XML 48 R31.htm IDEA: XBRL DOCUMENT v3.6.0.2
Business Segment Reporting
 12 Months Ended
Dec. 31, 2016
Segment Reporting [Abstract]  
Business Segment Reporting
Note 22 — Business Segment Reporting
Our business segments reflect the internal reporting that we use to evaluate operating performance of services and to assess the allocation of our resources. A brief description of our current business segments is as follows:
Servicing. This segment is primarily comprised of our core residential servicing business. We provide residential and commercial mortgage loan servicing, special servicing and asset management services. We earn fees for providing these services to owners of the mortgage loans and foreclosed real estate. In most cases, we provide these services either because we purchased the MSRs from the owner of the mortgage, retained the MSRs on the sale of residential mortgage loans or because we entered into a subservicing or special servicing agreement with the entity that owns the MSR. Our residential servicing portfolio includes conventional, government-insured and non-Agency loans. Non-Agency loans include subprime loans, which represent residential loans that generally did not qualify under GSE guidelines or have subsequently become delinquent.
Lending. The Lending segment is focused on originating and purchasing conventional and government-insured residential forward and reverse mortgage loans mainly through our correspondent lending arrangements, broker relationships and directly with mortgage customers. The loans are typically sold shortly after origination into a liquid market on a servicing retained basis.
Corporate Items and Other. Corporate Items and Other includes revenues and expenses of ACS and our other business activities that are individually insignificant, revenues and expenses that are not directly related to other reportable segments, interest income on short-term investments of cash, interest expense on corporate debt and certain corporate expenses. Our cash balances are included in Corporate Items and Other. ACS provides short-term inventory-secured loans to independent used car dealers to finance their inventory. In addition, Ocwen formed CR Limited (CRL), our wholly-owned captive reinsurance subsidiary, and entered into a quota share re-insurance agreement effective in 2016 with a third-party insurer related to coverage on foreclosed real estate properties owned or serviced by us.
We allocate portions of interest income and interest expense to each business segment, including interest earned on cash balances and short-term investments and interest incurred on corporate debt. We also allocate expenses incurred by corporate support services to each business segment.
Financial information for our segments is as follows:
 
Servicing
 
Lending
 
Corporate Items and Other
 
Corporate Eliminations
 
Business Segments Consolidated
Results of Operations
 
 
 
 
 
 
 
 
 
For the year ended December 31, 2016
 
 
 
 
 
 
 
 
 
Revenue (1)
$
1,247,159

 
$
112,363

 
$
27,646

 
$
(5
)
 
$
1,387,163

 
 
 
 
 
 
 
 
 
 
Expenses (1) (2)
920,434

 
104,342

 
198,483

 
(5
)
 
1,223,254

 
 
 
 
 
 
 
 
 
 
Other income (expense):
 
 
 
 
 
 
 
 
 
Interest income
(109
)
 
15,300

 
3,892

 
—

 
19,083

Interest expense
(357,413
)
 
(14,398
)
 
(40,772
)
 
—

 
(412,583
)
Gain on sale of mortgage servicing rights, net
8,492

 
—

 
—

 
—

 
8,492

Other (1)
15,812

 
1,065

 
(2,139
)
 
—

 
14,738

Other income (expense), net
(333,218
)
 
1,967

 
(39,019
)
 
—

 
(370,270
)
 
 
 
 
 
 
 
 
 
 
Income (loss) before income taxes
$
(6,493
)
 
$
9,988

 
$
(209,856
)
 
$
—

 
$
(206,361
)
 
 
 
 
 
 
 
 
 
 
For the year ended December 31, 2015
 
 
 
 
 
 
 
 
 
Revenue (1)
$
1,613,537

 
$
124,724

 
$
2,895

 
$
(58
)
 
$
1,741,098

 
 
 
 
 
 
 
 
 
 
Expenses (1) (2)
1,221,879

 
97,692

 
158,671

 
(58
)
 
1,478,184

 
 
 
 
 
 
 
 
 
 
Other income (expense):
 
 
 
 
 
 
 
 
 
