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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended June 30, 2017
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from: ____________________ to ____________________
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Florida
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65-0039856
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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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1661 Worthington Road, Suite 100
West Palm Beach, Florida
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33409
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(Address of principal executive office)
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(Zip Code)
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Large Accelerated filer
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o
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Accelerated filer
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x
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Non-accelerated filer
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(Do not check if a smaller reporting company)
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Smaller reporting company
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o
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Emerging growth company
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o
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•
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uncertainty related to claims, litigation, cease and desist orders and investigations brought by government agencies and private parties regarding our servicing, foreclosure, modification, origination and other practices, including uncertainty related to past, present or future investigations, litigation, cease and desist orders and settlements with state regulators, the Consumer Financial Protection Bureau (CFPB), State Attorneys General, the Securities and Exchange Commission (SEC), the Department of Justice or the Department of Housing and Urban Development (HUD) and actions brought under the False Claims Act by private parties on behalf of the United States of America regarding incentive and other payments made by governmental entities;
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•
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adverse effects on our business as a result of regulatory investigations, litigation, cease and desist orders or settlements;
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reactions to the announcement of such investigations, litigation, cease and desist orders or settlements by key counterparties, including lenders;
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•
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increased regulatory scrutiny and media attention;
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any adverse developments in existing legal proceedings or the initiation of new legal proceedings;
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our ability to effectively manage our regulatory and contractual compliance obligations;
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•
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the adequacy of our financial resources, including our sources of liquidity and ability to sell, fund and recover advances, repay borrowings and comply with our debt agreements, including the financial and other covenants contained in them;
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•
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our servicer and credit ratings as well as other actions from various rating agencies, including the impact of prior or future downgrades of our servicer and credit ratings;
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•
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volatility in our stock price;
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•
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the characteristics of our servicing portfolio, including prepayment speeds along with delinquency and advance rates;
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•
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our ability to contain and reduce our operating costs, including our ability to successfully execute on our cost improvement initiative;
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•
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our ability to successfully modify delinquent loans, manage foreclosures and sell foreclosed properties;
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•
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uncertainty related to legislation, regulations, regulatory agency actions, regulatory examinations, government programs and policies, industry initiatives and evolving best servicing practices;
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•
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our dependence on New Residential Investment Corp. (NRZ) for a substantial portion of our advance funding for non-agency mortgage servicing rights;
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•
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our ability to timely transfer mortgage servicing rights under our July 2017 agreements with NRZ and our ability to maintain our long-term relationship with NRZ under these new arrangements;
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•
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the loss of the services of our senior managers;
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uncertainty related to general economic and market conditions, delinquency rates, home prices and disposition timelines on foreclosed properties;
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•
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uncertainty related to the actions of loan owners and guarantors, including mortgage-backed securities investors, the Government National Mortgage Association (Ginnie Mae), trustees and government sponsored entities (GSEs), regarding loan put-backs, penalties and legal actions;
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•
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our ability to comply with our servicing agreements, including our ability to comply with our agreements with GSEs and Ginnie Mae and maintain our seller/servicer and other statuses with them;
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•
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uncertainty related to the GSEs substantially curtailing or ceasing to purchase our conforming loan originations or the Federal Housing Administration of the Department of Housing and Urban Development or Department of Veterans Affairs ceasing to provide insurance;
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•
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uncertainty related to the processes for judicial and non-judicial foreclosure proceedings, including potential additional costs or delays or moratoria in the future or claims pertaining to past practices;
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our reserves, valuations, provisions and anticipated realization on assets;
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•
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uncertainty related to the ability of third-party obligors and financing sources to fund servicing advances on a timely basis on loans serviced by us;
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•
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uncertainty related to the ability of our technology vendors to adequately maintain and support our systems, including our servicing systems, loan originations and financial reporting systems;
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•
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our ability to realize anticipated future gains from future draws on existing loans in our reverse mortgage portfolio;
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•
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our ability to effectively manage our exposure to interest rate changes and foreign exchange fluctuations;
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uncertainty related to our ability to adapt and grow our business, including our new business initiatives;
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our ability to meet capital requirements established by regulators or counterparties;
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our ability to protect and maintain our technology systems and our ability to adapt such systems for future operating environments;
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•
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failure of our internal information technology and other security measures or breach of our privacy protections; and
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•
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uncertainty related to the political or economic stability of foreign countries in which we have operations.
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June 30, 2017
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December 31, 2016
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||||
Assets
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Cash
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$
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251,472
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$
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256,549
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Mortgage servicing rights ($625,650 and $679,256 carried at fair value)
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975,185
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1,042,978
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Advances, net
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219,214
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257,882
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Match funded assets (related to variable interest entities (VIEs))
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1,292,908
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1,451,964
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Loans held for sale ($239,490 and $284,632 carried at fair value)
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260,959
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314,006
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Loans held for investment, at fair value
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4,223,776
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3,565,716
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Receivables, net
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252,797
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265,720
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Premises and equipment, net
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56,409
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62,744
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Other assets ($18,037 and $20,007 carried at fair value) ($26,570 and $43,331 related to VIEs)
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399,672
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438,104
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Total assets
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$
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7,932,392
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$
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7,655,663
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Liabilities and Equity
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Liabilities
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HMBS-related borrowings, at fair value
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$
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4,061,626
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$
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3,433,781
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Other financing liabilities ($441,007 and $477,707 carried at fair value)
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533,806
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579,031
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Match funded liabilities (related to VIEs)
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1,108,377
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1,280,997
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Other secured borrowings, net
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643,860
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678,543
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Senior notes, net
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347,063
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346,789
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Other liabilities ($11 and $1,550 carried at fair value)
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657,413
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681,239
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Total liabilities
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7,352,145
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7,000,380
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Commitments and Contingencies (Notes 18 and 19)
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Equity
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Ocwen Financial Corporation (Ocwen) stockholders’ equity
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Common stock, $.01 par value; 200,000,000 shares authorized; 124,778,548 and 123,988,160 shares issued and outstanding at June 30, 2017 and December 31, 2016, respectively
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1,248
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1,240
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Additional paid-in capital
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529,188
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527,001
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Retained earnings
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48,652
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126,167
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Accumulated other comprehensive loss, net of income taxes
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(1,338
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)
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(1,450
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)
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Total Ocwen stockholders’ equity
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577,750
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652,958
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Non-controlling interest in subsidiaries
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2,497
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2,325
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Total equity
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580,247
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655,283
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Total liabilities and equity
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$
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7,932,392
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$
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7,655,663
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For the Three Months Ended June 30,
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For the Six Months Ended June 30,
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||||||||||||
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2017
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2016
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2017
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2016
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||||||||
Revenue
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Servicing and subservicing fees
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$
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255,801
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$
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307,262
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$
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528,303
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$
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604,758
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Gain on loans held for sale, net
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28,255
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27,857
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51,199
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43,429
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||||
Other
|
27,244
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37,935
|
|
|
53,662
|
|
|
55,624
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|
||||
Total revenue
|
311,300
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|
|
373,054
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|
633,164
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|
703,811
|
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||||
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||||||||
Expenses
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|
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|
||||||
Compensation and benefits
|
90,411
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98,422
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|
182,212
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|
|
194,671
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|
||||
Servicing and origination
|
64,516
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|
89,987
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|
132,423
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|
185,679
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|
||||
Professional services
|
65,405
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121,399
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|
107,234
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|
|
192,306
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|
||||
Technology and communications
|
24,254
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|
|
32,709
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|
|
51,601
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|
|
59,578
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|
||||
Occupancy and equipment
|
16,480
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|
20,708
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|
34,229
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|
45,453
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|
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Amortization of mortgage servicing rights
|
12,697
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|
|
8,347
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|
|
25,412
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|
|
21,153
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|
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Other
|
6,717
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|
13,446
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23,752
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|
|
14,835
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|
||||
Total expenses
|
280,480
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|
|
385,018
|
|
|
556,863
|
|
|
713,675
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|
||||
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|
|
|
|
|
|
||||||||
Other income (expense)
|
|
|
|
|
|
|
|
||||||||
Interest income
|
4,239
|
|
|
5,140
|
|
|
8,002
|
|
|
9,330
|
|
||||
Interest expense
|
(81,128
|
)
|
|
(91,033
|
)
|
|
(165,190
|
)
|
|
(197,122
|
)
|
||||
Gain on sale of mortgage servicing rights, net
|
1,033
|
|
|
853
|
|
|
1,320
|
|
|
2,028
|
|
||||
Other, net
|
3,428
|
|
|
606
|
|
|
7,461
|
|
|
(2,895
|
)
|
||||
Total other expense, net
|
(72,428
|
)
|
|
(84,434
|
)
|
|
(148,407
|
)
|
|
(188,659
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Loss before income taxes
|
(41,608
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)
|
|
(96,398
|
)
|
|
(72,106
|
)
|
|
(198,523
|
)
|
||||
Income tax expense (benefit)
|
2,828
|
|
|
(9,180
|
)
|
|
4,953
|
|
|
(104
|
)
|
||||
Net loss
|
(44,436
|
)
|
|
(87,218
|
)
|
|
(77,059
|
)
|
|
(198,419
|
)
|
||||
Net income attributable to non-controlling interests
|
(71
|
)
|
|
(160
|
)
|
|
(172
|
)
|
|
(290
|
)
|
||||
Net loss attributable to Ocwen stockholders
|
$
|
(44,507
|
)
|
|
$
|
(87,378
|
)
|
|
$
|
(77,231
|
)
|
|
$
|
(198,709
|
)
|
|
|
|
|
|
|
|
|
||||||||
Loss per share attributable to Ocwen stockholders
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(0.36
|
)
|
|
$
|
(0.71
|
)
|
|
$
|
(0.62
|
)
|
|
$
|
(1.60
|
)
|
Diluted
|
$
|
(0.36
|
)
|
|
$
|
(0.71
|
)
|
|
$
|
(0.62
|
)
|
|
$
|
(1.60
|
)
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding
|
|
|
|
|
|
|
|
||||||||
Basic
|
124,582,280
|
|
|
123,893,752
|
|
|
124,300,171
|
|
|
123,993,545
|
|
||||
Diluted
|
124,582,280
|
|
|
123,893,752
|
|
|
124,300,171
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|
|
123,993,545
|
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net loss
|
$
|
(44,436
|
)
|
|
$
|
(87,218
|
)
|
|
$
|
(77,059
|
)
|
|
$
|
(198,419
|
)
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income, net of income taxes:
|
|
|
|
|
|
|
|
|
|
|
|||||
Reclassification adjustment for losses on cash flow hedges included in net income (1)
|
45
|
|
|
70
|
|
|
112
|
|
|
175
|
|
||||
Other
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
||||
Total other comprehensive income, net of income taxes
|
45
|
|
|
69
|
|
|
112
|
|
|
174
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Comprehensive loss
|
(44,391
|
)
|
|
(87,149
|
)
|
|
(76,947
|
)
|
|
(198,245
|
)
|
||||
Comprehensive income attributable to non-controlling interests
|
(71
|
)
|
|
(160
|
)
|
|
(172
|
)
|
|
(290
|
)
|
||||
Comprehensive loss attributable to Ocwen stockholders
|
$
|
(44,462
|
)
|
|
$
|
(87,309
|
)
|
|
$
|
(77,119
|
)
|
|
$
|
(198,535
|
)
|
(1)
|
These losses are reclassified to Other, net in the unaudited consolidated statements of operations.
|
|
Ocwen Stockholders
|
|
|
|
|
|||||||||||||||||||||
|
Common Stock
|
|
Additional Paid-in
Capital
|
|
Retained
Earnings
|
|
Accumulated Other Comprehensive Income (Loss), Net of Taxes
|
|
Non-controlling Interest in Subsidiaries
|
|
Total
|
|||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|
||||||||||||||||||
Balance at December 31, 2016
|
123,988,160
|
|
|
$
|
1,240
|
|
|
$
|
527,001
|
|
|
$
|
126,167
|
|
|
$
|
(1,450
|
)
|
|
$
|
2,325
|
|
|
$
|
655,283
|
|
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
(77,231
|
)
|
|
—
|
|
|
172
|
|
|
(77,059
|
)
|
||||||
Cumulative effect of adoption of FASB Accounting Standards Update No. 2016-09
|
—
|
|
|
—
|
|
|
284
|
|
|
(284
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Equity-based compensation and other
|
790,388
|
|
|
8
|
|
|
1,903
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,911
|
|
||||||
Other comprehensive income, net of income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
112
|
|
|
—
|
|
|
112
|
|
||||||
Balance at June 30, 2017
|
124,778,548
|
|
|
$
|
1,248
|
|
|
$
|
529,188
|
|
|
$
|
48,652
|
|
|
$
|
(1,338
|
)
|
|
$
|
2,497
|
|
|
$
|
580,247
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at December 31, 2015
|
124,774,516
|
|
|
$
|
1,248
|
|
|
$
|
526,148
|
|
|
$
|
325,929
|
|
|
$
|
(1,763
|
)
|
|
$
|
3,076
|
|
|
$
|
854,638
|
|
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
(198,709
|
)
|
|
—
|
|
|
290
|
|
|
(198,419
|
)
|
||||||
Repurchase of common stock
|
(991,985
|
)
|
|
(10
|
)
|
|
(5,880
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,890
|
)
|
||||||
Exercise of common stock options
|
69,805
|
|
|
1
|
|
|
441
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
442
|
|
||||||
Equity-based compensation and other
|
134,618
|
|
|
1
|
|
|
3,344
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,345
|
|
||||||
Capital distribution to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,138
|
)
|
|
(1,138
|
)
|
||||||
Other comprehensive income, net of income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
174
|
|
|
—
|
|
|
174
|
|
||||||
Balance at June 30, 2016
|
123,986,954
|
|
|
$
|
1,240
|
|
|
$
|
524,053
|
|
|
$
|
127,220
|
|
|
$
|
(1,589
|
)
|
|
$
|
2,228
|
|
|
$
|
653,152
|
|
|
For the Six Months Ended June 30,
|
||||||
|
2017
|
|
2016
|
||||
Cash flows from operating activities
|
|
|
|
|
|
||
Net loss
|
$
|
(77,059
|
)
|
|
$
|
(198,419
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
|
|
||
Amortization of mortgage servicing rights
|
25,412
|
|
|
21,153
|
|
||
Loss on valuation of mortgage servicing rights, at fair value
|
51,959
|
|
|
59,104
|
|
||
Impairment of mortgage servicing rights
|
4,650
|
|
|
39,030
|
|
||
Gain on sale of mortgage servicing rights, net
|
(1,320
|
)
|
|
(2,028
|
)
|
||
Realized and unrealized (gains) losses on derivative financial instruments
|
(31
|
)
|
|
2,080
|
|
||
Provision for bad debts
|
31,918
|
|
|
32,785
|
|
||
Depreciation
|
13,439
|
|
|
11,850
|
|
||
Amortization of debt issuance costs
|
1,334
|
|
|
6,498
|
|
||
Equity-based compensation expense
|
3,263
|
|
|
3,079
|
|
||
Net gain on valuation of mortgage loans held for investment and HMBS-related borrowings
|
(11,381
|
)
|
|
(14,451
|
)
|
||
Gain on loans held for sale, net
|
(29,512
|
)
|
|
(35,794
|
)
|
||
Origination and purchase of loans held for sale
|
(2,243,475
|
)
|
|
(2,883,124
|
)
|
||
Proceeds from sale and collections of loans held for sale
|
2,217,259
|
|
|
2,789,433
|
|
||
Changes in assets and liabilities:
|
|
|
|
|
|
||
Decrease in advances and match funded assets
|
226,742
|
|
|
215,525
|
|
||
Decrease in receivables and other assets, net
|
87,548
|
|
|
75,208
|
|
||
(Decrease) increase in other liabilities
|
(28,053
|
)
|
|
40,955
|
|
||
Other, net
|
8,043
|
|
|
9,285
|
|
||
Net cash provided by operating activities
|
280,736
|
|
|
172,169
|
|
||
|
|
|
|
||||
Cash flows from investing activities
|
|
|
|
|
|
||
Origination of loans held for investment
|
(698,473
|
)
|
|
(675,665
|
)
|
||
Principal payments received on loans held for investment
|
192,569
|
|
|
238,838
|
|
||
Purchase of mortgage servicing rights
|
(1,657
|
)
|
|
(12,432
|
)
|
||
Proceeds from sale of mortgage servicing rights
|
1,464
|
|
|
15,122
|
|
||
Proceeds from sale of advances
|
3,719
|
|
|
66,651
|
|
||
Issuance of automotive dealer financing notes
|
(85,076
|
)
|
|
—
|
|
||
Collections of automotive dealer financing notes
|
76,264
|
|
|
—
|
|
||
Additions to premises and equipment
|
(7,243
|
)
|
|
(17,312
|
)
|
||
Other
|
2,277
|
|
|
8,179
|
|
||
Net cash used in investing activities
|
(516,156
|
)
|
|
(376,619
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities
|
|
|
|
|
|
||
Repayment of match funded liabilities, net
|
(172,620
|
)
|
|
(152,668
|
)
|
||
Proceeds from mortgage loan warehouse facilities and other secured borrowings
|
4,216,466
|
|
|
4,173,609
|
|
||
Repayments of mortgage loan warehouse facilities and other secured borrowings
|
(4,475,642
|
)
|
|
(4,368,903
|
)
|
||
Payment of debt issuance costs
|
(841
|
)
|
|
(2,242
|
)
|
||
Proceeds from sale of reverse mortgages (HECM loans) accounted for as a financing (HMBS-related borrowings)
|
664,453
|
|
|
522,981
|
|
||
Repurchase of common stock
|
—
|
|
|
(5,890
|
)
|
||
Other
|
(1,473
|
)
|
|
(794
|
)
|
||
Net cash provided by financing activities
|
230,343
|
|
|
166,093
|
|
||
|
|
|
|
||||
Net decrease in cash
|
(5,077
|
)
|
|
(38,357
|
)
|
||
Cash at beginning of year
|
256,549
|
|
|
257,272
|
|
||
Cash at end of period
|
$
|
251,472
|
|
|
$
|
218,915
|
|
|
|
|
|
•
|
Within the operating activities section, we reclassified Net gain on valuation of mortgage loans held for investment and HMBS-related borrowings from Other to a new separate line item. In addition, we reclassified amounts related to reverse mortgages from Gain on loans held for sale, net to Other.
