Transcription
Business UpdateFirst Quarter 2022May 5, 2022 2022 Ocwen Financial Corporation. All rights reserved.
FORWARD-LOOKING STATEMENTSThis presentation contains forward-looking statements withinthe meaning of Section 27A of the Securities Act of 1933, asamended, and Section 21E of the Securities Exchange Act of1934, as amended. These forward-looking statements may beidentified by a reference to a future period or by the use offorward-looking terminology. Forward-looking statements aretypically identified by words such as “expect”, “believe”,“foresee”, “anticipate”, “intend”, “estimate”, “goal”, “strategy”,“plan” “target” and “project” or conditional verbs such as “will”,“may”, “should”, “could” or “would” or the negative of theseterms, although not all forward-looking statements containthese words, and includes statements in this press releaseregarding the ability of our recent strategic transactions toimprove our earnings. Forward-looking statements by theirnature address matters that are, to different degrees,uncertain. Our business has been undergoing substantialchange and we are experiencing significant changes within themortgage lending and servicing ecosystem which hasmagnified such uncertainties. Readers should bear thesefactors in mind when considering such statements and shouldnot place undue reliance on such statements.Forward-looking statements involve a number of assumptions,risks and uncertainties that could cause actual results to differmaterially. In the past, actual results have differed from thosesuggested by forward looking statements and this may happenagain. Important factors that could cause actual results to differmaterially from those suggested by the forward-lookingstatements include, but are not limited to, uncertainty relatingto the continuing impacts of the COVID-19 pandemic, includingthe response of the U.S. government, state governments, theFederal National Mortgage Association (Fannie Mae) andFederal Home Loan Mortgage Corporation (Freddie Mac)(together, the GSEs), the Government National MortgageAssociation (Ginnie Mae) and regulators, as well as theimpacts on borrowers and the economy generally; the potentialfor ongoing disruption in the financial markets and incommercial activity generally as a result of international events,changes in monetary and fiscal policy, and other sources ofinstability; the extent to which our MSR asset vehicle (MAV),other transactions and our enterprise sales initiatives willgenerate additional subservicing volume, increase marketshare within the subservicing market, and result in increasedprofitability; the timing and amount of presently anticipatedforward and reverse loan boarding; whether we will increasethe total investment commitments in MAV, and if so, when andon what terms; our ability to close acquisitions of MSRs andother transactions, including the ability to obtain regulatoryapprovals; our ability to repurchase shares of our commonstock and/or bonds, and if so, in what quantities and when; ourability to continue to grow our reverse servicing business;Ocwen Financial Corporation our ability to retain clients and employees of acquiredbusinesses, and the extent to which acquisitions and our otherstrategic initiatives will contribute to achieving our growthobjectives; the extent to which we will be able to execute callrights transactions, and whether such transactions willgenerate the returns anticipated; the adequacy of our financialresources, including our sources of liquidity and ability to sell,fund and recover servicing advances, forward and reversewhole loans, and HECM and forward loan buyouts and putbacks, as well as repay, renew and extend borrowings, borrowadditional amounts as and when required, meet our MSR orother asset investment objectives and comply with our debtagreements, including the financial and other covenantscontained in them; increased servicing costs based onincreased borrower delinquency levels or other factors; thefuture of our long-term relationship with New ResidentialInvestment Corp.; our ability to improve our financialperformance through cost and productivity improvements; theperformance of our lending business in a competitive marketand uncertain interest rate environment; our