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Borrowings
 3 Months Ended
Mar. 31, 2023
Debt Disclosure [Abstract]  
Borrowings
Note 12 – Borrowings
Advance Match Funded Liabilities
Borrowing CapacityOutstanding Balance
Borrowing TypeMaturity Amort. Date (1)Total Available (2)March 31, 2023Dec. 31, 2022
Ocwen Master Advance Receivables Trust (OMART) - Advance Receivables Backed Notes - Series 2015-VF5
Aug. 2053Aug. 2023$450.0 $45.0 $405.0 $422.5 
Ocwen GSE Advance Funding (OGAF) - Advance Receivables Backed Notes, Series 2015-VF1
Aug. 2053Aug. 202390.0 26.1 63.9 90.0 
EBO Advance facility (3)May 2026NA14.4 13.4 1.0 1.2 
$554.4 $84.5 $469.9 $513.7 
Weighted average interest rate (4)7.65 %7.09 %
(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. 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)The committed borrowing capacity under the OMART and OGAF facilities is available to us provided that we have sufficient eligible collateral to pledge. At March 31, 2023, none of the available borrowing capacity of the OMART and OGAF advance financing notes could be used based on the amount of eligible collateral.
(3)We entered into a loan and security agreement to finance the acquisition of advances in connection with the early buyout of certain fixed-rate, fully-amortizing FHA-insured residential mortgage loans. At March 31, 2023, none of the available borrowing capacity of the facility could be used based on the amount of eligible collateral.
(4)The weighted average interest rate, excluding the effect of the amortization of prepaid lender fees. At March 31, 2023 and December 31, 2022, the balance of unamortized prepaid lender fees was $1.4 million and $2.3 million, respectively, and are included in Other assets in our consolidated balance sheets.
Mortgage Loan Warehouse FacilitiesAvailable Borrowing Capacity Outstanding Balance
Borrowing TypeCollateralMaturityUn-committedCommitted (1)March 31, 2023Dec. 31, 2022
$175 million Master repurchase agreement Loans held for sale (LHFS), Receivables and REOAug. 2023$47.8 $— $127.2 $142.2 
Master repurchase agreement (2)LHFS and Loans Held for Investment (LHFI)N/A— — — 100.3 
$50 million Mortgage warehouse agreement (3)LHFSN/A50.0 — — — 
$350 million Participation agreement LHFSJune 2023162.5 — 187.5 64.3 
$173 million Master repurchase agreement LHFS, LHFI and ReceivablesJune 2023— 110.1 62.9 26.1 
Master repurchase agreementLHFSJune 2023— 1.0 — — 
$50 million Mortgage warehouse agreement Reverse LHFS and LHFIJune 2023— 50.0 — 7.8 
$204 million Mortgage warehouse agreement (4)LHFS and LHFIMay 2023147.3 — 56.7 44.2 
$230 million Mortgage warehouse agreement (5)LHFS and Receivables(4)213.6 — 16.4 21.9 
Master repurchase agreement (6)LHFS(5)— — — — 
$50 million Loan and security agreement (7)LHFS and ReceivablesMarch 2024— 38.7 11.3 7.2 
$500 million Master repurchase agreement (8)LHFS and LHFIApril 202413.8 — 486.2 288.8 
 $635.0 $199.8 $948.3 $702.7 
Weighted average interest rate (9)6.27 %5.74 %
(1)Of the borrowing capacity on mortgage loan warehouse facilities extended on a committed basis, $14.9 million of the available borrowing capacity could be used at March 31, 2023 based on the amount of eligible collateral that could be pledged.
(2)On February 9, 2023, we voluntarily allowed the facility to mature.
(3)This agreement has no stated maturity date.
(4)In April 2023, the maturity date of this facility was extended to May 15, 2023.
(5)The agreement has no stated maturity date, however each transaction has a maximum duration of four years.
(6)This repurchase agreement 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 issues a trust certificate that is pledged as the collateral for the borrowings. Each certificate is renewed monthly and the interest rate for this facility is 1ML plus applicable margin. During 2022, we voluntarily reduced the trust certificates to $0.
(7)This revolving facility agreement provides committed borrowing capacity secured by eligible HECM loans that are active buyouts, as defined in the agreement. In April 2023, the maturity date of this facility was extended to March 31, 2024.
(8)In April 2023, the maturity date of this facility was extended to April 6, 2024.
(9)The weighted average interest rate excludes the effect of the amortization of prepaid lender fees. At March 31, 2023 and December 31, 2022, unamortized prepaid lender fees were $0.2 million and $0.5 million, respectively, and are included in Other assets in our consolidated balance sheets.