|
•
|
Within the financing activities section, we reclassified Proceeds from exercise of stock options to Other.
|
•
|
Within the total assets section, we reclassified Deferred tax assets, net to Other assets.
|
•
|
Within the total liabilities section, we reclassified HMBS-related borrowings from Financing liabilities to a new separate line item.
|
Periods ended June 30,
|
Three Months
|
|
Six Months
|
||||||||||||
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||
Proceeds received from securitizations
|
$
|
1,022,152
|
|
|
$
|
1,357,206
|
|
|
$
|
2,024,149
|
|
|
$
|
2,366,470
|
|
Servicing fees collected
|
9,843
|
|
|
3,549
|
|
|
19,950
|
|
|
6,673
|
|
||||
Purchases of previously transferred assets, net of claims reimbursed
|
(1,737
|
)
|
|
(766
|
)
|
|
(2,724
|
)
|
|
(779
|
)
|
||||
|
$
|
1,030,258
|
|
|
$
|
1,359,989
|
|
|
$
|
2,041,375
|
|
|
$
|
2,372,364
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
Carrying value of assets:
|
|
|
|
||||
Mortgage servicing rights, at amortized cost
|
$
|
101,854
|
|
|
$
|
94,492
|
|
Mortgage servicing rights, at fair value
|
227
|
|
|
233
|
|
||
Advances and match funded advances
|
52,021
|
|
|
37,336
|
|
||
UPB of loans transferred
|
11,588,074
|
|
|
10,485,697
|
|
||
Maximum exposure to loss
|
$
|
11,742,176
|
|
|
$
|
10,617,758
|
|
Level 1:
|
Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date.
|
Level 2:
|
Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly.
|
Level 3:
|
Unobservable inputs for the asset or liability.
|
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||||||||||
|
Level
|
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
||||||||
Financial assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loans held for sale:
|
|
|
|
|
|
|
|
|
|
||||||||
Loans held for sale, at fair value (a)
|
2
|
|
$
|
239,490
|
|
|
$
|
239,490
|
|
|
$
|
284,632
|
|
|
$
|
284,632
|
|
Loans held for sale, at lower of cost or fair value (b)
|
3
|
|
21,469
|
|
|
21,469
|
|
|
29,374
|
|
|
29,374
|
|
||||
Total Loans held for sale
|
|
|
$
|
260,959
|
|
|
$
|
260,959
|
|
|
$
|
314,006
|
|
|
$
|
314,006
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Loans held for investment (a)
|
3
|
|
$
|
4,223,776
|
|
|
$
|
4,223,776
|
|
|
$
|
3,565,716
|
|
|
$
|
3,565,716
|
|
Advances (including match funded) (c)
|
3
|
|
1,478,255
|
|
|
1,478,255
|
|
|
1,709,846
|
|
|
1,709,846
|
|
||||
Automotive dealer financing notes (including match funded) (c)
|
3
|
|
33,867
|
|
|
33,527
|
|
|
33,224
|
|
|
33,147
|
|
||||
Receivables, net (c)
|
3
|
|
252,797
|
|
|
252,797
|
|
|
265,720
|
|
|
265,720
|
|
||||
Mortgage-backed securities, at fair value (a)
|
3
|
|
8,986
|
|
|
8,986
|
|
|
8,342
|
|
|
8,342
|
|
||||
U.S. Treasury notes (a)
|
1
|
|
2,076
|
|
|
2,076
|
|
|
2,078
|
|
|
2,078
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Match funded liabilities (c)
|
3
|
|
$
|
1,108,377
|
|
|
$
|
1,103,202
|
|
|
$
|
1,280,997
|
|
|
$
|
1,275,059
|
|
Financing liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||
HMBS-related borrowings, at fair value (a)
|
3
|
|
$
|
4,061,626
|
|
|
$
|
4,061,626
|
|
|
$
|
3,433,781
|
|
|
$
|
3,433,781
|
|
Financing liability - MSRs pledged, at fair value (a)
|
3
|
|
441,007
|
|
|
441,007
|
|
|
477,707
|
|
|
477,707
|
|
||||
Other (c)
|
3
|
|
92,799
|
|
|
73,154
|
|
|
101,324
|
|
|
81,805
|
|
||||
Total Financing liabilities
|
|
|
$
|
4,595,432
|
|
|
$
|
4,575,787
|
|
|
$
|
4,012,812
|
|
|
$
|
3,993,293
|
|
Other secured borrowings:
|
|
|
|
|
|
|
|
|
|
||||||||
Senior secured term loan (c) (d)
|
2
|
|
$
|
316,739
|
|
|
$
|
326,625
|
|
|
$
|
323,514
|
|
|
$
|
327,674
|
|
Other (c)
|
3
|
|
327,121
|
|
|
327,121
|
|
|
355,029
|
|
|
355,029
|
|
||||
Total Other secured borrowings
|
|
|
$
|
643,860
|
|
|
$
|
653,746
|
|
|
$
|
678,543
|
|
|
$
|
682,703
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||||||||||
|
Level
|
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
||||||||
Senior notes:
|
|
|
|
|
|
|
|
|
|
||||||||
Senior unsecured notes (c) (d)
|
2
|
|
$
|
3,100
|
|
|
$
|
2,948
|
|
|
$
|
3,094
|
|
|
$
|
3,048
|
|
Senior secured notes (c) (d)
|
2
|
|
343,963
|
|
|
332,136
|
|
|
$
|
343,695
|
|
|
352,255
|
|
|||
Total Senior notes
|
|
|
$
|
347,063
|
|
|
$
|
335,084
|
|
|
$
|
346,789
|
|
|
$
|
355,303
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivative financial instruments assets (liabilities), at fair value (a):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest rate lock commitments
|
2
|
|
$
|
5,352
|
|
|
$
|
5,352
|
|
|
$
|
6,507
|
|
|
$
|
6,507
|
|
Forward mortgage-backed securities
|
1
|
|
1,752
|
|
|
1,752
|
|
|
(614
|
)
|
|
(614
|
)
|
||||
Interest rate caps
|
3
|
|
1,937
|
|
|
1,937
|
|
|
1,836
|
|
|
1,836
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
Mortgage servicing rights:
|
|
|
|
|
|
|
|
|
|
||||||||
Mortgage servicing rights, at fair value (a)
|
3
|
|
$
|
625,650
|
|
|
$
|
625,650
|
|
|
$
|
679,256
|
|
|
$
|
679,256
|
|
Mortgage servicing rights, at amortized cost (c) (e)
|
3
|
|
349,535
|
|
|
440,311
|
|
|
363,722
|
|
|
467,911
|
|
||||
Total Mortgage servicing rights
|
|
|
$
|
975,185
|
|
|
$
|
1,065,961
|
|
|
$
|
1,042,978
|
|
|
$
|
1,147,167
|
|
(a)
|
Measured at fair value on a recurring basis.
|
(b)
|
Measured at fair value on a non-recurring basis.
|
(c)
|
Disclosed, but not carried, at fair value.
|
(d)
|
The carrying values are net of unamortized debt issuance costs and discount. See
Note 11 – Borrowings
for additional information
.
|
(e)
|
Balances include the impaired government-insured stratum of amortization method MSRs, which is measured at fair value on a non-recurring basis and reported net of the valuation allowance. Before applying the valuation allowance of
$32.8 million
, the carrying value of the impaired stratum at
June 30, 2017
was
$168.3 million
. At
December 31, 2016
, the carrying value of this stratum was
$172.9 million
before applying the valuation allowance of
$28.2 million
.
|
|
Loans Held for Investment - Reverse Mortgages
|
|
HMBS-Related Borrowings
|
|
Mortgage-Backed Securities
|
|
Financing Liability - MSRs Pledged
|
|
Derivatives
|
|
MSRs
|
|
Total
|
||||||||||||||
Three months ended June 30, 2017
|
|||||||||||||||||||||||||||
Beginning balance
|
$
|
3,916,387
|
|
|
$
|
(3,739,265
|
)
|
|
$
|
8,658
|
|
|
$
|
(459,187
|
)
|
|
$
|
2,262
|
|
|
$
|
651,987
|
|
|
$
|
380,842
|
|
Purchases, issuances, sales and settlements:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Purchases
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Issuances
|
351,392
|
|
|
(357,704
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(711
|
)
|
|
(7,023
|
)
|
|||||||
Sales
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(2
|
)
|
|||||||
Transfers to Real estate (Other assets)
|
(1,423
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,423
|
)
|
|||||||
Settlements (1)
|
(112,279
|
)
|
|
101,132
|
|
|
—
|
|
|
16,194
|
|
|
(42
|
)
|
|
—
|
|
|
5,005
|
|
|||||||
|
237,690
|
|
|
(256,572
|
)
|
|
—
|
|
|
16,194
|
|
|
(42
|
)
|
|
(713
|
)
|
|
(3,443
|
)
|
|||||||
Total realized and unrealized gains and (losses) (2):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Included in earnings
|
69,699
|
|
|
(65,789
|
)
|
|
328
|
|
|
1,986
|
|
|
(283
|
)
|
|
(25,624
|
)
|
|
(19,683
|
)
|
|||||||
Transfers in and / or out of Level 3
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Ending balance
|
$
|
4,223,776
|
|
|
$
|
(4,061,626
|
)
|
|
$
|
8,986
|
|
|
$
|
(441,007
|
)
|
|
$
|
1,937
|
|
|
$
|
625,650
|
|
|
$
|
357,716
|
|
|
Loans Held for Investment - Reverse Mortgages
|
|
HMBS-Related Borrowings
|
|
Mortgage-Backed Securities
|
|
Financing Liability - MSRs Pledged
|
|
Derivatives
|
|
MSRs
|
|
Total
|
||||||||||||||
Three months ended June 30, 2016
|
|||||||||||||||||||||||||||
Beginning balance
|
$
|
2,771,242
|
|
|
$
|
(2,648,100
|
)
|
|
$
|
8,386
|
|
|
$
|
(523,503
|
)
|
|
$
|
570
|
|
|
$
|
732,174
|
|
|
$
|
340,769
|
|
Purchases, issuances, sales and settlements:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Purchases
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
144
|
|
|
—
|
|
|
144
|
|
|||||||
Issuances
|
371,607
|
|
|
(289,807
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,694
|
)
|
|
80,106
|
|
|||||||
Sales
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|||||||
Settlements (1)
|
(151,600
|
)
|
|
59,223
|
|
|
—
|
|
|
28,377
|
|
|
—
|
|
|
—
|
|
|
(64,000
|
)
|
|||||||
|
220,007
|
|
|
(230,584
|
)
|
|
—
|
|
|
28,377
|
|
|
144
|
|
|
(1,695
|
)
|
|
16,249
|
|
|||||||
Total realized and unrealized gains and (losses):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Included in earnings
|
66,315
|
|
|
(57,244
|
)
|
|
677
|
|
|
—
|
|
|
(514
|
)
|
|
(29,811
|
)
|
|
(20,577
|
)
|
|||||||
Transfers in and / or out of Level 3
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Ending balance
|
$
|
3,057,564
|
|
|
$
|
(2,935,928
|
)
|
|
$
|
9,063
|
|
|
$
|
(495,126
|
)
|
|
$
|
200
|
|
|
$
|
700,668
|
|
|
$
|
336,441
|
|
|
Loans Held for Investment - Reverse Mortgages
|
|
HMBS-Related Borrowings
|
|
Mortgage-backed Securities
|
|
Financing Liability - MSRs Pledged
|
|
Derivatives
|
|
MSRs
|
|
Total
|
||||||||||||||
Six months ended June 30, 2017
|
|||||||||||||||||||||||||||
Beginning balance
|
$
|
3,565,716
|
|
|
$
|
(3,433,781
|
)
|
|
$
|
8,342
|
|
|
$
|
(477,707
|
)
|
|
$
|
1,836
|
|
|
$
|
679,256
|
|
|
$
|
343,662
|
|
Purchases, issuances, sales and settlements:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Purchases
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Issuances
|
698,473
|
|
|
(664,453
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,417
|
)
|
|
32,603
|
|
|||||||
Sales
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(230
|
)
|
|
(230
|
)
|
|||||||
Transfers to Real estate (Other assets)
|
(1,423
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,423
|
)
|
|||||||
Settlements
|
(192,569
|
)
|
|
176,231
|
|
|
—
|
|
|
33,193
|
|
|
(42
|
)
|
|
—
|
|
|
16,813
|
|
|||||||
|
504,481
|
|
|
(488,222
|
)
|
|
—
|
|
|
33,193
|
|
|
(42
|
)
|
|
(1,647
|
)
|
|
47,763
|
|
|||||||
Total realized and unrealized gains and (losses): (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Included in earnings
|
153,579
|
|
|
(139,623
|
)
|
|
644
|
|
|
3,507
|
|
|
143
|
|
|
(51,959
|
)
|
|
(33,709
|
)
|
|||||||
Transfers in and / or out of Level 3
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Ending Balance
|
$
|
4,223,776
|
|
|
$
|
(4,061,626
|
)
|
|
$
|
8,986
|
|
|
$
|
(441,007
|
)
|
|
$
|
1,937
|
|
|
$
|
625,650
|
|
|
$
|
357,716
|
|
|
Loans Held for Investment - Reverse Mortgages
|
|
HMBS-Related Borrowings
|
|
Mortgage-backed Securities
|
|
Financing Liability - MSRs Pledged (1)
|
|
Derivatives
|
|
MSRs
|
|
Total
|
||||||||||||||
Six months ended June 30, 2016
|
|||||||||||||||||||||||||||
Beginning balance
|
$
|
2,488,253
|
|
|
$
|
(2,391,362
|
)
|
|
$
|
7,985
|
|
|
$
|
(541,704
|
)
|
|
$
|
2,042
|
|
|
$
|
761,190
|
|
|
$
|
326,404
|
|
Purchases, issuances, sales and settlements:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Purchases
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
144
|
|
|
—
|
|
|
144
|
|
|||||||
Issuances
|
675,665
|
|
|
(522,981
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,275
|
)
|
|
151,409
|
|
|||||||
Sales
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(143
|
)
|
|
(143
|
)
|
|||||||
Settlements
|
(238,838
|
)
|
|
98,876
|
|
|
—
|
|
|
46,578
|
|
|
(81
|
)
|
|
—
|
|
|
(93,465
|
)
|
|||||||
|
436,827
|
|
|
(424,105
|
)
|
|
—
|
|
|
46,578
|
|
|
63
|
|
|
(1,418
|
)
|
|
57,945
|
|
|||||||
Total realized and unrealized gains and (losses) (2):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Included in earnings
|
132,484
|
|
|
(120,461
|
)
|
|
1,078
|
|
|
—
|
|
|
(1,905
|
)
|
|
(59,104
|
)
|
|
(47,908
|
)
|
|||||||
|
132,484
|
|
|
(120,461
|
)
|
|
1,078
|
|
|
—
|
|
|
(1,905
|
)
|
|
(59,104
|
)
|
|
(47,908
|
)
|
|||||||
Transfers in and / or out of Level 3
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Ending balance
|
$
|
3,057,564
|
|
|
$
|
(2,935,928
|
)
|
|
$
|
9,063
|
|
|
$
|
(495,126
|
)
|
|
$
|
200
|
|
|
$
|
700,668
|
|
|
$
|
336,441
|
|
(1)
|
Settlements for Loans held for investment - reverse mortgages consist chiefly of principal payments received, but also may include non-cash settlements of loans.
|
(2)
|
Total gains (losses) attributable to derivative financial instruments still held at
June 30, 2017
and
June 30, 2016
were
$0.2 million
and
$(2.0) million
for the
six months ended June 30, 2017 and 2016
, respectively. Total losses attributable to MSRs still held at
June 30, 2017
and
June 30, 2016
were
$51.5 million
and
$58.5 million
for the
six months ended June 30, 2017 and 2016
, respectively.