ability to executeon identified business development and sales opportunities;uncertainty related to past, present or future claims, litigation,cease and desist orders and investigations regarding ourservicing, foreclosure, modification, origination and otherpractices brought by government agencies and private parties,including state regulators, the Consumer Financial ProtectionBureau (CFPB), State Attorneys General, the Securities andExchange Commission (SEC), the Department of Justice or theDepartment of Housing and Urban Development (HUD);adverse effects on our business as a result of regulatoryinvestigations, litigation, cease and desist orders or settlementsand the reactions of key counterparties, including lenders, theGSEs and Ginnie Mae; our ability to comply with the terms ofour settlements with regulatory agencies and the costs of doingso; increased regulatory scrutiny and media attention; anyadverse developments in existing legal proceedings or theinitiation of new legal proceedings; our ability to effectivelymanage our regulatory and contractual compliance obligations;our ability to interpret correctly and comply with liquidity, networth and other financial and other requirements of regulators,the GSEs and Ginnie Mae, as well as those set forth in ourdebt and other agreements; our ability to comply with ourservicing agreements, including our ability to comply with therequirements of the GSEs and Ginnie Mae and maintain ourseller/servicer and other statuses with them; our ability to fundfuture draws on existing loans in our reverse mortgageportfolio; our servicer and credit ratings as well as other actionsfrom various rating agencies, including any future downgrades;as well as other risks and uncertainties detailed in our reportsand filings with the SEC, including our annual report on Form10-K for the year ended December 31, 2021 and any currentreport or quarterly report filed with the SEC since such date.Anyone wishing to understand Ocwen’s business should reviewour SEC filings. Our forward-looking statements speak only asof the date they are made and, we disclaim any obligation toupdate or revise forward-looking statements whether as a resultof new information, future events or otherwise.NON-GAAP FINANCIAL MEASURESThis presentation contains references to non-GAAP financialmeasures, such as our references to adjusted pre-tax income(loss) and adjusted expenses.We believe these non-GAAP financial measures provide auseful supplement to discussions and analysis of our financialcondition. In addition, management believes that thesepresentations may assist investors with understanding andevaluating our initiatives to drive improved financialperformance. However, these measures should not be analyzedin isolation or as a substitute to analysis of our GAAP expensesand pre-tax income (loss). There are certain limitations to theanalytical usefulness of the adjustments we make to GAAPexpenses and pre-tax income (loss) and, accordingly, we usethese adjustments only for purposes of supplemental analysis.Non-GAAP financial measures should be viewed in addition to,and not as an alternative for, Ocwen’s reported results underaccounting principles generally accepted in the United States.Other companies may use non-GAAP financial measures withthe same or similar titles that are calculated differently to ournon-GAAP financial measures. As a result, comparability maybe limited. Readers are cautioned not to place undue relianceon analysis of the adjustments we make to GAAP expensesand pre-tax income (loss).Beginning with the three months ended June 30, 2020, werefined our definitions of Expense Notables, which wepreviously referred to as “Expenses Excluding MSR ValuationAdjustments, net, and Expense Notables,” and IncomeStatement Notables in order to be more descriptive of the typesof items included.2
