reference to Exhibit 10.41 to Drive Shack Inc.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012)
|
|
|
|
|
|
Future Spread Agreement for GNMA Mortgage Loans, dated as of January 6, 2013, by and between Nationstar Mortgage LLC and MSR XI LLC (incorporated by reference to Exhibit 10.42 to Drive Shack Inc.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012)
|
|
|
|
|
|
Current Excess Servicing Spread Acquisition Agreement for Non-Agency Mortgage Loans, dated as of January 6, 2013, by and between Nationstar Mortgage LLC and MSR XII LLC (incorporated by reference to Exhibit 10.43 to Drive Shack Inc.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012)
|
|
|
|
|
|
Future Spread Agreement for Non-Agency Mortgage Loans, dated as of January 6, 2013, by and between Nationstar Mortgage LLC and MSR XII LLC (incorporated by reference to Exhibit 10.44 to Drive Shack Inc.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012)
|
|
|
|
|
|
Current Excess Servicing Spread Acquisition Agreement for Non-Agency Mortgage Loans, dated as of January 6, 2013, by and between Nationstar Mortgage LLC and MSR XIII LLC (incorporated by reference to Exhibit 10.45 to Drive Shack Inc.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012)
|
|
|
|
|
|
Future Spread Agreement for Non-Agency Mortgage Loans, dated as of January 6, 2013, by and between Nationstar Mortgage LLC and MSR XIII LLC (incorporated by reference to Exhibit 10.46 to Drive Shack Inc.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012)
|
|
|
|
|
|
Interim Servicing Agreement, dated as of April 1, 2013, by and among the Interim Servicers listed therein, HSBC Finance Corporation, as Interim Servicer Representative, HSBC Bank USA, National Association, SpringCastle America, LLC, SpringCastle Credit, LLC, SpringCastle Finance, LLC, Wilmington Trust, National Association, as Loan Trustee, and SpringCastle Finance LLC, as Owner Representative (incorporated by reference to Exhibit 10.35 to Amendment No. 4 to New Residential Investment Corp.’s Registration Statement on Form 10, filed April 9, 2013)
|
|
|
|
|
|
Second Amended and Restated Limited Liability Company Agreement of SpringCastle Acquisition LLC, dated as of March 31, 2016 (incorporated by reference to Exhibit 10.37 to New Residential Investment Corp.’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2016)
|
|
|
|
|
|
Services Agreement, dated as of April 6, 2015, by and between HLSS Advances Acquisition Corp. and Home Loan Servicing Solutions, Ltd. (incorporated by reference to Exhibit 2.4 to New Residential Investment Corp.’s Current Report on Form 8-K, filed April 10, 2015)
|
|
|
|
|
|
Receivables Sale Agreement, dated as of August 28, 2015, by and among Ocwen Loan Servicing, LLC, HLSS Holdings, LLC and NRZ Advance Facility Transferor 2015-ON1 LLC (incorporated by reference to Exhibit 10.47 to New Residential Investment Corp.’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2015)
|
|
|
|
|
|
Receivables Pooling Agreement, dated as of August 28, 2015, by and between NRZ Advance Facility Transferor 2015-ON1 LLC and NRZ Advance Receivables Trust 2015-ON1 (incorporated by reference to Exhibit 10.48 to New Residential Investment Corp.’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2015)
|
|
|
|
|
|
Master Agreement, dated as July 23, 2017, by and among Ocwen Loan Servicing, LLC, HLSS Holdings, LLC, HLSS MSR - EBO Acquisition LLC and New Residential Mortgage LLC
|
|
|
|
|
|
Amendment No. 1 to Master Agreement, dated as of October 12, 2017, by and among Ocwen Loan Servicing, LLC, HLSS Holdings, LLC, HLSS MSR - EBO Acquisition LLC and New Residential Mortgage LLC
|
|
|
|
|
|
Transfer Agreement, dated as of July 23, 2017, by and among Ocwen Loan Servicing, LLC, New Residential Mortgage LLC, Ocwen Financial Corporation and New Residential Investment Corp.
|
|
|
|
|
|
Subservicing Agreement, dated as of July 23, 2017, by and between New Residential Mortgage LLC and Ocwen Loan Servicing, LLC
|
|
|
|
|
|
Cooperative Brokerage Agreement, dated as of August 28, 2017, by and among REALHome Services and Solutions, Inc., REALHome Services and Solutions - CT, Inc. and New Residential Sales Corp.
|
|
|
|
|
Exhibit Number
|
|
Exhibit Description
|
|
|
|
|
Letter Agreement, dated as of August 28, 2017, by and among New Residential Investment Corp., New Residential Mortgage LLC, REALHome Services and Solutions, Inc., REALHome Services and Solutions - CT, Inc. and Altisource Solutions S.a.r.l.
|
|
|
|
|
|
Certification of Chief Executive Officer as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
Certification of Chief Financial Officer as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
†
|
Schedules and exhibits may have been omitted pursuant to Item 601(b)(2) of Regulation S-K.
|
|
#
|
Portions of this exhibit have been omitted pursuant to a request for confidential treatment.
|
•
|
Second Amended and Restated Limited Liability Company Agreement of SpringCastle America, LLC, dated as of March 31, 2016.
|
•
|
Second Amended and Restated Limited Liability Company Agreement of SpringCastle Credit, LLC, dated as of March 31, 2016.
|
•
|
Second Amended and Restated Limited Liability Company Agreement of SpringCastle Finance, LLC, dated as of March 31, 2016.
|
|
NEW RESIDENTIAL INVESTMENT CORP.
|
|
|
|
|
|
By:
|
/s/ Michael Nierenberg
|
|
|
Michael Nierenberg
|
|
|
Chief Executive Officer and President
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
November 1, 2017
|
|
|
|
|
By:
|
/s/ Nicola Santoro, Jr.
|
|
|
Nicola Santoro, Jr.
|
|
|
Chief Financial Officer and Treasurer
|
|
|
(Principal Financial Officer)
|
|
|
|
|
|
November 1, 2017
|
|
|
|
|
By:
|
/s/ Jonathan R. Brown
|
|
|
Jonathan R. Brown
|
|
|
Chief Accounting Officer
|
|
|
(Principal Accounting Officer)
|
|
|
|
|
|
November 1, 2017
|
Section 1.
|
Definitions; Interpretation.
|
|
Section 2.
|
Consent to Transfer Agreement.
|
|
Section 3.
|
Lump-Sum Payments.
|
|
Section 4.
|
Sale Supplements.
|
|
Section 5.
|
Servicer Ratings Increased Costs.
|
|
Section 6.
|
Escrow Accounts and Custodial Accounts.
|
|
Section 7.
|
Investment Income Earned on Amounts on Deposit in any Custodial Account or Escrow Accounts.
|
|
Section 8.
|
Third Party Consents for Transfers to NRM Pursuant to the Transfer Agreement.
|
|
Section 9.
|
Consent Non-Delivery Determination Dates.
|
|
Section 10.
|
Standstill; Conditional Waivers of Specified Termination Events.
|
|
Section 11.
|
Sale of Rights to MSRs and Transferred Receivables Assets in Respect of the Designated Servicing Agreements.
|
|
Section 12.
|
Conditions Precedent to Effectiveness of this Agreement.
|
|
Section 13.
|
Representations and Warranties of Seller to the Purchasers and NRM.
|
|
Section 14.
|
Representations and Warranties of the Purchasers and NRM to Seller
|
|
Section 15.
|
Termination.
|
|
Section 16.
|
Miscellaneous.
|
Schedule 1:
|
Previously Executed Amendments
|
Schedule 2:
|
Lump-Sum Payment Percentages
|
Schedule 3:
|
Wire Transfer Instructions
|
Exhibit 1:
|
Group Selection Procedures
|
Exhibit 2:
|
Form of Sale Supplement
|
Exhibit 3A:
|
Form of RMSR Transfer Agreement
|
Exhibit 3B:
|
Form of Sale Agreement
|
Exhibit 4:
|
Specified Termination Events
|
Exhibit 5:
|
Third Party Purchase Agreement Documentation Principles
|
Exhibit 6:
|
[RESERVED]
|
Exhibit 7:
|
Major Shelf Groups
|
Exhibit 8:
|
New RMSR Agreement Documentation Principles
|
Exhibit 9:
|
[***]
|
Exhibit 10:
|
Designated Servicing Agreements
|
Annex I:
|
Schedules I through and including VI to the Sale Supplement, dated as of February 10, 2012
|
Annex II:
|
Schedules I through and including VI to the Sale Supplement, dated as of May 1, 2012
|
Annex III:
|
Schedules I through and including VI to the Sale Supplement, dated as of August 1, 2012
|
Annex IV:
|
Schedules I through and including VI to the Sale Supplement, dated as of September 13, 2012
|
Annex V:
|
Schedules I through and including VI to the Sale Supplement, dated as of September 28, 2012
|
Annex VI:
|
Schedules I through and including VI to the Sale Supplement, dated as of December 26, 2012
|
Annex VII:
|
Schedules I through and including VI to the Sale Supplement, dated as of March 13, 2013
|
Annex VIII:
|
Schedules I through and including VI to the Sale Supplement, dated as of May 21, 2013
|
Annex IX:
|
Schedules I through and including VI to the Sale Supplement, dated as of July 1, 2013
|
Annex X:
|
Schedules I through and including VI to the Sale Supplement, dated as of October 25, 2013
|
(i)
|
the aggregate Specified Condition UPB in respect of all MSRPA Servicing Agreements as of March 31, 2017;
|
(ii)
|
the aggregate Specified Condition UPB as of March 31, 2017 in respect of all MSRPA Servicing Agreements for which the parties mutually agreed not to pursue obtaining any applicable Third Party Consents;
|
(iii)
|
the aggregate Specified Condition UPB as of March 31, 2017 in respect of all MSRPA Servicing Agreements for which Seller is terminated other than because of an exercise of a Clean Up Call Right;
|
(iv)
|
the aggregate Specified Condition UPB as of March 31, 2017 in respect of all MSRPA Servicing Agreements that are not Major Shelf Servicing Agreements for which the Transfer Date did not occur and such MSRPA Servicing Agreements were terminated prior to such date of determination because of the exercise of a Clean Up Call Right.
|
(i)
|
January 23, 2019;
|
(ii)
|
the Seller’s failure to observe or perform in any material respect its obligations under
Section 8
hereof and both (a) such failure continues
|
(iii)
|
the later of (a) the one-year anniversary of this Agreement and (b) the date on which
Sections 9.1
,
9.2
,
9.3
, and
9.4
have been applied as set forth herein for all MSRPA Servicing Agreements for which the Consent Non-Delivery Determination Date has occurred on or prior to the one-year anniversary of this Agreement (such that the time at which Seller may exercise the Purchase Option for such Group in accordance with clause (ii) of the first sentence of
Section 9.4
hereof has expired for any such MSRPA Servicing Agreement);
|
(iv)
|
the termination of this Agreement in accordance with
Section 15.1
hereof (including any termination of this Agreement occurring because of any termination of the NRM Subservicing Agreement because of the occurrence of a Change of Control); and
|
(v)
|
the date upon which Seller terminates the NRM Subservicing Agreement in accordance with Section 5.1(a) thereof; provided that such termination shall be the result of a determination that the Subservicer’s duties under the NRM Subservicing Agreement are no longer permissible under applicable law.
|
(i)
|
close of business on the tenth (10th) Business Day after the Consent Non-Delivery Determination Date for such or Group; or
|
(ii)
|
such earlier date as may be specified in writing by Holdings to Seller.
|
(i)
|
the close of business on the later of (a) the tenth (10th) Business Day after the Option #1 Exercise Deadline for such Group, and (b) the tenth (10th) Business Day after the related Valuation Package has been delivered to Seller; or
|
(ii)
|
such earlier date as may be specified in writing by Seller to Holdings.
|
(i)
|
the aggregate Specified Condition UPB as of March 31, 2017 in respect of all MSRPA Servicing Agreements that are Deferred Servicing Agreements under the Sale Supplements as of such date;
|
(ii)
|
to the extent included in clause (i) above, the aggregate Specified Condition UPB as of March 31, 2017 in respect of all MSRPA Servicing Agreements (a) to be transferred pursuant to
Section 8
and for which Third Party Consents have been obtained, and (b) to be transferred pursuant to
Section 9.2
,
9.3
, or
9.4
hereof, but, in the case of either (a) or (b) Purchasers were unable to obtain any necessary financing consents for the transfer;
|
(iii)
|
to the extent included in clause (i) above, the aggregate Specified Condition UPB as of March 31, 2017 in respect of all MSRPA Servicing Agreements to be transferred pursuant to Section 8 and for which all Third Party Consents have been obtained and Seller is prepared to transfer but the related Servicing Rights have not been transferred by Seller because NRM has chosen not to transfer because NRM has terminated the NRM Subservicing Agreement for cause;
|
(iv)
|
to the extent included in clause (i) above, the aggregate Specified Condition UPB as of March 31, 2017 in respect of all MSRPA Servicing Agreements for which the parties mutually agreed not to pursue obtaining any applicable Third Party Consents;
|
(v)
|
for each Major Shelf Servicing Agreement not included in clause (i) due to being terminated prior to such date of determination because of the exercise of a Clean Up Call Right, the product of (x) the Major Shelf Specified Condition UPB as of March 31, 2017 in respect of such Major Shelf Servicing Agreement, and (y) the ratio of (a) the aggregate Major Shelf Specified Condition UPB as of March 31, 2017 in respect of all Major Shelf Servicing Agreements in the related Major Shelf Group that are Deferred Servicing Agreements under the Sale Supplements as of such date to (b) the positive difference between (1) the aggregate Major Shelf Specified Condition UPB as of March 31, 2017 in respect of all Major Shelf Servicing Agreements in the related Major Shelf Group as of March 31, 2017, and (2) the aggregate Major Shelf Specified Condition UPB as of March 31, 2017 in respect of all Major Shelf Servicing Agreements in the related Major Shelf Group that were terminated prior to such date of determination because of the exercise of a Clean Up Call Right.
|
(i)
|
January 23, 2019;
|
(ii)
|
the Seller’s failure to observe or perform in any material respect its obligations under
Section 8
hereof and both (a) such failure continues unremedied for a period of thirty (30) days after the date on which written notice of such failure shall have been given to Seller by either Purchaser or NRM and (b) the Purchasers and NRM are in compliance in all material respects with their respective obligations under
Section 8
hereof and all prior material non-compliance shall have been cured;
|
(iii)
|
the later of (a) the one-year anniversary of this Agreement and (b) the date on which
Sections 9.1
,
9.2
,
9.3
, and
9.4
have been applied as set forth herein for all MSRPA Servicing Agreements for which the Consent Non-Delivery Determination Date has occurred on or prior to the one-year anniversary of this Agreement (such that the time at which Seller may exercise the Purchase Option for such Group in accordance with clause (ii) of the first sentence of
Section 9.4
hereof has expired for any such MSRPA Servicing Agreement);
|
(iv)
|
the occurrence of a Change of Control with respect to Seller or Ocwen Financial Corporation, unless NRM consents to such Change of Control in accordance with the procedures set forth in the NRM Subservicing Agreement;
|
(v)
|
the termination of this Agreement in accordance with
Section 15.1
hereof; and
|
(vi)
|
the date upon which Seller terminates the NRM Subservicing Agreement in accordance with Section 5.1(a) thereof; provided that such termination shall be the result of a determination that the Subservicer’s duties under the NRM Subservicing Agreement are no longer permissible under applicable law.
|
(i)
|
the Average Third Party Mark for such Group (including reasonable supporting assumptions and valuation inputs);
|
(ii)
|
the Internal Mark for such Group; and
|
(iii)
|
the Reservation Price for such Group.
|
Sale Supplement Date
|
“[
Servicing Fee Reset Date]
”
where such reference appears in the definition of “Servicing Fee Reset Date
”
|
“[Date]” wherever such term appears
|
“[x]” in “Cut-Off Date”
|
“[x]” in “Excess Servicing Fees”
|
“[x]” in “Retained Servicing Fee Shortfall”
|
February 10, 2012
|
March 5, 2020; provided, that if, as of March 5, 2018, there then exists an uncured Termination Event with respect to any affected Servicing Agreement in this Sale Supplement that is due to a servicer rating downgrade to “Below Average” or lower by S&P or to “SQ4” or lower by Moody’s, then the Servicing Fee Reset Date is March 5, 2018.
|
February 10, 2012*
*Other than the term “[Date]”in the definition of Closing Date, which shall be “March 5, 2012”.
|
February 29, 2012
|
21.0
|
February 2012
|
Sale Supplement Date
|
“[
Servicing Fee Reset Date]
”
where such reference appears in the definition of “Servicing Fee Reset Date
”
|
“[Date]” wherever such term appears
|
“[x]” in “Cut-Off Date”
|
“[x]” in “Excess Servicing Fees”
|
“[x]” in “Retained Servicing Fee Shortfall”
|
May 1, 2012
|
April 30, 2020; provided, that if, as of May 1, 2018, there then exists an uncured Termination Event with respect to any affected Servicing Agreement in this Sale Supplement that is due to a servicer rating downgrade to “Below Average” or lower by S&P or to “SQ4” or lower by Moody’s, then the Servicing Fee Reset Date is May 1, 2018.
|
May 1, 2012
|
April 30, 2012
|
19.5
|
May 2012
|
August 1, 2012
|
April 30, 2020; provided, that if, as of August 1, 2018, there then exists an uncured Termination Event with respect to any affected Servicing Agreement in this Sale Supplement that is due to a servicer rating downgrade to “Below Average” or lower by S&P or to “SQ4” or lower by Moody’s, then the Servicing Fee Reset Date is August 1, 2018.
|
August 1, 2012
|
July 31, 2012
|
17.0
|
August 2012
|
Sale Supplement Date
|
“[
Servicing Fee Reset Date]
”
where such reference appears in the definition of “Servicing Fee Reset Date
”
|
“[Date]” wherever such term appears
|
“[x]” in “Cut-Off Date”
|
“[x]” in “Excess Servicing Fees”
|
“[x]” in “Retained Servicing Fee Shortfall”
|
September 13, 2012
|
April 30, 2020; provided, that if, September 13, 2018, there then exists an uncured Termination Event with respect to any affected Servicing Agreement in this Sale Supplement that is due to a servicer rating downgrade to “Below Average” or lower by S&P or to “SQ4” or lower by Moody’s, then the Servicing Fee Reset Date is September 13, 2018.
|
September 13, 2012
|
September 12, 2012
|
18.5
|
September 2012
|
September 28, 2012
|
April 30, 2020; provided, that if, as of September 28, 2018, there then exists an uncured Termination Event with respect to any affected Servicing Agreement in this Sale Supplement that is due to a servicer rating downgrade to “Below Average” or lower by S&P or to “SQ4” or lower by Moody’s, then the Servicing Fee Reset Date is September 28, 2018.
|
September 28, 2012
|
September 27, 2012
|
13.5
|
October 2012
|
Sale Supplement Date
|
“[
Servicing Fee Reset Date]
”
where such reference appears in the definition of “Servicing Fee Reset Date
”
|
“[Date]” wherever such term appears
|
“[x]” in “Cut-Off Date”
|
“[x]” in “Excess Servicing Fees”
|
“[x]” in “Retained Servicing Fee Shortfall”
|
December 26, 2012
|
April 30, 2020; provided, that if, as of December 26, 2018, there then exists an uncured Termination Event with respect to any affected Servicing Agreement in this Sale Supplement that is due to a servicer rating downgrade to “Below Average” or lower by S&P or to “SQ4” or lower by Moody’s, then the Servicing Fee Reset Date is December 26, 2018.
|
December 26, 2012
|
December 24, 2012
|
16.0
|
January 2013
|
March 13, 2013
|
April 30, 2020; provided, that if, as of March 13, 2019, there then exists an uncured Termination Event with respect to any affected Servicing Agreement in this Sale Supplement that is due to a servicer rating downgrade to “Below Average” or lower by S&P or to “SQ4” or lower by Moody’s, then the Servicing Fee Reset Date is March 13, 2019.
|
March 13, 2013
|
March 12, 2013
|
15.0
|
March 2013
|
Sale Supplement Date
|
“[
Servicing Fee Reset Date]
”
where such reference appears in the definition of “Servicing Fee Reset Date
”
|
“[Date]” wherever such term appears
|
“[x]” in “Cut-Off Date”
|
“[x]” in “Excess Servicing Fees”
|
“[x]” in “Retained Servicing Fee Shortfall”
|
May 21, 2013
|
April 30, 2020; provided, that if, as of May 21, 2019, there then exists an uncured Termination Event with respect to any affected Servicing Agreement in this Sale Supplement that is due to a servicer rating downgrade to “Below Average” or lower by S&P or to “SQ4” or lower by Moody’s, then the Servicing Fee Reset Date is May 21, 2019.
|
May 21, 2013
|
May 20, 2013
|
11.0
|
May 2013
|
July 1, 2013
|
April 30, 2020; provided, that if, as July 1, 2019, there then exists an uncured Termination Event with respect to any affected Servicing Agreement in this Sale Supplement that is due to a servicer rating downgrade to “Below Average” or lower by S&P or to “SQ4” or lower by Moody’s, then the Servicing Fee Reset Date is July 1, 2019.
|
July 1, 2013
|
June 30, 2013
|
10.5
|
July 2013
|
Sale Supplement Date
|
“[
Servicing Fee Reset Date]
”
where such reference appears in the definition of “Servicing Fee Reset Date
”
|
“[Date]” wherever such term appears
|
“[x]” in “Cut-Off Date”
|
“[x]” in “Excess Servicing Fees”
|
“[x]” in “Retained Servicing Fee Shortfall”
|
October 25, 2013
|
April 30, 2020; provided, that if, as October 25, 2019, there then exists an uncured Termination Event with respect to any affected Servicing Agreement in this Sale Supplement that is due to a servicer rating downgrade to “Below Average” or lower by S&P or to “SQ4” or lower by Moody’s, then the Servicing Fee Reset Date is October 25, 2019.
|
October 25, 2013
|
October 24, 2013
|
11.0
|
November 2013
|
|
OCWEN LOAN SERVICING, LLC
|
|
|
|
|
|
|
|
|
By:
|
/s/ John P Kim
|
|
Name:
|
John P Kim
|
|
Title:
|
Senior Vice President
|
|
HLSS HOLDINGS, LLC
|
|
|
|
|
|
By:
|
HLSS Roswell, LLC, its sole
|
|
|
member
|
|
|
|
|
|
|
|
By:
|
/s/ Matthew Gabriel Hoffman-Johnson
|
|
Name:
|
Matthew Gabriel Hoffman-Johnson
|
|
Title:
|
Attorney-In-Fact, Agent and Authorized
|
|
|
Signatory
|
|
HLSS MSR – EBO ACQUISITION LLC
|
|
|
|
|
|
By:
|
New Residential Investment Corp., its sole
|
|
|
member
|
|
|
|
|
|
|
|
By:
|
/s/ Matthew Gabriel Hoffman-Johnson
|
|
Name:
|
Matthew Gabriel Hoffman-Johnson
|
|
Title:
|
Attorney-In-Fact, Agent and Authorized
|
|
|
Signatory
|
|
NEW RESIDENTIAL MORTGAGE LLC
|
|
|
|
|
|
By:
|
New Residential Investment Corp., its sole
|
|
|
member
|
|
|
|
|
|
|
|
By:
|
/s/ Matthew Gabriel Hoffman-Johnson
|
|
Name:
|
Matthew Gabriel Hoffman-Johnson
|
|
Title:
|
Attorney-In-Fact, Agent and Authorized
|
|
|
Signatory
|
1.
|
Amendment to Master Servicing Rights Purchase Agreement and Sale Supplements, dated as of December 26, 2012, among Ocwen Loan Servicing, LLC, as Seller, HLSS Holdings, LLC, as a Purchaser, and Home Loan Servicing Solutions, Ltd., as a Purchaser.
|
2.
|
Amendment to Sale Supplements, dated as of July 1, 2013 among Ocwen Loan Servicing, LLC, as Seller, HLSS Holdings, LLC, as a Purchaser, and Home Loan Servicing Solutions, Ltd., as a Purchaser.
|
3.
|
Amendment to Sale Supplement, dated as of September 30, 2013 among Ocwen Loan Servicing, LLC, as Seller, HLSS Holdings, LLC, as a Purchaser, and Home Loan Servicing Solutions, Ltd., as a Purchaser.
|
4.
