Replies to post #460263 on Mr Cooper Group Inc (COOP)

[etzetrade]

If FDIC holds our assets, can we claim back since she is released?

[chimaster]

Preferrd not capped... Does anyone happen to have the link..?

[DocKB]

Jimmy C -- If you're off by 90%, and about $ 27 billion gets distributed, I'll be a happy guy !!!

[Bill48]

Very well put together "WWhatthe" and well though out! Thanks!!

[W3Research]

WWT, Very Interesting Post, just one question, why was the Cap on Preferred Stock, WAMPQ and WAMKQ now represented by Escrow Share Markers removed? Personally, I think these Escrow Share Marker Holders are the party to receive the vast majority of the spoils. Your opinion?

There has to be a good reason why they wanted that Cap removed even if at one time there was some minor verbage about a 100% payoff limit.

[yes9]

Thanks bro, this is intense info!!!

[BBANBOB]

Well constructed post...

Now if your theory or "WELL THAT'S MY GUESS" is right , WOW would that be a strange turn of events..........Commons making out better than prefd's in a BK WOW AGAIN...... Since one needs to remember prefds if you will are for the most part considered FUNDERS OF A CORP, and treated preferentially/special........

Now since WE KNOW FOR FACT that DIPS/debtors in possession held MANY MANY PREFDS when this went down,some of which were even forced to relinquish a lot of those shares they had acquired(DURING THE BK PROCESS) to attempt to get even more of the spoils, I truly find it HARD TO BELIEVE they will go down getting LESS than common would get in such a scenario as this, since they tried their dead level best to get it all, and wipe us off the charts...........Remember too, much like myself holding ONLY PREFDS when this went down, in comparison commons would make out far better than I would if your correct,and SO WOULD THE BIG BOYZ get far less if you are correct.. THEY AINT STUPID!

I don't see DA BOYZ allowing common equity or AVG JOE SIX PACK to come out of this better than they do.........

Just my .02 worth

[nosch]

Ww you did a great explanation! Thank you a lot for your efforts and detailed informations!

[wowalters]

WOW great post. The only thing I believe you missed is interest on the $299B from September 2008.

[AaronTrainer]

Wow, makes me wish i owned some commons instead of just preferreds

[tzebedee]

Thankyou sir! Let's hear the math for commons on this?! Momma

[wildboarhog0]

The economy would crash again

[BBANBOB]

I for one just don't see this happening at all!
THE DIPS held primarily PREFDS, and agreeing to such no matter if COLORABLE INSIDER TRADING WAS FOUND,imho they would not stand for it for one minute and certainly wouldn't have agreed to such....

As a prefrd holder they hold few common markers..............even though the money they would receive from their prefrd markers would be LARGE VERY LARGE,I just can fathom them even entertaining

Only IMHO such an agreement

[xoom]

Awesome post except for the capping part . I think the pref/common split was 75/25 . But overall a good post . Thank you :-)

[Myplace]

Whatthe ???

Quote:
And let’s say $300,000 in future payments are pledged to MBS Investors.
The MBS Investors paid $300,000 to the Holding co./Bank for the Future Payments or income stream from the mortgage. This creates an obligation to the MBS Investors and is over seen by Deutsche Bank as Trustee… Which is… When the Future Payments come in from the homeowner, they are to go to the appropriate MBS Investor…So in a way, the MBS Investors own this part of the Mortgage or 30%…

“Book Value ignores anything that can’t be Sold”…Book Value would be…
$1,000,000 - $200,000 (Home Owner’s Equity) - $300,000 (Pledged Payments) Which Equals $500,000 or 50%…
So the inquiring investor /JPMC would Pay $500,000 or (50%) and Assume the Obligation to the MBS Investors…

JPMC did not pay for the 30% part of the Mortgage that the MBS Investors own… Its this 30% part of the Mortgage or the $300,000 in future Pledged payments from the homeowner, that will go to pay the MBS Investors…

JPMC as Servicer will process the payments and charge a fee…They will Also Take their 50% part of the mortgage and create their own Mortgage Backed Securities and sell them to new MBS Investors…This will allow them to recoup their $500,000 and start the process all over again. All so they can charge more fees.

