Mr Cooper Group Inc (COOP)

[Dmdmd2020]

Once you realize the basic relationship of decreasing interest rates leading to increased profits in MBS Trusts ...

IMO...it makes it easier to understand the motivations of people.

The main motivation in the financial world is to make money...and MBS Trusts are just instruments/tools to make money. As you learn how the originators/depositors/creators of the MBS Trusts make profits from these tools then it's not a great leap of faith to think that the big players like Bonderman et al are still around pulling the strings when they saw the downward trend of interest rates by virtue of the imminent recession in 2008.

Escrow Marker Holders, are in the same boat as Bonderman et al., waiting for MBS Trust profits in lieu of retained residual Equity Tranches/Interests (~25%).

Now all my previous calculations have not included compounded interest. If Federal Judgment Rate of 3% is awarded along with potential recoveries ....just take a quick look:

$692 billion securitized by WMI subsidiaries from 2000-2008

$692 billion x 25% (WMI retained equity tranche) = $173 billion

Using 3% interest compounded annually for 9 years

Total = $173 billion x 3% interest for 9 years = $232.497 billion total recoveries from MBS Trusts for Escrow Marker Holders.

Now in my book...that's more than "fair and reasonable"!!!!

Keep in mind the general public was always told that the financial crisis was caused by defaults of borrowers defaulting on their mortgages and the financial institutions were taking big losses. Well the by product of a perceived economic downturn and eventual recession was a decrease of interest rates to all time lows.

What the general public was never told is that all time lows in interest rates mean all time profits for MBS Trusts...which are bankruptcy remote!