AZ, if CIC has happened has of Dec 31 as you suspect, shouldnt there be a required announcent by WMILT? Also, wouldnt there have been a filing objecting the employee claims based on the new CIC status on Jan 5th?

AZ, hypothetically, what do you think would have happened if there were no employee claims and WMILT was able to pay off PIERS two years ago before Globic was settled? Would WMILT have been legally required to disclose the remote bankruptcy safe harbored assets? If not, they wouldnt have any excuse to keep the bankruptcy going. I suppose that could be their original intent in using employees as pawns to delay until Globic was solved...

But my fear is, like you say, a lot of the trusts require 90% payoff before they are allowed to be liquidated. What if safe harbor applies until all the various SPVs are 90% paid off?

Could this take a few more years? or do you think all of the SPVs have met their liquidation requirementa as of late last year amd hence the estate moving up the employee claims by 6 months?

AZ, it is very possible that our safe harbored SPVs may have been more valuable in runoff mode vs early liquidation a few years ago. Perhaps, the hedgies know this and is why they are keeping their mouths shut all these years and not yelling bloody murder with the endless delays.

Well, they actually filed a lawsuit against the government for AIG under uncomstitutional taking and won. Like wise, they could file a similar lawsuit plus against JPM for fraudulant collusion. All I'm saying is I've seen many class action lawsuits under much less infringement grounds. Why nothing for us?

I think its a good sign there hasnt been any class action lawsuits filed by abulance chasers...It means POR7 may turn put to be a windfall in the end. Ofcourse, its very difficult for us to keep the faith under after all these years but lets not loose our cool until after PIERS are paid off and wait a month or two after to see what happens next

Why hasnt any equity class action lawsuits been brought upon FDIC, JPM, or WMILT with regards to POR 7 since 2012? There are plenty of ambulance chasing law firms out there that would sue on behalf of shareholders for much less injustice...

Either..

1) Shareholders really didnt suffer any injustice and the whole wamu takeover was justified...

or

2) Some law firms did look into POR7 and found that we will all get a windfall at some point.

I just dont believe therw hasnt been any lawfirms that hasnt looked into bringing class action against the estate, Rosen, JPM, or FDIC..


Why no PR announcement for class action since 2012??

Dmd, my assumption was same as yours but the language of the CIC condition got me confused -- especially about the bit thats said CIC will happen upon complete sale of WMI assets. It didnt say WMB

AZ, does the CIC event mean JPM is going to buy all of WMI retained interests in the various SPVs? I dont get that one. Wouldnt the SPV interests flow back directly to WMI? What does the following quote mean by "sale of all or substantially all of WMI assets"?

Per SPV securatization rules, WMB as the originator of the loans cannot own any of the securaties. Thats the securatization rule that allows the originating bank to push off the assets off its balance sheet and separate the credit risk of the loans from the bank..hence securitizing it.

So any retained interests in these securatized loans must be held by WMI or its subsidiaries.

The only question is what percentage of interest in these securatized loans protected by safe harbor is retained by WMI and what percentage us owned by other investors.

Well, we do know from the last 2007 WMI 10k that it earns about $9B a year from interest profits. So I will leave the speculative imagination to you.

IMO, Dr. A with his $86B estimate in court is based on the retained interest in these securatized loans by WMI.

IMO JPM is not going to pay 1 cent more for WMB. If we have any hope of large recoveries for escrow it must come from the retain interests of these securatized loans by WMI protected by safe harbor rules...which could not have been owned by WMB because they were the originating bank..not allowed to own...only servicing allowed.. ownership must be done by a separate entity. WMI or its subsidiaries

Sorry, who is the FRB judge?

WMI definitely retained some percentage of interest in all the loans that WMB originated and securatized over the years. It operated as a savings and loan so the bulk of its income came from interest in performing loans it held.

Per SPV securatization rules, WMB as the originator cannot hold interests in these securatized loans if it separate the assets from its balance sheet liability and make them "off" balance sheet. So any retained interests in these securatised loans must be purchased and retained by the parent WMI or its subsidiaries.

