XML 48 R24.htm IDEA: XBRL DOCUMENT v3.25.0.1
Borrowings
 12 Months Ended
Dec. 31, 2024
Debt Disclosure [Abstract]  
Borrowings
Note 14 — Borrowings
Advance Match Funded Liabilities
Remaining Borrowing Capacity
Outstanding Balance at December 31,
Borrowing Type
Expected Repayment Date (1)
Uncommitted
Committed
20242023
$500 million Ocwen Master Advance Receivables Trust (OMART) - Advance Receivables Backed Notes - Series 2015-Variable Funding (VF)5 (2)
August 2025$50.0 $121.3 $328.7 $409.8 
$200 million Ocwen GSE Advance Funding (OGAF) - Advance Receivables Backed Notes, Series 2015-VF1 (2)
August 2025— 112.2 87.8 89.1 
$14.4 million EBO Advance facility (3)
May 202613.8 — 0.6 0.9 
Total Advance match funded liabilities$63.8 $233.5 $417.1 $499.7 
Weighted average interest rate (4)
7.25 %8.07 %
(1)The Expected Repayment Date of our facilities, as defined, is the date on which the revolving period ends under each advance facility note and repayment of the outstanding balance is required if the note is not renewed or extended. In certain of our advance facilities, there are multiple notes outstanding.
(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 December 31, 2024, none of the remaining borrowing capacity of the OMART and OGAF advance financing notes could be used based on the amount of eligible collateral.
(3)At December 31, 2024, none of the remaining borrowing capacity of the facility could be used based on the amount of eligible collateral.
(4)The weighted average interest rate excludes the effect of the amortization of prepaid lender fees. At December 31, 2024 and 2023, the balance of unamortized prepaid lender fees was $2.1 million and $5.5 million, respectively, and are included in Other assets in our consolidated balance sheets. At December 31, 2024 and 2023, 1-Month (1M) Term Secured Overnight Financing Rate (SOFR) was 4.33% and 5.35%, respectively.
Mortgage Loan Financing Facilities
Remaining Borrowing Capacity
Outstanding Balance at December 31,
Borrowing TypeCollateral Maturity
Uncommitted
Committed (1)20242023
Financing Agreements
$40 million Loan and security agreement (2)
 LHFI
February 2025— 40.0 ——
$500 million Master repurchase agreement (3)
LHFS and LHFI
March 2025250.0 11.5 238.5168.4 
$175 million Master repurchase agreement (4)
Loans held for sale (LHFS), Receivables and REO March 2025$125.0 $2.7 $47.3$15.7
$205 million Master purchase and servicing agreement (5)
LHFS and LHFIMay 202563.8 — 141.271.1 
Master repurchase agreement (6)
LHFSSeptember 2025— 1.0 — — 
$500 million Participation agreement (7)
LHFSSeptember 2025278.2 — 221.883.9
$250 million Master repurchase agreement (8)
LHFS, LHFI and receivables
September 2025— 119.3 130.764.2 
$40 million Loan and security agreement (9)
LHFI
September 2025— 29.2 10.8— 
Loan and Security Agreement (10)
LHFI and Servicing Advances
October 2026— 8.8 36.2— 
Securities Master repurchase agreement (11)
Reverse LHFS,
Receivables and REO		N/A6.6 — 10.0— 
$350 million Mortgage warehouse agreement (12)
LHFSN/A350.0 — — —
$230 million Mortgage warehouse agreement (13)
LHFS and Receivables
(13)
220.7 — 9.312.2 
Master repurchase agreement (14)
LHFS
(14)
— — 200.5151.7 
$200 million Master repurchase agreement (15)
LHFS,
Receivables and REO		April 2024— — —— 
$50 million Loan and security agreement (16)
LHFS and Receivables
June 2024
— — —— 
1,294.3 212.5 1,046.3 567.2 
Securitization Notes
OLIT Asset-Backed Notes, Series 2023-HB1 (17)
Reverse LHFS,
Receivables and REO		June 2036— — 107.3164.4 
OLIT Asset-Backed Notes, Series 2024-HB1 (17)
Reverse LHFS,
Receivables and REO		February 2037— — 160.9— 
OLIT Asset-Backed Notes, Series 2024-HB2 (17)
Reverse LHFS,
Receivables and REO		August 2037— — 249.1 — 
— — 517.3 164.4 
Total Mortgage loan financing facilities
$1,294.3 $212.5 1,563.6731.6
Unamortized discount and debt issuance costs - OLIT Notes(35.4)(21.0)
Total Mortgage loan financing facilities, net
$1,528.2$710.6
Weighted average interest rate (18)
5.46%6.15%
(1)Of the borrowing capacity on mortgage loan financing facilities extended on a committed basis, none of the remaining borrowing capacity could be used at December 31, 2024 based on the amount of eligible collateral that could be pledged on a committed basis.
