OH SNAP!!!!!!!!!!!!!!!
Tanj!!
This is an amazing break down!!
Do you think we would get any of the 151 bil back or just the difference of the almost 10 bil. according to the doc posted on the fdic sit in May?
"Good question! I believe the escrow/LTI owners are NOT direct beneficiaries of the WMI loan portfolio trust.
Simply because WMI is not a party in this case.
The direct beneficiary will be FDIC-R. They have a fiduciary duty to maximize returns for creditors/shareholders.
I might even take it a step further. Hold on to you hat everyone...
Remember the 151 billion FDIC Subrogated Claim on the WaMu receivership balance sheet?
There is supposed to be 151 billion in dividends paid to date. To whom? There were ZERO losses to the Deposit Insurance funds as multiple times was stated to date. Also where did the 151 billion figure come from?
WaMu had 188 billion in deposits. I don't buy that 30 billion JPM writedown BS.
Who has exactly a claim on who?
Well if you look at it. Bondholders and General Unsecured creditors, together with administrative costs have a claim of about 13,8 billion. Combined with the 151 billion, we get a number of about 165 billion.
That is exactly the amount what is in the MBS Trusts of which DB is Trustee.
And if we look up Subrogation on Wikipedia it says this about the effects:
"Where subrogation is available, the subrogated party is entitled to stand in the shoes of another and enforce that other party's rights. If the equity is established, the court may effect the subrogation remedy by way of equitable lien, charge, or a constructive trust with a liability to account. Crucially, the claimant's rights are wholly derivative, hence the claimant has no higher rights than the person to whom he or she is subrogated."
In this case the FDIC has a subrogated claim of 165-13,8=151 billion, in which it stands in the shoes of WMI equity holders against DB?
DB doesn't own these 165 Billion in MBS Trusts. But they ARE trustees and therefore the party that have to give their blessing in releasing the funds!
Why JPM was a party, is because the dispute was about whether the ownership of these trusts were lying at JPM or at FDIC. And since August 2016 it became obvious FDIC is beneficiary of 165 billion of these trusts.
The document placed on FDIC site on May 2nd this year showed us one thing, and that is that there is enough money to pay off bondholders and other creditors (26.3 billion in net value, where there is 17.8 billions in claims at the FDIC).
So there would be no creditors snooping around to get a bigger piece of the pie during probate hearing.
The probate hearing is about FDIC prying loose a preliminary distribution out of DB (I don't believe JPM is even a party in this hearing anymore?)
In this context the 173 billion capital raise of JPM in 2015 is way more significant. As soon as they got whiff that they were not entitled to the 165 billion in MBS Trusts they needed to get the cash fast.
Because they refinanced/repaid 80 billion+ and liquidated 20+ billion worth. With JPM's arrogance they thought they didn't have to pay. But FDIC will exercise their subrogation rights with a maximum amount of 151 billion.
That's EXACTLY the reason why FDIC-R was NOT released. "
AI
