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Note 22 INCOME TAXES | 12 Months Ended
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Dec. 31, 2012
Income Tax Disclosure [Text Block] |
NOTE 22 | INCOME TAXES
For income tax purposes, the components of income from continuing operations before taxes were as follows for the years ended December 31:
|  | 2012 |  |  | 2011 |  |  | 2010 |
Domestic |  | $ | 176,075 |  |  | $ | 118,708 |  |  | $ | 33,394 |
Foreign |  |  | 81,433 |  |  |  | 4,287 |  |  |  | 5,760 |
|  | $ | 257,508 |  |  | $ | 122,995 |  |  | $ | 39,154 |
The components of income tax expense (benefit) on continuing operations were as follows for the years ended December 31:
|  | 2012 |  |  | 2011 |  |  | 2010 |
Current: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 10,621 |  |  | $ | 13,894 |  |  | $ | 8,836 |
State |  |  | (759 | ) |  |  | (195 | ) |  |  | 1,049 |
Foreign |  |  | 2,968 |  |  |  | 1,079 |  |  |  | 2,033 |
|  |  | 12,830 |  |  |  | 14,778 |  |  |  | 11,918 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | 62,704 |  |  |  | 29,440 |  |  |  | (6,953 | )
State |  |  | (431 | ) |  |  | 368 |  |  |  | (145 | )
Foreign |  |  | 1,482 |  |  |  | 86 |  |  |  | 725 |
Provision for valuation allowance on deferred tax assets |  |  | — |  |  |  | — |  |  |  | — |
|  |  | 63,755 |  |  |  | 29,894 |  |  |  | (6,373 | )
Total |  | $ | 76,585 |  |  | $ | 44,672 |  |  | $ | 5,545 |
Income tax expense differs from the amounts computed by applying the U.S. Federal corporate income tax rate of 35% as follows for the years ended December 31:
|  | 2012 |  |  | 2011 |  |  | 2010 |
Expected income tax expense at statutory rate |  | $ | 90,127 |  |  | $ | 43,049 |  |  | $ | 13,704 |
Differences between expected and actual income tax expense: |  |  |  |  |  |  |  |  |  |  |  |
State tax, after Federal tax benefit |  |  | (1,184 | ) |  |  | 254 |  |  |  | 610 |
Tax effect of Altisource Separation |  |  | — |  |  |  | — |  |  |  | 749 |
Provision for (reversal of) liability for selected tax items |  |  | 5,558 |  |  |  | 1,611 |  |  |  | (9,126 | )
Permanent differences |  |  | 15 |  |  |  | 61 |  |  |  | 878 |
Foreign tax differential |  |  | (17,816 | ) |  |  | (716 | ) |  |  | (197 | )
Provision-to-return and other |  |  | — |  |  |  | — |  |  |  | (580 | )
Other |  |  | (115 | ) |  |  | 413 |  |  |  | (493 | )
Actual income tax expense |  | $ | 76,585 |  |  | $ | 44,672 |  |  | $ | 5,545 |
Net deferred tax assets were comprised of the following at December 31:
|  | 2012 |  |  | 2011 |
Deferred tax assets: |  |  |  |  |  |  |  |
Mortgage servicing rights amortization |  | $ | — |  |  | $ | 32,654 |
Net operating loss carryforward |  |  | 16,068 |  |  |  | 18,078 |
Net unrealized gains and losses on securities |  |  | 2,702 |  |  |  | 11,828 |
Partnership losses |  |  | 11,036 |  |  |  | 9,960 |
Bad debt and allowance for loan losses |  |  | 6,551 |  |  |  | 8,020 |
Accrued other liabilities |  |  | 2,925 |  |  |  | 5,122 |
Interest rate swaps |  |  | 3,813 |  |  |  | 4,371 |
Tax residuals and deferred income on tax residuals |  |  | 4,175 |  |  |  | 3,941 |
Stock-based compensation expense |  |  | 3,127 |  |  |  | 2,874 |
Accrued incentive compensation |  |  | 6,210 |  |  |  | 2,755 |
Foreign deferred assets |  |  | 1,805 |  |  |  | 2,512 |
Accrued lease termination costs |  |  | 1,887 |  |  |  | 1,910 |
Intangible asset amortization |  |  | 2,070 |  |  |  | 1,641 |
Valuation allowance on real estate |  |  | 386 |  |  |  | 884 |
Deferred income or loss on servicing advance receivables |  |  | 78,832 |  |  |  | — |
Capital losses |  |  | 665 |  |  |  | — |
Other |  |  | 7,339 |  |  |  | 8,608 |
|  |  | 149,591 |  |  |  | 115,158 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Mortgage servicing rights amortization |  |  | 56,265 |  |  |  | — |
Deferred income or loss on servicing advance receivables |  |  | — |  |  |  | 7,030 |
Other |  |  | 1,190 |  |  |  | 160 |
|  |  | 57,455 |  |  |  | 7,190 |
Net deferred tax assets |  | $ | 92,136 |  |  | $ | 107,968 |
We conduct periodic evaluations of positive and negative evidence to determine whether it is more likely than not that the deferred tax asset can be realized in future periods. Among the factors considered in this evaluation are estimates of future taxable income, future reversals of temporary differences, tax character and the impact of tax planning strategies that may be implemented, if warranted. As a result of this evaluation, we concluded that no valuation allowance was necessary at December 31, 2012 and 2011. We recognized total interest and penalties of $(75), $1,257 and $182 in 2012, 2011 and 2010, respectively. At December 31, 2012 and 2011, accruals for interest and penalties were $1,561 and $1,636, respectively. As of December 31, 2012 and 2011, we had a total liability for selected tax items of $21,140 and $4,524, respectively, all of which if recognized would affect the effective tax rate. Our major jurisdiction tax years that remain subject to examination are our U.S. federal tax return for the years ended December 31, 2008 through the present and our India corporate tax returns for the years ended March 31, 2004 through the present. Our U.S. federal tax return for the years ended December 31, 2008 and 2009 are currently under examination. A reconciliation of the beginning and ending amount of the liability for selected tax items is as follows for the years ended December 31:
|  | 2012 |  |  | 2011 |
Balance at January 1 |  | $ | 4,524 |  |  | $ | 2,913 |
Additions based on tax positions related to current year |  |  | 17,396 |  |  |  | — |
Additions for tax positions of prior years |  |  | 875 |  |  |  | 1,817 |
Reductions for tax positions of prior years |  |  | — |  |  |  | (206 | )
Lapses in statutes of limitation |  |  | (93 | ) |  |  | — |
Balance at December 31 |  | $ | 22,702 |  |  | $ | 4,524 |
At December 31, 2012, we had a net operating loss carryforward tax benefit of $45,909 that related to realized built-in losses from the acquisition of Ocwen Asset Investment Corporation in 1999. Utilization of these carryforwards is subject to an annual IRC section 382 limitation of $5,742. These carryforwards will expire beginning 2019 through 2024. We have a $1,725 capital loss carry forward. We have no remaining capital loss carryforwards or tax credit carryforwards related to low-income housing tax credits.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 136, 172 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 43, 44, 45, 46, 47, 48, 49 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 + Details
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