Mr Cooper Group Inc (COOP)

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FROM Dmdmd1-Bankruptcy-Remoteness FACTS, True Sale, Non-consolidation

FDIC Presentation & CBA09 agree on ABS “bankruptcy remoteness”
« Reply #1 on: Today at 02:36:29 AM »
Quote
I thought it would be easier to access this very important piece of information by starting a new topic.

FDIC presentation on April 27, 2022:

https://www.fdic.gov/analysis/cfr/bank-research-conference/annual-5th/kayotte-sgaon.ppt.pptx

Slide 2:

“ Bankruptcy-Remoteness:
-True Sale
- Non-consolidation

“Structured financings are based on one central, core principle: a defined group of assets can be structurally isolated, and thus…[is] independent from the bankruptcy risks of the originator”

Committee on Bankruptcy and Corporate Reorganizations of the Association of the Bar of the City of New York“

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Per CBA09 post on IHUB #457584:

“ CBA09
Wednesday, August 03, 2016 1:11:28 PM
Re: BBANBOB post# 457551
Post# of 687217 Go

Bob,

May be, just may be, the addressed assets in court were those within a "SPE". If designed via a specific manner those so called "hidden assets" would be protected from bankruptcy as follows:

The structured solution to the bankruptcy, true sale, and debt-for-tax issues varies by venue. For example, if a U.S. bank wants to securitize receivables, the structure requires two SPEs to avoid a federally taxable asset sale and to achieve off-balance-sheet financing and a bankruptcy remote structure. In the U.S. SPEs are usually organized as trusts (for tax reasons) under the laws of the state of Delaware or of New York. The first SPE is a wholly owned, bankruptcy remote subsidiary of the originator/seller, and the SPE buys the assets in a true sale. The assets are now beyond the reach both of the creditors of the originator/seller and the originator/seller. Wholly owned subsidiaries are consolidated with the originator/seller for U.S. federal tax purposes, so this achieves the debt-for-tax objective. The second SPE is the issuer of the debt (or ABS) and is entirely independent of the originator/seller. It is a bankruptcy remote entity.”
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Per CBA09 post on IHUB:

"CBA09 Tuesday, 12/05/17 07:34:44 AM
Re: hotmeat post# 498530
Post # of 505195

Ref: IMO, WMIIC ""owned/controlled"" these Trusts on behalf of and for the sole benefit of WMI and NOW the WMI Estate/Tracking Markers.

Comments:

SPE/Trust are designed for independent ownership. Not controlled by WMI nor WMIIC.

Yes these SPE's/Trust are the "Crown Jewel" of WMI in it's capacity of being the Parent. Also Facts of great importance:

1) The bankruptcy estate does not have jurisdiction over these SPE's/ Trusts. WMI in its capacity of equity interest does.

2) WMI abandoned it's stock as worthless on record with the Estate. The Estate in turn diverted all future benefits back to WMI. A clever astute move by WMI.

A Turnover action is routine Bankruptcy procedure to bring back to WMI estate what is considered estate assets. And SPE/Trust Income is not part of the estate assets.

We are all good here with the SPE's/Trusts of the Parent - WMI. "

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CBA09 Ihub Post#501056:

"CBA09
Tuesday, 12/19/17 08:57:53 AM
Re: TJ0512 post# 501009
0
Post # of 550816

Ref: Couple of questions for you.

In post #498826 you made the comment

WMIIC's role was two fold:

1) Provide / Solidify assets "MBS" as bankruptcy remote. By way of "WMB" (Originator) to WMIIC (Depositor) to Trust. In effect a TWO TIER protection. Totally taking WMB out of any risk of substantive consolidation.

2) WMIIC being the depositor would also be the provider of credit enhancement. Having what is referred to as residual interest. Holders of subordinate certificates & overcollaterized loans.

Are you making an assumption in your comments above?

Comment:
Yes, assumption. My Point / Big Picture - no matter who is the depositor - Material "Force and Effect" of two tier structures.

Ref: In all of the trusts listed in the DB lawsuit as well as numerous other trusts I have seen WMB or a sub of WMB has been the originator & depositor.

If WMI or WMIIC was neither the originator or depositor for the trusts how does that benefit the estate of WMI/WMIIC?

Comment:

Safe Harbor Assets are removed from the estate. Thus. Trustee / Creditors of WMB have no claim to them. WMI is the parent they do.

Example:

Principal Subsidiaries

• Washington Mutual Bank, FA, a federal savings association, all of the common stock of which is held by New American Capital, Inc., a Delaware corporation, and all of the preferred stock of which is held by Washington Mutual, Inc. New American Capital, Inc. is a wholly owned direct subsidiary of Washington Mutual, Inc.

• Washington Mutual Bank, a Washington state chartered stock savings bank, a wholly owned direct subsidiary of Washington Mutual, Inc.

• Washington Mutual Bank fsb, a federal savings bank, a wholly owned direct subsidiary of Washington Mutual, Inc.

• Long Beach Mortgage Company, a Delaware corporation, a wholly owned direct subsidiary of Washington Mutual, Inc.

Ref: Also, On a previous post #498722 you said:

2) WMI abandoned it's stock as worthless on record with the Estate. The Estate in turn diverted all future benefits back to WMI. A clever astute move by WMI.

Where are you seeing that WMI is receiving any future benefit from WMB with regard to the trusts or are you making an assumption?

Comment:
No assumption. First 1) WMI is the parent and rightful benefit to any / all future value of it's wholly owned subsidiaries. If you have any experience in PSA you will see that they are set up to ensure the "Retained Assets" are in fact retained within the SPE # 1 / SPE/Trust # 2.

I want to make this abundantly clear, sharing from my experience, generally the Parent's bank account is where the funds are first received from PSA accounts when the "Accounts Removable Provision" is triggered. Then the Parent has control and funnels whatever money's it deems necessary back to it's subsidiaries. The Parent's control part is the "Operative Word." As no expressed contract (s) are in force so as to direct the Parent as to distribution with funds received. This adds further protection to avoid substantive consolidation by the courts. "

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IMO…conclusions as of April 30, 2022 @ 0230 EST:

1) ABS/MBS Trusts are bankruptcy remote

2) WMI (parent company) and old legacy WMI equity shareholders (Class 19 & 22) are the beneficiaries (via WMI beneficial interests) of the securitized loans in MBS Trusts created by WMI subsidiaries.



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