Current Report Filing (8-k)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of The Securities Exchange Act of 1934

Date of report (Date of earliest event reported):

October 16, 2014 (October 16, 2014)

HOME LOAN SERVICING SOLUTIONS, LTD.

(Exact name of registrant as specified in its charter)



Cayman Islands	1-35431	98-0683664
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

Home Loan Servicing Solutions, Ltd.

c/o Intertrust Corporate Services (Cayman) Limited

190 Elgin Avenue

George Town, Grand Cayman

KY1-9005

Cayman Islands

Registrant’s telephone number, including area code: (345) 945-3727

Not applicable.

(Former name or former address, if changed since last report)



Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))



Item 1.01	Entry into a Material Definitive Agreement.

The Master Repurchase Agreement dated as of March 3, 2014 (the “Agreement”), among HLSS Mortgage Master Trust, a wholly owned subsidiary of Home Loan Servicing Solutions, Ltd. (the "Company"), as seller, Barclays Bank PLC, as purchaser and agent, and Home Loan Servicing Solutions, Ltd., as guarantor, as previously amended by Amendment No. 1 to the Agreement dated April 15, 2014, was further amended and restated through the execution of Amendment No. 2 to the Agreement (the “Amendment”) on October 16, 2014. The Amendment includes the following modifications to the Agreement:


•	Sutton Funding LLC has replaced Barclays Bank PLC as purchaser;


•	Deutsche Bank National Trust Company has been included as an additional custodian;


•	PennyMac Loan Services, LLC has been added as an additional eligible servicer; and


•	Certain operational aspects of the Agreement regarding the collection of claims proceeds have been clarified.

This description of the Amendment is not complete and is qualified in its entirety by reference to the Amendment, a copy of which is attached hereto as Exhibit 10.1 and which is incorporated herein by reference.



Item 2.02	Results of Operations and Financial Condition.

The news release of Home Loan Servicing Solutions, Ltd., dated October 16, 2014, announcing its results for the third quarter of 2014 is attached hereto as Exhibit 99.1.

The information contained under Item 2.02 in this Current Report on Form 8-K, including Exhibit 99.1 attached hereto, is being furnished and, as a result, such information shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act) or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.



Item 9.01	Financial Statements and Exhibits.

(a)-(c) Not applicable.

(d) Exhibits:

Exhibit No.



10.1		Amendment No. 2 to the Master Repurchase Agreement among HLSS Mortgage Master Trust, Barclays Bank PLC and Home Loan Servicing Solutions, Ltd. dated as of October 16, 2014.

99.1		Text of press release by Home Loan Servicing Solutions, Ltd. dated October 16, 2014.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.



	HOME LOAN SERVICING SOLUTIONS, LTD.
	(Registrant)

Date: October 16, 2014	By:	/s/ James E. Lauter
		James E. Lauter
		Senior Vice President and Chief Financial Officer (On behalf of the Registrant and as its principal financial officer)

EXECUTION

AMENDMENT NO. 2 TO

MASTER REPURCHASE AGREEMENT

This Amendment No. 2 (this “Amendment”), dated as of October 16, 2014, amends that certain Master Repurchase Agreement, dated as of March 3, 2014, as amended by Amendment No. 1, dated as of April 15, 2014 (the “Agreement”), between HLSS Mortgage Master Trust, as seller (the “Seller”), Barclays Bank PLC, as purchaser and agent (“Barclays”), and Home Loan Servicing Solutions, Ltd., as guarantor (the “Guarantor”), and acknowledged and agreed to by Sutton Funding LLC (“Sutton”). Capitalized terms used herein but not otherwise defined shall have the meanings given to such terms in the Agreement.

