Replies to post #516850 on Mr Cooper Group Inc (COOP)

[jerrylev]

I am second guessing that there is more than the NOL but there is KKR. So KKR goal is to build a mortgage loan company and they will do it fast, such as WMIH + NSM will have a lot of profit and burn through the NOL in less than 10 years. Right now with the interest rate rising, it is good to get in the mortgage loan business and when interest rate will come down in cycle then KKR will sell those loans at a higher price and probably sell also WMIH + NSM.

It is a rinse and repeat operation by KKR as usual.

Now with all the speculation of our mortgage assets returning and WMIH + NSM will service, I think it has only a minor effect. At the most, we will have 50B - 100B mortgage assets and that's peanut compared to what NSM is servicing right now.

But like in 80-90% of mortgage loan I had with big banks, they were all sold out to another company to service after a few years. And so JPM is not the exception and JPM will farm out its entire mortgage servicing (including the WAMU loans that it "bought" for 1.9B and more) to WMIH + NSM. So that will be a starting point for KKR to propel itself into the mortgage loan business. And the NOL will be useful to shelter all the taxes.

So 20% tax rate * 6B = 1.2B and that will pay for the cost of KKR to build its real estate loan business.

P.S. I assume that assets have a 10% value and so 50B to 100B assets are worth 5B-10B.