This is a reminder for people that state that WMI never participated (or own beneficial interests) in MBS Trusts that were securitized by WMI subsidiaries. David Beck, stated in the April 13, 2010 subcommittee hearing that WMI not only retained residual tranches but they also retained tranches senior to the residual/equity tranches.
"Per David Beck, Executive Vice President in charge of WaMu's Capital Markets Division, stated on page 118 to 119 (PDF page 124 to 125) that WMI (WaMu, Long Beach) retained interests in the loan pools that were securitized. The following is the full text:
"At its peak, right before the collapse of the subprime securitization market, WCC had over 200 employees and offices in Seattle, New York, Los Angeles, and Chicago. The majority of WCC employees were based in New York.432 WCC was headed by Tim Maimone, WCC President, who reported to David Beck, Executive Vice President in charge of WaMu’s Capital Markets Division. Mr. Beck reported to the President of WaMu’s Home Loans Division, David Schneider.433
At the Subcommittee hearing on April 13, 2010, Mr. Beck explained the role of WCC in WaMu and Long Beach securitizations as follows:
“WaMu Capital Corp. acted as an underwriter of securitization transactions generally involving Washington Mutual Mortgage Securities Corp. or WaMu Asset Acceptance Corp. Generally, one of the two entities would sell loans into a securitization trust in exchange for securities backed by the loans in question, and WaMu Capital Corp. would then underwrite the securities consistent with industry standards. As an underwriter, WaMu Capital Corp. sold mortgage-backed securities to a wide variety of institutional investors.434
WCC sold WaMu and Long Beach loans and RMBS securities to insurance companies, pension funds, hedge funds, other banks, and investment banks.435 It also sold WaMu loans to Fannie Mae and Freddie Mac. WCC personnel marketed WaMu and Long Beach loans both in the United States and abroad. 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...according to David Beck's testimony in the Subcommittee hearing on April 13, 2010, WMI (the parent of WaMu and Long Beach) retained not only residual tranches in MBS Trusts that were securitized, but they also might have retained Senior, and subordinated tranches."
News 
Market Data 
Discover 
