XML 56 R40.htm IDEA: XBRL DOCUMENT v3.10.0.1
Borrowings (Tables)
 9 Months Ended
Sep. 30, 2018
Debt Disclosure [Abstract]  
Schedule of Match Funded Liabilities
Match Funded Liabilities
 
 
 
 
 
 
 
September 30, 2018
 
December 31, 2017
Borrowing Type
 
Maturity (1)
 
Amorti- zation Date (1)
 
Available Borrowing Capacity (2)
 
Weighted Average Interest Rate (3)
 
Balance
 
Weighted Average Interest Rate (3)
 
Balance
Advance Financing Facilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Advance Receivables Backed Notes - Series 2014-VF4 (4)
 
Aug. 2048
 
Aug. 2018
 
$
—

 
—
%
 
$
—

 
4.29
%
 
$
67,095

Advance Receivables Backed Notes - Series 2015-VF5 (4)
 
Dec. 2049
 
Dec. 2019
 
46,178

 
3.76

 
178,822

 
4.29

 
67,095

Advance Receivables Backed Notes - Series 2016-T1 (5)
 
Aug. 2048
 
Aug. 2018
 
—

 
—

 
—

 
2.77

 
265,000

Advance Receivables Backed Notes - Series 2016-T2 (5)
 
Aug. 2049
 
Aug. 2019
 
—

 
2.99

 
235,000

 
2.99

 
235,000

Advance Receivables Backed Notes - Series 2017-T1 (5)
 
Sep. 2048
 
Sep. 2018
 
—

 
—

 
—

 
2.64

 
250,000

Advance Receivables Backed Notes, Series 2018-T1 (5)
 
Aug. 2049
 
Aug. 2019
 
—

 
3.50

 
150,000

 
—

 
—

Advance Receivables Backed Notes, Series 2018-T2 (5)
 
Aug. 2050
 
Aug. 2020
 
—

 
3.81

 
150,000

 
—

 
—

Total Ocwen Master Advance Receivables Trust (OMART)
 
 
 
 
 
46,178

 
3.46

 
713,822

 
3.02

 
884,190

Ocwen Servicer Advance Receivables Trust III (OSART III) - Advance Receivables Backed Notes, Series 2014-VF1 (6)
 
Dec. 2048
 
Dec. 2018
 
54,626

 
5.49

 
374

 
4.63

 
33,768

Ocwen Freddie Advance Funding (OFAF) - Advance Receivables Backed Notes, Series 2015-VF1 (7)
 
Jun. 2049
 
Jun. 2019
 
64,950

 
4.83

 
50

 
4.52

 
56,078

Total Servicing Advance Financing Facilities
 
 
 
 
 
165,754

 
3.46
%
 
714,246

 
3.16
%
 
974,036

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Automotive Capital Asset Receivables Trust (ACART) - Loan Series 2017-1 (8)
 
Feb. 2021
 
Feb. 2019
 
—

 
—
%
 
—

 
6.77
%
 
24,582

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
165,754

 
3.46
%
 
$
714,246

 
3.25
%
 
$
998,618

(1)
The amortization date of our facilities is the date on which the revolving period ends under each advance 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 all of our 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 eligible collateral to pledge. Collateral may only be pledged to one facility. At September 30, 2018, $52.8 million of the available borrowing capacity of our advance financing notes could be used based on the amount of eligible collateral that had been pledged.
(3)
1ML was 2.26% and 1.56% at September 30, 2018 and December 31, 2017, respectively.
(4)
Effective January 1, 2018, the borrowing capacity of the Series 2014-VF4 and the Series 2015-VF5 variable rate notes were each reduced from $105.0 million to $70.0 million. The interest rate was based on 1ML, with a ceiling of 125 basis points (bps), plus a margin of 235 to 635 bps. On July 13, 2018, we increased the borrowing capacity of the Series 2015-VF5 variable notes to $225.0 million and extended the amortization date to December 15, 2019, with interest computed based on the lender’s cost of funds plus a margin of 105 to 250 bps. The increased capacity was used on July 16, 2018 to redeem the Series 2016-T1 term notes with an outstanding balance of $265.0 million and an amortization date of August 15, 2018. We also voluntarily terminated the Series 2014-VF4 variable notes on July 16, 2018.
(5)
Under the terms of the agreement, we must continue to borrow the full amount of the Series 2016-T2, 2018-T1 and 2018-T2 fixed-rate term notes until the amortization date. If there is insufficient eligible collateral to support the level of borrowing, the excess cash proceeds in an amount necessary to make up the deficit are not distributed to Ocwen but are held by the trustee, and interest expense continues to be based on the full amount of the outstanding notes. The Series 2016-T2, 2018-T1 and 2018-T2 term notes have a total combined borrowing capacity of $535.0 million. Rates on the individual classes of notes range from 2.72% to 4.53%. The Series 2016-T1 and Series 2017-T1 term notes were redeemed on July 16, 2018 and August 14, 2018, respectively. On August 15, 2018, we issued two $150.0 million fixed-rate term notes (Series 2018 T-1 and Series 2018-T2) with amortization dates of August 15, 2019 and August 2020, respectively.
(6)
The maximum borrowing capacity under this facility is $55.0 million. There is a ceiling of 300 bps for the 3ML in determining the interest rate for these variable rate notes. Rates on the individual notes are based on the lender’s cost of funds plus a margin of 235 to 475 bps.
(7)
On June 7, 2018, borrowing capacity was reduced from $110.0 million to $65.0 million with interest computed based on the lender’s cost of funds plus a margin of 180 to 450 bps. There is a ceiling of 300 bps for 3ML in determining the interest rate for these variable rate notes.
(8)
On January 23, 2018, we voluntarily terminated the Loan Series 2017-1 Notes.
Schedule of Financing Liabilities
Financing Liabilities
 