Ocwen is a mortgage originator and servicer focused on creating positiveoutcomes for clients, homeowners, investors and communitiesBalanced and Diversified Business ModelCompetitive AdvantagesDiversified originations sources tobalance earnings and drive servicingportfolio growthFour pillar servicing portfoliooptimizes risks and returns leveragingproven special servicing capabilitiesMulti-ChannelCorrespondent, Co-issue, Flow,Wholesale, Bulk, Consumer Direct(a)Owned Servicing and Subservicing,Performing and SpecialMulti-ProductFannie, Freddie, Ginnie, Reverse, PrivateInvestor, Small Balance CommercialStrong operational and cost performanceversus Moody’s and MBA benchmarks Balanced business model builtfor current market environment Industry leading servicingoperations and cost performance Proprietary global operatingplatform Technology enabled, controlledand scalable platformStrategyPrudent growth by expanding client base, products, services andaddressable marketsSuperior value proposition to clients, investors and consumers throughbest-in-class operating performanceService experience that delivers on our commitmentsFoundation for SuccessSpeed andDecisivenessOcwen Financial Corporation Engaged,High-QualityTalentStrongComplianceCulture Only end-to-end reversemortgage provider Deep community outreach andtrack record of helping distressedcustomersEnhance competitiveness through scale and low costDeliver onCustomerExpectations Extensive experience in specialservicingCommitmenttoTechnology Strategic alliances withfinancial/capital partners3
Executive Summary Balanced and diversified business; industry-leading servicing performance1Well positioned for thecurrent market environment2First quarter resultsconsistent with expectations3Servicing financialperformance improving withrising interest rates Growing subservicing and end-to-end reverse mortgage businesses Special servicing expertise to support borrowers and investors GAAP Net Income 58M; GAAP ROE 46%; BVPS of 584Taking actions to restoreprofitability in forwardoriginations5Reverse origination andservicing delivering strongfinancial performanceOcwen Financial Corporation Favorable MSR fair value adjustment offset forward origination pre-tax loss Liquidity up from YE 2021 with total cash of 269M; total liquidity of 314M Forward servicing operating income up 200% vs. 4Q; runoff declining 275B UPB; total servicing additions of 20B, up 46% YoY Robust subservicing pipeline; NRZ agreement extended Originations down 13% YoY; margin compression in forward originations Expense reductions underway; targeting 30M annualized Growing client base, higher margin products and services; recapture improving Reverse originations up 108% YoY; margins holding vs. 4Q Market opportunity continues to be strong Subservicing loan boardings and financial performance ahead of expectations4
Well positioned for the current market environmentBalanced and diversified businessmodel that is working as designedIndustry leading operationalexecution driving subservicinggrowthTop 5 reverse originator withgrowing market share and end-toend capabilitiesForward Servicing PTIRecognized Servicing ExcellenceReverse Origination Market Share(a) FNMA STAR, Freddie Mac SHARPand HUD Tier I Servicer status96 Industry-leading performance vs.Moody’s and MBA benchmarks6.1%7.6% Proven leadership in specialservicing to support borrowers andinvestors18( M)Q1'21Q1'22Forward Origination PTIQ1'21Q1'22Reverse Servicing UPBEarned Trust From Clients 64B subservicing adds last 12 mos. 28B scheduled adds in next 6 mos.26 280B forward prospect pipeline( M)(13)Q1'21Q1'2229 NRZ subservicing renewed In advanced discussions topotentially double MAV capacity7( B)Q1'21Q1'22We do not believe our recent share price is reflective of our financial position, our earning power,or the strength of our businessOcwen Financial Corporation 5
Servicing financial performance improving with rising interest ratesBusiness UpdateServicing Profitability DriversIncreasing MSR Value MSR investments deliveringsignificant value appreciationGrowing Portfolio 25 bps rate increase expected toresult in an additional 2.7 EPS(a) Servicing income x-MSR gainsimproving YoY despite lower EBOgains / Q1’21 losses on HFS loans Executing growth agenda withbalanced servicing / subservicingmix - strong opportunity pipeline Scale, automation and processenhancements continue to drivecost savings and productivity Expect reduced prepayments,increased escrow / float income asrates rise - offsets higher interestcost on floating rate debt Executing severely aged GNMAloan sale to de-risk balance sheetand improve future earningsOcwen Financial Corporation 2755617936( B)( M)Q1'22Apr'22 EQ1'21Q1'22Includes Forward and Reverse UPBImproving Cost(b) StructureDecreasing Runoff’22 EOYTarget 7 bps11.225%15%7.4(bps)Q1'21Q1'22Q1'21Q1'226
