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Gain (loss) on debt redemption

(133,049)

(116,885)

(409,129)

(319,564)

1,282

2,609

(12,556)

Other, net

2,124

14,797

9,115

Total other expense, net

(130,925)

(115,535)

(391,723)

(323,005)

Income (loss) before income taxes

(72,266)

69,445

76,614

198,895

Income tax expense (benefit)

2,992

8,873

24,374

23,752

Net income (loss)

(75,258)

60,572

52,240

175,143

Net income attributable to non-controlling interests

(123)

(165)

Net income (loss) attributable to Ocwen stockholders

(75,381)

60,572

52,075

175,143

Preferred stock dividends

(1,446)

(1,163)

(4,450)

Deemed dividends related to beneficial conversion feature of preferred stock

(808)

(4,401)

(1,639)

(6,573)

Net income (loss) attributable to Ocwen common stockholders

$ (76,189)

$ 54,725

$ 49,273

$ 164,120

Earnings (loss) per share attributable to Ocwen common stockholders

Basic (in USD per share)

$ (0.58)

$ 0.40

$ 0.37

$ 1.21

Diluted (in USD per share)

$ (0.58)

$ 0.39

$ 0.36

$ 1.17

Weighted average common shares outstanding

Basic (in shares)

130,551,197

135,787,834

133,318,381

135,705,892

Diluted (in shares)

^[1]

130,551,197

140,057,195

136,881,326

139,747,490

[1]	For the three months ended September 30, 2014, we have excluded the effect of the Preferred Shares, stock options and common stock awards from the computation of diluted EPS because of the anti-dilutive effect of our reported net loss.

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($)
$ in Thousands

3 Months Ended

9 Months Ended

Sep. 30, 2014

Sep. 30, 2013

Sep. 30, 2014

Sep. 30, 2013

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) [Abstract]

Net income (loss)

$ (75,258)

$ 60,572

$ 52,240

$ 175,143

Other comprehensive income (loss), net of income taxes:

Change in deferred loss on cash flow hedges arising during the year

^[1]

(7,537)

Reclassification adjustment for losses on cash flow hedges included in net income

^[2]

384

4,714

1,362

6,198

Net change in deferred loss on cash flow hedges

384

4,714

1,362

(1,339)

Total other comprehensive income (loss), net of income taxes

711

386

4,745

1,367

(628)

Comprehensive income (loss)

(74,872)

65,317

53,607

174,515

Comprehensive income attributable to non-controlling interests

(121)

(165)

Comprehensive income (loss) attributable to Ocwen stockholders

$ (74,993)

$ 65,317

$ 53,442

$ 174,515

[1]	Net of tax benefit of $4.8 million for the nine months ended September 30, 2013.
[2]	Net of tax expense of $3.1 million for the three months ended September 30, 2013 and $0.2 million and $3.9 million for the nine months ended September 30, 2014 and 2013, respectively. These losses are reclassified to Other, net in the unaudited Consolidated Statements of Operations. See Note 15 – Derivative Financial Instruments and Hedging Activities for additional information.

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) [Abstract]
Income tax benefit			$ 4.8
Income tax expense	$ (3.1)	$ (0.2)	$ (3.9)

UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Thousands	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Noncontrolling Interest [Member]
Beginning Balance at Dec. 31, 2012	$ 1,611,422	$ 1,356	$ 911,942	$ 704,565	$ (6,441)
Beginning Balance (in shares) at Dec. 31, 2012		135,637,932
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	175,143			175,143
Preferred stock dividends	(4,450)			(4,450)
Deemed dividends related to beneficial conversion feature of preferred stock	(6,573)			(6,573)
Conversion of preferred stock	100,000	$ 31	99,969
Conversion of preferred stock (in shares)		3,145,640
Repurchase of common stock	(157,880)	$ (31)	(157,849)
Repurchase of common stock (in shares)		(3,145,640)
Exercise of common stock options	(186)	$ 2	(188)
Exercise of common stock options (in shares)		172,969
Equity-based compensation and other	10,849		10,849
Equity-based compensation (in shares)		12,031
Other comprehensive income (loss), net of income taxes	(628)				(628)
Ending Balance at Sep. 30, 2013	1,727,697	$ 1,358	864,723	868,685	(7,069)	0
Ending Balance (in shares) at Sep. 30, 2013		135,822,932
Beginning Balance at Dec. 31, 2013	$ 1,812,591	$ 1,352	818,427	1,002,963	(10,151)	0
Beginning Balance (in shares) at Dec. 31, 2013	135,176,271	135,176,271
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	$ 52,240			52,075		165
Preferred stock dividends	(1,163)			(1,163)
Deemed dividends related to beneficial conversion feature of preferred stock	(1,639)			(1,639)
Conversion of preferred stock	62,000	$ 20	61,980
Conversion of preferred stock (in shares)		1,950,296
Repurchase of common stock	$ (325,609)	$ (99)	(325,510)
Repurchase of common stock (in shares)	(7,970,353)	(9,920,649)
Exercise of common stock options	$ 1,038	$ 2	1,036
Exercise of common stock options (in shares)		244,000
Equity-based compensation and other	11,092		11,092
Equity-based compensation (in shares)		17,887
Non-controlling interest in connection with the acquisition of a controlling interest in Ocwen Structured Investments, LLC	2,526					2,526
Other comprehensive income (loss), net of income taxes	1,367				1,367
Ending Balance at Sep. 30, 2014	$ 1,614,443	$ 1,275	$ 567,025	$ 1,052,236	$ (8,784)	$ 2,691
Ending Balance (in shares) at Sep. 30, 2014	127,467,805	127,467,805.000

UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Parenthetical) - $ / shares	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Statement of Stockholders' Equity [Abstract]
Preferred stock dividends (in USD per share)	$ 18.75	$ 27.92

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Thousands

3 Months Ended

9 Months Ended

20 Months Ended

Sep. 30, 2014

Sep. 30, 2013

Sep. 30, 2014

Sep. 30, 2013

Sep. 30, 2014

Cash flows from operating activities

Net income

$ (75,258)

$ 60,572

$ 52,240

$ 175,143

Adjustments to reconcile net income to net cash provided by operating activities:

Amortization of mortgage servicing rights

60,783

79,183

186,075

197,435

Depreciation

16,601

17,153

Provision for bad debts

49,583

22,386

Gain on sale of loans

(27,218)

(28,262)

(110,041)

(72,912)

Realized and unrealized losses on derivative financial instruments

1,955

12,896

(Gain) loss on extinguishment of debt

(1,282)

(2,609)

12,556

Loss (gain) on valuation of mortgage servicing rights, at fair value

13,147

(11,725)

Decrease (increase) in deferred tax assets, net

35,884

(2,393)

Origination and purchase of loans held for sale

(6,007,152)

(7,072,260)

Proceeds from sale and collections of loans held for sale

6,013,059

7,006,883

Changes in assets and liabilities:

Decrease in advances and match funded advances

236,688

424,008

(Increase) decrease in receivables and other assets, net

(11,806)

265,554

(Decrease) increase in other liabilities

46,243

27,783

Other, net

39,148

1,723

Net cash provided by operating activities

559,015

1,004,230

Distributions of capital from unconsolidated entities

6,572

1,300

Purchase of mortgage servicing rights, net

(19,395)

(676,750)

Acquisition of advances in connection with the purchase of mortgage servicing rights

(84,373)

(445,478)

Acquisition of advances in connection with the purchase of loans

(60,482)

Proceeds from sale of advances and match funded advances

3,492,489

Net proceeds from sale of diversified fee-based businesses to Altisource Portfolio Solutions, SA

215,700

Proceeds from sale of mortgage servicing rights

287

21,511

Origination of loans held for investment – reverse mortgages

(565,670)

(274,081)

Principal payments received on loans held for investment - reverse mortgages

56,193

2,164

Additions to premises and equipment

(7,716)

(24,475)

Net cash (used in) provided by investing activities

4,270

2,947

(732,368)

50,037

Cash flows from financing activities

Repayment of match funded liabilities

(329,175)

(2,169,732)

Proceeds from other secured borrowings

4,352,495

7,935,374

Repayments of other secured borrowings

(4,532,029)

(7,166,050)

Proceeds from issuance of senior unsecured notes

350,000

Payment of debt issuance costs

(6,835)

(25,547)

Proceeds from sale of mortgage servicing rights accounted for as a financing

123,551

404,509

Proceeds from sale of loans accounted for as a financing

572,031

272,652

Proceeds from sale of advances accounted for as a financing

88,095

Repurchase of common stock

(325,609)

(157,880)

Payment of preferred stock dividends

(1,163)

(4,534)

Net cash provided by (used in) financing activities

2,643

(5,703)

294,004

(916,911)

Net increase in cash

120,651

137,356

Cash at beginning of year

178,512

220,130

Cash at end of period

299,163

357,486

299,163

357,486

$ 299,163

Supplemental non-cash investing and financing activities

Conversion of Series A preferred stock to common stock

62,000

100,000

Cash paid to acquire business

(54,220)

(2,260,830)

Purchase of mortgage servicing rights, net

(54,200)

Fair value of assets acquired

Mortgage servicing rights

^[1]

(1,786,409)

^[1]

(401,314)

^[1]

(16,423)

^[1]

(211,419)

Fair value of assets acquired, total

^[1]

(2,989)

^[1]

(2,418,554)

Fair value of liabilities assumed

Accrued expenses and other liabilities

^[1]

74,625

Ocwen Structured Investments, LLC (OSI) [Member]

^[1]

(2,343,929)

Amount due to seller

^[1],[2]

$ 83,099

83,099

Cash paid

^[1]

2,260,830

^[1]

$ 174,600

Cash paid to acquire business

(7,834)

Liberty Acquisition [Member]

Cash paid to acquire business

(26,568)

Correspondent One [Member]

Net cash acquired in acquisition

$ 0

$ 22,108

[1]	See Note 3 – Business Acquisitions for information regarding the acquisitions of Ocwen Structured Investments, LLC and Correspondent One S.A. during the three months ended March 31, 2014 and 2013, respectively.
[2]	Amount due to seller includes $54.2 million paid in 2014 for certain mortgage servicing rights and related servicing advances which we were obligated to acquire that were not settled as part of the initial closing.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) $ in Thousands	9 Months Ended
	Sep. 30, 2014 USD ($)
Purchase of mortgage servicing rights, net	$ 19,395
ResCap [Member]
Purchase of mortgage servicing rights, net	$ 54,200

Description of Business and Basis of Presentation

9 Months Ended

Sep. 30, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Description of Business, Basis of Presentation and Summary of Significant Accounting Policies

Note 1 – Description of Business and Basis of Presentation

Organization

Ocwen Financial Corporation (NYSE: OCN) (Ocwen, we, us and our) is a financial services holding company which, through its subsidiaries, is engaged in the servicing and origination of forward and reverse mortgage loans. Ocwen is headquartered in Atlanta, Georgia with offices throughout the United States (U.S.) and in the United States Virgin Islands (USVI) with support operations in India, the Philippines and Uruguay. Ocwen is a Florida corporation organized in February 1988.

Ocwen owns all of the common stock of its primary operating subsidiary, Ocwen Mortgage Servicing, Inc. (OMS), and directly or indirectly owns all of the outstanding stock of its other primary operating subsidiaries: Ocwen Loan Servicing, LLC (OLS), Ocwen Financial Solutions Private Limited, Homeward Residential, Inc. (Homeward), and Liberty Home Equity Solutions, Inc. (Liberty).

In 2013, we completed acquisitions of mortgage servicing rights (MSRs) and servicing advances from, among others, OneWest Bank, FSB (OneWest MSR Transaction) and Ally Bank, a wholly-owned subsidiary of Ally Financial Inc. (Ally), the indirect parent of Residential Capital, LLC (ResCap) (Ally MSR Transaction), and acquisitions of servicing and origination platforms, including Liberty Home Equity Solutions, Inc. (Liberty) through a stock purchase agreement (Liberty Acquisition) and certain assets and operations of ResCap pursuant to a plan under Chapter 11 of the Bankruptcy Code (ResCap Acquisition). See Note 3 – Business Acquisitions and Note 8 – Mortgage Servicing for additional information.

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in conformity with the instructions of the Securities and Exchange Commission (SEC) to Form 10-Q and SEC Regulation S-X, Article 10, Rule 10-01 for interim financial statements. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (GAAP) for complete financial statements. In our opinion, the accompanying unaudited consolidated financial statements contain all adjustments, consisting only of normal recurring accruals, necessary for a fair presentation. The results of operations and other data for the three and nine months ended September 30, 2014 are not necessarily indicative of the results that may be expected for any other interim period or for the year ending December 31, 2014. The unaudited consolidated financial statements presented herein should be read in conjunction with the audited consolidated financial statements and related notes thereto included in Amendment 1 to our Annual Report on Form 10-K for the year ended December 31, 2013.

Reclassifications

Within the Assets section of the Consolidated Balance sheet at December 31, 2013, we reclassified Debt service accounts of $129.9 million to Other assets to conform to the current year presentation.

Certain insignificant amounts in the unaudited Consolidated Statements of Cash Flows for the nine months ended September 30, 2013 have been reclassified to conform to the current year presentation. These reclassifications had no impact on our consolidated cash flows from operating, investing or financing activities.

Use of Estimates and Assumptions

The preparation of financial statements in conformity with GAAP requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, the reported amounts of revenues and expenses during the reporting period and the related disclosures in the accompanying notes. Such estimates and assumptions include, but are not limited to, those that relate to fair value measurements, the provision for potential losses that may arise from litigation proceedings, representation and warranty and other indemnification obligations and the valuation of goodwill. In developing estimates and assumptions, management uses all available information; however, actual results could materially differ because of uncertainties associated with estimating the amounts, timing and likelihood of possible outcomes.

Change in Accounting Estimate

For servicing assets or liabilities that we account for using the amortization method, we amortize the balances in proportion to, and over the period of, estimated net servicing income (if servicing revenues exceed servicing costs) or net servicing loss (if servicing costs exceed servicing revenues). We determine estimated net servicing income using the estimated future balance of the underlying mortgage loan portfolio, which, absent new purchases, declines over time from prepayments and scheduled loan amortization. We adjust MSR amortization prospectively in response to changes in estimated projections of future cash flows. As a result of the significant growth and change in composition of our servicing portfolio, we determined that the estimated net servicing income has increased, primarily as a result of lower actual prepayment speeds. We accounted for this change in MSR amortization as a change in an accounting estimate beginning January 1, 2014. This change had the effect of reducing amortization expense and increasing both net income and earnings per share in our unaudited Consolidated Statements of Operations for the three and nine months ended September 30, 2014 as follows:



	Three Months			Nine Months
Reduction in Amortization of mortgage servicing rights	$	(21,309	)	$	(69,244	)

Increase in Net income attributable to Ocwen common stockholders	$	14,920		$	48,485

Increase in Earnings per share attributable to Ocwen common stockholders:
Basic	$	0.11		$	0.36
Diluted	$	0.11		$	0.35

Recently Issued Accounting Standards

Accounting for Investments in Qualified Affordable Housing Projects (ASU 2014-01)

In January 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-01. The amendments in this ASU permit an entity to make an accounting policy election to account for investments in qualified affordable housing projects using the proportional amortization method, if certain conditions are met. Under the proportional amortization method, an entity amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received and while recognizing the net investment performance in the statement of operations as a component of income tax expense (benefit).

ASU 2014-01 will be effective for us on January 1, 2015 with early adoption permitted. We are currently evaluating the effect of adopting this standard effective January 1, 2015, but we do not anticipate that our adoption will have a material impact on our consolidated financial condition or results of operations.

Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure (ASU 2014-04)

In January 2014, the FASB issued ASU 2014-04. This ASU clarifies when an in substance repossession or foreclosure occurs such that the loan receivable should be derecognized and the real estate property recognized. An in substance repossession or foreclosure occurs upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement.

ASU 2014-04 requires interim and annual disclosure of both (1) the amount of foreclosed residential real estate property held by the creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction.

ASU 2014-04 will be effective for us on January 1, 2015 with early adoption permitted. An entity can elect to adopt the amendments using either a modified retrospective transition method or a prospective transition method. We are currently evaluating the effect of adopting this standard effective January 1, 2015, but we do not anticipate that our adoption will have a material impact on our consolidated financial condition or results of operations.

Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity (ASU 2014-08)

In April 2014, the FASB issued ASU 2014-08. ASU 2014-08 changes the criteria for reporting discontinued operations. Under this ASU, a discontinued operation is defined as a disposal of a component or group of components that is disposed of or is classified as held for sale and represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. A strategic shift could include a disposal of (i) a major geographical area of operations, (ii) a major line of business, (iii) a major equity method investment, or (iv) other major parts of an entity. A business activity that upon acquisition qualifies as held for sale will also be a discontinued operation. The new standard no longer precludes presentation as a discontinued operation if (i) there are operations and cash flows of the component that have not been eliminated from the reporting entity’s ongoing operations, or (ii) there is significant continuing involvement with a component after its disposal.

New disclosures under this ASU include the requirement to present in the statement of cash flows or disclose in a note either (i) total operating and investing cash flows for discontinued operations, or (ii) depreciation, amortization, capital expenditures, and significant operating and investing noncash items related to discontinued operations. Assets and liabilities of a discontinued operation that are classified as held for sale or disposed of in the current period must be reclassified for the comparative periods presented in the balance sheet.

ASU 2014-08 will be effective for us on January 1, 2015. The guidance applies prospectively to new disposals and new classifications of disposal groups as held for sale after the effective date. We are currently evaluating the effect of adopting this standard effective January 1, 2015, but we do not anticipate that our adoption will have a material impact on our consolidated financial condition or results of operations.

Revenue from Contracts with Customers (ASU 2014-09)

In May 2014, the FASB issued ASU 2014-09 to clarify the principles for recognizing revenue and to develop a common revenue standard. Under this new standard, an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. An entity should recognize revenue through the following five-step process:

Step 1: Identify the contract(s) with a customer.

Step 2: Identify the performance obligations in the contract.

Step 3: Determine the transaction price.

Step 4: Allocate the transaction price to the performance obligations in the contract.

Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.

This standard will also require enhanced disclosures. Qualitative and quantitative information is required regarding (i) contracts with customers-including revenue and impairments recognized, disaggregation of revenue, and information about contract balances and performance obligations, (ii) significant judgments and changes in judgments-determining the timing of satisfaction of performance obligations and determining the transaction price and amounts allocated to performance obligations and (iii) assets recognized from the costs to obtain or fulfill a contract.

ASU 2014-09 will be effective for us on January 1, 2017. Early application is not permitted. An entity should apply the amendments in this ASU either retrospectively to each prior reporting period presented or retrospectively with the cumulative effect recognized at the date of initial application.

The guidance in this standard does not apply to financial instruments and other contractual rights or obligations within the scope of ASC 860, Transfers and Servicing. We are currently evaluating the effect of adopting this standard.

Repurchase-to-Maturity Transactions, Repurchase Financings and Disclosures (ASU 2014-11)

In June 2014, the FASB issued ASU 2014-11. The amendments in this ASU require changes in the accounting for repurchase-to-maturity transactions and repurchase to financing arrangements. A repurchase-to-maturity transaction (repurchase agreement that matures at the same time as the transferred financial asset) will now be accounted for as a secured borrowing. For a repurchase financing arrangement (a type of repurchase agreement), a transfer of a financial asset executed contemporaneously with a repurchase agreement with the same counterparty will be accounted for separately, which will result in secured borrowing accounting for the repurchase agreement. Transferors will no longer apply the “linked” accounting model.

The amendments in this ASU also include enhanced disclosure requirements. An entity will be required to disclose information about certain transactions accounted for as a sale in which the transferor retains substantially all of the exposure to the economic return on the transferred financial assets through an agreement with the same counterparty. An entity also will be required to disclose information about repurchase agreements, securities lending transactions and repurchase-to-maturity transactions that are accounted for as secured borrowings.

The accounting changes in ASU 2014-11 will be effective for us on January 1, 2015. The disclosure requirements for certain transactions accounted for as a sale is required to be presented for interim and annual periods beginning January 1, 2015, and the disclosure for repurchase agreements, securities lending transactions, and repurchase-to-maturity transactions accounted for as secured borrowings is required to be presented for annual periods beginning January 1, 2015, and for interim periods beginning after April 1, 2015. Early application for a public business entity is prohibited. We are currently evaluating the effect of adopting this standard, but we do not anticipate that our adoption will have a material impact on our consolidated financial condition or results of operations.

Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period (ASU 2014-12)

In June 2014, the FASB issued ASU 2014-12 to codify a final consensus reached by the EITF at its March 2014 meeting that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition rather than a condition that affects the grant-date fair value.

The provisions of ASU 2014-12 will be effective for us on January 1, 2015 with early adoption permitted. Entities may apply the amendments in this ASU either (a) prospectively to all awards granted or modified after the effective date or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. We are currently evaluating the effect of adopting this standard effective January 1, 2015. We currently do not have any share-based payment awards outstanding that contain performance targets, and therefore we anticipate that our adoption will not have an impact on our consolidated financial condition or results of operations.

Measuring the Financial Assets and the Financial Liabilities of a Consolidated Collateralized Financing Entity (ASU 2014-13)

In August 2014, the FASB issued ASU 2014-013. When a reporting entity elects the measurement alternative included in this ASU for a consolidated collateralized financing entity, the reporting entity should measure both the financial assets and the financial liabilities of that collateralized financing entity in its consolidated financial statements using the more observable of the fair value of the financial assets and the fair value of the financial liabilities. A collateralized financing entity is a variable interest entity with no more than nominal equity that holds financial assets and issues beneficial interests in those financial assets; the beneficial interests have contractual recourse only to the related assets of the collateralized financing entity and are classified as financial liabilities.

ASU 2014-13 will be effective for us on January 1, 2016, with early adoption permitted at the beginning of an annual period. An entity can elect to adopt the amendments using either a modified retrospective approach or retrospectively to all relevant prior periods. We are currently evaluating the effect of adopting this standard.

Classification of Certain Government-Guaranteed Mortgage Loans upon Foreclosure (ASU 2014-14)

In August 2014, the FASB issued ASU 2014-014. The amendments in this ASU require that a mortgage loan be derecognized and that a separate other receivable be recognized upon foreclosure if the following conditions are met:


1.	The loan has a government guarantee that is not separable from the loan before foreclosure.


2.	At the time of foreclosure, the creditor has the intent to convey the real estate property to the guarantor and make a claim on the guarantee, and the creditor has the ability to recover under that claim.


3.	At the time of foreclosure, any amount of the claim that is determined on the basis of the fair value of the real estate is fixed.

Upon foreclosure, the separate other receivable should be measured based on the amount of the loan balance (principal and interest) expected to be recovered from the guarantor.

ASU 2014-14 will be effective for us on January 1, 2015. An entity should adopt the amendments using either a prospective transition method or a modified retrospective transition method. We are currently evaluating the effect of adopting this standard.

Restatement of Previously Issued Consolidated Financial Statements

9 Months Ended

Sep. 30, 2014

Accounting Changes and Error Corrections [Abstract]

Restatement of Previously Issued Consolidated Financial Statements

Note 1A — Restatement of Previously Issued Consolidated Financial Statements

Subsequent to the issuance of our original Form 10-K for the year ended December 31, 2013, and our original Form 10-Q for the quarter ended March 31, 2014, we determined there was an error in the accounting for a financing liability related to the Rights to MSRs sold to Home Loan Servicing Solutions, Ltd. and its wholly-owned subsidiary, HLSS Holdings, LLC (collectively HLSS). The error relates to the subsequent accounting for the financing liability at fair value and does not impact the initial accounting for the sale of Rights to MSRs to HLSS. As a result, the financial amounts noted below have been restated from amounts previously reported.

The following tables summarize the effect of these restatements on our previously reported amounts.



	Consolidated Statement of Operations for the Three Months Ended September 30, 2013
	As Reported			Restatement			As Restated
Interest expense	$	(110,055	)	$	(6,830	)	$	(116,885	)
Total other expense, net	(108,705		)	(6,830		)	(115,535		)
Income before income taxes	76,275			(6,830		)	69,445
Income tax expense	9,273			(400		)	8,873
Net income	67,002			(6,430		)	60,572
Net income attributable to Ocwen common stockholders	61,155			(6,430		)	54,725
Earnings per share attributable to Ocwen common stockholders
Basic	$	0.45		$	(0.05	)	$	0.40
Diluted	$	0.44		$	(0.05	)	$	0.39



	Consolidated Statement of Operations for the Nine Months Ended September 30, 2013
	As Reported			Restatement			As Restated
Interest expense	$	(303,339	)	$	(16,225	)	$	(319,564	)
Total other expense, net	(306,780		)	(16,225		)	(323,005		)
Income before income taxes	215,120			(16,225		)	198,895
Income tax expense	26,250			(2,498		)	23,752
Net income	188,870			(13,727		)	175,143
Net income attributable to Ocwen common stockholders	177,847			(13,727		)	164,120
Earnings per share attributable to Ocwen common stockholders
Basic	$	1.31		$	(0.10	)	$	1.21
Diluted	$	1.27		$	(0.10	)	$	1.17



	Consolidated Statement of Comprehensive Income for the Three Months Ended September 30, 2013
	As Reported		Restatement			As Restated
Net income	$	67,002	$	(6,430	)	$	60,572
Comprehensive income	71,747		(6,430		)	65,317



	Consolidated Statement of Comprehensive Income for the Nine Months Ended September 30, 2013
	As Reported		Restatement			As Restated
Net income	$	188,870	$	(13,727	)	$	175,143
Comprehensive income	188,242		(13,727		)	174,515



	Consolidated Statement of Changes in Equity for the Nine Months Ended September 30, 2013
	As Reported		Restatement			As Restated
Net income	$	188,870	$	(13,727	)	$	175,143



	Consolidated Statement of Cash Flows for the Nine Months Ended September 30, 2013
	As Reported			Restatement			As Restated
Net income	$	188,870		$	(13,727	)	$	175,143
Adjustments to reconcile net income to net cash provided by operating activities:
Decrease (increase) in deferred tax assets, net	105			(2,498		)	(2,393		)
Net cash provided by operating activities	1,020,455			(16,225		)	1,004,230
Repayments of other secured borrowings	(7,182,275		)	16,225			(7,166,050		)
Net cash used in financing activities	(933,136		)	16,225			(916,911		)

Securitization and Variable Interest Entities

9 Months Ended

Sep. 30, 2014

Securitizations and Variable Interest Entities

Note 2 – Securitizations and Variable Interest Entities

We securitize, sell and service forward and reverse residential mortgage loans and regularly transfer financial assets in connection with asset-backed financing arrangements. We have aggregated these securitizations and asset-backed financing arrangements into two groups: (1) securitizations of residential mortgage loans and (2) financings of advances on loans serviced for others.

We have determined that the special purpose entities (SPEs) created in connection with our match funded advance financing facilities are variable interest entities (VIEs) of which we are the primary beneficiary.

Securitizations of Residential Mortgage Loans

Currently, we securitize forward and reverse residential mortgage loans involving the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) (collectively the GSEs) and loans insured by the Federal Housing Authority (FHA) or Department of Veterans Affairs (VA). We retain the right to service these loans and receive servicing fees based upon the securitized loan balances and certain ancillary fees, all of which are reported in Servicing and subservicing fees on the unaudited Consolidated Statements of Operations.

Transfers of Forward Loans

We sell or securitize forward loans that we originate or that we purchase from third parties, generally in the form of mortgage-backed securities guaranteed by the GSEs or the Government National Mortgage Association (Ginnie Mae). Securitization usually occurs within 30 days of loan closing or purchase. We retain servicing rights associated with the transferred loans and receive a servicing fee for services provided. We act only as a fiduciary and do not have a variable interest in the securitization trusts. As a result, we account for these transactions as sales upon transfer.

We report the gain or loss on the transfer of the loans held for sale in Gain on loans held for sale, net in the unaudited Consolidated Statements of Operations along with changes in fair value of the loans and the gain or loss on the related derivatives. See Note 15 – Derivative Financial Instruments and Hedging Activities for information on these derivative financial instruments. We include all changes in loans held for sale and related derivative balances in operating activities in the unaudited Consolidated Statements of Cash Flows.

The following table presents a summary of cash flows received from and paid to securitization trusts related to transfers accounted for as sales that were outstanding during the three and nine months ended September 30:



	Three Months				Nine Months
	2014		2013		2014		2013
Proceeds received from securitizations	$	1,369,468	$	1,776,309	$	4,346,991	$	6,240,459
Servicing fees collected	10,840		6,317		25,174		13,125
Purchases of previously transferred assets, net of claims reimbursed	2,237		—		2,237		—
	$	1,382,545	$	1,782,626	$	4,374,402	$	6,253,584

In connection with these transfers, we retained MSRs of $10.7 million and $32.1 million during the three and nine months ended September 30, 2014, respectively, and $16.3 million and $63.2 million during the three and nine months ended September 30, 2013, respectively. We initially record the MSRs at fair value and subsequently account for them at amortized cost. See Note 8 – Mortgage Servicing for information relating to MSRs.

Certain obligations arise from agreements associated with our transfers of loans. Under these agreements, we may be obligated to repurchase the loans, or otherwise indemnify or reimburse the investor or insurer for losses incurred due to material breach of contractual representations and warranties. See Note 12 – Other Liabilities for further information.

The following table presents the carrying amounts of our assets that relate to our continuing involvement with forward loans that we have transferred with servicing rights retained as well as our maximum exposure to loss including the unpaid principal balance (UPB) of the transferred loans at the dates indicated:



	September 30, 2014		December 31, 2013
Carrying value of assets:
Mortgage servicing rights, at amortized cost	$	84,397	$	44,615
Mortgage servicing rights, at fair value	2,965		3,075
Advances and match funded advances	10,153		15,888
Unpaid principal balance of loans transferred (1)	8,816,416		5,641,277
Maximum exposure to loss	$	8,913,931	$	5,704,855


(1)	The UPB of the loans transferred is the maximum exposure to loss under our standard representations and warranties obligations.

At September 30, 2014 and December 31, 2013, 4.4% and 2.6%, respectively, of the transferred residential loans that we service were 30 days or more past due. During the three and nine months ended September 30, 2014, there were no charge-offs, net of recoveries, associated with these transferred loans.

Transfers of Reverse Mortgages

We are an approved issuer of Ginnie Mae Home Equity Conversion Mortgage-Backed Securities (HMBS) that are guaranteed by Ginnie Mae. We originate Home Equity Conversion Mortgages (HECMs, or reverse mortgages) that are insured by the FHA. We then pool the loans into HMBS that we sell into the secondary market with servicing rights retained. We have determined that loan transfers in the HMBS program do not meet the definition of a participating interest because of the servicing requirements in the product that require the issuer/servicer to absorb some level of interest rate risk, cash flow timing risk and incidental credit risk. As a result, the transfers of the HECMs do not qualify for sale accounting, and we, therefore, account for these transfers as financings. Under this accounting treatment, the HECMs are classified as Loans held for investment - reverse mortgages, at fair value, on our unaudited Consolidated Balance Sheets. We record the proceeds from the transfer of assets as secured borrowings (HMBS-related borrowings) in Financing liabilities and recognize no gain or loss on the transfer. Holders of participating interests in the HMBS have no recourse against the assets of Ocwen, except for standard representations and warranties and our contractual obligation to service the HECMs and the HMBS.

We have elected to measure the HECMS and HMBS-related borrowings at fair value. The changes in fair value of the HECMs and HMBS-related borrowings are included in Other revenues in our unaudited Consolidated Statements of Operations. Included in net fair value gains on the HECMs and related HMBS borrowings are the interest income that we expect to be collected on the HECMs and the interest expense that we expect to be paid on the HMBS-related borrowings. We report originations and collections of HECMs in investing activities in the unaudited Consolidated Statements of Cash Flows. We report net fair value gains on HECMs and the related HMBS borrowings as an adjustment to the net cash provided by or used in operating activities in the unaudited Consolidated Statements of Cash Flows. Proceeds from securitizations of HECMs and payments on HMBS-related borrowings are included in financing activities in the unaudited Consolidated Statements of Cash Flows.

At September 30, 2014 and December 31, 2013, we had HMBS-related borrowings of $1.2 billion and $615.6 million and HECMs pledged as collateral to the pools of $1.3 billion and $618.0 million, respectively. See Note 4 – Fair Value for a reconciliation of the changes in fair value of HECMs and HMBS-related borrowings.

Financings of Advances on Loans Serviced for Others

Match funded advances on loans serviced for others result from our transfers of residential loan servicing advances to SPEs in exchange for cash. We consolidate these SPEs because Ocwen is the primary beneficiary of the SPE. These SPEs issue debt supported by collections on the transferred advances.

We make the transfers to these SPEs under the terms of our advance financing facility agreements. We classify the transferred advances on our unaudited Consolidated Balance Sheets as Match funded advances and the related liabilities as Match funded liabilities. The SPEs use collections of the pledged advances to repay principal and interest and to pay the expenses of the SPE. Holders of the debt issued by these entities can look only to the assets of the SPE for satisfaction of the debt and have no recourse against Ocwen. However, Ocwen and OLS have guaranteed the payment of the obligations under the securitization documents of one of the entities. The maximum amount payable under the guarantee is limited to 10% of the notes outstanding at the end of the facility’s revolving period in December 2014. The entity to which this guarantee applies had $5.0 million of notes outstanding at September 30, 2014. The assets and liabilities of the advance financing SPEs are comprised solely of Match funded advances, Debt service accounts, Match funded liabilities and amounts due to affiliates. Amounts due to affiliates are eliminated in consolidation in our unaudited Consolidated Balance Sheets.

See Note 7 – Match Funded Advances, Note 10 – Other Assets and Note 11 – Borrowings for additional information.

Business Acquisitions

9 Months Ended

Sep. 30, 2014

Business Combinations [Abstract]

Business Acquisitions

Note 3 – Business Acquisitions

We account for business acquisitions using the acquisition method which requires, among other things, that the assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date. The initial allocation of the purchase price is considered preliminary and therefore subject to change until the end of the measurement period which can extend up to one year from the acquisition date. Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the expected revenue and cost synergies of the combined business. Measurement period adjustments are applied retrospectively to the period of acquisition.

The purchase price allocations provided below for our business acquisitions are based on the estimated fair value of the acquired receivables, loans, advances, MSRs and the assumed debt in a manner consistent with the methodology described in Note 4 – Fair Value. Premises and equipment were initially valued based on the “in-use” valuation premise, where the fair value of an asset is based on the highest and best use of the asset that would provide maximum value to market participants principally through its use with other assets as a group. Other assets and liabilities expected to have a short life were valued at the face value of the specific assets and liabilities purchased, including receivables, prepaid expenses, accounts payable and accrued expenses.

The unaudited pro forma consolidated results presented below for the ResCap Acquisition are not indicative of what Ocwen’s consolidated net earnings would have been had we completed the acquisition on the date indicated because of differences in servicing practices and cost structure between Ocwen and ResCap. In addition, the unaudited pro forma consolidated results do not purport to project our combined future results nor do they reflect the expected realization of any cost savings associated with the acquisition.

The acquisition of Liberty was treated as stock purchases for U.S. tax purposes. The ResCap Acquisition was treated as an asset acquisition for U.S. tax purposes. We expect the opening tax basis for the acquired assets and liabilities to be the fair values as shown in the purchase price allocation table below. We expect MSRs and goodwill to be treated as intangible assets acquired in connection with the purchase of a trade or business and, as such, amortized over 15 years for tax purposes.

Purchase Price Allocation

The following table summarizes the fair values of assets acquired and liabilities assumed as part of the ResCap Acquisition:



Purchase Price Allocation	February 15, 2013			Adjustments			Final
MSRs (1)	$	393,891		$	7,423		$	401,314
Advances and match funded advances (1)	1,622,348			164,061			1,786,409
Deferred tax assets	—			—			—
Premises and equipment	22,398			(5,975		)	16,423
Receivables and other assets	2,989			—			2,989
Other liabilities:
Liability for indemnification obligations	(49,500		)	—			(49,500		)
Other	(24,840		)	(285		)	(25,125		)
Total identifiable net assets	1,967,286			165,224			2,132,510
Goodwill	204,743			6,676			211,419
Total consideration	$	2,172,029		$	171,900		$	2,343,929

(1)

As of the acquisition date, the purchase of certain MSRs from ResCap was not complete pending the receipt of certain consents and court approvals. Subsequent to the acquisition, we obtained the required consents and approvals for a portion of these MSRs and paid an additional purchase price of $174.6 million to acquire the MSRs and related advances, including $54.2 million in 2014. The purchase price allocation has been revised to include the resulting adjustments to MSRs, advances and goodwill.

ResCap Acquisition

We completed the ResCap Acquisition on February 15, 2013. We acquired MSRs related to conventional (i.e., conforming to the underwriting standards of Fannie Mae or Freddie Mac; collectively referred to as Agency loans), government insured (loans insured by FHA or VA) and non-Agency residential forward mortgage loans (commonly referred to as non-prime, subprime or private-label loans) with a UPB of $111.2 billion and master servicing agreements with a UPB of $44.9 billion. The ResCap Acquisition included advances and elements of the servicing platform related to the acquired MSRs, as well as certain diversified fee-based business operations that included recovery, title and closing services. We also assumed subservicing contracts with a UPB of $27.0 billion. Under the terms of the ResCap Acquisition, we were obligated to acquire certain servicing rights and subservicing agreements that were not settled as part of the initial closing on February 15, 2013 as a result of objections raised in connection with the sale. We purchased these MSRs and assumed the subservicing contracts from ResCap when such consents and approvals were obtained. We completed subsequent settlements and purchased additional MSRs, as objections were resolved.

