RMF approved for $15M in bankruptcy financing
Reverse Mortgage Funding (RMF) and its parent company, Reverse Mortgage Investment Trust (RMIT), have been approved for $15 million in bankruptcy financing by U.S. Bankruptcy Court Judge Mary F. Walrath, who is presiding over its bankruptcy case.
The additional funds will be used to pay for expenses related to winding down the company’s estate, according to Law360 and court documents related to the case.
After resolving objections from Leadenhall Capital Partners, one of RMIT’s warehouse credit lenders, Judge Walrath approved the settlement during a virtual hearing on Wednesday. Leadenhall did not raise additional objections related to the amended agreement during Wednesday’s hearing.
“Well, it looks like it truly is consensual since no one is stepping in to speak,” Judge Walrath said. “It looks like the parties have worked out their differences — at least for today.”
According to Law360, an RMIT attorney called the settlement “a massive step forward in these Chapter 11 cases.”
Parent company BNGL Holdings LLC, an affiliate of Starwood Capital Group that acquired a controlling stake in RMIT in 2021, will provide an additional $8 million in cash on top of the $7 million it has already provided, according to RMIT attorneys.
RMIT won court approval in December to borrow $13 million for payments to reverse mortgage borrowers while RMF continued to wind down operations.
Later that month, RMF’s servicing portfolio was seized by Ginnie Mae, with the GSE assuring existing borrowers that their reverse mortgage payments would be unaffected by the move.
RMF halted reverse mortgage originations in November before laying off the majority of its staff and filing for bankruptcy. Other reverse mortgage lenders, including Mutual of Omaha, Fairway Independent Mortgage and Longbridge Financial, acquired former RMF talent in the wake of its bankruptcy.