|
Amendment to Sale Supplements, dated as of February 4, 2014 among Ocwen Loan Servicing, LLC, as Seller, HLSS Holdings, LLC, as a Purchaser, and Home Loan Servicing Solutions, Ltd., as a Purchaser.
|
5.
|
Amendment No. 2 to Master Servicing Rights Purchase Agreement and Sale Supplements, dated as of April 6, 2015, among Ocwen Loan Servicing, LLC, as Seller, HLSS Holdings, LLC, as a Purchaser, and Home Loan Servicing Solutions, Ltd., as a Purchaser, and HLSS MSR – EBO Acquisition LLC, as Buyer.
|
6.
|
February 2017 Amendment dated as of February 17, 2017 among Ocwen Loan Servicing, LLC, as Seller, HLSS Holdings, LLC, as a Purchaser, and HLSS MSR – EBO Acquisition LLC, as a Purchaser.
|
Transfer Date Month
|
Lump-Sum Payment Percentages, in basis points
|
Apr-2017
|
37.2
|
May-2017
|
36.6
|
Jun-2017
|
36.1
|
Jul-2017
|
35.5
|
Aug-2017
|
34.9
|
Sep-2017
|
34.4
|
Oct-2017
|
33.9
|
Nov-2017
|
33.3
|
Dec-2017
|
32.8
|
Jan-2018
|
32.2
|
Feb-2018
|
31.5
|
Mar-2018
|
30.8
|
Apr-2018
|
30.1
|
May-2018
|
29.4
|
Jun-2018
|
28.6
|
Jul-2018
|
27.8
|
Aug-2018
|
27.0
|
Sep-2018
|
26.2
|
Oct-2018
|
25.3
|
Nov-2018
|
24.4
|
Dec-2018
|
23.5
|
Jan-2019
|
22.7
|
Feb-2019
|
21.9
|
Mar-2019
|
21.1
|
Apr-2019
|
20.3
|
May-2019
|
19.5
|
Jun-2019
|
18.7
|
Jul-2019
|
17.8
|
Aug-2019
|
16.8
|
Sep-2019
|
15.8
|
Oct-2019
|
14.6
|
Nov-2019
|
13.3
|
Dec-2019
|
12.0
|
Jan-2020
|
10.6
|
Feb-2020
|
8.9
|
Mar-2020
|
7.1
|
Apr-2020
|
5.2
|
•
|
On each Designation Date, Holdings shall designate a “Group” which shall consist of all of the MSRPA Servicing Agreements for which the Consent Non-Delivery Determination Date occurred on or after the most recent Designation Date (or, in the case of the initial Designation Date, on or after the Effective Date) and prior to such Designation Date.
|
•
|
On the one-year anniversary of the Effective Date, Holdings shall designate additional Groups in accordance with the following procedures:
|
o
|
The number of Groups designated on such date will be equal to the quotient (rounded up to the next whole number) of (i) the Grouping UPB (as defined below) divided by (ii) $15.0 billion. For example, if the Grouping UPB is $33.0 billion, there will be three (3) Groups.
|
§
|
If the number of Groups is two (2) or greater, the Fee Restructuring Payments allocable to such Groups shall be determined as set forth below.
|
o
|
Holdings will then determine the MSRPA Servicing Agreements allocated to each Group based on the related Delinquency Rates (as defined below) for such MSRPA Servicing Agreements such that:
|
§
|
the amount of the Grouping UPB allocated to any particular Group is substantially the same (it being understood that each such allocated amount of the Grouping UPB may vary by Groups by up to 10%); and
|
§
|
the MSRPA Servicing Agreements allocated to any particular Group are allocated based on the related Delinquency Rates of such MSRPA Servicing Agreement. By way of example, if there are three Groups, (i) the MSRPA Servicing Agreements (by Grouping UPB) with the lowest Delinquency Rates will be allocated to one Group, (ii) the MSRPA Servicing Agreements (by Grouping UPB) with the middle Delinquency Rates will be allocated to one Group and (iii) the MSRPA Servicing Agreements (by Grouping UPB) with the highest Delinquency Rates will be allocate to one Group.
|
1.
|
Step 1: Holdings shall engage two Approved Third Party Appraisers to determine the Average Third Party Marks for each such Group.
|
2.
|
Step 2: Holding shall determine the Allocation Percentage for each such Group. The “Allocation Percentage” for each such Group shall mean the quotient of (i) the Average Third Party Mark for such Group divided by (ii) the aggregate of all Average Third Party Marks for all such Groups. The sum of the Allocation Percentages for all such Groups shall equal 100%.
|
3.
|
Step 3: Holdings shall then:
|
a.
|
determine the aggregate Lump-Sum Payments that Holdings would pay Seller if the Transfer Dates for all MSRPA Servicing Agreements in such Groups occurred on the one-year anniversary of the Effective Date. Such amount is the “Gross Amount”; and
|
b.
|
determine the Fee Restructuring Payment for each such Group, which shall equal the product of (i) the Gross Amount and (ii) the Allocation Percentage for such Group.
|
1
|
As amended by Section 4 of the Master Agreement, dated as of July 23, 2017, among Ocwen Loan Servicing, LLC, HLSS Holdings, LLC, HLSS MSR-EBO Acquisition LLC and New Residential Mortgage LLC (the “Master Agreement”).
|
|
|
Page
|
|
Article 1
|
DEFINITIONS; REFERENCE TO MASTER SERVICING RIGHTS PURCHASE AGREEMENT
|
1
|
|
Section 1.1
|
Definitions
|
1
|
|
Section 1.2
|
Reference to the Master Servicing Rights Purchase Agreement
|
8
|
|
Article 2
|
PURCHASE AND SALE OF SERVICING RIGHTS AND RIGHTS TO MSRS; ASSUMED LIABILITIES
|
8
|
|
Section 2.1
|
Assignment and Conveyance of Rights to MSRs
|
8
|
|
Section 2.2
|
Automatic Assignment and Conveyance of Servicing Rights.
|
8
|
|
Section 2.3
|
MSR Purchase Price.
|
9
|
|
Section 2.4
|
Assumed Liabilities and Excluded Liabilities.
|
9
|
|
Section 2.5
|
Remittance of Excess Servicing Fees, Servicing Advance Receivables Fees and Related Amounts.
|
11
|
|
Section 2.6
|
Payment of Estimated Purchase Price.
|
11
|
|
Section 2.7
|
Refinancing of Mortgage Loans..
|
11
|
|
Article 3
|
PURCHASE AND SALE OF SERVICING ADVANCE RECEIVABLES
|
12
|
|
Section 3.1
|
Assignment and Conveyance of Servicing Advance Receivables
|
12
|
|
Section 3.2
|
Servicing Advance Receivables Purchase Price
|
12
|
|
Section 3.3
|
Servicing Advances
|
13
|
|
Section 3.4
|
Reimbursement of Servicing Advances
|
13
|
|
Article 4
|
REPRESENTATIONS AND WARRANTIES OF SELLER
|
13
|
|
Section 4.1
|
General Representations
|
13
|
|
Section 4.2
|
Title to Transferred Assets
|
13
|
|
Section 4.3
|
Right to Receive Servicing Fees
|
14
|
|
Section 4.4
|
Servicing Agreements and Underlying Documents.
|
14
|
|
Section 4.5
|
Mortgage Pool Information, Related Matters
|
14
|
|
Section 4.6
|
Enforceability of Servicing Agreements
|
14
|
|
Section 4.7
|
Compliance With Servicing Agreements
|
15
|
|
Section 4.8
|
No Recourse
|
16
|
|
Section 4.9
|
The Mortgage Loans
|
16
|
|
Section 4.10
|
Servicing Advance Receivables
|
17
|
|
Section 4.11
|
Servicing Agreement Consents and Other Third Party Approvals
|
18
|
|
Section 4.12
|
Servicing Advance Financing Agreements
|
18
|
|
Section 4.13
|
Anti‑Money Laundering Laws
|
19
|
|
Section 4.14
|
Servicer Ratings
|
19
|
|
Section 4.15
|
Eligible Servicer
|
19
|
|
Section 4.16
|
HAMP
|
19
|
|
Article 5
|
CONDITIONS PRECEDENT
|
19
|
|
Section 5.1
|
Conditions to the Purchase of Certain Servicing Advance Receivables
|
19
|
|
Section 5.2
|
Conditions to the Purchase of the Rights to MSRs
|
19
|
|
Article 6
|
SERVICING MATTER
|
20
|
|
Section 6.1
|
Seller as Servicer
|
20
|
|
Section 6.2
|
Servicing
|
20
|
|
Section 6.3
|
Collections from Obligors and Remittances
|
20
|
|
Section 6.4
|
Servicing Practices
|
21
|
|
Section 6.5
|
Servicing Reports
|
21
|
|
Section 6.6
|
Escrow Accounts
|
21
|
|
Section 6.7
|
Notices and Financial Information.
|
21
|
|
Section 6.8
|
Defaults under Deferred Servicing Agreements
|
21
|
|
Section 6.9
|
Continuity of Business
|
21
|
|
Section 6.10
|
Clean Up Call Rights
|
22
|
|
Section 6.11
|
Amendments to Deferred Servicing Agreements; Transfer of Servicing Rights
|
22
|
|
Section 6.12
|
Assumption of Servicing Duties; Transfer of Rights to MSRs and Servicing Rights
|
23
|
|
Section 6.13
|
Termination Event
|
23
|
|
Section 6.14
|
Servicing Transfer
|
23
|
|
Section 6.15
|
Incorporation of Provisions from Subservicing Agreement
|
23
|
|
Article 7
|
SELLER SERVICING FEES; COSTS AND EXPENSES
|
23
|
|
Section 7.1
|
Seller Monthly Servicing Fee
|
23
|
|
Section 7.2
|
Performance Fee
|
24
|
|
Section 7.3
|
Costs and Expenses
|
24
|
|
Section 7.4
|
Ancillary Income
|
25
|
|
Section 7.5
|
Calculation and Payment
|
25
|
|
Section 7.6
|
No Offset
|
25
|
|
Section 7.7
|
Servicing Fee Reset Date
|
25
|
|
Article 8
|
INDEMNIFICATION
|
25
|
|
Section 8.1
|
Seller Indemnification of Purchasers
|
25
|
|
Section 8.2
|
Purchasers Indemnification of Seller
|
26
|
|
Section 8.3
|
Indemnification Procedures
|
26
|
|
Section 8.4
|
Tax Treatment
|
27
|
|
Section 8.5
|
Survival
|
27
|
|
Section 8.6
|
Additional Indemnification
|
28
|
|
Section 8.7
|
Specific Performance
|
28
|
|
Article 9
|
GRANT OF SECURITY INTEREST
|
28
|
|
Section 9.1
|
Granting Clause
|
28
|
|
Article 10
|
MISCELLANEOUS PROVISIONS
|
30
|
|
Section 10.1
|
Further Assurances
|
30
|
|
Section 10.2
|
Compliance with Applicable Laws; Licenses
|
30
|
|
Section 10.3
|
Merger, Consolidation, Etc
|
30
|
|
Section 10.4
|
Annual Officer’s Certificate
|
30
|
|
Section 10.5
|
Accounting Treatment
|
31
|
|
Section 10.6
|
Incorporation
|
31
|
|
Section 10.7
|
Third Party Beneficiaries
|
31
|
|
|
OCWEN LOAN SERVICING, LLC
|
||
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By:
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Ocwen Mortgage Servicing, Inc., as its sole member
|
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By:
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Name:
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Title:
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HLSS HOLDINGS, LLC
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By:
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Name:
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Title:
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HLSS MSR – EBO ACQUISITION LLC
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By:
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Name:
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Title:
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Particulars
|
Amount ($)
|
Scheduled Principal Payments
|
0.00
|
Curtailments
|
0.00
|
Interest on curtailment
|
0.00
|
Pool to Security
|
0.00
|
Payoff Principal
|
0.00
|
Neg Amt Prin
|
0.00
|
Deferred Principal Paid
|
0.00
|
Total Principal remitted
|
0.00
|
Gross Scheduled Interest
|
0.00
|
Less: Service fee amount
|
0.00
|
Less: LPMI Premium
|
0.00
|
Add: INT on STA Reinstatement
|
0.00
|
Add: INT on STA Paid‑in‑full
|
0.00
|
Less: STA PI Recoveries
|
0.00
|
Total Interest remitted
|
0.00
|
Less: Realized Loss
|
0.00
|
Less: Trailing expenses
|
0.00
|
Add: Trailing income
|
0.00
|
+/‑ Collection on released loans
|
0.00
|
Interest on curtailment
|
0.00
|
Add: Prepayment penalty
|
0.00
|
+/‑ Prior period PPP
|
0.00
|
Add: Collection on STA loans
|
0.00
|
Add: Non recoverable Credits
|
0.00
|
Less: Non recoverable advances
|
0.00
|
Less: Non Loan level expense
|
0.00
|
Particulars
|
Amount ($)
|
Less: Jr Lien Blanket Policy Fee
|
0.00
|
Less: Pre‑approved legal expense
|
0.00
|
+/‑ ‑Reconciliation adjustments
|
0.00
|
+ / ‑ Arrearage remittance
|
|
Add: Principal Arrearage
|
0.00
|
Add: Interest Arrearage
|
0.00
|
+ / ‑: Modification Forgiveness of Debt
|
|
Principal Forgiveness
|
0.00
|
Interest Forgiveness
|
0.00
|
Expense Forgiveness
|
0.00
|
Scheduling Difference
|
0.00
|
Deferred Principal Loss
|
0.00
|
SAM waived balance loss
|
0.00
|
Investor Incentives
|
0.00
|
Less: Compensating Interest adjustment
|
0.00
|
Total Remittance
|
0.00
|
Beg Sch Balance
|
0.00
|
Ending Principal Balance
|
0.00
|
Beg Actual Balance
|
0.00
|
Ending Actual Principal Balance
|
0.00
|
Beg Deferred Principal Balance
|
0.00
|
Ending Deferred Principal Balance
|
0.00
|
Beg Loan count
|
0.00
|
Payoffs
|
0.00
|
End Loan count
|
0.00
|
Principal Roll Test
|
0.00
|
Loan Count Test
|
0.00
|
Non Supporting Compensating Interest
|
0.00
|
Wire of sub ‑ Investor
|
0.00
|
Grand Total for PI Wire
|
0.00
|
|
HLSS HOLDINGS, LLC
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By:
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Name:
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Title:
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HLSS MSR – EBO ACQUISITION LLC
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By:
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New Residential Investment Corp., as its sole member
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By:
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Name:
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Title:
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[NRZ ADVANCE RECEIVABLES TRUST 2015-
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||
|
ON1]
|
||
|
[HLSS SERVICER ADVANCE RECEIVABLES
|
||
|
TRUST MS3]
|
||
|
[NRZ SERVICER ADVANCE RECEIVABLES
|
||
|
TRUST (ON) JPMC]
|
|
By:
|
[HLSS Holdings, LLC, its administrator]
|
|
|
|
|
|
|
By:
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|
|
|
|
Name:
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Title:
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Acknowledged and agreed to as of
|
|
|
the date first above written.
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OCWEN LOAN SERVICING, LLC
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By:
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|
Name:
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Title:
|
|
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HLSS HOLDINGS, LLC
|
||
|
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By:
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Name:
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Title:
|
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HLSS MSR – EBO ACQUISITION LLC
|
||
|
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|
|
|
By:
|
New Residential Investment Corp., as its sole member
|
|
|
|
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
|
Title:
|
|
|
[NRZ ADVANCE RECEIVABLES TRUST 2015-
|
||
|
ON1]
|
||
|
[HLSS SERVICER ADVANCE RECEIVABLES
|
||
|
TRUST MS3]
|
||
|
[NRZ SERVICER ADVANCE RECEIVABLES
|
||
|
TRUST (ON) JPMC]
|
|
By:
|
[HLSS Holdings, LLC, its administrator]
|
|
|
|
|
|
|
By:
|
|
|
|
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Name:
|
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|
|
Title:
|
|
Acknowledged and agreed to as of
|
|
|
the date first above written.
|
|
|
|
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OCWEN LOAN SERVICING, LLC
|
|
|
|
|
|
By:
|
|
|
|
Name:
|
|
|
Title:
|
|
ARTICLE I
|
||||
|
DEFINITIONS
|
1
|
|
|
1
|
|
Definitions.
|
1
|
|
|
|
|
||
ARTICLE II
|
||||
|
PURCHASE AND SALE OF THE PURCHASED ASSETS; CLOSING
|
8
|
|
|
2.1
|
|
Purchase and Sale.
|
8
|
|
2.2
|
|
Sale Date and Transfer Date.
|
9
|
|
2.3
|
|
Closing Obligations.
|
9
|
|
2.4
|
|
Sale Date Data Tapes.
|
10
|
|
2.5
|
|
[RESERVED].
|
10
|
|
2.6
|
|
Payment of Purchase Price.
|
10
|
|
2.7
|
|
[RESERVED].
|
10
|
|
2.8
|
|
[RESERVED].
|
10
|
|
2.9
|
|
Transfer of Ownership.
|
10
|
|
2.10
|
|
Servicing Transfer Instructions.
|
10
|
|
2.11
|
|
Document and Data Transfer.
|
11
|
|
2.12
|
|
Assignments; Endorsements.
|
11
|
|
2.13
|
|
Required Consents.
|
12
|
|
2.14
|
|
Costs of Transfer.
|
13
|
|
2.15
|
|
Notice to Borrowers.
|
13
|
|
2.16
|
|
Flood Contracts.
|
13
|
|
2.17
|
|
Tax Records Monitoring.
|
14
|
|
2.18
|
|
Loan Tapes.
|
14
|
|
2.19
|
|
Custodian.
|
14
|
|
2.20
|
|
Transfers of REO.
|
14
|
|
2.21
|
|
[RESERVED.]
|
14
|
|
2.22
|
|
Mortgage Insurance.
|
14
|
|
|
|
|
||
ARTICLE III
|
||||
|
REPRESENTATIONS AND WARRANTIES OF SELLER.
|
15
|
|
|
[***]
|
|
|||
|
|
|
||
ARTICLE IV
|
||||
|
REPRESENTATIONS AND WARRANTIES OF PURCHASER
|
18
|
|
|
4.1
|
Organization, Authority.
|
18
|
|
|
4.2
|
No Conflict.
|
19
|
|
|
4.3
|
Litigation.
|
19
|
|
|
4.4
|
Permits.
|
19
|
|
|
4.5
|
Financial Ability.
|
20
|
|
|
4.6
|
[No Brokers.
|
20
|
|
|
4.7
|
No Impediment.
|
20
|
|
|
4.8
|
Servicer Participation Agreement.
|
20
|
|
|
4.9
|
Sophisticated Purchaser.
|
21
|
|
|
|
|
||
ARTICLE V
|
||||
|
COVENANTS
|
21
|
|
|
[***]
|
|
|||
|
|
|
||
ARTICLE VI
|
||||
|
CONDITIONS TO CLOSING
|
29
|
|
|
6.1
|
Conditions to the Obligations of Purchaser and Seller.
|
29
|
|
|
6.2
|
Conditions to the Obligations of Purchaser.
|
29
|
|
|
6.3
|
Conditions to the Obligations of Seller.
|
30
|
|
|
|
|
|
||
ARTICLE VII
|
||||
|
INDEMNIFICATION
|
31
|
|
|
[***]
|
|
|||
|
|
|
||
ARTICLE VIII
|
||||
|
MISCELLANEOUS
|
34
|
|
|
|
|
|
||
|
|
|
||
8.1
|
Assignment.
|
34
|
|
|
8.2
|
No Third-Party Beneficiaries.
|
34
|
|
|
8.3
|
Termination.
|
35
|
|
|
8.4
|
Expenses.
|
36
|
|
|
8.5
|
Amendment and Modification.
|
36
|
|
|
8.6
|
Notices.
|
36
|
|
|
8.7
|
Governing Law.
|
37
|
|
|
8.8
|
Severability.
|
38
|
|
|
8.9
|
Waiver.
|
38
|
|
|
8.10
|
Counterparts; Facsimile.
|
38
|
|
|
8.11
|
Entire Agreement
|
38
|
|
|
8.12
|
Interpretation.
|
39
|
|
Exhibit A-1:
|
[RESERVED]
|
Exhibit A-2:
|
[RESERVED]
|
Exhibit B:
|
[RESERVED]
|
Exhibit C:
|
Data Fields for the Mortgage Loan Schedule
|
Exhibit D:
|
Servicing Transfer Instructions
|
Exhibit E:
|
Form of Transfer Confirmation
|
Exhibit F:
|
Litigation Protocol
|
Exhibit G:
|
Form of Power of Attorney
|
Exhibit H:
|
Form of Assignment and Assumption Agreement
|
Exhibit I:
|
Form of HAMP/HAFA Assignment and Assumption Agreement
|
1.1
|
Definitions
.
|
2.1
|
Purchase and Sale
.
|
2.2
|
Sale Date and Transfer D
ate.
|
2.3
|
Closing Obligations
.
|
2.4
|
Sale Date Data Tapes
.
|
2.5
|
[RESERVED].
|
2.6
|
Payment of Purchase Price
.
|
2.7
|
[RESERVED].
|
2.8
|
[RESERVED
].
|
2.9
|
Transfer of Ownership
.
|
2.10
|
Servicing Transfer Instructions
.
|
2.11
|
Document and Data Transfer
.
|
(iii)
|
[Reserved];
|
(v)
|
On the Transfer Date, the applicable Transfer Confirmation.
|
2.13
|
Required Consents
.
|
2.14
|
Costs of Transfer
.
|
2.15
|
Notice to Borrowers
.
|
2.16
|
Flood Contracts
.
|
2.17
|
Tax Records Monitoring
.
|
2.18
|
Loan Tapes
.
|
2.19
|
Custodian
.
|
2.20
|
Transfers of REO
.
|
2.21
|
[RESERVED
.]
|
2.22
|
Mortgage Insurance
.
|
4.2
|
No Conflict
.
|
4.3
|
Litigation
.
|
4.4
|
Permits
.
|
(c)
|
Purchaser is an approved member in good standing of the MERS system.
|
4.5
|
Financial Ability
.
|
4.6
|
[No Brokers
.
|
4.7
|
No Impediment
.
|
4.8
|
Servicer Participation Agreement
.
|
3
|
Subject to change if NRM is permitted to use a broker
|
4.9
|
Sophisticated Purchaser
.
|
6.1
|
Conditions to the Obligations of Purchaser and Seller
.
|
6.2
|
Conditions to the Obligations of Purchaser
.
|
6.3
|
Conditions to the Obligations of Seller
.
|
8.1
|
Assignment
.
|
8.2
|
No Third-Party Beneficiaries
.
|
8.3
|
Termination
.
|
8.4
|
Expenses
.
|
8.5
|
Amendment and Modification
.
|
8.6
|
Notices
.
|
(i)
|
If to Purchaser, to:
|
(ii)
|
If to Seller, to:
|
8.7
|
Governing Law
.
|
8.8
|
Severability
.
|
8.9
|
Waiver
.
|
8.10
|
Counterparts; Facsimile
.
|
8.12
|
Interpretation
.
|
1.
|
Seller, not NRM, will be the named servicer or sub-servicer, as applicable, under the related MSRPA Servicing Agreements subject to the New RMSR Agreement. Seller shall service the related Mortgage Loans in respect of the MSRPA Servicing Agreements in a manner substantially similar to the NRM Subservicing Agreement but for the benefit of the Purchasers because of the Purchasers’ interests in the related Rights to MSRs and other interests under the RMSR Servicing Agreement. Subject to Applicable Requirements (as defined in the NRM Subservicing Agreement), the Purchasers shall have substantively the same rights and interests (including any and all applicable representations, warranties, covenants and indemnities) in connection with the servicing of the related Mortgage Loans under the related MSRPA Servicing Agreements subject to the New RMSR Agreement that NRM has under the NRM Subservicing Agreement, as long as Seller is servicing the loans, including, but not limited to, rights to receive reports and data from Seller, vendor oversight of Seller's vendors, rights related to REO downstream services, and audit rights of Seller. Seller shall not be required to take an action with respect to a Change Request (as defined in the NRM Subservicing Agreement) which, in Seller’s reasonable opinion, may violate Applicable Requirements (as defined in the NRM Subservicing Agreement) as detailed in an Initial Response Notice (as defined in the NRM Subservicing Agreement).
|
2.