MSR Financing Facilities, netAvailable Borrowing CapacityOutstanding Balance
Borrowing TypeCollateralMaturityUn-committedCommitted (1)March 31, 2023Dec. 31, 2022
$450 million Agency MSR financing facility (2)MSRsJune 2023$— $159.7 $290.3 $309.8 
$200 million Ginnie Mae MSR financing facility (3)MSRs, AdvancesApril 202447.2 — 152.8 157.9 
Ocwen Excess Spread-Collateralized Notes, Series 2022-PLS1 (4)MSRsFeb. 2025— — 51.9 56.7 
Secured Notes, Ocwen Asset Servicing Income Series Notes, Series 2014-1 (5)MSRsFeb. 2028— — 32.1 33.4 
$400 million Agency MSR financing facility - revolving loan (6)MSRsDec. 2026— 11.9 388.1 396.8 
Total MSR financing facilities$47.2 $171.6 915.2 954.6 
Unamortized debt issuance costs - PLS Notes (7)(0.6)(0.8)
Total MSR financing facilities, net$914.6 $953.8 
Weighted average interest rate (8) 7.77%7.31%
(1)Of the borrowing capacity on MSR financing facilities extended on a committed basis, $1.9 million of the available borrowing capacity could be used at March 31, 2023 based on the amount of eligible collateral that could be pledged.
(2)PMC’s obligations under this facility are secured by a lien on the related MSRs. Ocwen guarantees the obligations of PMC under this facility. See Note 2 – Securitizations and Variable Interest Entities for additional information. We are subject to daily margining requirements under the terms of the facility.
(3)In connection with this facility, PMC entered into a repurchase agreement pursuant to which PMC has sold a participation certificate representing certain economic interests in the Ginnie Mae MSRs and servicing advances and has agreed to repurchase such participation certificate at a future date at the repurchase price set forth in the repurchase agreement. PMC’s obligations under this facility are secured by a lien on the related Ginnie Mae MSRs and servicing advances. Ocwen guarantees the obligations of PMC under the facility. See (2) above regarding daily margining requirements. In April 2023, the maturity date of this facility was extended to April 26, 2024.
(4)The single class PLS Notes are an amortizing debt instrument with an original principal amount of $75.0 million and a fixed interest rate of 5.114%. The PLS Notes are issued by a trust (PLS Issuer) that is included in our consolidated financial statements, and 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 principal balance amortizes in accordance with a predetermined schedule subject to modification under certain events, with a final payment due in February 2025. See Note 2 – Securitizations and Variable Interest Entities for additional information.
(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)This facility includes a revolving loan secured by a lien on certain of PMC’s Agency MSRs and is subject to daily margining requirements. Any outstanding borrowings on the revolving loan will convert into a term loan in November 2024.
(7)At March 31, 2023 and December 31, 2022, unamortized prepaid lender fees related to revolving type MSR financing facilities were $4.1 million and $4.9 million, respectively, and are included in Other assets in our consolidated balance sheets.
(8)Weighted average interest rate excluding the effect of the amortization of debt issuance costs and prepaid lender fees.
Senior NotesInterest Rate (1)MaturityOutstanding Balance
March 31, 2023December 31, 2022
PMC Senior Secured Notes (2)7.875%March 2026$375.0 $375.0 
OFC Senior Secured Notes (due to related parties) (3)
12% paid in cash or 13.25% paid-in-kind (see below)
March 2027285.0 285.0 
Principal balance660.0 660.0 
Discount
PMC Senior Secured Notes(1.2)(1.3)
OFC Senior Secured Notes (45.3)(47.3)
(46.5)(48.6)
Unamortized debt issuance costs
PMC Senior Secured Notes(4.0)(4.3)
OFC Senior Secured Notes(7.2)(7.5)
(11.2)(11.8)
$602.3 $599.6 
(1)Excluding the effect of the amortization of debt issuance costs and discount.
(2)Redeemable at 103.938% and 101.969% before March 15, 2024 and March 15, 2025, respectively, at par thereafter. The Indenture contains customary covenants that limit the ability of PHH Corporation (PHH) and its restricted subsidiaries (including PMC) to, among other things, (i) incur or guarantee additional indebtedness, (ii) incur liens, (iii) pay dividends on or make distributions in respect of PHH’s capital stock or make other restricted payments, (iv) make investments, (v) consolidate, merge, sell or otherwise dispose of certain assets, and (vi) enter into transactions with Ocwen’s affiliates.
(3)Redeemable at a make-whole premium prior to March 4, 2026, at par thereafter. The make-whole premium represents the present value of all scheduled interest payments due through March 4, 2026. The Notes are solely the obligation of Ocwen and are secured by a pledge of substantially all of the assets of Ocwen, including its directly held subsidiaries.
