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Ref: CBA09, are you optimistic that escrows will be rewarded nicely? Nicely, as in 3 to 4 bucks per escrows share or more.
Comment:
Waaay too little. Just ponder this; some of the "Shrewdest Investors" in the world have reserved a seat here and been here over nine years. Even before they were here I was thinking massive. There presence validates my opinion.
Ref: CBA09, are you optimistic that escrows will be rewarded well?
Comment:
On a scale of 1 to 10 and ten being the highest level - 10! I have too much experience within the banking industry and specifically Pooling and Serving Agreements (PSA) to believe otherwise.
Ref: Our interests are in what was OUTSIDE OF THE WMI BK CASE, not what was in it, now we'll be glad to take that as well, but the MONEY AINT IN WMI BK CASE, it's outside of it in our/my opinion.
Comment:
Yes exactly -- Outside, specifically bankruptcy remote assets. Those within SPE's classified as "True Sale" securitized assets.
Simply put, "Off Balance Sheet Assets" reflects assets that WMB gave up the legal ownership rights and complete control to SPE's which in turn is owned by WMI.
WMI being the parent, it is highly unlikely the court will dispute of the final ownership of retained assets to WMI. Just look at the Facts:
1) Off Balance sheet assets are removed from WMB. (Legal ownership given up)
2) Off Balance sheet assets initially transferred / sold to SPE # 1
3) Off Balance sheet assets subsequently transferred to SPE # 2 / Trust.
4) Neither SPE # 1 & # 2 are subsidiaries of WMB but rather WMI.
5) Generally SPE # 1 is the credit enhancer within SPE # 2. Thus SPE # 1 would have ownership in the form of subordinate tranches, namely called a equity ownership.
6) Both the SPE's # 1 & # 2 along with assets and income generated within are isolated from WMB.
Ref: SO will they just magically make the Escrows worth something then?
Comment:
Shrew professional investors here. Those initial & ensuing Hedge Funds did not invest and release on guess work. Rather a keen understanding of what assets and rights to assets that will prevail beyond the reaching powers of bankruptcy.
It seems many here are down to a glimmer of hope, from once having high hopes. I have been primarily silent. Why!?! No need to focus on the daily PPS. It is of no concern to me.
Do you believe these Hedge Funds & Institutional Investors are concerned with the the daily PPS? Of course not, they are inured to its daily movement and the postings on this Board.
Those who have their ticket punched, namely releases, take note that you are joined in the company of those in the know. Knowing the "Final Outcome."
Key here, I strongly contend, is outside the waterfall. So those assets shielded from the Trustee's reach as follows:
1) SPE / Trusts assets ( The parent is WMI )
2) Abandonment of Stock. ( As any future value goes to WMI and not included as an asset of the estate).
ReF: Well let me just say that we have a lot of big players involved, so If wmih cannot find a perfect fit, I think those players could make a perfect fit target by contributing some of their high income generating assets or high gain assets to a new corporation for stock and bring wmih under that umbrella to utilize the nols quicker and with greater certainty. Maybe wmih is getting some of those trust residuals . This might explain the three year time frame. Jmho
Comment:
WMIH most likely will be the acquirer. Reason, ownership change => 50% of the entity having the NOL's ( WMIH ) will trigger a limitation of eligible NOL's. In turn loss of value.
Key is to have unrestricted use in the $ 6 Billion NOL's. Thus a acquisition that is not defined as "Equity Exchange."
Preferred stock that is both:
1) No voting rights, and
2) No conversion to common stock.
Meets the qualification on "Non Equity Exchange."
Ref: Maybe wmih is getting some of those trust residuals . This might explain the three year time frame.
Comment:
Agree, those SPE / Trusts and captive "Retained Assets" have and will continue to out live the bankruptcy.
Ref: What agenda could the BOD have that would make them want to drop the share price?
Comment:
Greed! Executives / BOD, from my personal experience will do what they can, to control what they can, so as to personally profit. A lions share of compensation comes from stocks.
It's not uncommon to have Executives / BOD focus on their own personal prosperity.
Step 1 - Be able to accumulate more shares, PPS taking a nose dive.
Step 2 - Build Corp value, to this end PPS sling shot up.
My two cents, I see significant future value.
Ref: yes
and the value of the NOLS is directly dependent on the max corporate tax rate
a key reason for the decline to the 1.50 zone was the expectation of a drop from 35% to 15%
I feel comfortable - that whatever else was happening - that drop in PPS was directly related to lower dollar value of the NOLs as corporate rates to be sheltered from drop.
