The bank then complained that Ginnie Mae reversed its course after a few weeks and left TCB empty-handed. It said that Ginnie Mae had nullified the bank’s priority lien after TCB had already loaned millions of dollars for the sake of RMF, affecting retirees and the Home Equity Conversion Mortgage (HECM) program.
The HECM program supported the retirement security of senior citizens by providing them the opportunity to tap equity in their properties for expenses like home repairs or even general living costs.
Given that loans made under the program only made up a small percentage of the mortgage industry, large banks do not usually operate within that part of the market. In the last fiscal year, the number of loans made only added up to 27,397 – a significant drop from the 64,489 in the previous fiscal year.
Texas Capital said that the actions made by Ginnie Mae may force it to stop making reverse mortgages.
“If permitted, Ginnie Mae’s position will likely trigger an unwillingness on the part of lenders (including TCB) to extend financing necessary for millions of current and future seniors to fund their retirement and will threaten the viability of the HECM program,” said the firm in the complaint.
Source: mpamag.com