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Borrowings | 3 Months Ended
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Mar. 31, 2015
Debt Disclosure [Abstract] |
Borrowings | Note 11 – Borrowings Match Funded Liabilities Match funded liabilities are comprised of the following at the dates indicated:
Borrowing Type |  | Interest Rate |  | Maturity (1) |  | Amortization Date (1) |  | Available Borrowing Capacity (2) |  | March 31, 2015 |  | December 31, 2014
Advance Receivable Backed Notes Series 2012-ADV1 (3) |  | 1ML (3) + 175 bps |  | Jun. 2017 |  | Jun. 2015 |  | $ | 51,658 |  |  | $ | 348,342 |  |  | $ | 373,080 |
Advance Receivable Backed Note (4) |  | 1ML + 300 bps |  | Dec. 2015 |  | Dec. 2014 |  | — |  |  | — |  |  | 494 |
Advance Receivables Backed Notes, Series 2013-VF2, Class A |  | 1ML + 167 bps (5) |  | Oct. 2045 |  | Oct. 2015 |  | 68,214 |  |  | 495,786 |  |  | 519,634 |
Advance Receivables Backed Notes, Series 2013-VF2, Class B |  | 1ML + 300 bps (6) |  | Oct. 2045 |  | Oct. 2015 |  | 4,584 |  |  | 31,416 |  |  | 32,919 |
Advance Receivables Backed Notes - Series 2014-VF3, Class A |  | 1ML + 175 bps (7) |  | Oct. 2045 |  | Oct. 2015 |  | 72,799 |  |  | 527,201 |  |  | 552,553 |
Advance Receivables Backed Notes - Series 2014-VF4 |  | 1ML + 175 bps (8) |  | Oct. 2045 |  | Oct. 2015 |  | 72,799 |  |  | 527,201 |  |  | 552,553 |
Advance Receivables Backed Notes, Series 2014-VF1, Class A (9) |  | Cost of Funds + 275 bps |  | Dec. 2045 |  | Dec. 2015 |  | 54,270 |  |  | 25,673 |  |  | 21,192 |
Advance Receivables Backed Notes, Series 2014-VF1, Class B (9) |  | Cost of Funds + 325 bps |  | Dec. 2045 |  | Dec. 2015 |  | — |  |  | 16,289 |  |  | 13,598 |
Advance Receivables Backed Notes, Series 2014-VF1, Class C (9) |  | Cost of Funds + 375 bps |  | Dec. 2045 |  | Dec. 2015 |  | — |  |  | 12,220 |  |  | 10,224 |
Advance Receivables Backed Notes, Series 2014-VF1, Class D (9) |  | Cost of Funds + 470 bps |  | Dec. 2045 |  | Dec. 2015 |  | — |  |  | 16,548 |  |  | 14,000 |
|  |  |  |  |  |  |  | $ | 324,324 |  |  | $ | 2,000,676 |  |  | $ | 2,090,247 |
Weighted average interest rate |  |  |  |  |  |  |  |  |  | 1.99 | % |  | 1.97 | %
(1) | The amortization date of our advance financing facilities is the date on which the revolving period ends under each advance financing 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 two 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 March 31, 2015, none of the available borrowing capacity could be used based on the amount of eligible collateral that had been pledged
(3) | 1-Month LIBOR (1ML) was 0.18% and 0.17% at March 31, 2015 and December 31, 2014, respectively.
(4) | We voluntarily terminated this facility on January 15, 2015.
(5) | The interest margin on this note is scheduled to increase to 191 bps on July 15, 2015, to 215 bps on August 15, 2015 and to 239 bps on September 15, 2015.
(6) | The interest margin on this note is scheduled to increase to 343 bps on July 15, 2015, to 386 bps on August 15, 2015 and to 429 bps on September 15, 2015.
(7) | The interest margin on this note is scheduled to increase to 200 bps on July 15, 2015, to 225 bps on August 15, 2015 and to 250 bps on September 15, 2015.
(8) | The interest margin on this note is scheduled to increase to 200 bps on July 15, 2015, to 212 bps on August 15, 2015 and to 250 bps on September 15, 2015.
(9) | Beginning April 23, 2015, the maximum borrowing under this facility will decrease by $6.3 million per month until it is reduced to $75.0 million.
Financing Liabilities Financing liabilities are comprised of the following at the dates indicated:
Borrowings |  | Collateral |  | Interest Rate |  | Maturity |  | March 31, 2015 |  | December 31, 2014
Servicing: |  |  |  |  |  |  |  |  |  |
Financing liability – MSRs pledged |  | MSRs |  | (1) |  | (1) |  | $ | 594,495 |  |  | $ | 614,441 |
Secured Notes, Ocwen Asset Servicing Income Series, Series 2014-1 (2) |  | MSRs |  | (2) |  | Feb. 2028 |  | 107,408 |  |  | 111,459 |
Financing Liability – Advances Pledged (3) |  | Advances on loans |  | (3) |  | (3) |  | 84,307 |  |  | 88,489 |
|  |  |  |  |  |  |  | 786,210 |  |  | 814,389 |
Lending: |  |  |  |  |  |  |  |  |  |
HMBS-related borrowings (4) |  | Loans held for investment (LHFI) |  | 1ML + 245 bps |  | (4) |  | 1,702,397 |  |  | 1,444,252 |
|  |  |  |  |  |  |  | $ | 2,488,607 |  |  | $ | 2,258,641 |
(1) | This financing liability arose in connection with the HLSS Transaction financing liabilities and has no contractual maturity. 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.