Comment:
Agree, NOL's being an asset has a "book value." That book value is directly related to % of Federal Corp Income Tax Rate. Market has reacted based on Trumps agenda to slash the current rate from 35 % to 15 %. Personally, I don't see it going lower than 25%. But, I am not the whole market.
Ref: Why the drop from 1.50 to below one dollar escapes me as it becomes clear the final top corporate rate will be 25% not 15% (which is 10 percentage points or 40% higher)
Why the drop recently ?
Comment:
Combination:
1) Negative market perception of the ability to pull off an acquisition,
2) MM manipulation and
3) BOD agenda.
Ref: Quote:
James Carreon testified before THJMW
when he worked for A&M, stating that the NOLs would dissipate with the return of the Capital Gains.
Commentary:
Yes, NOL's would dissipate, namely be offset, with the return of an equal amount of Capital Gains. If so, a good thing. As Income would be realized, (before offset of NOL's) to an amount equal or exceeding the $ 6 Billion NOL's.
NOL's are a value asset. Unused NOL, (amounts available after 2 yr carry back), can be carried forward 20 yrs.
Features:
1) Offset against any type of "Taxable Business Income", (capital gains, etc.,)
2) Extinguished If:
a) 20 year limit exceeded,
b) => 50 % merger, namely ownership change, can cause loss.
To avoid loss of NOL's a merger would be conducted without equity offering that would cause a ownership change. This would be by using preferred stock that has both:
1) NO voting rights,
2) NO conversion to common stock.
Conclusion:
NOL's are an attractive asset and a boost to cash flow. Each $ offset of Taxable Income protects the outflow of cash to the IRS.
Ref: We truly lost a GREAT REPRESENTATIVE IN DC when he retired.
Yes, and few have such integrity.
Ref: This is not over by a long shot and will be taken care of"
Thanks a million for sharing!
Ref: $ 615 Billion- The U.S. Senate Sub-Committee (Levin – Coburn Report) reveals in its findings of fact that WaMu sold and securitized at least $615B of residential mortgage loans through its subsidiaries “WaMu Asset Acceptance Corporation” and “Washington Mutual Mortgage Securities Corporation” who acted as “Depositors” in the securitization transactions.
Commentary:
Sold means $ 615 Billion removed from WMB balance sheet. Legal title transferred.
Ref: The U.S. Senate Sub-Committee (Levin – Coburn Report) reveals in its findings of fact that WaMu sold and securitized at least $615B of residential mortgage loans through its subsidiaries “WaMu Asset Acceptance Corporation” and “Washington Mutual Mortgage Securities Corporation” who acted as “Depositors” in the securitization transactions.
Commentary:
Trust Sales accounting solidified! Reason - Two Tier SPE Entities. First tier (i.e., Depositors - “WaMu Asset Acceptance Corporation” and “Washington Mutual Mortgage Securities Corporation), Second Tier issuing Trusts.
Conclusion:
$ 615 Billion were removed from the Balance Sheet of WMB in true sales. Neither WMB / JPM nor the FDIC receivership has any claim to these securitized Trust assets.
Further, revenue that has & continues to be generated remains captive within each respective Trusts.
Now the caveat - The holding company generally receives the cash flow from Trusts either directly from the Trusts or indirectly thru it's Depositors. From here the holding company will past "on an as needed basis" cash to it's banking entities. To safeguard and protect the assets received by the holding company it will not have an expressed contractual rights to pass on what it receives.
Ref: the same holds TRUE WITH WMI does it not?
Comment:
Yes WMI too ( In a true Sale) !
As Delaware is unequivocally the leading jurisdiction in which to structure securitization and other transactions.
The Asset-Backed Securities Facilitation Act, (ABSFA) first provides that "any property, assets or rights purported to be transferred, in whole or in part, in the securitization transaction" shall be deemed to no longer be the property, assets or rights of the transferor if a securitization constitutes a true sale.
Ref: Safe Harbor items would not be disclosed as part of receivership first of all.
Commentary:
100% spot on. Off balance sheet means sold and not longer the assets of WMB.
On January 17, 2002, the State of Delaware enacted the Asset-Backed Securities Facilitation Act, 6 Del. C. § 2703A (the "ABSFA"). The ABSFA effectively creates a safe harbour under Delaware state law for determining what constitutes a true sale in securitisation transactions.