 
 
 
 
 
 
Outstanding Balance
Borrowing Type
 
Collateral
 
Interest Rate
 
Maturity
 
September 30, 2018
 
December 31, 2017
HMBS-Related Borrowings, at fair value (1)
 
Loans held for investment
 
1ML + 260 bps
 
(1)
 
$
5,184,227

 
$
4,601,556

Other Financing Liabilities
 
 
 
 
 
 
 
 
 
 
MSRs pledged, at fair value:
 
 
 
 
 
 
 
 
 
 
Original Rights to MSRs Agreements
 
MSRs
 
(2)
 
(2)
 
450,845

 
499,042

2017 Agreements and New RMSR Agreements
 
MSRs
 
(3)
 
(3)
 
169,354

 
9,249

 
 
 
 
 
 
 
 
620,199

 
508,291

Secured Notes, Ocwen Asset Servicing Income Series, Series 2014-1 (4)
 
MSRs
 
(4)
 
Feb. 2028
 
67,194

 
72,575

Financing liability - Owed to securitization investors, at fair value:
 
 
 
 
 
 
 
 
 
 
IndyMac Mortgage Loan Trust (INDX 2004-AR11) (5)
 
Loans held for investment
 
(5)
 
(5)
 
13,250

 
—

Residential Asset Securitization Trust 2003-A11 (RAST 2003-A11) (5)
 
Loans held for investment
 
(5)
 
(5)
 
13,393

 
—

 
 
 
 
 
 
 
 
26,643

 
—

Advances pledged (6)
 
Advances on loans
 
(6)
 
(6)
 
5,283

 
12,652

 
 
 
 
 
 
 
 
719,319

 
593,518

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
5,903,546

 
$
5,195,074

(1)
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.
(2)
This financing liability has no contractual maturity or repayment schedule. 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.
(3)
This financing liability arose in connection with lump sum payments received upon transfer of legal title of the MSRs related to the Rights to MSRs transactions to NRZ in September 2017. In connection with the execution of the New RMSR Agreements in January 2018, we received a lump sum payment of $279.6 million as compensation for foregoing certain payments under the Original Rights to MSRs Agreements. 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. The expected maturity of the liability is April 30, 2020, the date through which we were scheduled to be the servicer on loans underlying the Rights to MSRs per the Original Rights to MSRs Agreements.
(4)
OASIS noteholders are entitled to receive a monthly payment equal to the sum of: (a) 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. 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 notes.
(5)
Consists of securitization debt certificates due to third parties that represent beneficial interests in trusts that we include in our unaudited consolidated financial statements, as more fully described in Note 2 – Securitizations and Variable Interest Entities. The holders of these certificates have no recourse against the assets of Ocwen. The certificates in the INDX 2004-AR11 Trust pay interest based on variable rates which are generally based on weighted average net mortgage rates and which range between 3.29% and 3.62% at September 30, 2018. The certificates in the RAST 2003-A11 Trust pay interest based on fixed rates ranging between 4.25% and 5.75% and a variable rate based on 1ML plus 0.45%. The maturity of the certificates occurs upon maturity of the loans held by the trust. The remaining loans in the INDX 2004-AR11 Trust and RAST 2003-A11 Trust have maturity dates extending through November 2034 and October 2033, respectively.
(6)
Certain sales of advances did not qualify for sales accounting treatment and were accounted for as a financing. This financing liability has no contractual maturity. The effective interest rate is based on 1ML plus a margin of 450 bps.
Schedule of Other Secured Borrowings
Other Secured Borrowings
 
 
 
 
 
 
 
 
 
Outstanding Balance
Borrowing Type
 
Collateral
 
Interest Rate
 
Termination / Maturity
 
Available Borrowing Capacity (1)
 
September 30, 2018
 
December 31, 2017
SSTL (2)
 
(2)
 
1-Month Euro-dollar rate + 500 bps with a Eurodollar floor of 100 bps (2)
 
Dec. 2020
 
$
—

 
$
235,687

 
$
298,251

Mortgage loan warehouse facilities
 
 
 
 
 
 
 
 
 
 
 
 
Repurchase agreement (3)
 
Loans held for sale (LHFS)
 
1ML + 200 - 345 bps
 
Sep. 2019
 
100,000

 
—

 
8,221

Participation agreements (4)
 
