What changed in this filing

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Item 1. Business

2022-03-03 compared with 2021-03-11 · 50 added, 164 removed, 132 unchanged (62% of the section changed)

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We have prepared our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

This is the first Annual Report on Form 10-K we are filing as a smaller reporting company within the meaning of Rule 12b-2 under the Securities Exchange Act of 1934, as amended.

As a smaller reporting company, we may choose to comply with certain scaled or non-scaled financial and non-financial disclosure requirements on an item by item basis.

The Company operates with one reportable segment (total Company).

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Earlier Stage Business

• Pointillist ® customer journey analytics platform

• Pointillist ® customer journey analytics platform (sold on December 1, 2021, see Corporate and Financial Highlights for more detail)

• Commercial loan servicing technology

• Financial Services business, including post-charge-off consumer debt, mortgage charge-off collection services and customer relationship management services (sold on July 1, 2019)

• Buy-Renovate-Lease-Sell (“BRS”) business (wound down in 2019)

• Residential loan servicing technologies, document management platform and information technology infrastructure management services (wound down in 2019 following Ocwen Financial Corporation’s (together with its subsidiaries, “Ocwen”) transition to another servicing platform)

• Owners.com ® technology-enabled real estate brokerage and provider of related mortgage brokerage and title services (discontinued in the fourth quarter of 2019)

We classify revenue in three categories:

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In evaluating our performance, we focus on service revenue.

Service revenue consists of amounts attributable to our fee-based services and sales of short-term investments in real estate (wound down in 2019).

Service revenue consists of amounts attributable to our fee-based services.

Reimbursable expenses and non-controlling interests are pass-through items for which we earn no margin.

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Corporate and Financial

• Ended 2020 with $58.3 million of cash and cash equivalents

• Ended 2020 with $188.9 million of net debt

• Sold the Company’s remaining 3.5 million Front Yard Residential Corporation (“RESI”) shares for net proceeds of $46.6 million and used the net proceeds to repay a portion of our Senior Secured Term Loan

• Ended 2021 with $98.1 million of cash and cash equivalents, a 68% increase from December 31, 2020

• On December 1, 2021 Altisource sold all of its equity interest in Pointillist, Inc.

(“Pointillist”).

Altisource received approximately $106.0 million from the sale of its Pointillist equity and the collection of outstanding receivables, with $102.2 million received at closing, approximately $0.3 million deposited into the Working Capital Escrow and approximately $3.5 million deposited into the Indemnification Escrow.

We recognized a pre-tax and after-tax gain of $88.9 million from the sale

• The Company reduced 2021 cash operating costs (excluding outside fees and services) by $49.3 million, representing a 25% reduction from 2020

• The Company announced on July 29, 2021 that it was evaluating ways to enhance shareholder value with the Origination business, including the potential for a divestiture, joint venture, third party investment in or other strategic transaction.

Altisource recently concluded this process and, after exploring a range of alternatives, determined that it is in the best interests of the Company and its shareholders to retain and further invest in the business.

The Company believes that the Origination business’s unique distribution engine and strong growth prospects will be a significant catalyst to create value for shareholders

Business Highlights

• The Company’s 2020 financial performance was negatively impacted by:

◦ Temporary servicer and government COVID-19 related measures to provide financial support to borrowers (i.e., foreclosure and eviction moratoriums and borrower forbearance plans), partially offset by growth in our origination business

◦ One of Ocwen’s MSR investors directed it to transition field services, title and valuation referrals to that investor’s captive vendors;

we believe the transition of these referrals is largely complete

• Service revenue from customers other than Ocwen, New Residential Investment Corp.

(“NRZ”) and RESI grew by 9% in 2020 compared to 2019;

this reflects 47% growth from our origination business, excluding our construction risk mitigation business that was impacted by the pandemic, partially offset by the negative impact of COVID-19 on our default business

• The Company’s customer base continues to develop and grow increasing the potential backlog of default related business which we anticipate will begin to be available to us in 2022 when we forecast that the default market returns to a more normal operating environment

• The Company has a robust unweighted sales pipeline of approximately $220 million

• To address lower revenue in the default business, the Company aggressively reduced cash costs and simplified the organization;

cash costs (other than outside fees and services, severance and fourth quarter 2020 bonus accrual reversals) were $12 million lower in the fourth quarter 2020 compared to the fourth quarter 2019

• Hubzu referrals in 2021 were 30% higher than 2020, including a 62% increase in foreclosure referrals and a 6% decrease in REO referrals.