The ABSFA first provides that "[a]ny property, assets or rights purported to be transferred, in whole or in part, in the securitization transaction shall be deemed to no longer be the property, assets or rights of the transferor."[1] Given the foregoing provision, to the extent Delaware law applies, the traditional legal criteria used in determining what constitutes a true sale in the context of a securitisation is intended to be irrelevant.
The ABSFA further states that "[a] transferor in the securitization transaction ... to the extent the issue is governed by Delaware law, shall have no rights, legal or equitable, whatsoever to reacquire, reclaim, recover, repudiate, disaffirm, redeem or recharacterize as property of the transferor any property, assets or rights purported to be transferred, in whole or in part, by the transferor."[2] The ABSFA also provides that "n the event of a bankruptcy, receivership or other insolvency proceeding with respect to the transferor or the transferor's property, to the extent the issue is governed by Delaware law, such property, assets and rights shall not be deemed part of the transferor's property, assets, rights or estate."[3] The foregoing provisions facilitate reaching the conclusion that a true sale exists in the context of a securitisation transaction where Delaware law applies.
Ref: ""Parent Company who formed them.""
Trust are stand alone in that they are not controlled and operate independently of their Parent.
SPE / Trusts are stand alone as they are governed and operation strictly by their service agreements. They have their own independent directors and file separate financials.
Ref:
1) With regard to any/all Assets that may be returned by the FDIC. Whom (WMI Estate?) is ultimately the owner of these Assets and will the LT be the administrator/distributor of said Assets?
Comment:
Two parts here: Assets of the Debtor (WMB) and Assets outside the Debtor - WMI interest in subsidiaries and those in SPE / Trusts.
I would contend that WMI Estate is the ultimate owner -
Since WMI filed for bankruptcy protection its shares of stock ownership in all it's subsidiaries may have become property of the bankruptcy estate. Thereby Bankruptcy Trustee now holds WMI ownership interest in all that the shares of WMI held. Thus WMB and all other wholly owned subsidiaries.
As for the SPE / Trust assets, provisions within each PSA would dictate when a final clearing of accounts removal takes place. Generally this is when all contractual obligations to investors have been fulfilled. Then all remaining residual assets within the SPE / Trust are cleared out. Generally to the SPE that transferred the pooled receivables to the SPE / Trust and not the Sponsor / Originator. Reason not the Sponsor / Originator, this would preclude the True Sale accounting and in turn not classify as bankruptcy remote.
Generally Holding Companies have contractual rights to collect all excess revenues from their subsidiaries. And to the contrary no written contractual rights to pass on the collected revenues. Cash flows to subsidiaries on an as needed basis. This an inherent "adverse to risk" practice of not having assets exposed to potential bankruptcy.
2) Does the distribution process to Escrows, when/if it occurs, revert to prior APR rules or does the POR apply throughout the process?
Comment:
Yes Escrows will get paid but not certain when. Here i would believe the Bankruptcy Trustee will follow the POR.
Ref: DB for one(administrator), A&M another. The trusts are stand alone, NO ONE OWNS them.
Parent Company who formed them.
The stand alone just means that have their own set of financials. As for SPE / Trusts - mainly Balance Sheet.
Ref: DB for one(administrator), A&M another. The trusts are stand alone, NO ONE OWNS them.
Parent Company who formed them.
Ref: To many eyes, could NOT get it all.(Holding Co.)imo
100 % spot on!
FDIC has to honor and NOT violate the "Safe Harbor" rule. As such, WMI was not required to capitalize WMB. WMI was a Financial Holding Company and as such was outside the reach of FDIC.
All assets / ongoing income within these SPE / Trust that are classified as True Sales are untouchable by the FDIC.
In Secruitizations:
Involves sequential transfer of title. Originator / Sponsor -> Intermediary SPE / Depositor -> SPE / Trust.
Just imagine the volume of loans that may have been signed off by WMB (originator / sponsor) to a WMI wholly owned subsidiary that were never in turn signed off on to the SPE / Trusts. This broken chain of transferring ownership was not uncommon. Legal title could be claimed by WMI as it's wholly owned SPE would be last in stop of legal title.
Clearly a mess that the FDIC does not want to further muddy the waters.
So yes, too many eyes.
Ref: No it's not. It is neither a R-45 nor does it say Capital Loss, these are NOLs, Net Operating Losses.
Comment:
The abandonment of stock that has "No"liquidation value ( i.e., worthless ) is initially a capital loss with capital loss limitations. Capital loss limitations as follows:
1) $ for $ loss against Capital Gains.
