Commitments

3 Months Ended

Mar. 31, 2022


Note 20 — Commitments

Unfunded Lending Commitments

We have originated floating-rate reverse mortgage loans under which the borrowers have additional borrowing capacity of $1.7 billion at March 31, 2022. This additional borrowing capacity is available on a scheduled or unscheduled payment basis. During the three months ended March 31, 2022, we funded $56.4 million out of the $1.5 billion borrowing capacity as of December 31, 2021. We also had short-term commitments to lend $569.8 million and $47.8 million in connection with our forward and reverse mortgage loan IRLCs, respectively, outstanding at March 31, 2022. We finance originated and purchased forward and reverse mortgage loans with repurchase and participation agreements, referred to as warehouse lines.

HMBS Issuer Obligations

As an HMBS issuer, we are required to purchase loans out of the Ginnie Mae securitization pools once the outstanding principal balance of a reverse mortgage loan is equal to or greater than 98% of the maximum claim amount (MCA repurchases), or when they become inactive (the borrower is deceased, no longer occupies the property or is delinquent on tax and insurance payments). Our subservicing clients bear the financial obligation and risks associated with purchasing loans out of securitization pools within the portfolio we subservice.

Activity with regard to HMBS repurchases, primarily MCA repurchases, are as follows:


	Three Months Ended March 31, 2022
	Active			Inactive			Total
	Number	Amount		Number	Amount		Number	Amount
Beginning balance	138	$	35,322	448	$	93,813	586	$	129,135
Additions	132	33,689		61	13,635		193	47,324
Recoveries, net (1)	(41)	(10,829)		(43)	(9,399)		(84)	(20,228)
Transfers	(8)	(1,837)		8	1,837		—	—
Changes in value	—	—		—	(1,089)		—	(1,089)
Ending balance	221	$	56,345	474	$	98,797	695	$	155,142

(1)Includes amounts received upon assignment of loan to HUD, loan payoff, REO liquidation and claim proceeds less any amounts charged off as unrecoverable.

NRZ Relationship

Our Servicing segment has exposure to concentration risk and client retention risk. As of March 31, 2022, our servicing portfolio included significant client relationships with NRZ which represented 19% and 30% of our servicing portfolio UPB and loan count, respectively, and approximately 68% of all delinquent loans that Ocwen services. Our Subservicing Agreements and Servicing Addendum with NRZ are in their Initial Terms that end in July 2022. Each of the agreements will automatically renew to July 2023, unless NRZ terminates or does not extend the terms as described below. At any time during the Initial Term, subject to proper notice (generally 180 days’ notice), the payment of termination fees and certain other provisions, NRZ has the rights to terminate the Subservicing Agreements and Servicing Addendum for convenience. Since NRZ did not provide a notice of termination in January 2022, 180 days’ prior to the end of the Initial Term, termination fees are no longer payable if NRZ provides a 180-day notice of termination before the end of the Initial Term, although NRZ will be required to pay deboarding fees that would cover Ocwen’s servicing transfer costs related to the effective date of termination that falls after the Initial Term. Following the Initial Term ending July 2022, NRZ may extend the term of the Subservicing Agreements and Servicing Addendum for additional three-month periods by providing proper notice. Absent any notice of extension, each of the agreements will terminate at the end of its Initial Term in July 2022 or the end of any three-month extended term. If NRZ exercised all or a significant portion of these termination rights, we might need to right-size certain aspects of our servicing business as well as the related corporate support functions. Receivables and Other liabilities recorded on our consolidated balance sheets as well as the impacts to our consolidated statements of operations in connection with our NRZ agreements are disclosed in Note 8 — MSR Transfers Not Qualifying for Sale Accounting. See further information related to the extension of the agreements with NRZ in Note 22 – Subsequent Events.