Replies to post #416028 on Mr Cooper Group Inc (COOP)

[tanjazielman]

Simple.

WMI/WMB had more assets than is comprehensible for many.

The portfolio loans WMI/WMB had were written already.

Because WMB wasn't a bank anymore, there was no need to leverage the loans with deposits.

JPM got 180+ billion in deposits, so could write more loans (for only 1.9 billion!). Although it is a liability, it expands JPM's options.

The loans JPM had under "control" in itself were off balance (ask yourself the question why they were off balance IF indeed they "took over" these loans), which is obviously clear from JPM records.

They collected monthly interest, and any liquidation or sale or repayment or whatever was cash flowing into JPM's pocket.

WRONG!

In the P&A (Schedule 3.2) it says exactly what JPM has to do for indemnification regarding the FDIC Receiver.

And because 38 billion in mortgages are not liquidated or repayed or monetized yet in any other way, it returns to the FDIC.

FDIC now has the responsibility to maximize the value on the 38 billion in assets. ALSO WHY IS THIS 38 BILLION IN UNLIQUIDATED MORTGAGES RETURNED TO THE FDIC, AND WHY WOULD THAT NOT BE THE CASE FOR THE LIQUIDATED AND REPAID/SOLD MORTGAGES? What is the difference here? They were both off balance!

We all know the P&A was supposed to close on September 2014, we also know the WaMu-subsidiaries were eradicated from the JPM subsidiary list, and we know the off balance figures which were made public in 2014.

Coincedence? I think not.

Will any of the 127 billion in cash go to JPM. I think not.

Why? Because the P&A states that JPM needs to indemnify FDIC receiver with any cash, loans, interest or whatever.

And where will that eventually go to? Exactly, our beloved escrows.

Lehman Bros and Bear are no comparison. Lehman had a lot of assets, but also a mountain of debt. Bear is another story, they actually got taken over by JPM and got dollars for their shares.

The WaMu-story is a unique one-of-a-kind story. I guessed you would have figured this by now.

127+ billion in cash is returned to the receiver, they will deduct the costs, deposit claims and pay off other creditors before equity in the waterfall.

The overflow will go to our escrows. And that's not it. FDIC will take care of another 38 billion in defaulted mortgages, which is pure cash. We will not see all of it back, because of lower liquidation value. But remember:

There are no losses to be made on mortgages that already have been written. It is an asset and not a liability. This is essential to comprehend what is going on here.