Replies to post #627660 on Mr Cooper Group Inc (COOP)

[mwd44]

hotmeat, I agree that WMI was a beneficiary and not the owner of any of the MBS. In fact, I believe I said as much in my other response.

[LuckyPanda]

The beneficiary of the residual value of the SPE's cannot be WMB. Its against securitization rules for the originating bank (WMB) to be a beneficiary of the securitized loans. The beneficiary of the residual value had to be WMI - the holding company...which not only makes logical sense as you would want to protect your income stream from potential bank failure but it also has been confirmed by CBA09 that its the nominal structure for banks securitizing loans.

1) The methodology of protecting the residual value of the securitized loans in remote BK SPE's is not only common practice as confirmed by CBA09 but it also follows SEC securitization rules

2) 95% of Wamu loans were A rated so there is 0 chance that all the loans had a high default rate and there is 0 residual value left for WMI - afterall, the residual interest income from the loans were generating $8.5B/year prior to FDIC seizure. So its very unlikely, all those loans went bad over the last 12 years

3) There are a bunch of big money invested in equity. They would not give up billions in return without challenging the FDIC, if the loans all "supposedly" went bad and had 0 residual income left...so far they have sat patiently on the sideline without a single challenge in court