(2)In December 2024, the maturity date was extended to February 28, 2025. We expect to extend the facility on or before maturity.
(3)In January 2025, the maturity date was extended to March 4, 2025.
(4)In February 2025, the maturity date was extended to March 31, 2025.
(5)In May 2024, the maturity date was extended to May 31, 2025 and the total maximum borrowing was increased to $205.0 million.
(6)In September 2024, the maturity date was extended to September 20, 2025.
(7)In September 2024, the maturity date was extended to September 20, 2025 and the total maximum borrowing under this agreement was temporarily increased to $500.0 million through December 31, 2024. In December 2024, the total maximum borrowing under this agreement was temporarily increased to $500.0 million through March 31, 2025.
(8)In September 2024, the maturity date was extended to September 20, 2025 and the total maximum borrowing under this agreement was increased to $250.0 million.
(9)In September 2024, the maturity date was extended to September 20, 2025 and the total maximum borrowing under this agreement was increased to $40.0 million.
(10)In October 2024, we entered into a Loan and Security Agreement with an entity managed by Waterfall pursuant to which PHH may borrow against certain eligible reverse mortgage assets, as defined, on a revolving basis for two years up to a maximum committed amount (“WAM Financing Agreement”). The maximum committed amount decreases from an initial $45.0 million to $15.0 million after the first securitization of HECM tails. The obligations of PHH under the Loan and Security Agreement are guaranteed by Onity. The maturity date of the facility is October 30, 2026.
(11)In June 2024, we entered into a repurchase agreement which provides borrowing at our discretion up to a certain maximum amount of capacity on a rolling 90-day uncommitted basis. This facility is structured as a repurchase facility whereby the retained notes of the OLIT 2023 and OLIT 2024 HB2 transactions are pledged as collateral for the borrowings and this agreement has no stated maturity date. Also see (17) below and Note 2 — Securitizations and Variable Interest Entities.
(12)This agreement has no stated maturity date.
(13)The agreement has no stated maturity date, however each transaction has a maximum duration of four years.
(14)This repurchase agreement provides borrowing at our discretion up to a certain maximum amount of capacity on a rolling 90-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. In April 2024, we increased the trust certificates by $50.0 million to $200.0 million. See Note 2 — Securitizations and Variable Interest Entities for additional information.
(15)In April 2024, we voluntarily allowed the facility to mature.
(16)In June 2024, we voluntarily allowed the facility to mature.
(17)In June 2023, February 2024 and September 2024, OLIT issued different classes of Asset-Backed Notes with an initial principal amount of $264.9 million, $268.6 million and $330.6 million at a discount and a mandatory call date of June 2026, February 2027 and August 2027, respectively. The notes have a stated interest rate of 3.0%, 3.0%, and 5.0%, respectively. Payments of interest and principal are made from available funds from a pool of reverse mortgage buyout loans and REOs in accordance with the indenture priority of payments. Also see Note 2 — Securitizations and Variable Interest Entities.
(18)The weighted average interest rate excludes the effect of the amortization of discount, debt issuance costs and prepaid lender fees. At December 31, 2024 and 2023, unamortized prepaid lender fees were $1.0 million and $1.0 million, respectively, and are included in Other assets in our consolidated balance sheets.
MSR Financing Facilities
Remaining Borrowing Capacity
Outstanding Balance at December 31,
Borrowing TypeCollateralMaturity
Uncommitted
Committed (1)20242023
$500 million GSE MSR financing facility (2)
MSRsSeptember 2025$— $84.9 $415.1$242.9
$300 million Ginnie Mae MSR financing facility (3)
MSRs, AdvancesFebruary 202555.3 — 244.7212.5
Ocwen Excess Spread-Collateralized Notes, Series 2022-PLS1 (4)MSRsFebruary 2025— — 25.639.2
2022-PLS1 Notes Issuer Membership Interest Master repurchase agreement (5)MSRsFebruary 2025— — ——
Secured Notes, Ocwen Asset Servicing Income Series Notes, Series 2014-1 (6)
MSRsFebruary 2028— — 23.128.1
$400 million GSE MSR financing facility - (7)
MSRsDecember 2026— 150.5 249.5393.9
Total MSR financing facilities$55.3 $235.4 $958.0 $916.6 
Unamortized debt issuance costs (8) - PLS facilities
(0.1)(0.4)
Total MSR financing facilities, net$957.9$916.2
Weighted average interest rate (8)
7.18%8.18%
(1)Of the borrowing capacity on MSR financing facilities extended on a committed basis, $57.1 million of the remaining borrowing capacity could be used at December 31, 2024 based on the amount of eligible collateral that could be pledged on a committed basis.
