Attorneys
representing


Ginnie
Mae
and
the


U.S.
Department
of
Housing
and
Urban
Development
(HUD)
submitted
a
motion
to
change
the
court
venue
where
a
case
with

Texas
Capital
Bank
(TCB)
is
taking
place,
arguing
that
a
contract
clause
has
been
violated
by
TCB’s
choice
to
file
the
case
in
Amarillo,
Texas,
as
opposed
to
Dallas.

This
is
according
to
court
filings
reviewed
by

HousingWire’s
Reverse
Mortgage
Daily
(RMD).

The
government
contends
that
by
filing
the
case
in
Amarillo
instead
of
Dallas,
TCB
has
violated
a
“forum
selection
clause”
in
its
tail
agreement
with

Reverse
Mortgage
Funding
(RMF),
the
agreement
at
the
center
of
the
dispute.

The
government
contends
that
by
executing
a
tail
agreement
with
RMF,
the
bank
agreed
“that
Dallas
County,
Texas,
where
TCB
is
headquartered,
would
be
the
exclusive
venue
for
‘any
litigation
involving
[the
tail
agreement]
or
any
loan
document,’”
the
filing
reads.

“TCB’s
lawsuit
‘involve[s]’
both
the
tail
agreement
and
loan
documents
[…].
TCB
was
thus
obligated
to
file
this
suit
in
Dallas
County.
TCB
disregarded
this
obligation
and
chose
to
file
in
Amarillo,
which
has
no
connection
to
the
litigation.”

The


U.S.
Supreme
Court
has
previously
established
that
forum
selection
clauses
must
be
enforced.
Despite
the
agreement
being
between
TCB
and
RMF,
the
fact
that
the
bank’s
dispute
with
the
government
has
to
do
with
the
tail
agreement
means
that
the
clause
is
enforceable
in
this
instance,
government
attorneys
argue.

Other
precedent
has
established
that
“non-signatories”
to
original
agreements
can
enforce
them
“where,
under
the
circumstances,
the
non-signatories
enjoyed
a
sufficiently
close
nexus
to
the
dispute
or
to
another
signatory
such
that
it
was
foreseeable
that
they
would
be
bound,”
attorneys
said
in
citing
prior
case
law
from
the

Fifth
Circuit
Court
of
Appeals.

Ginnie
Mae
also
owns
the
assets
that
are
at
the
heart
of
the
agreement,
attorneys
said,
and
the
original
agreement
specified
“that
TCB’s
rights
and
interests
related
to
the
Collateral
are
subject
to
Ginnie
Mae’s
rights.”

The
government
made
the
filing
Saturday,
June
15.
As
of
mid-day
Monday,
TCB
has
not
filed
any
motion
in
reply,
although
the
government
specified
that
the
bank
was
opposed
to
the
motion.

TCB

brought
its
suit
against
Ginnie
Mae
in
October
2023,
alleging
the
government-owned
company
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.”

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

In
subsequent
filings,
Ginnie
Mae

denied
the
accusations
outside
of
material
facts
related
to
executed
agreements
between
all
parties
and
the
regulations
governing
the
HMBS
program.
While
Ginnie
Mae
sought
to
have
the
case
dismissed,
the
presiding
judge

allowed
the
bulk
of
the
case
to
continue
and
dismissed
only
small
portions
of
the
initial
complaint.

Last
week,
government
attorneys

requested
an
extension
of
the
deadline
to
submit
discovery
materials
relevant
to
the
TCB
case
from
mid-June
to
mid-July.
They
said
that
an

ongoing
audit
from
the
HUD
Office
of
the
Inspector
General
(OIG),
as
well
as
confidentiality
concerns,
necessitated
more
time
to
submit
documents
to
the
court
record.

The
extension
request
was
unopposed
and
Magistrate
Judge
Lee
Ann
Reno
approved
it
on
June
13.
Late
last
week,
the
government

filed
an
extensive
collection
of
documents
related
to
the
actions
leading
up
to
its
seizure
of
RMF’s
servicing
operation
in
December
2022.

Related