XML 64 R42.htm IDEA: XBRL DOCUMENT v3.20.2
Borrowings (Tables)
 9 Months Ended
Sep. 30, 2020
Debt Disclosure [Abstract]  
Schedule of Match Funded Liabilities
Advance Match Funded Liabilities
Borrowing CapacitySeptember 30, 2020December 31, 2019
Borrowing TypeMaturity (1)Amorti- zation Date (1)Total Available (2)Weighted Average Interest Rate BalanceWeighted Average Interest RateBalance
Advance Receivables Backed Notes - Series 2015-VF5 (3)Jun. 2051Jun. 2021$250,000 $158,080 4.28 %$91,920 3.36 %$190,555 
Advance Receivables Backed Notes, Series 2019-T1 (4)Aug. 2050Aug. 2020— — — — 2.62 %185,000 
Advance Receivables Backed Notes, Series 2019-T2 (4)Aug. 2051Aug. 2021— — — — 2.53 %285,000 
Advance Receivables Backed Notes, Series 2020-T1 (4)Aug. 2052Aug. 2022475,000 — 1.49 %475,000 — %— 
Total Ocwen Master Advance Receivables Trust (OMART)725,000 158,080 1.94 %566,920 2.79 %660,555 
Ocwen Freddie Advance Funding (OFAF) - Advance Receivables Backed Notes, Series 2015-VF1 (5)
Jun. 2051Jun. 202170,000 56,842 3.28 %13,158 3.53 %18,554 
$795,000 $214,922 1.97 %$580,078 2.81 %$679,109 
(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. At September 30, 2020, $10.0 million and none of the available borrowing capacity of the OMART and OFAF advance financing notes, respectively, could be used based on the amount of eligible collateral.
(3)On May 7, 2020, we renewed this facility through June 30, 2021, and increased the total borrowing capacity of the Series 2015-VF5 variable notes from $200.0 million to $500.0 million, with interest computed based on the lender’s cost of funds plus a margin of 400 bps. On August 17, 2020, we reduced the total borrowing capacity to $250.0 million in conjunction with the issuance of new fixed-rate term notes with a borrowing capacity of $475.0 million, as disclosed in (4) below.
(4)On August 12, 2020, we issued fixed-rate term notes with a total borrowing capacity of $475.0 million (Series 2020 T-1). The weighted average rate of the notes at September 30, 2020 is 1.49%, with rates on the individual classes of notes ranging from 1.28% to 5.42%. The Series 2019-T1 and 2019-T2 fixed-rate term notes were redeemed on August 17, 2020.
(5)On May 7, 2020, we renewed this facility through June 30, 2021 and increased the borrowing capacity from $60.0 million to $70.0 million with interest computed based on the lender’s cost of funds plus a margin of 300 bps.
Schedule of Financing Liabilities
Financing LiabilitiesOutstanding Balance
Borrowing TypeCollateralInterest RateMaturitySeptember 30, 2020December 31, 2019
HMBS-related borrowings, at fair value (1)Loans held for investment 1ML + 260 bps(1)$6,606,543 $6,063,435 
Other financing liabilities, at fair value
MSRs pledged (Rights to MSRs), at fair value:
Original Rights to MSRs AgreementsMSRs (2)(2)577,309 603,046 
2017 Agreements and New RMSR Agreements
MSRs(3)(3)— 35,445 
PMC MSR Agreements
MSRs(4)(4)— 312,102 
577,309 950,593 
Financing liability - Owed to securitization investors, at fair value:
IndyMac Mortgage Loan Trust (INDX 2004-AR11) (5)Loans held for investment (5)(5)— 9,794 
Residential Asset Securitization Trust 2003-A11 (RAST 2003-A11) (5)Loans held for investment (5)(5)11,012 12,208 
11,012 22,002 
Total Other financing liabilities, at fair value588,321 972,595 
$7,194,864 $7,036,030 
(1)Represents amounts due to the holders of beneficial interests in Ginnie Mae guaranteed HMBS which did not qualify for sale accounting treatment of HECM loans.
(2)This pledged MSR liability is recognized due to the accounting treatment of MSR sale transactions with NRZ which did not qualify as sales for accounting purposes. See Note 9 — Rights to MSRs for additional information.
(3)This financing liability arose in connection with lump sum payments received in 2017 upon transfer of legal title of the MSRs related to the Rights to MSRs transactions to NRZ and in 2018 in connection with the execution of the New RMSR Agreements as compensation for foregoing certain payments under the Original Rights to MSRs Agreements. See Note 9 — Rights to MSRs for additional information.
(4)Represented a liability for sales of MSRs to NRZ which did not qualify for sale accounting treatment and were accounted for as a secured borrowing which we assumed in connection with the acquisition of PHH Corporation (PHH). As disclosed in Note 9 — Rights to MSRs, the liability was derecognized upon termination of the agreement by NRZ on February 20, 2020.
(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 3 – Securitizations and Variable Interest Entities. In June 2020, we sold the beneficial interests held in the INDX 2004-AR11 securitization trust and deconsolidated the trust. 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 RAST 2003-A11 Trust have maturity dates extending through October 2033.