|
|
June 30,
2017 |
|
December 31, 2016
|
||
Life in years
|
|
|
|
||
Range
|
5.4 to 8.2
|
|
|
5.5 to 8.7
|
|
Weighted average
|
5.9
|
|
|
6.1
|
|
Conditional repayment rate
|
|
|
|
||
Range
|
5.3% to 53.8%
|
|
|
5.2% to 53.8%
|
|
Weighted average
|
21.3
|
%
|
|
20.9
|
%
|
Discount rate
|
3.2
|
%
|
|
3.3
|
%
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
Weighted average prepayment speed
|
9.0
|
%
|
|
8.9
|
%
|
||
Weighted average delinquency rate
|
10.5
|
%
|
|
11.1
|
%
|
||
Advance financing cost
|
5-year swap
|
|
|
5-year swap
|
|
||
Interest rate for computing float earnings
|
5-year swap
|
|
|
5-year swap
|
|
||
Weighted average discount rate
|
9.1
|
%
|
|
8.9
|
%
|
||
Weighted average cost to service (in dollars)
|
$
|
107
|
|
|
$
|
108
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||||||||||
|
Agency
|
|
Non Agency
|
|
Agency
|
|
Non Agency
|
||||||||
Weighted average prepayment speed
|
8.5
|
%
|
|
16.4
|
%
|
|
8.4
|
%
|
|
16.5
|
%
|
||||
Weighted average delinquency rate
|
0.7
|
%
|
|
29.2
|
%
|
|
1.0
|
%
|
|
29.3
|
%
|
||||
Advance financing cost
|
5-year swap
|
|
|
1-Month LIBOR (1ML) plus 3.5%
|
|
|
5-year swap
|
|
|
1-Month LIBOR (1ML) plus 3.5%
|
|
||||
Interest rate for computing float earnings
|
5-year swap
|
|
|
1ML
|
|
|
5-year swap
|
|
|
1ML
|
|
||||
Weighted average discount rate
|
9.0
|
%
|
|
12.8
|
%
|
|
9.0
|
%
|
|
14.9
|
%
|
||||
Weighted average cost to service (in dollars)
|
$
|
63
|
|
|
$
|
313
|
|
|
$
|
64
|
|
|
$
|
307
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||
Weighted average life in months
|
2.7
|
|
|
2.7
|
|
Average note rate
|
8.3
|
%
|
|
8.3
|
%
|
Discount rate
|
10.0
|
%
|
|
10.0
|
%
|
Loan loss rate
|
21.9
|
%
|
|
11.3
|
%
|
|
June 30,
2017 |
|
December 31, 2016
|
||
Life in years
|
|
|
|
||
Range
|
4.4 to 8.2
|
|
|
4.5 to 8.7
|
|
Weighted average
|
5.0
|
|
|
5.1
|
|
Conditional repayment rate
|
|
|
|
||
Range
|
5.3% to 53.8%
|
|
|
5.2% to 53.8%
|
|
Weighted average
|
21.3
|
%
|
|
20.9
|
%
|
Discount rate
|
2.6
|
%
|
|
2.7
|
%
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
Weighted average prepayment speed
|
16.8
|
%
|
|
17.0
|
%
|
||
Weighted average delinquency rate
|
29.6
|
%
|
|
29.8
|
%
|
||
Advance financing cost
|
1ML plus 3.5%
|
|
|
1ML plus 3.5%
|
|
||
Interest rate for computing float earnings
|
1ML
|
|
|
1ML
|
|
||
Weighted average discount rate
|
13.6
|
%
|
|
14.9
|
%
|
||
Weighted average cost to service (in dollars)
|
$
|
319
|
|
|
$
|
313
|
|
Six months ended June 30,
|
2017
|
|
2016
|
||||
Beginning balance
|
$
|
284,632
|
|
|
$
|
309,054
|
|
Originations and purchases
|
1,547,169
|
|
|
1,924,514
|
|
||
Proceeds from sales
|
(1,603,889
|
)
|
|
(1,910,019
|
)
|
||
Principal collections
|
(2,062
|
)
|
|
(8,877
|
)
|
||
Transfers from loans held for sale at lower of cost or fair value
|
—
|
|
|
1,158
|
|
||
Gain on sale of loans
|
9,396
|
|
|
16,009
|
|
||
Increase in fair value of loans
|
3,838
|
|
|
4,266
|
|
||
Other
|
406
|
|
|
3,582
|
|
||
Ending balance (1)
|
$
|
239,490
|
|
|
$
|
339,687
|
|
(1)
|
At
June 30, 2017
and
2016
, the balances include
$8.7 million
and
$16.2 million
, respectively, of fair value adjustments.
|
Six months ended June 30,
|
2017
|
|
2016
|
||||
Beginning balance
|
$
|
29,374
|
|
|
$
|
104,992
|
|
Purchases
|
696,306
|
|
|
958,610
|
|
||
Proceeds from sales
|
(607,181
|
)
|
|
(856,426
|
)
|
||
Principal collections
|
(4,127
|
)
|
|
(14,109
|
)
|
||
Transfers to accounts receivable
|
(96,918
|
)
|
|
(137,605
|
)
|
||
Transfers to real estate owned
|
(435
|
)
|
|
(5,958
|
)
|
||
Gain (loss) on sale of loans
|
(2,434
|
)
|
|
12,962
|
|
||
Decrease (increase) in valuation allowance
|
3,573
|
|
|
(1,275
|
)
|
||
Other
|
3,311
|
|
|
912
|
|
||
Ending balance
(1)
|
$
|
21,469
|
|
|
$
|
62,103
|
|
(1)
|
At
June 30, 2017
and
2016
, the balances include
$16.0 million
and
$45.5 million
, respectively, of loans that we were required to repurchase from Ginnie Mae guaranteed securitizations as part of our servicing obligations. Repurchased loans are modified or otherwise remediated through loss mitigation activities or are reclassified to receivables.
|
Periods ended June 30,
|
Three Months
|
|
Six Months
|
||||||||||||
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||
Beginning balance
|
$
|
5,635
|
|
|
$
|
17,993
|
|
|
$
|
10,064
|
|
|
$
|
14,658
|
|
Provision
|
490
|
|
|
(434
|
)
|
|
854
|
|
|
2,163
|
|
||||
Transfer from liability for indemnification obligations
|
632
|
|
|
675
|
|
|
887
|
|
|
1,705
|
|
||||
Sales of loans
|
(600
|
)
|
|
(2,249
|
)
|
|
(5,646
|
)
|
|
(2,249
|
)
|
||||
Other
|
334
|
|
|
(52
|
)
|
|
332
|
|
|
(344
|
)
|
||||
Ending balance
|
$
|
6,491
|
|
|
$
|
15,933
|
|
|
$
|
6,491
|
|
|
$
|
15,933
|
|
Periods ended June 30,
|
Three Months
|
|
Six Months
|
||||||||||||
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||
MSRs retained on transfers of forward loans
|
$
|
6,906
|
|
|
$
|
9,002
|
|
|
$
|
15,032
|
|
|
$
|
15,486
|
|
Fair value gains related to transfers of reverse mortgage loans, net
|
14,049
|
|
|
7,279
|
|
|
21,687
|
|
|
7,635
|
|
||||
Gain on sale of repurchased Ginnie Mae loans
|
4,753
|
|
|
7,952
|
|
|
3,756
|
|
|
12,962
|
|
||||
Other gains (losses) related to loans held for sale, net
|
10,759
|
|
|
(5,147
|
)
|
|
12,904
|
|
|
942
|
|
||||
Gain on sales of loans, net
|
36,467
|
|
|
19,086
|
|
|
53,379
|
|
|
37,025
|
|
||||
Change in fair value of IRLCs
|
(2,487
|
)
|
|
(794
|
)
|
|
(1,428
|
)
|
|
6,672
|
|
||||
Change in fair value of loans held for sale
|
(1,854
|
)
|
|
18,191
|
|
|
5,813
|
|
|
21,713
|
|
||||
Loss on economic hedge instruments
|
(3,670
|
)
|
|
(8,425
|
)
|
|
(6,184
|
)
|
|
(21,626
|
)
|
||||
Other
|
(201
|
)
|
|
(201
|
)
|
|
(381
|
)
|
|
(355
|
)
|
||||
|
$
|
28,255
|
|
|
$
|
27,857
|
|
|
$
|
51,199
|
|
|
$
|
43,429
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
Principal and interest
|
$
|
21,512
|
|
|
$
|
31,334
|
|
Taxes and insurance
|
142,361
|
|
|
170,131
|
|
||
Foreclosures, bankruptcy and other
|
75,669
|
|
|
94,369
|
|
||
|
239,542
|
|
|
295,834
|
|
||
Allowance for losses
|
(20,328
|
)
|
|
(37,952
|
)
|
||
|
$
|
219,214
|
|
|
$
|
257,882
|
|
Six months ended June 30,
|
2017
|
|
2016
|
||||
Beginning balance
|
$
|
257,882
|
|
|
$
|
444,298
|
|
Sales of advances
|
(74
|
)
|
|
(24,053
|
)
|
||
Collections of advances, charge-offs and other, net
|
(56,218
|
)
|
|
(93,477
|
)
|
||
Decrease in allowance for losses
|
17,624
|
|
|
2,460
|
|
||
Ending balance
|
$
|
219,214
|
|
|
$
|
329,228
|
|
Periods ended June 30,
|
Three Months
|
|
Six Months
|
||||||||||||
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||
Beginning balance
|
$
|
35,844
|
|
|
$
|
42,523
|
|
|
$
|
37,952
|
|
|
$
|
41,901
|
|
Provision
|
(123
|
)
|
|
3,963
|
|
|
3,298
|
|
|
7,446
|
|
||||
Charge-offs, net and other
|
(15,393
|
)
|
|
(7,045
|
)
|
|
(20,922
|
)
|
|
(9,906
|
)
|
||||
Ending balance
|
$
|
20,328
|
|
|
$
|
39,441
|
|
|
$
|
20,328
|
|
|
$
|
39,441
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
Advances:
|
|
|
|
||||
Principal and interest
|
$
|
593,630
|
|
|
$
|
711,272
|
|
Taxes and insurance
|
468,102
|
|
|
530,946
|
|
||
Foreclosures, bankruptcy, real estate and other
|
197,309
|
|
|
209,746
|
|
||
|
1,259,041
|
|
|
1,451,964
|
|
||
Automotive dealer financing notes (1)
|
33,867
|
|
|
—
|
|
||
|
$
|
1,292,908
|
|
|
$
|
1,451,964
|
|
(1)
|
On February 24, 2017 and on March 17, 2017, we entered into loan agreements under a new automotive dealer loan financing facility to which these notes are pledged.
|
Six months ended June 30,
|
2017
|
|
2016
|
||||||||
|
Advances
|
|
Automotive Dealer Financing Notes
|
|
Advances
|
||||||
Beginning balance
|
$
|
1,451,964
|
|
|
$
|
—
|
|
|
$
|
1,706,768
|
|
Transfer from Other assets
|
—
|
|
|
25,180
|
|
|
—
|
|
|||
Sales
|
(691
|
)
|
|
—
|
|
|
—
|
|
|||
New advances/notes (Collections of pledged assets), net
|
(192,232
|
)
|
|
8,687
|
|
|
(92,321
|
)
|
|||
Ending balance
|
$
|
1,259,041
|
|
|
$
|
33,867
|
|
|
$
|
1,614,447
|
|
Six months ended June 30,
|
2017
|
|
2016
|
||||
Beginning balance
|
$
|
363,722
|
|
|
$
|
377,379
|
|
Additions recognized in connection with asset acquisitions
|
1,657
|
|
|
12,432
|
|
||
Additions recognized on the sale of mortgage loans
|
15,032
|
|
|
16,668
|
|
||
Sales
|
(1,066
|
)
|
|
178
|
|
||
Servicing transfers and adjustments
|
252
|
|
|
—
|
|
||
|
379,597
|
|
|
406,657
|
|
||
Amortization
|
(25,412
|
)
|
|
(21,153
|
)
|
||
Increase in impairment valuation allowance (1)
|
(4,650
|
)
|
|
(39,030
|
)
|
||
Ending balance
|
$
|
349,535
|
|
|
$
|
346,474
|
|
|
|
|
|
||||
Estimated fair value at end of period
|
$
|
440,311
|
|
|
$
|
367,951
|
|
(1)
|
Impairment of MSRs is recognized in Servicing and origination expense in the unaudited consolidated statements of operations. See
Note 3 – Fair Value
for additional information regarding impairment and the valuation allowance.
|
Six months ended June 30,
|
2017
|
|
2016
|
||||||||||||||||||||
|
Agency
|
|
Non-Agency
|
|
Total
|
|
Agency
|
|
Non-Agency
|
|
Total
|
||||||||||||
Beginning balance
|
$
|
13,357
|
|
|
$
|
665,899
|
|
|
$
|
679,256
|
|
|
$
|
15,071
|
|
|
$
|
746,119
|
|
|
$
|
761,190
|
|
Sales
|
—
|
|
|
(230
|
)
|
|
(230
|
)
|
|
—
|
|
|
(143
|
)
|
|
(143
|
)
|
||||||
Servicing transfers and adjustments
|
—
|
|
|
(1,417
|
)
|
|
(1,417
|
)
|
|
—
|
|
|
(1,275
|
)
|
|
(1,275
|
)
|
||||||
Changes in fair value (1):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Changes in valuation inputs or other assumptions
|
36
|
|
|
—
|
|
|
36
|
|
|
(5,033
|
)
|
|
—
|
|
|
(5,033
|
)
|
||||||
Realization of expected future cash flows and other changes
|
(950
|
)
|
|
(51,045
|
)
|
|
(51,995
|
)
|
|
(855
|
)
|
|
(53,216
|
)
|
|
(54,071
|
)
|
||||||
Ending balance
|
$
|
12,443
|
|
|
$
|
613,207
|
|
|
$
|
625,650
|
|
|
$
|
9,183
|
|
|
$
|
691,485
|
|
|
$
|
700,668
|
|
(1)
|
Changes in fair value are recognized in Servicing and origination expense in the unaudited consolidated statements of operations.
|
|
Adverse change in fair value
|
||||||
|
10%
|
|
20%
|
||||
Weighted average prepayment speeds
|
$
|
(62,510
|
)
|
|
$
|
(126,738
|
)
|
Discount rate (option-adjusted spread)
|
(14,082
|
)
|
|
(25,421
|
)
|
|
Residential
|
|
Commercial
|
|
Total
|
||||||
UPB at June 30, 2017
|
|
|
|
|
|
|
|
|
|||
Servicing
|
$
|
81,319,908
|
|
|
$
|
—
|
|
|
$
|
81,319,908
|
|
Subservicing
|
3,869,084
|
|
|
53,127
|
|
|
3,922,211
|
|
|||
NRZ (1)
|
109,609,432
|
|
|
—
|
|
|
109,609,432
|
|
|||
|
$
|
194,798,424
|
|
|
$
|
53,127
|
|
|
$
|
194,851,551
|
|
UPB at December 31, 2016
|
|
|
|
|
|
|
|
|
|||
Servicing
|
$
|
86,049,298
|
|
|
$
|
—
|
|
|
$
|
86,049,298
|
|
Subservicing
|
4,330,084
|
|
|
92,933
|
|
|
4,423,017
|
|
|||
NRZ (1)
|
118,712,748
|
|
|
—
|
|
|
118,712,748
|
|
|||
|
$
|
209,092,130
|
|
|
$
|
92,933
|
|
|
$
|
209,185,063
|
|
UPB at June 30, 2016
|
|
|
|
|
|
|
|
|
|||
Servicing
|
$
|
95,101,820
|
|
|
$
|
—
|
|
|
$
|
95,101,820
|
|
Subservicing
|
6,086,568
|
|
|
144,639
|
|
|
6,231,207
|
|
|||
NRZ (1)
|
128,087,613
|
|
|
—
|
|
|
128,087,613
|
|
|||
|
$
|
229,276,001
|
|
|
$
|
144,639
|
|
|
$
|
229,420,640
|
|
(1)
|
UPB of loans serviced for which the Rights to MSRs have been sold to NRZ.
|
Periods ended June 30,
|
Three Months
|
|
Six Months
|
||||||||||||
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||
Loan servicing and subservicing fees:
|
|
|
|
|
|
|
|
||||||||
Servicing
|
$
|
66,018
|
|
|
$
|
77,083
|
|
|
$
|
134,640
|
|
|
$
|
155,581
|
|
Subservicing
|
1,964
|
|
|
3,197
|
|
|
4,118
|
|
|
8,447
|
|
||||
NRZ
|
143,612
|
|
|
160,518
|
|
|
290,923
|
|
|
322,647
|
|
||||
|
211,594
|
|
|
240,798
|
|
|
429,681
|
|
|
486,675
|
|
||||
Late charges
|
15,610
|
|
|
17,474
|
|
|
32,394
|
|
|
36,076
|
|
||||
Home Affordable Modification Program (HAMP) fees
|
10,506
|
|
|
33,493
|
|
|
31,489
|
|
|
56,111
|
|
||||
Loan collection fees
|
5,936
|
|
|
6,985
|
|
|
12,255
|
|
|
14,114
|
|
||||
Other
|
12,155
|
|
|
8,512
|
|
|
22,484
|
|
|
11,782
|
|
||||
|
$
|
255,801
|
|
|
$
|
307,262
|
|
|
$
|
528,303
|
|
|
$
|
604,758
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
Servicing:
|
|
|
|
||||
Government-insured loan claims, net (1)
|
$
|
120,494
|
|
|
$
|
133,063
|
|
Reimbursable expenses
|
33,555
|
|
|
29,358
|
|
||
Due from custodial accounts
|
29,433
|
|
|
44,761
|
|
||
Due from NRZ
|
24,786
|
|
|
21,837
|
|
||
Other
|
16,898
|
|
|
27,086
|
|
||
|
225,166
|
|
|
256,105
|
|
||
Income taxes receivable
|
39,343
|
|
|
61,932
|
|
||
Other receivables (2)
|
55,440
|
|
|
21,125
|
|
||
|
319,949
|
|
|
339,162
|
|
||
Allowance for losses (1)
|
(67,152
|
)
|
|
(73,442
|
)
|
||
|
$
|
252,797
|
|
|
$
|
265,720
|
|
(1)
|
At
June 30, 2017
and
December 31, 2016
, the allowance for losses related entirely to receivables of our Servicing business. Allowance for losses related to defaulted FHA or VA insured loans repurchased from Ginnie Mae guaranteed securitizations (government-insured loan claims) at
June 30, 2017
and
December 31, 2016
were
$46.6 million
and
$53.3 million
, respectively.
|
(2)
|
At June 30, 2017, the balance includes
$22.9 million
in connection with the recovery of prior legal settlement expenses and
$14.0 million
for insurance recovery in connection with accrued legal fees and settlements outstanding at June 30, 2017.