|
Holdings will pay Seller the same fees and other compensation under the New RMSR Agreement for any applicable MSRPA Servicing Agreement and the related Mortgage Loans that NRM would have otherwise paid Seller under the NRM Subservicing Agreement for such MSRPA Servicing Agreement and the related Mortgage Loans had the related Transfer Date had occurred. The Purchasers will be entitled to all other economic interests under the related Servicing Rights (either under the New RMSR Agreement or because of their ownership of the Rights to MSRs under the MSR Purchase Agreement and the Sale Supplements) in the same
|
3.
|
Seller will sell (and Holdings will purchase) all related Servicing Advance Receivables in a manner consistent with Article 3 of the Sale Supplements.
|
4.
|
The Purchasers shall not be required to pay any consideration to Seller in connection with any assignment of any Clean Up Call Rights to Purchaser (or any Purchaser’s designee), but the Purchasers (or any applicable designee) will be required to comply with provisions related to “Securitization Transactions” substantially identical to those contemplated by the NRM Subservicing Agreement.
|
5.
|
Seller will grant to each of the Purchasers a security interest in Collateral in scope consistent with Article 9 of the Sale Supplements to secure Seller’s obligations under the New RMSR Agreement.
|
6.
|
Upon either Purchaser’s written direction, Seller and Purchasers shall use best efforts to transfer any Servicing Rights subject to the New RMSR Agreement to NRM. Any such transfer will be subject to obtaining any requisite third-party consents. Upon any such transfer, the related Servicing Rights will be subject to the NRM Subservicing Agreement. To the extent any costs of such transfers are incurred on or prior to the one-year anniversary of the related MSRPA Servicing Agreement becoming subject to the New RMSR Agreement, such will be allocated in accordance with Section 8 of this Agreement. To the extent any particular cost arises after the one year anniversary of the related MSRPA Servicing Agreement becoming subject to the New RMSR Agreement, (i) such cost shall be paid by the Purchasers if the NRM Subservicing Agreement has been terminated when such cost is incurred, and (ii) such cost will be allocated in accordance with Section 8 of this Agreement if the NRM Subservicing Agreement has not terminated when such cost is incurred. In the event the parties are unable to transfer any Servicing Rights, the related MSRPA Servicing Agreements will remain subject to the New RMSR Agreement until the Servicing Rights can be transferred.
|
7.
|
If NRM terminates the NRM Subservicing Agreement without cause, Seller and Purchasers shall use best efforts to transfer any Servicing Rights subject to the New RMSR Agreement to a party selected by Holdings as promptly as practical. Any such transfer will be subject to obtaining any requisite third-party consents and the cooperation of the Purchasers. Purchasers will be entitled to keep all of the proceeds of any such transfer. In such a case of transfer without cause, Seller will be entitled to compensation consistent with the compensation for a termination without cause contemplated by the NRM Subservicing Agreement, including, without limitation,
|
8.
|
If NRM terminates the NRM Subservicing Agreement for cause, Seller and Purchasers shall use best efforts to transfer any Servicing Rights subject to the New RMSR Agreement to a party selected by Holdings as promptly as practicable. Any such transfer will be subject to obtaining any requisite third-party consents and the cooperation of the Purchasers. Purchasers will be entitled to keep all of the proceeds of any such transfer. Except as otherwise set forth herein, any such transfer shall be subject to terms and conditions substantially similar to those set forth in Section 5.4 of the NRM Subservicing Agreement, including without limitation, with respect to processes and timing, except that the costs of any such transfer will be paid by Seller to the extent such costs are incurred on or prior to the one-year anniversary of the related MSRPA Servicing Agreement becoming subject to the New RMSR Agreement, and any costs arising thereafter shall be paid by the Purchasers. In the event the parties are unable to transfer any Servicing Rights, the related MSRPA Servicing Agreements will remain subject to the New RMSR Agreement until the Servicing Rights can be transferred.
|
9.
|
The “Step-Up Fee” contemplated by Section 5.4(d) of the NRM Subservicing Agreement will not apply in respect of the New RMSR Agreement.
|
10.
|
Subject to the penultimate sentence of this documentation principle, in the event that a Purchaser directs Seller to engage a third party to act as subservicer and to perform any primary servicing obligations in respect of the MSRPA Servicing Agreements, (A) such third party shall be reasonably acceptable to Seller and shall be licensed and qualified as a subservicer under such MSRPA Servicing Agreements, and (B) Seller shall be entitled to (i) indemnification from Purchasers in respect of acts or omissions of any such subservicer in connection with the subservicing of the related mortgage loans (which indemnification shall be no less favorable to Seller than the indemnification in favor of NRM in the NRM Subservicing Agreement), and (ii) substantially the same reporting and information access in respect of the related mortgage loans from any such subservicer as Seller is required to deliver NRM under the NRM Subservicing Agreement. Notwithstanding anything to the contrary herein, no Purchaser shall have the right to direct Seller to engage a third party to act as subservicer or to perform any primary servicing obligations in respect of any MSRPA Servicing Agreement unless any Purchaser or Seller has reasonably demonstrated that the Servicing Rights in respect of such MSRPA Servicing Agreement cannot be otherwise transferred in accordance with the terms of such MSRPA Servicing Agreements. The terms and conditions of any subservicing agreement by and among Seller and such third-party subservicer relating to reporting, oversight and indemnification shall be no less favorable to Seller than the terms and conditions of the NRM Subservicing Agreement.
|
11.
|
The initial term of the New RMSR Agreement will be the same as the initial term of the NRM Subservicing Agreement. Upon either Purchaser’s direction therefor following the expiration of the New RMSR Agreement, Seller and Purchasers shall use best efforts to transfer any Servicing Rights subject to the New RMSR Agreement to a party selected by Holdings. Any such transfer will be subject to obtaining any requisite third-party consents and the cooperation of the Purchasers. Purchasers will be entitled to keep all of the proceeds of any such transfer. To the extent any particular cost arises in connection with any such transfer, (i) such cost shall be paid by the Purchasers if the NRM Subservicing Agreement has been terminated or has otherwise expired when such cost is incurred, and (ii) such cost will be allocated in accordance with Section 8 of this Agreement if the NRM Subservicing Agreement has not terminated when such cost is incurred. In the event that the term of the New RMSR Agreement expires and the parties are unable to transfer any Servicing Rights, the related MSRPA Servicing Agreements will remain subject to the New RMSR Agreement, on the same economic terms as immediately before the expiration, until the Servicing Rights can be transferred.
|
Designated Servicing Agreement (referenced by Investor ID)
|
Designated Servicing Agreement (Deal Name)
|
Designated Servicing Agreement Price
|
|
Ocwen Loan Servicing, LLC
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ John P. Kim
|
|
Name:
|
John P. Kim
|
|
Title:
|
Senior Vice President
|
|
HLSS HOLDINGS, LLC
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Cameron MacDougall
|
|
Name:
|
Cameron MacDougall
|
|
Title:
|
Secretary
|
|
HLSS MSR - EBO ACQUISITION LLC
|
|
|
|
|
|
By:
|
New Residential Investment Corp., its sole member
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Nicola Santoro, Jr.
|
|
Name:
|
Nicola Santoro, Jr.
|
|
Title:
|
Chief Financial Officer
|
|
NEW RESIDENTIAL MORTGAGE LLC
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Cameron MacDougall
|
|
Name:
|
Cameron MacDougall
|
|
Title:
|
President
|
|
|
Page
|
|
|
|
|
|
ARTICLE I. DEFINITIONS AND CONSTRUCTION
|
1
|
|
|
Section 1.01
|
Definitions
|
1
|
|
Section 1.02
|
General Interpretive Principles
|
9
|
|
Section 1.03
|
Homeward Servicing Rights
|
10
|
|
ARTICLE II. TRANSFER OF SERVICING RIGHTS AND RELATED MATTERS
|
10
|
|
|
Section 2.01
|
Items to be Sold, Transferred and Assigned
|
10
|
|
Section 2.02
|
Evidence of Transfer
|
10
|
|
Section 2.03
|
Consideration for Transfer
|
11
|
|
Section 2.04
|
Subservicing
|
11
|
|
Section 2.05
|
Custodial Accounts
|
11
|
|
ARTICLE III. PAYMENTS GENERALLY
|
11
|
|
|
Section 3.01
|
Form of Payment to be Made
|
11
|
|
ARTICLE IV. REPRESENTATIONS and WARRANTIES OF THE SELLER
|
11
|
|
|
Section 4.01
|
Due Organization and Good Standing
|
12
|
|
Section 4.02
|
Authority and Capacity
|
12
|
|
Section 4.03
|
Effective Agreement
|
12
|
|
Section 4.04
|
No Conflict
|
12
|
|
Section 4.05
|
Consents, Approval and Compliance
|
13
|
|
Section 4.06
|
Ability to Transfer
|
13
|
|
Section 4.07
|
Insurance
|
13
|
|
Section 4.08
|
Litigation
|
13
|
|
Section 4.09
|
Reserved.
|
13
|
|
Section 4.10
|
Facts and Omissions
|
13
|
|
Section 4.11
|
Sanctions; Anti-Corruption Compliance
|
14
|
|
Section 4.12
|
Mortgage Loans and Servicing Rights
|
14
|
|
Section 4.13
|
Quality Control Program
|
19
|
|
Section 4.14
|
Broker’s Fees
|
19
|
|
ARTICLE V. REPRESENTATIONS and WARRANTIES OF THE PURCHASER
|
19
|
|
|
Section 5.01
|
Due Formation and Good Standing
|
19
|
|
Section 5.02
|
Authority and Capacity
|
19
|
|
Section 5.03
|
Effective Agreement
|
20
|
|
Section 5.04
|
No Conflict
|
20
|
|
Section 5.05
|
Consents, Approvals and Compliance
|
20
|
|
Section 5.06
|
Ability to Acquire
|
20
|
|
Section 5.07
|
Licenses
|
20
|
|
Section 5.08
|
Litigation
|
20
|
|
Section 5.09
|
Sophisticated Purchaser
|
21
|
|
Section 5.10
|
Reserved
|
21
|
|
Section 5.11
|
Sanctions; Anti-Corruption Compliance
|
21
|
|
Section 5.12
|
Broker’s Fees
|
21
|
|
ARTICLE VI. COVENANTS
|
21
|
|
|
Section 6.01
|
Required Consents.
|
21
|
|
Section 6.02
|
Servicing Files
|
22
|
|
Section 6.03
|
Undertakings by the Seller
|
22
|
|
Section 6.04
|
Non-Solicitation
|
22
|
|
Section 6.05
|
Regulatory Update
|
22
|
|
Section 6.06
|
Notice of Breach
|
22
|
|
Section 6.07
|
Ordinary Course Servicing
|
23
|
|
Section 6.08
|
Updated Litigation Schedule
|
23
|
|
Section 6.09
|
Notice of Material Events
|
23
|
|
Section 6.10
|
Governmental Inquiries
|
23
|
|
Section 6.11
|
Seller Information
|
23
|
|
Section 6.12
|
Cooperation
|
24
|
|
Section 6.13
|
Custodial Account Verification
|
24
|
|
Section 6.14
|
Quality Control Procedures
|
24
|
|
Section 6.15
|
Due Diligence
|
24
|
|
ARTICLE VII. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PURCHASER
|
24
|
|
|
Section 7.01
|
Correctness of Representations and Warranties
|
24
|
|
Section 7.02
|
Compliance with Covenants
|
24
|
|
Section 7.03
|
Required Consents
|
25
|
|
Section 7.04
|
Litigation
|
25
|
|
Section 7.05
|
Condition of the Seller
|
25
|
|
Section 7.06
|
Required Documentation
|
25
|
|
Section 7.07
|
Replacement Subservicer
|
25
|
|
Section 7.08
|
Release of Liens on Servicing Rights
|
25
|
|
Section 7.09
|
Transfer Date Documentation
|
25
|
|
Section 7.10
|
Licenses
|
26
|
|
Section 7.11
|
Reserved.
|
26
|
|
Section 7.12
|
Reserved.
|
26
|
|
Section 7.13
|
Secretary’s Certificate of Seller
|
26
|
|
Section 7.14
|
Reserved.
|
26
|
|
Section 7.15
|
Reserved.
|
26
|
|
Section 7.16
|
Subservicing Agreement
|
26
|
|
ARTICLE VIII. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLER
|
26
|
|
Section 8.01
|
Correctness of Representations and Warranties
|
26
|
|
Section 8.02
|
Compliance with Covenants
|
26
|
|
Section 8.03
|
Proceedings
|
26
|
|
Section 8.04
|
Required Consents
|
27
|
|
Section 8.05
|
Settlement Payment
|
27
|
|
Section 8.06
|
Opinion
|
27
|
|
Section 8.07
|
Secretary’s Certificate of Purchaser
|
27
|
|
ARTICLE IX. INDEMNIFICATION AND OTHER PAYMENTS
|
27
|
|
|
Section 9.01
|
Indemnification of the Purchaser
|
27
|
|
Section 9.02
|
Indemnification by Purchaser.
|
28
|
|
Section 9.03
|
[***]
|
29
|
|
Section 9.04
|
Reserved.
|
29
|
|
Section 9.05
|
Claims
|
29
|
|
Section 9.06
|
Additional Remedy Considerations
|
29
|
|
Section 9.07
|
Mitigation
|
29
|
|
ARTICLE X. TERMINATION.
|
30
|
|
|
Section 10.01
|
Termination.
|
30
|
|
Section 10.02
|
Designated Events
|
31
|
|
Section 10.03
|
Effect of Termination
|
31
|
|
ARTICLE XI. MISCELLANEOUS
|
32
|
|
|
Section 11.01
|
Supplementary Information
|
32
|
|
Section 11.02
|
Restriction on Notices; Information and Disclosure
|
32
|
|
Section 11.03
|
Further Assurances
|
32
|
|
Section 11.04
|
Survival
|
32
|
|
Section 11.05
|
Assignment
|
32
|
|
Section 11.06
|
Notices.
|
33
|
|
Section 11.07
|
Entire Agreement
|
34
|
|
Section 11.08
|
Exhibits and Schedules
|
34
|
|
Section 11.09
|
Binding Effect; Third Parties
|
34
|
|
Section 11.10
|
GOVERNING LAW
|
34
|
|
Section 11.11
|
Submission to Jurisdiction
|
34
|
|
Section 11.12
|
Waiver of Jury Trial
|
35
|
|
Section 11.13
|
No Strict Construction
|
35
|
|
Section 11.14
|
Costs and Expenses
|
35
|
|
Section 11.15
|
Counterparts
|
35
|
|
Section 11.16
|
Headings
|
35
|
|
Section 11.17
|
No Remedy Exclusive
|
35
|
|
Section 11.18
|
Waiver
|
36
|
|
Section 11.19
|
Confidentiality.
|
36
|
|
Section 11.20
|
Tax Treatment of Sales of Servicing Rights
|
37
|
|
Section 11.21
|
Third Party Beneficiaries
|
37
|
|
Section 11.22
|
Severability
|
38
|
|
Section 11.23
|
Reproduction of Documents
|
38
|
|
Section 11.24
|
Limited Effect
|
38
|
|
Section 11.25
|
Ocwen Parent Guaranty.
|
38
|
|
Section 11.26
|
Purchaser Parent Guaranty.
|
39
|
|
Section 11.27
|
No Offset
|
39
|
|
Section 11.28
|
Amendment; Waivers
|
39
|
|
Section 11.29
|
SBO Contracts
|
40
|
|
|
New Residential Mortgage LLC,
|
||
|
as the Purchaser
|
||
|
|
|
|
|
By: New Residential Investment Corp., its
|
||
|
sole member
|
||
|
|
|
|
|
|
|
|
|
By:
|
/s/ Matthew Gabriel Hoffman-Johnson
|
|
|
|
Name:
|
Matthew Gabriel Hoffman-Johnson
|
|
|
Title:
|
Attorney-In-Fact, Agent and Authorized Signatory
|
|
New Residential Investment Corp.,
|
||
|
as Purchaser Parent
|
||
|
|
|
|
|
|
|
|
|
By:
|
/s/ Matthew Gabriel Hoffman-Johnson
|
|
|
|
Name:
|
Matthew Gabriel Hoffman-Johnson
|
|
|
Title:
|
Attorney-In-Fact, Agent and Authorized Signatory
|
|
Ocwen Loan Servicing, LLC,
|
||
|
as the Seller
|
||
|
|
|
|
|
|
|
|
|
By:
|
/s/ John P Kim
|
|
|
|
Name:
|
John P Kim
|
|
|
Title:
|
Senior Vice President
|
|
Ocwen Financial Corporation,
|
||
|
as Ocwen Parent
|
||
|
|
|
|
|
|
|
|
|
By:
|
/s/ John V. Britti
|
|
|
|
Name:
|
John V. Britti
|
|
|
Title:
|
EVP
|
|
OCWEN LOAN SERVICING, LLC
|
|
as the Seller
|
|
|
|
|
|
By:
|
|
Name:
|
|
Title:
|
|
NEW RESIDENTIAL MORTGAGE LLC
|
|
as the Purchaser
|
|
|
|
|
|
By:
|
|
Name:
|
|
Title:
|
|
|
|
Servicing Type
|
||
|
|
|
|
|
|
|
|
|
|
|
|
[***]
|
[***]
|
|
|
X
|
|
[***]
|
[***]
|
|
|
X
|
|
[***]
|
[***]
|
|
|
X
|
|
[***]
|
[***]
|
|
|
X
|
|
[***]
|
[***]
|
|
|
X
|
|
[***]
|
[***]
|
|
|
X
|
|
[***]
|
[***]
|
|
|
X
|
|
[***]
|
[***]
|
|
|
X
|
|
[***]
|
[***]
|
|
|
X
|
|
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|
[***]
|
|
|
X
|
|
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|
[***]
|
|
|
X
|
|
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|
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|
|
|
X
|
|
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|
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|
|
|
X
|
|
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|
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|
|
|
X
|
|
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|
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|
|
|
X
|
|
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|
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|
|
|
X
|
|
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|
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|
|
|
X
|
|
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|
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|
|
|
X
|
|
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|
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|
|
|
X
|
|
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|
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|
|
|
X
|
|
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|
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|
|
|
X
|
|
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|
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|
|
|
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|
|
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|
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|
|
|
X
|
|
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|
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|
|
|
X
|
|
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|
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|
|
|
X
|
|
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|
[***]
|
|
|
X
|
|
[***]
|
[***]
|
|
|
X
|
|
[***]
|
[***]
|
|
|
X
|
|
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|
[***]
|
|
|
X
|
|
[***]
|
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|
|
|
X
|
|
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|
[***]
|
|
|
X
|
|
[***]
|
[***]
|
|
|
X
|
|
[***]
|
[***]
|
|
|
X
|
|
[***]
|
[***]
|
|
|
X
|
|
[***]
|
[***]
|
|
|
X
|
|
[***]
|
[***]
|
|
|
X
|
|
[***]
|
[***]
|
|
|
X
|
|
[***]
|
[***]
|
|
|
X
|
|
[***]
|
[***]
|
|
|
X
|
|
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|
[***]
|
|
|
X
|
|
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|
[***]
|
|
|
X
|
|
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|
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|
|
|
X
|
|
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|
[***]
|
|
|
X
|
|
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|
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|
|
|
X
|
|
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|
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|
|
|
X
|
|
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|
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|
|
|
X
|
|
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|
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|
|
|
X
|
|
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|
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|
|
|
X
|
|
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|
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|
|
|
X
|
|
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|
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|
|
|
X
|
|
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|
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|
|
|
X
|
|
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|
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|
|
|
X
|
|
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|
[***]
|
|
|
X
|
|
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|
[***]
|
|
|
X
|
|
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|
[***]
|
|
|
X
|
|
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|
[***]
|
|
|
X
|
|
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|
[***]
|
|
|
X
|
|
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|
[***]
|
|
|
X
|
|
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|
[***]
|
|
|
X
|
|
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|
[***]
|
|
|
X
|
|
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|
[***]
|
|
|
X
|
|
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|
[***]
|
|
|
X
|
|
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|
[***]
|
|
|
X
|
|
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|
[***]
|
|
|
X
|
|
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|
[***]
|
|
|
X
|
|
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|
[***]
|
|
|
X
|
|
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|
[***]
|
|
|
X
|
|
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|
[***]
|
|
|
X
|
|
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|
[***]
|
|
|
X
|
|
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|
[***]
|
|
|
X
|
|
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|
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|
|
|
X
|
|
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|
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|
|
|
X
|
|
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|
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|
|
|
X
|
|
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|
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|
|
|
X
|
|
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|
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|
|
|
X
|
|
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|
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|
|
|
X
|
|
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|
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|
|
|
X
|
|
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|
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|
|
|
X
|
|
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|
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|
|
|
X
|
|
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|
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|
|
|
X
|
|
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|
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|
|
|
X
|
|
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|
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|
|
|
X
|
|
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|
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|
|
|
X
|
|
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|
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|
|
|
X
|
|
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|
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|
|
|
X
|
|
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|
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|
|
|
X
|
|
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|
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|
|
|
X
|
|
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|
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|
|
|
X
|
|
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|
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|
|
|
X
|
|
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|
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|
|
|
X
|
|
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|
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|
|
|
X
|
|
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|
[***]
|
|
|
X
|
|
[***]
|
[***]
|
|
|
X
|
|
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|
[***]
|
|
|
X
|
|
[***]
|
[***]
|
|
|
X
|
|
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|
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|
|
|
X
|
|
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|
[***]
|
|
|
X
|
|
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|
[***]
|
|
|
X
|
|
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|
[***]
|
|
|
X
|
|
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|
[***]
|
|
|
X
|
|
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|
[***]
|
|
|
X
|
|
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|
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|
|
|
X
|
|
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|
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|
|
|
X
|
|
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|
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|
|
|
X
|
|
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|
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|
|
|
X
|
|
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|
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|
|
|
X
|
|
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|
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|
|
|
X
|
|
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|
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|
|
|
X
|
|
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|
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|
|
|
X
|
|
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|
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|
|
|
X
|
|
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|
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|
|
|
X
|
|
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|
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|
|
|
X
|
|
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|
[***]
|
|
|
X
|
|
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|
[***]
|
|
|
X
|
|
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|
[***]
|
|
|
X
|
|
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|
[***]
|
|
|
X
|
|
[***]
|
[***]
|
|
|
X
|
|
[***]
|
[***]
|
|
|
X
|
|
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|
[***]
|
|
|
X
|
|
[***]
|
[***]
|
|
|
X
|
|
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|
[***]
|
|
|
X
|
|
[***]
|
[***]
|
|
|
X
|
|
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|
[***]
|
|
|
X
|
|
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|
[***]
|
|
|
X
|
|
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|
[***]
|
|
|
X
|
|
[***]
|
[***]
|
|
|
X
|
|
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|
[***]
|
|
|
X
|
|
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|
[***]
|
|
|
X
|
|
[***]
|
[***]
|
|
|
X
|
|
[***]
|
[***]
|
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|
[***]
|
[***]
|
|
|
X
|
|
[***]
|
[***]
|
|
|
X
|
|
[***]
|
[***]
|
|
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X
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[***]
|
[***]
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X
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[***]
|
[***]
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X
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[***]
|
[***]
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X
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[***]
|
[***]
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X
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[***]
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[***]
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X
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[***]
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[***]
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X
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[***]
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[***]
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X
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[***]
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[***]
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X
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[***]
|
[***]
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X
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[***]
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[***]
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X
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[***]
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[***]
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X
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[***]
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[***]
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X
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[***]
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[***]
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X
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[***]
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X
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[***]
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X
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X
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X
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X
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X
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X
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X
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X
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X
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X
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X
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X
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X
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X
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X
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X
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X
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X
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X
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X
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[***]
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X
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X
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X
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X
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X
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X
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X
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X
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X
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X
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X
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X
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X
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X
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X
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X
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X
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X
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X
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X
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X
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[***]
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X
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X
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X
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X
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X
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X
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|
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X
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X
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|
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X
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|
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X
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|
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|
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X
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|
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X
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|
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X
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X
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|
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X
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X
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X
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X
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X
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X
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X
|
[***]
|
[***]
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X
|
[***]
|
[***]
|
|
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|
X
|
Inv #
|
Deal Name
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
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[***]
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[***]
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[***]
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[***]
|
[***]
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[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
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[***]
|
[***]
|
[***]
|
[***]
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[***]
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[***]
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[***]
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[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
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[***]
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[***]
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[***]
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[***]
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[***]
|
[***]
|
[***]
|
[***]
|
[***]
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[***]
|
[***]
|
[***]
|
[***]
|
[***]
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[***]
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[***]
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[***]
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[***]
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[***]
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[***]
|
[***]
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[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
1.