Schedule of Other Secured Borrowings
Other Secured BorrowingsAvailable Borrowing Capacity Outstanding Balance
Borrowing TypeCollateralInterest Rate (1)MaturityUncommittedCommitted (2)September 30, 2020December 31, 2019
SSTL (3)(3)1-Month Euro-dollar rate + 600 bps with a Eurodollar floor of 100 bps (3)May 2022$— $— $190,000 $326,066 
Master repurchase agreement (4)Loans held for sale (LHFS)1ML + 220 - 375 bpsJune 202119,756 — 155,244 91,573 
Mortgage warehouse agreement (5)LHFS (reverse)Greater of 1ML + 250 bps or 3.50%; LIBOR Floor 0%August 20211,000 — — 72,443 
Master repurchase agreement (6)LHFS (forward and reverse)1ML + 225 bps forward; 1ML + 275 bps reverseDec. 202050,000 8,869 191,131 139,227 
Master repurchase agreement (7)LHFS (reverse)Prime + 0.0%; 4.0% floorJanuary 2020— — — 898 
Master repurchase agreement (8)N/A1ML + 180 bps; LIBOR Floor 35 bpsN/A50,000 — — — 
Participation agreement (9)LHFS(9)June 2021120,000 — — 17,304 
Master repurchase agreement (9)LHFS(9)June 2021— 76,497 13,503 — 
Master repurchase agreementLHFS1 ML + 250 bpsMarch 2021— 1,000 — — 
Mortgage warehouse agreement (10)LHFS1ML + 350 bps; LIBOR Floor 525 bpsDec. 2020— 48,211 1,789 10,780 
Mortgage warehouse agreement (11)LHFS (reverse)1ML + 250 bps; 3.50% floorNov. 202019,904 — 80,096 — 
Mortgage warehouse agreement (12)LHFS(12)N/A100,000 — — — 
Total mortgage loan warehouse facilities360,660 134,577 441,763 332,225 
Other Secured BorrowingsAvailable Borrowing Capacity Outstanding Balance
Borrowing TypeCollateralInterest Rate (1)MaturityUncommittedCommitted (2)September 30, 2020December 31, 2019
Agency MSR financing facility (13)MSRs, Advances1ML + 450 bpsJune 2021— 136,071 113,929 147,706 
Ginnie Mae MSR financing facility (14)MSRs, Advances1ML + 395 bpsDec. 202074,947 — 52,553 72,320 
Ocwen Excess Spread-Collateralized Notes, Series 2019-PLS1 (15)MSRs5.07%Nov. 2024— — 74,021 94,395 
Secured Notes, Ocwen Asset Servicing Income Series, Series 2014-1 (16)MSRs(15)Feb. 2028— — 50,168 57,594 
Total MSR financing facilities74,947 136,071 290,671 372,015 
$435,607 $270,648 922,434 1,030,306 
Unamortized debt issuance costs - SSTL and PLS Notes(6,712)(3,381)
Discount - SSTL(430)(1,134)
$915,292 $1,025,791 
Weighted average interest rate4.51 %4.74 %
(1)1ML was 0.15% and 1.76% at September 30, 2020 and December 31, 2019, respectively.
(2)Of the borrowing capacity on mortgage loan warehouse facilities extended on a committed basis, $34.1 million of the available borrowing capacity could be used at September 30, 2020 based on the amount of eligible collateral that could be pledged.
(3)On January 27, 2020, we entered into a Joinder and Second Amendment Agreement (the Amendment) which amends the Amended and Restated SSTL Facility Agreement dated as of December 5, 2016, as amended by a Joinder and Amendment Agreement dated as of March 18, 2019. The Amendment provided for a net prepayment of $126.1 million of the outstanding balance at December 31, 2019 such that the facility has a maximum outstanding balance of $200.0 million. The Amendment also (i) extended the maturity of the remaining outstanding loans under the SSTL to May 15, 2022, (ii) provides that the loans under the SSTL bear interest at the one-month Eurodollar Rate or the Base Rate (as defined in the SSTL), at our option, plus a margin of 6.00% per annum for Eurodollar Rate loans or 5.00% per annum for Base Rate loans (increasing to a margin of 6.50% per annum for Eurodollar Rate loans or 5.50% per annum for Base Rate loans on January 27, 2021), (iii) provides for a prepayment premium of 2.00% until January 27, 2022 and (iv) requires quarterly principal payments of $5.0 million.
(4)The maximum borrowing under this agreement is $175.0 million, of which $110.0 million is available on a committed basis and the remainder is available at the discretion of the lender.
(5)On March 12, 2020, we voluntarily reduced the maximum borrowing capacity from $100.0 million to $1.0 million in connection with Liberty’s transfer of substantially all of its assets, liabilities, contracts and employees to PMC effective March 15, 2020. On August 10, 2020, the maturity date of this agreement was extended to August 13, 2021.
(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.
(7)This facility expired on January 22, 2020 and was not renewed.
(8)The lender provides financing for up to $50.0 million at the discretion of the lender. The agreement has no stated maturity date.
