S-1

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ¨

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to such Section 8(a), may determine.

The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

We are offering ordinary shares. The public offering price of our ordinary shares is $ per share.

Our ordinary shares are listed for trading on The NASDAQ Global Select Market under the symbol “HLSS.” The last reported sale price of our ordinary shares on August 16, 2012 was $15.76 per share.

Investing in our ordinary shares involves risks that are described under “Risk Factors” beginning on page 19.

We have granted the underwriters an option for a period of 30 days from the date of this prospectus to purchase up to an additional ordinary shares from us, at the public offering price, less the underwriting discounts and commissions, to cover over-allotments, if any. If the underwriters exercise the option in full, the total underwriting discounts and commissions payable by us will be $ and the total proceeds to us, before expenses, will be $ . See “Underwriting.”

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The underwriters expect to deliver the ordinary shares to purchasers on or about , 2012.

We are responsible for the information contained in this prospectus and in any related free writing prospectus we prepare or authorize. Neither we nor the underwriters and their affiliates have authorized anyone to give you any other information. We do not, and the underwriters and their affiliates do not, take any responsibility for, and can provide no assurance as to the reliability of, any information that others may give you. We are offering to sell, and seeking offers to buy, our ordinary shares only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date on the front cover of this prospectus, or other earlier date stated in this prospectus, regardless of the time of delivery of this prospectus or of any sale of our ordinary shares.

For investors outside of the United States: neither we nor any of the underwriters has done anything that would permit this offering outside the United States or to permit the possession or distribution of this prospectus outside the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of our ordinary shares and the distribution of this prospectus outside of the United States.

PROSPECTUS SUMMARY

This summary highlights information contained elsewhere in this prospectus and does not contain all of the information that you should consider in making your investment decision. Before investing in our ordinary shares, you should carefully read this entire prospectus, including our consolidated financial statements and the related notes included elsewhere in this prospectus. You should also consider, among other things, the matters described under “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “The Business” appearing elsewhere in this prospectus. Unless otherwise stated, all references to “us,” “our,” “we,” the “Company” and similar designations refer to Home Loan Servicing Solutions, Ltd. and its consolidated subsidiaries.

Our Company

We are a Cayman Islands exempted company that acquires mortgage servicing assets consisting of mortgage servicing rights, rights to mortgage servicing rights, associated servicing advances and other related assets. We launched our operations on March 5, 2012 using the proceeds from our initial public offering and a concurrent private placement with our founder and Chairman of our Board of Directors to acquire mortgage servicing assets related to a portfolio with $15.2 billion unpaid principal balance from Ocwen Loan Servicing, LLC, or “Ocwen Loan Servicing.” We do not originate or purchase mortgage loans, and as a result we are not subject to the risk of loss related to the origination or ownership of mortgage loans. We have engaged Ocwen Loan Servicing, a high quality residential mortgage loan servicer, to service the mortgage loans underlying our mortgage servicing assets and therefore have not and do not intend to develop our own mortgage servicing platform. While we have only completed one full quarter of operations, we believe that our revenue and expense structure is predictable and will generate a stable income stream and that the quality of our assets is and will continue to be strong. We believe this combination will accomplish our primary objective of delivering attractive and consistent risk-adjusted returns to our shareholders. We intend to distribute at least 90% of our net income over time to our shareholders in the form of a monthly cash dividend. In addition, unlike many income-oriented investment alternatives, we believe that our income stream and the valuation of our assets are not substantially correlated to movements in interest rates.

Our results of operations for the quarter ended June 30, 2012, our first full quarter of operations, reflect consistent earnings that were in line with our expectations and exceeded the dividends declared for the period by approximately $400,000. The valuation of our assets for the period was stable. Ocwen Loan Servicing’s performance was strong, with delinquencies continuing to decrease and the advance ratio declining slightly faster than targeted in the Purchase Agreement (defined below). From an operational perspective, the transactions between Ocwen Loan Servicing and HLSS Holdings, LLC, or “HLSS Holdings,” our wholly-owned subsidiary that holds our mortgage servicing assets, were completed as planned and we believe that all servicing requirements under the pooling and servicing agreements were met in all material respects. Having achieved our business and financial objectives in the first quarter, we purchased additional assets from Ocwen Loan Servicing that are substantially similar to our initial portfolio under substantially similar terms, as described below under “Acquisitions of Mortgage Servicing Assets.”

Our executive management team has extensive experience in the mortgage servicing industry and each of our executive managers was formerly in a senior management role at Ocwen Financial Corporation or “Ocwen.” We believe our executive management team’s extensive experience provides us with the ability to assess the vital characteristics of the mortgage loans underlying the mortgage servicing assets we have acquired and may seek to acquire and evaluate the quality of our current and potential mortgage servicers. We believe this experience further enables us to accurately value mortgage servicing assets and better forecast future asset performance and servicing cash flows. In addition, our management team has demonstrated historical success in arranging cost-effective servicing advance financing through a variety of economic cycles.

Our business strategy is focused on acquiring mortgage servicing rights. In many cases, however, the transfer of legal ownership of mortgage servicing rights requires the prior approval or consent of various third parties, including rating agencies. If the seller from whom we have agreed to purchase mortgage servicing rights has not obtained the necessary approvals and consents to transfer legal ownership of the mortgage servicing rights to us, we will instead seek to acquire the rights to receive the servicing fees that the current servicer is entitled to receive, and the current servicer will continue to service the mortgage loans and receive compensation from us for its servicing activities. We refer to these rights, along with the right to acquire legal ownership of the related mortgage servicing rights automatically upon obtaining the necessary approvals and consents to transfer the mortgage servicing rights, as “Rights to MSRs.” Upon receipt of the necessary third party approvals and consents, the seller is obligated to transfer legal ownership of the mortgage servicing rights to us without any additional payment. Whether we acquire mortgage servicing rights or Rights to MSRs, we also acquire servicing advances and other associated assets. We do not believe that our business strategy or economic performance has been or will be materially affected by whether we directly own mortgage servicing rights or the related Rights to MSRs. All of our acquisitions of mortgage servicing assets to date have been structured as acquisitions of Rights to MSRs and we expect that any additional acquisitions of mortgage servicing assets will be structured in the same manner, at least in the near term.

Throughout this prospectus, when we refer to our “Mortgage Servicing Assets,” we are referring to the Rights to MSRs that we own and the mortgage servicing rights that we may acquire in the future, and when we refer to “Purchased Assets,” we are referring to the Mortgage Servicing Assets, together with the associated servicing advances and any other assets related to such Mortgage Servicing Assets that we have acquired. We refer to the mortgage servicing rights related to the Rights to MSRs that we have acquired and any mortgage servicing rights we may acquire in the future and which are or will be serviced by Ocwen Loan Servicing as the “Ocwen Mortgage Servicing Rights.” As of the date of this prospectus, all of the Rights to MSRs that we have acquired have been acquired from, and are serviced by, Ocwen Loan Servicing.

We have not and do not intend to develop our own mortgage servicing platform but instead will rely on high quality third-party residential mortgage loan servicers. Ocwen Loan Servicing is a leader in the residential subprime and Alt-A mortgage servicing industry based on its historical servicing performance through a variety of real estate and economic cycles. Prior to the transfer of legal ownership of any Ocwen Mortgage Servicing Rights to us, Ocwen Loan Servicing will remain obligated to service the underlying mortgage loans and will remit to us the servicing and other related fees (excluding any ancillary income that Ocwen Loan Servicing will retain) it collects in each month related to the Rights to MSRs. Following the transfer of legal ownership of any Ocwen Mortgage Servicing Rights to us, Ocwen Loan Servicing will service the underlying mortgage loans on our behalf as subservicer, and we will receive the servicing and other related fees (excluding any ancillary income). As compensation for its servicing and subservicing activities, Ocwen Loan Servicing receives from us a monthly base fee initially equal to 12% of such recognized servicing fees collected each month. Ocwen Loan Servicing also earns a monthly performance-based incentive fee that fluctuates based on collections and servicing advance reduction criteria with respect to the underlying mortgage loans. We believe this arrangement aligns the interests of both companies. We will compensate Ocwen Loan Servicing for the services it performs for us prior to the transfer of legal ownership of the Ocwen Mortgage Servicing Rights to us. The method used to calculate the fees that we pay to Ocwen Loan Servicing under the Purchase Agreement with respect to the Rights to MSRs is the same as the method used to calculate the fees that we will pay to Ocwen Loan Servicing under the Subservicing Agreement with respect to any Ocwen Mortgage Servicing Rights that we subsequently acquire. As a result, the compensation to be paid to Ocwen Loan Servicing will not vary based on whether Ocwen Loan Servicing or we hold legal title to the underlying Ocwen Mortgage Servicing Rights.

We anticipate future growth through subsequent acquisitions of Mortgage Servicing Assets. As part of our strategy to acquire additional Mortgage Servicing Assets, we intend to purchase substantially all of the remaining mortgage servicing rights currently owned by Ocwen Loan Servicing or, to the extent that Ocwen Loan Servicing has not received the necessary third party approvals and consents to transfer such mortgage servicing rights to us prior to the closing of any subsequent acquisitions of mortgage servicing rights, the related Rights to MSRs. As of June 30, 2012, this related to Ocwen’s approximately $91.2 billion of unpaid principal balance of subprime and Alt-A mortgage loans. We believe that Ocwen perceives that it has benefited from the transfer of Rights to MSRs to us in connection with our previous acquisition transactions. Although we cannot guarantee that future acquisition transactions will occur, we also believe that Ocwen will benefit from such transactions and therefore will continue to sell mortgage servicing assets to us in this manner which will allow us to maintain or grow the unpaid principal balance of our servicing portfolio.

We intend to continue to acquire additional similar mortgage servicing assets from Owen in the near term in two ways:

•

In order to remain fully invested and to offset the impact of prepayments in our serving portfolio, we expect to continue to utilize cash flow from operations in excess of our dividend to purchase mortgage servicing assets that are similar to our initial portfolio from Ocwen Loan Servicing under substantially similar terms. We refer to such transactions as “flow transactions.” We expect flow transactions to take place at regular intervals. Certain terms of such flow transactions, including the servicing incentive fee and advance ratio targets, will vary over time through these transactions.

•

In order to increase the scale of our business we will look for opportunities to issue additional equity in the form of ordinary shares to allow us to execute larger purchases of mortgage serving assets similar to our initial portfolio from Ocwen Loan Servicing under substantially similar terms. We refer to such transactions as “bulk purchases.” Bulk purchases will be subject to equity market conditions and will likely require that additional advance financing capacity be arranged in advance or concurrently with each transaction in order to maintain leverage similar to our current level.

As of August 1, 2012, we have made purchases of Rights to MSRs from Ocwen Loan Servicing related to approximately $20.2 billion of unpaid principal balance of mortgage loans.

Although we believe that competitive and regulatory dynamics in the mortgage servicing industry will present us with opportunities to acquire Mortgage Servicing Assets from banks, other financial institutions and independent mortgage servicers and we remain open to purchasing mortgage servicing assets from third parties other than Ocwen Loan Servicing, given the large amount of mortgage servicing assets remaining at Ocwen Loan Servicing, we do not view initiating purchases from other third parties as a near-term priority. The provisions of our Amended and Restated Memorandum and Articles of Association (“Articles of Association”) restrict our ability to issue and sell additional ordinary shares at a price below our then current net asset value per share without first obtaining the prior approval of holders of at least a majority of the outstanding ordinary shares voted with respect to such approval. Future sales of ordinary shares by us will dilute the ownership percentage of our then-existing shareholders, including shareholders that purchase in this offering.

We were incorporated as an exempted company in the Cayman Islands, which currently does not levy income taxes on individuals or companies. We expect to be treated as a passive foreign investment company (“PFIC”) under U.S. federal income tax laws. We intend to distribute at least 90% of our net income over time to our shareholders in the form of a monthly dividend that will primarily be based on projected annual earnings, although we are not required by law to do so. Payment of a monthly dividend is not a condition of our tax status, and our decision to pay this dividend is not expected to be impacted by any changes in our status for U.S. tax purposes. Except for our subsidiary that is taxed as a corporation for U.S. federal income tax purposes, we do not expect to be treated as engaged in a trade or business in the

United States and thus do not expect to be subject to more than a nominal amount of U.S. federal income taxation.

Since the closing of our initial public offering, we have paid monthly dividends of $0.10 per ordinary share (except during the month of March in which we paid a pro-rated amount of $0.08 per ordinary share). The following table sets forth the record and payment dates of the dividends declared by our Board of Directors, but are unpaid, for the months of August and September:


Record Date	Payment Date	Amount per Ordinary Share

August 31, 2012	September 10, 2012	$0.10

September 28, 2012	October 10, 2012	$0.10

Our Board of Directors has the right to rescind declared, but unpaid dividends at any time prior to the applicable dividend payment date. See “Dividend Policy,” “Description of Share Capital” and “Material Cayman Islands and United States Federal Income Tax Considerations.”

Acquisitions of Mortgage Servicing Assets

The Initial Ocwen Purchase

On March 5, 2012, we consummated our initial acquisition of Mortgage Servicing Assets from Ocwen Loan Servicing (the “Initial Ocwen Purchase”). The Mortgage Servicing Assets that we purchased in connection with the Initial Ocwen Purchase are a portion of the assets acquired by Ocwen Loan Servicing when it acquired the U.S. subprime mortgage servicing business known as “HomEq Servicing” on September 1, 2010. The business acquired by Ocwen Loan Servicing included the mortgage servicing rights and associated servicing advances of HomEq Servicing, as well as the servicing platform based in Sacramento, California and Raleigh, North Carolina. The sellers were Barclays Bank PLC and Barclays Capital Real Estate Inc. (collectively, “Barclays”). The unpaid principal balance of the subprime and Alt-A mortgage loans underlying the mortgage servicing rights acquired in the Initial Ocwen Purchase was approximately $15.2 billion and the amount of associated servicing advances outstanding was approximately $413.4 million, in each case as of March 5, 2012. We funded the Initial Ocwen Purchase with a portion of the net proceeds from our initial public offering.

Pursuant to a master servicing rights purchase agreement between Ocwen Loan Servicing and HLSS Holdings, which we refer to as the “Purchase Agreement” throughout this prospectus, we purchased the following:

•

the contractual right to receive the servicing fees (excluding any ancillary income) related to the initial Ocwen Mortgage Servicing Rights;

•

the contractual right to receive any investment earnings on the custodial accounts related to the initial Ocwen Mortgage Servicing Rights that Ocwen Loan Servicing receives pursuant to the related pooling and servicing agreements, which are the agreements that govern the packaging of mortgage loans into a pool, the servicing of such mortgage loans and the terms of the mortgage-backed securities issued by the securitization trust;

•

the right to automatically obtain legal ownership, without any additional payment to Ocwen Loan Servicing, of each Ocwen Mortgage Servicing Right upon the receipt of the necessary third party approvals and consents (this right, together with rights described in the bullet points above, constitute the “Rights to MSRs” with respect to the initial Ocwen Mortgage Servicing Rights);

•

the outstanding servicing advances associated with the related pooling and servicing agreements; and

•

other assets related to the foregoing (collectively, the foregoing represent the “Initial Purchased Assets”).

Pursuant to amended and restated servicing advance facility agreements that we refer to as the “Servicing Advance Facility Agreements” throughout this prospectus, we also assumed a related match funded servicing advance financing facility from Ocwen Loan Servicing effective upon the closing of the Initial Ocwen Purchase.

At closing on March 5, 2012, we paid cash of $149.8 million to Ocwen for the estimated purchase price of the Initial Purchased Assets (net of assumed liabilities of $359.2 million), subject to certain closing adjustments. The purchase price for the Rights to MSRs was based on the value of such assets at the time we entered into the Purchase Agreement and the estimated outstanding unpaid principal balance of the underlying mortgage loans at closing. The purchase price for the associated servicing advances and other assets was equal to the net consolidated book value, which approximated fair value, as of the purchase date of all assets and liabilities of the special purpose entity (“SPE”) established in connection with the advance financing facility that owns these servicing advances. We acquired servicing advances in connection with the Initial Ocwen Purchase that are held in the SPE pursuant to the Servicing Advance Facility Agreements.

On March 31, 2012, the Company and Ocwen, pursuant to the terms of the Purchase Agreement, agreed to a final purchase price of $138.8 million for the Initial Purchased Assets (net of assumed liabilities of $359.2 million), reflecting post-closing adjustments of $11.0 million that principally resulted from declines in match funded advances. See “The Business–Description of the Purchase Agreement” and “—Description of the Subservicing Agreement” for more information on the Master Servicing Rights Purchase Agreement and the related Master Subservicing Agreement, respectively.

The Flow Transactions

On May 1, 2012, we completed an acquisition from Ocwen Loan Servicing, which we refer to as the “Flow One Purchase”, of Rights to MSRs and related servicing advances for a servicing portfolio of subprime and Alt-A residential mortgage loans, which we refer to as the “Flow One Purchased Assets”. The Flow One Purchase resulted in the acquisition by us of Rights to MSRs with approximately $2.9 billion in unpaid principal balance as of April 30, 2012. The characteristics of the Rights to MSRs and associated servicing advances acquired in the Flow One Purchase are substantially similar to those rights we acquired in the Initial Ocwen Purchase. The Flow One Purchased Assets were acquired pursuant to a supplement to the Purchase Agreement. The purchase price for the Flow One Purchase was $103.8 million. To finance the purchase price, we used $25.9 million in cash generated from our operations and borrowed $77.9 million under the Servicing Advance Facility against the $92.6 million in servicing advances associated with the Rights to MSRs. The final adjusted purchase price was $103.5 million.

On August 1, 2012, we completed an acquisition from Ocwen Loan Servicing, which we refer to as the “Flow Two Purchase,” and together with the Flow One Purchase, the “Flow Purchases” of Rights to MSRs and related servicing advances for a servicing portfolio of subprime and Alt-A residential mortgage loans, which we refer to as the “Flow Two Purchased Assets” and together with the Flow One Purchased Assets, the “Flow Purchased Assets,” and together with the Initial Purchased Assets, the “Aggregate Purchased Assets”. The Flow Two Purchase resulted in the acquisition by us of Rights to MSRs with approximately $2.1 billion in unpaid principal balance as of July 31, 2012. The characteristics of the Rights to MSRs and associated servicing advances acquired in the Flow Two Purchase are substantially similar to those rights we acquired in the Initial Ocwen Purchase and the Flow One Purchase. The Flow Two Purchased Assets were acquired pursuant to a supplement to the Purchase Agreement. The purchase price for the Flow Two Purchase was $74.7 million. To finance that amount, we used $18.6 million in cash generated from our operations and borrowed $56.1 million under the Servicing Advance Facility against the $66.7 million in servicing advances associated with the Rights to MSRs.

Throughout this prospectus, we refer to the Initial Ocwen Purchase, the Flow One Purchase and the Flow Two Purchase together as the “Ocwen Transactions.” We refer to the mortgage servicing rights associated with the Ocwen Transactions as the “Initial Mortgage Servicing Rights.”

The Planned Acquisition

Consistent with our growth strategy, we intend to use the net proceeds of this offering to purchase additional Mortgage Servicing Assets from Ocwen Loan Servicing in a bulk purchase, which we refer to as the “Planned Acquisition.” We are in discussions with Ocwen Loan Servicing regarding the composition of the Planned Acquisition Assets (as defined below), but have not yet identified the specific assets we will acquire. We expect the Planned Acquisition Assets will have similar characteristics to those Mortgage Servicing Assets acquired in the Ocwen Transactions, and that the related servicing advances, both current and future, will be eligible for funding under the Servicing Advance Facility Agreements. We also expect to amend our existing Servicing Advance Facility Agreements to allow for additional borrowing from Barclays Bank Plc to finance the acquisition of the servicing advances related to the Planned Acquisition Assets and the servicing advances we have previously acquired, or, alternatively, we may amend our existing Servicing Advance Facility Agreements to issue new debt securities backed by the servicing advances related to the Planned Acquisition Assets and the servicing advances we have previously acquired. We are currently in discussions with Barclays Bank Plc regarding the amendments to the Servicing Advance Facility Agreement, but we do not have a firm commitment for additional servicing advance financing for the Planned Acquisition.

The Planned Acquisition will be made pursuant to a supplement to the Purchase Agreement under similar terms to those supplements governing the Aggregate Purchased Assets, which provides for, among other things:

•

the contractual right to receive the servicing fees (excluding any ancillary income) related to any acquired mortgage servicing rights;

•

the contractual right to receive any investment earnings on the custodial accounts related to any acquired mortgage servicing rights that Ocwen Loan Servicing receives pursuant to the related pooling and servicing agreements;

•

the right to automatically obtain legal ownership, without any additional payment to Ocwen Loan Servicing, of each acquired mortgage servicing right upon the receipt of the necessary third party approvals and consents (this right, together with rights described in the bullet points above, constitute the “Rights to MSRs” with respect to any acquired mortgage servicing rights);

•

the outstanding servicing advances associated with the related pooling and servicing agreements; and

•

other assets related to the foregoing (collectively, the foregoing represent the “Planned Acquisition Assets”).

The mortgage loans underlying the Planned Acquisition Assets will be serviced by Ocwen Loan Servicing and, if and when we acquire the related Third Party Consent related to the Planned Acquisition Assets, will be subserviced by Ocwen Loan Servicing pursuant the Subservicing Agreement under similar terms to those subservicing supplements governing the Aggregate Purchased Assets. We currently expect that the Planned Acquisition will close shortly after this offering, although we cannot assure you that the closing of the Planned Acquisition will not be delayed. The closing of this offering is not conditioned upon the closing of the Planned Acquisition.

Third Party Consents

Ocwen Loan Servicing will remain the named servicer of the Initial Mortgage Servicing Rights and the mortgage servicing rights associated with the Planned Acquisition until such time as the approvals and consents necessary to transfer legal ownership of such acquired mortgage servicing rights to us are obtained. We expect that the approvals, consents and other documentation from third parties necessary to transfer such legal ownership will include:

•

statements from the rating agencies that rated the related securitization transactions (which will likely include Moody’s Investors Service, Standard & Poor’s Ratings Service and Fitch Ratings Service) that the transfer of legal ownership of the acquired mortgage servicing rights to us will not cause a downgrade of the related mortgage-backed securities;

•

the consent of parties to the related pooling and servicing agreements, which may include the trustees of the related securitization trusts, the sponsors of the securitization transactions, any master servicer for the securitization transactions or any bond insurers or other credit enhancers insuring the mortgage-backed securities issued by the securitization trusts; and

•

any amendments to the related pooling and servicing agreements required to effectuate the transfer and sale of the related acquired mortgage servicing rights to us.

We refer to these requirements collectively as they relate to the Initial Mortgage Servicing Rights and the mortgage servicing rights associated with the Planned Acquisition or any acquired mortgage servicing rights as the “Required Third Party Consents.”

With respect to the Initial Purchased Assets, one of the rating agencies from whom a rating confirmation is required prior to the transfer of legal ownership of the mortgage servicing rights to us in the Initial Ocwen Purchase stated that it would not provide such confirmation primarily because we were a newly formed entity with no demonstrated operating history as a mortgage servicer. Although no specific time frame was provided by the rating agency, we believe that it will be at least six months to one year from the closing of our initial public offering before the rating agency will consider issuing a rating confirmation. As a result, the Flow Purchases were structured as purchases of Rights to MSRs and the Planned Acquisition is expected to be structured as a purchase of Rights to MSRs. A continued strategic priority for us is to obtain the Required Third Party Consents necessary for us to become the named servicers for the securitizations where we currently own Rights to MSRs and the associated advances. Based on our current dialogue with consent parties, our near term goal in pursuit of such consents is to establish an operating history that demonstrates a continued capability to perform the servicing requirements, specifically our obligation to fund servicing advances and to make principal and interest remittances in conformity with all requirements of the pooling and servicing agreements. As of the date of this prospectus, we have not received an update from rating agencies with respect to the timing of a rating confirmation or whether that confirmation will be forthcoming. We will automatically obtain legal ownership of any such mortgage servicing rights without any additional payment to Ocwen Loan Servicing if and when we obtain the Required Third Party Consents.

So long as any Required Third Party Consents have not been obtained:

•

Ocwen Loan Servicing will remain obligated to perform its obligations as servicer under the related pooling and servicing agreement;

•

we will be contractually required to purchase any servicing advances that Ocwen Loan Servicing is required to make pursuant to such pooling and servicing agreement as long as such servicing advances made by Ocwen Loan Servicing are made in accordance with its advance and stop advance policies;

•

Ocwen Loan Servicing will be prohibited from taking actions inconsistent with our right to acquire legal ownership of the related mortgage servicing right upon receipt of the Required Third Party Consents; and

•

we will account for the acquired Rights to MSRs as a financing. Accordingly, we will record the purchase price paid to Ocwen Loan Servicing as a “Notes Receivable—Rights to MSRs.” We will record the servicing fees that we receive with respect to the Rights to MSRs, net of servicing costs related to such Rights to MSRs, as payments on the note and apportion these payments between interest income and principal repayment.

If and when we obtain the Required Third Party Consents and become the legal owner of any acquired mortgage servicing right:

•

we will be contractually obligated to service the mortgage loans underlying such acquired mortgage servicing rights in accordance with the related pooling and servicing agreement;

•

Ocwen Loan Servicing will be contractually obligated to us pursuant to a subservicing agreement to perform substantially all of the servicing functions it previously performed relating to such acquired mortgage servicing right on our behalf, other than maintaining custodial accounts, remitting amounts from the custodial accounts and funding servicing advances pursuant to the terms of the related pooling and servicing agreement, which will be functions for which we would be responsible; and

•

we will account for the remaining balance of the Notes Receivable—Rights to MSRs related to such acquired mortgage servicing right as mortgage servicing rights to the extent we receive any Required Third Party Consents to transfer legal ownership of such mortgage servicing rights to us.

We cannot be certain of how long it would take to obtain any Required Third Party Consents or if we would be able to obtain them at all. We do not believe, however, that our business strategy or economic performance has been or will be materially affected by whether we own any acquired mortgage servicing rights or the related Rights to MSRs.

The Market Opportunity

We believe that the current dynamics of the subprime and Alt-A mortgage servicing market have created a unique opportunity where the supply of mortgage servicing rights potentially for sale outweighs the number of potential buyers. These dynamics include:

•

higher borrower delinquencies and defaults experienced over the last few years and increased regulatory oversight has led to substantially higher costs for mortgage servicers and negatively impacted their profitability;

•

regulatory changes resulting from the implementation of the new international bank capital adequacy framework (“Basel III”), which will impose increased regulatory capital costs on depository institutions for owning mortgage servicing rights; and

•

our belief that subprime and Alt-A mortgage servicing has become less attractive to many mortgage servicers due to increasingly negative publicity and heightened government and regulatory scrutiny.

engaging a party other than such seller to service the underlying mortgage loans. In addition, we may also pursue opportunities to purchase mortgage servicing rights relating to loans guaranteed or securitized by the U.S. government or government sponsored entities such as Fannie Mae and Freddie Mac (collectively, the “GSEs”).

Competitive Strengths

We believe we are well positioned to execute our business strategy based on the following competitive strengths:

Experienced Management Team with Extensive Knowledge of the Mortgage Servicing Industry. We have an executive management team with extensive experience in the mortgage servicing industry. This experience includes evaluating and acquiring mortgage servicing rights, performing asset valuation analysis and financing mortgage servicing businesses through a variety of economic cycles. Key members of our executive management team also have experience in managing a public company in the mortgage servicing industry.

Asset Acquisition and Evaluation Expertise. We believe that our asset acquisition evaluation process, which includes using proprietary historical data to project the performance of mortgage loans, and our executive management team’s experience and judgment in identifying, assessing, valuing and acquiring new Mortgage Servicing Assets enables us to accurately price assets.

Access to Mortgage Servicing Assets. Members of our executive management team have extensive relationships in the mortgage servicing industry, including relationships with mortgage loan originators and potential sellers of mortgage servicing rights. We intend to acquire substantially all of Ocwen Loan Servicing’s remaining mortgage servicing rights relating to subprime and Alt-A mortgage loans which had an unpaid principal balance of approximately $91.2 billion as of June 30, 2012. To date, we have acquired Rights to MSRs with an unpaid principal balance of $20.2 billion from Ocwen Loan Servicing. Future acquisitions of Ocwen Loan Servicing’s remaining mortgage servicing rights will depend on various factors, including our ability to access financing and to obtain the required third party approvals and consents, and may not take place.

Relationship with Ocwen. We intend to continue to capitalize on the servicing capabilities of Ocwen Loan Servicing, which we view as superior relative to other servicers in terms of cost, management experience, technology infrastructure and platform scalability. Ocwen Loan Servicing will continue to service the mortgage loans underlying the Aggregate Purchased Assets, as well as service the mortgage loans underlying the Planned Acquisition Assets, during the period of time prior to the transfer of legal ownership to us of the Initial Mortgage Servicing Rights and the mortgage servicing rights associated with the Planned Acquisition. Thereafter, we will engage Ocwen Loan Servicing to service on our behalf the mortgage loans underlying our Mortgage Servicing Assets and any additional mortgage servicing assets that we may acquire from them in the future, provided that the performance criteria specified in the Subservicing Agreement are met. We may also engage Ocwen Loan Servicing to service mortgage loans underlying any mortgage servicing assets that we acquire from other third parties in the future.

Ownership, Organizational and Operating Structure

On December 1, 2010, we were incorporated as a Cayman Islands exempted company. The following diagram illustrates our corporate structure, the jurisdiction of formation and the ownership interests of our subsidiaries.

Risk Factors

We have a very limited operating history and our business model is new and relatively untested. An investment in our ordinary shares involves significant risks. Below is a summary of some of the key risk factors that you should consider in evaluating an investment in our ordinary shares. This list is not exhaustive and you should carefully read the full discussion of these risks and other risks described under “Risk Factors” beginning on page 19.

•

We may be unable to continue to implement our business strategy or operate our business as currently expected, including being able to obtain the Required Third Party Consents.

•

The assumptions underlying our business model may prove incorrect.

•

We will have increased risk related to our relationship with Ocwen Loan Servicing so long as it retains legal ownership of any mortgage servicing rights we may acquire from Ocwen Loan Servicing.

•

We may not be able to pay dividends on our ordinary shares, and our Board of Directors has the right to rescind any dividends declared, but unpaid at any time prior to the applicable dividend payment date.

•

We rely on Ocwen Loan Servicing to service our entire portfolio of Purchased Assets both before legal ownership is transferred to us and after.

•

We will need to acquire additional Mortgage Servicing Assets to maintain and grow our business as planned.

•

We may not be able to obtain financing to fund our servicing advances and future acquisitions of Mortgage Servicing Assets, including the Planned Acquisition.

•

Government regulation may adversely affect our business.

•

We may become subject to taxation in the United States.

•

Many pooling and servicing agreements for subprime and Alt-A mortgage loans contain servicer termination events or events of default based upon the percentage of delinquent loans in the related mortgage loan pool, the loss performance of the related mortgage loans or servicer ratings downgrades. Servicer termination events or events of default based on the number of delinquent mortgage loans, loss performance of the related mortgage loans or servicer ratings downgrades have been triggered in pooling and servicing agreements representing approximately 81% of the unpaid principal balance of the mortgage loans underlying the Ocwen Mortgage Servicing Rights as of June 30, 2012, although the parties to the related securitization transactions have not exercised their right to terminate Ocwen Loan Servicing as servicer.

Corporate Information

Our principal executive offices are located in the Cayman Islands c/o Walkers Corporate Services Limited, Walker House, 87 Mary Street, George Town, Grand Cayman KYI-9005, Cayman Islands. We also maintain offices in the United States located at 2002 Summit Boulevard, Sixth Floor, Atlanta, Georgia 30319 and at 1661 Worthington Road, Suite 100, West Palm Beach, Florida 33409. We can be reached by telephone at (561) 682-7561, and our website is www.hlss.com. We do not incorporate information on, or accessible through, our corporate website into this prospectus, and you should not consider it a part of this prospectus.

The Offering

Issuer

Home Loan Servicing Solutions, Ltd.

Ordinary shares offered in this offering

ordinary shares.

Underwriters’ option to purchase additional ordinary shares

We have granted the underwriters an option to purchase up to an additional ordinary shares from us at the public offering price, less the underwriting discounts, for a period of 30 days from the date of this prospectus to cover over-allotments, if any.

Number of ordinary shares to be outstanding after the offering

ordinary shares ( ordinary shares if the underwriters’ option to purchase additional ordinary shares is exercised in full).

Use of proceeds

The net proceeds to us from this offering, after deducting underwriting discounts and commissions and our estimated offering expenses, will be approximately $ million (or $ million if the underwriters exercise their option to purchase up to an additional ordinary shares). We intend to use the net proceeds of this offering to acquire the Planned Acquisition Assets from Ocwen Loan Servicing in the Planned Acquisition. We are in discussions with Ocwen Loan Servicing regarding the composition of the Planned Acquisition Assets, but have not yet identified the specific assets we will acquire. We expect the Planned Acquisition Assets will have similar characteristics to those Mortgage Servicing Assets acquired in the Ocwen Transactions, and that the related servicing advances, both current and future, will be eligible for funding under the Servicing Advance Facility Agreements. We have not entered into any agreement to acquire the Planned Acquisition Assets. The closing of the Planned Acquisition is not a condition to the closing of this offering. We intend to use the remaining net proceeds, if any, for working capital and general corporate purposes. See “Use of Proceeds.”

Dividend policy

We intend to distribute at least 90% of our net income over time to our shareholders in the form of a monthly cash dividend, although we are not required by law to do so.

The following table sets forth the record and payment dates of the dividends declared by our Board of Directors for the months of August and September:


Record Date	Payment Date	Amount per Ordinary Share
August 31, 2012	September 10, 2012	$0.10
September 28, 2012	October 10, 2012	$0.10

Our Board of Directors has the right to rescind any declared, but unpaid dividends at any time prior to the applicable dividend payment date. See “Dividend Policy,” “Description of Share Capital” and “Material Cayman Islands and United States Federal Income Tax Considerations.”

NASDAQ Global Select Market symbol

“HLSS.”

Tax Considerations

We expect to be treated as a PFIC for U.S. federal income tax purposes. In order to avoid possible adverse tax consequences, including deferred tax and interest charges under the U.S. Internal Revenue Code and Treasury regulations thereunder, “U.S. Holders” (as defined below under “Material Cayman Islands and United States Federal Income Tax Considerations—United States Federal Income Taxation”) may make a “qualified electing fund,” or QEF, election or a mark-to-market election with respect to their investments in our ordinary shares. U.S. Holders should consult with their tax advisors as to whether or not to make such elections and the related consequences and should carefully review the information set forth under “Material Cayman Islands and United States Federal Income Tax Considerations—United States Federal Income Taxation—Consequences to U.S. Holders—Passive Foreign Investment Company Status and Related Tax Consequences” for additional information.

Conflicts of Interest

As described under “Underwriting,” a portion of the net proceeds of this offering may be paid to Ocwen Loan Servicing in connection with the Planned Acquisition. Ocwen Loan Servicing or its affiliates may use such proceeds to repay certain outstanding indebtedness under Ocwen’s senior secured term loan or one or more of Ocwen’s servicing advance facilities, the lenders under which include affiliates of certain of the underwriters. Because certain of the underwriters have provided a financing commitment to that term loan facility or are lenders under Ocwen’s servicing advance facilities, 5% or more of the net proceeds of this offering, not including underwriting compensation, may be paid to affiliates of certain of the underwriters. Accordingly, this offering is being conducted in compliance with Rule 5121 of the Financial Industry Regulatory Authority, Inc. (“FINRA”), which requires that a qualified

Summary Consolidated Financial Data

We were incorporated as a Cayman Islands exempted company on December 1, 2010. Prior to our initial public offering, our operations were limited to negotiating and entering into the Purchase Agreement and the Subservicing Agreement with Ocwen Loan Servicing, negotiating and entering into arrangements with lenders and other third parties to effect the transfer of our initial Mortgage Servicing Assets, associated servicing advances and the related match funded liabilities to us, negotiating and entering into professional and administrative services agreements with Ocwen Loan Servicing and Altisource Portfolio Solutions S.A., or “Altisource” and general corporate functions. We also entered into a stock purchase agreement pursuant to which William C. Erbey, the founder of our company and the Chairman of our Board of Directors, acquired $10.0 million of our ordinary shares at a purchase price of $14.00 per share concurrently with the closing of our initial public offering. Therefore, we have no historical financial statements reflecting our operations prior to our inception, and our audited balance sheet as of December 31, 2011 and the results of our operations for 2011 reflect only the activities described above. We completed our first full fiscal quarter of operations on June 30, 2012.

The following table sets forth certain of our financial information. The consolidated financial information for the year ended December 31, 2011 has been derived from our audited consolidated financial statements included in this prospectus. The summary financial information for the three and six month periods ended June 30, 2012 and 2011 has been derived from our unaudited consolidated financial statements included in this prospectus, which, in the opinion of management, include all adjustments (consisting of normal recurring adjustments) that are necessary for a fair presentation of our financial position and results of operations for such periods. The operating results for the six months ended June 30, 2012 may not be indicative of the results that may be expected for the entire year.

The unaudited as adjusted balance sheet data below gives effect to the completion of the offering as if it had been completed at June 30, 2012.

The following information should be read together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements, including the notes thereto, appearing elsewhere in this prospectus.

Servicing Advances

We value servicing advances that we make on mortgage loans at their carrying amounts because they have no scheduled maturity, generally are realized within a relatively short period of time and do not bear interest.

Notes Receivable—Rights to MSRs

We record the Notes Receivable—Rights to MSRs at the purchase price of the related Rights to MSRs (as described in the Purchase Agreement). We amortize Notes Receivable—Rights to MSRs using the prospective interest method of accounting. At each reporting date, we calculate the present value of the net cash flows related to the underlying mortgage servicing rights and adjust the carrying value of the applicable Notes Receivable—Rights to MSRs to this amount. The change in the carrying value of the Notes Receivable—Rights to MSRs reduces the interest income associated with our Notes Receivable—Rights to MSRs.

We estimate the fair value of our Notes Receivable—Rights to MSRs by calculating the present value of expected future cash flows of the related mortgage servicing rights utilizing assumptions that we believe are reasonable and consistent with the assumptions that are used by other market participants. The most significant assumptions used are estimates of the speed at which mortgages will prepay and the aggregate principal amount of mortgage loans that will become delinquent, both of which are based on our historical experience and available market data. Other assumptions used in our valuation are:


• Cost of servicing		• Compensating interest expense

• Discount rate reflecting the risk of earning future income streams from the mortgage servicing rights		• Interest rate used for computing float earnings

• Interest rate used for computing the cost of servicing advances		• Collection rate of other ancillary fees

The significant components of the estimated future cash inflows for the mortgage servicing rights held by us include servicing fees, late fees, prepayment penalties and float earnings. Significant cash outflows include the cost of servicing, the cost of financing servicing advances and compensating interest payments. We consider external market-based assumptions in determining the discount rate and interest rate for the cost of financing advances, the interest rate for float earnings and the cost of servicing. The more significant assumptions used in the June 30, 2012 and December 31, 2011 valuation include mortgage loan prepayment projections ranging from 12% to 25% of the related mortgage loans’ unpaid principal balance per year (depending on loan type) averaging to a long-term projected mortgage loan prepayment rate of approximately 18% of the related mortgage loans’ unpaid principal balance per year, and delinquency rates ranging from 15% to 35% of the aggregate unpaid principal balance of mortgage loans related to the mortgage servicing rights held by us (depending on loan type). The long-term prepayment projections include voluntary and involuntary mortgage loan prepayment projections. Other assumptions include an interest rate of 1-month LIBOR plus 4% for computing the cost of financing servicing advances, an interest rate of 1-month LIBOR for computing float earnings and a discount rate of 20%, which reflects the risks associated with our relationship with Ocwen Loan Servicing (which currently services all of the Purchased Assets), including the risk that Ocwen Loan Servicing could become bankrupt, insolvent or otherwise be terminated as servicer.

Match Funded Liabilities

Because our match funded liabilities will bear interest at a rate that is adjusted regularly based on a market index, their carrying value approximates fair value.

Consolidated Statement of Operations⁽¹⁾

(dollars in thousands, except ordinary share data)

(unaudited)


	Three Months Ended June 30,					Six Months Ended June 30,					Twelve Months Ended
	2012		2011			2012		2011			2011
*Revenue*
Interest income–notes receivable–Rights to MSRs	$	10,580	$	—		$	13,525	$	—		$	—
Interest income–other		103		—			136		—			—

Total interest income		10,683		—			13,661		—			—
Other revenue		744		—			995		—			—

Total revenue		11,427		—			14,656		—			—


*Operating expenses*
Organization costs		—		—			—		—			273

Compensation and benefits		1,029		—			1,425		—			—
General and administrative expenses		715		17			946		44			—

Total operating expenses		1,744		17			2,371		44			273

*Income (loss) from operations*		9,683		(17	)		12,285		(44	)		(273	)


*Other expense*

Interest expense		4,964		—			6,255		—			—

Total other expense		4,964		—			6,255		—			—

Income (loss) before income taxes		4,719		(17	)		6,030		(44	)		—
Income tax expense		60		—			77		—			—

*Net income (loss)*	$	4,659	$	(17	)	$	5,953	$	(44	)	$	(273	)


*Earnings (loss) per share*

Basic	$	0.33	$	(0.83	)	$	0.65	$	(2.19	)	$	(13.66	)

Diluted	$	0.33	$	(0.83	)	$	0.65	$	(2.19	)	$	(13.66	)


*Weighted average ordinary shares outstanding*
Basic		14,194,370		20,000			9,191,172		20,000			20,000
Diluted		14,194,370		20,000			9,191,172		20,000			20,000

(1)	Does not include the Flow Two Purchase, which was completed on August 1, 2012.

Consolidated Balance Sheet⁽¹⁾

(dollars in thousands, except ordinary share data)


	June 30, 2012 (unaudited)			As adjusted for the offering
Assets
Cash	$	36,458		$
Match funded advances		430,040
Notes receivable—Rights to MSRs		70,175
Other assets		23,986

Total assets	$	560,659		$


Liabilities and Equity

Liabilities
Match funded liabilities	$	368,467		$
Dividends payable		1,420
Other liabilities		8.696

Total liabilities	$	378,583		$

Equity
Equity — ordinary shares, $0.01 par value; 200,000,000 shares authorized; 14,197,218 shares issued and outstanding at June 30, 2012	$	142		$
Additional paid-in-capital		179,285
Retained earnings		3,214
(Loss)		(565	)

Total equity	$	182,076		$

Total liabilities and equity	$	560,659		$

(1)	Does not include the Flow Two Purchase, which was completed on August 1, 2012.

An investment in our ordinary shares involves significant risks. We describe below the principal risks and uncertainties that we believe affect us or could affect us in the future. The risks and uncertainties described below are not the only ones facing us. Additional risks and uncertainties that we are not aware of or focused on or that we currently deem immaterial may also negatively affect our business operations. You should carefully read and consider the risks and uncertainties described below, together with all of the other information included in this prospectus, before you decide to invest in our ordinary shares. If any of the following risks actually occur, our financial condition and results of operations could be materially and adversely affected. If this were to happen, our ability to pay dividends in the future may be adversely affected, the value of our ordinary shares could significantly decline and you could lose all or part of your investment.

We are a new company. If we are unable to implement our business strategy or operate our business as we currently expect, our operating results may be adversely affected and we may not be able to pay dividends in the future.

We commenced operations on March 5, 2012 using proceeds from our initial public offering and a concurrent private placement to our founder and Chairman of our Board of Directors to acquire mortgage servicing assets related to a portfolio with $15.2 billion of unpaid principal balance from Ocwen Loan Servicing. Our business model is still new and relatively untested and we may not be able to execute our business strategy as planned, which may negatively impact our financial performance and our ability to pay dividends in the future. Businesses such as ours, which are starting up or in their initial stages of development, present substantial business and financial risks and may suffer significant losses. While we have an executive management team whose members are experienced in the mortgage servicing industry, their prior experience and relationships in the industry may not be successfully transferred to our company. In addition, primarily because we do not have a demonstrated operating history as a mortgage servicer, we have been unable to obtain all of the Required Third Party Consents necessary to transfer legal ownership of the Aggregate Purchased Assets to us at this time and may be unable to obtain all of the Required Third Party Consents necessary to transfer legal ownership of Planned Acquisition Assets to us. Our untested business model and limited operating history may also make it more difficult for us to acquire additional mortgage servicing rights from Ocwen Loan Servicing or other third parties in the future.

We have not entered into any agreement to acquire the Planned Acquisition Assets and our ability to do so will depend on a number of factors, including access to adequate financing and the completion of this offering. In connection with the Planned Acquisition, we expect to amend our existing Servicing Advance Facility Agreements to allow for additional borrowing from Barclays Bank Plc to finance the acquisition of the servicing advances related to the Planned Acquisition Assets and the servicing advances we have previously acquired, or, alternatively, we may amend our existing Servicing Advance Facility Agreements to issue new debt securities backed by the servicing advances related to the Planned Acquisition Assets and the servicing advances we have previously acquired. We are currently in discussions with Barclays Bank Plc regarding the amendments to the Servicing Advance Facility Agreement, but we do not have a firm commitment for additional servicing advance financing in connection with the Planned Acquisition. If we are not able to amend our Servicing Advance Facility Agreement on favorable terms or at all, we may not be able to complete the Planned Acquisition without delay or at all. The success of our business strategy depends, in large part, on our ability to acquire additional mortgage servicing assets. The completion of the offering is not conditioned upon completion of the Planned Acquisition. If the offering is completed and we are not able to complete the Planned Acquisition without delay or at all, our operating results could be adversely affected. As a new company we also must establish operating procedures, implement new systems and complete other tasks necessary to conduct our intended business activities.

Because we are a newly formed company, the historical financial and operating data presented in this prospectus may not be representative of our future results.

We are a new company and have limited historical operating results. The quarter ended June 30, 2012 was our first full quarter of operations. In preparing our business and economic model, we made a number of assumptions about future revenues, expenses, assets and liabilities relating to the Aggregate Purchased Assets. We based these assumptions, in part, on the historical financial and operating data relating to the Initial Purchased Assets while they were owned by Ocwen Loan Servicing and the prior owners of the Aggregate Purchased Assets, which may not be indicative of the results we will be able to achieve in the future. Historical financial performance should not be considered a reliable indicator of future performance, and historical trends may not be reliable indicators of anticipated financial performance or trends in future periods. If our assumptions prove incorrect, we may be unable to pay dividends in the future.

We may not be able to obtain the Required Third Party Consents necessary to transfer legal ownership of any acquired mortgage servicing rights to us.

Generally, most pooling and servicing agreements require the consent of various parties, including the rating agencies, the trustees of the related securitization trusts, the sponsors of the securitization transactions, any master servicer or any bond insurers or other credit enhancers insuring the mortgage-backed securities issued by the securitization trusts, prior to the transfer of legal ownership of the related mortgage servicing rights. In connection with the Initial Ocwen Purchase, some but not all of the rating agencies indicated that they would issue a statement that the transfer to us of legal ownership of the mortgage servicing rights purchased would not result in a downgrade to the rating of the related mortgage-backed securities. Additionally, we have not received all of the other Required Third Party Consents in connection with mortgage servicing rights purchased by us. Although no specific time frame was provided by the rating agency that has not indicated that it would provide consent, we believe it will be at least six months to one year from the date or our initial public offering before the rating agency will consider issuing a rating confirmation. The rating agency may not issue the rating confirmation during this time frame or at all. Until we obtain the Required Third Party Consents necessary to transfer legal ownership of a mortgage servicing right to us, Ocwen Loan Servicing will retain legal ownership of such mortgage servicing right. Although are pursuing, and will continue to pursue, the Required Third Party Consents together with Ocwen Loan Servicing, we may not be able to obtain all the Required Third Party Consents in a timely manner or at all. Our understanding of one of the primary issues related to obtaining the Required Third Party Consents is that one of the rating agencies would not provide confirmation of its rating of the related mortgage-backed securities, at least until such time as we have developed an operating history as a mortgage servicer. We have not received an update from rating agencies with respect to the timing of a rating confirmation or whether that confirmation will be forthcoming. Until we receive the Required Third Party Consents and legal ownership of the mortgage servicing rights is transferred to us, we are subject to increased risks as a result of Ocwen Loan Servicing continuing to own the mortgage servicing rights, including the risks relating to the potential of Ocwen Loan Servicing filing for bankruptcy or being terminated as servicer. See below under “—A bankruptcy of Ocwen Loan Servicing could adversely affect our business, expected dividends on our ordinary shares and the value of your investment in us.”

A bankruptcy of Ocwen Loan Servicing could adversely affect our business, expected dividends on our ordinary shares and the value of your investment in us.

If Ocwen Loan Servicing becomes subject to a bankruptcy proceeding, our business could be materially adversely affected, and you could suffer losses.

The validity or priority of our security interest in the Initial Mortgage Servicing Rights could be challenged in a bankruptcy proceeding of Ocwen Loan Servicing, and the Purchase Agreement could be rejected in such proceeding. Ocwen Loan Servicing’s obligations under the Purchase Agreement with respect to the Rights to MSRs is secured by a security interest in the related Initial Mortgage Servicing Rights and the proceeds of the related Initial Mortgage Servicing Rights. We have undertaken all

requirements under applicable law to properly create and perfect such a security interest with respect to the Rights to MSRs that we have purchased to date, including pledging the collateral in the Purchase Agreement and filing financing statements in appropriate jurisdictions, and will undertake to properly create and perfect security interests in any additional Rights to MSRs that we may purchase from Ocwen Loan Servicing in the future, including in the Planned Acquisition. Nonetheless, our security interest may be ruled unenforceable or ineffective by a bankruptcy court. If Ocwen Loan Servicing were to file, or to become the subject of, a bankruptcy proceeding under the United States Bankruptcy Code or similar state insolvency laws, during the period of time prior to the transfer of the Initial Mortgage Servicing Rights to us, Ocwen Loan Servicing (as debtor-in-possession in the bankruptcy proceeding) or the bankruptcy trustee could reject the Purchase Agreement and attempt to stop payments to us of the servicing or other related fees with respect to the Rights to MSRs and terminate our right to acquire those Initial Mortgage Servicing Rights that we have not already acquired. In the event the security interest is declared unenforceable or ineffective, we would be subject to the risk that our claim for any damages from the rejection of the Purchase Agreement or the failure to pay us the servicing or other related fees with respect to the Rights to MSRs would be treated as a general unsecured claim for purposes of distributions from Ocwen Loan Servicing’s bankruptcy estate. In addition, even if the security interest is found to be valid and enforceable, if a bankruptcy court determines that the value of the collateral exceeds the underlying obligation to us, then Ocwen Loan Servicing (as debtor-in-possession in the bankruptcy proceeding) or the bankruptcy trustee would have the power (with the approval of the bankruptcy court) to modify the terms of the payment obligations to us, to substitute collateral securing the security interest or to reduce the collateral securing the security interest to a lesser amount deemed “adequate” to secure payment of our claim.

Payments made by Ocwen Loan Servicing to us could be avoided by a court under federal or state preference laws. If Ocwen Loan Servicing were to file, or to become the subject of, a bankruptcy proceeding under the United States Bankruptcy Code or similar state insolvency laws and our security interest is declared unenforceable or ineffective, payments previously made by Ocwen Loan Servicing to us pursuant to the Purchase Agreement may be recoverable on behalf of the bankruptcy estate as preferential transfers. A payment could constitute a preferential transfer if a court were to find that the payment was a transfer of an interest of property of Ocwen Loan Servicing that:

If the court were to determine that any payments were avoidable as preferential transfers, we would be required to return such payments to Ocwen Loan Servicing’s bankruptcy estate.

A sale of Mortgage Servicing Assets or other assets could be re-characterized as a pledge of such assets in a bankruptcy proceeding. If Ocwen Loan Servicing’s transfer to us of Mortgage Servicing Assets or any other asset transferred pursuant to the Purchase Agreement were considered to be a sale of such assets, then such assets would not be part of Ocwen Loan Servicing’s bankruptcy estate. Ocwen Loan Servicing (as debtor-in-possession in the bankruptcy proceeding) or the bankruptcy trustee might assert in a bankruptcy proceeding, however, that mortgage servicing rights or any other asset transferred to us pursuant to the Purchase Agreement were not sold to us but were merely pledged to us as security for

Ocwen Loan Servicing’s obligation to repay amounts paid by us to Ocwen Loan Servicing pursuant to the Purchase Agreement. If such assertion were successful, all or part of the Mortgage Servicing Assets or any other asset transferred to us pursuant to the Purchase Agreement would constitute property of the bankruptcy estate of Ocwen Loan Servicing, and our rights against Ocwen Loan Servicing would be those of a secured creditor, and not those of an owner, of such assets. Although we will take steps to properly create and perfect a security interest in the assets we have purchased or may purchase in the future pursuant to the Purchase Agreement in case such purchase is re-characterized as a secured financing, the validity or priority of the security interest could be challenged. See above under “—The validity or priority of our security interest in the Initial Mortgage Servicing Rights could be challenged in a bankruptcy proceeding of Ocwen Loan Servicing, and the Purchase Agreement could be rejected in such proceeding” for a description of the risks associated with such security interest.

Payments made to us by Ocwen Loan Servicing, or obligations incurred by it, could be avoided by a court under federal or state fraudulent conveyance laws. Ocwen Loan Servicing (as debtor-in-possession in the bankruptcy proceeding) or the bankruptcy trustee could also attempt to claim that a sale of Rights to MSRs or sale of mortgage servicing rights or other assets by Ocwen Loan Servicing to us was a fraudulent conveyance. Under the United States Bankruptcy Code and similar state insolvency laws, payments made, or obligations incurred, could be voided if Ocwen Loan Servicing, at the time it made such payment or incurred such obligation: (a) received less than reasonably equivalent value or fair consideration for such transfer or incurrence; and (b) either (i) was insolvent at the time of, or was rendered insolvent by reason of, such transfer or incurrence; (ii) was engaged in, or was about to engage in, a business or transaction for which the assets remaining with Ocwen Loan Servicing were an unreasonably small capital; or (iii) intended to incur, or believed that it would incur, debts beyond its ability to pay such debts as they mature. If any transfer or incurrence is determined to be a fraudulent conveyance, Ocwen Loan Servicing (as debtor-in-possession in the bankruptcy proceeding) or the bankruptcy trustee would be entitled to recover such transfer or to avoid the obligation previously incurred.

