XML 54 R42.htm IDEA: XBRL DOCUMENT v3.21.2
Borrowings (Tables)
 9 Months Ended
Sep. 30, 2021
Debt Disclosure [Abstract]  
Schedule of Financing Liabilities
Financing LiabilitiesOutstanding Balance
Borrowing TypeCollateralInterest RateMaturitySeptember 30, 2021December 31, 2020
HMBS-related borrowings, at fair value (1)Loans held for investment
1ML + 242 bps (1)
(1)$6,782,564 $6,772,711 
Other financing liabilities, at fair value
Original Rights to MSRs Agreements - NRZMSRs (2)(2)574,020 566,952 
Transferred MSR liability - MAVMSRs(2)(2)128,887 — 
702,907 566,952 
Financing liability - Owed to securitization investors, at fair value:
Residential Asset Securitization Trust 2003-A11 (RAST 2003-A11) (3)Loans held for investment (3)Oct. 20338,004 9,770 
Total Other financing liabilities, at fair value710,911 576,722 
$7,493,475 $7,349,433 
(1)Represents amounts due to the holders of beneficial interests in Ginnie Mae guaranteed HMBS that did not qualify for sale accounting treatment of HECM loans. Under this accounting treatment, the HECM loans securitized with Ginnie Mae remain on our consolidated balance sheets and the proceeds from the sale are recognized as a financing liability, which is recorded at fair value consistent with the related HECM loans. The beneficial interests in Ginnie Mae guaranteed HMBS have no maturity dates, and the borrowings mature as the related loans are repaid. Interest rate is a weighted average based on the pass-through rate of the loans. See Note 2 – Securitizations and Variable Interest Entities.
(2)Pledged MSR liabilities are recognized due to the accounting treatment of MSR sale transactions with NRZ and MAV that did not qualify as sales for accounting purposes. Under this accounting treatment, the MSRs transferred remain on the consolidated balance sheet and the proceeds from the sale are recognized as a financing liability, which is recorded at fair value consistent with the related MSRs. The financing liability has no contractual maturity or repayment schedule. See Note 8 — MSR Transfers Not Qualifying for Sale Accounting for additional information.
(3)Consists of securitization debt certificates due to third parties that represent beneficial interests in trusts that we include in our unaudited consolidated financial statements. Holders of the debt issued by the consolidated securitization trust entities have recourse only to the assets of the SPE for satisfaction of the debt and have no recourse against the assets of Ocwen. Similarly, the general creditors of Ocwen have no claim on the assets of the trusts. Trust pay interest based on fixed rates ranging between 4.25% and 5.75% and a variable rate based on 1ML plus 0.45%, includes certificates that are Principal Only certificates and are not entitled to receive distributions of interest.
Schedule of Match Funded Liabilities
Advance Match Funded Liabilities
Borrowing CapacitySeptember 30, 2021December 31, 2020
Borrowing TypeMaturity (1)Amort. Date (1)Total Available (2)Weighted Average Interest Rate (6)BalanceWeighted Average Interest Rate (6)Balance
Advance Receivables Backed Notes - Series 2015-VF5 (3)Jun. 2052Jun. 2022$80,000 $54,505 2.14 %$25,495 4.26 %$89,396 
Advance Receivables Backed Notes, Series 2020-T1 (4)Aug. 2052Aug. 2022475,000 — 1.49 %475,000 1.49 %475,000 
Total Ocwen Master Advance Receivables Trust (OMART)555,000 54,505 1.52 %500,495 1.93 %564,396 
Ocwen Freddie Advance Funding (OFAF) - Advance Receivables Backed Notes, Series 2015-VF1 (5)
Aug. 2052Aug. 202240,000 23,923 2.15 %16,077 3.26 %16,892 
$595,000 $78,428 1.54 %$516,572 1.96 %$581,288 
(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. After the amortization date for each note, 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, 2021, none of the available borrowing capacity of the OMART and OFAF advance financing notes could be used based on the amount of eligible collateral.
(3)Interest is computed based on the lender’s cost of funds plus a margin of 200 bps. On June 30, 2021, the amortization date was extended by one year to June 30, 2022, the interest rate margin was reduced from 400 bps to 200 bps, and the borrowing capacity was voluntarily reduced to from $250.0 million to $80.0 million.