WHEREAS, the Seller, the Guarantor and Barclays are all parties to the Agreement;

WHEREAS, Sutton desires to become a party to the Agreement; and

WHEREAS, the parties hereto desire to amend the Agreement as described below;

NOW, THEREFORE, pursuant to the provisions of the Agreement concerning modification and amendment thereof, and in consideration of the amendments, agreements and other provisions herein contained and of certain other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged by the parties hereto, it is hereby agreed between the Seller, the Guarantor and Barclays as follows:

Section 1.Joinder of Sutton. Sutton hereby accepts the terms specified in the Agreement and agrees to be bound by each of the terms specified in the Agreement, and is hereby made a party to the Agreement as Purchaser. For avoidance of doubt, Barclays will no longer act in its capacity as Purchaser following the effectiveness of this Amendment. Notwithstanding the foregoing, Barclays, in its capacity as Agent and on behalf of Sutton, agrees to fund the initial Transaction with respect to the Series 2014-4 Mortgage Loans.

Section 2. Amendments.

(a) Section 2 of the Agreement is hereby amended by deleting the relevant terms and replacing them with the following:

“Custodian” means Wells Fargo Bank, N.A. or Deutsche Bank National Trust Company, as the case may be, and their respective successors and permitted assigns.

“Custodial Agreement” means each of the Wells Fargo Custodial Agreement and the Deutsche Bank Custodial Agreement.

“Mortgage Loan Purchase Agreement” means (i) that certain Mortgage Loan Purchase and Servicing Agreement, dated as of March 3, 2014, by and between Seller, as purchaser, and Ocwen Loan Servicing, LLC, as seller and servicer, as may be amended from time to time, (ii) that certain Mortgage Loan Purchase and Servicing Agreement, dated as of October 16, 2014, by and between Seller, as purchaser, and PennyMac Loan Services, LLC, as seller and servicer, as may be amended from time to time, or (iii) any similar agreement between Seller, as purchaser, and a third party seller, as approved by Purchaser in its sole discretion, and in either case, of which Purchaser shall be an intended third party beneficiary.

“Purchaser” means Sutton Funding LLC.

“Request for Release of Documents” shall mean the Request for Release of Documents set forth as Annex 5 to the Wells Fargo Custodial Agreement and Annex 5 to the Deutsche Bank Custodial Agreement, as applicable.

“Servicer” means (i) Ocwen Loan Servicing, LLC, (ii) PennyMac Loan Services, LLC, (iii) any third party seller that (A) has entered into a Mortgage Loan Purchase Agreement with Seller, (B) has caused its legal counsel to provide the Purchaser and the Agent with a duly executed true sale opinion with regard to the sale of Mortgage Loans contemplated by the related Mortgage Loan Purchase Agreement between Seller and such Servicer, which opinion is acceptable to Agent, and (C) has been approved as a Servicer by the Agent in its sole discretion, and (iv) any successor servicer appointed by Agent in accordance with the terms of this Agreement.

“Servicer Notice” means that certain (i) Servicer Notice, dated as of March 3, 2014, by Seller and Guarantor to Ocwen Loan Servicing, LLC or (ii) Servicer Notice, dated as of October 16, 2014, by Seller and Guarantor to PennyMac Loan Services, LLC, as the case may be.

(b) Section 2 of the Agreement is hereby amended by adding the following defined terms:

“Deutsche Bank Custodial Agreement” means that certain Custodial Agreement, dated as of October 16, 2014 among Seller, Purchaser, Agent and Deutsche Bank National Trust Company, entered into in connection with this Agreement, as the same may be amended, modified or supplemented from time to time.

“Wells Fargo Custodial Agreement” means that certain Custodial Agreement, dated as of March 3, 2014 among Seller, Purchaser, Agent and Wells Fargo Bank, N.A., entered into in connection with this Agreement, as the same may be amended, modified or supplemented from time to time.

(c) Section 2 of the Agreement is hereby amended by deleting the final sentence of the initial paragraph of the definition of “Eligible Servicer” and replacing it with the following:

Ocwen Loan Servicing, LLC and PennyMac Loan Services, LLC shall each be deemed an Eligible Servicer.