To finance the ResCap Acquisition, we deployed $840.0 million from the proceeds of a new $1.3 billion senior secured term loan (SSTL) facility and borrowed an additional $1.2 billion pursuant to two new servicing advance facilities and one existing facility. We settled the subsequent closings with cash. Ocwen assumed certain limited liabilities as part of the transaction, including certain employee liabilities and certain business payables outstanding at the closing date. Under the agreement with ResCap, Ocwen generally did not assume any contingent obligations, including pending or threatened litigation, financial obligations in connection with any settlements, orders or similar agreements entered into by ResCap or obligations in connection with any representations or warranties associated with loans previously sold by ResCap except for litigation that may arise in the ordinary course of servicing mortgage loans relating to servicing agreements assumed by Ocwen. Ocwen assumed all liabilities related to servicing loans that are guaranteed by Ginnie Mae, whether arising prior to or after the closing date.

Post-Acquisition Results of Operations

The following table presents the revenue and earnings of the ResCap operations that are included in our unaudited Consolidated Statements of Operations for the three and nine months ended September 30, 2013 (from the acquisition date of February 15, 2013):



	Three Months		Nine Months
Revenues	$	212,164	$	508,589
Net income	$	8,230	$	81,362

Pro Forma Results of Operations

The following table presents unaudited supplemental pro forma information for Ocwen for the nine months ended September 30, 2013 as if the ResCap Acquisition occurred on January 1, 2012. Pro forma adjustments include:


•	conforming servicing revenues to the revenue recognition policies followed by Ocwen;


•	conforming the accounting for MSRs to the valuation and amortization policies of Ocwen;


•	adjusting interest expense to eliminate the pre-acquisition interest expense of ResCap and to recognize interest expense as if the acquisition-related debt of Ocwen had been outstanding at January 1, 2012; and


•	reporting acquisition-related charges for professional services as if they had been incurred in 2012 rather than 2013.



Revenues	$	1,530,055
Net income	$	205,062

Other Acquisitions

Correspondent One S.A. (Correspondent One)

On March 31, 2013, we increased our ownership in Correspondent One, an entity formed with Altisource Portfolio Solutions, SA (Altisource) in March 2011, from 49% to 100%. Correspondent One facilitated the purchase of conventional and government insured residential mortgages from approved mortgage originators and resold the mortgages to secondary market investors. We acquired the shares of Correspondent One held by Altisource (49% interest) for $12.6 million and acquired the remaining shares held by an unrelated entity for $0.9 million. We accounted for this transaction as an acquisition and recognized the assets acquired and liabilities assumed at their fair values as of the acquisition date. The acquired net assets were $26.4 million and consisted primarily of cash ($23.0 million) and residential mortgage loans ($1.1 million). We remeasured our previously held investment, which we accounted for using the equity method, at fair value and recognized a loss of $0.4 million. We did not recognize goodwill in connection with this acquisition. Correspondent One is not material to our financial condition, results of operations or cash flows.

Liberty

On April 1, 2013, we completed the Liberty Acquisition for $22.0 million in cash. In addition, and as part of the closing, Ocwen repaid Liberty’s $9.1 million existing outstanding debt to the sellers. Liberty is engaged in the origination, purchase, sale and securitization of reverse mortgage loans, both retail and wholesale. We acquired Liberty’s reverse mortgage origination platform, including reverse mortgage loans with a UPB of $55.2 million. The acquired net assets were $31.1 million and consisted primarily of residential reverse mortgage loans ($60.0 million), receivables ($11.2 million), loans held for investment ($10.3 million) and cash ($4.6 million) less amounts due under warehouse facilities ($46.3 million) and HMBS-related borrowings ($10.2 million). We recognized $3.0 million of goodwill in connection with this acquisition. The acquisition of Liberty did not have a material impact on our financial condition, results of operations or cash flows.

Ocwen Structured Investments, LLC (OSI)

On January 31, 2014, we increased our ownership in OSI from 26.00% to 87.35%. OSI invests primarily in residential MSRs and the related lower tranches and residuals of mortgage-backed securities. We acquired the additional interest in OSI for $11.0 million. We accounted for this transaction as an acquisition and recognized 100% of the assets acquired and liabilities assumed at their fair values as of the acquisition date. We recognized in equity a noncontrolling interest at its proportionate 12.65% share of the net assets acquired. The acquired net assets were $20.0 million and consisted primarily of MSRs ($9.0 million), mortgage-backed securities ($7.7 million) and cash ($3.2 million). The acquisition of OSI did not have a material impact on our financial condition, results of operations or cash flows.

Facility Closure Costs

We have incurred employee termination benefits, primarily consisting of severance and Worker Adjustment and Retraining Notification Act compensation, lease termination costs for the closure of leased facilities and other contract termination costs in connection with our business acquisitions. The following table provides a reconciliation of the beginning and ending liability balances for these termination costs for the nine months ended September 30, 2014:



	Employee termination benefits			Lease and other contract termination costs			Total
Liability balance as at December 31, 2013	$	4,816		$	7,432		$	12,248
Additions charged to operations (1)	14,748			2,813			17,561
Amortization of discount	—			115			115
Payments	(17,215		)	(2,928		)	(20,143		)
Liability balance as at September 30, 2014 (2)	$	2,349		$	7,432		$	9,781

(1)

Of the additions charged to operations during the period, $14.4 million was recognized in the Servicing segment, $(0.1) million was recognized in the Lending segment and the remaining $3.3 million was recognized in the Corporate Items and Other segment. Charges related to employee termination benefits, lease termination costs and other contract termination costs are reported in Compensation and benefits expense, Occupancy and equipment expense and Other operating expenses, respectively, in the unaudited Consolidated Statements of Operations. The liabilities are included in Other liabilities in the unaudited Consolidated Balance Sheet.


(2)	We expect the remaining liability for employee termination benefits at September 30, 2014 to be settled in late 2014 or early 2015.

Fair Value

9 Months Ended

Sep. 30, 2014

Fair Value Disclosures [Abstract]

Note 4 – Fair Value

Fair value is estimated based on a hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs. Observable inputs are inputs that reflect the assumptions that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The fair value hierarchy prioritizes the inputs to valuation techniques into three broad levels whereby the highest priority is given to Level 1 inputs and the lowest to Level 3 inputs.


Level 1:	Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date.


Level 2:	Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly.


Level 3:	Unobservable inputs for the asset or liability.

We classify assets in their entirety based on the lowest level of input that is significant to the fair value measurement.

The carrying amounts and the estimated fair values of our financial instruments and our nonfinancial assets measured at fair value on a recurring or non-recurring basis are as follows at the dates indicated:



		September 30, 2014						December 31, 2013
	Level	Carrying Value			Fair Value			Carrying Value		Fair Value
Financial assets:
Loans held for sale:
Loans held for sale, at fair value (a)	2	$	335,950		$	335,950		$	503,753	$	503,753
Loans held for sale, at lower of cost or fair value (b)	3	71,937			71,937			62,907		62,907
Total Loans held for sale		$	407,887		$	407,887		$	566,660	$	566,660
Loans held for investment - Reverse mortgages, at fair value (a)	3	$	1,315,324		$	1,315,324		$	618,018	$	618,018
Advances and match funded advances (c)	3	3,346,865			3,346,865			3,443,215		3,443,215
Receivables, net (c)	3	245,817			245,817			152,516		152,516

Financial liabilities:
Match funded liabilities (c)	3	$	2,035,639		$	2,035,639		$	2,364,814	$	2,364,814
Financing liabilities:
HMBS-related borrowings, at fair value (a)	3	$	1,236,094		$	1,236,094		$	615,576	$	615,576
Financing liability - MSRs pledged (a)	3	618,855			618,855			633,804		633,804
Other (c)	3	202,541			206,261			17,593		17,593
Total Financing liabilities		$	2,057,490		$	2,061,210		$	1,266,973	$	1,266,973
Other secured borrowings:
Senior secured term loan (c)	3	$	1,276,142		$	1,259,601		$	1,284,901	$	1,270,108
Other (c)	3	390,285			390,285			492,768		492,768
Total Other secured borrowings		$	1,666,427		$	1,649,886		$	1,777,669	$	1,762,876

Senior unsecured notes	2	$	350,000		$	338,625		$	—	$	—

Derivative financial instruments (a):
IRLCs	2	$	6,117		$	6,117		$	8,433	$	8,433
Forward MBS trades	1	(1,089		)	(1,089		)	6,905		6,905
Interest rate caps	3	91			91			442		442

MSRs:
MSRs, at fair value (a)	3	$	101,948		$	101,948		$	116,029	$	116,029
MSRs, at amortized cost (c)	3	1,856,818			2,364,393			1,953,352		2,441,719
Total MSRs		$	1,958,766		$	2,466,341		$	2,069,381	$	2,557,748


(a)	Measured at fair value on a recurring basis.


(b)	Measured at fair value on a non-recurring basis.


(c)	Disclosed, but not carried, at fair value.

The following tables present a reconciliation of the changes in fair value of Level 3 assets and liabilities that we measure at fair value on a recurring basis for the three and nine months ended September 30. The information presented for 2013 has been revised to include Financing liability - MSRs pledged in conformity with the 2014 presentation of Level 3 assets and liabilities.



	Loans Held for Investment - Reverse Mortgages			Financing Liability - MSRs Pledged			HMBS-Related Borrowings			Derivative Financial Instruments, net			MSRs			Total
Three months ended September 30, 2014
Fair value at July 1, 2014	$	1,107,626		$	(629,579	)	$	(1,033,712	)	$	97		$	104,220		$	(451,348	)
Purchases, issuances, sales and settlements:
Purchases	—			—			—			—			—			—
Issuances	208,566			—			(190,452		)	—			—			18,114
Sales	—			—			—			—			—			—
Settlements (1)	(27,592		)	10,724			12,690			—			(934		)	(5,112		)
	180,974			10,724			(177,762		)	—			(934		)	13,002
Total realized and unrealized gains and (losses):
Included in earnings	26,724			—			(24,620		)	(6		)	(1,338		)	760
Included in Other comprehensive income (loss)	—			—			—			—			—			—
	26,724			—			(24,620		)	(6		)	(1,338		)	760
Transfers in and / or out of Level 3	—			—			—			—			—			—
Fair value at September 30, 2014	$	1,315,324		$	(618,855	)	$	(1,236,094	)	$	91		$	101,948		$	(437,586	)



	Loans Held for Investment - Reverse Mortgages			Financing Liability - MSRs Pledged			HMBS-Related Borrowings			Derivative Financial Instruments, net			MSRs			Total
Three months ended September 30, 2013
Fair value at July 1, 2013	$	76,649		$	(437,734	)	$	(73,641	)	$	176		$	97,163		$	(337,387	)
Purchases, issuances, sales and settlements:
Purchases	—			—			—			—			—			—
Issuances	211,052			(239,851		)	(206,714		)	—			—			(235,513		)
Sales	—			—			—						—			—
Settlements	(1,293		)	17,764			1,021			(176		)	—			17,316
	209,759			(222,087		)	(205,693		)	(176		)	—			(218,197		)
Total realized and unrealized gains and (losses):
Included in earnings	4,445			—			(4,942		)	—			(225		)	(722		)
Included in Other comprehensive income (loss)	—			—			—			—			—			—
	4,445			—			(4,942		)	—			(225		)	(722		)
Transfers in and / or out of Level 3	—			—			—			—			—			—
Fair value at September 30, 2013	$	290,853		$	(659,821	)	$	(284,276	)	$	—		$	96,938		$	(556,306	)



	Loans Held for Investment - Reverse Mortgages			Financing Liability - MSRs Pledged			HMBS-Related Borrowings			Derivative Financial Instruments, net			MSRs			Total
Nine months ended September 30, 2014
Fair value at January 1, 2014	$	618,018		$	(633,804	)	$	(615,576	)	$	442		$	116,029		$	(514,891	)
Purchases, issuances, sales and settlements:
Purchases	—			—			—			23			—			23
Issuances	565,670			—			(572,031		)	—			—			(6,361		)
Transfer from loans held for sale, at fair value	110,874			—			—			—			—			110,874
Sales	—			—			—			—			—			—
Settlements (1)	(56,193		)	14,949			25,725			—			(934		)	(16,453		)
	620,351			14,949			(546,306		)	23			(934		)	88,083
Total realized and unrealized gains and (losses): (2)
Included in earnings	76,955			—			(74,212		)	(374		)	(13,147		)	(10,778		)
Included in Other comprehensive income (loss)	—			—			—			—			—			—
	76,955			—			(74,212		)	(374		)	(13,147		)	(10,778		)
Transfers in and / or out of Level 3	—			—			—			—			—			—
Fair value at September 30, 2014	$	1,315,324		$	(618,855	)	$	(1,236,094	)	$	91		$	101,948		$	(437,586	)



	Loans Held for Investment - Reverse Mortgages			Financing Liability - MSRs Pledged			HMBS-Related Borrowings			Derivative Financial Instruments, net			MSRs		Total
Nine months ended September 30, 2013
Fair value at January 1, 2013	$	—		$	(303,705	)	$	—		$	(10,668	)	$	85,213	$	(229,160	)
Purchases, issuances, sales and settlements:
Purchases	10,251			—			(10,179		)	—			—		72
Issuances	274,081			(388,473		)	(272,652		)	—			—		(387,044		)
Sales	—			—			—			24,156			—		24,156
Settlements	(2,164		)	32,357			1,888			(1,242		)	—		30,839
	282,168			(356,116		)	(280,943		)	22,914			—		(331,977		)
Total realized and unrealized gains and (losses):
Included in earnings	8,685			—			(3,333		)	117			11,725		17,194
Included in Other comprehensive income (loss)	—			—			—			(12,363		)	—		(12,363		)
	8,685			—			(3,333		)	(12,246		)	11,725		4,831
Transfers in and / or out of Level 3	—			—			—			—			—		—
Fair value at September 30, 2013	$	290,853		$	(659,821	)	$	(284,276	)	$	—		$	96,938	$	(556,306	)


(1)	In the event of a transfer of servicing to another party related to Rights to MSRs sold to HLSS, we are required to reimburse HLSS at predetermined contractual rates for the loss of servicing revenues. Settlements for Financing liability - MSRs pledged for the three and nine months ended September 30, 2014 includes $2.0 million of such reimbursements.


(2)	Total losses attributable to derivative financial instruments still held at September 30, 2014 were $0.4 million for the nine months ended September 30, 2014.

The methodologies that we use and key assumptions that we make to estimate the fair value of instruments and other assets and liabilities measured at fair value on a recurring or non-recurring basis and those disclosed, but not carried, at fair value are described below:

Loans Held for Sale

We originate and purchase residential forward and reverse mortgage loans that we intend to sell to the GSEs. We also own residential mortgage loans that are not eligible to be sold to the GSEs due to delinquency or other factors. Residential forward and reverse mortgage loans that we intend to sell to the GSEs are carried at fair value as a result of a fair value election. Such loans are subject to changes in fair value due to fluctuations in interest rates from the closing date through the date of the sale of the loan into the secondary market. These loans are classified within Level 2 of the valuation hierarchy because the primary component of the price is obtained from observable values of mortgage forwards for loans of similar terms and characteristics. We have the ability to access this market, and it is the market into which conventional and government insured mortgage loans are typically sold.

We repurchase certain loans from Ginnie Mae guaranteed securitizations in connection with loan modifications and loan resolution activity as part of our servicing obligations. These are classified as loans held for sale at the lower of cost or fair value, in the case of modified loans, as we expect to redeliver (sell) the loans to new Ginnie Mae guaranteed securitizations. The fair value of these loans is estimated using published forward Ginnie Mae prices. Loans repurchased in connection with loan resolution activities are modified or otherwise remediated through loss mitigation activities or are reclassified to receivables. Because these loans are insured or guaranteed by the FHA or VA, the fair value of these loans represents the net recovery value taking into consideration the insured or guaranteed claim.

For all other loans held for sale, which we report at the lower of cost or fair value, market illiquidity has reduced the availability of observable pricing data. When we enter into an agreement to sell a loan or pool of loans to an investor at a set price, we value the loan or loans at the commitment price. We base the fair value of uncommitted loans on the expected future cash flows discounted at a rate commensurate with the risk of the estimated cash flows.

Loans Held for Investment – Reverse Mortgages

We have elected to measure these loans at fair value. For transferred reverse mortgage loans that do not qualify as sales for accounting purposes, we base the fair value on the expected future cash flows discounted over the expected life of the loans at a rate commensurate with the risk of the estimated cash flows. Significant assumptions include expected prepayment and delinquency rates and cumulative loss curves. The discount rate assumption for these assets is primarily based on an assessment of current market yields on newly originated reverse mortgage loans, expected duration of the asset and current market interest rates.

The more significant assumptions used in the September 30, 2014 valuation include:


•	Life in years ranging from 6.64 to 10.75 (weighted average of 6.99);


•	Conditional repayment rate ranging from 4.82% to 53.75% (weighted average of 19.28%); and


•	Discount rate of 3.20%.

Significant increases or decreases in any of these assumptions in isolation could result in a significantly lower or higher fair value, respectively. The effects of changes in the assumptions used to value the loans held for investment are largely offset by the effects of changes in the assumptions used to value the HMBS-Related Borrowings that are associated with these loans.

Mortgage Servicing Rights

Amortized Cost MSRs

We estimate the fair value of MSRs carried at amortized cost using a combination of internal models and data provided by third-party valuation experts. The most significant assumptions used in our internal valuation are the speed at which mortgages prepay and delinquency experience. Other assumptions typically used in the internal valuation are:



•	Cost of servicing	•	Interest rate used for computing float earnings
•	Discount rate	•	Compensating interest expense
•	Interest rate used for computing the cost of financing servicing advances	•	Collection rate of other ancillary fees

The significant components of the estimated future cash inflows for MSRs include servicing fees, late fees, float earnings and other ancillary fees. Significant cash outflows include the cost of servicing, the cost of financing servicing advances and compensating interest payments.

Our models calculate the present value of expected future cash flows utilizing assumptions that we believe are used by market participants. We derive prepayment speeds and delinquency assumptions from historical experience adjusted for prevailing market conditions. We utilize a discount rate provided by third-party valuation experts, and we consider external market-based assumptions in determining the interest rate for the cost of financing advances, the interest rate for float earnings and the cost of servicing.

Third-party valuation experts generally utilize: (a) transactions involving instruments with similar collateral and risk profiles, adjusted as necessary based on specific characteristics of the asset or liability being valued; and/or (b) industry-standard modeling, such as a discounted cash flow model, in arriving at their estimate of fair value. The prices provided by the valuation experts reflect their observations and assumptions related to market activity, including risk premiums and liquidity adjustments. The models and related assumptions used by the valuation experts are owned and managed by them and, in many cases, the significant inputs used in the valuation techniques are not reasonably available to us. However, we have an understanding of the processes and assumptions used to develop the prices based on our ongoing due diligence, which includes regular discussions with the valuation experts. We believe that the procedures executed by the valuation experts, combined with our internal verification and analytical procedures, provide assurance that the prices used in our unaudited consolidated financial statements comply with the accounting guidance for fair value measurements and disclosures and reflect the assumptions that a market participant would use.

The more significant assumptions used in the September 30, 2014 valuation of our MSRs carried at amortized cost include:


•	Prepayment speeds ranging from 9.87% to 16.82% (weighted average of 14.16%) depending on loan type;


•	Delinquency rates ranging from 6.77% to 24.32% (weighted average of 18.96%) depending on loan type;


•	Interest rate of 1-month LIBOR plus a range of 0.00% to 3.50% for computing the cost of financing servicing advances;


•	Interest rate of 1-month LIBOR for computing float earnings; and


•	Discount rates ranging from 9.23% to 16.74% (weighted average of 12.01%).

We perform an impairment analysis based on the difference between the carrying amount and fair value after grouping the underlying loans into the applicable strata. In response to the significant change in the composition of our MSR portfolio as a result of recent acquisitions, our strata are defined as conventional, government insured and non-Agency (i.e. all private label primary and master serviced loans).

Fair Value MSRs

MSRs carried at fair value are classified within Level 3 of the valuation hierarchy due to the use of third party valuation expert pricing without adjustment. The fair value of these MSRs is within the range of prices provided by the valuation experts; however, a change in the valuation inputs utilized by the valuation expert or a change in the best point price in the range might result in a significantly higher or lower fair value measurement.

The key assumptions (generally unobservable inputs) used in the valuation of these MSRs include:


•	Mortgage prepayment speeds;


•	Delinquency rates; and


•	Discount rates.

The primary assumptions used in the September 30, 2014 valuation include an 8.55% weighted average constant prepayment rate and a discount rate equal to 1-Month LIBOR plus 9.01%.

Advances

We value advances at their net realizable value, which generally approximates fair value, because advances have no stated maturity, are generally realized within a relatively short period of time and do not bear interest.

Receivables

The carrying value of receivables generally approximates fair value because of the relatively short period of time between their origination and realization.

Borrowings

Match Funded Liabilities

For match funded liabilities that bear interest at a rate that is adjusted regularly based on a market index, the carrying value approximates fair value. For match funded liabilities that bear interest at a fixed rate, we determine fair value by discounting the future principal and interest repayments at a market rate commensurate with the risk of the estimated cash flows. We estimate principal repayments of match funded liabilities during the amortization period based on our historical advance collection rates and taking into consideration any plans to refinance the notes. At September 30, 2014, the interest on all borrowings under match funded facilities was based on a variable rate adjusted regularly using a market index, and therefore, the carrying value approximates fair value.

HMBS-Related Borrowings

We have elected to measure these borrowings at fair value. We recognize the proceeds from the transfer of reverse mortgages as a secured borrowing that we account for at fair value. These borrowings are not actively traded and therefore quoted market prices are not available. We determine fair value by discounting the future principal and interest repayments over the estimated life of the borrowing at a market rate commensurate with the risk of the estimated cash flows. Significant assumptions include prepayments, discount rate and borrower mortality rates for reverse mortgages. The discount rate assumption for these liabilities is based on an assessment of current market yields for newly issued HMBS, expected duration and current market interest rates.

The more significant assumptions used in the September 30, 2014 valuation include:


•	Life in years ranging from 4.97 to 10.75 (weighted average of 5.65);


•	Conditional repayment rate ranging from 4.82% to 53.75% (weighted average of 19.28%); and


•	Discount rate of 2.44%.

Significant increases or decreases in any of these assumptions in isolation would result in a significantly higher or lower fair value.

Financing Liabilities

MSRs Pledged

We periodically sell rights to receive servicing fees, excluding ancillary income, with respect to certain MSRs (Rights to MSRs) and the related servicing advances to HLSS in transactions we refer to as the HLSS Transactions. Because we have retained legal title to the MSRs, the sales of Rights to MSRs are accounted for as financings. We initially establish the value of the Financing Liability - MSRs Pledged based on the price at which the Rights to MSRs are sold to HLSS. Thereafter, the carrying value of the Financing Liability - MSRs pledged is adjusted to fair value at each reporting date.

Secured Notes

We issued Ocwen Asset Servicing Income Series (OASIS), Series 2014-1 Notes secured by Ocwen-owned MSRs relating to Freddie Mac mortgages. We accounted for this transaction as a financing. We determine the fair value based on bid prices provided by third parties involved in the issuance and placement of the notes.

Other Secured Borrowings

The carrying value of secured borrowings that bear interest at a rate that is adjusted regularly based on a market index approximates fair value. For other secured borrowings that bear interest at a fixed rate, we determine fair value by discounting the future principal and interest repayments at a market rate commensurate with the risk of the estimated cash flows. For the SSTL, we used a discount rate of 5.71% and the repayment schedule specified in the loan agreement to determine fair value at September 30, 2014.

Senior Unsecured Notes

We base the fair value on quoted prices in markets with limited trading activity.

Derivative Financial Instruments

Interest rate lock commitments (IRLCs) represent an agreement to purchase loans from a third-party originator or an agreement to extend credit to a mortgage applicant (locked pipeline), whereby the interest rate is set prior to funding. IRLCs are classified within Level 2 of the valuation hierarchy as the primary component of the price is obtained from observable values of mortgage forwards for loans of similar terms and characteristics. Fair value amounts of IRLCs are adjusted for expected “fallout” (locked pipeline loans not expected to close) using models that consider cumulative historical fallout rates and other factors.

We enter into forward mortgage-backed securities (MBS) trades to provide an economic hedge against changes in fair value of residential forward and reverse mortgage loans held for sale that we carry at fair value. Forward MBS trades are primarily used to fix the forward sales price that will be realized upon the sale of mortgage loans into the secondary market. Forward contracts are actively traded in the market, and we obtain unadjusted market quotes for these derivatives, thus they are classified within Level 1 of the valuation hierarchy.

In addition, we may use interest rate caps to minimize future interest rate exposures on variable rate debt issued on servicing advance facilities from increases in one-month LIBOR interest rates. The fair value for interest rate caps is based on counterparty market prices and adjusted for counterparty credit risk.

See Note 15 – Derivative Financial Instruments and Hedging Activities for additional information regarding derivative financial instruments.

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

Loans Held for Sale

9 Months Ended

Sep. 30, 2014

Loans Held for Sale

Note 5 – Loans Held for Sale

Loans Held for Sale - Fair Value

Loans held for sale, at fair value, represent residential forward and reverse mortgage loans originated or purchased and held until sold to secondary market investors, such as GSEs or other third parties. The following table summarizes the activity in the balance of Loans held for sale, at fair value, during the nine months ended September 30:



	2014			2013
Beginning balance	$	503,753		$	426,480
Originations and purchases	3,923,870			5,988,501
Proceeds from sales	(4,010,644		)	(6,033,785		)
Transfers to loans held for investment - reverse mortgages	(110,874		)	—
Gain (loss) on sale of loans	39,486			(46,962		)
Other	(9,641		)	868
Ending balance	$	335,950		$	335,102

At September 30, 2014, Loans held for sale, at fair value with a UPB of $311.8 million were pledged to secure warehouse lines of credit in our Lending segment. See Note 11 – Borrowings for additional information.

Loans Held for Sale - Lower of Cost or Fair Value

Loans held for sale, at lower of cost or fair value, include residential loans that we do not intend to hold to maturity. The following table summarizes the activity in the balance of Loans held for sale, at lower of cost or fair value, during the nine months ended September 30:



	2014			2013
Beginning balance	$	62,907		$	82,866
Purchases	2,083,282			1,144,853
Proceeds from sales	(1,744,273		)	(654,916		)
Principal payments	(248,552		)	(317,528		)
Transfers to accounts receivable	(96,257		)	(190,185		)
Transfers to real estate owned	(4,575		)	(2,838		)
Gain on sale of loans	32,471			20,336
Increase in valuation allowance	(16,282		)	(6,510		)
Other	3,216			10,675
Ending balance	$	71,937		$	86,753

The balances at September 30, 2014 and September 30, 2013 are net of valuation allowances of $47.0 million and $27.0 million, respectively. At September 30, 2014, Loans held for sale, at lower of cost or fair value with a UPB of $21.1 million were pledged to secure a warehouse line of credit in our Servicing segment. See Note 11 – Borrowings for additional information.

The balances at September 30, 2014 and September 30, 2013 include $24.1 million and $60.8 million, respectively, of loans that we were required to repurchase from Ginnie Mae guaranteed securitizations as part of our servicing obligations. Repurchased loans are modified or otherwise remediated through loss mitigation activities or are reclassified to receivables.

On March 3, 2014, we purchased delinquent FHA-insured loans with a UPB of $549.4 million out of Ginnie Mae guaranteed securitizations under the terms of a conditional repurchase option whereby as servicer we have the right, but not the obligation, to repurchase delinquent loans at par plus delinquent interest (the Ginnie Mae early buy-out (EBO) program). Immediately after their purchase, we sold the loans (the Ginnie Mae EBO Loans) and related advances to HLSS Mortgage for $612.3 million ($556.6 million for the Ginnie Mae EBO Loans and $55.7 million for the related servicing advances). We recognized a gain of $7.2 million on the sale of the loans.

On May 1, 2014, we purchased a second group of delinquent FHA-insured loans with a UPB of $451.0 million through the Ginnie Mae EBO program for $479.6 million, including delinquent interest. On May 2, 2014, we sold the Ginnie Mae EBO Loans to an unrelated third party for $462.5 million and recognized a gain of $1.3 million, including the value assigned to the retained MSRs. Separately, we sold $20.2 million of the advances related to these loans to HLSS SEZ LP.

The sales of advances to HLSS Mortgage and to HLSS SEZ LP did not qualify for sales treatment and were accounted for as a financing. See Note 11 – Borrowings for additional information. We refer to the purchase and sale of the Ginnie Mae EBO Loans and the sale of the related advances to HLSS Mortgage and HLSS SEZ LP as the Ginnie Mae EBO Transactions.

Gain on Loans Held for Sale, Net

The following table summarizes the activity in Gain on loans held for sale, net, during the three and nine months ended September 30:



	Three Months						Nine Months
	2014			2013			2014			2013
Gain on sales of loans	$	42,185		$	4,622		$	145,455		$	36,156
Change in fair value of IRLCs	(4,188		)	18,912			(2,315		)	5,918
Change in fair value of loans held for sale	(9,348		)	14,362			(97		)	1,452
Gain (loss) on economic hedge instruments	(1,145		)	(9,408		)	(32,183		)	30,989
Other	(286		)	(226		)	(819		)	(1,603		)
	$	27,218		$	28,262		$	110,041		$	72,912

Gains on loans held for sale, net include $10.7 million and $16.3 million for the three months ended September 30, 2014 and 2013, respectively, and $32.1 million and $63.2 million for the nine months ended September 30, 2014 and 2013, respectively, representing the value assigned to MSRs retained on transfers of forward loans.

Also included in Gains on loans held for sale, net are gains of $9.9 million and $50.6 million recorded during the three and nine months ended September 30, 2014, respectively, on sales of repurchased Ginnie Mae loans which are carried at the lower of cost or fair value. For the three and nine months ended September 30, 2013, gains on sales of repurchased Ginnie Mae loans were $4.3 million and $20.5 million, respectively.

Fair value gains recognized in connection with sales of reverse mortgages into Ginnie Mae guaranteed securitizations are also included in Gains on loans held for sale, net and amounted to $20.4 million and $51.4 million for the three and nine months ended September 30, 2014, respectively. Fair value gains for the three and nine months ended September 30, 2013 were $14.5 million and $20.6 million, respectively.

Advances

9 Months Ended

Sep. 30, 2014

Advances [Abstract]

Note 6 – Advances

Advances, net, representing payments made on behalf of borrowers or on foreclosed properties, consisted of the following at the dates indicated:



	September 30, 2014		December 31, 2013
Servicing:
Principal and interest	$	198,540	$	141,307
Taxes and insurance	443,255		477,039
Foreclosures, bankruptcy and other (1)	340,882		268,053
	982,677		886,399
Corporate Items and Other	4,609		4,433
	$	987,286	$	890,832


(1)	The balances at September 30, 2014 and December 31, 2013 are net of an allowance for losses of $48.4 million and $38.4 million, respectively.

The following table summarizes the activity in advances for the nine months ended September 30:



	2014			2013
Beginning balance	$	890,832		$	184,463
Acquisitions (1)	99,318			708,415
Transfers to match funded advances	(10,156		)	(131,197		)
Sales of advances to HLSS (2)	—			(61,673		)
New advances, net of collections and other	7,292			244,923
Ending balance	$	987,286		$	944,931


(1)	Servicing advances acquired through business acquisitions and asset acquisitions, primarily in connection with the acquisition of MSRs. See Note 3 – Business Acquisitions, Note 5 – Loans Held for Sale and Note 8 – Mortgage Servicing for additional information.

(2)

We periodically sell Rights to MSRs and the related servicing advances to HLSS. The related advance sales generally meet the requirements for sale accounting and are derecognized from our financial statements at the time of the sale. In connection with the Ginnie Mae EBO Transactions completed during 2014, we transferred advances related to certain FHA-insured mortgage loans to HLSS Mortgage and HLSS SEZ LP in transactions which did not qualify as sales for accounting purposes. See Note 4 – Fair Value and Note 5 – Loans Held for Sale for additional information.

Match Funded Advances

9 Months Ended

Sep. 30, 2014

Match Funded Advances

Note 7 – Match Funded Advances

Match funded advances on residential loans we service for others are comprised of the following at the dates indicated:



	September 30, 2014		December 31, 2013
Principal and interest	$	1,360,568	$	1,497,649
Taxes and insurance	788,612		830,113
Foreclosures, bankruptcy, real estate and other	210,399		224,621
	$	2,359,579	$	2,552,383

The following table summarizes the activity in match funded advances for the nine months ended September 30:



	2014			2013
Beginning balance	$	2,552,383		$	3,049,244
Acquisitions (1)	85,521			1,448,371
Transfers from advances	10,156			131,197
Sales of advances to HLSS (2)	—			(3,428,234		)
Collections, net of new advances and other	(288,481		)	(666,853		)
Ending balance	$	2,359,579		$	533,725


(1)	Servicing advances acquired in connection with the acquisitions of MSRs through business acquisitions and asset acquisitions. See Note 3 – Business Acquisitions and Note 8 – Mortgage Servicing for additional information.


(2)	See Note 6 – Advances for additional information.

Mortgage Servicing

9 Months Ended

Sep. 30, 2014

Mortgage Servicing

Note 8 – Mortgage Servicing

Mortgage Servicing Rights – Amortization Method

The following tables summarize the activity in the carrying value of amortization method servicing assets for the nine months ended September 30. Amortization of mortgage servicing rights is reported net of the amortization of servicing liabilities and includes the amount of charges we recognized to increase servicing liability obligations, if any.



	2014			2013
Beginning balance	$	1,953,352		$	678,937
Additions recognized in connection with business acquisitions:
OSI (1)	9,008			—
ResCap Acquisition (1)	11,370			391,853
Liberty Acquisition (1)	—			2,532
Additions recognized in connection with asset acquisitions:
Ally MSR Transaction	—			683,787
OneWest MSR Transaction (2)	1,516			127,047
Greenpoint MSR Transaction (3)	3,690			—
Other	14,132			3,003
Additions recognized on the sale of mortgage loans	50,480			63,154
Sales	(137		)	(17,523		)
Servicing transfers and adjustments	(518		)	2,052
Amortization	(186,075		)	(197,899		)
Ending balance	$	1,856,818		$	1,736,943

Estimated fair value at end of period	$	2,364,393		$	2,532,239


(1)	See Note 3 – Business Acquisitions for additional information regarding MSRs recognized in connection with business acquisitions.

(2)

The acquired MSRs in 2014 relate to mortgage loans with a UPB of $1.1 billion and related servicing advances of $34.3 million acquired in the final closing of the OneWest MSR Transaction. The OneWest MSR Transaction closed in stages, and the majority of loans were boarded onto our primary servicing platform as of December 31, 2013. As of September 30, 2013, we had acquired MSRs of $127.0 million with a UPB of $30.5 billion and related servicing advance receivables of $371.6 million.


(3)	The acquired MSRs relate to mortgage loans with a UPB of $948.9 million and related servicing advances of $47.6 million.

We have sold certain Rights to MSRs as part of the HLSS Transactions which did not qualify as sales for accounting purposes. In addition, on February 26, 2014, we issued $123.6 million of OASIS Series 2014-1 Notes secured by Ocwen-owned MSRs relating to Freddie Mac mortgages of $11.8 billion UPB. We account for these transactions as financings. See Note 11 – Borrowings for additional information.

Mortgage Servicing Rights—Fair Value Measurement Method

This portfolio comprises servicing rights for which we elected the fair value option and includes Agency forward residential mortgage loans for which we previously hedged the related market risks.

The following table summarizes the activity related to fair value servicing assets for the nine months ended September 30:



	2014			2013
Beginning balance	$	116,029		$	85,213
Servicing transfers	(934		)	—
Changes in fair value (1):
Changes in assumptions	(12,217		)	19,800
Realization of cash flows and other changes	(930		)	(8,075		)
Ending balance	$	101,948		$	96,938


(1)	Changes in fair value are recognized in Servicing and origination expense in the unaudited Consolidated Statements of Operations.

Because the mortgages underlying these MSRs permit the borrowers to prepay the loans, the value of the MSRs generally tends to diminish in periods of declining interest rates (as prepayments increase) and increase in periods of rising interest rates (as prepayments decrease). The following table summarizes the estimated change in the value of the MSRs that we carry at fair value as of September 30, 2014 given hypothetical instantaneous parallel shifts in the yield curve:



	Adverse change in fair value
	10%			20%
Weighted average prepayment speeds	$	(8,245	)	$	(16,137	)
Discount rate (Option-adjusted spread)	$	(4,100	)	$	(7,905	)

The sensitivity analysis measures the potential impact on fair values based on hypothetical changes (increases and decreases) in interest rates.

Portfolio of Assets Serviced

The following table presents the composition of our primary servicing and subservicing portfolios by type of property serviced as measured by UPB. The servicing portfolio represents loans for which we own the MSRs while subservicing represents all other loans. The UPB of assets serviced for others are not included on our unaudited Consolidated Balance Sheets.



	Residential		Commercial		Total
UPB at September 30, 2014
Servicing (1)	$	360,919,248	$	—	$	360,919,248
Subservicing	50,360,366		216,111		50,576,477
	$	411,279,614	$	216,111	$	411,495,725
UPB at December 31, 2013
Servicing (1)	$	397,546,635	$	—	$	397,546,635
Subservicing	67,104,697		400,502		67,505,199
	$	464,651,332	$	400,502	$	465,051,834
UPB at September 30, 2013
Servicing (1)	$	362,792,312	$	—	$	362,792,312
Subservicing	72,027,114		495,312		72,522,426
	$	434,819,426	$	495,312	$	435,314,738


(1)	Includes primary servicing UPB of $160.8 billion, $175.1 billion and $177.1 billion at September 30, 2014, December 31, 2013 and September 30, 2013, respectively, for which the Rights to MSRs have been sold to HLSS.