|
The information provided to Purchaser pursuant to
Section 6.11
of this Agreement.
|
2.
|
List of investor codes that were reflected on Seller’s systems as allowing stop advance as of November 2, 2016.
|
3.
|
List of investor codes that were reflected on Seller’s systems as allowing recoupment of advances as of November 2, 2016.
|
4.
|
The following information provided by Seller to Purchaser (or its Affiliates):
|
a.
|
stop advance loan counts and balances as set forth in NRZ/Fortress - Monthly Stop Advance and Advance Recoup Trends Report delivered to Purchaser on June 20, 2017
|
b.
|
recoup amounts as set forth in NRZ/Fortress - Monthly Stop Advance and Advance Recoup Trends Report delivered to Purchaser on June 20, 2017
|
c.
|
recapture loan counts, balances and recapture rate as set forth in HLSS/NRZ - Refinanced Loans (April 1, 2015 - May 31, 2017) delivered to the Purchased on July 17, 2017
|
d.
|
monthly loan tape for primary servicing, subservicing and master servicing for the prior 12-month period from June 2016 through and including June 2017, the below fields (for example, (i) the June 2017 data for primary servicing is set forth in NRZ/HLSS - Primary MSR Data Tape delivered to the Purchaser on July 11, 2017 and (ii) the April 2017 data for master servicing is set forth in HLSS/NRZ - Master MSR Data Tape - As_Of_Date 04/30/2017 delivered to the Purchaser on June 26, 2017):
|
i.
|
loan_number
|
ii.
|
as_of_dt
|
iii.
|
next_due_dt
|
iv.
|
end_bal
|
v.
|
dq_stat
|
vi.
|
maturity_dt
|
vii.
|
mod_dt
|
5.
|
Historical loss information with respect to losses incurred by Seller pursuant to certain Servicing Agreements as set forth in an email delivered by Seller to Purchaser on June 7, 2017.
|
6.
|
Loan-level P&I Advance, Servicing Advance (Escrow and Corporate Advances, but excluding NBB advance balances) balances as of June 30, 2017 (P&I Advance balances representing a reasonable approximation of such balance at such time and not out-of-pocket advances funded by the Seller or Purchaser).
|
7.
|
Loan-level NBB advance balances as delivered by the Seller to the Purchaser on July 7, 2017.
|
8.
|
Loan-level deferred servicing fee information as of May 31, 2017, as delivered by the Seller to the Purchaser on July 5, 2017.
|
9.
|
All pre-onsite visit materials provided by Seller to Purchaser via the FirmX website but solely to the extent included in the “Ocwen – New Residential Mortgage Directory”.
|
10.
|
PowerPoint presentations delivered by Seller to Purchaser on June 20, 2017 in connection with Purchaser's onsite visit.
|
Inv #
|
Deal Name
|
|
Reference
|
[***]
|
[***]
|
|
(A)
|
[***]
|
[***]
|
|
(A)
|
[***]
|
[***]
|
|
(A)
|
[***]
|
[***]
|
|
(A)
|
[***]
|
[***]
|
|
(A)
|
[***]
|
[***]
|
|
(A)
|
[***]
|
[***]
|
|
(A)
|
[***]
|
[***]
|
|
(A)
|
[***]
|
[***]
|
|
(A)
|
[***]
|
[***]
|
|
(A)
|
[***]
|
[***]
|
|
(A)
|
[***]
|
[***]
|
|
(A)
|
[***]
|
[***]
|
|
(A)
|
[***]
|
[***]
|
|
(A)
|
[***]
|
[***]
|
|
(A)
|
[***]
|
[***]
|
|
(A)
|
[***]
|
[***]
|
|
(A)
|
[***]
|
[***]
|
|
(A)
|
[***]
|
[***]
|
|
(A)
|
[***]
|
[***]
|
|
(A)
|
[***]
|
[***]
|
|
(A)
|
[***]
|
[***]
|
|
(A)
|
[***]
|
[***]
|
|
(A)
|
[***]
|
[***]
|
|
(A)
|
[***]
|
[***]
|
|
(A)
|
[***]
|
[***]
|
|
(A)
|
[***]
|
[***]
|
|
(A)
|
[***]
|
[***]
|
|
(A)
|
[***]
|
[***]
|
|
(A)
|
[***]
|
[***]
|
|
(A)
|
[***]
|
[***]
|
|
(A)
|
[***]
|
[***]
|
|
(A)
|
[***]
|
[***]
|
|
(A)
|
[***]
|
[***]
|
|
(A)
|
[***]
|
[***]
|
|
(A)
|
[***]
|
[***]
|
|
(A)
|
[***]
|
[***]
|
|
(A)
|
[***]
|
[***]
|
|
(A)
|
[***]
|
[***]
|
|
(A)
|
[***]
|
[***]
|
|
(A)
|
[***]
|
[***]
|
|
(A)
|
[***]
|
[***]
|
|
(A)
|
[***]
|
[***]
|
|
(A)
|
[***]
|
[***]
|
|
(A)
|
[***]
|
[***]
|
|
(A)
|
[***]
|
[***]
|
|
(A)
|
[***]
|
[***]
|
|
(A)
|
[***]
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[***]
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(A)
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[***]
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[***]
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(A)
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[***]
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[***]
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(A)
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[***]
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[***]
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(A)
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[***]
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[***]
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(A)
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[***]
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[***]
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(A)
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[***]
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[***]
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(A)
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[***]
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[***]
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(A)
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[***]
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[***]
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(A)
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[***]
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[***]
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(A)
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[***]
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[***]
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(A)
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[***]
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[***]
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(A)
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[***]
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[***]
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(A)
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[***]
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[***]
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(A)
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[***]
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[***]
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(A)
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[***]
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[***]
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(A)
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[***]
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[***]
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(A)
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[***]
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[***]
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(A)
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[***]
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[***]
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(A)
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[***]
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[***]
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(A)
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[***]
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[***]
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(A)
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[***]
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[***]
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(A)
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[***]
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[***]
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(A)
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[***]
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[***]
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(A)
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[***]
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[***]
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(A)
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[***]
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[***]
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(A)
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[***]
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[***]
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(A)
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[***]
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[***]
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(A)
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[***]
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[***]
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(A)
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[***]
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[***]
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(A)
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[***]
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[***]
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(A)
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[***]
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[***]
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(A)
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[***]
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[***]
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(A)
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[***]
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[***]
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(A)
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[***]
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[***]
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(A)
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[***]
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[***]
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(A)
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[***]
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[***]
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(A)
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[***]
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[***]
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(A)
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[***]
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[***]
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(A)
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[***]
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[***]
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(A)
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[***]
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[***]
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(A)
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[***]
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[***]
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(A)
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[***]
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[***]
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(A)
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[***]
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[***]
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(A)
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[***]
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[***]
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(A)
|
[***]
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[***]
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(A)
|
[***]
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[***]
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(A)
|
[***]
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[***]
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(A)
|
[***]
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[***]
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(A)
|
[***]
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[***]
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(A)
|
[***]
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[***]
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(A)
|
[***]
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[***]
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(A)
|
[***]
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[***]
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(A)
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[***]
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[***]
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(A)
|
[***]
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[***]
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(A)
|
[***]
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[***]
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(A)
|
[***]
|
[***]
|
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(A)
|
[***]
|
[***]
|
|
(B)
|
[***]
|
[***]
|
|
(B)
|
[***]
|
[***]
|
|
(B)
|
[***]
|
[***]
|
|
(B)
|
[***]
|
[***]
|
|
(B)
|
[***]
|
[***]
|
|
(B)
|
[***]
|
[***]
|
|
(C)
|
[***]
|
[***]
|
|
(C)
|
[***]
|
[***]
|
|
(C)
|
[***]
|
[***]
|
|
(D)
|
[***]
|
[***]
|
|
(D)
|
[***]
|
[***]
|
|
(D)
|
[***]
|
[***]
|
|
(D)
|
[***]
|
[***]
|
|
(D)
|
[***]
|
[***]
|
|
(D)
|
[***]
|
[***]
|
|
(D)
|
[***]
|
[***]
|
|
(D)
|
[***]
|
[***]
|
|
(D)
|
[***]
|
[***]
|
|
(D)
|
[***]
|
[***]
|
|
(D)
|
[***]
|
[***]
|
|
(D)
|
[***]
|
[***]
|
|
(D)
|
[***]
|
[***]
|
|
(D)
|
[***]
|
[***]
|
|
(D)
|
[***]
|
[***]
|
|
(D)
|
[***]
|
[***]
|
|
(D)
|
[***]
|
[***]
|
|
(D)
|
[***]
|
[***]
|
|
(D)
|
[***]
|
[***]
|
|
(D)
|
[***]
|
[***]
|
|
(E)
|
[***]
|
[***]
|
|
(E)
|
[***]
|
[***]
|
|
(E)
|
References
|
|
(A)
|
contains FHA, VA or USDA insured Mortgage Loans
|
(B)
|
Subservicer has incurred legal expenses incured on behalf of the trust fund in connection with breaches of the seller (Option One), with such expenses not being reimbureable from general collections due to the relationship between the prior servicer and originator/seller (both Option One)
|
(C)
|
Subservicer has incurred losses related to non-recoverable advances (with such losses not based upon a failure of the servicer to comply with the Applicable Requirements)
|
(D)
|
Subservicer has been required to pay expenses and other indemnification payments incurred by the trustee in connection with its duties and be reimbursed from the trust, with servicer reimbursement or indemnification payable by the trust being subsequent to certain other distributions
|
(E)
|
contains FNMA or FHLMC loans
|
|
|
Page
|
|
|
|
|
|
ARTICLE I
|
|
|
|
|
DEFINITIONS
|
1
|
|
|
|
|
|
ARTICLE II
|
|
|
|
|
AGREEMENTS OF THE SUBSERVICER
|
19
|
|
|
|
|
|
Section 2.1.
|
General.
|
19
|
|
Section 2.2.
|
Subservicer to Service in Compliance with Applicable Requirements.
|
21
|
|
Section 2.3.
|
Procedures, Owner/Servicer Change Requests and Servicing Cost Increase
|
26
|
|
Section 2.4.
|
Engagement of Contractors.
|
28
|
|
Section 2.5.
|
Establishment and Maintenance of Custodial and Escrow Accounts.
|
32
|
|
Section 2.6.
|
Other Services.
|
33
|
|
Section 2.7.
|
Service Level Agreements.
|
36
|
|
Section 2.8.
|
Accounting, Reporting and Remittances.
|
37
|
|
Section 2.9.
|
Delinquency Control.
|
40
|
|
Section 2.10.
|
REO Properties.
|
41
|
|
Section 2.11.
|
Books and Records; Access to Facilities.
|
43
|
|
Section 2.12.
|
Insurance.
|
47
|
|
Section 2.13.
|
Advances.
|
48
|
|
Section 2.14.
|
Solicitation.
|
51
|
|
Section 2.15.
|
HAMP.
|
52
|
|
Section 2.16.
|
Purchase Agreement Obligations.
|
52
|
|
Section 2.17.
|
Pending and Completed Loss Mitigation.
|
52
|
|
Section 2.18.
|
Disaster Recovery Plan.
|
53
|
|
Section 2.19.
|
Subservicer Performance Standards.
|
54
|
|
Section 2.20.
|
Sanction Lists; Suspicious Activity Reports.
|
55
|
|
Section 2.21.
|
Litigation Management.
|
55
|
|
Section 2.22.
|
Financial Covenants and Information; Covenant Compliance Reporting; [***].
|
56
|
|
|
|
|
|
ARTICLE III
|
|
|
|
|
AGREEMENTS OF THE OWNER/SERVICER
|
56
|
|
|
|
|
|
Section 3.1.
|
Transfers to Subservicer.
|
56
|
|
Section 3.2.
|
Pay-off of Mortgage Loan; Release of Mortgage Loan Documents.
|
58
|
|
Section 3.3.
|
Notices.
|
59
|
|
Section 3.4.
|
Mortgagor Requests.
|
60
|
|
Section 3.5.
|
Power of Attorney.
|
60
|
|
Section 3.6.
|
Affiliated Transactions.
|
60
|
|
|
|
|
|
ARTICLE IV
|
|
|
|
|
COMPENSATION
|
60
|
|
|
|
|
|
Section 4.1.
|
Subservicing Compensation.
|
60
|
|
Section 4.2.
|
Due Date of Payments; Penalties.
|
62
|
|
Section 4.3.
|
Resolution of Disputes and Monetary Errors.
|
62
|
|
|
|
|
|
ARTICLE V
|
|
|
|
|
TERM AND TERMINATION
|
62
|
|
|
|
|
|
Section 5.1.
|
Term.
|
63
|
|
Section 5.2.
|
[Reserved].
|
65
|
|
Section 5.3.
|
Termination with Cause.
|
65
|
|
Section 5.4.
|
Reimbursement upon Expiration or Termination; Termination Assistance.
|
70
|
|
Section 5.5.
|
Accounting/Records.
|
75
|
|
Section 5.6.
|
Termination Right of the Subservicer.
|
75
|
|
|
|
|
|
ARTICLE VI
|
|
|
|
|
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE OWNER/SERVICER
|
76
|
|
|
|
|
|
Section 6.1.
|
Authority.
|
76
|
|
Section 6.2.
|
Consents.
|
77
|
|
Section 6.3.
|
Litigation.
|
77
|
|
Section 6.4.
|
Broker Fees.
|
77
|
|
Section 6.5.
|
Ownership.
|
77
|
|
Section 6.6.
|
Ability to Perform.
|
77
|
|
Section 6.7.
|
Accuracy of Information.
|
77
|
|
|
|
|
|
ARTICLE VII
|
|
|
|
|
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SUBSERVICER
|
77
|
|
|
|
|
|
Section 7.1.
|
Good Standing.
|
78
|
|
Section 7.2.
|
Authority.
|
78
|
|
Section 7.3.
|
Consents.
|
78
|
|
Section 7.4.
|
Litigation.
|
78
|
|
Section 7.5.
|
Accuracy of Information.
|
78
|
|
Section 7.6.
|
Broker Fees.
|
79
|
|
Section 7.7.
|
MERS.
|
79
|
|
Section 7.8.
|
Ability to Perform.
|
79
|
|
Section 7.9.
|
HAMP.
|
79
|
|
Section 7.10.
|
Eligibility under the Servicing Agreements.
|
79
|
|
Section 7.11.
|
Advances.
|
79
|
|
Section 7.12.
|
[***]
|
79
|
|
|
|
|
|
ARTICLE VIII
|
|
|
|
|
INDEPENDENCE OF PARTIES; INDEMNIFICATION SURVIVAL
|
79
|
|
|
|
|
|
Section 8.1.
|
Independence of Parties.
|
79
|
|
Section 8.2.
|
Indemnification by the Subservicer.
|
80
|
|
Section 8.3.
|
Indemnification by the Owner/Servicer.
|
81
|
|
Section 8.4.
|
Indemnification Procedures.
|
82
|
|
Section 8.5.
|
Mitigation.
|
82
|
|
EXHIBIT A
|
Form of Acknowledgment Agreement
|
EXHIBIT B
|
MSR Portfolio Defense Addendum
|
EXHIBIT C-1
|
Termination Fee Schedule
|
EXHIBIT C-2
|
Termination Fee Calculation
|
EXHIBIT D
|
Exit Fee Percentage
|
EXHIBIT E-1
|
List of Servicing Reports
|
EXHIBIT E-2
|
Formatted Servicing Reports
|
EXHIBIT F
|
Service Level Agreements
|
EXHIBIT G
|
[***]
|
EXHIBIT H
|
Form of Monthly Financial Covenant Certification
|
EXHIBIT I-1
|
Critical Vendors
|
EXHIBIT I-2
|
Critical REO Disposition Vendors
|
EXHIBIT J
|
Performance Triggers
|
EXHIBIT K
|
Advance Policy
|
EXHIBIT L
|
MSRPA Schedule
|
EXHIBIT M
|
Form of Limited Power of Attorney
|
EXHIBIT N
|
Client Management Protocols
|
EXHIBIT O
|
Advance Facility Cooperation Costs
|
EXHIBIT P-1
|
Transfer Procedures (Primary Servicing)
|
EXHIBIT P-2
|
Transfer Procedures (Master Servicing)
|
EXHIBIT Q
|
Level of Disclosure Schedule
|
EXHIBIT R
|
Master Servicing Addendum
|
EXHIBIT S
|
Transfer Milestones
|
Schedule 1.1
|
Change of Control
|
Schedule 2.1(e)
|
Back-up Servicing Reports
|
Schedule 2.8(n)
|
Ramp-up Activities
|
Schedule 2.13(e)
|
Advance Dispute Resolution Mechanics
|
Schedule 7.11
|
Representations Regarding Advances
|
Schedule 8.1
|
Servicing Agreements with for convenience terminations
|
|
OCWEN LOAN SERVICING, LLC
By:
/s/ John P Kim
Name: John P Kim Title: Senior Vice President |
|
|
|
NEW RESIDENTIAL MORTGAGE LLC
By:
/s/ Matthew Gabriel Hoffman-Johnson
Name: Matthew Gabriel Hoffman-Johnson Title: Attorney-In-Fact, Agent and Authorized Signatory |
1.
|
With respect to the Mortgage Loans made subject to the Agreement hereby, the Transfer Date shall be [__________].
|
2.
|
With respect to the Mortgage Loans made subject to the Agreement hereby, the following terms shall apply:
|
|
NEW RESIDENTIAL MORTGAGE LLC,
|
|
as the Owner/Servicer
|
|
|
|
By:________________________________
|
|
Name: _____________________________
|
|
Title: ______________________________
|
|
OCWEN LOAN SERVICING, LLC,
|
|
as the Subservicer
|
|
|
|
By:________________________________
|
|
Name: _____________________________
|
|
Title: ______________________________
|
|
|
|
|
|
|
|
|
|
Final
|
|
|
|
|
|
5 Years Ending July, 2022
|
|
|
|
|
Period
|
Primary
|
Master
|
|
|
|
Jul-17
|
[***]
|
[***]
|
Aug-17
|
[***]
|
[***]
|
Sep-17
|
[***]
|
[***]
|
Oct-17
|
[***]
|
[***]
|
Nov-17
|
[***]
|
[***]
|
Dec-17
|
[***]
|
[***]
|
Jan-18
|
[***]
|
[***]
|
Feb-18
|
[***]
|
[***]
|
Mar-18
|
[***]
|
[***]
|
Apr-18
|
[***]
|
[***]
|
May-18
|
[***]
|
[***]
|
Jun-18
|
[***]
|
[***]
|
Jul-18
|
[***]
|
[***]
|
Aug-18
|
[***]
|
[***]
|
Sep-18
|
[***]
|
[***]
|
Oct-18
|
[***]
|
[***]
|
Nov-18
|
[***]
|
[***]
|
Dec-18
|
[***]
|
[***]
|
Jan-19
|
[***]
|
[***]
|
Feb-19
|
[***]
|
[***]
|
Mar-19
|
[***]
|
[***]
|
Apr-19
|
[***]
|
[***]
|
May-19
|
[***]
|
[***]
|
Jun-19
|
[***]
|
[***]
|
Jul-19
|
[***]
|
[***]
|
Aug-19
|
[***]
|
[***]
|
Sep-19
|
[***]
|
[***]
|
Oct-19
|
[***]
|
[***]
|
Nov-19
|
[***]
|
[***]
|
Dec-19
|
[***]
|
[***]
|
Jan-20
|
[***]
|
[***]
|
Feb-20
|
[***]
|
[***]
|
Mar-20
|
[***]
|
[***]
|
Apr-20
|
[***]
|
[***]
|
May-20
|
[***]
|
[***]
|
Jun-20
|
[***]
|
[***]
|
Jul-20
|
[***]
|
[***]
|
Aug-20
|
[***]
|
[***]
|
Sep-20
|
[***]
|
[***]
|
Oct-20
|
[***]
|
[***]
|
Nov-20
|
[***]
|
[***]
|
Dec-20
|
[***]
|
[***]
|
Jan-21
|
[***]
|
[***]
|
Feb-21
|
[***]
|
[***]
|
Mar-21
|
[***]
|
[***]
|
Apr-21
|
[***]
|
[***]
|
May-21
|
[***]
|
[***]
|
Jun-21
|
[***]
|
[***]
|
Jul-21
|
[***]
|
[***]
|
Aug-21
|
[***]
|
[***]
|
Sep-21
|
[***]
|
[***]
|
Oct-21
|
[***]
|
[***]
|
Nov-21
|
[***]
|
[***]
|
Dec-21
|
[***]
|
[***]
|
Jan-22
|
[***]
|
[***]
|
Feb-22
|
[***]
|
[***]
|
Mar-22
|
[***]
|
[***]
|
Apr-22
|
[***]
|
[***]
|
May-22
|
[***]
|
[***]
|
Jun-22
|
[***]
|
[***]
|
Jul-22
|
[***]
|
[***]
|
Aug-22
|
-
|
-
|
Period
|
Exit Fee Percentage
(basis points)
|
|
|
Jul-17
|
[***]
|
Aug-17
|
[***]
|
Sep-17
|
[***]
|
Oct-17
|
[***]
|
Nov-17
|
[***]
|
Dec-17
|
[***]
|
Jan-18
|
[***]
|
Feb-18
|
[***]
|
Mar-18
|
[***]
|
Apr-18
|
[***]
|
May-18
|
[***]
|
Jun-18
|
[***]
|
Jul-18
|
[***]
|
Aug-18
|
[***]
|
Sep-18
|
[***]
|
Oct-18
|
[***]
|
Nov-18
|
[***]
|
Dec-18
|
[***]
|
Jan-19
|
[***]
|
Feb-19
|
[***]
|
Mar-19
|
[***]
|
Apr-19
|
[***]
|
May-19
|
[***]
|
Jun-19
|
[***]
|
Jul-19
|
[***]
|
Aug-19
|
[***]
|
Sep-19
|
[***]
|
Oct-19
|
[***]
|
Nov-19
|
[***]
|
Dec-19
|
[***]
|
Jan-20
|
[***]
|
Feb-20
|
[***]
|
Mar-20
|
[***]
|
Apr-20
|
[***]
|
May-20
|
[***]
|
Jun-20
|
[***]
|
Jul-20
|
[***]
|
Aug-20
|
[***]
|
Sep-20
|
[***]
|
Oct-20
|
[***]
|
Nov-20
|
[***]
|
Dec-20
|
[***]
|
Jan-21
|
[***]
|
Feb-21
|
[***]
|
Mar-21
|
[***]
|
Apr-21
|
[***]
|
May-21
|
[***]
|
Jun-21
|
[***]
|
Jul-21
|
[***]
|
Aug-21
|
[***]
|
Sep-21
|
[***]
|
Oct-21
|
[***]
|
Nov-21
|
[***]
|
Dec-21
|
[***]
|
Jan-22
|
[***]
|
Feb-22
|
[***]
|
Mar-22
|
[***]
|
Apr-22
|
[***]
|
May-22
|
[***]
|
Jun-22
|
[***]
|
Jul-22
|
[***]
|
“Critical Report”
|
“Regulatory Report”
|
Name of Report
|
Report #
|
Updates #
|
Frequency
|
Implementation
|
Yes
|
No
|
Navigant Daily File Loan Level Extract
|
E-1
|
*
|
Daily (by noon ET)
|
84 Fields: 11/1/2017
Remaining Fields: TBD
|
Yes
|
No
|
Service Fee Reports ("Service Fee Daily Report")
|
E-2(a)
|
*
|
Daily (by noon ET)
|
Effective Date
|
Yes
|
No
|
Service Fee Reports ("NRZ MS Dynamics File")
|
E-2(b)
|
*
|
Daily (by noon ET)
|
Effective Date
|
Yes
|
No
|
Remittance File
|
E-3
|
*
|
Daily (by noon ET)
|
Effective Date
|
Yes
|
No
|
NRZ Primary MSR Data Tape
|
E-4
|
*
|
Monthly by 7th BU day
|
Effective Date
|
Yes
|
No
|
Reconciliation Report
|
E-5
|
*
|
As specified Section 4.1
|
Effective Date
|
Yes
|
No
|
Advance Reports
("MRA AF Daily File") |
E-6(a)
|
*
|
Daily (by noon ET)
|
Effective Date
|
Yes
|
No
|
Advance Reports
("NRZ NBB Loan Level File") |
E-6(b)
|
*
|
Monthly by 7th BU day
|
Effective Date
|
Yes
|
No
|
Portfolio Strat Reports
|
E-7
|
*
|
Monthly by 7th BU day.
