A bankruptcy judge approved a new $34.5 million loan to allow Reverse Mortgage Investment Trust Inc. to continue operating under chapter 11 after rising interest rates disrupted its business, WSJ Pro Bankruptcy reported. In an emergency hearing Thursday, Judge Mary Walrath of the U.S. Bankruptcy Court in Wilmington, Del., granted approval for a $44.5 million loan. Of the total, $10 million was already advanced to Reverse Mortgage by Leadenhall Capital Partners LLP, one of its lenders. The $34.5 million in new financing is being provided by Leadenhall and Reverse Mortgage’s parent company, BNGL Holdings LLC, a Starwood Capital Group affiliate. The funds are critical for Reverse Mortgage to “deliver money into the hands of consumers” and to “mitigate disruption to borrowers and facilitate a smooth transition” of its mortgage-servicing platform to reverse-mortgage provider Longbridge Financial LLC, said Anthony Grossi, a lawyer representing the bankrupt company. Bloomfield, N.J.-based Reverse Mortgage is one of the U.S.’s largest originators and servicers of reverse mortgages, which enable people — typically seniors — to tap into the equity built up in their homes. Most of the mortgages originated by the company are insured by the Federal Housing Administration. Reverse Mortgage securitized those loans and sold them to investors to generate revenue. The company also originated and serviced other loans.