Residential assets serviced includes foreclosed real estate. Residential assets serviced also includes small-balance commercial assets with a UPB of $2.4 billion, $2.6 billion and $2.5 billion at September 30, 2014, December 31, 2013 and September 30, 2013, respectively, that are managed using the REALServicing^® platform. Commercial assets consist of large-balance foreclosed real estate.

A significant portion of our non-Agency servicing portfolio servicing agreements contain provisions whereby we could be terminated as servicer without compensation upon the failure of the serviced loans to meet certain portfolio delinquency or cumulative loss thresholds or in the event we fail to maintain required servicer ratings, among other provisions. As a result of the economic downturn of recent years, the portfolio delinquency and/or cumulative loss threshold provisions have been breached by many private-label securitizations in our non-Agency servicing portfolio. Terminations as servicer as a result of a breach of any of these provisions have been minimal. In the event we were terminated as servicer and the Rights to MSRs were sold to HLSS, we would be obligated to compensate HLSS.

Servicing Revenue

The following table presents the components of servicing and subservicing fees for the three and nine months ended September 30:



	Three Months				Nine Months
	2014		2013		2014		2013
Loan servicing and subservicing fees:
Servicing	$	331,794	$	335,884	$	1,039,033	$	887,500
Subservicing	30,926		35,286		95,509		115,437
	362,720		371,170		1,134,542		1,002,937
Home Affordable Modification Program (HAMP) fees	37,644		40,213		111,000		118,412
Late charges	27,634		30,445		97,002		85,930
Loan collection fees	8,655		8,387		25,573		22,524
Custodial accounts (float earnings)	1,831		743		5,235		4,533
Other	27,480		32,309		74,744		99,056
	$	465,964	$	483,267	$	1,448,096	$	1,333,392

Float balances (balances in custodial accounts, which represent collections of principal and interest that we receive from borrowers, are held in escrow by an unaffiliated bank and are excluded from our balance sheet) amounted to $3.7 billion and $3.5 billion at September 30, 2014 and September 30, 2013, respectively.

The entire disclosure for a transferor's continuing involvement in financial assets that it has transferred in a securitization or asset-backed financing arrangement, the nature of any restrictions on assets reported by an entity in its statement of financial position that relate to a transferred financial asset (including the carrying amounts of such assets), how servicing assets and servicing liabilities are reported, and (for securitization or asset-backed financing arrangements accounted for as sales) when a transferor has continuing involvement with the transferred financial assets and transfers of financial assets accounted for as secured borrowings, how the transfer of financial assets affects an entity's financial position, financial performance, and cash flows.

Receivables

9 Months Ended

Sep. 30, 2014

Receivables

Note 9 – Receivables

Receivables consisted of the following at the dates indicated:



	September 30, 2014			December 31, 2013
Servicing:
Government-insured loan claims (1)	$	60,236		$	54,012
Due from custodial accounts	33,553			2,943
Reimbursable expenses	21,575			35,933
Other servicing receivables	26,673			31,649
	142,037			124,537
Income taxes receivable	56,174			6,369
Due from related parties (2)	30,075			14,553
Other receivables (3)	44,040			24,579
	272,326			170,038
Allowance for losses (1)	(26,509		)	(17,522		)
	$	245,817		$	152,516

(1)

The total allowance for losses at September 30, 2014 and December 31, 2013 includes $26.4 million and $17.4 million, respectively, related to receivables of our Servicing business. Allowance for losses related to defaulted FHA or VA insured loans repurchased from Ginnie Mae guaranteed securitizations (government-insured loan claims) at September 30, 2014 and December 31, 2013 were $17.4 million and $14.0 million, respectively.


(2)	See Note 20 – Related Party Transactions for additional information.


(3)	The balance at September 30, 2014 and December 31, 2013 includes $28.3 million and $13.6 million, respectively, related to losses expected to be indemnified under the terms of the merger agreement entered into in connection with the acquisition of Homeward. See Note 20 – Related Party Transactions for additional information regarding this receivable.

The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses.

Other Liabilities Disclosure [Abstract]

Other Assets

9 Months Ended

Sep. 30, 2014

Other Assets [Abstract]

Other Assets

Note 10 – Other Assets

Other assets consisted of the following at the dates indicated:



	September 30, 2014		December 31, 2013
Debt service accounts (1)	$	100,003	$	129,897
Prepaid lender fees and debt issuance costs, net	31,200		31,481
Purchase price deposit (2)	25,000		10,000
Prepaid income taxes	25,142		20,585
Prepaid expenses	12,095		16,132
Derivatives, at fair value (3)	6,169		15,494
Contingent assets - ResCap Acquisition (4)	—		51,932
Investment in unconsolidated entities (5)	—		11,771
Other	37,631		21,851
	$	237,240	$	309,143

(1)

Under our advance funding facilities, we are contractually required to remit collections on pledged advances to the trustee within two days of receipt. The collected funds are not applied to reduce the related match funded debt until the payment dates specified in the indenture. The balances also include amounts that have been set aside from the proceeds of our match funded advance facilities and certain of our warehouse facilities to provide for possible shortfalls in the funds available to pay certain expenses and interest. The funds related to match funded facilities are held in interest earning accounts in the name of the SPE created in connection with the facility.

(2)

The balance at December 31, 2013 represents an initial cash deposit that we made in connection with the agreement we entered into on December 20, 2013 to acquire MSRs and related advances from Wells Fargo Bank, N.A. This deposit, along with an additional deposit of $15.0 million that we made in January 2014, is being held in an escrow account pending the transaction closing. See Note 22 – Commitments and Contingencies for additional information on this transaction.


(3)	See Note 15 – Derivative Financial Instruments and Hedging Activities for additional information.

(4)

As disclosed in Note 3 – Business Acquisitions, the purchase of certain MSRs and related advances from ResCap was not complete on the date of acquisition pending the receipt of certain consents and court approvals. We recorded a contingent asset effective on the date of the acquisition until we subsequently obtained the required consents and approvals for the MSRs and paid the additional purchase price.

(5)

The balance at December 31, 2013 includes an investment of $5.1 million in OSI and an investment of $6.6 million in PowerLink Settlement Services, LP and related entities. As disclosed in Note 3 – Business Acquisitions, we increased our ownership in OSI from 26.00% to 87.35% on January 31, 2014. Effective on that date, we began including the accounts of OSI in our consolidated financial statements and eliminated our current investment in consolidation. In June 2014, we received proceeds from the dissolution of PowerLink Settlement Services, LP equal to our investment.

Borrowings

9 Months Ended

Sep. 30, 2014

Debt Disclosure [Abstract]

Borrowings

Note 11 – Borrowings

Match Funded Liabilities

Match funded liabilities are comprised of the following at the dates indicated:



Borrowing Type	Interest Rate	Maturity (1)	Amortization Date (1)	Available Borrowing Capacity (2)		September 30, 2014			December 31, 2013
Advance Receivable Backed Notes Series 2012-ADV1 (3)	1ML (4) + 175 bps	Jun. 2017	Jun. 2015	$	130,753	$	344,247		$	417,388
Advance Receivable Backed Note	1ML + 300 bps	Dec. 2015	Dec. 2014	44,987		5,013			33,211
2012-Homeward Agency Advance Funding Trust 2012-1 (5)	Cost of Funds + 300 bps	Apr. 2014	Apr. 2014	—		—			21,019
Advance Receivables Backed Notes, Series 2013-VF1, Class A (6)	1ML + 175 bps (7)(11)	Oct. 2044	Oct. 2014	156,812		843,188			1,494,628
Advance Receivables Backed Notes, Series 2013-VF2, Class A (6)	1ML + 167 bps (8)(11)	Oct. 2044	Oct. 2014	75,693		408,019			385,645
Advance Receivables Backed Notes, Series 2013-VF2, Class B (6)	1ML + 425 bps (9)(11)	Oct. 2044	Oct. 2014	2,711		13,577			12,923
Advance Receivables Backed Notes - Series 2014-VF3, Class A (10)	1ML + 175 bps (10)(11)	Oct. 2044	Oct. 2014	78,405		421,595			—
				$	489,361	$	2,035,639		$	2,364,814

Weighted average interest rate						1.91		%	2.08		%

(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 two advance facilities, there are multiple notes outstanding. For each note, after the amortization date, all collections that represent the repayment of advances pledged to the facility must be applied to reduce the balance of the note outstanding, and any new advances are ineligible to be financed.


(2)	Borrowing capacity is available to us provided that we have additional eligible collateral to pledge. Collateral may only be pledged to one facility. At September 30, 2014, only $51.2 million of the available borrowing capacity could be used based on the amount of eligible collateral that had been pledged.


(3)	On October 28, 2014, the maximum borrowing capacity under this facility was reduced to $450.0 million and will further decline to $400.0 million in February 2015.


(4)	1-Month LIBOR (1ML) was 0.16% and 0.17% at September 30, 2014 and December 31, 2013, respectively.


(5)	Advance facility assumed as part of the acquisition of Homeward. This facility was terminated on April 16, 2014, and the advances pledged to the facility were transferred to another facility.

(6)

These notes were issued in connection with the OneWest MSR Transaction. On February 3, 2014, the maximum borrowing capacity on the 2013-VF2 notes was increased by $100.0 million to a total of $500.0 million. On March 17, 2014, the maximum borrowing capacity under the 2013-VF1 note declined by $500.0 million to a total of $1.0 billion. On October 1, 2014, the VF1 note was fully repaid. The maximum borrowing capacity of the VF2, Class A notes was increased to $564.0 million, and the maximum borrowing capacity of the VF2, Class B notes was increased to $36.0 million. In addition, the amortization date of the VF2 Class A and B notes was extended to October 15, 2015, and the maturity date was extended to October 15, 2045. Finally, a new series, the Series 2014-VF4 note, was issued with a maximum borrowing capacity of $600.0 million, an amortization date of October 15, 2015 and a maturity date of October 15, 2045. The interest margin on this new series of notes was set to 175 bps through July 14, 2015, to 200 bps on July 15, 2015, to 212 bps on August 15, 2015 and to 250 bps on September 15, 2015.


(7)	The interest margin on these notes increased to 200 bps on July 15, 2014, to 225 bps on August 15, 2014 and 250 bps on September 15, 2014.


(8)	The interest margin on these notes increased to 191 bps on July 15, 2014, to 215 bps on August 15, 2014 and 238 bps on September 15, 2014. Effective October 1, 2014, the interest margin on these notes was set to 167 bps through July 14, 2015, to 191 bps on July 15, 2015, to 215 bps on August 15, 2015 and to 239 bps on September 15, 2015.


(9)	The interest margin on these notes increased to 486 bps on July 15, 2014, to 546 bps on August 15, 2014 and 607 bps on September 15, 2014. Effective October 1, 2014, the interest margin on these notes was set to 300 bps through July 14, 2015, to 343 bps on July 15, 2015, to 386 bps on August 15, 2015 and to 429 bps on September 15, 2015.

(10)

This note was issued on March 17, 2014 with a maximum borrowing capacity of $500.0 million. The interest margin on this note increased to 200 bps on July 15, 2014, to 225 bps on August 15, 2014 and 250 bps on September 15, 2014. On October 1, 2014, the maximum borrowing capacity of the note was increased to $600.0 million, the amortization date was extended to October 15, 2015 and the maturity date was extended to October 15, 2045. The interest margin was set to 175 bps through July 14, 2015, to 200 bps on July 15, 2015, to 225 bps on August 15, 2015 and to 250 bps on September 15, 2015.


(11)	On July 15, 2014, the lenders agreed to waive the increase in interest margin scheduled for July 15, 2014. On August 15, 2014, the lenders also agreed to waive the increases in interest margin that were scheduled for August 15, 2014 and September 15, 2014.

Financing Liabilities

Financing liabilities are comprised of the following at the dates indicated:



Borrowings	Collateral	Interest Rate	Maturity	September 30, 2014		December 31, 2013
Servicing:
Financing liability – MSRs pledged	MSRs	(1)	(1)	$	618,855	$	633,804
Secured Notes, Ocwen Asset Servicing Income Series, Series 2014-1 (2)	MSRs	(2)	Feb. 2028	115,039		—
Financing Liability – Advances Pledged (3)	Advances on loans	(3)	(3)	87,502		—
				821,396		633,804

Lending:
Financing liability - MSRs pledged (4)	MSRs	(4)	(4)	—		17,593
HMBS-related borrowings (5)	Loans held for investment (LHFI)	1ML + 245 bps	(5)	1,236,094		615,576
				1,236,094		633,169

				$	2,057,490	$	1,266,973

(1)

The HLSS Transaction financing liabilities have no contractual maturity. The balance of the liability is adjusted each reporting period to its fair value based on the present value of the estimated future cash flows underlying the related MSRs. As discussed in Note 1A — Restatement of Previously Issued Consolidated Financial Statements, we are restating our previously reported consolidated operating results for the three and nine months ended September 30, 2013 to correct an error in the accounting applicable to the financing liabilities in connection with Rights to MSRs sold to HLSS.

(2)

OASIS noteholders are entitled to receive a monthly payment amount equal to the sum of: a) the designated servicing fee amount (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. The notes have a final stated maturity of February 2028. We accounted for this transaction as a financing. 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 security.


(3)	Certain advances were sold to HLSS Mortgage and HLSS SEZ LP on March 4, 2014 and May 2, 2014, respectively. These sales of advances did not qualify for sales accounting treatment and were accounted for as a financing. See Note 5 – Loans Held for Sale for additional information.

(4)

Sales of MSRs to a third party accounted for as a financing. The financing liability was being amortized using the interest method with the servicing income that was remitted to the purchaser representing payments of principal and interest. In April 2014, we derecognized the remaining liability related to this MSR sale. During 2014, we recognized a gain of $2.6 million on the extinguishment of the financing liability.


(5)	Represents amounts due to the holders of beneficial interests in Ginnie Mae guaranteed HMBS. The beneficial interests have no maturity dates, and the borrowings mature as the related loans are repaid. See Note 2 – Securitizations and Variable Interest Entities for additional information.

Other Secured Borrowings

Other secured borrowings are comprised of the following at the dates indicated:



Borrowings	Collateral	Interest Rate	Maturity	Available Borrowing Capacity		September 30, 2014			December 31, 2013
Servicing:
SSTL (1)	(1)	1-Month Euro-dollar rate + 375 bps with a Eurodollar floor of 125 bps (1)	Feb. 2018	$	—	$	1,280,500		$	1,290,250
Promissory note (2)	MSRs	1ML + 350 bps	May 2017	—		—			15,529
Repurchase agreement (3)	Loans held for sale (LHFS)	1ML + 200 - 345 bps	Jun. 2015	27,338		22,662			17,507
				27,338		1,303,162			1,323,286

Lending:
Master repurchase agreement (4)	LHFS	1ML + 175 bps	Apr. 2015	17,199		132,801			105,659
Participation agreement (5)	LHFS	N/A	May 2015	—		54,369			81,268
Master repurchase agreement (6)	LHFS	1ML + 175 - 275 bps	Oct. 2014	10,645		64,355			91,990
Master repurchase agreement (7)	LHFS	1ML + 175 - 200 bps	Nov. 2014	99,527		50,473			89,836
Master repurchase agreement (8)	LHFI	1ML + 275bps	Oct. 2014	858		36,642			51,975
Mortgage warehouse agreement (9)	LHFI	1ML + 275 bps; floor of 350 bps	May 2015	35,695		24,305			34,292
				163,924		362,945			455,020

Corporate Items and Other:
Securities sold under an agreement to repurchase (10)	Ocwen Real Estate Asset Liquidating Trust 2007-1 Notes	Class A-2 notes: 1ML + 200 bps; Class A-3 notes: 1ML + 300 bps	Monthly	—		4,678			4,712
				191,262		1,670,785			1,783,018
Discount (1)				—		(4,358		)	(5,349		)
				$	191,262	$	1,666,427		$	1,777,669

Weighted average interest rate						4.94		%	4.86		%

(1)

This facility had an initial balance of $1.3 billion and was issued with an original issue discount of $6.5 million that we are amortizing over the term of the loan. We are required to repay the principal amount of the borrowings in consecutive quarterly installments of $3.3 million. In addition, we are generally required to use the net cash proceeds (as defined) from any asset sale (as defined) to repay loan principal, subject to a 270-day reinvestment provision (or, in the case of a sale of MSRs, related servicing advances or other related assets to HLSS, we have a 180-day reinvestment provision and the net cash proceeds must be invested in MSRs or related assets, such as advances). We are also required to make mandatory prepayments in certain circumstances based on our corporate leverage ratio (as defined) if we have positive consolidated excess cash flow (as defined) in any fiscal year. The borrowings are secured by a first priority security interest in substantially all of the assets of Ocwen. Borrowings bear interest, at the election of Ocwen, at a rate per annum equal to either (a) the base rate [the greatest of (i) the prime rate in effect on such day, (ii) the federal funds rate in effect on such day plus 0.50% and (iii) the one-month Eurodollar rate (1-Month LIBOR)], plus a margin of 2.75% and a base rate floor of 2.25% or (b) the one month Eurodollar rate, plus a margin of 3.75% with a one month Eurodollar floor of 1.25%. To date, we have elected option (b) to determine the interest rate.


(2)	This note was repaid in full on February 28, 2014.


(3)	Under this repurchase agreement, the lender provides financing on a committed basis for $50.0 million and, at the discretion of the lender, on an uncommitted basis for an additional $50.0 million.


(4)	Under this repurchase agreement, the lender provides financing on a committed basis for $150.0 million and, at the discretion of the lender, on an uncommitted basis for an additional $150.0 million.

(5)

Under this participation agreement, the lender provides financing on an uncommitted basis for $50.0 million to $100.0 million at the discretion of the lender. The participation agreement allows the lender to acquire a 100% beneficial interest in the underlying mortgage loans. The transaction does not qualify for sale accounting treatment and is accounted for as a secured borrowing. The lender earns the stated interest rate of the underlying mortgage loans while the loans are financed under the participation agreement.


(6)	Under this repurchase agreement, the lender provides financing on a committed basis for $75.0 million and, at the discretion of the lender, on an uncommitted basis for an additional $75.0 million. On September 2, 2014, the maturity date of this facility was extended to October 2, 2014. On October 2, 2014, the maturity date was further extended to September 1, 2015.


(7)	Under this repurchase agreement, the lender provides financing on a committed basis for $150.0 million and, at the discretion of the lender, on an uncommitted basis for an additional $300.0 million. On October 24, 2014, this facility was repaid in full and terminated.

(8)

On September 2, 2014, the maturity date of this facility was extended to October 2, 2014, and the maximum borrowing capacity was reduced to $37.5 million on a committed basis plus an additional $37.5 million on an uncommitted basis at the discretion of the lender. On October 1, 2014, the maturity date was extended to October 31, 2014. Effective October 31, 2014, the maturity date was further extended to November 14, 2014.


(9)	In August 2014, the maturity date of this facility was extended to May 28, 2015.


(10)	Represents repurchase agreement for Class A-2 and A-3 notes issued by Ocwen Real Estate Asset Liquidating Trust 2007-1 which have a current face value of $22.4 million at September 30, 2014. This agreement has no stated credit limit and lending is determined for each transaction based on the acceptability of the securities presented as collateral.

Senior Unsecured Notes

On May 12, 2014, Ocwen completed the issuance and sale of $350.0 million of its 6.625% Senior Notes due 2019 (the Senior Unsecured Notes) in a private offering. We received net proceeds of $343.3 million from the sale of the Senior Unsecured Notes after deducting underwriting fees and offering expenses. The Senior Unsecured Notes are general senior unsecured obligations of Ocwen and will mature on May 15, 2019. Interest is payable semi-annually on May 15^th and November 15^th. The Senior Unsecured Notes are not guaranteed by any of Ocwen’s subsidiaries.

At any time prior to May 15, 2016, Ocwen may redeem all or a part of the Senior Unsecured Notes, upon not less than 30 nor more than 60 days’ notice, at a redemption price equal to 100.0% of the principal amount of the Senior Unsecured Notes redeemed, plus the Applicable Premium as defined in the related indenture agreement (the Indenture), plus accrued and unpaid interest and Additional Interest as defined in the Indenture, if any, on the Senior Unsecured Notes redeemed. The Additional Premium on a Note is the greater of 1% of the principal amount of the Note or the redemption price at May 15, 2016 plus all interest due from the redemption date through May 15, 2016, less the principal amount of the Note. Additional Interest is earned by the Senior Unsecured Notes if the deadline for exchange or registration of the Senior Unsecured Notes is not met and ranges from an initial 0.25% to a maximum 1.0%.

On or after May 15, 2016, Ocwen may redeem all or a part of the Senior Unsecured Notes, upon not less than 30 nor more than 60 days’ notice, at the redemption prices (expressed as percentages of principal amount) specified in the Indenture plus accrued and unpaid interest and Additional Interest, if any. The redemption prices during the twelve-month periods beginning on May 15^th of each year are as follows:



Year		Redemption Price
2016		104.969%
2017		103.313%
2018 and thereafter		100.000%

At any time prior to May 15, 2016, Ocwen may, at its option, use the net cash proceeds of one or more Equity Offerings as defined in the Indenture to redeem up to 35% of the principal amount of all Senior Unsecured Notes issued at a redemption price equal to 106.625% of the principal amount of the Senior Unsecured Notes redeemed plus accrued and unpaid interest and Additional Interest, if any, provided that: (i) at least 65% of the principal amount of all Senior Unsecured Notes issued under the Indenture remains outstanding immediately after any such redemption; and (ii) Ocwen makes such redemption not more than 120 days after the consummation of any such Equity Offering.

Upon the occurrence of a change of control as defined in the Indenture, Ocwen is required to make an offer to the holders of the Senior Unsecured Notes to repurchase the Senior Unsecured Notes at a purchase price equal to 101.0% of the principal amount of the Senior Unsecured Notes purchased plus accrued and unpaid interest and Additional Interest, if any. Each holder will have the right to require that the Ocwen purchase all or a portion of the holder’s Senior Unsecured Notes pursuant to the offer.

The Indenture contains various covenants that could, unless certain conditions are met, limit or restrict the ability of Ocwen and its subsidiaries to engage in specified types of transactions. Among other things, these covenants could potentially limit or restrict the ability of Ocwen and its subsidiaries to:


•	incur additional debt or issue preferred stock;


•	pay dividends or make distributions on or purchase equity interests of Ocwen;


•	repurchase or redeem debt that is subordinate to the Senior Unsecured Notes prior to maturity;


•	make investments or other restricted payments;


•	create liens on assets to secure debt of Ocwen or any guarantor of the Senior Unsecured Notes;


•	sell or transfer assets;


•	enter into transactions with “affiliates” (any entity that controls, is controlled by or is under common control with Ocwen or certain of its subsidiaries); and


•	enter into mergers, consolidations, or sales of all or substantially all of Ocwen’s assets.

Many of the restrictive covenants will be suspended if the Senior Unsecured Notes achieve an investment grade rating from both Moody’s Investors Service, Inc. (Moody’s) and Standard & Poor’s Ratings Services (S&P) and no default or event of default, as specified in the Indenture, has occurred and is continuing. However, covenants that are suspended as a result of achieving these ratings will again apply if Moody’s or S&P withdraws its investment grade rating or downgrades the rating assigned to the Senior Unsecured Notes below an investment grade rating.

Ocwen contemporaneously entered into a Registration Rights Agreement under which it agreed for the benefit of the initial purchasers of the Senior Unsecured Notes to use commercially reasonable efforts to file a registration statement and to have the registration statement become effective on or prior to 270 days after the closing of the offering. The registration statement would relate to a registered offer to exchange the Senior Unsecured Notes for other notes (referred to as the exchange notes) that would be issued by Ocwen, would be registered with the SEC and would have substantially identical terms as the Senior Unsecured Notes. If Ocwen is not able to effect the exchange offer, it will instead use commercially reasonable efforts to file and cause to become effective a shelf registration statement relating to resales of the Senior Unsecured Notes.

In connection with our issuance of the Senior Unsecured Notes, we incurred certain costs that we capitalized and are amortizing over the period from the date of issuance to May 15, 2019. The unamortized balance of these issuance costs was $6.1 million at September 30, 2014.

Covenants

Match funded liabilities and other secured borrowings are collateralized by specific assets. Under the terms of these borrowing agreements, we are subject to various qualitative and quantitative covenants. Collectively, these covenants include:


•	Specified net worth requirements;


•	Restrictions on future indebtedness; and


•	Monitoring and reporting of various specified transactions or events, including specific reporting on defined events affecting collateral underlying certain borrowing agreements.

Financial covenants in our borrowing agreements require that we maintain consolidated tangible net worth, the most restrictive of which is $630.0 million plus 65% of quarterly net income, without adjustment for quarterly net losses, beginning with the three months ended December 31, 2012. The required consolidated tangible net worth in connection with this agreement was $957.1 million at September 30, 2014. Should we fail to be in compliance with these requirements, remedies include but are not limited to, at the option of the facility provider, termination of further funding, acceleration of outstanding obligations, enforcement of liens against the assets securing or otherwise supporting the agreement, and other legal remedies. Our lenders can waive their contractual rights in the event of a default. Our borrowing agreements generally include cross default provisions such that a default under one agreement could trigger defaults under other agreements. We believe that we are in compliance with all of our qualitative and quantitative covenants at the date of these financial statements.

Other Liabilities

9 Months Ended

Sep. 30, 2014

Other Liabilities

Note 12 – Other Liabilities

Other liabilities were comprised of the following at the dates indicated:



	September 30, 2014		December 31, 2013
Liability for indemnification obligations (1)	$	143,836	$	192,716
Accrued expenses (2)	227,309		108,870
Payable to loan servicing and subservicing investors	83,778		33,501
Due to related parties (3)	60,235		77,997
Liability for selected tax items	30,627		27,273
Checks held for escheat	19,880		24,392
Liability for certain foreclosure matters (4)	—		66,948
Additional purchase price due seller - ResCap Acquisition (5)	—		54,220
Other	65,976		58,678
	$	631,641	$	644,595


(1)	See Note 22 – Commitments and Contingencies for additional information.


(2)	Accrued expenses at September 30, 2014 includes $100.0 million related to certain regulatory contingencies. See Note 22 – Commitments and Contingencies for additional information.


(3)	See Note 20 – Related Party Transactions for additional information.


(4)	This liability was settled in May 2014. See Note 22 – Commitments and Contingencies for additional information regarding the National Mortgage Settlement.


(5)	See Note 3 – Business Acquisitions for additional information.

Mezzanine Equity

9 Months Ended

Sep. 30, 2014

Temporary Equity Disclosure [Abstract]

Mezzanine Equity

Note 13 – Mezzanine Equity

On July 14, 2014, holders of our Series A Perpetual Convertible Preferred Stock (the Preferred Shares) elected to convert the remaining 62,000 shares into 1,950,296 shares of common stock.

The following table summarizes the activity in mezzanine equity for the nine months ended September 30:



	2014			2013
Beginning balance	$	60,361		$	153,372
Conversion of Preferred Shares	(62,000		)	(100,000		)
Accretion of beneficial conversion feature discount (Deemed dividend) (1)	1,639			6,573
Ending balance	$	—		$	59,945


(1)	Accretion includes an accelerated write-off of the unamortized discount of $0.8 million and $3.5 million related to the conversion of Preferred Shares during 2014 and 2013, respectively.

Equity

9 Months Ended

Sep. 30, 2014

Equity [Abstract]

Equity

Note 14 – Equity

Common Stock

On July 14, 2014, Ocwen paid $72.3 million to repurchase from the holders of our Preferred Shares all 1,950,296 shares of Ocwen common stock that were issued upon their election to convert the remaining 62,000 Preferred Shares into shares of Ocwen common stock.

On October 31, 2013, we announced that Ocwen’s Board of Directors had authorized a share repurchase program for an aggregate of up to $500.0 million of Ocwen’s issued and outstanding shares of common stock. Repurchases may be made in open market transactions at prevailing market prices or in privately negotiated transactions. Unless we amend the share repurchase program or repurchase the full $500.0 million amount by an earlier date, the share repurchase program will continue through July 2016. No assurances can be given as to the amount of shares, if any, that we may repurchase in any given period. The repurchase of shares issued in connection with the conversion of our Series A Perpetual Convertible Preferred Stock (the Preferred Shares) is not considered to be part of this repurchase program and, therefore, does not count against the $500.0 million aggregate value limit. During the nine months ended September 30, 2014, we completed the repurchase of 7,970,353 shares of common stock in the open market under this program for a total purchase price of $253.4 million. To date through September 30, 2014, we have completed the repurchase of 9,096,060 total shares of common stock under this program for an aggregate purchase price of $313.4 million. See Note 23 – Subsequent Events for information regarding repurchases completed subsequent to September 30, 2014.

Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss (AOCL), net of income taxes, were as follows at the dates indicated:



	September 30, 2014		December 31, 2013
Unrealized losses on cash flow hedges	$	8,663	$	10,026
Other	121		125
	$	8,784	$	10,151

See Note 15 – Derivative Financial Instruments and Hedging Activities for the changes in the components of AOCL for the nine months ended September 30, 2014 and 2013.

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

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Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments and Hedging Activities

9 Months Ended

Sep. 30, 2014

Derivative Financial Instruments and Hedging Activities

Note 15 – Derivative Financial Instruments and Hedging Activities

Because many of our current derivative agreements are not exchange-traded, we are exposed to credit loss in the event of nonperformance by the counterparty to the agreements. We control this risk through credit monitoring procedures including financial analysis, dollar limits and other monitoring procedures. The notional amount of our contracts does not represent our exposure to credit loss.

The following table summarizes the changes in the notional balances of our holdings of derivatives during the nine months ended September 30, 2014:



	IRLCs			Forward MBS Trades			Interest Rate Caps
Beginning notional balance	$	751,436		$	950,648		$	1,868,000
Additions	3,795,311			6,951,828			100,000
Amortization	94,571			—			(490,000		)
Maturities	(3,298,265		)	(3,379,589		)	—
Terminations	(876,254		)	(3,762,592		)	—
Ending notional balance	$	466,799		$	760,295		$	1,478,000

Fair value of derivative assets (liabilities) at:
September 30, 2014	$	6,117		$	(1,089	)	$	91
December 31, 2013	$	8,433		$	6,905		$	442

Maturity	Nov. 2014 - Jan. 2014			Nov. 2014 - Dec. 2014			Nov. 2016

Foreign Currency Exchange Rate Risk Management

We periodically enter into foreign exchange forward contracts to hedge against the effect of changes in the value of the India Rupee on amounts payable to our India subsidiaries. Our operations in Uruguay and the Philippines also expose us to foreign currency exchange rate risk, but we currently consider this risk to be insignificant.

Interest Rate Management

Match Funded Liabilities

We terminated our interest rate swaps on May 31, 2013 primarily because the custodial account float balances, which earn a variable rate of interest, are well in excess of variable rate borrowings under advance facilities. The earnings on these deposits reduce our exposure to changes in interest rates. As required by certain of our advance financing arrangements, we have purchased interest rate caps to minimize future interest rate exposure from increases in one-month LIBOR interest rates.

Loans Held for Sale, at Fair Value

The mortgage loans held for sale which we carry at fair value are subject to interest rate and price risk from the loan funding date until the date the loan is sold into the secondary market. Generally, the fair value of a loan will decline in value when interest rates increase and will rise in value when interest rates decrease. To mitigate this risk, we enter into forward MBS trades to provide an economic hedge against those changes in fair value on mortgage loans held for sale. Forward MBS trades are primarily used to fix the forward sales price that will be realized upon the sale of mortgage loans into the secondary market.

Interest Rate Lock Commitments

Outstanding IRLCs are subject to interest rate risk and related price risk during the period from the date of the commitment through the loan funding date or expiration date. The borrower is not obligated to obtain the loan, thus we are subject to fallout risk related to IRLCs, which is realized if approved borrowers choose not to close on the loans within the terms of the IRLCs. Our interest rate exposure on these derivative loan commitments is hedged with freestanding derivatives such as forward contracts. We enter into forward contracts with respect to fixed rate loan commitments.

MSRs, at Fair Value

Effective April 1, 2013, we terminated our hedging program for fair value MSRs. Prior to the termination, we used economic hedges including interest rate swaps, U.S. Treasury futures and forward contracts to minimize the effects of loss in value of these MSRs associated with increased prepayment activity that generally results from declining interest rates.

The following summarizes our open derivative positions at September 30, 2014 and the gains (losses) on all derivatives used in each of the identified hedging programs for the year to date period then ended. None of the derivatives was designated as a hedge for accounting purposes at September 30, 2014:



Purpose	Expiration Date	Notional Amount		Fair Value (1)			Gains / (Losses)			Consolidated Statements of Operations Caption
Hedge the effect of changes in interest rates on interest expense on borrowings
Interest rate caps
Hedge the effect of changes in 1ML on advance funding facilities	Nov. 2016	$	1,478,000	$	91		$	(374	)	Other, net
Interest rate risk of mortgage loans held for sale and of IRLCs
Forward MBS trades	Nov. 2014 - Dec. 2014	760,295		(1,089		)	(32,183		)	Gain on loans held for sale, net
IRLCs	Nov. 2014 - Jan. 2014	466,799		6,117			(2,315		)	Gain on loans held for sale, net
Total derivatives				$	5,119		$	(34,872	)


(1)	Derivatives are reported at fair value in Receivables, Other assets and Other liabilities on our unaudited Consolidated Balance Sheet.

Included in AOCL at September 30, 2014 and September 30, 2013, respectively, were $9.2 million and $12.2 million of deferred unrealized losses, before taxes of $0.5 million and $4.5 million, respectively, on interest rate swaps that we designated as cash flow hedges. Changes in AOCL during the nine months ended September 30 were as follows:



	2014			2013
Beginning balance	$	10,151		$	6,441
Additional net losses on cash flow hedges	—			12,363
Ineffectiveness of cash flow hedges reclassified to earnings	—			(657		)
Losses on terminated hedging relationships amortized to earnings	(1,579		)	(9,434		)
Net increase (decrease) in accumulated losses on cash flow hedges	(1,579		)	2,272
Decrease (increase) in deferred taxes on accumulated losses on cash flow hedges	217			(933		)
(Decrease) increase in accumulated losses on cash flow hedges, net of taxes	(1,362		)	1,339
Other, net of taxes	(5		)	(711		)
Ending balance	$	8,784		$	7,069

Projected amortization of deferred unrealized losses from AOCL to earnings during the coming twelve months is $1.6 million.

Other income (expense), net, includes the following related to derivative financial instruments for the three and nine months ended September 30:



	Three Months						Nine Months
	2014			2013			2014			2013
Losses on economic hedges	$	(6	)	$	(103	)	$	(374	)	$	(3,822	)
Ineffectiveness of cash flow hedges	—			—			—			(657		)
Write-off of losses in AOCL for a discontinued hedge relationship	(408		)	(7,780		)	(1,580		)	(9,434		)
	$	(414	)	$	(7,883	)	$	(1,954	)	$	(13,913	)

The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts.

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Other Income and Expenses [Abstract]

Interest Expense

9 Months Ended

Sep. 30, 2014

Interest Expense

Note 16 – Interest Expense

The following table presents the components of interest expense for the three and nine months ended September 30:



	Three months				Nine Months
	2014		2013		2014		2013
Financing liabilities (1) (2)	$	88,246	$	81,192	$	281,930	$	185,116
Other secured borrowings	20,790		21,608		62,359		60,211
Match funded liabilities	15,097		10,775		46,762		65,774
Senior unsecured notes	6,141		—		9,466		—
Other	2,775		3,310		8,612		8,463
	$	133,049	$	116,885	$	409,129	$	319,564

(1)



	Three months				Nine Months
	2014		2013		2014		2013
Servicing fees collected on behalf of HLSS	$	177,113	$	200,838	$	553,423	$	431,795
Less: Subservicing fee retained by Ocwen	83,550		102,040		266,514		214,587
Net servicing fees remitted to HLSS	93,563		98,798		286,909		217,208
Less: Reduction in financing liability	8,736		17,764		12,960		32,357
Interest expense on HLSS financing liability	$	84,827	$	81,034	$	273,949	$	184,851


(2)	Interest expense that we expect to be paid on the HMBS-related borrowings is included with net fair value gains in Other revenues. See Note 2 – Securitizations and Variable Interest Entities for additional information.

Income Taxes	9 Months Ended
Income Taxes	Sep. 30, 2014
Income Tax Disclosure [Abstract]
Income Taxes	Note 17 – Income Taxes Our effective tax rate for the nine months ended September 30, 2014 and 2013 was 31.8% and 11.9%, respectively. The increase in our effective tax rate is due primarily to changes in the jurisdictional mix of income and expenses. Ocwen avails itself of certain tax benefits in the USVI and other international jurisdictions, which produce a favorable effect on our effective tax rate. To the extent that our pre-tax earnings are weighted more heavily in these lower tax rate jurisdictions, our effective tax rate decreases. If a greater proportion of our pre-tax earnings are earned in higher tax rate jurisdictions, our effective tax rate increases. As of September 30, 2014 and December 31, 2013, we had approximately $35.1 million and $23.7 million, respectively, of unrecognized tax benefits, all of which if recognized would affect the effective tax rate. We accrue interest and penalties related to unrecognized tax benefits in our provision for income taxes. At September 30, 2014 and December 31, 2013, we had accrued interest and penalties related to unrecognized tax benefits of $5.5 million and $3.6 million, respectively. It is reasonably possible that there could be a change in the amount of our unrecognized tax benefits within the next 12 months due to activities of the Internal Revenue Service or other taxing authorities, including proposed assessments of additional tax, possible settlement of audit issues, or the expiration of applicable statutes of limitations. The range of the possible change in unrecognized tax benefits within the next 12 months cannot be reasonably estimated at September 30, 2014. However, we do not expect that change to have a material impact on our financial position or results of operations. Our major jurisdiction tax years that remain subject to examination are our U.S. federal tax return for the years ended December 31, 2008 through the present and our India corporate tax returns for the years ended March 31, 2004 through the present. Our U.S. consolidated federal tax return for the years ended December 31, 2008, 2009 and 2010 are currently under examination. In addition, the U.S. federal tax return filed by our USVI subsidiary for the year ended December 31, 2012 is currently under examination.

