On 11/7/2016 Boarddork made the following post #466927 on IHUB. His discussion centered on the retained interests in the QSPEs.
1) Just look at income from the mortgage strips and certs income stream only..... $40B before FJR interest rate per 8 years....
"from WMI 2007 10-k...pg 5
" For other retained interests in securitization activities (such as interest-only strips and residual interests in mortgage and credit card securitizations), the discounted cash flow model used in estimating fair value utilizes projections of expected cash flows that are greatly influenced by expected prepayment speeds and, in some cases, expected net credit losses or finance charges related to the securitized assets. Key economic assumptions and the sensitivity of retained interests fair value to immediate changes in those assumptions are described in Note 7 to the Consolidated Financial Statements – "Securitizations." Changes in those and other assumptions used could have a significant effect on the valuation of these retained interests. Changes in the value of other retained interests in securitization activities are reported in the Consolidated Statements of Income under the noninterest income caption "Loss on trading assets" and in the Consolidated Statements of Financial Condition as "Trading assets."
WMI consolidated states it posts the income value from securities under Trading Assets in the Consolidated Statements of Financial Condition. So:
2007 WMI 10-K
Trading Assets:
2007 $4.5 Billion income generated
2006 $7.8 Billion income generated
2005 $7.2 Billion income generated.
Kerry Killenger testified and we know losses were not that bad in 2008. Additionally what DB settled for in damages as trustee, is minute compared to the assets they managed.
If 2008 is the bottom and a slow recovery from there......to now 2016......could one assume an average of $5B per year + interest? That's $40B + 8 years interest.....AND THIS IS JUST CERT INCOME ( 1) above).
2) But Wait there is much more.......There is still value in liquid and illiquid mortgage assets that were temporarily pledged or lent to the time-capped securitizations per each prospectus; and once that yoke is run-off over time per each prospectus (nearly done now), then the underlying mortgage assets remaining (not refi'd or foreclosed) are free to return to use for the actual holder - WMI (remember WMI 10-k $240B mortgages held in portfolio prior to BK). And eventually we should see something reflective of that.
What's interesting about run-off mode is that everything was flash frozen in safe harbor and legal isolation. A performing institution would be continuously reinvesting mortgage liquidation cash into funding new loans......but when musical chairs stops in receivership/bankruptcy. .....the CASH piles up and can't be reinvested by the parent. It just collects like a thousand raindrops in a bucket. 8 years of accumulations will be a hell of a lot more, than a snapshot in time, pre 2008 imo.
3) and Wait a bit more.....there's also credit card securitizations, commercial loans, HELOCs (2nds, 3rds), etc, etc.
WMI is a cash machine for legacy tracking marker holders who released.
