ALTISOURCE PORTFOLIO SOLUTIONS S.A.ASPS
ALTISOURCE PORTFOLIO SOLUTIONS S.A. Commitments Disclosure
COMMITMENTS, CONTINGENCIES AND REGULATORY MATTERS
We record a liability for contingencies if an unfavorable outcome is probable and the amount of loss can be reasonably estimated, including expected insurance coverage. For proceedings where the reasonable estimate of loss is a range, we record a best estimate of loss within the range.
Litigation
We are currently involved in legal actions in the course of our business, most of which seek monetary damages. Although the outcome of these proceedings cannot be predicted with certainty, we currently believe that their outcome, both individually and in the aggregate, other than as described below, will not have a material impact on our financial condition, results of operations or cash flows.
National Fair Housing Alliance v. Altisource Solutions, Inc., et al.
On or about February 1, 2018, the National Fair Housing Alliance (“NFHA”) and eighteen regional housing groups (collectively, the “Plaintiffs”) filed a civil complaint, subsequently amended, against Altisource Solutions, Inc. (“ASI”), a wholly owned subsidiary of the Company, Deutsche Bank National Trust, as Trustee, Deutsche Bank Trust Company Americas, as Trustee, and Ocwen Loan Servicing, LLC (n/k/a Onity Group, Inc.) (collectively, the “Defendants”) in the United States District Court for the Northern District of Illinois (the “Litigation”). The complaint alleged violations of the federal Fair Housing Act in connection with the maintenance and marketing of certain real estate owned properties.
On February 11, 2026, Defendants entered into a settlement agreement (the “Settlement Agreement”) with the Plaintiffs, providing for a full release of claims against the defendants and dismissal of the Litigation with prejudice. Altisource recorded a $7.5 million loss for the year ended December 31, 2025 reflecting the settlement and associated defense costs. The Settlement Agreement contains customary terms and conditions and does not include any admission of liability, fault or unlawful conduct by the defendants.
The Company expects to fund its portion of the settlement from available cash. The Company expects that a significant portion of the liability may be eligible for reimbursement under applicable insurance, subject to the terms and conditions of the applicable insurance policies. However, one insurer is disputing the extent of its available insurance coverage. There can be no assurance as to the timing or amount of any such reimbursement, if any.
Regulatory Matters
Periodically, we are subject to audits, examinations and investigations by governmental authorities and receive subpoenas, civil investigative demands or other requests for information from such governmental authorities in connection with their regulatory or investigative authority. We are currently responding to such inquiries from governmental authorities relating to certain aspects of our business. We believe it is premature to predict the potential outcome or to estimate any potential financial impact in connection with these inquiries.
Onity Related Matters
As discussed in Note 3, during the year ended December 31, 2025, Onity was our largest customer, accounting for 42% of our total revenue. Additionally, 5% of our revenue for the year ended December 31, 2025 was earned on the loan portfolios serviced by Onity, when a party other than Onity or the MSR owner selected Altisource as the service provider.
Onity has disclosed that it is subject to a number of ongoing federal and state regulatory examinations, consent orders, inquiries, subpoenas, civil investigative demands, requests for information and other actions and is subject to pending and threatened legal proceedings, some of which include claims against Onity for substantial monetary damages. Previous regulatory actions against Onity have subjected Onity to independent oversight of its operations and placed certain restrictions on its ability to acquire servicing rights or proceed with default-related actions on the loans it services. Existing or future similar matters could result in adverse regulatory or other actions against Onity. In addition to the above, Onity may become subject to future adverse regulatory or other actions.
Onity has disclosed that Rithm is one of its largest servicing clients. As of December 31, 2025, Onity reported that approximately 10% of loans serviced and subserviced by Onity (measured in UPB) and approximately 50% of all delinquent loans that Onity services were related to Rithm MSRs or rights to MSRs. In November 2025, Onity disclosed that it had received notification from Rithm that Rithm does not intend to renew its subservicing agreements with Onity effective January 31, 2026.
The termination of Onity’s subservicing agreements with Rithm may have significant adverse effects on Onity’s business. Additionally, Altisource’s revenue from Onity and Rithm (and revenue associated with the Rithm MSRs) will be reduced and our results of operations will be adversely affected by this termination.