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
Contingent loan repurchase asset (1)
|
$
|
246,348
|
|
|
$
|
246,081
|
|
Prepaid expenses (2)
|
53,123
|
|
|
57,188
|
|
||
Debt service accounts
|
40,968
|
|
|
42,822
|
|
||
Derivatives, at fair value
|
9,051
|
|
|
9,279
|
|
||
Mortgage backed securities, at fair value
|
8,986
|
|
|
8,342
|
|
||
Prepaid lender fees, net
|
8,337
|
|
|
9,023
|
|
||
Prepaid income taxes
|
7,007
|
|
|
8,392
|
|
||
Interest-earning time deposits
|
5,689
|
|
|
6,454
|
|
||
Real estate
|
4,833
|
|
|
5,249
|
|
||
Automotive dealer financing notes, net
|
—
|
|
|
33,224
|
|
||
Other
|
15,330
|
|
|
12,050
|
|
||
|
$
|
399,672
|
|
|
$
|
438,104
|
|
(1)
|
With respect to previously transferred Ginnie Mae mortgage loans for which we have the right or the obligation to repurchase under the applicable agreement, we re-recognize the loans in Other assets and a corresponding liability in Other liabilities.
|
(2)
|
In connection with the sale of Agency MSRs in 2015, we placed
$52.9 million
in escrow for the payment of representation, warranty and indemnification claims associated with the underlying loans. Prepaid expenses at
June 30, 2017
and
December 31, 2016
includes the remaining balance of
$36.6 million
and
$34.9 million
, respectively.
|
Periods ended June 30,
|
Three Months
|
|
Six Months
|
||||||||||||
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||
Beginning balance
|
$
|
10,516
|
|
|
$
|
78
|
|
|
$
|
4,371
|
|
|
$
|
27
|
|
Provision
|
(930
|
)
|
|
86
|
|
|
5,215
|
|
|
137
|
|
||||
Ending balance
|
$
|
9,586
|
|
|
$
|
164
|
|
|
$
|
9,586
|
|
|
$
|
164
|
|
|
|
|
|
|
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||||||||||
Borrowing Type
|
|
Maturity (1)
|
|
Amorti- zation Date (1)
|
|
Available Borrowing Capacity (2)
|
|
Weighted Average Interest Rate (3)
|
|
Balance
|
|
Weighted Average Interest Rate (3)
|
|
Balance
|
||||||||
Advance Financing Facilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Advance Receivables Backed Notes - Series 2014-VF3 (4)
|
|
Aug. 2047
|
|
Aug. 2017
|
|
$
|
47,173
|
|
|
3.12
|
%
|
|
$
|
22,827
|
|
|
3.12
|
%
|
|
$
|
74,394
|
|
Advance Receivables Backed Notes - Series 2014-VF4 (4)
|
|
Aug. 2047
|
|
Aug. 2017
|
|
47,174
|
|
|
3.12
|
|
|
22,826
|
|
|
3.12
|
|
|
74,394
|
|
|||
Advance Receivables Backed Notes - Series 2015-VF5 (4)
|
|
Aug. 2047
|
|
Aug. 2017
|
|
47,174
|
|
|
3.12
|
|
|
22,826
|
|
|
3.12
|
|
|
74,394
|
|
|||
Advance Receivables Backed Notes - Series 2015-T3 (5)
|
|
Nov. 2047
|
|
Nov. 2017
|
|
—
|
|
|
3.48
|
|
|
400,000
|
|
|
3.48
|
|
|
400,000
|
|
|||
Advance Receivables Backed Notes - Series 2016-T1 (5)
|
|
Aug. 2048
|
|
Aug. 2018
|
|
—
|
|
|
2.77
|
|
|
265,000
|
|
|
2.77
|
|
|
265,000
|
|
|||
Advance Receivables Backed Notes - Series 2016-T2 (5)
|
|
Aug. 2049
|
|
Aug. 2019
|
|
—
|
|
|
2.99
|
|
|
235,000
|
|
|
2.99
|
|
|
235,000
|
|
|||
Total Ocwen Master Advance Receivables Trust (OMART)
|
|
|
|
|
|
141,521
|
|
|
3.14
|
|
|
968,479
|
|
|
3.14
|
|
|
1,123,182
|
|
|||
Ocwen Servicer Advance Receivables Trust III (OSART III) -
Advance Receivables Backed Notes, Series 2014-VF1
(6)
|
|
Dec. 2047
|
|
Dec. 2017
|
|
19,214
|
|
|
4.31
|
%
|
|
55,786
|
|
|
4.03
|
%
|
|
63,093
|
|
|||
Ocwen Freddie Advance Funding (OFAF) -
Advance Receivables Backed Notes, Series 2015-VF1
(7)
|
|
Jun. 2048
|
|
Jun. 2018
|
|
49,434
|
|
|
4.14
|
%
|
|
60,566
|
|
|
3.54
|
%
|
|
94,722
|
|
|||
|
|
|
|
|
|
210,169
|
|
|
3.26
|
%
|
|
1,084,831
|
|
|
3.21
|
%
|
|
1,280,997
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Automotive Dealer Loan Financing Facility:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Loan Series 2017-1
|
|
Feb. 2021
|
|
Feb. 2019
|
|
38,227
|
|
|
6.46
|
%
|
|
11,773
|
|
|
—
|
%
|
|
—
|
|
|||
Loan Series 2017-2
|
|
Mar. 2021
|
|
Mar. 2019
|
|
38,227
|
|
|
6.23
|
|
|
11,773
|
|
|
—
|
|
|
—
|
|
|||
Total Automotive Capital Asset Receivables Trust (ACART) (8)
|
|
|
|
|
|
76,454
|
|
|
6.34
|
%
|
|
23,546
|
|
|
—
|
%
|
|
—
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
$
|
286,623
|
|
|
3.32
|
%
|
|
$
|
1,108,377
|
|
|
3.21
|
%
|
|
$
|
1,280,997
|
|
(1)
|
The amortization date of our facilities is the date on which the revolving period ends under each advance facility note and repayment of the outstanding balance must begin if the note is not renewed or extended. The maturity date is the date on which all outstanding balances must be repaid. In all of our advance facilities, there are multiple notes outstanding. For each note, after the amortization date, all collections that represent the repayment of advances pledged to the facility must be applied to reduce the balance of the note outstanding, and any new advances are ineligible to be financed.
|
(2)
|
Borrowing capacity is available to us provided that we have additional eligible collateral to pledge. Collateral may only be pledged to one facility. At
June 30, 2017
,
none
of the available borrowing capacity of our advance financing notes could be used based on the amount of eligible collateral that had been pledged.
|
(3)
|
1ML was
1.22%
and
0.77%
at
June 30, 2017
and
December 31, 2016
, respectively.
|
(4)
|
Effective June 30, 2017, we negotiated a reduction in the borrowing capacity of each series of variable rate notes from
$140.0 million
to
$70.0 million
. There is a ceiling of
75 basis points (bps)
for 1ML in determining the interest rate for the notes. Rates on the individual notes are based on 1ML plus a margin of
185
to
545
bps.
|
(5)
|
Under the terms of the agreement, we must continue to borrow the full amount of the Series 2015-T3, Series 2016-T1 and Series 2016-T2 fixed-rate term notes until the amortization date. If there is insufficient collateral to support the level of borrowing, the excess cash proceeds are not distributed to Ocwen but are held by the trustee, and interest expense continues to be based on the full amount of the notes. The Series 2016-T1 and 2016-T2 notes have a total borrowing capacity of
$500.0 million
. The Series 2015-T3 notes have a borrowing capacity of
$400.0 million
. Rates on the individual notes range from
2.5207%
to
4.6870%
|
(6)
|
The maximum borrowing capacity under this facility is
$75.0 million
. There is a ceiling of
75 bps
for 1ML in determining the interest rate for these variable rate notes. Rates on the individual notes are based on the lender’s cost of funds plus a margin of
230
to
470
bps.
|
(7)
|
The combined borrowing capacity of the Series 2015-VF1 Notes is
$160.0 million
. Rates on the individual notes are based on 1ML plus a margin of
240
to
480
bps. On June 8, 2017, we negotiated a renewal of this facility through June 7, 2018. As part of this renewal, we reduced the combined borrowing capacity of the Series 2015-VF1 Notes to
$110.0 million
with interest computed based on the lender’s cost of funds plus a margin of from
250
to
500
bps. There is a ceiling of
300 bps
for 1ML in determining the interest rate for these variable rate notes.
|
(8)
|
We entered into the loan agreements for the Series 2017-1 Notes on February 24, 2017 and for the Series 2017-2 Notes on March 17, 2017. The committed borrowing capacity for each of the Series 2017-1 and Series 2017-2 variable rate notes is
$50.0 million
. We may from time to time request increases in the aggregate maximum borrowing capacity of the facility to a maximum aggregate borrowing capacity of
$200.0 million
. Rates on the Series 2017-1 notes are based on 1ML plus a margin of
500
bps and rates on the Series 2017-2 notes are based on the lender’s cost of funds plus a margin of
500
bps.
|
Borrowings
|
|
Collateral
|
|
Interest Rate
|
|
Maturity
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
HMBS-Related Borrowings, at fair value (1)
|
|
Loans held for investment
|
|
1ML + 264 bps
|
|
(1)
|
|
$
|
4,061,626
|
|
|
$
|
3,433,781
|
|
Other Financing Liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||
Financing liability – MSRs pledged, at fair value
|
|
MSRs
|
|
(2)
|
|
(2)
|
|
441,007
|
|
|
477,707
|
|
||
Secured Notes, Ocwen Asset Servicing Income Series, Series 2014-1 (3)
|
|
MSRs
|
|
(3)
|
|
Feb. 2028
|
|
76,877
|
|
|
81,131
|
|
||
Financing liability – Advances pledged (4)
|
|
Advances on loans
|
|
(4)
|
|
(4)
|
|
15,922
|
|
|
20,193
|
|
||
|
|
|
|
|
|
|
|
533,806
|
|
|
579,031
|
|
||
|
|
|
|
|
|
|
|
$
|
4,595,432
|
|
|
$
|
4,012,812
|
|
(1)
|
Represents amounts due to the holders of beneficial interests in Ginnie Mae guaranteed HMBS. The beneficial interests have no maturity dates, and the borrowings mature as the related loans are repaid.
|
(2)
|
This financing liability arose in connection with the NRZ/HLSS Transactions and has no contractual maturity or repayment schedule. The balance of the liability is adjusted each reporting period to its fair value based on the present value of the estimated future cash flows underlying the related MSRs.
|
(3)
|
OASIS noteholders are entitled to receive a monthly payment amount equal to the sum of: (a) the designated servicing fee amount (
21
basis points of the UPB of the reference pool of Freddie Mac mortgages); (b) any termination payment amounts; (c) any excess refinance amounts; and (d) the note redemption amounts, each as defined in the indenture supplement for the notes. We accounted for this transaction as a financing. Monthly amortization of the liability is estimated using the proportion of monthly projected service fees on the underlying MSRs as a percentage of lifetime projected fees, adjusted for the term of the security.
|
(4)
|
Certain sales of advances did not qualify for sales accounting treatment and were accounted for as a financing. This financing liability has no contractual maturity.
|
Borrowings
|
|
Collateral
|
|
Interest Rate
|
|
Maturity
|
|
Available Borrowing Capacity (1)
|
|
June 30, 2017
|
|
December 31, 2016
|
||||||
SSTL (2)
|
|
(2)
|
|
1-Month Euro-dollar rate + 500 bps with a Eurodollar floor of 100 bps (2)
|
|
Dec. 2020
|
|
$
|
—
|
|
|
$
|
326,626
|
|
|
$
|
335,000
|
|
Mortgage loan warehouse facilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Repurchase agreement (3)
|
|
Loans held for sale (LHFS)
|
|
1ML + 200 - 345 bps
|
|
Sep. 2017
|
|
42,100
|
|
|
7,900
|
|
|
12,370
|
|
|||
Master repurchase agreements (4)
|
|
LHFS
|
|
1ML + 200 bps; 1ML floor of 0.0%
|
|
Feb. 2018
|
|
33,766
|
|
|
66,234
|
|
|
173,543
|
|
|||
Participation agreements (5)
|
|
LHFS
|
|
N/A
|
|
Apr. 2018 (5)
|
|
—
|
|
|
151,498
|
|
|
92,739
|
|
|||
Participation agreements (6)
|
|
LHFS (reverse mortgages)
|
|
1ML + 275 bps; 1ML floor of 300 or 350 bps
|
|
Aug. 2017
|
|
—
|
|
|
39,570
|
|
|
26,254
|
|
|||
Master repurchase agreement (7)
|
|
LHFS (reverse mortgages)
|
|
1ML + 275 bps; 1ML floor of 25 bps
|
|
Jan. 2018
|
|
38,081
|
|
|
61,919
|
|
|
50,123
|
|
|||
|
|
|
|
|
|
|
|
113,947
|
|
|
327,121
|
|
|
355,029
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
$
|
113,947
|
|
|
653,747
|
|
|
690,029
|
|
||
Unamortized debt issuance costs - SSTL
|
|
|
|
(6,552
|
)
|
|
(7,612
|
)
|
||||||||||
Discount - SSTL
|
|
|
|
(3,335
|
)
|
|
(3,874
|
)
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
$
|
643,860
|
|
|
$
|
678,543
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Weighted average interest rate
|
|
|
|
|
|
|
|
|
|
4.94
|
%
|
|
4.56
|
%
|
(1)
|
For our mortgage loan warehouse facilities, available borrowing capacity does not consider the amount of the facility that the lender has extended on an uncommitted basis. Of the borrowing capacity extended on a committed basis,
none
could be used at
June 30, 2017
based on the amount of eligible collateral that had been pledged.
|
(2)
|
On December 5, 2016, we entered into an Amended and Restated Senior Secured Term Loan Facility Agreement that established a new SSTL with a borrowing capacity of
$335.0 million
and a maturity date of December 5, 2020. We may request increases to the loan amount of up to
$100.0 million
in total, with additional increases subject to certain limitations. We are required to make quarterly payments on the SSTL in an amount of
$4.2 million
the first of which was paid on March 31, 2017.
|
(3)
|
Fifty
percent of the maximum borrowing amount of
$100.0 million
is available on a committed basis and
fifty
percent is available at the discretion of the lender. We use this facility to fund the repurchase of certain loans from Ginnie Mae guaranteed securitizations in connection with loan modifications and loan resolution activity as part of our contractual obligations as the servicer of the loans. On August 1, 2017, we entered into an amendment to lower the advance rates under this facility by
3%
.
|
(4)
|
Under these repurchase agreements, the lender provides financing on a committed basis for
$100.0 million
,
with an additional
$100.0 million
available at the discretion of the lender.
On August 1, 2017, we elected to voluntarily terminate these agreements.
|
(5)
|
Under these participation agreements, the lender provides financing for a combined total of
$250.0 million
at the discretion of the lender. The participation agreement allows the lender to acquire a
100%
beneficial interest in the underlying mortgage loans. The transaction does not qualify for sale accounting treatment and is accounted for as a secured borrowing. The lender earns the stated
|
(6)
|
Under these participation agreements, the lender provides uncommitted reverse mortgage financing for
$75.0 million
at the discretion of the lender. The participation agreement allows the lender to acquire a
100%
beneficial interest in the underlying mortgage loans. The transaction does not qualify for sale accounting treatment and is accounted for as a secured borrowing. The lender earns the stated interest rate of the underlying mortgage loans while the loans are financed under the participation agreement.
|
(7)
|
The lender provides financing on a committed basis for
$100.0 million
.
