Mr Cooper Group Inc (COOP)

[bkshadow]

"Retained Interests" of Washington Mutual Bank...

...detailed discussion; unfortunately, owned by JPM since September of 2008.

...totally unrelated to WMI/WMIIC (debtors), not raised by any party in interest, including equity, during the bankruptcy, nor since.

hotmeat Member Level Tuesday, 08/02/16 12:20:20 PM
Re: bkshadow post# 457486
Post #
457492
of 457529 Go

(1) Did WMI (the parent holdco) also invest in Tranches of the MBS's they sold to third parties, which were retained as income generating vehicles for the benefit the company???

...clearly, WMI (the parent of WMB, the owner, originator and 'sponsor of the mortgages placed in the mortgage backed securities in SERIES and TRANCHES (based on risk and enhancement)) did not INVEST in such.

...first, clearly step one, WMI, a bank holding company, never issued mortgages and could therefore not 'sponsor the sale of its' mortgages in the mortgage backed securities.

...second, clearly step two, the mortgages were SOLD (regardless of serviced by WMB or a 3rd party) as security for the MBS.

...third, clearly step three, "enhancements" to mortgage backed securities were required in the lowest rated, highest risk SERIES and TRANCHES. Such enhancements, such as repurchase obligations noted of late, primarily consisted of OVER SELLING MORTGAGES TO THE series and tranches "resulting in senior and subordinated positions AFTER THE MBS BUYERS were PAID IN FULL" if the OVER SECURITIZED MORTGAGES SPONSORED SOLD in the specific series and tranches was "estimated" to be realizable. In GAAP, this was a difficult valuation pre-2008 banking crisis; however, WMB recognized and recorded sizeable RETAINED INTERESTS in the MBS sold pre-2008. These are reflected as micro %'s of the total MBS, but still were recorded in the billions on WMB's records an reported as TRADING ASSETS. Such were 'adjusted by JPM to book value as per the JPM disclosures of the purchase price allocation.


(2) Was this not a common practice among the issuers of MBS's since it demonstrated to the potential buyers, the credit worthiness/stability of said investment MBS's???

...this was a VERY COMMON practice among ISSUERS of MBS (especially the lowest ranked, highest risk SERIES and TRANCHES), did generate BOOK income annually based on the "estimated value and value increases of the potential RETAINED INTERESTS" that were expected of each of SERIES and TRANCHES based on performance to date and the projection to the maturities of each.

...this ENHANCEMENT was fully disclosed in order to DEMONSTRATE the risks mitigation and entice potential buyers.

...again, this was ALL BY WMB, not WMI.

...WMB was seized by OTS, placed into receivership of the FDIC, which sold substantially all assets and most liabilities (deposits) to JPM.


Clearer now!?!

...clearer now?