The Subservicing Agreement could be rejected in a bankruptcy proceeding. If Ocwen Loan Servicing were to file, or to become the subject of, a bankruptcy proceeding under the United States Bankruptcy Code or similar state insolvency laws, Ocwen Loan Servicing (as debtor-in-possession in the bankruptcy proceeding) or the bankruptcy trustee could reject the Subservicing Agreement and terminate Ocwen Loan Servicing’s obligation to service the mortgage loans underlying one or more of the mortgage servicing rights that we have acquired and that Ocwen Loan Servicing has agreed to service for us pursuant to the Subservicing Agreement. As we will not have and in the future do not expect to have the employees, servicing platforms or technical resources necessary to service mortgage loans, if the Subservicing Agreement is rejected we will need to either engage an alternate subservicer, which may not be readily available on acceptable terms or at all, or negotiate a new servicing arrangement with Ocwen Loan Servicing, which would presumably be on less favorable terms to us. Any claim we have for damages arising from the rejection of the Subservicing Agreement would be treated as a general unsecured claim for purposes of distributions from Ocwen Loan Servicing’s bankruptcy estate.

Any of the foregoing events might have a material adverse effect on our financial condition or operating results and our ability to pay dividends, which could cause delays or reductions in payments on our ordinary shares or a reduction in the value of our ordinary shares.

We intend to declare and pay regular cash dividends on our ordinary shares. We intend to distribute at least 90% of our net income over time to our shareholders on a monthly basis, although we are not required by law to do so. Since the closing of our initial public offering, we have paid monthly dividends of $0.10 per ordinary share (except during the month of March in which we paid a pro-rated amount of $0.08 per ordinary share). The following table sets forth the record and payment dates of dividends that have been declared by our Board of Directors, but are unpaid:

While we intend to continue to pay monthly dividends at this rate, we may not be able to do so in the future. Our dividend policy is subject to the discretion of our Board of Directors and will depend, among other things, on cash available for distributions, general economic and business conditions, our strategic plans and prospects, our financial results and condition, contractual, legal and regulatory restrictions on the declaration and payment of dividends by us and such other factors as our Board of Directors considers to be relevant.

Our ability to declare and pay dividends is dependent on cash flow generated by our subsidiaries because we are a holding company.

We are a holding company with no operations. Our subsidiaries own all of the assets that generate income and are expected to own any additional assets we purchase in the future. Therefore, our ability to declare and pay dividends is dependent on the generation of cash flow by our subsidiaries and their ability to make such cash available to us, by dividend, distribution or otherwise. Our subsidiaries may not be able or permitted to make distributions to enable us to make dividend payments in respect of our ordinary shares. Each of our subsidiaries is a distinct legal entity formed and governed under the laws of the State of Delaware, and, under certain circumstances, legal and contractual restrictions may limit our ability to obtain cash from them. The subsidiary that holds the Mortgage Servicing Assets and that will hold any additional Mortgage Servicing Assets we may acquire in the future, is a Delaware limited liability company. Delaware law provides that a limited liability company is prohibited from making a distribution of cash or other property to a member to the extent that, at the time of and after giving effect to the distribution, the limited liability company’s liabilities exceed the fair value of its assets, subject to certain exceptions. In addition, while our subsidiaries currently are not subject to any contractual restrictions with respect to the payment of dividends, any future financing or other arrangements that our subsidiaries enter into could limit their ability to make distributions to us. In the event that we do not receive distributions from our subsidiaries, we may be unable to make dividend payments on our ordinary shares.

Our business model and the execution of our business strategy is highly dependent upon the members of our senior management team. The loss of the services of any of our senior executives or key employees could delay or prevent us from executing our business strategy and could significantly and negatively affect our business.

Our senior management team will also devote a portion of its time to performing certain functions for Ocwen pursuant to the professional services agreement, which we refer to as the “Ocwen Professional Services Agreement” throughout this prospectus, that we entered into with Ocwen. This will detract from the amount of time these executives have available to focus on our business.

In the future, we may need to hire additional personnel to meet the demands of our business, including any changes to our business strategy or operations due to a failure to obtain consents needed to transfer mortgage security rights on a timely basis or at all. The number of available, qualified personnel in the mortgage servicing industry may be limited, and the lack of qualified personnel may delay our ability to execute our business model as planned.

The continued economic slowdown and/or continued deterioration of the housing market could increase delinquencies and defaults on the mortgage loans underlying the mortgage servicing rights we acquire, which would negatively affect our operating results.

The residential mortgage market in the United States has experienced and may continue to experience a variety of difficulties and challenging economic conditions. Housing prices in many parts of the United States have declined or stopped appreciating after extended periods of significant appreciation. Any further deterioration of the U.S. housing market and declines in home prices could result in increased delinquencies or defaults on the mortgage loans underlying the mortgage servicing rights we acquire.

During any period in which the borrower is not making payments on a mortgage loan, the servicer under substantially all pooling and servicing agreements is required to advance its funds to meet contractual principal and interest remittance requirements for the securitization trust that owns the mortgage loans, pay property taxes and insurance premiums, process foreclosures and maintain, repair and market foreclosed real estate properties.

If the economy slows and/or the housing market continues to deteriorate, our operating results would be adversely affected in the following ways:

Interest Income and Servicing Fee Revenue. Because we will recognize interest income and, if and when legal title to any mortgage servicing right is transferred to us, servicing fee revenue as principal and interest payments are collected from the borrowers on the mortgage loans underlying our Mortgage Servicing Assets and as delinquent loans are resolved, an increase in delinquencies would reduce the interest income and servicing fee revenue that we recognize.

Expenses. An increase in servicing advances outstanding relative to the amount of the unpaid principal balance of the mortgage loans underlying our Mortgage Servicing Assets could result in substantial strain on our financial resources because growth of outstanding servicing advances relative to the unpaid principal balance of mortgage loans would increase financing costs with no offsetting increase in interest income or servicing fee revenue, thus reducing profitability. If servicing advances increase to a level where we are unable to fund additional servicing advances, we may not be able to fulfill our obligations under the Purchase Agreement to purchase the servicing advances that Ocwen Loan Servicing is required to make pursuant to the pooling and servicing agreements related to the Initial Mortgage Servicing Rights, or our obligations to fund servicing advances under those pooling and servicing agreements for which we are the servicer. As a result, the Purchase Agreement could be terminated, and we could lose the interest income or servicing fee revenue associated with our Rights to MSRs or be terminated as servicer under any affected pooling and servicing agreements and lose the interest income or servicing fee revenue associated with the mortgage servicing rights, as applicable.

Valuation of Mortgage Servicing Assets. Defaults on mortgage loans will decrease the value of the associated notes receivable and Mortgage Servicing Assets. In addition, future default rates that exceed current estimates may result in higher amortization and a reduction in the value of our Mortgage Servicing Assets such that interest income or servicing fee revenue may decline and amortization and interest expense may increase.

A significant increase in prepayment speeds would reduce the unpaid principal balance of the mortgage loans underlying our Mortgage Servicing Assets and could adversely affect our operating results.

Prepayment speeds significantly affect our business. Prepayment speed is the measurement of how quickly borrowers pay down the unpaid principal balance of their loans or how quickly loans are otherwise brought current, modified, liquidated or charged off. Prepayment speeds, which are presently driven primarily by involuntary liquidations of subprime and Alt-A mortgage loans, have a significant impact on our servicing fees, our expenses and the valuation of our Mortgage Servicing Assets as follows:

Servicing Fees. If prepayment speeds increase, our servicing fees will decline more rapidly than estimated because of the greater than expected decrease in the unpaid principal balance of the mortgage loans on which servicing fees are based.

Expenses. Amortization of Mortgage Servicing Assets will be our largest operating expense. Since we amortize Mortgage Servicing Assets in proportion to total expected income over the life of the Mortgage Servicing Assets, an increase in prepayment speeds will lead to increased amortization expense as we revise downward our estimate of total expected income.

Valuation of Mortgage Servicing Assets. We base the price we pay for Mortgage Servicing Assets and the rate of amortization of those assets on, among other things, our projection of the cash flows from the related pool of mortgage loans. Our expectation of prepayment speeds is a significant assumption underlying those cash flow projections. If prepayment speeds are significantly greater than expected, the carrying value of our Mortgage Servicing Assets could exceed their estimated fair value. If the carrying value of our Mortgage Servicing Assets exceeds their fair value, we will be required to record a non-cash charge for impairment or unrealized loss, which would have a negative impact on our operating results.

If we are unable to maintain the unpaid principal balance of the mortgage loans underlying our Mortgage Servicing Assets at an adequate level through the acquisition of additional Mortgage Servicing Assets or otherwise, we would likely reevaluate our long-term business strategy if such conditions persist for a period of approximately five years after the date of our initial public offering. One possible outcome of this evaluation would be to sell our remaining Mortgage Servicing Assets some time thereafter and use the proceeds to pay a liquidating distribution to our shareholders. In any such event, our shareholders may not be able to recover the full value of their investment in our ordinary shares.

We may not be able to successfully compete for the acquisition of mortgage servicing rights, which could adversely affect our business.

Our success depends, in large part, on our ability to acquire additional mortgage servicing rights on terms consistent with our business and economic model. We expect to compete with independent mortgage loan servicers, private equity firms, hedge funds and other large financial services companies in acquiring additional mortgage servicing rights. Many of our anticipated competitors are significantly larger than we are, have access to greater capital and other resources, are capable of financing servicing advances at a lower interest rate and may have other advantages over us. In addition, some of our competitors may have higher risk tolerances or different risk assessments, which could lead them to offer higher prices than we would be willing to pay for these assets.

Under most pooling and servicing agreements the approval or consent of third parties will be required to transfer mortgage servicing rights to us. We have not yet been able to obtain all the Required Third Party Consents necessary to transfer legal ownership of the Initial Mortgage Servicing Rights to us, primarily because we do not have a demonstrated operating history as a mortgage servicer. No specific time frame was provided by the rating agency that has not provided consent. We believe it will be at least six months to one year before the rating agency will consider issuing a rating confirmation, although the rating agency may not issue the rating confirmation during this time frame or at all. Until such time as we establish an operating history as a mortgage servicer, we may need to continue to structure purchases of mortgage

servicing assets as purchases of Rights to MSRs to the extent that the related pooling and servicing agreements require approvals or consents that we are unable to obtain. As a result, other potential purchasers of mortgage servicing rights may be more attractive to sellers if the sellers believe that they can obtain any necessary third party approvals and consents to transfer the mortgage servicing rights to these potential purchasers more easily than if they were transferring them to us. Even if other potential purchasers are not viewed by sellers to be a more attractive alternative, sellers may request a higher purchase price from us if we are not able to obtain the necessary approvals and consents prior to the completion of the sale of mortgage servicing rights. This may negatively affect our ability to acquire additional mortgage servicing rights or limit the available mortgage servicing rights or types of mortgage servicing rights that we are able to offer to acquire.

We also do not intend to build a mortgage servicing platform. Therefore, we may not be an attractive buyer for those sellers of mortgage servicing rights that prefer to sell mortgage servicing rights and their mortgage servicing platform in a single transaction. Since our business model does not currently include acquiring and running servicing platforms, to engage in a bid for such a business we would need to find a partner to acquire and run the platform or we would need to incur additional costs to shut down the acquired servicing platform. The need to work with a partner in these situations increases the complexity of such potential acquisitions, and Ocwen Loan Servicing may be unwilling to act as servicer or subservicer on any mortgage servicing rights acquisition we want to execute. The complexity of these transactions and the additional costs incurred by us if we were to execute future acquisitions of this type could adversely affect our future operating results.

We may be unable to maintain the unpaid principal balance of the mortgage loans underlying our Mortgage Servicing Assets at an adequate level, which may cause administrative expenses to increase relative to our equity base.

The unpaid principal balance of the mortgage loans underlying our Mortgage Servicing Assets will decline naturally over time. In addition, the unpaid principal balance of the mortgage loans underlying our Mortgage Servicing Assets could be reduced in connection with any loan put-backs. A loan put-back is a request by the securitization trustee for the originator of the loan or the party that transferred the loan to the securitization to repurchase the loan at par. These requests generally arise because the originator or transferor is found to have breached representations or warranties made at the time of origination or securitization. We have acquired additional Mortgage Servicing Assets in flow purchases in order to maintain a sufficient level of unpaid principal balance of the mortgage loans underlying our Mortgage Servicing Assets relative to the size of our operations, and intend to continue to acquire additional Mortgage Servicing Assets in the future either through flow purchases or bulk purchases such as the Planned Acquisition. Given competition in our industry for the acquisition of mortgage servicing rights and the continued decrease in new securitizations, primarily as a result of the lack of new originations of subprime and Alt-A mortgage loans, a sufficient number of subprime and Alt-A mortgage servicing rights may not be available at attractive prices or at all. If we are unable to acquire new Mortgage Servicing Assets, the amount of servicing fees we receive, which is based on the unpaid principal balance of the loans underlying our Mortgage Servicing Assets, may decline as mortgage loans are repaid or liquidated. As a result, our future expenses may increase disproportionately to the size of our equity base, which will negatively affect our profitability and may limit our ability to pay dividends in the future. If we are unable to make additional acquisitions of mortgage servicing rights within a period of approximately five years, we would likely reevaluate our long-term business strategy at such time. One possible outcome of this evaluation would be to sell our remaining Mortgage Servicing Assets some time thereafter and use the proceeds to pay a liquidating distribution to our shareholders. In any such event, our shareholders may not be able to recover the full value of their investment in our ordinary shares.

Our assumptions in determining the purchase price for Mortgage Servicing Assets may be inaccurate or the basis for such assumptions may change, which could adversely affect our results of operations.

To the extent that we purchase Mortgage Servicing Assets in the future, our success will be highly dependent upon accurate pricing of such Mortgage Servicing Assets. In determining the purchase price for Mortgage Servicing Assets, we will make assumptions regarding the following:

If any of our assumptions regarding the Mortgage Servicing Assets that we acquire are inaccurate or the basis for such assumptions change, the price we pay to acquire Mortgage Servicing Assets may prove to be too high. This could result in lower than expected profitability or a loss. We do not intend to obtain an opinion from an independent valuation firm of the fairness from a financial point of view of the price of any future acquisitions, including the Planned Acquisition.

We do not intend to operate a mortgage servicing platform and will need to engage subservicers to service the mortgage loans underlying any mortgage servicing rights we ultimately acquire. We may not be able to engage subservicers on terms that are favorable to us or at all.

We do not intend to operate a mortgage servicing platform. Our success will depend on our ability to enter into subservicing agreements with high-quality mortgage servicers, like Ocwen Loan Servicing, to service the mortgage loans underlying any mortgage servicing rights we ultimately acquire.

The terms of any subservicing agreement will be negotiated with the subservicer prior to the acquisition of the related mortgage servicing rights. It is unlikely that the term of any subservicing agreement we enter into will match the life of any mortgage servicing rights that we ultimately acquire and therefore will need to be renewed. As a result, the terms of any new subservicing agreement or renewal will depend on the economic environment and the costs of providing subservicing at that time. For example, the initial term of the Subservicing Agreement will expire on March 5, 2018. Therefore, we will need to renegotiate the terms of this agreement before these assets wind down. In addition, the terms of any future subservicing agreements, including those we enter into with Ocwen Loan Servicing, may not be similar to the terms of the Subservicing Agreement.

We may be unable to obtain sufficient capital or obtain or maintain the servicer advance financing necessary to meet the financing requirements of our business, which could adversely affect our operating results and our ability to pay dividends in the future.

We will need access to capital to finance servicing advances relating to our Mortgage Servicing Assets we may acquire and to fund future acquisitions of additional Mortgage Servicing Assets and associated servicing advances, including the Planned Acquisition.

Servicing Advances. If delinquencies increase with respect to the mortgage loans underlying our Mortgage Servicing Assets, we will require more funding than we currently expect, which may not be available to us on favorable terms or at all. We currently meet our servicing advance financing requirements through the Servicing Advance Facility, which expires in August 2013. In order to meet our servicing advance financing requirements with respect to the Planned Acquisition Assets, we need to obtain additional advance financing. We expect to amend our existing Servicing Advance Facility Agreements to allow for additional borrowing from Barclays Bank Plc to finance the acquisition of the servicing advances related to the Planned Acquisition Assets and the servicing advances we have

previously acquired, or, alternatively, we may amend our existing Servicing Advance Facility Agreements to issue new debt securities backed by the servicing advances related to the Planned Acquisition Assets and the servicing advances we have previously acquired. We are currently in discussions with Barclays Bank Plc regarding the amendments to the Servicing Advance Facility Agreement, but we do not have a firm commitment for the additional servicing advance financing in connection with the Planned Acquisition. Under normal market conditions, mortgage servicers typically have been able to renew or refinance liquidity facilities for mortgage servicing rights. However, during the economic crisis that began in 2007, there were periods of time when mortgage servicers were unable to renew these facilities. Borrowing conditions have improved since that time; however, market conditions at the time of any renewal or refinancing may not enable us to renew or refinance our advance financing facilities or obtain additional facilities on favorable terms or at all. Ocwen Loan Servicing will not have any obligation to us to fund any servicing advances that we are required to purchase or fund. Our inability to obtain adequate financing to fund servicing advances would result in the termination of our mortgage servicing rights under the applicable pooling and servicing agreements or the loss of our Rights to MSRs pursuant to the Purchase Agreement, as applicable. If, for this reason, our mortgage servicing rights or Rights to MSRs are terminated or lost, as applicable, we will bear the full economic impact of this termination or loss without the right to seek indemnification from Ocwen Loan Servicing.

Mortgage Servicing Assets. The unpaid principal balance of the mortgage loans underlying our Mortgage Servicing Assets will decline naturally over time, and we intend to acquire new Mortgage Servicing Assets to maintain the scale of our operations. To maintain our goal of distributing at least 90% of our net income over time to our shareholders on a monthly basis, we will limit the amount of unused cash and borrowing capacity. This means that we may need access to the capital markets to fund acquisitions of additional Mortgage Servicing Assets and associated servicing advances. The global capital markets are currently experiencing a period of disruption and instability that began in 2007 and that has most recently resulted in the downgrading of government debt in several European States. Our ability to fund future acquisitions may depend on our ability to access the capital markets and on the strength and performance of these markets. In addition, the provisions of our Articles of Association restrict our ability to issue and sell additional ordinary shares at a price below our then current net asset value per share without first obtaining the prior approval of holders of at least a majority of the outstanding ordinary shares voted with respect to such approval. This restriction may make it more difficult for us to raise capital through the issuance of additional ordinary shares.

Ocwen Loan Servicing or we may be terminated as servicer under a pooling and servicing agreement. Servicer termination events or events of default have been triggered in pooling and servicing agreements representing approximately 81% of the unpaid principal balance of the mortgage loans underlying the Initial Mortgage Servicing Rights as of June 30, 2012, and the parties to the related securitization transactions could enforce their rights against Ocwen Loan Servicing or us at any time as a result.

Ocwen Loan Servicing will remain obligated to service the mortgage loans underlying the Rights to MSRs that we acquire in accordance with the terms of the related pooling and servicing agreements during the period of time prior to the transfer of the Initial Mortgage Servicing Rights to us. If and when we acquire legal ownership of the Initial Mortgage Servicing Rights, we will be obligated to service these mortgage loans in accordance with the terms of the related pooling and servicing agreements. We will also be obligated to service the mortgage loans relating to any other mortgage servicing rights that we may acquire in the future. Pursuant to the Subservicing Agreement, we have engaged Ocwen Loan Servicing to service the mortgage loans underlying the Initial Mortgage Servicing Rights upon our receipt of the Required Third Party Consents, and may engage Ocwen Loan Servicing or other subservicers to service the mortgage loans underlying any other mortgage servicing rights that we acquire in the future. We intend to engage Ocwen Loan Servicing to service the mortgage loans underlying the Planned Acquisition Assets. Any default by Ocwen Loan Servicing relating to its obligations as servicer under any pooling and servicing agreement related to the Initial Mortgage Servicing Rights during the period of time prior to the transfer of the Initial

Mortgage Servicing Rights to us, or as subservicer pursuant to the Subservicing Agreement following any such transfer, or the failure of any other servicer to perform its obligations or to satisfy the other requirements under the terms of the pooling and servicing agreement related to any of our mortgage servicing rights, could result in a servicer termination event or servicer event of default under such agreement. In addition, if we fail to perform any of our obligations as servicer with respect to our mortgage servicing rights that we did not delegate to a subservicer, such as making servicing advances or remitting funds to the securitization trust in accordance with the terms of the applicable pooling and servicing agreement, it will result in a servicer termination event or servicer event of default. If we fail to purchase the servicing advances that Ocwen Loan Servicing is required to make pursuant to the related pooling and servicing agreements prior to the transfer of such Initial Mortgage Servicing Rights to us, Ocwen Loan Servicing may be in breach of its obligations to make such servicing advances, which will also result in a servicer termination event or servicer event of default. If such servicer termination event or servicer event of default is a result of our breach of a representation under the Purchase Agreement, or our actions or our failure to act, we could owe an indemnification payment to Ocwen Loan Servicing for the amount of its losses resulting from such servicer termination event or servicer event of default.

Many pooling and servicing agreements for subprime and Alt-A mortgage loans also contain servicer termination events or events of default based upon the number of delinquent loans or the loss performance of the related mortgage loans. We believe that these servicer termination events or events of default have been triggered in most pooling and servicing agreements for subprime and Alt-A mortgage loans that were entered into prior to 2008. A significant number of the pooling and servicing agreements related to the Initial Mortgage Servicing Rights (representing approximately 81% of the unpaid principal balance of the mortgage loans underlying such Initial Mortgage Servicing Rights as of June 30, 2012) contain servicer termination events or events of default of this type, all of which have been triggered. We expect that a significant number of the pooling and servicing agreements related to the mortgage servicing assets that we intend to acquire in the Planned Acquisition will also contain servicer termination events or events of default that have been triggered. We believe that one possible reason that the parties to pooling and servicing agreements that have the right to terminate a servicer upon the occurrence of such servicer termination events or events of default have not exercised such rights may be because the transfer of servicing could lead to a disruption of servicing activities which could lead to increased delinquencies and decreased recovery on the underlying mortgage loans, which could result in a loss on the related mortgage-backed securities. While the parties to the securitization transactions have not exercised their right to terminate Ocwen Loan Servicing as servicer under the pooling and servicing agreements related to the Initial Mortgage Servicing Rights, they could enforce their rights against Ocwen Loan Servicing prior to the transfer of such Initial Mortgage Servicing Rights to us, or against us if and when we acquire the Initial Mortgage Servicing Rights at a later date. In addition, most of the pooling and servicing agreements related to the Initial Mortgage Servicing Rights also contain servicer termination events or events of default that require the servicer to maintain a tangible net worth of between $15 million and $50 million, and we expect the pooling and servicing agreements related to the mortgage servicing assets acquired in the Planned Acquisition to have similar terms.

If a servicer termination event or event of default has occurred under a pooling and servicing agreement, the servicer may be terminated without any right to compensation for its loss from the trustee for the securitization trust, other than the right to be reimbursed for any outstanding servicing advances as the related loans are brought current, modified, liquidated or charged off. So long as we are in compliance with our obligations under the Subservicing Agreement and the Purchase Agreement, if Ocwen Loan Servicing is terminated as servicer, or if we are terminated as servicer when Ocwen Loan Servicing is acting as subservicer, we will have the right to receive an indemnification payment from Ocwen Loan Servicing as servicer or subservicer, even if such termination related to servicer termination events or events of default existing at the time of the Initial Ocwen Purchase, including with respect to those servicer termination events or events of default that have been triggered in pooling and servicing agreements representing approximately 81% of the unpaid principal balance of the mortgage loans underlying the Initial Mortgage Servicing Rights as of June 30, 2012. See “—A downgrade in Ocwen Loan Servicing’s servicer rating and

that of any future subservicer with whom we enter into subservicing agreements could have an adverse effect on our business, financial condition or results of operations.” If Ocwen Loan Servicing or we are terminated as servicer with respect to a pooling and servicing agreement and Ocwen Loan Servicing is unable to make any resulting indemnification payments to us, if any, it may have a material adverse effect on our operating results and our ability to pay dividends and may make it more difficult for us to acquire additional mortgage servicing rights in the future.

If our assumptions regarding subprime and Alt-A borrower refinancing options in a declining interest rate environment prove incorrect, the unpaid principal balance of the mortgage loans underlying Mortgage Servicing Assets could decline, which would adversely affect our operating results.

In preparing our business and economic model, we made a number of assumptions about future servicing fees, expenses, assets and liabilities relating to our Mortgage Servicing Assets. In connection with this process, we made certain assumptions about likely prepayment speeds on the mortgage loans underlying our Mortgage Servicing Assets in a declining interest rate environment. These assumptions were based on our view that subprime and Alt-A borrowers would have limited refinancing options even in such an environment. Refinancings, also known as voluntary prepayments, are a small component of total prepayments, with involuntary prepayments and liquidations being the larger component. If subprime and Alt-A borrowers were able to refinance their mortgage loans in a declining interest rate environment, prepayment speeds would increase, leading to lower unpaid principal balance on the mortgage loans underlying our Mortgage Servicing Assets, which would adversely affect our operating results.

If our assumptions regarding the rates at which delinquent mortgages loans will become performing or be resolved through loan modifications are higher than the actual rates, then the unpaid principal balance of the mortgage loans underlying our Mortgage Servicing Assets will decline more quickly than we have anticipated, and the amount and duration of outstanding servicing advances would increase, which would adversely affect our operating results.

In preparing our business plan and economic model, we made assumptions about the likely delinquency rates for the mortgage loans underlying our Mortgage Servicing Assets, and the rates at which those delinquent mortgage loans would reperform, either through a payment of past due amounts or through permitted modifications of the terms of these mortgage loans. Delinquent mortgage loans that become performing either because of a payment of past due amounts or a permitted loan modification remain outstanding as part of the aggregated unpaid principal balance of the underlying mortgage loans and therefore will continue to produce revenue for us over their remaining term. The servicer is also able to reimburse itself for outstanding servicing advances when delinquent mortgage loans reperform. On the other hand, when delinquent mortgage loans are resolved through foreclosure, the unpaid balance of such loans ceases to be a part of the aggregate unpaid principal balance when the related mortgage properties are foreclosed on and liquidated. Also, delinquent mortgage loans resolved through foreclosure generally require more servicing advances over a longer time horizon prior to reimbursement as compared with servicing advances made with respect to delinquent mortgage loans that are resolved through repayment or permitted loan modifications. A faster amortization of the aggregate unpaid principal balance of the underlying mortgage loans and an increase in the amount and duration of outstanding servicing advances would adversely affect our operating results.

Our hedging strategies may not be successful in mitigating the risks associated with changes in interest rates.

We are exposed to interest rate risk to the extent that the interest rates on our financing facilities are tied to a variable rate index and when we refinance those obligations or enter into new facilities. We use and plan to continue to use various derivative and other financial instruments to provide a level of protection against interest rate risks. Although we have executed a hedging strategy aimed to neutralize our net exposure to interest rate increases on our floating rate match funded liabilities and intend to

continue to do so, no hedging strategy can completely protect us. Our hedging activities may include entering into interest rate swaps, caps and floors, options to purchase these items and futures and forward contracts. Our hedging decisions are determined in light of the facts and circumstances existing at the time and may differ from our current hedging strategy. Any significant change in interest rates could result in a significant margin call, which would require us to provide the counterparty with additional cash collateral. Any such margin call, or any decline in interest rates that results in the diminution in value of our hedges, could harm our liquidity, profitability, financial condition and business prospects.

If we are named in legal proceedings involving mortgage servicers, the costs of litigation could adversely affect our financial results.

The residential mortgage loan servicing industry is extremely litigious, and we could be subject to allegations of illegality in connection with our own operations or the business practices of subservicers acting on our behalf, including lawsuits related to their billing and collections practices, modification protocols or foreclosure practices and other loss mitigation efforts associated with the mortgage loans they service on our behalf. Ocwen Loan Servicing has informed us that it is currently a defendant in several lawsuits regarding its servicing activities, including putative class actions, and we face the risk that we could be added as a defendant in any of these actions that relate to servicing the Aggregate Purchased Assets.

Ocwen has informed us that it has received a Civil Investigative Demand (“CID”) from the Federal Trade Commission (the “FTC”), requesting documents and information concerning various loan servicing activities. Recently Ocwen was informed that this CID had been referred to the Bureau of Consumer Financial Protection (“BCFP”), a new federal entity responsible for administering and enforcing the laws and regulations for consumer financial products and services, such as residential mortgage loans. In addition, a coalition of state attorneys general is conducting an industry-wide investigation into certain acts and practices concerning the mortgage foreclosure process. The FTC, the BCFP and such attorneys general have not taken any action against Ocwen, but it is possible that Ocwen could receive notifications of alleged wrongdoing or be named as a defendant with respect to these matters or other litigation and regulatory matters.

We could be added as a defendant or investigated in any of these matters. We also may be added as a defendant in future lawsuits brought against Ocwen, Ocwen Loan Servicing or other servicers regarding their servicing practices relating to our mortgage servicing rights. Defending ourselves against lawsuits or adverse legal judgments against us may require that we pay significant legal fees, settlement costs, damages, penalties or other charges, or undertake remedial actions pursuant to administrative orders or court-issued injunctions, any of which could adversely affect our financial results.

Risks Related to Our Relationship with Ocwen, Other Subservicers and Related Parties

We are dependent on Ocwen Loan Servicing to act as a servicer with respect to the mortgage loans underlying the Initial Mortgage Servicing Rights.

We are dependent on Ocwen Loan Servicing to service the mortgage loans underlying the Initial Mortgage Servicing Rights until such time, if at all, as legal ownership of the Initial Mortgage Servicing Rights are transferred to us. A failure of Ocwen Loan Servicing to perform its servicing obligations under a related pooling and servicing agreement could result in the termination of Ocwen Loan Servicing as servicer. If Ocwen Loan Servicing is terminated, it will no longer receive the servicing fees or any other proceeds with respect to such Initial Mortgage Servicing Right that it owes to us. If this occurs, we will only have recourse against Ocwen Loan Servicing and will not have any recourse against the related trustee or securitization trust because we will not have legal title to the mortgage servicing rights at that time. If Ocwen Loan Servicing is unable to make any applicable indemnification payments owed to us, we could lose the entire value of the related Rights to MSRs, which would adversely affect our operating results and our ability to pay dividends. We will be exposed to this risk with respect to future purchases of Rights to MSRs from Ocwen Loan Servicing.

We will be dependent on Ocwen Loan Servicing and any other third parties who we engage as subservicer, to perform substantially all of our servicing obligations relating to any mortgage servicing rights we own.

For those mortgage servicing rights that we may ultimately acquire, including the Initial Mortgage Servicing Rights if and when they are transferred to us and those we may acquire in the Planned Acquisition, we will be contractually obligated to service the loans underlying those mortgage servicing rights. We will not have and in the future do not expect to have the employees, servicing platforms or technical resources necessary to service the loans. We have engaged Ocwen Loan Servicing to service the mortgage loans underlying the Initial Mortgage Servicing Rights. In addition, we expect to engage Ocwen Loan Servicing or other subservicers to service the mortgage loans underlying any mortgage servicing rights we acquire in the future, including in the Planned Acquisition. If we are unable to engage a subservicer, we will be unable to perform our obligations under the related pooling and servicing agreements, which would lead to our termination as servicer without payment. If for any reason Ocwen Loan Servicing is no longer able to act as subservicer or any other subservicer is no longer able to act as subservicer with respect to any other mortgage servicing rights we may acquire, an alternate subservicer may not be readily available on acceptable terms or at all, which would adversely affect our operating results.

Under the Subservicing Agreement and the initial subservicing supplement, we will be required to pay Ocwen Loan Servicing fees for servicing the mortgage loans underlying the Initial Mortgage Servicing Rights. If we fail to pay Ocwen Loan Servicing any monthly base fee or monthly performance based incentive fee that is past due, subject to certain grace periods and other conditions specified in the Subservicing Agreement and the initial subservicing supplement, Ocwen Loan Servicing may cease to service the related mortgage loans until such fees have been paid to Ocwen Loan Servicing. Any failure of Ocwen Loan Servicing to service such mortgage loans could result in a servicer termination event or event of default, which could cause us to be terminated as servicer without any right to compensation for the loss of any affected mortgage servicing right.

Failure by Ocwen Loan Servicing and future subservicers to comply with applicable laws and regulations may adversely affect our business.

Mortgage servicing is subject to extensive and evolving federal, state and local laws and regulations. Mortgage servicers are contractually obligated to service the mortgage loans underlying mortgage servicing rights in compliance with such laws and regulations. Failure by Ocwen Loan Servicing or any subservicer we engage in the future to comply with such laws and regulations may result in a servicer termination event or an event of default of the servicer under the related pooling and servicing agreements. If a servicer termination event or event of default has occurred under a pooling and servicing agreement, we may be terminated as servicer (or Ocwen may be terminated as servicer under a pooling and servicing agreement related to an Ocwen Mortgage Servicing Right prior to its transfer to us). As a result, we may not receive any compensation for the loss of the related Mortgage Servicing Assets, other than the right to be reimbursed for any outstanding servicing advances as the related loans are brought current, modified, liquidated or charged off. In addition, the failure of Ocwen Loan Servicing or our other subservicers to comply with these laws and regulations in connection with servicing mortgage loans underlying our mortgage servicing rights, could possibly lead to civil and criminal liability, loss of licensing, damage to our reputation in the industry, fines and penalties and litigation, including class action lawsuits or administrative enforcement actions. Any of these outcomes would have a material adverse effect on our operating results and may make it more difficult for us to acquire additional mortgage servicing rights in the future.

Failure by Ocwen Loan Servicing and future subservicers to ensure that servicing advances comply with the terms of the pooling and servicing agreements may have a material adverse effect on our operating results and our ability to pay dividends in the future.

Although we are responsible for purchasing or funding servicing advances, Ocwen Loan Servicing is responsible for ensuring that servicing advances associated with Ocwen Mortgage Servicing Rights are made in compliance with the terms of the related pooling and servicing agreements and its advance and stop advance policies so that the servicing advances with respect to a mortgage loan do not exceed the amount expected to be collected with respect to such mortgage loan. Future subservicers will have similar responsibilities with respect to future mortgage servicing rights we may acquire. Servicing advances that are improperly made may not be eligible for financing under an advance financing facility and may not be reimbursable by the related securitization trust or other owner of the mortgage loan, which would reduce our liquidity and may cause us to suffer a loss.

If we have to replace Ocwen Loan Servicing, we may not be able to find a suitable replacement, which could adversely affect our financial results.

We intend to continue to capitalize on the servicing capabilities of Ocwen Loan Servicing for the Aggregate Purchased Assets and future acquisitions of Mortgage Servicing Assets. We view Ocwen Loan Servicing as superior relative to many other servicers in terms of cost, management experience, technology infrastructure and platform scalability. If for any reason Ocwen Loan Servicing is no longer able to act as subservicer for us with respect to mortgage servicing rights that we have acquired, or if we decide to require Ocwen Loan Servicing to transfer their mortgage servicing rights to a successor servicer after the occurrence of an event of default under the Purchase Agreement, with respect to the Initial Mortgage Servicing Rights prior to the transfer of legal ownership to us, or under the Subservicing Agreement, we will need to find a replacement subservicer.

Although there are other entities that may be willing to act as subservicer (or as a successor servicer to Ocwen Loan Servicing with respect to the Ocwen Mortgage Servicing Rights) for us, they may not be of the same quality as Ocwen Loan Servicing, or they may not be willing to act on the same economic terms as Ocwen Loan Servicing. Even if we hire an entity of equal quality and on the same economic terms, there is typically a temporary degradation in the quality of servicing when the servicing of a mortgage loan is transitioned from one subservicer to another. As a result, if we have to replace Ocwen Loan Servicing, our operating results would be adversely affected.

If Ocwen Loan Servicing or any future subservicer fails to adequately perform its loss mitigation obligations, we could be required to make additional servicing advances and the time period for collecting servicing advances may extend.

Ocwen Loan Servicing and any future subservicers that we engage will be required to service the mortgage loans in accordance with specified standards and employ loss mitigation techniques to reduce the probability that borrowers will default on their loans and to minimize losses when defaults occur. These loss mitigation techniques may include the modification of mortgage loan rates and maturities. If Ocwen Loan Servicing or future subservicers fail to adequately perform their loss mitigation obligations under these agreements, we could be required to purchase or fund servicing advances in excess of those that we might otherwise have had to purchase or fund, and the time period for collecting servicing advances may extend. Any increase in servicing advances or material increase in the time to resolution of a defaulted loan could result in increased financing costs to us and adversely affect our liquidity and net income.

Ocwen Loan Servicing may not be able to satisfy its indemnification obligations under the Purchase Agreement and the Subservicing Agreement.

Under the Purchase Agreement, Ocwen Loan Servicing is obligated to indemnify us for losses suffered by us resulting from a breach of Ocwen Loan Servicing’s representations, warranties or covenants relating

to any Mortgage Servicing Assets we purchase from it for any of its acts or omissions relating to such Mortgage Servicing Assets occurring prior to the transfer of legal ownership of the related mortgage servicing rights to us.

Under the Subservicing Agreement, Ocwen Loan Servicing is obligated to indemnify us for losses suffered by us resulting from Ocwen Loan Servicing’s failure to observe or perform any of its duties, obligations or covenants, any acts or omissions of Ocwen Loan Servicing or its agents, any breach of its representations and warranties, or any willful malfeasance, bad faith, fraud or negligence in the performance of its duties under the Subservicing Agreement. If we incur a loss for which indemnification may be available against Ocwen Loan Servicing under the Purchase Agreement or the Subservicing Agreement, as the case may be, and if Ocwen Loan Servicing does not have sufficient financial resources available to satisfy its obligation to indemnify us or if it is determined that Ocwen Loan Servicing is not required to provide indemnification, we may experience a loss which could have a material adverse effect on our operations and financial condition.

A downgrade in Ocwen Loan Servicing’s servicer rating and that of any future subservicer with whom we enter into subservicing agreements could have an adverse effect on our business, financial condition or results of operations.

Moody’s, Standard & Poor’s and Fitch rate many mortgage servicers, including Ocwen Loan Servicing. These ratings are subject to change in the future without notice. Servicer ratings are important to our ability to finance servicing advances. For example, the amount of debt that is permitted to be outstanding under the advance financing facility that we have assumed in connection with the Initial Ocwen Purchase will decrease with downgrades in the servicer ratings of Ocwen Loan Servicing. Downgrades in the servicer ratings of any future subservicers we engage could also affect the terms of advance financing facilities that we may enter into in the future, as lenders may require higher interest rates or may limit the amount of money that we can borrow to finance servicing advances if our subservicers’ ratings are deemed by the lenders to be too low. In addition, some pooling and servicing agreements may also require that the servicer or subservicer maintain specified servicer ratings. The failure to maintain the specified rating may cause the termination of the servicer under such pooling and servicing agreements. Any such downgrade could have an adverse effect on our business, financing activities, financial condition or results of operations. In December 2011, Fitch downgraded Ocwen Loan Servicing’s servicer ratings from RPS2 to RPS3 and RSS2 to RSS3 and maintained “rating watch negative.” On February 21, 2012, Ocwen Loan Servicing received a notice that servicer termination events or events of default had been triggered for certain pooling and servicing agreements underlying the Initial Mortgage Servicing Rights. This downgrade caused the cumulative percentage of the pooling and servicing agreements with triggered servicer termination events or events of default based on the number of delinquent mortgage loans, loss performance of the related mortgage loans or servicer ratings downgrades to increase from 83% to 89% on June 30, 2012. The Servicing Advance Facility Agreements provide that any pooling and servicing agreement that has triggered servicer termination events or events of default due to the downgrade of Ocwen Loan Servicing’s servicer rating by a rating agency do not lose eligibility for advance financing under the existing advance financing facility, unless and until Ocwen Loan Servicing or we receive a notice of termination of servicing.

Our ability to continue borrowing under our liquidity facilities could be adversely affected by events relating to Ocwen, Ocwen Loan Servicing and future subservicers with whom we enter into subservicing agreements.

Under the existing advance financing facility that we have assumed from Ocwen Loan Servicing, our ability to continue borrowing may be limited by the occurrence of certain events relating to Ocwen and Ocwen Loan Servicing. For example, if Ocwen undergoes a change of control or if Ocwen Loan Servicing fails to satisfy certain liquidity tests, this would constitute an early amortization event and the lenders under that facility may cease funding our servicing advances. If Ocwen defaults under a full-recourse term loan, including Ocwen’s senior secured term loan, that would constitute an event of default under our existing

advance financing facility. If one of these events occurs prior to the facility’s expiration date in August 2013 and our lenders cease funding our servicing advances, we may not be able to arrange for a replacement facility to finance the servicing advances that we are obligated to continue purchasing from Ocwen Loan Servicing. Our inability to obtain adequate financing to fund servicing advances would result in the termination of our mortgage servicing rights under the applicable pooling and servicing agreement or our Rights to MSRs pursuant to the Purchase Agreement, as applicable. See “Description of Servicing Advance Facility Agreements and Advance Financing Facility.”

If we are required to register under the Investment Company Act, our ability to conduct our business could be materially adversely affected, and you could suffer losses.

We are not registered, and do not intend to register, as an investment company under the Investment Company Act of 1940 (the “Investment Company Act”). Under Section 3(a)(1)(A) of the Investment Company Act, a company is not deemed to be an “investment company” if it neither is, nor holds itself out as being, engaged primarily, nor proposes to engage primarily, in the business of investing, reinvesting or trading in securities. Under Section 3(a)(1)(C) of the Investment Company Act, a company is not deemed to be an “investment company” if it (1) neither is engaged, nor proposes to engage, in the business of investing, reinvesting, owning, holding or trading in securities and (2) does not own or propose to acquire “investment securities” having a value exceeding 40% of the value of its total assets (exclusive of government securities and cash items) on an unconsolidated basis (the “40% test”). “Investment securities” excludes (A) government securities, (B) securities issued by employees’ securities companies and (C) securities issued by majority-owned subsidiaries which are not investment companies, and which are not relying on the exception from the definition of investment company under Section 3(c)(1) or 3(c)(7) of the Investment Company Act.

We intend to conduct our operations directly and through wholly or majority-owned operating subsidiaries, so that we and each of our subsidiaries is not an investment company under the Investment Company Act. We believe that neither we nor our operating subsidiaries will be considered an investment company under Section 3(a)(1)(A) of the Investment Company Act because neither we nor our operating subsidiaries will engage primarily, or hold ourselves or our operating subsidiaries out as being engaged primarily, in the business of investing, reinvesting or trading in securities. Rather, we, through our operating subsidiaries, will be primarily engaged in the non-investment company business of these subsidiaries, namely the business of purchasing or otherwise acquiring mortgage servicing rights, Rights to MSRs, and associated servicing advances and engaging and managing one or more high-quality residential mortgage loan servicers to service the pools of mortgage loans underlying the mortgage servicing rights. We intend to structure the special purpose entities that we establish in connection with match funded advance financing facilities to rely on the investment company exemption provided to certain structured financing vehicles by Rule 3a-7 promulgated pursuant to the Investment Company Act.

We monitor our business strategy and assets to ensure continuing and ongoing compliance with the Investment Company Act. A change in our business strategy or in the value or classification of any of our assets could cause us or one or more of our wholly owned or majority owned operating subsidiaries to fall within the definition of “investment company” and negatively affect our ability to maintain our exemption from regulation under the Investment Company Act. For example, if we are unable to obtain legal ownership of mortgage servicing rights either due to the unwillingness of necessary consent parties or demands that do not fit within our business strategy (such as building or purchasing a servicing platform), we may be required to make changes to our business strategy and operations to avoid us or any of our operating subsidiaries being required to register as an investment company under the Investment Company Act. Changes to our business plan and operations could include amendment or modification of the Purchase Agreement or Subservicing Agreement, providing for increased control by us over Ocwen Loan Servicing’s servicing activities with respect to mortgage loans underlying our Rights to MSRs, or acquiring mortgage servicing rights which do not require the confirmation of a rating agency or consent of another party that has indicated that it would not provide a ratings confirmation or consent to the transfer of the mortgage servicing rights to us, such as private-label mortgage servicing rights that are not rated by

particular rating agencies or mortgage servicing rights that are related to loans that are guaranteed or securitized by the U.S. government or the GSEs. We may also be unable to sell assets we would otherwise want to sell and may need to sell assets we would otherwise wish to retain. In addition, we may have to acquire additional income- or loss-generating assets that we might not otherwise have acquired or may have to forgo opportunities to acquire Rights to MSRs that we would otherwise want to acquire and would be important to our business strategy.

If, however, we or any of our subsidiaries are deemed to be an investment company under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted, among other things, which would materially adversely affect our business, financial condition and results of operations and our ability to pay dividends. For example, because affiliate transactions are generally prohibited under the Investment Company Act, we would not be able to enter into transactions with any of our affiliates if we are required to register as an investment company, and we may be required to terminate the Purchase Agreement, the Subservicing Agreement, the Ocwen Professional Servicing Agreement, the Altisource Administrative Services Agreement and any other agreements with affiliates and forgo opportunities to purchase additional Rights to MSRs from Ocwen Loan Servicing as currently contemplated. If we or one of our subsidiaries were deemed to be an investment company, we may also seek exemptive relief from the Securities and Exchange Commission (“SEC”), which could impose significant costs on our business. If we or any of our subsidiaries were required to register as an investment company but failed to do so, the unregistered entity would be prohibited from engaging in business, and criminal and civil actions could be brought against such unregistered entity. In addition, the contracts of such unregistered entity would be unenforceable unless a court required enforcement, and a court could appoint a receiver to take control of such unregistered entity and liquidate the unregistered entity, which could lead to losses to our shareholders.

We may require the cooperation of Ocwen Loan Servicing to maintain our exemption from registration as an investment company under the Investment Company Act.

We may be required to make changes to our business strategy and operations to avoid the registration of us or any of our operating subsidiaries as an investment company under the Investment Company Act. Such changes could include amendment or modification of the Purchase Agreement or Subservicing Agreement or changes to the structure of future arrangements with Ocwen Loan Servicing. For example, we may be required to change the structure of future acquisitions of Mortgage Servicing Assets or the degree of control exercised by us over Ocwen Loan Servicing’s servicing activities with respect to mortgage loans underlying our Rights to MSRs. Although Ocwen Loan Servicing is contractually obligated in the Purchase Agreement to use all commercially reasonable efforts to make any changes necessary to our relationship and agreements so that we and our operating subsidiaries will not be required to register as an investment company, the necessary changes may not be acceptable to us, or Ocwen Loan Servicing may disagree that it is required to make the particular changes under the terms of the Purchase Agreement. In addition, the changes that we implement to our business strategy or operations may not be sufficient to avoid registration as an investment company or may have a negative effect on our results of operations and financial condition. If we are required to register under the Investment Company Act, our ability to conduct our business could be materially adversely affected, and you could suffer losses.

We could have conflicts of interest with Ocwen, and our officers and directors also could have conflicts of interest due to their relationships with us and Ocwen, that could be resolved in a manner adverse to us.

We have entered into various agreements with subsidiaries of Ocwen and we intend to enter into further agreements with Ocwen or its subsidiaries in the future. Certain of our executive officers and directors may have conflicts of interest with respect to such agreements and other matters due to their past and/or current relationships with Ocwen.

William C. Erbey, the Chairman of our Board of Directors, is, and for the foreseeable future is expected to be, the Chairman of the Board of Directors of Ocwen. As a result, he has obligations to us as well as to Ocwen and may have conflicts of interest with respect to matters potentially or actually involving or affecting us and Ocwen. Mr. Erbey is the beneficial owner of approximately 13% of Ocwen’s common stock as of June 30, 2012. Richard Delgado, who is our Treasurer, owns 12,291 shares of Ocwen common stock. In addition, in connection with their resignation from their positions at Ocwen at the time of the closing of our initial public offering, the Ocwen Board of Directors extended the post-termination exercise period of options to purchase 625,000 shares of Ocwen common stock held by Mr. Van Vlack, of which 605,000 shares are unexercised, 90,197 shares of Ocwen common stock held by Mr. Delgado and 20,000 shares of Ocwen common stock held by Michael J. McElroy, who is our General Counsel, so that the options may be exercised during the original term of the option, subject to any existing vesting schedules of those options. The options would otherwise have expired following the date of such officers’ resignation from Ocwen. This ownership of Ocwen common stock and options to purchase Ocwen common stock could create or appear to create potential conflicts of interest when our Board of Directors or our executive officers are faced with decisions that involve Ocwen.

Matters that could give rise to conflicts between us and Ocwen include, among other things:

We will seek to manage these potential conflicts through oversight by the independent members of our Board of Directors. Such measures may not be effective, and we may not be able to resolve all conflicts with Ocwen. In addition, the resolution of any such conflicts may be less favorable to us than if we were dealing with an unaffiliated third party.

We could have conflicts with Altisource that could be resolved in a manner adverse to us.

We have entered into an administrative services agreement with Altisource, which we refer to as the “Altisource Administrative Services Agreement” throughout this prospectus. We also lease office space in the United States from Altisource. Certain of our executive officers and directors may be subject to conflicts of interest with respect to such agreements and other matters due to their past and/or current relationships with Altisource.

William C. Erbey, the Chairman of our Board of Directors, is the Chairman of the Board of Directors of Altisource. As a result, he has obligations to us as well as to Altisource and may have conflicts of interest with respect to matters potentially or actually involving or affecting us and Altisource. Mr. Erbey is the beneficial owner of approximately 25% of Altisource’s common stock as of June 30, 2012. This ownership could create or appear to create potential conflicts of interest when our Board of Directors is faced with decisions that involve Altisource.

We manage these potential conflicts through oversight by the independent members of our Board of Directors. Such measures may not be effective, and we may not be able to resolve all conflicts with Altisource. In addition, the resolution of any such conflicts may be less favorable to us than if we were dealing with an unaffiliated third party.

The Purchase Agreement, Subservicing Agreement, Ocwen Professional Services Agreement and Altisource Administrative Services Agreement were not negotiated on an arm’s-length basis and the terms may not be as favorable to us as if such agreements were negotiated with unaffiliated third parties.

Because William C. Erbey, our founder and Chairman of our Board of Directors, is also the Chairman of the Board of Directors and largest shareholder of Ocwen and the Chairman of the Board of Directors and largest shareholder of Altisource, the terms of our agreements with them have not been negotiated on an arm’s-length basis, and any agreements we enter into with them in the future may not be negotiated on an arm’s-length basis. As a result, certain terms of these agreements may not be as favorable to us as agreements negotiated with unaffiliated third parties. Furthermore, we may choose not to enforce, or to enforce less vigorously, our rights under such agreements because of our desire to maintain our ongoing relationships with Ocwen and Altisource.

We rely on an exception to the rules of The NASDAQ Stock Market which require that all members of the Nominating and Corporate Governance Committee of our Board of Directors be independent, and, as a result, our shareholders will not have the protections afforded by this corporate governance requirement.

The rules of The NASDAQ Stock Market provide that, under limited and exceptional circumstances, a director who is not a current officer or employee (or a family member of an officer or employee) of our company, but who does not otherwise meet the independence criteria established by The NASDAQ Stock Market, may serve as a member of the Nominating and Corporate Governance Committee if such membership is in the best interests of our company and our shareholders. Our Board of Directors has elected to rely on this limited exception in appointing Mr. Erbey as the Chairman of the Nominating and Corporate Governance Committee. As a result, our shareholders will not have the same protections afforded to shareholders of companies that do not rely on this exception.

Ocwen Loan Servicing’s failure to perform adequately in external audits could have an adverse effect on our business, financial condition or results of operations.

We do not intend to build a mortgage servicing platform and will depend on Ocwen Loan Servicing to maintain the controls and processes needed to perform adequately on external audits, including in connection with reporting obligations under the pooling and servicing agreements and SEC reporting obligations, and other agreed-upon procedures for the advance financing facility that we assumed in connection with the Initial Ocwen Purchase and will depend on Ocwen Loan Servicing and possibly other subservicers to perform these functions for mortgage servicing rights we acquire in the future. The failure to pass such audits and to remediate issues identified could lead to a downgrade in Ocwen Loan Servicing’s servicer rating, which could have the consequences described above under “—A downgrade in Ocwen Loan Servicing’s servicer rating and that of any future subservicer with whom we enter into subservicing agreements could have an adverse effect on our business, financial condition or results of operations” or could lead to interruptions in, or the loss of, our advance financing.

A failure in Ocwen Loan Servicing or any of our future subservicers’ operational systems or information technology and security infrastructure, or those of third parties, could disrupt our business, result in the disclosure of confidential information, damage our reputation and cause losses.

Our business is substantially dependent on Ocwen Loan Servicing’s and any future subservicers’ ability to process and monitor a large number of transactions, many of which are complex, across numerous and diverse real estate markets. These transactions often must adhere to the terms of the underlying pooling and servicing agreements, as well as legal and regulatory standards governing the use and disclosure of sensitive consumer information. Ocwen Loan Servicing and any future subservicers are responsible for developing and maintaining operational systems and information technology and security infrastructure, which is challenging and depends, in part, on the ability of our subservicers, including

Ocwen Loan Servicing, to monitor third-party service providers to whom our subservicers outsource information technology and data processing functions. Ocwen Loan Servicing and any future subservicers’ financial, accounting, data processing, security or other operating systems and facilities may fail to operate properly or become disabled as a result of events that are wholly or partially beyond their control, such as a spike in transaction volume, cyber attacks or unforeseen catastrophic events, adversely affecting their ability to process these transactions.

In addition, Ocwen Loan Servicing’s and any future subservicers’ operations rely on the secure processing, storage and transmission of confidential and other information in their computer systems and networks and those of outsourced third-party service providers. Although Ocwen Loan Servicing’s and any future subservicers are expected to take protective measures and endeavor to modify them as circumstances warrant, their computer systems, software and networks may be vulnerable to unauthorized access, computer viruses or other malicious code, and other events that could have a security impact. Given the volume of transactions Ocwen Loan Servicing and any future subservicers will process and monitor, certain errors may be repeated or compounded before they are discovered and rectified. If one or more of such events occurs, this could potentially jeopardize confidential and other information processed and stored in, and transmitted through, the computer systems and networks of Ocwen Loan Servicing and any future subservicers, which could result in significant compliance and remediation losses, reputational damage and legal liabilities to us.

The expanding body of federal, state and local regulation and/or the licensing of mortgage servicers or other aspects of our business may increase our costs.

The servicing of residential mortgage loans is subject to extensive federal, state and local laws, regulations and administrative decisions. The volume of new or modified laws and regulations has increased in recent years and is likely to continue to increase. For example, on August 10, 2012, the BCFP proposed new regulations that would require mortgage servicers in part to provide enhanced statements to borrowers, provide notice of interest rate changes, correct errors and obtain information for borrowers, apply payments promptly, apply “force-placed” insurance only when they reasonably believed borrower’s policies had lapsed, provide greater access to servicer personnel and records, engage in outreach to delinquent borrowers with foreclosure alternatives, and allow borrowers to appeal denials of loan modifications and delay foreclosure proceedings while those applications or appeals are pending. If implemented, these rules or other new laws and regulations affecting the mortgage servicing industry could increase the cost of servicing loans. This may force us to have to pay increased fees to Ocwen Loan Servicing or other servicers when we renew our agreements with them at the end of their terms or enter into new subservicing agreements. In addition, our ability to purchase Mortgage Servicing Assets may be limited if we cannot engage mortgage servicers at fee rates that allow us to achieve the objectives of our business model. We will also become subject to licensing in some states if and when we become an owner of mortgage servicing rights. If the number of states that require the licensing of owners of mortgage servicing rights increases, or the states that require licensing impose additional obligations on the owners of mortgage servicing rights, our costs could increase. Any of these outcomes may adversely affect our results of operations or financial condition.