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
6.625% Senior unsecured notes due May 15, 2019
|
$
|
3,122
|
|
|
$
|
3,122
|
|
8.375% Senior secured notes due November 15, 2022
|
346,878
|
|
|
346,878
|
|
||
|
350,000
|
|
|
$
|
350,000
|
|
|
Unamortized debt issuance costs
|
(2,937
|
)
|
|
(3,211
|
)
|
||
|
$
|
347,063
|
|
|
$
|
346,789
|
|
Year
|
|
Redemption Price
|
2018
|
|
106.281%
|
2019
|
|
104.188%
|
2020
|
|
102.094%
|
2021 and thereafter
|
|
100.000%
|
•
|
Financial covenants;
|
•
|
Covenants to operate in material compliance with applicable laws;
|
•
|
Restrictions on our ability to engage in various activities, including but not limited to incurring additional debt, paying dividends of making distributions on or purchasing equity interests of Ocwen, repurchasing or redeeming capital stock or junior capital, repurchasing or redeeming subordinated debt prior to maturity, issuing preferred stock, selling or transferring assets or making loans or investments or acquisitions or other restricted payments, entering into mergers or consolidations or sales of all or substantially all of the assets of Ocwen and its subsidiaries, creating liens on assets to secure debt of OLS or any Guarantor, enter into transactions with an affiliate;
|
•
|
Monitoring and reporting of various specified transactions or events, including specific reporting on defined events affecting collateral underlying certain debt agreements; and
|
•
|
Requirements to provide audited financial statements within specified timeframes, including a requirement under our SSTL that Ocwen’s financial statements and the related audit report be unqualified as to going concern.
|
•
|
a
40%
loan to collateral value ratio, as defined under our SSTL, as of the last date of any fiscal quarter; and
|
•
|
specified levels of tangible net worth and liquidity at the consolidated and OLS levels.
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
Contingent loan repurchase liability
|
$
|
246,348
|
|
|
$
|
246,081
|
|
Accrued legal fees and settlements
|
117,020
|
|
|
93,797
|
|
||
Due to NRZ
|
71,812
|
|
|
83,248
|
|
||
Other accrued expenses
|
67,004
|
|
|
80,021
|
|
||
Servicing-related obligations
|
38,852
|
|
|
35,324
|
|
||
Liability for indemnification obligations
|
23,718
|
|
|
27,546
|
|
||
Liability for uncertain tax positions
|
23,446
|
|
|
23,216
|
|
||
Amounts due in connection with MSR sales
|
20,147
|
|
|
39,398
|
|
||
Checks held for escheat
|
19,147
|
|
|
16,890
|
|
||
Accrued interest payable
|
6,840
|
|
|
3,698
|
|
||
Other
|
23,079
|
|
|
32,020
|
|
||
|
$
|
657,413
|
|
|
$
|
681,239
|
|
|
|
|
Interest Rate Risk
|
||||||||
|
|
|
IRLCs and Loans Held for Sale
|
|
Borrowings
|
||||||
|
IRLCs
|
|
Forward MBS Trades
|
|
Interest Rate Caps
|
||||||
Notional balance at December 31, 2016
|
$
|
360,450
|
|
|
$
|
609,177
|
|
|
$
|
955,000
|
|
Additions
|
2,478,110
|
|
|
1,802,148
|
|
|
110,000
|
|
|||
Amortization
|
—
|
|
|
—
|
|
|
(180,000
|
)
|
|||
Maturities
|
(2,117,572
|
)
|
|
(1,025,320
|
)
|
|
—
|
|
|||
Terminations
|
(475,410
|
)
|
|
(993,409
|
)
|
|
(160,000
|
)
|
|||
Notional balance at June 30, 2017
|
$
|
245,578
|
|
|
$
|
392,596
|
|
|
$
|
725,000
|
|
|
|
|
|
|
|
||||||
Maturity
|
Jul. 2017 - Sep. 2017
|
|
Aug. 2017
|
|
Oct. 2017 - May 2019
|
||||||
|
|
|
|
|
|
||||||
Fair value of derivative assets (liabilities) at:
|
|
|
|
|
|
|
|
|
|||
June 30, 2017
|
$
|
5,352
|
|
|
$
|
1,752
|
|
|
$
|
1,937
|
|
December 31, 2016
|
6,507
|
|
|
(614
|
)
|
|
1,836
|
|
|||
|
|
|
|
|
|
||||||
Gains (losses) on derivatives during the six months ended:
|
Gain on Loans Held for Sale, Net
|
|
Gain on Loans Held for Sale, Net
|
|
Other, Net
|
||||||
June 30, 2017
|
$
|
(1,428
|
)
|
|
$
|
(6,184
|
)
|
|
$
|
31
|
|
June 30, 2016
|
6,672
|
|
|
(21,626
|
)
|
|
(2,080
|
)
|
(1)
|
Derivatives are reported at fair value in Other assets or in Other liabilities on our unaudited consolidated balance sheets.
|
Periods ended June 30,
|
Three Months
|
|
Six Months
|
||||||||||||
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||
Gains (losses) on economic hedges
|
$
|
(283
|
)
|
|
$
|
(514
|
)
|
|
$
|
143
|
|
|
$
|
(1,905
|
)
|
Write-off of losses in AOCL for a discontinued hedge relationship
|
(45
|
)
|
|
(70
|
)
|
|
(112
|
)
|
|
(175
|
)
|
||||
|
$
|
(328
|
)
|
|
$
|
(584
|
)
|
|
$
|
31
|
|
|
$
|
(2,080
|
)
|
Periods ended June 30,
|
Three Months
|
|
Six Months
|
||||||||||||
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||
Financing liabilities
|
$
|
50,293
|
|
|
$
|
52,803
|
|
|
$
|
103,262
|
|
|
$
|
120,578
|
|
Match funded liabilities
|
12,669
|
|
|
18,133
|
|
|
25,518
|
|
|
36,307
|
|
||||
Other secured borrowings
|
9,636
|
|
|
12,715
|
|
|
19,184
|
|
|
25,428
|
|
||||
Senior notes
|
7,447
|
|
|
6,129
|
|
|
14,903
|
|
|
12,270
|
|
||||
Other
|
1,083
|
|
|
1,253
|
|
|
2,323
|
|
|
2,539
|
|
||||
|
$
|
81,128
|
|
|
$
|
91,033
|
|
|
$
|
165,190
|
|
|
$
|
197,122
|
|
Periods ended June 30,
|
Three Months
|
|
Six Months
|
||||||||||||
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||
Servicing fees collected on behalf of NRZ/HLSS
|
$
|
143,612
|
|
|
$
|
160,518
|
|
|
$
|
290,923
|
|
|
$
|
322,647
|
|
Less: Subservicing fee retained by Ocwen
|
78,794
|
|
|
85,532
|
|
|
157,947
|
|
|
169,902
|
|
||||
Net servicing fees remitted to NRZ/HLSS
|
64,818
|
|
|
74,986
|
|
|
132,976
|
|
|
152,745
|
|
||||
Less: Reduction in financing liability
|
16,194
|
|
|
27,628
|
|
|
33,193
|
|
|
45,829
|
|
||||
Interest expense on NRZ/HLSS financing liability
|
$
|
48,624
|
|
|
$
|
47,358
|
|
|
$
|
99,783
|
|
|
$
|
106,916
|
|
Periods ended June 30,
|
Three Months
|
|
Six Months
|
||||||||||||
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||
Basic loss per share
|
|
|
|
|
|
|
|
||||||||
Net loss attributable to Ocwen stockholders
|
$
|
(44,507
|
)
|
|
$
|
(87,378
|
)
|
|
$
|
(77,231
|
)
|
|
$
|
(198,709
|
)
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares of common stock
|
124,582,280
|
|
|
123,893,752
|
|
|
124,300,171
|
|
|
123,993,545
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic loss per share
|
$
|
(0.36
|
)
|
|
$
|
(0.71
|
)
|
|
$
|
(0.62
|
)
|
|
$
|
(1.60
|
)
|
|
|
|
|
|
|
|
|
||||||||
Diluted loss per share (1)
|
|
|
|
|
|
|
|
||||||||
Net loss attributable to Ocwen stockholders
|
$
|
(44,507
|
)
|
|
$
|
(87,378
|
)
|
|
$
|
(77,231
|
)
|
|
$
|
(198,709
|
)
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares of common stock
|
124,582,280
|
|
|
123,893,752
|
|
|
124,300,171
|
|
|
123,993,545
|
|
||||
Effect of dilutive elements (1):
|
|
|
|
|
|
|
|
||||||||
Stock option awards
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Common stock awards
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Dilutive weighted average shares of common stock
|
124,582,280
|
|
|
123,893,752
|
|
|
124,300,171
|
|
|
123,993,545
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Diluted loss per share
|
$
|
(0.36
|
)
|
|
$
|
(0.71
|
)
|
|
$
|
(0.62
|
)
|
|
$
|
(1.60
|
)
|
|
|
|
|
|
|
|
|
||||||||
Stock options and common stock awards excluded from the computation of diluted earnings per share
|
|
|
|
|
|
|
|
||||||||
Anti-dilutive (2)
|
6,709,154
|
|
|
7,979,821
|
|
|
4,382,684
|
|
|
7,482,868
|
|
||||
Market-based (3)
|
862,446
|
|
|
2,045,725
|
|
|
862,446
|
|
|
2,045,725
|
|
(1)
|
For the three and six months ended June 30, 2017 and 2016, we have excluded the effect of stock options and common stock awards from the computation of diluted loss per share because of the anti-dilutive effect of our reported net loss.
|
(2)
|
Stock options were anti-dilutive because their exercise price was greater than the average market price of Ocwen’s stock.
|
(3)
|
Shares that are issuable upon the achievement of certain market-based performance criteria related to Ocwen’s stock price.
|
|
Servicing
|
|
Lending
|
|
Corporate Items and Other
|
|
Corporate Eliminations
|
|
Business Segments Consolidated
|
||||||||||
Results of Operations
|
|
|
|
|
|
|
|
|
|
||||||||||
Three months ended June 30, 2017
|
|||||||||||||||||||
Revenue
|
$
|
271,784
|
|
|
$
|
32,776
|
|
|
$
|
6,740
|
|
|
$
|
—
|
|
|
$
|
311,300
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Expenses
|
201,928
|
|
|
32,886
|
|
|
45,666
|
|
|
—
|
|
|
280,480
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest income
|
174
|
|
|
3,007
|
|
|
1,058
|
|
|
—
|
|
|
4,239
|
|
|||||
Interest expense
|
(63,903
|
)
|
|
(3,383
|
)
|
|
(13,842
|
)
|
|
—
|
|
|
(81,128
|
)
|
|||||
Gain on sale of mortgage servicing rights, net
|
1,034
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
1,033
|
|
|||||
Other
|
2,057
|
|
|
(128
|
)
|
|
1,499
|
|
|
—
|
|
|
3,428
|
|
|||||
Other expense, net
|
(60,638
|
)
|
|
(504
|
)
|
|
(11,286
|
)
|
|
—
|
|
|
(72,428
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (loss) before income taxes
|
$
|
9,218
|
|
|
$
|
(614
|
)
|
|
$
|
(50,212
|
)
|
|
$
|
—
|
|
|
$
|
(41,608
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Three months ended June 30, 2016
|
|||||||||||||||||||
Revenue
|
$
|
325,120
|
|
|
$
|
35,376
|
|
|
$
|
12,558
|
|
|
$
|
—
|
|
|
$
|
373,054
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Expenses
|
257,751
|
|
|
31,181
|
|
|
96,086
|
|
|
—
|
|
|
385,018
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest income
|
(15
|
)
|
|
4,204
|
|
|
951
|
|
|
—
|
|
|
5,140
|
|
|||||
Interest expense
|
(81,197
|
)
|
|
(3,697
|
)
|
|
(6,139
|
)
|
|
—
|
|
|
(91,033
|
)
|
|||||
Gain on sale of mortgage servicing rights, net
|
853
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
853
|
|
|||||
Other
|
806
|
|
|
308
|
|
|
(508
|
)
|
|
—
|
|
|
606
|
|
|||||
Other income (expense), net
|
(79,553
|
)
|
|
815
|
|
|
(5,696
|
)
|
|
—
|
|
|
(84,434
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (loss) before income taxes
|
$
|
(12,184
|
)
|
|
$
|
5,010
|
|
|
$
|
(89,224
|
)
|
|
$
|
—
|
|
|
$
|
(96,398
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Servicing
|
|
Lending
|
|
Corporate Items and Other
|
|
Corporate Eliminations
|
|
Business Segments Consolidated
|
||||||||||
Six months ended June 30, 2017
|
|||||||||||||||||||
Revenue
|
$
|
555,802
|
|
|
$
|
63,522
|
|
|
$
|
13,840
|
|
|
$
|
—
|
|
|
$
|
633,164
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Expenses
|
418,842
|
|
|
62,217
|
|
|
75,804
|
|
|
—
|
|
|
556,863
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest income
|
261
|
|
|
5,754
|
|
|
1,987
|
|
|
—
|
|
|
8,002
|
|
|||||
Interest expense
|
(131,254
|
)
|
|
(6,667
|
)
|
|
(27,269
|
)
|
|
—
|
|
|
(165,190
|
)
|
|||||
Gain on sale of mortgage servicing rights, net
|
1,320
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,320
|
|
|||||
Other
|
5,060
|
|
|
103
|
|
|
2,298
|
|
|
—
|
|
|
7,461
|
|
|||||
Other expense, net
|
(124,613
|
)
|
|
(810
|
)
|
|
(22,984
|
)
|
|
—
|
|
|
(148,407
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (loss) before income taxes
|
$
|
12,347
|
|
|
$
|
495
|
|
|
$
|
(84,948
|
)
|
|
$
|
—
|
|
|
$
|
(72,106
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Six months ended June 30, 2016
|
|||||||||||||||||||
Revenue
|
$
|
632,547
|
|
|
$
|
58,660
|
|
|
$
|
12,604
|
|
|
$
|
—
|
|
|
$
|
703,811
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Expenses
|
532,070
|
|
|
55,558
|
|
|
126,047
|
|
|
—
|
|
|
713,675
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest income
|
(161
|
)
|
|
7,815
|
|
|
1,676
|
|
|
—
|
|
|
9,330
|
|
|||||
Interest expense
|
(177,670
|
)
|
|
(7,145
|
)
|
|
(12,307
|
)
|
|
—
|
|
|
(197,122
|
)
|
|||||
Gain on sale of mortgage servicing rights, net
|
2,028
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,028
|
|
|||||
Other
|
(2,537
|
)
|
|
659
|
|
|
(1,017
|
)
|
|
—
|
|
|
(2,895
|
)
|
|||||
Other income (expense), net
|
(178,340
|
)
|
|
1,329
|
|
|
(11,648
|
)
|
|
—
|
|
|
(188,659
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (loss) before income taxes
|
$
|
(77,863
|
)
|
|
$
|
4,431
|
|
|
$
|
(125,091
|
)
|
|
$
|
—
|
|
|
$
|
(198,523
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Servicing
|
|
Lending
|
|
Corporate Items and Other
|
|
Corporate Eliminations
|
|
Business Segments Consolidated
|
||||||||||
Total Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
June 30, 2017
|
$
|
2,975,458
|
|
|
$
|
4,483,652
|
|
|
$
|
473,282
|
|
|
$
|
—
|
|
|
$
|
7,932,392
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2016
|
$
|
3,312,371
|
|
|
$
|
3,863,862
|
|
|
$
|
479,430
|
|
|
$
|
—
|
|
|
$
|
7,655,663
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
June 30, 2016
|
$
|
3,630,933
|
|
|
$
|
3,424,808
|
|
|
$
|
432,511
|
|
|
$
|
—
|
|
|
$
|
7,488,252
|
|
|
Servicing
|
|
Lending
|
|
Corporate Items and Other
|
|
Business Segments Consolidated
|
||||||||
Depreciation and Amortization Expense
|
|
|
|
|
|
|
|
||||||||
Three months ended June 30, 2017
|
|||||||||||||||
Depreciation expense
|
$
|
1,466
|
|
|
$
|
55
|
|
|
$
|
4,835
|
|
|
$
|
6,356
|
|
Amortization of mortgage servicing rights
|
12,627
|
|
|
70
|
|
|
—
|
|
|
12,697
|
|
||||
Amortization of debt discount
|
—
|
|
|
—
|
|
|
268
|
|
|
268
|
|
||||
Amortization of debt issuance costs
|
—
|
|
|
—
|
|
|
661
|
|
|
661
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Three months ended June 30, 2016
|
|||||||||||||||
Depreciation expense
|
$
|
1,206
|
|
|
$
|
65
|
|
|
$
|
5,539
|
|
|
$
|
6,810
|
|
Amortization of mortgage servicing rights
|
8,269
|
|
|
78
|
|
|
—
|
|
|
8,347
|
|
||||
Amortization of debt discount
|
178
|
|
|
—
|
|
|
—
|
|
|
178
|
|
||||
Amortization of debt issuance costs
|
2,889
|
|
|
—
|
|
|
332
|
|
|
3,221
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Six months ended June 30, 2017
|
|||||||||||||||
Depreciation expense
|
$
|
2,869
|
|
|
$
|
105
|
|
|
$
|
10,465
|
|
|
$
|
13,439
|
|
Amortization of mortgage servicing rights
|
25,271
|
|
|
141
|
|
|
—
|
|
|
25,412
|
|
||||
Amortization of debt discount
|
—
|
|
|
—
|
|
|
539
|
|
|
539
|
|
||||
Amortization of debt issuance costs
|
—
|
|
|
—
|
|
|
1,334
|
|
|
1,334
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Six months ended June 30, 2016
|
|||||||||||||||
Depreciation expense
|
$
|
2,340
|
|
|
$
|
136
|
|
|
$
|
9,374
|
|
|
$
|
11,850
|
|
Amortization of mortgage servicing rights
|
20,994
|
|
|
159
|
|
|
—
|
|
|
21,153
|
|
||||
Amortization of debt discount
|
383
|
|
|
—
|
|
|
—
|
|
|
383
|
|
||||
Amortization of debt issuance costs
|
5,822
|
|
|
—
|
|
|
676
|
|
|
6,498
|
|
•
|
representations and warranties concerning loan quality, contents of the loan file or loan underwriting circumstances are inaccurate;
|
•
|
adequate mortgage insurance is not secured within a certain period after closing;
|
•
|
a mortgage insurance provider denies coverage; or
|
•
|
there is a failure to comply, at the individual loan level or otherwise, with regulatory requirements.
|
Six months ended June 30,
|
2017
|
|
2016
|
||||
Beginning balance
|
$
|
24,285
|
|
|
$
|
36,615
|
|
Provision for representation and warranty obligations
|
(5,125
|
)
|
|
(263
|
)
|
||
New production reserves
|
381
|
|
|
354
|
|
||
Charge-offs and other (1)
|
209
|
|
|
(3,364
|
)
|
||
Ending balance
|
$
|
19,750
|
|
|
$
|
33,342
|
|
(1)
|
Includes principal and interest losses realized in connection with repurchased loans, make-whole, indemnification and fee payments and settlements net of recoveries, if any.
