Mr Cooper Group Inc (COOP)

[CBA09]

Ref: We KNOW or feel that there are still liquid assets(MORTGAGES)that are being serviced and creating income,so that income imho will be used to pay prefferds their diviy and may as well pay commons an annual divy until all have closed out.

100 % spot on!

The nature of securitization makes is abundantly clear the Lion's Share of Revenue is over it's amortized life. While the originator WMB would only book a gain it's generally the Financial Holding Company (FHC)- WMI having contractual rights collecting "Ongoing" Revenue / equity from undistributed income from within these SPE/Trusts.


Example:

1) WMB, in a true sales accounting, would sell pools of loan receivables to a SPE #1. Hence book a gain ( difference from loan receivables vs. cash proceeds from SPE # #1, then

2) SPE# 1 transfers the pools of loan receivables to (SPE#2 / Trust). A trust having legal ownership and control helps to solidity / make untouchable ( bankruptcy remote ) the pooled receivables. Trusts issues certificates to investors in exchange for cash. This cash is then transferred back to SPE #1 and subsequently from SPE # 1 to WMB. Hence were the gain WMB would booked from a true accounting sale.

I want to make it clear that FHC's are the Gem of conglomerates. They usually collect the revenue and disperse their non participation revenue portions according to percentages within formal agreements.

Revenue comes in many forms but the bulk of a FHC's profit comes from non bank subsidiaries, (i.e., SPE / Trusts - securitizations.)

WMI was a monster securitization machine. So see what WMI may have been making based on Peer comparison. The net income of Financial Holding Companies would be @ 7% - 8% of respective avg equity capital. So if WMI had an average equity capital of 25 Billion the yearly net income would be 1.75 Billion based on 7%.

For those interested one can go to:

https://www.ffiec.gov/nicpubweb/nicweb/FinancialReport.aspx?parID_RSSD=3828036&parDT=20170630&parRptType=BHCPR&redirectPage=FinancialReport.aspx