Taking the necessary actions to restore profitability in forward originationsBusiness Update Pre-tax loss driven by lowermargins and lock volumes andhedging ineffectivenessForward Originations Profitability DriversGrowing Client BaseMar’22Actual 41% Restricted CL volume and initialcap levels due to wide range ofMSR values as interest rates rose MSR values have narrowed, gainon sale margins improved, April CLlocks up 87% from March Growing client base and highermargin GNMA, best efforts andnon-delegated Recapture rate continues toimprove; cash-out 70% of volumein Q1 Driving expense reduction andright-sizing actions Targeting 75B total forwardservicing additions for 2022Ocwen Financial Corporation Improving Refinance s Flow and Correspondent # of sellersShifting to Higher Margin CLProducts and ServicesReducing Cost and Right SizingOperations 273Min Apr’22OriginationVolume ( M)bps ofUPB2597741124Q1'21Q1'22Includes GNMA, Best Efforts, Non-DelegatedQ1'22Q4'22 EOperating and direct overhead cost7
Unique end-to-end reverse mortgage capability delivering strong financialperformanceBusiness Update Originations generating steadyadjusted pre-tax income Favorable demographics andhome price appreciation expectedto drive continued market growthReverse Originations and Servicing Profitability DriversOpportunities in ReverseMortgage 405B (4%)Increase in SeniorHousing Equity inQ4 ’21(b)Higher Margin Reverse OriginationsContinues Growth MomentumOriginationVolume ( M)547 Growing market share in a growingmarket; volume growth offsettingmargin reduction 10.6TSenior HousingWealth reportedas of Q4 ‘21(b)263Q1'21 Margins generally stable since3Q’21, mix by channel influencingaverage marginsOriginations Market ShareGrowing(c)Q1'22Servicing and Subservicing UPBGrowing Reverse subservicing prospectpipeline(a) of 55B RMS acquisition expected todeliver profitability by Q4 Targeting 25B total reverseservicing additions for 2022Ocwen Financial Corporation 6.1%7.6%297( B)Q1'21Q1'22Q1'21Q1'228
Earnings driven by MSR fair value adjustments offsetting origination marketheadwinds and reverse servicing platform build-outFirst Quarter Operating as Expected M, except per share metricsAdjusted Pre-Tax Income(a) Q1 Walk YoYQ1'22Q1'21( M)7Adjusted Pre-tax Income (Loss)(a)( 11) 7Notables - MSR FV Adj, Net(b)5621Notables - Other(a)16(16)Income Tax Benefit (Expense)(3)(3)30(8)(11)(40)Net Income (Loss)After-tax ROE before notables(c)GAAP ROEAvailable Liquidity(d)Earnings ex-Notables per ShareEarnings per ShareBook Value per Share 58 9-8%4%46%8% 314 276( 1.01) 0.45 6.30 0.98 58 51Q1’21Adj PTIOriginationServicingServicingGoS & OtherQ1’22Adj PTIPrudent Growth, Maintaining Cost Leadership2042052921Q1 ‘21Q1 ‘22Revenue(e) ( M)Q1 ‘21Q1 ‘22OpEx(a) (annualized bps)Results align with expectations notwithstanding rapid rise in interest ratesOcwen Financial Corporation 9
Forward Originations profitability impacted by reduced industry volume andmargins taking actions to address market realityAdjusted PTI ( M)(a)Revenue Margins (bps)(b)800 27150(13)112659bps700130Consumer Direct600110Correspondent5009040070Cash Window and Flow14300(6)(7)Q1 '21Q1 '22 9.2B UPB50236bps27bps2003012bps100100-10Q1 '21Q2 '21Q3 '21Q4 '21Q1 '22 7.4B UPBForward Origination Volume Reducing costs and right-sizing operations from 77 bps in cost as %UPB in Q1 to 41bps by Q4 ‘22 Continue to improve recapture rates; up 10 pts from Q4 ‘21 to March of this year Shifting to higher margin Correspondent products and deliveries to offset margin decline; originated volume up2X YoY to 259M Prudent investment strategy in Correspondent – intentionally compressed volume as MSR values increased tounprecedented levels UPB declines in Consumer Direct due to rapid increase in interest rates as well as Cash Window and Flowvolume transferred to MAV in Q1 ’22Ocwen Financial Corporation 10
