Replies to post #461570 on Mr Cooper Group Inc fka COOP

[clawmann]

That might well be the case, boarddork. But if those assets exist, and they find their way back, would it not be true that they will go to the LT and not to the FDIC receivership?

[boarddork]

...WMI and all banks since year 2000, got to keep all securitization assets off the books to avoid higher capitalization requirements.

New rules in 2010 changed this among other things for any banks still left standing, although the FDIC document states that pre-2010 securitizations under old rule are grandfathered in, as-is.

Ultimately it boils down to every party knew full well the elephant in the room, and every party hoped the others didn't or couldn't leverage their way into it. The SNH's attempted to strong-arm control of the debtors as they've done since the time of the dinosaurs. Fortunately for us, these knuckle draggers shot themselves in the foot.

And if you released as advised by SG/MW and even Rosen, than you will be golden, as the resolution of WMB and its holding company WMI, is finally concluded.

[boarddork]

Need a refresher on safe harbor and legal isolation, to find out how the FDIC can keep valuable assets pledged to ABS, MBS, and RMBS off its books?

"1) the WHAT mortgage assets kept in FDIC 'Safe Harbour' during receiverships

'Safe Harbour'.....you must read this........especially the second link.

I found 2 areas where 1) the FDIC has the authority to securitize receivership loans and 2) FDIC provides safe harbor for mortgage pools OFF THE BOOKS to banks in receivership to protect them from bankruptcy and receivership. I smell the holy grail trail.

Here another puzzle piece. It raises a lot of questions and points to new areas of DD. No wonder there is no court record of Mortgage Pool balances for WMB or WMI - receivership safe harbor allows the bank to keep it off the books for 'protection' from bankruptcy or receivership.


1) Apparently the FDIC Resolution Trust Corp (RTC) or its affiliates has had the authority to securitize pools of mortgages from receiverships. History here: fdic.gov/bank/historical/managing/history1-16.pdf


2) Even more peculiar is that the FDIC isolates securitized loan pools from a receivership for safe harbor to protect it from bankruptcy/receivership and the Insured Deposit Institution (IDI) is allowed to keep it off the books. http://fdic.gov/news/board/10Sept27no4.pdf


"Treatment by the Federal Deposit Insurance Corporation as Conservator or Receiver of Financial Assets Transferred by an Insured Depository Institution in Connection With a Securitization or Participation After September 30, 2010.............

The Rule [color=red][size=18pt]continues[/size][/color] the safe harbor for financial assets transferred in connection with securitizations and participations in which the financial assets were transferred in compliance with the existing section 360.6. The Rule also imposes further conditions for a safe harbor for securitizations or participations issued after a [receivership] transition period......

The Rule defines the conditions for safe harbor protection for securitizations and participations for which transfers of financial assets are made after the transition period; and clarifies the application of the safe harbor to transactions that comply with the new accounting standards for off balance sheet treatment as well as those that do not comply with those accounting standards. .........


The Securitization Rule provided a “safe harbor” by confirming “legal isolation” if all other standards for off balance sheet accounting treatment, along with some additional conditions focusing on the enforceability of the transaction, were met by the transfer in connection with a securitization or a participation. Satisfaction of “legal isolation” was vital to securitization transactions because of the risk that the pool of financial assets transferred into the securitization trust could be recovered in bankruptcy or in a bank receivership. If the transfer satisfied this condition, the Securitization Rule confirmed that the transferred assets were “legally isolated” from the IDI in an FDIC conservatorship or receivership. The Securitization Rule, thus, addressed only purported sales which met the conditions for off balance sheet accounting treatment under GAAP........

Statement FAS 166 provides that transfers of participation interests that do not qualify for sale treatment will be viewed as secured borrowings.....

An FDIC receiver generally makes a determination of what constitutes property of an IDI based on the books and records of the failed IDI. Given the 2009 GAAP Modifications, there may be circumstances in which a sale transaction will continue to be reflected on the books and records of the IDI because the IDI or one of its affiliates continues to exercise control over the assets either directly or indirectly. The Rule provides comfort that conforming securitizations which do not qualify for off balance sheet treatment will have access to the assets in a timely manner irrespective of whether a transaction is viewed as a legal sale.......

If a transfer of financial assets by an IDI to an issuing entity in connection with a securitization is not characterized as a sale and is properly perfected, the securitized assets will be viewed as subject to a perfected security interest. This is significant because the FDIC as conservator or receiver is prohibited by statute from avoiding a legally enforceable and perfected security interest, except where such an interest is taken in contemplation of insolvency or with the intent to hinder, delay, or defraud the institution or the creditors of such institution.....

The Rule also provides that in the event the FDIC repudiates the securitization asset transfer agreement, the FDIC shall have the right to discharge the lien on the financial assets included in the securitization by paying damages in an amount equal to the par value of the obligations in the securitization on the date of the appointment of the FDIC as conservator or receiver, less any principal payments received by the investors through the date of repudiation, plus unpaid, accrued interest through the date of repudiation......



2) the WHERE Purchase and Assumption Agreement section 3.1 - "a"ssets within "A"assets (certain assets of WMI subsidiaries not sold with the "whole bank")

It's been right there in the P&A for 6 years. Section 3.1. "Assets" sold versus "assets" not included in the sale.

The assets WITHIN EACH of the Asset subsidiaries of WMB were not part of the sale price. One of a few valuable things this includes is mortgages held in portfolio throughout various WMB subs such as WAAC, WMMSC, WMBfa, WMBfsb, etc.

This is not including and on top of any assets WMI holds, because we all know that holding company assets can't be illegally seized, but can be held in safe harbor by the FDIC per it's mandate, to protect those assets from creditors in bankruptcy.

also.....
WMBfsb is missing about $40B of money that wasn't retail customer deposits.....is that a "A" or "a"

Etc. etc.


JPM only purchased the servicing rights of WMI,WMB, WMBFA, WMBfsb, Long Beach, WAAC, WMMSC, etc per the WMB P&A and further confirmed in the DOJ settlement agreement Line 13. of http://www.justice.gov/iso/opa/resources/51720131119202421482972.pdf Whereas certain mortgages held in portfolio were not sold to JPM.