Basic and Diluted Earnings (Loss) per Share

9 Months Ended

Sep. 30, 2014

Earnings Per Share [Abstract]

Basic and Diluted Earnings (Loss) per Share

Note 18 – Basic and Diluted Earnings (Loss) per Share

Basic EPS excludes common stock equivalents and is calculated by dividing net income attributable to Ocwen common stockholders by the weighted average number of common shares outstanding during the year. We calculate diluted EPS by dividing net income attributable to Ocwen, as adjusted to add back preferred stock dividends, by the weighted average number of common shares outstanding including the potential dilutive common shares related to outstanding stock options, restricted stock awards and the Preferred Shares.

The following is a reconciliation of the calculation of basic EPS to diluted EPS for the three and nine months ended September 30:



	Three Months					Nine Months
	2014			2013		2014		2013
Basic EPS:
Net income (loss) attributable to Ocwen common stockholders	$	(76,189	)	$	54,725	$	49,273	$	164,120

Weighted average shares of common stock	130,551,197			135,787,834		133,318,381		135,705,892

Basic EPS	$	(0.58	)	$	0.40	$	0.37	$	1.21

Diluted EPS (1):
Net income (loss) attributable to Ocwen common stockholders	$	(76,189	)	$	54,725	$	49,273	$	164,120
Preferred stock dividends (1) (2)	—			—		—		—
Adjusted net income (loss) attributable to Ocwen	$	(76,189	)	$	54,725	$	49,273	$	164,120

Weighted average shares of common stock	130,551,197			135,787,834		133,318,381		135,705,892
Effect of dilutive elements (1):
Preferred Shares (1) (2)	—			—		—		—
Stock options	—			4,263,965		3,558,689		4,030,297
Common stock awards	—			5,396		4,256		11,301
Dilutive weighted average shares of common stock	130,551,197			140,057,195		136,881,326		139,747,490

Diluted EPS	$	(0.58	)	$	0.39	$	0.36	$	1.17

Stock options excluded from the computation of diluted EPS:
Anti-dilutive (3)	91,250			—		47,083		—
Market-based (4)	295,000			547,500		295,000		547,500


(1)	For the three months ended September 30, 2014, we have excluded the effect of the Preferred Shares, stock options and common stock awards from the computation of diluted EPS because of the anti-dilutive effect of our reported net loss.

(2)

The effect of our Preferred Shares on diluted EPS is computed using the if-converted method. For purposes of computing diluted EPS, we assume the conversion of the Preferred Shares into shares of common stock unless the effect is anti-dilutive. Conversion of the Preferred Shares has not been assumed for the nine months ended September 30, 2014 and the three and nine months ended September 30, 2013 because the effect would have been antidilutive.


(3)	These options were anti-dilutive because their exercise price was greater than the average market price of our stock.


(4)	Shares that are issuable upon the achievement of certain performance criteria related to Ocwen’s stock price and an annualized rate of return to investors.

Business Segment Reporting

9 Months Ended

Sep. 30, 2014

Segment Reporting [Abstract]

Business Segment Reporting

Note 19 – Business Segment Reporting

Our business segments reflect the internal reporting that we use to evaluate operating performance of services and to assess the allocation of our resources. A brief description of our current business segments is as follows:

Servicing. This segment is primarily comprised of our core residential servicing business. We provide residential and commercial mortgage loan servicing, special servicing and asset management services. We earn fees for providing these services to owners of the mortgage loans and foreclosed real estate. In most cases, we provide these services either because we purchased the MSRs from the owner of the mortgage, retained the MSRs on the sale of residential mortgage loans or because we entered into a subservicing or special servicing agreement with the entity that owns the MSR. Our residential servicing portfolio includes conventional, government insured and non-Agency loans. Non-Agency loans include subprime loans which represent residential loans that generally did not qualify under GSE guidelines or have subsequently become delinquent.

Lending. The Lending segment is focused on originating and purchasing conventional and government insured residential forward and reverse mortgage loans mainly through our correspondent lending arrangements, broker relationships and directly with mortgage customers. The loans are typically sold shortly after origination into a liquid market on a servicing retained basis.

Corporate Items and Other. Corporate Items and Other includes revenues and expenses that are not directly related to other reportable segments, business activities that are individually insignificant, interest income on short-term investments of cash, interest expense on corporate debt and certain corporate expenses. Business activities that are not considered to be of continuing significance include subprime loans held for sale (at lower of cost or fair value), investments in unconsolidated entities and affordable housing investment activities. Corporate Items and Other also included the diversified fee-based businesses that we acquired as part of the acquisitions of Homeward and ResCap and subsequently sold to Altisource on March 29, 2013 and April 12, 2013, respectively.

We allocate interest income and expense to each business segment for funds raised or for funding of investments made, including interest earned on cash balances and short-term investments and interest incurred on corporate debt. We also allocate expenses generated by corporate support services to each business segment.

Financial information for our segments is as follows:



	Servicing			Lending			Corporate Items and Other			Corporate Eliminations			Business Segments Consolidated
Results of Operations
Three months ended September 30, 2014
Revenue	$	485,303		$	26,877		$	1,557		$	(39	)	$	513,698
Operating expenses (1)	313,964			22,632			118,482			(39		)	455,039
Income (loss) from operations	171,339			4,245			(116,925		)	—			58,659
Other income (expense):
Interest income	903			4,825			865			—			6,593
Interest expense	(124,106		)	(2,601		)	(6,342		)	—			(133,049		)
Other	(3,618		)	139			(990		)	—			(4,469		)
Other income (expense), net	(126,821		)	2,363			(6,467		)	—			(130,925		)
Income (loss) before income taxes	$	44,518		$	6,608		$	(123,392	)	$	—		$	(72,266	)

Three months ended September 30, 2013
Revenue	$	496,302		$	33,539		$	1,801		$	(402	)	$	531,240
Operating expenses (1)	305,654			29,504			11,143			(41		)	346,260
Income (loss) from operations	190,648			4,035			(9,342		)	(361		)	184,980
Other income (expense):
Interest income	859			3,066			1,454			—			5,379
Interest expense (2)	(113,678		)	(3,279		)	72			—			(116,885		)
Other	(6,631		)	1,843			398			361			(4,029		)
Other income (expense), net	(119,450		)	1,630			1,924			361			(115,535		)
Income (loss) before income taxes	$	71,198		$	5,665		$	(7,418	)	$	—		$	69,445



	Servicing			Lending			Corporate Items and Other			Corporate Eliminations			Business Segments Consolidated
Nine months ended September 30, 2014
Revenue	$	1,526,606		$	86,811		$	4,734		$	(118	)	$	1,618,033
Operating expenses (1)	919,998			81,261			148,555			(118		)	1,149,696
Income (loss) from operations	606,608			5,550			(143,821		)	—			468,337
Other income (expense):
Interest income	1,805			13,117			2,550			—			17,472
Interest expense	(391,122		)	(8,271		)	(9,736		)	—			(409,129		)
Other	(4,622		)	3,846			710			—			(66		)
Other income (expense), net	(393,939		)	8,692			(6,476		)	—			(391,723		)
Income (loss) before income taxes	$	212,669		$	14,242		$	(150,297	)	$	—		$	76,614

Nine months ended September 30, 2013
Revenue	$	1,381,872		$	81,180		$	19,758		$	(492	)	$	1,482,318
Operating expenses (1)	795,645			69,543			95,361			(131		)	960,418
Income (loss) from operations	586,227			11,637			(75,603		)	(361		)	521,900
Other income (expense):
Interest income	1,382			12,432			3,516			—			17,330
Interest expense (2)	(309,606		)	(10,108		)	150			—			(319,564		)
Other	(30,961		)	6,852			2,977			361			(20,771		)
Other income (expense), net	(339,185		)	9,176			6,643			361			(323,005		)
Income (loss) before income taxes	$	247,042		$	20,813		$	(68,960	)	$	—		$	198,895



	Servicing		Lending		Corporate Items and Other		Corporate Eliminations		Business Segments Consolidated
Total Assets
September 30, 2014	$	6,059,359	$	1,706,964	$	589,317	$	—	$	8,355,640

December 31, 2013	$	6,295,976	$	1,195,812	$	435,215	$	—	$	7,927,003

September 30, 2013	$	4,086,378	$	704,641	$	609,236	$	—	$	5,400,255


(1)	Depreciation and amortization expense are as follows:



	Servicing		Lending		Corporate Items and Other		Business Segments Consolidated
For the three months ended September 30, 2014
Depreciation expense	$	2,636	$	98	$	3,022	$	5,756
Amortization of mortgage servicing rights	60,689		94		—		60,783
Amortization of debt discount	331		—		344		675
Amortization of debt issuance costs	1,114		—		—		1,114

For the three months ended September 30, 2013
Depreciation expense	$	3,589	$	135	$	2,973	$	6,697
Amortization of mortgage servicing rights	79,035		148		—		79,183
Amortization of debt discount	330		—		—		330
Amortization of debt issuance costs	1,178		—		—		1,178

For the nine months ended September 30, 2014
Depreciation expense	$	8,099	$	235	$	8,267	$	16,601
Amortization of mortgage servicing rights	185,263		613		199		186,075
Amortization of debt discount	991		—		513		1,504
Amortization of debt issuance costs	3,241		—		—		3,241

For the nine months ended September 30, 2013
Depreciation expense	$	9,968	$	209	$	6,976	$	17,153
Amortization of mortgage servicing rights	197,287		148		—		197,435
Amortization of debt discount	1,082		—		—		1,082
Amortization of debt issuance costs	3,264		—		—		3,264

(2)

Includes interest expense related to financing liabilities recorded in connection with the HLSS Transactions. As discussed in Note 1A — Restatement of Previously Issued Consolidated Financial Statements, we are restating our previously reported consolidated operating results for the three and nine months ended September 30, 2013 to correct an error in the accounting applicable to the financing liabilities in connection with Rights to MSRs sold to HLSS.

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

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Related Party Transactions

Related Party Transactions

9 Months Ended

Sep. 30, 2014

Note 20 – Related Party Transactions

Ocwen’s Executive Chairman of the Board of Directors, William C. Erbey, also serves as Chairman of the Board of Altisource, HLSS, Altisource Residential Corporation (Residential) and Altisource Asset Management Corporation (AAMC). As a result, he has obligations to Ocwen as well as to Altisource, HLSS, Residential and AAMC. As of September 30, 2014, Mr. Erbey owned or controlled approximately 14% of the common stock of Ocwen, approximately 29% of the common stock of Altisource, approximately 1% of the common stock of HLSS, approximately 28% of the common stock of AAMC and approximately 4% of the common stock of Residential. At September 30, 2014, Mr. Erbey also held 3,620,498 options to purchase Ocwen common stock, of which 3,220,498 were exercisable. On April 22, 2014, Mr. Erbey surrendered 1,000,000 of his options to purchase Ocwen common stock. During the second quarter of 2014, Ocwen recognized the remaining $5.4 million of previously unrecognized compensation expense associated with these options as of the date of surrender. At September 30, 2014, Mr. Erbey held 873,501 options to purchase Altisource common stock and 87,350 options to purchase AAMC common stock, all of which were exercisable.

Our business is currently dependent on many of the services and products provided by Altisource under various long-term contracts, including the Services Agreements, Technology Products Services Agreements, Intellectual Property Agreements and the Data Center and Disaster Recovery Services Agreements. Under the Services Agreements, Altisource provides various business process outsourcing services. Under the Technology Products Services Agreements and the Data Center and Disaster Recovery Services Agreements, Altisource provides technology products and support services. In addition, we have entered into (i) Support Services Agreements pursuant to which we and Altisource provide administrative and corporate services to each other and (ii) a Data Access and Services Agreement pursuant to which we make available to Altisource certain data from our servicing portfolio in exchange for a per asset fee. The revenues and expenses related to our agreements with Altisource for the three and nine months ended September 30, 2014 and 2013 are set forth in the table below.

Services provided by Altisource under the Services Agreements with Ocwen are generally charged to the borrower and/or loan investor. Accordingly, such services, while derived from our loan servicing portfolio, are not reported as expenses by Ocwen. These services include residential property valuation, residential property preservation and inspection services, title services and real estate sales services. We believe the rates charged for these services are market rates as they are materially consistent with one or more of the following: the rates Ocwen pays to or observes from other service providers and the fees we believe Altisource charges to other customers for comparable services.

Ocwen and HLSS provide each other certain professional services including valuation analysis of potential MSR acquisitions, treasury management services and other similar services, licensing and regulatory compliance support services, risk management services and other similar services under a Professional Services Agreement.

We have also entered into a long-term servicing and a support services agreement with Residential and AAMC, respectively.

The following table summarizes revenues and expenses related to our agreements with Altisource, HLSS, AAMC and Residential (and, as applicable, their subsidiaries) for the three and nine months ended September 30 and net amounts receivable or payable at the dates indicated:



	Three Months				Nine Months
	2014		2013		2014		2013
Revenues and Expenses:
Altisource:
Revenues	$	10,716	$	5,185	$	30,007	$	15,390
Expenses	27,099		13,153		70,577		36,650
HLSS:
Revenues	$	84	$	20	$	458	$	172
Expenses	345		386		1,590		1,615
AAMC
Revenues	$	251	$	—	$	952	$	—
Residential
Revenues	$	4,618	$	493	$	12,141	$	606



	September 30, 2014			December 31, 2013
Net Receivable (Payable)
Altisource	$	(12,626	)	$	(3,843	)
HLSS	(17,812		)	(59,505		)
AAMC	278			943
Residential	—			50
	$	(30,160	)	$	(62,355	)

As disclosed in Note 4 – Fair Value, Ocwen has sold to HLSS certain Rights to MSRs and related servicing advances. During the nine months ended September 30, 2013, we completed HLSS Transactions relating to Rights to MSRs for $109.8 billion of UPB and received $388.5 million from the sale of Rights to MSRs and $3.5 billion from the sale of the related advances. We did not complete any sales of Rights to MSRs to HLSS during the nine months ended September 30, 2014. If and when legal ownership of the MSRs is transferred to HLSS, OLS will subservice the MSRs pursuant to a subservicing agreement, as amended, with HLSS.

On March 3, 2014, in the first Ginnie Mae EBO Transaction, Ocwen sold Ginnie Mae EBO Loans and transferred the related servicing advances to HLSS Mortgage for $612.3 million. On May 2, 2014, in connection with the second Ginnie Mae EBO Transaction, we transferred $20.2 million of advances to HLSS SEZ LP. The transfer of advances in both transactions did not qualify as sales for accounting purposes. See Note 5 – Loans Held for Sale for additional information.

On June 26, 2014, we entered into a servicing agreement with HLSS Mortgage LP under which we agreed to service mortgage loans with a UPB of approximately $396.9 million as of that date. On July 31, 2014, mortgage loans with a UPB of $92.9 million were added under this agreement.

On July 14, 2014, holders of our Preferred Shares elected to convert the remaining shares into shares of common stock. On the same date, Ocwen repurchased all of the converted shares of common stock. The Preferred Shares were originally issued to certain private equity funds managed by WL Ross & Co. LLC (the Funds) as partial consideration in the acquisition of Homeward. Mr. Wilbur L. Ross, Jr. is the Chairman and Chief Executive Officer of WL Ross & Co. LLC and Invesco Private Capital, Inc. and the managing member of El Vedado, LLC, each of which directly or indirectly controls or manages the Funds. Mr. Ross has been a director of Ocwen since March 2013. See Note 13 – Mezzanine Equity and Note 14 – Equity for additional information.

In accordance with the terms of the Homeward merger agreement, we are entitled to assert retained liabilities claims on or before September 26, 2014, inclusive of reasonable liabilities in excess of the retained liabilities acquired and subject to certain additional procedures as set forth in the merger agreement. The aggregate amount of the indemnification recovery is limited to a maximum of $75.0 million. We have recorded receivables of $28.3 million and $13.6 million at September 30, 2014 and December 31, 2013, respectively, related to losses expected to be indemnified through retained liabilities claims.

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

Commitments and Contingencies Disclosure [Abstract]

Regulatory Requirements	9 Months Ended
Regulatory Requirements	Sep. 30, 2014
Brokers and Dealers [Abstract]
Regulatory Requirements	Note 21 – Regulatory Requirements Regulation Our business is subject to extensive regulation by federal, state and local governmental authorities, including the Consumer Financial Protection Bureau (CFPB), the Federal Trade Commission (FTC), the SEC and various state agencies that license, audit and conduct examinations of our mortgage servicing, origination and collection activities. From time to time, we also receive requests from federal, state and local agencies for records, documents and information relating to our policies, procedures and practices regarding our mortgage servicing, origination and collection activities. In addition, the GSEs and their conservator, the Federal Housing Finance Authority (FHFA), Ginnie Mae, various investors, non-Agency securitization trustees and others also subject us to periodic reviews and audits. As a result of the current regulatory environment, we have faced and expect to continue to face increased regulatory and public scrutiny as well as stricter and more comprehensive regulation of our business. We continue to work diligently to assess and understand the implications of the regulatory environment in which we operate and the regulatory changes that we are facing. We devote substantial resources to regulatory compliance, while, at the same time, striving to meet the needs and expectations of our customers and clients. Our failure to comply with applicable federal, state and local consumer protection laws could lead to (i) loss of our licenses and approvals to engage in our servicing and lending businesses, (ii) governmental investigations and enforcement actions, (iii) administrative fines and penalties and litigation, (iv) civil and criminal liability, including class action lawsuits, (v) inability to raise capital and (vi) inability to execute on our business strategy, including our growth plans. We must comply with a number of federal, state and local consumer protection laws including, among others, the Gramm-Leach-Bliley Act, the Fair Debt Collection Practices Act, the Real Estate Settlement Procedures Act (RESPA), the Truth in Lending Act (TILA), the Fair Credit Reporting Act, the Servicemembers Civil Relief Act, the Homeowners Protection Act, the Federal Trade Commission Act and, more recently, the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) and state foreclosure laws. These statutes apply to loan origination, debt collection, use of credit reports, safeguarding of non-public personally identifiable information about our customers, foreclosure and claims handling, investment of and interest payments on escrow balances and escrow payment features, and mandate certain disclosures and notices to borrowers. These requirements can and do change as statutes and regulations are enacted, promulgated, amended, interpreted and enforced. The recent trend among federal, state and local lawmakers and regulators has been toward increasing laws, regulations and investigative proceedings with regard to residential real estate lenders and servicers. We expect to continue to incur substantial ongoing operational and system costs in order to comply with these laws and regulations. Furthermore, there may be additional federal or state laws enacted that place additional obligations on servicers and originators of residential mortgage loans. There are a number of foreign laws and regulations that are applicable to our operations in India, Uruguay and the Philippines, including acts that govern licensing, employment, safety, taxes, insurance and the laws and regulations that govern the creation, continuation and the winding up of companies as well as the relationships between shareholders, our corporate entities, the public and the government in these countries. Non-compliance with the laws and regulations of India, Uruguay or the Philippines could result in (i) restrictions on our operations in these counties, (ii) fines, penalties or sanctions or (iii) reputational damage. Capital Requirements Our OLS, Homeward, Liberty and OMS subsidiaries are licensed to originate and/or service forward and reverse mortgage loans in the jurisdictions in which they operate. The licensed entities are subject to minimum net worth requirements in connection with these licenses. These minimum net worth requirements are unique to each state and type of license. Failure to meet these minimum capital requirements can result in the initiation of certain mandatory actions by federal, state, and foreign agencies that could have a material effect on our results of operations and financial condition. The most restrictive of these requirements is based on the outstanding UPB of our owned and subserviced portfolio and was $753.1 million at September 30, 2014. Our licensed subsidiaries were in compliance with all of their capital requirements at September 30, 2014. Homeward, OLS and Liberty are also parties to seller/servicer agreements with one or more of the GSEs, FHA, VA and Ginnie Mae. These seller/servicer agreements contain financial covenants that include capital requirements related to tangible net worth, as defined in each agreement, as well as extensive requirements regarding servicing, selling and other matters. To the extent that these requirements are not met, the counterparty may, at its option, utilize a variety of remedies ranging from sanctions or suspension to termination of the seller/servicer agreements, which would prohibit future originations or securitizations of forward or reverse mortgage loans or being an approved seller/servicer. We were in compliance with these net worth requirements at September 30, 2014.

Commitments and Contingencies

9 Months Ended

Sep. 30, 2014

Commitments and Contingencies

Note 22 – Commitments and Contingencies

When we become aware of a matter involving uncertainty for which we may incur a loss, we assess the likelihood of any loss. If a loss contingency is probable and the amount of the loss can be reasonably estimated, we record an accrual for the loss. In such cases, there may be an exposure to potential loss in excess of the amount accrued. Where a loss is not probable but is reasonably possible or where a loss in excess of the amount accrued is reasonably possible, we disclose an estimate of the amount of the loss or range of possible losses for the claim if a reasonable estimate can be made, unless the amount of such reasonably possible loss is not material to our financial position, results of operations or cash flows. If a reasonable estimate of loss cannot be made, we do not accrue for any loss or disclose any estimate of exposure to potential loss. An assessment regarding the ultimate outcome of any such matter involves judgments about future events, actions and circumstances that are inherently uncertain. The actual outcome could differ materially. Where we have retained external legal counsel or other professional advisors, such advisors assist us in making such assessments.

Litigation Contingencies

In the ordinary course of business, we are routinely a defendant in, or a party or potential party to, many threatened and pending legal proceedings, including proceedings brought on behalf of various classes of claimants. These proceedings are generally based on alleged violations of federal, state and local laws and regulations governing our mortgage servicing and lending activities, including wrongful foreclosure and eviction actions, allegations of wrongdoing in connection with lender-placed insurance arrangements, claims relating to our pre-foreclosure property preservation activities and claims related to our payment and other processing operations. In some of these proceedings, claims for substantial monetary damages are asserted against us. In our opinion, the resolution of the vast majority of these proceedings will not have a material effect on our financial condition, results of operations or cash flows.

In view of the inherent difficulty of predicting the outcome of any threatened or pending legal proceedings, particularly where the claimants seek very large or indeterminate damages or where the matters present novel legal theories or involve a large number of parties, we generally cannot predict what the eventual outcome of such proceedings will be, what the timing of the ultimate resolution will be, or what the eventual loss, if any, will be.

Where we determine that a loss contingency is probable in connection with a pending or threatened legal proceeding and the amount of our losses can be reasonably estimated, we record an accrual for the losses. Excluding expenses of internal or external legal counsel, we have accrued $19.1 million as of September 30, 2014 for losses relating to threatened and pending litigation pertaining to our mortgage servicing practices that we believe are probable and reasonably estimable based on current information regarding these matters. Where we determine that a loss is not probable but is reasonably possible or where a loss in excess of the amount accrued is reasonably possible, we disclose an estimate of the amount of the loss or range of possible losses for the claim if a reasonable estimate can be made, unless the amount of such reasonably possible loss is not material to our financial position, results of operations or cash flows. It is possible that we will incur losses relating to threatened and pending litigation pertaining to our mortgage servicing practices that materially exceed the amount accrued. We cannot currently estimate the amount, if any, of reasonably possible losses above amounts that have been recorded at September 30, 2014.

Following our announcement on August 12, 2014 that we intended to restate our financial statements for the fiscal year ended December 31, 2013 and the quarter ended March 31, 2014, and amend our Annual Report on Form 10-K for the fiscal year ended December 31, 2013 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2014, putative securities fraud class action lawsuits have been filed against Ocwen and certain of its officers and directors regarding such restatements and amendments. Ocwen and the other defendants intend to vigorously defend such lawsuits. Additional lawsuits may be filed and, at this time, Ocwen is unable to predict the outcome of these lawsuits, the possible loss or range of loss, if any, associated with the resolution of these lawsuits or any potential impact they may have on us or our operations. If our efforts to defend these lawsuits are not successful, our business, financial condition and results of operations could be adversely affected.

In several recent court actions, mortgage loan sellers against whom repurchase claims have been asserted based on alleged breaches of representations and warranties are defending on various grounds including the expiration of statutes of limitation, lack of notice and opportunity to cure, and vitiation of the obligation to repurchase as a result of foreclosure or charge off of the loan. Ocwen has entered into tolling agreements with respect to its role as servicer for a very small number of securitizations and may enter into additional tolling agreements in the future. Other court actions have been filed recently against certain RMBS trustees alleging that the trustees breached their contractual and statutory duties by, among other things, failing to require the loan servicers to abide by the servicers’ obligations and by failing to declare that certain servicing events of default under the applicable contracts allegedly occurred.

Ocwen is a party in certain of these actions, is the servicer for certain securitizations involved in other such actions, and is the servicer for other securitizations as to which actions have been threatened by certificate holders. We intend to vigorously defend ourselves in lawsuits to which we have been named a party. Should Ocwen be made a party to other similar actions or should Ocwen be asked to indemnify any parties to such actions, we may need to defend allegations that we failed to service loans in accordance with applicable agreements and that such failures prejudiced the rights of repurchase claimants against loan sellers or otherwise diminished the value of the trust collateral. We believe that any such allegations would be without merit and, if necessary, would vigorously defend against them. At this time, we are unable to predict the ultimate outcome of these lawsuits, the possible loss or range of loss, if any, associated with the resolution of these lawsuits or any potential impact they may have on us or our operations. If, however, we were required to compensate claimants for losses related to the alleged loan servicing breaches, then our business, financial condition and results of operations could be adversely affected.

Regulatory Contingencies

We are subject to a number of pending federal and state regulatory investigations, examinations, inquiries, requests for information and other actions, including those discussed below.

In December 2012, we entered into a Consent Order with the New York Department of Financial Services (NY DFS) in which we agreed to the appointment of a Monitor to oversee our compliance with an Agreement on Servicing Practices. The Monitor began its work in 2013, and we continue to cooperate with the Monitor. We devote substantial resources to regulatory compliance, and we incur, and expect to continue to incur, significant ongoing costs with respect to compliance in connection with the Agreement on Servicing Practices and the work of the Monitor. In early February 2014, the NY DFS requested that Ocwen put an indefinite hold on an acquisition from Wells Fargo Bank, N.A. of MSRs and related servicing advances relating to a portfolio of approximately 184,000 loans with a UPB of approximately $39.0 billion. The NY DFS expressed an interest in evaluating further our ability to manage additional servicing. We have agreed to place the transaction on indefinite hold. The NY DFS has also inquired about certain other aspects of our business, including certain aspects of our business dealings with Altisource, HLSS, AAMC and Residential, the interests of our directors and executive officers in these companies, an online auction business owned by Altisource, the role of Altisource in certain lender-placed insurance arrangements, the provisions contained in releases we use in connection with litigation settlements and certain erroneously dated borrower correspondence that we sent. We are cooperating with the NY DFS on these matters.

As noted above, an assessment regarding the ultimate outcome of these matters involves judgments about future events, actions and circumstances that are inherently uncertain. If we determine that a loss contingency is probable and the amount of our losses can be reasonably estimated, we record an accrual for the losses. We accrued $100.0 million as of September 30, 2014 for losses that we believe are probable and reasonably estimable based on current information regarding these matters, although we have not reached any agreement with the NY DFS on any of the outstanding matters and cannot predict whether or when we may reach such a resolution. It is possible that we could incur losses that materially exceed this amount. We cannot currently estimate the amount, if any, of reasonably possible losses above amounts that have been recorded at September 30, 2014.

Actions taken by the NY DFS, if any, regarding these matters could have a material impact on our business, reputation, financial condition, liquidity and results of operations.

On December 19, 2013, we reached an agreement, which was subject to court approval, involving the CFPB and various state attorneys general and other state agencies that regulate the mortgage servicing industry (Regulators). In February 2014, the United States District Court for the District of Columbia entered a Consent Order memorializing the settlement (the Ocwen National Mortgage Settlement). The settlement has four key elements:

•

A commitment by Ocwen to service loans in accordance with specified servicing guidelines and to be subject to oversight by an independent national monitor for three years. Ocwen was previously subject to substantially the same guidelines and oversight with respect to the portion of its servicing portfolio acquired from ResCap in early 2013, and those loans will also be subject to these provisions.

•

A payment of $127.3 million, which includes a fixed amount for administrative expenses, to a consumer relief fund to be disbursed by an independent administrator to eligible borrowers. In May 2014, Ocwen satisfied this obligation with regard to the consumer relief fund. Pursuant to indemnification and loss sharing provisions of applicable acquisition documents, the former owners of certain servicing portfolios previously acquired by Ocwen are responsible for approximately $60.4 million of that sum, of which $49.0 million has already been paid to Ocwen.

•

A commitment by Ocwen to continue its principal forgiveness modification programs to delinquent and underwater borrowers, including underwater borrowers at imminent risk of default, in an aggregate amount of at least $2.0 billion over three years. These and all of Ocwen’s other loan modifications are designed to be sustainable for homeowners while providing a net present value for loan investors that is superior to that of foreclosure. Principal forgiveness as part of a loan modification is determined on a case-by-case basis in accordance with the applicable servicing agreement. Principal forgiveness does not involve an expense to Ocwen other than the operating expense incurred in arranging the modification, which is part of Ocwen’s role as loan servicer.


•	Ocwen and the former owners of certain of the acquired servicing portfolios received from the Regulators comprehensive releases, subject to certain exceptions, from liability with respect to residential mortgage servicing, modification and foreclosure practices.

On April 28, 2014, we received a letter from the staff of the New York Regional Office of the SEC (the Staff) informing us that it was conducting an investigation relating to Ocwen and making a request for voluntary production of documents and information relating to the April 22, 2014 surrender of certain options to purchase our common stock by Mr. Erbey, our Executive Chairman, including the 2007 Equity Incentive Plan and the related option grant and surrender documents. On June 12, 2014, we received a subpoena from the SEC requesting production of various documents relating to our business dealings with Altisource, HLSS, AAMC and Residential and the interests of our directors and executive officers in these companies. Following the above-described announcement on August 12, 2014 that we intended to amend our Annual Report on Form 10-K for the fiscal year ended December 31, 2013 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2014, received an additional subpoena in relation to such amendments. We are cooperating with the Staff on these matters.

One or more of the foregoing regulatory actions or our failure to comply with the commitments we have made with respect to such regulatory actions or other regulatory actions in the future against us of a similar or different nature could cause us to incur fines, penalties, settlement costs, damages, legal fees or other charges in material amounts or could impose additional requirements or restrictions on our activities. Any of these occurrences could increase our operating expenses and reduce our revenues, hamper our ability to grow or otherwise materially and adversely affect our business, reputation, financial condition and results of operations.

In addition to these matters, Ocwen receives periodic inquires, both formal and informal in nature, from various federal and state agencies, including those made as part of regulatory oversight of our mortgage servicing, origination and collection activities. Such ongoing inquiries, including those into servicer foreclosure processes, could result in additional actions by state or federal governmental bodies, regulators or the courts with respect to our mortgage servicing, origination and collection activities and could result in an extension of foreclosure timelines, which may be applicable generally to the servicing industry or to us in particular. In addition, one of our match funded advance facilities contains provisions that limit the eligibility of advances to be financed based on the length of time that advances are outstanding, which, if such provisions applied, could adversely affect liquidity by reducing our average effective advance rate. Increases in the amount of advances and the length of time to recover advances, fines or increases in operating expenses, and decreases in the advance rate and availability of financing for advances could result in increased borrowings, reduced cash and higher interest expense which could negatively impact our liquidity and profitability.

Loan Repurchase Obligations and Other Contingencies

We have exposure to representation, warranty and indemnification obligations because of our lending, sales and securitization activities and our acquisitions to the extent we assume one or more of these obligations and in connection with our servicing practices. In connection with our lending, sales and securitization activities, our exposure primarily relates to representations and warranties concerning the proper origination and insurance of the loans. In connection with our servicing practices, claims may be made against us by contractual counterparties, such as trustees, master servicers and insurers, or by other third parties. At September 30, 2014 and 2013, we had provided or assumed representation and warranty obligations in connection with $83.4 billion and $89.4 billion of UPB, respectively, covering both forward and reverse mortgage loans. At September 30, 2014, we had outstanding representation and warranty repurchase demands of $108.2 million UPB (578 loans). At September 30, 2013, the outstanding UPB of representation and warranty repurchase demands was $113.0 million (534 loans). We review each demand and monitor through resolution, primarily through rescission, loan repurchase or make-whole payment.

The following table presents the changes in our liability for representation and warranty obligations, compensatory fees for foreclosures that may ultimately exceed investor timelines and related indemnification obligations for the nine months ended September 30, 2014 and 2013:



	2014			2013
Beginning balance	$	192,716		$	38,140
Provision for representation and warranty obligations	5,076			18,116
New production reserves	820			1,055
Obligations assumed in connection with MSR and servicing business acquisitions	—			189,742
Charge-offs and other (1)	(54,776		)	(40,979		)
Ending balance	$	143,836		$	206,074


(1)	Includes principal and interest losses realized in connection with repurchased loans, make-whole, indemnification and fee payments and settlements net of recoveries, if any.

We believe that it is reasonably possible that losses beyond amounts currently recorded for potential representation and warranty obligations and other claims described above could occur, and such losses could have an adverse impact on our results of operations, financial condition or cash flows. However, based on currently available information, we are unable to estimate a range of reasonably possible losses above amounts that have been recorded at September 30, 2014.

Subsequent Events	9 Months Ended
Subsequent Events	Sep. 30, 2014
Subsequent Events [Abstract]
Subsequent Events	Note 23 – Subsequent Events During the period October 1, 2014 through October 30, 2014, we completed the repurchase of 1,988,673 shares of Ocwen common stock in the open market for a total purchase price of $47.0 million.

Description of Business and Basis of Presentation (Policies)

9 Months Ended

Sep. 30, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Reclassifications

Within the Assets section of the Consolidated Balance sheet at December 31, 2013, we reclassified Debt service accounts of $129.9 million to Other assets to conform to the current year presentation.

Use of Estimates and Assumptions

Recent Accounting Pronouncements

Recently Issued Accounting Standards

Accounting for Investments in Qualified Affordable Housing Projects (ASU 2014-01)

Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure (ASU 2014-04)

Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity (ASU 2014-08)

Revenue from Contracts with Customers (ASU 2014-09)

Step 1: Identify the contract(s) with a customer.

Step 2: Identify the performance obligations in the contract.

Step 3: Determine the transaction price.

Step 4: Allocate the transaction price to the performance obligations in the contract.

Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.

Repurchase-to-Maturity Transactions, Repurchase Financings and Disclosures (ASU 2014-11)

Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period (ASU 2014-12)

Measuring the Financial Assets and the Financial Liabilities of a Consolidated Collateralized Financing Entity (ASU 2014-13)

Classification of Certain Government-Guaranteed Mortgage Loans upon Foreclosure (ASU 2014-14)


1.	The loan has a government guarantee that is not separable from the loan before foreclosure.


2.	At the time of foreclosure, the creditor has the intent to convey the real estate property to the guarantor and make a claim on the guarantee, and the creditor has the ability to recover under that claim.


3.	At the time of foreclosure, any amount of the claim that is determined on the basis of the fair value of the real estate is fixed.

Upon foreclosure, the separate other receivable should be measured based on the amount of the loan balance (principal and interest) expected to be recovered from the guarantor.

Disclosure of accounting policy regarding (1) the principles it follows in consolidating or combining the separate financial statements, including the principles followed in determining the inclusion or exclusion of subsidiaries or other entities in the consolidated or combined financial statements and (2) its treatment of interests (for example, common stock, a partnership interest or other means of exerting influence) in other entities, for example consolidation or use of the equity or cost methods of accounting. The accounting policy may also address the accounting treatment for intercompany accounts and transactions, noncontrolling interest, and the income statement treatment in consolidation for issuances of stock by a subsidiary.

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Description of Business and Basis of Presentation (Tables)

9 Months Ended

Sep. 30, 2014

Schedule of Change in Accounting Estimate

This change had the effect of reducing amortization expense and increasing both net income and earnings per share in our unaudited Consolidated Statements of Operations for the three and nine months ended September 30, 2014 as follows:



	Three Months			Nine Months
Reduction in Amortization of mortgage servicing rights	$	(21,309	)	$	(69,244	)

Increase in Net income attributable to Ocwen common stockholders	$	14,920		$	48,485

Increase in Earnings per share attributable to Ocwen common stockholders:
Basic	$	0.11		$	0.36
Diluted	$	0.11		$	0.35

Tabular disclosure of the change in an accounting estimate, including a change that occurs in an interim period. If a change in accounting estimate affects several future periods (for example, a change in the service life of a depreciable asset) disclose the effect on income from continuing operations, net income (or other appropriate captions of changes in the applicable net assets or performance indicator), and any related per-share amounts of the current period. Disclosure of the effects of a change in an accounting estimate that occurs in the ordinary course of business (such as uncollectible accounts or inventory obsolescence) is not required, unless the effect is material.

Accounting Changes and Error Corrections [Abstract]

Restatement of Previously Issued Consolidated Financial Statements (Tables)

9 Months Ended

Sep. 30, 2014

Schedule of Effects of Restatement

The following tables summarize the effect of these restatements on our previously reported amounts.



