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Employee Compensation and Benefit Plans (Tables)
 12 Months Ended
Dec. 31, 2019
Share-based Payment Arrangement [Abstract]  
Schedule of Change in Benefit Obligation, Plan Assets and Funded Status for Pension Plans
The following table shows the total change in the benefit obligation, plan assets and funded status for the pension plans:
 
December 31,
 
2019
 
2018
Benefit obligation
$
54,603

 
$
49,122

Fair value of plan assets
41,220

 
36,439

Unfunded status recognized in Other liabilities
$
(13,383
)
 
$
(12,683
)
 
 
 
 
Amounts recognized in Accumulated other comprehensive income
$
6,864

 
$
3,422
Schedule of Stock Options Vesting
wards granted under the 2007 Equity Plan and the 2017 Equity Plan had the following characteristics in common:
Type of Award
 
Percent of Total Equity Award
 
Vesting Period
2011 - 2014 Awards:
 
 
 
 
Options:
 
 
 
 
Service Condition:
 
 
 
 
Time-based
 
60
%
 
Ratably over four years (25% on each of the four anniversaries of the grant date)
Market Condition:
 


 

Market performance-based
 
35

 
Over three years beginning with 25% vesting on the date that the stock price has at least doubled over the exercise price and the compounded annual gain over the exercise price is at least 20% and then ratably over three years (25% on each of the next three anniversaries of the achievement of the market condition)
Extraordinary market performance-based
 
5

 
Over three years beginning with 25% vesting on the date that the stock price has at least tripled over the exercise price and the compounded annual gain over the exercise price is at least 25% and then ratably over three years (25% on each of the next three anniversaries of the achievement of the market condition)
Total Award
 
100
%
 
 
 
 
 
 
 
Type of Award
 
Percent of Total Equity Award
 
Vesting Period
2015 - 2016 Awards:
 
 
 
 
Options:
 
 
 
 
Service Condition:
 
 
 
 
Time-based
 
34
%
 
Ratably over four years (25% vesting on each of the first four anniversaries of the grant date.)
Stock Units:
 
 
 
 
Service Condition:
 
 
 
 
Time-based
 
—

 
Over four years with 1/3 vesting on each of the 2nd, 3rd and 4th anniversaries of the grant date.
Market Condition:
 
 
 
 
Time-based vesting schedule and Market performance-based vesting date
 
66

 
Vest over four years with 25% vesting on each of the four anniversaries of the grant date. However, none are considered vested until the first trading day (if any) on or before the 4th anniversary of the award date on which the average stock price equals or exceeds the price set in the individual award agreement, at which time all units that have met their time-based vesting schedule vest immediately with the remainder vesting in accordance with their time-based schedule.
Total Award
 
100
%
 
 
 
 
 
 
 
2017 - 2019 Awards:
 
 
 
 
Options:
 
 
 
 
Service Condition:
 
 
 
 
Time-based
 
15
%
 
Ratably over three years (1/3 vesting on each of the first three anniversaries of the grant date).
Stock Units:
 
 
 
 
Service Condition:
 
 
 
 
Time-based
 
56

 
Over three years with 1/3 vesting on each of the first three anniversaries of the grant date.
Market Condition:
 
 
 
 
Time-based vesting schedule and Market performance-based vesting date
 
29

 
Vest over four years with 25% vesting on each of the four anniversaries of the grant date. However, none are considered vested until the first trading day (if any) on or before the 4th anniversary of the award date on which the average stock price equals or exceeds the price set in the individual award agreement, at which time all units that have met their time-based vesting schedule vest immediately with the remainder vesting in accordance with their time-based schedule.
Total Award
 