Reverse Originations profitability steady despite rising interest ratesAdjusted PTI ( M)(a)Revenue Margins (bps)(b)1454bps1092bps 10 10835bpsQ1 '21Q1 '22 0.3B UPB 0.5B UPBReverse Origination Volume441bps406bps173bpsQ1 '21Q2 '21Consumer DirectQ3 '21Q4 '21CorrespondentQ1 '22Wholesale Reverse originations profitability maintaining in current market environment Market opportunity continues to be strong with continued home price appreciation and expanding borrower base UPB increased 284M or 108% YoY with margins holding vs. 2H ’21 Higher margin Consumer Direct volume (UPB) up 148% YoY TPO combined volume (UPB) up 96% YoYOcwen Financial Corporation 11
Servicing improving profitability by building scale, delivering cost improvementand integrating Reverse Subservicing platform ahead of plan.Adjusted PTI YoY grew from scalingthe portfolio UPB and cost leadershipAdjustedPTI ( M) (a)GoS ( M)Included in Adj PTIReverse subservicing achievedprofitability in Q1AdjustedPTI ( M) (a)16590.42(7)(2)Q1'21Q1'22 179B UPB 275B UPBQ1'21Q1'22Q4 '21Q1'22Q4'22 Est. Adjusted PTI up 23M YoY driven by UPB up 54%,cost(b) down 4 bps On track to achieve adjusted PTI guidance of 5M by Q4 ‘22 Lower prepayments YoY Operational efficiency drove ability to accelerateboarding by 3B (UPB) Lower GoS due to rapid interest rate increasesimpacting volume and pipeline valueOcwen Financial Corporation Achieved Q1 planned operating expensereduction and offshore cost optimization12
Clear and actionable roadmap using proven cost managementcapabilities designed to deliver targeted returns before notable itemsPath to achieve targeted returns by Q4 ‘22( M)5-6 1510-11(11)9-10Q1’22Adj PTI(a)Productivity &Right-sizing Actions Right-sizing originationsreducing cost as % ofUPB from 77bps in Q1to 41 bps Q4 Includes Corporate andOriginationsHigher Margin Products& Services Mix Best Efforts,Non-Delegated,Reverse, GNMASubservicing Growth &Reduced RunoffProjected Q4’22Adj PTI(a)(b) 28B in scheduledsubservicing boarding innext 6 months 330B in totalsubservicing pipeline Total CPR 14.8% to 13.8%1st half earningsdrivenby MSRfair valueadjustmentsoriginationmarketheadwinds and reverse1st halfearningsdrivenby MSRfair vicingplatformbuild-outmarket headwinds and reverse servicing platform build-outTargeting9% – 15% after-taxROE beforenotable itemsin 2ndROEhalf withexecutionbusinessinitiatives (b) Targetinglow double-digitto mid-teenafter-taxbeforenotableofitemsin 2nd(b)half with allexecutionof businessinitiativesEvaluatingcapital allocationoptions,includingto support debt and share repurchasesOcwen Financial Corporation 13
Wrap-UpBelieve we are well positionedwith balanced and diversifiedbusiness model for the currentmarket environmentShifting product mix and reducingcost structure to restore profitabilityin forward originations; CL marginsand lock volume improvingFirst quarter financialperformance consistent withexpectationsReverse origination and servicingdelivering strong financialperformance; continued growthopportunityServicing performance improvingwith increasing interest rates;strong value proposition and robustsubservicing opportunity pipelineEvaluating all capital allocationoptions, including to support debtand share repurchasesWith rising interest rates expect further MSR valuation gainsTargeting 9% – 15% after tax ROE before notable items in second half(a)Ocwen Financial Corporation 14
Appendix Notes Regarding Non-GAAP Financial Measures Expense Notables Income Statement Notables Expense Notables by Segment Income Statement Notables by Segment GAAP ROE and After-tax ROE Before Notable Items MSR Valuation Assumptions Roadmap Metrics End NotesOcwen Financial Corporation 15
Note Regarding Non-GAAP Financial MeasuresIn the following slides, we present supplemental information (including reconciliations) relating to certain illustrative adjustments to GAAP expenses, and pre-taxincome (loss). We believe this information is instructive as an alternative way to view certain aspects of our business. In addition, management believes that thesepresentations may assist investors with understanding and evaluating our continuous cost and productivity improvement efforts and other initiatives to driveimproved financial performance. However, the adjustments we make to GAAP expenses and pre-tax income (loss) should not be analyzed in isolation or as asubstitute to analysis of our GAAP expenses and pre-tax income (loss). There are certain