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Dollars in thousands, except per share amounts and unless otherwise indicated)
|
Periods ended June 30,
|
Three Months
|
|
|
|
Six Months
|
|
|
||||||||||||||
2017
|
|
2016
|
|
% Change
|
|
2017
|
|
2016
|
|
% Change
|
|||||||||||
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Servicing and subservicing fees
|
$
|
255,801
|
|
|
$
|
307,262
|
|
|
(17
|
)%
|
|
$
|
528,303
|
|
|
$
|
604,758
|
|
|
(13
|
)%
|
Gain on loans held for sale, net
|
28,255
|
|
|
27,857
|
|
|
1
|
|
|
51,199
|
|
|
43,429
|
|
|
18
|
|
||||
Other
|
27,244
|
|
|
37,935
|
|
|
(28
|
)
|
|
53,662
|
|
|
55,624
|
|
|
(4
|
)
|
||||
Total revenue
|
311,300
|
|
|
373,054
|
|
|
(17
|
)
|
|
633,164
|
|
|
703,811
|
|
|
(10
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Compensation and benefits
|
90,411
|
|
|
98,422
|
|
|
(8
|
)
|
|
182,212
|
|
|
194,671
|
|
|
(6
|
)
|
||||
Servicing and origination
|
64,516
|
|
|
89,987
|
|
|
(28
|
)
|
|
132,423
|
|
|
185,679
|
|
|
(29
|
)
|
||||
Professional services
|
65,405
|
|
|
121,399
|
|
|
(24
|
)
|
|
107,234
|
|
|
192,306
|
|
|
(44
|
)
|
||||
Technology and communications
|
24,254
|
|
|
32,709
|
|
|
(26
|
)
|
|
51,601
|
|
|
59,578
|
|
|
(13
|
)
|
||||
Occupancy and equipment
|
16,480
|
|
|
20,708
|
|
|
(20
|
)
|
|
34,229
|
|
|
45,453
|
|
|
(25
|
)
|
||||
Amortization of mortgage servicing rights
|
12,697
|
|
|
8,347
|
|
|
52
|
|
|
25,412
|
|
|
21,153
|
|
|
20
|
|
||||
Other
|
6,717
|
|
|
13,446
|
|
|
(50
|
)
|
|
23,752
|
|
|
14,835
|
|
|
60
|
|
||||
Total expenses
|
280,480
|
|
|
385,018
|
|
|
(27
|
)
|
|
556,863
|
|
|
713,675
|
|
|
(22
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest expense
|
(81,128
|
)
|
|
(91,033
|
)
|
|
(11
|
)
|
|
(165,190
|
)
|
|
(197,122
|
)
|
|
(16
|
)
|
||||
Gain on sale of mortgage servicing rights, net
|
1,033
|
|
|
853
|
|
|
21
|
|
|
1,320
|
|
|
2,028
|
|
|
(35
|
)
|
||||
Other, net
|
7,667
|
|
|
5,746
|
|
|
33
|
|
|
15,463
|
|
|
6,435
|
|
|
140
|
|
||||
Total other expense, net
|
(72,428
|
)
|
|
(84,434
|
)
|
|
(14
|
)
|
|
(148,407
|
)
|
|
(188,659
|
)
|
|
(21
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Loss before income taxes
|
(41,608
|
)
|
|
(96,398
|
)
|
|
(57
|
)
|
|
(72,106
|
)
|
|
(198,523
|
)
|
|
(64
|
)
|
||||
Income tax expense (benefit)
|
2,828
|
|
|
(9,180
|
)
|
|
(131
|
)
|
|
4,953
|
|
|
(104
|
)
|
|
n/m
|
|
||||
Net loss
|
(44,436
|
)
|
|
(87,218
|
)
|
|
(49
|
)
|
|
(77,059
|
)
|
|
(198,419
|
)
|
|
(61
|
)
|
||||
Net income attributable to non-controlling interests
|
(71
|
)
|
|
(160
|
)
|
|
(56
|
)
|
|
(172
|
)
|
|
(290
|
)
|
|
(41
|
)
|
||||
Net loss attributable to Ocwen stockholders
|
$
|
(44,507
|
)
|
|
$
|
(87,378
|
)
|
|
(49
|
)%
|
|
$
|
(77,231
|
)
|
|
$
|
(198,709
|
)
|
|
(61
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Segment income (loss) before income taxes:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Servicing
|
$
|
9,218
|
|
|
$
|
(12,184
|
)
|
|
(176
|
)%
|
|
$
|
12,347
|
|
|
$
|
(77,863
|
)
|
|
(116
|
)%
|
Lending
|
(614
|
)
|
|
5,010
|
|
|
(112
|
)
|
|
495
|
|
|
4,431
|
|
|
(89
|
)
|
||||
Corporate Items and Other
|
(50,212
|
)
|
|
(89,224
|
)
|
|
(44
|
)
|
|
(84,948
|
)
|
|
(125,091
|
)
|
|
(32
|
)
|
||||
|
$
|
(41,608
|
)
|
|
$
|
(96,398
|
)
|
|
(57
|
)%
|
|
$
|
(72,106
|
)
|
|
$
|
(198,523
|
)
|
|
(64
|
)%
|
n/m: not meaningful
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2017
|
|
December 31, 2016
|
|
% Change
|
|||||
Cash
|
$
|
251,472
|
|
|
$
|
256,549
|
|
|
(2
|
)%
|
Mortgage servicing rights
|
975,185
|
|
|
1,042,978
|
|
|
(6
|
)
|
||
Advances and match funded advances
|
1,478,255
|
|
|
1,709,846
|
|
|
(14
|
)
|
||
Loans held for sale
|
260,959
|
|
|
314,006
|
|
|
(17
|
)
|
||
Loans held for investment, at fair value
|
4,223,776
|
|
|
3,565,716
|
|
|
18
|
|
||
Other
|
742,745
|
|
|
766,568
|
|
|
(3
|
)
|
||
Total assets
|
$
|
7,932,392
|
|
|
$
|
7,655,663
|
|
|
4
|
%
|
|
|
|
|
|
|
|||||
Total assets by segment:
|
|
|
|
|
|
|||||
Servicing
|
$
|
2,975,458
|
|
|
$
|
3,312,371
|
|
|
(10
|
)%
|
Lending
|
4,483,652
|
|
|
3,863,862
|
|
|
16
|
|
||
Corporate Items and Other
|
473,282
|
|
|
479,430
|
|
|
(1
|
)
|
||
|
$
|
7,932,392
|
|
|
$
|
7,655,663
|
|
|
4
|
%
|
|
|
|
|
|
|
|||||
HMBS-related borrowings, at fair value
|
$
|
4,061,626
|
|
|
$
|
3,433,781
|
|
|
18
|
%
|
Other financing liabilities
|
533,806
|
|
|
579,031
|
|
|
(8
|
)
|
||
Match funded liabilities
|
1,108,377
|
|
|
1,280,997
|
|
|
(13
|
)
|
||
SSTL and other secured borrowings, net
|
643,860
|
|
|
678,543
|
|
|
(5
|
)
|
||
Senior notes, net
|
347,063
|
|
|
346,789
|
|
|
—
|
|
||
Other
|
657,413
|
|
|
681,239
|
|
|
(3
|
)
|
||
Total liabilities
|
$
|
7,352,145
|
|
|
$
|
7,000,380
|
|
|
5
|
%
|
|
|
|
|
|
|
|||||
Total liabilities by segment:
|
|
|
|
|
|
|||||
Servicing
|
$
|
2,096,850
|
|
|
$
|
2,369,697
|
|
|
(12
|
)%
|
Lending
|
4,390,375
|
|
|
3,785,974
|
|
|
16
|
|
||
Corporate Items and Other
|
864,920
|
|
|
844,709
|
|
|
2
|
|
||
|
$
|
7,352,145
|
|
|
$
|
7,000,380
|
|
|
5
|
%
|
|
|
|
|
|
|
|||||
Total equity
|
$
|
580,247
|
|
|
$
|
655,283
|
|
|
(11
|
)%
|
|
|
Moody’s
|
|
Morningstar
|
|
S&P
|
|
Fitch
|
Residential Prime Servicer
|
|
SQ3-
|
|
MOR RS3
|
|
Average
|
|
RPS3-
|
Residential Subprime Servicer
|
|
SQ3-
|
|
MOR RS3
|
|
Average
|
|
RPS3-
|
Residential Special Servicer
|
|
SQ3-
|
|
MOR RS3
|
|
Average
|
|
RSS3-
|
Residential Second/Subordinate Lien Servicer
|
|
SQ3-
|
|
—
|
|
Average
|
|
RPS3-
|
Residential Home Equity Servicer
|
|
—
|
|
—
|
|
—
|
|
RPS3-
|
Residential Alt-A Servicer
|
|
—
|
|
—
|
|
—
|
|
RPS3-
|
Master Servicing
|
|
SQ3
|
|
—
|
|
Average
|
|
RMS3-
|
Ratings Outlook
|
|
N/A
|
|
Alert
|
|
Stable
|
|
Negative
|
|
|
|
|
|
|
|
|
|
Date of last action
|
|
April 24, 2017
|
|
April 25, 2017
|
|
August 9, 2016
|
|
April 25, 2017
|
Periods ended June 30,
|
Three Months
|
|
|
|
Six Months
|
|
|
||||||||||||||
2017
|
|
2016
|
|
% Change
|
|
2017
|
|
2016
|
|
% Change
|
|||||||||||
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Servicing and subservicing fees:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential
|
$
|
254,296
|
|
|
$
|
304,972
|
|
|
(17
|
)%
|
|
$
|
524,846
|
|
|
$
|
600,832
|
|
|
(13
|
)%
|
Commercial
|
1,641
|
|
|
2,427
|
|
|
(32
|
)
|
|
3,896
|
|
|
4,208
|
|
|
(7
|
)
|
||||
|
255,937
|
|
|
307,399
|
|
|
(17
|
)
|
|
528,742
|
|
|
605,040
|
|
|
(13
|
)
|
||||
Gain on loans held for sale, net
|
4,545
|
|
|
6,816
|
|
|
(33
|
)
|
|
4,713
|
|
|
5,963
|
|
|
(21
|
)
|
||||
Other
|
11,302
|
|
|
10,905
|
|
|
4
|
|
|
22,347
|
|
|
21,544
|
|
|
4
|
|
||||
Total revenue
|
271,784
|
|
|
325,120
|
|
|
(16
|
)
|
|
555,802
|
|
|
632,547
|
|
|
(12
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Compensation and benefits
|
40,244
|
|
|
48,533
|
|
|
(17
|
)
|
|
81,366
|
|
|
98,660
|
|
|
(18
|
)
|
||||
Servicing and origination
|
58,359
|
|
|
78,905
|
|
|
(26
|
)
|
|
120,574
|
|
|
171,879
|
|
|
(30
|
)
|
||||
Professional services
|
15,045
|
|
|
36,081
|
|
|
(58
|
)
|
|
34,928
|
|
|
69,584
|
|
|
(50
|
)
|
||||
Technology and communications
|
11,536
|
|
|
13,407
|
|
|
(14
|
)
|
|
23,809
|
|
|
28,869
|
|
|
(18
|
)
|
||||
Occupancy and equipment
|
11,985
|
|
|
14,916
|
|
|
(20
|
)
|
|
24,333
|
|
|
35,466
|
|
|
(31
|
)
|
||||
Amortization of mortgage servicing rights
|
12,627
|
|
|
8,269
|
|
|
53
|
|
|
25,271
|
|
|
20,994
|
|
|
20
|
|
||||
Other
|
52,132
|
|
|
57,640
|
|
|
(10
|
)
|
|
108,561
|
|
|
106,618
|
|
|
2
|
|
||||
Total expenses
|
201,928
|
|
|
257,751
|
|
|
(22
|
)
|
|
418,842
|
|
|
532,070
|
|
|
(21
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Interest income
|
174
|
|
|
(15
|
)
|
|
n/m
|
|
|
261
|
|
|
(161
|
)
|
|
(262
|
)
|
||||
Interest expense
|
(63,903
|
)
|
|
(81,197
|
)
|
|
(21
|
)
|
|
(131,254
|
)
|
|
(177,670
|
)
|
|
(26
|
)
|
||||
Gain on sale of mortgage servicing rights, net
|
1,034
|
|
|
853
|
|
|
21
|
|
|
1,320
|
|
|
2,028
|
|
|
(35
|
)
|
||||
Other, net
|
2,057
|
|
|
806
|
|
|
155
|
|
|
5,060
|
|
|
(2,537
|
)
|
|
(299
|
)
|
||||
Total other expense, net
|
(60,638
|
)
|
|
(79,553
|
)
|
|
(24
|
)
|
|
(124,613
|
)
|
|
(178,340
|
)
|
|
(30
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Income (loss) before income taxes
|
$
|
9,218
|
|
|
$
|
(12,184
|
)
|
|
(176
|
)%
|
|
$
|
12,347
|
|
|
$
|
(77,863
|
)
|
|
(116
|
)%
|
n/m: not meaningful
|
|
|
|
|
|
|
|
|
|
|
|
Periods ended June 30,
|
Three Months
|
|
Six Months
|
||||||||||||||||||
2017
|
|
2016
|
|
% Change
|
|
2017
|
|
2016
|
|
% Change
|
|||||||||||
Residential Assets Serviced
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Average UPB:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Servicing portfolio
|
$
|
82,678,931
|
|
|
$
|
96,132,651
|
|
|
(14
|
)%
|
|
$
|
83,467,579
|
|
|
$
|
97,561,456
|
|
|
(14
|
)%
|
Subservicing portfolio
|
4,140,396
|
|
|
6,307,062
|
|
|
(34
|
)
|
|
4,192,076
|
|
|
8,178,086
|
|
|
(49
|
)
|
||||
NRZ (3)
|
111,981,031
|
|
|
130,528,844
|
|
|
(14
|
)
|
|
114,624,705
|
|
|
132,743,871
|
|
|
(14
|
)
|
||||
Total
|
$
|
198,800,358
|
|
|
$
|
232,968,557
|
|
|
(15
|
)%
|
|
$
|
202,284,360
|
|
|
$
|
238,483,413
|
|
|
(15
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
Periods ended June 30,
|
Three Months
|
|
Six Months
|
||||||||||||||||||
2017
|
|
2016
|
|
% Change
|
|
2017
|
|
2016
|
|
% Change
|
|||||||||||
Prepayment speed (average CPR)
|
15
|
%
|
|
14
|
%
|
|
7
|
%
|
|
14
|
%
|
|
13
|
%
|
|
8
|
%
|
||||
% Voluntary
|
80
|
|
|
79
|
|
|
1
|
|
|
80
|
|
|
78
|
|
|
3
|
|
||||
% Involuntary
|
20
|
|
|
21
|
|
|
(5
|
)
|
|
20
|
|
|
22
|
|
|
(9
|
)
|
||||
% CPR due to principal modification
|
1
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
2
|
|
|
(50
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Average count:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Servicing portfolio
|
526,279
|
|
|
603,347
|
|
|
(13
|
)%
|
|
531,279
|
|
|
611,903
|
|
|
(13
|
)%
|
||||
Subservicing portfolio
|
30,600
|
|
|
42,674
|
|
|
(28
|
)
|
|
30,664
|
|
|
52,389
|
|
|
(41
|
)
|
||||
NRZ (3)
|
775,836
|
|
|
882,049
|
|
|
(12
|
)
|
|
791,692
|
|
|
894,158
|
|
|
(11
|
)
|
||||
|
1,332,715
|
|
|
1,528,070
|
|
|
(13
|
)%
|
|
1,353,635
|
|
|
1,558,450
|
|
|
(13
|
)%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential Servicing and Subservicing Fees
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Loan servicing and subservicing fees:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Servicing
|
$
|
65,362
|
|
|
$
|
75,832
|
|
|
(14
|
)%
|
|
$
|
133,216
|
|
|
$
|
153,291
|
|
|
(13
|
)%
|
Subservicing
|
1,964
|
|
|
3,197
|
|
|
(39
|
)
|
|
4,033
|
|
|
8,447
|
|
|
(52
|
)
|
||||
NRZ
|
143,612
|
|
|
160,518
|
|
|
(11
|
)
|
|
290,923
|
|
|
322,647
|
|
|
(10
|
)
|
||||
|
210,938
|
|
|
239,547
|
|
|
(12
|
)
|
|
428,172
|
|
|
484,385
|
|
|
(12
|
)
|
||||
HAMP fees
|
10,489
|
|
|
33,486
|
|
|
(69
|
)
|
|
31,459
|
|
|
56,108
|
|
|
(44
|
)
|
||||
Late charges
|
15,534
|
|
|
17,380
|
|
|
(11
|
)
|
|
32,243
|
|
|
35,906
|
|
|
(10
|
)
|
||||
Loan collection fees
|
5,926
|
|
|
6,974
|
|
|
(15
|
)
|
|
12,235
|
|
|
14,093
|
|
|
(13
|
)
|
||||
Other
|
11,409
|
|
|
7,585
|
|
|
50
|
|
|
20,737
|
|
|
10,340
|
|
|
101
|
|
||||
|
$
|
254,296
|
|
|
$
|
304,972
|
|
|
(17
|
)%
|
|
$
|
524,846
|
|
|
$
|
600,832
|
|
|
(13
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest Expense on NRZ/HLSS Financing Liability (4)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Servicing fees collected on behalf of NRZ/HLSS
|
$
|
143,612
|
|
|
$
|
160,518
|
|
|
(11
|
)%
|
|
$
|
290,923
|
|
|
$
|
322,647
|
|
|
(10
|
)%
|
Less: Subservicing fee retained by Ocwen
|
78,794
|
|
|
85,532
|
|
|
(8
|
)
|
|
157,947
|
|
|
169,902
|
|
|
(7
|
)
|
||||
Net servicing fees remitted to NRZ/HLSS
|
64,818
|
|
|
74,986
|
|
|
(14
|
)
|
|
132,976
|
|
|
152,745
|
|
|
(13
|
)
|
||||
Less: Reduction in financing liability
|
16,194
|
|
|
27,628
|
|
|
(41
|
)
|
|
33,193
|
|
|
45,829
|
|
|
(28
|
)
|
||||
Interest expense on NRZ/HLSS financing liability
|
$
|
48,624
|
|
|
$
|
47,358
|
|
|
3
|
%
|
|
$
|
99,783
|
|
|
$
|
106,916
|
|
|
(7
