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Borrowings (Tables)
 6 Months Ended
Jun. 30, 2019
Debt Disclosure [Abstract]  
Schedule of Match Funded Liabilities
Match Funded Liabilities
 
 
 
 
 
 
 
June 30, 2019
 
December 31, 2018
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 2015-VF5 (4)
 
Dec. 2049
 
Dec. 2019
 
$
110,684

 
3.96
%
 
$
114,316

 
4.06
%
 
$
216,559

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 2018-T1 (5)
 
Aug. 2049
 
Aug. 2019
 
—

 
3.50

 
150,000

 
3.50

 
150,000

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

 
3.81

 
150,000

 
3.81

 
150,000

Total Ocwen Master Advance Receivables Trust (OMART)
 
 
 
 
 
110,684

 
3.47

 
649,316

 
3.56

 
751,559

Ocwen Freddie Advance Funding (OFAF) - Advance Receivables Backed Notes, Series 2015-VF1 (6)
 
Jun. 2050
 
Jun. 2020
 
37,520

 
4.12

 
22,480

 
5.03

 
26,725

 
 
 
 
 
 
$
148,204

 
3.49
%
 
$
671,796

 
3.61
%
 
$
778,284

(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 ratably to each outstanding amortizing note to reduce the balance and as such the collection of advances allocated to the amortizing note may not be used to fund new advances.
(2)
Borrowing capacity under the OMART and OFAF facilities is available to us provided that we have sufficient eligible collateral to pledge in accordance with their respective terms. At June 30, 2019, $23.5 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 2.40% and 2.50% at June 30, 2019 and December 31, 2018, respectively.
(4)
The total borrowing capacity of the Series 2015-VF5 variable notes is $225.0 million, with interest computed based on the lender’s cost of funds plus a margin of 105 to 250 bps.
(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%.
(6)
On June 6, 2019, we renewed this facility through June 5, 2020 and borrowing capacity was reduced from $65.0 million to $60.0 million with interest computed based on the lender’s cost of funds plus a margin of 100 to 330 bps based on the various classes of notes.
Schedule of Financing Liabilities
Financing Liabilities
 
 
 
 
 
 
 
Outstanding Balance
Borrowing Type
 
Collateral
 
Interest Rate
 
Maturity
 
June 30, 2019
 
December 31, 2018
HMBS-Related Borrowings, at fair value (1)
 
Loans held for investment
 
1ML + 260 bps
 
(1)
 
$
5,745,383

 
$
5,380,448

Other Financing Liabilities
 
 
 
 
 
 
 
 
 
 
MSRs pledged, at fair value:
 
 
 
 
 
 
 
 
 
 
Original Rights to MSRs Agreements
 
MSRs
 
(2)
 
(2)
 
412,909

 
436,511

2017 Agreements and New RMSR Agreements
 
MSRs
 
(3)
 
(3)
 
88,103

 
138,854

PMC MSR Agreements
 
MSRs
 
(4)
 
(4)
 
343,901

 
457,491

 
 
 
 
 
 
 
 
844,913

 
1,032,856

Secured Notes, Ocwen Asset Servicing Income Series, Series 2014-1 (5)
 
MSRs
 
(5)
 
Feb. 2028
 
62,841

 
65,523

Financing liability - Owed to securitization investors, at fair value:
 
 
 
 
 
 
 
 
 
 
IndyMac Mortgage Loan Trust (INDX 2004-AR11) (6)
 
Loans held for investment
 
(6)
 
(6)
 
10,629

 
11,012

Residential Asset Securitization Trust 2003-A11 (RAST 2003-A11) (6)
 
Loans held for investment
 
(6)
 
(6)
 
13,068

 
13,803

 
 
 
 
 
 
 
 
23,697

 
24,815

Advances pledged (7)
 
Advances on loans
 
(7)
 
(7)
 
—

 
4,419

Total Other Financing Liabilities
 
 
 
 
 
 
 
931,451

 
1,127,613

 
 
 
 
 
 
 
 