100
%
 
 
Schedule of Stock Option Activity
 
Years Ended December 31,
Stock Options 
2019
 
2018
 
2017
 
Number of
Options
 
Weighted
Average
Exercise
Price
 
Number of
Options
 
Weighted
Average
Exercise
Price
 
Number of
Options
 
Weighted
Average
Exercise
Price
Outstanding at beginning of year
2,092,599

 
$
19.22

 
6,708,655

 
$
9.97

 
6,926,634

 
$
9.88

Granted (1) (2)
51,409

 
2.08

 
348,385

 
3.66

 
—

 
—

Exercised
—

 
—

 
—

 
—

 
—

 
—

Forfeited / Expired (3)
(164,577
)
 
18.69

 
(4,964,441
)
 
5.62

 
(217,979
)
 
7.16

Outstanding at end of year (4)(5)
1,979,431

 
$
18.82

 
2,092,599

 
$
19.22

 
6,708,655

 
$
9.97

 
 
 
 
 
 
 
 
 
 
 
 
Exercisable at end of year (4)(5)(6)
1,580,766

 
$
20.16

 
1,520,039

 
$
21.29

 
6,234,830

 
$
8.87

 
(1)
Stock options granted in 2019 include 33,180 options awarded to Ocwen’s Chief Financial Officer at a strike price of $2.17 equal to the closing price of our common stock on the effective date of her employment. Stock options granted in 2018 include 266,990 options awarded to Ocwen’s current Chief Executive Officer (CEO) at an exercise price of $4.12 equal to the closing price of our common stock on the effective date of his employment, which was the closing date of the PHH acquisition.
(2)
The weighted average grant date fair value of stock options granted in 2019 was $1.49.
(3)
Includes 73,696 and 4,719,750 options which expired unexercised in 2019 and 2018, because their exercise price was greater than the market price of Ocwen’s stock.
(4)
At December 31, 2019, 115,000 options with a market condition for vesting based on an average common stock trading price of $38.41, had not met their performance criteria. Outstanding and exercisable stock options at December 31, 2019 have a net aggregate intrinsic value of $0. A total of 810,939 market-based options were outstanding at December 31, 2019, of which 695,939 were exercisable.
(5)
At December 31, 2019, the weighted average remaining contractual term of options outstanding and options exercisable was 4.13 years and 3.28 years, respectively.
(6)
The total fair value of stock options that vested and became exercisable during 2019, 2018 and 2017, based on grant-date fair value, was $0.6 million, $0.6 million and $0.7 million, respectively.
Schedule of Stock Unit Activity
 
Years Ended December 31,
Stock Units - Equity Awards
2019
 
2018
 
2017
 
Number of
Stock Units
 
Weighted
Average
Grant Date Fair Value
 
Number of
Stock Units
 
Weighted
Average
Grant Date Fair Value
 
Number of
Stock Units
 
Weighted
Average
Grant Date Fair Value
Unvested at beginning of year
2,946,800

 
$
3.75

 
2,753,918

 
$
3.69

 
2,752,054

 
$
3.91

Granted (1)(2)
1,256,952

 
2.00

 
1,809,373

 
3.57

 
971,761

 
2.56

Vested (3)(4)
(1,137,696
)
 
3.08

 
(796,856
)
 
2.78

 
(896,272
)
 
3.26

Forfeited/Cancelled (1)
(406,931
)
 
9.58

 
(819,635
)
 
4.57

 
(73,625
)
 