2) $ 3K per year against ordinary income.
But since WMI had controlling interest, 80% or greater in WMB, the IRS regulations / code allows for a reclassification to ordinary loss thus giving rise to $ 5.9 Billion NOL. Being that the $ 8.3 Billion worthless stock gave rise to a $ 5.9 Billion NOL the Book net income was @ 2.4 Billion ( 8.3 minus 5.9 ) prior to $ 8.3 deduction.
Ref: My concern mainly arises from the $165 billion off balance sheet report from the 2015 JPM 10k where they stated something like $80 billion of the loans were liquidated. Do you think they would be on the hook to redeploy those liquidated assets?
Comments:
Difficult to discern. Would have to see the actual "Off Balance Sheet" entries.
$ 80 Billion is a lot if this was in fact only for one year. But what I do know is that foreclosed securitized real estate generally has a three year window to finalized a liquidation. So this $ 80 Billion could be a true up entry for previous three years foreclosures. Then again, the $ 80 Billion Liquidation proceeds might have been in excess of the aggregate "principal" certificate holders balances. Example foreclosed property had a loan to value (LTV) of 60 %. Fair Market Value of home $ 100 K Loan 60 K and actual liquidation proceeds was $ 80 K.
FASB requirements of disclosure are very strict for "Off Balance Sheet" (OBS)transactions. Being so, what there any notes as to $ amount of (OBS) loan replacements by JPM?
As far as JPM being on the hook to replenish the $ 80 Billion, I could not say one way or another. The PSA provisions would provide that answer.
Ref: CB, in your opinion is the loan portfolio in safe harbor in runoff mode or is JPM required to replace loans that have been refinanced or paid off?
For example, if the portfolio started at $300 billion but $100 billion of loans have been refinanced or paid off during the last 9 years, is JPM required to replenish those loans with new ones?
My concern is that the portfolio is required to pay back 1.9% interest to the wamu deposit base that JPM acquired...and overtime as the portfolio in safe harbor gets smaller, that will start eating into the profitability of the portfolio unless JPM replaces to paid off loans with new ones.
I guess the other possibility is that once a loan has been paid off, the portfolio hands back the principle back to JPM to "pay off" the deposit base and then JPM at that point is responsible for redeploying that deposit principle and is now responsible for that 1.9% interest cost.
Comments:
Safe Harbor as in protection of wamu deposit base?
Sorry, I am not real clear here. Safe Harbor rules are to protect the investors interest within securitization. Specifically not allowing the FDIC / Courts the power to claw back those pooled receivables transferred in a "True Sales" accounting classification trusts.
If we are talking securitization then the pooling and service agreements (PSA) provisions; terms / conditions / duties / responsibilities / obligations would be clearly express. So if with-recourse - then yes a obligation to repurchase and/or replace non performing / refinanced / paid off assets most likely against the original originator - WMB. Since WMB in receivership the PSA would address / provide standing of asset / investor protection by how / whom would have this continued obligation to repurchase and/or replace not performing assets.
Without-recourse PSA, WMB would have no continued obligation.
So if not talking securitization then we are not talking Safe Harbor. So if JPM is required to pay 1.9 % to the WAMU deposit base then they are on the hook to do so and must deal with that obligation.
Really I don't see a problem if a $ 300 Billion Loan portfolio vs. an equal $ 300 Billion acquired deposit base. Loan Yield % / origination fees far out weight the 1.9 % Rate needed for depositors. The $ 100 Billion reduction via payout / refinanced will be used to repurchase / replenished back to $ 300 Billion.
Ref: under what circumstances would JPM be able to legally liquidate these loans and retain the proceeds?
Comments:
Banks, on and on going basis, manage / monitor asset to liability exposure. Portfolio Loans, ( retained "ON balance sheet ) that generally fall to the following categories:
1) Loans in default,
2) Collateral of Loans not of high quality - properyy market value deteriorating.
3) Loan to value exceeds Banks benchmark of acceptance.
Above exposure will generally trigger a bank to liquidate / sell loans. As to leave such loans on the books will required increased loan loss reserve and higher capital requirements.
The 60 to 100 billion seems like a lot but paramount to a bank is liquidity / credit risk management.
Ref: I concede that i erred in terms of my statement that non performing loans in securitizations were replaced by the originator from in house loan pools.
Comments:
Why would you have erred? Upon the perusal of hundreds of Pooling & Servicing Agreements (PSA's) I have seen numerous terms / conditions written that govern the original / issuer charged with the responsibility to replace non-performing assets with performing assets. So not uncommon to have True Sales with recourse.
