Transactions With Related Parties

9 Months Ended

Sep. 30, 2011

Transactions With Related Parties [Abstract]

TRANSACTIONS WITH RELATED PARTIES

NOTE 2 — TRANSACTIONS WITH RELATED PARTIES

Ocwen remains our largest customer. Following the date of Separation, Ocwen is contractually obligated to purchase certain Mortgage Services and Technology Services from us under service agreements. These agreements extend for eight years from the Separation, subject to termination under certain provisions. Ocwen is not restricted from redeveloping these services. We settle amounts with Ocwen on a daily, weekly or monthly basis based upon the nature of the services and when the service is completed.

Ocwen, or services derived from Ocwen’s loan servicing portfolio, as a percentage of each of our segment revenues and as a percentage of consolidated revenues was as follows for the three and nine months ended September 30:

	Three Months Ended						Nine months Ended
	September 30,						September 30,
	2011			2010			2011			2010
Mortgage Services		71	%		70	%		73	%		73	%
Technology Services		38	%		36	%		38	%		36	%
Financial Services		<1	%		<1	%		<1	%		<1	%
Consolidated Revenue		58	%		51	%		57	%		50	%

We record revenues we earn from Ocwen under the various long-term servicing contracts at rates we believe to be market rates as they are consistent with one or more of the following: the fees we charge to other customers for comparable services; the rates Ocwen pays to other service providers; fees commensurate with market surveys prepared by unaffiliated firms; and prices charged by our competitors. As of January 1, 2011, we modified our pricing for IT Infrastructure Services within our Technology Services segment from a rate card model primarily based on headcount to a fully loaded costs plus mark-up methodology.

Transition Services

In connection with the Separation, Altisource and Ocwen entered into a Transition Services agreement under which services in such areas as human resources, vendor management, corporate services, six sigma, quality assurance, quantitative analytics, treasury, accounting, risk management, legal, strategic planning, compliance and other areas are provided to the counterparty for up to two years from the date of Separation. The agreement was subsequently extended in August 2011 for certain services for an additional year. For the nine months ended September 30, 2011 and 2010, Altisource billed Ocwen $1.7 million and $1.2 million respectively ($0.8 million and $0.5 million for the third quarter of 2011 and 2010, respectively), and Ocwen billed Altisource $1.4 million and $0.8 million respectively ($0.5 million and $0.2 million for the third quarter of 2011 and 2010, respectively) for services provided under this agreement. These amounts are reflected as a component of Selling, General and Administrative Expenses in the Condensed Consolidated Statements of Operations.