Mr Cooper Group Inc fka COOP

[tanjazielman]

Yeah it's quite clear that JPM "claims" to have "bought" 244 billion in mortgages.

JPM can claim everything they want. Too bad their claim is not backed by cold numbers.

Let's take a look (from JPM's 2008 annual report, p. 58):

http://files.shareholder.com/downloads/ONE/3332638820x0x283416/66cc70ba-5410-43c4-b20b-181974bc6be6/2008_AR_Complete_AR.pdf

Selected metrics
Year ended December 31,
(in millions, except headcount
and ratios) 2008 2007 2006
Selected balance sheet data –
period-end
Assets $419,831 $256,351 $237,887
Loans:
Loans retained 368,786 211,324 180,760
Loans held-for-sale and loans
at fair value(a) 9,996 16,541 32,744
Total loans 378,782 227,865 213,504
Deposits 360,451 221,129 214,081
Equity 25,000 16,000 16,000
Selected balance sheet data
(average)
Assets $304,442 $241,112 $231,566
Loans:
Loans retained 257,083 191,645 187,753
Loans held-for-sale and loans
at fair value(a) 17,056 22,587 16,129
Total loans 274,139 214,232 203,882
Deposits 258,362 218,062 201,127
Equity 19,011 16,000 14,629
Headcount 102,007 69,465 65,570
Credit data and quality
statistics
Net charge-offs $ 4,877 $ 1,350 $ 576
Nonperforming loans(b)(c)(d)(e) 6,784 2,828 1,677
Nonperforming assets(b)(c)(d)(e) 9,077 3,378 1,902
Allowance for loan losses 8,918 2,668 1,392
Net charge-off rate(f) 1.90% 0.70% 0.31%
Net charge-off rate excluding
credit-impaired loans(f)(g) 2.08 0.70 0.31
Allowance for loan losses to
ending loans(f) 2.42 1.26 0.77
Allowance for loan losses to ending
loans excluding purchased
credit-impaired loans(f)(g) 3.19 1.26 0.77
Allowance for loan losses to
nonperforming loans(f) 136 97 89
Nonperforming loans to total loans 1.79 1.24 0.79

Also look at these JPM numbers:



Do you see any increase of 244 billion in reported mortgage portfolio loans on the books of JPM from 2007 to 2008? (VERY IMPORTANT TO REMEMBER JPM ACQUIRED BEAR STERNS TOO IN 2008!)

No me neither. It's also not plausible JPM sold the portfolio loans, because there is no proof whatsoever they received the portfolio loans and sold or packaged them into MBS.

On the other hand it could be plausible that the increase in loan value was due to acquisition of Bear Sterns portfolio AND the so called "PCI-loans" from WaMu, accounting for roughly 69B.


But what are these PCI loans?

Purchased Credit Impaired (PCI Loans):

Of the 441B of JPM's consumer loans, 69B or 16% are categorized as PCI loans. Purchased Credit Impaired or PCI loans are loans that JPM acquired from the FDIC which was the receiver for Washington Mutual. To account for the PCI loan portfolio purchase, JPM pooled these loans together and assigned a value to these pools based on assumptions on default rates, loss rates, prepayments etc. The difference between the actual and projected cash flows of the PCI portfolio is charged into interest income as accretable yield. JPM continuously updates the expected cash flows from the PCI loans. Any expected decreases in principal cash flows would trigger impairment through a provision of loan losses while expected increases would first reverse any previous loan loss allowance with any remaining increases recognized as interest income.

A breakdown of the PCI-loans:



Now why would JPM pool these loans together? Interesting huh?

It gets more interesting.

So all in all the difference in assets, loan and deposit values between 2007 and 2008 reported by JPM, which also includes the Bear Sterns assets/loans/ deposit's and 69B of PCI loans from WaMu, is not showing the 244B in Wamu portfolio loans as is pointed out by boarddork (great DD BTW Dork, keep 'em coming).

But weren't these mortgages "bought"by JPM? How come we are missing 244 billion minus 69 billion = 175 billion in portfolio loans then!

Also Wamu reported 110 billion in home loans in their portfolio in 2007. JPM reports NONE of these loans as PCI loans from 2008 until 2013!!

JPM only reported 21.9 billion in home equity loans in 2011 from Wamu origin (as PCI loans), whereas Wamu reported 60 billion (!) in home equity loans in 2007!!


Where did the 110 billion in home loans and more than 40 billion in home equity loans go?

And why are these PCI loans pooled and accounted seperately by JPM?

I don't know much, but when the 25th September these questions are not answered - and I'll take cash instead of an answer also - somebody's got some 'splaining to do!!! ("oh Ricky!")

Or is JPM/FDIC buying these home and home equity loans (worth 110 billion dollars!!) when PAA closes (including interest please)?

Thank you for listening to today's public announcement.