As of December 31, 2021 Hubzu inventory was over 6,300 homes, representing a 27% increase compared to December 31, 2020, including a 67% increase in foreclosure inventory and a 5% decrease in REO inventory

• Service revenue from our Origination business grew by 11% in 2021 to $58.0 million compared to 2020 and Lenders One membership grew by 13% to 251 members over the same period

• The Company launched a tri-merge credit report solution and other related products required to manufacture a loan which include verification of employment, income and assets and undisclosed debt notification

• The Company launched the Lenders One Loan Automation technology (“LOLA”).

LOLA is an internally developed technology solution designed to make it easier for Lenders One members to order and receive our solutions through a single point of entry and automate loan manufacturing processes to improve Lenders One members’ operational efficiency and reduce costs

• On May 5, 2021 Altisource entered into an agreement with Ocwen Financial Corporation (together with its subsidiaries, “Ocwen”) that extended the terms of certain services agreements from August 2025 through August 2030 and expanded the scope of solutions to include, among others, the opportunity for the Company to provide first and second chance foreclosure auctions on Federal Housing Administration (“FHA”) loans, field services on Ocwen’s FHA, Veterans Affairs and United States Department of Agriculture loans (collectively, “Government Loans”), and title services on FHA and Veterans Affairs loans, subject to a process to confirm Altisource’s ability to meet reasonable performance requirements

Our customers include large financial institutions, government-sponsored enterprises (“GSEs”), banks, asset managers, servicers, investors, originators and correspondent lenders and mortgage bankers.

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Revenue from Ocwen primarily consists of revenue earned from the loan portfolios serviced and subserviced by Ocwen when Ocwen engages us as the service provider, and revenue earned directly from Ocwen, pursuant to the Ocwen Services Agreements.

For the years ended December 31, 2020, 2019 and 2018, we recognized revenue from Ocwen of $197.8 million, $362.7 million and $437.4 million, respectively.

For the years ended December 31, 2021 and 2020, we recognized revenue from Ocwen of $55.6 million and $197.8 million, respectively.

Revenue from Ocwen as a percentage of consolidated revenue was 31% and 54% for the years ended December 31, 2021 and 2020, respectively.

We earn additional revenue related to the portfolios serviced and subserviced by Ocwen when a party other than Ocwen or the MSR owner selects Altisource as the service provider.

For the years ended December 31, 2020, 2019 and 2018, we recognized revenue of $23.8 million, $37.5 million and $47.1 million, respectively, related to the portfolios serviced by Ocwen when a party other than Ocwen or the MSR owner selected Altisource as the service provider.

For the years ended December 31, 2021 and 2020, we recognized $9.5 million and $23.8 million, respectively, of such revenue.

These amounts are not included in deriving revenue from Ocwen and revenue from Ocwen as a percentage of revenue discussed above.

In February 2019, Altisource and Ocwen entered into agreements that, among other things, facilitated Ocwen’s transition from REALServicing ® and related technologies to another mortgage servicing software platform, establish a process for Ocwen to review and approve the assignment of one or more of our agreements to potential buyers of Altisource’s business lines, requiring Ocwen to use Altisource as service provider for certain service referrals totaling an amount equal to 100% of the applicable service referrals on certain portfolios plus an amount equal to not less than 90% of applicable service referrals from certain other portfolios (determined on a service by service basis), subject to certain additional restrictions and limitations, and affirm Altisource’s role as a strategic service provider to Ocwen through August 2025.

In connection with these agreements, Altisource expressly preserved and did not waive any of its existing contractual rights relating to service referrals, other than with respect to Ocwen transitioning from the REALServicing and related technologies.

If Altisource fails certain performance standards for specified periods of time, then Ocwen may terminate Altisource as a provider for the applicable service(s), subject to certain limitations and Altisource’s right to cure.

Ocwen’s transition to another mortgage servicing platform was completed during 2019.

During the second quarter of 2020, Ocwen informed us that an MSR investor instructed Ocwen to use a field services provider other than Altisource on properties associated with certain MSRs.

Based upon the impacted portfolios to date and the designated service provider, Altisource believes that Ocwen received these directions from NRZ.

Based upon the impacted portfolios and the designated service provider, Altisource believes that Ocwen received these directions from New Residential Investment Corp.