limitations on the analytical usefulness of the adjustments we make toGAAP expenses and pre-tax income (loss) and, accordingly, we rely primarily on our GAAP results and use these adjustments only for purposes of supplementalanalysis. Readers are cautioned not to place undue reliance on analysis of the adjustments we make to GAAP expenses and pre-tax income (loss), including ourpresentation of adjusted pre-tax return on equity.Beginning with the three months ended June 30, 2020, we refined our definitions of Expense Notables, which we previously referred to as “Expenses ExcludingMSR Valuation Adjustments, net, and Expense Notables,” and Income Statement Notables in order to be more descriptive of the types of items included.The slide titled “Expense Notables” adjusts GAAP operating expenses for the following factors: expenses related to severance, retention and other actionsassociated with continuous cost and productivity improvement efforts; significant legal and regulatory settlement expense items(a); and certain other significantactivities including, but not limited to, insurance related expense and settlement recoveries, compensation or incentive compensation expense reversals and nonroutine transactions consistent with the intent of providing management and investors with a supplemental means of evaluating our expenses.On the slide titled “Income Statement Notables”, we show certain adjustments to GAAP pre-tax loss for the following factors: Expense Notables; changes in fairvalue of our Agency and Non-Agency MSRs due to changes in interest rates, valuation inputs and other assumptions, net of hedge positions; changes in fair valueof our MSRs in our NRZ and MAV financing liability due to changes in interest rates, valuation inputs and other assumptions; changes in fair value of our reverseoriginations portfolio due to changes in interest rates, valuation inputs and other assumptions and certain other non-routine transactions, including but not limited topension benefit cost adjustments and opportunistic gains related to exercising servicer call rights on second lien portfolio subsequently sold and fair valueassumption changes on other investments (collectively, Other).On the slide titled “GAAP ROE & Adjusted Pre-tax ROE”, we present our calculation of return on equity (ROE) based on GAAP net income, as well as an ROEcalculation based on adjusted pre-tax income (loss) as calculated in the preceding slides, with an additional adjustment for the income tax impact attributable to thenotable items excluded from adjusted pre-tax income (loss).(a) Including however not limited to CFPB, Florida Attorney General/Florida Office of Financial Regulations and Massachusetts Attorney General litigation related legalexpenses, state regulatory action related legal expenses and state regulatory action settlement related escrow analysis costs (collectively, CFPB and state regulatorydefense and escrow analysis expenses)Ocwen Financial Corporation 16
Expense Notables(a)(b)Certain previously presented notable categories with nil numbers for each quarter shown have been omitted.Includes non-routine costs associated with strategic transactions including stock price changes impacting compensation expense, transaction costs related to thereverse platform acquisition from Reverse Mortgage Solutions, Inc.Ocwen Financial Corporation 17
Income Statement NotablesIncome Overview MillionsIReported Pre-Tax Income / (Loss)Adjustments for Notables(a)Expense Notables (from prior slide)Non-Agency MSR FV Change(b)Agency MSR FV Change, net of macro hedge(b)NRZ/MAV MSR Liability FV Change (Interest Expense)Reverse FV ChangeCorporate Debt RefinanceOther(c)II Total Income Statement NotablesIII Adjusted Pre-tax Income (Loss) (I 72)(11)1(2)(25)24150(5)7Certain notables presented in prior periods that are nil for each quarter shown here have been omittedFV changes that are driven by changes in interest rates, valuation inputs or other assumptions, net of unrealized gains / (losses) on MSR hedge. Non-Agency TotalMSR excluding GNMA & GSE MSRs. Agency GNMA & GSE MSRs. The adjustment does not include 1.1 million valuation gains of certain MSRs that were purchasedat a discount in Q1 2022 ( 9 million in Q1 2021).Other contains non-routine transactions, including but not limited to pension benefit cost adjustments, long term employee compensation changes, and fair valueassumption changes on other investmentsOcwen Financial Corporation 18
