Bankruptcy judge approves Celink stipulation in RMF bankruptcy case

Key Takeaways:

– The presiding judge in the RMF bankruptcy case has approved an agreement between RMF and Celink to resolve an administrative claim made by Celink against RMF’s estate.
– The agreement settles on a figure of $78,195, which is only 21.6% of the originally sought amount by Celink.
– The payment is considered an administrative expense claim and is expected to be paid within 10 calendar days after the approval of the revised figure.
– The agreement resolves all related issues stemming from this specific claim and satisfies all claims that Celink has against RMF.
– Celink still reserves the right to bring additional claims against RMF’s estate in the future during the bankruptcy’s post-petition period.
– The RMF bankruptcy case has had a significant impact on the reverse mortgage industry, including Ginnie Mae assuming control over RMF’s portfolio of HECM-backed Securities.
– RMF’s bankruptcy status complicates other ongoing litigation involving Celink and RMF. Celink continues to defend itself in these cases.


The presiding judge in the ongoing bankruptcy case of Reverse Mortgage Funding (RMF) has approved a stipulation that would resolve an administrative claim made against the company’s estate by reverse mortgage servicing company Celink, authorizing both companies to consummate the agreement.

The new agreement

The agreement, stemming from a proof of claim filed against RMF by Celink in May 2023, originally sought $361,726 from the lender based on a subservicing agreement entered between both companies in late 2016.

According to the court filing reviewed by RMD, both parties engaged in “good-faith negotiations” and settled on a figure of $78,195, or only 21.6% of the originally sought amount. The new figure is considered an “administrative expense claim,” according to the stipulation, and is expected to be paid by the RMF estate to Celink 10 calendar days following the approval of the revised figure.

“No other amount or claim shall be allowed or payable to Celink as an administrative expense or allowed unsecured claim in these cases solely with respect to the [relevant claim],” the order said. “For the avoidance of doubt, nothing in this stipulation shall affect the allowance or payment of Celink’s remaining claims as an administrative expense or allowed unsecured claim.”

Under the terms of the stipulation, Celink and RMF also agreed that this settles any and all related issues stemming from this specific claim, and that the newly-agreed payment “shall fully resolve and satisfy all claims that Celink has, has had, may have or may claim to have against [RMF], wind-down debtors, or the [RMF bankruptcy] plan administrator arising from or relating to [this specific claim].”

The agreement does not preclude Celink from bringing other additional claims against the estate of RMF in the future during the bankruptcy’s post-petition period, however. Nor does it preclude the bankruptcy plan administrator from challenging any additional claims that may arise at that time.

Presiding Judge Mary Walrath approved the stipulation in an official order on Jan. 5, which would place the deadline for the estate’s payment to Celink on Jan. 15.

When the company originally announced its intention to file for bankruptcy at the end of 2022, the RMF case became a leading reverse mortgage industry story, maintaining its significance for more than a year.

In addition to removing a major player from the industry, the bankruptcy also ultimately forced Ginnie Mae to assume control over its extensive portfolio of Home Equity Conversion Mortgage (HECM)-backed Securities (HMBS), straining the government-owned corporation’s resources as well as reverse mortgage industry liquidity in the secondary market.

The ongoing story of the RMF bankruptcy

RMF’s former portfolio continues to take up a sizable portion of total outstanding HMBS, and Ginnie Mae’s own actions in extinguishing the lender from the HMBS issuer program and assuming the portfolio have also exposed the U.S. Department of Housing and Urban Development (HUD) to greater risk this year according to a report from the HUD Office of the Inspector General (OIG).

The HUD OIG has also opened an inquiry into the specifics of RMF’s extinguishment from the HMBS program.

RMD reviewed a complaint that names Celink and RMF as defendants in other ongoing litigation, including a case alleging “systemic violations by Celink and RMF of borrower protections provided by standard HECM loan agreements, federal laws, and New York State laws.”

Another case alleges that Celink and RMF improperly paid property taxes for reverse mortgage borrowers before they became due without legal justification or notice. RMF’s bankruptcy status complicates both cases according to court filings. Celink continues to defend itself in both cases.

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