Replies to post #477324 on Mr Cooper Group Inc (COOP)

[sometimes_right]

Not all loans run full 30 years term-length... Some get paid off when borrower sells their home... some get paid-down at faster rate... some get refinanced... some default. There are amortization equations that include and adjust for these variables. But all account for the perceived "discrepancy" from all loans being paid-out for complete 30 year term. imo

[LuckyPanda]

Doc, the number is from 30 years amortization. The interest accrual is non linear - more interest payment and less principle paid in the first 10 years and vice versa as time goes on. 2.9 % interest margin on 300 billion amortization returns over 80 billion in the first 9 years.

Of course, not all loans in the portfolio will last 30 years and also some loans will be paid back early. But also, there should be some put back clause for these loans with the originating bank,l - WMB and now JPM. I believe these put back clauses were the reason behind the DB lawsuit of 13 billion in the beginning. Now thay has been settled for much less, we can assume that the portfolio is performing much better than originally anticipated.

The $140 billion over 30 years is just my theoretical 30 years payout estimation. True value lies somewhere between 80 and 140 billion.

Ofcourse, this is assuming Wamu did not own any principle from the 300 billion portfolio and FDIC truly sold all other Wamu assets to JPM for 2.7 billion. If you count for these other hidden value, you are probably looking at another 20 to 30 billion.