Texas Capital Bank opposes summary judgment motion in Ginnie Mae suit

That filing also claimed that TCB “no longer has any remaining rights or interests in the property at issue in this case.” This stems from an October 2024 decision by Judge Matthew Kacsmaryk, in which TCB alleged that Ginnie Mae violated the Administrative Procedures Act (APA) by extinguishing its first-priority liens over certain reverse mortgage collateral.

The judge disagreed, instead saying that Ginnie Mae “was within its rights to extinguish and terminate RMF and take absolute ownership of [the] mortgage portfolio.”

In the new filing issued on Feb. 21, TCB said the government’s assertion “that Ginnie Mae had statutory authority to extinguish TCB’s lien” on the collateral at issue is “incorrect.” Congress clearly laid out Ginnie Mae’s authority to pools backing securities that the company guarantees, the bank argued.

“[The government] cannot skirt Congress’s limitations by arguing that the tails are part of an ‘indivisible’ mortgage,” the bank said in its filing. “That position conflicts with the statute and would grant Ginnie Mae a windfall — the right to $28 million worth of collateral that Ginnie Mae never guaranteed and that TCB provided based on Ginnie Mae’s assurance of protection.”

The bank also claims that the nature of Ginnie Mae’s Home Equity Conversion Mortgage (HECM)-backed Securities (HMBS) program itself “demonstrates that the mortgages are divisible because it is a fundamental feature of the program that part of the mortgages are in the securitization pool and others (like the tails) are not.”

Government attorneys argue to the contrary, but TCB instead claims that the complexity of both the HECM and HMBS programs “warrants a full examination of the facts, including expert opinion, before any determinations are made on how to apply Ginnie Mae’s statutory authority to these structures.”

Acceding to the government’s request for summary judgment would “enable Ginnie Mae to wipe out tens of millions of dollars of TCB’s assets when TCB did absolutely nothing wrong without even allowing TCB to put Ginnie Mae to its proof at trial,” the bank said. “This Court should deny Defendants’ summary judgment motion.”

In their own filing last month responding to Kacsmaryk’s October ruling, government attorneys contended that TCB “no longer has any remaining rights or interests in the property at issue in this case.”

That ruling proves “fatal to TCB’s two remaining counts” and entitles Ginnie Mae to summary judgment, the government contended. It believes that other elements of the bank’s complaint are invalid since “TCB cannot prove it had any property rights that were interfered with.” Government attorneys also argue that any potential claim that the government did not pay required draws on the loans is refuted by the official record.

In a previous joint filing requesting additional time, the government was given until mid-March to respond to TCB’s filing that challenged the summary judgment.

This is the latest in a lawsuit that was initially filed in October 2023. TCB originally alleged that Ginnie Mae had “extinguished, in return for no consideration, TCB’s first priority lien on tens of millions of dollars in collateral stemming from the [FHA]-sponsored [HECM] program.”

TCB contends this was after Ginnie Mae allegedly turned to TCB to avoid “a catastrophic disruption of the HECM program.” In return for lending money to RMF, TCB alleged it received a first priority lien “on certain HECM collateral.” The bank described it as “critically important,” since without it, the only collateral TCB could rely on was a bankrupt company.