(4)The weighted average rate of the notes at September 30, 2021 is 1.49%, with rates on the individual classes of notes ranging from 1.28% to 5.42%.
(5)Interest was computed based on the lender’s cost of funds plus a margin of 300 bps. On June 30, 2021, the amortization date was extended to August 27, 2021. On August 26, 2021, the interest rate was reduced to the lender’s cost of funds plus a margin of 200 bps, the borrowing capacity was voluntarily reduced from $70.0 million to $40.0 million and the amortization date was extended to August 26, 2022.
(6)The weighted average interest rate, excluding the effect of the amortization of prepaid lender fees, is computed using the outstanding balance of each respective note and its interest rate at the financial statement date. At September 30, 2021 and December 31, 2020, the balance of unamortized prepaid lender fees was $1.8 million and $4.3 million, respectively, and are included in Other assets in our consolidated balance sheets.
Schedule of Mortgage Loan Warehouse, MSR Financing Facilities and SSTL
Mortgage Loan Warehouse FacilitiesAvailable Borrowing Capacity Outstanding Balance
Borrowing TypeCollateralInterest Rate (1)MaturityUncommittedCommitted (2)September 30, 2021December 31, 2020
Master repurchase agreement (3)Loans held for sale (LHFS)
1ML + 220 - 375 bps
June 2022$115,000 $61,282 $98,718 $195,773 
Master repurchase agreement (4)LHFS (forward and reverse)
1ML + 325 bps forward; 1ML + 350 bps reverse
Nov. 202150,000 124,385 75,615 80,081 
Master repurchase agreement (5)N/A
SOFR + 190 bps; SOFR floor 25 bps
N/A50,000 — — — 
Participation agreement (6)LHFS(6)June 2022203,609 — 96,391 — 
Master repurchase agreement (6)LHFS(6)June 2022— 100,000 — 63,281 
Master repurchase agreement (7)LHFS(7)June 2022— 1,000 — — 
Mortgage warehouse agreement (8)LHFS
1ML + 350 bps; Floor 5.25%
Jan. 2022— 37,681 12,319 11,715 
Mortgage warehouse agreement (9)LHFS (reverse)
1ML + 250 bps; 3.25% floor
Oct. 202128,929 — 146,071 73,134 
Mortgage warehouse agreement (10)LHFS(10)N/A34,962 — 165,038 27,729 
Master repurchase agreement (11)LHFS
1ML + 200 bps
N/A— — 465,018 — 
Loan and security agreement (12)HECM (ABO)
Prime Rate + 50 bps; Floor 450 bps
Apr. 2022— 20,000 10,000 — 
Master repurchase agreement (13)LHFS
1ML + 250 bps
Oct. 2021210,000 — — — 
Total mortgage loan warehouse facilities
2.77% (14)
$692,500 $344,348 $1,069,170 $451,713 
(1)1ML was 0.08% and 0.14% at September 30, 2021 and December 31, 2020, respectively. Prime Rate was 3.25% as at September 30, 2021.
(2)Of the borrowing capacity on mortgage loan warehouse facilities extended on a committed basis, $3.3 million of the available borrowing capacity could be used at September 30, 2021 based on the amount of eligible collateral that could be pledged.
(3)The maximum borrowing under this agreement is $275.0 million, of which $160.0 million is available on a committed basis and the remainder is available at the discretion of the lender. On March 31, 2021, we renewed the facility and the maturity date was extended to June 30, 2022.
(4)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.
(5)The lender provides financing for up to $50.0 million at the discretion of the lender. The agreement has no stated maturity date. Interest on this facility is based on the Secured Overnight Financing Rate (SOFR).
(6)On June 23, 2021, the facility was renewed for one year to June 23, 2022, the uncommitted borrowing capacity under the participation agreement was increased to $150.0 million and the committed borrowing capacity under the repurchase agreement increased to $100.0 million. The interest rate on repurchase agreement was revised to the stated interest rate of the mortgage loans, less 35 bps with a floor of 3.00% for new originations and less 10 bps with a floor of 3.25% for Ginnie Mae modifications, Ginnie Mae buyouts and RMBS bond clean up loans. The interest rate on the participation agreement was revised to the stated interest rate of the mortgage loans, less 35 bps with a floor of 3.00% for new originations. The agreements allow the lender to acquire a 100% beneficial interest in the underlying mortgage loans. On July 23, 2021, we temporarily increased the borrowing capacity under the participation agreement to $300.0 million until September 15, 2021. On September 14, 2021, the temporary increase in borrowing capacity was extended to November 15, 2021.