We can see that the MBS Investors paid $300,000 to the Holding Co. /Bank (WAMU ESTATE) for the Future Mortgage Payments… So they’re entitled to $300,000 from the Mortgage income stream or Homeowners Payments… The MBS Investors do not own the Mortgage. The Mortgage was Sold to the inquiring investor/JPMC at Book value, $500,000, and the inquiring investor/JPMC Assumed the Financial Obligation /Liability to the MBS Investors…at Book Value $300,000…


Sounds like he keeps repeating, investors put up 300K for a 300K return OVERTIME . I thought it was just a typo, but he keeps reiterating same number.

[W3Research]

WWT, How about Escrow Share Marker Par of $1000 and $25 plus the Interest etc for all those years we waited? Could you please add that into your equation? I, and I'm sure other people here, would be most interested. Thanks!

[distrojunky]

Jiminy Christmas - Thanks for your efforts. I especially liked the estimates of the assets. I do think the APR was removed though. In either case we should do well.

distro.

[Large Green]

wwhatthe, the (APR) Absolute Priority Rule was removed which is very rare in bankruptcy cases. Thank you for your contribution as I know many here were pleased to see your response. Please read the excellent explanation from AZCowboy.
__________________________________________________

I know that particular reasoning, has been bandied about by a few, however ... That is actually Not' the true and factual information regarding this issue' ... or, the actual reason why Absolute Priority was able to, not only be disregarded, but also why Absolute Priority was able to be negotiated to the simultaneous percentage distributions we all have witnessed' and read about with the Confirmed Plan' ~ the 75% / 25% equal distributions to the class 19's and the class 22's

Quote:
The removal of the face cap on prefs was one of the quid pro quos that enabled commons to avoid being killed by absolute priority.


Let me explain,

Federal Bankruptcy Rule, 1129(b) ~ Does NOT under any circumstance, allow for the removal of the Absolute Priority Rule within any Plan of Reorganization with one exception ... I'll continue ...

Absolute Priority MUST remain intact as dictated within 1129(b) if all participants, The Sitting Judge, The Debtor Representation, and all subsequent class participants within the individual class designations, agree' that the Bankruptcy was filed ~ true to form ~ and that ~ the liabilities exceeded assets ~ and that in no participants view, would it be possible for returning assets and or cash as possible returns to the "Original Debtors Estate" ... be in a position to reach all remaining and participating classes ... in this example, Absolute Priority ... CAN NOT be adjusted' or disregarded'

Simply Put; ... Absolute Priority MUST be adhered to under all circumstances as mandated by Federal Rule 1129(b) ... if it is obvious to all', that there just isn't enough of anything' left within the estate to satisfy all impaired parties' ...

However, ... there is a seldom used exception to Rule 1129(b) which allows for the legal elimination of APR, ... (seldom used for obvious reasons, as most estates actually file for BK due the fact of their insolvency) ... it has a reference to what is called a "reverse cramdown" ...

The exercised exception to Federal Bankruptcy Rule 1129(b) is allowed and the elimination of Absolute Priority can be legally considered within a Plan of Reorganization, ... if it becomes obvious to all participants, ... again, the Judge, The Debtors Representation, Class Participants, etc ... ~ In our case, one must also include the Federal Judge that oversaw' the mediation within this group ... continuing,

The exception to Federal Rule 1129(b) is allowed, only' when all participants agree that, not only is it probable, but also quite possible that the Original Debtors Estate will be in a position to "satisfy" and "financially beyond satisfy" all class participants ... through to and including the equity classes'

None of our' Plan of Reorganization Participants broke any Federal Guidline' what so ever' ... They simply exersized the Rule 1129(b) exception to the rule, with their acknowledgement of the massive amounts which would be made available to the Original Debtors Estate ~ future tense' ...

That' is the actual and true reasoning of the ~ How and Why ~ the Absolute Priority Rule was able to eliminated in a legal fashion and our ending result achieved' ...

