Mr Cooper Group Inc (COOP)

[Kymmer]

From Etrade Pro: WSJ BLOG Deal Journal Ex-CEO Lawsuit


Recently I was informed that the Federal Deposit Insurance Corporation (FDIC)
has filed a civil lawsuit against me and other former officers at WaMu. This
action runs counter to the facts about my relatively short time at the company.
It is also unfair and an abuse of power. I believe this may be a way for the
FDIC to collect a payout from insurers who provided officers and directors
liability coverage for the time they worked at WaMu.

I am writing to ensure that you hear first-and directly-from me about the
facts of this matter.

As you might imagine, I am angered at this abuse of power by the FDIC. More
than anything, I am angered that my wife and children may be subjected to the
public attention this lawsuit may generate, even if it is for a short period of
time. And, of course, I am angered that my good name, built over a career of
three decades, is at risk as a result of this callous action.

While I have remained quiet about my time at WaMu since it was seized in
2008, I feel compelled to respond in the face of this unwarranted action.

Today I issued the following statement:

......................

"It is almost beyond belief that the FDIC would take action against an
effective, hard working bank manager who performed well under extraordinary
conditions in an effort to save an important financial institution. The FDIC's
2½ year investigation of WaMu lacks credibility and is unfair, since it
has flatly refused Mr. Rotella's offer to meet, answer their questions, and
explain his role as Chief Operating Officer at the company. Furthermore, it is
patently unfair for the FDIC to expect an individual to have perfect foresight
into a crisis that the FDIC itself did not see coming. Despite clear evidence
of significant improvements during Mr. Rotella's three-plus years at WaMu, the
FDIC now seems to claim that Mr. Rotella's efforts were not enough, even though
its own examiners actively participated in the oversight of WaMu, rating the
bank Satisfactory or better until the middle of 2008, just months before it
seized the bank.

"This continues a pattern of inequitable treatment of WaMu's shareholders,
creditors and employees. To this day, the seizure of WaMu in 2008, which was
called a "mistake" by a senior Treasury official, destroyed billions in
shareholder value and cost many thousands their jobs, remains controversial. It
was doubly so since, within days, the federal government handed out billions of
taxpayer dollars to save a select group of chosen financial institutions. This
stands in stark contrast to the fact that no taxpayer dollars were used at
WaMu. In fact, the FDIC will actually receive nearly two billion dollars of
proceeds as a result of their decision.

"Over the course of its investigation the FDIC has had more than ample time
to conduct a proper and complete investigation of both WaMu and its own actions
under duress. Any fair minded person would agree that during its lengthy
investigation the FDIC should have interviewed Mr. Rotella. Had the agency done
so, it would better understand that Mr. Rotella expressly joined WaMu in 2005
to help fix serious and deep-rooted problems that predated his arrival. In the
face of significant organizational challenges and the worst financial crisis in
a generation, Mr. Rotella made significant progress in dealing with the issues
he was hired to address. By the end of his three-plus years as Chief Operating
Officer, the company had substantially reduced mortgage volumes and risk, begun
to diversify the business mix, raised capital, and improved its efficiency.

"The agency's actions today should be deeply troubling to all thoughtful
Americans."

..................

My parents, God bless them both, now at or near 90 years old, brought me up
in a humble, but honorable environment. My father, a blue collar worker and my
mother a homemaker, taught me to work hard and play by the rules. I have always
done my best to do just that and have said many times that what I have achieved
in life was an example of what can only happen in America. They also instilled
in me a fierce sense of fairness and right and wrong. This action by the FDIC
betrays any sense of common decency or fairness.

Should there be any doubt that I and other responsible managers at WaMu were
taking the appropriate steps to correct the course of the company, the charts
attached to this note will demonstrate how substantially we had changed the
direction of the company's mortgage business, the area the FDIC focused on
during its investigation. As John Adams once said, "Facts are stubborn things."

To this day, I believe that if WaMu had been treated in the same way as other
large financial institutions by the FDIC, it would have turned a corner-and be
providing valuable financial products and services to consumers, employing
thousands of people who lost their jobs, and delivering returns to creditors
and shareholders alike, who needlessly lost their investments.

Please feel free to contact me if you would like to know more.

Steve


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03-17-11 1539ET

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15:39 031711