Mr Cooper Group Inc (COOP)

[Large Green]

FABULOUS DUE DILIGENCE FROM Dmdmd1 - ($672 billion were securitized into MBS Trusts between 2000-2008).


Nate Thoma's objection filing is worth reading. I'm just going to focus on Credit Default Swaps.

http://www.kccllc.net/documents/0812229/0812229101123000000000010.pdf

Page 10 of 33:

"38. Sparing the details of the article, suffice it to say that scenarios are conceivable that a creditor could have holdings in two conflicting classes (class one of which is impaired, and class two of which is fully satisfied), while having a credit default swap contract that insures loss on the first class holdings. Thus, the creditor could advocate on behalf of or against a class one recovery and vote according to whatever maximizes his or her return, while other class members are none the wiser. 41 However, this leaves open the possibility that the creditor can act in bad faith (e.g., for an ulterior purpose, etc.) resulting in a situation where that which maximizes his or her profit arises outside of the bankruptcy process. In other words, it is possible for a creditor acting on behalf of a class (such as Settlement Note Holders) to profit outside the bankruptcy by betting against his class members.

39. It can certainly be argued that the above scenarios are merely hypothetical. However, the article describes the problems with voting and confirmation in the instance of "a credit default swap, [where] the party bringing the motion to have the vote designated may argue that the...creditor's sole motivation was not based on its interest as a creditor in the bankruptcy case, but instead rests with the possible financial gains under the credit default swap agreement (i.e., financial gains under a third-party agreement constitutes an ulterior motive)." 42

40. Therein lies the fatal problem with confirmation of the Debtors' plan. Without the ability to query whether a creditor has an ulterior profit motive that lies outside the bankruptcy estate, the court is blind as to these potential bad faith issues. 43"

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IMO...my conclusions as of September 28, 2022 @ 0837 CST:

1) All of Nate Thoma's arguments were very compelling, and obviously swayed Judge Walrath's decision to rule "colorable claims" of insider trading by the Settlement Note Holders (September 13, 2011)

2) Nate Thoma has eloquently detailed the scenario of payouts through Credit Default Swaps (CDS). When a borrower is delinquent on mortgage payments by 91 days, the CDS payout is triggered.

3) Anyone can purchase a CDS on a pool of mortgages in MBS Trusts, meaning that an entity does not have to own the MBS Trusts in order to get paid out through Credit Default Swaps.

4) I contend that WMI, after WMI subsidiaries sold originated loans by securitizing them into MBS Trusts, bought Credit Default Swaps against the loans they securitized. ($672 billion were securitized into MBS Trusts between 2000-2008).

5) Credit Default Swap payout not only pays for the original principal of the loan, but it also pays for all the interest on the term of the loan (i.e. includes all 30 years worth of interest payments on a 30 year loan).

6) Per the DB settlement, I believe there were about 9%-10% that were realized losses. Thus :

$165 billion (total original face of DB MBS Trusts created by WMI subsidiaries) x 10% realized losses = $16.5 billion in CDS payouts on principal alone (this doesn't even include the interest payments on the full term of each loan)

7) Who do you think received those Credit Default Swap payouts?

IMO...my answer is WMI (which is housed in DSTs ready to be distributed to the beneficiaries such as old legacy WMI shareholders, who released their claims, on an "agreed upon" distribution date).

ONCE AGAIN...when Judge Walrath ruled on "colorable claims" of insider trading by the SNHs (September 13, 2011), Tepper et al, and the other SNHs, started buying WAMPQs and WAMKQs because they knew that Class 19 would yield the greatest returns.

It's obvious that Tepper et al released their Class 19 claims, I contend that the other SNHs did the same.

Just Tepper et al's Class 19 claims alone will potentially yield about $53 billion, if the total WMI recoveries is $625 billion.

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FROM Large Green:

Have I told you lately how much more, more and more I love my timely signed releases (by 3/2012) that continues to grow immensely every single day forward?





xxx