Note 18 – Related Party Transactions

Ocwen’s Executive Chairman of the Board of Directors, William C. Erbey, also serves as Chairman of the Board of Altisource, HLSS, Altisource Residential Corporation (Residential) and Altisource Asset Management Corporation (AAMC). As a result, he has obligations to Ocwen as well as to Altisource, HLSS, Residential and AAMC. As of June 30, 2014, Mr. Erbey owned or controlled approximately 13% of the common stock of Ocwen, approximately 27% of the common stock of Altisource, approximately 1% of the common stock of HLSS, approximately 27% of the common stock of AAMC and approximately 4% of the common stock of Residential. At June 30, 2014, Mr. Erbey also held 3,620,498 options to purchase Ocwen common stock, of which 2,845,498 were exercisable. On April 22, 2014, Mr. Erbey surrendered 1,000,000 of his options to purchase Ocwen common stock. During the second quarter of 2014, Ocwen recognized the remaining $5.4 million of previously unrecognized compensation expense associated with these options as of the date of surrender. At June 30, 2014, Mr. Erbey held 873,501 options to purchase Altisource common stock and 87,350 options to purchase AAMC common stock, all of which were exercisable.

Our business is currently dependent on many of the services and products provided by Altisource under various long-term contracts, including the Services Agreements, Technology Products Services Agreements, Intellectual Property Agreements and the Data Center and Disaster Recovery Services Agreements. Under the Services Agreements, Altisource provides various business process outsourcing services. Under the Technology Products Services Agreements and the Data Center and Disaster Recovery Services Agreements, Altisource provides technology products and support services. In addition, we have entered into (i) Support Services Agreements pursuant to which we and Altisource provide administrative and corporate services to each other and (ii) a Data Access and Services Agreement pursuant to which we make available to Altisource certain data from our servicing portfolio in exchange for a per asset fee. Our revenues and expenses related to our agreements with Altisource for the three and six months ended June 30, 2014 and 2013 are set forth in the table below.

Services provided by Altisource under the Services Agreement with Ocwen are generally charged to the borrower and/or loan investor. Accordingly, such services, while derived from our loan servicing portfolio, are not reported as expenses by Ocwen. These services include residential property valuation, residential property preservation and inspection services, title services and real estate sales. We believe the rates charged for these services are market rates as they are materially consistent with one or more of the following: the rates Ocwen pays to or observes from other service providers and the fees we believe Altisource charges to other customers for comparable services.

Ocwen and HLSS provide each other certain professional services including valuation analysis of potential MSR acquisitions, treasury management services and other similar services, licensing and regulatory compliance support services, risk management services and other similar services under a Professional Services Agreement.

We have also entered into a long-term servicing and a support services agreement with Residential and AAMC, respectively.

The following table summarizes revenues and expenses related to our agreements with Altisource, HLSS, AAMC and Residential (and, as applicable, their subsidiaries) for the three and six months ended June 30 and net amounts receivable or payable at the dates indicated:



	Three Months				Six Months
	2014		2013		2014		2013
Revenues and Expenses:
Altisource:
Revenues	$	10,792	$	5,971	$	19,291	$	10,205
Expenses	22,909		11,806		42,031		23,497
HLSS:
Revenues	$	209	$	40	$	374	$	152
Expenses	783		738		1,245		1,228
AAMC
Revenues	$	316	$	—	$	701	$	—
Residential
Revenues	$	5,342	$	72	$	7,490	$	113



	June 30, 2014			December 31, 2013
Net Receivable (Payable)
Altisource	$	(4,180	)	$	(3,843	)
HLSS	(21,010		)	(59,505		)
AAMC	708			943
Residential	35			50
	$	(24,447	)	$	(62,355	)

As disclosed in Note 4 – Fair Value, Ocwen has sold to HLSS certain Rights to MSRs and related servicing advances. During the six months ended June 30, 2013, we completed HLSS Transactions relating to Rights to MSRs for $26.5 billion of UPB and received $148.6 million from the sale of Rights to MSRs and $1.1 billion from the sale of the related advances. We did not complete any sales of Rights to MSRs to HLSS during the six months ended June 30, 2014. After legal ownership of the MSRs has been transferred to HLSS, OLS will subservice the MSRs pursuant to a subservicing agreement, as amended, with HLSS.

On March 3, 2014, in the first Ginnie Mae EBO Transaction, Ocwen sold Ginnie Mae EBO Loans and transferred the related servicing advances to HLSS Mortgage for $612.3 million. On May 2, 2014, in connection with the second Ginnie Mae EBO Transaction, we transferred $20.2 million of advances to HLSS SEZ LP. The transfer of advances in both transactions did not qualify as sales for accounting purposes. See Note 5 – Loans Held for Sale for additional information.

On June 26, 2014, we entered into a servicing agreement with HLSS Mortgage LP under which we will initially service approximately $396.9 million UPB of mortgage loans.