Bank Argues It Was Not Required to Repurchase Loans Sold to Ginnie Mae
Texas Capital Bank has filed a new motion in its lawsuit against Ginnie Mae, arguing that it was not required to repurchase loans that were sold to the government-backed mortgage agency.
The bank’s original lawsuit, filed in 2019, alleged that Ginnie Mae breached its contract by requiring the bank to repurchase loans that did not meet certain underwriting standards. The bank argued that it was not responsible for repurchasing the loans because they had been sold to Ginnie Mae with a representation that they met the agency’s standards.
In its new motion, the bank argues that the parties’ contract did not require the bank to repurchase the loans in question. The bank also argues that Ginnie Mae’s interpretation of the contract is unreasonable and would impose an undue hardship on the bank.
Ginnie Mae has not yet filed a response to the bank’s new motion. The case is scheduled for a hearing in March.
Background of the Case
Texas Capital Bank is a state-chartered bank headquartered in Dallas. Ginnie Mae is a government-sponsored enterprise that guarantees mortgage-backed securities. In 2012, the bank sold a pool of loans to Ginnie Mae. In 2019, Ginnie Mae demanded that the bank repurchase the loans, alleging that they did not meet the agency’s underwriting standards.
The bank refused to repurchase the loans, and Ginnie Mae filed a lawsuit against the bank. The bank countersued, alleging that Ginnie Mae breached its contract.
Legal Issues
The legal issues in the case are complex. The parties’ contract is a key issue in the case. The bank argues that the contract did not require it to repurchase the loans in question. Ginnie Mae argues that the contract did require the bank to repurchase the loans, and that the bank breached its contract by refusing to do so.
Another legal issue in the case is the issue of reliance. The bank argues that it relied on Ginnie Mae’s representation that the loans met the agency’s underwriting standards when it sold the loans to Ginnie Mae. Ginnie Mae argues that the bank did not rely on the agency’s representation, and that the bank was aware of the risks involved in selling the loans to Ginnie Mae.
Conclusion
The outcome of the case is uncertain. The parties’ contract is a key issue in the case, and the court will need to interpret the contract to determine whether the bank was required to repurchase the loans in question.
The court will also need to consider the issue of reliance. If the court finds that the bank did not rely on Ginnie Mae’s representation that the loans met the agency’s underwriting standards, then the bank’s breach of contract claim may be dismissed.
The case is scheduled for a hearing in March. The outcome of the case could have a significant impact on the mortgage industry.
Kind regards J. Ross.