(individually, together with one or more of its subsidiaries or one or more of its subsidiaries individually, “NRZ”).

We believe Ocwen commenced using another field services provider for these properties in July 2020 and continued to transition services during the third quarter of 2020.

We believe that the transition to the replacement field service provider was largely completed as of September 30, 2020.

We estimate that $70.1 million, $150.2 million and $171.0 million of service revenue from Ocwen for the years ended December 31, 2020, 2019 and 2018, respectively, was derived from Field Services referrals from the NRZ portfolios.

Ocwen also communicated to Altisource in the fourth quarter of 2020 that the same investor instructed Ocwen to

use a provider for default valuations and certain default title services other than Altisource on properties associated with such certain MSRs and commenced moving these referrals to other service providers in the fourth quarter of 2020.

We estimate that $0.5 million and $70.1 million of service revenue from Ocwen for the years ended December 31, 2021 and 2020, respectively, was derived from Field Services referrals from the NRZ portfolios.

Ocwen also communicated to Altisource in the fourth quarter of 2020 that the same investor instructed Ocwen to use a provider for default valuations and certain default title services other than Altisource on properties associated with such certain MSRs and

commenced moving these referrals to other service providers in the fourth quarter of 2020, with the bulk of such transition occurring during 2021.

We anticipate that the transition of such default valuations and title services will continue during the course of 2022.

We estimate that $18.2 million, $33.2 million and $40.1 million of service revenue from Ocwen for the years ended December 31, 2020, 2019 and 2018, respectively, was derived from default valuations and title services referrals from the NRZ portfolios.

Altisource believes that any action taken by Ocwen to redirect these service referrals breaches Altisource's agreement with Ocwen.

We are currently in discussions with Ocwen to address this matter, and have reserved all of our rights with respect to this matter.

To address the reduction in revenue, Altisource is undertaking several measures to further reduce its cost structure and strengthen its operations.

We estimate that $2.9 million and $18.2 million of service revenue from Ocwen for the years ended December 31, 2021 and 2020, respectively, was derived from default valuations and title services referrals from the NRZ portfolios.

To address the reduction in revenue, Altisource undertook several measures to further reduce its cost structure, strengthen its operations and generate cash.

On May 5, 2021 we entered into an agreement with Ocwen (the “Agreement”) pursuant to which the terms of certain services agreements between us and Ocwen were extended from August 2025 through August 2030 and the scope of solutions we provide to Ocwen was expanded to include, among other things, the opportunity for the Company to provide first and second chance foreclosure auctions on Government Loans, and title services on FHA and Veterans Affairs loans, subject to a process to confirm Altisource’s ability to meet reasonable performance requirements, which process is continuing.

The Agreement established a framework for us to expand the foreclosure trustee solutions we provide to Ocwen in additional states, and, as mutually agreed upon by the parties, to deliver reverse mortgage related solutions to Ocwen, subject to negotiation of appropriate statements of work or other agreements, a process to confirm Altisource’s ability to meet reasonable performance requirements, and technical integrations, as may be applicable.

The Agreement further resolved the contractual dispute between the parties related to Ocwen’s transfer to NRZ the rights to designate service providers other than Altisource, including mutual releases with respect to such dispute.

The Agreement also addressed Ocwen’s rights in the event of certain change of control or sale of a business transactions by us on or after September 1, 2028.

Since the date of the Agreement, Ocwen has transitioned over 2,300 of its foreclosure auction inventory on Government Loans to us and increased our percentage of field services referrals on its Government Loans.

As of December 31, 2021, accounts receivable from Ocwen totaled $3.0 million, $2.8 million of which was billed and $0.2 million of which was unbilled.

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Ocwen has disclosed that NRZ is its largest client.

As of December 31, 2020, NRZ MSRs or rights to MSRs relating to approximately 36% of loans serviced and subserviced by Ocwen (measured in unpaid principal balance (“UPB”)).

As of December 31, 2021 approximately 21% of loans serviced and subserviced by Ocwen (measured in unpaid principal balance (“UPB”)) were related to NRZ MSRs or rights to MSRs.

In July 2017 and January 2018, Ocwen and NRZ entered into a series of agreements pursuant to which the parties agreed, among other things, to undertake certain actions to facilitate the transfer from Ocwen to NRZ of Ocwen’s legal title to certain of its MSRs (the “Subject MSRs”) and under which Ocwen will subservice mortgage loans underlying the MSRs for an initial term of five years, subject to early termination rights.