Regulatory scrutiny regarding foreclosure processes could lengthen foreclosure timelines or increase prepayment speeds which would negatively impact our liquidity and profitability.

Various state banking regulators and attorneys general have publicly announced that they have initiated inquiries into banks and servicers regarding compliance with legal procedures in connection with mortgage foreclosures, including the preparation, execution, notarization and submission of documents, principally affidavits, filed in connection with foreclosures. The process to foreclose on properties securing residential mortgage loans is governed by state law and varies by state. For the most part, these inquiries

have arisen from the 23 so-called “judicial states”; namely, those jurisdictions that require lenders or their servicers to go through a judicial proceeding to obtain a foreclosure order. In these judicial states, lenders or their servicers are generally required to provide to the court the mortgage loan documents and a sworn and notarized affidavit of an officer of the lender or its servicer with respect to the facts regarding the delinquency of the mortgage loan and the foreclosure. These affidavits are generally required to be based on the personal knowledge of the officer that executes the affidavit after a review of the mortgage loan documents. Regulators from “quasi-judicial states” and “non-judicial states,” however, have made similar inquiries as well. In these states, lenders or their servicers may foreclose on a defaulted mortgage loan by delivering to the borrower a notice of the foreclosure sale without the requirement of going through a judicial proceeding, unless the borrower contests the foreclosure or files for bankruptcy. If the borrower contests the foreclosure or files for bankruptcy in a non-judicial state, court proceedings, including affidavits similar to those provided in the judicial states, will generally be required.

In connection with the recent governmental scrutiny of foreclosure processes and practices in the industry, the attorneys general of certain states and certain members of the U.S. Congress and state legislatures have called for a temporary moratorium on mortgage foreclosures, although no state has implemented a general foreclosure moratorium on mortgage loan servicers to date. In addition, some individual municipalities have begun to enact laws that may increase the time that it currently takes to complete a foreclosure or prevent foreclosures in such jurisdictions. Such moratoria or other action by federal, state or municipal government bodies, regulators or courts could increase the length of time needed to complete the foreclosure process. For example, the average number of days for Ocwen Loan Servicing to complete a foreclosure action during 2011 increased by 133 days in judicial foreclosure states and 32 days in traditional non-judicial foreclosure states as compared to 2010 averages. In the first six months of 2012, foreclosure timelines increased by an additional 102 days in judicial foreclosure states and 34 days in traditional non-judicial foreclosure states as compared to 2011 averages.

When a mortgage loan is in foreclosure, we are generally required to continue to advance delinquent principal and interest to the securitization trust and to also make advances for delinquent taxes and insurance and foreclosure costs and the upkeep of vacant property in foreclosure to the extent we determine that such amounts are recoverable. These servicing advances are generally recovered when the delinquency is resolved. Foreclosure moratoria or other actions that lengthen the foreclosure process will increase the amount of servicing advances we are required to make, lengthen the time it takes for us to be reimbursed for such advances and increase the costs incurred during the foreclosure process. In addition, advance financing facilities generally contain provisions that limit the eligibility of servicing advances to be financed based on the length of time that servicing advances are outstanding, and, as a result, an increase in foreclosure timelines could further increase the amount of servicing advances that we need to fund with our own capital. Such increases in foreclosure timelines could increase our need for capital to fund servicing advances which would increase our interest expense, delay the collection of interest income or servicing fee revenue until the foreclosure has been resolved and, therefore, reduce the cash that we have available to pay our operating expenses or to pay dividends.

Governmental bodies may also impose regulatory fines or penalties as a result of our subservicers’ foreclosure processes or impose additional requirements or restrictions on such activities which could increase their operating expenses. For instance, in April 2011 the Office of the Comptroller of the Currency (“OCC”), the Board of Governors of the Federal Reserve System (“FRB”) and the Federal Deposit Insurance Corporation (“FDIC”) entered into consent orders with the fourteen largest mortgage servicers to address alleged deficient practices in residential mortgage loan servicing and foreclosure processing. Under the consent orders, these mortgage servicers are required to submit written remediation plans addressing enterprise-wide risk management, internal audit and compliance programs for their residential mortgage loan servicing, loss mitigation and foreclosure activities. Remedial measures required under these consent orders and written plans may include, among other measures, revisions to servicing operations and remediation of all financial injury to borrowers caused by any errors, misrepresentations or other deficiencies identified in the parties’ recent foreclosures. Ocwen Loan Servicing is not subject to OCC, FRB

or FDIC regulation, and therefore it has not been subject to any consent decree initiated by these federal regulatory agencies. Nonetheless, Congress or federal or state regulatory agencies could subject it and other independent servicers to similar consent decrees, enforcement actions or investigations. In general, these regulatory developments with respect to foreclosure practices could result in increases in the amount of servicing advances and the length of time to recover servicing advances, fines or increases in operating expenses, and decreases in the advance rate and availability of financing for servicing advances. This would lead to increased borrowings, reduced cash and higher interest expense which could negatively impact our liquidity and profitability, and although the Subservicing Agreement and the Purchase Agreement relating to the Purchased Assets and the subservicing supplement relating to the Aggregate Purchased Assets contain adjustment mechanisms that would reduce the amount of incentive fees payable to Ocwen Loan Servicing if servicing advances exceed pre-determined amounts, those fee reductions may not be sufficient to cover the expenses resulting from longer foreclosure timelines.

On February 9, 2012, the Department of Housing and Urban Development and attorneys general representing 49 states and the District of Columbia announced a $25 billion settlement (the “Joint Federal-State Servicing Settlement”) with the five largest mortgage servicers—Bank of America Corporation, JP Morgan Chase & Co., Wells Fargo & Company, Citigroup Inc. and Ally Financial Inc. (formerly GMAC)—regarding servicing and foreclosure issues. In addition to assessing monetary penalties which are required to be used to provide financial relief to borrowers (including refinancing and principal write-downs), the Joint Federal-State Servicing Settlement requires these servicers to implement changes in how they service mortgage loans, handle foreclosures and provide information to bankruptcy courts. The federal-state regulators may seek to expand the participation in the Joint Federal-State Servicing Settlement or similar settlements to other servicers and could seek to include Ocwen Loan Servicing. Implementation of the servicing practices associated with the Joint Federal-State Servicing Settlement could result in increased costs for servicing mortgage loans generally, which could lead to higher subservicing fees being charged to us for subsequent mortgage servicing assets we acquire. In addition, the implementation of a refinancing or principal write-down program like that contemplated by the Joint Federal-State Servicing Settlement could result in an increase in prepayment speeds and negatively affect our earnings and operating results.

GSE initiatives and other actions may affect mortgage servicing generally and future servicing fees in particular.

On January 17, 2011, the Federal Housing Finance Agency announced that it has instructed Fannie Mae and Freddie Mac to study possible alternatives to the current residential mortgage servicing and compensation system used for single-family mortgage loans. A discussion paper containing alternative mortgage servicing compensation proposals was released at the direction of the Federal Housing Finance Agency on September 27, 2011. It requested comment on a number of proposals, including a proposal implementing a “fee for services” model of servicer compensation, in which Fannie Mae or Freddie Mac would pay the servicer a fee for servicing mortgage loans based on the delinquency status of each mortgage loan. Although the mortgage loans underlying the Initial Mortgage Servicing Rights or other pooling and servicing agreements that have already been executed are not subject to any changes implemented by Fannie Mae or Freddie Mac, because of the significant role of Fannie Mae and Freddie Mac in the secondary mortgage market, it is possible that any changes they implement could become prevalent in the mortgage servicing industry generally going forward. Other industry stakeholders or regulators may also implement or require changes in response to the perception that the current mortgage servicing practices and compensation do not serve broader housing policy objectives well. These proposals are still evolving. To the extent the GSEs implement reforms that materially affect the market for conforming loans, there may be secondary effects on the subprime and Alt-A markets, which may have a material adverse effect on the creation of new mortgage servicing rights or the economics or performance of any mortgage servicing rights or Rights to MSRs that we acquire.

We expect to be treated as a PFIC for U.S. federal income tax purposes, which could subject U.S. Holders to adverse U.S. federal income tax consequences.

We expect to be treated as a PFIC for U.S. federal income tax purposes. A PFIC generally is a foreign corporation if either at least (i) 75% of its gross income is “passive income,” or (ii) 50% of the gross value of its assets is attributable to assets that produce, or are held for the production of, passive income. If you are a U.S. Holder and do not make a QEF election with respect to us or a mark-to-market election with respect to our ordinary shares, you will be subject to adverse tax consequences, including deferred tax and interest charges with respect to certain distributions on our ordinary shares, any gain realized on a disposition of our ordinary shares and certain other events. The effect of these adverse tax consequences could be materially adverse to you. If you are a U.S. Holder and make a valid, timely QEF election for us, you will not be subject to those adverse tax consequences, but could recognize taxable income in a taxable year with respect to our ordinary shares in excess of any distributions that we make to you in that year, thus giving rise to so-called “phantom income” and to a potential out-of-pocket tax liability. We will provide information to all electing shareholders needed to comply with the QEF election. If you are a U.S. Holder and make a valid, timely mark-to-market election with respect to our ordinary shares, you will recognize as ordinary income or loss in each year that we are a PFIC an amount equal to the difference between your basis in our ordinary shares and the fair market value of the ordinary shares, thus also possibly giving rise to phantom income and a potential out-of-pocket tax liability. Ordinary loss generally is recognized only to the extent of net mark-to-market gains previously included in income. U.S. Holders should be aware that although we currently do not have any subsidiaries that are PFICs, we may form or acquire a subsidiary that is a PFIC in the future. In such event, U.S. Holders will also need to make the QEF election with respect to each such subsidiary in order to avoid the adverse tax consequences described above. We intend to provide all information necessary for U.S. Holders to make the QEF election with respect to any of our subsidiaries that may be classified as a PFIC. U.S. Holders should also be aware that the mark-to-market election generally will not be available with respect to any our subsidiaries that is a PFIC, rendering such election less beneficial to U.S. Holders than the QEF election. See “Material Cayman Islands and United States Federal Income Tax Considerations—United States Federal Income Taxation—Consequences to U.S. Holders—Passive Foreign Investment Company Status and Related Tax Consequences.”

If the IRS determines that we are not a PFIC, and you previously paid taxes pursuant to a QEF election or a mark-to-market election, you may pay more taxes than you legally owe.

While we expect to be treated as a PFIC for U.S. federal income tax purposes, our tax counsel has indicated that there is a risk that we will not be treated as such. If the U.S. Internal Revenue Service (“IRS”) makes a determination that we are not a PFIC in the future, then you may have paid more taxes than you legally owed due to a QEF or mark-to-market election. If you do not, or are not able to, file a refund claim before the expiration of the applicable statute of limitations, you will not be able to claim a refund for those taxes.

Distributions that we pay to individual U.S. Holders will not be eligible for taxation at reduced rates.

Distributions made to a U.S. Holder that is an individual will not be eligible for taxation at reduced tax rates generally applicable (for tax years beginning before January 1, 2013) to dividends paid by certain U.S. corporations and “qualified foreign corporations.” The more favorable rates applicable to regular corporate dividends could cause individuals to perceive investment in our ordinary shares to be relatively less attractive than investment in the shares of other corporations, which could adversely affect the value of our ordinary shares.

If we are treated as engaged in a trade or business in the United States, we would become subject to U.S. federal income taxation, which could adversely affect our business and result in decreased cash available for distribution to our shareholders.

The IRS could assert that we are engaged in a U.S. trade or business because we own mortgage servicing rights and are participating in the servicing of U.S. mortgage loans, either directly or through agents such as Ocwen Loan Servicing. If, contrary to our expectations, we are treated as engaged in a trade or business in the United States, we would be subject to U.S. federal income taxation on a net income basis, which would adversely affect our business and result in decreased cash available for distribution to our shareholders. More specifically, if we are treated as engaged in a trade or business in the United States, the portion of our net income, if any, that was “effectively connected” with such trade or business would be subject to U.S. federal income taxation at a maximum rate of 35%, as opposed to our expectation that only income of our subsidiary that is taxed as a corporation for U.S. federal income tax purposes will be subject to U.S. federal income tax at such rate. In addition, we would be subject to the U.S. federal branch profits tax on our effectively connected earnings and profits at a rate of 30%.

The Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation and there is no taxation in the nature of inheritance tax or estate duty. Dividend payments are not subject to withholding tax in the Cayman Islands. There are no other taxes likely to be material to our company levied by the government of the Cayman Islands, except for stamp duties that may be applicable on instruments executed in, or after execution brought within the jurisdiction of, the Cayman Islands. The tax treatment of our business in the Cayman Islands is subject to change. Thus, we may become subject to Cayman Islands taxation in the future.

Our shares are listed on The NASDAQ Global Select Market under the symbol “HLSS.” However, an active trading market for our ordinary shares may not be sustained. Accordingly, your ability to sell ordinary shares when desired, or the prices that may be obtained for such shares, will depend on the existence and liquidity of an active trading market for our ordinary shares.

The market price and trading volume of our ordinary shares may be volatile, which could result in losses for our shareholders.

The market price of our ordinary shares may be highly volatile and could be subject to wide fluctuations. In addition, the trading volume of our ordinary shares may fluctuate and cause significant price variations to occur. If the market price of our ordinary shares declines significantly, you may be unable to resell your shares at or above your purchase price, if at all. Some of the factors that could negatively affect our share price or result in fluctuations in the price or trading volume of our ordinary shares include:

In addition, equity markets have experienced significant price and volume fluctuations that have affected the market prices for the securities of newly public companies for a number of reasons, including reasons that may be unrelated to our business or operating performance. These broad market fluctuations may result in a material decline in the market price of our ordinary shares, and you may not be able to sell your ordinary shares at prices you deem acceptable. In the past, following periods of volatility in the equity markets, securities class action lawsuits have been instituted against public companies. Such litigation, if instituted against us, could result in substantial cost and the diversion of management attention.

Sales of ordinary shares by us in the future could adversely affect the market price of our ordinary shares.

We expect that we will sell additional ordinary shares from time to time in the future primarily in connection with the acquisition of additional Rights to MSRs or mortgage servicing rights. Sales of additional ordinary shares by us for whatever reason may adversely affect the trading price of our ordinary shares and will dilute the percentage ownership of us by our then-existing shareholders, including shareholders that purchase in this offering.

Future sales of ordinary shares by our principal shareholder could cause our ordinary share price to decline.

In connection with our initial public offering, William C. Erbey entered into a written “lock-up” agreement providing, among other things, that he will not sell the ordinary shares he owns for a period of 18 months following the date of the pricing of our initial public offering without the prior written consent of Wells Fargo Securities, LLC. However, the lock-up agreement is subject to a number of specified exceptions. See “Underwriting.” Pursuant to a Registration Rights Agreement that we have entered into with Mr. Erbey, we have granted to Mr. Erbey demand registration rights, which he may exercise one time, and unlimited piggyback registration rights, which, subject to the applicable lock-up restrictions, may require us to register his ordinary shares beginning 18 months from the date of the pricing of our initial public offering. Upon expiration of the lock-up agreement, Mr. Erbey will be able to freely sell his ordinary shares.

If equity research analysts issue unfavorable commentary or downgrade our ordinary shares, the price of our ordinary shares could decline.

The trading price of our ordinary shares is affected by research and reports that equity research analysts publish about us, Ocwen or the mortgage servicing industry. We do not control these analysts. The price of our ordinary shares could decline if one or more equity analysts downgrade our ordinary shares or if analysts issue other unfavorable commentary or cease publishing reports about us, Ocwen or the mortgage servicing industry.

As a public company we incur significant costs and face demands on our management to comply with the SEC and stock exchange requirements.

As a public company with shares listed on a U.S. securities exchange, we need to comply with an extensive body of regulations, including provisions of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), regulations of the SEC and requirements of The NASDAQ Stock Market. These rules and regulations could result in substantial legal and financial compliance costs and make some activities more time-consuming and costly. In addition, we incur costs associated with our public company reporting requirements and maintaining directors’ and officers’ liability insurance. Furthermore, our management has increased demands on its time in order to ensure we comply with public company reporting requirements and the compliance requirements of the Sarbanes-Oxley Act, as well as any rules subsequently implemented by the SEC and the applicable stock exchange requirements of The NASDAQ Stock Market.

We are required by Section 404 of the Sarbanes-Oxley Act to evaluate the effectiveness of our internal controls by the end of fiscal 2013, and we may identify control deficiencies, which may be expensive to remediate, and could affect the ability of our auditor to issue an unqualified audit report, which could affect our share price.

As a U.S.-listed public company, we are required to comply with Section 404 of the Sarbanes-Oxley Act by December 31, 2013. Section 404 requires that a public company evaluate its internal control over financial reporting to enable management to report on, and the company’s independent auditors to audit as of the end of the next fiscal year, the effectiveness of those controls. During the course of our review, we may identify control deficiencies of varying degrees of severity, and we may incur significant costs to remediate those deficiencies or otherwise improve our internal controls. As a public company, we are required to report control deficiencies that constitute a “material weakness” in our internal control over financial reporting. Public companies are also required to obtain an audit report from their independent auditors regarding the effectiveness of their internal controls over financial reporting. If we fail to implement the requirements of Section 404 in a timely manner, we may be subject to sanctions or investigation by regulatory authorities, including the SEC or FINRA. Furthermore, if we discover a material weakness or our auditor does not provide an unqualified audit report when required, our share price could decline, our reputation could be significantly harmed and our ability to raise capital could be impaired. Management is not currently aware of any factors that could result in the determination that there is a material weakness in our internal controls.

We are a Cayman Islands exempted company and, because judicial precedent regarding the rights of shareholders is more limited under Cayman Islands law than under U.S. law, you may have less protection of your shareholder rights than you would under U.S. law.

Our corporate affairs are governed by Cayman Islands law and our Articles of Association. The rights of shareholders to take action against our directors, the rights of minority shareholders to institute actions and the fiduciary responsibilities of our directors to us are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from English common law, the latter of which has persuasive, but not binding, authority on a court in the Cayman Islands. The rights of our shareholders and the fiduciary responsibilities of our directors under Cayman Islands law are not as clearly established as

they would be under statutes or judicial precedent in the United States. In particular, the Cayman Islands has a less developed body of securities law than the United States. In addition, a Cayman Islands company may not have standing to initiate a shareholder derivative action before the federal courts of the United States. As a result, our shareholders may encounter more difficulty in protecting their interests against actions taken by our management or Board of Directors than they would as shareholders of a public company incorporated in the United States. See “Description of Share Capital—Differences in Corporate Law.”

We are a Cayman Islands exempted company, and it may be difficult for you to enforce judgments obtained in U.S. courts based on the civil liability provisions of the U.S. federal securities laws against us and our officers and directors. In addition, the courts of the Cayman Islands may not recognize or enforce judgments of U.S. courts against us or our directors and officers predicated upon the civil liability provisions of the securities laws of the United States or any state. Furthermore, Cayman Islands courts may not be competent to hear original actions brought in the Cayman Islands against us or our directors and officers predicated upon the securities laws of the United States or any state. See “Enforceability of Civil Liabilities.”

This prospectus contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, included in this prospectus, including, without limitation, statements regarding the assumptions we make about our business and economic model, our dividend policy, business strategy and other plans and objectives for our future operations, are forward-looking statements.

These statements include declarations regarding our management’s beliefs and current expectations. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “would,” “could,” “expects,” “plans,” “contemplate,” “anticipates,” “believes,” “estimates,” “predicts,” “projects,” “intend” or “continue” or the negative of such terms or other comparable terminology, although not all forward-looking statements contain these identifying words. These forward-looking statements are subject to inherent risks and uncertainties in predicting future results and conditions that could cause the actual results to differ materially from those projected in these forward-looking statements. Some, but not all, of the forward-looking statements contained in this prospectus include, among other things, statements about the following:

We have based these forward-looking statements largely on our current plans, intentions, expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. We may not actually achieve the plans, intentions or expectations

disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations described in the forward-looking statements that we make. We have included important factors in the cautionary statements included in this prospectus, particularly in the “Risk Factors” section, that we believe could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements that we make. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame, or at all. Our forward-looking statements do not reflect the potential impact of any future acquisitions of Mortgage Servicing Assets that we may make.

You should read this prospectus and the documents that we reference in this prospectus and have filed as exhibits to the registration statement of which this prospectus is a part completely and with the understanding that our actual future results may be materially different from what we expect. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or any sale of our ordinary shares. Unless required by law, we undertake no obligation to publicly update or revise any forward-looking statements to reflect new information or future events or otherwise.

Unless otherwise indicated, information contained in this prospectus concerning the mortgage servicing industry, including our general expectations and market position and market opportunity is based on information from various sources (including government and industry publications, surveys, analyses, valuations and forecasts and our internal research), assumptions that we have made (which we believe are reasonable based on those data from such sources and other similar sources) and our knowledge of the markets for our services. The projections, assumptions and estimates of our future performance and the future performance of the mortgage servicing industry are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described under “Risk Factors” and elsewhere in this prospectus. These and other factors could cause results to differ materially from those expressed in the estimates included in this prospectus.

We estimate that the net proceeds to us from this offering will be approximately $ million after deducting underwriting discounts and commissions and estimated offering expenses that we must pay.

We intend to use the proceeds of this offering to acquire the Planned Acquisition Assets from Ocwen Loan Servicing in the Planned Acquisition. We are in discussions with Ocwen Loan Servicing regarding the composition of the Planned Acquisition Assets, but have not yet identified the specific assets we will acquire. We expect the Planned Acquisition Assets will have similar characteristics to those Mortgage Servicing Assets acquired in the Ocwen Transactions, and that the related servicing advances, both current and future, will be eligible for funding under the Servicing Advance Facility Agreements. We have not entered into any agreement to acquire the Planned Acquisition Assets, but we expect the Planned Acquisition will be subject to the terms and conditions of the Purchase Agreement and a supplement thereto containing terms specific to the Planned Acquisition. See “Prospectus Summary–The Planned Acquisition.” We intend to use the remaining proceeds, if any, for working capital and general corporate purposes.

We expect to amend our existing Servicing Advance Facility Agreements to allow for additional borrowing from Barclays Bank Plc to finance the acquisition of the servicing advances related to the Planned Acquisition Assets and the servicing advances we have previously acquired, or, alternatively, we may amend our existing Servicing Advance Facility Agreements to issue new debt securities backed by the servicing advances related to the Planned Acquisition Assets and the servicing advances we have previously acquired. We are currently in discussions with Barclays Bank Plc regarding the amendments to the Servicing Advance Facility Agreement, but we do not have a firm commitment for additional servicing advance financing in connection with the Planned Acquisition. This offering is not conditioned upon the closing of the Planned Acquisition.

Upon the consummation of the Planned Acquisition, we expect that Ocwen Loan Servicing will remain the named servicer of each mortgage servicing right until such time as the Required Third Party Consents are obtained. We are continuing to pursue the Required Third Party Consents, and we will automatically obtain legal ownership of the acquired mortgage servicing rights without any additional payment to Ocwen Loan Servicing if and when we obtain the Required Third Party Consents.

We intend to declare and pay monthly cash dividends over time on our ordinary shares with the income generated from net operating cash flows. We intend to distribute at least 90% of our net income over time to our shareholders, although we are not required by law to do so. Dividends are payable to holders of record of our ordinary shares on the last business day of each such month, subject to all applicable laws, and will be paid on the tenth day of the immediately following month, or the first business day thereafter if such payment date falls on a weekend or holiday.

Since our initial public offering, we paid the following dividends, on a per share basis:

The following table sets forth the record and payment dates of dividends that have been declared by our Board of Directors, but are unpaid:

Our Board of Directors has the right to rescind any declared, but unpaid dividends at any time prior to the applicable dividend payment date.

Our dividend policy is subject to certain risks and limitations. Our ability to continue to declare and pay dividends, if any, will depend on, among other things, our cash flows, our cash requirements (including requirements to service or repay our indebtedness), general economic and business conditions, our strategic plans and prospects, our financial results and condition, contractual restrictions binding on us, legal restrictions on the declaration and payment of dividends, including statutory liquidity requirements and other limitations under Cayman Islands law, and other factors that our Board of Directors considers to be relevant.

Under Cayman Islands law, we may declare cash dividends or make other distributions only out of profits lawfully available for that purpose, or out of our share premium account, which is a reserve account that holds the subscription monies over and above the nominal value of our ordinary shares paid by our shareholders (i.e., the premium for the shares issued by us), so long as we continue to have the ability to pay our debts in the ordinary course as they become due.

There can be no assurance that we will generate sufficient income from continuing operations or external sources of financing in the future, or have sufficient surplus, net profits or reserves, as the case may be, under the laws of the Cayman Islands or other jurisdictions where our subsidiaries are located, to continue to declare and pay dividends on our ordinary shares.

We are a holding company with no operations. Our subsidiaries own all of the assets that will generate income and acquisitions of additional Mortgage Servicing Assets that we may acquire in the future, including any purchased in the Planned Acquisition, will be held by our subsidiaries. Therefore, our ability to declare and pay dividends is dependent on the generation of cash flow by our subsidiaries and their ability to make such cash available to us, by dividend, distribution or otherwise. Each of our subsidiaries is a distinct legal entity and, under certain circumstances, legal and contractual restrictions may limit our ability to obtain cash from them.

In deciding whether to make a dividend payment to our shareholders, our directors must have regard to the Company’s best interests and must have due regard for our future cash requirements, as well as our present and future solvency. Our dividend policy is based upon our directors’ current assessment of our business and the environment in which we operate, and that assessment could change based on a number of factors, including competitive developments, market conditions or new growth opportunities. Our Board of Directors may, in its discretion, change our dividend policy at any time to decrease the level of dividends or entirely discontinue the payment of dividends.

The following table sets forth our capitalization as of June 30, 2012 (in thousands of dollars, except ordinary share data):

The following table should be read in conjunction with “Summary Consolidated Financial Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and related notes included elsewhere in this prospectus.

Over the last few decades the complexity of the market for residential mortgage loans in the United States has dramatically increased. A borrower seeking credit for a home purchase will typically obtain financing from a financial institution, such as a bank, savings association or credit union. In the past, these institutions would generally have held a majority of their originated mortgage loans as interest-earning assets on their balance sheets and would have performed all activities associated with servicing the loans, including accepting principal and interest payments, making advances for real estate taxes and property and casualty insurance premiums, initiating collection actions for delinquent payments and conducting foreclosures.

Now, institutions that originate mortgage loans generally hold a smaller portion of such loans as assets on their balance sheets and instead sell a significant portion of the loans they originate to third parties. Fannie Mae and Freddie Mac are currently the largest purchasers of home mortgage loans. Under a process known as securitization, the GSEs and financial institutions typically package residential mortgage loans into pools that are sold to securitization trusts. These securitization trusts fund the acquisition of mortgage loans by issuing securities, known as mortgage-backed securities, that entitle the owner of such securities to receive a portion of the interest and principal collected on the mortgage loans in the pool. The purchasers of the mortgage-backed securities are typically large institutions, such as pension funds, mutual funds and insurance companies. The agreement that governs the packaging of mortgage loans into a pool, the servicing of such mortgage loans and the terms of the mortgage-backed securities issued by the securitization trust is often referred to as a pooling and servicing agreement.

The following chart shows the growth in residential mortgage loans that have been securitized over the past ten years. This drove an increase in the number of residential mortgage loans outstanding until the credit dislocation in 2007 reduced origination and securitization activities, particularly for subprime and Alt-A mortgage loans.

Sources: CPR CDR Technologies, Inc., LoanPerformance, Inc. and Inside Mortgage Finance.

In connection with a securitization, a number of entities perform specific roles with respect to the mortgage loans in a pool, including the trustee and the mortgage servicer. The trustee holds legal title to the mortgage loans on behalf of the owner of the mortgage-backed securities and either maintains the mortgage note and related documents itself or with a custodian. The trustee or a separate securities administrator for the trust receives the payments collected by the servicer on the mortgage loans and distributes them to the investors in the mortgage-backed securities pursuant to the terms of the pooling and servicing agreement. One or more other entities are appointed pursuant to the pooling and servicing agreement to service the mortgage loans. In some cases, the servicer is the same institution that originated the loan, and, in other cases, it may be a different institution. The duties of servicers for mortgage loans

that have been securitized are generally discussed below under “Mortgage Servicing,” and are generally required to be performed in accordance with industry-accepted servicing practices and the terms of the mortgage note and applicable law. A servicer generally takes actions, such as foreclosure, in the name and on behalf of the trustee.

The residential mortgage market is commonly divided into a number of categories based on certain mortgage loan characteristics, including the credit quality of borrowers and the types of institutions that originate or finance such loans. While there are no universally accepted definitions, the residential mortgage loan market is commonly divided by market participants into the following categories.

This category of mortgage loans includes “conforming loans,” which are first lien mortgage loans issued to prime borrowers and are secured by single-family residences that meet or “conform” to the underwriting standards established by Fannie Mae or Freddie Mac. Prime borrowers are borrowers that have strong credit histories and who generally purchase their properties with at least a 10% down payment. The conforming loan limit is established by statute and currently is $417,000 with certain exceptions for high-priced real estate markets. This category also includes mortgage loans issued to borrowers that do not meet conforming loan standards, but who qualify for a loan that is insured or guaranteed by the government through Ginnie Mae, primarily through federal programs operated by the Federal Housing Administration and the Department of Veterans Affairs.

Residential mortgage loans that are not guaranteed by the GSEs or the government are generally referred to as “non-conforming loans” and fall into one of the following categories: jumbo, subprime, Alt-A or second lien loans.

Jumbo. Jumbo mortgage loans have original principal amounts that exceed the statutory conforming limit for GSE loans. Jumbo borrowers generally have strong credit histories and provide full loan documentation, including verification of income and assets.

Subprime. Subprime mortgage loans are generally issued to borrowers with blemished credit histories, who make low or no down payments on the properties they purchase or have limited documentation of their income or assets. Subprime borrowers generally pay higher interest rates and fees than prime borrowers.

Alt-A. Alt-A mortgage loans are generally issued to borrowers with risk profiles that fall between prime and subprime. These loans have one or more high-risk features, such as the borrower having a high debt-to-income ratio, limited documentation verifying the borrower’s income or assets, or the option of making monthly payments that are lower than required for a fully amortizing loan. Alt-A mortgage loans generally have interest rates that fall between the interest rates on conforming loans and subprime loans.

Second Lien. Second mortgages and home equity lines are often referred to as second liens and fall into a separate category of the residential mortgage market. These loans typically have higher interest rates than loans secured by first liens because the lender generally will only receive proceeds from a foreclosure of a property after the first lien holder is paid in full. In addition, these loans often feature higher loan-to-value ratios and are less secure than first lien mortgages.

Since the economic crisis began in 2007, the origination of jumbo, subprime, Alt-A and second lien mortgage loans has dramatically declined, and the primary market for securitizations of such loans has largely closed. The refinancing of subprime and Alt-A mortgage loans has declined in tandem with loan originations. Decreased refinancing activity for subprime and Alt-A borrowers has resulted in lower prepayment speeds and an increase in the life of the related mortgage servicing rights.

The largest mortgage loan servicers are large banks and other financial institutions that are active in mortgage loan originations and which typically have access to deposit-based funding. Other mortgage servicers include entities that focus primarily on servicing and typically do not have access to deposit-based funding. These mortgage servicers primarily service loans held by securitization trusts that do not have the infrastructure to service loans themselves. Recent legislative and regulatory developments may have an effect on the mortgage servicing industry in various jurisdictions. Reforms in the area generally add new prohibitions or requirements. In addition, Basel III, which is scheduled to be implemented into law in several countries on January 1, 2013, includes rules that could effectively raise a bank’s regulatory capital costs of owning mortgage servicing rights. Developments such as these could potentially cause institutions to decrease the amount of mortgage servicing rights that they own. The following table shows the top residential mortgage loan servicers ranked by the unpaid principal balance of the loans serviced as of June 30, 2012:

Residential mortgage loan servicers manage the billing, collections and loss mitigation activities associated with mortgage loans that are originated by banks or other lenders. Servicers send borrowers monthly account statements, collect monthly mortgage payments, remit such payments to the owner of the mortgage loan, answer customer service inquiries and maintain custodial accounts to hold borrower payments of principal and interest and amounts received from borrowers to pay real estate taxes and insurance with respect to the properties securing the mortgage loans and pay such real estate taxes and insurance premiums from the custodial accounts. A servicer will also remit collections on the mortgage loans from the custodial accounts to the trustee of the applicable securitization trust to make payments on the related mortgage-backed securities and prepare and deliver monthly and annual reports to the trustee. A servicer may also be required to advance its own funds to cover shortfalls in collections of principal and interest from borrowers, to pay property and casualty insurance premiums and real estate taxes on a property and to cover the costs associated with protecting or foreclosing on a property. If borrowers become delinquent on loans, the servicer generally may conduct loss mitigation activities to reduce loan delinquencies and losses by working with borrowers to collect payments and modify loans or enforce the lenders’ remedies, which may include initiating foreclose procedures and selling the properties.

Mortgage servicers receive a monthly servicing fee, which is usually based on a percentage of the mortgage loan’s unpaid principal balance per annum and typically ranges from 25 to 50 basis points depending on the categories of mortgage loans comprising the loan portfolio. Subprime servicers typically receive a servicing fee at the higher end of this range to compensate for the additional costs incurred in connection with higher delinquencies experienced with respect to subprime borrowers. Mortgage servicers usually also have the right to receive ancillary fees relating to the servicing of the mortgage loans, such as late fees from borrowers and interest earned on custodial accounts. All costs incurred by the servicer in connection with performing its servicing functions, including its obligations to make servicing advances, are generally borne by the servicer.

Servicing advances are structured to provide liquidity to the mortgage loan securitizations but are not intended to provide credit support to the owner of the mortgage loan or the underlying borrowers. Servicing advances are usually reimbursed from amounts received with respect to the related mortgage loan, including payments from the borrower or amounts received from the liquidation of the property securing the loan, which is referred to as “loan level recovery.” Servicers generally have the right to cease making servicing advances on a loan if they determine that advances cannot be recovered at the loan level. These determinations are made by each servicer in accordance with its stop advance policy and may vary among servicers. In the event that loan level recovery is not sufficient to reimburse the servicer in full for servicing advances made with respect to a mortgage loan, most pooling and servicing agreements provide that the

servicer is entitled to be reimbursed from collections received with respect to other loans in the same securitized mortgage pool, which is referred to as “pool level recovery.” The servicer generally does not receive interest on servicing advances.

If a borrower defaults on a mortgage loan, the owner of the mortgage loan, or the servicer on its behalf, is entitled to foreclose the property in order to sell it to repay the loan. The foreclosure process is generally initiated when the loan becomes 90 days or more delinquent.

State foreclosure laws establish certain procedures that servicers must follow in conducting foreclosures and establish minimum time periods for various aspects of the foreclosure process. These laws and their associated timelines vary widely by state. States generally follow one of two methods for their foreclosure process: judicial, with a judge presiding over the process in a court proceeding; or statutory, with the process being conducted outside the courtroom in accordance with state law. Foreclosure proceedings generally take longer and are more costly to complete in states that follow the judicial foreclosure process, primarily because of the additional legal work involved. As of June 30, 2012, 20 states used a statutory process, 23 states used a judicial process and seven states provide the servicer with the option of selecting either approach.

Foreclosure timelines increase as the number of delinquent mortgage loans increase. In addition, various state banking regulators and attorneys general have publicly announced that they have initiated inquiries into banks and servicers regarding compliance with legal procedures in connection with mortgage foreclosures and, in the case of the Joint Federal-State Servicing Settlement, have entered into a settlement in connection with mortgage foreclosure issues. These activities raise the possibility that governmental authorities, including regulators and judicial bodies, could implement further measures, including foreclosure moratoria, that could further increase foreclosure timelines. All else being equal, an increase in foreclosure timelines would adversely affect servicers by lengthening the amount of time that servicing advances are outstanding and, consequentially, increasing the financing costs related to those servicing advances. See “Risk Factors—Risks Related to Government Regulation—Regulatory scrutiny regarding foreclosure processes could lengthen foreclosure timelines which would negatively impact our liquidity and profitability.”

The owner of a mortgage loan, or the servicer acting on its behalf, may elect to remediate borrower delinquencies through loss mitigation and home retention strategies that fall short of foreclosure. Under the terms of many pooling and servicing agreements, mortgage servicers are permitted, on behalf of the owner of the mortgage loan, to negotiate with a borrower to modify the terms of the loan. These modifications can include principal forgiveness, maturity extensions, delinquent interest capitalization and changes to contractual interest rates. In addition, a servicer can agree to modifications upon the liquidation of a loan, commonly known as a short sale, where a portion of the outstanding principal of the loan is forgiven as part of a sale of the underlying property to a third party, or the owner of the mortgage loan can take possession of the underlying property and suspend the foreclosure with the consent of the borrower, a process commonly known as a deed-in-lieu of foreclosure. Certain governmental and agency-sponsored programs, including the Home Affordable Modification Program (“HAMP”), also provide economic incentives for servicers to implement strategies to avoid or delay foreclosures.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This management’s discussion and analysis of financial condition and results of operations contains forward-looking statements that involve assumptions, risks and uncertainties. See “Forward-Looking Statements” for a discussion of the uncertainties, risks and assumptions associated with these statements. You should read the following discussion together with our consolidated financial statements and the notes thereto appearing elsewhere in this prospectus as well as the rest of the information in this prospectus, including “Summary Consolidated Financial Data” and “Capitalization.”

We were incorporated as a Cayman Islands exempted company on December 1, 2010, and our operations prior to our initial public offering were limited to negotiating and entering into the Purchase Agreement and the Subservicing Agreement with Ocwen Loan Servicing on February 10, 2012, negotiating and entering into arrangements with lenders and other third parties to effect the transfer of Mortgage Servicing Assets, associated servicing advances and the related match funded liabilities to us, negotiating and entering into professional and administrative services agreements with Ocwen Loan Servicing and Altisource, and general corporate functions. We have no historical financial statements reflecting our operations prior to our inception, and our balance sheet as of December 31, 2011 and the results of our operations for the period from December 1, 2010 through December 31, 2011 reflect only the activities described above.

On March 5, 2012, we launched operations using proceeds from our initial public offering and a concurrent private placement with our founder and Chairman of our Board of Directors to acquire mortgage servicing assets related to a portfolio with $15.2 billion of unpaid principal balance of underlying mortgage loans from Ocwen. Specifically, we purchased:

We also assumed a related match funded servicing advance financing facility from Ocwen effective upon the closing of the Initial Ocwen Purchase. At closing on March 5, 2012, we paid cash of $149.8 million to Ocwen for the estimated purchase price of the Initial Purchased Assets (net of assumed liabilities), subject to certain closing adjustments. The purchase price for the Rights to MSRs was based on the value of such assets at the time we entered into the Purchase Agreement and the estimated outstanding unpaid principal balance of the underlying mortgage loans at closing. The purchase price for the associated servicing advances and other assets was equal to the net consolidated book value, which approximated fair value, as of the purchase date of all assets and liabilities of the subsidiary and special purpose entity established in connection with the advance financing facility that owns these servicing advances. On March 31, 2012, we and Ocwen, pursuant to the terms of the Purchase Agreement, agreed to a final purchase price of $138.8 million for the Initial Purchased Assets (net of assumed liabilities of $359.2 million), reflecting post-closing adjustments of $11.0 million that principally resulted from declines in match funded advances.

Having achieved our business and financial objectives in the first quarter, on May 1, 2012 we purchased additional assets from Ocwen Loan Servicing that are substantially similar to our initial portfolio under substantially similar terms. This purchase was funded primarily from excess proceeds from our initial public offering and a concurrent private placement of our ordinary shares and cash generated in excess of our dividend and allowed us to grow the size of our mortgage servicing portfolio to $17.3 billion of unpaid principal balance of underlying mortgage loans as of June 30, 2012. The final purchase price for the transaction was $103.4 million (initially $103.8 million; but was subsequently adjusted). To finance that

amount, we used $25.9 million in cash and borrowed $77.9 million under the Servicing Advance Facility against the $92.6 million in servicing advances associated with the Rights to MSRs.

On August 1, 2012, we completed an acquisition from Ocwen Loan Servicing of Rights to MSRs and related servicing advances for a servicing portfolio of subprime and Alt-A residential mortgage loans. The Flow Two Purchase resulted in the acquisition by us of Rights to MSRs with approximately $2.1 billion in unpaid principal balance as of July 31, 2012. The purchase price for the Flow Two Purchase was $74.7 million. To finance that amount, we used $18.6 million in cash generated from our operations and borrowed $56.1 million under the Servicing Advance Facility against the $66.7 million in servicing advances associated with the Rights to MSRs.

The results for our first full quarter of operations ended on June 30, 2012 reflect consistent earnings that were in line with our expectations and exceeded the dividends declared for the period by approximately $400,000. The valuation of our assets was stable. Ocwen Loan Servicing’s performance on behalf of HLSS Holdings was strong with delinquencies continuing to decrease and the advance ratio declining slightly faster than targeted in our contract with Ocwen Loan Servicing. From an operational perspective, the transactions between HLSS Holdings and Ocwen Loan Servicing were completed as planned, and we believe that all servicing requirements under the pooling and servicing agreements were met in all material respects.

We intend to continue to acquire additional substantially similar mortgage servicing assets from Ocwen in the near term in two ways:

Ocwen stated that as of June 30, 2012, it has servicing assets with over $100 billion of unpaid principal balance of underlying mortgage loans that are substantially similar to the assets that we purchased in the transactions described above. We believe that Ocwen perceives that it has benefited from the transfer of Rights to MSRs to us in connection with our previous acquisition transactions. Although we cannot guarantee that future acquisition transactions will occur, we also believe that Ocwen will benefit from such transactions and therefore will continue to sell mortgage servicing assets to us in this manner which will allow us to maintain or grow the unpaid principal balance of our servicing portfolio.

We remain open to purchasing assets from third parties other than Ocwen, but given the large amount of servicing assets remaining at Ocwen, we do not view initiating purchases from other third parties as a near-term priority. Should Ocwen be unwilling or unable to sell mortgage servicing assets to us in the near future, we expect that there will continue to be opportunities to purchase mortgage servicing assets from other parties.

We intend to use the proceeds from this offering to purchase the Planned Acquisition Assets from Ocwen Loan Servicing in the Planned Acquisition. We are in discussions with Ocwen Loan Servicing

regarding the composition of the Planned Acquisition Assets, but have not yet identified the specific assets we will acquire. We expect the Planned Acquisition Assets will have similar characteristics to those Mortgage Servicing Assets acquired in the Ocwen Transactions, and that the related servicing advances, both current and future, will be eligible for funding under the Servicing Advance Facility Agreements. The closing of this offering is not conditioned upon the completion of the Planned Acquisition.

We also expect to amend our existing Servicing Advance Facility Agreements to allow for additional borrowing from Barclays Bank Plc to finance the acquisition of the servicing advances related to the Planned Acquisition Assets and the servicing advances we have previously acquired, or, alternatively, we may amend our existing Servicing Advance Facility Agreements to issue new debt securities backed by the servicing advances related to the Planned Acquisition Assets and the servicing advances we have previously acquired. We are currently in discussions with Barclays Bank Plc regarding the amendments to the Servicing Advance Facility Agreement, but we do not have a firm commitment to provide additional servicing advance financing in connection with the Planned Acquisition.

A continued strategic priority for us is to receive the consents necessary for us to become the named servicer for the securitizations where we currently own Rights to MSRs and the associated servicing advances. Based on our current dialogue with consent parties, our near term goal in pursuit of such consents is to establish an operating history that demonstrates a continued capability to perform the servicing requirements, specifically our obligation to fund servicing advances and to make principal and interest remittances in conformity with all requirements of the pooling and servicing agreements.

Our operations involve the acquisition and ownership of Purchased Assets. We account for the Rights to MSRs related to the Initial Mortgage Servicing Rights as financial assets. Ocwen Loan Servicing remains obligated to service the mortgage loans underlying the Initial Mortgage Servicing Rights pursuant to the related pooling and servicing agreements until all Required Third Party Consents are obtained and legal ownership of the Initial Mortgage Servicing Rights is transferred to us. At that time, we will become contractually obligated to service those mortgage loans and generally to perform the functions described under “The Mortgage Servicing Industry—Mortgage Servicing—Servicing Activities.” Upon receiving the Required Third Party Consents related to an Initial Mortgage Servicing Right, we will account for the related Right to MSRs as a servicing asset. We do not intend to develop a mortgage servicing platform if and when we acquire legal ownership of any mortgage servicing rights, nor do we intend to acquire or maintain mortgage servicing platforms, personnel or processes in connection with the acquisition of the Aggregate Purchased Assets and any Mortgage Servicing Assets we may purchase in the future. As a result, we have engaged Ocwen Loan Servicing to perform substantially all of the servicing functions relating to the Aggregate Purchased Assets on our behalf if and when we acquire legal ownership of the Initial Mortgage Servicing Rights; however, we will not delegate to Ocwen Loan Servicing the responsibility for maintaining custodial accounts, remitting amounts from the custodial accounts and funding servicing advances pursuant to the terms of the pooling and servicing agreements, which are functions we will perform. We will employ the number of personnel necessary to manage our retained obligations with respect to those Mortgage Servicing Assets that we own.

The primary components of our net income, as determined under U.S. Generally Accepted Accounting Principles, are:

Interest Income—Notes Receivable (prior to receiving the Required Third Party Consents)

Our primary source of income prior to receiving the Required Third Party Consents is interest income on the Notes Receivable—Rights to MSRs. This interest income represents the amount of the servicing and other related fees collected by Ocwen Loan Servicing on the underlying Initial Mortgage Servicing Rights (see “—Servicing Fees”) less any amounts due to Ocwen Loan Servicing for its services under the Purchase Agreement (see “—Fees to Ocwen Loan Servicing and Gross Servicing Margin”) and the amount of amortization of the Notes Receivable—Rights to MSRs (see “—Amortization of Mortgage Servicing Rights”). Upon receipt of each Required Third Party Consent related to an Initial Mortgage Servicing Right, we will account for the Notes Receivable—Rights to MSRs balance related to such Initial Mortgage Servicing Right as a mortgage servicing right and will begin recording servicing fee revenue related to the mortgage servicing right rather than interest income on the notes receivable.

Our primary source of revenue is the fees we are entitled to receive in connection with the servicing of mortgage loans. Prior to receiving the Required Third Party Consents, the servicing fees we earn will be accounted for as a component of interest income. The pooling and servicing agreements relating to the Initial Mortgage Servicing Rights entitle the servicer to an annual fee of 50 basis points of the unpaid principal balance of the mortgage loans serviced. In connection with the sale of Mortgage Servicing Assets to us, Ocwen Loan Servicing will remit to us the servicing fees related to the Initial Mortgage Servicing Rights it recognizes in each month. If and when we acquire legal ownership of the Initial Mortgage Servicing Rights, we will be contractually entitled to receive and retain these servicing fees directly.

The pooling and servicing agreements relating to the Initial Mortgage Servicing Rights entitle the servicer to certain revenue streams, including late fees, prepayment fees, government incentive payments and other ancillary revenue. Ocwen Loan Servicing will not transfer the right to receive this ancillary revenue to us as part of the Rights to MSRs, but instead will retain these ancillary revenue streams. If and when the Initial Mortgage Servicing Rights are transferred to us, we will be entitled to all ancillary servicing fees under the pooling and servicing agreements related to the Initial Mortgage Servicing Rights; however, under the terms of the Subservicing Agreement, Ocwen Loan Servicing will retain such ancillary fees.

We recognize servicing fees as revenue as mortgage principal and interest payments are received from borrowers and as delinquent loans are brought current, modified, liquidated or charged off. Servicing fees are considered a senior obligation of the securitization trusts to which they relate which means such fees are senior to the payment of principal and interest to holders of mortgage-backed securities and represent a very small proportion of the total cash flows of the pool of mortgage loans; therefore, the risk of non-collection by the servicer is remote.

We define our gross servicing margin as the servicing fee revenue that we recognize less the fees that we pay to Ocwen Loan Servicing and any subservicers that we may engage. The manner in which we calculate the fees we pay to Ocwen Loan Servicing is the same under both the Purchase Agreement, with respect to the Rights to MSRs, and under the Subservicing Agreement, with respect to any Initial Mortgage Servicing Right for which legal ownership has been transferred to us upon receipt of the Required Third Party Consents. However, prior to obtaining the Required Third Party Consents, these amounts will be accounted for as a component of interest income.

We pay Ocwen Loan Servicing a monthly base fee equal in the aggregate to 12% of the servicing fee revenue recognized for that month with respect to the Initial Mortgage Servicing Rights or the related Rights to MSRs, as applicable. The monthly base fee payable to Ocwen Loan Servicing is expressed as a percentage of the servicing fee revenue actually collected in any given month, which varies from month to month based on the level of collections of principal and interest for the mortgage loans serviced. This monthly base fee structure is intended to correlate the revenue we earn with the fees we pay.

In addition to the monthly base fee, Ocwen Loan Servicing may also receive a monthly performance based incentive fee. Ocwen Loan Servicing receives this incentive fee to the extent the servicing fee revenue recognized for a given month exceeds the sum of the base fee and the amount initially retained by us (the “retained fee”), which is equal to a weighted average of 31.1 basis points of the average unpaid principal balance of the related mortgage loans, for the month of June 2012, and which will vary over the term of the related Sale Supplement or Subservicing Supplement, as applicable. The percentage used to calculate the retained fee will change over the term of each related supplement in accordance with a predetermined schedule. If we do not receive an amount equal to the retained fee in any given month, as expressed in terms of basis points of the average unpaid principal balance of the mortgage loans serviced, a shortfall in our targeted gross servicing margin percentage will occur. Ocwen Loan Servicing will not earn any performance based incentive fees for any month that there is such a shortfall, or in any subsequent month, until we have recovered such shortfall from amounts that would otherwise be available to pay future performance based incentive fees to Ocwen Loan Servicing.

The performance based incentive fee payable in any month is reduced if the ratio of outstanding servicing advances to the unpaid principal balance of the mortgage loans serviced (the “advance ratio”) exceeds a predetermined level for that month. If the advance ratio is exceeded in any month, any performance based incentive fee payable for such month will be reduced by an amount equal to 6.5% per annum of such excess servicing advances.

The fees are calculated monthly and paid by us to Ocwen Loan Servicing within three business days of the final day of each month. The base fees and the performance based incentive fees are subject to change upon any renewal of the subservicing supplement relating to the Initial Purchased Assets. The fees with respect to future pools of mortgage loans will be as agreed by us and Ocwen Loan Servicing in the agreements entered into in connection with the future acquisition of the related Mortgage Servicing Assets.

The gross servicing margin is expected (i) to cover our operating costs, which are principally comprised of amortization of mortgage servicing rights, interest expense incurred to finance servicing advances and administrative and other expenses, and (ii) to be sufficient to allow us to pay our targeted dividends. We believe that the structure of these fees as described above will align the interests of both companies and help us meet our performance targets.

We will record our mortgage servicing rights at their acquisition cost which is the same as their fair value. Prior to receiving the Required Third Party Consents related to the Initial Mortgage Servicing Rights, we will amortize the Notes Receivable—Rights to MSRs using the prospective interest method of accounting. At each reporting date, we will calculate the present value of the net cash flows related to the underlying Initial Mortgage Servicing Rights and adjust the carrying value of the Notes Receivable—Rights to MSRs to this amount. The change in the value of the Notes Receivable—Rights to MSRs will be deducted from the net of the servicing fees received from the Initial Mortgage Servicing Rights and the servicing fees paid to Ocwen Loan Servicing, and the resulting amount will be recorded as interest income.

Prepayment speeds are a significant driver of changes in estimated net servicing income, mortgage servicing rights amortization expense and the balance of the Notes Receivable—Rights to MSRs. Prepayment speeds relating to subprime and Alt-A mortgage loans have not historically shown a high degree of volatility from one period to the next. Therefore, we expect amortization rates to remain relatively stable over time.

Servicing advances are primarily financed through the use of match funded liabilities that accrue interest. We assumed the advance financing facility associated with the Initial Mortgage Servicing Rights from Ocwen Loan Servicing subject to and simultaneously with the closing of our initial public offering. The Class A-1 Term Note, Class A-2 Variable Funding Note, Class B Term Note and Class C Term Note issued under this facility bear interest at short-term rates equal to the commercial paper rate plus 225 to 625 basis points. The weighted average effective interest rate on the advance financing facility that we assumed from Ocwen Loan Servicing in connection with the Initial Ocwen Purchase was approximately 5.44% at June 30, 2012. Interest expense also includes amortization of deferred financing costs, non-use fees and any hedge related costs.

When a borrower is delinquent, the amount of cash that is required to be advanced to the trustee or other owner of the mortgage loan on behalf of the borrower increases. We incur significant interest costs to finance such advances. As a result, increased delinquencies result in increased interest expense without respect to any change in interest rates. The speed at which delinquent loans are resolved affect our interest expense. For example, slower resolution of delinquencies result in higher servicing advance balances and interest expense.

We have executed a hedging strategy designed to largely neutralize the impact of increases in interest rates over specified time periods. Our objective is to utilize hedges in an amount equal to our net exposure to interest rate increases on our match funded liabilities, which bear interest at floating interest rates, after taking into account our expected float balances which partially offset the impact of rising interest rates. If interest rates decline, the value of our hedges will decline. Should our hedging strategy prove ineffective or if we were not able to hedge all of our interest rate risk, rising interest rates would lead to higher interest expense. See “Risk Factors—Risks Related to Our Business and Industry—Our hedging strategies may not be successful in mitigating the risks associated with changes in interest rates” and “—Liquidity and Capital Resources.”

Other income consists of amounts due to us from Ocwen under the terms of the Ocwen Professional Services Agreement and float earnings. Under the Ocwen Professional Services Agreement, we receive revenue for providing certain services to Ocwen, which includes pricing and valuation analysis of potential mortgage servicing rights acquisitions, treasury management and other similar services.

Float earnings consist of interest earned on mortgage loan payments and payoff collections that have been collected but which have not yet been remitted to the securitization trust that owns the mortgage loan or which are owed to pay real estate taxes and insurance premiums with respect to the related mortgaged properties. Mortgage loan payments are usually due from the borrower between the first and fifteenth days of the month and are usually remitted to the securitization trust between the eighteenth and twenty-fourth days of each month. Until these funds are remitted to the securitization trust, they reside in interest bearing custodial accounts controlled by the servicer and are invested in accordance with the pooling and servicing agreements and our investment policy. In some cases, this interest income may be reduced by fees for account maintenance or transaction processing or interest due to borrowers on amounts held in custodial accounts. Pursuant to the Purchase Agreement, we are entitled to receive from Ocwen Loan Servicing any float earnings related to the Rights to MSRs even though we will not have custody of the custodial accounts until such time as legal ownership of the related Initial Mortgage Servicing Rights is transferred to us.

