Replies to post #697700 on Mr Cooper Group Inc (COOP)

[woodstock_guy25]

Read the transcript there are several areas of concerns in reference to the housing industry and they are using CAUTION!

"The reason we're not giving you more guidance at this point is changes in rates and volatility have been so heightened that we want to make sure when we give you guidance, it's stuff we know we can deliver. So fourth quarter, we're going to have to make a lot of changes and there will be a charge that will be taking, it's not a dramatic number, but a material number. But the other impacts of this transition are yes, included in that number."

[redisnieurt]

The stock trades at below book because nobody wants to deal with the inherit volatility of the mortgage market.

Investors want reliable, steady earnings. Mortgage companies and banks that are mortgage heavy have historically, are currently, and will ALWAYS trade at a lower multiple to the Book value.

Nobody has ever "cracked the code" for how to keep a mortgage business profitable through the business cycle. Mr. Cooper is probably doing the best possible job that has ever been done. Usually, the MSR asset helps hedge against massive losses of an origination business when the housing market cools off. It seems that Mr. Coopers heavy utilization of the Correspondent channel allows them to enjoy a scalable cost structure. Had their volume been "in house" we'd see them being crushed by restructuring costs as they try to downsize the production engine.