Judge Matthew Kacsmaryk in the Northern District of Texas' Amarillo division ruled that Texas Capital Bank failed to prove it was entitled to judgment as a matter of law in its claim the guarantor, Ginnie Mae, had violated the Administrative Procedures Act.

This decision ends an effort to speed a ruling on the APA claim in the case involving the bank's alleged right to certain securitized Home Equity Conversion Mortgage collateral, something other lenders working with Ginnie and a watchdog agency have been eyeing.

Kacsmaryk emphasized Ginnie "can only extinguish an issuer's rights, pursuant to a contract, in mortgages constituting an HMBS pool," separating those from "TCB's lien in RMF's interests in the tails," and confirmed court interest in hearing remaining claims.

"TCB retains its other claims for relief. But summary judgment is not appropriate on its APA claim," Kacsmaryk ruled.

Kacsmaryk previously had denied a Ginnie Mae request for a venue change based on a "related" agreement TCB had with an issuer, rejecting arguments that the pact the Department of Housing and Development affiliated cited was applicable.

While that order acknowledged the point that forum selection clauses in agreements can apply to a "closely related" party like Ginnie, he said a pact between the bank and RMF cited in the case did not meet the requirements due to a restrictive clause.

"Defendants did not establish the factors to satisfy the closely related test to permit nonsignatory enforcement," he said in an opinion and order filed in the case on Sept. 3.

The agreement Ginnie cited "explicitly states that no others may invoke or rely on the terms," Kacsmaryk said.

Ginnie and its representatives had argued that the venue should be Dallas not only because it was specified in the agreement between the bank and RMF, but also because TCB is headquartered there and travel from Washington is more convenient.

The circumstances in the TCB-Ginnie Mae case are linked closely to a key role the latter plays in the mortgage market when a bankruptcy of one of its securities issuers occurs.

Ginnie guarantees securitizations of mortgages that other agencies back at the loan level and may act to seize a bankrupt issuer in order to ensure that payments and cash-flows related to the bonds get to MBS investors.

In this case, when Ginnie terminated the issuer from its reverse mortgage securitization program and took on responsibility for direct servicing of the loans and bonds involved, it also extinguished the disputed tails, which are ongoing borrower draws.

The bank has alleged that the tails were collateral for debtor-in-possession financing it agreed to provide in the RMF bankruptcy.

HUD's inspector general launched an inquiry into Ginnie Mae's handling of Reverse Mortgage Funding's bankruptcy last year.

"The OIG's inquiry will include interviews, data gathering, and analysis of compliance with laws, regulations, policies and procedures related to Ginnie Mae's oversight of RMF," Inspector General Rae Oliver Davis in a press release issued at that time.