Time for a realty check. Yes, I hold escrows so please don't say I'm just jealous or something. I'm just trying to be a realist.
You guys want to paint wamu as this wonderful entity that was thriving when the big bad banks, other than wamu, created the financial crisis and dragged wamu down with them. That is not how the story goes and if you are honest with yourselves you will be better served regarding your escrow shares. We can dream all we want but if escrows get anything it will surprise me and if they are made whole I would be more than shocked. It just is not how the game is played.
Wamu was a disaster in the worse way leading up to the seizure. Keep in mind where they were at.
1. 60% of their loan portfolio was subprime and 75% of that was no doc loans.
2. Wamu had multiple runs on the bank to the tune of over 20 billion.
3. Their last quarter before the bk they lost 3.5 billion and set aside several more billion for bad loans. This was all after receiving the 7 billion in private equity.
4. Their valuation was at best $10 bucks a share prior to the free fall and at the time of seizure was a buck and the weeks leading up to the seizure it was a few bucks. JPM offered them 8 bucks a share several months earlier and the ceo wanted 12. How valuable were they really if they ceo was going to sell for 12.
Yes, there were games played and jpm disgusts me in many ways so in no way am I pro jpm.
Also, the fdic disgusts me also but not as much as jpm.
But the bottom line is that in no way are the numbers you are talking realistic regarding a return to escrow. First off, the fdic/feds have been making huge settlements with the banks for the fraudulent loans made. Do you actually think they will let escrows profit handsomely and let wamu off the hook. You can talk indemnified all you want, it's not going to happen.
The holding company was left with nothing but the NOL's. The only asset that I see in dispute is the 4 billion in cash that was in the holding companies name, and the way that they were forced to sign over the 4 billion to wamu, the bank.
Why wmih has not gone after that money I don't understand.
You can assume all you want but facts are facts and the fact is wmih has the NOL's and 650 million in cash and huge dilution once the first deal is done. I'm good with that as a starting point for a new m/a company with some very powerful partners.
I looked up the 100+ billion that jpm is going to shed and more than likely it is just cash from other fed reserve banks being held at jpm for zero interest and they want to get rid of it to make the regulators happy.
I just don't see the feds one day cutting a check and saying nice job for hanging on to your escrows here is 100x your money.
I am much more interested in what wmih is going to do moving forward and would really like to know what happened to the 4 billion that was forced over to jpm.
Did the wamu situation save jpm, yes, imo, they were screwed without the games they could play with the wamu deposits to shore up their books but that is all water under the bridge. jpm survived and wamu failed. In the right circumstances it could have easily been the other way around, problem was jpm was connected and wamu was not. End of story.