Interest income
1,044

 
14,669

 
2,607

 
—

 
18,320

Interest expense
(446,377
)
 
(9,859
)
 
(26,137
)
 
—

 
(482,373
)
Gain on sale of mortgage servicing rights, net
83,921

 
—

 
—

 
—

 
83,921

Other (1)
(14,370
)
 
2,123

 
(396
)
 
—

 
(12,643
)
Other income (expense), net
(375,782
)
 
6,933

 
(23,926
)
 
—

 
(392,775
)
 
 
 
 
 
 
 
 
 
 
Income (loss) before income taxes
$
15,876

 
$
33,965

 
$
(179,702
)
 
$
—

 
$
(129,861
)
 
 
 
 
 
 
 
 
 
 
 
Servicing
 
Lending
 
Corporate Items and Other
 
Corporate Eliminations
 
Business Segments Consolidated
For the year ended December 31, 2014
 
 
 
 
 
 
 
 
 
Revenue (1)
$
1,985,436

 
$
119,220

 
$
6,825

 
$
(156
)
 
$
2,111,325

 
 
 
 
 
 
 
 
 
 
Expenses (1) (2)
1,643,323

 
156,272

 
235,769

 
(156
)
 
2,035,208

 
 
 
 
 
 
 
 
 
 
Other income (expense):
 
 
 
 
 
 
 
 
 
Interest income
2,981

 
16,459

 
3,551

 
—

 
22,991

Interest expense
(515,141
)
 
(10,725
)
 
(15,891
)
 
—

 
(541,757
)
Other (1)
(4,043
)
 
4,476

 
(943
)
 
—

 
(510
)
Other income (expense), net
(516,203
)
 
10,210

 
(13,283
)
 
—

 
(519,276
)
 
 
 
 
 
 
 
 
 
 
Loss before income taxes
$
(174,090
)
 
$
(26,842
)
 
$
(242,227
)
 
$
—

 
$
(443,159
)
 
Servicing
 
Lending
 
Corporate Items and Other
 
Corporate Eliminations
 
Business Segments Consolidated
Total Assets
 

 
 

 
 

 
 

 
 

December 31, 2016
$
3,312,357

 
$
3,863,848

 
$
479,458

 
$
—

 
$
7,655,663

 
 
 
 
 
 
 
 
 
 
December 31, 2015
$
4,089,064

 
$
2,811,154

 
$
480,090

 
$
—

 
$
7,380,308

 
 
 
 
 
 
 
 
 
 
December 31, 2014
$
5,864,061

 
$
1,963,729

 
$
415,872

 
$
—

 
$
8,243,662

(1)
Inter-segment billings for services rendered to other segments are recorded as revenues, as contra-expense or as other income, depending on the type of service that is rendered.
(2)Depreciation and amortization expense are as follows:
 
Servicing
 
Lending
 
Corporate Items and Other
 
Business Segments Consolidated
For the year ended December 31, 2016:
 

 
 

 
 

 
 

Depreciation expense
$
6,804

 
$
228

 
$
18,306

 
$
25,338

Amortization of mortgage servicing rights
32,669

 
309

 
—

 
32,978

Amortization of debt discount
727

 
—

 
3,450

 
4,177

Amortization of debt issuance costs
13,455

 
—

 
12,207

 
25,662

 
 
 
 
 
 
 
 
For the year ended December 31, 2015:
 

 
 

 
 

 
 

Depreciation expense
$
2,990

 
$
380

 
$
15,789

 
$
19,159

Amortization of mortgage servicing rights
98,849

 
345

 
—

 
99,194

Amortization of debt discount
2,680

 
—

 
—

 
2,680

Amortization of debt issuance costs
21,269

 
—

 
1,395

 
22,664

 
 
 
 
 
 
 
 
For the year ended December 31, 2014:
 

 
 

 
 

 
 

Depreciation expense
$
9,955

 
$
332

 
$
11,623

 
$
21,910

Amortization of mortgage servicing rights
249,471

 
705

 
199

 
250,375

Amortization of debt discount
1,318

 
—

 
—

 
1,318

Amortization of debt issuance costs
4,294

 
—

 
845

 
5,139