Mr Cooper Group Inc (COOP)

[LuckyPanda]

johnheps, you are technically correct but I think you are missing the big picture. Yes, its true that JPM got most of the assets (299-40B) but they did not get the profit margin on that portfolio.

The real value of WMI is the 2.9% interest profit margin on that 299B portfolio which is promised to the various ABS certificates that WMI owned.

Yes, it is true thay JPM owned most of the assets of the portfolio (principle value) as it should to offset the deposit base liability that was used to fund the loan portfolio in the first place. However, the deposit base only gets about 1.9% and the portfolio generates about 5.8%. The difference, or interest profit margin, is pledged to the various ABS certificates that WMI owned a big portion of.

If JPM actually owned the profit margin on the portfolio (i.e. ABS certificates) then the $299B would be under their balance sheet and not off balance at FDIC. The reason, it is off balance at FDIC is because the portfolio is protected under safe harbor to insure its solvency against untimely liquidation. As FDIC receives loan payments for the portfolio, the principle plus 1.9% interest goes to JPM, the remaining 2.9% in interest profit margin goes towards the ABS certificates (WMI/escrow holders).

Escrow will ultimately receive a minimum $80 billion by my estimation.