(2)PHH’s obligations under this facility are secured by a lien on certain related MSRs. Onity guarantees the obligations of PHH 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. In September 2024, the maturity date was extended to September 11, 2025 and the borrowing capacity was increased to $500.0 million. In January 2025, the borrowing capacity was increased to $650.0 million.
(3)PHH’s obligations under this facility are secured by a lien on the related Ginnie Mae MSRs and servicing advances. Onity guarantees the obligations of PHH under the facility. We are subject to daily margining requirements under the terms of the facility. In March 2024, the maturity date was extended to February 25, 2025 and the uncommitted borrowing capacity was increased to $300.0 million. We expect to refinance and extend the facility on or before maturity.
(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. Onity 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. We expect to refinance the facility into a repurchase agreement facility on or before maturity.
(5)On March 4, 2024, PHH entered into a $34.0 million repurchase agreement pursuant to which PHH sold the membership interest certificate representing 100% of the limited liability company interests in PLS Issuer and has agreed to repurchase such membership interest certificate at a specified future date at the price set forth in the repurchase agreement. Onity guarantees the obligations of PHH under the facility subject to the terms and conditions set forth in the guaranty. We are subject to daily margining requirements under the terms of the facility. In November 2024, the facility was repaid and voluntarily terminated prior to the contractual termination date of the facility of February 25, 2025. Refer to Note 2 — Securitizations and Variable Interest Entities for additional information regarding PLS Issuer and the PLS Notes.
(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)This facility is secured by a lien on certain of PHH’s Agency MSRs and is subject to daily margining requirements. Any outstanding borrowings on the revolving loan will convert into a term loan on February 27, 2025. With the redemption of the 7.875% PMC Senior Secured Notes in November 2024 (prior to the maturity date of March 15, 2026), the maturity date of this facility was automatically extended to December 28, 2026.
(8)Weighted average interest rate excludes the effect of the amortization of debt issuance costs and prepaid lender fees. At December 31, 2024 and 2023, unamortized prepaid lender fees related to revolving-type MSR financing facilities were $2.1 million and $3.6 million, respectively, and are included in Other assets in our consolidated balance sheets.
Senior Notes
Outstanding Balance at December 31,
Interest Rate (1)Maturity20242023
Senior Notes Due 2029
9.875%November 2029$500.0 $— 
PMC Senior Secured Notes7.875%March 2026— 360.0 
Onity Senior Secured Notes (due to related parties)
12% paid in cash or 13.25% paid-in-kind
March 2027— 285.0 
Principal balance500.0 645.0 
Discount (2)(2.2)— 
Unamortized debt issuance costs (2)(10.4)— 
Senior Notes Due 2029
(12.6)— 
Discount (2)— (0.9)
Unamortized debt issuance costs (2)— (3.0)
PMC Senior Secured Notes— (3.9)
Discount (2) (3)
— (39.1)
Unamortized debt issuance costs (2)— (6.2)
Onity Senior Secured Notes
— (45.3)
$487.4 $595.8 
(1)Excludes 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.
Issuance of 9.875% Senior Notes due 2029
On November 6, 2024, PHH Corporation issued $500.0 million aggregate principal amount of 9.875% Senior Notes due November 1, 2029 (Senior Notes Due 2029) at a price of 99.556% of the principal amount in a syndicated private placement. Interest on the Senior Notes is payable semi-annually in arrears on May 1 and November 1 of each year, beginning on May 1, 2025, and principal is due at maturity. The Senior Notes are guaranteed by Onity and certain wholly-owned subsidiaries including PMC (collectively “restricted subsidiaries”). The Senior Notes are secured by the equity interests of the restricted subsidiaries and any Available Cash in excess of Agency Requirements, as defined.