$
6,676,834

 
$
6,508,061

(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)
Represents a liability for sales of MSRs that are accounted for as a secured borrowing which we assumed in connection with the acquisition of PHH. Under this accounting treatment, the MSRs transferred to NRZ remain on the consolidated balance sheet and the proceeds from the sale are recognized as a secured liability. We elected to record the liability at fair value consistent with the related MSRs.
(5)
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.
(6)
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 4 – 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 3.70% and 4.29% at June 30, 2019. 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.
(7)
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)
 
June 30, 2019
 
December 31, 2018
SSTL (2)
 
(2)
 
1-Month Euro-dollar rate + 500 bps with a Eurodollar floor of 100 bps (2)
 
Dec. 2020
 
$
—

 
$
338,784

 
$
231,500

Mortgage loan warehouse facilities
 
 
 
 
 
 
 
 
 
 
 
 
Repurchase agreement (3)
 
Loans held for sale (LHFS)
 
1ML + 195 - 300 bps
 
Sep. 2019
 
—

 
109,807

 
74,693

Participation agreement (4)
 
LHFS
 
N/A
 
Jul. 2019
 
—

 
—

 
42,331

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

 
9,630

 
8,009

Master repurchase agreement (6)
 
LHFS (forward and reverse mortgages)
 
1ML + 225 bps forward; 1ML + 275 bps reverse
 
Dec. 2019
 
165,425

 
34,575

 
30,680

Master repurchase agreement (7)
 
LHFS (reverse mortgages)
 
Prime + 0.0% (4.0% floor)
 
Jan. 2020
 
—

 
439

 
—

Master repurchase agreement (8)
 
N/A
 
1ML + 170bps
 
N/A
 
—

 
—

 
—

Participation agreement (9)
 
LHFS
 
N/A
 
Feb. 2020
 
—

 
28,478

 
—

 
 
 
 
 
 
 
 
165,425

 
182,929

 
155,713

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
165,425

 
521,713

 
387,213

Unamortized debt issuance costs - SSTL
 
 
 
(3,456
)
 
(3,098
)
Discount - SSTL
 
 
 
(1,776
)
 
(1,577
)
 
 
 
 
 
 
 
 


 
$
516,481

 
$
382,538

 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average interest rate
 
5.22
%
 
5.49
%
(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, none could be used at June 30, 2019 based on the amount of eligible collateral that could be pledged.
(2)
On March 18, 2019, we entered into a Joinder and Amendment Agreement (the Amendment) which amends the existing Amended and Restated SSTL Facility Agreement dated December 5, 2016 to provide an additional term loan of $120.0 million subject to the same maturity, interest rate and other material terms of existing borrowings under the SSTL. Effective with the Amendment, the quarterly principal payment has been increased from $4.2 million to $6.4 million beginning March 31, 2019. See information regarding collateral in the table below.
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)
The maximum borrowing under this agreement is $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)
Effective with the merger of Homeward into PMC in February 2019, an existing participation agreement with uncommitted borrowing capacity of $75.0 million was terminated. Effective with the merger of OLS into PMC in June 2019, the remaining participation agreement with uncommitted borrowing capacity of $175.0 million was also terminated.
(5)
Under this participation agreement, the lender provides financing for $100.0 million on an uncommitted basis. 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.
(6)
The maximum borrowing under this agreement is $250.0 million, of which $200.0 million is available on a committed basis and the remainder is available on an uncommitted basis. 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 on an uncommitted basis. On January 23, 2019, we renewed this facility through January 22, 2020.
(8)
This agreement was originally entered into by PHH and subsequently assumed by Ocwen in connection with its acquisition of PHH. The facility provides financing for up to $200.0 million at the discretion of the provider. The agreement has no stated maturity date.
(9)
We entered into a master participation agreement on February 4, 2019 under which the lender will provide $300.0 million of borrowing capacity to PMC on an uncommitted basis. 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.
Schedule of Senior Notes
Senior Notes
Interest Rate
 
Maturity
 
Outstanding Balance
 
 
June 30, 2019
 
December 31, 2018
Senior unsecured notes (1)
 