(9)Under the original terms, the lender provided $300.0 million of borrowing capacity on an uncommitted basis. On June 25, 2020, this facility was amended to be comprised of two lines, a $120.0 million uncommitted participation agreement and a $90.0 million committed repurchase agreement. The maturity date of the facility was extended to June 24, 2021. The agreements allow the lender to acquire a 100% beneficial interest in the underlying mortgage loans.
The transactions do not qualify for sale accounting treatment and are accounted for as secured borrowings. The lender earns the stated interest rate of the underlying mortgage loans less 35 bps, with a floor of 3.5%, while the loans are financed under both the participation and repurchase agreements.
(10)Under this agreement, the lender provides financing for up to $50.0 million on a committed basis.
(11)On March 12, 2020, we entered into a mortgage loan warehouse agreement to fund reverse mortgage loan draws by borrowers subsequent to origination. Under this agreement, the lender provides financing for up to $100.0 million on an uncommitted basis. In October 2020, the maturity date was extended to October 29, 2021 and the capacity was temporarily increased to $150.0 million until November 15, 2020 when it will be reduced to $100.0 million.
(12)On September 30, 2020, we entered into a $100.0 million uncommitted repurchase agreement to finance the purchase of EBO loans from Ginnie Mae. The agreement has no stated maturity date, however each transaction has a maximum duration of four years. The cost of this line is set at each transaction date and is based on the interest rate on the collateral.
(13)PMC’s obligations under this facility are secured by a lien on the related MSRs. Ocwen guarantees the obligations of PMC under this facility. On May 7, 2020, we renewed the facility through June 30, 2021 and reduced the maximum amount which we may borrow pursuant to the repurchase agreements from $300.0 million to $250.0 million on a committed basis. We also pledged the membership interest of the depositor for our OMART advance financing facility as additional collateral to this facility. See Note 3 – Securitizations
and Variable Interest Entities for additional information. We are subject to daily margining requirements under the terms of our MSR financing facilities. Declines in fair value of our MSRs due to declines in market interest rates, assumption updates or other factors require that we provide additional collateral to our lenders under these facilities.
(14)PMC’s obligations under this facility are secured by a lien on the related Ginnie Mae MSRs. Ocwen guarantees the obligations of PMC under the facility. On June 30, 2020, we amended the facility to increase the borrowing capacity from $100.0 million to $127.5 million on an uncommitted basis, accelerate the maturity date to December 27, 2020 and include Ginnie Mae servicing advances as additional collateral. The lender earns the stated interest rate of 1ML plus a margin of 395 bps on borrowings prior to June 1, 2020, with any subsequent borrowings at a stated interest of 1ML plus a margin of 700 bps. See (13) above regarding daily margining requirements.
(15)PLS Issuer’s obligations under the facility are secured by a lien on the related PLS MSRs. Ocwen guarantees the obligations of PLS Issuer under the facility. The Class A PLS Notes issued pursuant to the credit agreement had an initial principal amount of $100.0 million and amortize in accordance with a pre-determined schedule subject to modification under certain events. See Note 3 – Securitizations and Variable Interest Entities for additional information. See (12) above regarding daily margining requirements.
(16)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.
Schedule of Senior Notes
Senior NotesInterest RateMaturityOutstanding Balance
September 30, 2020December 31, 2019
Senior unsecured notes (1)6.375%Aug. 2021$21,543 $21,543 
21,543 21,543 
Senior secured notes 8.375%Nov. 2022291,509 291,509 
313,052 313,052 
Unamortized debt issuance costs(1,098)(1,470)
Fair value adjustments (1)(265)(497)
$311,689 $311,085 
(1)These notes were assumed by Ocwen in connection with its acquisition of PHH. We are amortizing the 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 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 September 30, 2020:
Collateral for Secured Borrowings
Total AssetsAdvance Match Funded LiabilitiesFinancing LiabilitiesMortgage Loan Warehouse / MSR FacilitiesSales and Other Commitments (1)Other (2)
Cash$321,455 $— $— $— $— $321,455 
Restricted cash61,511 10,458 — 4,416 46,637 — 
MSRs (3)1,069,013 — 577,886 490,583 — 48 
Advances, net832,604 660,816 — 61,081 — 110,707 
Loans held for sale390,631 — — 335,726 — 54,905 
Loans held for investment6,860,942 — 6,726,105 95,619 — 39,218 
Receivables, net201,607 — — 52,417 — 149,190 
Premises and equipment, net
23,620 — — — — 23,620 
Other assets662,468 — — 7,077 597,953 57,438 
Total assets$10,423,851 $671,274 $7,303,991 $1,046,919 $644,590 $756,581 
(1)Sales and Other Commitments include 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, 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. Assets 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.
(3)MSRs pledged as collateral for secured borrowings in connection with the Rights to MSRs transactions with NRZ which are accounted for as secured financings. Certain MSR cohorts with a negative fair value of $0.5 million that would be presented as Other are excluded from the eligible collateral of the facilities and are comprised of $17.4 million of negative fair value related to RMBS and $17.9 million of positive fair value related to private EBO and PLS MSRs.