Mr Cooper Group Inc fka COOP

[Donotunderstand]

bkshadow

I did not read the detail

but I do not understand why any so called legacy mortgages would not be offset by deposit liabilities --- unless this is some MASIVE retained earnings no one used to salvage the bank

Modern Lending for BIGGY Banks

WaMu takes in 250B in deposits
WaMu issues 240B in mortgages (loans secured by mortgage) (some amount less then the 250 for reserves - no math done)

WamU for years until PLMBS paper - to make new loans sells the obligations to itfor principal and interst to F or F and gets cash back. At that point it does not not own the mortgages any more

This is done over and over


At any given time WaMu holds either a ton of cash From F or F or a ton of mortgages

Wamu also holds a small capital reserve

Capital Reserve plus cash if just sold mortgages assuming its bulk)plus some profit in small percent = deposit obligation to the people who bank at WaMu


If not recent swap with F and F then WaMu holds mortgages with value = to deposits


If WaMu went PLMBS then again it sold the mortages to investors for cash = some profit some reserve and deposit obligations and does not own mortgages

Over time a profitable bank can own mortgages or cash from profit in retained earnings. But even the FDIC on its worst day would not close Wamu if it had good reserves with good Morgages or cash


itsold the morgages in return for ca