Note 1A — Restatement of Previously Issued Consolidated Financial Statements

Subsequent to the issuance of the Original Form 10-Q, we determined there was an error in the application of the interest method used to calculate the appropriate allocation between principal and interest in connection with the accounting for a financing liability related to the Rights to MSRs sold to HLSS. The error relates to the subsequent accounting for the financing liability and does not impact the initial accounting for the sale of Rights to MSRs to HLSS. As a result, the financial amounts noted below have been restated from amounts previously reported.

The following tables summarize the effect of these restatements at and for the periods indicated:



	Consolidated Balance Sheet as of March 30, 2014
	As Reported		Restatement		As Restated
Deferred tax assets, net	$	118,156	$	924	$	119,080
Total assets	8,185,427		924		8,186,351
Financing liabilities	1,693,147		—		1,693,147
Total liabilities	6,249,423		—		6,249,423
Retained earnings	1,061,543		924		1,062,467
Total stockholders’ equity	1,872,717		924		1,873,641



	Consolidated Balance Sheet as of December 31, 2013
	As Reported		Restatement			As Restated
Deferred tax assets, net	$	116,558	$	(987	)	$	115,571
Financing liabilities	1,284,229		(17,256		)	1,266,973
Total liabilities	6,071,307		(17,256		)	6,054,051
Retained earnings	986,694		16,269			1,002,963
Total stockholders’ equity	1,796,322		16,269			1,812,591



	Consolidated Statement of Operations for the Three Months Ended March 31, 2014
	As Reported			Restatement			As Restated
Interest expense	$	(122,616	)	$	(17,257	)	$	(139,873	)
Total other expense, net	(113,107		)	(17,257		)	(130,364		)
Income before income taxes	88,960			(17,257		)	71,703
Income tax expense	13,129			(1,912		)	11,217
Net income	75,831			(15,345		)	60,486
Net income attributable to Ocwen stockholders	75,846			(15,345		)	60,501
Net income attributable to Ocwen common stockholders	74,849			(15,345		)	59,504
Earnings per share attributable to Ocwen common stockholders
Basic	$	0.55		$	(0.11	)	$	0.44
Diluted	$	0.54		$	(0.11	)	$	0.43



	Consolidated Statement of Operations for the Three Months Ended March 31, 2013
	As Reported			Restatement		As Restated
Interest expense	$	(93,416	)	$	3,957	$	(89,459	)
Total other expense, net	(111,798		)	3,957		(107,841		)
Income before income taxes	51,335			3,957		55,292
Income tax expense	6,188			195		6,383
Net income	45,147			3,762		48,909
Net income attributable to Ocwen stockholders	45,147			3,762		48,909
Net income attributable to Ocwen common stockholders	42,576			3,762		46,338
Earnings per share attributable to Ocwen common stockholders
Basic	$	0.31		$	0.03	$	0.34
Diluted	$	0.31		$	0.02	$	0.33



	Consolidated Statement of Comprehensive Income for the Three Months Ended March 31, 2014
	As Reported		Restatement			As Restated
Net Income	$	75,831	$	(15,345	)	$	60,486
Comprehensive income attributable to Ocwen stockholders	76,440		(15,345		)	61,095



	Consolidated Statement of Comprehensive Income for the Three Months Ended March 31, 2013
	As Reported		Restatement		As Restated
Net Income	$	45,147	$	3,762	$	48,909
Comprehensive income attributable to Ocwen stockholders	41,468		3,762		45,230



	Consolidated Statement of Changes in Equity for the Three Months Ended March 31, 2014
	As Reported		Restatement			As Restated
Net Income	$	75,831	$	(15,345	)	$	60,486



	Consolidated Statement of Changes in Equity for the Three Months Ended March 31, 2013
	As Reported		Restatement		As Restated
Net Income	$	45,147	$	3,762	$	48,909



	Consolidated Statement of Cash Flows for the Three Months Ended March 31, 2014
	As Reported			Restatement			As Restated
Net income	$	75,846		$	(15,345	)	$	60,501
Adjustments to reconcile net income to net cash provided by operating activities:
Other, net	21,000			(1,911		)	19,089
Net cash provided by operating activities	213,038			(17,256		)	195,782
Repayments of other borrowings	(1,670,159		)	17,256			(1,652,903		)
Net cash provided by financing activities	229,056			17,256			246,312



	Consolidated Statement of Cash Flows for the Three Months Ended March 31, 2013
	As Reported			Restatement			As Restated
Net income	$	45,147		$	3,762		$	48,909
Adjustments to reconcile net income to net cash provided by operating activities:
Other, net	9,614			195			9,809
Net cash provided by operating activities	401,941			3,957			405,898
Repayments of other borrowings	(2,985,417		)	(3,957		)	(2,989,374		)
Net cash provided by financing activities	1,320,387			(3,957		)	1,316,430