Expense Notables by Segment(a)(b)Certain previously presented notable categories with nil numbers for each quarter shown have been omitted.Includes non-routine costs associated with strategic transactions including transaction costs related to the reverse platform acquisition from RMSOcwen Financial Corporation 19
Income Statement Notables by SegmentIncome Overview MillionsQ1'22ServicingIReported Pre-Tax Income / (Loss)Adjustments for Notables(a)Expense Notables (from prior slide)(b)Non-Agency MSR FV ChangeAgency MSR FV Change, net of macro hedge(b)NRZ/MAV MSR Liability FV Change (Interest Expense)Reverse FV Change(c)OtherII Total Income Statement NotablesIII Adjusted Pre-tax Income (Loss) (I 1)(21)(7)0036Certain notables presented in prior periods that are nil for each quarter shown here have been omittedFV changes that are driven by changes in interest rates, valuation inputs or other assumptions, net of unrealized gains / (losses) on MSR hedge. Non-Agency Total MSRexcluding GNMA & GSE MSRs. Agency GNMA & GSE MSRs. The adjustment does not include 1.1 million valuation gains of certain MSRs that were purchased at adiscount in Q1 2022 ( 9 million in Q1 2021).Other contains non-routine transactions, including but not limited to pension benefit cost adjustments, long term employee compensation changes, and fair value assumptionchanges on other investmentsOcwen Financial Corporation 20
GAAP ROE & After-Tax ROE Before Notable ItemsOcwen Financial Corporation 21
MSR Valuation Assumptions – Owned MSRsAt 3/31/2022NonTotalAgency RetainedFN/ FHFHA/ VA87,56111,57516,589(in millions)UPB115,725Loan Count (000s)35887104548Fair Value1,2041201111,435Fair Value (% of UPB)1.38%1.04%0.67%1.24%% in COVID-19 FRB Plan0.4%2.1%2.3%1.0%% Current in current month18.55%14.94%28.74%21.66%Weighted Average Note Rate3.1694.0723.9713.375Weighted Average Svc FeeCollateral Metrics:0.2560.3570.3280.277Weighted Average Rem Term305278181284% D30 (MBA)0.7%4.7%5.0%2.1%% D60 (MBA)0.2%1.7%1.6%0.7%% D90 (MBA)0.9%6.8%6.7%2.9%% D30-60-90 1.7%13.2%13.2%5.7%8.39.813.29.1Fair Value Assumptions(a):Lifetime CPR(b)Cost to Service - Lifetime Total(c) 70 111 167 88Cost to Service - Lifetime Perf. (c,d) 65 75 121 77Cost to Service - Lifetime NPL (c,d) 554 667 901 747Ancillary Income(c) 41 44 64 44Discount Rate8.310.110.58.8(a) 3rd party broker assumptions(b) Total voluntary payoffs and involuntary defaults; does not include scheduled payments(c) Annual per loan; Ancillary includes REO fee income on Non-Agency MSRs(d) Performing represents Current and D30; NPL represents D60 Ocwen Financial Corporation 22
Well positioned for 2022 targets by segmentOriginationsObjectivesPrudentGrowth1000 Correspondentand FlowsellersQtrly MSR vol 11.5B at 55bps revenuemargin(a)Increase leadconversion & addNew CustomerAcquisitionServicingIndustry Refivol dropping65% in 2022 13.5 % totalprepays 130B MSRUPBRevenue(b) of 30bps 200BSubserv UPBRevenue(b) of 12bpsLower opex(d)to 10-11 bpsStrengthenConsumerDirectMaintain 30% recapture rateCostLeadershipSales andoperationsproductivityinitiativesMaintain opex(c)at 31 bps(excl. Marketinginvestment)Operationsand claimsproductivityinitiativesIncrease mix(f)in higher marginproducts &segmentsConsumer Direct,GNMA, BestEfforts, Non-Del,Non-Agency &ReverseEBO and iesCorporate(a) Total originations revenue (GOS, origination fees andinterest income)/(orig. vol.). 60% of originations will beon-book, 40% will go to MAV.(b) Includes all servicing revenues: Servicing andSubservicing Fees and all ancillary revenues excludingGNMA gain on sale. Subserv UPB includes NRZ(c) Opex and Overhead as a % of Orig volume(d) Forward Servicing Opex and Overhead as a % of UPB.Includes additional 4bps of S&O and Ove
future draws on existing loans in our reverse mortgage portfolio; our servicer and credit ratings as well as other actions from various rating agencies, including any future downgrades; as well as other risks and uncertainties detailed in our reports and filings with the SEC, including our annual report on Form
