Replies to post #504195 on Mr Cooper Group Inc (COOP)

[BBANBOB]

Doesn't that just give ya a WARM FUZZY TINGLE???????????
DOES ME FOR SURE

[Large Green]

Dmdmd2020, this is as close as I have ever seen to proving the moving of monies will soon be moving into one's Escrow-ShareMarker account. You have tied together the Trusts, dates, timelines and the filing of DB information in early Dec/2017.

The statement from DB's filing saying the monies would not move before 2018 to me is indicative of them wanting to push to the monies into Jan/2018 due to tax law change.

You have done a wonderful job of tying all of this together and thank you for sharing your hard, time-consuming and challenging work for all to enjoy!

[austin01]

So is there 36 Billion coming to escrows or what does this mean?

[hotmeat]

It's very interesting that the FDIC kept these MBS's on their books rather than liquidate them as JPM did for others they received from the purchase of WMB.

I am very convinced that WMI held significant interests in these MBS's so JPM could not unilaterally liquidate them as those they did liquidate for approx. $80-$100B.

The only issue now is whether the FDIC can use these loans to satisfy the WMB Notes they are responsible for, which totals about $13-17B or thereabouts.

IMO this cannot be done since these would be Safe Harbor assets and as such they could not be used to pay off Creditors of WMI and especially those of WMB, the bank.

[Dmdmd2020]

Good morning All

The following is my attempt to :

1) narrow down the exact participation percentage of all MBS Trusts (which WMI subsidiaries sponsored from 2000-2008), and I'm going to use many assumptions which will be backed up by some DD accumulated throughout this Wamu saga.

2) determine amount owed to Escrow Marker Holders (rightful beneficial owners of interests in residual Equity Tranches as well as Tranches senior to Residual Tranches)

________________________________

Per post #498320

"For those that want full details of how to value MBS the following lecture by the Yale professor is very enlightening:

Starting at:

13:47-- Historical percentage of Prepayment between 1986-1999 peaked at about 60%. Per JPM 2013 & 2014 annual reports, the percentage of Prepayment/liquidation was more than 76%. IMO...the $165 billion in MBS is probably a lot more than 76% liquidated by now! Which means that liquidated funds are all in cash!


24:27--Model of Prepayment

51:00--What happens to mortgage value as interest rates decrease?

Mortgage value increases as interest rates decrease.

56:06-- Hedging

If you have 75 minutes to spare...it's a great video to watch.

IMO...this is an example of how financial instruments like MBS can make people rich beyond their wildest dreams if you knew that interest rates were going to be at all time lows (I think Bonderman et al. knew exactly where the interest rates were going...and they knew how much profit they can garner)! "

______________

IMO...Conclusion:

1) Historically, September 1993 had a maximum of 60% prepayment of loans, which means that mortgages under MBS Trusts would be liquidated if prepaid.

2) Historical 30 year fixed mortgage rates

https://www.hsh.com/monthly-mortgage-rates.html

September 1993 = 6.919%

September 2008 = 6.646%

The interest rates are very similiar so I'm going to assume that 60% of all MBS Trusts were liquidated.

Therefore:

WMI subsidiaries securitized $692 billion into MBS Trusts from 2000-2008

Liquidation in cash = $692 billion x 60% (estimate liquidated across all MBS Trusts) = $415.2 billion

From post #504195:

"1) As of the seizure (September 25, 2008), WMI had a total of $35,774,139,000 by virtue of total assets from MBS Trusts Assets (which only include assets from tranches senior to "Residual" tranches) "

$35,774,139,000 / $415,200,000,000 = 0.08616 or 8.616% participation in all MBS Trusts

IMO....ultimate conclusions:

1) WMI participating interests in all MBS is between 5.16% to 8.61% (estimated for numbers in September 2008)

If 100% of all MBS Trusts were liquidated on September 2008:

$692 billion x 5.16% = $35.7072 billion (no compounded interest included)

If 60% of all MBS Trusts were liquidated on September 2008:

$692 billion x 8.61% = $59.5812 billion (no compounded interest included)


The residual amount might be bigger than expected because losses were probably mitigated by the trustees of each MBS Trust by virtue of CDS (Credit Default Swaps).

Watch the movie : "The Big Short" which illustrates how DB made money off of Credit Default Swaps.

The residual amount would also increase due to Interest Rate Swaps

and NIMS (Net Interest Margin Securities).



"DEFINITION of 'Net Interest Margin Securities - NIMS'
A security that allows holders to access excess cash flows from securitized mortgage loan pools. In a typical net interest margin securities (NIMS) transaction, excess cash flows from the securitized mortgage loan pools are transferred to a trust account. Investors in NIMS receive interest payments from this trust account.

BREAKING DOWN 'Net Interest Margin Securities - NIMS'
The creation of NIMS is facilitated by the fact that numerous securitized mortgage pools contain subprime mortgages with interest rates that are much higher than the typical rates offered to mortgage-backed security (MBS) investors. The bigger the difference in these interest rates, the more the excess cash flows generated by the MBS and consequently the higher the value of the NIMS. Of course, the value of the NIMS can decline rapidly if there is a significant increase in the default rate of the mortgages held in the MBS, and a subsequent decrease in excess cash flows."


Keep in mind that interest rates went to all time lows:

January 2008 = 6.244%

September 2008 = 6.646%

August 2016 = 3.552%

[Dmdmd2020]

Per the 2011 Congressional subcommittee hearings report:

https://www.hsgac.senate.gov/download/report-psi-staff-report-wall-street-and-the-financial-crisis-anatomy-of-a-financial-collapse

Page 118-119 (PDF page 125-126 of 646)

"Before WCC was able to act as a sole underwriter, WaMu and Long Beach worked with a variety of investment banks to arrange, underwrite, and sell its RMBS securitizations, including Bank of America, Credit Suisse, Deutsche Bank, Goldman Sachs, Lehman Brothers, Merrill Lynch, Royal Bank of Scotland, and UBS. To securitize its loans, WaMu typically assembled and sold a pool of loans to a qualifying special-purpose entity (QSPE) that it established for that purpose, typically a trust.436 The QSPE then issued RMBS securities secured by future cash flows from the loan pool. Next, the QSPE – working with WCC and usually an investment bank – sold the RMBS securities to investors, and used the sale proceeds to repay WaMu for the cost of the loan pool. Washington Mutual Inc. generally retained the right to service the loans. WaMu or Long Beach might also retain a senior, subordinated, residual, or other interest in the loan pool."

_____________________________

IMO...conclusion:

It's explicitly explained that WMI subsidiaries did retain beneficial interests in MBS Trusts other than just Residual Tranches!

[jerrylev]

So is Alice CSNY not you guys trillion dollar goddess anymore because she does not fit you guys agenda or is CSNY/Bopfan still your goddess but Alice Griffin is not?