Ref: All well and good. What is the bottom line for escrow and WMIH holders like me and many others.
The Skinny - Treasure Trove.
In due time will sling shot forward!
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
Ref: 24B times 9 years is 216B. ??
Calculation would be closer to 24B "Total." Remember the formula would be:
Principal X Interest X Time.
Each loan would have a different maturity date. Also many other factors such as:
1) Estimated early payout date, and
2) Estimated curtailments, and
3) Estimated refinancing along with refinance %, and
4) Estimated foreclosures, etc.
Ref: CB, the last wamu 10k from 2007 stated interest profit margin of 2.9% across entire portfolio. But I dont think that includes servicing fees. I dont know how much JPM was taking over the last 9 years for servicing. Do you have an estimate?
No I do not.
This would require accurate information as to:
1) What capacity JPM held within each SPE / Trust, and
2) Respective % of servicing fee to the capacity of JPM held, and
3) Types of loans and $ amount of loan principles , among
4) Various other factors.
Ref: CB, what is the typical cost of servicing loans. What do you think JPM was charging for servicing the loans for the last 9 years? .5%? 1%?
Depends on what role capacity of JPM. There are many parties to a PSA. Such as follows:
1) Master Servicer Party- (generally the most highly compensated.) Here compensation that I have seen are as follows:
a) On an annualized term a service fee of basis point per outstanding loan principle. I have seen it range from 2 basis points ( .002 % ) to as high as 12 basis points (.012 % ).
b)Many have the contractual rights to profit in the revenue generated from reinvestment of various accounts such as the reserve and collection fund.
c) Service fees associated with collection of late fees. I cannot recall the range of % here.
2) Many types of Sub Servicers / Special Servicers - Such as the ones responsible for defaulted loans, foreclosures / liquidation. If I can recall correctly it was like 15 basis points to 20 basis points applied against only those loans principle balance that needed special attention. If liquidation was needed then the basis point would be much higher but I cannot recall.
3) Trustee - paid @ .0015 to .002 basis points of outstanding principal balance.
If known - what capacity JPM played and the actual basis points / % of each PSA only then could a reasonable forecast be estimated of their compensation.
Ref: "JPM DID NOT PURCHASE 615 BILLION in WaMu LOANS...YIKES!"
CB,From a previous post of yours: #487001 "What is consistent from my empirical experience is the net yield ( excess spread ) was on average @ 3.25 % - 4 %. This I can vouch for."
Do you expect this type of returns on this 615B in loans?
I would surmise that the 3.25 % - 4 % net yield could be applicable to the 615 Billion as this net yield remained stable over a period of @ 15 years.
Ref: So then what does CBA0"9" represent??? DISTRIBUTION???? tia
Banking Knowledge as in Certified Bank Auditor. Also I am a CPA.
Ref: Your Quotes as follows:
And imho these have to take place first;
""""Also awaiting some type of formal disclosure about the dismissal of all WAMU related cases.
we already know per July 14th JPM expects their $645M "soon"
thats the key to unblocking any FDIC-R decission...."""""
As per JUDGE COYLER BOBPHRASED
You come to me when you have all of this taken care of and I WILL LIFT THE STAY!!!!!!!!!!!!!!!!!!!
Pretty much sums it up for me, ONCE THE STAY IS LIFTED then and only then will we imho see any real movement, That 8k lifting the stay IS WHAT I AM WAITING ON NOW
Commentary:
Above is definitely a major positive hurdle to move this closer to closure.
Ref: **“8. Investor Code AO1 in the Loan Transfer History File represents WaMu Asset Acceptance Corporation.***
JPM DID NOT PURCHASE 615 BILLION in WaMu LOANS...YIKES!
Our ship has sailed and coming in on a "Safe Harbor."
Great Information!
Ref: Is the FDIC responsible for the return of WMI/WMB assets?
FDIC - R for WMB
FDIC - C for WMI.
Ref: It's great to have you posting again!
Thank you!
I have been here from time to time - reading posts. Not one to get caught up the forays. Just not my style.
Everyone has and is entitled to an opinion. Not appropriate to desecrate.
My opinion is that since nothing has spooked the horses; Appaloosa LP, Greywolf Capital Management LP, and Centerbridge Partners LP then why should it to you.
After all, they have their opinion of where this is headed!
Ref: What's your opinion on timings?
