TCB seeks “to confirm and protect its rights in tens of millions of dollars in collateral on which it has a first-priority lien but that [Ginnie Mae is] diverting to themselves and dissipating on an ongoing basis without any statutory right to do so — all in a context where this Court’s decision denying [Ginnie Mae’s] motion to dismiss rejected all of the justifications [they] have offered for their position,” a court filing reviewed by HousingWire’s Reverse Mortgage Daily (RMD) reads.
By extinguishing Reverse Mortgage Funding (RMF)’s HECM mortgage-backed securities (HMBS) issuer status in late 2022 and assuming control of its servicing operation, Ginnie Mae contended that this action also extinguished TCB’s lien on HECM tail collateral. The bank seeks to bring the attention of the matter to the court.
Ultimately, when the court denied Ginnie Mae’s attempt to dismiss the case earlier this year, it held that certain allegations TCB has made against Ginnie Mae were true — that the company had no contractual right to extinguish its interest in the tails; that TCB is not an HMBS issuer and therefore not subject to issuer rules; and that the assets it seeks to protect are not pools unto themselves.
“There are no genuine disputes of material fact regarding those matters, each of which provides an independent basis to grant summary judgment to TCB on its APA claim,” TCB attorneys claimed.
“Ginnie Mae exceeded its statutory authority because TCB’s interests are in HECM tails rather than mortgage pools,” the filing reads. Citing regulations, the bank contends that “Ginnie Mae can extinguish an issuer’s rights in a ‘mortgage or mortgages constituting the trust or pool against which the guaranteed securities’ are issued — i.e., the rights in mortgages that have been pooled and securitized into HMBS.”
But TCB’s lien is on the tails, which are not the same thing, the bank contends.
TCB also filed a sample version of an order the judge can issue in its favor. As of June 28, there had been no additional filings on the case’s docket and a response remains forthcoming.
Most recently, attorneys for the government filed a motion to change the venue of the case, arguing that a contract clause was violated by TCB’s choice to file the case in Amarillo, Texas, as opposed to Dallas, another application of the tail agreement between Ginnie Mae and RMF.
Attorneys for the federal government also recently made an extensive filing, including a raft of correspondence that took place immediately prior to the seizure of the RMF servicing portfolio by Ginnie Mae.
Government attorneys also requested more time to accommodate discovery requirements due to concerns over trade secrets, an ongoing inquiry into Ginnie Mae’s handling of RMF by the U.S. Department of Housing and Urban Development (HUD) Office of the Inspector General (OIG), and other concerns about the public disclosure of information the company wishes to keep confidential. That request was granted by the presiding judge.
Ginnie Mae denies the vast majority of TCB’s initial complaint, save for material facts of policy, procedure and, in some instances, the standing of each entity’s participation in the HECM and HMBS programs.