Administrative and other expenses consist largely of salaries, bonuses and related payroll taxes and employee benefit costs for our employees. In addition, we incur expenses for facilities, technology, communication and other expenses typical of public companies, including audit, legal and other professional fees. Some of our administrative services are provided pursuant to the Altisource

Administrative Services Agreement as discussed in “—Related Party Transactions.” In addition, to the extent that we evaluate and/or complete acquisitions of Mortgage Servicing Assets in the future, we will incur additional expenses, most of which we do not expect to capitalize. Administrative and other expenses include expenses related to the services we provide to Ocwen, and the services provided by Ocwen to us, under the Ocwen Professional Services Agreement. See “—Related Party Transactions.”

We are a Cayman Islands exempted company, and the Cayman Islands currently levies no taxes on individuals or corporations based on profits, income, gains or appreciation. HLSS Management, LLC, our management company that is taxed as a corporation for U.S. federal income tax purposes, will generate nominal income and will be subject to taxation in the United States. Accordingly, our consolidated effective income tax rate is and will likely continue to be substantially lower than the maximum U.S. federal income tax rate. See “Material Cayman Islands and United States Federal Income Tax Considerations.”

The following table summarizes key components of our consolidated operating results for the periods indicated, which includes the periods prior to March 5, 2012 when we were a development stage enterprise.

Three Months and Six Months Ended June 2012 versus June 2011. Revenue in 2012 primarily includes interest income recorded on Notes receivable–Rights to MSRs using the prospective interest method. Because we currently do not satisfy all of the requirements necessary to record the Rights to MSRs as mortgage servicing rights, this transaction was accounted for as a financing. Also included in revenue for the three and six months ended June 30, 2012 are the amounts billed to Ocwen Loan Servicing for services we provide under the Ocwen Professional Services Agreement and interest earned on custodial accounts and corporate account balances.

Operating expenses for the three and six months ended June 30, 2012 increased primarily due to compensation and benefits and professional services associated with our first months of full operations. Additionally, interest expense increased significantly in both periods due to the assumption of match funded liabilities on March 5, 2012 in connection with the Initial Ocwen Purchase and Flow One purchase.

Income tax expense was $60 and $77 for the three and six months ended June 30, 2012. There was no income tax expense for the three or six months ended June 30, 2011.

Our effective tax rate was 1.3% for the three and six months ended June 30, 2011. We base income tax provisions for interim periods on estimated annual income taxes calculated separately from the effect of significant, infrequent or unusual items. We are a Cayman Islands exempted company, and the Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation. Our subsidiary, HLSS Management, LLC, is the employer of all of our U.S. based employees and is a corporation for U.S. federal income tax purposes. We computed income tax expense by applying

the Federal and state combined rate of 38% to the earnings of HLSS Management, LLC that are subject to U.S. federal and state income taxes.

We operate the business as a single reportable segment. For purposes of our internal management reporting, we separately report the components of Interest income–notes receivable–Rights to MSRs, which include Servicing fee revenue, Servicing Expense and Amortization Expense for MSRs. We provide a reconciliation of our reported results to our internal management reporting for the three and six months ended June 30, 2012 in the following table. We did not provide reconciliations for the three and six months ended June 30, 2011 because we were a development stage enterprise during that period, and our operations were limited to raising capital to complete the Initial Ocwen Purchase. Operating items during that period consisted primarily of start-up costs and are not comparable to the three and six months ended June 30, 2012.

We executed our agreements with Ocwen Loan Servicing with the intent that we would receive the total amount of the servicing fees collected and that we would pay Ocwen Loan Servicing a subservicing fee that is determined based on its collections and advance ratio performance. We evaluate our operating performance and manage our business considering servicing fees collected and subservicing fees paid and maintain our internal management reporting on this basis. The following table presents our condensed consolidated results of operations in accordance with U.S. GAAP reconciled to our internally reported financial results.

Our total revenue, total operating expenses and income from operations as presented in our internal management reporting shown below should be considered in addition to, and not as a substitute for: total revenue, total operating expenses and income from operations determined in accordance with GAAP.

Three months and six months ended June 2012 versus 2011. Servicing fee revenue increased due to the Initial Ocwen Purchase on March 5, 2012 and Flow One Mortgage Servicing Asset purchase on May 1, 2012. Servicing fee revenue is a function of principal and interest collected during the period and the contractual servicing fee rate. In accordance with the rates set forth in the sale supplements for the Initial Ocwen Purchase and the Flow One purchases, our gross servicing margin (Servicing fee revenue less Servicing Expense) was 31.9 and 31.4 basis points of average unpaid principal balance for the three and six months ended June 30, 2012, respectively. We also earned income from professional services provided to Ocwen under the Ocwen Professional Services Agreement. We did not earn revenue in 2011 associated with these arrangements given we were a development stage organization.

Operating expenses increased for both periods because we began operations at the completion of our initial public offering and Initial Ocwen Purchase on March 5, 2012. Operating expenses in 2012 are primarily comprised of servicing fees paid to Ocwen for servicing the Rights to MSRs, salaries and wages and professional services. The servicing fees paid to Ocwen include $2,765 and $3,540 for the base fee and $6,963 and $8,920 in incentive fees for the three and six months ended periods, respectively. Amortization Expense relates to reductions in the unpaid principal balance for the Initial Purchased Assets. Our average headcount for the quarter and year to date periods was eleven. Most of our employees transferred to HLSS from Ocwen at the time of closing of our initial public offering and the Initial Ocwen Purchase on March 5, 2012. Expenses during the three and six months ended June 2011 were primarily related to organization costs associated with starting our business.

The following table provides selected portfolio statistics for the three months ended June 30:

The following table provides selected portfolio statistics for the six months ended June 30:

The following table provides information regarding changes in our portfolio of residential assets serviced during the quarter:

Because our future business will generally relate to the acquisition and financing of Mortgage Servicing Assets, the description of these assets and liabilities and of our accounting policies related to them is important to the understanding of our business. The principal assets that we acquired and liabilities that we assumed on the closing date of the Initial Ocwen Acquisition include the Notes Receivable—Rights to MSRs related to the Initial Mortgage Servicing Rights and the associated servicing advances and the match funded liabilities relating to the existing servicing advance facility pursuant to which such servicing advances are financed. We will acquire legal ownership of the Initial Mortgage Servicing Rights if and when the Required Third Party Consents are obtained.

During the period before we receive the Required Third Party Consents related to the Initial Mortgage Servicing Rights, we account for the purchase of the Rights to MSRs as a financing. Accordingly, we account for the amount paid to Ocwen Loan Servicing for the purchase of the Rights to MSRs as a Notes Receivable—Rights to MSRs. The fair value of the Initial Mortgage Servicing Rights was $70.2 million as of June 30, 2012.

We will amortize the Notes Receivable—Rights to MSRs using the prospective interest method of accounting. At each reporting date, we calculate the present value of the net cash flows related to the underlying Initial Mortgage Servicing Rights and adjust the carrying value of the Notes Receivable—Rights to MSRs to this amount. The change in the value of the Notes Receivable—Rights to MSRs will be deducted from the net of the servicing fees received from the Initial Mortgage Servicing Rights and the servicing fees paid to Ocwen Loan Servicing, and the resulting amount will be recorded as interest income.

If and when we obtain legal ownership of a mortgage servicing right, we will record the mortgage servicing right at the then current carrying value of the related Notes Receivable—Rights to MSRs. A mortgage servicing right is an intangible asset representing the right by the owner to service a pool of mortgage loans for a predetermined fee. The following sections discuss the accounting treatment for and valuation of mortgage servicing rights.

Mortgage Servicing Rights Valuation. At the end of each fiscal quarter, an independent third party valuation firm will assist us in determining the fair value of our mortgage servicing rights using a valuation method that is based on the present value of their expected future cash flows utilizing assumptions that are believed to be reasonable and that are consistent with the assumptions that are used by other market participants. The most significant assumptions that will be used are estimates of the speed at which mortgages will prepay and the aggregate principal amount of mortgage loans that will become delinquent, both of which will be based on available market data. Other assumptions used in this valuation will be:

The primary component of the estimated future cash inflows for our mortgage servicing rights is contractual servicing fees. Significant cash outflows include the cost of servicing mortgage loans and the cost of financing servicing advances. The most significant assumptions used in the valuation analysis is the

mortgage prepayment and delinquency rates, both of which are derived from available market data. Other assumptions used in this valuation of mortgage servicing rights are the discount rate (which reflects the risks associated with our relationship with Ocwen Loan Servicing, including that Ocwen Loan Servicing could become bankrupt, insolvent or otherwise be terminated as servicer), the interest rate used for computing the cost of the servicing advances and the cost of servicing representing industry averages. This valuation is made without regard to the owner of the mortgage servicing rights.

Changes in these assumptions would be generally expected to affect our results of operations as summarized below:

Fair Value of Mortgage Servicing Rights. The rate of decline in unpaid principal balance of mortgage loans is known as prepayment speed and is affected by factors such as employment rates, interest rates, housing prices, loan type and loan status. The unpaid principal balance of the related mortgage loans is the primary driver of servicing fees, subservicing expense, mortgage servicing rights amortization expense, mortgage servicing rights and servicing advance balances.

The fair value of the Initial Mortgage Servicing Rights is presented in the table below in terms of both basis points and absolute dollar amounts. For the Initial Ocwen Purchase, management has estimated the fair value of such mortgage servicing rights associated with each pooling and servicing agreement for the period of time that such mortgage servicing rights were owned by Barclays. These estimates were based on our assumptions regarding the future cash flows of such Initial Mortgage Servicing Rights at the time the valuations were performed. The fair values presented for the quarters ended September 30, 2010 through December 31, 2011 or, in the case of the mortgage servicing rights acquired in the Flow One Purchase, through June 30, 2012, are based on management’s beliefs regarding such values for the period of time that the Initial Mortgage Servicing Rights were owned by Ocwen Loan Servicing. In arriving at these estimates, management also utilized industry assumptions regarding the future cash flows of the Initial Mortgage Servicing Rights. The risks associated with our relationship with Ocwen Loan Servicing, including the risk that Ocwen Loan Servicing could become insolvent or bankrupt or otherwise be terminated as servicer, have been considered by management in determining the discount rate used to value our Mortgage Servicing Assets. Management will continue to assess these risks when determining the discount rate to be used in the valuation of our Mortgage Servicing Assets in future periods. Since unpaid principal balance, and subsequently fair value, decline as loans are repaid, refinanced or otherwise resolved, the disclosure of valuation in terms of basis points provides a comparable view of the change in economic fair value over time.

With respect to the Planned Acquired Assets, we expect the value of the related mortgage servicing rights to be similar–both in terms of basis points and the proportion of dollar value to unpaid principal balance–to the current values of the Initial Mortgage Servicing Rights.

Declines in unpaid principal balance and changes in the fair value of mortgage servicing rights may not necessarily give rise to future impairment of such mortgage servicing rights. We believe that the use of the amortization method of accounting will stabilize the value of mortgage servicing rights as reflected on our balance sheet for the following reasons:

Servicing advances are our largest asset class. We acquired servicing advances of approximately $506 million from Ocwen Loan Servicing in connection with the Initial Ocwen Purchase and the Flow One Purchase. The reimbursement of servicing advances is a senior obligation of the related securitization trust, which means that such reimbursement is senior to the ultimate payment of principal and interest to holders of mortgage-backed securities. All of the pooling and servicing agreements relating to the Initial Mortgage Servicing Rights provide for loan level and pool level recoveries.

Pooling and servicing agreements generally require the servicer to advance funds to the securitization trusts that own the mortgage loans during any period in which borrowers are delinquent. The servicer is also required to fund servicing advances relating to the maintenance, repair and marketing of foreclosed properties on behalf of the securitization trust. These servicing advances are made pursuant to the terms of the pooling and servicing agreement governing the related pool of mortgage loans underlying the mortgage servicing rights.

Ocwen Loan Servicing remains contractually obligated to the trustees of the securitization trusts to make any servicing advances pursuant to the pooling and servicing agreements related to the Initial Mortgage Servicing Rights until legal ownership of such Initial Mortgage Servicing Rights is transferred to us. We are obligated to purchase the servicing advances made by Ocwen Loan Servicing during the period of time prior to the transfer of legal ownership of the Initial Mortgage Servicing Rights to us, and although we are not obligated directly to the trustees of the securitization trusts to make servicing advances pursuant to the related pooling and servicing agreements, we are obligated to Ocwen Loan Servicing pursuant to the Purchase Agreement to purchase such servicing advances. When an Initial Mortgage Servicing Right is transferred to us, we will become directly obligated to the related trustee to make any servicing advances required pursuant to the related pooling and servicing agreements.

Servicing advances are currently and will continue to be pledged as collateral under the terms of the existing advance financing facility relating to the Initial Mortgage Servicing Rights that we have assumed.

We value servicing advances at their face value, which is the same as their estimated fair value, because servicing advances are a senior obligation of the securitization trust that owns the mortgage loan, have no stated maturity, generally are realized within a relatively short period of time and do not bear interest.

The servicer is generally obligated to advance funds only to the extent that it believes servicing advances will be recoverable from the expected proceeds from the related mortgage loan. Pursuant to the terms of the Purchase Agreement, we are only obligated to purchase servicing advances relating to the Rights to MSRs from Ocwen Loan Servicing if and to the extent such servicing advances are made in accordance with the terms of the related pooling and servicing agreement and Ocwen Loan Servicing’s advance and stop advance policies. We believe that the likelihood of the servicer not collecting servicing advances relating to the Initial Mortgage Servicing Rights is remote primarily due to the availability of pool level recoveries for servicing advances ultimately not recoverable at the loan level in the related pooling and servicing agreements. We record a charge to earnings to the extent that we believe any servicing advances become uncollectible under the provisions of the related pooling and servicing agreement. Ocwen Loan Servicing is required to assess the collectability of servicing advances on our behalf using its stop advance policy. In addition, Ocwen Loan Servicing must notify us of any servicing advances that we are required to purchase prior to the transfer of the Initial Mortgage Servicing Rights to us, or that we are contractually required to make following any such transfer, pursuant to the terms of the pooling and servicing agreements and the stop advance policy. The projection models driving the stop advance policy incorporate a number of different factors depending on the characteristics of the mortgage loan or pool of loans, including time to a foreclosure sale, estimated costs of foreclosure action, future property tax payments and the estimated proceeds upon the sale of the underlying property net of carrying costs, commissions and closing costs. We periodically review and monitor Ocwen Loan Servicing’s compliance with the stop advance policy. We are entitled to recover from Ocwen Loan Servicing any servicing advance

that was made in violation of the stop advance policy or that was not recoverable from the securitization trust because it violated the terms of the related pooling and servicing agreement.

The unpaid principal balance of a pool of mortgage loans and the amount of outstanding servicing advances typically decline as loan payments are received or loans are otherwise brought current, modified, liquidated or charged off. Servicing advances are typically financed, in part, by match funded liabilities and, therefore, are a principal driver of match funded liability balances and interest expense. The advance ratio is a ratio of the outstanding servicing advances to the unpaid principal balance of the related mortgage loans. The advance ratio influences match funded liabilities, interest expense and liquidity. Many factors can influence the level of servicing advances, including the following:

The table below sets forth the outstanding servicing advances relating to the Initial Mortgage Servicing Rights, excluding the Flow Two Purchase. For $14.4 billion of the related unpaid principal balance as of June 30, 2012, HomEq Servicing was the servicer of the mortgage loans underlying the related mortgage servicing rights for the quarters ended September 30, 2009 through June 30, 2010. Accordingly, the related amounts of outstanding servicing advances and advance ratios are reflective of HomEq Servicing’s servicing practices and policies and general economic conditions impacting the mortgage loans during that period. The amounts shown for the quarters ended September 30, 2010 and after represent the amount of outstanding servicing advances during the period in which Ocwen Loan Servicing serviced the mortgage loans underlying the Initial Mortgage Servicing Rights. The decrease in the advance ratio after September 30, 2010 reflects the impact of Ocwen Loan Servicing’s servicing practices and policies and general economic conditions impacting the mortgage loans during that period. The amount of outstanding servicing advances shown below, therefore, may have been affected by factors that will not apply to the Initial Mortgage Servicing Rights after we purchase the Rights to MSRs, or after we acquire legal ownership of any related Initial Mortgage Servicing Rights and may not be indicative of the results that we will achieve in the future.

Servicing advances related to the Initial Mortgage Servicing Rights were comprised of the following advance types at June 30, 2012 (dollars in millions):

With respect the Planned Acquired Assets, we expect the related servicing advances to have an advance ratio and composition similar to those currently exhibited by the servicing advances related to the Initial Purchased Assets.

The amount of each type of servicing advance outstanding can vary within each month and between months based on the timing of borrower payments, the receipt of loan payoff proceeds, the due dates of tax and insurance payments and other factors. Therefore, these amounts may not be indicative of the amount or the relative proportions of servicing advances that may be outstanding at any time in the future.

All of the outstanding advances associated with the Initial Mortgage Servicing Rights are currently financed by the Servicing Advance Facility. Match funded liabilities are a form of non-recourse debt that are collateralized by, and are intended to approximate the duration of, the servicing advances. Our current match funded liabilities with respect to the Initial Mortgage Servicing Rights are financed pursuant to this facility. The investor in the notes issued under this facility is Sheffield Receivables Corporation, an asset-backed commercial paper conduit administered by Barclays Bank PLC. We record the facility at its book value, which is the same as its fair value as of the date of acquisition. Our match funded liability balance is driven primarily by the level of servicing advances and the advance borrowing rate, which is defined as the collateral value of servicing advances divided by total servicing advances. For the advance financing facility associated with the Initial Mortgage Servicing Rights, the advance borrowing rates, which are different for each type of advance: judicial and non-judicial; principal and interest; taxes and insurance; and corporate advances, were set at levels that enabled each class of notes issued pursuant to the advance financing facility to meet ratings criteria as determined by Standard & Poor’s.

The following table shows the match funded liabilities related to the Initial Mortgage Servicing Rights as of June 30, 2012.

Interest rates on match funded liabilities vary based on the priority of such match funded liability to receive payments from the servicing advances securing the advance financing facility. For example, the Class A-1 Term Note and Class A-2 Variable Funding Note are generally required to be repaid prior to the other classes of notes, and thus the interest paid on such notes is less than on the subordinated notes. Although we do not know the securities that will be issued pursuant to the servicing advance facility in connection with the Planned Acquisition and their related interest rates, we anticipate that it will feature similar, if not more advantageous, interest rates than those we currently pay under our Servicing Advance Facility.

The following table sets forth the actual amount of match funded liabilities outstanding on the existing match funded advance financing facility during the period that Ocwen Loan Servicing owned the Initial Mortgage Servicing Rights, which includes the quarters ended September 30, 2010 through June 30, 2012, and a pro forma estimate of the amount of match funded liabilities that would have been outstanding for the quarters ended June 30, 2009 through June 30, 2010 when the Initial Mortgage Servicing Rights were owned by Barclays. The period ended June 30, 2012 also reflects the match funded liabilities added as a result of the Flow One Purchase.

The match funded advance financing facilities and other financing sources that HomEq Servicing used to finance servicing advances related to the Initial Ocwen Purchase during the period of Barclays’ ownership were different than the match funded advance financing facility that we assumed from Ocwen Loan Servicing upon completion of the Initial Ocwen Purchase. Therefore, the match funded liabilities shown in the table below for the quarters ended March 31, 2009 through June 30, 2010 are a pro forma calculation of the amount of match funded liabilities that could have been outstanding on such dates based on the servicing advances actually outstanding on such dates and the terms of the current Ocwen Loan Servicing match funded advance financing facility, but without regard to the limit on the actual amount that can be borrowed under such match funded advance financing facility. These pro forma match funded liabilities were calculated using the advance borrowing rates by servicing advance type as of June 30, 2012, and the servicing advances outstanding as of each date. See “—Advance Borrowing Rate.” These calculations were made without regard to either the outstanding balance or the unused borrowing capacity that existed as of June 30, 2012. Thus, the pro forma match funded liabilities do not necessarily represent the amount that we would have actually had outstanding under the existing facility on the dates shown had we owned the Initial Mortgage Servicing Rights and engaged Ocwen Loan Servicing to service the underlying mortgage loans on those dates, assuming the existing facility had been available to us on such dates.

The pro forma match funded liabilities data presented below is a hypothetical illustration provided for informational purposes only, is subject to a number of uncertainties and assumptions and does not intend to represent what our actual match funded liabilities would have been if we had owned the Initial Mortgage Servicing Rights and servicing advances as of the dates shown in the table. In preparing this information, we used currently available information and made assumptions that our management believes are reasonable in order to reflect match funded liabilities information for the periods presented. The estimates and assumptions used in the calculation of this information may be materially different from what we would have experienced and what we will actually experience in the future. Accordingly, the pro forma match funded liabilities information included below does not intend to represent what our match funded liabilities would have been had we operated as an independent public company during the periods presented. The pro forma match funded liabilities information also does not intend to represent what our match funded liabilities, results of operations or financial condition will be in the future, nor does it give effect to any events other than those discussed above. Actual match funded liabilities shown below are amounts under the match funded advance financing facility that we assumed from Ocwen Loan Servicing in connection with the Ocwen Transactions.

Historical match funded liabilities may not be indicative of future amounts as servicing advance balances are subject to prepayment speeds, delinquency rates, foreclosure timelines, the time required to dispose of real estate owned properties and other factors that can affect the amount of servicing advances on mortgage loans. In addition, we may choose to manage our liquidity and interest expense by foregoing permitted borrowing on our match funded advance financing facility.

The advance borrowing rate is the percentage of the amount of our outstanding servicing advances against which we can borrow. The rates shown in the table below apply to the servicing advances associated with the Initial Mortgage Servicing Rights that are financed under the Servicing Advance Facility. These advance borrowing rates are key factors that influence the amount of our match funded liabilities and associated interest expense. A higher advance borrowing rate enables us to borrow more on our outstanding servicing advances and improves our return on equity and liquidity but also increases our interest expense. Advance borrowing rates vary based on the type of servicing advance and the occurrence of certain specified events.

The table below shows the advance borrowing rate that applies to each type of servicing advance when calculating the maximum amount of each class of notes that may be outstanding pursuant to the Servicing Advance Facility.

The mortgage loan pools underlying the Initial Mortgage Servicing Rights are characterized in terms of the loan category, geographic location of the mortgaged properties, delinquency status, year of origination, mortgage type, average borrower FICO score, average loan-to-value ratio and historical loan prepayment speeds. Each of these factors may impact one or more components of our financial condition or results of operations.

The following tables present a number of important metrics that drive our financial performance and the results of our operations. All loan counts shown in the following tables are expressed in units.

Each loan category has different characteristics with respect to delinquency rates and prepayment rates. These differences drive Mortgage Servicing Asset valuations, servicing fees received, float revenue, subservicing expense, amortization expense and interest expense relating to the Initial Mortgage Servicing Rights.

We anticipate that the categories of mortgage loans underlying the Planned Acquisition Assets will be similar to those currently underlying the Initial Mortgage Servicing Rights.

The Initial Mortgage Servicing Rights relate to mortgage loans on properties throughout the United States and its territories. Historical and current economic and market conditions are different in each region, and the geographic distribution of the mortgaged properties can have a direct impact on the overall performance of the mortgage loans underlying the Initial Mortgage Servicing Rights.

We anticipate that the geographic distribution of the mortgage loans underlying the Planned Acquisition Assets will be similar to those loans currently underlying the Initial Mortgage Servicing Rights.

The servicer is contractually obligated to advance funds to the securitization trust or other third parties during any period in which a borrower is delinquent. As a result, the delinquency status of a loan directly influences the level of servicing advances, match funded liabilities and interest expense with respect to the Initial Mortgage Servicing Rights. In addition to external trends, such as unemployment rates and general economic conditions, delinquency status is highly dependent on the underwriting standards relating to loan origination and the processes, procedures and performance of the servicer or subservicer of a pool of mortgage loans.

We anticipate that the delinquency status of the mortgage loans underlying the Planned Acquisition Assets will be similar to those loans currently underlying the Initial Mortgage Servicing Rights.

Loans that are less than 90 days delinquent and loans that are in bankruptcy or forbearance for which payments are being received are generally referred to as “performing loans,” while loans 90 days or more delinquent and loans in forbearance or bankruptcy for which payments are not being received or are in foreclosure or real estate owned are considered “non-performing loans.”

An important part of Ocwen Loan Servicing’s activities is foreclosure prevention and home retention procedures, which are designed to help reduce delinquencies and assist borrowers in staying in their homes. Ocwen Loan Servicing may engage in early intervention activities with individual borrowers who are delinquent or whom risk models indicate may become delinquent.

The pooling and servicing agreements relating to the Initial Mortgage Servicing Rights and those anticipated to be included in the Planned Acquisition Assets generally permit the servicer to engage in loan modifications. Loan modifications can include principal forgiveness, maturity extension, delinquent interest capitalization and changes to contractual interest rates. The servicer can agree to modifications upon liquidation of a loan, commonly known as a short sale, where a portion of the outstanding principal of the loan is forgiven as part of a sale of the underlying property to a third party. Ocwen Loan Servicing participates in a variety of governmental and agency-sponsored programs, as well as internally designed proprietary programs, aimed at borrowers who are at risk of foreclosure. Each program has varying qualification criteria for the borrower to meet as well as associated modification options, which will be analyzed to determine the best solution for the borrower. Each of these actions serves to reduce delinquencies, recover servicing advances and lower interest expense given that such actions yield more rapid servicing advance recoveries than the foreclosure and subsequent sale of mortgaged properties.

The year of origination and resulting age of a mortgage loan are key drivers of prepayments. Prepayment speeds tend to be more volatile with newly originated mortgage loans compared to more seasoned loans, such as the loans underlying the Initial Mortgage Servicing Rights. Prepayments result from the ordinary amortization of loans through monthly payments, proceeds of sales, short sales and refinancing, loan reductions through principal reduction modifications or resolution through foreclosure and sale.

We anticipate that the seasoning of the mortgage loans underlying the Planned Acquisition Assets will be similar to those loans currently underlying the Initial Mortgage Servicing Rights.

There are a variety of fixed and variable rate mortgage loans underlying the Initial Mortgage Servicing Rights. The type of mortgage loan influences the prepayment speed and, to some extent, the delinquency rate of the loan. Mortgage type can change as loans are modified, and the mix can also change over time based on varying prepayment speeds across individual mortgage types.

We anticipate that the mix of the types of the mortgage loans underlying the Planned Acquisition Assets will be similar to those loans currently underlying the Initial Mortgage Servicing Rights.

Variable rate loans are generally based on the six-month LIBOR rate published in The Wall Street Journal. Fixed rate loans range from a minimum rate of 0.125% to a maximum rate of 15.00% with a weighted-average rate of 5.14%. Fixed rate loans include loans that were originated as variable rate loans but that have been subsequently modified and converted into fixed rate loans.

FICO score is a type of credit score prepared by Fair Isaac Corporation. A credit score is a numerical expression of a person’s creditworthiness based upon a statistical analysis of the information about them available to a credit bureau as of a particular date. A FICO score is usually obtained by a lender when it is underwriting a mortgage loan and is one of the factors that the lender will assess when deciding whether to extend a mortgage loan. High FICO scores generally indicate a higher degree of creditworthiness than low scores. A servicer may obtain updated FICO scores at various times over the life of the loan.

The table below sets forth the weighted average FICO score, based on unpaid principal balance, for the borrowers with respect to the mortgage loans underlying the Initial Mortgage Servicing Rights. The scores represent the average FICO scores that have been received between January 1, 2010 and June 30, 2012. The borrower’s most current score is most reflective of their current credit standing and would be used by a lender to assess any new borrowing or refinancing of an existing loan. Approximately 0.2% of the unpaid principal balance relating to the mortgage loans underlying the Initial Mortgage Servicing Rights have no FICO scores.

We anticipate that the FICO scores of the mortgage loans underlying the Planned Acquisition Assets will be similar to those loans currently underlying the Initial Mortgage Servicing Rights.

Loan-to-value ratio is the ratio of the outstanding balance of a mortgage loan to the estimated fair market value of the property securing the related mortgage loan as of the time of the most recent valuation of such property. A servicer will generally not obtain an updated estimated fair market property value for a mortgaged property unless the mortgage loan is delinquent. Thus, for loans that have never been seriously delinquent, the estimated fair market property value is generally the appraised value of the property at the time of origination. A servicer will obtain an updated estimated fair market property value for a property securing a mortgage loan when the loan becomes seriously delinquent and will generally receive a further updated estimate every 180 days thereafter. For properties that the servicer has foreclosed, the property value represents the current listing price for the property, where available, or the latest estimated fair market value of the property.

The table below sets forth the weighted average loan-to-value ratios, based on unpaid principal balance, for the mortgage loans underlying the Initial Mortgage Servicing Rights. The loan-to-value ratios in the left-hand column of the following table represent the average loan-to-value ratios for those mortgage loans for which the most recent estimated property value was received prior to January 1, 2010 (and which may have been at the time of loan origination). We have received updated estimated property values since January 1, 2010 for the properties securing approximately 67% of the unpaid principal balance relating to the mortgage loans underlying the Initial Mortgage Servicing Rights. Because a number of areas in the United States have been experiencing a decrease in the values of residential properties over the last several years, property value estimates that have not been recently updated may no longer accurately reflect the current value of a property. The loan-to-value ratios in the right-hand column represent the average loan-to-value ratios for those mortgage loans for which the most recent estimated property value was received between January 1, 2010 and June 30, 2012. Thus, we believe that the loan-to-value ratios shown in the right-hand column of the table are a better indication of the loan-to-value ratios for the mortgage loans underlying the Initial Mortgage Servicing Rights using current estimates of property values and would be similar to the values a lender would use to assess any new borrowing or refinancing of an existing loan.

We anticipate that the loan-to-value rations of the mortgage loans underlying the Planned Acquisition Assets will be similar to those loans currently underlying the Initial Mortgage Servicing Rights.

Prepayment speed refers to the annualized percentage by which the unpaid principal balance of a pool of mortgage loans declines due to ordinary amortization and monthly principal payments, early loan payoff due to refinancing or sale of the property, principal reduction loan modification or foreclosure and subsequent sale. Prepayment speed is a fundamental driver of the unpaid principal balance upon which servicing fees, subservicing expense, Mortgage Servicing Assets amortization expense, interest expense, servicing advances, match funded liabilities and the valuation of Mortgage Servicing Assets are based. Prepayment speed is driven by many external factors, including prevailing market mortgage interest rates, unemployment rates, real estate valuation trends and the ability of borrowers to qualify for new loans. In general, prepayment speeds for subprime and Alt-A mortgage loans tend to be more stable than for prime mortgage loans because subprime and Alt-A borrowers are less sensitive to interest rate fluctuations given that they have fewer refinancing opportunities and are less likely to qualify for new loans. The quality of the servicer or subservicer is also a significant determinant of prepayment speed as successful loss mitigation techniques tend to reduce prepayment speeds, as shown in the table below.

In general, prepayment speeds tend to decline as a pool of mortgage loans ages. The current industry prepayment speed assumption used by management to value the Initial Mortgage Servicing Rights is approximately 18% per annum. We anticipate that the prepayment speeds for the mortgage loans underlying the Planned Acquisition Assets will be similar to those loans currently underlying the Initial Mortgage Servicing Rights.

The overall increase in total assets of $557,516 and total liabilities of $375,449 during the six months ended June 30, 2012 primarily resulted from:

The assets acquired in the Initial Ocwen Purchase and Flow One Purchase included Notes receivable—Rights to MSRs which had a balance of $70,175 representing 12.5% of total assets at June 30, 2012. Notes receivable—Rights to MSRs are carried at fair value, which is determined based on an appraisal prepared with the assistance of an independent valuation firm and requires the use of significant unobservable inputs. The most significant assumptions used in the appraisal are:

The independent valuation firm reviewed the collateral attributes and the historical payment performance of the underlying mortgage servicing portfolio and compared them with similar mortgage servicing portfolios and with standard industry mortgage performance benchmarks to arrive at the assumptions set forth above. The selected collateral attributes and performance comparisons utilized were the voluntary prepayment performance, delinquency and foreclosure performance, operational cost comparison, average loan balance, weighted average coupon and note rate distribution, loan product type classification, geographic distribution and servicing advance behavior.

The unobservable inputs that have the most significant effect on the fair value of Notes receivable – Rights to MSRs are the mortgage loan prepayment rate projections and the interest rate projections; however, any significant increase (decrease) in discount rates, interest rates, mortgage loan prepayment projections or delinquency rate projections, each in isolation, would result in a substantially lower (higher) valuation.

Total equity amounted to $182,076 at June 30, 2012 as compared to $9 at December 31, 2011. This increase of $182,067 is primarily due to the proceeds of equity offerings of $185,994 less share issuance costs of $3,931, net income of $5,953 and dividends declared of $5,384. In addition, we recorded $565 of unrealized losses in other comprehensive loss on interest rate swaps that we designated as cash flow hedges.

We define liquidity as unencumbered cash balances plus unused collateralized advance financing capacity. Since our servicing advances and Mortgage Servicing Assets balances are self-liquidating over time, which means that we will generate cash flow as these assets amortize, we anticipate that in most periods operating cash flow will exceed our targeted dividend payout ratio of 90% of net income. We plan to accumulate excess cash to purchase additional Mortgage Servicing Assets that meet our acquisition criteria. Excess cash could also be used to reduce borrowing on advance financing facilities to reduce interest expense. If no such Mortgage Servicing Assets acquisition opportunities are identified, we may engage in repurchases of outstanding ordinary shares.

Over time, we expect to acquire substantially all of Ocwen Loan Servicing’s remaining mortgage servicing rights relating to subprime and Alt-A mortgage loans. As of June 30, 2012, these remaining mortgage servicing rights had approximately $91.2 billion of unpaid principal balance, a fair market value of $341.8 million and match funded servicing advances of approximately $4.4 billion.

Our ability to acquire Ocwen Loan Servicing’s remaining mortgage servicing rights will largely depend on our ability to enter into new match funded financing facilities and to raise additional capital through the sale of additional ordinary shares. While we do not currently have commitments for new match funded advance financing, we believe we are well positioned to obtain future financing facilities. Our ability to raise future equity capital is dependent on our ability to access the capital markets on attractive terms. In

addition, the provisions of our Articles of Association restrict our ability to issue and sell additional ordinary shares at a price below our then current net asset value per share without first obtaining the prior approval of holders of at least a majority of the outstanding ordinary shares voted with respect to such approval. Any issuance of additional ordinary shares would be dilutive to our existing shareholders, including shareholders that purchase in this offering.

Our primary sources of funds for near-term liquidity will be match funded liabilities and servicing fees. Our primary uses of funds will be funding servicing advances, payment of fees, interest and other operating expenses, purchases of additional Mortgage Servicing Assets and associated servicing advances and repayment of borrowings.

Our investment policies will emphasize principal preservation by limiting investments to include:

Our investment policies will seek to minimize credit and counterparty risk by establishing risk limits based on each counterparty’s long-term credit ratings. In assessing our liquidity outlook, our primary focus will be on two measures:

At June 30, 2012 the unused borrowing capacity on the existing match-funded advance financing facility that we assumed from Ocwen Loan Servicing was $145.8 million. However, our ability to draw on the unused borrowing capacity related to this existing match-funded advance financing facility is limited by the amount of eligible servicing advances related to the Initial Mortgage Servicing Rights securing such facility at any given time and is subject to all other conditions to borrowing being met. As of June 30, 2012 there were not sufficient eligible servicing advances related to the Initial Mortgage Servicing Rights securing such existing match-funded advance financing to support any additional borrowings under such facility. We plan to establish additional unused borrowing capacity under existing and new advance financing facilities in the future at a level that we consider prudent. We plan to maintain unused borrowing capacity in the event that:

Our ability to finance servicing advances will be a significant factor that affects our liquidity. The Advance Financing Facility is subject to decreases in the advance borrowing rate if deemed necessary by the rating agencies in order to maintain the minimum credit rating required for the facility. This advance financing facility is scheduled to expire in August 2013. Our ability to pledge collateral under the advance financing facility depends on the performance of the collateral.

As discussed in “Risk Factors” and elsewhere in this prospectus, ongoing inquiries into servicer foreclosure processes could result in actions by state or federal governmental bodies, regulators or courts that could result in an extension of foreclosure timelines. While the effect on our future servicing advance balances and liquidity is not expected to be material, a material extension in foreclosure timelines could result in an increase in future servicing advance balances, and advance rates under our advance financing

facilities may have to be reduced to maintain the required note ratings which could adversely affect liquidity. The negative impact of such an increase in servicing advances and a decrease in advance rates may be mitigated if we maintain adequate excess capacity on our advance financing facilities. Conversely, if foreclosure moratoria are imposed and we believe that servicing advances on foreclosed properties cannot be recovered in a timely manner, the servicer would potentially no longer be obligated to make servicing advances and may be able to recover existing servicing advances at the pool level, which could cause servicing advances to decrease. We will be indemnified by Ocwen Loan Servicing against any fines assessed for improper foreclosure practices.

Our advance financing facilities will require that we maintain minimum levels of liquid assets and earnings. Failure to comply with these covenants would result in restrictions on new borrowings or the early termination of our advance financing facilities.

We believe that our cash balance and unused advance financing capacity are sufficient to meet foreseeable requirements.

During the first half of 2012, we assumed an existing advance financing facility from Ocwen in connection with the Initial Ocwen Purchase. As of June 30, 2012, we had $145,842 of unused borrowing capacity. Our ability to continue to pledge collateral under our advance facility depends on the performance of the collateral. Currently, the large majority of our collateral qualifies for financing. The debt covenants for our Advance Facility require that we maintain minimum levels of liquid assets. Failure to comply with these covenants could result in restrictions on new borrowings or the early termination of our Advance Facility. We believe we are in compliance with these covenants and do not expect them to restrict our activities.

We are exposed to liquidity risk should the cash required to make new advances pursuant to servicing contracts and our agreements with Ocwen exceed the amount of advance repayments. In general, we finance our operations through operating cash flow and have an advance financing facility in place with sufficient capacity to cover the majority of cash required to make new advances. However, our advance financing facility contains borrowing conditions, which, if not met, could affect our ability to borrow on new advances and affect our liquidity.

Interest rate risk arises primarily from differences in cash balances that earn floating interest rates and incurred liabilities, such as match funded liabilities, that are subject to floating interest rates. Floating interest rate income and expenses are both expected to closely correlate with the one-month LIBOR rate. All of our borrowings as of the date of this prospectus are subject to floating interest rates.

We are party to interest rate swap agreements that we recognize at fair value. On the dates we entered into the interest rate swap agreements, we designated and documented them as hedges of the variable cash flows to be paid for floating rate interest expense on our borrowings (cash flow hedge). We assess and document quarterly the extent to which a derivative has been and is expected to continue to be effective in offsetting the changes in the fair value or the cash flows of the hedged item. To assess effectiveness, we use statistical methods, such as regression analysis, as well as nonstatistical methods including dollar-offset analysis. For a cash flow hedge, to the extent that it is effective, we record changes in the estimated fair value of the derivative in other comprehensive income. We subsequently reclassify these changes in estimated fair value to net income in the same period, or periods, that the hedged transaction affects earnings and in the same financial statement category as the hedged item.

If a derivative instrument in a cash flow hedge is terminated or the hedge designation is removed, we reclassify related amounts in accumulated other comprehensive income into earnings in the same period or periods during which the cash flows that were hedged affect earnings. In a period where we determine that it is probable that a hedged forecasted transaction will not occur, any related amounts in accumulated other comprehensive income are reclassified into earnings in that period.

If interest rates were to increase by 1% on our variable rate advance financing and interest earning cash balances, we estimate a net positive impact of approximately $0.4 million on our net income resulting from an increase of $1.4 million in annual interest income compared to an increase of $1.0 million in annual interest expense, net of the impact of our interest rate hedges.

The following table presents a summary of our cash flows for the periods ended June 30:

Six months ended June 30, 2012. Our operating activities provided $91,036 of cash. Components of operating cash flow included amounts provided by reductions in servicing advances of $75,559 and by our net income of $5,953, adjusted for amortization of debt issuance costs of $2,271. Additional cash flows were generated by decreases in other assets of $343 and increases in other liabilities of $6,910.

Our investing activities used $239,102 of cash during the six months ended June 30, 2012 to acquire Rights to MSRs, advances and other related assets net of liabilities assumed in connection with the Initial Ocwen Purchase. We based the purchase price that we paid to close the Initial Ocwen Purchase using estimated closing date values. On March 31, 2012, we determined that the final purchase price should be $138,792 and recorded $11,006 due from Ocwen, which was received on May 1, 2012, in connection with the Flow One Purchase. Additionally, we paid $25,940 to Ocwen for the Flow One Purchased Assets net of the $77,886 of new borrowings on the advance facility with Barclays Bank PLC which is reflected in the financing section of the cash flow. Lastly, we had a reduction in Notes receivable—Rights to MSRs of $3,516.

Our financing activities provided $184,241 of cash from the proceeds of our initial public offering and a concurrent private placement of our ordinary shares and over-allotment exercise offset by payments of offering costs, debt issue costs for the transfer of the advance financing facility, repayments of match funded liabilities and dividends paid to shareholders.

Six months ended June 30, 2011. We were a development stage enterprise until the date of the completion of our initial public offering and a concurrent private placement of our ordinary shares and Initial Ocwen Purchase on March 5, 2012. We used $3 of cash for operating activities during the six months ended June 30, 2011 which consisted of a net loss of $44; the net loss was offset by an increase in other liabilities of $30 and decrease in other assets of $11.

We believe that we have adequate resources to fund all unfunded commitments to the extent required and meet all contractual obligations as they come due. Such contractual obligations include our interest payments and operating leases. The following table sets forth certain information regarding amounts we owe to others under contractual obligations as of June 30, 2012:

We sublease office space from Altisource in Atlanta, Georgia and West Palm Beach, Florida in the aggregate of $7 per month. The leases terminate on October 31, 2014.

We exclude match funded liabilities from the contractual obligation table above because it represents non-recourse debt that has been collateralized by match funded advances which are not available to satisfy general claims against us. Holders of the notes issued by the SPE have no recourse against any assets other than the match funded advances that serve as collateral for the securitized debt. Actual interest on match funded liabilities was $2,913 and $3,703 during the three and six months ended June 30, 2012, respectively. Future interest expense may vary depending on utilization, changes in LIBOR and spreads and the execution of hedging strategies.

In the normal course of business, we may engage in transactions with a variety of financial institutions and other companies that we do not reflect on our Interim Condensed Consolidated Balance Sheet. We are subject to potential financial loss if the counterparties to our off-balance sheet transactions are unable to complete an agreed upon transaction. We seek to limit counterparty risk through financial analysis, dollar limits and other monitoring procedures. We have also entered into non-cancelable operating leases principally for our office facilities.

Derivatives. We record all derivative transactions at fair value on our Interim Condensed Consolidated Balance Sheet. We use these derivatives primarily to manage our interest rate risk. The notional amounts of our derivative contracts do not reflect our exposure to credit loss.

Our financial statements include the accounts of Home Loan Servicing Solutions, Ltd. and its direct and indirect wholly owned subsidiaries, HLSS Holdings and HLSS Management, LLC. We eliminate intercompany accounts and transactions in consolidation.

We evaluate each special purpose entity (“SPE”) acquired in connection with the Ocwen Transactions for classification as a Variable Interest Entity (“VIE”). If an SPE meets the definition of a VIE and we determine that we are the primary beneficiary, we include the SPE in our consolidated financial statements. See “The Business—Description of Purchase Agreement” for additional information relating to the SPEs that were acquired in connection with the Ocwen Transactions.

Involvement with an SPE. We use an SPE in the financing of our servicing advances. We use a match funded securitization facility to finance our servicing advances. The SPE to which the advances are transferred in the securitization transaction is included in our Interim Condensed Consolidated Financial Statements because we are the primary beneficiary of the SPE which is also a VIE. The holders of the debt of this SPE can look only to the assets of the SPE for satisfaction of the debt and have no recourse against HLSS.

VIEs. If we determine that we are the primary beneficiary of a VIE, we report the VIE in our Interim Condensed Consolidated Financial Statements. As of June 30, 2012, we have no VIEs other than our advance financing SPE.

The need to estimate the impact or outcome of future events influences our ability to measure and report our operating results and financial position. Our critical accounting policies relate to the estimation and measurement of these risks. Because they inherently involve significant judgments and uncertainties, an understanding of these policies is fundamental to understanding Management’s Discussion and Analysis of Results of Operations and Financial Condition. The following is a summary of our more subjective and complex accounting policies as they relate to our overall business strategy.

Valuation of Notes Receivable—Rights to MSRs and Recognition of Interest Income

Accounting Standards Codification (“ASC”) 860, Transfers and Servicing, specifically prohibits accounting for a transfer of servicing rights as a sale if legal title to such servicing rights has not passed to the purchaser. As a result, during the period before we receive the Required Third Party Consents related to the Initial Mortgage Servicing Rights, we are required to account for the purchase of the Rights to MSRs as a financing. We initially recorded the Notes receivable—Rights to MSRs at the purchase price of the Rights to MSRs. We amortize the Notes receivable—Rights to MSRs using the prospective interest method of accounting. At each reporting date, we calculate the present value of the net cash flows related to the then outstanding UPB of the underlying Initial Mortgage Servicing Rights and adjust the carrying value of the Notes receivable—Rights to MSRs to this amount. We deduct the change in the carrying value of the Notes receivable—Rights to MSRs from the net servicing fees received by us with respect to the Initial Mortgage Servicing Rights and the servicing fees paid to Ocwen with respect to the Initial Mortgage Servicing Rights, and record the resulting amount as interest income. Interest income is our primary source of income prior to receiving the Required Third Party Consents.

Other than transfer of legal title, we believe we meet all the other criteria under ASC 860 for the transfer of the Initial Mortgage Servicing Rights for sales treatment.

We establish the value of the Notes receivable—Rights to MSRs based on an appraisal prepared with the assistance of an independent valuation firm. We summarize the most significant assumptions used in the appraisal below:

The independent valuation firm reviews the collateral attributes and the historical payment performance of the underlying mortgage servicing portfolio and compares them with similar mortgage servicing portfolios and with standard industry mortgage performance benchmarks to arrive at the assumptions set forth above. The selected collateral attributes and performance comparisons utilized were the voluntary prepayment performance, delinquency and foreclosure performance, operational cost comparison, average loan balance, weighted average coupon and note rate distribution, loan product type classification, geographic distribution and servicing advance behavior.

financial reporting. The amendments clarify the FASB’s intent about the application of existing fair value measurement and disclosure requirements and prescribe certain additional disclosures about fair value measurements, including (i) for fair value measurements within Level 3 of the fair value hierarchy, disclosing the valuation process used and the sensitivity of fair value measurement to changes in unobservable inputs and (ii) for items not carried at fair value but for which fair value must be disclosed, categorization by level of the fair value hierarchy. Our adoption of this standard effective January 1, 2012 did not have a material impact on our Interim Condensed Consolidated Financial Statements.

ASU 2011-05 (ASC 220, Comprehensive Income): Presentation of Comprehensive Income. Current U.S. GAAP allows reporting entities three alternatives for presenting other comprehensive income and its components in financial statements. One of those presentation options is to present the components of other comprehensive income as part of the statement of changes in stockholders’ equity. This ASU eliminates that option. This ASU also requires consecutive presentation of the statement of net income and other comprehensive income and requires that an entity present reclassification adjustments from other comprehensive income to net income by component on the face of both the statement of net income and the statement of other comprehensive income. ASU 2011-12, issued on December 23, 2011, defers indefinitely the provision regarding the presentation of reclassification adjustments. Our adoption of this standard effective January 1, 2012 did not have a material impact on our Interim Condensed Consolidated Financial Statements.

Inquiries into servicer foreclosure practices are continuing and may result in action by state or federal government bodies, regulators or courts that could have an adverse effect on the average foreclosure timelines and increase the amount of servicing advances. The average number of days for Ocwen Loan Servicing to complete a foreclosure action during 2011 increased by 133 days in judicial foreclosure states and 32 days in traditional non-judicial foreclosure states as compared to 2010 averages. In the first six months of 2012, foreclosure timelines increased by an additional 102 days in judicial foreclosure states and 34 days in traditional non-judicial foreclosure states as compared to 2011 averages. Despite this timeline extension, the 90 plus day non-performing delinquency rate on all of the mortgage loans serviced by Ocwen Loan Servicing as a percentage of the unpaid principal balance of the underlying mortgage loans that it services has decreased from 27.9% at December 31, 2011 to 24.5% at June 30, 2012. Ocwen has informed us that it believes this improvement occurred because modifications, especially related to the portfolio of mortgage loan servicing it acquired in connection with the acquisition of Litton Loan Servicing LP, drove down delinquency rates and obviated foreclosure and because fewer loans entered delinquency as early intervention loss mitigation improved. It is not possible to predict the full financial impact of changes in foreclosure practices, but if the extension of timelines causes delinquency rates to rise, this could lead to a delay in the amount of servicing fees collected, an increase in operating expenses and an increase in the advance ratio. An increase in the advance ratio could lead to a need for us to increase our borrowings which would lead to higher interest expense, and could also lead to a decrease in the amount we are able to borrow under the existing advance financing facility.

Recent activities by certain residential mortgage-backed security investor groups bring the prospect of greater investor involvement in mortgage loan servicing and the possibility that investors may seek to transfer servicing on some seasoned non-agency securitized loan pools to servicers they deem to be of higher quality in order to improve returns. Many of the pooling and servicing agreements for subprime and Alt-A mortgage loans contain servicer termination events or events of default for the servicer based upon the number of delinquent loans, the loss performance of the related mortgage loans or servicer ratings downgrades. A significant number of the pooling and servicing agreements relating to the Initial Mortgage Servicing Rights contain servicer termination events or events of default of this type, all of which have been

triggered. If Ocwen Loan Servicing is terminated as servicer prior to the transfer of an Initial Mortgage Servicing Right to us as a result of exceeding the maximum delinquency rates or loss limits or we are terminated as servicer for the same reason following such transfer, neither we nor Ocwen Loan Servicing, as applicable, may have any right to compensation from the trustee of the securitization trust for the loss of such mortgage servicing right, which could cause an impairment of our related Mortgage Servicing Assets. Notwithstanding the foregoing, we expect to be reimbursed from collections on the related mortgage loans for any outstanding servicing advances as the related loans are brought current, modified, liquidated or charged off, and we expect to collect any outstanding servicing advances in full. If servicing is deemed to have been lost because of Ocwen Loan Servicing’s servicing practices prior to the transfer of legal ownership of the Initial Mortgage Servicing Rights to us, Ocwen Loan Servicing will be responsible for reimbursing us in accordance with a predetermined schedule intended to reflect the expected amortized value of the Initial Mortgage Servicing Rights at the time the servicing was lost. If the servicing is deemed to be lost because of Ocwen Loan Servicing’s servicing practices while performing servicing functions for us pursuant to the Subservicing Agreement, Ocwen Loan Servicing will be responsible for reimbursing us for the amortized book value of the applicable Mortgage Servicing Assets at the time the servicing was lost.

Certain borrowers have recently challenged the foreclosure of their properties by claiming that the foreclosure was improper because the servicer was unable to provide a chain of continuous ownership of the mortgage loan from the originator of the mortgage loan to the securitization trustee. Borrowers have had some success with such defenses. For example, the Massachusetts Supreme Court recently ruled that a foreclosure was improper because the plaintiff was unable to provide a chain of continuous ownership of the mortgage loan from the originator of the mortgage loan to the securitization trustee. This ruling only pertains to foreclosures in Massachusetts. Best servicing practices would have the servicer complete the assignment of the loan prior to initiating foreclosure. Ocwen Loan Servicing has informed us that it is not aware of any assignment issues with respect to the mortgage loans underlying the Initial Mortgage Servicing Rights, and any losses relating to improper assignments by Ocwen Loan Servicing would be recoverable by us from Ocwen Loan Servicing pursuant to our agreements with it. Deficiencies in documentation of loan ownership could nonetheless result in delayed recovery of servicing advances, which could have an adverse impact on our financial results.

In addition to the possibility that servicing could be transferred between servicers, there is also the possibility that the servicing of certain mortgage loans may be transferred as a result of loan put-backs. A loan put-back is a request by the securitization trustee for the originator of the loan or the party that transferred the loan to the securitization to repurchase the loan at par. These requests generally arise because the originator or transferor is found to have breached representations or warranties made at the time of origination or securitization. Ocwen Loan Servicing has informed us that it has not experienced any third-party loan put-back requests with respect to mortgage loans that it originated. Generally, delinquent loans or loans which have already been resolved at a loss to the investor are the most likely loans to be put back to the originator. Although put-backs could reduce the amount of servicing fees collected, the effect on profitability could be positive because delinquent loans require higher advances than performing loans. While put-backs have the potential to reduce unpaid principal balance and affect mortgage servicing rights valuations, it is not clear whether the change in value would be adverse or that the change in the notes receivable or mortgage servicing rights value, even if adverse, would result in any impairment.

We have entered into certain agreements with Ocwen, Ocwen Loan Servicing and Altisource that govern the ongoing relationships among these parties. We have also entered into agreements with Ocwen and its affiliates in connection with the existing advance financing facility. See “The Business” for a more detailed description of the following related party agreements.

Purchase Agreement. This agreement, in conjunction with the initial sale supplement, sets forth the terms of our purchase of the Aggregate Purchased Assets from Ocwen Loan Servicing. We pay Ocwen Loan Servicing a monthly base fee equal in the aggregate to 12% of the servicing fees collected for that month with respect to the Initial Mortgage Servicing Rights. So long as the Required Third Party Consents have not been obtained with respect to the transfer of legal ownership of any Initial Mortgage Servicing Right, Ocwen Loan Servicing remains obligated to perform its obligations as servicer under the related pooling and servicing agreement, we are required to purchase any servicing advances that Ocwen Loan Servicing is required to make pursuant to such pooling and servicing agreement and Ocwen Loan Servicing is prohibited from taking actions inconsistent with our right to acquire legal ownership of the related mortgage servicing right upon receipt of the Required Third Party Consents. The agreement includes customary representations and warranties made by Ocwen Loan Servicing with respect to the Aggregate Purchased Assets, and provides for indemnification to us for any losses we suffer as a result of the breach of such representations and warranties.

Subservicing Agreement. This agreement, in conjunction with the initial subservicing supplement, provides for the appointment of Ocwen Loan Servicing to act as the subservicer of the mortgage loans underlying the Initial Mortgage Servicing Rights upon the transfer of legal ownership of the Initial Mortgage Servicing Rights to us. With respect to the Initial Purchased Assets, the Subservicing Agreement has an initial term ending six years from the closing of the Initial Ocwen Purchase. With respect to the Flow One Purchased Assets, the Subservicing Agreement has an initial term ending six years from the closing of the Flow One Purchase. This agreement also provides a framework for us to engage Ocwen Loan Servicing as subservicer for any mortgage servicing rights we acquire legal ownership of in the future.

