Mr Cooper Group Inc (COOP)

[tanjazielman]

Hey AZ,

Thanks for this easily to be missed piece of essential information. Although I'm quite curious how former Nationstar shareholders would accept that they really got screwed. First they got the minority stake in Coop, and now Coop possible getting even more diluted by legacy WMI shareholders because of a different organization structure after bankruptcy.

Talking about corporate structure, I found this document:https://www.google.com/url?sa=t&source=web&rct=j&url=https://docs.google.com/file/d/0ByezbCXwfJlSY2RkOTNjYjctMjlmZS00ODZmLWIzNzMtMDI5NjUxYjRjOWQy/edit%3Fhl%3Den.%26pli%3D1&ved=2ahUKEwiKmaDS3abnAhUHsaQKHSo2BxQQFjAIegQIBhAB&usg=AOvVaw3A0NGB2YIGiqw68Cgji1hY&cshid=1580229718235

Here it is said that WMBFSB was:

A. Well capitalized
B. Purchasing loans and securities from WMB in a tax efficient manner
C. Lent money to WMB through Master note agreements
D. Had MBS and portfolio loans under their umbrella.

My conclusions based on the above facts:

- WMBFSB was a different and seperate entity from WMB, because it could lend WMB capital in a tax efficient manner (Wamu 1031 exchange anyone?)
-WMBFSB still had the 20 billion in cash it was supposed to lend to WMB for its recapitalization, because it was scheduled for Sept the 30th but it went bankrupt and got seized before this date.
-WMBFSb was not WMB and could therefore not be sold to JPM. There are many many documents that support the fact that WMBFSB was Not a part of WMB. The fact that WMBFSB could lend capital to WMB in a tax friendly manner seems to support this. But WMBFSB was a qualified thrift lender and therefore could be seized by OTS and subsequently FDIC. It looks like it couldn't be touched by JPM (because not WMB, proof are the r203 off balance assets recorded on 10k's from JPM), but it could be touched by FDIC. The reorganized company WMIH and WMILT could not touch it either because it was seized by FDIC. Therefore the liquidation of WMBFSB, including repayments of existing MBS, foreclosing and refinancing needed to be done by FDIC. This seems to be consistent with the fact that JPM multiple times stated that repurchasing obligation of the 165 billion in MBS trusts remained at the FDIC.

FDIC has the power of attorney for these assets until Feb 25,2020 as showed in a document presented on this board a couple of weeks ago. It looks like FDIC has liquidated/refinanced practically all of the 165 billion in MBS Trusts, with a lot refinanced/bought by JPM (80+ billion in value at least). Of course they could have losses on the delinquent MBS pools but it could never be more than 20 billion. Then add the 20 billion in cash they had in hand because of the announced WMB capital injection which didn't happen.

And lo and behold, this coming Thursday at 10.00 FDIC board will vote on a Final Resolution rule regarding Safe Harbour Securitizations.

My expectation is FDIC will distribute these Safe Harbour assets using its own Waterfall, so first senior and subordinate note holders and Deutsche Bank get paid and then legacy equity holders In Their Original liquidation preference! So no 75/25 split, because this only applies to WMILT distributions.

Remember:

- FDIC is not released yet!
- FDIC board rules on a final vote regarding resolution of Safe Harbour Securitizations THIS THURSDAY
- the 75/25 division does not apply to FDIC distributions
- The FDIC only can act after bankruptcy is finalized and existing WMILT creditors are satisfied. Now finalized as of 23th of Januari.
- FDIC's power of attorney is only extended with 1 year until 25th of Februari this year
-FDIC also made Libor settlements in name of Wamu.

Then there is the income generated from these (and other assets) which IMO flowed to Wmiic.

So liquidation value went to WMBFSb, and income stream went to Wmiic.

I think the cell captive corporate structure of Coop/WMIH allows legacy shareholders to profit from the future income on remaining MBS assets at former WMBFSB. And because WMBFSB had a different tax entity than WMB, JPM can keep WMB's tax group and Coop can profit from WMBFSB's and/or WMIIC tax group.

Questions?