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Termination events include, but are not limited to, a breach of the terms of the Brokerage Agreement (including, without limitation, the failure to meet performance standards and non-compliance with law in a material respect), the failure to maintain licenses which failure materially prevents performance of the contract, regulatory allegations of non-compliance resulting in an adversarial proceeding against NRZ, voluntary or involuntary bankruptcy, appointment of a receiver, disclosure in a Form 10-K or Form 10-Q that there is significant uncertainty about Altisource’s ability to continue as a going concern, failure to maintain a specified level of cash and an unapproved change of control.

For the years ended December 31, 2020, 2019 and 2018, we recognized revenue from NRZ of $8.6 million, $12.5 million and $28.7 million, respectively, under the Brokerage Agreement.

For the years ended December 31, 2020, 2019 and 2018, we recognized additional revenue of $35.1 million, $60.0 million and $83.6 million, respectively, relating to the Subject MSRs when a party other than NRZ selects Altisource as the service provider.

For the years ended December 31, 2021 and 2020, we recognized revenue from NRZ of $3.1 million and $8.6 million, respectively, under the Brokerage Agreement.

For the years ended December 31, 2021 and 2020, we recognized additional revenue of $13.6 million and $35.1 million, respectively, relating to the Subject MSRs when a party other than NRZ selects Altisource as the service provider.

Our services are provided to customers predominantly located in the United States.

Sales and Marketing

Our enterprise sales and marketing team has extensive relationship management and industry experience.

Our sales and marketing team has extensive relationship management and industry experience.

These individuals cultivate and maintain relationships throughout the industry sectors we serve.

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We rely on a combination of contractual restrictions, internal security practices, patents, trademarks and copyrights to establish and protect our trade secrets, intellectual property, software, technology and expertise.

We also own or, as necessary and appropriate, have obtained licenses from third parties to intellectual property relating to our services, processes and businesses.

We also own or, as we deem necessary and appropriate, have obtained licenses from third parties to intellectual property relating to our services, processes and businesses.

These intellectual property rights are important factors in the success of our businesses.

As of December 31, 2020, we have been awarded two patents that expire in 2023, one patent that expires in 2024, eight patents that expire in 2025, three patents that expire in 2026, two patents that expire in 2029, one patent that expires in 2030 and one patent that expires in 2036.

In addition, we have registered trademarks in a number of jurisdictions including the United States, the European Union (“EU”), India and nine other jurisdictions.

As of December 31, 2021, we have been awarded two patents that expire in 2023, one patent that expires in 2024, seven patents that expire in 2025, three patents that expire in 2026, one patent that expires in 2027, two patents that expire in 2029, one patent that expires in 2030 and one patent that expires in 2036.

In addition, we have registered trademarks in a number of jurisdictions including the United States, the European Union (“EU”), India and five other jurisdictions.

These trademarks generally can be renewed indefinitely, provided they are being used in commerce.

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We sell our suite of services to mortgage servicers, mortgage originators, GSEs, buyers and sellers of homes for investment use and financial services firms.

The mortgage and real estate markets are very large and are influenced by macroeconomic factors such as credit availability, interest rates, home prices, inflation, unemployment rates, consumer confidence and, in 2020, the global COVID-19 pandemic.

The markets to provide services for mortgage servicers and mortgage originators are highly competitive and generally consist of national companies, in-house providers and a large number of regional and local providers.

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We cannot determine our market share with certainty, but believe for mortgage servicers we have a modest share of the market, and for the others we have a relatively small market share.

Human Capital:

Every day at Altisource, our global team across four different continents works together to provide industry-leading services and solutions to our clients.

We consider our diverse workforce as a key differentiator for our business.

The following sections describe some of the key elements of one of our greatest assets, our human capital.

We function by a set of core values communicated to our employees by management and available on our website.

The following core values, which are regularly referenced in our employee communications, guide the conduct of Altisource and its employees:

• Act With Integrity - Exhibit unwavering integrity, compliance and ethical conduct at all times

• Energize People - Enable exceptional people to inspire their teams and drive results

• Empower Innovation - Reward the relentless creation of innovative and compliant solutions to achieve our mission and generate value for our customers

• Exceed Customer Expectations - Deliver best-in-class results and customer service

• Win as a Team - Embrace the passion, energy and power of our global teams to win as “One-Altisource”

• Enrich Communities - Create positive impacts for the communities where we live and serve

We adjusted our social and environmental engagement efforts in 2020 in response to the difficulties presented by COVID-19 pandemic.

