I want to revisit the important posts by CBA09 and I want to simply put my conclusions in the beginning to keep focus on two important issues:
IMO...my conclusions :
1) Since WMI abandoned the worthless stock of WMB, the result is that any recovered assets will revert back to WMI and not to the bankruptcy estate. Thus WMI Escrow Marker Holders are the rightful owners of beneficial interests not WMIH
2) beneficial interests in securitized assets in MBS Trusts belong to WMI Escrow Marker Holders, since those MBS Trusts have been performing since 2008, most have been liquidated into cash (~90% have been liquidated into cash)
IMO...The remaining debatable unknowns are:
1) What is the value of the securitized assets from beneficial interests in MBS Trusts?
IMO...at minimum, $35.7 billion and my upper range is $108 billion.
2) When will WMI Escrow Marker Holders start to see recoveries?
IMO...if AZCOWBOY is correct (about Class 17 WMB bondholders being paid along with class 19&22), then hopefully this week or by the end of July. But hopefully by the time the merger is consummated.
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CBA09 post #499212:
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CBA09 Friday, 12/08/17 08:04:10 AM
Re: LuckyPanda post# 499154
Post # of 505197
Ref: Is there a time limit for disclosure of what's in safe harbor?
Does FDIC have any fiduciary duty to disclose final accounting of all assets in safe harbor? If so, is there a time limit?
Comment:
We are talking Off-Balance Sheet Assets - FDIC has not seized MBS in SPE's/ Trusts assets. They have no control or standing with such assets. The pooling & service agreements govern the disposition of all "Retained Assets" respectively within each Trust. Here - "WMI" in its sole capacity as Parent will the final recipient. That is why those in the know wanted "IT ALL" for themselves.
Off-Balance Sheet Assets are those sold and the only requirement of WMB was to reflect the following:
As of each Balance Sheet Date. - Monthly
1) Remaining Principal Balance of those sold assets as Off-Balance Sheet.
2) Risk Obligations such as Recourse Liability.
3) Trigger Events that might accelerated / increase obligations.
4) Description of Trigger events, etc.
Also in 8-k of the Risk Section such estimated obligations would be disclosed."
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CBA09 post #499401:
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CBA09 Saturday, 12/09/17 01:02:46 PM
Re: LuckyPanda post# 499270
Post # of 505199
Ref: Thank you CBA09. That is what I suspected originally. Safe Harbor assets release should have been controlled by the MBS trustee. What I don't understand is how DB as trustee could be discharged from probate without WMI receiving our assets? If DB is gone, who is the current trustee of our assets?
Comment:
Once a Trustee is discharged it signals the complete liquidation of the Trust Assets. No need for a Trustee.
We no longer care about a Trustee. Are assets are protected.
Safe Harbor assets:
The "Retained Assets!" Residual Interest in such assets are represented by A Residual Certificate. Generally the first SPE within a two SPE Tier -MBS.
Like (WMMIC - SPE - Tier # 1 & SPE/Trust - Tier # 2. WMI being Parent reaps the final benefits.
Ref: 1031 Exchange - I do not believe so with Terminated Trust Assets. To be fully terminated means all obligations are satisfied to certificate holders. And, all assets liquidated to cash."
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CBA09 post #501005:
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CBA09 Monday, 12/18/17 03:59:51 PM
Re: hotmeat post# 500996
Post # of 505199
Ref: My thoughts were that WMI's substantial Trust interests would not be reflected on the books as "Retained Assets", but rather as some type of "Income Line Item" in their financial filings.
Comment:
Two places:
1) Balance Sheet - Asset ( Debit ) Residual Interest ( Estimated Present Value - Future Cash Flow )
and corresponing - ( Credit )
2) Income Stmt - Income Line Item - (i.e., from Securitization / or Other Income).
Note: Regulations requires At least Quarterly the revaluation of Residual Interest."
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CBA09 post #501193:
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CBA09 Wednesday, 12/20/17 10:14:47 AM
Re: TJ0512 post# 501063
Post # of 505200
Ref:
Do you agree or not agree that WMI (the parent) relinquished ownership of WMB when WMB was seized? The only ownership WMI had in WMB was in the stock of WMB that was abandoned (*worthless stock abandonment") which created the NOL).
Comment:
Trustee abandoned and thereby no longer an asset of the estate. IRS Revenue Code 165 G-3 allowed the capital loss to be classified as an ordinary loss (NOL).
Ref:
From that point on WMI had no control of WMB or WMB subs whatsoever as WMB was sold to JPM as a "Whole Bank Purchase".
Comment:
Whole Bank as in assets - $ 298 Billion vs liabilities 258 Billion.
Ref:
Your comment regarding WMI has control of safe harbor assets.
Do you agree or not agree that Safe Harbor Assets are the actual assets within the various trusts that are protected for the benefit of the actual investors (certificate holders) within each trust?
Comment:
Safe Harbor Assets are those assets that have statutory exemption from the bankruptcy systems. Securitization qualifies for such exemption.
Ref:
Do you agree on not agree that payment (proceeds) for assets sold into the trusts has already been received and the only future benefit (besides servicing fees) relating to these trusts would be the retained interest in the trusts and are recorded as an asset on the balance sheet?
Comment:
Proceeds:
1) $ for the initial transfer of pooled mortgages.