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Number of Completed Modifications
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
HAMP
|
2,681
|
|
|
10,941
|
|
|
(75
|
)%
|
|
11,629
|
|
|
18,640
|
|
|
(38
|
)%
|
||||
Non-HAMP
|
8,348
|
|
|
8,788
|
|
|
(5
|
)
|
|
17,795
|
|
|
17,693
|
|
|
1
|
|
||||
Total
|
11,029
|
|
|
19,729
|
|
|
(44
|
)%
|
|
29,424
|
|
|
36,333
|
|
|
(19
|
)%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
Periods ended June 30,
|
Three Months
|
|
Six Months
|
||||||||||||||||||
2017
|
|
2016
|
|
% Change
|
|
2017
|
|
2016
|
|
% Change
|
|||||||||||
Financing Costs
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Average balance of advances and match funded advances
|
$
|
1,539,991
|
|
|
$
|
1,970,440
|
|
|
(22
|
)%
|
|
$
|
1,594,019
|
|
|
$
|
2,037,767
|
|
|
(22
|
)%
|
Average borrowings
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Match funded liabilities
|
1,145,567
|
|
|
1,485,302
|
|
|
(23
|
)
|
|
1,194,100
|
|
|
1,521,644
|
|
|
(22
|
)
|
||||
Financing liabilities
|
544,467
|
|
|
655,263
|
|
|
(17
|
)
|
|
556,261
|
|
|
668,278
|
|
|
(17
|
)
|
||||
Other secured borrowings
|
23,508
|
|
|
405,985
|
|
|
(94
|
)
|
|
24,318
|
|
|
413,362
|
|
|
(94
|
)
|
||||
Interest expense on borrowings
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Match funded liabilities
|
12,092
|
|
|
18,133
|
|
|
(33
|
)
|
|
24,819
|
|
|
36,307
|
|
|
(32
|
)
|
||||
Financing liabilities
|
50,290
|
|
|
52,803
|
|
|
(5
|
)
|
|
103,262
|
|
|
120,578
|
|
|
(14
|
)
|
||||
Other secured borrowings
|
441
|
|
|
9,018
|
|
|
(95
|
)
|
|
857
|
|
|
18,283
|
|
|
(95
|
)
|
||||
Effective average interest rate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Match funded liabilities
|
4.22
|
%
|
|
4.88
|
%
|
|
(14
|
)
|
|
4.16
|
%
|
|
4.77
|
%
|
|
(13
|
)
|
||||
Financing liabilities (4)
|
36.95
|
|
|
32.23
|
|
|
15
|
|
|
37.13
|
%
|
|
36.09
|
|
|
3
|
|
||||
Other secured borrowings
|
7.50
|
|
|
8.89
|
|
|
(16
|
)
|
|
7.05
|
%
|
|
8.85
|
|
|
(20
|
)
|
||||
Facility costs included in interest expense
|
$
|
1,657
|
|
|
$
|
8,890
|
|
|
(81
|
)
|
|
$
|
3,419
|
|
|
$
|
17,566
|
|
|
(81
|
)
|
Discount amortization included in interest expense
|
—
|
|
|
178
|
|
|
(100
|
)
|
|
—
|
|
|
383
|
|
|
(100
|
)
|
||||
Average 1-month LIBOR
|
1.06
|
%
|
|
0.44
|
%
|
|
141
|
|
|
0.92
|
%
|
|
0.44
|
%
|
|
109
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Average Employment
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
India and other
|
5,237
|
|
|
6,551
|
|
|
(20
|
)%
|
|
5,412
|
|
|
6,668
|
|
|
(19
|
)%
|
||||
U. S.
|
1,220
|
|
|
1,534
|
|
|
(20
|
)
|
|
1,236
|
|
|
1,571
|
|
|
(21
|
)
|
||||
Total
|
6,457
|
|
|
8,085
|
|
|
(20
|
)%
|
|
6,648
|
|
|
8,239
|
|
|
(19
|
)%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Collections on loans serviced for others
|
$
|
9,586,497
|
|
|
$
|
10,406,084
|
|
|
(8
|
)%
|
|
$
|
18,867,034
|
|
|
$
|
20,059,559
|
|
|
(6
|
)%
|
(1)
|
Performing loans include those loans that are current (less than 90 days past due) and those loans for which borrowers are making scheduled payments under loan modification, forbearance or bankruptcy plans. We consider all other loans to be non-performing.
|
(2)
|
Conventional loans include
151,554
and
183,615
prime loans with a UPB of
$27.3 billion
and
$34.9 billion
at
June 30, 2017
and
June 30, 2016
, respectively, that we service or subservice.
|
(3)
|
Loans serviced by Ocwen for which the Rights to MSRs have been sold to NRZ. Under our 2012 and 2013 agreements with NRZ, we remit servicing fees collected on the underlying MSRs, except for the ancillary fees (other than float earnings). The servicing fees that we remit, net of the subservicing and performance fees that we receive, are accounted for as a reduction of the NRZ financing liability and as interest expense. Changes in the fair value of the MSRs underlying the financing liability are also included in the amount reported as interest expense.
|
(4)
|
The effective average interest rate on the financing liability that we recognized in connection with the sales of Rights to MSRs to NRZ is
43.25%
and
40.33%
for the
three months ended June 30, 2017 and 2016
, respectively, and
43.45%
and
45.03%
for the
six months ended June 30, 2017 and 2016
, respectively. Interest expense on financing liabilities for the
three and six months ended June 30, 2016
included
$4.3 million
and
$10.5 million
, respectively, of fees incurred in connection with our agreement to compensate NRZ through June 2016 for certain increased costs associated with its servicing advance financing facilities that were the direct result of a downgrade of our S&P servicer rating in 2015.
|
|
Amount of UPB
|
|
Count
|
||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||
Portfolio at January 1
|
$
|
209,092,130
|
|
|
$
|
250,966,112
|
|
|
1,393,766
|
|
|
1,624,762
|
|
Additions
|
1,403,213
|
|
|
1,531,715
|
|
|
6,675
|
|
|
7,969
|
|
||
Sales
|
(52,162
|
)
|
|
(34,643
|
)
|
|
(260
|
)
|
|
(126
|
)
|
||
Servicing transfers
|
(220,169
|
)
|
|
(6,745,819
|
)
|
|
(1,253
|
)
|
|
(34,506
|
)
|
||
Runoff
|
(7,853,998
|
)
|
|
(8,636,329
|
)
|
|
(44,972
|
)
|
|
(47,132
|
)
|
||
Portfolio at March 31
|
202,369,014
|
|
|
237,081,036
|
|
|
1,353,956
|
|
|
1,550,967
|
|
||
Additions
|
1,152,541
|
|
|
2,079,670
|
|
|
5,434
|
|
|
9,843
|
|
||
Sales
|
(82,571
|
)
|
|
(179,110
|
)
|
|
(410
|
)
|
|
(831
|
)
|
||
Servicing transfers
|
(484,530
|
)
|
|
(458,189
|
)
|
|
(2,015
|
)
|
|
(1,547
|
)
|
||
Runoff
|
(8,156,030
|
)
|
|
(9,247,406
|
)
|
|
(46,855
|
)
|
|
(51,942
|
)
|
||
Portfolio at June 30
|
$
|
194,798,424
|
|
|
$
|
229,276,001
|
|
|
1,310,110
|
|
|
1,506,490
|
|
Periods ended June 30,
|
Three Months
|
|
Six Months
|
||||||||||||||||||
2017
|
|
2016
|
|
% Change
|
|
2017
|
|
2016
|
|
% Change
|
|||||||||||
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Gain on loans held for sale, net
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Forward loans
|
$
|
9,261
|
|
|
$
|
9,606
|
|
|
(4
|
)%
|
|
$
|
20,621
|
|
|
$
|
22,666
|
|
|
(9
|
)%
|
Reverse loans
|
14,430
|
|
|
11,472
|
|
|
26
|
|
|
25,728
|
|
|
14,915
|
|
|
72
|
|
||||
|
23,691
|
|
|
21,078
|
|
|
12
|
|
|
46,349
|
|
|
37,581
|
|
|
23
|
|
||||
Other
|
9,085
|
|
|
14,298
|
|
|
(36
|
)
|
|
17,173
|
|
|
21,079
|
|
|
(19
|
)
|
||||
Total revenue
|
32,776
|
|
|
35,376
|
|
|
(7
|
)
|
|
63,522
|
|
|
58,660
|
|
|
8
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Compensation and benefits
|
20,027
|
|
|
18,394
|
|
|
9
|
|
|
38,992
|
|
|
35,078
|
|
|
11
|
|
||||
Servicing and origination
|
4,825
|
|
|
4,578
|
|
|
5
|
|
|
9,086
|
|
|
7,220
|
|
|
26
|
|
||||
Professional services
|
641
|
|
|
484
|
|
|
32
|
|
|
983
|
|
|
640
|
|
|
54
|
|
||||
Technology and communications
|
569
|
|
|
792
|
|
|
(28
|
)
|
|
1,349
|
|
|
2,109
|
|
|
(36
|
)
|
||||
Occupancy and equipment
|
1,548
|
|
|
1,950
|
|
|
(21
|
)
|
|
2,697
|
|
|
3,073
|
|
|
(12
|
)
|
||||
Amortization of mortgage servicing rights
|
70
|
|
|
78
|
|
|
(10
|
)
|
|
141
|
|
|
159
|
|
|
(11
|
)
|
||||
Other
|
5,206
|
|
|
4,905
|
|
|
6
|
|
|
8,969
|
|
|
7,279
|
|
|
23
|
|
||||
Total expenses
|
32,886
|
|
|
31,181
|
|
|
5
|
|
|
62,217
|
|
|
55,558
|
|
|
12
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest income
|
3,007
|
|
|
4,204
|
|
|
(28
|
)
|
|
5,754
|
|
|
7,815
|
|
|
(26
|
)
|
||||
Interest expense
|
(3,383
|
)
|
|
(3,697
|
)
|
|
(8
|
)
|
|
(6,667
|
)
|
|
(7,145
|
)
|
|
(7
|
)
|
||||
Other, net
|
(128
|
)
|
|
308
|
|
|
(142
|
)
|
|
103
|
|
|
659
|
|
|
(84
|
)
|
||||
Total other income (expense), net
|
(504
|
)
|
|
815
|
|
|
(162
|
)
|
|
(810
|
)
|
|
1,329
|
|
|
(161
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (loss) before income taxes
|
$
|
(614
|
)
|
|
$
|
5,010
|
|
|
(112
|
)%
|
|
$
|
495
|
|
|
$
|
4,431
|
|
|
(89
|
)%
|
Periods ended June 30,
|
Three Months
|
|
Six Months
|
||||||||||||||||||
2017
|
|
2016
|
|
% Change
|
|
2017
|
|
2016
|
|
% Change
|
|||||||||||
Loan Production by Channel
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Forward loans
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Correspondent
|
$
|
159,560
|
|
|
$
|
539,618
|
|
|
(70
|
)%
|
|
$
|
456,804
|
|
|
$
|
892,091
|
|
|
(49
|
)%
|
Wholesale
|
355,560
|
|
|
479,299
|
|
|
(26
|
)
|
|
717,449
|
|
|
835,179
|
|
|
(14
|
)
|
||||
Retail
|
184,376
|
|
|
94,024
|
|
|
96
|
|
|
365,776
|
|
|
173,803
|
|
|
110
|
|
||||
|
$
|
699,496
|
|
|
$
|
1,112,941
|
|
|
(37
|
)%
|
|
$
|
1,540,029
|
|
|
$
|
1,901,073
|
|
|
(19
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
% HARP production
|
6
|
%
|
|
4
|
%
|
|
50
|
%
|
|
6
|
%
|
|
5
|
%
|
|
20
|
%
|
||||
% Purchase production
|
41
|
|
|
40
|
|
|
3
|
|
|
37
|
|
|
37
|
|
|
—
|
|
||||
% Refinance production
|
59
|
|
|
60
|
|
|
(2
|
)
|
|
63
|
|
|
63
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Reverse loans
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Correspondent
|
$
|
145,691
|
|
|
$
|
93,918
|
|
|
55
|
%
|
|
$
|
309,239
|
|
|
$
|
185,702
|
|
|
67
|
%
|
Wholesale
|
86,400
|
|
|
73,147
|
|
|
18
|
|
|
165,953
|
|
|
140,848
|
|
|
18
|
|
||||
Retail
|
43,357
|
|
|
39,888
|
|
|
9
|
|
|
73,332
|
|
|
71,559
|
|
|
2
|
|
||||
|
$
|
275,448
|
|
|
$
|
206,953
|
|
|
33
|
%
|
|
$
|
548,524
|
|
|
$
|
398,109
|
|
|
38
|
%
|
•
|
Collections of servicing fees and ancillary revenues;
|
•
|
Proceeds from match funded advance financing facilities;
|
•
|
Proceeds from other borrowings, including warehouse facilities; and
|
•
|
Proceeds from sales of originated loans and repurchased loans.
|
•
|
Payments for advances in excess of collections on existing servicing portfolios;
|
•
|
Payment of interest and operating costs;
|
•
|
Funding of originated and repurchased loans;
|
•
|
Repayments of borrowings, including match funded liabilities and warehouse facilities; and
|
•
|
Working capital and other general corporate purposes.
|
•
|
Business financial projections for revenues, costs and net income;
|
•
|
Requirements for maturing liabilities compared to amounts generated from maturing assets and operating cash flow;
|
•
|
Any projected future sales of MSRs and the reimbursement of related servicing advances;
|
•
|
The change in advances and match funded advances compared to the change in match funded liabilities and available borrowing capacity;
|
•
|
Projected future originations and purchases of forward and reverse mortgage loans and automobile dealer floor plan loans; and
|
•
|
Projected funding requirements of new business initiatives.
|
•
|
On February 24, 2017, we executed a $200.0 million warehouse facility to replace an existing facility of the same size and with the same lender maturing in February 2018.
|
•
|
On February 24, 2017 and on March 17, 2017, we executed two match funded lending agreements under which we can borrow up to $50.0 million each to finance the automotive dealer loans made by our ACS business.
We may from time to time request increases in the maximum borrowing capacity under these agreements to a maximum of $100.0 million each.
|
•
|
On April 25, 2017, we extended to April 30, 2018 the maturity of two warehouse facilities with a combined uncommitted borrowing capacity of $250.0 million.
|
•
|
On May 18, 2017, we negotiated a reduction in the borrowing capacity of two warehouse facilities from a combined $110.0 million to $75.0 million.
|
•
|
On May 29, 2017, we negotiated a change in the borrowing capacity of two warehouse facilities from $200.0 million available on a committed basis to $100.0 million available on a committed basis and the remainder of the borrowing capacity available at the discretion of the lender.
On August 1, 2017, we voluntarily terminated these facilities.
|
•
|
On June 8, 2017, we negotiated a renewal through June 7, 2018 of an advance financing facility. As part of the renewal, we decreased the maximum borrowing capacity of the facility from $160.0 million to $110.0 million.
|
•
|
Effective June 30, 2017, we negotiated a reduction in the combined borrowing capacity under the variable rate notes of an advance financing facility from $420.0 million to $210.0 million.