We undertook many successful community support initiatives including our participation in the “National Wreaths Across America” and the “Toys for Tots” programs to give presents to children across the United States, food donations to soup kitchens in Uruguay and providing “Happiness Kits” to underprivileged children in India.

We also sought to play our part in addressing climate change.

During 2020, we continued with programs to reduce waste, and paper, energy and water consumption.

In 2021 we intend to continue to assess our real estate portfolio, telecommuting and transport programs to further reduce our impact on the environment, including as employees potentially return from remote work arrangements.

Workforce and Diversity

Given the nature of our business, our global workforce consists of various diverse talent groups.

The majority of our employees support our mortgage default-related and originations services.

We also have a significant number of technology employees developing and maintaining our technology enabled solutions.

In the United States, in addition to supporting operations, a number of our employees fill roles that require professional licenses and work in the product, sales and marketing, and corporate functions.

The India workforce primarily comprises the operations teams supporting operations, technology, and corporate functions, while Uruguay supports several of the corporate functions.

The executive management team is mostly based out of Luxembourg, our headquarters.

As of December 31, 2020, we employed 2,726 employees across four continents:

• North America, United States :

697 employees

◦ 50% female / 50% male

• Asia, India :

1,945 employees

◦ 30% female / 70% male

• South America, Uruguay :

◦ 69% female / 31% male

• Europe, Luxembourg :

◦ 40% female / 60% male

In the United States, 50% of the workforce self-identifies as members of an ethnic minority group.

We believe that our globally diverse, inclusive, and collaborative workforce makes us a more innovative and creative company.

We are an equal opportunity employer and prohibit any form of unlawful discrimination or harassment.

At Altisource, everyone is valued and appreciated for their distinct contributions to the growth and sustainability of our business.

Hiring Practices

At Altisource, we believe in hiring the best talent, empowering our people and encouraging them to deliver their best.

Globally our recruiting conversion rate (initial screening to hire) is approximately 5%.

Our hiring process comprises of a mix of assessments and interviews, which help us hire the best candidates who are likely to succeed in our organization.

In 2020, we added 922 talented professionals to our global workforce.

We also place a strong emphasis on internal development and promotion, as well as encouraging mobility within our internal talent.

In 2020, 27% of our open positions were filled internally.

We leverage social and networking platforms to identify and engage with key talent for critical and senior positions.

We use Altisource talent communities where we can engage inquiring candidates to share information about our Company and accept profiles for future opportunities.

For our entry level roles, where we hire in volumes, we often run campaigns on job portals,

engage with universities, use career-service platforms and host virtual or walk-in interviews.

We may adjust our talent acquisition strategies according to the cultural and social norms of the applicable geographies in which we operate.

People Practices

Our people practices aim to develop our workforce and retain high performers.

We maintain various touchpoints along the employee life cycle to support our employees and improve their experiences.

At an overall level in 2020, we successfully retained 72% of our workforce, which included the retention of 85% of employees deemed high performers.

However, our originations business witnessed significantly higher turnover in 2020 compared to the Companywide average, primarily driven by a highly competitive employment market for experienced originations professionals in the United States and India.

Our human resources team partnered with the business to implement measures designed to improve retention rates and develop a steady talent pipeline to meet business requirements for the origination businesses.

We also developed processes in 2020 to adapt to remote working arrangements, including efforts aimed at maintaining employee engagement.

We emphasized virtual engagement activities through the year, created virtual recognition forums for our employees and are currently working on further improving our employee experience in a remote environment.

We emphasize employee development and training.

Each of our employees invested on average 40 hours in training in 2020, generally including a mix of functional, compliance and behavioral learning programs.

We believe that our structured training programs help our employees to acquire and maintain the skills necessary to be effective in their roles.

A key focus area for 2021 is to help our employees to improve their work performance in a remote work environment.

We also conduct regular talent review and succession planning exercises that help us identify and develop key talent and to create plans to mitigate potential succession gaps.

In 2020, we conducted a detailed succession planning exercise covering several critical roles.

Compensation and Benefits

Our compensation practices strive to attract, retain, motivate, and reward employees to drive performance.

