Judge denies Texas Capital Bank’s motion for summary judgment in Ginnie Mae dispute

An attempt to seek summary judgment in a case brought by Texas Capital Bank (TCB) against Ginny Mae The lien related to the deferred mortgage was denied by Presiding Judge Matthew Kacsmaryk, according to a court filing reviewed by HousingWireReverse Mortgage Daily (RMD).

TCB sought summary judgment in a court filing this past summer, which would have allowed the presiding judge to decide part of the case before trial. TCB sought this result in the first count of its original court complaint, alleging that Ginnie Mae violated the Administrative Procedures Act (APA) by extinguishing its primary obligations on certain reverse debt securities.

Kacsmaryk found the argument unpersuasive, according to a court filing dismissing TCB’s request.

In its original complaint, TCB alleged that Ginnie Mae “liquidated, without consideration, TCB’s first priority lien of tens of millions of dollars in collateral from Federal Housing Administration (FHA) sponsored Home Equity Conversion Mortgage (HECM) program.”

This happens when Ginnie Mae forecloses on an insolvent lender Reverse Mortgage Funding (RMF) from its HECM-backed Securities (HMBS) program and take control of the former lender’s servicing portfolio in December 2022.

Ginnie Mae was “within its rights to extinguish and terminate RMF and take full ownership of the [the] mortgage portfolio,” Kacsmaryk said in the filing.

Instead, Ginnie Mae chose to seek an alternative solution that would not require consideration of the distressed lender’s portfolio. In doing so, Ginnie Mae eliminated TCB’s “tail” interest on reverse mortgages, or the additional amounts that can be added to a HECM loan after it becomes its original collateral.

“GNMA and TCB do not sign a contract that expressly acknowledges GNMA’s rights in the tailings,” the judge wrote, later adding that “the contract provides the power to cancel. he did they exist. The binding contract is the Guarantee Agreement between RMF and GNMA. GNMA never claims to directly cancel TCB’s rights. Instead, GNMA is disabled RMFs rights – some of which are RMF granted by TCB. TCB’s interests in tails are only available to RMF.

He added that TCB “fully understood” that Ginnie Mae could extinguish its interest in tailings, adding that it meets the requirements of the APA as mandated by Congress.

“TCB reserves its other claims for relief,” the judge said. “But summary judgment is not appropriate for its APA claim against GNMA because TCB has not demonstrated that it has jurisdiction as a matter of law.”

The 2025 deadline has been shortened in recent weeks, as a magistrate judge recently ruled that the parties should be ready for trial in September 2025.

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