Pursuant to the Subservicing Agreement, we pay Ocwen Loan Servicing a base subservicing fee equal in the aggregate to 12% of the servicing fees collected for that month with respect to any Initial Mortgage Serving Rights that we acquire legal ownership of following receipt of the applicable Required Third Party Consents. The monthly base fee payable to Ocwen Loan Servicing is expressed as a percentage of the servicing fees actually collected in any given month because servicing fees collected vary from month to month based on the level of collections of principal and interest for the mortgage loans serviced.

Ocwen Loan Servicing also receives a monthly performance based incentive fee to the extent the servicing fees collected for a given month exceed the retained fee. The percentage used to calculate the retained fee changes in the fourth and seventh months following the closing of the Initial Ocwen Purchase and every six months thereafter in accordance with a predetermined schedule. If we do not receive an amount equal to the retained fee in any given month, as expressed in terms of basis points of the average unpaid principal balance of the mortgage loans serviced, a shortfall in our targeted gross servicing margin percentage will occur. Ocwen Loan Servicing will not earn any performance based incentive fees for any month that there is such a shortfall, or in any subsequent month, until we have recovered such shortfall from amounts that would otherwise be available to pay future performance based incentive fees to Ocwen Loan Servicing.

The performance based incentive fee payable in any month will be reduced if the advance ratio exceeds a predetermined level for that month that is intended to target our return threshold. If the advance ratio is exceeded in any month, any performance based incentive fee payable for such month will be reduced by an amount equal to 6.5% per annum of such excess servicing advances.

Servicing Advance Facility Agreements. Simultaneously with the closing of our initial public offering and the Initial Ocwen Purchase, we entered into the Servicing Advance Facility Agreements pursuant to which we assumed all of Ocwen Loan Servicing’s rights and obligations under its advance financing facility

under which the servicing advances associated with the Initial Mortgage Servicing Rights were funded. The Servicing Advance Facility Agreements provide for our assumption of the rights and obligations of Ocwen, as administrator, and Ocwen Loan Servicing, as seller and servicer under the documents related to the advance financing facility, and the release of Ocwen and Ocwen Loan Servicing from their respective obligations, in and under the existing advance financing facility, and for certain amendments to the facility to accommodate the assumption of such facility. We will not replace Ocwen Loan Servicing as servicer under the Servicing Advance Facility Agreements with respect to any pooling and servicing agreement, and Ocwen Loan Servicing will remain a party to the Servicing Advance Facility Agreements as servicer with respect to each pooling and servicing agreement, until the related mortgage servicing right is transferred to us, and we become the servicer under such pooling and servicing agreement.

Ocwen Professional Services Agreement. This agreement requires us to provide certain services to Ocwen, and for Ocwen to provide certain services to us, for an initial term of six years, subject to renewal, with pricing terms intended to reflect market rates. Services provided by us under this agreement include pricing and valuation analysis of potential mortgage servicing rights acquisitions, treasury management and other similar services. Services provided by Ocwen under this agreement include legal, licensing and regulatory support services, risk management services and other similar services. The fees we charge Ocwen and the fees that Ocwen charges us are based on the actual costs incurred by the party performing the service plus an additional markup of 15%.

Altisource Administrative Services Agreement. This agreement requires Altisource to provide certain administrative services to us for an initial term of six years, subject to renewal with pricing terms intended to reflect market rates. Services provided to us under this agreement include human resources administration (benefit plan design, recruiting, hiring and training and compliance support), legal and regulatory compliance support services, general business consulting, corporate services (facilities management, security and travel services), finance and accounting support services (financial analysis, financial reporting and tax services), risk management services, vendor management and other related services. The fees we pay Altisource are based on the actual costs incurred by them plus an additional markup of 15%.

Private Placement. On March 5, 2012, simultaneously with our initial public offering, William C. Erbey, the founder of our company and the Chairman of the Board of Directors, purchased 714,285 of our ordinary shares at a price per share equal to the IPO price in a private placement exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”) pursuant to Section 4(2). The total proceeds from the private placement to us were $10.0 million. No underwriting discounts or commissions were paid in respect of these shares.

Over Allotment Exercise. On April 2, 2012, we issued 129,600 additional ordinary shares to the underwriters in connection with the exercise of their over-allotment option under the IPO. The total gross proceeds from the issuance of these additional shares to HLSS were $1.8 million. After deducting underwriting discounts, commissions and expenses payable by HLSS, the aggregate net proceeds we received was $1.6 million.

Market risk includes liquidity risk and interest rate risk. Market risk also reflects the risk of decline in the valuation of financial instruments and the collateral underlying loans. Our Investment Committee reviews significant transactions that may impact market risk and is authorized to utilize a wide variety of techniques and strategies to manage market risk including, in particular, interest rate risk. See the Liquidity and Capital Resources sections for additional discussion of liquidity and interest rate risks.

We are a Cayman Islands exempted company that acquires mortgage servicing assets consisting of mortgage servicing rights, rights to mortgage servicing rights, associated servicing advances and other related assets. We launched our operations on March 5, 2012, using the proceeds from our initial public offering and a concurrent private placement with our founder and Chairman of our Board of Directors to acquire mortgage servicing assets related to a portfolio with $15.2 billion unpaid principal balance from Ocwen Loan Servicing, LLC, or Ocwen Loan Servicing. We do not originate or purchase mortgage loans, and as a result we are not subject to the risk of loss related to the origination or ownership of mortgage loans. We have engaged Ocwen Loan Servicing, a high quality residential mortgage loan servicer, to service the mortgage loans underlying our mortgage servicing assets and therefore have not and do not intend to develop our own mortgage servicing platform. While we have only completed one full quarter of operations, we believe that our revenue and expense structure is predictable and will generate a stable income stream and that the quality of our assets is and will continue to be strong. We believe this combination will accomplish our primary objective of delivering attractive and consistent risk-adjusted returns to our shareholders. We intend to distribute at least 90% of our net income over time to our shareholders in the form of a monthly cash dividend. In addition, unlike many income-oriented investment alternatives, we believe that our income stream and the valuation of our assets are not substantially correlated to movements in interest rates.

The results for our first full quarter of operations ended on June 30, 2012, reflect consistent earnings that were in line with our expectations and exceeded the dividends declared for the period by approximately $400,000. The valuation of our assets for the period was stable. Ocwen Loan Servicing’s performance was strong, with delinquencies continuing to decrease and the advance ratio declining slightly faster than targeted in the Purchase Agreement. From an operational perspective, the transactions between Ocwen Loan Servicing and HLSS Holdings, our wholly owned subsidiary that holds our mortgage servicing assets, were completed as planned, and we believe that all servicing requirements under the pooling and servicing agreements were met in all material respects. Having achieved our business and financial objectives in the first quarter, we purchased additional assets from Ocwen Loan Servicing that are substantially similar to our initial portfolio under substantially similar terms.

Our executive management team has extensive experience in the mortgage servicing industry and each of our executive managers was formerly in a senior management role at Ocwen. We believe our executive management team’s extensive experience provides us with the ability to assess the vital characteristics of the mortgage loans underlying the mortgage servicing assets we have acquired and may seek to acquire and evaluate the quality of our current and potential mortgage servicers. We believe this experience further enables us to accurately value mortgage servicing assets and better forecast future asset performance and servicing cash flows. In addition, our management team has demonstrated historical success in arranging cost-effective servicing advance financing through a variety of economic cycles.

Our business strategy is focused on acquiring mortgage servicing rights. In many cases, however, the transfer of legal ownership of mortgage servicing rights requires the prior approval or consent of various third parties, including rating agencies. If the seller from whom we have agreed to purchase mortgage servicing rights has not obtained the necessary approvals and consents to transfer legal ownership of the mortgage servicing rights to us, we will instead seek to acquire the rights to receive the servicing fees that the current servicer is entitled to receive, and the current servicer will continue to service the mortgage loans and receive compensation from us for its servicing activities. Upon receipt of the necessary third party approvals and consents, the seller is obligated to transfer legal ownership of the mortgage servicing rights to us without any additional payment. Whether we acquire mortgage servicing rights or Rights to MSRs, we also acquire servicing advances and other associated assets. We do not believe that our business strategy or economic performance has been or will be materially affected by whether we directly own mortgage servicing rights or the related Rights to MSRs. All of our acquisitions of mortgage servicing

assets to date have been structured as acquisitions of Rights to MSRs and we expect that any additional acquisitions of mortgage servicing assets will be structured in the same manner at least in the near term.

As of the date of this prospectus, all of the Rights to MSRs that we have acquired are serviced by Ocwen Loan Servicing. We have not and do not intend to develop our own mortgage servicing platform but instead will rely on high quality third-party residential mortgage loan servicers. Ocwen Loan Servicing is a leader in the residential subprime and Alt-A mortgage servicing industry based on its historical servicing performance through a variety of real estate and economic cycles. Prior to the transfer of legal ownership of any Ocwen Mortgage Servicing Rights to us, Ocwen Loan Servicing will remain obligated to service the underlying mortgage loans and will remit to us the servicing and other related fees (excluding any ancillary income that Ocwen Loan Servicing will retain) it collects in each month related to the Rights to MSRs. Following the transfer of legal ownership of any Ocwen Mortgage Servicing Rights to us, Ocwen Loan Servicing will service the underlying mortgage loans on our behalf as subservicer, and we will receive the servicing and other related fees (excluding any ancillary income). As compensation for its servicing and subservicing activities, Ocwen Loan Servicing receives from us a monthly base fee initially equal to 12% of such recognized servicing fees collected each month. Ocwen Loan Servicing also earns a monthly performance-based incentive fee that fluctuates based on collections and servicing advance reduction criteria with respect to the underlying mortgage loans. We believe this arrangement aligns the interests of both companies. We will compensate Ocwen Loan Servicing for the services it performs for us prior to the transfer of legal ownership of the Ocwen Mortgage Servicing Rights to us. The method used to calculate the fees that we pay to Ocwen Loan Servicing under the Purchase Agreement with respect to the Rights to MSRs is the same as the method used to calculate the fees that we will pay to Ocwen Loan Servicing under the Subservicing Agreement with respect to any Ocwen Mortgage Servicing Rights that we subsequently acquire. As a result, the compensation to be paid to Ocwen Loan Servicing will not vary based on whether Ocwen Loan Servicing or we hold legal title to the underlying Ocwen Mortgage Servicing Rights.

We intend to continue to acquire additional similar mortgage servicing assets from Ocwen in the near term in two ways:

As of August 1, 2012, we have made purchases of Rights to MSRs from Ocwen Loan Servicing related to approximately $20.2 billion of unpaid principal balance of mortgage loans.

We intend to use the proceeds from this offering to purchase additional mortgage servicing rights and other related fees, associated servicing advances to date and other related assets from Ocwen Loan Servicing. The specific mortgage servicing assets that we expect to purchase from Ocwen Loan Servicing with the proceeds from this offering have not been identified, however we expect that the mortgage servicing assets will be similar to those that we have acquired from Ocwen Loan Servicing to date. The closing of this offering is not conditioned upon the completion of the purchase of additional mortgage servicing assets from Ocwen Loan Servicing.

Although we believe that competitive and regulatory dynamics in the mortgage servicing industry will present us with opportunities to acquire Mortgage Servicing Assets from banks, other financial institutions and independent mortgage servicers and we remain open to purchasing mortgage servicing assets from third parties other than Ocwen Loan Servicing, given the large amount of servicing assets remaining at Ocwen Loan Servicing, we do not view initiating purchases from other third parties as a near-term priority. The provisions of our Amended and Restated Memorandum and Articles of Association (“Articles of Association”) restrict our ability to issue and sell additional ordinary shares at a price below our then current net asset value per share without first obtaining the prior approval of holders of at least a majority of the outstanding ordinary shares voted with respect to such approval. Future sales of ordinary shares by us will dilute the ownership percentage of our then-existing shareholders, including shareholders that purchase in this offering.

We were incorporated as an exempted company in the Cayman Islands, which currently does not levy income taxes on individuals or companies. We expect to be treated as a PFIC under U.S. federal income tax laws. We intend to distribute at least 90% of our net income over time to our shareholders in the form of a monthly dividend, although we are not required by law to do so. Payment of a monthly dividend is not a condition of our tax status, and our decision to pay this dividend is not expected to be impacted by any changes in our status for U.S. tax purposes. Except for our subsidiary that is taxed as a corporation for U.S. federal income tax purposes, we do not expect to be treated as engaged in a trade or business in the United States and thus do not expect to be subject to more than a nominal amount of U.S. federal income taxation.

Dividends are payable to holders of record of our ordinary shares on the last business day of each such month, subject to all applicable laws, and will be paid on the 10th day of the immediately following month, or the first business day thereafter if such payment date falls on a weekend or holiday.

Since our initial public offering, we paid the following dividends, on a per share basis:

The following table sets forth the record and payment dates of dividends that have been declared by our Board of Directors, but are unpaid:

Our business model is predicated on purchasing mortgage servicing rights, rights to fees and other income from servicing mortgage loans and associated servicing advances and engaging one or more high-quality residential mortgage loan servicers to service the pools of mortgage loans underlying our mortgage servicing rights. We believe this unique strategy will result in attractive risk-adjusted returns for our shareholders that are not dependent on future asset appreciation. The key attributes of our business model are as follows:

Stable Income Stream. We expect that our interest income from the Notes Receivable—Rights to MSRs will remain stable during the period before we receive the Required Third Party Consents related to the Initial Mortgage Servicing Rights. Interest income from the Notes Receivable—Rights to MSRs is driven primarily by the gross servicing margin percentage we have negotiated with Ocwen Loan Servicing and will be offset by periodic amortization of the Notes Receivable—Rights to MSRs which we do not believe will experience significant volatility. After we receive the Required Third Party Consents and become the legal owner of any of the Initial Mortgage Servicing Rights, we expect the servicing fees we receive and the fee expenses we incur will result in a gross servicing margin percentage, which will range from 32.5 to 22.0 basis points in accordance with a pre-determined schedule set forth in the applicable subservicing supplement related to the Initial Mortgage Servicing Rights. Our primary costs other than fee expenses include interest expense and mortgage servicing rights amortization expense. We hedge against increases in interest rates and do not expect our mortgage servicing rights amortization expense will experience significant volatility.

Stable Balance Sheet. Servicing advances are our largest asset class and comprise 76.7% of our total assets as of June 30, 2012. Servicing advances are relatively low risk assets because they are generally recoverable from loan and pool level proceeds over a relatively short period of time. The advance ratio relating to the Initial Mortgage Servicing Rights was 2.5% as of June 30, 2012 resulting in significant over collateralization and low credit risk. We expect the advance ratio to continue to decline over time.

The Notes Receivable—Rights to MSRs relating to subprime and Alt-A mortgage loans is our second largest asset class but only comprise 12.5% of our total assets as of June 30, 2012. The Notes Receivable—Rights to MSRs is valued, in part, based on the expected life of the pool of mortgage loans underlying such Mortgage Servicing Assets. Prepayment speeds relating to subprime and Alt-A mortgage loans, which comprise all of our Initial Mortgage Servicing Rights, are relatively insensitive to interest rate fluctuations as these borrowers often do not have the ability to refinance their loans. In addition, high delinquency rates are included in the current and future assumptions driving the valuation of Initial Mortgage Servicing Rights. As a result, we do not anticipate significant variability in the expected life of the Notes Receivable—Rights to MSRs.

We recorded the Notes Receivable—Rights to MSRs at acquisition cost and amortize them using the prospective interest method. Under this method of accounting, the principal amount at the end of each reporting period is adjusted to the estimated value of its future cash flows. We intend to hold the Mortgage Servicing Assets we acquire to maturity, and therefore we do not expect earnings volatility as a result of realized gains or losses that could result from secondary market asset sales.

Non-Correlated Returns. While we expect our interest income and gross servicing margin to vary based on the unpaid principal balance of the mortgage loans underlying the Initial Mortgage Servicing Rights, we do not expect our interest income or gross servicing margin percentage to vary as a result of changes in market interest rates due, in part, to our hedging strategy. Changes in prepayment speeds can, however, affect the unpaid principal balance of the mortgage loans underlying the Initial Mortgage

Servicing Rights, which will impact future servicing fees received. Historically, as interest rates rise, fewer borrowers voluntarily prepay their loans by refinancing or selling their homes. Lower voluntary prepayments would result in higher levels of unpaid principal balance, which ultimately would lead to higher servicing fee revenue. Voluntary prepayments have remained low for a number of years despite the low interest rate environment due to a lack of refinancing alternatives for subprime and Alt-A borrowers. We expect this trend to continue in an improving economy and a rising interest rate environment.

We believe the valuation of our assets is not substantially correlated to movements in interest rates. Servicing advances do not earn interest and are self-liquidating over a short period of time. The value of mortgage servicing rights has historically demonstrated a negative correlation with changes in interest rates, although less so for the subprime and Alt-A segments compared to the prime segment. We do not believe that the risk of increasing prepayments in a falling interest rate environment is as great as the opportunity for decreasing prepayments in a rising interest rate environment. This is because the availability of capital to refinance existing subprime and Alt-A mortgage loans has been severely constrained, and loan-to-value ratios for existing properties have materially increased. In addition, certain loan modification programs have reduced the applicable interest rate on mortgage loans to levels below the prevailing mortgage rates available to even the most creditworthy borrowers. The result has been that, despite a significant decrease in interest rates during this time period, far fewer mortgage loans have been refinanced than historical experience would suggest. We believe low prepayment speeds will persist for the foreseeable future.

Self-Hedging Assets. Prepayment speeds and interest rates are key variables that affect our economic performance. We believe these variables are largely self-hedging. The negative effects resulting from the movement of one variable are potentially offset by corresponding benefits resulting from the movement of another variable. While changes in these variables do not perfectly offset one another, we believe there is sufficient correlation to enable us to effectively mitigate residual negative effects through direct actions, such as hedging interest rates. For example, increases in interest rate assumptions relating to the cost of financing servicing advances will increase interest expense. This negative effect would be partially offset by the float earnings we recognize, which increase as interest rates rise assuming no change in float balances. Increases in interest rates also have the effect of reducing prepayment speeds, which would extend the life of the Initial Mortgage Servicing Rights and thus the servicing fee revenue we recognize.

Our primary source of revenue is the servicing fees we are entitled to receive with respect to the Mortgage Servicing Assets. Servicing fees are based on the unpaid principal balance of the mortgage loans serviced pursuant to each pooling and servicing agreement and are contractually set in these agreements. Servicers generally receive their servicing fees out of collections of principal and interest payments by borrowers on the mortgage loans they are servicing. For current loans, the servicing fee is typically received in the same month that the principal and interest payments are paid. Servicing fees for delinquent loans are generally received as the related loan is brought current, modified, liquidated or charged off. We believe that the risk of a servicer not ultimately receiving the contractual servicing fees for delinquent loans is remote. We also earn other income representing fees for services that we provide to Ocwen under the Ocwen Professional Services Agreement.

Our expenses consist of fee expenses, interest expense on servicing advances, mortgage servicing rights amortization expense and administrative expense. Our fee expenses are based on the amount of principal and interest collections on the mortgage loans underlying our Mortgage Servicing Assets. We amortize mortgage servicing rights under the amortization method of accounting. The amount of amortization expense is driven primarily by long-term expectations for the prepayment speed of the underlying loans to be determined periodically by third-party appraisers. Interest expense is based on the amount of borrowing necessary to fund servicing advances and the applicable interest rate on those borrowings. We hedge the risk of increases in interest rates on our borrowings through interest rate swap

agreements. Administrative expenses consist of salaries, wages, payroll taxes, benefits and general administrative costs related to being a public company.

The following is a summary description of the primary components of net income that we generate from our Mortgage Servicing Assets and which is available for dividend payments. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Primary Components of Income.”

For any period of time during which we own Mortgage Servicing Assets for which we have received the Required Third Party Consents related to some, but not all, of the Initial Mortgage Servicing Rights, we will include both interest income and servicing fee revenue and expense in the components of net income.

Interest Income—Notes Receivable—Rights to MSRs. Prior to obtaining the Required Third Party Consents related to an Initial Mortgage Servicing Right, we account for the related Right to MSRs as a Notes Receivable—Rights to MSRs, financial assets that earns interest income rather than servicing fee revenue. We amortize the Notes Receivable—Rights to MSRs using the prospective interest method of accounting. At each reporting date, we calculate the future expected net cash flows related to the underlying Initial Mortgage Servicing Rights and adjust the carrying value of the Notes Receivable—Rights to MSRs to this amount. The change in the value of the Notes Receivable—Rights to MSRs reflects the periodic amortization of the notes receivable and is deducted from the net of the servicing fees received from the Initial Mortgage Servicing Rights and the servicing fees paid to Ocwen Loan Servicing, and the resulting amount is recorded as interest income.

Servicing Fee Revenue. Upon receipt of the Required Third Party Consents related to an Initial Mortgage Servicing Right, we will account for the Notes Receivable–Rights to MSRs balance related to such Initial Mortgage Servicing Right as a mortgage servicing right and will begin recording servicing fee revenue rather than interest income on the notes receivable. The pooling and servicing agreements relating to the Initial Mortgage Servicing Rights entitle the servicer to an annual fee of 50 basis points of the unpaid principal balance of the mortgage loans serviced. We will recognize servicing fees as revenue as mortgage principal and interest payments are received from borrowers and as delinquent loans are brought current, modified, liquidated or charged off.

Fee Expense. We pay Ocwen Loan Servicing a monthly base fee equal to 12% of the servicing fees the servicer collects for that month. We pay a performance based incentive fee to the extent the servicing fee revenue that the servicer collects for a given month exceeds the retained fee, which will vary in accordance with a schedule over the term of each Subservicing Supplement. The method used to calculate the fees that we pay to Ocwen Loan Servicing under the Purchase Agreement with respect to the Rights to MSRs related to the Initial Mortgage Servicing Rights are the same as the method used to calculate the fees that we pay to Ocwen Loan Servicing under the Subservicing Agreement with respect to any Initial Mortgage Servicing Rights that we subsequently acquire. As a result, the compensation to be paid to Ocwen Loan Servicing will

not vary based on whether Ocwen Loan Servicing or we hold legal title to the underlying mortgage servicing rights.

An example of the calculation of the monthly base fee and performance based incentive fee, assuming that we earn 50 basis points of servicing fee revenue in a given month, is as follows:

If we do not receive an amount equal to the retained fee in any given month, as expressed in terms of basis points of the average unpaid principal balance of the mortgage loans serviced, a shortfall in the retained fee is created. Ocwen Loan Servicing does not earn a performance based incentive fee for any month that there is such a shortfall, or in any subsequent month, until we have recovered the shortfall from amounts that would otherwise be available to pay future performance based incentive fees to Ocwen Loan Servicing.

The performance based incentive fee payable in any month is reduced if the advance ratio exceeds a predetermined level for that month. If the advance ratio exceeds the predetermined level in any month, the performance based incentive fee payable for such month, if any, is reduced by an amount equal to 6.5% per annum of the amount of any such excess servicing advances.

Gross Servicing Margin. Servicing fee revenue less fee expense. Gross servicing margin percentage for the month of June 2012 was approximately 31.1 basis points of the average unpaid principal balance of the mortgage loans serviced. In months where there is no shortfall in the retained fee and in which the advance ratio does not exceed the predetermined level for that month, the gross servicing margin, as expressed in terms of basis points of the average unpaid principal balance of the mortgage loans serviced, will be equal to the retained fee. In such months, the gross servicing margin will vary in accordance with the retained fee schedule as described above.

Other Income. Fees paid by Ocwen to us pursuant to the Ocwen Professional Services Agreement. Other income also includes float income, which is equal to collected but unremitted borrower payments and loan payoff receipts in custodial accounts (including real estate owned sales proceeds) multiplied by current market short-term interest rates.

Mortgage Servicing Rights Amortization Expense (Non-Cash). Represents the periodic decline in the book value of mortgage servicing rights. Mortgage servicing rights amortization expense is calculated by dividing the total servicing contribution collected in the current period by the total expected servicing contribution over the life of the asset, multiplied by the unamortized mortgage servicing rights balance at the beginning of the period. Servicing contribution represents the total income stream generated by the mortgage servicing rights net of total related servicing expenses. Amortization may also include impairment charges to mortgage servicing rights if their fair value at any balance sheet date is lower than the amortized cost.

Interest Expense. Primarily represents the interest expense associated with financing servicing advances. Interest expense is calculated by taking the average outstanding servicing advances multiplied by the advance borrowing rate multiplied by the interest rate on match funded advance debt facilities. Interest expense also includes the amortization of deferred financing costs, non-use fees and any hedge-related costs.

General and Administrative Expense. Includes salaries, wages, payroll taxes, benefits and general administrative costs related to being a public company.

Income Taxes. As a Cayman Islands exempted company, most of our income is exempt from income tax; however, we pay U.S. federal income taxes on the income of our subsidiary that is taxed as a corporation for U.S. federal income tax purposes, which is expected to be nominal.

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for a more detailed description of our components of net income and results of operations.

We believe that our business model allows us to be highly competitive in the acquisition of Mortgage Servicing Assets due to our cost structure, ability to access advance financing and our relationship with Ocwen Loan Servicing and although we remain open to purchasing assets from third parties other than Ocwen Loan Servicing, given the large amount of servicing assets remaining at Ocwen Loan Servicing, we do not view initiating purchases from other third parties as a near-term priority. We anticipate that our acquisitions of Mortgage Servicing Assets from sellers other than Ocwen Loan Servicing may involve engaging a party other than such seller to service the underlying mortgage loans. However, we may consider engaging a seller who is also a high-quality servicer to continue to service the underlying mortgage loans. In addition, we may also pursue opportunities to purchase mortgage servicing rights relating to loans guaranteed or securitized by the U.S. government or GSEs.

Our future success will be dependent on our ability to find, evaluate and acquire Mortgage Servicing Assets that meet our strategic and financial objectives.

Acquire Additional Mortgage Servicing Assets from Ocwen Loan Servicing. We believe that Ocwen Loan Servicing provides an attractive source of future Mortgage Servicing Assets. Over time, we expect to acquire substantially all of Ocwen Loan Servicing’s remaining mortgage servicing rights relating to subprime and Alt-A mortgage loans, which had an unpaid principal balance of $91.2 billion as of June 30, 2012, either through flow transactions or bulk purchases depending upon our excess cash flow and access to the capital markets to obtain additional equity financing.

Acquire Additional Mortgage Servicing Rights from other Owners and Originators. We believe our management team’s significant prior operating experience and extensive industry relationships provide attractive opportunities to purchase mortgage servicing rights from third parties other than Ocwen. In the

future, we may also pursue opportunities to purchase mortgage servicing rights relating to new Freddie Mac, Fannie Mae and Ginnie Mae securitizations. While we remain open to purchasing Mortgage Servicing Assets from third parties other than Ocwen Loan Servicing, given the large amount of servicing assets remaining at Ocwen Loan Servicing, we do not view initiating purchases from other third parties as a near-term priority.

Evaluation Criteria. We plan to evaluate all assets considered for purchase with a variety of criteria, including:

We do not intend to develop a mortgage servicing platform, nor do we intend to acquire and maintain mortgage servicing platforms, personnel or processes in connection with the acquisition of Mortgage Servicing Assets. Our success will be dependent, in part, on identifying, evaluating and engaging high-quality servicers and subservicers, such as Ocwen Loan Servicing, to perform substantially all of the servicing functions relating to the Mortgage Servicing Assets that we acquire.

Servicer and Subservicer Selection Criteria. We will select servicers and subservicers based on the following criteria:

We intend to use a similar selection criteria for identifying potential sellers of Mortgage Servicing Assets.

Structuring Subservicing Agreements. If and when legal ownership of any mortgaging servicing right is transferred to us, we will become contractually obligated to service the underlying mortgage loans and will need to engage one or more high quality subservicers to service the mortgage loans. We believe that we will be able to negotiate favorable pricing and other terms when entering into subservicing agreements with the subservicers that we identify based on our selection criteria. We will seek to negotiate agreements that will provide us with stable earnings and cash flows. We expect to pay our subservicers performance based incentive fees and believe this arrangement will align our interests with those of our subservicers.

We believe we are well positioned to execute our business strategy based on the following competitive strengths:

Experienced Management Team with Extensive Knowledge of the Mortgage Servicing Industry. We have an executive management team with extensive experience in the mortgage servicing industry. This

experience includes evaluating and acquiring mortgage servicing rights, performing asset valuation analysis and financing mortgage servicing businesses through a variety of economic cycles. Key members of our executive management team also have experience in managing a public company in the mortgage servicing industry.

Relationship with Ocwen. We intend to continue to capitalize on the servicing capabilities of Ocwen Loan Servicing, which we view as superior relative to other servicers in terms of cost, management experience, technology infrastructure and platform scalability. Ocwen Loan Servicing will continue to service the mortgage loans underlying the Aggregate Purchased Assets, as well as service the mortgage loans underlying the Planned Acquisition Assets during the period of time prior to the transfer of legal ownership to us of the Initial Mortgage Servicing Rights and the mortgage servicing rights associated with the Planned Acquisition. Thereafter, we will engage Ocwen Loan Servicing to service on our behalf the mortgage loans underlying our Mortgage Servicing Assets and any additional mortgage servicing assets that we may acquire from them in the future, provided that the performance criteria specified in the Subservicing Agreement are met. We may also engage Ocwen Loan Servicing to service mortgage loans underlying any mortgage servicing assets that we acquire from other third parties in the future.

Ocwen is a leading provider of residential and commercial mortgage loan servicing, special servicing and asset management services. Ocwen is one of the largest third-party subprime mortgage loan servicers in the United States. As of June 30, 2012, Ocwen provided servicing for residential mortgage loans with an aggregate unpaid principal balance of approximately $127.9 billion. Ocwen and its predecessors have significant experience in servicing residential and commercial mortgage loans and have been servicing residential mortgage loans since 1988 and subprime mortgage loans since 1994.

Ocwen’s primary business is the servicing, special servicing and resolution of nonconforming, subperforming and nonperforming residential and commercial mortgage loans for third parties. Ocwen has received a subprime servicer rating of “Above Average,” a special servicer rating of “Strong” and an alternative servicer rating of “Above Average” from Standard & Poor’s and has an “RPS3” rating as a subprime servicer and an “RSS3” rating as special servicer from Fitch Ratings. Ocwen is also rated “SQ2-” (“Above Average”) as a primary servicer of subprime loans and “SQ2” (“Above Average”) as a special servicer by Moody’s Investors Service, Inc. Ocwen is an approved Freddie Mac and Fannie Mae seller/servicer.

As a subprime and Alt-A mortgage loan servicer, Ocwen has been faced with special loss mitigation challenges not usually present in prime loan servicing. Ocwen’s collection policy seeks to identify payment problems at the early stage of delinquency and, if necessary, to address the delinquency in order to preserve the equity of a pre-foreclosure mortgage property. Ocwen uses a proactive consulting approach, defined

call strategies, a variety of loan modification strategies and enhanced payment methods to assist the collection process.

Ocwen has the highest trial-to-permanent modification conversion rates under HAMP in the industry and has completed over 200,000 loan modifications since January 2008. Ocwen has been a pioneer in developing servicing industry best practices and utilizes advanced modeling of loan and consumer-specific resolution alternatives to reduce losses. Ocwen has invested over $150 million in proprietary technology to identify and evaluate loan resolution alternatives, minimize default rates and cure existing delinquencies. Ocwen maintains one of the lowest operating cost platforms for servicing delinquent loans in the mortgage servicing industry and is capable of efficiently scaling its platform to accommodate the servicing of new mortgage loan portfolios. In addition, Ocwen has been highly ranked within its peer group in numerous third-party studies of servicer effectiveness:

Ocwen and its related companies currently employ approximately 5,000 people worldwide. Ocwen is headquartered in Atlanta, Georgia with offices in Florida and the District of Columbia and global operations in India and Uruguay. Ocwen Loan Servicing, a wholly owned subsidiary of Ocwen, is a licensed mortgage servicer in all 50 states, the District of Columbia and two U.S. territories.

We have entered into the Purchase Agreement with Ocwen Loan Servicing pursuant to which we may agree to purchase Mortgage Servicing Assets, associated servicing advances and other related assets from Ocwen Loan Servicing from time to time. The specific terms of any acquisition of Mortgage Servicing Assets, associated servicing advances and related assets, including the Mortgage Servicing Assets purchased in the Ocwen Transactions, are (and may be in the future) documented pursuant to separate sale

supplements to the Purchase Agreement. To the extent the terms of any sale supplement we enter into with Ocwen Loan Servicing are in conflict with the terms of the Purchase Agreement, the sale supplement will govern.

We intend to use the proceeds of this offering to purchase additional Mortgage Servicing Assets from Ocwen Loan Servicing in the Planned Acquisition. We are in discussions with Ocwen Loan Servicing regarding the composition of the Planned Acquisition Assets, but have not yet identified the specific assets we will acquire. We expect the Planned Acquisition Assets will have similar characteristics to those Mortgage Servicing Assets acquired in the Ocwen Transactions, and that the related servicing advances, both current and future, will be eligible for funding under the Servicing Advance Facility Agreements. We expect that any such acquisition would be subject to the terms of the Purchase Agreement and will be documented pursuant to a separate supplement.

In connection with the Ocwen Transactions, we acquired all of Ocwen Loan Servicing’s right, title and interest to certain Rights to MSRs, which include:

We also purchased the outstanding equity of HomEq Servicer Advance Facility Transferor, LLC (“HomEq Transferor”) as part of the Initial Ocwen Purchase. HomEq Transferor is a special purpose entity that owns the outstanding equity of the Trust, a special purpose entity that owns the outstanding servicing advances associated with the Initial Mortgage Servicing Rights and the reserve and other accounts associated with the existing advance financing facility. We also assumed the rights and obligations of Ocwen and Ocwen Loan Servicing under the existing advance financing facility pursuant to which servicing advances relating to the Initial Mortgage Servicing Rights are currently financed. Our assumption of this facility is subject to the prior approval of the investor in the notes outstanding under this facility.

Until legal ownership of the Initial Mortgage Servicing Rights transfers to us, Ocwen Loan Servicing’s obligations under the Purchase Agreement with respect to the Rights to MSRs will be secured by a first priority security interest in Ocwen Loan Servicing’s ownership of the Initial Mortgage Servicing Rights and the proceeds of the Initial Mortgage Servicing Rights.

The pooling and servicing agreements related to the Initial Mortgage Servicing Rights require the consent of various parties, including the rating agencies, the trustees of the related securitization trusts, the sponsors of the securitization transactions, any master servicer for the securitization transactions or any bond insurers or other credit enhancers insuring the mortgage-backed securities issued by the securitization trusts, and certain pooling and servicing agreements require amendments to certain of their terms, prior to the transfer of legal title to the underlying mortgage servicing rights. Ocwen Loan Servicing has not obtained the Required Third Party Consents, and as such, Ocwen Loan Servicing retains legal ownership of the Initial Mortgage Servicing Rights until we receive the Required Third Party Consents and has agreed pursuant to the Purchase Agreement to use commercially reasonable efforts to obtain all Required Third Party Consents. Ocwen Loan Servicing is required to transfer each Initial Mortgage Servicing Right to us, without any additional payment, automatically upon receipt of the related Required Third Party Consents.

The Purchase Agreement and the sale supplements for the Ocwen Transactions provide that each of us and Ocwen Loan Servicing has certain rights and obligations with respect to the pooling and servicing agreements related to those Initial Mortgage Servicing Rights that have not been transferred to us. These respective rights and obligations are structured to replicate the respective economic benefits and rights and obligations that would be in effect if such Initial Mortgage Servicing Rights had been transferred to us and Ocwen Loan Servicing was servicing the underlying mortgage loans pursuant to the Subservicing Agreement and the initial subservicing supplement described below:

We have the right to transfer any of our Rights to MSRs, or cause Ocwen Loan Servicing to transfer any of the Initial Mortgage Servicing Rights to a third party for whom the necessary third party consents have been obtained, subject to Ocwen Loan Servicing’s rights under the Purchase Agreement, including the right to receive the monthly base fee and the contingent performance based incentive fee. If any of the subservicer termination events described in the Subservicing Agreement occur with respect to Ocwen Loan Servicing prior to the transfer of the Initial Mortgage Servicing Rights to us, we will have the right to require Ocwen Loan Servicing to transfer any such mortgage servicing rights to any third party for whom we can obtain the necessary third party consents. See “—Description of the Subservicing Agreement—Term and Termination” for a description of such termination events.

The control of and responsibility for maintaining the custodial accounts will not be transferred to us unless and until the related Initial Mortgage Servicing Right is transferred to us, and Ocwen Loan Servicing will remain responsible for remitting funds from such custodial accounts prior to any such transfer.

While Ocwen Loan Servicing retains ownership of any of the Initial Mortgage Servicing Rights, we will pay to it an amount equivalent to the monthly base fee and monthly performance based incentive fee that would have been payable to Ocwen Loan Servicing under the Subservicing Agreement if the mortgage loans underlying such Initial Mortgage Servicing Rights were being serviced by Ocwen Loan Servicing pursuant to the Subservicing Agreement and the initial subservicing supplement for a six year period after the closing of the Initial Ocwen Purchase. See “—Description of Subservicing Agreement—Base Fees, Ancillary Income and Performance Payments.” After the expiration of the six year period, the amount of the monthly base fee and any monthly performance based incentive fee will be subject to re-negotiation between Ocwen Loan Servicing and us. If we are unable to agree upon such fees, we will have the right to require Ocwen Loan Servicing to transfer the Initial Mortgage Servicing Rights to any third party for whom we can obtain the necessary third party consents.

If we fail to pay Ocwen Loan Servicing any monthly base fee or monthly performance based incentive fee that is past due, subject to certain grace periods and other conditions specified in the Purchase Agreement and the initial sale supplement, Ocwen Loan Servicing may cease to service the related mortgage loans until such fees have been paid to Ocwen Loan Servicing.

Upon the transfer of an Initial Mortgage Servicing Right, we will acquire all of Ocwen Loan Servicing’s right, title and interest as servicer pursuant to the pooling and servicing agreement relating to such Initial Mortgage Servicing Right, including the rights to:

Upon the transfer of the Initial Mortgage Servicing Rights to us upon receipt of the necessary Required Third Party Consents, we will also assume Ocwen Loan Servicing’s obligations as servicer under the pooling and servicing agreements, provided that we will not assume any obligations (i) attributable to any acts or omissions of Ocwen Loan Servicing (or any of its affiliates, agents, contractors or representatives) prior to the related servicing transfer date, (ii) attributable to any actions, causes of action, claims, suits or proceedings or violations of law or regulations attributable to any acts or omissions of Ocwen Loan Servicing (or any of its affiliates, agents, contractors or representatives) prior to the related servicing transfer date, (iii) not relating to the assets and liabilities described above that are expressly purchased or assumed by us pursuant to the Purchase Agreement or (iv) relating to any representation or warranty made by Ocwen Loan Servicing or any of its affiliates with respect to the Initial Mortgage Servicing Rights or the related mortgage loans.

Ocwen Loan Servicing has made customary representations, warranties and covenants in the Purchase Agreement with respect to the Aggregate Purchased Assets. Such provisions include representations and warranties that:

Ocwen Loan Servicing will indemnify us against any claim, loss, damage or expense (including attorney’s fees) incurred by us arising out of or resulting from (i) breaches of any of Ocwen Loan Servicing’s representations and warranties contained in the Purchase Agreement or the sale supplement or Ocwen Loan Servicing’s failure to observe and perform any of its duties, obligations, covenants or agreements contained in the Purchase Agreement or the sale supplement or any related agreement, (ii) acts or omissions of Ocwen Loan Servicing or any other prior servicer of the mortgage loans underlying any Mortgage Servicing Rights or any subservicer, contractor or agent engaged by Ocwen Loan Servicing or any other prior servicer in each case prior to the related servicing transfer date relating to any Mortgage Servicing Rights, (iii) any event relating to any Mortgage Servicing Rights occurring prior to the related servicing transfer date, (iv) certain excluded liabilities related to acts or omissions of Ocwen Loan Servicing prior to the related servicing transfer date and (v) any acts or omissions by Ocwen Loan Servicing (or its employees or agents) in performance of its duties or obligations pursuant to the sale supplement. In addition to indemnification for third party claims, if Ocwen Loan Servicing is terminated as servicer with respect to any pooling and servicing agreement related to the Rights to MSRs prior to the transfer of the

related Mortgage Servicing Rights to us for any reason other than as a result of a breach by us of our obligation to purchase servicing advances associated with the related Mortgage Servicing Rights, Ocwen Loan Servicing will indemnify us for a specified value set forth in a schedule to the sale supplement for related Mortgage Servicing Rights, which is intended to reflect the expected amortized value of the Mortgage Servicing Rights at the time of termination.

We will indemnify Ocwen Loan Servicing against any claim, loss, damage or expense (including reasonable attorney’s fees) incurred by Ocwen Loan Servicing arising out of or resulting from (i) breaches of any of our representations and warranties or covenants contained in the Purchase Agreement, the sale supplement or any related agreement and (ii) our acts or omissions, or those of our agents (other than Ocwen Loan Servicing), occurring after the related servicing transfer date and related to the transferred assets.

Our obligation to purchase, and Ocwen Loan Servicing’s obligation to sell, the Mortgage Servicing Assets pursuant to the Purchase Agreement is conditioned upon the fulfillment of certain conditions precedent, including that:

An acquisition of Mortgage Servicing Assets pursuant to the Purchase Agreement can be terminated after execution of the sale supplement and prior to the closing date:

We have entered into the Subservicing Agreement with Ocwen Loan Servicing pursuant to which we may engage Ocwen Loan Servicing to act as the subservicer of pools of residential mortgage loans underlying the mortgage servicing rights that we acquire. The specific terms of the subservicing arrangement with respect to each pool of mortgage loans, including the mortgage loans underlying the Initial Mortgage Servicing Rights purchased by us pursuant to the Purchase Agreement, are (and may be in the future) documented pursuant to separate subservicing supplements to the Subservicing Agreement. To the extent the terms of any subservicing supplement we enter into with Ocwen Loan Servicing are in conflict with the terms of the Subservicing Agreement, the subservicing supplement will govern.

Although Ocwen Loan Servicing will continue to be the owner of the Initial Mortgage Servicing Rights until and unless the Required Third Party Consents are received and the Initial Mortgage Servicing Rights are transferred to us, we have entered into an initial subservicing supplement to the Subservicing Agreement with Ocwen Loan Servicing pursuant to which Ocwen Loan Servicing has agreed to act as subservicer of the mortgage loans underlying the Initial Mortgage Servicing Rights on the terms described below effective upon the transfer of the Initial Mortgage Servicing Rights to us. Each Initial Mortgage Servicing Right will automatically become subject to the Subservicing Agreement and the subservicing supplement upon the transfer of such Initial Mortgage Servicing Right to us after receipt of the related Required Third Party Consents.

Although neither we nor Ocwen Loan Servicing are under any obligation to do so, we may enter into additional subservicing supplements with Ocwen Loan Servicing to engage them as subservicer of mortgage loans underlying mortgage servicing rights that we may acquire in the future. The terms and conditions relating to the subservicing of additional mortgage servicing rights will be determined by us and Ocwen Loan Servicing at that time. The terms of any future subservicing arrangement with Ocwen Loan Servicing related to mortgage servicing rights that we may acquire in the future may differ materially from the terms of the subservicing arrangement related to the Initial Mortgage Servicing Rights described below.

Pursuant to the subservicing supplement, Ocwen Loan Servicing is required to service the mortgage loans underlying the Initial Mortgage Servicing Rights effective immediately upon the transfer of the Initial Mortgage Servicing Rights to us and perform our other duties and obligations as servicer in accordance with the pooling and servicing agreements and applicable law and in a manner so as to not trigger our termination as servicer based on their management of delinquency and loss performance with respect to mortgage loans, other than as a result of our breach of any servicing obligation that we retained (unless such failure resulted directly or indirectly from Ocwen Loan Servicing’s act or omission).

We will retain the responsibility for maintaining custodial accounts, funding any required servicing advances and remitting funds pursuant to the terms of the pooling and servicing agreements.

Ocwen Loan Servicing is not permitted to make any material change in its servicing of the mortgage loans underlying the Initial Mortgage Servicing Rights, including any material changes to its advance policies or stop advance policies and procedures without our consent, provided that our consent shall not be unreasonably withheld or delayed. We may direct Ocwen Loan Servicing to implement reasonable changes to its servicing practices with respect to all or a portion of the mortgage loans underlying the Initial Mortgage Servicing Rights, including any changes necessary to ensure compliance with applicable laws or governmental programs or directions received pursuant to the related pooling and servicing agreements. We also have the right to assume any servicing responsibilities with respect to a pooling and servicing agreement that Ocwen Loan Servicing is required to perform pursuant to the Subservicing Agreement so long as such assumption does not limit in any way Ocwen Loan Servicing’s ability to earn and receive its base fees with respect to such pooling and servicing agreement.

As part of the Subservicing Agreement, Ocwen Loan Servicing gives us access to information regarding the underlying mortgage loans, its servicing platform and other financial systems and provides periodic reporting and account reconciliation to enable us to monitor its performance under the pooling and servicing agreements and fulfill our obligations under the pooling and servicing agreements and right to monitor.

In addition, Ocwen Loan Servicing has the right to request us to exercise any clean-up call provisions set forth in the related pooling and servicing agreements. In connection with these requests, Ocwen Loan Servicing is required to purchase the applicable mortgage loans at the purchase price specified in the related pooling and servicing agreement, the proceeds of such purchase must be sufficient to immediately reimburse all outstanding servicing advances and other amounts owed to us with respect to such pooling and servicing agreement, and Ocwen Loan Servicing must pay us a redemption fee equal to our amortized book value, if any, of the related mortgage servicing rights as of the date of such clean-up call.

We pay Ocwen Loan Servicing a monthly base fee pursuant to the subservicing supplement relating to the Initial Mortgage Servicing Rights transferred to us pursuant to the Purchase Agreement equal to 12% of the servicing fees collected in any given month. The monthly base fee payable to Ocwen Loan Servicing is expressed as a percentage of the servicing fees actually collected in any given month, which varies from month to month based on the level of collections of principal and interest for the mortgage loans serviced. In addition to the monthly base fee, the subservicing supplements relating to the Initial Mortgage Servicing Rights allows Ocwen Loan Servicing to retain any ancillary income (excluding investment income earned on any custodial accounts) payable to the servicer pursuant to the related pooling and servicing agreements.

Ocwen Loan Servicing may also receive a performance based incentive fee to the extent the servicing fee revenue that the servicer collects for any given month exceeds the sum of the monthly base fee and the retained fee.

The amount, as expressed in terms of basis points of the average unpaid principal balance of the mortgage loans serviced, used to calculate the retained fee will change in the fourth and seventh months following the closing of the Initial Ocwen Purchase and every six months thereafter in accordance with a predetermined schedule. If we do not receive an amount equal to the retained fee in any given month, as expressed in terms of basis points of the average unpaid principal balance of the mortgage loans serviced, a shortfall in our targeted gross servicing margin percentage will be created. Ocwen Loan Servicing will not earn a performance based incentive fee for any month that there is such a shortfall, or in any subsequent month, until we have recovered such shortfall from amounts that would otherwise be available to pay future performance based incentive fees to Ocwen Loan Servicing.

The performance based incentive fee payable in any month is reduced if the advance ratio exceeds a predetermined level for that month. If the advance ratio is exceeded in any month, any performance based incentive fee payable for such month will be reduced by an amount equal to 6.5% per annum of the amount of any such excess servicing advances.

The base fees are calculated monthly and paid by us to Ocwen Loan Servicing within three business days of the final day of each month. The base fee and the performance based incentive fee are subject to change upon any renewal of the subservicing supplements relating to the Initial Mortgage Servicing Rights transferred to us pursuant to the Purchase Agreement. The base fees with respect to future pools of mortgage loans will be as agreed by us and Ocwen Loan Servicing in the related subservicing supplement.

If we fail to pay Ocwen Loan Servicing any monthly base fee or monthly performance based incentive fee that is past due, subject to certain grace periods and other conditions specified in the Subservicing Agreement and the subservicing supplement, Ocwen Loan Servicing may cease to service the related mortgage loans until such fees have been paid to Ocwen Loan Servicing.

Ocwen Loan Servicing will indemnify us from any claim, loss, damage or expense (including reasonable attorney’s fees) incurred by us directly or indirectly arising out of or resulting from: (a) Ocwen Loan Servicing’s failure to observe or perform any of its duties, obligations, covenants or agreements in the Subservicing Agreement or a subservicing supplement; (b) any acts or omissions of Ocwen Loan Servicing or its agents in performance of its duties or obligations pursuant to the Subservicing Agreement or a subservicing supplement; (c) any breach of Ocwen Loan Servicing’s representations and warranties in the Subservicing Agreement or a subservicing supplement; or (d) any willful malfeasance, bad faith, fraud or negligence in the performance of its duties under the Subservicing Agreement or a subservicing supplement. In addition to indemnification of third party claims, if we are terminated under any acquired pooling and servicing agreement in connection with any breach of Ocwen Loan Servicing under the Subservicing Agreement, Ocwen Loan Servicing will pay us liquidated damages in an amount equal to the amortized book value of the related mortgage servicing rights.

We will indemnify Ocwen Loan Servicing from any claim, loss, damage or expense (including reasonable attorney’s fees) incurred by Ocwen Loan Servicing directly or indirectly arising out of or resulting from: (w) our failure to observe or perform any of our duties, obligations, covenants or agreements under the Subservicing Agreement or a subservicing supplement; (x) any acts or omissions of us or our agents (other than Ocwen Loan Servicing) in the performance of our duties or obligations pursuant to the Subservicing Agreement or a subservicing supplement; (y) any breach of our representations and warranties in the Subservicing Agreement or a subservicing supplement; or (z) any willful malfeasance, bad faith, fraud or negligence in the performance of our duties under the Subservicing Agreement or a subservicing supplement or reckless disregard by us of our obligations or duties under the Subservicing Agreement or a subservicing supplement.

The subservicing supplement relating to the Initial Mortgage Servicing Rights transferred to us pursuant to the Initial Ocwen Purchase and the Purchase Agreement has an initial term of six years from the closing of our initial public offering and the Initial Ocwen Purchase. The subservicing supplement may be renewed for all or an agreed upon portion of such Initial Mortgage Servicing Rights on terms and conditions that will be determined by us and Ocwen Loan Servicing at the time of such renewal.

Ocwen Loan Servicing may be terminated as subservicer by us for one or more of the pooling and servicing agreements related to the Initial Mortgage Servicing Rights transferred to us pursuant to the Purchase Agreement prior to the expiration of the initial term, at any time by written notice following a subservicer termination event and will be terminated if we are no longer the servicer under such pooling and servicing agreement, unless otherwise required by the related pooling and servicing agreement. Ocwen Loan Servicing may only resign if we fail to pay any fees owed to Ocwen Loan Servicing and such failure remains unremedied for a period of 10 business days after written notice from Ocwen Loan Servicing. Ocwen Loan Servicing must provide us with at least 60 days’ prior written notice of any such resignation.

The following events are, subject to specified grace or cure periods, the subservicer termination events under the Subservicing Agreement and the subservicing supplements relating to the Initial Mortgage Servicing Rights:

Description of Servicing Advance Facility Agreements and the Advance Financing Facility

We entered into the Servicing Advance Facility Agreements among us, Barclays Bank PLC, Ocwen Loan Servicing, the other parties to the existing advance financing facility relating to the Initial Purchased Assets and the holders of the notes issued pursuant to that facility. Pursuant to the Servicing Advance Facility Agreements, we assumed the rights and obligations of Ocwen, as administrator, and Ocwen Loan Servicing, as seller and servicer, relating to the Current Advance Financing Facility, and released Ocwen and Ocwen Loan Servicing from their respective obligations under such facility.

In addition, we will not replace Ocwen Loan Servicing as servicer under the Servicing Advance Facility Agreements with respect to any pooling and servicing agreement, and Ocwen Loan Servicing will remain a party to the Servicing Advance Facility Agreements as servicer with respect to each pooling and servicing agreement, until the related mortgage servicing right is transferred to us, and we become the servicer under such pooling and servicing agreement.

Pursuant to a receivables sale agreement, Ocwen Loan Servicing has sold servicing advances arising under the pooling and servicing agreements related to the Initial Mortgage Servicing Rights to HomEq Transferor. We are required to purchase servicing advances subsequently made by Ocwen Loan Servicing in accordance with the terms of the pooling and servicing agreements related to the Initial Mortgage Servicing Rights, for which legal ownership has not been transferred to us, and Ocwen Loan Servicing’s advance and stop advance policies. These servicing advances, along with any servicing advances that we are required to make as the servicer for those Initial Mortgage Servicing Rights that we have acquired, will be sold and/or contributed by us to HomEq Transferor pursuant to an assumed receivables sale agreement. HomEq Transferor, concurrently with its purchase under the receivables sale agreement, has sold and will continue to sell such servicing advances to the Trust.

To finance the acquisition of servicing advances, the Trust has issued limited recourse notes that are secured by the assets of the Trust, including, among other things, the servicing advances owned by the Trust and a general reserve account. The notes were issued under an indenture in four classes of term notes in an aggregate initial principal amount of $811 million and a single class of variable funding notes with an aggregate initial maximum principal balance of $200 million. As of June 30, 2012, the aggregate outstanding principal balance of the term notes was $368.5 million. There was no outstanding principal balance on the variable funding notes. Additional information regarding the terms of the assumed advance facility, including interest rates, outstanding principal balances by class and advance rates for various categories of servicing advances can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Significant Assets and Liabilities—Match Funded Liabilities” and “—Advance Borrowing Rate.”