I have no doubt we (WMI) own the retained interests in the loans that WMB securatised over the years as WMB wasnt allowed to hold them as the originating bank.

The biggest proof of this is the 2014 JPM 10k stating the $151B WMB assets they were holding off balance. This is exactly how the originating bank that is servicing the securatised loans would report securatised loans in SPVs.

The only question I have is why the long wait? Most of the WMI creditors have been paid off. only about $50M left for PIERS. why not release the funds last year?

AZ, I understand the argument of waiting for the last creditor class of WMI to be addressed but they are only owed about $50M. Thats not much of an exposure of potential clawback claims from WMI "creditors" so why would DB need to wait?

I agree with you that once the Judge Mary aprroves the final payoff to PIERS, there should not be any legal hurdles left for safe harbor assets distribution...but I just dont understand the last year of wait in 2018. Seems like there was only about $50M in potential clawback liability. Why not start the distribution last year after the probate ended?

Thanks AZ. What is your theory on why the trustee hasnt distributed anything to class 17 all these years? If the underlying assets are in SPVs and are protected under safe harbor from FDIC and WMI creditors, shouldnt the trustee be free to distribute to the beneficiaries? still dont understand how DB can be discharged from probate for over a year now and the beneficiaries still hasnt seen a dime... If the trustee is not accountable for distribution who is?

Maybe WMILT got words of FDIC-R LIBOR lawsuits coming to a settlement and thats why they pushed up employee claims 6 months early. Either way I agree with you this will end really quick once rhe judge approves last payment to PIERS. I cant imagine the bankruptcy not closing for years just waiting on class 18 employee claims for the remaining $11M attorney fee claims.

Question is can the bankruptcy close out before FDIC-R closes out the Wamu receivership. I dont think so. So I also expect to hear an announcement for Libor settlements from FDIC shortly.

I have a new theory on why escrow money has been delayed all these years...WMILT and FDIC-R are trying to outwait one another. Here's my theory.

1) Escrow money is locked up in the SPVs. WMI retaining percentage in loan assets that have been shielded by safe harbor. We know WMB(now JPM) was the originator and servicer of these loans and there was at least $151B of these loans as stated in 2014 JPM 10k as off balance sheet.

2) FDIC-R owes $13B to WMB creditors (class 17) but they only have $1.9B from sale of WMB but they dont have access to the SPVs (safe harbored protected) that WMB originated and is servicing but no longer owns it.

3) However, WMI parent corp owns a percentage of these SPVs and perhaps FDIC-R has plans for clawbacks to use these funds to pay off class 17.

4) The trustees and WMI estate knows this so they delay paying off the last creditor class of WMI, PIERS, so that it can continue to shield its retained assets of the SPVs from FDIC-R potential clawbacks to pay off class 17 which they are reponsible for.. Simply put, the estate is trying to wait out the FDIC-R to close the receivership so when escrow money comes out of safe harbor protection, it wont be under threat of FDIC-R clawback attempts..whether these clawback claims are legal or not, it could potentially tie up the returning assets in court if such attempt happens..

5) likewise, FDIC-R is aware of the delaying tactic by WMILT in paying off the last creditor class PIERS so they are also playing a similar strategy by delaying the closure of the WMB receivership with these LIBOR lawsuit cases against all these banks...which may take years to complete.

6) My theory could be wrong and class 17 bondholders are actually also beneficiaries of the SPV trusts that are protected by safe harbor. Maybe they are junior beneficiaries and hence that is why they havent seen any distribution yet...

Just a theory.

ItsMyOption, the $151B off balance assets stated in JPM 2014 10k proves that there are at least that much loans left in safe harbor as of 2014 that WMB originated. That is the definition of how safe harbor works. WMB orignated loans, placed them into SPV (ABS trusts) to separate the assets from WMB balance sheets and hence provide safe harbor protection if the bank were to be taken over. WMB as the originator of SPV then simply acts as servicer of these assets. They are legally separated and the SPV is controlled by independent trustees.

1) The big question for us is how much of those SPV assets in safe harbor were bought and retained by the parent holding company WMI and its subsidiaries.

