Mr Cooper Group Inc (COOP)

[boarddork]

WMI kept its $240Billion + mortgage portfolio in-house, sold to itself (subsidiaries, but part of WMIs consolidated financial's assets), and created further income off these 'held in portfolio' assets by pledging (not technically 'sold' thanks to good lawyering) these assets into trusts which generated income off the monthly mortgagees.....all without losing ownership of the underlying mortgage assets.


Step 1: This is a signed PSA showing how 'WMI consolidated' sold mortgage loan assets to itself, and the value of these assets remained in WMI's consolidated tax returns and SEC filings.........not sold to other investors in MBS pools (http://www.sec.gov/Archives/edgar/data/1317069/000127727705000807/mlpawaac.pdf), note the price confidentiality document at the end. Who knows what price they 'sold' the loans to themselves at........probably zero, otherwise you'd pay corporate income taxes. This was basically a way to quit claim a massive loan file to yourself.....

$278 Billion in mortgage assets on WMI's 2008 10-k can't be counted as 10-K 'assets' if another investor truly bought them!!! Pretty simple. WMI had in-house control of its mortgage portfolio, selling to itself, servicing for itself.



Step 2: WMIs consolidated subs, then take the in-house held originations, and pledge (not sell) them into REMIC Trusts with the stated intention of never delivering the underlying mortgage originations to the trust.

It sounds counter intuitive, but 'it is what it is'. The loans weren't "sold" as you think 'sold' means.................'Owned by investors' just means that there was collateral to protect their Investment Conduit investment (REMIC = Real Estate Mortgage Investment Trust) that could be substituted in when a loan was in default.... The 'Investment Conduit' remember, is just a purchased % of the monthly income as mortgagees pay their monthly bill.

The investors didn't buy the whole loan..............they are investment conduits exactly as the name implies. The many REMIC investor prospectus' AND the Bulk Loan Sale Purchase and Sale Agreements between WMI/WMB/WMBfsb not only confirm it, but state it upfront - no mortgage notes are delivered to investors and are held in-house by WMB/WMBfsb/WMI subsidiaries!! The investors knew what they were buying. And further, WMI's consolidated filings can't claim $240 Billion in mortgages held in portfolio AS ASSETS, if the underlying notes were SOLD and DELIVERED to investors.

And I can't stress it more, IMO the whole DB lawsuit is based on the fact that the WMB receivership 'interrupted' the ability for non-performing loans to get substituted with performing loans. And when non-performing loans are not swapped out for 7 years, there is definitely less monthly income to be made every month as people pay their mortgages. DB was forced to sue under worst case projections, from the mess Sheila Bair created.


Step 3: POR7/GSA only covered WMI assets in BK legally available to be covered (Hint = not all of them as some are in safe harbor and legal isolation). The examiners comment about excluded mortgages verifies one very large 'excluded area' (worth $278B in 2008 WMI 10-k). In the JPM PAA, assets within Assets .....not sold to JPM in the PAA (3.1,3.2), and kept in legal isolation/safe harbor in the FDIC receivership.


The balance of these mortgage assets within WMI Assets, will return to WMILT for the benefit of those who released, after any claims in the way are settled.


4 WAYS for Value to Return to those who Released:
If we come to find the mortgages are solely WMI's: $80B legacy WAMU - $5Billion-ish unvetted claims left on KCCLLC register = HUGE life changing event. or,
If we come to find the mortgages are solely WMB's: $80B legacy WAMU - $25Billion-ish unvetted claims left against WMB = Huge life changing event. or,
If we come to find the mortgages are solely WMBfsb's: $80B legacy WAMU - $25Billion-ish unvetted claims left against WMBfsb = Huge life changing event. or,
If we come to find the mortgages are solely a blend of WMI/WMB/WMBfsb's: $80B legacy WAMU - $25Billion-ish in unvetted claims left against WMI/WMB/WMBfsb = Huge life changing event.


*This doesn't include legacy WAMU HELOCS, 2nd Mortgages, or other performing loans alive and unliquidated that JPM is still servicing. $25-40B*