Circumstances dictate timings. Obviously we are down the home stretch.
Opinions here vary at to when. Some opinions are as follows:
1) When it's ripe.
2) Final gavel down.
I like to look at it this way:
Released investors ( escrow holders ) have a seat at the table, elbow to elbow with Billionares, holding a royal flush hand. When the river card is turned over the money flows.
I believe a lions share of escrow holder's windfall will come from the residual value held within SPE / Trusts. These Safe Harbor assets, untouchable by bankruptcy claims, have been on going, daily, earning / accumulating value. So whether ripe or gavel down cash be coming our way and mostly likely ongoing until the final satisfaction of last SPE / Trusts certificate holder is paid.
Ref: Should FDIC make any type of announcement like FDIC-R closure?
Yes they should.
I would go to -
www.fdic.gov/bank/individual/failed/wamu_settlement.html
Look within the status section.
Ref: Estimate of remaining residual value.
Virtually impossible.
Each stand alone Pooling & Servicing Agreement (PSA) is unique. One would have to know the contractual nature of each structured securitization. Features vary by asset classes within tranches. Not to mention one would have to know the sheer size of each tranche within each PSA.
What is consistent from my empirical experience is the net yield ( excess spread ) was on average @ 3.25 % - 4 %. This I can vouch for.
I would content the FDIC is adhering to safe harbor with the residual values. Our caveat was the announcement in court they will be there.
Ref - ***The Holy Grail*** (retained assets)
They will still be there; they can be carried through.
What on earth can still be there as a "concept of retained assets?!?"
My opinion - Trapped residual value of magnitude within SPE / Trusts.
Two elements that can significantly enhance residual value:
1) Excess spread ( difference between yield of receivables over expenses paid.)
2) Extent of over collateralization ( Receivables moved to the trust and never sold to certificate holders/ investors.)
Few know the treasures that lie within each securitization Trust. I can state from my professional career SPE / Trusts have done very well.
Ref: Hope is nice but the Reality is: "Great Due Diligence" will find what is not there.
Well then, I kindly ask why are you here?
Also -
Why Billionaire "savvy" Hedge Funds & Mega Institutions here?
Clue / Really is:
1) Billionaires don't waste time unless Billions to be had were a "Foregone Conclusion!"
2) Consolidated Financials - WMI ( parent / Holding Company ) and wholly owned / controlled subsidiary's are reflected as one. Thus any and all earnings / profits to WMI from within it's wholly owned / controlled subsidiary's are eliminated "No matter how significant / material the value." Thus only those whom have access to stand alone financials of each entity can really grasp the true financial picture.
3) Holdings Companies are the gems within conglomerates. They hold the assets while eliminating risks. WMI being a Financial Holding Company would have held asset values in many forms. From my banking experience, just a few would have been real estate, contractual rights to royalties, % of revenue from pooling & serving agreements and holding of loan portfolios in support of borrowed federal funds.
4) While entities can manage / manipulate financials within GAAP rules as to provide favorable tax treatment cash inflow and outflow from bank accounts are not fake. Those having access to these would gain the true nature / insight of what value lies within WMI.
5) One has to realize that a Holding Company just doesn't keep it's cash realized from it's subs but rather it reinvests into more entities to build large asset value. Also, the contractual right to cash revenue realized from pooling of assets may remain within the the respective subsidiary's cash account.
The above five aforementioned is reason enough for me to be here.
Zeus - Liquidation Basis Accounting
Your Quote:
LBA requires financial statements prepared using the liquidation basis to present relevant information about a company’s resources and obligations in liquidation, including the following:
The organization’s assets measured at the amount of the expected cash proceeds from liquidation. Included in its presentation of assets should be any items it had not previously recognized under U.S. generally accepted accounting principles (GAAP) for entities not in liquidation but that it expects to either sell in liquidation or use in settling liabilities (for example, trademarks).
So that in a nutshell means, there is no place to hide any assets at anytime, they are identified always. So where now are those Tens to Hundreds of Billions?
Commentary:
About your reflection of - So that in a nutshell means, there is no place to hide any assets at anytime, they are identified always. So where now are those Tens to Hundreds of Billions?
YOU ARE GIVING FALSE INFORMATION!!
REASON - FUTURE INCOME & COST RESOURCES SHALL BE RECOGNIZE "IF AND ONLY IF" THERE IS A REASONABLE ESTIMATION OF SUCH.
YOUR QUOTE - "THEY IDENTIFIED ALWAYS" IS FALSE.