The amount available under the advance financing facility to fund eligible servicing advances is based on the advance borrowing rate applicable to each type of servicing advance in respect of each class of notes, available funds of the Trust and the available undrawn amount of the variable funding notes. The

applicable advance borrowing rate varies based on the outstanding principal balance of each class of the notes, the type of servicing advance and the occurrence of certain specified events. In addition, the funding of additional servicing advances and additional draws on the variable funding notes are subject to the satisfaction of certain conditions precedent specified in the related transaction documents, including but not limited to: (i) the sum of the eligible servicing advances sold to the Trust plus all collections in Trust accounts must be greater than or equal to the aggregate outstanding principal balances of the notes (the “Collateral Test”); (ii) no breach of any representation, warranty or covenant has occurred; (iii) no early amortization event or event of default, or an event which, with the giving of notice or the passage of time, or both, would constitute an early amortization event or an event of default, has occurred; (iv) the amount on deposit in the collection account is at least equal to the sum of the following amounts due on the next payment date: (a) all interest due, (b) all amounts required to be deposited into the general reserve account, (c) all amounts required to be paid in respect of principal and (d) any amounts owed in respect of fees and expenses; (v) none of the Trust, HomEq Transferor, us or Ocwen Loan Servicing shall be insolvent, nor shall the Trust have been made insolvent by the transfer of such servicing advances into the trust estate, nor will it be aware of any pending insolvency; (vi) with respect to an individual servicing advance, no servicing default or termination event has occurred under the related pooling and servicing agreement, not including any servicer defaults or termination events that are solely due to the breach of one or more collateral performance tests or a downgrade of the servicer rating of the servicer or subservicer (as set forth in such pooling and servicing agreement) unless the servicer or subservicer has received a notice that it has been terminated; (vii) the various Trust accounts that disburse funds in respect of the notes are fully funded; (viii) the payment of the funding amount for new servicing advances does not result in a material adverse federal income tax consequence to the Trust or any noteholders; and (ix) with respect to a servicing advance, the weighted average of time from origination to liquidation of servicing advances for the related pooling and servicing agreement is less than or equal to 18 months. In addition, the first funding on or after the effectiveness of the Servicing Advance Facility Agreements is subject to the condition precedent that the rating agencies rating the notes issue a letter confirming that there will be no withdrawal, reduction or qualification of the rating of the notes as a result of the amendments to the Servicing Advance Facility Agreements.

Generally, during the revolving period, payments to noteholders will consist of payments of interest on the notes and payments of principal on the variable funding notes (and on the term notes in limited circumstances), but excess cash flow from paid servicing advances may be used to fund new servicing advances, and additional borrowing is permitted on the variable funding notes subject to its maximum balance and certain funding conditions. Following the revolving period, principal will be paid on the notes to the extent of available funds and in accordance with the priorities of payments set forth in the related transaction documents. The revolving period ends on the earlier of August 31, 2013 and the occurrence of an early amortization event. The early amortization events under the advance financing facility include: (i) the occurrence of an event of default under the transaction documents; (ii) the failure to maintain the required amount in the general reserve account on the payment date following the payment date on which a draw is made on the general reserve account; (iii) the imposition of any U.S. federal income tax on the Trust as a taxable mortgage pool or other entity treated as a corporation for U.S. federal income tax purposes, or the imposition of a tax, ERISA or other government lien on any property of the Trust or HomEq Transferor; (iv) on any payment date for the notes, the average for the current and two prior payment dates of the percentage equivalent of a fraction, the numerator of which equals the amount of collections on the servicing advances during the related monthly collection period, and the denominator of which equals the aggregate average outstanding principal balances of all notes during such monthly collection period, is less than five times the percentage equivalent of a fraction, the numerator of which equals the aggregate accrued interest amount for each class of notes, and the denominator of which equals the aggregate average note balances of each class of notes outstanding during the preceding month; (v) the occurrence of any servicer default or termination event for pooling and servicing agreements representing 15% or more (by mortgage loan balance as of the date of termination) of all the pooling and servicing agreements related to the Initial Mortgage Servicing Rights, not including any servicer defaults or termination events that are solely due to the breach of one or more collateral performance tests or a downgrade of the servicer rating of

the servicer or subservicer (as set forth in such pooling and servicing agreements) or the transfer of subservicing of any such pooling and servicing agreements without Barclays Bank PLC’s prior written consent; (vi) the occurrence of a change of control with respect to HLSS Holdings or Ocwen Loan Servicing (or with respect to the Company or Ocwen); (vii) the average percentage for each of the three preceding months obtained by dividing (a) the aggregate advance reimbursement amounts collected during such month by (b) the aggregate servicing advances funded by us using our own funds or facility funds as of the end of the month is less than 8%; (viii) the rating assigned to any class of notes is reduced below the initial rating assigned to such class of notes; (ix) the notes and all accrued interest and undrawn fees with respect to all notes shall not have been paid in full by the close of business on the expected repayment date; (x) our average net income for any two consecutive fiscal quarters shall be less than $1 (xi) Ocwen Loan Servicing or HLSS Holdings shall fail to satisfy certain liquidity requirements specified in the Servicing Advance Facility Agreements; or (xii) HLSS Holdings fails to maintain a tangible net worth equal to the greater of (A) $25 million or (B) the sum of (1) 0.25% of the aggregate unpaid principal balance of all mortgage loans as to which HLSS Holdings owns the Rights to MSRs or mortgage servicing rights, plus (2) 5% of the aggregate amount of all servicing advances made by HLSS Holdings that remain unreimbursed.

The events of default include: (i) failure to pay any principal, interest or fees due and owing on any payment date, and such failure continues for two business days, or the failure to pay all principal due and all accrued and unpaid interest on any class of notes on its stated maturity date; (ii) we or Ocwen Loan Servicing fail to comply with the deposit and remittance requirements set forth in any pooling and servicing agreement (subject to any cure periods provided therein) or the advance financing facility, and such failure continues unremedied under the advance facility for a period of two business days after the earlier of a responsible officer of us or Ocwen Loan Servicing (a) obtaining actual knowledge of such failure or (b) receiving written notice of such failure from the indenture trustee or a noteholder; (iii) any failure to deliver certain reports in accordance with the terms of the advance financing facility that continues unremedied for a period of two business days after actual knowledge or notice from the indenture trustee or a noteholder; (iv) any of the parties to the transaction documents materially breaches their terms (subject to any cure period provided therein), which breach remains uncured for a period of 30 days from the earlier of discovery or notice to such party (provided that there shall be no cure period for failure to comply with the bankruptcy covenants); (v) if any representation or warranty of the Trust, the servicer or us made in the indenture, the Subservicing Agreement or any other transaction document shall prove to have been breached in any material respect as of the time when the same shall have been made or deemed made, which breach remains uncured 30 days after actual knowledge beyond any applicable cure period; (vi) failure to meet the Collateral Test; (vii) our failure to make an indemnity payment, or the failure on the part of the transaction parties to observe or perform certain specified covenants or agreements set forth in the transaction documents, after giving effect to any applicable grace period (30 days after notice or actual knowledge), as set forth in the transaction documents; (viii) insolvency of any of HLSS Holdings, HomEq Transferor, the Trust and Ocwen Loan Servicing; (ix) the Trust becomes subject to registration as an “investment company” within the meaning of the Investment Company Act; (x) we sell, transfer, or otherwise dispose of any of the equity interests issued by the Trust (except to one of our affiliates), except pursuant to a merger, consolidation or a sale of all or substantially all the assets of us in a transaction not prohibited by the advance financing facility agreements; or (xi) an event of default under any full-recourse term loan facility under which we are a borrower or Ocwen Loan Servicing is a borrower (including Ocwen’s senior secured term loan). Upon the occurrence and during the continuance of an event of default, the indenture trustee or the majority of the noteholders may, among other things, accelerate principal and interest on the notes and liquidate the Trust’s collateral. Such acceleration occurs automatically upon the occurrence of certain performance triggers and upon the occurrence of certain bankruptcy and insolvency events. An acceleration may also be rescinded by the vote of a majority of the affected noteholders of each class. The holders of two-thirds of all outstanding notes may waive an event of default (other than an uncured default in payment on the notes or a waiver of a breach of a covenant that may only be amended by all noteholders), provided that an event of default that affects more than one class of notes may only be waived by the vote of a majority of the noteholders of each class of affected notes.

Under the Servicing Advance Facility Agreements, we will, subject to certain limitations, indemnify the various parties thereto and the trust estate against losses arising out of our, Ocwen Loan Servicing’s or Ocwen’s violation of law, negligence, willful malfeasance or bad faith in the performance of their respective obligations under the servicing advance facility agreement or the related pooling and servicing agreements or, in the case of us and Ocwen Loan Servicing, a breach of our respective representations and warranties or covenants under the indenture relating to the facility or the related pooling and servicing agreements. Any subservicing agreement with respect to the Initial Mortgage Servicing Rights, including the Subservicing Agreement with Ocwen Loan Servicing, will be subject to the approval of Barclays Bank PLC.

The notes are subject to optional redemption by the Trust, at the direction of HomEq Transferor, on or after any payment date on which the note balance of all of the notes is reduced to less than 10% of the aggregate outstanding note balance of all of the notes at issuance. In addition, the Class B or Class C notes of the advance financing facility may be redeemed by the Trust at any time and may be redeemed from funds other than collections on servicing advances.

We have entered into the Ocwen Professional Services Agreement with Ocwen with respect to the provision by us of certain services to Ocwen and the provision by Ocwen of certain services to us, in each case at prices intended to reflect market rates. Services provided by us pursuant to the Ocwen Professional Services Agreement include pricing and valuation analysis of potential mortgage servicing rights acquisitions, treasury management services and other similar services. Services provided by Ocwen pursuant to the Ocwen Professional Services Agreement include legal, licensing and regulatory compliance support services, risk management services and other similar services. The Ocwen Professional Services Agreement has an initial term of six years. The agreement is subject to termination by either party upon the occurrence of certain events. The fees we charge Ocwen and the fees Ocwen charges us are based on the actual costs incurred by the party providing the service plus an additional markup of 15%. Ocwen may engage third party contractors at reasonable cost to provide any of the services.

We have entered into the Altisource Administrative Services Agreement with respect to the provision by Altisource of certain administrative services to us at prices intended to reflect market rates. Services provided to us pursuant to the Altisource Administrative Services Agreement include human resources administration (benefit plan design, recruiting, hiring and training and compliance support), legal and regulatory compliance support services, general business consulting, corporate services (facilities management, security and travel services), finance and accounting support services (financial analysis, financial reporting and tax services), risk management services, vendor management and other related services. The Altisource Administrative Services Agreement is effective for an initial term of six years, subject to extension for an additional six years, and is subject to termination by either party upon the occurrence of certain events. We compensate Altisource based on the actual cost to Altisource of providing services plus an additional markup of 15%, including any taxes payable as a result of the performance of services. Altisource may engage third party contractors at reasonable cost to provide any of the services.

We expect to use information developed by Ocwen in the management of the existing advance financing facility, portfolio valuation and new business pricing functions. We will also use certain other proprietary technologies owned by Ocwen and Altisource, the use of which is described in the Ocwen Professional Services Agreement and the Altisource Administrative Services Agreement.

Our success depends, in large part, on our ability to acquire Mortgage Servicing Assets on terms consistent with our business and economic model. In acquiring these assets, we expect to compete with independent mortgage loan servicers, private equity firms, hedge funds and other large financial services companies. Many of our anticipated competitors are significantly larger than we are, have access to greater capital and other resources and may have other advantages over us. In addition, some of our competitors may have higher risk tolerances or different risk assessments, which could lead them to offer higher prices for assets that we might be interested in acquiring and cause us to lose bids for those assets. In addition, other potential purchasers of mortgage servicing rights may be more attractive to sellers of mortgage servicing rights if the sellers believe that these potential purchasers could obtain any necessary third party approvals and consents more easily than us.

In the face of this competition, we expect to take advantage of the experience of members of our management team and their industry expertise which may provide us with a competitive advantage and help us assess potential risks and determine appropriate pricing for certain potential acquisitions of Mortgage Servicing Assets. In addition, we expect that these relationships will enable us to compete more effectively for attractive acquisition opportunities. However, we may not be able to achieve our business goals or expectations due to the competitive risks that we face.

We will become subject to regulation by state agencies in ten states that require the owners of mortgage servicing rights to obtain a license if and when the Initial Mortgage Servicing Rights are transferred to us. We will become subject to audits and examinations conducted by these states. From time to time, we may receive requests from state and other agencies for records, documents and information regarding our policies, procedures and practices. We will also need to comply with a number of federal, state and local consumer protection laws including, among others, the Gramm-Leach-Bliley Act. The federal, state and local laws, rules and regulations to which we will become subject, among other things:

Servicers of residential mortgage loans, including any subservicers that we may engage, are subject to extensive regulation by federal, state and local governmental authorities, including the FTC and the SEC. Servicers are also subject to regulation by the state agencies that license servicing and collection activities in a number of states. Servicers are subject to audits and examinations conducted by these states. Beginning in July 2011, servicers became subject to supervision, examination and enforcement by the BCFP, a new federal entity responsible for administering and enforcing the laws and regulations for consumer financial products and services, such as residential mortgage loans. We expect that servicers will incur significant ongoing costs to comply with new and existing laws and governmental regulation of the residential mortgage servicing business.

A failure to comply with applicable federal, state and local consumer protection laws can lead to:

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 finance lenders and servicers. Over the past few years, state and federal lawmakers and regulators have adopted a variety of new or expanded laws and regulations, including the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”). The changes in these regulatory and legal requirements, including changes in their enforcement, could materially and adversely affect our business and our financial condition, liquidity and results of operations.

On July 21, 2010, the Dodd-Frank Act was signed into law by President Obama. The Dodd-Frank Act constitutes a sweeping reform of the regulation and supervision of financial institutions, as well as of the regulation of derivatives, capital market activities and consumer financial services. Many provisions of the Dodd-Frank Act are required to be implemented through rulemaking by the appropriate federal regulatory agencies. As such, in many respects, the ultimate impact of the Dodd-Frank Act, and its effects on our business will not be fully known for an extended period of time.

The Dodd-Frank Act is extensive and significant legislation that, amongst other things:

The BCFP will directly impact the regulation of residential mortgage lending and servicing in a number of ways. First, the BCFP will have rulemaking authority with respect to many of the federal consumer protection laws applicable to mortgage servicers, including the Truth in Lending Act (“TILA”) and the Real Estate Settlement Procedures Act (“RESPA”). Second, the BCFP will have supervision, examination and enforcement authority over the consumer financial products and services offered by certain non-depository institutions and large insured depository institutions. The BCFP’s jurisdiction will include those persons originating, brokering or servicing residential mortgage loans and those persons performing loan modification or foreclosure relief services in connection with such loans. At this time, it is unclear whether the owners of mortgage servicing rights will be subject to the supervision, examination and enforcement authority of the BCFP.

On August 10, 2012, the BCFP proposed new regulations that would require mortgage servicers in part to provide enhanced statements to borrowers, provide notice of interest rate changes, correct errors and obtain information for borrowers, apply payments promptly, apply “force-placed” insurance only when they reasonably believed borrower’s policies had lapsed, provide greater access to servicer personnel and records, engage in outreach to delinquent borrowers with foreclosure alternatives, and allow borrowers to appeal denials of loan modifications and delay foreclosure proceedings while those applications or appeals are pending. If implemented, these rules or other new laws and regulations affecting the mortgage servicing industry could increase the cost of servicing loans.

Title XIV of the Dodd-Frank Act contains the Mortgage Reform and Anti-Predatory Lending Act (the “Mortgage Act”). The Mortgage Act imposes a number of additional requirements on servicers of residential mortgage loans by amending certain existing provisions and adding new sections to TILA and RESPA. The penalties for noncompliance with TILA and RESPA are also significantly increased by the Mortgage Act and could lead to an increase in lawsuits against mortgage servicers. Like other parts of the

Dodd-Frank Act, the Mortgage Act generally requires implementing regulations be issued before many of its provisions are effective. Therefore, many of these provisions in the Mortgage Act will not be effective until 2013 or early 2014.

When fully implemented, the Mortgage Act will prevent servicers of residential mortgage loans from taking certain actions, including the following:

In addition to these restrictions, the Mortgage Act imposes certain new requirements and/or shortens the existing response time for servicers of residential mortgage loans. These new requirements include the following:

While the effective date for many of these provisions remains at least two years away, servicers are expected to incur significant ongoing operational and system costs in order to prepare for compliance with these new laws and regulations. Furthermore, there may be additional federal or state laws enacted during this period that place additional obligations on servicers of residential mortgage loans.

Our principal executive offices are located in the Cayman Islands c/o Walkers Corporate Services Limited, Walker House, 87 Mary Street, George Town, Grand Cayman KY1-9005, Cayman Islands. Altisource has agreed to provide us with office space at the following locations: 2002 Summit Boulevard, Sixth Floor, Atlanta, Georgia 30319, for a fee of $2,759 per month; and 1661 Worthington Road, West Palm Beach, Florida 33409, for a fee of $3,953 per month.

There are no legal proceedings currently pending or, to our knowledge, contemplated against us, our incorporator or any of our officers or directors in their capacities as such.

We qualify as an “emerging growth company” as defined in the Jumpstart our Business Startups Acts (the “JOBS Act”). Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage on an extended transaction period for complying with new or revised accounting standards. However, we are choosing to “opt out” of such extended transition period, and as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for nonemerging growth companies. Our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.

The following table sets forth information regarding the individuals who currently serve on our Board of Directors and serve as our executive officers.

William C. Erbey. Mr. Erbey has served as our Chairman of the Board of Directors since December 1, 2010, the date of our incorporation, and also served as the Chairman of the Board of Directors of Ocwen since September 1996, as the Chief Executive Officer of Ocwen from January 1988 to October 2010 and as the President of Ocwen from January 1988 to May 1998. Mr. Erbey has also served as Chairman of the Board of Directors for Altisource Portfolio Solutions S.A. since August 10, 2009. From 1983 to 1995, Mr. Erbey served as a Managing General Partner of The Oxford Financial Group, a private investment partnership that was the predecessor of Ocwen. From 1975 to 1983, Mr. Erbey served at General Electric Capital Corporation (“GECC”) in various capacities, most recently as the President and Chief Operating Officer of General Electric Mortgage Insurance Corporation. Mr. Erbey also served as the Program General Manager of GECC’s Commercial Financial Services Department and as the President of Acquisition Funding Corporation. He holds a Bachelor of Arts in Economics from Allegheny College and a Master of Business Administration from Harvard University.

John P. Van Vlack. Mr. Van Vlack has served as a director since October 2011 and as President since March 5, 2012, the date of our initial public offering. Mr. Van Vlack was formerly the Chief Financial Officer of Ocwen from August 2010 until our initial public offering. Mr. Van Vlack served as Senior Vice President and Chief Financial Officer of Ocwen Asset Management from August 2008 until our initial public offering, where his duties included directing Ocwen’s Advance Facility and Portfolio Valuation departments and serving as the Chief Financial Officer for Ocwen’s loan servicing business and as Vice President, Finance from September 2007 until the date of our initial public offering. From 1989 until joining Ocwen, he held several positions in BellSouth Corporation (“BellSouth”) including Chief Financial Officer of Network Operations, Retail Marketing, and in two subsidiaries in their Yellow Pages business. Before joining BellSouth, he was a Staff Consultant with Deloitte & Touche. Mr. Van Vlack holds a degree in Accounting from Emory University and a Master of Business Administration from The University of Texas at Austin.

James E. Lauter. Mr. Lauter has served as Chief Financial Officer since March 5, 2012, the date of our initial public offering. Mr. Lauter joined Ocwen in September 2010 as Vice President, Finance where he served until the date of our initial public offering and were his duties have included directing the Advance Facility and Portfolio Valuation departments. From 2000 until joining Ocwen, he held several positions at AT&T including Chief Financial Officer of National Business Markets, On-line Markets and BellSouth Community Technologies as well as various roles in Retail Marketing and Long Distance. Before joining AT&T, he held Finance Management positions with MCI Telecommunications, Per Se Technologies and with Deloitte & Touche, LLP as Audit Manager. Mr. Lauter holds a Bachelor of Business Administration in Accounting from Georgia State University and is a Certified Public Accountant in the State of Georgia.

Richard Delgado. Mr. Delgado has served as our Treasurer since March 5, 2012, the date of our initial public offering. Mr. Delgado served as Senior Vice President and Treasurer of Ocwen from August

2008 until our initial public offering. He joined the firm in November 1995 as a Senior Associate in the Tax Related Securities department. During his tenure at Ocwen, he also held the positions of Senior Manager, Securitization, Director, Acquisitions & Securitizations, and Treasurer. Prior to joining the firm, Mr. Delgado was employed by the New York office of Deloitte & Touche, LLP as a Senior Analyst in the CMO Group from September 1993 through November 1995. He also worked in Accounting Management for Sav-A-Tree Incorporated and American Ultramar Limited. Mr. Delgado holds a Bachelor’s degree in Accounting from Iona College and is a New York State Certified Public Accountant.

Michael J. McElroy. Mr. McElroy has served as our General Counsel since March 5, 2012, the date of our initial public offering. Mr. McElroy served as Senior Vice President and Deputy General Counsel of Ocwen from January 2011 to our initial public offering where his duties included directing transactional legal matters. Prior to joining Ocwen, from June 2010 to January 2011 he was an Associate General Counsel at Fannie Mae where he was responsible for mortgage-backed security offerings, loss mitigation on the securities portfolio and structured transactions. Before joining Fannie Mae, from September 1997 to June 2010 he was an associate and then a partner at Orrick, Herrington & Sutcliffe LLP in the Financial Markets Group where he represented financial institutions in connection with offerings of asset-backed securities, derivatives and with securities law and regulatory compliance. Mr. McElroy holds a Bachelor of Arts in Economics and Political Science from Kenyon College, a Masters in Government from the University of Virginia, and a Juris Doctor from the Georgetown University Law Center.

Kerry Kennedy. Ms. Kennedy has served as a director since October 2011. Since 2008, Ms. Kennedy has been the President of the Robert F. Kennedy Center for Justice and Human Rights (the “Center”). She has led over 50 human rights delegations around the globe. Under her direction, in 2010 the Center established the RFK Compass Program, which works with institutional investors to advance a discussion of the connections among investment performance, fiduciary duty and public interest issues to optimize risk-adjusted rates of returns and address current and future global challenges. Ms. Kennedy has been the Chair of the Amnesty International Leadership Council since January 1996. She was a director of Endeavor Acquisition Corp. from July 2005 to December 2007, a director of Victory Acquisition Corp. from January 2007 to April 2009 and a director of Triplecrown Acquisition Corp. from June 2007 to September 2009. Ms. Kennedy is presently a director of Grand Slam Acquisition Corp. (since October 2007), Four Square Capital Corp. (since September 2009) and Cullen Agricultural Holding Corp. (since October 2009). She also serves on the board of directors of the International Center for Ethics and Justice and Public Life at Brandeis University, Human Rights First, Inter-Press Service and the United States Institute for Peace. Ms. Kennedy has also served as a community and government relations advisor to Ocwen since October 2010 for which Ocwen has paid Ms. Kennedy consulting fees at an annual rate of $85,000. Ms. Kennedy wrote the New York Times best seller, Being Catholic Now, as well as Speak Truth to Power. She is a graduate of Brown University and a Juris Doctor from Boston College Law School.

Richard J. Lochrie. Mr. Lochrie has served as a director since October 2011. Mr. Lochrie co-founded and has served as President of Lochrie & Associates, Inc. since 1974. Lochrie & Associates is a management consulting business specializing in quantitative marketing, forecasting and strategic planning for Fortune 500 companies, including General Electric Company and The Coca-Cola Company. From 1986 until it was acquired by Ocwen in 1988, Mr. Lochrie served as a director of Investors Mortgage Insurance Holding Company. Between September and November of 2010, Lochrie & Associates Inc. provided econometric modeling services on prepayment and delinquency of mortgage loans to Ocwen and on REO list prices to Altisource (Lochrie & Associates Inc. received $7,000 from Ocwen and $28,000 from Altisource in compensation for these services). Before establishing Lochrie & Associates, Mr. Lochrie was employed with Allis-Chalmers Manufacturing Co. Mr. Lochrie holds a Bachelor’s degree in Industrial Management from Quincy College, a Master’s degree in Mathematics from the University of Illinois at Urbana-Champaign and a Master of Business Administration from the University of Wisconsin-Madison.

Robert McGinnis. Mr. McGinnis has served as a director since October 2011. Mr. McGinnis served as Managing Director of Greenwich Capital Markets from 1997 to 2008, where he built the Non-Agency Mortgage, Structured Products and Asset Backed business into one of the industry’s preeminent firms. In

his role at Greenwich Capital Markets, Mr. McGinnis was responsible for origination, banking and trading of all products and for structuring, client relationships, recruiting, business development and new products. From 1982 to 1997, Mr. McGinnis was a Managing Director at Salomon Brothers Inc., responsible for origination and banking of Salomon’s Non-Agency Mortgage Business. Mr. McGinnis holds a Bachelor’s Degree in Civil Engineering from Rochester Institute of Technology, a Master’s Degree in Civil Engineering from Manhattan College and an Master of Business Administration from New York University.

David B. Reiner. Mr. Reiner has served as a director since October 2011. Mr. Reiner served as a Managing Director with Grosvenor Investment Management US Inc. and its predecessor, Legg Mason Real Estate Services, from 2003 until June 2011. Mr. Reiner served as a member of Ocwen’s Board of Directors from 2009 until the date of our initial public offering. At Grosvenor Investment Management, Mr. Reiner was responsible for the development and implementation of business strategy, capital markets activities, fund and investment development, fund-raising, fund operations and investor relations. He also was a member of the Management and Investment Committees for Grosvenor Investment Management’s Investment Funds business. He also served on the Capital Markets Committee of Grosvenor Fund Management Ltd. Mr. Reiner holds a Bachelor of Arts from the University of South Carolina and a Juris Doctorate degree from George Mason University School of Law. He also completed graduate work in international affairs and economics at the Fletcher School of Law & Diplomacy at Tufts University and the Johns Hopkins School of Advanced International Studies.

Our Board of Directors currently consists of six members. The terms of the directors will expire upon the election and qualification of successor directors at each annual meeting of shareholders.

Our ordinary shares are listed on The Nasdaq Global Select Market. Under the rules of The Nasdaq Stock Market, independent directors must comprise a majority of our Board of Directors within a specified period of the completion of our initial public offering. In addition, the rules of The Nasdaq Stock Market require that, subject to specified exceptions, each member of the Audit, Compensation and Nominating and Corporate Governance Committees of our Board of Directors be independent. Audit Committee members must also satisfy the independence criteria set forth in Rule 10A-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Under the rules of The Nasdaq Stock Market, a director will only qualify as an “independent director” if, in the opinion of our Board of Directors, that person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

In order to be considered to be independent for purposes of Rule 10A-3, a member of the Audit Committee of our Board of Directors may not, other than in his or her capacity as a member of the Audit Committee, the Board of Directors or any other committee of our Board of Directors:

Our Board of Directors has undertaken a review of its composition, the composition of its committees and the independence of each director. In connection with this review, our Board of Directors determined that each of Ms. Kennedy and Messrs. Lochrie, McGinnis and Reiner, representing four of our six directors, satisfies the independence requirements of The NASDAQ Stock Market and Rule 10A-3 of the Exchange Act. In making this determination, our Board of Directors considered the relationships that each non-employee director has with us and all other facts and circumstances our Board of Directors deemed relevant in determining their independence, including the beneficial ownership of our share capital by each non-employee director. In addition, our Board of Directors considered information that was provided by each director concerning his or her background, employment and affiliations, including family relationships and any historical relationships with Ocwen and its affiliates.

The rules of The NASDAQ Stock Market provide that, under limited and exceptional circumstances, a director who is not a current officer or employee (or a family member of an officer or employee) of our company, but who does not otherwise meet the independence criteria described above, may serve as a member of the Nominating and Corporate Governance Committee if such membership is in the best interests of our company and our shareholders. Our Board of Directors has elected to rely on this limited exception in appointing Mr. Erbey as the Chairman of the Nominating and Corporate Governance Committee. In making this election, and giving due consideration to our status as a newly formed company, our Board of Directors determined that Mr. Erbey’s extensive knowledge and experience in the mortgage servicing industry and in running a public company is necessary to identify, attract and retain qualified individuals to fill any vacancy on our Board of Directors.

Our Board of Directors has established an Executive Committee, an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee. Mr. Erbey serves as the Chairman of our Board of Directors and as the Chairman of the Executive Committee and the Nominating and Corporate Governance Committee. Mr. Reiner serves as the Chairman of the Audit Committee and Mr. Lochrie serves as the Chairman of the Compensation Committee. A brief description of these committees is provided below.

Executive Committee. Our Executive Committee is generally responsible for acting on behalf of our Board of Directors during the intervals between meetings of our Board of Directors. Our Executive Committee is currently comprised of Messrs. Erbey and Van Vlack. Our Board of Directors has authorized the President to approve and/or to designate in writing certain individuals to approve actions in the ordinary course of business that are required to be documented by counterparties but do not require action by the Board of Directors or its committees. Such actions would include approving, signing and executing checks and electronic funds transmissions, dissolving or merging our wholly owned subsidiaries in the ordinary course of business and performing such other ministerial actions on such terms, conditions and limits as the Chairman deems appropriate in his sole discretion. All transactions approved by the Executive Committee will be provided to the Board of Directors at or before their next meeting for review and ratification.

Audit Committee. The Audit Committee of our Board of Directors oversees the relationship with our independent registered certified public accounting firm; reviews and advises our Board of Directors with respect to reports by our independent registered certified public accounting firm; and monitors our compliance with laws and regulations applicable to our operations, including the evaluation of significant matters relating to the financial reporting process and our system of internal accounting controls and the review of the scope and results of the annual audit conducted by our independent registered certified public accounting firm. Each member of our Audit Committee, currently consisting of Messrs. Lochrie, McGinnis and Reiner, is required to be independent as defined in regulations adopted by the SEC and the listing standards of The NASDAQ Stock Market. Our Board of Directors has determined that each of Messrs. Lochrie, McGinnis and Reiner are independent as defined in the listing standards of The NASDAQ Stock Market and Rule 10A-3 under the Exchange Act and that each of them is financially literate. Our Board of Directors has also determined that Messrs. Lochrie, McGinnis and Reiner qualify as audit committee financial experts as that term is defined in the SEC rules implementing requirements of the Sarbanes-Oxley Act. Our Audit Committee operates under a written charter approved by our Board of Directors, a copy of which will be made available on our website and in print to any shareholder who requests it. The Audit Committee is responsible for approving related party transactions.

Compensation Committee. The Compensation Committee of our Board of Directors oversees our compensation and employee benefit plans and practices. Our Compensation Committee also evaluates and makes recommendations to our Board of Directors for human resource and compensation matters relating to our executive officers. The Compensation Committee will review with the President and subsequently approve all executive compensation plans, any executive severance or termination arrangements and any

equity compensation plans that are not subject to shareholder approval. The Compensation Committee also has the power to review our other compensation plans, including the goals and objectives thereof, and to recommend changes to these plans to our Board of Directors. The Compensation Committee is comprised of three directors, currently consisting of Ms. Kennedy and Messrs. Lochrie and McGinnis. Each member of the Compensation Committee is required to be independent as defined in the listing standards of The NASDAQ Stock Market. While we have no specific qualification requirements for members of the Compensation Committee, we expect members of the Compensation Committee to have knowledge and experience regarding compensation matters as developed through their respective business experience in both management and advisory roles, including general business management, executive compensation and employee benefits experience. We believe that the collective achievements and knowledge of the Compensation Committee will provide us with extensive diversity in experience, culture and viewpoints.

Our Compensation Committee operates under a written charter approved by our Board of Directors, a copy of which will be made available on our website and in print to any shareholder who requests it. On an annual basis, the Compensation Committee will evaluate its performance under the charter to ensure that it appropriately addresses the matters that are within the scope of committee responsibility. When necessary, the Compensation Committee will recommend amendments to its charter to the Board of Directors for approval.

The Compensation Committee will have the authority, at the Company’s expense, to retain independent counsel or other advisers as it deems necessary in connection with its responsibilities.

Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee of our Board of Directors makes recommendations to our Board of Directors of individuals qualified to serve as directors and committee members for our Board of Directors; advises our Board of Directors with respect to Board of Directors composition, procedures and committees; has developed and presented our Board of Directors with a set of corporate governance principles; and oversees the evaluation of our Board of Directors and our management. Our Nominating and Corporate Governance Committee currently consists of Ms. Kennedy and Messrs. Erbey, Lochrie and McGinnis. We have relied on a limited exception to the independence requirements set forth in the rules of The NASDAQ Stock Market in appointing Mr. Erbey as a member of the Nominating and Corporate Governance Committee. Our Nominating and Corporate Governance Committee operates under a written charter approved by our Board of Directors, a copy of which will be made available on our website and in print to any shareholder who requests it. It is the policy of our Nominating and Corporate Governance Committee to consider candidates for director recommended by our shareholders. In evaluating all nominees for director, our Nominating and Corporate Governance Committee takes into account the applicable requirements for directors under the Exchange Act and the listing standards of The NASDAQ Stock Market. In addition, our Nominating and Corporate Governance Committee takes into account our best interests, as well as such factors as knowledge, experience, skills, expertise, diversity and the interplay of the candidate’s experience with the background of other members of our Board of Directors. The Nominating and Corporate Governance Committee views diversity in an expansive way to include differences in prior work experience, viewpoint, education and skill set. The Nominating and Corporate Governance Committee will periodically assess the appropriate size of the Board of Directors and whether any vacancies on the Board of Directors are anticipated. Various potential candidates for director will then be identified. Candidates may come to the attention of the Nominating and Corporate Governance Committee through current Board of Directors members, professional search firms, shareholders or industry sources.

In evaluating a candidate, the Nominating and Corporate Governance Committee considers factors other than the candidate’s qualifications, including the current composition of the Board of Directors, the balance of management and independent directors, the need for Audit Committee expertise and the evaluations of other prospective nominees. In connection with this evaluation, the Nominating and Corporate Governance Committee will determine whether to interview the prospective nominee and, if warranted, one or more members of the Nominating and Corporate Governance Committee, and others as appropriate, will interview prospective nominees. After completing this evaluation and interview, the

Nominating and Corporate Governance Committee will make a recommendation to the full Board of Directors as to the persons who should be nominated by the Board of Directors. The Board of Directors will determine the nominees after considering the recommendation and report of the Nominating and Corporate Governance Committee. Should our shareholders recommend a candidate for director, our Nominating and Corporate Governance Committee would evaluate such candidate in the same manner that it evaluates any other nominee.

No member of the Compensation Committee was at any time after the date of our formation, or currently is, an officer or employee of the Company, and no member of the Compensation Committee had any relationship with us requiring disclosure under Item 404 of SEC Regulation S-K. None of our executive officers has served on the Board of Directors or Compensation Committee of any other entity that has or had one or more executive officers who served as a member of our Board of Directors from the date of our formation through the date of this offering.

Our Board of Directors has adopted Corporate Governance Guidelines to provide a framework for us and our Board of Directors to ensure effective corporate governance. The Corporate Governance Guidelines covers topics such as director qualification standards, Board of Directors and committee composition, director responsibilities, director access to management and independent advisors, director compensation, director orientation and continuing education, management succession and annual performance appraisal of the Board of Directors.

Our Nominating and Corporate Governance Committee will review our Corporate Governance Guidelines at least once a year and, if necessary, recommend changes to our Board of Directors. Our Corporate Governance Guidelines will be made available on our website and in print to any shareholder who requests them.

Our Board of Directors has adopted a Code of Business Conduct and Ethics that applies to our directors, officers and employees, as required by listing standards applicable to The NASDAQ Stock Market. Any waivers from this Code of Business Conduct and Ethics for directors or executive officers must be approved by our Board of Directors or a board committee and must be promptly disclosed to our shareholders. The Code of Business Conduct and Ethics has been made available on our website and in print to any shareholder who requests a copy. Any amendments to the Code of Business Conduct and Ethics, as well as any waivers that are required to be disclosed under the rules of the SEC or the listing standards of The NASDAQ Stock Market, will be posted on our website.

We pay the following cash compensation to our non-executive directors in quarterly installments:

Our Articles of Association provide that our Board of Directors, or a committee thereof, has the authority to set the compensation of directors.

Any director compensation may be prorated for a director serving less than a full one year term as in the case of a director joining our Board of Directors after an annual meeting of shareholders. Directors will be reimbursed for reasonable travel and other expenses incurred in connection with attending meetings of the Board of Directors and its committees. Directors’ compensation will be subject to review and adjustment by the Board of Directors from time to time.

The Compensation Committee of our Board of Directors makes all decisions regarding executive officer compensation. The following describes the Compensation Committee’s executive officer compensation philosophies, objectives and actions. The Compensation Committee oversees our compensation and employee benefit plans and practice and may change the compensation policies described below in the future.

The primary philosophy underlying our executive compensation program is to align executives’ interests with those of the shareholders by rewarding performance that achieves or exceeds specific annual and strategic goals with the ultimate objective of generating a stable and sustainable dividend. We intend to review both the performance and compensation of our executive officers annually to ensure that we maintain our ability to attract and retain superior employees in key positions and that compensation provided to key employees remains competitive relative to the compensation paid to similarly situated executives of our peer companies. To achieve these objectives, executive compensation packages will include both base and incentive-based compensation that rewards performance as measured against established goals.

Role of Executive Officers and Compensation Committee in Compensation Decisions

The President, Mr. Van Vlack, will annually review the performance of each other executive officer. Mr. Van Vlack’s performance will be annually reviewed by the Compensation Committee. Mr. Van Vlack’s conclusions and recommendations regarding executive officer incentive award amounts will be presented to the Compensation Committee for its consideration and approval. The Compensation Committee will have the authority to exercise its discretion in accepting, rejecting and/or modifying any such executive compensation recommendations.

The current compensation package for our executive officers will consist of base salary and annual incentive compensation. This compensation structure will provide each executive officer with a competitive salary, while emphasizing an incentive compensation element that is tied to the achievement of corporate goals and strategic initiatives as well as individual performance. We believe that the following elements of compensation are appropriate in light of our performance, industry, current challenges and environment.

Base salaries for our executive officers are established based on individual qualifications and job responsibilities while taking into account compensation levels at similarly situated companies for similar positions. Base salaries of the executive officers will be reviewed annually during the performance appraisal process with adjustments made based on an analysis of compensation levels necessary to maintain and attract quality personnel, an internal review of the executive officer’s compensation in relation to other personnel, individual performance of the executive officer and corporate performance. Salary levels will also be considered upon a promotion or other change in job responsibility. For compensation years after 2012, the Compensation Committee will set the base salary for the President, and the President will set the base salaries for all other executive officers, in each case, subject to approval by the Compensation Committee. The following are the base salaries for our executive officers for 2012:

The Compensation Committee determined that Mr. Van Vlack’s 2012 base salary should be $35,000 higher than his 2012 Ocwen base salary in view of the additional strategic responsibilities that he will take on in his new position as President of the Company. The Compensation Committee determined that the 2012 base salary for each of Messrs. Lauter, Delgado and McElroy should be the same as the 2012 base salary that each was receiving at Ocwen primarily because the change in job scope and responsibilities of each executive was not large enough to warrant an increase in the 2012 base salary.

Our incentive compensation plan for executives was originally developed by Mr. Erbey and subsequently ratified and adopted by the Compensation Committee. Pursuant to the plan, a participant can earn incentive compensation paid in cash as determined by the Compensation Committee.

Each executive officer has a targeted annual incentive award that is expressed as a percentage of total target compensation. Currently, 30% to 50% of total target compensation is payable only upon achievement of certain minimum corporate and individual performance levels. The appropriate targeted percentage varies depending on the nature and scope of each executive officer’s responsibilities. The table below reflects the percentage of each executive officer’s target total compensation that was allocated to each of base salary and incentive compensation for 2012:

The targeted incentive compensation for each of our executive officers is shown in the table below:

The Compensation Committee determined that Mr. Van Vlack’s 2012 target incentive award should be $35,000 higher than his 2012 Ocwen target incentive award in view of the additional strategic responsibilities that he will take on in his new position as President. The Compensation Committee determined that the 2012 target incentive award for each of Messrs. Lauter, Delgado and McElroy should be the same as the 2012 target incentive award that each was receiving at Ocwen, primarily because the change in job scope and responsibilities of each executive was not large enough to warrant an increase in the 2012 target incentive award.

Our annual incentive-based cash compensation is structured to motivate executives to achieve pre-established key performance indicators by rewarding the executives for such achievement. This is accomplished by using a balanced scorecard methodology that incorporates multiple financial and non-financial performance indicators. This corporate scorecard will be approved annually by the Compensation Committee and/or the full Board of Directors and will be used by the Compensation Committee as a factor to determine the appropriate amount of incentive compensation to be paid to the President and other key executives. In determining whether to approve the corporate scorecard each year, the Compensation Committee will consider a number of factors, including whether the goals are consistent with and likely to enhance corporate performance including generating a stable and sustainable dividend as well as the level of difficulty associated with attainment of each goal in the scorecard.

The corporate scorecard will be based on achieving (i) the Dividend Target, (ii) the Earnings Target, (iii) the Advance Financing Target and (iv) the Completion of the Key Strategic Initiatives as determined by the Compensation Committee.

The incentive awards of our executive officers for 2012 are structured so that compensation opportunities are related to (i) the performance appraisal of the executive officer (20%) and (ii) the performance within the business or support unit as expressed on each executive officer’s scorecard (80%).

Each executive officer’s personal scorecard contains key components of the Company’s strategic initiatives related to the executive’s business or support unit. The components in each scorecard are weighted individually based on relevance to the ultimate financial performance of the Company and achievement of the strategic initiatives. Additionally, in the process of developing the weighted value of each goal in the executive’s scorecard, a methodology is used to discourage an executive from pursuing short-term risks to attain their goals. Within each component of the scorecard, there are three established levels of achievement: threshold, target and outstanding. Each level of achievement is tied to a relative point on a percentage scale which indicates the executive officer’s level of goal achievement within each component of the scorecard. Achieving the threshold level of achievement will earn the executive officer 50% of the target incentive compensation tied to such goal; the target level of achievement will earn the executive officer 100% of the target incentive compensation tied to such goal; and the outstanding level of achievement will earn the executive officer 150% of the target incentive compensation tied to such goal. Any achievement below the threshold level will not entitle the executive to compensation for the associated goal.

These goals and initiatives will be further cascaded to all of our incentive-eligible employees in their personal scorecards. Within this program, all incentive-eligible employees of the organization will be tied to a personal or business unit scorecard from which to measure performance against goals that are directly linked to corporate profitability and strategy. This incentive compensation structure is intended to align the goals of our executives with the overall success of the Company, while establishing clear performance standards within their respective business or support units.

The scorecards will be communicated to all incentive-eligible employees by the employee’s immediate supervisor and are available to employees at all times in our performance management tracking system. Performance against such scorecards will be reviewed with senior management on a quarterly basis and after the end of each year.

As noted above, executives have 20% of their incentive compensation determined by their performance appraisal for the service year. Each of our executive officers will perform a self-assessment as to his performance against his goals for the applicable year. Our President will use these assessments to prepare a written performance appraisal for each of the other executive officers. The President will present the performance appraisal scores and personal scorecard performance to the Compensation Committee and will make recommendations as to the incentive compensation for each executive officer. The Compensation Committee will evaluate the recommendations and make the final incentive compensation award determinations for the executives and other incentive-eligible employees. Annual incentive compensation will be paid to our executives and other incentive-eligible employees after Compensation Committee approval following the service year associated with the incentive.

In addition to the compensation described above, for our President there will be an incentive enhancement based on the month-end weighted average gross assets of the Company.

We have not developed share ownership or retention policies, guidelines or requirements. We believe that a cash-based compensation plan will be successful in retaining and motivating executive officers and can be designed to align executive compensation with shareholders’ interests with less administrative expense and complexity than an equity plan. No equity awards will be granted to employees in connection with the offering and we anticipate that none will be granted prior to the end of calendar year 2012. The Compensation Committee may consider adopting an equity-based plan in the future for all or a select portion of our executive officers. We maintain an insider trading policy and a management directive detailing our window-period policy governing the timing of transactions in our securities for directors and executives.

Our policy with respect to other employee benefit plans is to provide benefits to our employees, including executive officers, that are comparable to benefits offered by companies of a similar size to ours. A competitive comprehensive benefit program is essential in achieving the goal of attracting and retaining highly qualified employees.

Since we have no employment agreements with our executive officers, we intend to handle each termination as appropriate in light of the circumstances. Without any special agreement related to termination, an executive officer would be entitled to receive his or her base salary and applicable employee benefit plans and programs through the date of termination.

Based on information available to us, the following table sets forth certain information regarding the beneficial ownership of our ordinary shares as of August 17, 2012 by:

Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to the securities. Unless otherwise noted, each beneficial owner has sole voting and investing power over the shares shown as beneficially owned except to the extent authority is shared by spouses under applicable law.

We have entered into various agreements with Ocwen, Ocwen Loan Servicing and Altisource. William C. Erbey, our founder and the Chairman of our Board of Directors, is also the Chairman of the Board of Directors and largest shareholder of Ocwen and the Chairman of the Board of Directors and largest shareholder of Altisource. As of June 30, 2012, Mr. Erbey was the beneficial owner of approximately 13% of Ocwen’s common stock and approximately 25% of Altisource’s common stock. Mr. Erbey is deemed to have a direct or indirect material interest in the transactions we entered into pursuant to the Purchase Agreement, Subservicing Agreement, Servicing Advance Facility Agreements, Ocwen Professional Services Agreement and Altisource Administrative Services Agreement. Each of these related party agreements is described in more detail below and under “The Business.”

This agreement, in conjunction with the related sale supplements, sets forth the terms of our purchase of the Aggregate Purchased Assets from Ocwen Loan Servicing. We pay Ocwen Loan Servicing a monthly base fee equal in the aggregate to 12% of the servicing fee revenue recognized for that month with respect to the Initial Mortgage Servicing Rights. So long as the Required Third Party Consents have not been obtained with respect to the transfer of legal ownership of any Initial Mortgage Servicing Right, Ocwen Loan Servicing will remain obligated to perform its obligations as servicer under the related pooling and servicing agreement, we will be required to purchase any servicing advances that Ocwen Loan Servicing is required to make pursuant to such pooling and servicing agreement and Ocwen Loan Servicing will be prohibited from taking actions inconsistent with our right to acquire legal ownership of the related mortgage servicing right upon receipt of the Required Third Party Consents. The agreement included customary representations and warranties made by Ocwen Loan Servicing with respect to the assets being purchased, and provides for indemnification to us for any losses we suffer as a result of the breach of such representations and warranties.

This agreement also provides a framework for us to purchase additional Mortgage Servicing Assets and associated servicing advances from Ocwen Loan Servicing in the future, although no such future acquisitions have been agreed upon, and there is no assurance that future acquisitions will take place or that we will be able to obtain the third party approvals and consents necessary to transfer any related mortgage servicing rights to us. Each of the Flow Purchases were made pursuant to a sales supplement to the Purchase Agreement on terms similar to the initial Ocwen Purchase. We expect to enter into a sales supplement to the Purchase Agreement in connection with the Planned Acquisition and we expect that the terms will be similar.

This agreement, in conjunction with the related subservicing supplement, provides for appointments Ocwen Loan Servicing to act as the subservicer of the mortgage loans underlying the Initial Mortgage Servicing Rights upon the transfer of legal ownership of the Initial Mortgage Servicing Rights to us. The Subservicing Agreement has an initial term ending six years from the closing of the Initial Ocwen Purchase. This agreement also provides a framework for us to engage Ocwen Loan Servicing as subservicer for any mortgage servicing rights we acquire legal ownership of in the future.

Pursuant to the Subservicing Agreement, we will pay Ocwen Loan Servicing a base subservicing fee equal in the aggregate to 12% of the servicing fee revenue we recognize for that month with respect to any Initial Mortgage Serving Rights that we acquire legal ownership of following receipt of the applicable Required Third Party Consents. The monthly base fee payable to Ocwen Loan Servicing is expressed as a percentage of the servicing fee revenue actually collected in any given month because servicing fee revenue collected varies from month to month based on the level of collections of principal and interest for the mortgage loans serviced.

Ocwen Loan Servicing will also receive a monthly performance based incentive fee to the extent the servicing fee revenue that we recognize for a given month exceeds the retained fee. The percentage used to

calculate the retained fee will change periodically in accordance with a predetermined schedule set forth in each subserving supplement. If we do not receive an amount equal to the retained fee in any given month, as expressed in terms of basis points of the average unpaid principal balance of the mortgage loans serviced, a shortfall in our targeted gross servicing margin percentage will occur. Ocwen Loan Servicing will not earn any performance based incentive fees for any month that there is such a shortfall, or in any subsequent month, until we have recovered such shortfall from amounts that would otherwise be available to pay future performance based incentive fees to Ocwen Loan Servicing.

The servicing fee revenue for the Aggregate Purchased Assets and the pro forma amount of the base fee and performance based incentive fee for the four month period ended June 30, 2012 is shown below.

We also entered into the Servicing Advance Facility Agreements concurrently with the closing of our initial public offering. Pursuant to the Servicing Advance Facility Agreements we assumed the rights and obligations of Ocwen, as administrator, and Ocwen Loan Servicing, as seller and servicer, and the release of Ocwen and Ocwen Loan Servicing were released from their respective obligations, in and under the existing advance financing facility.

The limited recourse notes related to the advance financing facility were issued in four classes of term notes in an aggregate initial principal amount of $811 million and a single class of variable funding notes with an aggregate initial maximum principal balance of $200 million. As of June 30, 2012 the aggregate outstanding principal balance of the term notes that we assumed was $368.5 million. There was no outstanding principal balance on the variable funding notes. Following the revolving period, which ends on the earlier of August 31, 2013 or the date on which an early amortization event occurs, principal will be paid on the notes to the extent of available funds and in accordance with the priorities of payments set forth in the related transaction documents. We currently pay interest on the notes as set forth below:

This agreement requires us to provide certain services to Ocwen, and for Ocwen to provide certain services to us, for an initial term of six years, subject to renewal, with pricing terms intended to reflect market rates. Services provided by us under this agreement include pricing and valuation analysis of

potential mortgage servicing rights acquisitions, treasury management and other similar services. Services provided by Ocwen under this agreement include legal, licensing and regulatory compliance support services, risk management services and other similar services. The services provided by the parties under this agreement are on an as-needed basis, and the fees will be based on the actual costs incurred plus an additional markup of 15%.

This agreement requires Altisource to provide certain administrative services to us for an initial term of six years, subject to renewal, with pricing terms intended to reflect market rates. Services provided to us under this agreement include human resources administration (benefit plan design, recruiting, hiring and training and compliance support), legal and regulatory compliance support services, general business consulting, corporate services (facilities management, security and travel services), finance and accounting support services (financial analysis, financial reporting and tax services), risk management services, vendor management and other related services. The services Altisource provides for us under this agreement are on an as needed basis, and the fees we pay Altisource will be based on the actual costs incurred by them plus an additional markup of 15%.

On February 23, 2011 we entered into a stock purchase agreement with William C. Erbey, our founder and the Chairman of our Board of Directors, pursuant to which he agreed to purchase $10 million of our ordinary shares at the initial public offering price per share of $14.00 in a private placement exempt from the registration requirements of the Securities Act pursuant to Section 4(2) of the Securities Act. The private placement was consummated concurrently with our initial public offering. Mr. Erbey currently owns 5.2% of our outstanding ordinary shares. These ordinary shares owned by Mr. Erbey are subject to “lock-up” restrictions preventing transfer by him of any such shares for 18 months from the date of the pricing of our initial public offering.

William C. Erbey is entitled to rights with respect to the registration of his ordinary shares he acquired in the private placement under the Securities Act concurrent with our initial public offering.

William C. Erbey agreed not to sell or otherwise dispose of any ordinary shares he acquired without the prior written consent of Wells Fargo Securities, LLC for a period not to exceed 18 months from the date of the pricing of our initial public offering, subject to certain exceptions. These lock-up restrictions will limit his ability to exercise the demand registration rights and piggyback registration rights described below during the lock-up period. See “Private Placement.”

Pursuant to a Registration Rights Agreement with Mr. Erbey, Mr. Erbey may, on not more than one occasion, request that we register all or a portion of his ordinary shares beginning 18 months from the date of the pricing of our initial public offering.

In the event that we propose to register any of our securities under the Securities Act in connection with the public offering of such securities solely for cash, Mr. Erbey will be entitled to “piggyback” registration rights allowing him to include his shares in such registration. As a result, whenever we propose to file a registration statement under the Securities Act, Mr. Erbey is entitled to notice of the registration and has the right to include his shares in the registration, subject to the lock-up limitations described above, beginning 18 months from the date of the pricing of our initial public offering.

The Board of Directors has adopted a policy and procedure for review, approval and monitoring of transactions involving us and related persons (directors and executive officers or their immediate family members, or shareholders owning 5% or greater of our outstanding ordinary shares) within our written Code of Business Conduct and Ethics is available on our website. We will make these materials available to any shareholder who requests a copy. This policy and procedure is not limited to related person transactions that meet the threshold for disclosure under the relevant SEC rules and regulations as it broadly covers any situation in which a conflict of interest may arise.

Any situation that potentially qualifies as a conflict of interest is to be immediately disclosed to the General Counsel to assess the nature and extent of any concern as well as the appropriate next steps. The General Counsel will notify the Chairman of the Board of Directors if any such situation requires approval of the Board of Directors. Related persons will be required to obtain the prior written approval of the Audit Committee of the Board of Directors before participating in any transaction or situation that may pose a conflict of interest. In considering a transaction, the Audit Committee will consider all relevant factors, including (i) whether the transaction is in our best interests; (ii) alternatives to the related person transaction; (iii) whether the transaction is on terms comparable to those available to third parties; (iv) the potential for the transaction to lead to an actual or apparent conflict of interest and any safeguards imposed to prevent such actual or apparent conflicts; and (v) the overall fairness of the transaction to us. The Audit Committee will periodically monitor any approved transactions to ensure that there are no changed circumstances that would render it advisable for us to amend or terminate the transaction.

The following summary is a description of the material terms of our share capital. We urge you to read our Articles of Association which have been filed with the SEC. See “Where You Can Find Additional Information.” The following summary also highlights material differences between Cayman Islands and Delaware corporate laws.

We are authorized to issue up to 200,000,000 ordinary shares, par value $0.01 per share. Upon the consummation of the offering, we will have ordinary shares issued and outstanding. Our shareholders are entitled to receive notice of the date of our general meetings and attend and cast one vote for each share on all matters submitted to a vote of shareholders, including the election of directors. Our shareholders are entitled to receive ratably such dividends, if any, as may be declared by the Board of Directors out of funds legally available therefor and subject to any preference of any then-authorized and issued preference shares. Such holders do not have any preemptive or other rights to subscribe for additional shares. All shareholders are entitled to share ratably in any assets for distribution to shareholders upon the liquidation, dissolution or winding up of the Company, subject to any preference of any then-authorized and issued preference shares. There are no conversion, redemption or sinking fund provisions applicable to the ordinary shares. All outstanding ordinary shares are fully paid and non-assessable.

The provisions of our Articles of Association restrict our ability to issue and sell additional ordinary shares, including with respect to options and warrants, at a price below our then current net asset value per share without first obtaining the prior approval of holders of at least a majority of the outstanding ordinary shares voted with respect to such approval. The net asset value of our ordinary shares is determined by dividing the book value of our total assets minus our liabilities by the total number of our ordinary shares then outstanding. Any amendment, modification or rescission of this provision will require the affirmative vote of holders of at least two-thirds of our ordinary shares then outstanding.

Our ordinary shares began trading on The NASDAQ Global Select Market on February 29, 2012, and is quoted under the symbol “HLSS.” The following sets forth the high and low sales price for each quarter since January 1, 2012.

As of March 12, 2012, there were 3,035 beneficial holders of our ordinary shares.

