Suit alleges hidden junior liens, skipped payments and a fire the servicer never heard about
Fannie Mae has sued two Houston apartment owners over nearly $47 million in soured loans, citing hidden junior liens, missed payments and an unreported fire.
The mortgage giant filed the suit on May 7, 2026, in federal court in Houston, taking aim at Falls of Point West, LP and Falls of Gessner, LP - the limited partnerships behind two multifamily complexes in the city. The numbers tell part of the story: a $27.06 million loan on the Falls of Point West Apartments on Parkfront Drive, and a $19.898 million loan on the Falls of Gessner Apartments on South Gessner Road. Both were originated in 2023 by JLL Real Estate Capital, LLC, and both, Fannie Mae says, ended up on its books through assignments dated the same day each loan closed.
For multifamily lenders and servicers, the case is less about the dollar figure than the pattern alleged behind it.
According to the filing, the borrowers quietly stacked the properties with junior debt. Between October 2023 and September 2025, Fannie Mae says, the two partnerships signed five separate deeds of trust and matching assignments of leases and rents in favor of Susbar, Inc. and other third parties, recorded openly in the Harris County real property records. The notes secured by those documents allegedly added up to roughly $11.3 million across the two properties. Fannie Mae says it never agreed to any of it - a problem under the transfer and single-asset rules baked into its standard multifamily loan agreements.
The payment side, the filing says, fell apart shortly after. The Falls of Gessner borrower stopped making its monthly payments in January 2026, and the Falls of Point West borrower followed in February. Around the same time, Fannie Mae alleges, the Gessner borrower swapped out the property's management company without asking - and kept the new manager in place even after a written warning from the servicer dated December 19, 2025.
Then there was the fire. On or about March 12, 2026, a blaze spanning two stories allegedly damaged multiple residential units at Falls of Point West. Loan documents require the borrower to tell the servicer right away when something like that happens. Fannie Mae says it never got the notice.
On March 27, 2026, Fannie Mae sent acceleration letters to both borrowers, calling the full balances due. In a separate motion, it is asking the court to appoint a receiver to step in and run the two properties - a step the borrowers, Fannie Mae notes, agreed to in writing when they signed their deeds of trust, including on an ex parte basis.
The allegations come from a court filing and have not been tested in court; the borrowers have not yet responded, and no determination has been made on the merits. Still, for anyone watching the slow drip of multifamily distress in the Sun Belt, the filing is a useful reminder of how quickly an agency loan file can come apart - and how much of that unraveling tends to show up in the public records long before the first missed payment.