	Consolidated Statement of Operations for the Three Months Ended September 30, 2013
	As Reported			Restatement			As Restated
Interest expense	$	(110,055	)	$	(6,830	)	$	(116,885	)
Total other expense, net	(108,705		)	(6,830		)	(115,535		)
Income before income taxes	76,275			(6,830		)	69,445
Income tax expense	9,273			(400		)	8,873
Net income	67,002			(6,430		)	60,572
Net income attributable to Ocwen common stockholders	61,155			(6,430		)	54,725
Earnings per share attributable to Ocwen common stockholders
Basic	$	0.45		$	(0.05	)	$	0.40
Diluted	$	0.44		$	(0.05	)	$	0.39



	Consolidated Statement of Operations for the Nine Months Ended September 30, 2013
	As Reported			Restatement			As Restated
Interest expense	$	(303,339	)	$	(16,225	)	$	(319,564	)
Total other expense, net	(306,780		)	(16,225		)	(323,005		)
Income before income taxes	215,120			(16,225		)	198,895
Income tax expense	26,250			(2,498		)	23,752
Net income	188,870			(13,727		)	175,143
Net income attributable to Ocwen common stockholders	177,847			(13,727		)	164,120
Earnings per share attributable to Ocwen common stockholders
Basic	$	1.31		$	(0.10	)	$	1.21
Diluted	$	1.27		$	(0.10	)	$	1.17



	Consolidated Statement of Comprehensive Income for the Three Months Ended September 30, 2013
	As Reported		Restatement			As Restated
Net income	$	67,002	$	(6,430	)	$	60,572
Comprehensive income	71,747		(6,430		)	65,317



	Consolidated Statement of Comprehensive Income for the Nine Months Ended September 30, 2013
	As Reported		Restatement			As Restated
Net income	$	188,870	$	(13,727	)	$	175,143
Comprehensive income	188,242		(13,727		)	174,515



	Consolidated Statement of Changes in Equity for the Nine Months Ended September 30, 2013
	As Reported		Restatement			As Restated
Net income	$	188,870	$	(13,727	)	$	175,143



	Consolidated Statement of Cash Flows for the Nine Months Ended September 30, 2013
	As Reported			Restatement			As Restated
Net income	$	188,870		$	(13,727	)	$	175,143
Adjustments to reconcile net income to net cash provided by operating activities:
Decrease (increase) in deferred tax assets, net	105			(2,498		)	(2,393		)
Net cash provided by operating activities	1,020,455			(16,225		)	1,004,230
Repayments of other secured borrowings	(7,182,275		)	16,225			(7,166,050		)
Net cash used in financing activities	(933,136		)	16,225			(916,911		)

Securitization and Variable Interest Entities (Tables)

9 Months Ended

Sep. 30, 2014

Schedule of Cash Flows Related to Transfers Accounted for as Sales



	Three Months				Nine Months
	2014		2013		2014		2013
Proceeds received from securitizations	$	1,369,468	$	1,776,309	$	4,346,991	$	6,240,459
Servicing fees collected	10,840		6,317		25,174		13,125
Purchases of previously transferred assets, net of claims reimbursed	2,237		—		2,237		—
	$	1,382,545	$	1,782,626	$	4,374,402	$	6,253,584

Schedule of Assets That Relate to Continuing Involvement with Transferred Financial Assets with Servicing Rights and Maximum Exposure to Loss Including the Unpaid Principal Balance



	September 30, 2014		December 31, 2013
Carrying value of assets:
Mortgage servicing rights, at amortized cost	$	84,397	$	44,615
Mortgage servicing rights, at fair value	2,965		3,075
Advances and match funded advances	10,153		15,888
Unpaid principal balance of loans transferred (1)	8,816,416		5,641,277
Maximum exposure to loss	$	8,913,931	$	5,704,855


(1)	The UPB of the loans transferred is the maximum exposure to loss under our standard representations and warranties obligations.

Business Acquisitions (Tables)

9 Months Ended

Sep. 30, 2014

Schedule of Purchase Price Allocation

The following table summarizes the fair values of assets acquired and liabilities assumed as part of the ResCap Acquisition:



Purchase Price Allocation	February 15, 2013			Adjustments			Final
MSRs (1)	$	393,891		$	7,423		$	401,314
Advances and match funded advances (1)	1,622,348			164,061			1,786,409
Deferred tax assets	—			—			—
Premises and equipment	22,398			(5,975		)	16,423
Receivables and other assets	2,989			—			2,989
Other liabilities:
Liability for indemnification obligations	(49,500		)	—			(49,500		)
Other	(24,840		)	(285		)	(25,125		)
Total identifiable net assets	1,967,286			165,224			2,132,510
Goodwill	204,743			6,676			211,419
Total consideration	$	2,172,029		$	171,900		$	2,343,929

(1)

Schedule of Restructuring Reserve Liability

The following table provides a reconciliation of the beginning and ending liability balances for these termination costs for the nine months ended September 30, 2014:



	Employee termination benefits			Lease and other contract termination costs			Total
Liability balance as at December 31, 2013	$	4,816		$	7,432		$	12,248
Additions charged to operations (1)	14,748			2,813			17,561
Amortization of discount	—			115			115
Payments	(17,215		)	(2,928		)	(20,143		)
Liability balance as at September 30, 2014 (2)	$	2,349		$	7,432		$	9,781

(1)


(2)	We expect the remaining liability for employee termination benefits at September 30, 2014 to be settled in late 2014 or early 2015.

Post-Acquisition Results of Operations



	Three Months		Nine Months
Revenues	$	212,164	$	508,589
Net income	$	8,230	$	81,362

Pro Forma Results of Operations


•	conforming servicing revenues to the revenue recognition policies followed by Ocwen;


•	conforming the accounting for MSRs to the valuation and amortization policies of Ocwen;


•	adjusting interest expense to eliminate the pre-acquisition interest expense of ResCap and to recognize interest expense as if the acquisition-related debt of Ocwen had been outstanding at January 1, 2012; and


•	reporting acquisition-related charges for professional services as if they had been incurred in 2012 rather than 2013.



Revenues	$	1,530,055
Net income	$	205,062

Fair Value (Tables)

9 Months Ended

Sep. 30, 2014

Fair Value Disclosures [Abstract]

Schedule of Fair Value Assets and Liabilities



		September 30, 2014						December 31, 2013
	Level	Carrying Value			Fair Value			Carrying Value		Fair Value
Financial assets:
Loans held for sale:
Loans held for sale, at fair value (a)	2	$	335,950		$	335,950		$	503,753	$	503,753
Loans held for sale, at lower of cost or fair value (b)	3	71,937			71,937			62,907		62,907
Total Loans held for sale		$	407,887		$	407,887		$	566,660	$	566,660
Loans held for investment - Reverse mortgages, at fair value (a)	3	$	1,315,324		$	1,315,324		$	618,018	$	618,018
Advances and match funded advances (c)	3	3,346,865			3,346,865			3,443,215		3,443,215
Receivables, net (c)	3	245,817			245,817			152,516		152,516

Financial liabilities:
Match funded liabilities (c)	3	$	2,035,639		$	2,035,639		$	2,364,814	$	2,364,814
Financing liabilities:
HMBS-related borrowings, at fair value (a)	3	$	1,236,094		$	1,236,094		$	615,576	$	615,576
Financing liability - MSRs pledged (a)	3	618,855			618,855			633,804		633,804
Other (c)	3	202,541			206,261			17,593		17,593
Total Financing liabilities		$	2,057,490		$	2,061,210		$	1,266,973	$	1,266,973
Other secured borrowings:
Senior secured term loan (c)	3	$	1,276,142		$	1,259,601		$	1,284,901	$	1,270,108
Other (c)	3	390,285			390,285			492,768		492,768
Total Other secured borrowings		$	1,666,427		$	1,649,886		$	1,777,669	$	1,762,876

Senior unsecured notes	2	$	350,000		$	338,625		$	—	$	—

Derivative financial instruments (a):
IRLCs	2	$	6,117		$	6,117		$	8,433	$	8,433
Forward MBS trades	1	(1,089		)	(1,089		)	6,905		6,905
Interest rate caps	3	91			91			442		442

MSRs:
MSRs, at fair value (a)	3	$	101,948		$	101,948		$	116,029	$	116,029
MSRs, at amortized cost (c)	3	1,856,818			2,364,393			1,953,352		2,441,719
Total MSRs		$	1,958,766		$	2,466,341		$	2,069,381	$	2,557,748


(a)	Measured at fair value on a recurring basis.


(b)	Measured at fair value on a non-recurring basis.


(c)	Disclosed, but not carried, at fair value.

Reconciliation of Level 3 Assets



	Loans Held for Investment - Reverse Mortgages			Financing Liability - MSRs Pledged			HMBS-Related Borrowings			Derivative Financial Instruments, net			MSRs			Total
Three months ended September 30, 2014
Fair value at July 1, 2014	$	1,107,626		$	(629,579	)	$	(1,033,712	)	$	97		$	104,220		$	(451,348	)
Purchases, issuances, sales and settlements:
Purchases	—			—			—			—			—			—
Issuances	208,566			—			(190,452		)	—			—			18,114
Sales	—			—			—			—			—			—
Settlements (1)	(27,592		)	10,724			12,690			—			(934		)	(5,112		)
	180,974			10,724			(177,762		)	—			(934		)	13,002
Total realized and unrealized gains and (losses):
Included in earnings	26,724			—			(24,620		)	(6		)	(1,338		)	760
Included in Other comprehensive income (loss)	—			—			—			—			—			—
	26,724			—			(24,620		)	(6		)	(1,338		)	760
Transfers in and / or out of Level 3	—			—			—			—			—			—
Fair value at September 30, 2014	$	1,315,324		$	(618,855	)	$	(1,236,094	)	$	91		$	101,948		$	(437,586	)



	Loans Held for Investment - Reverse Mortgages			Financing Liability - MSRs Pledged			HMBS-Related Borrowings			Derivative Financial Instruments, net			MSRs			Total
Three months ended September 30, 2013
Fair value at July 1, 2013	$	76,649		$	(437,734	)	$	(73,641	)	$	176		$	97,163		$	(337,387	)
Purchases, issuances, sales and settlements:
Purchases	—			—			—			—			—			—
Issuances	211,052			(239,851		)	(206,714		)	—			—			(235,513		)
Sales	—			—			—						—			—
Settlements	(1,293		)	17,764			1,021			(176		)	—			17,316
	209,759			(222,087		)	(205,693		)	(176		)	—			(218,197		)
Total realized and unrealized gains and (losses):
Included in earnings	4,445			—			(4,942		)	—			(225		)	(722		)
Included in Other comprehensive income (loss)	—			—			—			—			—			—
	4,445			—			(4,942		)	—			(225		)	(722		)
Transfers in and / or out of Level 3	—			—			—			—			—			—
Fair value at September 30, 2013	$	290,853		$	(659,821	)	$	(284,276	)	$	—		$	96,938		$	(556,306	)



	Loans Held for Investment - Reverse Mortgages			Financing Liability - MSRs Pledged			HMBS-Related Borrowings			Derivative Financial Instruments, net			MSRs			Total
Nine months ended September 30, 2014
Fair value at January 1, 2014	$	618,018		$	(633,804	)	$	(615,576	)	$	442		$	116,029		$	(514,891	)
Purchases, issuances, sales and settlements:
Purchases	—			—			—			23			—			23
Issuances	565,670			—			(572,031		)	—			—			(6,361		)
Transfer from loans held for sale, at fair value	110,874			—			—			—			—			110,874
Sales	—			—			—			—			—			—
Settlements (1)	(56,193		)	14,949			25,725			—			(934		)	(16,453		)
	620,351			14,949			(546,306		)	23			(934		)	88,083
Total realized and unrealized gains and (losses): (2)
Included in earnings	76,955			—			(74,212		)	(374		)	(13,147		)	(10,778		)
Included in Other comprehensive income (loss)	—			—			—			—			—			—
	76,955			—			(74,212		)	(374		)	(13,147		)	(10,778		)
Transfers in and / or out of Level 3	—			—			—			—			—			—
Fair value at September 30, 2014	$	1,315,324		$	(618,855	)	$	(1,236,094	)	$	91		$	101,948		$	(437,586	)



	Loans Held for Investment - Reverse Mortgages			Financing Liability - MSRs Pledged			HMBS-Related Borrowings			Derivative Financial Instruments, net			MSRs		Total
Nine months ended September 30, 2013
Fair value at January 1, 2013	$	—		$	(303,705	)	$	—		$	(10,668	)	$	85,213	$	(229,160	)
Purchases, issuances, sales and settlements:
Purchases	10,251			—			(10,179		)	—			—		72
Issuances	274,081			(388,473		)	(272,652		)	—			—		(387,044		)
Sales	—			—			—			24,156			—		24,156
Settlements	(2,164		)	32,357			1,888			(1,242		)	—		30,839
	282,168			(356,116		)	(280,943		)	22,914			—		(331,977		)
Total realized and unrealized gains and (losses):
Included in earnings	8,685			—			(3,333		)	117			11,725		17,194
Included in Other comprehensive income (loss)	—			—			—			(12,363		)	—		(12,363		)
	8,685			—			(3,333		)	(12,246		)	11,725		4,831
Transfers in and / or out of Level 3	—			—			—			—			—		—
Fair value at September 30, 2013	$	290,853		$	(659,821	)	$	(284,276	)	$	—		$	96,938	$	(556,306	)


(1)	In the event of a transfer of servicing to another party related to Rights to MSRs sold to HLSS, we are required to reimburse HLSS at predetermined contractual rates for the loss of servicing revenues. Settlements for Financing liability - MSRs pledged for the three and nine months ended September 30, 2014 includes $2.0 million of such reimbursements.


(2)	Total losses attributable to derivative financial instruments still held at September 30, 2014 were $0.4 million for the nine months ended September 30, 2014.

Schedule of Assumptions for Fair Value

Other assumptions typically used in the internal valuation are:



•	Cost of servicing	•	Interest rate used for computing float earnings
•	Discount rate	•	Compensating interest expense
•	Interest rate used for computing the cost of financing servicing advances	•	Collection rate of other ancillary fees

Loans Held for Sale (Tables)

9 Months Ended

Sep. 30, 2014

Schedule of Loans Held for Sale Fair Value

The following table summarizes the activity in the balance of Loans held for sale, at fair value, during the nine months ended September 30:



	2014			2013
Beginning balance	$	503,753		$	426,480
Originations and purchases	3,923,870			5,988,501
Proceeds from sales	(4,010,644		)	(6,033,785		)
Transfers to loans held for investment - reverse mortgages	(110,874		)	—
Gain (loss) on sale of loans	39,486			(46,962		)
Other	(9,641		)	868
Ending balance	$	335,950		$	335,102

Schedule of Loans Held For Sale At Lower Cost Or Fair Value, Activity

The following table summarizes the activity in the balance of Loans held for sale, at lower of cost or fair value, during the nine months ended September 30:



	2014			2013
Beginning balance	$	62,907		$	82,866
Purchases	2,083,282			1,144,853
Proceeds from sales	(1,744,273		)	(654,916		)
Principal payments	(248,552		)	(317,528		)
Transfers to accounts receivable	(96,257		)	(190,185		)
Transfers to real estate owned	(4,575		)	(2,838		)
Gain on sale of loans	32,471			20,336
Increase in valuation allowance	(16,282		)	(6,510		)
Other	3,216			10,675
Ending balance	$	71,937		$	86,753

Schedule of Gains on Loans Held for Sale

The following table summarizes the activity in Gain on loans held for sale, net, during the three and nine months ended September 30:



	Three Months						Nine Months
	2014			2013			2014			2013
Gain on sales of loans	$	42,185		$	4,622		$	145,455		$	36,156
Change in fair value of IRLCs	(4,188		)	18,912			(2,315		)	5,918
Change in fair value of loans held for sale	(9,348		)	14,362			(97		)	1,452
Gain (loss) on economic hedge instruments	(1,145		)	(9,408		)	(32,183		)	30,989
Other	(286		)	(226		)	(819		)	(1,603		)
	$	27,218		$	28,262		$	110,041		$	72,912

Advances (Tables)

9 Months Ended

Sep. 30, 2014

Advances [Abstract]

Schedule of Advance Payments by Financial Institution on Foreclosed Properties

Advances, net, representing payments made on behalf of borrowers or on foreclosed properties, consisted of the following at the dates indicated:



	September 30, 2014		December 31, 2013
Servicing:
Principal and interest	$	198,540	$	141,307
Taxes and insurance	443,255		477,039
Foreclosures, bankruptcy and other (1)	340,882		268,053
	982,677		886,399
Corporate Items and Other	4,609		4,433
	$	987,286	$	890,832


(1)	The balances at September 30, 2014 and December 31, 2013 are net of an allowance for losses of $48.4 million and $38.4 million, respectively.

Match funded advances on residential loans we service for others are comprised of the following at the dates indicated:



	September 30, 2014		December 31, 2013
Principal and interest	$	1,360,568	$	1,497,649
Taxes and insurance	788,612		830,113
Foreclosures, bankruptcy, real estate and other	210,399		224,621
	$	2,359,579	$	2,552,383

Schedule of Activity in Advances

The following table summarizes the activity in advances for the nine months ended September 30:



	2014			2013
Beginning balance	$	890,832		$	184,463
Acquisitions (1)	99,318			708,415
Transfers to match funded advances	(10,156		)	(131,197		)
Sales of advances to HLSS (2)	—			(61,673		)
New advances, net of collections and other	7,292			244,923
Ending balance	$	987,286		$	944,931


(1)	Servicing advances acquired through business acquisitions and asset acquisitions, primarily in connection with the acquisition of MSRs. See Note 3 – Business Acquisitions, Note 5 – Loans Held for Sale and Note 8 – Mortgage Servicing for additional information.

(2)

Match Funded Advances (Tables)

9 Months Ended

Sep. 30, 2014

Schedule of Advance Payments by Financial Institution on Foreclosed Properties

Advances, net, representing payments made on behalf of borrowers or on foreclosed properties, consisted of the following at the dates indicated:



	September 30, 2014		December 31, 2013
Servicing:
Principal and interest	$	198,540	$	141,307
Taxes and insurance	443,255		477,039
Foreclosures, bankruptcy and other (1)	340,882		268,053
	982,677		886,399
Corporate Items and Other	4,609		4,433
	$	987,286	$	890,832


(1)	The balances at September 30, 2014 and December 31, 2013 are net of an allowance for losses of $48.4 million and $38.4 million, respectively.

Match funded advances on residential loans we service for others are comprised of the following at the dates indicated:



	September 30, 2014		December 31, 2013
Principal and interest	$	1,360,568	$	1,497,649
Taxes and insurance	788,612		830,113
Foreclosures, bankruptcy, real estate and other	210,399		224,621
	$	2,359,579	$	2,552,383

Schedule of Activity In Match Funded Advances

The following table summarizes the activity in match funded advances for the nine months ended September 30:



	2014			2013
Beginning balance	$	2,552,383		$	3,049,244
Acquisitions (1)	85,521			1,448,371
Transfers from advances	10,156			131,197
Sales of advances to HLSS (2)	—			(3,428,234		)
Collections, net of new advances and other	(288,481		)	(666,853		)
Ending balance	$	2,359,579		$	533,725


(1)	Servicing advances acquired in connection with the acquisitions of MSRs through business acquisitions and asset acquisitions. See Note 3 – Business Acquisitions and Note 8 – Mortgage Servicing for additional information.


(2)	See Note 6 – Advances for additional information.

Mortgage Servicing (Tables)

9 Months Ended

Sep. 30, 2014

Schedule of Activity Related to MSRs - Amortization Method



	2014			2013
Beginning balance	$	1,953,352		$	678,937
Additions recognized in connection with business acquisitions:
OSI (1)	9,008			—
ResCap Acquisition (1)	11,370			391,853
Liberty Acquisition (1)	—			2,532
Additions recognized in connection with asset acquisitions:
Ally MSR Transaction	—			683,787
OneWest MSR Transaction (2)	1,516			127,047
Greenpoint MSR Transaction (3)	3,690			—
Other	14,132			3,003
Additions recognized on the sale of mortgage loans	50,480			63,154
Sales	(137		)	(17,523		)
Servicing transfers and adjustments	(518		)	2,052
Amortization	(186,075		)	(197,899		)
Ending balance	$	1,856,818		$	1,736,943

Estimated fair value at end of period	$	2,364,393		$	2,532,239


(1)	See Note 3 – Business Acquisitions for additional information regarding MSRs recognized in connection with business acquisitions.

(2)


(3)	The acquired MSRs relate to mortgage loans with a UPB of $948.9 million and related servicing advances of $47.6 million.

Schedule of Activity Related to MSRs - Fair Value Measurement Method

The following table summarizes the activity related to fair value servicing assets for the nine months ended September 30:



	2014			2013
Beginning balance	$	116,029		$	85,213
Servicing transfers	(934		)	—
Changes in fair value (1):
Changes in assumptions	(12,217		)	19,800
Realization of cash flows and other changes	(930		)	(8,075		)
Ending balance	$	101,948		$	96,938


(1)	Changes in fair value are recognized in Servicing and origination expense in the unaudited Consolidated Statements of Operations.

Schedule of Estimated Change in the Fair Value of MSRs

The following table summarizes the estimated change in the value of the MSRs that we carry at fair value as of September 30, 2014 given hypothetical instantaneous parallel shifts in the yield curve:



	Adverse change in fair value
	10%			20%
Weighted average prepayment speeds	$	(8,245	)	$	(16,137	)
Discount rate (Option-adjusted spread)	$	(4,100	)	$	(7,905	)

Schedule of Composition of Servicing and Subservicing Portfolios by Type of Property Serviced



	Residential		Commercial		Total
UPB at September 30, 2014
Servicing (1)	$	360,919,248	$	—	$	360,919,248
Subservicing	50,360,366		216,111		50,576,477
	$	411,279,614	$	216,111	$	411,495,725
UPB at December 31, 2013
Servicing (1)	$	397,546,635	$	—	$	397,546,635
Subservicing	67,104,697		400,502		67,505,199
	$	464,651,332	$	400,502	$	465,051,834
UPB at September 30, 2013
Servicing (1)	$	362,792,312	$	—	$	362,792,312
Subservicing	72,027,114		495,312		72,522,426
	$	434,819,426	$	495,312	$	435,314,738


(1)	Includes primary servicing UPB of $160.8 billion, $175.1 billion and $177.1 billion at September 30, 2014, December 31, 2013 and September 30, 2013, respectively, for which the Rights to MSRs have been sold to HLSS.

Schedule of Components of Servicing and Subservicing Fees

The following table presents the components of servicing and subservicing fees for the three and nine months ended September 30:



	Three Months				Nine Months
	2014		2013		2014		2013
Loan servicing and subservicing fees:
Servicing	$	331,794	$	335,884	$	1,039,033	$	887,500
Subservicing	30,926		35,286		95,509		115,437
	362,720		371,170		1,134,542		1,002,937
Home Affordable Modification Program (HAMP) fees	37,644		40,213		111,000		118,412
Late charges	27,634		30,445		97,002		85,930
Loan collection fees	8,655		8,387		25,573		22,524
Custodial accounts (float earnings)	1,831		743		5,235		4,533
Other	27,480		32,309		74,744		99,056
	$	465,964	$	483,267	$	1,448,096	$	1,333,392

Receivables (Tables)

9 Months Ended

Sep. 30, 2014

Schedule of Match Funded Liabilities

Schedule of Receivables

Receivables consisted of the following at the dates indicated:



	September 30, 2014			December 31, 2013
Servicing:
Government-insured loan claims (1)	$	60,236		$	54,012
Due from custodial accounts	33,553			2,943
Reimbursable expenses	21,575			35,933
Other servicing receivables	26,673			31,649
	142,037			124,537
Income taxes receivable	56,174			6,369
Due from related parties (2)	30,075			14,553
Other receivables (3)	44,040			24,579
	272,326			170,038
Allowance for losses (1)	(26,509		)	(17,522		)
	$	245,817		$	152,516

(1)


(2)	See Note 20 – Related Party Transactions for additional information.


(3)	The balance at September 30, 2014 and December 31, 2013 includes $28.3 million and $13.6 million, respectively, related to losses expected to be indemnified under the terms of the merger agreement entered into in connection with the acquisition of Homeward. See Note 20 – Related Party Transactions for additional information regarding this receivable.

Other Assets (Tables)

9 Months Ended

Sep. 30, 2014

Other Assets [Abstract]

Schedule of Other Assets

Other assets consisted of the following at the dates indicated:



	September 30, 2014		December 31, 2013
Debt service accounts (1)	$	100,003	$	129,897
Prepaid lender fees and debt issuance costs, net	31,200		31,481
Purchase price deposit (2)	25,000		10,000
Prepaid income taxes	25,142		20,585
Prepaid expenses	12,095		16,132
Derivatives, at fair value (3)	6,169		15,494
Contingent assets - ResCap Acquisition (4)	—		51,932
Investment in unconsolidated entities (5)	—		11,771
Other	37,631		21,851
	$	237,240	$	309,143

(1)

(2)


(3)	See Note 15 – Derivative Financial Instruments and Hedging Activities for additional information.

(4)

(5)

Borrowings (Tables)

9 Months Ended

Sep. 30, 2014

Debt Disclosure [Abstract]

Match funded liabilities are comprised of the following at the dates indicated:



Borrowing Type	Interest Rate	Maturity (1)	Amortization Date (1)	Available Borrowing Capacity (2)		September 30, 2014			December 31, 2013
Advance Receivable Backed Notes Series 2012-ADV1 (3)	1ML (4) + 175 bps	Jun. 2017	Jun. 2015	$	130,753	$	344,247		$	417,388
Advance Receivable Backed Note	1ML + 300 bps	Dec. 2015	Dec. 2014	44,987		5,013			33,211
2012-Homeward Agency Advance Funding Trust 2012-1 (5)	Cost of Funds + 300 bps	Apr. 2014	Apr. 2014	—		—			21,019
Advance Receivables Backed Notes, Series 2013-VF1, Class A (6)	1ML + 175 bps (7)(11)	Oct. 2044	Oct. 2014	156,812		843,188			1,494,628
Advance Receivables Backed Notes, Series 2013-VF2, Class A (6)	1ML + 167 bps (8)(11)	Oct. 2044	Oct. 2014	75,693		408,019			385,645
Advance Receivables Backed Notes, Series 2013-VF2, Class B (6)	1ML + 425 bps (9)(11)	Oct. 2044	Oct. 2014	2,711		13,577			12,923
Advance Receivables Backed Notes - Series 2014-VF3, Class A (10)	1ML + 175 bps (10)(11)	Oct. 2044	Oct. 2014	78,405		421,595			—
				$	489,361	$	2,035,639		$	2,364,814

Weighted average interest rate						1.91		%	2.08		%

(1)


(2)	Borrowing capacity is available to us provided that we have additional eligible collateral to pledge. Collateral may only be pledged to one facility. At September 30, 2014, only $51.2 million of the available borrowing capacity could be used based on the amount of eligible collateral that had been pledged.


(3)	On October 28, 2014, the maximum borrowing capacity under this facility was reduced to $450.0 million and will further decline to $400.0 million in February 2015.


(4)	1-Month LIBOR (1ML) was 0.16% and 0.17% at September 30, 2014 and December 31, 2013, respectively.


(5)	Advance facility assumed as part of the acquisition of Homeward. This facility was terminated on April 16, 2014, and the advances pledged to the facility were transferred to another facility.

(6)


(7)	The interest margin on these notes increased to 200 bps on July 15, 2014, to 225 bps on August 15, 2014 and 250 bps on September 15, 2014.


(8)	The interest margin on these notes increased to 191 bps on July 15, 2014, to 215 bps on August 15, 2014 and 238 bps on September 15, 2014. Effective October 1, 2014, the interest margin on these notes was set to 167 bps through July 14, 2015, to 191 bps on July 15, 2015, to 215 bps on August 15, 2015 and to 239 bps on September 15, 2015.


(9)	The interest margin on these notes increased to 486 bps on July 15, 2014, to 546 bps on August 15, 2014 and 607 bps on September 15, 2014. Effective October 1, 2014, the interest margin on these notes was set to 300 bps through July 14, 2015, to 343 bps on July 15, 2015, to 386 bps on August 15, 2015 and to 429 bps on September 15, 2015.

(10)


(11)	On July 15, 2014, the lenders agreed to waive the increase in interest margin scheduled for July 15, 2014. On August 15, 2014, the lenders also agreed to waive the increases in interest margin that were scheduled for August 15, 2014 and September 15, 2014.

Schedule of Financing Liabilities

Financing liabilities are comprised of the following at the dates indicated:



Borrowings	Collateral	Interest Rate	Maturity	September 30, 2014		December 31, 2013
Servicing:
Financing liability – MSRs pledged	MSRs	(1)	(1)	$	618,855	$	633,804
Secured Notes, Ocwen Asset Servicing Income Series, Series 2014-1 (2)	MSRs	(2)	Feb. 2028	115,039		—
Financing Liability – Advances Pledged (3)	Advances on loans	(3)	(3)	87,502		—
				821,396		633,804

Lending:
Financing liability - MSRs pledged (4)	MSRs	(4)	(4)	—		17,593
HMBS-related borrowings (5)	Loans held for investment (LHFI)	1ML + 245 bps	(5)	1,236,094		615,576
				1,236,094		633,169

				$	2,057,490	$	1,266,973

(1)

(2)


(3)	Certain advances were sold to HLSS Mortgage and HLSS SEZ LP on March 4, 2014 and May 2, 2014, respectively. These sales of advances did not qualify for sales accounting treatment and were accounted for as a financing. See Note 5 – Loans Held for Sale for additional information.

(4)


(5)	Represents amounts due to the holders of beneficial interests in Ginnie Mae guaranteed HMBS. The beneficial interests have no maturity dates, and the borrowings mature as the related loans are repaid. See Note 2 – Securitizations and Variable Interest Entities for additional information.

Schedule of Other Secured Borrowings

Other secured borrowings are comprised of the following at the dates indicated:



Borrowings	Collateral	Interest Rate	Maturity	Available Borrowing Capacity		September 30, 2014			December 31, 2013
Servicing:
SSTL (1)	(1)	1-Month Euro-dollar rate + 375 bps with a Eurodollar floor of 125 bps (1)	Feb. 2018	$	—	$	1,280,500		$	1,290,250
Promissory note (2)	MSRs	1ML + 350 bps	May 2017	—		—			15,529
Repurchase agreement (3)	Loans held for sale (LHFS)	1ML + 200 - 345 bps	Jun. 2015	27,338		22,662			17,507
				27,338		1,303,162			1,323,286

Lending:
Master repurchase agreement (4)	LHFS	1ML + 175 bps	Apr. 2015	17,199		132,801			105,659
Participation agreement (5)	LHFS	N/A	May 2015	—		54,369			81,268
Master repurchase agreement (6)	LHFS	1ML + 175 - 275 bps	Oct. 2014	10,645		64,355			91,990
Master repurchase agreement (7)	LHFS	1ML + 175 - 200 bps	Nov. 2014	99,527		50,473			89,836
Master repurchase agreement (8)	LHFI	1ML + 275bps	Oct. 2014	858		36,642			51,975
Mortgage warehouse agreement (9)	LHFI	1ML + 275 bps; floor of 350 bps	May 2015	35,695		24,305			34,292
				163,924		362,945			455,020

Corporate Items and Other:
Securities sold under an agreement to repurchase (10)	Ocwen Real Estate Asset Liquidating Trust 2007-1 Notes	Class A-2 notes: 1ML + 200 bps; Class A-3 notes: 1ML + 300 bps	Monthly	—		4,678			4,712
				191,262		1,670,785			1,783,018
Discount (1)				—		(4,358		)	(5,349		)
				$	191,262	$	1,666,427		$	1,777,669

Weighted average interest rate						4.94		%	4.86		%

(1)


(2)	This note was repaid in full on February 28, 2014.


(3)	Under this repurchase agreement, the lender provides financing on a committed basis for $50.0 million and, at the discretion of the lender, on an uncommitted basis for an additional $50.0 million.


(4)	Under this repurchase agreement, the lender provides financing on a committed basis for $150.0 million and, at the discretion of the lender, on an uncommitted basis for an additional $150.0 million.

(5)


(6)	Under this repurchase agreement, the lender provides financing on a committed basis for $75.0 million and, at the discretion of the lender, on an uncommitted basis for an additional $75.0 million. On September 2, 2014, the maturity date of this facility was extended to October 2, 2014. On October 2, 2014, the maturity date was further extended to September 1, 2015.


(7)	Under this repurchase agreement, the lender provides financing on a committed basis for $150.0 million and, at the discretion of the lender, on an uncommitted basis for an additional $300.0 million. On October 24, 2014, this facility was repaid in full and terminated.

(8)


(9)	In August 2014, the maturity date of this facility was extended to May 28, 2015.


(10)	Represents repurchase agreement for Class A-2 and A-3 notes issued by Ocwen Real Estate Asset Liquidating Trust 2007-1 which have a current face value of $22.4 million at September 30, 2014. This agreement has no stated credit limit and lending is determined for each transaction based on the acceptability of the securities presented as collateral.

Debt Instrument Redemption

The redemption prices during the twelve-month periods beginning on May 15^th of each year are as follows:



Year		Redemption Price
2016		104.969%
2017		103.313%
2018 and thereafter		100.000%

Other Liabilities (Tables)

9 Months Ended

Sep. 30, 2014

Other Liabilities Disclosure [Abstract]

Schedule of Other Liabilities

Other liabilities were comprised of the following at the dates indicated:



	September 30, 2014		December 31, 2013
Liability for indemnification obligations (1)	$	143,836	$	192,716
Accrued expenses (2)	227,309		108,870
Payable to loan servicing and subservicing investors	83,778		33,501
Due to related parties (3)	60,235		77,997
Liability for selected tax items	30,627		27,273
Checks held for escheat	19,880		24,392
Liability for certain foreclosure matters (4)	—		66,948
Additional purchase price due seller - ResCap Acquisition (5)	—		54,220
Other	65,976		58,678
	$	631,641	$	644,595


(1)	See Note 22 – Commitments and Contingencies for additional information.


(2)	Accrued expenses at September 30, 2014 includes $100.0 million related to certain regulatory contingencies. See Note 22 – Commitments and Contingencies for additional information.


(3)	See Note 20 – Related Party Transactions for additional information.


(4)	This liability was settled in May 2014. See Note 22 – Commitments and Contingencies for additional information regarding the National Mortgage Settlement.


(5)	See Note 3 – Business Acquisitions for additional information.

Mezzanine Equity (Tables)

9 Months Ended

Sep. 30, 2014

Temporary Equity Disclosure [Abstract]

Summary of Activity in Mezzanine Equity

The following table summarizes the activity in mezzanine equity for the nine months ended September 30:



	2014			2013
Beginning balance	$	60,361		$	153,372
Conversion of Preferred Shares	(62,000		)	(100,000		)
Accretion of beneficial conversion feature discount (Deemed dividend) (1)	1,639			6,573
Ending balance	$	—		$	59,945


(1)	Accretion includes an accelerated write-off of the unamortized discount of $0.8 million and $3.5 million related to the conversion of Preferred Shares during 2014 and 2013, respectively.

Equity (Tables)

9 Months Ended

Sep. 30, 2014

Equity [Abstract]

Schedule of Accumulated Other Comprehensive Loss (AOCL), Net of Income Taxes

The components of accumulated other comprehensive loss (AOCL), net of income taxes, were as follows at the dates indicated:



	September 30, 2014		December 31, 2013
Unrealized losses on cash flow hedges	$	8,663	$	10,026
Other	121		125
	$	8,784	$	10,151

Derivative Financial Instruments and Hedging Activities (Tables)

9 Months Ended

Sep. 30, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Changes in Notional Balance of Holdings of Derivatives

The following table summarizes the changes in the notional balances of our holdings of derivatives during the nine months ended September 30, 2014:



	IRLCs			Forward MBS Trades			Interest Rate Caps
Beginning notional balance	$	751,436		$	950,648		$	1,868,000
Additions	3,795,311			6,951,828			100,000
Amortization	94,571			—			(490,000		)
Maturities	(3,298,265		)	(3,379,589		)	—
Terminations	(876,254		)	(3,762,592		)	—
Ending notional balance	$	466,799		$	760,295		$	1,478,000

Fair value of derivative assets (liabilities) at:
September 30, 2014	$	6,117		$	(1,089	)	$	91
December 31, 2013	$	8,433		$	6,905		$	442

Maturity	Nov. 2014 - Jan. 2014			Nov. 2014 - Dec. 2014			Nov. 2016

Schedule of Gains (Losses) on Derivatives



Purpose	Expiration Date	Notional Amount		Fair Value (1)			Gains / (Losses)			Consolidated Statements of Operations Caption
Hedge the effect of changes in interest rates on interest expense on borrowings
Interest rate caps
Hedge the effect of changes in 1ML on advance funding facilities	Nov. 2016	$	1,478,000	$	91		$	(374	)	Other, net
Interest rate risk of mortgage loans held for sale and of IRLCs
Forward MBS trades	Nov. 2014 - Dec. 2014	760,295		(1,089		)	(32,183		)	Gain on loans held for sale, net
IRLCs	Nov. 2014 - Jan. 2014	466,799		6,117			(2,315		)	Gain on loans held for sale, net
Total derivatives				$	5,119		$	(34,872	)


(1)	Derivatives are reported at fair value in Receivables, Other assets and Other liabilities on our unaudited Consolidated Balance Sheet.

