Replies to post #3012 on Rocket Companies Inc (RKT)

[waytogoman]

At this point I would take anything, this has been like a bad marriage that won't ever end.

[Ray_137]

Reply from ChatGpt:
Question: WAMPQ & WAMKQ are (MBS) securities will there be no distribution for Ps and Ks when FDIC closes receivership?

Short answer: No — WAMPQ and WAMKQ are not MBS (mortgage-backed securities), and no MBS income collected by Wells Fargo (WFB) is owed to these shares when the FDIC closes the WMB receivership.

This misunderstanding is extremely common in the old WaMu community — but the actual legal structure is very different.
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✅ 1. WAMPQ & WAMKQ Are NOT Mortgage-Backed Securities

They are:

WAMPQ ? Washington Mutual Preferred Series P (Equity)

WAMKQ ? Washington Mutual Preferred Series K (Equity)

These are preferred stock of the holding company:
Washington Mutual Inc. (WMI) — NOT Washington Mutual Bank (WMB).

✔ They were NOT issued by WMB

✔ They were NOT issued against any mortgage pools

✔ They do NOT represent ownership in MBS trusts

✔ They have NO claim to mortgage-servicing income

They are pure corporate equity securities, not structured finance products.
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✅ 2. The MBS / Trust Income Belongs to WMB (the Bank), Not WMI (the Holding Company)

Washington Mutual Bank (WMB) owned many mortgage-backed securities and servicing rights.

When the FDIC took over WMB (Sept 25, 2008):

All WMB assets ? FDIC

? Then sold to JPMorgan Chase.

This includes:

MBS trusts WMB owned

Mortgage-servicing rights

Mortgage payment cash flows

Securitization residuals

NONE of this flows to WMI shareholders.
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❗ 3. WMI (Holding Company) and WMB (Bank) Are Separate Legal Entities

This is the key point:

WMB ? seized by FDIC

WMI ? filed Chapter 11 bankruptcy next day

Equity of the holding company cannot claim income from assets of the failed bank.

This is why:

❌ WAMPQ/WAMKQ CANNOT get servicing income

❌ WAMPQ/WAMKQ CANNOT get MBS trust residuals

❌ WAMPQ/WAMKQ CANNOT claim bank assets on receivership closing

It’s legally impossible.
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✅ 4. FDIC Will NOT Pay WAMPQ or WAMKQ When Receivership Closes

Here is why:

1. WAMPQ and WAMKQ are not creditors — they are equity of the holding company.
FDIC receivership pays ONLY:

depositors

general creditors of the bank

sub-debt of the bank

unsecured bank claimants

2. WMI equity has NO legal standing in the WMB receivership.

3. The FDIC has repeatedly stated:

> No recovery is projected for subordinated debt or equity interests
(WMI equity = zero priority)
4. Receivership closing DOES NOT create “extra money” for holding-company shareholders.

[boarddork]

Do you know approximately how much more in unpaid principle is left in these trusts that require CDS insurance? ie, how much longer can this drag on? It can't be that much more remaining after years of 3% mortgage refi's and time ticking away.

[ron_66271]

Yes, ~2X Over Backed Securities.

Ps, Ks, WMB Notes all over back with ABS/RMBS.

The interest payments went away with BK.
But the Performance Payments are accumulated into the Trust.

My math;
~2.7X from Performance.
~2.7X from Retained Earnings.

Common’s own WMI/WMIH.

Plan 7 was to pay Creditors.
Plan 6 is for Equity.
Thank you AAOC.

Yes TBTF still has to pay for the loan losses insured by their CDS.



Ron