(7)On June 20, 2021, the facility was renewed for one year to June 23, 2022.
(8)Under this agreement, the lender provides financing for up to $50.0 million on a committed basis. On January 15, 2021, the maturity date of this facility was extended to January 15, 2022.
(9)Under this agreement, the lender provides financing for up to $150.0 million on an uncommitted basis. On February 1, 2021, the borrowing capacity was temporarily increased from $100.0 million to $150.0 million until February 28, 2021 when it was reduced to $100.0 million. On March 30, 2021, the borrowing capacity was temporarily increased to $150.0 million effective April 1, 2021 until April 29, 2021 when the increase was made permanent. On September 27, 2021, the borrowing capacity was increased to $175.0 million until maturity. On October 14, 2021, the maturity date of the facility was extended to November 23, 2021.
(10)On May 17, 2021, the total borrowing capacity of this facility, all of which is uncommitted, was increased from $100.0 million to $150.0 million through the addition of a $50.0 million participation interest. 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 and type of the collateral. On September 1, 2021, the total borrowing capacity of the facility was increased to $200.0 million.
(11)On March 29, 2021, we entered into a repurchase agreement which provides borrowing at our discretion up to a certain maximum amount of capacity on a rolling 30-day committed basis. This facility is structured as a gestation repurchase facility whereby dry Agency mortgage loans are transferred to a trust which trust issues a trust certificate that is pledged as the collateral for the borrowings. See Note 2 – Securitizations and Variable Interest Entities for additional information. On March 31, 2021, the trust issued the first certificate of $50.0 million which was increased to $75.0 million on May 28, 2021 and further increased to $225.0 million on July 29, 2021. The second trust certificate of $50.0 million was issued on April 12, 2021 and increased to $100.0 million on July 13, 2021. Additional trust certificates of $25.0 million and $100.0 million were issued for borrowing on June 25, 2021 and July 23, 2021, respectively, under this agreement. Each certificate is renewed monthly and we reduced the interest rate to 1ML + 200 bps during the monthly certificate renewals in July 2021.
(12)On April 29, 2021, we entered into a revolving facility agreement which provides up to $30.0 million of committed borrowing capacity secured by eligible HECM loans that are active buyouts (ABO), as defined in the agreement.
(13)On July 23, 2021, we entered into a repurchase agreement warehouse facility with borrowing capacity of $210.0 million. This facility expired in October 2021.
(14)Weighted average interest rate at September 30, 2021, excluding the effect of the amortization of prepaid lender fees. At September 30, 2021 and December 31, 2020, unamortized prepaid lender fees were $0.9 million and $2.0 million, respectively, and are included in Other assets in our consolidated balance sheets.
MSR financing facilities, netAvailable Borrowing CapacityOutstanding Balance
Borrowing TypeCollateralInterest Rate (1)MaturityUncommittedCommitted (2)September 30, 2021December 31, 2020
Agency MSR financing facility (3)MSRs, Advances
1ML + 325 bps
June 2022$— $75,702 $349,298 $210,755 
Ginnie Mae MSR financing facility (4)MSRs, Advances
1ML + 450 bps; 1ML floor 0.50%
Dec. 20216,937 — 118,063 112,022 
Ocwen Excess Spread-Collateralized Notes, Series 2019-PLS1 (5)MSRs5.07%Nov. 2024— — 48,243 68,313 
Secured Notes, Ocwen Asset Servicing Income Series, Series 2014-1 (6)MSRs(6)Feb. 2028— — 41,362 47,476 
Agency MSR financing facility - revolving loan (7)MSRs
1yr Swap + 2.50%
June 2026— 7,929 277,071 — 
Agency MSR financing facility - term loan (7)MSRs
1yr Swap + 2.50%
June 2023— — 112,779 — 
Total MSR financing facilities
3.68% (8)
6,937 83,631 946,816 438,566 
Unamortized debt issuance costs - PLS Notes and Agency MSR financing - term loan (9)(1,072)(894)
Total MSR financing facilities, net$945,744 $437,672 
(1)1ML was 0.08% and 0.14% at September 30, 2021 and December 31, 2020, respectively. 1-year swap rate was 0.19% and 0.19% at September 30, 2021 and December 31, 2020, respectively.
