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Commitments | 9 Months Ended
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Sep. 30, 2023
Other Commitments [Abstract] |
Commitments |
Note 19 — Commitments
Unfunded Lending Commitments We have originated floating-rate reverse mortgage loans under which the borrowers have additional borrowing capacity of $1.8 billion at September 30, 2023. This additional borrowing capacity is available on a scheduled or unscheduled payment basis. During the nine months ended September 30, 2023, we funded $198.6 million out of the $1.8 billion borrowing capacity as of December 31, 2022. We also had short-term commitments to lend $916.9 million and $20.2 million in connection with our forward and reverse mortgage loan IRLCs, respectively, outstanding at September 30, 2023. 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 assume certain obligations related to each security issued. The most significant obligation is the requirement 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). The table below provides the breakdown of the portfolio UPB with respect to the percentage of the MCA at September 30, 2023.
Securitized HECM loans at less than 92% MCA | $ | 7,053.3 |
Securitized HECM loans at equal to or greater than 92% and less than 95% MCA | 211.9 |
Securitized HECM loans at equal to or greater than 95% MCA and less than 98% MCA | 222.9 |
Total Securitized HECM loans UPB | $ | 7,488.1 |
For the nine months ended September 30, 2023 and 2022, we repurchased loans from Ginnie Mae securitizations in the amount of $224.9 million and $154.3 million, respectively. Activity with regard to HMBS repurchases for the nine months ended September 30, 2023 is as follows:
|  |  | Active |  |  |  | Inactive |  |  | Total
Beginning balance |  |  | $ | 70.7 |  |  |  |  | $ | 107.7 |  |  |  |  | $ | 178.4 |
Additions |  |  | 159.3 |  |  |  |  | 65.6 |  |  |  |  | 224.9 |
Recoveries, net (1) |  |  | (187.9) |  |  |  |  | (42.2) |  |  |  |  | (230.1) |
Transfers |  |  | 3.8 |  |  |  |  | (3.8) |  |  |  |  | — |
Changes in value |  |  | 0.3 |  |  |  |  | (3.4) |  |  |  |  | (3.2) |
Ending balance |  |  | $ | 46.2 |  |  |  |  | $ | 123.9 |  |  |  |  | $ | 170.0 |
(1)Includes amounts received upon assignment of loan to HUD, loan payoff, REO liquidation and claim proceeds less any amounts charged off as unrecoverable. Our subservicing clients bear the financial obligation and risks associated with purchasing loans out of securitization pools within the portfolio we subservice. Client Concentration Our Servicing segment has exposure to concentration risk and client retention risk. For the nine months ended September 30, 2023, servicing and subservicing fees from Rithm amounted to $175.1 million, or 32% of total servicing and subservicing fees (excluding ancillary income). As of September 30, 2023, our servicing portfolio included a significant client relationship with Rithm which represented 16% and 26% of our total servicing portfolio UPB and loan count, respectively, and approximately 68% of all delinquent loans that Ocwen services. Our Subservicing Agreements and Servicing Addendum with Rithm are in their second terms that end December 31, 2023, but they provide for automatic one-year renewals, unless Ocwen (by July 1, 2023) or Rithm (by October 1, 2023) provide advance notice of termination. Ocwen did not provide notice of termination on July 1, 2023. Ocwen and Rithm agreed to extend certain of Rithm’s termination rights through November 1, 2023. Rithm did not provide notice of termination on November 1, 2023. Accordingly, the servicing agreements with Rithm are extended through December 31, 2024, with subsequent, automatic one-year renewals. If Rithm exercises its right to terminate all or some of the agreements (for convenience by October 2024 or for cause at any time), we might need to right-size certain aspects of our servicing business as well as the related corporate support functions, and we may need to adjust our daily liquidity management due to the reduction of servicing float balances associated with the Rithm servicing agreements. The impacts to our consolidated statements of operations in connection with our Rithm agreements are disclosed in Note 8 — Other Financing Liabilities, at Fair Value. Receivables and Other liabilities recorded on our consolidated balance sheets are disclosed in Note 9 – Receivables and Note 13 – Other Liabilities, respectively. In addition, for the nine months ended September 30, 2023, servicing and subservicing fees from MAV amounted to $54.9 million or 10% of total servicing and subservicing fees (excluding ancillary income). As of September 30, 2023, our servicing portfolio with MAV represented 19% and 15% of our total servicing portfolio UPB and loan count, respectively. While our servicing agreement with MAV is non-cancellable and provides us with exclusivity, MAV is permitted to sell the underlying MSR without Ocwen’s consent after May 3, 2024. See Note 10 - Investment in Equity Method Investee and Related Party Transactions and Note 8 — Other Financing Liabilities, at Fair Value.

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- Definition The entire disclosure for significant arrangements with third parties, which includes operating lease arrangements and arrangements in which the entity has agreed to expend funds to procure goods or services, or has agreed to commit resources to supply goods or services, and operating lease arrangements. Descriptions may include identification of the specific goods and services, period of time covered, minimum quantities and amounts, and cancellation rights. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 440 -URI https://asc.fasb.org/topic&trid=2144648 + Details
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