The lawsuit contends Ginnie Mae canceled liens of millions of dollars in collateral after Texas Capital agreed to make a loan to the failed company.Federal housing authorities persuaded Texas Capital Bancshares Inc. to help with the fallout from a bankrupt reverse-mortgage provider, then went back on their promises of financial support, the Dallas-based bank said in a lawsuit Wednesday.
The Government National Mortgage Association, known as Ginnie Mae, canceled liens on tens of millions of dollars in collateral after the bank agreed to make a loan to Reverse Mortgage Funding LLC, according to the lawsuit. The loan was intended to prop up customers of the failed company, which was one of the largest providers of government-backed reverse mortgages.
“After inducing TCB to lend tens of millions of dollars so as to rescue RMF, thousands of retirees, and the politically important” Home Equity Conversion Mortgage program, Ginnie Mae nullified the bank’s priority lien, according to the lawsuit, which was filed in federal court in Amarillo. “Ginnie Mae seeks to declare by fiat that TCB’s only recourse for repayment is RMF — a bankrupt entity with few if any assets.
“If permitted, Ginnie Mae’s position will likely trigger an unwillingness on the part of lenders to extend financing necessary for millions of current and future seniors to fund their retirement, and will threaten the viability of the HECM program,” the company said in the complaint.The HECM program, administered by the U.S.
Texas Capital is the 64th largest lender in the U.S., with almost $29 billion in assets as of June 30. Over the past 2 1/2 years, the bank has undergone a transformation in strategy under new leadership with a focus on being a full-service financial services firm. The company expanded into investment banking, treasury and wealth-management services after recovering from a volatile period amid a terminated merger deal in 2020.
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