Our Board of Directors has the authority under our Articles of Association, without further action by our shareholders, to issue an unlimited number of preference shares in one or more classes or series and to determine the designations, number of shares of such class or series, voting powers, preferences, privileges and other rights, including dividend rights, conversion rights, redemption rights, liquidation preferences and other rights of priority and/or restrictions upon such shares, any or all of which may be greater than the rights of the ordinary shares. Subject to our Board of Director’s duty to act for a proper purpose, preference shares can be issued quickly with terms calculated to delay or prevent a change of control of the Company or make removal of management more difficult. In addition, the issuance of preference shares may have the effect of decreasing the market price of our ordinary shares and may adversely affect the voting and other rights of the holders of ordinary shares. No such preference shares have been issued to date, and we have no present plans to issue any such preference shares.

Our ordinary shares are freely transferrable, except in the very limited circumstances provided for under Cayman Islands law and our Articles of Association. Notwithstanding the foregoing, all transfers of our ordinary shares must comply with the rules and regulations of The NASDAQ Stock Market and any applicable securities laws.

There are no provisions in our Articles of Association governing the ownership threshold above which shareholder ownership must be disclosed.

We may from time to time by ordinary resolution increase our share capital by such sum, to be divided into shares of such amount, as such resolution shall prescribe. An ordinary resolution is a resolution that must be approved by holders of a majority of outstanding voting shares to become effective. The new shares shall be subject to the same provisions with reference to the payment of calls, lien, transfer, transmission, forfeiture and otherwise as the shares in the original share capital. We may by ordinary resolution:

We may by special resolution reduce our authorized but unissued share capital and any capital redemption reserve fund in any manner authorized by law. A special resolution is a resolution that must be approved by holders of more than two-thirds of the outstanding voting shares to become effective; provided, however, a company’s articles of association may impose a higher threshold. Our Articles of Association require special resolutions to be approved by two-thirds of the outstanding voting shares.

Some provisions of our Articles of Association may discourage, delay or prevent a change of control of our company or management that shareholders may consider favorable, including provisions that:

The transfer agent and registrar for our ordinary shares is American Stock Transfer & Trust Company, LLC.

The Cayman Islands Companies Law (the “Companies Law”) is modeled after English law but does not follow many recent English law statutory enactments. In addition, the Companies Law differs from laws applicable to United States corporations and their shareholders. Set forth below is a summary of the significant differences between the provisions of the Companies Law applicable to us and, for comparison purposes, the laws applicable to companies incorporated in the State of Delaware and their shareholders.

The Companies Law allows for the merger of two companies into either one consolidated company or one company merged into another so as to form a single surviving company. The merger or consolidation of two or more companies under Cayman Islands law requires the directors of the companies to enter into and to approve a written plan of merger or consolidation, which must also be authorized by each constituent company by a special resolution. The Companies Law also includes statutory provisions that facilitate the reconstruction and amalgamation of companies, provided that the arrangement is approved by a majority in number of shareholders and creditors with whom the arrangement is to be made, and who must in addition represent 75% in value of each such class of shareholders or creditors, as the case may be, that are present and voting either in person or by proxy at a meeting or meetings convened for that purpose.

The convening and subsequent arrangement of the meetings must be sanctioned by the Grand Court of the Cayman Islands. While a dissenting shareholder has the right to express to the court the view that the transaction ought not to be approved, the court can be expected to approve the arrangement if it determines that:

When a takeover offer is made and accepted (within four months) by holders of not less than 90% of the shares affected, the offeror may, within a two-month period, require the holders of the remaining shares to transfer such shares on the terms of the offer. An objection can be made to the Grand Court of the Cayman Islands but this is unlikely to succeed unless there is evidence of fraud, bad faith or collusion. If the arrangement and reconstruction is thus approved, the dissenting shareholder would have no rights comparable to appraisal rights, which would otherwise ordinarily be available to dissenting shareholders of a Delaware corporation, providing rights to receive payment in cash for the judicially determined value of the shares.

We are not aware of any reported class action or derivative action having been brought in a Cayman Islands court. In principle, the company itself will normally be the proper plaintiff in actions against

directors, and derivative actions may not generally be brought by a minority shareholder. However, based on English authorities, who would in all likelihood be of persuasive authority in the Cayman Islands, there are exceptions to the foregoing principle, including when:

Under Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation and its shareholders. This duty has two components: the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent person would exercise under similar circumstances. Under this duty, a director must inform himself of, and disclose to shareholders, all material information reasonably available regarding a significant transaction. The duty of loyalty requires that a director act in a manner he reasonably believes to be in the best interests of the corporation. He must not use his corporate position for personal gain or advantage. This duty prohibits self-dealing by a director and mandates that the best interest of the corporation and its shareholders take precedence over any interest possessed by a director, officer or controlling shareholder and not shared by the shareholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should such evidence be presented concerning a transaction by a director, a director must prove the procedural fairness of the transaction, and that the transaction was of fair value to the corporation.

As a matter of Cayman Islands law, a director of a Cayman Islands company is in the position of a fiduciary with respect to the company and therefore it is considered that he owes the following duties to the company: a duty to act bona fide in the best interests of the company; a duty not to make a profit out of his position as director (unless the company permits him to do so); and a duty not to put himself in a position where the interests of the company conflict with his personal interest or his duty to a third party. A director of a Cayman Islands company owes to the company a duty to act with skill and care. It was previously considered that a director need not exhibit in the performance of his duties a greater degree of skill than may reasonably be expected from a person of his knowledge and experience. However, English and Commonwealth courts have moved towards an objective standard with regard to the required skill and care, and these authorities are likely to be followed in the Cayman Islands.

Cayman Islands law does not prohibit directors from voting on corporate matters for which they have an interest if the interested director can maintain his or her fiduciary duties to the company. Under our Articles of Association, subject to any separate requirement for audit committee approval under the applicable rules of The NASDAQ Stock Market or unless disqualified by the chairman of the relevant board meeting, so long as a director discloses the nature of his interest in any contract or arrangement in which he or she is interested, such a director may vote in respect of any contract or proposed contract or arrangement in which such director is interested and may be counted in the quorum at such meeting.

Under the Delaware General Corporation Law, a corporation may eliminate the right of shareholders to act by written consent by amendment to its certificate of incorporation. Cayman Islands law and our Articles of Association provide that shareholders may approve corporate matters by way of a unanimous written resolution signed by or on behalf of each shareholder who would have been entitled to vote on such matter at a general meeting without a meeting being held.

Under the Delaware General Corporation Law, a shareholder has the right to put any proposal before the annual meeting of shareholders, provided it complies with the notice provisions in the governing documents. A special meeting may be called by the Board of Directors or any other person authorized to do so in the governing documents, but shareholders may be precluded from calling special meetings.

Pursuant to our Articles of Association, holders of our ordinary shares are prohibited from requesting a shareholders’ meeting. As an exempted Cayman Islands company, we are not obliged by law to call shareholders’ annual general meetings. However, our Articles of Association require us to call such meetings at least once in each calendar year at such time and place as our directors appoint, provided that the period between the date of one annual general meeting and that of the next will not be longer than the period permitted by the rules and regulations applicable to the listing of the ordinary shares on The NASDAQ Global Select Market.

Our Articles of Association provide for certain procedural restrictions on the business that may be transacted at any annual general meeting of the shareholders. In order to propose business to be transacted at an annual general meeting of the shareholders, a shareholder must have given timely notice in writing to the Company. To be timely, a shareholder’s notice must be received by the Company not less than 90 days prior to the anniversary of the date of the immediately preceding annual general meeting (but if the date of the forthcoming annual general meeting is more than 30 days before or after such anniversary date, such written notice must instead be received by the Company by the close of business on the 10th day following the date on which the Company first makes public disclosure of the meeting date). Each such notice given by such shareholder must set forth:

Under the Delaware General Corporation Law, cumulative voting for elections of directors is not permitted unless the corporation’s certificate of incorporation specifically provides for it. Cumulative voting potentially facilitates the representation of minority shareholders on a Board of Directors since it permits the minority shareholder to cast all the votes to which the shareholder is entitled on a single director, which increases the shareholder’s voting power with respect to electing such director. There are no prohibitions in relation to cumulative voting under the laws of the Cayman Islands; however, our Articles of Association do not provide for cumulative voting. As a result, our shareholders are not afforded any less protections or rights on this issue than shareholders of a Delaware corporation.

Under the Delaware General Corporation Law, any director or the entire Board of Directors may be removed, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of directors. Under our Articles of Association, directors can be removed with cause by the vote of holders of a majority of our shares, cast at a general meeting, or by unanimous written resolution of all shareholders.

The Delaware General Corporation Law contains a business combination statute applicable to Delaware public corporations whereby, unless the corporation has specifically elected not to be governed by such statute by amendment to its certificate of incorporation, it is prohibited from engaging in certain business combinations with an “interested shareholder” for three years following the date that such person becomes an interested shareholder. An interested shareholder generally is a person or group who or which owns or owned 15% or more of the target’s outstanding voting stock within the past three years. This has the effect of limiting the ability of a potential acquirer to make a two-tiered bid for the target in which all shareholders would not be treated equally. The statute does not apply if, among other things, prior to the date on which such shareholder becomes an interested shareholder, the Board of Directors approves either the business combination or the transaction that resulted in the person becoming an interested shareholder. This encourages any potential acquirer of a Delaware public corporation to negotiate the terms of any acquisition transaction with the target’s Board of Directors.

Cayman Islands law has no comparable statute. As a result, we cannot avail ourselves of the types of protections afforded by the Delaware business combination statute. However, although Cayman Islands law does not regulate transactions between a company and its significant shareholders, it does provide that such transactions must be entered into bona fide in the best interests of the company and not with the effect of constituting a fraud on the minority shareholders.

Under the Delaware General Corporation Law, unless the Board of Directors approves the proposal to dissolve, dissolution must be approved by shareholders holding 100% of the total voting power of the corporation. Only if the dissolution is initiated by the Board of Directors may it be approved by a simple majority of the corporation’s outstanding shares. Delaware law allows a Delaware corporation to include in its certificate of incorporation a supermajority voting requirement in connection with a dissolution initiated by the board. Under the Companies Law of the Cayman Islands and our Articles of Association, our company may be voluntarily dissolved, liquidated or wound up only by the vote of holders of two-thirds of our shares voting at a meeting or by the holders of at least one-half of our shares voting at a meeting if we are no longer able to pay our debts as they fall due or in each case by the unanimous written resolution of all shareholders. In addition, our company may be wound up by the Grand Court of the Cayman Islands if the company is unable to pay its debts or if the court is of the opinion that it is just and equitable that our company is wound up.

Under the Delaware General Corporation Law, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of such class, unless the certificate of incorporation provides otherwise. Under Cayman Islands law and our Articles of Association, if our share capital is divided into more than one class of shares, we may vary the rights attached to any class only with the vote at a class meeting of holders of two-thirds of the shares of such class or unanimous written resolution, provided that if such variation has the effect of altering our Articles of Association, the variation will need to be approved in the manner described below under “—Amendment of Governing Documents.”

Under the Delaware General Corporation Law, a corporation’s governing documents may be amended with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise. As permitted by Cayman Islands law, our Articles of Association may only be amended with the vote of holders of two-thirds of our shares voting at a meeting or the unanimous written resolution of all shareholders.

Indemnification of Directors and Executive Officers and Limitation of Liability

Cayman Islands law does not limit the extent to which a company’s Articles of Association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against civil fraud or the consequences of committing a crime or gross negligence or willful default. Our Articles of Association permit indemnification of officers and directors for losses, damages, costs and expenses incurred in their capacities as such unless such losses or damages arise from dishonesty, fraud, gross negligence or willful default of such directors or officers. This standard of conduct is generally the same as permitted under the Delaware General Corporation Law to a Delaware corporation. Our Articles of Association also provide that the Company may purchase and maintain insurance for the benefit of any director or officer of the Company against any liability which, by virtue of any rule of law, would otherwise attach to such person in respect of any negligence, default, breach of duty or breach of trust of which such person may be held liable in relation to the Company.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted for our directors, officers or persons controlling us under the foregoing provisions, we have been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable as a matter of U.S. law.

There are no limitations under Cayman Islands law nor are any limitations imposed by our Articles of Association on the rights of non-resident or foreign shareholders to hold or exercise voting rights on our shares. In addition, there are no provisions in our Articles of Association governing the ownership threshold above which shareholder ownership must be disclosed.

Our shareholders will have no general right under Cayman Islands law to inspect or obtain copies of our list of shareholders or corporate records except our Articles of Association.

Upon completion of the offering, of our ordinary shares will be outstanding. Of these shares, ordinary shares will be freely tradable without restriction or limitation under the Securities Act.

The 714,285 ordinary shares purchased by Mr. Erbey in a private placement concurrently with our initial public offering are subject to lock-up restrictions for a period of 18 months following the date of the pricing of our initial public offering, subject to certain exceptions. Following the expiration of this lock-up period, these shares will be freely tradable, subject to volume limitations pursuant to Rule 144 under the Securities Act for as long as Mr. Erbey is an affiliate of ours. Under Rule 144, our affiliates or persons selling ordinary shares on behalf of our affiliates generally may not sell during any three-month period a number of our ordinary shares that exceeds the greater of 1% of the number of our ordinary shares then outstanding, or the average weekly trading volume of our ordinary shares during the four calendar weeks preceding the filing of a notice on Form 144 with respect to such sale. We have also granted Mr. Erbey certain registration rights pursuant to the Registration Rights Agreement with respect to these shares.

No prediction can be made as to the effect, if any, that future sales of our ordinary shares will have on the market price prevailing from time to time. Sales of substantial amounts of our ordinary shares, or the perception that such sales could occur, may adversely affect prevailing market prices of our ordinary shares. See “Risk Factors—Risks Related to Our Ordinary Shares and this offering.”

The following summary of material Cayman Islands and U.S. federal income tax consequences of an investment in our ordinary shares is based upon laws and relevant interpretations thereof in effect as of the date of this prospectus, all of which are subject to change. This summary does not deal with all possible U.S. federal income tax consequences relating to an investment in our ordinary shares, or any other U.S. federal tax consequences or tax consequences under state, local and other tax laws.

The Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation and there is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to our company levied by the government of the Cayman Islands except for stamp duties which may be applicable on instruments executed in, or after execution brought within the jurisdiction of the Cayman Islands. There are no exchange control regulations or currency restrictions in the Cayman Islands.

We have, pursuant to Section 6 of the Tax Concessions Law (2011 Revision) of the Cayman Islands, obtained an undertaking from the Governor in Cabinet that:

The undertaking that we have obtained is for a period of 20 years from December 14, 2010.

The following summary is a discussion of material U.S. federal income tax considerations applicable to the purchase, ownership and disposition of ordinary shares by U.S. Holders. This discussion deals only with our ordinary shares held as capital assets by U.S. Holders who purchase ordinary shares in this offering. This discussion does not cover all aspects of U.S. federal income taxation that may be relevant to the purchase, ownership or disposition of our ordinary shares by prospective investors in light of their particular circumstances. In particular, this discussion does not address all of the tax considerations that may be relevant to certain types of investors subject to special treatment under U.S. federal income tax laws, such as the following:

Furthermore, this discussion is based upon the provisions of the Internal Revenue Code of 1986, as amended (the “Code”), the Treasury regulations promulgated thereunder and administrative and judicial interpretations thereof, all as of the date hereof. Such authorities may be repealed, revoked, modified or subject to differing interpretations, possibly on a retroactive basis, so as to result in U.S. federal income tax consequences different from those discussed below. This discussion does not address U.S. federal estate or gift taxes or any state, local or non-U.S. tax considerations.

For purposes of this discussion, you will be considered a “U.S. Holder” if you beneficially own our ordinary shares and you are for U.S. federal income tax purposes one of the following:

If you are a partnership or other entity or arrangement treated as a partnership for U.S. federal income tax purposes, the U.S. federal income tax treatment of your partners generally will depend upon the status of such partners and your activities.

If you are considering the purchase of our ordinary shares, we urge you to consult your own tax advisors concerning the particular U.S. federal income and other tax consequences to you of the purchase, ownership and disposition of our ordinary shares, as well as any consequences to you arising under state, local and non-U.S. tax laws.

We intend to engage independent third parties such as Ocwen Loan Servicing to service the mortgage loans underlying the mortgage servicing assets that we acquire. Home Loan Servicing Solutions, Ltd. will not have any U.S. employees or activities. Activities in the U.S. necessary for us to fulfill our business purpose will be performed through our subsidiary, HLSS Management, LLC, which is the employer of all of our U.S. based employees and which has elected to be taxed as a corporation for U.S. federal income tax purposes. Accordingly, we do not expect to be treated as engaged in a trade or business in the United States and thus do not expect to be subject to U.S. federal income taxation. Our subsidiary that is treated as a corporation for U.S. federal income tax purposes should be treated as assisting us in managing our assets for our own account, and accordingly also should not be treated as engaged in a trade or business in the United States, but, as a U.S. corporation, will be responsible for U.S. federal income taxes in respect of its net taxable income. The IRS could assert that we are engaged in a U.S. trade or business because we own mortgage servicing rights and are participating in the servicing of U.S. mortgage loans, either directly, or through agents such as Ocwen Loan Servicing. Unless otherwise exempted by an applicable income tax treaty, a non-U.S. corporation that is engaged in a trade or business in the United States is generally subject to U.S. federal income taxation, at the graduated tax rates applicable to U.S. corporations, on the portion of

such non-U.S. corporation’s income that is “effectively connected” with such trade or business. In addition, such non-U.S. corporation may be subject to the U.S. federal branch profits tax on its effectively connected earnings and profits at a rate of 30%, or at such lower rate as may be specified by an applicable income tax treaty. If, contrary to expectations, we are found to be engaged in the conduct of a U.S. trade or business, liability for the foregoing income and branch profits taxes would substantially reduce our earnings available for distribution to our shareholders.

Subject to the PFIC rules discussed below, if we do not qualify as a PFIC, distributions of cash or property that we pay in respect of our ordinary shares will constitute dividends for U.S. federal income tax purposes to the extent paid out of our current or accumulated earnings and profits (as determined for U.S. federal income tax purposes). Distributions to you in excess of our earnings and profits will be treated first as a return of capital to the extent of your tax basis in the ordinary shares on which the distribution was made (with a corresponding reduction in your tax basis in the ordinary shares), and then as capital gain from the sale or exchange of such ordinary shares. We expect that our distributions will not be eligible for the dividends-received deduction for corporate U.S. Holders or the reduced rate applicable to “qualified dividend income” (which, for the taxable years beginning before January 1, 2013, is taxable at the rates generally applicable to long-term capital gains) for U.S. Holders taxed as individuals. Amounts taxable as dividends generally will be treated as foreign source passive income for U.S. foreign tax credit purposes.

Subject to the PFIC rules discussed below, if we do not qualify as a PFIC, upon the sale, exchange or other taxable disposition of ordinary shares, you will recognize capital gain or loss equal to the difference between the amount realized on such sale, exchange or taxable disposition and your tax basis in the ordinary shares disposed of. Such gain or loss generally will be long-term capital gain or loss if your holding period with respect to such ordinary shares is more than one year at the time of the disposition. The deductibility of capital losses is subject to limitations.

Special U.S. federal income tax rules apply to U.S. Holders owning shares of a PFIC. A foreign corporation generally will be classified as a PFIC for U.S. federal income tax purposes in any taxable year in which either:

For this purpose, passive income generally includes, among other things, dividends, interest, rents, royalties, gains from the disposition of passive assets and gains from commodities and securities transactions. In determining whether a foreign corporation is a PFIC, the foreign corporation must take into account its proportionate share of the income and assets of each corporation in which it owns, directly or indirectly, at least 25% (by value) of the stock.

Our special tax counsel, Kramer Levin Naftalis & Frankel LLP, has issued an opinion to us that, based on the Code, Treasury Regulations, court rulings and other administrative guidance from the IRS, all as currently in effect, and based on current estimates of our gross income, gross assets and the nature of our business, we should be treated as a PFIC for U.S. federal income tax purposes for the current taxable year. Furthermore, we expect to operate our business in a manner such that we remain a PFIC for foreseeable future taxable years. Accordingly, you will be subject to different taxation rules with respect to an

investment in our ordinary shares depending on whether you make a QEF or mark-to-market election with respect to your investment in our ordinary shares. Our status as a PFIC depends on meeting either the income test or the asset test described above. These tests are calculated on an annual basis, therefore, while we expect to meet these tests, our counsel cannot definitively determine as of the date of this prospectus whether we will qualify as a PFIC.

A QEF election may be made by completing IRS Form 8621 and attaching it to your timely filed U.S. federal income tax return. If you make a valid, timely QEF election with respect to our ordinary shares, you must report for U.S. federal income tax purposes your pro rata share of our ordinary earnings and net capital gain, if any, for each taxable year for which we are a PFIC that ends with or within your taxable year, regardless of whether or not you received any distributions on the ordinary shares you own. No portion of any such inclusions of ordinary earnings would be eligible to be treated as “qualified dividend income.” If you are a non-corporate U.S. Holder, any such net capital gain inclusions would be eligible for taxation at the preferential capital gain tax rates. Your adjusted tax basis in your ordinary shares would be increased to reflect any taxed but undistributed earnings and profits. Any distribution of earnings and profits that previously had been taxed would not be taxed again when you receive such distribution (nor would distributions in excess of our earnings and profits), but it would result in a corresponding reduction in the adjusted tax basis in your ordinary shares. You would not, however, be entitled to a deduction for your pro rata share of any net losses that we incur with respect to any year. You generally would recognize capital gain or loss on the sale, exchange or other disposition of our ordinary shares. You may make a timely QEF election with respect to your investment in our ordinary shares by filing one copy of IRS Form 8621 with your U.S. federal income tax return for the first year in which you hold our ordinary shares. We intend to provide you with all necessary information on a timely basis in order for you to make a QEF election as described above. You may make a separate election to defer the payment of taxes on undistributed income inclusions under the QEF election rules, but if deferred, any such taxes will be subject to an interest charge.

Although we currently do not have any subsidiaries that are PFICs, there can be no assurance that we will not form or acquire a subsidiary that is a PFIC. In such event, you may need to make the QEF election with respect to each such subsidiary in order to avoid the adverse tax consequences described below. We intend to provide you with all information necessary in order for you to make the QEF election with respect to any of our subsidiaries that may be classified as a PFIC. The mark-to-market election described below generally will not be available with respect to any of our subsidiaries that is a PFIC, rendering such election less beneficial to you than the QEF election.

Alternatively, provided that our ordinary shares are “marketable stock,” you may make a mark-to-market election with respect to our ordinary shares. If you make a valid, timely mark-to-market election with respect to our ordinary shares, you will include in income each year an amount equal to the excess, if any, of the fair market value of the ordinary shares as of the close of your taxable year over your adjusted basis in such ordinary shares. You are allowed a deduction for the excess, if any, of the adjusted basis of the ordinary shares over their fair market value as of the close of your taxable year. Deductions are allowable, however, only to the extent of any net mark-to-market gains on the ordinary shares included in your income for prior taxable years. Amounts included in your income under a mark-to-market election, as well as gain on the actual sale or other disposition of the ordinary shares, are treated as ordinary income. Ordinary loss treatment applies to the deductible portion of any mark-to-market loss on the ordinary shares, as well as to any loss realized on the actual sale or disposition of the ordinary shares, to the extent the amount of such loss does not exceed the net mark-to-market gains previously included for such ordinary shares. Your basis in the ordinary shares will be adjusted to reflect any such income or loss amounts and will be reduced by distributions received. Distributions will not be includable in income, except to the extent they exceed your tax basis in your ordinary shares. If you make a mark-to-market election, it will be effective for the taxable year for which the election is made and all subsequent taxable years in which we are a PFIC unless our ordinary shares are no longer marketable stock or the IRS consents to the revocation of the election.

If you do not make a QEF or mark-to-market election with respect to your investment in our ordinary shares, you would be subject to special rules with respect to (i) any excess distribution (i.e., the portion of any distributions you receive on our ordinary shares in a taxable year in excess of 125% of the average annual distributions you received in the three preceding taxable years, or, if shorter, your holding period for the ordinary shares), and (ii) any gain realized on the sale, exchange or other disposition of ordinary shares. Under these special rules:

If you own ordinary shares during any taxable year that we are treated as a PFIC, you will be required to file IRS Form 8621 (regardless of whether a QEF or mark-to-market election is made). You should also be aware that recently enacted legislation imposes an additional annual filing requirement for U.S. persons owning shares of a PFIC. The legislation does not describe what information would be required to be included in the additional annual filing, but grants the Secretary of the Treasury power to make this determination. You should consult your own tax advisors regarding the application of the PFIC rules to our ordinary shares, the availability and advisability of making a QEF or mark-to-market election and the application of the recently enacted legislation to your particular situation.

If we are not treated as a PFIC, and you paid taxes as if we were a PFIC, then you may be able to claim a refund for taxes you paid in excess of the taxes you actually owed. If you do not timely make such a refund claim, then your refund will be disallowed and you will bear more taxes than you actually owe.

In general, information may be reported to the IRS each year regarding the amount of any dividends on our ordinary shares and the proceeds of any sale of our ordinary shares paid to you during such year unless you are an exempt recipient. A backup withholding tax may apply to such payments if you fail to provide your taxpayer identification number or to make required certifications or you have been notified by the IRS that you are subject to backup withholding. Backup withholding is not an additional tax and any amounts withheld under the backup withholding rules will be allowed as a refund or a credit against your U.S. federal income tax liability, provided that you timely furnish the required information to the IRS.

You should also be aware that recently enacted legislation imposes new reporting requirements with respect to the holding of certain foreign financial assets, including stock of foreign issuers that is not held in an account maintained by a financial institution, if the aggregate value of all such assets exceeds U.S.$50,000. You should consult your own tax advisors regarding the application of these and other information reporting rules applicable to an investment in our ordinary shares and the application of the recently enacted legislation to your particular situation.

We are incorporated in the Cayman Islands because of the following benefits found there:

However, certain disadvantages accompany incorporation in the Cayman Islands. These disadvantages include:

We have appointed the Corporation Trust Company to serve as our agent upon whom process may be served in any action brought against us under the securities laws of the United States.

Walkers, our counsel as to Cayman Islands law, has advised us that there is uncertainty as to whether the courts of the Cayman Islands would:

Walkers has further advised us that a final and conclusive judgment in the federal or state courts of the United States under which a sum of money is payable, other than a sum payable in respect of taxes, fines, penalties or similar charges, is generally recognized and enforceable as a debt in the courts of the Cayman Islands at common law without any re-examination of the merits of the underlying dispute. However, the Cayman Islands courts are unlikely to enforce a punitive judgment of a U.S. court predicated upon the liability provisions of the U.S. federal securities laws without retrieval on the merits at common law if such judgment gives rise to payment obligations that may be regarded as fines, penalties, taxes or similar fiscal or revenue obligations or similar charges or was obtained in a manner or is contrary to natural justice or the public policy of the Cayman Islands.

Wells Fargo Securities, LLC, Barclays Capital Inc. and Citigroup Global Markets Inc. are acting as joint book-running managers of the offering and as representatives of the underwriters named below. Subject to the terms and conditions stated in the underwriting agreement dated , 2012, each underwriter named below has severally agreed to purchase, and we have agreed to sell to that underwriter, the number of ordinary shares set forth opposite the underwriter’s name.

The underwriting agreement provides that the obligations of the underwriters to purchase the ordinary shares included in this offering are subject to approval of legal matters by counsel, including the validity of the ordinary shares, and other conditions contained in the underwriting agreement, such as the receipt by the underwriters of officers’ certificates and legal opinions. The underwriters are obligated to purchase all the ordinary shares (other than those covered by the option to purchase additional ordinary shares described below) if they purchase any of the ordinary shares.

Ordinary shares sold by the underwriters to the public will initially be offered at the public offering price set forth on the cover page of this prospectus. Any ordinary shares sold by the underwriters to securities dealers may be sold at a discount from the public offering price not to exceed $ per share. If all the ordinary shares are not sold at the public offering price, the underwriters may change the offering price and the other selling terms. The underwriters do not expect any sales to discretionary accounts. The offering of the ordinary shares by the underwriters is subject to receipt and acceptance and subject to the underwriters’ right to reject any order in whole or in part.

If the underwriters sell more ordinary shares than the total number set forth in the table above, we have granted to the underwriters an option, exercisable for 30 days from the date of this prospectus, to purchase up to additional ordinary shares at the public offering price less the underwriting discount. To the extent the option is exercised, each underwriter must purchase a number of additional ordinary shares approximately proportionate to that underwriter’s initial purchase commitment. Any ordinary shares issued or sold under the option will be issued and sold on the same terms and conditions as the other ordinary shares that are the subject of this offering.

We and our executive officers and directors have agreed not to sell or transfer any ordinary shares or other capital stock of the Company or securities convertible into, exchangeable for, exercisable for, or repayable with ordinary shares or other capital stock of the Company, for 60 days after the date of this prospectus without first obtaining the written consent of Wells Fargo Securities, LLC. In connection with our initial public offering, William C. Erbey agreed not to sell or transfer any ordinary shares of other capital stock of the Company or securities convertible into, exchangeable for, exercisable for or repayable with ordinary shares or other capital stock of the Company for a period of 18 months from the date of the pricing of our initial public offering. Specifically, we and these other persons have agreed, with certain limited exceptions, not to directly or indirectly:

whether any such swap or transaction described in the first two bullet points above is to be settled by delivery of ordinary shares or other securities, in cash or otherwise.

This lock-up agreement applies to ordinary shares and other capital stock of the Company and to securities convertible into or exchangeable or exercisable for or repayable with ordinary shares and other capital stock of the Company. It also applies to ordinary shares owned now or acquired later by the person executing the agreement or for which the person executing the agreement later acquires the power of disposition. In the event that either (x) during the last 17 days of the lock-up period referred to above, we issue an earnings release or material news or a material event relating to us occurs or (y) prior to the expiration of the lock-up period, we announce that we will release earnings results or become aware that material news or a material event will occur during the 16-day period beginning on the last day of the lock-up period, the restrictions described above shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event.

We have agreed with the underwriters that if Wells Fargo Securities, LLC, in its sole discretion, agrees to waive any lock-up restrictions applicable to shares beneficially owned by one of our officers or directors and provides us with notice of the impending waiver at least three business days before the effective date of the waiver, we will announce the waiver by issuing a press release at least two business days before the effective date of the waiver.

Our shares are listed on The NASDAQ Global Select Market under the symbol “HLSS.”

The following table shows the underwriting discounts that we are to pay to the underwriters in connection with this offering. These amounts are shown assuming both no exercise and full exercise of the underwriters’ option to purchase additional shares.

We estimate that the total expenses of this offering will be approximately $ million, excluding underwriting discounts and commissions. We will also reimburse the underwriters for an amount up to $ for filing fees and other reasonable fees or expenses incident to the review of the terms of the sale of the ordinary shares offered hereby by FINRA.

In connection with the offering, the underwriters may purchase and sell shares in the open market. Purchases and sales in the open market may include short sales, purchases to cover short positions, which may include purchases pursuant to the option to purchase additional shares, and stabilizing purchases.

Short sales involve secondary market sales by the underwriters of a greater number of ordinary shares than they are required to purchase in the offering.

Covering transactions involve purchases of ordinary shares either pursuant to the option to purchase additional ordinary shares or in the open market after the distribution has been completed in order to cover short positions.

Purchases to cover short positions and stabilizing purchases, as well as other purchases by the underwriters for their own accounts, may have the effect of preventing or retarding a decline in the market price of the ordinary shares. They may also cause the price of the ordinary shares to be higher than the price that would otherwise exist in the open market in the absence of these transactions. The underwriters may conduct these transactions on The NASDAQ Global Select Market, in the over-the-counter market or otherwise. If the underwriters commence any of these transactions, they may discontinue them at any time.

The underwriters may also impose a penalty bid. This occurs when a particular underwriter repays to the underwriters a portion of the underwriting discount received by it because the representative has repurchased ordinary shares sold by or for the account of such underwriter in stabilizing or short covering transactions.

The underwriters and their respective affiliates are full-service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, investment research, principal investment, hedging, financing and brokerage activities. Certain of the underwriters and their respective affiliates have, from time to time, performed, and may in the future perform, various financial advisory and investment banking services for us, for which they received or will receive customary fees and reimbursement of expenses.

Ocwen Loan Servicing or its affiliates may use a portion of the proceeds it may receive from us in connection with the Planned Acquisition to repay a portion of Ocwen’s senior secured term loan or one or more of Ocwen’s servicing advance facilities. Because certain of the underwriters have provided a financing commitment to that term loan facility or are lenders under Ocwen’s servicing advance facilities, certain of the underwriters may receive more than 5% of the net proceeds of this offering. Accordingly, this offering is being conducted in compliance with FINRA Rule 5121. Under FINRA Rule 5121, a “qualified independent underwriter,” or QIU, meeting certain standards must participate in the preparation of the registration statement and the prospectus and exercise the usual standards of due diligence with respect thereto. is assuming the responsibilities of acting as the QIU in connection with this offering. No underwriter having a conflict of interest under FINRA Rule 5121 will confirm sales to any account over which the underwriter exercises discretionary authority without the specific written approval of the accountholder. We have agreed to indemnify against certain liabilities incurred in connection with it acting as a QIU for this offering, including liabilities under the Securities Act.

In the ordinary course of their various business activities, the underwriters and their respective affiliates may make or hold a broad array of instruments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers, and such investment and securities activities may involve securities and/or instruments of the issuer. The underwriters and their respective affiliates may also make investment recommendations and/or publish or express independent research views in respect of such securities or instruments and may at any time hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.

We have agreed to indemnify the several underwriters against certain liabilities, including liabilities under the Securities Act, or to contribute to payments the underwriters may be required to make because of any of those liabilities.

A prospectus in electronic format may be made available on the Internet sites or through other online services maintained by one or more of the underwriters and/or selling group members participating in this

offering, or by their affiliates. In those cases, prospective investors may view offering terms online and, depending upon the particular underwriter or selling group member, prospective investors may be allowed to place orders online. The underwriters may agree with us to allocate a specific number of shares for sale to online brokerage account holders. Any such allocation for online distributions will be made by the representatives on the same basis as other allocations.

Other than the prospectus in electronic format, the information on any underwriter’s or selling group member’s website and any information contained in any other website maintained by an underwriter or selling group member is not part of the prospectus or the registration statement of which this prospectus forms a part, has not been approved and/or endorsed by us or any underwriter or selling group member in its capacity as underwriter or selling group member and should not be relied upon by investors.

No action has been taken in any jurisdiction (except in the United States) that would permit a public offering of the ordinary shares, or the possession, circulation or distribution of this prospectus or any other material relating to us or the ordinary shares in any jurisdiction where action for that purpose is required. Accordingly, the ordinary shares may not be offered or sold, directly or indirectly, and none of this prospectus or any other offering material or advertisements in connection with the ordinary shares may be distributed or published, in or from any country or jurisdiction except in compliance with any applicable rules and regulations of any such country or jurisdiction.

Each of the underwriters may arrange to sell the ordinary shares offered hereby in certain jurisdictions outside the United States, either directly or through affiliates, where they are permitted to do so. In that regard, Wells Fargo Securities, LLC may arrange to sell the ordinary shares in certain jurisdictions through an affiliate, Wells Fargo Securities International Limited, or WFSIL. WFSIL is a wholly owned indirect subsidiary of Wells Fargo & Company and an affiliate of Wells Fargo Securities, LLC. WFSIL is a U.K. incorporated investment firm regulated by the Financial Services Authority. Wells Fargo Securities is the trade name for certain corporate and investment banking services of Wells Fargo & Company and its affiliates, including Wells Fargo Securities, LLC and WFSIL.

In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”), including each Relevant Member State that has implemented amendments to Article 3(2) of the Prospectus Directive introduced by the 2010 PD Amending Directive (each, an “Early Implementing Member State”), an offer of ordinary shares to the public may not be made in that Relevant Member State and each underwriter represents and agrees that with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the “Relevant Implementation Date”) it has not made and will not make an offer of the ordinary shares to the public in that Relevant Member State prior to the publication of a prospectus in relation to the ordinary shares which has been approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in accordance with the Prospectus Directive, except that an offer of the ordinary shares to the public in that Relevant Member State may be made at any time under the following exemptions under the Prospectus Directive, if they have been implemented in that Relevant Member State:

(a) to any legal entity which is a “qualified investor” as defined in the Prospectus Directive;

(b) to fewer than 100 (or, in the case of Early Implementing Member States, 150) natural or legal persons (other than “qualified investors” as defined in the Prospectus Directive) subject to obtaining the prior consent of the Subscribers; or

provided that no such offer of the ordinary shares referred to in (a) to (c) above shall require the Company or any Subscriber to publish a prospectus pursuant to Article 3 of the Prospectus Directive

or supplement a prospectus pursuant to Article 16 of the Prospectus Directive and each person who initially acquires any ordinary shares or to whom any offer is made will be deemed to have represented, warranted and agreed to and with the Company or any Subscriber that it is a qualified investor within the meaning of the law in that Relevant Member State implementing Article 2(1)(e) of the Prospectus Directive.

For the purposes of this provision, the expression an “offer to the public” in relation to any ordinary shares in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the ordinary shares to be offered so as to enable an investor to decide to purchase or subscribe to the ordinary shares, as the same may be varied in that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member State and the expression “Prospectus Directive” means Directive 2003/71/EC of the European Parliament and of the Council of 4 November 2003 (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State), and includes any relevant implementing measure in the Relevant Member State. The expression “2010 PD Amending Directive” means Directive 2010/73/EU.

This prospectus is an invitation to you to participate in an unregulated collective investment scheme. The Company is characterized as an unregulated collective investment scheme for the purposes of the United Kingdom Financial Services and Markets Act 2000 (“FSMA”), so that the distribution of this document by an authorized person under FSMA is restricted by Sections 238 and 240 of FSMA. Accordingly, this document is not being distributed to, and must not be passed on to, anyone other than (i) persons who have professional experience of participating in unregulated collective investment schemes defined in Article 14(5) of the Financial Services and Markets Act 2000 (Promotion of CIS) (Exemptions) Order 2001 (the “CIS Promotion Order”) as “investment professionals”, (ii) high net worth companies, unincorporated associations and other persons falling within the category of persons described in Article 22 of the CIS Promotion Order, and (iii) any other person to whom it may lawfully be provided (all such persons being referred to as “Relevant Persons”). This document must not be acted upon or relied on by anyone else in the United Kingdom except Relevant Persons. Any investment activity to which this document relates will be engaged in only with Relevant Persons. Other persons distributing this document in, from or into the UK must satisfy themselves that it is lawful to do so.

This communication is exempt from the scheme promotion restriction in Section 238 of FSMA on the communication of invitations or inducements to participate in unregulated collective investment schemes on the ground that it is made to Relevant Persons.

Buying the interests to which this communication relates may expose investors to significant risk of losing all of the property invested. Any individual who is in any doubt about the investment to which this communication relates should consult an authorized person under FSMA specializing in advising on investments of the kind in question other than the person making this promotion.

The Company has not offered or sold and will not offer or sell, directly or indirectly, ordinary shares to the public in France, and has not distributed or caused to be distributed and will not distribute or cause to be distributed to the public in France, this prospectus or any other offering material relating to the ordinary shares. Offers, sales and distributions that have been and will be made in France have been and will be made only to (a) providers of the investment service of portfolio management for the account of third parties, and (b) qualified investors (investisseurs qualifiés), other than individuals, all as defined in, and in accordance with, Articles L. 411-1, L. 411-2, and D. 411-1 of the French Code monétaire et financier.

Ordinary shares may be resold directly or indirectly only in compliance with Article L. 411-1, L. 411-2, L. 412-1 and L. 621-8 to L. 621-8-3 of the French Code monétaire et financier.

Neither this prospectus prepared in connection with the ordinary shares nor any other offering material relating to the ordinary shares has been submitted to the clearance procedures of the Autorité des marchés financiers or notified to the Autorité des marchés financiers by the competent authority of another member state of the European Economic Area.

To avoid French language requirements, the ordinary shares should not be offered to individuals. Indeed, pursuant to the Law no. 94-665 dated 4 August 2004 called Loi Toubon, if the ordinary shares are offered to natural persons on a private placement basis, any marketing and offering documentation would have to be translated into French language.

The ordinary shares offered by this prospectus have not been and will not be offered to the public within the meaning of the German Securities Prospectus Act (Wertpapierprospektgesetz). No securities prospectus pursuant to the German Securities Prospectus Act has been or will be published or circulated in Germany or filed with the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht). This prospectus does not constitute an offer to the public in Germany, and it does not serve for public distribution of the ordinary shares in Germany. Neither this prospectus, nor any other document issued in connection with this offering, may be issued or distributed to any person in Germany except under circumstances that do not constitute an offer to the public under the German Securities Prospectus Act. Prospective investors should consult with their legal and/or tax advisor before investing into the ordinary shares.

The offering of the ordinary shares has not been registered pursuant to Italian securities legislation and, accordingly, no ordinary shares may be offered, sold or delivered, nor may copies of the prospectus or of any other document relating to the ordinary shares be distributed in the Republic of Italy, except:

(i) to qualified investors (investitori qualificati), as defined pursuant to Article 100 of Legislative Decree No. 58 of 24 February 1998, as amended (the Financial Services Act) and Article 34-ter, first paragraph, letter b) of CONSOB Regulation No. 11971 of 14 May 1999, as amended from time to time (Regulation No. 11971); or

(ii) in other circumstances which are exempted from the rules on public offerings pursuant to Article 100 of the Financial Services Act and Article 34-ter of Regulation No. 11971.

Any offer, sale or delivery of the ordinary shares or distribution of copies of the prospectus or any other document relating to the ordinary shares in the Republic of Italy under (i) or (ii) above must be:

(a) made by an investment firm, bank or financial intermediary permitted to conduct such activities in the Republic of Italy in accordance with the Financial Services Act, CONSOB Regulation No. 16190 of 29 October 2007 (as amended from time to time) and Legislative Decree No. 385 of 1 September 1993, as amended (the Banking Act); and

(b) in compliance with Article 129 of the Banking Act, as amended, and the implementing guidelines of the Bank of Italy, as amended from time to time, pursuant to which the Bank of Italy may request information on the issue or the offer of ordinary shares in the Republic of Italy; and

(c) in compliance with any other applicable laws and regulations or requirement imposed by CONSOB or other Italian authority.

Please note that in accordance with Article 100-bis of the Financial Services Act, where no exemption from the rules on public offerings applies under (i) and (ii) above, the subsequent distribution of the ordinary shares on the secondary market in Italy must be made in compliance with the public offer and the prospectus requirement rules provided under the Financial Services Act and Regulation No. 11971. Failure to comply with such rules may result in the sale of such ordinary shares being declared null and void and in the liability of the intermediary transferring the ordinary shares for any damages suffered by the investors.

The ordinary shares will not be offered or sold, directly or indirectly, in the Netherlands, other than:

all within the meaning of Article 4 of the Financial Supervision Act Exemption Regulation (Vrijstellingsregeling Wet op het financieel toezicht) and Article 1:12 and Article 5:3 of the Financial Supervision Act (Wet op het financieel toezicht, FSA).

The Company has not been authorized by the Swiss Financial Market Supervision Authority as a foreign investment fund for public distribution in Switzerland pursuant to article 120 of the Swiss Federal Act on Collective investment Schemes of June 23, 2006 (“CISA”). Accordingly, the ordinary shares may not be offered or distributed to the public in or from Switzerland and neither this prospectus nor any other offering material relating to the ordinary shares may be distributed in connection with any such offering or distribution. The ordinary shares may only be offered and this prospectus may only be distributed in or from Switzerland to qualified investors (as defined under article 10 para. 3 of the CISA).

No prospectus or other disclosure document (as defined in the Corporations Act 2001 (Cth) of Australia (“Corporations Act”)) in relation to the ordinary shares has been or will be lodged with the Australian Securities & Investments Commission (“ASIC”). This document has not been lodged with ASIC and is only directed to certain categories of exempt persons. Accordingly, if you receive this document in Australia:

No invitation is made to the public in the Cayman Islands to purchase the ordinary shares.

The ordinary shares may not be offered or sold in Hong Kong by means of any document other than (i) in circumstances which do not constitute an offer to the public within the meaning of the Companies Ordinance (Cap. 32, Laws of Hong Kong), or (ii) to “professional investors” within the meaning of the

Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder, or (iii) in other circumstances which do not result in the document being a “prospectus” within the meaning of the Companies Ordinance (Cap. 32, Laws of Hong Kong) and no advertisement, invitation or document relating to the shares may be issued or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the laws of Hong Kong) other than with respect to ordinary shares which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder.

This prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the ordinary shares may not be circulated or distributed, nor may the ordinary shares be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore (the “SFA”), (ii) to a relevant person pursuant to Section 275(1), or any person pursuant to Section 275(1A), and in accordance with the conditions specified in Section 275 of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA, in each case subject to compliance with conditions set forth in the SFA.

Where the ordinary shares are subscribed or purchased under Section 275 of the SFA by a relevant person which is:

shares, debentures and units of shares and debentures of that corporation or the beneficiaries’ rights and interest (howsoever described) in that trust shall not be transferred within six months after that corporation or that trust has acquired the shares pursuant to an offer made under Section 275 of the SFA except:

The ordinary shares are not registered in the Securities Registry (Registro de Valores) or subject to the control of the Chilean Securities and Exchange Commission (Superintendencia de Valores y Seguros de Chile). This prospectus and other offering materials relating to the offer of the ordinary shares do not constitute a public offer of, or an invitation to subscribe for or purchase, the ordinary shares in the Republic of Chile, other than to individually identified purchasers pursuant to a private offering within the meaning of Article 4 of the Chilean Securities Market Act (Ley de Mercado de Valores) (an offer that is not “addressed to the public at large or to a certain sector or specific group of the public”).

The validity of the ordinary shares will be passed upon for us by Walkers. The material U.S. federal income tax consequences of this offering will be passed upon for us by Kramer Levin Naftalis & Frankel LLP, New York, New York. Certain legal matters relating to this offering will be passed upon by Kramer Levin Naftalis & Frankel LLP, New York, New York for the Company and by Shearman & Sterling LLP, New York, New York for the underwriters.

The consolidated financial statements for the year ended December 31, 2011 and for the period beginning on December 31, 2010 and ending on December 31, 2011, included in this prospectus have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report appearing herein and elsewhere in the Registration Statement (which report expresses an unqualified opinion and includes an explanatory paragraph related to the development stage of the Company). Such consolidated financial statements are included herein in reliance upon the report of such firm given upon their authority as experts in accounting and reporting. The statement of assets acquired and liabilities assumed by the Company, pursuant to the Purchase Agreement, dated February 10, 2012, executed by HLSS Holdings with Ocwen Loan Servicing, included in this prospectus has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report appearing herein and elsewhere in the Registration Statement. Such statement of assets acquired and liabilities assumed is included herein in reliance upon the report of such firm given their authority as experts in accounting and reporting.

We have filed with the SEC a registration statement on Form S-1 (File Number 333— ) under the Securities Act with respect to the ordinary shares we are offering. This prospectus, which constitutes part of the registration statement, does not contain all of the information included in the registration statement and exhibits. For further information pertaining to us and our ordinary shares, you should refer to the registration statement and to its exhibits. Statements contained in this prospectus about the contents of any contract or any other document are not necessarily complete and, in each instance, we refer you to the copy of the contract or other documents filed as an exhibit to or incorporated by reference to our filings with the SEC. Each of these statements is qualified in all respects by this reference.

We are subject to the reporting requirements of the Exchange Act and file annual, quarterly and current reports, proxy statements and other information with the SEC. We make available through our website at www.hlss.com annual reports, quarterly reports, current reports and amendments thereto as reasonably practicable after filing with the SEC. You can read our SEC filings, including the registration statement, over the Internet at the SEC’s website at www.sec.gov. You may also read and copy any document we file with the SEC at its Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549.

You may also obtain copies of the documents at prescribed rates by writing to the Public Reference Section of the SEC at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the Public Reference Room.

The accompanying notes are an integral part of these condensed consolidated financial statements.

Home Loan Servicing Solutions, Ltd. was incorporated on December 1, 2010 as a Cayman Islands exempted company formed for the purpose of acquiring mortgage servicing assets, including mortgage servicing rights and related servicing advances. Home Loan Servicing Solutions, Ltd. conducts these operations through its wholly owned subsidiaries, HLSS Holdings, LLC and HLSS Management, LLC. Unless otherwise stated, all references to “HLSS,” “us,” “our,” “we,” the “Company” and similar designations refer to Home Loan Servicing Solutions, Ltd. and its consolidated subsidiaries. HLSS is headquartered in the Cayman Islands and has offices in Atlanta, Georgia and West Palm Beach, Florida.

Our business strategy focuses on acquiring mortgage servicing assets. We do not originate or purchase mortgage loans, and as a result, we are not subject to the risk of loss related to the origination or ownership of mortgage loans. Because we have not received the necessary approvals and consents (the “Required Third Party Consents”) to become the named servicer of the mortgage servicing rights, we instead acquired from Ocwen Loan Servicing, LLC, a wholly-owned subsidiary of Ocwen Financial Corporation (collectively “Ocwen”) the rights to receive the servicing fees which we refer to as “Rights to MSRs”. Accordingly, Ocwen will continue to service the mortgage loans and will receive compensation from us for its servicing activities. Upon receipt of the Required Third Party Consents, Ocwen will transfer legal ownership of the mortgage servicing rights to us without any additional payment. We intend to pursue the Required Third Party Consents for our initial portfolio and for future acquisitions. Whether we acquire mortgage servicing rights or Rights to MSRs, we also acquire servicing advances and other associated assets. We do not believe that whether we directly own mortgage servicing rights or the related Rights to MSRs materially affects our business strategy or economic performance.

On March 5, 2012, we completed an initial public offering (“IPO”) and a concurrent private placement of our ordinary shares from which we raised cash of $184,300 (the “Offerings”). Immediately thereafter, on March 5, 2012, we used $149,798 to acquire certain assets, net of assumed liabilities, from Ocwen (the “Initial Acquisition”). The acquired assets related to mortgage servicing rights with respect to 116 pooling and servicing agreements with unpaid principal balance (“UPB”) of approximately $15.2 billion as of March 5, 2012 (the “Initial Mortgage Servicing Rights”). After closing, the purchase price paid was adjusted to $138,792 as further described in Note 2.

Prior to March 5, 2012, the Company was a development stage enterprise. Because we commenced operations on March 5, 2012, the condensed consolidated statement of cash flows for the six months ended June 30, 2012 do not include six full months of operating activities. Accordingly, our cash flows for the six months ended June 30, 2012 are not necessarily indicative of the results to expect for a full six month period or for the entire year ending December 31, 2012.

We prepared the accompanying unaudited Interim Consolidated Financial Statements 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 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 six months ended June 30, 2012 are not necessarily indicative of the results to expect for any other interim period or for the entire year ending December 31, 2012. A user of the unaudited Condensed Interim Consolidated Financial Statements

presented herein should read them in conjunction with the audited Consolidated Financial Statements and related notes thereto included in our final prospectus dated February 28, 2012. We derived December 31, 2011 condensed balance sheet data from audited financial statements, but within this filing do not include all disclosures required by GAAP. The preparation of financial statements in conformity with GAAP requires that we make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates. Material estimates that are particularly significant relate to our fair value measurements of Notes receivable — Rights to MSRs.

Our financial statements include the accounts of Home Loan Servicing Solutions, Ltd. and its wholly owned subsidiaries, as well as a variable interest entity (“VIE”) of which we are the primary beneficiary. We eliminate intercompany accounts and transactions in consolidation.

We evaluate each special purpose entity (“SPE”) for classification as a VIE. When an SPE meets the definition of a VIE and we determine that HLSS is the primary beneficiary, we include the SPE in our Interim Condensed Consolidated Financial Statements.

The servicing advances that we acquired in connection with the Initial Acquisition are in an SPE created in connection with the match funded financing facility that we assumed. We have determined that this SPE is a VIE of which we are the primary beneficiary. The accounts of this SPE are included in our Interim Condensed Consolidated Financial Statements. See Note 2 for further discussion of the acquired SPE.

Match funded advances on loans serviced for others result from our transfers of residential loan servicing advances to an SPE in exchange for cash. This SPE issues debt supported by collections on the transferred advances. We made these transfers under the terms of our amended and restated advance facility agreements with Barclays Bank Plc we assumed from Ocwen in connection with the Initial Acquisition (the “Advance Facility”). These transfers do not qualify for sales accounting because we retain control over the transferred assets. As a result, we account for these transfers as financings and classify the transferred advances on our Interim Condensed Consolidated Balance Sheet as Match funded advances and the related liabilities as Match funded liabilities. We use collections on the advances pledged to the SPE to repay principal and to pay interest and the expenses of the entity. Holders of the debt issued by this entity can look only to the assets of the entity itself for satisfaction of the debt and have no recourse against HLSS.

The following table summarizes the assets and liabilities of the SPE formed in connection with our match funded advance facility, at the dates indicated:

Cash includes both interest-bearing and non-interest-bearing demand deposits with financial institutions with original maturities of 90 days and less. There were no restrictions on the use of the cash balance as of June 30, 2012 and December 31, 2011.

Residential mortgage loan servicers manage the billing, collections and loss mitigation activities associated with mortgage loans that are originated by banks or other lenders. Servicers send borrowers monthly account statements, collect monthly mortgage payments, remit such payments to the owner of the mortgage loan, answer customer service inquiries and maintain custodial accounts to hold borrower payments of principal and interest and amounts received from borrowers to pay real estate taxes and insurance with respect to the properties securing the mortgage loans and pay such real estate taxes and insurance premiums from the custodial accounts. A servicer will also remit collections on the mortgage loans from the custodial accounts to the trustee of the applicable securitization trust to make payments on the related mortgage-backed securities, and prepare and deliver monthly and annual reports to the trustee. A servicer may also be required to advance its own funds to cover shortfalls in collections of principal and interest from borrowers, to pay property and casualty insurance premiums and real estate taxes on a property and to cover the costs associated with protecting or foreclosing on a property. If borrowers become delinquent on loans, the servicer generally may conduct loss mitigation activities to reduce loan delinquencies and losses by working with borrowers to collect payments and modify loans or enforce the lenders’ remedies, which may include initiating foreclosure procedures and selling the properties.

Servicing advances are usually reimbursed from amounts received with respect to the related mortgage loan, including payments from the borrower or amounts received from the liquidation of the property securing the loan, which is referred to as “loan level recovery.” Servicers generally have the right to cease making servicing advances on a loan if they determine that advances are not recoverable at the loan level. With respect to the Rights to MSRs that we own, Ocwen makes this determination in accordance with its stop advance policy. In the event that loan level recovery is not sufficient to reimburse the servicer in full for servicing advances made with respect to a mortgage loan, our pooling and servicing agreements provide that the servicer is entitled to be reimbursed from collections received with respect to other loans in the same securitized mortgage pool, which is referred to as “pool level recovery.” We do not receive interest on servicing advances.

