Rights to MSRs (Tables)

9 Months Ended

Sep. 30, 2020

Schedule of Assets, Liabilities, Servicing and Subservicing Fees Related to NRZ Agreements

The following tables present selected assets and liabilities recorded on our unaudited consolidated balance sheets as well as the impacts to our unaudited consolidated statements of operations in connection with our NRZ agreements.


Balance Sheets	September 30, 2020		December 31, 2019
MSRs, at fair value (1)	$	577,309	$	915,148

Due from NRZ (Receivables)
Sales and transfers of MSRs (2)	$	—	$	24,167
Subservicing fees and reimbursable expenses	2,364		9,197
	$	2,364	$	33,364

Due to NRZ (Other liabilities)	$	95,803	$	63,596

Financing liability - MSRs pledged, at fair value
Original Rights to MSRs Agreements	$	577,309	$	603,046
2017 Agreements and New RMSR Agreements (3)	—		35,445
PMC MSR Agreements (1)	—		312,102
	$	577,309	$	950,593

(1)On February 20, 2020, we received a notice of termination from NRZ with respect to the PMC MSR Agreements. While the MSRs and the Rights to MSRs associated with these loans were derecognized from our balance sheet, we continued to service these loans until deboarding on October 1, 2020, and accounted for them as a subservicing relationship.

(2)Balance represents the holdback of proceeds from PMC MSR sales and transfers to address indemnification claims and mortgage loan document deficiencies. These sales were executed by PMC prior to Ocwen’s acquisition of PHH.

(3)Income was recognized through April 30, 2020 as a reduction in the financing liability based on the term of the original agreements.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Statements of Operations
Servicing fees collected on behalf of NRZ (1)	$	91,015	$	146,567	$	299,089	$	443,505
Less: Subservicing fee retained by Ocwen (1)	25,674		35,462		80,529		108,774
Net servicing fees remitted to NRZ	65,341		111,105		218,560		334,731

Less: Reduction (increase) in financing liability
Changes in fair value:
Original Rights to MSRs Agreements	(10,401)		(228,644)		(18,503)		(230,193)
2017 Agreements and New RMSR Agreements	—		(2,216)		(903)		(4,562)
PMC MSR Agreements (1)	—		30,156		40,720		111,034
	(10,401)		(200,704)		21,314		(123,721)
Runoff and settlement:
Original Rights to MSRs Agreements	15,650		11,170		41,572		31,617
2017 Agreements and New RMSR Agreements	—		26,705		35,121		76,087
PMC MSR Agreements (1)	—		15,881		7,492		49,469
	15,650		53,756		84,185		157,173

Other	2,688		1,637		7,377		(2,023)

Pledged MSR liability expense	$	57,404	$	256,416	$	105,684	$	303,302

(1)On February 20, 2020, we received a notice of termination from NRZ with respect to the PMC MSR Agreements. As the MSRs and the Rights to MSRs associated with these loans were derecognized from our consolidated balance sheet on February 20, 2020, we do not report the associated servicing fees collected on behalf of, and remitted to NRZ, or the change in fair value, runoff and settlement of the financing liability subsequent to February 20, 2020.

Schedule of Activity Related to Financing Liability - MSRs Pledged


	Three Months Ended September 30, 2020
Financing Liability - MSRs Pledged	Original Rights to MSRs Agreements		2017 Agreements and New RMSR Agreements		PMC MSR Agreements		Total
Beginning Balance	$	582,558	$	—	$	—	$	582,558



Changes in fair value:
Original Rights to MSRs Agreements	10,402		—		—		10,402
2017 Agreements and New RMSR Agreements	—		—		—		—
PMC MSR Agreements	—		—		—		—
Runoff and settlement:
Original Rights to MSRs Agreements	(15,651)		—		—		(15,651)
2017 Agreements and New RMSR Agreements	—		—		—		—
PMC MSR Agreements	—		—		—		—





