Mr Cooper Group Inc (COOP)

[Dmdmd2020]

Per FDIC Office of Inspector General on June 30, 2016:

https://www.fdicoig.gov/publications/fdics-controls-over-receivership-asset-securitizations

“The FDIC's Controls Over Receivership Asset Securitizations
This is the accessible text file for FDIC OIG report number EVAL-16-005 entitled 'The FDIC’s Controls Over Receivership Asset Securitizations'.

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Federal Deposit Insurance Corporation

Office of Inspector General

Office of Audits and Evaluations

Report No. EVAL-16-005

June 2016

Executive Summary

Why We Did The Audit

[FDIC OIG letter head, FDIC logo, Federal Deposit Insurance Corporation, Office of Inspector General, Office of Audits and Evaluations 3501 Fairfax Drive, Arlington, VA 22226]

DATE: June 30, 2016

MEMORANDUM TO: Bret D. Edwards, Director, Division of Resolutions and Receiverships

FROM: E. Marshall Gentry, Assistant Inspector General for Evaluations /signed/

SUBJECT: Final Evaluation Report Entitled, The FDIC’s Controls Over Receivership Asset Securitizations (Report No. EVAL-16-005)

This report presents the results of the OIG’s evaluation of select key controls over the Federal Deposit Insurance Corporation’s (FDIC) receivership asset securitizations following their origination, to ensure those controls are performing as intended. We contracted with the independent professional services firm BDO USA, LLP (BDO) to perform this evaluation. Overall, BDO did not discover any significant deficiencies in DRR processes and controls associated with monitoring receivership asset securitizations and SSGNs following their originations. However, BDO concluded that opportunities exist for DRR to better document processes performed in procedures and job aids, and to address key personnel dependencies within the Capital Markets Group and closing/post-closing support contractor (CSC).

We made six recommendations to better document processes within DRR policies, procedures, and/or job aids, enhance certain controls, and to address key personnel dependencies. This report incorporates our evaluation of your response to a draft of this report in which you concurred with the recommendations. The FDIC’s planned actions were responsive and are sufficient to resolve all of the recommendations.

Consistent with the agreed-upon approach to the Corrective Action Closure (CAC) process, the OIG plans to limit its review of CAC documentation to those recommendations that we determine to be particularly significant. Such determinations will be made when Corporate Management Control (CMC) advises us that corrective action for a recommendation has been completed. Recommendations deemed to be significant will remain open in the OIG’s System for Tracking and Reporting (STAR) until we determine that corrective actions are responsive. All other recommendations will be closed in STAR upon notification by CMC that corrective action is complete but remain subject to follow-up at a later date.

If you would like to discuss this report, please call me at [phone] or A. Michael Stevens, Evaluations Manager, at [phone]. We appreciate the courtesies extended to our and BDO’s staff throughout this assignment.

Attachment cc: Pamela J. Farwig, DRR Craig R. Jarvill, DOF James H. Angel, Jr., DOF Steven K. Trout, DRR Jacqueline R. Westmoreland, DRR

Executive Summary

Why We Did The Evaluation

The Federal Deposit Insurance Corporation (FDIC), as receiver for failed financial institutions (Receiver), uses securitizations and structured sales of guarantee notes (SSGNs) to dispose of certain performing and non-performing residential mortgage loans, commercial loans, construction loans, and mortgage-backed securities (MBS) held by receiverships. Monthly loan payments of principal and interest are collected from the underlying loans and MBS, and these payments are distributed to the note holders, which includes FDIC receiverships. As of March 31, 2016, there were seven whole loan securitizations and five SSGNs with a total collateral value of $3.2 billion. The FDIC, in its corporate capacity, guarantees the timely payment of principal and interest due on most of the senior notes in exchange for a fee (Guarantee Fee). As of December 31, 2015, the FDIC collected Guarantee Fees totaling approximately $265 million, of which $142 million was from SSGNs and securitization guarantee fees and $123 million was from limited liability company guarantee fees, and recorded a receivable for additional guarantee fees of approximately $26 million.

We contracted with BDO USA, LLP (BDO) to evaluate select key controls over the FDIC's receivership asset securitizations, following their origination, to ensure those controls are performing as intended. Specifically, BDO focused on the Division of Resolutions and Receiverships (DRR) processes and controls associated with monitoring receivership asset securitizations and the information DRR provides to the Division of Finance (DOF) for receivership asset securitization accounting.

Background

With securitizations, the FDIC, as Receiver, initially sponsors (creates) trusts to which it transfers pooled assets from multiple receiverships. The trusts exist as discrete entities. The trusts issue senior and subordinated debt instruments (notes) and owner trust or residual certificates collateralized by the underlying loans or MBS. The senior debt instruments are sold to private investors and the receiverships retain the owner trust or residual certificates. Subordinated debt instruments are not included in every transaction and are either sold to private investors or retained by the receiverships depending on market demand.

DRR’s Capital Markets Group is responsible for managing and monitoring the receivership asset securitizations and SSGNs. The DRR Capital Markets Group has engaged Closing and Post-Closing Support Contractors (CSC). The CSC supports the DRR Capital Markets Group in most areas of operation including the monthly distribution process and the semiannual asset loss reserve (ALR) process.

Once securitizations and SSGNs are originated, DRR monitoring consists of monthly reviews of servicer distributions, fees, and performance reports; monthly conference calls with servicers; quarterly onsite meetings with servicers; quarterly evaluation of events that could trigger consolidation of the securitization or SSGN; semiannual evaluation of the sufficiency of the ALR, which is recorded on FDIC financial statements; and an annual review of servicer attestations and independent audit reports.”

____________________

IMO... my conclusions as of April 29, 2019:

1) “As of March 31, 2016, there were seven whole loan securitizations and five SSGNs with a total collateral value of $3.2 billion. ”

2) Per Duff & Phelps as of March 31, 2017:

https://www.globic.com/wamurmbssettlement/pdfs/2.%202017%2004%2026%20FILED%20WAMU%20TIP%2002-Amended%20Declaration%20iSo%20David%20L.%20Zifkin%20Submitting%20Further%20Evidence%20in%20Support%20of%20Petition.pdf

Pages 102-104 of 108:

If you added up all the MBS Trusts under column “Current Group Collateral Balance”

The total is $13,034,873,722.00


3) Therefore all the FDIC Receiverships as of March 31, 2016 was $3.2 billion.
While just under trustee DB (one of many trustees that have MBS Trusts created by WMI subsidiaries) there was a total of $13.034 billion

4) IMO...this proves that the FDIC were not in possession of MBS Trusts created by WMI subsidiaries after WMB was seized in September 25, 2008, because as of March 31, 2016 the FDIC were in possession of only a total of $3.2 billion in MBS Trusts from all FDIC Receiverships. While according to Duff & Phelps, DB had at least a remaining collateral of $13 billion in MBS Trusts created by WMI Subsidiaries as of March 31, 2017.

5) After the seizure of WMB on September 25, 2008, MBS Trusts created by WMI subsidiaries were left in all their respective trustees because they were and still are bankruptcy remote, and the FDIC did not legally transfer them to the FDIC Receivership.

6) The MBS Trusts have been performing since the seizure and are properly distributing to the respective investors in each respective MBS Trusts.

7) I still contend that WMI Escrow Marker Holders are the rightful owners to the retained interests in MBS Trusts that WMI subsidiaries created. And the recoveries from these interests will be distributed after the BK cases are closed and after the FDIC/JPMC settle with Class 17B. (Per AZCowboy (IHub Post#572651), his Class 17B shares have been designated new JPMC Cusips, therefore there’s a possibility that Class 17B will be paid off soon).