XML 33 R22.htm IDEA: XBRL DOCUMENT

NOTE 15 LINES OF CREDIT AND OTHER SECURED BORROWINGS

12 Months Ended

Dec. 31, 2011

NOTE 15 LINES OF CREDIT AND OTHER SECURED BORROWINGS

Lines of credit and other secured borrowings are comprised of the following:

				Unused		Balance Outstanding
Borrowings	Collateral	Interest Rate	Maturity	Borrowing Capacity		December 31, 2011			December 31, 2010
Servicing:
Senior secured term loan (1)	(1)	1-Month LIBOR + 700 bps with a LIBOR floor of 2%	June 2015	$	—	$	—		$	197,500
Senior secured term loan (2)	(2)	1-Month LIBOR + 550 bps with a LIBOR floor of 1.50%(2)	Sept. 2016		—		546,250			—
Fee reimbursement advance (3)	Term note	Zero coupon	March 2014		—		—			48,000
Term note (4)	Advances	1-Month LIBOR + 350 basis points	March 2014		—		—			5,600
					—		546,250			251,100
Corporate Items and Other
Securities sold under an agreement to repurchase (5)	Ocwen Real Estate Asset Liquidating Trust 2007-1 Notes	(5)	(5)		—		4,610			7,774
							550,860			258,874
Discount (1)(2)(3)					—		(10,491	)		(12,801	)
				$	—	$	540,369		$	246,073

Weighted average interest rate							6.96	%		8.90	%

(1)	On June 9, 2011, we terminated this facility and repaid the outstanding balance. We amortized the remaining balance of the original issue discount and the remaining unamortized prepaid debt issuance costs through this date.

(2)	On September 1, 2011, we entered into a new senior secured term loan facility agreement and borrowed $575,000 that was primarily used to fund a portion of the Litton Acquisition. The loan was issued with an original issue discount of $11,500 that we are amortizing over the term of the loan. Borrowings bear interest, at the election of Ocwen, at a rate per annum equal to either (a) the base rate [the greatest of (i) the prime rate of Barclays Bank PLC in effect on such day, (ii) the federal funds effective rate in effect on such day plus 0.50% and (iii) the one-month Eurodollar rate (1-Month LIBOR)], plus a margin of 4.50% and a base rate floor of 2.50% or (b) 1-Month LIBOR, plus a margin of 5.50% with a 1-Month LIBOR floor of 1.50%. We are required to repay the principal amount of the loan in consecutive quarterly installments of $14,375 per quarter commencing September 30, 2011 through June 30, 2016, with the balance becoming due on September 1, 2016. The loan is secured by a first priority security interest in substantially all of the tangible and intangible assets of Ocwen.

(3)	During September 2011, we repaid this facility in full and recognized a gain of $2,405 on the extinguishment of debt, including the write off of the unamortized balances of the discount and related deferred income. We were amortizing the discount to interest expense over the five-year term of the advance. Under the agreement that governed this advance, a portion of the annual payment was forgiven if the annual net written premium by the lender for insurance on serviced loans and real estate exceeded $100,000. In the first quarter of 2011, the lender forgave $1,246 of the outstanding debt balance based on the net written premium for the contract year ended March 31, 2011, which we also recognized as a gain on extinguishment debt. These gains are reported in Other income (expense).

(4)	This note that was issued by OSAF was secured by advances on loans serviced for others, similar to match funded advances and liabilities. The lender pledged its interest in this note as collateral against a $7,000 term note receivable from the lender that we held. Both this note and the term note receivable were fully repaid in September 2011 as disclosed in Note 12.

(5)	In August 2010, we obtained financing under a repurchase agreement for the Class A-2 and A-3 notes issued by Ocwen Real Estate Asset Liquidating Trust 2007-1 which have a current face value of $29,351. This agreement has no stated credit limit and lending is determined for each transaction based on the acceptability of the securities presented as collateral. Borrowings mature and are renewed monthly. The borrowings secured by the Class A-2 notes bear interest at 1-Month LIBOR + 200 basis points and borrowings secured by the Class A-3 notes bear interest at 1-Month LIBOR + 300 basis points.