2.20

Unvested at end of year (5)(6)
2,659,125

 
$
2.63

 
2,946,800

 
$
3.75

 
2,753,918

 
$
3.69


(1)
Upon the resignation of Ocwen’s former CEO on June 30, 2018, 377,525 unvested stock units which would have been forfeited immediately were modified to allow continued vesting in accordance with the original terms. This had the equivalent effect of canceling the original award and granting a new award.
(2)
Stock units granted in 2019 include 1,130,653 units granted to Ocwen’s CEO under the new long-term incentive (LTI) program described below. Stock units granted in 2018 include 983,010 units granted to Ocwen’s current CEO on the effective date of his employment, which was the closing date of the PHH acquisition.
(3)
The total intrinsic value of stock units vested, which is defined as the market value of the stock on the date of vesting, was $2.1 million, $3.3 million and $4.6 million for 2019, 2018 and 2017, respectively.
(4)
The total fair value of the stock units that vested during 2019, 2018 and 2017, based on grant-date fair value, was $3.5 million, $2.2 million and $2.9 million, respectively.
(5)
Excluding the 787,204 market-based stock awards that have not met their performance criteria, the net aggregate intrinsic value of stock awards outstanding at December 31, 2019 was $2.6 million. At December 31, 2019, 40,000, 93,023, 57,604, and 31,250 stock units with a market condition for vesting based on an average common stock trading price of $11.72, $5.80, $4.34, and $3.84 respectively, as well as 565,327 stock units requiring an average common stock trading price of $2.56 to vest a minimum of 50% of units, had not yet met the market condition (and time-vesting requirements, where applicable).
(6)
At December 31, 2019, the weighted average remaining contractual term of share units outstanding was 1.88 years.
Stock Units - Liability Awards
Year Ended December 31, 2019
Unvested units at beginning of year
—

Granted
3,766,143

Vested
—

Forfeited/Cancelled
114,528

Unvested units at end of year
3,651,615
Schedule of Assumptions used to Value Stock Option Awards Granted
The following assumptions were used to value awards:
 
Years Ended December 31,
 
2019
2018
 
2017
 
 
Black-Scholes
Monte Carlo
Black-Scholes
Monte Carlo
 
Monte Carlo
 
Risk-free interest rate
2.60%
1.16% - 2.40%
2.79% – 3.14%
1.15% – 1.18%
 
1.12% – 1.18%
 
Expected stock price volatility (1)
68%
72.5% - 75.9%
67%
71% - 74%
 
71% - 77%
 
Expected dividend yield
—%
—%
—%
—%
 
—%
 
Expected life (in years) (2)
8.5
(3)
8.5
(3)
 
(3)
 
Contractual life (in years)
N/A
N/A
N/A
N/A
 
N/A
 
Fair value
$1.37 - $1.55
$1.75 - $2.25
$1.53 - $2.96
$1.84 - $4.80
 
$2.00 - $4.80
 
(1)
We generally estimate volatility based on the historical volatility of Ocwen’s common stock over the most recent period that corresponds with the estimated expected life of the option. For awards valued using a Monte Carlo simulation, volatility is computed as a blend of historical volatility and implied volatility based on traded options on Ocwen’s common stock.
(2)
For the options valued using the Black-Scholes model we determined the expected life based on historical experience with similar awards, giving consideration to the contractual term, exercise patterns and post vesting forfeitures. The expected term of the options valued using the lattice (binomial) model is derived from the output of the model. The lattice (binomial) model incorporates exercise assumptions based on analysis of historical data. For all options, the expected life represents the period of time that options granted were expected to be outstanding at the date of the award.
(3)
The stock units that contain both a service condition and a market-based condition are valued using the Monte Carlo simulation. The expected term is derived from the output of the simulation and represents the expected time to meet the market-based vesting condition. For equity awards with both service and market conditions, the requisite service period is the longer of the derived or explicit service period. In this case, the explicit service condition (vesting period) is the requisite service period, and the graded vesting method is used for expense recognition.
Schedule of Equity-based Compensation Expense Related to Stock Options and Stock Awards and Related Excess Tax Benefit
The following table summarizes Ocwen's stock-based compensation expense included as a component of Compensation and benefits expense in the consolidated statements of operations:
 
Years Ended December 31,
 
2019
 
2018
 
2017
Compensation expense - Equity awards
 
 
 
 
 
Stock option awards
$
(121
)
 
$
(368
)
 
$
1,457

Stock awards
2,818

 
2,734

 
4,167

 
2,697

 
2,366

 
5,624

Compensation expense - Liability awards
1,082

 
—

 
—

(Tax deficiency) excess tax benefit related to share-based awards
(381
)
 
294

 
3,701