 
 
 
 
 
 
PHH
7.375%
 
Sep. 2019
 
$
97,521

 
$
97,521

PHH
6.375%
 
Aug. 2021
 
21,543

 
21,543

 
 
 
 
 
119,064

 
119,064

Senior secured notes
8.375%
 
Nov. 2022
 
330,878

 
330,878

 
 
 
 
 
449,942

 
449,942

Unamortized debt issuance costs
 
 
 
 
(1,825
)
 
(2,075
)
Fair value adjustments (1)
 
 
 
 
(540
)
 
860

 
 
 
 
 
$
447,577

 
$
448,727

(1)
These notes were originally issued by PHH and subsequently assumed by Ocwen in connection with its acquisition of PHH. We recorded the notes at their respective fair values on the date of acquisition, and we are amortizing the resulting fair value purchase accounting adjustments over the remaining term of the notes. We have the option to redeem the notes due in August 2021, in whole or in part, on or after January 1, 2019 at a redemption price equal to 100.0% of the principal amount plus any accrued and unpaid interest.
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%
Schedule of Assets Held as Collateral Related to Secured Borrowings
Our assets held as collateral related to secured borrowings, committed under sale or other contractual obligations and which may be subject to secured liens under the SSTL and Senior Secured Notes are as follows at June 30, 2019:
 
 
 
Collateral for Secured Borrowings
 
 
 
 
 
Total Assets
 
Match Funded Liabilities
 
Financing Liabilities
 
Mortgage Loan Warehouse Facilities
 
Sales and Other Commitments (1)
 
Other (2)
Cash
$
287,724

 
$
—

 
$
—

 
$
—

 
$
—

 
$
287,724

Restricted cash
60,708

 
15,488

 
—

 
4,100

 
41,120

 
—

MSRs
1,312,633

 
—

 
824,442

 
—

 
—

 
488,191

Advances, net
229,167

 
—

 
—

 
—

 
30,757

 
198,410

Match funded advances
875,332

 
875,332

 
—

 
—

 
—

 
—

Loans held for sale
196,071

 
—

 
—

 
151,878

 
—

 
44,193

Loans held for investment
5,897,731

 
—

 
5,818,251

 
38,483

 
—

 
40,997

Receivables, net
187,985

 
—

 
—

 
35,903

 
—

 
152,082

Premises and equipment, net
57,598

 
—

 
—

 
—

 
—

 
57,598

Other assets
522,844

 
—

 
—

 
4,000

 
473,412

 
45,432

Total assets
$
9,627,793

 
$
890,820

 
$
6,642,693

 
$
234,364

 
$
545,289

 
$
1,314,627

(1)
Sales and Other Commitments include MSRs and related advances committed under sale agreements, Restricted cash and deposits held as collateral to support certain contractual obligations, and Contingent loan repurchase assets related to the Ginnie Mae EBO program for which a corresponding liability is recognized in Other liabilities.
(2)
The borrowings under the SSTL are secured by a first priority security interest in substantially all of the assets of Ocwen, PHH, PMC and the other guarantors thereunder, excluding among other things, 35% of the voting capital stock of foreign subsidiaries, securitization assets and equity interests of securitization entities, assets securing permitted funding indebtedness and non-recourse indebtedness, REO assets, Agency MSRs with respect to which an acknowledgment agreement acknowledging such security interest has not been obtained, as well as other customary carve-outs (collectively, the Collateral). The Collateral is subject to certain permitted liens set forth under the SSTL and related security agreement. The Senior Secured Notes are guaranteed by Ocwen and the other guarantors that guarantee the SSTL, and the borrowings under the Senior Secured Notes are secured by a second priority security interest in the Collateral. Security interests securing borrowings under the SSTL and Senior Secured Notes may include amounts presented in Other as well as certain assets presented in Collateral for Secured Borrowings and Sales and Other Commitments, subject to permitted liens as defined in the applicable debt documents. The amounts presented here may differ in their calculation and are not intended to represent amounts that may be used in connection with covenants under the applicable debt documents.