Mr Cooper Group Inc (COOP)

[MadBadger]

Interesting Wording and Timeline; From 2008 through 2013, loss sharing was o ered by the FDIC in connection with P&A transactions. In a loss-share transaction, the FDIC, as receiver, agrees to share losses on certain assets with the acquirer, absorbing a signi cant portion (typically 80 percent) of future losses on assets that have been designated
as “shared-loss assets” for a speci c period of time (e.g., ve to 10 years). e economic rationale
for these transactions is that keeping assets in the banking sector and resolving them over an extended period of time can produce a better net recovery than the FDIC’s immediate liquidation of these assets. However, in recent years, as the markets have improved and begun to function more normally with both capital and liquidity returning to the banking industry, acquirers have become more comfortable with bidding on failing bank franchises without the protection of loss share.
e FDIC continues to monitor compliance
with shared-loss agreements by validating the appropriateness of loss-share claims; reviewing acquiring institutions’ e orts to maximize recoveries; ensuring consistent application of policies and procedures across both shared-loss and legacy portfolios; and con rming that the acquirers have su cient internal controls, including adequate sta , reporting, and recordkeeping systems. At year-end 2016, there were 148 receiverships with active shared-loss agreements and $20.8 billion in total shared-loss covered assets remained.