True Sale -
Balance Sheet - Remove assets loan mortgages
Income Stmt - Difference between proceeds received (cash) minus loan mortgages transferred = Net Gain or Net Loss.
2) $ Retained Interest.
Balance Sheet - Residual Interest Receivable (Estimated future benefits)
Income Stmt - Income from Residual Interest
Note: Lions share of the Residual Interest (Retained Assets) remain with SPE # 1 - as a Safe Harbor Asset.
Ref:
On a consolidated basis in each 10Q & 10K the retained interests have been listed (I have gone back as far as 2004) and the total retained interests (not credit card related) were as follows:
in billions
MBS:
2004 - 1.62
2005 - 2.80
2006 - 1.90
2007 - 1.71
2008 - 1.23
Comment:
This reflects only a small % of the overall Residual Interest. Lions share protected within SPE #1 - Based on my experience.
Ref:
It's been said that there was a minimum 25% participation in these trusts which IMO is not the case and the only benefit going forward from 2008 was the retained interests.
Comment:
My experience from 1978 - 2004 - No Regulated Minimum. But, Certificates are issued for the Residual Interest and held by SPE # 1 ( Largest % ) and Originator ( there retained % much smaller )."
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CBA09 post #503000:
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CBA09 Saturday, 01/06/18 10:07:23 AM
Re: hotmeat post# 502845
Post # of 505200
Ref: Based on your experience, if applicable, what is your opinion on the following.............
1) Does the GSA govern ALL future distributions of Safe Harbor assets (only) to our "Markers" or will it revert to pre-bankruptcy ownership rights of the different classes ie Preferred and Common???
Comment:
"Safe Harbor" rules within Bankruptcy Code governs the protection of "ALL" distributions of Safe Harbor assets.
Our situation - Retained Assets ( which will be there ) within SPE/Trust are in the form of residual interests via Certificates held by subsidiaries of WMI (Parent). Safe Harbor rules protect these assets to pre-bankruptcy ownership. The Court nor the estate have no avoidance / claw back power. Fact - Court will ensure / protect the transfer of these assets to it's rightful certificate holder.
I contend WMI being the Parent and having a security interest it's subsidiaries which in turn that have a security interest via holders of security certificates of SPE/Trust residual certificates will reap the value of these Safe Harbor assets. Finally, WMI's legacy holders(escrow holders) gets the so-called Retained Assets. And, yes they will be there.
2) Can any party (FDIC, DTC etc) other than the WMILT make cash distributions directly to our "Markers" for any Safe Harbor assets held outside of the bankruptcy process???
Comment:
Yes, very likely to happen. Reason, the Residual Certificates are securities.
3) As the reorganized WMI, does WMIH own or are they entitled to any of the Debtors pre-bankruptcy assets/interests, other than that which was transferred during the reorganization process (ie WMMRC and 100% Equity in WMIIC) and clearly stated in the GSA???
Comment:
Yes, those assets, if any, that were transferred past a Pooling & Service Agreement cut off date. They would not be protected as Safe Harbor Assets.
4) Is the WMILT the sole and rightful "inheritor" and arbiter of the entire Debtors (WMI + WMIIC) estate,..bar none???
Comment:
The Court has the ultimate authority.
Happy New Year CBA and TIA for your response."
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CBA09 post # 504271:
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CBA09 Sunday, 01/14/18 03:41:16 PM
Re: LuckyPanda post# 503177
Post # of 505200
Ref: CBA09, if safe harbor rules protect the assets to pre-bankruptcy ownership then its distribution should not apply to POR7. Does that mean escrow markers are moot? Will all Wamu shareholders receive a distribution including the non-releasing ones? Thanks in advance for your input. I have been wondering about this for some time.
Comment:
Liquidation of assets involves two distinct assets:
1) Property of the Bankruptcy Estate - (Por7 applies).
2) Non-Property of the Bankruptcy Estate - Safe Harbor Assets ( regular bankruptcy code procedures / priority apply).
While the above two are distinct in nature "ALL" residual interest will go to Escrow Markers. So, no, not moot. Escrow Markers are the legacy shareholders. Thereby, have final legal standing and in turn sole contractual rights / title in residual interest.
Ownership Chain -
WMI owns the assets of WMI and in turn has legal title to all the assets of it's subsidiaries. Shareholders of WMI have legal title to all the assets of WMI. All assets that end up in WMI thru it's subsidiaries are thereby assets that WMI shareholders have legal contractual rights.
Por7, thru its declarations, have addressed the distribution of liquidated Bankruptcy Estate Assets. All residual interest of estate assets will go to Escrow Markers per the 75 % / 25 % allocation.
Since our Safe Harbor Assets are outside the bankruptcy estate, those captured within SPE/Trusts will follow each respective Pooling & Service Agreement (PSA) provisions. Generally, it's Parent that receives cash flows of residuals. Note, SPE# 1 create the SPE# 2 /Trusts, SPE 1 are many times direct subsidiaries of the Parent. And, SPE # 1's have a great deal of involvement in residual interest of SPE # 2 / Trusts.
In a solvent entity shareholders cannot force a distribution. A Corporation, thru it's board, has to declare a distribution of it's profit before shareholders are to receive any distribution in the form of dividends.
PSA are compelling and indivisible - only one end stop - Escrow Markers."
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