|
10/1/2017
|
No
|
No
|
Mortgagor Litigation Report
|
E-8
|
*
|
Monthly (by 5th BU day)
|
10/1/2017
|
No
|
No
|
Corporate Matters Report
|
E-9
|
*
|
Monthly (by 15th)
|
10/1/2017
|
No
|
No
|
Performance Reports
|
E-10
|
*
|
Monthly (by 20th)
|
10/1/2017
|
No
|
No
|
Material Changes to Subservicer’s, Subservicer’s Parents or any of their respective Affiliates’ Policies and Procedures
|
*
|
E-A1
|
Monthly (by 20th)
|
11/1/2017
|
No
|
No
|
Basic Complaint Report
|
E-12(a)
|
*
|
Monthly (by 5th BU day)
|
10/1/2017
|
No
|
No
|
Escalated Complaint Case Data Report
|
E-12(b)
|
*
|
Monthly (by 5th BU day)
|
10/1/2007
|
No
|
No
|
Notice of Error and Request for Information Reports
|
E-13
|
*
|
Monthly (by 7th BU day)
|
10/1/2007
|
No
|
No
|
Portfolio Roll Rate Reports
|
E-14
|
*
|
Monthly (by 7th BU day)
|
10/1/2017
|
No
|
No
|
Monthly Financial Covenant Certification
|
*
|
E-A2
|
As provided in Section 2.22
|
Effective Date
|
“Critical Report”
|
“Regulatory Report”
|
Name of Report
|
Report #
|
Updates #
|
Frequency
|
Implementation
|
No
|
No
|
Advance Threshold Report
|
E-15
|
*
|
Monthly (by 20th)
|
11/1/2017
|
No
|
No
|
Back-up Servicer Files
|
E-16
|
*
|
As agreed to with the Back-up Servicer
|
As agreed to with the Back-up Servicer
|
No
|
No
|
MI Rescission Report
|
E-17
|
*
|
Monthly (by 15th)
|
10/1/2017
|
No
|
No
|
Land Title Adjustment Report
|
E-18
|
*
|
Monthly (by 7th BU day)
|
12/1/2017
|
No
|
No
|
Ancillary Income Report
|
E-19
|
*
|
Monthly (by 15th)
|
10/15/2017
|
No
|
No
|
Ocwen Daily Subservicing File
|
E-20
|
*
|
Daily (by noon ET)
|
9/1/2017
|
No
|
No
|
Ocwen Monthly Subservicing File
|
E-21
|
*
|
Monthly (by 7th BU day)
|
10/1/2017
|
No
|
No
|
Exhibit Q Information
|
*
|
E-A3
|
Quarterly (by 45th calendar day
|
Beginning with 3rd Quarter 2017 Updates
|
No
|
No
|
Provide Fidelity and Errors and Omissions Insurance
|
*
|
E-A4
|
Quarterly (by 45th calendar day
|
Beginning with 3rd Quarter 2017 Updates
|
No
|
No
|
Customer Service Statistics
|
E-22
|
*
|
Quarterly (by 45th calendar day
|
Beginning with 3rd Quarter 2017 Updates
|
No
|
No
|
Tracking Report regarding Privacy Notices
|
E-23
|
*
|
Quarterly (by 20th)
|
10/1/2017 (any privacy notices sent prior to 10/1/2017 will be captured once report has been implemented)
|
No
|
Yes
|
NYS VOSR Template
|
E-24
|
*
|
Quarterly (20 days after Quarter-End)
|
Beginning with 3rd Quarter 2017 Updates
|
No
|
Yes
|
MBFRF Template
|
E-25
|
*
|
Quarterly (20 days after Quarter-End)
|
Beginning with 3rd Quarter 2017 Updates
|
No
|
Yes
|
MCR Template
|
E-26
|
*
|
Quarterly (30 days after Quarter-End)
|
Beginning with 3rd Quarter 2017 Updates
|
No
|
Yes
|
Illinois Default and Foreclosure Template
|
E-27
|
*
|
Semi-Annual (by 20th calendar day of July)
|
Beginning with 2017 Fiscal Year End
|
No
|
Yes
|
California CRMLA Template
|
E-28
|
*
|
Annual (by 45th calendar day after fiscal year-end)
|
Beginning with 2017 Fiscal Year End
|
No
|
Yes
|
Illinois Report of Servicing Activity Template
|
E-29
|
*
|
Annual (by 45th calendar day after fiscal year-end)
|
Beginning with 2017 Fiscal Year End
|
No
|
Yes
|
Michigan Mortgage Brokers, Lenders and Servicers Template
|
E-30
|
*
|
Annual (by 45th calendar day after fiscal year-end)
|
Beginning with 2017 Fiscal Year End
|
“Critical Report”
|
“Regulatory Report”
|
Name of Report
|
Report #
|
Updates #
|
Frequency
|
Implementation
|
No
|
Yes
|
Missouri Report of Residential Mortgage Loan Broker Activity Template
|
E-31
|
*
|
Annual (by 45th calendar day after fiscal year-end)
|
Beginning with 2017 Fiscal Year End
|
No
|
Yes
|
Washington Consumer Loan Assessment Report Template
|
E-32
|
*
|
Annual (by 45th calendar day after fiscal year-end)
|
Beginning with 2017 Fiscal Year End
|
No
|
Yes
|
Washington Consumer Loan Assessment Report Template
|
E-33
|
*
|
Annual (by 45th calendar day after fiscal year-end)
|
Beginning with 2017 Fiscal Year End
|
No
|
No
|
Regulation AB Compliance Report
|
*
|
E-A5
|
As defined in Agreement
|
Beginning with 2017 Fiscal Year End
|
No
|
No
|
Uniform Single Attestation Program Compliance Report
|
*
|
|
As defined in Agreement
|
Beginning with 2017 Fiscal Year End
|
No
|
No
|
SOC 1 Type II of Critical Vendors of Subservicer (or such other Type as may be reasonably satisfactory to Owner/Servicer)
|
*
|
E-A6
|
Within 30 days of receipt, but no later than January 31
|
Beginning with 2017 Fiscal Year End
|
No
|
No
|
SOC 1 Type II of Subservicer covering a minimum period of nine (9) months
|
*
|
E-A7
|
Within 30 days of receipt, but no later than January 31
|
Beginning with 2017 Fiscal Year End
|
No
|
No
|
SOC 1 Type II Bridge Letter of Subservicer covering a maximum period of three (3) months
|
*
|
E-A8
|
No later than January 31
|
Beginning with 2017 Fiscal Year End
|
•
|
As a reference population, “
Total Servicing Portfolio
” means, for any measurement period, all mortgage loans serviced by Subservicer, other than (1) mortgage loans with respect to which the Subservicer is solely performing master servicing functions, (2) reverse mortgage loans and (3) commercial mortgage loans. “
NRM Portfolio
” means, as of any date of determination, all mortgage loans serviced by Subservicer under any agreement between the Subservicer and the Owner/Servicer or any of its Affiliates, excluding (1) mortgage loans with respect to which the Subservicer is solely performing master servicing functions, (2) reverse mortgage loans and (3) commercial mortgage loans.
|
•
|
The penalty amount is the baseline penalty assessed in case the penalty threshold is exceeded. This baseline value is subject to a multiplier of either two or three, depending on whether the double penalty threshold or the triple penalty threshold, respectively, is exceeded.
|
•
|
In the event of a major computer software system change to the Subservicer's primary servicing system, the parties will agree to waive the Excessive SLA Failure Trigger Event and the Excessive SLA Failure Trigger for a period of six (6) calendar months from the date that such system change was implemented; provided that the Subservicer provided at least ninety (90) days' notice to the Owner/Servicer of such system change. The same applies to all relevant SLAs in case of major changes to a particular area of Subservicer’s servicing (for example, foreclosure activities).
|
•
|
Penalties can only be assessed for a particular frequency period if the penalty threshold was exceeded both in that frequency period and in the prior frequency period.
|
•
|
Penalties for SLAs will be waived by mutual agreement of the parties on the basis of major events beyond Subservicer’s control that could be reasonably expected to have a material impact on the NRM Portfolio, conflicts or issues with vendors selected by Owner/Servicer, regulatory changes, force majeure events, or events affecting the mortgage servicing industry as a whole and not specific to Subservicer. In these cases, the specific penalty and incentive thresholds and amounts may also be recalibrated on an ongoing basis or for a specific period of time upon mutual agreement. In addition, recalibrations of this sort will be mutually agreed to in case of changes to measurement methodologies and regulatory or investor requirements or requests.
|
•
|
To the extent the parties do not mutually agree on the basis of any event or conditions giving rise to a waiver of all penalties, accelerated penalties or a recalibration of the penalty thresholds, the party requesting such waiver or recalibration shall provide a written justification for such request, with sufficient detail to permit the other party to evaluate and respond. If such party continues to dispute the basis of the requested waiver or recalibration, within a reasonable period of time not to exceed thirty (30) days, the parties shall submit such matter to a dispute resolution process (other than litigation). Upon resolution, the successful party shall be entitled to recover as part of its claim its reasonable, out of pocket costs and expenses, including reasonable out-of-pocket attorneys’ fees, incurred in prosecuting such claim. To the extent any unpaid amounts are determined to be payable, such amounts will be paid at an annual rate of five percent (5%) over the Prime Rate.
|
•
|
For any SLA, if the total number of loans in the applicable population which serves as the denominator in the calculation falls below 100 for any month, (i) that month shall be excluded from monthly SLA calculations and (ii) such measurement period will increase from monthly to quarterly (or quarterly to annually, as applicable) so that there are 100 measurements.
|
•
|
For each SLA, performance statistics will be calculated on the basis of reference data with a typical trailing period of one month but no more than two months, except in cases where the SLA metric indicates a longer moving average calculation.
|
•
|
The maximum net penalty or incentive amount for all applicable SLAs in a given month is capped at 15% of the monthly base subservicing fee that Subservicer receives under the Subservicing Agreement, except during the 6 month period immediately following a major system change in which the maximum net penalty or incentive amount for all applicable SLAs in a given month for such 6-month period is then capped at 25% of the monthly base subservicing fee that Subservicer receives under the Subservicing Agreement.
|
•
|
The SLA reporting will begin with the data collected during the measurement period beginning on October 1, 2017, and the first reports of SLA data will be provided in December 2017;
provided
that, to the extent sufficient data is available to calculate metrics or estimates, Subservicer shall provide interim reporting during the period prior to December 2017 for such SLAs.
|
•
|
In addition to the Subservicer's other reporting obligations set forth in Section 2.8 of the Agreement, Subservicer will report on SLA metrics and calculations in a format reasonably requested by the Owner/Servicer, and as described below. Subservicer will report these calculations within the first five business days of the month, and any exceptions to the timeline are to be reported as soon as possible, with the applicable reports delivered no later than the tenth business of the month.
|
o
|
With respect to monthly SLAs, on a monthly basis, taking into account a one- or two-month trailing period, the Subservicer will provide the Owner/Servicer a report setting forth the following:
|
§
|
the monthly performance metric for each monthly SLA and the monthly data that was used to calculate this metric or (i) notification of SLAs requiring a two-month trailing period and to be included on the following month’s report or (ii) reclassification of any monthly SLA as a quarterly SLA due to the decreased volume of the applicable population;
|
§
|
any complete waivers or waivers of double or triple penalties for any SLAs;
|
§
|
the applicable penalty or incentive rates for each SLA; and
|
§
|
the penalty or incentive dollar amounts assessed for each SLA.
|
o
|
With respect to quarterly SLAs, in addition to monthly reports on the estimated performance metrics (to the extent available), on a quarterly basis, taking into account a one- or two-month trailing period, the Subservicer will provide the Owner/Servicer with a report setting forth the following:
|
§
|
the quarterly performance metric for each SLA and the relevant monthly data that was used to calculate this metric or (i) notification of SLAs requiring a two-month trailing period and to be included on the following month’s report or (ii) reclassification of any quarterly SLA as an annual SLA due to the decreased volume of the applicable population;
|
§
|
any complete waivers or waivers of double or triple penalties for any SLAs for any month in the applicable quarter;
|
§
|
the penalty or incentive rates for each SLA in each month of the applicable quarter;
|
§
|
the penalty or incentive dollar amounts assessed for each SLA in each month of the applicable quarter; and
|
§
|
the total penalty or dollar amount assessed for the applicable quarter.
|
o
|
Reporting on annual SLAs (if applicable due to volume considerations) will be similar to the reporting for quarterly SLAs, with monthly estimates of performance metrics provided on a monthly basis (to the extent available) and definitive reports provided on an annual basis.
|
•
|
As a reference population, “
NRM Portfolio
” means, for any measurement period, all mortgage loans with respect to which the Subservicer is performing master servicing functions under any agreement between the Subservicer and the Owner/Servicer or any of its Affiliates. “
All Primary Servicers > 1,000 Loans
” means, for any measurement period, all primary servicers that are servicing more than 1,000 loans in the NRM Portfolio.
|
•
|
All penalties and incentives for Master Servicing SLAs are calculated as a percentage of the monthly base subservicing fee that Subservicer receives for performing Master Servicing functions under the Subservicing Agreement (the “
Monthly Sub-Master Servicing Fee
”).
|
•
|
For each quarterly Master Servicing SLA, the Subservicer will assess performance during each of the three months of a given calendar quarter (with a trailing period of one month) and, when such performance assessments have been made for all three months of the quarter, the Subservicer will calculate the average of the monthly performance metrics, which will be the “quarterly performance metric” for such Master Servicing SLA.
|
•
|
Penalty and incentive rates for each quarterly Master Servicing SLA will be assessed on a monthly basis by comparing the quarterly performance metric for the calendar quarter in which that month occurs with each of the penalty, exception and incentive thresholds that are applicable in that month.
|
•
|
With respect to each quarterly Master Servicing SLA, the dollar amount of the penalty or incentive for each month is the product of the Monthly Sub-Master Servicing Fee and the penalty or incentive rate for that month. The dollar amount of the penalty or incentive for each calendar quarter is the sum of the penalties or incentives for each of the three months in that calendar quarter.
|
•
|
Annual Master Servicing SLAs will be assessed in an analogous manner to quarterly Master Servicing SLAs, except that the adjustments to the monthly performance metric will be based on annual rather than quarterly adjustments.
|
•
|
Penalties can only be assessed for a particular frequency period if the penalty threshold was exceeded both in that frequency period and in the prior frequency period.
|
•
|
In the case of any system conversion relating to Master Servicing core systems (SBO2000, DDS, DMS), penalties will be assessed on the basis of the exception threshold instead of the penalty threshold. In addition, (a) for any Master Servicing SLA in the “Securities Administration” category, the exception threshold will apply in case either (i) the number of cleanup calls involving loans in the reference population in a given month exceeds twenty (20) or (ii) the number of new deals involving loans in the reference population in a given month is greater than or equal to five (5); and (b) for any Master Servicing SLA in the “Servicer Management” or “Loan Operations” categories, the exception threshold will apply in case of the addition of three (3) or more new primary servicers in a given month. Exception thresholds will apply for three (3) consecutive months including the month during which the exception event occurs.
|
•
|
Penalties for Master Servicing SLAs may be waived by the parties on the basis of major events beyond Ocwen’s control, conflicts or issues with vendors selected by NRM, regulatory changes, force majeure events, or events affecting the mortgage servicing industry as a whole and not specific to Ocwen. In these cases, the specific penalty and incentive thresholds and rates may also be recalibrated on an ongoing basis or for a specific period of time. In addition, recalibrations of this sort will be considered in case of changes to measurement methodologies and regulatory or investor requirements or requests.
|
•
|
Any newly boarded loans will not be included in the referenced population for the purpose of calculations for a period of time agreed to by the parties, after which period the thresholds may be recalibrated by mutual agreement of the parties. In addition, any loans that are impacted by errors or delays caused by prior servicers will be excluded from the referenced population.
|
•
|
If the total number of securitization trusts in the NRM Portfolio falls below 400, all Master Servicing SLAs will be recalibrated.
|
•
|
To the extent the parties do not mutually agree on the basis of any event or conditions giving rise to a waiver of all penalties, accelerated penalties or a recalibration of the penalty thresholds, the party requesting such waiver or recalibration shall provide a written justification for such request, with sufficient detail to permit the other party to evaluate and respond. If such party continues to dispute the basis of the requested waiver or recalibration, within a reasonable period of time not to exceed thirty (30) days, the parties shall submit such matter to a dispute resolution process (other than litigation). Upon resolution, the successful party shall be entitled to recover as part of its claim its reasonable, out of pocket costs and expenses, including reasonable out-of-pocket attorneys’ fees, incurred in prosecuting such claim. To the extent any unpaid amounts are determined to be payable, such amounts will be paid at an annual rate of five percent (5%) over the Prime Rate.
|
•
|
The Master Servicing SLA reporting will begin with the data collected during the measurement period beginning on the later of (i) October 1, 2017 and (ii) the first
|
•
|
In addition to reports on monthly estimates for Master Servicing SLA performance metrics, within the first five business days of the second month of each calendar quarter, Subservicer will provide Owner/Servicer with a report setting forth:
|
o
|
the quarterly performance metric for each of the Master Servicing SLAs from the prior calendar quarter and all monthly data that was used in the calculation of this metric;
|
o
|
any exception events that occurred in the prior calendar quarter and, for each Master Servicing SLA and each month of the prior calendar quarter, whether the exception threshold applied in that month;
|
o
|
the penalty or incentive rates for each Master Servicing SLA in each month of the prior calendar quarter;
|
o
|
the penalty or incentive dollar amounts assessed for each Master Servicing SLA in each month of the prior calendar quarter; and
|
o
|
the total penalty or incentive dollar amounts assessed for the prior calendar quarter.
|
•
|
Reporting on annual Master Servicing SLAs will be similar to the reporting for quarterly SLAs, with monthly estimates of performance metrics provided on a monthly basis and definitive reports provided on an annual basis.
|
|
[___________________]
|
|
|
|
By: ___________________________,
|
|
|
|
|
|
_______________________________________
|
|
Name:
|
|
Title:
|
|
|
|
|
|
|
|
|
Vendor Name
|
Vendor Tier Final
|
Description
|
Offshore
|
[***]
|
Tier 2.0
|
Writes custom software code [***]
|
No
|
[***]
|
Tier 2.0
|
Providing image extraction services
|
No
|
[***]
|
Tier 2.0
|
Used to have [***] signed electronically
|
No
|
[***]
|
Tier 2.0
|
Optional [***] Product
|
No
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 1.0
|
Print and Mail Services [***]
|
No
|
[***]
|
Tier 1.0
|
[***]
|
Yes
|
[***]
|
Tier 1.0
|
Collections [***]
|
Yes
|
[***]
|
Tier 1.0
|
Default software solutions for lenders, servicers, real estate agents and other mortgage and real estate industry professionals.
|
Yes
|
[***]
|
Tier 1.0
|
Title/Loss Mitigation [***]
|
Yes
|
[***]
|
Tier 1.0
|
[***] Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 1.0
|
Property Preservation & Inspection [***]
|
Yes
|
[***]
|
Tier 1.0
|
[***] Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 1.0
|
[***] Short Sale Deed in Lieu
|
Yes
|
[***]
|
Tier 1.0
|
Loss Mitigation Title
|
Yes
|
[***]
|
Tier 1.0
|
Loss Mitigation Services
|
Yes
|
[***]
|
Tier 1.0
|
Valuations
|
Yes
|
[***]
|
Tier 1.0
|
Foreclosure, Bankruptcy & Closing or Trustee
|
No
|
[***]
|
Tier 1.0
|
Servicing platform
|
Yes
|
[***]
|
Tier 2.0
|
Document and title policy retrieval
|
No
|
Vendor Name
|
Vendor Tier Final
|
Description
|
Offshore
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 1.1
|
Software/call center. Acquires new hardware, software and/or maintenance and support.
|
No
|
[***]
|
Tier 1.0
|
[***] Flood, and Wind insurance vendor as well as Loss Draft claim processing
|
Yes
|
[***]
|
Tier 2.0
|
Provides Optional [***] products to Ocwen borrowers
|
No
|
[***]
|
Tier 2.0
|
[***]
|
Yes
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 2.0
|
[***] Communications and Contact Center Solution.
|
No
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 2.0
|
Online Credit Reports
|
No
|
Center for NYC Neighborhoods
|
Tier 2.1
|
Community Outreach
|
No
|
Citizen Action of New Jersey
|
Tier 2.1
|
Community Outreach
|
No
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 1.1
|
[***] QA Review Process
|
No
|
[***]
|
Tier 2.0
|
Provider of Asset Disposal Services
|
No
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
Vendor Name
|
Vendor Tier Final
|
Description
|
Offshore
|
[***]
|
Tier 1.0
|
Document Imaging and repository services
|
Yes
|
[***]
|
Tier 1.0
|
Flood insurance determinations & tracking [***]
[***] flood zone monitoring
|
Yes
|
[***]
|
Tier 1.0
|
Review of Real Estate Taxes Owed
|
Yes
|
[***]
|
Tier 1.0
|
[***] AVM
|
Yes
|
[***]
|
Tier 2.2
|
[***]
Document Custodians
|
Yes
|
[***]
|
Tier 2.0
|
[***] claim recovery services
|
No
|
[***]
|
Tier 2.1
|
Nonprofit organization offering borrower outreach and housing counseling services.
|
No
|
[***]
|
Tier 2.0
|
[***] Credit Reports to Borrowers
|
No
|
[***]
|
Tier 2.0
|
IT Asset Recovery and disposal services
|
No
|
[***]
|
Tier 2.0
|
[***]
|
No
|
[***]
|
Tier 1.1
|
Services related to Deed in Lieu [***]
|
Yes
|
[***]
|
Tier 2.0
|
[***]
|
No
|
[***]
|
Tier 1.1
|
Verbal translation services
|
No
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
H.E.L.P. Community Development Corporation
|
Tier 2.1
|
Community Outreach
|
No
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 1.0
|
Collections/Recovery
|
No
|
HomeFree USA
|
Tier 2.1
|
Community Outreach
|
No
|
HomeFree USA
|
Tier 2.1
|
Community Outreach
|
No
|
Homeownership Preservation Foundation
|
Tier 1.1
|
Community Outreach
|
No
|
Hope Loan Port Inc
|
Tier 2.0
|
Portal for modification submission
|
No
|
Vendor Name
|
Vendor Tier Final
|
Description
|
Offshore
|
[***]
|
Tier 2.0
|
Platform that manages the borrower complaints
|
Yes
|
[***]
|
Tier 1.1
|
Lien Release, Assignment preparation and recording services
|
Yes
|
[***]
|
Tier 2.0
|
Software license agreement for MortgageRx cloud-based software. MortgageRx will be used by Ocwen Investor Services
department for QA process compliance tests. |
Yes
|
[***]
|
Tier 2.0
|
Document storage and shredding
|
Yes
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 2.0
|
Document Storage
|
No
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 1.0
|
Collections/Recovery
|
No
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 2.0
|
IT consulting service [***]
|
No
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 2.2
|
Maintains database [***]
|
No
|
[***]
|
Tier 2.0
|
[***] services and support
|
No
|
Vendor Name
|
Vendor Tier Final
|
Description
|
Offshore
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 1.0
|
Electronic payment provider
|
Yes
|
National Community Reinvestment Coalition (NCRC)
|
Tier 2.1
|
Community Outreach
|
No
|
National Council of LaRaza (NCRL)
|
Tier 2.1
|
Community Outreach
|
No
|
[***]
|
Tier 2.2
|
Mortgage Insurance company
|
No
|
Neighborhood Housing Services of Chicago Inc
|
Tier 2.1
|
Community Outreach
|
No
|
Neighborhood Housing Services of Greater Cleveland
|
Tier 2.1
|
Community Outreach
|
No
|
Neighborhood Housing Services of New York City Inc
|
Tier 2.1
|
Community Outreach
|
No
|
[***]
|
Tier 1.1
|
[***] Notary Services
|
No
|
[***]
|
Tier 2.0
|
[***] updating consumer data and processing [***]
|
Yes
|
[***]
|
Tier 1.0
|
Electronic payment provider
[***]
|
No
|
[***]
|
Tier 1.1
|
Accounts Payable (AP) platform
|
Yes
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 2.2
|
[***]
|
No
|
[***]
|
Tier 1.0
|
Valuation, [***]
|
No
|
[***]
|
Tier 1.1
|
Provides Security Services [***]
|
Yes
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 1.1
|
[***] data center, [***]
|
No
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 1.0
|
Collections/Recovery
|
No
|
[***]
|
Tier 2.2
|
Document Custodian
|
No
|
Vendor Name
|
Vendor Tier Final
|
Description
|
Offshore
|
[***]
|
Tier 2.0
|
[***] computer-assisted legal research.