2) Yes, techincally, FDIC is not "holding" the assets in safe harbor. Safe Harbor is just a protection status applied to those off balance sheet assets that WMB (now JPM) originated and is now servicing. So techincally, the safe hatbored assets are under the control of the trustees of the SPV and all safe harbor means is FDIC cannot touch those assets to satisfy creditors of WMB (so maybe Class 17 cannot be paid from these assets??)

3) That still leaves the question of when the trustees of those safe harbored SPV are required to distribute the portion retained by WMI and its subsidiaries. Perhaps the trustees have been distributing but escrow holders cant see them because bankruptcy rules allows these distributions to also be held off balance to the estate until such time that Trance 4 is paid???

There must be a legal framework for disclosing bankruptcy remote assets. I'm not exactly sure what the timeline for that disclosure is but it is a logical assumption that there is a timeline to disclosure and it is not indefinite.

Otherwise, there is no legal frame work for bankruptcy remote assets. The trustee can simply rob the trust without anyone ever knowing if they are "never ever" required to disclose those assets. I dont think such indefinte non-disclosure statutes can exist. It makes no sense and would not have ever passed any sort of legislative panel.


So the question is, "when can we petition the court for disclosure of bankruptcy remote assets?". After Tranche 4 is paid off? after class 17 is paid off? after FDIC-R closes? This would be the question someone should ask a bankruptcy attorney.

There must be a point in the bankruptcy timeline where the court can no longer legally ignore bankruptcy remote assets and must comply with our disclosure request. The question is when?

I understand that. But lets say Tranche 4 is completely paid off tomorrow. Then we petition Judge Walrath, "Your Honor, can you please direct WMILT to now disclose our assets in these bankruptcy remote trusts that have been safe harbored?"...and you dont think the Judge will have that power to disclose even after Tranche 4 has been paid off...then how will we ever know who has our bankruptcy remote assets? The trustee can simply hold on to tge liquidated cash until all the beneficiares die and then claim it for themself in lost and found. What authority will prevent that if Judge Walrath will never have the power to force disclosure?

So what authority would prevent the trustee from holding the assets indefinitely?

Johnny, what I understood about FDIC Safe Harbor is a prequalification process that approves certain loans packaged by the bank to operate in runoff mode in case of a bank seizure..so that it wont be under threat of untimely forced liquidation by the bankruptcy courts.

What is not clear to me is if assets in Safe Harbor are under the control of FDIC or under the control of the orginal trustees of the asset trusts.


If Safe Harbor is nothing but a prequalification status of these asset trusts then FDIC technically do not control any assets in "Safe Harbor" trusts due to WMB receivership.

The "Safe Harbor" assets are continually controlled by their original trustees pre bank receivership..The safe harbor status simply allows the trustee to continually operate the trusts in safe harbor stealth mode until they are required to distribute at the end of safe harbor protection status.


The multi-billion dollar question is what triggers the end of safe harbor status...and is WMILT required to file a disclosure statement spelling out what triggers end of safe harbor status or is FDIC-C or FDIC-R responsible for that declaration?

AZ, do you know at what point we can petition the court to legally disclose bankruptcy remote assets? Can we file a petition to Judge Walrath to force WMILT to disclose bankruptcy remote assets after PIERS are paid off?

ItsMyOption, could you please reply to his email and ask if FDIC-C or FDIC-R is holding any assets in Safe Harbor as a result of Wamu bank receivershiop. Second, do any of these assets belong to the parent WMI corporation directly or indirectly through any of its subsidiaries that were not taken over as part of WMB receivership?


Lastly, also ask him, if either FDIC-C or FDIC-R held any assets in safe harbor after WMB takeover date but has since been liquidated and is no longer in FDIC-C or FDIC-R posession and/or control.

Thanks for updating us, LP

I hope you are right because I have also accumulated a large holding of Coop amd I've also foolishly recommended a few friends since 2015 to have also accumulated a large holding. I will be eating a lot of crow if Coop doesnt pay out.