Balance at September 30, 2020	$	577,309	$	—	$	—	$	577,309


	Three Months Ended September 30, 2019
Financing Liability - MSRs Pledged	Original Rights to MSRs Agreements		2017 Agreements and New RMSR Agreements		PMC MSR Agreements		Total
Beginning Balance	$	412,909	$	88,103	$	343,901	$	844,913
Additions	—		—		345		345


Changes in fair value:
Original Rights to MSRs Agreements	228,643		—		—		228,643
2017 Agreements and New RMSR Agreements	—		2,216		—		2,216
PMC MSR Agreements	—		—		(30,156)		(30,156)
Runoff and settlement:
Original Rights to MSRs Agreements	(11,170)		—		—		(11,170)
2017 Agreements and New RMSR Agreements	—		(26,705)		—		(26,705)
PMC MSR Agreements	—		—		(15,881)		(15,881)

Calls (1):
Original Rights to MSRs Agreements	(3,095)		—		—		(3,095)
2017 Agreements and New RMSR Agreements	—		(2,169)		—		(2,169)

Balance at September 30, 2019	$	627,287	$	61,445	$	298,220	$	986,952


	Nine Months Ended September 30, 2020
Financing Liability - MSRs Pledged	Original Rights to MSRs Agreements		2017 Agreements and New RMSR Agreements		PMC MSR Agreements		Total
Beginning Balance	$	603,046	$	35,445	$	312,102	$	950,593
Additions	—		—		—		—
Receipt of lump-sum cash payments	—		—		—		—
Sales	—		—		(226)		(226)
Changes in fair value:
Original Rights to MSRs Agreements	18,503		—		—		18,503
2017 Agreements and New RMSR Agreements	—		903		—		903
PMC MSR Agreements	—		—		(40,720)		(40,720)
Runoff and settlement:
Original Rights to MSRs Agreements	(41,572)		—		—		(41,572)
2017 Agreements and New RMSR Agreements	—		(35,121)		—		(35,121)
PMC MSR Agreements	—		—		(7,492)		(7,492)
Derecognition of Pledged MSR financing liability due to termination of PMC MSR Agreements	—		—		(263,664)		(263,664)
Calls (1):
Original Rights to MSRs Agreements	(2,668)		—		—		(2,668)
2017 Agreements and New RMSR Agreements	—		(1,227)		—		(1,227)

Balance at September 30, 2020	$	577,309	$	—	$	—	$	577,309


	Nine Months Ended September 30, 2019
Financing Liability - MSRs Pledged	Original Rights to MSRs Agreements		2017 Agreements and New RMSR Agreements		PMC MSR Agreements		Total
Beginning Balance	$	436,511	$	138,854	$	457,491	$	1,032,856
Purchases	—		—		1,221		1,221

Sales	—		—		11		11
Changes in fair value:
Original Rights to MSRs Agreements	230,193		—		—		230,193
2017 Agreements and New RMSR Agreements	—		4,562		—		4,562
PMC MSR Agreements	—		—		(111,034)		(111,034)
Runoff and settlement:
Original Rights to MSRs Agreements	(31,617)		—		—		(31,617)
2017 Agreements and New RMSR Agreements	—		(76,087)		—		(76,087)
PMC MSR Agreements	—		—		(49,469)		(49,469)
Calls (1):
Original Rights to MSRs Agreements	(7,800)		—		—		(7,800)
2017 Agreements and New RMSR Agreements	—		(5,884)		—		(5,884)
Balance at September 30, 2019	$	627,287	$	61,445	$	298,220	$	986,952

(1)Represents the carrying value of MSRs in connection with call rights exercised by NRZ, for MSRs transferred to NRZ under the 2017 Agreements and New RMSR Agreements, or by Ocwen at NRZ’s direction, for MSRs underlying the Original Rights to MSRs Agreements. Ocwen derecognizes the MSRs and the related financing liability upon collapse of the securitization.