We are obligated to purchase the servicing advances made by Ocwen during the period of time prior to the transfer of legal ownership of the Initial Mortgage Servicing Rights to us, and when an Initial Mortgage Servicing Right is transferred to us, we will become directly obligated to the related trustee to make any servicing advances required pursuant to the related pooling and servicing agreements. Servicing advances serve as collateral under the terms of the Advance Facility.

We record a charge to earnings to the extent that we believe advances are uncollectible under the provisions of each servicing contract taking into consideration the projected collections under the applicable loan or pool relative to the advances outstanding and the projected future advances. However, the servicer is generally only obligated to advance funds to the extent that it believes the advances are recoverable from expected proceeds from the loan. We assess collectability using proprietary cash flow projection models which incorporate a number of different factors, depending on the characteristics of the mortgage loan or pool, including, for example, time to a foreclosure sale, estimated costs of foreclosure action, future property tax payments and the value of the underlying property net of carrying costs, commissions and closing costs.

We structured the purchase of the Rights to MSRs to convey to HLSS all the rights and rewards of ownership of MSRs absent the necessary approvals and allow us to become the named servicer under the applicable pooling and servicing agreements; however, until we receive the Required Third Party Consents, Ocwen will remain the named servicer of the related mortgage servicing rights. Accounting Standards Codification (“ASC”) 860, Transfers and Servicing, specifically prohibits accounting for a transfer of servicing rights as a sale if legal title to such servicing rights has not passed to the purchaser. As a result, prior to receiving the Required Third Party Consents related to the Initial Mortgage Servicing Rights, we are required to account for the purchase of the Rights to MSRs as a financing. We initially recorded the Notes receivable — Rights to MSRs at the purchase price of the Rights to MSRs. We amortize the Notes receivable — Rights to MSRs using the prospective interest method of accounting. At each reporting date, we calculate the present value of the net cash flows related to the then outstanding UPB of the underlying Initial Mortgage Servicing Rights and adjust the carrying value of the Notes receivable — Rights to MSRs to this amount. The change in the carrying value of the Notes receivable — Rights to MSRs reduces the net servicing fees received by us with respect to the Initial Mortgage Servicing Rights and the servicing fees paid to Ocwen with respect to the Initial Mortgage Servicing Rights. We record the resulting amount as interest income. Interest income is our primary source of income prior to receiving the Required Third Party Consents. See Note 9 for more information about how we calculate Interest income — notes receivable — Rights to MSRs.

Other than transfer of legal title, we believe we meet all the other sales treatment criteria under ASC 860 for the transfer of the Initial Mortgage Servicing Rights. If we obtain the Required Third Party Consents and become the legal owner of any Initial Mortgage Servicing Right:

Servicing Fees, Base Fees, Ancillary Income and Performance Based Incentive Fees

Since we are not the named servicer for the mortgage loans underlying the Rights to MSRs, Ocwen will continue to be the named servicer for these loans and will receive the servicing fee associated with the Initial Mortgage Servicing Rights; however, Ocwen pays these servicing fees to us under the terms of the

Purchase Agreement and related sale supplement described in Note 2. We pay Ocwen a monthly base fee equal to 12% of the servicing fees collected each month. The monthly base fee payable to Ocwen varies from month to month based on the level of collections of principal and interest for the mortgage loans serviced. In addition to the monthly base fee, Ocwen retains any ancillary income (excluding investment income earned on any custodial accounts) payable to the servicer pursuant to the related pooling and servicing agreements. Ocwen also receives a performance based incentive fee to the extent the Servicing Fee Revenue that it collects for any given month exceeds the sum of the monthly base fee and the retained fee.

The amount, as expressed in terms of basis points of the average UPB of the mortgage loans serviced, used to calculate the retained fee is a contractually agreed upon amount. If we do not receive an amount equal to the retained fee in any given month, as expressed in terms of basis points of the average UPB of the mortgage loans serviced, this creates a shortfall in our targeted gross servicing margin percentage. Should this occur, Ocwen will not earn a performance based incentive fee for any month that there is such a shortfall, or in any subsequent month, until we have recovered such shortfall from amounts that would otherwise be available to pay future performance based incentive fees to Ocwen.

The performance based incentive fee payable in any month will be reduced by an amount equal to 6.5% per annum of the amount of any such excess servicing advances if the advance ratio exceeds a predetermined level for that month.

We are party to interest rate swap agreements that we recognize on our Interim Condensed Consolidated Balance Sheet at fair value within other liabilities. On the date we entered into the interest rate swap agreements, we designated and documented them as hedges of the variable cash flows payable for floating rate interest expense on our borrowings (cash flow hedge). To qualify for hedge accounting, a derivative must be highly effective at reducing the risk associated with the hedged exposure. In addition, the documentation must include the risk management objective and strategy. We assess and document quarterly the derivatives’ effectiveness and expected effectiveness in offsetting the changes in the fair value or the cash flows of the hedged items. To assess effectiveness, we use statistical methods, such as regression analysis, as well as nonstatistical methods including dollar-offset analysis. For a cash flow hedge, to the extent that it is effective, we record changes in the estimated fair value of the derivative in other comprehensive income. We subsequently reclassify these changes in estimated fair value to net income in the same period, or periods, that the hedged transaction affects earnings and in the same financial statement category as the hedged item.

If a derivative instrument in a cash flow hedge is terminated or the hedge designation is removed, we reclassify related amounts in accumulated other comprehensive income into earnings in the same period or periods during which the cash flows that were hedged affect earnings. In a period where we determine that it is probable that a hedged forecasted transaction will not occur, such as variable-rate interest payments on debt that has been repaid in advance, any related amounts in accumulated other comprehensive income are reclassified into earnings in that period.

See Note 8 for additional information regarding our interest rate swap agreements.

The Advance Facility currently finances all of the outstanding advances associated with the Initial Mortgage Servicing Rights. Match funded liabilities are a form of non-recourse debt that are collateralized by the servicing advances. The investor in the notes issued under this facility is Barclays Bank PLC. Our Match funded liability balance is driven primarily by the level of servicing advances and the advance borrowing rate, which is defined as the collateral value of servicing advances divided by total servicing advances. The advance borrowing rates, which are different for each type of six advance types, were set at levels that enabled each class of notes issued pursuant to the advance financing facility to meet ratings criteria as determined by Standard & Poor’s.

Under the terms of the related indenture, the SPE created in connection with the Advance Facility are subject to various qualitative and quantitative covenants. We believe that we are currently in compliance with these covenants.

Interest income — Other includes interest earned on mortgage loan payments and payoff collections not yet remitted either to the securitization trust that owns the mortgage loan or to pay real estate taxes and insurance premiums with respect to the related mortgaged properties. Mortgage loan payments are usually due from the borrower between the first and fifteenth days of the month. Remittance to the securitization trust typically occurs between the eighteenth and twenty-fourth days of each month. Until remitted to the securitization trust, these payments reside in interest bearing custodial accounts controlled by the servicer and we invest these amounts in accordance with the pooling and servicing agreements and our investment policy. Pursuant to the Purchase Agreement, we are entitled to receive from Ocwen any custodial account earnings related to the Rights to MSRs even though we will not have custody of those accounts until legal ownership of the related Initial Mortgage Servicing Rights is transferred to us.

Other revenue consists of amounts due to us from Ocwen under the terms of the Ocwen Professional Services Agreement. Under the Ocwen Professional Services Agreement, we receive revenue for providing certain services to Ocwen, which include valuation analysis of mortgage servicing rights, treasury management and other similar services. See Note 13 for more information regarding our related party transactions.

Our operating expenses consist largely of compensation and benefits for our employees and fees payable to members of our Board of Directors. In addition, we incur expenses for facilities, technology, communication and other expenses typical of public companies, including audit, legal and other professional fees. Altisource Portfolio Solutions, S.A. (“Altisource”) provides some of these administrative services pursuant to the Altisource Administrative Services Agreement. General and administrative expenses also include expenses related to the services we provide to Ocwen, and the services provided by Ocwen to us, under the Ocwen Professional Services Agreement. See Note 13 for more information regarding our related party transactions.

Until the closing of the Offerings we were a development stage enterprise, and we classified our expenses as “Organization costs.” These organization costs include legal and accounting fees, registration fees and other costs incurred during the development stage to establish Home Loan Servicing Solutions, Ltd. and its subsidiaries. We expensed these costs as incurred. Organization costs were approximately $123 and $44 for the six months ended June 30, 2012 and 2011, respectively, and are included in General and administrative expenses. We did not incur additional organization costs after the Offerings, so there were no incremental organization costs in the three months ended June 30, 2012 ($17 for the comparable 2011 period).

We primarily finance servicing advances with Match funded liabilities that accrue interest. Interest expense also includes amortization of deferred financing costs, non-use fees and any hedge related costs.

Interest expense is sensitive to the Match funded advance balance which is driven primarily by the delinquency rates and amount of UPB serviced. The speed at which delinquent loans are resolved affects our interest expense. For example, slower resolution of delinquencies will result in higher servicing advance balances and higher interest expense. In order to mitigate the interest expense impact of higher servicing advance balances, we reduce the performance based servicing fee payable to Ocwen in any month in which the advance ratio exceeds a predetermined level for that month. Additionally, we executed a hedging strategy designed to largely neutralize the impact of changes in interest rates over time. Our objective is to utilize hedges in an amount equal to our net exposure to interest rate increases on our Match funded liabilities, which bear interest at floating interest rates, after taking into account our expected interest earning account balances, which partially offset the impact of rising interest rates. If interest rates decline, the value of our hedges would decline. Should our hedging strategy prove ineffective or if we are not able to hedge all of our interest rate risk, rising interest rates would lead to higher interest expense.

The Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation; however, our U.S.-based subsidiary, HLSS Management, LLC, is subject to U.S. taxation.

We account for income taxes using the asset and liability method, which requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. As of June 30, 2012, we had no deferred tax assets or liabilities.

We calculate basic earnings per share by dividing net income or loss by the weighted average ordinary shares outstanding for the period. For the three and six months ended June 30, 2012 and 2011, there were no ordinary share equivalents or other securities that could potentially dilute basic earnings per share.

When our Board of Directors declares cash dividends, we record a payable and charge retained earnings for the total amount of the dividends declared. If we lack sufficient retained earnings to pay the full amount of dividends declared we charge the excess amount to additional paid-in capital.

Accounting Standards Update (“ASU”) 2011-04 (ASC 820, Fair Value Measurement): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. The amendments in this ASU explain how to measure fair value. They do not require additional fair value measurements and are not intended to establish valuation standards or affect valuation practices outside of financial reporting. The amendments clarify the FASB’s intent about the application of existing fair value measurement and disclosure requirements and prescribe certain additional disclosures about fair value measurements, including: for fair value measurements within Level 3 of the fair value hierarchy, disclosing the valuation process used and the sensitivity of fair value measurement to changes in unobservable inputs; and for items not carried at fair value but for which fair value must be disclosed, categorization by level of the fair value hierarchy. Our adoption of this standard effective January 1, 2012 did not have a material impact on our Interim Condensed Consolidated Financial Statements. See Note 3 for our fair value disclosures.

ASU 2011-05 (ASC 220, Comprehensive Income): Presentation of Comprehensive Income. Previously U.S. GAAP allowed reporting entities three alternatives for presenting other comprehensive income and its components in financial statements. One of those presentation options is to present the components of other comprehensive income as part of the statement of changes in stockholders’ equity. This ASU eliminates that option. This ASU also requires consecutive presentation of the statement of net income and other comprehensive income and requires that an entity present reclassification adjustments from other comprehensive income to net income by component on the face of both the statement in which net income is presented and the statement in which other comprehensive income is presented. Issued on December 23, 2011, ASU 2011-12 defers indefinitely the provision regarding the presentation of reclassification adjustments. Our adoption of this standard effective January 1, 2012 did not have a material impact on our Interim Condensed Consolidated Financial Statements.

On March 5, 2012, we used a portion of the net proceeds from the Offerings to purchase the following:

We completed the Initial Acquisition pursuant to a master servicing rights purchase agreement (the “Purchase Agreement”) and a related sale supplement, each dated February 10, 2012. Pursuant to the Advance Facility, we also assumed a related match funded servicing advance financing facility from Ocwen effective upon the closing of the Initial Acquisition. At closing on March 5, 2012, HLSS paid cash of $149,798 to Ocwen for the estimated purchase price of the Initial Purchased Assets (net of assumed liabilities), subject to certain closing adjustments. The purchase price for the Rights to MSRs was based on the value of such assets at the time HLSS entered into the Purchase Agreement and the estimated outstanding UPB of the underlying mortgage loans at closing. The purchase price for the associated servicing advances and other assets was equal to the net consolidated book value, which approximated fair value, as of the purchase date of all assets and liabilities of the special purpose entities established in connection with the advance financing facility that owns these servicing advances. HLSS paid Barclays Bank PLC, an affiliate of Barclays Capital Inc., a conversion fee of $3,989 related to our assumption of the existing advance financing facility.

On March 31, 2012, HLSS and Ocwen, pursuant to the terms of the Purchase Agreement, agreed to a final purchase price of $138,792 for the Initial Purchased Assets (net of assumed liabilities of $359,176), reflecting post-closing adjustments of $11,006 that principally resulted from declines in Match funded advances. See Note 13 for more information regarding our related party transactions.

We recorded the assets acquired and liabilities assumed at their purchase price on the acquisition date, which approximates their fair value as follows:

On April 26, 2012, we executed an amendment to the Advance Facility providing us with the ability to add and remove designated servicing agreements from the facility.

On May 1, 2012, we completed an acquisition from Ocwen of additional mortgage servicing assets (“Flow One”). A summary of the purchase price and sources of funding follows below:

We completed the Flow One purchase pursuant to a master servicing rights purchase agreement (the “Purchase Agreement”), dated February 10, 2012, and an additional sale supplement, dated May 1, 2012. The initial purchase price for the Transaction was $103,826. To finance that amount, we used $25,940 in cash and borrowed $77,886 under an existing servicing advance facility with Barclays Bank PLC against the $92,593 in servicing advances associated with the Rights to MSRs.

The final purchase price was $103,458 including a $368 adjustment which is the only adjustment to the purchase price as of June 30, 2012.

See Note 13 for more information regarding our related party transactions. We recorded the assets acquired and liabilities assumed at their purchase price on the acquisition date, which approximates their fair value as follows:

The cash used to purchase the Match funded advances is presented, net of liabilities assumed in the Initial Acquisition, within the “Acquisition of advances and other assets (net of liabilities assumed) in connection with the purchase of notes receivable — Rights to MSRs” of the condensed consolidated statement of cash flows.

We established the value of the Notes receivable — Rights to MSRs based on an appraisal prepared with the assistance of an independent valuation firm. We summarize the most significant assumptions used in the appraisal below:

We estimate fair value 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 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 and gives the highest priority to Level 1 inputs and the lowest to Level 3 inputs.

Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Where available, we utilize quoted market prices or observable inputs rather than unobservable inputs to determine fair value. 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 are as follows at the dates indicated:

We describe the methodologies that we use and key assumptions that we make to estimate the fair value of instruments in more detail below:

The carrying amount reported for cash at June 30, 2012 and December 31, 2011 approximates fair value due to the short-term nature of this asset. Cash is a level 1 financial asset.

We established the value of the Notes Receivable — Rights to MSRs based on an appraisal prepared with the assistance of an independent valuation firm. We prepare this appraisal on a quarterly basis. Significant inputs into the valuation include the following:

The unobservable inputs that have the most significant effect on the fair value of Notes receivable — Rights to MSRs are the mortgage loan prepayment rate projections and the interest rate projections; however, any significant increase (decrease) in discount rates, interest rates, mortgage loan prepayment projections or delinquency rate projections, each in isolation, would result in a substantially lower (higher) valuation.

Other assets include debt service accounts and cash collateral held by the counterparty to our interest rate swap agreements. The debt service accounts represent cash and cash equivalents held by the trustee of our advance funding facility. The carrying amount reported for these other assets at June 30, 2012 approximates fair value due to the short-term nature of these assets.

Our derivatives are not exchange-traded and therefore quoted market prices or other observable inputs are not available. The fair value of our interest rate swap agreements are based on certain information provided by third-party pricing sources. Third-party valuations are derived from proprietary models based on inputs that include yield curves and contractual terms such as fixed interest rates and payment dates. Although we do not adjust the information obtained from the third-party pricing sources, we review this information to ensure that it provides a reasonable basis for estimating fair value. Our review is designed to identify information that appears stale, information that has changed significantly from the prior period, and other indicators that the information may not be accurate. See Note 8 for additional information on our derivative financial instruments.

The following table presents assets and liabilities measured at fair value categorized by input level within the fair value hierarchy:

We held no Level 3 assets or liabilities prior to the Initial Acquisition, on March 5, 2012. The following tables present reconciliations of the changes in fair value of our Level 3 assets, which we measure at fair value on a recurring basis:

Match funded advances on residential loans we service for others, as more fully described in Note 1 — Principles of Consolidation — Variable Interest Entities, are comprised of the following at the dates indicated:

Match funded liabilities, as more fully described in Note 1 — Principles of Consolidation — Variable Interest Entities, are comprised of the following at:

On March 5, 2012, we closed the IPO resulting in the issuance of 13,333,333 of our ordinary shares. The public offering price of the shares sold in the offering was $14.00 per share. The total gross proceeds from the offering to HLSS were $186,667. After deducting underwriting discounts and commissions and offering expenses payable by HLSS, the aggregate net proceeds we received totaled $170,486. As of June 30, 2012, $63 of accrued offering costs remained unpaid and we expect to pay these costs in the quarter ending September 30, 2012.

On March 5, 2012, simultaneously with the IPO, William C. Erbey, the founder of our company and the Chairman of the Board of Directors, purchased 714,285 of our ordinary shares at a price per share equal to the IPO price in a private placement. The total proceeds from the private placement to HLSS were $10,000. We did not incur underwriting discounts or commissions in respect of these shares.

On April 2, 2012, we issued 129,600 additional ordinary shares to the underwriters in connection with the exercise of their over-allotment option under the IPO. The total gross proceeds from the issuance of these additional shares to HLSS were $1,814. After deducting underwriting discounts, commissions and expenses payable by HLSS, the aggregate net proceeds we received was $1,577.

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

We executed a hedging strategy aimed to mitigate the impact of changes in variable interest rates on the excess of interest rate sensitive liabilities over interest rate sensitive assets. On March 15, 2012 and May 15, 2012, we entered into interest rate swaps to hedge against the effects of a change in 1-Month LIBOR.

The following table provides information about our interest rate swaps at June 30, 2012:

The following table summarizes the use of derivatives during the six months ended June 30, 2012:

Our primary source of revenue is the fees we are entitled to receive in connection with the servicing of mortgage loans. We account for these fees within interest income.

The following table shows how we calculated Interest income — notes receivable — Rights to MSRs for the periods ended June 30:

The following table presents the components of interest expense for the periods ended June 30:

Income taxes have been provided for based upon the tax laws and rates in countries in which we conduct operations and earn related income. The Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation.

For the three and six month periods ended June 30, 2012, our effective income tax rate was 1.3% (0%, for the three and six month periods ended June 30, 2011). Our effective tax rate differs from the Federal and state combined rate of 38% primarily because only the earnings of our wholly owned subsidiary, HLSS Management, LLC, are subject to U.S. Federal and state income taxes.

Our business strategy focuses on acquiring mortgage servicing assets consisting of mortgage servicing rights, rights to fees and other income from servicing mortgage loans, and associated servicing advances. As of June 30, 2012, we operate a single reportable business segment that owns Rights to MSRs.

We entered into various agreements with Ocwen and Altisource in connection with the Initial Acquisition. William C. Erbey, our founder and the Chairman of our Board of Directors, is also the Chairman of the Board of Directors and largest shareholder of Ocwen and the Chairman of the Board of Directors and largest shareholder of Altisource.

The Purchase Agreement, in conjunction with the initial sale supplement, dated February 10, 2012 and the Flow One sale supplement, dated May 1, 2012, set forth the terms of our purchase of the Initial Purchased Assets and the Flow One Mortgage Servicing Assets from Ocwen as described in Notes 1 and 2. So long as the Required Third Party Consents have not been obtained with respect to the transfer of legal ownership of any Initial Mortgage Servicing Right or any Flow One Mortgage Servicing Right, Ocwen remains obligated to perform as servicer under the related pooling and servicing agreements, and we are required to pay Ocwen a monthly fee for the servicing activities it performs. We are also required to purchase any servicing advances that Ocwen is required to make pursuant to such pooling and servicing agreements.

The following table summarizes our transactions, beginning March 5, 2012, with Ocwen under the Purchase Agreement for the periods ended June 30, 2012:

At June 30, 2012, Ocwen owed us $653 for servicing fees collected but not remitted to us, and we owed Ocwen $3,440 for the subservicing fee earned by Ocwen in June 2012. In addition, at June 30, 2012, we owed Ocwen $2,736 for servicing advances that we purchased.

This agreement requires HLSS to provide certain services to Ocwen and for Ocwen to provide certain services to us for an initial term of six years, subject to renewal, with pricing terms intended to reflect market rates. Services provided by us under this agreement include valuation analysis of mortgage servicing rights, treasury management and other similar services. Services provided by Ocwen under this agreement include legal, licensing and regulatory compliance support services, risk management services and other similar services. The services provided by the parties under this agreement are on an as-needed basis, and the fees represent actual costs incurred plus an additional markup of 15%.

At June 30, 2012, Ocwen owed us $995 and we owed Ocwen $40 for professional services provided pursuant to the Ocwen Professional Services Agreement. During the three and six months ended June 30, 2012, we earned fees of $744 and $995, respectively, for services provided to Ocwen pursuant to the Professional Services Agreement. Additionally, during the three and six months ended June 30, 2012, we incurred fees of $30 and $40, respectively, for services received from Ocwen pursuant to the Ocwen Professional Services Agreement.

This agreement requires Altisource to provide certain administrative services to us for an initial term of six years, subject to renewal, with pricing terms intended to reflect market rates. Services provided to us under this agreement include human resources administration (benefit plan design, recruiting, hiring and training and compliance support), legal and regulatory compliance support services, general business consulting, corporate services (facilities management, security and travel services), finance and accounting support services (financial analysis, financial reporting and tax services), risk management services, vendor management and other related services. The services Altisource provides to us under this agreement are on an as-needed basis, and the fees we pay Altisource are based on the actual costs incurred by them plus an additional markup of 15%. During the three and six months ended June 30, 2012, we paid Altisource $177 and $231, respectively, for services provided to us pursuant to the Altisource Administrative Services Agreement.

During the three and six months ended June 30, 2012, we paid Altisource $20 and $27, respectively, for the rental of office space under two sublease agreements.

The following table summarizes amounts receivable from and payable to related parties at the dates indicated:

We may be party to various claims, legal actions, and complaints arising in the ordinary course of business. We monitor our legal matters, including advice from external legal counsel, and periodically perform assessments of these matters for potential loss accrual and disclosure. There are currently no probable matters outstanding that, in the opinion of management, will have a material effect on our Interim Condensed Consolidated Balance Sheets, Statements of Operations and Statements of Cash Flows. There are also currently no reasonably possible matters outstanding that, in the opinion of management, will have a material effect on our Interim Condensed Consolidated Balance Sheets, Statements of Operations and Statements of Cash Flows.

On July 10, 2012, we paid cash dividends of $1,420 or $0.10 per ordinary shares. On July 9, 2012, we declared the following dividends:

To the Board of Directors and Shareholders of Home Loan Servicing Solutions, Ltd. and subsidiaries

We have audited the accompanying statement of assets acquired and liabilities assumed by Home Loan Servicing Solutions, Ltd. and subsidiaries (the “Company”), pursuant to the Purchase and Assumption Agreement, dated February 10, 2012, executed by the Company with Ocwen Financial Corporation. This financial statement is the responsibility of the Company’s management. Our responsibility is to express an opinion on the financial statement based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, such statement of assets acquired and liabilities assumed by Home Loan Servicing Solutions, Ltd. and subsidiaries, pursuant to the Purchase and Assumption Agreement, dated February 10, 2012, is presented fairly, in all material respects, in conformity with accounting principles generally accepted in the United States of America.

On March 5, 2012, we used a portion of the net proceeds from the Offerings to purchase the following:

The Initial Acquisition was completed pursuant to a master servicing rights purchase agreement (the “Purchase Agreement”) and a related sale supplement, each dated February 10, 2012. Concurrent with the Initial Acquisition, we also assumed a related match funded servicing advance financing facility (the “Advance Facility”) from Ocwen^® pursuant to amended and restated advance facility agreements with Barclays Bank Plc . At closing on March 5, 2012, HLSS paid cash of $149,798 to Ocwen for the estimated purchase price of the Initial Purchased Assets (net of assumed liabilities), subject to certain closing adjustments. The purchase price for the Rights to MSRs was based on the value of such assets at the time HLSS entered into the Purchase Agreement and the estimated outstanding UPB of the underlying mortgage loans at closing which approximated their fair value. The purchase price for the associated servicing advances and other assets was equal to the net consolidated book value, which approximated fair value, as of the purchase date of all assets and liabilities of the special purpose entities established in connection with the advance financing facility that owns these servicing advances. HLSS paid Barclays Bank Plc a conversion fee of $3,989 related to our assumption of the existing advance financing facility.

The value of the Notes receivable — Rights to MSRs was established based on an appraisal prepared with the assistance of an independent valuation firm. The most significant assumptions used in the appraisal are summarized below:

We recorded the assets acquired and liabilities assumed at their purchase price on the acquisition date which approximates their fair value.

Servicing advances are usually reimbursed from amounts received with respect to the related mortgage loan, including payments from the borrower or amounts received from the liquidation of the property securing the loan which is referred to as “loan level recovery.” Servicers generally have the right to cease making servicing advances on a loan if they determine that advances cannot be recovered at the loan level. With respect to the Rights to MSRs that we own, this determination is made by Ocwen in accordance with its stop advance policy. In the event that loan level recovery is not sufficient to reimburse the servicer in full for servicing advances made with respect to a mortgage loan, our pooling and servicing agreements provide that the servicer is entitled to be reimbursed from collections received with respect to other loans in the same securitized mortgage pool which is referred to as “pool level recovery.” We do not receive interest on servicing advances.

We are obligated to purchase the servicing advances made by Ocwen during the period of time prior to the transfer of legal ownership of the Initial Mortgage Servicing Rights to us, and when an Initial Mortgage Servicing Right is transferred to us, we will become directly obligated to the related trustee to make any servicing advances required pursuant to the related pooling and servicing agreements. Servicing advances are currently and will continue to be pledged as collateral under the terms of the Advance Facility.

We would record a charge to earnings to the extent that we believe advances are uncollectible under the provisions of each servicing contract taking into consideration the projected collections under the applicable loan or pool relative to the advances outstanding and the projected future advances. We assess collectability using proprietary cash flow projection models which incorporate a number of different factors, depending on the characteristics of the mortgage loan or pool, including, for example, time to a foreclosure sale, estimated costs of foreclosure action, future property tax payments and the value of the underlying property net of carrying costs, commissions and closing costs.

We structured the purchase of the Rights to MSRs to convey to HLSS all the rights and rewards of ownership of MSRs absent the Required Third Party Consents; however, until we receive the Required Third Party Consents, Ocwen will remain the named servicer of the related mortgage servicing rights. Accounting Standards Codification (“ASC”) 860, Transfers and Servicing, specifically prohibits accounting for a transfer of servicing rights as a sale if legal title to such servicing rights has not passed to the purchaser. As a result, during the period before we receive the Required Third Party Consents related to the Initial Mortgage Servicing Rights, we are required to account for the purchase of the Rights to MSRs as a financing. We initially recorded the Notes receivable — Rights to MSRs at the purchase price of the Rights to MSRs. We amortize the Notes receivable — Rights to MSRs using the prospective interest method of accounting. At each reporting date, we calculate the present value of the net cash flows related to the then outstanding UPB of the underlying Initial Mortgage Servicing Rights and adjust the carrying value of the Notes receivable — Rights to MSRs to this amount. The change in the carrying value of the Notes receivable — Rights to MSRs is deducted from the net servicing fees received by us with respect to the Initial Mortgage Servicing Rights and the subservicing fees paid to Ocwen with respect to the Initial Mortgage Servicing Rights, and the resulting amount is recorded as interest income. Interest income is our primary source of income prior to receiving the Required Third Party Consents.

Other than transfer of legal title, we believe we have met all the other criteria under ASC 860 for the transfer of the Initial Mortgage Servicing Rights to be treated as a sale. Accordingly, if and when we obtain the Required Third Party Consents and become the legal owner of any Initial Mortgage Servicing Right:

All of the outstanding advances associated with the Initial Mortgage Servicing Rights are currently financed by the Advance Facility. Match funded liabilities are a form of non-recourse debt that are collateralized by the servicing advances. The investor in the notes issued under this facility is Sheffield Receivables Corporation, a commercial paper conduit administered by Barclays Bank Plc. Our match funded liability balance is driven primarily by the level of servicing advances and the advance borrowing rate, which is defined as the collateral value of servicing advances divided by total servicing advances. The advance borrowing rates, which are different for each of six advance types, were set at levels that enabled each class of notes issued pursuant to the advance financing facility to meet ratings criteria as determined by Standard & Poor’s.

Under the terms of the related indenture, the SPE created in connection with the Advance Facility is subject to various qualitative and quantitative covenants. We believe that we are currently in compliance with these covenants.

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 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 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

The carrying amounts on the acquisition date represent the estimated fair values of our financial instruments.

Match funded advances, Notes receivable — Rights to MSRs and Match funded liabilities are all valued using Level 3 inputs. The methodologies that we use and key assumptions that we make to estimate the fair value of instruments are described in more detail by instrument below:

We value match funded advances at their carrying amounts, which approximates their fair value, because they have no stated maturity, generally are realized within a relatively short period and do not bear interest.

As discussed in Note 1 the value of the Notes Receivable — Rights to MSRs is established based on an appraisal prepared with the assistance of an independent valuation firm. The most significant assumptions used in the appraisal are summarized below:

Because our match funded liabilities bear interest at a rate that is adjusted regularly based on a market index, their carrying value approximates fair value.

Match funded advances on residential loans we service for others are comprised of the following at March 5, 2012:

We have audited the accompanying consolidated balance sheets of Home Loan Servicing Solutions, Ltd. and subsidiaries (a development stage enterprise) (the “Company”) as of December 31, 2011 and 2010, and the related consolidated statements of operations, changes in equity and cash flows for the year ended December 31, 2011, for the period from December 1, 2010 (Inception) to December 31, 2010, and for the period from December 1, 2010 (Inception) to December 31, 2011. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2011 and 2010, and the results of its operations and its cash flows for the year ended December 31, 2011, for the period from December 1, 2010 (Inception) to December 31, 2010, and for the period from December 1, 2010 (Inception) to December 31, 2011, in conformity with accounting principles generally accepted in the United States of America.

The Company is in the development stage at December 31, 2011. As discussed in Note 1 to the consolidated financial statements, the Company has not yet purchased or contracted to purchase any mortgage servicing assets, including mortgage servicing rights and related servicing advances.

The accompanying notes are an integral part of these consolidated financial statements.

FOR THE PERIOD FROM DECEMBER 1, 2010 (INCEPTION) TO DECEMBER 31, 2010 AND FOR THE

The accompanying notes are an integral part of these consolidated financial statements.

Home Loan Servicing Solutions, Ltd. (a development stage enterprise) was incorporated on December 1, 2010 as a Cayman Islands exempted company formed for the purpose of acquiring mortgage servicing assets, including mortgage servicing rights and related servicing advances.

As of December 31, 2011, Home Loan Servicing Solutions, Ltd. has neither purchased nor contracted to purchase any mortgage servicing assets, including mortgage servicing rights and related servicing advances.

Principles of Consolidation and Basis of Presentation — The accompanying consolidated financial statements include the accounts of Home Loan Servicing Solutions, Ltd. and its wholly owned U.S. subsidiaries, HLSS Holdings, LLC and HLSS Management, LLC (collectively herein referred to as the “Company”). All intercompany balances and transactions are eliminated upon consolidation.

Use of Estimates — The preparation of consolidated financial statements in conformity with generally accepted accounting principles in the United States of America requires that we make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents — Cash and cash equivalents include both interest-bearing and non-interest-bearing demand deposits with financial institutions with original maturities of 90 days or less. There were no restrictions on the use of the cash and cash equivalents balance of as of December 31, 2011 and 2010.

Prepaid Expenses and Other Assets — Prepaid expenses and other assets include legal and other professional fees of $2,777,057 incurred directly related to a planned future equity offering. These costs are expected to be paid from the proceeds of the initial public offering and will be charged to equity upon funding of the transaction.

Organization Costs — Organization costs include legal fees, registration fees and other costs incurred to establish Home Loan Servicing Solutions, Ltd. and its subsidiaries and are expensed as incurred.

Income Taxes — The Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation. Our U.S.-based subsidiary, HLSS Management, LLC is subject to U.S. taxation, however there was no income related to the U.S.-based subsidiary since the inception of the Company and its subsidiaries.

Earnings (Loss) Per Share (“EPS”) — Basic EPS is calculated by dividing net income or loss by the weighted-average ordinary shares outstanding. As of December 31, 2011 and 2010, there were no common stock equivalents or other securities that could potentially dilute basic EPS.

As of December 31, 2011 and 2010, all 20,000 shares have been issued to William C. Erbey.

All of the ordinary shares have a par value of $0.01 per share and entitle the holder to one vote per share on all matters upon which stockholders are entitled to vote, to receive dividends and other distributions as authorized by the board of directors. The ordinary shares have no preferences or preemptive, conversion or exchange rights. On January 27, 2012, the authorized share capital of the Company was increased from 5,000,000 ordinary shares to 200,000,000 ordinary shares.

The Company may be party to various claims, legal actions, and complaints arising in the ordinary course of business. There are currently no probable matters outstanding that, in the opinion of management, will have a material effect on the consolidated financial statements of the Company. There are also currently no reasonably possible matters outstanding that, in the opinion of management, will have a material effect on the consolidated financial statements of the Company.

William C. Erbey is the founder and Chairman of the Board of Directors of the Company. Mr. Erbey is also the Chairman of the Board of Directors of Ocwen Financial Corporation (“Ocwen”) and Altisource Portfolio Solutions, S.A. (“Altisource”). During the year ended December 31, 2011, Ocwen and Altisource paid fees of $1,478,590 and $8,500, respectively, on the Company’s behalf for organization costs and costs associated with the planned initial public offering. Ocwen and Altisource may make more payments on the Company’s behalf until the initial public offering is completed at which time the Company expects to reimburse both Ocwen and Altisource. As of December 31, 2011, the Company owed $1,478,590 and $8,500 to Ocwen and Altisource, respectively, as reflected in the line “Due to affiliates” on the Company’s Consolidated Balance Sheet.

Through and including , 2012 (25 days after the commencement of this offering), all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus when acting as an underwriter and with respect to their unsold allotments or subscriptions.

The following table sets forth the expenses, other than the underwriting discounts and commissions, payable by the registrant in connection with the sale and distribution of the ordinary shares being registered hereby. All amounts shown are estimates, except the Securities and Exchange Commission registration fee, the Financial Industry Regulatory Authority filing fee and the NASDAQ Global Select Market listing fee.

On February 23, 2011, the registrant entered into an agreement to sell 666,667 ordinary shares to William C. Erbey at the initial public offering price set forth on the cover page of this prospectus in a private placement exempt from the registration requirements of the Securities Act pursuant to Section 4(2) of the Securities Act.

A list of exhibits filed herewith is included on the Exhibit Index which immediately follows the signature page of this registration statement and is incorporated herein by reference.

1. For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

2. For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration

statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Atlanta, Georgia on the 17^th day of August, 2012.

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated. Each person whose signature appears below constitutes William C. Erbey and John P. Van Vlack, his true and lawful attorneys-in-fact and agents, and each of them, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the SEC, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.


Large Accelerated Filer ¨		Accelerated Filer ¨		Non-Accelerated Filer x		Smaller reporting company ¨



Title of Each Class of Securities to be Registered	Proposed Maximum Aggregate Offering Price⁽¹⁾	Amount of Registration Fee⁽²⁾
Ordinary shares, par value $0.01 per share	$150,000,000	$17,190


	Per Share		Total
Price to public		$		$
Underwriting discounts and commissions		$		$
Proceeds, before expenses, to us		$		$


	Page
PROSPECTUS SUMMARY		1
RISK FACTORS		19
FORWARD-LOOKING STATEMENTS		47
INDUSTRY DATA		49
USE OF PROCEEDS		50
DIVIDEND POLICY		51
CAPITALIZATION		53
THE MORTGAGE SERVICING INDUSTRY		54
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		59
THE BUSINESS		95
MANAGEMENT		121
COMPENSATION DISCUSSION AND ANALYSIS		128
PRINCIPAL SHAREHOLDERS		133
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS		134
DESCRIPTION OF SHARE CAPITAL		138
MARKET FOR OUR ORDINARY SHARES		138
SHARES ELIGIBLE FOR FUTURE SALE		145
MATERIAL CAYMAN ISLANDS AND UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS		146
ENFORCEABILITY OF CIVIL LIABILITIES		151
UNDERWRITING (CONFLICTS OF INTEREST)		152
LEGAL MATTERS		160
EXPERTS		160
WHERE YOU CAN FIND ADDITIONAL INFORMATION		160
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS		F-1


Top Residential Mortgage Servicers by Unpaid Principal Balance
(dollars in billions)
Servicer	June 30, 2012		Servicer	June 30, 2012
Wells Fargo	$	1,863	PNC	$	132
Bank of America		1,598	Ocwen Financial Corp.		123
Chase		1,078	BB&T		98
Citi		494	HSBC		94
US Bank		254	Walter		86
ResCap		190	MetLife		84
Nationstar Mortgage		188	Flagstar Bank		82
PHH		185	OneWest		77
SunTrust		152	Fifth Third		75
Ally		139	Capital One		69


Record Date	Payment Date	Amount per Ordinary Share

August 31, 2012	September 10, 2012	$0.10

September 28, 2012	October 10, 2012	$0.10


	Actual			As adjusted for this offering
Equity—ordinary shares, $0.01 par value; 200,000,000 (actual) and shares (as adjusted) authorized; 14,197,218 shares (actual) and shares (as adjusted) issued and outstanding at June 30, 2012		142
Additional paid-in-capital		179,285
Retained Earnings		3,214
Accumulated other comprehensive loss		(565	)

Total equity	$	182,076		$

Total capitalization	$	560,659		$


	Three Months Ended					Six Months Ended
	June 30, 2012		June 30, 2011			June 30, 2012		June 30, 2011
Consolidated:
Revenue	$	11,427	$	—		$	14,656	$	—
Operating expenses		1,744		17			2,371		44

Income (loss) from operations		9,683		(17	)		12,285		(44	)
Interest expense		4,964		—			6,255		—

Income (loss) before income taxes		4,719		(17	)		6,030		(44	)
Income tax expense		60		—			77		—

Net income (loss)	$	4,659	$	(17	)	$	5,953	$	(44	)


For the three months ended June 30, 2012:	Condensed Consolidated Results (GAAP)		Adjustments			Management Reporting (Non-GAAP)
Servicing fee revenue⁽¹⁾	$	—	$	23,040		$	23,040
Interest income-notes receivable—Rights to MSRs⁽²⁾		10,580		(10,580	)		—
Professional services		744		—			744
Interest income–other		103		—			103

Total revenue		11,427		12,460			23,887

Operating expenses
Compensation and benefits		1,029		—			1,029
Servicing expense⁽³⁾		—		9,728			9,728
Amortization of MSRs⁽⁴⁾		—		2,732			2,732
General and administrative expenses		715		—			715

Total operating expenses		1,744		12,460			14,204

Income from operations	$	9,683	$	—		$	9,683


For the six months ended June 30, 2012:	Condensed Consolidated Results (GAAP)		Adjustments			Management Reporting (Non-GAAP)
Servicing fee revenue⁽¹⁾	$	—	$	29,501		$	29,501
Interest income—notes receivable–Rights to MSRs⁽²⁾		13,525		(13,525	)		—
Professional services		995		—			995
Interest income–other		136		—			136

Total revenue		14,656		15,976			30,632

Operating expenses
Compensation and benefits		1,425		—			1,425
Servicing expense⁽³⁾		—		12,460			12,460
Amortization of MSRs⁽⁴⁾		—		3,516			3,516
General and administrative expenses		946		—			946

Total operating expenses		2,371		15,976			18,347

Income from operations	$	12,285	$	—		$	12,285


(in thousands, except for loan count data)	2012			2011⁽¹⁾			% Change
Residential Assets Serviced
Unpaid principal balance:
Performing loans⁽²⁾	$	13,675,159		$	13,041,451			5	%
Non-performing loans		3,142,209			3,018,840			4
Non-performing real estate		477,017			889,932			(46	)

Total residential assets serviced	$	17,294,385		$	16,950,223			2

Percent of total unpaid principal balance:
Servicing portfolio		100.0	%		100.0	%		0
Non-performing residential assets serviced		20.9	%		23.1	%		(10	)

Number of:
Performing loans⁽²⁾		92,275			84,802			9
Non-performing loans		15,307			14,312			7
Non-performing real estate		2,308			4,380			(47	)

Total number of residential assets serviced		109,890			103,494			6

Percent of total number:
Non-performing residential assets serviced		16.0	%		18.1	%		(12	)


(in thousands, except for loan count data)	Unpaid principal balance			Loan Count
Servicing portfolio at March 31, 2012	$	15,031,688			95,486

Additions		2,947,289			16,914
Runoff		(684,592	)		(2,510	)

Servicing portfolio at June 30, 2012	$	17,294,385			109,890


	Fair Value of Initial Mortgage Servicing Rights
Quarter Ended	Unpaid Principal Balance		Basis Points		Amount
	(dollars in millions)
September 30, 2009	$	28,368		34.50		98
December 31, 2009	$	26,659		32.46		87
March 31, 2010	$	25,366		34.11		87
June 30, 2010	$	24,170		38.09		92
September 30, 2010	$	22,962		37.42		86
December 31, 2010	$	22,147		40.35		89
March 31, 2011	$	21,237		41.79		89
June 30, 2011	$	20,406		40.19		82
September 30, 2011	$	19,528		38.47		75
December 31, 2011	$	18,743		40.45		76
March 31, 2012	$	18,026		40.37		73
June 30, 2012	$	17,295		40.58		70


Quarter Ended	Unpaid Principal Balance		Amount of Outstanding Servicing Advances		Advance Ratio
	(dollars in millions)
September 30, 2009		28,368		1,358		4.8	%
December 31, 2009		26,659		1,348		5.1	%
March 31, 2010		25,366		1,379		5.4	%
June 30, 2010		24,170		1,304		5.4	%
September 30, 2010		22,962		1,253		5.5	%
December 31, 2010		22,147		1,099		5.0	%
March 31, 2011		21,237		897		4.2	%
June 30, 2011		20,406		753		3.7	%
September 30, 2011		19,528		642		3.3	%
December 31, 2011		18,743		572		3.1	%
March 31, 2012		18,026		505		2.8	%
June 30, 2012		17,295		430		2.5	%


Principal and Interest	$	106
Escrow Advances		231
Corporate Advances		93

Total	$	430



Wells Fargo Securities	Barclays	Citigroup


(Dollars in millions) Borrowing Type	Interest Rate⁽¹⁾	Maturity		Amortization Date⁽²⁾		Unused Borrowing Capacity⁽³⁾		Balance Outstanding
(Dollars in millions) Borrowing Type	Interest Rate⁽¹⁾	Maturity		Amortization Date⁽²⁾		Unused Borrowing Capacity⁽³⁾		June 30, 2012		December 31, 2011
Class A-1 Term Note	1-Month LIBOR + 225 bps⁽⁴⁾⁵		Aug. 2043		Aug. 2013	$	—	$	288	$	—
Class A-2 Variable Funding Note	1-Month LIBOR + 250 bps⁽⁴⁾⁵		Aug. 2043		Aug. 2013		146		54		—
Class B Term Note⁽⁴⁾	1-Month LIBOR + 525 bps		Aug. 2043		Aug. 2013		—		13		—
Class C Term Note⁽⁴⁾	1-Month LIBOR + 625 bps		Aug. 2043		Aug. 2013		—		13		—

Total						$	146	$	368	$


Quarter Ended	Match Funded Liabilities
	(dollars in millions)

June 30, 2009	$	986	) ) ) ) )	Pro forma
September 30, 2009		920
December 31, 2009		916
March 31, 2010		938
June 30, 2010		890

September 30, 2010	$	799	) ) ) ) )	Actual
December 31, 2010		786
March 31, 2011		606
June 30, 2011		493
September 30, 2011		452
December 31, 2011		371
March 31, 2012		357
June 30, 2012		368


	As of June 30, 2012 Advance Borrowing Rate
Servicing Advance Type	Class A-1 & A-2			Class B			Class C
Judicial States:
Principal and Interest		85.10	%		86.60	%		89.50	%
Escrow Advances		77.00	%		82.70	%		85.70	%
Corporate Advances		70.10	%		78.50	%		82.90	%
Non-Judicial States:
Principal Advances		86.30	%		87.00	%		89.40	%
Escrow Advances		79.50	%		83.90	%		85.70	%
Corporate Advances		76.10	%		82.10	%		84.80	%

Series Weighted Average Advance Borrowing Rate as of June 30, 2012¹		78.49	%		83.27	%		86.21	%


	As of June 30, 2012
Category	Number of Loans		Average Unpaid Principal Balance per Loan			Total Unpaid Principal Balance		Fair Value Mortgage Servicing Rights Balance
			(dollars in thousands)			(dollars in millions)
Subprime Loans		108,551	$	158		$	17,125	$	69
Alt-A Loans		1,339		127			170		1

Total		109,890	$	157	¹	$	17,295	$	70


	As of June 30, 2012
(Dollars in millions) State/Territory	Number of Loans		Total Unpaid Principal Balance		Percent of Total Loans			Percent of Total Unpaid Principal Balance
Alabama		876	$	81		0.8	%		0.5	%
Alaska		103		17		0.1	%		0.1	%
Arizona		2,557		343		2.3	%		2.0	%
Arkansas		599		52		0.5	%		0.3	%
California		14,666		3,785		13.3	%		21.9	%
Colorado		1,572		228		1.4	%		1.3	%
Connecticut		1,640		298		1.5	%		1.7	%
Delaware		389		60		0.4	%		0.4	%
Florida		12,157		1,783		11.1	%		10.3	%
Georgia		2,975		341		2.7	%		2.0	%
Hawaii		813		242		0.8	%		1.4	%
Idaho		307		34		0.3	%		0.2	%
Illinois		5,217		744		4.7	%		4.3	%
Indiana		2,124		185		1.9	%		1.1	%
Iowa		531		45		0.5	%		0.3	%
Kansas		471		41		0.4	%		0.3	%
Kentucky		750		70		0.7	%		0.4	%
Louisiana		1,628		148		1.5	%		0.9	%
Maine		422		59		0.4	%		0.4	%
Maryland		2,926		607		2.7	%		3.5	%
Massachusetts		2,224		489		2.0	%		2.8	%
Michigan		2,908		291		2.6	%		1.7	%
Minnesota		1,302		187		1.2	%		1.1	%
Mississippi		876		74		0.8	%		0.4	%
Missouri		1,525		140		1.4	%		0.8	%
Montana		113		13		0.1	%		0.1	%
Nebraska		410		37		0.4	%		0.2	%
Nevada		1,214		211		1.1	%		1.2	%
New Hampshire		399		70		0.4	%		0.4	%
New Jersey		3,176		743		2.9	%		4.3	%
New Mexico		437		54		0.4	%		0.3	%
New York		7,134		1,939		6.5	%		11.2	%
North Carolina		1,881		195		1.7	%		1.1	%
North Dakota		44		4		0.1	%		0.0	%
Ohio		4,029		376		3.7	%		2.2	%
Oklahoma		888		77		0.8	%		0.4	%
Oregon		934		152		0.8	%		0.9	%
Pennsylvania		4,441		506		4.0	%		2.9	%
Rhode Island		484		89		0.4	%		0.5	%
South Carolina		1,114		111		1.0	%		0.6	%
South Dakota		52		5		0.0	%		0.0	%
Tennessee		2,298		208		2.1	%		1.2	%
Texas		13,119		1,178		11.9	%		6.8	%
Utah		546		76		0.5	%		0.4	%
Vermont		71		12		0.1	%		0.1	%
Virginia		1,833		316		1.7	%		1.8	%
Washington		2,158		382		2.0	%		2.2	%
Washington, D.C.		162		40		0.1	%		0.2	%
West Virginia		179		17		0.2	%		0.1	%
Wisconsin		1,137		130		1.0	%		0.7	%
Wyoming		79		10		0.1	%		0.1	%

		109,890	$	17,295		100.0	%		100.0	%


	As of June 30, 2012
Status	Number of Loans		Total Unpaid Principal Balance		Percent of Total Number of Loans			Percent of Total Unpaid Principal Balance
	(dollars in millions)
Current		80,408	$	11,718		73.2	%		67.8	%
Delinquent⁽¹⁾
30-59 days		5,223		816		4.8	%		4.7	%
60-89 days		1,231		191		1.1	%		1.1	%
90 days or more		2,711		452		2.5	%		2.6	%
Borrower has filed for bankruptcy		5,322		861		4.8	%		5.0	%
Forbearance		2,122		454		1.9	%		2.6	%
Foreclosure		10,575		2,326		9.6	%		13.4	%
Real Estate Owned (property has been foreclosed)		2,308		477		2.1	%		2.8	%

Total		109,890	$	17,295		100.0	%		100.0	%


	As of June 30, 2012
Origination Year	Number of Loans		Total Unpaid Principal Balance		Percent of Total Number of Loans			Percent of Total Unpaid Principal Balance
	(dollars in millions)
Prior to 2005		28,623	$	4,408		26.0	%		25.5	%
2005		47,208		8,142		43.0	%		47.1	%
2006		7,317		1,300		6.7	%		7.5	%
2007		26,742		3,445		24.3	%		19.9	%

Total		109,890	$	17,295		100.0	%		100.0	%


	As of June 30, 2012
Mortgage Type	Number of Loans		Total Unpaid Principal Balance		Percent of Total Number of Loans			Percent of Total Unpaid Principal Balance
	(dollars in millions)
1/29		54	$	10		0.0	%		0.1	%
2/28		25,075		4,326		22.8	%		25.0	%
3/27		5,182		893		4.7	%		5.2	%
5/25		798		187		0.7	%		1.1	%
ARM6		9		1		0.0	%		0.0	%
Other ARM		1,210		294		1.1	%		1.7	%
Fixed Rate		77,562		11,584		70.6	%		67.0	%

Total		109,890	$	17,295		100.0	%		100.0	%


Mortgage Type	Average FICO Score Updated as of June, 30, 2012
1/29		620
2/28		610
3/27		619
5/25		651
ARM6		597
Other ARM		640
Fixed Rate		608


	As of June 30, 2012
Mortgage Type	Average Loan-to- Value Ratio Market Value Not Updated Since January 1, 2010			Average Loan-to- Value Ratio Market Value Updated Between January 1, 2010 and June 30, 2012
1/29		77	%		142	%
2/28		80	%		127	%
3/27		77	%		122	%
5/25		72	%		123	%
ARM6		77	%		114	%
Other ARM		82	%		137	%
Fixed Rate		60	%		100	%


Quarter Ended	Aggregate Annualized Prepayment Speed
September 30, 2009		26.1	%
December 31, 2009		22.0	%
March 31, 2010		18.0	%
June 30, 2010		17.6	%
September 30, 2010		18.5	%
December 31, 2010		13.5	%
March 31, 2011		15.4	%
June 30, 2011		14.8	%
September 30, 2011		16.1	%
December 31, 2011		15.1	%
March 31, 2012		14.5	%
June 30, 2012		15.3	%


	Six Months
	2012			2011
Net income (loss)	$	5,953		$	(44	)
Adjustments for non-cash items		2,271			—
Change in working capital accounts		82,812			41
Cash flow from operating activities		91,036			(3	)
Cash flow from investing activities		(239,102	)		—
Cash flow from financing activities		184,241			—
Net increase (decrease) in cash		36,175			(3	)
Cash at beginning of period		283			300
Cash at end of period	$	36,458		$	297


	Remainder of 2012		2013 through 2014		2015 through 2016		After 2016		Total
Operating leases	$	40	$	148	$	—	$	—	$	188
Total contractual cash obligations	$	40	$	148	$	—	$	—	$	188


Record Date	Payment Date	Amount per Ordinary Share

March 30, 2012	April 10, 2012	$0.08

April 30, 2012	May 10, 2012	$0.10

May 31, 2012	June 11, 2012	$0.10

June 30, 2012	July 10, 2012	$0.10

July 31, 2012	August 10, 2012	$0.10


Components of Net Income

Prior to Receiving Required Third Party Consents		Subsequent to Receiving Required Third Party Consents

	Interest Income—Notes Receivable—Rights to MSRs		Servicing Fee Revenue
		(-)	Fee Expense
(+)	Other Income		Gross Servicing Margin
(-)	Interest Expense
(-)	General and Administrative Expenses	(+)	Other Income
	Pre-Tax Earnings	(-)	Mortgage Servicing Assets Amortization Expense
		(-)	Interest Expense
(-)	Income Taxes	(-)	General and Administrative Expenses
	Net Income		Pre-Tax Earnings

		(-)	Income Taxes
			Net Income


	Basis Points
Servicing fee revenue		50.0
Base fee (12% multiplied by 50 basis points)		(6.0	)
Retained fee (initial retained fee from retained fee schedule)		(32.0	)

Incentive fee (revenue minus base fee minus retained fee)		12.0


		Mortgage Servicing Rights Amortization Expense

		Current Period Servicing Contribution Collected
(÷)		Total Projected Servicing Contribution

=		Proportion of Total Projected Servicing Contribution Collected

(x)		Unamortized Mortgage Servicing Rights Balance

=		Amortization Expense


Name	Age		Position
William C. Erbey		63	Chairman of Board of Directors
John P. Van Vlack		48	President and Director
James E. Lauter		52	Chief Financial Officer
Richard Delgado		43	Treasurer
Michael J. McElroy		43	General Counsel
Kerry Kennedy		52	Director
Richard J. Lochrie		70	Director
Robert McGinnis		59	Director
David B. Reiner		56	Director


Name and Title	2012 Base Salary
John P. Van Vlack	$	325,000
President
James E. Lauter	$	192,500
Chief Financial Officer
Richard Delgado	$	250,000
Treasurer
Michael J. McElroy	$	220,000
General Counsel


Name	Base Salary as a % of Total Target Compensation for 2012			Incentive Compensation as a % of Total Target Compensation for 2012
John P. Van Vlack		50	%		50	%
James E. Lauter		70	%		30	%
Richard Delgado		50	%		50	%
Michael J. McElroy		70	%		30	%