Credit Ratings
Credit ratings are intended to be an indicator of the creditworthiness of a company’s debt obligations. On January 24, 2023, S&P affirmed the issuer credit rating for Ocwen of “B-” and the “B” rating of the PMC Senior Secured Notes. On August 15, 2022, Moody’s affirmed PMC’s long-term corporate family ratings of Caa1 and revised their outlook to Positive from Stable. It is possible that additional actions by credit rating agencies could have a material adverse impact on our liquidity and funding position, including materially changing the terms on which we may be able to borrow money.
Covenants
Under the terms of our debt agreements, we are subject to various affirmative and negative covenants. Collectively, these covenants include:
•Financial covenants, including, but not limited to, specified levels of net worth, liquidity and leverage;
•Covenants to operate in material compliance with applicable laws;
•Restrictions on our ability to engage in various activities, including but not limited to incurring or guarantying additional forms of debt, paying dividends or making distributions on or purchasing equity interests of Ocwen and its subsidiaries, repurchasing or redeeming capital stock or junior capital, repurchasing or redeeming subordinated debt prior to maturity, issuing preferred stock, selling or transferring assets or making loans or investments or other restricted payments, entering into mergers or consolidations or sales of all or substantially all of the assets of Ocwen and its subsidiaries or of PHH or PMC and their respective subsidiaries, creating liens on assets to secure debt, and entering into transactions with affiliates;
•Monitoring and reporting of various specified transactions or events, including specific reporting on defined events affecting collateral underlying certain debt agreements; and
•Requirements to provide audited financial statements within specified timeframes, including requirements that Ocwen’s financial statements and the related audit report be unqualified as to going concern.
The most restrictive consolidated net worth requirement contained in our debt agreements with borrowings outstanding at March 31, 2023 is a minimum of $300.0 million tangible net worth for both Ocwen and PMC, as defined in certain of our mortgage warehouse, MSR financing and advance financing facilities agreements. The most restrictive liquidity requirement under our debt agreements with borrowings outstanding at March 31, 2023 is for a minimum of $75.0 million for both Ocwen
and PMC consolidated liquidity, as defined, under certain of our MSR financing facilities and mortgage warehouse agreements. The minimum tangible net worth and liquidity requirements at PMC are subject to the minimum requirement set forth by the Agencies. See also Note 18 – Regulatory Requirements.
We believe we were in compliance with all of the covenants in our debt agreements as of the date of these unaudited consolidated financial statements.
Collateral
Our assets held as collateral for secured borrowings and other unencumbered assets which may be subject to a lien under various collateralized borrowings are as follows at March 31, 2023:
AssetsPledged
Assets		Collateralized BorrowingsUnencumbered Assets (1)
Cash$216.6 $— $— $216.6 
Restricted cash39.3 39.3 — — 
Loans held for sale849.4 825.3 797.6 24.1 
Loans held for investment - securitized (2)7,545.2 7,545.2 7,470.6 — 
Loans held for investment - unsecuritized117.6 65.5 59.4 52.1 
MSRs (3)1,673.1 1,684.9 1,144.3 0.5 
Advances, net656.9 600.6 504.0 56.3 
Receivables, net200.2 87.9 86.1 112.3 
REO12.4 6.2 5.2 6.2 
Total (4)$11,310.7 $10,854.9 $10,067.2 $468.1 
(1)Certain assets are pledged as collateral to the PMC Senior Secured Notes and OFC Senior Secured (second lien) Notes.
(2)Reverse mortgage loans and real estate owned are pledged as collateral to the HMBS beneficial interest holders, and are not available to satisfy the claims of our creditors. Ginnie Mae, as guarantor of the HMBS, is obligated to the holders of the HMBS in an instance of PMC’s default on its servicing obligations, or if the proceeds realized on HECMs are insufficient to repay all outstanding HMBS related obligations. Ginnie Mae has recourse to PMC in connection with certain claims relating to the performance and obligations of PMC as both issuer of HMBS and servicer of HECMs underlying HMBS.
(3)Excludes MSRs transferred to MAV, Rithm and others, and associated Pledged MSR liability recorded as sale accounting criteria are not met. Pledged assets exceed the MSR asset balance due to the netting of certain PLS MSR portfolios with negative and positive fair values as eligible collateral.
(4)The total of selected assets disclosed in the above table does not represent the total consolidated assets of Ocwen. For example, the total excludes premises and equipment and certain other assets.
The OFC Senior Secured Notes due 2027 have a second lien priority on specified security interests, as defined under the OFC Senior Secured Note Agreement and listed in the table below, and have a priority lien on the following assets: investments by OFC in subsidiaries not guaranteeing the PMC Senior Secured Notes, including PHH and MAV; cash and investment accounts at OFC; and certain other assets, including receivables.
March 31, 2023
Specified net servicing advances$203.9
Specified deferred servicing fee4.4
Specified MSR value less borrowings632.7
Specified unrestricted cash balances124.1
Specified advance facility reserves15.9
Specified loan value108.8
Specified residual value—
Total $1,089.8