(2)Of the borrowing capacity on MSR financing facilities extended on a committed basis, none of the available borrowing capacity could be used at September 30, 2021 based on the amount of eligible collateral that could be pledged.
(3)PMC’s obligations under this facility are secured by a lien on the related MSRs. Ocwen guarantees the obligations of PMC under this facility. The maximum amount which we may borrow pursuant to the repurchase agreements is $425.0 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 2 – 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. On March 31, 2021, the facility was upsized to $350.0 million, the interest rate reduced to 1ML plus 325bps, and the maturity was renewed to June 30, 2022. These changes became effective on April 15, 2021. On June 2, 2021, the facility was temporarily upsized to $425.0 million for a period of 90 calendar days ending no later than September 1, 2021. On August 26, 2021 and later on October 25, 2021, the temporary upsize was extended until November 1, 2021.
(4)PMC’s obligations under this facility are secured by a lien on the related Ginnie Mae MSRs and advances. Ocwen guarantees the obligations of PMC under the facility. The borrowing capacity is $125.0 million on an uncommitted basis. See (3) above regarding daily margining requirements. On October 26, 2021, the borrowing capacity was increased to $150.0 million on an uncommitted basis.
(5)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 2 – Securitizations and Variable Interest Entities for additional information. See (3) above regarding daily margining requirements.
(6)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.
(7)On June 28, 2021, we entered into a facility which includes a $135.0 million term loan and a $285.0 million revolving loan secured by a lien on PMC’s Agency MSRs. See (3) above regarding daily margining requirements.
(8)Weighted average interest rate at September 30, 2021, excluding the effect of the amortization of debt issuance costs and prepaid lender fees.
(9)At September 30, 2021, unamortized debt issuance costs included $0.5 million and $0.6 million on the PLS Notes and the Agency MSR financing facility - term loan, respectively. At September 30, 2021 and December 31, 2020, unamortized prepaid lender fees related to revolving type MSR financing facilities were $5.7 million and $3.3 million, respectively, and are included in Other assets in our consolidated balance sheets.
Senior Secured Term Loan, netOutstanding Balance
Borrowing TypeCollateralInterest RateMaturitySeptember 30, 2021December 31, 2020
SSTL (1)(1)
1-Month Euro-dollar rate + 600 bps with a Eurodollar floor of 100 bps (1)
May 2022 (1)$— $185,000 
Unamortized debt issuance costs— (4,867)
Discount— (357)
$— $179,776 
(1)On March 4, 2021, we repaid in full the $185.0 million outstanding principal balance. The prepayment resulted in our recognition of an $8.4 million loss on debt extinguishment, including a prepayment premium of 2% of the outstanding principal balance, or $3.7 million.
Schedule of Senior Notes
Senior NotesInterest Rate (1)MaturityOutstanding Balance
September 30, 2021December 31, 2020
PMC Senior Secured Notes7.875%March 2026$400,000 $— 
OFC Senior Secured Notes
12% paid in cash or 13.25% paid-in-kind (see below)
March 2027285,000 — 
PHH Corporation (PHH) Senior Notes 6.375%August 2021— 21,543 
PMC Senior Secured Notes 8.375%November 2022— 291,509 
Principal balance685,000 313,052 
Discount (2)
PMC Senior Secured Notes(1,844)— 
OFC Senior Secured Notes (3)(55,638)— 
(57,482)— 
Unamortized debt issuance costs (2)
PMC Senior Secured Notes(5,966)(968)
OFC Senior Secured Notes(8,894)— 
(14,860)(968)
Fair value adjustments— (186)
$612,658 $311,898 
(1)Excluding the effect of the amortization of debt issuance costs and discount.
(2)The discount and debt issuance costs are amortized to interest expense through the maturity of the respective notes.
(3)Includes original issue discount (OID) and additional discount related to the concurrent issuance of warrants and common stock. See below for additional information.
Schedule of Redemption Prices
On or after March 15, 2023, PMC may redeem some or all of the PMC Senior Secured Notes at its option at the following redemption prices, plus accrued and unpaid interest, if any, on the notes redeemed to, but excluding, the redemption date if redeemed during the 12-month period beginning on March 15th of the years indicated below:
Redemption YearRedemption Price
2023103.938 %
2024101.969 
2025 and thereafter100.000