However, that does not mean my fear is of safe harbor assets mostly been liquidated into cash is not unwarranted...especially after 10 years. especially with the price tanking since 2016 failed merger...and especially with David Tepper having dumped half is WMIH holding.

Maybe KKR is just mainly staying in and teying to maximize their recovery on their $600M investment.

I hope I am wrong and that there will be a large pop in Coop shares above $36 after safe harbor assets get released. A lot of my friends bought WMIH in between $2 and $3 when we thought merger/end of safe harbor was eminent back in 2015/2016 time frame.

W3, I've always estimated the liquidation value of safe harbor assets will be around $80B. My estimation is $50B min, $100B max. $80B most likely. This is based on the last 2007 Wamu 10k filing on their loan portofolio profit margin...which is about $9B a yearas I recall. So if you count in some discount to non performing loans, early payoff/refinance, etc... $80B is reasonable.

My initial estimation was $145B max theoretical 100% profitability on the portfolio. But you'll need to add some discounting in liquidation. So hence I came uo with $80B...which also happens to closely match Dr. A's $87B estimation in court testimony.

So I think the most reasonable estimation is $50B min, $100B max.

I also think when safe harbor assets get released, we will find out that more than 99% has been liquidated and its mostly cash. There wont me much unliquidated assets left for Coop to take advantage of in some sort of deal with the estate. That's why I think WMIH share price had been sliding from $3 since 2016 failed merger and why Tepper sold out half of his WMIH holding that year. Insiders knew that the failed merger in 2016 meant that safe harbor assets will be mostly liquidated into cash by the time it comes out...and there wont be much unliquidated assets left for WMIH to take advantage of when its released.

ItsMyOption, you may have just stumbled on the employee claims legal strategy all along...

1) Employees knew that they had little chance in winning the case against FDIC's no parachute claim within the chapter 11 bankruptcy condition. That's why they never bothered to appeal in the two higher court cases.

2) By carving out a large claim reserve for employees, Rosen was able to give the excuse that there was not enough money to make the final pay off to Tranche 4 PIERS in the last few years...thereby also having the excuse to delay the release of safe harbor. This delay tactic must have been agreed upon with FDIC...I dont know why as I'm sure safe harbor assets had enough liquidation to pay off the deposit base a few years ago.

3) If employees are now able to convince the judge to reduce the claim reserve for them so that PIERS is paid out then they can continue their claim after safe harbor assets are released.

4) They will then try to appeal and argue that since there is so much money coming out of safe harbor, the bank was never in danger of insolvency, and that no parachute claim rules forced upon them by FDIC was unfair. Maybe in front of a sympathetic jury, they think they will have a better chance of winning this argument.

My only concern is will safe harbor assets distribution to escrow be held up until the employee claims are resoved even if PIERS has been fully paid off?

I dont think its a good sign if they reduce the reserve claim amount next week, payoff PIERS, but allow the employee claims to remain. This might imply longer delay for our distribution. Judge Mary really need to make a final decision on employee claims and not kick the can down the road further.

I agree with you sir. Everyone should be writing love letters to Judge Mary at this time. She is the only one standing between us getting robbed by FDIC and getting paid. I dont trust Mike Willingham or any of the hedgies holding escrow markers. It would seem that their interests are aligned with ours. But who knows...

What if FDIC/JPM made some sort of under the table deals with these individuals and quickly deep six this at the end of this. If safe harbor held $50B to $100B at this point, wouldnt it be cheaper for FDIC/JPM to pay Mike Willingham and gang $10B under the table and call it a day?

AZ, assuming that $1500 servicing fee is a monthly rate on remaining $4.5M loan balance, that comes out to about 0.4% annually. Which is on the high end of typical servicing fees being 0.25% to 0.5%.


Based on your one example of a trackable trust, I'm beginning to have the impression that they will run off all the remaining loans in safe harbor before releasing the money to escrow.

Are most of the other trackable trusts showing a similar 99% liquidated or paid off balances?

That is reinforcing my suspicion that the reason WMIH (now Coop) has been tanking since 2016 after the failed merger is because most of the loans in safe harbor has been liquidated and there is not much left for Coop/Wmih to do some sort of s4v deal to purchase the remaining loans....