LHFS
 
N/A
 
(4)
 
—

 
64,798

 
161,433

Mortgage warehouse agreement (5)
 
LHFS (reverse mortgages)
 
1ML + 275 bps; 1ML floor of 350 bps
 
Aug. 2019
 
—

 
9,899

 
32,042

Master repurchase agreement (6)
 
LHFS (forward and reverse mortgages)
 
1ML + 225 bps forward; 1ML + 275 bps reverse
 
Dec. 2018
 
109,567

 
40,433

 
54,086

Master repurchase agreement (7)
 
LHFS (reverse mortgages)
 
Prime + 0.0% (4.0% floor)
 
Dec. 2018
 
—

 
—

 
—

 
 
 
 
 
 
 
 
209,567

 
115,130

 
255,782

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
209,567

 
350,817

 
554,033

Unamortized debt issuance costs - SSTL
 
 
 
(3,573
)
 
(5,423
)
Discount - SSTL
 
 
 
(1,819
)
 
(2,760
)
 
 
 
 
 
 
 
 


 
$
345,425

 
$
545,850

 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average interest rate
 
5.79
%
 
5.22
%
(1)
Available borrowing capacity for our mortgage loan warehouse facilities does not consider the amount of the facility that the lender has extended on an uncommitted basis. Of the borrowing capacity extended on a committed basis, $100.0 million could be used at September 30, 2018 based on the amount of eligible collateral that could be pledged.
(2)
Under the terms of the Amended and Restated Senior Secured Term Loan Facility Agreement with an original borrowing capacity of $335.0 million, we may request increases to the loan amount of up to $100.0 million, with additional increases subject to certain limitations. We are required to make quarterly principal payments of $4.2 million on the SSTL, the first of which was paid on March 31, 2017.
The borrowings under the SSTL are secured by a first priority security interest in substantially all of the assets of Ocwen, OLS and the other guarantors thereunder, excluding among other things, 35% of the capital stock of foreign subsidiaries, securitization assets and equity interests of securitization entities, assets securing permitted funding indebtedness and non-recourse indebtedness, REO assets, servicing agreements where an acknowledgment from the GSE has not been obtained, as well as other customary carve-outs.
Borrowings bear interest, at the election of Ocwen, at a rate per annum equal to either (a) the base rate (the greatest of (i) the prime rate in effect on such day, (ii) the federal funds rate in effect on such day plus 0.50% and (iii) 1ML, plus a margin of 4.00% and subject to a base rate floor of 2.00% or (b) 1ML, plus a margin of 5.00% and subject to a 1ML floor of 1.00%. To date, we have elected option (b) to determine the interest rate.
(3)
We primarily use this facility to fund the repurchase of certain loans from Ginnie Mae guaranteed securitizations in connection with loan modifications and loan resolution activity as part of our contractual obligations as the servicer of the loans. On September 28, 2018, we renewed this facility through September 27, 2019. In connection with the renewal, we increased the maximum borrowing amount from $137.5 million to $175.0 million, of which $100.0 million is available on a committed basis and the remainder is available at the discretion of the lender.
(4)
Under these participation agreements, the lender provides financing for a combined total of $250.0 million at the discretion of the lender. The participation agreements allow 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 May 31, 2018, we renewed these facilities through April 30, 2019 ($175.0 million) and May 31, 2019 ($75.0 million).
(5)
Under this participation agreement, the lender provides financing for $100.0 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. On August 15, 2018, we renewed these facilities through August 15, 2019.
(6)
Under this agreement, the lender provides financing on a committed basis for up to $150.0 million. The 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.
(7)
Under this agreement, the lender provides financing for up to $50.0 million at the discretion of the lender.
Schedule of Senior Notes
Senior Notes
Interest Rate
 
Maturity
 
Outstanding Balance
 
 
September 30, 2018
 
December 31, 2017
Senior unsecured notes (1)
6.625%
 
May 2019
 
$
3,122

 
$
3,122

Senior secured notes (2)
8.375%
 
Nov. 2022
 
346,878

 
346,878

 
 
 
 
 
350,000

 
350,000

Unamortized debt issuance costs
 
 
 
 
(2,251
)
 
(2,662
)
 
 
 
 
 
$
347,749

 
$
347,338


(1)
Ocwen may redeem all or a part of the remaining Senior Unsecured Notes, upon not less than 30 nor more than 60 days’ notice, at a redemption price (expressed as a percentage of principal amount) of 100.000% beginning May 15, 2018 plus accrued and unpaid interest and additional interest, if any.
(2)
The Senior Secured Notes are guaranteed by Ocwen, OMS, Homeward Residential Holdings, Inc., Homeward and ACS (the Guarantors). The Senior Secured Notes are secured by second priority liens on the assets and properties of OLS and the Guarantors that secure the first priority obligations under the SSTL, excluding certain MSRs.
Schedule of Redemption Prices
The redemption prices during the twelve-month periods beginning on November 15th of each year are as follows:
Year
 
Redemption Price
2018
 
106.281%
2019
 
104.188%
2020
 
102.094%
2021 and thereafter
 
100.000%