(d) Section 2 of the Agreement is hereby amended by adding the following paragraph to the definition of “Eligible Servicer”:

For purposes of this definition, a “Change of Control” shall occur as to PennyMac Loan Services, LLC (“PennyMac”) if (a) any transaction or event as a result of which PennyMac Mortgage Investment Trust ceases to own, beneficially or of record, more than 50% of the stock of PennyMac, (b) the sale, transfer, or other disposition of all or substantially all of PennyMac’s assets (excluding any such action taken in connection with any routine sales of Mortgage Loans), or (c) the consummation of a merger or consolidation of PennyMac with or into another entity or any other corporate reorganization, if more than 50% of the combined voting power of the continuing or surviving entity’s equity outstanding immediately after such merger, consolidation or such other reorganization is owned by persons who were not equityholders of PennyMac immediately prior to such merger, consolidation or other reorganization.

(e) Section 10(b)(i) of the Agreement is hereby amended by deleting clause (F) and replacing it with the following:

(F) Such other certifications of Custodian as are required under the Custodial Agreement;

(f) Section 14(i) of the Agreement is hereby amended by adding a new clause (xi) to read as follows:

(xi) (A) any material modification, amendment or waiver of the Mortgage Loan Purchase Agreement or (B) any termination of the Mortgage Loan Purchase Agreement.

(g) Section 14 of the Agreement is hereby amended by adding a new clause (bb) to read as follows:

(bb) Seller will not issue a new series of certificates under the Declaration of Trust, which series is related to FHA Buyout Loans for which the Purchaser’s FHA claim number is to be used, unless it obtains the prior written consent of the Agent, which consent may be withheld or granted in the Agent’s sole discretion.

(h) The first sentence of Section 14(t) of the Agreement is hereby amended by deleting the phrase “Notwithstanding anything to the contrary set forth” and replacing it with “Unless otherwise set forth”.

(i) Section 16(a)(i) of the Agreement is hereby amended by deleting the first sentence thereof and replacing it with the following:

Unless otherwise set forth in the Mortgage Loan Purchase Agreement, with respect to each Transaction, upon payment of the Purchase Price, the Purchaser shall own the Servicing Rights related to the applicable Purchased Assets including the related Mortgage File. Seller and Purchaser agree and acknowledges that such Purchased Assets sold hereunder shall be sold to Purchaser on a servicing released basis, and that Purchaser is engaging and hereby does engage the Servicer to provide subservicing of each Mortgage Loan for the benefit of Purchaser.

(j) Section 16(g) of the Agreement is hereby amended by deleting clause (i) and replacing it with the following:

(g) FHA Buyout Loans. Seller and Guarantor shall cause the Servicer to complete the U.S. Department of Housing and Urban Development’s form for Single-Family Application for Insurance Benefits in Sutton’s name and shall cause FHA to pay claims on such FHA Buyout Loan to the Purchaser, including by ensuring that Box 12 of the form provides “Sutton Funding LLC” and Box 16 provides “02-0765121”; provided that claim payments on loans that are not subject to this Agreement shall not be made to the Purchaser.

(k) Section 21(a) of the Agreement is hereby amended by deleting the first instance of “each Indemnified Party” in such subsection and replacing it with “each of Purchaser, Agent and their affiliates and their respective officers, directors, employees, agents and advisors (each, an “Indemnified Party”).”

(l) Section 34 of the Agreement is hereby amended by deleting the Barclays notice addresses and replacing them with the following:

if to Agent:

Barclays Bank PLC – Mortgage Finance

745 Seventh Avenue, 4th Floor

New York, New York 10019

Attention: Ellen Kiernan

Telephone: (212) 412-7990

Facsimile: (212) 412-7333

E-mail: ellen.kiernan@barclays.com

With copies to:

Barclays Bank PLC – Legal Department

745 Seventh Avenue, 20th Floor

New York, New York 10019

Telephone: (212) 412-1494

Facsimile: (212) 412-1288

Barclays Capital – Operations

1301 Sixth Avenue, 8th Floor

New York, New York 10019

Attention: Hánsel Nieves

Telephone: (212) 320-7370

Facsimile: (646) 845-6464

Email: hansel.nieves@barclayscapital.com

if to Purchaser:

Sutton Funding LLC

2711 Centreville Road, Suite 400

Wilmington, Delaware 19808

With copies to:

Barclays Bank PLC – Mortgage Finance

745 Seventh Avenue, 4th Floor

New York, New York 10019

Attention: Ellen Kiernan

Telephone: (212) 412-7990

Facsimile: (212) 412-7333

E-mail: ellen.kiernan@barclays.com

Barclays Bank PLC – Legal Department

745 Seventh Avenue, 20th Floor

New York, New York 10019

Telephone: (212) 412-1494

Facsimile: (212) 412-1288

Barclays Capital – Operations

1301 Sixth Avenue, 8th Floor

New York, New York 10019

Attention: Hánsel Nieves

Telephone: (212) 320-7370

Facsimile: (646) 845-6464

Email: hansel.nieves@barclayscapital.com

(m) Exhibit B of the Repurchase Agreement is hereby amended by deleting clause (q) in its entirety and replacing it with the following:

(q) Such Mortgage Loan has not been released from the possession of the Custodian under (i) Section 5 of the Wells Fargo Custodial Agreement to Seller for a period in excess of fifteen (15) calendar days (or if such fifteenth day is not a Business Day, the next succeeding Business Day) or (ii) Section 5 of the Deutsche Bank Custodial Agreement to Seller for a period in excess of thirty (30) calendar days, or such earlier time period as indicated on the related Request for Release of Documents, unless such Mortgage Loan has been released pursuant to an Attorney Bailee Letter (as defined in the Custodial Agreement);

(n) Exhibit B of the Repurchase Agreement is hereby amended by deleting clause (s) in its entirety and replacing it with the following:

(s) [Reserved.]

(o) Exhibit B of the Repurchase Agreement is hereby amended by deleting clause (aa) in its entirety and replacing it with the following:

(aa) Except to the extent required in states with post-foreclosure sale redemption periods, the Mortgage Loan has not been converted to an ownership interest in real property through foreclosure or deed-in-lieu of foreclosure;

(p) The parties hereto hereby agree to any additional conforming changes required to incorporate Sutton as Purchaser.

Section 3. Conditions to Effectiveness of this Amendment. This Amendment shall become effective on the day (the “Amendment Effective Date”) when the latest of the following shall occur:

(a)the payment by Seller of all accrued and unpaid fees and expenses owed to Barclays in accordance with the Program Documents, in immediately available funds, and without deduction, set-off or counterclaim;

(b)the authorization, execution and delivery of this Amendment by all of the parties hereto;

(c)the delivery of duly executed opinions (or opinion reliance letters) of Seller’s and Guarantor’s counsel as to such matters as Agent may reasonably request;

(d)the completion and filing of Uniform Commercial Code financing statement amendments acceptable to Agent;

(e)the maintenance by the Servicer of the Collection Account for the sole and exclusive benefit of Sutton;

(f)the completion by the Servicer, with respect to each FHA Buyout Loan, of the U.S. Department of Housing and Urban Development’s form for Single-Family Application as indicated in Section 2(i) of this Amendment; and

(g)the completion of any other documents reasonably requested by Agent.

Section 4. Effect of Amendment. Except as expressly amended and modified by this Amendment, all provisions of the Agreement shall remain in full force and effect and all such provisions shall apply equally to the terms and conditions set forth herein. After this Amendment becomes effective, all references in the Agreement (or in any other document relating to the Mortgage Loans) to “this Agreement,” “hereof,” “herein” or words of similar effect referring to such Agreement shall be deemed to be references to such Agreement as amended by this Amendment. This Amendment shall not be deemed to expressly or impliedly waive, amend or supplement any provision of the Agreement other than as set forth herein.

