Mr Cooper Group Inc fka COOP

[ron_66271]

Community Reinvestment Act Created the Problem.

CRA forced the banks to make loans to unqualified borrowers.

In 1998 a Chicago bank was sued by an ACORN attorney for not implementing the CRA.
That set the precedent for other banks to make loans to unqualified borrowers.

WMI/WMB got smart and packaged the loans and securitized into Bonds offerings (and Preferred).
The securities were sold to the public. The Trustees were required by the Prospectus to insure the securities. The insurance contract would be Derivatives (CDS).

Now WMI/WMB would also buy theirs and others securities for the cash flow. About $300 a year from a Series R Preferred. WMIIC.
Because the securities are insured, the banks now have near zero exposure to the loans default.
The bank just needs to putback a similar loan back into the pool (securities).


The LIBOR Litigation is all about the Derivatives writer setting.

IMO;
$1.56 Trillion from TBTF banks to settle the Derivative Market Meltdown of 2008.



Ron