Schedule of Changes in the Losses on Cash Flow Hedges Included in AOCL

Changes in AOCL during the nine months ended September 30 were as follows:



	2014			2013
Beginning balance	$	10,151		$	6,441
Additional net losses on cash flow hedges	—			12,363
Ineffectiveness of cash flow hedges reclassified to earnings	—			(657		)
Losses on terminated hedging relationships amortized to earnings	(1,579		)	(9,434		)
Net increase (decrease) in accumulated losses on cash flow hedges	(1,579		)	2,272
Decrease (increase) in deferred taxes on accumulated losses on cash flow hedges	217			(933		)
(Decrease) increase in accumulated losses on cash flow hedges, net of taxes	(1,362		)	1,339
Other, net of taxes	(5		)	(711		)
Ending balance	$	8,784		$	7,069

Schedule of Statements of Operations Related to Derivative Financial Instruments

Other income (expense), net, includes the following related to derivative financial instruments for the three and nine months ended September 30:



	Three Months						Nine Months
	2014			2013			2014			2013
Losses on economic hedges	$	(6	)	$	(103	)	$	(374	)	$	(3,822	)
Ineffectiveness of cash flow hedges	—			—			—			(657		)
Write-off of losses in AOCL for a discontinued hedge relationship	(408		)	(7,780		)	(1,580		)	(9,434		)
	$	(414	)	$	(7,883	)	$	(1,954	)	$	(13,913	)

Tabular disclosure of pertinent information about a derivative or group of derivatives on a disaggregated basis, such as for individual instruments, or small groups of similar instruments. May include a combination of the type of instrument, risks being hedged, notional amount, hedge designation, related hedged item, inception date, maturity date, or other relevant item.

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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-Section 50
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Reference 2: http://www.xbrl.org/2003/role/presentationRef
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Reference 3: http://www.xbrl.org/2003/role/presentationRef
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Reference 4: http://www.xbrl.org/2003/role/presentationRef
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Reference 5: http://www.xbrl.org/2003/role/presentationRef
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Reference 6: http://www.xbrl.org/2003/role/presentationRef
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Reference 7: http://www.xbrl.org/2003/role/presentationRef
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Reference 8: http://www.xbrl.org/2003/role/presentationRef
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Reference 9: http://www.xbrl.org/2003/role/presentationRef
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Reference 10: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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Reference 11: http://www.xbrl.org/2003/role/presentationRef
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Other Income and Expenses [Abstract]

Interest Expense (Tables)

9 Months Ended

Sep. 30, 2014

Schedule of Components of Interest Expense

The following table presents the components of interest expense for the three and nine months ended September 30:



	Three months				Nine Months
	2014		2013		2014		2013
Financing liabilities (1) (2)	$	88,246	$	81,192	$	281,930	$	185,116
Other secured borrowings	20,790		21,608		62,359		60,211
Match funded liabilities	15,097		10,775		46,762		65,774
Senior unsecured notes	6,141		—		9,466		—
Other	2,775		3,310		8,612		8,463
	$	133,049	$	116,885	$	409,129	$	319,564

(1)



	Three months				Nine Months
	2014		2013		2014		2013
Servicing fees collected on behalf of HLSS	$	177,113	$	200,838	$	553,423	$	431,795
Less: Subservicing fee retained by Ocwen	83,550		102,040		266,514		214,587
Net servicing fees remitted to HLSS	93,563		98,798		286,909		217,208
Less: Reduction in financing liability	8,736		17,764		12,960		32,357
Interest expense on HLSS financing liability	$	84,827	$	81,034	$	273,949	$	184,851


(2)	Interest expense that we expect to be paid on the HMBS-related borrowings is included with net fair value gains in Other revenues. See Note 2 – Securitizations and Variable Interest Entities for additional information.



	Three months				Nine Months
	2014		2013		2014		2013
Servicing fees collected on behalf of HLSS	$	177,113	$	200,838	$	553,423	$	431,795
Less: Subservicing fee retained by Ocwen	83,550		102,040		266,514		214,587
Net servicing fees remitted to HLSS	93,563		98,798		286,909		217,208
Less: Reduction in financing liability	8,736		17,764		12,960		32,357
Interest expense on HLSS financing liability	$	84,827	$	81,034	$	273,949	$	184,851

Basic and Diluted Earnings (Loss) per Share (Tables)

9 Months Ended

Sep. 30, 2014

Earnings Per Share [Abstract]

Schedule of Basic EPS to Diluted EPS

The following is a reconciliation of the calculation of basic EPS to diluted EPS for the three and nine months ended September 30:



	Three Months					Nine Months
	2014			2013		2014		2013
Basic EPS:
Net income (loss) attributable to Ocwen common stockholders	$	(76,189	)	$	54,725	$	49,273	$	164,120

Weighted average shares of common stock	130,551,197			135,787,834		133,318,381		135,705,892

Basic EPS	$	(0.58	)	$	0.40	$	0.37	$	1.21

Diluted EPS (1):
Net income (loss) attributable to Ocwen common stockholders	$	(76,189	)	$	54,725	$	49,273	$	164,120
Preferred stock dividends (1) (2)	—			—		—		—
Adjusted net income (loss) attributable to Ocwen	$	(76,189	)	$	54,725	$	49,273	$	164,120

Weighted average shares of common stock	130,551,197			135,787,834		133,318,381		135,705,892
Effect of dilutive elements (1):
Preferred Shares (1) (2)	—			—		—		—
Stock options	—			4,263,965		3,558,689		4,030,297
Common stock awards	—			5,396		4,256		11,301
Dilutive weighted average shares of common stock	130,551,197			140,057,195		136,881,326		139,747,490

Diluted EPS	$	(0.58	)	$	0.39	$	0.36	$	1.17

Stock options excluded from the computation of diluted EPS:
Anti-dilutive (3)	91,250			—		47,083		—
Market-based (4)	295,000			547,500		295,000		547,500


(1)	For the three months ended September 30, 2014, we have excluded the effect of the Preferred Shares, stock options and common stock awards from the computation of diluted EPS because of the anti-dilutive effect of our reported net loss.

(2)


(3)	These options were anti-dilutive because their exercise price was greater than the average market price of our stock.


(4)	Shares that are issuable upon the achievement of certain performance criteria related to Ocwen’s stock price and an annualized rate of return to investors.

Business Segment Reporting (Tables)

9 Months Ended

Sep. 30, 2014

Segment Reporting Information [Line Items]

Schedule of Segment Reporting Information

Financial information for our segments is as follows:



	Servicing			Lending			Corporate Items and Other			Corporate Eliminations			Business Segments Consolidated
Results of Operations
Three months ended September 30, 2014
Revenue	$	485,303		$	26,877		$	1,557		$	(39	)	$	513,698
Operating expenses (1)	313,964			22,632			118,482			(39		)	455,039
Income (loss) from operations	171,339			4,245			(116,925		)	—			58,659
Other income (expense):
Interest income	903			4,825			865			—			6,593
Interest expense	(124,106		)	(2,601		)	(6,342		)	—			(133,049		)
Other	(3,618		)	139			(990		)	—			(4,469		)
Other income (expense), net	(126,821		)	2,363			(6,467		)	—			(130,925		)
Income (loss) before income taxes	$	44,518		$	6,608		$	(123,392	)	$	—		$	(72,266	)

Three months ended September 30, 2013
Revenue	$	496,302		$	33,539		$	1,801		$	(402	)	$	531,240
Operating expenses (1)	305,654			29,504			11,143			(41		)	346,260
Income (loss) from operations	190,648			4,035			(9,342		)	(361		)	184,980
Other income (expense):
Interest income	859			3,066			1,454			—			5,379
Interest expense (2)	(113,678		)	(3,279		)	72			—			(116,885		)
Other	(6,631		)	1,843			398			361			(4,029		)
Other income (expense), net	(119,450		)	1,630			1,924			361			(115,535		)
Income (loss) before income taxes	$	71,198		$	5,665		$	(7,418	)	$	—		$	69,445



	Servicing			Lending			Corporate Items and Other			Corporate Eliminations			Business Segments Consolidated
Nine months ended September 30, 2014
Revenue	$	1,526,606		$	86,811		$	4,734		$	(118	)	$	1,618,033
Operating expenses (1)	919,998			81,261			148,555			(118		)	1,149,696
Income (loss) from operations	606,608			5,550			(143,821		)	—			468,337
Other income (expense):
Interest income	1,805			13,117			2,550			—			17,472
Interest expense	(391,122		)	(8,271		)	(9,736		)	—			(409,129		)
Other	(4,622		)	3,846			710			—			(66		)
Other income (expense), net	(393,939		)	8,692			(6,476		)	—			(391,723		)
Income (loss) before income taxes	$	212,669		$	14,242		$	(150,297	)	$	—		$	76,614

Nine months ended September 30, 2013
Revenue	$	1,381,872		$	81,180		$	19,758		$	(492	)	$	1,482,318
Operating expenses (1)	795,645			69,543			95,361			(131		)	960,418
Income (loss) from operations	586,227			11,637			(75,603		)	(361		)	521,900
Other income (expense):
Interest income	1,382			12,432			3,516			—			17,330
Interest expense (2)	(309,606		)	(10,108		)	150			—			(319,564		)
Other	(30,961		)	6,852			2,977			361			(20,771		)
Other income (expense), net	(339,185		)	9,176			6,643			361			(323,005		)
Income (loss) before income taxes	$	247,042		$	20,813		$	(68,960	)	$	—		$	198,895



	Servicing		Lending		Corporate Items and Other		Corporate Eliminations		Business Segments Consolidated
Total Assets
September 30, 2014	$	6,059,359	$	1,706,964	$	589,317	$	—	$	8,355,640

December 31, 2013	$	6,295,976	$	1,195,812	$	435,215	$	—	$	7,927,003

September 30, 2013	$	4,086,378	$	704,641	$	609,236	$	—	$	5,400,255


(1)	Depreciation and amortization expense are as follows:



	Servicing		Lending		Corporate Items and Other		Business Segments Consolidated
For the three months ended September 30, 2014
Depreciation expense	$	2,636	$	98	$	3,022	$	5,756
Amortization of mortgage servicing rights	60,689		94		—		60,783
Amortization of debt discount	331		—		344		675
Amortization of debt issuance costs	1,114		—		—		1,114

For the three months ended September 30, 2013
Depreciation expense	$	3,589	$	135	$	2,973	$	6,697
Amortization of mortgage servicing rights	79,035		148		—		79,183
Amortization of debt discount	330		—		—		330
Amortization of debt issuance costs	1,178		—		—		1,178

For the nine months ended September 30, 2014
Depreciation expense	$	8,099	$	235	$	8,267	$	16,601
Amortization of mortgage servicing rights	185,263		613		199		186,075
Amortization of debt discount	991		—		513		1,504
Amortization of debt issuance costs	3,241		—		—		3,241

For the nine months ended September 30, 2013
Depreciation expense	$	9,968	$	209	$	6,976	$	17,153
Amortization of mortgage servicing rights	197,287		148		—		197,435
Amortization of debt discount	1,082		—		—		1,082
Amortization of debt issuance costs	3,264		—		—		3,264

(2)

Depreciation and Amortization [Member]

Segment Reporting Information [Line Items]

Schedule of Segment Reporting Information

Depreciation and amortization expense are as follows:



	Servicing		Lending		Corporate Items and Other		Business Segments Consolidated
For the three months ended September 30, 2014
Depreciation expense	$	2,636	$	98	$	3,022	$	5,756
Amortization of mortgage servicing rights	60,689		94		—		60,783
Amortization of debt discount	331		—		344		675
Amortization of debt issuance costs	1,114		—		—		1,114

For the three months ended September 30, 2013
Depreciation expense	$	3,589	$	135	$	2,973	$	6,697
Amortization of mortgage servicing rights	79,035		148		—		79,183
Amortization of debt discount	330		—		—		330
Amortization of debt issuance costs	1,178		—		—		1,178

For the nine months ended September 30, 2014
Depreciation expense	$	8,099	$	235	$	8,267	$	16,601
Amortization of mortgage servicing rights	185,263		613		199		186,075
Amortization of debt discount	991		—		513		1,504
Amortization of debt issuance costs	3,241		—		—		3,241

For the nine months ended September 30, 2013
Depreciation expense	$	9,968	$	209	$	6,976	$	17,153
Amortization of mortgage servicing rights	197,287		148		—		197,435
Amortization of debt discount	1,082		—		—		1,082
Amortization of debt issuance costs	3,264		—		—		3,264

Related Party Transactions (Tables)

9 Months Ended

Sep. 30, 2014

Schedule of Revenues and Expenses Related to Various Service Agreements



	Three Months				Nine Months
	2014		2013		2014		2013
Revenues and Expenses:
Altisource:
Revenues	$	10,716	$	5,185	$	30,007	$	15,390
Expenses	27,099		13,153		70,577		36,650
HLSS:
Revenues	$	84	$	20	$	458	$	172
Expenses	345		386		1,590		1,615
AAMC
Revenues	$	251	$	—	$	952	$	—
Residential
Revenues	$	4,618	$	493	$	12,141	$	606

Schedule of Amounts Receivable or Payable



	September 30, 2014			December 31, 2013
Net Receivable (Payable)
Altisource	$	(12,626	)	$	(3,843	)
HLSS	(17,812		)	(59,505		)
AAMC	278			943
Residential	—			50
	$	(30,160	)	$	(62,355	)

Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2014

Commitments and Contingencies Disclosure [Abstract]

Schedule of Indemnification Obligations



	2014			2013
Beginning balance	$	192,716		$	38,140
Provision for representation and warranty obligations	5,076			18,116
New production reserves	820			1,055
Obligations assumed in connection with MSR and servicing business acquisitions	—			189,742
Charge-offs and other (1)	(54,776		)	(40,979		)
Ending balance	$	143,836		$	206,074


(1)	Includes principal and interest losses realized in connection with repurchased loans, make-whole, indemnification and fee payments and settlements net of recoveries, if any.

Description of Business and Basis of Presentation - Change in Accounting Estimate (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Change in Accounting Estimate [Line Items]
Reduction in Amortization of mortgage servicing rights	$ (60,783)	$ (79,183)	$ (186,075)	$ (197,435)
Net income attributable to Ocwen common stockholders	$ (76,189)	$ 54,725	$ 49,273	$ 164,120
Increase in Earnings per share attributable to Ocwen common stockholders:
Basic (in USD per share)	$ (0.58)	$ 0.40	$ 0.37	$ 1.21
Diluted (in USD per share)	$ (0.58)	$ 0.39	$ 0.36	$ 1.17
MSR Amortization Change In Estimate [Member]
Change in Accounting Estimate [Line Items]
Reduction in Amortization of mortgage servicing rights	$ (21,309)		$ (69,244)
Net income attributable to Ocwen common stockholders	$ 14,920		$ 48,485
Increase in Earnings per share attributable to Ocwen common stockholders:
Basic (in USD per share)	$ 0.11		$ 0.36
Diluted (in USD per share)	$ 0.11		$ 0.35

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

Description of Business and Basis of Presentation - Narrative (Details) $ in Millions	12 Months Ended
	Dec. 31, 2013 USD ($)
Other Assets [Member]
Change in Accounting Estimate [Line Items]
Debt service accounts reclassified	$ 129.9

Restatement of Previously Issued Consolidated Financial Statements - Consolidated Statement of Operations Restated (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Interest expense	$ (133,049)	$ (116,885)	$ (409,129)	$ (319,564)
Total other expense, net	(130,925)	(115,535)	(391,723)	(323,005)
Income before income taxes	(72,266)	69,445	76,614	198,895
Income tax expense (benefit)	2,992	8,873	24,374	23,752
Net income (loss)	(75,258)	60,572	52,240	175,143
Net income attributable to Ocwen common stockholders	$ (76,189)	$ 54,725	$ 49,273	$ 164,120
Earnings (loss) per share attributable to Ocwen common stockholders
Basic (in USD per share)	$ (0.58)	$ 0.40	$ 0.37	$ 1.21
Diluted (in USD per share)	$ (0.58)	$ 0.39	$ 0.36	$ 1.17
As Reported [Member]
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Interest expense		$ (110,055)		$ (303,339)
Total other expense, net		(108,705)		(306,780)
Income before income taxes		76,275		215,120
Income tax expense (benefit)		9,273		26,250
Net income (loss)		67,002		188,870
Net income attributable to Ocwen common stockholders		$ 61,155		$ 177,847
Earnings (loss) per share attributable to Ocwen common stockholders
Basic (in USD per share)		$ 0.45		$ 1.31
Diluted (in USD per share)		$ 0.44		$ 1.27
Restatement Adjustment [Member]
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Interest expense		$ (6,830)		$ (16,225)
Total other expense, net		(6,830)		(16,225)
Income before income taxes		(6,830)		(16,225)
Income tax expense (benefit)		(400)		(2,498)
Net income (loss)		(6,430)		(13,727)
Net income attributable to Ocwen common stockholders		$ (6,430)		$ (13,727)
Earnings (loss) per share attributable to Ocwen common stockholders
Basic (in USD per share)		$ (0.05)		$ (0.10)
Diluted (in USD per share)		$ (0.05)		$ (0.10)

Restatement of Previously Issued Consolidated Financial Statements - Consolidated Statement of Comprehensive Income Restated (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net income (loss)	$ (75,258)	$ 60,572	$ 52,240	$ 175,143
Comprehensive income (loss)	$ (74,872)	65,317	$ 53,607	174,515
As Reported [Member]
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net income (loss)		67,002		188,870
Comprehensive income (loss)		71,747		188,242
Restatement Adjustment [Member]
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net income (loss)		(6,430)		(13,727)
Comprehensive income (loss)		$ (6,430)		$ (13,727)

Restatement of Previously Issued Consolidated Financial Statements - Consolidated Statement of Changes in Equity Restated (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net income (loss)	$ (75,258)	$ 60,572	$ 52,240	$ 175,143
As Reported [Member]
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net income (loss)		67,002		188,870
Restatement Adjustment [Member]
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net income (loss)		$ (6,430)		$ (13,727)

Restatement of Previously Issued Consolidated Financial Statements - Consolidated Statement of Cash Flows Restated (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net income (loss)	$ (75,258)	$ 60,572	$ 52,240	$ 175,143
Adjustments to reconcile net income to net cash provided by operating activities:
Decrease (increase) in deferred tax assets, net			35,884	(2,393)
Net cash provided by operating activities			559,015	1,004,230
Repayments of other secured borrowings			(4,532,029)	(7,166,050)
Net cash used in financing activities			$ 294,004	(916,911)
As Reported [Member]
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net income (loss)		67,002		188,870
Adjustments to reconcile net income to net cash provided by operating activities:
Decrease (increase) in deferred tax assets, net				105
Net cash provided by operating activities				1,020,455
Repayments of other secured borrowings				(7,182,275)
Net cash used in financing activities				(933,136)
Restatement Adjustment [Member]
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net income (loss)		$ (6,430)		(13,727)
Adjustments to reconcile net income to net cash provided by operating activities:
Decrease (increase) in deferred tax assets, net				(2,498)
Net cash provided by operating activities				(16,225)
Repayments of other secured borrowings				16,225
Net cash used in financing activities				$ 16,225

Securitization and Variable Interest Entities - Schedule of Cash Flows Related to Transfers Accounted for as Sales (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Transfers and Servicing [Abstract]
Proceeds received from securitizations	$ 1,369,468	$ 1,776,309	$ 4,346,991	$ 6,240,459
Servicing fees collected	10,840	6,317	25,174	13,125
Purchases of previously transferred assets, net of claims reimbursed	2,237	0	2,237	0
Cash flows received from and paid to securitization trusts, total	$ 1,382,545	$ 1,782,626	$ 4,374,402	$ 6,253,584

Securitization and Variable Interest Entities - Schedule of Assets That Relate to Continuing Involvement with Transferred Financial Assets with Servicing Rights and Maximum Exposure to Loss Including the Unpaid Principal Balance (Details) - USD ($)
$ in Thousands

Sep. 30, 2014

Dec. 31, 2013

Mortgage servicing rights, at amortized cost

$ 84,397

$ 44,615

Mortgage servicing rights, at fair value

2,965

3,075

Unpaid principal balance of loans transferred

10,153

15,888

^[1]

8,816,416

5,641,277

Maximum exposure to loss

$ 8,913,931

$ 5,704,855

[1]	The UPB of the loans transferred is the maximum exposure to loss under our standard representations and warranties obligations.

Securitization and Variable Interest Entities - Narrative (Details) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013
Servicing Assets at Fair Value [Line Items]
Average period to securitization			30 days
Percentage of loan transferred through securitization 30 days or more past due			4.40%		2.60%
Charge-offs, net of recoveries associated with transferred loans	$ 0		$ 0
Transfers accounted for as secured borrowings, associated liabilities, carrying amount	2,035,639,000		2,035,639,000		$ 2,364,814,000
Advance Receivable Backed Notes Series F [Member]
Servicing Assets at Fair Value [Line Items]
Transfers accounted for as secured borrowings, associated liabilities, carrying amount	5,013,000		5,013,000		33,211,000
Lending [Member] \| HECM [Member]
Servicing Assets at Fair Value [Line Items]
Loans pledged as collateral	1,300,000,000		1,300,000,000		618,000,000
HMBS - Related Borrowings [Member]
Servicing Assets at Fair Value [Line Items]
Secured borrowings	1,200,000,000		1,200,000,000		$ 615,600,000
Mortgage Servicing Rights - Amortized Costs [Member]
Servicing Assets at Fair Value [Line Items]
Acquisitions	$ 10,700,000	$ 16,300,000	$ 32,100,000	$ 63,200,000
Advance Receivable Backed Notes Series F [Member] \| Maximum [Member]
Servicing Assets at Fair Value [Line Items]
Account payable under guarantee, percentage of notes outstanding			10.00%

Business Acquisitions - Purchase Price Allocation (Details) - USD ($)
$ in Thousands

Sep. 30, 2014

Dec. 31, 2013

Sep. 30, 2013

Feb. 15, 2013

Dec. 31, 2012

$ (143,836)

^[1]

$ (192,716)

^[1]

$ (206,074)

$ (38,140)

$ 420,201

MSRs

^[2]

$ 401,314

^[2]

1,786,409

Deferred tax assets

16,423

2,989

(49,500)

Total identifiable net assets

(25,125)

2,132,510

211,419

ResCap [Member] | Initial Estimate [Member]

2,343,929

MSRs

^[2]

393,891

^[2]

1,622,348

Deferred tax assets

22,398

2,989

(49,500)

Total identifiable net assets

(24,840)

1,967,286

204,743

ResCap [Member] | Adjustments [Member]

2,172,029

MSRs

^[2]

7,423

^[2]

164,061

Deferred tax assets

(5,975)

Total identifiable net assets

(285)

165,224

6,676

Employee termination benefits [Member]

$ 171,900

[1]

See Note 22 – Commitments and Contingencies for additional information.

[2]

Business Acquisitions - Post-Acquisition Results of Operations (Details) - ResCap [Member] - USD ($) $ in Thousands	3 Months Ended	8 Months Ended
	Sep. 30, 2013	Sep. 30, 2013
Business Acquisition [Line Items]
Revenues	$ 212,164	$ 508,589
Net income	$ 8,230	$ 81,362

Business Acquisitions - Pro Forma Results of Operations (Details) - ResCap [Member] $ in Thousands	9 Months Ended
	Sep. 30, 2013 USD ($)
Business Acquisition [Line Items]
Revenues	$ 1,530,055
Net income	$ 205,062

Business Acquisitions - Schedule of Restructuring Reserve Liability (Details)
$ in Thousands

9 Months Ended

Sep. 30, 2014

USD ($)

Restructuring Reserve [Roll Forward]

$ 4,816

14,748

^[1]

Amortization of discount

Payments

(17,215)

Lease termination costs [Member]

2,349

^[2]

Restructuring Reserve [Roll Forward]

7,432

2,813

^[1]

Amortization of discount

115

Payments

(2,928)

Restructuring Reserve [Roll Forward]

7,432

^[2]

Total [Member]

12,248

17,561

^[1]

Amortization of discount

115

Payments

(20,143)

$ 9,781

^[2]

[1]

[2]

We expect the remaining liability for employee termination benefits at September 30, 2014 to be settled in late 2014 or early 2015.

Business Acquisitions - Narrative (Details)

9 Months Ended

20 Months Ended

Jan. 31, 2014

USD ($)

Apr. 01, 2013

USD ($)

Mar. 31, 2013

USD ($)

Feb. 15, 2013

USD ($)

loan

Sep. 30, 2014

USD ($)

Sep. 30, 2013

USD ($)

Sep. 30, 2014

USD ($)

Jan. 30, 2014

Dec. 31, 2013

USD ($)

Mar. 30, 2013

$ 420,201,000

Useful life of MSRs and goodwill

15 years

Purchase price

^[1]

$ 2,260,830,000

^[1]

174,600,000

Contingent consideration

^[2]

$ 54,220,000

Debt instrument net additional capital deployed

$ 840,000,000

Proceeds from Issuance of Debt

$ 1,200,000,000

Number Of New Line Of Credit Facility | loan

Number Of Existing Line Of Credit Facility | loan

Recognized identifiable assets acquired and liabilities assumed, assets

$ 2,343,929,000

^[1]

$ 2,418,554,000

ResCap [Member] | Senior Secured Term Loan [Member]

211,419,000

ResCap [Member] | Mortgage Servicing Rights [Member]

1,300,000,000

ResCap [Member] | Mortgage Servicing Rights [Member] | Freddie Mac and Ginnie Mae Loans [Member]

44,900,000,000

ResCap [Member] | Subservice Mortgage Servicing Rights [Member]

111,200,000,000

Correspondent One [Member]

$ 27,000,000,000

Recognized identifiable assets acquired and liabilities assumed, assets

$ 26,400,000

Cash

23,000,000

Recognized identifiable assets acquired and liabilities assumed, current assets, receivables

1,100,000

Recognized loss on changes in fair value of investment

400,000

Correspondent One [Member] | Unrelated Party [Member]

Correspondent One [Member] | Altisource [Member]

$ 900,000

Percentage of voting interests acquired

100.00%

49.00%

Liberty Acquisition [Member]

$ 12,600,000

Purchase price

$ 22,000,000

Recognized identifiable assets acquired and liabilities assumed, assets

55,200,000

31,100,000

Cash

4,600,000

Recognized identifiable assets acquired and liabilities assumed, current assets, receivables

11,200,000

Repayment of outstanding debt

9,100,000

Reverse mortgage acquired

60,000,000

Recognized identifiable assets acquired and liabilities assumed, current assets, loans held for sale

10,300,000

Purchase price allocation warehouse facilities

(46,300,000)

Mortgage backed security borrowings

(10,200,000)

$ 3,000,000

OSI [Member]

Percentage of voting interests acquired

Purchase price

$ 11,000,000

87.35%

26.00%

Recognized identifiable assets acquired and liabilities assumed, assets

$ 20,000,000

Cash

$ 3,200,000

Recognized assets acquired and liabilities assumed

100.00%

Noncontrolling interest, ownership percentage by parent

12.65%

Recognized identifiable assets acquired and liabilities assumed, mortgage service rights

$ 9,000,000

Recognized identifiable assets acquired and liabilities assumed, mortgage backed securities

$ 7,700,000

Servicing [Member]

14,400,000

Lending [Member]

Corporate and Other [Member]

(100,000)

$ 3,300,000

[1]	See Note 3 – Business Acquisitions for information regarding the acquisitions of Ocwen Structured Investments, LLC and Correspondent One S.A. during the three months ended March 31, 2014 and 2013, respectively.
[2]	See Note 3 – Business Acquisitions for additional information.

Fair Value - Schedule of Fair Value Assets and Liabilities (Details) - USD ($)
$ in Thousands

Sep. 30, 2014

Dec. 31, 2013

Sep. 30, 2013

Dec. 31, 2012

$ 335,950

$ 503,753

$ 335,102

$ 426,480

HMBS-related borrowings, at fair value

1,854,949

1,249,380

Carrying Value [Member]

407,887

566,660

Total Financing liabilities

2,057,490

1,266,973

Total Other secured borrowings

1,666,427

1,777,669

MSRs:

Total MSRs

1,958,766

2,069,381

Carrying Value [Member] | Level 1 [Member] | Forward Mortgage Backed Securities Trades [Member]

Carrying Value [Member] | Level 2 [Member]

^[1]

(1,089)

6,905

^[1]

335,950

503,753

Carrying Value [Member] | Level 2 [Member] | Interest Rate Lock Commitments [Member]

Senior unsecured notes

350,000

Carrying Value [Member] | Level 3 [Member]

^[1]

6,117

8,433

Loans held for sale, at lower of cost or fair value

^[2]

71,937

62,907

Loans held for investment - Reverse mortgages, at fair value

^[1]

1,315,324

618,018

^[3]

3,346,865

3,443,215

Receivables, net

^[3]

245,817

152,516

Financial liabilities:

Match Funded Liabilities

^[3]

2,035,639

2,364,814

HMBS-related borrowings, at fair value

^[1]

1,236,094

615,576

Financing liability - MSRs pledged

^[1]

618,855

633,804

^[3]

202,541

17,593

Senior secured term loan

^[3]

1,276,142

1,284,901

Carrying Value [Member] | Level 3 [Member] | Interest Rate Cap [Member]

^[3]

390,285

492,768

MSRs:

MSRs, at fair value

^[1]

101,948

116,029

MSRs, at amortized cost

^[3]

1,856,818

1,953,352

^[1]

442

Fair Value [Member]

407,887

566,660

Total Financing liabilities

2,061,210

1,266,973

Total Other secured borrowings

1,649,886

1,762,876

MSRs:

Total MSRs

2,466,341

2,557,748

Fair Value [Member] | Level 1 [Member] | Forward Mortgage Backed Securities Trades [Member]

Fair Value [Member] | Level 2 [Member]

^[1]

(1,089)

6,905

^[1]

335,950

503,753

Fair Value [Member] | Level 2 [Member] | Interest Rate Lock Commitments [Member]

Senior unsecured notes

338,625

Fair Value [Member] | Level 3 [Member]

^[1]

6,117

8,433

Loans held for sale, at lower of cost or fair value

^[2]

71,937

62,907

Loans held for investment - Reverse mortgages, at fair value

^[1]

1,315,324

618,018

^[3]

3,346,865

3,443,215

Receivables, net

^[3]

245,817

152,516

Financial liabilities:

Match Funded Liabilities

^[3]

2,035,639

2,364,814

HMBS-related borrowings, at fair value

^[1]

1,236,094

615,576

Financing liability - MSRs pledged

^[1]

618,855

633,804

^[3]

206,261

17,593

Senior secured term loan

^[3]

1,259,601

1,270,108

Fair Value [Member] | Level 3 [Member] | Interest Rate Cap [Member]

^[3]

390,285

492,768

MSRs:

MSRs, at fair value

^[1]

101,948

116,029

MSRs, at amortized cost

^[3]

2,364,393

2,441,719

^[1]

$ 91

$ 442

[1]	Measured at fair value on a recurring basis.
[2]	Measured at fair value on a non-recurring basis.
[3]	Disclosed, but not carried, at fair value.

Fair Value - Reconciliation of Level 3 Assets (Details) - USD ($)
$ in Thousands

3 Months Ended

9 Months Ended

Sep. 30, 2014

Sep. 30, 2013

Sep. 30, 2014

Sep. 30, 2013

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]

$ 110,874

$ 0

Level 3 [Member]

$ (451,348)

$ (337,387)

(514,891)

(229,160)

18,114

(235,513)

(6,361)

(387,044)

110,874

24,156

(5,112)

^[1]

17,316

(16,453)

^[1]

30,839

Total realized and unrealized gains and (losses):

13,002

(218,197)

88,083

(331,977)

760

(722)

(10,778)

^[2]

17,194

^[2]

(12,363)

760

(722)

(10,778)

^[2]

4,831

Level 3 [Member] | Loans Held for Investment - Reverse Mortgages [Member]

(437,586)

(556,306)

(437,586)

(556,306)

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]

1,107,626

76,649

618,018

10,251

208,566

211,052

565,670

274,081

110,874

(27,592)

^[1]

(1,293)

(56,193)

^[1]

(2,164)

Total realized and unrealized gains and (losses):

180,974

209,759

620,351

282,168

26,724

4,445

76,955

^[2]

8,685

^[2]

26,724

4,445

76,955

^[2]

8,685

Level 3 [Member] | Mortgage Servicing Rights [Member]

1,315,324

290,853

1,315,324

290,853

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]

(629,579)

(437,734)

(633,804)

(303,705)

(239,851)

(388,473)

10,724

^[1]

17,764

14,949

^[1]

32,357

Total realized and unrealized gains and (losses):

10,724

(222,087)

14,949

(356,116)

^[2]

^[2]

^[2]

Level 3 [Member] | HMBS - Related Borrowings [Member]

(618,855)

(659,821)

(618,855)

(659,821)

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]

(1,033,712)

(73,641)

(615,576)

(10,179)

(190,452)

(206,714)

(572,031)

(272,652)

12,690

^[1]

1,021

25,725

^[1]

1,888

Total realized and unrealized gains and (losses):

(177,762)

(205,693)

(546,306)

(280,943)

(24,620)

(4,942)

(74,212)

^[2]

(3,333)

^[2]

(24,620)

(4,942)

(74,212)

^[2]

(3,333)

Level 3 [Member] | Derivative Financial Instruments, Assets [Member]

(1,236,094)

(284,276)

(1,236,094)

(284,276)

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]

176

442

(10,668)

24,156

^[1]

(176)

^[1]

(1,242)

Total realized and unrealized gains and (losses):

(176)

22,914

(6)

(374)

^[2]

117

^[2]

(12,363)

(6)

(374)

^[2]

(12,246)

Level 3 [Member] | MSRS [Member]

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]

104,220

97,163

116,029

85,213

(934)

^[1]

(934)

^[1]

Total realized and unrealized gains and (losses):

(934)

(1,338)

(225)

(13,147)

^[2]

11,725

^[2]

(1,338)

(225)

(13,147)

^[2]

11,725

$ 101,948

$ 96,938

$ 101,948

$ 96,938

[1]	In the event of a transfer of servicing to another party related to Rights to MSRs sold to HLSS, we are required to reimburse HLSS at predetermined contractual rates for the loss of servicing revenues. Settlements for Financing liability - MSRs pledged for the three and nine months ended September 30, 2014 includes $2.0 million of such reimbursements.
[2]	Total losses attributable to derivative financial instruments still held at September 30, 2014 were $0.4 million for the nine months ended September 30, 2014.

Fair Value - Narrative (Details) $ in Millions	9 Months Ended
Fair Value - Narrative (Details) $ in Millions	Sep. 30, 2014 USD ($)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Gains (losses) attributable to derivatives	$ (0.4)
HMBS - Related Borrowings [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Life	5 years 7 months 24 days
Repayment rate	19.28%
Discount rate	2.44%
HMBS - Related Borrowings [Member] \| Minimum [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Life	4 years 11 months 19 days
Repayment rate	4.82%
HMBS - Related Borrowings [Member] \| Maximum [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Life	10 years 9 months
Repayment rate	53.75%
Borrowings [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Discount rate	5.71%
Loans Held for Investment - Reverse Mortgages [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Life	6 years 11 months 27 days
Repayment rate	19.28%
Discount rate	3.20%
Loans Held for Investment - Reverse Mortgages [Member] \| Minimum [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Life	6 years 7 months 21 days
Repayment rate	4.82%
Loans Held for Investment - Reverse Mortgages [Member] \| Maximum [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Life	10 years 9 months
Repayment rate	53.75%
Mortgage Servicing Rights [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Discount rate	12.01%
Prepayment rate	14.16%
Delinquency rate	18.96%
Mortgage Servicing Rights [Member] \| Minimum [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Discount rate	9.23%
Prepayment rate	9.87%
Delinquency rate	6.77%
Fair value inputs basis spread on variable rate	0.00%
Mortgage Servicing Rights [Member] \| Maximum [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Discount rate	16.74%
Prepayment rate	16.82%
Delinquency rate	24.32%
Fair value inputs basis spread on variable rate	3.50%
Fair Value Mortgage Servicing Rights [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Discount rate	9.01%
Prepayment rate	8.55%
HLSS [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Servicing Revenue, Reimbursement Payable	$ 2.0

Loans Held for Sale - Fair Value (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Movement In Loans Held For Sale At Fair Value [Roll Forward]
Beginning balance	$ 503,753	$ 426,480
Originations and purchases	3,923,870	5,988,501
Proceeds from sales	(4,010,644)	(6,033,785)
Transfers to loans held for investment - reverse mortgages	(110,874)	0
Gain (loss) on sale of loans	39,486	(46,962)
Other	(9,641)	868
Ending balance	$ 335,950	$ 335,102

Loans Held for Sale - Lower of Cost or Fair Value (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Movement In Loans Held For Sale At Fair Value [Roll Forward]
Beginning balance	$ 62,907	$ 82,866
Purchases	2,083,282	1,144,853
Proceeds from sales	(1,744,273)	(654,916)
Principal payments	(248,552)	(317,528)
Transfers to accounts receivable	(96,257)	(190,185)
Transfers to real estate owned	(4,575)	(2,838)
Gain on sale of loans	32,471	20,336
Increase in valuation allowance	(16,282)	(6,510)
Other	3,216	10,675
Ending balance	$ 71,937	$ 86,753

Loans Held for Sale - Gain (Loss) on Sale of Loans (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Receivables [Abstract]
Gain on sales of loans	$ 42,185	$ 4,622	$ 145,455	$ 36,156
Change in fair value of IRLCs	(4,188)	18,912	(2,315)	5,918
Change in fair value of loans held for sale	(9,348)	14,362	(97)	1,452
Gain (loss) on economic hedge instruments	(1,145)	(9,408)	(32,183)	30,989
Other	(286)	(226)	(819)	(1,603)
Gain on sale of loans held for investment	$ 27,218	$ 28,262	$ 110,041	$ 72,912

Loans Held for Sale - Narrative (Details) - USD ($) $ in Thousands				3 Months Ended		9 Months Ended
	May 02, 2014	May 01, 2014	Mar. 04, 2014	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Mar. 03, 2014	Dec. 31, 2013	Dec. 31, 2012
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans held for sale, at lower of cost or fair value				$ 71,937	$ 86,753	$ 71,937	$ 86,753		$ 62,907	$ 82,866
Unpaid principal balance		$ 451,000						$ 549,400
Gain on loans held for sale, net				27,218	28,262	110,041	72,912
Payments to purchase loans held-for-sale		$ 479,600
Acquisitions				10,700	16,300	32,100	63,200
Loans restricted for securitization investors fair value				9,900	4,300	50,600	20,500
Gain on sales of reverse mortgage loans				20,400	14,500	51,400	20,600
Ginnie Mae [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans held for sale, at lower of cost or fair value				24,100	60,800	24,100	60,800
Line of Credit [Member] \| Lending [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Collateral				311,800		311,800
Line of Credit [Member] \| Servicing [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Collateral				21,100		21,100
Valuation Allowance for Loans Held for Sale [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Valuation allowance				$ 47,000	$ 27,000	$ 47,000	$ 27,000
HLSS [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Proceeds from sale of loans held-for-sale			$ 612,300
Gain on loans held for sale, net			7,200
HLSS [Member] \| FHA Buyout Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Proceeds from sale of loans held-for-sale			556,600
HLSS [Member] \| Servicing Advances [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Proceeds from sale of loans held-for-sale			$ 55,700
HLSS SEZ LP [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Proceeds from sale of loans held-for-sale	$ 20,200
Unrelated Party [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Proceeds from sale of loans held-for-sale	462,500
Gain on loans held for sale, net	$ 1,300

Advances - Schedule of Advance Payments by Financial Institution on Foreclosed Properties (Details) - USD ($)
$ in Thousands

Sep. 30, 2014

Dec. 31, 2013

Sep. 30, 2013

Dec. 31, 2012

Servicing, Principal and Interest [Member]

$ 987,286

$ 890,832

$ 944,931

$ 184,463

Servicing, Taxes and Insurance [Member]

198,540

141,307

Servicing, Foreclosures and Bankruptcy Costs [Member]

443,255

477,039

^[1]

340,882

268,053

Servicing [Member]

Corporate Items and Other [Member]

982,677

886,399

$ 4,609

$ 4,433

[1]	The balances at September 30, 2014 and December 31, 2013 are net of an allowance for losses of $48.4 million and $38.4 million, respectively.