Section 5. Successors and Assigns. This Amendment shall be binding upon the parties hereto and their respective successors and assigns.

Section 6. Section Headings. The various headings and sub-headings of this Amendment are inserted for convenience only and shall not affect the meaning or interpretation of this Amendment or the Agreement or any provision hereof or thereof.

Section 7. Representations and Warranties. In order to induce Barclays and Sutton to execute and deliver this Amendment, the Seller hereby represents and warrants to Barclays and Sutton that as of the date hereof and as of the Amendment Effective Date (i) it is in full compliance with all of the terms and conditions of the Program Documents and remains bound by the terms thereof and (ii) no Default or Event of Default has occurred (with the exception of each previously waived occurrence in relation to Section 16(g) of the Agreement) and is continuing under the Program Documents.

Section 8. GOVERNING LAW. THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS EXCEPT SECTIONS 5-1401 AND 5-1402 OF NEW YORK GENERAL OBLIGATIONS LAW, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

Section 9. Counterparts. This Amendment may be executed in one or more counterparts and by the different parties hereto on separate counterparts, including without limitation counterparts transmitted by facsimile, each of which, when so executed, shall be deemed to be an original and such counterparts, together, shall constitute one and the same agreement.

Section 10. Trustee Limitation of Liability. It is expressly understood and agreed by the parties hereto that (a) this Amendment is executed and delivered by Wilmington Savings Fund Society, FSB, d/b/a Christiana Trust, not individually or personally but solely as the trustee for the Seller, in the exercise of the powers and authority conferred and vested in it, (b) the representations, undertakings and agreements herein or in any other agreement related hereto, as applicable, made on the part of the Seller are made and intended not as personal representations, undertakings and agreements by Wilmington Savings Fund Society, FSB, d/b/a Christiana Trust but are made and intended for the purpose of binding only the Seller, (c) nothing herein contained or in any other agreement related hereto shall be construed as creating any liability on Wilmington Savings Fund Society, FSB, d/b/a Christiana Trust, individually or personally, to perform any covenant either expressed or implied contained herein or therein, as applicable, all such liability, if any, being expressly waived by the parties who are signatories to this Amendment and any other related agreement and by any person claiming by, through or under such parties and (d) under no circumstances shall Wilmington Savings Fund Society, FSB, d/b/a Christiana Trust be personally liable for the payment of any indebtedness or expenses of the Seller or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Seller under this Amendment and any other agreement related hereto.

IN WITNESS WHEREOF, each undersigned party has caused this Amendment No. 2 to the Master Repurchase Agreement to be duly executed by one of its officers thereunto duly authorized as of the date and year first above written.

HLSS MORTGAGE MASTER TRUST, as Seller

By: Wilmington Savings Fund Society, FSB, d/b/a Christiana Trust, not in its individual capacity but solely as trustee of Seller

By:

Name:

Title:

HOME LOAN SERVICING SOLUTIONS, LTD., as Guarantor

By:

Name:

Title:

BARCLAYS BANK PLC, as Purchaser and Agent

By:

Name:

Title:

Acknowledged and Agreed:

SUTTON FUNDING LLC,

By:

Name:

Title:



FOR IMMEDIATE RELEASE		FOR FURTHER INFORMATION CONTACT:

		James E. Lauter
		Senior Vice President &
		Chief Financial Officer
		T: +1 345-815-9902
		E: James.Lauter@hlss.com

Home Loan Servicing Solutions, Ltd. Reports EPS of $0.69 and Net Income of $49.2 Million in the Third Quarter of 2014 and Declares Monthly Dividend of $0.18 per Share

George Town, Grand Cayman, October 16, 2014 (GLOBE NEWSWIRE) – Home Loan Servicing Solutions, Ltd. ("HLSS," “our,” “we” or the "Company") (NASDAQ: HLSS) today reported net income of $49.2 million, or $0.69 per ordinary share, for the third quarter of 2014. Additionally, the Company’s Board of Directors today declared monthly dividends of $0.18 per ordinary share for October, November and December 2014.