(2) | 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. The notes have a final stated maturity of February 2028. 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.
(3) | Certain sales of advances in 2014 did not qualify for sales accounting treatment and were accounted for as a financing.
(4) | 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.
Other Secured Borrowings Other secured borrowings are comprised of the following at the dates indicated:
Borrowings |  | Collateral |  | Interest Rate |  | Maturity |  | Available Borrowing Capacity |  | March 31, 2015 |  | December 31, 2014
Servicing: |  |  |  |  |  |  |  |  |  |  |  |
SSTL (1) |  | (1) |  | 1-Month Euro-dollar rate + 375 bps with a Eurodollar floor of 125 bps (1) |  | Feb. 2018 |  | $ | — |  |  | $ | 1,200,174 |  |  | $ | 1,277,250 |
Repurchase agreement (2) |  | Loans held for sale (LHFS) |  | 1ML + 200 - 345 bps |  | Jun. 2015 |  | 15,747 |  |  | 34,253 |  |  | 32,018 |
|  |  |  |  |  |  |  | 15,747 |  |  | 1,234,427 |  |  | 1,309,268 |
Borrowings |  | Collateral |  | Interest Rate |  | Maturity |  | Available Borrowing Capacity |  | March 31, 2015 |  | December 31, 2014
Lending: |  |  |  |  |  |  |  |  |  |  |  |
Master repurchase agreement (3) |  | LHFS |  | 1ML + 175 bps |  | Jun. 2015 |  | — |  |  | 192,222 |  |  | 208,010 |
Participation agreement (4) |  | LHFS |  | N/A |  | Apr. 2016 |  | — |  |  | 13,548 |  |  | 41,646 |
Participation agreement (5) |  | LHFS |  | N/A |  | Apr. 2016 |  | — |  |  | 38,717 |  |  | 196 |
Master repurchase agreement (6) |  | LHFS |  | 1ML + 175 - 275 bps |  | Jul. 2015 |  | 19,508 |  |  | 55,492 |  |  | 102,073 |
Master repurchase agreement (7) |  | LHFI |  | 1ML + 275bps |  | Jul. 2015 |  | — |  |  | 39,463 |  |  | 52,678 |
Mortgage warehouse agreement (8) |  | LHFI |  | 1ML + 275 bps; floor of 350 bps |  | May 2015 |  | — |  |  | 33,513 |  |  | 23,851 |
|  |  |  |  |  |  |  | 19,508 |  |  | 372,955 |  |  | 428,454 |
|  |  |  |  |  |  |  | 35,255 |  |  | 1,607,382 |  |  | 1,737,722 |
Discount (1) |  |  |  |  |  |  |  | — |  |  | (3,675 | ) |  | (4,031 | )
|  |  |  |  |  |  |  | $ | 35,255 |  |  | $ | 1,603,707 |  |  | $ | 1,733,691 |
Weighted average interest rate |  |  |  |  |  |  |  |  |  | 4.37 | % |  | 4.33 | %
(1) | On March 2, 2015, we entered into an amendment to the SSTL facility agreement. Among other things, the amendment:
• | eliminates the dollar cap on the general asset sale basket and requires Ocwen to use 75% of the net cash proceeds from permitted asset sales under such general asset basket to prepay the loans under the SSTL and, subject to certain conditions, permits Ocwen to use up to 25% of such net cash proceeds to reinvest in assets used in the business of OLS and its subsidiaries within 120 days of receipt thereof (subject to an extension of up to 90 days if a binding agreement is entered into within such 120 days); and
• | increases the quarterly covenant levels of the corporate leverage ratio to 3.5-to-1 for the fiscal quarter ended March 31, 2015 and thereafter.
(2) | Under this repurchase agreement, the lender provides financing on a committed basis for $50.0 million and, at the discretion of the lender, on an uncommitted basis for an additional $50.0 million.
(3) | Under this repurchase agreement, the lender provides financing on a committed basis for $150.0 million and, at the discretion of the lender, on an uncommitted basis for an additional $150.0 million.
(4) | Under this participation agreement, the lender provides financing on an uncommitted basis for $50.0 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. On April 16, 2015, the maximum borrowing capacity was increased to $100.0 million.
(5) | Under this participation agreement, the lender provides financing on an uncommitted basis for $150.0 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.
(6) | Under this repurchase agreement, the lender provides financing on a committed basis for $75.0 million and, at the discretion of the lender, on an uncommitted basis for an additional $75.0 million. On April 16, 2015, this facility was terminated.
(7) | On April 16, 2015, the maximum borrowing capacity under this agreement was reduced to $37.5 million all of which is on a committed basis.