Advances - Schedule of Activity in Advances (Details) - USD ($)
$ in Thousands

9 Months Ended

Sep. 30, 2014

Sep. 30, 2013

Advances [Roll Forward]

Transfers to match funded advances

$ 890,832

$ 184,463

Acquisitions

^[1]

99,318

708,415

(10,156)

(131,197)

Sales of advances to HLSS

^[2]

(61,673)

New advances, net of collections and other

7,292

244,923

Match Funded Advances [Roll Forward]

$ 987,286

$ 944,931

[1]

Servicing advances acquired through business acquisitions and asset acquisitions, primarily in connection with the acquisition of MSRs. See Note 3 – Business Acquisitions, Note 5 – Loans Held for Sale and Note 8 – Mortgage Servicing for additional information.

[2]

Advances - Narrative (Details) - USD ($) $ in Millions	Sep. 30, 2014	Dec. 31, 2013
Servicing, Foreclosures and Bankruptcy Costs [Member]
Advances On Behalf of Borrowers [Line Items]
Allowance for losses on advances	$ 48.4	$ 38.4

Match Funded Advances - Schedule of Advance Payments by Financial Institution on Foreclosed Properties (Details) - Residential Mortgage [Member] - USD ($) $ in Thousands	Sep. 30, 2014	Dec. 31, 2013	Sep. 30, 2013	Dec. 31, 2012
Match Funded Advances [Line Items]
Principal and interest	$ 1,360,568	$ 1,497,649
Taxes and insurance	788,612	830,113
Foreclosures, bankruptcy, real estate and other	210,399	224,621
Match funded advances	$ 2,359,579	$ 2,552,383	$ 533,725	$ 3,049,244

Match Funded Advances - Schedule of Activity in Match Funded Advances (Details) - Residential Mortgage [Member] - USD ($)
$ in Thousands

9 Months Ended

Sep. 30, 2014

Sep. 30, 2013

Sales of advances to HLSS

$ 2,552,383

$ 3,049,244

Acquisitions

^[1]

85,521

1,448,371

Transfers from advances

10,156

131,197

^[2]

(3,428,234)

Collections, net of new advances and other

(288,481)

(666,853)

Servicing Asset at Amortized Cost, Balance [Roll Forward]

$ 2,359,579

$ 533,725

[1]	Servicing advances acquired in connection with the acquisitions of MSRs through business acquisitions and asset acquisitions. See Note 3 – Business Acquisitions and Note 8 – Mortgage Servicing for additional information.
[2]	See Note 6 – Advances for additional information.

Mortgage Servicing - Schedule of Activity Related to MSRs - Amortization Method (Details) - USD ($)
$ in Thousands

9 Months Ended

Sep. 30, 2014

Sep. 30, 2013

Dec. 31, 2013

Estimated fair value at end of period

$ 101,948

$ 116,029

Total [Member]

Servicing Asset at Amortized Cost, Balance [Roll Forward]

Additions recognized on the sale of mortgage loans

1,953,352

$ 678,937

50,480

63,154

Servicing transfers and adjustments

(137)

(17,523)

(518)

2,052

Amortization

(186,075)

(197,899)

Estimated fair value at end of period

1,856,818

1,736,943

2,364,393

2,532,239

Total [Member] | OSI [Member]

Servicing Asset at Amortized Cost, Balance [Roll Forward]

Additions recognized in connection with acquisitions

^[1]

9,008

Total [Member] | ResCap Acquisition [Member]

Servicing Asset at Amortized Cost, Balance [Roll Forward]

Additions recognized in connection with acquisitions

^[1]

11,370

391,853

Total [Member] | Liberty Home Equity Solutions, Inc. [Member]

Servicing Asset at Amortized Cost, Balance [Roll Forward]

Additions recognized in connection with acquisitions

^[1]

2,532

Total [Member] | Ally MSR Transaction [Member]

Servicing Asset at Amortized Cost, Balance [Roll Forward]

Additions recognized in connection with acquisitions

683,787

Total [Member] | OneWest MSR Transaction [Member]

Servicing Asset at Amortized Cost, Balance [Roll Forward]

Additions recognized in connection with acquisitions

^[2]

1,516

127,047

Total [Member] | Greenpoint MSR Transaction [Member]

Servicing Asset at Amortized Cost, Balance [Roll Forward]

Additions recognized in connection with acquisitions

^[3]

3,690

Total [Member] | Other [Member]

Servicing Asset at Amortized Cost, Balance [Roll Forward]

Additions recognized in connection with acquisitions

$ 14,132

$ 3,003

[1]	See Note 3 – Business Acquisitions for additional information regarding MSRs recognized in connection with business acquisitions.
[2]	The acquired MSRs in 2014 relate to mortgage loans with a UPB of $1.1 billion and related servicing advances of $34.3 million acquired in the final closing of the OneWest MSR Transaction. The OneWest MSR Transaction closed in stages, and the majority of loans were boarded onto our primary servicing platform as of December 31, 2013. As of September 30, 2013, we had acquired MSRs of $127.0 million with a UPB of $30.5 billion and related servicing advance receivables of $371.6 million.
[3]	The acquired MSRs relate to mortgage loans with a UPB of $948.9 million and related servicing advances of $47.6 million.

Mortgage Servicing - Schedule of Activity Related to MSRs - Fair Value Method (Details) - USD ($)
$ in Thousands

9 Months Ended

Sep. 30, 2014

Sep. 30, 2013

Servicing Asset at Fair Value, Amount [Roll Forward]

$ 116,029

Changes in fair value

Servicing Asset at Fair Value, Amount [Roll Forward]

101,948

Conventional [Member]

Realization of cash flows and other changes

116,029

$ 85,213

Servicing transfers

(934)

Changes in fair value

Changes in assumptions

^[1]

(12,217)

19,800

^[1]

(930)

(8,075)

Residential Mortgage [Member]

$ 101,948

$ 96,938

[1]	Changes in fair value are recognized in Servicing and origination expense in the unaudited Consolidated Statements of Operations.

Mortgage Servicing - Schedule of Estimated Change in the Fair Value of Our MSRs (Details) $ in Thousands	Sep. 30, 2014 USD ($)
Transfers and Servicing [Abstract]
Weighted average prepayment speeds, 10%	$ (8,245)
Weighted average prepayment speeds, 20%	(16,137)
Discount rate (Option-adjusted spread), 10%	(4,100)
Discount rate (Option-adjusted spread), 20%	$ (7,905)

Mortgage Servicing - Schedule of Composition of Servicing and Subservicing Portfolios by Type of Property Serviced (Details) - USD ($)
$ in Thousands

Sep. 30, 2014

Dec. 31, 2013

Sep. 30, 2013

Schedule of Servicing and Subservicing Portfolio [Line Items]

Servicing

^[1]

$ 360,919,248

$ 397,546,635

$ 362,792,312

Subservicing

50,360,366

67,104,697

72,027,114

Assets Serviced

411,279,614

464,651,332

434,819,426

Commercial Real Estate [Member]

Schedule of Servicing and Subservicing Portfolio [Line Items]

Servicing

^[1]

Subservicing

216,111

400,502

495,312

Assets Serviced

216,111

400,502

495,312

Total [Member]

Schedule of Servicing and Subservicing Portfolio [Line Items]

Servicing

^[1]

360,919,248

397,546,635

362,792,312

Subservicing

50,576,477

67,505,199

72,522,426

Assets Serviced

$ 411,495,725

$ 465,051,834

$ 435,314,738

[1]	Includes primary servicing UPB of $160.8 billion, $175.1 billion and $177.1 billion at September 30, 2014, December 31, 2013 and September 30, 2013, respectively, for which the Rights to MSRs have been sold to HLSS.

Mortgage Servicing - Schedule of Components of Servicing and Subservicing Fees (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Transfers and Servicing [Abstract]
Servicing	$ 331,794	$ 335,884	$ 1,039,033	$ 887,500
Subservicing	30,926	35,286	95,509	115,437
Servicing and Subservicing fees, total	362,720	371,170	1,134,542	1,002,937
Home Affordable Modification Program (HAMP) fees	37,644	40,213	111,000	118,412
Late charges	27,634	30,445	97,002	85,930
Loan collection fees	8,655	8,387	25,573	22,524
Custodial accounts (float earnings)	1,831	743	5,235	4,533
Other	27,480	32,309	74,744	99,056
Fees, total	$ 465,964	$ 483,267	$ 1,448,096	$ 1,333,392

Mortgage Servicing - Narrative (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2014	Feb. 26, 2014	Dec. 31, 2013
Servicing Asset at Amortized Cost [Line Items]
Unpaid principal balance of small balance commercial loans serviced	$ 2,500.0	$ 2,400.0		$ 2,600.0
Float balances	3,500.0	3,700.0
Mortgage Servicing Rights [Member]
Servicing Asset at Amortized Cost [Line Items]
Principal amount outstanding on loans securitized or asset-backed financing arrangement			$ 11,800.0
OneWest MSR Transaction [Member] \| Mortgage Servicing Rights [Member]
Servicing Asset at Amortized Cost [Line Items]
Asset acquisition loans unpaid principal balance	30,500.0	1,100.0
Asset acquisition advances acquired	371.6	34.3
Acquisitions	127.0
Greenpoint MSR Transaction [Member] \| Mortgage Servicing Rights [Member]
Servicing Asset at Amortized Cost [Line Items]
Asset acquisition loans unpaid principal balance		948.9
Asset acquisition advances acquired		47.6
OASIS Series 2014-1 [Member] \| Other Secured Borrowings [Member]
Servicing Asset at Amortized Cost [Line Items]
Face amount			$ 123.6
HLSS [Member]
Servicing Asset at Amortized Cost [Line Items]
Unpaid Principal Balance	$ 177,100.0	$ 160,800.0		$ 175,100.0

Receivables - Schedule of Receivables (Details) - USD ($)
$ in Thousands

Sep. 30, 2014

Dec. 31, 2013

Servicing receivable, government-insured loan claims

^[1]

$ 60,236

$ 54,012

Servicing receivable, due from custodial accounts

33,553

2,943

Servicing receivable, reimbursable expenses

21,575

35,933

Servicing receivable, other

26,673

31,649

Servicing receivable, total

142,037

124,537

Income taxes receivable

56,174

6,369

Due from related parties

^[2]

30,075

14,553

Other receivables

^[3]

44,040

24,579

Other receivables, gross

272,326

170,038

Allowance for losses

^[1]

(26,509)

(17,522)

Receivables, total

$ 245,817

$ 152,516

[1]	The total allowance for losses at September 30, 2014 and December 31, 2013 includes $26.4 million and $17.4 million, respectively, related to receivables of our Servicing business. Allowance for losses related to defaulted FHA or VA insured loans repurchased from Ginnie Mae guaranteed securitizations (government-insured loan claims) at September 30, 2014 and December 31, 2013 were $17.4 million and $14.0 million, respectively.
[2]	See Note 20 – Related Party Transactions for additional information.
[3]	The balance at September 30, 2014 and December 31, 2013 includes $28.3 million and $13.6 million, respectively, related to losses expected to be indemnified under the terms of the merger agreement entered into in connection with the acquisition of Homeward. See Note 20 – Related Party Transactions for additional information regarding this receivable.

Receivables - Narrative (Detail) - USD ($)
$ in Millions

Sep. 30, 2014

Dec. 31, 2013

Servicing receivables, allowance for losses

^[1]

$ (26.4)

$ (17.4)

Allowance for losses related to FHA or VA insured loans

17.4

14.0

Other receivables, probable losses

$ 28.3

$ 13.6

[1]

Other Assets - Schedule of Other Assets (Details) - USD ($)
$ in Thousands

Sep. 30, 2014

Jan. 31, 2014

Dec. 31, 2013

Other Assets [Abstract]

Debt service accounts

^[1]

$ 100,003

$ 129,897

Prepaid lender fees and debt issuance costs, net

31,200

31,481

Purchase price deposit

25,000

^[2]

$ 15,000

10,000

^[2]

Prepaid income taxes

25,142

20,585

Prepaid expenses

12,095

16,132

Contingent assets - ResCap Acquisition

^[3]

6,169

15,494

^[4]

51,932

^[5]

11,771

37,631

21,851

Other assets

$ 237,240

$ 309,143

[1]	Under our advance funding facilities, we are contractually required to remit collections on pledged advances to the trustee within two days of receipt. The collected funds are not applied to reduce the related match funded debt until the payment dates specified in the indenture. The balances also include amounts that have been set aside from the proceeds of our match funded advance facilities and certain of our warehouse facilities to provide for possible shortfalls in the funds available to pay certain expenses and interest. The funds related to match funded facilities are held in interest earning accounts in the name of the SPE created in connection with the facility.
[2]	The balance at December 31, 2013 represents an initial cash deposit that we made in connection with the agreement we entered into on December 20, 2013 to acquire MSRs and related advances from Wells Fargo Bank, N.A. This deposit, along with an additional deposit of $15.0 million that we made in January 2014, is being held in an escrow account pending the transaction closing. See Note 22 – Commitments and Contingencies for additional information on this transaction.
[3]	See Note 15 – Derivative Financial Instruments and Hedging Activities for additional information.
[4]	As disclosed in Note 3 – Business Acquisitions, the purchase of certain MSRs and related advances from ResCap was not complete on the date of acquisition pending the receipt of certain consents and court approvals. We recorded a contingent asset effective on the date of the acquisition until we subsequently obtained the required consents and approvals for the MSRs and paid the additional purchase price.
[5]	The balance at December 31, 2013 includes an investment of $5.1 million in OSI and an investment of $6.6 million in PowerLink Settlement Services, LP and related entities. As disclosed in Note 3 – Business Acquisitions, we increased our ownership in OSI from 26.00% to 87.35% on January 31, 2014. Effective on that date, we began including the accounts of OSI in our consolidated financial statements and eliminated our current investment in consolidation. In June 2014, we received proceeds from the dissolution of PowerLink Settlement Services, LP equal to our investment.

Other Assets - Narrative (Details) - USD ($)
$ in Thousands

9 Months Ended

Sep. 30, 2014

Jan. 31, 2014

Jan. 30, 2014

Dec. 31, 2013

Period required to remit collections on pledged advances

2 days

Purchase price deposit

$ 25,000

^[1]

$ 15,000

$ 10,000

^[1]

Ocwen Structured Investments, LLC (OSI) [Member]

^[2]

$ 0

11,771

Percentage of voting interests acquired

5,100

87.35%

26.00%

Powerlink Settlement Services [Member]

$ 6,600

[1]

[2]

Borrowings - Schedule of Match Funded Liabilities (Details) - USD ($)
$ in Thousands

9 Months Ended

Sep. 30, 2014

Dec. 31, 2013

Transfers accounted for as secured borrowings, associated liabilities, carrying amount

$ 2,035,639

$ 2,364,814

Weighted average interest rate

1.91%

2.08%

Advance Receivable Backed Notes Series E [Member]

Transfers accounted for as secured borrowings, associated liabilities, carrying amount

^[1],[2]

$ 130,753

^[2]

$ 344,247

$ 417,388

^[2],[3]

Jun. 30, 2017

Advance Receivable Backed Notes Series F [Member]

^[2],[3]

Jun. 2015

Transfers accounted for as secured borrowings, associated liabilities, carrying amount

^[1]

$ 44,987

$ 5,013

33,211

^[3]

Dec. 31, 2015

Homeward Agency Advance Funding Trust 2012-1 [Member]

^[3]

Dec. 2014

Transfers accounted for as secured borrowings, associated liabilities, carrying amount

^[1],[4]

$ 0

^[4]

$ 0

21,019

^[3],[4]

Apr. 30, 2014

Class A1 Term Note [Member]

^[3],[4]

Apr. 2014

Transfers accounted for as secured borrowings, associated liabilities, carrying amount

^[1],[5]

$ 156,812

^[5]

$ 843,188

1,494,628

^[3],[5]

Oct. 31, 2044

Class A2 Variable Funding Note [Member]

^[3],[5]

Oct. 2014

Transfers accounted for as secured borrowings, associated liabilities, carrying amount

^[1],[5]

$ 75,693

^[5]

$ 408,019

385,645

^[3],[5]

Oct. 31, 2044

Class B Term Note [Member]

^[3],[5]

Oct. 2014

Transfers accounted for as secured borrowings, associated liabilities, carrying amount

^[1],[5]

$ 2,711

^[5]

$ 13,577

12,923

^[3],[5]

Oct. 03, 2044

Class A3 Variable Funding Note [Member]

^[3],[5]

Oct. 2014

Transfers accounted for as secured borrowings, associated liabilities, carrying amount

^[1],[6]

$ 78,405

^[6]

$ 421,595

^[3],[6]

Oct. 31, 2044

Match Funded Liabilties [Member]

^[3],[6]

Oct. 2014

Transfers accounted for as secured borrowings, associated liabilities, carrying amount

$ 489,361

$ 2,035,639

$ 2,364,814

London Interbank Offered Rate (LIBOR) [Member] | Advance Receivable Backed Notes Series E [Member]

London Interbank Offered Rate (LIBOR) [Member] | Advance Receivable Backed Notes Series F [Member]

^[2],[7]

1.75%

London Interbank Offered Rate (LIBOR) [Member] | Homeward Agency Advance Funding Trust 2012-1 [Member]

3.00%

London Interbank Offered Rate (LIBOR) [Member] | Class A1 Term Note [Member]

^[4]

3.00%

London Interbank Offered Rate (LIBOR) [Member] | Class A2 Variable Funding Note [Member]

^[5],[8],[9]

1.75%

London Interbank Offered Rate (LIBOR) [Member] | Class B Term Note [Member]

^[5],[8],[10]

1.67%

London Interbank Offered Rate (LIBOR) [Member] | Class A3 Variable Funding Note [Member]

^[5],[8],[11]

4.25%

^[6],[8]

1.75%

[1]	Borrowing capacity is available to us provided that we have additional eligible collateral to pledge. Collateral may only be pledged to one facility. At September 30, 2014, only $51.2 million of the available borrowing capacity could be used based on the amount of eligible collateral that had been pledged.
[2]	On October 28, 2014, the maximum borrowing capacity under this facility was reduced to $450.0 million and will further decline to $400.0 million in February 2015.
[3]	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 two advance facilities, there are multiple notes outstanding. For each note, after the amortization date, all collections that represent the repayment of advances pledged to the facility must be applied to reduce the balance of the note outstanding, and any new advances are ineligible to be financed.
[4]	Advance facility assumed as part of the acquisition of Homeward. This facility was terminated on April 16, 2014, and the advances pledged to the facility were transferred to another facility.
[5]	These notes were issued in connection with the OneWest MSR Transaction. On February 3, 2014, the maximum borrowing capacity on the 2013-VF2 notes was increased by $100.0 million to a total of $500.0 million. On March 17, 2014, the maximum borrowing capacity under the 2013-VF1 note declined by $500.0 million to a total of $1.0 billion. On October 1, 2014, the VF1 note was fully repaid. The maximum borrowing capacity of the VF2, Class A notes was increased to $564.0 million, and the maximum borrowing capacity of the VF2, Class B notes was increased to $36.0 million. In addition, the amortization date of the VF2 Class A and B notes was extended to October 15, 2015, and the maturity date was extended to October 15, 2045. Finally, a new series, the Series 2014-VF4 note, was issued with a maximum borrowing capacity of $600.0 million, an amortization date of October 15, 2015 and a maturity date of October 15, 2045. The interest margin on this new series of notes was set to 175 bps through July 14, 2015, to 200 bps on July 15, 2015, to 212 bps on August 15, 2015 and to 250 bps on September 15, 2015.
[6]	This note was issued on March 17, 2014 with a maximum borrowing capacity of $500.0 million. The interest margin on this note increased to 200 bps on July 15, 2014, to 225 bps on August 15, 2014 and 250 bps on September 15, 2014. On October 1, 2014, the maximum borrowing capacity of the note was increased to $600.0 million, the amortization date was extended to October 15, 2015 and the maturity date was extended to October 15, 2045. The interest margin was set to 175 bps through July 14, 2015, to 200 bps on July 15, 2015, to 225 bps on August 15, 2015 and to 250 bps on September 15, 2015.
[7]	1-Month LIBOR (1ML) was 0.16% and 0.17% at September 30, 2014 and December 31, 2013, respectively.
[8]	On July 15, 2014, the lenders agreed to waive the increase in interest margin scheduled for July 15, 2014. On August 15, 2014, the lenders also agreed to waive the increases in interest margin that were scheduled for August 15, 2014 and September 15, 2014.
[9]	The interest margin on these notes increased to 200 bps on July 15, 2014, to 225 bps on August 15, 2014 and 250 bps on September 15, 2014.
[10]	The interest margin on these notes increased to 191 bps on July 15, 2014, to 215 bps on August 15, 2014 and 238 bps on September 15, 2014. Effective October 1, 2014, the interest margin on these notes was set to 167 bps through July 14, 2015, to 191 bps on July 15, 2015, to 215 bps on August 15, 2015 and to 239 bps on September 15, 2015.
[11]	The interest margin on these notes increased to 486 bps on July 15, 2014, to 546 bps on August 15, 2014 and 607 bps on September 15, 2014. Effective October 1, 2014, the interest margin on these notes was set to 300 bps through July 14, 2015, to 343 bps on July 15, 2015, to 386 bps on August 15, 2015 and to 429 bps on September 15, 2015.

Borrowings - Financing Liabilities (Details) - USD ($)
$ in Thousands

9 Months Ended

Sep. 30, 2014

Dec. 31, 2013

Financing Liabilities [Member]

$ 2,057,490

$ 1,266,973

Servicing [Member] | Financing Liabilities [Member]

2,057,490

1,266,973

Servicing [Member] | Financing Liability Mortgage Servicing Rates Pledged 1 [Member] | Financing Liabilities [Member]

821,396

633,804

Servicing [Member] | OASIS Series 2014-1 [Member] | Financing Liabilities [Member]

$ 618,855

633,804

^[1]

Feb. 28, 2028

Servicing [Member] | Financing Liability Advances Pledged [Member] | Financing Liabilities [Member]

^[1]

$ 115,039

Lending [Member] | Financing Liabilities [Member]

87,502

^[2]

^[3]

Lending [Member] | Financing Liability Mortgage Servicing Rights Pledged 2 [Member] | Financing Liabilities [Member]

1,236,094

633,169

Lending [Member] | HMBS - Related Borrowings [Member] | Financing Liabilities [Member]

^[4]

17,593

London Interbank Offered Rate (LIBOR) [Member] | HMBS - Related Borrowings [Member] | Financing Liabilities [Member]

^[5]

$ 1,236,094

$ 615,576

^[5]

2.45%

[1]	OASIS noteholders are entitled to receive a monthly payment amount equal to the sum of: a) the designated servicing fee amount (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. The notes have a final stated maturity of February 2028. We accounted for this transaction as a financing. 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 security.
[2]	Under this repurchase agreement, the lender provides financing on a committed basis for $50.0 million and, at the discretion of the lender, on an uncommitted basis for an additional $50.0 million.
[3]	Certain advances were sold to HLSS Mortgage and HLSS SEZ LP on March 4, 2014 and May 2, 2014, respectively. These sales of advances did not qualify for sales accounting treatment and were accounted for as a financing. See Note 5 – Loans Held for Sale for additional information.
[4]	Sales of MSRs to a third party accounted for as a financing. The financing liability was being amortized using the interest method with the servicing income that was remitted to the purchaser representing payments of principal and interest. In April 2014, we derecognized the remaining liability related to this MSR sale. During 2014, we recognized a gain of $2.6 million on the extinguishment of the financing liability.
[5]	Represents amounts due to the holders of beneficial interests in Ginnie Mae guaranteed HMBS. The beneficial interests have no maturity dates, and the borrowings mature as the related loans are repaid. See Note 2 – Securitizations and Variable Interest Entities for additional information.

Borrowings - Secured Borrowings (Details) - USD ($)
$ in Thousands

9 Months Ended

Sep. 30, 2014

Dec. 31, 2013

Other Secured Borrowings [Member]

$ 2,057,490

$ 1,266,973

191,262

Debt, Weighted Average Interest Rate

^[1]

(4,358)

(5,349)

Long-term Debt

$ 1,666,427

$ 1,777,669

4.94%

4.86%

Other Secured Borrowings [Member] | Servicing [Member]

$ 27,338

Other Secured Borrowings [Member] | Servicing [Member] | Senior Secured Term Loan 2 [Member]

1,303,162

$ 1,323,286

^[1]

^[1]

1,280,500

1,290,250

$ (6,500)

Other Secured Borrowings [Member] | Servicing [Member] | Promissory Note [Member]

^[1]

Feb. 28, 2018

^[2]

$ 0

^[2]

$ 0

15,529

Other Secured Borrowings [Member] | Servicing [Member] | Repurchase Agreement [Member]

^[2]

May 31, 2017

^[3]

$ 27,338

^[3]

$ 22,662

17,507

Other Secured Borrowings [Member] | Lending [Member]

^[3]

Jun. 30, 2015

$ 163,924

Other Secured Borrowings [Member] | Lending [Member] | Master Repurchase Agreement [Member] | April 2014 [Member]

362,945

455,020

^[4]

17,199

^[4]

$ 132,801

105,659

Other Secured Borrowings [Member] | Lending [Member] | Master Repurchase Agreement [Member] | September 2014 - 2 [Member]

Apr. 30, 2015

^[5]

$ 10,645

^[5]

$ 64,355

91,990

Other Secured Borrowings [Member] | Lending [Member] | Master Repurchase Agreement [Member] | November 2014 [Member]

^[5]

Oct. 31, 2015

^[6]

$ 99,527

^[6]

$ 50,473

89,836

Other Secured Borrowings [Member] | Lending [Member] | Master Repurchase Agreement [Member] | September 2014 - 3 [Member]

Nov. 30, 2014

^[7]

$ 858

^[7]

$ 36,642

51,975

Other Secured Borrowings [Member] | Lending [Member] | Participation Agreement [Member]

^[7]

Oct. 31, 2014

^[8]

$ 0

^[8]

$ 54,369

81,268

Other Secured Borrowings [Member] | Lending [Member] | Mortgage Warehouse Agreement [Member] | July 2014 [Member]

^[8]

May 31, 2015

^[9]

$ 35,695

^[9]

$ 24,305

34,292

^[10]

May 31, 2015

Other Secured Borrowings [Member] | Corporate Items and Other [Member] | Securities Sold Under Agreement To Repurchase [Member]

^[10]

3.50%

^[10]

$ 0

Other Secured Borrowings [Member] | Corporate Items and Other [Member] | Total Servicing Lines Of Credit [Member]

^[10]

4,678

4,712

191,262

Eurodollar [Member] | Other Secured Borrowings [Member] | Servicing [Member] | Senior Secured Term Loan 2 [Member]

$ 1,670,785

$ 1,783,018

^[1]

3.75%

London Interbank Offered Rate (LIBOR) [Member] | Other Secured Borrowings [Member] | Servicing [Member] | Promissory Note [Member]

^[1]

1.25%

London Interbank Offered Rate (LIBOR) [Member] | Other Secured Borrowings [Member] | Lending [Member] | Master Repurchase Agreement [Member] | April 2014 [Member]

^[2]

3.50%

London Interbank Offered Rate (LIBOR) [Member] | Other Secured Borrowings [Member] | Lending [Member] | Master Repurchase Agreement [Member] | September 2014 - 3 [Member]

1.75%

London Interbank Offered Rate (LIBOR) [Member] | Other Secured Borrowings [Member] | Lending [Member] | Mortgage Warehouse Agreement [Member] | July 2014 [Member]

^[7]

2.75%

Minimum [Member] | London Interbank Offered Rate (LIBOR) [Member] | Other Secured Borrowings [Member] | Servicing [Member] | Repurchase Agreement [Member]

^[10]

2.75%

^[3]

2.00%

^[5]

1.75%

Maximum [Member] | London Interbank Offered Rate (LIBOR) [Member] | Other Secured Borrowings [Member] | Servicing [Member] | Repurchase Agreement [Member]

1.75%

^[3]

3.45%

^[5]

2.75%

Class A-2 Note [Member] | London Interbank Offered Rate (LIBOR) [Member] | Other Secured Borrowings [Member] | Corporate Items and Other [Member] | Securities Sold Under Agreement To Repurchase [Member]

2.00%

Class A-3 Note [Member] | London Interbank Offered Rate (LIBOR) [Member] | Other Secured Borrowings [Member] | Corporate Items and Other [Member] | Securities Sold Under Agreement To Repurchase [Member]

^[7]

2.00%

^[7]

3.00%

[1]	This facility had an initial balance of $1.3 billion and was issued with an original issue discount of $6.5 million that we are amortizing over the term of the loan. We are required to repay the principal amount of the borrowings in consecutive quarterly installments of $3.3 million. In addition, we are generally required to use the net cash proceeds (as defined) from any asset sale (as defined) to repay loan principal, subject to a 270-day reinvestment provision (or, in the case of a sale of MSRs, related servicing advances or other related assets to HLSS, we have a 180-day reinvestment provision and the net cash proceeds must be invested in MSRs or related assets, such as advances). We are also required to make mandatory prepayments in certain circumstances based on our corporate leverage ratio (as defined) if we have positive consolidated excess cash flow (as defined) in any fiscal year. The borrowings are secured by a first priority security interest in substantially all of the assets of Ocwen. Borrowings bear interest, at the election of Ocwen, at a rate per annum equal to either (a) the base rate [the greatest of (i) the prime rate in effect on such day, (ii) the federal funds rate in effect on such day plus 0.50% and (iii) the one-month Eurodollar rate (1-Month LIBOR)], plus a margin of 2.75% and a base rate floor of 2.25% or (b) the one month Eurodollar rate, plus a margin of 3.75% with a one month Eurodollar floor of 1.25%. To date, we have elected option (b) to determine the interest rate.
[2]	This note was repaid in full on February 28, 2014.
[3]	Under this repurchase agreement, the lender provides financing on a committed basis for $50.0 million and, at the discretion of the lender, on an uncommitted basis for an additional $50.0 million.
[4]	Under this repurchase agreement, the lender provides financing on a committed basis for $150.0 million and, at the discretion of the lender, on an uncommitted basis for an additional $150.0 million.
[5]	Under this repurchase agreement, the lender provides financing on a committed basis for $75.0 million and, at the discretion of the lender, on an uncommitted basis for an additional $75.0 million. On September 2, 2014, the maturity date of this facility was extended to October 2, 2014. On October 2, 2014, the maturity date was further extended to September 1, 2015.
[6]	Under this repurchase agreement, the lender provides financing on a committed basis for $150.0 million and, at the discretion of the lender, on an uncommitted basis for an additional $300.0 million. On October 24, 2014, this facility was repaid in full and terminated.
[7]	On September 2, 2014, the maturity date of this facility was extended to October 2, 2014, and the maximum borrowing capacity was reduced to $37.5 million on a committed basis plus an additional $37.5 million on an uncommitted basis at the discretion of the lender. On October 1, 2014, the maturity date was extended to October 31, 2014. Effective October 31, 2014, the maturity date was further extended to November 14, 2014.
[8]	Under this participation agreement, the lender provides financing on an uncommitted basis for $50.0 million to $100.0 million at the discretion of the lender. The participation agreement allows the lender to acquire a 100% beneficial interest in the underlying mortgage loans. The transaction does not qualify for sale accounting treatment and is accounted for as a secured borrowing. The lender earns the stated interest rate of the underlying mortgage loans while the loans are financed under the participation agreement.
[9]	In August 2014, the maturity date of this facility was extended to May 28, 2015.
[10]	Represents repurchase agreement for Class A-2 and A-3 notes issued by Ocwen Real Estate Asset Liquidating Trust 2007-1 which have a current face value of $22.4 million at September 30, 2014. This agreement has no stated credit limit and lending is determined for each transaction based on the acceptability of the securities presented as collateral.