AZ

[follow_me]

Although I agree with 99% of what you stated. I completely disagree with commons receiving the bulk of the recovery, not when preferred are above commons in the tranche ratio. Besides, that would be a case of putting the wagon before the horse so to speak. Remember, there is NO CAP on Preferreds which means, that you can throw that $25 and $1000 dollar face value out of the window for P's and K's.

However, commons are capped. This was determined by the judge years ago in the POR.

Nevertheless, great dissecting nonetheless.

[CBA09]

wwhatthe - You can't be serious!

Your Quote:
I believe it’s the Common Shareholder who will walk away with all the spoils…

$279.6 Billion Dollars


Banks, unlike most entities are measured by deposits vs. assets. Deposits are the "Life Blood" of banks. Deposits come in many forms, such as Time Deposits, Demand Deposits, and even Fed Funds if necessary. Banking is all about asset / liability management. Therefore banks must keep percentage of loans to deposits at a safe percentage. Generally no more than 85 %. If this gap gets higher than Fed Funds are obtained.

Now to book value:

Banks and Savings and Loans are different animals vs non bank / s & l. Here book value is would really be misleading as deposits are the measurement of such entities. Remember deposits are liabilities from which loans are created and the underpinning of such assets. Thus liabilities are to me subtracted. So with banks and s & l we would used "Net Book Value" - Assets less Liabilities.

Net Book Value was @ 28 billion June 2008 as follows -

As of June 30, 2008, Washington Mutual Bank had total assets of US$307 billion, with 2,239 retail branch offices operating in 15 states, with 4,932 ATMs, and 43,198 employees. It held liabilities in the form of deposits of $188.3 billion, and owed $82.9 billion to the Federal Home Loan Bank, and had subordinated debt of $7.8 billion.


I too want to see a great return for all here that have been hurt but lets keep it real!

[vstienda]

I found this in my Ballot packet sent to me by TD Ameritrade back in 2012. From the "Communication To Members of Class 19" booklet. Page 2 third paragraph.

The Plan Contemplates The Diversion of Significant Value Away From Class 19
A remarkable feature of the revised Plan is its contemplated diversion of value away from structurally-senior preferred equity's liquidation preferences have been satisfied. More specifically, the plan contemplates a value split of 70% to preferred equity(class 19) and 30% to common equity(classes 21 and 22) with respect to:(a)the stock of the "reorganized" debtors;and (b) remaining assets.including, inter alia, recoveries on significant claims against third parties potentially bearing responsibility for the Debtors' collapse and bankruptcy filing (e.g., investment banks,ratings agencies,accountants,auditors and other professionals(together, the "Third Party Litigation Targets")).

I don't know if this has been posted before.

[hotmeat]

There is not $200+ Billion coming back. That's not a realistic figure and as for the pref's only receiving face value, that's another fallacy.

The original 75/25 split governs all distributions ie shares or cash that are distributed to escrows. According to the plan, the only distributions available, were completed with the shares of the reorganized debtor.

Using this logic, if only $7.5 billion comes back to escrows, then only pref's would be made whole (no interest paid) since there would be nothing to distribute to commons.

Is this what is being advocated?

[fredmiller1999]

100% agree

[W3Research]

WWT, Does anyone here think this theory of Common Shares getting the Lion's Share of the $299 Billion is correct. Or, do you, as I do, think that all Escrow Share Marker Holders will share this large amount 75/25.
75% goes to Preferred.
25% goes to Commons.
Opinions?

[chaarles]

IMO this is not correct:
------------
It states that the FDIC-Corporate currently has $299 Billion Dollars in WAMU Assets.
----------------

It's a footnote of a graph named: Disposition of assets at receivership inception from 2008 to 2015.
And it just mention that in that graph the 299 billion of Wamu assets are excluded.
I can't find a statement saying that the FDIC-C is holding 299 billion in Wamu assets as of 2015.

This is the report:

https://www.fdic.gov/about/strategic/corporate/cfo_report_3rdqtr_15/0915_CFO_Report.pdf

Thanks for your work

[pm1012244448]

It is time we hear from wwhatthe again.