Third quarter business performance highlights:


•	Core earnings of $41.5 million, or $0.58 per ordinary share, after adjusting for the increase in the fair value of our MSR assets of $7.7 million, or $0.11 per ordinary share.


•	Acquired re-performing whole loans with an aggregate UPB of $92.9 million from a large bank. The purchase price for these loans was $67.6 million.

Subsequent to the end of the third quarter of 2014:


•	On October 16, 2014, acquired Ginnie Mae early buyout loans with an aggregate UPB of $142.5 million from PennyMac Loan Services, LLC, an indirect subsidiary of PennyMac Financial Services, Inc., who will remain as servicer for these loans.


•	On October 16, 2014, declared monthly dividends of $0.18 per ordinary share for each of the months of October, November and December 2014.

“HLSS completed another quarter with core results in line with guidance,” said Chairman William Erbey. “These strong results fully supported the recent dividend increase to 18 cents per month, which is a cumulative increase of 80% since the company’s inception in 2012.”

“Our new EBO and RPL assets continued to perform as we expected in the third quarter,” said President and CEO John Van Vlack. “We are pleased to be expanding our investment in FHA-insured Ginnie Mae EBO loans in the fourth quarter and to have started a new servicing relationship with PennyMac.”

For more information on prior releases and SEC Filings, please refer to the “Shareholders” section of our website at www.hlss.com.

HLSS is an internally-managed owner of residential mortgage assets with historically stable valuations and cash flows. HLSS’ largest asset is mortgage servicing advances that, along with the related servicing rights, are over-collateralized more than 25 times by the underlying residential real estate. HLSS' objective is to generate stable, recurring fee-based core earnings and dividends throughout the economic cycle. For more information, visit www.hlss.com.

This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included in this press release, including, without limitation, statements we make about our business model, dividend, future earnings, asset performance, asset valuation, business strategy, counterparty relationships and expectations and objectives for our future performance, are forward-looking statements. These forward-looking statements include declarations regarding our management's beliefs and current expectations. All forward-looking statements are subject to certain risks, uncertainties and assumptions. If one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect, our actual results, performance or achievements could differ materially from those expressed in, or implied by, any such forward-looking statements. Important factors that could cause or contribute to such difference include those risks specific to our business detailed within our reports and filings with the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2013 (the "2013 Form 10-K") as amended by our Amendment No.1 to the 2013 Form 10-K, filed with the SEC on August 18, 2014 (the "Form 10-K/A") and our Quarterly Report on Form 10-Q for the quarter ended September 30, 2014 (the "Q3 Form 10-Q") filed with the SEC. You should not place undue reliance on such forward-looking statements, which speak only as of their dates. We undertake no obligation to update or revise forward-looking statements, whether as a result of new information, future events or otherwise. You should carefully consider the risk factors described under the heading "Risk Factors" within our Form 10-K/A and our Q3 Form 10-Q.

The following table presents our consolidated results of operations in accordance with U.S. GAAP (“GAAP”) reconciled to our internally reported financial results. Accordingly, adjustments are made to reflect Servicing fee revenue, Servicing expense, Amortization and Change in fair value of Notes receivable – Rights to MSRs on a gross rather than a net basis.

Our income from operations as presented in our Management Reporting format shown below should be considered in addition to, and not as a substitute for, income from operations determined in accordance with GAAP.