|
No
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
Sacramento Neighborhood Housing Services, Inc dba NeighborWorks HomeOwnership Center Sacramento Region
|
Tier 2.1
|
Community Outreach
|
No
|
[***]
|
Tier 1.0
|
Property Preservation and Inspection services [***]
|
No
|
[***]
|
Tier 2.0
|
Document redaction services [***]
|
No
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 1.1
|
Recording Services
|
No
|
[***]
|
Tier 2.0
|
Research Websites [***]
|
No
|
[***]
|
Tier 2.0
|
Provides Broker Price Opinion Valuation Services
|
No
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 1.1
|
|
No
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
Vendor Name
|
Vendor Tier Final
|
Description
|
Offshore
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
Springboard Non Profit Consumer Credit Management, Inc.
|
Tier 2.1
|
Community Outreach
|
No
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 1.0
|
[***] print and mailing services
|
No
|
[***]
|
Tier 2.2
|
Document Custodian
|
No
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 2.0
|
Credit Bureau. [***]
|
No
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 2.2
|
Document Custodian
|
No
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 1.0
|
Print and Mailing services
|
No
|
[***]
|
Tier 1.0
|
Printing and Mailing Letters - [***]
|
No
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 1.0
|
[***]
|
No
|
[***]
|
Tier 1.0
|
Lockbox
[***] |
No
|
[***]
|
Tier 1.0
|
Document Custodian
|
No
|
[***]
|
Tier 1.0
|
Electronic payment provider
|
Yes
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 2.2
|
Document Custodian
|
No
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
[***]
|
Tier 1.0
|
[***]
|
No
|
[***]
|
Tier 1.1
|
Foreclosure, Bankruptcy & Closing or Trustee services
|
No
|
Vendor Name
|
Vendor Tier Final
|
Description
|
Offshore
|
[***]
|
Tier 1.0
|
Real Estate Owned (REO) Management
|
Yes
|
[***]
|
Tier 2.0
|
REO Property Manager
|
No
|
[***]
|
Tier 2.0
|
REO management services
|
No
|
1.
|
the Quarterly Average Delinquency Ratio exceeds [***] (the “
Delinquency Trigger Event
”);
|
2.
|
the Quarterly Average Foreclosure Sale Ratio falls below [***] (the “
Foreclosure Sale Trigger
”) for two consecutive Quarters (the “
Foreclosure Sale Trigger Event
”);
|
3.
|
the Quarterly Average Workout Ratio falls below [***] (the “
Workout Trigger
”) for two consecutive Quarters (the “
Workout Trigger Event
”); and
|
4.
|
the Net SLA Monthly Penalty Amount exceeds [***] of the Monthly Fee Amount for such month (the “
Excessive SLA Failure Trigger
”) in every month for two consecutive Quarters (the “
Excessive SLA Failure Trigger Event
”).
|
a)
|
With respect to the Delinquency Trigger, the Foreclosure Sale Trigger and the Workout Trigger, (i) on a monthly basis, when available, but in no case later than ten Business Days after the end of the following month, the prior month’s Delinquency Ratio, Foreclosure Sale Ratio and Workout Ratio, together with the relevant data used to calculate such ratios and (ii) on a quarterly basis, when available, but in no case later than ten Business Days after the end of the first month following the applicable quarter, the Quarterly Average Delinquency Ratio, the Quarterly Average Foreclosure Sale Ratio and the Quarterly Average Workout Ratio and a comparison of such ratios to the Delinquency Trigger, the Foreclosure Sale Trigger and the Workout Trigger, respectively.
|
b)
|
With respect to the Excessive SLA Failure Trigger, (i) on a monthly basis, when available, but in no case later than fifteen Business Days after the end of the following month, the Net SLA Monthly Penalty Amount for such month, which report shall include (i) a comparison to the Excessive SLA Failure Trigger, (ii) an identification of the applicable SLAs used to calculate the Net SLA Monthly Penalty Amount, (iii) any applicable Penalty Amount or Incentive Amount used to calculate the Net SLA Monthly Penalty Amount and (iv) any other relevant information (in addition to the previously delivered monthly and quarterly reports under
Exhibit F
to the Agreement).
|
MSRPA
|
(parties to add list of MSRPA provisions)
|
MSRPA
|
(parties to add MSRPA description)
|
MSRPA
|
(parties to add MSRPA description)
|
1.
|
Foreclosing delinquent Mortgage Loans or discontinuing such foreclosure proceedings, including, but not limited to, the execution of notices of default, notices of sale, assignments of bids, and assignments of deficiency judgments, and appearing in the prosecuting bankruptcy proceedings;
|
2.
|
Selling, transferring or otherwise disposing of real property that is or becomes subject to the Subservicing Agreement, whether acquired through foreclosure or otherwise, including, but not limited to, executing all contracts, agreements, deeds, assignments or other instruments necessary to effect such sale, transfer or disposition, and receiving proceeds and endorsing checks made payable to the order of the Company from such proceedings;
|
3.
|
Preparing, executing, and delivering satisfactions, cancellations, discharges or full or partial releases of lien, subordination agreements, modification agreements, assumption agreements, substitutions of trustees under deeds of trust, and UCC-3 Continuation Statements;
|
4.
|
Endorsing promissory notes and executing assignments of mortgages, deeds of trust, deeds to secure debt, and other security instruments securing said promissory notes in connection with Mortgage Loans for which Ocwen has received full payment of all outstanding amounts due on behalf of the Company;
|
5.
|
Endorsing insurance proceeds checks and mortgage payment checks to the order of the Company; and
|
6.
|
Any and all such other acts of any kind and nature whatsoever that are necessary and prudent to service the Mortgage Loans, in each case, in accordance with the terms and conditions in the Subservicing Agreement.
|
By:
|
|
|
|
Name:
|
|
|
|
Title:
|
|
1.
|
[***] for amendments with no certificates or opinions
|
2.
|
[***] for new facilities or amendments with opinions
|
3.
|
[***] for public deals (which would include opinion and disclosure related work)
|
(a)
|
No SBO Servicer shall be considered a "Vendor" as defined in Article I of the Agreement; provided that nothing herein shall limit or restrict any monitoring, oversight, audit rights or other obligations, in each case, the Subservicer has, on behalf of the Owner/Servicer as the owner of the Master Servicing Rights, under the applicable Servicing Agreement, the applicable Client Contract, and the applicable Servicer Guide.
|
(b)
|
Section 2.1(f) shall not apply.
|
(c)
|
Section 2.1(g) shall not apply.
|
(d)
|
Section 2.2(a) shall not apply unless required by Applicable Requirements.
|
(e)
|
Section 2.2(b) shall not apply unless required by Applicable Requirements.
|
(f)
|
Section 2.5 shall not apply to (i) Escrow Accounts unless required by Applicable Requirements and (ii) notwithstanding anything set forth in clause (i), any Custodial Accounts or Escrow Accounts held by an SBO Servicer.
|
(g)
|
Section 2.6(c) shall not apply unless required by Applicable Requirements.
|
(h)
|
Section 2.6(d) shall apply to (i) records relating to Master Servicing and (ii) records relating to the Subservicing to the extent required by Applicable Requirements.
|
(i)
|
Section 2.6(e) shall not apply unless required by Applicable Requirements.
|
(j)
|
Section 2.8(a) and (b) shall only apply with respect reports and remittances the Subservicer makes to certificateholders as part of the Master Servicing obligations pursuant to Applicable Requirements.
|
(k)
|
Sections 2.8(c) and (d) shall only apply with respect to reports relating to Master Servicing and any such report shall be separate and may differ from the reports provided by Subservicer in its capacity as subservicer. Notwithstanding the forgoing, the Subservicer shall provide access, either through an online portal or FTP, to the Owner/Servicer, upon reasonable request, for any other report(s), data or information that the Subservicer receives in its capacity as Master Servicer which the Subservicer is not otherwise required to deliver to the Owner/Servicer hereunder.
|
(l)
|
Section 2.8(e) shall only apply with respect to reports related to (i) litigation for which the Subservicer (in its capacity as Master Servicer) is directly managing and (ii) litigation that names Subservicer as a party as Master Servicer on behalf of Owner/Servicer and any such
|
(m)
|
Section 2.9 shall not apply.
|
(n)
|
Section 2.15 shall not apply.
|
(o)
|
Section 2.17 shall not apply.
|
(p)
|
Section 2.20 shall not apply unless required by Applicable Requirements.
|
(q)
|
Section 2.21 shall not apply unless required by Applicable Requirements.
|
(r)
|
Section 3.1 shall not apply.
|
(s)
|
Section 3.2 shall not apply.
|
(t)
|
Section 3.3 shall not apply.
|
(u)
|
Section 3.4 shall not apply.
|
(v)
|
Articles VI and VII shall only apply with respect to the Master Servicing and Master Servicing Rights and shall not extend to SBO Servicers.
|
(w)
|
Article VIII shall only apply with respect to the Master Servicing and Master Servicing Rights and shall not extend to SBO Servicers; provided that nothing herein shall limit, restrict or qualify the Owner/Servicer's rights to indemnification and remedies (as owner of the Master Servicing Rights) that are set forth in the applicable Servicing Agreement, the applicable Client Contract, and/or the applicable Servicer Guide.
|
(x)
|
For the avoidance of doubt the following Exhibits shall not apply: B, C, D, P-1.
|
(y)
|
The Service Level Agreements with respect to Master Servicing shall only be those specifically identified as “Master Servicing SLAs”.
|
•
|
Each Advance is an Eligible Advance and arising under a Servicing Agreement that is an Eligible Servicing Agreement and has been fully funded by the Subservicer using its own funds and/or Amounts Held for Future Distribution (to the extent permitted under the related Eligible Servicing Agreement) and/or amounts received by the Subservicer from Owner/Servicer under this Agreement; provided, that notwithstanding the foregoing Subservicer makes no representation or warranty as to the status of title or any interest of a depositor, an issuer or an indenture trustee under a Servicing Agreement to or in any Advance.
|
•
|
The Owner/Servicer is entitled to reimbursement for each Advance made pursuant the related Eligible Servicing Agreement.
|
•
|
The Subservicer has no reason to believe that the related Advance will not be reimbursed or paid in full.
|
•
|
Such Advance has not been identified by the Subservicer or reported to the Subservicer by the related trustee or Investor as having resulted from fraud perpetrated by any Person.
|
•
|
Such Advance is not secured by real property and is not evidenced by an instrument.
|
•
|
Such Advance is not due from the United States of America or any state or from any agency, department or instrumentality of the United States of America or any state thereof.
|
|
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
(i)
|
With respect to RHSS, Inc., (i) any transaction or event (or series of related transactions or events) as a result of which the Corporate Parent ceases to own, directly or indirectly, one
|
(ii)
|
With respect to RHSS CT, circumstances under which RHSS CT shall cease to be Controlled, directly or indirectly, by the Corporate Parent.
|
(iii)
|
With respect to the Corporate Parent, means (i) any “person” or “group” (for purposes of this definition, as such terms are used in Sections 13(d) and 14(d) of the Exchange Act as in effect on the date hereof) shall have obtained the power (whether or not exercised) to elect a majority of the board of directors of the Corporate Parent; (ii) any person or group is or shall become the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act as in effect on the date hereof), directly or indirectly, of forty-five percent (45%) or more (on a fully diluted basis) of the combined voting power of the Corporate Parent’s outstanding capital stock; or (iii) the current members of the Corporate Parent’s board of directors as of the date hereof (the “
Incumbent Board
”) shall cease to represent a majority of the directors of the Corporate Parent’s board of directors (provided that any person becoming a director subsequent to the date hereof, whose election, or nomination for election by the Corporate Parent’s shareholders, was approved by a vote of a majority of the directors constituting the Incumbent Board shall be considered as though such person were a member of the Incumbent Board).
|
(i)
|
Within ten (10) calendar days after the later of (1) NRZ Brokerage’s written notice to RHSS that the Acquisition Date for the related Covered Portfolio has occurred, or (2) the effective date of an agreement between Ocwen (or such other owner of any Ocwen Portfolio or applicable Affiliate thereof) and RHSS and/or one or more of its Affiliates whereby Ocwen (or such other owner of any Ocwen Portfolio or applicable Affiliate thereof) has authorized RHSS to de-list Existing REO Properties, RHSS shall de-list all Existing REO Properties that, as of the Acquisition Date for the applicable Portfolio, (i) are not in an active Auction Cycle, (ii) are not under an active Sales Contract, and (iii) do not have at least one pending Acceptable Offer.
|
(ii)
|
With respect to Existing REO Properties that are in an active Auction Cycle as of the Acquisition Date, if the property is not under active Sale Contract within thirty calendar days of the close of the Auction Cycle, RHSS shall de-list the property within three business days thereafter, and RHSS shall conduct itself in accordance with the standard practices and procedures in place prior to the Acquisition Date regarding the processing of Acceptable Offers and Sales Contracts. If the REO Property goes under active Sales Contract within thirty calendar days of the close of the Auction Cycle but
|
(iii)
|
With respect to Existing REO Properties that have at least one pending Acceptable Offer as of the Acquisition Date, if the property is not under active Sales Contract within thirty days of the Acquisition Date, RHSS shall de-list the property within three business days thereafter, and RHSS shall conduct itself in accordance with the standard practices and procedures in place prior to the Acquisition Date regarding the processing of Acceptable Offers and Sales Contracts. If the REO Property goes under active Sales Contract within 30 calendar days of the Acquisition Date but the contract is subsequently cancelled, RHSS shall de-list the REO Property within three (3) calendar days after the cancellation of the Sales Contract.
|
(iv)
|
With respect to Existing REO Properties that are under an active Sales Contract as of the Acquisition Date but which Sales Contracts are subsequently cancelled, RHSS shall de-list such REO Properties within three (3) calendar days after the cancellation of the Sales Contract.
|
(i)
|
NRZ Brokerage shall have the right, but not the obligation, to provide a NRZ Brokerage Directed Methodology to RHSS to apply to an individual Subject REO Referral or multiple Subject REO Referrals, and RHSS shall comply with the NRZ Brokerage Directed Methodology within two business days of NRZ’s Brokerage’s direction.
|
(ii)
|
Intentionally omitted.
|
(iii)
|
As of the date hereof, the Parties agree that the pricing methodology to be used in setting the property reserve prices shall be as set forth in
Exhibit 6
hereto, which Exhibit shall be deemed updated in the event NRZ Brokerage requests, and RHSS agrees in writing to, a different methodology in accordance with this
Section 3(f)
.
|
(iv)
|
If a NRZ Brokerage Directed Methodology is implemented, the Performance Scorecard and the Service Level Metrics shall not apply to
|
(i)
|
With respect to Subject REO Referrals that are from the HLSS Portfolio or the Ocwen Portfolio, in each case other than Existing REO Referrals, [***] REO Properties, or [***] REO Properties, which referral occurs prior to the date that is the earlier of (1) [***] months after the Acquisition Date related to the MSRs for the Portfolio containing the loan that was previously secured by such REO Property, and (2) [***] months from the date of this Agreement:
|
(ii)
|
With respect to Subject REO Referrals, in each case other than Existing REO Referrals, [***] REO Properties, or [***] REO Properties, that are from (1) the HLSS Portfolio or the Ocwen Portfolio, which referral occurs on or after the date which is the earlier of (a) [***] months after the Acquisition Date related to the MSRs for the Portfolio containing the loan that was previously secured by such REO Property, and (b) [***] months from the date of this Agreement, or (2) the PHH Portfolio, which referral occurs at any time during the term of this Agreement:
|
(iii)
|
[***] REO Properties. With respect to a Subject REO Referral that is [***]:
|
(iv)
|
[***] REO Properties. With respect to a Subject REO Referral that is [***], the commission to NRZ Brokerage will be [***]. The Parties may agree in writing on alternative commission terms for [***] REO Properties on a case-by-case basis.
|
(v)
|
Existing REO Properties. Notwithstanding the foregoing in this
Section 5(a)
, with respect to a Subject REO Referral that is an Existing REO Property at the time of the sale and conveyance of Subject REO Referrals, the commission to NRZ Brokerage will be [***].
|
(vi)
|
With respect to a Subject REO Referral that is from a Covered Portfolio other than the HLSS Portfolio, Ocwen Portfolio, or PHH Portfolio, a commission equal to an amount to be determined by the Parties with respect to each Portfolio when it becomes a Covered Portfolio in accordance with this Agreement.
|
If to RHSS:
|
REALHome Services and Solutions, Inc.
|
|
1000 Abernathy Road, Suite 245
|
|
Atlanta, GA 30328
|
|
Attention: Corporate Secretary
|
|
Email: contractmanagement@altisource.com
|
With a copy to:
|
New Residential Sales Corp.
|
|
1345 Avenue of the Americas, 45th Floor
|
|
New York, New York 10105
|
|
Attention: [***]
|
|
Email: [***]
|
|
REALHome Services and Solutions, Inc.
|
||
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|
|
By:
|
/s/ Min L. Alexander
|
|
|
|
Name:
|
Min L. Alexander
|
|
|
Title:
|
President and Chief Executive Officer
|
|
REALHome Services and Solutions - CT, Inc.
|
||
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|
|
|
|
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|
By:
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/s/ Min L. Alexander
|
|
|
|
Name:
|
Min L. Alexander
|
|
|
Title:
|
President and Chief Executive Officer
|
|
New Residential Sales Corp.
|
||
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By:
|
/s/ Nicola Santoro, Jr.
|
|
|
|
Name:
|
Nicola Santoro, Jr.
|
|
|
Title:
|
Chief Financial Officer
|
1.
|
RECITALS
.
|
1.1.
|
Seller is the owner or otherwise has the right to sell the real property described in this Agreement.
|
1.2.
|
Seller wishes to engage Broker, a licensed real estate broker, as its listing broker with respect to the property described in this Agreement.
|
2.
|
APPOINTMENT AS LISTING BROKER
.
|
2.1.
|
Seller's Appointment.
Seller hereby appoints Broker as its listing broker and gives Broker the
sole and exclusive right to procure a purchaser for the property described below (the “Property”):
|
(a)
|
Seller Loan No.:
|
[Loan Number]
|
(b)
|
Property:
|
[Property Address]
|
(c)
|
Tax Identification No.:
|
[Tax ID]
|
(d)
|
Listing Price:
|
$[List Price] (the “Listing Price”)
|
(e)
|
Last Known Occupancy Status:
|
[Occupancy Status (Vacant/Occupied)]
|
2.2.
|
Terms of Appointment
. Broker's appointment as Seller's listing broker will commence on [Date] and will expire at midnight on [Date] (the “Listing Term”), unless otherwise extended in writing.
|
2.3.
|
Broker's Acceptance
. Broker hereby accepts Seller's appointment as Seller's listing broker with
regards to the Property. Broker agrees to affect a sale of the Property as quickly as possible at the Listing Price and to facilitate the consummation thereof.
|
2.4.
|
Exclusive Agency
. Broker will act exclusively on behalf of the Seller as its designated agent, and
will in no cases act as a dual agent unless disclosed in writing to Seller. However, Broker may act as a transactional broker or facilitator for the purpose of drafting contract documents for an unrepresented buyer.
|
2.5.
|
Brokerage Relationship
. Broker will deal honestly and fairly with Seller, will account for any
funds received, and will use the necessary skills, care, and diligence in the transaction that is required of a licensed real estate broker.
|
3.
|
DUTIES OF LISTING BROKER
.
|
3.1.
|
General Duties
. Broker agrees to perform all necessary and commercially reasonable activities
which are customary in the community where the Property is located in order to procure a buyer of
|
3.2.
|
Initial Listing Phase
.
The “Initial Listing Phase” shall refer to the time period commencing with
the execution of this Agreement and continuing through the entering of this listing into one or more Multiple Listing Services (“MLS”).
|
3.2.1.
|
Initial Marketing Activities
. During the Initial Listing Phase, Seller authorizes and directs Broker to perform reasonable and customary marketing activities to prepare the Property for listing in an MLS, including, but not limited to:
|
(a)
|
Hosting one or more “open house” viewings of the Property upon Seller's reasonable request and when deemed prudent by Broker;
|
(b)
|
Installing appropriate signage on the Property;
|
(c)
|
Inputting and advertising the Property on the Broker's website(s);
|
(d)
|
Communicating with prospective buyers and cooperating brokers to provide information about the Property and sales process;
|
(e)
|
Installing MLS-approved lockbox if required by local MLS or REALTOR® board; and
|
(f)
|
Any other activity that Broker believes will facilitate the procurement of a buyer of the Property.
|
3.2.2.
|
Discretion to Enter Listing into one or more MLS
. Seller authorizes and directs Broker to enter the listing of the Property into one or more MLS. However, Seller also authorizes and directs Broker to refrain from entering this listing into any MLS while Broker is performing the activities described in
Section 3.2.1
.above for a period of up to fifteen (15) days following the execution of this Agreement or until such time that Seller directs Broker in writing to enter the listing in one or more MLS.
|
3.3.
|
Primary Listing Phase
. The Primary Listing Phase shall refer to the time period commencing
with the entering of this listing into one or more MLS and continuing through Seller's execution of a contract for the sale of the Property.
|
3.3.1.
|
Primary Marketing Activities
. During the Primary Listing Phase, Seller authorizes and directs Broker to perform reasonable and customary marketing and sales activities, including, but not limited to:
|
(a)
|
Any of the activities listed in
Section 3.2.1
;
|
(b)
|
Inputting this listing in additional MLS at Broker’s discretion; and
|
(c)
|
Advertising the Property as Broker deems advisable, including advertising the Property on Broker’s website(s), on Hubzu.com and/or other websites.
|
3.3.2.
|
Reporting Requirements
. Upon written request, Broker shall provide online or other electronic access to a Property Status Report to Seller or Seller’s Asset Manager as defined in
Section
4.2.1
.This report shall include information regarding:
|
(a)
|
All advertising activities conducted by Broker, including classified and display advertising;
|
(b)
|
Other sales promotions and results, as well as showings to prospective buyers and their comments;
|
(c)
|
Recent sales of comparable properties or changes in the local real estate market or surrounding area that would alter the value of the Property; and
|
(d)
|
Broker's recommendations on marketing and pricing strategy.
|
3.4.
|
Secondary Listing Phase
. The Secondary Listing Phase shall refer to the time period
commencing with Seller's execution of a purchase and sale agreement for the sale of the Property and continuing through closing under such agreement.
|
3.4.1.
|
Secondary Listing Phase Activities
. During the Secondary Listing Phase, Seller authorizes and directs Broker to perform reasonable and customary closing and transaction coordination activities, including, but not limited to:
|
(a)
|
Communicating with principals and cooperating brokers to provide information about the closing process;
|
(b)
|
Conveying and communicating information necessary to facilitate the closing; and
|
(c)
|
Executing all documents required of the Broker to facilitate the closing.
|
4.
|
SELLER'S OBLIGATIONS
.
|
4.1.
|
Cooperation
. Seller agrees to cooperate with Broker in carrying out the purpose of this
Agreement, including but not limited to providing Broker with all information needed regarding Seller and the Property for MLS or similar input or setup and referring to Broker all inquiries regarding the Property or its potential transfer, whether by purchase or any other means of transfer.
|
4.2.
|
Asset Management
.
|
4.2.1.
|
Seller's Asset Manager
. Seller acknowledges, confirms and agrees that the actions or activities listed in below in this Section 4.2 are the sole responsibility of Seller and not of Broker. Seller has appointed the asset manager shown on the signature page to this Agreement to be its sole and exclusive asset manager (“Asset Manager”) for the Property. Seller has authorized Asset Manager to act on Seller’s behalf for all actions required of Seller under this Agreement, including, but not limited to the actions specified in
Sections 4.2.2, 4.2.3 and 4.2.4
below. Broker is entitled to rely on all directions, instructions and actions of Asset Manager in any way related to the Property or this Agreement. To the extent the Asset Manager is not an affiliate of Broker and was not selected by Broker or one of its affiliates, Seller agrees to indemnify and hold Broker harmless from and against any loss, damage, claim, action, fine, assessment, penalty, proceeding, cause of action, fee or expense of any nature (including but not limited to attorneys' fees and court costs) arising out of, caused by or in any way related, directly or indirectly, to the involvement or acts or omissions of Asset Manager. The foregoing indemnity obligations shall not apply to the extent that RHSS's acts or omissions (other than those acts or omissions taken by RHSS at Seller or Seller’s representatives’ direction), or information provided by RHSS (other than information received by RHSS from Seller or Seller’s representatives), resulted in the Asset Manager's conduct. This indemnity shall survive closing or termination of this Agreement.
|
4.2.2.
|
Valuation Activities
. Seller shall obtain all information and make all decisions regarding the valuation of the Property, including but not limited to performing the following:
|
(a)
|
Ordering CMA's, BPO's, appraisals, and reviews as necessary to determine the value and selling price of the Property; and
|
(b)
|
Regularly reviewing the Property's value, and making adjustments to the Listing Price as Seller may deem necessary or appropriate under the circumstances.
|
4.2.3.
|
Property Inspection and Preservation Activities
. Seller shall provide for the care, custody and management of the Property, including but not limited to performing inspection services, required repairs, securing services, boarding services, winterizing services, yard maintenance services, debris removal services, pest control services, carpet cleaning or replacing, carpet removal, pool maintenance, minor repairs, roof repair, fence repair, gate repair, painting, safety equipment installation, tenant relocation assistance, emergency repairs, general plumbing, HOA invoicing and utility service coordination. Seller is also responsible for the installation of a combination lockbox, digital deadbolt lock or other access device for preservation agent and real estate agent access, except for those lockboxes described in
Section 3.2.1(e)
whenever mandated by the local MLS or REALTOR® board. Nothing in this
Section 4.2.3
shall be deemed to provide or impute knowledge of any material fact to Broker.
|
4.2.4.
|
Transaction and Closing Coordination
. Seller shall perform or provide for all services necessary for the closing of the Property, including but not limited to the following:
|
(a)
|
Title services, including provision of the preliminary title commitment and title defect clearance;
|
(b)
|
Document services, including preparation and/or reviewing of the Seller's closing package, such as the deed, HUD-1 and other closing documents; and
|
(c)
|
Escrow services, including full coordination and cooperation with the escrow agent for the management of the closing of escrow.
|
5.
|
PROCESSING OF OFFERS AND COUNTEROFFERS
.
|
5.1.
|
Submission of Offers and Counteroffers.