On or after November 1,2026, PHH Corporation may redeem some or all of the Senior Notes at its option at the following redemption prices, plus accrued and unpaid interest:
Redemption Year (12-month period beginning on November 1st of the years indicated below)
Redemption Price
2026104.938 %
2027102.469 
2028 and thereafter100.000 
Prior to November 1, 2026, PHH Corporation may redeem some or all of the Senior Notes at its option at a redemption price equal to 100% of the principal amount of the Notes being redeemed with a “make-whole” premium, as defined, plus accrued and unpaid interest. In addition, prior to November 1, 2026, PHH Corporation may redeem up to 40% of the aggregate principal amount of the Notes with the net cash proceeds from certain equity offerings by Onity at the redemption price equal to 109.875% of the principal amount plus accrued and unpaid interest.
The Indenture contains customary covenants for debt securities of this type that limit the ability of PHH Corporation, Onity and its restricted subsidiaries to, among other things, (i) incur or guarantee additional Indebtedness, as defined, (ii) incur liens, (iii) pay dividends on or make distributions or make other restricted payments, (iv) make investments, (v) consolidate, merge, sell or otherwise dispose of certain assets, and (vi) enter into transactions with certain affiliates.
Redemption of PMC 7.875% Senior Notes due 2026 and Onity 12% Senior Notes due 2027
The proceeds from the issuance of the Senior Notes Due 2029 described above, together with proceeds from the sale of MAV Canopy and available cash, were used to redeem in November 2024 all of the outstanding $289.1 million 7.875% PMC Senior Secured Notes due 2026 at a redemption price of 101.969% and the $285.0 million 12% Onity Senior Secured Notes due 2027 at a redemption price equal to 102.5% (with the exception of notes redeemed equal to the cash proceeds from the MAV Canopy sale which were redeemed at par). The redemption of all of the outstanding notes resulted in the recognition of a $53.4 million loss on debt extinguishment due to the accelerated write-off of $36.8 million unamortized discount and debt issuance costs, the payment of an $11.6 million make-whole redemption premium and a $5.0 million transaction fee to Oaktree. Also refer to Note 12 — Investment in Equity Method Investee and Related Party Transactions.
In addition, during 2024 (prior to their redemption), 2023 and 2022, we repurchased and extinguished a total principal amount of $70.9 million, $15.0 million and $25.0 million, respectively, of the PMC Senior Secured Notes, and recognized a gain of $4.1 million, $1.3 million and $0.9 million on debt extinguishment, net of the associated write-off of unamortized discount and debt issuance costs.
Credit Ratings
Credit ratings are intended to be an indicator of the creditworthiness of a company’s debt obligations. On October 21, 2024, Moody’s assigned a Caa1 rating to the new $500 million Senior Notes Due 2029. Moody’s also assigned a B3 corporate family rating to Onity and withdrew the B3 corporate family rating of PHH Mortgage Corporation. The entities’ outlooks are stable. On October 21, 2024, S&P assigned a B- rating to the new $500 million Senior Notes Due 2029. S&P also affirmed the B- rating of Onity with a Stable Outlook. 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 in effect as of December 31, 2024, 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 Onity 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 Onity and its subsidiaries or of PHH Corporation or PHH 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 Onity’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 December 31, 2024, excluding additional Agency minimum requirements, is a minimum of $275.0 million and $300.0 million tangible net worth for Onity and PHH, respectively. The most restrictive liquidity requirement under our debt agreements with borrowings outstanding at December 31, 2024, excluding additional Agency minimum requirements, is for a minimum of $75.0 million for both Onity and PHH consolidated liquidity. The minimum tangible net worth and liquidity requirements at PHH contained in some debt agreements are also subject to the minimum requirements set forth by the Agencies. See Note 25 — Regulatory Requirements.
As a result of the covenants to which we are subject, we may be limited in the manner in which we conduct our business and may be limited in our ability to engage in favorable business and investment activities or raise certain types of capital to finance future operations or satisfy future liquidity needs. In addition, breaches or events that may result in a default under our debt agreements include, among other things, nonpayment of principal or interest, noncompliance with our covenants, breach of representations, the occurrence of a material adverse change, insolvency, bankruptcy, certain material judgments and changes of control.