We generally position our compensation levels to the mid-point of the market;

however, we may adjust our compensation above the mid-point in response to applicable market conditions or to attract critical resources as may be needed.

In 2020, owing to high demand for residential mortgage originations skills, we implemented significant increases in compensation for origination roles in an effort to maintain market competitiveness.

Incentives are a key component of our compensation structure.

The incentive plans vary for different businesses and help us drive performance.

Our incentive structure primarily comprises of:

• Annual incentives for most of the employees in a managerial role, linked to tangible annual scorecards which are comprised of defined financial goals specific to the Company and/or their respective businesses as well as the employees’ individual performance against pre-established metrics

• Quarterly or annual incentive plan for our sales employees, linked to defined performance and long-term value add metrics

• Monthly or quarterly incentives for our associates in operations, mainly linked to defined production, productivity, quality and compliance metrics

Most of the employees in managerial roles receive a part of their annual incentive in Restricted Stock Units (“RSUs”).

The composition of the incentives is determined by the Compensation Committee of our Board of Directors, with the equity component generally constituting between 25% and 40% of the total value of the incentive, depending on the level of the employee, with the Compensation Committee retaining the discretion to increase the equity component up to 100% of the value of the incentive.

Employees at senior levels generally receive a larger portion of their incentives in equity.

We believe that this methodology helps align the interests of our management level employees with the interests of our shareholders on long term value creation.

Apart from our annual incentive plans, we also employ long-term incentive plans for certain senior executives.

Our long-term incentives are primarily comprised of:

• Service-based awards to encourage retention, linked to achieving minimum performance goals.

These awards generally vest over three to four year periods with vesting in equal annual installments.

• Performance-Based Awards .

These awards generally vest if certain specific financial measures are achieved;

generally one-third vests on each anniversary of the grant date or the awards cliff-vest on the third anniversary of the

The number of performance-based restricted shares and restricted share units that may vest will be based on the level of achievement, as specified in the award agreements.

If the performance criteria achieved is above certain financial performance levels, participants have the opportunity to vest in up to 150% of the restricted share unit award for certain awards.

If the performance criteria achieved is below a certain thresholds, the award is canceled.

• Performance-Based and Market-Based Awards .

These awards generally vest if certain specific financial measures are achieved and if certain specific market conditions are achieved (i.e., Total Shareholder Return (“TSR”) compared against the Russell 3000 stock market index).

If the performance criteria achieved is above certain financial performance levels and Altisource’s share performance is above certain established criteria, participants have the opportunity to vest in up to 300% of the restricted share unit award for certain awards.

If the performance criteria or the market criteria is below certain thresholds, the award is canceled.

We believe that the design of the performance-based award and market-based award, incentivizes the leadership team to focus on the long-term value creation for shareholders and other stakeholders.

Our employee benefit programs are customized for each geography.

We regularly benchmark our plans to remain competitive.

Impact of COVID-19 Pandemic

Employee health and well-being is critical for us and we are committed to supporting our employees through the COVID-19 pandemic.

As part of this support, we ensure our employees in the United States and India have health coverage to help address medical costs related to the treatment of COVID-19.

Our employees in other countries are covered by their local applicable social security or health programs.

We also provide time off to those employees who are diagnosed with the virus.

Driven by health considerations, as well as local regulations, we temporarily converted most of our workforce to remote out-of-office work arrangements beginning in March 2020.

As of December 31, 2020, most of our workforce continued to work remotely, except for a small number of employees who work at our facilities due to client requirements or other requirements related to their job duties.

To provide a safe working environment for our employees who continue to work from our facilities in the United States, we introduced safety measures in line with the United States Centers for Disease Control (CDC) and Prevention guidelines.

For our employees who continue to work from our facilities in India, we defined safety measures in line with the guidelines provided by the regulatory bodies of the central and state governments and the local municipal corporations.

We intend to continue reviewing our safety measures and recommendations from the relevant authorities as we consider the return of employees to our facilities.

We believe the remote workforce model has allowed us to continue operations without interruption or a significant impact to productivity.

We expect the current remote workforce model to continue for most employees until the threat of the COVID-19 pandemic is substantially reduced.

As the COVID-19 pandemic progresses, we will continue to assess its impact on our operations and may adjust our working model to respond to changing circumstances.

