Mr Cooper Group Inc (COOP)

[boarddork]

It all goes back to WMI's consolidated entities 'mortgages held in portfolio' value - sorting and unwinding this giant portfolio is what is taking so long.

Even in 2009, mortgage loans were extremely valuable, despite the crash. Look at Indymac........Indymac mortgages in receivership, were then sold and purchased out of receivership for 55% - 70% of principle, depending on whether the loan was Delinquent (55-60%), or Current (70%)).

In a typical FDIC Structured Asset Transaction where the FDIC was selling Indymac mortgage assets it had in "safe harbor" and "legal isolation" from Indymac Bank's FDIC Receivership, (if JPM decides to buy mortgage assets from what the FDIC-R is holding in "legal isolation" and "safe harbor" then it could look something like this).....https://fdic.gov/about/freedom/IndyMacLoanSaleAgrmt.pdf. After all, this sale was only 5 months following WAMU......


Schedule 2.02 Held for Investment and Held for sale sold for 70% of principle balance PLUS accrued interest. 30 days delinquent = 60%. 60+ days delinquent = 55%. HELOCs 58%, 50%, 37% for Current, 30 Days past, 60 Days past, respectively.

Schedule 2.02: Purchase Price. Subject to the terms and conditions of this Agreement and
the Master Purchase Agreement, the Purchaser shall pay to the Seller, in accordance with the procedures set forth in this Agreement and the Master Purchase Agreement, an aggregate purchase price for the Assets in an amount equal to the sum of each product obtained by multiplying (x) the unpaid principal balance of each Loan, as shown on the Loan Schedule as updated as of the Closing Date, by (y) the applicable percentage for the category set forth on
Schedule 2.02 to which such Loan belongs, plus accrued interest from the paid-to date up to but not including the Closing Date for Loans that are less than thirty (30) days past due (such sum, the "Group 5 Final Purchase Price").


Roughly, if JPM is buying, and the Loan Sale Agreement to JPM is similar, [ $240Billion in WMI's portfolio loans + 30B Held for sale + Helocs ? ] x's .20% bad loans at worst = $54 Billion x's .55% worst delinquent rate = $29.7 Billion purchase price for worst case delinquent loans

Then with the remaining [$186 Billion in WMI loan principle] x's .70% paid current loans = $130 Billion loans paid current purchase price + $54 Billion loans delinquent purchase price = $184 Billion purchase price for the WAMU loan sale agreement.


This is not far off from the $165 Billion in JPM's OFF-Balance Sheet (excluding the $38Billion unliquidated), and I haven't taken into account WAMU HELOC's! Reconcile those out, and I bet the numbers match pretty close.