Covenants and default provisions of this type are commonly found in debt agreements such as ours. Certain of these covenants and default provisions are open to subjective interpretation and, if our interpretation was contested by a lender, a court may ultimately be required to determine compliance or lack thereof. In addition, our debt agreements generally include cross default provisions such that a default under one agreement could trigger defaults under other agreements. If we fail to
comply with our debt agreements and are unable to avoid, remedy or secure a waiver of any resulting default, we may be subject to adverse action by our lenders, including termination of further funding, acceleration of outstanding obligations, enforcement of liens against the assets securing or otherwise supporting our obligations and other legal remedies. Our lenders can waive their contractual rights in the event of a default.
We believe we were in compliance with all of the covenants in our debt agreements as of the date of these consolidated financial statements.
Collateral
Our assets pledged as collateral for secured borrowings are as follows at December 31, 2024. Assets may also be subject to other liens or restrictions under various agreements.
Asset Categories
AssetsPledged
Assets
Collateralized Financings (8)
Liability Categories
Cash (1)
$184.8 $— $— 
n/a (1)
Restricted cash (2)
80.8 40.4 — 
Multiple
Owned MSRs, excluding ESS (3)(5)
1,530.8 1,537.4 911.7 
MSR financing facilities
Transferred MSRs, including ESS (4)
935.4 935.4 846.9 
Other financing liabilities
Advances, net (5)
577.2 556.1 463.4 
Advance match funded liabilities and MSR financing facilities
Loans held for sale1,290.2 1,282.5 1,328.5 
Mortgage loan financing facilities
Loans held for investment - securitized (6)
10,950.8 10,950.8 10,872.1 
HMBS related borrowings
Loans held for investment - unsecuritized174.5 98.5 89.2 
Mortgage loan financing facilities
Receivables, net176.4 106.9 98.9 
Mortgage loan financing facilities
REO (Other assets)
43.9 40.0 47.0 
Mortgage loan financing facilities
Total (7)
$15,944.8 $15,548.0 $14,657.7 
(1)Includes $158.4 million Available Cash held by Regulated Subsidiary Guarantors, as defined, pursuant to the Senior Notes Due 2029.
(2)Pledged assets primarily include amounts specifically designated to repay debt and to provide over-collateralization for MSR financing facilities, mortgage loan financing facilities and match funded debt facilities (debt service accounts).
(3)Pledged assets exceed the MSR asset balance primarily due to the netting of certain PLS MSR portfolios with negative and positive fair values as eligible collateral.
(4)Includes MSRs transferred to MAV, Rithm and others, and ESS pledged MSRs that are accounted for as secured financings.
(5)$46.3 million drawn under the $300 million Ginnie Mae MSR financing facility is used to finance Ginnie Mae related advances.
(6)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 PHH’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 PHH in connection with certain claims relating to the performance and obligations of PHH as both issuer of HMBS and servicer of HECMs underlying HMBS
(7)The total of selected assets disclosed in the above table does not represent the total consolidated assets of Onity. For example, the total excludes premises and equipment and certain other assets.
(8)Amounts represent UPB and fair value for borrowings accounted for at amortized cost and fair value, respectively.
Maturities of Borrowings
Certain of our borrowings mature within one year of the date of issuance of these financial statements. Based on management’s evaluation, we expect to renew, replace or extend all such borrowings to the extent necessary to finance our business on or prior to their respective maturities consistent with our historical experience.
Expected Maturity/Repayment Date (1)
20252026202720282029ThereafterTotal
Balance		Fair
Value
Advance match funded liabilities$416.5 $0.6 $— $— $— $— $417.1 $417.1 
Mortgage loan financing facilities
1,010.1 143.5 410.0 — — — 1,563.6 1,535.3 
MSR financing facilities685.4 249.5 — 23.1 — 958.0 947.6 
Senior notes
— — — — 500.0 — 500.0 495.0 
$2,111.9 $393.7 $410.0 $23.1 $500.0 $— $3,438.7 $3,395.0 
(1)Amounts are exclusive of any related discount, unamortized debt issuance costs or fair value adjustment.
Our MSR financing facilities provide funding based on an advance rate of MSR value that is subject to periodic mark-to-market valuation adjustments. In the normal course, MSR value is expected to decline over time due to runoff of the loan balances in our servicing portfolio. As a result, we anticipate having to repay a portion of our MSR debt over a given time period. The requirements to repay MSR debt including those due to unfavorable fair value adjustment, for example due to a decline in market interest rates, may require us to allocate a substantial amount of our available liquidity or future cash flows to meet these requirements.