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
Loans held for sale
|
$
|
260,959
|
|
|
$
|
314,006
|
|
Loans held for investment - Reverse mortgages
|
4,223,776
|
|
|
3,565,716
|
|
||
MSRs - recurring basis
|
625,650
|
|
|
679,256
|
|
||
MSRs - nonrecurring basis, net (1)
|
135,515
|
|
|
144,783
|
|
||
Derivative assets
|
9,051
|
|
|
9,279
|
|
||
Mortgage-backed securities
|
8,986
|
|
|
8,342
|
|
||
U.S. Treasury notes
|
2,076
|
|
|
2,078
|
|
||
Assets at fair value
|
$
|
5,266,013
|
|
|
$
|
4,723,460
|
|
As a percentage of total assets
|
66
|
%
|
|
62
|
%
|
||
Financing liabilities
|
$
|
4,502,633
|
|
|
$
|
3,911,488
|
|
Derivative liabilities
|
10
|
|
|
1,550
|
|
||
Liabilities at fair value
|
$
|
4,502,643
|
|
|
$
|
3,913,038
|
|
As a percentage of total liabilities
|
61
|
%
|
|
56
|
%
|
||
Assets at fair value using Level 3 inputs
|
$
|
5,017,333
|
|
|
$
|
4,429,307
|
|
As a percentage of assets at fair value
|
95
|
%
|
|
94
|
%
|
||
Liabilities at fair value using Level 3 inputs
|
$
|
4,502,633
|
|
|
$
|
3,911,488
|
|
As a percentage of liabilities at fair value
|
100
|
%
|
|
100
|
%
|
(1)
|
The balance represents our impaired government-insured stratum of amortization method MSRs, which is measured at fair value on a nonrecurring basis. The carrying value of this stratum is net of a valuation allowance of
$32.8 million
and
$28.2 million
at
June 30, 2017
and
December 31, 2016
, respectively.
|
•
|
our current financial condition, including liquidity sources at the date that the financial statements are issued (e.g., available liquid funds and available access to credit, including covenant compliance);
|
•
|
our conditional and unconditional obligations due or anticipated within one year after the date that the financial statements are issued (regardless of whether those obligations are recognized in our financial statements);
|
•
|
funds necessary to maintain operations considering our current financial condition, obligations and other expected cash flows within one year after the date that the financial statements are issued (i.e., financial forecasting); and
|
•
|
other conditions and events, when considered in conjunction with the above items, that may adversely affect our ability to meet obligations within one year after the date that the financial statements are issued (e.g., negative financial trends, indications of possible financial difficulties, internal matters such as a need to significantly revise operations and external matters such as adverse regulatory/legal proceedings or rating agency decisions).
|
•
|
it is probable management’s plans will be implemented within the evaluation period; and
|
•
|
it is probable management’s plans, when implemented individually or in the aggregate, will mitigate the condition(s) that raise substantial doubt about our ability to continue as a going concern in the evaluation period.
|
•
|
Income Taxes: Balance Sheet Classification of Deferred Taxes (ASU 2015-17)
|
•
|
Derivatives and Hedging: Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships (ASU 2016-05)
|
•
|
Derivatives and Hedging: Contingent Put and Call Options in Debt Instruments (ASU 2016-06)
|
•
|
Investments - Equity Method and Joint Ventures: Simplifying the Transition to the Equity Method of Accounting (ASU 2016-07)
|
•
|
Compensation - Stock Compensation: Improvements to Employee Shared-Based Payment Accounting (ASU 2016-09)
|
•
|
Consolidation: Interests Held through Related Parties That Are under Common Control (ASU 2016-17)
|
•
|
Technical Corrections and Improvements (ASU 2016-19)
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK (Dollars in thousands unless otherwise indicated)
|
|
June 30, 2017
|
|
December 31, 2016
|
||||||||||||
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
||||||||
Rate-Sensitive Assets:
|
|
|
|
|
|
|
|
||||||||
Interest-earning cash
|
$
|
93,334
|
|
|
$
|
93,334
|
|
|
$
|
146,698
|
|
|
$
|
146,698
|
|
Loans held for sale, at fair value
|
239,490
|
|
|
239,490
|
|
|
284,632
|
|
|
284,632
|
|
||||
Loans held for sale, at lower of cost or fair value (1)
|
21,469
|
|
|
21,469
|
|
|
29,374
|
|
|
29,374
|
|
||||
Loans held for investment, at fair value
|
4,223,776
|
|
|
4,223,776
|
|
|
3,565,716
|
|
|
3,565,716
|
|
||||
Automotive dealer financing notes (including match funded)
|
33,867
|
|
|
33,527
|
|
|
33,224
|
|
|
33,147
|
|
||||
U.S. Treasury notes
|
2,076
|
|
|
2,076
|
|
|
2,078
|
|
|
2,078
|
|
||||
Debt service accounts and interest-earning time deposits
|
46,657
|
|
|
46,657
|
|
|
49,276
|
|
|
49,276
|
|
||||
Total rate-sensitive assets
|
$
|
4,660,669
|
|
|
$
|
4,660,329
|
|
|
$
|
4,110,998
|
|
|
$
|
4,110,921
|
|
|
|
|
|
|
|
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||||||||||
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
||||||||
Rate-Sensitive Liabilities:
|
|
|
|
|
|
|
|
||||||||
Match funded liabilities
|
$
|
1,108,377
|
|
|
$
|
1,103,202
|
|
|
$
|
1,280,997
|
|
|
$
|
1,275,059
|
|
HMBS-related borrowings
|
4,061,626
|
|
|
4,061,626
|
|
|
3,433,781
|
|
|
3,433,781
|
|
||||
Other secured borrowings (2)
|
643,860
|
|
|
653,746
|
|
|
678,543
|
|
|
682,703
|
|
||||
Senior notes (2)
|
347,063
|
|
|
335,084
|
|
|
346,789
|
|
|
355,303
|
|
||||
Total rate-sensitive liabilities
|
$
|
6,160,926
|
|
|
$
|
6,153,658
|
|
|
$
|
5,740,110
|
|
|
$
|
5,746,846
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||||||||||
|
Notional
Balance
|
|
Fair
Value
|
|
Notional
Balance
|
|
Fair
Value
|
||||||||
Rate-Sensitive Derivative Financial Instruments:
|
|
|
|
|
|
|
|
||||||||
Derivative assets (liabilities):
|
|
|
|
|
|
|
|
||||||||
Interest rate caps
|
$
|
725,000
|
|
|
$
|
1,937
|
|
|
$
|
955,000
|
|
|
$
|
1,836
|
|
IRLCs
|
245,578
|
|
|
5,352
|
|
|
360,450
|
|
|
6,507
|
|
||||
Forward MBS trades
|
392,596
|
|
|
1,752
|
|
|
609,177
|
|
|
(614
|
)
|
||||
Derivatives, net
|
|
|
|
$
|
9,041
|
|
|
|
|
|
$
|
7,729
|
|
(1)
|
Net of market valuation allowances and including non-performing loans.
|
(2)
|
The carrying values are net of unamortized debt issuance costs and discount.
|
|
Change in Fair Value
|
||||||
|
Down 25 bps
|
|
Up 25 bps
|
||||
Loans held for sale
|
$
|
2,590
|
|
|
$
|
(3,135
|
)
|
Forward MBS trades
|
(3,469
|
)
|
|
4,087
|
|
||
Total loans held for sale and related derivatives
|
(879
|
)
|
|
952
|
|
||
|
|
|
|
||||
Fair value MSRs (1)
|
(776
|
)
|
|
799
|
|
||
MSRs, embedded in pipeline
|
(290
|
)
|
|
280
|
|
||
Total fair value MSRs
|
(1,066
|
)
|
|
1,079
|
|
||
|
|
|
|
||||
Total, net
|
$
|
(1,945
|
)
|
|
$
|
2,031
|
|
(1)
|
This change in fair value reflects the impact of market rate changes on projected prepayments on the Agency MSR portfolio carried at fair value. Additionally, non-Agency MSRs carried at fair value can exhibit cash flow sensitivity for advance financing costs and / or float earnings indexed to a market rate. However, we believe the pricing levels on aged non-Agency MSRs should remain stable despite the recent rise in LIBOR rates, given the lack of market transactions supporting any pricing change, and the general industry approach to conservatively valuing such assets. As such, we have assumed zero sensitivity to a 25 bps change in market rates for the non-Agency MSR portfolio.
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 1A.
|
RISK FACTORS
|
ITEM 6.
|
EXHIBITS
|
|
|
|
||
|
|
|
||
|
|
|
||
|
|
|
||
|
|
|
||
|
|
|
||
|
|
|
||
|
|
101.INS
|
|
XBRL Instance Document (filed herewith)
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document (filed herewith)
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document (filed herewith)
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document (filed herewith)
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document (filed herewith)
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document (filed herewith)
|
|
|
|
|
|
(1)
|
Incorporated by reference to the similarly described exhibit included with the Registrant’s Form 8-K filed with the SEC on February 19, 2016.
|
(2)
|
Incorporated by reference to the similarly described exhibit included with the Registrant’s Form 8-K filed with the SEC on May 24, 2017.
|
|
Ocwen Financial Corporation
|
|
|
|
|
|
By:
|
/s/ Michael R. Bourque, Jr.
|
|
|
Michael R. Bourque, Jr.
|
|
|
Executive Vice President and Chief Financial Officer
(On behalf of the Registrant and as its principal financial officer)
|
Date: August 3, 2017
|
|
|
|
|
(A)
|
The Board of Directors is expressly authorized at any time, and from time to time, to provide for the issuance of shares of Preferred Stock in one or more series, with such voting powers, full or limited, or without voting powers, and with such designations, preferences and relative, participating, optional or other special rights, and qualifications, limitations or restrictions thereof, as shall be stated and expressed in the resolutions providing for the issue thereof adopted by the Board of Directors, and as are not stated and expressed in these Articles of Incorporation, or any amendment thereto, including (but without limiting the generality of the foregoing) the following:
|
|
|
(1)
|
the designation of and number of shares constituting such series;
|
|
|
(2)
|
the dividend rate of such series, the conditions and dates upon which such dividends shall be payable, the preference or relation which such dividends shall bear to the dividends payable on any other class or classes or of any other series of capital stock, and whether such dividends shall be cumulative or non-cumulative;
|
|
|
(3)
|
whether the shares of such series shall be subject to redemption by this corporation, and, if made subject to such redemption, the times, prices and other terms and conditions of such redemption;
|
|
|
(4)
|
the terms and amounts of any sinking fund, if any, provided for the purchase or redemption of the shares of such series;
|
|
|
(5)
|
whether or not the shares of such series shall be convertible into or exchangeable for shares of any other class or classes or of any other series of any class or classes of capital stock of this corporation, and, if provision be made for conversion or exchange, the times, prices, rates, adjustments and other terms and conditions of such conversion or exchange;
|
|
|
(6)
|
the extent, if any, to which the holders of the shares of such series shall be entitled to vote as a class or otherwise with respect to the election of the directors or otherwise;
|
|
|
(7)
|
the restrictions, if any, on the issue or reissue of any additional Preferred Stock; and
|
|
|
(8)
|
the rights of the holders of the shares of such series upon the dissolution of, or upon the distribution of assets of, this corporation.
|
|
|
(B)
|
Except as otherwise required by law and except for such voting powers with respect to the election of directors or other matters as may be stated in the resolutions of the Board of Directors creating any series of Preferred Stock, the holder of any such series shall have no voting power whatsoever.
|
|
|
(A)
|
The Board of Directors is expressly authorized at any time, and from time to time, to provide for the issuance of shares of Preferred Stock in one or more series, with such voting powers, full or limited, or without voting powers, and with such designations, preferences and relative, participating, optional or other special rights, and qualifications, limitations or restrictions thereof, as shall be stated and expressed in the resolutions providing for the issue thereof adopted by the Board of Directors, and as are not stated and expressed in these Articles of Incorporation, or any amendment thereto, including (but without limiting the generality of the foregoing) the following:
|
|
|
(1)
|
the designation of and number of shares constituting such series;
|
|
|
(2)
|
the dividend rate of such series, the conditions and dates upon which such dividends shall be payable, the preference or relation which such dividends shall bear to the dividends payable on any other class or classes or of any other series of capital stock, and whether such dividends shall be cumulative or non-cumulative;
|
|
|
(3)
|
whether the shares of such series shall be subject to redemption by this corporation, and, if made subject to such redemption, the times, prices and other terms and conditions of such redemption;
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(4)
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the terms and amounts of any sinking fund, if any, provided for the purchase or redemption of the shares of such series;
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(5)
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whether or not the shares of such series shall be convertible into or exchangeable for shares of any other class or classes or of any other series of any class or classes of capital stock of this corporation, and, if provision be made for conversion or exchange, the times, prices, rates, adjustments and other terms and conditions of such conversion or exchange;
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(6)
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the extent, if any, to which the holders of the shares of such series shall be entitled to vote as a class or otherwise with respect to the election of the directors or otherwise;
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(7)
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the restrictions, if any, on the issue or reissue of any additional Preferred Stock; and
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(8)
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the rights of the holders of the shares of such series upon the dissolution of, or upon the distribution of assets of, this corporation.
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(B)
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Except as otherwise required by law and except for such voting powers with respect to the election of directors or other matters as may be stated in the resolutions of the Board of Directors creating any series of Preferred Stock, the holder of any such series shall have no voting power whatsoever.
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A.
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If amending name, enter the new name of the corporation
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B.
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Enter new principal office address, if applicable
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2002 Summit Boulevard, Suite 600
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(Principal office address
MUST BE A STREET ADDRESS
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Atlanta, GA 30319
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C.
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Enter new mailing address, if applicable
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(Mailing address
MAY BE A POST OFFICE BOX
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Name of New Registered Agent
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New Registered Office Address
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(Florida street address)
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, Florida
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(City)
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(Zip Code)
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Signature of New Registered Agent, if changing
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Title
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Name
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Address
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Type of Action
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oAdd
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oRemove
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oAdd
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oRemove
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oAdd
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oRemove
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by
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.”
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(voting group)
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Dated: December 28, 2010
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Signature:
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/s/ Ronald M. Faris
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(By a director, president or other officer – if directors or officers have not been selected, by an incorporator – if in the hands of a receiver, trustee, or other court appointed fiduciary by that fiduciary)
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Ronald M. Faris
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(Typed or printed name of person signing)
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President and Chief Operating Officer
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(Title of person signing)
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/
s
/
Kristen Wagner
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(Signature of a director, president or other officer – if directors or officers have not been selected, by an incorporator - if in the hands of the receiver, trustee, or other court appointed fiduciary, by that fiduciary.)
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Kristen Wagner
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(Typed or printed name of person signing)
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Assistant Secretary
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(Title of person signing)
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OCWEN FINANCIAL CORPORATION
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||||
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By:
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/s/ John V. Britti
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Name:
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John V. Britti
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Title:
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Chief Financial Officer
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(1)
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I have reviewed this quarterly report on Form 10-Q of Ocwen Financial Corporation;
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(2)
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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;
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(3)
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Based on my knowledge, the financial statements, and the 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;
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(4)
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The registrant’s other certifying officer(s) 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:
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a.
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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;
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b.
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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;
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c.
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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
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d.
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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
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(5)
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The registrant’s other certifying officer(s) 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 the registrant’s board of directors (or persons performing the equivalent functions):
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a.
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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
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b.
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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.
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Date: August 3, 2017
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/s/ Ronald M. Faris
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Ronald M. Faris, President
and Chief Executive Officer
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(1)
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I have reviewed this quarterly report on Form 10-Q of Ocwen Financial Corporation;
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(2)
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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;
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(3)
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Based on my knowledge, the financial statements, and the 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;
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(4)
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The registrant’s other certifying officer(s) 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:
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a.
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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;
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b.
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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;
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c.
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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
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d.
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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
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(5)
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The registrant’s other certifying officer(s) 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 the registrant’s board of directors (or persons performing the equivalent functions):
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a.
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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
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b.
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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.
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Date: August 3, 2017
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/s/ Michael R. Bourque, Jr.
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Michael R. Bourque, Jr., Executive Vice President
and Chief Financial Officer
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(1)
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I am the Chief Executive Officer of Ocwen Financial Corporation (the “Registrant”).
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(2)
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I hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that
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•
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the Quarterly Report on Form 10-Q of the Registrant for the quarter ended
June 30, 2017
(the “periodic report”) containing financial statements fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
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•
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the information contained in the periodic report fairly represents, in all material respects, the financial condition and results of operations of the Registrant for the periods presented.
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Name:
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/s/ Ronald M. Faris
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Title:
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President and Chief Executive Officer
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Date:
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August 3, 2017
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(1)
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I am the Chief Financial Officer of Ocwen Financial Corporation (the “Registrant”).
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(2)
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I hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that
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•
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the Quarterly Report on Form 10-Q of the Registrant for the quarter ended
June 30, 2017
(the “periodic report”) containing financial statements fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
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•
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the information contained in the periodic report fairly represents, in all material respects, the financial condition and results of operations of the Registrant for the periods presented.
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Name:
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/s/ Michael R. Bourque, Jr.
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Title:
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Executive Vice President and Chief Financial Officer
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Date:
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August 3, 2017
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