For the three months ended September 30, 2014:	Condensed Consolidated Results (GAAP)		Adjustments			Management Reporting (Non-GAAP)

Revenue
Servicing fee revenue	$	—	$	177,113		$	177,113
Interest income - notes receivable – Rights to MSRs	84,850		(84,850		)	—
Interest income – other	12,118		—			12,118
Related party revenue (1)	320		—			320
Total revenue	97,288		92,263			189,551

Operating expenses
Compensation and benefits	1,722		—			1,722
Servicing expense	—		83,634			83,634
Amortization of Notes receivable – Rights to MSRs (2)	—		16,303			16,303
Change in fair value of Notes receivable – Rights to MSRs (3)	—		(7,674		)	(7,674		)
Related party expenses (4)	390		—			390
General and administrative expenses	1,802		—			1,802
Total operating expenses	3,914		92,263			96,177

Income from operations	$	93,374	$	—		$	93,374


(1)	Revenue earned as part of our Professional Services Agreement with Ocwen Financial Corporation (together with its subsidiaries, collectively "Ocwen\").


(2)	Reduction in the value of the Notes receivable – Rights to MSRs based on the run-off of the portfolio.


(3)	At each reporting date, we determine the fair value of our Notes receivable – Rights to MSRs and adjust the carrying value to this amount.


(4)	Expenses incurred as a part of our Professional Services Agreement and Administrative Services agreement with Ocwen and Altisource Portfolio Solutions, S.A., respectively.

HOME LOAN SERVICING SOLUTIONS, LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except share data)

(UNAUDITED)



	Three months				Nine months
For the periods ended September 30,	2014		2013		2014		2013
Revenue
Interest income – notes receivable – Rights to MSRs	$	84,850	$	78,447	$	273,962	$	192,106
Interest income – other	12,118		697		22,869		896
Total interest income	96,968		79,144		296,831		193,002
Related party revenue	320		491		1,721		1,458
Total revenue	97,288		79,635		298,552		194,460

Operating expenses
Compensation and benefits	1,722		2,109		5,146		4,877
Related party expenses	390		228		1,258		680
General and administrative expenses	1,802		1,275		6,242		2,654
Total operating expenses	3,914		3,612		12,646		8,211

Income from operations	93,374		76,023		285,906		186,249

Other expense
Interest expense	44,146		36,080		121,658		74,356
Other expense	44,146		36,080		121,658		74,356

Income before income taxes	49,228		39,943		164,248		111,893
Income tax expense	14		777		14		816
Net income	$	49,214	$	39,166	$	164,234	$	111,077

Earnings per share
Basic	$	0.69	$	0.55	$	2.31	$	1.80

Diluted	$	0.69	$	0.55	$	2.31	$	1.80

Weighted average ordinary shares outstanding
Basic	71,016,771		71,016,771		71,016,771		61,812,369
Diluted	71,018,542		71,016,771		71,016,771		61,812,369

Dividends declared per share	$	0.52	$	0.45	$	1.45	$	1.25

HOME LOAN SERVICING SOLUTIONS, LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except share data)

(UNAUDITED)



	September 30, 2014		December 31, 2013
Assets
Cash and cash equivalents	$	130,160	$	87,896
Match funded advances	6,100,277		6,387,781
Notes receivable – Rights to MSRs	618,962		633,769
Loans held for investment	832,413		—
Related party receivables	26,223		70,049
Deferred tax assets	1,024		1,024
Other assets	243,286		130,153
Total assets	$	7,952,345	$	7,310,672

Liabilities and Equity
Liabilities
Match funded liabilities	$	5,545,636	$	5,715,622
Other borrowings	1,093,837		343,386
Dividends payable	12,783		10,653
Income taxes payable	426		682
Deferred tax liabilities	1,189		1,266
Related party payables	8,517		10,732
Other liabilities	12,685		11,884
Total liabilities	6,675,073		6,094,225

Equity
Equity – Ordinary shares, $.01 par value; 200,000,000 shares authorized; 71,016,771 and 71,016,771 shares issued and outstanding at September 30, 2014 and December 31, 2013, respectively	710		710
Additional paid-in capital	1,210,207		1,210,057
Retained earnings	64,773		3,513
Accumulated other comprehensive income, net of tax	1,582		2,167
Total equity	1,277,272		1,216,447
Total liabilities and equity	$	7,952,345	$	7,310,672