Borrowings - Senior Unsecured Notes Redemption (Details) - Unsecured Debt [Member] - 6.625% Senior Notes due 2019	9 Months Ended
	Sep. 30, 2014
2016 [Member]
Debt Instrument, Redemption [Line Items]
Redemption price, percentage	104.969%
2017 [Member]
Debt Instrument, Redemption [Line Items]
Redemption price, percentage	103.313%
2018 and thereafter [Member]
Debt Instrument, Redemption [Line Items]
Redemption price, percentage	100.00%

Borrowings - Narrative (Details)

1 Months Ended

9 Months Ended

Oct. 01, 2014

USD ($)

Sep. 15, 2014

Aug. 15, 2014

Jul. 15, 2014

May 12, 2014

USD ($)

Mar. 17, 2014

USD ($)

Feb. 03, 2014

USD ($)

Apr. 30, 2014

USD ($)

Sep. 30, 2014

USD ($)

Facility

Feb. 28, 2015

USD ($)

Oct. 28, 2014

USD ($)

Sep. 02, 2014

USD ($)

Feb. 26, 2014

USD ($)

Dec. 31, 2013

USD ($)

Number of Line of Credit Facility | Facility

Change of control, purchase price, percentage

101.00%

Covenant compliance, consolidated tangible net worth

$ 630,000,000

Covenant compliance, percent of quarterly net income

65.00%

Covenant compliance, consolidated tangible net worth at period end

$ 957,100,000

London Interbank Offered Rate (LIBOR) [Member]

Basis for effective rate at period end

0.16%

0.17%

Advance Receivable Backed Notes Series E [Member]

Advance Receivable Backed Notes Series E [Member] | London Interbank Offered Rate (LIBOR) [Member]

^[1],[2]

$ 130,753,000

Class A2 Variable Funding Note [Member]

^[2],[3]

1.75%

^[1],[4]

$ 75,693,000

$ 500,000,000

Class A2 Variable Funding Note [Member] | London Interbank Offered Rate (LIBOR) [Member]

$ 100,000,000

Class A1 Term Note [Member]

^[4],[5],[6]

1.67%

^[1],[4]

$ 156,812,000

$ 1,000,000,000

Class A1 Term Note [Member] | London Interbank Offered Rate (LIBOR) [Member]

(500,000,000)

Class B Term Note [Member]

^[4],[5],[7]

1.75%

Class B Term Note [Member] | London Interbank Offered Rate (LIBOR) [Member]

^[1],[4]

$ 2,711,000

Class A3 Variable Funding Note [Member]

^[4],[5],[8]

4.25%

^[1],[9]

$ 78,405,000

Class A3 Variable Funding Note [Member] | London Interbank Offered Rate (LIBOR) [Member]

$ 500,000,000

OASIS Series 2014-1 [Member]

^[5],[9]

1.75%

Basis spread on unpaid principal balance

0.21%

Financing Liability Mortgage Servicing Rights Pledged 2 [Member]

Gain on retirement of financing liability

$ 2,600,000

Other Secured Borrowings [Member]

$ 191,262,000

Other Secured Borrowings [Member] | OASIS Series 2014-1 [Member]

^[10]

$ 4,358,000

$ 5,349,000

Unsecured Debt [Member] | 6.625% Senior Notes due 2019

$ 123,600,000

Interest rate, stated percentage

$ 350,000,000

6.625%

Proceeds from debt, net of issuance costs

$ 343,300,000

Days after the closing of the offering for the registration statement to become effective (on or prior to 270 days)

270 days

Unamortized debt issuance expense

$ 6,100,000

Unsecured Debt [Member] | 6.625% Senior Notes due 2019 | Debt Instrument, Redemption, Period Four [Member]

Redemption of principal amount (up to 35%)

35.00%

Redemption price, percentage

100.00%

Use of cash proceeds from Equity Offerings, redemption price, percentage

106.625%

Use of cash proceeds from Equity Offerings, minimum percentage of principal amount outstanding

65.00%

Days after Equity Offering consummation for redemption (not more than 120 days)

120 days

July 15, 2014 [Member] | Class A2 Variable Funding Note [Member]

July 15, 2014 [Member] | Class A1 Term Note [Member]

1.91%

July 15, 2014 [Member] | Class B Term Note [Member]

2.00%

July 15, 2014 [Member] | Class A3 Variable Funding Note [Member]

4.86%

August 15, 2014 [Member] | Class A2 Variable Funding Note [Member]

2.00%

August 15, 2014 [Member] | Class A1 Term Note [Member]

2.15%

August 15, 2014 [Member] | Class B Term Note [Member]

2.25%

August 15, 2014 [Member] | Class A3 Variable Funding Note [Member]

5.46%

September 15, 2014 [Member] | Class A2 Variable Funding Note [Member]

2.25%

September 15, 2014 [Member] | Class A1 Term Note [Member]

2.38%

September 15, 2014 [Member] | Class B Term Note [Member]

2.50%

September 15, 2014 [Member] | Class A3 Variable Funding Note [Member]

6.07%

Participation Agreement [Member]

2.50%

Securities Sold Under Agreement To Repurchase [Member]

Beneficial interest

100.00%

Servicing [Member] | Other Secured Borrowings [Member]

$ 22,400,000

Stated credit limit

Servicing [Member] | Senior Secured Term Loan 2 [Member] | Other Secured Borrowings [Member]

27,338,000

^[10]

1,300,000,000

Balloon payment to be paid

6,500,000

$ 3,300,000

Mandatory principal repayment of net cash proceeds from asset sale, period

270 days

Servicing [Member] | Repurchase Agreement [Member] | Other Secured Borrowings [Member]

^[11]

$ 27,338,000

50,000,000

Lending [Member] | Other Secured Borrowings [Member]

50,000,000

Lending [Member] | Participation Agreement [Member] | Other Secured Borrowings [Member]

163,924,000

Corporate Items and Other [Member] | Securities Sold Under Agreement To Repurchase [Member] | Other Secured Borrowings [Member]

^[12]

^[13]

$ 0

^[14]

$ 37,500,000

HLSS [Member] | Servicing [Member] | Senior Secured Term Loan 2 [Member] | Other Secured Borrowings [Member]

$ 37,500,000

Mandatory principal repayment of net cash proceeds from asset sale, period

180 days

Option A1 [Member] | Servicing [Member] | Senior Secured Term Loan 2 [Member] | Other Secured Borrowings [Member]

Option A2 [Member] | Servicing [Member] | Senior Secured Term Loan 2 [Member] | Other Secured Borrowings [Member]

the prime rate in effect on such day

the federal funds rate in effect on such day

Option A3 [Member] | Servicing [Member] | Senior Secured Term Loan 2 [Member] | Other Secured Borrowings [Member]

0.50%

the one-month Eurodollar rate (1-Month LIBOR)

2.75%

Option B [Member] | Servicing [Member] | Senior Secured Term Loan 2 [Member] | Other Secured Borrowings [Member]

2.25%

the one month Eurodollar rate

3.75%

Minimum [Member] | Unsecured Debt [Member] | 6.625% Senior Notes due 2019 | Debt Instrument, Redemption, Period Four [Member]

1.25%

Additional premium, percentage of principal amount

30 days

1.00%

Additional interest, percentage

0.25%

Minimum [Member] | Unsecured Debt [Member] | 6.625% Senior Notes due 2019 | Debt Instrument, Redemption, Period Five [Member]

Minimum [Member] | Participation Agreement [Member]

30 days

Minimum [Member] | Servicing [Member] | Repurchase Agreement [Member] | Other Secured Borrowings [Member] | London Interbank Offered Rate (LIBOR) [Member]

$ 50,000,000

Maximum [Member] | Unsecured Debt [Member] | 6.625% Senior Notes due 2019 | Debt Instrument, Redemption, Period Four [Member]

^[11]

2.00%

Additional interest, percentage

60 days

1.00%

Maximum [Member] | Unsecured Debt [Member] | 6.625% Senior Notes due 2019 | Debt Instrument, Redemption, Period Five [Member]

Maximum [Member] | Participation Agreement [Member]

60 days

Maximum [Member] | Servicing [Member] | Repurchase Agreement [Member] | Other Secured Borrowings [Member] | London Interbank Offered Rate (LIBOR) [Member]

$ 100,000,000

Subsequent Event [Member] | Advance Receivable Backed Notes Series E [Member]

^[11]

3.45%

Subsequent Event [Member] | Class A2 Variable Funding Note [Member]

$ 450,000,000

Subsequent Event [Member] | Class B Term Note [Member]

$ 564,000,000

Subsequent Event [Member] | Class A3 Variable Funding Note [Member]

36,000,000

Subsequent Event [Member] | Class A4 Variable Funding Note [Member]

600,000,000

Subsequent Event [Member] | October 1, 2014 [Member] | Class A2 Variable Funding Note [Member]

$ 600,000,000

Subsequent Event [Member] | October 1, 2014 [Member] | Class B Term Note [Member]

1.67%

Subsequent Event [Member] | October 1, 2014 [Member] | Class A3 Variable Funding Note [Member]

3.00%

Subsequent Event [Member] | October 1, 2014 [Member] | Class A4 Variable Funding Note [Member]

1.75%

Subsequent Event [Member] | July 15, 2015 [Member] | Class A2 Variable Funding Note [Member]

1.75%

Subsequent Event [Member] | July 15, 2015 [Member] | Class B Term Note [Member]

1.91%

Subsequent Event [Member] | July 15, 2015 [Member] | Class A3 Variable Funding Note [Member]

3.43%

Subsequent Event [Member] | July 15, 2015 [Member] | Class A4 Variable Funding Note [Member]

2.00%

Subsequent Event [Member] | August 15, 2015 [Member] | Class A2 Variable Funding Note [Member]

2.00%

Subsequent Event [Member] | August 15, 2015 [Member] | Class B Term Note [Member]

2.15%

Subsequent Event [Member] | August 15, 2015 [Member] | Class A3 Variable Funding Note [Member]

3.86%

Subsequent Event [Member] | August 15, 2015 [Member] | Class A4 Variable Funding Note [Member]

2.25%

Subsequent Event [Member] | September 15, 2015 [Member] | Class A2 Variable Funding Note [Member]

2.12%

Subsequent Event [Member] | September 15, 2015 [Member] | Class B Term Note [Member]

2.39%

Subsequent Event [Member] | September 15, 2015 [Member] | Class A3 Variable Funding Note [Member]

4.29%

Subsequent Event [Member] | September 15, 2015 [Member] | Class A4 Variable Funding Note [Member]

2.50%

Residential Mortgage [Member]

2.50%

Number of Line of Credit Facility | Facility

April 2014 [Member] | Lending [Member] | Master Repurchase Agreement [Member] | Other Secured Borrowings [Member]

$ 51,200,000

^[15]

17,199,000

150,000,000

April 2014 [Member] | Lending [Member] | Master Repurchase Agreement [Member] | Other Secured Borrowings [Member] | London Interbank Offered Rate (LIBOR) [Member]

$ 150,000,000

September 2014 - 2 [Member] | Lending [Member] | Master Repurchase Agreement [Member] | Other Secured Borrowings [Member]

1.75%

^[16]

$ 10,645,000

75,000,000

$ 75,000,000

^[16]

1.75%

November 2014 [Member] | Lending [Member] | Master Repurchase Agreement [Member] | Other Secured Borrowings [Member]

^[16]

2.75%

^[17]

$ 99,527,000

150,000,000

$ 300,000,000

1.75%

Scenario, Forecast [Member] | Subsequent Event [Member] | Advance Receivable Backed Notes Series E [Member]

2.00%

$ 400,000,000

[1]	Borrowing capacity is available to us provided that we have additional eligible collateral to pledge. Collateral may only be pledged to one facility. At September 30, 2014, only $51.2 million of the available borrowing capacity could be used based on the amount of eligible collateral that had been pledged.
[2]	On October 28, 2014, the maximum borrowing capacity under this facility was reduced to $450.0 million and will further decline to $400.0 million in February 2015.
[3]	1-Month LIBOR (1ML) was 0.16% and 0.17% at September 30, 2014 and December 31, 2013, respectively.
[4]	These notes were issued in connection with the OneWest MSR Transaction. On February 3, 2014, the maximum borrowing capacity on the 2013-VF2 notes was increased by $100.0 million to a total of $500.0 million. On March 17, 2014, the maximum borrowing capacity under the 2013-VF1 note declined by $500.0 million to a total of $1.0 billion. On October 1, 2014, the VF1 note was fully repaid. The maximum borrowing capacity of the VF2, Class A notes was increased to $564.0 million, and the maximum borrowing capacity of the VF2, Class B notes was increased to $36.0 million. In addition, the amortization date of the VF2 Class A and B notes was extended to October 15, 2015, and the maturity date was extended to October 15, 2045. Finally, a new series, the Series 2014-VF4 note, was issued with a maximum borrowing capacity of $600.0 million, an amortization date of October 15, 2015 and a maturity date of October 15, 2045. The interest margin on this new series of notes was set to 175 bps through July 14, 2015, to 200 bps on July 15, 2015, to 212 bps on August 15, 2015 and to 250 bps on September 15, 2015.
[5]	On July 15, 2014, the lenders agreed to waive the increase in interest margin scheduled for July 15, 2014. On August 15, 2014, the lenders also agreed to waive the increases in interest margin that were scheduled for August 15, 2014 and September 15, 2014.
[6]	The interest margin on these notes increased to 191 bps on July 15, 2014, to 215 bps on August 15, 2014 and 238 bps on September 15, 2014. Effective October 1, 2014, the interest margin on these notes was set to 167 bps through July 14, 2015, to 191 bps on July 15, 2015, to 215 bps on August 15, 2015 and to 239 bps on September 15, 2015.
[7]	The interest margin on these notes increased to 200 bps on July 15, 2014, to 225 bps on August 15, 2014 and 250 bps on September 15, 2014.
[8]	The interest margin on these notes increased to 486 bps on July 15, 2014, to 546 bps on August 15, 2014 and 607 bps on September 15, 2014. Effective October 1, 2014, the interest margin on these notes was set to 300 bps through July 14, 2015, to 343 bps on July 15, 2015, to 386 bps on August 15, 2015 and to 429 bps on September 15, 2015.
[9]	This note was issued on March 17, 2014 with a maximum borrowing capacity of $500.0 million. The interest margin on this note increased to 200 bps on July 15, 2014, to 225 bps on August 15, 2014 and 250 bps on September 15, 2014. On October 1, 2014, the maximum borrowing capacity of the note was increased to $600.0 million, the amortization date was extended to October 15, 2015 and the maturity date was extended to October 15, 2045. The interest margin was set to 175 bps through July 14, 2015, to 200 bps on July 15, 2015, to 225 bps on August 15, 2015 and to 250 bps on September 15, 2015.
[10]	This facility had an initial balance of $1.3 billion and was issued with an original issue discount of $6.5 million that we are amortizing over the term of the loan. We are required to repay the principal amount of the borrowings in consecutive quarterly installments of $3.3 million. In addition, we are generally required to use the net cash proceeds (as defined) from any asset sale (as defined) to repay loan principal, subject to a 270-day reinvestment provision (or, in the case of a sale of MSRs, related servicing advances or other related assets to HLSS, we have a 180-day reinvestment provision and the net cash proceeds must be invested in MSRs or related assets, such as advances). We are also required to make mandatory prepayments in certain circumstances based on our corporate leverage ratio (as defined) if we have positive consolidated excess cash flow (as defined) in any fiscal year. The borrowings are secured by a first priority security interest in substantially all of the assets of Ocwen. Borrowings bear interest, at the election of Ocwen, at a rate per annum equal to either (a) the base rate [the greatest of (i) the prime rate in effect on such day, (ii) the federal funds rate in effect on such day plus 0.50% and (iii) the one-month Eurodollar rate (1-Month LIBOR)], plus a margin of 2.75% and a base rate floor of 2.25% or (b) the one month Eurodollar rate, plus a margin of 3.75% with a one month Eurodollar floor of 1.25%. To date, we have elected option (b) to determine the interest rate.
[11]	Under this repurchase agreement, the lender provides financing on a committed basis for $50.0 million and, at the discretion of the lender, on an uncommitted basis for an additional $50.0 million.
[12]	Under this participation agreement, the lender provides financing on an uncommitted basis for $50.0 million to $100.0 million at the discretion of the lender. The participation agreement allows the lender to acquire a 100% beneficial interest in the underlying mortgage loans. The transaction does not qualify for sale accounting treatment and is accounted for as a secured borrowing. The lender earns the stated interest rate of the underlying mortgage loans while the loans are financed under the participation agreement.
[13]	Represents repurchase agreement for Class A-2 and A-3 notes issued by Ocwen Real Estate Asset Liquidating Trust 2007-1 which have a current face value of $22.4 million at September 30, 2014. This agreement has no stated credit limit and lending is determined for each transaction based on the acceptability of the securities presented as collateral.
[14]	On September 2, 2014, the maturity date of this facility was extended to October 2, 2014, and the maximum borrowing capacity was reduced to $37.5 million on a committed basis plus an additional $37.5 million on an uncommitted basis at the discretion of the lender. On October 1, 2014, the maturity date was extended to October 31, 2014. Effective October 31, 2014, the maturity date was further extended to November 14, 2014.
[15]	Under this repurchase agreement, the lender provides financing on a committed basis for $150.0 million and, at the discretion of the lender, on an uncommitted basis for an additional $150.0 million.
[16]	Under this repurchase agreement, the lender provides financing on a committed basis for $75.0 million and, at the discretion of the lender, on an uncommitted basis for an additional $75.0 million. On September 2, 2014, the maturity date of this facility was extended to October 2, 2014. On October 2, 2014, the maturity date was further extended to September 1, 2015.
[17]	Under this repurchase agreement, the lender provides financing on a committed basis for $150.0 million and, at the discretion of the lender, on an uncommitted basis for an additional $300.0 million. On October 24, 2014, this facility was repaid in full and terminated.

Other Liabilities - Schedule of Other Liabilities (Details) - USD ($)
$ in Thousands

Sep. 30, 2014

Dec. 31, 2013

Sep. 30, 2013

Feb. 15, 2013

Dec. 31, 2012

Payable to loan servicing and subservicing investors

$ 143,836

^[1]

$ 192,716

^[1]

$ 206,074

$ 38,140

Accrued expenses

^[2]

227,309

108,870

83,778

33,501

Due to related parties

^[3]

60,235

77,997

Liability for selected tax items

30,627

27,273

Checks held for escheat

19,880

24,392

Liability for certain foreclosure matters

^[4]

66,948

65,976

58,678

Total other liabilities

631,641

644,595

Additional purchase price due seller - ResCap Acquisition

$ 49,500

^[5]

$ 0

$ 54,220

[1]	See Note 22 – Commitments and Contingencies for additional information.
[2]	Accrued expenses at September 30, 2014 includes $100.0 million related to certain regulatory contingencies. See Note 22 – Commitments and Contingencies for additional information.
[3]	See Note 20 – Related Party Transactions for additional information.
[4]	This liability was settled in May 2014. See Note 22 – Commitments and Contingencies for additional information regarding the National Mortgage Settlement.
[5]	See Note 3 – Business Acquisitions for additional information.

Other Liabilities - Narrative (Details) $ in Millions	Sep. 30, 2014 USD ($)
Unfavorable Regulatory Action [Member]
Loss Contingencies [Line Items]
Regulatory contingencies	$ 100.0

Mezzanine Equity - Summary of Activity in Mezzanine Equity (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Temporary Equity [Line Items]
Conversion of Preferred Shares	$ (62,000)	$ (100,000)
Series A Preferred Stock [Member]
Temporary Equity [Line Items]
Beginning balance	60,361	153,372
Conversion of Preferred Shares	(62,000)	(100,000)
Accretion of beneficial conversion feature discount (Deemed dividend)	1,639	6,573
Ending balance	$ 0	$ 59,945

Mezzanine Equity - Narrative (Details) - USD ($) $ in Millions		9 Months Ended
	Jul. 14, 2014	Sep. 30, 2014	Sep. 30, 2013
Temporary Equity [Line Items]
Number of preferred shares to be converted (in shares)	62,000
Shares issued (in shares)	1,950,296
Accelerated write-off of unamortized discount		$ 0.8	$ 3.5

Equity - Schedule of Accumulated Other Comprehensive Loss (AOCL), Net of Income Taxes (Details) - USD ($) $ in Thousands	Sep. 30, 2014	Dec. 31, 2013
Equity [Abstract]
Unrealized losses on cash flow hedges	$ 8,663	$ 10,026
Other	121	125
Accumulated Other Comprehensive Income (Loss), Net of Tax	$ 8,784	$ 10,151

Accumulated change in equity from transactions and other events and circumstances from non-owner sources, net of tax effect, at period end. Excludes Net Income (Loss), and accumulated changes in equity from transactions resulting from investments by owners and distributions to owners. Includes foreign currency translation items, certain pension adjustments, unrealized gains and losses on certain investments in debt and equity securities, other than temporary impairment (OTTI) losses related to factors other than credit losses on available-for-sale and held-to-maturity debt securities that an entity does not intend to sell and it is not more likely than not that the entity will be required to sell before recovery of the amortized cost basis, as well as changes in the fair value of derivatives related to the effective portion of a designated cash flow hedge.

Fair value of derivative assets (liabilities) at:

Equity - Narrative (Details) - USD ($)			9 Months Ended		11 Months Ended
Equity - Narrative (Details) - USD ($)	Jul. 14, 2014	Oct. 31, 2013	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014
Equity [Abstract]
Repurchase of common stock	$ 72,300,000		$ 325,609,000	$ 157,880,000
Repurchase of common stock (in shares)	1,950,296		7,970,353		9,096,060
Number of preferred shares to be converted (in shares)	62,000
Stock repurchase program, authorized amount		$ 500,000,000
Stock redeemed or called during period, value			$ 253,400,000		$ 313,400,000

Derivative Financial Instruments and Hedging Activities - Schedule of Changes in Notional Balance of Holdings of Derivatives (Details) - USD ($)
$ in Thousands

9 Months Ended

Sep. 30, 2014

Dec. 31, 2013

Interest Rate Lock Commitments [Member]

^[1]

$ 6,169

$ 15,494

Derivative Notional Balance [Roll Forward]

Beginning notional balance

751,436

3,795,311

94,571

(3,298,265)

(876,254)

Ending notional balance

466,799

Fair value of derivative assets (liabilities) at:

Forward Mortgage Backed Securities Trades [Member]

$ 6,117

8,433

Maturity

Nov. 2014 - Jan. 2014

Derivative Notional Balance [Roll Forward]

Beginning notional balance

$ 950,648

6,951,828

(3,379,589)

(3,762,592)

Ending notional balance

760,295

Fair value of derivative assets (liabilities) at:

Interest Rate Cap [Member]

$ (1,089)

6,905

Maturity

Nov. 2014 - Dec. 2014

Derivative Notional Balance [Roll Forward]

Beginning notional balance

$ 1,868,000

100,000

(490,000)

Ending notional balance

1,478,000

Fair value of derivative assets (liabilities) at:

Hedge the effect of changes in interest rates on interest expense on borrowings

$ 91

$ 442

Maturity

Nov. 2016

[1]	See Note 15 – Derivative Financial Instruments and Hedging Activities for additional information.

Derivative Financial Instruments and Hedging Activities - Schedule of Changes in the Losses on Cash Flow Hedges Included in AOCL (Details) - USD ($)
$ in Thousands

9 Months Ended

Sep. 30, 2014

Dec. 31, 2013

^[1]

$ 5,119

Gain On Loans Held For Sale Net [Member] | IRLCs [Member]

$ (34,872)

Hedge the effect of changes in interest rates on interest expense on borrowings

Expiration Date

Nov. 2014 - Jan. 2014

^[1]

$ 6,117

Consolidated Statements of Operations Caption

$ (2,315)

Gain on loans held for sale, net

Gain On Loans Held For Sale Net [Member] | IRLCs [Member] | Not Designated as Hedging Instrument [Member]

Hedge the effect of changes in interest rates on interest expense on borrowings

Interest Rate Cap [Member]

$ 466,799

Hedge the effect of changes in interest rates on interest expense on borrowings

Interest Rate Cap [Member] | Other Net [Member]

$ 1,478,000

$ 1,868,000

Hedge the effect of changes in interest rates on interest expense on borrowings

Expiration Date

Nov. 2016

^[1]

$ 91

Consolidated Statements of Operations Caption

$ (374)

Other, net

Interest Rate Cap [Member] | Other Net [Member] | Not Designated as Hedging Instrument [Member]

Hedge the effect of changes in interest rates on interest expense on borrowings

Interest Rate Swap [Member] | Gain On Loans Held For Sale Net [Member] | Forward MBS Trades [Member]

$ 1,478,000

Hedge the effect of changes in interest rates on interest expense on borrowings

Expiration Date

Nov. 2014 - Dec. 2014

^[1]

$ (1,089)

Consolidated Statements of Operations Caption

$ (32,183)

Gain on loans held for sale, net

Interest Rate Swap [Member] | Gain On Loans Held For Sale Net [Member] | Forward MBS Trades [Member] | Not Designated as Hedging Instrument [Member]

Hedge the effect of changes in interest rates on interest expense on borrowings

$ 760,295

[1]	Derivatives are reported at fair value in Receivables, Other assets and Other liabilities on our unaudited Consolidated Balance Sheet.

Derivative Financial Instruments and Hedging Activities - Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance			$ 10,151
Other	$ 2	$ 31	5	$ 711
Ending balance	8,784		8,784
Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member]
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance			10,151	6,441
Additional net losses on cash flow hedges			0	12,363
Ineffectiveness of cash flow hedges reclassified to earnings			0	(657)
Losses on terminated hedging relationships amortized to earnings			(1,579)	(9,434)
Net increase (decrease) in accumulated losses on cash flow hedges			(1,579)	2,272
Decrease (increase) in deferred taxes on accumulated losses on cash flow hedges			217	(933)
(Decrease) increase in accumulated losses on cash flow hedges, net of taxes			(1,362)	1,339
Other			(5)	(711)
Ending balance	$ 8,784	$ 7,069	$ 8,784	$ 7,069

Derivative Financial Instruments and Hedging Activities - Schedule of Statements of Operations Related to Derivative Financial Instruments (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Losses on economic hedges	$ (6)	$ (103)	$ (374)	$ (3,822)
Ineffectiveness of cash flow hedges	0	0	0	(657)
Write-off of losses in AOCL for a discontinued hedge relationship	(408)	(7,780)	(1,580)	(9,434)
Loss on derivatives	$ (414)	$ (7,883)	$ (1,954)	$ (13,913)

Derivative Financial Instruments and Hedging Activities - Narrative (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Unrealized gain (loss) on derivatives arising during period, before tax	$ 9.2	$ 12.2
Other comprehensive income (loss), tax	0.5	$ 4.5
Projected amortization of unrealized losses from AOCL to earnings, coming twelve months	$ 1.6

Interest Expense - Schedule of Components of Interest Expense (Details) - USD ($)
$ in Thousands

3 Months Ended

9 Months Ended

Sep. 30, 2014

Sep. 30, 2013

Sep. 30, 2014

Sep. 30, 2013

Financing Liabilities [Member]

$ 133,049

$ 116,885

$ 409,129

$ 319,564

Other Secured Borrowings [Member]

^[1],[2]

88,246

81,192

281,930

185,116

Match Funded Liabilties [Member]

20,790

21,608

62,359

60,211

15,097

10,775

46,762

65,774

Unsecured Debt [Member]

6,141

9,466

Other [Member]

Net income (loss) attributable to Ocwen common stockholders

$ 2,775

$ 3,310

$ 8,612

$ 8,463

[1]

Includes interest expense related to financing liabilities recorded in connection with the HLSS Transactions as indicated in the table below. As discussed in Note 1A — Restatement of Previously Issued Consolidated Financial Statements, we are restating our previously reported consolidated operating results for the three and nine months ended September 30, 2013 to correct an error in the accounting applicable to the financing liabilities in connection with Rights to MSRs sold to HLSS. Three months Nine Months2014 2013 2014 2013Servicing fees collected on behalf of HLSS$177,113 $200,838 $553,423 $431,795Less: Subservicing fee retained by Ocwen83,550 102,040 266,514 214,587Net servicing fees remitted to HLSS93,563 98,798 286,909 217,208Less: Reduction in financing liability8,736 17,764 12,960 32,357Interest expense on HLSS financing liability$84,827$81,034 $273,949 $184,851

[2]

Interest expense that we expect to be paid on the HMBS-related borrowings is included with net fair value gains in Other revenues. See Note 2 – Securitizations and Variable Interest Entities for additional information.

Interest Expense - Schedule of Related Party Interest Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Schedule of Interest Expense [Line Items]
Servicing fees collected on behalf of HLSS	$ (465,964)	$ (483,267)	$ (1,448,096)	$ (1,333,392)
HLSS [Member]
Schedule of Interest Expense [Line Items]
Servicing fees collected on behalf of HLSS	177,113	200,838	553,423	431,795
Less: Subservicing fee retained by Ocwen	83,550	102,040	266,514	214,587
Net servicing fees remitted to HLSS	93,563	98,798	286,909	217,208
Less: Reduction in financing liability	8,736	17,764	12,960	32,357
Interest expense on HLSS financing liability	$ 84,827	$ 81,034	$ 273,949	$ 184,851

Income Taxes - Narrative (Details) - USD ($) $ in Millions	9 Months Ended
Income Taxes - Narrative (Details) - USD ($) $ in Millions	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013
Income Tax Disclosure [Abstract]
Effective income tax rate	31.80%	11.90%
Unrecognized tax benefits that would affect the effective tax rate if recognized	$ 35.1		$ 23.7
Accrued interest and penalties related to unrecognized tax benefits	$ 5.5		$ 3.6

Basic and Diluted Earnings (Loss) per Share - Schedule of Basic EPS to Diluted EPS (Details) - USD ($)

3 Months Ended

9 Months Ended

Sep. 30, 2014

Sep. 30, 2013

Sep. 30, 2014

Sep. 30, 2013

Basic EPS:

$ (76,189,000)

$ 54,725,000

$ 49,273,000

$ 164,120,000

Weighted average shares of common stock (in shares)

130,551,197

135,787,834

133,318,381

135,705,892

Basic EPS (in USD per share)

$ (0.58)

$ 0.40

$ 0.37

$ 1.21

Diluted EPS:

Net income (loss) attributable to Ocwen common stockholders

^[1]

$ (76,189,000)

$ 54,725,000

$ 49,273,000

$ 164,120,000

Preferred stock dividends

^[1],[2]

Adjusted net income (loss) attributable to Ocwen

^[1]

$ (76,189,000)

$ 54,725,000

$ 49,273,000

$ 164,120,000

Weighted average shares of common stock (in shares)

130,551,197

135,787,834

133,318,381

135,705,892

Dilutive weighted average shares of common stock (in shares)

^[1]

130,551,197

140,057,195

136,881,326

139,747,490

Diluted EPS (in USD per share)

$ (0.58)

$ 0.39

$ 0.36

$ 1.17

Stock options excluded from the computation of diluted EPS:

Anti-dilutive Securities (in shares)

^[3]

91,250

47,083

Market-based [Member]

Stock options excluded from the computation of diluted EPS:

Anti-dilutive Securities (in shares)

^[4]

295,000

547,500

295,000

547,500

Preferred shares [Member]

Dilutive Securities

^[1],[2]

$ 0

Stock options [Member]

Common stock awards [Member]

Dilutive Securities

^[1]

4,263,965

3,558,689

4,030,297

Dilutive Securities

^[1]

$ 0

$ 5,396

$ 4,256

$ 11,301

[1]	For the three months ended September 30, 2014, we have excluded the effect of the Preferred Shares, stock options and common stock awards from the computation of diluted EPS because of the anti-dilutive effect of our reported net loss.
[2]	The effect of our Preferred Shares on diluted EPS is computed using the if-converted method. For purposes of computing diluted EPS, we assume the conversion of the Preferred Shares into shares of common stock unless the effect is anti-dilutive. Conversion of the Preferred Shares has not been assumed for the nine months ended September 30, 2014 and the three and nine months ended September 30, 2013 because the effect would have been antidilutive.
[3]	These options were anti-dilutive because their exercise price was greater than the average market price of our stock.
[4]	Shares that are issuable upon the achievement of certain performance criteria related to Ocwen’s stock price and an annualized rate of return to investors.

Business Segment Reporting - Schedule of Segment Reporting Information (Details) - USD ($)
$ in Thousands

3 Months Ended

9 Months Ended

Sep. 30, 2014

Sep. 30, 2013

Sep. 30, 2014

Sep. 30, 2013

Dec. 31, 2013

$ 455,039

$ 346,260

$ 1,149,696

$ 960,418

(133,049)

(116,885)

(409,129)

(319,564)

(72,266)

69,445

76,614

198,895

8,355,640

$ 7,927,003

Servicing [Member]

485,303

496,302

1,526,606

1,381,872

^[1]

313,964

305,654

919,998

795,645

171,339

190,648

606,608

586,227

903

859

1,805

1,382

(124,106)

(113,678)

^[2]

(391,122)

(309,606)

^[2]

(3,618)

(6,631)

(4,622)

(30,961)

(126,821)

(119,450)

(393,939)

(339,185)

44,518

71,198

212,669

247,042

6,059,359

4,086,378

6,059,359

4,086,378

6,295,976

Lending [Member]

26,877

33,539

86,811

81,180

^[1]

22,632

29,504

81,261

69,543

4,245

4,035

5,550

11,637

4,825

3,066

13,117

12,432

(2,601)

(3,279)

^[2]

(8,271)

(10,108)

^[2]

139

1,843

3,846

6,852

2,363

1,630

8,692

9,176

6,608

5,665

14,242

20,813

Corporate Items and Other [Member]

1,706,964

704,641

1,706,964

704,641

1,195,812

1,557

1,801

4,734

19,758

^[1]

118,482

11,143

148,555

95,361

(116,925)

(9,342)

(143,821)

(75,603)

865

1,454

2,550

3,516

(6,342)

^[2]

(9,736)

150

^[2]

(990)

398

710

2,977

(6,467)

1,924

(6,476)

6,643

(123,392)

(7,418)

(150,297)

(68,960)

Corporate Eliminations [Member]

589,317

609,236

589,317

609,236

435,215

(39)

(402)

(118)

(492)

^[1]

(39)

(41)

(118)

(131)

(361)

^[2]

361

361

Business Segments Consolidated [Member]

513,698

531,240

1,618,033

1,482,318

^[1]

455,039

346,260

1,149,696

960,418

58,659

184,980

468,337

521,900

6,593

5,379

17,472

17,330

(133,049)

(116,885)

^[2]

(409,129)

(319,564)

^[2]

(4,469)

(4,029)

(66)

(20,771)

(130,925)

(115,535)

(391,723)

(323,005)

(72,266)

69,445

76,614

198,895

Indemnification Obligations Liability [Roll Forward]

$ 8,355,640

$ 5,400,255

$ 8,355,640

$ 5,400,255

$ 7,927,003

[1]

Depreciation and amortization expense are as follows: Servicing Lending Corporate Items and Other Business Segments ConsolidatedFor the three months ended September 30, 2014 Depreciation expense$2,636 $98 $3,022 $5,756Amortization of mortgage servicing rights60,689 94 — 60,783Amortization of debt discount331 — 344 675Amortization of debt issuance costs 1,114 — — 1,114 For the three months ended September 30, 2013 Depreciation expense$3,589 $135 $2,973 $6,697Amortization of mortgage servicing rights79,035 148 — 79,183Amortization of debt discount330 — — 330Amortization of debt issuance costs 1,178 — — 1,178 For the nine months ended September 30, 2014 Depreciation expense$8,099 $235 $8,267 $16,601Amortization of mortgage servicing rights185,263 613 199 186,075Amortization of debt discount991 — 513 1,504Amortization of debt issuance costs 3,241 — — 3,241 For the nine months ended September 30, 2013 Depreciation expense$9,968 $209 $6,976 $17,153Amortization of mortgage servicing rights197,287 148 — 197,435Amortization of debt discount1,082 — — 1,082Amortization of debt issuance costs 3,264 — — 3,264

[2]

Business Segment Reporting - Schedule of Depreciation and Amortization by Segment (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Segment Reporting Information [Line Items]
Amortization of mortgage servicing rights	$ 60,783	$ 79,183	$ 186,075	$ 197,435
Servicing [Member]
Segment Reporting Information [Line Items]
Depreciation expense	2,636	3,589	8,099	9,968
Amortization of mortgage servicing rights	60,689	79,035	185,263	197,287
Amortization of debt discount	331	330	991	1,082
Amortization of debt issuance costs	1,114	1,178	3,241	3,264
Lending [Member]
Segment Reporting Information [Line Items]
Depreciation expense	98	135	235	209
Amortization of mortgage servicing rights	94	148	613	148
Amortization of debt discount	0	0	0	0
Amortization of debt issuance costs	0	0	0	0
Corporate Items and Other [Member]
Segment Reporting Information [Line Items]
Depreciation expense	3,022	2,973	8,267	6,976
Amortization of mortgage servicing rights	0	0	199	0
Amortization of debt discount	344	0	513	0
Amortization of debt issuance costs	0	0	0	0
Business Segments Consolidated [Member]
Segment Reporting Information [Line Items]
Depreciation expense	5,756	6,697	16,601	17,153
Amortization of mortgage servicing rights	60,783	79,183	186,075	197,435
Amortization of debt discount	675	330	1,504	1,082
Amortization of debt issuance costs	$ 1,114	$ 1,178	$ 3,241	$ 3,264

Related Party Transactions - Schedule of Revenue and Expenses Related to Various Service Agreements (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Altisource [Member]
Revenues and Expenses:
Revenues	$ 10,716	$ 5,185	$ 30,007	$ 15,390
Expenses	27,099	13,153	70,577	36,650
HLSS [Member]
Revenues and Expenses:
Revenues	84	20	458	172
Expenses	345	386	1,590	1,615
AAMC [Member]
Revenues and Expenses:
Revenues	251	0	952	0
Residential [Member]
Revenues and Expenses:
Revenues	$ 4,618	$ 493	$ 12,141	$ 606

Related Party Transactions - Schedule of Amounts Receivable or Payable (Details) - USD ($) $ in Thousands	Sep. 30, 2014	Dec. 31, 2013
Net Receivable (Payable)
Net Receivable (Payable)	$ (30,160)	$ (62,355)
Altisource [Member]
Net Receivable (Payable)
Net Receivable (Payable)	(12,626)	(3,843)
HLSS [Member]
Net Receivable (Payable)
Net Receivable (Payable)	(17,812)	(59,505)
AAMC [Member]
Net Receivable (Payable)
Net Receivable (Payable)	278	943
Residential [Member]
Net Receivable (Payable)
Net Receivable (Payable)	$ 0	$ 50

Related Party Transactions - Narrative (Details) - USD ($)				3 Months Ended	9 Months Ended
	May 02, 2014	Apr. 22, 2014	Mar. 04, 2014	Jun. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Jul. 31, 2014	Jun. 26, 2014	Dec. 31, 2013
Related Party Transaction [Line Items]
Recognized compensation expense				$ 5,400,000
HLSS [Member]
Related Party Transaction [Line Items]
Unpaid principal balance of loans related to servicing assets sold					$ 109,800,000,000
Fair value of servicing assets sold					388,500,000
Sale of match funded advances					$ 3,500,000,000
Proceeds from sale of loans held-for-sale			$ 612,300,000
HLSS SEZ LP [Member]
Related Party Transaction [Line Items]
Proceeds from sale of loans held-for-sale	$ 20,200,000
Executive Chairman of the Board of Directors Chairman [Member]
Related Party Transaction [Line Items]
Share-based compensation arrangement by share-based payment award, options, outstanding, number (in shares)						3,620,498
Share-based compensation arrangement by share-based payment award, options, exercisable, number (in shares)						3,220,498
Options surrendered (in shares)		1,000,000
Executive Chairman of the Board of Directors Chairman [Member] \| Ocwen [Member]
Related Party Transaction [Line Items]
Ownership percentage by related party						14.00%
Executive Chairman of the Board of Directors Chairman [Member] \| Altisource [Member]
Related Party Transaction [Line Items]
Ownership percentage by related party						29.00%
Share-based compensation arrangement by share-based payment award, options, outstanding, number (in shares)						873,501
Executive Chairman of the Board of Directors Chairman [Member] \| HLSS [Member]
Related Party Transaction [Line Items]
Ownership percentage by related party						1.00%
Executive Chairman of the Board of Directors Chairman [Member] \| Altisource Asset Management Corporation [Member]
Related Party Transaction [Line Items]
Ownership percentage by related party						28.00%
Share-based compensation arrangement by share-based payment award, options, outstanding, number (in shares)						87,350
Executive Chairman of the Board of Directors Chairman [Member] \| Altisource Residential Lp [Member]
Related Party Transaction [Line Items]
Ownership percentage by related party						4.00%
Mortgage Servicing Rights [Member] \| HLSS Mortgage LP [Member]
Related Party Transaction [Line Items]
Unpaid principal balance assets acquired							$ 92,900,000	$ 396,900,000
Homeward Acquisition [Member]
Related Party Transaction [Line Items]
Indemnification recovery						$ 28,300,000			$ 13,600,000
Homeward Acquisition [Member] \| Maximum [Member]
Related Party Transaction [Line Items]
Indemnification recovery						$ 75,000,000

Regulatory Requirements - Narrative (Details) $ in Millions	Sep. 30, 2014 USD ($)
Brokers and Dealers [Abstract]
Capital requirement, unpaid principal balance	$ 753.1

Commitments and Contingencies - Schedule of Indemnification Obligations (Details) - USD ($)
$ in Thousands

9 Months Ended

Sep. 30, 2014

Sep. 30, 2013

Provision for representation and warranty obligations

$ 192,716

^[1]

$ 38,140

5,076

18,116

New production reserves

820

1,055

Obligations assumed in connection with MSR and servicing business acquisitions

189,742

Charge-offs and other

^[2]

(54,776)

(40,979)