The existence or outcome of Onity regulatory matters or Onity’s loss of significant clients may have significant adverse effects on Onity’s business. For example, Onity may be required to alter the way it conducts business, including the parties it contracts with for services, it may be required to seek changes to its existing pricing structure with us, it may lose its non-government-sponsored enterprise (“GSE”) servicing rights or subservicing arrangements or may lose one or more of its state servicing or origination licenses. Additional regulatory actions or adverse financial developments may impose additional restrictions on or require changes in Onity’s business that could require it to sell assets or change its business operations. Any or all of these effects and others could result in our eventual loss of Onity as a customer or a reduction in the number and/or volume of services it purchases from us or the loss of other customers.
If any of the following events occurred, Altisource’s revenue could be significantly reduced and our results of operations could be materially adversely affected, including from the possible impairment or write-off of goodwill, intangible assets, property and equipment, other assets and accounts receivable:
•Altisource loses Onity as a customer or there is a significant reduction in the volume of services it purchases from us
•Onity loses, sells or transfers a significant portion of its GSE or Federal Housing Administration servicing rights or subservicing arrangements or remaining other servicing rights or subservicing arrangements and Altisource fails to be retained as a service provider
•Onity loses state servicing licenses in states with a significant number of loans in Onity’s servicing portfolio
•Onity is subject to stays, moratoriums, suspensions or other restrictions that limit or delay default-related actions on the loans it services
•The contractual relationship between Onity and Altisource changes significantly or there are significant changes to our pricing to Onity for services from which we generate material revenue
•Altisource otherwise fails to be retained as a service provider.
The foregoing list is not intended to be exhaustive. Management cannot predict whether any of these events or other events will occur or the amount of any impact they may have on Altisource.
Leases
We lease certain premises and equipment, primarily consisting of office space. Certain of our leases include options to renew at our discretion or terminate leases early, and these options are considered in our determination of the expected lease term. Certain of our lease agreements include rental payments adjusted periodically for inflation. Our lease agreements generally do not contain any material residual value guarantees or material restrictive covenants. We sublease certain office space to third parties. Sublease income was $0.2 million and $0.6 million for the years ended December 31, 2025 and 2024, respectively. The amortization periods of right-of-use assets are generally limited by the expected lease term. Our leases generally have expected lease terms at adoption of to six years.
Information about our lease terms and our discount rate assumption were as follows as of December 31:
| 2025 | 2024 | |||||||||||||
| Weighted average remaining lease term (in years) | 1.41 | 1.87 | ||||||||||||
| Weighted average discount rate | 8.05 | % | 7.93 | % | ||||||||||
Our lease activity was as follows for the years ended December 31:
| (in thousands) | 2025 | 2024 | ||||||||||||
| Operating lease costs: | ||||||||||||||
| Selling, general and administrative expense | $ | 1,596 | $ | 1,747 | ||||||||||
| Cash used in operating activities for amounts included in the measurement of lease liabilities | $ | 1,655 | $ | 1,794 | ||||||||||
| Short-term (twelve months or less) lease costs | 93 | 20 | ||||||||||||
Maturities of our lease liabilities as of December 31, 2025 are as follows:
| (in thousands) | Operating lease obligations | |||||||
| 2026 | $ | 922 | ||||||
| 2027 | 178 | |||||||
| 2028 | 104 | |||||||
| 2029 | 52 | |||||||
| Total lease payments | 1,256 | |||||||
| Less: interest | (109) | |||||||
| Present value of lease liabilities | $ | 1,147 | ||||||
We have executed no standby letters of credit related to office leases that are secured by restricted cash balances.
Escrow and Other Balances
We hold customers’ assets in escrow and other accounts at various financial institutions pending completion of certain real estate activities and construction review activities. These amounts are held in escrow and other accounts for limited periods of time and are not included in the accompanying consolidated balance sheets. Amounts held in escrow and other accounts were $50.5 million and $20.4 million as of December 31, 2025 and 2024, respectively.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 4, 2026 | Showing above |
| 2024 | Mar 31, 2025 | |
| 2023 | Mar 7, 2024 | |
| 2022 | Mar 30, 2023 | |
| 2021 | Mar 3, 2022 | |
| 2020 | Mar 11, 2021 | |
| 2019 | Mar 5, 2020 | |
| 2018 | Feb 26, 2019 | |
| 2017 | Feb 22, 2018 | |
| 2016 | Feb 16, 2017 | |
| 2015 | Mar 15, 2016 | |
About Commitments Disclosures
Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.
Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.