Broker shall instruct buyer or buyer's representative to submit all offers to purchase or counteroffers directly to the Seller electronically through the Hubzu.com website in the event the property is marketed on Hubzu.com. Seller may accept, counter or reject offers to purchase the Property at its sole discretion and shall notify the buyer of such decision directly through the website or via email.
Broker is not authorized to receive or transmit any offers or counteroffers on behalf of the Seller.
|
5.2.
|
Submission of Documents
. Broker shall instruct buyer or buyer's representative to submit all
documents other than offers to purchase or counteroffers directly to the Seller electronically via email to
REcontracts@altisource.com
or via fax at 407-737-5409.
|
5.3.
|
Backup Offers
. Seller encourages Broker to procure backup offers, and Seller will accept backup
offers subject to Seller's right to negotiate previously submitted offers.
|
6.
|
COMPENSATION
.
|
6.1.
|
Commissions; Cooperation with and Compensation to Other Brokers
. Seller agrees to pay the Broker a commission equal to the Total
Commission Amount, as defined in
Section 6.2.2
, at the closing of the sale of the Property if a buyer is procured for the Property in accordance with the terms set forth in this Agreement or at any other price and terms accepted by Seller, either directly
|
Participating Party
|
Portion of Total Commission Amount
|
Broker
|
Either
[___]% of the Purchase Price
or
[________], whichever is greater
|
Buyer’s Agent, if any
|
Either
[***]% of the Purchase Price
or
$[***], whichever is greater
|
Referring Broker
|
[___]% of the Purchase Price
|
6.2.
|
Definitions
.
|
6.2.1.
|
Purchase Price
. “Purchase Price” is the total purchase price of the Property not including any applicable buyer’s premium and /or technology fee or any Seller concessions.
|
6.2.2.
|
Total Commission Amount
. The “Total Commission Amount” is the sum of the amounts set forth in the table above.
|
6.3.
|
Survival of Obligations
. Seller's obligation to pay Broker the Total Commission Amount shall survive termination of this Agreement if the Property is under contract at the time of termination, only if the contract that was pending at the time of termination results in a consummated sale.
|
7.
|
TERMINATION
.
|
7.1
|
By Mutual Agreement
. This Agreement may be terminated upon mutual agreement between Broker and Seller or any of Seller's affiliates that are duly authorized to act on Seller’s behalf.
|
7.2
|
Automatic Termination for Bulk Sales
. If after the execution of this Agreement Seller decides to sell the Property
as part of a bulk sale of multiple properties other than through Time Limit Bidding set forth in
Section 8.1
, upon receipt of notice thereof to Broker, this Agreement shall automatically
|
8.
|
SELLER AUTHORIZATIONS
.
|
8.1.
|
[
For inclusion unless Online Auction is prohibited
]
Time Limit Bidding
. As permitted by applicable state law, Seller authorizes Broker to market
the Property via online in a time limit bidding format pursuant to Seller's written or electronic instructions to Broker.
|
8.1.1.
|
Seller acknowledges that the buyer will be required to pay a buyer's premium and technology fee for sales conducted in a time limit bidding format.
|
8.1.2.
|
Regardless of whether the Broker procures a buyer during a time limit bidding auction cycle, during the Term, the Broker shall continue to perform its duties pursuant to
Section 3
, both during and after any time limit bidding marketing periods.
|
8.1.3.
|
The first time limit bidding period shall begin on [Date and Time] and end on [Date and Time], Seller requires that the minimum starting bid shall be $ [Starting Bid Amount]. Broker is authorized to execute subsequent time limited bidding auction cycles of the Property as appropriate.]
|
8.2.
|
Unlicensed Assistants
. Seller authorizes and grants permission for Broker to employ, contract
and utilize unlicensed assistants to perform the following tasks under supervision of Broker:
|
(a)
|
Making, conducting or preparing a comparative market analysis subject to the approval of and for use by the Broker.
|
(b)
|
Providing factual information to others from writings prepared by the Broker or other generally available information.
|
(c)
|
Preparing and designing advertising relating to the transaction for which the Broker was employed, if the advertising is reviewed and approved by the Broker or any associate broker prior to its publication.
|
(d)
|
Preparing and completing documents and instruments under the supervision and direction of the Broker if the final documents or instruments will be or have been reviewed or approved by the Broker prior to the documents or instruments being presented, given or delivered to a principal or party to the transaction.
|
(e)
|
Communicating with a principal, party or service provider in connection with a transaction about when reports or other information needed concerning any aspect of the transaction will be delivered, or when certain services will be performed or completed, or if the services have been completed.
|
(f)
|
Mailing, e-mailing, faxing, delivering, picking up, or arranging the mailing, e-mailing, faxing, delivery, or picking up of documents or instruments related to the transaction, including obtaining signatures to the documents or instruments from principals, parties or service providers in connection with the transaction. Such activity shall not include a discussion of the content, relevance, importance or significance of the document, or instrument or any portion thereof, with a principal or party to the transaction.
|
(g)
|
Reviewing, as instructed by the Broker, transaction documentation for completeness or compliance, providing the final determination as to completeness or compliance is made by
|
(h)
|
Any other tasks not requiring a license which may be assigned from time to time by Broker and under the reasonable supervision or control of Broker.
|
8.3.
|
Disclosure of Offer Detail Information
. To the extent permitted by law and applicable MLS
rules, Seller authorizes and instructs Broker to disclose information related to current, active, expired, withdrawn and counter offers to potential buyers and/or buyer’s brokers or agents through an online portal or online marketing service utilized by Broker. Seller reserves the right to disclose any or all of the aforementioned information using electronic means, including, but not limited to, websites maintained and operated by or on behalf of Seller or Seller’s Asset Manager.
|
8.4.
|
Use of MLS-Approved Lockboxes
. Seller authorizes and grants permission for Broker to refrain
from using MLS-approved lockboxes except where usage of MLS-approved lockboxes is mandated by the local MLS or REALTOR® board.
|
9.
|
FAIR HOUSING.
Seller and Broker agree that this Property will be offered to any person
without regard to race, color, religion, sex, handicap, familial status, national origin or any other factor protected by federal, state or local law.
|
10.
|
SELLER REPRESENTATIONS; GENERAL INDEMNITY
. Seller certifies, represents and warrants that it is legally entitled to convey the Property and any improvements to the Property. To the fullest extent permitted by law, Seller agrees to indemnify and hold Broker harmless from and against any loss, damage, claim, action, fine, assessment, penalty, proceeding, cause of action, fee or expense of any nature (including but not limited to attorneys' fees and court costs) (collectively, the “Claims”) arising out of or relating to title, condition, habitability, marketability or value of the Property or any other material fact relating to the Property, including but not limited to systems, structures, environmental contamination or hazards (such as lead paint, mold, radon or other biological or non-biological contaminants), flood zones or hazards or soils or geology, whether now existing or later arising or becoming evident, except to the extent the Claims relating to such title, condition, habitability, marketability, value or other material fact related to the Property were caused by Broker's acts or omissions or the acts or omissions of an Affiliate of Broker. This Section 10 shall survive closing or termination of this Agreement.
|
11.
|
GENERAL CONTRACT PROVISIONS
.
|
11.1.
|
Entire Agreement, Modifications
. This Agreement may not be amended or modified in any manner except by a written agreement signed by each of the parties hereto.
|
11.2.
|
Notices
.
|
11.2.1.
|
Communications Regarding Real Estate Transaction.
Seller acknowledges that many communications and notices in real estate transactions are of a time sensitive nature and that the failure to be available to receive such notices and communications can have adverse, legal, business and financial consequences. Seller agrees to remain reasonably available to received communications from Broker, through its Asset Manager or otherwise.
|
11.2.2.
|
Notices Regarding this Agreement
.
|
11.2.2.1.
|
Methods of Delivery, Deemed Receipt. Communications and notices between Broker and Seller regarding the terms of this Agreement shall be in writing, signed by the Party giving the notice, and shall be deemed given: (a) upon receipt if delivered personally or if mailed by certified mail, return receipt requested and postage prepaid; or (b) at noon on the business day after dispatch if sent by a
|
11.2.2.2.
|
Additional Requirement for Notice to Broker
. Notice to Broker shall not be deemed delivered to Broker until Broker receives both: (a) notice pursuant to the methods described in
Section
11.2.2.1
; and (b) a copy of the notice via e-mail to
contractmanagement@altisource.com
and
to
the Broker’s e-mail address as shown on the signature page of this Agreement.
|
11.2.2.3.
|
Additional Requirement for Notice to Seller. Notice to Seller shall not be deemed delivered to Seller until Seller receives both: (a) notice pursuant to the methods described in
Section
11.2.2.1
; and (b) a copy of the notice via e-mail to
[________________________]
.
|
11.2.2.4.
|
Notice Addresses
. All notices shall be delivered to the address and e-mail addresses as shown below (or at such other address a party may specify by like notice).
|
11.3.
|
Counterparts
. This Agreement may be executed in any number of counterparts, each of which
when so executed and delivered shall be deemed an original, but all of which shall together constitute one and the same agreement.
|
11.4.
|
Enumeration and Headings
. The enumeration and headings contained in this Agreement are for
convenience of reference only and shall not control or affect the meaning or construction of any of the provisions of this Agreement.
|
11.5.
|
Severability
. If any provision of this Agreement is held to be invalid or unenforceable for any
reason, such provision shall be conformed to prevailing law rather than voided, if possible, in order to achieve the intent of the Parties and, in any event, the remaining provisions of this Agreement shall remain in full force and effect and shall be binding upon the parties hereto.
|
11.6.
|
Construction
. Unless the context of this Agreement otherwise clearly requires: (i) references in
this Agreement to the plural include the singular, the singular the plural, the masculine the feminine, the feminine the masculine and the part the whole; and (ii) the word "or" shall not be construed as exclusive and the word "including," "includes," and "included" shall not be construed as limiting. All references to buyer shall also include any agent, broker or other representative of buyer.
|
11.7.
|
Successors and Assigns
. This Agreement and the terms, covenants, provisions and conditions
hereof shall be binding upon, and shall inure to the benefit of, the respective heirs, successors and assigns of the parties hereto; provided, however, that Broker may not subcontract or assign this Agreement. Any purported assignment in violation of this Section is void. Seller may assign this Agreement to any of its affiliates without Broker’s consent.
|
11.8.
|
Governing Law
. This Agreement and the respective rights and obligations of the parties hereto
shall be governed by and construed in accordance with the laws of the State of Florida, without regard to its conflicts of laws provisions.
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11.9.
|
Waiver of Jury Trail
. THE PARTIES HERETO HEREBY KNOWINGLY AND VOLUNTARILY WAIVE ANY RIGHT WHICH EITHER OR BOTH OF THEM MAY HAVE TO RECEIVE A TRIAL BY JURY WITH RESPECT TO ANY CLAIMS, CONTROVERSIES OR DISPUTES WHICH MAY ARISE OUT OF THIS AGREEMENT OR THE SUBJECT MATTER HEREOF.
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1.
|
Quarterly Information
. RHSS shall deliver to NRZ Brokerage electronic copies of the following items through an electronic portal, ftp site, or as otherwise mutually agreed between the parties, in each case quarterly by no later than the 15th calendar day after the end of the preceding quarter (unless otherwise specified below), and in a downloadable and searchable format showing any changes from the previous quarter’s delivery:
|
a.
|
Incentive Compensation Plan Documentation
.
Written documentation of RHSS’s incentive compensation plan structure and policy for brokers that are employees of RHSS and of RHSS’s scorecard structure and policy for brokers that are third party vendors of RHSS;
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b.
|
Bid Data and Bid History
. Report on the selected bid and bid history for Subject REO Referrals sold by RHSS under the Agreement during the preceding quarter;
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c.
|
Bidding Process Documentation
. Documentation describing the bidding process in effect for Subject REO Referrals sold by RHSS under the Agreement at the end of the preceding quarter;
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d.
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Material Changes to Policies and Procedures
. Written notification of any material changes to any of RHSS’s or RHSS’s Affiliates’, as applicable, policies and procedures relating to any of the operations of RHSS or such Affiliates relevant to the services provided by RHSS to or on behalf of NRZ Brokerage or any Affiliate (each, an “
NRZ Entity
”) excluding any enterprise-wide policies and procedures that do not materially impact the ability to provide services under this Agreement, but including without limitation the policies and procedures identified in
Section 3
of this Vendor Management Addendum;
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e.
|
Material Changes to Operations, Financial Condition, Management or Business
. Written notification of any material operational, financial, management, or business changes of RHSS and RHSS Affiliates relevant to the services provided to NRZ Entities (including without limitation key personnel or management changes, implementation of new or modified technology or process initiatives, adding or removing material vendors, strategic initiatives, significant investments, divestitures and/or joint ventures, significant changes in client roster, or off-shore initiatives);
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f.
|
Scorecards
. Scorecards for RHSS and third party brokers (provided that such scorecards shall not include personal information of such brokers or vendors and shall be used by NRZ Brokerage solely for the purpose of evaluating RHSS’s (and its third party brokers’, as applicable) performance under the Agreement and not for any other purpose);
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g.
|
Licensing Update
. (i) Licensing maintenance update reflecting all of the broker licenses and Multiple Listing Service memberships maintained by RHSS and each Affiliate of RHSS relevant to the services provided to any NRZ Entity pursuant to the Agreement, (ii) a certification by an executive officer or chief compliance officer of RHSS and of each such Affiliate to the effect that RHSS and such Affiliate, as applicable, maintains all required licenses required by applicable laws and regulations for the activities performed by such entity related to the services provided
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h.
|
Results of Governmental Authority Examinations or Investigations
.
Results of any Governmental Authority examination or investigation that is adverse to RHSS (or an Affiliate of RHSS relevant to the services provided to an NRZ Entity pursuant to the Agreement) relating to activities relevant to the services provided to any NRZ Entity pursuant to the Agreement, which examination or investigation RHSS (or such Affiliate) concluded during the preceding quarter, and where sharing such results is legally permitted;
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i.
|
Insurance
. Proof of insurance coverages purchased to cover RHSS indicating the primary limit and addition of NRZ Brokerage as an additional insured, in accordance with the terms set forth in
Exhibit 5A
unless prohibited by the insurer;
|
j.
|
Representation of Selling and Buyer Parties
. (i) Written certification from an executive officer of RHSS that RHSS did not represent both the selling party and buying party in sales transactions in the preceding quarter involving Subject REO Referrals except as consented to by the parties in writing in accordance with applicable law, and (ii) supporting written policies and procedures, if such policies and procedures changed materially during the preceding quarter;
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k.
|
Financials
. If RHSS (i) does not produce annual audited financials, unaudited financial statements for each calendar quarter, no later than 45 days after each quarter-end; (ii) produces annual audited financials, (A) unaudited financial statements for each calendar quarter, no later than 45 days after each quarter-end, for the first three (3) quarters of each year, and (B) audited financial statements, no later than 120 days after the end of each calendar year for which such audited financial statements are prepared;
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l.
|
Compliance with Applicable Laws and Regulations
. Certification from a Compliance Officer or General Counsel of RHSS or its affiliates certifying that, according to such certifier’s knowledge and reasonable interpretation of applicable laws and regulations: (i) RHSS is in compliance with all applicable laws and regulations, and (ii) no events have occurred during the preceding calendar quarter or are occurring that would require RHSS to notify NRZ Brokerage under
Section 7(b)
or
(c)
of this Vendor Management Addendum;
|
m.
|
Compliance with Financial Requirements
. Certification from principal financial officer or principal accounting officer of Altisource that, according to that person’s knowledge, a Termination Event pursuant to any of Sections 19(a)(iv), 19(a)(v), 19(a)(vi) or 19(a)(xi) of the Agreement has not occurred and is not continuing, attaching, solely with respect to the certification relating to Section 19(a)(xi) of the Agreement, back-up calculations in Excel format in support of such certification; and
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n.
|
Litigation Report
. A litigation report for matters of which a Subject REO Referral is the subject, which report shall (i) include a summary setting forth the (A) total number of outstanding matters, (B) total number of matters closed during the preceding quarter, and (C) total number of new matters during the preceding quarter, and (ii) identify each individual matter and provide a summary of such matter, including any updates since the previous reporting period, and which
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2.
|
Monthly Information
. RHSS shall deliver to NRZ Brokerage each of the following electronically through an electronic portal, ftp site, or as otherwise mutually agreed between the parties, in each case monthly by no later than the 15th calendar day of each month:
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a.
|
Complaints
. RHSS shall provide a complaint report for complaints relating to any Subject REO Referral, which report shall consist of complaint analysis by category (Pareto analysis and trend analysis for trailing 12-months), root cause information on major complaint categories and action plans addressing the top complaint categories and inventory analysis (inventory, inflow, outflow, aging analysis) and be in sortable format. RHSS shall respond within 5 business days to NRZ’s reasonable requests for sample complaints from RHSS’ or its Affiliates’ iCasework system to view complaints related to the Subject REO Referrals and related workflow through resolution or closure of such complaints; and
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b.
|
Reports Regarding Subject REO Referrals
.
RHSS shall provide to NRZ Brokerage a report in substantially the same form and substance as that set forth in
Exhibit 5B
hereto reflecting for all Subject REO Referrals (i) sales by RHSS versus third-party real estate broker, (ii) number of Auction Cycles before sale, (iii) sales price versus listing price, (iv) sales price versus reserve price, (v) number of properties that do not receive any bids, (vi) number of properties that do not receive any bids above reserve, (vii) sales performance (liquidation rates, average days on market, price to pre-sales market value) by states and/or MSAs, (viii) sales performance by urban versus suburban versus rural, (ix) sales performance by sales price ranges, (x) sales performance by property type (detached versus attached residences), (xi) price to pre-sales market value days on market, and (xii) sales volume by Altisource Affiliated Escrow Agent versus third-party escrow agent. RHSS shall also provide to NRZ Brokerage, in writing, a report setting forth (i) each REO Property that has been listed since the prior version of such report was provided to NRZ Brokerage, and (ii) the commission structure applicable to each such REO showing the commission percentage, subject to minimums, that will be payable to each broker party when each REO sells and closes. Upon NRZ Brokerage’s request, which such request may be a standing request, RHSS shall promptly provide to NRZ Brokerage a copy of a listing agreement relating to an REO Property.
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c.
|
Performance Metrics
.
RHSS shall deliver a monthly performance report to the applicable NRZ Entity, setting forth the preceding month’s data for the fields set forth in
Exhibit 5B
attached hereto, as may be modified from time to time by NRZ Brokerage upon prior written notice to RHSS.
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3.
|
Annual Information
. RHSS shall deliver to NRZ Brokerage the following, in each case annually by no later than the 15th day of each calendar year:
|
a.
|
Policies and Procedures for Quality Assurance
. Written documentation of RHSS’s quality assurance measures designed to validate that REO brokerage services and related services performed by RHSS (and its vendors) pursuant to the Agreement are performed accurately,
|
b.
|
Policies and Procedures for Information Security
. Written documentation of RHSS’s document and data security measures and practices for maintaining the confidentiality of all non-public information, proprietary information, personally identifiable customer information or otherwise confidential information received from NRZ Brokerage or from a mortgage servicer relating to the provision of brokerage services with respect to Subject REO Referrals;
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c.
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Policies and Procedures for Disaster Recovery and Business Continuity
. Written documentation of RHSS’s policies and procedures governing disaster recovery and business continuity, including in response to service disruptions or degradations resulting from natural disasters, human errors, or intentional physical or cyber-attacks, for both on-shore and off-shore operations;
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d.
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Policies and Procedures for Regulatory Compliance
. Written documentation of RHSS’s policies and procedures governing regulatory compliance, including without limitation compliance with applicable federal and state laws and regulations governing real estate settlements, referrals, incentives, commissions and compensation; and
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e.
|
Policies and Procedures for Vendor Management
. Written documentation of RHSS’s third party vendor policies and procedures, including but not limited to annual recertification requirements and proof of recertification;
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f.
|
Vendors
. A list of all vendors, third parties, and RHSS-owned or affiliated entities engaged by RHSS to assist in the provision of brokerage services with respect to Subject REO Referrals or other critical services related to the services provided to NRZ Brokerage by RHSS;
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g.
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Policies and Procedures for Human Resources and Training
. Written documentation of RHSS’s policies and procedures governing human resources management, including without limitation training, continuing education, retention and redundancy planning; and
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h.
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Policies and Procedures for Change Management
. Written documentation of RHSS’s legal and regulatory change management processes;
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i.
|
Internal Audit
. (i) Internal audit schedule, (ii) solely to the extent related to services to be provided under the Agreement, test plans, and (iii) solely to the extent relevant to services provided under the Agreement, any final findings, recommendations or remediation plans;
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j.
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Quality Control and Quality Assurance Testing
. (i) Quality control and quality assurance testing schedule (ii) solely to the extent related to services provided under the Agreement, test plans, and (iii) solely to the extent relevant to services provided under the Agreement, any final findings, recommendations, or remediation plans.
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4.
|
Report Regarding REO Properties as at each Acquisition Date.
RHSS will provide NRZ Brokerage with a report within five business days after each Acquisition Date that sets forth the property reserve price (if such reserve price exists) and status of each REO Property in the Portfolio acquired on the applicable Acquisition Date.
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5.
|
SSAE 16 SOC 1 Type II Report
. For critical systems relied upon by RHSS (or any Affiliates of RHSS relevant to the services provided to an NRZ Entity pursuant to the Agreement) as identified by RHSS in connection with its obligations or any services provided under the Agreement, RHSS shall deliver to NRZ Brokerage a copy of each SSAE 16 (or any applicable successor SSAE) SOC 1 Type II report or equivalent reviews of its data processing environment and internal controls related to such obligations or services as well as copies of SSAE 16 (or any applicable successor SSAE) SOC 1 Type II reports or equivalent reviews provided by its critical vendors and off-shore vendors. Such reports regarding RHSS’s data processing environment and internal controls related to such obligations or services must be completed by a nationally recognized independent audit firm and such reports (if any) shall be delivered by no later than January 31 of each year, and shall cover a minimum period of nine (9) months, with a bridge letter covering the remaining period, which shall not exceed three (3) months. Vendors’ reports contemplated under this
Section 5
shall be provided to NRZ Brokerage no later than 2 business days of RHSS’s or its Affiliates’ receipt of such reports. As of the date of execution of the Agreement, the parties agree that there are no third-party critical systems relied upon by RHSS (or any Affiliates of RHSS relevant to the services provided to an NRZ Entity pursuant to the Agreement).
