Replies to post #487924 on Mr Cooper Group Inc (COOP)

[Johnnyiwantsome]

The safe harbor raises the issue of the disposition of a participation that does not appear
to fall within the express terms of the rules, for example, because of elements of recourse in the
transfer. [color=red]The discussion of the rules by the FDIC in the Federal Register releases accompanying
adoption of the rules supports the view that other transfers would be safe from potential
repudiation It states that: “If the available evidence provides reasonable assurance that the
transferred assets would be beyond the reach of the powers of a bankruptcy trustee or receiver
for the transferor, then a determination that the transferred assets have been legally isolated
[from the receiver] is appropriate.” 65 Fed. Reg. at 49189.
With these statements as a predicate, the FDIC preamble further provides:
[A] transaction that purports to be a sale (not a participation) of all of a financial
asset, even if it includes recourse against the seller, which would be characterized
as a sale under the general legal view, should not need to be encompassed by the
rule; the FDIC would not be able to recover transferred assets as a result of
repudiation. In the case of a completed sale, the FDIC would have nothing to
repudiate if no further performance is required. Even in the case of a sale
transaction that imposes some continuing obligation, a repudiation by the FDIC
would relieve the FDIC from future performance, but generally should not result
in a recovery of any property that was transferred by the institution before the
appointment of the conservator or receiver[/color]