(8) | Borrowing capacity of $60.0 million under this facility is available on an uncommitted basis at the discretion of the lender.
Senior Unsecured Notes On May 12, 2014, Ocwen completed the issuance and sale of $350.0 million of its 6.625% Senior Notes due 2019 (the Senior Unsecured Notes) in a private offering. The Senior Unsecured Notes are general senior unsecured obligations of Ocwen and will mature on May 15, 2019. Interest is payable semi-annually on May 15th and November 15th. The Senior Unsecured Notes are not guaranteed by any of Ocwen’s subsidiaries. Ocwen entered into a Registration Rights Agreement under which it agreed for the benefit of the initial purchasers of the Senior Unsecured Notes to use commercially reasonable efforts to file a registration statement and to have the registration statement become effective on or prior to 270 days after the closing of the offering. Because the exchange offer was not completed on or before 270 days after the closing of the offering, additional interest accrues on the principal amount of the notes at a rate of 0.25% per annum (which rate will be increased by an additional 0.25% per annum for each subsequent 90-day period that such additional interest continues to accrue to a maximum of 1.0% per annum) until the exchange offer is completed or the shelf registration statement, if required, is declared effective. In connection with our issuance of the Senior Unsecured Notes, we incurred certain costs that we capitalized and are amortizing over the period from the date of issuance to May 15, 2019. The unamortized balance of these issuance costs was $5.5 million at March 31, 2015. Covenants Under the terms of our debt agreements, we are subject to various qualitative and quantitative covenants. Collectively, these covenants include:
• | 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, repurchasing or redeeming capital stock, transferring assets or making loans, investments or acquisitions;
• | 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.
Financial covenants in our debt agreements require that we maintain, among other things:
• | a specified interest coverage ratio, which is defined under our SSTL as the ratio of trailing four quarter adjusted EBITDA to trailing four quarter interest expense (each as defined therein);
• | a specified corporate leverage ratio, which is defined under our SSTL as consolidated debt to trailing four quarter adjusted EBITDA (each as defined therein);
• | a specified consolidated total debt to consolidated tangible net worth ratio;
• | a specified loan to value ratio, as defined under our SSTL; and
• | specified levels of consolidated tangible net worth, liquidity and at the OLS level, net operating income.
As of March 31, 2015, the most restrictive consolidated tangible net worth requirement was $630.0 million plus 65% of quarterly net income, without adjustment for quarterly net losses, beginning with the three months ended December 31, 2012. The required consolidated tangible net worth in connection with this agreement was $979.4 million at March 31, 2015. As a result of the covenants to which we are subject, we may be limited in the manner in which we conduct our business and may be limited in our ability to engage in favorable business activities or raise additional capital to finance future operations or satisfy future liquidity needs. In addition, breaches or events that may result in a default under our debt agreements include, among other things, noncompliance with our covenants, nonpayment of principal or interest, material misrepresentations, the occurrence of a material adverse change, insolvency, bankruptcy, certain material judgments and changes of control. Covenants and defaults of this type are commonly found in debt agreements such as ours. Certain of these covenants and defaults are open to subjective interpretation and, if our interpretation were contested by a lender, a court may ultimately be required to determine compliance or lack thereof. In addition, our debt agreements generally include cross default provisions such that a default under one agreement could trigger defaults under other agreements. If we fail to comply with our debt agreements and are unable to avoid, remedy or secure a waiver of any resulting default, we may be subject to adverse action by our lenders, including termination of further funding, acceleration of outstanding obligations, enforcement of liens against the assets securing or otherwise supporting our obligations and other legal remedies. Our lenders can waive their contractual rights in the event of a default. Under one of its advance financing agreements, OLS must maintain certain minimum servicer ratings assigned by Moody’s, S&P and Fitch Ratings. If any of these rating agencies withdraws its rating or if the assigned ratings fall below the minimum ratings established in the lending agreement, an early amortization event occurs under the lending agreement if the lender’s agent notifies the indenture trustee that an early amortization event shall occur. As a result of downgrades in our servicer ratings, the lender has the right to deliver such notice at any time. The lender has agreed not to deliver such a notice to the indenture trustee subject to ongoing monthly review. If an early amortization event occurs and is not waived by the lender, no new advances can be funded under the facility, all collections on advances funded through the facility must be used to pay interest and principal on currently outstanding borrowings under the facility, and additionally, the interest rate margin on 1-month LIBOR would increase. At March 31, 2015, we had $348.3 million of borrowings outstanding under this facility out of a maximum borrowing capacity of $400.0 million. The scheduled date to begin amortization of this facility is June 2015. As described in Note 1A — Business Environment and Other Uncertainties, we have entered into a commitment letter providing for replacement financing should the existing lender under this facility seek not to renew or extend the revolving period upon its completion in June 2015. Our lender’s obligation to fund under this commitment letter is subject to conditions precedent, some of which are outside our control. We believe that we are in compliance with all of the qualitative and quantitative covenants in our debt agreements as of the date of these financial statements.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 19, 20, 22 -Article 5 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 + Details
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