What do you think of that suspicion? Maybe the 2016 WMIH failed merger has something to do with the remaining safe harbored loans and they were denied based in some "national security" excuse?.. and since then the stock price has been tanking because people on the inside knows that there wont be much left in unliquidated safe harbor assets by the time a final merger is allowed??

AZ, you meant 0.3% and 0.1% for the servicing fees right? Thats about $100M a year.

Thanks AZ, I figure if class 17 is still missing their $13B and they are not suing FDIC for illegal taking, we should all be allright. The whole non-disclosure nature of safe harbor is really nerve wrecking. I dont know how much more I can keep the faith just based on curcumstantial evidence. I really hope they start releasing something soon to class 17 to confirm our faith.

Happy New Year to you sir and thanks for helping us all keep the faith.

AZ, I thought you owned some class 17 WMB bonds? Have you received any sort of notice or statements for potential payment? Are you under the imoression that the larger holders of class 17 bonds have been receiving their monthly payments since last December?

They need to release safe harbor assets. Class 17 money is backed by the loans in safe harbor just like escrow.

Yes, but DB was the trustee. How can the trustee be released from probate without the beneficiaries receiving payment? Shouldnt the teustee make sure FDIC distributes?

What I dont understand is why class 17 hasnt sued DB? They finished their probate last year, JPM already got their $650M settlement immediately last year, and yet class 17 has not seen a single dime since end of DB probate in Dec 2017...Why hasnt anyone slapped a class action lawsuit on DB. Shouldnt the trustee be respinsible for distribution?

Could COOP/WMIH stock be tanking because the old estate loan portfolio in safe harbor is almost done with liquidation after 10 years...hence there is not much left for Coop to do some sort of deal to buy off the rest of the portfolio left in safe harbor? Maybe that's why WMIH shares have been tanking from $3 since the 2016 failed merger?? and maybe that's why Tepper sold almost half his WMIH stake back in 2016 also??

Maybe escrow holders (and potentially all non released shareholders) will be taken care off but the longer this takes, the less potential for COOP/WMIH to benefit from the resolution of safe harbor??

I'm starting to loose hope that we wont hear anything from WMILT with regards to settlement with employees, until closer to Feb 1st...at the next usual trust distribution date.

Really hoping we hear something on Monday but man...this sucks. They are a bunch of assholes for waiting until the last day of the year to announce if they do announce.

Muff, the check was from the result of some multi billion dollar settlement. Yes, I held Lehmq as well as some call options on the stock right before they filed for bankruptcy. I really thought lehman was going to survive and get bailed out going into that last weekend.

Dmd, dont get me wrong. Personally, I would benefit more if only the releasing escrow markers are entitled to the returning safe harbor assets. However, judging all the various theories or interpretations of POR7, I think the version presented by whatthe sounds the most reasonable and fair to everyone...including the mom and pop holders who failed to release before the share cancellation. So, since none of our theories would be proven right until we see the first dime from safe harbor, I choose to go with the theory presented by whatthe because its Christmas and if he is right, it will bring the most joy to everyone!

Merry Christmas!

Hundreds of billions is not probable but as I've stated before $60 to $100B is possible according to my estimate. I give an 80% chance on $60B.

I just had commons post bankruptcy and some call options right before.

LG, everyone has "theory" and interpretation of POR7. Until safe harbor returns, they are still theories. I just like whhatte's theory the best as it seems most reasonable and fair to everyone involved. Since the judge must have been aware of what could be behind the safe harbor curtain at the time of POR7, I would assume she would have pushed the most reasonable and fair judgement. She would have taken into consideration how mom and pop investors would not have been paying attentio. to the whole legal mess.

Otherwise, why approve an equity committtee in the first place?

ellejaye, I believe what he is saying is anyone on record holding old preferred and commons at the time of share cancellation in 2012 will get to split whatever returns from safe harbor. Escrow markers were only for distribution of WMIH shares in 2012. plus whatever shares left over in diaputed account.