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6.
|
Audits
.
|
a.
|
Right to Conduct Audits
. NRZ Brokerage (itself or with the assistance of or through New Residential Mortgage and/or mortgage servicers to the extent they service mortgage loans in the Covered Portfolios and/or one or more third-party auditors or consultants shall have the right to inspect, investigate, examine, evaluate, and audit all activities and operations of RHSS relating to the provision of services provided to an NRZ Entity under the Agreement. All audits pursuant to this
Section 6(a)
shall be at the sole expense of NRZ Brokerage and shall be subject to
Sections 6(b)
,
6(c)
and
6(d)
of this Vendor Management Addendum. NRZ agrees that the auditor shall not be a RHSS Competitor. For the purposes of this
Section 6(a)
, “
RHSS Competitor
” means a party engaged in the business of marketing and selling real property. All auditors conducting an audit pursuant to this
Section 6
shall sign a mutually acceptable non-disclosure agreement with RHSS prior to receiving any information pertaining thereto.
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b.
|
Scope of Audits.
The scope of such audits may consist of the following, without limitation, but in each case solely to the extent relevant to the services provided by RHSS under the Agreement: the quality and timeliness of the provision of services, RHSS’s policies and practices with respect to document and file security and the protection of confidential information, RHSS’s business recovery and disaster recovery plans, RHSS’s compliance with all governing laws, rules, and regulations, and/or any of the items referenced in
Sections 1
through
3
of this Vendor Management Addendum. NRZ Brokerage shall have the right to review RHSS’s files for the Subject REO Referrals and shall have the right to review specific documents associated with specific Subject REO Referrals of NRZ Brokerage’s choosing, excluding any materials subject to a claim of attorney-client privilege or work product protection. RHSS shall make its personnel and its facilities (including computer servers and related technology facilities) reasonably available to all persons performing such audits, and shall fully cooperate with any such audit or examination.
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c.
|
Location of Audits
. Audits may occur onsite at any locations where RHSS (or Affiliates of RHSS relevant to the services pursuant to the Agreement) maintain significant operations or personnel, or remotely in the form of a desk review or electronic review. RHSS shall reasonably
|
d.
|
Timing of Audits; Notice
.
Audits shall be performed during normal business hours, and NRZ Brokerage shall cooperate with RHSS (and such Affiliates of RHSS relevant to the services provided to an NRZ Entity pursuant to the Agreement) to minimize disruption to the business activities and operations of RHSS resulting from any audit activity. NRZ Brokerage shall provide RHSS with reasonable advance written notice of at least twenty one (21) calendar days prior to conducting any extensive or comprehensive onsite audit and at least ten (10) calendar days prior to conducting any remote audit, unless, in either case (i) the audit is mandated or requested by a Governmental Authority, in which case the applicable NRZ Entity shall make commercially reasonable efforts to provide RHSS with advance notice or (ii) the audit is requested by NRZ Brokerage during the continuation of a Termination Event, in which case NRZ Brokerage shall make commercially reasonable efforts to provide RHSS with advance written notice of at least five (5) business days prior to conducting any such audit.
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7.
|
Litigation and Regulatory Matters
.
|
a.
|
Quarterly Update
.
On a quarterly basis, and by no later than the 15th day following the end of each calendar quarter, RHSS shall provide representatives of NRZ Brokerage (which may be limited to counsel upon request by RHSS) with a quarterly oral update regarding outstanding material litigation or regulatory matters relating to any of the activities of RHSS (or any Affiliates of RHSS relevant to the services provided to an NRZ Entity pursuant to the Agreement). Such oral update shall occur via telephone conference, or as otherwise mutually agreed between the parties. Such updates shall include but not necessarily be limited to the following: (a) new litigation matters or regulatory matters, investigations or inquiries, (b) developments (other than administrative or non-substantive developments) in any matters, investigations or inquiries previously disclosed to NRZ Brokerage, (c) updates to any potential liability or settlement projections, (d) pending or concluded examinations, (e) pending or concluded settlements, remediations, or resolutions of such matters, and (f) any material legal, regulatory, or compliance-related developments of which RHSS is aware in the residential real estate industry relevant to RHSS and to the services provided under the Agreement. Nothing in this
Section 7(a)
shall require RHSS to provide any information subject to the attorney-client privilege or work product protection.
|
b.
|
Notice of Certain Events
. RHSS shall notify NRZ Brokerage as promptly as possible, and in any event no later than three (3) business days following receipt by RHSS (or any Affiliate of RHSS relevant to the services provided to an NRZ Entity pursuant to the Agreement) of notice that any demand, inquiry, investigation, subpoena, order, complaint, or other communication from any Governmental Authority relating to an alleged violation of any applicable law or regulation that (i) relates to any Subject REO Referrals, (ii) relates to any of the activities or services performed by RHSS or any Affiliate of RHSS relevant to the services provided to an NRZ Entity pursuant to the Agreement) in connection with the Agreement, (iii) references NRZ
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c.
|
Notice of Licensing Matters
. RHSS shall (i) notify NRZ Brokerage as promptly as possible, and in any event within two (2) business days of RHSS (or any Affiliate of RHSS relevant to the services provided to an NRZ Entity pursuant to the Agreement) having knowledge that any Governmental Authority is reasonably likely to suspend, revoke or limit any license or approval necessary for RHSS (or any such Affiliate of RHSS) to perform any of the services provided under the Agreement and (ii) provide NRZ Brokerage with at least sixty (60) calendar days’ advanced written notice in the event RHSS elects to intentionally and deliberately surrender or intentionally and deliberately not renew a license or permit a license to expire, which written notification shall include a reasonably detailed explanation of RHSS’s (or such Affiliate’s) reasonable business considerations for such election.
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8.
|
Cooperation with Mortgage Servicers
. RHSS acknowledges that the REO Properties in the Covered Portfolios may be managed by New Residential Mortgage and/or by subservicers acting on New Residential Mortgage’s behalf. RHSS agrees to reasonably cooperate with New Residential Mortgage and with the servicers or subservicers of the mortgage loans in the Covered Portfolios, and shall timely provide documentation and reporting reasonably requested by New Residential Mortgage and/or such subservicers regarding the brokerage services provided by RHSS with respect to the Subject Referrals.
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9.
|
Client Relationship Manager
. RHSS shall provide resources dedicated to monitoring the relationship with NRZ Brokerage. Such resources shall include at least one dedicated client relationship manager that will serve as a primary contact for NRZ Brokerage and its representatives. The responsibilities of such dedicated resources/personnel shall include but not necessarily be limited to the following: (a) responding promptly to all inquiries from NRZ Brokerage and its representatives, and completing appropriate follow-ups communications, (b) managing RHSS’s compliance with its obligation to provide services to NRZ Brokerage in accordance with the terms and conditions of the Agreement, (c) coordinating resolution of questions or issues, (d) managing RHSS’s fulfillment of Service Level Agreements, (e) managing actions items and deliver timely and accurate reports, and (f) managing and coordinate audits, in each case in accordance with the Agreement and this Vendor Management Addendum.
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10.
|
Engagement and Management of Vendors
. RHSS (or any Affiliate of RHSS relevant to the services provided to pursuant to the Agreement) may engage third-party vendors or RHSS-Affiliated entities related to such services, provided that (x) any such engagement of, or delegation of duties to, any vendor shall not relieve RHSS of any representations, warranties, covenants or obligations under the Agreement or this Vendor Management Addendum (except where such third-party vendors were engaged by RHSS at the direction of an NRZ entity), and (y) with respect to any such engagement, RHSS (or any such Affiliate of RHSS) shall:
|
a.
|
To the extent any costs or charges shall be passed on to NRZ Brokerage, New Residential Mortgage (or any subservicer of New Residential Mortgage), any securitization trust or any
|
b.
|
Engage each such vendor on terms and rates consistent with applicable laws and regulations;
|
c.
|
Maintain written policies and procedures relating to its vendor management practices that comply with applicable laws and regulations governing the supervision of service providers, including without limitation Compliance Bulletin and Policy Guidance 2016-02 published by the Consumer Financial Protection Bureau (or any applicable successor bulletin or guidance), and shall adhere to such policies and procedures;
|
d.
|
Require that any vendor engaged by RHSS (or by any RHSS Affiliate relevant to the services provided to an NRZ Entity pursuant to the Agreement) materially comply with all applicable laws and regulations all agreements governing such engagement;
|
e.
|
Require that any vendor engaged by RHSS (or by any RHSS Affiliate relevant to the services provided to an NRZ Entity pursuant to the Agreement) materially comply with RHSS or its Affiliates’ applicable vendor insurance requirements and minimum liability limits (including with respect to workers’ compensation insurance) which are customized and amended from time to time based on activities undertaken and services performed by the vendor.
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f.
|
Confirm that no vendor engaged by RHSS (or by any Affiliate of RHSS relevant to the services provided to an NRZ Entity pursuant to the Agreement) appears on any of the (i) Freddie Mac Exclusionary List (but solely to the extent an NRZ Entity is permitted to provide (and does provide) RHSS access to such list for the purpose of complying with this subsection), (ii) Specifically Designated Nationals and Blocked Persons List published by OFAC (as checked by RHSS on an annual basis), (iii) Suspended Counterparty Program list published by Federal Housing Finance Agency (as checked by RHSS on an annual basis) or (iv) RHSS’s (or such Affiliate’s) internal “do not use” vendor list, and shall promptly (A) notify NRZ Brokerage to the extent RHSS learns of any such vendor becoming subject to any such list, and (B) terminate such vendor immediately; and
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g.
|
Notify NRZ Brokerage as promptly as possible and in any event within five (5) business days RHSS (or any RHSS Affiliate relevant to the services provided to an NRZ Entity pursuant to the Agreement) becoming aware that any vendor engaged by RHSS (or by such Affiliate) has violated or failed to comply with any applicable laws or regulations, and/or has violated any applicable agreement with RHSS (or with such Affiliate), if such violation or failure to comply could reasonably be expected to materially adversely impact any Subject REO Referral, which notification shall include, without limitation, (i) a summary of such violation or non-compliance and (ii) an action plan for (A) remediating any existing violations or non-compliance by such vendor and preventing such violation or non-compliance in the future, or (B) terminating and, if necessary, replacing such vendor.
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11.
|
Cooperation with Governmental Authority Examinations; Cooperation with NRZ Brokerage Third Party Vendor Oversight Requirements
.
|
a.
|
Examinations
.
RHSS shall (and shall cause any Affiliate of RHSS relevant to the services provided to an NRZ Entity pursuant to the Agreement to) cooperate fully and comply in all respects with requests from NRZ Brokerage or any New Residential Affiliate, including but not limited to any examination, inquiry, routine request, subpoena, civil investigative demand, or similar ad hoc regulatory demand for information or request of any kind from any Governmental Authority to NRZ Brokerage or any New Residential Affiliate pertaining to the services provided by RHSS (or such RHSS Affiliate) under the Agreement. NRZ Brokerage shall (or shall cause such applicable New Residential Affiliate to) make use of its commercially reasonable best efforts to provide RHSS with as much written notice as reasonably practicable under the circumstances of such examination, inquiry, investigation or request; provided, that NRZ Brokerage shall (and shall cause such applicable New Residential Affiliate to):
|
i.
|
Notify RHSS in writing to this email address: NRZInfoRequest@altisource.com as promptly as reasonably possible based on the circumstances and the type of communication from such Governmental Authority, based on NRZ’s reasonable judgment, and in no event will unreasonably delay notifying RHSS of such request;
|
ii.
|
Consult with RHSS regarding RHSS’s reasonable estimation of the (A) time, (B) RHSS resources, and (C) RHSS costs that may result from any such request;
|
iii.
|
If NRZ Brokerage determines, based on such consultation but in NRZ Brokerage’s sole reasonable discretion, that it is (A) appropriate, (B) reasonable, and (C) without unreasonable risk to NRZ (or any New Residential Affiliate) to seek a modification to the request (including without limitation a narrowing of the request scope) or an extension of the Governmental Authority’s deadline, then NRZ Brokerage shall communicate such request to the Governmental Authority; and
|
iv.
|
If, subject to clause iii, any Governmental Authority agrees to extend such deadline, then NRZ Brokerage shall extend the deadline of NRZ Brokerage’s initial request, but NRZ Brokerage may, at its sole reasonable discretion, shorten the Governmental Authority’s extended deadline by up to two (2) business days.
|
b.
|
Additional Reporting or Testing
. Upon reasonable request and after reasonable notice by NRZ Brokerage from time to time, RHSS shall provide NRZ Brokerage with additional data, documentation, reporting or other information as may be reasonably required for NRZ Brokerage to comply with its internal third party vendor oversight policies and procedures, which may include, without limitation, such additional data, documentation or reporting that will be sufficient for NRZ Brokerage to (i) implement ongoing monitoring of RHSS’s compliance with applicable laws and regulations, (ii) implement periodic or ongoing compliance testing, or (iii) examine individual files relating to Subject REO Referrals for the purpose of manual asset-level compliance reviews. NRZ Brokerage shall provide prior written notice at least ten (10) business days prior to the deadline relating to any such additional requests, and shall work cooperatively with RHSS to minimize disruptions to RHSS’s business or operations resulting from such additional requests.
|
12.
|
Affiliate Information
. To the extent that the information requested pursuant to this Vendor Management Addendum seeks procedures, measures, practices, policies or other similar documents or information (“
Policies
”) pertaining to RHSS, such information requested can be satisfied by providing the
|
13.
|
Authorization to Receive Information
. NRZ Brokerage represents and warrants that it is permitted by the seller of the Subject REO Referrals to receive the information requested hereunder.
|
14.
|
Confidentiality
. NRZ Brokerage agrees to hold, and to cause its directors, officers, employees, affiliates, agents, accountants, auditors, counsel and other advisors and representatives (collectively, “
Representatives
”) to hold, in strict confidence, and shall not release or disclose, or permit to be released or disclosed, to any other person except its Representatives, any information, notes, analyses, compilations, reports, forecasts, studies, samples, data, statistics, summaries, interpretations, and other materials provided under this Vendor Management Addendum (collectively, “
Information
”), as well as any memoranda, notes, summaries or other materials created by or on behalf of NRZ Brokerage or its Representatives based on such Information, except to the extent that such information has been (i) in the public domain through no fault of such party or any of their respective directors, officers, employees, affiliates, agents, accountants, auditors, counsel and other advisors and representatives, (ii) later lawfully acquired from other sources by such party, which sources are not known by such party to be themselves bound by a confidentiality obligation, (iii) independently generated without reference to any proprietary or confidential information (collectively, “
Confidential Information
”). Notwithstanding anything to the contrary in this
Section 14
, NRZ Brokerage (or any applicable New Residential Affiliate) shall be permitted to disclose information provided pursuant to
Section 11(a)
to a Governmental Authority, solely to the extent required to respond to the Governmental Authority.
|
1.
|
Commercial General Liability (CGL) coverage with limits of insurance of not less than $[***] each occurrence and $[***] annual aggregate.
|
a.
|
CGL coverage shall be written on ISO Occurrence form CG 00 01 1093 or such other coverage that is currently commercially reasonably available to RHSS or its Affiliates in the market at the time of purchase of the coverage and shall cover liability arising from premises, operations, independent contractors, products-completed operations, and personal and advertising injury.
|
b.
|
NRZ Brokerage shall be included as an additional insured on the CGL, using ISO Additional Insured Endorsement CG 20 10 11 85 or such other coverage that is currently commercially reasonably available to RHSS or its Affiliates in the market at the time of purchase of the coverage. Where commercially reasonable, coverage for the additional insureds shall apply as primary and non-contributing insurance before any other insurance or self-insurance, including any deductible, maintained by, or provided to, the additional insureds.
|
2.
|
Automobile Liability
|
a.
|
Business auto liability with limits of at least $[***] each accident.
|
b.
|
Business auto coverage must include coverage for liability arising out of all owned, leased, hired and non-owned automobiles.
|
c.
|
RHSS will list NRZ Brokerage as an additional insured on the auto policy.
|
3.
|
Commercial Umbrella
|
a.
|
Umbrella limits must be at least $[***].
|
b.
|
Umbrella coverage must, unless prohibited by the applicable insurer on commercially reasonable terms, include as additional insureds all entities that are additional insureds on the CGL.
|
c.
|
Umbrella coverage for such additional insureds shall, unless prohibited by the applicable insurer on commercially reasonable terms, apply as primary before any other insurance or self-insurance, including any deductible, maintained by, or
|
4.
|
Workers’ Compensation and Employers Liability
|
a.
|
Workers’ compensation or employers liability insurance limits of at least $[***] each accident for bodily injury by accident and $[***] each employee for injury by disease.
|
b.
|
Where applicable, U.S. Longshore and Harborworkers Compensation Act Endorsement shall be attached to the policy.
|
5.
|
Errors & Omissions
|
a.
|
Professional Liability Insurance limits of at least $[***]
|
b.
|
Unless prohibited by the applicable insurer on commercially reasonable terms and to the extent the insurer has agreed to remove the insured v. insured exclusion and the requirement that coverage only applies to professional services provided to “others”, such insurance shall include a provision naming NRZ Brokerage as additional insured
|
6.
|
Cyber Liability
|
a.
|
Contractor will maintain a cyber policy (security & privacy insurance with electronic media liability) with limits of at least $[***]
|
b.
|
Unless prohibited by the applicable insurer on commercially reasonable terms, the cyber policy shall include a provision naming NRZ Brokerage as additional insured and also include a statement that any insured versus insured exclusion will not apply
|
7.
|
Crime
|
a.
|
Commercial crime policy with limits of at least $[***]
|
b.
|
Insurance shall include a provision covering employee theft of NRZ Brokerage’s property, including money or securities
|
c.
|
Unless prohibited by the applicable insurer on commercially reasonable terms, the commercial crime policy shall include a provision naming NRZ Brokerage as loss payee
|
SLA Based Operational Reporting
|
||||
#
|
Report Name
|
Description
|
Output Format
|
Delivery Package Name
|
1
|
[***]
|
[***]
|
PDF
|
Monthly Business Review Deck
|
2
|
[***]
|
[***]
|
PDF
|
Monthly Business Review Deck
|
3
|
[***]
|
[***]
|
PDF
|
Monthly Business Review Deck
|
4
|
[***]
|
[***]
|
PDF
|
Monthly Business Review Deck
|
Non-SLA Based Operational Reporting
|
|||||
#
|
Report Name
|
Description
|
Fields
|
Output Format
|
Delivery Package Name
|
1
|
Sales by Altisource brokers versus third party broker
|
Aggregated dashboard representing the trailing twelve month trend on REO monthly sales split by RHSS and third party broker
|
N/A
|
PDF
|
Monthly Business Review Deck
|
2
|
Number of auction cycles before sale
|
Aggregated dashboard on Hubzu performance representing the trailing twelve month trend on REO monthly sales by number of auction cycles
|
N/A
|
PDF
|
Monthly Business Review Deck
|
3
|
Sales price versus listing price
|
Aggregated dashboard representing the trailing twelve month trend on Net Sales Price by most recent Listing Price for all REO sales in a given month
|
N/A
|
PDF
|
Monthly Business Review Deck
|
Non-SLA Based Operational Reporting
|
|||||
4
|
Sales price versus reverse price
|
Aggregated dashboard representing the trailing twelve month trend on Net Sales Price by most recent Reserve Price for all REO sales in a given month
|
N/A
|
PDF
|
Monthly Business Review Deck
|
5
|
Number of properties that do not receive any bids
|
Aggregated tabular view of the current inventory of all REO properties in active Hubzu listing that did not receive a bid across value bands and listing timeline
|
N/A
|
PDF
|
Monthly Business Review Deck
|
6
|
Number of properties that do not receive any bids above reserve
|
Aggregated tabular view of the current inventory of all REO properties in active Hubzu listing that did not receive a bid above reserve across value bands and listing timeline
|
N/A
|
PDF
|
Monthly Business Review Deck
|
7
|
Sales performance (liquidation rates, average days on market, price to pre-sales market value) by states and/or MSAs
|
Geographical state wise view of the trailing twelve month trend on REO monthly sales performance in terms of liquidation rate, days on market and net sale price by most recent pre-sales market value
|
N/A
|
PDF
|
Monthly Business Review Deck
|
8
|
Sales performance by urban versus suburban versus rural
|
Aggregated dashboard representing the trailing twelve month trend on REO monthly sales split by geographical areas such as urban, rural etc.
|
N/A
|
PDF
|
Monthly Business Review Deck
|
9
|
Sales performance by sales price buckets
|
Aggregated dashboard representing the trailing twelve month trend on REO monthly sales across value bands
|
N/A
|
PDF
|
Monthly Business Review Deck
|
10
|
Sales performance by property type (standalone home vs townhome vs condo)
|
Aggregated dashboard representing the trailing twelve month trend on REO monthly sales split by property type
|
N/A
|
PDF
|
Monthly Business Review Deck
|
Non-SLA Based Operational Reporting
|
|||||
11
|
Price to pre-sales market value days on market
|
1. Price to Pre-Sales Market Value: Covered in SLA reporting
2. Days on Market: Aggregated dashboard representing the trailing twelve month trend on REO monthly sales by days on market |
N/A
|
PDF
|
Monthly Business Review Deck
|
12
|
Sales volume by ASPS escrow agent versus third party
|
Aggregated dashboard representing the trailing twelve month trend on REO monthly sales split by closing office type (Premium Title vs non-Premium Title)
|
N/A
|
PDF
|
Monthly Business Review Deck
|
13
|
MTD Closings Report
|
Property level report on all daily REO closings for the day
|
1. Report Date
2. Loan Number 3. Address 4. State 5. Zip 6. Referral Date 7. Acquisition Date 8. Sale Date 9. Sale Price 10. Closing Office Type (In-house / 3rd Party) 11. NRZ Commission ($) 12. NRZ Commission (%) 13. Wire Receipt Date |
Excel
|
MTD Sales Report
|
Non-SLA Based Operational Reporting
|
|||||
14
|
New Listing Report (Monthly)
|
Property level report on all new listing in a given month
|
1. Report Date
2. Loan Number 3. Address 4. State 5. Zip 6. Referral Date 7. Acquisition Date 8. Days Since Acquisition 9. First List Date 10. First List Price 11. NRZ Commission (%) 12. RHSS Commission (%) 13. Minimum RHSS Commission ($) 14. Buyer Agent Commission (%) 15. Minimum Buyer Agent Commission ($) |
Excel
|
New Listing Report
|
|
NEW RESIDENTIAL INVESTMENT CORP.
By:
/s/ Nicola Santoro, Jr.
Name: Nicola Santoro, Jr.
Title: Chief Financial Officer
|
|
|
|
NEW RESIDENTIAL MORTGAGE LLC
By:
/s/ Nicola Santoro, Jr.
Name: Nicola Santoro, Jr.
Title: Chief Financial Officer and Chief Operating Officer
|
|
REALHOME SERVICES AND SOLUTIONS, INC.
By:
/s/ Min L. Alexander
Name: Min L. Alexander
Title: President and Chief Executive Officer
REALHOME SERVICES AND SOLUTIONS – CT, INC.:
By:
/s/ Min L. Alexander
Name: Min L. Alexander
Title: President and Chief Executive Officer
|
|
ALTISOURCE SOLUTIONS S.Á. R.L.
By:
By:
/s/ Kevin J. Wilcox
Name: Kevin J. Wilcox
Title: Manager
|
|
[Servicer]
|
|
|
|
By:
|
|
|
|
Name:
|
|
|
|
Title:
|
|
|
|
Witness:
|
|
|
|
Name:
|
|
|
|
Title:
|
|
|
|
Witness:
|
|
|
|
Name:
|
|
|
|
Title:
|
|
|
|
|
|
Notary Public Name:
|
|
My Commission expires:
|
1.
|
I have reviewed this quarterly report on Form 10-Q of New Residential Investment Corp.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
November 1, 2017
|
/s/ Michael Nierenberg
|
|
Michael Nierenberg
|
|
Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of New Residential Investment Corp.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
November 1, 2017
|
/s/ Nicola Santoro, Jr.
|
|
Nicola Santoro, Jr.
|
|
Chief Financial Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(1)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
November 1, 2017
|
/s/ Michael Nierenberg
|
|
Michael Nierenberg
|
|
Chief Executive Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
November 1, 2017
|
/s/ Nicola Santoro, Jr.
|
|
Nicola Santoro, Jr.
|
|
Chief Financial Officer
|