We undertook several workforce related initiatives in 2020 in response to declines in our default-related businesses as a result of the COVID-19 pandemic and one of the investors of our largest customer instructing our customer to redirect certain referral from us to the investor’s captive service provider.

These cost reduction measures included workforce reductions across our operations, employee furloughs and temporary compensation reductions for most of our United States and Luxembourg employees, senior management and independent directors.

As of December 31, 2020, our workforce was 17% lower than our workforce as of January 1, 2020.

Our workforce compensation was reinstated between June and October, with the compensation of senior management being reinstated in October.

The cash compensation of our independent directors remains reduced to 80% of the pre-reduction compensation.

We provided notice of further workforce reductions in February 2021 in response to certain measures and announcements from the federal government regarding the extension and expansion of the national foreclosure and eviction moratoriums, and the anticipated continued impact to our default related businesses.

This reduction will impact approximately 8% of our global workforce through the first two quarters of 2021.

As of December 31, 2021, we had the following number of employees:

United States India Uruguay Luxembourg Consolidated Altisource

Total employees 437 1,516 63 8 2,024

Certain of our revenues can be impacted by seasonality.

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Government Regulation

Our business and the business of our customers are or may be subject to extensive scrutiny and regulation by federal, state and local governmental authorities including the Federal Trade Commission (“FTC”), the Consumer Financial Protection Bureau (“CFPB”), the Securities and Exchange Commission (“SEC”), the Department of Housing and Urban Development (“HUD”), various federal and state banking, financial and consumer regulators and the state and local agencies that license or oversee certain of our auction, real estate brokerage, mortgage and debt collection services, trustee services, mortgage origination underwriter and broker services, property management services and insurance services.

Our business and the business of our customers are or may be subject to extensive scrutiny and regulation by federal, state and local governmental authorities including the Federal Trade Commission (“FTC”), the Consumer Financial Protection Bureau (“CFPB”), the Securities and Exchange Commission (“SEC”), the Department of Housing and Urban Development (“HUD”), the Treasury Department, various federal and state banking, financial and consumer regulators and the state and local agencies that license or oversee certain of our auction, real estate brokerage, mortgage and debt collection services, trustee services, mortgage origination underwriter and broker services, property management services, insurance services and credit report reselling services.

We also must comply with a number of federal, state and local laws, which may include, among others:

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• the Bank Secrecy Act;

• the California Consumer Privacy Act (“CCPA”);

• the California Homeowner Bill of Rights (“CHBR”);

• the California Privacy Rights Act;

• the Controlling the Assault of Non-Solicited Pornography And Marketing Act (“CAN-SPAM”);

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• Unfair, Deceptive or Abusive Acts and Practices statutes (“UDAAP”);

• Applicable state laws addressing consumer data privacy, use or disclosure.

We are also subject to the requirements of the Foreign Corrupt Practices Act (“FCPA”) and comparable foreign laws due to our activities in foreign jurisdictions.

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Title XIV of the Dodd-Frank Act contains the Mortgage Reform and Anti-Predatory Lending Act (“Mortgage Act”).

The Mortgage Act imposes a number of additional requirements on lenders and servicers of residential mortgage loans by amending and expanding certain existing regulations.

The Mortgage Act imposes a number of additional

requirements on lenders and servicers of residential mortgage loans by amending and expanding certain existing regulations.

The interpretation or enforcement by regulatory authorities of applicable laws and regulations also may change over time.

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The failure of our customers to properly identify or account for regulatory requirements applicable to such services could expose us to significant penalties, fines, settlements, costs and consent orders that could have an adverse effect on our financial condition or results of operations.

We may be subject to licensing and regulation as a provider of certain services including, among others, services as a mortgage origination underwriter, mortgage broker, valuation provider, appraisal management company, asset manager, property inspection and preservation provider, title insurance agent, insurance broker and underwriter, real estate broker, auctioneer and foreclosure trustee in a number of jurisdictions.

We are subject to licensing and regulation as a provider of certain services including, among others, services as a mortgage origination underwriter, mortgage broker, valuation provider, appraisal management company, asset manager, property inspection and preservation provider, title insurance agent, insurance broker and underwriter, real estate broker, auctioneer, foreclosure trustee and credit report reseller in a number of jurisdictions.

Our employees and subsidiaries may be required to be licensed by or registered with various jurisdictions for the particular type of service sold or provided and to participate in regular continuing education programs.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business